22/03/2012 Newsnight


22/03/2012

In-depth investigation and analysis of the stories behind the day's headlines with Mishal Husain.


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Non-existant employers, untracable workers and employees who were

:00:10.:00:14.

actually freelance. Newsnight has evidence of widespread fraud at the

:00:14.:00:20.

jobs agency, A4e, Paul Mason investigates.

:00:20.:00:27.

In this leaked report, evidence of management issues at A4e, why

:00:27.:00:31.

didn't civil servants get to see it. Is it time for the Government to

:00:31.:00:36.

show A4e the door. We will have live reaction.

:00:36.:00:40.

The Toulouse Government ends in a police shootout, but ignites a

:00:40.:00:43.

debate on diversity in France, will it impact their presidential

:00:43.:00:47.

elections. Until now France hasn't seen the

:00:47.:00:50.

kind of home-grown Islamist terrorism that Britain and other

:00:50.:00:54.

European countries have experienced. But some say that the threat here

:00:54.:00:57.

was dangerously underestimated. Does the budget mean that the party

:00:57.:01:02.

is over for Britain's old people. And is that only fair.

:01:02.:01:06.

We will have young guns from Labour and the Conservatives here to slug

:01:06.:01:13.

it out. And...

:01:13.:01:18.

The athletes, the sponsor and an Olympic anthem for the world. DJ,

:01:18.:01:22.

musician and top producer, Mark Ronson, is here to explain how he

:01:22.:01:32.

wants us to feel about Britain and the games.

:01:32.:01:35.

Good evening, the company that has made millions out of welfare-to-

:01:35.:01:40.

work schemes, is at the centre of a new storm tonight, after a leaked

:01:40.:01:44.

report provided evidence apparent fraud. A4e is already under

:01:44.:01:48.

investigation, this report came from its own auditors, who warned

:01:48.:01:52.

in 2009, that numerous cases, where the company had supposedly got

:01:52.:01:54.

people into work and been paid for it by the Government, simply

:01:54.:01:58.

couldn't be backed up with evidence. The Government's position has been

:01:58.:02:02.

that systemic fraud will mean the end of A4e's lucrative contracts.

:02:02.:02:05.

Well our economics editor, Paul Mason, has been investigating.

:02:05.:02:10.

Here's a company that makes money by putting unemployed people into

:02:10.:02:14.

jobs. It sends a man for a job, and after two hours he complains of

:02:14.:02:18.

sore feet, and he leaves, and is never seen again, later somebody

:02:18.:02:22.

signs a form saying he had a job for 13 weeks. The company claims

:02:22.:02:28.

money from the Government for it. This is either fraud, or

:02:28.:02:33.

irregularity, or bad practice. We ought to know what it is.

:02:33.:02:37.

This stuff happens in the best of companies. What the Government is

:02:37.:02:41.

concerned about is whether this was systematic at A4e. This report,

:02:41.:02:48.

that was leaked to us, is full of such examples.

:02:48.:02:53.

And more, what it says is the company's management really were in

:02:53.:02:57.

danger of potentially systematic management failure, to address

:02:57.:03:06.

these problems of fraud and irregularity.

:03:06.:03:10.

Time was, A4e was the poster child for the Government's back to work

:03:10.:03:15.

programme, Mr Cameron made the company's boss his back-to-work

:03:15.:03:23.

adviser. Is she being helpful. helpful. A4e was paid �170 million

:03:23.:03:26.

a year by the Government, for training the unemployed and getting

:03:26.:03:30.

them into long-term jobs. The jobs were supposed to last at least 13

:03:30.:03:34.

weeks, and the employers had to sign a form, confirming the job was

:03:34.:03:38.

real, and reasonably full-time, not just a few hours a week.

:03:38.:03:43.

In July 2009, A4e audited the work of its top 20 recruiters, these

:03:43.:03:48.

were supposed to be the best people, and the auditors only looked at the

:03:48.:03:53.

files of 224 clients. It is just a snapshot, but what they found was

:03:53.:03:56.

disturbing. In offices scattered all over the country, A4e's finest

:03:57.:04:00.

were claiming for putting people into jobs that didn't exist, or

:04:00.:04:03.

didn't qualify for a payment from the Government, and fabricating

:04:03.:04:09.

paperwork to back up the claims. The report details potentially

:04:09.:04:16.

fraudulent, or irregular A4e claims. Three in Edinburgh, three in

:04:16.:04:20.

Newcastle, and six in Bridlington, two in Bootle, two in Manchester,

:04:20.:04:24.

one in Rotherham, and four in Nottingham, three in Norwich and

:04:24.:04:29.

two in Woolich. They could only be sure that everything was in order

:04:29.:04:32.

in two-thirds of the files they looked at. The report itself warns

:04:32.:04:38.

these are not isolated incidents. In Edinburgh, one client walked out

:04:38.:04:41.

after two hours, complaining of sore feet, and never appeared on

:04:41.:04:47.

the potential employer's books. But A4e still claimed the payment. In

:04:47.:04:52.

Bootle, the auditor could find no trace of an unemployed man who was

:04:52.:04:56.

supposed to have found work in Royal Mail, and no trace of the man

:04:56.:05:01.

who employed him. In Bridlington, a cafe owner told the auditor that he

:05:01.:05:06.

never met a man A4e claimed for. He wanted to know why A4e kept asking

:05:06.:05:12.

him to sign blank forms. In Woolich, Sebastien Fournier appeared to have

:05:12.:05:16.

claimed putting a benefits cheat back into a job he was already

:05:16.:05:26.
:05:26.:05:29.

illegally working from. The auditor Auditors found that recruiters

:05:29.:05:32.

thought there was nothing wrong in filling out forms that should have

:05:32.:05:37.

been completed by the employer. 4% of the claims by best recruiters

:05:37.:05:40.

were potentially fraudulent, found the auditors, and the rest were

:05:40.:05:46.

risky. The auditors were only sure that A4e was entitled to the money

:05:46.:05:50.

they claimed in 74% of cases. This is what the Deputy Prime Minister

:05:50.:05:53.

told parliament next week. We have launched our own audit of the

:05:53.:05:57.

existing contracts that A4e has received from Government. If there

:05:57.:06:01.

is any evidence of systematic abuse, of course we would end all

:06:01.:06:05.

contracts with A4e. Critics will say the report appears

:06:05.:06:08.

to provide the evidence of precisely this.

