09/09/2012 The Andrew Marr Show

Good morning. Welcome. On the final weekend of a remarkable Olympic and

Paralympic summer. Thank you, it's been emotional, says one paper this

morning and it did all work. Will it change us at all, as a country?

Will it give us more can-do and confidence, more opening and

admiring attitudes to the disable. I think yes. But that is certainly

one of the issues we will be talking about today in the paper

interview with Margot James, a Conservative company, and Rebecca

Front. In the world of the real coalition, there may have been 27

changes to the Government in the much discussed reshuffle but the

job of getting British business back on its feet, getting those

jobs, is still in the hands of Vince Cable, the Business Secretary

who unveils his new industrial strategy this week. Vince Cable is

with us. Does he really exchange text messages with Ed Miliband? The

opposition has set out its economic blueprint this week, a new plan for

a highly skilled economy and a buzz word, or jar done. Pre-distribution,

what does that mean. Labour's Shadow Chancellor Ed Balls is here

to explain. It's one of the greatest novels ever written and

now Anna Karenina has been made into a film. We talk to Jude Law

about playing an older and more grizzled character.

Playing for us here in the studio Newton Falkner.

A busy hour. First the morning's news head lines.

Good morning. It is the final day of the Paralympics, the London

Games officially come to an end tonight in a closing ceremony which

organisers say will have a festival feel. Great Britain is third in the

medal table behind Russia and China but could clinch second place with

some last minute golds. There was a suitably dramatic finale to the

athletics last night. Oscar Pistorius won the last event in

spectacular style. He set a new Paralympic record.

The T 44, 400m provided a fitting end for the action in the athletics

stadium. Oscar Pistorius was under more pressure than ever after he

was beaten in the 200m final. But he made the rest of the field

You can often tell a true champion by their reaction in defeat as well

as victory. Ellie Simmonds showed her class after she was beaten to

the gold by America's Victoria ar Len. Simmonds Finished strongly,

but the shorter distance favours the American. One of Britain's most

popular Paralympians will add a Silver Medal to two golds and a

bronze at these Games and she will be back for more in four years'

time. David stone enjoyed getting back the golden feeling. There was

no stopping him winning the third Gold Medal of his career in the

road race. Andy Murray has reached his fifth

Grand Slam final after defeating Thomas Berdych in the semi-final.

The semi-final wases is spended yesterday because of bad weather.

French and British police will spend a second day searching the

Surrey home of the British couple killed in the French Alps.

Postmortem examinations in France have revealed that sad and I can

bag al-Hilli and a woman thought to be Mr Al-Hilli's mother were each

shot twice in the head in the attack on Wednesday. A French

cyclist was also killed. The couple's two daughters survived the

attack and remain under police guard in France.

Trade unionists are gathering for the annual Trades Union Congress

amid warnings more strikes are inevitable over jobs of the during

the the coming week delegates will respond to how to respond to the

government's continuing austerity programme. The author of the of the

of The Gruffalo has said cutting library budgets is a false economy.

The Secretary of State has offered to meet her to discuss the issue,

but it's been stressed that libraries are funded by local

authorities, not central government. That is all from me. I will be back

with the headlines before 10.00. As ever to the front pages today,

that terrible killing in the French Alps makes front page after front

Lots of theories about what was behind the shooting but nothing

concrete yet. Lots of other stories, Sunday Telegraph there, interview

with Michael Fallon who has gone to the business department saying we

should salute our wealth creators like Olympians and and cherish them

more. The Independent on Sunday, thank you it's been emotional.

There's lots of politics around as well. In the Mail on Sunday, Boris

Johnson in secret talks to make sensational come back as an MP. It

suggests that zpack Goldsmith is going to give up his seat in west

lon and give it over to Boris. Thank you for joining us Margot

James and Rebecca Front. Rebecca will probably start talking about

the Olympics and Paralympics. This is the weekend when it's all over.

I freely admit I was a real nay sayer about the Olympics and we

were all going to be disappointed. I have been proved completely wrong.

