20/07/2011 Newsnight

Tonight, the Prime Minister tries to take the steam out of the

hacking scandal, spending hours in the Commons listening to MPs, and

finally using the "S" word, sorry. With 20/20 hindsight and all that

has followed, I would not have offered him the job. It is not

about hindsight or whether Mr Coulson lied to him, it is about

all the information and warnings that the Prime Minister ignored.

have got the latest on Murdoch's former lawyers, and the private

investigator at the heart of it all. The developments have been

different from day-to-day, I have no further comment to take at this

stage. However, this may change. The BSkyB deal off, the country's

best-selling newspaper scrapped, the Murdochs in trouble, how this

has changed the media in Britain. Who Two Taxing being better than -

Two Maxs better than one, they go head tohead. Germany and France try

again to fix the euro, is it fixable, the Shadow Chancellor

himself is here to tell us whether the euro can be saved.

Will the price tag mean that the high-speed railway will work.

is the dream, build it and they Good evening, after own during

frontal takes from the opposition, sniping in the media, and sometimes

lukewarm support from Conservatives, the Prime Minister appeared in the

Commons today to try to calm the storm over the hacking scandal.

With the Commons now in recess it seems to have worked, at least for

now, although there were continuing questions over Mr Cameron's

judgment, his staff appointments, and his interest or otherwise in

the Murdoch bid for BSkyB. Just yesterday the Prime Minister

was in Lagos, part of an African tour cut short. His last event, a

press conference with the Nigerian President, Goodluck Jonathan, that

really is his name. A speedy return to a frenzied

Westminster, no-one for now at least is calling him Goodluck

Cameron. David Cameron has been playing a none too subtle game of

grandmother's footsteps over Andy Coulson. Tiptoeing ever closer to a

more condemnatery line. He still hasn't made the outright apology

that the opposition are demanding, but today, he got closer than ever.

If it turns out I have been lied to that would be a moment for a

profound apology. And in that event I can tell you I will not fall

short. Of course I regret, and I am extremely sorry about the furore it

has caused, with 20/20 hindsight and all that has followed, I would

not have offered him the job, and I expect that he wouldn't have taken

it. But you don't make decisions in hindsight, you make them in the

present. You live and you learn, and believe you me, I have learned.

This should have been the first day of the parliamentary reserbs

instead a statement, and a debate on, yes, hacking. The leader of the

opposition, one suspect, would gladly do without any more

parliamentary holidays ever again. Why doesn't he do more than give a

half apology, and provide the full apology now for hiring Mr Coulson,

and bringing him into the heart of Downing Street.

Today the Prime Minister announced the names of the panel who, with

Lord Justice Leveson, will inquiry into phone hacking. They are Shami

Chakrabarti, the civil liberties campaigner and director of Liberty,

Sir Paul Scott-Lee, former Chief Constable of the West Midlands

Police. David Lord Currie. Elinor Goodman, former political editor of

Channel 4 News, and the former political editor of the Telegraph,

and Sir David Bell, former director of the Financial Times.

As Rupert Murdoch's private jet was cleared for take off, one thing is

absolutely clear, next time he lands in this country, he won't

enjoy such easy access to top politicians. It is his previous

meetings though that came under the most scrutiny in the Commons today.

Last Friday he revealed that since taking office, he had met

representatives of News International or News Corp,

including Rebekah Brooks and James Murdoch, on 26 separate occasions.

So 0 the first question, so the first question I have for the Prime

Minister, is whether he can assure the House, that the BSkyB bid was

not raised in any of those meetings, or in phone calls with those

organisations. But although Mr Cameron addressed the subject marks

he didn't specifically answer the question. He asked about the issue

of BSkyB, the cabinet secretary has said there was no breach of the

ministerial code. You heard the evidence of Rebekah Wade yesterday

saying there was not one single inappropriate conversation. When it

comes to setting out meetings with News Corporation, I have set out

every single meeting since the last election. No, the Right Honourable

gentleman published a list this morning, but it does not go back to

the last election. Scenting perhaps a weakness a prosession of Labour

MPs repeated the same question. Prime Minister, did he ever discuss

the question of the BSkyB bid with News International at all the

meetings they attended. I never had one inappropriate conversation.

Backbenchers tried putting the question in more and more creative

ways. Prime Minister, have you ever uttered the word BSkyB in the

presence of Rebekah Brooks, Rupert Murdoch or James Murdoch? You know,

(sighs) Over the past couple of weeks the press has been full of

reports that Conservative MPs have not been too enthusiastic about

lining up to support their Prime Minister. Today, though, they were

certainly very keen. This might be an unpopular thing to saying, but

outside the Westminster bubble, I suggest the nation has had its fill

on the subject, it is actually getting fed up, it wants answers.