:06:08.:06:18.
:06:18.:06:27.

Of course, the majority of claims surveyed, as well as some of A4e's

:06:27.:06:31.

offices, and some of A4e's recruiters, were given a totally

:06:31.:06:35.

clean bill of health, although the report was written in 2009, we

:06:35.:06:39.

found two of those linked with potential fraud still working at

:06:39.:06:43.

A4e rb today. The report, back then, said

:06:43.:06:47.

management information, in relation to the effectiveness of existing

:06:47.:06:51.

controls, is minimal. A4e said the document was not the

:06:51.:06:55.

final draft, and that they had determined that only five claims

:06:55.:06:59.

were irregular, and related to one former employee. And that they had

:06:59.:07:05.

repaid the Government, less than �5,000. A4e wouldn't give us an

:07:05.:07:08.

interview, but an industry spokeswoman told us this.

:07:08.:07:13.

understanding is, that this is a report that A4e itself commissioned,

:07:13.:07:18.

and back in 2009, and it shared the findings of that report with the

:07:18.:07:20.

investigatory branch of the Department for Work and Pensions,

:07:20.:07:24.

and they found that all the appropriate action had been taken.

:07:24.:07:28.

The DWP told us, they never saw the document, they were made aware of

:07:28.:07:33.

the audit, and later received assurances from A4e that it had not

:07:33.:07:38.

uncovered any major issues. Michelle, those statements there,

:07:38.:07:42.

from the company, and from the DWP, do leave a lot of questions

:07:42.:07:49.

unanswered. Why didn't the DWP see this report, it is not a rough

:07:49.:07:54.

traft, it is a thorough report, hours of work by an auditor. And

:07:54.:08:00.

what did A4e do as a result of the problems. Labour started the

:08:00.:08:05.

process and hired them, and the coalition now, what will they do

:08:06.:08:12.

now. To read this report is im%ing yourself in the world of people

:08:12.:08:19.

worried about jobs, and being sent to lap dancing clubs, bars, cafes,

:08:19.:08:25.

low-paid employment, with very little power. They are doing the

:08:25.:08:28.

work under extreme pressure from the recruiters to get them into

:08:29.:08:32.

jobs. The Government doesn't want to come out and play and talk about

:08:32.:08:37.

this, it will have to, because it has a duty of care to the tens of

:08:37.:08:39.

thousands of unemployed people who are right now, today and tomorrow,

:08:40.:08:44.

going through the portals of this company's operation.

:08:44.:08:48.

Let as try and answer some of those questions, no-one from the

:08:48.:08:51.

Department of Work and Pensions, or A4e was available for interview

:08:51.:08:55.

tonight. With us in the studio is Margaret Hodge MP, the chair of the

:08:55.:08:59.

Public Accounts Committee. What did you think, watching Paul's report?

:08:59.:09:05.

I think it is a shocking catalogue of incidents, which suggest it is

:09:05.:09:09.

not contained in one area of the country, and it is not about one

:09:09.:09:13.

little group of employees. It seems to me that it is endemic in the

:09:13.:09:17.

company. I think the company has got questions to answer. I think

:09:17.:09:23.

what I feel is if the company, obvious low, saw this report, if I

:09:23.:09:27.

was a manager in that company, if I really had any moral integrity, I

:09:27.:09:31.

would have shared the entire contents with the department. I

:09:32.:09:35.

would have come clean, and I would have made absolutely clear what I

:09:35.:09:39.

was doing to put things right. This company gets hundreds of millions

:09:39.:09:43.

of pounds of tax-payers' money, your money and my money, and to

:09:43.:09:48.

think that on the back of that, the directors are becoming multi-

:09:48.:09:52.

millionaires, and individuals, who are desperate for jobs, are not

:09:52.:09:57.

being given a good service, it is not acceptable. There is clearly

:09:57.:10:01.

some eye-opening example, the auditors turning up to the

:10:01.:10:04.

employers' premises and they don't exist. Employers being asked to

:10:04.:10:10.

fill out blank forms by A4e employees. The question key to this

:10:10.:10:15.

from what the Government has said, the question of systemic fraud,

:10:15.:10:20.

from what you have seen today, do you think there is systemic fraud?

:10:20.:10:24.

I have no doubt, after reading the report, this is a systemic issue

:10:24.:10:27.

throughout the company. It was my committee that first highlighted

:10:27.:10:32.

the problems in A4e. Since we have discussed it, I have had over 100

:10:32.:10:35.

e-mails from individuals, either clients or people who have worked

:10:35.:10:40.

there. What comes out to me out of this, is I think the company

:10:40.:10:46.

appears to have been really greedy. You see that a little bit in Emma

:10:46.:10:50.

Harrisson paying herself a dividend of �8.6 million. I think there is a

:10:50.:10:54.

bullying culture there. In that culture people were cutting corners

:10:54.:10:57.

and there was cheating going on. From the point of view of the

:10:57.:11:00.

Government. The Government has consistently said that if there is

:11:00.:11:04.

evidence of systemic fraud, that they would stop the contract.

:11:05.:11:08.

that what you think should happen right now, today, on the basis of

:11:08.:11:11.

this? I have been saying for some time, that I think those contracts

:11:11.:11:16.

should be suspended. I wrote today to the permanent secretary in the

:11:16.:11:20.

DWP, asking him, yet again, to suspend the contracts with A4e. He

:11:20.:11:25.

has not done so. I think this has a wider impact, because if we don't

:11:25.:11:30.

sort this out, everybody will lose trust in the system as a whole.

:11:30.:11:35.

