07/12/2011 Newsnight


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For a currency we're not even members of, the euro is turning out


to have a powerful sway in British politics. As European leaders


discuss yet another treaty change, significant numbers of Conservative


MPs are demanding to know just what David Cameron is going to do to


stand up for Britain. There is no sign it is causing


Angela Merkel and Nicolas Sarkozy sleepless nights, they say they can


keep the euro alive. But what if they are wrong. We roll the dice on


eurogeddon with two money men and a politician. How do you handle the


collapse of a currency. If we get into a situation of slightly more


doom what would you tell politicians to say? Don't say


anything unless you have to. Seriously, if you start saying we


have stress tested all the banks and we think there is an 87% they


are all fine! We will ask two leading economists if the leaders


of Europe will find an answer to avoid such clamty. It is the


particle that has eluded scientists for 30 years or more. Newsnight


learns next Tuesday physicists will announce they have found the first


signs of the Higgs boson particle. Why do people less and less think


that public debt is the responsibility of the state.


One after another they stood up and asked questions, one after another


they got little or no answer, certainly little or no detail. The


Prime Minister got the benefit of the doubt for now, as the depth of


anxiety in his party about Europe was made plain toness the House of


Commons today. We have learned most of the details of the Merkel-


Sarkozy plan to save the euro, but we don't know if Britain can


participate in the new treaty they have a greed to save the euro.


Our economics editor is here. You have seen the letter, haven't you?


It is stun to go see history, and the future history of Europe


written down in black and white, eventhough it doesn't contain much


more than what was announced on Monday. There was a slight


political Higgs boson in this letter, in the form of a term, that


the stability and growth union, we now think we are building. The


letter just spells out what they have said, they will try a treaty


change with all 27, 17 if they have to. There will be punishment for


states who break the rules and break the 3% limits on deficits.


Then it talks about the core, the euro core doing all these things,


convergance on economic policy, financial regulation, Labour


markets, corporate tax, and financial transaction tax. The cap


stone is the stability and growth union. I have been asking old hands


and said what is it? The stability and growth pact is for the 27, it


is about balancing your books and growing, we are a member of that.


But a union based on it is quite weird. And it has made me think


there are three things going on. There is this 17 project, that is


there, they have had it before, Britain won't be in it. There is


the 27 project they have said they are trying to do. When you start


hearing the thing in the middle called a union, that is where I


think, the letter hadn't been published at the time when the MPs


had begun laying down their questions, where the questions do


really become acute, what is it? What is the stability and growth


union? Presumably it is the inner core


isn't it? No the inner core is the eurogroup. What is it? It is


difficult to tell. One slightly helps it is a mistranslation, it


really means somebody else. I don't know!


The eurosummit presents itself as an opportunity irresistable for


euro-sceptics, time to shout loud and proud for repatriation of


powers and a rush to referendum. The greatest champion they found


today was the Mayor of London, Boris Johnson. We watched events


unfold. As everybody knows they are


gentleness themselves, unless you get on the wrong side of them.


Perhaps this is why British politicians find this breed so


irresistable, that and the association with Churchill. Peter


Mandelson, who knows something about PR, enlisted a bulldog for


new Labour's cause. And today, a Conservative MP, famous at


Westminster, both for hipets and loyalty to you know who, urged her


successor to channel his inner canine at the Brussels summit.


the Prime Minister do Britain proud on Friday, and show some bulldog


spirit in Brussels? I can guarantee to Moy honourable


friend that is exactly what I will -- my honourable friend, that is


exactly what I will do. The British national interest means to resolve


the crisis in the eurozone, freezing the British economy, and


freezing economies right across Europe. Resolving the crisis is


about jobs and growth and business and investment right here in the UK.