There is an inquiry under way, that is where the answers will come.

David Cameron's good luck today, though, was the last day of

parliament. It is committees and such that has kept this stoked with

fuel. A holiday is something the Prime Minister could do with.

Richard Watson is here to talk us through some of the new

developments tonight? Some interesting developments tonight.

One of the most significant things is News International today stopped

paying Glenn Mulcaire's legal fees, the private investigator at the

heart of the scandal. Glenn Mulcaire himself was facing up

wards of 30 civil case, he was arguing that he shouldn't have to

give evidence in these because he might incriminate himself or any

future legal proceedings. His legal costs would have been �500,000

upwards. News International having pulled the rug from bankrolling his

legal fees is significant. Is he going to talk now? As you can

appreciate we are in the middle of a number of inquiries at the moment,

it is a fluid and developing situation. Like I said, the

developments have been different from day-to-day, I have no further

comment to make at this stage. However, this may change. That's

hanging in the air. Something from Harbottle & Lewis, the wonderfully

named lawyers firm that used to work for News International? This

is deeply significant, it is complex territory, so bear with me

here. Back in 2007, News International appointed this firm

of lawyers to look at the case of Clive Goodman because he was taking

civil action against them. As part of that Harbottle & Lewis reviewed

a dossier of evidence and e-mail, some of these related to e-mail

traffic between Andy Coulson and the royal correspondent, talking

about the purchase of a confidential dossier of phone

numbers from the Royal Family. Now, Harbottle & Lewis were actually

asked, we think, to specifically look at the question of phone

hacking, was there any evidence of other people knowing about the

phone hacking. On that very narrow point, they wrote to News

International saying we don't find any evidence of specific evidence

of other people knowing about phone hacking, that assurance was relied

upon by News International for the best part of three years, and

following the evidence to the select committee yesterday it is up

for debate. This is absolutely crucial, when Lord McDonald, the

former DPP was asked by News International earlier this year to

review that dossier or part of it, a smaller part of the dossier, he

said to the select committee, within minutes he found evidence of

major criminality, for example, the attempted purchase of the

confidential Royal Household phone numbers. Harbottle & Lewis have

serious questions to answer about the nature of the advice they gave

to News International. Why did they give that narrow advice, maybe that

was what they were asked to do. The crucial difference tonight is up

until now harsh have not been able to defend themselves, because News

International said there was a duty of confidentialty. Tonight News

International have lifted that, Harbottle & Lewis are now free to

make their case to a select committee or the judicial review. I

think this will be dleep significant. We're joined by

Michael Fallon, and Ivan Lewis. Why did someone with the obvious

skills of David Cameron allow himself to get into a position

where some people saw this as a make or break moment for him?

wasn't a make or break moment, David Cameron was one of the first

to recognise that this had got beyond celebrities and politicians.

