24/10/2011 Newsnight


24/10/2011

What will be the scale and impact of the Tory backbench rebellion over EU membership referendum? With Jeremy Paxman.


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It's just like old times, a Tory It's just like old times, a Tory

:00:09.:00:11.

rebellion on Europe. How damaged is the Prime Minister's authority, and

:00:11.:00:15.

why shouldn't the British people have a vote on whether they want to

:00:15.:00:23.

be part of the EU? The ayes to the right, 111, the no

:00:23.:00:33.
:00:33.:00:36.

s to the left, 483, the no nos have it. It looks as if there were about

:00:36.:00:42.

180 Conservative rebels. This is what you get when you mention Senor

:00:42.:00:47.

Berlusconi around Brussels. Is the single currency in the hands of a

:00:47.:00:51.

leader seen as a clown by many of his peers.

:00:51.:00:54.

Europe's banks aren't laughing tonight. They have been asked to

:00:55.:00:58.

lose two-thirds of the money they lent to Greece. Can that be done

:00:58.:01:06.

without crashing the markets. Also tonight: If you increase the

:01:06.:01:09.

yields in Africa to what the world needs, Africa would become a net

:01:09.:01:15.

exporter of food. As the world population tops seven billion, can

:01:15.:01:25.
:01:25.:01:26.

Africa really Feed The World. The Prime Minister got his way in

:01:26.:01:29.

Parliament tonight. A few minutes ago, the attempt to get a

:01:29.:01:31.

referendum on membership of the European Union was defeated, only

:01:31.:01:35.

with the votes of Labour and Liberal Democrat MPs, and with

:01:35.:01:38.

dozens of Conservatives rejecting the authority of David Cameron,

:01:38.:01:42.

saying their primary duty was to constituents. The debate was

:01:42.:01:47.

passionate, but most passionate as Conservative MPs argued among

:01:47.:01:53.

themselves. I'm not entirely sure what is the most significant

:01:53.:01:56.

feature of what went on behind me in the House of Commons today. Was

:01:56.:02:00.

it the fact that there was no significant Government business at

:02:00.:02:04.

stake? Indeed, no Government business or any business of any

:02:04.:02:08.

description, no vote tonight was going to compel anyone to do

:02:08.:02:12.

anything. Or was it the fact that there was never any danger of David

:02:12.:02:16.

Cameron losing the vote. As we have seen, he won it by 4-1. He knew

:02:16.:02:21.

that Labour and the Liberal Democrats were going to offset any

:02:21.:02:25.

rebellion from his party. And yet, still, he forced a three-line whip

:02:25.:02:29.

on the issue. There is considerable anger among MPs on that tonight.

:02:29.:02:34.

But I was speaking to one person, who is particularly close to David

:02:34.:02:38.

Cameron, a little earlier, who said they had absolutely no choice but

:02:38.:02:42.

to have the three-line whip, anything less would show you were

:02:42.:02:46.

not serious. You can't have the House of Commons saying stuff and

:02:46.:02:49.

pretend it doesn't mean anything. But out of all the nothingness

:02:49.:02:53.

today, seemingly unpromising material, we have a rebellion.

:02:53.:02:57.

Something like 80 Conservative MPs defying a three-line whip.

:02:57.:03:01.

Something like another 15 abstaining, still in defiance of

:03:01.:03:05.

what the leadership wanted. Out of this today we have people talking

:03:05.:03:08.

about this being a profoundly important day in the history of

:03:08.:03:15.

David Cameron's leadership. The hoaxy cokey referendum. Three

:03:15.:03:23.

options, in, out, or shake it all about. Or as Parliament had it,

:03:23.:03:26.

renegotiate the terms in order to create a new relationship, based on

:03:26.:03:29.

trade and co-operation. All day Conservative whips have been trying

:03:29.:03:33.

to persuade MPs not to shake anything all about, least of all-

:03:33.:03:39.

party unity. Aiden Burly is one of the ministerial aides or

:03:39.:03:41.

parliamentary private secretaries, called in for a meeting with the

:03:41.:03:44.

Prime Minister. I have had a very difficult weekend, I will support

:03:45.:03:48.

the Government, but as a 32-year- old new MP, I find it strange that

:03:48.:03:51.

we haven't had a say on this issue since four years before I was born.

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I think there is a bit of frustration from my generation of

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politicians that the British people haven't had their say on this issue.

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It is an issue the people will have to have a referendum on at some

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point in the future. Not all were convinced, Adam Holloway was

:04:08.:04:13.

private secretary to the Europe Minister, not any more he isn't?

:04:13.:04:19.

I'm not prepared to go back on my word to my constituents. I'm really

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staggered that loyal people like me have actually been put in this

:04:23.:04:30.

position. If Britain's future as an independent country is not a proper

:04:30.:04:34.

matter for a referendum, then I have absolutely no idea what is.

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This aim after a rather conciliatory speech by the Prime

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Minister. Mr Cameron was fresh from a row with Nicolas Sarkozy, that

:04:41.:04:45.

would have no doubt cheered his party no end. In the chamber he

:04:45.:04:51.

told his MPs, look, we disagree with timing, not objectives.

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share the yearning for fundamental reform, and I am determined to

:04:54.:04:58.

deliver it. Those who are supporting today's motion, but

:04:58.:05:02.

don't actually want to leave the EU, I say to you this, I respect your

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views, we disagree with ends, not about means. I support your aims.

:05:09.:05:14.

Like you, I want to see fundamental reform, like you, I want to

:05:14.:05:18.

refashion our membership of the EU, so it better service our nation's

:05:18.:05:23.

interests. The time for reform is coming, that is the prize. Let us

:05:23.:05:27.

not be distracted from seizing it. It is tempting to see this

:05:27.:05:32.

referendum debate as a rekindling of the old Conservative Euro-

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sceptic fire that engulfed the party in the 90s. It is not that.

:05:36.:05:40.

