:00:10. > :00:14.Tonight, the State of the Union. Will the question and timing of
:00:14. > :00:18.Scotland's vote on independence be decide, not in Edinburgh, but
:00:18. > :00:24.London. As the coalition tries to assert its authority over Salmondle
:00:24. > :00:28.in the opening salvos over a -- Alex Salmond in the opening salvos
:00:28. > :00:33.over the United Kingdom. We hear from our guests.
:00:33. > :00:38.Also tonight. Drop in and see us some time. Do that.
:00:38. > :00:41.The end of the American dream, as Republicans try to find someone to
:00:41. > :00:45.challenge Barack Obama, we report on how middle and lower income
:00:45. > :00:50.Americans just can't move up to better times. I don't think we have
:00:50. > :00:59.gotten a raise, cost of living went away for a while, this is still
:00:59. > :01:02.away. About eight years we have been about the same wage. We will
:01:02. > :01:05.ponder that with two former White House insiders.
:01:05. > :01:09.Is the Deputy Prime Minister sucking up to Europe, by suggesting
:01:09. > :01:15.that the treaty opposed by Britain will one day be agreed by all.
:01:15. > :01:24.believe that it should, over time, be folded into the existing EU
:01:24. > :01:32.treaties. Good evening, there was a time way
:01:32. > :01:37.back in the 1950s, within the Conservative Party had a majority
:01:37. > :01:41.in Scotland. Since the days of Margaret Thatcher, Tories across
:01:41. > :01:44.the border have been cherished for their rarity. David Cameron's
:01:44. > :01:49.attempt to point out any referendum on the independence of Scotland,
:01:49. > :01:55.requires the UK parliament to play a central role, may be legally
:01:55. > :01:58.correct, but it is politically fraught. Judging by the reaction of
:01:58. > :02:03.the Scottish National Party leadership, the precise timing of
:02:03. > :02:09.the referendum will be a political hot potato for years ahead. Here is
:02:09. > :02:14.David Grossman on the state the union.
:02:14. > :02:17.It was the persistence of a spider, we are told, that convinced Robert
:02:17. > :02:23.the Bruce, to ignore his repeated defeats and continue his fight
:02:23. > :02:28.against English rule. His reward, a famous Scottish victory at
:02:28. > :02:33.Bannockburn. Around the 700th anniversary of Bannockburn, in 2014,
:02:33. > :02:37.is, we are told,le Alex Salmond's preferred date for a referendum on
:02:37. > :02:41.Scottish independence. Why not straight away? Well, critics of the
:02:41. > :02:45.SNP would suggest it is a political move. Mr Salmond needs time to
:02:45. > :02:50.shift the debate his way. The real issue here is that Alex
:02:50. > :02:54.Salmond doesn't want to fight this referendum now. He's hoping that if
:02:54. > :03:00.he strings things out long enough, then he can get people to accept
:03:00. > :03:04.his argument. I think it is far better to decide this issue once
:03:04. > :03:07.and for all, decide if we are staying in the UK or not, and
:03:07. > :03:12.decide the future. David Cameron has a Scottish name and Scottish
:03:12. > :03:17.heritage. The motto of the clan Cameron translates as "let us
:03:17. > :03:21.unite", the union, it seems, is in his blood. So he's not about to let
:03:21. > :03:26.Alex Salmond, who, whilst we are on the subject, has less prestigious
:03:26. > :03:30.her at this stage, dictate the timing or form of any referendum.S
:03:30. > :03:34.Had very damaging for Scotland. All the time business is asking, --
:03:34. > :03:39.this is very damaging for Scotland. All the time business is asking, is
:03:39. > :03:41.Scotland going to be part of the UK, should I invest, companies are
:03:41. > :03:45.asking those questions. It is rational to put to the Scottish
:03:45. > :03:50.people, would it be better to have a for fair and decisive question
:03:50. > :03:53.put earlier. We will not dictate this. Scottish devolution, in 1999,
:03:53. > :03:57.where a new Scottish Parliament took over much, but not all of the
:03:57. > :04:02.Government of Scotland, was supposeded to kill off any appetite
:04:02. > :04:06.for independence forever, and with it the SNP. But something very
:04:06. > :04:11.strange happened, something that the Labour architects of devolution
:04:11. > :04:19.never predicted, the SNP became even more popular. I heard a
:04:19. > :04:22.rumour! I think we won the election. So popular that they won an
:04:22. > :04:26.outright majority in the Scottish Parliament elections last year,
:04:26. > :04:29.eventhough the election rules were specifically designed to avoid any
:04:29. > :04:33.party getting a majority. What Salmond has done is play a
:04:33. > :04:36.long game. He has been a gradualist about this, he always told his
:04:36. > :04:40.party if they were patient, if they played along with the Scottish
:04:40. > :04:44.Parliament, if they stood for seats in it, eventually, eventually, they
:04:44. > :04:48.would find a gap in the unionists armoury and win the majority and
:04:48. > :04:52.stand on the verge of getting independence for Scotland. By
:04:52. > :04:56.playing that long game, it has worked for Alex Salmond. David
:04:56. > :05:00.Cameron knows he will be portrayed as an English meddleler in Scottish
:05:00. > :05:04.affairs, and may even drive more Scottish voters towards
:05:04. > :05:09.independence, however, he feels he has few options, particularly if he
:05:09. > :05:15.wants to help frame this debate. Alex Salmond wants to have a third
:05:15. > :05:17.option on any referendum ballotp paper. Called devolution max.
:05:17. > :05:22.However, David Cameron is determined it should be a straight
:05:22. > :05:25.choice between in the union or out. And that, rather than the timing of
:05:25. > :05:31.this referendum, is the real battleground here.
:05:32. > :05:35.The third option, devo max, or independence light, as it is called,
:05:35. > :05:38.is an attempt by Alex Salmond to give himself a fallback position.
:05:38. > :05:42.If he fails on the independence position, and all the opinion polls
:05:43. > :05:47.suggest it is unlikely he would win an immediate referendum on
:05:47. > :05:50.independence, he has the third way. He can appoint greater powers
:05:50. > :05:54.accrued to the parliament in Scotland and say it is a further
:05:54. > :05:58.step along the way to full scale independence. How clear is the
:05:58. > :06:02.constitutional law? Although the Scottish Government can hold an
:06:02. > :06:06.advisory referendum on pretty much anything it wants, it doesn't have
:06:06. > :06:08.the constitutional power to hold a binding one. Here the Westminster
:06:08. > :06:11.parliament is the only power in the land.
