20/03/2012 Newsnight

Yes, we will cut income tax for the richest people in Britain, but

don't look at that, look at what else we are doing, that seems to be

the Government line tonight on the eve of the budget. So how does the

country's most powerful heir to a Barnetcy make pleasing the rich

look like benefiting the poor. In tomorrow's budget the personal

tax threshold will be raised to over �9,000, and the rich will be

hit by higher stamp duty. With slow growth and massive

austerity ahead, can they do anything more than just tinger

around the edges. Somewhere near Blackpool is a

promise that by drilling down into Lancashire, we could dramatically

cut energy bills, is the technique of fracking for natural gas one

that we can really trust. We can assure people thatm so of the

concerns you have regarding oil and gas drilling will not happen on our

watch. # I won't let love

# Disrupt or interrupt me He's famed as one of the finest

rock by starrists, this being Newsnight, we asked Jack White who

he votes for. He refuse to vote for President, I don't believe in the

Electoral College, it is outdated from 200 years ago that doesn't

make sense for modern times. One thing we definitely can be

grateful for in tomorrow's budget, even if it does result in the

Chancellor sticking his hands further into our pockets, we shan't

have to listen to people telling us what he's going to say. Perhaps the

most fatuous piece of news today was a poll showing that half of

voters expect George Osborne to reward the rich. Well, perhaps he

will. But the person from whom you will learn most this evening is

Newsnight's political editor. You better deliver.

So what we know this evening is that they will be increasing the

personal tax allowance to �9,05, as said in the menu. This is important

because it is money back in people's pockets. We had David Laws

on the programme a month ago saying they want to go further and faster

on this, they wanted to go to �8,100, up to �8,700, now it is the

�9,200 figure. It is a tacit addition that people need money to

spend money now, and the economy needs people to spend money. It is

also the beginning of a shift we will see completed tomorrow, this

one from income to wealth. They will come forward with

announcements on a higher rate of stamp duty for those who have �2

million houses. It won't be a pure mansion tax, but a form of it. Yes,

they are also highly likely, in fact, definitely getting rid of the

50p rate. But again that fits the John Stuart Mill thing of, we have

made a film about this. Shifting from income to wealth, it is bit et

a big shift. -- quite a big shift.

It has been a very odd process? Sources point to Sweden where, in

the UK we have this emphasis on the one event, the Chancellor's

announcement, actually in other countries they do bits and bobs,

and lots of people get to announce things. They say it makes for a

better budget. I think as long as the coalition las we will have

budgets like this, -- coalitions lasts, we will have budgets like

this, and we won't have one of the old type for many years or never

again. What is busy today? The look at 50p and why they feel they can

scrap it. Tomorrow's events in the palace of

Westminster, will have a feeling of austerity. But today's state

occasion was far more convivial. 24 hours before one of the most

anticipated budgets, today's chatter will have been of tax cuts,

and not any old tax cut, the big one .Le These chaps probably earn

too little for it to affect them, so do these two. And most of these

distinguished crowd also. The centre piece of this year's budget

looks like it will affect people a bit nearer to the Monarch's league.

Which certainly means one former PM. Despite the almost unprecedented

pre-briefing, the Prime Minister himself, was rather quiet today.

REPORTER: Are you looking forward to the budget? Even the Prime

Minister's own advisers, who once upon time, hated the idea of

ditching the 50p rate, well, they are now on side with the

Chancellor's push. What they will do is a series of measures that

will show the rich will pay, more than under the 50p regime, so they

are going ahead with it. And once upon a time, we didn't think that

would be true. Scrapping the 50p rate of tax fares badly in opinion

poll, today's Guardian ICM poll showed 67% of voters wanted to the

rate. Even among Tory spers, numbers that want to people is 65%.

YouGov found similar figures. But 48% wanted tax reduced in a future

budget. The Government think the public will be won round showing

how little the tax has raised. predicted �2.6 billion, they

thought that prudent. In response to similar changes in the US you

are closer to �1 billion, the outturn may be lower than that.

