:00:15. > :00:20.The first London Olympic fiasco. With a fortnight to the games, a
:00:20. > :00:26.private security firm confesses they can't cope. G4S has let the
:00:26. > :00:31.country down, and we have literally had to send in the troops. We will
:00:31. > :00:34.ask the expert what has gone wrong, and we will reveal that the company
:00:34. > :00:38.in question has struggled to manage sporting events in the past.
:00:38. > :00:42.have asked for a living wage in the public sector. As you know, I think
:00:42. > :00:48.this is a good and attractive idea. Good intentions in opposition, but
:00:48. > :00:51.now he's in power, we will discuss his dirty laundry in public, as the
:00:51. > :00:55.people who clean up after ministers are still asking for a living wage.
:00:55. > :00:58.Please, I need a help from them, I need more money from them. Do you
:00:58. > :01:03.think they can afford it? Why not, yes.
:01:03. > :01:05.And have a century after one of the most dramatic nights in British
:01:05. > :01:10.politics, Michael Cockerell considers the parallels for the
:01:10. > :01:14.Prime Minister, and the pasty tax. The older people get their pleasure,
:01:14. > :01:20.and I think we should get our pleasures. Do you reckon you are
:01:20. > :01:30.being got at? Yes. What about you, ice-cream a half penury more?
:01:30. > :01:34.
:01:34. > :01:38.think it is a dire bloody liberty. It can be disconcerting when you
:01:38. > :01:44.see someone you don't expect. A word of warning, if you are lucky
:01:44. > :01:49.enough to have a ticket for the Olympics, you might have your bag
:01:49. > :01:53.search, or your Pepsi confis fated, not by a security guard but a
:01:54. > :02:01.battle scarred squaddy. For the feel Olympic organisers and the
:02:01. > :02:06.Home Office that is not all good, then.
:02:06. > :02:09.It's supposed to be the nation's great global games, but it is being
:02:09. > :02:14.protected by a private security firm now accused of letting Britain
:02:14. > :02:20.down. And Newsnight has found that G4S has a track record of being
:02:20. > :02:23.accused of falling short at show piece events. This morning's papers
:02:23. > :02:28.were full of what was termed the farce of needing the army to bail
:02:28. > :02:33.out the Olympics. In the Commons, Labour used their now familiar line
:02:34. > :02:37.for Government failure. This really look like another huge Home Office
:02:37. > :02:42.shambles. On Monday, the Home Secretary was asked specifically
:02:42. > :02:48.about recruitment at G4S, and she said that the Home Office had put
:02:48. > :02:51.in place a number of assurance processes to insure there is robust
:02:51. > :02:57.security planning, we have been testing our plans authorisely and
:02:57. > :03:01.are confident that our partners will -- thoroughly, and and are
:03:01. > :03:08.confident in our partners, so confident two days later they
:03:08. > :03:14.called in the troops. Theresa May said it was no shambles, but
:03:14. > :03:18.acknowledged that the troubles from G4S had only just emerged.
:03:18. > :03:22.received assurances from G4S until recently the gap in the numbers was
:03:22. > :03:25.only crystalised yesterday. We have, as I said in my statement,
:03:25. > :03:29.monitoring, taking place throughout the process of this contract, and
:03:29. > :03:34.we have, obviously, been testing and challenging the assurances that
:03:34. > :03:37.we have been receiving from G4S. week after chopping a great lump
:03:37. > :03:42.off the military, the Government calls on a great chunk of the
:03:42. > :03:47.military to save the day. One former army officer, now chairman
:03:47. > :03:51.of an all-party security committee, told us, it had been obvious for
:03:51. > :03:54.week, G4S wasn't up to the job. What I was concerned about was
:03:54. > :03:59.there were a large number of people, there was a raw material, if that
:03:59. > :04:02.is the right word to use, who were qualified to do the work, plane of
:04:02. > :04:05.whom were already vetted, but -- many of whom were already vetted,
:04:05. > :04:10.but the money offered was not enough to bring them forward in
:04:10. > :04:13.numbers. First point. Secondly, there seemed to be overweaning
:04:13. > :04:17.bureaucracy from the company to get the people signed up. So what you
:04:17. > :04:22.are saying, from what we have heard, is G4S have bitten off more than
:04:22. > :04:26.they can chew? I think they have got ambition mixed up with ability.
:04:26. > :04:30.All day we have heard from people who bear that out. This man was
:04:30. > :04:35.interviewed six months ago and been on a week's security course, but
:04:35. > :04:38.still, no word. I'm sitting here, ready to go, ready to be a security
:04:38. > :04:41.guard, and they are saying they don't have enough staff. They
:04:41. > :04:45.haven't got the accreditation, I have asked them again and again,
:04:46. > :04:52.please can I have a job, just get me the piece of patcher work and I
:04:52. > :04:57.can do it, I'm -- paperwork, and I can do it. I'm ready to go. This is
:04:57. > :05:01.an embarrassment for a company that bills itself as the world's largest
:05:01. > :05:07.security firm. This is not the first time G4S has been ayes cuesed
:05:07. > :05:11.of serious shortcomings around big sporting events. There was last
:05:11. > :05:17.year's Wimbledon. Security is usually guaranteed by the low-key
:05:17. > :05:22.presence of military personnel. But the entrance in and out of
:05:22. > :05:26.Wimbledon is handled by G4S. It is this that gave rise to serious
:05:26. > :05:29.criticism and an internal investigation by G4S after last
:05:29. > :05:39.year's tournament. G4S confirmed the complaints had been included in
:05:39. > :05:45.
