richard shelby him, and senator shelby was able to secure an agreement with the top democrats senator dodd on the committee that they would basically strip out the $50 billion proposed funding to cover the costs of any company that's been taken over by the literal government and is in the process of being liquidated. >> they've got this agreement to move forward but there are a couple of key issues outstanding -- what are some of the issues that need to be worked out for this to move to the senate? >> a lot of different issues on there. when of the big ones we may even see later has to do with derivatives. ..

free-wheeling debate. the once and they have to keep in mind is that to get in the

segment to the cassette to have an amendment adopted the required threshold is 60 votes. the person opposes the other side could halt a filibuster on there so that very high threshold to change this bill but senator dodd indicated he would be able to work with people how far the extent we do not know. but basically he is holding a lot of the cards on how the debate goes and opponents who want to change this bill face a pretty high threshold. >> bill swindell from congress dail commented on a financial regulations debate getting under way in the u.s. senate. thanks for joining us.

next, the leaders of the three major british political parties face off in their third and final tvd date. courtesy of bbc news. príncipe ann arbor minister gordon brown, conservative leader david cameron and liberal democratic leader nick nick glegg. the question focuses on the economy. a bbc david moderates of the 90 minute debate in birmingham england. ♪

♪ >> good evening and welcome to the great hall of the university of birmingham for the third and final promised a real debate of this election. three men each of whom wants to be the next minister. the leader of the conservative party, david cameron, the leader of the liberal democrats, nick glegg and the leader of the liberal party, gordon brown. [applause] >> to my to the large part will be on the streets of the country's economy. recession, the national debt, unemployment, the issues many people will decide this

election. our audience here is represented of this area. we also selected some questioners from e-mails we received at the bbc news world website. the leaders of course haven't been told the questions. in any case, we start the brief opening remarks from each. first, david cameron. >> good evening. our economy is stuck in a rut and we need change to get moving. let me tell you what i would do. first, we have got to reward work and to tackle welfare dependency. second we have to fix the same banks and tax them to get the money back and to get them lending again. third, we've got to start making things again in this country. it's no policy to adjust to borrow from the chinese and buy goods made in china. fourth, we actually have got to get value for the money in the public services. the public services for everyone and we can only do that if we save and stop the waste.

let me tell you one thing i wouldn't do. we have read so much in the news i will guarantee you i will never join the hero and i keep the pound as the currency. that's the change we need and if you vote for conservative next thursday we can start to get to work on friday. >> thank you mr. camera. nick glegg? >> tonight's debate is about you, your job, the taxes you pay, your family, about the prosperity of our economy. we need to do things differently to build up a new stronger and fair economy. the way they got us into the mess is not the way out. so we need to be frank about the cuts that will be needed so we can protect things like schools and hospitals. we need to break up the banking system so that the responsible bankers can never again put your savings and your business is at risk. we have to rediscover our passion to innovation for building things, not just placing bets on the money markets, and we need their taxes so that you don't pay any income

tax on the first 10,000 pounds. of course they will tell you tonight these things cannot be done. i think we've got to do things differently to deliver the fairness, the prosperity and the jobs that you and your families deserve. >> thank you mr. clegg. cord embrum? >> there's a lot to this job, and as you saw yesterday i don't get all of it right but i do know how to run the economy and good times and in bad. when the banks collapsed i took a immediate action to stop the crisis from becoming calamity and stop the recession from becoming depression. and as a result of that, britain is now on the road to recovery. but as we need to night, the economy in europe is in peril and there is a risk of dragging us into recession. so i'm determined nothing will happen in britain that would put us back in that position. and i want to set out my plan and why this year is so

important. support the economy now and you will ensure that there are jobs and recovery and ensure we can have the resources for deficit reduction. shrink the economy now as the conservatives do and rescue jobs, living standards and tax credits. it's not my future that matters. it's your future that is on the paper next thursday and i will fight for your future. >> mr. brown, thank you. we now take the first question of the night, and it comes from [inaudible] >> we know there will be spending cuts after the general election. what can you be honest and tell us? nick clegg? >> you can look to the back pages we set out numbers that are right there specifying the savings that should be made. we've put out in much greater detail than any other party 15 billion pounds worth of savings which are up from down

payments to deal with these huge black holes we have in our public finance. what are we talking about? things like scrubbing the new generation of biometric parcells, pay restrains, saying the top 20% of recipients of tax credits shouldn't receive the tax credits where they can be targeted elsewhere. i am saying no to things like a multi-billion pound hero fight the typhoon defense project. those are the kind of big decisions you need to take. but you can't do and this is where i disagree with david cameron and gordon brown is for you into thinking efficiency saving is enough. you can't fill a black hole by just a few savings on paper clips. >> gordon brown? >> we settled a four year deficit reduction plan and that starts from 2011. and it's designed to have tax rises that are fair, spending cuts that are equitable, and at the same time growth in the economy that is essential for recovery. an hour for your deficit

reduction plans to impose a rise in the top 100,000 taking away pension tax release for those above 100,000 at the higher rate and the national insurance rise. but also includes spending cuts in key areas. but we have one principle that we are adopting and it's clear. we are not going to allow the front line national health service or schools increasing to be cut. we will find the cuts in other areas as we have set out in putting public saint-tropez and including the restructuring of government. but i would say one thing that is absolutely crucial. don't believe we can fail to support the economy this year. if we fail to support the economy this year than we risk a double-dip recession and that is the problem of the conservative policy. >> david cameron? >> you are quite right. there have to be cuts and we need to be frank about this and we were the first to say the cuts would have to be made. but i really want to explain to people that if i am your prime minister i will do everything i

can to protect the front line services. i want to see the police officers on the and the money go to the children's state schools and the money in the hospital. that is absolutely essentials. now we do have to say some of the difficult things we are going to do. and we have done that. we are not just relying on waste. we've set for instance there will have to be a public sector pay freeze for one year from 2011. that's not popular but it's the right thing to do. we've said people have to retire as your leader starting in 2016. these are difficult decisions but i believe also we've got to get our economy growing. we've got to get it moving and that is why we say start now with efficiencies savings to stop the jobs tax next year. let's get in point in people again and get the economy moving to help with deficits >> let me just repeat the question. we know there will be spending cuts after the general election no matter who wins. we can to be honest and tell us

and i believe it means tell all the cuts you might make and clegg, you might have a chance to respond. >> one thing i would like to add is not quite right implying that none none of the parties have spilled all the details. so of them are not possible to spot not clearly more work will need to be done. we've gone further than others but more will need to be done. something which it quit in a huge difference to us all as we deal with these difficult decisions of the balance is for once to get the politicians actually working together on this. and david cameron and gordon brown would to get the conversation is that regardless of this outcome of a general election next week wouldn't it be a good thing to the chancellor and vice chancellor and parties together with the governor of the bank of england and head of the financial services a party simply to sort of be open and be straight with you about how big this black hole is and roughly how long it is going to take to deal with it so that we all at least are speaking from the same script about how big the problem is?

i think politicians for ones are putting the country before themselves would be a very good thing on this issue. sprick gordon brown? >> let's be clear from 2011 there will be cuts in the departments other than the nhs, other than schools and other than policing but we will make the commitment to maintain the front line services and build on the improvements that we have made. once you build a school and hospital as we've done in the last three years we don't need to build it again sweeten have cuts in the capitol investments. they will not rise as in previous years and they are being reformed but i have to say one thing that is absolutely crucial to the time we are in at the moment in this uncertain and dangerous world david is proposing that there would be cuts in public spending now 6 billion that would shrink the economy at a timely to support the economy. we cannot afford to lose jobs and businesses and los growth now. we must maintain the recovery and support. i am pleased, does not make the

mistake of the 1930's and 1980's and the 1990's and let us support the economy until the recovery is assured. sprick your response, david cameron? >> let me respond to the 6 billion pounds as directly as i can. 6 billion pounds savings this year so we stopped jobs tax next year that means saving one out of every 100 pounds that the government spends. that is the glossy leaflets that comes from the local council. that is one in 100 pounds. the fact that managers got a 7% pay rise this year. that is the one among hundred pounds. we have the leaders of britain's biggest and most successful businesses. savings, the steelmakers call all saying that the risk of the recovery is not cutting waste. the risk of the recovery is putting up a national interest on every job in the country which is what leader proposed. so we say world your sleeves down and let's say the least

where we can to stop the taxes. it's the right thing to do and will help get the economy moving. >> can we explore some of these ideas? gordon brown? >> david his effrontery we are making the savings now. he wants the savings on top of that without putting the money back into the economy. look you go to america look at france, germany, the other countries, they are saying as of the international institutions say don't withdraw the support from the recovery until the recovery is assured. what david would do in an emergency budget in a few weeks' time his ideological reasons take 6 billion pounds out of the economy and the recovery address. the time to the reduction as when the recovery is assured and david, you've just got it wrong economically and it is the same mistakes the conservatives made the old conservative party of the 1930's, the 1980's and the 1990's. sprint david cameron? >> every business leader in saying we've got it right and the government the final resting money is wrong but let me tell

you where i think we should start. we should start with welfare under the government there are now 5 million people on work-related benefits. there are people who could work we trained but we should say if you don't accept work you can't go on claiming benefits. that is something that labor has left with a terrible mess and the democrats have almost nothing to say about welfare. as we try to get the public spending under control this starts with people who can work of offered work but don't take it. >> look, we are not as a nation going to be able to balance the books. or fill the black hole in the public finances unless we also do it with fairness right at the heart of everything we do. people are going to accept the difficult decisions unless we also do it fairly. that is what i think accompanying the job of filling the structural deficit we also need to introduce a big tax breaks that people on the

incomes to tax breaks 700 pounds back in their pocket so they don't pay income tax in the first 10,000 pounds they turned by closing the loophole at the top and using the moneys of people feel that while they are being made at least the tax system is on their side. they don't have fairness of the heart of everything you do it is going to be very difficult to see us through these difficult decisions in the years to come. >> david and neck are not addressing the question we face now. if you shrink the economy now if you contract it if you make the mistake of the 1930's than you lose jobs. you lose growth, businesses. we've got to support the recovery until it is fully established and then the deficit reduction plan which is a four year plan comes into place. take money out of the economy now for ideological reasons and put recovery at risk. and i do fear an emergency budget in a few weeks of time putting the very work that we've done to secure the recovery in jeopardy and no other country in the world is prepared to do that

now. >> what they seem to confuse is if the countries the economy with the government. we say save the government waste to put money people in pockets. think about the savings one out of every 100 pounds that is something every small business that every large business, many families that have in this country and the government should do the same. gordon's for debate in a way is let me go on wasting your money so i can put your taxes next year and taxes are people earning $20 an ounce, 21,000 pounds, these are not rich people, they shouldn't be paying for the mistakes of the bankers and the dreadful record -- >> surely one of the problems here we've got gordon brown talks about a plan in the future but has no details. david cameron talks about something now but it's also got no details. surely what we can do for once is get the chancellor's and vice-chancellor's of the party together. i suggest we call that the counsel for financial stability so that at least you're white

point of the question the politicians are finally up front with you, straight with you about how bad the problem is and how long it is going to take as a country together to deal with it. >> we have a number of questions to come on the economy so let's move on to a second question from a dena. >> we are taking more and more from the average workers. if you are elected what will you do about the tax is? >> the past few years the tax man has taken more and more from the average workers. if he were elected what would you do about taxes? gordon brown? >> i accept its been tough the last few years with a recession but what we've tried to do when people are in difficulty is provide tax credits and half a million people have got tax credits when they've been on short time and are trying to get back to the recession. we've brought on the basic tax from 23 pounds when we came to 20 pounds. at the same time we've raised the top rate of tax above

