20/03/2012 Newsnight


Will the 50p tax band be scrapped? Can the Chancellor sell it? The case for Shale gas. And we talk to Jack White, formerly of the White Stripes. With Jeremy Paxman.

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Yes, we will cut income tax for the richest people in Britain, but


don't look at that, look at what else we are doing, that seems to be


the Government line tonight on the eve of the budget. So how does the


country's most powerful heir to a Barnetcy make pleasing the rich


look like benefiting the poor. In tomorrow's budget the personal


tax threshold will be raised to over �9,000, and the rich will be


hit by higher stamp duty. With slow growth and massive


austerity ahead, can they do anything more than just tinger


around the edges. Somewhere near Blackpool is a


promise that by drilling down into Lancashire, we could dramatically


cut energy bills, is the technique of fracking for natural gas one


that we can really trust. We can assure people thatm so of the


concerns you have regarding oil and gas drilling will not happen on our


watch. # I won't let love


# Disrupt or interrupt me He's famed as one of the finest


rock by starrists, this being Newsnight, we asked Jack White who


he votes for. He refuse to vote for President, I don't believe in the


Electoral College, it is outdated from 200 years ago that doesn't


make sense for modern times. One thing we definitely can be


grateful for in tomorrow's budget, even if it does result in the


Chancellor sticking his hands further into our pockets, we shan't


have to listen to people telling us what he's going to say. Perhaps the


most fatuous piece of news today was a poll showing that half of


voters expect George Osborne to reward the rich. Well, perhaps he


will. But the person from whom you will learn most this evening is


Newsnight's political editor. You better deliver.


So what we know this evening is that they will be increasing the


personal tax allowance to �9,05, as said in the menu. This is important


because it is money back in people's pockets. We had David Laws


on the programme a month ago saying they want to go further and faster


on this, they wanted to go to �8,100, up to �8,700, now it is the


�9,200 figure. It is a tacit addition that people need money to


spend money now, and the economy needs people to spend money. It is


also the beginning of a shift we will see completed tomorrow, this


one from income to wealth. They will come forward with


announcements on a higher rate of stamp duty for those who have �2


million houses. It won't be a pure mansion tax, but a form of it. Yes,


they are also highly likely, in fact, definitely getting rid of the


50p rate. But again that fits the John Stuart Mill thing of, we have


made a film about this. Shifting from income to wealth, it is bit et


a big shift. -- quite a big shift.


It has been a very odd process? Sources point to Sweden where, in


the UK we have this emphasis on the one event, the Chancellor's


announcement, actually in other countries they do bits and bobs,


and lots of people get to announce things. They say it makes for a


better budget. I think as long as the coalition las we will have


budgets like this, -- coalitions lasts, we will have budgets like


this, and we won't have one of the old type for many years or never


again. What is busy today? The look at 50p and why they feel they can


scrap it. Tomorrow's events in the palace of


Westminster, will have a feeling of austerity. But today's state


occasion was far more convivial. 24 hours before one of the most


anticipated budgets, today's chatter will have been of tax cuts,


and not any old tax cut, the big one .Le These chaps probably earn


too little for it to affect them, so do these two. And most of these


distinguished crowd also. The centre piece of this year's budget


looks like it will affect people a bit nearer to the Monarch's league.


Which certainly means one former PM. Despite the almost unprecedented


pre-briefing, the Prime Minister himself, was rather quiet today.


REPORTER: Are you looking forward to the budget? Even the Prime


Minister's own advisers, who once upon time, hated the idea of


ditching the 50p rate, well, they are now on side with the


Chancellor's push. What they will do is a series of measures that


will show the rich will pay, more than under the 50p regime, so they


are going ahead with it. And once upon a time, we didn't think that


would be true. Scrapping the 50p rate of tax fares badly in opinion


poll, today's Guardian ICM poll showed 67% of voters wanted to the


rate. Even among Tory spers, numbers that want to people is 65%.


YouGov found similar figures. But 48% wanted tax reduced in a future


budget. The Government think the public will be won round showing


how little the tax has raised. predicted �2.6 billion, they


thought that prudent. In response to similar changes in the US you


are closer to �1 billion, the outturn may be lower than that.