:05:45. > :05:51.So the military already heavily involved in bolstering security,
:05:51. > :05:55.are now effectively shoring up the whole operation. Patrick Mercer
:05:55. > :05:59.says it is a bitter pill. I have to say, that if you want a force,
:05:59. > :06:03.where when you snap your fingers that it jumps to it and does the
:06:03. > :06:07.job properly and capably, then you have to have enough men inside the
:06:07. > :06:12.force to do it. My old regiment, for instance, has just been told
:06:12. > :06:17.that they wopbtd be getting their - - won't be getting their post-
:06:17. > :06:22.Afghanistan leave, and most men are coming to do Olympic security with
:06:22. > :06:27.their P45 in their back pockets, because a battalion from that
:06:27. > :06:32.regiment will be cut. That isn't good for morale. Two weeks from
:06:32. > :06:37.tomorrow the games begin, there is great stress that security won't be
:06:37. > :06:40.compromised. The chairman and chief executive of G4S, with hundreds of
:06:40. > :06:42.millions of Government contracts, will be summoned to the Commons
:06:42. > :06:49.next week to explain what has gone wrong.
:06:49. > :06:53.We asked to speak to G4S, to LOCOG, to the Home Office and the Ministry
:06:53. > :06:58.of Defence about the last-minute changes, no-one of made available.
:06:58. > :07:08.We asked if they could send a soldier, and they hung up! Let's
:07:08. > :07:08.
:07:08. > :07:14.ask for Tessa Jowell, Lord Carlyle, the former head of the army, we
:07:14. > :07:17.hope soon will join us. Is there not an argument for saying, there
:07:17. > :07:22.may have been a problem, it has been sorted, let's get on with the
:07:22. > :07:29.games? We should say that, and we enjoy the games. The fact it has
:07:29. > :07:34.been sorted is no thanks to G4S, or robust contractual arrangements.
:07:35. > :07:37.All the work that people like Dame Tessa have done to prepare what
:07:38. > :07:41.will be a wonderful Olympic Games, are beginning to be affected by
:07:41. > :07:46.this kind of criticism. I hope those who are guilty of the
:07:46. > :07:49.failings will be called to account. This morning I heard on Radio 4
:07:49. > :07:54.countless e-mails being read out, from people who are actually
:07:54. > :08:00.employed by G4S, who are not being told where to go, or what to do.
:08:00. > :08:05.That is totally unacceptable. Thank heavens for the British services.
:08:05. > :08:11.Tessa Jowell, would you buy a used car from G4S? They certainly
:08:11. > :08:14.haven't emergeded from this well. I think that what happened --
:08:14. > :08:18.emergeded from this well. What happened is they went into a sort
:08:18. > :08:22.of denial, not admitting to the scale of difficulty they were
:08:22. > :08:32.having. In the scheduling of the people that they were recruiting,
:08:32. > :08:38.hence these no-shows at a number of the venues. Have you heard whispers,
:08:38. > :08:41.is it behind the scenes chatter? But I do think that, you know, all
:08:41. > :08:46.these e-mails, and I think we have all been getting them today, from
:08:46. > :08:51.people who have signed up to be considered as volunteers with G4S,
:08:51. > :08:56.they should all be looked at. And in a way, what is needed now is a
:08:56. > :09:00.very quick audit of G4S's performance and capability. I
:09:00. > :09:04.absolutely agree with Lord Carlyle that the right thing is to bring
:09:04. > :09:08.the army in, the soldiers in. I was out at the Olympic Park today. They
:09:08. > :09:13.were being deployed around the place. Conducting themselves in a
:09:13. > :09:18.very dignified and effective manner. I am not concerned that the games
:09:18. > :09:25.won't be safe and secure. I think that we will get to that at the
:09:25. > :09:29.opening ceremony, in two weeks time, by a route that we wouldn't have
:09:29. > :09:34.wished. With this hiatus with G4S. This audit you are talking about,
:09:34. > :09:38.what form should that take, how quickly should it happen and to
:09:38. > :09:42.what end? At this stage it has to be very speedy. I think it is worth
:09:42. > :09:47.getting a measure of the degree to which these claims about the poor
:09:47. > :09:51.performance of G4S, by people who have been writing into media
:09:51. > :09:56.outlets, and Members of Parliament and so forth, are tested against
:09:56. > :10:01.the G4S systems. That can be done quickly now. But obviously, there
:10:01. > :10:05.has to be a proper postmortem. I think that will have to be after
:10:05. > :10:08.the games. My main concern now is that the solution is put in place.
:10:08. > :10:14.I think the Government have come forward with that proposaled today.
:10:14. > :10:17.We support that, and I think that puts -- proposal today, we support
:10:17. > :10:23.that and I think that puts an end to it.
:10:23. > :10:27.It seems yesterday and today a lot of people involved in the periphery,
:10:27. > :10:30.the underlings works for G4S knew about the problems. The people
:10:30. > :10:36.organising the games and the Home Office had no idea? Yes, of course
:10:36. > :10:40.it is a matter of concern the fact that the company have been called
:10:40. > :10:45.to a Select Committee next week will begin to provide answers to
:10:45. > :10:50.those questions. At this point, at an Olympic Games, it is the most
:10:50. > :10:55.complex and demanding logistical exercise in peacetime. And the
:10:55. > :10:58.focus has to be knitting together, every single part of that complex
:10:58. > :11:02.operation. That is why the Government's decision today is
:11:02. > :11:06.right. I think we do need to know from LOCOG why they put so many
:11:06. > :11:10.eggs in one basket. G4S are far from the only large security firm
:11:10. > :11:13.in this country, there is a real question about the tendering
:11:13. > :11:21.arrangements that were followed here. I hope the public are not
:11:22. > :11:25.going to be made to pay for these mistakes. General Lord Dannett can
:11:25. > :11:28.join us, could this have happened if the army was organising the
:11:28. > :11:34.games from the start? That is a very broad question. It is worth
:11:34. > :11:37.going back, if you have a moment to 2005, when London was first awarded
:11:37. > :11:41.the games. I was the Commander-in- Chief, the land commander at the
:11:41. > :11:46.time, we asked very politely of the Government what our role would be
:11:46. > :11:49.in the games. We were told pretty unequivocally this would be a
:11:49. > :11:53.civilian-run games and the military involvement would be pretty small.