Even if the economics take their of themselves, is the political

message of scrapping it a sensible one. I'm concerned about that, I'm

concerned because the 50p tax rate sends out an important message. The

message is, literally, we are all in this together, higher earners

have to pay their share. The only way to go down well, I believe,

with my constituents, is if two things take place. One the message

is clearly conveyed, that higher earners are taking their share. I

would use as an example of that, take ago I way child benefit from

the top 15% of earners. That is a difficult thing for tax-payers to

have to endure. The second thing is, we have to be absolutely

LCH.Clearnet, the reason to take away the 50p tax rate, is to

stimulate growth. If they are not clear about that, stories worried

that they will have taunts from the Labour Party that they are in

league with the superrich. Labour are not against the 50p rate

cut, so it gives breathing room for the Chancellor. People are worried

by high petrol and energy prices, they want action from the

Government to help middle and lower income families. All we hear from

Osborne is the budget will cut taxes for people earning above

�150,000. People will say, that's out-of-touch, we want a budget for

jobs and families which is fair, that is what we need from the

budget. So tomorrow the megawealthy look set to be introduced to a new

regime of tax breaks ended and allowances curtailed. The idea is

they pay as much tax under the new system as the old. Two weeks ago

Nick Clegg called that a tycoon tax, now people in this building are

reluctant to give it that name in the budget tomorrow. The Tories

feel they should get as much credit for this as the Lib Dems want to

get. Whoever is the true author of this fresh crackdown on the

superrich, Nick Clegg has some exacting members of his own party

to please. If the 50p rate of tax on the top

earners is going to go, then we need a policy which will be good

for the people at the bottom end of the scale. We want to see the

income tax threshold raised to �10,000. Nick Clegg set out his

stall on that, he made it clear that is what the Liberal Democrats

are asking for. That is what we have to get tomorrow.

The Chancellor has been studying how Conservatives cut taxes in the

80s, they did their tax cuts in the early periods, immediately after

elections, and plenty of time before the next. If he's going to

do it at all, he's got to do it now. All this happens amid the

encirleling gloom to which we have now become rather accustomed, there

was better news today, inflation has fallen, we are massively in

debt as a nation, the economy is hardly growing, and unemployment is

higher than for 17 years. He talks big, and never brings it on?

have seen the set of leaks going on over the last few days. This is

detail. The budget, I'm told, by sources, tonight, that it will be

fiscally neutral, the important thing there, is for the markets,

for the people who lend us the money, it means that the overall

plan to get the deficit down is not changing. What is changing is the

mix of tax and spending cuts. What they are doing here is they are

reducing the tax. It will be a net tax cutting budget, I'm told, they

will replace it with spending cuts. You will be stunned to know, ...For

Those who don't inhabit the dismal science, what does fiscally neutral

mean? It means they won't borrow more or less than they said they

would. The course of setting the deficit right is as it was. But you

will be stunned to know that nobody is briefing us as to what is to be

cut, to pay for this. The danger with relying on extra cuts, the

smart money is on more welfare cuts, actually. Is that you have still

got to do them. 5% of these cuts lie ahead, and what the market --

85% of these cuts lie ahead. What the markets are worried about, is

if they do most of that by cutting, how will they do it. Is this good

for persuading people they want to lend us money? It is a little worry

for them. Last week, I think it was FITCH, the ratings agencies, put

Britain on negative watch, worrying about getting pushed off the

deficit reduction target. You have seen today in parliament the end,

what looks like the end, a huge row between the parties over the NHS,

the NHS, in technical terms, isn't being cut. Yet it has caused 18

months of political pain. The cuts lie ahead, and for the last three

years of the cuts programme, we don't know what will be cut. The

NHS after the next election, tech clo and easily could be cut. The

politic -- technically could easily be put. The bend and ratings agency

guise worry about the scale of the cuts, and tomorrow if there is more

cuts, which we are not briefed about, as well as the people who

oppose cuts will be worried, the markets will not be particularly

ecstatic, I don't think. Thank you very much. Most of the

headlines are so far about what George Osborne may do to help or

Hurd the rich. The former City Minister, Lord Myners, who now

chairs Sevian Capital, and Kate Robertson, the marketing executive,

they are not short of a bob or two or an opinion or two. At a time

when the nation is short of cash, what is gained by cutting taxes for

the rich? The gain to the country is the signal to business worldwide,

that Britain is open for business. At the moment really, nothing else

is more important, no other signal is more important.

