:00:15. > :00:19.It was bad, but it wasn't as bad as many had feared. The tropical storm
:00:19. > :00:22.that hit the American east coast was ferocious, electricity stations
:00:22. > :00:27.exploded, houses burned to the ground, tunnels flooded. But in the
:00:27. > :00:30.end, for all the pain, New York could take it. How will history
:00:30. > :00:35.measure the impact of the great storm of 2012.
:00:35. > :00:39.REPORTER: How long do you think it will take to get life back to
:00:39. > :00:45.normal? Life back to normal, a long time. Right across the street you
:00:45. > :00:49.can see the whole of Hoboken, flooded, cars floating, still.
:00:50. > :00:54.will hear from the man who was Mayor of Norl lones during
:00:54. > :00:58.Hurricane Katrina. Here at home, has the great promise of capitalism,
:00:58. > :01:03.that we could all look forward to rising standards of living ended.
:01:03. > :01:05.We are told today many more of us will be worse off in ten years time
:01:06. > :01:09.than we were ten years ago. We will discuss with, among others, the
:01:09. > :01:19.boss of British Gas, and the Conservative minister they say has
:01:19. > :01:20.
:01:20. > :01:24.two brains. Thus far, over 30 people have been
:01:24. > :01:28.killed by the storm which hit the east coast of the US last night. It
:01:28. > :01:37.had already killed twice that number in the Caribbean. But they
:01:37. > :01:42.didn't die on television. The storm's effects on the city that
:01:42. > :01:46.never sleeps was pretty stunning, it close the Stock Exchange and
:01:46. > :01:51.theatres and interrupted the election campaign. It has been a
:01:51. > :01:56.stark reminder for a country built on the belief in the possible, that
:01:56. > :02:06.there are limits. We go and join Mark Urban in Manhattan.
:02:06. > :02:10.Whereabouts, precisely, Mark? We're on 30th and 1st A&E about a
:02:10. > :02:18.third of the way, down Manhattan island, or two thirds, whichever
:02:18. > :02:22.way you look at it. You can see a few Bocas behind me, up town,
:02:23. > :02:27.everything down town has no power, we have power up town. What you can
:02:27. > :02:34.see if you go down there, is great modern city deprived of its life
:02:34. > :02:37.force, electricity. People are out on the streets, talking, they can't
:02:37. > :02:41.cook, they can't do anything in their flats. They are in groups in
:02:41. > :02:47.the dark trying to make sense. In some places restaurants are using
:02:47. > :02:52.candles and storm lat terns to carry on as normal -- lant terns to
:02:52. > :02:57.carry on as normal. Homeless people in terrible straits. While the
:02:57. > :03:01.water has receded from the streets, the thing about that part of
:03:01. > :03:06.Manhattan, the built up, Wall Street area, so many buildings go
:03:06. > :03:11.two or three floors underground, those floors are flooded. We saw
:03:11. > :03:15.pumps working to try to clear them of water. In one building thereof
:03:15. > :03:19.20 feet of water still down -- there was 20 feet of water still
:03:19. > :03:23.down there. That could be a long haul. It is a new reality the city
:03:23. > :03:28.is waking up to, and we witnessed earlier across the river today.
:03:28. > :03:32.Welcome to Hobo ke, n, a poor city on the New Jersey side of the
:03:32. > :03:38.Hudson. Play like this felt the worst of it. By the time we got
:03:38. > :03:41.there, the water had already fall bin four feet. On the heights above,
:03:41. > :03:46.power lines had been brought down across this street. Bringing life
:03:46. > :03:54.to a halt. Nobody was ready for this, this
:03:54. > :03:59.never happened before it was devastating. I have a house down
:04:00. > :04:03.the jersey shore, it is under water they tell me. In this deluge, the
:04:04. > :04:09.poorest have been hit hardest. We found the emergency services saving
:04:09. > :04:15.a homeless man. Looking like a biblical character, escaping a
:04:15. > :04:23.biblical torrent, he had waited it out on some high ground until
:04:23. > :04:28.rescue arrived. Nature's irresistable force, in New York,
:04:28. > :04:32.met an immovable object, America's greatest city. That city is now
:04:32. > :04:38.working hard to restore normality. The damage we suffered across the
:04:38. > :04:41.city is clearly extensive, and it will not be repaired overnight. The
:04:42. > :04:45.two biggest challenges facing our city going forward are getting our
:04:45. > :04:49.mass transit system up and running, and restoring power. I think it is
:04:49. > :04:53.fair to say that you should expect, given the extent of the damage,
:04:53. > :04:59.power may be out in lot of places for two or three days, and maybe
:04:59. > :05:05.even a little bit longer than that. I don't know what's going on, what
:05:05. > :05:10.the hell is this? Last night, the had Hurricane hit New York.
:05:10. > :05:14.Shorting out power supplies in spectacular fashion. In places, the
:05:14. > :05:21.subway flooded, and one of the city's hospitals, bereft of
:05:21. > :05:26.electricity, had to evacuate hundreds of patients. Around 9.00pm,
:05:26. > :05:29.we lost our power, unfortunately the hospital's back-up generators
:05:30. > :05:34.also failed. They had to evacuate, about 215 patients from the
:05:34. > :05:39.hospital in the middle of the night. People were like, if can you help
:05:39. > :05:44.evacuate patients from the hospital, then come out. But we heard that
:05:44. > :05:51.patients were being carried down the stairs, because the elevators
:05:51. > :05:57.weren't working. In many states, not least Washington DC, the damage
:05:57. > :06:00.was minimal. The President's decision to suspend campaigning, in
:06:00. > :06:05.order to take charge of the situation, appeared entirely
:06:05. > :06:07.justified. I was on the phone for the third time yesterday, last
:06:08. > :06:11.night, with the President of the United States. He called me at
:06:11. > :06:16.midnight last night, to check in on how things were going. He was
:06:16. > :06:19.seeing reports about how bad things were in New Jersey. The co-
:06:19. > :06:24.operation from the President of the United States has been outstanding,
:06:24. > :06:28.he deserves great credit. Has the President used the situation as the
:06:28. > :06:34.city struggles to get back on its feet to his political advantage. It
:06:34. > :06:39.certainly looks that way. He's remaining in charge of the relief
:06:39. > :06:43.efforts, eschewing the campaign, while his rival, Mitt Romney, has
:06:43. > :06:47.indicated he will resume his campaigning activities tomorrow.
