28/11/2011 Newsnight

Remember when they told us a growing economy would lift us out

of trouble? Of course it would, but tomorrow we're expected to learn

that is definitely not what we have got. Instead we have lots of

predictions of, if not tomorrow, one of these days.

As the Chancellor prepares his autumn offensive, Paul Mason, the

man who takes the con out of economics, goes to find out why the

infamous engine of growth has stalled. What we are looking at is

a completely new problem, that is, how do you come back from a

situation where you have been going quite fast down the wrong road for

35 years. What ought the chancellor

Chancellor of the Exchequer to be doing.

Also tonight, we talk to the most powerful soldier in the world about

Afghanistan, Iran and whether the US military he commands can defeat

the Taliban. They will never be destroyed, that is another dock

trainal term that means they go away, the Taliban are part of the

fabric of that part of the world, and they have have to be dealt with.

In Egypt they are sealing the ballot boxes after their first free

elections, at least that is what they hope they are. What is the

reality? TRANSLATION: They say no matter we vote or not, the

parliament won't form the Government or control it, what use

is voting? Once upon a time, 1947, to be

precise, the Chancellor of the Exchequer resigned his post because

he told a journalist what was going ob in his budget. Politicians still,

quaintly, expect us to believe that statements about the national

economy are disclosed first, to parliament. It is complete rubbish.

Over the past few days there has been a steady stream of leaks of

things that will be announced in tomorrow's Autumn Statement. To

show how hard the Government is trying to save us all from penuiry.

Could it be that tomorrow the Chancellor will have to tell us

bleakly that the propbs pects are extremely grim. -- prospect are

extremely grim, even David Grossman, a mankind to animals has his doubts.

Not everyone can pull off this look, the Chancellor thinks it can send a

message, a message so simple even a four-year-old can understand.

Time to get busy # To get building and fixing

Nice and happy, that's great. Osbourne is so keen to be

photographed near holes in the ground recently, because he wants

to show the Government is not just about cutting but building.

Investing in Britain's economic future is the priority for this

Government. We are finding the resources in difficult times, to

build the roads and railways, here we are talking about an extension

of the tube line that could create 25,000 jobs on the site. We are

doing these things, because Britain has to get away from the quick-fix,

debt solutions, that got us into this mess. We have to weather the

current economic storm, but we have to lay the foundations for a

stronger economic future. Today the Chancellor was announcing a �30

billion infrastructure fund. �20 billion is supposed to come from,

as yet unnamed, private sources. �5 billion is Government money, but

won't be spent until after 2015, leaving �5 billion of Government

funding now. But it is to be paid for from savings elsewhere. We will

found out tomorrow whether the independent forecasters think any

of this will work. My fear is they will show growth down, unemployment

up, borrowing tens of billions higher, because George Osborne's

plan hasn't worked. He said cutting faster would be good for growth and

jobs, it has ended up in higher borrowing and failure. One reason

the Government may have been so keen to crack out so many growth

announcements, ahead of tomorrow's Autumn Statement. Last week it was

housing and youth jobs. Is because ministers know that if they held

everything back until tomorrow, well, it would probably all get

rather overshadowed by the updated forecasts coming from the office of

budget responsibility. Ministers are not expecting good news from

them. The OBR stom tomorrow, it is expected, will confirm what

everybody is expecting, is that George Osborne will not meet his

target by the end of the parliament for growth? David Cameron has said

it will be more difficult to deal with the problems this Government

inherited from Labour, because of the head winds we face from the

crisis of confidence in the eurozone. But I'm sure we will see

tomorrow the measures that are necessary to make sure we both bear

down on our debts, and ensure we have the investment in

infrastructure and future jobs, to make sure we can get out of the

hole we are in. There was a kind of dress rehearsal for bad news today,

in the shape of an updated OECD forecast. The headlines from this

are pretty sobering. Negative growth for the first two quarters

of next year. That is the technical definition of a recession, or in

this case, a double-dip recession. Growth next year says the OECD,

will be 0.5%, that is a huge downgrade from their previous

assessment of 1.8%. And, says the organisation, unemployment is

expected to hit 9.1% in the UK, by 2013. That means an extra 400,000

people will be out of work. Whilst Labour is understandably keen to

pin the blame on the Government. Nowhere, in fact, does the OECD say

it is Government policies that are at fault in the reduced growth

prospects. Actually it says being seen to be getting a grip of the

deficit has actually given Britain more room to cushion the slowdown.