So you know loads of people who are not invest anything this country,

because the rate of tax is 5p higher than it will be apparently

after tomorrow? I certainly know some, I don't know if it is loads

proportionally, it is enough to be making a difference. It certainly

makes enough difference to my clients and to me in business.

at the deterred? We are deterred, it is not just that tax rate itself.

But by the fact that we are not showing confidence in the country

and the economy. The other thing that is said about

this tax is it doesn't bring in any money, which is rather at variance

of it deterring people, if it doesn't bring in any money it is

crazy to keep it? We haven't enough evidence yet, Jeremy. The

Chancellor said he was going to commission a review of the impact,

unfortunately he has done it through HMRC, rather than the

Office of Budget Responsibility. It is not really an independent review.

There is only one year of data. But there is a contradiction here, that

the rich are saying we don't have any incentive to work hard because

of the high rate of taxation, therefore it is not raising

additional tax. They are getting around it through clever tax

management. They can't have it both ways.

So you will pledge, you are not in a position to make a pledge, do you

think the Labour Party should pledge they will restore the 50p

rate if indeed it is reduced tomorrow? I think the Labour Party

will make their decisions on what they will put in their manifesto,

when we get to 2015. But you think it will do nothing to

distract from their claim of economic confidence to promise to

do so? It is not a priority to reduce the tax on the superrich.

There are far more pressing needs. Alistair Darling said when it was

mooted he thought it was a temporary measure? The fiscal

stance we take for the manifesto in 2015 will be determined at that

time, it will be foolish to anticipate it, James, I mean Jeremy,

sorry. That is twice, that's all right! What about the other thing,

that will will be an increase on stamp duetyo for more expensive

houses. Its not quite the Lib Dem mansion tax, but something along

those lines, will that deter people from coming to this country? That

is not the issue. The issue isn't whether it will deter them from

coming to this country. The real issue is businesses in this country

are sitting on piles and piles of cash, don't really have the

confidence to invest, therefore, we are not able to create jobs. As

soon as you are looking at an economy and saying businesses are

not confident and we are not sure where this is going, then you have

the situation we are in at the moment. We are only growing at

about 1%. We should be at about 3%. Is there anything that the

Chancellor could say tomorrow, which would be likely to change

that? I think a first sign at cutting tax, at cutting the top

rate is a start. It is a sign of confidence, Jeremy, it is nothing

else it is that. If you are saying is there anything else he could be

doing, absolutely. Paul raised the point about raising the �10,000

threshold, raising the 40p threshold, lowering corporation tax

to 20%, for me, all of those would stimulate business, they would

stimulate my businesses, all of my clients' businesses, it would be

brilliant. Don't you worry about how devisive it is going to be?

Even most Conservative voters are against reducing the top rate of

tax? It is devisive depending on the headline that, with the

greatest of respect, you yourself, and the media, put it on it. Is the

headline "tax cut for the rich" or "Britain open for business". How do

you want it to play? Growth will only come from business. Jobs will

come from business and not from the state sector. Forget about it, that

is not going to happen. How much room for manoeuvre do you think he

has tomorrow? Not a great deal. A broadly physicaly neutral stance is

probably right, but he's -- fis fiscally neutral stance is probably

right. We need a budget for the millions not the millionaires. We

need to get the economy growing and create employment. The nation will

say what are the priorities when you are cutting tax for the top 1%,

and yet you can't do anything to help those who are at the most risk

in the economy, the poor and those on low incomes. And that, I think,

is the issue of justice, that this budget, if it is correctly leaked,

doesn't appear to be able to address satisfactorily. Who knows

if it is correctly leaked, it may be spun. That is what politicians

and Governments generally. Do we will find out tomorrow.

There is no justice without jobs, Lord Myners, there have to be more

jobs. That is what I'm saying. First, second, third and last, when

you say setting the priorities, and it is justice, and looking after

the poorest. How? And with what? With what money? If there aren't,

if there isn't stimulus for business and more jobs, forget

about it, it cannot happen. We are not Russia or China, it won't work.

Last year, Kate, the Chancellor said he would put fuel in the tank

of economic recovery, it would be a march of the makers, that is proven

to be nonsense, the economy has barely grown over the last 12

months. Unemployment is rising, we now have over one million young

people unemployed. We have just seen the national minimum wage held

static for young people. I don't disagree with you here. That is

where the effort needs to come. is not growing enough, that is true.

