:00:07. > :00:11.Take a leap into the future with Newsnight. The budget next week
:00:11. > :00:14.will be firefighting today's problems, but we are facing a
:00:14. > :00:18.monumental change in our society in the next 20 years, with a black
:00:18. > :00:25.hole looming which is deeper than we ever imagined. So tonight,
:00:25. > :00:28.saying the unsayable, on health, welfare, pensions, entitlements,
:00:28. > :00:32.personal responsibility, can we get ourselves out of trouble before the
:00:32. > :00:36.crisis hits. We know our children will probably
:00:36. > :00:39.grow up to be poorer than us, what we probably didn't realise is they
:00:39. > :00:44.could be living in a state that's gone bankrupt.
:00:44. > :00:47.Do our politicians really know how bad it might get? Would any of them
:00:47. > :00:51.dare admit it? Four economic brains, including a
:00:51. > :00:57.former Chancellor, and a leading trade unionist, explore how we can
:00:57. > :01:01.address the bigger black hole. Former News of the World editor,
:01:01. > :01:04.Rebekah Brooks, is arrested again, this time along with her husband.
:01:04. > :01:09.How can an inquiry into press freedom and a criminal
:01:09. > :01:15.investigation run at the same time. Also tonight:
:01:15. > :01:18.The first broadcast interview with the wunder kind, who became the
:01:18. > :01:23.youngest-ever principal dancer at the Royal Ballet aged 19 and then
:01:23. > :01:27.suddenly quit, why? I felt like the artist of me was dying a bit. If
:01:27. > :01:37.you don't explore these things the artist dies, if you don't give him
:01:37. > :01:40.
:01:40. > :01:43.a freedom. The coalition is apparently bickering over next
:01:43. > :01:47.week's budget, that is rather like fiddling while Rome burns, even the
:01:47. > :01:50.Government's own figures say Britain is in danger of
:01:50. > :01:54.disappearing down a bigger black hole than we ever imagined. So out
:01:54. > :01:58.of kilter are the revenue and spending projections, that by 2050
:01:58. > :02:04.we could be well and truly bust, more people living longer, fewer
:02:04. > :02:08.people paying for them, resources dwindling, the welfare bill half of
:02:08. > :02:13.public spending, and it goes on, worried yet? You should be. In the
:02:13. > :02:16.last half hour the Government has come up with one money-making
:02:16. > :02:19.wheeze, 100-year bonds. First theic about pure with Paul
:02:19. > :02:22.Mason. This is the graph that has defined
:02:22. > :02:28.British politics for the past three years and will go on defining it
:02:28. > :02:32.for years to come. The size of the national debt, versus GDP. Until
:02:32. > :02:37.the Lehman crisis it was relatively stable and projected to remain
:02:37. > :02:40.there, below 50% of GDP well into the future, with the financial
:02:40. > :02:45.crisis, the debt started to rocket, only the austerity measures
:02:45. > :02:50.announced first by Labour, and then by the coalition, make this
:02:50. > :02:52.projection possible. That debt peeks around 2015 and, because of
:02:52. > :02:56.the biggest austerity programme since the war, right at the
:02:56. > :03:01.beginning there, begins to fall back, getting to, if we want it to
:03:01. > :03:05.be, zero around 2050. Now the risks to that projection are large. It
:03:05. > :03:09.relies on growth recovering, and the cuts actually working, but here
:03:09. > :03:14.is the hard part, the projection does not take account of population
:03:14. > :03:18.change. The impact of ageing on spending, on the tax base, and on
:03:18. > :03:23.pension costs. Now here is what happens when you do factor in the
:03:23. > :03:29.costs of an ageing population. The debt does not fall back, like we
:03:30. > :03:36.saw, but it actually just dips after 2016 down to 60% of GDP and
:03:36. > :03:42.rockets up to above 100% of GDP by the 2050s, this is a Government
:03:42. > :03:46.graph showing what happens, even if George Osborne's austerity package,
:03:46. > :03:51.agreed until 2017 actually happens. Why? The Government's experts point
:03:51. > :03:55.to spending as the main problem. Ageing will increase the demand for
:03:55. > :03:59.healthcare to 10% of GDP, adding a third to the cost of state pensions,
:03:59. > :04:04.and the costs of social care will nearly double. By now you will be
:04:04. > :04:09.asking what can we do about it. For economists the answers lie not at
:04:09. > :04:14.the level of detail, but four basic directions, there could be a lot
:04:14. > :04:19.more austerity, so shrink the state, or a lot more growth. In its
:04:19. > :04:24.Keynsian form, this remedy might mean a switch to protectionism, or
:04:25. > :04:27.more state intervention. With the Government floating the idea of a
:04:27. > :04:32.100-year bond, so you lend your money forever to the Government,
:04:32. > :04:36.minds are folk uss caned on using inflation to erode the value --
:04:36. > :04:39.focused on using inflation to erode the value of savings, and you look
:04:40. > :04:44.at where people could save their money, that is called financial
:04:44. > :04:48.repression. As we are always reminded by the newspapers, there
:04:48. > :04:51.is plain old default like Greece just did. It is unlikely any of
:04:51. > :04:54.these options will be acceptable to the political mainstream now. But
:04:54. > :04:57.the strategic debate should be starting somewhere, soon, shouldn't
:04:57. > :05:01.it, Kirsty? We will discuss that tonight, it
:05:01. > :05:11.seems pretty stark. But why aren't our politicians even really talking
:05:11. > :05:14.
:05:14. > :05:17.about it? Where are their big ideas. Here is our political editor.
