08/01/2013 Newsnight

Who is being fair on welfare? Today's cuts are an attack on

strivers, say Labour, wrong says the Government. We are being fair

to those in work, and paying taxes. I think they should work, same as

anybody else. In the other countries they don't get benefits.

We have to work for car, food and holidays we have, twice a year.

will debate whether all this is a price worth paying for deficit

reduction. 27 million Bulgarians and Rumanians gained the right to

live and work in Britain at the end of the year. So are we about to

become the land of opportunity for a new wave of immigrants? If the

quality of my life will improve, if I will be able to find a better job

and my life will become better, yeah, I would go.

Could the solution to America's political gridlock over the debt

ceiling lie with minting a trillion dollar coin. We will explain why a

crazy idea is being taken a bit seriously in Washington.

# Where are we now Bowie is back. The great shape

shifter who seemed to have given up on music, has a new single, album

and plenty of surprises on his 66th birthday.

Good evening, today we got something of a flavour, not just of

the political year ahead, but prarpbs of the debates raging at

Westminster and elsewhere in the country for the next two years.

"rancid" was the word David Miliband used to describe some of

the tone of the discussions on welfare, as MPs voted to place a 1%

cap on benefit up-ratings over the next three years. That means a

real-term cut on the large majority of working age benefits and tax

credits. Four Liberal Democrats rebelled against the measure, but

the coalition remained firms. Ministers argue the welfare budget

is so large, it has to be trimmed as part of the overall strategy to

cut the deficit. We will debate in a moment. Paul Mason reports.

If you have ever wondered what the frontline of a political

battlefield looks like, it is this. In the Commons, it was fought more

in sorrow than in ideology. Table tapping, rather than tub-thumping

from Iain Duncan Smith. The reality is that over the last five years,

following the recession, the gap has grown between what people in

employment have been earning and getting, and what those on welfare

have been getting. Labour, whose Shadow Cabinet had been split over

whether to oppose this measure, fighting a battle of language as

well as substance. This bill discuss to to make three judgments,

about fairness, affordability and politics, the Chancellor's claim in

his Autumn Statement that the bill was about distinguishishing working

people and those "asleep, living a life on benefits", has been blown

out of the water by the facts that have come out since. Four Liberal

Democrats rebelled, and the vote was never in doubt. The Government

won the vote with a majority of 56, they didn't mention scroungers or

shirkers, but beyond Westminster, after weeks of controversy about

this bill, it is being discussed in visceral terms.

Luton is the kind of place where today's real-terms cut will be felt.

15% of the adult population claim benefits, and with a local average

wage �2,000 lower than the national, many workers here will be getting

the tax credits that were capped today. But on the streets of this

solid Labour town, well, vox pops are never scientific. If you want

to work then you should work, I know a colleague of mine he works,

but his wife doesn't, he needs the benefits system as well. People who

abuse it, I think they should get it scrapped all together. Cutting

back is good, you have to take into consideration people's

circumstances before you cut the benefits. How are you going to go

about cutting it, they need to live at the same time. We think they

should make it tougher. Tougher to get benefits in the first place.

think they should work, same as anybody else. Other countries don't

get work. We have to work to get food and a car and holidays that we

have, twice a year. It was Mrs Thatcher in 1986 who brought in the

Family Credit system, designed, then, to support the incomes of the

working poor. By the end of it, 750,000 families were claiming it,

and the bill was �2.4 billion. In 1999, Gordon Brown introduced the

more generous working families tax credit, by by 2003 was being

claimed by 1.3 million families, and cost �6.3 billion. Then, this

was replaced with the Working Tax Credit and the children's tax

credit. 4.3 million families, in work, claimed it then, 4.9 million

now. But, it is the costs that have risen. For the working families

alone, it has gone from �11.3 billion, to �21 billion today.

