08/01/2012 The Andrew Marr Show

Good morning, happy new year. Some of you may be wondering how to make

2012 a little more interesting. Well, there is advice Justine from

Joanna Lumley. I have a mobile phone, she says, which I keep

switched off at all times. I cannot stand it, it is a waste of a life.

I think that is very good. We could all start by giving the little

plastic monsters up for a day or two every week and living rather

than just texting. Then we could take it from there, worth a go.

Joining for the review of the Sunday newspapers, Ann Treneman,

from the Times, and Labour MP David Lammy.

So, 2012 and we are all in it together, despite horrible economic

forecasts. There are things that ought to bring people together, the

Diamond Jubilee and the Olympics for starters. But unemployment,

tightly squeezed incomes and the continued huge bonuses and salaries

for top executives do infuriate many people. Then there is the

question of which nation we keep together. Are the Scots finally

limbering up to leave the UK? For his first television interview of

the year, David Cameron joins me to talk about Britain and the year

ahead. Also, that new film about Margaret

Thatcher which follows the iron lady from her glory days to her

much diminished old age. David Cameron has said he is

uncomfortable about it. Meryl Streep talks about being Margaret

Thatcher. Then another study in power and the

loss of power, actor turned film director Ralph Fiennes talks about

his new, pumped-up, new version of Shakespeare's Coriolanus. And we

will have music from Nick Lowe. All that is coming up. First, the

news with Susanna Reid. David Cameron is promising to give

shareholders the right to veto executive pay packages. The move

comes against a background of mounting public anger over a large

salaries and bonuses paid to bosses of big companies.

It's a tale of two economy is. Ordinary workers in offices,

schools and shops whose wages have barely risen over the past decade.

On the other side, company directors whose pay has soared in

that time. The Prime Minister is set to do something about what he

describes as crony capitalism and the merry-go-round of directors

awarding each other. The Government hopes to re-establish the link

between pay and performance by forcing shareholders who own

companies to take more responsibility for director's pay

packages by making their boats on the issue binding. It also wants to

create more accountability by preventing CEOs from one company

deciding pay structures for bosses in another firm. Pay packages might

become more transparent. Currently it is difficult to decipher them,

bearing in mind future bonuses, pensions perks or share prices. The

City will argue that top bosses must get top pay packages in a

global market for talent, but it also knows that the days of massive

salaries for mediocre performance are numbered.

A nurse arrested on suspicion of tampering with medical records at

Stepping Hill Hospital in Stockport is now being questioned in relation

to the poisoning of patients last summer. Police say Victorino Chua

is being questioned about three murders and 18 counts of GBH.

The nurse was arrested on Thursday on suspicion of tampering with

medical records at Stepping Hill Hospital in Stockport. He is now

being questioned on suspicion of three counts of murder. The 46-

year-old, from Stockport, is also to be interviewed about 18 counts

of causing grievous bodily harm. Detectives are investigating the

deliberate contamination of products at the hospital between

June 1st and July 15th last year. It is understood there were 21

people who detectives believe have been poisoned. In a statement,

Greater Manchester's assistant chief constable, Terry Sweeney,

described the investigation as a difficult and complex piece of work.

Last month it was reported another nurse at a hospital, Rebecca

Leighton, had been dismissed. She had spent six weeks in prison

before charges were dropped. She did admit stealing drugs from the

hospital. A pedestrian has died after an

accident involving a police car in South Shields on Tyneside. The name

of the 52-year-old man has not been released. Two police officers were

taken to hospital, although their injuries are not thought to be

serious. Police investigating the suspected

racial abuse of an Oldham football on Friday have arrested a man. The

defender, Tom Adeyemi, broke down in tears during his club's tie

against Liverpool at Anfield. A 20- year-old man has been detained on

suspicion of a racially aggravated public-order offence.

That is all from me for now. I'll be back just before 10 o'clock.

Now up to the front pages. The Sunday Times is leading on a story,

illegals enter UK of passports for hire. That is from Greece. That is

from the reporter who used to be the top investigations guy at the

News of the World. The Sunday Telegraph has their Cameron into

view. Apology for to Roets Jaya that Ed balls, that is something he

said during the interview that he no doubt regrets. The Independent

on Sunday has done a special on race in Britain. Cameron to curb

fat-cat pay with people power, the Observer. Scotland on Sunday, a bid

to give exiles Scots in the UK a split vote. As promised, David

Lammy and Ann Treneman, welcome to you both. David, are we going to

start with the main political story of the day, the Observer and the

Sunday Telegraph have it. The interview? I think this is

obviously right centre stage over the next year. We have had a lot of

concentration on the undeserving poor, apparently, those that are

scrounging on welfare benefits. I think that has deeply concerned

most backbenchers in my party. Now, quite rightly, there is a focus on

the undeserving rich. I don't know what David Cameron is going to do,

but it is clear that a 49% rise in the pay of those in the FTSE 100,

at the top levels, very small increases, certainly not inflation,

for the poorest workers, that is unacceptable. Something does need

to be done. We could, conceivably, see some sort of agreement across

the House of Commons? It depends what David Cameron says, but this

is an area where all of the parties at least feel similarly outraged?

