30/10/2012 Newsnight


Live on the ground in New York, after superstorm Sandy. And what does it mean that the standard of living is dropping every decade?

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It was bad, but it wasn't as bad as many had feared. The tropical storm


that hit the American east coast was ferocious, electricity stations


exploded, houses burned to the ground, tunnels flooded. But in the


end, for all the pain, New York could take it. How will history


measure the impact of the great storm of 2012.


REPORTER: How long do you think it will take to get life back to


normal? Life back to normal, a long time. Right across the street you


can see the whole of Hoboken, flooded, cars floating, still.


will hear from the man who was Mayor of Norl lones during


Hurricane Katrina. Here at home, has the great promise of capitalism,


that we could all look forward to rising standards of living ended.


We are told today many more of us will be worse off in ten years time


than we were ten years ago. We will discuss with, among others, the


boss of British Gas, and the Conservative minister they say has


two brains. Thus far, over 30 people have been


killed by the storm which hit the east coast of the US last night. It


had already killed twice that number in the Caribbean. But they


didn't die on television. The storm's effects on the city that


never sleeps was pretty stunning, it close the Stock Exchange and


theatres and interrupted the election campaign. It has been a


stark reminder for a country built on the belief in the possible, that


there are limits. We go and join Mark Urban in Manhattan.


Whereabouts, precisely, Mark? We're on 30th and 1st A&E about a


third of the way, down Manhattan island, or two thirds, whichever


way you look at it. You can see a few Bocas behind me, up town,


everything down town has no power, we have power up town. What you can


see if you go down there, is great modern city deprived of its life


force, electricity. People are out on the streets, talking, they can't


cook, they can't do anything in their flats. They are in groups in


the dark trying to make sense. In some places restaurants are using


candles and storm lat terns to carry on as normal -- lant terns to


carry on as normal. Homeless people in terrible straits. While the


water has receded from the streets, the thing about that part of


Manhattan, the built up, Wall Street area, so many buildings go


two or three floors underground, those floors are flooded. We saw


pumps working to try to clear them of water. In one building thereof


20 feet of water still down -- there was 20 feet of water still


down there. That could be a long haul. It is a new reality the city


is waking up to, and we witnessed earlier across the river today.


Welcome to Hobo ke, n, a poor city on the New Jersey side of the


Hudson. Play like this felt the worst of it. By the time we got


there, the water had already fall bin four feet. On the heights above,


power lines had been brought down across this street. Bringing life


to a halt. Nobody was ready for this, this


never happened before it was devastating. I have a house down


the jersey shore, it is under water they tell me. In this deluge, the


poorest have been hit hardest. We found the emergency services saving


a homeless man. Looking like a biblical character, escaping a


biblical torrent, he had waited it out on some high ground until


rescue arrived. Nature's irresistable force, in New York,


met an immovable object, America's greatest city. That city is now


working hard to restore normality. The damage we suffered across the


city is clearly extensive, and it will not be repaired overnight. The


two biggest challenges facing our city going forward are getting our


mass transit system up and running, and restoring power. I think it is


fair to say that you should expect, given the extent of the damage,


power may be out in lot of places for two or three days, and maybe


even a little bit longer than that. I don't know what's going on, what


the hell is this? Last night, the had Hurricane hit New York.


Shorting out power supplies in spectacular fashion. In places, the


subway flooded, and one of the city's hospitals, bereft of


electricity, had to evacuate hundreds of patients. Around 9.00pm,


we lost our power, unfortunately the hospital's back-up generators


also failed. They had to evacuate, about 215 patients from the


hospital in the middle of the night. People were like, if can you help


evacuate patients from the hospital, then come out. But we heard that


patients were being carried down the stairs, because the elevators


weren't working. In many states, not least Washington DC, the damage


was minimal. The President's decision to suspend campaigning, in


order to take charge of the situation, appeared entirely


justified. I was on the phone for the third time yesterday, last


night, with the President of the United States. He called me at


midnight last night, to check in on how things were going. He was


seeing reports about how bad things were in New Jersey. The co-


operation from the President of the United States has been outstanding,


he deserves great credit. Has the President used the situation as the


city struggles to get back on its feet to his political advantage. It


certainly looks that way. He's remaining in charge of the relief


efforts, eschewing the campaign, while his rival, Mitt Romney, has


indicated he will resume his campaigning activities tomorrow.


