:01:30. > :01:40.$:/STARTFEED. Up in the air as the BAe merger deal with EADS bomb site,
:01:40. > :01:40.
:01:40. > :37:54.Apology for the loss of subtitles for 2174 seconds
:37:54. > :38:02.what next for beat that 16,000 , and up in the North West...
:38:02. > :38:07.Up in the air, is the BA Dee -- BAE merger deal collapses, what next?
:38:07. > :38:10.The risk is that Typhoon continues to do less well manager and if that
:38:10. > :38:15.is the case, there will be more job cuts.
:38:15. > :38:20.cuts. cuts.
:38:20. > :38:23.The at report coming up. That report coming up and two Lancashire
:38:23. > :38:26.MPs keen to discuss it. This week we have Mark Hendrick, the Labour
:38:26. > :38:28.MP for Preston, and Jake Berry, the Conservative MP for Rossendale and
:38:28. > :38:33.Darwen. A very unsettling time? It is. These discussions have been
:38:33. > :38:37.going on for some months. They were later and then because of stock
:38:37. > :38:42.exchange rules, BAE and EADS had to make announcements to the world.
:38:42. > :38:49.During that time, the work force have been very concerned about it.
:38:49. > :38:54.The fact that this deal has now failed and is dead means that the
:38:54. > :38:57.work will continue Aziz added his begins -- business as usual. There
:38:57. > :39:00.is concern about the long-term and whether or not a deal will be done
:39:00. > :39:08.in the future. We beat Ed Day to make sure that Britain and Europe
:39:08. > :39:12.have a strong defence industry. -- we need a deal. Also, this is a
:39:12. > :39:20.company that has such impact across Lancashire? Absolutely. Earlier
:39:20. > :39:26.this week I was meeting apprentices who work in the supply team at BAE
:39:26. > :39:31.Systems. Let's not talk them down. It is a fantastic company, it has a
:39:32. > :39:37.full order book and his deal was described as an opportunity rather
:39:37. > :39:39.than a necessity. Let's get a little bit more detail on this.
:39:40. > :39:42.The two companies already work together on building this - the
:39:42. > :39:45.Eurofighter Typhoon. The merger would have created the world's
:39:45. > :39:48.largest defence, security and aerospace group. And for BAE, it
:39:48. > :39:54.would have been a return to the civil aviation markets, which it
:39:54. > :39:56.left six years ago when it sold its 20% holding in Airbus to EADS. But
:39:56. > :40:02.the French and particularly the German government wanted large
:40:02. > :40:05.national stakes in the new company, which Britain would not accept.
:40:05. > :40:11.What next for the company and its 16,000 employees at plants across
:40:11. > :40:14.the North West? They are known for the Typhoon, but
:40:14. > :40:18.their doomed romance has been more of a whirlwind. It is a large
:40:18. > :40:28.regional employer, but works in the most sensitive of industries. And a
:40:28. > :40:28.
:40:28. > :40:32.merger with EADS would have created a huge global company. This is a
:40:32. > :40:37.fantastic opportunity, something which should have perhaps happened
:40:37. > :40:42.15 years ago. This may be our last chance to make one large European
:40:42. > :40:45.companies that can take on the rest of the world. So what went wrong?
:40:45. > :40:48.France and Germany wanted to keep sizable stakes in the new company.
:40:48. > :40:51.Britain didn't want them to take more than 9% and there was a fear
:40:51. > :40:58.that if they did, lucrative contracts with America would be at
:40:58. > :41:03.risk. One Lancashire MP went to Washington to check. Investors,
:41:03. > :41:06.because of the surprise, and they think it was the wrong choice, well,
:41:06. > :41:12.but it -- question the confidence in members of the Board of the
:41:12. > :41:16.company. But in the long term, but order books speak volumes. BAe's
:41:16. > :41:19.order books as a prime and sub- contract there are some of the
:41:19. > :41:22.happiest in the business. The supply chain means more than
:41:22. > :41:25.60,000 people across the north-west rely on BAE Systems for their
:41:25. > :41:29.livelihoods. Workers were unsure what the proposed merger meant for
:41:29. > :41:33.their jobs and that uncertainty remains. I'd like to hear that from
:41:33. > :41:38.our point of view, this is a strong plan for the business and that we
:41:38. > :41:45.can deliver the business plan, delivered a probability back into
:41:45. > :41:48.the business and sustained -- sustain employment. BAE Systems is
:41:48. > :41:50.still one of the world's biggest defence players. But some believe
:41:50. > :41:55.the failed merger leaves the company looking vulnerable.