150,000 pounds to 50 pounds so that is fair to the ordinary hard-working families. now i believe in fairness but one thing i don't believe in is the conservative policy which would cut the tax credits that the same time give an inheritance tax cut to the 3,000 richest people in the country of 200,000 pounds. now that isn't fairness, that is the same old conservative party. tax cuts for the rich and cutting the child tax credits of the very poor simply not there. some of david cameron? >> you are absolutely right the taxpayer has been having to pay more and more has the government has spent more and more and has been careless at trying to stop wasting money. we see waste all around us and the government has done little about it. now obviously with a terrible situation we have in the public finances, with the mess left by gordon and sleeper where there are 4 pounds of the government spent one is borrowed it is not possible to make a great big tax

giveaway promises even if you can't do it. what we have said is let's try to stop the one tax that's going to hit the lowest paid people and that is the national insurance tax i was referring to earlier. we can't stop the other taxes, the top rates of tax to get the tax on the tension. labor has put up taxes in 78 times. but we are going to stop that one tax that will hit the lowest paid the hardest and let me say this about tax credits, they will stay under a conservative government and gordon brown has got to stop misleading families in this country like he has been misleading all of the people and the cancer patients as well. >> you love a chance to ensure that in a moment. nick clegg? >> i couldn't hear -- i think you're absolutely right our tax system is grotesquely unfair. of the 13 years of labor who would have believed he would have a tax system with royalty millionaire from london pays a lower rate of tax from capital gains that is and come and a

cleaner wage of the 13 years of leader we fought the bottom 20% of people in this country who pay more in taxes in proportion of income in the top 20% so we need to change that. david cameron says you can't afford tax giveaways know, you can't but what you can do is switch the tax system, make it fair, make sure the huge loopholes only people of the top ten for a football team of lawyers and accountants to get off of speaking taxes close the loopholes, give the money back so they can income-tax for the first and thousand pounds you burned and that 700 pounds back in the pocket of the vast majority of even this country. >> just before we go on let's repeat the question the past few years the tax man has taken more and more if you were elected what would you do about taxes and gordon brown what would you say to david cameron? >> nobody below 20,000 pounds will pay the national insurance rise. the reason for the national

insurance rises to ensure the health services are pleased in education and david cannot guarantee funding for police and education that will match what we are doing. that is the reason for the national insurance rise that nobody below 20,000 will pay. 6 million people in this country receive tax credits and conservatives and liberals have a plan to reduce tax credits for the middle class families. and i come back to the central question of fairness in the tax system. it david wants fairness and a tax system why does he support this inheritance tax cut but only 3,000 families with 200,000 pounds each the biggest beneficiary of the conservative manifest is as always the richest distinction in the country and not the ordinary hard-working people of this country and of the liberals want to cut the child tax credit with conservatives, then i can see one thing. i will never form an alliance with a conservative government cuts child tax credits. >> david cameron? >> what you are hearing is desperate stuff from someone who is in a desperate state but you've heard from labor and

gordon brown that if you earn over $20 a pound or over your considered rich. you are considered a target with a labour government to go on wasting money this year and get taxes next year. let me ask the question directly about inheritance tax. i believe in this country that if you work hard and save money and put aside money and try to pay on your mortgage on the family home you shouldn't have to sell that or give it to the tax man when you die. you should be able to pass on to your children. it's the most natural human instinct fall and the other two parties simply don't understand that. inheritance tax should only be paid by the richest, by the millionaires. you shouldn't be paid by people who worked hard and have done the right thing in their lives. it's not our top priority. our top priority is helping those on the 20,000 pounds the will be hit by the others. should we try to encourage people to work harder to say i say yes we should. >> nick clegg? >> i have to say that is the

justification i've ever heard from giving the taxpayers. but anyway here the point is taxes are on a fair on millions of people. not the double millionaires as david cameron wants to help, the millions of ordinary people simply struggling to pay the fuel bills and the weekly shopping bills. and i am totally with you all this i think it is just wrong let's say you were teaching on tend thousand pounds a year at the moment you will pay me three days a week about 1,000 pounds of that tax and national insurance under our plan by listing the income tax threshold 10,000 pounds you won't pay any income tax on that. i believe if people work hard, particularly if they want to get of the benefits and start working even if it is just part time we should help them keep more of their money. it is as simple as that. that is a fair thing to do. >> it means we have tax credits

and the 6 million people benefit from that. as far as the teaching assistant earning very low-income as concerned there is the working tax credit is available to them but i come back to the central question of fairness that is being raised by the . how can david to justify the inheritance tax cut for the millionaires at a time he wants to cut the child tax credits let's be honest the inheritance threshold for couples is 650,000 pounds if your house is worth less than that you pay no inheritance tax. what david is doing is giving 3,000 people for the richest people in the country he's going to get them to hundred thousand pounds each year. now that is simply unfair when he also wants like make to cut the child tax credit from ordinary families in the country. i've got to speak out about this because it is simply on a pair and a morrill with a conservative to put this as the election manifesto. >> david cameron? >> you are entitled to speak out of the prime minister ought to get his facts right and as so often he gets his facts wrong we

remember when he told us the defense budget went up every year when in fact it didn't. it didn't go up every year when he was sending troops to war. on the issue of tax credits we are saying we like tax credits and we will keep tax credits for families earning over 50,000 pounds we think we can't afford the child tax credit. that is one of the savings we are being up front and frank about but for gordon brown to say that the changes we are making would hit low-income families is simply not true in the delta said last week in the debates we try to frighten and saying that conservatives would take away benefits when we would keep the fuel allowance and keep the winter -- >> trying again to frighten people and he should be ashamed of what he's doing. >> nick clegg? >> here they go again. tax credits which i think gordon brown raised tax credits are important. i think it is just i think it makes sense at a time when money is tight someone even on my

salary could be entitled to the family component of tax credits. i don't think it is right to have tax credits going so far of the income scale why don't we say it not for the top 20% of recipients you can then target the tax credits for people who need it and the other thing i would say but the tax credits is i have had enough people in tears in my office where i am an mp in sheffield because they've been given money and spend the money on their children, on the heating bills and suddenly they get a letter from the government that you have to pay that money back. that is so on a fair. the tax credits are lifelines. can i ask you to paraphrase something? to set a little bit about the liberal democrats and conservatives were abolished certain tax credits and you couldn't support the conservative party that wanted to do that, what about the liberal democrats?

>> the liberals want to cut the tax credits as well. we are talking about tax credits paid for children. we fought to make sure we can give children and families decent incomes. the liberals will cut tax credits and so will the conservatives. the conservatives want to save 400 million the liberals, 1.2 billion. the institute of the fiscal study said david sign proposal on the misleading incomplete and redress of and i come back to this question why cut children's tax credit for mobile class families when you want to get a big inheritance tax cut to the richest in the country who do not need -- >> david cameron? >> people can remember the record of 30 years. they remember who it was to abolish the tax that the poorest people in the country were the hardest. they remember the measly 75 increase on the tension that gordon brown was responsible for and let me say this the whole reason we are having this debate about how difficult it is to get taxes down, how difficult it is going to be to cut spending is

because this the minister and this government has left our economy in such a complete mess with a budget deficit this year is forecast to be bigger than that of greece. that is why we are having this debate. let's not forget -- >> diman must be lost by the political point scoring to the fact is you are right the taxes are unfair. we have a plan we think it's a great plan to switch the taxes so that you get more money back in your pocket. that is what i think we need to do to make the tax is fair. >> was but one other question. thank you come clegg. this is from iain greg. >> this is clearly grossly unfair. defunded the banks yet for the bankers to award huge bonuses and ordinary people are worse off and many have lost their jobs. how will each party bring the version of fairness to this very unfair situation.

>> david cameron? sprick it is completely unacceptable what has happened and we have to grow it very hard to sort this out in the future. the first thing we need to do is regulate the banks properly. we would put back to the bank of england part to regulate the banks including having a big stay over the appalling bonuses that have been paid. the next thing we need is a bank levy and don't wait for the rest of the world output at all and now to start getting money back from the banks people have had to put in. we also want to see the bank of lending again particularly to small businesses so we need to make that happen and something else may issue is this. retail banks that you and i put the deposits into should not be be hitting like casinos taking while the vets that we agree with president obama's plan that is singing those banks shouldn't be able to take part in the most risky activities. but i think what sort to get this under control and make sure the banks serve the economy and serve the people rather than the

people and the economy surging the banks. mr. clegg? >> specifically on bonuses, i would say we need to do the following. first, final draconian i think is now necessary. we should say no bonuses whatsoever so the directors of the banks tall levels. why do i say that? i don't want people actually running the business is who should be running for the long term interest of the business and indeed their clients to be kind of susceptible to the temptations of the bonus incentives. pay them lots of money, give them a chance to membership in the golf club but don't give them these bonuses. then i would say absolutely no cash bonuses at all about 2.5 thousand pounds and finally i don't think banks making losses should handled by cheadle iain pond bonuses at all. no bank, no bonuses, no bonuses to people at the director level and no cash bonuses above 2.5 thousand pounds. that is specific and tough but it will finally reach out this

outrageous abuse of the bankers' bonuses. >> mr. brown? >> david, i have to nationalize and we have also to take over the royal bank of scotland and the reason we did so was to save the savings and deposits of the families throughout the country. if we hadn't done that the banks would have collapsed. but not have to restructure the banks in a way that is in the public interest. i have never been so angry as when i talked to the chairman of a bank told me the night before his bank collapsed all he had was a cash flow problem when i knew it was a structural failing that was fundamental and the banks needed immediately. what we've got to do is recapitalize so that they are safe for people. what we've been got to do is make sure as we are doing that we are fair. we need a worldwide agreement to get a global financial levy that is charged in every country so we are not undercut by other countries and there is a race to

the bottom but i'd say to those bankers we will never allow them to act in an irresponsible and unfair way again. >> david cameron? >> with the prime minister just said is if you look at the labor record over the last 13 years they did hit the fortunes of the economy to the city of london and we got into a situation where we ended up with the whole economy having to serve the banks rather than the other way around. i assume the banker who is being told that was probably fred goodwin, fred unshredded. it was actually this government that gave this man the services to banking. he not only broke his own bank, he very nearly brought down the whole economy. and i think most important is we put the bank of england back in charge of regulating the banks and give them the specific duty of calling time on debt in the economy. things got completely of control. the banks were regulated but

badly and by the of wrong organization and the one-party vote wants to scrap the current system and put the bank of england back in charge and change things is the conservatives to expect david cameron has been talking about the party is being too close to the city. the blunt truth is both conservatives and labour government for ages have been far too close to the city basically preferring the interest of the one square mile of the city of london or the 100,000 square miles of the whole united kingdom and what i think we now need to do is look fundamentally at what went wrong in the way in which banks were working. my view is as long as you have banks that mall up high risk free-wheeling casino investment on the one hand and the conservative sober retail banking that we all depend on the new are asking for trouble and that is why the government to the bank of england said this as well many people are increasingly saying we should split up the banks between investment banking on the one hand and eye steak the income on the other in order to insure

that we never ever again have the banks hold a gun to the rest of the british economy. and still we haven't done enough to put it ourselves about risk in the future. >> we have tax on bonuses with a 2 billion tax and pre-budget report. we are insuring that every penny that is given to the banks comes back and that is why we are taking the action necessary to recoup the money from the banks. i want to global financial levy that america i've been talking to president obama about and france and germany are part of because i don't want a race to the bottom of banks moving out of the country. iraq failed. it was a small bank. it is a big bank. it's not the size of the banks. it's the way some of them are being run and i tell you the answer, david, is not to do what you said in our manifesto. york cutting operations for banks in the manifesto. you'll take money from investment allowances from the industries in this region and

give the corporation tax cut to the banks. that again i'm afraid is the same party. >> let's explore the arguments of it. >> let me take one point which is having learned the lesson of having to fan of the bank's that we must never was also the position of bailing out other european economies and people need to know the liberal democrats in a manifesto are still in favor of joining the euro as late as last year nick clegg said the euro would be the anchor for the economy and its recognized the massive strategic error it would make. >> if the economic conditions are right and it's good for pensions and savings and of course it always has to be decided if we do that as a country on a referendum you can vote on it. but it goes back to the issue of the bank's. gordon brown talks but waiting for the rest of the world to

catch up in terms of levy. i think we need to impose a 10% tax and 10% levy on profits the banks now and i tell you why because under our tax system in the country the banks can offset the tax today against the losses they've already made and that means for some banks they are not paying any taxes at all even though we bailed them out and the only tax they would pay would be 10% levy that we say should be on the profit. that is every forward for the rest of the world to catch up it will never get around doing the business. >> we are taking the money back from the banks and insist on doing so. we own the shares of most of the two big banks and the shares of the volume we will recoup the volume for the country so we have done business for the country which is to nationalize but then when we sell on the shares of a future date. we will continue to fight for the global levy and it will happen this year but it will happen in a way that banks don't leave the country. banks stay in our country and i

come back to the question i asked david again she didn't answer the question on inheritance tax. corporation tax he will cut off for the banks. why is he cutting the corporation tax for the ranks and he stated he wants to ensure they pay their share. 3 cents is money taken from the manufacturing industry again is the same conservative party. islamic we want the bank let the to get the money of the banks that all of us have had to put into the bank's. do i want to cut taxes on all businesses particularly small businesses to get the economy moving? you're right i do. we've got to get this economy moving otherwise we are not going to get the jobs or the investment and wealth we need and the prime minister has to face up to the fact that right now it's not working. small businesses, and say i've never gone over my over draft limit or broken my covenants but i cannot get the loan. we stuffed these banks full of money. they are not lending and we need some action from the government is going to with its sleeves,

stop trying to defend its record and recognize we need change to get the economy moving. >> thank you. let's move on. we have more on the economy and a question from gene simpson. >> this area used to be full of business. so many of them being shut down and sold abroad. i want to know how you propose to build the country's manufacturing industry. we can't just have offices and shops. islamic clegg? >> i strongly agree pure devine from the city to report of its industrial heritage. i think the first thing we need to do is get the bank's lending. if you don't get the bank's lending for the manufacturing companies it's like the body without blood circulating. i was at a small company a few weeks ago a very good example. the manufacture new environmentally sustainable

right thing. they can't expand because the banks won't lend at reasonable rates. the banks we yonah linda less. they should be lending more. it's your money that is going to bail them out. the second thing we need to do is invest in the kind of things we need in the future. affordable housing, clean energy, public transports, the kind of things that create jobs for the young people and help manufacture and create the infrastructure i.t. we need for the country in any event. gordon brown? >> i visited a manufacturer today who is involved in selling to the rest of the world including to china and asia with the most advanced precision manufacturing and i believe over the next few years can create 400,000 jobs in the low carbon industries. i believe we can create half a million jobs in the julca industry of the future and i believe that biotechnology in this region is good as well as advanced manufacturing to see

100,000 jobs but as a government we are investing with these companies and the equipment they need for the future putative sali and optimistic about the future of the british economy and optimistic about this region. what i would insist on however is the banks do lend and that is why we appointed an arbitrator where people are dissatisfied with what the banks design and they can go to them and we will back them up. second we will continue to give investment allowances which would be abolished by the conservatives and third, we will maintain the regional to the limit agencies which again the conservatives want to remove. it's very important we back of regional manufacturing in this great center of manufacturing industry for the country. >> just a reminder in this area, the birmingham area is full of business is so many of them being shut down or sold and gone abroad. i want to know how you propose to rebuild the country's manufacturing industries who can't just have offices and shops. david cameron? >> i think that gene is

absolutely right. here we are in birmingham. this was known as the city of a thousand trades yet the last 13 years we have lost 60,000 jobs in manufacturing. we've been losing manufacturing industries in the 1980's. it's been a tragedy. we have to rebuild. how do we do that? let's start with investing making sure great universities like this are producing the entrepreneurs of the future. let's make sure we have printers ships. so much of the government's training budget is wasted and we say let's have an extra 200,000. that would make a difference. but you can't ignore the basics of actually making it easier for businesses to employ people. that is why i come back to this point if we keep putting up the cost of one person saying to another, and work for me we are never going to get more in climate so as far as the technology and apprentice ships and raising the status of the teachers making sure that we report on to panora chabad yes having lower taxes for businesses, that is part of getting them.