In any case, it seems that because of poor growth, the coalition isn't

reducing the deficit as fast as it planned. The Government is going to

reduce the deficit, slower than actually you advocated, how can

that be the problem that is causing low growth? Because the Government

decided a year-and-a-half ago to cut very deeply public spending,

and to increase taxes. That is what has choked off growth over the last

year-and-a-half. In the last year the UK economy has grown by 0.5%,

lower than all the other countries in the G7, apart from Japan, we

know they have had a huge earthquake. The choices the

Government made over a year ago are what has resulted in borrowing

coming in higher than forecast. David Cameron was out doing his own

growth photo opportunity today, hoping, no doubt, for headlines

about being on the right track, or something like that. Tomorrow's

assessment by the Office for Budget Responsibility is likely, though,

to be problematic. What the Prime Minister is trying to do is to

convince people that given where he started from, no other set of

policies would have delivered a better result. Our economics editor,

Paul Mason, is here in the studio. Put this in context for us will

you? Tomorrow comes amid a shrew of really bad economic news. That OECD

prediction for the UK, of another recession, a second recession,

might be one of the worst predictions or the most pessimistic,

it is probably because they have had longer time and more data, they

have had a chance to see what is happening in the eurozone.

Mervyn King said there are signs in the eurozone. The rest of the

markets have been talking two weeks. It is there, anecdotally the end of

the mortgage market, you see mortgages pulled, cross-border

mortages and deals all times coming in 2007 that were the trigger in

2007 and the trigger for a big crunch. The Government and tomorrow

was all supposed to be about the long-term strategy, and now the

question is how long can you go on with the famous plan A, of course,

deficit reduction, about �111 billion, taken out of state pending,

was supposed to be bridgeed by loose monetary policy, until the

economy got there, to that he will dor rad dough of sustainable growth

based on manufacturing, the question now is will it ever get

there, and in what circumstances. And this is what the Chancellor has

to explain to people in parliament tomorrow. What exactly is the plan

if the eurozone goes belly up, and if continued, desire for parts of

the economy never makes it. With us is the former UK finance secretary,

Lord Myners, and the deputy chairman of the Conservative Party,

Michael Fallon. These initiatives that have been just leaking out

over the last few days, why is it taking 18 months to get around to

them? They haven't just been leaking out. Things like credit

easing was announced at the last party conference. The spending

stuff today? On infrastructure? roads and railways and the like?

is because we have stuck to plan A that we are able now to accelerate

some infrastructure spending. Why has it taken 18 months to get

around to it? We have now discovered that some departments

are underspending, and we are able to bring that spending forward and

move it into infrastructure and get the economy growing again. You must

be chuffed, aren't you? shouldn't say no things-to-things

that could be good for stimulating the economy. But the economy as a

consequence of this Government's policy last been pushed back

towards recession, and that is -- has been pushed back towards

recession. The Conservatives have misunderstood it, they have it

round the wrong way. They are arguing the deficit is damaging

growth, at the moment it is the absence of growth that is inflating

the deficit. Hang on a moment. Lord Myners should hang his head in

shame, he's one of the Treasury ministers that left us this deficit,

that we are now having to tackle. The EOCD today said growth is

slower because of the problems in the eurozone, that Paul has

identified. Of course growth is much slower, but they also said

that the fiscal plan we have got has bolstered credibility and needs

to continue, despite the worsening outlook. The plan A is there, and

we are sticking to the plan. At the same time doing what we can to

accelerate growth and help families through this. Michael, the fact is

the economy in the 12 months of the final quarter of 2009 grew at 2.6%.