Has he put fuel in the tank, not really, but the tax cuts aren't

coming at the moment. We are talking about tax cuts not anything

else. We better talk when we resume this and we know what we are

talking about, rather than speculating. A new approach! Thank

you, after 11.00 we will look at what the budget is do to help

Britain' recovery, and what briefings the papers have had with

a journalist and economist. The world is running out of energy,

what brilliant news that there is a way of extracting vast quantities

of natural gas from the earth, which might bridge the looming gap.

Last year two earthquakes hit Blackpool, little ones, of course,

but these were different, they were not natural phenomena, they were

caused by efforts to extract methane gas from the ground, in a

process known as fracking. No big deal, say the energy companies, who

think fracking is hugely promising. It is huge in the states, but

environmentalists hate it, and it is banned in France. Any day now

the Government is expected to allow it to resume here. Do we want it.

It was extremely unlikely there would be no earth tremors, there

have already been two. earthquakes in two months won't

stop gas drilling for good. Last year, Blackpool was hit by two

small earthquakes. The tremors didn't amount to much,

but these were no natural phenomena. By trying to extract methane gas

from beneath the earth's surface, engineers had triggered a seismic

response. The technique is known as fracking.

Over 800 wells were planned Forsyths here on the Fylde tennis

la, operations were called to -- peninsula, operations were called

to a halt and the Government called for a review. The decision on

whether they can start up again is gettinged any day now. But

Newsnight -- expected any day now. But Newsnight has discovered

regulation is not keeping pace with the industry. An industrial process

that caused earthquakes clearly isn't great, even if it is only

small, local tremors. And these quakes have focused opposition,

raising a host of other questions about the impact of National

Infrastructure Plan on this coastal lant scape of the Lancashire pen --

landscape of the Lancashire peninsula.

So what is fracking? Or to give it its proper name, hide drollic

fracturing. -- hydrolic fracturing. From a

plait pad, a mobile rig drills down 7,000 feet to reach the gas.

Precision drilling follows a gentle curve, so the end of the well has a

horizontal view of the rock, and maximum access to the trapped gas.

The well is lined with alternative layers of metal tubing a cement

casing, and then completed with controlled explosions that open up

fractures in the surrounding rock. Then comes the fracking. Millions

of gallons of water, at high pressure, are pumped into the well,

along with sand and chemicals, which prop open the fractures and

help the gas to escape for easily. It it is this process that

inadvertantly caused the earthquakes. Mike Hill is a

technical adviser to Fylde borough council, he's a technical expert

that used to work in the industry. He is not against it but wants to

make sure it is done properly. you have a seismic event,

relatively small, you might feel shakes in the house, my concern

isn't houses or buildings, it is more the cement around the borehole.

If that gets cracked, that is when you can get contamation, and

pollutants migrating away and moving away from the borehole, we

must prevent that at all costs. He is concerned after America's

experience with fracking. Internet videos showed flaming taps as gas

escaped into drinking water. Some companies denied that such leaks

were happening. But America's second largest natural gas company,

Chesnot peek energy, admitted to Newsnight, that it had found

evidence of gas leaks and had changed procedures. In some cases

it looks as the cement was drying, the high pressure shallow methane

kept it from drying properly, and allow channelling to develop on the

outside of the casing which could allow methane to move up and get

into fresh water. We found regulators trying to catch up and

impose rules after serious problems had already occurred.

I'm Mark Miller, the CEO. The main players in UK Shell Gas

Exploration, have tried to make the case for fracking. We are drilling

a new exploration well to 9,000 feet near Blackpool. They insist

they are a responsible company. We employ all state-of-the-art

equipment. Even down to the actual operation of it. His point is, that

it will all be done safely. We can assure people that some of the

concerns that we have regarding oil and gas drilling, will not happen

on our watch, and will not happen with wells we drill in this area.

Blackpool is a folkal point now, it sits on one of the UK's most

promising sites, the Boland Shale, but Lancashire is not the only

place with shale gas resources, there are shale basins from

Blackpool to scar bore roing row, from the Midland valley in Scotland,

and southern England. Estimates vary on how much gas it

might be possible to extract, the British Geological Survey reckons

on the equivalent of 18 months gas needs. Qaud drill la says it

calculates there krb -- Cuadrilla says it calculates many years

supply worth billions of pounds. To get an overview of just how big

an impact fracking could have on the landscape, it helps to get a

bird's eye view. This part of Lancashire is heavily

populated, with Blackpool on the coast and Preston further inland.

