21/09/2011 Newsnight

If you can keep your head while all around are losing their's, you

obviously haven't a clue what's going on.

Banks in trouble, politicians panicked, and the printing presses

being warmed up for more money printing. From Athens to London to

Washington, trouble is brewing. economy is weakening under us, the

tide waters are receding, there is not much left in terms of demand,

we have to do something to try to stimulate it. As the countryside

revolt over planning deepens, David Cameron tries to reaching out to

the campaigners. The boss of Next, wishes he would stand firm, he has

six big stores he would like to build and can't under the present

laws. Sick and hungry, they say, because they don't support the

Government. Yet Britain gives hundreds of millions to Ethiopia.

Are British aid officials allowing a brutal Government to decide who

lives and who dies. Can the International Development Secretary

tell us why we assist a bunch of thugs. This is our future, we start

building it today. The Liberal Democrat leader gives his people a

beginners guide to Government, it is jolly hard, apparently. How long

can this pitch last. 20% cuts in pensions tens of

thousands of redundancies. The economic crisis is so bad, a

handful of country's problems with one currency. In Washington the

Federal Reserve is trying feverishly to drive down the cost

of borrowing, high spending money converting long-term loans into

short-term debts. We should have the four horsemen of the apocalypse,

but we have our guests. Let as start with the Greek

Government tonight. What have they decided they will do, and will it

be acceptable? There was no deal tonight, Jeremy, because a deal

would involve a full austerity package from the Greek Government,

and the IMF and the European Union, the so-called troika, handing them

over eight billion euros into their bank account. This hasn't happened,

it won't happen because we have only had half the story. The Greeks

have announce job losses and pensions cuts, and tax rises on the

poorest paid. They have announced this central property tax, two

billion euros a year, collected through electricity bills will last

to 2014. One is it is not enough, and secondly, I have heard the IMF

is call for the Greeks to meet their 2011 target. They are way off

that and spiralling further away. This isn't going to happen. My take

on what's happened to today is this is the Greeks putting on the table

this is what we can do. They will go to Washington at the weekend and

say do you really want to bankrupt this country over the difference

between what we have delivered today and what you want. We have

been tending to see this as the last few weeks as a crisis in the

eurozone, but actually it is clear, this is a global crisis, isn't it?

I think it is certainly a big global worry, of course it is not

just Greece causing worries, it is also the slow growth of the US and

other economies, the difficulty in climbing out of the debt crisis

that we saw in the last three years, and the fact that we're still

having to turn to the central banks for help. What is very striking in

the last few weeks is we have had people drawing parallels with the

October 2008, the feeling we had then. In some ways the situation is

better and in some ways it is worse. You had the stark warning from the

IMF yesterday about the state of the economy. Another stark warning

today about the state of the financial system, and particularly

the state of Europe's banks. I think that is something that is

going to be increasingly focused on in the next few weeks. The IMF says

the European banks are looking at paper losses of $200 billion

because of the losses over the last few years. You have a lot of people

turning to the Europeans saying this is a grobl problem, we told

you to fix Greece, we haven't fixed Greece, for goodness sake you must

at least protect your banks from the consequences of that failure.

Does it looks a if there could be major European banks going down on

this? We have seen three big American banks downgraded today,

several Italian banks, one Belgian banks, on top of the French banks

downgraded last week, all on top of the bleeping radar of the Greek

crisis. If somebody issues the word "default" into the conversation,

sooner or later it will come on the agenda properly. If they can save

Greece for October, in December we have huge repayments and March. As

Stephaine says there, the declining growth rate of the world, combined

with the declining tax take of this country, has to pose the question,

what losses are sitting inside the French, German and Belgian banking

system. That is really the question. Until we get the new fund. The ESF,

the safety net to catch those losses there is a giant question

mark. Central banks are increasingly talking about printing

money, quantitative easing. We are just finding Governments, once

again, and all of us turning to the central banks, for more of a quick

fix, more of a support for the recovery. I think there is a lot of

uneasiness about how much the central banks can do. We saw the US

Central Bank, the Fed today, do the excitingly entitled Operation Twist,

which was last attempted in the early 1960, I won't go into the

less exciting details of what they did. They are not injected money

into the economy, because they are worried about some of the

consequences of having lots more money around. They are shuffling

the debts and assets they told, in an effort to push down long-term

interest rates, so lower mortgage rates and business loans. A lot of

people saying I'm not sure this will have a big impact. A lot of

companies in the US have lots of money to invest, they are not

investing it, interest rates are already low, that is the issue.