Since then it hasn't grown at all. Over the last 12 months only

Portugal, Greece and Cyprus, have achieved lower rates of growth than

the UK. The problems started well before the eurocrisis, and it is

the policies of your Government, which are creating this absence of

growth. This is rewriting history, from somebody who served in the

Treasury at the time. Those countries may well abide

differently, we had a worse deficit from these countries, which you

yourself left us. The eurozone crisis didn't start this year. The

crisis started in Greece well back at the beginning of 2010. In fact,

under the last Labour Government. This has been a very, very slow

build up in the eurozone. Is that their fault too? No, it is building

up for a year-and-a-half, you can't just say the eurozone is going

wrong on our watch. This has been building up for a couple of years

in the eurozone. We have had to inherit the consequences of it.

What you are going to hear tomorrow, we will try to accelerate growth,

spending on infrastructure, and help for motorists and rail

commuters. We're hearing �5 billion on infrastructure in the course of

this parliament? That is going to bring in �20 billion of private

investment as well through getting the pension funds involved for the

first time in this country, getting them investing. Have you guarantee

from the pension funds of the Chinese and others? No, the point

is to bring in the British pension fund, it has not been done before.

You have done that before? We have signed a guarantee with the pension

funds to get the money in there. Guaranteed is it? The �5 billion

will lock in another �20 billion on top. Guaranteed? It is an agreement

to do it. You know it is not a guarantee in terms of fixed

commitments because there are projects and pricing of projects,

toll agreements payment agreements, there is an agreement in principle

to look favourably, there isn't a guarantee. You don't think it is a

good thing? It is a good thing. Suppose it is �5 billion over the

rest of the parliament? It is �30, �5 now, and �5 in the next and �20

of private. We are spending much more, but it is �5 billion to start

with. Spread over four years? an accelerated spinding. --

Spending. How many people are going to go out. The Government cut

spending by �50 billion earlier this year. How many people will go

out and spend money on extra mince pies or whatever it is, because

they have heard the A14 will be widened? If you use the A14 as a

business, you certainly need it widened f you want that road to

Norwich dualed, you will be cheering at the news today. There

are agreements not just for roads, but rail, and more school building.

Why are you shaking your head? is improving our infrastructure,

isn't that important. Improving infrastructure is something we

agree about, we have been arguing in favour of for over 12 months. As

Jeremy said, it took you a long time to finally realise you need to

do something about it, and reverse the massive cuts that you announced

in the last budget. You reduced Government capital expenditure by

�50 billion. This �5 billion that you will spend over the remainder

of the parliament, is less than the cuts you have already introduced in

the current year. Which is similar to the cuts you would have had to

make? Jeremy, we have had lots of good news leaked over the last

three or four days, tomorrow we will get the hard news about how

grim the economic outlook is. Sounds if you are relishing it?

at all. Very much I am in despair the Government is doing nothing

about it. You think we are going to have a recession? Yes, the major

parts of the country is already in the recession. It is the south-east

that is buoyant. The remainder of the country has been in recession

for at least three months, probably six. You were already planning to

cut capital expenditure, that was in Alistair Darling's budget, but

the fact is we are spending over 50% of GDP, only the second time

since the war have we done that. You are in charge now That is why

we have to bring spending under control. It is only because it is

under control we are able to bring forward some good spending on the

infrastructure and to help motorists and rail users. Continue

this outside. Beneath everything else the rot undermining our

economy is all about our collective and individual habit of living on

tick. In turn, that is about the fact in the last several decades we

have allowed and encourage things we used to make here to be

manufactured abroad. David Cameron promised he would rebalance the

economy, so that more of our income came again from making things. So,

economics editor, how is he doing? We don't know. Hopefully the OBR

tomorrow, their projections will tell us. We know what their plan

was. The plan was in years time, that whole -- hole in growth, left

by reducing state spending, would be completely replaced by exports.