That is not quite the bulldog spirit many of his backbenchers are


hoping for. They want him to go further, not just hold the line but


growl and bear his teeth, a difference -- bare his teeth, a


difference Ed Milliband was keen to exploit. He was telling his


backbenchers that the opportunity of treaty change, would mean in the


future, the repatriation of powers. That was his position of six weeks


ago, today he writes an article in the Times, a 1,000-word article,


not one mention of the phrase "repatriation of powers", why does


the Prime Minister think it is in the national interest to tell his


backbenchers one thing to quell a rebellion on Europe, and tell his


European partners another. Labour leader knows some on the


Tory benchers are not convinced Mr Cameron has a clear negotiating


position. Something Conservative commentators are now drawing


attention to. In the light of what's happened in the past, when


prime ministers have talked tough in Britain, and then gone to


negotiate in Brussels, do you think Conservative politicians are


prepared to trust the Prime Minister at this stage? Absolutely


not. Actually I think there is quite a lot in Ed Milliband's


criticism that there is a tendency to say one thing to backbenchers,


and to hope, to be able to, when it comes to it, to say something


different to European leaders. I think the more times that happens,


the greater the danger that the parliamentary party and the


Conservative Party in general switches decisively into the whole


"get out of the EU" camp. One of the party's big beasts is talking


tougher still, by using the "r" word. It is absolutely clear to me,


that if there is a new treaty at 27, if there is a new EU treaty that


creates a kind of fiscal union, within the 27 countries, or within


the eurozone, then we would have absolutely no choice, either to


veto it, or put it to a Reverend DUP. The London ofgs of the --


Referendum. The London office was once the Conservative Party office,


there could be a similar takeover in Europe, with the 17 fiscally


joined and marginalising countries like Britain on the outside. Some


have said the British Government is rudderless at the moment, and


unprepared for what is coming next, and despite the bulldog rhetoric


from Mr Cameron, his bark will turn out to be worse than his bite.


In an interview to be published tomorrow, the cabinet minister,


Owen Paterson, warns that fiscal union would create a new block.


Asked if that should trigger a -- British referendum, he replied :


As Mr Paterson's parliamentary aide has been telling me tonight, Tories


see this summit as a unique opportunity, they don't want the


Prime Minister to miss it. reality is, that in order to have a


new treaty there has to be unanimity amongst the 27, that is


the opportunity which has presented itself today, which may never


present itself again. We have to use the opportunity, where we could


say no, to extract from our partners the things we want to


protect British interests, jobs and prosperity. I'm sure that's on the


Prime Minister's mind. Your boss, Owen Paterson, was a rebel at the


time of Maastricht, unhappy with the Conservative's position. Does


he regard this as a resigning matter potentially? I don't think


anyone's in the position of resigning or anything. We are


talking about backing the Prime Minister as he goes to the summit,


to try to get powers back for Britain and out of the eurozone,


and which they have inflicted on themselves by not obeying their own


rules. Tonight euro-sceptic Tories joined forces with a meeting to


agree their tactic, securing a deal in Brussels will be hard enough,


selling it at Westminster could be even tougher. With us now to


discuss David Cameron's dilemma are Sir Malcolm Rifkind, John Major's


Foreign Secretary in the 1990s, and remembers all too well the party's


battles over Europe, and Nadine Dorries, an MP who doesn't yet bear


those scars. Do you firstly believe that David Cameron will go to the


meeting and defend British interests? To an extent. Do you


want the euro to survive? I think it is time for the euro to


dismantled in an orderly way. the member states of the euro to


decide they didn't agree with you, they wanted it to survive and came


to some arrangement between themselves about co-ordinating tax


and the like, that would be all right, or not? Then it's time for a


referendum. On that third point, which seems a quite likely outcome,


if the Merkel-Sarkozy letter is put into effect, it would change the


game, wouldn't it? Not in a sense that is being implied. Let's be


very straight forward as to where we are. Europe is in an incredibly


fragile state. If the European Summit collapses on Friday, because


of a lack and inability to reach agreement, that is very serious,


not just for the eurozone countries, for Britain as well. Now that means


that the tough approach required by David Cameron is perfectly


reasonable if he concentrates on issues relevant to the crisis, such


as the potential threat to the City of London. If he make that is a


condition for his consent, then he's entitled to be as tough as


required. But if we were to have debates and discussions on fli,


about whether we should re-- Friday, about whether we should repatriate


the Common Fisheries Policy or the Working Time Directive or things of


that kind, the rest of the world would be aghast if the European


economy was veering towards problems. I think Malcolm is


falling victim to making outrageous claims. All we need to do to defend


the City from the transaction tax is to say no. All this flim flam


about the Prime Minister going to defend, he will come back on Friday


waving a flag with prosperity of our time on it, defending the City.


