08/11/2011 Daily Politics


08/11/2011

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Good afternoon. Welcome to The Daily Politics. The contagion in

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the eurozone continues to spread. Italy's cost of borrowing source to

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record levels. Prime Minister Silvio Berlusconi faces losing a

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vote in the Italian parliament this afternoon. We will bring you the

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latest. Back home, is the career of Home

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Secretary, Theresa May, in jeopardy. Jed she told the Commons that

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immigration officials acted without her authority when they lifted

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controls for non-European nationals. Today she is grilled by the select

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commity. The Government's ambitious plans

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for a �32 billion high-speed rail link between London and Birmingham

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are dammed with faint praise in a report published today. We will

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debate the pros and the cons of these ambitious plans.

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Our Trade Minister, Lord Digby Jones is with us.

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The yield on Italian bonds reach the 6.6% yesterday. Not a good omen.

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The mark of Berlusconi. This yield is the interest they pay on money

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that they borrow, called the yield, it reached today, I think, this

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morning, 6.74%, it is the highest level that these yields have been

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at since Italy joined the euro. Italy has debts of, let me get it

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right, 1.9 trillion euro, almost 2 trillion euros. As a huge economy,

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that dwarfs Greece, and it has more bonds that any country in the world,

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other than America and Japan. That is a lot of dent to service. It is

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thought to be too big for the other eurocountries to bail out if it

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goes pear-shaped. If Italy goes down it could be catastrophic. The

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Chancellor, George Osborne, called on colleagues to be clear about

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their intention at the next big meeting. The eurozone needs to show

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the world it can stand behind its currency. We can't wait upon

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developments in Athens and Rome. We have to make progress here in

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Brussels. If we don't, that will continue to have a very damaging

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effect on the entire European economy, including the British

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economy, and certainly speaking as the British Finance Minister, the

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best possible boost the British economy could have this autumn

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would be a resolution of the eurozone crisis. That was the

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Chancellor, George Osborne, the political situation in Italy is

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also deteriorating. The future of Italian Prime Minister, Silvio

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Berlusconi, looks in doubt, with support ebbing away at home. He

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faces losing a vote in the Italian parliament this afternoon, bringing

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yet more political uncertainty to the eurozone. Let's get the latest

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from our correspondent in Rome. Is it inevitable now that

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Berlusconi will go? Not if you listen to Mr Berlusconi himself.

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He's all over the Italian media this morning, talking about

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fighting on. All weekend he says that he has the number, he has a

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majority, he is going forward, he's not going anywhere. There is

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speculation that there have been just two many defections from his

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side of the House, and that he really maybe in trouble. What we

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will see in the afternoon is a vote on a budget measure, important that

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it goes ahead. The opposition may not try to vote it down, the

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opposition may abstain. We should get a good sense of whether Mr

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Berlusconi is right, whether he really does have the numbers he

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needs to continue to govern Italy. If doesn't, then you might expect a

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confidence motion within days from the opposition, and then it would

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seem possible that Mr Berlusconi would go down to humiliating defeat,

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if he didn't resign beforehand. It is all to be played for in the

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hours ahead. Economically, is it hitting home that actually Italy's

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detects are so big, that the rest of Europe wouldn't be able to bail

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them out any way? I think the analysts, the thinkers, the

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politicians, and many people of that ilk are acutely aware, and

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desperately worried when you speak to any politician about the way

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ahead for Italy at the moment, on the streets people aren't just

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quite as wired into the intricacies of the bond markets. Ordinary

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people on the street feel the economy is seizing up, there are

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fewer opportunities, life is getting harder. If you say to them,

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do you believe this country is on course for something like Greece,

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they tend to think, surely not. This country is rich, just two big

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to be badly managed into that - too big to be badly managed into that

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sort of situation. Digby Jones, I put it to you, getting rid of Mr

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Berlusconi, it may be a necessary condition for moving forward, but

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it is anything but a sufficient condition? Absolutely right. It

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will kick the can down the road. But at the end of the day, the

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western democracies have got to understand that for years we have

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all paid ourselves money we have never earned. And if you stop a guy

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on the street, in Italy or outside St Paul's, they will all blame the

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bankers. This is different to that. The 2008 recession you can blame

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the bankers for that, you could, a lot of other reasons too, this is

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about actually the other way round, the bankers have plugged the gap

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for years, so democratic politicians can say to people, you

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can have lots and lots of prizes and we are not making the money.