For a start, the Conservative Party today is more united than it has

:05:40.:05:43.

ever been on Europe. What they are divided on is David Cameron, and

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specifically whether he can be trusted to deliver what they want

:05:47.:05:52.

on Europe. The public debate, and private conversations today, have

:05:52.:05:58.

been punctuated by this Cameron scepticism. Is it any wonder that

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on Conservative home website today, a poll of Conservative Party

:06:01.:06:05.

members now suggests that two third of Conservative Party members do

:06:05.:06:09.

not believe that the present Government has any intention of

:06:09.:06:12.

repatriating powers from Europe. I have to say to Her Majesty's front

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bench tonight, shame on you. So it is for us backbenchers, to

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say to Her Majesty's Government, stiffen your sinews, summon up the

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blood, and imitate the action of a tiger, that is how you should

:06:27.:06:34.

behave towards our European partners, not like bagpuss. I now

:06:34.:06:42.

invite David Cameron to the rost trum. Why the mistrust? David

:06:42.:06:46.

Cameron started off sounding as Euro-sceptic as any of these MPs,

:06:46.:06:50.

complete with big cat references. They want a federalist pussy cat,

:06:50.:06:54.

not a British Lion. Once leader of the opposition, remember, he

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promised a referendum on the Lisbon Treaty. I'm pushing for that

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referendum, that is the case this week, next week, that won't change.

:07:02.:07:06.

That commitment was dropped once the Lisbon Treaty was ratified. But,

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that simply is not good enough, according to some Conservatives.

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MPs don't keep their promise, say the cynics, you say whatever you

:07:15.:07:20.

say to get elected, they cry. Today is our chance to show the cynics

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that they are wrong. All three parties until recently promised the

:07:25.:07:28.

people a referendum on the EU. There is no point in clever word

:07:28.:07:33.

play, there is no point in reading the clever brief from the Foreign

:07:33.:07:36.

Office officials. It was what most people understood that we were

:07:36.:07:40.

going to give them a referendum. That's what MPs in all parties

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wanted the people to believe. It is the impression we deliberately

:07:44.:07:49.

conveyed. This evening we have a chance to keep our promises. There

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we have the result, we know the Government has won this very

:07:54.:07:57.

comfortably, Downing Street is suggesting that something like 81

:07:57.:08:00.

Conservatives defied their whip. What does it all mean? I was chat

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to go one cabinet minister on their way in to vote who seemed to

:08:04.:08:07.

suggest this would have a very limited shelf life, people would

:08:07.:08:12.

have forgotten about it in a few weeks. I'm not so sure. The anger

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that came out in the dewait today, I think will - debate today, I

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think, will take a long time to go away. Rebellion is addictive, we

:08:22.:08:24.

have seen it in previous administrations. Under Tony Blair,

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one of the experts who looked at the rebellions has pointed out it

:08:28.:08:31.

took him six years where he got to the point of a rebellion of 80

:08:31.:08:35.

people. His majority was a lot bigger. It will take a lot of time,

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from the anger I have heard, from people in private, on the

:08:39.:08:43.

Conservative backbenches, for that anger to go away.

:08:43.:08:46.

Standing in a corridor in Westminster, to try to explain

:08:46.:08:52.

what's going on, Adam Holloway, who resigned today as a parliamentary

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private secretary, and the Deputy Chairman of the Conservative Party.

:08:57.:09:02.

Adam Holloway you have effectively chucked away any ministerial career,

:09:02.:09:06.

why? I don't think I was being earmarked for secretary of defence.

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It is straight forward, since I went to my constituency, seven

:09:09.:09:12.

years ago, I have been banging on to people when they have asked, and

:09:12.:09:16.

when they haven't, saying of course we should have a referendum on the

:09:16.:09:21.

membership of the E. I would personally like to renegotiate. And

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frankly, when the opportunity to vote on something, even a non-

:09:26.:09:30.

binding backbench motion came up, I would have felt pretty ridiculous

:09:30.:09:35.

with my friends in Gravesend, North Fleet and the villages, for not

:09:35.:09:41.

supporting it. Do you believe some of your colleagues have not carried

:09:41.:09:43.

out their constituents' wishes if they have voted with the

:09:43.:09:47.

Government? I can only talk about my own circumstances and how I feel

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about it, having been on their shoulders for the last 17 years.

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From my perspective, with the position I have, and the

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relationship I have with people in my area, it would be very difficult

:09:57.:10:02.

for me not to have done what I did today. Is there any resentment on

:10:02.:10:05.

your part that the way the leadership has behaved has made it

:10:05.:10:10.

necessary for you to behave like this? They are a lot cleverer than

:10:10.:10:13.

I am, perhaps they could have found a way out for people like me, who

:10:13.:10:17.

have actually been extremely loyal to Cameron. I want him and the

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country to do well. I'm not being a fish co-fant because I'm Newsnight

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and he - and he might be watching. I think he's doing a brilliant job

:10:30.:10:34.

in difficult circumstances. It is a matter of conscience for you?

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a bit grand, but it is about my relationship with my constituents.

:10:39.:10:43.

Michael Fallon, you voted, loyally, with the Government, what do you

:10:43.:10:47.

think your constituents wanted you to vote? Our constituents were not

:10:47.:10:50.

promised a referendum on whether we should leave the European Union,

:10:50.:10:54.

that was not in our manifesto. On the contrary, they were told we

:10:54.:10:59.

would do everything we could to repatriate powers, and to make sure

:10:59.:11:02.

there would be a referendum lock if any further powers were transferred.

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That referendum lock is already in place. We passed an act of

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Parliament now, stopping any future powers being transferred. So we

:11:13.:11:16.

fulfilled to our constituents that part of the bargain. There are a

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lot of colleagues, Adam, a lot of Conservative and Labour colleagues,

:11:20.:11:25.

who feel extremely passionately about this, but in the end, that

:11:25.:11:31.

motion tonight was very strongly defeated. And just remind us, how

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far is your constituency from Adam Holloway's constituency? I think

:11:35.:11:42.

there are a few. We touch. They are a few miles inbetween. How can you

:11:42.:11:48.

have come to such completely contradictory conclusions then?

