:00:00. > :00:16.My Lords they have voted. Content to. Not content 272. Therefore the
:00:17. > :00:18.content has it. And with that, the Lords said to the
:00:19. > :00:21.government - we're up for a fight What was an argument over those cuts
:00:22. > :00:26.could have become a full-on constitutional confrontation,
:00:27. > :00:36.until the government appeared to David Cameron and I are clear that
:00:37. > :00:40.this raises constitutional issues that need to be dealt with. However
:00:41. > :00:44.it has happened and now we must address the consequences of that. I
:00:45. > :00:45.said I would listen and that is what I intend to do.
:00:46. > :00:48.Was the Lords right to take a stand, or was it out of order?
:00:49. > :00:51.And what is left of the government's plan to save money on welfare?
:00:52. > :00:55.He was the most important man in the world economy, dealing with the
:00:56. > :01:03.Former Federal Reserve Chairman Ben Bernanake is here with us live.
:01:04. > :01:19.Why does every British law still have to be written on some of this?
:01:20. > :01:23.The Lords are either heroes of the people - resisting
:01:24. > :01:26.the worst excesses of the government as a second chamber should.
:01:27. > :01:28.Or they're oversized and unelected and trying to thwart
:01:29. > :01:33.It's not the first time we've heard the argument -
:01:34. > :01:36.but it turns out the radical left is on the side of the Lords tonight.
:01:37. > :01:41.What the Lords voted to do was force a delay on the government's
:01:42. > :01:45.It was a stance of arguable constitutional propriety, but it
:01:46. > :01:58.I believe we can achieve the same goal of reforming tax credits,
:01:59. > :02:02.saving the money we need to save to secure our economy whilst at the
:02:03. > :02:07.same time helping in the transition. That is what I intend to do at the
:02:08. > :02:13.Autumn Statement and I'm determined to deliver at the lower welfare and
:02:14. > :02:14.higher wage economy we were elected to deliver at the British people
:02:15. > :02:15.want to see. The chancellor conceding this
:02:16. > :02:18.evening that mitigating measures would be taken
:02:19. > :02:19.in his autumn statement. With me, our political editor
:02:20. > :02:35.Allegra Stratton and our economics A fairly amazing day. George Osborne
:02:36. > :02:39.was having a good run. This is the biggest U-turn he ever had to make.
:02:40. > :02:44.He has been in this post for six years and he is wounded on a number
:02:45. > :02:48.of levels this evening. Personally, politically wounded. A week ago
:02:49. > :02:54.people said they were adamant they were not to be shifting. They send
:02:55. > :02:59.out some heavy hitters to say they would not be shifting but it did not
:03:00. > :03:02.convince the Lords so he is politically wounded. He is also
:03:03. > :03:06.strategically wounded, he thought he would get it through both Houses of
:03:07. > :03:13.Parliament through a statutory instrument. And economically this is
:03:14. > :03:18.a saving of ?4 billion and if he is softening it in any way we have
:03:19. > :03:22.defined billions of pounds for the Autumn Statement in one month. And
:03:23. > :03:29.his rebranding is weakened, he was met to reposition the Tories as the
:03:30. > :03:33.party of workers. Boris Johnson, his people are cock-a-hoop, thinking it
:03:34. > :03:38.creates space for them to come through the middle. But whatever
:03:39. > :03:42.happens in one month, by the end of this Parliament tax credits will be
:03:43. > :03:52.performed in the way George Osborne would like. And that will be his
:03:53. > :03:57.legacy in the fullness of time. Just in the public finance terms, 4.4
:03:58. > :04:03.billion between friends, can he lose that? Well he would rest on what was
:04:04. > :04:07.called the pasty tax and that was small change compared to ?4.5
:04:08. > :04:12.billion. The problem is the Chancellor said tonight he will
:04:13. > :04:16.continue to save money and also mitigate the impact. It is hard to
:04:17. > :04:21.see how he will do that, hopefully all will be revealed at the Autumn
:04:22. > :04:26.Statement at the end of November. If your triple checked pensioners and
:04:27. > :04:32.take money from welfare, there will be losers. We do not know how much
:04:33. > :04:36.the mitigation would be but even if it was a complete reversal of that
:04:37. > :04:41.4.5 pounds, it sounds like a lot but the Chancellor Woods still just get
:04:42. > :04:45.to a surplus at the end of this Parliament. Not by very much but on
:04:46. > :04:49.current numbers he would still just about hit it. Economic week the
:04:50. > :04:50.difference between a small surplus and small deficit might matter a lot
:04:51. > :04:54.politically. Well there are two issues
:04:55. > :04:57.at play here - tax credit cuts, and the right of the Lords to have
:04:58. > :05:01.their say on them, or not. Our policy editor Chris Cook spent
:05:02. > :05:13.the day following the Lords debate. George Osborne announced a big shift
:05:14. > :05:16.at the July budget. The rabbit in his red box was a rise in the
:05:17. > :05:25.national minimum wage but offset by deep cuts to tax credits.