But this could still turn bad for the President. If people go days


without power, and cities do not get moving again, it could turn


into a toxic blame game. Something Mr Obama seems to understand all


too well. My instructions to the federal


agency has been, do not figure out why we can't do something, I want


you to figure out how we do something. I want you to cut


through red tape, bureaucracy, there is no excuse for inaction at


this point. I want every agency to lean forward, and to make sure that


we are getting the resources where they need to be, as quickly as


possible. This crisis hardly matches up to 9/11, but New York is,


once again, at the centre of a national drama. And the proximity


of election day, only emphasises, more strongly, what's at stake.


Let's just catch up now with Mark in New York. The bigger picture,


Mark, politically? Well, the fact that the election is less than a


week away is colouring everything. So the President, for example, says


that he is still not returning to the campaign trail, officially, in


order to co-ordinate the relief efforts, yet we hear he's coming to


New Jersey tomorrow, to go on fact- finding mission. Of course,


exercising control, looking in charge, he will also be meeting


governor Christie, who we heard from in the piece. There's a


Republican, who seems to be giving him fulsome public support in this


crisis. The politics of that too complex, but it would seem, that he


doesn't want Governor Romney to win, he wants to position himself for a


bid for the presidency next time round. Politic suffuse all of this.


Mitt Romney, in order to try to look relevant, is going back on the


campaign trial tomorrow. The difficult thing for him, of course,


will be to appear to be doing something responsible and serious,


while the President is managing this crisis. One man who knows


about natural disasters is Ray Negan the Mayor of New Orleans


during the Hurricane Katrina. He joins us from Dallas. What has had


been like watching this storm hit the east coast? Well, it's been


fairly surreal for me. This storm was very dangerous, it had an


incredible footprint. It wasn't as strong as Hurricane cat treen


national cirriculum but I'm catching in -- Hurricane Katrina,


but I'm catching how well the Government and the federal state


are co-operating. President Obama is doing an outstanding job of


making sure that the resources. I love the fact that he's saying no


excuse from any of his federal agencies, get the job done. So the


system is working much better now than it worked begin Hurricane


Katrina hit you? -- working much better than when Hurricane Katrina


hit you? It seems to be working much better. This is the second


Hurricane that has threatened the east coast. I could see from the


previous Hurricane, they were using some of the techniques and lessons


we learned, which I outlined in my book, Katrina's Secrets. It seems


we have learned hard lessons, but they are being put into action, and


the responses with FEMA positions assets and water and food for


citizens, is working much better than it did during Hurricane


Katrina. What do you learn about human behaviour from this sort of


natural disaster? Well, it's going to be interesting in the next


couple of phase. They have gotten through the pre-storm event, the


storm event, now the aftermath, I think is just as difficult. Because


frustrations are going to start to mount. No matter how quickly they


restore power, or get the debris cleaned up, many citizens will


still be frustrated. They will want to see their city back the way it


was before the storm hit. And that's just not possible. So


managing expectations, managing frustrations going forward, is


going to be a key challenge. Especially when you have an


election cycle that's right upon us. Managing lawlessness, you


discovered, didn't you? Well, lawlessness for us, keep in mind


Hurricane Katrina was so devastating, 80% of the city of


devastated and under water. People thought it was the end of the world.


In modern, urban people, just don't have a stockpile of food and water


to eat and to drink. So looting started for survival. Then once it


got to the point where no-one was really stopping it, because we were


rescuing people, then opportunistic people took over and it got a bit


out of hand. What do you expect to be the political impact. We saw


then the Governor of New Jersey, being really handsome in the


tribute he paid the President, although he's actually of Mitt


Romney's persuasion, in theory? Yeah, he's a Republican, Governor


Christie, but I know him. He's a good man. And he's just telling the


truth. President Obama has stepped forward, he's been in constant


communications, is the way I understand things have gone. He's


forced his people to really focus on responding at a much higher


level. And President Obama, before he became President, was a US


senator, and he visited New Orleans after the storm, I visited him in


his office several times, he helped us a lot. He learned a lot from


Katrina and he is applying those lessons. Thank you for joining us.