Even if the economics take their of themselves, is the political


message of scrapping it a sensible one. I'm concerned about that, I'm


concerned because the 50p tax rate sends out an important message. The


message is, literally, we are all in this together, higher earners


have to pay their share. The only way to go down well, I believe,


with my constituents, is if two things take place. One the message


is clearly conveyed, that higher earners are taking their share. I


would use as an example of that, take ago I way child benefit from


the top 15% of earners. That is a difficult thing for tax-payers to


have to endure. The second thing is, we have to be absolutely


LCH.Clearnet, the reason to take away the 50p tax rate, is to


stimulate growth. If they are not clear about that, stories worried


that they will have taunts from the Labour Party that they are in


league with the superrich. Labour are not against the 50p rate


cut, so it gives breathing room for the Chancellor. People are worried


by high petrol and energy prices, they want action from the


Government to help middle and lower income families. All we hear from


Osborne is the budget will cut taxes for people earning above


�150,000. People will say, that's out-of-touch, we want a budget for


jobs and families which is fair, that is what we need from the


budget. So tomorrow the megawealthy look set to be introduced to a new


regime of tax breaks ended and allowances curtailed. The idea is


they pay as much tax under the new system as the old. Two weeks ago


Nick Clegg called that a tycoon tax, now people in this building are


reluctant to give it that name in the budget tomorrow. The Tories


feel they should get as much credit for this as the Lib Dems want to


get. Whoever is the true author of this fresh crackdown on the


superrich, Nick Clegg has some exacting members of his own party


to please. If the 50p rate of tax on the top


earners is going to go, then we need a policy which will be good


for the people at the bottom end of the scale. We want to see the


income tax threshold raised to �10,000. Nick Clegg set out his


stall on that, he made it clear that is what the Liberal Democrats


are asking for. That is what we have to get tomorrow.


The Chancellor has been studying how Conservatives cut taxes in the


80s, they did their tax cuts in the early periods, immediately after


elections, and plenty of time before the next. If he's going to


do it at all, he's got to do it now. All this happens amid the


encirleling gloom to which we have now become rather accustomed, there


was better news today, inflation has fallen, we are massively in


debt as a nation, the economy is hardly growing, and unemployment is


higher than for 17 years. He talks big, and never brings it on?


have seen the set of leaks going on over the last few days. This is


detail. The budget, I'm told, by sources, tonight, that it will be


fiscally neutral, the important thing there, is for the markets,


for the people who lend us the money, it means that the overall


plan to get the deficit down is not changing. What is changing is the


mix of tax and spending cuts. What they are doing here is they are


reducing the tax. It will be a net tax cutting budget, I'm told, they


will replace it with spending cuts. You will be stunned to know, ...For


Those who don't inhabit the dismal science, what does fiscally neutral


mean? It means they won't borrow more or less than they said they


would. The course of setting the deficit right is as it was. But you


will be stunned to know that nobody is briefing us as to what is to be


cut, to pay for this. The danger with relying on extra cuts, the


smart money is on more welfare cuts, actually. Is that you have still


got to do them. 5% of these cuts lie ahead, and what the market --


85% of these cuts lie ahead. What the markets are worried about, is


if they do most of that by cutting, how will they do it. Is this good


for persuading people they want to lend us money? It is a little worry


for them. Last week, I think it was FITCH, the ratings agencies, put


Britain on negative watch, worrying about getting pushed off the


deficit reduction target. You have seen today in parliament the end,


what looks like the end, a huge row between the parties over the NHS,


the NHS, in technical terms, isn't being cut. Yet it has caused 18


months of political pain. The cuts lie ahead, and for the last three


years of the cuts programme, we don't know what will be cut. The


NHS after the next election, tech clo and easily could be cut. The


politic -- technically could easily be put. The bend and ratings agency


guise worry about the scale of the cuts, and tomorrow if there is more


cuts, which we are not briefed about, as well as the people who


oppose cuts will be worried, the markets will not be particularly


ecstatic, I don't think. Thank you very much. Most of the


headlines are so far about what George Osborne may do to help or


Hurd the rich. The former City Minister, Lord Myners, who now


chairs Sevian Capital, and Kate Robertson, the marketing executive,


they are not short of a bob or two or an opinion or two. At a time


when the nation is short of cash, what is gained by cutting taxes for


the rich? The gain to the country is the signal to business worldwide,


that Britain is open for business. At the moment really, nothing else


is more important, no other signal is more important.