This is a new programme, there is literally hundreds of millions of

:11:35.:11:39.

pounds being put into the private sector. If theren't proper

:11:39.:11:43.

transparency and openness and confidence, we will lose trust in

:11:43.:11:48.

an absolutely key programme to get people back into work. Both the DWP

:11:48.:11:52.

and the statement for A4e, the point they are making, is both seem

:11:52.:11:57.

to think this is historic, the report came in 2009, the DWP says

:11:57.:12:00.

it has its own investigations, it is looking into this right now, and

:12:00.:12:05.

will come to its own conclusions. That honestly misses the point,

:12:05.:12:08.

trying to put the claim on what happened before the general

:12:08.:12:11.

election is silly. Do you think that something magically happened

:12:11.:12:16.

on the day of the general election. That changed the culture of this

:12:16.:12:23.

company? I don't. You think it is happening today? Among the 100 e-

:12:23.:12:26.

mails and letters I have had, there are people who are complaining

:12:26.:12:30.

about the work programme. We know that the DWP is investigating, and

:12:30.:12:34.

the police are investigating allegations around the present work

:12:35.:12:39.

programme. I think what is a really important point, the work programme

:12:39.:12:44.

is a new programme. It is going to be run by a whole lot of private

:12:44.:12:50.

providers. In a sort of, where there is not going to be very

:12:50.:12:53.

detailed vigilance of how they spend the money. I think it is

:12:53.:12:58.

hugely important, it is tax-payers' money, this is hugely important.

:12:58.:13:02.

There is proper transparency and openness, so you and I can be

:13:02.:13:05.

secure in the knowledge that the hundreds of millions is properly

:13:05.:13:09.

spent. It is a huge amount of money, briefly, if you can, A4e are also

:13:09.:13:13.

saying this dates back to a paper- based system they had in the past,

:13:13.:13:16.

and the new electronic controls they have would not allow it to

:13:16.:13:20.

happen today? If A4e had been completely open, and shared this

:13:20.:13:24.

report with the Government, I think that would have been one thing. I

:13:24.:13:27.

think any moral employer would have done that. If the Government knew

:13:27.:13:31.

about this report, and knew about the culture in this organisation,

:13:31.:13:35.

I'm extremely surprised that they thought that this was an

:13:35.:13:39.

appropriate company with whom they should be doing business, using our

:13:39.:13:43.

money. Also joining us tonight is Laim

:13:43.:13:46.

Byrne, the shadow Work and Pensions spokesman. If you were in

:13:46.:13:49.

Government today, what would you be doing about this report? I think I

:13:49.:13:53.

would be coming forward to parliament with some answers to

:13:53.:13:57.

some pretty basic questions. First and most important is, did

:13:57.:14:03.

ministers know about this report, when they handed A4e a �440 million

:14:03.:14:07.

new contract, to run the work programme. These new work programme

:14:07.:14:09.

contracts are the biggest payment by results contracts, pretty much

:14:10.:14:14.

in the world. They involve a huge sum of public money. And crucially,

:14:14.:14:18.

they are aimed at solving, what is one of the biggest crises

:14:18.:14:22.

confronting our country, which is the unemployment crisis. Ministers

:14:23.:14:27.

have to come forward and say did they know about this report when

:14:27.:14:30.

they handed out the contracts, if not, why not. Of course the people

:14:30.:14:34.

who are actually in power at the time that this report was written

:14:34.:14:38.

in July 2009 was the Labour Government. You were in Government

:14:38.:14:42.

at the time, it happened on your watch? Absolutely, our counter

:14:42.:14:45.

fraud checks happened to surface this problem, that is why a year or

:14:45.:14:49.

two after this report was reduced, someone was not only charged but

:14:49.:14:52.

convicted for fraud. That shows the checks were in place and working.

:14:52.:14:55.

The key now is whether the checks are in place on the big new

:14:55.:14:59.

contract, the work programme. That is why we need to know, did the

:14:59.:15:01.

ministers know about the report when they signed off on the

:15:01.:15:04.

contracts, and secondly, have they got the right checks in place today.

:15:04.:15:10.

We heard a few weeks ago the incredible news that the

:15:10.:15:14.

Government's counter fraud system for the woj programme isn't

:15:14.:15:18.

actually in place -- work programme isn't actually in place. If the

:15:18.:15:22.

checks were in place when you were in power they can't have been that

:15:22.:15:25.

good. We are talking about a geographical spread of these

:15:25.:15:29.

allegations across the country, six in Bridlington, four in Edinburgh,

:15:29.:15:32.

two in Woolich, the list goes on and on. You didn't have that good a

:15:32.:15:37.

system in place, did you? The fraud was surfaced, and someone was

:15:37.:15:41.

charged and convicted for it. The question now, as I say, is did

:15:41.:15:43.

ministers know about the report when they signed off on a massive

:15:43.:15:48.

new contract, and what checks have they now got in place, in order to

:15:48.:15:51.

ensure that the lessons have been learned and this is not happening

:15:51.:15:56.

again. Ministers have said, if they do find evidence of systemic fraud

:15:56.:15:59.

they will suspend the contracts. They are looking at the evidence,

:15:59.:16:02.

looking at the evidence that we have presented tonight, do you

:16:02.:16:06.

believe, as Margaret Hodge believes, that this is a systemic failure in

:16:06.:16:12.

systemic fraud? I think the onus is now on A4e and ministers, to

:16:12.:16:16.

satisfy parliament, and tax-payers, that this has come to an end. And

:16:16.:16:21.

that there isn't the same problem on this massive new contract in the

:16:21.:16:24.

work programme. Ministers like to boast it is what they call a black

:16:24.:16:27.

box contract, that means it is pretty hard to know what is going

:16:27.:16:32.

on inside, there is a much bigger incentive on companies to just get

:16:32.:16:36.

people into jobs, or toe claim that they have got people into jobs,

:16:36.:16:40.

that is the only way now they get paid. If tu like, the stakes are

:16:40.:16:44.

much higher for companies. The -- if you like the stakes are much

:16:44.:16:48.

higher for companies, the fraud is much greater and the checks should

:16:48.:16:51.

be tougher. I'm worried that the DWP has had to confess that the

:16:51.:16:55.

checks for the work programme won't be in place until the end of April.

:16:55.:16:57.

Margaret Hodge wants the contracts pulled now, because she doesn't

:16:57.:17:01.

believe this is a fit recipient of public money, are you making the

:17:01.:17:05.

same call tonight or not? taking slightly different position,

:17:05.:17:09.