The Observer here, has a very lovely spread in which, a great

photo of Mo Farah. They have talked to people about the legacy and the

future. And what it all means. It is all positive and these are

people right across the political divide and apolitical people as

well. You have chosen a similar analysis from the Sunday Times.

the whole thing comes to a close, people have a sense of wonder about

the Paralympics and how that has changed at attitudes to people with

disabilities and it has been so wonderful. I think as a nation, we

have really gained some self- confidence. It is interesting in

the political world, because you can't put a number on it or

tabulate the feel-good factor, doesn't mean it is not really,

really important. You can feel it in the air and the whole

volunteering spirit that was behind it as well and the management of it

and the fact it was all delivered on budget, on time. It's a

tremendous success. One of the commentators mentions being proud

to see the Union Flag on display. For a long time that has been

commandeered by the far-right and people have felt uncomfortable

about it and suddenly there it is and everybody is cheering. There is

a real optimistic spirit. Did you like the country being called Great

Britain all the time. We must talk about the awful massacre story. You

have chosen a spread from the Sunday Times there. It's pretty

clear how it happened. They seem to have been professional hitmen.

looks that way. It is devastating, one of those nightmares nobody

wants to think about. That is one of the reasons the press are

focusing on the professional hitmen angle. None of us likes to think it

could be a random killing. It slightly worries me the speculation,

there is such a lot of speculation, all this business about the brother

and financial things makes me a little uneasy because we don't know

how relevant that is. You would think think that should be kept

within the police investigation, rather than plastered all over the

media. It always is. So tragic for those two little girls. That is all

we can say. Let's move on. Lots of politics in the paper. You have

chosen an interesting interview with Michael Fallon, the new

minister in the business department. He gives an interview in the

Telegraph. He's tackling the assault on wealth creation. I think

people, because there's been so much disappointment in the banks

and financial institutions, I think over the last few years there has

been a a return to the politics of envy and that is what Michael

Fallon as a new business minister is going to tackle head on.

wants a strong Conservative voice in the department. He will be that.

He will be building on work that's already being done to reduce

regulation. Particularly in employment law and I have no doubt

he will make his presence felt. This growth agenda is not

uncontroversial, because John gummer has come out talking about

there can't be any growth without it being green growth and we have

to look at these restrictions in planning and the dash for gas and

we have to be a bit more critical. I think we do need to be critical.

The renewable agenda is important, but it is not the only thing. It

does require a huge amount of expensive subsidy. If gas is going

to be cheap, we can't close our eyes to it. A lot of us can't help

seeing the coalition and opposition politics through the prism of the

thick of it. You have the the scripts, you are looking through

them and find there is a strange distorting mirror between you and

the real front pages. Very often. Yes I watched the interview with

Chloe smith on Newsnight and did think my goodness that could have

been Nicola Murray, you can imagine being in that situation. Your

character Nicola Murray is leader of the opposition. We can see a

clip of you. I am sensing opposition. Earlier

you were talking about getting rid of that. So I would like everybody

to take the idea away and percolate. Poppies, last thing, can we make

sure we have them on at all times, jackets, coats. Or bat suits.

your poppies or you will be shot at dawn. I had more fun at my last

mammogram. The joke that doesn't go quite right about being shot at all,

and it is interesting how much of the comedy is in other people's

reactions at the side of the room, rolling their eyes. Yes there are

great killer lines and asides but a lot of it is that. Let's return to

more real politics. I mentioned the Boris Johnson story, secret talks

to make his sensational come back. It is on the front page of the

Daily Mail. Which doesn't necessarily make it true. There

could be crance in the fact they have talked because this is

something that Zac Goldsmith feels incredibly strongly about, that is

the reason he's come into politics. I think he would fall on his sword

for Boris, but Boris has another four years of Mayor of London to

serve. Are we saying this is a job that can be shared with being a

member of parliament. I don't think so. He's made the third runway at

Heathrow his great battle cry when he's criticising the coalition

government. That is one of the many constituencies where he's

completely critical. To go into one of the T3 critical constituencies

as an MP for Boris after what he has been saying. Boris is highly

provocative. Boris is somebody whose Olympic legacy seems to be

assured. Let's move on to more stories. Publisher faking reviews

of books. This is becoming quite a common story. It is, yes. It

fascinates me. This is bun in the Sunday Times today about a chap

called Trevathon, who works for pan McMillan and has been posting

reviews, positive reviews of some of his less popular books. And it

is called sock puppetry and it is indicative of the whole... Sock

puppetry. It means hiding behind that aanyonity of the internet.

There is another story today about grant Shaps changing entries on

Wikipedia. It is one of those problems that you can change things

and it is something the internet may be needs to address. Other big

stories around. A lot of comment after these people were arrested

and put in police cells for resisting burglars in their house.

