16/11/2011 Newsnight


16/11/2011

News analysis with Jeremy Paxman. As Sir Melvyn King cuts the UK economic growth forecast to just one per cent, what options does this leave Chancellor George Osborne?


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Confirmation of the bleeding obvious, the outlook for the UK

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economy is only getting worse. Mervyn was knighted Sir Mervyn this

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week, but there is nothing arising about today's growth figures from

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the Bank of England. The outlook for growth of the world economy has

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worsened since August. That is also true here in the UK. Where activity

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could be broadly flat until around the middle of next year. We will

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ask a Treasury minister to confirm whether they still expect to

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eliminate the deficit in this parliament. In Europe, a very rude

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message from Germany to Britain, on the proposed city City transaction

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tax, pay up or shut up. It is poverty to you and me, maybe, but

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it is money to vulture funds. How one of the world's poorest nations

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may be made to pay millions to western scavengers. Is it fair that

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your vulture fund sought $100 million from the Congo. How can

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some of these people be running for President, when they wouldn't even

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pass an interview to appear on Newsnight. REPORTER: You agreed

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with President Obama on Libya or not? OK, Libya. I do not agree with

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the way he handled it for the following reason, em, no, that's a

:01:33.:01:43.
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different one. As was predicted last night, today's unemployment

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figures showed there are now over a million young people without a job.

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Worse, the Bank of England believes the growth, which might create jobs,

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is going to be much slower than previously expected. 1% next year,

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not much higher than the chances of Mervyn King yodelling on the X

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Factor. Worse still, it looks for likely than ever that the

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Government will fail to meet its deficit reduction target by the end

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of the parliament. The Government has repeatedly said there is no

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plan B. In these circumstances, should there be?

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'S got gloomer. -- he's got gloomier We are facing a difficult

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time ahead. And gloomier. Every month the governor of the Bank of

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England has been getting gloomier every month. Despite a new set of

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glasses and a new Knighthood, Sir Mervyn wasn't cheered up at all. He

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has halved his growth expectation for next year, now just 1%. The art

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of growth forecasting isn't just coming up with the numbers in the

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first place, it is explaining why the last set of numbers didn't pan

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out. Despite the easier monetary stance, growth over the next few

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quarters is likely to be markedly weaker than in the August

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projection. This reflects the impact on the United Kingdom, of

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the deterioration in prospects internationally, working through

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weaker net trade, higher credit spreads, and the likelihood that

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elevated uncertainty will cause businesses to postpone investment

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and households to spend less. mer viing emphasised that all of

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these growth forecast -- Mervyn emphasised that awful these growth

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forecasts are based on -- all of these growth forecasts are based on

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nobody knows on, the outcome of the issues in Europe. Adding to the

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uncertainty with the Government's plans to deal with the deficit.

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we outperform the impact won't be too bad in the medium term, it will

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add to debt, it is managable within the Government's own fiscal rules.

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If this is permanently lost output, that becomes more of a long-term

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problem and potentially requires more long-term pain, in terms of

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cuts and tax increases to balance the books. All eyes are now on the

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assessment that the Chancellor is due to give to parliament in his

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pre-budget report on November 29th. The same day that the office for

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budget responsibility gives its updated forecast. In the meantime,

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ministers are emphasising how, well, they will see if you can pick out

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the word the business secretary wants us to take on board. We know

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economic conditions are very difficult, and we have got a very,

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very difficult inher taepbsance, very difficult external

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circumstances, a period of difficulty, and difficulty in the

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world markets. Why difficult? Remember the big row between the

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parties about how fast to cut the deficit. This is the line that

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George Osborne projected in his first budget. This less steep line

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is the one Alistair Darling offered in his last budget as Chancellor.

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But both are steeper than the latest Treasury average of

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independent forecasters. If true, the Government will fail to achieve

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an important economic target. for the Government becomes harder

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each time these growth forecasts are downgraded. The Government will

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not now, under most reasonable assumptions, reach budget balance

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by the end of this parliament, so the really hard thing will be

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likely to have to go into the next parliament with more public

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spending cuts, more austerity. Prime Minister today was meeting

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young high-tech entrepeneurs, some big ideas and fast from them would

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really help. However, the big question, how to stimulate growth

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quickly, without adding to borrowing. The Chancellor will have

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a difficult judgment in the PBR, he's going to have some more gloomy

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forecasts from his own independent fiscal watchdog. He has not got a

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great deal of room for manoeuvre, he can't spend a great deal of

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extra money if he's going to keep to his own fiscal rules. Within

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that limited manoeuvre, how is he going to produce policies which

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make a difference to growth. That is the challenge he has set himself,

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that is a pretty difficult challenge for him to be facing.

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answer coming from Liberal Democrats, is to use other people's

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money, to pay for things like new houses. The thing at the moment is

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that the pension funds are sitting on a very large amount of money,

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which they are looking for long- term, secure place, and house

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something an obvious place for that money to go. That and some of the

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other infrastructure areas, road or rail, we can look to the pension

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funds, who are basically coming to Government and say can you help us

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spend our money. But, before we get too cheerful,

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remember that these comparatively gloomy forecasts are predicated on

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the worst not happening, on a eurozone meltdown being avoided. If

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that all goes belly-up, all bets are off.

