:00:09. > :00:11.It's just like old times, a Tory It's just like old times, a Tory
:00:11. > :00:15.rebellion on Europe. How damaged is the Prime Minister's authority, and
:00:15. > :00:23.why shouldn't the British people have a vote on whether they want to
:00:23. > :00:33.be part of the EU? The ayes to the right, 111, the no
:00:33. > :00:36.
:00:36. > :00:42.s to the left, 483, the no nos have it. It looks as if there were about
:00:42. > :00:47.180 Conservative rebels. This is what you get when you mention Senor
:00:47. > :00:51.Berlusconi around Brussels. Is the single currency in the hands of a
:00:51. > :00:54.leader seen as a clown by many of his peers.
:00:55. > :00:58.Europe's banks aren't laughing tonight. They have been asked to
:00:58. > :01:06.lose two-thirds of the money they lent to Greece. Can that be done
:01:06. > :01:09.without crashing the markets. Also tonight: If you increase the
:01:09. > :01:15.yields in Africa to what the world needs, Africa would become a net
:01:15. > :01:25.exporter of food. As the world population tops seven billion, can
:01:25. > :01:26.
:01:26. > :01:29.Africa really Feed The World. The Prime Minister got his way in
:01:29. > :01:31.Parliament tonight. A few minutes ago, the attempt to get a
:01:31. > :01:35.referendum on membership of the European Union was defeated, only
:01:35. > :01:38.with the votes of Labour and Liberal Democrat MPs, and with
:01:38. > :01:42.dozens of Conservatives rejecting the authority of David Cameron,
:01:42. > :01:47.saying their primary duty was to constituents. The debate was
:01:47. > :01:53.passionate, but most passionate as Conservative MPs argued among
:01:53. > :01:56.themselves. I'm not entirely sure what is the most significant
:01:56. > :02:00.feature of what went on behind me in the House of Commons today. Was
:02:00. > :02:04.it the fact that there was no significant Government business at
:02:04. > :02:08.stake? Indeed, no Government business or any business of any
:02:08. > :02:12.description, no vote tonight was going to compel anyone to do
:02:12. > :02:16.anything. Or was it the fact that there was never any danger of David
:02:16. > :02:21.Cameron losing the vote. As we have seen, he won it by 4-1. He knew
:02:21. > :02:25.that Labour and the Liberal Democrats were going to offset any
:02:25. > :02:29.rebellion from his party. And yet, still, he forced a three-line whip
:02:29. > :02:34.on the issue. There is considerable anger among MPs on that tonight.
:02:34. > :02:38.But I was speaking to one person, who is particularly close to David
:02:38. > :02:42.Cameron, a little earlier, who said they had absolutely no choice but
:02:42. > :02:46.to have the three-line whip, anything less would show you were
:02:46. > :02:49.not serious. You can't have the House of Commons saying stuff and
:02:49. > :02:53.pretend it doesn't mean anything. But out of all the nothingness
:02:53. > :02:57.today, seemingly unpromising material, we have a rebellion.
:02:57. > :03:01.Something like 80 Conservative MPs defying a three-line whip.
:03:01. > :03:05.Something like another 15 abstaining, still in defiance of
:03:05. > :03:08.what the leadership wanted. Out of this today we have people talking
:03:08. > :03:15.about this being a profoundly important day in the history of
:03:15. > :03:23.David Cameron's leadership. The hoaxy cokey referendum. Three
:03:23. > :03:26.options, in, out, or shake it all about. Or as Parliament had it,
:03:26. > :03:29.renegotiate the terms in order to create a new relationship, based on
:03:29. > :03:33.trade and co-operation. All day Conservative whips have been trying
:03:33. > :03:39.to persuade MPs not to shake anything all about, least of all-
:03:39. > :03:41.party unity. Aiden Burly is one of the ministerial aides or
:03:41. > :03:44.parliamentary private secretaries, called in for a meeting with the
:03:45. > :03:48.Prime Minister. I have had a very difficult weekend, I will support
:03:48. > :03:51.the Government, but as a 32-year- old new MP, I find it strange that
:03:51. > :03:56.we haven't had a say on this issue since four years before I was born.
:03:56. > :04:00.I think there is a bit of frustration from my generation of
:04:00. > :04:03.politicians that the British people haven't had their say on this issue.
:04:03. > :04:08.It is an issue the people will have to have a referendum on at some
:04:08. > :04:13.point in the future. Not all were convinced, Adam Holloway was
:04:13. > :04:19.private secretary to the Europe Minister, not any more he isn't?
:04:19. > :04:23.I'm not prepared to go back on my word to my constituents. I'm really
:04:23. > :04:30.staggered that loyal people like me have actually been put in this
:04:30. > :04:34.position. If Britain's future as an independent country is not a proper
:04:34. > :04:37.matter for a referendum, then I have absolutely no idea what is.
:04:37. > :04:41.This aim after a rather conciliatory speech by the Prime
:04:41. > :04:45.Minister. Mr Cameron was fresh from a row with Nicolas Sarkozy, that
:04:45. > :04:51.would have no doubt cheered his party no end. In the chamber he
:04:51. > :04:54.told his MPs, look, we disagree with timing, not objectives.
:04:54. > :04:58.share the yearning for fundamental reform, and I am determined to
:04:58. > :05:02.deliver it. Those who are supporting today's motion, but
:05:03. > :05:08.don't actually want to leave the EU, I say to you this, I respect your
:05:09. > :05:14.views, we disagree with ends, not about means. I support your aims.
:05:14. > :05:18.Like you, I want to see fundamental reform, like you, I want to
:05:18. > :05:23.refashion our membership of the EU, so it better service our nation's
:05:23. > :05:27.interests. The time for reform is coming, that is the prize. Let us
:05:27. > :05:32.not be distracted from seizing it. It is tempting to see this
:05:32. > :05:36.referendum debate as a rekindling of the old Conservative Euro-
:05:36. > :05:40.sceptic fire that engulfed the party in the 90s. It is not that.