That is going to be a big story when MPs get back this week.

got back last week and I asked a question about that very story,

which is an outrage. That couple who used reasonable force to defend

themselves and their property were put in custody for three days. I

ask the question shouldn't more common sense be incorporated into

police training for one. We need to do more to protect householders'

rights to defend themselves. We've done it. Thank you both very much.

The good news, we turn to the weather, was that yesterday's

glorious sunshine should stay with us today. Bad news is that this

brief Indian summer ends this evening.

It is changing from the west today and next week looks distinctly

autumnal. Very warm weather, a bit of an issue for the marathon if you

are heading to watch it, but in the west already the change is under

way. There is the cloud rolling in off the Atlantic. It is bringing

rain to the western side of the Northern Ireland.

But, for the bulk of England and Wales and eastern Scotland a good

deal of dry and fine weather through the rest of today.

Following the raven heavy and thundery showers for Northern

Ireland. Can you see the warmth still with us in the strong

September sunshine. We have also had tell tale signs of

September this weekend, we have had stubborn fog, it's just about

cleared now but glorious sunshine, 27 possibly up to 29 in some south-

east locations. This evening, there is a small chance of a shower for

the closing ceremony at the Paralympics. Tomorrow is a very

different day. Wet weather in the north and further south,

temperatures nowhere near as high as today's but still decent weather

around. There after, once the rain comes

southwards and clears it looks It's now Labour's turn to set our

their agenda for a new political term. No dramatic changes in

personnel but there is a new focus for the party's economic policy,

something they are calling pre- distribution by seems to mean

ensuring people are better paid. Is this even remotely achievable and

who controls the Labour policy these days, I am joined by Ed Balls,

Shadow Chancellor. Pre-distribution is finding ways to

force or persuade companies to pay more than the minimum wage? It is a

bigger idea than that. As Ed said last week, it is a bigger idea

looking for a good name or label. I am not sure pre-distribution will

do it on the doorstep. What it says is, the way government invests and

manages the economy can have a really important long-term impact

upon growth and wages and fairness. To give one example, people are

struggling at the moment, childcare is expensive f we could invest in

childcare which means people can get out to work, that improves

their work chance, improves their wages. The same thing is true

around educational support for staying on at school at 16. In the

last Labour government we didn't do enough when there was unskilled

migration to control that, but also to say through things like agency

workers, to stop the over casualisation of the labour mark r

market -- market. If you get the right intervention, you can make

the economy stronger and fairer, grow more, but also have more wages

and good jobs. Let me come back to the specific notion of making

companies somehow pay more than the minimum wage. The question is, in

the real world, how do you possibly do it and if you are successful,

doesn't that make it harder to turn a profit and endanger companies

too? The way we make companies pay more in law is the National Minimum

Wage. But you are suggesting something new. We made huge

progress in the last parliament by adding to the tax credits to boost

earnings in work and to tackle child poverty. You are saying the

money for that way of thinking is no longer there? It's got to be

part of the thinking but can you do more. We have said in some places

local authorities are leading the campaign to have a living wage,

where voluntarily they pay more than the minimum wage. We want to

challenge companies to do that. What matters is what are the wages

people are being paid. That depends upon their skills. I come back to

the mechanism of how you do it and what it says, if you start to talk

about a a living wage, what does that say about the minimum wage,

does that mean it is a starvation wage? There are lots of people on

the minimum wages who are doing second earning jobs in much higher

income households but people are are also struggling on wages higher

than the minimum wage if they are the sole earner in the household.

You have to get to the under lying wage distribution. If you have

unschooled migration, which we have had in the past, pushing down with

pressure, you have a lack of proper support. You are going to cut

immigration, yes? Yes, we should control migration more than we did.

The government is not cutting immigration, it is going up.

have to find some way of persuading many companies to pay people more,

but I am not clear what that way might be?. In the end taking a 20,

30 year view of our society, if you carry on having lots of people

without having a way to earn decent wages and if you have a economy

that doesn't deliver high skilled jobs... You are not telling me how

you are going to make companies do that. We are not going to do that.

We have a National Minimum Wage, but we also need to say to

companies, can you do more to persuade people on the living wage

and also to say, a labour market which works on a short-term way,

without the minimum wage being enforced, doesn't work, it is not

fair. At the moment we have the government saying get rid of the

gangmasters legislation, gangmasters legislation is to stop

labour coming in in an exploited way to uncut decent hard-working

people. Let's turn to another issue which you raised recently. Are you

a convert to what has been called a manages tax -- mansion, a tax on

high value properties and wealth that can't be moved around. It is

one idea that Vince Cable has proposed. I say let's look at that.

