31/08/2011 Newsnight


31/08/2011

Analysis of the day's headlines with Jeremy Paxman. Tom Heap visits Croatia, home to the richest cave fauna in Europe, which is under threat by pollution and development.


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When is a delay a defeat? It looks as if the reform of the banking

:00:12.:00:16.

system, which everyone so recently agreed was urgently necessary,

:00:16.:00:21.

isn't going to happen any time soon. So, economics editor, have the

:00:21.:00:25.

bankers won? Jeremy, there are ten- year-old boys who play football for

:00:25.:00:31.

England before any banking reforms are introduced at this rate. If the

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coalition can't corner the bankers any time soon, what about top tax

:00:36.:00:41.

payers. Getting the fabulously wealthy to shell out for just the

:00:42.:00:48.

right vintage royal Royce or Bentley has never been difficult,

:00:48.:00:52.

but paying taxes, not so much. That is the great battleground of

:00:52.:00:56.

British politics at the moment. We ask politicians from the three main

:00:56.:01:00.

parties how much tax we should all pay, and how it should be raised.

:01:00.:01:04.

Before he got the prime ministerial limo, David Cameron signalled he

:01:04.:01:09.

was a social liberal, but is he? What, for example, is he trying to

:01:09.:01:15.

do to the abortion laws. And we go deep under the Balkans, to see the

:01:15.:01:21.

finest cave wildlife in the world. Is the survival of extraordinary

:01:21.:01:31.
:01:31.:01:32.

life forms put at risk by prospect of membership of the European Union.

:01:32.:01:36.

It will be a couple of weeks yet until we learn what fate is

:01:36.:01:39.

proposed for the banking system of this country. To the obvious

:01:39.:01:43.

irritation of people like the Business Secretary, Vince Cable,

:01:43.:01:48.

the bankers' advocate claim banking reform will derail the country's

:01:48.:01:50.

fragile recovery, and tonight the Government has indicated it has

:01:50.:01:57.

listened to them. Any ri forms won't take - reforms won't take

:01:57.:02:02.

effect any time this side of the election. Our economics editor is

:02:02.:02:05.

here. So just talk us through it?

:02:05.:02:09.

This morning it was all war, war between Vince Cable and George

:02:09.:02:12.

Osborne, the Liberal Democrats and the banks. You don't get headlines

:02:12.:02:16.

like this unless somebody has rung up a few newspaper editors and

:02:16.:02:23.

talked to them. The sub stafpbs Liberal Democrats want a faster

:02:23.:02:28.

pace - the substance was Liberal Democrats want faster pace than the

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Tories, and there was a split Quotes:

:02:36.:02:40.

You fast forward to this afternoon, and Vince Cable goes on camera, it

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is not so much war. There is no division, what I said to the Times

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this morning is that given all the financial volitility and

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instability that is in the world at the moment, it is all the more

:02:53.:02:58.

important that we have reform of the banking system. How we do that,

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we have got to await the final report of the Banking Commission,

:03:01.:03:07.

that is in a couple of weeks time, that will deal with the mechanisms

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and timing. Wonderful. What is the substance of

:03:10.:03:14.

the banking reform proposals? British banks are universal banks,

:03:14.:03:19.

they do investment, retail, business lending, high street

:03:19.:03:23.

lending, the point of the reform is to stop them blowing up, like three

:03:23.:03:28.

of them did so spectacularly in 2008. The idea behind the

:03:28.:03:33.

independent Banking Commission's proposal, is first of all, you

:03:33.:03:42.

cause them all to hold more capital, �10 for every �100 of risk. Then

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there is struck tue, the ring- fencing proposal amounts to this,

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banks that have investment arms, the risky bit, and the retail arm,

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with the savings from the high street, you force them to treat the

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retail bit as a separate bank. You give it enough money to survive if

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things all go wrong. The banks they say they can't do this, look at the

:04:00.:04:04.

economy, the economy is flatlining, more businesses are screaming out

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for credit, we can't seem to provide enough of it, some

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businesses are so busted they can't even have the credit were we to

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provide it. It has to be postponed, and some briefings, out of the

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banking sector, have mentioned this year, 2019, as the point at which

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he they would like it to come in. Some people in the banking sector,

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some experts in banking think this is a little bit is ingenious.

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banks are playing - Disingenious. The banks are playing a canny game,

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they know change is on the way and likely. It is in their interests to

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delay this change for as long as possible, to defer it for as long

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as possible, in the hope that in the end it will go away. There is a

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hope that they are under pressure at the moment to extend credit,

:04:53.:04:57.

clearly the economy is fragile, but I think there has to be a limit to

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this, you can't keep on pushing this out forever. If we are going

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to have meaningful banking reform it needs to happen in a reasonable

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time frame, in my opinion. politics of all of this?

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Banking Commission's proposal on ring-fencing is about the most

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timid one could imagine of all the things on the table. They got very

:05:15.:05:18.

annoyed when I and other journalists suggested they had been

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nobbled, they were saying everything is still on the table.

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The more radical proposals could still happen. Then, George Osborne

:05:25.:05:30.

pre-empted them, by accepting this least radical of all the proposals.

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And Vince Cable is known to want to go further. It is not just any old

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issue for Vince Cable, he has written a book about why they

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should go further and split the banks up. Those close to him have

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always thought, if he doesn't get something close to what he wants on

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this, he does begin to look a little bit like a hostage. This is

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his issue, if he doesn't get it, what is he there to do.