Even the central banks have less ammunition now to throw at this

than they did a few years ago. Another key point in that IMF

report that we saw today, on the state of the financial, the global

financial system, is they worry this long period of superlow

interest rates, is not only putting off the day of reckoning when it

comes to debts in Europe and elsewhere, but it is also actually

laying the seed for another crisis. Because it is actually sending

people off looking for high returns and yields, risky investments again,

just the kind of behaviour we saw leading up to the last crisis.

There are some real concerns here about running out of ammunition.

What a cherrio note on which to end. Thank you very much.

Be Last night's suggestion that the Government might ever so slightly

depart from its deficit plan, there has been one message coming out,

there is no alternative to plan A. As the world economy gets worse and

the growth rates are down, there is a distinct note of serious anxiety.

What are the discussions at the top of Government, what are the options.

Is there anything better than hoping Mervyn King comes to the

rescue? It's difficult for anything very much to flourish in autumn.

But particularly chill winds have gone blowing through the British

economy. Borrowing and unemployment up, growth forecasts down. And

there is that currency crisis on Britain's doorstep too.

So the political message to the Liberal Democrats today, employment

and economic growth is firmly rooted in the Government's thinking.

Deficit reduction, it lays the down daigss for growth, but on its - -

foundations for growth, but on its own it is not enough. That is why

we are investing in infrastructure, reducing red tape, promoting skills,

getting the banks lending. But the outlook for the global economy has

got worse. So we need to do more. We can do more, and we will do for

more growth and jobs. So what exactly can be done to stimulate

economic growth and create jobs. Both the Treasury and Nick Clegg's

own advisers have rubbished suggestions that an extra �5

billion can be found to invest in infrastructure. Instead the deputy

Prime Minister has been talking about shaking the Whitehall tree,

that is clearing blockages in the system and making sure existing

projects are finishing on time. Some of the most prominent members

of his party believe the Government can go further, without uprooting

their commitment to eliminating the deficit.

The Liberal Democrats don't want to take a leaf out of Labour's book by

dramatically slowing down deficit reduction. There are calls more

moving resources around. I'm one quite attracted by a reduction in

VAT. Plan B, or even plan A plus, these are the plans that dare not

speak their names, because of the risk of affecting the whole issue

of confidence. I don't doubt for a moment, that contrary to what was

said in public, I don't doubt there was a lot of work going on in

private as to just exactly what could be done within the envelope

of the predicted public expenditure, which would allow for stimulus. It

is a very, very fine judgment. have agreed the plan that there

will be investment, but it is not good at being a plan sitting in the

departments of Whitehall, it has to be happening in the north-east and

the West Midlands, it is getting the scheme on the ground, the

houses being built, the infrastructure being laid, first

thing, and then we have to, it seems to me, look in Government for

anything else. Where we can perhaps take some money that might have

been spent, not with the direct effect on the economy, and move it

to somewhere where it can have that benefit. But there are fears that

displaying any deviation from current spending plans could spook

the markets. So the Government is looking for other ways to help the

economy pick up. Money, of course, doesn't grow on

trees, but it is quite handy that the Bank of England can print it.

Newly published minutes of the Monetary Policy Committee, have

raised the prospect of a new round of what is called quantitative

easing. I have not hidden the fact that looking at the economy as a

whole, that is one contribution that they could make to stimulate

recovery. The economy is weakening under us, the tide waters are

receding, there is not much left in terms of demand, we have to do

something to try to stimulate it. The last thing that remains is QE.

As well as quantitative easing, the bank also discussed whether

interest rates could go even lower, beneath half of one per cent. Some

ministers say even within the current spending plans, the

Government itself can do more to promote growth. We had to have

stability and stimulus. We have to have both together. Stability

consists of sticking with our commitments on deficit reduction,

we are going to do that, we won't deviate from that, were there are

things that can be done to stimulate the economy. Today the

key measure from Government is that there will be no departure from

plan A. But some say, if you separate the wood from the trees,

you would realise that plan does allow the Government to do more, to

boost growth in difficult times. How close do they come to plan A

plus, or plan A, sub section 1? There is going to be a growth

strategy unveiled at November. And there was discussion in the cabinet.

