24/05/2012 Newsnight

Think a Greek exit from the euro might be a good thing? The deputy

PM says you are deluded. Faced with the shrinking economy at home, Nick

Clegg was in Berlin today, and says Britain faces dire consequences if

Greece leaves. I don't think the break-up of the eurozone, or Greece

coming out of the eurozone, can in any way be described as a recipe

for success. Instead, I see it as a harsh begin injure, if it were to

happen, of even greater instability. For a view of what the future holds,

we hear from the former Foreign Secretary, and head of the high

street chain Next, Simon Wolfson. Why did the Prime Minister put his

culture secretary in charge of the BSkyB deal, when he told him weeks

before he was in favour of the deal. Disgraceful misuse of public money,

a whistle-blower tells MPs that corruption at A4e was widespread.

The company is accused by the audit of systemic abuse, and this time on

the coalition's watch. We will ask Chris Grayling if we can trust how

public money is being spent. A pizza base on prescription for �17.

We reveal the vast sums of money paid out for glutton-free food.

Nick Clegg has warned of dire consequences if Greece leaves the

euro. Unemployment would go up and a grinding slowdown in economic

activity, he says. His words come as latest figures show the economy

shrank more at the beginning of the year than previously thought.

Suggesting the double-dip recession could be prolonged.

Greece only accounts for half of a per cent of Britain's exports, the

equivalent of a corner shop in a big city. However its leaving the

euro would be catastrophic, according to the Deputy Prime

Minister. No-one should labour under the false hope that some how

Greece leaving the eurozone can provide instant relief to the

problems we face. But Mr Clegg's partner in Government, David

Cameron, was an awful lot more equivocal. The eurozone is at a

crossroads, it either has to make- up, or it is looking at a potential

break-up. That was a view shared in Germany, when the Bundesbank said

the Greek exit would be regretable, but manageable. Further bail out

fees should be paid to Greece once Athens makes the cuts announced

last March. It appears a schism is developing in Europe, between those

who think Europe will get over a Greek exit, and those who think it

should be avoided at all costs. Lofg aside the horrendous impact of

a return to the drachma for Greece itself what would it mean here to

the UK economy. The immediate but most intannable

impact will be on confidence. -- intangible impact will be on

confidence. You wouldn't know it from those enjoying the sunshine

today, but Britain is in recession, and figures show it is even deeper

than we thought. A break up of the single currency would accentuate

and prolong that. British firms sitting on a cash pile worth

billions, would hold off even longer before hiring new staff or

making big investments. That would create another credit crunch, where

banks would be aed frayed to lend to each other and other countries,

damaging exports. 40% of British exports are sold into the eurozone,

and 15% to the weakest countries in the eurozone. If there was to be a

Greek exit, it makes selling goods into those markets extra tough. Add

in a stronger pound, you can see why British exporters are

particularly worried. The best estimates of what would happen if

the Greeks left in a disorderly fast,, is a serious recession in

Europe, with the loss of up to 6% of GDP across the euro area over

the next two to three years, that is the optimistic case pr. It to be

a serious financial crisis then the element of damage to GDP would be

worse than that, and the impact on UK exports would be more severe.

The most severe impact will be felt in the services sector.

