:00:13. > :00:20.The unravelling of George Osborne's budget. Chapter 33, what once was
:00:20. > :00:22.said to be so clear is now shrouded in a fofg granny taxes, tax evaders,
:00:23. > :00:27.tax avoiders and pasties, that is not all:
:00:27. > :00:32.Labour this week will force a Commons vote on the plan to cap tax
:00:32. > :00:33.breaks on giving to charity, severely test the loyalty of
:00:33. > :00:37.Conservative MPs. The former Prime Minister, Tony
:00:37. > :00:40.Blair, tells the Government, where it is going wrong. And the current
:00:40. > :00:46.chairman of the Conservative Party, will doubtless be very glad of his
:00:47. > :00:56.advice. And then, this.
:00:57. > :01:02.As a massive money laundering trial ends, they are protesting in
:01:02. > :01:12.Nigeria in favour of corruption. gave me $50 million in cash, a big
:01:12. > :01:16.sack. How big is a sack with $50 billion? A big one.
:01:16. > :01:21.The Prime Minister said today that he wanted to see more giving to
:01:21. > :01:26.charities, yet one of his own ministers admits that the planned
:01:26. > :01:30.changes announced in the budget will have what he calls an impact
:01:30. > :01:36.on donations. "shambles" was the word used by the Charities Aid
:01:36. > :01:41.Foundation to describe the limits to charitable giving. Coming on top
:01:41. > :01:45.of the granny tax, the pasty tax, the income tax, and to say nothing
:01:45. > :01:52.of the Francis Maude memorial petrol panic. Some MPs are
:01:52. > :01:57.wondering what on earth has gone wrong. Allegra Stratton reports.
:01:57. > :02:02.Seen opened up like this, Downing Street looks like a happy doll's
:02:02. > :02:10.house, with interconnected posh carpets rooms, and a Warren of cosy
:02:10. > :02:16.dens, conducive to the construction of policy. This week the Georgian
:02:16. > :02:20.doors seem to have got jammed, a good news and bad news story
:02:20. > :02:24.merging, David Cameron has come under scrutiny. His impartial civil
:02:24. > :02:28.servants, meant to be helping him keep an eye on Government, stand
:02:28. > :02:31.accused of inyou are ining him to the voters. All problems are
:02:31. > :02:37.supposed to have stemmed from the budget, the budget from hell as it
:02:37. > :02:43.has been Chrisened. The problems have been lingering on from that.
:02:43. > :02:48.It was the infrastructure announcements of tolling on roads,
:02:48. > :02:53.most Conservatives hate those those plans. There is the minimum pricing
:02:53. > :02:58.on alcohol, that the policy makers pushed for but Conservatives do
:02:58. > :03:01.hate. Sources have told Newsnight that policy unit submission goes
:03:01. > :03:06.straight to the Prime Minister, with departmental special advisers
:03:06. > :03:10.having no chance to object to ideas, which is often where the political
:03:10. > :03:15.elephant traps lie. One adviser to the Prime Minister said to his face
:03:15. > :03:18.in a meeting, is the problem for Whitehall special adviser is they
:03:18. > :03:22.didn't know who to call when there is a problem in the department.
:03:22. > :03:27.People across Whitehall have been told by people from Number Ten that
:03:27. > :03:29.they are thinking in too ideolgical a way. Something people in
:03:29. > :03:36.Government and the coalition Government has told me that Downing
:03:36. > :03:40.Street has a lot of influence but not much power. Under the
:03:40. > :03:44.Government currently, most of those have left Downing Street, you have
:03:44. > :03:47.a department staffed and run by civil servants. The problem with
:03:47. > :03:50.that is if you don't have strong political people in the centre,
:03:50. > :03:53.they don't have the same political antenna for things that might be
:03:54. > :03:57.happening in the departments. For example, things like the problems
:03:57. > :04:00.that the Government had over the health bill. I think it is a
:04:00. > :04:04.question of whether they could potentially have a stronger, more
:04:05. > :04:08.political Downing Street operation. Someone who ran the policy unit
:04:08. > :04:12.under Gordon Brown thinks that David Cameron has a problem.
:04:12. > :04:16.Labour's was an era where policy was crafted on sofas, not desks.
:04:16. > :04:20.Since the 1970s when the policy unit was created under Harold
:04:20. > :04:23.Wilson, it has had the same structure half-a-dozen politically
:04:23. > :04:27.committed experienced policy experts. David Cameron was the
:04:27. > :04:31.first Prime Minister, since the 1970s, to get rid of that structure
:04:31. > :04:34.and replace it with civil servants, that is a big mistake, because you
:04:34. > :04:40.don't have people to scrutinise mistakes the departments might have
:04:40. > :04:46.made, and things like the NHS wouldn't have happened on my watch
:04:46. > :04:50.and others over the years. loyal Tory MP thinks a focus on the
:04:50. > :04:54.bricks and mortar of the Conservative operation is misplaced.
:04:54. > :04:57.The reality is we are mid-term with a Government that is doing the most
:04:57. > :05:02.radical things a Government has had to do, in the mid-of a time when
:05:02. > :05:06.the economy is not growing, and lots of -- middle of a time when
:05:06. > :05:11.the economy is not growing, and lots of people are having miserable
:05:11. > :05:16.lives. The surprise to me is it is two years before we have problems
:05:16. > :05:19.in the press, and being unpopular, we thought we would be the most
:05:19. > :05:23.unpopular Government ever within three months of coming into office.
:05:23. > :05:26.If a problem with the policy unit is overdone, there is a fault line
:05:26. > :05:31.within Downing Street, horse trading between the Treasury and
:05:31. > :05:36.Liberal Democrats, saw the Liberal Democrats give into the abolition
:05:36. > :05:39.of the 50p rate f it could be showed money was being clawed back
:05:39. > :05:43.in other areas of the budget. This wasn't the bricking up of the Prime
:05:43. > :05:47.Minister from inside, but it was the quad, bricked up away from
:05:47. > :05:51.everyone else. Each one was happy with the top line result of the
:05:51. > :05:57.budget, but they left the details to other people. To the horror of
:05:57. > :05:59.even their most loyal fans, the charities tax undermined The Big
:05:59. > :06:09.Idea society. Today the Conservatives fought back to
:06:09. > :06:31.