This will be the story that comes back. That is a good thing isn't it,


if he has done that? There is no saving to be done, we will say no,


we won't have the transaction tax. If he does that he's looking after


British interests by his own lights? He can do that in 30


seconds. The big issue that needs to be debated is whether or not


there will be a eurozone a block of 17 countries, if there are, and


that is what is decided and we are part of the 27 of the outer ring,


then that, inner union, will affect our economy, and that will be bad


for us, that's what we want him to defend. We want him to defend us


from that happening. So stop the 17? There is only one outcome for


us. If the 17 have a union, and let's admit, two other countries


have already been taken over by technocrats. We need that


referendum. The British people have no say on this. I'm so sorry,


Malcolm Rifkind can speak for himself. There is a fundamental gap


with the real world in what we are being told. The reality is that no-


one country, whether it is the UK or any other country, can simply


dictate to all the rest, even the Germans can't do that, they have to


get agreement from their allies. The idea that David Cameron goes to


a summit and says he's going to veto the summit, this agreement,


and everybody else wishes to go forward, regardless of the


implications for the European economy, regardless for the


reactions of the markets, including our interest rates, as well as


those in other countries, unless you give me concessions on matters


that are not relevant to this immediate European crisis. We all


know perfectly well that if there is to be a repatriation of powers,


that will be a lengthy negotiation, even if it was successful. I was


Margaret Thatcher's Europe minister, it didn't come much tougher than


Margaret Thatcher. When she went into a negotiation, she never made


unrealistic demands, she never said she insisted on this, regardless of


the consequences for the British economy, never mind your own


economies. What she said was, she identified what was deliverable,


and what's deliverable on Friday is agreement on dropping this


ridiculous transaction tax, what is deliverable on Friday is an


understanding that there are other issues, important to the UK, which


may need to be considered. Angela Merkel has already quoted that she


will being will to give constructive consideration to the


kien of changes on the -- kind the changes on the employment directive


David Cameron has been raising. You have to be negotiating in a


sensible, practical way, not saying you demand this or that, regardless


of the consequences, that is not the real world we live in. When you


have already made the statement that if there is to be any further


loss of sovereign power, or power, to Europe, then we will have a


treaty, or a treaty. That is the law. We will have a referendum, we


are now in that position. If there is a block of 17 countries in a


union, that will impact on us, and on our economy. It will bring about


changes to our economy, and therefore, we have to have a


referendum. People out there in 1973 voted for a Common Market.


They didn't vote to be part of a two-tier eurozone, where 17


countries in effect become one country, we are on the outer ring.


They didn't vote for that. The act you and I voted for, and is now the


law of the land, says if the United Kingdom Government proposes to


surrender or transfer sovereignty to Europe, in any new area, there


must be a referendum. That is not what is being proposed on Friday.


If those countries are in the eurozone, which are only 17 of the


27, if they wish to transfer more of their power to Brussels, that is


their business. The change of power been the European Union is


something people should surely be allowed vote on? I'm not saying


they are not important issues, I'm saying the obligation to have a


referendum, is not when there is any kind of any change in Europe,


it is when there is a surrender or a desire to surrender sovereignty


by a British Government. This is a new situation, the 17 countries


becoming one union is very knew. New. They are already one country.


What is being proposed is very different. This hasn't been on the


table before. It is going through at a speed that people can't


understand what is happening. Even the use of the word "sovereign", my


constituents ask what does it mean, when it is explain it is the


transfer of our powers for someone else to be making our policies and


dictating to us. They don't like the sound of that. This is all


moving very fast, we need to acknowledge what people want and


give them the referendum. It is very important for people like


yourself not to mislead the public, and imply something. For give me,


let me -- Forgive me, let me finish the sentence, and not imply that


transferring British sovereignty is in practice that, that is not a


proper way to try to take the debate forward. We will know in a


cop of -- couple of days, and the euro may collapse any way. The make


or break meeting will roll into other meetings. Confidence is all,


supposing the joint strategy of Merkel-Sarkozy fails, what then?