:06:11. > :06:15.Tomorrow, the UK Government will offer to lend the Scottish
:06:15. > :06:18.Parliament that power, for a limited period, if its conditions
:06:18. > :06:24.are met. The Scottish Government, I think,
:06:24. > :06:27.will, largely ignore this proposal. They won't entirely ignore it, it
:06:27. > :06:31.is useful for them to suggest this is an example of wanton
:06:31. > :06:36.interference. They don't have to act on this. I can't see why they
:06:36. > :06:38.would be attracted to it. This proposal would limit the choices,
:06:38. > :06:44.they are keen to have more powers, something between independence and
:06:44. > :06:47.the status quo, on the ballot paper. They are keen the referendum should
:06:47. > :06:50.be held at the end of the term of the Scottish Parliament, not sooner.
:06:50. > :06:55.There is nothing in this proposal attractive to the Scottish
:06:55. > :06:58.Government that I could see. If you look at the fuss caused by David
:06:58. > :07:02.Cameron's announcedment yesterday. It has nothing to do with the
:07:02. > :07:05.merits of independence, or the merits of staying in the UK, it has
:07:05. > :07:09.everything to do with the fact that we are not going to be allowed to
:07:09. > :07:13.have a referendum if Alex Salmond has his way, until the time had his
:07:13. > :07:17.choosing, not Scotland's choosing, when he decides it is best for him.
:07:17. > :07:21.That, I think, most people would find difficult to accept. Try and
:07:21. > :07:24.try again, may have been the spider's lesson, but Alex Salmond
:07:24. > :07:29.knows has probably only one shot at independence. If he gets wrong,
:07:29. > :07:36.well, chances are, he won't get another spin.
:07:36. > :07:38.Just before we came on air I talk to Scotland's Deputy First Minister,
:07:38. > :07:43.Nicola Sturgeon. Deputy First Minister, do you accept that the
:07:43. > :07:46.legal position is, that under the 199 Scotland act, it it is the UK
:07:46. > :07:48.parliament that has the power to decide the details of a
:07:48. > :07:52.constitutional referendum, this is not interference, it is just the
:07:52. > :07:57.way the law is? There is no doubt about the ability of the Scottish
:07:57. > :07:59.Parliament to hold a consultative and advisory referendum. That's
:07:59. > :08:04.what the Scottish Government has proposed to do. We fought the
:08:04. > :08:09.election on a very clear plan of to have that kind of referendum in the
:08:09. > :08:13.second half of this parliament. And I think it is unfortunate that the
:08:13. > :08:17.Westminster Government has sought to interfere in that today.
:08:17. > :08:20.understand that tomorrow the Scottish Secretary, Michael Moore
:08:20. > :08:25.will say, anything you would arrange would be advisory, as you
:08:25. > :08:29.accept, it would be open to legal challenge, the powers with
:08:29. > :08:32.Westminster. To help you out, he will temporarily transfer the power
:08:32. > :08:37.to the Scottish Parliament, provideded any referendum is fair,
:08:37. > :08:40.decisive and clear, a simple once and for all yes, no, vote on ifpdz,
:08:40. > :08:45.and not a second vote on greater powers of devolution. I don't
:08:45. > :08:47.accept the basis of that parliament. What I will say is this, if the UK
:08:48. > :08:52.Government believes that could be the legal position, had let them
:08:52. > :08:56.transfer that power, but let them do it without seeking to attach
:08:56. > :09:00.conditions. Because it is the attempt to attach conditions that I
:09:00. > :09:02.think is some what giving the game away today. They are trying to
:09:03. > :09:06.interfere and wrest control of the referendum from the Scottish
:09:06. > :09:10.Government. It is for the Scottish Government to decide the timing of
:09:10. > :09:13.the referendum. It iser for the Scottish people to ultimate -- it
:09:13. > :09:16.is for the Scottish people to ultimately decide the outcome of
:09:16. > :09:21.the referendum. Isn't it a dream come through, they will transfer
:09:21. > :09:24.powers to you, you say you want a yes/no vote, you want a fair,
:09:24. > :09:28.decisive and clear result, why not say yes? It is always our
:09:28. > :09:32.preference to have a straight yes or no question. We are not the only
:09:32. > :09:36.people with an opinion on the matter. This is a body of opinion
:09:36. > :09:39.in Scotland that wants additional powers, and more economic powers,
:09:39. > :09:43.short of independence. We have never, rightly, ruled out having
:09:43. > :09:46.that option on the ballot pap. We are democrats, we want to give the
:09:46. > :09:49.people of Scotland the right to decide their own future. The
:09:49. > :09:53.politicians calling now for a referendum to happen more quickly
:09:53. > :09:57.are the same politician who is spent the last four years trying to
:09:57. > :10:03.plokwo the referendum completely. The -- block the referendum
:10:03. > :10:07.completely. The SNP won the election overwhelmingly, and we
:10:07. > :10:11.have a mandate and Westminster should respect that. You are going
:10:11. > :10:15.to reject the offer because you want a yes/no vote, you want that,
:10:15. > :10:21.you have just said so? That is our preference. We started to with the
:10:21. > :10:25.UK Government saying that they wanted to set a time scale against
:10:25. > :10:28.the time scale that the Scottish Government won the election on. We
:10:28. > :10:32.have ended the election with them appearing, although we don't know,
:10:32. > :10:35.to retreat from that position. There are all sorts of rumours
:10:35. > :10:38.about splits within the coalition. The UK Government is in complete
:10:38. > :10:43.disarray over this. In Scotland, by contrast, the position is clear, we
:10:43. > :10:46.set out a clear position in the election. We won that election
:10:46. > :10:49.rather handsomely. I think Westminster should respect the
:10:49. > :10:53.democratic wishes of the Scottish people. Just so we can move on, you
:10:53. > :10:56.reject this offer? Let's see what the UK Government has to say. But
:10:56. > :11:00.if they are trying it attach conditions to the right of the
:11:00. > :11:05.Scottish people to decide their own future, then I think most people in
:11:05. > :11:08.Scotland will look very dimly at a Tory-led Government trying to
:11:08. > :11:16.undermine Scottish democracy. you quite pleased with this row?
