21/11/2011 Newsnight


21/11/2011

In-depth news analysis. David Cameron vows to restart the housing market. Jeremy Paxman finds out what this means, particularly for first-time buyers.


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Transcript


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At the whiff of tear ga, the politicians supposedly ruling Egypt

:00:08.:00:12.

decided to quit their post, after three days of protests in Cairo,

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the cabinet there resigned en masse tonight. The army, now has full

:00:16.:00:22.

charge of the state. Our reporter has been in Cairo throughout the

:00:22.:00:24.

protests. The last teargas attack on this street was just a few

:00:25.:00:29.

minutes ago, and everyone is expecting more. The fate of the

:00:29.:00:33.

revolution these people now feel hangs in the balance. Popular

:00:33.:00:38.

dissent drove Mubarak from power, can it do the same with the current

:00:38.:00:42.

military regime. Once building house was a boast of Government.

:00:42.:00:50.

Built in 12 weeks for less than �1,000 each. These houses seem one

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answer to the housing problem. taxpayer backing for mortgages

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bring a new housing boom. We will ask the Housing Minister if he's

:00:57.:01:02.

the palest shadow of Harold Macmillan, and ask the boss of the

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CBI if it will help. Cometh the hour, cometh the mystery

:01:09.:01:13.

writer, we talk to Umberto Eco about history and Europe. Does he

:01:13.:01:21.

fancy a new role in the new Italian technocy. If I was invited by Mr

:01:21.:01:31.
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Monti, probably, yes. A few hours ago the cabinet in

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Egypt said they were resigning, their bosses in the army have

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tkwrot say if they will accept that resignation. The Arab Spring has

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lurched from apparent freedom to bloody crackdown. Mortuary

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officials talk of 33 people killed since Saturday and 1800 wounded.

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Our reporter has spent the last several days in Tahrir Square in

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Cairo. What is going on? As you say, Tahrir Square now full of tense of

:02:05.:02:09.

thousands of people. More have been -- tens of thousands of people.

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More have been arriving this evening. We have heard the

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announcement that the Government has tendered its resignation. We

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don't know if Egypt's rule of the Supreme Council of the armed fores

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are accepting that or not. The real dilemma now for the Armed Forces is

:02:24.:02:28.

what alternative cabinet will they possibly find. The anger on the

:02:28.:02:32.

streets is so intense that I think few other people, technocrats,

:02:32.:02:35.

politicians or civilians will be prepared to take on that job,

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unless they are given considerably more power. Because the current

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cabinet, the resigning cabinet really has been a puppet of the

:02:42.:02:47.

Armed Forces, that is why it has been so discredited. So, on the one

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hand, the army doesn't want to give civilians more power, it is afraid

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that will damage its interests. On the other hand, it desperately

:02:55.:03:00.

needs civilians as a figleaf, otherwise anything bad that happens

:03:00.:03:06.

is blamed on the army itself. there a Government tonight? Well,

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we just don't know. And the army has itself in this terrible dilemma,

:03:12.:03:16.

because it isth has allowed or ordered the violence, and it is --

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because it has allowed or ordered the violence. It is the latest in

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the whole ineptitude that the supreme commander of the Armed

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Forces has shown since the beginning of things, that Egypt has

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lurched from crisis to crisis. At the beginning of the month, most of

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the political forces were principally concentrating on

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campaigning for the parliamentary elections, which are still due next

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week. Then suddenly the whole political agenda has been thrown

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off kilter by the announcement, that didn't come now, by the army

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that it was seeking super- constitutional privilege that is

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would put it above the oversight of civilians. That has put us to the

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position where Tahrir Square is full of angry people, angry at all

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the latest bloodshed. How have we got to this point? Well, it really

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is just a whole series, I think, of mistakes of this kind, some

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political forces were very keen to see the elections going ahead,

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particularly the Muslim brotherhood, because they think they are going

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to win. But the whole question has been sub sumeed by how long this

:04:42.:04:51.
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transition will last. Presidential elections might not come until 2013,

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and people aren't satisfied, as the death rate increases, people's

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demands are going up, people are now worried simply that the army

:05:04.:05:14.
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intends never to leave the stage. We have been here before, for the

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last three days teargas has billowed over Tahrir Square, rocks

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and petrol bombs from protestors. It is the same fury, in the same

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place, as during Egypt's revolution ten months ago. The revolution that

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overthrew a dictator, and was supposed to hand power to the

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people. Ten months on, the people don't control Egypt. Now they even

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had to battle again to control this one sqare.

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The last teargas attack on this sthreet was a few minutes ago, --

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this street, was a few minutes ago, and more is expected. The fate of

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the people hangs in the balance. If they were worried about the

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attentions of the authorities, they are even more worried now. The

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violence shown by the security forces proves these people believe

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the determination of Egypt's military rulers to hang on to power.

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Exactly what the protestors came back into the sqare to contest.

