21/06/2012 Newsnight

Tonight, the biggest shake up for England's schools in decades,

splits the coalition. The Government is considering the

return of O-level, and the scrapping of GCSEs, plans which

have already been condemned as devisive, and taking England back

to the 1950s. This is self- evidently not policy that has been

discussed or agreed within the coalition Government. Will this

tackle the culture of competitive dumbing down, as the Education

Secretary claims. We will hear from the politician, a leading education

campaigner, and a former headteacher. The comedian Jimmy

Carr gets serious over his tax avoidance scheme, but why did the

Prime Minister single him out for criticism. Why not some prominent

Conservative supporting tax avoiders. I'm not going to give a

running commentry on different people's tax affairs, that would be

right, I made an exception yesterday. We will here from guests,

including a fellow comedian. Is this what Egyptians struggled for

in Tahrir Square, no President, no parliament, and perhaps a creeping

military takeover. Two leading Egyptian writers and thinkers

ponder the future of the Arab Spring. As the eurocrisis deepens,

British banks have been downgraded. We will have the latest.

Good evening, if there's anyone close to you tonight, who has

worked at school for several years, for the privilege of sitting this

summer's GCSE, then perhaps now is not a good time to tell them the

examines represent what the Education Secretary -- exams

represent what the he had case secretary called the culture of

competitive dumbing down. Michael Gove wants to scrap GCSEs in

England, it is the most thorough overhaul in decades. His coalition

partners are in deep shock over the prospect. It was only over

breakfast reading the Daily Mail that they first heard of it. Frbgts

what I want is facts, -- What I want is facts, nothing but facts.

Facts alone are what is wanted in life. Dickens gave us the obsession

with facts and facts alone, but when it comes to schooling, there

are infinate schools of thought, all contentious. 100 years after

Hard Times, the politicians made the running, Butler's Education Act

gave us the 11-Plus gram matter schools. In Kenneth Baker, the O-

level was out and GCSE in. Now under Gove t looks like the GCSE

goes and the E level returns. It is Mr Gove -- O-level returns. It is

Mr Gove big idea, and a lot of people want to kill T I think there

is more negative than positive and that is unfortunate. The problem is

he has too many strong view, he expresses them too readily, and he

doesn't do enough thinking before he blurts it out. The Mail called

Michael Gove the cabinet's one true Tory. They got today's leak, in

which he regards as GCSEs as far too easy, they cite questions just

as how do you view the moon, through a microscope, or telescope,

as a prime example. They will have no place in Mr Gove's reborn,

rigorous O-levels. What are termed less intelligent pupils there will

be exams on how to read a railway timetable. Mr Gof's - Gove's

explanations were not discussed with anyone. Mr Gove was called to

the Commons at 11.00am this morning, to explain exactly what was going

on. We want to tackle the culture competitive dumbing down, by making

your exam boards cannot compete with each other on the basis of how

easy their exams are. And we want a curriculum that prepares all

students for success, at 16 and beyond, by broadening what is

taught in our schools, and then improving how it is assessed.

may well need improving, but a two- teir exam system that divides

children into winners and losers at 14 is not the answer. Nick Clegg

was left stuck up a Gumtree by the whole negotiation, after touring

the rainforest for the Earth Summit in Rio, he said no-one had

consulted his side of the coalition about O-levels. This is self-

evidently not policy that has either been discussed or agreed

with the coalition Government. I would simply say this on the exam

system, of course we need to make sure we constantly improve the exam

system so it is rigorous and stretching, but we need to design

an exam system for the future, not turn the clock back to the past.

