02/02/2012 Newsnight


02/02/2012

Richard Watson continues his investigation into the pay of Ed Lester, head of the student loans company, on the day that the government announces he will pay tax at source.


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Tonight, what's the answer to this? Which minister or ministers signed

:00:10.:00:15.

off this tax avoidance scheme, and on what date? Will he say which

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minister or ministers signed off the tax arrangements on this deal?

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Newsnight answers the question the Chief Secretary to the Treasury

:00:23.:00:27.

could not. Which ministers signed off the deal that let a senior

:00:27.:00:31.

public servant avoid paying thousands of pounds a year in tax.

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11 hours after the revelations on this programme, the Government

:00:37.:00:41.

announces the student loans chief's current tax arrangements will stop

:00:41.:00:45.

immediately. Is the whole tax avoidance scheme

:00:45.:00:48.

one to be gotten rid of. We will debate.

:00:48.:00:52.

In Egypt protestors are met with teargas, as the 74 dead from

:00:52.:00:56.

yesterday's football riot are mourned. Is the state doing

:00:56.:01:02.

anything to avoid the bloodshed. player spoke to me and said you

:01:02.:01:06.

can't imagine what it was like, a fan died in my arms in the dressing

:01:06.:01:10.

room. Both sets of players think this has nothing to do with

:01:10.:01:13.

football, but somebody is trying to cause some sort of unrest in the

:01:13.:01:17.

country. Should the Church of England bless

:01:17.:01:21.

same-sex partnerships, the church says it doesn't really know, how is

:01:21.:01:26.

that for decisive. We will ask Giles Fraser, who resigned from his

:01:26.:01:29.

post last year, whether the church should bend to the political

:01:29.:01:34.

fashions of the day. Rembering Lucian Freud, an the evening of a

:01:35.:01:38.

major retrospective of his paintings, he speak to his daughter,

:01:38.:01:42.

Esther. He accepted him exactly how he was. He was a very interesting

:01:42.:01:45.

and exciting father to have. I could see he was obviously

:01:45.:01:55.
:01:55.:01:57.

different from other people's fathers, but I always felt lucky.

:01:57.:02:00.

Good evening, revelations by this programme last night that the chief

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executive of the Student Loans Company was avoiding paying tens of

:02:03.:02:07.

thousands of pounds in tax, in an arrangement signed off by senior

:02:07.:02:11.

ministers, has led to a dramatic re-think by the Government. The

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Chief Secretary to the Treasury, Danny Alexander, told MPs in

:02:14.:02:17.

response to an urgent parliamentary question, that Ed Lester's tax

:02:18.:02:21.

would now be deducted at source, and he's ordered all other

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Government departments to do the same to any full-time employee

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operating under the same sort of scheme. Tonight Newsnight has seen

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the letter that universities' minister, David Willetts, wrote to

:02:33.:02:36.

the student loans chairman, in which he states the tax arrangement

:02:36.:02:41.

had been accepted at the very top of Government.

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The eye of the storm, in September 20089, computer failure at the

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Student Loans Company left tens of thousands without funds.

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One year on, the coalition and its universities minister, David

:02:54.:02:59.

Willetts, arrive to revel in the appointment of the loans company's

:02:59.:03:03.

new boss. His man, Ed Lester, in the red tie, would ensure meltdown

:03:03.:03:09.

was never repeated. It wasn't. But trouble comes in many guises,

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what wasn't revealed until last night, was how Mr Lester's pay

:03:12.:03:15.

would be channelled into the private company he runs from his

:03:15.:03:21.

home on the Thames. It's tax efficient, tax avoidant,

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and it has landed the Government in a world of trouble. So who is to

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blame? Or in the words of Dennis Skinner: Which minister will carry

:03:32.:03:38.

the can for this mess? I'm here answering questions about it.

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Alexander, the strerb secretary, was facing the music -- Treasury

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secretary, was facing the music. He announced that Mr Lester would now

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pay tax at source, and there will be a review across all the

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departments over who was using tax avoidance schemes and why. He

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refused to explain how the Government had approved Mr Lester's

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tax scheme. We know the higher Education Minister signed this deal

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off. Will the Chief Secretary for the Treasury acknowledge corporate

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responsibility across Government that this was signed off by

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Government for all his protestations now. Which minister

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or ministers signed off this tax avoidance scheme, and on what date?

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Will he say which minister or ministers signed off the tax

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arrangement ones this deal? What I can tell the honourable gentleman

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is what I said already, I signed off the salary level in this case,

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the terms and conditions, the terms and conditions of the

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appointment...But Still no word on tax.

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So which minister did approve Ed Lester's tax avoidance arrangements,

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perhaps Newsnight can help answer the question Danny Alexander found

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so hard. On December 15th, 2010, the Student Loans Company wrote a

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letter to the universities' minister, David Willetts. It asked

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his approval to give Ed Lester a contract on pay of �182,000 a year.

:05:04.:05:14.
:05:14.:05:18.

That current concession was the arrangement allowing Mr Lester's

:05:18.:05:22.

pay to go direct without deductions at source, to his own private

:05:22.:05:32.
:05:32.:05:40.

company. The following week Mr That's Danny Alexander.

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We took the course pond dent back to Westminster tomorrow --

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correspondence back to Westminster today, and showed it to the Labour

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minister, Meg Hillier. It says it is agreed by the Chief Secretary to

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the Treasury, which given what he said today that is interesting, and

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signed off by David Willetts. It is clear what the answer is. I'm

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amazed, though repeatedly asked in the House today, the Chief

:06:04.:06:07.

Secretary to the Treasury didn't answer who was responsible.