:06:47. > :06:52.But this could still turn bad for the President. If people go days
:06:52. > :06:56.without power, and cities do not get moving again, it could turn
:06:56. > :07:00.into a toxic blame game. Something Mr Obama seems to understand all
:07:01. > :07:08.too well. My instructions to the federal
:07:08. > :07:11.agency has been, do not figure out why we can't do something, I want
:07:11. > :07:15.you to figure out how we do something. I want you to cut
:07:15. > :07:19.through red tape, bureaucracy, there is no excuse for inaction at
:07:19. > :07:25.this point. I want every agency to lean forward, and to make sure that
:07:25. > :07:30.we are getting the resources where they need to be, as quickly as
:07:30. > :07:35.possible. This crisis hardly matches up to 9/11, but New York is,
:07:36. > :07:40.once again, at the centre of a national drama. And the proximity
:07:40. > :07:45.of election day, only emphasises, more strongly, what's at stake.
:07:46. > :07:53.Let's just catch up now with Mark in New York. The bigger picture,
:07:53. > :07:57.Mark, politically? Well, the fact that the election is less than a
:07:57. > :08:03.week away is colouring everything. So the President, for example, says
:08:03. > :08:07.that he is still not returning to the campaign trail, officially, in
:08:07. > :08:13.order to co-ordinate the relief efforts, yet we hear he's coming to
:08:13. > :08:17.New Jersey tomorrow, to go on fact- finding mission. Of course,
:08:17. > :08:20.exercising control, looking in charge, he will also be meeting
:08:21. > :08:24.governor Christie, who we heard from in the piece. There's a
:08:24. > :08:29.Republican, who seems to be giving him fulsome public support in this
:08:29. > :08:34.crisis. The politics of that too complex, but it would seem, that he
:08:34. > :08:41.doesn't want Governor Romney to win, he wants to position himself for a
:08:41. > :08:45.bid for the presidency next time round. Politic suffuse all of this.
:08:45. > :08:48.Mitt Romney, in order to try to look relevant, is going back on the
:08:48. > :08:52.campaign trial tomorrow. The difficult thing for him, of course,
:08:52. > :08:58.will be to appear to be doing something responsible and serious,
:08:58. > :09:06.while the President is managing this crisis. One man who knows
:09:06. > :09:10.about natural disasters is Ray Negan the Mayor of New Orleans
:09:10. > :09:16.during the Hurricane Katrina. He joins us from Dallas. What has had
:09:16. > :09:22.been like watching this storm hit the east coast? Well, it's been
:09:22. > :09:25.fairly surreal for me. This storm was very dangerous, it had an
:09:25. > :09:29.incredible footprint. It wasn't as strong as Hurricane cat treen
:09:29. > :09:32.national cirriculum but I'm catching in -- Hurricane Katrina,
:09:32. > :09:35.but I'm catching how well the Government and the federal state
:09:35. > :09:40.are co-operating. President Obama is doing an outstanding job of
:09:40. > :09:43.making sure that the resources. I love the fact that he's saying no
:09:43. > :09:48.excuse from any of his federal agencies, get the job done. So the
:09:48. > :09:55.system is working much better now than it worked begin Hurricane
:09:55. > :09:59.Katrina hit you? -- working much better than when Hurricane Katrina
:09:59. > :10:02.hit you? It seems to be working much better. This is the second
:10:03. > :10:06.Hurricane that has threatened the east coast. I could see from the
:10:06. > :10:13.previous Hurricane, they were using some of the techniques and lessons
:10:13. > :10:18.we learned, which I outlined in my book, Katrina's Secrets. It seems
:10:18. > :10:23.we have learned hard lessons, but they are being put into action, and
:10:23. > :10:29.the responses with FEMA positions assets and water and food for
:10:29. > :10:33.citizens, is working much better than it did during Hurricane
:10:33. > :10:37.Katrina. What do you learn about human behaviour from this sort of
:10:37. > :10:41.natural disaster? Well, it's going to be interesting in the next
:10:41. > :10:45.couple of phase. They have gotten through the pre-storm event, the
:10:45. > :10:50.storm event, now the aftermath, I think is just as difficult. Because
:10:50. > :10:54.frustrations are going to start to mount. No matter how quickly they
:10:54. > :10:58.restore power, or get the debris cleaned up, many citizens will
:10:58. > :11:03.still be frustrated. They will want to see their city back the way it
:11:03. > :11:06.was before the storm hit. And that's just not possible. So
:11:06. > :11:10.managing expectations, managing frustrations going forward, is
:11:10. > :11:15.going to be a key challenge. Especially when you have an
:11:15. > :11:23.election cycle that's right upon us. Managing lawlessness, you
:11:23. > :11:26.discovered, didn't you? Well, lawlessness for us, keep in mind
:11:26. > :11:32.Hurricane Katrina was so devastating, 80% of the city of
:11:32. > :11:37.devastated and under water. People thought it was the end of the world.
:11:37. > :11:43.In modern, urban people, just don't have a stockpile of food and water
:11:43. > :11:49.to eat and to drink. So looting started for survival. Then once it
:11:50. > :11:53.got to the point where no-one was really stopping it, because we were
:11:53. > :11:57.rescuing people, then opportunistic people took over and it got a bit
:11:57. > :12:03.out of hand. What do you expect to be the political impact. We saw
:12:03. > :12:09.then the Governor of New Jersey, being really handsome in the
:12:09. > :12:13.tribute he paid the President, although he's actually of Mitt
:12:13. > :12:19.Romney's persuasion, in theory? Yeah, he's a Republican, Governor
:12:19. > :12:23.Christie, but I know him. He's a good man. And he's just telling the
:12:23. > :12:27.truth. President Obama has stepped forward, he's been in constant
:12:27. > :12:32.communications, is the way I understand things have gone. He's
:12:32. > :12:37.forced his people to really focus on responding at a much higher
:12:37. > :12:42.level. And President Obama, before he became President, was a US
:12:42. > :12:46.senator, and he visited New Orleans after the storm, I visited him in
:12:46. > :12:50.his office several times, he helped us a lot. He learned a lot from
:12:50. > :12:54.Katrina and he is applying those lessons. Thank you for joining us.