:05:40. > :05:43.For a start, the Conservative Party today is more united than it has
:05:43. > :05:47.ever been on Europe. What they are divided on is David Cameron, and
:05:47. > :05:52.specifically whether he can be trusted to deliver what they want
:05:52. > :05:58.on Europe. The public debate, and private conversations today, have
:05:58. > :06:01.been punctuated by this Cameron scepticism. Is it any wonder that
:06:01. > :06:05.on Conservative home website today, a poll of Conservative Party
:06:05. > :06:09.members now suggests that two third of Conservative Party members do
:06:09. > :06:12.not believe that the present Government has any intention of
:06:12. > :06:18.repatriating powers from Europe. I have to say to Her Majesty's front
:06:18. > :06:24.bench tonight, shame on you. So it is for us backbenchers, to
:06:24. > :06:27.say to Her Majesty's Government, stiffen your sinews, summon up the
:06:27. > :06:34.blood, and imitate the action of a tiger, that is how you should
:06:34. > :06:42.behave towards our European partners, not like bagpuss. I now
:06:42. > :06:46.invite David Cameron to the rost trum. Why the mistrust? David
:06:46. > :06:50.Cameron started off sounding as Euro-sceptic as any of these MPs,
:06:50. > :06:54.complete with big cat references. They want a federalist pussy cat,
:06:55. > :06:58.not a British Lion. Once leader of the opposition, remember, he
:06:58. > :07:02.promised a referendum on the Lisbon Treaty. I'm pushing for that
:07:02. > :07:06.referendum, that is the case this week, next week, that won't change.
:07:06. > :07:11.That commitment was dropped once the Lisbon Treaty was ratified. But,
:07:11. > :07:15.that simply is not good enough, according to some Conservatives.
:07:15. > :07:20.MPs don't keep their promise, say the cynics, you say whatever you
:07:20. > :07:25.say to get elected, they cry. Today is our chance to show the cynics
:07:25. > :07:28.that they are wrong. All three parties until recently promised the
:07:28. > :07:33.people a referendum on the EU. There is no point in clever word
:07:33. > :07:36.play, there is no point in reading the clever brief from the Foreign
:07:36. > :07:40.Office officials. It was what most people understood that we were
:07:40. > :07:44.going to give them a referendum. That's what MPs in all parties
:07:44. > :07:49.wanted the people to believe. It is the impression we deliberately
:07:49. > :07:54.conveyed. This evening we have a chance to keep our promises. There
:07:54. > :07:57.we have the result, we know the Government has won this very
:07:57. > :08:00.comfortably, Downing Street is suggesting that something like 81
:08:00. > :08:04.Conservatives defied their whip. What does it all mean? I was chat
:08:04. > :08:07.to go one cabinet minister on their way in to vote who seemed to
:08:07. > :08:12.suggest this would have a very limited shelf life, people would
:08:12. > :08:16.have forgotten about it in a few weeks. I'm not so sure. The anger
:08:16. > :08:22.that came out in the dewait today, I think will - debate today, I
:08:22. > :08:24.think, will take a long time to go away. Rebellion is addictive, we
:08:24. > :08:28.have seen it in previous administrations. Under Tony Blair,
:08:28. > :08:31.one of the experts who looked at the rebellions has pointed out it
:08:31. > :08:35.took him six years where he got to the point of a rebellion of 80
:08:35. > :08:39.people. His majority was a lot bigger. It will take a lot of time,
:08:39. > :08:43.from the anger I have heard, from people in private, on the
:08:43. > :08:46.Conservative backbenches, for that anger to go away.
:08:46. > :08:52.Standing in a corridor in Westminster, to try to explain
:08:52. > :08:57.what's going on, Adam Holloway, who resigned today as a parliamentary
:08:57. > :09:02.private secretary, and the Deputy Chairman of the Conservative Party.
:09:02. > :09:06.Adam Holloway you have effectively chucked away any ministerial career,
:09:06. > :09:09.why? I don't think I was being earmarked for secretary of defence.
:09:09. > :09:12.It is straight forward, since I went to my constituency, seven
:09:12. > :09:16.years ago, I have been banging on to people when they have asked, and
:09:16. > :09:21.when they haven't, saying of course we should have a referendum on the
:09:21. > :09:26.membership of the E. I would personally like to renegotiate. And
:09:26. > :09:30.frankly, when the opportunity to vote on something, even a non-
:09:30. > :09:35.binding backbench motion came up, I would have felt pretty ridiculous
:09:35. > :09:41.with my friends in Gravesend, North Fleet and the villages, for not
:09:41. > :09:43.supporting it. Do you believe some of your colleagues have not carried
:09:43. > :09:47.out their constituents' wishes if they have voted with the
:09:47. > :09:51.Government? I can only talk about my own circumstances and how I feel
:09:51. > :09:53.about it, having been on their shoulders for the last 17 years.
:09:53. > :09:57.From my perspective, with the position I have, and the
:09:57. > :10:02.relationship I have with people in my area, it would be very difficult
:10:02. > :10:05.for me not to have done what I did today. Is there any resentment on
:10:05. > :10:10.your part that the way the leadership has behaved has made it
:10:10. > :10:13.necessary for you to behave like this? They are a lot cleverer than
:10:13. > :10:17.I am, perhaps they could have found a way out for people like me, who
:10:17. > :10:23.have actually been extremely loyal to Cameron. I want him and the
:10:23. > :10:30.country to do well. I'm not being a fish co-fant because I'm Newsnight
:10:30. > :10:34.and he - and he might be watching. I think he's doing a brilliant job
:10:34. > :10:39.in difficult circumstances. It is a matter of conscience for you?
:10:39. > :10:43.a bit grand, but it is about my relationship with my constituents.
:10:43. > :10:47.Michael Fallon, you voted, loyally, with the Government, what do you
:10:47. > :10:50.think your constituents wanted you to vote? Our constituents were not
:10:50. > :10:54.promised a referendum on whether we should leave the European Union,
:10:54. > :10:59.that was not in our manifesto. On the contrary, they were told we
:10:59. > :11:02.would do everything we could to repatriate powers, and to make sure
:11:02. > :11:07.there would be a referendum lock if any further powers were transferred.
:11:07. > :11:13.That referendum lock is already in place. We passed an act of
:11:13. > :11:16.Parliament now, stopping any future powers being transferred. So we
:11:16. > :11:20.fulfilled to our constituents that part of the bargain. There are a
:11:20. > :11:25.lot of colleagues, Adam, a lot of Conservative and Labour colleagues,
:11:25. > :11:31.who feel extremely passionately about this, but in the end, that
:11:31. > :11:35.motion tonight was very strongly defeated. And just remind us, how
:11:35. > :11:42.far is your constituency from Adam Holloway's constituency? I think
:11:42. > :11:48.there are a few. We touch. They are a few miles inbetween. How can you
:11:49. > :11:53.have come to such completely contradictory conclusions then?