The services sector is the single biggest component in the British

economy, it includes our lawyers, doctors, dentists, and, of course,

our bankers. The instability caused by a Greek exit from the eurozone

could be immense, especially to the financial services sector. In the

past few weeks we have already seen some turmoil in the financial

markets, equity prices falling sharply in the UK as well as

elsewhere. We are already seeing the effects on the financial sector

in the UK. If we do see a wider eurozone meltdown o even just a

contained break-up, -- meltdown or even a contained break up, that

will have an effect on the banking system. Because that is so

important to the economy, it would have wider impact. British tourists

might benefit, the cost of a holiday in Corfu would half, and

other Greek products would be cheaper. Either way, contingency

plans are being drawn up all over Europe to mitigate what many fear

would be Europe's Lehman moment. Earlier I spoke to the Deputy Prime

Minister, I started by asking whether the break-up of the

eurozone is something he could countenance? No, I don't believe

the eurozone will break up. It is hitting the most serious crisis

since it was formed, and arguably this is the most serious economic

and political crisis that the European Union as a whole has faced,

I would say, since the early 1970s. With the benefit of hien sight, it,

of course, -- hindsight, it was of course tragic that the monetary

union was established in a way in which the rules were not adhered to,

and the homework, the reforms that should have accompanied the launch

of the monetary union, never took place, partly, frankly, because

money was so cheap, money was sloshing around. Everyone was able

to borrow money at extraordinarily low rates, everyone lived on the

never-never. That has caught up with the whole European continent.

We have to deal with this huge hangover of that credit binge,

which went on for so long. And I think it is really important that

the eurozone now re constitutes itself, on a more balanced footing,

that requires monetary regulation, long-term competitiveness, making

sure the banks are properly capitalised. Sharing some kind of

fiscal arrangement, so richer parts of the eurozone could help poorer

parts and so on. What is missing is putting all those things together n

a grand bargain, at the same time. The point is, David Cameron has

said very clearly, make-up or break-up. He has countenanceed that,

does it borey you? I don't think the break -- worry you? I don't

think the break-up of the eurozone or Greece coming out, can in any

way be described as a recipe for success. I see it as a harbing er,

of greater uncertainty and instability. Not just in Greece or

south-east Europe, but across Europe, in the UK, and the global

economy as a whole. When our economies are as fragile as they

are, I don't think anyone rationally could advocate that

degree of further instability as a route out of the problems we

presently face. That is what, by the way, the Prime Minister

believes as well. Can you paint a picture of us of what you think

Britain would be like if Greece left the euro, practically, what

would we see? I think the potential risk is what you get then is an

immediate question mark about the ability of Portugal, Spain, Italy

and other, bigger countries, to pay their way, sort out their public

finances, and rescue their sick banking system. That in turn has a

knock-on effect on the British banking system which, is very

exposed, one way or another, to those other economies. Then, of

course, that, in turn, could set off a chain of uncertainty. The

thing that is most person ni, to an emerging economic recovery, is more

uncertainty, more big question marks about the future. That is

what we must avoid, I have no doubt in my own mind, that Greece exiting

from the eurozone increases rather than decreases those question marks.

Apart from a sense of uncertainty, do you think it would mean more

unemployment, less growth, that we would stay in recession for longer?

