. . her job is to lead the bbc economic's coverage. earlier in her career, she lived in the united states, where she wrote speeches for treasure secretary larry summers. our interviews were recorded across from parliament.

>> i like to use it to explain on the day of an event, but even just in a general way some of the big issues that are going on in economics. i particularly like to use it not just to tack about u.k. stuff. but also the u.k. economies position and the global economy and a lot about the global economy. i'm someone who's spent a lot of time thinking about international issues, and i try to explain those, especially now, so crucial to everybody's lives. explain them in a simple way. sort of a teaching functions, and also a reporting function. >> what did you learn when you were larry summers aide back in 1997? >> well, i certainly learned he's a very smrt guy. i learned it's interesting to have a serious academic economist at the heart of things at a time when international

issues were pretty important. now they look like pretty small change. when i got there, it was july 1997. that was just the beginning of the asian financial crisis which began with this deevaluation by the thigh government then rolled into all these other crisis. we felt -- there was a time magazine cover of larry summers, bob ruben and allen greenspan as the committee to save the world. and it did feel like that at the time. i learned they did actually think pretty hard at the economics of things as well as the politics. but i have to say, and i think larry summers admitted this, it is a lot easier to lecture other countries about taking very dramatic moves, nationalizing their banks than it is to do it themselves. >> how did you come to work for him and what was his job at the time? >> well, he was the undersecretary for international affairs. i think the current document of

that job had been gail braynard. i was wriding articles for the london times. i think in my conversations with the international types at the treasury in washington it came up that i was an american citizen and they knew they got through a lot of speech writers. quite a challenging guy to write speeches for. so they asked me to come on board. i thought it was a great opportunity intellecually, but also as a journalist to see things from the inside. to see what's at the heart of the power of the global economy. >> is there anyway to describe the differences between the way americans govern and the way the brits govern? >> i think there's a lot of different things. it's also to do with the political culture. i'm always struck, and it may sound strange. it may sound a bit treacherous to my media colleagues over here, i think the quality of

intellectual discussion in the media is higher in the u.s. i think the discussion of political issues is some what more dominated by policy rather than crazy washington life. here you tend to get weeks of tiny u.k. stories that i don't think people are interested in. in terms of the politicians, the politicians in the u.k. do talk about the issues probably more than the politicians in the u.s. so i was struck by that. they're worried about their money raising and everything else. it doesn't happen so much in the u.k. >> we need to get back to the stephanie flanders story. those people in the u.s. may know your sister, laura flanders. what's the relationship, age, who's older? >> she is seven years older,

although i get rather disconcerted. people do ask me, i like to think it's clear but i'm afraid it's getting less and less clear. we've had a trans atlantic time of it as sisters. she went to america for six months off. then was going to come back to college here in the u.k. but she fell in love with new york and stayed there ever since. that was in the early 1980's. so we've always had the time going back and forth. i was in the u.k. system, i went through u.k. high school and i went to, ford university. and then on a scholarship went to harvard. i've always spent a lot of time going back and forth. my mother was american although living in the u.k. so i've always felt a pretty close connection. and laura has always been a very activist journalist, and you'll know her for very activist work

and there's been a fine line between her reporting, and her wanting to change the world, which she's tried to do in a lot of different ways. i always felt i was rather the boring establishment member of the family working my way up through the inside. >> i think she said it herself, a lefty. >> certainly in the u.s., she seems lefty, but she would seem like that too. she is not mainstream and i guess, here i'm captain mainstream. >> she does talk show and information. >> that's right, she's got -- she now has her own tv show that she's put onto the web. selling to stations by satellite. basically a nightly discussion program of international and domestic global issues. >> the coburn family, which we know a lot of in the united states, what's your relationship

to them? >> my sister and i both had a grandfather who was a coburn who was a quite lefty, but journalistic family, two generations of journalists. alexander, i know will be familiar to people. and there are two other brothers, patrick and andrew. patrick's a very distinguished international and war correspondent for u.k. newspapers. he's also worked in washington. and he and his brother andrew have written a lot about saddam hussein and many other issues in the middle east. they are a distinguished family. i knew about them growing up. in a sense my half uncles because we don't have the same -- grandmother was different. their mother was not my grandmother.

