21/07/2011 Newsnight


In-depth investigation and analysis of the stories behind the day's headlines with Mishal Husain.

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A new eurozone bailout, but is it simply delaying the inevitable


final act of a Greek tragedy. France and Germany lead the way on


the compromise. Is it more of the same old sticking plaster. We will


hear the verdict of the new head of the International Monetary Fund.


If possible, the News International story just got a bit murkier.


Newsnight has been told that three lawyers acting for the phone


hackings were themselves put under surveillance by the News of the


World.Another argument in the high echelons of the legal world on who


should have acted on allegations of criminality in news international.


News Corporation is under attack by some of the people who invest in it.


This man thinks the way that Mr Murdoch runs his empire is an abuse


of power, do the biggest shareholders care


The British artist Lucian Freud has died 88.


Good evening, decisive leadership or simply staving off an inevitable


default. This is one of the many days deemed crucial for the leaders


of the eurozone, as they try to stem the tide of fear over the


crisis gripping the continent. The latest summit does appear on the


surface to have gone further than before, making it easier for Greece


to pay back its debts and getting the private sector to help out too.


Will it just be another stopgap measure.


You know the journalists are still arguing here about the figures in


tonight's package, and whether or not they add up, the first kalde


tails are very complex. But the - fiscal details are very complex.


But the diplomatic issues are stark and simple, well known to people in


European politics, is when the Franco German motor works well the


EU can move forward. In recent weeks Franco German differences


over Greek debt created an unstable situation that was punished by the


markets. Overnight President Sarkozy and Chancellor Merkel had


meetings and patched up their differences. It was clear from the


details of a plan released, that things would be different at the


summit, it is a began today. Brussels awoke to the Belgian


national holiday, and yet another emergency summit on the euro. That


brought tanks to the streets, and Europe's political big guns to slug


it out over Greece. But their battle has caused


consternation in the markets, as faith in the euro as faltered, so


giving a sense of urgency to today's meeting.


TRANSLATION: I assume we will be able to sign off a new programme


for Greece, that is an important signal to give out. European


compromise often demands looking glass solutions. This place is


certainly no stranger to them. But the leaders coming here knew that


those who had already lent money to Greece were bound to take a hit, a


partial default was on the cards, but few wanted to acknowledge it,


for fear of the harm that might do to Europe's other big debtor


nations. It is worrying, we have to have a formal default or something


considered by Credit Rating Agencies as a default, it is


something to be avoided. A lot of these financial markets still


relies on forms of self-regulations or regulation by big market


organisations what are the markets doing now, reading what is going on,


they see a lot of uncertainty and disagreement on member states on


how to handle this, of course they are selling. If they see there is a


consensus and a strong willingness to go together in the one direction,


they think probably they have been overdoing the situation.


President Sarkozy and Chancellor Merkel came hotfoot from meeting


last night in Berlin. They brought to Brussels agreement to shelf a


German idea that the new bailout be funded in part by a tax on European


banks. Instead, the leaders promised to underwrite the new loan,


and gave Greece twice as long to repay the old one. I think it is


satisfactory, especially for the Greeks. Because the burden now goes


down, that's very important, but it is also a very good sign to the


market, we have already seen that the markets reacted positively. And


I wonder why this sign, this important big sign, couldn't have


been made earlier. A couple of hours ago the leaders emerged to


announce that those draft proposals had been adopted. It was a better


outcome than many expected, and it is intended, its architects say, to


seal off the Greek situation, and prevent uncertainty from


undermining other debt ridden European economies. Today we


tackled a prob blem by addressing two main - problem by addressing


two main factor, investors feared that losss were being posed on a


non-voluntary basis on bond holders Greece and maybe in other countries


as well. The second fear, market uncertainty over the eurozone's


ability to resolve the crisis. it comes to the looking glass


quality of this summit, Britain's position is even curiouser, David


Cameron is not here, Britain is not part of the euro, of course, but he


declined to come as an observer, either. But his Chancellor, this


week, has urged the eurozone countries to integrate their


finances more closely, to avoid similar crises in the future. What


reality could be more inverted than a British Conservative Chancellor


trying to urge forward the process of European integration?