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Conservative manifesto was clear, we never promised a referendum,

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that has never been Conservative policy. Conservatives have never

:11:56.:11:58.

advocated leaving the European Union, there is too much trade at

:11:58.:12:01.

stake, there are millions of jobs at stake there. There is an awful

:12:02.:12:05.

lot of investment in our country at stake, because we are part of this

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huge single market. What we have always said and was in the

:12:08.:12:12.

manifesto is we want a much better deal for Britain from our

:12:12.:12:15.

membership of the European Union. That is what David Cameron spelt

:12:15.:12:18.

out tonight. There is a huge prize at stake here, the treaty is now

:12:19.:12:22.

going to have to be revised, because the eurozone is under

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pressure. There is a big opportunity here now to advance

:12:26.:12:30.

national interests. We think we ought to be seizing that, rather

:12:30.:12:34.

than going backwards over the old debates of whether we should be in

:12:34.:12:38.

or out. Talking of seizing opportunities, which powers to you

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propose to repatriate, and when? have already spoken about the need

:12:43.:12:53.

to repatriate some of the quite unnecessary stuff decided at the

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union - European level, employment legislation, anything that stops

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you employing people or stops the labour force being more flexible.

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There was a paper put to the Government this weekend that said

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to match the United States Europe had to be more flexible and more

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competitive. That is the kind of change we need to see in Europe.

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The way to do that, like it or not, is to engage with Europe, and take

:13:16.:13:21.

this opportunity that is now opening up to ensure that British

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national interests are, not just protebgtd, but advanced. How is it

:13:27.:13:32.

that 80 people who got elected on the same manifesto as you have come

:13:32.:13:35.

to a different conclusion? That is a minority of the parliamentary

:13:35.:13:40.

party. It is still a lot of people. Already David Cameron has secured

:13:40.:13:43.

the repatriation of one big power, which was our involvement in the

:13:43.:13:46.

bailout mechanism. That is back. We already have an act of Parliament

:13:46.:13:50.

securing a referendum lock, saying you don't have to trust politicians

:13:50.:13:54.

in future, if there is any transfer of competence to Brussels, there

:13:54.:13:59.

has to be a referendum. That is now part of the British constitution.

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Two of those pledges in our manifesto have already been put

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into practice, I think, therefore, we can trust David Cameron, and his

:14:07.:14:10.

leadership, now to take this forward, and use the opportunities

:14:10.:14:14.

that are opening up in Europe, because of the way the eurozone is

:14:14.:14:18.

now in crisis, to advance our interests and get what we want, a

:14:19.:14:25.

much better deal for the British economy. All this raises

:14:25.:14:28.

fascinating questions about what ought to be the relationship with

:14:28.:14:31.

the organisation that was an economic community when we joined t

:14:31.:14:35.

and is now a political union. It was all too much for the French

:14:35.:14:40.

President, who at the weekend, lost whatever patience he possesses and

:14:40.:14:45.

told David Cameron he should shut up, they are sick of him citsigs

:14:45.:14:49.

and telling them what to do. What is our role in Europe if not to

:14:50.:14:54.

carp from the side lines. Once again, Britain seems to be

:14:54.:15:00.

carving out its own path, a branch line in that great European way

:15:00.:15:03.

ahead. It is yet another two-track solution that Downing Street wants.

:15:03.:15:12.

But this time with a twist. The UK seeks, once more, to limit its

:15:12.:15:17.

integration in the European product, just as it did with the border

:15:17.:15:23.

control regime, or the formation of the euro. The twist this time now

:15:23.:15:27.

is that the Britain is trying to tell those at the very centre of

:15:27.:15:32.

the network how to run their business. Crucially, my European

:15:32.:15:37.

colleagues need to accept the remorseless knowledge of monetary

:15:37.:15:41.

union that leads from the single currency into greater fiscal

:15:41.:15:45.

integration. In Britain's view, the continuing Greek crisis just

:15:45.:15:49.

underlines the case for greater fiscal union, to even out the

:15:49.:15:54.

imbalances between north and south. But as the importance of stability

:15:54.:15:59.

funds grows, and Germany insists on being able to punish countries that

:15:59.:16:03.

spend too freely, the EU is moving towards a more formal financial

:16:03.:16:10.

arrangement. Treaty change can only happen if it is agreed by all 27

:16:10.:16:13.

member states of the European Union, and any treaty change, as the last

:16:13.:16:17.

treaty change did, is an opportunity for Britain to advance

:16:17.:16:23.

our national interest. This attitude was too much for President

:16:23.:16:27.

Sarkozy, who lambasted David Cameron yesterday for trying to

:16:27.:16:32.

tell the eurozone countries what to do. So what is the UK's national

:16:32.:16:37.

interest in this eurodebate? first priority, in responding to

:16:37.:16:41.

treaty changes, aimed at stablising the eurozone, will be to protect

:16:41.:16:45.

the rights of those countries in the EU, but outside the eurozone,

:16:45.:16:50.

over decisions affecting them, and to prevent damage to the financial

:16:50.:16:54.

services industry, so important to the economy of this country. There

:16:54.:16:59.

are, though, some other British agendas, the financial crisis

:16:59.:17:05.

increases Germany's clout in Europe. Will the euro increasingly run to a

:17:06.:17:09.

German timetable? Certainly Poland and Sweden share some of Britain's

:17:09.:17:13.

concerns. That increased integration means greater German

:17:13.:17:18.

power. On Wednesday, those inside and

:17:18.:17:25.

outside the euro will try to find common ground in Brussels. None of

:17:25.:17:28.

the Governments in the EU wants to see the euro implode, but

:17:28.:17:34.

increasingly the price of keeping it alive, looks like a profound

:17:34.:17:38.

realignment of power within Europe. To help us work out where we belong

:17:38.:17:42.

in this new Europe is the former Chancellor of the Exchequer, Norman

:17:42.:17:45.

Lamont. The economist, David Rennie, and the Labour MP, Gisela Stuart,

:17:45.:17:50.

who once was entrusted with the responsibility of trying to draw up

:17:50.:17:57.

a new European constitution. David Rennie, if this is resolved, this

:17:57.:18:00.

euro crisis, it will mean at the end of it we are more marginal,

:18:00.:18:07.

won't it? It will, not just marginal in an in and out sense.

:18:07.:18:10.

