:00:08. > :00:12.Tonight at 10: Lower growth and higher borrowing. The perilous
:00:12. > :00:15.state of the British economy. REPORTER: Are things worse than you
:00:15. > :00:19.thought? The Chancellor sets off for
:00:19. > :00:24.Parliament to deliver a Autumn Statement that spells out the scale
:00:24. > :00:29.of the challenge ahead. More pressure on public sector
:00:29. > :00:33.workers, as he tries to tackle the debt. We will do whatever it takes
:00:33. > :00:39.to protect Britain from misstep storm, while doing all we can, all
:00:39. > :00:43.we can to build the foundations of future growth. It is his failing
:00:43. > :00:46.plan that has pushed up unemployment and pushed up
:00:46. > :00:52.borrowing. It is his reckless gamble that has made things worse
:00:52. > :00:57.in Britain. And public sector job losses could reach 700,000. We will
:00:57. > :01:01.have reaction on the eve of the big strike over pensions. Also tonight,
:01:01. > :01:06.chaotic scenes in Tehran, where hundreds of protesters break into
:01:06. > :01:08.the British embassy compound. A former News of the world's
:01:08. > :01:12.journalist tells the Leveson Inquiry that his former bosses knew
:01:12. > :01:16.all about phone hacking. Rebekah Brooks and Andy Coulson, they are
:01:16. > :01:20.the scum of journalism for trying to drop me and my colleagues in it.
:01:20. > :01:25.And why a former parliamentary aide accused of being a Russian spy can
:01:25. > :01:28.stay in the UK. And I will be here with Sportsday
:01:29. > :01:38.later in the hour on the BBC News Channel, including all of tonight's
:01:39. > :01:56.
:01:56. > :02:00.goals from the three Carling Cup Good evening. Feeble growth, rising
:02:00. > :02:04.unemployment and higher borrowing. That is the reality of Britain's
:02:04. > :02:08.economic troubles. It is all in the context of a potential collapse of
:02:08. > :02:12.the euro-zone. The overall picture presented by the Chancellor in the
:02:12. > :02:14.Autumn Statement was worse than many had predicted. Mr Osborne
:02:14. > :02:20.acknowledged that growth will be much lower than forecast back in
:02:20. > :02:22.March. Borrowing will be significantly higher than previous
:02:22. > :02:27.estimates and public sector pay rises will be capped at 1% from
:02:27. > :02:30.next year. We will have all of the reaction and analysis. We start
:02:30. > :02:33.with our political editor, Nick Robinson.
:02:33. > :02:36.This was the statement that George Osborne never wanted to deliver.
:02:37. > :02:40.The moment he would have to travel from the Treasury to Parliament to
:02:40. > :02:44.tell the nation that the Government will not have balanced the books by
:02:44. > :02:49.the next election. Our debt challenge is even greater than we
:02:49. > :02:54.thought because the boom was even bigger, the bus Stephen deeper and
:02:54. > :02:59.the effects will last even longer. -- the bust even deeper. Those
:02:59. > :03:03.effects, has a Commons was told, will mean more -- more pay now,
:03:03. > :03:07.more pain tomorrow and more pain for longer. Why? Because of what
:03:07. > :03:10.those working behind the door of Number 11 have been told by the
:03:10. > :03:17.independent forecasters at the Office For Budget Responsibility.