Despite today's agreement, Britain's intervention has struck a


chord, the eurocrats are quaking in their boots at the prospect of a


Spanish or Italian crisis and want a proper system to even out the


debt imbalances within the euro. There is some scepticism, that


today's package alone can prevent spreading of the Greek contagion.


I think it is absolutely necessary now, to make the next big step


ahead. We were discussing too long about the no bail out rule b things


out of the past. We have now to think not of federal Europe, but of,


especially concerning fiscal affairs, and the monetary union, a


very united European Union. The Belgian national day parade


went on outside the summit. The last few months have shown the


consequences of what happens when Europe's nations can't keep in step.


It will take careful coaxing, new political and fiscal language, even,


to form the eurozone recruits into a disciplined force. If they fail,


there is little doubt that defeat awaits them in the markets.


Just before we came on air I spoke to the head of the IMF, Christine


Lagarde, she was in Brussels, and was instrumental in today's deal. I


suggested what had been agreed was, effectively, a Greek default?


not at all, that is not what I have seen and heard today. It is


certainly not the spirit in which discussions were held. It was most


amazing, from my perspective, as new managing director of the IMF,


to see the European leaders of the eurozone come together in the way


they did. And clearly it was a new experience, I used to be minister


of finance, for France, but it was very comforting, and I found it, it


was a combination of being, you know, collective, comprehensive and


constructive. I was very impressed. It is great to hear there was such


a great spirit, looking at the detail of what was decided, debts


are being rescheduled, the amount to be repaid is reduced, the


interest rates are being taken down, it is some kind of default, surely?


You can't prevent members of the eurozone to actually decide that


they are going to reduce the interest rate, simply because they


want to make sure that one of the partners, who has been under severe


attack, who has delivered under the programme so far, needs to be


supported, and needs help. That's really what happened tonight. What


I found really most amazing is the collective resolve to actually


continue to support countries until such a time when they regain access


to markets, provided they deliver under the programme. I think it is


am combination of give and take. You deliver, you do what you have


to do, and we will back you. But it is not just the verdict of the IMF


and the other countries in the eurozone that matter, it is


organisations like the Credit Rating Agencies, and all these


countries will be vulnerable to what they decide you did today?


rating agencies will have to take a view, they will have to decide


whether a group of banks that are concerned about being part of the


pack, who are volunteering into negotiations, who sit at the table


together with the Greeks, eventually coming to terms, if that


is you know, voluntary, or otherwise, it is for them to decide,


what I regard as critically important from my perspective, and


forgive me, but I'm not a rating agency, nor do I pretend to be one.