It is probably right to say that all of us agree there has to be

action. It is what is that action? Doing something about these

remuneration committees and companies, giving shareholders the

power, that is the key. You are all responsible, it could be said, for

letting this happen? It was during the New Labour years when we were

going to be filthy rich and it was all fine? I'm not going to deny

that we should have done a lot more in this area. Ann Treneman? I have

picked up Andrew Lansley's comment on this. I think the words, what is

he going to do about it, that is the big question. The parties are

not going to agree. David Cameron has had 18 months to do something

and there is nothing I can see is happening. We have all heard it

before. One or two years ago, the fat cats continued to get fat.

David Cameron needs to find a fat cat willing to be paraded, like Bob

Diamond down grading himself or something like that. Having just

seen The Iron Lady, its deeds, not words. Until now, his deeds have

not matched his words. And he's not going to say this morning, I bet!

Well, we will see. Let's turn to wear well remunerated fellow next.

We are talking of... You can't really call Tony Blair a fat hat,

he is sinewy. He works out. -- fat cat. But he is certainly well paid.

Well, Tony Blair, he is suddenly very rich. We don't know how rich.

His companies are apparently a complex web. How quickly they

learn! Nobody can understand it. Somebody has filed some company

reports. There is an unexplained �8 million in administrative

expenditure. That is a lot of photocopies! The mind boggles at

what this means. People talk about transparency, that is another thing

that David Cameron and everybody talks about. When you get

transparency, this is it. Administrative expenditure, �8

million. We would like more information, please. I mentioned

the Independent on Sunday's front page. That is after the Stephen

Lawrence verdicts, a lot of coverage of race relations in the

UK. The Independent has gone to town in a particularly impressive

way? I think they have done a great job. All of us expected this week

to have deep reflection of where the country is on race relations.

The truth is, it has been a peculiar week in which we have not

seen that. We've had a lot of concentration on the Diane Abbott

story and some of the other race stories involving football in and

around. Today we get some serious, considered pieces. The Independent

does really well profiling these Tim young men growing up in Eltham,

now, white and black, the serious issues that still exist. Huge

numbers of stabbings, an enormous amount of violence still happening.

More violence. Absolutely. You did a book on the outcome after the

riots and so on. Did what he discovered make you kind of angry?

Do you think there is warm conversation going on in places

like this and in Parliament and something else entirely happening

on the streets? In my book, I wanted to get behind the issues and

talk about what is happening in these families. What are the key

things we don't talk enough about? They awry issues with a lack of

fathers. I think they awry issues in popular cultures. Gross

materialism, stabbings, weird senses of masculinity in areas like

mine. Also, what people are saying that the top end. That is explored

in the book. The Independent, in profiling this young black boy, I

am four times more likely to be murdered, I think that highlights

the significant issues that exist for young men growing up in the

inner city. Your next story? Well, this is the Scottish referendum.

Apparently, maybe he can confirm or deny this, David Cameron is

deciding he might want to tell Scotland how and when they are

going to hold a referendum on independence. Free advice, from me,

don't go there! Don't even pick up the foam. No e-mails late at night,

leave it. I think the voters can figure it out for themselves.

Another subject to talk about later room, your next story, David?

got the story about the next high- speed rail link between London and

Birmingham. A number of MPs, mainly Conservative MPs, potentially, to

resign as a consequence of driving a huge railway track through their

constituencies. If the Government to go forward, this is a massive

decision on millions of pounds spent at a time when we have not

got public money. I have to say, as the MP for Tottenham, I would quite

like a rail link that got us to Stansted in less than the hour that

it does and a proper rail link to White Hart Lane, thank you very

much. There are real issues if they go forwards. We could have selected

a story about Ed Miliband, but your heart must sink when you pick up

the Sunday papers at the beginning of the new year and you see all of

these usually hostile pieces? it has been a tough week. But

oppositions always have tough weeks. Ed specialises in them! Does he

have to do better this year? We all have to do better than the Labour

party, frankly. We are going into a year when we need to define better,

what would look different and others? I have said that in my book.

All of us in leadership positions in the Labour Party need to do that.

I think Ed is unfairly taking flak. We have seen the Prime Minister,

saying the wrong thing. A lot of it is to do with energy. A sense that

there was real drive, he has to communicate that? A certain

electricity has to happen between a leader and the electorate? Yes, but

there is a period in which you are moving in a time of change, he has

to change his party and the country is changing. We are still three

years away from an election. That drive, as you get policies moving

forward, is where we are heading. think he needs to get more

electricity going. This whole issue of fat cats, that is his issue. And

we are not seeing him on it. We might be seeing David... He raised

it in September, its January! will hear more about it later on.