:41:55. > :42:01.risk is that Tie Fein continues to do less well than it should add if
:42:01. > :42:04.that is big case, it is not good for the future. Workers' futures
:42:04. > :42:07.are still uncertain and for now, BAE Systems is single, but some
:42:07. > :42:14.analysts think it is open to a possible takeover from a US company
:42:14. > :42:22.and may still end up tying the knot. We are joined by Professor Eric
:42:22. > :42:27.Grove. It is a stark warning from the analyst, sighing that he
:42:27. > :42:30.thought it was a pretty grim picture. What do you think? I would
:42:30. > :42:35.be a bit more optimistic. Commentators are saying it has not
:42:35. > :42:40.made a huge amount of difference. It is our loss of face for the
:42:40. > :42:45.management but BAE Systems remains a big contractor. I am not sure
:42:45. > :42:51.that any American company is actually bad keen on a combination
:42:51. > :42:56.with -- that keen on a combination with BAE Systems. From the
:42:56. > :43:00.Pentagon's point of view, I think they wanted the BAE and EADS thing
:43:00. > :43:04.to go forward, because they wanted a competitor for their existing big
:43:04. > :43:09.companies. Some American reports showed that, as long as the
:43:09. > :43:13.structure was acceptable to the USA. The structure on offer was not. The
:43:13. > :43:17.Americans were not willing to accept 9%. It turned into something
:43:17. > :43:21.that was. That is what the management wanted. They saw it as
:43:21. > :43:24.an opportunity to reform the organisation in such a way as it
:43:24. > :43:28.was still competitive in the American market and would still
:43:28. > :43:33.have the advantage of the broader civil market as well. Was a
:43:33. > :43:37.government keen on this deal? one of the MPs who wrote to the
:43:37. > :43:42.Prime Minister to express concern about the interference from the
:43:42. > :43:46.French, German and Spanish governments in the combined company
:43:46. > :43:52.if it had gone ahead, I think big government could see commercial
:43:52. > :43:56.advantages for the Day preceding but quite correctly, it has
:43:56. > :44:00.concerns of protecting British workers first and foremost. Isn't
:44:00. > :44:05.there an argument but having that merger would have led to better job
:44:05. > :44:09.prospects because it would have been a company doing more things?
:44:09. > :44:16.In the longer term. In the short to medium term, there are plenty of
:44:16. > :44:24.contracts. The typhoon project, and also the Joint Strike Fighter,
:44:24. > :44:26.where we are building an aircraft with Americans. The question is
:44:26. > :44:30.about the long term, about aircraft being built. He will have the
:44:30. > :44:37.technology and there is it going to go? There is the production were to
:44:37. > :44:41.be? There are big questions for the future, 10 or 15 years from now.
:44:41. > :44:47.Are you pleased or disappointed that Biddy hasn't gone through?
:44:47. > :44:50.will see what happens in the future. I am reassured that we are not what
:44:50. > :44:53.you have a company employing 16,000 people in the North West
:44:53. > :45:00.predominantly controlled by the French and German government. We
:45:00. > :45:03.have seen it time and again. What I am asking is if the percentages for
:45:03. > :45:09.that foreign governments had been brought down to 9%, we do have been
:45:09. > :45:14.in favour of it or not? As I said earlier, I think BAe has a future
:45:14. > :45:20.as an independent business within the UK, a British business. We have
:45:20. > :45:24.a special relationship with United States and I should think the USA,
:45:24. > :45:30.if the commercial argument is that with their jobs in Lancashire will
:45:30. > :45:39.be more secure if the go-ahead, but I would like to support it. -- then
:45:39. > :45:44.I would look to support it. Professor growth? It was pretty
:45:45. > :45:49.clear that... Sorry to interrupt, do you think bap national politics
:45:49. > :45:53.played a role? I think it is interesting to hear whether
:45:53. > :45:57.commentary is coming from politically in that Euro-sceptic
:45:57. > :46:02.members of parliament were seen to be rather against it for a broader
:46:02. > :46:06.reasons, but for good reasons as well, perhaps. Clearly, politics
:46:06. > :46:09.has triumphed in the end. What about the argument that we should
:46:09. > :46:15.not have been doing this, because this was a very important cuppa
:46:15. > :46:22.before national security and regardless of what kind of peewee.,
:46:23. > :46:29.it should remain purely British? is not -- regardless of what kind
:46:29. > :46:33.of deal we.. I think in the longer term we needed a more secure
:46:33. > :46:41.company. There were drawbacks about it some people thought it as a
:46:41. > :46:46.European takeover. Recently, there was talk about combining EADS with
:46:46. > :46:50.a French firm. One of the EADS people, they said do you think we
:46:50. > :46:56.would be allowed to take over Talis? Berra were clearly some
:46:56. > :46:59.people in EADS who saw this as the European takeover. I am not sure
:46:59. > :47:04.this was objectively be case, especially if it could be
:47:05. > :47:10.restructured in such a way. I feel very sorry for the management teams
:47:10. > :47:15.in BAe and EADS, who wanted to use this to diminish the political
:47:16. > :47:19.control over the company. What do you want to see happen? One thing
:47:19. > :47:22.we have forgotten is the reason we lost the India contract is because
:47:22. > :47:29.the could not make a strong case and did not have a great deal of
:47:29. > :47:32.help from the government. This was selling Typhoon aircraft to India.
