04/12/2011 The Andrew Marr Show

Good morning. Tough times for the Government ahead, as for the

country, so very important to hear some support of comments, which

takes us straight to the former Defence Secretary, Liam Fox, quoted

today saying an M3 friend told me they knew I was sorry to leave the

Cabot -- an MP friend told me they knew I was sorry to leave the

Cabinet but some people who did not trouble on the Titanic were sad to

be left behind. I am joined by the Sun columnist Jane Moore and

Jonathan Powell who was Tony Blair's cheaper staff through those

too much as Downing Street years. Europe's debt crisis looms large in

those papers. -- those to mulches Downing Street years. The Deputy

Prime Minister Nick Clegg is here to talk about the euro debt crisis.

What would Yvette Cooper's party be doing to help the economic

recovery? I will also be talking to her about policing.

Martin Scorsese will be talking to me about his new family film and

why, after 40 years at the top, he thinks 3D cinema is the next big

thing. And for everybody short of a bob or

two, a modern protest song from the Californian singer-songwriter Aloe

Blacc. A busy hour ahead. First, the news

with Louise Minchin. Good morning. The former Labour

Cabinet minister who reviewed public sector pensions for the

commission has called for even more radical reforms because of the

worsening economic outlook. Lord Hutton told Radio 4 that keeping

the system affordable would be even harder now that the growth

forecasts for the UK has been downgraded.

Last week thousands of public sector workers took to the streets,

angry about the Government's pension reforms. The Government

insists that the present system is not affordable. The unions argue

that the planned changes are unfair. Today, the Labour politician whose

ideas are at the heart of the plans has told the BBC that it is a

generous deal that will protect workers close to retirement. He

agreed with the warnings from some unions that the Government's

proposals could force large numbers of people on low or moderate in

comes to opt out of their pensions altogether. Lord Hutton also

expresses deeper uncertainty about the future. He says his own cess --

assessment about long-term sustainability were optimistic.

forecast has changed radically in the wrong direction. We cannot be

sure that the costs will fall over time and that we will get to a

sustainable balance. The unions are set to continue their negotiations

with the Government over the details. Lord Hutton says that

reforms to pensions should take place as soon as possible.

Patients upon to be confidential medical records could be shared

with drug companies under plans to be unveiled by David Cameron

tomorrow. The Prime Minister says that closer collaboration could

help the NHS target new drugs and save money. It is expected that the

plans will encounter strong opposition from privacy campaigners.

The Government insists that all necessary safeguards will be used

to protect personal details. The Russians are voting in

parliamentary elections which are expected to result in Vladimir

Putin's party being returned to power. Independent monitors have

complained of harassment and vote- rigging. Victory by Mr Putin's

party will pave the way for him to return as president in elections

next March. 45,000 Germans in the city of

Koblenz are leaving their homes today so that experts can defuse an

RAF bomb dropped during the Second World War. The two-ton device was

found in the River Rhine last week after a drop in water levels.

Two giant pandas from China will arrive in Scotland today it --

today to begin a new life at Edinburgh Zoo. The eight-year-old

pair, known as Sweetie and Sweetie, are on loan to the zoo and will go

on show to the public after they have settled into their specially

designed Enclosure. -- Sweetie and The Mail on Sunday's splash is that

horsemen are being told that if they take tips of more than �30

they could be jailed for bribery. Seems a bit strange to me.

Both the Observer and the Independent on Sunday are

interested in what is happening to the environment. The new Green

Alliance is attacking George Osborne. It also says that most

Britons believe that their children will have worse lives than them.

On the Independent, remember me, a picture of David Attenborough there.

The People has, that at 16. The Sunday Telegraph says that David

Cameron has had an opinion poll boost.

Jane Poland -- Jane Moore and Jonathan Powell, thank you for

joining it. Where will we start? There is only one story and that is

the economy. We have Mervyn King being criticised by certain people

in the City and in political parties for, as they see it, rather

overstepping the mark of his role. They are saying that in 1992 during

the exchange rate mechanism crisis Eddie George was not to be seen. He

was getting his BOP. -- kept in his box. It is a problem, isn't it? The

top man in the Bank of England, on the one hand, is trying to increase

confidence with quantitative easing, but if you are also saying that

things are terrible, it undermines your position. It says here, the

role of the Governor is to provide guidance, not to reassure the

markets. I think it is his job to tell us the truth. Jonathan. For me,

the most important story affecting Britain is the story about the euro.