So you know loads of people who are not invest anything this country,


because the rate of tax is 5p higher than it will be apparently


after tomorrow? I certainly know some, I don't know if it is loads


proportionally, it is enough to be making a difference. It certainly


makes enough difference to my clients and to me in business.


at the deterred? We are deterred, it is not just that tax rate itself.


But by the fact that we are not showing confidence in the country


and the economy. The other thing that is said about


this tax is it doesn't bring in any money, which is rather at variance


of it deterring people, if it doesn't bring in any money it is


crazy to keep it? We haven't enough evidence yet, Jeremy. The


Chancellor said he was going to commission a review of the impact,


unfortunately he has done it through HMRC, rather than the


Office of Budget Responsibility. It is not really an independent review.


There is only one year of data. But there is a contradiction here, that


the rich are saying we don't have any incentive to work hard because


of the high rate of taxation, therefore it is not raising


additional tax. They are getting around it through clever tax


management. They can't have it both ways.


So you will pledge, you are not in a position to make a pledge, do you


think the Labour Party should pledge they will restore the 50p


rate if indeed it is reduced tomorrow? I think the Labour Party


will make their decisions on what they will put in their manifesto,


when we get to 2015. But you think it will do nothing to


distract from their claim of economic confidence to promise to


do so? It is not a priority to reduce the tax on the superrich.


There are far more pressing needs. Alistair Darling said when it was


mooted he thought it was a temporary measure? The fiscal


stance we take for the manifesto in 2015 will be determined at that


time, it will be foolish to anticipate it, James, I mean Jeremy,


sorry. That is twice, that's all right! What about the other thing,


that will will be an increase on stamp duetyo for more expensive


houses. Its not quite the Lib Dem mansion tax, but something along


those lines, will that deter people from coming to this country? That


is not the issue. The issue isn't whether it will deter them from


coming to this country. The real issue is businesses in this country


are sitting on piles and piles of cash, don't really have the


confidence to invest, therefore, we are not able to create jobs. As


soon as you are looking at an economy and saying businesses are


not confident and we are not sure where this is going, then you have


the situation we are in at the moment. We are only growing at


about 1%. We should be at about 3%. Is there anything that the


Chancellor could say tomorrow, which would be likely to change


that? I think a first sign at cutting tax, at cutting the top


rate is a start. It is a sign of confidence, Jeremy, it is nothing


else it is that. If you are saying is there anything else he could be


doing, absolutely. Paul raised the point about raising the �10,000


threshold, raising the 40p threshold, lowering corporation tax


to 20%, for me, all of those would stimulate business, they would


stimulate my businesses, all of my clients' businesses, it would be


brilliant. Don't you worry about how devisive it is going to be?


Even most Conservative voters are against reducing the top rate of


tax? It is devisive depending on the headline that, with the


greatest of respect, you yourself, and the media, put it on it. Is the


headline "tax cut for the rich" or "Britain open for business". How do


you want it to play? Growth will only come from business. Jobs will


come from business and not from the state sector. Forget about it, that


is not going to happen. How much room for manoeuvre do you think he


has tomorrow? Not a great deal. A broadly physicaly neutral stance is


probably right, but he's -- fis fiscally neutral stance is probably


right. We need a budget for the millions not the millionaires. We


need to get the economy growing and create employment. The nation will


say what are the priorities when you are cutting tax for the top 1%,


and yet you can't do anything to help those who are at the most risk


in the economy, the poor and those on low incomes. And that, I think,


is the issue of justice, that this budget, if it is correctly leaked,


doesn't appear to be able to address satisfactorily. Who knows


if it is correctly leaked, it may be spun. That is what politicians


and Governments generally. Do we will find out tomorrow.


There is no justice without jobs, Lord Myners, there have to be more


jobs. That is what I'm saying. First, second, third and last, when


you say setting the priorities, and it is justice, and looking after


the poorest. How? And with what? With what money? If there aren't,


if there isn't stimulus for business and more jobs, forget


about it, it cannot happen. We are not Russia or China, it won't work.


Last year, Kate, the Chancellor said he would put fuel in the tank


of economic recovery, it would be a march of the makers, that is proven


to be nonsense, the economy has barely grown over the last 12


months. Unemployment is rising, we now have over one million young


people unemployed. We have just seen the national minimum wage held


static for young people. I don't disagree with you here. That is


where the effort needs to come. is not growing enough, that is true.