:05:26. > :05:28.The sheer scale of tax credits is subsidising lower wages in a way
:05:29. > :05:34.that was never intended. So those who oppose any savings to tax
:05:35. > :05:38.credits will have to explain how on earth they propose to eliminate the
:05:39. > :05:44.deficit, let alone run a surplus and pay down debt. At the time papers
:05:45. > :05:48.who had supported the Conservatives at the May election welcomed the
:05:49. > :05:51.move. Nonu went quite as far as the Daily Mail which canonised the
:05:52. > :05:59.Chancellor into Saint George. That all seems quite a long time ago.
:06:00. > :06:04.That Dragon now looks a bit weak. The tax credit cuts will take ?4.4
:06:05. > :06:09.billion from 3.3 million households. An average of over ?1300 a year. And
:06:10. > :06:15.the higher minimum wage will not close that gap. Disquiet about the
:06:16. > :06:17.tax credit proposals has been growing since they were first
:06:18. > :06:22.announced in summer and today they reached the House of Lords, just
:06:23. > :06:27.behind the aunt of the picture George and Dragon. Here are
:06:28. > :06:29.considering five potential puzzles ranging from out wide acceptance of
:06:30. > :06:34.the plans through to outright rejection. There is a question about
:06:35. > :06:38.how far the peers can go when dealing with a measure of this kind.
:06:39. > :06:41.There are two reasons why there has been controversy about the
:06:42. > :06:47.constitutional edition, regarding the convention of what the House of
:06:48. > :06:51.Lords can do. A statutory instrument is a small matter that goes through
:06:52. > :06:55.I much prefer a parliamentary process than ordinary law. It is
:06:56. > :06:59.presented to both chambers on a take it is presented to both chambers on
:07:00. > :07:04.Tay it basis. The House of Lords nominally has a veto but does not
:07:05. > :07:07.use it. And then it was a financial measures and traditionally the House
:07:08. > :07:13.of Lords does not get involved with financial measures. But we heard
:07:14. > :07:16.arguments on both sides about what is constitutional or
:07:17. > :07:21.unconstitutional and it is far from clear cut. In the event most years
:07:22. > :07:24.took the view that the code after all have a crack at this
:07:25. > :07:31.legislation. Baroness Hollis and Labour peer, put down one moment. It
:07:32. > :07:36.delays the desired to ask the government to provide transitional
:07:37. > :07:42.protection for families who are doing everything we asked of them.
:07:43. > :07:49.Who trusted the Prime Minister that tax credits would not be cut. And
:07:50. > :07:55.they trusted Parliament. My Lords when we said we would make work pay.
:07:56. > :08:00.The Lords passed the proposed amendments including that of
:08:01. > :08:03.Baroness Hollis. The voted to withhold consent of the cuts until
:08:04. > :08:07.the government gave protection for a minimum of three years to families
:08:08. > :08:12.who now receive tax credits. It is not comfortable for George Osborne
:08:13. > :08:15.being told by unelected peers that you're out of touch with the
:08:16. > :08:20.question is what he is going to do next. This problem is there are just
:08:21. > :08:25.no easy fixes on tax credits. There are options such as cutting income
:08:26. > :08:30.tax or national insurance. Tax credits actually are well targeted
:08:31. > :08:36.on low income families generally with children, who are in work. And
:08:37. > :08:40.so any change to the tax system would likely cost more money than
:08:41. > :08:43.the original tax credit saving. And be less well targeted on families in
:08:44. > :08:48.greatest need. There is another issue. This is the first majority
:08:49. > :08:54.Tory government since Labour removed the Conservative hereditary ramp
:08:55. > :08:59.from the House of Lords. It is always been defeating Labour
:09:00. > :09:00.government but now with the defeating the Conservative
:09:01. > :09:03.government for the first time because this is the first
:09:04. > :09:06.Conservative majority governments since that reform. And the party
:09:07. > :09:11.does not have a majority in the chamber. So we now have a situation
:09:12. > :09:14.where the Lords can challenge Conservative government from the
:09:15. > :09:17.left rather than a Labour government from the right which is quite a
:09:18. > :09:25.change in British politics and rather uncomfortable for this
:09:26. > :09:30.government. George Osborne says he is listening on tax credits but we
:09:31. > :09:34.do not know what he will do. He says the vote has issues that must be
:09:35. > :09:35.addressed. So a defeat for the government denied for sure but we
:09:36. > :09:38.just do not know what is to follow. Tonight it was a motion proposed
:09:39. > :09:41.by Labour's Baroness Hollis that caused this so-called
:09:42. > :09:43.constitutional crisis. She's just come from her victory
:09:44. > :09:47.in the Lords and is with us now. And so are two Tories of differing
:09:48. > :09:50.views about this prickly predicament for the government -
:09:51. > :10:06.the MP Jacob Rees-Mogg and activist Baroness Hollis, did you have any
:10:07. > :10:12.qualms at all about the constitution of what you were proposing? No, if