We believe that tomorrow the Germans and the French are going to

unveil what the solution to the euro is, of which I think will be

to go ahead with fiscal union, but we will be excluded. It will be the

members of your rope -- the euro who go ahead and do that. We will

be excluded from these negotiations. It doesn't seem possible that we

will be able -- that they will be able to put in place Fiscal Union

controlling national budget without a treaty, which will have big

implications. They could conceivably go ahead with the

treaty with just the 17 members of the euro. They are bound to start

with an inter-governmental conference and try to bring Britain

and the others into it. Indian, the Germans and the French will get

what they want. With a economy not be worse if we had been in the

Rock? You may be better off if you were inside in the long term. We

are looking at the short-term consequences.

A meanwhile, on the High Street, is it Morrison's? Yes, but first, in

the Observer, the new pessimism. We had the Things Can Only Get Better

slogan years ago. Now it seems that things can only get worse. Parents

seem to think that their children will have it worse than they did.

was trying to remember the great Larkin poem, our most depressing

poet. Get out as early as you can, don't have any kids yourself. That

is the kind of mood of today's papers. You were paying attention

at school, when she? -- were you not? Most other countries are

optimistic, we're always pessimistic.

It is almost hysterical, the pessimism this morning. Where is

the stiff upper lip when you needed? You mentioned Morrison's.

For me, one of the biggest problems for future generations is that

Morrison's have set up a new store in Salford and they are saying that

they will only employ local youngsters. Of the 210 staff who

will start work tomorrow, have left school without a single GCSE to

their name. Morrisons has had to send 150 of them back for basic

training skills on how to work - how to turn up on time, how to

maintain eye contact with people, they have poor English, poor maths.

They have spent 12 years in the education system. This is

depressing. There was a story recently interviewing kids who

would not take jobs in hospitality because they were all waiting to be

on X Factor or to be rock stars. Jonathan, you next story. Yes, in

the Independent, 1 Iran. There have been lots of stories recently about

the invasion of Iran. The rule of thumb that I work and there is that

the more people talk about it the less likely it is to happen. The

interesting thing in Iran will be regime change. If rebels succeed in

getting rid of Bashar al-Assad in Syria, Iran will be next. If the

methods do not work in Syria, they will not work in Iran.

You are also the New Machiavelli, according to your new book.

According to your book, Tony Blair was at one point saying, we're

really going to show Iran what is what. It is very difficult to make

threats unless you have an or else. In the end, we managed to negotiate

with them, but it is often very difficult with the Iranians.

Negotiating with them is absolute hell. I can imagine.

Which, the consumer or organisation, has said that people should haggle

when the shopping at Christmas. I am always very British, I must pay

what is on the label, I cannot bear to haggle. I am married to a high

dollar, he has always haggled. -- haggler.

We went to buy a car and he asked them how business was. They said it

was not good and he said, you will not want me to leave without buying

a car. He got me at �3,000 discount. Can we do this at market stalls?

Ask for a deal on bananas? shopper quoted in here says he has

done just that. Jonathan, you have a story about a

man I think you have dealt with for many years. Yes, Gus O'Donnell. He

is retiring. He was, for me, the first modern Cabinet Secretary we

had. Many Cabinet secretaries were reminiscent of the past. He came

into reform things. He was a football playing south London boy,

he is not a toff in the old sense. He was focused on trying to change

things. I was a civil servant for 16 years. They are very good but

they are rather too set in the ways. Gus O'Donnell was someone who tried

to change that. Do you think that ethos will stay? There will be a

different guy who is the head of the Civil Service. He should have a

different attitude and will play that will change things.

Gus O'Donnell helped to keep us out of the euro, of course. We thought

he was going to help us get into the euro. He came at one stage and

said, you have a choice - you can join the euro or leisure chance. In

my view, we made the wrong choice. Jane. Kate Middleton has a lot of

things to deal with now that she is the Duchess of Cambridge and the

future Queen, but this is a massive dilemma. Her hairdresser is leaving

the salon that she frequents. She has the rather tricky decision to

make off going with a man who does her hair are staying with the salon.

I can see you glazing over. parallels with the last days of

Tony Blair are incredible. women, leaving your hairdresser is

literally like divorcing your husband. It is not the done thing.

I know women who say, I do not like the way they do my hair about --

any more, I want to leave, so my heart goes out to her.

