05/09/2011 Newsnight


05/09/2011

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


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Transcript


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

:00:07.:00:11.

and in the boardrooms of the international financial

:00:11.:00:14.

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

:00:14.:00:18.

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

:00:18.:00:22.

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

:00:22.:00:26.

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

:00:26.:00:29.

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

:00:29.:00:33.

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

:00:33.:00:37.

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

:00:37.:00:43.

mess. Colonel Gaddafi's secret police

:00:43.:00:48.

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

:00:48.:00:54.

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

:00:54.:00:58.

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

:00:58.:01:04.

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

:01:04.:01:07.

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

:01:07.:01:13.

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

:01:13.:01:17.

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

:01:17.:01:20.

Scotland to stop calling the party the Scottish Conservatives, the

:01:20.:01:24.

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

:01:24.:01:34.
:01:34.:01:37.

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

:01:37.:01:40.

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

:01:40.:01:44.

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

:01:44.:01:48.

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

:01:48.:01:52.

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

:01:52.:01:56.

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

:01:56.:02:02.

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

:02:02.:02:06.

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

:02:06.:02:08.

background chatter about how the bankrupt economies of southern

:02:08.:02:14.

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

:02:14.:02:18.

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

:02:18.:02:22.

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

:02:22.:02:27.

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

:02:27.:02:32.

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

:02:32.:02:37.

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

:02:37.:02:40.

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

:02:40.:02:43.

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

:02:43.:02:47.

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

:02:47.:02:52.

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

:02:52.:02:57.

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

:02:57.:03:02.

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

:03:02.:03:07.

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

:03:07.:03:10.

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

:03:10.:03:20.
:03:20.:03:24.

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

:03:24.:03:29.

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

:03:29.:03:38.

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

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

:03:42.:03:49.

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

:03:49.:03:53.

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

:03:54.:03:57.

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

:03:57.:04:01.

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

:04:01.:04:05.

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

:04:05.:04:09.

data showing that German growth has virtually disappeared, with the

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weakening of the expectations data from EFO particularly, it does

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

:04:19.:04:24.

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

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

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

:04:33.:04:37.

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

:04:37.:04:41.

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

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

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

:04:49.:04:53.

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

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

:04:57.:05:00.

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

:05:00.:05:06.

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

:05:06.:05:10.

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

:05:10.:05:14.

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

:05:14.:05:18.

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

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

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

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quite obvious that the banking system remains extremely weak.

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Market anxiety is gathering about the continued existence, frankly,

:05:35.:05:40.

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

:05:40.:05:44.

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

:05:44.:05:47.

possibility of both a banking financial crisis and the economic

:05:47.:05:51.

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

:05:51.:05:56.

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

:05:56.:06:00.

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

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

:06:03.:06:08.

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

:06:08.:06:13.

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

:06:13.:06:18.

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

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

:06:24.:06:28.

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

:06:28.:06:33.

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

:06:33.:06:37.

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

:06:37.:06:40.

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

:06:40.:06:45.

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

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other problem that - fiscally, the other problem the British

:06:49.:06:52.

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

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

:06:58.:07:04.

public finance issue, the Office for Budget Responsibility basis the

:07:04.:07:09.

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

:07:09.:07:15.

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

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

:07:19.:07:24.

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

:07:24.:07:29.

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

:07:29.:07:34.

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

:07:34.:07:38.

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

:07:38.:07:42.

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

:07:42.:07:46.

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

:07:46.:07:51.

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

:07:51.:07:55.

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

:07:55.:08:01.

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

:08:01.:08:05.

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

:08:05.:08:08.

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

:08:08.:08:14.

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

:08:14.:08:18.

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

:08:18.:08:22.

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

:08:22.:08:25.

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

:08:25.:08:29.

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

:08:29.:08:32.

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

:08:32.:08:35.

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

:08:35.:08:39.

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

:08:39.:08:42.

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

:08:42.:08:49.