:47:32. > :47:37.One of the reasons discussions began was because of the failure of
:47:37. > :47:41.that. If this had been a wholehearted venture, those Typhoon
:47:41. > :47:47.aircraft would have been bought by India because we would not have had
:47:47. > :47:52.the same level of competition. not think leading with the Germans
:47:52. > :47:59.helped. If ever there was a project they should have been led by
:47:59. > :48:03.Britain. In the longer term there has got to be a deal. What I want
:48:03. > :48:11.to see is what was on the table from the companies. The reduction
:48:11. > :48:16.in the share of the ownership by a European countries and a reduction
:48:16. > :48:20.of governance on the board. It was the refusal of the German
:48:20. > :48:23.government to decrease its influence in EADS business. I think
:48:23. > :48:26.that is deeply concerning for people worried about jobs and
:48:26. > :48:33.growth in Meite Show and the North West. We don't want jobs being
:48:33. > :48:38.exported to Germany. If something can take politics out of this
:48:38. > :48:41.defence contractor and protect our jobs, it will be at deal.
:48:41. > :48:46.Do you remember two weeks ago, Jack Straw giving some advice? He said
:48:46. > :48:53.Ed Miliband had to use simpler language explaining his ideas.
:48:53. > :49:00.I knew what he meant when he talked about redistribution. But if I
:49:00. > :49:03.stood on my soapbox, my audience would dissolve rapidly. Now Jack,
:49:03. > :49:06.don't switch off your TV but yes, it's time to talk aboutp
:49:06. > :49:08.redistribution, which involves raising wages for the lowest paid -
:49:08. > :49:12.one of the Labour leader's favourite ideas. Stuart Pollitt has
:49:12. > :49:22.been looking at what it is and how it's already happening in parts of
:49:22. > :49:26.
:49:26. > :49:29.the north-west. Howls of anguish from the 80,000 rich people...
:49:29. > :49:39.For most of the last century, politicians debated the pros and
:49:39. > :49:40.
:49:40. > :49:48.cons of wealth distribution. Are we will continue to cut taxes in
:49:48. > :49:55.general and income tax in general. Now there is a new political word
:49:55. > :49:58.on the agenda breeze -- 3 distribution.
:49:58. > :50:01.Basically, it is serving up more money up front in pay packets,
:50:01. > :50:04.rather than topping your salary cake with the icing of tax credits
:50:05. > :50:07.and benefits. For Glenys, it means an extra �1 an hour. She's one of
:50:08. > :50:15.1,200 Manchester city council staff now paid a living wage instead of
:50:15. > :50:19.the minimum wage. Air -- any extra money has got to go somewhere and
:50:19. > :50:23.usually it goes on bills. It does help, but little bit extra, it does
:50:23. > :50:25.help. The national minimum wage is currently �6.19 an hour. The living
:50:25. > :50:30.wage, set annually by an independent panel, is �7.20. That
:50:30. > :50:33.equates to annual salary rising from around �12,000 to �14,000.
:50:33. > :50:37.Labour-controlled Manchester was the first council to introduce a
:50:37. > :50:47.living wage three years ago. This week it agreed on a figure of �7.15
:50:47. > :50:50.
:50:50. > :50:54.per hour. It will cost us �200,000 a year, out of a �580 million
:50:54. > :50:57.budget is not a huge amount and is worthwhile. Do you understand that
:50:58. > :51:02.people said there are better things to spend money on? Were think we
:51:02. > :51:06.get the benefit for the money we spend. Our turnover in our staff
:51:06. > :51:09.has halved since we introduced the Manchester minimum wage. A few
:51:09. > :51:15.miles away, yet in some ways worlds away, Tory-run Trafford is planning
:51:15. > :51:20.to adopt a living wage from April. I don't care whose idea it is as
:51:20. > :51:23.long as we are able to support ourselves. So you are happy to
:51:24. > :51:28.implement it with the Labour Party? I want to make sure we reward our
:51:28. > :51:33.staff. I think it is going to have poll's -- positive benefits for
:51:33. > :51:39.Trafford and I am not political about discarding something because
:51:39. > :51:49.it might have come from what is viewed as a Labour idea. No it's
:51:49. > :51:53.
