ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Let’s take a look through the Sunday papers now with the former Defence Secretary Michael Portillo, the Guardian columnist Polly Toynbee and the boss of WPP, the world’s largest advertising company, Sir Martin Sorrell. A very good morning to you all. Let’s start with the Archbishop of Canterbury, I talked to Mr Clegg about it, he is writing in the Mail on Sunday isn’t he Polly and I suppose there are two questions about it: is he right to criticise the energy companies, I suspect that’s a short answer, but is he the right person to be doing it? It’s this whole issue isn’t it of senior clergy, especially him, criticising other companies and government policy.

POLLY TOYNBEE: I think it’s very interesting that we have an Arch Bishop who is plainly going to be very activist and in a sense he has a right to be because he comes from the world of finance himself, his background, he knows what he’s talking about and when he says that energy companies are dysfunctional, are taking enormous profits, billions worth of profits and that it doesn’t work as a market, he is not just plucking it out of the air. There are certain parts of capitalism that don’t work and an awful lot of them are the ex-privatised utilities that still kind of operate as either cartels or near monopolies.

DM: Would you de-privatise them?

MICHAEL PORTILLO: Nationalise them?

POLLY TOYNBEE: No, I think what you would do is what Labour suggested, is to break them up and make sure there are more entries. No, to make the market work better, you can’t take them back into public ownership.

MARTIN SORRELL: They do need money for investment though, part of the reason they have to be profitable is to invest and compete.

POLLY TOYNBEE: But their problem is that it is entirely opaque how they operate because they both generate and sell to themselves in a way where you can’t really see where their profits are generated and whether they are fair or not. Ofgem, the regulator, is very stymied because they can’t see …

DM: Michael Portillo, come in on this because it goes back to the roots of the privatisation and Polly here, the Labour party, are effectively saying it was bodged. Presumably all this was looked at at the time?

MICHAEL PORTILLO: Yes, but Labour certainly, and I daresay Polly as well, does not advocate re-nationalisation because they know things were worse. For an example an industry like the railways, we now have twice as many people travelling by train as we did when the railways were nationalised so I think privatisation overall has been a success. I do agree that the Archbishop speaks with an unusual authority because he used to work for an energy company so one of the …

DM: And he has been living on relatively low wages since he moved into the Church.

MICHAEL PORTILLO: And one of the things that he says is that the companies have failed to justify the increase. Now I looked at my letter this morning from British Gas and indeed it says three points, the first of which is that the green levies are part of the problem but there are no statistics there, no explanation of how big the quantity is but I do think there is another story in the newspapers that the government is now going to focus on these green levies because supposedly the green levies are now £110 of our energy bills annually and that’s quite a lot.

DM: Martin, this is related but this is the politics of it all I suppose, an article by your old friend, your old boss, Maurice Saatchi.

MARTIN SORRELL: His point is slightly different because he’s saying that the Labour party and Ed Miliband have used the energy prices as a platform for the next election, we know as we were talking before Polly, the election date is fixed and people are drawing up all their policies and what Maurice is talking about is how the Conservatives should approach the next election because they have tended to be towards the capitalist solution as opposed to a left wing or a socialist solution and he is pointing out that maybe the road forward is the middle road, much more on the middle road and emphasising links between money and freedom.

DM: But he sees this is a clever political move and the Conservatives have to respond.

MARTIN SORRELL: Yes, absolutely, I think we’re all agreed on this.

MICHAEL PORTILLO: He makes much more of the point of where capitalism has got to and it has got to pretty extraordinary extremes of inequality and that is something difficult for a party of the right to address but it does need to be addressed.

MARTIN SORRELL: Particularly at a time of recession. As we come out of recession, a lot of the stuff in the papers is about the UK economy being on a much stronger footing and next year, as we were talking about Polly as well, next year it will be even stronger so as we go …

POLLY TOYNBEE: It is exactly about what Michael just said, it’s about recovery. If we get the bottom half of the population still miles behind where they were before, their pay each year still falling behind inflation, then it is not going to feel like recovery for most people.