growth of the welfare system, particularly under the previous

Government, through things like tax credits, has meant we are at this

stage now where people earning up to �60,000, until recently, could

have been entitled to some kind of welfare. Child benefit was going to

everybody, universal benefits going to pensioners who are wealthy. At

one stage, according to Government figures, nine in ten families

qualified for some tax credits and welfare. It is a vast system and

trapped people in it. If you Google words like "benefits protest" it is

protests like this. There is fury among recipients of disability

benefits. The Government's thoughts are no such ructions will take

place over the 1% cap. But for Labour, this is a fight they have

to join. This cap represents for the first time since 1930, where

the incomes of those in or out of work will fall as a deliberate act

of Government policy. The last time it happened under a Labour

Government, that attempted to do that, and ended up collapsing with

the then Prime Minister going into coalition with the Conservatives.

Actually, this is deep within Labour history. Labour had no

choice but to oppose this cap on that basis.

The problem s the tax credit system was designed in an era of rising

real income, now, they are stagnating. In 2000, the household

disposable income was growing at 5% a year. Long before the financial

crash wages began to slow down, by 2010 they were falling. Pre-dating

the crash, people's wages started stagnating, from 2004 on wards, the

bottom half of wages in this country from flatlining. The

problem with tax credits, although they were the means, they are a

lifeline for millions in this country, but they are basically a

subsidy for low pay, because businesses aren't paying their

workers properly, Labour didn't tackle that sufficiently in

Government. Now the position Labour should be making, is instead of

subsidising employers paying out rubbish wage, that we should have a

living wage which would bring down the billion spent on tax credits,

rather than at the moment kicking the people at the bottom, which is

what this Government is doing. debate has exposed tensions on both

sides of politics, some in the coalition, queasy about the

language of blame attached to benefit claimants. Labour,

meanwhile, left defending the Blair-Brown era welfare system,

which those close to Ed Miliband, are convinced needs radical reform.

Alongside one-nation Labour, we have now got a Conservative Party

deeply concerned about the wage differentials of the workers. Just

over an hour ago I spoke to Sajid Javid, Economic Secretary to the

Treasury, and to Stephen Timms, the shadow Employment Minister.

Stephen Timms, 30% of Government spending is spent on welfare, do

you accept, as a matter of principle, it has to be put

somewhere to cut the deficit? deficit certainly does have to cut.

Just, sorry to interrupt right away, does welfare spending have to be

cut to cut the deficit? We have to reduce the number of people out of

work in order to reduce the spending on their benefits, yes.

Your answer implies, again, that there isn't a benefit that you

don't like. You don't want to cut benefits for the disabled, you

don't want to cut benefits for people out of work, you don't even

want to cut child benefit for those who are quite well off, what do you

want to cut? Disabled people's benefits, the Secretary of State

said in the debate they would be protected by this bill, that isn't

the case. That became clear later on. If you compare the unemployment

forecast in the budget, with the unemployment forecast in the Autumn

Statement just before Christmas. The later one is significantly

higher, that means the Government will have to spend out an extra �3

billion over the next two years on unemployment benefit, this bill

saves �3 billion. That is what is behind the bill, to clawback the

increase because of unemployment going up. You have an argument

there that I will put to the other side. Is there a benefit that you

would target that is ripe for cutting. Or are you saying the

welfare benefits are sacrosanct, but you want to target them by

getting people off benefits, that is a different solution?

solution to the problem we are is to get people back into work.

Everybody wants to do that? It is not happening. We have made

proposals that can make it happen. We need to reinject some momentum

into the economy, get people back to work, and then the unemployment

bill will come down. In that case, when Labour is elected by a

landslide in 2015, you will come in 2016, when these three years run

out, you will reverse all this? we will, however, want to get

people back to work, we have set out last week how we will do that.