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TRANSLATION: The Interior Ministry is striking at the people. Are we

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not the people of Egypt, are they different to us. Are we not one

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people. We don't understand what is happening. TRANSLATION: We want to

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thank the military council for protected the revolution, now it

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needs to hand over to a civilian transitional council, to protect

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the Egyptian people. But tending the wounded has had to take

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precedence over politics this weekend. It has been chaos in the

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makeshift hospital behind the sqare. It is an appalling atmosphere in

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which to be planning, in just one week's time, the first round of

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what are meant to be Egypt's freeist elections in years. The

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elections with a bewildering array of candidates that should start the

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transition to democratic country. On Friday, Tahrir Square filled to

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its very edges with demonstrators angry at constitutional amendments

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proposed by the army, that could allow it to override the decisions

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of an elected civilian Government. Marshall Tantawi, the head of the

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army, who has effectively ruled Egypt since Hosni Mubarak was Joan

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thrown is the man they want out, now -- overthrown, is the man they

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want out now. TRANSLATION: The army don't want to hand over their power

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now, it is going on and on. wasn't meant to be like this, ten

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months on, still shouting against a system they thought they had

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overthrown. Tahrir Square became an icon of unity and hope, all around

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the world. But its power has proved to be elusive. Predominating at the

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rally, men with baerdz. Islamists aren't the only force -- beards,

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Islamists aren't the only force that want the army gone, but they

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have the most to lose if democracy is restricted, they know they will

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do best in the elections. In this poor district of southern Cairo,

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the Muslim Brothers have been campaigning hard. Although they are

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well known for their social work, they have a massive lead on those

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who tweeted and blogged the revolution into action. These are

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the candidates of the new revolutionary parties can't dream

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of this, the kind of relationships that come not from the revolution,

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but years of working in local communities. It appeared earlier

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this year that the Brotherhood and the army might form a tactical

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alliance against the liberals. No more, Islamists and liberals are

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united in wanting the old regime dismantled, root and branch, that

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means excluding civilian servants of the dictatorship, former members

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of the President's deposed party. We speak about the people who

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corrupted the political life of Egypt for 30 years. Some call them

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the tailors of laws. They tailor the law to fit with the

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requirements of the regime. Those people are well known. Those people

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should be displaced away from our way to democracy. They should be

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removed. They should be removed. And here they are. Those remnants

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of the old regime. Portrayed as weeping skulls. They are trying to

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avoid being caught, in this internet game, devised by another

:10:08.:10:14.

candidate in the election, the independent liberal, Ahmed Naguib.

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We are reaching out to young people, we know how to get them intrigued

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and deliver a concept through our very simple game. We really need to

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be on our guard and our watch for those Mubarak cronies and thugs all

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the time. Those are the ones who want to bring the nation down. For

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this dream not to be delivered. This evening, thousands more have

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congregated on Tahrir Square. After the army appeared to make a

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concession on those remnants of the dictatorship. It issued a decree to

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bar those who worked to corrupt political life from further

:10:55.:10:58.

political activity. But that wasn't the ban on former ruler party

:10:58.:11:03.

members standing in the elections that most protestors here want. The

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revolutionary, Ahmed Naguib, taking a break from the sit-in, Downing

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Street, after the latest violence, that the army is committed to

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democracy of any kind. This is happening because the military

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wants to hang on to power. If there is a democratically elected

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parliament it will represent the people, while the military council

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is not elected by anyone, and has absolutely no legitimacy, when

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there is a democratically elected Government. The army has told the

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nation the parliamentary elections will take place as planned. But at

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least 22 have died in violence since Saturday. Some way more. And

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as in January and February, people's demands are rising with

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the death toll. Many now say the military should relinquish power

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immediately. On Tahrir Square, they have learned this year, that any

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concession must be wrested from an obs nant state by massive popular

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pressure. That is why so many are staying on the sqare tonight. We

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are ajoined from Cairo by the humam rights activist, who has come from

:12:12.:12:22.
:12:22.:12:24.

Tahrir Square. What is happening in the sqare this evening. What's

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happening this evening? Husbands of thousands are on Tahrir Square now.

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It is only natural that after three days -- hundreds of thousands are

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on Tahrir Square now. It is only natural after three days of killing

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and maiming young Egyptians that Egyptians take to the streets again.

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What do you want to happen next? Frankly speaking, I can't think

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ahead, because over the past three days I have spent most of my time

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in morgues, hospitals and ambulances. I have seen so many

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casualties, so many violations. I am there to monitor the situation,

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but I'm also involved in all the bloodshed. I was at the field

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hospital, a makeshift hospital on the sqare last night at around

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5.00pm, actually, when the army stormed the sqare, and stormed the

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hospital. Army troops came into the hospital harassed the female

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doctors, sexually harassed the female doctors, and then started

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very violent confrontations with the doctors there, trying to take

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out the injured. The doctors stood up and told them you can't take the

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injured. There is no way we're going to allow you to do that. As

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they storm out they throw in teargas cannisters. This started as

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a confrontation between the police and the people, and the army comes

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to the rescue of the police, that is in serious need of much reform.

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Since January we have been saying that for the past nine months. The

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police force has to be reformed. But the army intervenes to support

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the police, that has been killing people, and they kill more people.

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In my direct circle, amongst my friends, three young men lost their

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eyesight. A dentist, an IT specialist, and a journalist. They

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were shot in the face. Rubber bullets are not for shooting young

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people in their faces. These are outrageous crimes. This is what I'm

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concerned about. What happens next? I honestly hope...I Will come to

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you in skaebgd on that question -- a second on that question. As the

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world watches this, we can't get involved can we? We have to be very

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careful. There is a role for signalling to the military very

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clearly that the UK, the US, others, are absolutely dead set on seeing

:15:02.:15:11.
:15:12.:15:12.

the full transition to democracy. But we have to leave it to those in

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Tahrir Square to take the lead on it. There is such a sense of

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conspiracy and nationalism, very understandably in recent months in

:15:19.:15:21.

Egypt, I don't think anyone wants outsiders telling Egyptian what is

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to do at this point. Do you think elections can take place under

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these circumstances? I doubt they will take place. I mean the

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violence that has erupted over the past three days would prevent

:15:36.:15:42.

elections from happening. The activists on the sqare, the young

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revolutionaries on the sqare, the people who started the whole

:15:49.:15:58.

process back in January aren't interested in elections right now.