:11:16. > :11:21.do think there is a sense in which the war, a Tory-led Government that
:11:21. > :11:25.seeks to interfere in a decision rightly for the Scottish people,
:11:25. > :11:28.the more support for independence will continue to grow. It has
:11:28. > :11:31.backfired spectacularly on the UK Government, on the Tories in
:11:31. > :11:35.particular today. We have heard George Osborne is in charge of this,
:11:35. > :11:39.so clearly it is a Tory initiative. We hear the liberals are less than
:11:39. > :11:43.happy about it. They are in complete disarray. By contrast the
:11:43. > :11:46.position of the Scottish Government couldn't be clearer. Can you also
:11:46. > :11:51.be clear for those who don't follow it closely what independence would
:11:51. > :11:56.mean, for all the big things in life on these islands, in terms of
:11:56. > :12:01.the pound, the euro, the Queen and the army, have you thought that
:12:01. > :12:06.through? The SNP's position is keeping the Queen as head of state,
:12:06. > :12:10.and we will remain with sterling until such a time as it is right to
:12:10. > :12:14.go into the euro. Independent means the big decisions that affect day-
:12:14. > :12:17.to-day life get taken here in Scotland by people in Scotland, the
:12:17. > :12:20.people who care about them most. That is thes sense of independence
:12:20. > :12:24.in every independent country the world over, why not different in
:12:24. > :12:28.Scotland. Of course we want aed God, positive, co-operative relationship
:12:28. > :12:31.of equals with the other countries of these islands, but that
:12:31. > :12:37.relationship equals with the power of decision here in Scotland is the
:12:37. > :12:40.essence of independence. There used to be a joke that you
:12:40. > :12:46.could fit all the Scottish Conservative MPs into a taxi, now
:12:46. > :12:50.you can fit them all into one chair. Here he is, the Scottish Office
:12:50. > :12:53.minister. She was very clear, there, you can't get awhich with attaching
:12:53. > :12:58.conditions to what the people of Scotland should vote on, when she
:12:58. > :13:03.and her party have got a democratic mandate to run this referendum as
:13:03. > :13:08.they see fit? I find difficult to understand why Nicola Sturgeon
:13:08. > :13:12.doesn't want to see a legal, fair and decisive referendum in Scotland.
:13:12. > :13:17.The Government tomorrow had make a statement about the legal position
:13:17. > :13:23.in relation to who can hold a referendum. If you want to attach
:13:23. > :13:27.conditions to that? What we will try to set out a basis on which a
:13:27. > :13:29.referendum could be held that wouldn't be the basis of any legal
:13:29. > :13:36.challenge. I don't think anybody, particularly the Scottish national
:13:36. > :13:40.part, who say they support independence, has been their very
:13:40. > :13:45.raison d'etre, would be the subject of any legal challenge. I'm sure
:13:45. > :13:50.they want a fair referendum, one that is held under the normal best
:13:50. > :13:54.practice for referenda, and they want a decisive outcome in the UK.
:13:54. > :14:02.What they will not concede is you have the right to tell them what
:14:02. > :14:05.the question should be. There are some people in Scotland who think
:14:05. > :14:09.that stopping with powers short of independence would be fine, why
:14:09. > :14:12.can't you concede to that? Scotland has two Government, I know Nicola
:14:12. > :14:17.doesn't like to acknowledge that. We have a Government in Westminster,
:14:17. > :14:20.elected less than two years ago, by the people of Scotlandments one of
:14:20. > :14:25.Scotland's Governments. We have the Scottish National Party Government
:14:26. > :14:29.at hole road that deals with devolved issues -- Holyrood, that
:14:29. > :14:32.deals with devolved issues the it is wholly appropriate for the UK
:14:32. > :14:36.Government to set out its position in relation to the constitution.
:14:36. > :14:40.Have you back down, however, of setting date of 2013, she says
:14:40. > :14:44.there is splits in the coalition over this, and you are in complete
:14:44. > :14:48.disarray, you have backed down over the date? It is the SNP that is in
:14:48. > :14:51.a wholly incomprehensible position, they havem campaigned for this to
:14:51. > :14:54.be independence in Scott -- they have campaigned for independence to
:14:54. > :15:01.be in Scotland. There will be an opportunity for referendum in
:15:01. > :15:07.Scotland, not subject tole challenge, fair and decisive -- to
:15:07. > :15:10.challenge, fair and decisive. The SNP went into Scottish Parliament
:15:10. > :15:16.elections on a manifesto for a referendum for independence. It
:15:16. > :15:19.didn't have anything at all in the manifesto on timing. Over the
:15:19. > :15:23.weekend you said it you would like to have it in 2013, it won't happen
:15:23. > :15:27.then, you have backed down from that? We would like the referendum
:15:27. > :15:31.to take place as soon as possible. It is, as the Prime Minister said,
:15:31. > :15:35.causing uncertainty. It has become a complete pantomime, will he,
:15:35. > :15:39.won't he call it. It is causing a distraction in Scottish Parliaments,
:15:39. > :15:43.it is the only issue that is really being discussed since the Scottish
:15:43. > :15:47.elections, despite the fact that Scotland, like the rest the world,
:15:47. > :15:52.is facing the global economic crisis. It needs to be reof solved
:15:52. > :15:55.once and for all. It is very -- resolved once and for all. It is
:15:55. > :16:00.very difficult to understand why the Scottish national part, who
:16:00. > :16:04.have supported independence and called repeatedly for an
:16:04. > :16:09.independence referendum, now want to prevar Kate it. Who would be the
:16:09. > :16:12.figurehead leading the unionist case in Scotland, David Cameron,
:16:12. > :16:16.George Osborne, Gordon Brown, yourself, who will take on Alex
:16:16. > :16:21.Salmond and beat him? I thinkle all the party that support the UK, --
:16:21. > :16:24.think all the parties that support the UK and keeping the UK together
:16:24. > :16:27.will play a part in that programme. And they will respect the people of
:16:27. > :16:32.Scotland in that. It is their decision. Why have they been so
:16:32. > :16:38.useless so far. If the unionist case is so strong, why is nobody
:16:38. > :16:46.making it? I don't accept that the unionist parties haven't made their
:16:46. > :16:49.case. They haven't made it in the way the SNP do, they are a party
:16:49. > :16:53.bound in a policy breaking up the UK. It is clear from all the
:16:53. > :16:56.polling to date, that the majority people in Scotland support Scotland
:16:56. > :17:00.staying in Britain. They don't want Scotland pulled out of Britain,
:17:00. > :17:04.they have voted SNP in the elections last year, because they
:17:04. > :17:08.felt Alex Salmond was the best person to be First Minister, the
:17:08. > :17:12.SNP had a number of attractive policies to them. Would David
:17:12. > :17:15.Cameron be the best person to lead a campaign for the union in
:17:15. > :17:19.Scotland? David Cameron is the Prime Minister Scotland, he will
:17:19. > :17:22.have a significant part to play in the campaign to keep Scotland in
:17:22. > :17:26.Britain. Don't you worry this is exactly the trap that the SNP would
:17:26. > :17:30.like you to fall in to. You are the only Conservative MP at Westminster,
:17:30. > :17:33.for north of the boarder, if David Cameron were to play a major part
:17:33. > :17:38.in this campaign, it would backfire? Had I don't think that is
:17:38. > :17:44.the case at all. I think the issues, what we want to get on and discuss,
:17:44. > :17:48.is about Scotland's part in the UK. Not about process, which the SNP
:17:48. > :17:52.want to get us bogged down in. I think the people of Scotland
:17:52. > :17:54.recognise the benefits of being in the UK, and they will see all the
:17:54. > :18:00.unionists parties campaigning for Scotland to stay in the UK. And
:18:00. > :18:03.that will be the outcome of any referendum, when ever it is hell.
