26/09/2012 Newsnight

Tonight, is the deal that was supposed to save the eurozone

falling apart? With riots on streets in Madrid,

the Spanish Prime Minister says only market pressure can make him

take a bail out. Tonight thousands of ordinary Spaniards are once

again out on the streets of Madrid, ahead of tomorrow's austerity

budget. It could be the biggest economic and political test facing

the country since democracy was restored.

The biggest beast in the market for Spanish debt tells us how long the

country has got before it's forced into a boilout.

Newsnight investigates the treatment of hotel workers in the

heart of London. We are fighting for already three months, and still

it is not ending. That is ridiculous. I'm doing a really good

job, I want money for my job. Tonight, David Cameron promises to

hunt down Mubarak's missing millions held in Britain.

And at the Lib Dem conference. Admitting you can't, in fact, vote

blue, and go green, well, of course you can't. To make blue go green

you have to add yellow. Nick Clegg turns stand-up comedian, how long

will his party be laughing. Did the Lib Dems in Brighton rock our panel

of political experts. Good evening. In Madrid, clashes

between riot police and protestors, in Catalonia, snap elections

designed to be an effective referendum on the region's

independence. In Athens, a general strike. This was supposed to be the

month that the eurocrisis would be solved. But with the markets once

again in turmoil, Britain, once again, sees this crucial market, on

our doorstep, faced with the threat of disintegration. We will hear the

Spanish Government's latest austerity plan tomorrow. We're in

Madrid. Joe, what's happening? Good evening,

and welcome to just about 100ms in front of the Spanish parliament.

You cannot see it because there are about five rows of riot trucks

blocking the way. They are trying to prevent around 1,000 or so

protestors from getting anywhere near the build with the

announcement tomorrow. The young people here are incan Desant with

rage about the austerity they have had to endure and will continue to

be endured in the coming two years. Tomorrow that budget will arrive.

Tomorrow Prime Minister Mariano Rajoy said he would indeed go for a

bail out, if the cost of borrowing remained unsustainably high. It is

still unsustainably high, it hit 6% today. The markets aren't exactly

buoyed by the sight of violence on the streets of Madrid.

Spain is an angry place these days, its young people, hot blooded at

the best of times, are now boiling with fury. They are struggling to

find the future that was promised them. Half of them have no job, and

the other half are being asked to work longer and for less.

Over the last few weeks the cost of borrowing for Spain has been

falling in the wake of a deal with the European Central Bank. But that

has meant very little to ordinary Spaniards who have seen their cost

of living and their living standards plummet. So with

tomorrow's budget looming and cuts also looming, the anger that you

can tense on the streets in Madrid is bound to grow rather than wane.

That was in evidence today in Bilbao, as police used rubber

bullets against parts of the crowd. While in Madrid, some protestors

were baton charged. Tomorrow the Spanish Prime Minister, Mariano

Rajoy, who has already raised direct and indirect taxes, is

expected to slash spending further, with the health services and

education in the firing line. Not having the possibility of

having a future, like finding work is impossible here right now.