From my perspective what was important was the determination of


the members of the zone, to continue to back and support the


country that is delivering under its commitment, until it returns to


market. But you can understand, you can understand, can't you, or


acknowledge why whether it is Credit Rating Agencies, whether it


is investor, and right around the world, look at what is happening in


the eurozone, over more than a year now, and wonder about the


leadership, everything seems to be so incremental, almost grudging, we


have to reach one crisis point after another, before anything


happens? I concede to you, because that is really what you are after,


but it has been, up until now, incremental, sometimes labourous,


but I can tell you today that it was game changing. It was quite


amazing to see premiers and heads, as different as the premier of


Slovenia or that of Italy, of Germany, as of Slovakia, come


together and say, yes, we have to do that collectively, we all have


to do it, because what happens to one could happen to another, and


what affects one could affect another. What must happen to get to


this resolve, we see the risk of contagion spreading around the


eurozone? What matters today is they have decided to transform the


European financial stability fund to make it precisely flexible, so


it can be used as guarantee, and a precautionary instrument, it can be


used to buy on the secondary market. Those are things that the IMF has


been advocating for a long time. And it is a plan that is


comprehensive, and you are right. For a long period of time it was


piecemeal, it was sporadic, it was fragmented, but this one is


different. It is clearly comprehensive, it addresses the


case of Greece, it encompasses Ireland and Portugal, although


clearly Greece is a unique case, in the sense it is the only one that


will attract a degree of private sector involvement, although


voluntarily. But the other two countries are going to benefit from


the same extension of maturity and reduction of interest rate. Forgive


me for being sceptical, we have heard many of these kinds of terms


before. Whatever, however comprehensive the plan you have


come out with today, it is still really the taxpayer who is bearing


the burden of all of this. The idea that was floated of the private


sector sharing the pain, that has been dropped, hasn't it? There are


quite a few numbers floating around, you have clearly looked at the


document, you can look at the charts as well, they are real


numbers on the table. But there is no danking tax, and the involvement


of the private sector is voluntary, it is up to them to decide whether


they want to get involved any more in this? You before wanted it to be


a selective report now it is not, I have convinced you! The private


sector has largely been let off the hook, the whole idea it is


voluntary, their involvement? is important is there are gives and


takes. On the one hand, the partners are saying, you, Greece,


have performed for a period of time, there was an element of reform


fatigue, well it is time to get back on that trend of structural


reform, privatisations, fiscal consolidation, and in argues for


that, we will back you up, and we have trust, that confidence is


restored amongst the members. The markets will see as they feel, as


they see fit, they will characterise as they wish, but,


sorry, the truth of the pudding is in the eating. At this time tonight,


I can tell you that the heads of state, heads of Government, are


determined to close ranks and be together. When you say fiscal


consolidation, how far does that actually go, let's think further


ahead for a moment. Your friend, George Osborne, here in Britain,


believes there is a remorseless logic for monetary union on to


fiscal union, is he right? There were heads of states and


Governments tonight saying there had to be a federation at the


financial, fiscal and economic levels. That is a change as well.


So that is a step in the direction that you would welcome, a logical


step? At the moment, where I stand, and in my new capacity as managing


director of the IMF, what is of most concern to me is Greece, and


other countries on the programme, can actually get back to the


markets, in due course, and they can restore growth, that they can


create jobs and their debt sustainability be significantly


improved. That is what matters to Thank you for your time.


Mark Urban is with us and we're joined by our economics editor,


Paul Mason, who is on the road in the United States but managing to


be with us. Not surprisingly, Christine Lagarde talking about how


positive today was. Will this deal hold, do you think? I might allow


Paul to give you the key verdict on whether or not it will hold. I can


tell you more of the detail. It seems that the state element of


this amounts to about 109 billion euros between now and 2014. The


private sector is estimated over that time scale at about 50 billion.


The interesting thing is, the state sector has been hemmed in, because


of the political lack of willingness on the part of some EU


members to extend this across the whole of the eurozone, it is hemmed


in to the debtor countries, Greece and a couple of others, it is


limited in how far this mark an extension and loosening of all the


rules around the stablisation fund. The private sector thing you hit


upon in your interview with Christine Lagarde, that is really


interesting. We have heard widely delivering estimates of what the


private sector could be. Including President Sarkozy who said at a


briefing this evening, that it could be up to 155 euros, right


from the low estimates to 50, to 106 which is in the commune Kay. We


don't know to what degree the people lending one in the private


sector will accept the guarantees made today, and take up the offers


putt on the table, being underwritten by the European


Governments. That is the big unknown, one of them, the other one


is how far can the principles laid down today to deepen co-operation,


be exlended more in the coming months. - extended more in the


coming months. President Sarkozy talked about this in the briefing,


they would be working on this summer, moving towards what George


Osborne has said today, closer fiscal union. Those are the two big


unknowns. The degree of private sector involvement, and the degree


to which eurozone members are really willing to move towards a


much, of closer fiscal co- ordination.


Paul, you get the job of telling us, Christine Lagarde thinks this is a


game changer of a deal, do you think it is one that will hold?