certainly part of the vibe that we had this heritage. and yeah, we're all quite a crew. i know some people have said in the states they were a bit nervous that so much of left wing journalism was depending on one family. i know christopher hitchens used to worry about that. that we were responsible for too much. >> everybody that has asked who we're talking to in great britain and when i mentioned stephanie flanders, the first thing they mention is michael flanders. well yes, my father is the other side of it. my british dad was a very well known entertainer in the 1950's and 1960's, known as flanders the swan. people are still buying and enjoying the song. there's the "mud, mud, glorious mud" song, very witty, british

songs about animals. they are much loved here. and a lot of people of younger generations are brought up on those soppings. they may not know who wrote them. but they tend to know the song. >> so much trouble is britain in on the economic front? >> it's interesting. if you would asked me that about a year ago, i think people were really gloomy about prospects for the u.k. but there's a funny thing someone once said, and i like to steal the line. the british people are the only people capable of feeling shunned about their own misfortune. we sort of take a glee in things going terribly wrong, we're the worst of this, we're going to lose this. in a way you would never find in america. people love to talk about how bad our weather is, how bad our economy is. it's funny, you have to look past that and think are we really in that bad a shape? because we all like to think that. there was a sort of worry that

there was a loss of control, and that we were particularly vulnerable to this crisis. because we put so much store by our financial system. in fact relative to our economy, we have much more reliant on the money coming out of the london city and financial sector than the u.s. ever was. the u.s. did a lot of trouble, the rest of the world with its financial system. but still actually quite small relative to the whole economy. that's not so much true here. so i think people were pretty worried. and then there's been a sort of shift of focus. i think not so much because things have got a lot better here, although so far fingers crossed, our recovery is looking strong. but also because things have gotten so much worse across the channel in europe. i think the single currency countries, the pressures they're under have reminded people that although we have problems, possibly we have more ways out

of our problems because we're not stuck with the single currency. we had a big depreciation, which i hope will make our exporters more competitive than the rest of the world. also part of this talk about competitive depreciation. i think because we have more ways out of it, people are more optimistic about the u.k. still an uneasyness when we get the good economic figures to come in. >> how does the percentage of debt here compare with u.s.? >> well, it's interesting. we're in the same ball park. i guess the question is, america with its unique position and having the reserve currency, at least for the moment, gets off -- gets special treatment i

guess. they can get away with more borrowing than we can our borrowing, the deficit is similar to the u.s. this year it was 11% of national income. which is roughly what i think it will be in the states. that was considered to be an outrage by the incoming conservative government. obviously much higher than the i.m.f. had to famously come and bail u.k. out in the late 1970's. with this new government, making such strides against some opposition and some concern by economists, i should say. but with this government trying so hard to bring it down, i would say our borrowing is going on a downward path. our debt is still probably in an average level, it's risen a lot. but sort of in the middle of the pack in terms of developed countries. whereas in the u.s. there's still looks like it's going up as far as the eye can see. >> is there any way to compare

david cameron, the prime minster, to any politician in the u.s.? >> that's an interesting question. i don't think you would get a similar kind of character. i'm trying to think. he's very much -- he's quite an establishment figure in terms of his background. comes from what we would say posh background. so do many of the people in his cabinet. so sort of a traditional torry prime minster. but he has become known, at least in the lead up to this when he became a leader, he was the fresh face. he was supposed to be a compassionate conservative. in that sense you could compare him to george bush. but i'm not sure he would embrace the comparison, although in a sense george bush was also from more of a traditional u.s. background. the key thing about david cameron is that he has at least given the impression of wanting to change the conservative

party, make it more modern. in a sense due to the conservative party, what tone you blair did to the labor party. people are more tolerant than they were maybe 10 years ago in the u.k. and also have a more open-minded approach to how do you run government. but on things like the budget, they're pretty hard traditional in the sense of wanting to cut spending pretty sharply. that's something we see here from conservative governments that we haven't always seen from u.s. republican governments. they talk a lot about cutting taxes, but they haven't always cut spending so much. usually they increase it. >> you're a bbc economics editor. what does that mean and what's a day like for you? >> well, every day is different. but that means i'm own of the team of senior onscreen reporters. we have about half a dozen editors, and key ones are the economics one, the political one obviously and the international