There are emergency plans being laid in the UK and the EU, but they


are secret. We asked Paul Mason to try to war game a eurogeddon


scenario. Here at the Treasury, though they hope tomorrow's summit


will be a success, they are planning for all eventualities,


including a euro break-up. Most people are oblivious, and results


will remain behind closed doors. are undertaking extensive


contingency planning to dial with all potentially outcomes of the


euro crisis. To show what might be happening behind closed doors, we


have assembled three people whose real life roles might have involved


them in this kind of contingency planning. Kitty Ussher was a


Treasury minister under Gordon Brown, Sir Martin Jacomb sat on the


board of the Bank of England, Jon Moulton is a prominent investor. In


this room, I will ask them, in real time, to confront one of the


scenarios Britain might face. Good morning everybody and welcome.


Thank you for coming. There have been some events. The sin flairyo


begins with a Greek -- the scenario begins with a Greek default and an


exit from the euro, not a catastrophy for Britain but


bringing fears. There is now a 90% chance of a Greek default before


the end of January, in an hour's time the PM and the cabinet


secretary walk through that door, we have to come up with a response.


I think the first duty of the British Government, and the Bank of


England, and the other regulators, including the FSA, is to make sure


they safeguard the British banking system. Because without that


everything fall ace part. completely agree with that. If we


think that Greece is very likely to default, questionable -- question


is how much exposure do we have to Greek debt, that will be worthless.


It is all about the financial system and the knock-on effect,


Greeks failing to pay their debts, meaning that Cypriot banks fail,


German banks fail, French banks fail, and then all of a sudden you


have massive exposure from the UK to a relatively small event and a


country that is less than 3% of the European GDP.


What do we do, in the next 30 days. If the main focus is banking, what


practically do you do? There needs to be a new stress test regime for


all the major financial institutions. Their books need to


be put through the wringer in the light of the new environment. The


worst possible case scenario needs to be modelled to see if they can


remain trading. The problem is most of them will fail that test. So if


it is done properly. So the only thing the Government can do is


promise absolutely, we will do whatever we have to do to print


money, chuck money in all directions, support everything.


Because there will be no practical alternative. But, in the end, our


trouble shooters were clear about the action Government will have to


take. We have no choice, we have to bail out the systemically important


banks. That is true, but two of our British banks are already


nationalised, RBS, Lloyd's and Barclays is perfectly well


capitalised. I don't think there is a risk of that, provided nobody


makes a big of -- as big a mess of it. It is different from 2008


because there is advanced discussions about how to pay for


bailouts. There are living wills for institutions to work out how to


have a structured dissolution, we know we can allow banks to fail if


we need to. Is anybody prepared to allow a UK bank to fail at this


jubgture? You can't allow a bank that is systemically important to


fail. You can certainly allow it to go into a situation where there are


living wills taking effect, and all the shareholders lose all their


money. We are looking at a situation where losses beyond the


equity are all too conceivable. That is really very difficult.


Wiping out the shareholders won't be enough and the banks won't be


able to repay their debt in full. That means the banks will need


support to keep systemically banks going. What do we tell the British


public about who is first in the queue about losing their money?


don't think we tell the British public anything. I'm pointing out


that you a former minister, you don't tell them anything? Not at


this stage, unless you want a run on a bank. I don't think we are


near that kind of danger. But the contingency planning should have


one thing, first and foremost, at the top of the list, that is the


ability of businesses to operate their normal banking mechanisms and


consumers to have access to their cash. That is the most important


thing. You have to prepare them for something, it is almost


inconceivable event we are talking about, won't lead to the


deleverageing further of banks, banks getting smaller, less credit


into the economy, and a weaker economy.