vast majority of people on the streets tonight are calm and

peaceful. Most are middle-class and well educated. Social, rather than

trade union networks, are the driving forces behind the protests

this time of the We say that the democracy is kidnapped, it is

kidnapped because the people inside that building, they don't rule any

more. They don't have the power to rule, to change what's happening to

us. Things are ruled in Brussels. Ironically, it was a meeting in

Helsinki, rather than in Brussels that has driven Spanish borrowing

costs back over 6% today. The eurozone creditor nation, led by

Germany, appear to be unpicking a deal from June, about banking debt

and other debt. Specifically to help Ireland. This decision from

Spain and other counts effects us a lot more. The real problem for us

now, one of the main problems is financing. The protests are not

going to affect directly financing, unless people start to think we

have not got things under control. Spain is a young democracy, these

protests would never have been tolerated by Franco. But with

rampent debts, joblessness, and little prospects of growth, one

gets the sense that Spain is facing its biggest and economic threat,

since democracy was restored. Joining me down the line from

Madrid is Miguel-Anxo Murado a writer and journalist, and from

California, Mohamed El-Erian, CEO of Pimco, the world's largest bond

investor, and a man with more than a trillion dollars invested in the

markets. Mr Murado, we are expecting Prime Minister Rajoy to

come up with some kind of new austerity package tomorrow, on top

of the 65 billion larged pledged, it is crunch time, isn't it? Yes,

of course, it will be another austerity budget, and actually not

just for next year, it will be for two years, as the mandate by

Brussels. Spain, at the end of this process, has to heed a very -- hit

a very, very difficult target, a deficit target of 3%. We started

this year at 8.9%, so just imagine how difficult it is, and in fact,

the problem is that we just learned today that Spain will not meet the

deficit target for this year. We will be actually wide of the mark,

maybe 7% deficit, for example. So it's been extremely difficult

indeed. And Mr El-Erian in California, Mr

Rogge, the Prime Minister, said today, if it gets too dear

borrowing for Spain on the markets, he will go for a bail out. How long

do you think it is before he has to do that. Before he's forced by your

industry to just basically go, cap in hand, and ask for the money?

should come now, he should go to the ECB now, and ask for it. For

the simple reason that already the interest rates are too high. And

it's just not just the interest rate on Government debt, it is the

fact that capital continues to leave Spain, the private economy

continues to implode, and oxygen is sucked out of all the job creating

machines. So he should apply, he should get support, and hopefully

he can crowd back in private capital. What if he doesn't.

Anybody who has had any contact with the Spanish political elite

knows they are telling themselves, they may not even need to ask. That

the European Central Bank's pledge to buy debt may have been enough?

Well, the pledge certainly has done a lot. In the sense that it has

lowered borrowing costs by almost 1.5%. But words are not enough. You

need actions. So, the borrowing rate will go back to 7% pretty

quickly if the Prime Minister doesn't apply for the money from

the ECB. The ECB will not disperse without an application from Spain,

and a "light" set of policy conditionality. Behind you we can

see scenes of relative calm, compared to last night, we can hear

the protestors chanting too. These are not just the usual suspects,

are they? This is a wide cross section of people we saw last night,

can the Spanish people take what is about to be thrown at them? This is

actually a hardcore group of protestors, probably representative

of a sector of the Spanish youth, it has to be remembered that there

is 50% unemployment among the young people. But, they probably don't

represent the wider Spanish public, which also resents the cutbacks and

the austerity. But demonstrates in a different way, more by sector,

say healthcare worker, teachers, they are already protesting in if

their own way. Well, they are not likely to take it very well, this

new as youturity package. As for what you were mentioning, the bail

out, well the reason why the Spanish Government is not making

the move, is, well, partly for political reasons, because that is

an original election ahead, and Mr Rajoy fears that he could lose that

regional election, it is a key election. If he demands, or asks

the bail out before that. There is the genuine belief that this could

be bad for the Spanish economy, if before that it is not solved the

way the bail out will work. If the bail out goes to the debt, certain

problems Spain has will actually become worse. What is your guess of

what they are doing to introduce tomorrow 0, a soft, papering over -

- is it a soft, papering over the cracks type package, will it please

the Germans, who want this to be a hard package? There is a police

charge going on now, I couldn't hear your question! What is the

nature of the bail out, we think Rajoy is putting to the parliament?