Games changer when we look at some of the details. The 109 billion


bailout of Greece is on top of a significant reduction in the


interest rate that Ireland and Portugal, as well as Greece, have


to pay. Then we get this expansion of the stability fund. This was


created last May, May 2010, to save Greece, but it is now looking


something like a mini-European scale IMF, with powers not simply


to bail out the countries that need bailing out a lot more money we


understand, but also to bail out banks in countries that are not


being bailed out, aka, Germany and France. This is game changer, as to


whether it work, as Mark says, the crucial thing in the short-term is


whether the banks and hedge funds, and the pension funds, who have


bought this Greek debt, accept the losses they will have to take on it.


My understanding is it is something like 17 billion in losses out of


the 50 billion they are puting into it. If they do accept it, as the


briefing said, the private sector has agreed to do X, Y and Z, we


don't get a contagion level event. What we have had today, let's be


clear, is the transfer of risk from the private sector, from banks to


pension fund, to Governments. It will be the Government who is bear


the risk of the Greek bail out, and the risk of the Greek bail out


going wrong. There is no guarantee that Greece does recover and start


to pay its way in the world F in two or three years time we come to


the place where Greece defaults again and this is a selective


default, the rating agencies will say it is a selective default, if


it does it again it is the European taxpayer, that includes people in


the UK, who are on the hook for it. I know we will be hearing more from


you in America on America's debt issues next week. Thank you to you


both. Apologise for the quality of the line to Paul Mason in Arizona.


If you thought that the phone hacking story was going into pause


mode, I am afraid you were mistaken. The stories are still coming thick


and fast. There was another sacking tonight, this time of the Sun's


features editor, Matt Nixon, apparently during the time he


carried out his work on News of the World.


It is a pretty major story this time. It is a major development.


Let's paint some context to the story. For News International the


whole phone hacking scandal unravelled in 2008 with the out of


court settlement with Gordon Taylor, the former head of the professional


Football Association. It is thought to have cost News International �1


million to keep key evidence out of court. It was Mark Lewis,


representing Mr Taylor who was behind it, he went on to get a


strong reputation for the phone hacking cases, celebrities came to


him, such as Chris tarnt, and many others, - Tarrant, resulting him in


representing 70 people, most significantly of all he's


representing the Dowler family. Is it Mark Lewis at the heart of


the allegations we are talking about now? Clearly Mark Lewis has


been a major thorn in the side to News International over the last


two or three years. A well mazeed source has told me today, that not


only was - a well placed source has told me today, that not only was


Mark Lewis's phone hacked, but someone at News of the World set a


private investigator on to him and trailing him, and put him on


surveillance, covert surveillance and fofd photographed him. I can't


name the individual for legal reasons, we do have his name. I


have been told by other sources that two other solicitors, also


involved in the phone hacking scandal, representing claimants,


have also been targeted in a similar way. I'm told that one of


these solicitors was shown a dossier of confidential information,


quite recently, earlier this year. That information could only have


come from illegal means. That was a very serious development. If we


have three solicitors targeted in this way, it raises fundamental


questions about what News of the World were doing at that time.


We did try to put this to News International tonight, there was no


comment at this time, there was nobody available to give a comment


on. That the curious thing about this, finally, is my understanding


is that News of the World weren't doing this for actual story


research. That raises the possibility they were doing it to


discredit solicitors who were their opponents, if that is true, it is


pretty serious. Also tonight, other information has


emerged about senior legal figures in the scandal, when they were


first made aware of hacking allegations, what they actually did


with that knowledge. We will be exploring this issue with the


former Attorney-General, Lord Goldsmith in a moment. First of all,


Mark Lewis, who we were just talking about is with me now. You


found out about this when Newsnight put it to you, what did you think?


