16/10/2012 Newsnight


16/10/2012

Why Starbucks pays no corporation tax. The latest on Jimmy Savile and BBC. Privatising failing schools. The Booker prize winner. And who shops at Lidl?


Similar Content

Browse content similar to 16/10/2012. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Over the last decade �3 billion worth of UK sales, for the last

:00:14.:00:18.

three years, not a bean in corporation tax. The coffee chain,

:00:18.:00:22.

Starbucks, isn't the only one in the firing line over their rogue

:00:22.:00:26.

tax rates, but they have done nothing illegal, so why should they

:00:26.:00:30.

pay any more? It is not fair, if they are not paying it in the UK,

:00:30.:00:33.

would they be able to operate their businesses in the UK if they were

:00:33.:00:37.

paying the right amounts. Would harder enforcement just send

:00:37.:00:45.

businesses elsewhere, or is the Government asleep on the job. The

:00:45.:00:50.

BBC has asked a former judge to investigate the practices of the

:00:50.:00:55.

BBC during Jimmy Savile's time there. And a report on the decision

:00:55.:01:00.

by Newsnight to drop a report on Savile's sex abuse. The Government

:01:00.:01:03.

will declare that thousands more schools in England aren't up to

:01:03.:01:06.

scratch, what should happen to them, should they be forced to become

:01:06.:01:10.

academies, or forced to be taken over by private firms. There are

:01:10.:01:14.

6,000 schools that are satisfactory, and satisfactory is not really what

:01:14.:01:18.

people think normally means as satisfactory, it is no longer good

:01:19.:01:22.

enough. The former head of David Cameron's Downing Street team is

:01:22.:01:27.

here to debate with the head of a head teaching union. As inflation

:01:27.:01:31.

rises faster than wage, meet the people coping with the squeeze by

:01:31.:01:36.

turning to discount supermarkets. You mean like my Pot Noodles, where

:01:36.:01:41.

they are four for �26789 That is a lot of Pot Noodle!

:01:41.:01:46.

The winner is: Bring Up The Bodies, by Hilary Mantel. We will hear from

:01:46.:01:56.
:01:56.:01:58.

the Booker Prize winner, shortly, the first woman to win is twice.

:01:58.:02:03.

Good evening, named after a character in Moby Dick, Starbucks

:02:03.:02:07.

is the whale of the coffee world, very possibly the biggest coffee

:02:07.:02:11.

house company on the planet, in the midst of a rapid expansion

:02:11.:02:16.

programme in the UK, as drive-thru coffee becomes the next big thing.

:02:16.:02:23.

Do the people who hand over the �3.55, including VAT, for their

:02:23.:02:25.

large skinny mocha cappuccino, know that this company paid no

:02:25.:02:29.

corporation tax in the UK at all in the last three years. This after

:02:29.:02:33.

revelations about other giants and their corporation tax, including

:02:33.:02:37.

Google and Amazon. Here is a man who knows how to

:02:37.:02:41.

shave a few quid off his tax bill. Jimmy Carr, the renowned comedian

:02:41.:02:48.

and tax avoider, here promoting Starbucks extra-strong coffee,

:02:48.:02:53.

specifically for the British palate. Have a coffee. One suspect that is

:02:53.:02:59.

many people who can't avoid tax will be frothing at the mouth today.

:02:59.:03:03.

The world's most famous coffee chain told the UK tax man that it

:03:03.:03:06.

hadn't made a penny in profit over the past three years. Which is

:03:06.:03:11.

unusual for a company with a turnover of �1.2 billion, and

:03:11.:03:16.

without highly-paid staff, nor heavy capital investment to deduct.

:03:16.:03:20.

And while Starbucks concedes it has paid VAT and national insurance in

:03:20.:03:26.

full, company House records show it has only paid �8.6 million in total

:03:26.:03:30.

in corporation tax since 1998. That seems to clash with what Starbucks

:03:30.:03:34.

is telling its shareholders, though. Who were told in multiple

:03:34.:03:37.

conference calls that the UK business was highly profitable.

:03:37.:03:43.

They have lapped up the 130% spike in share values over the past three

:03:43.:03:53.
:03:53.:04:08.

years, despite a global recession. So how do they do it? All those

:04:08.:04:12.

Starbucks didn't -- although Starbucks didn't invent coffee t

:04:12.:04:21.

pays heavy patent fees to the headquarters T pays patent fees to

:04:21.:04:27.

the Netherlands, for specific use of coffee beans, it pays Swiss

:04:27.:04:30.

taxes which are lower for other services. Independent retailers

:04:30.:04:34.

like this may not like it, but Starbucks has a legal

:04:34.:04:37.

responsibility to minimise all its cost, that includes corporation tax.

:04:37.:04:41.

The company told Newsnight that all the tax apayers were up-to-date

:04:41.:04:45.

with HM revenue and custom, and indeed, it was audited as recently

:04:45.:04:51.

as two years ago. If you think Starbucks is the only US mult

:04:51.:04:55.

national minimising its corporate tax like this, think again. Only

:04:55.:04:59.

last year it emerged that Facebook had paid an effective corporation

:04:59.:05:06.

tax bill of one eighth of one periods of UK schools, by routeing

:05:06.:05:14.

its profits by low-tax Ireland, as does Ebay and and Amazon. If

:05:14.:05:19.

everyone appears to be avoiding tax, who is fuelly paying it? A study --

:05:19.:05:25.

actually paying it? A study from Oxford University found the larger

:05:25.:05:31.

amount of tax is paid by 1% of companies. The larger firms can

:05:31.:05:35.

avoid paying tax by moving losses to low tax countries and profits to

:05:35.:05:42.

low tax companies. 15% pay no UK tax on their UK operations at all.

:05:42.:05:49.

Do independent UK coffee owners begrudge Starbucks UK tax

:05:49.:05:55.

chicanery? Yes, it is not fair. If they operated the UK, could they

:05:55.:05:58.

afford to operate in the UK if the figures were the right amounts. It

:05:58.:06:02.

is the Government's money, they are operating in the UK, it is the

:06:02.:06:05.

Government's money, and there are people out there finding ways to

:06:05.:06:07.

get round the Government. The Government needs to find ways of

:06:07.:06:11.

simplifying the tax system, so you can't get away with these things F

:06:11.:06:14.

they want the money. If someone is taking all that money away from me,

:06:14.:06:18.

