05/09/2011 Newsnight


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You can almost smell the anxiety, on the trading floors, in the banks


and in the boardrooms of the international financial


institutions, there is a real fear that the economy is about to take


another nose dive. Is it just that they have come back


from their holidays and seen things look different when you're not on


the beach, Paul? Jeremy, no, there is red lights flashing all across


the economic data. And the Americans have begun to take their


money out of European banks. Chancellor, who had to cope the


last night it hit the fan is here, with some advice on cleaning up the


mess. Colonel Gaddafi's secret police


have fled Tripoli, leaving behind their correspondence with MI6. This


British resident was named to the Libyans as a member of an anti-


Gaddafi Islamist group, by our own Secret Service. Why?


We will have an exclusive interview with the leader of Libya's


transitional Government. I will ask Libya's new leader why


he hasn't moved to the capital, Tripoli, and why he wants armed


militias to stay on the streets. Is the way to revive Conservatism in


Scotland to stop calling the party the Scottish Conservatives, the


front runner for the leadership thinks so. How on earth can that


support the union he claims to Woe, woe, thrice woe, as older


viewers may recall Frankie Howard saying on Up Pompeii. The bad news


on the state of the economy, just keeps coming. There has now been so


much of it, that people who once praised the British Government's


strategy for balancing the books, are now begging them to change


course. While across the world, stock markets reflect the gloom by


plunging lower and lower. The FTSE 100 share index fell 3.5% today.


Shares in the Royal Bank of Scotland fell 12%, all to constant


background chatter about how the bankrupt economies of southern


Europe are going to take down a bank or two. Paul Mason is here,


what's causing the panic? Over the last two weeks we have had


mounting evidence that the recovery is over in the US a, in the


eurozone, also - US, in the eurozone, also here. It may not be


a double-dip recession, we may not get to that, but we might be at


stall speed, as economists put it, it might be growing too slow to


gain momentum. One of the best snapshots you can take of an


economy, is by looking at what purchasing managers think, what the


people in business, who actually buy things, are doing right now.


And we had figures on that both for the eurozone, and here today, and


they were both bad. In the eurozone, today, we have had


a survey showing a clear fall in manufacturing orders. Here's the


long-term trend, and we can see the big dip that took place after


Lehman Brothers, well now there's a dip again. And growth is now


Earlier this year, everybody was celebrating Germany's growth, 1.3%


in a single quarter. Well it now looks like in the second quarter it


was just 0.1%. It might already be in a recession. Meanwhile, Greece


is definitely in a deep recession, the austerity programme there means


the economy is 6.9% smaller than it was a year ago. And, says the state


budget office, its debt dynamic is now out of control. Up until now,


we have been getting bad news out of southern Europe, but fairly


strong news out from northern Europe. The message has been, well,


perhaps the German economy can keep the others going. With the latest


data showing that German growth has virtually disappeared, with the


weakening of the expectations data from EFO particularly, it does


looks a if the German economy isn't in a strong state, that make the


break up of the euro, increasingly likely. But hold on a minute, how


do you get from one bad growth figure to the break up of a whole


currency? Well, Greece, Ireland and Portugal have banks being kept


alive from state aid from Europe, in July, Italy and Spain started


taking money from the centre to keep their banks afloat. That


leaves these countries in the north doing the bailing out. And the


problem is, how many of their banks would collapse if they had to write


down debts from southern Europe. The answer is, a lot of them. And


so, you have got American banks now starting to move their money out of


the European system, and evidence that even European banks are moving


their cash to America. About half a trillion in the last six months.


think it is pretty clear that the eurozone economy is slowing down


really very sharply. In common with what we are seeing around the world.


Evidence from the United States, from parts of Asia, and also the UK,


it is all the same thing a very marked slowdown. I think the most


worrying thing is this slowdown is happening at a time when it is


quite obvious that the banking system remains extremely weak.