:03:17. > :03:22.That, over next few years, there will be �111 billion in extra
:03:22. > :03:28.borrowing. That growth next year will not be 1%, it will be just
:03:28. > :03:33.0.7%. As a result, they predict that, in total, 710,000 public
:03:33. > :03:38.sector jobs will go. The Chancellor blamed inflation coming from abroad
:03:38. > :03:42.and the crisis spreading from the eurozone. Much of Europe now
:03:42. > :03:46.appears to be heading into a recession, caused by a chronic lack
:03:46. > :03:51.of confidence in the ability of camp -- countries to deal with
:03:51. > :03:55.their debts. We will do whatever it takes to protect Britain from this
:03:55. > :04:02.debt storm. Whatever it takes me is that many of us will end up working
:04:02. > :04:06.longer. The state pension age will be increased from 66, up to 67,
:04:06. > :04:11.starting in the year 2026. That will affect anyone under the age of
:04:11. > :04:14.52. Whatever it takes also means more unwelcome news for public-
:04:14. > :04:19.sector workers, on the eve of strikes and protests over cuts to
:04:19. > :04:22.their pensions. The Chancellor has decided to tighten the squeeze on
:04:22. > :04:28.public sector pay. It has already been frozen for all but the worst
:04:28. > :04:32.paid until 2012. After that, there will now be a 1% cap on the pay
:04:32. > :04:36.bill for the next two years. While I accept that a 1% average rise is
:04:36. > :04:41.tough, it is also fair for those who work to pay the taxes that will
:04:41. > :04:45.fund them. And there was to be more. Although out-of-work benefits will
:04:45. > :04:49.increase with inflation, many tax credits are to be frozen, although
:04:49. > :04:54.not those paid to the disabled. You can see why some ministers might
:04:54. > :04:58.have been wondering when it would all end. The Chancellor had some
:04:58. > :05:02.fresh good news. Rail fare increases will be a little lower,
:05:02. > :05:06.and fuel increases as well. For the fuel duty from August to be only
:05:06. > :05:09.three pence higher than it is now. George Osborne could not plan his -
:05:09. > :05:14.- claim his plan was on course, but he did insist there was no choice
:05:14. > :05:19.but to stick to it. Leadership for tough times, that is what we offer.
:05:19. > :05:23.I commend this statement to the house. If Labour's response had
:05:23. > :05:26.been just one sentence, it would have been, we told you so. The
:05:26. > :05:30.Chancellor, said Ed Balls, had blamed everyone but himself.
:05:30. > :05:34.Families, pensioners and businesses already know it is hurting. With
:05:34. > :05:39.billions of pounds more in borrowing to pay for rising
:05:39. > :05:42.unemployment, today we find out the truth. It is just not working.
:05:42. > :05:48.he were Chancellor, he said, he would cut taxes now and spend more
:05:48. > :05:53.to get people back to work. after just 18 months, his plan is
:05:53. > :05:57.leading to falling growth, rising unemployment and �158 billion more
:05:57. > :06:07.in borrowing, the country either needs a new Chancellor or a new
:06:07. > :06:12.
:06:12. > :06:16.# On the 12th day of Christmas, the This was the day when the list of
:06:16. > :06:20.reasons to complain about cats got longer. He managed a number of
:06:20. > :06:23.important things today, of which was capital investment in
:06:23. > :06:27.infrastructure. The sting in the tail is that it is back loaded
:06:27. > :06:31.after 2013. What we needed was spending up front to stimulate the
:06:31. > :06:34.economy. Tonight, we all know what they have known at Number 11 for
:06:34. > :06:44.some time. The outlook is bleak, the forecast is that it is not
:06:44. > :06:45.
