22/03/2012 Newsnight

Non-existant employers, untracable workers and employees who were

actually freelance. Newsnight has evidence of widespread fraud at the

jobs agency, A4e, Paul Mason investigates.

In this leaked report, evidence of management issues at A4e, why

didn't civil servants get to see it. Is it time for the Government to

show A4e the door. We will have live reaction.

The Toulouse Government ends in a police shootout, but ignites a

debate on diversity in France, will it impact their presidential

elections. Until now France hasn't seen the

kind of home-grown Islamist terrorism that Britain and other

European countries have experienced. But some say that the threat here

was dangerously underestimated. Does the budget mean that the party

is over for Britain's old people. And is that only fair.

We will have young guns from Labour and the Conservatives here to slug

it out. And...

The athletes, the sponsor and an Olympic anthem for the world. DJ,

musician and top producer, Mark Ronson, is here to explain how he

wants us to feel about Britain and the games.

Good evening, the company that has made millions out of welfare-to-

work schemes, is at the centre of a new storm tonight, after a leaked

report provided evidence apparent fraud. A4e is already under

investigation, this report came from its own auditors, who warned

in 2009, that numerous cases, where the company had supposedly got

people into work and been paid for it by the Government, simply

couldn't be backed up with evidence. The Government's position has been

that systemic fraud will mean the end of A4e's lucrative contracts.

Well our economics editor, Paul Mason, has been investigating.

Here's a company that makes money by putting unemployed people into

jobs. It sends a man for a job, and after two hours he complains of

sore feet, and he leaves, and is never seen again, later somebody

signs a form saying he had a job for 13 weeks. The company claims

money from the Government for it. This is either fraud, or

irregularity, or bad practice. We ought to know what it is.

This stuff happens in the best of companies. What the Government is

concerned about is whether this was systematic at A4e. This report,

that was leaked to us, is full of such examples.

And more, what it says is the company's management really were in

danger of potentially systematic management failure, to address

these problems of fraud and irregularity.

Time was, A4e was the poster child for the Government's back to work

programme, Mr Cameron made the company's boss his back-to-work

adviser. Is she being helpful. helpful. A4e was paid �170 million

a year by the Government, for training the unemployed and getting

them into long-term jobs. The jobs were supposed to last at least 13

weeks, and the employers had to sign a form, confirming the job was

real, and reasonably full-time, not just a few hours a week.

In July 2009, A4e audited the work of its top 20 recruiters, these

were supposed to be the best people, and the auditors only looked at the

files of 224 clients. It is just a snapshot, but what they found was

disturbing. In offices scattered all over the country, A4e's finest

were claiming for putting people into jobs that didn't exist, or

didn't qualify for a payment from the Government, and fabricating

paperwork to back up the claims. The report details potentially

fraudulent, or irregular A4e claims. Three in Edinburgh, three in

Newcastle, and six in Bridlington, two in Bootle, two in Manchester,

one in Rotherham, and four in Nottingham, three in Norwich and

two in Woolich. They could only be sure that everything was in order

in two-thirds of the files they looked at. The report itself warns

these are not isolated incidents. In Edinburgh, one client walked out

after two hours, complaining of sore feet, and never appeared on

the potential employer's books. But A4e still claimed the payment. In

Bootle, the auditor could find no trace of an unemployed man who was

supposed to have found work in Royal Mail, and no trace of the man

who employed him. In Bridlington, a cafe owner told the auditor that he

never met a man A4e claimed for. He wanted to know why A4e kept asking

him to sign blank forms. In Woolich, Sebastien Fournier appeared to have

claimed putting a benefits cheat back into a job he was already

illegally working from. The auditor Auditors found that recruiters

thought there was nothing wrong in filling out forms that should have

been completed by the employer. 4% of the claims by best recruiters

were potentially fraudulent, found the auditors, and the rest were

risky. The auditors were only sure that A4e was entitled to the money

they claimed in 74% of cases. This is what the Deputy Prime Minister

told parliament next week. We have launched our own audit of the

existing contracts that A4e has received from Government. If there

is any evidence of systematic abuse, of course we would end all

contracts with A4e. Critics will say the report appears

to provide the evidence of precisely this.