This was a very serious issue that both parties had allowed to drift

for years. This cosy relationship between politicians and the media,

the fact the press wasn't being regulated properly. Two years ago,

and he let it fester for the last two weeks? These allegations are

five or six years old, he made the point, that not only did the Labour

Government do nothing about it, but the Conservative opposition didn't

ask for it as well. See he - he sees this as an opportunity, and a

chance to recast the relationship between politicians and media, and

to see what can be done about recruitment to the police at a high

level. The Prime Minister is flog ago dead horse here, 136 questions

today, three hours in parliament, answering every question put to him,

he has apologised to him, set up numerous inquiries, there is

nothing else you can expect him to do, if he has made mistakes he will

admit it? David Cameron apologised for the furore about the

appointment of Coulson, he didn't apologise for taking Coulson into

the heart of Downing Street. said might? He ought to apologise

now. Mr Coulson, as far as we know is an innocent man. We heard today

David Cameron conceded that he was fully aware of the reports in the

New York Times that made serious allegation about Andy Coulson. He

wanted to look at Nick Clegg sat next to David Cameron today, who

made it clear, he looked the Prime Minister in the eye and told him he

shouldn't appoint Coulson to Downing Street. It is right we ask

Nick Clegg to come clean about what he said to David Cameron in the

early stages. It is repeating the mistake Miliband did today. You

flog a dead horse and realise the horse is dead. These were petty

party points today, Ed Miliband didn't realise the opportunity

today for addressing some of the big issues. The Prime Minister was

embarrassed when the BSkyB deal came up, there was a very pointed

question from Mr Skinner today, why is that so difficult for the Prime

Minister to handle? I don't think it was difficult, he made it

absolutely clear there was no inappropriate discussions with

BSkyB. What about these conversations? Happily Rebekah

Brooks the previous day had testified to parliament that there

were discussions with David Cameron that she wouldn't have had in front

of the select committee. Your definition of appropriate is what

Rebekah Brooks thinks? You are starting to split linguistic hair

about this. What is important here is if anybody discussed the BSkyB

bid it wouldn't have made any difference at all, even if they

hadn't discussed it, which they say they hadn't. If they had discussed

it, it wouldn't make a difference, because David Cameron was not

deciding the BSkyB bid, it was decided completely independently by

the Culture Secretary. The problem your party has and we know, it was

clear from what Rupert Murdoch said yesterday, that Gordon Brown and

Tony Blair had been sucking up to them for years? Isn't it

interesting that Rebekah Brooks talked about appropriate

conversations today, and David Cameron used appropriate

conversations today, what is very important here, since March David

Cameron has refused to tell me whether he has had discussions with

Mr Murdoch or Miss Brooks about BSkyB. Today Jeremy Hunt said out

of the blue today, the conversations that David Cameron

has had, have been irrelevant, so, has he had conversations or hasn't

he? I tell you why this matters, because if the Prime Minister's

judgment is in question, this is the Prime Minister who has to make

decisions about the economy, the health service, about welfare,

about the future of our country, if he gets his judgment so wrong on an

issue like Andy Coulson, people will start to ask questions about

his judgment more generally. express regret for the appointment

of Andy Coulson, this is linguistic hair spliting about what is an

appropriate discussion. The mistake Labour have made is to do all the

petty party points scoring, instead of looking at the big picture of

how to reform this thing for the future, a better way of deciding

media ownership, and clear up the issues with the police and have a

better system of press regulation. He's a clear speaker, couldn't he

clear it up and say I did have conversations with Rebekah Brooks

and others about BSkyB, but it had no impact about the bid? Jeremy

Hunt is the man who took the decision so whatever conversations

were had they have no impact. not say and come clean. He made it

absolutely clear to parliament he had no inappropriate discussion,

and Rebekah Brooks, the one who was supposed to have discussed it with

him, testified yesterday that she had no inappropriate discussions.

This horse is dead, you keep flogging it. What is important

about the whole process it was Ed Miliband who called for better

regulation for the press in the whole process, it was Ed Miliband

who called for an inquiry, it was Ed Miliband who said we need a New

Cross party media ownership, if you have too much power in the media it

leads to this. At every stage Ed Miliband has provided the

leadership. He's catching up now, but you were in Government for five

or six years, nothing was done. Thank you very much, enjoy your

holiday A series of inquiries have been

launched as a result of the scandal which has already changed the media

landscape, as we know phone hacking by newspapers in the future, as you

might think, is not very likely. The sale of BSkyB to Rupert Murdoch,

as we have been discussing, has been postponed, perhaps forever,

there are calls for privacy legislation, and as tempers cool,

will there really be any permanent changes when it comes to press

investigations, or intrusion, into people's private lives. Will this

whole affair hasten the decline of newspapers. I'm joined by Max

Clifford, who has enjoyed many celebrities about how to get their

stories in and out of newspaper, and Max Moseley, a strong

campaigner for privacy law after winning a libel case against News

of the World. One thing that has changed is the death of the News of

the World, are you happy about that? Obviously it is sad when

people lose their jobs, but at least they will not be able to do

to other people what they did to me and several people. That has

stopped now I think that is a God thing it should stop. You had a big

payout from the News of the World, some people said it was a million

pounds, are you sad or happy they have gone? I'm sad they have gone,

because the people that have been sacked, but actually they had

nothing to do with it. There is a few hundred people who have lost

their jobs that had no connection whatsoever with phone hacking.

you are sad. Am I right in thinking that the appetite for the kind of

stories they did will continue in the public so, the desire to fulfil

that in newspapers will continue, nothing big will change, the title

will go, but somebody else will do it? The Sunday Mirror printed an

extra million couple, the Star, several hundred thousand, they all

sold far greater numbers than they had previously, there is a huge

market. They are trying to capture that market. As indeed is the Mail

on Sunday. That won't change, people will still be looking at

your private life and the private lives of other people?

difference is now there is a recognition that we need to

safeguard privacy. Where until now there was no chance of getting any

sort of law done in England because parliament, the Government, even

the police, were all in the thral of Murdoch, now that has been

broken, I think there is every chance the spligss will look at

this objectively instead of asking themselves would it please Mr

Murdoch. Do you think the fear of the Murdoch has gone and they have

lost their power they had, so there is an appetite for the privacy law?

