22/02/2013 Newsnight

In the past hour, Britain has lost its triple-A credit rating. Moody's

blames subdued growth prospects and a high and rising debt burden. What

will the Government do now? They have boasted about the rate before.

We will maintain Britain's triple-A credit rating. This credit rating

agency says that Britain's economic credibility will be on the line at

the general election. One of the things I'm very keen on

do is preserving Britain's international credit rating. Also

tonight, 30 years after the dirty by-election that rewrote the rules,

Peter Tatchell and Simon Hughes, face-to-face.

Can fairytales come true? Bradford fans hope football can help heal

their city. It has brought the city together.

It has been really unifying. Everyone is behind the club now to

be at Wembley is just dreams come true. I think there will be crying

on Sunday, I will be, and a lot of other people will be. It is

something beyond our wildest dreams. Whenever the Chancellor, George

Osborne, has faced criticism over his economic policies, and there

has been plenty of that, he has pointed, proudly, to his deficit

reduction programme and the glowing approval of the Credit Rating

Agencies. Not any more he can't. One agency, Moody's, says the weak

economic outlook is likely to extend into the second half of the

decade. What is a ratings agency, and why should we care? A credit

ratings agency is nothing more than a gloryied think-tank that gives

its opinion as to the -- glorified think-tank that gives its opinion

to a country, and it gives a rating depending on healthy it is. The top

rate is triple-A, then it is double-A, all the way down to junk

status. The UK has been downgraded by the triple-A status, by one of

the big one, Standard & Poor and Fitch haven't announced yet, but we

are on nothingive outlook. significant is neglect outlook?

is a forewarning that we will out look may be a downgrading. And

Moody's have done that, down to the second-highest notch. It was like

we did tell you if you didn't get your house in order and we are

acting. They are acting before the budget. Usually they wait until

after the big set piece events. They warned just before the Autumn

Statement that they might do something, and now the budget,

which is March 20th they are acting in advance of that. The words from

the Treasury is "this is a stark reminder of the debt problems

facing our country ". Or is it a stark reminder that George Osborne

isn't doing a good job? I spoke to one senior banker who said George

Osborne has two years to save his job. He staked so much of his

political capital on the triple-A status. The question is, what

happens now, what will the UK Government do. The budget is coming

up, as I was saying. Will they then stick to Plan A, or will they be

freed up, as it were, because they no longer have this Sword of

Damocles hanging over their shoulder. I spoke to Treasury

officials t doesn't looks a if they will move from a Plan A to Plan B.

They are talking about the fact that even though they have been

downgraded, they are downgraded to "stable" status, they won't be

downgrade in the future. That can't be said for the United States or

France. They are stressing the fact that there are major global

problems, the UK has to deal with a very weak eurozone, and potentially

weaker global environment where people aren't necessarily buying UK

goods and services as much as they would do. What is the detail of

Moody's thinking what are they saying? If you look at some of the

wording, it is all CRA, credit- rating agency speak. They talk

about the high and rising debt What that means is there is no

money under the mattress. They talk about the fact that cuts

and the austerity programme that we have seen over the last few years,

and are scheduled to go on until the near end of the decade, will

have a long-term impact on the finances of the country. What will

this do to the financial markets what will it do to the pound?

pound has had a pretty nasty Few months any way. In actual fact, the

markets tend to be a few months ahead of these rating agencies.

Sterling has fallen appreciably against the US dollar, the main

global currency, over the last few months. That is good for exporters,

but it is also a problem because the UK import as lot of products in

other currencies. They will cost more, that will push up inflation.

So we have seen the pound. The interesting thing is what will it

mean to the cost of borrowing for the UK Government. Bond yields,

that is the benchmark for the interest rate on UK Government debt.

Will that change? At the moment we are enjoying very, very

historically low rates of borrowing for the UK Government. We don't

know whether that will change T may do, but for now it is relatively

steady and still reel yiefly cheap. Thank you very much. Let --

Relatively cheap. Thank you very much. Let's get more expert

thinking, Megan Greene is from Maverick Intelligence, and we have

a guest from a think-tank, and Gillian Tett from the financial

times. Is there shock in New York? No. This is a politically

embarrassing thing for George Osborne, given how much of his

reputation, credibility is staked on maintaining the triple-A rating.