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To discuss if the bank reforms should be delayed for so long, I'm

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joined by the former Deputy Chairman at Barclays, and external

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director at the Bank of England, and also David Pitt-Watson, a fund

:06:06.:06:09.

manager, and maybe of the cross- party Banking Commission. A

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precursor to the Vickers Commission, which we so eagerly await. The

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banks argue it is risky without a delay, is it? Let's be clear about

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the problem we have here, where you have a universal bank, you have the

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retail bank that's lend to go businesses and taking our deposits,

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and you have what people call the casino banking. If the banks are

:06:36.:06:43.

too big to fail, the tax-payers are subsidising the casino banking. The

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aim of the ring-fencing is to stop people having to subsidise that

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casino banking. That seems to me to be entirely reasonable. There is a

:06:50.:06:54.

second reason that you want the ring-fencing, Jeremy, if people

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think they are in institutions that are too large to fail, they will

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keep lending and lending and lending, they will know they are

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bailed out because they are too large to fail, the markets don't

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work. Getting this implemented, it will take a little time, the notion

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it will take years and years and years, I can't see why that isness

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radio. You accept at some point - Necessary. You accept at some point

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there will be separation? No, I don't. I we need banks to be safe,

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but once you have the concept of "too big to fail", that doesn't

:07:30.:07:33.

come from the bankers, but politicians who don't want

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depositors to lose any money. Once you have the two big to fail

:07:39.:07:49.
:07:49.:07:49.

principle, you have to have regulation to control what the

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bankers do. The trouble with regulation in trying to run a bank

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sensibly and prudently, is everybody behaves right up to the

:07:57.:08:00.

line of regulation. As soon as that happens then you get danger. So

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what I would do, is to try to go back to avoiding the totally too

:08:09.:08:14.

big to fail presence pel, and try to ensure, if - principle, and try

:08:14.:08:19.

to ensure, if bank failed, all creditors, including depositors,

:08:19.:08:24.

would lose 10% of their money, and that would put a great premium on

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running a bank safely, and that is what is needed, there would be

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reward for those running bank safely. What do you make of that

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argument? It is radical proposition, what is being suggested. I don't

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think most people put their money in bank thinking it could all go

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wrong and they will lose some of it. If we are putting money in bank it

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is sensible that money should be ring-fenced and looked after

:08:48.:08:52.

properly. But we need some how not to have the situation, and Martin

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would agree with this, where, for years and years and years, because

:08:56.:08:59.

of being too big to fail, that the investment banking activities of

:08:59.:09:04.

our large banks are effectively being subsidised, in no small

:09:04.:09:09.

measure, by the taxpayer, and I think Martin would agree with that.

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They didn't ask for that subsidy, that comes from a political

:09:12.:09:16.

decision not to let the banks fail. The banks that got us into this

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trouble, in 2007, were not universal banks, they were New York,

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Bradford & Bingley, and Lehman Brothers, none of which were

:09:25.:09:30.

universal banks. The universal banks were Barclays, HSBC, and

:09:30.:09:36.

Lloyd's before the merger, they did not get us into trouble. The Royal

:09:37.:09:43.

Bank of Scotland though? That was nothing to do with the problem of

:09:43.:09:49.

running universal banks, that was due to a series of absolutely

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insane acquisitions, which he had made, which made it totally unsound.

:09:54.:10:00.

It was not failure of a universal banking system. This is addressing

:10:00.:10:07.

a problem which isn't really there. If a universal bank is run sensibly,

:10:07.:10:11.

it isn't danger. What do you make of the argument that these

:10:11.:10:15.

proposals really only address banking institutions in this

:10:15.:10:19.

country, particularly in London, of course, and that they therefore, if

:10:19.:10:24.

implemented, put this country at a serious disadvantage as regards the

:10:24.:10:28.

rest of the world? Of course other countries have different model,

:10:28.:10:33.

much more draconian in the United States. A different but much more

:10:33.:10:38.

draconian measures in Switzerland, for example. As you said in your

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introduction, the ring-fencing, rather than the spliting of the

:10:41.:10:46.

investment bank and the retail bank, actually is one of the softer ways

:10:46.:10:50.

of achieving what it is we are trying to achieve, which is that

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tax-payers don't subsidise investment banking activities, and

:10:53.:10:57.

the investment banking activities are subject to the market. So other

:10:57.:11:02.

countries are doing this in slightly different ways. I don't

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think there will be a such exodus from London because of this.

:11:06.:11:09.

Frankly, if you were Angela Merkel, would you wish to subsidise an

:11:09.:11:12.

investment bank. Why are you shaking your head so much? It would

:11:12.:11:18.

be great disadvantage to London, it would make UK banks, UK-owned banks,

:11:18.:11:21.

much less competitive internationally, if we weren't

:11:21.:11:25.

allowed to have universal banks. you think the banking sector is too

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big in this country? I don't think it is too big if it is sensibly run.

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It is a bit of an "if" if you take the experience of the Royal Bank of

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Scotland? Not to me, my approach would make them sensibly run. I

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think Vince Cable has always been very anti-banks, and he has always

:11:46.:11:50.

thought that the banking system was far too big for the rest of the

:11:50.:11:54.

economy. A cure to that is to make the rest of the economy bigger.

:11:54.:11:59.

Actually the banking system, not only does it employ hundreds of

:11:59.:12:05.

thousands of people, which is very important, it also contributes an

:12:05.:12:09.

enormous amount of tax. Our banks are regarded as world leaders. So

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it is something which you throw away at your peril.

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I would agree with that. One point I think is funny, which is how we

:12:20.:12:26.

have managed to link the ring- fencing of the banks to growth in

:12:26.:12:31.

the economy. Because I can't see where there is an economic linkage

:12:31.:12:35.

there, the bit that lends to the economy, will still be within the

:12:35.:12:39.

ring-fence. It will still have a low-cost of capital. This shouldn't

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really make any difference to the growth in the economy. I don't

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quite understand why that argument has come from.