Britain has been a net importer for the last decade, really going into

exPortland. We would also be a much more heavily focused manufacturing

and business investment economy. The whole shape of the economy was

supposed to change. I have decided to go to the North West, which is

still our biggest manufacturing base and see what they are already

doing, what you could do, and what it would take to really change the

shape of that economy, so that ultimately you flip the UK towards

where the coalition wants it to be. The old drivers of growth are over.

The economy has to reBelfast. -- reBelfast.

Reindustrialised, boost growth, but it is easier said than done. The

north-east is the biggest manufacturing sector in England,

scattered with industries that have failed. But running through the

middle of it, a giant clue about how to kick start industrial growth.

The Bridgwater canal, built by an Earl, 250 years ago, when there was

nothing else here. When he built this canal, Bridgwater unleashed a

complex process of industrialisation. Here, where a

brook runs underneath it, he built an early cotton mill, I'm standing

on the ruins of it. Even in the 20th century it made sense to build

a newer, bigger factory where the skills and expertise already

existed. How would you do that now? What is

the equivalent of the canal today? What is the new cotton.

Fraf even if is a single layer -- graphene is a single layer of

graphite, it is more productive than copper, thermal properties

that exceed any other material we know about. At Manchester

University, they won a nobody bell prize for their work on graphene.

In this job the lab is doing is to commercialise it. The Government

has thrown �50 million of it. Following the noble prize interest

we got lots of interest through the press. It wasn't until the

Government made the announcement that we saucerous interest for

established companies to work for us. Companies then said this stuff

here, now we know the British Government likes it, we like it

too? It is a compelling case, and you know, having that message from

central Government was very persuasive in their mind for co--

locating here with us, and sharing the responsibility. So graphene

proves two things. One, Brits are still very good at geeky science,

two, picking winners, Government- backing for individual companies,

technologies and sectors is back. The problem is, everybody else in

the world is doing it. Graphene alone won't turn around the North

West's economy, or Britain's, any time soon.

The decline of manufacturing has left its mark. Here in the North

West, and in much of the country outside London, low paid jobs, low

GDP per head, fractured communities. Some think eventhough we want to

leave this old model behind, it is going to be hard.

Britain has a serious structural problem. The structural problems

put simply, is we have retreated from tradable goods and

manufacturing, and lost 4.5 million jobs. Good jobs in manufacturing.

And piled up a huge trade deficit that sucks demand out of the

economy. This school of economists, based

here at Manchester University, wants Government to move towards

highly-targeted support for individual economic sectors.

short answer is there isn't one technically correct quick-fix. I

think instead you have to think of the long, slow slog of building the

sectors, which have been run down in the last 30 years, and building

the networks and clusters of activity, instead of worshiping

generic enterprise and individual firms as successive Governments

have. This is what it looks like when it

works. Eden Biodesign, in Liverpool, started with �50,000 ten years ago,

now it is a multimillion pound business, with a work force of 125.

They research and make biomedicines, they have seen Government

initiatives come and go. Most recently Government funding for

their biotech cluster group has gone. Where there are good strong

clusters, it is focusing, and supporting and consistency of

funding rather than a slug of capital, a banner headline and then

a disapassion of that activity. Con-- dispassion of that activity.

Consistency is very important. that happened in the past? Clearly,

there was Government funding that enabled the cluster to grow in the

south west. The Koreans would throw huge amounts of money at it? Yes,

we don't. Eden represents another British problem, access to capital,

they were recently acquired by US drug giant, Watson, but the venture

capital to grow the firm also came from America. British investors at

the time, recoiled from the word "manufacturing". The longer you

talk to the bosses who could deliver the rebalancing the

Government wants, the more you realise nothing they want is rocket

science, they want more consistency, tax breaks to compete with other

countries, less short-termism. It seems to me, it is people, at

Manchester University they are trying to be a world centre of

advanced research, and applied science. But, brain power can go

anywhere in the world it wants to. And the problem in Britain is,

incredibly, given the unemployment rate, we are actually short of the

skills we need. We have actually got a massive skills shortage at

the moment. We are probably short of about 200 engineers across the

company, across the UK. Probably 100 of those in the North West.