:05:17. > :05:21.Politics likes dramatic metaphors, a Government budget has a black
:05:21. > :05:25.hole, except in a dictionary definition it is usually nothing of
:05:25. > :05:30.the sort. A black hole is a void that sucks stuff in, there is no
:05:30. > :05:33.return. Look toe the future of the UK's
:05:33. > :05:37.public finance -- look to the future of the UK's public finances
:05:37. > :05:41.and this becomes more true. The official forecastsers show on the
:05:41. > :05:46.horizon the cost of the state goes right up, and the means to pay
:05:46. > :05:50.shrinks, money gets sucked in. Now that is a black hole. When we talk
:05:50. > :05:54.about the debt and deficit right now, we are only in the foot hills
:05:54. > :05:56.of a much larger debate about the public finances. The Institute for
:05:56. > :06:00.Fiscal Studies thinks on current costs the amount we will be
:06:00. > :06:02.spending on health and pensions will go up by as much as 5% of
:06:02. > :06:10.national income. In other calculation they have done, they
:06:10. > :06:14.think, all in, we will be looking to find an extra �100 billion, per
:06:14. > :06:17.year, for a generation. Everything we see today is the biggest
:06:17. > :06:23.challenge any Government has faced, which is our deficit, any progress
:06:23. > :06:29.we make today is completely overridden by this problem.
:06:29. > :06:34.It is very hard always to cut out services. Because if the politician
:06:34. > :06:40.says to you, what can you cut out, you can always show that it is very
:06:40. > :06:44.difficult to cut anything out. Government's own Office for Budget
:06:44. > :06:49.Responsibility shows that by 2060 the cost of social care for the
:06:49. > :06:54.elderly, state pensions and the NHS will go up by 5.4%, some streams of
:06:54. > :06:58.revenue will have been turned off. North Sea oil will be much
:06:58. > :07:02.diminished, so too fuel duty, as cars get more efficient, we will
:07:02. > :07:06.all be drinking and smoking less. The tax base will be up to 2% lower
:07:06. > :07:10.over the next 20 years, a small number, but a massive loss of
:07:10. > :07:13.Government revenue. There will be, of course, be
:07:13. > :07:18.different ideas for eradicating the black hole, from opposite ends of
:07:18. > :07:21.the political spectrum. Labour also have to think about
:07:21. > :07:25.which public services to prioritise, making difficult choices about
:07:25. > :07:28.which things first, and have a debate about the tax base,
:07:28. > :07:33.stragically thinking how do you get a broad resilient tax base in the
:07:33. > :07:38.future. For the Conservatives it is much easier, the predill Lynx will
:07:38. > :07:41.be to shrink where they can, and cut it to the core, stop cutting
:07:41. > :07:46.things the market will provide. They will say we will tax you less
:07:46. > :07:51.and you use your money to spend on services. Pensions are one part of
:07:51. > :08:01.the problem. In 2011, 17% of the population were over the age of 65,
:08:01. > :08:08.
:08:08. > :08:10.and pensions cost the state 5.5% of The Treasury didn't support a
:08:10. > :08:14.recent reinstatement of a link between earnings and pensions
:08:14. > :08:17.because of this. What can be done about this? You start again on
:08:17. > :08:22.pensions, you accept that your policy to increase the state
:08:22. > :08:25.pension in line with earnings is going to blow all of your deficit
:08:25. > :08:29.plans out of the water in years to come. You look again at that.
:08:29. > :08:34.Pensions are the big part of it, but others will go much further,
:08:34. > :08:38.taking away benefits for this group as well. The grey vote tends to
:08:38. > :08:43.vote Conservative more than Labour, and there will come a point when
:08:43. > :08:46.these generational injustices can no longer be defended, the older
:08:46. > :08:50.people keep everything and younger people don't get anything like as
:08:50. > :08:55.much. Then the bulk of the problem, put to side the cost of ageing and
:08:55. > :09:00.in 2015 health spending will be 7% of national income. But by 2060 it
:09:00. > :09:05.could be as much as 15%. Many think this will force change. I love the
:09:05. > :09:09.NHS, I want to protect and defend the NHS, but it will have to wash
:09:09. > :09:13.its face. This frames very nicely this debate we are having about the
:09:13. > :09:16.Health and Social Care Bill, which says we are facing enormous upward
:09:16. > :09:19.pressure on these incredible national assets, in terms of
:09:19. > :09:23.additional cost, we have to make sure money is being spent and
:09:23. > :09:25.delivered to the frontline. In the face of this kind of support for
:09:25. > :09:29.the NHS from Conservatives, it is some in the Labour Party who are
:09:29. > :09:33.thinking of going further. They wonder whether the entire funding
:09:33. > :09:36.of the welfare state on all services, not just the NHS, needs
:09:36. > :09:40.to change. I think you have to bring in a form of extra charging
:09:40. > :09:44.for people who use and benefit from the services. In most cases both
:09:44. > :09:48.the society as a whole, and the individual user benefit from a
:09:48. > :09:53.service. But the question is, if the user isn't paying, then the
:09:53. > :09:56.state can't afford to keep going at the full level. Take the example of
:09:56. > :09:59.motorway tolls, for example, many countries charge tolls to go on
:09:59. > :10:03.motorways, because the state benefits from having a good
:10:03. > :10:06.motorway system, so do the lorry drivers and cars who use it. So, we
:10:06. > :10:11.have been talking about spending, there are those who want to talk
:10:11. > :10:15.about tax rises too? You look at VAT, and you say you won't accept
:10:15. > :10:20.�40 billion lost a year because of the exemptions in VAT like food, so
:10:20. > :10:25.you look at that. You also say that this problem does not get smaller,
:10:25. > :10:28.if you put it off, it gets bigger. There is, of course, the
:10:28. > :10:32.possibility that the black hole forecast is wrong, if the
:10:32. > :10:37.Government can get the economy going again, the problem recedes.
:10:37. > :10:40.Politicians get elected for five- year terms, but are increasingly
:10:40. > :10:44.facing 50-year problems. They may want to set a course and stick to
:10:44. > :10:47.it, but at the next election, unpopular ideas get tested.
:10:47. > :10:50.Politicians are always understandably wanting to get a
:10:50. > :10:54.quart out of a pintpot, they want better public services, the public
:10:54. > :10:57.want better public service, but they don't want to pay any more tax,
:10:57. > :11:02.Governments want to keep the tax down. There is always this pressure,
:11:02. > :11:06.and it takes the form of wanting the Civil Service, in particular,
:11:06. > :11:09.to become more and more efficient. That is the pressure for better
:11:09. > :11:15.management in the Civil Service. At the same time regulation increases,
:11:15. > :11:21.and so it is always very difficult to get all these things reconciled.