Of course, the majority of claims surveyed, as well as some of A4e's

offices, and some of A4e's recruiters, were given a totally

clean bill of health, although the report was written in 2009, we

found two of those linked with potential fraud still working at

A4e rb today. The report, back then, said

management information, in relation to the effectiveness of existing

controls, is minimal. A4e said the document was not the

final draft, and that they had determined that only five claims

were irregular, and related to one former employee. And that they had

repaid the Government, less than �5,000. A4e wouldn't give us an

interview, but an industry spokeswoman told us this.

understanding is, that this is a report that A4e itself commissioned,

and back in 2009, and it shared the findings of that report with the

investigatory branch of the Department for Work and Pensions,

and they found that all the appropriate action had been taken.

The DWP told us, they never saw the document, they were made aware of

the audit, and later received assurances from A4e that it had not

uncovered any major issues. Michelle, those statements there,

from the company, and from the DWP, do leave a lot of questions

unanswered. Why didn't the DWP see this report, it is not a rough

traft, it is a thorough report, hours of work by an auditor. And

what did A4e do as a result of the problems. Labour started the

process and hired them, and the coalition now, what will they do

now. To read this report is im%ing yourself in the world of people

worried about jobs, and being sent to lap dancing clubs, bars, cafes,

low-paid employment, with very little power. They are doing the

work under extreme pressure from the recruiters to get them into

jobs. The Government doesn't want to come out and play and talk about

this, it will have to, because it has a duty of care to the tens of

thousands of unemployed people who are right now, today and tomorrow,

going through the portals of this company's operation.

Let as try and answer some of those questions, no-one from the

Department of Work and Pensions, or A4e was available for interview

tonight. With us in the studio is Margaret Hodge MP, the chair of the

Public Accounts Committee. What did you think, watching Paul's report?

I think it is a shocking catalogue of incidents, which suggest it is

not contained in one area of the country, and it is not about one

little group of employees. It seems to me that it is endemic in the

company. I think the company has got questions to answer. I think

what I feel is if the company, obvious low, saw this report, if I

was a manager in that company, if I really had any moral integrity, I

would have shared the entire contents with the department. I

would have come clean, and I would have made absolutely clear what I

was doing to put things right. This company gets hundreds of millions

of pounds of tax-payers' money, your money and my money, and to

think that on the back of that, the directors are becoming multi-

millionaires, and individuals, who are desperate for jobs, are not

being given a good service, it is not acceptable. There is clearly

some eye-opening example, the auditors turning up to the

employers' premises and they don't exist. Employers being asked to

fill out blank forms by A4e employees. The question key to this

from what the Government has said, the question of systemic fraud,

from what you have seen today, do you think there is systemic fraud?

I have no doubt, after reading the report, this is a systemic issue

throughout the company. It was my committee that first highlighted

the problems in A4e. Since we have discussed it, I have had over 100

e-mails from individuals, either clients or people who have worked

there. What comes out to me out of this, is I think the company

appears to have been really greedy. You see that a little bit in Emma

Harrisson paying herself a dividend of �8.6 million. I think there is a

bullying culture there. In that culture people were cutting corners

and there was cheating going on. From the point of view of the

Government. The Government has consistently said that if there is

evidence of systemic fraud, that they would stop the contract.

that what you think should happen right now, today, on the basis of

this? I have been saying for some time, that I think those contracts

should be suspended. I wrote today to the permanent secretary in the

DWP, asking him, yet again, to suspend the contracts with A4e. He

has not done so. I think this has a wider impact, because if we don't

sort this out, everybody will lose trust in the system as a whole.

This is a new programme, there is literally hundreds of millions of

pounds being put into the private sector. If theren't proper

transparency and openness and confidence, we will lose trust in

an absolutely key programme to get people back into work. Both the DWP

and the statement for A4e, the point they are making, is both seem

to think this is historic, the report came in 2009, the DWP says

it has its own investigations, it is looking into this right now, and

will come to its own conclusions. That honestly misses the point,

trying to put the claim on what happened before the general

election is silly. Do you think that something magically happened

on the day of the general election. That changed the culture of this

company? I don't. You think it is happening today? Among the 100 e-

mails and letters I have had, there are people who are complaining

about the work programme. We know that the DWP is investigating, and

the police are investigating allegations around the present work

programme. I think what is a really important point, the work programme

is a new programme. It is going to be run by a whole lot of private

providers. In a sort of, where there is not going to be very

detailed vigilance of how they spend the money. I think it is

hugely important, it is tax-payers' money, this is hugely important.