I think that ministers need to come forward to parliament, very, very

:17:09.:17:13.

urgently now, and say did they know about this report when they awarded

:17:13.:17:17.

the contracts, that is a matter of enormous public concern, and second,

:17:17.:17:21.

what is the result of their incertainly investigation. We know

:17:21.:17:24.

there isn't a checking system in place, because they have to build

:17:24.:17:28.

it. We need to know now what their investigation is showing. This is a

:17:28.:17:34.

matter of massive public concern. President Nicolas Sarkozy has

:17:34.:17:37.

appealed for national unity in France, after the French Muslim

:17:37.:17:42.

responsible for the deaths of seven people in Toulouse, was killed in a

:17:42.:17:45.

police shootout, after a long siege. France has the largest Muslim

:17:45.:17:50.

minority in Europe. Debates about integration have become

:17:50.:17:54.

increasingly strident in recent years. It is also in the midst of a

:17:54.:17:56.

presidential election, with President Sarkozy trailing in the

:17:56.:18:03.

polls. First of all, here in Toulouse they

:18:03.:18:07.

are simply in enormous relief that the gunman, killed in the street

:18:07.:18:10.

behind me, is no longer at large. That is particularly because he

:18:10.:18:14.

warned police, over the last couple of days, that he had already

:18:14.:18:18.

identified his next victims. But along with that, questions are

:18:19.:18:22.

already beginning to be asked. Questions, first of all, about

:18:22.:18:25.

whether all the warning signs about the killer had been picked up on,

:18:25.:18:29.

and we have heard reports, for example, tonight, unconfirmed, that

:18:29.:18:34.

the Americans had already put him on their no-fly list. There are

:18:34.:18:41.

also questions being asked about the radicalisation of French youth,

:18:41.:18:46.

about immigration, and those are questions about which, on which the

:18:46.:18:51.

far right, the National Front, can only make political capital.

:18:51.:18:54.

Questions which President Sarkozy and the other mainstream

:18:54.:18:58.

politicians will have to answer. But first, this is how the events

:18:58.:19:04.

unfolded today. The police had been surrounding the block of flats in a

:19:04.:19:09.

quiet residential area of Toulouse, since early yesterday morning.

:19:09.:19:13.

They set off explosions throughout last night. In an attempt to

:19:13.:19:16.

exhaust Mohammed Merah and force him out.

:19:16.:19:23.

But the final drama didn't come until 10.30am.

:19:23.:19:26.

(gunfire) Heavy gunfire rang out through the evacuated streets, soon

:19:26.:19:30.

it was revealed how the siege had ended. Police had stormed the flat,

:19:30.:19:36.

but a door and window, after a six- hour silence from Merah, and were

:19:36.:19:43.

met with gunfire. TRANSLATION: killer came out of the bathroom, he

:19:43.:19:48.

was shooting violently, the shots were frequent and severe, even

:19:48.:19:52.

those used to seeing such things, said they weren't used to seeing

:19:52.:19:56.

such ferocity. The policemen defended themselves, but in the end

:19:56.:20:00.

Mohammed Merah jumped through the window, with one weapon in his hand,

:20:00.:20:03.

still shooting. He was found dead on the ground. Police moved in

:20:03.:20:07.

after they heard Mohammed Merah was planning to kill another soldier.

:20:07.:20:10.

It appeared he was already responsible for seven deaths.

:20:10.:20:18.

On March 11th, a paratrooper was shot dead in Toulouse, on March

:20:18.:20:23.

15th two more paratroopers were killed. On March 19th, three

:20:23.:20:27.

children at a Jewish school in Toulouse, and a rabbi were gunned

:20:27.:20:32.

down. But today, after the death of the gunman on this street, many

:20:32.:20:36.

questions are still unanswered. Until now, France hasn't seen the

:20:36.:20:40.

kind of home-grown Islamist terrorism that Britain and other

:20:40.:20:44.

European countries have experienced. But some say that the threat here

:20:44.:20:50.

was dangerously underestimated. There is particular concern that

:20:50.:20:53.

the Secret Services were apparently tracking the killer for several

:20:53.:20:56.

years, but didn't consider him a risk.

:20:56.:21:01.

Merah, pictured here, in an internet video, was a French

:21:01.:21:06.

citizen of Algerian background, who travelled twice to Afghanistan and

:21:06.:21:11.

Pakistan to train with Al-Qaeda fighters. He claimed to belong to

:21:11.:21:16.

Al-Qaeda. French prosecutors believe he was a Lone Wolf, acting

:21:16.:21:20.

without acomplises. TRANSLATION: This is someone who we can't link

:21:20.:21:24.

to a known organisation or structure. This is someone who

:21:24.:21:29.

doesn't generate attention, even during the period when he committed

:21:29.:21:32.

crimes. It was clearly a solitary person, who remained closed up at

:21:32.:21:36.

home and tied up with visions and scenes of decaptations. That's his

:21:36.:21:43.

profile. Merah grew up in these streets, in the poor district. His

:21:43.:21:48.

friends were other young men like these, from north African families.

:21:48.:21:52.

Young men who today didn't want to talk to journalists, rocks were

:21:52.:21:58.

thrown at us when we tried to film here, some think France should

:21:58.:22:02.

learn a lesson from Merah's story. TRANSLATION: It is a problem of

:22:02.:22:04.

communication between the generations and between native

:22:04.:22:08.

French people and those who have come from abroad. People who

:22:08.:22:12.

suffered racism, both at school and in work. One politician, quick to

:22:13.:22:17.

draw conclusions today, was the leader of the far night National

:22:17.:22:21.

Front, Jean-Marie Le Pen, she said poor suburbs were being surrendered

:22:21.:22:25.

to Islamic radicals. But other contenders in the upcoming

:22:25.:22:29.

presidential elections have been much more restrained. The two main

:22:29.:22:36.

candidates, President Sarkozy and his socialist challenger, Francois

:22:36.:22:41.

Allende, suspended their campaigns this week, now the politicicing

:22:41.:22:45.

will continue in ernest. Many people that Mr Sarkozy has done

:22:45.:22:50.

himself nothing but good by playing the dignified President this week,

:22:50.:22:53.

and avoiding any accusations he was trying to profit from events.

:22:53.:22:57.

Tonight Mr Sarkozy was already back on the stump, he told an

:22:57.:23:00.

enthusiastic audience in Strasbourg, that there was nothing in French

:23:00.:23:05.

politics or society to explain this month's killings. TRANSLATION:

:23:05.:23:10.

today I want to say that these crimes were not the act of a madman,

:23:10.:23:15.

because a madman is irresponsible. These were crimes committed by a

:23:15.:23:23.

monster. A fanatic. Just hours after Mohammed Merah's

:23:23.:23:26.

death, it is too soon to know if France will agree with the

:23:26.:23:31.