Anything to cheer us up? The Mrs Thatcher film. Meryl Streep playing

Mrs Thatcher and all her friends are getting worried about it. But

it is a wonderful idea to make a film about Mrs Thatcher. According

to her biographer, he was worried there is a scene that shows her

talking to some of her Cabinet Cabinet Ministers and says there is

no way she would have done that. My brother worked for Mrs Thatcher and

she used to cook him breakfast every morning and she would never

reveal herself. We love the pandas, Sunshine and

Sweetie, are they ready for the Scottish weather I ask myself?

There is a strange story, Scotland on Sunday saying they have been

given diplomatic imcommunity? they can park on a double yellow? I

do love that. That's so sweet. They are charming, aren't they pandas.

They will soon be depressed with the weather.

Still on a gloomy day ght papers -- in the papers, pandas not a bad

item to finish and the weather down in the soft south, it wasn't really

properly cold when I got up this morning, but in the north of

England it would have been different. Let's hear the best or

different. Let's hear the best or worst from Chris Fawkes.

We have already had some snow fall in Edinburgh Edinburgh Zoo. For

Northern Ireland and England and Wales the showers are falling as

rain at the moment except for the highest hills across Northern

England and Northern Ireland. Through the rest of the day, there

will be be lots more snow showers coming in across Scotland. We have

had travel problems on the mijor routes. -- major routes. It is

worth checking with the travel news before you head outside. Across

England and Wales, there is more cloud around. A cooler day

nationwide. Overnight, it turns snowy and icy

for Scotland with difficult travelling conditions overnight and

the snow showers will turn up over high ground in Northern Ireland and

across north-west England too. But the focus of the really snowy

weather will be across the West of Scotland where the the Met Office

continues to have a weather warning out in force. By tomorrow morning,

we are expecting accumulations of snow. 5 to 10 centimetres on roads

above 200 meters. Travel disruption is a possibility. Another place

that could be hit with snow fall will be across the Pennine routes.

Bear that in mind. Elsewhere it turns colder.

The best of the sunshine across eastern areas, but the temperatures

at just 7 Celsius, it will feel Later this week Labour will launch

its independent policing review to be conducted by Lord Stevens.

Yvette Cooper says Labour would limit police cuts to 10% rather

than the 20% that the Government is insisting on. Yvette Cooper joins

me now. Good morning, Andrew.

Let's start off with this policing review. Lord Stevens was known as

the coppers' copper, he wrote a clum for the News of the World --

column for the News of the World. Is this not going to be too close

to the policing establishment which is a formidable lobby in this

country? The review is led by Lord Stevens who has a formidable

reputation in policek, but will -- policing, but will involve senior

police officers from abroad and people from with a background in

business, in the judiciary, in the community action as well. So a

whole series of different people involved in this and also senior

criminalolgists. It is important that we build a consensus around

the future of policing because at the moment what we have got is not

just a serious cuts that are taking place to 16,000 officers being lost,

but also a kind of chaos and confusion around policing reform,

cuts to policing powers that's making matters worse.

You say that, but the idea of elected commissioners which Labour

is against will seem to many people reasonable, rather a good idea,

give people a bit more say, a bit more direct say in policing in

their area by electing somebody in charge of policing? We said we

thought the money that would go into the election of police and

crime commissioners next year would be better spent on additional

police officers in an Olympic year. The big question is how do you make

sure that police are responding to the local communities? On every

estate across the country and every areaks and not simply to somebody

who will be elected for a rather large area. So I think there are a

series of questions of accountability.

A voice for those people, isn't that what they are for? You have

got those changes taking place. Big questions about the checks and

balances on those people, but at time when there are growing

national threats and growing national pressures and serious

local problems, the need to respond to local communities and what you

are not getting from the Government is any vision. It is just a chaotic

series of con confused measures. It is 50 years since we had the last

Royal Commission at a time when police didn't have radios. It is

time to have an overall vision for policing, for the future that looks

at the serious challenges they are going to face for the 21st century

rather than a mess that we're getting a the moment.

But given that you have got, you know, an eminent former policeman

who always spoke up for the police, you have got other policemen as

well on this commission, it is not going to be too cosy, is it? It

seems to me that you know if you look at membership of the

commission, the fact that you have set it up, you are against the full

measure of cuts the police are facing, there is a danger here of

you just getting the answers you want from people who are not going

to challenge the culture of the police as it is now? Well, there is

a series of people involved in this hol be providing all kinds of

challenges, but you know, what you have got to remember is at a time

when 16,000 police officers are being cut, we have got you know,

police powers being cut and the chaos of changes. The risk at the

moment is the police just drawing their horns. Everybody else draws

in their horns and the work to prevent crime going up disappears.