Michael Gove is a Renaissance Man, who wrote leaders for the Times,

and worked on political programmes for the BBC. He also takes a keen

interest in the arts. He was a regular on Newsnight review. As a

critic he was inseesive and impressive. Reviews of his own

performances as a sat teirist, are rather more mixed. The Chancellor,

Norman Lamont, through a party for his 50th birthday, he clocked up

the half century two week ago, but he waited until half the event to

celebrate, that is a change to the policy he has adopted to the

economic recovery, he left that for months and there is no sign of it

happening. Michael Gove's seven years in

parliament have seen him produce an abundance of ideas, and it has

increased during his time in office. Michael Gove is an idealist, and

there are few of those operate anything politics nowadays. The

advantage of being an idealist is you know where you are going, and

Michael Gove clearly has a vision, which he is striving to achieve. So

far that has been extremely successful. He hasn't been held up

by the business of being in coalition. This week alone, Michael

Gove's drawn the ire of Lord Leveson, after complaining his

inquiry into the media is threatening freedom. Now he has

thrown the education department, his coalition partners, and the

Tory chairman of the education select committee, into a fit over

O-levels. How will a two-teir system benefit those who are

currently being left behind, how will increase social mobility, a

central aim of this Government, quite rightly the education

department has two main goals, raise standards for all, and close

the gap between rich and poor. that from his own side, it is no

surprise there is no love lost for Mr Gove among the teaching unions.

It's yet another blurt from Michael Gove, which I think has not been

thought through. What do you mean by that? He blurts out policies,

and then he has to start retracting and retrenching, because people are

saying this hasn't been discussed or thought through. On Monday

Michael Gove left the House of Commons bemused with this.

Robert Burns, that great poet once fact, facts are chill that is won a

ding. Facts are facts, and facts don't lie, even Dickens would agree.

Who only live by fact. Marsha Carey-Elms is a recently

retired headteacher, both of a high-achieving grammar school and

comprehensive. Sir George Young is parent who has campaigned big --

Toby Young is a parent who has campaigned for changes, Hinds is a

Conservative MP who supports Michael Gove, and Tom Brake, Lib

Dem, is also with us. What is wrong with GCSEs? They are just not

intellectually demanding enough. We can see that from England's,

Britain's fall in its league table position in the PISA OECD league

stables You see it you don't get very much at the top? They fail at

the top and the bottom W the complaints we have heard today, if

you reintroduce O-levels and GCSEs you will leave lots alienated. If

you look at Singapore were they do O-level, 80% of children do it. The

problem with the present system is 40% of children don't get a passing

grade T fails 40% of children at present. A lot of people have been

saying there is a problem with the GCSE, there is no point ducking it,

there is a problem here? We need one system for all young people.

need one that works, don't we? was Margaret Thatcher who brought

in the GCSE. We need to see it does work for young people. If there is

an issue about standards at the top, that needs to be addressed. What

you shouldn't do is separate 14- year-olds into sheep and goats,

first-class and second-class, and write off a whole generation of

young people who will not be able to get the essential qualifications

they need to succeed. The thing about GCSE standards, we are

talking about standards for 16- year-olds at basic standards, we

are not talking about a level at grade C should be attainable for

every young person, we need all young people to get to that

standard and we shouldn't write them sof. This is like the grammar

schools debate, some people want them back, it is not about the

secondary modern back? We asked people to do a lot with GCSE and

the breath they cover. There has been grade inflation in the last

few years, leading to an erosion in confidence in exams. Today's

discussion is not just about the exams themselves, but it is also

about that competition in the system, between Exam Boards, it is

about the pressures on schools at the C-D borderline, and some of the

crazy incentives that involves. As Toby was saying, we have a two-teir

system today in terms of the children and young people who are

left behind. Do you accept that, a, there is a problem, and b, this

might be the way to fix it? accept we need to look at the

system. I don't think there is an enormous problem. I'm not sure this

is the answer. I think that from the point of view of the most

academic child, right through to the most challenging, the GCSE can

and does work. If you have inspired and good teachers and good planning,

you can differentiate lessons such that you can stretch the most able

and you can engage the most challenging child. So I definitely

don't like the idea of the devisiveness of writing some

children off, because there are many young children who are late

developers, and who, indeed, can cope, and want to achieve well.

