16/12/2015 Newsnight

Tonight, six months after Newsnight revealed Yemeni civilians could have

been killed by British weapons sold to Saudi Arabia -

the UK Government faces possible legal action.

The UK has a very clear legal regime.

That legal regime says the UK won't provide licenses for arms

exports if there is a clear risk there may be violations

Newsnight has the full story, including how the Foreign

Secretary's interview on this programme could form

And we'll speak to the former Business Secretary,

who, while in government tried to stop British weapons

The US Federal Reserve hikes interests for the first time

We'll ask whether it could be too soon for the global economy.

Our series on the faces of the migrant crisis continues.

We find the Syrian father and son tripped up by

When you watch this, how do you feel? Of course, I am very angry. I

feel very angry. There is a very real prospect

of the Government being taken to court over sales of weapons

to Saudi Arabia which is leading a coalition in Yemen against rebel

fighters in a conflict which has cost almost 6,000 lives,

among them many civilians. The issue is whether these weapons,

in particular laser guided bombs, have been involved in civilian

deaths, a question that arose in a Newsnight interview

with the Foreign Secretary. Now Lawyers for Campaign Against

the Arms Trade says the UK Government is in breach of UK,

European and International law. A separate legal opinion,

prepared for Amnesty International, and seen by Newsnight,

says the UK is in breach of its own legislation,

including the Arms Trade Treaty, You may find some images

in this film distressing. Yemen has been under almost constant

bombardment since March. A coalition led by Saudi Arabia has

been trying to defeat a rebel army. Both sides have been

accused of war crimes. Now lawyers say Britain could be

breaking the law for selling the bombs that the

Saudis are dropping. On the night of July 24th,

coalition warplanes repeatedly struck a residential compound

in the port city of Mokha. At least 65 civilians were killed,

according to human rights watch, who collected this footage

and visited the site The group says the compound

was merely a column to away The strike on Mokha is one of many

incidents where civilians have been targeted in Saudi led air strikes.

We saw remains of water bottling site that had been struck. A teenage

boy was killed. The Saudi led campaign has the backing of the UN

security council, which gives it legitimacy under international law.

The UK supports the coalition and, along with the United States and

others, has been supplying weapons used in the conflict. Attacks

directed against civilians awesomely and objects constitute grave

violations of international, humanitarian law. The UK has a very

clearly gory shoe. That regime says the UK will not provide licenses for

armed exports. -- Berry clear legal regime. The facts on the ground of

what is happening in Yemen suggest there is that clear risk. The

Government has continued to grant export licences for arms sales to

Saudi Arabia for use in Yemen. Lawyers for the group campaigning

against the Arms trade told us they will take the Government to court

unless it stops. From the very beginning, the response by the

British government has been to say they have received repeated

assurances from the Saudis that British weapons are being used in

accordance with international law. Privately, I have been told the

Government lawyers and officials are very worried indeed about the

possibility of a legal challenge. At issue is whether the UK has done

enough to satisfy itself that British weapons are not being used

to commit war crimes. That is a requirement under the arms trade

Treaty which David Cameron champion Tim came into force last year. A key

piece of evidence cited by the lawyers came in an interview on

Newsnight with the Foreign Secretary. The Saudis deny there

have been any breaches of international humanitarian law. That

denial alone is not enough. We need to seek proper investigations. That

admission is significant say authors of the separate legal opinion

prepared by Amnesty International. The British government has confirmed

it is aware of the allegations that the violations of international law

are being committed on the ground in Yemen. It is also aware that the

assurances being given by the Saudi authorities are perhaps not

watertight. That heightens the degree of scrutiny be ought to be

applying in the determination of whether any new weapons should be

supplied. The 90 page legal opinion concludes: on the basis of the

evidence available to ask any authorisation by the UK the transfer

of weapons or other items to Saudi Arabia in circumstances where such

weapons are capable of being used in the conflict in Yemen would

constitute a breach by the UK of its obligations under domestic, European

and international law. The Saudis have consistently denied

targeting civilians. They point out their campaign comes at the request

of Yemen's internationally recognised government against a

rebel force, who themselves stand accused of violating the rules of

war. Britain is not supplying weapons to the Huthis. A spokesman

told us... Yemen is in the grip of one of the

world's worst crises. Apart from the Blom -- the bombing, public aid by

coalition forces has caused acute shortages. A shaky ceasefire in

place since yesterday has already been violated. The Government should

use its influence to make sure the ceasefire holds. We have

considerable influence with the Saudi regime and the coalition.

