21/11/2011 Newsnight

At the whiff of tear ga, the politicians supposedly ruling Egypt

decided to quit their post, after three days of protests in Cairo,

the cabinet there resigned en masse tonight. The army, now has full

charge of the state. Our reporter has been in Cairo throughout the

protests. The last teargas attack on this street was just a few

minutes ago, and everyone is expecting more. The fate of the

revolution these people now feel hangs in the balance. Popular

dissent drove Mubarak from power, can it do the same with the current

military regime. Once building house was a boast of Government.

Built in 12 weeks for less than �1,000 each. These houses seem one

answer to the housing problem. taxpayer backing for mortgages

bring a new housing boom. We will ask the Housing Minister if he's

the palest shadow of Harold Macmillan, and ask the boss of the

CBI if it will help. Cometh the hour, cometh the mystery

writer, we talk to Umberto Eco about history and Europe. Does he

fancy a new role in the new Italian technocy. If I was invited by Mr

Monti, probably, yes. A few hours ago the cabinet in

Egypt said they were resigning, their bosses in the army have

tkwrot say if they will accept that resignation. The Arab Spring has

lurched from apparent freedom to bloody crackdown. Mortuary

officials talk of 33 people killed since Saturday and 1800 wounded.

Our reporter has spent the last several days in Tahrir Square in

Cairo. What is going on? As you say, Tahrir Square now full of tense of

thousands of people. More have been -- tens of thousands of people.

More have been arriving this evening. We have heard the

announcement that the Government has tendered its resignation. We

don't know if Egypt's rule of the Supreme Council of the armed fores

are accepting that or not. The real dilemma now for the Armed Forces is

what alternative cabinet will they possibly find. The anger on the

streets is so intense that I think few other people, technocrats,

politicians or civilians will be prepared to take on that job,

unless they are given considerably more power. Because the current

cabinet, the resigning cabinet really has been a puppet of the

Armed Forces, that is why it has been so discredited. So, on the one

hand, the army doesn't want to give civilians more power, it is afraid

that will damage its interests. On the other hand, it desperately

needs civilians as a figleaf, otherwise anything bad that happens

is blamed on the army itself. there a Government tonight? Well,

we just don't know. And the army has itself in this terrible dilemma,

because it isth has allowed or ordered the violence, and it is --

because it has allowed or ordered the violence. It is the latest in

the whole ineptitude that the supreme commander of the Armed

Forces has shown since the beginning of things, that Egypt has

lurched from crisis to crisis. At the beginning of the month, most of

the political forces were principally concentrating on

campaigning for the parliamentary elections, which are still due next

week. Then suddenly the whole political agenda has been thrown

off kilter by the announcement, that didn't come now, by the army

that it was seeking super- constitutional privilege that is

would put it above the oversight of civilians. That has put us to the

position where Tahrir Square is full of angry people, angry at all

the latest bloodshed. How have we got to this point? Well, it really

is just a whole series, I think, of mistakes of this kind, some

political forces were very keen to see the elections going ahead,

particularly the Muslim brotherhood, because they think they are going

to win. But the whole question has been sub sumeed by how long this

transition will last. Presidential elections might not come until 2013,

and people aren't satisfied, as the death rate increases, people's

demands are going up, people are now worried simply that the army

intends never to leave the stage. We have been here before, for the

last three days teargas has billowed over Tahrir Square, rocks

and petrol bombs from protestors. It is the same fury, in the same

place, as during Egypt's revolution ten months ago. The revolution that

overthrew a dictator, and was supposed to hand power to the

people. Ten months on, the people don't control Egypt. Now they even

had to battle again to control this one sqare.

The last teargas attack on this sthreet was a few minutes ago, --

this street, was a few minutes ago, and more is expected. The fate of

the people hangs in the balance. If they were worried about the

attentions of the authorities, they are even more worried now. The

violence shown by the security forces proves these people believe

the determination of Egypt's military rulers to hang on to power.

Exactly what the protestors came back into the sqare to contest.