I'm puzzled by this phrase, the "two-teir system", surely there is

one already. There are some children who do maths and sciences

and Latin, and employers understand that, and there are other children

who do media studies and leisure, and so on, and employers also

understand that. They are probably not going to go to the best

universities? I think what this would do, with O-level, and CSEs,

or something equivalent t would entrench it further. It was

interesting that the detail of what's been reported in terms of

the leak, there is an awful lot in there about O-levels and the

tougher exams, and actually very little about what the 25% who

wouldn't be expected do this higher level exam would actually be able

to do. Isn't that the point, you were saying it is not

intellectually challenging enough at the top end, what is in it for

the people at the bottom end. They are told at age 14 you are too dim

to sit a proper exam, you will get a second-grade exam? You are

talking like it would be an irreparable blow to these

children's self-esteem. This may shock you, I sat C se.s in several

subject, half in O-levels and half in CSEs, it didn't do irreparable

damage to my self-esteem, I recovered, I retook the other exams,

I took three A-levels and went on to Oxford. It is possible to have a

two-teir system and retain your self-esteem. Some people fail and

we have to get used to it? If all the people were like Toby Young we

wouldn't have a problem and people would know how to get on. In my

school in the 1970 half of those who entered for O-level and those

to CSE, the CSEs had the worst teachers, the lowest aspiration, no

expectation to stay on after 16, or going on to do higher level

qualifications over the age of 16. We do not want to go back to that

world. Margaret Thatcher brought in the GCSE in the 1980s. If this is

such a great idea, why was it not in the Conservative manifesto and

the coalition document. Is it just worth in straight forward political

terms for having a great big row with the Liberal Democrats over

something you never promised and didn't put down. To go with Lord

Adonis's point, nobody wants to go back to that world that he outlined.

It is about exams with the right depth and brept to make them useful

for young people what has changed is school or college going up to 18

for all young people. You can do the core skills in English and

mathematics, equipping you for life and work, and then doing a higher

exam at 18 and beyond. You didn't think of mentioning it at any point

until now during the coalition agreement and so on? The timing of

today's leak is not ideal. Sometimes these things happen, now

there is going to be a debate, that is a good and healthy thing. It was

a deliberate leak, wasn't it? have no reason to believe it was.

Presumably you choked on your cornflakes when you read it this

morning? I did, but as I understand it, so did Number Ten, so did the

Deputy Prime Minister, and at least one Education Minister. This is

something I think Michael Gove has floated as an idea. You see it as a

blurt, do you, as the lady said in the film? That is an accurate way

of decribing it. Now it has to go back in house, and the broad

conversation that Michael Gove said he wanted to have, that has to

happen within the coalition Government. Would it be a deal-

breaker for the coalition Government, I understand from The

People's Podium who think this wouldn't need primary lepblgs --

people, who think this wouldn't need primary legislation, it could

just go through? The first thing with schools is we have to tackle

inequality I have to ask the supporters of this proposal, how

would it tackle inequality. shouldn't lose sight of the fact

you can do O-levels in the present system, they are called IGCSE, and

regarded as good as the old O-level. You can only do them at independent

schools, since the change of Government they have begun to be

taken up in state schools. Before 2010 you could only do them in

independent schools. That means only the children of the well off

have access to the intellectually rigorous exams. Under the new two-

teir system, at least if you take the intellectually challenging exam

will be down to intellectual merit? That is not true, there are lots of

things like IGCSE that is we can look. To let's not forget the

children in this debate. There are hundreds of thousands of children

take their GCSEs as we speak, it is rotten for them to be subject to

the idea that what they are doing is going to be rubbished and not

rigorous enough. Secondly those young people we say we don't think

you are quite bright enough at the moment to take on something further,

that is really knocking their confidence, and we don't want that

in young people. Isn't it also a fact, unfortunately for some young

people, that you are not going to go to university, or get A-levels,

perhaps levelling at some point, it is going to happen in life some

time? Twof keep people's expectations high. We have to build

people's confidence. That is really a very negative thing, and we

mustn't be giving that message to young people. Any child to who gets

a decent education should be able to get a grade C in GCSE in English,

maths and other subjects, that should be regarded as basic

standard. If you don't regard it as a basic standard for all young

people, then you are cutting the ladder of social mobility, you are

moving back to a two-teir society, that is nowhere we need to be in

the century. You are saying if our system worked better and 100% of

children got a C in maths and two others in GCSE, it might be a

preferable system. You have poured resources into t it has been tried

for many years, since the Conservative Government introduced

GCSE, the evidence s if you look at the league table, the evidence is

it is not working, it is failing 40% of the children. That is why

the Government, quite rightly, this is something we can agree on, are

focusing on pupils who need the support the most through the pupil

premium, that is providing very large sums of additional money,

that is used very specifically to support the children who need it

most. Troll make sure that they benefit -- really to make sure that

they benefit from the system the way the majority do. The answer is

not to give up on those, but to have more schools, he's pioneering

a school that will be of high quality, schools to get to that

high standard, than this fatalism that writes off large part of

society, saying they are not capable of get to go basic

educational standards. That is what those of us who have been involved

in educational reform have been seeking to overcome. The system is

biased against t there is so much focus on the five plus, C plus

method, if you are a young person with no prospect of getting to a

grade C in GCSE, the incentives are not in the system to do the best

you can. The same goes to children at the top of the ability spectrum.