:11:53. > :11:55.Conservative manifesto was clear, we never promised a referendum,
:11:56. > :11:58.that has never been Conservative policy. Conservatives have never
:11:58. > :12:01.advocated leaving the European Union, there is too much trade at
:12:02. > :12:05.stake, there are millions of jobs at stake there. There is an awful
:12:06. > :12:08.lot of investment in our country at stake, because we are part of this
:12:08. > :12:12.huge single market. What we have always said and was in the
:12:12. > :12:15.manifesto is we want a much better deal for Britain from our
:12:15. > :12:18.membership of the European Union. That is what David Cameron spelt
:12:19. > :12:22.out tonight. There is a huge prize at stake here, the treaty is now
:12:22. > :12:26.going to have to be revised, because the eurozone is under
:12:26. > :12:30.pressure. There is a big opportunity here now to advance
:12:30. > :12:34.national interests. We think we ought to be seizing that, rather
:12:34. > :12:38.than going backwards over the old debates of whether we should be in
:12:38. > :12:43.or out. Talking of seizing opportunities, which powers to you
:12:43. > :12:53.propose to repatriate, and when? have already spoken about the need
:12:53. > :12:58.to repatriate some of the quite unnecessary stuff decided at the
:12:58. > :13:01.union - European level, employment legislation, anything that stops
:13:01. > :13:04.you employing people or stops the labour force being more flexible.
:13:04. > :13:07.There was a paper put to the Government this weekend that said
:13:07. > :13:10.to match the United States Europe had to be more flexible and more
:13:10. > :13:16.competitive. That is the kind of change we need to see in Europe.
:13:16. > :13:21.The way to do that, like it or not, is to engage with Europe, and take
:13:21. > :13:27.this opportunity that is now opening up to ensure that British
:13:27. > :13:32.national interests are, not just protebgtd, but advanced. How is it
:13:32. > :13:35.that 80 people who got elected on the same manifesto as you have come
:13:35. > :13:40.to a different conclusion? That is a minority of the parliamentary
:13:40. > :13:43.party. It is still a lot of people. Already David Cameron has secured
:13:43. > :13:46.the repatriation of one big power, which was our involvement in the
:13:46. > :13:50.bailout mechanism. That is back. We already have an act of Parliament
:13:50. > :13:54.securing a referendum lock, saying you don't have to trust politicians
:13:54. > :13:59.in future, if there is any transfer of competence to Brussels, there
:13:59. > :14:03.has to be a referendum. That is now part of the British constitution.
:14:03. > :14:07.Two of those pledges in our manifesto have already been put
:14:07. > :14:10.into practice, I think, therefore, we can trust David Cameron, and his
:14:10. > :14:14.leadership, now to take this forward, and use the opportunities
:14:14. > :14:18.that are opening up in Europe, because of the way the eurozone is
:14:19. > :14:25.now in crisis, to advance our interests and get what we want, a
:14:25. > :14:28.much better deal for the British economy. All this raises
:14:28. > :14:31.fascinating questions about what ought to be the relationship with
:14:31. > :14:35.the organisation that was an economic community when we joined t
:14:35. > :14:40.and is now a political union. It was all too much for the French
:14:40. > :14:45.President, who at the weekend, lost whatever patience he possesses and
:14:45. > :14:49.told David Cameron he should shut up, they are sick of him citsigs
:14:50. > :14:54.and telling them what to do. What is our role in Europe if not to
:14:54. > :15:00.carp from the side lines. Once again, Britain seems to be
:15:00. > :15:03.carving out its own path, a branch line in that great European way
:15:03. > :15:12.ahead. It is yet another two-track solution that Downing Street wants.
:15:12. > :15:17.But this time with a twist. The UK seeks, once more, to limit its
:15:17. > :15:23.integration in the European product, just as it did with the border
:15:23. > :15:27.control regime, or the formation of the euro. The twist this time now
:15:27. > :15:32.is that the Britain is trying to tell those at the very centre of
:15:32. > :15:37.the network how to run their business. Crucially, my European
:15:37. > :15:41.colleagues need to accept the remorseless knowledge of monetary
:15:41. > :15:45.union that leads from the single currency into greater fiscal
:15:45. > :15:49.integration. In Britain's view, the continuing Greek crisis just
:15:49. > :15:54.underlines the case for greater fiscal union, to even out the
:15:54. > :15:59.imbalances between north and south. But as the importance of stability
:15:59. > :16:03.funds grows, and Germany insists on being able to punish countries that
:16:03. > :16:10.spend too freely, the EU is moving towards a more formal financial
:16:10. > :16:13.arrangement. Treaty change can only happen if it is agreed by all 27
:16:13. > :16:17.member states of the European Union, and any treaty change, as the last
:16:17. > :16:23.treaty change did, is an opportunity for Britain to advance
:16:23. > :16:27.our national interest. This attitude was too much for President
:16:27. > :16:32.Sarkozy, who lambasted David Cameron yesterday for trying to
:16:32. > :16:37.tell the eurozone countries what to do. So what is the UK's national
:16:37. > :16:41.interest in this eurodebate? first priority, in responding to
:16:41. > :16:45.treaty changes, aimed at stablising the eurozone, will be to protect
:16:45. > :16:50.the rights of those countries in the EU, but outside the eurozone,
:16:50. > :16:54.over decisions affecting them, and to prevent damage to the financial
:16:54. > :16:59.services industry, so important to the economy of this country. There
:16:59. > :17:05.are, though, some other British agendas, the financial crisis
:17:06. > :17:09.increases Germany's clout in Europe. Will the euro increasingly run to a
:17:09. > :17:13.German timetable? Certainly Poland and Sweden share some of Britain's
:17:13. > :17:18.concerns. That increased integration means greater German
:17:18. > :17:25.power. On Wednesday, those inside and
:17:25. > :17:28.outside the euro will try to find common ground in Brussels. None of
:17:28. > :17:34.the Governments in the EU wants to see the euro implode, but
:17:34. > :17:38.increasingly the price of keeping it alive, looks like a profound
:17:38. > :17:42.realignment of power within Europe. To help us work out where we belong
:17:42. > :17:45.in this new Europe is the former Chancellor of the Exchequer, Norman
:17:45. > :17:50.Lamont. The economist, David Rennie, and the Labour MP, Gisela Stuart,
:17:50. > :17:57.who once was entrusted with the responsibility of trying to draw up
:17:57. > :18:00.a new European constitution. David Rennie, if this is resolved, this
:18:00. > :18:07.euro crisis, it will mean at the end of it we are more marginal,
:18:07. > :18:10.won't it? It will, not just marginal in an in and out sense.