:12:54. > :12:57.Now, unless you are very rich indeed, it can't have Es kaiped
:12:57. > :13:01.your notice, this country has become -- escaped your notice, this
:13:01. > :13:05.country has become a very costly place to live. The staples of life
:13:05. > :13:09.are more expensive than ever, and wages have simply not kept up.
:13:09. > :13:12.People on low to middle incomes, working people, not those on
:13:12. > :13:17.benefits, face the prospect of being poorer in 2020 than they are
:13:17. > :13:22.now. Once upon a time, benign employers raised pay to keep pace
:13:22. > :13:25.with the cost of living. If they didn't, trades unions organised
:13:25. > :13:29.strikes to meet the need. Now it is different, something has gone badly
:13:29. > :13:33.wrong, and the promise of western capitalism, of ever rising rates of
:13:33. > :13:38.pay, has turned out to be a cheque that's bounced. What's to be done?
:13:38. > :13:41.Tonight we are taking a report from an organisation called the
:13:41. > :13:51.Resolution Foundation, who have got their own ideas to tackle the
:13:51. > :13:54.
:13:54. > :13:58.problem. First Allegra Stratton reports.
:13:59. > :14:03.These kids, and then their kids, and the kids of their kids, they
:14:03. > :14:09.would suffer setback, but broadly their's was to be a steady march
:14:09. > :14:13.across sun lit uplands. We all know about the American dream, but that
:14:13. > :14:20.faulted some decades back. In Britain, we would keep on never
:14:20. > :14:24.having had it so good. Except the muscles carrying us up the hill are
:14:24. > :14:28.jamming. Women are driven from the job market by the cost of child
:14:28. > :14:34.cautious and women and men by machines. Sheltering inside the
:14:34. > :14:38.home, with the declining wherewithal to pay for that home.
:14:38. > :14:44.Assume the economy returns to average levels of growth, by 2020,
:14:44. > :14:49.lower income households could still be at incomes not seen since 1993,
:14:49. > :14:54.middle income families could be seen at incomes last seen in 2001,
:14:54. > :14:59.that is according to this man, and 11 otherwise men and women. During
:14:59. > :15:02.the mid-1990s, through to the early 2000, we had a good period, then
:15:02. > :15:06.things turned a bit darker after that. It happened for a number of
:15:06. > :15:10.reasons. In part the share of GDP going to profit, rather than out to
:15:10. > :15:15.labour, rows in that period, there was money left -- rose in that
:15:15. > :15:20.period. There was money back to the worker. There were more costs on
:15:20. > :15:23.employers, that squeezed wages more. The population were getting older,
:15:23. > :15:27.there were greater pension contributions, and high levels of
:15:27. > :15:29.wage inequalities in this country. If you were down the spectrum, a
:15:29. > :15:33.lot of money was sucked into the pockets of the better off. We
:15:33. > :15:37.didn't do well for sharing out the gains from growth during some of
:15:37. > :15:44.those years. The Resolution Foundation's commission of 12
:15:44. > :15:50.eminent people across public life probed figures like this. Why from
:15:50. > :15:54.2003-20008 did the incomes of low to middle households grow by just
:15:54. > :16:00.0.3%, while the economy grew 1.4%. The boiler of living standards may
:16:00. > :16:04.not be working any more, can these chaps fix it? I believe I need to
:16:04. > :16:07.do more nowadays. My mother and father would have had to do then, I
:16:07. > :16:13.need to do more than they did then. Why do you think that? Just to live
:16:13. > :16:17.on a nice level, and where I would like to be. One of the
:16:17. > :16:20.commissioners, Phil Bentley, is the managing director of British Gas.
:16:20. > :16:24.This hourglass economy is lousy jobs at the bottom and lovely jobs
:16:24. > :16:28.at the top, so a lot of unskilled work out there, quite a few jobs at
:16:28. > :16:32.the stop which are skilled, but in the middle not so much, you see
:16:32. > :16:37.your role as helping with that middle? All our people at British
:16:37. > :16:41.Gas have got really important skills. Just they are either in the
:16:41. > :16:44.customers' homes, helping reduce the energy bill, or getting the
:16:44. > :16:48.heating working. British Gas, by its own declaration, has been
:16:48. > :16:52.training people to light the gas lights of London for 200 years, you
:16:52. > :16:58.have always been training, what is different about the jobs market now.
:16:58. > :17:03.This isn't a choice, you need to train them? We have great guy, as
:17:03. > :17:07.you guys will attest, 50 people apply for every one place. There
:17:07. > :17:11.are fewer jobs around like our jobs. Either you are a graduate or off at
:17:11. > :17:16.university, sometimes in low-paid jobs. In the middle there, these
:17:16. > :17:23.are the skills that require dexterity, require hard work, and
:17:23. > :17:29.people can progress. Bentley sound like a disciple of pre-distribution,
:17:29. > :17:33.that is the Labour leader's big idea. For the uninitiate, it is the
:17:33. > :17:37.feeling that the state can no longer redistribute wealth so,
:17:37. > :17:41.employers need to do more. We can't expect the state to bail us out, we
:17:41. > :17:45.have to do it with our own skills, and operate in a competitive world
:17:45. > :17:51.out there. And Britain has to compete. That goes back to skills
:17:51. > :17:54.from schools, apprentices, all the way through, we're competing as
:17:54. > :17:57.Germany, competing against Singapore and the rest of the world.
:17:57. > :18:02.Bentley and the other commissioners believe kprot Britain must spend
:18:02. > :18:06.more on wages. -- corporate Britain must spend more on wages. They show
:18:06. > :18:09.how on the bottom three sectors of the bar chart.
:18:09. > :18:15.Paying the minimum wage to reflect the cost of living wouldn't exactly
:18:15. > :18:18.break the bank. And then, what about opening the
:18:18. > :18:23.door to many people who currently feel slightly shut out. Over the
:18:23. > :18:28.last 30 years, many households have seen living standards rise, because
:18:28. > :18:33.women entered the work force. If it's to be reversed, to too will
:18:33. > :18:37.its effects on people's pockets. This is another of the Resolution
:18:37. > :18:40.Foundation's commissioners. Gaby used to do a job like mine. She was
:18:40. > :18:44.the Observer Newspaper's political editor, until she really did leave
:18:44. > :18:48.to spend more time with her family. Gaby doesn't pretend her economic
:18:48. > :18:52.situation is typical of those on low-to-middle income jobs. She
:18:52. > :18:56.knows first hand what it is like to balance childcare with care for
:18:56. > :19:00.your career. What I liked about the idea of this report, is it took
:19:00. > :19:04.what is often seen as fluffy female issues, like childcare, working
:19:04. > :19:07.motherhood, and said these are not add-ons to politics, these are core
:19:07. > :19:12.economic issues, and getting women back to work, making sure people
:19:12. > :19:16.can work when they want to work, is absolutely critical to the future
:19:16. > :19:20.of the economy and GDP, I liked that hard-edged approach.