Is it a fig leaf or serious extra measures? Mr Rajoy, actually what

he wants is the bail out would be more or less along the lines that

were discussed by Mario Draghi recently. Nothing new? Nothing

particularly new in term of extra measures? Not really. You mean the

budget? ( loud bangs) Can you tell us the source of explosions we are

hearing gr your microphone? It is rubber -- We are hearing from your

microphone? It is rubber bullets, the police are charging right now

very close to where we are. (loud bangs) I understood you were asking

about the bail out or the budget. It seems like discussing the

political policy of the political economy might be difficult in the

situation you are in. I will go to Mr El-Erian for a moment. The

markets are signal, you know the price of those bonds signals, part

of that price, signals the is arek of a euro break-up, it is -- the

risk of a euro break-up, it is your job to put a price on that, what

chance to you give Europe staying 18 members in a year's time? In a

year's time there is a pretty high probability that the euro still

exists and the eurozone still exists, I'm less sure it will be 17

member countries. What your cameras are showing right now is an amount

of rejection by the population. Were you to go to Greece, there the

rejection is complete by the population, it is economic,

financial, social and political. I do not see if you extend a year's

time how Greece remains in the eurozone, because everything we

have just talked about, multiply that by a million, and you have a

very difficult situation in Greece itself. I'm not sure the population

there will tolerate just more of the same, because it hasn't got

them anything, nor does it promise them a loyalty at the end of the

tunnel. Mohamed El-Erian sitting in the HQ

of a fund controlling a trillion dollars, thank you, and Miguel-Anxo

Murado, in the middle of what looks increasingly like a developing riot,

stay safe, thank you very much gentlemen. Now, low pay, long hours,

hard physical work, that's what you might expect to find in the hotel

cleaning sector. It is an industry, in London at least, now, almost

entirely staffed by migrant labour. In 2009, Newsnight went undercover

to expose exploitation at one of the most expensive hotels in the

capital. That investigation ultimately led to compensation for

13 workers involved. This summer, with rooms packed out for the

Olympics, has the industry itself cleaned up the act? There is some

strong language in this, the first of a two part report on conditions

into the hotel industry, and how those conditions affect east

European and British workers. This report contains strong

language. It was the summer we will never

forget, a six-week party, all watched by a million visitors from

around the world. For London's top hotels, business was booming. Room

prices had never been so high. Everybody had to smile, and you

have toe, you know, welcome the -- to, you know, welcome the guests.

We have to show them, everything is perfect. But amid all the Olympic

euphoria, what about a different kind of visitor? The person hidden

away in the background, keeping the whole operation going? It was hard,

really hard, it is not like we can have excitement because it is

Olympic time, for us it was a really hard job. These are the

staff who clean the carpets, wipe the bathrooms and make the beds.

This is the story of their summer, of outsourcing, low pay, and claims

of exploitation, of new immigrants and disgruntled British workers.

had had a phone call to say that if the girls didn't like the way that

the company was running it now, that they could, can I swear? They

could fuck off! And not come back, because she would have a coachful,

or a mini-bus full of other people to take her place, to take

everyone's place. The Hilton Waldorf is one of

London's iconic five-star hotels, it was home to VIPs like Michael

Phelps this summer p and the main base for the Chinese Olympic

delegation. A package here, with top tickets to the athletics and

dinner, cost �3,000 a person over the games. This summer was also an

unforgettable one for many of the Polish cleaners working here. Just

two month before the Opening Ceremony, the hotel outsourced its

room cleaning contract, dozens of jobs were transferred across to a

new company, Jani-King, one of the largest in the contract cleaning

business. That transfer has caused serious anger, among many of the

cleaners at the Hilton Waldorf. Newsnight has spoken to five people

working there, and seen a letter signed by another 25. They say they

have been left worried for their jobs and out of pocket. Some say

they have been left with only a few hundred pounds to pay the bills

each month. I was so happy that I was working for the Hilton contract,

because I got good money, no problems, no nothing. Anetta

followed her husband to the UK in 2007, she has spent more than two

years at the hotel. Before that she was a primary school teacher near

Warsaw. She says the problems started when the first wage slips

arrived. First the agency changed the way cleaners are paid. Instead

of getting wages at the end of the month, they suddenly had to wait up

to seven weeks to get their full pay. This wasn't a one-off, it was

happening every month, leaving some cleaners hundreds of pounds out of

pocket. When I opened my payslip was really sur pryed, because I was

expecting �1,400, and I received only �200, so I was asking, but I

work, that was my hours, it was almost 200 hours on that, because

it was the Olympic time. And that was his answer, you are not allowed

the money now. You know, I have to pay my rent, it is not possible to

manage with �200. Jani-King says it did offer some employees short-term

loans to cover a gap in their wages. The workers, though, say this was

just a temporary fix, and the next month they faced the same problem

of the I was sitting in the office and I'm crying, because you know, I

call them again and again and again. Ivana has been here six years, she

sends the money here she earns back to her husband and two small

children in pole land. We are fighting three month, and -- Poland.