:06:45. > :06:51.In a very detailed statement, the Chancellor also outlined a range of
:06:51. > :06:55.other measures. Benefits were to go up by 5.2% from next April, and the
:06:55. > :06:59.basic state pension will increase by �5.30 per week. He announced
:06:59. > :07:04.more than �1 billion of money for schools in England and he also
:07:04. > :07:09.announced plans to help people by their own homes. The CBI welcomed
:07:09. > :07:12.help for small businesses, the Government's pledge to underwrite
:07:12. > :07:16.�40 billion of loans. There is also an extended holiday and business
:07:16. > :07:21.rates. The Chancellor also confirmed �5 billion in capital
:07:21. > :07:24.spending, with 35 road and rail projects planned across England. So,
:07:24. > :07:28.the figures published today suggests that spending controls and
:07:28. > :07:33.tax measures will have to remain in place beyond the next election to
:07:33. > :07:36.bring down the deficit. It means a squeeze on household finances. It
:07:36. > :07:40.means thousands of job losses in the public sector. The Government
:07:40. > :07:46.will have to borrow more than predicted. Stephanie Flanders is
:07:46. > :07:49.here to assess the figures. A lot of bad news, not all due to
:07:49. > :07:54.the euro-zone or even the Chancellor. In many ways, the real
:07:54. > :07:57.game changer in a statement has come from the Independent Office
:07:57. > :08:01.for Budget Responsibility. It has decided that the growth we have
:08:01. > :08:07.lost recently, we are not going to get back. In the Budget, the OBR
:08:07. > :08:14.was expecting national output, GDP, to grow by 1.7% this year and 2.5%
:08:14. > :08:20.in 2012. Those have been cut, down to 0.9% this year and just 0.7% in
:08:20. > :08:23.2012. If you think about it, in the OBR's first report, just after Mr
:08:24. > :08:28.Osborne became Chancellor, its forecasts suggested that the UK
:08:28. > :08:33.economy would be about 13% bigger at the end of the parliament and at
:08:33. > :08:37.the start. He now thinks that our national income will grow by just
:08:37. > :08:41.7% over those five years. That would just take us back to where we
:08:41. > :08:45.were in 2007. Crucially, the OBR thinks the loss
:08:45. > :08:50.of national output is permanent. The implication is that they is not
:08:50. > :08:56.much room for a Plan B. A lot of extra spending now would trigger
:08:56. > :09:00.extra inflation, more than growth. Many economists say that is too
:09:00. > :09:04.pessimistic. I think it is wrong to suggest, as many officials do, that
:09:04. > :09:09.the economy has suddenly lost its entrepreneurial zeal. The main
:09:09. > :09:14.problem is an inadequacy of demand and confidence, rather than
:09:14. > :09:18.anything else. The OBR's decision has implications for the entire
:09:18. > :09:22.economy. For example, then a 1 million fewer new jobs forecast
:09:22. > :09:26.over the next five years than we expected only eight months ago. Yes,
:09:26. > :09:30.it means a lot of extra borrowing for the Chancellor. That new
:09:30. > :09:36.borrowing means that Mr Ross Brawn has had to announce not a Plan B,
:09:36. > :09:41.but a Plan A plus. New spending cuts, worth �15 billion a year by
:09:41. > :09:45.2016. Without that extra austerity, the OBR says the Chancellor would
:09:45. > :09:50.have broken his fiscal rules on debt and new borrowing. Back in
:09:50. > :09:55.March, he was due to borrow �46 billion in the last year of the
:09:55. > :10:00.parliament. That has now gone up to �79 billion. That is higher, even,
:10:00. > :10:03.than Labour was forecasting before the election. Back then, Mr Osborne
:10:03. > :10:06.said that a government that was expecting to borrow that much, for
:10:06. > :10:11.that long, would lose the confidence of the financial markets
:10:11. > :10:15.and probably lose us our AAA credit rating as well. Was that true? We
:10:15. > :10:19.will never know. It doesn't seem to be true right now, at least as long
:10:19. > :10:24.as other governments are looking even worse. At the moment, the
:10:24. > :10:28.market is not engaged in a beauty contest, but an ugly contest. The
:10:28. > :10:32.UK looks less ugly than European counterparts. But if you look at
:10:32. > :10:36.the outlook for the UK, you see that it will become the most
:10:36. > :10:40.indebted of the currently AAA rated governments, with the sole
:10:40. > :10:44.exception of the United States. Over time, there is a prospect that
:10:44. > :10:48.the UK rating could come under scrutiny. Gloomy though they are,
:10:48. > :10:51.remember that all of the numbers in today's statement as soon that the
:10:51. > :10:55.crisis in the euro-zone gets resolved and business and market
:10:55. > :10:59.confidence comes back next year. If today's market fears about single
:10:59. > :11:05.currency come true, by the time of the budget the news from the
:11:05. > :11:08.Chancellor made even worse. -- made even worse.