:11:21. > :11:26.Of course, the difference geen the mystical laws of the universe --
:11:26. > :11:31.between the fiscal laws of the universe, is we can better manage
:11:31. > :11:36.the from whom and who it is divided up, the debate will hone how we
:11:36. > :11:42.will do it. We will hear more later to discuss the growing black hole.
:11:42. > :11:45.I'm joined bit former Chancellor, Lord Lawson, Lord Skidelsky, the
:11:45. > :11:48.head of the Economic and Social Affairs of the Trades Union
:11:48. > :11:50.Congress, Nicola Smith, and Ruth Porter of the Institute for
:11:50. > :11:54.Economic affairs. Lord Lawson, is this the moment for the Government
:11:54. > :11:57.to re-think what it can do for us, and for us to think what the
:11:57. > :12:02.Government should do for us? Your disaster scenario may or may not
:12:02. > :12:04.prove the case, nobody knows. It is impossible to do these sorts of
:12:04. > :12:08.predictions. Nevertheless it is right to be cautious. It could
:12:08. > :12:14.happen like that, and so I do think that the Government is absolutely
:12:14. > :12:19.right now to be engaged in major fiscal consolidation, reducing the
:12:19. > :12:25.deficit, because in addition to the immediate crisis, which they
:12:25. > :12:29.inherited, there is this long-term problem. It is the long-term
:12:29. > :12:34.problem that we are addressing. How much you want might to alleviate
:12:34. > :12:41.problems today, the fact is, that demographics will rule out a lot of
:12:41. > :12:45.options, won't they? Whatever the crisis is, in the long-term, in the
:12:45. > :12:49.long-term structure of these services we have been talking about,
:12:49. > :12:53.it will be much easier to manage if we get some growth in the economy.
:12:53. > :12:57.It won't solve all of them, you will still need reforms, but growth
:12:57. > :13:02.is an essential, necessary condition. And my criticism of
:13:02. > :13:05.what's happening now, is that there is no growth policy. The debt
:13:05. > :13:08.versus growth scenario isn't playing out well at the moment?
:13:09. > :13:14.wouldn't say it was debt versus growth, I would say growth is a way
:13:14. > :13:17.of reducing the debt in the long- term. We need to look at the
:13:17. > :13:20.context here, what is interesting about the current situation is we
:13:20. > :13:25.are already in an unsustainable area, so the Government's spending
:13:25. > :13:28.more than 50% of GDP, and more than half of that is going on welfare at
:13:28. > :13:33.the moment. If you then factor in the demographic changes, and you
:13:33. > :13:37.fast forward, by the time you get to say, if you take 2030, you know,
:13:37. > :13:41.for the average girl, who is born that year, her life expectancy,
:13:41. > :13:45.will be 95, and you factor in the additional costs and the strains
:13:45. > :13:51.which that is going to put on our health spending and state pensions,
:13:51. > :13:57.and it is unsustainable. There will be radical welfare reform, that is
:13:57. > :14:00.what it is needed, actuarillay that is what is needed? I disagree with
:14:00. > :14:06.the way the situation was presented, there will be challenges for the
:14:06. > :14:09.public finances, but as you said, this is by no means a zero sum game.
:14:09. > :14:13.We have huge up certainties forecast, based on firstly how many
:14:13. > :14:17.people we have moving into work, and how productive our economy is,
:14:17. > :14:20.and we know how much revenue we choose to raise. The money from
:14:21. > :14:24.North Sea oil will run out, people are living longer who will need
:14:24. > :14:30.more social care, who will make more demands on the state pension,
:14:30. > :14:34.and we are not going to be able to pay? There is clearly big
:14:34. > :14:37.demographic challenges, growth is by no means a zero sum game. There
:14:37. > :14:41.are huge opportunities going forward. Over the last 30 years the
:14:41. > :14:45.UK's investment into the economy has been the lowest in the G7, if
:14:45. > :14:47.we turn it around we have real opportunities to grow the economy
:14:47. > :14:51.going forward. The Government should accrue debt, that is the
:14:51. > :14:54.only way to do it? The only way to get sustainable public finances in
:14:54. > :14:57.the long-term is to secure stronger growth for the long-term going
:14:57. > :15:04.forward. We need to be ambitious about becoming the strongest
:15:04. > :15:07.competitor in green economies across the world The realities is
:15:07. > :15:11.slower growth? This is a well known road to disaster, to assume you
:15:11. > :15:15.will get greater growth. We would all like to see it. But to assume
:15:15. > :15:18.you will get greater growth and allow public expenditure plans to
:15:18. > :15:24.be based on that, and then of course, if you don't get the growth,
:15:24. > :15:27.and you might not, then the disaster comes. There is plenty to
:15:27. > :15:32.been to. The ageing of the population, you have focused on
:15:32. > :15:37.that particularly, rightly, the age of retirement has got to go
:15:37. > :15:42.substantially higher, I'm 80 and still working. How old are you?
:15:42. > :15:46.You are both still working. still working. I'm very active.
:15:46. > :15:50.are both still working, do you claim your winter fuel allowance?
:15:51. > :16:00.Of course. Do you claim your winter fuel allowance? Yes, I think I do.
:16:00. > :16:04.But I don't claim my old age pension. But anyhow, the age of the
:16:04. > :16:08.Government retirement is cien he ised but not nearly -- increased
:16:08. > :16:13.but nearly enough. In erpls it of health, because obviously -- in
:16:13. > :16:17.terms of health, obvious low, increasingly a an older population
:16:17. > :16:22.makes more demands, you have to have more charging.