Market anxiety is gathering about the continued existence, frankly,


of the euro, we are facing the prosability of both a banking and


financial crisis and an economic crisis at the same time. -


possibility of both a banking financial crisis and the economic


crisis at the same time. Christine Lagarde said the world should


abandon austerity and bring more stimulus, she said the EU banks


needed �200 million to bail them out. The boss of the European


Central Bank said no thanks to austerity, and said the calculation


on the banks were wrong. And it is these public disagreements that


give markets the wobbles. So it looks pretty bad globally, how will


it impact on us? The purchasing managing index, this is the


snapshot, it saw the biggest fall here for a decade. Growth is pretty


flat. What to do about it is the thing the Government has to face?


Tax cuts have been mooted, both by the opposition on VAT, and by the


Conservatives on 50p tax rate. Now, conferences are coming up, and we


might expect to see a bit of movement on tax cuts. So there is a


question of do you just do a bit more loosening fistically. The


other problem that - fiscally, the other problem the British


Government have with growth, you still have the problem that our


major trading partners, America and Europe, are flattening. There is a


public finance issue, the Office for Budget Responsibility basis the


whole - bases the whole paying off the debt based on 1.7% of growth,


most reckon it will be 1%, that is why you have one of the boasts of


the world's biggest fund saying to George Osborne today, change course.


How worried should we be about the state of the economy. One for the


former Chancellor, Emmanuel Darley? I think we should be - Alastair


Darling? If you asked me a year ago if the whole of Europe would have


seen their growth snuffed out and stalled, I would say that wouldn't


happen. There was momentum in our economy and the bigger European


economies, that appears to be stalling, that is worrying. But in


2008 you talked about the worst crisis for 60 years, are we looking


at the worst crisis in 63 years? don't think the crisis I talked


about three years ago has gone away. We were coming through it. Indeed,


part of my argument now is, countries together need to show


exactly the same determination to act together, now as they did in


the end of 2008 and 2009. I think the problem is, we got through the


first shock, the problem is we have not capitalised on that, and we are


slipping back into a situation where the economy is going to slow


down, that means you get all the concern about the state of banks


that you are seeing in the markets at the moment. Is it the state of


the banks that worries you more than the growth figures or anything


else? The two are pretty interrelated. We know we have to


get our borrowing down. You will not do that unless you have a


credible plan for growth. Because you need the growth to get the


revenues and so on. What people are now worried about is some of the


peripheral countries are stalling, in Greece's case, completely. Then


you ask questions about the Greek banks, then you think who is behind


them, the European banks, the ECB itself has an awful lot of Greek


bonds. These things feed off each other. Which is why the one thing


we should have learned in 2008, if you know there is a problem you


need to fix it and decisively. That is not happening. If you were still


in Number 11 Downing Street, what would you do now? I think in our


own economy, the Government by going so fast in the deficit


reduction is now strangling the recovery, I'm worried we will bump


along the bottom. You would ease off on the austerity measures?


