:00:14. > :00:18.Over the last decade �3 billion worth of UK sales, for the last
:00:18. > :00:22.three years, not a bean in corporation tax. The coffee chain,
:00:22. > :00:26.Starbucks, isn't the only one in the firing line over their rogue
:00:26. > :00:30.tax rates, but they have done nothing illegal, so why should they
:00:30. > :00:33.pay any more? It is not fair, if they are not paying it in the UK,
:00:33. > :00:37.would they be able to operate their businesses in the UK if they were
:00:37. > :00:45.paying the right amounts. Would harder enforcement just send
:00:45. > :00:50.businesses elsewhere, or is the Government asleep on the job. The
:00:50. > :00:55.BBC has asked a former judge to investigate the practices of the
:00:55. > :01:00.BBC during Jimmy Savile's time there. And a report on the decision
:01:00. > :01:03.by Newsnight to drop a report on Savile's sex abuse. The Government
:01:03. > :01:06.will declare that thousands more schools in England aren't up to
:01:06. > :01:10.scratch, what should happen to them, should they be forced to become
:01:10. > :01:14.academies, or forced to be taken over by private firms. There are
:01:14. > :01:18.6,000 schools that are satisfactory, and satisfactory is not really what
:01:19. > :01:22.people think normally means as satisfactory, it is no longer good
:01:22. > :01:27.enough. The former head of David Cameron's Downing Street team is
:01:27. > :01:31.here to debate with the head of a head teaching union. As inflation
:01:31. > :01:36.rises faster than wage, meet the people coping with the squeeze by
:01:36. > :01:41.turning to discount supermarkets. You mean like my Pot Noodles, where
:01:41. > :01:46.they are four for �26789 That is a lot of Pot Noodle!
:01:46. > :01:56.The winner is: Bring Up The Bodies, by Hilary Mantel. We will hear from
:01:56. > :01:58.
:01:58. > :02:03.the Booker Prize winner, shortly, the first woman to win is twice.
:02:03. > :02:07.Good evening, named after a character in Moby Dick, Starbucks
:02:07. > :02:11.is the whale of the coffee world, very possibly the biggest coffee
:02:11. > :02:16.house company on the planet, in the midst of a rapid expansion
:02:16. > :02:23.programme in the UK, as drive-thru coffee becomes the next big thing.
:02:23. > :02:25.Do the people who hand over the �3.55, including VAT, for their
:02:25. > :02:29.large skinny mocha cappuccino, know that this company paid no
:02:29. > :02:33.corporation tax in the UK at all in the last three years. This after
:02:33. > :02:37.revelations about other giants and their corporation tax, including
:02:37. > :02:41.Google and Amazon. Here is a man who knows how to
:02:41. > :02:48.shave a few quid off his tax bill. Jimmy Carr, the renowned comedian
:02:48. > :02:53.and tax avoider, here promoting Starbucks extra-strong coffee,
:02:53. > :02:59.specifically for the British palate. Have a coffee. One suspect that is
:02:59. > :03:03.many people who can't avoid tax will be frothing at the mouth today.
:03:03. > :03:06.The world's most famous coffee chain told the UK tax man that it
:03:06. > :03:11.hadn't made a penny in profit over the past three years. Which is
:03:11. > :03:16.unusual for a company with a turnover of �1.2 billion, and
:03:16. > :03:20.without highly-paid staff, nor heavy capital investment to deduct.
:03:20. > :03:26.And while Starbucks concedes it has paid VAT and national insurance in
:03:26. > :03:30.full, company House records show it has only paid �8.6 million in total
:03:30. > :03:34.in corporation tax since 1998. That seems to clash with what Starbucks
:03:34. > :03:37.is telling its shareholders, though. Who were told in multiple
:03:37. > :03:43.conference calls that the UK business was highly profitable.
:03:43. > :03:53.They have lapped up the 130% spike in share values over the past three
:03:53. > :04:08.
:04:08. > :04:12.years, despite a global recession. So how do they do it? All those
:04:12. > :04:21.Starbucks didn't -- although Starbucks didn't invent coffee t
:04:21. > :04:27.pays heavy patent fees to the headquarters T pays patent fees to
:04:27. > :04:30.the Netherlands, for specific use of coffee beans, it pays Swiss
:04:30. > :04:34.taxes which are lower for other services. Independent retailers
:04:34. > :04:37.like this may not like it, but Starbucks has a legal
:04:37. > :04:41.responsibility to minimise all its cost, that includes corporation tax.
:04:41. > :04:45.The company told Newsnight that all the tax apayers were up-to-date
:04:45. > :04:51.with HM revenue and custom, and indeed, it was audited as recently
:04:51. > :04:55.as two years ago. If you think Starbucks is the only US mult
:04:55. > :04:59.national minimising its corporate tax like this, think again. Only
:04:59. > :05:06.last year it emerged that Facebook had paid an effective corporation
:05:06. > :05:14.tax bill of one eighth of one periods of UK schools, by routeing
:05:14. > :05:19.its profits by low-tax Ireland, as does Ebay and and Amazon. If
:05:19. > :05:25.everyone appears to be avoiding tax, who is fuelly paying it? A study --
:05:25. > :05:31.actually paying it? A study from Oxford University found the larger
:05:31. > :05:35.amount of tax is paid by 1% of companies. The larger firms can
:05:35. > :05:42.avoid paying tax by moving losses to low tax countries and profits to
:05:42. > :05:49.low tax companies. 15% pay no UK tax on their UK operations at all.