estimate how do you respond to the arguments of the other two? >> it happens i agree. we all must agree on the plains about the investigating new technologies and in the college hearing people developing vocational qualifications between the need for the skills of the future. i think that is a good thing that basically all of the parties agree on. when i come back to this point unless you have banks helping businesses it is extremely difficult for them to span the products and invest in a factory and also invest in creating new jobs. who would have thought kuran birmingham of all places a bank that you learn to the been involved in lending money and money that you've given to them in the bailout, the taxpayer bailout should have used the money to help fund and craft of the american multinational takeover leading to job losses in britain. when you blend of the money to the banks did you think the

money would be used to put people out of ford in britain? no and it was wrong. >> on manufacturing we have the apprentice chips from 70,000 to over 200,000 now and we want to raise the number considerably over the next years. at the same time there were most of its grant universities than ever before in the history and rehnquist to see the majority of students are now women. to help in attracting the regional development agencies have the power to support individual businesses and there's more than 20,000 in this region receiving health with cash flow under the program time to pay. but the problem is we can't take money out of the economy no as david proposes and help the businesses can survive with orders. you have to keep the money in the economy. you can't take invested allowances away from businesses as david proposes to do to pay for the cooperation tax cut in banks' without minute director and suffering yet you cannot help the region to take away the regional committee agency that is doing so much good as we have

to face up to the fact we have to act now. we cannot take money out of the economy, and we've got to support manufacturing and not with all the support that david would do with his policies. >> david cameron? >> i think there is this confusion between the government and the economy and gordon brown doesn't seem to understand that actually to get the economy going you've got to help businesses employ people and cut the red tape and regulation. let me tell you one thing the government could do to help, the government is an enormous purchaser of goods and services and yet they hardly buy anything from small and medium priced enterprises so we say government should give a quarter of the contracts to the small firms that will actually be the success stories of tomorrow and let's be easier for the firms to register with the government so they can buy services and sell services to the government. that would help get them going. the businesses of tomorrow. that is what we need to build. >> should we briefly discussed the points made.

nick clegg first continue, mr. brown. >> how one takes the decisions to support the new manufacturing industries of the future i think for instance it is fairly obvious to look at the huge number of offshore wind turbines that are now stored up off the coast that we should be a leader in manufacturing this new technology and yet the only manufacturer of the onshore wind turbines are closed and the biggest offshore project 90% of the stuff that's been stored there was built in denmark and germany. why are we not using small amounts of money to invest and hold so that we manufacture the new future as well. >> when the turbines and the development of offshore when the industry as one of our priorities and we are now the world's leading offshore power and including seamen have

included the would invest in power in the country as a result of the government incentives and we are doing the same for the digital because we want 100% superfast that research every community including of rural areas. but you have to have some government finance to persuade people to go to 100% and not just 70%. by technology we are investing substantial sums in the leading cancer and research center that for the whole of europe that will be in britain as a result of the investment we are making. why come back to this point to cut investment allowances, david, to cut the regional diplomat agencies which are a symbol of the region's seas can do themselves and if you do that to cut the tax for the bank's europe in manufacturing industries at risk and doing the opposite of what is needed now. >> thank you. david cameron? >> i want to cut the corporation taxes for small firms, for every firm whatever they do to try to help them keep more of their profits to reinvest and expand to people off.

that is what a growing economy needs. right now we are stuck and the prime minister talks about renewable energy after 13 years of the government we've got one of the lowest shares of renewable energy of any company in europe. the talk and talk. we've had nine ministers i think to of them were the same person that nine ministers several strategists but nothing ever happens. what we need is changed my government that understands the business and feels the beating heart and on japan or is in it and get some things moving. >> you are not answering the questions why are you cutting the elements is for the manufacturing industries? why are you also going to take away the regional different agencies and scrap the functions? what good does that do it to the west midlands that once investment in manufacturing and the regional to the lead agency to work. >> we are cutting taxes for businesses and our forthcoming budget if we win the election and something else we will do is say to every business that starts up the first ten people you take on you shouldn't have

to pay national insurance contributions. that's the sort of thing to get the economy moving. instead what we have with the current government these vast regional bureaucracies paying themselves huge sums of money and not helping the businesses that really want to get the economy moving. >> thank you free much. we are almost halfway through this debate and we have a number of other topics to come to apart from the economy. just before we do these three parties represented here tonight are of course not the only ones in the united kingdom asking for your vote next week. if you live in scotland you will be able to hear from the s&p of tonight's 2:00 news house was newsnight starting a little bit earlier at 10:45 on beebee c2. and on sunday scotland's for political leaders go head-to-head. if you live in wales you can hear the leader of the democratic news and wales and the leaders of of a welsh parties will be on the special addition on bbc to and the

leaders will also debate on sunday at 9:00 on b.c. one. and the debate between the northern parties next tuesday bbc 1 at tenet waukee. and finally on the news after this debate. now, let's go on to another question. take this one please, brad lehane russell. >> or other politicians aware they've become removed from the concerns of the real people especially on immigration and why don't you remember that you are there to serve us, not ignore us. >> gordon brown? >> the only reason i came into politics was because i saw what is happening in my local community and a good fortune of being a member of parliament for people with growth with and went to school with and the reason i want to be in politics is to create jobs and when it comes to

immigration i want to see a situation where we increase the number of jobs that people in britain can take as we live or the number of people coming into the third country and that's why we have bound unskilled workers from outside europe from coming to britain and that is also why we are cutting the members of the semi skilled workers who can come in. that is why we have a list of occupations we want to reserve for people in britain and not for people coming from abroad but what we're doing at the moment is training people so that in the next years as we move forward the jobs will go to people trend in britain who got the skills and britain and that goes right across from the chefs to the nurses is and the teachers. that is where we want to be by training people. that's the future. some david cameron? >> i agree immigration in this country has been too high for too long and that is why we have a very clear approach to cut and cut it quite substantially. in the last 30 years over a million extra people have been

given citizenship that's like another city of birmingham all over again and we say you need to control it properly and that is why we say that the new countries that joined the european union should have transition controls so not everyone can come here at once and when it comes to immigration outside the eop in union economic reasons we believe their needs to be a cap. i want to get back to this attrition where the next number of people coming into the country is in the battle is not as it has been in the recent years in the hundreds of thousands. one of the benefits of that and it is an important benefit is that we can better integrate people into our country and build a stronger society and we wouldn't cure on the doorstep or the streets as we go back to the campaign people worried about immigration because they and other government has listened to them and got it under control. >> let me just remind the politicians are aware they've become removed from the concerns of real people especially on immigration and why don't you

remember? you are there to serve less, not ignore us. nick bbc 1? >> of course you are right we are there to serve you. of course we're there to respond to people's concern. the reason i think people have become so anxious is because the immigration system itself the way that it works has become chaotic on the succession of labor and the government and it talks about immigration of resistance its labor governments removed the controls which i want to see reintroduced so we don't know who is coming in but who should be leading as well. i think we do need a dedicated police force. we need a regional approach that if you come and work here the don't work and are not allowed to work in regions where there isn't work for them to be doing and there will be a strain on public services and we need to deal with the criminal gangs exploiting the legal immigrants who came in because of the chaos

in the system. that is a fair and effective and workable approach dealing with something with immense public concern. sprick once again the politicians are aware especially on immigration. gordon brown. >> i would come back to the question are we there to serve people and how best and i want to create jobs for people in this country and i know that in my constituency and in birmingham at west midlands people are worried about their jobs and job security and whether their children and their teenage sons and daughters can get a job and that is why i want to give a guarantee to every young person under 25 if they or on played the will get a job and there are $50 jobs available under the future shuttles fund picks the shouldn't be redundant and i've been to protect people into jobs by the tax system so that if you are on a short time will get extra money from tax credits so i want to make sure there are jobs for people than britain and training people to

do these jobs. as far as immigration is concerned to tackle the illegal immigration we have biometric visas and national id cards and we will be counting people in and out of the country. we are taking the action and i want to see that action working by the measure we are bringing. >> david cameron what is your response? >> we have to improve the system but we also have to get a grip on the numbers. >> this is important. people have to know what are in the manifestoes. people do need to know that the liberal democrats proposed amnesty for illegal immigrants and that could be some 600,000 people who are here illegally would be allowed to stay here and be given access to welfare and to housing and also bring their relatives into each of the country. i think that is just doesn't make sense. i think is a complete mistake that would make a bad situation of the 13 years of labor even worse and that is why i say with

this problem let's talk about it sensitively and sensibly and bring immigration down to a manageable level and i think actually the public will respond by making this not an issue of future elections. >> do you want to respond? a don't want you to be misled. as the man i'm not advocating. in fact he is advocating boris yeltsin the mayor of london. i think we need to do something about the battle of lots of people living in the shadows of the economy. according durham and david cameron denied that it is a problem and pretend it will go away. it won't. there is a leader of people living years and years in the shadows of the society. nasty criminal gangs who exploit them and create crites in the communities. and one other thing. when we deal with suffering a sensitive immigration but at least be open, honest and straight with you. david cameron says it put a cap on immigration it is complete nonsense since he knows 18% of people come to this country come

from the european union. you can't tap those numbers so you shouldn't pretend and give people false hope that you can bring numbers down when you can't control that great. i believe is wrong to raise conflict on such a sensitive topic. it's perfectly clear of the liberal democrats do suppose amnesty. they can't get away from that and refugee action, actually one of the responsive has criticized him for that and for good reason. we should in this country be trying to encourage people and reward people for the ring to the cutting the right thing. if you have an amnesty for illegal immigration your singing to the people who came here illegally who didn't have the right to come here that is okay and to the people who are queuing up and want to do the right thing and want to obey rules they are being punished. that is one of the things that is just wrong in the country at the moment. we need a different set of values and this isn't there. >> i can see how you send out anything other than the responsible message if you given

amnesty to people who come here illegally and i don't think that nick has presented its policy in the manifesto because there is a suggestion there is an amnesty after ten years who come to this country negative to send this message is wrong because it encourages the people want to come it is once again the conservative party concealing something that either they should tell us or they should say they are not going to do it properly >> very much the style of misleading. i think that there is a problem. the problem i didn't create come you didn't create, they created chaos in the new immigration systems that lots of people can he legally. now they are here. they are here whether we like it or not. i am saying that for those who have been here who speak english and want to play by the rules

and pay taxes and want to come out of the shadows and do community service to make up for what they've done wrong it's better to get them out of the hands of criminals so that we can go after the criminals into the hands of the tax man. you can pretend as much as you like david cameron, gordon brown, that can support people when you don't even know where they are. i am coming up with a proposal that might be controversial. but it's dealing with the way the world is. get real. it is a problem you've created and we now need to sort it on a basis that is a problem that needs a solution. i think it is profoundly misguided. nick has talked, not tonight but talked about 600,000 people having this amnesty being able to say and they would be able to bring over a relative each, so that is 1.2 million detention and all of those people without access to welfare and housing. this could make -- >> will you explain the number? >> by making misleading comments let's just say i assume every time you talk about it it's just

wrong. what i'm saying is that there is a leader of the legal -- >> no, we have to deal with it. we have to get them out of the hands -- as you say numbers, can you now tell me in my right or wrong that 18% of people who come here come from the european union and your cat would make no difference whatsoever? yes or no? >> there should be transitional control. we know what happened when poland joined the european union -- we were told 13,000 people would come and was closer to a million. now, nick, that cannot with columbus. they've spoken that 6,000 people. if that is the number the should come clean about that. immigrants come from the european union which wouldn't be effective, yes or no? >> it is affected by having -- [inaudible] >> rediker we should bring in mr. brown in. ..