:12:45.:12:49.

Thank you both very much. The question of what to do with the

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banks has illuminated the divisions within the coalition. When it comes

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to managing the economy, Conservative and Liberal Democrats

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instincts are very often completely at odds, nowhere is that more

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starkly illustrated than when it comes to tax, who should pay it and

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how much. The flash point is the 50%, top rate of income tax for

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people earning more than �150,000 a year. It was brought in by the last

:13:16.:13:21.

Labour Government, the Liberal Democrats are fans, plenty of

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Tories think it is absurd and fairly unnecessary. As political

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slogans go at the moment, tax the rich is hard to beat. Rich is one

:13:31.:13:36.

of the maddeningly hard words to define, assuming you can decide who,

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the next big problem is how. Getting the fabulously wealthy to

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shell out for just the right vintage Rolls-Royce or Bentley, has

:13:45.:13:50.

never been too difficult, paying tax, not so much. How to make them

:13:50.:13:53.

pay more? Well that is one of the big battlegrounds of British

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politics right now. Before the last election, Labour

:13:57.:14:03.

set a tax trap, the Conservatives as obvious as a high-visibility

:14:04.:14:08.

jacket. Introducing a new 50p tax rate on incomes above �150,000, to

:14:08.:14:13.

kick in after the election. They were hoping that the Conservatives

:14:13.:14:18.

would promise to scrap it. So far the Conservatives, or the coalition,

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indeed, hasn't, but George Osborne, the Chancellor, desperately wants

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to. If only he could find the political cover.

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I think the only way they are going to resolve this is to swap the 50p

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tax with something that looks just as painful, equally as painful for

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the high earners, whether that is going to raise much money is

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debatable, I don't think this is about taxation about raising

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revenue, this is about taxation for political purposes not economic

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ones. Getting the mechanics of the tax system right, so the rich pay

:14:50.:14:53.

more, is notoriously difficult, people change their behaviour, and

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there are unintended consequences, for example, you could be the

:14:59.:15:09.
:15:09.:15:10.

billionare owner of a �500,000 Bentley and not pay tax. If you

:15:10.:15:16.

were struggling to put a clapped out Ford on the road, that is �100

:15:16.:15:26.
:15:26.:15:36.

The public is urging the Government to lower taxes. By bringing in

:15:36.:15:46.
:15:46.:15:52.

Popular tax cuts would cost the Exchequer �15.5 billion. The

:15:52.:15:55.

Liberal Democrats in the coalition want to introduce a mansion tax to

:15:55.:15:59.

hit the rich where they live, by hitting them where they live, or at

:15:59.:16:03.

least live for a few weeks in the summer, most years.

:16:03.:16:07.

In some of the more prestigious locations in London, the properties

:16:07.:16:12.

are being bought by people not so much to live in, but as somewhere

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to keep their wealth. Safe during the troubled times. These are the

:16:17.:16:21.

biggest safety deposit boxes in the world.

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True, some of the pads here could set you back tens of millions of

:16:25.:16:30.

pounds, but look on the bright side w a good accountant, and the right

:16:30.:16:34.

status, the only tax you will have to pay on buying, owning or selling

:16:34.:16:41.

them is �26 a week in council tax. Whilst the community secretary,

:16:41.:16:44.

Eric Pickles, has called a mansion tax, a big mistake, other

:16:44.:16:50.

Conservatives think there might be something in the idea.

:16:50.:16:56.

supposedly have 5% stamp duty above �1 million for house, but all those

:16:56.:16:59.

houses are sold within company tax wrappers. Essentially the rich

:16:59.:17:04.

people buying and selling these are paying 0.5%, rather than 5%. We

:17:04.:17:09.

need to close that tax loophole. I would also like to see capital

:17:09.:17:13.

gains tax applied, to overseas residents, who are currently still

:17:13.:17:17.

exempt from that. Yes they should investment in business assets and

:17:17.:17:22.

create jobs, but when it is UK property, I don't see why we would

:17:22.:17:24.

want to encourage them pricing everyone else out of the market,

:17:24.:17:29.

not living in that property, then selling it and not paying any tax.

:17:29.:17:35.

Labour too has rather changed its tune. Remember how Peter Mandelson

:17:35.:17:38.

once famously declared himself intensely relaxed about people

:17:38.:17:42.

getting filthy rich. Well, listen to the current leader. My party

:17:42.:17:47.

must change. We were intensely relaxed about what happened at the

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top of society, I say no more. Some commentators say that now in

:17:54.:17:57.

all parties the political heart is overruling the economic head.

:17:57.:18:00.

are going through a period in Britain right now where people

:18:00.:18:03.

aren't asking how do we get the most money out of the rich, they

:18:03.:18:09.

are asking how can we be seen to hurt the rich. It is a very big

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question, I'm concerned this will lead us back to where they were in

:18:12.:18:16.

the 70 where is the very wealthy will do their business elsewhere.

:18:16.:18:21.

It might be the equivalent as the Rolling Stones leaving Britain, and

:18:21.:18:27.

Michael Caine not doing any films here. They are a few examples. What

:18:27.:18:31.

about the entrepeneur, the scientists, the artists, who came

:18:31.:18:36.

when we cut the top rate of tax, they may go now. In troubled

:18:36.:18:39.

economic times there aren't many votes in speaking up for the

:18:39.:18:44.

superrich. Everyone right now is competing to be the party of the

:18:44.:18:48.

underdog. Here to discuss this is the Conservative MP, John Redwood,

:18:48.:18:52.