:05:49. > :05:55.Do independent UK coffee owners begrudge Starbucks UK tax
:05:55. > :05:58.chicanery? Yes, it is not fair. If they operated the UK, could they
:05:58. > :06:02.afford to operate in the UK if the figures were the right amounts. It
:06:02. > :06:05.is the Government's money, they are operating in the UK, it is the
:06:05. > :06:07.Government's money, and there are people out there finding ways to
:06:07. > :06:11.get round the Government. The Government needs to find ways of
:06:11. > :06:14.simplifying the tax system, so you can't get away with these things F
:06:14. > :06:18.they want the money. If someone is taking all that money away from me,
:06:19. > :06:22.I would find a way to stop them doing it. Given how fickle
:06:23. > :06:28.consumers are, could Starbucks now face a mini-boy got. We are
:06:28. > :06:31.creating an unlevel playing field in the UK market here, where UK-
:06:31. > :06:35.based companies are losing out, suffering unfair competition from
:06:35. > :06:39.international companies not paying tax, and that is going to create a
:06:40. > :06:42.backlash, not just from consumers, I suspect. But very much from small
:06:42. > :06:46.business organisations, and small business itself, who will be
:06:46. > :06:49.turning around to MPs and saying, hang on, how have you created a tax
:06:49. > :06:54.system, that penalises me from trading in my own country, and
:06:54. > :06:57.which favours a foreign company. Starbucks is a by-word for frothy
:06:58. > :07:02.coffee all over the world, and has many friends in high place. But in
:07:02. > :07:06.a time of tax rises for most, and cutbacks for all, will those
:07:06. > :07:11.friends stay loyal? Especially if it becomes obvious that we are not
:07:11. > :07:14.all in this together. Joining me are Roy Hodgson, the
:07:14. > :07:20.chair of the Public Accounts Committee, and John Whiting, George
:07:20. > :07:24.Osborne's tax simplification Tsar. The thing is, they are doing
:07:24. > :07:27.absolutely nothing illegal, and moreover, Starbucks has a duty to
:07:27. > :07:31.their shareholders to pay as minimal amounts of tax as they can?
:07:31. > :07:37.That is true, but if you are an ordinary person, watching that film,
:07:37. > :07:41.Kirsty, and you pay your tax, unquestioningly, I think you will
:07:41. > :07:46.be really frustrated, and absolutely furious, that you find,
:07:46. > :07:50.yet another, global company, making big profits, and managing to avoid
:07:50. > :07:56.paying their fair share of tax. It is just not fair. You, John Whiting,
:07:56. > :07:59.are in charge of tax simplification, yet there is all sorts of different,
:07:59. > :08:05.myriad ways, that they actually manage to post a loss in Britain.
:08:05. > :08:10.Whatever it is, over �398 million worth of sales, last year. And not
:08:10. > :08:15.a meny of profit? It does raise a lot -- Not a penny of profit?
:08:15. > :08:19.does raise a lot of questions, I'm quite sure HMRC will be watching
:08:19. > :08:24.this programme, looking. If I could just interrupt a second, if they
:08:24. > :08:29.may be watching it, but it took a Reuters investigation to find it?
:08:29. > :08:33.That misthe point. The tax money is routine -- misses the point. The
:08:33. > :08:37.tax money is routinely checking companies, checking the cross-
:08:37. > :08:43.pricing referred to in the report. I know there are different branches
:08:43. > :08:46.of HMRC, isn't the problem, it is a lot easier for HMRC to go after the
:08:46. > :08:50.pensioner who has forgotten a couple of investments and goes over
:08:50. > :08:54.the threshold and get �90 off her, than the bigger companies? This is
:08:54. > :08:58.one of the great issues, that a challenge for HMRC is to show they
:08:58. > :09:03.are applying the tax law, evenly, equally, fairly to all. We all are
:09:04. > :09:07.supposed to pay tax, under the law, that's the core thing. HMRC, seem
:09:07. > :09:11.to find it very difficult to work this one out? There are three
:09:11. > :09:15.things I would look to the future, how to deal with the continuing
:09:15. > :09:18.problem with tax avoidance as well as tax evasion. The first thing I
:09:19. > :09:23.would say is we have to have better transparency, I have been arguing
:09:23. > :09:26.for some time, for example, with the FTSE top 100, public companies,
:09:26. > :09:32.there ought to be complete transparency by what HMRC think
:09:32. > :09:35.they should pay, and what they end up paying. Everybody hides behind
:09:35. > :09:39.taxpayer confidentiality. Can I say something about this particular
:09:39. > :09:44.company. This company filed accounts in companies House that
:09:44. > :09:49.said they were making a loss -- Companies House, that said they
:09:49. > :09:54.were making a loss and then told shareholders they were making 50%
:09:54. > :09:56.profit. Is this global capitalism, maybe you have to suck it up?
:09:57. > :10:00.think Companies House should be tougher in insisting that the
:10:00. > :10:04.filing of accounts are a true and honest reflection of what happened.
:10:04. > :10:08.That is the first thing, transparency, the second thing is
:10:08. > :10:12.simplification, I'm delighted John is doing that work. The problem is
:10:12. > :10:15.it has got so ruddy complex, people find ways around it, there is an
:10:15. > :10:20.army of very highly-paid barristers who do that. Isn't there an army
:10:20. > :10:24.behind you, that is what I want to know. We have tax lawyers, we have
:10:24. > :10:27.tax specialists, only hired to make sure that companies pay minimal tax,
:10:27. > :10:33.how many people have you got working on the tax simplification
:10:33. > :10:38.system? We have a staff effectively of slightly under six. Six?! It is
:10:38. > :10:42.doing certain projects, I have a lot of back-up with colleagues at
:10:42. > :10:47.the Chartered Institute of Tags taxation as well. Does George
:10:47. > :10:50.Osborne know you only have six? set us up, it is all credit to the
:10:50. > :10:53.Government in saying, we are an experiment, saying can we make a
:10:53. > :10:58.difference. There is a lot of credit to George Osborne and David
:10:58. > :11:01.Gauke, our sponsoring minister, for saying we do need to tackle
:11:01. > :11:05.simplification and make a difference. I wopbl make a
:11:05. > :11:08.difference in simplifying the whole sis -- won't make a difference in
:11:08. > :11:12.simplifying the whole system in the relative five minutes we have got.