Now, unless you are very rich indeed, it can't have Es kaiped


your notice, this country has become -- escaped your notice, this


country has become a very costly place to live. The staples of life


are more expensive than ever, and wages have simply not kept up.


People on low to middle incomes, working people, not those on


benefits, face the prospect of being poorer in 2020 than they are


now. Once upon a time, benign employers raised pay to keep pace


with the cost of living. If they didn't, trades unions organised


strikes to meet the need. Now it is different, something has gone badly


wrong, and the promise of western capitalism, of ever rising rates of


pay, has turned out to be a cheque that's bounced. What's to be done?


Tonight we are taking a report from an organisation called the


Resolution Foundation, who have got their own ideas to tackle the


problem. First Allegra Stratton reports.


These kids, and then their kids, and the kids of their kids, they


would suffer setback, but broadly their's was to be a steady march


across sun lit uplands. We all know about the American dream, but that


faulted some decades back. In Britain, we would keep on never


having had it so good. Except the muscles carrying us up the hill are


jamming. Women are driven from the job market by the cost of child


cautious and women and men by machines. Sheltering inside the


home, with the declining wherewithal to pay for that home.


Assume the economy returns to average levels of growth, by 2020,


lower income households could still be at incomes not seen since 1993,


middle income families could be seen at incomes last seen in 2001,


that is according to this man, and 11 otherwise men and women. During


the mid-1990s, through to the early 2000, we had a good period, then


things turned a bit darker after that. It happened for a number of


reasons. In part the share of GDP going to profit, rather than out to


labour, rows in that period, there was money left -- rose in that


period. There was money back to the worker. There were more costs on


employers, that squeezed wages more. The population were getting older,


there were greater pension contributions, and high levels of


wage inequalities in this country. If you were down the spectrum, a


lot of money was sucked into the pockets of the better off. We


didn't do well for sharing out the gains from growth during some of


those years. The Resolution Foundation's commission of 12


eminent people across public life probed figures like this. Why from


2003-20008 did the incomes of low to middle households grow by just


0.3%, while the economy grew 1.4%. The boiler of living standards may


not be working any more, can these chaps fix it? I believe I need to


do more nowadays. My mother and father would have had to do then, I


need to do more than they did then. Why do you think that? Just to live


on a nice level, and where I would like to be. One of the


commissioners, Phil Bentley, is the managing director of British Gas.


This hourglass economy is lousy jobs at the bottom and lovely jobs


at the top, so a lot of unskilled work out there, quite a few jobs at


the stop which are skilled, but in the middle not so much, you see


your role as helping with that middle? All our people at British


Gas have got really important skills. Just they are either in the


customers' homes, helping reduce the energy bill, or getting the


heating working. British Gas, by its own declaration, has been


training people to light the gas lights of London for 200 years, you


have always been training, what is different about the jobs market now.


This isn't a choice, you need to train them? We have great guy, as


you guys will attest, 50 people apply for every one place. There


are fewer jobs around like our jobs. Either you are a graduate or off at


university, sometimes in low-paid jobs. In the middle there, these


are the skills that require dexterity, require hard work, and


people can progress. Bentley sound like a disciple of pre-distribution,


that is the Labour leader's big idea. For the uninitiate, it is the


feeling that the state can no longer redistribute wealth so,


employers need to do more. We can't expect the state to bail us out, we


have to do it with our own skills, and operate in a competitive world


out there. And Britain has to compete. That goes back to skills


from schools, apprentices, all the way through, we're competing as


Germany, competing against Singapore and the rest of the world.


Bentley and the other commissioners believe kprot Britain must spend


more on wages. -- corporate Britain must spend more on wages. They show


how on the bottom three sectors of the bar chart.