It was put on in Danny Alexander's talk about putting a rocket under

existing plans and getting them in on time. After the word about �500

billion was announced, it was slammed on by the Government and

said it was not going to happen. That doesn't mean there aren't

those pressing the Government to do more. There are quite senior

Conservative backbenchers saying, actually, plan A has to be ajusd.

They are taking a look at the growth figures, and they will

remain low, and the Government will have to take a look at plan A plus,

and plan B. The Government's calculation was simple. Why risk

sending a signal to the markets that you might be considering

fiscal stimulus, and you might in some way be departing from the plan,

for the sake of �5 billion, when we heard from the Monetary Policy

Committee, there could be �50 billion going in through

quantitative easing, or printing money, much easier politically.

One of the ways of mending the economy, the Government has been

telling us, for weeks now, is to reform the planning laws, so that

in future they are tilts in favour of developers. This simple idea has

achieved the brilliant feat of uniting conservation organisations

from the National Trust, against a Conservative Prime Minister. Today,

David Cameron, tried to mend his fences with them, by claiming he

also wants to protebt the countryside.

It is a picture-perfect vision of England, at the heart of the

Toryshires, place you might expect to be at peace under a

Conservative-led Government. Beneath the idyllic exterior of the

Northamptonshire village of win nick, not including the animals,

trouble is brewing. Within I public speaking, I was told to do

something very flashy, I hope that was flashy enough for David Cameron

to remember win nick. Bruce is a scientist that mixes herbal

cosmetic products for cleaning products. He has always been a

loyal Tory, and a donor to the party. What is happening outside

his front door is making him change his mind. For years he has been

enhancing the countryside for those to enjoy. Now, he believes the view

will be ruined by a row of 400 wind turbines, that a German company

wants to build along this ridge. If the plans go ahead it will be the

Government's fault. To make an economic decision, not a viable

decision, to take over big areas of British countryside is a mistake.

The Conservative Party will be decimated at the next election by

the bad decisions. They need to look at "middle England", their

electorate, they are not taking any notice of them, they don't want

wind farms in beautiful areas. they get their way, the valley will

be overlooked by seven turbines, creating enough clean enemy for

10,000 homes. On shore wind is a vital part of the UK generation mix.

It enables us to be part of making sure the lights stay on. We need to

reduce our carbon emissions, and we need affordable energy. Wind

technology fits that bill, in fact, wind is one of the cheaper forms of

technology to design, build and operate.

Whether or not the plan goes ahead, will be decided at a public inquiry

early next year. And though localvilleagers are almost

unanimous - local villagers are almost unanimously opposed, it may

go through. The Government wants to empower local communities, but it

also wants to encourage economic growth. Many now fear when there is

a contradiction between those two aims, it is growth that will come

first. The coalition's new planning policy framework, designed to

simplify the he can siing system, says decision makers at every level

should assume that a default answer to any development proposal should

be left, and planning authorities should approve all individual

applications whenever possible. The local council leader is against

the wind plan, although it is going to public authority before it is

agreed. It should be local people making local decisions, not be

negative, we are a pro-growth council, we are all about growth,

it should be about allowing us to make the decisions. If planning

applications are not popular locally and should be heard at the

appeal, the appeal inspectors should take note of concerns.

residents are co-ordinating a campaign against proposals, they

say, don't make environmental or economic sense. When the Government,

as in this case, get something hopelessly wrong, we should be

allowed to have our say, that is the British way. Now, aware of

concerns like that across rural England, the Prime Minister has

written to the National Trust, to try to reassure them that the new

planning policy isn't an attack on Here the local Conservative MP is

supporting his constituents in their battle against the wind farm.