:18:10. > :18:18.The danger is the 17 countries that use the single currency, if you
:18:18. > :18:25.look at them and compare them to the whole of the Europe there is a
:18:25. > :18:29.lot of people missing from the table, the Swedes, the Dutch. This
:18:29. > :18:34.worries them, they don't want to be stuck with just the French and the
:18:34. > :18:40.club med countries. Because of the pressures we saw on David Cameron,
:18:40. > :18:46.he can't come in and shape the rules from the main table. Do you
:18:46. > :18:49.count yourself as German, British? Bavarian. We have all dark secrets
:18:49. > :18:53.I suppose! This is part of the onward march of Germany in Europe,
:18:53. > :18:58.isn't it? You started off by saying if this euro crisis is involved.
:18:58. > :19:02.is a big if, I agree. You still assume that bailouts and all these
:19:02. > :19:05.things will solve the problem, which is one of periphery countries
:19:05. > :19:10.not being able to become competitive again. And what you
:19:10. > :19:15.have is a construct that simply will not work. It is economically,
:19:15. > :19:18.in its tensions, not sustainable. Germany is in the dreadful position,
:19:18. > :19:22.even if they wanted to, their economy is not big enough to
:19:22. > :19:26.permanentry bail them out. They get no thanks for attempting to bail
:19:26. > :19:30.out, or trying to tell the other countries how to run things. Do you
:19:30. > :19:35.think our attitude towards German power in Europe has changed?
:19:35. > :19:40.don't think our attitude towards German power has changed, I think
:19:40. > :19:44.Germany has come through a long period where it was reuniting the
:19:44. > :19:51.east with the west, and we tended to write Germany off too easily. We
:19:51. > :19:56.tended to talk about the German economy becoming a bit sclerotic, I
:19:56. > :20:00.e I always felt the same old strong Germany would reemerge. Germany is
:20:00. > :20:05.by far the most competitive country and export orientated in Europe. It
:20:05. > :20:09.is natural it is the dominant power in the eurozone.
:20:09. > :20:14.Is the fact we don't know how this euro crisis will be resolved,
:20:14. > :20:17.perhaps it makes the whole of this conversation we are having at the
:20:17. > :20:21.moment completely pointless, because we don't know on what basis
:20:21. > :20:25.we are predicating the discussion. Assuming some sort of resolution
:20:25. > :20:29.can be found, and it is a big assumption, everyone agrees, we are
:20:29. > :20:32.more marginalised at the end of it, aren't we? You are either in
:20:32. > :20:36.something or not. We are affected by the American economy, you could
:20:36. > :20:41.say we are marginalised by it. We have made a decision not to join
:20:41. > :20:50.the euro. We can't grumble then if there are some decisions that have
:20:50. > :20:53.secondary effects on us. Where our interests lie, and the Economist
:20:53. > :20:59.Magazine is careful to point it out. We have to make sure we still have
:20:59. > :21:02.a power of veto on things like tax yaix, things that fect affect us on
:21:02. > :21:06.the in- taxation, and things that affect us on the European market.
:21:06. > :21:10.We have to make sure the eurozone doesn't become protectionist on
:21:10. > :21:14.that part of the European Union. Are we marginalised? I fear we are,
:21:14. > :21:17.and some of the people in the House of Commons who know less than
:21:17. > :21:21.Gisela Stuart here. They hear the argument and say it is done let's
:21:22. > :21:26.not put money into saving it. were in favour of the euro, weren't
:21:26. > :21:29.you? Not for Britain, we were not in favour of Britain joining the
:21:29. > :21:35.euro. It doesn't matter who you are in favour of, it is in crisis
:21:35. > :21:40.without it? If you want a sensible debate, you have to concede that
:21:40. > :21:44.people like Lord Laming who were sceptical about the way the euro
:21:44. > :21:47.was constructed look far more correct than the boosters for the
:21:47. > :21:52.euros, you can concede that debate and move on. When Lord Laming says
:21:52. > :21:58.we are neither in or out, we are not just next to Europe, we do 50%
:21:58. > :22:01.of our trade with them, and 40% with the eurozone. And negotiations
:22:01. > :22:05.that could come out of the hardline France and Germany, grabbing bits
:22:06. > :22:09.of business out of the City of London, saying if you want to do
:22:09. > :22:13.euro-dominated business, it has to be done in Frankfurt and Paris.
:22:13. > :22:17.This affects us an enormous amount. It is too easy to say we will do
:22:17. > :22:21.what we need to do, it does matter. You think there is a real limit to
:22:21. > :22:26.how semi-detatched you can become? If you are interested in keeping
:22:26. > :22:32.jobs here. I wasn't contradicting that, I was saying we have to be
:22:32. > :22:36.careful by protecting our position in the single market and vis a vis
:22:36. > :22:40.taxation. When I said we were in or out, I was talking about the euro,
:22:40. > :22:45.we can't complain if they make some decisions that affect them on their
:22:45. > :22:48.own. I think, quite honestly, the reaction of Sarkozy to David
:22:48. > :22:52.Cameron, I'm amazed it hasn't happened before. We can't go around
:22:52. > :22:58.telling people what to do when we are not part of it. He's right,
:22:58. > :23:00.isn't he? Of course he's right. can't be more and more
:23:00. > :23:05.protectionism. We talk about all that matters is trade with Europe,
:23:05. > :23:09.it is the trade with the rest of the world. The single market is too
:23:09. > :23:13.protectionist. We have a currency that won't make it competitive.