:16:22. > :16:27.On this question of retirement, Nicola, the idea that people are
:16:28. > :16:32.going to retire successively at 66, 68.5, that is just tinkering,
:16:32. > :16:37.people are healthy, they are able to contribute to society, we should
:16:37. > :16:41.be retiring at 70? The idea of removing the state pension from
:16:41. > :16:46.people, at a higher age than they have at the moment is fundamentally
:16:46. > :16:49.unfair and misguided. Why? When we are talking about retirement age,
:16:49. > :16:54.thats not attached to the state pension. When you move the state
:16:54. > :16:58.pension higher, you deny people on the lowest incomes all their life
:16:59. > :17:02.and a lower life expectancy, a larger proportion of their state
:17:02. > :17:05.pension. It is burying our heads in the sand, what we need to be
:17:05. > :17:08.actually doing, even looking at far more radical solutions, which are
:17:09. > :17:14.more long-term, and saying we need flexibility. Different people will
:17:14. > :17:19.want to retire at different ages, we could look at as an alternative,
:17:19. > :17:25.fadesing out the state pension and introducing compulsory saving.
:17:25. > :17:28.should make it financially possible for people to choose their age of
:17:28. > :17:31.retirement and not to be penaliseded if they go on working.
:17:31. > :17:35.We have all been assuming that there is a simple tax limit, which
:17:35. > :17:39.is roughly what we have got. In fact, people now want to reduce the
:17:39. > :17:46.top rate. We can increase taxes. That is an option. I'm not saying
:17:46. > :17:51.it is a politically acceptable option, but an economic option.
:17:51. > :17:57.want to talk about tax, but if you look at health, social care, state
:17:57. > :18:01.pension, half public spending goes on all these, universal ity of
:18:01. > :18:05.contributions, we need to end it, perhaps you could opt out of some
:18:05. > :18:09.if you are not using the state provision? The level of spending on
:18:09. > :18:13.social security has remained pretty much constant as a proportion of
:18:13. > :18:16.GDP since the formation of the modern welfare state. It is not
:18:16. > :18:22.rising more quickly than it has been. The period where it was
:18:22. > :18:26.rising more slowly was when we had higher employment growth which was
:18:26. > :18:30.when the social security went down. �50 more has been spent on social
:18:30. > :18:37.security, the way to get social security spending down is to get
:18:37. > :18:40.more people into work. Obviously there is that relationship, I mean,
:18:40. > :18:45.the fuller the employment of the economy, on the whole, the smaller
:18:45. > :18:49.the bills for unemployment benefit and other kinds of benefit. That
:18:49. > :18:53.doesn't affect the main spending items for economic growth, which
:18:53. > :18:56.are health, education. Let's talk about health particularly. The
:18:56. > :19:02.exponential rise of that, because there are new treatments, and
:19:02. > :19:05.people are living longer, people are also attracting at the moment,
:19:05. > :19:09.there are definite issues at the moment about whether people should
:19:09. > :19:13.be taking care of their own health and penalised if they don't. Will
:19:13. > :19:19.we move to a situation where diabetes will rise by 50%, that
:19:19. > :19:22.there will be an onus on people to marshall their own health? If we
:19:22. > :19:26.want access to good quality healthcare and other services we
:19:26. > :19:31.need to move in all these areas, to allowing people to take more
:19:31. > :19:35.responsibility. So we do need to look at things like reducing demand
:19:35. > :19:40.by introing, for example, small charges when you go to A&E --
:19:40. > :19:44.introducing, for example, small charges when you go to A&E and the
:19:44. > :19:50.GP. What about different doctors and motorway tolls, that people
:19:50. > :19:56.will have to take responsibility for paying for the things they want
:19:56. > :20:01.to have? Charging, there has to be more. There is now less proportion
:20:01. > :20:05.for finance through charges, than when Nye Bevan first set the health
:20:05. > :20:10.service up. It is absolutely absurd. There has to be charges. Charging,
:20:10. > :20:13.and of course the poorest will not have to pay the charges, there will
:20:14. > :20:17.always be a safety net for the poorest. What happens is you will
:20:18. > :20:22.also reduce, to some extent, the demand, if you have charging. You
:20:22. > :20:27.have a double benefit. That will have to come. There is charging or
:20:27. > :20:31.rationing? We know what charging means t means reducing services for
:20:31. > :20:35.people across the economy. People across the UK don't want poor
:20:35. > :20:38.people not able to access healthcare. We don't want the
:20:38. > :20:43.situation in America, people can't move from welfare into work,
:20:43. > :20:47.because they can't afford to lose the free healthcare they get.
:20:47. > :20:57.choices are going to have to be made to save the central elements
:20:57. > :21:01.of the NHS. We will have to move to a different model? We can raise
:21:01. > :21:03.taxes, have charges or better control over people's lifestyles,
:21:03. > :21:10.encourage them to lead healthier lives. Somewhere between those
:21:10. > :21:13.three we are going to find a solution. I don't know in what
:21:13. > :21:18.proportions. What about taxation, coming on to wholesale reform of
:21:18. > :21:22.taxation. We have heard everything from a tycoon tax, a land tax, a
:21:22. > :21:25.mansion tax, that is just tinkering isn't it? We need to look overall
:21:25. > :21:30.at, the point that was made about economic growth, we will not see
:21:30. > :21:35.growth in the economy until we cut the public sector down. Why not?
:21:35. > :21:39.Because we need space for the private sector. We need the room
:21:39. > :21:42.for tax cuts, at the moment we don't have that. Looking at the
:21:42. > :21:46.demographics of it, the Government should be really aim to go get the
:21:46. > :21:49.size of the state down to 30%, that would allow massive tax cuts across
:21:49. > :21:56.the board. Then we would see savings, savings is the key. What
:21:56. > :22:01.happens while you are doing it? can phase it in. Unless we build a
:22:01. > :22:05.savings culture, we won't be able to tackle these problems. The idea
:22:05. > :22:08.of the public sector squeezing out the private sector is ridiculous,
:22:08. > :22:12.the public sector is losing jobs at a higher rate than the private
:22:12. > :22:16.sector is creating them. One private sector is created for every
:22:16. > :22:20.13 public sector jobs lost, and Britain is sitting on surplus of
:22:20. > :22:28.50% of GDP. I don't want to hark back, but we have been through this
:22:29. > :22:33.before. During my time as Chancellor I cut tax rates, I
:22:33. > :22:37.was not a sovereign wealth fund, that would have given us a piggy
:22:37. > :22:44.back? I had tough policy on public spending, we had growth and budget
:22:44. > :22:49.surplus, you can do it. Looking back do you think you would like a
:22:49. > :22:52.sovereign wealth fund like Norway? Norway has a massive North Sea oil
:22:52. > :22:57.and gas industry, which is a huge proportion of its economy. For us
:22:57. > :23:01.it was never more than 5% of the peak. To finish off, on the news
:23:01. > :23:05.tonight that is on the front of the FT? I have a comment on that.