He doesn't think voters will desert his party over planning policy, but

he wants the planning minister, Greg Clarke, to be clearer about

his intentions. There is too many grey areas about some of these

proposals. I sat in a meeting two weeks ago with Greg Clarke briefing

us on what the proposals actually meant, and then came out and read a

national newspaper the next day that said exactly the opposite. I

just think any confusion, it is our fault if confusion lies out there,

we need to clarify those things. What many want here is simply to be

hold that local people will have the last word on major plans

affecting their community, regardless of national parties. For

the Government to agree to that, would not be so much a

clarification as a u-turn. Over 20 of the country's biggest

businessmen wrote to the Times, and said these planning changes were

the only way for the country's economy to grow. One of them was

the chief executive of Next. Don't you love the countryside? Yes, I

live there. I don't think the planning reforms are about

concreting over vast swathes of the country, if you read the proposals

there are measures to protect the green belt, to protect areas of

outstanding natural beauty. As the MP said on the programme there,

this has been a huge communication problem. That is no what the

legislation does. This is a bogus issue, the royal town planning

institute says 80% of applications are approved. 90% of large

commercial applications are approved, within three months?,

what's the problem? The problem is. I will give you an example, we have

six stops we would like to build, invest �30 million, all on

brownfield sites, employing about 1,000 people, we can't do that

because the planning system won't let us. It will take a long time,

my guess is half of them will go through. For those people who say

there is no problem, it is not true. The reason why the statistics are

very mislead, is because in a lot of places we don't get to the stage

of applying to planning permission. I went to one council and said we

would like to build a shop outside your town, and they said we don't

want those types of jobs in our area, don't bother applying for

planning permission, so we didn't. The statistics don't tell the whole

story. If the new regulations applied only to brownfield sites,

you would be perfectly happy? company hasn't any plans to build

on Greenfield sites. Other companies do, they want to do so

because it is cheaper and the cost of putting in the infrastructure is

not their's but the local authorities, that is undesirable?

Not in all cases. We occupy only 8% of this country, 92% of the country

are green fields, the idea we take some of those green fields and

enhance the living standards and solve our housing crisis with a

small fraction of the line. There isn't a housing crisis? There is if

you are a young person look to go buy a house. That is a cost of

housing crisis, there is actually a surplus of housing? No, there is no

surplus of housing that people want to buy. The trouble is it is all

very well saying you have a job in London, but actually there is a

house for you in North Wales that is vacant. You need to build houses

where people want to live. It is all very well for people to say let

them eat brownfield, we need to build houses where people want to

live. Would you accept the principle that brownfield sites

should be developed first? Absolutely. This is where, and

there is an enormous consensus on this, one of the main things that

the planning changes can do is to make it easier to develop on

brownfield sites. At the moment regulations around building on

brownfield sites, means it is almost impossible to do it

economically. I was talking to a doler last night a site in

Clerkenwell, wants to build housing on it, has been told he can only

build affordable housing, that means he can't afford to build

anything, that site will stay vacant. You have said that

affordable housing is a desirable thing? It is, but the policy for

affordable housing is making it less affordable because it is stop

anybody building anything new. you worried the Prime Minister is

going soft on the issue? Absolutely not, what the Prime Minister said

today is exactly what the legislation said, it says it is

going to protect green belt, national heritage, it says it will

insist on good-quality design, which has never been insisted on bf

before. It is funny how the papers back to the preservation trust

hasn't got the message? Read the document, it makes all those things

clear. How big a hole are we in if we don't get these changes? That is

a good question. As all your reports said there is no easy

demand solution to this, we can't lend our way out of it, we have to

build our way out of it. The problem with building is it

requires physical change. If people want to build new shops, offices,

somebody says no you can't do that, we will stagnate.

Is money given by British tax- payers to prevent starvation in

Africa being used stpor a preive regime there. Britain is a second-

largest donor of aid there. The Government there has been

accused of a crackdown against opposition supporters and

journalists. First IRA minder of how this programme and the bureau

of - a reminder of how this programme and the Bureau of

Investigative Journalism looked at this issue.

Undercover in the Horn of Africa, Newsnight and the Bureau of

Investigative Journalism travelled to uetyopia to look into mounting

allegations of human rights abuses. We revealed evidence of children

dying of hunger. Aid used as a weapon of oppression, to staff the

opposition into submission. 20 years of mass arrests, extra

judicial killings and rape. They used to beat me, they used to do

whatever they like. Then they started raping me. $3 billion in

long-term development aid flows into Ethiopia every year, despite

these allegation, all denied by the Ethiopian Government. This is

completely a report that lacks objectivity, it also lacks even-

handedness, and as a matter of fact, it solely got the source which it

used are opponents of Ethiopia. But following our investigation,

members of the Ethiopian diaspora, have told Newsnight that there has

been a concerted Government backlash. Sadly, there has been a

crackdown by the security forces on people who are suspected to have

co-operated with the programme. We have certainly got propers that

some people have been arrested, - reports that some people have been

arrested and questioned by security forces, and some people have left

the area for fear of what would follow. The crackdown has widened.

