30/09/2011 Newsnight


With Emily Maitlis. In his conference speech Ed Miliband condemned 'predatory businesses', but what is wrong with a bit of predatory capitalism if the net result improves our lot?

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We know there is acrisis of economic growth, is there really a


crisis of can capitalism in Britain? As the new �50 note goes


on display boosting the face not just of a great British scientist


but a venture capitalist Ed Miliband calls for us to get a


Fayer economy. Growth is built on sand if it comes from our predators


and not our producers. Is it type to tear up the old rule back. The


CIA kill another Al-Qaeda spiritual leader. Was he really the lifrpbl


pin we are led to believe. Amanda Knox isn't only guilty of murder as


her Court of Appeal edges towards it is conclusion we are told she's


also a diabolical, satanic, demonic she-devil. Is our cultural


fascination with female killers Good evening. On the even of the


Conservative conference, the government knows it has to convince


us that it has a real plan for economic growth. That may just mean


tearing up the rule book. Earlier this week, to the derision of many


business leaders, Ed Miliband, tried to do just that. Talking of a


need to find a fairer and more decent capitalism. It was time to


cull, he said, the predator businesses who leave morality


behind. Is he right? Realistically, how could it work? We ask if


politic has to re-think its big ideas to help Britain emerge from


the economic abyss. On the knewly designed �50 note there is


recognition of what capitalism can achieve at its best. On the left is


Matthew Bolton who transformed James Watts improvement from a


steam engine into a business that changed the world for good. Ed


Miliband believes there is a crucial difference between business


owners that support the industries of the future, and those who just


want a quick puff of profit. must learn the lesson that growth


is built on sand if it comes from our predators and not our producers.


For years as a country we have been neutral in that battle. This is the


Mayfair Headquarters of the company singled out by Ed Miliband as being


willing to sell your grandmothers for a fast buck. They took over


Southern Cross and sold out increasing its investment. Ed


Miliband would say that's asset stripping, black stone Group would


say it's adding value. What is asset stripping anyway? Richard


Gere gave a good explanation to Julia Roberts when she played a


prostitute and him a kor corporate rate raider. You don't make


anything or build anything. What do you do with the companies


when you buy them. I sell them. sell them? I don't sell the whole


company. I break them into pieces and I sell that off. It's worth


more than the whole. It's like stealing cars and selling them for


pof its. Sort of, but legal. Here is what Ed Miliband sees Alex


Salmond set stripping. Blackstone took over Southern Cross. It split


the company into a property firm which owned the buildings and a


care provider then expanded with borrowed money. The property firm


then sold the homes to third party landlords which leased them back to


the care provider. Blackstone sold out in 2007 for a big profit. As


rents rose and local authority payments fell, Southern Cross


collapsed and had to break itself up, causing anguish for 31,000


residents. Not every takeover is asset stripping. Critics believe it


happens too often. A company comes and acquires a business. It doesn't


improve that business in anyway at all. What it does, it loads the


business up with debt. It extracts as much cash out as it can by


cutting costs and cutting employees and investment. Then it simply


walks away as soon as possible with a profit. It doesn't build any


long-term improvement at all. bad or for good predators are


stalking businesses like the leisure industry. This might seem


like a goodbyes on a Friday night. The owner of All Bar One is the


prey of a hostile takeover bid itself. It's predator is Joe Lewis,


the Tottenham Hotspur owner. He reckons if he took it over he would


do a better job of running it. If capitalism is red in tooth and claw


don't we need a few predators. The private equity companies say they


are often supporting invest os not asset strippers. We invested in


companies between three or or five years. They that has gone up during


the downturn. If you talk to the managing directors of the companies


we invest in they value the skills that private equity brings to bear.