:11:12. > :11:15.We can make a start. Maybe things like this show we need to get hold
:11:15. > :11:20.of it. Isn't there a danger that the companies are always ahead of
:11:20. > :11:24.what John Whiting is doing? That is the third thing, I think
:11:24. > :11:28.transparency, simplification, and the third thing, you have to have
:11:28. > :11:32.enough people in HMRC, actually who have the right and appropriate
:11:32. > :11:36.skills to take on the lawyers and the accountants, who make a lot of
:11:36. > :11:40.money. We need HMRC properly staffed. We need it to be open. At
:11:40. > :11:43.the moment we don't see it. Later in the programme we're going to
:11:43. > :11:50.have a film about what happens in a recession, and discount shop to go
:11:50. > :11:54.get the cheapest deal. I wonder, if we always see people with cups of
:11:54. > :12:00.coffee in their hand in the streets, I wonder with a number of these
:12:00. > :12:05.companies that the consume point of view makes a difference and you
:12:05. > :12:11.will see boycotts. If you had greater transparency, and people
:12:11. > :12:15.know Starbucks isn't paying its fair tax. It is legally paying fair
:12:15. > :12:19.tax? It is not paying fair tax, I'm not buying Starbucks, you think
:12:19. > :12:22.everyone should buy Costa. Last night, the Labour leader, Ed
:12:22. > :12:25.Miliband, called for a public inquiry into the allegations
:12:26. > :12:29.surrounding the late Jimmy Savile, the BBC, the NHS and other
:12:29. > :12:33.institutions. Today in the House of Commons, the Deputy Prime Minister,
:12:33. > :12:39.Nick Clegg, said there may be a case for one. Today, we also got
:12:39. > :12:43.more details on the two independent inquiries, the BBC has set up into
:12:43. > :12:48.the historic allegation, and in the decision on Newsnight to drop the
:12:48. > :12:51.investigation into Jimmy Savile last year Jim is here with more.
:12:51. > :12:55.The BBC first announced the two investigations at the tailend of
:12:55. > :13:05.last week. End to we are getting a lot more detail about both of them.
:13:05. > :13:06.
:13:06. > :13:11.Two separate inquiries, as you say, set up by the BBC the. --. The
:13:11. > :13:14.first one is Dame Janet Smith, best known for the Harold Shipman
:13:14. > :13:18.inquiry, she will look at the broader inquiry, looking at the
:13:18. > :13:21.culture of the corporation, the practices of the corporation, at
:13:21. > :13:26.the time when Jimmy Savile was employed there. It will also hear
:13:26. > :13:29.evidence, importantly, from people who say they were abused by Mr
:13:29. > :13:32.Savile on BBC premises. It won't start work straight away, it will
:13:32. > :13:35.delay the start of the inquiry until the police give it the go
:13:35. > :13:38.ahead, so it doesn't get in the way of a criminal investigation. That
:13:38. > :13:40.is the one that doesn't start until the police investigation is over,
:13:40. > :13:44.more immediately is the other investigation into Newsnight's
:13:44. > :13:50.handling of the story? This one will start straight away, with the
:13:50. > :13:55.utmost urgency, say the BBC. will be chaired by the former head
:13:55. > :13:59.of Sky News, Nick Pollard, a broader review than we thought. Its
:13:59. > :14:04.primary objective is to look at if there were any failings in the way
:14:04. > :14:11.that Newsnight report last year was handled. There was suggestion that
:14:11. > :14:16.is BBC representatives put pressure on Newsnight, because there were
:14:17. > :14:23.tribute programmes in the run-up to Christmas last year. In the broad
:14:23. > :14:26.look at issues, what is going to happen? Two key areas we weren't
:14:26. > :14:30.100% expecting. One was the BBC's handling of material in this
:14:30. > :14:35.investigation, that could have been passed on to the police and other
:14:35. > :14:39.relevant authorities, it isth will look into that. And whether the BBC
:14:39. > :14:43.should have broadcast the two tribute programmes. If the BBC
:14:43. > :14:46.executives knew Newsnight was in the process of putting an
:14:46. > :14:50.investigation into process on Jimmy Savile's actions. The Government
:14:51. > :14:56.has made big promises of getting rid of failing schools, a crucial
:14:56. > :15:01.part of the plan will be tougher to be tougher when it comes to rating
:15:01. > :15:07.schools' performance what do you do with problems schools. David
:15:07. > :15:11.Cameron's former Head of Policy has set set out in a report for Policy
:15:11. > :15:15.Exchange, his first since leaving Government, he says schools
:15:15. > :15:23.shouldn't be taken out of local authority control and made into
:15:23. > :15:27.academies, but turned over to not for profit firms.
:15:27. > :15:33.There used to be a time when schools to be "satisfactory", now
:15:33. > :15:37.you can get satisfaction, it is not very satisfactory. As the Stones
:15:37. > :15:42.didn't sing. As of January, a new regime for schools, has decreed
:15:42. > :15:46.enough isn't enough. Schools well regarded under the old regime are
:15:46. > :15:50.now no longer. The new inspection regime will mean
:15:50. > :15:56.that more schools will fail. Many hundreds of schools could fail. So
:15:56. > :15:59.what do you do with those schools? Until a year ago, this man was the
:15:59. > :16:03.Prime Minister's Head of Policy inside Number Ten. Now outside of
:16:03. > :16:08.Government, James O'Shaughnessy thinks the failure rate in schools
:16:09. > :16:13.will sore in -- soar in coming years, and his former colleagues
:16:13. > :16:17.haven't worked out how to deal with this. There are 6,000 schools that
:16:17. > :16:19.are satisfactory, and satisfactory is not really people think norm
:16:19. > :16:23.yeahly means satisfactory, satisfactory is no longer good
:16:23. > :16:26.enough. For the idea he has come up with, is schools should be turned
:16:26. > :16:31.around like this place, which 20 years could have been described as
:16:31. > :16:37.a sink school. This is now an academy, and part of a Shane. James
:16:37. > :16:41.O'Shaughnessy thinks more schools could be turned out like this. This
:16:42. > :16:45.is one of the Harris academies, a not for profit network of 19 across
:16:46. > :16:50.London, growing to 24 next year. This man was once the headmaster of
:16:50. > :16:54.one of the academies, then he was headmaster of three, that became a
:16:54. > :16:59.bit unwieldy, he's chief executive of the lot. Of the 19, 11 were
:16:59. > :17:02.found to be outstanding by Ofsted. There are 3,000 applications for
:17:03. > :17:06.the 180 places that line these corridors. I think that groups of
:17:06. > :17:10.schools, working together, collaborating, generating economies
:17:10. > :17:14.of scale, sharing good ideas, is a model that would work for the whole
:17:14. > :17:17.country. And the evidence is that groups of three or more schools
:17:17. > :17:22.working in a federation produce better results, more quickly, than
:17:22. > :17:27.schools working on their own. Collaboration, and pooling ideas
:17:27. > :17:30.and resources, is common sense, I think. The first thing we know is
:17:30. > :17:36.academies work, the academy programme has been around for ten
:17:36. > :17:39.years, there has been various academic research that shows it
:17:39. > :17:44.improves results. It doesn't turn around all schools, some problems
:17:44. > :17:48.are too deep. We have this new fep no mam number, academys chains,
:17:48. > :17:51.three or more schools, that look like they are better at improving
:17:51. > :17:57.standards than single academies, if turning into an academy doesn't
:17:57. > :18:01.work, you need to put those schools into successful academy chains.