The bill you have voted against, you will not reverse in 2016?

will depend on the circumstances at the time. We will, however,

concentrate very hard on getting people back to work, so they are

paying taxes, the national insurance and not on benefits any

more. The argument, partly the core of that, that people have been

making all day, is that when you came up with this bill, you knew

that you were going to penalise the poorest people in this country for

their poverty, that is what is going to happen? That's not what's

going to happen at all. First of all, the opening question you had

for Stephen, that was how are you going to deal with the deficit? The

previous Government left this country with the largest budget

deficit. We know, that you are doing it, partly, but penalising

the poorest people in the country, including the disabled? You can't

deal with the deficit without dealing with the welfare well. It

is over �200 billion, it is one in every three pounds raised in taxes,

you have to deal with it. So you are, morally, you think it is fine

to penalise some of the poorest people in the country? The poorest

people in the country, the most vulnerable, such as pensioners,

people disabled, are protected. They are not there. That is not

what the disability groups are saying today, they are saying that

is absolutely not the case, they are suffering real cuts in the

employment and other allowances, there were figures announced today?

The Government has published the impact assessment today, the most

vulnerable are rightly protected, those on out of work benefits, that

have the ability to look for work, change their circumstances, are the

oneing that is will be affected by this change. This change -- ones

that will be affected by this change. It doesn't mean no increase

in welfare fits ts 1% over three years brb benefits, it is 1% over

three years. It is less than inflation. You refer to your own

impact assessment, single parents will lose �5 a week, that is

according to your assessment? is looking at the measures in

isolation. Looking at the other measures, the increase in the

personal allowance, taken together, that increase alone is almost �590

extra in the pocket of a basic rate taxpayer. Do you accept that even

if George Osborne's rhetoric was right, that there are some people

who hide behind the curtains and don't go to work, these people also

have children, and it is the children who will suffer? People

that are most vulnerable will be protected. Let as talk about Child

Tax Credits and people who receive benefits. Under Labour, tax credits

went to nine out of ten families, in the country. Nine out of ten

families received Child Tax Credits, it wasn't linked to income, it

wasn't necessarily linked to the number, whether the household was

in work or not, we have changed that to make sure that welfare is

targeted to the people who need it most, and at the same time you

protect the most vulnerable. come, then, under Labour, so many

people, including many people in work, became dependant, one way or

another on receiving benefits what went wrong? Tax credits played a

very important part in increasing the number of people in work. And

they were successful in doing that. In work which didn't pay the rate

for the job, apparently, otherwise they wouldn't have to be subsidise

bid the taxpayer? Tax credits meant for a very large number of people

it was worth being in work, when previously. Nine out of ten

households. That was a reality of the economy, we were able to make

that change, and very substantially increase the employment rate as a

result. That was the right thing to do, it was a successful policy.

What this bill will do is hit people who are in work,

particularly people in modestly paid work, an army Second

Lieutenant, supporting a wife and three children, �550 worse off as a

result of this bill. Come back on this? First of all, the tax credit,

he hasn't answered the point. Why were they going to nine out of ten

households, it was untargeted welfare. We need to make sure

welfare goes to those who need it most. It is a system, as we are

introducing with Universal Credit, which comes into place this year,

that actually helps you get back into work, that is what people want

to see. Having raised that question, Universal Credit, which is a huge

reform for this country, massive change. Something the Labour Party

voted against. But David Miliband today suggested that some parts of

this debate are, in his word, "rancid", the implication is we are

into the politics of rich and poor, and what you are doing is already

very devisive and will get more devisive as the year goes on?

not intended to be. The most devisive language we saw today was,

unfortunately, from the Labour side of the House. They shouldn't see it

as devisive or to be using inflammatory language, this is

about, first of all, dealing with the deficit, you can't deal with

the deficit without dealing with welfare. If you accept that premise,

then do it in the fairest way possible, and the fairest way is to

protect the most vulnerable, which we have done, and make sure we have

put incentives in place for others, that they will take jobs and pay

them to be better off.S This the flavour of the debate coming up. It

was Liam Byrne talking about shirkers and strivers? Disabled

people aren't being protect. We have to get that clear. The basic

Employment and Support Allowance will only be up-rated by 1%, that

is going to everybody disabled. Those will not be protected. This

is a devisive bill, it is recreating the policies of the 80s,

which led to a rocketing in the number of children below the

poverty line. It is cutting the top rate of income tax, not properly

up-rating benefits, that is a toxic combination. We had it in the 80s

and now. Four Liberal Democrats voted against the bill, Charles

Kennedy registered his positive abstention. This is not the kind of

policy, frankly, that the Government should be taking forward.