Paying the minimum wage to reflect the cost of living wouldn't exactly


break the bank. And then, what about opening the


door to many people who currently feel slightly shut out. Over the


last 30 years, many households have seen living standards rise, because


women entered the work force. If it's to be reversed, to too will


its effects on people's pockets. This is another of the Resolution


Foundation's commissioners. Gaby used to do a job like mine. She was


the Observer Newspaper's political editor, until she really did leave


to spend more time with her family. Gaby doesn't pretend her economic


situation is typical of those on low-to-middle income jobs. She


knows first hand what it is like to balance childcare with care for


your career. What I liked about the idea of this report, is it took


what is often seen as fluffy female issues, like childcare, working


motherhood, and said these are not add-ons to politics, these are core


economic issues, and getting women back to work, making sure people


can work when they want to work, is absolutely critical to the future


of the economy and GDP, I liked that hard-edged approach.


report shows that UK female employment remains at significantly


lower levels than other advanced economies. The UK is 15th in the


OECD for employment between wages of 254665. If we were to move up as


those better achieving economies, it would mean mail I don't know


extra women going into employment. The gap opens -- a million extra


women going up into employment, the gap opens up with mothers to non-


mothers. There is, of course, another generation just as busy


looking after yet another generation. The 55s-65s, who look


after either their grandchildren or elderly parents or both. Childcare,


social care, a wrap-around welfare state. There are problems at two


ends of the scale. Everyone thinks about working mothers, there is a


real problem with over 55s as well, a gap in the labour market, some


could be working and can't. Some reach 55 and they are ill, they


have heart problems, and they can't all be in work. However, there are


a lot of people who probably could work. What we were looking at is


whether there are financial incentives, say you allowed them to


keep more of their money stage. You would use the Nics threshold, more


of those people could be in work. So, after a year, the commission


has come to Andrews end, it recommends increasing the urpbt --


the an end, it recommends increasing childcare for 3-4-year-


olds to 25 hours a week. It would allow people to take part-time jobs,


charged the at �1 an hour or �10 a week. The commission would reduce


taxes for low-paid, older workers, to encourage them to stay in work.


And finally, once and for all, the commission would solve the thorny


problem of social care and how to fund it. So, a report that shows


that there is a way, now over to Westminster to gauge if there is a


will. Gathered here are three of the


people who contributed to the lives standards commission. Phil Bentley,


the managing director of British Gas, Sally Russell of Netmums, and


Clive Cowdrey, the chair of the Resolution Foundation. And a


businessman, also with us, is lets let lets, the Universities'


Minister and author of a book called the Pitcher: How The Baby


Boomer Stole Their Children's Future. We will take the issues in


three sections. First David Willetts, I would like to ask you,


this is not about recession, retrenchment, it is about something


going fudgely wrong with the way the economy works, do you accept


the analysis? Yes, I do. It traces this trend back to the beginning of


this century, even earlier in the US. I think it is a very important


report, and something that will promote a lot of debate. There is


no sign it will get any better without some sort of action, and


frankly, sticking plaster sort of action is what much of this


proposal is? I don't think we should, nothing is inevitable, can


you do things. Even in the report we have just seen, the apprentices,


the Government is creating more apprentices, absolutely, to have


more people in the middle income jobs, which is where this report


identifies the squeeze is happening. I think we can partly tackle that,


by training people, giving the best qualifications to get well-paid,


secure jobs. That is what more apresent at thiss are about. There


is a lot more to do. Even in a recession, we are trying to tackle


it. Let's lock at the central worry in this, people's standards of


living are not rising because rates of relative pay are not rising at


the rate they should be. Why does that matter? It isn't as if people


were starving in 1939, which is -- 1993, which is the comparison we


are getting to? One of the reasons people weren't starving is the


introduction of tax credits, which means we have been topping up


household incomes, to the tune of around �500-�600 a year. We have a


tax credit bill at �32 billion a year. I don't think anybody


believes across the whole political spectrum, that amount of money can


go up. Therefore, that lever for topping up income is not available


to us any more. The other lever households had available was


personal borrowing, but personal borrows in households running at


140% of income, therefore, that lever is unavailable, we have to do


something that makes work pay. That means increasing skills, and


putting the focus to get more people out to work, by removing


second earner problems. How worried were you about what you found out


in the investigation? I was really worried, actually. I was really


surprised to see the original graph that was shown to me before I


joined the commission was one which showed GDP going up, and suddenly


there is a disconnect, you find living standards used to go up in


line and are now plateauing, and to see it is going on for much a long


period is quite worrying. I will come to you in a second Phil


Bentley. The most obvious solution to the problem of keeping yourself


warm and buying enough to eat, is transaction as old as civilisation,


you sell your labour or skills. The worry is the ability of companies


to move jobs anywhere in the world, the disappearance of entire


catagories of job, and a certain lethargy, that takes over nations


where no-one fears to go hungry any more, it doesn't seem to work any


more. Here are facts and figures from the


Resolution Foundation and their Commission on living Standards.