:23:05. > :23:07.are out of time, on the news tonight from one of the planes
:23:07. > :23:12.travelling to America with the Chancellor and the Prime Minister,
:23:12. > :23:16.is they have dreamt up the idea of a 100-year bond, good idea?
:23:16. > :23:20.people are prepared to buy it, why not. Are they prepared to buy it,
:23:20. > :23:23.will they put their faith into it? I don't know if it will happen, we
:23:23. > :23:27.shall see, you test the market. There is a lot of nonsense to be
:23:27. > :23:32.cut out of public spending, if we don't go ahead with high-speed rail,
:23:32. > :23:39.that would be a good start. 100- year bond? We will have to see, it
:23:39. > :23:47.is an attempt to get the yield up of Government debt, but I don't
:23:47. > :23:51.know. I only heard about it a minute ago.
:23:51. > :23:55.Thank you very much, we have been listening to that debate. Any sense
:23:55. > :23:59.of a possible direction of travel, Paul? To recap, the headline news
:23:59. > :24:02.out of the Government's report last year, buried at the back of it,
:24:02. > :24:07.fair enough, is that ageing completely changes the direction of
:24:07. > :24:16.travel, on the debt, even if we do austerity. We end up going bankrupt,
:24:16. > :24:20.some time in the 21st century. What I think if you can get politicians
:24:20. > :24:25.to look five years ahead you are lucky. If you look 50 years ahead,
:24:25. > :24:30.there is a lot of individual policy remedies, and they are not
:24:30. > :24:33.important. What is important is the big levers you can pull. One not
:24:33. > :24:37.explored is migration. The OBR which dreamt up the original graph
:24:37. > :24:41.we showed, that assumed that migration falls back to half its
:24:41. > :24:44.current rate. There are people who would like it to, and believe it
:24:44. > :24:48.will maintain its current rate and even grow. That would solve things
:24:48. > :24:54.for about a century. So because you then get a young population, paying
:24:54. > :24:59.for us all. Skilled? Old codgers, if they can find jobs, and doing
:24:59. > :25:04.some of that work. I think what we are finally coming to, three or
:25:04. > :25:08.four years after the Lehman crises, is a debate about a kind of
:25:08. > :25:12.Conservatism, that is small state, or high-tax, unusual, or a form of
:25:12. > :25:16.social democracy that is very low welfare. That might be the future
:25:16. > :25:20.of politics. In fact you have actually Labour, look at Charles
:25:20. > :25:23.Clarke, saying the unsayable, which actually won't let the
:25:23. > :25:32.Conservatives say at the moment? Charles Clarke is an outlayer at
:25:32. > :25:38.the moment. Following on from your point. Where he had politics on the
:25:38. > :25:42.centre ground, that is what we are used to. You heard Lord Lawson
:25:42. > :25:45.talking about user charges. More and more Tory MPs talking about
:25:45. > :25:49.user charges, they are not bashful talking about what many people will
:25:49. > :25:51.call privatisation. On the one hand you have a new generation happy to
:25:51. > :25:55.talk about it, on the other hand a generation of Labour politicians
:25:55. > :26:00.talking about a greater role for the state. Let's just take the
:26:00. > :26:05.major sucker up of money, the health service. Lord Lawson said it
:26:05. > :26:10.is the nearest thing we have to national religion, the NHS. By the
:26:10. > :26:15.locks of the rows in the coalition and the position David Cameron is
:26:15. > :26:21.taking, it is sacrosanct, how long is that for? Rationing is starting,
:26:21. > :26:24.on the near term political horizon. If you go back to the Government's
:26:24. > :26:29.projections, this projection of going bust by the mid-century, only
:26:29. > :26:35.happens if we don't spend more per head on health as people get sicker
:26:35. > :26:40.and older. All the Ricks are on the upside. -- risks are on the upside.
:26:40. > :26:44.A way of getting health spending as a proportion of GDP, with or
:26:44. > :26:48.without rising public spending is there. I think consensus is
:26:48. > :26:52.withering, this is not a future debate, we have a debate now on
:26:52. > :26:56.social care, how do we pay for the costs of looking after ourselves
:26:56. > :27:00.when we get older. It is in aspect, the Treasury can't come up with a
:27:00. > :27:03.way that doesn't involve public money up front. You have members of
:27:03. > :27:07.the coalition saying they are not happy to use the lower paid to look
:27:07. > :27:13.after those with lots of assets who should be able to look after
:27:13. > :27:17.themselves. This is not very far away, it is going on now.
:27:17. > :27:23.Rebekah Brooks, the former chief executive of News International,
:27:23. > :27:27.spent the day in the salubrious surroundings of a Police Station in
:27:27. > :27:33.Oxfordshire, with her husband in one in Buckinghamshire, helping
:27:33. > :27:36.police with their investigations on the phone hacking cover-ups. At the
:27:36. > :27:44.Leveson Inquiry, the head of Scotland Yard had to deny
:27:44. > :27:50.allegation that is he lent Mrs Brooks a retired police horse so
:27:50. > :27:57.gain work experience for his son at the News of the World.
:27:57. > :28:07.Racing tips are notorious low unwry liable, but race horse trainer
:28:07. > :28:08.