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With us now are the Treasury minister, David Gauke, and the

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Shadow Business Secretary, Chuka Umunna. Now, David Gauke, are you

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still going to eliminate the structural deficit by 2014/15?

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Government's policy remains that is what we will do. It is worth

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pointing out why. We are seeing across all sorts of countries,

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great problems because they don't have fiscal credibility. That is

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why the likes of Italy and grease and now France are taking -- Greece

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and now France are taking austerity measures. When asked are you going

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to, you said that is the policy, that is not the same as you will do

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it? That is what we will do. We stick to that commitment. And the

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reason we stick to that commitment is when we see countries where the

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markets don't have faith in the policies that they are going to

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pursue. We see their long-term interest rates increase, and we see

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some of the crises at the moment. The UK Government remains committed

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to getting rid of the structural deficit over the course of this

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parliament. You still expect to do it by 2014/15? If you look at what

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the Bank of England said today, when they said that yes, growth

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will be slow in 2012, but then they said above trend growth over

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2013/14, that will be possible. Institute for Fiscal Studies, which

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we saw in that report, which thinks you can't do it, they are wrong,

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are they? What Paul Johnson said from the IFS is we would still be

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able to do it if we saw strong growth towards the end of the

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parliament. That is an if? That is what the Bank of England said today.

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That is what you expect to do in 2014/15? We will ensure we get rid

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of the structural deficit by the end of this parliament, it is by

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having that commitment and credibility that we are not in the

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mess that other countries are. it is working? That's not what the

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consensus forecast says. It is what he's saying, he as saying by the

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end of the parliament it will be gone? Very few people seem to think

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that they will achieve this. Maybe they are all wrong? The

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consensus forecast, all of these people say they will be borrowing

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possibly up to �100 billion more than planned. The best way to

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reduce your borrowing is to get growth back and getting people into

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work. We have seen some incredibly tragic figures today. Over one

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million young people unemployed. That doesn't just affect in terms

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of your spending power, your monetary capacity, it affects your

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whole sense ofself. The reason we are in that position, is frankly,

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the economy hasn't grown, since this time last year. What had

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happened since this time last year, is confidence nose dived. When that

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nose dives, demand fall, that is why we are in the position we are

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in. The question is, how bad does it have to get before David and his

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colleagues decide to change course. How bad does it have to get? I have

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to say that he's talking about how we get borrowing down. I'm talking

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about growth. We don't get borrowing down by borrowing more.

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The fact is there are many countries across Europe. You will

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be borrowing more than expected. Many countries across Europe taking

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austerity measure, tougher than the measures we have had to take,

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because they have no choice, because that is what the markets

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require to have credibility. That is why we need to. So growth is low,

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growth forecasts are lower, and you are the person that says the facts

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may have changed but I'm not changing my mind? The facts have

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supported what we have done. What we have said all the way through is

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we need to be ahead of the market. Things have got worse, you were

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supposed to be promoting growth and growth has got worse? If you look

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at what is happening in the likes of Italy, France, Greece, Spain

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will take austerity measures as well. The fact is, the UK is seen

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as being a safe haven by the markets at the moment. Because of

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the steps that we have taken, if we try to abandon that, if we say

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we're not worried about borrowing, we will borrow more and more and

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more, what will happen. There are more than a million young people

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out of work at the moment. I have been to Chorley in the North West

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of the country, which has seen its youth unemployment go up by 243%

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since January. Are you seriously going to look all of these young

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people in the face and say we're not doing anything, all of our

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measures are working, there is nothing to worry about. Of course

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we are looking to do what we can do-to-get growth. And there will be

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measures announced in the autumn statement to that effect. Do you

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really think that it would help those young people if we abandoned

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getting our deficit down, if we said we're not interested in that,

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that we can borrow our way out of this mess. Anyone who thinks the

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recovery from this mess would be easy doesn't understand the scale

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of the challenge the country faces. The way that you reduce your

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borrowing is by having a plan that works. Getting jobs and growth back

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into the economy. You say how to do this? We have a five-point plan to

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do this, having a national insurance rebate. Can you remind us

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how much this five-point plan of your's is going to cost? Over the

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course of the parliament, over the course of the parliament we have a

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�40 billion gap between ourselves and the Government. Because we

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would, they would. It costs �40 billion? One year would cost �20

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billion. If you bear with me, there is a �40 billion gap. Will it cost

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�20 billion a year? Yes it will. Yes it will, VAT reversing VAT will

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cost �12 billion a year alone. Under the figures you have

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published today, you will be borrowing more than under our more

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reasonable and responsible deficit reduction plan. In every single

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area. According to the consensus forecast that your department

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published today. That is clearly nonsense. How is it nonsense. These

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are your figures. We are going through a difficult time, because

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of the eurozone crisis. More every single year. This is nonsense.

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Would you, if you were in Government, you would be wore

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borrowing more than Alistair Darling claimed to. You claim it is

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all to do with the eurozone, I quote the former Treasury secretary,

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who said it is absolute nonsense to blame this on the eurozone crisis.