:10:13. > :10:17.the House of Commons wishes to claim financial privilege, which they are
:10:18. > :10:22.entirely entitled to do, on for example an amendment to a bill, it
:10:23. > :10:25.can be overturned in the Commons and the Speaker may give no reason and
:10:26. > :10:28.simply say we certified as a money issue and that is that. So the
:10:29. > :10:33.government could have done that, included it in the Welfare Reform
:10:34. > :10:36.Bill for example. It chose not to get the protection of financial
:10:37. > :10:42.privilege there. Secondly the government could if it had chosen,
:10:43. > :10:48.on the other route of financial privilege and put it into a money or
:10:49. > :10:54.supply finance bill. It did not do that either. So you feel entitled to
:10:55. > :10:58.have a go at it? Disagree government did not seek or claim financial
:10:59. > :11:02.privilege. Then when it comes up and says, actually, please assume we
:11:03. > :11:07.wanted financial privilege. We did not ask for it but give it to us
:11:08. > :11:12.anyway. Against that a 3 million people facing cuts. Jacob Rees-Mogg
:11:13. > :11:20.you suggested the government create 100 years to override the Lords
:11:21. > :11:25.decision. It is an extraordinary rich of the conventions and an
:11:26. > :11:29.attack on the House of Commons money privilege on ?4.5 billion of
:11:30. > :11:33.expenditure. Since 1860 this is the third occasion on which the House of
:11:34. > :11:38.Lords has overturned the Commons on something relating to taxation or
:11:39. > :11:41.expenditure. In 1868 was the painful duty would be liked, in 1909 it was
:11:42. > :11:46.the People's budget and now this. The argument on the Commons
:11:47. > :11:50.privilege on tax and expenditure long predates the creation of
:11:51. > :11:55.statutory instruments and... Why did the government not choose to do as
:11:56. > :11:58.Baroness Hollis suggests and introduce this as a financial
:11:59. > :12:02.measure. Because this House of Lords has never overturned a statutory
:12:03. > :12:07.instrument relating to money before. It has overturned a small
:12:08. > :12:15.number, four or five statutory instruments since 1968. They only
:12:16. > :12:17.came in in 1946. It is rare for the Lords vote down a statutory
:12:18. > :12:23.instrument and unprecedented for them to vote down one on spending
:12:24. > :12:27.four point ?4 billion. The government should have done what it
:12:28. > :12:31.greatly goes and claimed financial privilege. It does it all the time
:12:32. > :12:38.and it chose not to do it on this. And then afterwards said, please
:12:39. > :12:41.treated as though we did. This is an attack on the House of Commons and
:12:42. > :12:44.not on the government. It is the House of Commons Rutledge, the
:12:45. > :12:48.Democratic ridged to determine taxation and spending. It is a
:12:49. > :12:53.privilege inherit the subject matter. We have heard that debate.
:12:54. > :12:59.Are you still proposing the government should create 100 years?
:13:00. > :13:04.You think it now needs reform? There is a serious problem if the House of
:13:05. > :13:09.Lords is going to overturn conventions. Up until the removal of
:13:10. > :13:13.hereditary peers the Conservatives had an in-built majority but they
:13:14. > :13:16.observed the conventions because they wanted to maintain the House of
:13:17. > :13:21.Lords and said they were careful about exercising theoretical powers.
:13:22. > :13:25.It is now a left-wing majority in House of Lords which in six months
:13:26. > :13:30.of Conservative government has overturned the most important
:13:31. > :13:33.convention, the taxation and expenditure is the prerogative of
:13:34. > :13:39.the House of Commons and so the government needs to do something to
:13:40. > :13:42.govern effectively until 2020. Is there an appetite in the
:13:43. > :13:47.Conservative Party now to have a constitutional tussle with the House
:13:48. > :13:53.of Lords? I do not think so. And just a month ago, just after David
:13:54. > :13:57.Cameron has given his party conference speech, in which he
:13:58. > :14:03.relaunched the Conservative Party as a 1 nation Conservative Party, to
:14:04. > :14:08.try to stuff the House of Lords with 100 peers, to enact legislation that
:14:09. > :14:12.cuts the benefits of the working poor, that is
:14:13. > :14:14.cuts the benefits of the working for a party that is trying to
:14:15. > :14:17.present itself as blue-collar friendly. So it would be
:14:18. > :14:24.constitutionally difficult, but to do it for something that is so
:14:25. > :14:26.controversial, so officers to where David Cameron says he wants to take
:14:27. > :14:31.the Conservative Party, I do not think there is a chance in any
:14:32. > :14:37.rational political sense that the Conservatives would do this. There
:14:38. > :14:42.is a bit. It is not necessarily the most popular issue on which to
:14:43. > :14:45.create 100 peers. But if the Lords within six months are willing to
:14:46. > :14:49.overturn conventions, the government will have further controversial
:14:50. > :14:53.business to introduce between now and 2020. If Lords are going to
:14:54. > :14:56.break convention and overturn things that ought to go through smoothly,
:14:57. > :15:05.the government will have great walk years. -- more peers.