We have run at a time to do the silly stories we were going to do.

Maybe another time. Now on to the weather, after the gales and rain

it has been a quieter weekend. The temperature was actually summary in

morning -- London when I got up. Let's find out what the week ahead

Hello. I saw some daffodils out yesterday so something is not right.

The mild theme continues today. More in the way of cloud around.

The cloud is thick enough to give a fair bit of rain across northern

areas, especially Scotland but the rain easing down into northern

England this afternoon. Eastern Scotland by 3 o'clock this

afternoon could see something brighter before the day is done.

Western Scotland stays a grey. Grey and damp across northern England

but still quite mild. Further south and some bricks in the cloud. The

South and the Midlands into East Anglia and the south-east are doing

quite well. Temperatures up into double figures. Further west there

is more cloud and light rain and drizzle across Cornwall, Devon and

western Wales. Even some fog from time to time over the hills.

Northern Ireland is struggling in terms of brightness. A much

brighter day tomorrow across northern areas. Further south it

will be cloudy but still pretty mild. Generally it stays mild for

The actor Ralph Fiennes is well known for his work on stage and

screen in Schindler's List, the English Patient and as Harry

Potter's nemesis, Lord Voldemort. Now he has directed a film of

Shakespeare's Coriolanus. He stars in it as well. This new movie

version brings it bang up-to-date. This is Shakespeare as you have

probably never seen it before. I will be speaking to Ralph Fiennes

What's the matter? You dissent just rogues make yourself scabs. We have

every your good word. He that will give good words to me will flatter

beneath a pouring. What would you have, you KERS but like not peace

nor war, one fright Sue, the other makes you proud?

Fascinating watching that. A combination of Shakespearean

language and filmic techniques. There is lots of fast cutting and

the television appears and it feels very, very modern. You presumably

had to strip down the full text quite radically. I always felt that

Coriolanus which is a very provocative play deals with power

could be an exciting film that you would have to take away a lot of

dense text which I did with the writer John Logan. When you strip

that away you are left with some very potent lines. I love

Shakespeare in modern dress. I think it is a potent mix. And it

feels very appropriate for the current problems today, this play

because it has got the people, the rabble that Coriolanus himself

despises. I think Shakespeare, there is no other dramatist who

writes so brilliantly about power, politics and the people who hold

power and their essential fallibility. This play is always

relevant but particularly now. In the play you have a nation state in

a deep sense of economic uncertainty. Have into party

politics which are rapid and aggressive and the apparent --

perennial conflict. At the heart of it you have this extraordinary

mother-son relationship. All the strands of the story take you to

this conflict. Vanessa grew -- Vanessa Redgrave playing the mother.

The action scenes, the war scenes are very, very fast and loud and it

will remind a lot of people of the hurt locker. Indeed. I used the

cinematographer that I worked with. Coriolanus is a soldier. He is an

extreme figure. We understand him by his military background.

Shakespeare sets up the story with a battle. I wanted the battle to be

as real and frightening and confusing as I imagine a battle is.

Is about borders and states fighting each other. Interesting

that you filmed it in Belgrade. audience, I hope, can identify it

as being anywhere possibly but we shot it in Belgrade so inevitably

it has a sense of the recent Balkan conflict but it is not meant to be

the Balkans specifically. It could be anywhere today. It could be

Afghanistan. In fact, one of the inspirations for the border

conflict was the Russian Chechnya conflict of a few years back.

difficult to raise money for films these days. You managed to achieve

it for Coriolanus. You must have other ambitions for film directing?

I love directing. I was very lucky that I was surrounded by an amazing

cast like Vanessa Redgrave, Gerard Butler and Brian Cox. I had a lot

of steep learning curves, especially editing it but it is

hard to raise money. I had some wonderful producers who fought

tooth and nail to raise money at a time when no one was Russian

forward to make Coriolanus. have also played Lord Voldemort.

Everyone in politics looking at Harry Potter says Lord Mandelson.

Do you think they will look at Coriolanus and make that

identification? They may very well. Just a thought on the end of that

enormously long Harry Potter project, of course, hugely

successful. Is there a certain relief that it is all over and you

have got your nose back? I have got my nose bag which is a good thing!

I think it was an amazingly managed story by everyone concerned but

there was a point where it had to come to its final climax. There is

sadness by everyone. It was an extraordinary ride to be on but

there is a sense that we now have to leave it behind and move on.

Absolutely. Where better than Shakespeare? It is out in cinemas

on 20th January. Good luck with that. Thank you.