You have seen that. Mr Miliband, someone said to me what are the

Taliban doing asking questions in parliament, the other day. But they

are all standing up to Murdoch mur, they are all, if you like,

criticising, none of them would have done that before, they were

afraid of him. At the moment, Rupert Murdoch is a very powerful

and clever man, he won't take what has happened lying down. We will

see what he comes back with. The man has a lot of power worldwide n

Australia he has 70% of the media, big chunks in America. We think the

difficulty is when all the stuff comes out that is coming out now,

when all the information comes out, when we learn the full contents of

the Harbottle & Lewis dossier, for example, I think Murdoch will have

great difficulty keeping control of his company. I think he may well

end up going. That might be the case, but the reality is, I was in

a fish and chip shop in Byfleet, called Super Fish, I said everyone

has a right to privacy, but would you like to know the secrets of the

rich and famous, that was what they were saying. Everybody loves gossip,

it doesn't mean it is right to print it. That is the whole point.

So when it is pure gossip, when it is tittle tattle, when it is tawdry

revelations, there is a strong argument for not doing it. I think

we will get a law to stop it. hope there is not a law, I hope

there is a free pre, but a Press Complaints Commission that actually

is - press, but a Press Complaints Commission that is actually strong

enough to take care of the phone hacking and things like that. If

you intrude into somebody's private life, you have to justify it on the

grounds that the public should know this. It very much depend ones the

differences between what the public is interested in, in the fish and

chip shop, and what is in the public interest, the public might

be interested in Ryan Giggs sex life, but it is not necessarily in

the public interest? That is the law we have now. If you balance the

right of the individual to privacy against the right of the public to

know, and the judge applies a very intense fob cuss. The really

important thing is - focus. The really important thing is when it

is very focused it should be a judge not a tabloid editor which

has a strong vested interest. system is at the moment is unless

you are rich you can't take out the super-injunctions. You help people

in these case, financially, because you know that you have the means to

do that? First of all, Max is quite right, that is not a criticism of

the law, it is a criticism of the legal system, that alies all over,

it is too expensive. On the particular point, yes, I did and

have been helping a few civil actions, that, to begin with was

the only way to get it into the public domain. Do you think having

anybody own 40% of the British press, or whatever the figure, do

you think that is healthy? No, I have said for a long time, I think

probably something like 20-25% is the maximum any single person

should be entitled to, in terms of the control of the media in one

country, let alone 40%, with BSkyB it would have been a lot more. I

can't see then, anyone is too powerful and too strong and the

politicians need the support of the media. Far too much power in the

hands of one group. The combination of the press and television, it

should never have got to this stage. You are in business, you have been

in business for your whole life, do you think the Murdoch empire will

unravel? I think it will probably get broken up, at least in this

country, there is a problem with one family having so much power, it

is wrong. We need media plurality. Are you very happy to have taken

the payout from News International for invading your privacy, it was

obviously a difficult moment for you, you got a lot of cash out of

them? At the time I wasen the only one to take them on, as one of the

five people named nobody else went after them, when I got my

settlement people came out of the wood work and had the courage to

stand up with them. It was wrong, I had good relationship with News of

the World, as I have with every other newspaper and around the

world. I fell out with Coulson, we fell out over something, it wasn't

News of the World, I was still dealing with the other papers and

Sky. Did you have to sign a confidentiality report? No nothing

at all. The problems of the media have got gone away, in fact they

might have become even worse. The head of an emergency summit

tomorrow, the IMF has warned European leders to get their act

together and be more bold in stablising countries like Greece or

there will be global spillovers. The situation is very serious.

On the surface this is all about managing what they are calling a

partial default by Greece. In other words, that financing a new aid

package to Greece will involve giving back to people money already

lent to Greece less than they expected. There is something much

deeper at stake here, as different key players in Europe put forward

rival plans. And that is, the apparent disunity between France,

Germany, the big powers in the eurozone, and that is something

that sets a bad signal for the future for handling the other

sovereign debt crises that are bound to occur, that is what has

spooked the markets. As Greece waits for a new bailout,

Government austerity policies continue to provoke unrest. Taxi

drivers facing deregulation see themselves in a fight for their

livelihoods, today it turned violent. And as Europe struggles to

make up its mind about a new package the markets are losing what

faith they had, pushing the price of borrowing up for other

Governments, including Italy's. meeting is very important, this is

the real answer to the situation that we are facing. It is not only

the entire situation, the way in which Europe will manage a

situation which has been getting worse and worse. So the pressure on

leaders, critically those of France and Germany, to settle their

differences over the sovereign debt crisis, is growing steeply. Germany

has argued the banks themselves must share the pain of a new

bailout. But several other powerful EU countries say that would

effectively mark a partial Greek default, possibly triggering

financial turmoil. The head of the European Commission appealed today

for these differences to be settled now.

Nobody should be under any illusion. The situation is very serious. It

requires a response, otherwise the negative consequences will be felt

in all corners of Europe, and beyond. So the challenge facing the

leaders who will arrive tomorrow is clear enough. The question, though,

is whether they will be equal to it, and how they will reconcile an

array of possible options, almost all of which have serious downsides.