It is deeply devisive and damaging in the long run. I mentioned David

Miliband's contribution, a great addition to the front bench

wouldn't he? He made a telling contribution today, he's right to

use the term "rancid" about the way the Conservative Party is handling

this. You hope that happens? would be delighted to see it.

key question nobody answered today and tonight from the Labour side,

if they are not going to deal with the benefit bill, but they are

going to deal with the deficit, how will they do it. Where will they

find the �3 billion of savings come from, they don't have an answer to

that question. Now, around 27 million Bulgarians

and Rumanians gain full rights to work in Britain at the end of this

year. When restrictions to protect the UK labour market expire. Some

predict a repeat of what happened after 2004, when predictions talked

about 20,000 arrivals from new accession countries, like Poland,

the actual figure from 2011 was 30- times that number. Should we brace

ourselves for another flood of migrants from the EU, or are things

very different now. Sancha Berg reports from Romania.

Even in the bleakest days of Ceausescu's Romania, small farmers

killed a pig at home once a year, in villages like Nimesch, in

Transylvenia, they still do. First, they burn the skin with

straw, to remove the bristles. Then use a blow torch to finish the job.

This is a proud tradition in main Rumanian villages, it also allows

many families to enjoy fresh pork and bacon, which they couldn't

otherwise afford. Rumanian incomes are among the lowest in the EU.

Working abroad can transform the fortunes of a family. Cristian

Cabou has just returned from five years in Spain. TRANSLATION: I sent

all the money back to Romania, apart from what I needed to spend

in Spain, I did have to spend quite a lot there. But most of it I sent

back to Romania, because that's where I see my future. He has a

good job now, in a local pharmacy, but he thinks others might try to

find work in England or Germany, when it's easier for he Rumanians

to do so. -- If they are offered the chance they will take it. Many

logo abroad, they have -- many will go abroad, they will have problems

with the language, but they will manage, Rumanians will always

manage. Over the last ten years many left to work in Spain. Whole

families migrated when the economy was booming, many have returned

since. Many from this town are working abroad too. Francesco

Acerbi lives alone for half the year -- Radu Serb lives alone for

half the year, his wife is in Italy, caring for an elderly lady, making

money for the family. They usually speak several times a day. He tells

his wife not to cry. She says she misses home. TRANSLATION: It's

worth going abroad to work, that is because our pensions are very low.

We could earn 700 euros a month there. Our pension is the same in

terms of quantity, but only in Romanian money.