:23:13. > :23:18.Even if every member-state in the eurozon was like the Germans, it
:23:18. > :23:23.would be disastrous, because it is built on export, somebody has to
:23:23. > :23:27.import. The marginalisation is a red herring, if you are a UK, you
:23:27. > :23:29.are only central in the European argument if you are economically
:23:29. > :23:35.successful, geographically you are not. You go back to the his treesm
:23:35. > :23:40.this is a construct fine in the 1970s - history, this is construct
:23:40. > :23:45.is fine in the 1970s, it would have been a functioning, proper currency.
:23:45. > :23:49.It isn't. What is dangerous about what happened in the Commons today,
:23:49. > :23:53.voters are watching and being offered a full spill. They are told
:23:53. > :23:58.there is this magical option of this loose free trade option. That
:23:58. > :24:01.is what the British are always wanted. Can't we have a
:24:01. > :24:06.relationship like Norway and Switzerland? We are more important
:24:06. > :24:10.than they are. They don't have a fantastic relationship when getting
:24:10. > :24:14.what they wanton banking? Switzerland has had a wretched few
:24:14. > :24:18.years on things like banking secrecy because they are not at the
:24:18. > :24:22.able. We are bigger than that. We have to be there making sure the
:24:22. > :24:27.single market works for us. reality is we are a larger
:24:27. > :24:31.proportion of its GDP is trade with Europe. They, actually, have had a
:24:31. > :24:36.very successful economy in recent years. Look at the growth statistic,
:24:36. > :24:43.and the strength of the Swiss franc. Switzerland is a country to be
:24:43. > :24:48.envied rather than to be pittied and criticised. You just think of
:24:48. > :24:53.cuckoo clocks and look in amazement, but Switzerland has high-tech and
:24:53. > :24:59.good growth records. Switzerland is a economy and also Norway to be
:24:59. > :25:03.envied, but Norway has natural resources. North Sea oil.
:25:03. > :25:09.change that is important, as a result of this crisis you will see
:25:09. > :25:14.a degree of fiscal integration in Europe. That changes our
:25:14. > :25:22.relationship. It also gives us an teent, as the Prime Minister said,
:25:22. > :25:25.when - an opportunity, as the Prime Minister said, to get some powers
:25:25. > :25:31.repatriated. What troubles me is the minute David Cameron and George
:25:31. > :25:36.Osborne started talking about a deeper political integration
:25:36. > :25:40.between Britain and France for Britain's interest. We accepted a
:25:41. > :25:45.Europe which had never been the UK's idea of Europe, a Europe
:25:45. > :25:50.dominated by a few countries. I would say is that how we think the
:25:50. > :25:54.future looks like. You have the French and Germany block dictating
:25:54. > :26:02.for everybody. It will happen, not because we suggest it should happen,
:26:02. > :26:09.but because France and Germany will in the end want it to happen. There
:26:09. > :26:13.will be more surveillance of other country's budgets. It won't be a
:26:13. > :26:17.full fiscal union but it will work in that direction. It is what the
:26:17. > :26:21.Germans are moving towards. don't have a luxury of saying it
:26:21. > :26:25.doesn't matter if the euro survives or not. If this is what saves it
:26:25. > :26:29.this will happen. We have to try to make it work some what in its
:26:29. > :26:36.interests. We can't be Switzerland, the difference is Switzerland is
:26:36. > :26:40.small and get to be a parasite on the single market. Its absence
:26:40. > :26:48.makes no difference to free market versus protectionist. Britain's
:26:48. > :26:52.absence would swing the action towards a French state vision.
:26:52. > :26:57.David Cameron's trying to take part in this has been weakened by the
:26:57. > :27:02.result? You have to assume he's going into the room with one hand
:27:02. > :27:05.tied behind his back. He can't pay- to-play, and advance in the next
:27:05. > :27:09.stages of saving the euro. You are completely for getting the
:27:09. > :27:12.electorate of Europe. In Spain you have elections, in Greece you have
:27:12. > :27:17.elections, Portugal, Ireland, they kick out their Government, they see
:27:17. > :27:20.no change in policy, they see austerity and no improvement. These
:27:20. > :27:24.economic models also have a political Israelty. We are storing
:27:24. > :27:27.up enormous trouble in some - reality, we are storing up enormous
:27:27. > :27:34.trouble when they see their politicians are being unaccountable.
:27:34. > :27:40.It will come and bite us. I agree. Don't just listen, tell them the
:27:40. > :27:44.truth. As was pointed out to the fans of a
:27:44. > :27:47.referendum. The British debate is like arguing over the winning
:27:47. > :27:52.diagram for your house, while the roof is on hire. The Financial
:27:52. > :27:55.Times is reporting tomorrow, that Germany, France, the IMF and the
:27:55. > :28:00.European Central Bank are asking institutions holding Greek debt to
:28:00. > :28:03.be prepared to lose nearly two- thirds of their money. In Italy,
:28:03. > :28:05.meanwhile, Prime Minister Berlusconi even had to skip a court
:28:05. > :28:09.appearance to hold a cabinet meeting to try to agree measure
:28:09. > :28:14.that is might satisfy the French and Germans. Mistakes are higher
:28:14. > :28:18.than - the stakes are higher than they have ever been and rising.
:28:18. > :28:22.There are three things they need to do on Wednesday at the second
:28:22. > :28:25.summit, they need to decide how much Greek debt gets written off,
:28:25. > :28:31.how much money do you throw at Europe's banks to stop them falling
:28:31. > :28:34.off as the debt write-off hits them. How do you provide a fire blanket
:28:34. > :28:39.to throw over the European cry staiction Italy out of the crisis
:28:39. > :28:44.zone. The details in the last 24 hours have become clearer. In the
:28:44. > :28:48.first case on Greek debt it is 60% of a write-off, a haircut they are
:28:48. > :28:51.asked for. We reported this on Friday night. Now we have learned
:28:51. > :28:56.over the weekend officials have begun these discussions with
:28:56. > :29:01.European banks. On the bank bailout, you have got a recapitalisation
:29:01. > :29:08.fund for the European banks of 108 billion, that was agreed yesterday
:29:08. > :29:14.afternoon at the summit. That will be used to prop up banks, from
:29:14. > :29:19.national treasures and international funds. We are being
:29:19. > :29:22.to pay 1.4 trillion. They have only got half a trillion, so they have
:29:22. > :29:29.so make a clever and opaque financial vehicle. We don't know
:29:29. > :29:34.how they are going to do it. We know the acronym, which is SPIV.