I have no doubt in my mind that if you have a chain reaction in the

eurozone, where you get this contagion effect, as they call it

in the jargon, from Greece to other, bigger countries, that will

undoubted lie lead and could lead to higher unemployment --

undoubtedly lead and could lead to higher unemployment, less foreign

investment, companies sitting on their hands. Not investing in new

plant machinery, and factories like this. In other words, a grinding

slowdown in economic activity, which is already fairly fra guy. It

is something that I think nobody -- fairly fragile, I think it is

something nobody could rationally wish for. You say that the economy

is on the road gently to recovery, people would say we are going the

other way in recession, downgraded growth today, but the rest of the

eurozone is stable? It is disappointing enough that the

figures for GDP in the first quarter were negative, and they

have been downgraded further. I think it means we need as a

Government to shift up a gear, to redouble our efforts, to do more to

help support demand in the British economy, whilst, of course, at the

same time, making sure that we continue to enjoy the confidence of

the market, so we have the space to do those things. What do I mean by

that? Well, I think the fact that we have done this heavy lifting

over the last two years, to prove our credentials in sorting out the

sky high structural deficit that this country has inherited from the

previous Government, should now be used, that credibility should now

be used as a guarantee, if you like, as an insurance kol policy to get

more money into the British -- insurance policy to get more money

into the British economy, into homes, and small and medium-sized

enterprise who can't get hold of credit from banks at reasonable

rates, and creating more jobs for young people. With me now to

discuss the difficulties in the eurozone and at home, the chief

executive of Next, and Tory peer, Lord Wolfson, and David Miliband,

is here also. I'm wondering when you look at the eurozone, Simon

Wolfson, do you think we are beyond political solutions, what does the

hard-headed businessman want to do? I think the biggest problem in the

eurozone is being largely ignored. The biggest problem in the eurozone

is the structural lack of competitiveness of places like

Greece and Spain. Over the last ten years wages in Spain and Greece

have gone up by 20-30% relative to Germany. Their goods are simply too

expensive. It used to be cheap to go on holiday to Spain or Greece,

now it is expensive. That lack of competitiveness means they have

between 20-25% unemployment. How can an economy dig itself out of a

hole when it has 25% unemployment. Even those people advocating

helping them are saying you have to have less austerity. You are sort

of saying free them from this, get them out? It is difficult to see

how anything other than devaluation can get them out of the hole they

are in. That means leaving the euro? Exactly. David Miliband, it

is ironic that such a deeply undemocratic institution like the

EU is now having its fate decided by the electorate in Greece?

don't accept that, what is happening is that Greece, a

relatively small part of the European economy, with a deep-

seated set of problems, that weren't address two or three years

ago, is threatening to upend the whole of the European project. The

economics and politics are pulling in opposite directions. The first,

best solution, is actually to keep Greece in. To avoid the risks that

are attendant on its department tue, but just mudling along, and failing

to address the lack of debt mutualisation, on the one hand, the

financial instability in the Spanish banks, remember Spain and

Greece are not in the same catagory. You think they are mudling along?

There has been a chronic lack of leadership. What has happened since

the famous walk on the beach in Deauville, and President Sarkozy

basically rolled over, for the past few years you have had Mrs Merkel

with no counter balance in Europe to Germany orthodoxy. The one hope

is the election of President Hollande in France does change the

balance. There is a chance, not to put off reform, but to combine

reform, with a change to this austerity package, which frankly,

is killing any chance of growing the European economy. Is Hollande a

game-changer here, he spooked the austerity central politicians

hasn't he? He has, unfortunately, a little less austerity, there will

be austerity in Spain and other places anywhere, but it won't get

them out of the hole. It comes back to the lack of competitiveness. The

Germans are to lend more money to keep things going, there is no

state solution here, it is just a Band Aid. Do you think we have to

see Merkel cave on this one? That is down to the German people.

Ultimately the German people and the Government are the people being

asked to pay. I don't think that for British politicians or

businessmen to dictate to the German people, they have to make

that decision themselves. Do you notice the rhetoric changing now

since Hollande won, do you think the left here is learning lessons

from Hollande? Remember Prime Minister Monti, a centreist

technocrat, and in Spain, they are desperate for a way out of this

Bermuda triangle they have got. On the one hand they have deficits and

debts, and then financial institutions and then no growth.

They have to break out of that. The election of President Hollande

offers them a chance to join the debate they can't start but want to

be part of. I think what has happened is collective austerity,

everybody cutting their budgets at the same time has fallen foul of

the basic rules of economics, if consumers aren't spending and

businesses aren't investing, export markets are down and Government

starts cutting. Germany is doing well on it? It is exporting to

China. The truth about the rest of the eurozone and us is more than

50% of our trade is with each other. We are a case study of that in the

UK. I guess the business model, if these countries, if the pigs,

receipt let's say, were not doing well as independent parts of your

venture, you would let them go, you can't do that politically?

someone is so burdened with debt, they never have a chance to pay you

back, they can't go out and get a job, because they are so busy

labours to pay your debt, then you have to say you will have to write

some of that debt off. You will have to put them back in a position

where they can begin to grow. I can't see how that will happen

without devaluation. One thing I don't agree with David, I don't

think Europe can borrow its way out of a debt crises. What about the

bigger question of a referendum on EU membership, it is looking almost

certain that Labour would put it in the next election manifesto, should

they? I voted in the House of Commons last year against a

referendum to be held at the moment. The priority is jobs and the

priority is getting to grips with this eurozone cry is is. The

tragedy in Britain at the moment -- crisis. The tragedy in Britain at

the moment, is on the economics the Government are backing the wrong

horse, which has led to a double- dip recession. On the politics they

have withdrawn to the edge Europe. When people say to me, look this

fiscal pact, are you for it origins it, I'm against it for different

reasons to David Cameron. He's against it on political ground this

fiscal pact, which is about the here and now of the European

economy. I'm against it on economic grounds, that is the agenda that

British people want to address. Sure, you can come to questions of

the democratic deficit in Europe, what exists today is a delivery

deficit, and the lack of leadership is an absolutely chronic problem.