So, given that, is there going to be a deal? The German Chancellor,

Angela Merkel was playing it down earlier this week, President

Sarkozy has gone to Berlin tonight to try to get common agreement, if

France and Germany, the two great motors of the eurozone, political

and economic, can agree on this, the best way to put this package

together for Greece, then the rift will be healed between those two on

this issue, and things can move ahead. Now there is still

disagreement about this central issue, which is that the Germans

want banks to pay for at least some of this bailout, about 50 billion

euros worth, they want to do that from a tax op the banks that have

benefited from selling and dealing in Greek debt. The French don't

like that, obviously the financial markets are particularly nervous

about that idea. It seems to penalise people to give them back

less than they were expecting. That's the crux of it. But the key

thing really will be, whether any further agreement can be made in

the coming two days, both in Berlin, and then in Brussels later tomorrow

and Friday. On what the right mechanism should be with dealing of

crises of this nature. Because it is bound to reoccur, possibly with

the Spanish, with the Italians, with the Portuguese.

I'm joined now here in the studio by the Shadow Chancellor, Balls. We

have seen a series of sticky plasters and that will continue, do

you think the euro will continue in its present form? I think the euro

will last because there is a political commitment. Sticky

plaster after sticky plaster has been found out for a year now

because of a lack of decisive leadership from the Governments in

the eurozone to say we will sort this out. The crisis has moved from

Greece to Portugal and Ireland, now to Spain and Italy. This is hugely,

hugely dangerous and serious, and will have a direct impact on the UK

as well. We can't be bystanders, we are close to a real crisis. But we

can't be bystanders, but we have no way of particularly influencing

this, we are not playing in the euro, and you say lack of

leadership, that may be true, Britain can't offer it, what can

they do? Can, there is no doubt our Prime Minister and Chancellor have

been distracted in recent weeks, but the fact is that this is key to

our national interest. Half of our trade is with our European partners.

What should they do? They should say we are not in the eurozone, I

have to say thank goodness we are not, for Britain to be in the

eurozone would be a complete catastrophy. That is another reason

for saying we can't be in leadership? We can be an honest

broker. In past crises other countries have worked closely with

each other, the same should shap now. Our Prime Minister should go

to the meeting tomorrow, our Chancellor should be engaged in the

debates actively tomorrow. To do what, what should they say? They

should say you have to deal with the situation as it is now. You

have to stop the contagion, you have to accept that unless there

are clear guarantee, which are European wide, or eurozone wide, to

say we will put a guarantee under the debt of these countries, the

crisis is going to get worse and worse and worse. Has to be done. It

does mean more co-ordination. means German tax-payers have to

guarantee Greek debt? That is the reality. You wouldn't British tax-

payers to do that. That is why we are not in the eurozone That is the

price you pay for going into a single currency. Countries like

Greece have borrowed more cheaply because they were part of the

eurozone area. The point where that becomes clear it is in doubt there

is a crisis interest rates go up, the debt is not sustainable, as it

spreads into Spain and Italy, it is billions of exposure, hugely

significant, and the world cannot allow the eurozone to fail to

resolve its political issues and allow that contagion to destablise

the British and global economy. are effectively saying that the

eurozone has to get tighter and tighter bound together more tightly,

that the Germans really have to, you are saying that is implicit in

the project, that leaves Britain further on outsued, this is really

a two-speed Europe with Britain on the outside? I don't think it was

inevitable that the eurozone had to have that degree of fiscal co-

ordination, the more it went wide to countries in southern Europe it

was raisek. In European politics you have to deal with reality, the

reality is without greater burden sharing and co-ordination it will

be in deep crisis. The German taxpayer will have to be told this

is where we are. Britain would have more leverage, would they not, for

example, if the Labour Party voted against doubling the increase in

our contribution to the IMF, the Government was in favour of it, it

went through. You seem to be saying we should be telling people how to

do things but you are not prepared to do any money to it? I'm in

fairness with the prescription, not without sorting out the European

issues. The fact is our Government, our Chancellor and our Prime

Minister, have basically been absent from this debate in the last

year. We should be trying to lead these debates. They feel it is

complex, as Euro-sceptics we should keep out of it. We should be in

there making the argument, I don't think there should be a taxpayer

contribution to a eurozone facility. With great respect Ed Miliband two

weeks ago was being accused of not being able to lead his party, he

won't be able to lead Europe? Leadership is about dealing with

crises as they come along with a clear strategic view. In the last

two weeks Ed Miliband has had a clear strategic view on the hacking

and has led the debate. Our Prime Minister can't lead on hacking or

in Europe. That is a dangerous place for Britain to find ourselves,

essentially in the European debates, headless, when jobs and growth in

Britain are at risk. Do you see an appetite for the German tax-payers

to do what you have been suggesting, it is suggested within Europe, and

there is hugely contentious issues within Germany? In the end it will

happen, the longer it takes the more dangerous the crisis is. Our

Prime Minister and Chancellor should be urging action, and that

co-ordination. Spending other people's money is the point I'm

making? They shouldn't just say the bigger your cuts the faster, the

better. It hasn't worked in Greece or Ireland, here in Britain we will

have GDP figures, what has happened in the last six months is our

economy has flatlined. We are trying to take that medicine and it

isn't working, no wonder our Chancellor of the Exchequer is

worried tonight. My view is it is time for a bit of leadership.