In the last two months at least 40 opposition politicians, their

supporters and journalists, have been arrested by the Security

Services. Amnesty International researchers were expelled from the

country last month. I have heard from political

opposition groups that there is really increased tension now

amongst the political opposition, civil society activists have said

that the situation is rapidly deteriorating. To use their words.

Journalists are more afraid, even than they were before. We are

talking about a country where there is a significant climate of fear.

All of those groups are already kpraith operating in a cloim mate

of fear. As our - Operating in a climate of fear. As our report

showed allegations of torture in prison is rife. I have never seen

such being gaigs of human beings. The most certificate - Degradation

of human decision. The European Human Rights Commission reported

there is no evidence to suggest cruel, inhumane or degrading

treatment in prisons. Many have questioned its independence.

If really they wanted the Human Rights Commission to work, just low,

- justly, legally, I think there is a lot to be said. But these are

puppets appointed to the commission. Last year, the UK gave the

Ethiopian Human Rights Commission �20,000. - �230,000. A generation

of people are beaten, some have lost their lives. We challenge a

lot of diplomacy, including British diplomats to get access to what is

going on. What is their response? They say the Government is

interference, the Government says this and that. More apologetic, not

really pressing hard to get what is going on.

Despite the Ethiopian Government's emphatic denials, more evidence has

emerged. US diplomatic cables, released by WikiLeaks, detailed

widespread systemic and wanton human rights abuses over the years.

Hangings, branding people, gang rape, abitary detentions and

killings. We also investigated allegations

that aid was being used as a tool of oppression. People in areas

loyal to the opposition denied aid, fertiliser and seed, allegations

previously brought to the attention of the international community.

position of the community is dismissive, they always want to

dismiss it as an isolated incident, where we present them with some

proof. And we challenge them to go down and check it out for

themselves. They don't want do it. And again, the US gaict cables show

Critics say there is an overwhelming body of evidence, and

that they are losing faith. I have given up on the west. I do

not believe that the west is interested in democracy and the

rule of law and human rights. In the third world. Human rights and

democracy are central to development. The dilemma for the

west, how to engage with a Government seemingly intent on

crucialing dissent. Shortly before coming on air

strikes I tacked to the International Development Secretary

- I talked to the International Development Secretary, Andrew

Mitchell. Do you accept that British aid is being used for

political purposes in Ethiopia? I don't, but I accept serious

allegations made in your film and they need to be answered. I raise

these allegations when I meet Ethiopian ministers, I will meet

one in a few minutes. When I see the Prime Minister, I always raise

these allegations with him. But you have never seen them proved? One of

the allegations, which you mention, is about the misuse of food support.

We had that investigated by officials in some detail about six

or seven months ago, they found no evidence at all of systemic misuse

of food support. So I accept completely that these allegations

must be looked at. Just to be clear about that particular allegation

did your investigators go to Ethiopia to the place in question?

My investigators are the officials based in Ethiopia, and run the

British development programme there. They investigated these allegations,

and as I say, they discovered that there was no systemic misuse of

food support. When you look at the assessments of

the human rights record of the Government of yeethyopia, the

hanging of - Ethiopia, the hanging, the health authorityure, mass rape

and everything else d torture, mass rapes and everything else, one

wonders why one pound from Britain should go.

The British Government will press for these investigations to be open

and independent, that is entirely different from British aid going to

Ethiopia, none of which goes through the Government. We should

be clear that British development, over recent years, has made a huge

difference in Ethiopia, saving literally millions of lives. You

can see this now by looking at the way in which the desperate

situation in the Horn of Africa is affecting Somalia, where probably

nearly 400,000 children are at risk of dying later this year. Compare

that to what has happened in Ethiopia, where the international

development effort has been hugely successful. We have probably cut

the prevalence of malnutrition amongst children, in the last 20

years bs by nearly 50%. British aid works. Can I clarify one point, you

said the British aid doesn't go through the Ethiopian Government?