I would find a way to stop them doing it. Given how fickle

:06:19.:06:22.

consumers are, could Starbucks now face a mini-boy got. We are

:06:23.:06:28.

creating an unlevel playing field in the UK market here, where UK-

:06:28.:06:31.

based companies are losing out, suffering unfair competition from

:06:31.:06:35.

international companies not paying tax, and that is going to create a

:06:35.:06:39.

backlash, not just from consumers, I suspect. But very much from small

:06:40.:06:42.

business organisations, and small business itself, who will be

:06:42.:06:46.

turning around to MPs and saying, hang on, how have you created a tax

:06:46.:06:49.

system, that penalises me from trading in my own country, and

:06:49.:06:54.

which favours a foreign company. Starbucks is a by-word for frothy

:06:54.:06:57.

coffee all over the world, and has many friends in high place. But in

:06:58.:07:02.

a time of tax rises for most, and cutbacks for all, will those

:07:02.:07:06.

friends stay loyal? Especially if it becomes obvious that we are not

:07:06.:07:11.

all in this together. Joining me are Roy Hodgson, the

:07:11.:07:14.

chair of the Public Accounts Committee, and John Whiting, George

:07:14.:07:20.

Osborne's tax simplification Tsar. The thing is, they are doing

:07:20.:07:24.

absolutely nothing illegal, and moreover, Starbucks has a duty to

:07:24.:07:27.

their shareholders to pay as minimal amounts of tax as they can?

:07:27.:07:31.

That is true, but if you are an ordinary person, watching that film,

:07:31.:07:37.

Kirsty, and you pay your tax, unquestioningly, I think you will

:07:37.:07:41.

be really frustrated, and absolutely furious, that you find,

:07:41.:07:46.

yet another, global company, making big profits, and managing to avoid

:07:46.:07:50.

paying their fair share of tax. It is just not fair. You, John Whiting,

:07:50.:07:56.

are in charge of tax simplification, yet there is all sorts of different,

:07:56.:07:59.

myriad ways, that they actually manage to post a loss in Britain.

:07:59.:08:05.

Whatever it is, over �398 million worth of sales, last year. And not

:08:05.:08:10.

a meny of profit? It does raise a lot -- Not a penny of profit?

:08:10.:08:15.

does raise a lot of questions, I'm quite sure HMRC will be watching

:08:15.:08:19.

this programme, looking. If I could just interrupt a second, if they

:08:19.:08:24.

may be watching it, but it took a Reuters investigation to find it?

:08:24.:08:29.

That misthe point. The tax money is routine -- misses the point. The

:08:29.:08:33.

tax money is routinely checking companies, checking the cross-

:08:33.:08:37.

pricing referred to in the report. I know there are different branches

:08:37.:08:43.

of HMRC, isn't the problem, it is a lot easier for HMRC to go after the

:08:43.:08:46.

pensioner who has forgotten a couple of investments and goes over

:08:46.:08:50.

the threshold and get �90 off her, than the bigger companies? This is

:08:50.:08:54.

one of the great issues, that a challenge for HMRC is to show they

:08:54.:08:58.

are applying the tax law, evenly, equally, fairly to all. We all are

:08:58.:09:03.

supposed to pay tax, under the law, that's the core thing. HMRC, seem

:09:04.:09:07.

to find it very difficult to work this one out? There are three

:09:07.:09:11.

things I would look to the future, how to deal with the continuing

:09:11.:09:15.

problem with tax avoidance as well as tax evasion. The first thing I

:09:15.:09:18.

would say is we have to have better transparency, I have been arguing

:09:19.:09:23.

for some time, for example, with the FTSE top 100, public companies,

:09:23.:09:26.

there ought to be complete transparency by what HMRC think

:09:26.:09:32.

they should pay, and what they end up paying. Everybody hides behind

:09:32.:09:35.

taxpayer confidentiality. Can I say something about this particular

:09:35.:09:39.

company. This company filed accounts in companies House that

:09:39.:09:44.

said they were making a loss -- Companies House, that said they

:09:44.:09:49.

were making a loss and then told shareholders they were making 50%

:09:49.:09:54.

profit. Is this global capitalism, maybe you have to suck it up?

:09:54.:09:56.

think Companies House should be tougher in insisting that the

:09:57.:10:00.

filing of accounts are a true and honest reflection of what happened.

:10:00.:10:04.

That is the first thing, transparency, the second thing is

:10:04.:10:08.

simplification, I'm delighted John is doing that work. The problem is

:10:08.:10:12.

it has got so ruddy complex, people find ways around it, there is an

:10:12.:10:15.

army of very highly-paid barristers who do that. Isn't there an army

:10:15.:10:20.

behind you, that is what I want to know. We have tax lawyers, we have

:10:20.:10:24.

tax specialists, only hired to make sure that companies pay minimal tax,

:10:24.:10:27.

how many people have you got working on the tax simplification

:10:27.:10:33.

system? We have a staff effectively of slightly under six. Six?! It is

:10:33.:10:38.

doing certain projects, I have a lot of back-up with colleagues at

:10:38.:10:42.

the Chartered Institute of Tags taxation as well. Does George

:10:42.:10:47.

Osborne know you only have six? set us up, it is all credit to the

:10:47.:10:50.

Government in saying, we are an experiment, saying can we make a

:10:50.:10:53.

difference. There is a lot of credit to George Osborne and David

:10:53.:10:58.

Gauke, our sponsoring minister, for saying we do need to tackle

:10:58.:11:01.

simplification and make a difference. I wopbl make a

:11:01.:11:05.

difference in simplifying the whole sis -- won't make a difference in

:11:05.:11:08.

simplifying the whole system in the relative five minutes we have got.

:11:08.:11:12.