The chart shows growth in productivity and wages, wages of


the median worker at the middle typical worker in the economy. It


shows between 1970 they grew at a similar rate, after that,


productivity continued to trend upwards very rapidly, real wages


don't grow very fast at median at all.


Phil Bentley, it seems to me the request from both employers and


business generally, and Government, was that productivity in this


country had to be improved. People have done that. Productivity has


improved, but they haven't seen the benefit? I think there's some


companies that have invested in their work force, and you talk


about the old tradesmen of old. These were the skills that when


people didn't want to go to university, we were well paid, like


those apprentices up seen were British Gas. They earn �28,000 a


year when they are fully qualified. They have skills available now to


make a good living for the rest of their lives. You think what struck


me as being on the commission, was there was still a lot of industries


paying the minimum wage. I don't think that is a good thing. We


haven't got enough companies investing in labour, and investing


in skills. You're a businessman, why would any businessman in his


right mind pay more than he needs to? Because it is good business to


do that. When our engineers go into our customers' homes, our customers


expect them to be the very best. They are properly trained and


working in a hazardous environment, gas and electricity, carbon Monday


knock side. We want the best engineers, and our customers expect


that. Your customers pay for it through the nose. What is the price


of gas since 2000? The price of gas has gone up. I knew you would ask


that question. Of course I would, there is a degree of hypocrisy


about this, isn't there? Prices have come up, they are 8% of


household expenditure. When you talk to people where they are


feeling the pinch, it is always energy prices early on. You are


grunting assent here? I get that point. This is why we are investing.


Those apresent at thiss you saw, they are going in installing smart


metres, insulation in the home, energy-efficient boilers. They are


paying you so much money, that is why? Companies like our's are


investing in our customers' homes and saving customers money because


they are more energy efficient. That is one aspect of the


investment going into the energy industry. The question here, the


core question is the question of skills. Why is the basic level of


skills in this country so low? think apprenticeships went out of


fashion. Essentially the old industry that had apprenticeships


suffered, and the new industries weren't investing in


apprenticeships, but we really are reversing that trend. 250,000


apprenticeships, more of the funding into the hands of the


employerers to get the training they need. -- employers to get the


training they need. That could tackle the problem the proper


report has identified, the squeezed middle, those who don't have the


skills and training to hold down a good middle income job. We can


tackle that with the apprenticeships we are delivering.


You are not doing anything to bring down energy prices either?