wouldn't have embarked on their plans in the first place. If you


don't do anything, you are in deep trouble, if you go too fast you


stall the entire thing, you don't get your growth. George Osborne has


had a had to announce more borrowing as a result of what's


happened. The second critical thing is the G20, the largest economies


in the world, need to discuss together how they can ensure that,


yes, you get the borrowing down, but you get growth back in the


economy. That is an acute problem in Europe and America. That is a


global plan B? The two go together in my view. Just as we did in 2008,


in that case it was a credible plan for rescuing the banking system,


but you can't do that on your own, because all our economies are so


interconnected. What about some other measures, like for example, a


temporary cut in VAT? Lots of economists have talked about what


additional stimulus you might put in place. My own preference, you


know, because if you have time to do it is to cut people's income tax


allowance, because that puts more money in. There is all sorts of


credible arguments. The big argument is how do you get


sufficient money flowing through the economy to get growth? You have


just used the word "credible", yet you can see at the last election


Labour's economic policy wasn't credible? What I said was, the


policy of halfing the deficit, over a four-year period, was a credible


policy, what damaged us was it was patently obvious there was a


disagreement between me and the then Prime Minister as to whether


or not that was the right course of action. It is entirely credible,


and indeed there is lots of independent of Labour economists


who say at the moment that we ought to be reducing the deficit at rate


that allows growth to take place. The policy was credible, but the


implementation wasn't? We left office before, although I had set


our economy on a path that was going to be cutting our borrowing,


the plan was announced at the end of 2008, it still had some way to


go. The point I make, and have made on a number of occasion, that


because people knew there was a disagreement at the top of the


Government as to whether or not that was the right thing to do,


that was a problem. The actual policy of halving the deficit over


a four-year period, that I believe is entirely credible, on the


arguments then which are as good as today. Are you sorry you didn't


have a Spending Review? No. Our spending plan we fixed in 2007 was


due to run to 2010. I was asked dozens of time should we have done


another one in 2008/09, my argument then was things were so uncertain


it would have been difficult. Another important point, I strongly


believe the last Government which I was a member was right to maintain


public spending until we could see that they were back into recovery,


then you start to cut it. And just a reminder...You Left the economy


in the worst shape any in coming Government has had to deal with?


Every country in the world had exactly the same problem. The


reason we are discussing it tonight is because Germany's, France, Italy,


America, we have all had to come through this banking crisis. We all


had to spend money. Let me finish this argument, I remind you our


economy was actually growing in the quarters after we left office, it


was only the present lot have managed to derail that. Do you


think we may already be in recession? Now. I would be


surprised if we are. People ask me do you see a double-dip, I'm not


saying we won't get a statistical negative figure at some stage. My


guess is we are simply bumping along the bottom. Just telling you


now, so much bad data is coming out, people are right to be fearful


about this. When you say we are bumping along the bottom, we can't


go through the bottom, so we can't go into a double-dip recession. I'm


asking you your hunch? My hunch is we won't go into a double-dip


recession, and if we do, that would be a damming indictment on


everything the Government has done since it was elected 18 months ago.


You have already conceded much of it isn't to do with the heyor of


this Government, but what is happening in the - behaviour of


this Government, but what is happening in the eurozone? This


Government is cutting expenditure very fast n the hope that the


private sector will take its place. The private sector doesn't have


that confidence, it is evidenced at the moment, not helped by the


biggest market we have has stalled. You think current Labour economic


policy is credible as well? current policy of the Labour front


bench is the one I left. It must follow, with all due humility, I


think it is credible, yes. You are also part of the Government that


set up the arrangement with the Bank of England do you think that


is credible? I won't plug my new book too much. Plug away? I don't


think the problem was the financial structure, it was the fact of the


early stages with New York a lot of disagreement, - Northern Rock,


there was a lot of disagreement between me and the governor at that


time. If you asked me about the regulatory problem, there is not a


regulatory system in the world that saw this coming. The big mistake


they made, and this is so obvious from Northern Rock, is that they


did not see the interconnections between the banking system. You are


even seeing it today. The European authorities have not done stress


test that is model the failure of a Government. Greece is pretty near


that stage at the present time. Of course there was mistakes made in


the regulatory system. I don't think it was the structure, it was


judgments that was the problem. That reflected rather badly on the


governor of the Bank of England? made some wrong calls in my time. I


think my disagreement with the governor is I think we needed to


put money into the banking system far earlier than we did. I may say,


I made clear that when it came to the big rescue in 2008, Martin


Luther King played major and constructive - Mervyn King played


major and constructive role in that. What were your wrong calls? We took


too long to deal with the Northern Rock situation. Once it was in


trouble, if we had the legislation that we now have, we should have


dealt with it quickly, probably nationalised it far more quickly


than we did. When we actually did nationalise it, at the beginning of


2008, it really started to restore confidence for bait, but later in


the year we were complete - for a bit, but later in the year we were


completely overwhelmed by a banking crisis that had roots in the


American sub-prime market. But some of our banks were up to their necks


in it. Noble of you to take the blame, but it was Gordon Brown's


fault? In our country it was the responsibility of the Government at


the time. I was in the cabinet every single day of that Government,


it is as much my fault as anybody else. None of this actually helps


us, now. What we should be bothered about now is how we make sure we


reduce the risk of this happening again. My immediate concern is a


combination of what is going on in the wider economy, plus the fact


that in Europe they still haven't sorted out some of the problems


with the banks, that is why I'm worried, and moreied - more worried


than 12 months ago. The House of Commons rang to the sound of our


elected representatives congratulating the people of Libya


and the Armed Forces dumping Colonel Gaddafi's despottism this


afternoon. But documents uncovered in the revolution show how very


happy the British intelligence was to help Colonel Gaddafi's regime.