President. The coming four weeks of campaigning will now coincide with

:23:31.:23:38.

a completely unexpected period of national soul searching.

:23:38.:23:44.

Let as talk about what this means for France. In Paris now is the

:23:44.:23:48.

political commentator, Agnes Poirier. It has been a really

:23:48.:23:52.

dramatic couple of days. How big a moment do you think this is for

:23:52.:23:56.

France? It is a big moment, perhaps because the killer was French. He

:23:56.:24:03.

was a French national, killing his compatriots, on distorted religious

:24:03.:24:08.

grounds. But still, religious grounds.

:24:08.:24:12.

It has been very interesting being both in London, as I have been, and

:24:12.:24:18.

in France during those three days. The view in France so far has been

:24:18.:24:24.

to avoid certain issues, certain questions. The representatives of

:24:24.:24:27.

the Muslim Council of France decided to say that Mohammed Merah

:24:27.:24:33.

didn't belong to us, it wasn't one of us, it wasn't Muslim as far as

:24:33.:24:38.

they were concerned. You know, a lot of people haven't felt they

:24:38.:24:43.

could say that he was an Islamist. Mohammed Merah does represent a

:24:43.:24:47.

very distorted and perverted version of Islam, but one that

:24:47.:24:51.

needs to be addressed, not only by French Intelligence Services, but

:24:52.:24:55.

also by the French Muslim community. In what way would you want to see

:24:55.:25:00.

it addressed, what actually needs to change in practical terms?

:25:00.:25:04.

it is the responsibility, I guess, of religious authorities, to make

:25:04.:25:14.
:25:14.:25:16.

sure that only moderate Islam is taught in school, and preached in

:25:16.:25:24.

mosques. And Salafists are not allowed to impose their norm, and

:25:24.:25:28.

as the specialist of the Arab world would say, it is very important

:25:29.:25:35.

that Imans in French mosques do emphasise the belonging to the

:25:35.:25:40.

national community. Because all these people were French. And they

:25:40.:25:43.

still were killed. You know there is a wealth of information, there

:25:43.:25:48.

is a wealth of influence out there, far beyond what Imams in France can

:25:48.:25:51.

or should be speeching, what about the responsibility of the French

:25:51.:26:01.
:26:01.:26:01.

said in this. I What in terms of the French state can be done in

:26:02.:26:05.

national policy rather than just the religious authorities? I think

:26:05.:26:08.

it is a collective responsibility that we should actually start

:26:08.:26:15.

addressing, really. You know, the Republic is a wonderful

:26:15.:26:18.

construction, but has been slight low abandoned by politicians in the

:26:18.:26:25.

last 25 years. You know, it is not only Nicolas Sarkozy's devisive

:26:25.:26:30.

policies of the last five years, we are talking about 25 years of

:26:30.:26:35.

leaving poor suburbs becoming no-go zones for the police. It is a

:26:36.:26:41.

question of education, it is a question on the ground for

:26:41.:26:49.

religious authorities to make sure that they teach moderate Islam. It

:26:49.:26:57.

is collective problem I think. Let's bring in the author of How To

:26:57.:27:02.

Be French, Alan Wiley, do you agree with Agnes Poirier that this is a

:27:02.:27:05.

moment for a major re-think, she says policies have been going wrong

:27:05.:27:13.

for 25 years in France? Well, no I don't agree. This man was a fan at

:27:13.:27:19.

that timeic, a madman, who has -- fanatic, a madman, he has attacked

:27:19.:27:23.

not just Jews, but Muslims and black. The soldiers were not white,

:27:23.:27:28.

they were black and Arabs. He hated the idea that Arabs, or black,

:27:28.:27:34.

could be part of the French army. That French institutions could

:27:34.:27:38.

equal low people from all regions, people from all faiths, all colours,

:27:38.:27:48.

that is what he hated the most. I think he didn't get teaching in

:27:48.:27:54.

France, he got his teaching in Afghanistan, and in Pakistan.

:27:54.:27:58.

Obviously we don't know for sure, there is a suggestion that he has

:27:58.:28:03.

been radicalised in France, perhaps, during his imprisonment. No, no, no.

:28:03.:28:09.

No, no, no, no. He was radicalised outside of

:28:09.:28:17.

France, he was a madman, he tried to commit a crime in 2008. He was

:28:17.:28:21.

in a psychiatric hospital, the doctor asked him to be followed by

:28:21.:28:25.

doctors and he was not followed. So it is a failure of our medical and

:28:25.:28:28.

Secret Service. So it is an isolated case, and

:28:28.:28:38.

there is no need for any kind of re-think by the French state?

:28:38.:28:42.

course there is a need for a re- think. I think the French

:28:42.:28:48.

politicians and public have reacted very well in the last two days. By

:28:48.:28:53.

showing unity behind the institutions, the army, for example,

:28:53.:28:59.

who gather all French from all parts the country. And also the

:28:59.:29:04.

Jews, who can attend in our system, religious school, still being

:29:04.:29:11.

French. This guy has attacked the French model of integration, which

:29:11.:29:18.

is based on institutions that favour unity and equality, and

:29:18.:29:23.

statement accept diversity. I think it was great in the last --

:29:23.:29:32.

estimate accept -- I think it was great in the last fou days that

:29:32.:29:38.

people all come together and accept we are together. When hundreds of

:29:38.:29:42.

Norwegians were killed last summer, the Prime Minister of Norway said

:29:42.:29:45.

he wanted us to change what we are, and we are going to continue to

:29:45.:29:49.

stay what we are. And it is, I think, the same thing for the

:29:49.:29:58.

French to do. Some budget analysis, despite not

:29:58.:30:03.

particularly hitting grannies, it seems more grandfathers are

:30:03.:30:12.

actually affected and not actual -- actually with the granny tax out of

:30:12.:30:15.

the budget. Do the figures the Chancellor read out confidently

:30:15.:30:20.

actually add up. Today it was the turn of the Institute of Fiscal

:30:20.:30:24.

studies to give its take on the budget, a vital calendar event for

:30:25.:30:30.

those working out the confusing budget numbers. I'm not sure not

:30:30.:30:34.

for you. Did the pensioners, in reality, get a hard deal? Looking

:30:34.:30:39.

at this morning's papers, this was an unprecedented generational

:30:39.:30:44.

mugging on the pensions, the IFS described the change as modest.