Prime Minister talked about this week. The fact is you can also


bring in competition and the opportunity for going to the lowest


tarrif available. Both sides of the equation. Better-trained people


with well-paid jobs, and absolutely, competition, contestability,


getting the best deal on offer to hold down prices. Now, what


conclusion did you come to about what's gone wrong with the basic


desire to acquire skills in the work force here? I think there is a


problem with matching whether those skills will help you find the right


kind of work. We have seen a change in the structure of the employment


market and the economy. In the ten years we are in now, 2010-2020, we


will, as a country, create two million professional level jobs,


400,000 service level jobs. During that same ten years we will lose


800,000 mid-level, administration and manufacturing jobs. So matching


up the skills you are going to get, and seeing that you are gaining


those skills, will actually earn you more during your working


lifetime. That is why we need a joined-up policy around this, so


the skills agenda matches with the economic policy, to see Britain


being able to create the jobs in that mid-level size. I think you


find a lot of companies are not investing in the skills that they


used to. That is something that we see, some of our engineers get


poached by other companies that aren't investing. I think one of


the things the Government could do is give more support to recognise


aTrent pissship -- apprentice schemes, and when we have contracts


with local Government, we have always gone where with the lowest


price. We need to look at how many people were trained, and the


lasting skills that have been laid down here. You essentially want a


form of bonded labour, don't you, you train somebody, you want them


to be compelled to stay with you for two or three years? 967% of our


engineers stay with us -- 96% of engineers stay with us because they


want to develop their career. The point I'm making is the other


companies are not investing in the same way. I don't think the


poaching is a problem, I think if you invest well people are loyal


and they will stay with you. There are problems for the small


companies, we are trying to reduce the red tape and provide a bigger


cash bonus for every small company that takes on an apprentice, an


extra �1500 matters. It does matter. We like to think of the unions as


partners, that is the right way in the modern world. One of the


mechanisms you could use would be to raise the minimum wage to the


living wage level. Do you think that would be a help? I think that


would make a huge difference to many families across the country.


We are seeing people who are really just struggling who are working on


minimum wage at the moment. They are just really not making ends


meet. We see that all the time through the work that we do on the


website. But I think also it is about women in work as well. We are


going to come to that aspect in just a moment or two. Before we


leave the question of the minimum wage, you have already conceded


there is a problem. There is an element of a solution here. Will


you raise the minimum wage, will you match the minimum wage and the


living wage? What we can do, we can improve the living standard of


people on the minimum wage by take them out of tax. We have now people


on the minimum wage not paying income tax. Until this year you


could be on the minimum wage and facing incomes tax as well. That is


what the Government can do. I'm wary of increasing the minimum wage


substantially because there is a risk it hits employment. We have


created over a million new jobs in the private sector, even during


austerity, it shows you can make things work. Do you worry about the


raising of the minimum wage? No, I don't, we pay well above the


minimum wage. What we found in the report, there are sectors where


jobs will not move overseas, if you are working in a shop, or working


in catering, you can't do that from China. So let's make sure we pay


the right minimum wage for the right sectors. Let's go on to the


question of women in the work place, one of the really big changes of


the last 50 years, in order to maintain the standard of living


they feel they need, it is now the norm, very often, for both parents


to work. That, in turn, creates a need for some way of caring for


children. Here are some facts and figures.


The question we were trying to answer, and the chart answer, is


asking what happens when you increase the hours worked in the


labour market by the second earner in the household, and what happens


to childcare costs and income after faxes. By the line towards the


bottom end of the chart, the share of childcare costs increases as you


move towards longer hours in the labour market. By the time you get


to full-time work, the childcare costs take out a substantial chunk


of net income, and there is a difference between the net income


line on the right hand side of the chart.


OK, now Willetts let, why is childcare so expensive here? It is


a very good question. Childcare in this country. Answer it? I will


have a try. Childcare in this country is unusually expensive. I


think it is overregulated and overcomplicated. We had a big


attack on child minders, a big fall in the number of child minders,


which is cost effective in delivering childcare. The funding


has gone in complicated different funding schemes, there is


management time in collecting the funding. There is a certificaties


of problems we are trying to tackle, in tough sometimes r times, to help


women with childcare. You were just getting on to it a second ago, or a


few minutes a is this a growing problem, do you hear more and more


people worrying about it? Absolutely, we have seen a change


in the last ten years. It is interesting when you look at the


longer picture to see that women were working increasingly from


about 55-70% over 30 years. But in the last ten years it has trailed


off. We are not seeing the growth in female employment. And one of


the key reasons for that is the cost of childcare, it has gone up


so much. It is making it unaffordable. It is just not worth


working if you have to pay out that much in childcare. What do you


think, Phil Bentley, could be done, then, to get around this problem?


We certainly think there should be more free childcare available.


for by? Well, you think one of the suggestions we have is how we fund


our recommendation, one area might be means testing Winter Fuel


Payment, for example. One might be, you have probably got some concerns


there. What we have called for in the report, is the current 15 hours


of childcare a week should be extended in two days. First, an


additional fen hours should be available at -- ten hours should be


available for �1 an hour, a minute national charge, and it should be


extended into the school holidays, those are the issues that prevent


somebody making the decision to go to work. The second thing we have


asked for in the second earner situation, is when the second


earner, typically again, the woman, begins to work, she's able to earn


the first �2,000 of that before it eats into what the house how old is


receiving in tax benefits. What has this to do with the state? State


wants a strong, viable middle-class, a group of people able to afford to


hold their head above water without falling back on to welfare benefits.