The reality is the club of countries downgraded is large and

growing by the day. Here in America, America has already lost its

triple-A rating from one rating agency. As a result the sense of

shock in the markets is pretty low. They have hardly reacted to the

news at all. So if there was ever a good moment to be downgraded it is

probably now, given just how many other countries have already

suffered that fate. Megan Greene, how damaging do you think this is

to George Osborne? I think it is hugely damaging politically. But in

financial terms I don't think this will be very damaging for the UK. I

think largely this downgrade has already been priced in. There were

rumours just a week ago. Does literally nothing change as a

result of this in practical terms? Gilts might go up a little bit.

Markets have priced it in. I think it will change the kalous for the

budget next month. First of all, today we have heard of the release

of the European Commission's forecast for the eurozone which is

dismal, and most of the UK's exports go to the eurozone. That

will impact growth. We have had the announcement about the downgrade,

previously we had thought the UK wouldn't let up on austerity,

because they would be worried about losing their triple-A ratinging.

Now they have lost it perhaps the Government will go ahead, and stop

front-loading austerity so much. I think that would be visible. What

do you think the reason is for this downgrade? Can we blame austerity

or the sluggish behaviour of the eurozone? It is a bit of both, as

always. If you look at the statement, which I only had a brief

glance at, they are talking about the UK economy having strong

fundamentals and being more flexible than a lot of other world

economies to absorb the shocks that we may see from the eurozone. So it

is a bit of both. I agree with Megan, financially it may not be

that big of a dee. But politically, of course, this -- a deal, but

politically, of course, this is strengthening the line of attack

for those who warn against austerity. Gillian Tett, do you

think there will be any material change in policy as a result of

this downgrading. Thinking in particular of the austerity

programme? I do think this downgrading in some ways does give

the Chancellor a little more wiggle room, if you like. As Megan pointed

out, having staked his credibility on maintaining the triple-A rating

and saying we have to pursue austerity at all costs. The fact

that the UK has been downgrade a bit by one of the rating agencies,

in some ways gives himly way, maybe, to step back a bit. I don't think

it is so much -- him leeway to step back a bit. I don't think it is so

much stepping back from Plan A to Plan B, it is stepping back to Plan

A-and-a-half. It is worth pointing out on the global stage, there is

growing signs of a backlash against extreme Austerty. It started in

Japan, the fact that the Japanese Government is pursuing stimulus

rather than just Austerty. And increationly on the continent and

in the UK, do we really want so much austerity that we will kill

off the recovery and make it even harder to get the debt burden

brought down. There is something almost perverse about George

Osborne clinging to central policy. Telling us all the time how

important triple-A is, when it disappears it gives him more

options and wriggle room? It could be positive for the UK's growth as

well. If you think towards the medium and long-term. The UK's

fiscal dynamic is worrisome, it doesn't look better than some of

the eurozone countries. Letting up on austerity could help the growth

model, and the UK could avoid a recession. It means it feeds into a

bigger deficit and higher debt burden going forward, which the UK

will have to deal with eventually. Is the rest of the world looking at

Britain tonight differently. Is anyone thinking they might not pay

off their debts? I still think that the global economic reputation that

Britain enjoys is quite strong. Again I think that's reflected in

Moody's statement. Of course there are huge questions around now about

the UK's ability to stick to this politically as well. As we heard,

there is a growing backlash against austerity, which is coming in from

the continent, and now potentially and politically affecting Britain

as well. For now, the global reputation in the UK is still I

fairly stable. We heard at the start of the programme some vintage

clips of George Osborne saying how important the triple-A credit

rating is. What is he saying tonight? It is a stark reminder of

the debt problems Britain faces, and the clearest possible warning

to anyone who thinks we can run away from dealing with those

problems. Far from weakening our resolve to deal with Britain's

debts. It should redouble our resolve to deliver the plan that

has cut the deficit by 25%, delivered a million jobs, but also

delivered record low interest rates for many families. What do you

think of that? He's right. This is a reminder that the UK has a huge

debt problem, and we will have to deal with it. This also gives him

wiggle room to avoid dealing with it right now. What do you think of