:11:53. > :11:57.As I have heard a comment made, about the biggest logistical demand
:11:57. > :12:04.placed on a nation for a very long time. We have some experience in
:12:04. > :12:09.doing that. So, it is unhelpful, Dame Tess was right to say let's
:12:09. > :12:13.leave it until after the games to have a bit of an inquiry. The
:12:13. > :12:18.important thing is to make sure we have a safe and successful games to
:12:18. > :12:25.celebrate and be part of. The Armed Forces are hugely committed to it,
:12:25. > :12:29.now 3,000 more are committeded, so be it. A bit disa-- are committed,
:12:29. > :12:32.so be it. A bit disappointing for those who thought they were on
:12:32. > :12:37.holiday, never mind, they will get on with it, we will make the games
:12:37. > :12:42.very good. There are issues. I think the size of the task was
:12:42. > :12:45.understatemented, and maybe it could have been -- underestimated,
:12:45. > :12:49.and maybe it could have been done differently. That is for after the
:12:49. > :12:54.games. Let's put our backs into the game, and the soldiers and airmen
:12:54. > :13:00.will do that. We are looking forward to it. Who do you blame for
:13:00. > :13:04.this problem? I'm not in the blame game F I'm absolutely honest, look
:13:04. > :13:08.-- if I'm absolutely honest, looks at the games in Canada and
:13:08. > :13:12.Australia, the games have always relied heavily on the military. It
:13:12. > :13:15.would have been fairly obvious this would have come about at some stage.
:13:15. > :13:21.It probably would have been better if it had come about sooner rather
:13:21. > :13:26.than later. I can fully understand the desire to make these friendly
:13:26. > :13:30.games, civilian-led games, with a soft face on it. 2005 was well
:13:30. > :13:34.before the crash of 2008, all before a lot of things that have
:13:34. > :13:38.happened. But, we are where we are now. And all I would say is, given
:13:38. > :13:42.that we have got large number of soldiers, sailors and marines
:13:42. > :13:48.involved in the games, I'm going to go as a punt Tory one evening in
:13:48. > :13:52.the Olympic Park, as I'm -- punter to one evening in the park, as I'm
:13:52. > :13:55.sure many people will be. When you see the soldier, airmen and marines
:13:55. > :13:59.checking your bags, remember some of them could have been on leave,
:13:59. > :14:03.say thank you to them for contributing to make this thing a
:14:03. > :14:07.great success, which it will be. Thank you for dressing so smartly
:14:07. > :14:11.for the programme and thank you. Tessa Jowell, it is not just this,
:14:11. > :14:15.I hate to be gloomy here, and it is important to look ahead
:14:15. > :14:19.optimistically to the games, but we have problems on the M4, one of the
:14:19. > :14:24.main routes that athletes will be taking into London. That won't
:14:24. > :14:30.reopen until Monday at the earliest. Reuben to go get thely bee geebies
:14:30. > :14:37.about this? If you are involved with a project of this scale of
:14:37. > :14:41.complexties you have that every day, you hope by having the heebeeje,
:14:41. > :14:45.bies, and living in a state of preoccupied concern about it, you
:14:45. > :14:51.get things right. The most important thing is to stay on top
:14:51. > :14:56.of the detail. We are way beyond broad-brush ambition. What I hope
:14:56. > :15:00.is in Downing Street there are regular meetings, pulling together
:15:00. > :15:04.the contribution of the 19 Government departments, that those
:15:04. > :15:08.meetings are held regularly and with discipline. Could be bra
:15:08. > :15:14.should be meeting now -- Cobra should be meet now. In order to
:15:14. > :15:19.address these kinds of issues, when they arise, to foresee those that
:15:19. > :15:26.may emerge over the next few day. I guarantee there will be more
:15:26. > :15:29.problems. Thank you very much. Think of it as Mrs Overall meets
:15:29. > :15:33.Yes Minister. Last night across Whitehall, those two worlds
:15:33. > :15:37.collided, in a most discreet way, that Sir Humphrey might approve of.
:15:37. > :15:40.The people who clean for nine secretaries of state, clean the
:15:40. > :15:47.ministerial desks, as usual, and then left behind a letter, asking
:15:47. > :15:51.for more pay. When the Government's maxim is make work pay, are the
:15:51. > :16:01.salaries of these night shift workers too low to make it so.
:16:01. > :16:03.
:16:03. > :16:06.Allegra Stratton investigates. It's a brave employee who asks
:16:06. > :16:10.someone for a pay rise. It is even braver when that someone is a
:16:10. > :16:14.Secretary of State. On Wednesday, across the sprawling
:16:14. > :16:19.complex of Whitehall, the people who clean for nine secretaries of
:16:19. > :16:24.state spruced up their ministers' desks and left behind a letter. A
:16:24. > :16:27.letter asking for something called the living wage. At �8.30 it
:16:27. > :16:32.recognises that life in London is dear. The politicians are not
:16:32. > :16:36.obliged to pay this, but increasingly employers are doing it,
:16:36. > :16:46.KPMG, aviva, the Mayor of London, and Whitehall's neighbour,
:16:46. > :16:47.
:16:47. > :16:50.parliament. Irene is about to deposit a letter, this time on the
:16:50. > :16:54.Chancellor's desk. He will get it tomorrow morning, definitely.