Has he put fuel in the tank, not really, but the tax cuts aren't


coming at the moment. We are talking about tax cuts not anything


else. We better talk when we resume this and we know what we are


talking about, rather than speculating. A new approach! Thank


you, after 11.00 we will look at what the budget is do to help


Britain' recovery, and what briefings the papers have had with


a journalist and economist. The world is running out of energy,


what brilliant news that there is a way of extracting vast quantities


of natural gas from the earth, which might bridge the looming gap.


Last year two earthquakes hit Blackpool, little ones, of course,


but these were different, they were not natural phenomena, they were


caused by efforts to extract methane gas from the ground, in a


process known as fracking. No big deal, say the energy companies, who


think fracking is hugely promising. It is huge in the states, but


environmentalists hate it, and it is banned in France. Any day now


the Government is expected to allow it to resume here. Do we want it.


It was extremely unlikely there would be no earth tremors, there


have already been two. earthquakes in two months won't


stop gas drilling for good. Last year, Blackpool was hit by two


small earthquakes. The tremors didn't amount to much,


but these were no natural phenomena. By trying to extract methane gas


from beneath the earth's surface, engineers had triggered a seismic


response. The technique is known as fracking.


Over 800 wells were planned Forsyths here on the Fylde tennis


la, operations were called to -- peninsula, operations were called


to a halt and the Government called for a review. The decision on


whether they can start up again is gettinged any day now. But


Newsnight -- expected any day now. But Newsnight has discovered


regulation is not keeping pace with the industry. An industrial process


that caused earthquakes clearly isn't great, even if it is only


small, local tremors. And these quakes have focused opposition,


raising a host of other questions about the impact of National


Infrastructure Plan on this coastal lant scape of the Lancashire pen --


landscape of the Lancashire peninsula.


So what is fracking? Or to give it its proper name, hide drollic


fracturing. -- hydrolic fracturing. From a


plait pad, a mobile rig drills down 7,000 feet to reach the gas.


Precision drilling follows a gentle curve, so the end of the well has a


horizontal view of the rock, and maximum access to the trapped gas.


The well is lined with alternative layers of metal tubing a cement


casing, and then completed with controlled explosions that open up


fractures in the surrounding rock. Then comes the fracking. Millions


of gallons of water, at high pressure, are pumped into the well,


along with sand and chemicals, which prop open the fractures and


help the gas to escape for easily. It it is this process that


inadvertantly caused the earthquakes. Mike Hill is a


technical adviser to Fylde borough council, he's a technical expert


that used to work in the industry. He is not against it but wants to


make sure it is done properly. you have a seismic event,


relatively small, you might feel shakes in the house, my concern


isn't houses or buildings, it is more the cement around the borehole.


If that gets cracked, that is when you can get contamation, and


pollutants migrating away and moving away from the borehole, we


must prevent that at all costs. He is concerned after America's


experience with fracking. Internet videos showed flaming taps as gas


escaped into drinking water. Some companies denied that such leaks


were happening. But America's second largest natural gas company,


Chesnot peek energy, admitted to Newsnight, that it had found


evidence of gas leaks and had changed procedures. In some cases


it looks as the cement was drying, the high pressure shallow methane


kept it from drying properly, and allow channelling to develop on the


outside of the casing which could allow methane to move up and get


into fresh water. We found regulators trying to catch up and


impose rules after serious problems had already occurred.


I'm Mark Miller, the CEO. The main players in UK Shell Gas


Exploration, have tried to make the case for fracking. We are drilling


a new exploration well to 9,000 feet near Blackpool. They insist


they are a responsible company. We employ all state-of-the-art


equipment. Even down to the actual operation of it. His point is, that


it will all be done safely. We can assure people that some of the


concerns that we have regarding oil and gas drilling, will not happen


on our watch, and will not happen with wells we drill in this area.


Blackpool is a folkal point now, it sits on one of the UK's most


promising sites, the Boland Shale, but Lancashire is not the only


place with shale gas resources, there are shale basins from


Blackpool to scar bore roing row, from the Midland valley in Scotland,


and southern England. Estimates vary on how much gas it


might be possible to extract, the British Geological Survey reckons


on the equivalent of 18 months gas needs. Qaud drill la says it


calculates there krb -- Cuadrilla says it calculates many years


supply worth billions of pounds. To get an overview of just how big


an impact fracking could have on the landscape, it helps to get a


bird's eye view. This part of Lancashire is heavily


populated, with Blackpool on the coast and Preston further inland.