:11:08. > :11:13.How will the measures affect families throughout Britain, as
:11:13. > :11:16.household budgets come under pressure? And how will small
:11:16. > :11:24.businesses benefit, because their performance is essential to the
:11:24. > :11:28.economic recovery. Plymouth is used to weathering the elements. But
:11:28. > :11:34.this is starting to feel like a prolonged battering. Four weeks
:11:34. > :11:38.before Christmas, and we found a high street here unseasonably quiet.
:11:38. > :11:43.This market trader said she had never known things so slow. We are
:11:43. > :11:47.all struggling to make a living here. It is just getting high at --
:11:47. > :11:51.harder and harder. We have to work twice as hard, for longer hours. I
:11:52. > :11:55.don't know. What do we do next? People in Plymouth, as across the
:11:55. > :11:59.rest of the country, knew that the economic outlook was not exactly
:11:59. > :12:04.bright and sunny. But there seems to be genuine shock here that the
:12:04. > :12:09.forecast is now quite as miserable as the latest figures suggest.
:12:09. > :12:14.Plymouth is clearly hurting. The airport is about to close. The
:12:14. > :12:19.football club has only recently emerged from administration. It is
:12:19. > :12:24.an old naval city, with low wages and a large public sector. The
:12:24. > :12:28.hospital is now one of the main employers. Today, health workers
:12:28. > :12:36.like Susie heard that after two years of pay freezes, she will get
:12:36. > :12:39.a rise of 1%. It's nothing, is it? Christmas is cancelled this year,
:12:39. > :12:43.due to the fact we cannot afford it. The rich are getting richer, the
:12:43. > :12:48.poor are getting poorer. It is awful. In a hotel near the seafront,
:12:48. > :12:52.we found this local businessman preparing for a meeting. He is
:12:52. > :12:56.generally encouraged by the Chancellor's latest efforts to get
:12:56. > :13:01.industry growing. Support to small and medium-sized businesses,
:13:01. > :13:08.fantastic, yes. But what about the micro businesses? What about those
:13:08. > :13:11.of us who are one, two, five people? We fall through the cracks.
:13:11. > :13:15.For many, the gloomiest news is that they might have to work longer
:13:15. > :13:21.before they retire. The state pension age increasing to 67,
:13:21. > :13:25.sooner than expected. That means Laura, out Christmas shopping,
:13:25. > :13:30.could face another 45 years of hairdressing. I've already got bad
:13:30. > :13:33.wrists. By the time I and 67, I am not going to be able to do it
:13:33. > :13:38.anyway. I'll be spent -- standing on my feet all day, I would be able
:13:38. > :13:40.to do that then. Tonight, the Institute for Fiscal Studies said
:13:40. > :13:44.that households are facing an unprecedented squeeze in living
:13:44. > :13:54.standards. There may have been red skies over Plymouth this evening,
:13:54. > :13:57.but few people here are expecting a Well, during his statement, the
:13:57. > :14:00.Chancellor called on trade unions to abandon the public sector strike
:14:00. > :14:06.planned for tomorrow. The dispute is over changes to public sector
:14:06. > :14:09.pensions. He said the strike would damage the economy and cause
:14:09. > :14:18.inconvenience to millions of people. The unions say they have no other
:14:18. > :14:22.option available, after the failure At this Primary School in Yorkshire
:14:22. > :14:26.this afternoon, pupils went home knowing there would be no school
:14:26. > :14:30.tomorrow. It will be a similar story across much of the UK.