That is a central social goal for administrations for a very long


time. Do you think it is the state's job? I think Government can


do parts of this. Part of Iain Duncan Smith's reform, in the old


days you couldn't get help with your childcare costs if you are


working less than 16 hours a week, we have got rid of that. We have


extended help with parents of children aged two, so they get free


assistance on low incomes. Again, even in stuff -- tough times we are


trying to tackle the fundamental challenges to help struggling


families to help with their costs. There are things we can do.


Philosophically, why does the state have to do it? I would believe that


Governments have a responsibility to be alongside people trying to do


the right thing. If you are trying to raise kids, and you both want to


go out to work, and it is overregulated so the costs are too


high, we should tackle the red tape. If you are finding the tax credit


system is penalising you, we should get rid of the penalty. We are


working through to it to help those trying to work. The bottom half of


workers receive 12p in the pound for every pound the country earns


of GDP, but they have 50% of the vote. This is ten million working


people, one third of the working population, who live in six million


homes and have five million children living in those homes.


This is a group increasingly aware they have been left behind by that


decoupling. And their votes can be bought? Their issues can be


addressed. As we go into 2015 and certainly by 2020, this is a


segment of the population that right across the political spectrum,


people will be seeking to show they have made proportionate responses.


Thoo these are the strivers David Cameron was talking about the other


week. These are people who have absolutely mainstream values, they


are trying to do the right thing. They are entitled to feel in return


that politician of whatever pairt are on their side and trying to


tack -- party, are on their side and trying to tackle their problems.


The New Society, which seems to be emerging from the changed economy


of this country, looks very different from what went before.


That group, the "squeezed middle", between the richest and the poorest,


seems to be growing and growing. The question that arises is


fairness, not just between rich and poor, but between young and old.


For the third time, a few figures. This chart shows male employment


rates in the UK, relative to the OECD for different ages of men.


What is striking is it shows how poorly we do in terms of men aged


55 or over. Male employment rate is much lower in the UK than other


OECD countries. This is because the relatively poor work performance of


less skilled men, who worked in more traditional jobs that have


collapsed in the labour market over the last 40 years. Looking at the


question of old people. What did you discover about old people, and


why there were fewer working? a complicated decision to work as


you get older. In your late 50s you are quite likely, given longevity,


to have somebody you are looking after, who is in their late 70s and


early 80s. It is not always an easy decision to work. For those who


want to, the difficulty is the jobs available, might be in comparison


with your benefits, only a marginal improvement in your household


income. One of the recommendations in the report, is you would raise


the level at which national insurance contributions are charged,


from �7,500 to �10,000, once you reach the age of 55. That can make


the difference for people. Why did you do that? We have tried to


tackle the problem. We have got rid of the compulsory retirement age.


I'm wary of special age-related rules on national insurance, we


will look at the proposals. people don't pay national insurance,


do they? That is why it would be a rather odd structure. You could tax


them back into work, couldn't you? We have, in the budget. You might


remember the controversy about it. I remember exactly how you danced


around on that? We have, quite rightly, said you should pay the


same rate of income tax, on the same allowance, whether you are


waged 45, 55, 65. That was controversial at the time, it was


the right decision, because it was fair between people of different


agencies. You know there is an unfairness here between young and


old, don't you? I think our society is not offering a fair enough deal


to the younger generation, I accept that. It was one of the things the


Government...Why Not do something about it? I'm decribing some of the


things we have done. We have got rid of the compulsory retirement


age, we have got a fair income tax allowance that applies to people


whatever their age. The apprenticeship investment is to


provide better opportunities for young people. This is all done even


when we are facing this tough competitive environment. A key


point is we have 50 applicants for every one apprentice, there are


great people out there who really want to work, if we can give them


the skills they will get the job done. We need more jobs, more


companies, dare I say it, like British Gas, investing in the


future generations. Some great people out there, we have to get


work for them. Do you have any old people coming on oh aye what's that


then present tisship? We have had a father and son aplay, and an ex-


footballer, a marine biologist. What is the cut-off? There isn't


one. Someone who is 65 could apply? I met one of our engineers, worked


in Doncaster, started in 1951, 60 years service. I bet you wouldn't


take him on? He only retired last year. No compulsory retirement


agency. You would take on someone that old? We would if they want to


work. To train as an apprentice? Frankly, we would like more


opportunities for young people. Didn't you think, when you were


writing this report, that some old kojers, some old people, might feel


they have worked a long time, they are entitled to put their feet up?