The danger is the 17 countries that use the single currency, if you

:18:10.:18:18.

look at them and compare them to the whole of the Europe there is a

:18:18.:18:25.

lot of people missing from the table, the Swedes, the Dutch. This

:18:25.:18:29.

worries them, they don't want to be stuck with just the French and the

:18:29.:18:34.

club med countries. Because of the pressures we saw on David Cameron,

:18:34.:18:40.

he can't come in and shape the rules from the main table. Do you

:18:40.:18:46.

count yourself as German, British? Bavarian. We have all dark secrets

:18:46.:18:49.

I suppose! This is part of the onward march of Germany in Europe,

:18:49.:18:53.

isn't it? You started off by saying if this euro crisis is involved.

:18:53.:18:58.

is a big if, I agree. You still assume that bailouts and all these

:18:58.:19:02.

things will solve the problem, which is one of periphery countries

:19:02.:19:05.

not being able to become competitive again. And what you

:19:05.:19:10.

have is a construct that simply will not work. It is economically,

:19:10.:19:15.

in its tensions, not sustainable. Germany is in the dreadful position,

:19:15.:19:18.

even if they wanted to, their economy is not big enough to

:19:18.:19:22.

permanentry bail them out. They get no thanks for attempting to bail

:19:22.:19:26.

out, or trying to tell the other countries how to run things. Do you

:19:26.:19:30.

think our attitude towards German power in Europe has changed?

:19:30.:19:35.

don't think our attitude towards German power has changed, I think

:19:35.:19:40.

Germany has come through a long period where it was reuniting the

:19:40.:19:44.

east with the west, and we tended to write Germany off too easily. We

:19:44.:19:51.

tended to talk about the German economy becoming a bit sclerotic, I

:19:51.:19:56.

e I always felt the same old strong Germany would reemerge. Germany is

:19:56.:20:00.

by far the most competitive country and export orientated in Europe. It

:20:00.:20:05.

is natural it is the dominant power in the eurozone.

:20:05.:20:09.

Is the fact we don't know how this euro crisis will be resolved,

:20:09.:20:14.

perhaps it makes the whole of this conversation we are having at the

:20:14.:20:17.

moment completely pointless, because we don't know on what basis

:20:17.:20:21.

we are predicating the discussion. Assuming some sort of resolution

:20:21.:20:25.

can be found, and it is a big assumption, everyone agrees, we are

:20:25.:20:29.

more marginalised at the end of it, aren't we? You are either in

:20:29.:20:32.

something or not. We are affected by the American economy, you could

:20:32.:20:36.

say we are marginalised by it. We have made a decision not to join

:20:36.:20:41.

the euro. We can't grumble then if there are some decisions that have

:20:41.:20:50.

secondary effects on us. Where our interests lie, and the Economist

:20:50.:20:53.

Magazine is careful to point it out. We have to make sure we still have

:20:53.:20:59.

a power of veto on things like tax yaix, things that fect affect us on

:20:59.:21:02.

the in- taxation, and things that affect us on the European market.

:21:02.:21:06.

We have to make sure the eurozone doesn't become protectionist on

:21:06.:21:10.

that part of the European Union. Are we marginalised? I fear we are,

:21:10.:21:14.

and some of the people in the House of Commons who know less than

:21:14.:21:17.

Gisela Stuart here. They hear the argument and say it is done let's

:21:17.:21:21.

not put money into saving it. were in favour of the euro, weren't

:21:22.:21:26.

you? Not for Britain, we were not in favour of Britain joining the

:21:26.:21:29.

euro. It doesn't matter who you are in favour of, it is in crisis

:21:29.:21:35.

without it? If you want a sensible debate, you have to concede that

:21:35.:21:40.

people like Lord Laming who were sceptical about the way the euro

:21:40.:21:44.

was constructed look far more correct than the boosters for the

:21:44.:21:47.

euros, you can concede that debate and move on. When Lord Laming says

:21:47.:21:52.

we are neither in or out, we are not just next to Europe, we do 50%

:21:52.:21:58.

of our trade with them, and 40% with the eurozone. And negotiations

:21:58.:22:01.

that could come out of the hardline France and Germany, grabbing bits

:22:01.:22:05.

of business out of the City of London, saying if you want to do

:22:06.:22:09.

euro-dominated business, it has to be done in Frankfurt and Paris.

:22:09.:22:13.

This affects us an enormous amount. It is too easy to say we will do

:22:13.:22:17.

what we need to do, it does matter. You think there is a real limit to

:22:17.:22:21.

how semi-detatched you can become? If you are interested in keeping

:22:21.:22:26.

jobs here. I wasn't contradicting that, I was saying we have to be

:22:26.:22:32.

careful by protecting our position in the single market and vis a vis

:22:32.:22:36.

taxation. When I said we were in or out, I was talking about the euro,

:22:36.:22:40.

we can't complain if they make some decisions that affect them on their

:22:40.:22:45.

own. I think, quite honestly, the reaction of Sarkozy to David

:22:45.:22:48.

Cameron, I'm amazed it hasn't happened before. We can't go around

:22:48.:22:52.

telling people what to do when we are not part of it. He's right,

:22:52.:22:58.

isn't he? Of course he's right. can't be more and more

:22:58.:23:00.

protectionism. We talk about all that matters is trade with Europe,

:23:00.:23:05.

it is the trade with the rest of the world. The single market is too

:23:05.:23:09.

protectionist. We have a currency that won't make it competitive.

:23:09.:23:13.

Even if every member-state in the eurozon was like the Germans, it

:23:13.:23:18.

would be disastrous, because it is built on export, somebody has to

:23:18.:23:23.

import. The marginalisation is a red herring, if you are a UK, you

:23:23.:23:27.

are only central in the European argument if you are economically

:23:27.:23:29.

successful, geographically you are not. You go back to the his treesm

:23:29.:23:35.

this is a construct fine in the 1970s - history, this is construct

:23:35.:23:40.

is fine in the 1970s, it would have been a functioning, proper currency.

:23:40.:23:45.