There is proper transparency and openness, so you and I can be

secure in the knowledge that the hundreds of millions is properly

spent. It is a huge amount of money, briefly, if you can, A4e are also

saying this dates back to a paper- based system they had in the past,

and the new electronic controls they have would not allow it to

happen today? If A4e had been completely open, and shared this

report with the Government, I think that would have been one thing. I

think any moral employer would have done that. If the Government knew

about this report, and knew about the culture in this organisation,

I'm extremely surprised that they thought that this was an

appropriate company with whom they should be doing business, using our

money. Also joining us tonight is Laim

Byrne, the shadow Work and Pensions spokesman. If you were in

Government today, what would you be doing about this report? I think I

would be coming forward to parliament with some answers to

some pretty basic questions. First and most important is, did

ministers know about this report, when they handed A4e a �440 million

new contract, to run the work programme. These new work programme

contracts are the biggest payment by results contracts, pretty much

in the world. They involve a huge sum of public money. And crucially,

they are aimed at solving, what is one of the biggest crises

confronting our country, which is the unemployment crisis. Ministers

have to come forward and say did they know about this report when

they handed out the contracts, if not, why not. Of course the people

who are actually in power at the time that this report was written

in July 2009 was the Labour Government. You were in Government

at the time, it happened on your watch? Absolutely, our counter

fraud checks happened to surface this problem, that is why a year or

two after this report was reduced, someone was not only charged but

convicted for fraud. That shows the checks were in place and working.

The key now is whether the checks are in place on the big new

contract, the work programme. That is why we need to know, did the

ministers know about the report when they signed off on the

contracts, and secondly, have they got the right checks in place today.

We heard a few weeks ago the incredible news that the

Government's counter fraud system for the woj programme isn't

actually in place -- work programme isn't actually in place. If the

checks were in place when you were in power they can't have been that

good. We are talking about a geographical spread of these

allegations across the country, six in Bridlington, four in Edinburgh,

two in Woolich, the list goes on and on. You didn't have that good a

system in place, did you? The fraud was surfaced, and someone was

charged and convicted for it. The question now, as I say, is did

ministers know about the report when they signed off on a massive

new contract, and what checks have they now got in place, in order to

ensure that the lessons have been learned and this is not happening

again. Ministers have said, if they do find evidence of systemic fraud

they will suspend the contracts. They are looking at the evidence,

looking at the evidence that we have presented tonight, do you

believe, as Margaret Hodge believes, that this is a systemic failure in

systemic fraud? I think the onus is now on A4e and ministers, to

satisfy parliament, and tax-payers, that this has come to an end. And

that there isn't the same problem on this massive new contract in the

work programme. Ministers like to boast it is what they call a black

box contract, that means it is pretty hard to know what is going

on inside, there is a much bigger incentive on companies to just get

people into jobs, or toe claim that they have got people into jobs,

that is the only way now they get paid. If tu like, the stakes are

much higher for companies. The -- if you like the stakes are much

higher for companies, the fraud is much greater and the checks should

be tougher. I'm worried that the DWP has had to confess that the

checks for the work programme won't be in place until the end of April.