We are fighting three months and it is not fair, I want money for my

job, I do a good job. The problems continue, payslips show cuts in

hourly wages from one month to the next. Just before the Olympics, all

the room cleaners were told to sign this confidential letter, under old

Hilton management, they were expected to clean two rooms an hour,

now that rate was increase today three. In threatening language, the

letter said if the new targets were not met, disciplinary action could

follow. That hotel is five-star hotel, 20 minutes to clean the room,

never, no-one can do it. Just maybe you can make the bed, and clean the

bathroom, a little bit. And that's The cleaners say staff were

pressured to skip breaks and work overtime for no extra pay to meet

the new targets. But, this is about more than a few missed payments. It

is about a whole business model. Hotels are now routinely

contracting out tasks, like room cleaning to outside agencies. Done

correctly, companies in low-wage sectors say outsourcing can cut

costs, bring in specialist staff, and in the end, increase the

quality of the service. There are laws meant to protect working

conditions when this happens. In simple terp, outsourcing should not

be -- terms, outsourcing should not be used to change anything in the

terms of the cleaners' contract, including the wages they are paid.

This man represents clients from Wayne Rooney to Andy Coulson in the

working sector. In the low pay sector it appears individual don't

know their rights. In a case of foreign workers, there may be a

problem with English. Other there may be an unwillingness to confront

authority. In the coalition agreement, the Government said the

labour market should be competitive but fair. The danger is, critics

say, that aggressive outsourcing, in low-pay sector, like hotel

cleaning, can just encourage contractors to drive down wages and

working conditions. The majority of hotels in Crawley,

you will find near enough every housekeeper is European. But, could

outsource anything this way, also be pricing British work --

outsourcing in this way, be pricing British workers out of markets. A

veteran of hotel cleaning, she says she has seen wages and conditions

deteriorate. It has changed. They bring in a load of,am I allowed to

say, Bulgarian, Rumanian, who will work for that kind of money. They

will work from morning to night. Some of them don't even go home.

They say stay in the hotel. Stella was working until May last

year, when her hotel outsourced its cleaning contract, again, to Jani-

King. She was sacked. The firm says for misconduct, she says to make

way for younger, cheaper, eastern European workers. In the House of

Commons, last year, Stella's local MP stood up and used parliamentary

privilege to link her dismissal, and that of a colleague, to their

nationality. Mr Speak e recently I have been dealing with a case on

behalf of two constituents who were dismissed from their job with a

commercial cleaning firm called Jani-King, allegedly for being

British. Can we have consideration for a debate on discrimination

against British workers in this country. But Mr Smith's argument

isn't that firms like Jani-King are raceist, more than the terms and

conditions they now offer make the jobs attractive only to new migrant

workers. You can see it is a pretty cynical wage model, that some

companies are using. In that they not only are paying the lowest

possible wage, and therefore, attracting people coming into the

country often from economies where unemployment is even higher. But

also what they are doing is they are turning over staff very quickly.

So that they are constantly getting people at an entry level, again

they can only pay the absolute minimum wage that they feel they

can get away with. The answer, he says, is not more

regulation. But better enforcement of the laws meant to protect low-

paid workers like hotel cleaner. For Stella, though, the job hunt

continues. I feel bitter, I feel bitter, because I have been treated

badly by them. I have had it firsthand, my experience, what they

are like, what they want to do. They do want to get British people

out. And get more Bulgarians in. Because it is cheap labour. They

don't argue. But, there are signs that's

changing. Many of the eastern European workers, who arrived

almost a decade ago, now speak the language and know their rights. The

cleaners at the Waldorf, are certainly not afraid to confront

authority. Earlier this month, though, Ivana

turned up for work and was told to go straight back home, she had been

dismissed. The other senior cleaning staff have been told they

must now go through a selection process to keep their jobs. I feel

they will sack me. Because I'm, all of us are expensive for them. So,

they are going to just wait for that moment when they can sack us

from the work. And we know that, one day that will come. We are just

waiting for that. Many low-paid British workers were

making exactly the same complaint when the UK opened its doors to

Eastern Europe. Now it's these Polish workers who feel threatened,

exploited, worried, and above all, vulnerable.