:19:21. > :19:27.report shows that UK female employment remains at significantly
:19:27. > :19:33.lower levels than other advanced economies. The UK is 15th in the
:19:33. > :19:36.OECD for employment between wages of 254665. If we were to move up as
:19:36. > :19:40.those better achieving economies, it would mean mail I don't know
:19:40. > :19:44.extra women going into employment. The gap opens -- a million extra
:19:44. > :19:48.women going up into employment, the gap opens up with mothers to non-
:19:48. > :19:53.mothers. There is, of course, another generation just as busy
:19:53. > :19:57.looking after yet another generation. The 55s-65s, who look
:19:57. > :20:02.after either their grandchildren or elderly parents or both. Childcare,
:20:02. > :20:05.social care, a wrap-around welfare state. There are problems at two
:20:05. > :20:11.ends of the scale. Everyone thinks about working mothers, there is a
:20:11. > :20:16.real problem with over 55s as well, a gap in the labour market, some
:20:16. > :20:19.could be working and can't. Some reach 55 and they are ill, they
:20:19. > :20:23.have heart problems, and they can't all be in work. However, there are
:20:23. > :20:26.a lot of people who probably could work. What we were looking at is
:20:26. > :20:31.whether there are financial incentives, say you allowed them to
:20:31. > :20:38.keep more of their money stage. You would use the Nics threshold, more
:20:38. > :20:42.of those people could be in work. So, after a year, the commission
:20:42. > :20:47.has come to Andrews end, it recommends increasing the urpbt --
:20:47. > :20:53.the an end, it recommends increasing childcare for 3-4-year-
:20:53. > :20:58.olds to 25 hours a week. It would allow people to take part-time jobs,
:20:58. > :21:04.charged the at �1 an hour or �10 a week. The commission would reduce
:21:04. > :21:07.taxes for low-paid, older workers, to encourage them to stay in work.
:21:07. > :21:11.And finally, once and for all, the commission would solve the thorny
:21:11. > :21:15.problem of social care and how to fund it. So, a report that shows
:21:15. > :21:20.that there is a way, now over to Westminster to gauge if there is a
:21:20. > :21:25.will. Gathered here are three of the
:21:25. > :21:30.people who contributed to the lives standards commission. Phil Bentley,
:21:30. > :21:32.the managing director of British Gas, Sally Russell of Netmums, and
:21:32. > :21:36.Clive Cowdrey, the chair of the Resolution Foundation. And a
:21:36. > :21:42.businessman, also with us, is lets let lets, the Universities'
:21:42. > :21:45.Minister and author of a book called the Pitcher: How The Baby
:21:45. > :21:51.Boomer Stole Their Children's Future. We will take the issues in
:21:51. > :21:55.three sections. First David Willetts, I would like to ask you,
:21:55. > :21:58.this is not about recession, retrenchment, it is about something
:21:58. > :22:03.going fudgely wrong with the way the economy works, do you accept
:22:03. > :22:07.the analysis? Yes, I do. It traces this trend back to the beginning of
:22:07. > :22:10.this century, even earlier in the US. I think it is a very important
:22:10. > :22:14.report, and something that will promote a lot of debate. There is
:22:14. > :22:19.no sign it will get any better without some sort of action, and
:22:19. > :22:22.frankly, sticking plaster sort of action is what much of this
:22:22. > :22:27.proposal is? I don't think we should, nothing is inevitable, can
:22:27. > :22:30.you do things. Even in the report we have just seen, the apprentices,
:22:30. > :22:33.the Government is creating more apprentices, absolutely, to have
:22:33. > :22:37.more people in the middle income jobs, which is where this report
:22:37. > :22:42.identifies the squeeze is happening. I think we can partly tackle that,
:22:42. > :22:44.by training people, giving the best qualifications to get well-paid,
:22:44. > :22:48.secure jobs. That is what more apresent at thiss are about. There
:22:48. > :22:56.is a lot more to do. Even in a recession, we are trying to tackle
:22:56. > :22:59.it. Let's lock at the central worry in this, people's standards of
:22:59. > :23:04.living are not rising because rates of relative pay are not rising at
:23:04. > :23:10.the rate they should be. Why does that matter? It isn't as if people
:23:10. > :23:14.were starving in 1939, which is -- 1993, which is the comparison we
:23:14. > :23:18.are getting to? One of the reasons people weren't starving is the
:23:18. > :23:23.introduction of tax credits, which means we have been topping up
:23:23. > :23:27.household incomes, to the tune of around �500-�600 a year. We have a
:23:27. > :23:30.tax credit bill at �32 billion a year. I don't think anybody
:23:30. > :23:34.believes across the whole political spectrum, that amount of money can
:23:34. > :23:38.go up. Therefore, that lever for topping up income is not available
:23:38. > :23:42.to us any more. The other lever households had available was
:23:42. > :23:47.personal borrowing, but personal borrows in households running at
:23:47. > :23:51.140% of income, therefore, that lever is unavailable, we have to do
:23:51. > :23:55.something that makes work pay. That means increasing skills, and
:23:55. > :23:59.putting the focus to get more people out to work, by removing
:23:59. > :24:02.second earner problems. How worried were you about what you found out
:24:02. > :24:08.in the investigation? I was really worried, actually. I was really
:24:08. > :24:11.surprised to see the original graph that was shown to me before I
:24:11. > :24:15.joined the commission was one which showed GDP going up, and suddenly
:24:15. > :24:20.there is a disconnect, you find living standards used to go up in
:24:20. > :24:25.line and are now plateauing, and to see it is going on for much a long
:24:25. > :24:29.period is quite worrying. I will come to you in a second Phil
:24:29. > :24:34.Bentley. The most obvious solution to the problem of keeping yourself
:24:34. > :24:38.warm and buying enough to eat, is transaction as old as civilisation,
:24:38. > :24:42.you sell your labour or skills. The worry is the ability of companies
:24:42. > :24:48.to move jobs anywhere in the world, the disappearance of entire
:24:48. > :24:52.catagories of job, and a certain lethargy, that takes over nations
:24:52. > :24:57.where no-one fears to go hungry any more, it doesn't seem to work any
:24:57. > :25:06.more. Here are facts and figures from the
:25:06. > :25:12.Resolution Foundation and their Commission on living Standards.
