14/02/2012 BBC News at Ten

Tonight at ten - inflation moves in the right direction, but it's still

way above the official target. The latest measure is 3.6%, a sharp

fall from December, but it's not all good news.

A leading credit rating agency puts the UK on a negative outlook,

ministers claim it's another reason not to change course.

Britain has to confront its problems, that is the clear message

from the rating agency today. And that is a reality check to the

entire political system that Britain cannot duck dealing with

its debt problem. Today the rating agencies put the Government on

negative outlook because growth is flatlining and unemployment is

rising. We'll try to make sense of these varying signals.

Also, one of the great football clubs, Rangers, has gone into

administration. The fans give their thoughts. We need to know what's

happening at this club. That is a problem. Nobody seems to want to

talk to the fans. It's not just the history of the club. It's the

history of families that come here together.

More uncertainty for the Greeks tonight. Their latest bail out deal

is still not finalised. A show of American strength off the

Iranian coastline. We have a special report.

They're here to send a clear message toy Republican as to who

really controls these waters. And a surprise Valentine's gift for

the Duchess of Cambridge on her first royal advise toit Liverpool.

And in Sportsday on the BBC News Channel, the runaway son returns.

Carlos Tevez arrives back at Good evening. Inflation is falling

rapidly judged by the latest figures and it's expected to keep

on falling in the coming months. David Cameron said it was good news

for families especially worried about the cost of living. Even so,

inflation at 3.6% is well above the official target of 2% and prices

rin creasing at a much higher rate than wages. Our chief economics

correspondent Hugh Pym looks at the latest evidence. Rapid cost of

living increases have caused pain for households and held back

economic growth as consumers' spending power has been eroded. The

tide now seems to be turning. Shoppers in Liverpool and around

the country will be relieved that inflation has fallen sharply. For

many families visiting the World Museum in Liverpool over half term

week, free entry is an obvious attraction. Inflation was a lot

higher than average wage rises, putting pressure on household

budgets. Now those price pressures are easing. Gino and Claire

Salvatore have begun to feel the difference. I've noticed with

petrol prices have stayed pretty static recently, which has helped a

bit after the big rises. Generally, it's still quite tight on budget.

Definitely. The budget is still tight. An increase in VAT, that's

sales tax, on many items pushed up inflation last year. Take a cup of

coffee in the cafe for example, in January 2011, the price was �1.65.

But it was driven up to �1.75 because of higher VAT and other

cost pressures. In January this year, there was no VAT increase and

the price stayed the same. That's one reason why inflation has fallen.

It's not just families and other consumers hit hard by high

inflation, the museum itself has had to deal with sharply rising

costs and it's as hopeful as anyone that inflation really does carry on

falling from here. For the first time in ten years, they've had to

charge for entry to one exhibition and they don't want to do that

again. I hope inflation does start to drop. I particularly hope that

gas and electricity prices go down. It will ease the pressure on us,

but I'll believe it when I see it. The key question is how quickly the

pressure on budgets falls away. For much of the last decade average

earnings were above inflation. After the recession that trend

turned around with prices well ahead of wages. Now the gap is

narrowing. Most economists expect inflation to fall further, but some

say that can't be taken for granted. The big risk is to do with the

price of oil. So a lot of international tensions that are

particularly putting at risk exports out of Iran, which produces

5% of the world's oil, if those supplies are interrupted, then the

royal price could go up sharply again and cause prices to go up.

The Governor of the Bank of England said the case for the fall is

uncertain. There's an announcement that one of

the credit ratings agency, Moody's, has placed the United Kingdom and

two other European countries on negative outlook. The The

Chancellor George Osborne said it was a reminder that dealing with

debt levels was essential, as Stephanie Flanders reports.

Remember these threelers? George Osborne has always said they stood

for something very important, Britain's economic credibility.