It was something that n a way, was scary, but not intimidating. It


wasn't a surprise that they would try to find out what they could


about me. But the idea of intimidating a lawyer, at all was


not a surprise, because they tried it in 2009, when the story came out


in the Guardian, they threatened me with an injunction to stop me


acting. They threatened me throughout the cases. I haven't


been scared of them, and been standing up to them. Did you have


springss, when we put this to you, you weren't all together surprised?


There are things - did you have suspicions, when we put this to you


you weren't at all together surprised? They shouldn't and can't


intimidate lawyers and witnesses, you have to stand up to them. It is


a very serious matter, I have had to refer it to the police because


of the nature of what is going on. You have already told the police


about this? As soon as I was notified I had to notify the police,


because this is such a fundamental matter. It goes to the very issue


of representation of a client, who leave me messages, tactical


decisions, barristers might leave messages for me. They shouldn't be


listening to them. They are not about getting stories, it is about


legal cases. You have taken this to the police today. Ideally what


would you like to see them to do, how would you like them to act?


Undoubtedly the police would have to investigate. They will obtain


records from phone companies as to what was happening in terms of my


phone messages. They will try to obtain any report that is exist


about me. News of the World, newsgroup newspapers to find out


what is in their possession. And take action against the individuals,


it is a very, very serious matter. Thank you very much for coming in


to the studio tonight. As I mentioned earlier, in the


Westminster studio now is the former Attorney-General, Lord


Goldsmith. Your name came up in parliament yesterday in connection


with all of this, Geoffrey Cox MP was asking questions about what you


knew about the allegations at the time they first surfaced in your


role as Attorney-General, when did you first come to hear of them?


glad you asked me about this, what he said yesterday is I had approved


and indeed instructed the police to conduct only a narrow investigation


into phone hacking, that is absolutely not true. I'm very glad


of the opportunity to correct that, that is certainly not the case.


What did you do when you first became aware of the allegations?


was briefed about the case and we are all aware of what that was, I


was told there were other cases and we talked about those in due course.


That particular case went ahead, we know that, that was Mulcaire and


Goodman later that year they pleaded guilty. Was that the only


case you were aware of, were you aware of the other allegations?


wasn't aware of them. In background from the briefing I had about that


case, or those cases, I was told that the police whreefd there were


other cases as well. - believed there were other cases as well.


There was probably further investigations in due course. I


think the point to make absolutely plain, there was never any request


from me or answer from me suggesting that the inquiry should


be kept narrow. Let's focus on what you did with the information you


received in that briefing? You were told there were a series of


allegations, not just a single case, did you follow up on it at a later


date? I'm not the Metropolitan Police commissioner or Director of


Public Prosecutions. As I understand it, you do supervise the


role of the DPP? I have general oversight. What I was told is there


was a particular case or cases that ended up quite rightly in


conviction, I was told the details of that, they were sensitive cases


for reasons we all know. Because of the individuals who were involved


in that particular case. I was told as background there were other


cases and those were, it was said that they would be or might be the


subject of investigation in due course. That is what I expect it to


be. The superintending role that the Attorney General has over the


DPP, does that not involve following up on things to see


whether they have moved along or not? The particular case I was


talking about went along to a conviction last year. One case?


That was the case I was told about. As to what happened afterwards, as


to why this wider investigation that was referred to didn't take


place, you will, let me finish, please let me finish, you will have


to ask the police, or the director of public prosecutions, Ken


McDonald, what they did afterwards, that wasn't my responsibility. They


didn't ask me for any advice, they didn't give me any advice, that is


not what the Attorney-General do. - does. We have asked Ken McDonald


before we came on? I will look forward to what he has to say.


said there was one case in particular, that is The Good Muslmi


good and Glenn Mulcaire case. You were aware there - that is the


Clive Goodman and Glenn Mulcaire case. It is not my job to do that.