It isn't. What is dangerous about what happened in the Commons today,

:23:45.:23:49.

voters are watching and being offered a full spill. They are told

:23:49.:23:53.

there is this magical option of this loose free trade option. That

:23:53.:23:58.

is what the British are always wanted. Can't we have a

:23:58.:24:01.

relationship like Norway and Switzerland? We are more important

:24:01.:24:06.

than they are. They don't have a fantastic relationship when getting

:24:06.:24:10.

what they wanton banking? Switzerland has had a wretched few

:24:10.:24:14.

years on things like banking secrecy because they are not at the

:24:14.:24:18.

able. We are bigger than that. We have to be there making sure the

:24:18.:24:22.

single market works for us. reality is we are a larger

:24:22.:24:27.

proportion of its GDP is trade with Europe. They, actually, have had a

:24:27.:24:31.

very successful economy in recent years. Look at the growth statistic,

:24:31.:24:36.

and the strength of the Swiss franc. Switzerland is a country to be

:24:36.:24:43.

envied rather than to be pittied and criticised. You just think of

:24:43.:24:48.

cuckoo clocks and look in amazement, but Switzerland has high-tech and

:24:48.:24:53.

good growth records. Switzerland is a economy and also Norway to be

:24:53.:24:59.

envied, but Norway has natural resources. North Sea oil.

:24:59.:25:03.

change that is important, as a result of this crisis you will see

:25:03.:25:09.

a degree of fiscal integration in Europe. That changes our

:25:09.:25:14.

relationship. It also gives us an teent, as the Prime Minister said,

:25:14.:25:22.

when - an opportunity, as the Prime Minister said, to get some powers

:25:22.:25:25.

repatriated. What troubles me is the minute David Cameron and George

:25:25.:25:31.

Osborne started talking about a deeper political integration

:25:31.:25:36.

between Britain and France for Britain's interest. We accepted a

:25:36.:25:40.

Europe which had never been the UK's idea of Europe, a Europe

:25:41.:25:45.

dominated by a few countries. I would say is that how we think the

:25:45.:25:50.

future looks like. You have the French and Germany block dictating

:25:50.:25:54.

for everybody. It will happen, not because we suggest it should happen,

:25:54.:26:02.

but because France and Germany will in the end want it to happen. There

:26:02.:26:09.

will be more surveillance of other country's budgets. It won't be a

:26:09.:26:13.

full fiscal union but it will work in that direction. It is what the

:26:13.:26:17.

Germans are moving towards. don't have a luxury of saying it

:26:17.:26:21.

doesn't matter if the euro survives or not. If this is what saves it

:26:21.:26:25.

this will happen. We have to try to make it work some what in its

:26:25.:26:29.

interests. We can't be Switzerland, the difference is Switzerland is

:26:29.:26:36.

small and get to be a parasite on the single market. Its absence

:26:36.:26:40.

makes no difference to free market versus protectionist. Britain's

:26:40.:26:48.

absence would swing the action towards a French state vision.

:26:48.:26:52.

David Cameron's trying to take part in this has been weakened by the

:26:52.:26:57.

result? You have to assume he's going into the room with one hand

:26:57.:27:02.

tied behind his back. He can't pay- to-play, and advance in the next

:27:02.:27:05.

stages of saving the euro. You are completely for getting the

:27:05.:27:09.

electorate of Europe. In Spain you have elections, in Greece you have

:27:09.:27:12.

elections, Portugal, Ireland, they kick out their Government, they see

:27:12.:27:17.

no change in policy, they see austerity and no improvement. These

:27:17.:27:20.

economic models also have a political Israelty. We are storing

:27:20.:27:24.

up enormous trouble in some - reality, we are storing up enormous

:27:24.:27:27.

trouble when they see their politicians are being unaccountable.

:27:27.:27:34.

It will come and bite us. I agree. Don't just listen, tell them the

:27:34.:27:40.

truth. As was pointed out to the fans of a

:27:40.:27:44.

referendum. The British debate is like arguing over the winning

:27:44.:27:47.

diagram for your house, while the roof is on hire. The Financial

:27:47.:27:52.

Times is reporting tomorrow, that Germany, France, the IMF and the

:27:52.:27:55.

European Central Bank are asking institutions holding Greek debt to

:27:55.:28:00.

be prepared to lose nearly two- thirds of their money. In Italy,

:28:00.:28:03.

meanwhile, Prime Minister Berlusconi even had to skip a court

:28:03.:28:05.

appearance to hold a cabinet meeting to try to agree measure

:28:05.:28:09.

that is might satisfy the French and Germans. Mistakes are higher

:28:09.:28:14.

than - the stakes are higher than they have ever been and rising.

:28:14.:28:18.

There are three things they need to do on Wednesday at the second

:28:18.:28:22.

summit, they need to decide how much Greek debt gets written off,

:28:22.:28:25.

how much money do you throw at Europe's banks to stop them falling

:28:25.:28:31.

off as the debt write-off hits them. How do you provide a fire blanket

:28:31.:28:34.

to throw over the European cry staiction Italy out of the crisis

:28:34.:28:39.

zone. The details in the last 24 hours have become clearer. In the

:28:39.:28:44.

first case on Greek debt it is 60% of a write-off, a haircut they are

:28:44.:28:48.

asked for. We reported this on Friday night. Now we have learned

:28:48.:28:51.

over the weekend officials have begun these discussions with

:28:51.:28:56.

European banks. On the bank bailout, you have got a recapitalisation

:28:56.:29:01.

fund for the European banks of 108 billion, that was agreed yesterday

:29:01.:29:08.

afternoon at the summit. That will be used to prop up banks, from

:29:08.:29:14.

national treasures and international funds. We are being

:29:14.:29:19.

to pay 1.4 trillion. They have only got half a trillion, so they have

:29:19.:29:22.

so make a clever and opaque financial vehicle. We don't know

:29:22.:29:29.

how they are going to do it. We know the acronym, which is SPIV.

:29:29.:29:34.

How close are they to sort iting out? I should ask you what -

:29:34.:29:39.