will maintain Britain's triple-A rating. This credit rating agency

says Britain's economic credibility will be on the line. I'm keen to

preserve the international credit rating. You might have expected

investors to take fright today after a major ratings agency said

there was a 30% chance of Britain losing its triple-A in the next 18

months. There wasn't much market reaction at all. In fact, the

Government's cost of borrowing fell slightly. It's not been as low as

that in decades. With the markets - - would the markets get more

excited if the downgrade happened? Probably. America and France have

each lost their triple-A rating recently. They're finding it

cheaper to borrow than they were before. That might be because

borrowing from international investors is like entering a beauty

contest. It's not just how pretty you are, but how you line up

against everyone else. The fear is that if the UK were downgraded,

that then people would be less willing to lend money to the UK

Government. Government borrowing costs would rise. That would feed

into higher borrowing rates across the economy. However, if other

countries are downgraded at the same time, then the UK still looks

like a relative safe bet N reality a UK downgrade might not have much

impact. The problem for the Chancellor is that he said keeping

the triple-A is a big deal. Chancellor said that their economic

policies, the Government's policy should be judged on what the credit

rating agency said. Today the agencies put the Government on

negative outlook, because growth is flatlining and unemployment is

rising. But Labour can't make too much of Moody's decision, after all,

the ratings agency said it was worried about the Government doing

too little to tackle the deficit, not too much. Britain has to

confront its problems. That is the clear message from the rating

agency today. That is a reality check to the entire political

system that Britain cannot duck dealing with its debt problem.

Moody's isn't looking for a Plan B in next month's budget, far from it.

But today's warning about the triple-A is an uncomfortable

reminder that you can have a lot of austerity, but without growth, you

can still end up with a lot of debt. Stephanie is with me now. Let's

talk about these varying signals today. What is the main calculation

do you think for the Chancellor now? I think it's a mixed picture.

It's clearly not welcome news for the Chancellor, this warning about

the triple-A, given the fact that he's talked about it so much in the

past. As I was mentioned in my piece, it's not straightforwardly

good news for the opposition either. I think it speaks to a tension that

we're seeing a lot in the eurozone, in the financial markets at the

moment. Have you countries who have come out of this crisis with a lot

of borrowing, a lot of debt. They've been under pressure from

the ratings agency and financial markets to get that under control.

The fact this everyone is doing it at the same time has made it harder

to combine that with decent growth. Then Moody's says, we don't like

what slow growth is doing to your debt. You could be forgiven for

thinking if you're a Government that you're damned if you do and

damned if you don't. But there's this fall in inflation, it's

finally happening. Of course, inflation is still above target.

Prices are still going up. They're going up faster than most people's

pay packets. If it continues to fall like this, as most people

expect, we could be looking at inflation back down near 2% in the

second half the year. That will mean real incomeles are rising

again. At least if you're in work, you could see, could feel more

confident and that could help the economy. I'm afraid the weak

environment, we're going to find out tomorrow, that will mean high

unemployment, maybe even unemployment continuing to increase.

Thank you very much. One of Britain's biggest football

clubs, Rangers, has gone into administration today. They had

tried to negotiate more time to pay its debts, as much as �75 million

in tax bills and penalties. One of the immediate effects is that the

club has had ten points deducted in the Scottish Premier League. Our

correspondent James Cook reports from Glasgow. There is some flash

photography coming up. A sporting institution now in administration.

For Rangers football club this moment was a long time coming, but

it's still painful. We need to know what's happening at this club. That

is the problem. Nobody seems to want to talk to the fans. It's not

just the history of the club. It's the history of families that come

here together. REPORTER: You're pretty upset.

league's gone and that's it. The bottom line is, the big house must

stay open. Rangers' owner Craig Whyte insists that's his aim too.

He's a controversial figure, having served a seven-year ban from

holding company Directorships. Mr Whyte hopes administration can

clear the club's debts, not least a tax bill, which he says could reach

�75 million. Whilst today is a very sad day for Rangers and its fans,

the administration addresses a terrible uncertainty that's been

hanging over the club. The administration period, whilst

difficult for all involved, will give stability to the club. So how

did it come to this? Founded in 1873, Rangers is a footballing

giant. Its 54 domestic league titles the envy of any club. In the

90s they slashed the cash on players. Sir David left the club

happy memories and large debts. David Murray had Rangers making

losses of about �29 million one year, �33 million another year,

�and 30 million another year, three successive years of swingeing

losses. Nobody is going to tell me that is not reckless management of

a football club. It's eemergencyed that Rangers' tax problems don't

just date to the glory days. They're facing an unpaid tax bill

of �9 million run up since Craig Whyte's takeover. The immediate

cost of administration is a ten- point penalty, which will almost

certainly hand the Scottish Premier League title to Celtic. The long-

term cost for this proud club could be far higher.

The extremist Muslim cleric Abu Qatada is spending his first full

day out of jail. The Government is still determine to deport him. A

Home Office minister is in Jordan for high level talks over whether

he would receive a fair trial there. Tonight a senior Jordanian minister

told the BBC that his country's constitution now contains

guarantees. He is out on bail but Abu Qatada's

freedom is restricted and his future is the subject of intense

debate. In the Jordanian capital Amman, the British team led by Home

Office minister James Brokenshire negotiated behind closed doors. But

Abu Qatada's friends and family believe a deal is there to be done.