Morris, on the banks of the machine -- Morson, they design nuclear

reactors and other things, they stress test them virtually, right

down to the individual screw. The company is successful and growing,

they want Government to do what other countries do, put tax-payers'

money into high-skilled training. We see a lot of graduates every day,

working in taxies, and shops, they have engineering degrees. And yet

we have skills shortages. We have several partners in Europe and

Germany, France and Spain. I see quite a different approach from

their Governments. In terms of supporting graduate raining, and

actual funding of training. So the Governments will pay to bridge that

gap between college and the work place? Yes. Whether it is on skills,

investment or research, rebalancing Britain all comes down to whether

the state can find a new role. It is worth rembering, this, the

first-ever piece of industrial infrastructure, was built, by act

of parliament, and never made a profit.

When it comes to reindustrialising Britain, a lot will depend on what

happens in the rest of the world. Because, when they built this,

Britain was the dominant power. We could do what we liked. By the time

they built the factory behind me, in the Edwardian period, it was

already a world of cut-throat competition between states. As this

crisis drags on, it is again. 200 years ago the canals of

Lancashire pointed British manufactured goods, like a guided

weapon into the world economy. Today, again, there is huge

investment going in, to the mercy and to the ship canal -- Mersey and

the ship canal. The canals date back to the Industrial Revolution,

we are taking the old assets and modernising them and making them

applicable to the modern economy. We are aim to go spend �500 million

over the next few years, creating a new river terminal in the river

Mersey, and creating mu -- new buildings down the canal banks.

Itly allow us to be more efficient into the northern half of the

country. It creates thousands of new jobs, that will kick start the

economy. But the fact remains, if things stay the way they are,

Liverpool's Newport facilities will see more imports an exports. The

true measure of success will be to reverse the flow of trade. That is

not just an idle dream. Virtually the whole of the Government's

growth and budget plans rest on reindustrialising Britain.

What to look for now is if anybody in politics has a practical clue of

how it will be achieved. Britain isn't, of course, the only

country to have a hole where it ought to have a budget. Pre-

eminently there is the world's one remaining superpower. The military,

which enables America to stride the world like a kollos SAS, faces huge

cuts in its budget, which, if extended, the US Defence Secretary

said could turn the country into a paper tiger. Could this be the

beginning of the end of an unprecedented global dominance. I

will be talking to the new chairman of the Joint Chiefs of Staff, the

most powerful military man in the world. First we have this. It is an

unenviable job, tackling wars, while a country takes an axe to its

military budget. Since September, General Martin Dempsey, has had the

top US forces job. A globe-trotting mission, thwarting enemies, and

trying not to let down friends. But his prese dessor, rather unhelpful

-- predecessor, rather unhelpfully said, America's budget deficit is

America's biggest threat, that hardly helps the new man protect

his money. Whether or not he was right, the problem with the

formation from the defence department's point of view, the

only thing the defence department can do to address that threat is to

cut its own budget. That happened and now General Dempsey is saying

we can't afford to cut it any further, without imposing other

national security problems on ourselves. We are now cutting into

bone, and muscle. We are having to make tough choices about America's

role in the world. The Pentagon spends $700 billion

per year, and is already facing $400 billion in cuts over the next

eight years. The federal budget crisis means the team sent to run

the military this summer is now being threatened with the same

again, or even more, prompting the Defence Secretary to raise the

specter of a hollow military. a ship without sailors, it is a

brigade without bullets, it is an air wing without enough trained

pilots. It is a paper tiger. press has started in August of

10...This New threat to the Pentagon arises because of the

gridlock in Congress over the budget deficit. Many Republicans

say the military must be sparred, and Democrats, that they must share

the pain. But the point is, that the consensus that funded President

Bush's wars has gone, and threats to defence spending are now part of

the negotiating process. We have a good chance of actually getting the

big package, the big definite reduction in 2012, for two or three

reasons. First, the knives that I mentioned that were over our heads,

the Bush tax cuts expire in 2013, sequestation goes into effect then.