You might look at making sure everybody at 16 goes away with

qualification that is are relative and they can still build at 16 and

18 beyond. We have to be optimistic, being a young person in 2012 is a

difficult place to be there are lots of choice, there is rigour in

the system. The young people have to cope with so much more, you

can't make useful comparisons with the O-levels and today's exams. It

was fact and learning by route, today you have to apply your droe,

today you have to apply your knowledge and work things out, they

have to do masses more than in the past. It is very difficult, it

needs a measured debate, not kneejerk reactions, it needs a lot

more discussion. Do you not see the merit in having one exam for

everybody, a common standard for everybody, do you not see that as a

good principle for education? problem with that is, the exam has

to be too broad in order to encompass the entire broad range of

the ability spectrum, which means that people at the top aren't going

to be challenged enough by it, and people who least able will struggle

to do it, what is wrong with having two. Can you see a coalition

actually pushing this through? think that would be very difficult.

I think what there is agreement on within the coalition is we need to

raise standards. But there are ways of doing that. If there is an issue

with the different exam boards saying to schools, look come with

us, because actually you can get a better result, let's do something

about that, and make sure there is a consistent standard. Is that

common ground, do you agree with that, broadly, that it is?

present Government has set up a quango specifically to push

standards up in terms of the rigours of exams, that is

absolutely right. What you mustn't do is cut the ground beneath A

large proportion of teenagers who would be incapable of sitting exam

that is would get them on in life. We mustn't go down that road.

you very much. Now, the comedian, Jimmy Carr, has

gone all serious today, he made a terrible error of judgment, and

promises to conduct his financial affairs much more responsibly. His

apology comes after big pilloried by the Prime Minister as "morally

wrong", for an apparently ingenious tax evading scheme called K2. Gary

Barlow, the Take That singer, who also used an avoidance scheme, has

not been part of David Cameron's attack.

Paul Mason Rowe reports. Here, heard the one about the Prime

Minister who called a comedian "morally wrong", for avoiding tax?

You have now as Jimmy Carr tried to get his head around a world where

if you earn a lot of money you pay tax on it. David Cameron was trying

to xain himself. In terms of people's tax -- Explain himself?

terms of people's tax affairs, of course people can plan their tax

affairs and put money into their pension, that can have an effect on

their tax bill and all the rest of it. That is sensible, fair and

reasonable. As the Chancellor of the Exchequer said, some of these

aggressive, anti-avoidance schemes, that may not be illegal, are

morally questionable. When it comes to tax avoidance, the

old ones are the good ones, specifically the case of Inland

Revenue versus the Duke of Westminster.

The House of Lords ruled in 1935 that rich people were entitled to

do as much as possible to avoid The UK is, in effect, like a tax

haven. Not in the same way as say the BVI or Jersey, but there are

certain provisions and encouragements that the Government

brought in, to help people minimise the tax. With the purpose of

probably creating employment, and creating growth. I can name you

countless number of incentives, which, are, reducing tax, and which

may be regarded as avoidance. But perfectly legal and have the

blessing of the Treasury. It was in December 2010 that

Britain's status as a legal tax haven started to look uncomfortable.