:15:58.:16:04.

A police force in need of reform, a stepping down of Armed Forces and

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handing over the Government to a civilian Government. This is what

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the people want. This is not about elections. I mean, how could we

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possibly have elections during such violence. There is violence in at

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least five different Governments of Egypt. If the elections were to be

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postponed, they have already been extended in a most extraordinary

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fashion, but if the elections don't take place, where does that leave

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everybody? I think you have got to get back to a legitimate situation

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where people accept that elections, or whatever the vehicle for

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carrying the thing forward is legitimate and representative. We

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have seen it happen in Tunisia, it is possible to do this, it has

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having well carried out elections, producing a majority Government

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with popular support. It really is the fact that power continued to

:16:56.:17:01.

rest in the hands of a military who are commercially very self-

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interested in Egypt, have had a long-time status that they were

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reluctant to give up. That all has to be challenged. Sadly, things

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ended in Tahrir Square, the first time round, before that had

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happened. Do you think you were niave in believing that the

:17:18.:17:26.

military would give up power? were niave when we cheered the

:17:26.:17:34.

military when they came to Tahrir Square back in January and February.

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Now it is not about beg niave. It is about the people and what they -

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- about being niave, it is about the people and what they want and

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what they have accepted, after recent events. This is not the

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first such attack from the military on civilians. Last month they were

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responsible for massacre. Yesterday, for the second time, they are

:17:57.:18:05.

killing civilians. Most political forces in Egypt will not accept a

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continuation of military rule. There has to be a handover.

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Sooner or collateral. The longer it drags on the more violent it will

:18:15.:18:21.

become, that is my personal opinion. It is quite possible that the

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victors at the end of this will be the Muslim Brotherhood, the

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Islamists in general. Is that an outcome that? We have seen in

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Tunisia, the Muslim Brotherhood do very well. But a Muslim Brotherhood

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committed to democracy, committed to a genuine pluralistic Tunisia

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going forward. I think the longer it goes, the more radical the

:18:47.:18:52.

outcome. There is no doubt about that. I think it is critically

:18:52.:18:57.

important that everybody outside Egypt, who wishes Egypt well, is

:18:57.:19:01.

very clear that the democratic will of the country must be respected.

:19:01.:19:08.

That's the outcome we must arrive at. Thank you both very much indeed.

:19:08.:19:13.

Need the money to buy a house? Come to the bank of Dave and Nick,

:19:13.:19:23.
:19:23.:19:25.

otherwise known as the ticks pair. Under plans announced -- known as

:19:25.:19:29.

the taxpayer. Under plans announced today spending on house building

:19:29.:19:31.

will stimulate the economy generally. A week tomorrow the

:19:31.:19:37.

Chancellor will tell us how bad things really are in that seasonal

:19:37.:19:45.

lament, the autumn statement! It used to be that the bricks

:19:45.:19:48.

virtually flew up, houses sold before the roof was on, happenyo

:19:48.:19:54.

days for the builders and happy -- happy days for the builders and the

:19:54.:19:58.

first time buyers able to live the dream on nothing down. Oh how times

:19:58.:20:02.

have changed. It is back to 20s for the level of peacetime house

:20:02.:20:07.

building, back to the 1970s for the first time buyers. And one of the

:20:07.:20:11.

few areas experiencing a housing boom is the local authority waiting

:20:11.:20:14.

list. You can always spot a politician on a building site, they

:20:14.:20:20.

are the ones who want to do without the high-vis jacket and the hard

:20:20.:20:23.

hat. The policy they want to be high-visibility, and insist it

:20:23.:20:28.

couldn't be more hard headed. The only visible policy difference on

:20:28.:20:33.

view today between the coalition partners was whether to tuck or not

:20:33.:20:38.

to tuck. There are so many people in overcrowded homes and on housing

:20:38.:20:44.

waiting lists, we want to get Britain building. Why housing

:20:44.:20:47.

building has been so low is because of the credit crunch, the banks

:20:47.:20:52.

don't want to lend and the builders can't build and the housing market

:20:52.:20:55.

is stuck, and we are determined to unstick the market to get the

:20:55.:20:58.

market moving. What we are doing today is a whole set of things to

:20:58.:21:02.

kick start the housing market. we got today was a lot of neatly

:21:02.:21:07.

named funds, for a start there is �400 million for the Get Britain

:21:07.:21:11.

Building, that is designed to get finance to builders to finish off

:21:11.:21:15.

stalled projects. There is �30 million for the custom homes

:21:15.:21:19.

problem, that is to help self- builders get finance. There is �500

:21:19.:21:23.

million for the Growing Places Fund, to improve infrastructure like

:21:23.:21:28.

roads to unlock the development of particular areas. Then there is the

:21:28.:21:32.

accelerator release of public sector land, �100 million to bring

:21:32.:21:36.

back empty prorpbts into use. And most controversially, a mortgage

:21:36.:21:39.

indemnity scheme. What this means is the Government will underwrite

:21:39.:21:43.

first time buyer mortgages for new build properties. Meaning the

:21:43.:21:48.

buyers won't need to come up with anything like as big a deposit. As

:21:48.:21:51.

you can imagine the house builders rather like the plan. Not least

:21:51.:21:55.

since it was their idea. If the lenders won't lend. Meaning the

:21:55.:21:58.

buyers can't afford to pay the prices, there is a solution in

:21:58.:22:01.

market. It may not be one you or your members particularly relish,

:22:01.:22:06.

it is that the price of those properties has to come down?