Meryl Streep is one of the most acclaimed actors working today as

well. She has been heaped with praise for her latest film in which

she plays Margaret Thatcher. The Iron Lady is controversial because

it depicts the former Prime Minister's life now - as a frail,

elderly woman struggling with mental decline and the loss of her

beloved husband, Denis. But there is no doubt that Meryl Streep's

performance is a tour de force. She had to age by 40 years during the

course of the movie, as the story is told through a series of

flashbacks. Are you saying you want to Prime Minister? This is my duty

and ambition. Where there is discord, may we

bring harmony. Shoulders back, tummies in.

Yes, the medicine is harsh but the patient requires it. Cowardice!

Meryl Streep, you get the call, will lead to Margaret Thatcher?

What do you think? What you know of her, to start with? I did not know

very much in the beginning. I was quite reductive in my assessment.

As a young woman, I remember her politics did not dovetail with mine

or my cohort. I remember in 1979 when she was elected that we were

all secretly thrilled that there was now a female head of state in

Britain. We thought, if it could happen there, in America, seconds

away. Of course, wrong again! you start to think your way into a

character like this, not that there are many, how would you start? Do

you start with the voice and the way of speaking? I started reading.

Reading, reading, reading and trying to learn more about a person

that had been caricature or only in our price. And in my own mind and

easily emblematic of a certain type of person. What you say to people

who say it is all very well doing a film about the Shakespearian

Margaret Thatcher, the woman who rises and then falls and people

have talked about it as a female deer but is not all right to leave

out so much of the politics -- a female Lear. There have been other

documentaries made analysing the downfall and those years. For

people who want that, there is material out there to look at. Our

interest was to look back through her own eyes, looking at the glory

days and looking at anything that she might have regretted. She might

not regret the same things that history does or people on the left

or people the right. I didn't know that you're dropping

by today, dear. A but you said yesterday we were going to start on

dad's things in the cupboards and I was going to help you dress.

Michael is coming for dinner tonight. Yes, of course. We are

having halibut. It is an attempt. An attempt to

look at her as a human being at the end of her life and to imagine what

it felt like to be her. I don't think that that is an unreasonable

act of imagining. Douglas Hurd said it was a ghoulish spectacle to have

so much of somebody suffering from dementia when we don't quite know

what she is really like now. She has not spoken for ten years now.

There is always the possibility that she will see this film herself.

Did that give you pause? It made me feel more responsible but I feel

responsible whenever I have played anyone, even fictional or real. He

just tried to get as close to the truth as you can. I have had

experience with dementia in my own family. I don't think it is a

shameful thing to depict it. I think it is part of nature. It is

what happens. An ageing society. Yes, I hope if she did see it, she

would understand what we were after. We have got her head next door!

If she once asked to take care seriously, she must learn to calm

down! If the Right Honourable Gentleman could perhaps attend more

closely to what I am saying, rather than how I am saying it, he might

receive a valuable education in spite of himself.

You a great comic actress among other things, but some people have

suggested that actually, you are too self knowing as Margaret

Thatcher, that there was less irony and self-knowledge in the real

Margaret Thatcher than the Margaret Thatcher you give us. I have heard

enough anecdotes to know that she has a sense of humour and to know

that she did not really, because of her cloistered upbringing, did not

know a lot about blue humour. She was not hip to stuff. I think she

felt constrained to either laugh or cry because it would be seen as a

sign of weakness. A special rule for the first head of state --

first female head of state who cannot cry. Churchill can cry, it

is a sign of humanity but if she was to cry it would be a sign of

unsuitability. Different rules, I guess. You have been not lucky,

because you deserve every inch of it but you have had a fantastic

last few years. We talk about old actresses do not get the top roles

but you have proved us wrong. yes. It is always based on money.

If you make some money for someone they will give you the next picture.

That has been happening lately, inexplicably. Very happy to know

that the films I have been in have travelled worldwide. It has come as

a great shock to people in Hollywood who run studios. But I am

not against exploiting it. Are you able to tell us what is coming

next? Another film, you mean? Yes, I have made a sort of sex

comedy with Tommy Lee Jones. So if not entirely a sequel to this will!

Thank you. Meryl Streep discussing her latest film. Margaret Thatcher,

The Iron Lady. From a former Prime Minister to the current Prime

Minister. David Cameron, good It the big story is what you have

been saying about executive pay. I start by getting it clear that, as

far as you're concerned, there have been new figures about 87 of the

top 100 companies having should executives paid more than �5

million, when most of their companies are pretty flat. You

think that is morally wrong? What I think is wrong is paid going up and

up when it is not linked to the success that companies that having.

I am in favour of people setting up great businesses in Britain,

expanding those businesses, making lots of money when those businesses

succeed. We need the investment and jobs. The Government should not

tell people what they are to be paid. But where you have a market

failure, and to me this is market failure, we saw between 1998 and

2010 the average pay of a FTSE executive go up four times. More

than �2 million each? Some people are worth to millions -- �2 million,

because they have added massive growth and jobs. But it is

excessive payment and related to success that is ripping off

shareholders and customers. It is crony capitalism and it is wrong.