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does bear responsibility, looking at this? Clearly David Willetts

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does. But from looking at this, we need to ask more questions from the

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Chief Secretary to the Treasury, it says in the letter from David

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Willetts that Danny Alexander has signed this off. I have been a

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minister, you don't just get a letter like this in your red box,

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you get a full attachment from the Civil Service explaining all the

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background. I would be surprised if the Chief Secretary to the Treasury

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didn't see that background too. He should have asked questions when he

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saw this letter. While the Treasury is still insisting tonight that

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Danny Alexander was told nothing about tax, David Willetts'

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department says the terms and the conditions of Mr Lester were

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approved across Government. In the past 24 hours, Newsnight's

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been inundated with calls and e- mails from all over the country,

:06:53.:06:57.

saying -- of people saying they have personal knowledge of highly-

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paid individuals in the public and private sector, on similar tax

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efficient arrangements. Chief concern in the public sector is

:07:04.:07:09.

expressed over the NHS and local Government.

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So like most of the rest of the country's work force, the head of

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the Student Loans Company, will find his next pay slip is net, not

:07:17.:07:21.

gross. Meanwhile, a Government which told the nation we are all in

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this together, has yet to confirm who was in the know about Mr

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Lester's deal. Despite a second day of asking the

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Government they still don't wish to be interviewed on the issue. We're

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joined by Margaret Hodge, chair of the Public Accounts Committee.

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Thanks for coming in. Danny Alexander said he wasn't aware of

:07:41.:07:47.

any tax benefit, does that make sense to you? No, not at all.

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Because it does appear, from the course pond dense, and I saw the

:07:53.:08:03.
:08:03.:08:06.

course pond dense that -- From the letters that it was signed off by-

:08:06.:08:09.

election Election. I have been a minister too, you would get a lot

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of details before signing off an arrangement of that sort.

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What he said was the salary level was what he concerned himself with,

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and the terms of conditions, whatever that means, he didn't talk

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specifically about the tax? It is very difficult to know precisely

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what Danny Alexander did know. That is why my committee will start an

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inquiry into this, we are particularly interested as to

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whether or not the scheme that provided a tax avoidance scheme for

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this particularly high- paid public servant exists elsewhere in

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Government. You can understand someone on a consultancy basis,

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doing it for a short-term, or covers if someone's sick, or on

:08:51.:08:55.

maternity leave, those situations. You can understand that those sort

:08:55.:09:00.

of consultants might have their pay, through a company of a sort. But

:09:00.:09:05.

for a public servant, running a major public body, working full-

:09:05.:09:09.

time, I really do think, I have been saying it all day, I really do

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think it is hugely important that the Government should lead by

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example. Can I just say something to you, Danny Alexander said in the

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House today, that he was going to stop all schemes. I have managed to

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get hold of a letter that he sent round all the top civil servants to

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ask if they can give information as to who is being paid on the basis

:09:30.:09:37.

of a tax avoidance scheme. What this letter actually says is,

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"artificial tax avoidance should always be regarded as a novel and

:09:40.:09:46.

contentious use of public resources, so if a public sector organisation

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is considering a proposal, using tax avoidance, it should consult

:09:51.:09:58.

its usual Treasury contacts, and HMRC, before going ahead ". That

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doesn't sound to me as if he's ensuring there are no further

:10:02.:10:05.

employees in the public sector. think that letter says he's not

:10:05.:10:08.

ruling out this kind of tax arrangement in future? I think he's

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not ruling it out in the way that I nevered from what he said in the

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House today -- infered from what he said in the House today. I welcomed

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the quick change of heart in the house today, we have to understand

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what it means, and understand the role he played in agreeing the

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particular circumstances. We know for example of the Chief Operating

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Officer of Rural Payments Agency was paid more than �300,000 from a

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third party, in 2009/10, when the Labour Government was still in

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charge, and presumably had signed off exactly the same arrangement.

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There must be hundreds of these cases? I heard that allegation in

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the House, if that was the case I would be as shocked about that as I

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am about the chief executive of the students loans company.

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Interestingly enough, we don't normally call ministers to my

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commit year, we look at value for money and implement -- committee,

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we look at value for money and implementation of policy. There is

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a difference between appointing someone as a full-time employee to

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run an organisation, they should pay, like you and I do, their

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national insurance con tribbuegss and their tax. You -- Contributions

:11:30.:11:35.

and their tax. We will certainly look at it. There is a difference

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in that and bringing in somebody on a short-term contract to cover an

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absence or a position if somebody has been dismissed or a maternity

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leave, those sorts of situations. That is why you can't conflait the

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two. This appointment was a full- time appointment, to run a non-

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departmental public body, it is not acceptable. The Government should

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lead by example. We will debate this further and discuss whether

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tax avoidance is a force for good or evil. We have the columnist for

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the Conservative Home website, and director of Europe Economics, a tax

:12:17.:12:23.

specialist and author Eoin Jones. Do you think that Danny Alexander

:12:23.:12:28.

moved very quickly to close that tax arrangement, was he right to do

:12:28.:12:31.

so today? It is important to distinguish between cases in which

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tax is avoided by doing something which is substantially different

:12:35.:12:39.

from the situation in which you would incur tax. Tax ought to be

:12:39.:12:42.

associated with some kind of activity. If there is no change in

:12:42.:12:46.

the real world, and you have merely rebadged an activity to try to

:12:46.:12:50.

avoid tax, my understanding is normally HMRC would not permit that.

:12:50.:12:54.

This was wrong, this case was wrong? I don't know if it is wrong,

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it is surprising, I don't know the details of this case. I find it

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surprising that would happen, that kind of forebearance would lap for

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anybody other than some jet setting multibillionare, where you might

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have a different arrangement. In terms of general principle, it is a

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genuine mistake of Danny Alexander going down the route of rhetoric

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saying there is no place for tax avoidance in Government at all.

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People might ask questions about the tax arrangements of the many

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mull toe millionaires in the cabinets. One of the points about

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tax avoidance is it is desirable and perfectly moral. When it

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involves a change in activity, the Government encourages us to avoid

:13:31.:13:35.

taxs in all kinds of ways, when it places special taxes on cigarettes

:13:35.:13:39.

and alcohol, it wants us to consume less of them. That is about trying

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to change people's behaviour, that is specific. Let me ask you if you

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think that tax avoidance can be desirable and morbl? Absolutely not.