Lord Newby, who speaks on Treasury issues for the Liberal Democrats,

:18:52.:18:59.

and the shadow Treasury minister, Chris Leslie. What is tax for, it

:18:59.:19:05.

is a force for good in itself and it pays the bills? It is to pay the

:19:05.:19:10.

bills for our large and expanding public sector. We have record

:19:10.:19:14.

spending every year under the coalition and as we did under

:19:14.:19:19.

Labour, we need to pay those pills. Can taxing be a force for good in

:19:19.:19:23.

itself? It is the price you pay for a civilised society, if you don't

:19:23.:19:26.

tax people and have public service what kind of society is that. You

:19:26.:19:30.

don't want to tax people to punish them, you want to tax people in a

:19:30.:19:35.

way that is seen as far as possible to be fair. I think you probably

:19:35.:19:40.

want to have as low tax as possible generally, but not at the expense

:19:40.:19:44.

of good quality public services. We have always taken the view we want

:19:44.:19:48.

progressive taxation, in other words, fairer taxation, where the

:19:48.:19:52.

wealthiest people pay the greatest share. That is really the principle.

:19:52.:19:56.

But ultimately you are coming together as a society, pooling

:19:56.:20:00.

revenues, money, and as a society, as a community, achieving more than

:20:00.:20:04.

you would achieve as individuals alone, with health insurance, for

:20:04.:20:10.

example, rather than an NHS. Let's take the specific question of the

:20:10.:20:13.

50p rate of tax, we don't know, and the Chancellor of the Exchequer

:20:13.:20:16.

doesn't know how much this tax is raising, and won't know for a while.

:20:16.:20:21.

It is said by many to be a Philing amount by comparison with the rest

:20:21.:20:27.

of the - Philing amount by comparison with the rest of the

:20:27.:20:32.

amounts. There is a dispute about that, HMRC are being asked to look

:20:32.:20:35.

again. The last time the Chancellor gave an answer in the House of

:20:35.:20:45.
:20:45.:20:47.

Commons, it was �3 billion, it is not small sum at all. I think he

:20:47.:20:53.

has political motive. What I'm getting at is it a good thing?

:20:53.:20:58.

all want to tax the rich more to make a bigger contribution to the

:20:58.:21:03.

public sector. Because it is fairer the richest pay a bigger proportion.

:21:03.:21:07.

Fairness enters into it? Of course. What are the rates you optimise to

:21:07.:21:12.

get the biggest rates from the rich. When we cut it to 40% in the 1980s,

:21:12.:21:16.

after a period of high tax rates, the amount the rich paid shot up,

:21:16.:21:20.

both in absolute terms and as a proportion of the total. We don't

:21:20.:21:25.

want to go back to brain drain Britain of the 1970s which proved

:21:25.:21:29.

you were cutting off your nose to spite your face with the high rates.

:21:29.:21:33.

How do you encourage rich people to pay more tax? Nobody enjoys paying

:21:33.:21:38.

tax. Rich people will not pay tax. Warren Buffet, one of the richest

:21:38.:21:43.

men in the world said he wanted to pay more tax? I welcome that. Quite

:21:43.:21:47.

a number of his friends. Unfortunately he's not living here?

:21:48.:21:51.

He needs to just send a cheque in. One of the interesting questions is

:21:51.:21:55.

Warren Buffet thinks he should be paying more. A lot of French

:21:55.:21:57.

industrialists are saying they should be paying more. We have

:21:57.:22:01.

heard nobody in the UK suggesting that perhaps, given the

:22:01.:22:05.

difficulties we are in, at the top end of the income scale, that they

:22:05.:22:10.

might be paying more, it is an interesting thing. I think that tax,

:22:10.:22:15.

that the rich should be paying what seems to be a fair whack. The 50p

:22:15.:22:21.

rate, in my view, is completely justified as long as we have a

:22:21.:22:26.

fiscal crisis. We moved as a party, we moved off it, because we thought

:22:26.:22:30.

over the long-term, once people are paying over half their income in

:22:30.:22:35.

tax there are disincentives. Now we think they should be paying it.

:22:35.:22:39.

socially corrosive is it, as we saw in that report, there are very

:22:39.:22:42.

large numbers of extremely rich Russians and others, living

:22:42.:22:46.

particularly in the capital, and not making a great contribution, as

:22:46.:22:49.

far as we can see, apart from driving up property prices so other

:22:50.:22:54.

people can't afford to live there. How socially corrosive is that, how

:22:54.:22:58.

do you tax them? That is why we are in favour of the called mansion tax.

:22:58.:23:05.

Last year 60% of all houses sold in the UK that were valued at over �2

:23:05.:23:10.

million, were bought by foreigners, they are not even non--dom, they

:23:10.:23:16.

don't live here, they make no contribution. It is like a safety

:23:16.:23:19.

deposit box, it is a safe haven. Our view is they should be paying

:23:19.:23:22.

something for the privilege of owning property here. The reason

:23:22.:23:26.

they want it has to be paid for, in part, it is the security, it is the

:23:27.:23:35.

fact that it is a stable society. What would you think as a proposal?

:23:35.:23:39.

It is not a proposal I'm seeking, you have to be careful with capital

:23:39.:23:44.

gains tax. We have seen the increase in the rate to 28%, as a

:23:44.:23:48.

result the Treasury is forecasting a �500 million revenue loss

:23:48.:23:53.

compared with this year, that is the full year effect of the rate.

:23:53.:23:58.

That makes point, if you overdo the rate you tax the rich less. Most of

:23:58.:24:02.

the guys aren't paying any capital gains tax at all, should they?

:24:02.:24:08.

Obviously one needs to look at non- dom taxation in the round and make

:24:08.:24:10.

that calculation about how much contribution they do make.