What makes people anxious, here in the UK, is that drilling sites are

so close to where people live. However much Cuadrilla vows to keep

its operation safe, people worry that other companies may not be as

conscientious. Christine Dickinson runs a caravan

site, close to where they might drill, and just down the road from

the local bird sanctuary. No, we don't want it, on here, on our

doorstep. Where it could contaminate the water, where the

birds are, it could contaminate our spring water. I have got a spring

here. We don't want to take that risk.

We approached Cuadrilla where former head of BP, Lord Brown is a

director, for an interview through their PR consultants in London. We

wanted to ask them about their practices, regulation and local

concerns, but they declined. In response to our questions they said,

Cuadrilla believes that the tough and comprehensive regulatory regime,

that is now in place, would ensure the UK can benefit from shale gas,

safely and securely. They said they have an on going

dialogue with local residents and believe shale gas could have a

transformative effect on the local and national economy.

But just how tough and comprehensive is the regulatory

regime that Cuadrilla refers to. Mike Hill took us to the site near

Blackpool, it is the only one in the UK that has been partially

fracked. Cuadrilla agreed to stop work after the earthquakes while

the Government review took place. That was months ago, but the

leftover fracking fluid is still here, because Cuadrilla has no

permit to move it. The water they are storing is radioactive, because

it has picked up natural radiation from underground. It is only a low

level, but above that allowed by the Environment Agency.

When you frack a well, you put about two millions of water down it,

one million flows away with the fracking chemicals, into the

formations and we don't know where it goes, the other comes back up

the well, half a million gallons per well, so up to 800 million

gallons of water that needs to be disposed of with up to nine-times

the radioactive levels. The Health and Safety Executive regulate this

industry. How many times have you come down, I asked them, how many

times have you inspected, when Cuadrilla say they are doing X, Y

and Z, how much times have you checked? The answer, none, not once

in two years has the HSE visited any of the wls in Lancashire to

test, or verify for themselves. sounds as if your concern over

regulation is left to the industry itself, rather than pro-active

regulation? It is entirely left to the industry itself. We asked the

Environment Agency, what plans it has to deal with the flow-back

fluid stored in Blackpool, and how it wants to regulate in the future.

And how they appear to be relying on assurances from Cuadrilla.

They say the company will have to seek a permit to dispose the fluids.

If the industry rides out local opposition, here in Lancashire, and

finds it really can extract as much as it hopes, and safely, the impact

of shale gas in the UK could be dramatic.

It is already bringing down gas prices in the US.

This poses a dilemma for the Government. Turning to gas for a

few more years pushes visions of a carbon-free energy supply further

into the future. But it could help to solve fuel poverty and boost the

economy, as it ponders this potential new source of home-grown

energy, that promise may prove too tempting to resist.

Two people whose positions on fracking are hopelessly irrock

consieming, Al Green, a shale gas Evangelist. And the only Green

member of parliament. What would the exploitation of gas,

only available through fracking do to the price of gas? I estimate it

would drop it by at least half by 2020. So we will be paying half

what we now pay for gas? That's correct. With the results in effect

on industry, and of course on electricity prices. Do you have any

evidence to support that claim? Certainly we are talking about

supply and demand here. They said there there was 150bcm, that is an

outdated figure that the British Geological Survey is changing. This

is not one North Sea, this is several North Seas worth of natural

gas. It is transforming world energy markets. And it will do the

same in Lancashire. So you don't dispute that, that if there is.

do. I dispute the issue of the cost saving that Nick has just put

forward. If you lock at someone like Deutsche Bank says, they are

hard-headed economists, they say in the UK context, the chances are

that shale gas won't reduce the price of gas significantly at all.

Because we are far more densely populated than the US. At the US

they are the only place exploiting shale gas. It has cut gas prices?

It has, what Deutsche Bank says it is unlikely to do that to any

extent through the UK, we are far more densely populate and it will

take far longer to get agreement to go ahead with mining. Why not take

the commercial risk? I want some facts on the table. Let's lock at

dech bank about the cost, and the pollution side of it as well, my

worry is when Nick says there is several North Seas worth of gas,

the truth is, even if we were to exploit 20% of the licensed area in

Lancashire, we would use up to 15% of our CO2 budget to 2050. If we

are serious about reducing climate figures we can't afford to extra

Kate that amount of gas. When you see -- Extricate that amount of gas.