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Italy has its private savings profile fine, it is not a prove lig

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gate nation personally, people save, what it is, is they have paid

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themselves money they have never earned as a nation. Only Zimbabwe

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has had a lower growth profile, on an average over ten years, than

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Italy. It has not grown. At home f the income coming in isn't

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sufficient for your credit card, your overdraft and mortgage, you go

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bust. In business, if you are not selling enough, and you have lots

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of debt, you go bust. Countries are no different. What you have is

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Italy's growth over ten years has been very, very poor, their debt,

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their public spending, their pensions, health, education, their

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roads, has been high, gap, plug it with debt. Suddenly, everybody

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around Europe is going, can't afford all this, and there is no

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growth profile to get them out of it. No politician, elected instead

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of Berlusconi will give them an answer other tharpbgs pay your tax,

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because payment of tax is a voluntary event in Italy. So pay

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your tax, and sorry, you can't retire at 55, you will have to pay

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more in all you do, and you will have less. Same in Greece, same in

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France. I have to say, same in Britain. That is your issue.

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problem I suggest in Italy, before Berlusconi, in 50 years Italy had

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49 different prime ministers, that is hardly a recipe for financial

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stability. And they are now talking of putting in, not an elected

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politician, but Mr Monti, a technocrat, a euopean commissioner,

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he will have no democratic legitimacy, there will be

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demonstrations on the street. Isn't it heading at some stage for a

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default? Historically, that is why Italy has said we will join the

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euro in the morning, we don't mind taking rules and regulations from

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Brussels, we don't intend to comply. Why? Deep in their souls, they know

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they don't have prime ministers who have ever led their nation. Having

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a technocrat, I would submit, is going to make no difference, at the

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end of the day they will go on the street and stop it happening.

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Therefore, whether you manage it within the euro, or whether you

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come out of the euro, there will, and I think you are right, there

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will be a form of default. You can't afford it pay the debt back.

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The fundamental problem, given the sums of money we are talking about,

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next year the Italians have 300 billion of their euros of debt

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comes to maturity, they can only pay that back by borrowing another

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300 billion. It is a bit like a popbzcy scheme the Italian

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Government - popbz did I scheme the Italian Government, and there is -

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Ponzi scheme the Italian Government, and no nation or group of nations

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can pay them out? No European leader will say, vote for me, I

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will close your libraries, and give the money to Italy. Turkeys don't

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vote for Christmas, that is why there will be a default, because

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there isn't enough money to bail them out. The IMF has been sent to

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Rome to monitor Mr Berlusconi's behaviour, I'm told a few women's

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groups will have to monitor his behaviour too.

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They will take their place in the queue. It is the daily quiz,

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sticking with yuerpbgs the question for today is which basic food stuff

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has the EU announced must have the ingredients listed on the packaging.

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Peanut, eggs, honey or potatoes. At the end of the show, Digby will

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give us the right answer. What is the ingredient of an egg,

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but an egg, how many committees him, it might have been a trick

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question. There is a joke on the Internet at the expense of Theresa

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May, it is knock, knock. Who's there? Come in.

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Miss May is under fire after it was revealed that border controls were

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waved on non-nationals. Yesterday she revealed they were acting

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without her knowledge, then we extended a scheme that was only

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intended to apply to non-EU passport holders. I didn't given my

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authorisation to any of these decision, indeed, I told officials

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explicitly that the pilot was to go no further than we agreed. As a

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result of these unauthorised actions, we will never know how

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many people entered the country who should have been prevented from

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doing so after being flagged by the warnings index. That was May, in

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just under half an hour, the Home Secretary will face another

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grilling. This time from MPs on the Home Affairs Select Committee. I'm

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joined now by our correspondent. How hard a time will she get?