In a statement, Jani-King has said it has taken all legal measures

with the contract at the hotel. It claims all cleaners will be trained

to work more efficiently, and denies any staff will automatically

be made redundant. It has apologised for any inconvenience

caused with regard to their salaries. Hilton said that

outsourcing is one part of its business model. And all its

suppliers must comply with existing laws and conditions of employment.

It says Jani-King will now review staffing at the hotel, but, the

agency remains a key supplier. In the second part of our series,

Jim Reid investigates the loopholes employment agencies use to hire

migrant workers from Romania and Bulgaria. Just a copy of the

contract for my records. Can you bring records downstairs. That's

not a contract. That is a provision of the service. But just to have it

for my records. You can't have that one darling. You will be pleased to

know, later in the programme, we are trying to go back to Madrid, on

the developing situation there. You heart the start of a rub bet bullet

fussilade in the middle of the interview. Earlier David Cameron

finished speaking to the United Nations General Assembly in New

York. He flayed the UN for the inaction over Syria, saying the

blood of slaughtered children there was a stain on the UN's reputation.

And during a spirited defence of the Arab Spring, he announced a new

initiative in London to trace the millions of dollars Egypt's

President, Hosni Mubarak, is said to have salted away here. While on

the subject of stolen assets, we have a responsibility to help these

countries get back the stolen assets that are rightly their's.

Just as we have returned billions of dollars of assets to Libya. It

is simply not good enough that the Egyptian people continue to be

denied these assets, long after Mubarak has gone. And today I'm

announcing a new British task force to work with the Egyptian

Government, to gather evidence to trace assets, to work to change EU

law, and to pursue the legal cases that will return this stolen money

to the rightful owner, the Egyptian people. You have been investigating

the story, what is the background to this? Immediately after the

Egyptian revolution in February of last year, Britain promised to do

all it could to try to trace the billions of dollars suspected to

have been stolen by the old regime, and hidden abroad. But very little

action followed, about �85 million worth of suspected asset was frozen

in London. That was already 40 days after the revolution. And a BBC

News night investigation, and BBC Arabic investigation a couple of

weeks ago, found some really obvious assets that had apparently

been completely overlooked by the UK authority. For example, a very

substantial house, just off Knightsbridge, the main London gom

of Gamal Mubarak, also a company very associated closely with him.

This is what an expert in asset recovery had to tell you about that.

There you are, you have an active business through which he was

trading. You might have thought that the company would have been

added to the list of entities, affected by the sanctions, that has

happened. Why do we think the British Government has moved now?

What sources have said is removing an irritant in anglo-Egyptian

relations. There has been a meeting between David Cameron and Prime

Minister Morsit has been an irritant for a long time. There was

legal action launched against the UK back in the spring. It is hard

to believe, as part of our investigation, the Foreign Office

said to us they thought Britain was already doing all it could. It is

quite hard to believe this apparent change of heart isn't part of the

really big impact that the British investigation, our investigation,

particularly the Arabic version, had in Egypt, I think it was really

embarrassing. What is likely to happen, what is the task force,

what will they do on the morning they start? Exactly, we still don't

know. The Foreign Office say details are partly to be worked out.