It's about building sustainable business over the longer term.


most criticised press tors like BlackStone have achieved positive


results keeping employees in work who may have lost their jobs. How


could you discourage the bad predators without keeping out the


good ones? There is an important point at the root of this. Alhamzi


though very often markets work really well, private interests work


in the public interest. Sometimes, it doesn't. The public interest


isn't being well served by unregulated markets. We don't have


to talk about state intervention much we can talk about getting


employees, kust ministers mers and other stake holders involved with


the governance of companies or the ownership of companies. If I take a


company that is going to go bust, I may have to shut down one of the


three factories and sell it off. That could look like asset


stripping, I may lay staff off, I would say save 1,000 jobs rather


than cutting 200. There are no set of rules you can write down in


black-and-white and a tick box exercise. There is an awful lot of


judgment involved. That is a hard thing to do. The capitalism of


Matthew Boulton and James Watt may not have been kinder than today's.


By putting them on the �50 cot Bank of England be hinting we should


take a trip back to the future stphr Joining me now to discuss the


morality of capitalism is Rowenna Davis of the soon to be published


book, Tangled up in Blue, Blue Labour and the Struggle for


Labour's Soul. Also joining me from Newcastle is Business Angel and


multi-millionaire venture capitalist, Jeremy Middleton. He's


also the deputy Chair of the Conservative Party Board. Business


has slammed Ed Miliband's vision this week. He is right, isn't he,


to be thinking big and thinking philosophically, this is radical?


It shows he doesn't understand business. He is talking about


predators, he means people like me who are business angels or venture


capitalists. What this country needs is more venture cam


capitalists. They fill the gap where banks won't go. Banks won't


do startups which we need. You won't find banks taking risks,


venture capitalists do that. If you look at Dragon's Den. I'm sure your


viewers see it, who would put the money in if the Dragons didn't, no-


one certainly would put the money. In we need more dragons we don't


need to put the fire that the dragons have out. Which is what Ed


Miliband would do. Now will is a question in the wake of 200 about


what kind of capitalism we want. The fact is, it hasn't been working.


At the moment we are going to be paying back a hell of a lot of


money to banks because they acted morally irresponsiblibly. Business


cannot continue as normal. What about the venture capitalists we


are talking about - With all due respect to Jeremy, it's a sip


simplistic interpretation of the speech to say that Ed Miliband


doesn't like venture capitalists. What he was saying was, there is a


difference between goodbyes practice and bad business practice.


We should divide those lines. We don't need business that is built


on sand, that ends up bringing long-term - Of which Jeremy


Middleton it's hard to disagree with? This country needs growth and


jobs. For that we need risk takers. We don't need more regulation, more


taxation - Can I come in on that point? We need support. It's


nonsense to be talking in this way. How are you going to do it? When


you talk about risk takers, is a bad company or two a price worth


worth paying? I think, we talk about the odd bad company, there


are good and bad in life. To be perfectly - They do exist?


Businesses overwhelmingly are forces for good. I have been


investing in companies for 20 years. I sit on numerous boards. Over that


time the companies I'm involved with employed 5,000 people or more.


They have paid millions in tax. That is a force for good. The idea


that somebody can set up some sort of commissar to judge what is good


and bad. You have to pay taxes and follow the law. That is what


companies need to do. How would you do it? I find this ridiculous.


Goodbyes practice and bad business practice. If you get the regulation


right in the beginning you stop state intervention. People don't


have to step in and bail out - There is already regulation -


good is that regulation. We have a massive financial crisis much I


don't see many regulations changing in the way wake of it. What would


you do? We have rules anyway. Why don't we make them recognise moral


standards. Why don't we - nothing revolutionary - What does that mean,


recognise moral standards? Put it into something that someone can


understand. When you do public procurement, make sure we give


contracts to those companies who give apprenticeships. Tax breaks to


companies who pay the living wage wage to their workers because we


respect dignity in work. concrete examples? You find anybody


who does apply will, living in this country lrks have to pay the


minimum wage - Living wage. might give the contracts to people


who are paying higher sums. You are forming a judgment there which you


are not in a position to do. You talk about apprenticeships as good


things. What about small companies. And people taking - Why don't we


give tax breaks to those companies to help them? Can I also point out.