:24:10.:24:15.

should be looked in to at least then? Of course they need to look

:24:15.:24:19.

at what contribution people are making. They are making no

:24:19.:24:22.

contribution? That is an assertion, I suspect you will find that

:24:22.:24:25.

foreign capital and foreign purchases coming to London is

:24:25.:24:29.

making a big contribution. London has been the outperforming economy

:24:29.:24:33.

in the Labour years and again under the coalition. It is something to

:24:33.:24:36.

do with the vibrancy and the money being brought into London. What

:24:36.:24:40.

would you do? What you have to do is make sure you have those fair

:24:40.:24:47.

principle that is you apply, at a time when - principles that you

:24:47.:24:50.

apply. At the time when George Osborne is increasing taxes on the

:24:50.:24:55.

poor, not just VAT, but big changes to housing benefit, cutting tax

:24:55.:25:01.

credits. To even talk about cutting this 50p rate on that richest 1

:25:01.:25:09.

bears in society does seem very perverse. This is the interesting

:25:09.:25:13.

point about which priority to tax cuts are there. Which taxes should

:25:13.:25:16.

be cut. You have said you are extremely doubtful about the 50p

:25:16.:25:20.

rate of tax? I think we are collected less revenue. I want to

:25:20.:25:24.

tax the rich more and poor less. I would agree with the Liberal

:25:24.:25:27.

Democrats about taking more people out of tax. What is the priority

:25:27.:25:31.

for tax that should be cut? I would take people out of income tax in

:25:31.:25:34.

the way the Government is doing. the key issue of the day is this

:25:34.:25:37.

flatlining economy we have got with no growth, you need to get some

:25:37.:25:42.

money into the pockets of ordinary people, which is why we have

:25:42.:25:45.

suggested a temporary VAT cut in order to kick start the recovery.

:25:45.:25:49.

It has already been killed off by a Spending Review that is going way

:25:49.:25:56.

too far and too fast. If we could do that and have a steadier pace of

:25:56.:25:58.

Spending Review changes, that probably would be the best way to

:25:58.:26:03.

get growth back in. If you get growth, you get revenue for the

:26:03.:26:08.

Exchequer, that is the best way. Cutting VAT at this point is hugely

:26:08.:26:11.

expensive, if you are doing anything, you should have a small

:26:11.:26:16.

number of targeted tax cuts, which would immediately stimulate growth.

:26:16.:26:20.

For example, the Government introduced a tax holiday on

:26:20.:26:24.

National Insurance, employees in start-up, it hasn't worked because

:26:24.:26:28.

not enough new companies have started. But existing companies,

:26:28.:26:32.

who want to take on more people, are worried about the cost of doing

:26:32.:26:37.

it, if you extended that holiday to existing small firms, you have a

:26:38.:26:42.

really good targeted way of increasing employment and

:26:42.:26:46.

consumption at the same time, rather than across the board, very,

:26:46.:26:52.

very expensive VAT cuts. Thank you all very much indeed.

:26:52.:26:58.

Last night we reported on who might in future advise women thinking of

:26:58.:27:05.

having an abortion. This was intended to be unbiased, but

:27:05.:27:07.

Newsnight found questions raised about how impartial soment of the

:27:07.:27:13.

organisations are. Is this a move away from the social liberalism of

:27:13.:27:18.

David Cameron's early days as Prime Minister, to a more morally sense

:27:18.:27:22.

rouse tone. The Government said it wanted to

:27:22.:27:25.

change the rules so clinics offering termination services are

:27:25.:27:35.
:27:35.:27:42.

not also tasked with advising. But This is supposed to be an

:27:42.:27:44.

organisation giving independent advice. Today Care Confidential

:27:45.:27:50.

said the manual was no longer in use. But the very existence of this

:27:50.:27:53.

advice has raised questions about whether the Government is seeking

:27:54.:27:59.

to give a privileged position to a particular moral view. In response

:27:59.:28:09.
:28:09.:28:18.

today, Number Ten appeared to But over recent months, senior

:28:18.:28:23.

Tories have seemed increasingly comfortable talking the language of

:28:23.:28:28.

morality. When the Archbishop of Canterbury attacked welfare

:28:28.:28:32.

policies, Iain Duncan Smith argued that there was a moral imperative

:28:32.:28:37.

to tackle worklessness. And following this month's riots, David

:28:37.:28:45.

Cameron spoke of "restoring a stronger sense of morality". Well

:28:45.:28:49.

tomorrow morning's Guardian is reporting that Number Ten is

:28:49.:28:54.

proposing to retreat from the proposals on the abortion law

:28:54.:28:58.

reform, but Downing Street is saying tonight that there are no

:28:58.:29:02.

such plans, we understand that Andrew Lansley is one of the people

:29:02.:29:06.

who has said he will vote against the proposal if it comes to a vote.

:29:06.:29:16.
:29:16.:29:19.

With us now are my guests. What are we to make of this

:29:19.:29:24.

position on the abortion laws? think Number Ten is trying to

:29:24.:29:27.

distance itself from the Nadine Dorries amendment very, very fast.

:29:28.:29:31.

I think you will see sunnor people in the coalition come out in the

:29:31.:29:35.

next few days doing just that. Mr Cameron is comfortable to a

:29:35.:29:38.

point with moral language, you think you said in your package

:29:38.:29:41.

after the riots he spoke of the need to put morality back into

:29:41.:29:45.

public life, but a little bit of morality in public life goes a long

:29:45.:29:50.

way, in terms of its political impact. What you don't want to end

:29:50.:29:55.

up with is a big argument about abortion, he didn't intend to have

:29:55.:29:58.

that. It is a backbench amendment, it is interesting for those

:29:58.:30:02.

preoccupied by this, and motivates them strongly, but it is not

:30:02.:30:06.

something he would want to define the coalition in any way. What is

:30:06.:30:10.

your response to the u-turn reports? It looks like the

:30:10.:30:13.