All the work that helped deliver us a 40% reduction in crime over the

last 13 or 14 years again disappears and what you see is big

risks being taken with policing. Never forget we saw the problems in

the summer where the police lost control of the streets for several

days and didn't have the ability to keep up with the social networks

and the media that was escalating the criminality that we saw then.

You know, the police have got to be able to respond to the new changes.

I think we need to work with the police to do it. At the moment, the

Government's working against the police and we have a situation

where one senior police officer said to me, "We won't take risks.

We won't go out on a limb because we know the politicians and the

ministers won't won't back us if they do." The police sometimes need

to take risks and not taking risks they will push crime back up by

making it harder for the the police to do their job.

Theresa May said she is removing bubg October crassy and --

bureaucracy and allowing them to do their job better? We have seen

areas where they are increasing bureaucracy. I think there is a lot

further we should go including changing legislation, but they have

got to have the support they need, you know, taking away the powers to

use DNA or ASBOs is a mad thing to If this is not a cosy process and

if you will say hard truths to the police, where would you make the

cuts in the policing service? say we think 12% would be

sustainable and that was based on work Alan Johnson had done before

the election. He identified areas around procurement, around the way

the police make their contracts that you could save �400 million

there. �500 million to be saved in different processes in ways and

doing things and the independent inspectorate came up with different

figures they thought you could raise 12%, but without affecting

front-line services, without cutting the number of police

officers on the streets. Less turn to the economy generally.

Another poll in one of the papers today showing Labour falling behind

the Conservatives at this dire time economically and a general sense

interest a lot of polling at the moment that people just don't think

the Labour Party is tough enough for tough times times. Not prepared

to take tough decisions. Your rhetoric is about nasty Government

making too many cuts, cutting back here and cutting back there.

People believe that in these tough times hard decisions, hard cuts

have to be described and they are not hearing that kind of language

from you and they are not hearing the specifics from you? Well, you

are right that tough decisions have to be made and that includes saying

things and being prepared to say things when they are the truth and

in fact, the Labour Party has been saying for a long time, the

Government is cutting too far too fast, Plan A is not working and it

is not going to work, what we saw last week was the evidence that it

isn't working and fact, we are seeing borrowing coming in much

higher to pay the bills a failure, not because they haven't got their

act together on tax and spending, but because you have got a �29

billion increase in the Social Security Bill, well that is because

you have got more people on the dole, that's costing you more for

the wrong things, not for the right things.

Realistically over the last couple of years no Government could have

could have grown with this significant to a significant extent,

could they? Therefore Labour's plans to cut back less, which would

amount I think to �300 billion of extra borrowing by the end of this

Parliament, would take the country much, much further towards losing

its triple A position and losing its rating in the world? You would

be unwise to use the Conservatives figures and to follow their

argument. Let's be clear what we say we would do, we set out a plan

for jobs and growth for this Pre- Budget Report and the economy was

growing at the time of the election. We had unemployment coming down. We

had youth unemployment coming douchblet you are right, there are

additional global problems in Europe, but that's also why we said

in the face of a global storm, you don't just rip out the foundations

of the house. You need to support the economy, get it through. If you

don't have the economy growing, if more people are on the dole, you

know, if businesses aren't growing, it ends up costing you more. It is

the same with policing, if you end up with crime going up, we end up

spending more and we end up paying for the compensation for crime

rather than preventing it happening. You upbraid me about using the

Conservative figures. What is the figures then? Alistair Darling set

out the figures. What are the figures.

What Alistair Darling set out the borrow figures looked similar to

what George Osborne set out, but we would have had higher growth. But

what you have got to do is respond to the new circumstances and the

new pressures we are facing. I am going to move on. First of all,

the eurozone, an important meeting come up between the German and

French leaders. If they don't come through with a credible answer how

serious is that going fob the British economy? It is serious. The

immediate thing they need to do is get the European Central Bank

stepping in behind countries like it tale taly, if we don't have that

-- Italy, if we don't have that, we should be worried about the euro. I

am fearful they are going to put together a deal that actually risks

not solving the problems, it is not just about the European Central

Bank, they need a plan for growth and jobs across Europe and there is

no sign of that at the moment either.