At this point, in the scenario, the IMF and OECD warn that British


growth will be lower, Britain's budget, already tightened last week,


would then need tightening some more. Other fiscal trajebgt trees


for a Greek exit and dire situation economically. Would we have to say


to the Chancellor, you need some kient of Plan B, even if it is only


Plan A+ plus, even if he has to tighten it even more. I would say


that taxes were easing, in so far as it would affect effective


business, that mean any of those retired or on benefits, we shall


continue to:. The Government will have no money, no money coming from


exports, consumers haven't any money, business has some money, but


they are too frightened to invest it, given what is going on. The


only option the Government has is to create markets to give business


the confidence to invest, that is the only way we will getting a gate


demand, growth into the economy, given that -- aggregate demand,


growth in the economy. Very hard to say we shouldn't be pushing


everything we can to make productive industry activity to


return to the UK in volume. They are saying, hold on a minute,


what you told us in November, it is worse than that, and you have never


touched the NHS, you have two aircraft carriers you seem to want


to build despite the fact you will never use them. Who will tell the


PM that the NHS will have to be, do we have to think about that?


Somebody will have to. contingency planners were by now at


the political heart of darkness, this was the mildest of the


scenarios we had come up with. Worse, we made the crisis using the


roll of the dice, and the more impotent they felt. The list of


scenarios is bigger than in the last 20 years, we could go this way,


that way, the euro could fail, high interest rates, low interest rates.


It is terribly difficult, I think we really want a Government that


looks down at all possiblities. Thinks about them all, tries to


respond. They will probably fail, but they have to at least try.


All the Prime Minister and cabinet secretary are on their way. By the


end the solutions for the worst case were not much different than


for the mildest. Save the banks, take hard fiscal choices and let


others worry about saving the euro. How likely is that sort of


situation to come to pass? And what can, or should be done to prevent


it? These two may be able to shed some light, We have the chief


economics commentator of the Financial Times, spending ten years


as a senior economist at the Central Bank. Ian Bremmer is


President of Eurasia Group. Apparently there is a lot of this


modelling going on, what sort of thing are they planning for?


suspect that they are not really planning for these sorts of


disasters. They might be planning for a Greek exit. But in the


eurozone, I think they are planning for the thing to continue. What


they are trying to do is set up a situation in which the European


Central Bank engages really seriously. There have been some


indications in the last week that is what will happen. They think


they will get through with it. Is that right? That is a very good


question. I don't think they are planning, seriously, for a break up.


We will come to the point of whether it will work or not in a


second or two, but the companies you advise, they are presumably


strategyising things, through modelling -- strategy guiseing


things through, modelling things. They are getting a lot of questions


about what is the likelihood of a eurozone break-up. It is thinkable,


but thinkable, a war between Israel and Iran is thinkable, that doesn't


mean we think it is a likely scenario. The euro breaking up


doesn't seem likely for the time frame these folks are considering.


Time frame? Over a year. Muddle through is the most likely outcome,


especially moving towards a fiscal pact on Friday. That was a model of


a Greek default rather than the whole of the euro breaking up. What


is your prognosis, one year, do you want to raise him another year or


two? I think that they have the resources and almost certainly the


will. They have the resources because they have a Central Bank


that will create money that people will hold. There is no doubt people


will hold the euro. If the European Central Bank is brought in to


purchase and intervene in the debt markets, the public debt of most of


these countries rolls over slowly, it will continue to pay high


interest rates for a long time. As long as the political process and


the affected countries are reasonably stable, they can keep


the things going for quite a while. The thought it will all end


tomorrow strikes me as wildly implausible. He says not worrying


about it for a year or so? I would say longer than that. I'm not


worried about break up for a year or so. A default by a country is


possible in that period, d doesn't lead to break up. We have to be


clear that there is a tremendous investment here, in Britain we tend


to assume it will all be over much too easily. I think that is right.


I also think the willingness of the Germans to ultimately backstop the


eurozone is very different from the willingness of the Germans to say


they will do that, and the ECB should be the lender of last resort,


taiinging away all moral hazarz. When you are playing -- taking away


all the moral hazarz. I understand that Merkel has not said let's do


eurobonds. She has said let as not do them now. There is enormous


support for the continent of Europe. What about the letter that Merkel


and Sarkozy have sent to Mr Van Rompuy, there are various tactics


in there, applying to the 17 members of the eurozone. Do they


strike you as coherent and likely to work or feasible? I think they


are sufficiently coherent to work for the time being. What we are


doing is we are buying ourselves more capacity to muddle through.