:30:44.:30:47.

They had some rather interesting graphics to back up what they had

:30:47.:30:52.

to say. If we look at what they produced, the chart they produced.

:30:52.:30:56.

It shows, and we see behind you there, if we look at who got what

:30:56.:31:02.

out of this budget, well, we see that households with children on

:31:02.:31:06.

the left there did is it rather well out of this budget. Pensioner

:31:06.:31:10.

households in the middle there did rather badly out of it, households

:31:10.:31:14.

without children did rather well again. The Government say that is

:31:14.:31:18.

misleading, we have to take in the round all the changes since 2010,

:31:18.:31:22.

when the Government came in. If we plot all of that on the chart, it

:31:22.:31:27.

shows the big losers out of the budget, out of those changes since

:31:27.:31:32.

2010, if we look behind you, is households with children, nearly 4%

:31:32.:31:35.

of their income has disappeared, where as pensioner households have

:31:35.:31:39.

done rather better. What about the number crunching on

:31:39.:31:43.

the 50p tax rate, there is suggestion that it was scrapped

:31:43.:31:47.

because it didn't raise thatch money at all? On that, I think the

:31:47.:31:51.

Chancellor has -- that much money at all? On that, I think the

:31:51.:31:54.

Chancellor has less support from the IFS. Trying to maximise the

:31:54.:31:58.

amount you take is very difficult, the IFS say it is highly

:31:58.:32:03.

speculative, it is difficult to find the figures. They say that on

:32:03.:32:08.

the HMRC's own figures, there is a 30% chance that it could be lower

:32:08.:32:15.

than 30p in the pound. There is a 30% chance it could be higher than

:32:16.:32:20.

75p in the pound. The inference you draw from that is the Chancellor

:32:20.:32:24.

picked 45p because he wished that to be the number. There is another

:32:24.:32:27.

point raised about that, they say the Chancellor has given up some

:32:27.:32:31.

certain streams of revenue, from raising the allowances, and looked

:32:31.:32:39.

for some places to make up for it, in other streams of revenue that

:32:39.:32:43.

were less certain, how many hot chicken people will buy in future

:32:43.:32:47.

and hot pies, it is not clear. many people now will be paying

:32:47.:32:53.

higher rate tax? An interesting fact from the IFS, they have

:32:53.:32:58.

created 325,000 higher rate tax- payers, this is the 40p rate. By

:32:58.:33:05.

2014, 15% of tax-payers will be paying a higher rate. They contrast

:33:05.:33:13.

that with 1978- 69, when it was only 3% of tax-payers. To dissect

:33:13.:33:19.

it with me are my guests. Why is it that pensioners took the

:33:19.:33:25.

hit, was it just their turn? Well, the impulse behind why this was

:33:25.:33:30.

brought in is because there is a very sharp rise that David was just

:33:30.:33:37.

talking about, in the amount that everybody is going to be earning in

:33:37.:33:41.

their working age before they pay tax at all. That is rising sharply.

:33:41.:33:48.

He took the decision to hold steady the age-related part, and the

:33:48.:33:52.

threshold that all of us have, the amount all of us who are working

:33:52.:33:57.

can earn before they pay tax, is rising to meet it. That is a great

:33:57.:34:00.

simplification. Let me explain one important part of why this

:34:00.:34:03.

simplification is important. are not denying they are being hit,

:34:03.:34:08.

I'm just asking why it was, what was the thinking behind making that

:34:08.:34:13.

particular choice? Because I do take dispute with the premise of

:34:13.:34:17.

your question. Because actually there is no cash losers. It is

:34:17.:34:21.

important for people watching the programme, especially if they are

:34:21.:34:26.

pensioners, to know, there is no tax rise on them. It is just that a

:34:26.:34:30.

future increase in the threshold won't be happening, because it will

:34:30.:34:36.

be frozen. 3.2 million pensioners didn't claim this increase extra

:34:36.:34:41.

allowance that is being phased out, because it is so complicated. I

:34:41.:34:46.

think that a simple letter system, that is the same for everybody, --

:34:46.:34:49.

simpler system, as a long-term goal, that is the same for everybody is a

:34:49.:34:52.

good thing. This Government has done a huge amount for pension erbs

:34:52.:34:58.

and does support pensioners. If you think that is a simple explanation

:34:58.:35:02.

people might have to look again. We have been saying for a long time

:35:02.:35:06.

that the Government is out-of-touch. You can't fool people all of the

:35:06.:35:09.

time, this was one of those budget changes which was very clear about

:35:09.:35:14.

the Chancellor's priorities, he priority yoised millionaires over

:35:14.:35:18.

pensioners, he -- prioritised millionaires over pensioners. He

:35:18.:35:27.

raided some hard earned money of pensioners and given a � 14 --

:35:27.:35:31.

14,000 millionaires a tax cut of money each. That is an incredible

:35:31.:35:34.

set of priorities for somebody who said we are all in it together. The

:35:34.:35:38.

key thing to remember here is this is a chipping away of the support

:35:38.:35:41.

we should have in society for pensioners. We have VAT going up to

:35:41.:35:46.

20%, pensioners, of course, lost the top-up on the winter allowance,

:35:46.:35:50.

they lost their free swimming, the concessionary coach travel. A lot

:35:50.:35:53.

of pensioners up and down the country will be asking what is next.

:35:53.:36:00.

Is this the thin end of the wedge. The IFS has said it is a modest

:36:00.:36:03.

change, you can look at it in a cumulative way? We know about the

:36:04.:36:08.

cliff edge, as it was called in the child benefit arrangements, there

:36:08.:36:13.

is a very personishious edge here, if you were born on the wrong side

:36:13.:36:18.

of a day in April 1948, the hit to you will be upwards of �3020, this

:36:18.:36:25.

is a significant judgment. When -- �320, it is a significant judgment.

:36:25.:36:28.

He is excluding the cost of inflation. The cost of living is

:36:28.:36:32.

extremely high, the basic state pension should have IRA flexion for

:36:32.:36:42.
:36:42.:36:42.

inflation in it, but pension flexion for inflation in it, but

:36:42.:36:46.

pensioners up and down the country will be finding it difficult.

:36:46.:36:51.

People will not take it from a Labour spokesman who ran Gordon

:36:51.:36:54.