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

:08:49.:08:53.

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

:08:53.:08:57.

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

:08:57.:09:02.

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

:09:02.:09:06.

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

:09:06.:09:10.

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

:09:10.:09:16.

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

:09:16.:09:20.

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

:09:20.:09:24.

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

:09:24.:09:27.

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

:09:27.:09:32.

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

:09:32.:09:35.

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

:09:35.:09:39.

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

:09:39.:09:43.

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

:09:43.:09:47.

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

:09:47.:09:50.

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

:09:50.:09:54.

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

:09:54.:09:59.

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

:09:59.:10:03.

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

:10:03.:10:08.

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

:10:08.:10:12.

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

:10:12.:10:17.

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

:10:17.:10:21.

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

:10:21.:10:26.

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

:10:26.:10:30.

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

:10:30.:10:35.

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

:10:35.:10:39.

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

:10:39.:10:42.

credible arguments. The big argument is how do you get

:10:42.:10:46.

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

:10:46.:10:50.

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

:10:50.:10:53.

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

:10:53.:11:00.

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

:11:00.:11:04.

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

:11:04.:11:07.

disagreement between me and the then Prime Minister as to whether

:11:07.:11:11.

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

:11:11.:11:15.

and indeed there is lots of independent of Labour economists

:11:15.:11:21.

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

:11:21.:11:25.

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

:11:25.:11:28.

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

:11:28.:11:32.

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

:11:32.:11:38.

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

:11:38.:11:42.

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

:11:42.:11:45.

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

:11:45.:11:48.

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

:11:48.:11:51.

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

:11:51.:11:55.

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

:11:55.:12:01.

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

:12:01.:12:06.

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

:12:06.:12:10.

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

:12:10.:12:16.

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

:12:16.:12:19.

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

:12:19.:12:22.

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

:12:23.:12:25.

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

:12:25.:12:31.

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

:12:31.:12:35.

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

:12:35.:12:38.

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

:12:38.:12:43.

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

:12:43.:12:46.

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

:12:46.:12:50.

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

:12:50.:12:54.

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

:12:54.:12:58.

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

:12:59.:13:02.

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

:13:02.:13:07.

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

:13:07.:13:11.

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

:13:11.:13:15.

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

:13:15.:13:23.

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

:13:23.:13:26.

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

:13:26.:13:31.

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

:13:31.:13:35.

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

:13:35.:13:38.

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

:13:38.:13:42.

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

:13:42.:13:45.

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

:13:45.:13:50.

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

:13:50.:13:53.

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

:13:53.:13:57.

Government is cutting expenditure very fast n the hope that the

:13:57.:14:01.

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

:14:01.:14:06.

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

:14:06.:14:11.

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

:14:11.:14:15.

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

:14:15.:14:20.

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

:14:20.:14:23.

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

:14:23.:14:27.

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

:14:27.:14:34.

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

:14:34.:14:38.

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

:14:38.:14:41.

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

:14:41.:14:44.

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

:14:44.:14:47.

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

:14:47.:14:52.

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

:14:52.:14:55.

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

:14:55.:15:00.

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

:15:00.:15:03.

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

:15:03.:15:08.

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

:15:08.:15:11.

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

:15:11.:15:14.

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

:15:14.:15:19.

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

:15:19.:15:22.

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

:15:22.:15:27.

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

:15:27.:15:32.

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

:15:32.:15:38.

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

:15:38.:15:43.

Luther King played major and constructive - Mervyn King played

:15:43.:15:48.

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

:15:48.:15:51.

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

:15:51.:15:55.

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

:15:55.:15:58.

dealt with it quickly, probably nationalised it far more quickly

:15:58.:16:04.

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

:16:04.:16:09.

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

:16:09.:16:13.

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

:16:13.:16:18.

completely overwhelmed by a banking crisis that had roots in the

:16:18.:16:24.

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

:16:24.:16:28.

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

:16:28.:16:31.