Really I think it is about some kind of co-ordination between all

the different agencies that are dealing with this. We are talking

about the police, the Treasury, the Home Office and the Foreign Office,

it is the multipolicity of organisations, and lack of co-

operation, that has been so frustrating. I think the problem is

the proof will only come in the question of what further assets

actually are frozen, so far Britain has set the legal barrier, the

burdenen of proof, very high. We don't yet know whether that will

change. Thank you very much. Today of the final day of the Lib

Dem conference. Nick Clegg made a speech lasting 38 minutes, in wit

three most used words were "country", "people", and for some

reason, "half" as in half time or wait for the second half of the

Government. Allegra Stratton had to be draged kicking and screaming

away from this riveting experience, with half time analysis in a moment.

First, the highlights. For 30 month Lib Dem foot soldiers have endured

cruel elements, looking out from inside Government they have been

pitched to the right and left, and unable to fix on the horizon.

Although they can't see how, their loader today told them where he

wants them to get. From the middle of this parliament and the middle

of Government, by 2015's general election, Nick Clegg wants his

party firmly in the middle of the voters' view. The trouble with this

being in the middle thing, is illustrated by my very crude

profiling. Apologies for doubtless offence about to be caused. He is a

mate of Gordon Brown's on the left. She's on left and proud of it.

I'm not sure but wouldn't be surprised. He's Clegg's PPS, he

will say whatever is in the speech. We are wileing away time waiting

for a speech so important, that Nick Clegg apologised for an error

seven days ago, so people would concentrate on the speech and not

mutter on it. He wants to drag them to place philosophically where they

are not now electorally. We are an hour from when Nick Clegg tells

them they want to re-think their image. This is Joe Grimmand, he was

on the centre left. That is how most people see him. There is David

Lloyd George, Nick Clegg would get some sucker from him, and that is

who Clegg often quotes. Another one, Asquith, this is a help hadful

phrase, "neither to the left nor to the right, but keep straight on".

We found a Cleggite, what is going on? I take all sorts of abuse from

friends and colleagues, because everybody is tellsing me they are -

- telling me they are finished. I don't think they are. There is a

problem, if you have suits in the north but saying you are a party of

the centre and in coalition with the Government, you are handing all

the seats in the north back to the Labour Party? When people Israelise

what the liberal contribution to the economy has been, all the

people reduced from paying tax, I think, the students are better off.

He wants to shake his hand, others don't. There are constituents

outside the south-east where Labour is strengthened. A dash for the

centre ground has stopped that. A gamble that it mitochondrial not.

The taxing wealth and unleashing income might help tackle the

spectrum. This man doesn't quite accept the definition. You are

centre right not centre left. are a liberal progressive party.

better go, or I will end up on the stage.

The Deputy Prime Minister, Nick Clegg.

Conference, I tell you this, the choice between the party we were,

and the party we are becoming is a false one. The past is gone and it

isn't come back. If voter want a party of opposition, a stop the

world I want to get off party, they have got plenty of options. But we

are not one of them. APPLAUSE. Le

There is a better, -- there is a better, more meaningful future

waiting for you, not as a third party, but one of three parties of

Government. He turned deficit reduction,

opposition to which has driven Liberal Democrats into labour's

arms, into an argument of social justice. So to those who ask,

incredulously, what we, the Liberal Democrats, are doing cutting public

spending, I simply say this, who suffers most when Governments go

bust. It would be the poor, the old, the infirm, those with the least to

fall back on. And caricatures for his opponents, both ace lunatic

fringes. The -- both as lunatic fringes. The truth is only the

Liberal Democrats can be trusted on the economy and relied upon to

deliver a fairer society too. My experience, if you are being

attacked by Liam Fox from one side, and Ed Balls on the other, you are

in the right place, by the way. A speech placing him firmly in the

liberal tradition, a proud intellectual tradition, the problem

is turning into votes, enough votes in the right part of the country,

votes that are right at the front of the coalition cuts. If the

economy doesn't turned around, it is dark times ahead for the Lib

Dems? The crucial part of going into Government was to sort out the

economic mess. It is really important that we are able to show,

as we will be able to in 2015, that we have turned the corner and got

the economy growing again, and we have made a massive step in

reducing the huge levels of borrowing that we inherited from

labour last time round. The economy coming right, and then

the next bit too, strategists think the way to realign politics will

take a generation. Economic recovery will not be swift either.