:13:47.:13:51.

We are currently -- morbl? Absolutely not, we are currently

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going through the biggest cuts since the 1920s, we are promise bid

:13:55.:14:00.

George Osborne we are in it together. Many people -- promised

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by George Osborne that we are in it together. That is on the backs some

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of the poorest people in this country. Yesterday Government MPs

:14:07.:14:11.

voted, for example, to take away benefits from cancer patients, and

:14:12.:14:16.

yet up to 25 billion is being lost through tax avoidance. That is

:14:16.:14:21.

money which could, from wealthy individuals, perfectly legally.

:14:21.:14:26.

are not contesting the fact it is a very legal, legitimate process to

:14:26.:14:30.

go through? In a sense that makes it even worse. If we talk about

:14:30.:14:36.

benefit fraud, we hear a lot about benefit fraud, it is worth about

:14:36.:14:40.

�1.2 billion according to Government estimates. The

:14:40.:14:45.

Government comes down like aen to of bricks from -- tonne of bricks

:14:45.:14:51.

on anyone who crosses the line. But wealthy individuals can exploit the

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a time through the worst cuts since the 1920s, it is morally

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indefensible. There is this idea that it is always the wealthy that

:15:03.:15:08.

avoid tax, and it is the middle who will do it by tax efficiencies and

:15:08.:15:12.

savings? It is a misconception. We are dealing with something called a

:15:12.:15:15.

personal service company. Those were used around the turn of the

:15:15.:15:18.

millennium, by lots of IT consultants. Actually there is a

:15:18.:15:23.

rule that came in, IR35, a bit of jargon, that really says if you

:15:23.:15:26.

would have been employee, if you didn't have this company, then you

:15:26.:15:31.

should really be treated like an employyo. But if, actually, you

:15:31.:15:34.

have, for example, multiple contracts going on at the same time,

:15:34.:15:37.

if maybe you can choose whether you do the job or you send someone else

:15:37.:15:41.

to do it, whether you have some risk of loss in carrying on your

:15:41.:15:45.

business, then it is perfectly acceptable to have all of those

:15:45.:15:50.

contracts paid into your company which itself pays corporation tax.

:15:50.:15:55.

Is it middle income earners that use this, or predominantly the very

:15:55.:16:00.

wealthy? It is across the board. A lot of people will go to their

:16:00.:16:03.

accountants and say should I set up as a company or sole trader. There

:16:03.:16:09.

is a number of reasons for people to incorporate rather than a self-

:16:09.:16:12.

employed people. It is hypocritical to say, if somebody on a middle

:16:12.:16:16.

income, more than the average wage, is trying to find efficient ways of

:16:16.:16:20.

saving it, because they might not have a pension or maternity leave,

:16:20.:16:23.

you wouldn't have a problem with that, would you? When we are

:16:23.:16:26.

talking about the level of tax avoidance in this country, we are

:16:26.:16:30.

talking about those who have access to top accountants, who are able to

:16:30.:16:34.

exploit the loopholes that exist in this country. If we are talking

:16:34.:16:39.

about tax efficiency, take called tax efficiency, Sir Philip Green,

:16:39.:16:45.

who runs Top Man, a multibillion air strikes he got paid �1.2

:16:45.:16:53.

billion in dividends, because the wife multibillion air strikes he

:16:53.:16:58.

got paid �1.2 billion in dividends, but because his wife is the

:16:58.:17:02.

director of the company and living in Monaco, he got hold of most of

:17:02.:17:08.

that money. So individuals like Philip Green can get hold that have

:17:08.:17:11.

framework, not accessible to ordinary people, most people

:17:11.:17:16.

struggle to support that. disagree fundamentally, it is this

:17:16.:17:20.

line of thought representing an attack on the thought of private

:17:20.:17:24.

property. We have tax in respect of specific activity and uses we make

:17:24.:17:29.

of our resources. If the law does not impose taxes on that, we don't

:17:29.:17:33.

have any obligation to arrange our activities in ways that make us be

:17:33.:17:37.

liable to tax. That's just a mistake. Once we start saying, no,

:17:37.:17:40.

the law is passed and there is some sort of general intention to take

:17:40.:17:45.

some of your stuff, if you don't behave in ways by this general

:17:45.:17:50.

intention, we will take the stuff any way, that is an attack on the

:17:50.:17:55.

concept of my personal ownership on things. I think we don't have a

:17:55.:18:00.

moral obligation to pay any more tax than the state imposes on us.

:18:00.:18:04.

This is a deep philosophical question, but eye singsly do you

:18:04.:18:08.

think that hold -- essentially, do you think that holds, if businesses

:18:08.:18:12.

find ways of not paying as much tax as they want to, they are more

:18:12.:18:18.

likely to invest in the UK and stay here? Rules play be established to

:18:18.:18:21.

support an individual in creating their own business. Which is what I

:18:21.:18:25.

understand these sorts of rules to be. When they are then exploited,

:18:25.:18:33.

legally, but exploited, to bring greater benefit to individuals who

:18:33.:18:39.

should anybody that catagory, that is a tax avoidance loophole we

:18:40.:18:43.

should close. If that expectation brings more jobs, employment and

:18:43.:18:48.

growth to the economy, do you start calling it expectation and call it

:18:48.:18:53.

efficiency? Well, I don't think, remember that when you pay your

:18:53.:18:58.

taxes, those taxes are money that is used also to create jobs and

:18:58.:19:05.

services. It isn't an either or, in the way you suggest. I think in

:19:05.:19:10.

erpls it of public services, where I started, if -- terms of public

:19:10.:19:14.

services, if you are an employee, as this person appeared to be, he

:19:14.:19:17.

took advantage of a scheme that may have been established to help

:19:17.:19:20.

individuals grow their own business, or have a portfolio of employment,

:19:20.:19:26.