Then it was Vodaphone getting it in the neck, and Philip Green, the

boss of Arcadia, since then, the battle has widened. It is obvious

there is a battle going on between the tax avoiders, the politicians

and the state. It is up to the politicians to decide to win that

battle. The tools to do it are available. We could have a general

anti-avoidance principle, not a rule, because rules are always

broken by accountant, but a principle that gives the power to

the revenue to overrule artificial schemes, a tax them on the

substance of what is really going The Inland Revenue has indeed

proposed an anti-avoidance rule, not the stricter principle wanted

by tax campaigners, but while the rule is out for consultation, the

revenue has begun to act, cracking down on schemes using the movie

business as a way to pay less tax. To some people paying tax is an

anathama, and they want to reduce paying tax. If the incentive ace

veilable don't work for them in whatever they are trying to do then

they will resort to these schemes, and the ramifications are serious,

if one has gone into one of these schemes, then probably, I have no

evidence to support that, their card is marked by the revenue, they

will question everything they do in the future, and probably look back

in the past and see whether there has been any misdemeanors. Morality

has never been a matter in the British tax system, if it was, the

biggest problem would be this, only the rich and self-employed even

have the opportunity to avoid tax. There is no Duke of Westminster

principle for those on PAYE. In contrast to the case of Jimmy

Carr, the Prime Minister refused to comment on the tax affairs of Gary

Barlow, also reported to be using an aggressive tax avoidance scheme,

but a Conservative supporter. When it came to Philip Green, the

PM famously said, well he doesn't comment on individuals.

For tax campaigners, there is an even bigger mixed message going on.

On the one hand they are condemning Jimmy Carr for moving his money to

Jersey, to use it effectively as a personal bank. And at the same time,

quite literally at the moment, they are creating laws so that

multinational corporations can move their money to use it as, well

their personal bank, and either to pay no tax at all, or a maximum of

5.5%, that is real hypocrisy. Britain's "fill your boots culture",

on tax avoidance goes back decades. As austerity bites, it looks less

and less funny. The comedian Marcus Brigstock was

offered a tax scheme similar to Jimmy Carr and declined. Giles

Fraser was former canon of St Paul's, and our other guest is with

us. What were you offered? Something similar to Jimmy's, but

with a sweet extra thing on the end. You give all of your earnings to

this trust and they loan it back to you so you don't pay any tax on it.

When you die they say you owe us all the money you have lone -- lone

today us, we will take it all and your children don't have to pay tax.

Just like Jimmy I made a massive error of judgment, and I said, no.

Were you a mug in saying no? No, it wasn't something that I could do.