Making sure the ceasefire holds is the best way of stopping the

apparent division in government policy. On the one hand blockading

the ports, which is what the defence and foreign affairs are trying to

do. The humanitarian and development wing in the British government is

trying to get food, medicine and fuel in through the same ports. The

Arms trade Treaty was supposed to make civilians save her in war

zones. It was backed enthusiastically by the British

government. The first test may be in Yemen, concerning the use of British

weapons. We did ask the Saudi government onto the programme

tonight but that request was declined.

Joining me now in the studio is the former Business Secretary Sir

Vince Cable, and from Geneva, Sir William Patey, the former UK

Good evening used by the lawyers are clear risk.

As Business Secretary can you have real concerns about the guided laser

bombs. What did you do about it? Let me just go back a little bit. Very

few arms contracts for Saudi Arabia and anywhere else. By me or

questioned by ministers. There is a clear framework of law. There are

relatively few cases that are actually very controversial. I do

challenge and indeed blocked this particular sale of basically bombs

for the aircraft. Largely because of a report that I had heard about

for the aircraft. Largely because of the time which was uncorroborated

for the aircraft. Largely because of but seemed plausible about bombing

of hospitals. I challenge that. had a detailed set of conversations

with government during the had a detailed set of conversations

campaign. We're not in our offices. I was assured eventually, by the

Defence Secretary, who went this in some detail, that British

embedded personnel this in some detail, that British

and we have people who are very closely involved with the

and we have people who are very the Saudi air force activities on

the same basis the Saudi air force activities on

currently have. I was satisfied that extra measures were being put into

place. The aircraft were on the runway, won't they? I was making

myself unpopular by holding it up. Eventually I was given very clear

assurances there would be proper oversight. That oversight committee

assurances, did you take legal advice? I had legal advice within my

department. There are essentially three government departments

department. There are essentially involved. We are all given official

and legal advice from you make involved. We are all given official

decisions. You have thought this advice was watertight. Ta me your

honest reaction? I was having to make a judgment on the basis of good

faith. -- tell me. We were given additional safeguards.

faith. -- tell me. We were given heard today that somehow civilian

targets are heard today that somehow civilian

bombing raids. If heard today that somehow civilian

had oversight, this heard today that somehow civilian

lot of people reporting with heard today that somehow civilian

bottling plant and so forth, they are being bombed. Whether

bottling plant and so forth, they that is with American weaponry, we

do not know. In your view is it enough to go ahead? This is a legal

question for the courts. I was given assurances we had sufficient

oversight of the bombing activity to make sure that international

humanitarian law would not be compromised. Sir William, the report

tonight comes from highly respected lawyers, who believe the British

government could be in breach of British European

government could be in breach of law by supplying these particular

weapons to Saudi Arabia. What is your response? I am not a lawyer but

I imagine there is some element of deliberate targeting that needs to

be there. I agree with Vince Cable. I cannot see why the Saudis would

deliberately target civilians will still be contrary to what they're

trying to in Yemen. There is a Security Council resolution. The

Huthis are the aggressors, if you like. They are trying to push that

back. I was ambassador in Afghanistan and Iraq. I know there

was no deliberate targeting of civilians. You cannot guarantee that

in a complex situation like Yemen, Iraq all Syria, civilians might not

accidentally be hit. I imagine the legal case with hinge on deliberate

targeting. I cannot see why the Saudis would deliberately target

civilians. These bombs are meant to be hugely accurate. It is not as if

it would be collateral damage, would it? We have seen mistakes occur.

Americans have made mistakes in Iraq and Syria. It is possible that

mistakes were made. The Saudis are trying to support the legitimate

government in Yemen, trying to re-establish some sort of control

and promote a political sentiment. Targeting civilians would have no

part in that I would be foolish. Do you think the Saudis are as careful

in pursuit of their goals? I do not see why they would be less careful.

Britain has a very close relationship with Saudi Arabia and

should be in a position to advise and to work with them. I suspect the

British governor will be talking to the Saudis and seeking the

reassurances of the measures, they have put in place. -- the British

government. I have seen statements about measures that are in place to

try to ensure there are no civilian casualties. I suppose there will be

close scrutiny of what these measures are. These are civilian

casualties in hospitals and they do turn out to be as a result of

British weapons being dropped, would you be comfortable with that?

Well, if they were deliberately targeted it would be unacceptable.