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Are you saying it has no effect at all. Are you saying there is no

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effect on confidence because of the eurozone crisis s that what you are

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saying. Unemployment is lagging indicator, all of the statistics we

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have had so far relate to the period before the eurozone crisis

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had on the economy. Are you saying the eurozone has no effect on

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confidence in the UK. It doesn't have any effect on your policy!

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you're not going to do anything about it. You are ripping out the

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foundations on which we could actually withstand the storm, if

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and when it comes. The fact is, by having more credibility. By having

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a clear plan to get the deficit down, the UK is not being sucked

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into the crisis that we see in Greece and Italy. You have

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published figures showing the deficit will be higher than you

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said. You accept that, you will be borrowing more money that Alistair

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Darling would have been borrowing if he stuck to his plan? I don't

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accept that. These are your figures? The fact is the economy

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has been hit by a eurozone crisis f Alistair Darling was a charl, there

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would still have been a eurozone crisis. We haven't seen growth in

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the last 12 months. If we followed the plan you advocated, the UK

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would have been incredibly vulnerable to the type of issues we

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have seen in Europe. The markets would have had no credibility, we

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know our credit rating would have been downgraded. That is nonsense.

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Our market interests have increased. Only one economy has grown slower

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than this, in the G7, that is Japan who has suffered an earthquake.

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can pick and choose which time period we will look at. I'm looking

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at your time in Government. In 2011 we have grown as much as the US.

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This is nonsense. If you look at projections we are growing faster

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than the eurozone. This economy has grown by 0.5%. We will leave it

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there, thank you very much. The British Government has been

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accused by the Germans of thely nis crime of trying to look after

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British -- henious crime of looking after British interests. The German

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Chancellor said we wouldn't get away with t oh to be a fly-on-the-

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wall when Cameron and Merkel meet on Friday. The issue is a financial

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tax on all banking interests. Britain, home of the biggest

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:15:46.:15:49.

financial centre would bear the brunt.

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When David Cameron goes to Berlin on Friday, he may not care to think

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what they are saying about him in the beer halls, they may point out

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while our Government is worried about the euro crisis it doesn't

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want to pay like Germany is prepared to pay to sort it out.

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Instead we are looking after the interests of the bloated financial

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sector that caused the problem in the first place. If you listen to

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the German ruling party, right now the whole of Europe is speaking

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German. They don't mean we are speaking the language. What they

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mean, is Germany, being the paymaster is making the money, and

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setting all the policy. That is not a very welcome idea in the corner

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of the continent where this bar is, not Bavaria, but the City of London.

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A close ally of the German Chancellor, Angela Merkel, has

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accused our Government of acting selfishly, not least because it has

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pledged to block the tax on financial transactions proposed by

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the European Commission. TRANSLATION: The British are not

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members of the currency union, but they are members of Europe. And

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they also have a responsibility for the success of Europe. Our message

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to the British cannot be to not look for one's own advantages

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without being ready to make concessions. A tax on financial

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transactions, sometimes called a Tobin tax, after the economist who

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first proposed it, could be quite a concession. The so-called Robin

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Hood tax doesn't look like it would rob that much from the rich. Just

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0.1% every time a bond or share is sold, even less for other shares

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and investments, that would raise 57 billion euro as across the EU,

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and because most of those transactions are based in London,

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the City would pay �40 billion. It is not just German politicians who

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want a tax on financial transactions. The Archbishop of

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Canterbury responded to the Occupy protests, and said he supported it,

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and he agrees with the Pope and poverty campaigners. This could be

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the most popular tax in British his treatment polgs show British people

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are in favour of this tax, 2-1, that includes voters from the

:18:03.:18:09.

Government. This would redistribute money from the casino in the City

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to redistribute to poorer people. This isn't about slapping tax on us

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but Britain making the right tax. The City says it would send

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business abroad and tax revenues with it. It is worried Germany is

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setting the agenda. London is most exposed, because that is where the

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trade is done. Somebody is saying, from outside, what we would like,

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we would like 35 billion euros from you in the UK, please send it to us

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and we will decide how to spend it. The point is, it is not going to

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happen, because the Government here has made it absolutely plain they

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will veto it. We are very wary at the way it is proposed. If all the

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world major financial centres agreed on this it might be

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practical proposition, but just doing it on the basis of the

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European area isn't practical. We have already seen what happens,

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Sweden tried it unilaterally and they lost money. The sway the

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Europeans are framing this, it is a tax on Britain to support the

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European budget. We are not going along with that. German voters

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don't like coughing up for other people's wasteful spending any more

:19:14.:19:20.

than we do. If the euro stays intact it will be German not

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British money supporting it. It will be more German influence, less

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British influence, not just on the eurozone, but the whole of the

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European Union. That could mean that the City finds that a Robin

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Hood tax is only the first attack that it has to fight off.

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European leaders say if Britain blocks the tax, they will still

:19:37.:19:41.

impose it on the eurozone. That could lead to an ironic twist.