:06:31. > :06:36.explain why they had driven for a The daylight illuminated less
:06:36. > :06:41.helpful figures for the Government. As the BBC business editor blogged
:06:41. > :06:46.today, the data showed over 73% of those earning over �250,000, were
:06:46. > :06:51.paying an average tax rate of over 40% in 2010/11, complicating the
:06:51. > :06:54.Chancellor's reason for scrapping the 50p rate. This was never to be
:06:54. > :06:58.introduced until next year, plenty of time to get it right and consult
:06:58. > :07:02.and listen. The key principle is, for more charities and
:07:02. > :07:06.philanthropic giving, yes, but allowing people to drive their tax
:07:06. > :07:09.rate down, when some of the richest people they are, no. Right now
:07:09. > :07:12.David Cameron's MPs are out campaigning in the local election,
:07:12. > :07:17.which they fear could be quite bad for them. Their chances are not
:07:17. > :07:23.helped, they feel, by new taxes, with irritatingly catchy titles.
:07:23. > :07:25.Before the next round of elections, there are very fine Georgian walls,
:07:25. > :07:29.that may yet have to be reduced to rubble.
:07:29. > :07:32.A man with some experience of the slings and arrows of Government, is
:07:32. > :07:37.the former Prime Minister, Tony Blair, who happens to have been
:07:37. > :07:40.trumpeting the virtues of philanthropy in Washington this
:07:40. > :07:46.evening. Tony Blair, is the Government right
:07:46. > :07:51.to think about capping the level of tax relief on charitable donations
:07:51. > :07:53.at �50,000, or a quarter of income? To be fair to them, this is a
:07:53. > :07:58.consultation, so they have the opportunity to think again. I think
:07:58. > :08:02.it is wise if they do. Because, if I were them I would just separate
:08:02. > :08:08.out these issues to do with tax avoidance and charitable giving.
:08:08. > :08:12.I'm here in Washington addressing the Global Philanthropy Forum, all
:08:12. > :08:17.around the world the philanthropic sector is doing more. Most people
:08:17. > :08:20.want to give to charity to do good rather than escape tax. The
:08:20. > :08:22.important thing is to separate those things out, if there is tax
:08:22. > :08:27.avoidance deal with that in a different way. We should be doing
:08:27. > :08:31.everything we can at the moment, to encourage the philanthropic sector,
:08:31. > :08:36.the third sector was a large part of our Government agenda, it is
:08:36. > :08:40.still very important n in times of economic difficulty even more so.
:08:40. > :08:44.Would you prefer a person paid the potential level of tax envisaged
:08:45. > :08:49.under it, or gave the money to Tony Blair Faith Foundation? If people
:08:49. > :08:52.want to give their money there, I'm delighted. You don't run
:08:52. > :08:56.foundations unless you are trying to raise money all the time. Anyone
:08:56. > :08:59.giving money to a charity, if they are giving it to a genuine
:08:59. > :09:03.charitable cause, they are losing money. If they retained that money,
:09:03. > :09:06.even if they paid tax on it, they would still retain some of that
:09:06. > :09:11.money. If they give it to charity they lose that money. They give it
:09:11. > :09:16.to a charitable cause. If they are not giving it to a genuine charity,
:09:16. > :09:20.or the charity's not doing work with a proper public benefit, there
:09:20. > :09:24.is an armoury, a battery of rules that you can bring in to bear, to
:09:24. > :09:28.make sure that doesn't happen. That's why I think, mixing these
:09:28. > :09:32.two things up is unfortunate. I'm sure the Government don't
:09:32. > :09:35.intentionally want to harm the philanthropic sector, that would be
:09:35. > :09:39.daft, I'm sure they don't want to do it. What they should do now,
:09:39. > :09:41.they have the time. I have been through many situations like this,
:09:41. > :09:45.sometimes things slip through, they are not right. You have the chance
:09:45. > :09:49.with a consultation to correct them. The important thing is to correct
:09:49. > :09:51.them, and not end up in a battle with the philanthropic sector,
:09:51. > :09:56.which they will find difficult to win.