That is a personal choice. But for many people, the household budget


is so tight that doesn't feel like a choice. You are saying we can't


pay for it any more? The tax credit system has reached the limit of


making meaningful improvements to the household income. We have to


make work pay so if people want to work they K that is by removing


barriers, one of the barsers is at 55, you go to work, and the job


might pay �10,000-�12,000, and you are in a position where a


meaningful proportion of what you want to take back into the


household is going in national insurance contributions. As opposed


to staying home and getting all the been fits old people can get. You


must be in favour of means testing them? We made specific pledges in


the last election. We are going to honour those pledge, and meanwhile,


because of the changes in the income tax rules, because we are


getting rid of the compulsory retirement rules, we will have more


older people working, that is their contribution, and more people are


doing so. You want older people to work past retirement age? We got


rid of the compulsory retirement age. It was part of a new contract.


At the same time we have got rid of the special tax allowance, if you


are older, by raising everyone else's tax allowance. That is a new


expectation that people will have to carry on working. It is a tough


decision, but we have made it. you tried this out on any old


people fed up with working? personally haven't. I think we need


to be, my particular audience is the mums bit. We have talked to


them about all sorts of issues. I do think that the Government has


done a lot. They really need to look hole listically at this as an


issue, -- holistically, as an issue. There is a commission on childcare


going on at the moment. It is looking at markets and regulation,


but not the possibility of investment in this field. Which


would do so much more. So there are all sorts of thifrpbgs. Again with


the universal cred -- things. Again with the Universal Credit coming


along. There is great work to try to make work pay, but the second


earner bit will have a huge impact, a very negative impact on, again,


women in work. It is about joining the dots up and making sure it all


pulls together. What do you make that have? One of the reasons we


have tried to improve the rules on childcare for parents with young


children, is to encourage the second earner to work, I'm sure


there is more things we need to do. The one thing we have misseded in


all this, is the international framework. All around the world


there are other countries rise to go this type of challenge. We face


competitive challenges from elsewhere. One of the other reasons


to get this right is the rest of the world is not standing still.


Getting more people into work, parents with young children into


work, older people staying on in work, those are all the type of


things we need to do to make our country more prosperous.


The newspapers now. The Mail saying there will be an


It was announced tonight that Disney is to buy Lucas Film and to


make three more Star Wars movies, with episode seven scheduled for


cinemas for 20 17, for those who doesn't give a flying saucer, good


night, but those traumatised by the last set of Star Wars movies, we


will live you with some consolation. Lord Vader, this is commander Laki,


she will overseat interrogation unit. I look forward to working


with you Lord Vader. You are beautiful! Vader? What, I mean, eh,


destroying the rebel base will be a beautiful victory. Quite Lord Vader.


Please continue. What? Vader? fine, I just need to go to the


fine, I just need to go to the toilet. Out of my way! Hello, a


change in the weather to come, as we see more significant rain and


winds arriving through the night. And that's going to mean a breezy


start to our day, with the rain sitting across North West England,


Wales and down into the south west. By the middle of the afternoon, it


is a wet and windy afternoon for the Lake District. Perhaps to the


east of the Pennine, to the Midlands, staying dry but cloudy.


Disappointingly cool, the best of the weather in the south-east.


Heavy, persistent rain into the south west by the middle of the


afternoon. That means a fairly damp affair, if you are taking young one


us out for trick or treating. The same in South Wales with a


disappointing nine degrees. For Northern Ireland and Scotland, a


bright and breezy afternoon with scattered showers. A cool day.-8


degrees at the very best. A similar story for much of Scotland. I


suspect a lot of cloud and rain around on Wednesday. Sunny spells


and scattered showers for Thursday, and the temperatures struggling.


Six or seven degrees to the far north. Further south of that for


England and Wales T looks as though we will have the rain to clear away


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