At the moment we have a government raising taxes on pensioners. That

is perverse and unfair. Do you think, going back to something, do

you think that the wealthy are paying their fair share at the

moment? I don't think anybody thinks it is fair that the wealthy

see their taxes cut on the top rate while pensioners and families are

seeing their taxes increased which makes it harder for them to go out

to work. The top rate of tax should be reversed. We should look at

Vince's proposal for a wealth tax. I have been on your programme many

times and it is important to say this, two two years we have debated

was George Osborne's plan going to work. It's failed. Borrowing is

rising because of the double dip reception. A manson tax is a long-

term reform. Right now let's kick- start the economy. We have to say

to George Osborne stop digging a deeper hole. Do you accept however

that you are living in a new world where you are trying to kick-start

the economy, but you can't do it with major injections of new money

because it ain't there, partly because of all the borrowing during

the Labour years. No, I have to say economically, that is a deeply

incoherent make to me, when the economy is in double dip recession

and borrowing under George Osbourne is rising by a quarter, compared to

last year, because people are out of work and the economy is not

growing. What is what happens when the economy goes out. The economy

has gone down because of George Osbourne's policies. No politician

has the old-fashioned kinsian levers to push money back into the

economy and reflait it that way. That is not true. That is the

economic incoherence of jorges Osbourne and David Cameron which

Vince railed against. Business is the same. We need to kick-start the

economy, cut VAT to 5%. Don't fiddle with the planning system.

Cut VAT for home improvements to 5%. Cut national insurance for small

firms. Let's have a temporary VAT cut. You say to me will that lead

to more borrowing, I say George Osbourne has raised borrowing by a

quarter because his plan has failed because of the double dip recession.

We can't carry on. There would be a big fiscal boost under Labour.

need it now. We need it right now. But you are not in power. We are

two years from election, we could wait for two years while we have

interparty or between party bickering, between the Conservative

Party and coalition. That is wrong. We are doing long-term damage. What

I am saying to Vince Cable and Ken Clarke, let's us come together and

do what needs to be done now to secure the economy for the long-

term, get the jobs and investment. It is the only way to get the

deficit down. The only way. Apart from the knock-about stuff about

the two Eds and whether you are more macho and you talk over your

leader in meetings and all of that. Which is rubbish. Which is rubbish.

You have been talking over me throughout this whole interview.

Some people are worried that there is going to be a kind of mimicry of

the tensions between Gordon Brown and Tony Blair in the old days,

that there is something in the chemistry between the two of you

that is not entirely stable. Who is worried about that. Are you worried

about that. You know Ed and I very well. I am interested in the fact

that Labour MPs and commentators are talking about it. As I said

last Thursday, when we were at our press conference, two Eds are

better than one. We are working as a really close team. We have seen

the Blair Brown years and we are not going to repeat that. I am

backing him 100%. This idea, that good politics is butch or macho,

the Cameron view, what a load of nonsense. People depont get where

they get to by shouting loudly. It is all about judgment, making the

right calls. I made the right call on the economy. Ed Miliband made

the right call on News International. Together it is not

about macho bullying or treating women badly. We will leave that to

to David Cameron. It is very interesting listening to you and Ed

Milliband talking about the Liberal Democrats. You are clearly putting

out some kind of feelers, not personally or directly, but texting

going on, is it however the case that you couldn't could envies --

couldn't envisage any relationship with the Liberal Democrats so long

as Nick Clegg is in charge. No, it makes things very difficult, but

put that to one side. Would you see Vince Cable as a Man U could do

business with? Of course, I have to say I wish George Osbourne would

see Vince Cable as a man to do business with rather than telling

the newspapers he is putting his allies in to hold him back. I could

work with Vince. I would like the Liberal Democrats to say right now,

this coalition has failed, it's flawed and we are going to change

course. I would celebrate. Do you think instincts are closer to you

than the current Conservatives?. is true of many Liberal Democrats

but not true of Nick Clegg, who instincts are clearly closer to

David Cameron and George Osborne. But I am not somebody who is

thinking to myself I want a coalition for the future. I want a

Labour majority government elected in 2015. Now I want decent people

who put the country first and sensible in their thinking to do

the right thing and stop undermining the long-term future of

our economy and businesses. Vince is one of those people. I could

work with him today. And aren't butch either.