what the Chancellor had to say? has to say that. And I agree. He

has a very good point. The question is, is it possible to sell this at

the doorstep in future. The budget is only a month away. How much of a

rewrite will there be as a result of this? It is unclear at the

moment. I'm sure there are plenty of people inside the Treasury doing

head scratching now it is worth making one point. When George

Osborne came to power, one of the reasons he used such very tough

language, was because there was a widespread concern that the UK

would suffer a big market crisis. Someone like the big bond investors

here in America, was predicting that the UK was sitting on a bed of

nitroglycerin, and about to explode dramatically in the gay way the

Greek bond market exploded. That hasn't happened, and it gives the

Chancellor more wriggle room in the budget. As you heard in the

programme earlier, British bond yields are at rock bottom lows at

the moment, they haven't soared yet. There is a little more flexibility

than people might have thought originally. We have I will luded to

this, -- eluded to this. That the eurozone will carry on declining

for another year and the light at the end of the tunnel gets further

away. Who will Britain export to? That is the big concern. Far and

away most of Britain's exports are going to the eurozone, some are

going to emerging markets. Not nearly as large a percentage of

exports as in other countries like Germany, for example. Britain's

entire plan for returning to sustainable growth is to shift away

from domestic consumption, towards exports. It can't do that when its

biggest export markets are contracting. Thank you to my guests.

30 years ago this Sunday the people of Bermondsey in south London went

to the polls in a by-election. The Labour candidate, Peter Tatchell.

The Liberal candidate, Simon Hughes. Mr Hughes won with a 44% swing. But

it is the campaign which still resonates. It was dirty. Very dirty.

Peter Tatchell's homosexuality was ridiculed by his opponent and some

on his own side, including a rival, real Bermondsey Labour candidate.

The Liberals put out a leaflet saying the election was a

"straight" choice. Tonight, three decades later, Peter Tatchell and

Simon Hughes will be face o face again. Here are some images of the

campaign. The Liberals are in a state of

political his tearia, since Friday's poll revealed them in

second place and closing on Labour. -- hysteria, since Friday's poll

revealed them in second place closing on Labour. Who are you

going to vote for? I don't vote. Why don't you vote? Because I don't

know nothing about politics. snag is that Liberals can also go

on a bit. That's what we often. have something to do, we can't

stand here talking to that lot. Peter Tatchell to do him justice,

has continued to recite statisticss and talk about policies. He remains

slight favourite on Thursday. But he's clearly worried, even

frightened at the campaign which is being waged against him. There has

been a lot of mud-throwing in the campaign, some of it sticks. There

has been an unprecedented campaign to discredit myself and the Labour

Party. We have eight complaints about fabricated stories into the

press complaints council. Some of the mud has obviously stuck.

Peter Tatchell, leaving aside what happened to your accent! What are

you rembering, you are quoted as saying it was one of the darkest

periods of your life, like living through a low-level Civil War. It

sounds awful? I think that the Bermondsey by-election was probably

the dirtiest and most violent election campaign in Britain in the

20th century. Is that his fault? will come on to that in a minute.

It was certainly the most homophobic election campaign in

British his treatment I can remember at the time some people

made the comparison between myself and the villification of Oscar

Wilde, saying this was the most sustained homophobic villification

of any public figure since Oscar Wilde in the late 1890s. That aside,

what I know personally is that I had personally suffered during that

campaign over 100 violent attacks while out canvasing. What did

people do? There were 30 attacks upon my home. More than 30 death

threats. What did they do to you physically? Punched, kicked, spat

at. It was, I had to steel myself to go out on the doorsteps to knock.

Not everyone responded in that way. There were many wonderful, open-

minded people, who supported me, or at least gave me a hearing. But the

scale of hatred and violence, which seemed to coincide with the tabloid

campaign, was truly horrific. I remember an old man, who was a

refugee from Nazi Germany, I remember knocking on his door and

he said he never saw anything like it since he left Germany in the

early 1930s. Thankfully our society has moved on. I would like to think

that, in particular home -- the particular homophobic campaign

against me caused such a public revulsion, that when Chris Smith

the Labour candidate came out the next year got a much more

sympathetic reception. And he didn't get the tabloid stick I got.