:25:12. > :25:18.The chart shows growth in productivity and wages, wages of
:25:18. > :25:22.the median worker at the middle typical worker in the economy. It
:25:22. > :25:26.shows between 1970 they grew at a similar rate, after that,
:25:26. > :25:30.productivity continued to trend upwards very rapidly, real wages
:25:30. > :25:35.don't grow very fast at median at all.
:25:35. > :25:39.Phil Bentley, it seems to me the request from both employers and
:25:39. > :25:43.business generally, and Government, was that productivity in this
:25:43. > :25:47.country had to be improved. People have done that. Productivity has
:25:47. > :25:51.improved, but they haven't seen the benefit? I think there's some
:25:51. > :25:53.companies that have invested in their work force, and you talk
:25:54. > :25:59.about the old tradesmen of old. These were the skills that when
:25:59. > :26:03.people didn't want to go to university, we were well paid, like
:26:03. > :26:06.those apprentices up seen were British Gas. They earn �28,000 a
:26:06. > :26:09.year when they are fully qualified. They have skills available now to
:26:09. > :26:14.make a good living for the rest of their lives. You think what struck
:26:14. > :26:17.me as being on the commission, was there was still a lot of industries
:26:17. > :26:20.paying the minimum wage. I don't think that is a good thing. We
:26:20. > :26:25.haven't got enough companies investing in labour, and investing
:26:25. > :26:28.in skills. You're a businessman, why would any businessman in his
:26:28. > :26:33.right mind pay more than he needs to? Because it is good business to
:26:33. > :26:37.do that. When our engineers go into our customers' homes, our customers
:26:37. > :26:42.expect them to be the very best. They are properly trained and
:26:42. > :26:47.working in a hazardous environment, gas and electricity, carbon Monday
:26:47. > :26:51.knock side. We want the best engineers, and our customers expect
:26:51. > :26:57.that. Your customers pay for it through the nose. What is the price
:26:57. > :27:01.of gas since 2000? The price of gas has gone up. I knew you would ask
:27:01. > :27:06.that question. Of course I would, there is a degree of hypocrisy
:27:06. > :27:09.about this, isn't there? Prices have come up, they are 8% of
:27:09. > :27:14.household expenditure. When you talk to people where they are
:27:14. > :27:19.feeling the pinch, it is always energy prices early on. You are
:27:19. > :27:23.grunting assent here? I get that point. This is why we are investing.
:27:23. > :27:27.Those apresent at thiss you saw, they are going in installing smart
:27:27. > :27:31.metres, insulation in the home, energy-efficient boilers. They are
:27:31. > :27:37.paying you so much money, that is why? Companies like our's are
:27:37. > :27:39.investing in our customers' homes and saving customers money because
:27:39. > :27:43.they are more energy efficient. That is one aspect of the
:27:43. > :27:46.investment going into the energy industry. The question here, the
:27:46. > :27:52.core question is the question of skills. Why is the basic level of
:27:52. > :27:56.skills in this country so low? think apprenticeships went out of
:27:56. > :27:59.fashion. Essentially the old industry that had apprenticeships
:27:59. > :28:04.suffered, and the new industries weren't investing in
:28:05. > :28:07.apprenticeships, but we really are reversing that trend. 250,000
:28:07. > :28:11.apprenticeships, more of the funding into the hands of the
:28:11. > :28:16.employerers to get the training they need. -- employers to get the
:28:16. > :28:19.training they need. That could tackle the problem the proper
:28:19. > :28:23.report has identified, the squeezed middle, those who don't have the
:28:23. > :28:27.skills and training to hold down a good middle income job. We can
:28:27. > :28:30.tackle that with the apprenticeships we are delivering.
:28:30. > :28:35.You are not doing anything to bring down energy prices either?
:28:35. > :28:39.Prime Minister talked about this week. The fact is you can also
:28:40. > :28:43.bring in competition and the opportunity for going to the lowest
:28:43. > :28:47.tarrif available. Both sides of the equation. Better-trained people
:28:47. > :28:52.with well-paid jobs, and absolutely, competition, contestability,
:28:52. > :28:57.getting the best deal on offer to hold down prices. Now, what
:28:57. > :29:01.conclusion did you come to about what's gone wrong with the basic
:29:01. > :29:04.desire to acquire skills in the work force here? I think there is a
:29:04. > :29:07.problem with matching whether those skills will help you find the right
:29:07. > :29:11.kind of work. We have seen a change in the structure of the employment
:29:11. > :29:17.market and the economy. In the ten years we are in now, 2010-2020, we
:29:17. > :29:22.will, as a country, create two million professional level jobs,
:29:22. > :29:25.400,000 service level jobs. During that same ten years we will lose
:29:25. > :29:29.800,000 mid-level, administration and manufacturing jobs. So matching
:29:29. > :29:32.up the skills you are going to get, and seeing that you are gaining
:29:33. > :29:37.those skills, will actually earn you more during your working
:29:37. > :29:40.lifetime. That is why we need a joined-up policy around this, so
:29:40. > :29:43.the skills agenda matches with the economic policy, to see Britain
:29:43. > :29:47.being able to create the jobs in that mid-level size. I think you
:29:47. > :29:51.find a lot of companies are not investing in the skills that they
:29:52. > :29:54.used to. That is something that we see, some of our engineers get
:29:55. > :29:59.poached by other companies that aren't investing. I think one of
:29:59. > :30:05.the things the Government could do is give more support to recognise
:30:05. > :30:09.aTrent pissship -- apprentice schemes, and when we have contracts
:30:09. > :30:13.with local Government, we have always gone where with the lowest
:30:13. > :30:16.price. We need to look at how many people were trained, and the
:30:16. > :30:19.lasting skills that have been laid down here. You essentially want a
:30:19. > :30:26.form of bonded labour, don't you, you train somebody, you want them
:30:26. > :30:30.to be compelled to stay with you for two or three years? 967% of our
:30:30. > :30:35.engineers stay with us -- 96% of engineers stay with us because they
:30:35. > :30:40.want to develop their career. The point I'm making is the other
:30:40. > :30:44.companies are not investing in the same way. I don't think the
:30:44. > :30:47.poaching is a problem, I think if you invest well people are loyal
:30:47. > :30:51.and they will stay with you. There are problems for the small
:30:51. > :30:57.companies, we are trying to reduce the red tape and provide a bigger
:30:57. > :31:05.cash bonus for every small company that takes on an apprentice, an
:31:05. > :31:09.extra �1500 matters. It does matter. We like to think of the unions as
:31:09. > :31:12.partners, that is the right way in the modern world. One of the
:31:12. > :31:15.mechanisms you could use would be to raise the minimum wage to the
:31:15. > :31:18.living wage level. Do you think that would be a help? I think that
:31:18. > :31:22.would make a huge difference to many families across the country.