:16:54. > :16:58.are confident? Yes. How are you feeling about this? So good.
:16:58. > :17:02.has been talked through it by the campaigner she works with from
:17:02. > :17:08.London Citizens. It talks about some of the pressures you are under
:17:08. > :17:13.in your job, how you were supposed to get a bonus, but if you turn up
:17:13. > :17:17.late they cut it off. Irene is talking there about the wage paid
:17:17. > :17:26.by her boss, the Treasury's cleaning contractor, they believe
:17:26. > :17:29.it is generous, �7.80 an hour, pumped up to �8.30 with an
:17:29. > :17:37.attendance allowance. She doesn't agree with that. Irene looks after
:17:37. > :17:43.her mother, has five kids and nine grandchildren, she does two shifts,
:17:43. > :17:49.one in Guy's Hosptial starting at 7.00 and another at night in
:17:49. > :17:53.parliament. Letter in hand, she's heading into work. This Portuguese
:17:53. > :17:59.ainggol lan father of two, has just handed in his letter, and is
:17:59. > :18:09.heading home to his ten-year-old. I'm doing everything cleaning-wise,
:18:09. > :18:10.
:18:10. > :18:16.carpets, rubbish, dusting. Everything enside. It is not fair
:18:16. > :18:21.to pay me �6.95, because I work so hard. He begins his day at 5.00am
:18:21. > :18:26.in the Cabinet Office, where he cleans the Deputy Prime Minister's
:18:26. > :18:31.rooms and also another minister's, that of Reggie Maudling. He then
:18:31. > :18:34.turns in an extra -- Francis Maude, he puts in an extra shift at the
:18:34. > :18:38.weekend in Downing Street, he's paid less than the national minimum
:18:38. > :18:42.wage. It is dusk on Wednesday, and over the last 24 hours letters have
:18:42. > :18:46.been placed on the decks of secretaries of state across
:18:46. > :18:51.Whitehall, -- desks of secretaries of state, across Whitehall. The
:18:51. > :18:55.Government's key welfare reform is being in work will play, now those
:18:55. > :19:00.who -- pay, now those cleaning for the secretaries of state say it
:19:00. > :19:05.does pay, but not enough. Irene confirms the deed is done. You put
:19:05. > :19:10.the letter in? Yes I did. Did you get any grief? No. It is sitting
:19:10. > :19:14.there, ready for him in the morning. Yes. What did your friend or
:19:14. > :19:21.colleagues say? They are cool, everybody is happy.
:19:21. > :19:25.It might seem part of a campaign hopelessly out of place in an page
:19:25. > :19:28.of austerity, Irene and seven fellow letter leavers and countless
:19:28. > :19:31.other cleaners, among the six million people on salaries less
:19:31. > :19:35.than the minimum wage, believe they are pushing at an open-door.
:19:35. > :19:40.have asked for a living wage in the public sector. As you know, I think
:19:40. > :19:45.this is a good and attractive idea. Government, afterall, is the
:19:45. > :19:49.biggest employer in the country, where it leads others will follow,
:19:49. > :19:54.and fairness could begin to be hard wired into the pay scales up and
:19:54. > :19:57.down the country. It was Boris Johnson who implemented the living
:19:57. > :20:02.wage, throughout the Greater London Authority. That was David Cameron
:20:02. > :20:06.during the 2010 general election. Since, Whitehall has made little
:20:06. > :20:09.progress. Irene's department, the Treasury, has made the most stren
:20:09. > :20:12.strenuous attempt, though she doesn't believe -- strenuous
:20:13. > :20:18.attempt, though she doesn't believe it is enough. In April this year,
:20:18. > :20:25.64 cleaners put a letter on the desk of the Work and Pensions
:20:25. > :20:35.Secretary, over an hourly rate 3p over the minimum. Afterwards he
:20:35. > :20:44.
:20:44. > :20:48.told others that he was sympathetic, Despite Duncan Smith's recent
:20:48. > :20:58.commitment the Government would find a solution, a Government
:20:58. > :21:15.
:21:15. > :21:18.find a solution, a Government With all letters deposited,
:21:18. > :21:22.campaigners assembled to hand out flyers to civil servants, they
:21:22. > :21:26.gathered in the building, where before the 2010 election, David
:21:26. > :21:31.Cameron raised the question of a -- the prospect of a living wage. Two
:21:31. > :21:37.years later it remain as tussle that pits Boris Johnson and Duncan
:21:37. > :21:41.Smith against others in the party. In the meantime it is cheek by jowl
:21:41. > :21:51.with the policy makers, the cleaners at the corridors of power.
:21:51. > :21:51.
:21:51. > :21:56.Let's talk more about the living wage with our guests now.
:21:56. > :22:00.What would you say to Irene and others in that report who want a
:22:00. > :22:05.living wage? Everybody wants a living wage. Clearly, and I'm all
:22:05. > :22:08.in favour of employees going to their employers and asking for
:22:08. > :22:12.higher salaries. Turning you were and saying I think I'm more
:22:12. > :22:16.productive than you're paying me for, put my salary up. Of course
:22:16. > :22:21.that should apply between cleaning staff and skaegts, it applies right
:22:21. > :22:29.across the economy. I don't find -- skaegts, it applies right across
:22:29. > :22:33.the economy. I don't find the herp "living wage" helpful. You would
:22:33. > :22:38.earn more than the living wage? in the top 5% of earners, much more
:22:38. > :22:42.than the living wage. Let as say my wife was earning �5,000 a year,
:22:42. > :22:47.that would be technically below the living wage, but added to my income.
:22:47. > :22:51.There are horses for courses. Bringing up a family on a cleaner's
:22:51. > :22:55.wage, that is very difficult. If it is an add-on to partner earning a
:22:55. > :22:59.decent sum of money, it less important that is a living wage.