As we get closer and closer the pressure on both parties to come

together in the middle, provided we don't remove one of those knives,

like taking defence off the table, is going to be stronger and

stronger. So, if the bugetry pressures are

intense, what about their consequences in the wider world. In

Iraq, the imminent final US withdrawal has been blamed, in part,

by some critics, on a desire to trade security for money. Meanwhile,

in Afghanistan and Pakistan, plans to accelerate the drawdown there

have increased tensions with local politicians, who were playing to

anti-American public opinion. When there is a mistake, on the

scale of Saturday's bombing of a Pakistani border post, killing 24

of their soldiers, the damage to US interests is even greater.

Not only I, the whole nation condemns it. Whatever has happened,

we don't and never expected it would happen. While Pakistan has

cut NATO supplies, and co-operation, before, and then quietly reversed

the decision, some in the Pentagon are coming to the conclusion that

they and President Karzai's gofpl, want to make America's --

Government, want to make America's exit as undignified as possible.

The US remains the world's most mill tearly powerful nation by a --

militarily powerful nation by a long way. It is thought that a

country like Iran might underestimate America's weakness or

unwillingness to intervene. Hallmark of the last 20 years the

US military capacity to inject a sizeable UK force anywhere in the

globe. If we implement the cuts being contemplated, that capacity

would be put in jeopardy. That has a profound effect on American grand

strategy. We wouldn't be able to afford the grand strategy that we

have had for the last two decades. The US remains the world's most

militarily powerful nation by a long Martin. The financial crash

and cuts provide dangers, that Iran might underestimate America's

weakness or unwillingness to intervene. The top serviceman took

time at a flux, the scale of cuts that will emerge from congressional

budget arrangements isn't clear. The salient thing is the post-9/11

consensus about funding the military is over, and America's

politicians are no longer in step. I spoke to General Martin Dempsey,

chairman of the Joint Chiefs of Staff, down at the Ministry of

Defence here in London, earlier this evening.

What has it been like to take over the military at a time when it is

in decline? I'm not in decline. We are not in decline. You know.

big was the army when you joined it? Yeah. It is a lot smaller now

than it was? You know the incline or decline is not a function of

size but capability. I would suggest to you that over the last

ten years we have learned a lot. We have adapted our formations. We

tend to faced a verse rees that don't mass against us but decentral

-- adversaries that don't mass against us but decentralise, we

have had to adapt. When it is said the security of your country is in

peril because of budget cuts, they are wrong? They are correct. But

they have also said the initial budget cut of $450 billion plus,

they have used the phrase "hard but managable", even before I became

chairman they said that. I agree with that characterisation.

Anything more will not be managable? It will be harder and

reach the point of becoming unmanagable. Could you fight two

wars simultaneously? We can, we will never be a military that can

only do one thing at a time. Despite the fact that your army

will be smaller than it has been since 1940, the Navy will be the

smallest it has been since 1914. You are reading the language of

sequestation. I'm reading the language of Leon Panetta? He's

using that language and finding the job over the next five years.

we talk about Pakistan, how long could the mission in Afghanistan

continue if the Pakistanies shut the supply routes through their

country? The Pakistani decision, made, first let me say, since you

brought up Pakistan. I really would like to explain that this is just a

tragedy for all of us. In particular a tragedy for the 4

Pakistani soldiers their families. My -- 24 Pakistani soldiers and

their families. My immediate reaction was to pick up the phone

for their phone, a man I have known for 24 years. This will make it

difficult, we will find a way to sustain our effort in Afghanistan,

even if the Pakistanis make the unfortunate decision of closing the

locks. This sort of action, in which you say, two dozen Pakistani

soldiers lost Tony Blair lives. Is that the consequence of ignorance

or ineptness? Well, I chuckle because that is a pretty stark

choice. It is, it is one or the other? I wouldn't say so. Ineptness

and incompetence. Irregular nor rapbs? You could see incompetence,

they would be synonymous. You have been to Afghanistan and walked the

hills. You know that although we have become extraordinary as a

military, as being precise and accomplishes, and get the outcome

we seek. This is still warfare, it breeds fog and friction and

complexity. I don't know what happened in the hills of the

province on the border between Afghanistan and Pakistan. We will

find out. Looking at the broader picture in Afghanistan, do you

think it was a tactical mistake to put 2014 as a finish date?