:18:03. > :18:07.There are big changes in the Obama White House tonight, as the
:18:07. > :18:10.President's Chief of Staff, Bill Daley, is being replaced. In the
:18:10. > :18:13.middle of Obama's re-election campaign, in which the economy is
:18:13. > :18:16.the central issue. For millions of ordinary Americans, the American
:18:16. > :18:20.dream doing better than your parents has taken a battering.
:18:20. > :18:23.Recent studies suggest that moving up the economic scale is more
:18:24. > :18:29.difficult in the United States nowadays than in Canada, or western
:18:29. > :18:33.Europe. We report from Ohio on what could be the make-or-break issue
:18:33. > :18:42.for the Obama presidency, in a make-or-break state for
:18:42. > :18:45.presidential candidates. This economy took a bit hit, if you
:18:45. > :18:48.have a bad illness or hit by a truck, it will take a while for you
:18:49. > :18:54.to mend. That is what has happened to our economy. It is taking a
:18:54. > :19:00.while to mend. Part of Obama's mending is the rebirth of the motor
:19:00. > :19:06.industry. GM and Chrysler were on their knees, bankrupt, with
:19:06. > :19:11.incalculable costs to America's psyche, deliverance arrived with
:19:11. > :19:14.$60 billion of tax-payers' cash. were dead as a company. We seized
:19:14. > :19:19.to exist, and eaten up by the competition, they of would have
:19:19. > :19:22.taken our market share. Again, because President Obama and his
:19:22. > :19:28.administration had faith in clies letter we existed today, we realise
:19:28. > :19:35.we have -- Chrysler, we exist today, and we realise we have a future
:19:35. > :19:39.ahead of us. At Chrysler's Ohio plant the future will be different.
:19:39. > :19:43.There is less demarcation between management and production line.
:19:43. > :19:47.Workers feel involved, no-one is getting rich. People know we have a
:19:47. > :19:51.new lease of life here, we have to do whatever it takes to keep this
:19:51. > :19:55.plant open. I don't think we have gotten a raise, cost of living went
:19:55. > :19:59.away, it is still away. About eight years we have been at the same wage
:19:59. > :20:04.right now. You are actually getting less in real terms? Correct,
:20:04. > :20:08.because of the economy, people are willing to do work for less money.
:20:08. > :20:12.We are all very grateful for our job right here. We know the
:20:12. > :20:16.unemployment rate is up through the roof, we are grateful to have a job
:20:16. > :20:20.here. The Rennaissance in the American
:20:20. > :20:25.motor industry carries several lessons, workers and management are
:20:25. > :20:28.united, they are all in this together, up to a point. Beyond the
:20:28. > :20:33.car plants, the old vision of America as a haven of social
:20:33. > :20:37.mobility, that has been shaken. Out there in Ohio and beyond, whole
:20:37. > :20:42.swathes of the American work force, the American middle-classes, have
:20:42. > :20:52.been hurting. And the question in this election year is, when and if
:20:52. > :20:52.
:20:53. > :21:00.that pain is going to stop. Dayton Ohio has been decimated and worse.
:21:00. > :21:05.Since 2000, 15% of the people have left. The Ohio lawyer department a
:21:05. > :21:15.diary of the great depression in the 1930s, he could have been
:21:15. > :21:26.
:21:26. > :21:30.Eight decades on and the story is repeated. It is reckoned 25,000
:21:30. > :21:33.extra families have been blighteded by unemployment here in the last
:21:33. > :21:40.four years. - blighted by unemployment here in the last four
:21:40. > :21:44.years. They were the ones that got clobbered, some of them had really
:21:44. > :21:50.nice prolonged spells of employment in manufacturing jobs, that were
:21:50. > :21:54.paying them a decent wage. I think the fall for those people was very
:21:54. > :22:02.dramatic, but there were other people, working-class people, no
:22:02. > :22:06.matter how hard you tried, you simply can't find work.
:22:06. > :22:09.unemployment rate is now at its lowest in three years. We must call
:22:09. > :22:14.our first case, please. Recent studies suggest the poorest
:22:14. > :22:20.Americans have less chance ofs caping poverty than do the poor of
:22:21. > :22:26.Europe. How do you wish to plead? Not guilty. I'm totally humiliated.
:22:26. > :22:31.The courts get the fall-out. This judge says those convict can't pay
:22:31. > :22:36.their fines. It creates a bad cycle, if you can't collect your fines and
:22:36. > :22:42.costs, you can't get that money over to the general fund, to pay
:22:42. > :22:48.the employees, it is a weird accounting process in Ohio. We are
:22:48. > :22:53.already pretty minimum salary any way. Most of the people that appear
:22:53. > :22:57.in my court make more money than my clerks make. Court sittings have
:22:57. > :23:04.been cut to save costs, at one point it nearly closeded because
:23:04. > :23:09.they couldn't afford paper. Public spirited Ohio people chipped in.