:18:01. > :18:04.Finally there needs to be an option f that doesn't work, state hasn't
:18:04. > :18:08.worked, voluntary sector hasn't worked wrecks should look at the
:18:08. > :18:12.private sector and asking them to come in - worked, we should look to
:18:12. > :18:22.the private sector and ask them to come in on performance contracts
:18:22. > :18:26.
:18:26. > :18:31.and asking them to turn the school At this last count 31% of Britain's
:18:31. > :18:36.secondary schools, that's 963 schools were graded "satisfactory",
:18:36. > :18:38.while they won't be retrospectively accused of failing, a repeat
:18:38. > :18:42.performance at their next inspection, would be considered a
:18:43. > :18:49.fail. There is, however, a fierce debate about whether academies do
:18:49. > :18:55.actually deliver better results. Bringing in a three-teir, cascading
:18:56. > :19:03.systems, which sees failing schools added to a chain or private
:19:03. > :19:07.provider, shows that as James O'Shaughnessy feels the academies
:19:07. > :19:11.can't deal with all problems. It is thought by some that it sets
:19:11. > :19:15.schools up to fail. This is a false story about schools. Some are doing,
:19:15. > :19:18.by and large very well, some schools need extra support, and
:19:18. > :19:21.some schools with children who are poor. The Government needs to do
:19:21. > :19:24.something about the poverty many children face. It isn't the case
:19:25. > :19:29.that our schools, by and large, are doing badly. They will not be
:19:29. > :19:32.improved by this profit-making firms taking them over. If we don't
:19:33. > :19:35.do something about it, you are telling thousands of schools, and
:19:35. > :19:39.more importantly the children in the schools, we think you are not
:19:39. > :19:42.good enough, but we don't have the wherewithal to do anything about it.
:19:42. > :19:47.That is a real world problem for those children. Politically that
:19:47. > :19:52.makes you look incompetent. Looking incompetent, in the years
:19:53. > :19:55.and months ahead of a general election. Will there be more
:19:55. > :19:59.failing schools will it mean this Government has failed.
:19:59. > :20:02.Author of that Policy Exchange report, James O'Shaughnessy is here,
:20:02. > :20:09.he was director of policy to David Cameron in Number Ten after the
:20:09. > :20:13.general election. Also Mary Bousted, the General Secretary of the the
:20:13. > :20:18.national head teachers union. More breaking news tonight?
:20:18. > :20:22.front page of the times says Michael Gove will rewrite the rules
:20:22. > :20:25.on A-level, we have done this story on the programme before. GCSEs are
:20:25. > :20:29.out, they are being refashioned, A- levels are also being refashioned.
:20:29. > :20:33.What is new about the story, we can say with more certainty what is
:20:33. > :20:37.going. We now know, it has confirmed this evening, that resits
:20:37. > :20:43.in January will go. Or rather moduals taken in January will go,
:20:43. > :20:47.resits will go. All resits? I think so. The Government is trying to put
:20:47. > :20:51.universities back in control of some kind of standards. And this,
:20:51. > :20:54.our story reflected, and this reflects, that universities don't
:20:54. > :21:00.feel this brings forward to them the calibre they would like. The
:21:01. > :21:05.particular emphasis of this means there will be an A-Bach, the
:21:05. > :21:09.Baccalaureate, the Times says it is the scrapping of A-levels, it is
:21:09. > :21:13.not, the A-level will remain, but the form of what you will sit. If
:21:13. > :21:17.you are a science student you will have to sit some arts, if you are
:21:17. > :21:22.an arts student you will have to do a lot of maths. We want to talk
:21:22. > :21:25.about the pressure in schools, this is going to presumably put massive
:21:25. > :21:29.pressure on schools. A better, clearer idea of putting
:21:29. > :21:33.universities back in charge, not endless resits? The problem with
:21:33. > :21:36.this is, if you do exam reform properly, you have to take time,
:21:36. > :21:39.get a political consensus and get schools on board. Our experience,
:21:39. > :21:45.what we are hearing from universities, is actually, they
:21:45. > :21:48.don't want to get that involved. They are not given the time. They
:21:48. > :21:52.want better exams and higher standards, but they don't want to
:21:52. > :21:56.get involved in the nitty gritty of A-levels and the syllabuses. So,
:21:56. > :22:00.you know, this is, yet another, very hurried announcement, released
:22:00. > :22:05.through the media, not take schools or teachers seriously. From your
:22:05. > :22:09.point of view? We will see the real concert. If it is getting rid of
:22:09. > :22:12.resits and modual, that means more rigour, that is a good thing,
:22:13. > :22:17.universities certainly need to have more input, that is how, they are
:22:17. > :22:22.the recipients, if you like, of A- level students, and breath is a
:22:22. > :22:31.good thing. The Bach breath is one of the downsides of A-levels is
:22:31. > :22:39.specialising too early. This is interesting tough stf. Let's turn
:22:39. > :22:43.to -- interesting stuff. You might debate about the schools failing,
:22:43. > :22:48.we have a radical education secretary, but you want to bring in
:22:48. > :22:53.for-profit for failing schools? problem has been described by the
:22:53. > :22:58.head of Ofsted, the school inspectorate, decribing 2,000
:22:59. > :23:03.schools out of 20,000 schools. is primary and secondary? Which are
:23:03. > :23:07.called satisfactory, it is rating. It is not just my view, he's a
:23:07. > :23:11.former excellent headteacher, it is a view of lots of people in the
:23:11. > :23:15.system. England is described as having a long tale of
:23:15. > :23:24.underachievement in the system, this is the base of mediocrity that
:23:24. > :23:27.we are facing. We are talking about a base of mediocrity, and 6,000
:23:27. > :23:31.failing schools, is that your experience? There are 6,000 schools
:23:31. > :23:37.that are satisfactory. They will not be satisfactory in the future?