In 2011, the census showed the number of people in Romania had

fallen by 12%. Many lured by opportunities abroad. Over the last

few years, millions of Romanians have left their home country, and

travelled to work in other parts of the European Union. Often sending

money home. Most of them have gone to Spain, and Italy. Partly because

the languages are closer to Romanian, also because there are

fewer barriers to work for them there. As restrictions are lifted

in other European countries, including Britain, will these

migration patterns change? Dr Alina Branda knows these Transylvanian

villages well, she stud yied them for many years, she -- studied them

for many years. She told me many people had always gone abroad to

work, but they always came back. She was surprised to find the

younger villagers we met in the local hall, tended to have a more

adventurous outlook. Though not awful them wanted to go. Adrian

said he would prefer to stay at home with his friend. I like it

here in my village, I like my country. Emile had worked as a

brick layer in Spain, he told me he earned seven-times more than in

Romania, he planned to go abroad again, he said. Madaline had been

to school in Spain, he preferred the situation abroad, he would like

to live there, Spain would be ideal. But he would consider other

countries. You might think about going to England as well? If he

could get a job over there, yes, he would go. I'm really curious what's

going on right now, after 20 12, because my feeling is that the

younger generation is more exposed to the new ways of migration,

patterns of migration, perhaps, and they are more open to new areas,

new destination countries. Britain could be one of those destination

countries, though no-one we spoke to in these villages knew the rules

were changing at the end of this year. In the capital, Bucharest,

the richest part of Romania, there are more job opportunities. However,

the transformation many hoped for has yet to materialise. Ceausescu

imposed a particularly oppressive brand of communism on his country,

Romania has found it harder than most to escape its past. Bucharest

was once known as the Paris of the Balkans, but today Romania is one

of the very poorest countries in the European Union. The economy's

projected to grow thisy, but it has a long way to go before catching up

with the rest of Europe. It is hardly surprising that many

Romanian workers attempted to seek employment abroad. When Poland

joined the EU, hundreds of thousands of people came to Britain.

Those advising the British Government believe the numbers of

Romanians coming to the UK could rise significantly. Romanian

commentators are more Sangin. Will there be a -- sanguine, will there

be a big wave of immigration? wave already happened, now there

will be waves, but not tsunamis. key difference is that Poles could

only go to Britain and two other EU countries, Romanians will be able

to work across the European Union. Not all young Romanians are

enthusiastic about the prospect, in a busy bar in the centre of

Bucharest, I met a group of young professional, most employed by

international software companies. For me, definitely stay. Because of

my family, because of my friends, because of my job, because of the

language. Because of our life here in Romania. It would take an

attractive job package to tempt them abroad. I think I will go only

if I had a really good offer and that's say it is financially wise.

They would all come up against a stereotypical view of Romanians.

few days ago I had business travel to Scotland. I took a bus tour, and

the lady at the ticket shop asked me where I was from, I said Romania,

and she was very amazed, wow, but you speak very good English. I was

like, why not, I'm from Romania, not from a very poor country with

no education at all. 100kms north of Bucharest is

Romania's industrial heartland, several multinationals have built

factories here. This Romanian company, workers earn 400 euros a

month. This firm is hoping to profit from growing migration to

Britain, just as Polish workers brought their own brands of Vodka

to the UK, so this company hopes Romanians will want to buy their

favourite local Brandy when they move. If you really want to

penetrate into the country, you use the base the Romanians that are

living there, then address the local population also. Do you have

any sense from your UK sales whether there are quite a lot of

Romanians in the UK at the moment? The number is increasing, very much.

Two or three years ago, I think, there were not too many Romanians,

but lately there are more and more Romanians living in the UK. I

believe that this number will increase. For Romania, the end of

this year will be a significant moment, Romania's people have

always seen themselves as European, with their traditional orthodox

faith, and their Latin language. But they haven't been fully

accepted by all their European neighbours. Soon, Romanians will be

free to work right across the European Union. For now, Romania

still feels like a country on the edge of Europe. Julia Onslow-Cole

is head of global immigration at PWC Legal, and on the board of

migration matters Trust. And David Goodhart is director of the think-

tank Demos. Have you any worries about what might happen at the end

of the year when the Bulgarians and the Romanians can come in if they

want to? Yes, I do, this won't be like 2004, when hundreds of

thousands of people from eight countries were suddenly able to

come here and weren't able to, as the film pointed out, weren't able

to go to other countries. The numbers won't be anything like that.

It doesn't need a very large number of Romanians and Bulgarians to come

here. Perhaps just as many as an extra 20,000 or 30,000 a year, for

the Government's very carefully planned reduction in numbers

towards that magic figure of tens of thoughs to be blown off course.

If that happens before an election. Does that matter? It matters hugely,

politically. If the Government, on my calculations, I would say that

the Government is heading, at the moment, to get net immigration down

to about 120,000 a year. That is still missing this tens of

thousands of formula, but they can argue that they basically halved

net immigration in the time they have been in office. I think that

would take the sting out of the immigration debate, it wouldn't be

a huge issue in the election. If it is 150,000, UKIP will be banging

away at it, it will be hugely poisonous in the election. What was

your view, then, looking backwards from 2004, we had this big

inflation of Polish people and other people in the country, your

assessment is this was fundamentally a good thing for us?