:23:09. > :23:13.Your assistant suggested some people sent in toilet paper in to
:23:13. > :23:17.help out? A few of my close friends. These are some of the defendants?
:23:17. > :23:24.I'm a bit of a joker any way, they figure they would use that
:23:24. > :23:29.opportunity to get back at me. In 1948 Hollywood made a film,
:23:29. > :23:39.which for the next 250 years encapsulated the American ideal.
:23:39. > :23:40.
:23:40. > :23:44.Ska Mr Blandings builds his dream house. In a stunt63 perfect live-in
:23:44. > :23:51.replicas were createded across the country. Drop in and see us some
:23:51. > :23:57.time. This is that dream, made real, real estate, here in owe high heyo.
:23:57. > :24:02.Those post World War II days, of middle -- Ohio, those post World
:24:02. > :24:07.War II days of middle-class optimisim and security are all too
:24:07. > :24:12.distant. For many families in Ohio, it is a different story. In Dayton,
:24:12. > :24:16.agents for the Sheriff's office assess the value of properties
:24:16. > :24:22.repossessed. Foreclosed by the bank, because the mortgage isn't being
:24:22. > :24:27.paid. More than a million are taken over every year, each one a
:24:27. > :24:33.family's heartbreak. From the tumble down to the mansion,
:24:33. > :24:37.all are vulnerable. This is in a very good state. The this house was
:24:37. > :24:42.worth over a million dollars, now it is only half that. Everybody is
:24:42. > :24:49.losing money. I know that for a fact because I'm in the
:24:49. > :24:52.businessment I developed 1,060 farm into a golf course and residential
:24:53. > :24:58.community, even golf courses are struggling, golf is expensive.
:24:58. > :25:02.People can't afford to pay? That is exact low right. Obama wants to
:25:02. > :25:05.slow down the foreclosure process to give families more time to
:25:05. > :25:10.renegotiate, Republicans cannot to speed it up to liberate a stagnant
:25:10. > :25:14.market. What do the people in the frontline think? With so much
:25:15. > :25:21.unemployment in our area, people can't afford to buy houses. They
:25:21. > :25:24.can't go to the banks and get a loan. It is not a housing problem
:25:24. > :25:27.but employment? Particularly in our area. The idea of the bank working
:25:27. > :25:35.with the people, which President Obama wants to do is good, but the
:25:35. > :25:40.banks aren't doing it. It is a mess at the moment? It is a mess. It is.
:25:40. > :25:43.Look at the time, be smart, you have a two-point lead. An hour from
:25:43. > :25:48.Dayton, the Davies family watch their youngest shoot hoops. They
:25:48. > :25:52.have endured some troubled years. Bob, his brother, sister, brother-
:25:52. > :25:56.in-law and father-in-law all worked for GM, whose Dayton plant wasn't
:25:56. > :26:02.saved by the bailout. They have had little more than odd jobs since,
:26:02. > :26:05.and fear that is how it is going to stay.
:26:05. > :26:10.There is a big disparity between what I believe is the rich and the
:26:10. > :26:15.poor in this country now. Because the manufacturing jobs are not
:26:15. > :26:19.there any more. The good paying jobs that I haveen joyed in my life,
:26:19. > :26:22.my kids are never going to see in this country -- I have enjoyed in
:26:22. > :26:26.my life, my kids are never going to see in this country. You don't
:26:26. > :26:31.think it will come back? I don't think it will. The Daviess build
:26:31. > :26:36.their dream home on land that is in the family since the 1960s. Last
:26:36. > :26:40.week they put the lot, 16 acres, on the market. I was able to purchase
:26:40. > :26:44.it through working at GM, and get it back in the family and build our
:26:44. > :26:48.dream home. I would like to retire here, I would like to live here,
:26:48. > :26:52.for the rest of my days, we don't know with the economy the way it is.
:26:52. > :27:00.It seems like we keep dodging bullets through the last three
:27:00. > :27:05.years. We have been surviving. is a lot of prayer. This is the one
:27:05. > :27:09.thing we didn't want to have to sacrifice.
:27:09. > :27:13.Sacrifice was always part of the story Americans like to tell about
:27:13. > :27:17.themselves. While the politicians argue over big or small Government,
:27:17. > :27:21.or should taxes go up or down, the people whose votes they will seek
:27:21. > :27:25.come November, won't be fuelled. They know there is a lot that has
:27:25. > :27:35.gone from Ohio and elsewhere, and they fear much of it won't be
:27:35. > :27:36.
:27:36. > :27:42.coming back. I'm joined now by my guests who
:27:42. > :27:47.used to work for George Bush, and the adviser to vice-president of
:27:47. > :27:50.President Bush, Joe Biden. Looking at the report, does that mean for
:27:50. > :27:55.thousands of ordinary working Americans, the idea of social
:27:55. > :27:59.mobility, that part of the dream, has just gone? That may be a
:27:59. > :28:02.slightly harsh interpretation, in the sense that there still is some
:28:02. > :28:08.degree of mobility. What I think is very much correct, and certainly
:28:08. > :28:14.came through the story, is just how much that mobility has been
:28:14. > :28:18.diminish. How it has been denigrate by years of hammering away at
:28:18. > :28:25.American cobs -- Denisovich any grated by years of -- den any
:28:25. > :28:29.grated by years of hammering away for years at American jobs. Middle-
:28:29. > :28:33.class incomes, middle-class wages have been stagnant for a long time.
:28:33. > :28:36.I wouldn't say mobility has gone to zero and the American dream has
:28:36. > :28:40.completely fizzled. I would say climbing up the rungs of the ladder
:28:40. > :28:43.is much harder than it used to be, and people know it. Do you agree
:28:43. > :28:48.broadly with that. There is study after study saying the United
:28:48. > :28:52.States is falling behind Canada and some parts of western Europe in
:28:52. > :28:54.terms of social mobility, it as real problem for both parties?