:31:22. > :31:26.We are seeing people who are really just struggling who are working on
:31:26. > :31:30.minimum wage at the moment. They are just really not making ends
:31:30. > :31:35.meet. We see that all the time through the work that we do on the
:31:35. > :31:38.website. But I think also it is about women in work as well. We are
:31:38. > :31:41.going to come to that aspect in just a moment or two. Before we
:31:41. > :31:46.leave the question of the minimum wage, you have already conceded
:31:46. > :31:49.there is a problem. There is an element of a solution here. Will
:31:49. > :31:54.you raise the minimum wage, will you match the minimum wage and the
:31:54. > :31:58.living wage? What we can do, we can improve the living standard of
:31:58. > :32:02.people on the minimum wage by take them out of tax. We have now people
:32:02. > :32:06.on the minimum wage not paying income tax. Until this year you
:32:06. > :32:10.could be on the minimum wage and facing incomes tax as well. That is
:32:10. > :32:13.what the Government can do. I'm wary of increasing the minimum wage
:32:13. > :32:17.substantially because there is a risk it hits employment. We have
:32:18. > :32:22.created over a million new jobs in the private sector, even during
:32:22. > :32:28.austerity, it shows you can make things work. Do you worry about the
:32:28. > :32:33.raising of the minimum wage? No, I don't, we pay well above the
:32:33. > :32:37.minimum wage. What we found in the report, there are sectors where
:32:37. > :32:42.jobs will not move overseas, if you are working in a shop, or working
:32:42. > :32:45.in catering, you can't do that from China. So let's make sure we pay
:32:45. > :32:49.the right minimum wage for the right sectors. Let's go on to the
:32:49. > :32:52.question of women in the work place, one of the really big changes of
:32:52. > :32:56.the last 50 years, in order to maintain the standard of living
:32:56. > :33:01.they feel they need, it is now the norm, very often, for both parents
:33:02. > :33:10.to work. That, in turn, creates a need for some way of caring for
:33:10. > :33:14.children. Here are some facts and figures.
:33:14. > :33:19.The question we were trying to answer, and the chart answer, is
:33:19. > :33:23.asking what happens when you increase the hours worked in the
:33:23. > :33:27.labour market by the second earner in the household, and what happens
:33:27. > :33:31.to childcare costs and income after faxes. By the line towards the
:33:31. > :33:36.bottom end of the chart, the share of childcare costs increases as you
:33:36. > :33:40.move towards longer hours in the labour market. By the time you get
:33:40. > :33:42.to full-time work, the childcare costs take out a substantial chunk
:33:42. > :33:46.of net income, and there is a difference between the net income
:33:46. > :33:51.line on the right hand side of the chart.
:33:51. > :33:55.OK, now Willetts let, why is childcare so expensive here? It is
:33:55. > :34:01.a very good question. Childcare in this country. Answer it? I will
:34:01. > :34:05.have a try. Childcare in this country is unusually expensive. I
:34:05. > :34:10.think it is overregulated and overcomplicated. We had a big
:34:10. > :34:13.attack on child minders, a big fall in the number of child minders,
:34:13. > :34:16.which is cost effective in delivering childcare. The funding
:34:16. > :34:18.has gone in complicated different funding schemes, there is
:34:18. > :34:23.management time in collecting the funding. There is a certificaties
:34:23. > :34:28.of problems we are trying to tackle, in tough sometimes r times, to help
:34:28. > :34:32.women with childcare. You were just getting on to it a second ago, or a
:34:32. > :34:35.few minutes a is this a growing problem, do you hear more and more
:34:35. > :34:38.people worrying about it? Absolutely, we have seen a change
:34:38. > :34:48.in the last ten years. It is interesting when you look at the
:34:48. > :34:51.longer picture to see that women were working increasingly from
:34:51. > :34:55.about 55-70% over 30 years. But in the last ten years it has trailed
:34:55. > :34:59.off. We are not seeing the growth in female employment. And one of
:34:59. > :35:04.the key reasons for that is the cost of childcare, it has gone up
:35:04. > :35:08.so much. It is making it unaffordable. It is just not worth
:35:08. > :35:12.working if you have to pay out that much in childcare. What do you
:35:12. > :35:17.think, Phil Bentley, could be done, then, to get around this problem?
:35:17. > :35:23.We certainly think there should be more free childcare available.
:35:23. > :35:27.for by? Well, you think one of the suggestions we have is how we fund
:35:27. > :35:31.our recommendation, one area might be means testing Winter Fuel
:35:31. > :35:35.Payment, for example. One might be, you have probably got some concerns
:35:35. > :35:40.there. What we have called for in the report, is the current 15 hours
:35:40. > :35:45.of childcare a week should be extended in two days. First, an
:35:46. > :35:50.additional fen hours should be available at -- ten hours should be
:35:50. > :35:54.available for �1 an hour, a minute national charge, and it should be
:35:54. > :35:57.extended into the school holidays, those are the issues that prevent
:35:57. > :36:01.somebody making the decision to go to work. The second thing we have
:36:01. > :36:05.asked for in the second earner situation, is when the second
:36:05. > :36:11.earner, typically again, the woman, begins to work, she's able to earn
:36:11. > :36:15.the first �2,000 of that before it eats into what the house how old is
:36:15. > :36:20.receiving in tax benefits. What has this to do with the state? State
:36:20. > :36:24.wants a strong, viable middle-class, a group of people able to afford to
:36:25. > :36:29.hold their head above water without falling back on to welfare benefits.