That would be the issue. And if they were attributable to Saudi as

strikes and two British equipment. Let me put that to Vince Cable.

Would you make that distinction when you see what has actually been

happening in Yemen, between deliberate targeting and collateral

damage, the line between them, are you comfortable with that? As Sir

William Patey said, there is a difficult balance to be struck. I

would have thought that prudent military activity would not just be

avoiding deliberate targeting, it would be taking all proper effort to

avoid collateral civilian damage. They should be doing more than just

not targeting. Given how central to the Saudis' Arsenal are British

bombs and how important they are to our export trade... It is more than

just bombs, it is a vast amount of equipment. Yes. Do you think Britain

imposes the same standards with the Saudis as they do with other

countries? I think there is growing discomfort that we are very highly

dependent on Saudi Arabia in a variety of areas, not just on the

supply of equipment, but for regional security, and issues around

human rights which Michael Gove gave vent to a few weeks ago. I think

even within this Conservative government you have ministers who

think, actually we are being over compromised by having this

overdependence. Any relationship has to be in balance. Did you have

worries or discomfort over the nature of the relationship and how

it was conducted when you were Business Secretary, and indeed

before? Well, I had no problem with us exporting kit to Saudi Arabia. I

was a champion of British manufacturing industry and this was

part of it. I did worry that we were becoming overdependent in a variety

of different ways and it was inhibiting our ability to say what

needed to be said. And so in terms of saying what needs to be said, do

you think now there should be an independent inquiry at least, given

the nature of the allegations, and given the seniority of the lawyers

that are making them? Well, now presumably there will be a legal

process, and that has to happen. There is a very good select

committee in the House of Commons which is set up specifically to

pursue issues around arms export licensing. I think they are the

appropriate body to look at this. In that film, Ian Gatehouse said his

understanding was that government lawyers are very uncomfortable about

this. Do you think the government is in some discomfort? I do not know. I

was there seven months ago. It was an own comfortable subject at the

time. But a vast amount more is now known. At that stage we only had

some fragmentary reports. Janet Yellen has learned her place in US

history by announcing the first hike in rates in almost a decade. The

impact might be more psychological than anything else. She said it

reflected the confidence of the committee that the economy would

continue to strengthen. She cited lower-than-expected inflation

figures among other factors for the decision.

The financial crisis of the late 2000s was centred on American banks.

Today, the US passed a milestone in recovery. The Federal Reserve,

America's central bank, raised interest rates for the first time

since 2006. It is a first small step back to normal. So,. The recent

history of US interest rates. When the line is low, rates are low. This

means that banks can borrow cheaply overnight. That gets passed on into

the real economy. So, in the early 1980s, the Fed raised these

borrowing costs, taking the heat out of the economy and cutting

inflation. Conversely, rates got slashed as the financial crisis

unfolded. They went down to historic low rates for an unprecedented long

time. So why are they being raised now? The Fed only worries about two

big things. First of all come US inflation, which has been very low,

but it has just risen to about 2% on the Fed's preferred measure. They

are starting to worry about that. The second thing is unemployment. It

was at about 10% back in 2010. Now it is just 5%. So the Fed feels that

all things considered it is now safe to start withdrawing the stimulus

which has been keeping the US economy going. If we keep interest

rates down for too long, the pressures on the economy will

continue to build up. So we will get a bigger build-up in inflationary

pressures and possible financial bubbles. Both of those things could

cause interest rates to rise more sharply in the future. So if the Fed

wants to raise interest rates in a gradual fashion, it must start

sooner rather than later. What really matters now is how fast the

Fed raises rates and what the market expects. The Fed gets its

rate-setting committee to predict how they think rates will rise. So

each committee member puts dot showing how high they expect rates

to be at the end of each year. So you can see they all expect rates to

rise from this year to next and so on. Note two things. First of all

come these rate rises are actually very slow. This is a gradual

phasing, about half the pace of the last round of Fed hikes. Secondly,

this last column is their long-term estimate. They all crowd around

3.5%. And that is really low, about 1.5% off the long run Fed average.