:15:06. > :15:13.In the President? Now, because they want the privilege, they should
:15:14. > :15:21.claim it. They want you to behave as though they did. The law is
:15:22. > :15:24.generally respects a manifesto commitments but unfortunately, this
:15:25. > :15:28.was not in the manifesto. There was talk of welfare cuts but from my
:15:29. > :15:32.experience, people did not think that those would be targeting people
:15:33. > :15:36.in work. They had a false, unrealistic image that it was people
:15:37. > :15:41.out of work. The government does not have the cover of a manifesto
:15:42. > :15:48.commitment. David Cameron, as you know, made a public pledge twice
:15:49. > :15:55.that they would not cut tax credits. But it was more ambitious than that.
:15:56. > :15:59.The unelected house works properly when it will praise the conventions.
:16:00. > :16:03.If this is a sign of regular breaches of convention, and the Lib
:16:04. > :16:05.Dems have said they will not necessarily follow the convention,
:16:06. > :16:10.then the Lords will need more appears to make sure the government
:16:11. > :16:13.can get its manifesto through. What will the government to do about
:16:14. > :16:17.this? George Osborne says there will be something in the Autumn
:16:18. > :16:23.Statement. What would satisfy you? As a sensible way forward, I would
:16:24. > :16:27.like to insure that the cuts only affect new claimants. Not existing
:16:28. > :16:32.families, families who have done what we have asked for and have
:16:33. > :16:38.built their life around what they are getting from the wage and income
:16:39. > :16:44.support. Those families need this money. I have been reading letters
:16:45. > :16:47.and e-mails from people saying, I am terrified when the Christmas letter
:16:48. > :16:53.comes with the knot of occasion that I will lose ?3000 on a low
:16:54. > :16:58.income... So new rules on new claimants but the old rules apply
:16:59. > :17:02.for three years on old claimants? Exactly. Is this a retreat that will
:17:03. > :17:06.ultimately benefit the government because it was turning out to be a
:17:07. > :17:10.political headache and it was going to come back to the Commons. Some
:17:11. > :17:19.said there might be more issues. And now, actually, it has a chance to be
:17:20. > :17:24.dealt with. There is a difference in interest between George Osborne and
:17:25. > :17:28.the Conservative Party. It has probably heard George Osborne's
:17:29. > :17:32.authority. No chance likes to make a U-turn. This could have been very
:17:33. > :17:38.difficult for the Conservative Party. There was evidence that 71
:17:39. > :17:43.constituencies, the 71 most marginal Tory MPs, the number of people
:17:44. > :17:49.affected was greater than the majorities. Of course you have to
:17:50. > :17:52.cut the deficit but when at the same time you are cutting inheritance tax
:17:53. > :17:57.for the wealthy, when we have evidence that pensioners are better
:17:58. > :18:01.off than the average citizen, that they are getting a 2.5% increase in
:18:02. > :18:05.pensions, when inflation is falling, to make these kinds of cuts
:18:06. > :18:11.to the working poor, when the Conservative Party is presenting
:18:12. > :18:15.itself as creating so many jobs, this is a bad position for the
:18:16. > :18:21.Conservative Party. On the substantive issue, the only thing
:18:22. > :18:26.worse than the U-turn was to actually do the original plan. It is
:18:27. > :18:30.difficult. The Chancellor had ?4.5 billion worth of savings lined up
:18:31. > :18:34.from a budget that had gone from 1 million times -- ?1 billion to ?30
:18:35. > :18:38.billion. It was an expensive programme and we know that cuts need
:18:39. > :18:44.to be made to balance the books. Chancellors have to make difficult
:18:45. > :18:47.decisions. I think conservatives sometimes have to supports
:18:48. > :18:51.chancellors with the means when they are difficult. Not all decisions and
:18:52. > :18:56.government are easy. Old chancellors, good chancellors take
:18:57. > :18:59.difficult decisions and stick to the thrust of them. But targeting the
:19:00. > :19:04.working poor, was that really what we came into politics to do? The
:19:05. > :19:08.government has made clear that the package as a whole will make sure
:19:09. > :19:15.that people benefit. That is not true. I trust the government. You
:19:16. > :19:19.might think I am naive but when the Chancellor says that the overall
:19:20. > :19:24.package will insure that nine out of ten people are as well-off... That
:19:25. > :19:33.is you and I. Eight out of ten is you and I. Its people getting tax