Nine days are all you have left to tell the Government what you think

about HS2, the high-speed rail network which is planned to cut

journey times between the north and south of England, with trains

moving at more than 200 miles an hour. The cost, �32 billion.

Critics, many who live along the proposed route, say it is a waste

of money. Others say it is the only way to make the railways fit for

the 21st isn'try. Will HS2 ever I'm about to catch a train from

Birmingham to London, I'm looking forward to the time of reading a

book or do work. If the high-speed rail service comes in, more than

half an hour will be cut from my journey. It will cost an absolute

fortune, but supporters say it will deliver huge benefits to the

economy. Even at current speeds, long

distance train travel has become increasingly popular in Britain,

and the trains are getting more crowded. Building extra capacity is

part of a case for HS2, the high- speed rail project. Long distance

rail trips almost doubled in the period from 195 to 2008. Domestic

air travel grew rapidly too, but dipped sharply in recent years.

While the number of long car journies has hardly grown at all.

Just about everyone thinks the rail network needs extra leg room, but

there is violent disagreement on whether HS2 is the answer.

doesn't stack um economically, environmently, even technically it

can't operate in the way they said it should. We need the confidence

to develop the best technology available and make sure we are

connecting our cities properly and A big part of the economic case for

high-speed rail depends on the idea of saving people time. The

assumption is that valuable people are spending lots of valuable

minutes doing absolutely nothing when they could be working. But

does that really hold up any more? On any train these days, and not

just in first class, you will find people working away on laptops and

smartphones. Not only can I work, but I do it in comfort, and I'm not

disturbed by phone call, I'm more productive here than sometimes I am

in my office. But will getting to the office half an hour faster mean

a big boost to productivity? don't think it will make a

difference at all. I'm not sure it is money well spent. I work two to

three days a week in Birmingham. And we use the Internet and

conference calls any way. So really, I mean, we're living in a much more

technological age, I don't really see, I think it would be good to

invest maybe more in better Wi-Fi for more people. At speeds of 225

miles an hour or more, the HS2 project promises to transform rail

travel. It is in two stages. First the line from London to Birmingham,

to be completed by around 2026, at a cost of something like �17

billion. That will cut the time of the fastest journey from an hour

and 24 minutes to 49 minutes, there will be a knock-on effect for

trains heading further afield. The real time savings in the north of

England come in the next phase, to be completed in the mid-2030s,

pushing the total bill up to �32 billion. That would reduce the

journey time to Manchester to 55 minutes, to an hour and 13 minutes.

While an hour will come off a trip to Leeds, putting that city an hour

and 20 minutes from London. There is now ferocious opposition

to the plans, mostly from those living along the route. Opponents

say they prefer investment in existing networks, where passengers

would see benefits sooner. HS2, they claim, doesn't make any sense.

The business case is deeply flawed, I'm a business person and been

through many business cases and produced them. The costs exceed the

benefits, that is perception it will help the north, when all the

economist ace gree they will benefit primarily in London. Most

of the jobs will be created in London. This is an exciting, sexy,

pointy-nose projects at a time of austerity, like Concorde, can we

spend more than �1,000 a household for something that is not top of

the priority list and doing it in the most expensive possible way

with a completely new line. Business supports of the - Business

supporters say the economy will suffer in the north if it isn't

built and it is not just about speed. It is about tackling the

capacity restraint, I haven't seen a better way to tackle the chronic

capacity restraints we will face in the Network Rail. East Coast Main

Line will be full within 12 years, this is the best way to tackle the

capacity. The time savings are like the icing on the cake. They bring

additional economic and regeneration benefits.

Whether you think spending billions on high-speed rail is a good idea,

is how you see our working lives changing in the next few decades.

Is Britain going to be a country where Japanese-style bullet trains

speed to us meetings one hundreds of miles away in minutes, or does

it like this. Matt runs a software business a few miles from the high-

speed line. Jane hasn't met Billy. Everyone has been in the same room

not necessarily at the same time. He and four colleagues spread

across south-east England, meet on- line, rather than by hopping on to

a train. Where would you guys like money spent on high-speed rail or

high-speed broadband? Both. My vote is for high-speed broadband, that

is a more effective way of bringing people together in the future.

want high-speed broadband on trains!