:09:56. > :10:02.How can it be right that a multi- millionaire pays a lower rate of
:10:02. > :10:05.income tax than a teacher or lorry driver? They shouldn't. People pay
:10:05. > :10:08.the top rate of tax at 50p, they should pay that. If someone gives
:10:09. > :10:12.to a charitable cause, for many, many years, if they give to the
:10:12. > :10:17.charity, they are losing the money, they are giving the money to the
:10:17. > :10:20.charitable cause. If you want to encourage the philanthropic sec to
:10:20. > :10:23.Governments have necessary roles to makes there are things that
:10:23. > :10:26.Government does very well there are things I that discovered in
:10:26. > :10:30.Government, that the third sector, the voluntary sector, do better
:10:30. > :10:32.than the Government. It is the job of successive Governments to
:10:32. > :10:35.encourage this charitable sector. If you want to encourage it, you
:10:35. > :10:40.say to people, give your money to charity, that is a good thing, not
:10:40. > :10:45.a bad thing. That implies a no upper limit of any kind, just
:10:45. > :10:52.encourage them, eh? Why not encourage it. The philanthropic
:10:52. > :10:55.sector today in the UK, is worth billions, it isth does fantastic
:10:55. > :10:59.work, at local level, international and national level. It is important
:10:59. > :11:02.to encourage it. This conference I was giving the keynote speech at
:11:02. > :11:05.today in Washington there were philanthropists from around the
:11:05. > :11:13.world, including the UK, they do great work F their charities aren't
:11:13. > :11:18.doing good work, or we introduced, I think, in 2006, actually as the
:11:18. > :11:23.Government introduced an amendment to the charities law, saying
:11:23. > :11:26.charities have to display a public benefit. If not take action against
:11:26. > :11:29.the charities. Don't end up in a situation where you are implying
:11:29. > :11:33.that people are donate to go charities for tax avoidance, I
:11:33. > :11:37.really don't think that is the case. Do you think the climate is
:11:37. > :11:46.changing in this country, the climate of opinion towards wealth
:11:46. > :11:50.creation, do you think it is souring? When times are really
:11:50. > :11:55.tough, and times are tough in the UK, here in America, round the
:11:55. > :12:00.world at the moment. Then I think there is a risk that people mix two
:12:00. > :12:04.quite separate things up together. One is how do we make sure that
:12:04. > :12:09.people pay their fair share of tax, and the other is, how do we get the
:12:09. > :12:11.economy growing? What is important to realise is that wealth creation
:12:11. > :12:15.and entrepeneurship will always be part of a growing economy, we
:12:15. > :12:18.should encourage. That obviously people should pay their fair share
:12:18. > :12:22.in tax. In any of these situations there is balance to be struck, and
:12:22. > :12:25.I think it is important to get that balance right. Now, by the way, all
:12:26. > :12:29.Governments go through these periods, that's for sure, but I
:12:29. > :12:35.think what actually is important at the moment is to distinguish
:12:35. > :12:38.between having a tough time as a Government, because you're taking
:12:38. > :12:42.an unpopular decision that you have genuinely worked out and believed
:12:42. > :12:45.to be right, and having a tough time because the decision is not
:12:45. > :12:54.properly thought through. contrast is with your Government
:12:54. > :12:57.who recommended Fred good win for a Knighthood? -- Fred Goodwin for a
:12:57. > :13:01.knighthood? If you want to go back over those debates you can, I don't
:13:01. > :13:05.think they really impact on now. The question now is how do you make
:13:05. > :13:11.the tax system fair, how do you, at the same time, create a tax system
:13:11. > :13:15.that is rewarding entrepreneurship and wealth creation. Do you think
:13:15. > :13:20.they were wrong to get rid of the 50p tax rate and reduce it to 45p?
:13:20. > :13:24.I will deal with one issue at a time. The reason I'm dealing with
:13:24. > :13:28.this now is because I'm giving this speech on philanthropy and its
:13:28. > :13:31.importance. I think with this, I'm not making some great heavy
:13:31. > :13:36.political point, I'm simply saying they have the time to consult,
:13:37. > :13:40.consult. If I were them I would literally just disentangle these
:13:40. > :13:44.two issues, they are separate issues. I bet you're glad you are
:13:44. > :13:49.not in Government now, aren't you? Government, as I always used to say,
:13:49. > :13:54.is a great privilege, but it can be sometimes very tough. That's to be
:13:54. > :13:57.expected. But, you know, it, as I used to tell the Labour Party, it
:13:57. > :14:04.is better to be in Government than opposition. I read your speech
:14:04. > :14:08.earlier, you seemed to suggest at one point that philanthropy is
:14:08. > :14:11.potentially more inspiring and more effective than many of the
:14:11. > :14:14.mechanisms of Government, do you really believe that? I believe
:14:14. > :14:18.there is certain things that only Government can do. So only a
:14:18. > :14:22.Government can put through education, health reforms, decide
:14:22. > :14:26.levels of public spending, I described in my speech how Northern
:14:26. > :14:30.Ireland's not a process that can be done outside Government. But I also
:14:30. > :14:35.do think that Government itself today has got to reform, Government
:14:35. > :14:38.has to become more strategic, more empowering, less top-heavy, the
:14:38. > :14:43.philanthropic sector, and the private sector, by the way, can be
:14:43. > :14:46.great partners in this. I do think we are entering an age in which, if
:14:46. > :14:53.you want to get things done, that is the key challenge of Government
:14:53. > :14:56.today, it is efficacy, how do you get the job done? Then the
:14:56. > :14:59.philanthropic sector can be more creative, imaginative and
:14:59. > :15:03.innovative than Government. It is not substituting for Government,
:15:03. > :15:06.but in its proper place it can be a great inspiration and compliment to
:15:06. > :15:11.it. One final point on the current state of the Government, given the
:15:11. > :15:15.state it is in, why isn't Ed Milliband doing better? He is, he's
:15:15. > :15:20.putting his case forward, he is articulating where he thinks the
:15:20. > :15:23.country should go. Look, Labour was only put out of office a couple of
:15:23. > :15:27.years ago. It is not surprising in this first period of opposition it
:15:27. > :15:31.is tough, but there is a long way to go. I think one of the things
:15:31. > :15:35.that is interesting, actually, about this present situation, by
:15:35. > :15:38.the way, since I know how difficult it is, I'm not giving advice to
:15:38. > :15:42.anybody. You wouldn't have lost the Bradford West by-election, would
:15:43. > :15:47.you? You can't say that, actually, I don't know. What I do know is, I
:15:47. > :15:51.think if I had put my finger on anything that I think is a problem
:15:51. > :15:56.for the Government, it is the nature of this coalition, I think,
:15:56. > :16:00.sometimes. Which is more a marriage of convience than conviction. Is
:16:00. > :16:06.that if they are not careful, they end up having to satisfy one side
:16:06. > :16:10.and then the other side. In that policy trade, I think you sometimes
:16:10. > :16:15.get incoherence, that's as mild a criticism as you can make. But I
:16:15. > :16:20.think it is quite an important one. If I were them looking forward, I
:16:20. > :16:22.would try and make sure that before these policies are announced a
:16:22. > :16:26.little more indepth policy work is being done.
:16:26. > :16:30.Tony Blair, thank you very much for joining us.