Margaret Hodge wants the contracts pulled now, because she doesn't

believe this is a fit recipient of public money, are you making the

same call tonight or not? taking slightly different position,

I think that ministers need to come forward to parliament, very, very

urgently now, and say did they know about this report when they awarded

the contracts, that is a matter of enormous public concern, and second,

what is the result of their incertainly investigation. We know

there isn't a checking system in place, because they have to build

it. We need to know now what their investigation is showing. This is a

matter of massive public concern. President Nicolas Sarkozy has

appealed for national unity in France, after the French Muslim

responsible for the deaths of seven people in Toulouse, was killed in a

police shootout, after a long siege. France has the largest Muslim

minority in Europe. Debates about integration have become

increasingly strident in recent years. It is also in the midst of a

presidential election, with President Sarkozy trailing in the

polls. First of all, here in Toulouse they

are simply in enormous relief that the gunman, killed in the street

behind me, is no longer at large. That is particularly because he

warned police, over the last couple of days, that he had already

identified his next victims. But along with that, questions are

already beginning to be asked. Questions, first of all, about

whether all the warning signs about the killer had been picked up on,

and we have heard reports, for example, tonight, unconfirmed, that

the Americans had already put him on their no-fly list. There are

also questions being asked about the radicalisation of French youth,

about immigration, and those are questions about which, on which the

far right, the National Front, can only make political capital.

Questions which President Sarkozy and the other mainstream

politicians will have to answer. But first, this is how the events

unfolded today. The police had been surrounding the block of flats in a

quiet residential area of Toulouse, since early yesterday morning.

They set off explosions throughout last night. In an attempt to

exhaust Mohammed Merah and force him out.

But the final drama didn't come until 10.30am.

(gunfire) Heavy gunfire rang out through the evacuated streets, soon

it was revealed how the siege had ended. Police had stormed the flat,

but a door and window, after a six- hour silence from Merah, and were

met with gunfire. TRANSLATION: killer came out of the bathroom, he

was shooting violently, the shots were frequent and severe, even

those used to seeing such things, said they weren't used to seeing

such ferocity. The policemen defended themselves, but in the end

Mohammed Merah jumped through the window, with one weapon in his hand,

still shooting. He was found dead on the ground. Police moved in

after they heard Mohammed Merah was planning to kill another soldier.

It appeared he was already responsible for seven deaths.

On March 11th, a paratrooper was shot dead in Toulouse, on March

15th two more paratroopers were killed. On March 19th, three

children at a Jewish school in Toulouse, and a rabbi were gunned

down. But today, after the death of the gunman on this street, many

questions are still unanswered. Until now, France hasn't seen the

kind of home-grown Islamist terrorism that Britain and other

European countries have experienced. But some say that the threat here

was dangerously underestimated. There is particular concern that

the Secret Services were apparently tracking the killer for several

years, but didn't consider him a risk.

Merah, pictured here, in an internet video, was a French

citizen of Algerian background, who travelled twice to Afghanistan and

Pakistan to train with Al-Qaeda fighters. He claimed to belong to

Al-Qaeda. French prosecutors believe he was a Lone Wolf, acting

without acomplises. TRANSLATION: This is someone who we can't link

to a known organisation or structure. This is someone who

doesn't generate attention, even during the period when he committed

crimes. It was clearly a solitary person, who remained closed up at

home and tied up with visions and scenes of decaptations. That's his

profile. Merah grew up in these streets, in the poor district. His

friends were other young men like these, from north African families.

Young men who today didn't want to talk to journalists, rocks were

thrown at us when we tried to film here, some think France should

learn a lesson from Merah's story. TRANSLATION: It is a problem of

communication between the generations and between native

French people and those who have come from abroad. People who

suffered racism, both at school and in work. One politician, quick to

draw conclusions today, was the leader of the far night National

Front, Jean-Marie Le Pen, she said poor suburbs were being surrendered

to Islamic radicals. But other contenders in the upcoming

presidential elections have been much more restrained. The two main

candidates, President Sarkozy and his socialist challenger, Francois

Allende, suspended their campaigns this week, now the politicicing

will continue in ernest. Many people that Mr Sarkozy has done

himself nothing but good by playing the dignified President this week,

and avoiding any accusations he was trying to profit from events.

Tonight Mr Sarkozy was already back on the stump, he told an

enthusiastic audience in Strasbourg, that there was nothing in French

politics or society to explain this month's killings. TRANSLATION:

today I want to say that these crimes were not the act of a madman,

because a madman is irresponsible. These were crimes committed by a

monster. A fanatic. Just hours after Mohammed Merah's

death, it is too soon to know if France will agree with the

President. The coming four weeks of campaigning will now coincide with

a completely unexpected period of national soul searching.