What makes people anxious, here in the UK, is that drilling sites are


so close to where people live. However much Cuadrilla vows to keep


its operation safe, people worry that other companies may not be as


conscientious. Christine Dickinson runs a caravan


site, close to where they might drill, and just down the road from


the local bird sanctuary. No, we don't want it, on here, on our


doorstep. Where it could contaminate the water, where the


birds are, it could contaminate our spring water. I have got a spring


here. We don't want to take that risk.


We approached Cuadrilla where former head of BP, Lord Brown is a


director, for an interview through their PR consultants in London. We


wanted to ask them about their practices, regulation and local


concerns, but they declined. In response to our questions they said,


Cuadrilla believes that the tough and comprehensive regulatory regime,


that is now in place, would ensure the UK can benefit from shale gas,


safely and securely. They said they have an on going


dialogue with local residents and believe shale gas could have a


transformative effect on the local and national economy.


But just how tough and comprehensive is the regulatory


regime that Cuadrilla refers to. Mike Hill took us to the site near


Blackpool, it is the only one in the UK that has been partially


fracked. Cuadrilla agreed to stop work after the earthquakes while


the Government review took place. That was months ago, but the


leftover fracking fluid is still here, because Cuadrilla has no


permit to move it. The water they are storing is radioactive, because


it has picked up natural radiation from underground. It is only a low


level, but above that allowed by the Environment Agency.


When you frack a well, you put about two millions of water down it,


one million flows away with the fracking chemicals, into the


formations and we don't know where it goes, the other comes back up


the well, half a million gallons per well, so up to 800 million


gallons of water that needs to be disposed of with up to nine-times


the radioactive levels. The Health and Safety Executive regulate this


industry. How many times have you come down, I asked them, how many


times have you inspected, when Cuadrilla say they are doing X, Y


and Z, how much times have you checked? The answer, none, not once


in two years has the HSE visited any of the wls in Lancashire to


test, or verify for themselves. sounds as if your concern over


regulation is left to the industry itself, rather than pro-active


regulation? It is entirely left to the industry itself. We asked the


Environment Agency, what plans it has to deal with the flow-back


fluid stored in Blackpool, and how it wants to regulate in the future.


And how they appear to be relying on assurances from Cuadrilla.


They say the company will have to seek a permit to dispose the fluids.


If the industry rides out local opposition, here in Lancashire, and


finds it really can extract as much as it hopes, and safely, the impact


of shale gas in the UK could be dramatic.


It is already bringing down gas prices in the US.


This poses a dilemma for the Government. Turning to gas for a


few more years pushes visions of a carbon-free energy supply further


into the future. But it could help to solve fuel poverty and boost the


economy, as it ponders this potential new source of home-grown


energy, that promise may prove too tempting to resist.


Two people whose positions on fracking are hopelessly irrock


consieming, Al Green, a shale gas Evangelist. And the only Green


member of parliament. What would the exploitation of gas,


only available through fracking do to the price of gas? I estimate it


would drop it by at least half by 2020. So we will be paying half


what we now pay for gas? That's correct. With the results in effect


on industry, and of course on electricity prices. Do you have any


evidence to support that claim? Certainly we are talking about


supply and demand here. They said there there was 150bcm, that is an


outdated figure that the British Geological Survey is changing. This


is not one North Sea, this is several North Seas worth of natural


gas. It is transforming world energy markets. And it will do the


same in Lancashire. So you don't dispute that, that if there is.


do. I dispute the issue of the cost saving that Nick has just put


forward. If you lock at someone like Deutsche Bank says, they are


hard-headed economists, they say in the UK context, the chances are


that shale gas won't reduce the price of gas significantly at all.


Because we are far more densely populated than the US. At the US


they are the only place exploiting shale gas. It has cut gas prices?