increased the risk. But there is a school of report that if you put a

timeline in place your enemies wait it out. My personal military

judgment is there have been times in my career where a milestone has

pulled me along. Done correctly, that is what we are trying to do,

is the milestone has that effect. It pulls us along, focuses our

energise and transition, and deliver the outcome we promised as

an alliance at Lisbon. The Taliban won't be defeated by 2014? I think

they can be defeated. Militarily the word "defeat" means you render

incapable the enemy of impoetsing itself. We would say over--

imposing itself. We would say overthrowing the Government of

Pakistan would be that. They will never be destroyed, which means

they will never go away. The Taliban are part of the fabric of

that part of the world and will have to be dealt with. They will

still be there in 2014? Sure, those that are he can consielable, could

be reconciled, those not, could be the enemies of the Afghan state,

they will be in support of the Afghans to do that. Can we ask

briefly about Iran, if Iran were to have deployable nuclear weapons,

how serious a matter would that be? We have said we wouldn't allow Iran

to be a nuclear power. If you were tasked to destroy nuclear

capability that Iran might possess or be on the brink of po tesing,

could you do that? I won't speak -- Possessing, could you do that?

won't speak about our capability. Our policy is economics and

diplomacy. We have conscious low stated we won't take military

options off the table either. Implicit in that is the belief you

could do it if you had to? As we are asked what options we can

provide to our authorities, we, of course, lay those out, both in

terms of their capability and the risk associated with them. I'm not

prepared to talk about that publicly.

General,thank you. A very large number of Egyptians

tund out today at the start of elections there. -- turned out

today at the start of elections there. It is a fiendishly

complicated system that would baffle voters in our system. They

turned out in lines a mile long. Amid the queues and hopefulness and

inked fingers, much remains unresolved, and much of whether the

military will ever give up power. Revolutions don't always move fast.

Today at this women-only polling station in south Cairo, as at

others across Egypt, they shuffled towards democracy. A two-hour wait

to vote here. Most found it thrilling. I feel so excited about

it, it is my first time to go for elections. For the first time we

have to choose someone who will represent our choice in the

parliaments, and I think that is very important. Before that we

didn't have any choice for anything. I'm shocked that we can do, and

think like that. I didn't expect it. Not in a thousand years.

I didn't expect to go an election in my lifetime. Some people say

these elections will make no difference? OK. It won't make any

difference. But it changed me. It changed me.

I can feel it, down deep in me. Me I am changed.

Last week these elections were overshadowed by the violence on

Tahrir Square. And worries about the continuing role of the army in

politics. But now the days Day has come, it is the sheer exhileration

of voting that counts most for many Egyptians, they Israel yois as the

future of their country is decide - - realise that as the future of

their country is decided there is plenty to play for. 150 candidates

in this multimember constituency to be elected according to a

bewilderingly complex system. It has been made deliberately complex,

by Egypt's ruling generals, who won't want voters to give a clear

answer, and intend, many believe, to stay in charge, despite this

year's revolution. TRANSLATION: It is great to have

elections. But they say no matter what weather we vote or not, the

parliament won't form the Government, or control it. The

Military Council said that. So what use is voting? We don't want a

parliament like in Mubarak's time. But hire, away from Tahrir Square,

the -- here, away from Tahrir Square, the military has its

defenders too? TRANSLATION: We need the army to control the situation,

who else can run Egypt but the army. If they can hand over power to the

civilian Government in a peaceful way, the army will go back to the

barracks. Even this stalwart of the square, standing as an independent

on the revolutionary credentials, is happy for the vote to go ahead.

While the army is still in power. Isn't that a bit of a climb-down?