:36:29. > :36:33.That is a central social goal for administrations for a very long
:36:33. > :36:37.time. Do you think it is the state's job? I think Government can
:36:37. > :36:42.do parts of this. Part of Iain Duncan Smith's reform, in the old
:36:42. > :36:47.days you couldn't get help with your childcare costs if you are
:36:47. > :36:50.working less than 16 hours a week, we have got rid of that. We have
:36:50. > :36:56.extended help with parents of children aged two, so they get free
:36:56. > :36:59.assistance on low incomes. Again, even in stuff -- tough times we are
:36:59. > :37:03.trying to tackle the fundamental challenges to help struggling
:37:03. > :37:09.families to help with their costs. There are things we can do.
:37:09. > :37:12.Philosophically, why does the state have to do it? I would believe that
:37:12. > :37:16.Governments have a responsibility to be alongside people trying to do
:37:16. > :37:20.the right thing. If you are trying to raise kids, and you both want to
:37:20. > :37:26.go out to work, and it is overregulated so the costs are too
:37:26. > :37:30.high, we should tackle the red tape. If you are finding the tax credit
:37:30. > :37:39.system is penalising you, we should get rid of the penalty. We are
:37:39. > :37:44.working through to it to help those trying to work. The bottom half of
:37:44. > :37:48.workers receive 12p in the pound for every pound the country earns
:37:48. > :37:52.of GDP, but they have 50% of the vote. This is ten million working
:37:53. > :37:55.people, one third of the working population, who live in six million
:37:55. > :38:01.homes and have five million children living in those homes.
:38:01. > :38:04.This is a group increasingly aware they have been left behind by that
:38:04. > :38:08.decoupling. And their votes can be bought? Their issues can be
:38:08. > :38:12.addressed. As we go into 2015 and certainly by 2020, this is a
:38:12. > :38:16.segment of the population that right across the political spectrum,
:38:16. > :38:19.people will be seeking to show they have made proportionate responses.
:38:20. > :38:23.Thoo these are the strivers David Cameron was talking about the other
:38:23. > :38:27.week. These are people who have absolutely mainstream values, they
:38:27. > :38:31.are trying to do the right thing. They are entitled to feel in return
:38:31. > :38:35.that politician of whatever pairt are on their side and trying to
:38:35. > :38:38.tack -- party, are on their side and trying to tackle their problems.
:38:38. > :38:43.The New Society, which seems to be emerging from the changed economy
:38:43. > :38:47.of this country, looks very different from what went before.
:38:47. > :38:50.That group, the "squeezed middle", between the richest and the poorest,
:38:50. > :38:54.seems to be growing and growing. The question that arises is
:38:54. > :39:04.fairness, not just between rich and poor, but between young and old.
:39:04. > :39:05.
:39:05. > :39:11.For the third time, a few figures. This chart shows male employment
:39:12. > :39:16.rates in the UK, relative to the OECD for different ages of men.
:39:16. > :39:23.What is striking is it shows how poorly we do in terms of men aged
:39:23. > :39:27.55 or over. Male employment rate is much lower in the UK than other
:39:27. > :39:31.OECD countries. This is because the relatively poor work performance of
:39:31. > :39:34.less skilled men, who worked in more traditional jobs that have
:39:34. > :39:40.collapsed in the labour market over the last 40 years. Looking at the
:39:40. > :39:44.question of old people. What did you discover about old people, and
:39:44. > :39:48.why there were fewer working? a complicated decision to work as
:39:48. > :39:54.you get older. In your late 50s you are quite likely, given longevity,
:39:54. > :39:57.to have somebody you are looking after, who is in their late 70s and
:39:57. > :40:02.early 80s. It is not always an easy decision to work. For those who
:40:02. > :40:06.want to, the difficulty is the jobs available, might be in comparison
:40:06. > :40:09.with your benefits, only a marginal improvement in your household
:40:09. > :40:14.income. One of the recommendations in the report, is you would raise
:40:14. > :40:18.the level at which national insurance contributions are charged,
:40:18. > :40:22.from �7,500 to �10,000, once you reach the age of 55. That can make
:40:22. > :40:26.the difference for people. Why did you do that? We have tried to
:40:26. > :40:30.tackle the problem. We have got rid of the compulsory retirement age.
:40:30. > :40:35.I'm wary of special age-related rules on national insurance, we
:40:35. > :40:38.will look at the proposals. people don't pay national insurance,
:40:38. > :40:42.do they? That is why it would be a rather odd structure. You could tax
:40:42. > :40:46.them back into work, couldn't you? We have, in the budget. You might
:40:46. > :40:50.remember the controversy about it. I remember exactly how you danced
:40:50. > :40:54.around on that? We have, quite rightly, said you should pay the
:40:54. > :40:58.same rate of income tax, on the same allowance, whether you are
:40:58. > :41:01.waged 45, 55, 65. That was controversial at the time, it was
:41:01. > :41:05.the right decision, because it was fair between people of different
:41:05. > :41:10.agencies. You know there is an unfairness here between young and
:41:10. > :41:14.old, don't you? I think our society is not offering a fair enough deal
:41:14. > :41:17.to the younger generation, I accept that. It was one of the things the
:41:17. > :41:21.Government...Why Not do something about it? I'm decribing some of the
:41:21. > :41:26.things we have done. We have got rid of the compulsory retirement
:41:26. > :41:29.age, we have got a fair income tax allowance that applies to people
:41:29. > :41:33.whatever their age. The apprenticeship investment is to
:41:33. > :41:36.provide better opportunities for young people. This is all done even
:41:36. > :41:41.when we are facing this tough competitive environment. A key
:41:41. > :41:44.point is we have 50 applicants for every one apprentice, there are
:41:44. > :41:47.great people out there who really want to work, if we can give them
:41:47. > :41:52.the skills they will get the job done. We need more jobs, more
:41:52. > :41:54.companies, dare I say it, like British Gas, investing in the
:41:54. > :42:00.future generations. Some great people out there, we have to get
:42:00. > :42:06.work for them. Do you have any old people coming on oh aye what's that
:42:06. > :42:09.then present tisship? We have had a father and son aplay, and an ex-
:42:09. > :42:17.footballer, a marine biologist. What is the cut-off? There isn't
:42:17. > :42:23.one. Someone who is 65 could apply? I met one of our engineers, worked
:42:23. > :42:28.in Doncaster, started in 1951, 60 years service. I bet you wouldn't
:42:28. > :42:32.take him on? He only retired last year. No compulsory retirement
:42:32. > :42:37.agency. You would take on someone that old? We would if they want to
:42:37. > :42:41.work. To train as an apprentice? Frankly, we would like more
:42:41. > :42:45.opportunities for young people. Didn't you think, when you were
:42:45. > :42:50.writing this report, that some old kojers, some old people, might feel
:42:50. > :42:54.they have worked a long time, they are entitled to put their feet up?