would be easier for me to pretend it isn't a problem. it is a problem. it's helping criminals. i don't want to help criminals i want to get those people into the hands of taxpayers and efficient be your they should be deported but neither david cameron or gordon brown. >> we have criminals of the country each year. we must move on to another question and i would like to have one from anna k. blood. >> i'm married and my husband is an accountant and we have two children. we work hard can't hardly topeka for our home or the deposit these days. what would your party do to help the housing because it an

accountant is after the market what hope is there for anybody else? >> david cameron, everything to do because frankly today in our country i think people who try to work hard and saved and obey the rules and do the right thing all too often find hurdle after roel put in their way. there are people who don't play by the rules and don't think about saving and don't think about the behavior often get rewarded and that is not right. now what can we do to help people? first of all we've got to get spending under control as we stop putting the tax is up and we also say that we should have no duty on the first 250,000 pounds and you can buy the property is less than that i think that would help. but above all we've also got to build more houses. i think there's no doubt in my mind we have to change the planning system right now it is against people actually building houses and we think that you need to scrap the top down

targets that need local communities so angry but reward the council with the weld and build the homes to people like yours. sprick i hear more about this than anything else when i travel around the country the lack of a federal housing. there's people in your situation but then there are 1.8 million families that is 5 million people who are still waiting list for an affordable home. what do you do about it? >> greetings, first there are hundreds of thousands of properties in the communities boarded up many in birmingham, too, which i think our modest amounts of money you could convert into homes which people could live in. if you just -- it's not right and people can either [inaudible] we have a plan set up to convert to under 50,000 empty homes into homes people can live in. second i would give local council more freedom to borrow against assets they can invest

in building new homes and third, all of these that we see in the center is built i think they should be converted into the homes people need for young families like yours. >> gordon brown. >> that is an absolutely right the house building industry has not served us well in this country and when the crisis happened the building firms didn't have enough capital when able to survive and so they went under and there was a demand for housing in the country. there are 1 million more homeowners than there were just over ten years ago so more people are buying their homes. what i would like to do, we have extended the relief for the first-time buyers so that is available now. shared equity is something that might be considered to cause that is the chance to buy part of your house and it's becoming more popular way of doing things and we are able to help finance that and work with building societies and banks. of the third thing of course is getting the societies and banks to lend again and we sign these agreements that require them to

lend 90 billion this year. a lot of that for the mortgages. the fourth thing of course as has it has been said using property giving authority the power to build and making sure housing association is also the power to build and an owner occupied a majority in this country and i want increase homeownership and i want to do it quickly with the measures that we are taking. >> mr. cameron what do you make of the argument? >> two things we shouldn't do. we should build more homes the department and part mortgage. i've seen in my own constituency the chance to get 1 foot on the housing ladder and it circumstances change the can increase the mortgage and reduce rents. also reporting responsibility. people who live in the housing associations or cancel homes with a record of good behavior give them a stake in that house so when they move the of the start of some capital to move up the housing ladder. one thing we shouldn't do and this is in the liberal democratic manifesto it is putting the vat on building new

homes. the lift the price even higher out of people like anna's reach. it doesn't make sense. >> it comes up -- i talked about how we need to create properties and about the council and freedom to build new homes, they invest the homes needed. i've certainly seen lots designed for one person private property development put up and they should be made available but i also think that there was a rule for good old-fashioned council houses. it's not fashionable these days but i was proud when i was an newcastle the other day to see that the liberal democratic council started building some council houses again for the first time in 30 years because they helped as well. a more housing gets in supply the easier it is for everybody on the issue of that i think there is a funny glitch in the

vat system that if you pay no vat on site but if you invested your own home is full of rates. i think it's better to have an equalized rate on both to encourage you to invest in your home and perhaps set it at a much lower rate than the top hit a line of the vat. >> what nick is saying and we are scratching beneath the surface now is it would be vat on the new homes under a liberal policy. but i think however is right is that we do as we've done in the local authorities to build and that is why local authorities are again building. but you know i think the other thing that matters is what i call shared equity. this part read in part by but it's housing association of building society is working with people gradually you buy a pure house and i think there will be far more popular particularly for young people in the years to come and the key to all of this is lower interest rates and we've got to keep interest rates low and we have to get interest rates low even during this recession and have done so the last few years. i want interest rates low for

existing home owners and people buying their own home. i'm afraid the liberal policies are too big a risk to inflation and interest rates for the future. >> i want to move to another question. this one is from [inaudible] >> im retired having worked all of my life and some who haven't paid into the system are abusing the lifting of state benefits. what are you going to do to prevent that? >> nick clegg? >> how we encourage people to go into work? i was in the fiscal studies when they compared the three parties manifestoes and said very clearly very directly that the proposal could list the income tax threshold to 10,000 pounds is the best incentive to work because if you keep the money on the low-paid work and part-time work than you have incentive to get off the benefits we're too

many people i meet say to be honest it isn't worth my while to get off the benefits because housing benefit gets withdrawn so quickly as soon as you start earning money but when they are done and quite rightly people look at it closely they think it isn't working. we need to get incentives to work. i believe in a work. one of the most important things in society gives self-respect and i want to encourage that and that is what the tax proposals would do. >> some who haven't paid into the system of music by living off state benefits. gordon brown? >> that is my license policy. with to get people off the benefits and they will be forced to work if they've been on unemployment benefits for a cargo of time. if you've been on unemployed six months we will give you training because we don't want the unemployment of the 1980's for young people and we don't want to lose a labor market for the future and we don't want a lost

generation but we are saying you are compelled to work. you cannot take this as an option he will have to take the job and the training so that is true for the long-term unemployed and for people who've been young persons unemployed for six months. we are also doing a great deal to get people on capacity benefits back to work and the record of doing that is large numbers of people are now moving back into work. not enough they are trying to do it. i believe in burke, too because i've been brought up that work is the way that you report people but it's also the way that you find self-esteem and so britain is one way i want more people working and more people working without brough being on benefits. sprick david cameron? >> what i would say is we should have a straightforward approach and say to people if you can work, if you want to work we will do everything we can do to help you will give you the training and get you what you need but if you're offered a job that you can do and you don't take it you cannot go on carrying on taking your benefits. you've got to say no to that. now the prime minister just said

and i wrote it down no life on the door. because 13 years in the labour government and there are 5 billion people on the benefits. there's still 3 million people almost on an capacity benefit. they have so long to do something about this and here we are tonight talking about the need to cut we stand the need to cut budgets. shouldn't we start with people who can work but refuse to works of people who are doing the right thing don't have to feel this way? i've had so many people in the campaign who said to me i'm going to work and i know people can work but they choose not to. that is not acceptable and we need the chance to make this happen. >> [inaudible] >> he used that word that is powerful and i guess one of the reasons is that you say you hadn't -- when you retired of course you then find the benefits you get are as generous

as they should be and one of the things we need to do immediately after the general election is restoring the pensions. there's been a huge amount of talk in the old party about doing that. let's get on doing it. it's broken some years ago. moving on to the 13 years of the labor government. let's do that. the least anybody else deserves when you retire having worked hard and paid into the common pot is to get a decent state pension when you retire and i would hope would do something to make the experience that we are talking about feel less schooling. sprick the question was about preventing the use of the state benefits. >> cord embrum? >> the pensions should be linked to earnings and we will do that in 2012 when we have the resources to do so. we also introduced the winter allowance for the pension households where someone is over 60 and that is 250 pounds and 400 pounds for people over 80 and we are trying to do our best to create a new regime where

women particularly have a full state pension which they have not had in the past. but to come to benefits we are making a condition for young people these got to the job. make it a condition of for people who've been long-term unemployed that they have to take a job. dispute to .5 million people more and work than in 1997 and yes single-payer as are working now were they used to not work and yes we have more young people in trading and education than we have had before. but yes also we've got to go further and these are the measures of compulsion of requirements to work and the responsibility to work. is back when it comes to ending welfare dependency states had 13 years to deal with it and the liberal democrats have gotten virtually nothing in the manifesto. i think one of the big fairness people have on this issue is people who've worked hard and put money aside when they go into the residential care they have to pay every penny including selling their home whereas people who haven't saved the whole thing pay for free. you can't, there is no money so

we say if you can't put aside 8,000 pounds when you turn 65 you should get your care for free and i think that would remove one of the major of fairness is. it doesn't solve the whole problem but it does both of one of the systems now. what do you see as the key differences between your positions? nick clegg? >> what the perhaps throw out one of them. we are the only party in the general election campaign who has a plan to get people off benefits and into work and that's been independently recognized. it is a general almost philosophical issue. do you think the best way to help people who are former rebel is to constantly give them more benefits through great dependency on the state would do you provide incentives and that is in the tax switch so you keep more money and start working to get people off the benefit dependency and into work.

most people agree it is the absolute priority these days. >> you know what the difference is because we do not want a generation of young people growing up and not working. that is what happened in the 1980's under david party. they left the generation a wasted generation and we've been dealing with the consequences so we are sitting every young person should either be in training with an apprentice shop or college or university or preparing for that training. and everyone should be compelled to do one of these things. you can't publish something for nothing and under 25 will have to take of the opportunity or work on training if they are not employed. that is the best way to do it but we've got to get young people into work. we cannot have a situation there on the street corners and can to the conservative party that keeps the posing of the proposals including the future jobs fund to stop the hon plant in the country. i think that we are still living in the age of the 19 eighties and 1990's.

estimate i am not sure which country gordon brown thinks that he's, minister of. in britain today there are 900,000 young people not on employment and education or training. he has caused record u.s. unemployment. we see on implemented a 40% higher than when he came to power in 1997 after the longest and deepest recession in history. so to talk about it as if somehow he has done a magnificent economic record is nonsense. to answer the point of course you need a better incentives. it's outrageous today that a single mom trying to go back to work its 95 cents of every extra town burned by the state but you do need a penalty. so we would say to people if you go on refusing the offer of a job you can do you should lose your entitlement to benefits up to three years. i think that is important to me to have that as well as incentives to encourage people to work. >> we all agree with that that the benefits should be conditional and shouldn't be dished out for free if people refuse to take. if we all agree on that i have a

plan to make sure taxes reward work when you start work particularly off benefits. the problem is to give tax breaks the millionaire and gordon brown has no plans for people on low income. that is a big difference a big choice. >> the institute of fiscal studies that you were reporting a few minutes ago says that your proposals for financing the tax cut are highly speculative they don't know how you are going to get the money. that is what they said about your proposals. you have to be a risk in the economy just like david. we are trying to get people back to work in difficult situations. low interest rates, get the economy moving, don't take money out and shrink the economy now. that is the way to get people back to work. >> what's the launch a question from michael. >> what we need to do to ensure that the children i teach have as many opportunities to might

as those from any other school? >> of course education is a subject topic policy evolved from england, scotland, wales, northern ireland but the question goes what would you do to ensure that the children have the same opportunities in life and are very deprived area for many other school. gordon brown? >> my mother used to see that when i was growing up what was available for a mother and for a parent was maternity services when the child was born then you would call for vaccination, different vaccinations and then you would come to the primary school of the age of five. now we have no education to three to 4-year-olds and now we have got sure start children centers and three and a half thousand now or not the country and now we have got maternity pay at paternity pay and child tax credits and we are moving forward by making the child tax credit even higher for the payment of under 3-year-olds. now that is the sort of ways

that we cannot give the chancellor's plan interested in the social mobility is a you've got to help children under five develop the potential and have personal tradition of schools for people that fall behind in you've got to anchorage people to stay on the school and get qualifications and this is the way that we could have a new generation of middle class jobs in the country where young people from poor backgrounds could get the opportunities they've never had before and that is what the social mobility that i want to promote is all about. >> david cameron? >> first of all i would like to say big thank you for what you do because i think the teachers perform incredibly important work in our society and we should do more to value them and respect them and raise their status. i think one of the most important things we can do is give the teacher control back over the schools. discipline is the absolute foundation of a good education. and right now it just doesn't work. we have something like 17,000 attacks each year on teachers and you get kids who can be excluded from schools including

one in manchester who is excluded. if it gets put back into the school by the appeals panel that is just not right so we will say but the head teacher is the captain and let them have proper business and change the great evils that stop teachers searching for the and items and make sure that you've proper discipline to the then we need to raise aspirations. i'm sure you do in your school and another education and health debate society where we say nobody's that want to come in and set up great schools of putting and area come on in. we want choice, diversity and excellence. that is where i send my children and that is where i know we have got to do better than we do today. >> so the question is about the teacher teaching date criteria of birmingham. how do you ensure as a leader that they would have the same opportunity in life as those from any other school? nick clegg? >> michael, specific answer to your question what we want to do with setting out on the biggest pledges in our manifesto is to

take two and a half billion pounds from the 15 billion pounds of savings this we've already identified elsewhere in government spending so that we can raise the money given to people, the millions of the poorest children michael is talking about to the same level children get because i think the issue is one of the biggest in the country. at the moment that as the latest evidence shows gets overtaken in the classroom by a wealthy your child by about the age of seven and after that the gap tends to widen and it even affects the life expectancy of a child today in 2010 is likely to die a decade and a half before a child born in the wealthiest neighborhood up the road. that needs to change and we have a plan to deliver more nutrition, smaller class sizes to help those children in the early years when they start

school. >> mr. brown was your reaction? >> i'm pleased that this is about teaching because you never forget your teacher. you remember your teacher and what they did for you and teachers are important. i want in the underperforming schools to be taken over by a good school and that is what we are doing at the moment but you can't escapes the fact if you cut the child tax credit and charge for nurse re-education and cut the school budget then you put the future of these young children at risk and i am afraid the liberals and conservatives want to cut the child tax credits. david also wants to charge for the education and at the same time he wants to cut the school's budget which we but continue to finance and therefore he is making the people who have the poorest pay the cost of his policies when he still has this ridiculous policy of inheritance tax. >> david cambron? >> you fertile for the prime minister who has got absolutely nothing left positive to say. 13 years of economic failure

that suddenly is quite a lot of educational value. 13 which inequality has gotten worse in which they haven't gotten the groups of the problem and that is what you hear. let me give you some positive things we would do that would make a difference. we've got to get the basics right. i am very clear teaching children to read and write using the old fashioned synthetics phonics method works best. second, viability. you accept them to say that stretch the brightest peoples and help those falling behind. that can make a big difference. i had an argument this morning with a special needs education. i want every child to have a choice between special-education it mainstream education but please let's stop closing the special schools that do so much for families another country. education is about the basics, yes and it's also about aspirations. say to every child no matter where they come from you can go all the we according to your talent. that is what education should be like and that is what it would be under our government. >> of course gordon brown is

right. and you know this better than we do. under performance in the classroom is that linked holding back so many children. that is what is unfair and that link is the link the i want to help solve and we would do it through the tax proposals i talked about earlier giving people 700 pounds back in their pocket by raising income tax threshold to 10,000 pounds so the people of ordinary incomes who are not being helped the mullingar helped and through our proposal we call that a technocratic people premium it basically means extra money, two and a half billion pounds that would for instance allow our schools to reduce the average class size and average school down to 20. i've got three young children to move them go to a local school, eight and five. i see for myself as a father what happens to the young children, one, two, three, it is so important in developing the self-confidence and the social skills and a willingness to learn. getting it right to the early age and we can help people make

a good life. that is what i believe. >> i felt passionate about opportunity for infants and young children and that is why we introduced the tax credit and created the children's center that is focus for the community and why the education is at three and not as before at four. that is why we are financing to russia for people in the schools so that if they fall behind the can catch up but i do see all of this is at risk because david is not answering the question. he's been to cut the child tax credits and the school's budget and he's going to cut nurse reeducation by charging for it and he's got a coalition for cuts on the child tax credit for the future. now that is not the way to deal with the problem that the questioner who is so concerned about opportunities have raised. you can't solve the problem by taking the wheel of the advances remand. i think people will see if straight through that as an attempt to try to frighten people. i have two children.