The most important point is on Monday the ECB will feel they can


turn the taps on to a greater degree. That is what the markets


are looking for. They want to see what the ECB can do next week, they


will not provide the bazooka, but they can provide more time. They


are doing enough to probably make it survive, we can't give a precise


date, of when that will fail, but, they are not beginning to do enough


to make it work well. The question is can you keep currency union


together, for very long, nobody knows what the period will be, if


significant numbers of players feel it is not really working for us. I


think it is very, very likely there will be a situation that a lot of


countries will feel that. The problem with acting on that is


leaving is also an absolute disaster. What you have in the real


nightmare to me, in fact, the most likely nightmare, is you have a


eurozone that just really doesn't work very well. In all sorts of


ways it really doesn't work very well. It doesn't grow, the


adjustments don't work, and some countries in permanent recession,


but they don't have the nerve to leave. It is a very miserable


marriages, and they can go on for a very long time. The Greeks are


taking pain, and 7% of Greeks -- 78% of Greeks are in support for


the euro. There is no massive support among the peripheral


countries taking massive economic strain to move away from the


eurozone. It seems a prerequisite with


keeping the patient on the life support, never find taking it for a


walk, that democracy is suspended? The question is how much democracy


did you give up. I believe part of the problem in the eurozone is not


the lack of fiscal union it is the lack of a children's table. When I


was a kid growing up, you didn't give me sharp untensils because the


family pet would have been damaged, over time that changes. In Europe


that hasn't been the case, there will be a symmetry in the


fundamentals of the union whatever we do. Is it ever going to work


really well? Probably not, there are gigantic problems inherent in


putting these countries together. They have incredible


competitiveness problems which they will find difficult to resolve.


Obvious low they find Governments imposed upon them they haven't


chosen. They didn't like the democratic Governments they had


before. As Ian said, once you went into the currency union you gave up


an awful lot of sovereignty, they are discovering they are losing


more and more. Can such a structure operate, yes, is it democratic in


the way we think about it, not in my view, that is why I'm happy we


are not part of it. You can take your hand out from


country the back of the sofa, a respected scientist at the CERN


particle physics laboratory has told Newsnight, exclusively, that


he expects to see the first glimpse of the Higgs boson next week, when


they reveal their latest data. They have spent 30 or so years and


countless millions looking for this missing piece of the jigsaw in our


understanding of particle physics. The famous boson is named after


Peter Higgs, an Edinburgh University physicists who first


proposed its existence in the 1960s. Our science editor has the story.


Tremenduously exciting? I spent the day at CERN yesterday, there is a


real sense of excitement, a buzz in the cannot teens there. There are


are you -- canteens there. There are rumours on the Internet. This


is all because there is an announcement next Tuesday, the


press have been invited long, and two separate teams who have been


looking for the Higgs boson will present their data. Finding Higgs


boson has been described as the Holy Grail of physics. If it exists


it helps us understand the standard model. It will be the crucial


missing piece in the jigsaw of the standard model. That is the process


physicists understand the way particles fit together. Without the


Higgs, this standard model doesn't make sense. The two teams of


scientists are going to be reporting, independent of each


other, using different detectors. Now, officially, these two teams


don't talk to each other, they are sworn to secrecy, all the are you


mores are of a possible sighting of the -- are are you mores are the


possible sighting of the Higgs boson. The teams are focusing in,


ruled out ranges of mass, where they have seen no sign of the Higgs.


What does the Higgs look like? Women come on to that. I asked the


former head -- We will come on to. That I asked the former head of


theoretical physics at CERN how close does he think we are of


seeing boson? I think we will get the first glimpse, the experiments


have looked high and low for this missing piece, it could be that it


weighs several hundred times the proton mass, that seems unlikely.


There is a whole interimmediate range where we know it cannot be.


Then there is a low mass range, which is actually where we expect


it to be, it seems maybe there is some hints emerging there. That is


what we will learn on Tuesday. lot of stuff about seems, he's not


saying they have found this thing, is he? It is not definitive yet.