Between the end of the campaign and Chris Smith, why weren't you

crushed by this? I felt it was important not to give in. I felt if

I ran away and hid it would give comfort and sucker to all those

people who did those terrible things. Although I was standing on

a broad Labour platform of social justice and equality for all. The

home folkic part that have campaign made me resolve to devote more

energy to fighting for gay rights, so no other person would have to go

through what I went through. Simon Hughes, you have apologised

publicly and privately to Peter Tatchell before for anything you

did wrong. What was it you did wrong? I got caught up in a

campaign that had the attitudes that Peter described. Peter has

always been very fair afterwards. Wrote a book, I haven't had time to

write the book. Wrote the book and made clear the two major targets

were his own then party, the Labour Party, which gave him a really hard

time. We were both paradoxically on the same side, attacking the old

Labour Party in Bermondsey, I would never had won, had the old Labour

Party not run the place as badly as it did, and also the press. Which

was despicable. It is without doubt that we benefited from that. Until

three weeks before the election. Were you just the passive

beneficiaries, or did you do things, which in the cold light of day you

wish you hadn't? In the cold light of day, if I had been in charge and

wanted to rewrite it, we would have had leaflets which wouldn't have

had "it's a straight choice", although that was regularly used in

all by-elections before and afterwards without any sexuality

import. There was one event which Peter referred to when people went

out canvasing with badges making fun of Peter's sexuality, in fact,

I gather they were gay liberal activists and they were told to

take them O there were some things that shouldn't have happened. I'm

clear it was a disgraceful campaign in terms of homophobia. I have

tried, particularly, to make sure that in my time as MP I have done

nothing to set back the cause of gay equality and equality, and I

have worked with Peter and others, and there is time when we were on

the same site. Section 28, Tories bringing in repressive legislation,

and Labour abstaining, it was myself and others on a committee

trying to challenge the Tories. I have tried to keep up that campaign.

And Peter and I were talking now making sure we have a policy to

give asylum to people in 24 country who if they went home would -- in

their country if they went home they would suffer because of their

sexuality. You were candidate about your sexuality later in life. I

spoke to someone that I would be speaking to you both, and they said,

the closeted gay man won, and the open gay man lost. Is it as simple

as that? I think this issue is about more than homosexuality. If

you look at the range of policies I was attacked over. I was described

as extremist because I supported policies that are now mainstream.

National minimum wage, comprehensive equality law, gay

rights, and a negotiated political settlement in Northern Ireland.

These are all mainstream policies. When I advocated them then I was

demonised as extremist. In many different way, not just gay issue,

on a whole range of issues, our society has moved on. That is to

the credit of the British people. To pick up the wider politics, I

like Pete e I come from the radical left of politics. I found myself

active in local politics in Bermondsey before the by-election,

before Peter was even suggested as a candidate, let alone selected.

The battle was on basic issues that mattered to people. It was about

jobs and the Docklands Corporation taking over people's democratic

rights. It was about housing, grim, badly repaired. It was because the

Labour Party had failed in the inner city, which Peter was attacks

from within the Labour Party and trying to change, and I was

attacking from outside as the other radical party, that they were on

the agenda. Most of the election, until Peter was selected three

weeks before, homosexuality was not a key election issue. The other

things were the issues, the development of dockland and housing.

On the policies, just as a politician, you lost a safe Labour

seat. How many was it down to sexuality or other aspects of you

or the politics? I feel very guilty and sad that I lost a safe Labour

seat. I have to take responsibility for that. But the choice for me was

hardly there, because I found that almost at no point during the

campaign was there media reportage of the policies I was fighting. I

was demonised as a Marxist with a militant tendency, I was opposed by

the militant tendency, I didn't support them, they didn't support

me. It was really difficult to get a fair hearing. I think a lot of

the voters did actually not know what I stood for. They had this

caricature. That is why at the beginning of the campaign, the

opinion polls gave me 47% of the vote. Three weeks later it was

completely reversed. I had, I didn't have 47%, Simon did.

interesting thing on the way it was for most of the time it was battle

between old and new Labour, not us. Peter Tatchell and Simon Hughes,

thank you both. From West Yorkshire to Wembley,

thousands of Bradford fans will make the journey this weekend.

Hoping to witness their low-ranking side triumph over a team 71 league

places above them. The official prize, the League Cup. But for

Bradford, it is not just about the silverwear.

It was a tragedy so harrowing and shocking that it has become

interweaved with the identity of both the city of Bradford and its

football club. In 1985, 56 supporters were killed when a fire

engulfed the main stand, fuelled by the accumulated litter below.