:22:06.:22:11.

don't think that will solve the problem, it is the deposit gap.

:22:11.:22:17.

Let's take extreme example, let's sae say the average house price is

:22:17.:22:23.

�200,000 and there is a 25% deposit, the vast majority of people can't

:22:23.:22:29.

afford �50,000, they can't afford �25,000 even if the price halves.

:22:29.:22:33.

All the element of the initiative provides support for house builders

:22:33.:22:37.

rar than buyers. The market at the moment looks -- rather than buyers.

:22:37.:22:40.

The market looks like it will faurblgs you have zero interest

:22:41.:22:45.

rates, at some point they will go up, the earnings to house price

:22:45.:22:49.

ratio is out of whack. This is not a good time for a first time buyer

:22:49.:22:54.

to step into the market. That time will come. The best thing a first

:22:54.:22:57.

time buyer can do at the moment is not to be a first time buyer but to

:22:57.:23:02.

be a renter and wait. If you were mildly cynical you might say it has

:23:02.:23:06.

nothing to do with the first time buyer and everything to do with the

:23:06.:23:10.

cashflow problems for builders. Government involvement in the

:23:10.:23:16.

housing market doesn't have the best record, the US Government

:23:16.:23:19.

sponsored funds Frannie Mae and Freddie Mac went bust, US tax-

:23:19.:23:22.

payers still don't know how big the bill there will be. In this country,

:23:22.:23:27.

even the governor of the Bank of England, has previously warned

:23:27.:23:30.

against Government underwriting mortgage loans. Why should the tags

:23:30.:23:34.

pair take on the risk of borrowing from individual borrowers, some of

:23:34.:23:40.

who are risky, it is the lenders who should take the risk, and

:23:40.:23:45.

assess the risk on lending. We saw in 2007 not enough attention was

:23:45.:23:49.

paid to monitor the risk of the lending. We don't want to tell

:23:49.:23:53.

lenders that it doesn't matter if they monitor the riskiness, the

:23:53.:23:57.

Government will guarantee it. problem we have now has to be

:23:57.:24:00.

addressed. There are deep-seated difficulty, of that there is no

:24:00.:24:04.

doubt. But the Government's mismanagement of the economy, and

:24:04.:24:09.

housing policies, have made the situation far, far worse. The

:24:09.:24:14.

Government inherited from Labour, a growing economy, and on housing,

:24:14.:24:18.

there were two million homes built under Labour, half a million of

:24:18.:24:25.

them were affordable. Having dewe willied, the PM and his

:24:25.:24:31.

deputy med -- met some happy buyers. It is hoped these measures would

:24:31.:24:35.

get the housing market moving and stimulate much-needed growth. There

:24:35.:24:38.

is so much uncertainty around what sort of housing market or what sort

:24:38.:24:42.

of economy we will have when the next generation is looking to put

:24:42.:24:52.
:24:52.:24:52.

down roots. That is anybody's guess. Do you recognise this, high levels

:24:53.:24:55.

of public and private debt are proving a drag on growth,

:24:55.:24:59.

undermining the case for adding to the national burden of debt with

:24:59.:25:03.

even more borrowing. You know who that was, of course, that was the

:25:03.:25:06.

Prime Minister today, your leader. Why do you propose to increase the

:25:07.:25:10.

burden of debt? No-one is saying people shouldn't take on mortgages

:25:10.:25:16.

to get a home. You and I presumably have one. It is thought we have far

:25:16.:25:20.

too much private debt as well as public debt? You and I presumably

:25:20.:25:24.

have had mortgages, I still have one. We have the ability to get on

:25:24.:25:28.

to the housing ladder, this current generation is completely locked out

:25:28.:25:32.

of the housing market. You are in favour of increasing private debt?

:25:32.:25:35.

Nobody is saying nobody should not take on mortgage, the Prime

:25:35.:25:38.

Minister was not saying that, clearly. Do you think house prices

:25:38.:25:42.

are too high? I think house price stability is the key. Do I think it

:25:42.:25:45.

is too expensive, definitely. would like housing to become

:25:45.:25:48.

cheaper? I think the house price stability would make housing more

:25:49.:25:53.

affordable, it should be. If you go back only 10-15 years, houses would

:25:53.:25:56.

have been three times the salary, now they are seven or eight times

:25:56.:26:00.

the salary, that is a problem. do think the house of pricing is

:26:00.:26:04.

too high? I have been clear is not you need for it to do is to

:26:04.:26:09.

collapse back to three times in quick order, what you need is, you

:26:09.:26:13.

need to have a stable housing market, which could still go up in

:26:13.:26:16.

price with inflation, but not as much as average earnings over a

:26:16.:26:19.

long period of time. That would be rational housing market, where

:26:19.:26:24.

people can afford to get on the housing ladder. If house prices

:26:24.:26:27.

drop to the point where they are more affordable and bear a better

:26:27.:26:32.

relationship to income, as used to be. People will find themselves

:26:32.:26:36.

overextended, won't they? I don't think the two things are

:26:36.:26:39.

incompatible. The fact that people in this generation have been unable

:26:39.:26:44.

to get in the housing market. The figure of 37 years old is often

:26:44.:26:48.

quoted. 37 years old being the age which? You can get a home, if you

:26:48.:26:53.

don't have the support of the bank of mum and dad. As the Housing

:26:53.:26:56.