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Business now done in Frankfurt will come to London, enriching the City,

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at Germany's expense. Joining us from Berlin is Peter Altmeier,

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Angela Merkel's Chief Whip in the German parliament. Mr Altmeier,

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have you estimated how much this tax would raise? No, we have no

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estimation made so far, we are in the beginning of talks in Brussels,

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together with 27 partners and friends, on what we could do, in

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order to respond to the growing demand of people for a better and

:20:19.:20:23.

more efficient regulation of financial markets. The financial

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transaction tax is one possible answer, and it is currently under

:20:28.:20:32.

debate. Do you know how many jobs will be lost as a consequence of

:20:32.:20:40.

the imposition of the tax? I don't believe too many jobs would be lost.

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According to the European Commission estimates half a million.

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There are people claiming that a lot of jobs have been lost as a

:20:51.:20:57.

consequence of a misuse of high frequency trades, and therefore, we

:20:57.:21:02.

believe, that this tax could deprivilege high-frequency trade,

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it could make traditional trade form some more attractiveness. This

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is why we are arguing in favour of this tax. And we are supported in

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doing so by the European Commission in Brussels, and by many NGOs

:21:17.:21:19.

worldwide. You accept this tax would affect Britain more severely

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than any other country in Europe? No, this would certainly depend on

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the details of such attacks, there is a proposal from the commission

:21:31.:21:37.

that says the tax revenue should go to the EU budget, but I'm pretty

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much convinced this is something that could be negotiated. I accept

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the argument that London is an enormous stock market. By the way,

:21:48.:21:58.
:21:58.:22:00.

the EU commission's proposal does not consider the stock market

:22:00.:22:05.

concerns, it stays every citizen in the EU should pay the tax. Then we

:22:05.:22:08.

could agree that the tax money goes to the national budget of the

:22:08.:22:10.

country's concerned, this is something that is discussed in

:22:10.:22:14.

Germany as well. That is exceptionally generous of you, are

:22:14.:22:18.

you saying the British charl doesn't know what he's --

:22:18.:22:21.

Chancellor doesn't know what he's talking about? There is an on going

:22:21.:22:27.

debate in the UK, as I have learned from this introduction on TV.

:22:27.:22:31.

you are obviously, for give me, you are misinformed, the British

:22:31.:22:35.

Chancellor, and his coalition partners have made it abundantly

:22:35.:22:39.

clear they will not contenace this tax, because of the damaging effect

:22:39.:22:42.

it will have on the British economy. There is no debate within the

:22:42.:22:49.

Government about that at all. is a debate in the UK, if there is

:22:49.:22:52.

a supposition of the Government, then it will be certainly explained

:22:52.:22:57.

in one of the next ECOFIN meetings. That means there is no chance of

:22:57.:23:02.

applying it to the entire European Union, and this would mean that we

:23:02.:23:07.

would consider introducing it within the eurozone. That would be,

:23:08.:23:11.

from a legal point of view, perfectly possible, you have argued

:23:11.:23:16.

it could lead to a loss of money in Frankfurt, that would then go to

:23:16.:23:21.

the UK, we think there are arrangements possible to make sure

:23:21.:23:26.

that the money will remain in the country where the trade is made,

:23:26.:23:30.

and the financial transaction is made, we do not believe so many

:23:30.:23:35.

financial transactions would be moved to other countries. When your

:23:35.:23:39.

colleague says that he's surprised that the British Government should

:23:39.:23:43.

be defending the British interest, and you can't do that, and you

:23:43.:23:49.

won't accept it, the Germans won't accept it, what does he mean?

:23:49.:23:57.

that was obviously not a correct translation. He meant, every

:23:57.:24:01.

country, of course, can defend its own national interest, that is what

:24:01.:24:07.

all the countries are doing all the time. But in most of the cases we

:24:08.:24:12.

are stronger when we act together on an international scale. We are

:24:12.:24:17.

much stronger nationally when we come to common solutions at the

:24:17.:24:21.

European level. This is the experience of more than 60 years of

:24:21.:24:25.

European integration, and therefore, we still hope that we could

:24:25.:24:33.

negotiate a common solution for everybody. If this is not possible,

:24:33.:24:36.

because the United Kingdom would prefer to stay away, then it would

:24:36.:24:40.

be up to the countries of the eurozone to consider whether they

:24:40.:24:44.

could do something together. Good luck to you.

:24:44.:24:47.

Thank you for joining us. The British economy may be in trouble,

:24:47.:24:52.

but at least it is not in the state of some place like the Democratic

:24:52.:24:56.

Republic of Congo, where the average worker earns something like

:24:56.:24:58.

�30-�40 a month. Yet an investigation by this programme and

:24:58.:25:03.

the Guardian has discovered that in American, so-called vulture fund,

:25:03.:25:08.

is planning to extract a small fortune from the Congo. Previous

:25:08.:25:12.

Newsnight reports on vulture funds that buy up debt cheaply and sue

:25:12.:25:15.

developing countries for vast amounts, got the law of this

:25:15.:25:19.

country changed. Is the vultures cannot now use UK courts. As we

:25:19.:25:26.

report, they found a way round the ban by filing lawsuits in Jersey.

:25:26.:25:36.
:25:36.:25:39.

This report begins in the Democratic Republic of Congo.

:25:39.:25:49.
:25:49.:25:51.