:29:34. > :29:39.How close are they to sort iting out? I should ask you what -
:29:39. > :29:42.Sorting it out. I should ask you what it means to. I'm not sure it
:29:42. > :29:46.translates into another European language. They are close, to do it
:29:46. > :29:49.they will have to make a bonfire of a lot of the rules, a lot of the
:29:49. > :29:54.denial they were going through three weeks ago. A lot of the
:29:54. > :29:59.vanties. In fact, there might even be bonfires. First of all, Athens,
:29:59. > :30:03.the Greek banks, most have lost 20% of their value today. This is a
:30:03. > :30:08.signal the Greek banks are more or less finished. They have to be
:30:08. > :30:14.nationalised rae tappalised quickly. They are the ones in line -
:30:14. > :30:17.recapitalised quickly, they are the ones that loaned the money to
:30:17. > :30:21.grease. Then there is the taking of Italy
:30:21. > :30:24.out of the market so they don't have to keep borough. There was an
:30:24. > :30:28.emergency meeting in Italy tonight, Berlusconi was there. One of the
:30:29. > :30:33.great parties in the coalition is the northern league, and has
:30:33. > :30:37.proposed in the past banning kebab shops on the grounds of cultural
:30:37. > :30:41.purity. How do you think it went down with them to be told that the
:30:41. > :30:45.Germans and French had told Italy to impose a retirement at 67, it
:30:45. > :30:50.didn't go down well. Despite the emergency nature of the Italian
:30:50. > :30:54.cabinet there were no decisions announced at the end of it.
:30:54. > :30:59.To try to help shed some light on how much trouble European banks
:30:59. > :31:03.might be in is Thomas Huertas, who until last month was head of the
:31:03. > :31:08.European banking authority. How much money do you think the
:31:08. > :31:13.European banks need? They estimate, as your colleague has indicated,
:31:13. > :31:19.108 billion euros. That comes about from marking the Government bond
:31:19. > :31:24.positions of the European banks to market. And taking into account the
:31:24. > :31:30.money they may need if the economy deteriorates. Where do you go about
:31:30. > :31:34.finding 108 billion? As your colleague indicated the European
:31:34. > :31:38.Financial Stability Fund is there as a last resort. The idea is the
:31:38. > :31:42.banks to access private markets first. If private markets are not
:31:42. > :31:46.ready to provide the funds, that they could go to their own member-
:31:46. > :31:49.state and only come to the European Financial Stability Fund as a last
:31:49. > :31:54.resort. Is there any indication they can get it from private
:31:54. > :31:58.sources at present? They may be able to. There is also a discussion
:31:58. > :32:02.that they would potentially shrink some of their asset. There is
:32:02. > :32:06.discussion as to if they are to shrink assets and therefore reduce
:32:06. > :32:09.their capital requirements, what type of assets do they shrink. A
:32:09. > :32:12.very strong indication by the Governments that they should not be
:32:12. > :32:15.shrinking lending to the real economy. When so many of these
:32:15. > :32:21.countries are already in debt, where are they going to find the
:32:21. > :32:26.money to finance their banking systems? The really critical areas
:32:26. > :32:33.are, again as your colleague has vindicated, Greece and Cyprus,
:32:33. > :32:39.where they - the write-off of 60% of the Greek sovereign exposure
:32:39. > :32:44.will reduce the capital of those banks quite severely, and pose an
:32:44. > :32:49.immediate recapitalisation need. For other banks, French banks,
:32:49. > :32:54.German banks, UK banks, they have a much smaller exposure to Greece in
:32:54. > :32:58.relation to their own capital, and even at a 60% write-off of those
:32:58. > :33:03.exposures they would still be able to maintain their overall capital.
:33:03. > :33:08.So they can take a 60% so-called haircut, can they? It will depend,
:33:08. > :33:13.and vary from bank-to-bank. It is certainly not the case that aside
:33:13. > :33:17.from the Greek banks, and certain Cypriot banks, that a 60% haircut
:33:17. > :33:21.would needly put banks into a position where they have to be
:33:21. > :33:27.recapitalised. From what you know right now, are banks prepared to
:33:27. > :33:32.lend to one another? Banks are carefully looking at the exposures
:33:32. > :33:35.that they take on. They are differentiating among banks, and
:33:35. > :33:40.some banks are putting money with the European Central Bank or with
:33:40. > :33:49.other central banks rather than lending to other banks. Now, why
:33:49. > :33:54.were these banking crises so unforeseen? To some extent the
:33:54. > :33:59.first crisis was, that came about from sub-prime was unforeseen.
:33:59. > :34:04.Let's not go right back to Lehman Brothers and that. Let's talk about
:34:04. > :34:08.the euro. This banking crisis within the euro, why was it not
:34:08. > :34:16.foreseen? I think the danger that it could develop into a banking
:34:16. > :34:21.crisis was certainly foreseen. The spelling it out, and in terms of
:34:21. > :34:27.will it actually he result in problems, depended on the political
:34:27. > :34:31.decisions that were being taken at the time. But it was very clear.
:34:31. > :34:37.You ran stress tests on these banks and you failed to spot this snts
:34:37. > :34:41.were very much aware that the - Spot this? We were very much aware
:34:41. > :34:45.that the sovereign debt issue was an area of concern. When we ran the
:34:45. > :34:49.stress test earlier this year, there was a political decision not
:34:49. > :34:54.to say certain countries would default and the loss that would
:34:54. > :34:59.occur would be a certain percentage of the amount of the debt. Who made
:34:59. > :35:03.that judgment? The judgment was the national supervisors of the euro.
:35:03. > :35:05.Essentially politicians were deciding that there were certain
:35:05. > :35:13.things that wouldn't be investigated, which in the end,
:35:13. > :35:16.would be their own decision? There was a decision not to say certain
:35:16. > :35:22.countries would default and the lost would be such and such per
:35:22. > :35:27.cent. There was a decision by the superviser to say we needed a
:35:27. > :35:29.disclosure that to what the exposures are. There was
:35:29. > :35:36.unprecedented level of disclosure of the sovereign detects in the
:35:36. > :35:39.test. It enabled the market to run its own calculation as to what the
:35:40. > :35:45.possible...It Was very small wasn't it? One can debate it, it was the
:35:45. > :35:50.best that could be done in the circumstances. It was a very full
:35:50. > :35:54.disclosure of the extent of sovereign exposures. It came out
:35:54. > :35:58.very clearly that banks, not surprisingly, had taken on the
:35:58. > :36:01.sovereign debt of their own countries.