When you see people setting fire toe their taps it is difficult.

is emotional. How is it emotional, you want to have a wash and there

is a fire, of course it is emotional! That has no connection

to fracking at all. Are you certain about that? Beyond a shadow of a

doubt. It is impossible that was caused by fracking? That is correct,

it has been proved many, many times. Or asserted many times? Even proven.

For example, if anybody would just go to Google News, and do a search

for water on fire, you will see, in Google News, north American

newspapers going back to the 1930s, 40s, and 50s, with taps on fire.

don't think we should get too diverted by that particular image,

it was shocking but there are plenty of other shocking images

around shale gas. Partly around the links to water contamination,

through the chemicals that are being used. But also the fact that

the first dash for gas we had was not a bad thing, it replaced coal.

This new dash for gas is likely to replace energy efficiency. That is

the real tragedy. That is a political point of view, you think

that all fossil fuel energy should eventually be replaced by energy

from renewable sources? Eventually. If we accept we need gas as

transitional fuel, don't use shale gas, it is more carbon intensive

than other gas. The would you accept it if you were satisfied it

was properly regulated, the exploitation and the regulations

and the way it works? It would be better than it is at the moment. I

still don't think it is the right way forward, for the reason I have

said, it is far more carbon intensive, contributing more to CO2

levels. Here in the world we are in the middle of an economic crisis?

We are saying this gas will be more expensive, potentially, than

conventional gas, and we are saying it is more carbon intensive. It is

a no-brainer. If they want to take the commercial risk, who are you to

stop them? It is not just a commercial risk, it is an

environmental risk, and locking us into a fossil fuel structure in our

energy supplies, at exactly the time we want to move on from that.

That is an ideolgical point? It is how to reach the climate change

objectives, agreed by the Government. We have the Climate

Change Act, saying we have to reduce our CO2 emissions by 2050,

we don't do that going down the Shell route. Let's park that and

the question of commercial risk. If an energy company decides it wants

to try to exploit this resource, is there any way, in your judgment, it

can be proper low and safely regulated? I think the jury is out

on that. Not east because, if we are serious about making this a

significant percentage of our energy supply. We might need 3,000

we wills, just to produce 10 -- wells, just to produce 10,000

thousands of gas supplies. This can create a huge amount of wealth for

the nation, which will be taxed, in this nation, and not exported to

the Norwegian sovereign wealth fund, or to fund the Royal Family of

Qatar. There will be plenty of money to

pay for teachers, nurses, doctors, and HSE inspectors and regulators.

This is the best news for the economy, and for the environment.

Because a true dismal sign has been energy.

He might have become a priest, instead a rock star. The story of

Jack White, considered one of the world's most influential guitarists,

has a Picaresque quality. The man who did or didn't marry the man who

wasn't his sister, and later got divorced from someone he married in

a ceremony in a canoe, keep up. He is ranked number 70 in the Rolling

Stone list of greatist by starrists of all time. He has been speaking

exclusively to US. They were the are they aren't they rock combo,

Jack White and his wife, Meg, or was she his sister, either I would

White Stripes were a big noise, but now the band has folded.

Hello. Welcome to London. Do you have the money in a suitcase.

Always. As you know, when the stars talk,

they talk to Newsnight, quite often, and Jack White is dropping in the

former County Hall in London, to discuss a new solo album,

Blunderbuss. I always loved the word, as a child there was a street

near my house, I lived near a fort and they were all military streets,

I loved the word "Dragoon", I thought they misPresident Yeltsin

"dragon", it is the piss -- Do you keep other words in there,

or is that not your tip? American as I am I don't have any

firearms. You are weapons-free at this time? Hands free!

# I want love to walk up and bite # Grab a hold of me and fight me

# Leave my dying on the ground Rock'n'roll wasn't White's only

career option, he also considered the priesthood. I was accepted at a

semry when I was younger, but I didn't go. I changed my mind at the

last second. You could have been Al Greene, and he has done well. What

happened then, you suddenly thought, I can't go through with this?

crunched some numbers, and the pay didn't look very good, so. Watching

the US election process from a distance, it seems as though

religion is a really big factor this time, does that strike you?