TRANSLATION: The Interior Ministry is striking at the people. Are we

not the people of Egypt, are they different to us. Are we not one

people. We don't understand what is happening. TRANSLATION: We want to

thank the military council for protected the revolution, now it

needs to hand over to a civilian transitional council, to protect

the Egyptian people. But tending the wounded has had to take

precedence over politics this weekend. It has been chaos in the

makeshift hospital behind the sqare. It is an appalling atmosphere in

which to be planning, in just one week's time, the first round of

what are meant to be Egypt's freeist elections in years. The

elections with a bewildering array of candidates that should start the

transition to democratic country. On Friday, Tahrir Square filled to

its very edges with demonstrators angry at constitutional amendments

proposed by the army, that could allow it to override the decisions

of an elected civilian Government. Marshall Tantawi, the head of the

army, who has effectively ruled Egypt since Hosni Mubarak was Joan

thrown is the man they want out, now -- overthrown, is the man they

want out now. TRANSLATION: The army don't want to hand over their power

now, it is going on and on. wasn't meant to be like this, ten

months on, still shouting against a system they thought they had

overthrown. Tahrir Square became an icon of unity and hope, all around

the world. But its power has proved to be elusive. Predominating at the

rally, men with baerdz. Islamists aren't the only force -- beards,

Islamists aren't the only force that want the army gone, but they

have the most to lose if democracy is restricted, they know they will

do best in the elections. In this poor district of southern Cairo,

the Muslim Brothers have been campaigning hard. Although they are

well known for their social work, they have a massive lead on those

who tweeted and blogged the revolution into action. These are

the candidates of the new revolutionary parties can't dream

of this, the kind of relationships that come not from the revolution,

but years of working in local communities. It appeared earlier

this year that the Brotherhood and the army might form a tactical

alliance against the liberals. No more, Islamists and liberals are

united in wanting the old regime dismantled, root and branch, that

means excluding civilian servants of the dictatorship, former members

of the President's deposed party. We speak about the people who

corrupted the political life of Egypt for 30 years. Some call them

the tailors of laws. They tailor the law to fit with the

requirements of the regime. Those people are well known. Those people

should be displaced away from our way to democracy. They should be

removed. They should be removed. And here they are. Those remnants

of the old regime. Portrayed as weeping skulls. They are trying to

avoid being caught, in this internet game, devised by another

candidate in the election, the independent liberal, Ahmed Naguib.

We are reaching out to young people, we know how to get them intrigued

and deliver a concept through our very simple game. We really need to

be on our guard and our watch for those Mubarak cronies and thugs all

the time. Those are the ones who want to bring the nation down. For

this dream not to be delivered. This evening, thousands more have

congregated on Tahrir Square. After the army appeared to make a

concession on those remnants of the dictatorship. It issued a decree to

bar those who worked to corrupt political life from further

political activity. But that wasn't the ban on former ruler party

members standing in the elections that most protestors here want. The

revolutionary, Ahmed Naguib, taking a break from the sit-in, Downing

Street, after the latest violence, that the army is committed to

democracy of any kind. This is happening because the military

wants to hang on to power. If there is a democratically elected

parliament it will represent the people, while the military council

is not elected by anyone, and has absolutely no legitimacy, when

there is a democratically elected Government. The army has told the

nation the parliamentary elections will take place as planned. But at

least 22 have died in violence since Saturday. Some way more. And

as in January and February, people's demands are rising with

the death toll. Many now say the military should relinquish power

immediately. On Tahrir Square, they have learned this year, that any

concession must be wrested from an obs nant state by massive popular

pressure. That is why so many are staying on the sqare tonight. We

are ajoined from Cairo by the humam rights activist, who has come from

Tahrir Square. What is happening in the sqare this evening. What's

happening this evening? Husbands of thousands are on Tahrir Square now.

It is only natural that after three days -- hundreds of thousands are

on Tahrir Square now. It is only natural after three days of killing

and maiming young Egyptians that Egyptians take to the streets again.