Let as talk about what this means for France. In Paris now is the

political commentator, Agnes Poirier. It has been a really

dramatic couple of days. How big a moment do you think this is for

France? It is a big moment, perhaps because the killer was French. He

was a French national, killing his compatriots, on distorted religious

grounds. But still, religious grounds.

It has been very interesting being both in London, as I have been, and

in France during those three days. The view in France so far has been

to avoid certain issues, certain questions. The representatives of

the Muslim Council of France decided to say that Mohammed Merah

didn't belong to us, it wasn't one of us, it wasn't Muslim as far as

they were concerned. You know, a lot of people haven't felt they

could say that he was an Islamist. Mohammed Merah does represent a

very distorted and perverted version of Islam, but one that

needs to be addressed, not only by French Intelligence Services, but

also by the French Muslim community. In what way would you want to see

it addressed, what actually needs to change in practical terms?

it is the responsibility, I guess, of religious authorities, to make

sure that only moderate Islam is taught in school, and preached in

mosques. And Salafists are not allowed to impose their norm, and

as the specialist of the Arab world would say, it is very important

that Imans in French mosques do emphasise the belonging to the

national community. Because all these people were French. And they

still were killed. You know there is a wealth of information, there

is a wealth of influence out there, far beyond what Imams in France can

or should be speeching, what about the responsibility of the French

said in this. I What in terms of the French state can be done in

national policy rather than just the religious authorities? I think

it is a collective responsibility that we should actually start

addressing, really. You know, the Republic is a wonderful

construction, but has been slight low abandoned by politicians in the

last 25 years. You know, it is not only Nicolas Sarkozy's devisive

policies of the last five years, we are talking about 25 years of

leaving poor suburbs becoming no-go zones for the police. It is a

question of education, it is a question on the ground for

religious authorities to make sure that they teach moderate Islam. It

is collective problem I think. Let's bring in the author of How To

Be French, Alan Wiley, do you agree with Agnes Poirier that this is a

moment for a major re-think, she says policies have been going wrong

for 25 years in France? Well, no I don't agree. This man was a fan at

that timeic, a madman, who has -- fanatic, a madman, he has attacked

not just Jews, but Muslims and black. The soldiers were not white,

they were black and Arabs. He hated the idea that Arabs, or black,

could be part of the French army. That French institutions could

equal low people from all regions, people from all faiths, all colours,

that is what he hated the most. I think he didn't get teaching in

France, he got his teaching in Afghanistan, and in Pakistan.

Obviously we don't know for sure, there is a suggestion that he has

been radicalised in France, perhaps, during his imprisonment. No, no, no.

No, no, no, no. He was radicalised outside of

France, he was a madman, he tried to commit a crime in 2008. He was

in a psychiatric hospital, the doctor asked him to be followed by

doctors and he was not followed. So it is a failure of our medical and

Secret Service. So it is an isolated case, and

there is no need for any kind of re-think by the French state?

course there is a need for a re- think. I think the French

politicians and public have reacted very well in the last two days. By

showing unity behind the institutions, the army, for example,

who gather all French from all parts the country. And also the

Jews, who can attend in our system, religious school, still being

French. This guy has attacked the French model of integration, which

is based on institutions that favour unity and equality, and

statement accept diversity. I think it was great in the last --

estimate accept -- I think it was great in the last fou days that

people all come together and accept we are together. When hundreds of

Norwegians were killed last summer, the Prime Minister of Norway said

he wanted us to change what we are, and we are going to continue to

stay what we are. And it is, I think, the same thing for the

French to do. Some budget analysis, despite not

particularly hitting grannies, it seems more grandfathers are

actually affected and not actual -- actually with the granny tax out of

the budget. Do the figures the Chancellor read out confidently

actually add up. Today it was the turn of the Institute of Fiscal

studies to give its take on the budget, a vital calendar event for

those working out the confusing budget numbers. I'm not sure not

for you. Did the pensioners, in reality, get a hard deal? Looking

at this morning's papers, this was an unprecedented generational

mugging on the pensions, the IFS described the change as modest.

They had some rather interesting graphics to back up what they had

to say. If we look at what they produced, the chart they produced.