I was told about the particular case that led to conviction, not


one case, several cases. I was told the police, whose job it is to


investigate, let's be clear about it, in this country politicians and


even prosecutors don't tell the police what to do. Thank goodness


for that. They are operationally independent, it is their job to


investigate. My understanding, from the briefing I had, was that they


were investigating, that they had contacted a number of other people


who had been accessed, and didn't want to help them, that is what I


was told. As to what happened afterwards, then the police and the


Director of Public Prosecutions need to answer the question of what


happened. Do you think that there is a case for the former DPP to


answer, then, do you believe he should have done more? I think it


is not for me to say at the moment. I think it is important to know


what he says about T it is important to know what the police


say happened afterwards, what I'm making clear is that the suggestion


that I instructed, still less Government ministers, I don't think


Government ministers knew about this, as it would be quite wrong as


Attorney-General to tell other ministers about on going police


investigations. What I'm a saying is neither I nor any other minister


instructed anybody, or approve. you wish you had done more and


asked more questions? I have asked meself why not ask Ken McDonald


more about what took place. I look forward to what he said about it.


My job was done by responding on a particular briefing, the police are


there, good police force too, that is what we absolutely rightly


believe, investigating this cases, and an independent Crown


Prosecution Service, under its independent head, giving the police


advice. It would be interesting to know what it was to cause the


investigation not to continue in the way it seemed to be, from the


briefing I had, going to go. suggestion is you think the DPP


could have done more, you have mentioned him several times in this


conversation? The D psm P is the conduit to the Attorney General,


the DPP is the conduit to the Attorney General, not the police.


It appears they were seeking advice of the DPP. The answer they give


should be what people are looking The Murdochs' appearance in


parliament on Tuesday has ramped up the debate about the way their


company is run, both the fact it is not a one share one vote system,


and also the way Rupert Murdoch remains as the chief executive and


chairman of the business. Some sharehold rrs not happy, is there


anything they - shareholders are not happy, but is there anything


they can do about it? Phone hacking has dominated


politics here for weeks. Is it just a storm in a British tea cup?


A global tycoon like Rupert Murdoch must hope so. The News of the World


is less than 1% of our company, I employ 5 3,000 people around the


world. Who are proud and great and ethical, and distinguished people.


The scandal that has engulfed Rupert Murdoch, directly concerns


one tiny part of his empire, but it has the potential to damage his


business worldwide. His biggest problem now may be that


in denying knowledge of events involving the News of the World, he


has raised wider questions among News Corporation shareholders


worldwide, about the way the company is governed and about his


own competence as its head. One of the concerns I think shareholders


will have with that, is that we look to senior management to have a


strong grasp as to what's actually going on within the company. The


admission from Rupert Murdoch that he knew little or nothing as to


what was happening in certain parts of his business empire, was not


something which would encourage confidence in the systems and


controls that were in place within the group.


In the US some shareholders want change. The trade union ownedAm


Malagaated Bank of America have filed suits, and others have said


that News Corp doesn't have one share one vote, a corruption, it


says, of the governance system. Other city voices also want more


democracy in the company. If I look at the way the board is


structured, you might want to question the prevalence of one


particular family within that board. Whether there should be a greater


representation of genuinely independent non-executives, and


potentially a smaller representation for the family.


Besides its ethical mistakes in Britain, News Corp has made big


business mistakes in America. It bought Dow Jones, publishers of the


Wall Street Journal, for $5.6 billion in 2007, two years later it


was worth just $2.8 million. MySpace, the social networking


website was bought by $580 million in 2005, sold for only $35 million


this year. But one of the larger shareholders still has huge


confidence in the company. You have seen a business in the last 20


years that has evolved, moving from strictly newspapers into other


media, and moving more into a fee- based business model as opposed to


an advertising business model. I think there are an awfully lot of


good steps that have been made. I'm very impressed overall with the


company's success. Rupert Murdoch's now back in


America. More comfortable perhaps in a country where some big


investors still back him as News Corp's chief executive. Here is a


man, who has, even though he is 80 years old, Warren Buffet is 890


years old and doing well. These are - 80 years old and doing well.