Government was initially in favour of what is a liberal proposal to

:30:13.:30:17.

extend the number of organisation who is can provide counselling to

:30:17.:30:22.

women seeking abortions. When it looked like the proposal was about

:30:23.:30:27.

restricting choices to the so- called independent advisers and

:30:27.:30:30.

excluding the abortion providers from the pool of organisations who

:30:30.:30:35.

could deliver the advice, they backed off. I think what actually

:30:35.:30:38.

they believe in is quite a liberal proposal, which is to say there

:30:38.:30:44.

should be as many organisations providing advice as possible, that

:30:44.:30:49.

shouldn't be an exclufive list - exclusive list. You wouldn't call

:30:49.:30:54.

Nadine Dorries as a liberal on this? Her original frame was to

:30:54.:30:58.

widen the choice of organisations, that is quite liberal. Is it your

:30:58.:31:02.

reading, then, that this is an administration that is socially

:31:02.:31:08.

liberal? I think it is socially liberal. But social liberalism

:31:08.:31:11.

always comes to a point where people say we know what you are

:31:11.:31:16.

liberal about, and the big problem is what to do about it. That is

:31:16.:31:21.

where it gets awkward for David Cameron. He wants to be seen as

:31:21.:31:24.

socially caring, sometimes the things you need to do as socially

:31:24.:31:28.

caring come up against socially liberalism. In the autumn he will

:31:28.:31:33.

go on about care homes and wanting to have more children taken out of

:31:33.:31:37.

care and adopted or fostered. You have to make stringent decisions

:31:37.:31:40.

and some people disagree or take different views. Whether you call

:31:40.:31:45.

that socially liberal, he would call it socially responsible.

:31:45.:31:50.

he talks, as he talked after the riots about a sickness in our

:31:50.:31:55.

society, what side is he coming at that from? He's being Conservative

:31:55.:32:01.

there, he's recognising, firstly, the response to the riots was one

:32:01.:32:07.

of imposing law once more and asserting primacy of law and order.

:32:07.:32:11.

His analysis and the explanation of what is going wrong in society, it

:32:11.:32:15.

is historic for him, he has been talking since he became Tory Party

:32:15.:32:20.

leader in 2005 about the importance of restoring the social bond

:32:20.:32:22.

between communities and family and restoring a healthy society. I

:32:22.:32:28.

don't think that runs counter to a liberal world view, but it is one

:32:28.:32:32.

that requires a recognition of the importance of relationships,

:32:32.:32:35.

tradition, stability, and so on. There will be tensions, there are

:32:35.:32:39.

tensions within all of us. We all want to be free and determine our

:32:39.:32:44.

own fate and destiny and what we do with our bodies, in this question

:32:44.:32:47.

about abortion, on the other hand we want to belong and be part of

:32:47.:32:51.

something. We want to be part of a community that we can believe in.

:32:51.:32:54.

This tension is natural one in the human heart, and one that politics

:32:54.:33:01.

is all about resolving. Policy by policy. A lot of it is with people

:33:01.:33:04.

talking about the role of the state. They are taiching the state to what

:33:04.:33:09.

their own view is. If Mr Cameron is doing something that is seen to

:33:09.:33:12.

push back the state he can't be socially responsible. That is

:33:12.:33:17.

something he has to be clearer about. You can see's constantly at

:33:17.:33:22.

the moment being accused of not being a moderniser. If you look at

:33:22.:33:25.

the accusation it is modernising in the way of the Labour Party. Or

:33:25.:33:29.

taking a solution that relies on the state in some form. He has

:33:29.:33:36.

never really, despite many years, and work by people like us, he has

:33:36.:33:41.

never found the clear language to say the state can't be the provider

:33:41.:33:46.

of all solutions and it is better to have a lot of other providers to

:33:46.:33:51.

help with things. And then with the abortion row how quickly it is

:33:52.:33:58.

coming up questioning if he's an older moralising politician. It is

:33:58.:34:02.

difficult for him. It is a difficult thing to prevent? Anne is

:34:02.:34:06.

right, it is difficult to articulate a philosophy of freedom

:34:06.:34:09.

in the context of the social obligations we have and the Prime

:34:09.:34:14.

Minister believes in. There are two forms of modernisation, there is

:34:14.:34:17.

the modernisation Tony Blair epitomised, all about the fetish

:34:17.:34:21.

for the future, and liberty and individual freedom. And the

:34:21.:34:23.

modernisation I think David Cameron represents, which is recognising

:34:23.:34:27.

what has gone wrong with society, and the need to restore the social

:34:27.:34:31.

ponds and the relationships so key to social well being. That doesn't

:34:31.:34:34.

always require a socially liberal set of policies, it actually

:34:35.:34:40.

requires some fairly old fashioned policies, about family formation,

:34:40.:34:44.

encouraging couples to stay together. That hasn't happened and

:34:44.:34:48.

the coalition hasn't done. That Those who say it is an incredibly

:34:48.:34:51.

right-wing Government, are wrong. Conservative backbenchers think the

:34:51.:34:56.