It's obvious that Jeremy knows what goodbyes practice is and recognises


moral standards. One of the companies he set up Homeserve say


it's bleest believes in responsibilities of integrity. When


the government starts talking about it, it's as if it's - You are being


complimented. Whether you like it or not, you are an ethical business


and that the economy would flourish from that? Well, I'm grateful for


that. And I think it's great that companies - You recognise your


morality in your business? It's in the best interests of business to


behave in the best interest of their communities. All the Boards I


sit on we spend our time thinking about how to improve customer


services. How do we improve the motivation and moral of our staff?


We don't need to do is more regulation and more taxation and -


It's not more regulation to give awe tax break. Apart - it looked to


me like a speech where he is trying to create a bogey man. Trying to


find someone to blame. I really don't know what he was specifically


planning to do. Who is going to judge what is good and what is bad?


It's in the best interests - It's not about sitting in judgment on


companies? What is it. Who are the predators. You are talking about


practices, that is not what he said. I spoke to the office today to make


sure it's clear. He is not sitting in judgment on companies. He is


saying there are rules to the game in the market. When we design the


rules they should be implemented with an eye to marral standards.


That would be good for society and good for business. That isn't


radical at all, is it? particularly, no. I don't see what


the problem. Is I would say that every single man - every single and


man woman on the street would tell you that they know what goodbyes


practice is. They know it's immoral to have something come through


their door offering them a loan for something they can't afford and can


never pay back. The public taste for that kind of operation has just


reached a limit. You must recognise that things have gone badly wrong


since 2007/2008 something big has to change? There is no doubt that


most companies are ethical and wish to be as ethical as possible. That


is goodbyes. What I'm saying, if all you are saying is what we


already know, what are you saying? I mean, is motherhood an apple pie?


Most of us entirely go along with that. If that is all it is, what is


the substance in the speech? I didn't hear it. There is a hell of


a lot. What you are suffering from a moral blindness in what is


happening here. Even though we bailed out the banks the


regulations that came through hardly make any difference at at


all. Ed Miliband is saying - Firmer regulation? That would be one part


of it. A lot of incentives. Have worker representation? Tax breaks


for the living wage? What you mean, you want to interfere in business


more. Not at all. One of the things you have - That is you hand it back.


That is absolutely fan fine. There are rules already. Why don't we


have rules that have an eye to marral standards. The status quo


Jeremy, I know you are having problems with your earpiece. We


understand George Osborne is going to say tomorrow that tax cuts will


be pretty much ruled out before the next election. As an entrepreneur


yourself, could we get your response? The most important thing


is that we have an economy that is growing and that means lower


interest rates and that means we have to control the debt. That is


the most important thing. I hope taxation will come down when it can


come down. The Government has already made some reductions in


corporation tax and has promised more, but you can't we do use them


further and to you can afford it. - - reduce them. Thank you both very


much indeed. Where Bush tried, Obama, it could


appear, has succeeded not once but twice - and in a field few imagined


would be his strength. Tonight, America hailed as a victory the


assassination of Anwar al-Awlaki - Al-Qaeda's link, they said, to the


English-speaking world. So what is his legacy, and how will his death


be received? Tim Whewell reports. He was the western face of Al-Qaeda.


Not a senior commander, or even a senior cleric at, but the terror


network's most charismatic English language propagandist. I eventually


came to the conclusion that she had against America is binding upon


myself just as it is binding upon every other able Muslim. A US


citizen born in New Mexico, Anwar al-Awlaki could speak to American


and British Muslims in their own language and recruit them to do his


cause. Now an air strike in his adopted homeland of Yemen has put a


stop to that. My reaction is we got him. This is one of the most


treasured targets we have been seeking for a long time. We all


feel this is, in terms of winning that important wall we talked about,


the war of ideas, it is an absolutely critical victory.


Awlaki was in touch with an... He was in contact with the underpants


bomber, who planned to blow up a plane to Detroit on Christmas Day


that year. And he inspired Russian our Chowdhry, who stabbed the


London MP Stephen Timms at his constituency in 2010. Ifan a fist


comes to you and says give me prove that God exists, -- Ifan a feast.