:51:53. > :51:57.introduced by -- let's introduce economic theory. There was problems
:51:57. > :52:01.about direct benefit to a local economy from will be spending.
:52:01. > :52:05.Research shows that those on lower incomes will spend a higher
:52:05. > :52:10.proportion of money locally, so the theory goes, pay more and that many
:52:10. > :52:14.crinkles up to small businesses. would expect it would grow up to
:52:14. > :52:16.other parts of the public sector and I think I have already heard
:52:16. > :52:19.conversations in the business sector about the possibilities of
:52:19. > :52:25.going further than the minimum wage. The Manchester based think-tank is
:52:25. > :52:30.in favour of the living wage but admits there are downsides.
:52:30. > :52:35.Businesses would say that this was more expenditure. There is an
:52:35. > :52:38.argument to said that if businesses were to go down this red that it
:52:38. > :52:46.would increase the amount of the legal employment because less
:52:46. > :52:51.people would be paying people legally. Ed Ben Barnes is it is
:52:51. > :52:56.important. David Cameron said it is an idea whose time has come. For
:52:57. > :53:01.Glenys, it means every day life is easier to swallow.
:53:01. > :53:09.We now have Professor Damien grim shot from Manchester business
:53:09. > :53:13.School. What is the motivation? There are multiple variations of
:53:13. > :53:17.motivation. The research we have completed shows one important
:53:17. > :53:21.motivation is that after a series of job cuts in local councils,
:53:21. > :53:25.managers are seeing that many of these low-paid workers are working
:53:25. > :53:29.much harder giving the same amount of services, but with fewer
:53:29. > :53:34.colleagues to share the work. They think a living wage is a good
:53:34. > :53:40.reward. Another reason is that local councils are looking to their
:53:40. > :53:48.locality, seeing higher rates of poverty, especially among the
:53:48. > :53:52.workforce, and we have heard about the trickle of theory. You give
:53:52. > :53:59.poorer people more money and that supports local business, does that
:53:59. > :54:03.work in reality? Is that a theory that works? It is complicated. It
:54:03. > :54:13.depends. What happens when somebody receives a living wage is that
:54:13. > :54:14.
:54:14. > :54:19.there Perry is made up from the base rate to �7.20, outside London.
:54:19. > :54:24.It depends also whether you receive tax credits. Tax credits reduce as
:54:24. > :54:28.the which goes up. It is good news for the Treasury. There is no
:54:28. > :54:31.immediate impact on household. A lot of the local government
:54:31. > :54:34.workforce are women are back -- in part-time jobs suit will not
:54:34. > :54:39.necessarily receive tax credits and they will have a significant
:54:39. > :54:45.increase. Research shows that the lower the income, the more they
:54:45. > :54:49.spend. Are you clear that this has big benefits? Of course. We have to
:54:49. > :54:54.move away to a high quality wage economy and a living wage economy.
:54:54. > :54:59.The way to do that is get employers to be more family friendly, so to
:54:59. > :55:05.speak. Let's see more employers giving child care and more
:55:05. > :55:09.employers are looking at subsidising meals. Does it suggest
:55:09. > :55:13.that the minimum wage is to know? In it does, but the minimum wage is
:55:13. > :55:18.quite formulaic. The government puts down the formula and there is
:55:18. > :55:28.a procedure. When the Labour government introduced a minimum
:55:28. > :55:34.wage, their work workers paid �1.50. It was a big step forward. To be at
:55:34. > :55:39.�6.19, the minimum wage now, is a big step forwards. The working
:55:39. > :55:43.living wage offered at Preston council and Trafford Council of
:55:43. > :55:46.�7.20 is an even bigger step forward. There -- they are not good
:55:46. > :55:51.wages but better than previously. Do you think we government should
:55:51. > :55:56.move the minimum wage are birds? The introduction of the living wage,
:55:56. > :56:02.taken on voluntarily across the country, and one of the main people
:56:02. > :56:07.making progress is Boris Johnson, who has signed up 250 companies in
:56:07. > :56:12.the city, including banks and law firms, it is an idea whose time has
:56:12. > :56:17.come and is usually welcome. What I am worried about are those people
:56:17. > :56:21.who are not getting a living wage, on the minimum wage. The Institute
:56:21. > :56:26.for low pay is said that if the minimum wage was to increase
:56:26. > :56:31.significantly, it would immediately increase unemployment. At a time
:56:31. > :56:34.when we have unemployment falling, a welcome move in the unemployment
:56:34. > :56:41.rate, I do not think this is a time to significantly put up the minimum
:56:41. > :56:46.wage but a living wage is welcome, and as many companies have done
:56:46. > :56:50.this across the North West. affordable is it? There are many
:56:50. > :56:57.American stories of living wages, because they are far more prevalent
:56:57. > :57:01.in America than in Britain. Those studies by economists, especially
:57:01. > :57:07.in California, show that when you look up the benefits to paying
:57:07. > :57:15.minimum wage, it at ways the cost. The benefits I am thinking of our
:57:15. > :57:19.livings -- savings in recruitment because staff turnover goes down.