They can't claim to have found the Higgs boson, that is because there


isn't enough experimental data from the Clydeer to claim what is called


a discovery. It will be a significant milestone. What is this


thing? It is notoriously difficult to define. We asked Peter Higgs to


tell us how it worked. This is the best he could do. Waves in this


qant fee that oscillates up and down -- quantity that oslails up


and down the trofs. That caused a lot of giggles. Professor John


Ellis does a pretty good job. standard model is a bunch of


building bricks, blocks like the electron, that is a thing that goes


around at tomorrows, the Quarks are things that make up -- atoms, the


Quarks are things that make up the atoms. The whole thing would fall


down if we can't have a cap stone, sitting there, in the middle there,


that cap stone tells us which particles have mass, which don't,


that cap stone, which makes a whole standard model hang together, that


is the Higgs boson. I do hope they recognise it when they find it.


will hear more next week if they see hints of the Higgs boson.


are becoming an increasingly self- reliant, some would say hard-nosed


society. The latest attempt to see what the British public feel about


the world they live in, is more of us feel unemployment benefits are


too high, and the proportion who think taxes should rise to improve


public services has halved. The Prime Minister really took the


findings that he has his finger on the pulse, claiming people want to


end the something for nothing society. Steve Smith, so interested


in the Big Society, we have dubbed him Citizen Smith has more.


Previously, have you seen our Citizen Smith feature before? No,


in that case it is a much-loved and award-friendly segment, about David


Cameron's Big Society at the grass roots.


Ahmed Kabba, originally from Sierra Leone, but has lived here for 20


years, was one of the Guinea pigs on the first community organiser


course this autumn. He was learning how to recruit his neighbours to


get things done in their community. Which happens to be the challenging


Inner London postcode of Peckham. The PM himself called in at Ahmed's


local cafe, to see how he was We couldn't think of a better idea,


so we rewound the same scenario. Ahmed was so keen on recruiting he


had a go with me. Show me what you do? Hello, how are you. How are you


doing? So-so. Do you live local? I'm a community organiser. What is


that? It is reaching out to the local community and asking specific


questions, about your vision. you get a sense from people,


perhaps the ones who are working here, that they resent people who


are on benefits? Is there any sense of that, as in this survey or not?


I haven't had anything like that in terms of people on benefit, or what


people are doing down the street. The concern they will have is not


about individuals, it is about collective community, in terms of


anything that is happening around them that they don't like, or they


would like to see improved. But others see things differently,


more than half of us think that unemployment benefit is too


generous. Rewind back to 1983, and just over a third of us did.


Only 31% support tax rises to pay for health and education. It used


to be 63%. People increasingly are looking to


others to be more self-reliant, and look less to Government to solve


problems. Whilst they are still concerned about the gap between


rich and poor, everybody thinks the gap is too wide. They think


unemployment benefits are too high and discourage people from finding


work. And there is no appetite from Government to do more


redistribution of wealth from rich to power. On Twitter David Cameron


said people were making it clear they had enough of the something


for nothing culture. Not everyone thinks it is good for Government?


It is good for Cameron's talk about benefits being too much and the


state support, I don't think it is useful for people want to go


collaberate, it speaks to a society where people are circling their


wagons and thinking about themselves and their families,


rather than cleaning up the local graveyard. Good for him in the


short-term, but in the long-term not so good. Unfortunately this is


hardly the first time in living memory that Britain has been in a


recession. What you are seeing is a similar hardening of public


attitudes towards people on benefits, towards the size of the


state, generally. That happened in the late 1970s, when Labour was


seen simply as being profligate. That comes in at the end of the


Social Democratic periods, it reflects what was going on two or


three years ago more than what's happening now. Stkph Ahmed Kabba


and others -- Ahmed Kabba and others are fired up by community


organisers, but the problem is the Big Society, might not be as big


hearted as people wish. Two local MPs are with me now,


Margaret Hodge, and Jesse Norman, who has published books about


compassionate Conservatism and the Big Society. What do you think has


happened? This was a snapshot, it was, July 2010 when Jesse and I had


been out on the stomp. At that point we were coming out of the


previous recession, people were feeling very insecure. You are


looking cynically at me. We know roughly when it was taken, what


does it tell us about what has happened? At that time people were


feeling insecure. They were feeling angry. Therefore you come in on


yourself in that sort of an environment. You tend to think


other people are getting everything, I'm not getting enough myself. That


was an attitude at that time. I think the contributor who talked


about the end of the Labour Government, when things were better,


you know the investment in schools had gone up, the investment in


hospitals had gone up. I think it was a different era, at a snapshot.