The key point, payments for failure, the big rewards when people fail,

it makes people's blood boil and it is taking money from the owners,

the shareholders and everybody with a pension in Britain, and the

employees as well. That is what is wrong, that needs to change and we

are going to directly address that. A lot of people will say those are

great words, Ann Treneman has said it is going to have to be deeds and

not words. Can I test you on what might happen? We agreed that

shareholders will be obliged, by law, to agree bonus packages and

severance packages for senior executives? That is the key.

Everything is on the table. Vince Cable is leading the exercise,

consulting with business. The Institute of Directors, the CBI,

many people in business know there is a market failure that needs to

be dealt with. The absolute key, the thing I can confirm does need

to happen and will happen is clear transparency in terms of the

publication of proper pay numbers, so you can really see what people

are being paid. Then, binding shareholder votes, so that the

owners of the company are being asked to vote on pay levels.

Absolutely key, they have to vote one any part about dismissal

packages and payments for failure. That is that it that has gone so

wrong. Those votes, will they have to be published? Will we have to

know how, for instance, pension funds have voted? You pretty much

know that at the moment. What we should be doing here are what are

the best market tools to try to correct this market failure. I

think transparency is a key tool. We can all see what is happening.

You are empowering the shareholder. When you say transparency, give us

some sense of how many salaries, what level we are talking about

outside the boardroom itself? we have done with banks is actually

the toughest renumeration rules for banks and financial institutions

anywhere in the world. The eight top paid people have to be declared.

Something similar for other companies? I don't want to steal

Vince Cable's tender. He will make announcements early in the new year.

-- thunder. I want to explain the key change, where you make more

information transparently available, you would Power shareholders to

vote on these things and stock rewards for failure. What about

putting an employee on to the renumeration committee? Just one

employee, surrounded by the guys in suits, to speak up for the workers?

The key thing is reforming the remuneration committees themselves.

What has happened in the past is that with a lot of chairmen sitting

on each other's committees, there has been a bit of back-scratching

going on. There has been a circular process of rewards being pushed out

across the board. They are rewards which are sometimes earned because

they are related to successful stopping too many cases, they are

just generally going up. A four times increase in pay levels, but

we did not see a four times increase in share prices,

shareholder value or people working hard in those companies, they did

not see their salaries go up by four times. Would it be fair for

those people, working hard, to have one voice on those committees?

may be the case. You would not be against that? The key thing is

reforming the committees to make them work better. Let's look at...

I'm not interested in gimmicks or tokenism. I'm interested in what

would work to correct the market failure. I have said today what is

absolutely key to me, shareholder votes, transparent information.

What about one of the other proposals that have been kicking

around, that high pay commission talked about this, at least

publishing the ratio between the top people and how much they are

paid and the least paid people, people in the middle whatever it

might be, so we can get some sense of the spread? Which companies are

paying their top people 100 times more than people at the bottom?

There are some attractions to this. I think we should start with the

public sector. We have led by example, we have cut ministers' pay

by 5%, we have frozen it for Parliament, we have published pay

levels in local government so the so-called fat cat salaries amongst

government executives are coming down. We are dealing with quango

paid. There has been a problem of the public and private sector

chasing top pay and pushing levels up. The BBC has been a victim, or

rather a perpetrator, of that. I think that is now being dealt with

in the BBC as well. Pay ratios, I think there is a good argument for

it. Maybe in the public sector, before the private sector, but in

both. What about legislating to enforce the ratio? There is one

problem with ratios that we need to do more work on. Sometimes you

actually find that a company like Goldman Sachs as a relatively

reasonable ratio. The average pay is relatively high. You might find

that Tesco has a bad ratio. It is not the whole answer. When we asked

the Work Foundation to look at this issue, they did not say this was

the key change that would really make a difference. I want to focus

on the things that will make a difference, that will show people

that this is a fairer country, that reward is linked to success and not

failure. I'm interested in things that make a difference, not just

trying to cover the entire waterfront. This is real, we will

see legislation this year? It is not going to be just words? We had

a Queen's Speech in spring. I don't want to pre-empt it, but it is

likely to include legislation on companies and banking. There is

room to make legislative changes if necessary. Let's move to the other

end of the scale. Depending on how you count it, there are between

750,001 million young people without jobs. -- 750,000 people and

1 million young people without jobs. Are you haunted by that? I am

extremely worried about it. That is why we not only how to work

programme, the biggest back-to-work programme any government has done

since the 1930s, but we have supplemented that with the youth

contract. So young people that have been out of work for only a few

months will get help. It might be work experience, it might be a

subsidised job in the private sector. What we have seen is that

work experience is one of the most cost-effective ways of getting

young people into work. For a good reason, the companies can see there

are excellent young people ready to work and they can get used to the

idea of going in and working. I saw this for myself on Friday, how many

successful schemes there have been. At the moment, the hope that you

were expressing this time last year, that the private sector would sweep

in and compensate and more for the jobs being lost in the public

sector, that has not happened, has it? That must be a disappointment.