We can make a start. Maybe things like this show we need to get hold

:11:12.:11:15.

of it. Isn't there a danger that the companies are always ahead of

:11:15.:11:20.

what John Whiting is doing? That is the third thing, I think

:11:20.:11:24.

transparency, simplification, and the third thing, you have to have

:11:24.:11:28.

enough people in HMRC, actually who have the right and appropriate

:11:28.:11:32.

skills to take on the lawyers and the accountants, who make a lot of

:11:32.:11:36.

money. We need HMRC properly staffed. We need it to be open. At

:11:36.:11:40.

the moment we don't see it. Later in the programme we're going to

:11:40.:11:43.

have a film about what happens in a recession, and discount shop to go

:11:43.:11:50.

get the cheapest deal. I wonder, if we always see people with cups of

:11:50.:11:54.

coffee in their hand in the streets, I wonder with a number of these

:11:54.:12:00.

companies that the consume point of view makes a difference and you

:12:00.:12:05.

will see boycotts. If you had greater transparency, and people

:12:05.:12:11.

know Starbucks isn't paying its fair tax. It is legally paying fair

:12:11.:12:15.

tax? It is not paying fair tax, I'm not buying Starbucks, you think

:12:15.:12:19.

everyone should buy Costa. Last night, the Labour leader, Ed

:12:19.:12:22.

Miliband, called for a public inquiry into the allegations

:12:22.:12:25.

surrounding the late Jimmy Savile, the BBC, the NHS and other

:12:26.:12:29.

institutions. Today in the House of Commons, the Deputy Prime Minister,

:12:29.:12:33.

Nick Clegg, said there may be a case for one. Today, we also got

:12:33.:12:39.

more details on the two independent inquiries, the BBC has set up into

:12:39.:12:43.

the historic allegation, and in the decision on Newsnight to drop the

:12:43.:12:48.

investigation into Jimmy Savile last year Jim is here with more.

:12:48.:12:51.

The BBC first announced the two investigations at the tailend of

:12:51.:12:55.

last week. End to we are getting a lot more detail about both of them.

:12:55.:13:05.
:13:05.:13:06.

Two separate inquiries, as you say, set up by the BBC the. --. The

:13:06.:13:11.

first one is Dame Janet Smith, best known for the Harold Shipman

:13:11.:13:14.

inquiry, she will look at the broader inquiry, looking at the

:13:14.:13:18.

culture of the corporation, the practices of the corporation, at

:13:18.:13:21.

the time when Jimmy Savile was employed there. It will also hear

:13:21.:13:26.

evidence, importantly, from people who say they were abused by Mr

:13:26.:13:29.

Savile on BBC premises. It won't start work straight away, it will

:13:29.:13:32.

delay the start of the inquiry until the police give it the go

:13:32.:13:35.

ahead, so it doesn't get in the way of a criminal investigation. That

:13:35.:13:38.

is the one that doesn't start until the police investigation is over,

:13:38.:13:40.

more immediately is the other investigation into Newsnight's

:13:40.:13:44.

handling of the story? This one will start straight away, with the

:13:44.:13:50.

utmost urgency, say the BBC. will be chaired by the former head

:13:50.:13:55.

of Sky News, Nick Pollard, a broader review than we thought. Its

:13:55.:13:59.

primary objective is to look at if there were any failings in the way

:13:59.:14:04.

that Newsnight report last year was handled. There was suggestion that

:14:04.:14:11.

is BBC representatives put pressure on Newsnight, because there were

:14:11.:14:16.

tribute programmes in the run-up to Christmas last year. In the broad

:14:17.:14:23.

look at issues, what is going to happen? Two key areas we weren't

:14:23.:14:26.

100% expecting. One was the BBC's handling of material in this

:14:26.:14:30.

investigation, that could have been passed on to the police and other

:14:30.:14:35.

relevant authorities, it isth will look into that. And whether the BBC

:14:35.:14:39.

should have broadcast the two tribute programmes. If the BBC

:14:39.:14:43.

executives knew Newsnight was in the process of putting an

:14:43.:14:46.

investigation into process on Jimmy Savile's actions. The Government

:14:46.:14:50.

has made big promises of getting rid of failing schools, a crucial

:14:51.:14:56.

part of the plan will be tougher to be tougher when it comes to rating

:14:56.:15:01.

schools' performance what do you do with problems schools. David

:15:01.:15:07.

Cameron's former Head of Policy has set set out in a report for Policy

:15:07.:15:11.

Exchange, his first since leaving Government, he says schools

:15:11.:15:15.

shouldn't be taken out of local authority control and made into

:15:15.:15:23.

academies, but turned over to not for profit firms.

:15:23.:15:27.

There used to be a time when schools to be "satisfactory", now

:15:27.:15:33.

you can get satisfaction, it is not very satisfactory. As the Stones

:15:33.:15:37.

didn't sing. As of January, a new regime for schools, has decreed

:15:37.:15:42.

enough isn't enough. Schools well regarded under the old regime are

:15:42.:15:46.

now no longer. The new inspection regime will mean

:15:46.:15:50.

that more schools will fail. Many hundreds of schools could fail. So

:15:50.:15:56.

what do you do with those schools? Until a year ago, this man was the

:15:56.:15:59.

Prime Minister's Head of Policy inside Number Ten. Now outside of

:15:59.:16:03.

Government, James O'Shaughnessy thinks the failure rate in schools

:16:03.:16:08.

will sore in -- soar in coming years, and his former colleagues

:16:09.:16:13.

haven't worked out how to deal with this. There are 6,000 schools that

:16:13.:16:17.

are satisfactory, and satisfactory is not really people think norm

:16:17.:16:19.

yeahly means satisfactory, satisfactory is no longer good

:16:19.:16:23.

enough. For the idea he has come up with, is schools should be turned

:16:23.:16:26.

around like this place, which 20 years could have been described as

:16:26.:16:31.

a sink school. This is now an academy, and part of a Shane. James

:16:31.:16:37.

O'Shaughnessy thinks more schools could be turned out like this. This

:16:37.:16:41.

is one of the Harris academies, a not for profit network of 19 across

:16:42.:16:45.

London, growing to 24 next year. This man was once the headmaster of

:16:46.:16:50.

one of the academies, then he was headmaster of three, that became a

:16:50.:16:54.

bit unwieldy, he's chief executive of the lot. Of the 19, 11 were

:16:54.:16:59.

found to be outstanding by Ofsted. There are 3,000 applications for

:16:59.:17:02.

the 180 places that line these corridors. I think that groups of

:17:03.:17:06.

schools, working together, collaborating, generating economies

:17:06.:17:10.

of scale, sharing good ideas, is a model that would work for the whole

:17:10.:17:14.

country. And the evidence is that groups of three or more schools

:17:14.:17:17.

working in a federation produce better results, more quickly, than

:17:17.:17:22.

schools working on their own. Collaboration, and pooling ideas

:17:22.:17:27.

and resources, is common sense, I think. The first thing we know is

:17:27.:17:30.

academies work, the academy programme has been around for ten

:17:30.:17:36.

years, there has been various academic research that shows it

:17:36.:17:39.

improves results. It doesn't turn around all schools, some problems

:17:39.:17:44.

are too deep. We have this new fep no mam number, academys chains,

:17:44.:17:48.

three or more schools, that look like they are better at improving

:17:48.:17:51.

standards than single academies, if turning into an academy doesn't

:17:51.:17:57.

work, you need to put those schools into successful academy chains.