:14:30. > :14:36.Parents will have to look after their children instead. And it is
:14:36. > :14:39.not just schools. Tomorrow, up to 2 million public sector workers are
:14:39. > :14:44.expected to walkout. And they include many who work in the health
:14:44. > :14:50.service, although emergency cover will be provided. It is likely to
:14:50. > :14:53.be the biggest strike seen in the UK for a generation. At
:14:53. > :14:59.demonstrations and on picket lines, emotions are likely to be running
:14:59. > :15:04.high. Following the news that workers face a two you pay cut and
:15:04. > :15:08.just 1%, while more than 700,000 public sector jobs could go. This
:15:08. > :15:13.kind of arbitrary announcement by the government, without any
:15:13. > :15:17.negotiation or discussion of any sort, that is not conducive to
:15:17. > :15:22.positive negotiations to resolve the already difficult dispute that
:15:22. > :15:26.we face a public service pensions. The government wants to cut the
:15:26. > :15:31.cost of pensions for millions of public sector workers. It is asking
:15:31. > :15:36.them to contribute more, an average of around 3%, and work longer, in
:15:36. > :15:40.line with the state pension age. For a new type of pension scheme
:15:40. > :15:43.based upon their earnings over their career. The eve made a
:15:43. > :15:47.generous offer and it is quite wrong, it's irresponsible for
:15:47. > :15:50.strike action to be happening when discussions are still going on. We
:15:50. > :15:54.met with the civil service unions today. There are meetings on
:15:54. > :15:58.Thursday with the teachers' unions, the health unions, because we want
:15:58. > :16:01.to make progress. There is progress being made, that is what is so
:16:01. > :16:08.frustrating. Tonight, the government warned of disruption to
:16:08. > :16:12.schools, council services at ports and and the health service. Sir
:16:12. > :16:18.Leonard pfennig runs an NHS trust. He's had to deal with NHS strikes
:16:18. > :16:21.before. I was managing this hospital during the winter of
:16:21. > :16:25.discontent in the late 70s. We have dusted off those plans, got
:16:25. > :16:29.everything going and we are confident we will see the day
:16:29. > :16:34.through. But many others, including Jim Bailey, will be going on strike
:16:34. > :16:40.for the first time. He's been in teaching of almost 40 years. Most
:16:40. > :16:44.of my staff are going out on strike, very reluctantly, myself included,
:16:44. > :16:47.but we feel we have to make a stand. Tomorrow the union members will
:16:47. > :16:53.stage the biggest strike since the late 70s, but the government
:16:53. > :16:56.insists that the deal on the table is fair for all. On the eve of that
:16:56. > :17:00.strike, and has the full impact of the Autumn Statement is becoming
:17:00. > :17:03.apparent, let's talk to Nick Robinson in Downing Street, and to
:17:03. > :17:07.Stephanie, who has rejoined us in the studio. Let's talk about
:17:07. > :17:11.credibility, that is at the heart of lots of the debate we've seen
:17:11. > :17:15.today. Where is this credibility of the government as you see it this
:17:15. > :17:19.evening? The Chancellor has had to eat the Prime Minister's words
:17:19. > :17:25.tonight. David Cameron said the Budget would be balanced until the
:17:25. > :17:28.time of the next election, it won't. The cuts will go on foot two years.
:17:28. > :17:33.It wouldn't have made a very tasty meal for George Osborne. On the
:17:33. > :17:37.other hand, what he is able to say is, look, I have taken the measures
:17:37. > :17:41.today, tough measures that were necessary to stay within those
:17:41. > :17:46.rather more flexible deficit targets. That proves that I have
:17:46. > :17:49.credibility. He has got the endorsement for that and the Office
:17:49. > :17:54.for Budget Responsibility, and he is able to claim that things are
:17:54. > :17:58.all rather worse overseas, particularly in Europe. What is
:17:58. > :18:01.intriguing on the eve of those strikes is that instead of stepping
:18:01. > :18:05.back from confrontation, he has used this autumn statement to say
:18:05. > :18:09.there will be no concessions on pensions and, what's more, there
:18:09. > :18:13.will be a further curb on public sector pay. I know that government
:18:13. > :18:17.insiders believe that the public is with them, both on the deficit and
:18:17. > :18:21.on public sector pay. Particularly private sector workers who had it
:18:21. > :18:24.tough, both in their pay packets and with their pensions. There's
:18:24. > :18:32.another possibility and it is this. That the government now believes
:18:32. > :18:35.that its credibility depends on its willingness to have a confrontation.