he took advantage of that to pay less tax, and the disbenefit of

:19:26.:19:31.

that, the people who suffer, are actually the public that we are

:19:31.:19:35.

talking about that don't get the money they want. This must be

:19:35.:19:38.

widespread? One fundamental issue, going back to the issue of what

:19:39.:19:42.

level of wealth is employed in using a personal service company. I

:19:42.:19:46.

was interested in consulting the revenue website today, one of the

:19:46.:19:48.

deciding factors, to help individuals work out whether they

:19:48.:19:54.

are caught by the rules, is do you bring your own tools, or do you use

:19:54.:20:04.
:20:04.:20:08.

that of your client? Just talking about the tools it is talking about

:20:08.:20:14.

plumbers and painters, not people with technological jobs. Small

:20:14.:20:18.

businesses are facing clampdown from HMRC. Just talking about they

:20:18.:20:23.

employ workers and bringing wealth into the economy. Most people

:20:23.:20:25.

accept that regardless, all businesses have to play by the

:20:25.:20:30.

rules of a country. If we take Philip Green, who doesn't pay a

:20:30.:20:36.

living wage to his employees, those wages end up being topped up by the

:20:36.:20:41.

taxpayer by tax credits. He's not here to defend that? The HMRC faces

:20:41.:20:47.

huge cuts, which means it won't be able to enforce. Is this about

:20:47.:20:50.

political momentum of the fairness agenda, do you broadly think that

:20:50.:20:53.

it's not fair, because some people are earning a lot more than other

:20:53.:20:57.

people, is that where you would start from? No it is the fact that

:20:57.:21:00.

at the moment the top 20%, for example, pay less as a proportion

:21:00.:21:07.

of their income than the bottom 20%. It is about the...It Is a

:21:07.:21:11.

combination of a collectivisation of the notion of property, plus,

:21:11.:21:16.

however, a sense that particular schemes in particular cases apply

:21:16.:21:18.

to different individual that is wouldn't apply to the rest of us.

:21:18.:21:23.

That is at the core of the sense of unfairness about this specific case.

:21:23.:21:28.

Who or what was behind the bloody violence that saw more than 70

:21:28.:21:32.

people killed at an Egyptian football riot last night. Today,

:21:32.:21:36.

thousands of demonstrators had teargas fired at them in Cairo's

:21:36.:21:41.

Tahrir Square, as they attempted to carry the protests to the door of

:21:41.:21:44.

the Interior Ministry, whom many blame for the violence. Questions

:21:44.:21:48.

are being asked as to whether there was a political motivation behind

:21:48.:21:52.

the rioting, from supporters of the old Egyptian regime. We will debate

:21:53.:21:59.

where this leaves Egypt's political future.

:21:59.:22:06.

As the train from Porto Santo Stefano pulled into Cairo today, --

:22:06.:22:12.

Port Said, pulled into Cairo today, relatives from those at the game

:22:12.:22:15.

waited. TRANSLATION: My son hasn't answered his phone since yesterday,

:22:15.:22:20.

and I want to know what is going on, he's 18 years old, please, please

:22:20.:22:24.

help look for him. On the streets of the Egyptian

:22:24.:22:29.

capital, there was as much anger as grief. Head to go Tahrir Square,

:22:29.:22:39.
:22:39.:22:40.

supporters of of one of the country's most formidable teams.

:22:40.:22:45.

They call themselves The Ultras, they believe the attack on them

:22:45.:22:48.

last night was an act of revenge, orchestrated by the security forces.

:22:48.:22:55.

This was the scene minutes after the local team, al-Masry,

:22:55.:23:00.

unexpectedly beat al-Ahlyly the visitors.

:23:00.:23:03.

Police appeared to standby as the pitch was invaded from the stands,

:23:03.:23:08.

men, armed with knives, attacked the team's players and support yos.

:23:08.:23:13.

Both the players of Alaa and al- Masry have no doubt this was

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

allowed to happen. They awe -- Damhon Albarnly, and Alaa -- Al-

:23:25.:23:28.

Ahly and all Massa have no doubt this was allowed to happen. One of

:23:28.:23:37.

the players said they have no doubt, you couldn't imagine it a fan died

:23:37.:23:45.

in their arms. Some Al-Ahly were stabbed and most clubbed, most were

:23:45.:23:49.

killed in the crush as they tried to desperately escape. Were the

:23:49.:23:53.

perpetrators local fans who hate their long standing rivals, some

:23:53.:23:56.

say not. A former player of the club, he was just outside the

:23:56.:24:00.

stadium, he said that at half time, and second half and towards the end

:24:00.:24:06.

of the game, people were arriving in taxies, armed, and being allowed

:24:06.:24:16.
:24:16.:24:19.

in to the taid yum. Even -- stadium, eventhough they weren't part of the

:24:19.:24:24.

game. Today the first bodies were buried.

:24:24.:24:28.

With the tensions in Egypt unfinished, many refuse to believe

:24:28.:24:31.

that the police failure to keep order at last night's game was

:24:32.:24:36.

simply incompetence. They believe the tragedy was deliberately

:24:36.:24:40.

provoked, or allowed to happen by supporters of the old regime.

:24:40.:24:43.

Perhaps specifically by the ruling Military Council, to try to show,

:24:43.:24:48.

that without a firm hand from above, Egypt may dissolve into chaos.

:24:48.:24:55.

It is no coincidence, say conspiracy therapists, say it is

:24:55.:25:01.

exactly one year of the battle of the camel, the day the Mubarak

:25:01.:25:06.

regime sent camels and shoress into Tahrir Square to crush the

:25:06.:25:10.

revolution. Those chooses chose last night to show they haven't

:25:10.:25:14.

gone away, despite democratic elections and the suspension of

:25:14.:25:19.

some police powers. This is a way to say they will not give up power,

:25:19.:25:22.

they want the Egyptian people and break the revolution and the

:25:23.:25:29.