US monetary policy will be followed very widely. Higher interest rates

encourage investors to pull out of riskier sectors and markets across

the world. And those of us in countries which are a little way

behind should watch particularly carefully. We have to return to

normal as well. I'm joined now by Professor Danny

Blanchflower, former member of the Bank of England's

own rate-setting Monetary Policy Committee, and Gillian Tett,

US Managing Editor of First of all, Danny Blanchflower,

they were unanimous about this - other conditions right for a rate

rise? Well, the surprise was that they actually were unanimous. But

rise? Well, the surprise was that you look at the remake to which the

Fed has, with the worries about inflation

Fed has, with the worries about rates right now. Big deal is, the

Fed is using its forecast and saying, we think

Fed is using its forecast and really believe them. So why have

they done it then? There is not much difference from a

they done it then? There is not much ago? I would say it is different

they done it then? There is not much the sense that the market

expectation in September was actually that they were not going to

go up. The market was expecting them to go now, so the surprise would

have been if they hadn't. to go now, so the surprise would

pushed themselves into this move. Is this a turning point, do you think?

I think it is a very important moment, because they are desperate

to show that they can get back to a world where monetary policy begins

to look a bit more normal, or at least a bit less completely weird.

Over the last five years we have become used to this world where

weirdness seems normal. We have had zero rates and incredible

distortions in the markets which everybody is ignoring because they

have got used to it so much. If the Fed wants to

have got used to it so much. If the psychological block that we have to

stop living in this weird world and psychological block that we have to

money has a price... So actually it will not make

money has a price... So actually it the economy? The crucial question

now is what happens next. Firstly, can they actually implement this

so-called rate rise? can they actually implement this

money markets are so distorted, it can they actually implement this

is not clear they can actually get the normal levers to work.

is not clear they can actually get what are they going to do with this

massively bloated Fed balance sheet they now have, four times bigger

than it was before 2008? Can it go back on a diet and slim down?

Question lots of us be asking over Christmas. Thirdly, how quickly is

it actually turn followed today 's supposed rise by more rises, is it a

one-off? This whole impact which it is going to have, with better

interests in America than in the emerging markets, people are going

to be taking their money out of those markets, India, and putting it

back in America? Gillian is right about the risks, but actually there

have been 28 cases in the last seven years where central banks have

raised rates, and in all cases, they have actually had to cut them later.

That is a worry. And right now, this is going to have an effect on

emerging markets, on corporate bond yields, the manufacturing sector

will be impacted by the rise in the dollar. So the worry is actually,

this does not work at all and what we will see down the road is not

just a return fire a cut but maybe even a cut to negative, which is

what we have seen at the ECB, the Swiss central bank and other places.

So if this does not work, we are in trouble. American homeowners,

Gillian Tett, have been used to this cheap money. Even a small rise like

this could put some of them, who are borrowing to the hilt, in trouble?

Absolutely. Banks spoke to me the other day and said,,, if you are

thinking about getting a mortgage, get it now. But you have to keep it

in proportion. This is still a very small hike. In some ways it is long

overdue I would say because people have got used to alter cheap money.