:17:57.:18:01.

Finally there needs to be an option f that doesn't work, state hasn't

:18:01.:18:04.

worked, voluntary sector hasn't worked wrecks should look at the

:18:04.:18:08.

private sector and asking them to come in - worked, we should look to

:18:08.:18:12.

the private sector and ask them to come in on performance contracts

:18:12.:18:22.
:18:22.:18:26.

and asking them to turn the school At this last count 31% of Britain's

:18:26.:18:31.

secondary schools, that's 963 schools were graded "satisfactory",

:18:31.:18:36.

while they won't be retrospectively accused of failing, a repeat

:18:36.:18:38.

performance at their next inspection, would be considered a

:18:38.:18:42.

fail. There is, however, a fierce debate about whether academies do

:18:43.:18:49.

actually deliver better results. Bringing in a three-teir, cascading

:18:49.:18:55.

systems, which sees failing schools added to a chain or private

:18:56.:19:03.

provider, shows that as James O'Shaughnessy feels the academies

:19:03.:19:07.

can't deal with all problems. It is thought by some that it sets

:19:07.:19:11.

schools up to fail. This is a false story about schools. Some are doing,

:19:11.:19:15.

by and large very well, some schools need extra support, and

:19:15.:19:18.

some schools with children who are poor. The Government needs to do

:19:18.:19:21.

something about the poverty many children face. It isn't the case

:19:21.:19:24.

that our schools, by and large, are doing badly. They will not be

:19:25.:19:29.

improved by this profit-making firms taking them over. If we don't

:19:29.:19:32.

do something about it, you are telling thousands of schools, and

:19:33.:19:35.

more importantly the children in the schools, we think you are not

:19:35.:19:39.

good enough, but we don't have the wherewithal to do anything about it.

:19:39.:19:42.

That is a real world problem for those children. Politically that

:19:42.:19:47.

makes you look incompetent. Looking incompetent, in the years

:19:47.:19:52.

and months ahead of a general election. Will there be more

:19:53.:19:55.

failing schools will it mean this Government has failed.

:19:55.:19:59.

Author of that Policy Exchange report, James O'Shaughnessy is here,

:19:59.:20:02.

he was director of policy to David Cameron in Number Ten after the

:20:02.:20:09.

general election. Also Mary Bousted, the General Secretary of the the

:20:09.:20:13.

national head teachers union. More breaking news tonight?

:20:13.:20:18.

front page of the times says Michael Gove will rewrite the rules

:20:18.:20:22.

on A-level, we have done this story on the programme before. GCSEs are

:20:22.:20:25.

out, they are being refashioned, A- levels are also being refashioned.

:20:25.:20:29.

What is new about the story, we can say with more certainty what is

:20:29.:20:33.

going. We now know, it has confirmed this evening, that resits

:20:33.:20:37.

in January will go. Or rather moduals taken in January will go,

:20:37.:20:43.

resits will go. All resits? I think so. The Government is trying to put

:20:43.:20:47.

universities back in control of some kind of standards. And this,

:20:47.:20:51.

our story reflected, and this reflects, that universities don't

:20:51.:20:54.

feel this brings forward to them the calibre they would like. The

:20:54.:21:00.

particular emphasis of this means there will be an A-Bach, the

:21:01.:21:05.

Baccalaureate, the Times says it is the scrapping of A-levels, it is

:21:05.:21:09.

not, the A-level will remain, but the form of what you will sit. If

:21:09.:21:13.

you are a science student you will have to sit some arts, if you are

:21:13.:21:17.

an arts student you will have to do a lot of maths. We want to talk

:21:17.:21:22.

about the pressure in schools, this is going to presumably put massive

:21:22.:21:25.

pressure on schools. A better, clearer idea of putting

:21:25.:21:29.

universities back in charge, not endless resits? The problem with

:21:29.:21:33.

this is, if you do exam reform properly, you have to take time,

:21:33.:21:36.

get a political consensus and get schools on board. Our experience,

:21:36.:21:39.

what we are hearing from universities, is actually, they

:21:39.:21:45.

don't want to get that involved. They are not given the time. They

:21:45.:21:48.

want better exams and higher standards, but they don't want to

:21:48.:21:52.

get involved in the nitty gritty of A-levels and the syllabuses. So,

:21:52.:21:56.

you know, this is, yet another, very hurried announcement, released

:21:56.:22:00.

through the media, not take schools or teachers seriously. From your

:22:00.:22:05.

point of view? We will see the real concert. If it is getting rid of

:22:05.:22:09.

resits and modual, that means more rigour, that is a good thing,

:22:09.:22:12.

universities certainly need to have more input, that is how, they are

:22:13.:22:17.

the recipients, if you like, of A- level students, and breath is a

:22:17.:22:22.

good thing. The Bach breath is one of the downsides of A-levels is

:22:22.:22:31.

specialising too early. This is interesting tough stf. Let's turn

:22:31.:22:39.

to -- interesting stuff. You might debate about the schools failing,

:22:39.:22:43.

we have a radical education secretary, but you want to bring in

:22:43.:22:48.

for-profit for failing schools? problem has been described by the

:22:48.:22:53.

head of Ofsted, the school inspectorate, decribing 2,000

:22:53.:22:58.

schools out of 20,000 schools. is primary and secondary? Which are

:22:59.:23:03.

called satisfactory, it is rating. It is not just my view, he's a

:23:03.:23:07.

former excellent headteacher, it is a view of lots of people in the

:23:07.:23:11.

system. England is described as having a long tale of

:23:11.:23:15.

underachievement in the system, this is the base of mediocrity that

:23:15.:23:24.

we are facing. We are talking about a base of mediocrity, and 6,000

:23:24.:23:27.

failing schools, is that your experience? There are 6,000 schools

:23:27.:23:31.

that are satisfactory. They will not be satisfactory in the future?