We need to put pressure on the Military Council from parliament

and the electorate at the same time. We have to pursue all and every

option. Auk med has a problem, in a -- Ahmed has a problem, in a

country where a third of candidate's are illiterate, each

candidate has a symbol, a camera, a bank, but Ahmed's logo has been

messed up on the ballot paper. People think mine is a bus not a

microbus. It says "one of the people from Tahrir Square". Funnily

enough when I met him at the start of his campaign, he was also having

problems. Ernest revolutionaries like him are power on the square

but not the street. I had some of my banners here, you can see it was

taiched to the banners, it was ripped off. -- attached to the

banners, it was ripped off. I posted 20 seven metre banners

yesterday, only five remain. They were shredded by another contestant

or another competitor shreds them. But this time they have completely

disappeared, it is very strange. It didn't take 24 hours. The police

weren't very interested. Ahmed was already at a disadvantage. With not

much more than �10,000 to spend on his whole campaign.

This is another candidate with plenty of cash has been going down

the back constituency lanes. This is an oil tycoon that used to

belong to Mubarak's banned party. Consequently, his symbol is the

tank. To revolutionaries he's a dangerous remnant of the old regime.

He has done a lot to help poor people like these, even in

revolutionary times they can't live by principle alone. TRANSLATION: Be

I want someone who help us where they k I want someone to mend

things and provide food. I would vote for this.

TRANSLATION: There are no sewers in this area, eventhough we have been

living here for 14 years. A contractor came to put them in, he

took the money and left. Nobody does anything about it now.

Before I leave this constituency, I wanted to meet a young man called

Ali, whom I last saw in January. At the funeral of a friend of his.

Shot by police in the revolution. The dead of the 17-year-old and

main others helped bring Egypt to today's historic elections. What

did it bring his own family, or the struggling neighbourhood.

TRANSLATION: Since the revolution, nothing has changed. There has been

no compensation for the martyrs, we are hoping after the elections they

will do something about it. Everything is the same as before,

except for one thing, unemployment has got even worse.

These people want subjectings now citizens, -- once subjects now

citizens, know the first few months of the parliament they are electing

will be dominated with rouse over the constitutions, the army versus

civilians, civilians versus the secular.

It won't bring more daily bread, that is what most thought they were

That's all tonight. The death was announced today of the film

director, Ken Russell, the one-time enfrant terrible was 84. We folk --

enfant terrible, was 84, we spoke to Martin Scorsese today. Having

seen Women In Love and The Devils, and the production design is strong

stuff. He wasn't afraid of anything. He said what he had to say and did

it. But, what I really felt really should be seen again, particularly

in America, are the black and white films he made at the BBC.

Omnibus, Dealius? Yes and Sabalius and the other one on Isodora Duncan.

They were amazing and revelations. Who are we to disagree with Martin

Scorsese. I want you to write down a new opening to our our people, I

don't like that title, call it Song Of Summer. I want you to imagine we

are sitting on the cliffs in the heather looking out over the sea.

The sustained chord in the high strings suggests the clear sky and

the stillness and calmness of the scene. Now then, seven four in a

bar, four plus three, divided strings, chord of D major, A, D, F

sharp, the lowest note the A strings on the violass.

-- violas. Heavy rain and squally winds

driving across the country. Amber driving across the country. Amber

warning from the Met Office. It dries up in the morning, across

Northern Ireland. Wet weather sweeping into England and Wales, it

doesn't reach the eastern side of England until late in the day.

Heavy rain arriving on to the Pennines by 3.00pm. Largely dry.

Windy, the strongest winds with the rain. They will be heavy and

squally too. The winds dying down eventually across the south west of

England and Wales. As the more persistent rain clears it may turn

wintry in Snowdonia. A wet start in Northern Ireland, but clearing

later on in the morning, sunshine in the afternoon, but showers. It

doesn't half feel qolder and colder in Scotland as well -- colder and

colder in Scotland as well. It will be a very wet morning across

Scotland and Northern Ireland. We will see showers gathering here

again on Wednesday. Further south, the band of rain sweeping eastwards

during Tuesday, squally rain, heavy rain, potentially damaging and