Egyptian people. They have been forced to suspend the emergency law

:25:29.:25:33.

throughout this week, throughout this week we have seen a heightened

:25:34.:25:37.

and increased criminal activity. It is another way to scare people and

:25:37.:25:42.

have the Egyptians beg the Military Council to assume more power and

:25:42.:25:47.

responsibility. But is it possible that the police, who themselves

:25:47.:25:50.

demonstrated during the fall of Mubarak last year, and who later

:25:50.:25:54.

largely disappeared from the streets, are simply no longer

:25:54.:25:58.

capable of controlling an ever more volatile country. There are so many

:25:58.:26:02.

problems in Egypt today, many of them are blamed on all kinds of

:26:02.:26:07.

conspiracy theories, that is not true. There are some systemic

:26:07.:26:11.

problems with the legacy of Mubarak. Shall we say the dysfuntionality of

:26:11.:26:19.

the Egyptian state is a legacy of Mubarak.

:26:19.:26:25.

But tonight, with the Ultras, and thousands of other protestors,

:26:25.:26:31.

marching on the Interior Ministry, and braving teargas, angry at the

:26:31.:26:34.

security forces and the failure so far to complete the transition to

:26:34.:26:40.

democracy, is driving a new cycle of violence.

:26:40.:26:43.

The conspiracy theorists will say that is exactly what the

:26:43.:26:50.

authorities wanted. With me now is Nesrine Malik, a

:26:50.:26:55.

Middle East specialist, and Dr Hossam Abdalla, of Egypt's National

:26:55.:26:59.

Association for Change, a coalition of mainly secular opposition

:26:59.:27:06.

parties. Welcome to you both. Can we, Dr Abdalla, see this as simply

:27:06.:27:10.

incompetence, bad crowd organisation? Not at all.

:27:10.:27:13.

It comes as a series of different things happening throughout. It is

:27:13.:27:19.

not only about what happened yesterday, in November 42

:27:19.:27:24.

Christians, Coptic, have been killed, and another 40 have been

:27:24.:27:28.

killed in November, and then in December another 17 or 18, all

:27:28.:27:33.

killed by the army, directly being shot. In this country, there has

:27:33.:27:37.

been scaremongering throughout the country, that the 25th of January

:27:37.:27:42.

will descend into chaos. More than one million people went orderly

:27:42.:27:46.

into the street to continue the revolution, despite all the things

:27:46.:27:51.

the army were putting. The army want to stay in power by any means.

:27:51.:27:57.

The only reason they have reduced their state to June, is the

:27:57.:28:02.

pressure of the people. If you want to find it, you can definitely see

:28:02.:28:06.

landmarks and points along the way? It is a bit of both, to be honest.

:28:06.:28:10.

There are lots of indication that is there is something suspicious

:28:10.:28:14.

happening, something conspiratoral did happen in the stadium, there is,

:28:14.:28:18.

as your guest on the report said, there is a legacy of a dysfuntional

:28:18.:28:22.

state. I think it is a combination of these two things. You have a

:28:22.:28:27.

security system and a police system that has melted away, since January

:28:27.:28:32.

25th of last year. There is some kind of passive aggressive

:28:33.:28:36.

behaviour on behalf of the police forces. What do you mean by that?

:28:36.:28:39.

The police is essentially controlled by the military, they

:28:39.:28:42.

are now the state? But the police independently has its own problems,

:28:42.:28:48.

with the football Ultras, they were effectively defeated by them in the

:28:48.:28:51.

revolution. I don't think it is unreasonable to assume they

:28:51.:28:56.

deliberately held back. In some kind of passive aggressive gesture,

:28:56.:29:03.

not to intervene, when the conflicts began. I don't think the

:29:03.:29:06.

fact it is incompetence makes it any less of a crime, it is still a

:29:06.:29:11.

huge failure. You are saying it is failure to react as opposed to

:29:11.:29:15.

fermenting the situation? I think it is a combination of the things.

:29:16.:29:20.

There are two levels here, failure or incompetence both should be

:29:20.:29:25.

really defeated F the army after one year of rule is incompetent, or

:29:25.:29:28.

conspiring against the people to create a state of chaos, in which

:29:28.:29:33.

they can continue. In both cases Government should move into

:29:33.:29:36.

civilian hands. We have an elected parliament, parliament should take

:29:36.:29:42.

the rein of power, and the army go back to the barracks and reorganise

:29:42.:29:46.

the police force to save the people. In Egypt we are being punished

:29:46.:29:52.

because we revolted against Mubarak, by the army and the police.

:29:52.:29:58.

could bring people together? People are galvanised constantly. Out on

:29:58.:30:05.

the streets constantly. One year they tried to do away with that and

:30:05.:30:07.

they couldn't. They accused the people in the streets of destroying

:30:07.:30:12.

the economy, but the armyo and police put together are prevending

:30:12.:30:18.

that. Why -- preventing that. Why do you think a year later we are

:30:18.:30:23.

talking about the systemic problems of Mubarak? Mubarak and his regime

:30:23.:30:27.

were in power for 40 years, you can't dismantle that overnight. The

:30:27.:30:31.

army, I completely agree, whether incompetence and conspiracy, it is

:30:31.:30:34.

a fill your on behalf of the military. A year is not overnight,

:30:34.:30:38.

it should be long enough to start getting the democratic process

:30:38.:30:43.

under way? You have a military entrenched in a curive function

:30:43.:30:49.

that is not curive. It is not governing in a way that is

:30:49.:30:53.

protective of the Egyptian people. It is still clinging on to the old

:30:53.:30:58.

system and structures. Caught between and be twix. They can't

:30:58.:31:02.

reform, but at the same time they can't return to the barracks, the

:31:02.:31:08.

problem is the military. That cedes power to civilians, then you have a

:31:08.:31:12.

healthy momentum. As long as we are caught in the trench of a Catch 22,

:31:12.:31:15.