:23:37. > :23:40.It depends on what they get in the Ofsted report, many may have
:23:40. > :23:44.improved greatly. That is a 6,000 figure plucked out of the air. Of
:23:44. > :23:48.those schools, the characteristic of a satisfactory school is the
:23:48. > :23:52.quality of teaching in children departments uneven, it is not that
:23:52. > :23:56.they are routinely failing students, it is the quality across the board
:23:56. > :23:59.is not high enough. It is not random figure, 6,000 schools are
:23:59. > :24:03.satisfactory at the moment, 3,000 have been satisfactory more than
:24:03. > :24:06.once, they are coasting schools, not going anywhere. The Ofsted
:24:06. > :24:09.regime has got tougher. So these schools are more likely to be
:24:09. > :24:13.falling into this kind of category. I think there is a real problem
:24:13. > :24:17.here that we need to address. Unless you accept the nature of
:24:17. > :24:23.that problem. Then you can't move forward on to solution. What you
:24:23. > :24:27.are saying, when schools become academies, that in itself doesn't
:24:27. > :24:31.solve the problem, you need chain of academies to create a culture.
:24:31. > :24:36.You are saying if the schools get the new requirement to improve,
:24:36. > :24:41.then actually, there should be no ifs or abouts about it, they are
:24:41. > :24:44.just put out -- buts about it, they are just put out for profit? These
:24:44. > :24:51.academies have been around for ten years, there is plenty of evidence
:24:51. > :24:59.they work, and better than average in improving standards, than other
:24:59. > :25:03.ways, leaving local authority control. I would suggest that these
:25:03. > :25:06.chain add academies to improve results, the results are patchy.
:25:06. > :25:09.Are there enough academies sponsor and chains, to take on board and
:25:09. > :25:12.turn around the thousands of schools that might be told they
:25:12. > :25:18.need to sort themselves out. I'm worried they won't be, we need to
:25:18. > :25:24.be open minded about who can come in and offer help. A for-profit
:25:24. > :25:28.company? There are huge problems, this is James's second go at for-
:25:28. > :25:33.profit in schools. Which was the first one? The Policy Exchange
:25:33. > :25:38.report earlier this year. That wasn't mine. This is the second go
:25:38. > :25:41.at for-profit. My first go! issue is this, the international
:25:41. > :25:46.evidence does not bear out that for-profit schools raise standards.
:25:46. > :25:50.It hasn't happened in the USA. And Sweden, it has plummeted down the
:25:50. > :25:54.interNational League table, and now there is a parliamentary inquiry
:25:54. > :25:59.into for-profit schools. What is the problem in Sweden? The problem
:25:59. > :26:06.with for-profit schools is money which should be spent on pupils is
:26:06. > :26:10.spent sweating the assets so shareholders get a profit. The
:26:10. > :26:16.Miami Herald, $4 million taxpayer dollars goes into for-profit
:26:17. > :26:21.schools, they found students taught in sheds and students charge today
:26:21. > :26:23.graduate. There is a broader point, which is, does the money go into
:26:24. > :26:27.the classroom? Here is an interesting fact N some local
:26:27. > :26:30.authorities a third of children with special educational needs,
:26:30. > :26:33.some of the most vulnerable children are taught in for-profit
:26:33. > :26:38.independent schools. That is something that is a feature of the
:26:38. > :26:42.system. About half of nursery care is delivered by a mixture of
:26:42. > :26:46.charityability and profit-making providers. Elsewhere in the
:26:46. > :26:49.education system, let alone public services. You are not talking about
:26:49. > :26:53.ten schools, you are talking, essentially, it seems to me, that
:26:53. > :26:57.you might be talking about 3,000 schools going out. Do you really
:26:57. > :27:02.think there is the expertise in the for-profit sector? It is a question
:27:02. > :27:05.of scale. To say, the percentage of special schools are very small,
:27:05. > :27:09.they are highly-specialised provision. You would accept some
:27:09. > :27:12.schools are failing children in the state system? Absolutely, there are
:27:12. > :27:17.some schools that need to improve. It is how you do it, you should
:27:17. > :27:21.focus on teaching, not on structures. There are, of course,
:27:21. > :27:25.some brilliant for-profit providers, it is crazy not to call on their
:27:25. > :27:28.help when we need them. A little earlier this evening, the winner of
:27:28. > :27:33.the 2012 Man Booker Prize was announced, Gavin is there, he spoke
:27:33. > :27:40.to Hilary Mantel moments after the announcement.
:27:40. > :27:44.I'm here now in the glild hall with the 2012 and 2009 winner of the Man
:27:44. > :27:48.Booker Prize, Hilary Mantel. Congratulations. To win once is
:27:48. > :27:52.pretty good, to win twice is pretty extraordinary? It is astonishing, I
:27:52. > :28:00.could not be more surprised. What did winning the first time do for
:28:00. > :28:05.you in your career, 2009, until now. It was a huge change in the way I
:28:05. > :28:11.think my fiction was perceived, and a huge change in the public
:28:11. > :28:17.perception of my books. I had a respectable critical press, always,
:28:17. > :28:23.I never had book sales. Wolf Hall bought me 30 foreign publishers.
:28:23. > :28:27.And just an astonishing explosion of interest in my work all together.