:16:30. > :16:36.The person being blamed by some Conservatives for the mess that the
:16:36. > :16:41.party's in is the home improvements fanatic, Sayeeda Warsi, or to give
:16:41. > :16:46.her the right title, Baroness Warsi, the Party Chairman. Do you think
:16:46. > :16:49.the budget was a success? The way in which parts of the budget have
:16:49. > :16:52.been communicated, subsequent to the budget being announced, could
:16:52. > :16:57.have been done better. Because it is a coalition, so much of what was
:16:57. > :17:02.in the budget, which traditionally wouldn't be in the public domain,
:17:02. > :17:08.was in public domain. Those bits that weren't, were the bits seized
:17:08. > :17:13.and discussed in detail afterwards. It is all the fault of the Lib
:17:13. > :17:16.Dems? No. A Conservative Government would have been watertight, you are
:17:16. > :17:20.suggesting? The coalition means Governments can't be as watertight
:17:20. > :17:23.than if it was a single party. it is the Lib Dems? It is the
:17:23. > :17:25.reality of the coalition. We are two parties, we talk to our
:17:25. > :17:29.individual parties when these decisions are being made, and some
:17:29. > :17:36.decisions are made public. Conservative is this Government?
:17:36. > :17:39.Well it is interesting, because I spend a lot of my time campaigning
:17:39. > :17:43.and activists ask me that question. One of the things I take around
:17:43. > :17:46.with me, and is with me today, is the Conservative manifesto, which
:17:46. > :17:50.gives me a God indication of what we are delivering and how much is
:17:50. > :18:00.in the manifesto. That is a notebook? It is the
:18:00. > :18:05.manifesto from 2010. Wouldn't the coalition agreement be
:18:05. > :18:09.more relevent? It is trying to put together the bulk of the
:18:09. > :18:14.Conservative manifesto and the bits of the Lib Dem coalition. For me it
:18:14. > :18:20.is showing what we campaigned for in 2010 and what we are delivering.
:18:20. > :18:23.Why are you garnering, almost a month after the event, such
:18:23. > :18:26.unhelpful headlines in sympathetic newspapers? There is a lot of
:18:26. > :18:30.miscommunication, some of it in terms of how we communicated it in
:18:30. > :18:35.the Government, some of it in the way it was reported. Look at them,
:18:35. > :18:40.the Telegraph, Mail, the Guardian isn't your friends, and the Mirror,
:18:40. > :18:45.I don't know what that is doing up there. The Mail, the Telegraph, the
:18:45. > :18:51.Sun, your friends, that is not helpful, is it? If you unpick each
:18:51. > :18:58.and every one of those arguments. Let me take a typical one, the
:18:58. > :19:02.pasty tax. A very serious matter? Labour made it into an issue of
:19:02. > :19:05.class, so if anyone, a northerner, someone like you and I eating
:19:05. > :19:09.pasties all day and this was an attack on our lifestyle. They
:19:09. > :19:14.failed to understand, that the chip buttie, or chicken and chips, or
:19:14. > :19:17.any other snacks we may be eating as working-class people, have VAT
:19:17. > :19:21.on them. It was right that the Government in the budget take an
:19:21. > :19:25.opportunity to close the loopholes. There is something deeper than that,
:19:25. > :19:29.there is, what seems to be, a profound incoherence at the heart
:19:29. > :19:36.of policies announced in this budget. For example, cutting the
:19:36. > :19:42.top rate of income tax from 50p to 45p, that yields about how much?
:19:42. > :19:47.don't know the exact figure, but it yields more at 45p than 50p.
:19:47. > :19:54.lose about �50 million, according to projections, and possibly �100
:19:54. > :19:56.million the next year. Capping the rate of donations to charities,
:19:56. > :20:02.yields what? Is that a another thing you don't know? The figures
:20:02. > :20:05.are still to be made clear on that. That is between �50-�100 million?
:20:05. > :20:10.At the moment it is out for consultation. Let me unpick the
:20:10. > :20:13.charities' tax as it is called. are taking with one hand and giving
:20:13. > :20:17.with the other, it doesn't make sense, it is the same people?
:20:17. > :20:20.you look at the charities' tax as it is called. Let's break what it
:20:20. > :20:25.is about. What Tony Blair has just said is it is absolutely right,
:20:25. > :20:28.people are generous, people give to charities and philanthropic causes,
:20:28. > :20:33.and that has to be encouraged. You can't have a situation, say if you
:20:33. > :20:37.are a middle or low income earner, you make your contribution, it is
:20:37. > :20:44.called tax. It goes into the general public purse. If you are
:20:44. > :20:50.very rich and you can actually give away your income in a way where you
:20:50. > :20:53.abort into the 10p brand or else, you are saying, because I am richer,
:20:53. > :20:56.I can choose which causes I want to give to, rather than the general
:20:56. > :20:59.public purse. What the Government is saying is there has to be a
:20:59. > :21:04.balance. You have made this case, your party has made this case
:21:04. > :21:10.repeatedly, all I'm arguing or suggesting to you is it is slightly
:21:10. > :21:13.incoherent, that is all? When you are in coalition. This is the Lib
:21:13. > :21:17.Dems' fault too? When you are in coalition it is not as easy to have
:21:17. > :21:21.a very clear view and matterive, which is based upon the principles
:21:21. > :21:27.of one party. The Conservative Party have some very clear
:21:27. > :21:31.principles, the majority of the coalition Government, and what we
:21:31. > :21:33.are delivering in Government is part of those principles, there are
:21:33. > :21:37.other principles, Liberal Democrat principle, that butt up against
:21:37. > :21:41.that, out of that sometimes comes an incoherence. It is not always
:21:41. > :21:46.easy to have a clear, Conservative narrative. However much I would
:21:46. > :21:50.like it and argue for it, for 2015. You are conceding the Government is
:21:50. > :21:55.incoherent, what about the question about the further influence of the
:21:55. > :21:59.Lib Dem Government? What I'm a saying is it is not always easy to
:21:59. > :22:02.put a single coherent argument on single coherent principles, because
:22:02. > :22:06.we have two parties in the coalition. We have two sets of
:22:06. > :22:10.values, and two sets of narratives, which come together to put forward
:22:10. > :22:14.a Government programme. There is one single narrative, that is this,
:22:14. > :22:16.as Party Chairman I feel it more than anything else. That is, that
:22:16. > :22:20.we are acting in the national interest, not in individual
:22:20. > :22:24.political interests. Does it help to have people like
:22:24. > :22:29.Vince Cable, who have apparently agreed the budget, immediately
:22:29. > :22:33.coming out and denoinsing some of its measures? That is a matter --
:22:33. > :22:37.we nouncing some of its measures? That is a matter for Vince, I
:22:37. > :22:47.believe if you standby a decision once it is made. Doesn't it make
:22:47. > :22:47.