Minister and as a Government, we have spoonsability to today's

:26:56.:27:01.

generation, whilst laifg a long- term and -- responsibility to

:27:01.:27:04.

today's generation whilst having a long-term plan. You have a

:27:04.:27:07.

responsibility to get people into debt? Any mortgage is getting

:27:07.:27:10.

people into debt. You want to help them? I think it is perfectly

:27:10.:27:14.

reasonable if somebody is a good bet for a mortgage for them to be

:27:14.:27:18.

able to access that mortgage at a reasonable rate. Particularly given

:27:18.:27:22.

we have record low rates. You don't agree with Mervyn King do you?

:27:22.:27:26.

said that in 2008, right at the beginning of all of this. You know

:27:26.:27:29.

he has changed his mind since then? I don't think he would have thought

:27:29.:27:33.

that in 2011 we would be living in a world with very little growth.

:27:33.:27:38.

Not just here but worldwide, and actually, you know, nothing much

:27:38.:27:41.

happening in the housing market. I don't think it is right to walk

:27:41.:27:45.

away, I don't think it is right to ignore the potential for economic

:27:45.:27:48.

growth that building more homes brings. You think he has changed

:27:48.:27:54.

his mind? I think times have moved on. He said unambiguously it is no

:27:54.:27:57.

business of Government to get involved in this sort of lending?

:27:57.:28:01.

Let me put it to to you another way. If the Government were only

:28:01.:28:04.

proposing this measure in the housing strategy today, and we were

:28:04.:28:08.

going to have indemties for mortgages, I think there are

:28:08.:28:13.

another 136 measures, many dealing with the supply side, building more

:28:13.:28:17.

homes. If you can build more homes, as well as providing the confidence

:28:17.:28:21.

to get mortgages that people can afford. You put yourself in a

:28:21.:28:25.

better position, which by the way, create jobs and provide a better

:28:25.:28:29.

economy. The target was 120,000 homes last year, what do you want

:28:29.:28:32.

to go to? Any reasonable estimate says we need to be building

:28:32.:28:35.

probably twice as many homes in this country, north to satisfy the

:28:36.:28:45.
:28:46.:28:47.

demand out there. You think you will be able to get it up to the

:28:47.:28:52.

200,000 there? As outlined there, there is an awful lot in there. For

:28:52.:28:55.

the first time ever we marry together the principle that it

:28:55.:28:59.

can't just be about building more homes, the builders aren't building,

:28:59.:29:03.

lenders aren't lending and buyers can't buy because there is a bigger

:29:03.:29:06.

problem than just inability to put houses up right now. You have

:29:06.:29:10.

decided to go for plan B? No, this is plan for growth. Which is what

:29:10.:29:16.

we have always said we wanted to do. It is a good run up to the autumn

:29:16.:29:19.

spending statement. You always wanted to spend public money?

:29:19.:29:23.

are parts to spend public money, not outside the spending envelope

:29:23.:29:26.

we have set out and we know about for the parliament. This is all

:29:26.:29:29.

within that spending. There is another element here, that is to

:29:29.:29:33.

provide confidence to the market place. This is this mortgage

:29:33.:29:37.

indemnity scheme, it is not about spending vast sums of money, it is

:29:37.:29:40.

about guarnteeing, because Government can, as a backstop for

:29:40.:29:44.

mortgages. One final point, do you think you might have done more to

:29:44.:29:47.

address the perceived housing shortage, had you not cut the

:29:47.:29:50.

budget for social housing in the way you have? Just to be clear, we

:29:50.:29:54.

are going to end up building more affordable house anything this next

:29:54.:30:04.

four years. Social housing? Social and affording -- affordable houses,

:30:04.:30:07.

subsidised rental housing, we will build more of that. A lot less than

:30:07.:30:13.

you were planning to under the old plans? No, we have introduced

:30:13.:30:17.

affordable rent, we are building more homes by subs sizing it

:30:17.:30:20.

through a different way -- subsidising it in a different way.

:30:20.:30:25.

We will build a lot more affordable housing, I think it is a good thing.

:30:25.:30:28.

I think the whole principle of a housing strategy is to make sure we

:30:28.:30:31.

are doing everything possible, not just one thing, not just affordable

:30:31.:30:35.

homes, but homes for people at every level of society.

:30:35.:30:39.

With us now is John Cridland, director-general of the CBI, the

:30:39.:30:42.

former Labour Treasury minister, Kitty Ussher is also here, and the

:30:43.:30:47.

editor of City AM Allister Heath. Do you think it is a good idea,

:30:47.:30:52.

Allister Heath? No I don't. There is a very good reason why banks

:30:52.:30:56.

aren't lending up to 125% as they did at the height of the madness,

:30:56.:30:59.

they know they can't do that. If you do that run into trouble. There

:30:59.:31:02.

is two things happening here. The economy is grinding to a halt. A

:31:02.:31:06.

lot of people are starting to lose their jobs. That means some people

:31:06.:31:10.

won't beable to afford their -- won't be able to afford their

:31:10.:31:13.

mortgages. House prices are falling f homes are repossessed, banks

:31:13.:31:17.

could lose money, that is why they are not lending. It is an

:31:17.:31:20.

irresponsible use of public money? It is a dangerous use of public

:31:20.:31:24.

money. I agree house building needs to be boosted, not enough homes are

:31:24.:31:28.

built in the UK. I don't think the Government and the taxpayer should

:31:28.:31:32.

underpin mortgages. Public money for private enterprise, good news

:31:32.:31:35.

for you? I'm not looking for public money. I'm looking for Government

:31:35.:31:39.

to use its power in the market to ginger up that market, and make it

:31:39.:31:42.