:28:27. > :28:36.With Bring Up The Bodies we have already had very gratifying sales,
:28:36. > :28:41.because it is obviously the middle book of a trilogy. It is difficult
:28:41. > :28:48.for me to predict now. I think I had had a good idea that it was a
:28:48. > :28:52.great turning point, when I won in 2009. And this, it is new country,
:28:52. > :28:56.we mains to be seen. Sir Peter Stothard, the chair of the judges
:28:56. > :28:59.said you were inventing the historical novel for the 21st
:28:59. > :29:03.century. One of the things that struck me was the technology of the
:29:03. > :29:07.1530s was very different, but the human relations are something that
:29:07. > :29:10.we are very familiar with. There is mean and nasty, and it speaks to us
:29:10. > :29:16.now, that is one of the reasons, it seems to me, that the book really
:29:16. > :29:22.strike as cord? Yes, it is about regime change, it is about the
:29:22. > :29:26.political process at its grittyist and bloodiest. I don't force
:29:26. > :29:33.contemporary resonances, but if people want to pick them up, that's
:29:33. > :29:36.fine. It's boo two of a trilogy, there is no pressure on -- book two
:29:36. > :29:41.of a trilogy, there is no pressure on the third book, have you begun
:29:41. > :29:45.it? I have begun, he can't say how far along I am, because my method
:29:45. > :29:50.of writing is not that systematic, it is more like making a collage
:29:50. > :29:53.than making a book. I will work on it intensely for the next year,
:29:53. > :29:58.this is my top priority now. As you can imagine. I know there is a
:29:58. > :30:06.great deal of pressure on a Booker winner to go here, and swan about
:30:06. > :30:13.in the world smiling at people. But my dearest wish now, it may not
:30:13. > :30:16.sound grateful to say so, but my dearest wish is to be back at my
:30:16. > :30:20.desk, I have so many ideas, I want to capture them and get to the end
:30:20. > :30:23.of the third book. I was going to ask you something along those lions,
:30:23. > :30:27.I was going to ask you, do you like this kind of stuff. It has been
:30:27. > :30:30.very good for you, it is lovely to be received so well. But you are a
:30:30. > :30:35.writer, and actually that is quite different, it is lonely and
:30:35. > :30:40.different from this? Well, the self who is here tonight, seems to have
:30:41. > :30:46.no real relation to the self who sits at my desk. Because, as I said
:30:46. > :30:51.earlier, when you sit at your desk, you just are a beginner, it is
:30:51. > :30:56.always the first day, prizes don't count, applause doesn't count. It
:30:56. > :31:04.is just you and the struggle with your material. To get out of it
:31:04. > :31:09.what you can. And to serve it, to give it the best view. I know this
:31:09. > :31:14.will all fall into perspective. It won't seem irrelevant, it will be
:31:14. > :31:19.ungrateful to say that. It will get to seem rather beside the point.
:31:19. > :31:23.Once I'm steeped in that world again. Well, thank you very much
:31:23. > :31:28.for talking to us, and congratulations again. Hilary
:31:28. > :31:31.Mantel, 2012 Man Booker Prize winner.
:31:31. > :31:35.For three years now, the average worker has been getting worse and
:31:35. > :31:38.worse off, with pay lagging behind the cost of living. This morning we
:31:38. > :31:42.learned that the official measure of inflation, the consumer prices
:31:42. > :31:46.index, fell in September to 2.2%. But it's still higher than the
:31:46. > :31:49.average increase in wages. Many economists, who think September was
:31:49. > :31:53.as low as inflation is likely to get for a while, with higher bills
:31:53. > :31:57.and food prices likely to push up again. With money buying less than
:31:57. > :32:05.it used to, how are people coping. We have been to south Yorkshire to
:32:05. > :32:11.find out. It's 7.00am, and staff are
:32:11. > :32:15.preparing for the latest chapter in one of the greatest retail success
:32:15. > :32:18.stories in the past five years, the rise and rise of the discount
:32:18. > :32:23.supermarket. Thank you very much for coming to the opening of our
:32:23. > :32:29.brand-new store, and our very first star in Barnsley.
:32:29. > :32:34.This is Britain's 600th Lidl, by 10.30am, this is how busy it is.
:32:34. > :32:39.This is how the people who turn up for the opening try to resist the
:32:39. > :32:46.pressure of the most sustained squeeze on living standards in 70
:32:46. > :32:53.years. Those turkeys are not bad, they are dearer than that anywhere
:32:54. > :32:59.else. Apple juice �3.50, that is a lot. 99p for the cheap version at
:32:59. > :33:02.Aldi. Some of them, give them a try. More than three quarters of us use
:33:02. > :33:06.discount supermarkets like this one. Who is coming here? What financial
:33:06. > :33:11.pressure are they under? And how are they dealing with it? We turned
:33:11. > :33:16.up in Barnsley and asked them. In the recession that began four years
:33:16. > :33:19.a the average person got better off, as fuel prices dropped and interest
:33:19. > :33:23.rates fell, that meant your take home pay would buy you more than
:33:23. > :33:29.ever before. Since then, the average take home pay, in real
:33:29. > :33:32.terms, has fallen. If you are in the low-to-middle income bracket,
:33:32. > :33:36.you are not better off than you were in 2001. That is why there is
:33:36. > :33:46.such a need for people to come to stores like this and try to save
:33:46. > :33:46.
:33:46. > :33:52.every penny they can. Jane is what can only be described
:33:52. > :33:58.as a canny shopper. I like steak pies. They are not bad. We will
:33:58. > :34:02.have some of them. She needs to be, Jane knows exactly how much she has
:34:02. > :34:10.left after her mortgage and bills to spend on food, after years
:34:10. > :34:20.living on a part-time cleaner's wage, she has developed a talent.
:34:20. > :34:20.
:34:20. > :34:27.Ready Brek, that is cheap, it is �2.95 in more sons, �2.80 in Asda,
:34:27. > :34:32.and �2.92 in Iceland. The hunt for bargains on her end, requires a
:34:32. > :34:40.sharp memory and relentless concentration. This milk is cheaper
:34:40. > :34:44.than Iceland, Morrisons, and Asda. This is how a globalised economy
:34:44. > :34:51.hits you, right in the shopping basket.
:34:51. > :34:57.That pork price on the shelves, reflects a 40% wholesale price in
:34:57. > :35:04.the price of meat since 2007. If you thought it's killing you, think
:35:04. > :35:10.about the pigs, this year's US poor maize crop meant the price in
:35:10. > :35:15.keeping pigs jumped, it led to a slaughter of pigs because farmers
:35:15. > :35:18.can't afford it keep them. Analysts predict a 30% increase next summer.
:35:18. > :35:23.Jane is slightly embarrassed to show us what happens when you are
:35:23. > :35:31.really keen on bargain. You mean like my Pot Noodles, where they are
:35:31. > :35:37.four for �2. That is a lot of Pot Noodles. They were 50p each rblgs
:35:37. > :35:42.usually �1.80 --, usually �1.80 for two. After two divorces and seven
:35:42. > :35:49.children, staying in the black is part of survival. What are the big
:35:49. > :35:54.financial pressures? My mortgage. �408.77, council tax, �14 a week,
:35:54. > :36:00.my electricity, with I pay �20 a week on, water is �500 a year.