What do you want to happen next? Frankly speaking, I can't think

ahead, because over the past three days I have spent most of my time

in morgues, hospitals and ambulances. I have seen so many

casualties, so many violations. I am there to monitor the situation,

but I'm also involved in all the bloodshed. I was at the field

hospital, a makeshift hospital on the sqare last night at around

5.00pm, actually, when the army stormed the sqare, and stormed the

hospital. Army troops came into the hospital harassed the female

doctors, sexually harassed the female doctors, and then started

very violent confrontations with the doctors there, trying to take

out the injured. The doctors stood up and told them you can't take the

injured. There is no way we're going to allow you to do that. As

they storm out they throw in teargas cannisters. This started as

a confrontation between the police and the people, and the army comes

to the rescue of the police, that is in serious need of much reform.

Since January we have been saying that for the past nine months. The

police force has to be reformed. But the army intervenes to support

the police, that has been killing people, and they kill more people.

In my direct circle, amongst my friends, three young men lost their

eyesight. A dentist, an IT specialist, and a journalist. They

were shot in the face. Rubber bullets are not for shooting young

people in their faces. These are outrageous crimes. This is what I'm

concerned about. What happens next? I honestly hope...I Will come to

you in skaebgd on that question -- a second on that question. As the

world watches this, we can't get involved can we? We have to be very

careful. There is a role for signalling to the military very

clearly that the UK, the US, others, are absolutely dead set on seeing

the full transition to democracy. But we have to leave it to those in

Tahrir Square to take the lead on it. There is such a sense of

conspiracy and nationalism, very understandably in recent months in

Egypt, I don't think anyone wants outsiders telling Egyptian what is

to do at this point. Do you think elections can take place under

these circumstances? I doubt they will take place. I mean the

violence that has erupted over the past three days would prevent

elections from happening. The activists on the sqare, the young

revolutionaries on the sqare, the people who started the whole

process back in January aren't interested in elections right now.

A police force in need of reform, a stepping down of Armed Forces and

handing over the Government to a civilian Government. This is what

the people want. This is not about elections. I mean, how could we

possibly have elections during such violence. There is violence in at

least five different Governments of Egypt. If the elections were to be

postponed, they have already been extended in a most extraordinary

fashion, but if the elections don't take place, where does that leave

everybody? I think you have got to get back to a legitimate situation

where people accept that elections, or whatever the vehicle for

carrying the thing forward is legitimate and representative. We

have seen it happen in Tunisia, it is possible to do this, it has

having well carried out elections, producing a majority Government

with popular support. It really is the fact that power continued to

rest in the hands of a military who are commercially very self-

interested in Egypt, have had a long-time status that they were

reluctant to give up. That all has to be challenged. Sadly, things

ended in Tahrir Square, the first time round, before that had

happened. Do you think you were niave in believing that the

military would give up power? were niave when we cheered the

military when they came to Tahrir Square back in January and February.

Now it is not about beg niave. It is about the people and what they -

- about being niave, it is about the people and what they want and

what they have accepted, after recent events. This is not the

first such attack from the military on civilians. Last month they were

responsible for massacre. Yesterday, for the second time, they are

killing civilians. Most political forces in Egypt will not accept a

continuation of military rule. There has to be a handover.

Sooner or collateral. The longer it drags on the more violent it will

become, that is my personal opinion. It is quite possible that the

victors at the end of this will be the Muslim Brotherhood, the

Islamists in general. Is that an outcome that? We have seen in

Tunisia, the Muslim Brotherhood do very well. But a Muslim Brotherhood

committed to democracy, committed to a genuine pluralistic Tunisia

going forward. I think the longer it goes, the more radical the

outcome. There is no doubt about that. I think it is critically

important that everybody outside Egypt, who wishes Egypt well, is

very clear that the democratic will of the country must be respected.

That's the outcome we must arrive at. Thank you both very much indeed.