It shows, and we see behind you there, if we look at who got what

out of this budget, well, we see that households with children on

the left there did is it rather well out of this budget. Pensioner

households in the middle there did rather badly out of it, households

without children did rather well again. The Government say that is

misleading, we have to take in the round all the changes since 2010,

when the Government came in. If we plot all of that on the chart, it

shows the big losers out of the budget, out of those changes since

2010, if we look behind you, is households with children, nearly 4%

of their income has disappeared, where as pensioner households have

done rather better. What about the number crunching on

the 50p tax rate, there is suggestion that it was scrapped

because it didn't raise thatch money at all? On that, I think the

Chancellor has -- that much money at all? On that, I think the

Chancellor has less support from the IFS. Trying to maximise the

amount you take is very difficult, the IFS say it is highly

speculative, it is difficult to find the figures. They say that on

the HMRC's own figures, there is a 30% chance that it could be lower

than 30p in the pound. There is a 30% chance it could be higher than

75p in the pound. The inference you draw from that is the Chancellor

picked 45p because he wished that to be the number. There is another

point raised about that, they say the Chancellor has given up some

certain streams of revenue, from raising the allowances, and looked

for some places to make up for it, in other streams of revenue that

were less certain, how many hot chicken people will buy in future

and hot pies, it is not clear. many people now will be paying

higher rate tax? An interesting fact from the IFS, they have

created 325,000 higher rate tax- payers, this is the 40p rate. By

2014, 15% of tax-payers will be paying a higher rate. They contrast

that with 1978- 69, when it was only 3% of tax-payers. To dissect

it with me are my guests. Why is it that pensioners took the

hit, was it just their turn? Well, the impulse behind why this was

brought in is because there is a very sharp rise that David was just

talking about, in the amount that everybody is going to be earning in

their working age before they pay tax at all. That is rising sharply.

He took the decision to hold steady the age-related part, and the

threshold that all of us have, the amount all of us who are working

can earn before they pay tax, is rising to meet it. That is a great

simplification. Let me explain one important part of why this

simplification is important. are not denying they are being hit,

I'm just asking why it was, what was the thinking behind making that

particular choice? Because I do take dispute with the premise of

your question. Because actually there is no cash losers. It is

important for people watching the programme, especially if they are

pensioners, to know, there is no tax rise on them. It is just that a

future increase in the threshold won't be happening, because it will

be frozen. 3.2 million pensioners didn't claim this increase extra

allowance that is being phased out, because it is so complicated. I

think that a simple letter system, that is the same for everybody, --

simpler system, as a long-term goal, that is the same for everybody is a

good thing. This Government has done a huge amount for pension erbs

and does support pensioners. If you think that is a simple explanation

people might have to look again. We have been saying for a long time

that the Government is out-of-touch. You can't fool people all of the

time, this was one of those budget changes which was very clear about

the Chancellor's priorities, he priority yoised millionaires over

pensioners, he -- prioritised millionaires over pensioners. He

raided some hard earned money of pensioners and given a � 14 --

14,000 millionaires a tax cut of money each. That is an incredible

set of priorities for somebody who said we are all in it together. The

key thing to remember here is this is a chipping away of the support

we should have in society for pensioners. We have VAT going up to

20%, pensioners, of course, lost the top-up on the winter allowance,

they lost their free swimming, the concessionary coach travel. A lot

of pensioners up and down the country will be asking what is next.

Is this the thin end of the wedge. The IFS has said it is a modest

change, you can look at it in a cumulative way? We know about the

cliff edge, as it was called in the child benefit arrangements, there

is a very personishious edge here, if you were born on the wrong side

of a day in April 1948, the hit to you will be upwards of �3020, this

is a significant judgment. When -- �320, it is a significant judgment.

He is excluding the cost of inflation. The cost of living is

extremely high, the basic state pension should have IRA flexion for

inflation in it, but pension flexion for inflation in it, but

pensioners up and down the country will be finding it difficult.