:36:00. > :36:05.After you have paid all that, what are you left with? About �150 a
:36:05. > :36:11.month. Enough to have fun with? Because I have to buy food. So the
:36:11. > :36:16.food comes out of that. Yes. After the bills. When you pay for food
:36:17. > :36:22.how much do you have left? About �60. For the whole month. Yeah. But
:36:22. > :36:25.I don't drink, I don't smoke. you been on holiday recently?
:36:25. > :36:30.in 13 years. Can't afford it. haven't been on holiday. No, can't
:36:30. > :36:35.afford it. Inflation was far higher in the 70s
:36:35. > :36:39.and early 80, but back then, wages largely beat inflation, while
:36:39. > :36:49.pensioners fell behind, now it's the opposite. State pensions went
:36:49. > :36:50.
:36:50. > :36:58.up by 5.2%, average wages by less than half that. 69p, that's quite
:36:59. > :37:03.cheap. -- 49p, that's cheap. If you are on
:37:03. > :37:13.the minimum wage like Dawn, you might envy pensioner, she works at
:37:13. > :37:18.a local shop, where her pay is going up 1.8%, or 11p an hour.
:37:19. > :37:24.Since 2009, the average household income has fallen in real terms by
:37:24. > :37:28.�2,400 a year, or �46 a week. Supermarkets protect their profits,
:37:28. > :37:33.typically making a margin of anything between 2p and 6p in the
:37:33. > :37:37.pound. How do discounters get their prices so low. We only offer the
:37:37. > :37:41.customer one type of sweet corn, we only produce one type of labelling,
:37:41. > :37:44.one can plant, one production run, also with the economies of the
:37:44. > :37:48.number of stores we have, it means we can really get economies of
:37:48. > :37:52.scale, without compromising on the quality. By having one type of
:37:52. > :37:57.sweet corn, rather than ten, you maximise your buying power and
:37:57. > :38:00.bring the price down. That is how we do it, nothing to do with the
:38:00. > :38:06.quality, but more on how to buy the product. By cutting the number of
:38:06. > :38:09.staff that have to handle the product, Lidl can cut its wage bill
:38:09. > :38:15.and the prices. The other way discounters drive down prices is by
:38:15. > :38:20.cutting out the cost of paying someone to unpack the goods and put
:38:20. > :38:25.them on the shelves, they go from the warehouse, on to the lorry, on
:38:25. > :38:29.to the pallet, and on to her, ready to sell. Have you noticed changes
:38:29. > :38:33.in the cost of living in recent times? Yeah I have. Noticed it the
:38:33. > :38:37.last couple of years. Everything seems to be going sky high. Access
:38:37. > :38:40.to cheap prieks at all supermarkets helps people in Dawn's position
:38:40. > :38:44.doing without. Even with a husband earning, the bills have been
:38:44. > :38:51.rocketing, and there is not much left for fun. Wefrpblgts don't go
:38:51. > :38:55.out often together. We might -- don't get out often together. We
:38:55. > :38:58.might get out once or twice a year. Sometimes we might go out for a
:38:58. > :39:02.couple of hours together on an afternoon. That is not often.
:39:02. > :39:09.much do you have coming in from the part-time work? Just over �140 a
:39:09. > :39:13.week. What does that have to cover? I buy most of our food. I pay TV
:39:13. > :39:18.license, and water. And then my husband he pays the rest of the
:39:18. > :39:24.bills. When I have been paid I sit down and sort it all out what I
:39:24. > :39:31.have to pay out. That is when I find out how much I have left.
:39:31. > :39:35.For now, Dawn's content with zumba twice a week as her quota of fun,
:39:35. > :39:39.her real wage might be falling, but with a son at home, she doesn't
:39:39. > :39:43.want full-time work, as if there was much.
:39:43. > :39:48.Barnsley used to rely for work on mining and manufacturing. Now, the
:39:48. > :39:52.big employers of the public sector, and an internet fashion company,
:39:52. > :40:00.and retailers, around 11% of people here are unemployed, three points
:40:00. > :40:10.above the national average. Two for �2.50 as well. They are
:40:10. > :40:16.
:40:16. > :40:20.dearer, them pork chops, I think it is cheap Tory get them at Tescos.
:40:20. > :40:24.Michael and Becky Lewis are raising four children on benefits. Lately,
:40:24. > :40:31.they have been feeling the financial pinch. When we were
:40:31. > :40:35.shopping at Morrisons it was costing us �140, �150 a week. We
:40:35. > :40:38.couldn't give the kids anything nice like biscuit and things that
:40:38. > :40:44.kids like, the treats. We were having proper meals, but we were,
:40:44. > :40:48.we had to budget so, we couldn't get luxuries.
:40:48. > :40:53.Now I write a shopping list and work out what meals every day we
:40:53. > :41:00.will have. If we have pasta three or five times a week it is cheap,
:41:00. > :41:03.that is cheap. We have to know what we are spending and where we are.
:41:03. > :41:08.Becky has been diagnosed with obsessive compulsive disorder,
:41:08. > :41:12.something that robs her of sleep and keeps her on her feet all day.
:41:12. > :41:19.She jokes that in the supermarket it has itss. I have calculated it
:41:19. > :41:26.on my phone, because I'm that worried about overspending, we have
:41:26. > :41:32.three ways round and I have been putting things back.
:41:32. > :41:39.If a drought in the US forced up the price of maize, the floods here
:41:39. > :41:46.in Britain have forced up the price of spuds. Floods have forced
:41:46. > :41:51.importation of -- twice as much in the last few years. When you import
:41:51. > :41:56.you pay higher transport costs. Michael had worked for 20 years in
:41:56. > :41:59.a company when the financial crisis hit. He had been struggling with
:41:59. > :42:03.some of the work because he had been plaged by back injuries, and
:42:04. > :42:08.was selected for redundancy. couldn't do the work, some days I
:42:08. > :42:13.went to work I couldn't even bend over. We are ashamed we have to
:42:13. > :42:22.live on benefits. It just happens that we have been dealt a raw deal.
:42:22. > :42:26.I lost my house. I had a house for 13 years, we had everything. It is
:42:26. > :42:31.rubbish now, to what it used to be like. Can you hope it might, some
:42:31. > :42:35.day, get back to better? I hope things pick up, yeah.