more effective. The difference here is the judgment as to whether we're

:31:42.:31:48.

in the 2008 position, where King was rightly concerned about wide

:31:48.:31:53.

scale default, or whether we are at an actual all time low in house

:31:53.:31:57.

building and buying, where there are people out there able to buy

:31:57.:32:01.

houses but we need to get the house market moving. This is targeting

:32:01.:32:06.

intervention, one the CBI has been calling for, I don't think it will

:32:06.:32:10.

cost the Government much money. think that King has changed his

:32:10.:32:13.

mind? I'm not saying that, but the CBI is clear that the priority is

:32:13.:32:17.

growth. If we are going to get growth we have to be bold with some

:32:17.:32:21.

policies. It is not plan B, it is plan A with a plus on the end,

:32:21.:32:24.

which says let's get the housing market moving, without spending

:32:24.:32:28.

money that the Government dose doesn't have. Kitty Ussher, this is

:32:28.:32:33.

the sort of thing you believe in, this sort of initiative? I don't

:32:33.:32:36.

believe it is a good idea to encourage people in the early

:32:36.:32:40.

stages of their career to take on huge amount of debt. Spending

:32:40.:32:44.

public money, it is good for you? It is going to boost aggregate

:32:44.:32:48.

demand, but there are far more effective, and dare I say it,

:32:48.:32:53.

intelligent ways of doing it. Just on the Mervyn King point, if he did

:32:53.:32:58.

agree with the Government, he's now shortly going to be in charge of

:32:59.:33:03.

the Financial Policy Committee that regulates the financial centre of

:33:03.:33:06.

London, so he will certainly be able to allow the banks to do it

:33:06.:33:12.

themselves it's not. One must presume he doesn't agree with this.

:33:12.:33:16.

We need �200 billion of investment to green our infrastructure. The

:33:16.:33:21.

Government through regulation. do what? Green our infrastructure.

:33:21.:33:24.

What's that? Green energy suppliers, this is the Government's own

:33:24.:33:28.

figures. And they can use regulatory policy that doesn't cost

:33:28.:33:32.

them anything to get the private sector to invest in that. That

:33:32.:33:36.

would boost the economy far more than �400 million here. When you

:33:36.:33:42.

look at this, and the talk of credit easing, this is making money

:33:42.:33:46.

available n this case to business, which we will presumably hear more

:33:46.:33:49.

about next week in the statement. There is a change going on, isn't

:33:49.:33:54.

there? There is a change, but I don't think it is an abandonment of

:33:54.:33:57.

a deficit reduction strategy, the CBI wouldn't support that, and I

:33:57.:34:00.

don't think it is the Government spending money it hasn't got. I

:34:00.:34:03.

think whether it is energy, whether it is roads, whether it is rail,

:34:03.:34:06.

whether it is housing, whether it is digital broadband, Government

:34:06.:34:10.

can do things that will get the private sector to invest that

:34:10.:34:14.

doesn't mean Governments abandon its strategy. There is lots of

:34:14.:34:17.

money on private sector balance sheets. House builders are amongst

:34:17.:34:21.

them, that can be put to the public good, if the planning permissions

:34:21.:34:24.

are there, and the market regulation is there. If Government

:34:24.:34:27.

does what it has done in this case with the indemnity scheme, bringing

:34:27.:34:30.

people together looking for a new commercial solution and using the

:34:30.:34:34.

role of Government to find that solution. That must be the right

:34:34.:34:38.

thing to do. What I see instead, I see the Government starting to

:34:38.:34:42.

provide credit and intervening more and more and more, I see the

:34:42.:34:46.

Government continuing to privatise gains by socialised losses. If you

:34:46.:34:52.

buy a house and your house price goes up you make money, if you it

:34:52.:34:56.

goes down and the Government picks up the bill, people who can't

:34:56.:35:00.

afford their houses pick up the bill. I don't like I'm seeing, I

:35:00.:35:03.

thought it was about market reform and getting people out of this

:35:03.:35:12.

stuff. I see neo-Brownite policy, constant interference, meddling.

:35:12.:35:22.
:35:22.:35:22.

think that will sound very odd. woke him up to join in? I didn't

:35:22.:35:26.

know I wasn't supposed to join in. Your office said you wouldn't?

:35:26.:35:33.

had no idea I wasn't supposed to be. Why do we need 106 policies and

:35:33.:35:36.

meddling, why not just liberalise it. It sounds like the sort of

:35:36.:35:39.

thing a at this tank, an intelligent person like you might

:35:39.:35:43.

come out with. Let's talk about the people who are 30, 35, 40, older

:35:43.:35:47.

and would like a foot on the housing ladder. I don't think it is

:35:47.:35:51.

right just to turn around and abandon those people. Government

:35:51.:35:54.

doesn't have to be a bystander, Government is actually backing a

:35:54.:35:57.

scheme which the industry themselves have come up with here.

:35:57.:36:00.

This is not our scheme it is their skeerpblgswae can put our weight

:36:00.:36:06.

behind it. By the way, -- scheme, we can put our weight behind it. By

:36:06.:36:10.

the way it is good lending or bad lending, it doesn't change the

:36:10.:36:16.

decisions the lenders have to make. What your policy is doing, it is

:36:16.:36:20.

saying to someone who can get an 80% mortgage that they can get a

:36:20.:36:24.

95% mortgage. It seems an 80% mortgage is more sensible than a

:36:24.:36:29.