:28:54. > :28:58.are right to pick Ohio, that is where the presidential election
:28:58. > :29:03.will be decide. It is wrong to think there is no innovation and
:29:03. > :29:06.change going on. In the US we are seeing a remarkable amount of
:29:06. > :29:11.manufacturing come back from Asia to the Midwest. These stories are
:29:11. > :29:19.important. They are about the innovation and the change, the
:29:19. > :29:27.enprepen neural risk-taking, to pour -- entreprenurial ris-taking,
:29:27. > :29:34.to portray the Midwest as a basket case is not right. The better life
:29:34. > :29:38.is still part of the American dream. But a study last year suggested for
:29:38. > :29:42.the past 30 years the very rich have got rich, but middle Americans
:29:43. > :29:46.aren't making it? This is correct, we have a social dislocation issue.
:29:47. > :29:52.My personal view on this is it is not a function of Government
:29:52. > :29:55.failing to redistribute wealth. In fact, I think that, as a Republican
:29:56. > :30:00.that doesn't make sense to me. What does make sense is two thirds of
:30:00. > :30:05.the net new jobs in the US economy are created by firms that employ
:30:05. > :30:10.less than 30 people. Anything that gets in the way that entreprenurial
:30:10. > :30:20.ris-taking, will inhibit social mobility. Not only that, I think it
:30:20. > :30:20.
:30:20. > :30:24.is important that we take class and shop class out of the school system,
:30:24. > :30:28.we have a generation that thinks college education equals success,
:30:28. > :30:31.and we have left a generation without skills to manage in a
:30:31. > :30:33.downturn. Against that background we have seen reasonable figures
:30:33. > :30:39.from the United States, unemployment is going down a bit,
:30:39. > :30:43.not as fast as you would hope. How fragile is all that, how is it
:30:43. > :30:48.feeding through to the people we are talking about? The US economy
:30:48. > :30:52.is moving slowly in the right direction. There is still a lot of
:30:52. > :30:57.fragility, it is not hard to imagine some of the problems out
:30:57. > :31:02.there throwing us off worse. We are climbing out of extremely deep hole.
:31:02. > :31:06.I probably don't nearly have as sunny a view of the manufacturing
:31:06. > :31:10.sector as we just heard. There is a point. There is some insourcing
:31:10. > :31:16.going on. The sector has added jobs in recent years. This is a sector
:31:16. > :31:22.that used to be 35% of employment in our hey day, it recently crossed
:31:22. > :31:29.10% going down. While there has been some improvement at the margin.
:31:29. > :31:33.A lot of the problem you got to in the inequality citation are from
:31:33. > :31:37.the study you quote. We have had technological gains, certainly
:31:37. > :31:41.there are folks in the economy who have done very well from those
:31:41. > :31:45.kinds advantages. But that is a very narrowly concentrated group.
:31:45. > :31:51.If you look at the incomes at the very top of the scale they have
:31:51. > :31:57.gone up, according to the study you have just mentioned, 280%, over the
:31:57. > :32:01.past three decades. The middle- class has gone up 30%, folks at the
:32:01. > :32:04.bottom have barely crept along. Some innovation and some gains, yes,
:32:04. > :32:07.but they have been hugely concentrateded at the top of the
:32:07. > :32:11.scale. That is not a controversial statement, it is widely accepted.
:32:11. > :32:17.How fragile do you think the American recovery is? People say
:32:17. > :32:20.one bit of good news is perhaps you are decoupled from the problems in
:32:21. > :32:26.Europe which is much worse, that is probably going into recession again,
:32:26. > :32:29.but the US not? And decoupled from Asia and China and its difficulties
:32:29. > :32:39.as well. Let's consider what is happening at the grass roots level.
:32:39. > :32:40.
:32:40. > :32:44.Its not only manufacturing, land prices are booming, it is energy.
:32:44. > :32:49.President Obama will have a landslide then, it will work for
:32:49. > :32:53.him? Yes but not enough. Americans are saying the size of Government
:32:53. > :32:57.and the debt burden it carries has become too large. If it is a
:32:57. > :33:02.question of cutting expenditure the public wants to do that. The
:33:02. > :33:06.critical issue where the social inequality issue is at the centre
:33:06. > :33:11.is about entitlement. That is where the country is deeply split about
:33:11. > :33:17.how to manage entitlement. significant is it that Bill Daley
:33:17. > :33:22.has gone as Chief of Staff in the White House, is that a surprise?
:33:22. > :33:26.There may be some big dole, it always is the day it happens --
:33:26. > :33:31.deal, it is the day it happens. In relevance to our conversation, he
:33:31. > :33:35.is a guy who is more closely tied to the business community, the
:33:35. > :33:39.administration has been, I think, sounding more sympathetic tom some
:33:39. > :33:43.of the ideas around inequality, wage stagnation, ideas you
:33:43. > :33:47.associate less with the requests of the business community and more
:33:47. > :33:51.with more progressive side of the ledgeer. In the story we just heard,
:33:51. > :33:55.I didn't hear one person complain about entitlements or the size of
:33:55. > :33:58.Government. What people are talking about out there, that is the
:33:58. > :34:02.Washington debate, that is the inside debate. What people are
:34:02. > :34:10.talking about out in the real world are their pay cheques and their
:34:10. > :34:14.jobs. That has to be the focus there. Two big developments with
:34:14. > :34:19.implications over Britain's place in Europe took place today, one in
:34:19. > :34:26.Berlin and one in London. At a meeting in Germany, President
:34:26. > :34:31.Sarkozy announced his intention to press ahead with a financial
:34:31. > :34:35.transactions tax. And Eddy Merckx appeared to reluctantly agree with
:34:35. > :34:42.Mr Sarkozy. Here Nick Clegg said any treaty on fiscal union should
:34:42. > :34:47.be folded into existing EU rules, which means to some interpretors
:34:47. > :34:51.that Britain might accept a treaty, despite David Cameron's refusal
:34:51. > :34:54.last month. President Sarkozy's visit to the birth place of
:34:55. > :35:01.national icon, Joan of Arc, remind us he faces election in four months.
:35:01. > :35:05.Trailing in the polls, he has tried to rouse his vote, with patriotism,
:35:05. > :35:09.castigating Britain for its tactics during the eurozone crisis, and
:35:09. > :35:15.moving ahead briskly with a tax on financial services.