I'm not too political a guy, I do know America is quite addicted to

fear. They will take through religion if they need to, or go and

pay for it at the box-office to watch a movie or whatever it is.

Fear is a big addiction in America. Of course people are going to

exploit that through religious means. What about the little matter

of the American presidential campaign. Who has the guitarist's

vote? I refuse to vote for a President, I don't believe in the

Electoral College, I think it is an outdated mode from 200 years ago

that doesn't make any sense for modern times. We just saw that in

recent elections with George Bush, that he did not win by the popular

vote. I think the popular vote should elect the President, the

more votes you get, think you should be the President of the

United States. It seems quite a divided society as well. No, I

think there is, it has always been simplified, two-party system, in

any country, it is kind of ridiculously simplified, there is

not only two sides of the story. Some bad news, Jack White confirmed

there will be no more from him and Meg as the White Stripes, but were

they or weren't they an item. and I had really no idea what

people wanted from a male and female on stage, we didn't really

know what part of the deal was. you were happy to keep it fairly

opaque, you weren't going to be Sonny and Cher? It was a feeling

that what we wanted to represent was feminity and mass kallinity,

telling both sides of the story that was being performed. Finally

an insight into how we Brits are going down in White's home land.

This mean British celebrity vibe has gone on for the past few years,

with the Simon Cowells. Mean as in? Judgmental and harsh, vicious and

nasty was the chef. Ramsey? Gordon Ramsey, and Simon Cowell, in

America it comes off as Ricky Gervais. That is how we are seen

now. Nasty British celebrities. are not like that? You guys are

great. I love you guys. That is very sincere, thank you!

Back to the budget now, by this time tomorrow we shall have

discovered whether we really are all in this together, or some are

more in it than others, as a nation among other nations, Britain, of

course, isn't it in it alone, time to root Paul Mason out of the

basement again. He was going to come here with a wonderfully

elaborate, semi-high-tech tablet to display graphics showing our

international performance, but it doesn't work. Tell us about it?

This is not British technology. OK, the British economy is going quite

sluggish low. That is the background to the budget we have --

sluggishly, that is the background to the budget we have now. We had a

0.2% shrinkage in the last few year, it is locking like 0.8% growth

overall -- looking like 0.8% growth overall this year. The question

George Osborne has to address in tomorrow's budget, the question

that hangs over beyond politic, left and right both know this, is

that cutting tax for a hedge fund manager to bring him back to London,

and cutting tax for his cleaner, the two headlines, does not a

growth strategy make. You have to come up with convincing turn around

in some of the key figures. Now, what are those figures? One is the

level of GDP. The level of UK GDP has fallen during, in analog, I

could use my hand instead of the tablet machine. It has fallen and

stayed tag nant, it is not coming back in the same -- stagnant, and

not coming back in the same way as other countries. America is

recovering, Britain is not recovering anything like as fast.

The second set of metrics we have to look at is on industrial

production, industrial production is a geeky term. But America is

recovering, we are not. Despite this we have classy numbers out of

the car industry, we are exporting cars like crazy. It doesn't look

like that alone can turn Britain around. The final thing is

unemployment. We have managed to get away without the worst of the

unemployment that America has. America has, and the Euroland, have

had some very horrible unemployment figures. Ours are still rising,

while their's are falling. This is the challenge Osborne has to hit

tomorrow, he has to at this time it with a convincing story, that goes

beyond, as I say, the individual tweaks. Even the people briefing

tonight, this story about tax cut, are careful from the Treasury to

say it is at the edges, the story remains the same. Six years of very

hard graft, physically. Thank you very much.

-- fiscally. Thank you very much, clearly we are

lagging behind, what can George Osborne do to help. The economist

Megan Greene and Sam Fleming are here to share their ideas. Is he

likely to produce anything unexpected, something more

optimistic to say about the economy than the old merchant of gloom

here? It is critical he does produce a convincing narrative. I

agree with that. There will be certainly things that he has held

back. There always are. This has been a heavily breech -- briefed

budget as everyone saying. His room for manoeuvre is prodigious, he

needs to show the fiscal projective. He has put emphasis on maintaining

the credibility of the markets. And unfortunately for himself, he has

given huge status to the triple-A rating, which he has to show he

wants to maintain. This fiscally neutral budget, in terms of

increasing and reducing borrowing, will be one of the underlying

messages of the budget tomorrow. He's not short on vanity, like most

Chancellor of the Exchequers, can anything he does make much

difference? This is the thing, I think the Government has very

little room for manoeuvre, this rebalancing story is a slow burner.