The problem for Lib Dem MPs is they don't have that long.

What were they trying to do both there and throughout the week?

have a really interesting argument, which we talked about on the

programme bf. Wealth taxes rather than income -- before. Wealth tax

rather than income taxes. It is fascinating philosophy and politics.

They have this difficulty where the people who are their voters right

now are turned off already. And to get them back, even though the

argument might make sense to some voters on the left, they are

already hurt and in anguish and won't come back. They are trying to

make this argument which is they have green policies and education

policies, and they have this income tax, wealth tax switch. But they

have offended and hurt so many people it is impossible to see how

their numbers will add up. For me it is a weird mismatch of

interesting philosophy and policy. And then there is this terrible

numbers for them. You have to give them credit for having stuff you

can get your teeth into. Everyone is laughing, but, equally, it is

just fiendish on the doorstep. it riveting for you as a

correspondent? You know, we have some light relief, that no-one can

explain. But "Liberal Democrats for Romney"! Was it riveting, party

conferences are a dying animal, and this was an example of an animal

twitching. Anything else? I have a present for you, it cost 35p at the

start of the week by the end it was �5. I thot you could write another

book about it. It is -- It is a Vince Cable, "I am a pleb" badge.

The on going ridiculous row about Andrew Mitchell of there, and lots

of correspondents leaving to go to London. Joining me now are Baroness

Lara Morgan, Tony Blair's right hand in Downing Street, the

journalist, Miranda Green, who used to advise the Liberal Democrats,

and Sean Worthh, who until downwas special adviser to David Cameron.

Mirand -- Until June was special adviser to David Cameron. Miranda,

do you think it went well? thought he did well in the

circumstances. It was said that they have they were overshadowed by

the Mitchell plebgate affair. I thought this week was a circling of

the wagon, the polls are desperate for Clegg and party. It was an

inward looking week. The speeched today, some of the imagery was

amazing, "we the Lib Dems are the burning building", we are engaged

in national renewal and party renewal. From raised earth position,

is basically what he was saying. I think it was a very serious speech

about the predicament the party and the country is in. This theme of

resilience being a vir due, I think that is quite a good mess -- virtue,

I think this is a good message for him. Tough give him credit for

still being standing. He looked as if he had made some head way. We

had head bangers being described on the platform from coalition

partners. Having the aphrodisiac effect on sacking workers. We can

imagine how it is going down on the membership, on the leadership and

the machine how will it play? you look at Clegg's speech, I

talked to a he had lo of delegates at my first--- to a lot of

delegates at my first ever conference. There was Tory bashing,

and it was in good tumour, there was a joke about Boris and Dave, a

few gags. I thought he gave a very workman-like performance, in term

of the coalition partner, he can't be seen to be having a go at the

partners in Government. It is smack in the middle of a fixed term

parliament, effective low, it will just communicate fractious --

effectively, it will communicate fractious divisions in a Government

that isn't getting on with the tough job that he actually is

talking about. There must absence, that Conservatives watching that

live on rolling news -- a sense that Conservatives watching that

live on rolling news, that we are feeling the pain and look at them,

is there an element of Tories locking at them and saying, at

least we're not the Lib Dems? thought Clegg did a speech that

showed signs of real improvement for the liberals. He stops talking

about weird stuff like the alternative vote and constitutional

reform, and all these strange lrd issues. -- Lib Dem issues. He talks

about growth, schools, jobs, he had a very tough message for Labour.

That was the key thing for me. He clearly had to communicate

differenciation from the Tories. Ownership of some key policy areas,

and start moving on to issues that people care about. Ten out of ten

for substance, delivery as I said not setting the world on fire.

Sally Morgan, there is a huge sofa in Ed Miliband's office, is he

tonight cowering behind it after watching the speech? I couldn't

have thought so, it is indicative that you came to it so late tonight,

and it didn't lead the news. That is a pretty big problem, I thought

what was interesting about the speech is it was the Deputy Prime

Minister speaking to the country. I think it was what he should have

done. It was correct. He didn't tickle the tummies in the hall very

much, which is what Vince Cable and others were doing this week. He was

trying to talk to the country, but I don't think they are listening.