Family parade today is a different place. With memories of one of

sport's defining tragedies still very real. On Sunday, the

concluding chapter of a rather astonishing fairytale. Bradford, in

the final of the League Cup at Wembley. This is a story that goes

way beyond football. It is a story of community and tribalism, and an

increasingly fragmented world. The assistance provided by the

Bangladeshi community to traumatised fans in the aftermalt

of the fire, was a profound -- aftermath of the fire, was a

profoundly unifying moment in a city scarred bi-racial tension. You

say people knocked on your door and you opened the door what happened

next? They asked for me. I said what help. They said water or

cloths. People were united and felt sorrow about this thing. But racial

tension has flared since, with running battles between whites and

Asians, just a few hundred yards away from the ground in 2001.

Community leaders have come together to find solutions. But

what does "community" actually mean in a city with such visible ethnic,

religious and racial differences. What role does football have to

play? Every Saturday if you come round on a Saturday you will see

Bradford City fans, walking down the street, saying hello. There is

no an no sirity amongst the people that come here. There is not a

perfect solution to solving any of the issues. But football is a way

of engaging. A female fan wore the hijab to a match against Aston

Villa in the semifinal of the League Cup in January. Many are

describing the cup run Asim bowlic of a newly-united city. It is an

alluring narrative. But are things quite so simple? The proportion of

people from these different backgrounds vr suss the proportion

in the ground is -- versus the proportion in the grounds is not

the same. You want to see more people from different backgrounds

in there. This football club, it is an English football club with her

ridge, but it should be for the whole community no matter where you

come from. No matter where you come from, Bradford City should be

considered yours. Before the influx of Bangladeshis and Pakistanis in

the 1950s and on words, central and eastern Europeans were already in

Bradford. In these streets a few yards away from Valley Parade,

Poles, Ukrainians were once central to the city's industrialisation,

and many of their descentants will be at Wembley on Sunday. This area

we are standing in now was probably built by wealthy business people,

who came pleeing the Jewish pogroms -- fleeing the Jewish pogroms in

the 19th sent treatment they carry oud their work, built mills, traded

in wool and all that sort of thing. All of the various communities

rallied around the club after the fire in 1985. Representations had

been made to Bradford City, warning of the dangers posed by the litter

under the stand. But the city didn't want to turn against the

club. Bradford had already lost one of its two clubs, Bradford Park

Avenue, to liquidation in 1974. They didn't want to lose another.

think that a football club like Bradford City, there is a certain

vulnerability to it. It is important that Bradford City always

has a football club in the league. We lost one in the 1970s. It is an

important thing to have that club there. That does sometimes lead

people to protect it in that sense, as you problems, to say let's leave

it and keep it as it is. The meaning of football has

undergone profound changes in recent years. Particularly in the

top flight. Clubs like Manchester United and Chelsea are baubles of

global capitalism. But despite the transformation in the economics of

modern football, its meaning amongst fans is still recoginsable.

It is about identity, and shared experiences.

Bradford City has endured a rollercoaster ride in recent years,

suffering repeated relegation and near bankruptcy.

But more than 30,000 fans will make the pilgrimage to Wembley this

weekend, many of them Asians and eastern Europeans. They have

probably changed their red and white and blue and yellow colours

to the amber and claret. We will have people watching in the youth

club down here on the big screen. In the centre we will be watching

the game. We will be making sure we are behind Bradford. The last time

they won a trophy was in 1911, that was when they won the last trophy.

I will be crying on Sunday a lot of people will be, it is something

beyond our wildest dreams. It would be spurious to suppose a

glorified kick about at Wembley could solve the complex problems of

social integration. But perhaps it provides the sign post. At its best

football shines a light on the connections that bind us together,

in a fragmented world. For a club and a city that has endured tragedy

and conflict, that could almost be revolutionary.

We will have a look at tomorrow's front pages then Review.

Do join us for a feast of film, ahead of the Oscars on Sunday with

our guests. We were talking about some stand-out films and heart-

breaking performances and the ones the academy has left out. Join us

A grim week for one of the BBC's most important programmes, Richard

Bryers, died at the weekend, and it is said the animator of the show

has also died, he was 91 he won an Academy Award and a BAFTA, he will

be most remembered for the dog and the pink cat and the birds who are

laughing. They are not laughing tonight. Rhubarb was reeling with

laughter, together with the fish wearing moon fish bones. I do