They reveal information about Libyan dissidents in this country


was fed to Gaddafi's regime. They may also have taken part in the


practice of rendition. What is disclosed today? 300 documents were


obtained by Human Rights Watch in Tripoli, they were looking for a


secret prison, they found this cache of secret documents, sent by


British intelligence to the Libyan authorities. It shows that MI6


wrote to the Libyan Intel gents about the successful reign - Libyan


intelligence about the successful rendition of one man who is on our


That letter was signed "M", thought to be a reference to Sir Mark Alan",


former intelligence officer at MI6. The context to this is the British


was seeking for Gaddafi to relinquish nuclear weapons. The


Libyans wanted something in exchange, intelligence information.


I spoke to Human Rights Watch about this today, they felt the


relationship went too far and it was immoral. Even those of us who


follow these issues closely, we have been shocked and surprised by


the documentation revealed over the last few days. It is significant


and damming. These documents need to be thoroughly investigated. They


suggest that MI6, the British intelligence agencies were


providing information to Colonel Gaddafi's regime about operatives


and their opposition figures and their where abouts. This is a


particularly interesting document, it shows that British intelligence


was willing to pass on information about Libyans living in the UK,


perfectly legally, who were political oppontnents of the


Gaddafi regime. They passed an entire intelligence regieme on one


He was in the UK legally, but he was later prosecuted here for


fundraising for the Libyan Islamic Fighting Group, seeking to


overthrow Gaddafi. Another document sent by British intelligence to the


Libyans also states, they requested information regarding Mohammed X,


not named for legal reasons. He's an Islamic extremist based in


Brighton, he's reported to have visited Afghanistan in 2001, and a


known contact of the Libyan Islamist fighting group members,


and Omar Deghayes, his father was killed by the Libyan regime, he


came to Britain and won asylum in 1986 with his family. He spent time


in Guantanamo Bay later. A Newsnight investigation in the past


has suggested this was case of mistaken identity. Omar Deghayes is


here with us now. Did you know that British intelligence was passing


information about you to Colonel Gaddafi? No, I didn't. And to know


that they did is worrying and concerning and very sad, to know


the country who gave us asylum, and the family from Gaddafi, is passing


information about details of our lives to Gaddafi. It mentions you


as a member of the Libyan Islamic Fighting Group, is that true?


not true. You know it is a prescribed organisation in this


country, you would be committing an offence, were you a member? No, I


was not a member, we were in opposition to Gaddafi, working in


opposition to Gaddafi we know many people in opposition to Gaddafi. I


was not a member of this organisation. MI6 were passing


false information to Gaddafi? think they were passing information.


This is the information that came to us, we don't know what other


information they passed to Gaddafi, whether it is false or not, MI6


should be answerable for that. do you feel about it? As I say,


very concerned and very saddened, and deeply shocked. Because we came


to this country seeking political asylum, and as refugees, with all


the family, because of our treatment with Libya. To know this


country is passing information about us to Gaddafi and his regime


is very sad and shocking. Does it make you reassess this country's


involvement in the overthrow of gad? Not really, we are happy - of


Gaddafi? Not really, we are happy with their contribution towards the


overthrow of Gaddafi. I'm happy with many other people in this


country who are working hard to show all this information and


uncover all these cruelties that did happen. This country, the part


of the Government worked, but many other people worked differently.