There is no general support through the Government of Ethiopia, that

was stopped in 205, after the election of the Prime Minister on -

2005, after the election of the Prime Minister on that ecation. We

have an extensive social protection programme, that is administered by

an independent Government organisation, which we monitor

extremely closely, and it gives support to some seven million

people in Ethiopia. That uses aspects of local Government, but

don't go through the central Government, and it relies on

regional implementation to deliver T I have seen it for myself and

followed the way in which the programme works. I have seen how

effective it is in saving lives. The accusation is that aid itself

is being manipulated for other ends? The accusation is food aid is

being manipulated, British officials investigated it on the

ground, and found that we can't be certain it never happens, but we

found no evidence of systemic manipulation of food aid. Do you

also believe this Government won.6% of the vote in the elections in

2005? Well the independent analysis of the election was that it wasn't

perfect, but it was, in African terms, quite good, and better the

than the previous election. How is it, given your confidence in the

legitimacy of the Government there, that the Americans have come to

very different conclusion about the sort of regime it is? These are

leaks through WikiLeaks, they are quite dated, but I emphasise that

all these allegations should be investigated independently. We

always press, when these allegations are made, and they are

allegations, that they should be properly investigated. These

allegations aren't very dated, they date from 2009? They refer to

events that took place in 2008/2009, two years ago, since then we have

made very strong representations and the investigations of my

officials into the distortion of food aid was six or seven months

ago. After we recorded that interview, the Department of

International development clarified that no department official had

been into the field specifically to investigate allegations of misuse

of aid. Their investigation was, they say, a desk-based study

conducted from Addis Abada, which did not seek to approve or disprove

allegations of distortion. One of our news channels carried a

headline "Nick Clegg gets standing ovation after speech". Of course he

did, it would have been news worthy if he hadn't. It is the job of the

stewards at the conferences to make sure critics bin it before they

enter. From a distance, in content terms it was a sober speech for

sober times. A sub-fuss sob bright has been the theme of the

conference. Nobody wants to think their party

has been blue rinsed, ask them what they have in common with the

Conservatives, and they are most likely to say? I'm not sure.

can't think of anything. What have you got in common with a

Conservative? I don't know. Nick Clegg's advisers admit he has

a big job to do today. He has to try to push back that tide of

Conservatism, trying to contest every inch of political territory

within the coalition. But at the same time, take ownership of the

coalition, take pride in it. The easiest way to get a cheer today

would be to bash the Conservative Party. But, we will know just how

secure Nick Clegg feels in the support of his party by how little

he does that today. The first priority has been to

reassure the activists, the people who will have to knock on doors and

try to win back voters. Without them on side, there can be no Lib

Dem electoral recovery. His first task was to thank them. I know how

painful it has been to face anger and frustration on the doorstep.

Some of you maybe even wondered, would it all be worth it in the end.

It will be. I have been genuinely moved by your spirit and your

strength. Thank you. This reassurance went on at length, time

and again Mr Clegg told his party they were doing the right thing,

not the easy thing. The toughest job of all, turning around the

economy. The deputy Prime Minister repeated his insistence there was

no moving away from the coalition's deficit reduction programme. This

has been ment painful cuts, agonisingly difficult - this has

meant painful cuts and agonisingly difficult decisions, not easy, but

right. The main take was on Labour. Mr Clegg delivered his own version

of gloshed's "no time for a novice" line. This was aimed at the adviser

top of the Labour Party. The two Eds, behind the scenes, lurking in

the shadows, always plotting, always scheming, never taking

responsibility. And at this time of crisis, what Britain needs is real

leadership. This is no time for the back room boys.