:18:35. > :18:41.Stephanie, all of this happening in a much bigger context. We are
:18:41. > :18:44.talking about the debt crisis in the eurozone. Put that into the
:18:44. > :18:48.context as you see it and the importance of today's events.
:18:48. > :18:52.think we've been looking, as I mentioned, if things go worse in
:18:52. > :18:54.the eurozone, that is not built into this forecast. That is
:18:55. > :18:58.something which would make the numbers even worse. We have seen
:18:58. > :19:02.things get a bit worse today. Italy tried to borrow from the markets
:19:02. > :19:06.and was able to do that but at a very high rate, well over 7%,
:19:06. > :19:11.getting on for 8% in one case in order to borrow from the markets.
:19:11. > :19:13.That tells you something we've been seeing over the last few weeks.
:19:13. > :19:17.Investors taking seriously the possibility that they won't get
:19:17. > :19:21.through this crisis, that the eurozone will break up. At the same
:19:21. > :19:24.time, we've had politicians and governments are a bit further away
:19:24. > :19:27.from coming up with a solution. There was a meeting of eurozone
:19:27. > :19:30.finance ministers today, George Osborne has gone to be with them in
:19:31. > :19:34.Brussels. They are admitting they might not be able to come through
:19:34. > :19:38.on the promises they made a few weeks ago in the summit. This is
:19:38. > :19:43.not looking good. In a sense, you'd have to say that George Osborne
:19:43. > :19:46.does now have an explanation, built in excuse if things go was over the
:19:46. > :19:51.next few months. He will be able to say the eurozone played a big part
:19:51. > :19:55.in it. Anti also has, it Ed Balls says you should be spending a lot
:19:55. > :19:59.more to boost growth, rightly or wrongly the OBR today has said
:19:59. > :20:09.there isn't much space for doing that. The politics of that might be
:20:09. > :20:10.
:20:10. > :20:14.easier but the economic reality for the UK is pretty grim. Coming up...
:20:14. > :20:20.Accused of spying, a Russian woman tells us about her successful fight
:20:20. > :20:24.to stay in Britain. I have simply lost a year of my life. I couldn't
:20:24. > :20:32.do anything. Lots of people believed I was a spy is simply
:20:32. > :20:36.because the British government said There were chaotic scenes at the
:20:36. > :20:39.British embassy in Tehran earlier today, when hundreds of protesters
:20:39. > :20:43.stormed two compounds and ransacked the buildings there. They were
:20:43. > :20:47.angered by Britain's support for new sanctions, which are aimed at
:20:47. > :20:54.stopping Iran's nuclear programme. David Cameron has called the
:20:55. > :20:57.protests out ridges and indefensible. -- outrageous. The
:20:57. > :21:03.embassy had been expecting this to happen, ever since Britain impose
:21:03. > :21:07.new sanctions on Iran last week and the Iranian parliament voted on
:21:07. > :21:09.Sunday to throw out the British ambassador. It was clearly pretty
:21:09. > :21:15.well organised and the police seemed fairly half-hearted about
:21:15. > :21:21.stopping it. The British should goal like the Americans did, she
:21:21. > :21:25.says. Leave this den of espionage. The demonstrators climbed over the
:21:25. > :21:29.gates and attacked the Chancery building inside, trashing it and
:21:29. > :21:34.grabbing Sue veneers. This one has got a picture of the Queen. After
:21:34. > :21:39.they left, Iran's foreign ministry issued an apology. But the damage
:21:39. > :21:42.had been done. We hold the Iranian government responsible for its
:21:42. > :21:47.failure to take adequate measures to protect our embassy, as it is
:21:47. > :21:51.required to do. Clearly there will be other further and serious
:21:51. > :21:56.consequences. But alongside the anger here at the Foreign Office
:21:56. > :22:00.there is also a feeling that we've seen it all before. Various times.