Need the money to buy a house? Come to the bank of Dave and Nick,

otherwise known as the ticks pair. Under plans announced -- known as

the taxpayer. Under plans announced today spending on house building

will stimulate the economy generally. A week tomorrow the

Chancellor will tell us how bad things really are in that seasonal

lament, the autumn statement! It used to be that the bricks

virtually flew up, houses sold before the roof was on, happenyo

days for the builders and happy -- happy days for the builders and the

first time buyers able to live the dream on nothing down. Oh how times

have changed. It is back to 20s for the level of peacetime house

building, back to the 1970s for the first time buyers. And one of the

few areas experiencing a housing boom is the local authority waiting

list. You can always spot a politician on a building site, they

are the ones who want to do without the high-vis jacket and the hard

hat. The policy they want to be high-visibility, and insist it

couldn't be more hard headed. The only visible policy difference on

view today between the coalition partners was whether to tuck or not

to tuck. There are so many people in overcrowded homes and on housing

waiting lists, we want to get Britain building. Why housing

building has been so low is because of the credit crunch, the banks

don't want to lend and the builders can't build and the housing market

is stuck, and we are determined to unstick the market to get the

market moving. What we are doing today is a whole set of things to

kick start the housing market. we got today was a lot of neatly

named funds, for a start there is �400 million for the Get Britain

Building, that is designed to get finance to builders to finish off

stalled projects. There is �30 million for the custom homes

problem, that is to help self- builders get finance. There is �500

million for the Growing Places Fund, to improve infrastructure like

roads to unlock the development of particular areas. Then there is the

accelerator release of public sector land, �100 million to bring

back empty prorpbts into use. And most controversially, a mortgage

indemnity scheme. What this means is the Government will underwrite

first time buyer mortgages for new build properties. Meaning the

buyers won't need to come up with anything like as big a deposit. As

you can imagine the house builders rather like the plan. Not least

since it was their idea. If the lenders won't lend. Meaning the

buyers can't afford to pay the prices, there is a solution in

market. It may not be one you or your members particularly relish,

it is that the price of those properties has to come down?

don't think that will solve the problem, it is the deposit gap.

Let's take extreme example, let's sae say the average house price is

�200,000 and there is a 25% deposit, the vast majority of people can't

afford �50,000, they can't afford �25,000 even if the price halves.

All the element of the initiative provides support for house builders

rar than buyers. The market at the moment looks -- rather than buyers.

The market looks like it will faurblgs you have zero interest

rates, at some point they will go up, the earnings to house price

ratio is out of whack. This is not a good time for a first time buyer

to step into the market. That time will come. The best thing a first

time buyer can do at the moment is not to be a first time buyer but to

be a renter and wait. If you were mildly cynical you might say it has

nothing to do with the first time buyer and everything to do with the

cashflow problems for builders. Government involvement in the

housing market doesn't have the best record, the US Government

sponsored funds Frannie Mae and Freddie Mac went bust, US tax-

payers still don't know how big the bill there will be. In this country,

even the governor of the Bank of England, has previously warned

against Government underwriting mortgage loans. Why should the tags

pair take on the risk of borrowing from individual borrowers, some of

who are risky, it is the lenders who should take the risk, and

assess the risk on lending. We saw in 2007 not enough attention was

paid to monitor the risk of the lending. We don't want to tell

lenders that it doesn't matter if they monitor the riskiness, the

Government will guarantee it. problem we have now has to be

addressed. There are deep-seated difficulty, of that there is no

doubt. But the Government's mismanagement of the economy, and

housing policies, have made the situation far, far worse. The

Government inherited from Labour, a growing economy, and on housing,

there were two million homes built under Labour, half a million of

them were affordable. Having dewe willied, the PM and his

deputy med -- met some happy buyers. It is hoped these measures would

get the housing market moving and stimulate much-needed growth. There

is so much uncertainty around what sort of housing market or what sort

of economy we will have when the next generation is looking to put

down roots. That is anybody's guess. Do you recognise this, high levels

of public and private debt are proving a drag on growth,

undermining the case for adding to the national burden of debt with

even more borrowing. You know who that was, of course, that was the

Prime Minister today, your leader. Why do you propose to increase the

burden of debt? No-one is saying people shouldn't take on mortgages

to get a home. You and I presumably have one. It is thought we have far

too much private debt as well as public debt? You and I presumably

have had mortgages, I still have one. We have the ability to get on

to the housing ladder, this current generation is completely locked out

of the housing market. You are in favour of increasing private debt?