That is the real problem. It is a risky strategy for Labour to go on

hoping for two-and-a-half years that the country goes on not

listening, and despising Clegg over the issue of the student fees and

the turn around. It wouldn't take much for, the 10% lead Labour has

got, to drop back and for them to turn up again. Are Labour aware of

it? I think the Labour Party will be mad if they sit around and are

complacent. I don't think they are complacent and I don't think think

people are stupid. I can remember being involved with the Labour

Party when we have had large leads before elections and not won

general elections. People have long enough memories to realise you

don't win elections by watching others fail. There is a very clear

subtext to the whole speech as well. Which is let's differentiate

ourselves from Tories in fairness and labour on the economy. There

are nasty characters and we choose we can personify that. Fans of The

Thick Of It, will identify these as The Twiners, how long can they get

away with the inbetweeners strategy? It was very interesting

also this announcement that Paddy Ashdown, my old boss, would come

back and fight the next election. Or be in charge of fighting the

next election. What does that tell us about where they think it is

going to be fought? This is the point we made many times here,

which is the Lib Dems can't go back to the territory they fought on

before. They can't go back to the same old messages. But, pady is a

very respected fighter, he will give the party half of the fight.

They do need to think very, very hard about this position, they

can't divorce themselves from their coalition partners going into the

fight. On the other hand they need to look distinctive.

Differenceation is one of the worst words I have heard it is worse than

maths. They have to talk ahead in a way people will understand.

For the Conservatives, how will this play. The fill love kal --

philosophical distance, is this a new tone, is Clegg 2.0 what we are

going to see for two years? If it is, it will benefit them. Two

things struck me, one of the fact that they ignored the strange Lib

Dem obsessions and they focused on stuff that really matters to people.

The second was, as I said earlier, I didn't think the speech set the

world on fire. But where it did get good was where he got passionate

and angry. He is communicating that he is standing up on key issues,

that will be their strategy for the longer term in the parliament. What

was key to me, just coming back to the Labour position, is he really

had a go at Labour on the economy. But very careful not to say

Miliband, he attacked Balls, he has to keep the court open for the

prospects. Is Balls quaking in his boots? I wouldn't say, it is part

for Labour to start putting forward a stronger alternative next week.

Plenty more where that came from in the party conference season. Right,

Before we go our team in Madrid said after the police shot at the

crowd with rubber bullets the crowd dispered. We play out with the

voice of Andy William, who died today at the age of 84. Whose

unmistakable sound once cauldron nald Regan to call him a national

treasure sure. This is why they call it easy listening.

# I need you baby # You want a lonely nationwide

# I love you baby # Trust in me when I say

# Oh pretty baby # Don't bring me down I pray

# Oh pretty babe # Now that I found you

# Oh pretty baby # Trust in me within I say

Good evening, we have had some very disturbed weather. Severe flooding,

nasty storms across England and Wales. Continued through the

evening overnight as well. Still with us first thing across southern

and eastern areas, local flooding in that. Thursday is looking like a

dryer and brighter day. Morning mist and fog for the rush hour.

Scattered showers in the afternoon. It is not all all together dryer

picture, it is dryer than it has been. Nasty showers through the

evening and overnight, but clearly away first thing in the morning.

The mist and fog clears away. More sunshine and a scattering of

showers. It looks dry compare with the south west and also across

Wales with just a scattering of showers here and there. Fairly

gentle breeze, but coming down from the North West, not a particularly

warm direction. There are showers over the saturated ground of

northern England. Not great news, and through the Midland flood

warnings as well. A number in force. For Northern Ireland and the

western Scotland, cloud overhead. The eastern side of Scotland seeing

the best of a sunny weather. What about Friday, we will see a band of

cloud and rain initial low, and sunshine and showers, a and brisk

winds, gales later, they will blow for cloud in across the southern

part of the country. Not as windy on Friday, but a few showers around.