:22:47. > :22:50.you hopping mad? I recently described Tim Farren, not in
:22:50. > :22:53.cabinet part of the coalition colleagues we work closely with.
:22:53. > :22:58.Maybe if you were outside Government you would be a more
:22:58. > :23:02.effective Party Chairman? Unlike Tim Farren who sits outside
:23:02. > :23:07.Government. He can say what he wants? I described him as a bad
:23:07. > :23:11.episode of Come Dine With Me, I don't think it is right people sit
:23:12. > :23:18.down and eat your food and slag you off in the cab home. When you are
:23:18. > :23:23.in coalition and partnership, it is about being in it together, and we
:23:23. > :23:28.standby the decisions we make together. But those parties in
:23:28. > :23:35.coalitions throughout Europe and the world, they try to carve a
:23:35. > :23:38.singling out for themselves. I want to see from my party, I'm glad my
:23:38. > :23:42.Conservative colleagues uphold to, that is a more collective approach
:23:42. > :23:46.to responsibility, and coming to agreement, let's stick to them.
:23:46. > :23:51.Just before he left office, Tony Blair bitterly remarked that the
:23:51. > :23:57.media in this country had become like a feral beast. Nothing such
:23:57. > :24:03.creatures like more than a bit of political chaos. Three who left the
:24:03. > :24:10.confines of polite society are with us now.
:24:10. > :24:16.James Purnell, Miranda Green, and Fraser Nelson, the editor of the
:24:16. > :24:21.Spectator. Last time you two were here was on the budget night?
:24:21. > :24:25.I was watching. Very loyal. Did you imagine that a month on we would
:24:25. > :24:29.still be talking about the budget? We did say it was a big risk, the
:24:29. > :24:39.cut to the 45p, there was quite a lot of discussion about the grany
:24:39. > :24:45.
:24:45. > :24:48.tax. I think we were fairly cautious about that. It is not just
:24:48. > :24:52.Lib Dem and Conservative coalition, you have The Big Idea society and
:24:52. > :24:56.economic liberals, in the Lib Dems there is the Social Democratic side,
:24:56. > :25:01.like Shirley Williams, then the orange-bookers, Nick Clegg, and
:25:01. > :25:05.David Laws, you also have the Tory right, which can veto anything at
:25:05. > :25:09.any time. The danger is it is hard to get big new things off the
:25:09. > :25:12.ground, because there is always someone who can return it. They
:25:12. > :25:16.could agree the coalition agreement, but it is very, very hard to come
:25:16. > :25:23.up with new ideas, someone always around the table says they won't
:25:23. > :25:28.stand for it. There is something in that, we hear about the "quad", the
:25:28. > :25:32.elite group of four who agree everything behind closed doors,
:25:32. > :25:35.Osborne, Nick Clegg and Danny and Vince. That is not getting both
:25:35. > :25:39.parties to agree. David Cameron has a particular problem with his own
:25:39. > :25:41.backbenchers who think he should have won the last election outright.
:25:41. > :25:44.They disagree with them fundamentally. They think if the
:25:44. > :25:50.party shifts to the right they will win another election outright. He
:25:50. > :25:55.won't do that, because he knows it is wrong. It is frustrating that
:25:55. > :25:59.what the Government is getting right, radical school and welfare
:25:59. > :26:03.reform, is being eclipsed by a long list of things, the pasty tax and
:26:03. > :26:07.granny tax. It is not so much to do with bad spin, they don't really
:26:07. > :26:11.engage their brain a lot before making ale policy. This group of
:26:11. > :26:15.four, the quad, they passed what is now known as the charity tax,
:26:15. > :26:19.without realising the extent of the effect it would have. If that was
:26:19. > :26:23.thought through properly, there is a proper political unit in nen
:26:23. > :26:27.Number Ten, as in stair's day, they would have thought about this
:26:27. > :26:31.before, and you wouldn't have got to the stage where you are making
:26:31. > :26:34.the announcement first and working it out only seeing it in the next
:26:34. > :26:38.day's paper. It is easy for media smart arses to make that sort of
:26:38. > :26:43.comment after the event. But that is what happens in Government,
:26:43. > :26:48.isn't it? You have to keep battering on, always, two or three
:26:48. > :26:54.years into a Government, this sort of thing happens. You hit choppy
:26:54. > :26:58.water? I was in the policy unit before, it was a tightly-knit band
:26:58. > :27:02.of political advisers, through opposition together, they could
:27:02. > :27:06.read each other's minds, we were quick at spotting political
:27:06. > :27:09.problems. Having said that we were criticised for having too many
:27:10. > :27:13.special advisers and it was spin gone mad. In a way you can never
:27:13. > :27:16.completely win. There is also a question about whether the
:27:16. > :27:20.Conservatives have drawn slightly the wrong lesson from Tony Blair.
:27:20. > :27:24.We were told they all went out and read his book. He said hi a big
:27:24. > :27:28.majority and I wasted it, and didn't do enough with it. They
:27:28. > :27:32.haven't got a big majority, maybe they should have done what he did
:27:32. > :27:35.in 1997, which is cautious with his political capital, do big things,
:27:35. > :27:40.like education and constitutional reform. Make sure you win the next
:27:40. > :27:43.election, in a way they read the book but applied completely the
:27:44. > :27:47.wrong lesson. You are shouting "slow down"? Yes, there is a lot of
:27:47. > :27:52.criticism that the Government is trying to do too much at the same
:27:52. > :27:56.time, and rushing ahead, because they have the blairb book as a
:27:56. > :28:00.background manifesto. There was too much of a reaction against Tony
:28:01. > :28:04.Blair, David Cameron prides himself in how few special advisers he has
:28:04. > :28:14.got. My advice is he hasn't enough. We are not seeing ale could igs l
:28:14. > :28:15.