This is beigeer question, it will increase as a bigger - bigger

question, it will increase as a bigger problem. Would you call for

a referendum on something that is clearly a big part of what the

British public are talking about? I'm sure that Ed would advise me,

rather than me advising him, if I want to offer him advice I will do

that through him and not through you. It is a empt iting offer you

are giving me. There is -- tempting offer you are giving me. There is a

bigger game here, what is the politics and economics of the

future of Europe. I think it is very important that we understand

that for 40 years British Governments, Tory and Labour, Mrs

Thatcher and Tony Blair, have insisted Britain has to be at the

top table. The truth today is we are not in the room. Would you go

for a referendum on this? I don't think so, the membership of the EU

is another matter all together. We have to focus on preparing Britain

for the impending crisis in the eurozone, there is a lot that can

be and needs to be done. If someone wrote you a note saying

something would be a great thing, would you assume they were neutral

enough to oversee a judgment about that thing. That is the question

the Prime Minister faces after another day of the Leveson Inquiry.

The inquiry was told that Jeremy Hunt had written to his boss four

weeks before he was put in charge of the judicial decision that he

thought the deal was a good idea. We watched the day in court.

In this massive sprawling inquiry, there have been many highlights,

but perhaps the most incendiary part was the publication last month

of the 163-pages of e-mails, that suggested, at least, a remarkable

level of collusion, between a company making a commercial kid bid,

and the minister deciding the -- commercial bid, and the minister

deciding the fate of that bid. For the most part the e-mails were

written by this chap, Frederic Michel, head of corporate affairs

for News Corporation in Europe. There were reports back to his

colleagues about his contact with this chap. Adam Smith, was, until

recently, special advise Tory the Culture Secretary, Jeremy Hunt. --

adviser to Culture Secretary, Jeremy Hunt. Today we got to hear

from both people. Frederic Michel repeatedly had the question, did

the e-mail reflect what he had said, or had he puffed himself up to

impress his boss. My memos, internal e-mails, were an accurate

account of conversations we had. it that you believe this is a

communication with the Secretary of State, through the mouth of Mr

Smith? I believe that whatever Mr Smith tells me represents the view

of the Secretary of State. Time and to imagain, Mr Michel denied that

there was -- time and time again Mr Michel denied there was anything

improper with this contact. Time and time again he also denied he

had any clue of what Jeremy Hunt's view of the bid was. It is

something I can't say. Counsel for the inquiry seemed to have some

trouble with this account of events. Particularly as he began to take

the witness through pages and pages of e-mails. One in particular, from

January 23rd of 2011. Again, it is a report back from a

conversation with Smith, decribing Jeremy Hunt's view, it is almost,

he writes, game over for the opposition. He says that he

specifically said he was keen to get the same outcome and wanted JRM,

that is James Murdoch, to understand he needs to build some

political cover over the process. Later he says, that they would get

there in the end, and that he shared their objectives. That means

only one thing, that he shared the ultimate objective of News

Corporation, which was to secure the remaining shares in BSkyB.

with due respect, you wouldn't take that leap in terms of interpreting

it. Next up, was, Adam Smith, he's already resigned from his job as

special adviser to hunt hut hunt, over this affair. He told the

inquiry that he saw his role at the time as acting as a sort of point

of contact for the interested parties in the bid. However, under

questioning, he conceded that the only interested party that he had

any contact with, whatsoever during this whole time, was, News

Corporation. As Mr Smith approached to give

evidence, he gave the briefest glance at Frederic Michel, who was

leaving. Mr Smith refused to accept that his old boss was always a

committed supporter of the bid, that he had already made up his

mind. Today, though, he was presented with a memo. Written to

David Cameron on the 19th 2010, he writes, James Murdoch is pretty

furious at Vince Cable's referral to Ofcom. He writes that if they

block their media sector they will suffer for years. He thinks it

would be totally wrong to cave into the Mark Thompson/Channel

4/Guardian line that this represents substantial change of

control. In terms of his judgment he was favourable to the bid?