This is the office of the future! For one huge train enthusiast, the

idea that fast broadband might replace fast trains is preposterous.

The music producer, Pete waterman commutes from London to Warrington

three times a week. Broadband doened employ people, all it does

is make telecommunication companies richer. Do we want to employ people

and distribute the wealth and bring more people into the working ethic,

or do we want to just put everybody playing games all day long. What

about the mounting evidence that the business case for HS2 doesn't

add up? No way the numbers add up, that is where the argument all

falls down, this is the dream. Build it and they will come. You

cannot analyse railway, you have never been able to. Since they

built the first railways, everybody has been doing figures. If you are

going to do that, don't build the railway. You can make 50 arguments

for and against. What they never do, is look at history and say every

time we built a new railway the country has changed for the better.

My trip to London is almost over, 80 minutes of wasted time or

productive work, take your pick. The truth is, the case for HS2 is

full of so many variables it is impossible to say today whether two

decades from now it will prove worthwhile. So, politics, not

economics, could decide where this journaly ends.

Now joining me is the Conservative MP whose constituency lies on the

route, and joining me from Birmingham is Patrick Twist, who

signed an open letter from business people supporting the Government's

plans. Why is it not the answer? simply doesn't make sense from a

taxpayer, value for money perspective, there is an awful lot

you can do with �30 billion, that will generate a lot more new jobs

in the north of England. It is not just new jobs, it is about getting

around this country, you do accept there are real problems on the

Network Rail? It doesn't solve those either. The rail problems are

now, we are incredibly congested on the West Coast Mainline. This

wouldn't do anything until 2026, 15 years away. There is a lot to be

done now, not waiting until then. What is the case for building this,

why do we need it? I think it is primarily the capacity issue, and I

have heard what Angela said, but the reality is that improvements of

that nature won't be delivered within the next six months or so.

Whatever the nature of them, they will be delivered over a longer

period. And the sort of improvement that is we are talking about would

not deliver the added capacity that is going to be needed in the long-

term through to the middle of this century. But Mr Twist I was struck

by hearing one of the leading advocates for it, effectively

saying it is a leap of faith that will cost the taxpayer �32 billion?

I don't endorse that, I don't think it will cost the taxpayer �3

billion. If you look at the case for HS2, the benefit cost ratio,

that is the ratio from cost to benefit, it comes out according to

the department for transport, who historically have not supported

rail projects. It comes out at 2-1. I know that a lot of people

watching this will think you don't like it because it goes through an

area that affects your constituent, and naturally they will be

irritated by it, not in my backyard. We see that with projects from wind

farms to high-speed rail links? am not a NIMOBY. It was raised to

my attention because it was going through the middle of countryside.

I supported the principle in March 2010, and objected to the route.

Over that time I have spent a lot of time looking into the business

case and the detail. It doesn't add up, tax-payers have a right to that

money. You don't want it to go through anywhere, you think it is

wrong. What would happen if we don't build it. Would would be the

downside for the country. We would have the issue of capacity,

whereby I don't know if you travel on the West Coast Mainline, already

if you travel up on a Thursday or Friday evening, you will find that

the trains are already full. We would be just left further behind,

you look across the world and see what's happened. In 1964 the

Japanese built their first line from Tokyo to Osaka, I haven't

heard the Japanese saying that was a mistake. In France, 30 years ago,

they are connected to two major cities, Paris and Lyon, they have

expanded it further. I entirely endorse what was said there, build

it and they will come. That is true about France and also Japan and

Spain? Of course there is an issue of distances, they have far greater

distances to travel. There is also an issue that there is some magical

thinking about the benefits of those projects, some of them have

been reduced. In China they are slowing their high-speed trains

down. In France there isn't an overwhelming endorsement for the

regenerative capabilities of high- speed rail. Very often the

regeneration is sucked into the city and way from the hub that is

seeking to benefit. With Members of Parliament at last

heading off for their summer break, we wanted to bring back the best

political brains in Britain. It says here, the Newsnight panel to

give us their thoughts on where we are in the hacking scandal and

politics more widely. I'm joined by Danny Finkelstein, who is a Times

columnist and used to be an MP for the Conservatives. Julian Astle,

and Peter Hyman. We have all been very entertained,

informed, it has been a fascinated, extraordinary couple of week, but

for the party leaders, has anything changed? Quite a lot has. Mainly in

the Westminster bubble, this issue won't decide the next election,

let's be clear about that. It has changed the dynamics, Ed Miliband

is on the front foot, a good week or two. David Cameron has looked

very uncomfortable, he has been on the back foot. It is a frustrating

few weeks for Nick Clegg, what he knows, most people would concede,

his party is the one party of the three that has managed to keep Anne

proper rate distance from the Murdoch people. Maybe it is the

other way round he would concede that too. For whatever reason that

is the historical fact. He hasn't a platform to make that case. He has

been sidelined. The good news from his narrow party political

perspective is this is a slow burn story. We have a year, maybe two

years of inquiries, revelations, investigations and so forth, as

that happens it will reflect well on the Liberal Democrats?