I wonder whether you and George Osborne are constantly talking

about new ways to get more jobs in the private sector? What we have

seen since the election is 500,000 new jobs in the private sector.

That has not been enough to compensate for the lost jobs in the

public sector, which are inevitable when you are making reductions to

public said that -- spending, necessary because of the position

we inherited. We are not sitting back and just hoping this

rebalancing between private and public is going to take place. This

is a sleeves rolled up government that is boosting the number of

apprenticeships and work-experience places, introducing the regional

growth fund, cut in corporation tax and doing everything we can to help

businesses start up and grow. The growth will come, I think, from

start-up businesses, new businesses, small businesses choosing to employ

one or two people. But do you have to go further on all of that in

removing regulations or helping on the tax side? Up until now, you're

not getting enough of those jobs? That work never stops. If you

believe that the free-enterprise economy is the way to get growth

and jobs, frankly there is not a government stimulus you can go

through public spending because the Government hasn't got any money.

There is not a monetary stimulus you can give because interest rates

are as low as they could be. It is simply to make it easier for

companies to take people on, grow, invest and expand. It is a tough

year, but a year when we need to make tough decisions to make that

happen. We have the post from the Olympic Games, the Diamond Jubilee,

a year when the world is going to be looking at Britain and visiting

Britain. So we need to play to our strengths. A showcase year. However,

I didn't totally get the sense that you are really getting your

Chancellor by the lapels and saying, this is a crisis. Youth

unemployment is the worst it has been for a generation. These are

people that may never get into work as a result. The work programmes

are the biggest ever, the youth contract has added to that. The

enterprise zones are up and running this year, the corporation tax cut

is coming in. The cut in petrol duty to help families with the cost

of living, the frieze of council tax. It is a long list. But at the

moment the unemployment rate keeps moving up and we have got very,

very low prospects for growth according to the Office For Budget

Responsibility? All of the forecasters are forecasting growth

this year. The job of the Government is not to sit back and

hope it happens. It is to roll up its sleeves and do everything

possible to help businesses do that. At the time of the Budget it was

going to be 2.5%, now it is 0.7%. For the last quarter of which

figures are available, there was growth in private sector employment.

The key things are not only helping to boost growth, but also

recognising that if you want to protect jobs in the public sector,

and I do, and you have got to make reductions in public spending, that

means bold welfare reform is necessary. That does not cost jobs.

The public sector pension deals, they are necessary because it

reduces costs without reducing jobs. Those are three difficult... You

know, part of this is making tough and difficult decisions that are in

the long term interests of the economy and the country, riding up

the difficulty of doing that in the national interest. Doncaster

council has suggested that it is going to vote tomorrow on cutting

the pay of everybody working for the council so that they can save

some jobs. Is that the kind of radical, lateral thinking you would

like to see more of? I wasn't aware of that specific situation. But if

you look at what happened at the British car industry during the

difficult decision -- recession, that is exactly what companies like

Honda did to save jobs. Spread the pain? There has been a great show

of solidarity in many private sector companies that took

difficult decisions on issues like paying in order to keep hold of

jobs. I think that is important. cutting everybody's pay to save

some people's jobs could be the way forwards? What we have done is have

a public sector pay freeze. We have extended that with a 1% increase,

rather than anything more. That is a solidarity measure. It is saying

if we hold down public sector pay at a time when we hope and believe

inflation will fall, we will protect public sector jobs. Beyond

the frieze, cutting could be the way forward? I'm not making that

suggestion, but I am saying throughout the public sector what

happens -- matters is the size of the pay bill. If you could be more

efficient and do things better, that is what matters. We are going

to see unemployment higher by the end of the year, aren't we?