It has, what Deutsche Bank says it is unlikely to do that to any


extent through the UK, we are far more densely populate and it will


take far longer to get agreement to go ahead with mining. Why not take


the commercial risk? I want some facts on the table. Let's lock at


dech bank about the cost, and the pollution side of it as well, my


worry is when Nick says there is several North Seas worth of gas,


the truth is, even if we were to exploit 20% of the licensed area in


Lancashire, we would use up to 15% of our CO2 budget to 2050. If we


are serious about reducing climate figures we can't afford to extra


Kate that amount of gas. When you see -- Extricate that amount of gas.


When you see people setting fire toe their taps it is difficult.


is emotional. How is it emotional, you want to have a wash and there


is a fire, of course it is emotional! That has no connection


to fracking at all. Are you certain about that? Beyond a shadow of a


doubt. It is impossible that was caused by fracking? That is correct,


it has been proved many, many times. Or asserted many times? Even proven.


For example, if anybody would just go to Google News, and do a search


for water on fire, you will see, in Google News, north American


newspapers going back to the 1930s, 40s, and 50s, with taps on fire.


don't think we should get too diverted by that particular image,


it was shocking but there are plenty of other shocking images


around shale gas. Partly around the links to water contamination,


through the chemicals that are being used. But also the fact that


the first dash for gas we had was not a bad thing, it replaced coal.


This new dash for gas is likely to replace energy efficiency. That is


the real tragedy. That is a political point of view, you think


that all fossil fuel energy should eventually be replaced by energy


from renewable sources? Eventually. If we accept we need gas as


transitional fuel, don't use shale gas, it is more carbon intensive


than other gas. The would you accept it if you were satisfied it


was properly regulated, the exploitation and the regulations


and the way it works? It would be better than it is at the moment. I


still don't think it is the right way forward, for the reason I have


said, it is far more carbon intensive, contributing more to CO2


levels. Here in the world we are in the middle of an economic crisis?


We are saying this gas will be more expensive, potentially, than


conventional gas, and we are saying it is more carbon intensive. It is


a no-brainer. If they want to take the commercial risk, who are you to


stop them? It is not just a commercial risk, it is an


environmental risk, and locking us into a fossil fuel structure in our


energy supplies, at exactly the time we want to move on from that.


That is an ideolgical point? It is how to reach the climate change


objectives, agreed by the Government. We have the Climate


Change Act, saying we have to reduce our CO2 emissions by 2050,


we don't do that going down the Shell route. Let's park that and


the question of commercial risk. If an energy company decides it wants


to try to exploit this resource, is there any way, in your judgment, it


can be proper low and safely regulated? I think the jury is out


on that. Not east because, if we are serious about making this a


significant percentage of our energy supply. We might need 3,000


we wills, just to produce 10 -- wells, just to produce 10,000


thousands of gas supplies. This can create a huge amount of wealth for


the nation, which will be taxed, in this nation, and not exported to


the Norwegian sovereign wealth fund, or to fund the Royal Family of


Qatar. There will be plenty of money to


pay for teachers, nurses, doctors, and HSE inspectors and regulators.


This is the best news for the economy, and for the environment.


Because a true dismal sign has been energy.


He might have become a priest, instead a rock star. The story of


Jack White, considered one of the world's most influential guitarists,


has a Picaresque quality. The man who did or didn't marry the man who


wasn't his sister, and later got divorced from someone he married in


a ceremony in a canoe, keep up. He is ranked number 70 in the Rolling


Stone list of greatist by starrists of all time. He has been speaking


exclusively to US. They were the are they aren't they rock combo,


Jack White and his wife, Meg, or was she his sister, either I would


White Stripes were a big noise, but now the band has folded.


Hello. Welcome to London. Do you have the money in a suitcase.


Always. As you know, when the stars talk,


they talk to Newsnight, quite often, and Jack White is dropping in the


former County Hall in London, to discuss a new solo album,


Blunderbuss. I always loved the word, as a child there was a street


near my house, I lived near a fort and they were all military streets,


I loved the word "Dragoon", I thought they misPresident Yeltsin


"dragon", it is the piss -- Do you keep other words in there,


or is that not your tip? American as I am I don't have any


firearms. You are weapons-free at this time? Hands free!


# I want love to walk up and bite # Grab a hold of me and fight me


# Leave my dying on the ground Rock'n'roll wasn't White's only


career option, he also considered the priesthood. I was accepted at a


semry when I was younger, but I didn't go. I changed my mind at the


last second. You could have been Al Greene, and he has done well. What


happened then, you suddenly thought, I can't go through with this?


crunched some numbers, and the pay didn't look very good, so. Watching


the US election process from a distance, it seems as though


religion is a really big factor this time, does that strike you?