Nobody is saying nobody should not take on mortgage, the Prime

Minister was not saying that, clearly. Do you think house prices

are too high? I think house price stability is the key. Do I think it

is too expensive, definitely. would like housing to become

cheaper? I think the house price stability would make housing more

affordable, it should be. If you go back only 10-15 years, houses would

have been three times the salary, now they are seven or eight times

the salary, that is a problem. do think the house of pricing is

too high? I have been clear is not you need for it to do is to

collapse back to three times in quick order, what you need is, you

need to have a stable housing market, which could still go up in

price with inflation, but not as much as average earnings over a

long period of time. That would be rational housing market, where

people can afford to get on the housing ladder. If house prices

drop to the point where they are more affordable and bear a better

relationship to income, as used to be. People will find themselves

overextended, won't they? I don't think the two things are

incompatible. The fact that people in this generation have been unable

to get in the housing market. The figure of 37 years old is often

quoted. 37 years old being the age which? You can get a home, if you

don't have the support of the bank of mum and dad. As the Housing

Minister and as a Government, we have spoonsability to today's

generation, whilst laifg a long- term and -- responsibility to

today's generation whilst having a long-term plan. You have a

responsibility to get people into debt? Any mortgage is getting

people into debt. You want to help them? I think it is perfectly

reasonable if somebody is a good bet for a mortgage for them to be

able to access that mortgage at a reasonable rate. Particularly given

we have record low rates. You don't agree with Mervyn King do you?

said that in 2008, right at the beginning of all of this. You know

he has changed his mind since then? I don't think he would have thought

that in 2011 we would be living in a world with very little growth.

Not just here but worldwide, and actually, you know, nothing much

happening in the housing market. I don't think it is right to walk

away, I don't think it is right to ignore the potential for economic

growth that building more homes brings. You think he has changed

his mind? I think times have moved on. He said unambiguously it is no

business of Government to get involved in this sort of lending?

Let me put it to to you another way. If the Government were only

proposing this measure in the housing strategy today, and we were

going to have indemties for mortgages, I think there are

another 136 measures, many dealing with the supply side, building more

homes. If you can build more homes, as well as providing the confidence

to get mortgages that people can afford. You put yourself in a

better position, which by the way, create jobs and provide a better

economy. The target was 120,000 homes last year, what do you want

to go to? Any reasonable estimate says we need to be building

probably twice as many homes in this country, north to satisfy the

demand out there. You think you will be able to get it up to the

200,000 there? As outlined there, there is an awful lot in there. For

the first time ever we marry together the principle that it

can't just be about building more homes, the builders aren't building,

lenders aren't lending and buyers can't buy because there is a bigger

problem than just inability to put houses up right now. You have

decided to go for plan B? No, this is plan for growth. Which is what

we have always said we wanted to do. It is a good run up to the autumn

spending statement. You always wanted to spend public money?

are parts to spend public money, not outside the spending envelope

we have set out and we know about for the parliament. This is all

within that spending. There is another element here, that is to

provide confidence to the market place. This is this mortgage

indemnity scheme, it is not about spending vast sums of money, it is

about guarnteeing, because Government can, as a backstop for

mortgages. One final point, do you think you might have done more to

address the perceived housing shortage, had you not cut the

budget for social housing in the way you have? Just to be clear, we

are going to end up building more affordable house anything this next

four years. Social housing? Social and affording -- affordable houses,

subsidised rental housing, we will build more of that. A lot less than

you were planning to under the old plans? No, we have introduced

affordable rent, we are building more homes by subs sizing it

through a different way -- subsidising it in a different way.