:19:34. > :19:43.credits. It isn't, it isn't. You are right on that particular point. It
:19:44. > :19:47.is benefits to help people with children in nursery education and so
:19:48. > :19:50.on. The Chancellor has to make difficult decisions, and we have to
:19:51. > :19:56.balance the books. One final question. What did you think you
:19:57. > :19:59.were doing in the election campaign to put in ?12 billion of welfare
:20:00. > :20:04.cuts, unspecified. Where were they going to come from? I will let you
:20:05. > :20:07.into a secret. The Conservatives did not expect to win the general
:20:08. > :20:11.election. There were promises made that they thought would be traded
:20:12. > :20:16.away in coalition negotiation. Things like the right to buy for
:20:17. > :20:20.housing associations. The Tories did not expect to have to make those
:20:21. > :20:22.cuts. And of course, they are discovering the difficulties. We
:20:23. > :20:24.will leave it there. It is amazing to reflect on the fact
:20:25. > :20:27.that in the last few decades, professional economists have had
:20:28. > :20:29.more power over economic policy than ever before, running independent
:20:30. > :20:35.central banks around the world. And yet, in no time,
:20:36. > :20:37.the world was engulfed by the worst economic crisis anyone could
:20:38. > :20:40.remember - that financial crash One man who was right at the
:20:41. > :20:51.centre of things was Ben Bernanke, an economist whose specialist
:20:52. > :20:53.subject was the depression of the 1930s and who ended up in charge
:20:54. > :20:57.of the US central bank for the great recession of the 2000s,
:20:58. > :21:06.and who has just written I am honoured to announce that I am
:21:07. > :21:07.nominating Ben Bernanke to be the next chairman of the Federal
:21:08. > :21:09.Reserve. His timing could have hardly have
:21:10. > :21:11.been worse - He got to the post just
:21:12. > :21:16.in time to get his feet under And what
:21:17. > :21:26.a storm it turned out to be. Meltdown on the markets as Wall
:21:27. > :21:28.Street is left reeling from some of the biggest blows in its history.
:21:29. > :21:30.Perhaps the key moment of the crisis was the collapse
:21:31. > :21:37.Ben Bernanke had hoped that a rescue might have been orchestrated,
:21:38. > :21:40.The UK, scared of inheriting Lehman's
:21:41. > :21:46.Lehman toppled, and with it, confidence in the world's banks.
:21:47. > :21:53.The next six years of Chairman Bernanke's career was spent
:21:54. > :22:01.Including putting hundreds of billions of dollars into the US
:22:02. > :22:03.economy through quantitative easing. What better career
:22:04. > :22:05.for someone who'd once been a young professor, studying the mistakes
:22:06. > :22:15.of economic policy in the past? And he hasn't changed a bit in all
:22:16. > :22:19.those years. Ben Bernanke is with us. Good evening. Could we go to
:22:20. > :22:24.that Lehman Brothers collapsed moments? I think some US policy
:22:25. > :22:28.makers, deep down, blame the Brits for stopping Barclays taking over
:22:29. > :22:33.Lehmans, which would have made an enormous difference. It was a
:22:34. > :22:39.crushing blow at the time because the British would not allow Barclays
:22:40. > :22:42.to acquire Lehman Brothers. But a couple of things, I understand why
:22:43. > :22:47.the Chancellor did not do it. He did not want the bad assets to end up on
:22:48. > :22:51.the British taxpayers doorstep. And we tried desperately to save Lehman
:22:52. > :22:55.Brothers. Even if we had saved them, something would have failed
:22:56. > :22:58.eventually because Congress would not act until they saw the
:22:59. > :23:05.consequences of a failure. So there would have been a big crisis?
:23:06. > :23:10.Eventually, I am afraid, yes. Your political journey comes off in the
:23:11. > :23:14.-- comes across in the book, you start off as a small government
:23:15. > :23:20.Republican and become persuaded that there is a role for government. You
:23:21. > :23:23.talk about having to stop people buying certain products like
:23:24. > :23:26.inflammable pyjamas for children. And I don't think you had the view
:23:27. > :23:29.at the beginning, you thought there would be more personal
:23:30. > :23:34.responsibility. Tell us about that journey. I always took a moderate
:23:35. > :23:38.position. I think the market is critical for a good economy but the
:23:39. > :23:43.government has a role to play. I think the party left me because the
:23:44. > :23:47.tea party and the extremes of left and right left me in the middle, and
:23:48. > :23:53.many other Americans, I think, who would like a more balanced approach.