:28:08. > :28:16.Charley Brooks statement in a Not this year, three hours before
:28:16. > :28:19.the first race, instead of talking tack and tactics over a pint in the
:28:19. > :28:25.Gloucestershire sunshine, Charley Brooks was in police custody,
:28:25. > :28:30.having been arrested in a 5.00am raid on his house. Rebekah Brooks
:28:30. > :28:33.was also arrested, his wife, former News of the World editor, and
:28:34. > :28:38.normer News International chief executive. They spent the day being
:28:38. > :28:43.questioned on suspicion of conspiracy to pervert the course of
:28:43. > :28:48.justice. This is an amazing turn of events. Obvious low Rebekah Brooks
:28:48. > :28:51.had been previously arrested -- obviously Rebekah Brooks had been
:28:51. > :28:56.previously arrested for conspiracy to intercept voicemails, this is a
:28:56. > :29:00.much more serious charge. There is a big contrast with Rebekah Brooks
:29:00. > :29:05.previous arrest last July, then, rather than the dawn raid, she was
:29:05. > :29:08.invited to attend a Police Station. Evidence, according to some, of an
:29:08. > :29:12.all too cosy relationship with the police, who, we learned last month,
:29:12. > :29:15.loaned her a retired police horse, to be kept at the Brooks stables in
:29:15. > :29:19.the constituency of the Prime Minister.
:29:19. > :29:23.Charley Brooks is an old school friend of Mr Cameron. One of the
:29:23. > :29:27.more comical elements of the story was the effort Downing Street put
:29:27. > :29:31.in trying not to confirm that Mr Cameron had actually ridden the
:29:31. > :29:34.retired Metropolitan Police police horse, while visiting the --
:29:34. > :29:39.Metropolitan Police horse while visiting the Brooks property, until
:29:39. > :29:44.the story could be resisted no longer. Before the election I did
:29:44. > :29:51.go riding with him, he has a um in of horses, one of the horses was a
:29:51. > :29:56.former police force Razor, that I did ride. I'm sorry to hear Razor
:29:56. > :30:00.is no longer with us. I don't think I will be getting back into the
:30:00. > :30:03.saddle soon. David Cameron has shown a woeful lack of judgment in
:30:03. > :30:08.his relations with senior News International executives. Remember
:30:08. > :30:11.he hired Andy Coulson, after he had to stop being editor of the News of
:30:11. > :30:14.the World, because phone hacking had been going on when he was
:30:14. > :30:18.editor, despite the warnings, he took him right into the heart of
:30:18. > :30:22.Downing Street. David Cameron, of course, isn't the
:30:22. > :30:25.first Prime Minister to have close relationships with News
:30:25. > :30:30.International executives. Tony Blair was, on kissing terms,
:30:30. > :30:35.although his minders didn't want it filmed, and Gordon Brown's wife
:30:35. > :30:39.hosted a slumber party for Rebekah Brooks at Chequers.
:30:39. > :30:43.Partly in an effort to defuse political heat, David Cameron set
:30:43. > :30:47.up the Leveson Inquiry, but could this inquiry now be jeopardising
:30:47. > :30:57.any chance of a fair trial, if charges are brought.
:30:57. > :31:05.
:31:05. > :31:08.In a newspaper article, Rebekah Last month Deputy Assistant
:31:08. > :31:12.Commissioner, Sue Akers, leading the police investigation into
:31:12. > :31:22.hacking and corrupt payments to police and other officials, gave
:31:22. > :31:38.
:31:38. > :31:41.evidence to the inquiry. She said: MPs are also investigating hacking,
:31:41. > :31:45.and have made strenuous efforts not to prejudice the police
:31:45. > :31:49.investigation. One of the MPs on the Culture, Media and Sport
:31:49. > :31:53.Commitee says the Leveson Inquiry is on tricky ground. I think you
:31:53. > :31:58.need to look at the set-up and conduct of the Leveson Inquiry,
:31:58. > :32:01.there is a point to be made that Mrs Brooks should have been given
:32:01. > :32:04.core participant status in the Leveson Inquiry. It is quite right
:32:04. > :32:08.that things are being said about people to which they apparently
:32:08. > :32:12.have no right of response. Things are out there in the media that
:32:12. > :32:15.which are no doubt prejudicial. I fully support the Leveson Inquiry,
:32:15. > :32:18.it is a very important inquiry, we had to have it, but at the same
:32:18. > :32:23.time we have to be sure that in Leveson trying to get to fairness
:32:23. > :32:26.in the media, that we also have fairness to people who may be
:32:26. > :32:30.charged with criminal offences. That is an important part of our
:32:30. > :32:35.system as well. As a racing man Charley Brooks understands odds,
:32:35. > :32:38.his and the other suspects' chances of being charged is not as yet
:32:38. > :32:42.clear. Tonight five of the six people arrested today were released
:32:42. > :32:48.on police bail. No-one, however, would bet that this is the end of
:32:48. > :32:52.the matter. With me are Tim Luckhurst Professor
:32:52. > :32:57.of Journal at Kent university, and Charlotte Harris, a lawyer who has
:32:57. > :33:02.represented phone hacking victims. First of all, 44 arrests so far, no
:33:02. > :33:07.charges, and Stephen Parkinson, Rebekah Brooks lawyer has said, she
:33:07. > :33:11.was released today, without charge, that in the end if there are trials,
:33:11. > :33:16.they could be a problem. I think there could be a problem. I think
:33:16. > :33:21.what we are seeing is the Leveson Inquiry was a panicked response by
:33:21. > :33:26.politicians, to a genuine crisis but a crisis that largely involved
:33:26. > :33:30.criminality at one newspaper group. What the newspaper inquiry has done
:33:30. > :33:36.is to conflate criminality with a press regulation. That is raising a
:33:36. > :33:40.risk, that witnesses are being allowed to say things that could
:33:40. > :33:47.prejudice criminal trials. Do you accept that argument that it could
:33:47. > :33:50.prejudice criminal trials? Having taken part in the trial, very
:33:50. > :33:54.careful work done by the barristers and Lord Leveson in terms of trying
:33:54. > :33:57.to protect information that might be prejudicial to trials. We are in
:33:58. > :34:02.a very difficult situation at the moment. What should have happened
:34:02. > :34:09.in the normal set of events, it should have been that when the
:34:09. > :34:11.police found out that criminal activity took place, arrested
:34:11. > :34:16.should have been made there and a proper investigation. Everything is
:34:16. > :34:21.out of time. The public inquiry might be a spops, but without it we
:34:21. > :34:25.might -- response, but without it? But with prejudice, is that a risk
:34:25. > :34:29.you have to take? I hope it won't with prejudice it, I hope it will
:34:29. > :34:33.be dealt with properly within the inquiry. They are very careful
:34:33. > :34:37.about what is said? Do you think News International are more likely
:34:37. > :34:42.to co-operate with the police because of Leveson? They may well
:34:42. > :34:45.be, I'm not here to defend news interle that. If there is serious
:34:45. > :34:49.criminal wrongdoing, it should be prosecuted. The thing is, there was
:34:49. > :34:52.no need to have the public inquiry into the standards and practice and
:34:52. > :34:54.ethics of the press at the same time of the criminal investigation.