There was a bigger game in play here. The bigger game was to make


sure Gaddafi abandoned his programme of development of weapons


of mass destruction, which we know was active, unlike some other


alleged programmes of weapons of mass destruction. In that context,


feeding a bit of what you say is false information to Colonel


Gaddafi to keep him sweet, is surely a small price to pay? That


is the thing, this is the information we spoke about today.


We know they were involved in many other things. They were involved in


rendering people, passing people to Libya who ended up dead in Libyan


prisons. It's not only passing false


information to the Libyans. But it is lots of other work that has been


done that is immoral and really has to be opposed by everyone who has


ability to speak up. Mr Deghayes thank you.


Our diplomatic editor joins us now from Washington. What can you tell


us about this? It is interesting, just talking to people around the


bizarres, as they Baz Tsars as they say about those around the


intelligence world. If your relationships with countries like


Libya flip many times during the period of his rule, the discovery


of documents like this is bound to be messy. Their arguments money


along the lines that these contacts, as we understand from an interview


given to the BBC by Colonel Gaddafi's lasten Foreign Minister,


were continuing right up to the outbreak of the Libyan revolution,


and all authorised by the British Government. In that case MI6, SIS,


in having officers in Tripoli, and conducted this intelligence liaison,


were acting under ministerial direction. The other argument made


is the renditions we have learned about from Thailand and Hong Kong,


were not of people in British custody. In other words, there was


not the same responsibility, they believe, under the European Human


Rights Convention and various other laws, on Britain, not to hand these


people over for questioning in Lybia, even though we all know what


that might involve. You might think this is sof fesry, but they tend to


- sophestry, they tend to involve situations where individuals are


held by the country. But they handsome to the Americans who


rendered them to Bagram, which is far more serious than where third


countries did deals with Libya and the Americans played an enabling


role. Will this be enough to bring it out? They can probably get their


way through it, particularly with reference to ministerial submission,


endorsing what they did. I think the difficult area is the handing


over of intelligence. If you hand over intelligence on people living


in Britain, naming them, telling the Libyans they are involved in


militant and anti-Government activity, you then expose their


families, their associates, to action by the Libyan regime, or


them if they go back there. That seems to run directly counter to an


assurance that was given by the chief of MI6 in a speech last


October. Torture is illegal and nothing to do with us. If we know


acts where torture is taking place, we are advised by European and


international law to avoid that action, and we do. Even if allows


the tort activity to go ahead. Libya itself the revolutionaries


have still not managed to find Colonel Gaddafi and remain poised


outside a town, where they believe elements of his regime are holed up.


The revolution is not over, and until it is, the National


Transitional Council doesn't feel it can move to the capital. So what


is the plan of the leaders of the revolution? Our reporter in Libya


has got the man who leads the council and so is the country's


effective ruler right now. Tim's in Benghazi right now to tell us what


he had to say. Yes, Mustafa Abdel-Jalil, now


Libya's interim leader. He's a very emegmatic figure, certainly well


respected, because when he was Gaddafi's minister of justice, he


very much stood up for political prisoners and their rights. At the


same time, not very charasmatic, man who has had to tread a very


careful line between disparate factions on his own council, the


liberal wing, the Islamist wing, the careful line between thanking


the west for its support over recent months, and at the same time


insisting that the Libyans must own their own revolution. So very


interesting talking to him, what I wanted to know first is why he has


been so slow in moving to Tripoli. Before that he also had some


fascinating news about what has been happening on one of the


remaining battle fronts today. The struggle is almost over, they


believe, still not quite. Anti- Gaddafi's fighters, south-east of


Tripoli, held back today, in the hope negotiations will lead to the


surrender of the town, Bani Walid. It is one of just four pockets of


resistance, that Libya's revolutionary forces must subdue,


before they can turn their attention to other tasks.