I'm concerned about what it will have on the net migration policy.

The real issue here is that, largely, European immigration is

uncontrollable by the Government you have to have a change in the

European treaty. What they can control is non-EU workers. And that

category is the category for business, it is a category that's

already had nine rule changes in the last year. Fundamentally, we

cannot afford for the growth of our economy to tamper with that

category any more. PwC does a survey for chief executives,

annually, and 60% of CEOs say what is keeping them up at night is

worries about not being able to bring in non-EU migrants to support

their business. Putting it very crudely, is the worry that some of

the Romanians and Bulgarians who come in will be low-skilled workers

and count in so. Numbers that David is talking about, that means those

numbers will not be available for the people you are talking about

want to bring in, because they have higher skills? There is no

competition there it is a completely separate migration

category. It is just that the physical numbers coming in will

count against the net migration target. And so, that will have the

knock-on effect that the Government will be tempted to clamp down on

the group that they can control. And the reason that the Government

mustn't touch the worker, the non- EU worker category, is to get

ourselves out of economic downturn, we must increase our exports, and

where companies are exporting to at the moment is Africa, Asia, south

America, and we need skills of those people to come in.

touched on the political issue and the rise of UKIP, and other parties

like the BNP, presumably, is there a cultural issue, beyond the

politics of it, is this a cultural issue at the route of it, or do the

Poles fit in, they pay their tax, and many go home, as many of the

Romanian workers say, they go home, that is where they want to be?

eastern Europeans in general it is a mixed picture, some people have

been staying and building lives here, and learning English and

fitting in, and others haven't. They have been commuter immigrants.

But I don't think in way that is not particularly the issue here, we

are not talking about large numbers, we are talking about a few tens of

thousands. The immigration debate in Britain is finished, it is over,

everybody agrees, 80% of the population, agree with the

Government. I'm head of a progressive think-tank, I agree

with the Government that we need numbers way down, back to normal

level, which means the high tens of thousands. It is the way you do it,

which is where the argument is. How you do that, without damaging

industry, as was said, and without damaging higher education. I think

the Government is doing a pretty good job at that. David Cameron has

a big speech on Europe, should he then address this, there is a lot

of things he should talk about, should he address internal

immigration within the EU, as a problem? I think he's doing a good

job in trying to address some of these issues, but they are very

challenging to address. I think, for example, it is, you know, good

to talk about these issues, but, actually, implementing European

legislation, and changes to the treaty is going to be very

difficult. We will leave it there, thank you very much.

A platinum coin worth one trillion dollars, it sounds more like the

plot of an Austin Powers movie than a serious power tool. But a

campaign is gathering pace on the left to mint a single platinum coin,

and assign it a face value of a trillion dollars. As a neat way of

solving the problems in Congress over the debt ceiling. A Democratic

Congressman has endorsed the idea and Republican has endorsed a bill

to block it. Then there is the issue of whose face should be

engraved on the most valuable qoin in the history of the world.

Here -- coin in the history of the world. Here are the options.

Mike Castle got an insignificant law passed in 1996 that later

Qoin This law was never meant to be used for large amounts of money,

but it could be as long as the coin is made from platinum. A trillion

dollar or zillion dollar coin, whatever President Obama wants. It

has to come from the Federal Reserve, running up Government debt.

The Republican house speaker is the next candidate, John Boehner. The

called debt ceiling, the budget to pay for it. The ceiling has been

raised 75-times in the past 95 years. Mostly, without complaint.

Currently standing at $16 trillion, if it isn't raised again the

Government will run out of money, it is thought, in around two months.

Next face, Paul Krugman, the Nobel laureate, who said while the coin

idea is silly but benign, the debt ceiling rule is silly, but both

vile and disastrous. So, it is perfectly legitimate to counter one

with the other. Surely the trillion dollar coin should honour business

philanthropist, Montgomery Burns, who in 1998 was swindled out of a

trillion dollar bill by Fidel Castro, with the aid of Homer

Simpson. Mr Burns, I think we can trust the President of Cuba.