:23:31.:23:37.

It depends on what they get in the Ofsted report, many may have

:23:37.:23:40.

improved greatly. That is a 6,000 figure plucked out of the air. Of

:23:40.:23:44.

those schools, the characteristic of a satisfactory school is the

:23:44.:23:48.

quality of teaching in children departments uneven, it is not that

:23:48.:23:52.

they are routinely failing students, it is the quality across the board

:23:52.:23:56.

is not high enough. It is not random figure, 6,000 schools are

:23:56.:23:59.

satisfactory at the moment, 3,000 have been satisfactory more than

:23:59.:24:03.

once, they are coasting schools, not going anywhere. The Ofsted

:24:03.:24:06.

regime has got tougher. So these schools are more likely to be

:24:06.:24:09.

falling into this kind of category. I think there is a real problem

:24:09.:24:13.

here that we need to address. Unless you accept the nature of

:24:13.:24:17.

that problem. Then you can't move forward on to solution. What you

:24:17.:24:23.

are saying, when schools become academies, that in itself doesn't

:24:23.:24:27.

solve the problem, you need chain of academies to create a culture.

:24:27.:24:31.

You are saying if the schools get the new requirement to improve,

:24:31.:24:36.

then actually, there should be no ifs or abouts about it, they are

:24:36.:24:41.

just put out -- buts about it, they are just put out for profit? These

:24:41.:24:44.

academies have been around for ten years, there is plenty of evidence

:24:44.:24:51.

they work, and better than average in improving standards, than other

:24:51.:24:59.

ways, leaving local authority control. I would suggest that these

:24:59.:25:03.

chain add academies to improve results, the results are patchy.

:25:03.:25:06.

Are there enough academies sponsor and chains, to take on board and

:25:06.:25:09.

turn around the thousands of schools that might be told they

:25:09.:25:12.

need to sort themselves out. I'm worried they won't be, we need to

:25:12.:25:18.

be open minded about who can come in and offer help. A for-profit

:25:18.:25:24.

company? There are huge problems, this is James's second go at for-

:25:24.:25:28.

profit in schools. Which was the first one? The Policy Exchange

:25:28.:25:33.

report earlier this year. That wasn't mine. This is the second go

:25:33.:25:38.

at for-profit. My first go! issue is this, the international

:25:38.:25:41.

evidence does not bear out that for-profit schools raise standards.

:25:41.:25:46.

It hasn't happened in the USA. And Sweden, it has plummeted down the

:25:46.:25:50.

interNational League table, and now there is a parliamentary inquiry

:25:50.:25:54.

into for-profit schools. What is the problem in Sweden? The problem

:25:54.:25:59.

with for-profit schools is money which should be spent on pupils is

:25:59.:26:06.

spent sweating the assets so shareholders get a profit. The

:26:06.:26:10.

Miami Herald, $4 million taxpayer dollars goes into for-profit

:26:10.:26:16.

schools, they found students taught in sheds and students charge today

:26:17.:26:21.

graduate. There is a broader point, which is, does the money go into

:26:21.:26:23.

the classroom? Here is an interesting fact N some local

:26:24.:26:27.

authorities a third of children with special educational needs,

:26:27.:26:30.

some of the most vulnerable children are taught in for-profit

:26:30.:26:33.

independent schools. That is something that is a feature of the

:26:33.:26:38.

system. About half of nursery care is delivered by a mixture of

:26:38.:26:42.

charityability and profit-making providers. Elsewhere in the

:26:42.:26:46.

education system, let alone public services. You are not talking about

:26:46.:26:49.

ten schools, you are talking, essentially, it seems to me, that

:26:49.:26:53.

you might be talking about 3,000 schools going out. Do you really

:26:53.:26:57.

think there is the expertise in the for-profit sector? It is a question

:26:57.:27:02.

of scale. To say, the percentage of special schools are very small,

:27:02.:27:05.

they are highly-specialised provision. You would accept some

:27:05.:27:09.

schools are failing children in the state system? Absolutely, there are

:27:09.:27:12.

some schools that need to improve. It is how you do it, you should

:27:12.:27:17.

focus on teaching, not on structures. There are, of course,

:27:17.:27:21.

some brilliant for-profit providers, it is crazy not to call on their

:27:21.:27:25.

help when we need them. A little earlier this evening, the winner of

:27:25.:27:28.

the 2012 Man Booker Prize was announced, Gavin is there, he spoke

:27:28.:27:33.

to Hilary Mantel moments after the announcement.

:27:33.:27:40.

I'm here now in the glild hall with the 2012 and 2009 winner of the Man

:27:40.:27:44.

Booker Prize, Hilary Mantel. Congratulations. To win once is

:27:44.:27:48.

pretty good, to win twice is pretty extraordinary? It is astonishing, I

:27:48.:27:52.

could not be more surprised. What did winning the first time do for

:27:52.:28:00.

you in your career, 2009, until now. It was a huge change in the way I

:28:00.:28:05.

think my fiction was perceived, and a huge change in the public

:28:05.:28:11.

perception of my books. I had a respectable critical press, always,

:28:11.:28:17.

I never had book sales. Wolf Hall bought me 30 foreign publishers.

:28:17.:28:23.

And just an astonishing explosion of interest in my work all together.

:28:23.:28:27.

With Bring Up The Bodies we have already had very gratifying sales,

:28:27.:28:36.

because it is obviously the middle book of a trilogy. It is difficult

:28:36.:28:41.

for me to predict now. I think I had had a good idea that it was a

:28:41.:28:48.

great turning point, when I won in 2009. And this, it is new country,

:28:48.:28:52.

we mains to be seen. Sir Peter Stothard, the chair of the judges

:28:52.:28:56.

said you were inventing the historical novel for the 21st

:28:56.:28:59.

century. One of the things that struck me was the technology of the

:28:59.:29:03.