I'm not too political a guy, I do know America is quite addicted to


fear. They will take through religion if they need to, or go and


pay for it at the box-office to watch a movie or whatever it is.


Fear is a big addiction in America. Of course people are going to


exploit that through religious means. What about the little matter


of the American presidential campaign. Who has the guitarist's


vote? I refuse to vote for a President, I don't believe in the


Electoral College, I think it is an outdated mode from 200 years ago


that doesn't make any sense for modern times. We just saw that in


recent elections with George Bush, that he did not win by the popular


vote. I think the popular vote should elect the President, the


more votes you get, think you should be the President of the


United States. It seems quite a divided society as well. No, I


think there is, it has always been simplified, two-party system, in


any country, it is kind of ridiculously simplified, there is


not only two sides of the story. Some bad news, Jack White confirmed


there will be no more from him and Meg as the White Stripes, but were


they or weren't they an item. and I had really no idea what


people wanted from a male and female on stage, we didn't really


know what part of the deal was. you were happy to keep it fairly


opaque, you weren't going to be Sonny and Cher? It was a feeling


that what we wanted to represent was feminity and mass kallinity,


telling both sides of the story that was being performed. Finally


an insight into how we Brits are going down in White's home land.


This mean British celebrity vibe has gone on for the past few years,


with the Simon Cowells. Mean as in? Judgmental and harsh, vicious and


nasty was the chef. Ramsey? Gordon Ramsey, and Simon Cowell, in


America it comes off as Ricky Gervais. That is how we are seen


now. Nasty British celebrities. are not like that? You guys are


great. I love you guys. That is very sincere, thank you!


Back to the budget now, by this time tomorrow we shall have


discovered whether we really are all in this together, or some are


more in it than others, as a nation among other nations, Britain, of


course, isn't it in it alone, time to root Paul Mason out of the


basement again. He was going to come here with a wonderfully


elaborate, semi-high-tech tablet to display graphics showing our


international performance, but it doesn't work. Tell us about it?


This is not British technology. OK, the British economy is going quite


sluggish low. That is the background to the budget we have --


sluggishly, that is the background to the budget we have now. We had a


0.2% shrinkage in the last few year, it is locking like 0.8% growth


overall -- looking like 0.8% growth overall this year. The question


George Osborne has to address in tomorrow's budget, the question


that hangs over beyond politic, left and right both know this, is


that cutting tax for a hedge fund manager to bring him back to London,


and cutting tax for his cleaner, the two headlines, does not a


growth strategy make. You have to come up with convincing turn around


in some of the key figures. Now, what are those figures? One is the


level of GDP. The level of UK GDP has fallen during, in analog, I


could use my hand instead of the tablet machine. It has fallen and


stayed tag nant, it is not coming back in the same -- stagnant, and


not coming back in the same way as other countries. America is


recovering, Britain is not recovering anything like as fast.


The second set of metrics we have to look at is on industrial


production, industrial production is a geeky term. But America is


recovering, we are not. Despite this we have classy numbers out of


the car industry, we are exporting cars like crazy. It doesn't look


like that alone can turn Britain around. The final thing is


unemployment. We have managed to get away without the worst of the


unemployment that America has. America has, and the Euroland, have


had some very horrible unemployment figures. Ours are still rising,


while their's are falling. This is the challenge Osborne has to hit


tomorrow, he has to at this time it with a convincing story, that goes


beyond, as I say, the individual tweaks. Even the people briefing


tonight, this story about tax cut, are careful from the Treasury to


say it is at the edges, the story remains the same. Six years of very


hard graft, physically. Thank you very much.


-- fiscally. Thank you very much, clearly we are


lagging behind, what can George Osborne do to help. The economist


Megan Greene and Sam Fleming are here to share their ideas. Is he


likely to produce anything unexpected, something more


optimistic to say about the economy than the old merchant of gloom


here? It is critical he does produce a convincing narrative. I


agree with that. There will be certainly things that he has held


back. There always are. This has been a heavily breech -- briefed


budget as everyone saying. His room for manoeuvre is prodigious, he


needs to show the fiscal projective. He has put emphasis on maintaining


the credibility of the markets. And unfortunately for himself, he has


given huge status to the triple-A rating, which he has to show he


wants to maintain. This fiscally neutral budget, in terms of


increasing and reducing borrowing, will be one of the underlying


messages of the budget tomorrow. He's not short on vanity, like most


Chancellor of the Exchequers, can anything he does make much


difference? This is the thing, I think the Government has very


little room for manoeuvre, this rebalancing story is a slow burner.