:57:19. > :57:23.It has been trapped in a number of councils we have visited.
:57:23. > :57:27.Manchester council has done an analysis of what happened to staff
:57:27. > :57:32.turnover on low-paid occupations when they brought up the wage. This
:57:32. > :57:36.needs to be done so that you can track it costs against the benefits,
:57:36. > :57:41.which are immediate and over a long term. You also bring and instil
:57:41. > :57:44.commitment and loyalty among workers. Do you think about what
:57:44. > :57:51.Jake was talking about, in terms of the private sector and putting
:57:51. > :57:57.pressure on them, is that something we will see? The private sector
:57:57. > :58:00.low-wage market is a funny animal. Too many employers think the
:58:01. > :58:09.national minimum wage is it going rate of employment and it is not,
:58:09. > :58:13.it is to stop exports to Asian. It is not our rate of play. A third of
:58:13. > :58:21.employers in the cleaning pay minimum wage, but you need to
:58:21. > :58:22.reward skills. Thank you.. Here's the week's political news in
:58:22. > :58:25.60 seconds. The biggest ever independent
:58:25. > :58:27.investigation into police wrongdoing is to be carried out
:58:27. > :58:30.following the findings of the Hillsborough Independent Panel last
:58:30. > :58:35.month. Serving and former officers will be investigated over the
:58:35. > :58:38.deaths of 96 Liverpool fans. Don't dump it on us - anti-nuclear
:58:38. > :58:42.campaigners in Cumbria say any jobs boost produced by a waste site will
:58:42. > :58:46.be offset by the damage to the image of the Lake District. The
:58:46. > :58:49.council is considering its options. Life's a gas, or it could be in
:58:49. > :58:56.Lancashire, at least after the Chancellor George Osborne said he
:58:56. > :59:01.was going to look into tax breaks for fracking on the Feyld coast.
:59:01. > :59:03.that Britain is not left behind as gas prices tumble.
:59:03. > :59:05.Filming has begun on the first collaboration between Pinewood
:59:05. > :59:09.Shepperton Studios and the Isle of Man government. The Manx
:59:09. > :59:13.authorities paid �12 million for a stake in the home of the James Bond
:59:13. > :59:16.and Harry Potter films. And Alicia definitely wasn't off
:59:16. > :59:19.key but Manchester City Council is to publish a full report next week
:59:19. > :59:29.into the �400,000 it spent on putting a concert on by the
:59:29. > :59:31.
:59:31. > :59:36.American singer. Second appearance for Alicia Keys
:59:36. > :59:39.in our news. Let's talk about where we are politically after the party
:59:39. > :59:43.conferences. Do you think Labour is in a stronger position than when it
:59:43. > :59:48.went in? Without a doubt. Ed Miliband has stamped his authority
:59:48. > :59:52.on the party and become a lot more credible with the public. He did a
:59:52. > :59:56.fantastic speech, as most people agree. Will anyone have heard it?
:59:56. > :00:00.Her I'm sure they read about it in the newspapers on saw it on TV.
:00:00. > :00:05.David Cameron says he wants to spread privilege. Privilege, by
:00:05. > :00:14.nature, is for the few and not the many. I saw Jake Berry put a
:00:14. > :00:18.plodding up on television, respond to that? -- I saw Jake Berry
:00:18. > :00:22.applauding it. Speed king for 70 minutes with out notes is an
:00:22. > :00:25.achievement especially when you have nothing to say. He only
:00:25. > :00:29.mention the deficit for 30 seconds. A the biggest single issue facing
:00:29. > :00:34.the country. The first way of dealing with the problem is
:00:34. > :00:37.admitting you have a problem. you for being with us. Next week we