MARTIN SORRELL: If GDP is up 3% in the UK next year which some people might be …

POLLY TOYNBEE: It might be for yours but not for a lot of our side. For most people GDP is not 3% better this year.

MARTIN SORRELL: Hold on a second, you can’t get away with that. So for example in the last two years in this country we have added about 10%, 12.5% to the number of people employed in our company so it is pervading far wider than you are talking about and if growth does kick in next year which it looks as though it will do, I think the coalition at least will be in a better position. What we are seeing from the Deputy Prime Minister is them drawing up the wagons as well, to see how you can differentiate the Lib Dems from the Conservatives.

MICHAEL PORTILLO: I can give you a view on that which will lead us into maybe the next story.

DM: I was going to do that link myself but off you go Michael!

MICHAEL PORTILLO: I think what is going to happen is that there is going to be growth in the United Kingdom but the eurozone is going to go through a period of non-growth and massive unemployment. That means there will be a lot of immigration from the eurozone to the United Kingdom which will tend to depress wages at the lower level because people are willing to come here and do the work for less so I think we’ll also see a period of non-increasing living standards in the UK.

DM: So that political debate becomes more acute doesn’t it? Who gets the fruits of recovery?

MICHAEL PORTILLO: It is hugely acute.

POLLY TOYNBEE: It’s a big question, because where you sit you say it’s all fine because you look at GDP but GDP no longer means anything anymore. If you have a society which we have which most people are alarmed at, where the trajectory is that we will become very rapidly more and more unequal, then to look at the national average simply makes no sense.

MICHAEL PORTILLO: By the way, the inequalities in still Communist China are at least as great.

DM: All right, we really are ranging all over the world now.

POLLY TOYNBEE: Michael, do we want to be China? Surely not.

DM: Let’s come back to your story and we can link to this through Ed Miliband and the coverage of his father and the furore that caused, you picked out a story from the Telegraph, ‘Can we still trust the BBC?’

MICHAEL PORTILLO: It’s written by Robin Aitken who is a former staff journalist and it arises partly because they do an analysis in the Telegraph on a particular report last week on the subject of EU immigration into the UK and the allegation is that the BBC had a rather one-sided account of this, implying that there weren’t many people from the EU who were living here on benefits. So broadening from that, Robin Aitken is analysing why there might be an institutional bias in the BBC and it’s things like he says, the fact that people tend to recruit people who are very much like themselves, that there is a culture, that it is very, very hierarchical and therefore the pursuit of certain stories for instance, stories that are about social inequality, tend to move up the agenda in the BBC. Because there are so many outlets for the BBC, radio, television and so on, local radio too and because there are meetings at which the kind of pecking order of news stories are decided, you find that really across all the outlets you’ve got the same … [All talking at the same time] I think there are very important exceptions. I do a programme with Andrew Neill and let’s face it, neither of us could be described as left as centre and we work for an editor who used to work for the Conservative party. So it’s not by any means universal but I do think the BBC has, it shows that certain opinions are not very respectable and these are in the delicate areas of the European Union and immigration and social equality and just absolutely serving this up to Polly, I do think that they have a tendency to pursue press releases from pressure groups in a rather uncritical way.

DM: Okay, well that is happening in a lot of news groups.

POLLY TOYNBEE: You know, the editor of the Sunday Times is a Murdoch editor – and of course this is a bid to get back on Sky, so you’ll get invited back very often – the editor of the Sunday Times is now the head of the BBC news. Andrew Neill as you say does the Daily Politics every day and he is another Murdoch editor, you have the …

DM: So it’s the Murdoch lobby now.

POLLY TOYNBEE: … taken into the Conservative party by the BBC and the idea that this is some kind of … my experience of the BBC is … [All talking at the same time] Let me speak, you are a bully, stop bullying. My experience of the BBC is that a state of total fear grips the newsroom, they are terrifying of being unbiased. It is very, very difficult to decide what is a straight course. 80% of the press is heavily right wing run by three or four maverick barons and so when you are trying to decide what your news agenda is going to be how do you manage not to be swayed by what all the press are saying? There is always a tendency to say if we are doing the same as the press we must be okay.