or diplomatic editor. we're in a sense, we're not in charge of all the other output on our subject because that would be so impossible with the amount of output that bbc produces on radio and online and on tv. but we are supposed to be providing selectal leadership. that's one thing i use my blog for explaining how we should be explaining a story. so my typical day, i started after quickly making breakfast for my kids, i was talking about the irish economy, whether or not they were going to get a bailout from the european union ministers who are meeting in brussells that's just a typical day. those kind of issues. the euro zone, the ongoing crisis, is something i would be looking at. as well as stuff that's going on in the u.k. >> we have a clip from a report

that you made in march. if you pay close attention you talk about the last governments budget and will compare that to what this government's done. >> there's still a river of red ink running through whitehall. but the good news from mr. darling today was that it slowly, very slowly, starting to go down. call it the count yourself lucky budget. the recession was tough, the chancellor said. but not as tough as we expected. and the difference is down to our policies. now experts will be debating for years whether the government can take any credit for the fact that unemployments lower than expected the number of business failures is lower as well. but the chancellor today did reap the benefits. announcing for the first time in years that the borrowing forecasts were going down. he said the gap between spending and revenues this year wouldn't be $178 billion as he forecast in september, but $176 billion. the number for future years is lower as well. as a result, the total stock of

government debt will be $76 billion pounds lower in 2014 than he thought a few months ago. that's the good news. the bad news is the total debt in that year will be 20 times that. more than $1,400 billion. so the chancellor had room for some morsels for voters, but not many. and they don't last. there's a small net giveaway of $1.4 billion, including the extra winter fuel payments, and that temporary cut in stamp duty for first time buyers. but look ahead, the plans show he would take it all back and then some if labor stayed in office. the stamp duty cut only last two years, but the rise for houses more than a million carries on. he -- >> it's a modest giveaway in the short term paid for by the extra money getting from the bank bonus tax, but thereafter a modest net take away.

you have higher stamp duty, higher inherit tax, higher tobacco duty. but either way it's a small take away. >> that meant he could sound prudent to the financial markets. well, as prudent as a chancellor can sound when he's boring a pound for every four pounds he spends. the deficit, the part that won't go away with the recovery was 8.4% of national income last year. >> basically a politicians budget. the market didn't get any surprises or shocks. we're looking at the election and the real budget. >> mr. darling had some one off goodies for companies as well, but business leaders were under whemmed. >> it's modestly positive. there were some help for entrepreneurs and small

businesses. but some big anxieties about the shape and size of the deficit. >> to bring down that borrowing, we've had more details of $11 billion pounds in savings the central government is going to have to make. there will be many more, but there too, this was a chancellor who wasn't giving much away. stephanie flanders, bbc news. >> they didn't win. >> they didn't win. >> when was the election? >> it was in may, early may. it coincided with an extraordinary crisis in the euro zone. when you talk about what my day was like, they were pretty busy in those days. often it felt like what was going on in the euro zone was more important for the global economy, and even for ore economy than what was going on in the u.k. you had this extraordinary weekend after those results where the conservative didn't get a full majority, where for the first time in a very long time there was a negotiations over creating this coalition which is what's happened.

the first thing they did was announce a much tougher approach to the deficit and indeed a lot tougher than what had been hinted at during the campaign. they threw out the campaign, we've seen, the politicians have not really talking about what will happen after the election. >> related to the united states, if you were over there working for larry summers looking over here. first of all, to the lehman it looks like you're really cutting over here and in the united states they're not. will we have to do what we're doing here in order to survive? >> well, i think that is the big argument. it's interesting because when gordon brown was around, there was this meeting of mind between the democrats and labor. usually in favor of spending, and in favor of growth where as in the euro zone they were more worried about inflation and they wanted to have slow growth. now i know from my time working with larry that there's always been this sort of confusion in

washington, even among republicans. why would the europes want to grow so slowly? what's changed with this government is that we've become a little bit more european in our approach to the deficit and growth. that is a gamble. they admit it. it's a calculated risk. the u.s. is a very strong feeling in the administration, not just larry summers, but also the treasury secretary who i used to work with at that time as well, that you have to put growth first. it's just too risky. >> the jury is out, but what is interesting, for the first time in a long time, the u.s. and the u.k., who come into this crisis with very similar issues. they both had the boom boom times, they both ran up the debt. they had the financial sector sort of spending spree. they had the housing boom.