Turning from growth and jobs to pensions. A little embarrassing

that your former colleague, Lord Hutton is saying that the offer to

the public sector unions on pensions is credible and that given

you know, the economic position, the Government is speaking right?

Well, I I I haven't seen everything John Hutton was saying today. He

was concerned about the fact that the Government hasn't followed his

approach and instead has introduce this 3% increase for all public

sector workers. That's not something that was in Lord Hutton's

report and instead... I think he thought that report was too

optimistic. First of all what the Government is

doing is not what the approach that's in Lord Hutton's report.

There is this additional cost which risks making the public sector

pension schemes unsustainable. There is a wider issue about how

optimistic can we be about the economy? My fears is what the

Government is going is making pessimism a self fulfilling

prophecy because they are cutting fast.

Of all the great American directors who came of age in the golden age

of 1970s cinema, Martin Scorsese is the most revered. No-one captured

men on the edge in the way that he did in Taxi Driver, Raging Bull and

The Departed. His new film, Hugo, is a far cry from the mean streets

of New York or the casinos of Vegas. It is based on a best-selling

children's book and this film The 3-D. It stars Ben Kingsley and

Sasha Baron Cohen and is set in a beautifully re created 1920s Paris.

Scorsese sees it as a homage to the early pioneers of cinema, such as

Charlie Chaplin. What they did at that time,

technically, was amazing. There were references to that through

Sasha Baron Cohen's character. But Merseyside! Move aside!

This is quite a departure for you. The mean streets of 1920s Paris is

not what we expect. I know! The due pick up this book and think,

yes! It is the imagination of a child. The sense of wonder and the

sense of joy and terror? Yes, and playing with them, which is

basically what we do. Making movies, we are playing. Children's minds

are open. To be around that, it is great. I saw the book and I said,

this is a natural. They did say to me at the studio, Martin, make a

child -- make a full match your child could see just for once. --

You have these fantastic -- this fantastic body of work and you are

taught in colleges and schools now. I wanted to us, what is your

favourite Martin Scorsese film? Or is it like a rock star who says,

the one that I just made. Probably. I guess I just go back to the roots

of it. The film that I showed a little bit of where Wright came

from was the documentary I made of my mother and father, called

Italian-American. As with many of your films, the

music is terribly important. wanted more but we couldn't afford

it. You made this remarkable documentary, Shine at Light, which

allows you to get really close to the Rolling Stones. We went with 12

cameras and then when we started to film them, Bob said, we need eight

more. Just to keep them in focus. To capture them in concert, and

also the aspect off, of what is rock music at this point in time?

Particularly for the pioneers and the ones who established what we

know as rock music, is it only meant for a certain age group? The

four-man -- the phenomenon of older rock stars is interesting.

That leads me to Bob Dylan. He is the most enigmatic of them all.

Tell me a little bit about working with Bob. Jeff Rosen was the

producer. He said I have some footage with Bob. He did an

interview with Bob Dylan that lasted 10 hours. Bob Totton, I am

going to do this once and never again. -- Bob told him. He said to

me, do you think you can make something of it? My problem was the

freedom to make something of it. I admire his work so much and I am

not interested in the negative aspect of it. I am interested in

how he managed to stay on his own course.

In taking all the elements that I've ever known to make wide

sweeping statements that contains a general lessons of the spirit of

the Times, I think I have managed to do that. I thought that I needed

to press on and get as far into it as I could.

#the answer is blowing in the wind. Sometimes you seem more interested

in music. Or as interested in music. You made a film about the blues.

worked on a film with Eric Clapton called Nothing But The Blues. I had

some footage of the original Mississippi Delta blues, Chicago

Do you see yourself as a kind of historian and novelist of the

American story? You're telling a lot of the American story, one

where another. I find that the obsession is there that compels me

to tell these stories, particularly through the music. Music was

immediate. My brother played guitar, we lived in tenements. We cannot

even afford a still camera so there was no question of making movies.

Music was something you could do. I could not play, my father could

play. My mother would sing while she was cleaning up the house and

washing dishes. In America, there was a different thing at that time

in the late 40s where there was lots of different types of music.

It was not cut up into genres were know. I hear you're thinking of

making a movie about Frank Sinatra, possibly with Leonardo DiCaprio and

possibly in 3-D? Yes. I think 3-D is a good element in telling

stories. I think anything can work in 3-D. What excites you about it?