The head of the National Transitional Council, Mustafa


Abdel-Jalil, told Newsnight today, that two of Gaddafi's sons had


prevented Bani Walid surrendering. A third son, he said, had been


killed there. Tran I must stress that - TRANSLATION: I must stress


that they are the ones blocking the city. They are there, and they have


had a shelter with some of the tribe there is. As we have heard


from some sources that Khamis, the son also of Gaddafi, has been


buried there. There were negotiations with these tribes that


have sheltered the Gaddafi family, with our rebels. We have principles


in the tribes here, if anyone has had shelter with you, you will


never be able to make him surrender. We understand this, and have given


three days, and amended this to one week. We are still abiding by our


words. But, as we say, that negotiation still has time. Once we


have ended these negotiations, then there will be another. But we had


information that the Gaddafi sons have left the city.


Libya's new leaders say it is only after they have announced the


liberation of the whole country that they will complete the move


from here in Benghazi, the birth place of the revolution, to the


capital, Tripoli. Britain, and other western backers have urged


them to do so as soon as possible. Bau, according to the council, it


is only after - because, according to the council, it is only after


the move that a new interim Government will be formed.


Something is due to the delay because of security concerns, but


the head of the council denies that. TRANSLATION: I'm Muslim that I


understand everything has happened by God, I'm not afraid of death at


all. The whole issue is an administrative matter. It has


nothing to do with security. I can assure you that the security in


Tripoli is more secure than Benghazi.


Even so, the council admits that Tripoli is in the hands of


revolutionary militias it doesn't entirely control, isn't that a


problem? TRANSLATION: There is no army for our country. Our


revolutionaries with the assistance of our allies and our friends, the


NATO, that we started to be able to defend ourselves against the


militias populated by the Gaddafi regime. They are not officials,


they are volunteers, they are doctors, engineer, students. Even


football players. Now, as the war comes to an end, some of the arms


those civilian rebels have acquired, are being traded on the black


market here in Benghazi and across Libya.


Ask him how much that is? What? thinks this is $1400. Around �1,000.


Let me feel how heavy that is. That is seriously heavy. I would have


difficulty using that. You don't reckon. He says it is a machine


begun, it rotates. - Machine gun, it rotates. For me to hold it might


be a bit much. He has a lot of ammunition as well. This is a much


nigs for Kalashnikovs. He says - ammunition for Kalashnikovs. He


says he will have discount for you. This is all being sold completely


openly. Arms trade something a sensitive matter, that is why we


judged it was safer to film from a distance. Despite the risk of a


country awash with weapons, the head of the council believes for


now, arms revolutionaries should stay on the streets at least.


TRANSLATION: We must stress there is no contradiction whatsoever. The


call for disarming and collecting the arm is a policy matter. At the


moment the arms remain with the revolutionaries, it will not have a


threat to the security. It is on the contrary, it is needed to


stablise the security wherever we have any pockets that are still not


known to us. Hopefully that by the time we are in full control of


every inch of the cities, then we will go to the policies that we


have already settled. Until they control every city,


feeding the frontline is still a big task. Performed in Benghazi by


hundreds of volunteers. The new Libya has few institutions. But the


revolution has fuelled a new civic activism, and a determination, as


this poster says, to avoid tribal divisions. Libya's new leaders will


need to harness all that energy and enthusiasm, if they are to stand a


chance of bringing stability, and even democracy to the country in


the months ahead. Well, today, Mustafa Abdel-Jalil


told me that he would be in Tripoli at the beginning of next week. And


that, presumably, is when liberation will be declared.


Although, in practice, with the deadline for negotiations only


running out on Saturday, it is very hard to see that in these main


places where Gaddafi loyalists are still fighting in Bani Walid, in


Sirte in the south, it is very hard to see how the battles will really


be over by then. When the rest of the council does get to Tripoli, I


think one of the big problems they will face, is what to do with


former Gaddafi people, who jumped ship right at the very last minute,


and now still want prominent positions in the new Libya, already.


Already there is a revolt brewing within the ranks of council


supporter about one former Gaddafi commander, who has already been


given a senior new military role, with the new authorities. I think


we expect many more arguments and divisions of this kind as they try


to form a new administration over the coming months.