I do believe, as we hear from family and other friends that

within one week Abu Qatada will be in Jordan. Jordanian ministers feel

the European Court of Human Rights has create ed the impression this

is a country which tortures prisoners, without giving Jordan

the chance to respond. They say new constitutional clauses guarantee

prisoners won't be tortured and crucially for the European Court,

that evidence gained by torture can't be used. In a statement made

by any accused person as a result of torture or harmful act or

threatening of doing the same, even if it is mental, is not admissible

in court. So if Britain wants Abu Qatada out, and Jordan sees his

return as a chance to prove it respects human rights, might a deal

be possible to bring back a man already convicted in his absence,

of being part of a terrorist conspiracy here? One formula for a

quick return might require him to give up his opposition to

extradition in return for a personal guarantee from the king of

Jordan about what sort of treatment Britain wants to find a quick,

clean end to an affair which has become messy and protracted. Jordan

wants to answer that George that it is a country where human rights are

routinely ignored and prisoners routinely tortured. For now, at

least, it is thought that he remains somewhere in this part of

London. If Britain wants him off the streets it needs a deal with

Jordan. But it has to be one that will satisfy the European Court of

Human Rights about how he will be The latest bail out plan for the

Greek economy has hit another obstacle after a eurozone finance

ministers cancelled a meeting arranged for tomorrow. They accused

Greece of failing to do enough to reform the economy. Greek ministers

said tonight that they had met all of the conditions and that the

people of Greece would not stand for any more austerity measures.

Gavin Hewitt is in Brussels. How serious, in your view, is this

latest obstacle? I think it is quite serious. Make no mistake that

EU officials are playing it tough. For the moment, certainly, this

second bail out is on hold. The reason for that is that the EU

officials do not believe that Greece has met conditions, crucial

conditions. They want key political leaders to give written guarantees

that after elections in April they will fully implement these new war

austerity measures. They also want further budget cuts. But I am

detecting growing tension between some grit from ministers and some

European ministers. One Greek minister said today, quite simply,

the Greek people have had enough and cannot take any more. Also,

some European ministers are discussing the possibility of a

Greek default which they were not a year ago. The German finance

minister said, compared to two years ago, we are much better

prepared to survive a Greek default. Against this background, the Greek

economy seems to be collapsing. In the last quarter of last year it

contracted by 7%. So, where are we tonight? I think there are still

considerable hurdles to be crossed in order for Greece to get the

Coming up: A grand welcome for China's up and coming leader as he

prepares to meet President Obama at In Iran, President Ahmadinejad is

said to be preparing to make a significant announcement tomorrow

about the country's nuclear programme. Any statement would need

to be seen in the context of growing tensions with the West.

There has already been a big build- up of Western naval forces in the

region, close to the Strait of Hormuz, a strategically vital

waterway through which a 5th of the world's oil is transported.

Jonathan Beale is on the USS Abraham Lincoln.

It is already the most potent symbol of America's military London

Lite. The USS Abraham Lincoln, loaded with warplanes and preparing

to pass through potentially dangerous waters, the Strait of

Hormuz. These jets are more than just a show of force. They are here

to send a clear message to Iran as to who really controls these waters.

As it approaches the narrowest point, just 21 miles wide, the

coast is in sight. Iran recently threatened to close the Strait to

which 20% of the world's oil supplies travel. It hasn't yet, but

it is watching every inch of the journey. The US insists it is a

routine voyage, but it comes at a time of growing concern about

Iran's nuclear programme and rising tension. The presence of the ship

is provocative. If you look at the weaponry and aircraft on board, but

we routinely Transit in and out from the Arabian Gulf to the North

Arabian Sea, so that we can go and start our work in supporting the

troops in Afghanistan. But they are taking no chances. US helicopters

worn off small boats that are getting too close. Further in the

distance, an Iranian patrol boat is spotted. One of its military planes

brazenly shadows overhead. But if this is an attempt to scare off the

US Navy, it doesn't seem to have worked. We see small boats. Most of

the time they are far enough away that we don't have to really do

anything. But if they did something, you are confident that you could

deal with it? Yes, really confident. With open waters in sight, the

Abraham Lincoln can continue on its next mission, providing air support

over Afghanistan. But it will soon be replaced by another US carrier

that will also patrol these The Ministry of Defence has named

the 21-year-old heir man who was killed yesterday by insurgents in

Afghanistan. Senior Aircraftman Ryan Tomlin of 2 Squadron, the

Royal Air Force Regiment, died in Helmand province. His family said

he was a true hero and a shining star.