But the big question, as Danny says, is how the rest of the world now

reacts. It is not just the emerging markets, it is also the fact that

you could be seeing the European central bank embarking on more news

and in in the coming months which could create a real potential for

knock-on effects in the foreign exchange markets. -- more loosening

in the coming months. And what happens in Britain? In Britain they

will have to sit for a very long time, as I have been saying for

seven years, because in the UK there is so many people on variable rate

mortgages. As soon as you start to raise rates it hurts people's

ability to pay and it hurts house prices and it hurts the banks. So

the Bank of England is to sit pat for a long time. Is there a problem

being addict to two cheap money? Well, clearly there is. It caused

all kinds of distortions. But the problem is that the shock we have is

so much greater, so as soon as you try to resolve it by a rate rise,

there are all kinds of crazy things which go on. The reason is, we did

not really have a plan on the way in. It was unique times. We voted

for quantitative easing, as I did. It was very scary. You do not know

the way out, either, so, they are having to follow the data and cross

their fingers and hope. We are really there, crossing fingers and

hoping economics. David Cameron has told the commons

that the government has met its target to resettle one

thousand Syrian refugees by the end of the year - a year when some

of the most visceral and memorable images on our screens

and in newspapers have been From new born babies to great

grandparents fleeing, there have been extraordinary scenes

and heartbreaking stories. Tonight we have the third and final

film in Katie Razzall's series When you watch this,

how do you feel? Osama and his young son Zaid brought

down by a camerawoman's foot. Do you think it was

an accident or on purpose? When you say he has been

injured, is it more The Hungarian camerawoman

who tripped them appeared to symbolise Hungary's

hostility to migrants. She apologised, saying

she had acted in self-defence. But Osama was oblivious

to the furore. In what looks on the surface

like a fairy tale ending for them, Osama and his two sons

are now in Spain. Global outrage led to a job offer

for the Syrian football coach from a Spanish football club -

and an apartment. When you first arrived

in Spain, what struck you? It's the first time -

I have been talking to you for a long time,

it is the first time you have smiled There are reasons to smile,

but it is not that simple. Osama's wife and two

other children are stuck in Turkey, to where

the family first fled. Life has thrown many

hazards their way. They come from a town in north-east

Syria which was under Assad attack Britain has recently

begun air strikes against What do you think of what's

happening now in the Syrian I think that it is very

bad, the war in Syria. War drove the exodus

to Europe, and this migrant's I read an interview

with you from before where you said, Now, a few months on,

do you feel you could forgive her, Of course I think yes, because I now

forgive this accident. And I am looking for

the future of my family For now, though, football has

helped him maintain hope. His flight from Syria

with his youngest child in his arms caught the world's attention

for all the wrong reasons. What nobody knew, though,

was that as well as Zaid, Osama was carrying a very

precious possession. When I look at you

there, you are not carrying very much of course

because you have walk. Some T-shirts for

Zaid, and some food. It is proof you really

like football. Some of the most haunting images

of the refugee crisis have And one photographer

above all others has given us defining pictures of conflict over

the past sixty years. Don McCullin turned eighty last

month and spent his birthday in Iraq, under fire as he captured

on camera, the retaking the town of Baiji from so called IS by Iraqi

fighters.He has photographed everything from the building

of the Berlin Wall, to Vietnam to the destruction of Palmyra,

but also series of beautiful landscapes around the world and has

a new exhibition and book to celebrate his

extraordinary body of work. Evan went to meet him

and asked him whether his view I feel slightly defeated by the work

I have done in the past. I thought, I used to

get right up close to things and show people how terrible

it was to see a child starving to death, or a man with half his jaw

missing or legs missing. I thought, I'm going

to make sure that people look at my photographs

and they understand what the real I'm thinking that may have changed

society but that hasn't really. I have almost convinced myself that

what I have done in the past hasn't We're still looking at appalling

atrocities round the world. As quick as one war

has gone, another is in the waiting to come and repeat

itself all over again. We have seen the picture of the boy

washed up on the beach in Turkey. It really did seem to demonstrate

the power of a photograph, The extraordinary thing

about the photograph, without being crude,

it was without blood. It was the sheer dangling legs

of that three-year-old It had another way of

presenting the tragedy to us. It changed the thinking

of people about migration, Tell me what the rules

are for your profession? Obviously you are going in,

taking photographs of people in very vulnerable and

unpleasant situations. What are the rules of your

engagement with those people? Why would you expect immunity

from Downing Street? You don't have the right

in the second place to take people's photographs, to lean over them

when they are dying or starving. Anyway, I have a huge

conscience about what I did in the past because I'm alive,

I'm healthy, and I knew that some I walked into a school one

day and found 800 dying I know many of the children

wouldn't have survived two or three days after I left

that establishment. I can still talk about it

with clarity because I will One of your most

famous photos is the American Marine in Vietnam

with a shell-shocked face. That is actually the cover

of the book of your photos. Have you been able to

stay in touch with him? Does he know his photo has

reached such prominence? I only knew him for

the moment I took five But he was a soldier,

he was a human being. But, compared with the civilian

casualties that bear the brunt of war these days, who nobody helps,

nobody cares about, they are always the last to be informed that tragedy

is coming to destroy their homes That soldier would have

been taken care of by My biggest fear

about that photograph I go to get the

information and bring Basically, I am really

the carrier pigeon. The public, if we

are honest, and I'm guessing this because I see

what the public buys They are more interested in looking

at pictures of life victors This is my biggest

contention in life. We show more interest,

as you isely said, the victors, This narcissism that has

crept into our society. I suppose you have to blame

the proprietors who sell They really do not need to be

trading in tragedy in their lives. They would much prefer

to make money and all make it sanitised and jolly

and what a wonderful world Which is a totally

false picture, really. Are you someone who feels the world

is empowered by digital technology and the smartphone

that takes pictures? There is more communication

than we have ever dreamed of. Are we being fooled

by what we are seeing and receiving? Are we on the right

kind of wavelengths? I'm not saying this because I feel

my photographic work has failed, where it should have

gone, because I'm still holding out. Finally tonight, you can't

have missed the fact that the new Star Wars movie

is premiering tonight - what with the rolling news coverage

and days of free publicity. Thank goodness we've managed

to avoid all that here.