95%. If the house price falls down a bit, the taxpayer picks up the

:36:30.:36:33.

bill. If the argument is we don't want to go back to the bad old days

:36:33.:36:37.

of 125% mortgages, I entirely agree. Nobody thinks this is about to

:36:37.:36:40.

happen in the next couple of years. We will review the scheme after two

:36:40.:36:46.

years to see how it is going. The world has moved on a great deal.

:36:46.:36:51.

But house prices are falling, a lot of people think house prices could

:36:51.:36:54.

fall 15-20%, if they do that your scheme will have to kick in, and

:36:55.:36:59.

the taxpayer will have to pick up the bill. It is dangerous time to

:36:59.:37:02.

start on that. This is not just about first time buyers, we are

:37:02.:37:07.

keen to help them, anyone buying a new home or a flat would qualify.

:37:07.:37:11.

Anyone buying a new build. This is new build. That is another issue

:37:11.:37:14.

with the policy, suddenly the demand for existing houses could

:37:14.:37:19.

collapse. You are distorting the market and saying people have to

:37:19.:37:23.

buy that? We know house building is a very important part of domestic

:37:23.:37:27.

gross product, we know it ememploys people, two people for every single

:37:27.:37:32.

house that is built. We know that the Government can have an active

:37:32.:37:37.

role in saising, we're not prepared to standby -- in assisting, we are

:37:37.:37:43.

not prepared to standby, we want to sais. We think 100,000 people can

:37:43.:37:46.

benefit from it. People watching who aren't in the fortunate

:37:47.:37:51.

position of those around the table of having a home, is thinking,

:37:51.:37:56.

rather than saving �40,000 deposit, I can save �10,000. As long as I'm

:37:56.:38:00.

a secure bet for the lender I can get on the housing ladder. They are

:38:00.:38:03.

great intentions, we have learned that great intentions in housing

:38:03.:38:10.

policy don't work. If it is �10,000, why not cover the whole thing.

:38:10.:38:14.

Cridland you would probably like to tell the minister how wonderful he

:38:14.:38:18.

is I would say a thousand business leaders met at the CBI conference

:38:18.:38:20.

today. When the Prime Minister announced it, there was strong

:38:20.:38:24.

support in the hall. If we're serious about growth, and these are

:38:24.:38:27.

extraordinary times, and over the winter, because of the eurozone

:38:27.:38:30.

crisis growth will get close to stalling in this country. If we're

:38:30.:38:33.

serious about growth it has to be the absolute priority. We know if

:38:33.:38:38.

we get the construction industry moving, lots of people will start

:38:38.:38:42.

spending. It is not irresponsible spending. This is not plan B, it is

:38:42.:38:47.

not spending any more money than the Government intended to spend

:38:47.:38:49.

before. These are imaginative solutions that get way from the

:38:49.:38:53.

idea that there is no hope for the public, or that the only way to do

:38:53.:38:56.

it is to spend money we don't have. It has taken the year-and-a-half

:38:56.:38:59.

for the Government to wake up to the need? We have been in

:38:59.:39:02.

discussions with the Government on all these various forms of

:39:02.:39:08.

infrastructure for the last six months for novel ways to get growth

:39:08.:39:12.

going. Earlier in the year, growth was going to be higher before the

:39:12.:39:15.

eurozone crisis kicked in, the Government didn't need to do as

:39:15.:39:20.

much as it does to keep the economy going, none of this is about

:39:20.:39:23.

reducing the deficit more slowly, none of this is about printing

:39:23.:39:30.

money. It is about Anne tell gent use of the public -- an intelligent

:39:30.:39:33.

use of the public sector money and the private sector in tandem. It

:39:33.:39:37.

has the support of British business. It is free money and underwriting

:39:37.:39:44.

the risk of business, of course it has rating. It is a step to take

:39:44.:39:47.

hold of the deficit. You stalled growth in this country by a

:39:47.:39:53.

collapse in consumer confidence, and you are telling people they

:39:53.:39:57.

should go. We have half per cent interest rates. Now the great

:39:57.:40:01.

European project, the dream of statesmen across the continent is

:40:01.:40:04.

as safe tonight as last week, and endangered as it was last week,

:40:04.:40:09.

after Spain yesterday chose a new Government. It thus became the

:40:09.:40:13.

fifth member of the euro to dump a leader to save its status. In the

:40:13.:40:18.

troubled times when politics and economics seem to collide, it is

:40:18.:40:28.
:40:28.:40:32.

time to reach for a European, 79- year-old author, Umberto Eco, his

:40:32.:40:39.

novel the Roses, it sold millions of copies around the world, and --

:40:39.:40:45.

The Name of the Rose, sold millions maid into a film. He has strong

:40:45.:40:50.

views about his country's place in Europe. He was an outspoken critic

:40:50.:41:00.
:41:00.:41:02.

of Silvio Berlusconi's Government. His new book, the Prague Cemetery,

:41:02.:41:06.

describes a world of plots, fear and paranoia and the rise of anti-

:41:06.:41:16.
:41:16.:41:16.

semitism. Eco, you're the well spring of this book -- Umberto Eco,

:41:17.:41:23.

the wellspring of this book is anti-semitism, bigotry and forgery.

:41:23.:41:28.

That climate of suspicion in Europe, do you think it is as great now as

:41:28.:41:38.
:41:38.:41:40.

it was? If you are thinking of universal plot paranoia, they are

:41:40.:41:50.
:41:50.:41:51.

two different aspects, I would say that racism has lost the violent

:41:51.:41:55.

forms it had before the Second World War. When you look at Europe

:41:55.:42:00.

itself, it is only going in one direction, isn't it, what is the

:42:00.:42:03.

ultimate destination of the European project, do you think?