Liberal Democrats tail is wagging the Tory dog in the Government and

:34:56.:34:59.

they have had to abandon their more socially Conservative instincts. If

:34:59.:35:04.

you look at what they believe in, they would like to see more of the

:35:04.:35:07.

policies n tax and benefits in particular, that sustain healthy

:35:07.:35:11.

families, and run something against the libertarianism that we saw in

:35:11.:35:15.

the last years of Labour. You are getting slightly into pick and mix

:35:15.:35:17.

here. The problem they have politically is sometimes, it is

:35:17.:35:22.

hard on any given issue to guess straight away which way they are

:35:22.:35:25.

going to move. You could say that is a good thing, they are thinking

:35:25.:35:31.

on their feet and being flexible. But we know that politics is about

:35:31.:35:35.

reckon ability and leadership, if you come back and then address the

:35:35.:35:43.

riots in that tone, and I think that was a tone that would be

:35:43.:35:48.

recognisably Conservative, but on the other hand you are saying you

:35:48.:35:52.

are socially liberal and looking at everything with an open-mind. He

:35:52.:35:57.

has to find clarity of tone in the conference season, I think the tone

:35:57.:36:00.

is incoherent rather than the policies. In a couple of years time

:36:00.:36:05.

Croatia will become the 28th member of the European Union. It is seen

:36:05.:36:09.

there as way of finally escaping the visceral subterranean politics

:36:09.:36:14.

of the Balkans. But for the real underground of the country, its

:36:14.:36:17.

literal underground, and specifically the astonishing

:36:17.:36:21.

variety of wildlife, membership of the EU is another proposition

:36:21.:36:26.

already. The EU has strict concerns for the variety. The amazing

:36:26.:36:30.

animals of the Balkan caves, the best cave wildlife in the world,

:36:30.:36:33.

ought to be protected. As we report, the prospect of joining the

:36:33.:36:43.
:36:43.:36:51.

European Union might actually be endangering them.

:36:51.:36:59.

Welcome to the realm of the first Europeans. The last survivors of an

:36:59.:37:05.

earlier earth, who found refuge below.

:37:05.:37:08.

They have travelled a unique evolutionary journey, which

:37:08.:37:18.

scientists are only beginning to map. Look what we have found, it is

:37:18.:37:23.

a sponge. Jana Bedek and her team have just

:37:23.:37:28.

won an international award for revealing the secret life of caves.

:37:28.:37:31.

And championing the fact that when it comes to cave dwellers, Europe

:37:31.:37:39.

has the best. The other continents have their own

:37:39.:37:45.

animals, rich fauna within rainforest, Maureen ecosystems and

:37:45.:37:49.

so on, in this area of Europe we have cave fawn national cirriculum

:37:49.:37:54.

really important at world level. This is the only fresh water cave

:37:54.:37:58.

sponge in the world. Recent scientific advances have shown us

:37:58.:38:01.

just how important cave life is. It is very distinctive, there could be

:38:01.:38:06.

waeb of life in this cave that is completely different from one a

:38:06.:38:10.

kilometer or two down the road. And yet, just as we are realising how

:38:10.:38:17.

important cave life is, it comes under particular threat.

:38:17.:38:21.

These unusual entities cling to existence in a massive shard of

:38:21.:38:25.

limestone, which splits Croatia and parts of its Balkan neighbours.

:38:25.:38:29.

Over many millions of years, water has dissolved untold thousands of

:38:30.:38:34.

caves, tunnels and rivers. Here, the underworld is much more than a

:38:34.:38:43.

myth. But modern Croatia seems untroubled

:38:43.:38:48.

by what lies beneath. It they are emerging from a recent turbulent

:38:48.:38:53.

past, with an ardent desire to develop. Politically that means

:38:53.:38:57.

joining the European Union. Economically it means lots more

:38:57.:39:03.

roads, railways and power plants. The Government's view is that with

:39:03.:39:07.

40% of the country undershot by cave networks, these precious

:39:07.:39:13.

environments must give up some treasures. Some caves have been

:39:13.:39:21.

destroyed because of a need for building some very important

:39:21.:39:26.

national ij fra structure. Of course the - infrastructure. Of

:39:26.:39:30.

course in nature protection we have to think first of all to protect

:39:30.:39:34.

them. If some valuable caves have to go, for development, that's

:39:34.:39:42.

acceptable? Probably, yes. I can agree with that.

:39:42.:39:47.

Some have already gone. This is Ogulin, a small town, hiding a

:39:47.:39:57.
:39:57.:39:57.

dirty secret. As you can see, unfortunately, in this cave people

:39:57.:40:07.

were dumping their rubbish for dozens of years. That's disgusting

:40:07.:40:13.

isn't it. Is this acceptable in the caves of Croatia? This is common.

:40:13.:40:18.

Almost near every settlement we have similar scenarios. It is just

:40:18.:40:23.

full of what society wants to forget. In some caves there are

:40:23.:40:31.

even unexploded bombs. The train takes Jana to her favourite

:40:31.:40:35.

underground stop, and the direction she would like to take with

:40:35.:40:42.

Croatia's caves. This is Postonja, just across the border into

:40:42.:40:46.

Slovenia. As a member of the EU, European law

:40:46.:40:54.

protects the species and plentiful tourists help pay the bill.

:40:54.:41:01.

Beautiful, and yet chilling. It feels totally alien. It is like a

:41:01.:41:04.

melting ice-cream, it looks soft but it is hard.

:41:04.:41:09.

These are the creatures who truly belong here. Without eyes or

:41:09.:41:15.

pigment, they are totally adapted to life without light. On top of

:41:15.:41:21.

the food chain, the cave salamander, presumed in the past to be a baby

:41:21.:41:29.

dragon. It was proved this animal could live up to 60, 70 years,

:41:29.:41:34.

perhaps even 100 years. 100 years old? It could be. Amazing. Where

:41:34.:41:44.
:41:44.:41:44.

are we going now? We will go to a non-tourist part. We are now around

:41:45.:41:52.

two miles into the mountain. Unseen in the waters and on the walls all

:41:52.:41:59.

around us are ancient species. Over ten million years the climate of

:41:59.:42:04.