In a sense, the way that I perceive you right now, you are in space.

Even behind the ears? Yes. It is like a sculpture, in a way.

Still, as from the beginning, it is about getting the audience into the

cinema to surprise them? Yes. That can be emotional, too. It might be

the emotional impact of the last two lines of Brief Encounter.

Martin Scorsese, thank you very much indeed.

And if you're wondering what the closing lines of Brief Encounter

are, take a look at our website, where there is also a longer

version of that interview. I am joined by Deputy Prime

Minister Nick Clegg. Good morning. Good morning.

Looking through the papers, since the Autumn Statement, the overall

consensual position is that the economy is just going to go through

a grim, frozen period for years ahead. It changes the all mood of

politics in the country. It has been a tough week because we have

all had to recognise and reconcile ourselves to the fact that, as the

Office for Budget Responsibility said, than not that we took in 2008

when the banking system blew up was much more serious than we even

thought then, that it is going to take longer to recover from that,

and then that a number of further things have happened that have

delivered blows to the economy, notably energy prices and inflation

going up over the last year. That has meant that people have suddenly

thought, gosh, the time of recovery is going to be further away than we

thought. That, of course, creates anxiety, which is why a think it is

so important, as a country, but we do not allow ourselves to become

divided. It is not private sector versus public sector, north versus

south. We, as a government, need to redouble our efforts to show that

what we're doing is being done as fairly as possible. Otherwise we

will not get everyone to support these difficult decisions.

You mention "as fairly as possible", there has been great criticism of

the effect of the Autumn Statement on poor families. It has been

suggested that 100,000 people will be moved into poverty as a result

of the measures taken and that the people worst-affected are those on

low in comes. I do not want to go into the statistics. The way that

some of them are calculated is a bit ropey. The Child poverty figure

is relative. It means that, if you help pensioners, as we are, that

statistically that means that you're not helping children, which

is a ludicrous thing to say. It does not take into account many of

the other things we're doing that make a big difference. We're going

to double to 260,000 the number of toddlers who will get 15 hours of

free child care for the first time ever. Why is that important?

Because we know that if you give a toddler that, you're giving them

the best possible start. Here you are now in a situation where, if

you're going to give to some people, you have to take from others. You

give to toddlers but you have taken away what many people were relying,

which was an uprating of child benefit? We are increasing child

tax credit by �130. Reg remember, on that one in particular, that

helps families who are in work or out of work. The above inflation

promise that people thought had been made has been taken away.

what we have done is that we are freezing two components of the

working tax credit. We have froze and other parts for three years up

until last year. In cash terms, no- one loses out. But if you factor in

inflation they do. One of the components is worth around �2,000

and it will remain exactly at that value next year. This is important

- I make no-one apology at all for us having to make difficult choices

and, in those choices, prioritise in the poorest. The fear and

anxiety of unemployment is clearly greater now than it has been for a

very long period of time. Many people know of other people -

cousins, old relatives, neighbours - who have lost their jobs and they

are worried about their own job security was I think it is right

for the government might to say, if you have lost your job through no

fault of your own you will have benefits that are fully up rated by

the inflation, over 5%, in order to get you back into work. We are also

protecting children through the full uprating of the tax credit.

Is it not true that that uprating came about because the Liberal

Democrats insisted on it? I read post-mortems about who said what.

In coalition governments you have constant discussions and debates

and so on. You were tabling this as one of your successes, were you

not? When we are faced with invidious choices - and there are

no easy choices left to this Government - you have to be guided

by a basic sense of what is right for the poorest and the most

tolerable. That is what we have done by operating the benefits for

the poorest and the most tolerable. In terms of the future, is Danny

Alexander Wright when he says that you will have to going to the next

election with another �30 billion of spending cuts? This is the

interesting thing politically - before this week there was only one

party, the Labour Party, that was advocating more savings after the

next general election. Now all three parties are moving to a

position where we have to explain to the British people where and how

we make additional savings after the next election. We have been

very up front with people, as a party and the government. The

details about how you do it fairly and how you mix between taxing and

spending, all of that is open to debate.