I think these problems will continue. It is about the economic

:31:15.:31:20.

interest and other things. If you look at the whole Arab Spring, it

:31:20.:31:25.

is a vote of the people against military rule. If you lock at the

:31:25.:31:28.

Arab Spring now, and coins like Syria will be looking to Egypt,

:31:28.:31:32.

their poster girl has gone? It is an incomplete revolution, the

:31:32.:31:36.

revolution will be run by getting rid of military rule. The military

:31:36.:31:40.

have ruled for 60 years in Egypt, the rest of the Arab world

:31:40.:31:45.

mimicking Egypt, we need to get rid of it, they are liars, they lie, we

:31:45.:31:47.

know that they know that they are lying.

:31:47.:31:52.

Thank you very much. Should civil partnerships be

:31:52.:31:57.

blessed by the Church of England, so far the General Synod has banned

:31:57.:32:00.

partnership ceremonies. Now a hundred or more priests have signed

:32:00.:32:05.

a letter demanding the right to conduct them in their churches.

:32:05.:32:09.

Yesterday the Government -- last year the Government lifted a ban on

:32:09.:32:13.

using religious buildings for celebration of gay marriages. Now

:32:13.:32:18.

the debate on what a civil partnership means must be had first.

:32:18.:32:21.

The Anglican community has never been afraid of a good argument. In

:32:21.:32:25.

recent years the Archbishop of Canterbury, Rowan Williamss, has

:32:25.:32:28.

presided over rows of the anointment of gay bishops,

:32:29.:32:36.

ordination of women and general reform. Now with the General Synod

:32:36.:32:40.

meeting next week they are gearing up for another fight, over whether

:32:40.:32:44.

blessing civil partnerships. John Sentamu has refused the idea,

:32:44.:32:51.

saying the church's idea of marriage is a union between man and

:32:51.:32:55.

woman. Jim Broadbent says the church has thinking to do --

:32:55.:32:59.

Bordeaux Wine Trading Company bored says the church has thinking to do

:32:59.:33:03.

on -- Broadbent says the church has thinking to do. We all understand

:33:03.:33:06.

marriage, it is a public commitment between people two people. We don't

:33:06.:33:11.

have a ceremony for blessing people who are living together. Precisely

:33:11.:33:14.

because they have chosen a different way of committing

:33:14.:33:18.

themselves to each other. We haven't yet worked out what we mean

:33:18.:33:21.

by civil partnership, and therefore we haven't got a straight

:33:21.:33:26.

understanding, a theology in the church's terms of what we mean.

:33:26.:33:29.

Traditional marriages, even amongst divorced couples have been blessed

:33:29.:33:33.

here for years, but the bishop says he's unsure whether that blessing

:33:33.:33:38.

should be extended to same-sex couples? The jury is out, you don't

:33:38.:33:42.

know the effect long-term of what same-sex relationships are likely

:33:42.:33:46.

to be. They have only been public for the last 20, 30 years in that

:33:46.:33:50.

particular way. We have only had civil partnerships for a short time

:33:50.:33:54.

in our society. We need to look at the long-term effects on society of

:33:54.:33:56.

changing our understanding of marriage, if that is what the

:33:56.:34:01.

Government wants us to do. Because your concern is what? My concern is

:34:01.:34:06.

the stability of society is always affected by the way in which we

:34:06.:34:11.

legitimise relationships. What would happen if you

:34:11.:34:14.

legitimised the wrong ones? might not be good for the whole of

:34:14.:34:18.

society overall, we don't know. That's why we need the discussion.

:34:18.:34:22.

The church that was born of a marriage controversy some 500 years

:34:22.:34:27.

ago, is once again struggling to decide whether to move with the

:34:27.:34:31.

political tide or hold out for something many within it still hold

:34:31.:34:37.

dear. With me now are the form er Canon

:34:37.:34:41.

Chancellor of St Paul's Cathedral, Giles Fraser, one of the

:34:41.:34:45.

signatories in favour of blessings for civil partnerships, and a

:34:45.:34:49.

member of the General Synod. Thank you very much to both of you for

:34:49.:34:52.

coming in. It was quite interesting, Giles Fraser, talking to the bishop

:34:52.:34:56.

this afternoon, that while, as he said, the jury is still out, there

:34:56.:35:00.

is this caution, there is a concern that civil partnerships might not

:35:00.:35:04.

be beneficial to society? I don't see how that would be the case, I

:35:04.:35:09.

mean and I don't see how he knows that. What the signatories of this

:35:09.:35:15.

letter want is to affirm permanent faithful, stable, gay relationships,

:35:15.:35:20.

in civil partnerships, and have those affirmed in church. We're

:35:20.:35:24.

responding to the needs of the people on the ground. We find God

:35:24.:35:28.

in the needs of the people who come to us in our churches, and wanting

:35:28.:35:34.

to do this. It seems bizarre that we turn them away and say that we

:35:34.:35:38.

cannot bless them when they come to church. We can bless battleships,

:35:38.:35:43.

we can bless pets at the pet service. You can bless without

:35:43.:35:48.

conducting a ceremony that legitimises that? No, having that

:35:48.:35:52.

in church, and celebrating two people's love for each other is

:35:52.:35:54.

something we should certainly be doing, we should not be turning

:35:55.:35:58.

people away and saying we have nothing to offer them. Isn't that

:35:58.:36:04.

what pastoral care is all about? Pastoral care for those with same-

:36:04.:36:07.

sex attraction is something that is very important, and something that

:36:07.:36:12.

the church is working on. Pastoral care and support for friendships in

:36:12.:36:18.

a very lonely society is very important, but that's not. You have

:36:18.:36:22.

heard about the importance of recognising what are essentially

:36:22.:36:26.

stable committed relationships, why wouldn't you do that? The stable

:36:26.:36:29.

committed relationship at the foundation of society is marriage

:36:29.:36:32.

between a man and a woman, which is the foundation of the family, which

:36:32.:36:38.

is the best context for raising children. Now that's been shown in

:36:38.:36:43.

study after study after study. The church identifies that as marriage,

:36:43.:36:47.

the problem with civil partnerships is, sorry, the problem with civil

:36:47.:36:52.

partnerships is what started off as remedys a real injustice, and we

:36:53.:36:56.

were all in support of going forward with civil partnerships, as

:36:56.:37:02.

long as they included those who were siblings, those who had family

:37:02.:37:05.

relationships with each other, but those relationships were banned.