Sorting it out. I should ask you what it means to. I'm not sure it

:29:39.:29:42.

translates into another European language. They are close, to do it

:29:42.:29:46.

they will have to make a bonfire of a lot of the rules, a lot of the

:29:46.:29:49.

denial they were going through three weeks ago. A lot of the

:29:49.:29:54.

vanties. In fact, there might even be bonfires. First of all, Athens,

:29:54.:29:59.

the Greek banks, most have lost 20% of their value today. This is a

:29:59.:30:03.

signal the Greek banks are more or less finished. They have to be

:30:03.:30:08.

nationalised rae tappalised quickly. They are the ones in line -

:30:08.:30:14.

recapitalised quickly, they are the ones that loaned the money to

:30:14.:30:17.

grease. Then there is the taking of Italy

:30:17.:30:21.

out of the market so they don't have to keep borough. There was an

:30:21.:30:24.

emergency meeting in Italy tonight, Berlusconi was there. One of the

:30:24.:30:28.

great parties in the coalition is the northern league, and has

:30:29.:30:33.

proposed in the past banning kebab shops on the grounds of cultural

:30:33.:30:37.

purity. How do you think it went down with them to be told that the

:30:37.:30:41.

Germans and French had told Italy to impose a retirement at 67, it

:30:41.:30:45.

didn't go down well. Despite the emergency nature of the Italian

:30:45.:30:50.

cabinet there were no decisions announced at the end of it.

:30:50.:30:54.

To try to help shed some light on how much trouble European banks

:30:54.:30:59.

might be in is Thomas Huertas, who until last month was head of the

:30:59.:31:03.

European banking authority. How much money do you think the

:31:03.:31:08.

European banks need? They estimate, as your colleague has indicated,

:31:08.:31:13.

108 billion euros. That comes about from marking the Government bond

:31:13.:31:19.

positions of the European banks to market. And taking into account the

:31:19.:31:24.

money they may need if the economy deteriorates. Where do you go about

:31:24.:31:30.

finding 108 billion? As your colleague indicated the European

:31:30.:31:34.

Financial Stability Fund is there as a last resort. The idea is the

:31:34.:31:38.

banks to access private markets first. If private markets are not

:31:38.:31:42.

ready to provide the funds, that they could go to their own member-

:31:42.:31:46.

state and only come to the European Financial Stability Fund as a last

:31:46.:31:49.

resort. Is there any indication they can get it from private

:31:49.:31:54.

sources at present? They may be able to. There is also a discussion

:31:54.:31:58.

that they would potentially shrink some of their asset. There is

:31:58.:32:02.

discussion as to if they are to shrink assets and therefore reduce

:32:02.:32:06.

their capital requirements, what type of assets do they shrink. A

:32:06.:32:09.

very strong indication by the Governments that they should not be

:32:09.:32:12.

shrinking lending to the real economy. When so many of these

:32:12.:32:15.

countries are already in debt, where are they going to find the

:32:15.:32:21.

money to finance their banking systems? The really critical areas

:32:21.:32:26.

are, again as your colleague has vindicated, Greece and Cyprus,

:32:26.:32:33.

where they - the write-off of 60% of the Greek sovereign exposure

:32:33.:32:39.

will reduce the capital of those banks quite severely, and pose an

:32:39.:32:44.

immediate recapitalisation need. For other banks, French banks,

:32:44.:32:49.

German banks, UK banks, they have a much smaller exposure to Greece in

:32:49.:32:54.

relation to their own capital, and even at a 60% write-off of those

:32:54.:32:58.

exposures they would still be able to maintain their overall capital.

:32:58.:33:03.

So they can take a 60% so-called haircut, can they? It will depend,

:33:03.:33:08.

and vary from bank-to-bank. It is certainly not the case that aside

:33:08.:33:13.

from the Greek banks, and certain Cypriot banks, that a 60% haircut

:33:13.:33:17.

would needly put banks into a position where they have to be

:33:17.:33:21.

recapitalised. From what you know right now, are banks prepared to

:33:21.:33:27.

lend to one another? Banks are carefully looking at the exposures

:33:27.:33:32.

that they take on. They are differentiating among banks, and

:33:32.:33:35.

some banks are putting money with the European Central Bank or with

:33:35.:33:40.

other central banks rather than lending to other banks. Now, why

:33:40.:33:49.

were these banking crises so unforeseen? To some extent the

:33:49.:33:54.

first crisis was, that came about from sub-prime was unforeseen.

:33:54.:33:59.

Let's not go right back to Lehman Brothers and that. Let's talk about

:33:59.:34:04.

the euro. This banking crisis within the euro, why was it not

:34:04.:34:08.

foreseen? I think the danger that it could develop into a banking

:34:08.:34:16.

crisis was certainly foreseen. The spelling it out, and in terms of

:34:16.:34:21.

will it actually he result in problems, depended on the political

:34:21.:34:27.

decisions that were being taken at the time. But it was very clear.

:34:27.:34:31.

You ran stress tests on these banks and you failed to spot this snts

:34:31.:34:37.

were very much aware that the - Spot this? We were very much aware

:34:37.:34:41.

that the sovereign debt issue was an area of concern. When we ran the

:34:41.:34:45.

stress test earlier this year, there was a political decision not

:34:45.:34:49.

to say certain countries would default and the loss that would

:34:49.:34:54.

occur would be a certain percentage of the amount of the debt. Who made

:34:54.:34:59.

that judgment? The judgment was the national supervisors of the euro.

:34:59.:35:03.

Essentially politicians were deciding that there were certain

:35:03.:35:05.

things that wouldn't be investigated, which in the end,

:35:05.:35:13.

would be their own decision? There was a decision not to say certain

:35:13.:35:16.

countries would default and the lost would be such and such per

:35:16.:35:22.

cent. There was a decision by the superviser to say we needed a

:35:22.:35:27.

disclosure that to what the exposures are. There was

:35:27.:35:29.

unprecedented level of disclosure of the sovereign detects in the

:35:29.:35:36.

test. It enabled the market to run its own calculation as to what the

:35:36.:35:39.

possible...It Was very small wasn't it? One can debate it, it was the

:35:40.:35:45.

best that could be done in the circumstances. It was a very full

:35:45.:35:50.

disclosure of the extent of sovereign exposures. It came out

:35:50.:35:54.

very clearly that banks, not surprisingly, had taken on the

:35:54.:35:58.

sovereign debt of their own countries.

:35:58.:36:01.

Thank you. Some time in the next few days,

:36:01.:36:05.

according to the United Nations, the seven billionth person will be

:36:05.:36:10.

born. It is just a number, but it is unarguable that the population

:36:10.:36:16.

is growing, and the earth has never supported as many people as it has

:36:16.:36:20.

now. We will look at the questions raised, starting with Zambia. Dave

:36:20.:36:26.