:22:59. > :23:03.you have a cleaning job and no family, and visa versa? I wouldn't
:23:03. > :23:06.say that. That is what you mean? That is absolutely not what I mean.
:23:06. > :23:09.I think people need to make their own decisions with their own
:23:09. > :23:14.finances. I think it is perfectly reasonable for cleaning staff and
:23:15. > :23:20.all other staff in the country to lobby their employers for higher
:23:20. > :23:26.increases. My slight concern is here that we seem to have taxpayer-
:23:26. > :23:29.funded campaign, looking at take pair funded cleaning staff, talking
:23:29. > :23:33.to taxpayer funded politicians about their overall salary. No
:23:34. > :23:38.wonder as a taxpayer I face a higher tax bill. What do you say to
:23:38. > :23:43.the argument that which heard put forward in the statement in the
:23:43. > :23:47.report, that a living wage could take people out of work? Before I
:23:47. > :23:51.start, can I just pay tribute to the hard working cleaners who
:23:51. > :23:56.appeared in that video. These are mums and dad who is have two and
:23:56. > :24:00.sometimes three jobs. The step they took to leave the letters on the
:24:00. > :24:04.desks today, these are voices not always heard. They are out for a
:24:04. > :24:08.living wage, and I believe their struggle is possible. In response
:24:08. > :24:10.to the comment from the Cabinet Office, we are not arguing for a
:24:10. > :24:16.change to the statutory minimum wage. We are arguing that employers
:24:16. > :24:19.who want to do the right thing, like the mayor, Aviva and KPMG, can
:24:19. > :24:23.do better than the minimum, and make sure people don't have to work
:24:23. > :24:28.two and three jobs and can look after their families. What about
:24:28. > :24:32.employers who cannot can I Ford the living wage? Our plan is not, that
:24:32. > :24:36.we are approaching the Government. Oh Government can afford it? They
:24:36. > :24:40.can for two reasons, it is a comparatively smaller budget, there
:24:40. > :24:43.are 2,000 cleaners white happen. But moving to the living wage saves
:24:43. > :24:46.money on tax-payers for tax credits, when the private sector companies
:24:46. > :24:50.move to the living wage, they are taking some of the responsibility
:24:50. > :24:53.for low pay away from the taxpayer, and moving the burden back on to
:24:53. > :24:57.the employer. We are saving in the long run?
:24:57. > :25:02.are not saving money in the long run. My concern here sfpbt so much
:25:02. > :25:06.for the people in the work force. - - isn't so much for those people in
:25:06. > :25:11.the work force. There are those just scratching a living. My
:25:11. > :25:14.concern is for b the people who can't enter -- those people who
:25:14. > :25:21.can't enter the work force, they are priced out of the market. That
:25:21. > :25:26.is my concern. If we are going to have a situation where cleaners in
:25:26. > :25:30.Whitehall are paid �8 plus an hour, at the expense of the tax-payers,
:25:30. > :25:33.when private businesses, like the one I run, could afford nowhere
:25:33. > :25:36.near that. I'm afraid we are pricing people out of the labour
:25:36. > :25:40.market. That is why we have a million people unemployed in it
:25:40. > :25:47.country. We are not getting them the first step on the ladder.
:25:47. > :25:51.are not forcing any business to pay the minimum wage. It is a voluntary
:25:51. > :25:58.idea. David Cameron says it is an idea whose time has come and Boris
:25:58. > :26:01.Johnson is putting it across the capital. These are massive
:26:01. > :26:05.companies. If David Cameron in that clip said, where the Government
:26:05. > :26:09.lead, others will follow. If the Government lead and pay the living
:26:09. > :26:13.wage, more private sector employ ys will go to living wage, and the
:26:13. > :26:18.taxpayer would save money and Kleiners more in their pockets.
:26:18. > :26:22.would -- Cleaners more in their pockets. You would do away with the
:26:22. > :26:26.minimum wage wouldn't you, how low is too low? It is difficult to say.
:26:26. > :26:30.Difficult for embarrassing? last people I want to judge are
:26:30. > :26:33.politician, they almost certainly get thisth wrong, they set the
:26:33. > :26:37.minimum wage. If an employer wants to pay �1 an hour and somebody
:26:37. > :26:43.wants to work for that, is that all right? Yes, people do voluntary
:26:43. > :26:49.work, is that all right? A lot of people work in Oxfam shops for zero
:26:49. > :26:52.pounds an hour, are we banning that. Is voluntary work OK? At the
:26:52. > :26:59.present rate you are crowding out small businesses from taking the
:26:59. > :27:04.lead. The Met Office is wary of forecasting more than a fortnight
:27:04. > :27:07.ahead, astrologers might predict a year with some degree of certainty.
:27:07. > :27:09.You have to admire the people at the Office for Budget
:27:09. > :27:15.Responsibility, who stepped forward today with figures for the state of
:27:15. > :27:21.the British economy, 50 years from now. You will find in their report
:27:21. > :27:31.the predicted budget deficit for 2051, 52, will they ever be
:27:31. > :27:34.
:27:34. > :27:40.realised. What lies just grond beyond visible. One of the jobs of
:27:40. > :27:46.the -- beyond visible, one of the jobs of the office for budget
:27:46. > :27:50.responsibility is to keep a look out for long-term trends.
:27:50. > :27:54.Troiing to gaze far into the distant future -- trying to gaze
:27:54. > :27:58.into the far distant future is always difficult, just ask the Met
:27:58. > :28:02.Office. The OBR have a difficult job, they can only factor in known
:28:02. > :28:08.unknowns, everything else, well it is not in the model. Even so, there
:28:08. > :28:14.is plenty there to worry us. For a start, the population is
:28:14. > :28:19.ageing. Over 65s currently make up 17% of the population. In 50 years
:28:19. > :28:26.time they will be 26%. That means health spending, state pension
:28:26. > :28:36.costs, and social care costs are all heading north.