:22:00. > :22:06.And each time that the British embassy in Tehran has been attacked,
:22:06. > :22:12.it is always for the same reason - it is because the there is series
:22:12. > :22:16.inviting at the very top of politics in Iran itself. There is a
:22:16. > :22:21.major split between the country's religious leader, Ayatollah
:22:21. > :22:25.Khamenei, and President Ahmadinejad. And it is growing. And contrary to
:22:25. > :22:31.what you might expect, President Ahmadinejad is the one who is
:22:31. > :22:36.trying to stop things getting too bad with the outside world. This
:22:36. > :22:41.sense, though no other, President Ahmadinejad is the more moderate of
:22:41. > :22:44.the two. The British Embassy took the brunt of it all today but the
:22:44. > :22:53.real aim of the extremists may well have been to make relations with
:22:53. > :22:56.the West in general as difficult as possible. A former News of the
:22:56. > :22:59.World journalist has told the Leveson Inquiry into press
:22:59. > :23:02.standards that reporters at the paper routinely hacked people's
:23:02. > :23:07.voice mails. Paul McMullan said Andy Coulson introduced the
:23:07. > :23:11.practice when he became deputy editor. Both Mr Coulson, who later
:23:11. > :23:15.served as a close adviser to David Cameron, and Rebekah Brooks have
:23:15. > :23:20.subsequently denied any knowledge of the practice. This report
:23:20. > :23:24.contains flash photography. He worked for the News of the World
:23:24. > :23:28.for seven years, becoming its deputy features editor. He is Paul
:23:29. > :23:32.McMullan and at the Levenson ING -- the Leveson Inquiry he became the
:23:32. > :23:36.first person with direct knowledge to say under oath that the paper's
:23:36. > :23:40.editors knew that phone hacking was taking place. He was asked first
:23:40. > :23:45.what he knew about phone-tapping. In your experience, how common was
:23:45. > :23:51.voice mail interception by journalists at the News of the
:23:51. > :23:58.World? Not uncommon. These journalists swapped numbers with
:23:58. > :24:04.each other. They might swap, I think they swapped Sylvester
:24:04. > :24:07.Stallone's mother for David Beckham. At this point Lord Justice Leveson
:24:07. > :24:13.said he need not incriminate himself. The cross-examination
:24:13. > :24:21.turned to what editors knew. your editors know that voice mails
:24:21. > :24:25.were being intercepted? Yes. We did all these things for our editors,
:24:25. > :24:32.for Rebekah Brooks and for Andy Coulson. Rebekah Brooks was editor
:24:32. > :24:37.of the News of the World from 2000 to 2003. Andy Coulson, from 2003-
:24:37. > :24:41.2007. Both have denied knowing about phone hacking. Mr McMullan
:24:41. > :24:45.was furious that the it initial police inquiry had ignored their
:24:45. > :24:48.alleged part in this. Rebekah Brooks and Andy Coulson, they are
:24:48. > :24:53.the scum of journalism for trying to drop me and my colleagues in it.
:24:53. > :24:58.How dare these people just throw us to the wolves and one of the Scot
:24:58. > :25:01.free, as they did for about a year. Mr McMullan said another -- a
:25:01. > :25:06.bodyguard to Princess Diana had once asked for �30,000 for
:25:06. > :25:08.information about her movements. A former Daily Star reporter said the
:25:09. > :25:12.tabloids were more interested in getting away with it than telling
:25:12. > :25:16.the truth. And a Guardian journalist, who has investigated
:25:16. > :25:24.phone hacking, said he no longer trusted the press to regulate
:25:24. > :25:27.itself. In eastern Afghanistan NATO outpost has been attacked by
:25:27. > :25:30.insurgents. Some from across the border in Pakistan. The incident
:25:30. > :25:36.has added to the tension between NATO and Pakistan, following the
:25:36. > :25:43.killing of 24 Pakistani soldiers last week in a Nato-led airstrike.