Labour then painted as the party of vested union interests. The Liberal

Democrats, Mr Clegg said, by contrast, the party of the national

interest. We are in nobody's pocket. Lessons to be learned over tuition

fees, and a determination to resist Conservative calls to repeal the

Human Rights Act Let me say something, really clear about the

human acts. In fact, I will do it in words of one syllabel. It is

here to stay. So much for the break, there was

also, he said, a Liberal Democrat engine pushing forward, like an

initiative aimed at tackling the causes of this summer's riots. Help

for young people with no help for the future and going through the

cracks. I'm launching a new scheme to help the children who need it

most, in the summer before they start secondary school. A two-week

summer school, helping them to catch up in maths and English, and

getting them ready for the challenges ahe. After all the

economic gloom, the message at the end was hopeful. Britain is our

home, we will make it safe and strong. These are our children, we

will tear down every barrier they face. This is our future. We start

building it today. This was essentially a speech about

reassurance. Don't worry, the deputy Prime Minister was saying,

this is still the party you joined. But, through tough, uncomfortable

choices, we, together as a party, have managed to make a difference

to the country we love. You would have put more Tory

bashing in there? No, what is important is to demonstrate we are

doing tough things, not easy, but absolutely right. And demonstrating

for the first time in 70 years you have liberals in power making a

clear difference. As soon as the speech ends, the battle to

interpret begins. As ever, with a leaders' conference speech, there

is no guarantee that anyone, beyond the hall, has heard a single word.

With us to discuss the speech are the Guardian columnist, Deborah Orr,

and editor of the Spectator. Were you moved, you're a Lib Dem, were

you moved? I was moved almost to despair. You have to laugh, don't

you. It was, I suppose, the best he could do. Because he feels that he

has to justify the choices that he made himself. But for me, they are

not really justifiable. In that, I don't mean that I don't accept they

had to do, as Gillian Duffy would put it, "go in" with the

Conservatives. I do accept that the arithmetic of the election meant

that they had to do that. But the choices that they have made since

doing that have been ridiculous. I mean they really are in the midst

of a self-immolation, and the idea they are doing the so-called right

thing, I don't believe that, that they are some how in the end going

to gain respect from all of this is ridiculous. It was interesting his

take was all on Labour, wasn'tn't it? It does make you wonder whether

he's saying the Tories are our lovers forever more, he said we

will never again trust Labour with the economy. You can tell that

easily the mass majority of that hall would rather he was in

coalition with Labour, as they were in Scotland for a while, than being

in bed with the Tories. He's trying to reposition himself as the voice

of opposition inside the Government. That was what the speech was about.

This time last year he was saying he loves David Cameron so much, now

he's saying the Tories are wicked they want to abolish human rights,

but don't worry us Liberal Democrats won't let them do it. It

is not plausible situation. Are we looking at a one-term deputy Prime

Minister, would you imagine? would imagine so, yes. Everything

is so up for grabs at the moment. What you have, actually, is a

political system that's in a state of flux in itself. At the time of

the expenses scandal, and the last election, the two party system was

on its knees. The Liberal Democrats who were offering alternatives have,

instead, been co-opted by one party to prop up the two-party system

they were supposed to be against. The whole thing is a bit like the

banks, you have this sort of zombie political system, marching on, with

Nick Clegg being the very person who was supposed to provide an

alternative, propping up this two- party system, of tit for tat. He's

trying to change them all to British politics. But the Tories

have proved toxic for the Liberal Democrats, they have lost half of

their support. The polls suggest he would lose three quarters of his

MPs through the next election. They are putting on a brave face. He's

trying to remould the party along liberal lines, saying they have

existed for 360 years, they haven't, it is as long as Kylie Minogue's

music cretaceous and they will be probably outlasted by it, the way

things are going. It is interesting he has chosen the 350 years,

because he has taken the social element of the Liberal Democrats

out of history today. He's saying forget the Social Democrats, we are

the old Gladstone party. This is how he wants to go, he thinks he

can lure Tory voters. He was trying to carve that for him. What do you

think? I think Tory voters have been thin on the ground since 197,

so the Tory voters he thinks he's going to lure, I'm not really sure

where they are going to come from. I don't think it is a strategy that

can work. I think that the death of the Social Democratic wing of the

party is a very sad and tragic thing. I do think it is what

Britain needs in the future. So what's happened here with the

coalition and with Clegg, it really makes me feel sort of sad and

worried for the future. It sound as if you are on the verge of tears?

No, I'm not on the verge of tears. But I really do think, it is easy

to laugh at and to sneer and be angry, but it is a very, very

serious thing that is happening, it is a very awful, hollowing out of

an already very hollow political system that we are seeing here.