We are talking about a lost decade and compelling as with Japan. If

your party is going to go into the next election talking about �30

billion of cuts, like the conserve this, you are effectively going to

be in lockstep. You will have to see this through as a coalition

government. Tony Blair and Gordon Brown subscribed to John Major's

spending plans in 1997. No-one said they were identical. We agree on

the overall need to live within our means as a country. The Liberal

Democrats will be independent and will be very keen to push our

uniqueness and that blend that we represent in British politics. It

is about how you arrive at the overall figures. There will be lots

of general debate up to and through the general election.

A lot of people cannot see any difference between you and the

Conservatives. You said, we do not going to that. -- broke into that.

I said that we wanted to protect the vulnerable, deliver run the

increased entitlement to toddlers as of everyone knows I have been

The centrepiece of tax policy to lift more people out of paying

income tax has come from the front page of the of the Liberal Democrat

manifesto of last year. At the time of the next election

you would be able to go into an election with a distintively

different plan for the economy than the Conservatives after five years

of working closely together? Let me give you two examples. I'm not

going to start writing manifestoes four years in advance. It is clear

for instance if we are going to try and make the sums add up, the

Liberal Democrats, as a party, will be less inclined to spend a lot of

money on replacing the Trident system. We have been open about

that. I believe and have done for a long time, that we should be asking

millionaire pensioners to perhaps make a little sacrifice on their

free TV licence or their free bus passes. These are things where we

don't agree as a Government right now, but where those arguments will

play out in the years ahead. That's the natural battleground of British

politics. To be upfront with people and to agree what the savings need

to be, but to have the key debate about who are the winners and who

are the losers. Winners and losers then at a time

when people on average earnings are having a really, really tough time.

Yes. Is it fair that for instance last

year FT 100 executives were getting 49% average increase in what they

were taking home? Executive pay remains something which appears to

a lot of people out of control? agree with you. The revelation that

top executives of some of our top companies are receiving up to 50%

pay increases even though their companies weren't doing any better

was a real slap in the face for millions of people in this country

who are struggling to make ends meet. We need to call time on

excessive and irresponsible behaviour in the public sector just

as we have been... In the private sector? In the private sector, yes.

Just as we have tough on unaffordable things in the public

sector, we need to get tough on irresponsible behaviour. What do I

mean by that? I don't mean the Government starts going around

setting pay rates in the private sector. That's not what I mean. I

believe people should be well paid if they succeed. What I abhor is

people who get paid bucket loads of cash in difficult times for failure.

? Is there any way politicians can intervene? We have consulted. We

are going to come forward with proposals next month and the things

we're looking at is for instance, to break open this closed shop of

remuneration committees which seems to be an old boys... A remuneration

committee, I give you an increase? Can you make companies stop that?

Of course, you can. We have got plenty of means which which we can

make sure the remoney rakes committees -- remuneration

committees are opened up. Share Holders should be given a greater

say. What about employees? Well, we have

consulted on whether there is a case for putting employees on the

remuneration committees. We are consulting on whether you should

publish information on the ratio between those, the pay of top

executives and the average pay. Will Hutton argued that it

shouldn't be more than 20 times? There was An independent high Pay

Commission which reported and they did extremely good work. And we are

if not in agreement with all of what they said, in agreement with

many of the points they have made and they have suggested there

should be more transparency in relationship for the pay at those

at the top and those in the boiler room in these companies. These are

tough times for everybody whether in the public or private sector.

Whether you are a nurse or factory worker or a Taxi Driver or a civil

servant with' mead to make sure -- need to make sure that people in

the public sector don't feel they are doing all the heavy lifting.

People watching will understand the politics of it, but they will want

to know are you prepared for instance to bring forward

legislation early in the New Year to make sure these things happen?

If legislation is require, of course, we will do so. As I say,

there is no question of this Government and it would be

ridiculous if we were to suggest that of setting pay, but greater

transparency, less of a closed shop in the remuneration committees,

greater openness and accountability by which executives are are paid so

it is related to what they actually do and succeed in doing.

We are short of time. Let me move on to the eurozone. Angela Merkel

is right when she says there has to be fiscal union if the eurozone is

going to hold together? She is right when she says the design of

the union as it is is lopsided and needs to be changed. It has to mean

a treaty change? I have always been outspoken against a great big

treaty change. We open the whole Pandora's box and people say they

want this change and that change. I can't see how the treaty cannot

be changed? There are quite a lot of provisions in the treaty as it

exists which this is the great tragedy by the way, I was a

supporter of our entry into the euro many, many years back, and I

was a supporter because I believed what was written in the treaty

about the rules that should have been respected by the countries...