forecasts are there. It is the job of the Government not just to stand

back and say, well, that is what is going to happen, the job of the

Government is to help people into work, help people stay in work,

help businesses to be created. There is a huge amount of business

creation going on in Britain and we are producing the tax systems and

other systems to help make that happen. Am I satisfied we are doing

enough to deregulate, to make it easier to employ people, to solve

the problem, no. The job we have is to bang the table and make sure

every government department is a growth department. I don't say to

the environment minister or the housing minister that they are just

there for that, they are all growth ministers. The whole government has

a growth agenda to make sure every avenue of policy is about helping

the economy to grow and get people back to work. Let's turn to

something that might be getting smaller, rather than bigger. That

is the United Kingdom itself. Are you determined to affect the timing

and the questions of any referendum on Scottish independence? I think

there is a problem today, two problems. One is the uncertainty

about this issue. I think it is damaging to Scotland and Scotland's

economy. You have companies and other organisations asking what

Scotland's future is. Is it within the United Kingdom or not? That is

damaging. It's very unfair on the Scottish people themselves, who do

not really know when his quest is going to be asked, what the

question is going to be, who is responsible for asking it. I think

we owe the Scottish people something that is fair, legal and

decisive. In the coming days we will be setting out clearly what

the legal situation is. I think we do need to more forwards and say,

right, let's settle this issue in a fair and decisive way. A what is

the legal situation? As most people understood it, Alex Salmond would

decide when the referendum is going to happen and the question of

whether it is in or out, whether there was a third option, that

would be down to the Scottish administration to decide. Is that

something you do not believe to be the case? I'm afraid I cannot do it

today, but we will be making clear in the coming days what the legal

situation is. Then I think we will have a proper debate where people

will put forward their views. My view, very strongly, is that

Scottish people deserve clarity, decisiveness and they deserve it to

be legal and binding. Let me be absolutely clear, my cards on the

table, I strongly support the United Kingdom. I think it is one

of the most successful partnerships in the history of the world. I

think it would be desperately sad if Scotland chose to leave the

United Kingdom. I will do everything I can to encourage

Scotland to stay in the United Kingdom because I think it is best

for all of our economies and all societies. If Scotland did leave,

that would be the end of Britain's independent nuclear deterrent,

wouldn't it? There would be many disadvantages from a break-up of

the United Kingdom. All of those issues would have to be dealt with.

But let's not go there. We have this great partnership. This

partnership has worked so well for those in the past. We will keep it

in the future. Let's have decisiveness, let not drift apart.

What Alex Salmond is trying to do is, I think he knows that the

Scottish people, in their heart, don't want a full separation from

the United Kingdom. He is trying to create a situation where that

bubbles up and happens. I think we Just on the timing, he wants the

vote in 2014, the and adversity -- anniversary of the Battle of

Bannockburn. You are saying, let's have the vote earlier. I think this

is a matter for the Scottish people. If there are problems of

uncertainty and lack of clarity, I don't think we should let this go

on year after year, it is damaging for everyone concerned. Let's

clear-up the situation and have a debate. Sooner not later? My view

is that sooner rather than later would be better. Let me ask you

about the fall-out from the European veto, if I may? We have

just had that the French Finance Minister is saying that there will

be a transaction tax, a financial transaction tax by the end of this

year and we have also heard that Sarkozy and Merkel and the rest are

determined to go ahead using the institutions of the EU to progress

what they want to do on the euro. First of all, let's deal with the

taxation issue. Tax is an issue of unanimity in the European Union.

Other countries are at liberty to put forward ideas for taxes. The

idea of a transaction tax put in place only in Europe, that does not

include other jurisdictions, what that would do is it would cost jobs.