:28:15. > :28:19.but a coup at the at that time with -- coalition, but a coup de etat.
:28:19. > :28:22.You need a grey beard saying no goodwill come of this, or something.
:28:22. > :28:25.That is what the Civil Service are saying, they are saying don't do
:28:25. > :28:30.it? They are saying no, Prime Minister, you don't want any of
:28:30. > :28:36.these nasty special advisers. about George Osborne, supposed to
:28:36. > :28:43.be the master tactition, election planner and winner in all, where is
:28:43. > :28:47.he in all of this? Has been on holiday. But it is certainly true
:28:47. > :28:51.to say this budget was not a great advert for Osborne the master
:28:51. > :28:55.tactition. But then again, we are mid-way through, you show me any
:28:55. > :28:59.Government that is not taking a kicking, two or three years into
:28:59. > :29:07.the term. It is always happening. It just seems a lot more
:29:07. > :29:10.embarrassing, because there are things that are so avoidable. The
:29:10. > :29:13.10p pension increase that Labour had to endure, that was one mistake.
:29:13. > :29:17.It seems we are getting this almost every week. What is interesting
:29:18. > :29:21.about that period, the 10p tax, we were losing tax discs, that was a
:29:21. > :29:25.big story, is the smaller things become a big story when there was
:29:25. > :29:29.not a big driving thing happening. It doesn't have to be a detailed
:29:29. > :29:33.strategy, but a guiding policy. The Government has lots of different
:29:34. > :29:41.ones at the same time. Why isn't Ed Milliband doing better, Tony Blair
:29:41. > :29:45.was pretty loyal and supportive, pretty discreet? He's 11 ahead in
:29:45. > :29:48.the polls. Tonighter on talking about the problems in the coalition
:29:48. > :29:52.and two months ago it would have been the problems with the Labour
:29:52. > :29:56.Party. What has happened with the budget is there is a shift in the
:29:56. > :30:01.mind set. An inevitable ability about a Cameron majority in the
:30:01. > :30:04.next election is not there any more. The polls shifting is really
:30:04. > :30:11.interesting, they have shifted since the budget, which is
:30:11. > :30:16.significant. Except for the Lib Dem ratings? Glossing swiftly over that.
:30:16. > :30:20.We are at a mid-term cusp. If we are heading to a hung parliament,
:30:20. > :30:24.who will be the larger party. This is a moment when the main parties
:30:24. > :30:28.need to get a grip, the Liberal Democrats we will leave to one side
:30:28. > :30:35.in terms of getting a grip. It could be a moment for Labour to
:30:35. > :30:40.actually capitalise, or it could be a moment for the Government to
:30:40. > :30:44.discover this narrative they lack. We are looking as the Lib Dems
:30:44. > :30:48.won't be an effective force in politics? It is a tough set this
:30:48. > :30:52.week as well. No Lib Dem going into a coalition with the Tories ever
:30:52. > :30:56.thought it would be easy, they expected a kicking, they are
:30:56. > :31:01.getting one, there may be a reward at the end of it, they may not.
:31:01. > :31:06.They have lost half of their political support, the portion
:31:06. > :31:11.voting Lib Dem is the same as visiting Elvis is alive, it is not
:31:11. > :31:15.a good time to be a supporter. Nick Clegg thought when they went into
:31:16. > :31:21.coalition in Scotland, it wasn't the same effect. You are seeing
:31:21. > :31:26.this blue Tory cimen to night in the Lib Dems, weakening them.
:31:26. > :31:31.I wonder if they will recover. Nick Clegg makes brave concessions, but
:31:31. > :31:35.they appear to be an opposition party. We say where's Ed Milliband
:31:35. > :31:37.now? 11 points ahead in the polls isn't that bad. Cameron was
:31:37. > :31:40.punching the air when he got this in opposition.
:31:40. > :31:44.Thank you very much. We probably all at some time had
:31:44. > :31:49.one of those e-mails inviting us to help ourselves to free millions of
:31:49. > :31:53.pounds, if only we will share our bank accounts with someone in
:31:53. > :31:58.Nigeria. The former Governor of An oil-rich Nigerian state will be
:31:58. > :32:01.jailed tomorrow, in what is called the world's biggest money
:32:01. > :32:09.laundering scam. James Ibori stole millions from state accounts, and
:32:09. > :32:11.hid the cash around the world. Britain was a focal point. The
:32:11. > :32:14.Treasury Department showed its anti-corruption credentials by
:32:14. > :32:18.funding the police investigation. But part of the department also
:32:18. > :32:26.invested millions in companies which are now themselves under
:32:27. > :32:34.investigation as money laundering fronts.
:32:34. > :32:40.Money makes the world go wrong. How can a human being do this to
:32:40. > :32:47.his fellow human being. It is what happens when billions
:32:47. > :32:57.are stolen from Africa's poor, by their own politicians.
:32:57. > :32:58.
:32:58. > :33:03.He gave me $50 million US in cash. Their crimes are hidden by contacts
:33:03. > :33:06.and institutions in the rich and developed nation, the west.
:33:06. > :33:16.He was obviously bringing large amounts of cash with him on the
:33:16. > :33:17.
:33:17. > :33:21.flights, he was flying in and out of London like nobody's business.
:33:21. > :33:24.It's January 2004, police are called to a hotel in Marble Arch,
:33:24. > :33:29.where a guest is outside his room on the fifth floor, giving away
:33:29. > :33:39.money. He was throwing �50 notes around
:33:39. > :33:40.
:33:40. > :33:46.like confetey. What? Giving the staff money. Just like that.
:33:46. > :33:51.came out of the hotel, and the staff lucky enough to pass in front
:33:51. > :33:55.of his hotel room was just given money, because he had so much.