:42:35. > :42:39.It is not only those on the lowest incomes who are under pressure to
:42:39. > :42:43.hunt down the cheapest groceries they can find. Lidl's car park has
:42:43. > :42:49.no shortage of some what pricey cars, and Aldi's sales have grown
:42:50. > :42:59.by a third in just a year. I was just having a look to see what was
:43:00. > :43:00.
:43:00. > :43:04.on special, grapes, two for �3, that is all right.
:43:04. > :43:09.Julian Thomson wouldn't say he's exactly hard up, he has two house,
:43:09. > :43:17.one with the mortgage paid off, and thousands of pounds saved up, the
:43:17. > :43:21.fruit of more than � 20 -- of more than 20 years as a driving
:43:21. > :43:29.instructor. He's not getting any richer. In March Julian had to stop
:43:29. > :43:33.work and take ill-health retirement, his income dropped by �500 a month.
:43:33. > :43:35.Stkpwhro the worst financial pressure for Julian is paying --
:43:36. > :43:39.the worst financial pressure for Julian is paying for petrol.
:43:39. > :43:43.Remember when the Chancellor said he would put fuel in the tang of
:43:43. > :43:47.the British motorist, putting off the 3p rise in fuel duty until
:43:47. > :43:51.January. That will kick in quite soon now, meanwhile, the prices at
:43:51. > :43:55.the pumps are already higher than when the Chancellor made that
:43:55. > :44:00.announcement. You could hope that the global slowdown would mean
:44:00. > :44:05.reduced demand for fuel, and that would bring prices down. That is
:44:05. > :44:10.the economic theory, so far it is only a theory.
:44:10. > :44:14.Motorbikes were once Julian's life. These days he watches carefully
:44:14. > :44:19.while his son rides one. Trying not to think what happened to him in
:44:19. > :44:25.2002. Coming up to a round about to turn left at the round about, a
:44:25. > :44:30.lady in the car basically drove straight into me as if I wasn't
:44:30. > :44:35.there, and shunted me into the round about. That is where it
:44:35. > :44:39.pulled everything in my neck and back. I have always thought I could
:44:39. > :44:44.get myself, I could try to get myself better and everything else,
:44:44. > :44:49.and literally I have just got worse and worse and worse, as time has
:44:49. > :44:53.gone on. Did you want to stop work? I went back to work, I was off
:44:53. > :44:57.nearly six months in total from the accident. When the pain got too
:44:57. > :45:00.much and he was forced to retire, a Civil Service doctor told Julian he
:45:00. > :45:04.couldn't do any Civil Service job, yet now Government reforms mean
:45:04. > :45:06.that someone else in the Civil Service is telling him his
:45:06. > :45:12.Employment and Support Allowance will be stopped in February,
:45:12. > :45:17.because one day he might be able to work.
:45:17. > :45:22.My Employment Support Allowance rate will stop. How much is that
:45:22. > :45:27.worth? That is about �400 a month. Just cut off. Just stopped. Despite
:45:27. > :45:30.what happened to his dad, his son, Lewis, feels he doesn't have an
:45:30. > :45:34.alternative to riding a bike. Aren't you tempted to go for
:45:34. > :45:38.something safer, like a car, instead of a bike? I'm not tempted
:45:38. > :45:43.at all, because the insurance is much, much higher than on a bike.
:45:44. > :45:49.Also the petrol usage, the tax, the parking fees. How much would it
:45:49. > :45:57.cost to insure yourself with a car? It depends, it ranges from about �8
:45:57. > :46:01.though to you to �51,000 -- �8,000, to about �51,000 for some insurers
:46:01. > :46:04.to insure me. The Government reports to action it has taken to
:46:04. > :46:08.lift the pressure of the big squeeze on living standards, like
:46:08. > :46:10.raising the personal tax allowance, but so far those measures haven't
:46:10. > :46:13.brought economic growth. We have known about the squeeze on living
:46:14. > :46:17.standards for a while now. Measures have been taken to try to ease it.
:46:17. > :46:22.We have been hunting for bargains, the supermarkets have been bearing
:46:22. > :46:25.down on price, even the Government has been trying to lift people out
:46:25. > :46:30.of taxation, but the measures aren't always well targeted on the
:46:30. > :46:34.people who are getting squeezed the most. It is not really until global
:46:34. > :46:41.commodity prices start to come down, that the pressure on our living
:46:41. > :46:45.standards will start to lift. The economic storms blowing across
:46:45. > :46:48.from the eurozone crisis, and the rest of the world, should have had
:46:48. > :46:54.a silver lining, reduced demand for fuel and food, should bring the
:46:54. > :46:58.cost of living down, but that's yet to happen. Here in Lidl Britain, we
:46:58. > :47:02.now need our bargains like never before.
:47:02. > :47:12.That's all for tonight. I will be back tomorrow, hope you can join me
:47:12. > :47:35.
:47:35. > :47:41.then. From all of us here, good It will turn into a pretty wet end
:47:41. > :47:44.to the night for most place. Heavy rain marching on a strong south-
:47:44. > :47:48.westerly wind. Arriving in Scotland in the morning, it will stay there.
:47:49. > :47:57.For the rest of us, things perking up nice low, in the middle of the
:47:57. > :48:03.afternoon. Sunshine, the odd shower, most of us dry. 14-16 degrees,
:48:03. > :48:06.breezy but windy towards most ars areas. The west coast of England
:48:06. > :48:09.and Wales could be battered by gusts up to 60 miles an hour.
:48:09. > :48:15.Warnings from both the Environment Agency and the Met Office, because
:48:15. > :48:20.we have high spring tides, the risk of coastal flooding, and with the
:48:20. > :48:23.grounds saturated trees could come down. After a wet night the rain
:48:23. > :48:26.could break up into showers. The hope of brightness, but not across
:48:26. > :48:30.the heart of Scotland. It looks like a cold and bleak afternoon
:48:30. > :48:34.here, and temperatures really held back by north-eastly wind. Looking
:48:34. > :48:38.further ahead into Thursday, across northern areas, a fairly mixed
:48:38. > :48:41.picture, still the threat of some showers, particularly for Scotland
:48:41. > :48:47.and Northern Ireland. Dry weather before rain threatens the south-