and they're taking very different approaches to how to get out of it. in the u.s. that need to cut borrowing is being kicked down the road. >> i did some fast calculation. the prediction he was making, if i understood it, in the year 2014, 2015, the united kingdom would have about $2.7 trillion in debt. >> that sounds about right, maybe a bit lower. because $1.4 trillion pounds. >> but in the united states, we have about $13 trillion in debt. >> you have a much bigger economy. >> what is it about five times bigger population? >> i think we're all looking as i was saying before, the stock of debt relative to the economy is going to be in the same ball park i suspect in the u.s. case. probably a bit higher. it's very exciting debates we

cannot have about how you treat the social security trust fund. what i guess is different is the u.k. has put forward incredible plan for putting the debt on the downward path. so you're borrowing less, but also not allowing the stock of debt to rise after the next few years. that's not what's happening in the u.s. >> this is a small thing for you, probably not for that person i was talking to last night who said that you're over -- >> that's the insanity. gordon brown had introduced, what we could call freebies that were introduced by him that now cost a lot of money. it's free tv licenses for all the people. you get a free right, if you buy

a tv, you have to buy a tv license which costs a little under $200, maybe $175. and that goes free to people over 75, even if they're very welloff. now, it's even more extreme in the case in the bus travel. if you're over 60, absolutely everyone in britain can get a card to free bus travel. the treasury would like to get rid of it, they think it's crazy to be giving this free travel to a lot of rich pension as a rich elderly people. >> i had a pass for a week here in london. it was about $40 for five days in one zone. >> yes. >> or two zones. >> that would have been for subway. this isn't for using the subways. but you do see here that there are much reduced rates for

people to go on subways. >> free prescription charges, and free eye test. now i gather under the national health system here you don't get free eye tests or you wouldn't need them if you're over 60. all that's free? >> most of that is free for elderly. i think some of that people would want to keep because they want to encourage people to actually go and get their test. it was a very sticky issue for margaret thatcher back in the 1980's when she introduced some of these charges for the nonretired population. the bus thing and some of these other things, what they call universal benefits that go to everybody, they are under a lot of pressure. there's a fuel allowance that you get. you get a big check for about $300-$400 every year just to help you meet your home fuel

bills during the winter. that's great, but again it's not necessarily needed by a lot of people getting the checks. >> what's this housing allowance that you keep reading about that some people are taking advantage of it. and you see the articles, the sun newspapers did a little series of articles on all the cheaters. >> well, it's called the housing benefit. it's basically help for poorer people, not just actually the unemployed, but people on low incomes to pay their rents. it was sort of developed partly because there wasn't enough cheap housing for people. so this was a benefit that developed. and it's the bill, i think has risen to $20 billion pounds, which is a hell of a lot of money. more than we spend on our police, and more than we spend on a lot of other things. george osbourne, the new financed a -- the new finance

administer came in and said. for them to find a house, to have their rent paid can be a lot of money. tens of thousands of pounds a year. people are saying hang on, why are they getting it when i'm struggling to pay my mortgage or rent. but if you only cut the benefits without doing very much to increase the stock of cheaper housing. and we have a shortage of housing, particularly in london, then you are putting a lot of people possibly out on the streets. certainly you're making them move out of london. so this is one of those things that were identified early on. yes, if we cut money out of them, you would see why they want to produce the bill. and you can see why they don't want any stories of people sitting in mansions at the governments expense. but if you make it very difficult for poorer people to live in london, that will have a knock on for all the people who rely on those kind of workers

for their companies and their houses. peoples cleaners, peoples child care. >> go back to your report on what the labor party promised before the election. what's the difference? can you give us some specifics? >> there were some tax rises which were pretty much the new government have stuck with. but the bulk of the cuts which were being introduced on the reductions and borrowing were going to come through spending. also in the case of labor as well. but the conservatives are doing a lot more spending cuts. so in that sense spending a a different role. a rough guide, alice star darling was planning to cut spending by $40 billion pounds.

under this government it will be $80 billion. that's about 5% of national income. just over one cent a year of tightening. so in a sense they took what he had done, they stuck with most of it, including the tax rises, but they added another half on top. >> you said earlier that you have an american passport. >> i do. >> do you feel british or american? >> i guess you can sense talking to me, i speak like a brit and i feel more like a brit i guess, because i've spent more of my life here and i went to school here mainly. but i certainly miss the states, and i get a bit wistful when i go back to washington and new york which i often do. i feel a sort of kinship with america. i'd be sorry if i never lived there again. i like to think i'll carry on there again. >> is your mom still alive? >> no, she passed away 12 years ago. in fact my daughter was born on the 10th anniversary of her death so she's named after her, claudia. >> picked this in one of the