These are men with long track records of great success. To not


want some of that wisdom in there, I think would be a mistake. As Will


Rogers said, good judgment comes from experience, a lot of that


comes from bad judgment. The phone hacking scandal has sparked


political reform in the UK, which some Americans are calling a


British spring. How much reform there will be in News Corp itself


depend on the markets to come. We are joined now in the studio by


Terry Smith, head of his company my other guest from Reuters.


Do you have issues with the way it is run? The voting structure thing


is important. The Murdochs only own 13% of the company, but pause 30%


don't have a vote they virtually control T other people put up the


majority of the money. You might this that won't matter and people


would ignore it when things are going well, but it is when things


are going badly, because there isn't a correct mechanism of scale.


Family-run businesses are like the poem, when she was good she was


very, very good, but when she was bad she was horrid. Do the funds


you run have shareholding? No. this reason? This is one of the two


prime reasons. One is the newspaper interests, not very profitable. The


other one is, we would never own shares in a company where a family


has control, without putting up most of the money. Contrary to the


view that Mr Murdoch seems to have, we don't think the ideal candidate


to run the country needs to be called Murdoch. Some of the smaller


shareholders are getting worked up by it, the big names don't seem


that bothered? They are being polite, Mr Jacman, you have to bear


in mind this is 12% of his fund. He's unlikely to be rude about it


at the moment. Yofpbg he's really very - I don't think he's really


very pleased. Do you think times are changing or is this some blip


shareholders will worry about and then it will blow over? Terry has


pointed to one of the key corporate governance issues which is the dual


shareholder. You have had one shareholder speak out about t it is


the biggest American pension fund, known as a campaigner on corporate


governance. They have been speaking out on the point Terry makes. That


is an important and influential voice. The interesting thing, I


think, in America, is going to be two things. First of all, whether


the crisis is of the corporate culture spreads to what News Corp


was doing in the United States. If you see any evidence that the


hacking extended to 9/11 victims, I think that will have a huge public


impact, you will see a lot more action from US shareholders.


just wondering on the corporate governance side of things, the


other issue that stands out is the fact he's both the chairman and the


CEO, is that again the kind of thing that seemed fine at the time,


but now it looks suspect? In the American side of things, it is, I


think it is best prak tus, but in the US it is more common than in US,


a lot of companies have the CEO and the chairman. Are there changes to


come in the wake of all of this? Yes, as we were saying, I think


there is pressure right now on the dual shareholding structure, the


other issue you are going to see is something Terry pointed to, which


is the question of nepotism, it is the sort of thing that doesn't


matter to anyone, as long as the company is making tonnes of money


and there is no clouds over it. Now there will be big questions over


Rupert Murdoch's age, and over whether he should have the right to


treat News Corp like a hereditary monarchy. If tomorrow we did have a


different heir apparent, a non- Murdoch heir apparent, Chase Carey,


for example, would that make you feel differently about News Corp?


It would make me feel differently. I would look at his strategy. It is


not just the phone hacking scandal that poipbtsdz to problems with the


country. They bought the Wall Street Journal for $5.7 billion and


lost �2 billion on it. MySpace was another loser. They bought the


company Shine, which the lawyers suing them called it rampant


nepotism. We have to find out whether the same capital


allocations practices would be the same. It is the same as flushing


money down the drain. Hearing a list like that, it sounds like a


company that could have done better, is this again one of the things


with the benefit of hindsight investors take a different view on?


Well the fact is that News Corp still has a lot of properties that


are making a lot of money. That is why shareholders haven't been


kicking up a fuss. In terms of corporate strategy, will the News


Corp of the future be run to maximise shareholder value to make


more money, or will it be run to maximise its public influence. Some


of the investments which Terry has pointed to, which haven't made


financial sense, have had the effect of giving News Corp a bigger


public platform. Most notably the Dow Jones purchase. That is


connected to Rupert Murdoch and the kind of man he wants to be. He has


shaped the country in his imanimal. You have pointed out the issues


that there r even after the appearance in parliament, which was


pretty ref latery in many ways, we which they faced a grilling, on


that the shares went up. It is a vote of confidence? You don't know,


the shares can't tell you, it may be somebody takes the view that


will be the end of the dynasty, as a result of him behave anything way


that is aged. I wouldn't read that much into it. There are a couple of


things that will lead to a conclusion, one of the things


touched upon already, what happens with regard to the allegations


about hacking of 9/11 victims, or their families. It is such an


emotive subject of the United States of America, it would be an


absolute bombshell if there are revelations to suggest that is true.