I suppose the personal view there was, yes. This personal view wasn't,

as it were, a revelation, it is true it has been communicated

privately to the Prime Minister, but it is a view which you knew any

way? And had been publicly stated. I asked you a quarter of an hour

ago was he supportive of the bill, you gave me a non-committal answer.

We are now reaching a point where you might agree with me that he was

supportive of the bid. One month after he wrote this memo, hupbtd

Hunt was handed responsibility for -- Jeremy Hunt was handed

responsibility for the bid. Vince Cable was striped of the role,

having been caught on tape by undercover reporters that he had

declared war on Rupert Murdoch. There were questions for Jeremy

Hunt, he insisted he followed the advice of independent regulators

and hasn't done anything wrong. There are questions too for the

Prime Minister, not least, if Vince Cable was unsuitable to decide the

bid, because he had declared strong views on the subject, why was

Jeremy Hunt suitable to decide the bid, when he had already declared

his views, although in the opposite direction. Tomorrow Adam Smith will

continue his evidence, perhaps as early as next week, his former boss

too will take the stand. Is the welfare-to-work business, a

multibillion pound scandal, that is what a former auditor told

parliament in secret this week, now we can reveal the testimony in full.

He claims there is an unethical culture at companies like A4e,

fraud is rife, and the bosses are dishonest, and untalented, but pay

themselves handsomely. Public money is being chronically misused. The

document put before MPs describes serious problems at another body

called Working Links, part-owned by the Government.

We will put that to Chris Grayling in a moment. First we have this.

This is a story about a company that has just been cleared of

systemic fraud. About civil servants who don't see the point of

investigating that company's past activities, and a committee of

companies who didn't want you to hear the evidence you are about to.

The company is A4e. Its only source of income is contracts from the

Government, main low placing unemployed people into jobs. A

business -- main low placing unemployed people into jobs. A

business that made Emma Harrison, the head, millions last year. A man

called Eddie Hutchinson has told companies the company tolerated

systemic fraud. Mr Hutchinson joined A4e in October 2010, about a

year before David Cameron made this official visit to the firm. Soon

the whistle-blower became concerned of the incidents of frauds and

irregularities, there is no suggestion that anybody in these

pictures is involved. But, the whistle-blower says, he ran up

against a complete absence of corporate governance and

accountability. On Tuesday, the whistle-blower told this committee

of companies, sitting in private, that the frauds generally involved

falsifying the outcome of job placements, for the which the

company was paid thousands at a time. He said some of the issues

had existed for a considerable time, including systemic fraud, that had

been perpetrated and continued to be undertaken within the company's

operations. It gets curiouser, a year before Mr Hutchinson joined

the company, this report, leaked to Newsnight two months ago, was drawn

up by one of his predecessor, in it there is a warning of potential,

systematic failure, to mitigate the risk, towards fraud. Knowing the

DWP was suggesting A4e, we handed this report to civil servants, now

we know what happened to it. What should be published and what

should not be published when it comes to an internal investigation?

Once the committee went into public session, the civil servant in

charge told MPs his investigators were focusing on the current risk

of fraud in A4e, not those revealed in the 2009 document. You were

happy to say that only three, A4e, it tells you nothing about the

company, does it? Let me say it again, that report says they

believe there could be fraud in nine case. A4e as a company believe

they did further investigation to conclude only three of them were

fraudulent. You are quite happy. am not quite happy, my letter makes

it very clear I am now reviewing every single one of the nine cases.