We're heading out of the capital, Kinshasa. A kol letter ra epidemic

:25:51.:25:58.

is -- cholera epidemic is sweeping the country. I'm driving to where

:25:58.:26:02.

people are being treated. This is a nation recovering from years of

:26:02.:26:09.

civil war. This is a cholera treatment centre, set up in

:26:09.:26:16.

Kinshasa. They have already treated 8,000 cholera patients, including

:26:16.:26:20.

this 11-year-old. TRANSLATION: had cholera, but now he's better.

:26:20.:26:27.

It is simple, what's needed here is clean water. The question is, why

:26:27.:26:32.

don't they have it? Here is what's happened, a financial speculator,

:26:32.:26:38.

known as a vulture, has blocked Congo from receiving $100 million

:26:38.:26:42.

owed to the African nation. He says that money is owed to him. In this

:26:42.:26:49.

village, the British Government and UNICEF dug a well, at a cost of

:26:49.:26:53.

less $2,000, they were able to provide clean warlter, cholera-free

:26:53.:27:00.

water for 4 -- water, cholera free water for 400 people. That still

:27:00.:27:05.

leaves millions of Congalese without clean water. The vulture

:27:06.:27:12.

paid $3 million for the debt, he wants $100 million in return for it.

:27:12.:27:17.

I asked the UNICEF what $100 million could do here? 200,000

:27:18.:27:27.

children have their lives saved. Colour dollar 100 mill -- $100

:27:27.:27:32.

million dollars, 200,000 lives sent. How did a New York vulture end up

:27:32.:27:37.

claiming $100 million on a $3 million debt from one of the

:27:37.:27:40.

world's poorest countries. The story began 30 years ago when

:27:40.:27:43.

Yugoslavia built power lines for the Congo. They hadn't finished

:27:43.:27:51.

paying for the lines, and Congo and Yugoslavia slipped into civil war.

:27:51.:27:55.

100,000 died, as Yugoslavia split into seven separate countries, and

:27:55.:28:01.

millions died in Congo. Some how, in all this mayhem, vulture

:28:01.:28:05.

speculators obtained the right to collect that power line debt owed

:28:05.:28:11.

by the Congo. The vulture paid $3 million, but wanted back more than

:28:11.:28:17.

30-times that amount. I have come here, to Sarajevo, the centre of

:28:17.:28:21.

another bloody conflict to find out how the vultures got their hand on

:28:21.:28:23.

the debt. I have obtained information that the two key

:28:23.:28:28.

players are these men, first, an American, Michael Sheehan, and

:28:28.:28:36.

second, Bosnia's own former Prime Minister, Nedzad Brankovic. The

:28:36.:28:40.

pylons for Congo were made here, at the state-owned company called

:28:40.:28:43.

Energo Invest. The company once was the powerhouse of the Bosnian

:28:43.:28:47.

economy. Now police are investigating how its assets were

:28:47.:28:51.

striped, leaving the company in ruins, and thousands unemployed.

:28:51.:28:56.

Ten years ago, the state-owned company was being run by Mr

:28:56.:29:00.

Brankovic. He became Prime Minister, but had to quit after he was

:29:00.:29:06.

indicted for corruption. Drew Sullivan and his team at the Centre

:29:06.:29:09.

for Investigative Reporting in Sarajevo, are the one that is took

:29:09.:29:14.

down the Prime Minister. It has cost him his job as Prime Minister.

:29:14.:29:19.

How? The Government bought this apartment for $240,000, and said he

:29:19.:29:22.

didn't need it and he bought it off the Government for a low price.

:29:22.:29:30.

much did he pay? $800. $800, so wait, the Government paid $240,000,

:29:30.:29:35.

a week later he picks it up for $800. Is that considered corruption

:29:35.:29:39.

here? Well they indicted him for it. Brankovic was indicted, but the

:29:39.:29:45.

case had to be dropped last year after all the paperwork

:29:45.:29:49.

mysteriously disappeared. But at the same time as Mr Brankovic was

:29:49.:29:53.

buying state property on the cheap, he was also talking about the old

:29:53.:29:58.

Congo debt with a culture. This is the man, Michael Sheehan, familiar?

:29:58.:30:03.

He's the first vulture we exposed back in 2007, the man who called

:30:03.:30:13.
:30:13.:30:18.

himself after a James Bond villain, Goldfinger. # Goldfinger

:30:18.:30:21.

Newsnight exposed how Goldfinger squeezed millions out of Zambia, it

:30:21.:30:27.

turns out he also targeted Congo. In 2001, he signed a deal with the

:30:27.:30:32.