People will not take it from a Labour spokesman who ran Gordon

Brown's leadership. We remember the 10p tax rate that hit pensioners in

the pocket, we remember the 75p pension rise, instead, in two weeks

time, pensioners are getting more than �5 a week increase in the

pension, which is the biggest ever. Because inflation is so high.

won't take this about pensioners, you have seen from the chart how

pensioners have done well, relative to other groups under this

Government, and that is because we support pensioners. Let me give you

examples, that �5 a week rise, also the new pension being brought in at

around �140 a woke, to remove means testing -- a week, to remove means

testing. You took away the top-up. That was put in for one year before

the election by Gordon Brown and it was programmed to come out. Let's

bring up the graph once again, the numbers speak for themselves. If

you have a look at this particular graph, Matthew, hopefully we will

get in just a second. It is somewhere, but essentially, if you

look at the winners and the losers, on the winning side of it, it is

the working families with or without children who are on that

side of it, the pensioners are on the minor side of it. You have to

look in context what the Government has done for pensioners, you can

see that everybody, of course, has had to pay some of the debts that

Labour brought in. You can see in the red all of those bars are red

because everybody's having to take a hit for the massive debts this

country was left with. A graph like this doesn't stand because you have

to look at everything cumulatively. The red bars rather than the blue

ones, which says what is this coalition Government doing for

pensioner households, they are relatively protected. It is really

important to mention this, the chalet a whole load of information

out before the actual budget statement -- Chancellor let a whole

load of information out before the budget statement, and he didn't

have the courage to leak this mit on pensioners. If you think you can

-- hit on pensioners. If you think you can put it in cash or real

terms. This is the Chancellor deciding to give a tax cut to

millionaires funded by the hit on pensioners. Pensioners who have

been reflected in the tax system since Churchill introduced this

age-related allowance back in 1925, this is a big mistake on your

behalf. We will vote against it when it comes to parliament. Will

you reintroduce your things. would love to make a commitment,

who knows what other things they will cut away at before 2015. There

is a chipping away. When we get to 2015, we will address it in the

manifesto. Was it in your manifesto. Let me just make this point. We

have heard empty opposition from Labour, they are complaining they

haven't anything positive to say, and the support for pensioners from

the record rise in the state pension from this Government, is

showing that we are on pensioners' side.

Rarely has so much fanfare greeted a little bit of blue lycra, the

official kit for British Olympic hopefuls was unveiled today, work

of Stella McCartney for Adidas. There are others with own related

products, Coca-Cola have funded Anwar them produced by award

winning producer DJ Mark Ronson. First we look at how to capture the

sound of an Olympic city. The eyes of the world will be on us

this summer. So will their ears.

Looking after the music, it is hip, youngish, some time Londoner, Mark

Ronson. His tune for the Olympics can be considered part of a PR

opportunity. To offer a new take on brand Britain. Some 15 years after

called cool Britannia. Although the keen-eyed amongst you may also

notice another brand is also on view here.

It is almost like an orchestra. Peron's record is part inspiration,

part perspiration. The producer travelled the world, sampling the

noises made by elite athletes, their strides and their growns,

including our own big hope Darius Knight. I realised that one of the

cool things Darius does is make these grunts, it reminded me

instantly of, you know how James Brown, somebody like a really

precussive singer would grunt on their track.

Like Peron, other stellar qul turl figures have been mingling with

young limb krb cultural figures have been lingering with young

athletes, running up new threads for them. It is nothing I have

worked on before, I'm working with athletes and the first questions I

have are what can I do for you. If you are performing and you feel you

look better, do you feel it enhances your performance. You get

so many different answers to so many different questions. It is

really different, and the technology is completely different.

What are Peron's credentials to be banging the drum for Brand -- Mark

Ronson's credentials for banging the drum for Brand Britain at the

moment. He has worked with Adele and the late Amy Winehouse. Mark

Ronson's big retro sound, recalling the hey day of stacks and Motown

records, helped to make her an international star, and helped to

confirm his own reputation. Mark Ronson has got London roots,

he shot this video in the capital. So does it matter that his new

Olympics anthem will be used to sell a fizzy drink for one of the

sponsors of the games. The producer certainly has the musical chops.

Though we at Newsnight privately wonder if his new tune could

possibly eclipse this golden classic.