We will build a lot more affordable housing, I think it is a good thing.

I think the whole principle of a housing strategy is to make sure we

are doing everything possible, not just one thing, not just affordable

homes, but homes for people at every level of society.

With us now is John Cridland, director-general of the CBI, the

former Labour Treasury minister, Kitty Ussher is also here, and the

editor of City AM Allister Heath. Do you think it is a good idea,

Allister Heath? No I don't. There is a very good reason why banks

aren't lending up to 125% as they did at the height of the madness,

they know they can't do that. If you do that run into trouble. There

is two things happening here. The economy is grinding to a halt. A

lot of people are starting to lose their jobs. That means some people

won't beable to afford their -- won't be able to afford their

mortgages. House prices are falling f homes are repossessed, banks

could lose money, that is why they are not lending. It is an

irresponsible use of public money? It is a dangerous use of public

money. I agree house building needs to be boosted, not enough homes are

built in the UK. I don't think the Government and the taxpayer should

underpin mortgages. Public money for private enterprise, good news

for you? I'm not looking for public money. I'm looking for Government

to use its power in the market to ginger up that market, and make it

more effective. The difference here is the judgment as to whether we're

in the 2008 position, where King was rightly concerned about wide

scale default, or whether we are at an actual all time low in house

building and buying, where there are people out there able to buy

houses but we need to get the house market moving. This is targeting

intervention, one the CBI has been calling for, I don't think it will

cost the Government much money. think that King has changed his

mind? I'm not saying that, but the CBI is clear that the priority is

growth. If we are going to get growth we have to be bold with some

policies. It is not plan B, it is plan A with a plus on the end,

which says let's get the housing market moving, without spending

money that the Government dose doesn't have. Kitty Ussher, this is

the sort of thing you believe in, this sort of initiative? I don't

believe it is a good idea to encourage people in the early

stages of their career to take on huge amount of debt. Spending

public money, it is good for you? It is going to boost aggregate

demand, but there are far more effective, and dare I say it,

intelligent ways of doing it. Just on the Mervyn King point, if he did

agree with the Government, he's now shortly going to be in charge of

the Financial Policy Committee that regulates the financial centre of

London, so he will certainly be able to allow the banks to do it

themselves it's not. One must presume he doesn't agree with this.

We need �200 billion of investment to green our infrastructure. The

Government through regulation. do what? Green our infrastructure.

What's that? Green energy suppliers, this is the Government's own

figures. And they can use regulatory policy that doesn't cost

them anything to get the private sector to invest in that. That

would boost the economy far more than �400 million here. When you

look at this, and the talk of credit easing, this is making money

available n this case to business, which we will presumably hear more

about next week in the statement. There is a change going on, isn't

there? There is a change, but I don't think it is an abandonment of

a deficit reduction strategy, the CBI wouldn't support that, and I

don't think it is the Government spending money it hasn't got. I

think whether it is energy, whether it is roads, whether it is rail,

whether it is housing, whether it is digital broadband, Government

can do things that will get the private sector to invest that

doesn't mean Governments abandon its strategy. There is lots of

money on private sector balance sheets. House builders are amongst

them, that can be put to the public good, if the planning permissions

are there, and the market regulation is there. If Government

does what it has done in this case with the indemnity scheme, bringing

people together looking for a new commercial solution and using the

role of Government to find that solution. That must be the right

thing to do. What I see instead, I see the Government starting to

provide credit and intervening more and more and more, I see the

Government continuing to privatise gains by socialised losses. If you

buy a house and your house price goes up you make money, if you it

goes down and the Government picks up the bill, people who can't

afford their houses pick up the bill. I don't like I'm seeing, I

thought it was about market reform and getting people out of this

stuff. I see neo-Brownite policy, constant interference, meddling.

think that will sound very odd. woke him up to join in? I didn't

know I wasn't supposed to join in. Your office said you wouldn't?

had no idea I wasn't supposed to be. Why do we need 106 policies and

meddling, why not just liberalise it. It sounds like the sort of

thing a at this tank, an intelligent person like you might

come out with. Let's talk about the people who are 30, 35, 40, older

and would like a foot on the housing ladder. I don't think it is

right just to turn around and abandon those people. Government

doesn't have to be a bystander, Government is actually backing a

scheme which the industry themselves have come up with here.