He's one of our best known actors whose appearance as Oscar Wilde's

lover sparked an impressive Hollywood career. Now after some

tangles with the press Jude Law is back in one of the biggest movies

of the autumn, Anna Karenina. I asked him if he thought the

styleised take on the story was a risky one.

Yes, we believed in it. We believed in it honesty, we knew the root of

it was from a very clever and very specific place in Joe's vision. The

idea that the aristocracy of that time was a place of performance.

Everybody is watching everybody else in the theatre. Speaking in

French, studying French etiquette, not knowing whether they were

eastern or western. On top of that, at the heart of the book it is five

people in love in different ways n love we all perform e we are either

the heartbroken, the lover, and so the idea of performance was our

universe. I am going to Moscow tomorrow. I will not return to this

house until divorce has driven you into the street. My son will be

sent to live with my eldest sister. Alexei please. Do you think you

would let me have my son. You are depraved. I thank God the curse of

love is lifted from me. You are the kuck old, you are Karenin, this is

unfamiliar territory in terms of the characters you are familiar

with, you have played the young blades in the past. Now here you

are, as this rather haggard, tortured older man. How do you

react when they say you are going to have to lose the hair line, salt

and pepper in the beard, do you think oh know this is how it starts.

The beginning of the end! No. I was very excited because it felt like

new territory. I was challenged. It felt like textures and colours I

hadn't necessarily explored before. I I was thinking last night, apart

from a play I did several years ago, it's possibly the only person I

have ever played with such devout faith. There were many elements to

him that were new and I really enjoy, to me that is one of the

great things about my job, the opportunity of changing tack,

changing direction and surprising myself and hopefully surprising

audiences. Later on this month there's going to be a concert which

you are helping to produce, because you do a lot, lots of these pans do

lots of work for charity but you do more than most and you have a

particular long standing connection with this? Yes, it's been about six

or seven years. This year is global focus 2012, peace day this year is

a huge concert celebrating that. Elton John is playing. Really, the

concerts are a celebration of the day. There are wonderful education

campaigns which ask children what peace means to them. It is a very

simple notion. It is a day to stop and think about what peace means to

us. In other areas of the world how peace can bring life-saving

activities and repatriation. I must ask you about the - we are waiting

for the results of the Leveson Inquiry. You had the biggest payout

from the people who were hacked. What was done to you appeared to be

about as bad as it got. For those people who say well, come on,

celebrities should be able to put up with this. Tell us what it felt

like to you as an individual? find it really hard talk being this

stuff, only because I hear myself, like you rightly said, you can't

help but sound like someone harking on about how hard it is to live in

the spotlight. But... Well, I have learnt is that I was basically

under surveillance for about three years, which meant I was being

hacked, both through my phone and through my computer, I was being

followed, and it leads you to a place of really, really

uncomfortable paranoia. You don't know who is telling who what?

but you are aware of information getting out and just enough spu

civic -- specific for you to feel they had an inroad, so you couldn't

help to look at those around you who know that information. And you

are, you feel you are living your life in some sort of people soap

opera. But it poisoned close relationships around you because of

the paranoia? It did. Fortunately, no relationship was necessarily

severed and fingers were pointed but it put you into a place of

paranoia discomfort. People say Hollywood, famous films, famous

actors have always been, people have been obsessed by them, back to

the 1920ings, the newspapers were always invading private lives of

people who were famous through Hollywood. It is just part of the

deal, you should accept it when you sign up. What do you say to those

people? I have no interest in other people's private lives and I feel

like my, I perform and happy to talk about my work, but to me that

is where it ends. If people don't think that is where it ends, then I

know there are others who are happy to invite you into their private

life, I choose to say no. The fact I don't welcome you into my private

life should be enough. No means no, as it were. Given this whole

eruption has been the biggest thing that's happened to the British

media for a long time, what would you like to see happen as a result

of the Leveson Inquiry? I hope, I want it to get better. I am a

believer, I recognise the importance of the freedom of the

press. It is something we should uphold and it is something we

should support. It is an important part of a democratic society. At

the same time, surely let's come to an end with the obsession with

gossip. I don't know how you structure that. But it just to me

it's time that we all lifted our head out of the gutter. Jude raw,

thank you very much. If there's one politician who is

scarcely out of the news it has to be my next guest, Vince Cable.