McKean has been there to investigate the phenomenon of

:36:26.:36:32.

private equity firms buying up swathes of farmland. At what price

:36:32.:36:39.

can it be made profitable. It is not what we have come to

:36:39.:36:43.

expect of Africa. The imagery of plenty, offering a tantalising

:36:43.:36:53.

vision. The idea that Africa might not only

:36:53.:37:00.

solve its own food problems, but help the world as well. Here in

:37:00.:37:06.

Zambia, foreign investors are bidding to buy vast tracks of

:37:06.:37:10.

arable land. What was once a basket case, now presented as a golden

:37:10.:37:14.

opportunity. If you just increase the yields in Africa to 80% of what

:37:14.:37:20.

the world averages are, Africa would become a net exporter of food.

:37:20.:37:26.

Across Africa, land offers both a unifying symbol and the impetus for

:37:26.:37:32.

conflict. Africa, for the Africans, was the rallying cry of liberation.

:37:32.:37:37.

But across much of the continent, the conflict and drift of the post-

:37:37.:37:42.

colonial age saw many condemned to poverty.

:37:42.:37:46.

The agriculture of slash and burn still dominates. Once the burning

:37:46.:37:51.

is over the farmer will borrow some oxen from a friend, they will

:37:51.:37:56.

plough up the land, and with any look tell have enough maize to feed

:37:56.:37:59.

himself and his family and some to sell to the market. What happens in

:37:59.:38:03.

these fields isn't just about yield and about cultivation. For

:38:03.:38:06.

centuries people in Africa have built their villages, their

:38:06.:38:11.

community, their sense of identity around the land.

:38:11.:38:15.

For the subsist tense farmer, this is an age of pressing questions

:38:15.:38:25.
:38:25.:38:26.

about the invests scrambling for Africa. There is a lot of talk

:38:26.:38:30.

about foreigners coming, Chinese, and Britain, coming to take the

:38:30.:38:34.

land, what do you feel about it? the Government can give the land OK.

:38:34.:38:37.

If they feel those people, they are going to give, they are going to

:38:37.:38:40.

develop and they are not going to disturb those people staying there.

:38:40.:38:44.

Otherwise we are worried, because they are going to grab the whole of

:38:44.:38:50.

the land, and even those people who are staying here with nothing.

:38:50.:38:56.

In an age of food insecurity, as prices rise across the globe, there

:38:56.:39:00.

is growing pressure to dramatically change the way the land of Africa

:39:00.:39:04.

is cultivated. 50 years after the end of the colonial order, Zambia

:39:04.:39:08.

is opening its doors to foreigners once more. A political environment

:39:08.:39:13.

that is stable, there are excellent conditions for agriculture, so the

:39:13.:39:18.

climate, the amount of water, the quality of the soil. If you are an

:39:18.:39:23.

agriculture investor, Zambia is where you want to be. This is the

:39:23.:39:31.

zambeeian bush. Here the British Private Equity

:39:31.:39:37.

firm Chayton Capital, has leased an existing farm of 25,000 acres.

:39:37.:39:45.

Their aim is to maximise profit, by maximising yields. We have achieved

:39:45.:39:55.

in maize 14.2 tonnes. Stuart runs the operation in Zambia, he used to

:39:55.:39:57.

farm in Zimbabwe before being driven off the land. He thinks it

:39:57.:40:02.

is possible to get 30-times the yield obtained by traditional

:40:02.:40:05.

farming. They achieved this through economies of scale, better

:40:05.:40:10.

irrigation and a new approach to soil. It is the moisture and the

:40:11.:40:19.

organic carbon that increases the yield potential of the crop. So the

:40:19.:40:24.

plant can extract the nutrients. Unskilled labour is acutely

:40:24.:40:28.

vulnerable to more efficient farming. In Africa the farm

:40:28.:40:33.

labourer depends on his employer for accommodation, med ka care,

:40:33.:40:37.

education for his children. This project, backed by the Government

:40:37.:40:42.

and tax breaks promises to create jobs. In a country where 60% live

:40:43.:40:46.

below the poverty line, it is a seductive argument. At this dam on

:40:46.:40:52.

the farm, we met part-time workers. We have families, but if we are not

:40:52.:40:58.

working anywhere we are suffering. You want long-term employment?

:40:58.:41:02.

But since they have taken over the farm, there have been significant

:41:02.:41:06.

job losses. Wherever in the world you have had farming being

:41:06.:41:09.

industrialised, people have lost their jobs, already here you have

:41:09.:41:17.

people losing their jobs on this farm? The last skilled jobs, yes -

:41:17.:41:22.

the less skilled jobs, yes, as a result of mechanisation, some of

:41:22.:41:26.

that work goes away. Through time, over building a large scale

:41:27.:41:33.

business, is to train people up, to do highly value-added jobs, so they

:41:33.:41:36.

can continue to build a career in agriculture or transport the skills

:41:36.:41:40.

into other sectors as well. It is a fact that the majority of your

:41:40.:41:44.

profit will go abroad, it won't benefit people here? Profit is the

:41:44.:41:47.

way in which investors are compensated for putting their

:41:48.:41:52.

capital at risk. But the value that's created by that capital

:41:52.:42:00.

investment stays right here. When Zambia began to welcome big

:42:00.:42:03.

commercial operators, a compelling argument would be they pass on

:42:03.:42:09.

skills to neighbouring subsist tense farmers, everybody would be a

:42:09.:42:13.

winner. But these small holders told us they had no help from the

:42:13.:42:17.

big farms. And with no access to capital, these men and women

:42:17.:42:23.

struggle to increase their yields. I'm a small farmer, I have to

:42:23.:42:29.

source my own capital, but how to source it. You can't get a loan?

:42:29.:42:33.