But my comedy, the difference may be subtle to people outside, my

comedy is a bit different from Jimmy's, he has never made any real

claims for himself as a politically engaged comedian. He did the sketch

about Barclays and their aggressive tax avoidance stuff, which, now,

has made him look very, very stupid. It is the hypocrisy factor? In his

own stand-up there isn't anything else. Certainly that sketch on

10..00 Live, the ip pockcy has made him look fool -- the hypocrisy has

made him look foolish. Do you think, to put a fine a point on it, he's a

mug? The problem with comedians is they have a reputation management

issue. If Jimmy Carr make as lot of money from left-leaning students

paying money to go to his shows, and the Show was a left-leaning

show, he has a reputation management problem. Are you happy

to avoid tax legally when you can? I'm a tax dodger, I dodge tax in

all sorts of ways. Some of it seems to be schemes the Government has

intentionally set up, an ISA, tax relief on my pension contribution,

I use that, that seems to be the Government's intention. To give awe

recent example, a week ago I bought 600 cigarettes in Belgium, purely

and entirely on the fact that they are five euros a pack, I bought

them for one reason and one reason alone, to avoid the Government's

tax, and the Government is �200 a year worse off. You should smoke

them! The moral side of this, because it was the Prime Minister

who raised that, is somebody more of a saint because they fess up and

say here is the money back. Are they a sinner because they go off

and buy cheap cigarettes in Belgium, or is it the scale of the thing

that counts? We shouldn't make this a question about individuals, for

me. I'm proud to pay tax, I think I'm proud to pay tax, I think we

should get more into a culture of people being proud to pay tax, it

is our subscription to living in a fair society. The problem s we have

now a situation where, you know, the CEO pays less tax, as a pro-

portion of his or her income, than the cleaner in that company. That

situation is so grossly unfair and perceived to be widely. We can talk

about border line calls, but you know it when you see it. What we

see, not necessarily in Jimmy Carr, but in huge corporations paying

very, very little, or almost zero tax, because they have clever

accountants, not available to ordinary people. That is clearly

wrong. We don't expect, presumably, these huge organisations to do What

Car? Car did, being shamed into it, saying sorry and paying the money

into it? That is why the Prime Minister is happy to name Jimmy,

he's a face and lots of people know who he is, and he's quite useful. I

have to say it was remarkably clumsy of Cameron, some of whose

funders and closest friends are certainly in avoidance schemes very

simple later to Jimmy's. Not just the companies that have -- similar

to Jimmy's, not just companies but on a personal level. Jimmy is a

comedian and he sticks himself out there and the Prime Minister can

call him moral or immoral. How many companies have done what he has

done, saying I'm terribly sorry, we got it wrong, we change our minds

and will do it differently. There hasn't been any of that. Surely it

should be a question more laugh than of shaming people into it. The

law should say you have to pay up? In my view, I don't want to hear

David Cameron's moral judgment ones Jimmy Carr's tax affairs, his

marital status, sex life or anything else. I'm not interested

in David Cameron's morality, David Cameron, Frances Osborne and Danny

Alexander set the rulebook, it is 15,000-pages long. It is impossible

for any single human being to understand the tax code of this

country. But Cameron, Osborne and Alexander control that. Some people

understand how to get round the tax code in this country, it would

appear? In that case Frances Osborne and David Cameron need to

change the rules. It is like Sepp Blatter saying it is a moral

outrage there isn't video refereeing. It is in his control.

The rules can't cover all the eventualities, you have the rules

and you can find clever ways around them. You need something to jun pin

the rules, something you might call a sense of responsibility or

something to do with moralty. I may have a different one to the Prime

Minister. But there needs to be a sense of the common good, something

about fairness. Not everybody has got it, as you well know, tough

legislate for that, you have to legislate for people who will only

do it if they are shamed into it? I'm not saying take the law away,

the law is important, and it is worth looking at tax avoidance

legislation. That is easy to sort out without statute. We used to

have a lot of common law cases. What hinges legally and morally is

was this Jimmy Carr's income, it should be treated as income for

revenue reasons, or wasn't it. We need a much more simple code that

threets, for example, what you get in income and what you get in

capital games, on the same percentage, not different

percentage, because everybody plays silly games with T I reckon we

should be able to get the principles of the code down in 15-

pages not 15,000. They are already ahead of any possible legislation,

that is the game they are in. They take a percentage from these

schemes, and so anything that they come up with, the IFAs are ready

just to make the next step round. I don't know whether it is actually

possible to legislation against this. I do this, if Frances Osborne

and David Cameron, are trying to make some -- George Osborne and

David Cameron are making some political capital they much make a

bigger effort than thus far. seemed to be a good thing for this

country, that the Prime Minister says f there's high tax rates in

France and these rich people from France want to come here, we will

welcome them? That was the day before he made a moral judgment

about Jimy. Saying you are paying too much in France, -- Jimy. Saying

you are paying too much in France, come over here. Supposing for

example, Jimmy Carr decided to become an American citizen, and

work in the United Kingdom for 50- 60 days a year as a cheedian, and

pay all of his tax -- comedian, and pay all of his taxes in the staid

of Texas, would that be immoral? Fair number of people become

citizens of Monaco for tax reasons. This conversation is not going off

in the wrong direction, but unless it is underpinned by a sense of

possibility, you will always find clever people who will get round T

the idea that you actually have a sense of shame about not paying

your taxes properly, it seems to me that's something, people brag about

it and think it is a jolly good thing they pay no tax. The sense of

shame should been what you do with your money, that need not be about

handing it over in tax, it is about your overall contribution to

society, or to charity. Egypt is still without a

democratically elected President tonight, a the Election Commission

refuses to say who has won. Tahrir Square, more than a year after the

fall of the Mubarak regime, continues its now familiar display

of protest. Stoked up by the newly assumed military rule. For years

people across the Arab world have looked to Egypt, the strongest and

most populist Arab country for leadership. Now Egypt is in

political limbo, or worse. Our diplomatic editor has recently

returned from Egypt. Where are these presidential results that we

were supposed to have had? There was initially talk of having them

yesterday, then today. Now it has been postponed, there is some

rumours in Cairo tonight that it might come out at the weekend.