When Mr Hutchinson, the whistle- blower, found out about this report

he was puzzled. The civil servants had already been assured that

nothing was wrong before this. He This is what Mr Hutchinson has to

say about the bosses of A4e, and another company called Working

Links, where he worked and claimed to have found similar evidence of

fraud. While many people employed in these organisations are honest,

highly capable and talented individuals, I do not see the same

characteristics in others in the most senior positions in these

companies, whose interests, it would appear, is to serve only

themselves, regardless of unethical behaviour persisting around them.

He says it was disgraceful misuse of Government and taxpayer funding,

characterised by unethical behaviour, mismanagement,

inadequate corporate governance and risk management. And excessive

payments, in the form of salaries and bow news et cetera. Paid to

those who head up these organisations. In short, I see it

as a multibillion pound scandal. Both A4e and Working Links, deny

widespread fraud within their organisations.

A4e told us in statement tonight, the majority of allegations made by

Mr Hutchinson are unfounded and unstrew. From the evidence we have

seen, we can state the remaining small number of allegations, which

had any substance, were fully examined, in all but one of those

cases, it was concluded there was no case to answer. None of the

issues raised prove there was systemic fraud, at A4e, all relate

to historic contracts. Chris Grayling joins me now. Let's go

through some of the quotes from Eddie Hutchinson now. The incidents

of fraud and irregularities was a major problem for the company, ever

increasing volume of frauds, a multibillion pound scandal. Is this

something you are going to reinvestigate? Let's be clear.

First of all, important to say this is not about the coalition's work

programme. There is no suggestion in any of this, the NAO, the

National Audit Office, has given it a completely clean bill of health.

We have ring-fenced the taxpayer, the money into welfare-to-work is

paid for by companies like A4e themselves, we only pay them months

down the track when someone is in work. There is a lot of contracts

that have been awarded, this comes 2010, 2011, when you were in power?

We are talking about the tailend of the contracts introduced by the

previous Government. The ones we scrapped a few months into taking

office. Paul Mason made reference to the document made two months ago.

Two months ago we decommissioned a detailed investigation. We sent in

independent accountants, and called in a third firm of independent

accountants to look at the issue. Are you saying it is completely

clean now? They have come back to us and said they have found no

evidence of systemic fraud. What they did find was evidence of lax

management in one contract, I terminated the contract. If I find

it again I will terminate other contracts. We have not found

evidence of systemic fraud. There has been no contract issued since

this was looked under, all those contracts are now ended?

contracts have all ended, more than a year ago. This is from 2010-2011,

it can't have ended, he is talking about that? The work programme took

over from all programmes in 2011, it is a payments by results. We

don't pay anything other sthan a small attachment fee until they

have kept something in work for six months. At that point the taxpayer

get a good deal. Is this a fit and proper company? What we have here.

That is a simple question, is it a fit and proper company, from

everything you have heard here? There are question marks about the

evidence delivered to the select committee. This are question marks

about the individual who gave that evidence. I have sent in. What does

that mean, you don't believe him? won't sit in the media and give a

detailed examples. I have significant doubts about the

information to the select commity. I have sent our independent

solicitors in to see if there is systemic fraud. They said no, they

had found in one contract lax management, and I terminated the

contract immediately. This company something you and the Government

want to be associated with? I have to be careful. What I can't do is

just terminate contracts without evidence, possibly on the say so of

a former employee, who stayed for a few months. What I should do, lodge

clo, is send in the accountants, and the independent auditors. And

they have not found evidence of Isis temic fraud. You didn't --

Systemic fraud. You didn't send them in to look at allegations in

2009, and this is what we are talking about 2010/11? The things

talked about we are looking at. And we are also calling on former

Labour ministers, to release to us the contracts. We can't see as

ministers the documents before 2010. We are asking them to make those

documents public so, we can see what previous ministers, including

Margaret Hodge, who was Employment Minister in the last parliament.