1530s was very different, but the human relations are something that

:29:03.:29:07.

we are very familiar with. There is mean and nasty, and it speaks to us

:29:07.:29:10.

now, that is one of the reasons, it seems to me, that the book really

:29:10.:29:16.

strike as cord? Yes, it is about regime change, it is about the

:29:16.:29:22.

political process at its grittyist and bloodiest. I don't force

:29:22.:29:26.

contemporary resonances, but if people want to pick them up, that's

:29:26.:29:33.

fine. It's boo two of a trilogy, there is no pressure on -- book two

:29:33.:29:36.

of a trilogy, there is no pressure on the third book, have you begun

:29:36.:29:41.

it? I have begun, he can't say how far along I am, because my method

:29:41.:29:45.

of writing is not that systematic, it is more like making a collage

:29:45.:29:50.

than making a book. I will work on it intensely for the next year,

:29:50.:29:53.

this is my top priority now. As you can imagine. I know there is a

:29:53.:29:58.

great deal of pressure on a Booker winner to go here, and swan about

:29:58.:30:06.

in the world smiling at people. But my dearest wish now, it may not

:30:06.:30:13.

sound grateful to say so, but my dearest wish is to be back at my

:30:13.:30:16.

desk, I have so many ideas, I want to capture them and get to the end

:30:16.:30:20.

of the third book. I was going to ask you something along those lions,

:30:20.:30:23.

I was going to ask you, do you like this kind of stuff. It has been

:30:23.:30:27.

very good for you, it is lovely to be received so well. But you are a

:30:27.:30:30.

writer, and actually that is quite different, it is lonely and

:30:30.:30:35.

different from this? Well, the self who is here tonight, seems to have

:30:35.:30:40.

no real relation to the self who sits at my desk. Because, as I said

:30:41.:30:46.

earlier, when you sit at your desk, you just are a beginner, it is

:30:46.:30:51.

always the first day, prizes don't count, applause doesn't count. It

:30:51.:30:56.

is just you and the struggle with your material. To get out of it

:30:56.:31:04.

what you can. And to serve it, to give it the best view. I know this

:31:04.:31:09.

will all fall into perspective. It won't seem irrelevant, it will be

:31:09.:31:14.

ungrateful to say that. It will get to seem rather beside the point.

:31:14.:31:19.

Once I'm steeped in that world again. Well, thank you very much

:31:19.:31:23.

for talking to us, and congratulations again. Hilary

:31:23.:31:28.

Mantel, 2012 Man Booker Prize winner.

:31:28.:31:31.

For three years now, the average worker has been getting worse and

:31:31.:31:35.

worse off, with pay lagging behind the cost of living. This morning we

:31:35.:31:38.

learned that the official measure of inflation, the consumer prices

:31:38.:31:42.

index, fell in September to 2.2%. But it's still higher than the

:31:42.:31:46.

average increase in wages. Many economists, who think September was

:31:46.:31:49.

as low as inflation is likely to get for a while, with higher bills

:31:49.:31:53.

and food prices likely to push up again. With money buying less than

:31:53.:31:57.

it used to, how are people coping. We have been to south Yorkshire to

:31:57.:32:05.

find out. It's 7.00am, and staff are

:32:05.:32:11.

preparing for the latest chapter in one of the greatest retail success

:32:11.:32:15.

stories in the past five years, the rise and rise of the discount

:32:15.:32:18.

supermarket. Thank you very much for coming to the opening of our

:32:18.:32:23.

brand-new store, and our very first star in Barnsley.

:32:23.:32:29.

This is Britain's 600th Lidl, by 10.30am, this is how busy it is.

:32:29.:32:34.

This is how the people who turn up for the opening try to resist the

:32:34.:32:39.

pressure of the most sustained squeeze on living standards in 70

:32:39.:32:46.

years. Those turkeys are not bad, they are dearer than that anywhere

:32:46.:32:53.

else. Apple juice �3.50, that is a lot. 99p for the cheap version at

:32:54.:32:59.

Aldi. Some of them, give them a try. More than three quarters of us use

:32:59.:33:02.

discount supermarkets like this one. Who is coming here? What financial

:33:02.:33:06.

pressure are they under? And how are they dealing with it? We turned

:33:06.:33:11.

up in Barnsley and asked them. In the recession that began four years

:33:11.:33:16.

a the average person got better off, as fuel prices dropped and interest

:33:16.:33:19.

rates fell, that meant your take home pay would buy you more than

:33:19.:33:23.

ever before. Since then, the average take home pay, in real

:33:23.:33:29.

terms, has fallen. If you are in the low-to-middle income bracket,

:33:29.:33:32.

you are not better off than you were in 2001. That is why there is

:33:32.:33:36.

such a need for people to come to stores like this and try to save

:33:36.:33:46.
:33:46.:33:46.

every penny they can. Jane is what can only be described

:33:46.:33:52.

as a canny shopper. I like steak pies. They are not bad. We will

:33:52.:33:58.

have some of them. She needs to be, Jane knows exactly how much she has

:33:58.:34:02.

left after her mortgage and bills to spend on food, after years

:34:02.:34:10.

living on a part-time cleaner's wage, she has developed a talent.

:34:10.:34:20.
:34:20.:34:20.

Ready Brek, that is cheap, it is �2.95 in more sons, �2.80 in Asda,

:34:20.:34:27.

and �2.92 in Iceland. The hunt for bargains on her end, requires a

:34:27.:34:32.

sharp memory and relentless concentration. This milk is cheaper

:34:32.:34:40.

than Iceland, Morrisons, and Asda. This is how a globalised economy

:34:40.:34:44.

hits you, right in the shopping basket.

:34:44.:34:51.

That pork price on the shelves, reflects a 40% wholesale price in

:34:51.:34:57.

the price of meat since 2007. If you thought it's killing you, think

:34:57.:35:04.

about the pigs, this year's US poor maize crop meant the price in

:35:04.:35:10.

keeping pigs jumped, it led to a slaughter of pigs because farmers

:35:10.:35:15.

can't afford it keep them. Analysts predict a 30% increase next summer.

:35:15.:35:18.

Jane is slightly embarrassed to show us what happens when you are

:35:18.:35:23.

really keen on bargain. You mean like my Pot Noodles, where they are

:35:23.:35:31.

four for �2. That is a lot of Pot Noodles. They were 50p each rblgs

:35:31.:35:37.

usually �1.80 --, usually �1.80 for two. After two divorces and seven

:35:37.:35:42.

children, staying in the black is part of survival. What are the big

:35:42.:35:49.

financial pressures? My mortgage. �408.77, council tax, �14 a week,

:35:49.:35:54.

my electricity, with I pay �20 a week on, water is �500 a year.