my oldest is of the state school in the london and i want every penny of the education budget to follow people like mine across the playground and into the school and i would say after 13 years and the labor government there is a lot of waste we can cut out. they spent 300 million pounds a year. there's a fact that teachers get 4,000 pages of information every year. the department of children's schools and families spent 3 million pounds itself including and i am not making this up on the massage sweet and contemplation room. this government can be tough but we don't need those sources. get the money into the classroom and stop trying to frighten. disconnect the sold claims and counterclaims. of course gordon brown is right to say that the conservatives -- i don't know why they want to cut the school's building program. it is a silly thing to do. we need to continue to invest in

the schools but gordon brown to constantly the claims and come back to the simple thing that when money is tight surely it isn't right that someone on my salary could be entitled to have tax credits. why don't we focus that money on where it is needed and also used the money that we can save elsewhere to explain to invest in those individual children who need that individual care in the saturday morning class as the evening classes, the smaller class sizes all of the things as a parent i and michael knows as a teacher makes the most dramatic difference in a child's education. >> a million people would lose the tax credits from the book in your proposal. >> we have to bring this part of the debate to an end. thank you very much to all three of you. and now we and with final statements from each of three party leaders. david cameron please start. >> i am standing here for the

simple reason that i love this country and i think we can do even better in the years ahead. we can go on and solve our problems and do great things. but we need a government with the right values. we need a government that backs the use and understand that families the most important thing in our society. we need a government that backs work and people who try to do the right thing. and we need a government that always understands to be as safe and secure is the most important thing of all. ..

>> everything i said during the free television debate is driven by my simple belief that if we did think differently we can build a better fairer britain. if you decide how to cast her vote of course you will be told by piece to that real change is dangerous, that it can't be done, but don't let anyone scare you from following your instincts go together next week we can change britain for good. just think how many times you have been given lots of promises from these old parties and when they get back into government you find nothing really changes at all. we can do so much better than that at this time. of course i can't guarantee there aren't problems, but i can guarantee that i will work

tirelessly to deliver fairness, fair taxes so you pay less and the people pay their share fair -- fair share. a different approach to the economy and decent open politics that you can trust once again. i believe all this can happen. this is your election. this is your country. when you go to vote next week, choose the future you really want. if you believe like i do that we can do things differently this time then together we really will change britain. don't let anyone tell you that it can't happen. it can. this time, you can make the difference. >> thank you mr. clegg and now for labor, gordon brown. >> these debates are the answer to say that politics doesn't matter and i want to take where everyone who has been involved in these debates over the last few weeks. they show there are big causes we can fight for and they'll

show big differences exist between the parties. i know if things stay where they are perhaps in a days time david cameron perhaps supported by nick clegg would be an office but i have had the duty of telling you this evening that while we have policies for the future, the conservatives would put the recovery immediately at risk with an emergency budget. david has not been able to confer that it is the case that inheritance tax will go to the richest people in the country. i believe that he is planning to cut the school budget and he has not denied it. i believe also tax credits will be cut by both parties if they came into a coalition. i believed believe too that policing would be at risk from a conservative government because they have not said they would match us on placing a binder and the health service guarantees we have that gives every cancer patient the rights to see a specialist within two weeks, that would be scrapped by the conservative government if they

came into power. i don't like having to do this but i have got to tell you that things are too important to be left to risky policies under these two people. they are not ready for government because they have not thought through their policies. we are desperate to get this country through the recession and into the recovery and that is what i intend to continue to do but it is up to the people people to decide and it is your decision. >> thank you and indeed thank you to all three party leaders who have taken part in this debate into our audience here. i hope that the debate here along with the other two may have helped you to decide where to put your vote next thursday. i will be back for question time on bbc one. but, from me great hall of birmingham university, goodbye. [applause] ♪

♪ [applause] you have been watching the final british election debate courtesy of bbc news. you can see it again in its entirety on our companion networks c-span this sunday night at 9:00 eastern and pacific.

now a senate hearing on children's privacy on the internet or go to we'll hear about average to update the children's on line privacy protection act which was originally passed in 1998. marc pryor of arkansas chairs the commerce subcommittee on consumer protection. this is an hour and 45 minutes. >> i will go ahead and call our hearing to order this morning. i want to welcome our witnesses and thank all of you for being here. this morning we will examine children's privacy and how well the children's on line privacy protection act or coppa is working. consumer protection subcommittee has jurisdiction over the federal trade commission which enforces the statute. the ftc is currently engaged in re-examining the implementation and effectiveness of coppa.

protecting our children's on line privacy and safety is a critical issue whose importance cannot be overstated. on line abuses such as harassment, threats, cyberbullying should never be tolerated. today's discussion could not come at a more pivotal time in and technology developments and innovations that greatly beneficial in many respects contributing to the complexity of today's on line space. i'm concerned about our kids on line safety for a number of reasons. first, we know that while some companies are making great strides to protect young people from predators and on on line dangers, the disclosure of personal information by young people is prevalent. researchers are impacting the implications of this disclosure. second, recent report suggested location-based advertising is tied to social networking.

it also appears that technology technologies such as gps tracking capabilities to track children without their knowledge. more kids have access to phones and tracking devices and mobile technologies increase in sophistication, greater understanding of how children could be impacted is essential. third, i know, we know that our young children are using the internet now more than ever before and we know that they represent a large portion of total on line activity and according to one report, and the last five years we have seen the time spent on line by kids ages two to 11, ages two to 11, increased by 63%. children that age make up almost 10% of on line users. i am interested in all the witnesses thoughts and regarding the appropriateness of the statutes age limits, what constitutes children's personal

information, how parental consent is best achieved, and how operators maintain the confidentiality of the security of information that they do collect the unauthorized about children. the ftc is considering both how to better prevent the authorized collection or the use of children's information and how to educate parents and teachers about the importance of encouraging children to protect themselves on line and i look forward to hearing from all of our witnesses especially the ftc on what they are doing and i also want to thank our witnesses for being here today. not all members of the business community were willing to present their views, specifically we asked apple and google to come but they declined. i think that is unfortunate because they are major players in this area and we are going to have a long and in-depth conversation that starts today at this is going to go on into the future and i think it is

unfortunate that apple and google chose not to participate in this discussion. without i would like to turn it over to my ranking member, senator woodward. >> thank you mr. chairman for holding this important hearing to examine the children's on line privacy protection act, coppa and its application in today's ever-changing technological world. we lee as his subcommittee are responsible for consumer protection and are mindful that protecting our children is essential and i applaud you mr. chairman for your commitment toward this goal. the internet provides the opportunity to share information with both adults and children. this has led to her current revolution in the availability of information to almost anyone who has access to a computer. a flood of information however brings new challenges. such challenges are hard to ensure the privacy of information by children and they

use the internet. copper was created to address the privacy concerns that arise with internet users under the age of 13. we have worked to maintain the security of children's personal information on line. doll so ensures that parents know what tools and resources are available to help them be more aware of and have some control over what their children are doing on line. i commend the ftc for its continued efforts to enhance parents involvement in children's on line activities. i particularly want to highlight the consumer education efforts at the ftc taking consumers and business is aware of their rights and responsibilities as one of the most effective ways to ensure that the law achieves its goals. one of the best examples of this is the ftc's guide, which teaches adults how to explain to children the risks that can be associated with on line conduct.

however even with these efforts there is still many challenges parents face in protecting their children's information on line, and it is important that the law be equipped to meet those challenges. keeping pace with technological changes is a difficulty that many industries face. it seems almost every day there is a new application or product unveiled that is a little faster, little better and a little more complicated than we were using yesterday. this presents new and unique challenges in efforts to make sure that technologies are safe for consumers. i have been a parent for many years and it is important to me to keep my children safe. i am also a new grandparents and i'm amazed to think about the opportunities wifi -week-old granddaughter will have. her generation will be able to access information and learn so much more than those of us in

this room ever imagined. a significant portion of those opportunities will be available through on line technology and innovations occurring today, tomorrow and years into the future. these rapid and continued technological changes however can make it difficult to consider regulations for the internet. our first priority is to ensure safety, but we must also take care not to stifle innovation and business development that drives our economy and makes possible so many of the opportunities available to our children. there've been many suggestions about ways to improve coppa and help it meet congress' goal in today's world however there have been many concerns expressed about the effect these changes could have not only on innovation but also on the very goals that coppa strives to achieve. i think it is important for us to take time to consider these conflicting concerns and better understand their ramifications

in both children's on line privacy and children's on line experience. thank you mr. chairman. >> thank you senator. senator rockefeller. >> thank you mr. chair and you already pointed out the 60 million children who are availing themselves of these technologies these days. and, i listened to the good senator from mississippi and i understand they need to encourage innovation but every time it is a choice between for texting children or protecting privacy, protecting innovation we always seem to go with innovation and we just don't go with privacy, so that is what coppa is all about and i'm shocked. i am actually shocked that children from age two to 13,

which is totally relevant. it has to be children up to 25 or something like that. it is ridiculous. so they get you google facebook and to some less decent terms of searching on the web. of course that is the point so accessing these web sites whether they are well-known well-known are popular are outright illegal have enormous privacy considerations. this is not innovation. this is a privacy meeting. we do this in this committee. we protect people and particularly we protect children because they are the most vulnerable of all. a lot of these companies are collecting personal information and that is a benign term and people are giving up all kinds of information and they have no idea of. so, we-- has been indicated in the ideas to keep personal

information private, but then the whole world has changed since that happened technologically. the entire world has changed. so the ftc began an effort to review its rules. actually they should have done so starting somewhat earlier and i want to talk about that but at least they are doing it. i really think congress has to take a very hard look at whether it should be updated. if ftc isn't going to do it to cover new businesses and i look forward to working with senator pryor and i want to echo what he said. i appreciate the fact that microsoft and facebook are here and i also do not appreciate the fact that apple and google are not here and i'm curious as to why they are not. was it too expensive to send legal counsel? they couldn't get the people here because they couldn't afford a plane tickets? were they trying to avoid something? were they trying to hide something? when people don't show up when

we ask him i have the power of a subpoena which i would absolutely love to use. i have not to this point but all it does is it increases their interest in what they are doing and why they didn't show up. so they made a stupid mistake by not showing up today and i say shame on them. this is an introductory hearing. we are starting an important public discussion. all of us here are tremendously interested in this and you know, children's safety comes first always. so, we began and as the chairman has said, we are going to-- it is going to be the first of a number of hearings. children not to be taken seriously. they are not. they are part of an age that we are not a part of and technology, and it is dangerous for them. there are all kinds of horrible things that they can see that parents don't know about. if they don't know about it they don't know what the rules are so we have responsibilities and i tangle the chair.

>> thank you mr. chairman and i would note for the record that chairman rockefeller has a long and distinguished and successful career in protecting children. >> thank you mr. chairman and senator rockefeller for all the work you have done in this area. it is remarkable as my colleagues have noted how quickly technology has changed over the last few years. i still remember this. people would say if you want to program your vcr, ask your kid that now vcr's are a thing of the past. new technologies, devices, programs and applications that completely change the way we work and communicate. from gps and geolocation on smart phones to the ubiquity of text messaging and twitter to posting our photos on social networking sites, the world is quickly changing and no group adapts to new technology quicker than young people and as was noted by my colleagues, nearly 60 million kids aged two through 11 are active on line and make

up 9.5% of on line users. these numbers are growing as more and more young people are logging on. the average and child spends more than 11 hours a month on the internet and a 63% increase over five years ago. this is one of the more sad facts. one survey found the top five internet surveys for children under 13 are youtube, google, facebook, sex and. clearly the on line world has changed dramatically. i think if you look back in the coppa rules adopted 10 years ago that would not have been the case in you couldn't have checked what kids were checking in. they probably weren't checking into any of these things so it is very important we examine this world to ensure that it keeps up with the technology. i have heard a lot of stories in our state working with senator thune on the peer-to-peer legislation we have of changing technology that has been so great in so many ways and

innovation has severely hurt people's privacy rights and when it comes to kids we reach a whole new level. i am looking forward to working with my colleagues to work on this rule and make changes that are in the best interest of everyone. thank you very much. >> thank you senator klobuchar. i would like to say that for all of our witnesses, we have a very distinguished panel today and we could spend a lot of time introducing them and going through all their experiences and their degrees in all their backgrounds and it is a very impressive group, but that is all part of the record so i am going to just go down the line and introduce each one and ask each one to make a five-minute opening statement. what i would like for you all to do is pay attention to the mics in front of you to-- the lights in front of you and when five minutes is over we would like you to wrap it up. first i would like to introduce jessica rich, the deputy director of bureau for consumer

protection, the federal trade commission. second is timothy sparapani. director of public policy of facebook. next is mike hintze, the associate general counsel at microsoft. nexus katherine montgomery, ph.d.. she is professor of school of communications at american university. next is marc rotenberg, executive director of electronic privacy information center and last and certainly not least is that the children's table here. [laughter] our table was only so long this morning but anyway, we have berin szoka, senior fellow, director of the center for internet freedom and the progress and freedom foundation so thank you all for being here and ms. rich if he could lead us off.