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would be Home Secretary, first you have to go through that in the

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House of Commons. There was one moment where she simply didn't seem

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sure where her pilot was being applied across the country. You

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look at your diary for the next day and think things can only get

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better, and you see you have the Home Affairs Select Committee with

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Keith Vaz, that will be a joy. No, of course it won't be eezy, the

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opposition are looking at this - easy, the opposition are looking at

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the simple response, it was the officials that done it, I didn't

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know. The obvious response from the opposition is why didn't you know.

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We can accept you were ignorant, how can you be ignorant and

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competent at the same time. To prove it doesn't rain but pour on

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the Home Office tower, the UK borders agency are facing legal

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action from a kpwroup of language schools who said they were wrongly

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included on a list of groups banned from bringing people into the

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country. She will come under political pressure today, I have

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been shown a memo sent by the head of UK BA, last week it was sent, I

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got to see it this morning. It says any relaxation from the rules will

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need his personal authority, his personal authorisation. I can tell

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you this, she is in trouble now for relaxations, if come Christmas time

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we have queues of two, three, four hours time at immigration control,

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she will be in trouble for that. Just briefly, adding to her woe, in

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political terms, how dangerous is it for her? As long as she can

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stick to this line, that actually it wasn't something she knew about,

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that cannot be eroded. Frankly, as long as she puts up a little bit

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more of a tough and convincing performance in the select committee

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than maybe she did at points yesterday. Maybe if she can take a

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more substantive look at the questions and not engage wholly in

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the Labour bashing, which certainly didn't get the hackles up, but the

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confidence of some Labour backbenchers yesterday, she should

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be fine. She has the Prime Minister's backing. We need more

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fact before we have a dead duck Home Secretary on our hands. There

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will be plenty of people in journalism and the opposition

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trying to find out damaging things. We are joined by Alp Mehmet, a

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former British ambassador, before that an immigration official

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himself. He's now the vice chairman of Migration Watch. Welcome to the

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programme. There seem to be rather big basic contradictions in what

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Theresa May has said, and then what seems to have come out of leaked

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document from the border agency. She said that this was a pilot

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scheme, except it applied to every single port and airport, she then

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said that there was strict instruction that is the pilot was

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to go no further in terms of relaxation than European passport

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holders, but the document says that actually senior managers could give

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further measures at local ports and airports, they could go further

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than she actually said. It was done for more risk-based assessments on

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security, but the instruction on the document says it is to prevent

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the excessive queuing to beat the summer traffic. What will people

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make, it is hugely embarrassing? is hugely embarrassing for Theresa

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May, shy will be the first to be the first to acknowledge. That I

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was an immigration officer 30 years ago. Queues at ports is nothing UN

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the pressure to get people through the ports quickly was happening in

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the 1970s and 1980s, that is something always going on. I

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personally would not exaggerate the problem here. Which problem?

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problem of the fact that a lot of people may have got in who didn't

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get in. The fact is, we're not interested in children, we're not

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interested in groups, we are not interested in a lot of people that

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take up time. Now, I'm not suggesting we should do away with

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controls, on the contrary, controls should remain there, if that means

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people going through the controls more slowly, then so be it. But,

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I'm not sure that this is as much of a problem as is being made out.

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Except, as our correspondent said there, this is about what she knew

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in her competence, isn't it. It seems to me she didn't know how

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widespread the pilot was, sheer she herself in the Commons said, I

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don't know - she herself in the Commons said I don't know how many

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terrorist suspects and illegal immigrants have entered the public.

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That won't reassure the public? won't. What I'm saying is whatever

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the instructions were, and whatever the civil servants took upon

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themselves to do, common sense should have prevailed. Those, they

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had suspicions about, should not have been allowed to go through it.