:37:06.:37:10.

And they were banned in order that what we could have would be

:37:10.:37:15.

something that would mimic marriage. I would like to see the law revised

:37:15.:37:19.

so that sisters, brothers and sisters, siblings, those who have

:37:19.:37:24.

family relationships could have a civil partnership, and a great

:37:24.:37:28.

injustice that they cannot inherit property from each other could be

:37:28.:37:33.

remedied. Isn't that a coppout, you are trying to see the liberals as

:37:33.:37:36.

being less inclusive than you are with this? Exactly. I don't

:37:36.:37:41.

understand that argument at all, I'm afraid. This is about gay

:37:41.:37:44.

people wanting to come and celebrate their love for each other

:37:44.:37:50.

in church. Jesus said nothing about homosexuality, but he said a great

:37:50.:37:53.

deal about the way in which the religious establishment often kept

:37:53.:38:01.

people from God, that is what is going on here. The concern is, this

:38:01.:38:07.

may match the political weather vane of the times, but the church

:38:07.:38:11.

has never been afraid to stick to what it believes in? Exactly, it

:38:11.:38:16.

believes in permanent, faithful, stable, loving relationships and

:38:16.:38:18.

affirming them. This is not coming from political pressure, but the

:38:18.:38:23.

needs of the people on the ground who are coming to us, in our

:38:23.:38:28.

churches, and asking us for blessing and for love and for care.

:38:28.:38:34.

The Diocese of London is not a trendy liberal diocese, it is a

:38:34.:38:38.

very conservative diocese, 120 Clergy signed this letter precisely

:38:38.:38:42.

because they meet that need day in day out. The risk is you isolate

:38:42.:38:46.

these people and turn them off faith? Not at all, there is two

:38:46.:38:49.

different things being talked about here. We are talking on the one

:38:49.:38:54.

hand about the need to provide the proper basis of society, marriage

:38:54.:38:59.

between a man and a woman, family, and we're talking about the proper

:38:59.:39:03.

support of friendships, the proper support of people who want to care

:39:03.:39:06.

for each other. To confuse the thing. People will say the church

:39:06.:39:11.

is out of step? The church is out of step on a lot of things, on the

:39:11.:39:15.

matter of welfare, capping welfare benefits, and is not afraid to

:39:15.:39:18.

speak against that. We remember the bishops in the House of Lords last

:39:18.:39:21.

week, being out of step with society is no charge against the

:39:22.:39:25.

church, it often has, and often needs to be. But the point is, we

:39:25.:39:29.

are confusing two things. We are confusing God's purpose for the

:39:29.:39:33.

best of society, which is marriage is between a man and a woman, and

:39:33.:39:36.

the problem we have with civil partnerships at the moment, is the

:39:36.:39:39.

slippery slope, we were told, first of all, this is nothing to do with

:39:39.:39:44.

marriage, it is just an economic arrangement, then we're told, well

:39:44.:39:50.

now we are going to have it in religious premises. Would you be

:39:50.:39:55.

horrified to see gay marriage sanctioned by the church? I would

:39:55.:39:59.

think that would be completely contrary to the church's foundation

:39:59.:40:04.

documents of scripture and the church's teaching since the time of

:40:04.:40:09.

Jesus, Jesus of course didn't say anything as such about

:40:09.:40:12.

homosexuality relationships, he said a great deal about matter j

:40:13.:40:17.

and a great deal about those things that are in marriage. Do you feel

:40:17.:40:21.

out of step with the other side of your church? The great thing about

:40:21.:40:26.

the Church of England is it is broad church. Canon Sugden and I

:40:26.:40:30.

are in the same church, and the great thing about the Anglican DNA

:40:31.:40:35.

is it is inclusive and glues us together. This letter says it is

:40:35.:40:38.

down to individual conscience, which is way of holding us all

:40:38.:40:42.

together in the big tent of Anglicanism.

:40:42.:40:47.

The painter, Lucian Freud, who died last year, was famous for the

:40:47.:40:51.

unsparing gaze he trained upon the subject of his portraits, one

:40:51.:40:58.

critic wrote about the unconsoling canned dor of the nueds he painted.

:40:58.:41:04.

-- candour of the nudes he painted. A great exhibition will be opening

:41:04.:41:11.

soon in London, and Stephen Smith, an artist, has been speaking to his

:41:12.:41:21.
:41:22.:41:24.

daughter, Esther Freud, her first interview since her father's death.

:41:24.:41:28.

I'm sure lots of models used to long for the look of their painting

:41:28.:41:32.

to be easier on the eye than it ended up being. But I think the

:41:32.:41:36.

more people knew his work, you started to appreciate how rigorous

:41:36.:41:42.

he was, when he looked at anything. He looked at it with a hawk-like

:41:42.:41:46.

stare. He didn't just glaze over and look and see what he wanted to

:41:46.:41:51.

see, he tried to see what he really saw. The idea that people shouldn't

:41:51.:41:56.

look like that at each other, seems completely crazy. Obviously, if you

:41:56.:42:00.

are really courageous, you do look, it doesn't mean you lock with

:42:00.:42:04.

aggression, you just look -- look with aggression, you just look with

:42:04.:42:08.

open eyes. For any art form you have to do that. The more

:42:08.:42:18.
:42:18.:42:24.

penetratingly you look at someone, the more you will find there.