:23:54. > :24:02.Unfortunately that is not worry are right now. Who would you vote for in
:24:03. > :24:06.the next election? I don't know what I am registered. I did not vote as a
:24:07. > :24:13.matter of principle when I was chairman. Those on the left look
:24:14. > :24:17.back at the last 30 years of the neoliberal consensus, neoliberal
:24:18. > :24:22.economics, and they see that as an ideological stands, that the world
:24:23. > :24:26.took, after Thatcher and Reagan. Are they right to see it as
:24:27. > :24:31.ideologically or is that just technocrats doing their best for the
:24:32. > :24:34.world? I think in the case of the financial system, there was too much
:24:35. > :24:38.deregulation. The regular system was put together in the 30s during the
:24:39. > :24:42.great depression and it did not keep up with what happened, the
:24:43. > :24:46.innovations and change, and so when the crisis came, we did not have the
:24:47. > :24:51.tools and the vision. We could not see what was going on. I am not sure
:24:52. > :24:55.I would indict the philosophical approach. I think we need good
:24:56. > :25:20.regulation and that is what is happening now. What about austerity?
:25:21. > :25:22.In the book and in subsequent interviews, you have criticised
:25:23. > :25:25.governments for pushing too hard on the fiscal retrenchment, leaving a
:25:26. > :25:27.lot of pressure on you guys doing the monetary policy to put your feet
:25:28. > :25:29.on the accelerator while the government is putting their feet on
:25:30. > :25:32.the brakes. Was that ideologically? It was very practical. I think too
:25:33. > :25:34.much burden has been put on central banks to carry the recovery. The
:25:35. > :25:37.fiscal policy has focused too much on short-term cuts and austerity. I
:25:38. > :25:40.think when you have millions of unemployed, it is not the time to be
:25:41. > :25:42.making sharp cuts, to be doing sequester us and fiscal clefs and
:25:43. > :25:45.all the things that have happened in the Congress. What about the -- what
:25:46. > :25:49.about Europe and the UK? I think it depends on the circumstances. Greece
:25:50. > :25:55.is not going to do fiscal expansion but a country like Germany has scope
:25:56. > :26:00.to do that. And the UK, I am not an expert but I think the UK was
:26:01. > :26:04.somewhere between the Europeans and the US and it has had a decent
:26:05. > :26:10.recovery, as you know. The UK fiscal stands is coming to a neutral
:26:11. > :26:15.position. It was a little tight early on and perhaps they could have
:26:16. > :26:19.done better. I asking because we have this charter for budget
:26:20. > :26:23.responsibility which will mandate a budget surplus under normal
:26:24. > :26:27.circumstances. Would you consider that fiscally responsible or
:26:28. > :26:32.irresponsible, making the life of central bankers harder? It depends.
:26:33. > :26:36.If you are in a recession and the period of high unemployment, I think
:26:37. > :26:41.you need to be prepared to have a deficit in those situations, and
:26:42. > :26:44.understand that in periods of rapid growth, you will concentrate on
:26:45. > :26:49.that. I would not want to do that all the time. But do you want a law
:26:50. > :26:53.that says you have to have a surplus except under predefined
:26:54. > :26:59.circumstances? I think that you want to have the flexibility to respond
:27:00. > :27:04.to national emergencies. In particular response to recession
:27:05. > :27:09.is, like a deep one we have just come out of. Looking back at the
:27:10. > :27:12.crisis, clearly the public were left quite angry, with the sense that
:27:13. > :27:17.they picked up the bills and other people got away with it. Bluntly, do
:27:18. > :27:21.you think more bankers should have been put in jail? I think the
:27:22. > :27:26.Department of Justice's strategy could be more focused on individual
:27:27. > :27:30.responsibility. They find the big institutions billions of dollars.
:27:31. > :27:33.What was the individual responsibility? I don't think we
:27:34. > :27:41.know the answer. Because we didn't bother to look. That was my concern.
:27:42. > :27:48.Let's talk about the policy regime. If you were writing a note, you were
:27:49. > :27:52.going to write it on vellum and bury it. If it was a letter to
:27:53. > :27:56.policymakers in 60 years' time, giving them the benefit of your
:27:57. > :28:05.advice, having been through this crisis, what would the pithy single
:28:06. > :28:10.piece of advice be? I think when the situation is looking benign, that is
:28:11. > :28:14.when the risk is building, so be vigilant. And that was the story of
:28:15. > :28:20.the precrisis power-down? That was what happened. And how do we get out
:28:21. > :28:25.of the paradox? Vigilance. If we look carefully and pay enough
:28:26. > :28:31.attention, then we can withstand the shocks. But you are great land of --
:28:32. > :28:35.a great fan of inflation targeting. We were looking for inflation but we
:28:36. > :28:40.did not have it. Meanwhile, a wolf came in the back and did a great
:28:41. > :28:44.deal of damage to financial stability. Do you concede that you