:28:36. > :28:40.
:28:40. > :28:44.These figures show that the reform that is we made, the very
:28:44. > :28:47.controversial reforms we made to public service pension, are not
:28:47. > :28:51.just delivering continued good quality pension force public sector
:28:51. > :28:56.workers, but benefit to the taxpayer, reducing the cost to the
:28:56. > :29:03.taxpayer by 40% over the next few years, that is worth �440 billion
:29:03. > :29:07.worth of savings over the 50 years. These predictions are far beyond
:29:07. > :29:11.the event horizon of normal politics. But Labour says it is
:29:11. > :29:14.never too soon to get on the right track. People look at the
:29:14. > :29:19.statistics and say in this financial quarter, does it matter
:29:19. > :29:24.that you have shrunk an economy by 0.4%, but cumulatively, if those
:29:25. > :29:28.add up, and we end up with the double-dip recession going on for a
:29:28. > :29:32.long period. That is a serious hit to the capacity as a economy to
:29:32. > :29:36.afford those decent services. The Chancellor has to wake up and
:29:36. > :29:38.realise, unless he does something now about jobs and growth, we will
:29:38. > :29:43.lose out as a society as a whole in the long-term.
:29:43. > :29:45.The other side of the balance sheet is pretty worrying too in as much
:29:46. > :29:50.as you can get worried about something that may or may not
:29:50. > :29:56.happen in half a century's time. Not only is spending set to rise,
:29:56. > :30:01.the OBR predicts that tax revenues will slide. For a start, transport
:30:01. > :30:08.taxes will fall, as cars become more fuel efficient. And North Sea
:30:08. > :30:15.oil revenues will dwindle. Total revenues will be down 2% by 2061.
:30:15. > :30:25.That loaves a fiscal gap of �66 billion. Does that mean more cuts
:30:25. > :30:27.even now? No, the report should not be taken to apply to the
:30:27. > :30:31.substantial fiscal consolidation in the pipeline should be made bigger.
:30:31. > :30:35.The question for the politicians is where should that money come from,
:30:35. > :30:38.over the long-term? If you look back over the last 50 years or so,
:30:38. > :30:42.what you see is some of the at the same time things you might see
:30:42. > :30:46.again over 50 years. The cost of health has risen a great deal.
:30:46. > :30:52.Interesting to look at what has paid for that? We have cut spending
:30:52. > :30:55.on defence very dramatically. We have cut spending on housing
:30:56. > :30:59.dramatically, and support for industry almost down to nothing.
:30:59. > :31:03.Those budgets don't exist any more, that is the interesting challenge
:31:03. > :31:06.for what we do in the future. We have kind of chopped all the
:31:06. > :31:12.budgets which have been used to fund social security and health.
:31:12. > :31:15.What budgets will we chop next? The prediction business is a tough
:31:15. > :31:19.gig. Who would have thought, for example, that a group of musicians
:31:19. > :31:23.who played their first performance 50 years ago tonight would still be
:31:23. > :31:29.around today. What will life be back in 2061.
:31:29. > :31:36.Let's leave the last word on the dangers of forecasting to Keith.
:31:36. > :31:40.I'm lucky to be here, man. It is amazing. Earlier I spoke to the
:31:40. > :31:45.chairman of the Office of Budget Responsibility, Robert Chote. How
:31:45. > :31:50.confident are you about your forecasting? Needless to say, over
:31:50. > :31:54.a 50-year horizon, there are colossal uncertainties around lots
:31:54. > :31:58.of these projections. It is difficult, but it is not to throw
:31:58. > :32:01.up our hands and say not to do it at all. Rather than with weather
:32:01. > :32:05.forecasting, the challenge is knowing whether it will be hotter
:32:05. > :32:09.today than in ten days time, it is difficult to ask the question over
:32:09. > :32:14.50 years. Both difficult but for different reasons. For 50 years
:32:15. > :32:18.forecasting, we might ask an astrologer for that, might we?
:32:18. > :32:21.There are different drivers in the changes in public finances over
:32:21. > :32:28.that time arising and worrying about where they will go in five
:32:28. > :32:33.years. For things like the movement of demographic bulge, flu the age-
:32:33. > :32:37.distribution of the -- through the age-distribution of the population.
:32:37. > :32:40.It is worth thinking about the potential implications of that,
:32:40. > :32:44.even if there are huge uncertainties about where we will
:32:44. > :32:49.be in five months or years time. you look at the short-term, two
:32:49. > :32:54.years ago you were predicting growth of 2% plus in 2012 we are
:32:54. > :32:59.nowhere near that. The growth predictions were wrong in 2010 in
:32:59. > :33:04.October, you were overoptimistic about rebalancing the economy to
:33:04. > :33:10.exports, and overmisting on the out put gap. It is no wonder the people
:33:10. > :33:15.on the Treasury Select Committee were asking what the point of the
:33:15. > :33:20.OBR is? You are always in the situation where people because they
:33:20. > :33:23.didn't work out the last time, will then challenge you. That is the job
:33:23. > :33:29.we are tasked with, if the Government trying to set policies
:33:29. > :33:33.that have a lagged effect on how the policies and public achanges
:33:33. > :33:37.will perform. You have to take that judging as best you can where
:33:37. > :33:40.things will go in the future. One of the additional things is you are
:33:40. > :33:44.not even confident about where things have been in the past.