It would cost us tax revenue. It would be bad for the whole of

Europe. We would see other institutions go to other places. If

the French themselves want to go ahead with a transaction tax in

their own country, they should be free to do so. I think they are

talking about a European wide one. I think the French are talking

about doing one in their own country. We have stamp duty on

share transactions in Britain. And yet we have one of the most

competitive and financial -- successful financial markets

anywhere. I would say to other countries if they want to do what

Britain does, we have a bank levy, stamp duty on share dealings, you

can do those things. But the idea of a new European tax when you're

not going to have that put in place in other places, I do not think

that is sensible so I will block it. A less than rest of the world

agreed then we will not go ahead with it. What about the use of the

26 now? We do not know whether it will be 26 or less who go ahead

with the new treaty. The 26th ish we will call them, that group, what

about them, they seem determined to look at single-market issues as

part of the reform to the euro as a currency bloc. Is that something

that you will stop or are you talking about attending those

meetings as an observer? There is a new treaty being formed outside the

European Union that may involve 26 or it may be fewer. At its heart,

it is that eurozone countries, countries in Europe having a tough

set of rules about the deficits they are allowed and all the rest

of it. That is the business of the euro. We are not in the euro, we do

not want to join the euro and frankly we are better off with our

own currency and hour better interest rates. The key for me is

that Britain's interest is in having a strong single market that

is determined at the level of the 27. The interesting thing about

this new treaty is is says very, very clearly in article 2 of the

treaty, that this treaty does not supersede or interfere with or

overriding anyway, the treaties of the European Union. It is entirely

subservient to them. Yet, in psychological and human terms,

being the one outside, would be an uncomfortable position for the year

ahead. Do you intend to make sure you are back inside? I think that

is a slight myth. When the euro was created, that was the moment at

which, those countries with their own currency and frankly now Baron

problems to deal with, inevitably had to spend more time talking to

each other and deepening their relationship together. They have

been having separate meetings were that the United Kingdom being

present for years now and frankly they need to have more meetings to

sort out their problems. If they want to discuss something like the

fact that the Germans are understandably angry that they

retire in their mid-60s and Greeks retire in their mid-60s -- mid-50s,

that is something they can talk about which does not have an effect

on Britain. I'm happy for them to have their discussions. What

matters for Britain is, is the single work -- is the single market

work in? Are we increasing enterprise and jobs in that way and

that is where my efforts will be put this year. Are you taking this

country in a fresh direction when it comes to Europe, politically as

well as this particular row? Are we Marcham off finally in a new

direction? We are committed members of the European Union. We are

committed members of the single market. I am relaxed about the fact

that when it is in the national interest to be in something, like

the single market or NATO we are in it. When it is not in our interests

that the Schengen Agreement, I do not want us to be in. With the euro

we are better off outside it so we are not going to join it. Standing

up for your national interest and choosing which things really matter,

I think that is a very sensible approach. The let me ask you that

two other things which have been in the news. One is the increasing

worry about the rhetoric from Argentina about the Falkland

Islands. We had just had the film about The Iron Lady reminding us

about 1980. The Argentines have brought up -- built up a lot of

support among other South American nations, are you worried about the

tone that is going on out there? For obviously, it is an important

anniversary this year. I remember being at school listening to the

radio and following really closely what happened in 1982 and the

incredible bravery of hour service personnel in recovering the

Falkland Islands and we must never put them at risk. We must make sure

our defences are strong and that is what we are doing. There is no

question of negotiating on the question of the sovereignty of the

Falkland Islands. We need to build strong relationships with all

countries in South America and we are doing that with countries like

Brazil. There is nothing immediate to be worried about? We are

permanently vigilant about the protection of the Falkland Islands

and their defence and I have spent a serious amount of time making

sure that is the case. One final point, Ed Balls is not your

favourite Labour politician, you said it was like being confronted

by somebody with Tourette's syndrome. By -- an unfortunate

choice of words? I was speaking off the cuff. I did not intend to

offend anyone. I think it is a lesson to me that I have to tune

out and answer the question. I think Meryl Streep saw that it can

be challenging at moments. A busy year ahead and thank you for

joining us, Prime Minister. The Prime Minister has promised

action to curb the pay of some top executives. David Cameron said that

had been excessive growth in salaries and bonuses in recent

years which sometimes was not related to the success of the

companies involved. He described the trend as a market failure which

was ripping off shareholders. He said he expected the government to

bring forward legislation later this year to introduce greater

transparency. A nurse arrested on suspicion of

tampering with medical records at Stepping Hill Hospital in Stockport

is now being questioned in relation to the poisoning of patients there

last summer. Police say Victorino Chua is being questioned on

suspicion of three murders and 18 counts of grievous bodily harm.

That is all from me for now. The next news on BBC One is at midday.

Back to Andrew and guests in a moment. First a look at what is

coming up next. Good morning. Did Mrs Thatcher

changed Britain for the better? Derek Hatton and Edwina Currie are

limbering up to do battle on that one. And, has the time come to

repent? Some say 2012 might be the end of the world. Join us at 10

o'clock on BBC One for The Big Questions.

We will end this morning with some music from Nick Lowe. He has

written some brilliant songs over the last 40 years, a pioneer of

punk, have collaborated with Elvis Costello and is a well-known

performer in his own right. He has a new album out and he is with me

now. It is unfair to show pictures from 40 years ago but nonetheless!

Painful! You have been doing a lot of performing and gigs in the

United States but we have not seen so much of you in this country?

I have rather neglected this country. I am hoping to put that

right starting at the end of this month. Much harder for young

performers starting out than in your day, there are no pioneering

people who could make money out of selling records, that is no longer

the case, is it? It is very much more difficult these days. Tell us

about the music you are making now and what you are going to sing for

us. It is a sort of hip croon. sounds all right! That is what I am

punting now. We will hear it in a moment. Thank you for joining us.

That is almost it for this morning. A reminder that the new radio

series examining David Cameron's Premiership starts on Radio 4 today

at 1:30pm. We are back at the same time next week and I will be

talking to the Laban leader Ed Miliband and the painter David

Hockney -- Labour leader. But now we leave you with Nick Lowe and a

song from his new album which is called House For Sale. Goodbye. #

House for sale. # I'm moving out.

# I'm moving on. # This bird has flown.

# House for sale. # I'll tell you where to redirect

# House for sale. # Take a look inside.

# This is where love Once did reside.

# But now it's gone. # And that's the reason I'll be

traveling on. # Well the roof has given in to the

weather. # And the windows rattle and moan.

# Paint is peeling, cracks in the ceiling.

# Whatever's happened to my happy home.

# House for sale. # I've had enough.

# I'll send a van to get my stuff. # House for sale.

# I'm leaving like I'm getting out # The stairs are alarmingly shaky.

# And the carpet threadbare and worn.

# Fence needs mending. # Garden needs tending.

# How soon it's become overgrown. # Oh house for sale.

# I've had enough. # I'm leaving like I'm getting out