Bosnian Brankovic's people, to see if he could get a cut. A

:30:32.:30:37.

transaction was more than suspect. Time to see the cops, this is the

:30:37.:30:42.

office of the chief of a the financial police. We obtained a

:30:43.:30:48.

police report, never before made public. It says Brankovic secretly

:30:48.:30:53.

arranged to sell Goldfinger's friends the debt, for just $3

:30:53.:30:58.

million, and this was a crime. Was it illegal for Brankovic to sell

:30:58.:31:04.

the debt off to the vultures? TRANSLATION: Of course it is

:31:04.:31:09.

illegal. That's why we filed a criminal complaint. This crime is

:31:09.:31:14.

abuse of power. We have identified the criminal intent, the elements

:31:14.:31:23.

of the crime, and who did it. why would Brankovic do this, what's

:31:23.:31:29.

his motive? TRANSLATION: We ask ourselves that too. Every crime has

:31:29.:31:38.

a motive, did you find any evidence of a motive? TRANSLATION:

:31:38.:31:45.

something is worth 100,000 euro, and you sell it for 15,000, you

:31:45.:31:50.

tell me what's happening there. Brankovic is convicted, can he go

:31:50.:31:54.

to jail for this crime? TRANSLATION: He must, he should go

:31:54.:32:02.

to jail. Vultures swooped on Congo in its

:32:02.:32:07.

darkest hour, as it descended into civil war. One week after

:32:07.:32:14.

Goldfinger got his hands on the debt, the President was

:32:14.:32:17.

assassinated Six other nations invaded Congo, and millions were

:32:17.:32:21.

dead. So there was no real Government of Congo and no-one to

:32:21.:32:25.

argue Congo's case when the vultures sued. So they were easy

:32:25.:32:32.

prey for the vultures, vultures like to hunt in packs and work

:32:32.:32:38.

together. Goldfinger slipped the Congo debt to his friend, in return

:32:38.:32:48.
:32:48.:32:49.

for a commission of $500,000. Then, the story switches from Congo to

:32:49.:32:57.

the real heart of darkness, New York City. Home of FG Hemisphere.

:32:57.:33:01.

FG attempted to grab the diplomatic buildings of the Congo, but a judge

:33:01.:33:06.

said, no. As American courts started to resist the vulture's

:33:06.:33:10.

demand, they began to go after any company, anywhere in the world,

:33:10.:33:15.

that traded with Congo. China refused to let them sue China

:33:16.:33:19.

Railways, Britain brought in a new law after we exposed the vultures.

:33:19.:33:25.

But they found a loophole, in a surprising place. They realised the

:33:25.:33:28.

law doesn't apply in places such as Jersey and Guernsey, places often

:33:28.:33:33.

seen as tax havens, and where lots of money is held. They realised

:33:33.:33:38.

there was money there held by Congo, they have sued for the $100 million

:33:38.:33:43.

in Jersey. They have won that case. Congo has appealed to the Privy

:33:43.:33:47.

Council in London. Little hope there, the law is the law.

:33:47.:33:54.

Loopholes and all. But there is one hope for Congo, before the vul s --

:33:54.:33:57.

vultures can swoop in and grab the cash. The Jersey Government has

:33:58.:34:01.

brought in a consultation considering the law. I'm heading

:34:01.:34:04.

out there next week to talk with the Government and meet with

:34:04.:34:07.

concerned citizens pushing for the law to be adopted. If it is passed

:34:07.:34:12.

in time, before the final appeal, then the $100 million for the Congo

:34:12.:34:17.

could still be saved. If Jersey doesn't act, instead of the $100

:34:17.:34:22.

million going to the Congo, the poor nation's money will end up

:34:22.:34:30.

here, and 300 Calab Avenue in Brooklyn New York, the address of

:34:31.:34:38.

the vultures' fund, FG hams fear. It seems to be a garage. FG's owner

:34:38.:34:42.

is Peter Grossman. Hello, do you think it is fair your vulture fund

:34:42.:34:48.

has sought $100 million from the Congo. I do. For a debt you paid

:34:48.:34:52.

only $3 million for. That is not true. We had seen the Bosnian

:34:52.:34:58.

police documents that said Mr Grossman's company had paid $3.3

:34:58.:35:02.

million for the debt and it was illegally sold to them. Do you know

:35:02.:35:05.

the transfer of the debt to you was called a crime by the police, are

:35:05.:35:10.

you familiar with that? No I'm not. I'm not familiar with it, I'm not

:35:10.:35:16.

beating up the Congo, I'm collected on a legitimate claim. The $100

:35:16.:35:21.

million is better for you, rather than UNICEF who thinks the money

:35:21.:35:24.

could save 200,000 lives. This guerrilla journalism doesn't work

:35:24.:35:30.

for me. Back in the Congo, school kids are

:35:30.:35:35.

waiting for their school to get clean water. Maybe even desks or

:35:35.:35:41.

chairs. What's your favourite subject? Mathematics, and French.

:35:41.:35:47.

This is Congo's hope, this is Congo's future, unless, of course,

:35:47.:35:57.
:35:57.:35:57.

the vultures snatch it away. The former speaker of the US house of

:35:57.:36:01.

representatives, Newt Gingrich, has admitted to taking money from the

:36:01.:36:03.

mortgage company, Freddie Mac, owned by the US Government. He said

:36:03.:36:07.

it was for strategic advice. He demonstrated why the Republican

:36:07.:36:11.

party needs a Washington battery hen like him, as its candidate for

:36:11.:36:14.

the presidency. Increasing numbers of Americans seem to agree that he

:36:14.:36:19.

might be the man for the job. Mind you, after the comedy performances

:36:19.:36:24.

of some of the other hopefuls, you can almost see their point. This is

:36:24.:36:31.

a vintage season for pratfalls. Live from the Reagan Library.