>> mr. chairman and members of the committee i am jessica rich, deputy director of the bureau of consumer protection at the federal trade commission. i appreciate this opportunity to update you regarding the ftc's work to protect children's privacy and enforce the children's on line privacy protection act or coppa. we submitted a written statement today which represents the views of the ftc. the views expressed orally and my responses to questions or my own and do not necessarily reflect the views of the commissioner or any commission. the federal trade commission is deeply committed to helping create a safer, more secure on line experience for children. the commission's rule implementing coppa became effective 10 years ago. the statute and rule applies to operators of web sites and on line services directed to children under age 13 and two other web site operators that have actual knowledge that they are collecting information from children.

web site operators must provide notice their information collection practices and that limited the perception parental consent prior to the collection use or disclosure of personal information from children. operators also must give parents the opportunity to review personal information their children have provided. the commission has taken a multipronged approach to compliant and enforcement, education and implementation of statutory mandated coppa safe harbor programs. neighbors beside the commission is brought 14 law enforcement actions alleging coppa violations. the ftc's early locus on children sites collected extensive amounts of personal information providing notice to parents in obtaining their consent. more recent enforcement actions have focused on operators of both general audience and child directed social networking sites and sites with interactive features that permit children to

develop their personal information on line. a crucial complement to our law enforcement efforts is educating businesses about their responsibilities under the law. the ftc is published comprehensive compliance materials which are available on our web site. we also devote significant resources to entering individual requests from companies about compliance and conducting outreach to industry groups. are growing these efforts to prevent coppa violations before they occur. the commissions consumer education materials and to inform parents and children about the protections afforded by the rules so they know what to expect and what to look for as they navigate on line. these materials are available to the commissions on line safety portal, on guard on line.go. on guard on line provides practical and plain language information about other privacy topics in a variety of formats including articles, games quizzes and videos. our most recent addition is the

guide which senator wicker was kind enough to mention at the beginning. in light of significant changes to the on line environment, including the explosive growth of social networking, mobile web technologies and interactive gaming the commission recently initiated a rule. on march 24, the commission launched a public comment period aimed at gathering input on a wide range of issues including whether there will or definition of internet adequately covers mobile communication and interactive media, whether the definition of personal information is kept pace with technological development. that is whether certain information that isn't named are listed in the rules just a static ip address could allow them to contact the child. the effectiveness and another topic is the effectiveness of mechanisms used to authenticate parents to provide content or seek access to their children's information. to comment period for these questions posed on june 30. on june 2 the commission post a

public roundtable here in washington to hear from the stakeholders including children's privacy advocates, web site operators, businesses, academics, educators, parents, anyone who would like to come on these important issues. the commission take seriously the challenge to ensure that coppa continues to meet its originally stated girl even as children interact boos from stand-alone pcs to other devices. thank you and i look forward to your questions. >> thank you. mr. sparapani. >> chairman pryor and rockefeller, ranking member wicker and other subcommittee members thank thank thank you fr leadership and for inviting me to share facebook's respect of on child safety and how facebook's information provided safer on line environment for teens. from our inception we sought to provide a safer environment for all-- available on the web. facebook is not directed at children less than 13 years of

age residing in the u.s. and does not knowingly collect information for any children under 13 in the u.s.. nevertheless we take seriously our responsibility to protect children under 13 and enhanced team users on line safety. accordingly facebook was built with requirements in mind. our commitment to keeping children off the site starts by requiring those trying to establish an account to enter their age on the very first screen. this birthdate field prohibits children under 13 from establishing an account. this age-based technology places a persistent cookie on the device used to attempt to establish an underage account, preventing the user from attempting to modify their birthday. and facebook becomes aware of the count established a children under 13 we terminate those accounts all information. we emphasize two points today. first, facebook's real name culture and innovative technology enhance on line safety and privacy for teens and

two, congress should not overhaul of the coppa but rather support and encourage, not discourage or prohibit prohibit companies innovation to advance security and privacy. facebook's approach begins with the recognition that no-- and verify users on line or go as a result, facebook developed an innovative multilayer system to act as technological proxies for age verification. these layers are enhanced by facebook's culture which helps us identify fake accounts. before facebook facebook internet users were warned to avoid sharing their real names and information on line. facebook was the first major internet site that required people to build their profiles and networks using real names. this made facebook less attractive to predators and other bad actors who prefer not to use their real names and identities. people are also less likely to engage in negative, dangerous or criminal behavior when their friends can see their name, their speech and information

they are sharing. this creates accountability and deters bad behavior. since facebook users understand their actions are recorded digitally. when users violate our side rules would allow we can pinpoint corrective action to the specific account involves. a real name culture also empowers users to become community police and report violations. facebook users click the record button found throughout the service when they see an appropriate behavior. this substantially multiplies the number of people reviewing content and behavior which we think greatly enhances teen safety. further, facebook's innovative privacy tools allow users to exercise direct control and share what they want with whom they want and what they want. this empowers users of all ages to protect themselves on line. if the user feels uncomfortable connecting with a particular person she may decline that user. if the user feels it a friend is

annoying or-- which terminates the users connection and prevents further contact. further facebook's proprietary-- and combat emerging on line threats. although we do not generally discussed these matters publicly for fear that they may be circumvented or compromised, these technologies allow facebook to perform ongoing authentication checks. we look for behavior that does not fit the patterns created by the aggregate data from a 400 million users. let me tell you suspicious behavior does stand out which initiates a facebook inquiry and immediate remedial action. ..

advances when reviewing privacy and security policy and technology at companies like ours that are trying to do the

right thing. thank you. >> thank you. >> chairman rockefeller, chairman pryor, ranking member wicker, thank you for the opportunity to share views on the children's homeland privacy act. microsoft is a deep longstanding community including children who use our software and services. i want to begin by discussing microsoft comprehensive approach to protecting children's privacy online. i will then identify those areas where we've made progress over the last decade and highlight a couple of key challenges to remain. this hearing is timely. ten years ago this month the federal communications role was in effect. the data goal is to preserve the inactivity of children's experience on the internet while protecting the privacy. that goal remains the essential today. researchers have found that children gain important educational and social benefits such as increased opportunities

for loving and creativity while engaging in interactive activities online and children are realizing these benefits as the increasingly use new technologies to access the internet. including mobile phones, video game consoles and portable media players. but as we all recognize these interactive technologies often enable consumers to his close personal information online and children and of falling understand the terms of the trade-off involved. it is designed to address this issue. microsoft fully supports the objectives of enhancing parental involvement in protecting children's privacy. while children's use of the internet has evolved over the last decade of the objectives remain just hours if not more important today. privacy failure can have an impact on children's safety. therefore microsoft takes a number of steps to protect children's privacy and safety through our own products and services, educational initiatives and partnerships. first, microsoft requires parental consent and offers

parental control for a number of products and services including a xbox and instant message service. for example, the windows life family safety tool enables parents to limit their children's searches, block or allows web sites based on the type of content, restrict with whom the child can communicate and access detail activity reports of the websites their children visited and the games and applications the fewest. second, microsoft engages in educational efforts around the world to help parents and caregivers make informed decisions about childrens' internet use. third, microsoft partners with government officials industry members, law enforcement agencies and child advocates to address children's privacy and safety issues. the attachment to my written testimony provides more details on these initiatives. i would like to spend a few minutes talking. in the past decades we have made important progress in raising awareness of children's privacy

issues. foreseeable many website operators now limit the amount and types of information they collect from children and provide parents and children with educational resources and foster conversation about online privacy and safety. also by encouraging website operators to be more transparent about their privacy practices, and encouraging them to implement parental consent mechanisms we enabled the parents to take a more active and informed role in deciding how their children can to get a vintage of the internet's many benefits. we believe it provides a flexible could send framework that can accommodate children involving use of new technology. therefore we do not believe in a legislative amendment necessary at this time. rather the statute enables the ftc to update its rules and we appreciate the ftc efforts to review its implementation in light of new business models and new technologies. i would like to highlight to aspects of the ftc that we urge to consider part of its review.

first, the commission should provide guidance on how companies can better meet model letter but on the spirit of the law. microsoft goes beyond the letter of the law by proactively requesting agent information and seeking her parental consent for children's use of many other services even when the services are not targeted at children. we take this approach to encourage parental involvement in childrens' on-line activities and enable children to participate in and benefit from interactive activities on line. other companies take different approaches. we encourage the commission to use its copa will review process an opportunity to help website operators and online services to understand how they can honor the spirits of copa in the light of new technologies. second we urge the commission to work with technology companies and consumer advocates to develop more consumer friendly, effective and scalable but it's for obtaining parental content. the ftc explicitly approved fifer entel consent as much as for the disclosure of children's information online. however the methods can be

cumbersome for parents, do all still widely used services and rely on the children's self reporting of age. these issues become more pronounced as children increasingly access the services through mobile devices while providing the notice and obtain parental consent raises additional challenges. microsoft recognizes the task of improving the consent is not easy and there is no silver bullet solution. the ftc's ongoing copa will review provides a good opportunity for productive dialogue on alternative parental consent methods. we are committed to working within the short and long term with congress, the commission and other stakeholders to address privacy challenges raised by new technologies. thank you for the opportunity to testify today. >> thank you. dr. montgomery? >> chairman rockefeller, chairman prior, ranking members of the subcommittee, thanks so much for inviting me to testify about copa. it is a law that i care very deeply about.

during the 1990's while the president of the nonprofit center for media education i played a leadership role and passage of copa working with members of congress on both sides of the aisle as well as colish of prominent education health and consumer groups. and i think we need to remember that in the early days of the world wide web, which was a kind of wild west period, the business model of the one-to-one marketing combined with increasing volume of children as a target market for advertisers created a perfect storm for the marketers who want to use the internet to ticket vantage of young people. we and others documented many of those practices and if we need to remind ourselves of where we were, we can remember sites like the young investors cite that asked for a means of personal financial information from children or one of my favorites which was the batman site which asked children to be good members of the gotham and fell

off the census. that is what we were looking at the time and where the internet was headed. my colleagues and i consulted with a broad spectrum of stakeholders and clothing industry groups to craft a set of regulations that would successfully balance collective interest in nurturing the growth of the commerce while protecting the privacy of the children and i think copa served us all very well. it's created a level playing field by creating a law applies to every online commercial player from the largest children's media companies to the smallest start-ups and send a signal to the industry that if you are going to do business with our nation's children you will have to fall some rules and because it was passed during the early stages of the commerce its creative rules of the road that helped guide the devah limit of the digital marketplace and really curtail the egregious practices that were coming into place. i also think the safe harbor mechanism and is a very important because it permits self regulation but within the

context of government rules and enforcement authority by the ftc. but as others pointed out recent developments and online marketing really want renewed warrant by the ftc. today's children are growing up in an inner city and ubiquitous digital media environment 24/7 and many of the practices we've identified have been eclipsed by an entirely new generation of tracking and targeting techniques briefly i will highlight to of them. one is peter targeting which is an invisible process and a covert process that tracks individual users through cookies and other data files to collect information about them and to design personalized advertising to target them based on their psychological profiles and the behavioral profiles. this also raises the question of what constitutes personally identifiable information and not just a matter of if you are giving a name. the marketers are able to know who you are and get to you and

charge you and the second is mobile marketing which people of mengin and one of the important things is it combines behavioral targeting with location targeting and the research i've done on a children's food marketing and the obesity crisis has found company's greeting discount coupons that will be sent to children's cellphone when they get very fast food restaurant. so what we need to do these inshore the ftc and i am working with the agency to update the law and of to the rules as it was intended and designed to do. finally i do want to say that while copa established safeguards for the youngest consumers in the digital marketplace adolescents have no such protection. we know they are avid users of social networks like facebook and myspace and others and in many ways they're living their lives on line and they are increasingly relying on these social network and search for

personal information and handling sensitive personal issues they are coping with in their lives. so i would argue i am not arguing for a parental verification system like copa but i do think the need is a fair reformation and marketing practices that taylor to the unique needs and vulnerabilities of adolescence so i hope the committee will send a message to the ftc that copa remains important but needs to be updated and then if the ftc should develop specific recommendations for and developing for adolescents as part of the initiatives on online privacy. thank you. >> thank you thank you for a much mr. chairman and members of the committee i appreciate the opportunity to be here today. we are a nonprofit research organization and we also teach privacy law at georgetown and i wanted to begin by thanking professor montgomery for the leadership role she played

helping to ensure the passage of the act. we wrote to the ftc back in 1995 and asked the commission to look at the business practice the been false collection of use of personal information and children and fall with that letter when the hearings and subsequent work are the consumer coalition congress did in fact pass important legislation and we think that legislation sets up a principle that in this new line of fire and it's important to protect young people from the exploitation and manipulation of their personal information. and since the time copa has been enacted the most obvious change is the emergence of the social network services kids live longer by and exchanging information with their friends and that information is then collected and used for marketing purposes and while there are disclosures to the friends who appear to them to be very

transparent and to give them a great deal of control over what they choose to post or not post what's going on behind the scenes in terms of the transfer of the data by companies such as facebook to their advertising partners to the application data element partners and not to the third party websites the proposed to transfer information is much more opaque. now facebook said earlier and i think this is true the most part they tried to discourage the use of the service by children of the age of 13 said they remain compliant with copa but with the haven't addressed and i think the critical question now before the committee is how we deal with a collection and use of this personal information on teenagers children between the ages of 13 whose data is being collected in this online environment and then disclosed to martyrs' and others for purposes completely unrelated to the reasons that they made it