Brown's leadership. We remember the 10p tax rate that hit pensioners in

:36:54.:37:02.

the pocket, we remember the 75p pension rise, instead, in two weeks

:37:02.:37:06.

time, pensioners are getting more than �5 a week increase in the

:37:06.:37:10.

pension, which is the biggest ever. Because inflation is so high.

:37:10.:37:14.

won't take this about pensioners, you have seen from the chart how

:37:14.:37:17.

pensioners have done well, relative to other groups under this

:37:17.:37:25.

Government, and that is because we support pensioners. Let me give you

:37:25.:37:30.

examples, that �5 a week rise, also the new pension being brought in at

:37:30.:37:36.

around �140 a woke, to remove means testing -- a week, to remove means

:37:36.:37:41.

testing. You took away the top-up. That was put in for one year before

:37:41.:37:44.

the election by Gordon Brown and it was programmed to come out. Let's

:37:44.:37:50.

bring up the graph once again, the numbers speak for themselves. If

:37:50.:37:54.

you have a look at this particular graph, Matthew, hopefully we will

:37:54.:37:57.

get in just a second. It is somewhere, but essentially, if you

:37:57.:38:02.

look at the winners and the losers, on the winning side of it, it is

:38:02.:38:06.

the working families with or without children who are on that

:38:06.:38:10.

side of it, the pensioners are on the minor side of it. You have to

:38:10.:38:13.

look in context what the Government has done for pensioners, you can

:38:13.:38:17.

see that everybody, of course, has had to pay some of the debts that

:38:17.:38:21.

Labour brought in. You can see in the red all of those bars are red

:38:21.:38:25.

because everybody's having to take a hit for the massive debts this

:38:25.:38:30.

country was left with. A graph like this doesn't stand because you have

:38:30.:38:34.

to look at everything cumulatively. The red bars rather than the blue

:38:34.:38:40.

ones, which says what is this coalition Government doing for

:38:40.:38:42.

pensioner households, they are relatively protected. It is really

:38:42.:38:46.

important to mention this, the chalet a whole load of information

:38:47.:38:51.

out before the actual budget statement -- Chancellor let a whole

:38:51.:38:53.

load of information out before the budget statement, and he didn't

:38:53.:38:58.

have the courage to leak this mit on pensioners. If you think you can

:38:58.:39:02.

-- hit on pensioners. If you think you can put it in cash or real

:39:02.:39:06.

terms. This is the Chancellor deciding to give a tax cut to

:39:06.:39:09.

millionaires funded by the hit on pensioners. Pensioners who have

:39:09.:39:14.

been reflected in the tax system since Churchill introduced this

:39:14.:39:19.

age-related allowance back in 1925, this is a big mistake on your

:39:19.:39:24.

behalf. We will vote against it when it comes to parliament. Will

:39:24.:39:28.

you reintroduce your things. would love to make a commitment,

:39:28.:39:32.

who knows what other things they will cut away at before 2015. There

:39:32.:39:38.

is a chipping away. When we get to 2015, we will address it in the

:39:38.:39:45.

manifesto. Was it in your manifesto. Let me just make this point. We

:39:45.:39:48.

have heard empty opposition from Labour, they are complaining they

:39:48.:39:51.

haven't anything positive to say, and the support for pensioners from

:39:51.:39:55.

the record rise in the state pension from this Government, is

:39:56.:40:01.

showing that we are on pensioners' side.

:40:01.:40:06.

Rarely has so much fanfare greeted a little bit of blue lycra, the

:40:06.:40:12.

official kit for British Olympic hopefuls was unveiled today, work

:40:12.:40:17.

of Stella McCartney for Adidas. There are others with own related

:40:17.:40:23.

products, Coca-Cola have funded Anwar them produced by award

:40:23.:40:28.

winning producer DJ Mark Ronson. First we look at how to capture the

:40:28.:40:33.

sound of an Olympic city. The eyes of the world will be on us

:40:33.:40:37.

this summer. So will their ears.

:40:37.:40:43.

Looking after the music, it is hip, youngish, some time Londoner, Mark

:40:43.:40:47.

Ronson. His tune for the Olympics can be considered part of a PR

:40:47.:40:55.

opportunity. To offer a new take on brand Britain. Some 15 years after

:40:55.:40:59.

called cool Britannia. Although the keen-eyed amongst you may also

:40:59.:41:05.

notice another brand is also on view here.

:41:06.:41:15.
:41:16.:41:18.

It is almost like an orchestra. Peron's record is part inspiration,

:41:18.:41:21.

part perspiration. The producer travelled the world, sampling the

:41:22.:41:26.

noises made by elite athletes, their strides and their growns,

:41:26.:41:35.

including our own big hope Darius Knight. I realised that one of the

:41:35.:41:41.

cool things Darius does is make these grunts, it reminded me

:41:41.:41:47.

instantly of, you know how James Brown, somebody like a really

:41:47.:41:53.

precussive singer would grunt on their track.

:41:53.:41:58.

Like Peron, other stellar qul turl figures have been mingling with

:41:58.:42:02.

young limb krb cultural figures have been lingering with young

:42:02.:42:06.

athletes, running up new threads for them. It is nothing I have

:42:06.:42:10.

worked on before, I'm working with athletes and the first questions I

:42:10.:42:14.

have are what can I do for you. If you are performing and you feel you

:42:14.:42:18.

look better, do you feel it enhances your performance. You get

:42:18.:42:21.

so many different answers to so many different questions. It is

:42:21.:42:25.

really different, and the technology is completely different.

:42:25.:42:32.

What are Peron's credentials to be banging the drum for Brand -- Mark

:42:32.:42:37.

Ronson's credentials for banging the drum for Brand Britain at the

:42:37.:42:43.

moment. He has worked with Adele and the late Amy Winehouse. Mark

:42:43.:42:49.

Ronson's big retro sound, recalling the hey day of stacks and Motown

:42:49.:42:52.

records, helped to make her an international star, and helped to

:42:52.:42:58.

confirm his own reputation. Mark Ronson has got London roots,

:42:58.:43:03.

he shot this video in the capital. So does it matter that his new

:43:04.:43:08.

Olympics anthem will be used to sell a fizzy drink for one of the

:43:08.:43:18.
:43:18.:43:21.

sponsors of the games. The producer certainly has the musical chops.

:43:21.:43:25.