:36:01. > :36:05.Thank you. Some time in the next few days,
:36:05. > :36:10.according to the United Nations, the seven billionth person will be
:36:10. > :36:16.born. It is just a number, but it is unarguable that the population
:36:16. > :36:20.is growing, and the earth has never supported as many people as it has
:36:20. > :36:26.now. We will look at the questions raised, starting with Zambia. Dave
:36:26. > :36:32.McKean has been there to investigate the phenomenon of
:36:32. > :36:39.private equity firms buying up swathes of farmland. At what price
:36:39. > :36:43.can it be made profitable. It is not what we have come to
:36:43. > :36:53.expect of Africa. The imagery of plenty, offering a tantalising
:36:53. > :37:00.vision. The idea that Africa might not only
:37:00. > :37:06.solve its own food problems, but help the world as well. Here in
:37:06. > :37:10.Zambia, foreign investors are bidding to buy vast tracks of
:37:10. > :37:14.arable land. What was once a basket case, now presented as a golden
:37:14. > :37:20.opportunity. If you just increase the yields in Africa to 80% of what
:37:20. > :37:26.the world averages are, Africa would become a net exporter of food.
:37:26. > :37:32.Across Africa, land offers both a unifying symbol and the impetus for
:37:32. > :37:37.conflict. Africa, for the Africans, was the rallying cry of liberation.
:37:37. > :37:42.But across much of the continent, the conflict and drift of the post-
:37:42. > :37:46.colonial age saw many condemned to poverty.
:37:46. > :37:51.The agriculture of slash and burn still dominates. Once the burning
:37:51. > :37:56.is over the farmer will borrow some oxen from a friend, they will
:37:56. > :37:59.plough up the land, and with any look tell have enough maize to feed
:37:59. > :38:03.himself and his family and some to sell to the market. What happens in
:38:03. > :38:06.these fields isn't just about yield and about cultivation. For
:38:06. > :38:11.centuries people in Africa have built their villages, their
:38:11. > :38:15.community, their sense of identity around the land.
:38:15. > :38:25.For the subsist tense farmer, this is an age of pressing questions
:38:25. > :38:26.
:38:26. > :38:30.about the invests scrambling for Africa. There is a lot of talk
:38:30. > :38:34.about foreigners coming, Chinese, and Britain, coming to take the
:38:34. > :38:37.land, what do you feel about it? the Government can give the land OK.
:38:37. > :38:40.If they feel those people, they are going to give, they are going to
:38:40. > :38:44.develop and they are not going to disturb those people staying there.
:38:44. > :38:50.Otherwise we are worried, because they are going to grab the whole of
:38:50. > :38:56.the land, and even those people who are staying here with nothing.
:38:56. > :39:00.In an age of food insecurity, as prices rise across the globe, there
:39:00. > :39:04.is growing pressure to dramatically change the way the land of Africa
:39:04. > :39:08.is cultivated. 50 years after the end of the colonial order, Zambia
:39:08. > :39:13.is opening its doors to foreigners once more. A political environment
:39:13. > :39:18.that is stable, there are excellent conditions for agriculture, so the
:39:18. > :39:23.climate, the amount of water, the quality of the soil. If you are an
:39:23. > :39:31.agriculture investor, Zambia is where you want to be. This is the
:39:31. > :39:37.zambeeian bush. Here the British Private Equity
:39:37. > :39:45.firm Chayton Capital, has leased an existing farm of 25,000 acres.
:39:45. > :39:55.Their aim is to maximise profit, by maximising yields. We have achieved
:39:55. > :39:57.in maize 14.2 tonnes. Stuart runs the operation in Zambia, he used to
:39:57. > :40:02.farm in Zimbabwe before being driven off the land. He thinks it
:40:02. > :40:05.is possible to get 30-times the yield obtained by traditional
:40:05. > :40:10.farming. They achieved this through economies of scale, better
:40:11. > :40:19.irrigation and a new approach to soil. It is the moisture and the
:40:19. > :40:24.organic carbon that increases the yield potential of the crop. So the
:40:24. > :40:28.plant can extract the nutrients. Unskilled labour is acutely
:40:28. > :40:33.vulnerable to more efficient farming. In Africa the farm
:40:33. > :40:37.labourer depends on his employer for accommodation, med ka care,
:40:37. > :40:42.education for his children. This project, backed by the Government
:40:43. > :40:46.and tax breaks promises to create jobs. In a country where 60% live
:40:46. > :40:52.below the poverty line, it is a seductive argument. At this dam on
:40:52. > :40:58.the farm, we met part-time workers. We have families, but if we are not
:40:58. > :41:02.working anywhere we are suffering. You want long-term employment?
:41:02. > :41:06.But since they have taken over the farm, there have been significant
:41:06. > :41:09.job losses. Wherever in the world you have had farming being
:41:09. > :41:17.industrialised, people have lost their jobs, already here you have
:41:17. > :41:22.people losing their jobs on this farm? The last skilled jobs, yes -
:41:22. > :41:26.the less skilled jobs, yes, as a result of mechanisation, some of
:41:27. > :41:33.that work goes away. Through time, over building a large scale
:41:33. > :41:36.business, is to train people up, to do highly value-added jobs, so they
:41:36. > :41:40.can continue to build a career in agriculture or transport the skills
:41:40. > :41:44.into other sectors as well. It is a fact that the majority of your
:41:44. > :41:47.profit will go abroad, it won't benefit people here? Profit is the
:41:48. > :41:52.way in which investors are compensated for putting their
:41:52. > :42:00.capital at risk. But the value that's created by that capital
:42:00. > :42:03.investment stays right here. When Zambia began to welcome big
:42:03. > :42:09.commercial operators, a compelling argument would be they pass on
:42:09. > :42:13.skills to neighbouring subsist tense farmers, everybody would be a
:42:13. > :42:17.winner. But these small holders told us they had no help from the
:42:17. > :42:23.big farms. And with no access to capital, these men and women
:42:23. > :42:29.struggle to increase their yields. I'm a small farmer, I have to
:42:29. > :42:33.source my own capital, but how to source it. You can't get a loan?