available. the problem is more serious still because in this setting the user has to rely on the privacy policies and privacy settings they are presented with. that is essentially the only way any self-regulatory environment you are going to get privacy protection and what we are seeing increasingly is the company's having collected the data are in teenagers will change the privacy. they will change the privacy settings for the purpose of making the data more easily accessible to business partners and marketing purposes. this is a problem copa never anticipated and i think it is the single biggest problem facing children in the online the world today. self-regulatory approach that relies on privacy cities and privacy policies is not working. and it's also not working in part i regret to say because i don't think the federal trade commission has been as aggressive as it needs to be to go after what are essentially unfair and deceptive trade

practices. they do a very good job on the educational side, no doubt about it. they've provided a very good material to the families and the teachers and educators and others about what people need to do to protect the safety of the children online. but they have not done enough to enforce the unfair and deceptive trade practices and i think the need to do more. i want to tell you briefly one extraordinary story of complaints we filed with the federal trade commission last year that was offering a product ostensibly for parental control but was supposed to protect kids online from risks and dangers parents might be worried about. the same company was gathering the data for the product that they made available for marketing purposes and this is how they describe their own product. every single minute they are aggregating the social media outlet such as chat and chat rooms, blogs an instant message websites to extract meaningful user generated content from your

target audience, the teams. they are talking to a marketing firm about how you're able to surreptitiously gather information on kids on line. we went to the ftc had said to the ftc you need to shut down this company. the ftc acknowledge the receipt of the complaint but never acted on it but the story doesn't end there. when the department of defense learned about how the product operated and they were a time planning to make it a long line to the military families through online store, they said this poses a risk of privacy and security risk to the military families and we will not make available. in other words, the department of defense acting on information that anyone who had taken a close look at the product would have quickly realized was a serious problem need an appropriate decision. the ftc which has authority and expertise to police copa never acted. i think in both of these areas we need to update to the loss of

that the protections for teenagers those between 13 to 18 from the misuse of the commercial information and also for the ftc to get much more aggressive on enforcement. education isn't enough in this area. they have to go after the companies that are not acting appropriately when they collect and use personal data. thank you very much. >> thank you. >> mr. chairman and mr. ranking member. mr. chairman, mr. ranking member, think you for inviting me today despite sitting at the kids table i am a senior fellow with the freedom conditions and you can test imagine how young my colleagues must be. but i commend the steady to the committee for studying copa and the federal trade commission for the study of the copa rule which is an important distinction we should keep in mind. as was claimed for internet jr as we have referred to it cites directed to children 13 copa requires sites either age verify all users or limits the functionality of the site to potential friend for making personal information publicly

available including the sharing of user generated content. copa poses the same requirement on the general audience sites when the actual knowledge they are collecting information from a user under 13 or again enabling the chairman believes the venture reformation. because of the separation and the cost of the to verification copa may have unintentionally limited the choice and competition in the marketplace for the children's content by driving the consolidation in that marketplace. on the other hand, copa has been reasonably successful in fulfilling the congress our original goal enhancing print one falls that to protect children's online privacy and safety. whatever the trade-off i am here today to caution against expanding copa beyond its original limited purpose. copa's unique flexibility and subtlety and its intentional narrowness and my concern here is modest about innovation but also about free speech. copa is flexible because it potentially applies to the entire internet regardless of access device used in putting services scarcely imaginable in 1988.

copa as seóul because it requires verifiable parental consent, not only side and service operators gather pacelli information from kids for their own use, but also of the enable children to make that information publicly available online. even more so, however, is copa's creative solution to the problem of age verification. and in the mashaal i would say that 13 is just right. unlike the similarly named try online protection act, copa requires your action off sites clearly directed at children only and again where the actual knowledge whereas copa the required age verification of all users for any site offering contant harmful to minors. back in 1998 congress considered but wisely chose not to apply copa to adolescence. recent efforts to expand have put online privacy child safety free-speech and anna mehdi on a collision course. several states proposed what we called copa to coicou extending them to under 17 or 18 but once

the age threshold rises above 13 it becomes increasingly difficult to distinguish sites directed at children below the threshold from the general audience sites. with a seemingly small change, copa would essentially converge with copa and extend beyond the discreet internet jr to require a to verification for the sites used by many adults and indeed other states have proposed extending copa to all of the social network sites. but requiring adults and older teens to prove their age by identifying themselves constitute a prior restraint on anonymous communications and this would raise the same concerns that cause the courts to strike down copa to read the of verifications' would reduce online privacy by requiring more information to be collected both from adolescence and from adults which would include a credit card and information. while coppa's dalia will plan and not in a string the regulation under coppa the shouldn't put them in the awkward position of becoming repositories for troves of information in the name of protecting privacy.

northwood coppa expansions katulis ansi for online. some have argued a to verification could protect children by allowing sites to create safe spaces that exclude predators. unfortunately, there really is the technology for reliable age verification simply doesn't exist. even the ftc made it clear they don't consider coppa's parental at its such as the credit cards as equivalent to alj verification. coppa the expansion could also undermine the viability of online sites and services. as you heard here today, some consider the marketers to be the real predators. even though advertising is what we have called the great benefactor to fund the overwhelming majority of online content and services. coppa all the place to the collection of prez on information that could potentially allow the contacting of children under 13 and a network advertising initiative already requires verify all parental consent for behavioral advertising to children under 13. but if coppa were expanded to require general of the inside funded by tayler advertising to tailor verify all users, it would do to the income approach

foundage copa to read in part to become a coppa extension would raise costs for small or new sites and services geared towards miners and interim this could discourage innovation, let trees and raise prices for consumers and as i mentioned before, also a potentially restrict speech. ultimately, concerned about the tailored advertising would be less of a private your safety and one about advertising scholar of the american enterprise has called the fear of persuasion. the idea to get for cizik benet kaput and grows more so with increased relevance. as he has noted by age ten or so children at a full understanding of the purpose of advertising and equally important act of suspicion of what advertisers say. if the government has a role to play in addressing the concerns about the tayler marketing it relies on educating kids about advertising to help them become smarter consumers to be of last week the fcc launched such an education campaign with its tutorial website. the ftc excels in consumer education and should be encouraged in these efforts as a less restrictive alternative to communication. finally briefly i want to caution that h.r. 4173 passed by

the house in the fall would give the ftc the capability to unilaterally change coppa including the age range and i would simply suggest such changes should be made by congress and not the ftc. if congress wants to help the ftc implement coppa it should consider additional funding for education and indeed for enforcement. thank you for inviting me to testify. >> thank you. i want to thank all the witnesses for your testimony and we are going to start off with senator rockefeller. >> thank you, mr. chairman. i have this odd feeling about this panel except you and you and you. it's like we are discussing some kind of a breakfast cereal good for you or not and children are somehow already disappeared from this process, and it comes down i think, and the both of you,

microsoft and facebook, had a good things to say, but you always end up with the idea will we will do this by ourselves. and we really don't need the government telling us what to do. and i have to leave very shortly because i have to give a speech on cybersecurity to a business group. cybersecurity is the nation's number one national security threat ahead of 9/11, dirty bonds, weapons of mass destruction according to all analysis. the private companies, this is parallel, they always said at the beginning, some of you saw that i've been working on this for two years. we could do this ourselves. we don't want the government to be involved in this. we know that couldn't happen because we know that they even have any idea what they were doing about how to take on cybersecurity. some of the larger companies did to a certain extent but most part they didn't. that's like parents.

we want parents to make these judgments which is like seeing people don't know how average fare millie's have to live where people are trying to keep down to jobs and they don't, you know, they themselves might not be skill on the internet and an event they're tired and have things to do so we have to do this for the parents. let's not let ftc do this let's let the congress do that. maybe that was the idea because he thought congress wouldn't be of a tacit. i thought your testimony was not particularly helpful to be honest with you. i thought both of your testimonies were terrific because you are focused on the problem. and either one of you, we haven't discussed really what the problem is. the problem is the kids are watching filth. they're watching phil from the end of lascivious horrible

things and we are trying to argue about 13, as you said should be 18 or 22 or whatever and the companies here are in favor of cleaning this up but not at the expense of being regulated. they want to do it themselves. they would appreciate working with the ftc a little bit. the clear message is they want to do it themselves. my clear messages i don't really think they do. i think that money tromps on this. money always trumps when it comes to information. money always trumps. this committee has come up with so many scam hearings in the last year or so where money drives that behavior and then kids and people that internet users and pop up all these things are left to the side. so i would like you to describe what damage do you think is being done to children by the

inaction? i agree with the ftc they are not heavily staffed or funded and we need to change that. we are trying to protect them from being wiped out all together under the financial services thing and i think we have. i think we have done that. what is the damage that you see being done to a generation of kids coming up with parents who are reportedly hovering over watching every move they make when you know perfectly well they are not? >> senator, i think the primary problem is that young people are being coaxed to reveal a great deal of intimate information and the data is gathered and collected and disclosed to strangers for any purpose that generates commercial value and as a parent of two teenagers, i have a problem with that. i think technology is great and

i want my kids to grow up and be technologically literate and make smart decisions on line because i can't always be there. they need to have the tools and experience to make those decisions for themselves. but i know that there is a point where i can't help them and they can't figure it out of the business practices are designed to conceal from them what is going on and that is why i think the congress needs to act. i think the congress needs to give kids the ability to control how the information about them is being used by others. my time is up. >> i would agree. we have created, the industry has created a system of ongoing monitoring and surveillance of teenagers encouraging them and it taps into the natural the telemental needs to reach out to their peers and to become independent encouraging them to get out a lot of information and tracking everything they do without their knowledge.

salles socializing them into a system where privacy is not valued and i think that is a very deep loss to the society and i do want to respond to what was said about advertising. we are not talking about traditional advertising by the way we are talking about by rall advertising and the environment and interactive gaming and after cars and things that are not what you traditionally think about as advertising. and recent research has found teenagers can be quite susceptible to this advertising and not necessarily aware of all of this and they don't know what is being done behind the scenes. >> thank you very much, mr. chairman. >> senator rockefeller, could i make a brief comment, please? >> i want to apologize if i gave the impression that microsoft doesn't want the government involvement and we want to do this on our own. it is not the case.

we've been supportive of them all to us to approach of online not just for kids but all consumers including support for comprehensive federal legislation which we think is essential. since the self regulation play a role in the best practices we can play a role in education, regulation and enforcement as well and we are very supportive of all of that. >> thank you, mr. chairman. >> senator record. >> thank you for a much and this is a very serious topic for implications for the next generation. i appreciate chair's willingness to get into the weeds on this and i think the testimony of all of our panelists has been helpful. i think it's important that we

hear a variety of viewpoints and all sides to this and i do think that there is a way to -- there must be a way to have it both ways to encourage innovation and to protect privacy of children's information at the same time. so i will ask the panel what do they think about what i just said? has the law reduced innovation and cost consolidation on childrens website? have we created a barrier to entry into the children's websites market? has filled all result donner limitations on content specifically for children?

so if we could just start with ms. ridge and good on the panel that will be my question. islamic obviously tama keeps helping me with the button. that is one of the key issue is that we are going to look at in the review is specially since i was one of the goals of coppa is to preserve that axa's even if kids were protected. we did review that issue the last time we reviewed coppa which was 2005 and we published a report, we said a report to congress and said at that time all of the call mentors and people we spoke to in the research we conducted indicated it had not half that children were being protected and they still have access and innovation wasn't being stifled but we are very interested in the answers to those questions today. >> speaking only for facebook i can say i have seen a strange disincentive because of the law. my testimony was focused on trying to identify the innovative things facebook has

done for the teenage users of the site but what you didn't hear me say is we are not spending a lot of energy on the under 13 side because they are typically not on our site there is a linus drawn between 13 and over and 13 and under and i think that line has created a disincentive for companies to work towards innovative on the side and we need to look at that. i think that is the point i was trying to make in my testimony, senator. >> i look forward to seeing what comes out of the ftc current role review. i can speak for our own company that yes, some of the parental consent mechanisms required under coppa can be challenging and sometimes frustrating to implement, but i think that for the most part it has not discouraged us from continuing to provide services to the general audiences including the young children and some specifically tailored to children as well. it does create additional work

and it's a barrier to entry in some cases because any time that you are designing a finite process where there is a speed bump or even significant barrier having to involve the parent yes, consumers will go away and go elsewhere. but we think for the most part is the right thing to do involving the parent is the right thing to do creating those speed bumps so you can inform children about the appropriate use of the surface is and help educate parents as the right thing to do. irc on the whole coppa has been successful encouraging website to the right thing even the author is a cost involved. >> one of the goals of the law was to minimize the mass of data collection that was becoming state-of-the-art in the early days and the .com boom and e commerce and that is where the business was headed so what we were able to do and i repeat that we worked within the

industry to come up with the set of principles that what honor the privacy rights of young people but at the same time not interfere with the healthy development of e commerce. but if you are going to markets the kids what we are able to establish is there needs to be some operating principle here and i think the industry has done a very good job of working that out. it wasn't easy to sit around the room and try to give okay how do we do this. the final verification mechanism was a tricky one, it was not easy to do but the idea was first enable the parents to know what their children are doing and secondly, make the industry aware that they have a responsibility when they are collecting personal information from children. we've seen a healthy growth of lots of websites for kids, lots of terrific content areas and i think that has been a very good development and i am happy about it. as i said i think that the