DM: Well of course broadcasting has to impartial …

POLLY TOYNBEE: I know but broadcasters as we know are swayed by newspaper agendas.

MARTIN SORRELL: I was in Istanbul recently and the coverage of Taksim Square and the 2020 bid by Istanbul, a lot of Turks across all the areas were concerned about the weight of coverage, it was also on CNN too, the weight of coverage and there is a point in what Michael says, it is not so much the point of view as the quantum and it just pounds out all the time.

DM: We are running out of time but I want more stories so I will go to you Martin, you have got this from the Times business section, the £24 million goodbye.

MARTIN SORRELL: It is not so much the goodbye, it is the fact that Angela Ahrendts is leaving a very successful history at Burberry and going to Apple, also a very successful company but with a lot of question marks.

DM: A lot of people are wondering about the crossover there.

MARTIN SORRELL: And the crossover and what the long term future holds but I think that is a very good point, Dermot, does this indicate that we’ve now got a global market or the beginnings of a global market for executives. One of the big issues is whether people go from the UK to the US and if there is a market …?

POLLY TOYNBEE: But in the FTSE 100 how many are not born and bred in the UK? Very few.

MARTIN SORRELL: You are looking backwards, I am talking about current market conditions and this situation with Angela is a very interesting case. You will see many more like this with the market becoming much more fluid so the pressure will induce more of this sort of thing. This is a fact, not an excuse.

DM: Michael, you touched on this a bit earlier, your fears for what’s going on in Europe, you got this from the Observer, a far right victory in France.

MICHAEL PORTILLO: On the back of a recent result in a place called Brignoles in Southern France there is a suggestion that in the euro elections next year, parties which are eurosceptic and anti-immigrant are going to do well in the Netherlands, in Italy, in France, in Greece, in Germany and indeed in Britain.

DM: Is that how you would term UKIP, as far right?

MICHAEL PORTILLO: I didn’t say that actually, I think I said eurosceptic and anti-immigration. Perhaps I should tone it down and say concerned about immigration. So one of the things is that UKIP won’t feel very lonely if they get elected in large numbers. The second thing to say is this is all made possible by proportional representation because whatever percentage you get you are quite likely to get a seat in parliament and once voters realise that they may vote for you in quite large numbers. UKIP itself is hoping to be the number one party in the euro elections and at the following general election UKIP is likely to take some votes from the Conservatives. Of course the wonderful paradox of all of this is if UKIP stops the Conservatives from getting an overall majority, which seems quite a strong possibility, the result of that will be no euro referendum, which is probably not the UKIP voters intention.

DM: I am keen to get one more in here, in the discussion I had with Nick Clegg earlier, the Deputy Prime Minister, what’s your take on this? Is there are real row, a real rift here between Nick Clegg and Michael Gove over education policy?

POLLY TOYNBEE: Very interesting. Nick Clegg needs to differentiate himself so he is looking for issues but it’s a bit embarrassing when they are issues on things he has already voted for. He voted through …

DM: Well he’s got David Laws, his Education Minister, supporting him.

POLLY TOYNBEE: Absolutely and he voted through free schools, allowing them to happen and to have unqualified teachers. A young 27 year old put in charge of a brand new free school and has to leave after a few weeks because she can’t cope. Of course she can’t cope, how can you be a head teacher without having ever being a teacher? It is firing the gun, as you said, for the next election and I think it is difficult because if he makes that a red line how can they possibly have a coalition next time? I think he’s got to be careful not to put himself in a position as he did over student fees, to put down things that couldn’t be negotiated.

MICHAEL POLICY: I think the policy is excellent and I am very glad that David Laws agrees.

DM: Well put Michael. I don’t know where the time went, Martin, Michael, Polly, good to see you. You can fight about that afterwards but you all had a fair crack at the whip.