What is your analysis? My analysis is people were looking ahead and


looking at a long dark tunnel of economic stagnation. It is hardly


better since? No. They found an awful lot of money spent over the


past few years had been wasted, and they thought maybe Government is


not doing the job it should be doing and we need to look for


alternatives. That is why there is a turning away from retis tribbuegs


and on to community. Let's -- Redistribution to the community.


Let's not let into party politics. There may be other things, it may


be a matter of politics or economics, it may be that society


has in some way matured into a different sort of being, to the


sort of people, perhaps we are slightly older than you, but people


we grew up with? The attitudes towards benefits have changed. They


started to change, when Labour came in we started saying work is the


root out of poverty. We started creating that different settlement


out of welfare state from where we were in the post-war era. We


shouldn't be surprised of that. To inject a fact into this,


unemployment benefit, in the 1970s was about 12.5% of national average


male earnings. Now it is 7% of average national male earnings. It


has got less generous, that doesn't mean the attitude is less there,


and there are few people who ought to be working who presently are


working. Do you get a sense we are less kind to one another, this


slogan your leader had, I'm not being party political here, "we are


all in it together", people feel it less now? I don't think so. I think


they look around, it is a matter of politics, looking at the past,


looking at the future. It is culture also, they can see crony


capitalism that has sprung up. People who have been taking very


hygiene fits in some case s which they didn't seem to be deserving.


You are getting a recalibration of values. I don't think people are


becoming celebration, but they are taking the compassion they have and


focusing on the community, and not trusting the state to do things it


can't do. Does Britain feel like that to you? It is a more


compassionate and caring place than it was? It does, oddly, it is a


country looking hard at the sources of what actually matter in people's


lives, and coming to the conclusion that it is not just about money but


linkage and community. I think it is about insecurity, people's


living standards going down and they turn in on themselves, that is


what's happening. On the role of the state and public expenditure,


the concept is one that people recoil from, but the reality is one


they like. For example, in that survey, they like the NHS, they


were happy with it. People want a copper at the end of their street.


People want youth facilities in their communities, and they want


the parks well looked after. There is a complicated set of attitudes


going on here. If you were to take a snapshot in a year's time about


attitudes today. You have high unemployment, and they will change


again. We will only engage with what we have, is Britain a better


place than it was, do you think? Britain a place in terms of the


public space? Yes. If you think about into 1997, you think we had


outside toil lets in schools, we don't have that now. We did have


hospitals falling apart. We don't have that now. You are asking does


Britain feel like a place where values are cherished. It doesn't


feel like that, but it is recognising the problem and moving


in the right direction. I don't know what that means? People are


realising. I have to stop you there, apparently we have run out of time.


That is all from Newsnight tonight, if only we had more time we could


depress and worry you further. We can't. Good night.


Some pretty wild weather on its way through tomorrow. It starts off


snowy across many northern parts of Scotland. That will turn back to


rain before severe gales keep in later on in the day. Heavy rain


sweeping across the country, out of Scotland and noerm, into England


and Wales. For parts of the Midlands it will turn wet, the band


of rain sweeping through will last all day. Ahead of that, cloudy with


dribs and drabs, mild, but tempered by the strength of the wind. Wet


weather sweeping into south western parts of England later on in the


afternoon. It clears through Wales, behind that things will brighten up


with sunshine tofl developing across northern parts of Wales. For


Northern Ireland sunshine but very strong winds, potentially damaging


gusts along the north coast. Scotland where we are most


concerned, gusts of up to 80 miles an hour or more. There could be


damage construction or power outages, a red warning in force. We


are highly confident that there will be some significant damage and


disruption from this weather event. Looking further ahead into Friday,


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