:42:24.:42:28.

you feel self-conscious sitting for your father, in one of them you are

:42:28.:42:32.

not wearing anything? I never felt self-conscious about wearing

:42:33.:42:37.

clothes or being naked, I was used to art being created out of family

:42:37.:42:40.

and friends. You feel you are contributing to something really

:42:40.:42:45.

wonderful, and the rest of the world fades away. A little cocoon

:42:45.:42:48.

of an ancient world you dip into, where the phone didn't ring, and

:42:48.:42:52.

no-one was going to ring the doorbell. He managed to keep life

:42:52.:42:56.

at bay, in order to get on with his work. He was very, very strict

:42:56.:43:06.
:43:06.:43:10.

He was an extraordinary honest person, and so you knew where you

:43:10.:43:17.

were with him. He didn't pretend to be capable of things he wasn't

:43:17.:43:20.

capable of. Although he was a very unusual person, and an unusual

:43:20.:43:26.

father to have, he didn't say, oh I'll take you to the zoo, and then

:43:26.:43:30.

not turn up, he never said he would take you to the zoo, it was out of

:43:30.:43:33.

the question. You really knew where you were, something very comforting

:43:34.:43:38.

about that. Could it be scary to be with your father, was that a

:43:38.:43:43.

slightly edge of the seat experience sometimes? Yes. He

:43:43.:43:47.

created a sense of danger around him. I remember as children once we

:43:47.:43:51.

decided to drive to Scotland, he wanted to visit some people that we

:43:51.:43:56.

were also friends with. We drove in this wonderful old car, very fast,

:43:57.:44:01.

chatting away. Then after quite a long time we realised we were being

:44:01.:44:05.

followed by the police. We pulled over and the policeman said do you

:44:05.:44:09.

know how fast you were going. They said we have been following you for

:44:09.:44:17.

half an hour you have been going 100. He said we were in a hurry to

:44:17.:44:21.

go to Scotland, but we were actually in Wales. We just headed

:44:21.:44:27.

out of London. It always felt exciting.

:44:27.:44:32.

He once told me when I put a bet on three times in a row and won twice,

:44:32.:44:35.

and the third time lost, and said I don't think I will do that again,

:44:35.:44:40.

he said you're not a gambler. I said I loved winning, he said you

:44:40.:44:46.

have to like losing, that is what a gambler is. He liked losing, it

:44:46.:44:49.

stimulated him, because then he had no money and better do some work.

:44:49.:44:56.

Once he was earning a lot of money for his paintings, it would take

:44:56.:45:00.

too much time to gamble it away, and he wouldn't have time to work,

:45:00.:45:04.

it was counter-productive. seemed to have been extremely

:45:04.:45:09.

single minded, did he have an inner gyroscope, or voice saying this is

:45:09.:45:14.

the thing to do, or was he susceptible to critics? He knew how

:45:14.:45:19.

he wanted it to be. When I first sat for him, he was definitely more

:45:19.:45:23.

frustrated, he used to stab himself with the paint brush sometimes, and

:45:23.:45:29.

stamp. Stab himself with a paint brush? Not drawing blood. Blotches

:45:29.:45:34.

over the tunic? There was a feeling of tension and frustration. Which

:45:34.:45:39.

definitely eased off over the years. He became more patient, maybe his

:45:39.:45:48.

strokes were insurer, and he was less frustrate -- sureer, and he

:45:48.:45:57.

was less frustrated as he got older. He loved to read the papers, he

:45:57.:46:00.

bought every paper every day, looking through it. He was very

:46:00.:46:03.

interested, he had a twinkle in his eye about everything, he was

:46:03.:46:06.

interested in everything and anything, he loved to hear snippets

:46:06.:46:11.

of news stories about people he didn't even know. He had a great

:46:11.:46:15.

zest for life, and he didn't actually want his time to be wasted

:46:15.:46:20.

by having to engage with almost any of it.

:46:20.:46:25.

I really accepted him exact low how he was. He was a very interesting

:46:25.:46:29.

and -- exactly how he was. He was a very interesting and exciting

:46:29.:46:37.

father he was. I knew he was different from other fathers, but I

:46:37.:46:43.

always felt lucky. Esther Freud talking there, the exhibition of

:46:43.:46:46.

Lucian Freud opens next week. That's all tonight, Gavin's here

:46:46.:46:48.

tomorrow, from all of us here, good tomorrow, from all of us here, good

:46:48.:46:58.
:46:58.:47:22.

Another cold and frostyo start tomorrow morning, one or two snow

:47:22.:47:28.

showers across the east, across Kent. For the vast majority it is a

:47:28.:47:31.

sunny but bitterly cold winter's day once more. There will be fine

:47:31.:47:35.

conditions across much of northern England, eventually temperatures

:47:35.:47:41.

will creep bofr freezing. It could see snow heading towards East

:47:41.:47:47.

Anglia on Friday evening. For most of the day it will be sunny, South-

:47:47.:47:52.

West expect sparkling blue skies. With winds it will feel less cold

:47:52.:47:56.

than recent days, lots of sunshine to come across Wales, a fine day

:47:56.:47:59.

here. Fine for most of Northern Ireland, dry and bright in the east,

:47:59.:48:03.

but in the west it will cloud over with wet weather edging in here, we

:48:03.:48:08.

could see snow over the tops of the hills, that rain eventually

:48:08.:48:12.

reaching the Western Isles and Scotland. Scotland dry, fine and

:48:12.:48:15.

sunny but cold. We will see wet weather working across the country

:48:15.:48:19.

on Saturday. As it arrives it could well bring a little bit of snow

:48:19.:48:22.

across parts of Scotland in Northern Ireland, more likely

:48:22.:48:25.

further south to bring heavier snow on Saturday night. Some uncertainty

:48:25.:48:29.

about where exactly the snow will fall, exactly how much there will

:48:29.:48:32.

be, as the wet weather bumps into the cold air, we could well start

:48:32.:48:36.

Richard Watson continues his investigation into the pay and conditions of Ed Lester, head of the student loans company, on the day that the government announces he will pay tax at source in future. And more. Presented by Emily Maitlis.


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