What about being able to farm in a more efficient way, do you get any

:42:33.:42:37.

help from the commercial farmsers here, do they teach you? No, there

:42:37.:42:42.

is nothing of that nature. In fact, there is no interaction between the

:42:42.:42:46.

small skilled farmer and a big commercial farmer. I get the sense,

:42:47.:42:51.

listening to your complaints, that you feel the Government is kinder

:42:51.:42:55.

to the big farmer than they are to you? That they look after them

:42:55.:43:01.

more? Yes. There really isn't any of the

:43:01.:43:05.

racial edgyness, the antagonism towards whites that I found in

:43:05.:43:09.

places like South Africa and Zimbabwe. Broadly speaking, most

:43:09.:43:14.

people seem to welcome the idea of big commercial farming. But the

:43:14.:43:18.

resentment at what is perceived as favouritism towards big farmers,

:43:18.:43:26.

that is something that could prove very troubling in the long-term.

:43:26.:43:30.

Chayton Capital leased an existing commercial farm, they displaced no-

:43:30.:43:35.

one. But elsewhere, vast tracks of land, occupied by peasant farmers,

:43:35.:43:38.

are being offered to bigger scale investors.

:43:38.:43:42.

This is one of nine proposed developments, where several

:43:42.:43:46.

thousand people live. Locals are being told the forest

:43:46.:43:51.

must be cleared, and families are already being moved off their

:43:51.:43:58.

farmland. TRANSLATION: Our house was on a demarcation line, a road

:43:58.:44:02.

is supposed to pass through the area, we were forced to move.

:44:02.:44:06.

Our house has been demolished, they didn't offer us any alternative

:44:06.:44:12.

land, and we haven't had any compensation.

:44:12.:44:15.

Here they already produce enough grain to feed themselves and sell a

:44:15.:44:21.

healthy surplus. Seven years ago these people were

:44:21.:44:25.

given a written promise by the Government that they wouldn't be

:44:25.:44:29.

moved from the land where their ancestors are buried.

:44:29.:44:32.

TRANSLATION: We saw people coming with machinery, they started

:44:32.:44:37.

marking out the roads. They told us we would be moved off the land, and

:44:37.:44:44.

that the land would be used for development.

:44:44.:44:47.

The problem is most Zambians have no legal title. Nearly all land is

:44:47.:44:52.

owned by the state, which can lease to whoever it wants. At the moment,

:44:52.:44:57.

a lot of people do not know their rights on their own land, all they

:44:57.:45:02.

know is we are the owners of this land, they do not have pieces of

:45:02.:45:08.

paper or titles to land, therefore, they are not adequately protected.

:45:08.:45:13.

Across Africa, Chinese, Indian, middle eastern, American, European

:45:13.:45:17.

companies are investing in huge tracts of farmland. But we found

:45:17.:45:23.

signs of a change in the official mood in Zambia. You can't be purr

:45:23.:45:28.

people out and lofg them to their own - push people out and leaving

:45:28.:45:32.

them to their own devices, that is inhuman, even if the world's hunger

:45:32.:45:38.

were to hinge on it. In the capital there is a new Government.

:45:38.:45:43.

Championing the poor is the vice- president. A white farmer, who

:45:43.:45:47.

scrutinises land deals and the claim made by investors that they

:45:47.:45:52.

will bring jobs. I would like that evaluated by more than a roaming

:45:52.:45:58.

television crew. I would like it evaluated properly. The truth of

:45:58.:46:01.

that claim. You sound very sceptical? I am, I have been around

:46:01.:46:09.

a lot. I know what proposals look like, and justifications look like.

:46:10.:46:17.

I would say 90% of what's promised 0 projected turns out not to be

:46:17.:46:20.

true. Will you be much tougher about the way land is parceled out

:46:20.:46:26.

in this country b the kind of deals done? Absolutely. I can answer as

:46:26.:46:33.

an individual, yes, we're going to change the way, we will be far more

:46:33.:46:40.

circumspect about the land issues. About land use issues.

:46:40.:46:45.

And a lot more circumspect about what happens to the dispossessed

:46:45.:46:50.

prop laigs. There is a genuine dilemma here, as the demand for

:46:50.:46:54.

food grows, there is mounting pressure to make African land more

:46:54.:46:59.

productive. But the danger is that a volatile new dynamic is created.

:46:59.:47:04.

Of landless mass, driven by resentment of those who wish to

:47:04.:47:09.

make a property from feeding the world. Tomorrow night in his second

:47:09.:47:16.

report on food security, Dave McKean will be reporting from

:47:16.:47:24.

northern - Fergal Keanewill be reporting again.

:47:24.:47:32.

It is the coldest most merciless kind of corruption. Because, like

:47:32.:47:37.

this time, people are dying now. That's, sadly, all we have time for

:47:37.:47:44.

topt. It seems there were about 8 - tonight, it seems there were 82

:47:44.:47:54.
:47:54.:48:19.

Tory rebels, including two tellers. Hello, after today's deluge across

:48:19.:48:23.

western areas, a quieter day thankfully on Tuesday. The

:48:23.:48:28.

attention tourns the north-east, where further heavy and persistent

:48:28.:48:32.

rain for eastern parts of Scotland. For the rest of us nothing too

:48:32.:48:35.

serious. Showers around, but plenty of dry and bright weather, through

:48:35.:48:41.

the heart of England. One or two sharpish showers will develop from

:48:41.:48:45.

the English Channel into the some southern counties. For South-West

:48:45.:48:48.

England, thankfully mopping-up process, apart from the odd shower

:48:48.:48:53.

and a dry day. The winds won't be as strong either. A good thing. For

:48:53.:49:01.

Wales as well, largely dry and bright afternoon in prospect. For

:49:01.:49:04.

some showers but nothing of the scale we have seen over the last

:49:04.:49:08.

few days. Things getting a chance to dry out. For eastern parts of

:49:08.:49:13.

Scotland, in particular, it doesn't look good. Heavy and persistent

:49:13.:49:18.

rain, warnings have been issued, go on-line for detals. Dry weather for

:49:18.:49:23.

most of the UK, in the middle of the week, a bit of patchy fog

:49:23.:49:28.

lingering into the afternoon. Sunshine inbetween, nothing too he

:49:28.:49:32.

canstsive in erms it of rainfall.S this the picture on Wednesday, the

:49:32.:49:38.

David Cameron is facing the biggest rebellion of his premiership as euro sceptic Conservative backbenchers have vowed to defy orders and vote for a referendum on Britain's European Union membership - what will be the scale and impact of the revolt?


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