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I'm pretty sure that didn't happen, frankly. Really, just based on

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experience? Based on experience, no immigration official would let

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people through that they had serious concerns about. Would they

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be able to tell if they weren't even looking at the passports of

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some of these people? Well, of course you can tell, experience

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tells you the sort of people that you will be interested in from

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their movements, from the answers that they give. But you are blaming

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staff a little bit like May and border officials and saying it is

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down to them and they should have discretion, and no political

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message was coming through. These leaked documents seem to suggest

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that there was an instruction from on high, that not only said it

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should apply to European passport holders, that it shouldn't just be

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limited, but people should make up their own minds, and they could

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take the measures themselves, if that was a political instruction,

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surely they were carrying them out? What I'm saying is whatever

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instructions went out, the actual controls should not have been

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compromised, I don't believe it is compromised to the extent it is

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suggested. In terms of business, we have been told it is drag on

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business, lots of business people don't like Heathrow, they would

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like to come through quicker than they do. You can see the competing

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priorities here, if they were trying to reduce queue the over

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summer months? I wouldn't put the business issue that high in terms

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of want ago more efficient Heathrow, any more than a tourist or you and

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I. With business it is the granting of visas beforehand, it is the all

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security check that is take ages to get somebody from India into your

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business in Britain. That's the issue for business. The issue at

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Heathrow is a much wider issue from letting people in and looking at

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the passport. The problem with Heathrow is it is not fit for

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purpose in the 21st century. much danger do you believe she's

:17:43.:17:48.

in? I'm with these two gentlemen. I reckon if nobody points the finger

:17:48.:17:52.

at the fact she knew, and if we see heads roll at the top of the Civil

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Service, for want of a better word, I think she's fine. I do worry when

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I heard the words, "she has the complete backing of the Prime

:17:59.:18:06.

Minister", that's like confidence in a football manager. I believe

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she's doing a good job in many areas, she can't have the causal

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link. Do civil servants always listen to their ministers? No.

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I see, so we're all agreed on that! I was the minister and I say no. He

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have the civil servant and he says yes. Who is telling the truth?

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remember one civil servant saying to me, you go in and say that, and

:18:32.:18:39.

you're on your own. The Home Office has a pretty terrible reputation,

:18:39.:18:43.

all home secretaries fear what is going on. Going back to the UK

:18:43.:18:47.

Border Agency, they have been pill lorryed and knocked about over the

:18:47.:18:51.

last few years, we ought to look at what is happened to them under the

:18:51.:18:56.

previous administration, mostly that does take and need a close

:18:56.:18:59.

look. Will it make it more difficult for cuts to be carried

:18:59.:19:06.

out at the border agencies? Definitely. I wish politicians

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would talk about cuts meaning fewer people. They don't mean work hard

:19:10.:19:15.

with fewer people, they mean work more cleverly. Use your existing or

:19:15.:19:18.

less resource, think about how you use it and work for cleverly. Don't

:19:18.:19:23.

just cut money, that means fewer people, but we're going to try to

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do the same thing in the same way. The result is what you have seen

:19:25.:19:29.

today. I vouch that was what he was telling us when he was a minister.

:19:29.:19:35.

I used to constantly say, work more cleverly. Don't just try to put

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people there. That will be the mantra.

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Try getting through JFK without an American passport!

:19:44.:19:47.

To some it is a white elephant which will spoil the countryside

:19:47.:19:51.

and eat up tax-payers' money, to others it is the green alternative

:19:51.:19:57.

to air travel, which will cat plult our antiquated public transport

:19:57.:20:02.

system into the 21st century and provide an economic bust. It will

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still eat up a lot of tax-payers' money. This morning plans for a new

:20:08.:20:12.

high-speed network between London and Birmingham, have won the

:20:12.:20:16.

lukewarm support of the transport committee. Tell us more.

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All aboard, because the Transport Select Committee says there is a

:20:19.:20:25.

good case for the line known as HS2, the �32 billion scheme, which will

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link London and the Midlands on a new network, with speeds of up to

:20:31.:20:34.

250 miles an hour, with plans to extend it to the north. The group

:20:34.:20:39.

of MPs said it is obvious the economic impacts of high-speed rail

:20:39.:20:43.

can vary and are not easily predicted, and HS2 could be the

:20:43.:20:47.

catalyst for these benefits. They accepted the proposed route is

:20:47.:20:52.

likely to have substantial impacts on those living along it, and it is

:20:52.:20:56.

unfortunate, it crosses the Chilterns, the Tory heartland and

:20:56.:20:59.

an area of outstanding national beauty. There could be adverse

:20:59.:21:02.

consequences for local communities. It is very necessary to consider

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those as well. It is wrong to cast gate as nimbus people who are

:21:10.:21:17.

simply expressing legitimate concerns about their local areas.