I should just mention we did ask the Government for an interview


today to talk about Libya generally, and the issue of rendition


specifically, our interview with Omar Deghayes as well. But no-one


was available, we were told. A vote for me and I will finish off the


party, as leadership pitches go it is a bold one. He comes to bury the


Conservative Party, not praise it. The deputy leader of the Scottish


Conservatives, a man called Murdo Fraser, is running on a platform of


disbanding the party and bringing something new and right-wing and


Scottish in its place it's not a well known name across the borders,


because there are many really known reintroduced beavers than in the UK.


You might be for given for thinking the lesser spotted Tory across the


border is rare find. But the history of the party in Scotland


tells a different story. Their hey day as Scotland's party of choice


hit its height around the late 1920s to late 1950, when ideas of


God, empire, union and local industry endeared them to the


Scottish electorate. Then they were known as Scottish unionists,


writing the Labour Party off as alien socialists. The high water


mark came in 1955. They won both a majority of the seats and the vote,


something no other party in Scotland has achieved before or


since. No coincidence it was the same near the Church of Scotland


measureship hit its height too. As church attendance fell, and the


empire fell away. 1965 saw Edward Heath instigate brand change from


the Scottish unionist party, to the modern Scottish Conservative Party.


By the time Thatcher imposed the poll tax on the Scottish people,


the country's industrial heart, forged in coal and steel, was also


in its death throws. The Conservatives were seen as - throes.


The Conservatives were seen as not feeling the pain. And Scotland's


four major newspapers turned on the Tories. John Major fought a strong


unionist campaign in 1992, and gained ground. Five years later,


though, Blair's landslide wiped the Tories from the map in Scotland.


Not a single MP was left. With that, the resurgence of the SNP began. In


2004, Alex Salmond returned as leader of the SNP, it was the start


of gains for the nationalists that would leave the once powerful


Tories bit part players in the future of Scotland. Well, with us


now, live from Dundee, is the man with plan, the deputy leader of the


Scottish Conservatives, yes, Murdo Fraser. And with me in the studio


is the former Secretary of State for Scotland, Lord Forsyth. Murdo


Fraser, same people, same policies, how stupid do you think people are?


We are what we are talking about is creating a new political entity. We


are not going to dissolve the Scottish Conservative Party, as


some have said, we will use it and build on it to create a new


progressive centre right party, with a distinct Scottish identity,


that will have a relationship with the US Conservative Party, akin to


the same as in Bavaria with the Christian Democrats also in Germany.


That is a positive move. There are a lot of people in Scotland who


share centre right values who believe the things we believe in,


in terms of taxation and law and order and support for the family,


but can't bring themselves to vote for the Conservative Party, because


they think our party allegances lie in London and say we haven't come


to terms with post devolution Scotland You haven't a great deal


to lose, do you? We lost a great deal. In 1997 we had 97% of the


vote, at the last Scottish elections we got 13.5%. Why not


reinvent yourselves? We need to be ourselves and get on the front foot


and campaign as Conservatives in Scotland. This idea that Murdo has


that the party isn't able to make its own policies, we have always


had different policies. The poll tax was asked by the Scottish


Secretary of Margaret Thatcher because of a specific problem that


arose with the Scottish rating system. Let's not get hung up on


the question of poll tax, you of all people should not want that!


How are you going to explain to the people of Scotland that the union


is bad for your party, but good for the country? The irony is, of


course, until 1965, as your clip said, there were no Conservatives


in Scotland. We had something called the Scottish Unionist Party,


ironically that was much more electorally popular than the


Conservative Party has been since that time. Nobody said the union


was under threat, because we had a distinct Scottish centre right


party in those days. I think we will be far better placed to fight


the SNP, with a much more vigorous new centre right party with a


Scottish identity. I have been deluged in the last 48 hours since


I announced this idea, with contacts from people saying this is


exactly the right thing to do. We don't want to be in the


Conservative Party, but if you set up this new entity we will come and


join you and fight the SNP and their plans to break up Britain.