Meanwhile Ahmed Shafiq, one of the candidates, who most people think

have lost, tonight declared he was the winner, even though most of the

accounts people have suggest he isn't the winner. And the other

candidate, Mohammed Morsi, the man backed by the Muslim Brotherhood's

political Government, the Freedom and Justice Party. Most people

think he has just under% more votes and he should be the winner. As it

stand -- 2% more votes and he should be the winner. As it stands

we have no winner. How have the people been responding to all of

this? The public response has been curious in a way. A week ago this

extraordinary judgment came out of the Supreme Court dissolving

parliament. This had been elected with a very large prepondrance of

the members from the Muslim Brotherhood and Salafists, they

said the lot of them can go due to a technicality in Egyptian law.

Many of us expected huge demonstrations to protest this,

virtually nothing happened. The question now is that each move that

the military council, the Supreme Council of the Armed Forces, or

SKAF makes, seems to be calibrated by the reaction it causes or

doesn't cause. It seems that the absence of reaction, to the

disillusion have of -- dissolution of parliament, led them to take

this staggering step, if you like, on Sunday night, pretty much

reversing all of the gains of the revolution, apart from the ousted

of Hosni Mubarak, and to take this step to give themselves these

extraordinary powers. If Dr Mohammed Morsi is made President,

he won't be able to scrutinise or sign off the budget, or declare war.

We won't be able to dissolve parliament if and when it gets

reconvened and elected. He's in a tight spot. What are the options

for the Muslim Brotherhood, on the brink of power, but not much power?

Most people think there is going to be a difficult period of prolonged

crisis but effectively of negotiation between the two sides

in this. The military, I think, at some level, accept they can't hold

all the power. Some suggest, I have heard senior officers suggest, that

they want Dr Morsi to take all the responsibility politically for all

the bad things that will happen in Egypt politically over the next

year, particularly on the economic front. The Brotherhood is calling

for more mass protests tomorrow, Friday, of course, they are calling

for a huge protest, they are talking about occupying Tahrir

Square continuously now. Until their grievances are met,

parliament is reinstated, and the country is put back on a proper

constitutional basis. Let's speak now to two distinguished Egyptian

writers, one among the crowds in Tahrir Square, and Tariq Ramadan,

author of the Arab Awakening, her grandfather was one of the founders

of the Muslim brother Hoo. How worried are you about your country?

I'm very worried at the moment, but I'm worried in the short-term. I

think in the long-term, there is no rolling back what has happened.

People went out because the country was on the knees and not run in the

interests of the people. People had enough, they demanded a decent life,

freedom and human rights. They are not going to go back on these

demands. And the people, can they live with either person as

President? No. In what way? General Shafiq is a return to the old

regime. General Shafiq presents the old regime coming back,

consolidated with the military. Resuming power. The Muslim

Brotherhood are not what the revolution was about, they are not

what the revolution really wanted. They are not why you took to the

streets? No, but they are still a strand within the revolution, and

they are still demanding change. How concerned are you that actually

what we are seeing is this very slow, effectively, a mill tro coup,

it is the military coming back into power one way or another? I think

this is the case. It is not something we can only see now when

I was writing the book, I straight away said behind the scenes it is

not as simple as that. The military and from within we have tendencies

within the mill tree, struggling and some were supporting --

military, struggling and some were supporting Mubarak and some were

against. This is the taking over from behind the scenes. I never

used the concept of revolution, and there was not talking about the

Arab Spring, in the region we have something which is a chess game.

The only revolution we have in the Arab world is intellectual, we can

make it without violent demonstration, we can act against

the Government. Now what is happening with the institution is

to get someone in power who will have power without authority. It

could be Morsi or Shafiq, for the time being, what they are telling

us and they said this two days ago, is in the coming we are going to

get a President for six months and then we will start again the whole

process. What does it mean, it means nothing is changing. One

thing I want to say, is that there are internal struggles, we also

have to look at the region and see who is also supporting what is

happening, because I don't think that we get it right if we think

that the transparency and the democratic process is supported,

for example, by the American administration today. I don't think

so. There is a question of outsiders, but you seem to be

fundamentally optimistic, given the fact that as we said earlier, there

is no Government, no parliament, no constitution, it is not clear who

is in charge? I think that what's happening is that the military are

really actually trying to tighten their grip. It almost for them

doesn't matter which candidate gets the presidency. What they are doing

is they are threatening the committee that is set up to write

the constitution, and they are talking about disbanding it and

creating their own committee, that will write the constitution that

they want. They have got a law in place that allows them to arrest

people, to detain civilians off the street, they have now written in

immunity for the military if they do that. I think that these are the

things, the underpinnings of the power that they are now trying to

establish on the streets, whichever candidate comes in. Are you

surprised how calm low, sor far, most Egyptians have take -- calmly,

so far, most Egyptians have taken this. There is economic problems,

as we heard a moment ago. There is some demonstrations, everything

seems to be relatively peaceful? Yes, I think why we don't have the

result today, I think it is because it is Friday. If, for example, they

were to announce that Shafiq is winning, something could happen.