:35:54.:36:00.

After you have paid all that, what are you left with? About �150 a

:36:00.:36:05.

month. Enough to have fun with? Because I have to buy food. So the

:36:05.:36:11.

food comes out of that. Yes. After the bills. When you pay for food

:36:11.:36:16.

how much do you have left? About �60. For the whole month. Yeah. But

:36:17.:36:22.

I don't drink, I don't smoke. you been on holiday recently?

:36:22.:36:25.

in 13 years. Can't afford it. haven't been on holiday. No, can't

:36:25.:36:30.

afford it. Inflation was far higher in the 70s

:36:30.:36:35.

and early 80, but back then, wages largely beat inflation, while

:36:35.:36:39.

pensioners fell behind, now it's the opposite. State pensions went

:36:39.:36:49.
:36:49.:36:50.

up by 5.2%, average wages by less than half that. 69p, that's quite

:36:50.:36:58.

cheap. -- 49p, that's cheap. If you are on

:36:59.:37:03.

the minimum wage like Dawn, you might envy pensioner, she works at

:37:03.:37:13.

a local shop, where her pay is going up 1.8%, or 11p an hour.

:37:13.:37:18.

Since 2009, the average household income has fallen in real terms by

:37:19.:37:24.

�2,400 a year, or �46 a week. Supermarkets protect their profits,

:37:24.:37:28.

typically making a margin of anything between 2p and 6p in the

:37:28.:37:33.

pound. How do discounters get their prices so low. We only offer the

:37:33.:37:37.

customer one type of sweet corn, we only produce one type of labelling,

:37:37.:37:41.

one can plant, one production run, also with the economies of the

:37:41.:37:44.

number of stores we have, it means we can really get economies of

:37:44.:37:48.

scale, without compromising on the quality. By having one type of

:37:48.:37:52.

sweet corn, rather than ten, you maximise your buying power and

:37:52.:37:57.

bring the price down. That is how we do it, nothing to do with the

:37:57.:38:00.

quality, but more on how to buy the product. By cutting the number of

:38:00.:38:06.

staff that have to handle the product, Lidl can cut its wage bill

:38:06.:38:09.

and the prices. The other way discounters drive down prices is by

:38:09.:38:15.

cutting out the cost of paying someone to unpack the goods and put

:38:15.:38:20.

them on the shelves, they go from the warehouse, on to the lorry, on

:38:20.:38:25.

to the pallet, and on to her, ready to sell. Have you noticed changes

:38:25.:38:29.

in the cost of living in recent times? Yeah I have. Noticed it the

:38:29.:38:33.

last couple of years. Everything seems to be going sky high. Access

:38:33.:38:37.

to cheap prieks at all supermarkets helps people in Dawn's position

:38:37.:38:40.

doing without. Even with a husband earning, the bills have been

:38:40.:38:44.

rocketing, and there is not much left for fun. Wefrpblgts don't go

:38:44.:38:51.

out often together. We might -- don't get out often together. We

:38:51.:38:55.

might get out once or twice a year. Sometimes we might go out for a

:38:55.:38:58.

couple of hours together on an afternoon. That is not often.

:38:58.:39:02.

much do you have coming in from the part-time work? Just over �140 a

:39:02.:39:09.

week. What does that have to cover? I buy most of our food. I pay TV

:39:09.:39:13.

license, and water. And then my husband he pays the rest of the

:39:13.:39:18.

bills. When I have been paid I sit down and sort it all out what I

:39:18.:39:24.

have to pay out. That is when I find out how much I have left.

:39:24.:39:31.

For now, Dawn's content with zumba twice a week as her quota of fun,

:39:31.:39:35.

her real wage might be falling, but with a son at home, she doesn't

:39:35.:39:39.

want full-time work, as if there was much.

:39:39.:39:43.

Barnsley used to rely for work on mining and manufacturing. Now, the

:39:43.:39:48.

big employers of the public sector, and an internet fashion company,

:39:48.:39:52.

and retailers, around 11% of people here are unemployed, three points

:39:52.:40:00.

above the national average. Two for �2.50 as well. They are

:40:00.:40:10.
:40:10.:40:16.

dearer, them pork chops, I think it is cheap Tory get them at Tescos.

:40:16.:40:20.

Michael and Becky Lewis are raising four children on benefits. Lately,

:40:20.:40:24.

they have been feeling the financial pinch. When we were

:40:24.:40:31.

shopping at Morrisons it was costing us �140, �150 a week. We

:40:31.:40:35.

couldn't give the kids anything nice like biscuit and things that

:40:35.:40:38.

kids like, the treats. We were having proper meals, but we were,

:40:38.:40:44.

we had to budget so, we couldn't get luxuries.

:40:44.:40:48.

Now I write a shopping list and work out what meals every day we

:40:48.:40:53.

will have. If we have pasta three or five times a week it is cheap,

:40:53.:41:00.

that is cheap. We have to know what we are spending and where we are.

:41:00.:41:03.

Becky has been diagnosed with obsessive compulsive disorder,

:41:03.:41:08.

something that robs her of sleep and keeps her on her feet all day.

:41:08.:41:12.

She jokes that in the supermarket it has itss. I have calculated it

:41:12.:41:19.

on my phone, because I'm that worried about overspending, we have

:41:19.:41:26.

three ways round and I have been putting things back.

:41:26.:41:32.

If a drought in the US forced up the price of maize, the floods here

:41:32.:41:39.

in Britain have forced up the price of spuds. Floods have forced

:41:39.:41:46.

importation of -- twice as much in the last few years. When you import

:41:46.:41:51.

you pay higher transport costs. Michael had worked for 20 years in

:41:51.:41:56.

a company when the financial crisis hit. He had been struggling with

:41:56.:41:59.

some of the work because he had been plaged by back injuries, and

:41:59.:42:03.

was selected for redundancy. couldn't do the work, some days I

:42:04.:42:08.

went to work I couldn't even bend over. We are ashamed we have to

:42:08.:42:13.

live on benefits. It just happens that we have been dealt a raw deal.

:42:13.:42:22.

I lost my house. I had a house for 13 years, we had everything. It is

:42:22.:42:26.

rubbish now, to what it used to be like. Can you hope it might, some

:42:26.:42:31.

day, get back to better? I hope things pick up, yeah.