:28:45. > :28:50.need a financial instability remit in monetary policy as well as an
:28:51. > :28:56.inflationary policy? With the central bank -- the central bank,
:28:57. > :29:00.the Fed has extensive resources to monitoring -- devoted to monitoring
:29:01. > :29:05.for problems. Monetary policy does not have to do everything. I think
:29:06. > :29:10.regulation, supervision, oversight, macro credential policies, those are
:29:11. > :29:14.the first line is that we should take. And how we rectify these
:29:15. > :29:15.problems? We will never do that completely but we have made
:29:16. > :29:19.progress. Ben Bernanke, thank you. How should teachers deal with pupils
:29:20. > :29:22.whose behaviour is out of control? They are allowed to use force
:29:23. > :29:25.as a last resort, but unions have told Newsnight that an increasing
:29:26. > :29:28.number of their members are worried if they do so - even in quite
:29:29. > :29:31.legitimate circumstances - they Secunder Kermani spoke to one
:29:32. > :29:46.headteacher who nearly lost For these children this classroom is
:29:47. > :29:49.their last chance of staying within the school system. Social and
:29:50. > :29:54.emotional difficulties mean other schools have not been able to handle
:29:55. > :30:02.them. It also means that at times dealing with them can be
:30:03. > :30:06.challenging. This is how teachers in both special
:30:07. > :30:11.education and mainstream schools are taught to physically restrain
:30:12. > :30:15.pupils. It is always meant to be a last resort, never a punishment. The
:30:16. > :30:20.need to protect the child and others around them. But of course it is
:30:21. > :30:28.controversial and can have serious consequences for the child and for
:30:29. > :30:31.the teacher. Trystan Williams had won awards as a
:30:32. > :30:40.headteacher dealing with challenging pupils at mainstream schools. Two
:30:41. > :30:44.years ago he tried to help avoid who was at risk of seriously harming
:30:45. > :30:50.himself. And it almost cost him his career. I attempted to lift the
:30:51. > :30:54.young man up. In the process of trying to lift him off the floor he
:30:55. > :30:59.pulled me down on top of them and sustained an injury. I was alone
:31:00. > :31:05.with the child and under the circumstances sadly, the external
:31:06. > :31:10.agencies felt I had a sort of the young man. I just thought I had
:31:11. > :31:16.winded him, I had no idea of the catastrophic events that were going
:31:17. > :31:19.to happen. Trystan Williams was suspended and subject to a police
:31:20. > :31:25.investigation. After 12 months he was cleared and returned to work in
:31:26. > :31:28.another school. To have that taken away from you for simply trying to
:31:29. > :31:39.do your best, it actually drove me to consider... Whether I should
:31:40. > :31:47.still be here. You know. And when that happens, you think I have
:31:48. > :31:50.sacrificed a lot for transforming lives and this is the way I get
:31:51. > :31:56.treated for trying to do my best. That is difficult to come to terms
:31:57. > :32:01.with. Then when my wife, obviously she needed support and my boys are
:32:02. > :32:08.having psychiatric counselling and help. Because they could not sleep
:32:09. > :32:14.at night and did not want to go to bed in case daddy got locked up.
:32:15. > :32:18.That was hard working. Trystan Williams's case is extreme but not
:32:19. > :32:22.the only one. We have heard of other examples of investigations going on
:32:23. > :32:25.for months before teachers are eventually cleared. At times some
:32:26. > :32:30.have even been driven out of the profession. We are dealing with a
:32:31. > :32:34.couple of cases per month on average that has come to a difficult
:32:35. > :32:38.situation where someone has been suspended or faces some kind of
:32:39. > :32:43.challenge as the result of that. That hides many more were decisions
:32:44. > :32:46.had not been made upon public and were perhaps children who should
:32:47. > :32:49.have been restrained have not been restrained because professionals are
:32:50. > :32:55.not certain as to their powers and rights. The Department for Education
:32:56. > :32:59.guidance states teachers should not be suspended automatically when a
:33:00. > :33:05.complaint is made. And that 90% of investigations should be completed
:33:06. > :33:09.within three months. Unions believe that is not happening. The last time
:33:10. > :33:12.the Department for Education counted, 74% of cases concluded
:33:13. > :33:17.within the time. They do not have up-to-date figures but advise
:33:18. > :33:23.schools that cases should be swiftly investigated. Allegations of misuse
:33:24. > :33:28.of restraints are serious. In August the school in Devon was closed down
:33:29. > :33:35.as police examined claims that staff used excessive force on pupils. And
:33:36. > :33:40.this is footage of primary pupils in Tottenham being restrained last
:33:41. > :33:45.year. The school and council reviewed safeguarding procedures and
:33:46. > :33:51.Ofsted cleared them of wrongdoing but some parents were furious. How
:33:52. > :33:55.often are you in scenarios where a restraint is one of the options?