There is a real appetite for this to happen. I'm surprised he hasn't


been deluged for Conservatives, who have worked very hard for policies


for the Conservatives, and must be dismayed to hear them thrashed in


this way. The Conservatives get 450,000 votes in Scotland still. We


have 10,000 members, our constituencies are in decay, we


don't have modern campaigning. The way to take things forward is to


fight. It is perfectly possible for the Conservatives to get back to


having 27% of the vote. The MoD sl in chaels. Waless had - the model


is in Wales, Wales had industrial decline and all the problems


experienced under the Conservative Government in the 1980, we have


increased our seats by working with the party in England and working on


a united front. The seperatist agenda is playing straight into the


hand of the SNP. How so, he believes in the union? It is a very


funny say to say we need a UK, in order to do so we have to destroy a


Scottish party. The Scottish Conservatives are the oldest party


in Scotland. There are times when we have had nearly all the sites


and then a lack of seats. In 1955 there were two candidates only


standing, a liberal Conservative, and Labour. Now we have a four-way


split. You are like the Labour Party one more heave slot. Take a


radical initiative, create something now, distinctively


Scottish and see if people go for it? Because the principles and


policies and values for which we stand are capable of attracting


votes in Scotland if they are presented. If you are on the back


foot all the time. Appeasing the SNP and not prepared to fight for


those values, don't be surprised if people wonder why to vote for it.


Us that banged to rights, Murdo Fraser? We have tried all these


things Michael saying, we have had excellent leaders the Scottish


Conservatives, and Annabel Goldie, the leader, about to retire, we


have had a Conservative Party leader in Scotland whose personal


ratings were higher than the Labour Party.


Why don't people vote for you? is an idea of Scottish identity.


Voters in Scotland a post-evolution era, want to vote for parties with


a Scottish identity. That is why so many centre right voters in


Scotland vote for the Scottish National Party, even though they


might not believe the policies. If this is such a bad idea, why does


his former boss endorse it so massively, why has Norman Tebbit


come out to endorse it. These are not nationalist appeasers, they are


staunch unionists, that is why we are backing this ban, because they


say it is a way to safety union. Everyone is entitled for their


opinion. Murdo is standing for the leadership of his party, on


platform that says I'm going to wind up your party and it will be


something else. It wasn't just the changing of the name, but the


notion we did well in the 50s because of our name is fatuous and


obscured. You have a situation where the Scottish Conservatives


could have a completely different set of policies on key issues to


the national policy in London? you look at the Conservatives in


London v they developed links with nurses, doctors and teachers, a


distinct identity. The manifesto comes up the night before and they


try to put a kilt on it, that is not the way to create that idea on


it. You don't think they are competent? We are not as well


organised as we should be. Is that a pie light way of saying, yes,


they have been incompetent. Clearly we have been losing votes at every


turn. There is no point in throwing in a the towel and creating a new


party. We have seen that before and the results show. Murdo has done a


great job, he used to canvas for me, he slept on my floor. I think he


just needs to be a little bit more confident, and concentrate on


getting across our values and our policies and engaging with the


electorate, using modern communication tools, the answer


does not lie in changing the name. The electorate are far brighter


than to be taken in this by that. That's all we have time for. That's


all from Newsnight tonight, hope you will be here tomorrow, I will


Plenty of weather coming in our direction over the next few days.


Of wet and windy. This is the scene first thing in the morning. A lot


of rain around, particularly for England and Wales. Keeping down


towards the south-east. Something a bit brighter emerging by the


afternoon. Bright and breezy picture across the heart of the


Midlands, one or two showers sneaking through. The worst of the


rain will be clearing from Kent and East Sussex by mid-afternoon. If


you start off with rain things improve later on in the day. Across


the more western parts of England and Wales, further showers rattling


in during the course of the afternoon on the stiff old westerly


wind. Temperatures holding in the mid-teens for the most part. For


Northern Ireland the risk of prolonged outbreaks of rain and


sunshine limited, same for Scotland. Some real wet weather across the


west of Scotlandment brightness further east. More showers to come


through the middle of the week. A brisk wind making it feel cool,


despite some sunshine. Across southern areas too, it is a similar


picture, some sunshine, yes, but also some fairly heavy showers


around. So, on Wednesday, probably most of the showers across the more


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