:42:31.:42:35.

It is not only those on the lowest incomes who are under pressure to

:42:35.:42:39.

hunt down the cheapest groceries they can find. Lidl's car park has

:42:39.:42:43.

no shortage of some what pricey cars, and Aldi's sales have grown

:42:43.:42:49.

by a third in just a year. I was just having a look to see what was

:42:50.:42:59.
:43:00.:43:00.

on special, grapes, two for �3, that is all right.

:43:00.:43:04.

Julian Thomson wouldn't say he's exactly hard up, he has two house,

:43:04.:43:09.

one with the mortgage paid off, and thousands of pounds saved up, the

:43:09.:43:17.

fruit of more than � 20 -- of more than 20 years as a driving

:43:17.:43:21.

instructor. He's not getting any richer. In March Julian had to stop

:43:21.:43:29.

work and take ill-health retirement, his income dropped by �500 a month.

:43:29.:43:33.

Stkpwhro the worst financial pressure for Julian is paying --

:43:33.:43:35.

the worst financial pressure for Julian is paying for petrol.

:43:36.:43:39.

Remember when the Chancellor said he would put fuel in the tang of

:43:39.:43:43.

the British motorist, putting off the 3p rise in fuel duty until

:43:43.:43:47.

January. That will kick in quite soon now, meanwhile, the prices at

:43:47.:43:51.

the pumps are already higher than when the Chancellor made that

:43:51.:43:55.

announcement. You could hope that the global slowdown would mean

:43:55.:44:00.

reduced demand for fuel, and that would bring prices down. That is

:44:00.:44:05.

the economic theory, so far it is only a theory.

:44:05.:44:10.

Motorbikes were once Julian's life. These days he watches carefully

:44:10.:44:14.

while his son rides one. Trying not to think what happened to him in

:44:14.:44:19.

2002. Coming up to a round about to turn left at the round about, a

:44:19.:44:25.

lady in the car basically drove straight into me as if I wasn't

:44:25.:44:30.

there, and shunted me into the round about. That is where it

:44:30.:44:35.

pulled everything in my neck and back. I have always thought I could

:44:35.:44:39.

get myself, I could try to get myself better and everything else,

:44:39.:44:44.

and literally I have just got worse and worse and worse, as time has

:44:44.:44:49.

gone on. Did you want to stop work? I went back to work, I was off

:44:49.:44:53.

nearly six months in total from the accident. When the pain got too

:44:53.:44:57.

much and he was forced to retire, a Civil Service doctor told Julian he

:44:57.:45:00.

couldn't do any Civil Service job, yet now Government reforms mean

:45:00.:45:04.

that someone else in the Civil Service is telling him his

:45:04.:45:06.

Employment and Support Allowance will be stopped in February,

:45:06.:45:12.

because one day he might be able to work.

:45:12.:45:17.

My Employment Support Allowance rate will stop. How much is that

:45:17.:45:22.

worth? That is about �400 a month. Just cut off. Just stopped. Despite

:45:22.:45:27.

what happened to his dad, his son, Lewis, feels he doesn't have an

:45:27.:45:30.

alternative to riding a bike. Aren't you tempted to go for

:45:30.:45:34.

something safer, like a car, instead of a bike? I'm not tempted

:45:34.:45:38.

at all, because the insurance is much, much higher than on a bike.

:45:38.:45:43.

Also the petrol usage, the tax, the parking fees. How much would it

:45:44.:45:49.

cost to insure yourself with a car? It depends, it ranges from about �8

:45:49.:45:57.

though to you to �51,000 -- �8,000, to about �51,000 for some insurers

:45:57.:46:01.

to insure me. The Government reports to action it has taken to

:46:01.:46:04.

lift the pressure of the big squeeze on living standards, like

:46:04.:46:08.

raising the personal tax allowance, but so far those measures haven't

:46:08.:46:10.

brought economic growth. We have known about the squeeze on living

:46:10.:46:13.

standards for a while now. Measures have been taken to try to ease it.

:46:14.:46:17.

We have been hunting for bargains, the supermarkets have been bearing

:46:17.:46:22.

down on price, even the Government has been trying to lift people out

:46:22.:46:25.

of taxation, but the measures aren't always well targeted on the

:46:25.:46:30.

people who are getting squeezed the most. It is not really until global

:46:30.:46:34.

commodity prices start to come down, that the pressure on our living

:46:34.:46:41.

standards will start to lift. The economic storms blowing across

:46:41.:46:45.

from the eurozone crisis, and the rest of the world, should have had

:46:45.:46:48.

a silver lining, reduced demand for fuel and food, should bring the

:46:48.:46:54.

cost of living down, but that's yet to happen. Here in Lidl Britain, we

:46:54.:46:58.

now need our bargains like never before.

:46:58.:47:02.

That's all for tonight. I will be back tomorrow, hope you can join me

:47:02.:47:12.
:47:12.:47:35.

then. From all of us here, good It will turn into a pretty wet end

:47:35.:47:41.

to the night for most place. Heavy rain marching on a strong south-

:47:41.:47:44.

westerly wind. Arriving in Scotland in the morning, it will stay there.

:47:44.:47:48.

For the rest of us, things perking up nice low, in the middle of the

:47:49.:47:57.

afternoon. Sunshine, the odd shower, most of us dry. 14-16 degrees,

:47:57.:48:03.

breezy but windy towards most ars areas. The west coast of England

:48:03.:48:06.

and Wales could be battered by gusts up to 60 miles an hour.

:48:06.:48:09.

Warnings from both the Environment Agency and the Met Office, because

:48:09.:48:15.

we have high spring tides, the risk of coastal flooding, and with the

:48:15.:48:20.

grounds saturated trees could come down. After a wet night the rain

:48:20.:48:23.

could break up into showers. The hope of brightness, but not across

:48:23.:48:26.

the heart of Scotland. It looks like a cold and bleak afternoon

:48:26.:48:30.

here, and temperatures really held back by north-eastly wind. Looking

:48:30.:48:34.

further ahead into Thursday, across northern areas, a fairly mixed

:48:34.:48:38.

picture, still the threat of some showers, particularly for Scotland

:48:38.:48:41.

and Northern Ireland. Dry weather before rain threatens the south-

:48:41.:48:47.

Download Subtitles

SRT

ASS