There was some sad news from the art world with the announcement


that the artist Lucian Freud had died at the age of 88.


We're here to talk about him. How do you think we will remember him,


his ligcy. I think undoubtedly somebody who removed the whole


traditional process, really, of inviting people to come into our


studio, either sit down in a chair, lie on a sofa, or even actually


recline on bare floorboards and submit yourself to the gaze of the


painter, who is there in the room with you. It is very much a kind of


intense relationship between the artist and the person he is


painting. It is such a distinctive style, I think lots of people, who


perhaps never even would have known the name, Lucian Freud would know


one of the paintings when they see them. Was there anything derivative


or somebody he would have made up on his own. When he was emerging,


it was a time when modern art was at its most experimental. Most


avant garde. A lot of people tended to dismiss him as somebody very


traditional. Somebody who was just going over old ground, and not


coming up with the goods. But gradually, by the 1970s, I think it


is true to say, that Lucian Freud had established himself as somebody


who was taking that skill and making it ref latery. He did paint


to the end? That was one of the most extraordinary thing about him.


Whenever I went to see him he was painting, not just one project, but


maybe two or three. He had two big studios in London, he would go back


and forth. He would shoot off and you would ask where he's going, and


he would say he's painting a horse in stable down the road. And he


would have a horse somewhere that would be a subject? The horse would


be in stable, it is a were, waiting for him to come and be painted. He


did do landscapes, sometimes, he painted his garden, he painted


views of streets in London sometimes. But he was one of those


guys, actually, who doesn't really like to travel very much. He was


never happier than when he was at home, in London, with the brush in


his hand, and with a lot of paint on the wall around him. You should


have seen the paint, that was attached to the wall in the studio,


it was extraordinary. Incredibly valuable works of art, but does the


value go up overright as well? overnight as well? It is hard to


imagine they could shoot up in value as they are so expensive.


That tends to happen when artists die, sometimes.


Thank you very much. Before we go let's have a quick look at the


This story is based on a statement that came out from Colin Myler and


Tom Crone. The Mail wants to know how many more poison victims, the


debts at the hotel. We will leave you with the pictures


of a journey that came to a final end today. After 30 years NASA's


space shuttle has entered aviation history, no more Cape Canaveral


countdowns and lift offs. The telescope is lifted up out of


This is President Obama, whoam I talking to. You are talking to the


crew of the space shuttle Atlantis. That was funny, I was just dialing


out for pizza! A ship like no other, its place in


history secured, the space shuttle As advertised for some time now,


the weekend is looking dryer and brighter than it has been. There


will be a few notable exceptions as we will see. Friday is shaping up


OK. There will be a few showers around, not as widespread as we


have seen. Across the Midland there may be one or two heavy showers by


the afternoon. Some sunshine inbetween. One or two of those


showers could effect affect the Test Match at Lords, we might get


away with T showers across the West Country, but the tip of worn wall


will be dry. Most of the showers further east. - Cornwall will be


dry. Most of the showers further east. Sunshine and light winds at


this time of year it feels pretty pleasant. One or two showers for


Northern Ireland, one or two showers for Scotland as well.


Nothing like as heavy or widespread as we have seen recently. 19


degrees in Glasgow. Further ahead into Saturday, across northern


areas, the improvement continues, a lot of dry and bright and warmer


weather, along the east coast it will be cloudier and breezy, the


same applies for England and Wales, the east coast is not too bad. This


is the big picture on Saturday. Dry and bright for many, along the east


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