:33:55. > :34:01.The guest with the hot cash was a senior politician, a state governor,
:34:01. > :34:06.from nigh gearia. His arrest, over time, would -- Nigeria. His arrest,
:34:06. > :34:10.over time, would lead police to worldwide networks set up to
:34:10. > :34:13.launder money. Politicians from Africa would steal millions, and
:34:13. > :34:23.people in supposedly respectable offices in London and elsewhere,
:34:23. > :34:26.
:34:26. > :34:29.would bury the trace, cover them up, so they looked legitimate. In
:34:29. > :34:39.Nigeria state governors rule the roost. They are viewed with awe or
:34:39. > :34:44.
:34:44. > :34:48.contempt. In Nasarawa, supporters of Aliyu
:34:48. > :34:52.Alhaji Akwai Doma, their former governor, are on the streets.
:34:52. > :34:57.Domino's himself is at the courthouse, he's charged with
:34:58. > :35:02.stealing $100 million from state coffers. In the past decade, since
:35:02. > :35:12.their colleagues' cash give Yayladagi at the hotel, governors
:35:12. > :35:12.
:35:12. > :35:16.of more than half Giffordsaway at the hotel, governors of more than
:35:16. > :35:25.half states have been brought to bear. Justice, like everything
:35:25. > :35:33.elsewhere, though, can be compromised. One Nigerian observer
:35:33. > :35:37.said to me, rather ruefully, this is how we celebrate corruption.
:35:37. > :35:41.The consequences of corruption are just around the corner, no
:35:41. > :35:47.pavements, no roads, and filth. This is the centre of the state
:35:47. > :35:52.capital, Lafia. Everything has gone bad. All the situations is, the
:35:52. > :35:59.infrastructure, there is none. is the business district? This is.
:35:59. > :36:03.This is the business district. Detectives from London, following
:36:03. > :36:08.up on the governor who gave away money, went to Nigeria to testify
:36:08. > :36:12.in a number of cases. It was a culture shock.
:36:12. > :36:17.Peter gave evidence, that was a little tricky, to say the least. We
:36:17. > :36:22.had an armed escort, we felt reasonably safe. There were 500
:36:22. > :36:26.security personnel looking after our welfare at the time. There was
:36:26. > :36:32.guns everywhere, I must admit. It was hair-raising to say the least.
:36:32. > :36:41.The London detectives, funded by Britain's development for
:36:42. > :36:46.development, had joined -- Government for development had
:36:46. > :36:50.joined forces. We were going after the governors, it was very
:36:50. > :36:56.difficult, they were extremely powerful. None was more powerful,
:36:56. > :37:01.than the biggest target of all, James Ibori. In the scale of
:37:01. > :37:05.corrupt governors, where would you place James Ibori? Very much on top.
:37:05. > :37:14.James Ibori robbed Nigerian state funds of untold fortunes, but he
:37:14. > :37:18.started out here, in Ruislip, west London, working as a cash year in a
:37:18. > :37:21.hardware store, he was sacked for allowing his wife take �200 worth
:37:21. > :37:27.of DIY material without paying. The following year he was arrested
:37:27. > :37:31.again, this time for using a stolen credit card. He now had two
:37:31. > :37:36.convictions for dishonesty, and facing county court judgments for
:37:36. > :37:42.debt. It was 191, and James Ibori fled back to -- 1991, and James
:37:42. > :37:46.Ibori fled back to Nigeria. He was broke and at rock bottom. But by
:37:46. > :37:51.the end of the decade, James Ibori had managed to become one of the
:37:51. > :37:55.richest and most important rulers of all Africa.
:37:55. > :38:00.The Niger Delta should be one of the most prosperous regions on
:38:00. > :38:07.earth. It produces billions worth of oil, while the people live in
:38:07. > :38:13.poverty, the riches are skimmed off for the elite. James Ibori fell in
:38:13. > :38:23.with Nigeria's military rulers, and became Governor of Delta state, his
:38:23. > :38:23.
:38:23. > :38:30.salary was $25,000, but as leader of the elite, he was a wealthy man.
:38:30. > :38:35.This man set up the anti-corruption squad, his prime target was James
:38:35. > :38:41.Ibori? He was buying companies all over, he had aeroplanes and
:38:41. > :38:49.properties in South Africa, in the UK, in the US and so on.
:38:49. > :38:56.What's more, he was offering huge bribes. He gave me $50 million US
:38:56. > :39:02.dollars in cash. $50 million? cash, a sack. How big is a sack
:39:02. > :39:09.with $50 million? A big one, a huge one. How could you resist the
:39:09. > :39:16.temptation? There is no difference between $100 and $10 million, as
:39:16. > :39:22.long as it is a person and the cash is not your's, especially for an
:39:22. > :39:26.individual fighting corruption. While in office, governors in
:39:26. > :39:32.Nigeria are immune from prosecution, but at the end of Ibori's term, he
:39:32. > :39:37.was charged with corruption. This is one of the interrogation rooms,
:39:37. > :39:42.where Nigeria's politically exposed people, governors accused of
:39:42. > :39:47.corruption, are brought. For the last ten years the man conductsing
:39:47. > :39:51.those irtergaigss and investigations is -- interrogations,
:39:51. > :39:57.and investigations is here. His biggest challenge is James Ibori?
:39:57. > :40:02.We left him until last, because we no knew he had a lot of influence -
:40:02. > :40:08.- we knew he had a lot of influence, but we also knew what was coming
:40:08. > :40:13.after his arrest. Ibori faced 170 charges, and all dismissed by a
:40:13. > :40:20.court in delta state. A devastating blow for Nigeria's anti-corruption
:40:20. > :40:26.squad. Meanwhile, anti-corruption work had
:40:26. > :40:33.amassed too many enemies, they tried to kill him. To my shock, I
:40:33. > :40:40.saw a pistol. The car was bullet- proof, it needed to be.