:33:56. > :33:58.Teachers at the school managed to dramatically reduce the number of
:33:59. > :34:03.restraints they use by concentrating more on de-escalation. September it
:34:04. > :34:08.49 times, the September just one time. But the knowledge that
:34:09. > :34:13.restraining a pupil could end their career is a constant concern. I was
:34:14. > :34:16.suspended for eight months. After two weeks the police had
:34:17. > :34:23.investigated and cleared me. But you go through the emotional stresses
:34:24. > :34:27.and strains of waiting for governors to confirm the decision that you can
:34:28. > :34:33.come back to school, come back to work. You're not necessarily given
:34:34. > :34:39.the protection that we deserve as professionals. Nobody wants to do
:34:40. > :34:41.it. It is dreadful for them, horrendous for us and at the end of
:34:42. > :34:47.it you over analyse everything constantly. What could I have done,
:34:48. > :34:55.could I have done that differently. It is a horrible situation to be in
:34:56. > :35:01.but at times it is necessary. Bernard Allen helps to train
:35:02. > :35:05.teachers and acts as an expert witness. He says there needs to be
:35:06. > :35:15.more consistency on how guidelines on the straights are set out. It is
:35:16. > :35:17.better management and supervision required to stop the bad people
:35:18. > :35:22.abusing the powers. But the moment it is decided in different areas of
:35:23. > :35:27.the country by different individuals. What is good actors in
:35:28. > :35:29.Dorset is considered abuse interim and that is the situation we have
:35:30. > :35:37.had for 25 years. Trystan Williams and that is the situation we have
:35:38. > :35:40.is now headteacher at another school but worries that what happened to
:35:41. > :35:46.him could still happen to other professionals. That could happen to
:35:47. > :35:54.anybody in a school similar to mine. Wrong place, wrong time. Complex
:35:55. > :35:55.situation, trying to do the best. And your life will never be the same
:35:56. > :35:57.again. Trystan Williams ending that report
:35:58. > :36:00.by Secunder Kermani. We started on tax credit cuts -
:36:01. > :36:02.let's finish with another idea A committee of MPs has suggested
:36:03. > :36:07.that ?80,000 could be saved if acts of parliament were no
:36:08. > :36:10.longer printed on vellum made At the moment,
:36:11. > :36:16.the practice is to print two such copies of each act, one
:36:17. > :36:19.for the National Archive and one for A key feature
:36:20. > :36:23.of vellum is its longevity. Replace vellum with paper -
:36:24. > :36:26.even the most expensive, thick kind of paper that you buy
:36:27. > :36:32.at the poshest of stationery shops Well, we have some vellum now,
:36:33. > :36:36.live in the studio. I'm with Paul Wright who runs
:36:37. > :36:47.the last surviving vellum works Good evening. How does this get
:36:48. > :37:01.turned into a piece of act of Parliament, for example M if we go
:37:02. > :37:04.back to the start, one of the supermarkets put in an order for
:37:05. > :37:12.beefburgers and we going and take a by-product. Not killing animals for
:37:13. > :37:17.this? It is just going in the bin. Then we go into this 1000 -year-old
:37:18. > :37:30.process of soaking it, getting the skin to the and then setting to with
:37:31. > :37:35.this what is called a lunar. Literally we shave and scrape. You
:37:36. > :37:40.do not do this by hand M everything is done by hand. We have no machines
:37:41. > :37:47.to do it. It takes about seven years. And this is why it costs ?14
:37:48. > :37:53.for a sheet. It was but into that ?14, what do we get for that? You
:37:54. > :38:03.get about 5000 years of secure data storage. The world... It sounds like
:38:04. > :38:10.a long time. Looking at the dead Sea Scrolls, found in the back of a
:38:11. > :38:17.cave, 2400 years after they had been written. They were stumbled across.
:38:18. > :38:22.That is a long time. Can find no reduce something that can do better
:38:23. > :38:28.than this? Sadly for silent -- the science and gladly for me, they
:38:29. > :38:33.cannot. We got involved with a project in 2000 and people wanted to
:38:34. > :38:37.bury data for 1000 years and went all round all the technology
:38:38. > :38:41.companies in the world saying, convince us that in the year 3000,
:38:42. > :38:48.we can recover this data and it will be good. Who do you sell it to,
:38:49. > :38:55.apart from the records office? It goes to calligraphers, illuminators,
:38:56. > :39:01.botanical artists, hobbyists. It goes all over the world. We are
:39:02. > :39:07.considered the finest in the world. What to use to write on it? Cast
:39:08. > :39:12.your mind back to the Bronze Age, if they managed to do it with a bit of
:39:13. > :39:19.Bernard Twigg, everything forward of that works. If you want to do it
:39:20. > :39:24.with a Biro, that will work fine. If you want longevity it is the ink
:39:25. > :39:30.that becomes the limiting factor. If you take an archival ink and applied
:39:31. > :39:33.to this than I could give you a piece today and you could write and
:39:34. > :39:38.it would be round in a thousand years. Could I print a photograph of
:39:39. > :39:44.my other half on this cruel printer in my lounge? Absolutely. So there
:39:45. > :39:53.is a market, people would love something that costs ?14. We do do
:39:54. > :40:00.things, we have printed best man speech is, specialist speeches from
:40:01. > :40:04.father to daughter, all kinds of things. Good luck with the business,
:40:05. > :40:07.that is really interesting. It has been a pleasure.