:35:15. > :35:18.TRANSLATION: I'm fully committed it a tax on financial transactions. If
:35:18. > :35:22.with find ourselves in this situation, it is because there were
:35:22. > :35:27.scandalous and inadmissible deregulation of the financial
:35:27. > :35:31.market. It is only Norma that those who -- normal that those who
:35:31. > :35:36.contributed to placing us and the rest of the world in this place
:35:36. > :35:39.over the last three years should pay some tax. If we do not lead by
:35:39. > :35:43.example, will not be implemented. Britain has entered the lists
:35:43. > :35:47.against France again, opposing the new tax. I would say to the other
:35:47. > :35:52.European leaders if you want to do what Britain has, we have a bank
:35:52. > :35:55.levy, so the banks contribute, and stamp duty on share dealings, you
:35:55. > :35:59.can do that. But the idea of a new European tax, when you won't have
:36:00. > :36:04.the tax put in place in other place, I don't think is sensible, and I
:36:04. > :36:07.will block it. If Britain is opposed, Germany isn't exactly
:36:07. > :36:12.enthusiastic about President Sarkozy's plan. Chancellor Merckx
:36:12. > :36:16.knows that implementing the Tobin, Robin Hood, or financial transfer
:36:17. > :36:21.tax, whatever you call it, will be very hard without unanimity. She,
:36:21. > :36:25.today, preferred to emphasise moving ahood with the wider fistle
:36:25. > :36:29.kalpakage, -- ahead, with the wider fiscal package, opposed by Britain.
:36:29. > :36:33.TRANSLATION: I personally think there is a way for a transaction
:36:33. > :36:36.tax in Europe, we don't have agreement at the moment, I will try
:36:36. > :36:40.to get it through for 27 member states. We need to consider this
:36:40. > :36:44.agreement, and need to give a proposal in order to have a
:36:44. > :36:47.transaction tax. We will further fight for that. In fact, the more
:36:47. > :36:53.you lock at the proposed tax, that has produceded so much politicle
:36:53. > :36:57.kal heat in recent weeks, the less -- political heat in recent week,
:36:57. > :37:03.the less likely of an implementation in the near future.
:37:03. > :37:09.The UK has an opt-out on new taxes, and French banks warn implementing
:37:09. > :37:13.it in their country alone could be disastrous. If there is a Financial
:37:13. > :37:18.Transaction Tax in the euro area, that would drive business, perhaps
:37:19. > :37:22.to London. The euro area would not be possible to rule that financial
:37:23. > :37:28.transactions have to be taken here. If it comes about the UK might
:37:28. > :37:32.actually win a little bit. There are so many practical obstacles to
:37:32. > :37:36.implementing a financial transfers tax. The Irish Government, within
:37:36. > :37:40.the eurozone, has warned that unless it is done globally, it
:37:40. > :37:43.could produce a capital flight from European banks. So why do
:37:43. > :37:48.politicians, particularly in had France, and the UK, keep talking
:37:48. > :37:53.about it right now? The answer seems to have everything to do with
:37:53. > :37:57.national political imperatives, and very little to do with the unity of
:37:57. > :38:02.action, that they have urged repeated low at European Summits.
:38:02. > :38:07.When it comes to the wider agenda of stablising the euro, normal
:38:07. > :38:12.politics resumed today, after the Christmas lull, in more ways than
:38:12. > :38:15.one. Britain's Deputy Prime Minister, hosting European liberal
:38:15. > :38:19.colleagues, suggested the treaty opposed by the Prime Minister in
:38:19. > :38:28.December, should, eventually be accepted. We believe that it should,
:38:28. > :38:31.over time, be folded into the existing EU treaty. You don't get a
:38:31. > :38:36.permanent two parallel treaties working separately from each other.
:38:37. > :38:39.We all see this as a temporary arrangement, rather than one which
:38:39. > :38:44.creates a permanent breach at the heart of the European Union.
:38:44. > :38:48.They said in Berlin today, that the package of measures proposed in
:38:48. > :38:53.that treaty, could be agreed by the 1th of March. But the discipline it
:38:53. > :38:59.calls for on Government budgets may be harder for France to manage,
:38:59. > :39:08.than most eurozone countries. countries which supposedly are the
:39:08. > :39:15.problem, are already fulfiling the conditions of the freety. The
:39:15. > :39:19.schedule to have already -- treaty. The schedule is to have already a
:39:19. > :39:22.fiscal issue in balance. The problem will be in France where
:39:22. > :39:25.there is no political consensus at all on this kind of policy.
:39:25. > :39:32.President Sarkozy, fighting hard for re-election, will only have to
:39:32. > :39:37.balance his budget, if he wins. In an attempt to repeat his success of
:39:37. > :39:42.2007, his populisim may test even Germany's patience, as he seeks to
:39:42. > :39:46.shape the European debate in France's interest.
:39:46. > :39:51.I'm joined by the Lib Dem MEP and President of the European Liberal
:39:51. > :39:55.Democrats, Sir Graham Watson, who co-hosted the event here. And the
:39:55. > :39:59.Conservative MP. Can you help us out what Nick Clegg
:39:59. > :40:02.meant by folding one treaty into another? This is nothing that is
:40:02. > :40:06.not new. In previous cases sometimes, a number of countries
:40:06. > :40:09.have gone ahead and done something as a small group, that has
:40:09. > :40:14.eventually become part of the general European Union treaties.
:40:14. > :40:19.The idea of this is, if we get it right, is that this should be a
:40:19. > :40:23.very limit treaty, concentrateded on the fiscal discipline necessary
:40:23. > :40:28.to -- concentrated on the fiscal discipline necessary for the euro
:40:28. > :40:33.to survive and rolled into the rest of Europe. What is the point of the
:40:33. > :40:37.veto, if you veto it and fold it into existing treaties, that sounds
:40:37. > :40:40.confusing? What the Prime Minister, when he vetoed it, did not want to
:40:40. > :40:44.see, and right loo, is other European countries going off and
:40:44. > :40:48.doing a whole raft of things currently done between 27, just
:40:48. > :40:53.between the 17 member countries of the eurozone. Now Nicolas Sarkozy
:40:53. > :40:57.wants this to be a rather wider treaty. He wants to take decisions
:40:57. > :41:01.about the European single market, things that Britain and other non-
:41:01. > :41:05.euro countries are involved in, within the framework of a new
:41:05. > :41:09.inter-governmental treaty. It does sound like accepting what we have
:41:09. > :41:13.already vetos? I don't think it is. -- Vote toed? I don't think it is,
:41:13. > :41:17.it is recognising that, and the European countries need the
:41:17. > :41:21.discipline of greater fiscal co- ordination for the euro to survive.