papers this morning. david cameron's photographer and video makers have left the public payroll after he vowed to pressure over his vanity staff. we see that stuff all the time in the united states, as you know. is that something that this government is getting caught doing that they said they wouldn't do? >> with any politician who announces that things are going to be different and clean and you watch my mouth, read my lips whatever, they always get caught. it's always a mistake to say you're going to be clean, that you're not going to do those things. david cameron has been called out for having a photographer and this video maker who have been working with him on the civil service, on the government payroll. but i would say it's a small piece of it. having to -- occupational hazard for them by cutting waste and having made people think there's a lot of money to be saved in whitehall and the bureaucracy.

>> when did you work for the new york times? >> straight after that, or nearly after that. i was there during 9/11. i was working on the metro section in new york during 9/11. >> how long did you work there? >> i was only there for six months. the new york times and i didn't get along too well. i went to do a particular job and then there was a change of leadership at the top. they had a lot of problems afterwards. the people i worked with there, i really enjoyed it.

local news reporting i had done, it was a hell of a place to do it, and it was a hell of a time to do it. >> rupert murdoch is an example because he owns the "times" in london, "the sun," news of the world for all i know. and in the united states he has fox news and the "wall street journal." is there a difference? >> i noticed it on "the new york times," having worked on the "financial times" which is a very serious newspaper here. there is, if you like, they say they trust their journalists more, or have much lower standards in terms of fact checking and everything else. they basically leave the journalists to make their own judgments. >> where, in the states? >> no, in the u.k. they made certainly other newspapers, but at many newspapers that means there's less -- there's just a lot of stories that aren't true. the sunday newspapers, someone once said to me the great thing

about sundays is stories don't have to be as true, which i thought was rather worrying. that's the kind of way people sometimes talk in the u.k. of course you would never hear that in any serious newspaper in the u.s. and i found i was taken aback initially. and then rather impressed by the amount of attention to detail when i was working with "the new york times." >> your blog, how many american does you see come into that blog? >> it's difficult to know actually. i know particularly if i'm writing about something global it will go on the front page of the bbc global news website which is a very well read site. i know i will get several hundred thousand hits from that. but it's very hard to junl looking at the comments, and i do get a lot of comments. they sometimes will be from the rest of the world. but not so much from the u.s. >> how do you get to it? >> it's stephanomics, probably

go to the website. >> go back to what we first started to ask you about, the difference in governing. if you worked for, let's say the chancellor of the george osbourne versus the treasury secretary in the united states, what would a day be like? what would the attitude be like? what would the speech writing be like? >> i suspect the speech writing process would be similar because it depends on the person. i know there are some leaders who are very careful about their speeches and they want everyone to have seen it before hand and they work on them weeks? advance. i suspect they're in minority. larry and i would be discussing his crucial speeches at 3:00 in the morning and there wasn't a lot of time for checking by the rest of the bureaucracy. i suspect that is similar. what is really interesting and different is the u.k. treasury is much more powerful in the u.k. than the u.s. treasury is.

i was sort of amazed -- i should have known this going in. but when i went spoo the u.s. treasury, what was surprising to me is how imtent it is. it doesn't have control over much. the budget he creates in january is received then compleetly ignored. as you know here it is completely different. it is pretty much all powerful. the chancellor, i have american fans who have been astonished to watch this, the chancellor of finance minister stands up on a certain day, you saw the report i did on the day in the spring when this happened. they stand up on a certain day, they announce what they're going to do. they sit down and then a week or so it will have happened. there is none of the debate. none of the months of painful

back and forth that you have in congress. i think that's the key difference. the treasury is much more powerful. of course when it comes to the rest of the world, no one really cares what the u.k. treasury thinks. but in the case of the u.s., we do have an awful lot of control. some say too much control over the policies that the i.m.f. were posing on other countries. the irony we had control over many other countries policies than we did on our own. >> we have roughly two million people that work for the u.s. government. when we watched the cut and said 3500,000 people are going to be cut in the public service, is that like cutting a fourth of our civil service? how do you fine 500,000 civil service in a country that only has 60 million country. >> they're everybody. it's maybe 100,000 civiler is vents, but also going to be -- the policemen, it will be the

beaurocrats who are dealing with the different departments. also a lot of local authority, local government officials. in that figure, it's all the people working for local government. a good chunk of that -- >> excuse me for interrupting, what control does the prime minster have over the local governments? >> he's doing a classic trick of saying we are going to cut how much money we're going to give to the local government, but give you a lot more control over how to spend it. they hated the fact that the people they were forced -- in a sense, cameron said look, you're going to have a lot less money guys but we're going to stop putting so much control over how you spend it. in that sense he'll have less control over what local government does than his predecessor. a lot of cuts will be felt at a local level.