:21:17.:21:21.

The committee says the Government should commit to extending it to

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Leeds and Manchester before firmly committing the route. And building

:21:25.:21:32.

a network between north to south should be a priority.

:21:32.:21:37.

I'm joined by Andrea Leadsom, her constituently will be affected by

:21:37.:21:42.

the proposed route. Welcome. This is a pretty milk and water

:21:42.:21:48.

endorsement from these MPs. Yes. And I think rightly too. Where I am

:21:48.:21:52.

on this is that I think it is an excellent thing to have it built. I

:21:52.:21:55.

think it should be committed to leads and Manchester and glass go,

:21:55.:22:05.

and go to the country, and go to parliamently people on the plan.

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Make sure people will understand you will cut out slots at airports

:22:09.:22:12.

and cut out air pollution and grow economies on the route. Three big

:22:12.:22:19.

problems, it is not cost, firstly, let no-one in Birmingham think this

:22:19.:22:23.

will really bust the Birmingham economy. It will make Birmingham

:22:23.:22:29.

the most northern suburb of London. Why is that a big thing? It is not.

:22:29.:22:33.

Why do you want to spend all that moneyen to? You have to get more

:22:33.:22:37.

money and structure into the nation than we have. If you go on to Leeds

:22:37.:22:42.

and Manchester and grow a high- speed network network you will take

:22:42.:22:49.

people off motorways and aircraft. It is �32 billion, that only gets

:22:49.:22:53.

you to Birmingham? Right, second point, this is where this lady and

:22:53.:22:57.

I might find common ground. I cannot understand why, if you have

:22:57.:23:01.

a pollution corridor already there, called the M40 and the Chiltern

:23:01.:23:06.

line, why don't you build this, and yes, if someone says it costs more

:23:06.:23:10.

money to iron out the curves and put the tunnels in, so be it, spend

:23:10.:23:14.

the money. Don't go and rape a load of virgin countryside to do this,

:23:14.:23:18.

that is the important thing. Hold on, I don't want a monolougue. I

:23:18.:23:21.

would like to bring in our other guest. You are against it whatever

:23:21.:23:27.

the route is? I am. If it went via Wales would you be in favour of it?

:23:27.:23:32.

No, when you look at what the transport select committee is

:23:32.:23:37.

saying, they are concluding it is a good thing, but all the points

:23:37.:23:39.

suggest the conclusion should be a bad thing. They said the business

:23:39.:23:45.

space is spurious because it is based on time-saving on a train,

:23:45.:23:48.

they said there is no environmental case. They said the length of time

:23:48.:23:51.

it will take to build the thing is a non-starter, 20 years, there is

:23:51.:23:55.

no commitment beyond the Midlands at this point in time. The

:23:55.:24:00.

conclusion I draw from the report is they shouldn't be supporting it.

:24:00.:24:05.

If you have your way we will end up the only major European country of

:24:05.:24:10.

any size without a high-speed network? It is not true, our Inter

:24:10.:24:15.

City 125s are high-speed. Not if you travel in Spain and France?

:24:15.:24:21.

you look at their situation if you go off the high-speed network, you

:24:21.:24:26.

are on to slow train services. In the UK, our Inter City 125s, when

:24:26.:24:29.

you bear in mind the small geographic area we have, they

:24:29.:24:33.

servant purpose of getting us between cities very fast. We are

:24:33.:24:38.

talking �32 billion, that exclude the spur to Heathrow, and having to

:24:38.:24:43.

build a new underground. If you are bringing in 2,000 more people into

:24:43.:24:47.