search team -- kids will become automatically mature at 13 as any parent can tell you. but at that time we decided let's create this cui earmarks for where we both have these guidelines, and now i think that we've seen a whole new be flat with the weather that raises the issue about okay again and not the same model but what can we do to ensure that they are treated fairly in this marketplace. >> senator bayh wanted to say i appreciate your question about the relationship of innovation and privacy and i suspect we are going to you're a lot more about this and if i can say directly the relationship is not generally understood i don't see this as a trade-off. my wife is a public-school teacher when we talk about innovation and privacy we think in terms of the privacy of safeguards that enable children to to get into of new technology

in other words in the absence of privacy protection i think we diminish the opportunity for technical literacy and training and education that the parents would like to see happen. the innovation people are talking about is what they are not singing explicitly is on the marketing side did not like the privacy rules because they don't want to do the types of behavioral targeting brandt based targeting get your child to friend and advertising figure targeting and that is why they object to the privacy rules but it would take a step back and talk about technical literacy bringing more children to the on-line environment, creating great products and services so that they get excited about new technology. privacy actually plays a very big part in helping to make that happen. sprick let me follow-up,

mr. rotenberg. use if you have children. i take it your teenage? >> yes, sir. >> you might telling us how old they are? >> 15 and 16. >> in terms of knowledge about the protections children need you are probably in a percentile of 99.9 nationwide. what do you -- is it that big of a case what do you need the government to do for your above age 13 children that it's not doing now because you are a good parent. >> i appreciate that, sir, but i mean the government to step in to control the things we can't control in other words if we sit down with our children and go through the privacy settings and say this makes sense or doesn't make sense or that is your call

and that is how the understand privacy protection and then the next week the company says we have a whole new approach now we are going to do something different and we are left with this sense that the tools of the company provided us to try to safeguard our privacy and the privacy of our children i basically become meaningless. so i am not saying the pair and stop the an important role. i think the parents do. but i am saying that it cannot be made so difficult and the businesses cannot hide the way they are collecting this data as they do because there is nothing that the accuser the parents can do to change that. that is completely on the business side and it's done because there is no regulation. there's nothing that prevents them from saying to all of teenagers who 50 on right now the of the great idea and we want to go ahead and do this or not tell them to go ahead and do it. can control that. >> thank you. you can respond to that but also

respond to the question of innovation and privacy. spec what may be clear about three points. first there are always trade-offs involved in the organization and hear the tree of is not simply the question of economics versus privacy but indeed the tree often false free speech. and again, i stress that is because the collection as the term is used in coppa does not just apply to the collection as we need in the colloquial sense such as used for marketing purposes but it is a sharing of information, the enabling of sharing generated contant so when i talk here about the trade-off i want to be very clear i am talking about the ability of users to join the tools and innovation and those tools that allow them to share and communicate and collaborate and this is the flourishing of webb to plato and that is what is at stake here if coppa were to be expanded which age scope so my question is i want to emphasize one of the duties of coppa and is it gives the ftc

flexibility sitting the rule within congress of the ftc has given the need to define the personal information on the internet and i encourage you to do so. my caution however is we ought to be very careful about having congress reopen the door to the one thing that the ftc cannot on its own change which is the age scope and i mentioned the financial reform legislation only because it could indeed get a future ftc ability to change things like the age scope which again presents a trade-off in terms of free speech. my final point is there was a rich mosaic of parental control tools and software messaging available today. my colleague, adam at the progress and freedom foundation published a comprehensive compendium of the tools and again and again in the context of the bill as senator rockefeller referred to, of wanting to prevent or censored kids from accessing the courts have repeatedly said that the tools need not be perfect but the government regulation must yield to the tools where they

exist so our point has been to highlight that these tools exist and we should be encouraging innovation and not just in the sharing of information bill also in the controls available to the parents as well as all users to take really control over their own information and how it is shared and so our answer in a nut shell is the solution to all of these concerns should first and foremost the enforcement of the existing law which applies to again children under 13 and then also education and empowerment and the government has a role to play on every important one and the ftc does this extremely well in highlighting those tools, methods and education and i encourage you to do so but again, caution against changing the statute itself. >> thank you >> thank you for being here. i know you have to slip to another meeting with and you for your leadership and we will leave the record open for a few days for the senators to submit their questions as they want to.

what we think all the witnesses and i want to think facebook and microsoft for being here because i know not everyone in this industry chose to come today but let me start if i can with a question for facebook. in your written testimony, you talk about facebook's culture of authentic identity. could he be leverett on the little that? >> yes, senator, i'm glad you asked. one of the interesting things that happened when facebook was first launched his we defied conventional wisdom at the time about privacy and security. we decided the beginning we were going to ask people to put their real names and build their profile around that and i have to tell you it has been the ball spring of a number of advantageous security privacy benefits for users of all ages of our site it is unconventional at that time that what it meant is it could distort and peter to

identify bank accounts quickly and able to target corrective action at inexplicit accounts and more importantly and there's this community effect that takes place where individuals feel some sort of preparation when they take an action that is tied to the name. it tends to discourage that speech of bad behavior, etc. so we've been the beneficiary of these deficient what we refer to as a name culture. >> you also mentioned in your testimony that you didn't want to see any changes to coppa >> we are not really needing changes at this point because we feel we have done a very good job of implementing the statute. >> you are saying that is true from your company. you are saying that is true industrywide. is a pretty good actor? >> no, of course not and there certainly are companies that are out fliers.

they're always will be at that is frankly why we need stepped up ftc enforcement find the bad actors and take action. >> your view is we've the statute as is but beef up the enforcement. >> that is the right approach. the ftc folks to the generally good job and they would do better to have more resources. it's really easy to focus on the microsoft and facebook and goebel and -- because we argued and we can show up and testify. it's the companies that don't have people here in washington and don't have lawyers on staff that probably deserves the lion's share of attention and they don't get because the press and focus on them and can't be found. >> tell me like dee dee to one like the age 13 and why that should change? what general inclination of the behavior of children's issues should make it 18 and under or something like that, move it up a few years. but tell me why you like 13. >> senator first all i expertises privacy and not so much child psychology or social development, so i can only speak from this perspective. we have found that teenage users

have really had a very successful experience of facebook. there socialized well. they learned the rules of behavior. they are able to actually advance themselves and learn about the world around them. >> would not want to see us deny teenagers the opportunities of living in a digital society. i think that there would hamper kids are not our country and cut them back children of the same age and other countries if we were able -- if we were to prevent them from having access to the site or services. >> thank you. dr. montgomery did you have a comment on that? >> yes, and on but agreed social networks and the internet in general are terrific tools for the young people and i'm also the mother of a teenager and on a can see what a great role the new digital technologies are playing in her life and they really do tap into the key developmental task of

adolescents and adolescents are exploring their identities and they are trying to reach out to their peers and separate from their parents this is something the need to do and be more autonomous, so i can see that in a number of my colleagues have done terrific research the documents that and i think that is great. and i think the problem is teams are out there in very public and transfer and sometimes the parents, social networks. but the business practices of data collection and surveillance that is taking place on facebook and other social networks is not transparent. it is a black box in many ways and i would not be talking about restricting teams from having access to these platforms. i think we need to give them that access. they are very important. but what i would be calling for and what i do call for is for

the government to play a role in ensuring that all of the social networks and all of the platforms, mobile and otherwise that young people are engaged in our operating by a set of rules. these rules can be crafted in a way that will balance free speech and balance business and innovation when we started talking about coppa and what people said we will never be able to do this, this is impossible we were able to work it out, and again, not the model that we have for coppa, not the model of parental verification and restricting access. but a separate set of principles that i think we could work out that would apply to teenagers. >> let me ask you, dr. montgomery, are there a set of principles that exist right now or is there a model rule would apply what we have to start from scratch? >> i think there are certain ec principles for an example that

about transparency into the things that we would expect. i don't see a model out there has yet. i think we are inventing some of these things as we did with coppa but this is the right moment to do so. >> and while i am on you, dr. montgomery, should we leave age 14 as ase or change it? >> i think coppa operates well as it is. i am not necessarily talking about revisiting the actual legislation but we do what to think about protections we could provide for teams and again i think we need to be careful about the model that we create that don't want to see teams totally ignore. >> mr. sparapani, let me ask you, you all apparently have a report button. how is that used? what are the numbers on that?

>> senter i don't have the numbers immediately in front of me but i do have to tell you it easy enough to keep a huge team of employees busy all day and night from around the world which of 400 million users which we do. and they are trained because they become comfortable with self reporting to consider to be inappropriate behavior by others on the site. it does produce a large quantity of reports and of course we treat ghosh those and take the ones that might have a law enforcement component because the top of the list in terms of responding. we put the ones that concern potential threats that only happens rarely. we put those in prioritize those and so these other reports about other militias peter or inappropriate speech drop down a certain knowledge. >> does your company have policies that go beyond coppa? it sounds like you have to set policies that go beyond the wall. >> i guess the place i would suggest is in marketing i went

to distinguish facebook from all other companies i know and some of the generalized discussions that been happening about marketing with teenagers with respect to the marketing to teenagers, facebook never, ever shares information with the advertiser about individual users. it doesn't matter the age of the user. what we do is when we get a request to advertise on the site by a company we offer the hand but never share the actually personally identifiable information with advertising company. i think it's important -- >> notte specific information? >> that's why it's an important protection and i think it has helped our company succeed and i hope other companies will follow our lead on that. >> mr. hintze i know that microsoft for through the various software products offers a lot of parental control. do you know what percentage of

your users actually utilize the parental control? do you have a sense of even a rough percentage of what that might be? >> i don't have the actual numbers of me and it probably depends on the service itself. things like a xbox live for example of the parental controls are built in as part of the account creation process so that when a parent buys an x box were signs of for a xbox live subscription part of that transaction of creating secondary accounts for their children put those parental controls choice is in front of the user so it is a high percentage of users who are children where their parents are utilizing those controls to some level and there's all kinds of different baliles and how deep the parents go it probably depends on the parent but a large percentage of users using it. other services we've got this windows life family safety which is a free download for people to use to help control and help

kids surfing the net and using search services. you know, there is a challenge of educating parents and making them aware of the tools and something we try to do and it's even hard to reach those parents. one of the reasons why we've implemented parental consent process even in cases where we think coppa doesn't explicitly require the general audience site for example we think that is an opportunity to provide that kind of education for the parents to get some of the tools and information, so it really depends across the service. sprick let me ask about to call the windows life family safety. let me ask about that product. that's free? >> yes it is. >> how do parents find out about that? >> we provide messaging and a variety of different ways. we have worked with a number of organizations, children's organizations to provide information to the boys and girls clubs and other organizations like that.

we have provided information through our own sites. we have got dedicated with pages of around privacy and children's safety on the web sites to provide information to parents so there's a variety of means and we try to get the word on these different tools available to parents and get them educated about the risks of children online and the risks the children face and the tools available to them to help protect them. >> i think it would be helpful for parents and you may already be doing this and i am just not aware of it with this product but i think it would be helpful for parents if you guys could take the aggression and periodically whenever the time is appropriate offer almost like a parent toolkit on how to stay safe on line and there's a lot of aspects to that. there's identity theft, there is a lot of fraud issues and privacy issues with kids, just really kind of runs the gamut.

as microsoft offer that in the one place as a semi regular reminder that these tools are available and you need to update your settings etc., etc., do you will do that or is that -- >> we do have proper etiquette in the company. we have the equivalent of tool kits available. we've got a website that has a list of resources available to parents and information available to them to help educate themselves and their children about the risk of online. again, the challenge is making them aware of that and there is certainly things we have done in the past sort of clause i marketing campaigns to the parents to get the information in front of them and there is obviously more that we can do in the future. >> i am not personally a huge internet users. ina user probably a pretty but not extensively everyday and usually not three extensively at all but i wasn't aware of that. so if i am kind of an average parent here i didn't know that

was out there so i would hope we've microsoft and other companies would think about race to be a lot more aggressive and letting people know. let me go ahead and ask mr. szoka about the age 13. you want to keep 13 where it is? >> senator, yes, if you just the most important question of the day the raises this is the well understood aspect of coppa and the point here is not necessarily just to deal with child psychology all those 13 does have to be the age at which the jewish kids have botts misfud dee dee to -- marmots. romeo and juliet were 13 there are reasons it has been a major transition and indeed was chosen by congress but the point we tried to stress in our work has been it would be far more important reason for keeping it at 13 is that when you raise the age of 14 the coppa framework breaks down because again as i

said, coppa basically applies them into ways, to the sites required to preserve to become presume all of the users might be a child and in the sights of factual knowledge so if you to set up at 18 for example he would end up in a situation where sites that might be considered directed at adolescence or might be afraid to be the ftc would be afraid to define the besso are sites to differ profoundly from the sites the are today like what pain when directed at kids at 13 and the difference is adults use the site's the teams use as well and so as a practical matter if you extend coppa free marked a higher age you would for the first time have a government be requiring age verification of a large number of adult users and we've already been down that road before. the courts have clearly held in the litigation of a child online protection act or coppa that to do so would be unconstitutional because it would infringe on free speech rights of the users to access content without having to identify themselves such as the use of credit cards but also the free-speech rights of the

sites themselves to reach the audience which is diminished by the road block of age verification so i want to be clear that from my perspective this is the most important issue that we've talked about here today understanding of why that age for coppa must be kept at 13 for the framework of what i disagree statute otherwise to function effectively. >> thank you. mr. rotenberg, you've agreed that coppa breaks down if you change the 13? >> i've been sitting here listening to mr. szoka's clemency dandridge confused. i actually helped litigate against the copa that raised the first concerns and on that side we are on the same page. but it is almost completely unrelated to the discussion we are having about age verification and coppa. as mr. sparapani explained in a person of any age who wants a