this was a fraudulent benefit claimant, you would be in there

like a tonne of bricks, why not here. If somebody walked in and

said this woman is dodgy, you would not expect us to racket on the hoof

and confirm up dodgey. You have to be very careful when a whistle-

blower, about whom there are certainly question marks, and makes

allegations which is not consistent in what independent auditors have

said. A quick question on the Leveson Inquiry before, was Jeremy

Hunt the right person to put in charge in a quasi-judicial role, in

a bid he clearly favoured. Was that a misjudgment by the time? The key

point about Jeremy Hunt, clear all the way through. He took all the

independent advice he was given, at each stage of the process, he

called in the appropriate external advice. He already had a memo

saying hunt unhunt was in favour of the bid, why would he do that?

the hunt had been cleared publicly before that about his view. He said

nothing was consistent. He took over a prohe is is, he followed the

letter of the process, he took the independent advice he was supposed

to take. He took the advice and followed the rulings, suggestions

and advice. He think he behaved completely properly in managing the

process. Lt most people order pizza picking up the phone, some do it

with a prescription from the NHS. The health service spent �20

million on glutton-free prescriptions, including cakes and

biscuits for people who have an intolerance for wheat and glutton.

What was not recorded is the handling figures. One NH Trust was

led to spend �17 on a single pizza base. Many worry the hidden costs

of prescriptions is giving people a bad name. We will ask if the cost

is prohibitive and should the NHS pay at all. Spring time in the Lake

District, where nicer for a little picnic.

OK, I admit it, it is not the healthiest food I could have chosen.

All these types of foods are available for free on the NHS.

So how can this be happening? With an estimated one in 100 of us

having coeliac disease, the NHS's resources are being asked to

stretch to fatty foods like these, all available on prescription, from

your doctor. I think it is quite perverse,

considering the fact that we are facing time of global obesity. This

country is now the fattest nation in Europe. As clinicians we should

be doing what we think is best for our patients and their health. We

are sending the round message to people if we are prescribing foods

that are high in sugar and processed cash hide demonstrate.

rural areas like Cumbria, the local pharmacy is the nearest source of

food for coeliacs, they have an intolerance to glutton, found in

wheat, Barlow and rye. Eating it can lead to debilitating health

problems. Prescribing it is costing the NHS dear. Across the Pennines

in Rotherham, an investigation into the rising costs led to an

unappetising discovery. One prescription comes to mind, the

cost of the two pizza bases was �8.99, we incurred handling charges,

which made the total cost of prescription �35 for two pizza

bases. Here is how it breaks down, two glutton-free pizza bases come

in at �8.95, admin is �10, handling and delivery costs �13, �1.77

covers formcy costs. Lofg the NHS with a bill of �-- leaving the NHS

with a bill of �33.29, four-times more than the original product. It

is not the only example. Dr Fayyaz Chaudri overhauled the system in

Cumbria. His reforms also uncovered some indigestible hidden costs.

was something we weren't really aware of until we actually started

analysing the whole scheme. We were quite shocked by some of the costs

we saw that there were, occasions when there was a bread loaf costing

�2.50, and there was a handling fee of �32. We approached leading

manufacturers who blamed extra charges on the wholesaleers. They

told us they would be keen to investigate any relevant cases.

The arguments are having an impact on people like Geoff Martin, he

lives in Oxfordshire. Another area reviewing whether to continue

funding glutton-free products. He reLois on his prescription to

ensure a decent range of food. is a lifetime Complaint, when you

have it, there is no cure for it. There is no remedy. The only

solution is eating food that is glutton-free. It is different if

you live near a large supermarket, this one in the Lake District

stocks a big range of glutton-free products. It it is more expensive

than normal food. Which is why the NHS is being asked to provide

staples like bread and pasta. Only last year coeliac qu.ish oud

guidelines saying foods like -- issued guidelines that foods like

this should be prescribed, only in exceptional circumstances. We have

heard from five NHS Trusts who haven't even issued the guidelines.

We have been told that some people are getting these prescriptions

from their doctors, even though they haven't been diagnosed with

coeliac disease. When we reformed the prescribing of glutton-free

products, the minority of people were accessing treatments and

didn't have a diagnosis of coeliac disease. We have a diagnostic

pathway, to make sure all patients with access to the products have a

definite diagnosis of coeliac disease. If they are not diagnosed

formally they shouldn't been entitled to the prescriptions at

all. GPs need to be aware of that. Never the less, in Cumbria and

elsewhere, the numbers of people being diagnosed are going up. For

many of them, prescriptions of glutton-free foods, are an

invaluable service. But hand-outs of cakes and biscuits, increasingly

there being seen as rations, which the NHS can't afford.