This is not our scheme it is their skeerpblgswae can put our weight

behind it. By the way, -- scheme, we can put our weight behind it. By

the way it is good lending or bad lending, it doesn't change the

decisions the lenders have to make. What your policy is doing, it is

saying to someone who can get an 80% mortgage that they can get a

95% mortgage. It seems an 80% mortgage is more sensible than a

95%. If the house price falls down a bit, the taxpayer picks up the

bill. If the argument is we don't want to go back to the bad old days

of 125% mortgages, I entirely agree. Nobody thinks this is about to

happen in the next couple of years. We will review the scheme after two

years to see how it is going. The world has moved on a great deal.

But house prices are falling, a lot of people think house prices could

fall 15-20%, if they do that your scheme will have to kick in, and

the taxpayer will have to pick up the bill. It is dangerous time to

start on that. This is not just about first time buyers, we are

keen to help them, anyone buying a new home or a flat would qualify.

Anyone buying a new build. This is new build. That is another issue

with the policy, suddenly the demand for existing houses could

collapse. You are distorting the market and saying people have to

buy that? We know house building is a very important part of domestic

gross product, we know it ememploys people, two people for every single

house that is built. We know that the Government can have an active

role in saising, we're not prepared to standby -- in assisting, we are

not prepared to standby, we want to sais. We think 100,000 people can

benefit from it. People watching who aren't in the fortunate

position of those around the table of having a home, is thinking,

rather than saving �40,000 deposit, I can save �10,000. As long as I'm

a secure bet for the lender I can get on the housing ladder. They are

great intentions, we have learned that great intentions in housing

policy don't work. If it is �10,000, why not cover the whole thing.

Cridland you would probably like to tell the minister how wonderful he

is I would say a thousand business leaders met at the CBI conference

today. When the Prime Minister announced it, there was strong

support in the hall. If we're serious about growth, and these are

extraordinary times, and over the winter, because of the eurozone

crisis growth will get close to stalling in this country. If we're

serious about growth it has to be the absolute priority. We know if

we get the construction industry moving, lots of people will start

spending. It is not irresponsible spending. This is not plan B, it is

not spending any more money than the Government intended to spend

before. These are imaginative solutions that get way from the

idea that there is no hope for the public, or that the only way to do

it is to spend money we don't have. It has taken the year-and-a-half

for the Government to wake up to the need? We have been in

discussions with the Government on all these various forms of

infrastructure for the last six months for novel ways to get growth

going. Earlier in the year, growth was going to be higher before the

eurozone crisis kicked in, the Government didn't need to do as

much as it does to keep the economy going, none of this is about

reducing the deficit more slowly, none of this is about printing

money. It is about Anne tell gent use of the public -- an intelligent

use of the public sector money and the private sector in tandem. It

has the support of British business. It is free money and underwriting

the risk of business, of course it has rating. It is a step to take

hold of the deficit. You stalled growth in this country by a

collapse in consumer confidence, and you are telling people they

should go. We have half per cent interest rates. Now the great

European project, the dream of statesmen across the continent is

as safe tonight as last week, and endangered as it was last week,

after Spain yesterday chose a new Government. It thus became the

fifth member of the euro to dump a leader to save its status. In the

troubled times when politics and economics seem to collide, it is

time to reach for a European, 79- year-old author, Umberto Eco, his

novel the Roses, it sold millions of copies around the world, and --

The Name of the Rose, sold millions maid into a film. He has strong

views about his country's place in Europe. He was an outspoken critic

of Silvio Berlusconi's Government. His new book, the Prague Cemetery,

describes a world of plots, fear and paranoia and the rise of anti-

semitism. Eco, you're the well spring of this book -- Umberto Eco,

the wellspring of this book is anti-semitism, bigotry and forgery.