and in a sense, most voters will be blaming their local authorities for that. they're not going to be blaming west minister. >> as you know, if the president said we're going to cut the money to the states, he may never be able to do that because congress might not go along with it. what about here? parliament says we're going to cut the money to the states, does that mean it will be cut? >> that means it will be cut. >> just like that? >> the stuff they say in particle lent happens. the times when the government doesn't get its way are pretty celebrated and you would hear about them even in the states. in a sense, things are a bit different in a coalition government. because you've got a lot of debate between the two parties, the democrats and the conservatives that have to happen behind closed doors within the treasury before these things get in and out. in a sense there's a new check of balance on the conservatives power that wouldn't normally have been there.

once you get to the point of announcing it in particle lent, unless something happens, then it goes through. that's the parliamentary system. >> as you very well know right across this river, at the conservative head quartirs -- headquarters, 50,000 students came to protest the cut. they're going to raise the tuitions. is that going to float? is that going to happen? and what does it mean to the average college student? >> at the moment, it has all along been a really difficult issue for governments for 30 years. how do you pay for university, education. it used to be when i went to college 20 years ago, it was -- they were just beginning to prevent sort of better off families from getting grants, actually getting maintenance money while they were at college. but i didn't pay a penny and my parents didn't pay a penny for

fees. fees were introduced under tony blair. now those fees are going up. i think the fee at the moment is capped at about $3,000 pounds, or $5,000, and it could double that. of course for the middle class, particularly people very crucial for the conservative vote. that seems terrible. even though the money's going to be paid back doesn't have to be paid up front. it can be paid back. once you're earning and if you're not earning more than a certain amount, you wouldn't pay it back. it's kind of progressive. and the poorest students will get more support. but it's a touch stone issue. but i don't think they're going to back down because the universities say we can not pay or waw. we cannot stay serious academies in the world if we don't get more money.

>> as you know from living in the united states, a lot of politicians, a lot of people say united states is the greatest country in the world. what does that sound like to a brit? >> sometimes i spend my time defending america. they used to be. i think it's changed a bit. there's sort of a snobbery about the u.s. they were a bit too eager and bit too prone to playing their own trumpet. people here, we talk about how we're going to hell in a handcart. i think it's changed. i think there's a respect for the u.s. now, which certainly lasted through any band feeling about the bush administration. people would rather like to think the u.s. is a great economy. i certainly hope it continues to be a great economy. >> so, how's president obama doing in the eyes of most brits? >> i think people are surprised by how quickly his star has

fallen. i was certainly, when i was in seoul at the g 20 summit it was so striking how much less power he had coming into that meeting to persuade people to do things because he had just had the election results, and because there's just a sense that america is on the backfoot. that it's not -- doesn't know what it's doing that is a shame. i think people here wanted president obama to do well. they don't quite see why it's fallen apart and i guess most people would hope it will pull back together by the next election. >> i've got to ask you about a phrase you used in one of your blogs. i had never seen it before. i have never seen it in american english. you say the treasury is predict bli cockahoop, that the ratings agent has revised their -- what

is cock-a-poop. >> my american grandfather would be telling me now exactly where it came from because he learned these things. i have no idea where it comes from but it is a funny english expression for being really psyched, being really pleased. probably has something to do with throwing a hoop in the air, but after this i'll have to look it up. >> when you're in the united states, what kind of things do you say that people say what? like that? well, come-a-hoop would probably be up there. i don't know, there are plenty of those. some traditional ones, where we think of vests as one thing, pants. i got used to pretty used to, as someone who's trans atlantic, i got pretty used to not using those expressions. i do remember actually a conversation in the treasury in washington about growth in the future. so i'm afraid it was about economics.

but i think larry summers was there, probably tim geitner. they were talking about what the prospects for the economy in the u.s. and i said well if it's one point north. i was teased i no longer talk about nauts, i talk about zeros. >> the impact of going to bailey college. >> where people study what i study, actually the same thing that many people in the cabinet, what we call a front bench. probably tells you something about the u.k. that everyone's done the same course at the same university give or take. but i had a great time there. it obviously has a tradition of being politically focused.