:41:21. > :41:25.But trying to limit the treaty to that. It is really what the Prime
:41:25. > :41:32.Minister was arguing for before last December. There is no point in
:41:32. > :41:37.having a veto, is there? I disagree. In fact, if we take a step back, we
:41:37. > :41:40.have already a referendum lock in the first 18 months of being in
:41:40. > :41:43.coalition Government, we have introduced that. Any more powers of
:41:43. > :41:49.from our parliament to the European Parliament would come under a
:41:49. > :41:54.referendum. So, if, at whatever stage, the proposals that were
:41:54. > :41:57.talked about today at the Lib Dem conference, then presume blie we
:41:57. > :42:00.would have to put that to the country -- presumably we would have
:42:01. > :42:03.to put that to the country. That put to one side, the safeguards the
:42:03. > :42:07.Prime Minister was looking for is exactly the sort of things Graham
:42:07. > :42:11.is talking about. You are completely relaxed about the idea
:42:11. > :42:16.of folding it into existing EU treaties and that wouldn't cause
:42:16. > :42:20.any great problems for you or your party? The coalition Government, in
:42:20. > :42:23.agreement, and the Prime Minister went to Europe to effectively ask
:42:23. > :42:27.for modest protections around the single market, which Graham talks
:42:27. > :42:30.about, around protecting financial services around the whole of Europe,
:42:30. > :42:33.not just to carve out for London. Those are still in place. That
:42:33. > :42:37.agreement between the two parties and coalition is still in place.
:42:38. > :42:42.What Nick Clegg was referring to, is financial fiscal consolidation,
:42:42. > :42:46.that will take place now, to save the euro zone, it is something that,
:42:46. > :42:49.in the future, can be looked at. What I would say, our position is
:42:49. > :42:54.slightly different to the Liberal Democrats, effectively you would
:42:54. > :42:57.have to have a referendum to move powers away from London. On the
:42:57. > :43:02.other issue, the Financial Transaction Tax, will that happen,
:43:02. > :43:05.the French, President Sarkozy is very keen on it, perhaps not the
:43:05. > :43:10.French banks. Eddy Merckx seems to be doing along with it. Will it
:43:10. > :43:15.happen and will have implications for us even if we don't sign up for
:43:15. > :43:19.it? It is highly unlikely top happen, two of the member states,
:43:19. > :43:24.the UK and Sweden oppose it strongly. It is the kind thing that
:43:24. > :43:31.can't happen without unanimity.S unlikely to happen, because all of
:43:31. > :43:36.Europe knows, from Sweden's position, who tried it ten years
:43:36. > :43:40.ago, your financial services move elsewhere if you do it. If every
:43:40. > :43:45.country in the world would introduce it, and you had global
:43:45. > :43:52.agreement, that would be something that would work, but that won't
:43:52. > :43:59.happen. Are you broadly on the same page with this, this is President
:43:59. > :44:05.Sarkozy's populist bid, he knows won't happen? If they want to
:44:05. > :44:12.introduce a bank tax they should introduce a banker Liffey. Bankers
:44:12. > :44:18.won't pay the financial -- levy, bankers won't pay the Financial
:44:18. > :44:22.Transaction Tax, the pension funds will be paying it. We want it
:44:22. > :44:27.release globally. There is a study that shows we will lose just under
:44:27. > :44:33.2% of GDP, half a million jobs will disappear. Those transactions would
:44:33. > :44:38.of move to Singapore, Hong Kong or New York. Is there a danger if we
:44:38. > :44:43.didn't accept it, if the eurozone went along with it, much trade
:44:43. > :44:46.would move outwards to London? London has an opt-out. If they want
:44:46. > :44:51.to go ahad he, that is fine. If the rest of them went ahe head, would
:44:51. > :45:00.that have an impact? It would help London. Right, OK, thank you very
:45:00. > :45:05.much. A quick look at the front pages. Thep Times has Thierry Henry
:45:05. > :45:15.on the front page. He scored a goal tonight, we can't afford to run it
:45:15. > :45:31.
:45:31. > :45:33.tonight because we don't have the A damming report findings many of
:45:33. > :45:37.NHS staff find basic skills to do the job.
:45:37. > :45:42.That's all from Newsnight tonight, a daylight with this one, we will
:45:42. > :45:52.make an exception in this case. David Bowie was 65 yesterday. We
:45:52. > :46:03.
:46:03. > :46:09.# Snuk into the city # Strung out on lasers
:46:09. > :46:15.# And slashed back blazers # Pulling all the waiters
:46:15. > :46:25.# Talking about Munroe # Walking on know white
:46:25. > :46:25.
:46:25. > :46:32.# Everything tastes nice # Call Jean genie
:46:32. > :46:35.# Jean genie Colder at the end of the week, for
:46:35. > :46:40.the time being a mild story on Tuesday. Temperatures starting the
:46:40. > :46:44.day above freezing, a mild day. A lot of dry weather. The wet stuff
:46:44. > :46:50.across the north of Scotland. Mid- afternoon across the heart of
:46:50. > :46:54.England, predominantly dry. Some glimpses of wintry sunshine. Wind
:46:54. > :46:59.across southern areas loyalty and pleasanter for the outside. Across
:46:59. > :47:02.the south west, after a rather damp start things could cheer up with
:47:02. > :47:07.brightness to the east of the moors. Parts of South Wales too. Cheering
:47:07. > :47:11.up nicely through the afternoon. Further north it will stay cloudy
:47:11. > :47:14.with damage across Snowdonia, mist over the high grown. Damp and
:47:14. > :47:17.dreary afternoon across parts of Northern Ireland, with thicker
:47:17. > :47:22.cloud producing outbreaks of rain, particularly in the west. The
:47:22. > :47:29.really wet stuff will be across the far north of Scotland, blustery
:47:29. > :47:32.winds here. One more mild day, as we go into Wednesday, once more
:47:32. > :47:37.temperatures will be widely up into double figures north and south. The
:47:37. > :47:42.price we pay for that is aed good deal of cloud, limited -- a good
:47:42. > :47:48.deal of cloud, limited brightness. We can see a change at the end of