:40:40. > :40:44.On a country road he was ambushed. After a second attempt on his life,
:40:44. > :40:51.he went into exile, leaving behind a political class that was rotten,
:40:52. > :40:58.none more than James Ibori. He was a product of this completely
:40:59. > :41:07.corrupt system, and he came like this tower of the whole thing. He
:41:07. > :41:10.was so rich and powerful. With corruption thwarting justice
:41:10. > :41:15.inside Nigeria, 3,000 miles away, there was a breakthrough.
:41:15. > :41:19.Investigators have been following the activities of the bent African
:41:19. > :41:23.politicians, in particular of James Ibori.
:41:23. > :41:27.You could see huge amounts of money being transferred, coming in from
:41:27. > :41:35.Nigerian companies, huge amounts of cash being paid into the accounts.
:41:35. > :41:41.They live an extortionate lifestyle, there was $180,000 a month being
:41:41. > :41:45.spent on a credit guard which Mr Ibori was using, every month. What
:41:45. > :41:51.was he buying? He was spending money like water. Jee should have
:41:51. > :41:56.been in Poland on a trip for his country, for 16 days, he spent two
:41:56. > :42:00.days, and then flew off to Miami for the rest of the days. He was
:42:00. > :42:08.bringing large amounts of cash in with him, he was flying in and out
:42:08. > :42:14.of London like nobody's business, all the governors were.
:42:14. > :42:18.Ibori's �5 million house in Hamstead is now up for sale.
:42:18. > :42:22.There is this parliamentary party in Abbey Road, the country pile in
:42:22. > :42:25.Dorset, and various properties around the globe. He also has
:42:25. > :42:30.luxury cars on three continents, private schools for his children,
:42:30. > :42:36.and tens of millions in assets still to be traced. For the key to
:42:37. > :42:39.it all, laundering his stolen cash, he had a bent London solicitor.
:42:39. > :42:47.The lawyer's name was Bhadresh Gohil, he worked for a firm in may
:42:47. > :42:51.hair. -- Mayfair. The law firm, unaware
:42:51. > :42:56.of Gohil's crimes, had officers here, across from the Ritz.
:42:56. > :43:00.We know Gohil did work for a former President of Zambia, who was
:43:00. > :43:04.himself accused of gross corruption. More significantly we know that
:43:04. > :43:10.Gohil helped James Ibori launder his millions. For that crime, Gohil
:43:10. > :43:13.had particular expertise. Gohil was the money laundering
:43:13. > :43:17.officer for his country. If there was any suspicions around any
:43:17. > :43:22.accounts, from members of staff, they would have to go to him.
:43:22. > :43:28.was the compliance man? That's correct. When the police raided
:43:28. > :43:32.Gohil's office, they found plans mapping out money laundering scams,
:43:32. > :43:38.to hide Ibori's fund. They were on a computer hard drive, hidden
:43:38. > :43:43.behind a fireplace. One scam described a $5 million project for
:43:43. > :43:49.the purchase of Ibori's latest toy, a private jet. The money went to
:43:49. > :43:54.accounts in Switzerland, from accounts in Mauritius, Germany,
:43:54. > :44:03.Luxembourg, Nigeria, on four or five occasions. It goes back to
:44:03. > :44:06.Nigeria? It goes back and forth. had cap importing to Polynesia.
:44:06. > :44:11.Ibori's wife, his mistress and sister, have been jailed for money
:44:11. > :44:15.laundering, along with Gohil who got seven years. Ibori himself will
:44:15. > :44:20.be sentenced tomorrow. The story isn't over.
:44:20. > :44:24.Britain's development secretary, Andrew Mitchell, says his
:44:24. > :44:28.department spent �5 million funding the investigations into London and
:44:28. > :44:33.Nigeria. It showed their commitment to rooting out corruption. We found
:44:33. > :44:39.one branch of his department is itself allegedly embroiled in
:44:39. > :44:44.Ibori's cash laundering. Three years ago an anglo-Nigerian
:44:44. > :44:50.business man warned the private enterprise arm that it had put
:44:50. > :44:54.millions into a company that was laundering his money. We have
:44:54. > :44:58.learned that Nigeria's anti- corruption squad, part funded, has
:44:58. > :45:04.drawn a criminal investigation into the company's private equity
:45:04. > :45:07.investments. It places him on both sides of the investigation. That is
:45:07. > :45:12.an incredible paradox, that the same people who have funded the
:45:12. > :45:21.prougs cushion are the same people who have funded activities which
:45:21. > :45:27.are now being investigated. Amid the decay of corruption, the young
:45:28. > :45:32.suffer once. Some of Nigeria's politicians
:45:32. > :45:37.learned to read and write in this school.
:45:37. > :45:43.Back then it had a proper roof, windows and a floor. Now, there is
:45:43. > :45:52.none of that. Look at these schools, they are in
:45:52. > :45:57.bad shape. Look at the rot, most of the roads are not paved.
:45:57. > :46:01.Exactly how much James Ibori stole from his country, is a matter of
:46:01. > :46:09.speculation. But one American diplomat said it could be as much
:46:09. > :46:12.as up to $3 billion. What does it make you feel about Nigeria?
:46:12. > :46:20.and frustrated, it makes you angry that you want to go after these
:46:20. > :46:24.people. The Department for International Development told us
:46:24. > :46:27.their investment is now under investigation in Nigeria, but they
:46:27. > :46:30.were investigated here three years ago, and there is no indication
:46:30. > :46:40.that British funding has been misused.
:46:40. > :47:10.
:47:10. > :47:13.That's all from us for now we leave you tonight with this handy tip, if
:47:13. > :47:18.you think you might one day be appointed President of the World
:47:18. > :47:23.Bank, there are some things you might possibly not do, even if your
:47:23. > :47:27.students think it is funny. The President of Dartmouth college in
:47:27. > :47:31.New Hampshire, today got one of the biggest jobs in world finance,
:47:31. > :47:36.despite having this skeleton in his closet.
:47:36. > :47:38.# I had the time of my life # And I never felt like this way
:47:38. > :47:45.before # And I swear