Though we at Newsnight privately wonder if his new tune could

:43:26.:43:33.

possibly eclipse this golden classic.

:43:34.:43:42.

A great favourite with Jeremy, incidently, it is Prog Rockers

:43:42.:43:49.

Emmerson Lake and scam Palmer at the Montreal venue. A monster slab

:43:49.:43:56.

of olympian rock. Mark Ronson is here in the studio.

:43:56.:43:59.

How did you approach this particular project when it first

:43:59.:44:02.

came to you, what did you think the message you wanted to deliver out

:44:02.:44:05.

of the games would be? The first thing they came to me and said the

:44:05.:44:09.

concept was to go around the world recording these Olympic athletes,

:44:10.:44:14.

and recording the sound of sports, to turn into a track. Which I like

:44:14.:44:19.

a challenge, you know at the outset of a project. That was it. Being a

:44:19.:44:23.

song for London 2012, this is the city I was born in and is the city

:44:23.:44:27.

I live. It is a huge responsibility. You don't want to make something

:44:27.:44:30.

that is bad because you are representing a city, it is

:44:30.:44:34.

embarrassing for everyone. So there was the pressure of both of those

:44:35.:44:39.

things, the pressure of making the track on the sound of sports, and

:44:39.:44:44.

making something great that, if it is good, it can stay in the history

:44:44.:44:49.

of great London songs, things like London Calling, or whatever you

:44:49.:44:53.

want to choose. Is there a message you were trying to get across about

:44:53.:44:59.

London as a city, and perhaps about Britain, or about Britishness?

:44:59.:45:04.

definitely. KatyB, who wrote the lyrics, and is the singer on the

:45:04.:45:09.

track, she encapsulates the sound of young London more than I do,

:45:09.:45:12.

she's 21, she is closer to it. There is something about her when

:45:12.:45:16.

she opens her mouth and talks about down by the river, she doesn't need

:45:16.:45:20.

to say the Thames for you to know what she's talking about. That was

:45:20.:45:25.

the point in this song, to make it feel like London, to make it feel

:45:25.:45:28.

like something that was part of the Olympic Games, without saying,

:45:28.:45:32.

we're winning, we are all getting the gold, you know we're all

:45:32.:45:39.

running up to Big Ben today. I think that was definitely testament

:45:39.:45:44.

to Katy and how great she is an artist, her voice and what she

:45:44.:45:48.

embodies, it is there in the song. Did you want to get back to the

:45:48.:45:52.

cool Britannia days, the hey day of Britain feeling like it was at the

:45:52.:45:58.

cutting edge of something in music or fashion or arts? I think that in

:45:58.:46:02.

some ways, you know, and I have to say it started probably about five

:46:02.:46:09.

or six years ago. Obviously there was the cool Britannia, Oasis, Blur,

:46:09.:46:17.

that era, with Lily Allen and Amy Winehouse into Adele and Florence,

:46:17.:46:20.

it is an era, nobody needs me to go around and say it is, you look at

:46:20.:46:24.

the charts in America and across Europe and Asia. These are some of

:46:24.:46:29.

the biggest, Adele is the biggest superstar in the world. Is the

:46:29.:46:35.

feel-good factor still there. Cool Britannia was in the boom time,

:46:35.:46:40.

1997, Tony Blair coming to power, everything feeling different than

:46:40.:46:44.

today in an age of austerity. Can we have the same buzz today? People

:46:44.:46:49.

look to their music for an escape. And part of me wishes that, you

:46:49.:46:54.

know, some of the top ten reflected a bit of what is going on, as

:46:54.:46:57.

opposed to everyone spraying champagne in the club left and

:46:57.:47:01.

right. I understand that people do want to forget about their every

:47:01.:47:07.

day troubles when they listen to music, I guess the charts reflect

:47:07.:47:11.

that. The other thing that is central to this particular anthem

:47:11.:47:14.

is the commercial side of it. You watch the video, Coca-Cola is all

:47:14.:47:18.

over it. Let's face it, it is a very commercial piece of music,

:47:18.:47:23.

made to a certain brief. Does that not detract from it at all. How did

:47:23.:47:26.

you feel about being part of something that is so commercial?

:47:26.:47:30.

You know I think the record industry, everyone knows the record

:47:30.:47:34.

industry has fallen on hard times. You have projects like this, where,

:47:34.:47:43.

I'm not going to go as far to say it is musical fill lanthropy, no

:47:43.:47:49.

record company -- fill lantthropy, no record company will pay for me

:47:49.:47:53.

and Katy to go around the country and make this song. I don't think I

:47:53.:47:59.

sold out,. Mark Ronson good luck with it. Thank you very much.

:47:59.:48:03.

That is all from Newsnight tonight, Emily is here at the same time

:48:03.:48:13.
:48:13.:48:17.

tomorrow, with all the news fit to tomorrow, with all the news fit to

:48:17.:48:19.

screen, from me, good night. The weather is set to fair over the

:48:19.:48:23.

next few days, sunshine on Friday. Low cloud and mist will dissipate.

:48:23.:48:27.

There will be a few exceptions, maybe some low cloud drift to go

:48:28.:48:31.

the east coast of England, the odd shower across western parts of the

:48:31.:48:36.

UK. So isolated hardly worthy of a mention. For most of us fine, warm

:48:36.:48:39.

and sunny. I mentioned the east coast, cooler and cloudier, that

:48:39.:48:43.

will be the exception. For many of us temperatures will be soaring

:48:43.:48:49.

into the mid-to high teens, more sunshine tomorrow across parts of

:48:49.:48:54.

South-West England today. The odd shower and a fair bit of cloud,

:48:54.:48:58.

that won't be the case on Friday. Parts of Northern Ireland, these

:48:58.:49:04.

will be a dying breed with showers, the odd shower might crop up across

:49:04.:49:09.

the heart of Scotland. Particularly in the west, very isolated and

:49:09.:49:11.

nearly everywhere will stay entirely dry. That will be the

:49:11.:49:15.

story as we hit the weekend, dry with some sunshine. The best of

:49:15.:49:20.

that across the more western parts of the country. This is where the

:49:20.:49:23.

best of the temperatures will be, as we progress into the weekend,

:49:23.:49:27.

sunny and warm. Always towards the most eastern coastal areas, with

:49:27.:49:32.

the breeze coming off the sea it will be notably cooler, and the

:49:32.:49:36.