:33:44. > :33:52.are back to the astrology question, aren't we. What do you think when
:33:52. > :33:56.you get the forecast wrong? I think you look at them and say what do we
:33:56. > :34:04.learn from why this is gone wrong. Do you get better at it? You get
:34:04. > :34:09.better at understanding why things have changed. Do you know what your
:34:09. > :34:15.hit rate is? We have only been in existence for a couple of years.
:34:15. > :34:20.The errors on our forecasts for the public finances are lail smaller
:34:20. > :34:25.than the errors when done by somebody else. I wouldn't rest an
:34:25. > :34:29.enormous amount on that. You need to judge these things over a longer
:34:29. > :34:31.time arising. As you have emphasiseded you are marvellously
:34:31. > :34:36.independent from Government, but David Ruffley questioning you last
:34:36. > :34:40.year, complaining that you got the forecast wrong, said this was
:34:40. > :34:43.serious, as the Chancellor's reputation is riding on how good
:34:43. > :34:46.your forecasting is. Are you conscious of that, and do you
:34:46. > :34:51.believe it is true? I think the Chancellor, if he's sensible, is
:34:51. > :34:55.going to say. If he's sensible? Chancellor will sensibly look at
:34:55. > :35:02.the forecasts and say this is the best view they have. But we know
:35:02. > :35:08.that forecasts are uncertain. is your thinking on if now? That is
:35:08. > :35:13.outside our remit in terms of where we are doing forecasting for this.
:35:13. > :35:17.You can do a forecast for Newsnight, a Robert Chote forecast? I could do,
:35:17. > :35:23.but I'm not going to. I think we have to watch and see
:35:23. > :35:28.how this is going to evolve by the time we do our next short-to-medium
:35:28. > :35:33.term forecast, which will accompany the Chancellor's Autumn Statement.
:35:33. > :35:36.He as an Aquarius by the way, they are unpredictable, apparently.
:35:36. > :35:40.The good news for David Cameron, is he isn't the first Conservative
:35:40. > :35:46.Prime Minister to find himself in a bit of an economic pacemakerle. The
:35:46. > :35:51.bad news for today's -- pickle. The bad news for today's cabinet, is
:35:51. > :36:01.were David Cameron to follow one of his hero, ministers would be out of
:36:01. > :36:07.the job. Harold Macmillan took an axe to seven of his cabinet, in the
:36:07. > :36:12.now famous Night of the Long Knives. This is Michael's take on what we
:36:12. > :36:16.can learn from the events of 1962. The political scene in July, 50
:36:16. > :36:20.years ago, has a familiar look today. Harold Macmillan, the Eton
:36:20. > :36:25.and Oxford-educateded Prime Minister, like his modern-day
:36:25. > :36:30.counterpart, was accused of presiding over a dysfuntional
:36:30. > :36:33.Government that performed a series of U-turns. Both men's troubles
:36:33. > :36:39.begun earlier in the year in a controversial budget that had
:36:39. > :36:47.brought in a tax on unpopular snacks. When was the last time you
:36:47. > :36:54.bought a pasty in Greggs. pastygate 2012, children's sweets
:36:54. > :36:57.and ice-creamgate, 1962? What does it mean, it is threatening the ice-
:36:57. > :37:03.cream? It is not fair the older people get their pleasure, we
:37:03. > :37:10.should get our pleasures. reckon you are being got at? Yes.
:37:10. > :37:14.What but, ice-cream, a half penny more? I think it is a dire bloody
:37:14. > :37:19.liberty. Harold Macmillan decided something dramatic had to be done
:37:19. > :37:26.to restore his Government's fortunes. Exactly 50 years ago,
:37:26. > :37:30.this building, Admiralty House, was the setting for the Night of the
:37:30. > :37:33.Long Knives. On Friday, in July, 196 it r 2, the Prime Minister
:37:33. > :37:37.sacked a third of his cabinet, clulding the Chancellor of the
:37:37. > :37:41.Exchequer, in an unprecedented act -- including the Chancellor of the
:37:41. > :37:45.Exchequer, in an unprecedented act of political butchery. I have
:37:45. > :37:50.always been fascinated by the story, tonight I will be drawing own the
:37:50. > :37:53.film I made some years back, when I talk to some of the key figures
:37:54. > :37:57.from that notorious night. Very few of whom are still alive. I have
:37:57. > :38:01.come to Admiralty House, which was the home of the Prime Minister,
:38:01. > :38:06.because Number Ten was being rebuilt. To reassess the drama and
:38:06. > :38:16.join the lessons fored today the Prime Minister, the fan of Harold
:38:16. > :38:20.
:38:20. > :38:25.Macmillan. The Orpington by- election, where the liberal won the
:38:25. > :38:28.solid Tory seat, was the first of the body blows for Macmillan, they
:38:28. > :38:33.had introduced austerity policies to revive the economy, but they ran
:38:33. > :38:38.into the rocks. Macmillan, previously known as Super Mac,
:38:38. > :38:41.feared for his own political survival. One of his most serious
:38:41. > :38:46.colleagues, Lord Hailsham, left Admiralty House, after delivering a
:38:46. > :38:49.blunt message to the Prime Minister. I did feel very strongly that he
:38:50. > :38:56.was losing his grip a bit on public opinion and the party in general.