And I want, I'm cautiously optimistic, I'm not really

optimistic, cautiously optimistic, hoping that what will happen in the

near future is the people should not stop demonstrating, but the

point is to avoid anything that has to do with violence. It has to be

non-violent, resistance process, coming from the people, if we want

to keep the spirit. At the end of the day what is happening now, we

are too much looking at the political factors and forgetting

the economic dimension of the whole process. Egypt is not Tunisia.

Egypt is central to anything which is happening in the region. And

when we speak about the army, we don't speak only about military

force, we speak about economic power in the region. I think ...It

Is plugged into that? Exactly we need the people and the Egyptians,

it is good, what we have seen over the last weeks is people now

committing to resist, but at the same time understanding they should

eschew violence. But the army can push the people to go towards

violence because it can help them. Exactly I think really when you say

that the country is surprisingly calm, I hope it remains calm to an

extent. My sense, our sense, is very much that people are being

prodded towards violence wrecks get a lot of news about arms caches

being found everywhere, the rumour mill is being used to scare and

panic people. The army has played this devisive role for a long time

In the past hour the credit ratings agency, Moody's, has downgraded its

assessment of 15 of the world banks, including Barclays, HSBC and RBS.

What have they been saying? Economics' journalists have had to

sit through half an hour of alphabet spaghetti. The big banks

are the big French banks and Canadian banks and our's. Bark

close down two notches, HSBC down one, and RBS down one. What does it

mean? The reason they are downgrading is the general

situation in capital markets is getting more risky, they have to

judge which banks are affected. The way to judge is it HSBC, a big

global bank, and very rebust in this situation. RBS only held up in

this situation because the Government implicitlys it. Barclays

a bigger hit, exposed to the capital markets and a volatile

situation. Not earning enough from other things. What we know today is

that, it doesn't affect Joe Public on the high street, meetly. When we

wake up tomorrow and look at what the markets are doing and how the

eurozone is reacting, what difference will that make?

general thing happening in the world is the general drift away

from banks and Governments having triple-A ratings. There was one day

where everybody had it, and it was suicidal if you lost it, now

everyone is losing it. The banks were told they need 63 billion

extra Uri rows to survive, we expect that pa -- euros to survive.

As Governments move to support banks throughout the world, what

markets think of them is less important what credit ratings

agency think of them is usually one step behind markets. More on this

That's all tonight, I'm back with more tomorrow. We wanted to leave

you with the Venezuelan conductor who led the Simon Bolivar orchestra

in a housing estate in sterling tonight, as part of celebrations

connected to the Olympics. Good night.

Apology for the loss of subtitles for 41 seconds

More downpours to come over the next 24 hours. Especially wet

tonight across eastern Scotland, the rain slowly easing here, a

gusty night across southern parts of England, blustery throughout the

day on Friday. It stays very, very wet across North West England, here

the Met Office have an amber warning in force. Downpours

continuing through much of the day. A real risk of flooding here.

Further south it looks brighter, there will be sunny spells, but a

few showers. Those showers zipping through quickly on a strong wind.

That wind means even if you get some sunshine t will not feel

particularly warm. Dryer spells across south wells, but in North

Wales again, persistent, at times heavy rain, for Northern Ireland

and south-west Scotland, it looks very wet and that rain could build

up through the day and maybe cause problems. For eastern Scotland it

is very wet tonight. It will turn a bit dryer here during the course of

Friday afternoon. There is more rain to come, particularly over

northern Britain on Saturday. Cloudy with outbreaks of rain

across northern England, Scotland and Northern Ireland. The winds not

as strong on Saturday, but they will still be a feature, perhaps a

little bit dryer again across the south, and maybe even seeing a few