What Britain needs to do is reduce its dependance on domestic demand


and financial services and slowly try to shift it towards export


orientated executors, that will take time. There is little to


announce tomorrow. That will take a generation? There is little to


announce to shock everyone in a good way that Britain has a new


fast growth strategy. We are looking at these numbers, or not


locking at the numbers, we would have been locking at the numbers.


If it had worked! As a terrible problem, if Euroland and the US are


beginning to grow more strongly this is the best news we have had


this year. Why are Euroland and the US growing faster than we are?


First of all, Euroland is Germany, that is driving that, we are not


talking about Italy or Greece, we are talking about Germany. They


still make things? It is in an economic sweet spot, they spend ten


years cutting costs and making themselves more competitive as an


economy. It is a long turn around, that is what Britain faces. It


can't be done jofr night. Germany is testament to that, if they are


seeing a real recovery, that is good news, that is one of the


massive export markets too, the states. I don't think the eurozone


won't grow more than the UK this yo, that will probably contract and


stagnate. Germany sure as hell will? That isks imbalances within


the eurozone. Germany is having to come up with an entirely new growth


strategy. It is doing exactly the opposite of the new and foster


domestic demand. Germany has been in a sweet spot in part because it


is doing better with competitiveness. The vast majority


of German experts go not just to the eurozone but to the BRIC.


Brazil, Russia, India and China? Yes, and they are not interested in


the UK's financial services, most of the UK's exports are going to


the eurozone, that won't provide much demand any time soon. What


about the ernest protestations we hear about cutting the 50p rate of


tax for the richest people in society is some how going to effect


economic transformation in this country? It won't effect an


economic transformation and it is being oversold in that respect. It


is about politic. There is a role in Government to provide signal,


there are many different signals you can send, one of the important


signals is we are open for business as an economy. The 50p rate has


this extraordinary state tuts, when you speak to business people --


status, when you speak to business people, they bring up the 50p rate,


the first thing you mention. If you were George Osborne cutting


corporation tax at 23%, with the 50p rate sitting over through r you,


it is a real problem sitting across from the table to the


multinationals and explaining the attractions of Britain. It is an


issue about politics and signals, I think it is signalling in in a bad


way. The Government have said we are in bad way and deleverageing


everything, and now cutting taxes for the wealthiests, it is a bad


signal, undermining the solidarity the Government has been trying to


convey. Some of tomorrow morning's front


pages now, the Times, they are all basic clo going with various leaks


and nudges and wink -- basically That is all for Newsnight, the race


has hoted up to avoid having to host the Eurovision Song Contest in


2014, that is the penalty for winning this year. Britain may have


entered the 75-year-old Englebert Humperdink, there is a rapper going


in talking about the structural # With contributions from the


institution # To find solution for pollution


Good evening, a chill in the air for some of you tonight. Another


mild day tomorrow, the best of the brightness will be across eastern


areas, a wet and windy start to north western Scotland. Most stay


dry. Sunny spells across many parts. That said, a little bit more cloud


for northern England and the Midlands, compared with this


afternoon. We won't quite get to the 17 degrees, some parts of


Lincolnshire and Yorkshire. By contrast, southern areas sunnier.


Temperatures here 15-16 degrees, likely in a few spots. That low


cloud first thing in the morning will lift and break, seeing the


sunny spells coming through. Wales, sunshine in the south compared with


today. A bit more cloud further north, remaining cloudy across


Northern Ireland, even here it will be one or two brighter breaks, just


possible in the north. North West Scotland, wet and windy start,


turning dry later, many western areas cloudy. To the east highs


possible, sunny spells, into Thursday we swap the fortunes round.


North western areas will fare better. Manchester and Belfast


becoming brighter. South-easterly winds will develop. London 17


degrees, Birmingham 15, across other parts of eastern England in


particular will see mist and low cloud to begin the day. Burning