You say that you exist. Pish -- if an atheist or stop he enjoyed a


devoted following worldwide. American and British Muslims after


he moved to the UK in 2002. He spoke here at the East London


Mosque in December 2003. During the two years or so that al-Awlaki


spent in Britain, he was in great demand as a speaker at Islamic


events. The group's hosting him did not support extremism. This London


mosques -- this London Mosque actively opposed it and he didn't


preach violence. But he did open the eyes of at least some of his


audience to a more political understanding of Islam. And while


it is perfectly possible to be an Islamist without being violent, it


is quite difficult in these times to be a violent Jihad the without


first being an Islamist. Emphasising the divide between


Muslims and the West, pushing people towards the violence,


without advocating it directly, was the subject of a major study


published in London. He was immensely popular. He was the face


of orthodox conservative Islam in the West. He was sent all around


the country, speaking that universities, packing every place


he went and spoke out. A lot of the Islamic Forum's lit up with


excitement when he came. He was really treated... The treated he


got was unparalleled as far as Islamic preachers go. Moving to his


parents' home in Yemen in 2004, he taught at this university, where


Newsnight found a strong anti- Western attitudes, before later


becoming prominent in the increasingly powerful local branch


of Al-Qaeda. Since Osama Bin Laden's death, it has emerged that


it was al-Awlaki Al-Qaeda in the Arabian prince here but wanted to


increase the Western attacks -- AQAP. What we have found is that


there was this the division between the old guard and the new card and


al-Awlaki represented the new guard. Even though it was lower


consequence, they were higher density attacks, to illustrate they


were still relevant. But now Yemen appears to many to be on the verge


of civil war. Split in two opposing factions and tribes after months of


protests against President Ali Abdullah Saleh. Al-Awlaki is dead


but the chaos in the country may mean that the remaining Al-Qaeda et


fighters have more space to operate. This period of turmoil with the


President is supposedly committed to transition. We have seen an


enormous amount of instability and in that process, unfortunately,


over 65 members of AQAP have managed to escape from prison. On


the one hand, we have decapitated their leader with al-Awlaki, but we


have now seen at the Asper of a number of disciples across the


Off and his influence will outlive him in the West. -- and.


Operationally, you can say we are safe for now, but if we are talking


about ideologically, that is not going to end. He has said


everything he needs to say as far as convincing people to mobilise in


favour of Al-Qaeda. America's drone attacks in Yemen are likely to


continue, further weakening the terror network, but the struggle


for hearts and minds in the Muslim world will have to continue as well.


The appeal trial of Amanda Knox will come to its conclusion early


next week in Perugia, when six jurors and two judges decide


whether to overturn her conviction and 26-year sentence for murder. In


2007, the American was found guilty - along with her boyfriend and


another man - of killing British student Meredith Kercher. But


during the hearing, the lawyer of the man she had originally and


wrongly accused of the crime, Diya Lumumba, described her as a


"demonic she-devil with a dirty soul". Has a trial that started as


a media circus turned into She was a diabolical satanic and


Not the words of some medieval Pope, but one of the lawyer's are bought


in the appeal of Amanda Knox. She has been described as everything


from Jessica Rabbit to a Venus in a first during the past we got caught


herrings. Just calling her a murderer doesn't seem to be another


Today, the prosecution alleged that if her appeal were allowed, she


would immediately flee the country. TRANSLATION: We know that if the


verdict is overturned, there will be an immediate escape overseas. As


a result, even if this is the second of a three-step legal


process in Italy, it is up to you to ensure that justice -- ensure


justice. Amanda Knox claims the murder was carried out by Rudy


Hermann Guede ape from the Ivory Coast on his own. He has also been


convicted of the murder. -- from the Ivory Coast. Will we will find


out the verdict on Monday, but guilty or not, what does her


depiction in the media and now the court as some kind of modern-day


witch say of misogyny in modern-day Italy?