Euston, the Victorian line can't cope now, led alone those

:24:47.:24:50.

increasing numbers. The costs are a tiny proportion of the reality of

:24:50.:24:54.

building this thing. I did a trip to Birmingham a couple

:24:54.:24:58.

of weeks ago, it took an hour and 20 minutes. People knock British

:24:58.:25:02.

trains, it was a perfect trip, an hour and 20 minutes, it was

:25:02.:25:05.

relaxing, I had Wi-Fi, somebody brought me a cup of coffee, I got

:25:05.:25:10.

some work done. I do it a lot. don't we, instead of spending �32

:25:10.:25:14.

billion, which you and I know will be �60 billion at the end of the

:25:14.:25:17.

day, just to get to Birmingham. Take a fraction of that money and

:25:17.:25:23.

improve the existing line? I think. Make it an hour instead of an hour

:25:23.:25:27.

and 20 minutes. There is only so much you can do an engineer would

:25:27.:25:32.

tell us, with existing lines, and you can only get it down to a

:25:32.:25:35.

certain speed, or up to a certain speed because of the he can listing

:25:35.:25:38.

line. What I'm saying, for a fraction of the money, you could

:25:38.:25:42.

actually do so much by building something in the same corridor.

:25:42.:25:45.

That is something that they don't seem to have thought about. They

:25:45.:25:49.

haven't, they have rejected it? Quite. Why? Because they think it

:25:49.:25:54.

will cost more in the end, because it is not a corridor to city and a

:25:54.:25:59.

high-speed line. They say costs are tie tight. Nobody flies to

:25:59.:26:03.

Birmingham already, the only real gains are if Manchester and Leeds

:26:03.:26:08.

and up to Scotland. But you don't save anything on pollution in that,

:26:08.:26:12.

every slot that Heathrow gives up for Glasgow and Edinburgh, there

:26:12.:26:16.

are few domestic flights out of Heathrow now, will go to new lines,

:26:16.:26:26.

to Shanghai, and quango dong, and Rio, there is no - Qandong, Rio.

:26:26.:26:28.

Nobody pretends there is an environmental argument now. There

:26:28.:26:32.

is a key point, if you are determined to go high-speed, the

:26:32.:26:38.

environmental impact is far greater than if you did to 160-180mph,

:26:38.:26:42.

which is faster than we already V if you lock at a combination of

:26:42.:26:47.

sorting out pinch points and improving speed on existing trains,

:26:47.:26:50.

and potentially adding another line part of the way, perhaps as far as

:26:50.:26:54.

the Midlands, so you can then free up the existing West Coast Mainline,

:26:54.:26:58.

to go to the northern cities, with a much better service there, it

:26:58.:27:03.

would be a far cheaper thing. The key thing is, if you go with high-

:27:03.:27:07.

speed rail you are not sorting out anything in 2026, we can't wait

:27:07.:27:14.

until then. I broke the story in the Sunday Times about CrossRail in

:27:14.:27:16.

1986, it is now 2011, they are still trying to build it. In your

:27:16.:27:22.

heart of hearts, do you think the high-speed rail network will ever

:27:22.:27:25.

be built? Do you want to phone a friend. We haven't got time?

:27:25.:27:31.

think it will. Do you, what about you? Funnily enough, given where we

:27:31.:27:34.

both come from, I don't think it won't. I'm beginning to think that

:27:34.:27:37.

too, and I always thought it would. I'm more in favour too.

:27:37.:27:41.

Thank you for being with us. There is time to find out the

:27:41.:27:46.

answer to the quiz, the answer was which basic food stuff has the EU

:27:46.:27:50.

announced might have the ingredients listed on the package,

:27:50.:27:55.

is the peanuts, eggs, honey or potatoes. I didn't know about this

:27:55.:28:02.

until I sat down. I opened a packet of peanuts the other day, on the

:28:02.:28:08.

back of t I said on the back of it, it says the ingredients, may

:28:08.:28:17.

contain nuts, on that basis nuts. You're wrong, it is honey. What

:28:17.:28:22.

else is there. They have pollen on their feet, and it may be GM pollen,

:28:22.:28:25.

that is the problem. That is exactly right.

:28:25.:28:31.

sovereign debt crisis and this is what Europe has to worry about. All

:28:31.:28:35.

right, thanks to all our guests, especially to Digby Jones for being

:28:35.:28:39.

our guest of the day. We will be here tomorrow with all the big

:28:39.:28:42.

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