one thing i like about it, a lot of rhodes scholars used to choose them. we had a lot of interesting u.s. and canadian graduate students who are now doing exciting things. one of them is the canadian ambassador in afghanistan. >> harvard, how long were you there? >> i was there in two years. i was on a scholarship program. having had a bit of time-out i ended up doing not the government department. probably one of the few people that changed from the rigorous government department to the kennedy school, which is the school of government. most people tend to want to go the other way. they want to have the press stiege of going to the government department. but i was quite happy with a two-year course and the freedom of being able to do pretty much anything i liked. i used to say it was disneyland for academics. but i also taught the justice course. i kept up some of the political philosophy. >> did you ever have, have you

ever, or will you ever play public service, running for political job? >> i have thought about it over the years. of course a lot of my friends and former college mates have gone that direction. i think i've just ended -- there's always that issue of are you a doer or an observer? but i enjoy very much being on the governing side in the u.s. one of the issues for me is here, once you've gone into government some way, even if i went into government as an aide for this government, or any other government, i would find it very difficult to go back to journalism. once you've shown your card -- the bbc it's very crucial. i'm glad no one has ever really questioned that i have an

objective view. people don't know what i think about a lot of these issues because i'm very careful to be balanced, even in the blog. >> have you been controversial? >> i don't think so. there was one time when i was actually working for a bbc program where i interviewed david cameron, and one of the ways that we wanted to highlight a policy that he had for awarding marriage, to give an extra tax break to married couples. somebody decided it was a good idea for me to ask the personal version, which is do you think i should be married because i'm not married but i have two children and i live with my partner. it was thought to be a good way to put him on the spot. some of the right wing commentators thought it was outrageous and i was carrying the flag for single parents and showing a left wing approach. of course i'm not even a single

parent. i was slightly trying to make a point about whether it made sense to give people money to people who didn't need it. and would anyone really get married for an extra five pounds a week. >> is that accepted here? >> we now have a leader of the opposition who has a partner and two children. just had a second child. i think it is. it's pretty common. i think, i may be wrong, but i think last year was the first time where more than half of the children born in the u.k. were born out of wedlock as we would say. i suspect i will get married. just one of those things that we were sort of -- in the modern world you end up spending more time looking for a house and starting a family and then you look around and say oh, we're not married yet. we'll have to fix that in the future. >> in the united states, it's about 30% born out of wedlock. in some groups, as high as 70%. what's your philosophy? >> i think it wasn't a conscious

decision. i think if you meet someone sort of later in life, i mean we met in our late 30's. so you end up feeling there's a little bit more of a time pressure. i've never been one of those people who dreamed of what my wedding would like like. i wasn't really ever sure i would get married. it seemed like a bigger priority too find some way to live together and to start a family then to get married. also the family started a bit quicker than we thought it might take. in that sense it was just a question of timing. >> how old are you kids? >> 2 and 4. >> in the middle of november in this town, the announcement was made that there's going to be a wedding. and i can tell you from being here in the middle of november and watching it, everything went to that front pages of newspapers, television programs went on for 24 hours.

show us the relevance of that to this society today? >> i should ask you, what's the relevance to american society? i gather the coverage in america was pretty extreme. >> correspondents for all the networks flew overnight. why are so people so interested? >> it is interesting. there was a piece of the british coverage which is all about how much american television had covered it. i think almost about 20 minutes after it was announced, i remember, or very soon after it was announced i remember the networks here going to "good morning america" to show the british people how "good morning america" has set it as their first news item of the day. we're very happy that americans are so focused on the royal family. i am someone, i'm not a firm republican. i have nothing against the royal family. but as someone who doesn't think -- i've never really understood the great fascination with them. but i think here, on that day,

people were very happy to have some good news. there's a pretty positive feeling around prince william and kate middleton as she was known until their engagement. and people were just happy to have something nice to think about it. on a day where there was a lot of talk about bailouts in the euro zone and other things. it was nice to have those kind of issues. >> they're not going to get married until 2011. will it be a steady drum? >> i know they are certainly already, before they were engaged, they were the most photographed, the most followed, pursued couple in the world. and that's only going to increase. people are going to be interested in them. preparations, where is it going to be? what kind of dress is she going