Allies are talking him up as a replacement to the Lib Dem leader.

Dealing with the reshuffle that's seen heavyweight Tories moved into

his department. Not much time to practise the ballroom dancing for

which he has an impressive reputation.

In a famously leaked letter you sent to the Prime Minister back in

February, I have it here, you say you make the strong point that

there's still something important missing, a compelling vision of

where the country is heading and a clear and confident message about

how we will earn our living in the future. Is that what you are

seeking to provide this week in your new industrial strategy?.

much so, alongside the other announcements that have been made

by my colleagues. We have had housing and planninging. Tomorrow I

will be announcing initiatives on deregulation, getting rid of red

tape. Tuesday, setting out very clearically what we mean by an

industrial strategy. That is the point here, that there are key

industries, cars, air space, life science, some key services sector,

where we need to think long-term. That is beyond any one parliament,

any one government. You need partnership between government and

private sector. What kind of things does thinking long-term mean,

because presumably you are not going back to picking winners in

the 1970s way and you are not going back to direct attempts to the

government to be involved in industry. What does it mean?

are right, we are not trying to direct and we are not trying to

prop up companies which are affected by changing technology and

markets. If you look at the experience of markets like

countries like Germany, Finland and you the United States. They do

recognise that you need long-term planning and we need collaboration

within the public and private sector. On key areas like

technology, one of the things this government has done is set up this

change of innovation centre in areas like manufacturing and life

sciences and we need to work with the industries involved over the

long-term. They are trying to build up their supply chains in the UK,

bringing them back. We lost lost a lot of industry overseas. We are

trying to bring them back. Things like skills zo., if we are going to

get this country back on to long- term, we need engineers, apprentice

craftsmen, this has to be planned. Do you think we have been naive in

the past therefore? Yes, I think so. There was a belief that all you

need to do is let things happen and they don't. Most other countries

accept that government and business has got to work together. Why has

it taken two years to get to this point? I think it mixture of things.

We now realise we landed ourselves three or our years ago in the most

terrible crisis, a collapse of the banking sector. Debt, it wasn't

just a one aufb problem. There was a deep-rooted problem. One of the

underlining symptoms we allowed our manufacturing sector to decline by

far too much. Bringing it back, you can't wish these things out of the

sky, it is a long-term process. have more Conservative ministers in

your department now, including Michael Fallon. In the interview he

says he's going to have a new bonfire of regulations. Is that

something you would like to see. Mishingel Fallon -- Michael Fallon

is a very able politician. I am sure I will work very well with him,

as I do with the other Conservative ministers in my dempt. We are

scrapping regulation. We have a one in one out system. He wants to go

further than that? I do too. I think there is far too much red

tape. If you take two areas, there is enormous amount of red tape

around the whole immigration system, permits for workers, visas for

people from China, students. There is a lot of tax complexity. If I am

allowed to wheeled my axe in those areas, I will do so. Bonfire of

regulations you would be happy with that? Yes, in a considered way. A

lot of regulations are necessary for the environment, for work and

protection, that has to be balanced against the cost to business. We

will burn a lot of regulation, but in a a rational way. What about

making it easier to fire people? There are already reforms which I

have introduced to the tribunal system that get rid of a lot of

bureaucracy around labour disputes. But I have set myself firmly

against a hire and fire system. It isn't necessary. There was one

specific dispose app we sought the business view of business on, there

was little support for it. We have highly competitive labour markets,

despite the stagnation over the last few years, we have created

900,000 private sector jobs. This can't happen unless you have

flexible labour markets. Michael Fallon makes it clear he is in

favour of this no fault dismissal system. He doesn't say that. I can

give you a quote which makes it clear that is what he is in favour

of. He says he wants to make it easier for people "Employment

easier, simplify the process of employing people, it will make it

easier where relationships break down, easier for the relationship

to end ". We are introducing a system of settlement agreements.

That does help business to end those relationships. But on a more

consensual basis. It is very important that we do these things

in a way that doesn't massively undermine people's sense of

security. There is job insecurity. We don't want to add to it.

proposals come forward to make it easier to fire people, which you

think will increase the general sense of worry, instability in the

labour market, you will make sure that doesn't happen. Of course, and

I am responsible for the policy. Michael is a very good minister, I

have given him substantial responsibilities. You don't feel

slightly uneasy yourself in terms of the number of Conservatives of

strong views who have arrived in your department and sitting around

you? No, I like working with intelligent people with strong

views t makes politics more interesting. I have David Willetts

who is in my department, very, very able and and likable Conservative.