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

:16:31.:16:34.

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

:16:34.:16:38.

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

:16:38.:16:42.

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

:16:42.:16:45.

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

:16:45.:16:48.

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

:16:48.:16:51.

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

:16:51.:16:57.

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

:16:57.:17:02.

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

:17:02.:17:05.

elected representatives congratulating the people of Libya

:17:05.:17:09.

and the Armed Forces dumping Colonel Gaddafi's despottism this

:17:09.:17:13.

afternoon. But documents uncovered in the revolution show how very

:17:13.:17:17.

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

:17:18.:17:23.

They reveal information about Libyan dissidents in this country

:17:23.:17:27.

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

:17:27.:17:33.

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

:17:33.:17:36.

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

:17:36.:17:42.

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

:17:42.:17:46.

British intelligence to the Libyan authorities. It shows that MI6

:17:46.:17:51.

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

:17:51.:17:58.

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

:17:58.:18:08.
:18:08.:18:20.

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

:18:20.:18:25.

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

:18:25.:18:29.

was seeking for Gaddafi to relinquish nuclear weapons. The

:18:29.:18:33.

Libyans wanted something in exchange, intelligence information.

:18:33.:18:37.

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

:18:37.:18:41.

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

:18:41.:18:45.

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

:18:45.:18:48.

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

:18:48.:18:50.

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

:18:50.:18:56.

suggest that MI6, the British intelligence agencies were

:18:56.:19:00.

providing information to Colonel Gaddafi's regime about operatives

:19:00.:19:08.

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

:19:08.:19:10.

particularly interesting document, it shows that British intelligence

:19:10.:19:16.

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

:19:16.:19:21.

perfectly legally, who were political oppontnents of the

:19:21.:19:26.

Gaddafi regime. They passed an entire intelligence regieme on one

:19:26.:19:36.
:19:36.:19:39.

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

:19:39.:19:42.

fundraising for the Libyan Islamic Fighting Group, seeking to

:19:42.:19:46.

overthrow Gaddafi. Another document sent by British intelligence to the

:19:46.:19:52.

Libyans also states, they requested information regarding Mohammed X,

:19:52.:19:56.

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

:19:56.:20:03.

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

:20:03.:20:10.

known contact of the Libyan Islamist fighting group members,

:20:10.:20:14.

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

:20:14.:20:19.

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

:20:19.:20:24.

in Guantanamo Bay later. A Newsnight investigation in the past

:20:24.:20:28.

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

:20:28.:20:32.

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

:20:32.:20:37.

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

:20:37.:20:41.

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

:20:41.:20:45.

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

:20:45.:20:50.

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

:20:50.:20:55.

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

:20:55.:20:59.

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

:20:59.:21:03.

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

:21:03.:21:07.

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

:21:07.:21:10.

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

:21:10.:21:13.

was not a member of this organisation. MI6 were passing

:21:13.:21:18.

false information to Gaddafi? think they were passing information.

:21:18.:21:21.

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

:21:21.:21:25.

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

:21:25.:21:29.

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

:21:29.:21:34.

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

:21:34.:21:38.

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

:21:38.:21:41.

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

:21:41.:21:47.

country is passing information about us to Gaddafi and his regime

:21:47.:21:53.

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

:21:53.:21:58.

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

:21:58.:22:03.

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

:22:03.:22:07.

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

:22:07.:22:10.

country who are working hard to show all this information and

:22:10.:22:17.

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

:22:17.:22:21.

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

:22:21.:22:25.

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

:22:25.:22:28.

sure Gaddafi abandoned his programme of development of weapons

:22:28.:22:33.

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

:22:33.:22:35.

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

:22:35.:22:39.

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

:22:39.:22:43.

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

:22:43.:22:47.

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

:22:47.:22:50.

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

:22:51.:22:55.

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

:22:55.:23:03.

prisons. It's not only passing false

:23:03.:23:07.

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

:23:07.:23:15.