:42:54. > :42:59.That is a personal choice. But for many people, the household budget
:42:59. > :43:05.is so tight that doesn't feel like a choice. You are saying we can't
:43:05. > :43:08.pay for it any more? The tax credit system has reached the limit of
:43:08. > :43:12.making meaningful improvements to the household income. We have to
:43:12. > :43:16.make work pay so if people want to work they K that is by removing
:43:16. > :43:21.barriers, one of the barsers is at 55, you go to work, and the job
:43:21. > :43:25.might pay �10,000-�12,000, and you are in a position where a
:43:25. > :43:27.meaningful proportion of what you want to take back into the
:43:27. > :43:30.household is going in national insurance contributions. As opposed
:43:30. > :43:36.to staying home and getting all the been fits old people can get. You
:43:36. > :43:40.must be in favour of means testing them? We made specific pledges in
:43:40. > :43:44.the last election. We are going to honour those pledge, and meanwhile,
:43:44. > :43:50.because of the changes in the income tax rules, because we are
:43:50. > :43:55.getting rid of the compulsory retirement rules, we will have more
:43:55. > :43:59.older people working, that is their contribution, and more people are
:43:59. > :44:02.doing so. You want older people to work past retirement age? We got
:44:02. > :44:06.rid of the compulsory retirement age. It was part of a new contract.
:44:06. > :44:10.At the same time we have got rid of the special tax allowance, if you
:44:10. > :44:13.are older, by raising everyone else's tax allowance. That is a new
:44:13. > :44:18.expectation that people will have to carry on working. It is a tough
:44:18. > :44:22.decision, but we have made it. you tried this out on any old
:44:22. > :44:27.people fed up with working? personally haven't. I think we need
:44:27. > :44:30.to be, my particular audience is the mums bit. We have talked to
:44:30. > :44:36.them about all sorts of issues. I do think that the Government has
:44:36. > :44:42.done a lot. They really need to look hole listically at this as an
:44:42. > :44:45.issue, -- holistically, as an issue. There is a commission on childcare
:44:45. > :44:48.going on at the moment. It is looking at markets and regulation,
:44:48. > :44:52.but not the possibility of investment in this field. Which
:44:53. > :44:56.would do so much more. So there are all sorts of thifrpbgs. Again with
:44:57. > :45:00.the universal cred -- things. Again with the Universal Credit coming
:45:00. > :45:07.along. There is great work to try to make work pay, but the second
:45:07. > :45:11.earner bit will have a huge impact, a very negative impact on, again,
:45:11. > :45:14.women in work. It is about joining the dots up and making sure it all
:45:14. > :45:17.pulls together. What do you make that have? One of the reasons we
:45:17. > :45:20.have tried to improve the rules on childcare for parents with young
:45:21. > :45:24.children, is to encourage the second earner to work, I'm sure
:45:24. > :45:26.there is more things we need to do. The one thing we have misseded in
:45:26. > :45:30.all this, is the international framework. All around the world
:45:30. > :45:33.there are other countries rise to go this type of challenge. We face
:45:33. > :45:36.competitive challenges from elsewhere. One of the other reasons
:45:36. > :45:39.to get this right is the rest of the world is not standing still.
:45:39. > :45:42.Getting more people into work, parents with young children into
:45:42. > :45:47.work, older people staying on in work, those are all the type of
:45:47. > :45:51.things we need to do to make our country more prosperous.
:45:51. > :46:01.The newspapers now. The Mail saying there will be an
:46:01. > :46:22.
:46:22. > :46:28.It was announced tonight that Disney is to buy Lucas Film and to
:46:28. > :46:35.make three more Star Wars movies, with episode seven scheduled for
:46:35. > :46:39.cinemas for 20 17, for those who doesn't give a flying saucer, good
:46:39. > :46:45.night, but those traumatised by the last set of Star Wars movies, we
:46:45. > :46:50.will live you with some consolation. Lord Vader, this is commander Laki,
:46:50. > :47:00.she will overseat interrogation unit. I look forward to working
:47:00. > :47:00.
:47:00. > :47:07.with you Lord Vader. You are beautiful! Vader? What, I mean, eh,
:47:07. > :47:17.destroying the rebel base will be a beautiful victory. Quite Lord Vader.
:47:17. > :47:20.
:47:20. > :47:28.Please continue. What? Vader? fine, I just need to go to the
:47:28. > :47:32.fine, I just need to go to the toilet. Out of my way! Hello, a
:47:32. > :47:35.change in the weather to come, as we see more significant rain and
:47:35. > :47:39.winds arriving through the night. And that's going to mean a breezy
:47:39. > :47:43.start to our day, with the rain sitting across North West England,
:47:43. > :47:47.Wales and down into the south west. By the middle of the afternoon, it
:47:47. > :47:52.is a wet and windy afternoon for the Lake District. Perhaps to the
:47:52. > :47:56.east of the Pennine, to the Midlands, staying dry but cloudy.
:47:56. > :47:59.Disappointingly cool, the best of the weather in the south-east.
:47:59. > :48:02.Heavy, persistent rain into the south west by the middle of the
:48:02. > :48:09.afternoon. That means a fairly damp affair, if you are taking young one
:48:09. > :48:13.us out for trick or treating. The same in South Wales with a
:48:13. > :48:19.disappointing nine degrees. For Northern Ireland and Scotland, a
:48:19. > :48:22.bright and breezy afternoon with scattered showers. A cool day.-8
:48:22. > :48:26.degrees at the very best. A similar story for much of Scotland. I
:48:26. > :48:30.suspect a lot of cloud and rain around on Wednesday. Sunny spells
:48:30. > :48:33.and scattered showers for Thursday, and the temperatures struggling.
:48:33. > :48:38.Six or seven degrees to the far north. Further south of that for
:48:38. > :48:41.England and Wales T looks as though we will have the rain to clear away