And you have changed your mind? What I have responded to clearly is

the fact that those rules where not adhered to. That's the tragedy and

bluntly it was the French and German governments back in 2005 who

signalled there was going to be a free for for fall that the rules

shouldn't be adhered to. If the rules had been stuck to, we

wouldn't be in the trouble we are in and therefore it is right that

they should be strengthened. I would like to see those rules

strength wnd a minimum amount of institutional fuss because if you

open this whole thing up into a naval gazing exercise, that would

be damaging to the urgent need to make sure we fix things in the

eurozone. It would trigger a referendum in

this country about our relationship with Europe. My next question is

could the coalition survive a referendum on our relationship with

Europe? I don't think there needs to be a referendum.

The Prime Minister promised one. If there is a treaty change, he

promised a referendum? It will only take place if there is a surrender

of sovereigntry. I thought any substantial treaty

change would trigger a referendum? No, the test which we have

legislated on if we the United Kingdom give up more sovereigntry

to the European Union. The changes which are now required are changes

which are required in the euro 17. Briefly, I am sorry because we are

coming to the end of this. In no agreement is reached next weekend,

how serious is that for the British economy and for the euro? Is it the

end for the euro? It is grave if no agreement is reached. Perhaps not

every T crossed and every I dotted, but we need to have a clear road

map if you like towards the stabilisation, and strengthening of

the eurozone. Let's not forget, whatever your views on Europe,

three million people in our country depend on their jobs on our role in

the European Union. That's not not something we should give up lightly.

The deptry Prime Minister announced the Government will bring forward

proposals to limit executive pay increases. He said excessive

boardroom pay was a slap in the face to millions of families

struggling to get by. He said the Government was prepared toe

legislate to make committees who decide pay levels more open and

accountable. A former minister has called for

radical reforms now the outlook for the UK UK economic growth has has

been downgraded. Lord Hutton said the assumptions behind his report

may have been too optimistic. Yvette Cooper said asking people to

make higher contributions risks making the system unsustainable.

That's all for now. The next news on BBC One is at

midday. Back to you, Andrew.

Thank you. Nick Clegg is still with me. We are joined by the American

singer as long writer, Aloe Blacc. We are going to hear one of the

anthems for tough times. One of the things that I was amazed by when I

I was reading your biography, you worked for Ernest and young.

You were an accountant figure? worked in the business consulting

division of of Ernst and Young so I have been in the thick of the

corporate world. And that gave you the inspiration

for the song we're going to hear? Well, being made redundant gave me

inspiration! Yeah, for sure.

We are looking forward to it very much.

In the coalition Government Aloe can give me tips on how to reinvent

myself. What do you make of Lord Hutton's

remarks? He is stating the obvious. As circumstances are tough, it is

important we we get a good deal and I am glad he recognised what we put

forward is credible and reasonable. We will cut off now. If we don't

get agreement on the euro, that could be the end of the euro, some

MEPs are saying the same thing? There is no doubt the whole

foundation of the euro is skating on thin ice. We must protect

Britain's interests and particularly the integrity the

single market. Any reasonable person must wish the the French and

the Germans luck in sorting this out because it affects us. Join me

next week when I will be talking to David Attenborough, Jenny Agutter

and more. There will be music from Mick Hucknall. Until then we leave

you with Aloe Blacc performing I # I need a dollar dollar, a dollar

is what I need # Hey hey

# Well I need a dollar dollar, a dollar is what I need

# Hey hey # And I said I need a dollar dollar,

a dollar is what I need # And if I share with you my story,

would you share your dollar with me # Bad times are comin and I reap

what I don't sow # I had a job but the boss man let

me go # He said, "I'm sorry but I won't

be needing your help no more'" # I said, "Please mister boss man,

I need this job more than you know # But he gave me my last pay cheque

and he sent me on out the door # Well I need a dollar dollar, a

dollar is what I need # Hey hey

# Said I need a dollar dollar, a dollar is what I need

# Hey hey # And I need a dollar dollar, a

dollar is what I need # And if I share with you my story

would you share your dollar with me # Well I don't know if I'm walking

on solid ground # Cause everything around me is

crumbling down # And all I want is for someone to

help me # What in the world am I gonna to

do tomorrow # Is there someone whose dollar

that I can borrow # Who can help me take away my

sorrow # Maybe it's inside the bottle

I need a dollar, a dollar is what I need

# I said I need a dollar, that's what I need