We work well together. I nose I will with the new team. I have a

very good Lib Dem minister, very able young woman and we will have a

good relationship. People are unclear about exactly what is going

to happen in the green belt with the planning regulations and so on.

Give us your sense of the scale of what is going to change, including

the green belt land. Several proposals in respect of planning

and housing. The most important in my view was the proposal to use the

Government balance sheet, to provide 10 billion of guarantees

for social housing associations, to build affordable homes, often in

partnership with the private sector. In addition, there are changes to

planning rules, but planning is a very, very complex mechanism. You

are dealing with a balance all the time and the Government's reform

planning made it simpler, this will take it one step further. We are

not throwing out the whole system of planning controls, because you

do need... You are going to preserve the most beautiful parts

of the countryside, that is going to carry on. But there has to be

intelligent flexibility. If you are in Cambridge that wants to expand

and it is held back by unnecessary regulation, the local council wants

to overcome, then we want to make it easier for them. What about the

environmental agenda which we heard so much of from your party, again

and again and from David Cameron, before the election. Has that

become a casualty of the economic crisis? No, it mustn't. When I

started talking in this conversation thinking about the

long-term, environmental policy is fundamental to that. This

government has achieved a lot already. I spent yesterday talking

to people involved in environmentally friendly vehicles,

the government has put a lot of money into this and big revolution

has taken place, I am running the green investment bank. They mustn't

be undermined. We will make sure within the coalition we absolutely

stick to this commitment about the greenest government ever. Lots of

people it isn't so much planning that is the problem, it is getting

money out of the banks and businesses still can't get the

banks to hand over loans. There is going to be a new government

business bank, but the Financial Times said it was more like a call

centre. No new money, no new lending overall. Is it really a big

enough idea given the scale of the problem? It's only part of the

solution to what is a massive problem. It certainly is a lot more

ambitious than you have described it. The problem is we had a

complete collapse of the banking system, some of the biggest bank in

the world which have gone down. Dealing with that involves better

regulation, involves splitting the banks which is what we are doing,

separating out the casinoes from the retail banks, support for new

lending. It is certainly true that the banks have retreated. They were

wreckless, some of them and now they are ultra-conservative. We

have provided guarantees, we have the new funding for lending scheme.

You must be frustrated at the results. I am very frustrated when

I meet groups of business people, they tell me about the horrendous

state of the banks. Are the wealthy paying their fair share at the

moment?. I think wealthy people could contribute more. I think

there is massive wealth inequality in the country. I do believe

entrepreneurs should be properly supported and we have introduced

things like entrepreneur's relieve to CGT. We need effective wealth

taxation. I was delight today hear that Ed Balls has eventually signed

up to that. A welcome converse. gather you text with the Labour

leader Ed Miliband s that the kind of thing you talk about? Very owe

occasionallely I have met and talked with him. It's grown up

politics. I don't know why people get so excited about it. Your

connections with people in the Labour Party remain there. They

have said again and again they couldn't work with Nick Clegg. Do

you see yourself potentially as the Liberal Democrat leader who could

work with the Labour Party? I am not different in any way from Nick

Clegg, I am happily part of his team and that is not changing. I am

part of the coalition government, commit today working in it, nothing

changes, but I do have perfectly business like amicable

relationships with members of the Labour Party and other parties. I

see no problem in that, that is sensible. I continue to operate

that way. Perfectly business like and sensible ambitions one day

perhaps to lead your party, you have said the days when every every

had to be younger and younger as leaders have gone. I have no

ambitions of that. I have been leader of the party for a short

time, I have been there and done that and I am getting on with my

job in government. I am happily working with Nick Clegg, that is

not an issue. Overall the business position remains very bleak and

difficult in this country. Is the scale of what you are going to be

announcing this week big enough, because there are a lot of

criticism, that you are so constrained fiscally, so little you

can do, aren't you obliged as it were to go much further in the

deregulation bonfire of regulations and so on area than you are perhaps

would be attracted to as a Liberal Democrat because of the scale of

the problem, everything has to be chucked at it. I have said I will

happily deregulate where we need deregulation and where red tape is

a problem, but that doesn't solve the underlying problem of growth.