:25:43. > :25:48.Our correspondent has sent this report from the province close to
:25:48. > :25:53.the border with Pakistan. In the skies above Afghanistan's most
:25:53. > :25:57.eastern edge, a delivery to a remote American base. The airdrop
:25:57. > :26:03.lands right on target outside Combat Outpost Margah, just five
:26:03. > :26:07.kilometres from the Pakistan border. But as Afghan and US soldiers go
:26:07. > :26:14.out to retrieve the supplies, insurgents in the hills nearby are
:26:14. > :26:18.watching. Suddenly the base is under attack. We've just had the
:26:18. > :26:22.siren that there is more. You've just heard another explosion near
:26:22. > :26:26.the base, that's the third we've heard this day. That strike landed
:26:26. > :26:36.just outside the perimeter walls. Some of the shelling was coming
:26:36. > :26:46.from insurgents across the border inside Pakistan. Charlie Company,
:26:46. > :26:46.
:26:46. > :26:51.228, were quick to respond. Fire! The sergeant explained the origin
:26:51. > :26:55.of the attacks. It seems like they are coming from the east. They are.
:26:55. > :27:05.That's exactly which way we expect them to fire from because it is
:27:05. > :27:08.
:27:08. > :27:18.With each shelling the insurgents were narrowing their aim and
:27:18. > :27:19.
:27:19. > :27:23.getting closer to their target. As the shelling continued, F 16
:27:23. > :27:27.fighters were called in. Heavy artillery was fired, hitting
:27:27. > :27:33.positions a few hundred metres inside Pakistan, bringing the
:27:33. > :27:37.attack to an end. No one on the base was injured. This is a border
:27:38. > :27:47.and a strain like never before. But for the insurgents who move freely
:27:48. > :27:49.
:27:49. > :27:52.across it, it hardly seems to exist. A Russian woman accused by MI5 of
:27:52. > :27:56.spying for the country has won the right to stay in Britain. MI5 had
:27:56. > :28:00.claimed that Katia Zatuliveter had been passing secrets to Moscow
:28:00. > :28:03.while having a relationship with her employer, the Liberal Democrat
:28:03. > :28:12.MP Mike Hancock. And Immigration Appeals Commission rejected the
:28:12. > :28:17.claims and decided that she should not be deported. A Russian spy in
:28:17. > :28:23.Westminster? Was she a honeytrap sent to seduce and to steal
:28:23. > :28:27.secrets? That was what MI5 claims about Katia Zatuliveter. But today
:28:27. > :28:33.she heard a judge reject that claim and throw out an attempt to deport
:28:33. > :28:37.her to Russia on grounds of national security. It was an
:28:37. > :28:41.absolutely horrifying experience. I have simply lost a year of my life.
:28:41. > :28:45.I couldn't do anything. Lots of people believed there was a spy,
:28:45. > :28:50.simply because the British government said so. She had worked
:28:50. > :28:53.for Lib Dem MP Mike Hancock, then a member of the Defence Select
:28:53. > :28:59.Committee. Suspicions were raised by her four year affair with him,
:28:59. > :29:03.as well as with a NATO official. Catching Russian spies used to be
:29:03. > :29:08.the bread-and-butter work of the security service, MI5. In this case
:29:08. > :29:14.they certainly had their suspicions, based on Katia Zatuliveter's work
:29:14. > :29:18.in Parliament. But the problem was they had very little evidence.
:29:18. > :29:21.scariest part was that I have seen that these people were
:29:21. > :29:24.unprofessional and paranoid. Everything they've seen in Russian
:29:25. > :29:29.people was a spy. If you are Russian in this country you are
:29:29. > :29:33.raised by. They could not understand how a Russian in London
:29:33. > :29:38.can speak the English language. Home Office argues there were
:29:38. > :29:41.grounds for suspicion. But while Katia Zatuliveter had her private