:38:57. > :38:59.People were, all of us were, extremely concerned about the
:38:59. > :39:03.continued failure of Government poll iscy in one field after
:39:03. > :39:07.another. -- policy in one field after
:39:07. > :39:12.another. We brought Harold Macmillan's grandson, Lord Stockton,
:39:12. > :39:17.back to Admiralty House, where as a youngman he had seen -- young man
:39:17. > :39:21.he had seen how his father faced up to the sea of trouble, that began
:39:21. > :39:24.with the ice-cream tax? grandfather didn't eat any of those
:39:24. > :39:32.things. But he became very conscious, because all of his
:39:32. > :39:37.grandchildren complained like mad. Particularly my cousin Anne, rather
:39:37. > :39:41.fond of an ice-cream or two. I think he was conscious, if you like,
:39:41. > :39:49.his, up till then, his magical grasp on the thing, had begun to
:39:49. > :39:54.slip. He was losing his grip, in a sense. We were obviously in for a
:39:54. > :39:57.reshuffle. To give the Government a fresh look, Macmillan decided to
:39:58. > :40:02.start his reshuffle, by getting rid of his Chancellor, Selwyn Lloyd.
:40:02. > :40:06.The two men had long been the closest of political allies. Indeed
:40:06. > :40:11.Macmillan who had his own country house, had let Selwyn Lloyd live at
:40:11. > :40:16.Chequers with his dogs. The young Jonathan Aitken, later notorious,
:40:16. > :40:19.was a firsthand witness to the Night of the Long Knives, as the
:40:19. > :40:26.work experience special adviser to Selwyn Lloyd. The only reason I
:40:26. > :40:30.ended up with such an interesting job was pure nepotisim. Selwyn
:40:30. > :40:38.Lloyd was my Godfather. He loved Chequers, he was there virtually
:40:39. > :40:44.every weekend, thanks to Macmillan's generosity. He took his
:40:44. > :40:49.dog, a great feature of Chequers weekends. Selwyn Lloyd was
:40:49. > :40:53.blissfully ignorant of Macmillan's intention to replace him in a big
:40:53. > :40:58.cabinet shake-up. Which he planned with his deputy, Rab Butler, his
:40:58. > :41:02.long time rival. The essence of a reshuffle is surprise, but Butler
:41:03. > :41:09.leaked the plans to the Mail. And Macmillan became convinced it was a
:41:09. > :41:14.plot to unseat him, by Butler. grandfather didn't ever trust Rab
:41:14. > :41:17.Butler, he was always a bit suspicious of him. Rab was someone
:41:17. > :41:21.who liked to play both sides of the fence, if he could. He certainly
:41:21. > :41:28.wouldn't have gone into my grandfather in this room or any
:41:28. > :41:33.other room, and said, Harold, the game has come for you to go.
:41:33. > :41:39.Last night he lost control of his party. Macmillan was facing a rob
:41:39. > :41:42.blem familiar with Cameron today, party dis-- problem familiar with
:41:42. > :41:45.Cameron today, party disloyalty. There were call from MPs for the
:41:45. > :41:51.Prime Minister to reassert his political authority over his
:41:51. > :41:56.cabinet. After the Mail leak, Macmillan felt he had to move fast
:41:56. > :42:01.and implemented the reshuffle quick low, otherwise he would look weak.
:42:01. > :42:07.Selwyn Lloyd was summoned to Admiralty House to be told he had
:42:07. > :42:11.had become an unperson? The picture I got was a very upset Macmillan, a
:42:11. > :42:15.rather more upset Macmillan than Selwyn Lloyd, though obviously he
:42:16. > :42:21.was very upset at losing his job. And the whole thing being a kind of
:42:21. > :42:26.rather botched affair. Grandfather was an actor, a supreme actor n
:42:26. > :42:34.many ways. He probably would have genuinely shed a tear for what he
:42:34. > :42:42.was doing for an old friend that he admired in many ways.
:42:42. > :42:49.There would have been a lot of aspects to those tears. I didn't
:42:49. > :42:52.want to upset and replace him. I thought that in the thing we were
:42:52. > :42:57.moving into, the thing I might call the new economic situation, which
:42:57. > :43:02.we have been discussing. We wanted a less tired mind.
:43:02. > :43:06.I felt he was not creative any more. I think he said he thought I was
:43:06. > :43:11.tired out. I personally didn't feel at all tired. I thought things were
:43:11. > :43:17.going rather well. After Macmillan had forced the Chancellor to walk
:43:17. > :43:25.the plank, a further six cabinet ministers met a watery end at
:43:25. > :43:29.Admiralty House. The heads of the ex-ministers were soon removed from
:43:29. > :43:33.Madame Tussauds. Macmillan said it was him who felt the pain? It was
:43:33. > :43:37.the heart burning of these changes, comes from the man who has to make
:43:37. > :43:43.them. It is not your favourite moment, being resented by the
:43:43. > :43:49.victim, who is not deeply resented by those who would help to take his
:43:49. > :43:53.place. A week after the Night of the Long Knives, Macmillan went
:43:53. > :43:58.from Admiralty *House to an away day with the captain of Chequers,
:43:58. > :44:06.where Selwyn Lloyd had left his black Labrador to be looked after
:44:06. > :44:14.the staff. When the members stood for an informal photo they were
:44:14. > :44:18.left with a dog with an a name. started sniffing around the
:44:18. > :44:24.trousers and whining, everybody started to feel embarrassed as this
:44:24. > :44:29.dog was so obviously unhappy at his missing master. Macmillan effected
:44:29. > :44:36.to ignore the dog, but for the Prime Minister, whom the sat
:44:36. > :44:44.teirists had Chrisened "superMacbeth". Macmillan never
:44:44. > :44:48.recovered his political authority. 50 years on, the latest Tory Prime
:44:48. > :44:54.Minister is contemplating his reshuffle with the Government in
:44:54. > :44:58.turmoil. The key lesson to draw from the events at Admiralty House,
:44:58. > :45:08.the more you are going to knife in a single night, the more the public
:45:08. > :45:37.
:45:37. > :45:42.Before we go, the BBC Wormed *Service made his final -- BBC
:45:42. > :45:46.World Service its final broadcast today. The corridors empty and the