The problem of growth is we have a serious shortage of demand. It is

nothing to do with the supply side, it is a demand issue. We have

genuine difficulties in the traditional ways of demand

reflation because of the fiscal position. I argued in opposition

that we have to have a business like plan for reducing it. We have

to look at other ways of supporting the economy. The government is

using guarantees, the Bank of England does much of the heavy

lifting and the Chancellor has been intelligently flexible in the way...

Ed Balls was criticising him for the fact there is more borrowing,

that is surely a sensible way to deal with the slowdown. One local

question, given where your constituency is, in the west of

London, like Zac Goldsmith, you are against the third oneway at

Heathrow. This is building up into a massive political issue. Would

you relish seeing Boris Johnson as your new neighbouring MP, fighting

alongside you shoulder to shoulder and is this a resignation sized

issue for you? I think he's just been elected Mayor of London for

the next four years. Dealing with the issue, this isn't a parochial

local problem, there are two million people affected by this.

There is a clear coalition commitment not to expand Heathrow.

There is a very formidable coalition against it, my party is

opposed. The Labour Party seems to be moving against it. It's not

going to happen. The value of this commission that the Prime Minister

has been talking about is looking at alternatives.

Now the headlines. The business secretary Vince Cable

has been talking about the Government's proposals for reviving

the economy. Including a new industrial strategy to be unveiled

this week. He said he was in favour of further deregulation providing

it didn't undermine people's sense of security. The Shadow Chancellor

said Mr Cable should be listened to and confirmed that Labour could do

business with him. He said he wanted politicians of all parties

to work together to do the right thing for the economy.

As the Paralympic Games draws to an end the British team goes into the

final day in third place on the medal table. Last night all eyes

were on the South Africa Oscar Pistorius who claimed gold in the

last event to be held in the Olympic Stadium. He set a new

Paralympic record. That is all from me. The next news

on BBC One is at midday. Let's look at what is coming up after this

show. On Sunday morning live, science

versus religion. Should we have the right to use any

force to protect our property. Join us at 10.00.

Vince Cable is still with us, Ed Balls is back and we have the

singer/songwriter Newton Falkner. You are known particularly for

hitting your guitar and doing strange things with it. Tell us

about how that started. I think it started with just experimentation

and then I think there was a week when I thought I had invented a

whole new style of playing but then I was shot down in flames by one of

my best who said have you heard this guy. He wasn't only doing what

I thought I invented, he was doing it better! That was a minor setback.

Your new album is called Rebuilt By Humans. No that was the previous

one. That was a reference to a really bad accident. I fell over

badly, you can still see the scars, I fell on ice, really bad story. If

it was a good story it would be amazing amazing, but I slipped over

on ice. We are going to hear from you in a second. Two gentlemen,

there is a chemistry, I can see a little bit of a warm love-in going

on here. I have chemistry with lots of people in public life. That is

being grown up. I am happy to talk to Ed, and I talk to my colleagues

in Conservative government in the same way. We are not texting.

have to text, I don't do too much of it. Do you think you are in your

basic instincts quite similar, both essentially men of the left? I have

always been somebody on the centre left, in the sense I do believe in

fairness and even distribution but I also believe in having a

successful business sector, a market economy. Those two things

have to be married together. Sounds right to me. Do you think you are

going to have Mr Clegg as leader of the Liberal Democrats at the next

election. Of course he will. It is easier for me, I would be very

surprised if Nick Clegg fights the next election for the Liberal

Democrats. I don't think it is in the Liberal Democrats or national

interest. That is a matter for Vince, not me. We want what is best

for the country. Vince always makes the argument about what is right

for Britain. Flattery doesn't deal with the issue. We have a very good

Deputy Prime Minister. I am happy working with Nick. Would he say

centre left? I am sure he would. Thank you very much. That is all we

have time for this week. I am back at 8.30 next Sunday, my guests will

including Harry Weinstein. Now I leave you with the voice and guitar

# Take everything you know and write it on your skin and you can

carry on and forget everything # Take everything you know and put

it in your car # You can drive away, drive away so

# Drive into a lake and take off all your clothes

# Set your clothes on fire # You have all you know written on

your skin so you can carry on and forget everything

# All the things I'd rather be # Everything you know and write it

on your skin # You can carry on and forget

everything # Take everything you own and put

it in your car # You can drive away, drive away so

# Drive into a lake and take off all your clothes

# Set your clothes on fire and now you are alone

# But you've got all you know written on your skin

# So you can carry on and forget everything