That climate of suspicion in Europe, do you think it is as great now as

it was? If you are thinking of universal plot paranoia, they are

two different aspects, I would say that racism has lost the violent

forms it had before the Second World War. When you look at Europe

itself, it is only going in one direction, isn't it, what is the

ultimate destination of the European project, do you think?

believe strongly that there is a European identity. Maybe, when you

are in Italy or I'm here, we're don't feel it so strongly, but we

both are in New York, immediately with this thing we have something

in common with respect to Americans. Now the problem with it is linked

not to or ideolgical reasons but economical reasons. I'm not sure

how much the euro can survive. I'm not confident. Do you see at the

end of this process of European co- existence and then co-operation,

and then development of economic European and so on, do you see a

single state at the end of it? Because I think that the nation

states, England, France, were a product of the Middle Ages, more or

less. Today they are less important than before, because it is more

important the ju, milag e -- jumilag e between a city in the

north with Spain with the common interest and connection. I see

rather a sort of archepelg io of situations, not a unique state.

you think the single currency, the euro, which we are now told can

only survive if there is fiscal June, monetary policy European

between the member gates. Do you think that was a mistake? -- member

states. Do you think that was a mistake? This is a precise

economical question. It is not just economical? For me it is not a

mistake. I feel very comfortable, it doesn't mean anything in this

one. You say it is an economical question, it is a political

question? It is an economical and political economy. I'm not in the

position of saying if that was really a mistake, or if it has a

future. What's very interesting for those of us in this country, of

course, is that your country, now has a Government, the cabinet of

which, includes not one democratically elected figure. That

has made necessary because of the euro. It has political consequences.

We find it in this country unimaginable where we have a

Government that is not elected? Kissing er elected by the people, a

lot of Governments were not elected by the people. It is presidential

appointments, it is a different system of Government. We are in

exceptional circumstances. I'm glad you don't have Silvio Berlusconi in

your country, if not you would be obliged to find the same solution!

How could your country put up with Berlusconi? How could Italy put up

with Berlusconi, how could you tolerate Berlusconi? Berlusconi was

a genius in communication. Even his blunders were calculated to reach

his tart, his targets were middleaged people, ladies and

gentlemen, who watched television. And they are enough to make up a

majority. Why does Italy put up with this succession of Governments

of varying degrees of competence, or embarrassment? Italians don't

have a strong sense of the state. That is absolutely true. Would you

join a Government of technocrats if you were invited? That is not my

job. I'm saying if you were invited would you join it? If I were an

expert and I were invited by Mr Monti, probably yes, in order to

serve my country in a democratic way. Since I have the guarantee of

the President of the Republic. Akiko keek thank you.

That is quite -- Umberto Eco, thank you.

That is quite enough for us, you might think so. Before we go, the

death was announced today of Sheila Delaney who, before 20, had written

the gritty drama A Taste of Honey. You are just feeling a bit

depressed, you will be your usual self once you get used to the idea.

What is my usual self, my usual self is a very unusual self, I'm an

extraordinary people, there is only one of me like there is only one of

you. We are unrivaled. We're bloody you. We are unrivaled. We're bloody

marvellous! A murky night, fog forming across

the south-east causing problems in the morning. Patchy rain in the

Midlands, not reaching East Anglia and the south-east. Hopefully the

fog will lift to some extent. To the rear of the weather front

things brightening up. Western parts of Wales will see sun before

it sefplts further east towards the English border probably staying

cloudy. Up across Northern Ireland set to be a lovely day, a chilly

start, with a lot of sunshine throughout the day. A change from

The sunshine not lasting long in the north. Cloudy, windy and at

times wet weather across parts of Scotland and Northern Ireland in

particular. Further south the rain should clear away, and Wednesday

after a potentially frosty start it looks like a bright and crisp