:36:31.:36:35.

man who wants to be President is either an egomaniac, or crazy, said

:36:35.:36:42.

the great Republican, and President, Eisenhower. He's still right, six

:36:42.:36:46.

deck taids later. Ladies and gentlemen the Republican candidate

:36:46.:36:50.

for President of the United States. Rick Perry is floping, Mcihelle

:36:50.:36:55.

Bachmann is fading, and the less said about the Herman Cain

:36:55.:37:00.

phenomenon, the better. What is it about the grand old party. I don't

:37:00.:37:05.

even know who this woman is. First off, Herman Cain, previously best

:37:05.:37:14.

known as the boss of Godfather's Pizza. A man of multiple talents.

:37:14.:37:22.

Imagine there's no pizza But geopolitics isn't one of them.

:37:22.:37:32.
:37:32.:37:34.

OK Libya. Um, I do not agree with the way he handled it for the

:37:34.:37:38.

following reason, um, no, that's a different one. That video comes on

:37:38.:37:44.

top of other displays of his grasp of policy details. We won't go into

:37:44.:37:50.

details of other alleged grasps. Nor his Chief-of-Staff's taste for

:37:50.:37:54.

blowing smoke in his latest campaign video. Together we can do

:37:54.:38:02.

this, we can take this country back. # I am American

:38:02.:38:05.

# One voice # United we stand

:38:05.:38:10.

Then there is Rick Perry. What you find are some values that are

:38:10.:38:18.

branded in my heart. The ho-down- loving, Clint Eastwood figure, in

:38:18.:38:24.

more ways than one, reminiscent of the last Texan export. There is an

:38:24.:38:32.

old poster out west that says "wanted dead or alive". The general.

:38:32.:38:37.

And the Prime Minister of India? The new Prime Minister of India is

:38:37.:38:42.

uhhh, no. Maybe it's something in the Texas

:38:42.:38:47.

water, here's Perry on big Government. I would do away with

:38:47.:38:57.

the education, commerce, and let's see, I can't, the third one I can't,

:38:57.:39:00.

sorry. Oops.

:39:00.:39:09.

Putting your foot in it is an equal opportunities opportunity. Mother,

:39:09.:39:14.

moose hunter, maverick. Sarah Palin's CV didn't include

:39:14.:39:19.

geopolitics either. You can actually see Russia from land here

:39:19.:39:23.

in Alaska. She turned out, not exactly, a policy wonk. I will try

:39:23.:39:30.

to find you some and I will bring them to you. Winsomeness winds over

:39:30.:39:37.

wonky every time, but it costs. Mcihelle Bachmann, once the Sarah

:39:37.:39:42.

Palin of the day, has reportedly gone through six chiefs of staff,

:39:42.:39:46.

five press secretaries, five legislative directors and three

:39:46.:39:51.

communications directors since winning a seat in Congress in 2006.

:39:51.:39:57.

It is from the smoldering ashes of these whispers and brain freezes

:39:57.:40:01.

that Newt Gingrich has reemerged. Years inside Washington mean he can,

:40:01.:40:05.

at least, claim to know which way is up. There are still others in

:40:05.:40:08.

the race for the Republican nomination, but it is November, and

:40:08.:40:18.
:40:18.:40:20.

the Prime Minister rees are now only weeks away. Glrb the primaries

:40:20.:40:27.

are only weeks away. We have our guests with us now.

:40:27.:40:35.

Why does do these gaffs happen? think there is an amount of

:40:35.:40:39.

preparedness that hasn't been taken. Those things happen. Sometimes we

:40:39.:40:42.

underestimate, as political people, we underestimate just what will

:40:42.:40:52.

happen if we do have a gaffe. You repeat them over and over again, it

:40:52.:40:55.

was a slice of the candidates, you repeat them over and over again,

:40:55.:41:00.

they really never die. That is one of the things, we underestimate the

:41:00.:41:06.

power of that gaffe as the media plays it over and over again. We

:41:06.:41:10.

underestimate the responsibility that we have to be prepared for

:41:10.:41:13.

these debates. When you're unprepared for the debate, those

:41:13.:41:19.

kinds of things happen, but also, I think, that there is an

:41:19.:41:25.

understaipgs of the power of just being out there, that overexposure

:41:25.:41:29.

to the media. These candidates want to go to the grass roots. Do they

:41:29.:41:39.
:41:39.:41:41.

matter? Yes, calling it unpreparedness is selling it short.

:41:41.:41:45.

The reason Perry couldn't remember the third thing he wanted to

:41:45.:41:50.

eliminate in the Government is because he doesn't care, he

:41:50.:41:53.

memorised things. These things should be so deep in your soul when

:41:53.:41:57.

running for President you don't forget them. They are throwing out

:41:57.:41:59.

red meat to a certain kind of supporter. They are not thinking

:41:59.:42:03.

about what people care about. People care about corporate

:42:03.:42:06.

ownership of our elections, not about destroying the Department of

:42:06.:42:09.