I'm joined now by author and feminist commentator Joan Smith and


Annalisa Piras, the London correspondent for Italian news


magazine L'Espresso. Welcome to you both. Just to


clarify, we are not really talking about the innocence or guilt of


Amanda Knox. But we have seen some of the words used there. You could


just say it is a pretty normal case of a lawyer trying to influence the


case, could ensue? I think it is the culmination of a pro -- process


that has been going on since 2007. It is a really horrible murder of a


young woman and the whole case has got completely messed up by the


focus on Amanda Knox. After all, three people have been convicted of


different things in relation to this murder. We hear enough --


almost nothing about the two men involved and what has happened is,


I think normally in cases like this, you get a sense of what actually


happened. I think it has been completely impossible from the


start to get a sense in this case because of the focus on one woman,


who is a foreigner, who is pretty and obviously quite sexual, and


that has muddied the entire case. Do you think this is specific to


the culture in which the trial is taking case? Or is this what we do


to all alleged women killers? is always a fascination with any


crime which involves a man and a woman, or more than one murderer.


If there is a woman involved, the focus tends to be on her rather


than the male perpetrators. I think also you have to remember that


Italian culture, particularly popular culture, is incredibly


sexist and women are centralised all the time and it has a prime


minister who seems to describe himself as a part-time Prime


Minister because he is so interested in his sex life. That is


very much to the detriment of women because it portrays them as sexual


creatures and whenever they are portrayed primarily as that, they


get punished for it with this kind of rhetoric about witchcraft and


last. Is that too profound to make this into a Berlusconi's it to


leave...? -- Italy. I think it is quite clear that it is not a


country for women. He has brought back a very chauvinistic and Mrs


Dot -- misogynistic attitude towards women, dividing them into


Madonna, Hall and which. Amanda Knox has fallen into the last


category. On top of that, she is also American. That goes deeper


into the Italian male Psyche, because in the Second World War,


when the British and American women arrived, there is this image of


these terrifying, liberated sexual woman that is not controllable but


is incredibly attractive. Before we make this into a sob story, and she


is not the real victim here at all, Meredith Kercher is, Jessica


Rabbit? That is a quote used by her own defence lawyer. It works both


ways. That is my point, it is actually impossible to work out who


the real demand a Knox is in this trial. -- Amanda Knox is in this


trial. But these are a generation of women who have been posting


personal things about themselves on internet website and a huge deal


has been made about what she posted on a social website. That is the


kind of thing that young men and young women do it without thinking


about what it would look like it in a highly publicised trial. You have


to remember that the extraordinary accusation this week is that women


are dressed -- driven by lust and our sex-crazed, that was kind of a


pact with the devil. It is medieval. It goes back to 1486 and the


publication of the Hammer at of witches. Most of that book inspired


incredible scenes across Europe and ended in the deaths of thousands of


its innocent people. All that was because women cannot be trusted


because they are defective compared to men and are untrustworthy and


all of that is coming out in the trial. The wider question is that


whatever the verdict now, will there be a suspicion that somehow


it has been influenced by the way this trial has been run? I guess


that is impossible to avoid. There has been such a phenomenal media


attention, and there has been all of these stereotypes are thrown at


had, it is difficult to say they jury will not be influenced. On the


other hand, I trust the final verdict will take into account


everything that has been put on the table, the reliability of the Pru


found the evidence and her behaviour and so on. -- prove, and


the evidence. And nothing she will get a lesser conviction that she


has now. -- I think. I think it does a disservice to everyone in


the trial, including the victim, to turn a forensic forum into a witch


hunt like this. Thank you very much. Let's take you


through the papers. I mentioned the story in the Daily Telegraph. Just


there to talk you through this. George Osborne says he is a


conservative who believes in the Lower taxes but not finding them by


borrowing more, so it is highly cautious on whether there will be


tax cuts in the next -- before the next election.


The Tories despairing over Cameron growth plans.


The Daily Mail, the revolt over EU benefits. And at how the city


bankrolls the Conservatives. That's all from Newsnight tonight,


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

In his conference speech Ed Miliband condemned 'predatory businesses', but what is wrong with a bit of predatory capitalism if the net result improves our lot?

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