:34:54. > :35:00.Do you think the criminal investigation has been undermined?
:35:00. > :35:03.Yes, I think the value for public inquiry has been diluted. You have
:35:03. > :35:08.the sight of people coming to a public inquiry and not being able
:35:08. > :35:11.to say anything? There is also the civil situation. That when you have
:35:11. > :35:17.got the civil claimants, who are forcing News International and
:35:17. > :35:21.others to come to the table, having not been investigated by the police,
:35:21. > :35:26.News International didn't want to go to trial, clearly. All the cases
:35:26. > :35:34.in the first SETIle. Within the civil actions, what we find out is
:35:34. > :35:37.there are efpd and evidential problems then -- evidence and
:35:37. > :35:41.evidential problems. The police could have f they wanted to, they
:35:41. > :35:45.started making arrested some time ago, tried to call a halt to the
:35:45. > :35:49.civil action. They didn't. The horse has bolted. In terms of the
:35:49. > :35:53.public inquiry, it is all a bit late to worry about it. I don't
:35:53. > :35:56.agree, I think it is very important that we have a public inquiry into
:35:56. > :36:00.the standards and ethics of the police, or at least into the
:36:00. > :36:07.standards and ethics of the red top tabloid press. What we are having
:36:07. > :36:13.as a comigs that of the two events is an Anne -- comcation of the two
:36:13. > :36:19.events is a red top inquiry. It is, in fact, a very dangerous high bred,
:36:19. > :36:22.which is risks damage to criminal cases and free press in this
:36:22. > :36:28.country. Conflating tabloid newspapers with those of a broad
:36:28. > :36:33.range of newspapers not engaging in those activities. I feel that is
:36:33. > :36:38.very resistant to what the inquiry is about. It is very easy to come
:36:38. > :36:42.into this at this stage, having not seen the resistance that we had, as
:36:42. > :36:46.lawyers do. Getting anything other than this is a one rogue defence.
:36:46. > :36:50.When you say that the inquiry is conflating two issues. It is
:36:50. > :36:58.actually dealing with different issues. When you have criminality
:36:58. > :37:01.springing from the press, and not just the red tops. We were looking
:37:01. > :37:05.for criminality in terms of the police and so on. You were saying
:37:05. > :37:11.earlier you were not sure it will prejudice cases? I don't think it
:37:11. > :37:18.will. To characterise the inquiry as only being there to have a go at
:37:18. > :37:22.the red tops isn't right. Was it politically expedient to have a
:37:22. > :37:26.public inquiry? Yes, that is precisely right. Charlotte, it
:37:26. > :37:32.wasn't the intention of the inquiry, it is not Lord justice Leveson's
:37:32. > :37:36.fault, but the conflation of these two issues has turned the Leveson
:37:37. > :37:39.Inquiry as essentially an inquiry into one newspaper group, News
:37:39. > :37:43.International. I think we need generally better than that, we need
:37:43. > :37:46.an inquiry that looks at the standards, ethics and practices of
:37:46. > :37:50.the British press, we are not having that. Is it having an impact
:37:50. > :37:54.on the press and the way things are reported at the moment? It is
:37:54. > :37:57.having an additional minor chilling effect. The biggest chilling effect
:37:57. > :38:01.comes as a result of privacy rulings and defamation and so on.
:38:01. > :38:09.One of the great things about the inquiry has been that it has given
:38:09. > :38:14.the public an opportunity to hear the victims' stories. And to allow
:38:15. > :38:19.them time, not by selling their story to a newspaper, or giving an
:38:19. > :38:23.interview, in a forum which seemed appropriate, and they weren't being
:38:23. > :38:27.paid, or nobody could accuse them of that, to simply answer questions
:38:27. > :38:31.about how they feel. And I think that's been very useful. I think it
:38:31. > :38:34.has changed attitudes as to what the public want. They can see the
:38:34. > :38:40.story and the effect and the emotion behind it. Thank you very
:38:40. > :38:46.much. He's the young dancer many compared
:38:46. > :38:50.to Nureyev and Baryshnikov. The prodigy who at 19 became the
:38:50. > :38:57.youngest ever principal dancer with the Royal Ballet. But Sergei
:38:57. > :39:03.Polunin shocked the dance world in January, when he walked out of the
:39:03. > :39:07.role. The dancer, who likes to be likened to James Dean, and has a
:39:07. > :39:14.tattoo parlour, returned to the stage at Sadler's Wells. He spoke
:39:14. > :39:18.about why he walked out on his dream.