Education. Does anyone think there is too much education going around,

:42:09.:42:14.

is that really the problem. Do you think there is also an element,

:42:14.:42:19.

perhaps, of some more statesman like Republicans staying out of the

:42:19.:42:25.

race this time? I don't think so, what we have seen is a field of

:42:25.:42:31.

really people who are able to carry this banner and to go up against

:42:31.:42:34.

President Obama. I think that we have some good talent, I just think

:42:34.:42:39.

that we have got an overexposure problem here with too many people

:42:39.:42:44.

being critical, rather than actually saying to these people

:42:44.:42:52.

thank you for stepping up and being patriots. Is over exposure when

:42:52.:42:56.

people find out you are wrong, is that what it means? No over

:42:56.:43:00.

exposure means that when you have too many debates, especially a good

:43:00.:43:03.

debate is not necessarily good television. What we have here in

:43:03.:43:08.

America is good television, rather than good debating. We really need

:43:08.:43:12.

to let these folks talk about the things, the issues that really

:43:12.:43:16.

matter, our homes, our jobs, the price of gasoline that goes in our

:43:16.:43:19.

car every day. Those are the things that the American people really

:43:19.:43:25.

want to hear about and what is happening is 30-second soundbites

:43:25.:43:29.

in the debates. I agree with you, every time these people speak is

:43:29.:43:33.

when these things come out. When Mcihelle Bachmann said the founding

:43:33.:43:37.

fathers worked tirelessly to end slavery, eventhough the founding

:43:37.:43:41.

fathers had slaves. She expects us to believe that Washington looked

:43:41.:43:47.

out his front window every day and went "why won't you leave!" it is

:43:47.:43:51.

preposterous they expect us to believe this stuff. Part of it is

:43:51.:43:55.

the appearing to be human. I wonder in this job if you want someone who

:43:55.:44:00.

can simulate being a normal human being, or someone who is a normal

:44:00.:44:04.

human being, it is an unnatural thing to want? It is not natural at

:44:04.:44:09.

all. I think what we have here is the first fully railised reality

:44:09.:44:17.

show campaign for the presidency. These are a stage full of bubble-

:44:17.:44:20.

headed Gibraltar-twits, it is aamazing. Even the stuff that

:44:20.:44:25.

aren't gaffes, not believing in he have illusion, it is amazing. And -

:44:25.:44:31.

- he have illusion, it is amazing. If I was up there with many cross-

:44:31.:44:36.

eyed hot dog salesmen I wouldn't believe in he have illusion either.

:44:36.:44:39.

It is very easy for someone to stand on the outside of this

:44:39.:44:49.
:44:49.:44:52.

process and make fun and mock and make a joke out of it. It is hard

:44:52.:44:56.

to be real when only given 30 seconds. One of the candidates only

:44:56.:44:59.

got 86 seconds of air time in the last debate. It is difficult to

:44:59.:45:04.

when you are trying to get a point across in that short time.

:45:04.:45:09.

Quit gander at some of tomorrow morning's front pages. The Guardian

:45:09.:45:13.

goes with the awful economic prospects after the Bank of England

:45:13.:45:23.
:45:23.:45:36.

That's it for now, a select few citizens tomorrow will be able to

:45:36.:45:43.

spend the evening in the company of Emily Maitless, before she puts on

:45:43.:45:53.
:45:53.:46:15.

Most of us will see sunshine eventually tomorrow. First thing,

:46:15.:46:19.

it could start off pretty grey. The rain easing from North West

:46:19.:46:22.

Scotland. We will see sunny spells developing across most of England

:46:22.:46:25.

and Wales. Rain may return to Northern Ireland later on. Sunny

:46:25.:46:29.

spells for the afternoon across most of northern England and the

:46:29.:46:33.

Midlands, temperatures up to 13 in Birmingham. Parts of East Anglia

:46:33.:46:37.

and the south-east will stay glum. Late sunshine in London, we may

:46:37.:46:41.

reach 14 Celsius. Sunny skies for most of the day across the far

:46:41.:46:46.

South-West of England. In Cornwall the breeze Ince crease and cloud

:46:46.:46:53.

spilling in. Elsewhere across Wales dry and bright, sunny spells

:46:53.:46:56.

throughout. Some sunny spells across Northern Ireland early on,

:46:56.:47:00.

grey here with wet and windy weather spilling in for the

:47:00.:47:03.

afternoon. Some rain trickling back into South-West Scotland. Northern

:47:03.:47:06.

Scotland starting damp. Here it should brighten up by the afternoon.

:47:06.:47:10.

More rain to come on Friday, across parts of western Scotland and

:47:10.:47:14.

Northern Ireland. Even so, with the wet and windy weather it will be

:47:14.:47:18.

mild, temperatures above average. Much of England and Wales will be

:47:18.:47:22.

dry and brighter were we get the sunshine. Temperatures on Friday,

:47:22.:47:28.

may well reach 15 degrees. A brisk breeze growing, cloudy skies and

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Presented by Jeremy Paxman.

As the Bank of England Governor Sir Melvyn King cuts the UK economic growth forecast to just 1%, what options for manoeuvre does this leave Chancellor George Osborne?


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