Now give it back. Give what back? Josh Barrow is a columnist leading

coins to mint the coin, and we have a writer about money for the

American Enterprise Unit. It is nuts isn't it? The whole

situation we are in is nuts, it is nuts we are talking about hitting

the debt ceiling and putting the Government in a situation where it

will be unable to pay approximately 40% of its bills on any given day.

What the trillion dollar coin is, it is a gimmick, but it allows us

to avoid a situation where the Government goes into default and

severely disrupts the economy. James, a situation where the

Government can avoid a default, it sounds like quanative easing,

doesn't it? First of all, that significant empt treated it with

all the seriousness it deserves, not a lot. All the options of

raising the ceiling are really bad. It is not a benign option. By

discussing it, it makes it sound palatable, like it would be no big

deal. It raises the odds of something like this happen, the

Republicans would love the President to try it, it would be a

political disaster, which means the odds are increasing we go over this

barring limit, which would be really bad for the image of the

United States of America. Also the confidence in our way of Government.

That is a fair point, I know you have your problems uark the world's

biggest economy, -- problems, but you are the world's biggest economy,

this would make America look like a laughing stock? I believe the best

course of action will be to raise the debt ceiling, I hope he will

speak with Republican friends and ask them to have a clean debt

ceiling. There are drawbacks to using the platinum coin, but there

are drawbacks to all the options on the table politicalically. The

Republicans will attach -- politically. The Republican also

attach demands to the debt ceiling raise. We don't need short-term

fiscal austerity, that will be bad for the economy. But, more broadly,

it sets a bad precedent. It says that Republicans, or any party in

Government will be able to effectively hold the economy

hostage, and say we will force you into a terrible crisis unless you

give into our policy demands on this issue. It is a misuse of the

debt ceiling and what the President can do by threatening to issue the

platinum coin s make sure he won't play the game. It makes it more

likely that we will get the debt ceiling increase that is clean.

have said it would make America look rather ridiculous, I have to

saying, the greatest economy in the world, solving problems on New

Year's Eve, with a clock ticking and prospect of jumping over a

fiscal cliff, didn't really look like serious politicians trying to

sort out the biggest economy in the world? I say we have nowhere

further to fall. We are already at rock bottom reputationally. There

are real downsides to this. You would be forcing the Federal

Reserve into action to offset this, so it doesn't cause a bout of

hyperinflation, or higher inflation. You would be hurting the

independent of our Central Bank. That is pretty important. I would

tell friends on both sides of the aisle, yes, we need to fix our

social insurance system, our meddoo decare system and social security,

as well as the debt -- Medicare system and social curt as well as

the debt ceiling. This is legally possible t could happen? That was

not the indebt of the original legislation. It was really about

collectables. But do I think it is legal. Listen, you want to talk

about uncertainty, let this go to the Supreme Court, let's have a

Supreme Court ruling on the gazillon-dollar coin, they better

have that decision after the markets close. I don't worry about

the legal aspects of this, if you read the attacks to the statute, it

is clear the President can issue the platinum coin to whatever

denomination it wants, the law is silly, but it is clear. It is not

clear that anyone would have standing to bring a lawsuit against

it t even if it was illegal t might not be possible to bring a court

case challenging the President's action. I think this is actually a

legally relatively clear course. The question is the reputational

risks on the United States, I recognise the risks are real. We

have to compare it against other options about what we do to hit the

debt ceiling. Happy birthday Bowie, to celebrate

he has offered his fans a birthday present. A new single and album on

the way, and a retrospective of his work at the V & A museum in March.