That is true, it won't go away however well David Cameron did

today? It won't go away for a story, nor ought it. Julian is right, it

is not an election settler. It will change the terms of trade in

Westminster, it already has t will help Ed Miliband, particularly with

his party base. Because, I think one of the reasons why he went down

disastrously, with his party base, was over the strike, and this

helped him to rebound. He restored the drop that it had in his numbers.

Is that true for the Labour Party, Miliband is saved as the leader, is

that good? It has given him a lot of space to talk about the things

he needs to, like the economy and health. He will be listened to in a

new way. I don't agree with this idea that no-one out there care

about this, they really care about education, health and the economy.

Of course that is true, but these things are connected. I remember in

Government working for Tony Blair, when there was a trust issue about

Tony Blair on an issue, on the other issues like health or

education, the polling went down. So, in fact, the trust contaminates

everything else. That is fair point. Just a minute, my guess is people

will look at the economy differently now and cuts, which the

Tories have wriggled out so far, because they trust Cameron a bit

less. It is true, most don't study the detail of the cuts and what

will happen to the NHS. We do think we know something about character,

that will be a problem? This has presented itself to most people

primarily as an issue about politics, it is primarily an issue

about my profession, with journalism and the police. The

effect on Cameron will be the misjudgment over Coulson, and

people do think that is a misjudgment ta, has affected them.

There will be some bleed over, I wouldn't exaggerate it into other

issues, there has been a sort of hysteria in Westminster about the

political impact this is likely to have in the medium term. It doesn't

mean it is not a hugely important issue, people do care. The politics

will be very important. significance of this for David

Cameron, frankly, is it seems to reinforce his negatives. He is

captured, he is a prisoner of his own background. He's seen as the

high society, blue-blooded, Conservative, which very rich and

powerful friends, who perhaps he is cut off from, who doesn't

understand the majority of the country. The pictures of him with

Rebekah Brooks and the Murdochs and all the rest of it simply reinforce

that, that may be unfair but that is the fact of the matter.

doesn't just look cosy in that sense, we heard all the stuff about

Gordon Brown and Tony Blair, when Cameron says we are all in it

together, do you not think the people in the chip shop is going to

say, you are all in this together? The Blair-Murdoch relationship was

not a friendship one. I was in the room when Tony Blair said, Rupert

Murdoch came a friend of mine. He actually said that. I was there.

This is a different one, this is about a set mixing together, this

is about them living together, it is about them socialising, they are

genuine friends, Rebekah Brooks and David Cameron. In terms of people

who meet doing business. I think there was a different relationship.

I think Tony Blair, God bless him was genuine in the relationship he

had with Rupert Murdoch, he wanted to go after, because he thought

that Rupert Murdoch had an understanding of what his readers

believed in, and he wanted to show that he was an appeal it him.

crucified Neil Kinnock in 1982 so the press being there is not

truement I'm struck by a genuine friendship being a bad thing?

struck by the phrase "I was in the room", all of these guys were in

the room. For many years Liberal Democrats have been patronised and

laughed at because they were never in the room, now it is a good thing

not to be in the room. That is all from Newsnight tonight, Michelle is

here with more tomorrow, good nationwide.

Hello, if it is warm sunny weather you are after, don't hold your

breath. Patience is a virttu, cloud around for many - virtue, cloud

around for many of us tomorrow. Scattered showers, some meaty by

the afternoon. Wherever you are, disappointingly cool once more,

with temperatures stuck in the mid- to high teens for the most part.

Difficult to nail down exactly where the showers will occur. The

potential is there. That said, across the far South-West of

England, there are showers sticking out in sunshine, the west of Wales

too. The majority of Wales will be disappointingly cloudy, with bursts

of rain developing by the afternoon. On a more optimistic note, Northern

Ireland will stay largely dry, with broken cloud and some sunshine.

Scotland too. There will be showers, particularly up over the high

ground. Many places probably avoiding these and staying dryer

than we have seen recently. Looking further ahead, a lot of cloud and

further showers rate right the way through to the afternoon.

Disappointingly cool across many areas. Chilly nights to come. A

similar story further south. Some bright spells but a lot of cloud,

and a few showers likely as well. Can you see the extent of a cloud