to wear? the interesting time willing be that some of the biggest spending cuts are going to be really felt around the country at around the same time as the wedding. there will be an interesting balance that the palace will have to strike between cheering everyone up, because they haven't got any money or they're losing local services. and making them pretty angry between the royals lives and everyone else's lives. i'm not sure i would want to be the people in the palace trying to manage that one. >> let's go back to the cuts. what will people start to feel here? across the board, what different things will they notice that's costing either more money, or taxes, or whatever. >> consumption tax will go up at the start of the year. that was the thing that was different. with one new tax rise that this

administration announced. or they offset it. there was a payroll tax rise that they're not going to completely commend, but they're doing this v.a.t. rise. the conservatives in the 1980's, margaret thatcher very famously rose it. and for some generations that still has resonance. the prices of things they buy could well go up as a result of that. we should remember that's a 20%. most people in the u.s. don't think in those terms in terms of the sales tax. this is a sales tax on everything except food which is going to be 20% on top of the regular retail price. so people will notice that. they will notice also after the years where a lot of money was going into the n.h.s., they will notice that money is not going into the n.h.s. anymore. the administration -- >> the n.h.s. stands for? >> the national health service which i'm sure many people in america, since they're always told their system is better than

the n.h.s., they hear about it all the time. the government has said that not cutting will be a real cut for n.h.s. spending. it will go up slightly in real terms. but for the n.h.s., like in the states is facing enormous pressure from rising cost of drugs, and the aging of the population. that feels like a cut. and i think after years it's going to feel like a cut to everybody else as well. >> so, if you had to have a serious operation, and you had a choice. would you go to the national health service here in great britain or pick the best hospital you could get in in the states? >> certainly you couldn't ask a politician here and i suspect you can't even ask a bbc journalist. i think there's a strong feeling that the best hospitals are world leaders. my son has a minor, or a moderate heart issue that he was born with. he goes to great alman great. that is one of the senters that

compares well with places in the state. for emergency care the n.h.s. still has extraordinary high standards. for some other kinds of care if you want to get your hip replaced, if you want to get maybe even some parts of cancer treatments, then maybe other parts -- there would certainly be hospitals in the united states that would be better. but boy, they're expensive. i'm not sure any of us can afford them anymore. >> what chance does you give david cameron for being successful? >> it's all going to come down on this gamble on the economy. it's a fascinating time for me where it does feel quite black and white. normally i'm the one saying there's some gray areas here and we should be looking at the details. on this gamble that i talked about earlier where the u.s. has taken one choice and the brits have taken another, he could be right, he could be wrong. it is a gamble. everything else will flow from

that. if the economy is much weaker than that, if it can't withstand these kind of cuts, then the cuts itself will be harder. it will be harder to bring down because there will be upward pressure on unemployment going down. if growth is faster, or as fast as they hope, everything will seem a bit easier. they will have a much better chance of being re-elected. but it is very much down and they know that. very much down to this economic gamble. >> there's a significant difference in the unemployment rate and the united states here, what by two points maybe? >> yeah. i think what's been striking is again a real contrast that we have not had the kind of rise in unemployment that you've had in this recession. our recession was much steeper. we had a 6% decline in national income from what we would say peak to trouf, from the top to the bottom. you had a much shallower recession in that sense. but you had much, much bigger rise in unemployment.

i think larry summers, when he was in the administration, really puzzling over why that's happened and why they should change that because it's such a central feature of president obama's situation and people's worries about the economy that you got so many people out of work. here, i think people have not recognized enough what a difference that has made to the recovery as well. people never felt as bad as the economy as they did in the states, because so many fewer people lost their jobs. they might have had to take part-time work, go under contracts, but they kept their connection to the work place. they weren't down the street. >> stephanie flanders, bbc economics editor. thank you so much. >> thank you. >> for a d.v.d. copy of this program, call 1-877-662-7726.

for free transcripts, or to give us your comments about this program. visit us online. they are also available as c-span pod casts. >> in london, students. this month, q & a expands to two programs with interviews from london. tonight, matthew parris former member of parliament. this week on "prime minster's questions" david cameron talks about the raise in tuition and the support for school sports programs.

also, efforts to force utility companies to return profits to customers in light of the recent unexpected cold weather in the u.k. tonight at 9:00 p.m. eastern on c-span. this morning a reporters round table -- host: good morning. congress returns this week in congress returns this week in what could be the final week