:42:03.:42:08.

believe strongly that there is a European identity. Maybe, when you

:42:08.:42:13.

are in Italy or I'm here, we're don't feel it so strongly, but we

:42:13.:42:21.

both are in New York, immediately with this thing we have something

:42:21.:42:29.

in common with respect to Americans. Now the problem with it is linked

:42:29.:42:36.

not to or ideolgical reasons but economical reasons. I'm not sure

:42:36.:42:41.

how much the euro can survive. I'm not confident. Do you see at the

:42:41.:42:45.

end of this process of European co- existence and then co-operation,

:42:46.:42:49.

and then development of economic European and so on, do you see a

:42:49.:42:58.

single state at the end of it? Because I think that the nation

:42:58.:43:04.

states, England, France, were a product of the Middle Ages, more or

:43:04.:43:12.

less. Today they are less important than before, because it is more

:43:12.:43:22.

important the ju, milag e -- jumilag e between a city in the

:43:22.:43:25.

north with Spain with the common interest and connection. I see

:43:25.:43:35.

rather a sort of archepelg io of situations, not a unique state.

:43:35.:43:40.

you think the single currency, the euro, which we are now told can

:43:40.:43:43.

only survive if there is fiscal June, monetary policy European

:43:43.:43:48.

between the member gates. Do you think that was a mistake? -- member

:43:48.:43:53.

states. Do you think that was a mistake? This is a precise

:43:53.:43:57.

economical question. It is not just economical? For me it is not a

:43:57.:44:00.

mistake. I feel very comfortable, it doesn't mean anything in this

:44:00.:44:04.

one. You say it is an economical question, it is a political

:44:04.:44:08.

question? It is an economical and political economy. I'm not in the

:44:08.:44:13.

position of saying if that was really a mistake, or if it has a

:44:13.:44:16.

future. What's very interesting for those of us in this country, of

:44:16.:44:21.

course, is that your country, now has a Government, the cabinet of

:44:21.:44:25.

which, includes not one democratically elected figure. That

:44:25.:44:34.

has made necessary because of the euro. It has political consequences.

:44:34.:44:38.

We find it in this country unimaginable where we have a

:44:38.:44:47.

Government that is not elected? Kissing er elected by the people, a

:44:47.:44:52.

lot of Governments were not elected by the people. It is presidential

:44:52.:44:58.

appointments, it is a different system of Government. We are in

:44:58.:45:01.

exceptional circumstances. I'm glad you don't have Silvio Berlusconi in

:45:01.:45:05.

your country, if not you would be obliged to find the same solution!

:45:05.:45:11.

How could your country put up with Berlusconi? How could Italy put up

:45:11.:45:17.

with Berlusconi, how could you tolerate Berlusconi? Berlusconi was

:45:17.:45:25.

a genius in communication. Even his blunders were calculated to reach

:45:25.:45:30.

his tart, his targets were middleaged people, ladies and

:45:30.:45:35.

gentlemen, who watched television. And they are enough to make up a

:45:35.:45:40.

majority. Why does Italy put up with this succession of Governments

:45:40.:45:45.

of varying degrees of competence, or embarrassment? Italians don't

:45:45.:45:50.

have a strong sense of the state. That is absolutely true. Would you

:45:50.:45:53.

join a Government of technocrats if you were invited? That is not my

:45:53.:45:58.

job. I'm saying if you were invited would you join it? If I were an

:45:58.:46:03.

expert and I were invited by Mr Monti, probably yes, in order to

:46:03.:46:08.

serve my country in a democratic way. Since I have the guarantee of

:46:08.:46:14.

the President of the Republic. Akiko keek thank you.

:46:14.:46:17.

That is quite -- Umberto Eco, thank you.

:46:17.:46:24.

That is quite enough for us, you might think so. Before we go, the

:46:24.:46:31.

death was announced today of Sheila Delaney who, before 20, had written

:46:31.:46:38.

the gritty drama A Taste of Honey. You are just feeling a bit

:46:38.:46:44.

depressed, you will be your usual self once you get used to the idea.

:46:44.:46:51.

What is my usual self, my usual self is a very unusual self, I'm an

:46:51.:46:54.

extraordinary people, there is only one of me like there is only one of

:46:54.:47:00.

you. We are unrivaled. We're bloody you. We are unrivaled. We're bloody

:47:00.:47:04.

marvellous! A murky night, fog forming across

:47:04.:47:14.
:47:14.:47:18.

the south-east causing problems in the morning. Patchy rain in the

:47:18.:47:22.

Midlands, not reaching East Anglia and the south-east. Hopefully the

:47:22.:47:27.

fog will lift to some extent. To the rear of the weather front

:47:27.:47:31.

things brightening up. Western parts of Wales will see sun before

:47:31.:47:35.

it sefplts further east towards the English border probably staying

:47:35.:47:40.

cloudy. Up across Northern Ireland set to be a lovely day, a chilly

:47:40.:47:46.

start, with a lot of sunshine throughout the day. A change from

:47:46.:47:56.
:47:56.:48:01.

The sunshine not lasting long in the north. Cloudy, windy and at

:48:01.:48:05.

times wet weather across parts of Scotland and Northern Ireland in

:48:05.:48:08.

particular. Further south the rain should clear away, and Wednesday

:48:08.:48:11.

after a potentially frosty start it looks like a bright and crisp

:48:11.:48:16.

As the government finalises plans for the autumn statement, David Cameron vows to restart the housing market. Jeremy Paxman finds out what this means, particularly for first-time buyers.


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