What Britain needs to do is reduce its dependance on domestic demand

and financial services and slowly try to shift it towards export

orientated executors, that will take time. There is little to

announce tomorrow. That will take a generation? There is little to

announce to shock everyone in a good way that Britain has a new

fast growth strategy. We are looking at these numbers, or not

locking at the numbers, we would have been locking at the numbers.

If it had worked! As a terrible problem, if Euroland and the US are

beginning to grow more strongly this is the best news we have had

this year. Why are Euroland and the US growing faster than we are?

First of all, Euroland is Germany, that is driving that, we are not

talking about Italy or Greece, we are talking about Germany. They

still make things? It is in an economic sweet spot, they spend ten

years cutting costs and making themselves more competitive as an

economy. It is a long turn around, that is what Britain faces. It

can't be done jofr night. Germany is testament to that, if they are

seeing a real recovery, that is good news, that is one of the

massive export markets too, the states. I don't think the eurozone

won't grow more than the UK this yo, that will probably contract and

stagnate. Germany sure as hell will? That isks imbalances within

the eurozone. Germany is having to come up with an entirely new growth

strategy. It is doing exactly the opposite of the new and foster

domestic demand. Germany has been in a sweet spot in part because it

is doing better with competitiveness. The vast majority

of German experts go not just to the eurozone but to the BRIC.

Brazil, Russia, India and China? Yes, and they are not interested in

the UK's financial services, most of the UK's exports are going to

the eurozone, that won't provide much demand any time soon. What

about the ernest protestations we hear about cutting the 50p rate of

tax for the richest people in society is some how going to effect

economic transformation in this country? It won't effect an

economic transformation and it is being oversold in that respect. It

is about politic. There is a role in Government to provide signal,

there are many different signals you can send, one of the important

signals is we are open for business as an economy. The 50p rate has

this extraordinary state tuts, when you speak to business people --

status, when you speak to business people, they bring up the 50p rate,

the first thing you mention. If you were George Osborne cutting

corporation tax at 23%, with the 50p rate sitting over through r you,

it is a real problem sitting across from the table to the

multinationals and explaining the attractions of Britain. It is an

issue about politics and signals, I think it is signalling in in a bad

way. The Government have said we are in bad way and deleverageing

everything, and now cutting taxes for the wealthiests, it is a bad

signal, undermining the solidarity the Government has been trying to

convey. Some of tomorrow morning's front

pages now, the Times, they are all basic clo going with various leaks

and nudges and wink -- basically That is all for Newsnight, the race

has hoted up to avoid having to host the Eurovision Song Contest in

2014, that is the penalty for winning this year. Britain may have

entered the 75-year-old Englebert Humperdink, there is a rapper going

in talking about the structural # With contributions from the

institution # To find solution for pollution

Good evening, a chill in the air for some of you tonight. Another

mild day tomorrow, the best of the brightness will be across eastern

areas, a wet and windy start to north western Scotland. Most stay

dry. Sunny spells across many parts. That said, a little bit more cloud

for northern England and the Midlands, compared with this

afternoon. We won't quite get to the 17 degrees, some parts of

Lincolnshire and Yorkshire. By contrast, southern areas sunnier.

Temperatures here 15-16 degrees, likely in a few spots. That low

cloud first thing in the morning will lift and break, seeing the

sunny spells coming through. Wales, sunshine in the south compared with

today. A bit more cloud further north, remaining cloudy across

Northern Ireland, even here it will be one or two brighter breaks, just

possible in the north. North West Scotland, wet and windy start,

turning dry later, many western areas cloudy. To the east highs

possible, sunny spells, into Thursday we swap the fortunes round.

North western areas will fare better. Manchester and Belfast

becoming brighter. South-easterly winds will develop. London 17

degrees, Birmingham 15, across other parts of eastern England in

particular will see mist and low cloud to begin the day. Burning