Europe swung wildly with ice sheets and deserts scouring life from the

:42:04.:42:09.

surface. Some animals retreated here. It was the shielded bunker

:42:09.:42:13.

for life. Surviving environmental Armageddon, down here, safe in the

:42:13.:42:19.

dark. Does that mean we have some of the oldest, in fact the oldest

:42:19.:42:23.

animals of Europe down here? believe we can say here that these

:42:24.:42:29.

cave animal, and we can prove with Monday elect later DNA that these

:42:29.:42:34.

animals are older, maybe the oldest lineage of animal that is survived

:42:34.:42:37.

on the European continent. They survived in these areas for some

:42:37.:42:43.

million years, it is not acceptable that they will be exbe ticket

:42:43.:42:49.

because of human activity. Extinct because of human activity.

:42:49.:42:54.

This is the latest threatening human activity, hydroelectricity,

:42:54.:42:57.

that floods caves and valleys alike. At least 20 schemes are planned

:42:58.:43:02.

across the country. It may yield low carbon power, but it is high

:43:02.:43:06.

impact on local wildlife. And down towards the eastern tip of the

:43:06.:43:11.

country, near Dubrovnik, is the latest battle front. Right

:43:11.:43:15.

underneath the border with Bosnia, and once a frontline in the Balkan

:43:15.:43:19.

war. It is a struggle even to reach the mouth of the cave. Not much

:43:19.:43:24.

further I'm told. But that hasn't put off engineers from planning to

:43:24.:43:31.

seal the cave network with a huge concrete barrier. This river is

:43:32.:43:35.

connected with subterranean passages, channels, with the

:43:35.:43:41.

entrance we are near. When we calculate all the species we have

:43:41.:43:45.

found in this cave, this cave is the richest with animals in

:43:45.:43:51.

Croatiania. They want to put 130ms of on Crete into the cave. That

:43:51.:43:55.

will completely destroyed all habitats. Croatia is expected to

:43:55.:44:00.

join the European Union in two years. And tighter environmental

:44:00.:44:06.

laws from then should help protect these animals. But Jana believes

:44:06.:44:10.

that membership deadline is hastening the current destruction

:44:10.:44:14.

deadline. They are rushing for all the permits needed, by the time we

:44:14.:44:18.

will be in the European Union it would not be possible to get them.

:44:18.:44:21.

Now is the only chance to get all the permits to have this power

:44:21.:44:26.

plant. The EU's representative in Zagreb

:44:26.:44:31.

is aware of the risk, but insists their vigilance protects habitats,

:44:32.:44:37.

even prior to membership. I am my impression is this country is

:44:37.:44:43.

preparing itself very well for implementing the regulatory

:44:43.:44:46.

framework of the European Union, and that is a process that does not

:44:46.:44:51.

happen overnight. You are sure, are you, that Croatia isn't getting its

:44:51.:44:54.

dirty work over now in the two or three years before they join?

:44:54.:44:58.

because in the meantime the officials of the European

:44:58.:45:02.

Commission will be very close in contact with the Croatian

:45:02.:45:08.

authorities. Keeping a close eye on them? Yes. Europe's surface life is

:45:08.:45:13.

well documented, but down here, we're just beginning. Jana finds at

:45:13.:45:19.

least one new species on every field trip, and has hundreds

:45:19.:45:23.

awaiting recognition. Fears remain this scientific resource will be

:45:23.:45:28.

lost in a rush to develop, and we will move straight from ignorance

:45:28.:45:31.

to elimination. Radio 4 listeners can hear,

:45:31.:45:38.

although not see, more of Croatia's environmental challenge in Costing

:45:38.:45:48.
:45:48.:46:05.

That's all from Newsnight tonight. At sunset this evening the people

:46:05.:46:08.

of would the son basset in Wiltshire marked the end of the

:46:08.:46:12.

custom they have established in marking the return home of the

:46:12.:46:14.

bodies of service personnel killed in action abroad. Hundreds of

:46:14.:46:24.
:46:24.:46:57.

Hello there. Most of us will have another dry day on through, and

:46:57.:47:01.

another fairly cloudy day. That said southern countryies of England

:47:01.:47:06.

and Wales should have lovely September sun yin, by the afternoon

:47:06.:47:15.

feeling warm in the country. A few breaks over Northern Ireland

:47:15.:47:18.

England. Over much of East Anglia expect cloud. The southern counties

:47:18.:47:21.

should brighten up, there should be good spells of sunshine. In the

:47:21.:47:25.

sunshine it will be warm. A breeze picking up across the south west,

:47:25.:47:30.

elsewhere in the sun it will feel pleasant, temperatures up to 21.

:47:30.:47:34.

Same goes for South Wales, sunny spells and a lot of cloud. Pretty

:47:34.:47:38.

grey too in Northern Ireland. Here every now and then we may get some

:47:38.:47:43.

breaks in the cloud, a hint of sunshine. Threatening rain over the

:47:43.:47:47.

Western Isles late in the day. The north-east of Scotland may see

:47:47.:47:51.

sunshine at times. Overall northern Britain will be cloudy, but dry on

:47:51.:47:56.

Thursday, that rain pushing into the Western Isles late on Thursday,

:47:56.:47:59.

it spreads widely across parts of the north on Friday, in the south

:47:59.:48:04.

most of England and Wales should be warmer with sunshine, temperatures

:48:04.:48:09.

should well reach the mid-20s in the capital. In the south sunny

:48:09.:48:12.

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