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

:23:15.:23:20.

ability to speak up. Mr Deghayes thank you.

:23:20.:23:28.

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

:23:28.:23:33.

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

:23:33.:23:42.

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

:23:42.:23:46.

intelligence world. If your relationships with countries like

:23:47.:23:50.

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

:23:50.:23:54.

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

:23:54.:23:58.

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

:23:58.:24:02.

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

:24:02.:24:05.

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

:24:05.:24:14.

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

:24:14.:24:20.

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

:24:20.:24:23.

were acting under ministerial direction. The other argument made

:24:23.:24:26.

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

:24:26.:24:31.

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

:24:31.:24:35.

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

:24:35.:24:40.

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

:24:40.:24:44.

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

:24:44.:24:54.

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

:24:54.:24:59.

- sophestry, they tend to involve situations where individuals are

:24:59.:25:06.

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

:25:06.:25:15.

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

:25:15.:25:20.

countries did deals with Libya and the Americans played an enabling

:25:20.:25:30.
:25:30.:25:30.

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

:25:30.:25:34.

way through it, particularly with reference to ministerial submission,

:25:34.:25:41.

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

:25:41.:25:44.

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

:25:44.:25:48.

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

:25:48.:25:51.

militant and anti-Government activity, you then expose their

:25:51.:25:54.

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

:25:54.:25:59.

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

:25:59.:26:02.

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

:26:02.:26:12.
:26:12.:26:15.

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

:26:15.:26:20.

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

:26:20.:26:25.

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

:26:25.:26:29.

the tort activity to go ahead. Libya itself the revolutionaries

:26:29.:26:32.

have still not managed to find Colonel Gaddafi and remain poised

:26:32.:26:37.

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

:26:37.:26:41.

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

:26:41.:26:44.

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

:26:44.:26:48.

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

:26:48.:26:54.

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

:26:55.:27:00.

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

:27:00.:27:05.

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

:27:05.:27:10.

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

:27:10.:27:13.

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

:27:13.:27:17.

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

:27:17.:27:23.

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

:27:23.:27:28.

careful line between disparate factions on his own council, the

:27:28.:27:32.

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

:27:32.:27:35.

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

:27:35.:27:39.

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

:27:39.:27:43.

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

:27:43.:27:48.

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

:27:48.:27:51.

fascinating news about what has been happening on one of the

:27:51.:27:58.

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

:27:58.:28:02.

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

:28:02.:28:07.

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

:28:07.:28:12.

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

:28:12.:28:16.

resistance, that Libya's revolutionary forces must subdue,

:28:16.:28:25.

before they can turn their attention to other tasks.

:28:25.:28:27.

The head of the National Transitional Council, Mustafa

:28:27.:28:32.

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

:28:32.:28:36.

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

:28:37.:28:45.

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

:28:45.:28:49.

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

:28:49.:28:54.

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

:28:54.:28:58.

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

:28:58.:29:02.

buried there. There were negotiations with these tribes that

:29:02.:29:09.

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

:29:10.:29:13.

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

:29:13.:29:18.

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

:29:18.:29:24.

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

:29:24.:29:31.

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

:29:31.:29:38.

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

:29:38.:29:47.

information that the Gaddafi sons have left the city.

:29:47.:29:50.

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

:29:50.:29:53.

liberation of the whole country that they will complete the move

:29:53.:29:58.

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

:29:58.:30:02.

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

:30:02.:30:06.

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

:30:06.:30:11.

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

:30:11.:30:16.

the move that a new interim Government will be formed.

:30:16.:30:20.

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

:30:20.:30:25.

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

:30:25.:30:29.

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

:30:29.:30:33.

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

:30:33.:30:38.

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

:30:38.:30:42.

Tripoli is more secure than Benghazi.

:30:42.:30:48.

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

:30:49.:30:52.

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

:30:52.:31:02.
:31:02.:31:05.

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

:31:05.:31:10.

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

:31:10.:31:19.