He never failed to surprise and reinvent himself, after a bout of

ill-health, it was thought he retired. Wrong. This is flavour of

his latest work. # Had to get the train

# From pots pots -- Potter

# You never knew that # That I could do that

# Just walking the dead Lovely stuff

Joining me now is the author of the David Bowie biography, star sta,

the person who has unprecedented to the David Bowie archive, the

kurator of the Bowie exhibition. Are you surprised by this? It is

strange for someone away so long, and who batons down the hatches so

much nobody knows about it. Writing an album for two years, and nobody

suspects? I suspect it wasn't two years. Bowie has always been

forward-looking, he's not really calculating, he follows his

instincts. A lot of the things we think Were planned were impro-

advised. I would imagine he came up with a bunch of songs and it

happened quickly. Why did he do it, impulse? I think he had the songs

and went with the flow. What about a Bowie retrospective at the V & A,

that is iconic status, at the museum? If you want someone who

bridges art and design performance, he's one of the great performers of

the world, he's the person. From our perspective, he has never

thrown anything away. He has this astonishing archive he has kept,

which he made available to us, kindly. He has no other involvement

with the exhibition, we have been allowed to go through and choose

what we want. That is fantastic for us. It will be fantastic for people

to be able to see, in a sense, his past presented, against doing

something new. I think what's interesting about the new single

that he has brought out. A lot of people are saying it is nostalgic

and looking back. It is looking at his time in Berlin, of a city that

no longer exists. Divided Berlin. East Germany doesn't exist as a

country. What it is really about, is the way that things mutate, and

within his life, and obviously his period in Berlin was quite a long

way into his career, that entire world that he lived in for a while,

has completely disappeared. What have you got that will amaze us and

attract us and make us think, presumably you can see the way the

artist is at work? There is three things. For a lot of people the

costumes will be great, and the videos. Some of the things that

will most interest people are the fact that Bowie actually controls

every aspect of the production. He's not one of the people who gets

in designers and hands it over to them, one of the most interesting

things is the sketches that he has done for Ashes to Ash, for the

video. Obviously it had a major video made, he thought it all

through. Also, in the early 1970, when he did Diamond Dogs, he

originally wanted to do a musical of 1984, and Sonia Orwell George

Orwell's widow turned it down so he did it himself as a stage show. He

storyboarded it as a film, he drew them, and wer we will animate them.

He was 27d and we will animate them. He was 27 then, he was had the

ambition to make a film and musical. After he was written off as a one-

hit wonder with Space Oddity, he did a set of press shoots to

rebrand himself, nobody knew the term at the time. He went round the

national newspapers, through their archive, and took out their old

images of the curly-haired David Bowie and ban it, and relaunch

himself completely. When you researched the book you talked to

hundreds of people who knew him, did you ever think you really got

close to him. It is a difficult judgment for somebody writing a

biography whether you have actually got him? One alwayslessly questions.

There is the presumtiousness of the biographer. I think I did, he is

very English, people are inTimed by the -- intimidated by the image,

because it is so perfect. He is an ordinary person, he's something of

an old showbiz trooper, but at the same time, in terms of a creative

artist he is different from any we have known before. That said, when

you listen to his voice, it has clearly changed, this is an older

man's voice, it is a bit like the later Bob Dylan rather than the

younger one? There is a surprise in the single. It may be that the rest

of the album is quite different. I think there may be some more

surprises. His voice has gone down half an October taif, musicians say

it is like -- octave, and musicians say it is like Tony Bennett and

That's all tonight. We're back tomorrow. Hope to see you. Good

, a change in the weather on Wednesday, colder conditions across

the country. Some frost to begin the day in the north, patchy mist

and some fog. It will steadily lift and clear, giving bright spells for

the afternoon. Giving thicker cloud further south and east. The cloud

tending to break up across parts of the north Midland through the

afternoon, grey skies holding on for East Anglia and south-east

England. The rain just about clearing the Kent and suss text

coast by 3.00pm, keeping thicker cloud across south Devon and

Cornwall, for the northern areas it should be brighter for the

afternoon, temperatures at 8-9. For Wales it is a dry afternoon, still

quite a bit of cloud, we are hopeful of one or two breaks

through the afternoon. After the very misty and foggy start for

Northern Ireland. Much of it should lift and clear. A cold day at 3-4

degrees. Northern Scotland keeping stronger winds with rain across the

Northern Isles, the best of any brightness further south, as we