We ask for an interview with a minister from the Department of

Health, nobody was available. They have since issued a statement

With me now, Jeremy Woods, managing director of glutton-free company,

and David Craig, order of Fleeced, locking into Government waste. Does

it really cost that -- looking into Government waste. Is there really

that much to do with cost, the price is exorbitant? Ten years ago

the only way coeliacs, and it is a very debilitating disease. We must

remember they have to have glutton- free food. Ten years ago the only

way of getting it was through the pharmacies. Nowadays many

supermarkets, as you showed in the film. A lot of food does not have

glutton in, that they can eat. They can buy alternatives to the stuff

they can't? A lot of the supermarkets have special fixtures

for glutton-free food. If we follow the example of Norway, where the

Government issues those prescribed with coeliac's disease with

vouchers, and can redeem with a scannable barcode.

Are we pulling the wrong people -- putting the wrong people in charge

of this, or would it happen whatever was in charge? When it

comes to the NHS, it is such a hopelessly managed organisation

nothing surprises me. A couple of figures, ten years ago we had 12

hospital beds per manager, now it is down to four managers. In 2006

we knew it was a catastrophy, it would never work, two of the major

splierd said they didn't want any part of it. As an NHS stakeholder

does it strike you as slightly ridiculous that you can't buy

Avastin, a cancer judge, but a blueberry muffin on prescription?

You can't believe the NHS, the only way ten years ago was to get a

prescription from a pharmacy. You could say the NHS is slow to wake

up to there beg more products available. It is really the met --

being more products available. It is really the method we are arguing

about here. Will people need more vouchers, will we feel better about

the price of a pizza base? If it is a good idea, but with the NHS it

will take five to ten years to adopt it. You can't be defeatist,

and say what can be done not really what happens? The NHS has suffered

for years from appallingly bad top leadership. The management leftful

NHS, I have worked with -- managing level of the NHS, I have worked

with them years, and they speak management that nobody understands.

Why do you think that level is so predictably bad? The NHS, I'm

speechless, it is so badly managed, it wastes so much money. Whenever

somebody tries to change the NHS, because their managers can't work

with people, they bring in consultants, they are the only

people who speak the same language as NHS manager. It is a

catastrophic situation. We have 17,000 people a year die in the UK

unnecessarily, because we can't match the same survival rates as

other countries. The NHS say they are shocked, will it change?

should, we have to be careful that solebacks don't lose the food

available to them. It is a question of the economics of the delivery

method, there is plenty of solutions as I have outlined. What

we mustn't allow them to do, is say they can't have prescription food,

they should be free to make their own choice.

The Times has Tory MPs saying Greek MPs force a referendum, and David

Cameron facing demands in the Greek The Independent, Cameron knew Hunt

would back the BSkyB bid, and the more Levitt. Plenty more tomorrow

more Levitt. Plenty more tomorrow night, that's all tonight. Goodbye.

There's more very warm sunny weather to come over the next few

days. We will find an easier low breeze on Friday. Particularly

across the south on Friday. -- easterly breeze on Friday.

Particularly across the south. A dry and sunny day. High thump

temperatures to the west of the Pennines. It will be dry and sunny.

Temperatures in the south-east won't be as high today. There will

be that noticable breeze. That will just make it feel a little fresher,

but still the sunshine will be very strong. Most of the south-west it

will be a fine day, very warm start across Wales as well. Those

temperatures wide low getting into the mid-20s in the sunshine. A

lovely say in Northern Ireland, temperatures like today. High

temperatures if inland in Scotland. Dry with no thundery showers. That

low cloud takes a while to clear away. Should be sunnier and warmer

on Saturday. Temperatures into the mid-20s in Manchester Friday and

Saturday. High temperatures to come across the southern half of the UK.