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

:31:19.:31:24.

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

:31:24.:31:29.

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

:31:29.:31:37.

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

:31:37.:31:41.

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

:31:41.:31:44.

market here in Benghazi and across Libya.

:31:44.:31:54.
:31:54.:31:59.

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

:31:59.:32:04.

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

:32:04.:32:09.

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

:32:09.:32:16.

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

:32:16.:32:20.

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

:32:20.:32:26.

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

:32:26.:32:31.

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

:32:31.:32:34.

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

:32:34.:32:38.

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

:32:38.:32:42.

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

:32:42.:32:49.

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

:32:49.:32:54.

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

:32:54.:33:01.

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

:33:01.:33:06.

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

:33:06.:33:10.

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

:33:10.:33:14.

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

:33:14.:33:19.

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

:33:19.:33:24.

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

:33:24.:33:29.

have already settled. Until they control every city,

:33:29.:33:35.

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

:33:35.:33:42.

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

:33:42.:33:47.

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

:33:47.:33:53.

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

:33:53.:33:56.

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

:33:56.:34:00.

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

:34:00.:34:04.

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

:34:04.:34:09.

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

:34:09.:34:12.

that, presumably, is when liberation will be declared.

:34:12.:34:15.

Although, in practice, with the deadline for negotiations only

:34:15.:34:20.

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

:34:20.:34:24.

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

:34:24.:34:28.

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

:34:28.:34:32.

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

:34:32.:34:36.

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

:34:36.:34:42.

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

:34:42.:34:46.

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

:34:46.:34:50.

Already there is a revolt brewing within the ranks of council

:34:50.:34:53.

supporter about one former Gaddafi commander, who has already been

:34:53.:34:57.

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

:34:57.:35:02.

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

:35:02.:35:07.

to form a new administration over the coming months.

:35:07.:35:10.

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

:35:10.:35:14.

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

:35:15.:35:19.

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

:35:19.:35:24.

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

:35:24.:35:28.

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

:35:28.:35:33.

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

:35:33.:35:40.

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

:35:40.:35:44.

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

:35:44.:35:49.

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

:35:49.:35:56.

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

:35:56.:36:00.

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

:36:00.:36:03.

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

:36:03.:36:07.

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

:36:08.:36:12.

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

:36:12.:36:16.

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

:36:16.:36:20.

Scottish electorate. Then they were known as Scottish unionists,

:36:20.:36:25.

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

:36:25.:36:32.

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

:36:32.:36:37.

something no other party in Scotland has achieved before or

:36:37.:36:44.

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

:36:44.:36:54.
:36:54.:36:54.

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

:36:54.:36:59.

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

:36:59.:37:03.

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

:37:03.:37:09.

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

:37:09.:37:13.

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

:37:13.:37:20.

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

:37:20.:37:29.

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

:37:29.:37:33.

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

:37:33.:37:38.

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

:37:38.:37:42.

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

:37:42.:37:50.

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

:37:50.:37:54.

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

:37:54.:37:57.

of gains for the nationalists that would leave the once powerful

:37:57.:38:05.

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

:38:05.:38:09.

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

:38:09.:38:12.

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

:38:13.:38:17.

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

:38:17.:38:22.

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

:38:22.:38:25.

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

:38:25.:38:29.

are not going to dissolve the Scottish Conservative Party, as

:38:29.:38:33.

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

:38:33.:38:37.

progressive centre right party, with a distinct Scottish identity,

:38:37.:38:43.

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

:38:43.:38:47.

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

:38:47.:38:51.

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

:38:51.:38:54.

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

:38:55.:38:58.

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

:38:58.:39:02.

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

:39:02.:39:07.

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

:39:07.:39:13.

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

:39:13.:39:19.

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

:39:19.:39:25.

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

:39:25.:39:29.

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

:39:29.:39:35.

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

:39:35.:39:41.

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

:39:41.:39:46.

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

:39:46.:39:49.