:42:33. > :42:37.What about being able to farm in a more efficient way, do you get any
:42:37. > :42:42.help from the commercial farmsers here, do they teach you? No, there
:42:42. > :42:46.is nothing of that nature. In fact, there is no interaction between the
:42:47. > :42:51.small skilled farmer and a big commercial farmer. I get the sense,
:42:51. > :42:55.listening to your complaints, that you feel the Government is kinder
:42:55. > :43:01.to the big farmer than they are to you? That they look after them
:43:01. > :43:05.more? Yes. There really isn't any of the
:43:05. > :43:09.racial edgyness, the antagonism towards whites that I found in
:43:09. > :43:14.places like South Africa and Zimbabwe. Broadly speaking, most
:43:14. > :43:18.people seem to welcome the idea of big commercial farming. But the
:43:18. > :43:26.resentment at what is perceived as favouritism towards big farmers,
:43:26. > :43:30.that is something that could prove very troubling in the long-term.
:43:30. > :43:35.Chayton Capital leased an existing commercial farm, they displaced no-
:43:35. > :43:38.one. But elsewhere, vast tracks of land, occupied by peasant farmers,
:43:38. > :43:42.are being offered to bigger scale investors.
:43:42. > :43:46.This is one of nine proposed developments, where several
:43:46. > :43:51.thousand people live. Locals are being told the forest
:43:51. > :43:58.must be cleared, and families are already being moved off their
:43:58. > :44:02.farmland. TRANSLATION: Our house was on a demarcation line, a road
:44:02. > :44:06.is supposed to pass through the area, we were forced to move.
:44:06. > :44:12.Our house has been demolished, they didn't offer us any alternative
:44:12. > :44:15.land, and we haven't had any compensation.
:44:15. > :44:21.Here they already produce enough grain to feed themselves and sell a
:44:21. > :44:25.healthy surplus. Seven years ago these people were
:44:25. > :44:29.given a written promise by the Government that they wouldn't be
:44:29. > :44:32.moved from the land where their ancestors are buried.
:44:32. > :44:37.TRANSLATION: We saw people coming with machinery, they started
:44:37. > :44:44.marking out the roads. They told us we would be moved off the land, and
:44:44. > :44:47.that the land would be used for development.
:44:47. > :44:52.The problem is most Zambians have no legal title. Nearly all land is
:44:52. > :44:57.owned by the state, which can lease to whoever it wants. At the moment,
:44:57. > :45:02.a lot of people do not know their rights on their own land, all they
:45:02. > :45:08.know is we are the owners of this land, they do not have pieces of
:45:08. > :45:13.paper or titles to land, therefore, they are not adequately protected.
:45:13. > :45:17.Across Africa, Chinese, Indian, middle eastern, American, European
:45:17. > :45:23.companies are investing in huge tracts of farmland. But we found
:45:23. > :45:28.signs of a change in the official mood in Zambia. You can't be purr
:45:28. > :45:32.people out and lofg them to their own - push people out and leaving
:45:32. > :45:38.them to their own devices, that is inhuman, even if the world's hunger
:45:38. > :45:43.were to hinge on it. In the capital there is a new Government.
:45:43. > :45:47.Championing the poor is the vice- president. A white farmer, who
:45:47. > :45:52.scrutinises land deals and the claim made by investors that they
:45:52. > :45:58.will bring jobs. I would like that evaluated by more than a roaming
:45:58. > :46:01.television crew. I would like it evaluated properly. The truth of
:46:01. > :46:09.that claim. You sound very sceptical? I am, I have been around
:46:10. > :46:17.a lot. I know what proposals look like, and justifications look like.
:46:17. > :46:20.I would say 90% of what's promised 0 projected turns out not to be
:46:20. > :46:26.true. Will you be much tougher about the way land is parceled out
:46:26. > :46:33.in this country b the kind of deals done? Absolutely. I can answer as
:46:33. > :46:40.an individual, yes, we're going to change the way, we will be far more
:46:40. > :46:45.circumspect about the land issues. About land use issues.
:46:45. > :46:50.And a lot more circumspect about what happens to the dispossessed
:46:50. > :46:54.prop laigs. There is a genuine dilemma here, as the demand for
:46:54. > :46:59.food grows, there is mounting pressure to make African land more
:46:59. > :47:04.productive. But the danger is that a volatile new dynamic is created.
:47:04. > :47:09.Of landless mass, driven by resentment of those who wish to
:47:09. > :47:16.make a property from feeding the world. Tomorrow night in his second
:47:16. > :47:24.report on food security, Dave McKean will be reporting from
:47:24. > :47:32.northern - Fergal Keanewill be reporting again.
:47:32. > :47:37.It is the coldest most merciless kind of corruption. Because, like
:47:37. > :47:44.this time, people are dying now. That's, sadly, all we have time for
:47:44. > :47:54.topt. It seems there were about 8 - tonight, it seems there were 82
:47:54. > :48:19.
:48:19. > :48:23.Tory rebels, including two tellers. Hello, after today's deluge across
:48:23. > :48:28.western areas, a quieter day thankfully on Tuesday. The
:48:28. > :48:32.attention tourns the north-east, where further heavy and persistent
:48:32. > :48:35.rain for eastern parts of Scotland. For the rest of us nothing too
:48:35. > :48:41.serious. Showers around, but plenty of dry and bright weather, through
:48:41. > :48:45.the heart of England. One or two sharpish showers will develop from
:48:45. > :48:48.the English Channel into the some southern counties. For South-West
:48:48. > :48:53.England, thankfully mopping-up process, apart from the odd shower
:48:53. > :49:01.and a dry day. The winds won't be as strong either. A good thing. For
:49:01. > :49:04.Wales as well, largely dry and bright afternoon in prospect. For
:49:04. > :49:08.some showers but nothing of the scale we have seen over the last
:49:08. > :49:13.few days. Things getting a chance to dry out. For eastern parts of
:49:13. > :49:18.Scotland, in particular, it doesn't look good. Heavy and persistent
:49:18. > :49:23.rain, warnings have been issued, go on-line for detals. Dry weather for
:49:23. > :49:28.most of the UK, in the middle of the week, a bit of patchy fog
:49:28. > :49:32.lingering into the afternoon. Sunshine inbetween, nothing too he
:49:32. > :49:38.canstsive in erms it of rainfall.S this the picture on Wednesday, the