The Government has suffered another defeat in the House of Lords over

its planned changes to the welfare system. Peers voted to reject moves

to cut benefits to some council tenants, including the disabled and

foster carers who have more than one spare bedroom. For the latest,

let's join Ben Geoghegan outside Parliament. I mentioned the defeat,

what is the state of this Bill now? Well, the process of getting the

reforms through Parliament has probably been a bit more protracted

than ministers would have hoped. Tonight, with the debate at the end,

the reforms are a step closer to becoming reality. The Government

has suffered eight defeats in all. Seven of those had been reversed

already. The latest defeat will be reversed as well. What the peers

were worried about is the effect that the proposals could have won

some vulnerable families, for example those with disabled

children or those claiming benefits because they were suffering from a

serious long-term illness. What the Government did in response to those

concerns was to offer a whole series of changes to their plans.

While it is still going to introduce a �26,000 cap on benefits

per household, that will not kick in until someone has been

unemployed for nine months. There will still be peers who have

concerns and feel there is a risk of hardship for some families.

Their appeal these proposals are not fair. But the minister for the

Government today told members of the House of Lords that the message

from the credit rating agency Moody's today was that the spending

had to come down, and that included Now, President Obama has held talks

at the White House with the man widely expected to become China's

next leader, Xi Jinping. Obama said that China's rise was a positive

thing, but it should realise that more power means more

responsibility. It's the first time Mr Obama has met Mr Xi, who has

urged China to be treated in a more rational way.

A ceremonial welcome at the Pentagon today for China's leader

in waiting. Xi Jinping is known to be a fan of Hollywood war films. So

much more about him is unknown. In the Oval Office on Valentine's Day,

a first date. A chance to see how he feels about Iran, Syria and a

growing US presence in Asia. United States is a Pacific nation.

We are very interested and focused on continuing to strengthen our

relationships, to enhance our trade and our, S --, S and make sure that

we are a strong and effective partner. Mr Xi replied that he was

here to deepen mutual understanding and friendship. But he warned that

discussions would be candid. The Chinese want to know more about a

repositioning of US military assets, something Washington calls a

strategic pivot towards Asia. is an integrated strategy. Security,

diplomacy, economics and even human rights, covering Asia from India to

Tokyo. The Chinese are nervous about it. China is a liar! Outside,

a vocal reminder that wherever China goes, controversy follows.

They were here for Tibet, Taiwan and human rights. The protesters

are a feature of every Chinese visit here, another sign of how

complex this relationship is. This year, there is an extra factor in

play. The US presidential election. China has become a political

football. Listen to Mitt Romney, the front-runner in to Republican

race. They are artificially lowering prices and killing

American jobs. We cannot sit back and let Trina run all over us.

advert by Republican's running for the Senate crudely boxed the loss

of jobs to China. Your economy get very weak. Hours get very good. We

take your job! This is the story that Barack Obama wants to tell on

jobs, newly hired American workers making goods to sell to China, here

at a chopsticks factory in Georgia. Except the machines they use have

been imported from China. Trade, at least, is far from a balanced

Large crowds turned out in Liverpool to greet The Duchess of

Cambridge, he made a visit to the city, his second public engagement

without her husband. She was visiting some of the organisations

of which she is a patron, including Action on Addiction.

Her husband may be posted 8000 miles away in the Falklands, but

The Duchess of Cambridge still celebrated Valentine's Day. Her

suitor was an eight-year-old boy. Apparently Prince William also sent

a card and flowers to his wife, who spent the day in Liverpool on only

his second ever solo public engagement. First stop The Brink,

and alcohol-free bar in the city centre. She was shown how to make a

non-alcoholic cocktail called, of course, The Duchess. There was also

a performance by a choir of recovering addicts, run by the

charity Action on Addiction, one of only four organisations of which

she is patron. She knows a bit about what we do. To come here was

fantastic. I know some of the stuff she heard, personal testimonies

about people's lives with alcoholism and addiction, I think

it really blew her a way as well. Onwards to Alder Hey Children's

Hospital, where the crowds braved the cold for Catherine. This is the

first time that a duchess has done a public walk around without her

husband at his side. She has come here to Liverpool to find that all

of these people have turned up just for her. She was a big hit with the

children here. Nine-year-old Jack Carruthers has Crohn's disease and

is being treated at the hospital. It was amazing when she came. She

was really nice to me. Just months into her royal career, The Duchess

is already becoming known for her relaxed, personal approach. It's

something appreciated by the parents and children on the cancer

ward. Style watchers were satisfied as well. Her high street outfit met

with local approval. She was looking stunning! She was. But we

only got pictures of the back of her head. Next month, she will

accompany the Queen on two engagements. Later in the year she