Secretary of Margaret Thatcher because of a specific problem that

:39:49.:39:53.

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

:39:53.:39:58.

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

:39:58.:40:01.

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

:40:01.:40:06.

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

:40:06.:40:10.

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

:40:10.:40:15.

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

:40:15.:40:17.

ironically that was much more electorally popular than the

:40:17.:40:20.

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

:40:20.:40:23.

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

:40:23.:40:27.

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

:40:27.:40:32.

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

:40:32.:40:36.

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

:40:36.:40:39.

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

:40:39.:40:43.

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

:40:43.:40:49.

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

:40:49.:40:53.

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

:40:53.:40:59.

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

:41:00.:41:04.

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

:41:04.:41:08.

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

:41:08.:41:12.

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

:41:12.:41:15.

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

:41:15.:41:19.

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

:41:19.:41:23.

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

:41:23.:41:29.

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

:41:29.:41:36.

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

:41:36.:41:41.

experienced under the Conservative Government in the 1980, we have

:41:41.:41:45.

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

:41:45.:41:49.

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

:41:49.:41:54.

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

:41:54.:42:01.

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

:42:01.:42:05.

Scottish party. The Scottish Conservatives are the oldest party

:42:05.:42:10.

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

:42:10.:42:17.

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

:42:17.:42:22.

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

:42:23.:42:28.

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

:42:28.:42:31.

radical initiative, create something now, distinctively

:42:31.:42:35.

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

:42:35.:42:39.

policies and values for which we stand are capable of attracting

:42:39.:42:42.

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

:42:42.:42:47.

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

:42:47.:42:50.

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

:42:50.:42:56.

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

:42:56.:42:59.

things Michael saying, we have had excellent leaders the Scottish

:42:59.:43:03.

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

:43:03.:43:06.

have had a Conservative Party leader in Scotland whose personal

:43:06.:43:09.

ratings were higher than the Labour Party.

:43:09.:43:14.

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

:43:14.:43:20.

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

:43:20.:43:25.

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

:43:25.:43:29.

Scotland vote for the Scottish National Party, even though they

:43:29.:43:35.

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

:43:35.:43:38.

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

:43:38.:43:43.

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

:43:43.:43:47.

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

:43:47.:43:53.

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

:43:53.:43:58.

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

:43:58.:44:04.

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

:44:04.:44:06.

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

:44:06.:44:10.

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

:44:11.:44:14.

obscured. You have a situation where the Scottish Conservatives

:44:14.:44:19.

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

:44:19.:44:23.

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

:44:23.:44:27.

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

:44:27.:44:30.

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

:44:30.:44:35.

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

:44:35.:44:39.

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

:44:39.:44:45.

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

:44:45.:44:53.

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

:44:53.:44:58.

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

:44:59.:45:03.

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

:45:03.:45:08.

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

:45:08.:45:12.

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

:45:12.:45:17.

getting across our values and our policies and engaging with the

:45:17.:45:20.

electorate, using modern communication tools, the answer

:45:20.:45:24.

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

:45:24.:45:34.
:45:34.:46:13.

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

:46:13.:46:16.

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

:46:16.:46:26.
:46:26.:46:49.

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

:46:49.:46:52.

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

:46:52.:46:55.

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

:46:56.:47:00.

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

:47:00.:47:02.

afternoon. Bright and breezy picture across the heart of the

:47:02.:47:05.

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

:47:05.:47:10.

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

:47:10.:47:14.

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

:47:14.:47:18.

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

:47:18.:47:24.

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

:47:24.:47:28.

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

:47:28.:47:32.

Northern Ireland the risk of prolonged outbreaks of rain and

:47:32.:47:37.

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

:47:37.:47:41.

west of Scotlandment brightness further east. More showers to come

:47:41.:47:46.

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

:47:46.:47:50.

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

:47:50.:47:54.

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

:47:54.:47:59.

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

:47:59.:48:02.

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