A great favourite with Jeremy, incidently, it is Prog Rockers

Emmerson Lake and scam Palmer at the Montreal venue. A monster slab

of olympian rock. Mark Ronson is here in the studio.

How did you approach this particular project when it first

came to you, what did you think the message you wanted to deliver out

of the games would be? The first thing they came to me and said the

concept was to go around the world recording these Olympic athletes,

and recording the sound of sports, to turn into a track. Which I like

a challenge, you know at the outset of a project. That was it. Being a

song for London 2012, this is the city I was born in and is the city

I live. It is a huge responsibility. You don't want to make something

that is bad because you are representing a city, it is

embarrassing for everyone. So there was the pressure of both of those

things, the pressure of making the track on the sound of sports, and

making something great that, if it is good, it can stay in the history

of great London songs, things like London Calling, or whatever you

want to choose. Is there a message you were trying to get across about

London as a city, and perhaps about Britain, or about Britishness?

definitely. KatyB, who wrote the lyrics, and is the singer on the

track, she encapsulates the sound of young London more than I do,

she's 21, she is closer to it. There is something about her when

she opens her mouth and talks about down by the river, she doesn't need

to say the Thames for you to know what she's talking about. That was

the point in this song, to make it feel like London, to make it feel

like something that was part of the Olympic Games, without saying,

we're winning, we are all getting the gold, you know we're all

running up to Big Ben today. I think that was definitely testament

to Katy and how great she is an artist, her voice and what she

embodies, it is there in the song. Did you want to get back to the

cool Britannia days, the hey day of Britain feeling like it was at the

cutting edge of something in music or fashion or arts? I think that in

some ways, you know, and I have to say it started probably about five

or six years ago. Obviously there was the cool Britannia, Oasis, Blur,

that era, with Lily Allen and Amy Winehouse into Adele and Florence,

it is an era, nobody needs me to go around and say it is, you look at

the charts in America and across Europe and Asia. These are some of

the biggest, Adele is the biggest superstar in the world. Is the

feel-good factor still there. Cool Britannia was in the boom time,

1997, Tony Blair coming to power, everything feeling different than

today in an age of austerity. Can we have the same buzz today? People

look to their music for an escape. And part of me wishes that, you

know, some of the top ten reflected a bit of what is going on, as

opposed to everyone spraying champagne in the club left and

right. I understand that people do want to forget about their every

day troubles when they listen to music, I guess the charts reflect

that. The other thing that is central to this particular anthem

is the commercial side of it. You watch the video, Coca-Cola is all

over it. Let's face it, it is a very commercial piece of music,

made to a certain brief. Does that not detract from it at all. How did

you feel about being part of something that is so commercial?

You know I think the record industry, everyone knows the record

industry has fallen on hard times. You have projects like this, where,

I'm not going to go as far to say it is musical fill lanthropy, no

record company -- fill lantthropy, no record company will pay for me

and Katy to go around the country and make this song. I don't think I

sold out,. Mark Ronson good luck with it. Thank you very much.

That is all from Newsnight tonight, Emily is here at the same time

tomorrow, with all the news fit to tomorrow, with all the news fit to

screen, from me, good night. The weather is set to fair over the

next few days, sunshine on Friday. Low cloud and mist will dissipate.

There will be a few exceptions, maybe some low cloud drift to go

the east coast of England, the odd shower across western parts of the

UK. So isolated hardly worthy of a mention. For most of us fine, warm

and sunny. I mentioned the east coast, cooler and cloudier, that

will be the exception. For many of us temperatures will be soaring

into the mid-to high teens, more sunshine tomorrow across parts of

South-West England today. The odd shower and a fair bit of cloud,

that won't be the case on Friday. Parts of Northern Ireland, these

will be a dying breed with showers, the odd shower might crop up across

the heart of Scotland. Particularly in the west, very isolated and

nearly everywhere will stay entirely dry. That will be the

story as we hit the weekend, dry with some sunshine. The best of

that across the more western parts of the country. This is where the

best of the temperatures will be, as we progress into the weekend,

sunny and warm. Always towards the most eastern coastal areas, with

the breeze coming off the sea it will be notably cooler, and the