:39:18. > :39:23.Rehearsing in a Top Gun T-shirt, the tattoo-sporting ballet star,
:39:23. > :39:28.who had the world at his highly- prized feet, only to turn his back
:39:28. > :39:32.on it. Sergei Polunin, whom we found rehearsing for a new show,
:39:32. > :39:40.sensationally quit the Royal Ballet, where he was the youngest-ever
:39:40. > :39:45.principal dancer at the tender age of 19. In his first television
:39:45. > :39:49.interview since that dramatic exit, Polunin, flunked by his friend and
:39:49. > :39:53.collaborator, Ivan Putrov, began by discussing whether he still has an
:39:53. > :39:59.appetite for dance. Sergei, how was that for you, you're not the
:39:59. > :40:09.keenest on rehearsing, is that right? It is not my favourite thing
:40:09. > :40:13.to do, no. I have been working quite hard for this. Learning new
:40:13. > :40:17.pieces. Is it like athletes, you read about, footballers, they hate
:40:17. > :40:24.training, they can only really get involved when it is the big
:40:24. > :40:28.occasion? That is the only time I would enjoy professionally in that
:40:28. > :40:34.way. It is communicating with people. It is quite like you
:40:35. > :40:40.learned a lot and you practice a lot, so for months, maybe, you
:40:40. > :40:45.sometimes argue, you sometimes, it is like nine hours a day. So when
:40:45. > :40:55.you final low are on stage, especially when it is finished, you
:40:55. > :41:04.
:41:04. > :41:14.have so much adrenaline and so much Polunin said it had been his dream
:41:14. > :41:15.
:41:15. > :41:25.to become principal dancer with the Royal Ballet. So what went wrong?
:41:25. > :41:26.
:41:26. > :41:33.In a way, I did feel like the artist in me was dying a little bit.
:41:33. > :41:42.And I wasn't giving the best of myself, and to put creativity in it
:41:42. > :41:47.as I should and as I I have in me. So I do agree, if you don't explore
:41:47. > :41:51.these things and the artist just dies, if you don't give him a
:41:51. > :41:58.freedom. Was that the issue, it sounds as if you have more freedom
:41:58. > :42:07.now, you are happier now, perhaps you didn't have sufficient before?
:42:07. > :42:11.I can't say like I'm happy now. I'm still finding my way, what I'm
:42:11. > :42:21.going to do, what is the thing to do. I'm going to explore different
:42:21. > :42:22.
:42:22. > :42:27.directions. I did feel so comfortable that I
:42:27. > :42:34.stopped being involved as a person and an artist, that is what I want.
:42:34. > :42:38.I don't want to be comfort, I don't want to have family, so I destroyed
:42:38. > :42:43.in a way everything I had. You felt you had to destroy everything you
:42:43. > :42:48.had, that you worked so hard for, before you could move on and find
:42:48. > :42:56.ourself again? It is basically, yes, it is almost like a delete button,
:42:56. > :43:02.you just want to start fresh. feels good? It did, in a way,
:43:02. > :43:11.because you just throw everything you had, you just clean yourself,
:43:11. > :43:21.in a way. The only thing I didn't do was change the country. Were you
:43:21. > :43:21.
:43:21. > :43:26.surprised by the reaction to it? I was, because I never thought, I
:43:26. > :43:30.just wanted to go quietly. But it is amazing, it is, in a way,
:43:30. > :43:37.supported me, because if you come back home and you destroyed
:43:37. > :43:47.everything you had, it feels really weird. I have built something for
:43:47. > :43:52.seven years and now it is gone. Now I gather you quite like a
:43:52. > :43:58.tattoo? One on the wrist. They are all random, I just do them on the
:43:58. > :44:08.day. I don't plan them. I have maybe 11. Have you? Quite a lot.
:44:08. > :44:08.
:44:09. > :44:13.What I like about tattoo is the atmosphere. It is like a lot of
:44:13. > :44:22.friends, a lot of normal people there. It is just fun. Do you think
:44:22. > :44:26.that you will still be dancing in four, five years time? At the
:44:27. > :44:31.moment I don't think I wouldn't, not in six years. I would love to
:44:31. > :44:41.achieve something else in a different profession. Because once
:44:41. > :44:45.
:44:45. > :44:50.you achieve something, you just Sergei Polunin, tomorrow morning's
:44:50. > :44:54.front pages, that 100-year bond, Osborne bond to lock in low
:44:54. > :45:00.interest rates. Rebekah Brooks and her husband on the right hand side.
:45:00. > :45:04.Osborne to issue Great War bonds to raise cash. There is Michelle Obama
:45:04. > :45:08.and Samantha Cameron on the other and Samantha Cameron on the other
:45:08. > :45:18.side. The Independent has Russia saying
:45:18. > :45:18.
:45:18. > :45:21.they are happy to sell arms to That's all from Newsnight tonight.
:45:21. > :45:31.Emily is back tomorrow with more good cheer. From all of us tomorrow,
:45:31. > :45:57.
:45:57. > :46:02.Low cloud, mist and fog a problem tonight and tomorrow morning. A
:46:02. > :46:06.gloomy start to the day, light rain or drizzle in the south west, most
:46:06. > :46:10.will have a dry day and a lightning of the skies. Struggling to the
:46:10. > :46:16.North West of England. A bit of brightness, the east of the Pennine,
:46:16. > :46:20.it may be up to 13 or 14. Parts of East Midlands could be best
:46:20. > :46:26.favoured for holding on to the grey, misty low cloud. To the south west,
:46:26. > :46:31.after that foggy start, bestens cha of sunshine across Wales. With
:46:31. > :46:34.winds light, 14, 15, with one or two spots holding on to the cloud.
:46:34. > :46:37.Maybe around the coast, probably most likely it will only be eight
:46:38. > :46:42.or nine degrees. In Northern Ireland a brighter day than recent
:46:42. > :46:47.low, the cloud thinning and breaking. So too to the north-east
:46:47. > :46:53.of Scotland, a pleasant day. The Moray firth, the cloud thick enough
:46:53. > :46:56.for one or two showers. A bit more cloud across the south
:46:56. > :47:00.west of Ireland and Northern Ireland, elsewhere reasonably dry
:47:00. > :47:03.and bright. For southern parts of England and Wales, increasing
:47:04. > :47:07.amounts of sunshine once again. That is boasting the temperatures.
:47:07. > :47:10.The south-east seeing longest spells of sunshine through the day.