16/04/2012 Newsnight


16/04/2012

The stories behind the day's headlines. Tony Blair and Jeremy Paxman debate tax dodging, the Tory chairman fights her corner and corruption in Nigeria.


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The unravelling of George Osborne's budget. Chapter 33, what once was

:00:13.:00:20.

said to be so clear is now shrouded in a fofg granny taxes, tax evaders,

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tax avoiders and pasties, that is not all:

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Labour this week will force a Commons vote on the plan to cap tax

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breaks on giving to charity, severely test the loyalty of

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Conservative MPs. The former Prime Minister, Tony

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Blair, tells the Government, where it is going wrong. And the current

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chairman of the Conservative Party, will doubtless be very glad of his

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advice. And then, this.

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As a massive money laundering trial ends, they are protesting in

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Nigeria in favour of corruption. gave me $50 million in cash, a big

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sack. How big is a sack with $50 billion? A big one.

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The Prime Minister said today that he wanted to see more giving to

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charities, yet one of his own ministers admits that the planned

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changes announced in the budget will have what he calls an impact

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on donations. "shambles" was the word used by the Charities Aid

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Foundation to describe the limits to charitable giving. Coming on top

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of the granny tax, the pasty tax, the income tax, and to say nothing

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of the Francis Maude memorial petrol panic. Some MPs are

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wondering what on earth has gone wrong. Allegra Stratton reports.

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Seen opened up like this, Downing Street looks like a happy doll's

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house, with interconnected posh carpets rooms, and a Warren of cosy

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dens, conducive to the construction of policy. This week the Georgian

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doors seem to have got jammed, a good news and bad news story

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merging, David Cameron has come under scrutiny. His impartial civil

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servants, meant to be helping him keep an eye on Government, stand

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accused of inyou are ining him to the voters. All problems are

:02:28.:02:31.

supposed to have stemmed from the budget, the budget from hell as it

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has been Chrisened. The problems have been lingering on from that.

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It was the infrastructure announcements of tolling on roads,

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most Conservatives hate those those plans. There is the minimum pricing

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on alcohol, that the policy makers pushed for but Conservatives do

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hate. Sources have told Newsnight that policy unit submission goes

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straight to the Prime Minister, with departmental special advisers

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having no chance to object to ideas, which is often where the political

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elephant traps lie. One adviser to the Prime Minister said to his face

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in a meeting, is the problem for Whitehall special adviser is they

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didn't know who to call when there is a problem in the department.

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People across Whitehall have been told by people from Number Ten that

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they are thinking in too ideolgical a way. Something people in

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Government and the coalition Government has told me that Downing

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Street has a lot of influence but not much power. Under the

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Government currently, most of those have left Downing Street, you have

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a department staffed and run by civil servants. The problem with

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that is if you don't have strong political people in the centre,

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they don't have the same political antenna for things that might be

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happening in the departments. For example, things like the problems

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that the Government had over the health bill. I think it is a

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question of whether they could potentially have a stronger, more

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political Downing Street operation. Someone who ran the policy unit

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under Gordon Brown thinks that David Cameron has a problem.

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Labour's was an era where policy was crafted on sofas, not desks.

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Since the 1970s when the policy unit was created under Harold

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Wilson, it has had the same structure half-a-dozen politically

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committed experienced policy experts. David Cameron was the

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first Prime Minister, since the 1970s, to get rid of that structure

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and replace it with civil servants, that is a big mistake, because you

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don't have people to scrutinise mistakes the departments might have

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made, and things like the NHS wouldn't have happened on my watch

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and others over the years. loyal Tory MP thinks a focus on the

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bricks and mortar of the Conservative operation is misplaced.

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The reality is we are mid-term with a Government that is doing the most

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radical things a Government has had to do, in the mid-of a time when

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the economy is not growing, and lots of -- middle of a time when

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the economy is not growing, and lots of people are having miserable

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lives. The surprise to me is it is two years before we have problems

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in the press, and being unpopular, we thought we would be the most

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unpopular Government ever within three months of coming into office.

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If a problem with the policy unit is overdone, there is a fault line

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within Downing Street, horse trading between the Treasury and

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Liberal Democrats, saw the Liberal Democrats give into the abolition

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of the 50p rate f it could be showed money was being clawed back

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in other areas of the budget. This wasn't the bricking up of the Prime

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Minister from inside, but it was the quad, bricked up away from

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everyone else. Each one was happy with the top line result of the

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budget, but they left the details to other people. To the horror of

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even their most loyal fans, the charities tax undermined The Big

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Idea society. Today the Conservatives fought back to

:05:59.:06:09.
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explain why they had driven for a The daylight illuminated less

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helpful figures for the Government. As the BBC business editor blogged

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today, the data showed over 73% of those earning over �250,000, were

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paying an average tax rate of over 40% in 2010/11, complicating the

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Chancellor's reason for scrapping the 50p rate. This was never to be

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introduced until next year, plenty of time to get it right and consult

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and listen. The key principle is, for more charities and

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philanthropic giving, yes, but allowing people to drive their tax

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rate down, when some of the richest people they are, no. Right now

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David Cameron's MPs are out campaigning in the local election,

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which they fear could be quite bad for them. Their chances are not

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helped, they feel, by new taxes, with irritatingly catchy titles.

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Before the next round of elections, there are very fine Georgian walls,

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that may yet have to be reduced to rubble.

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A man with some experience of the slings and arrows of Government, is

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the former Prime Minister, Tony Blair, who happens to have been

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trumpeting the virtues of philanthropy in Washington this

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evening. Tony Blair, is the Government right

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to think about capping the level of tax relief on charitable donations

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at �50,000, or a quarter of income? To be fair to them, this is a

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consultation, so they have the opportunity to think again. I think

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it is wise if they do. Because, if I were them I would just separate

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out these issues to do with tax avoidance and charitable giving.

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I'm here in Washington addressing the Global Philanthropy Forum, all

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around the world the philanthropic sector is doing more. Most people

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want to give to charity to do good rather than escape tax. The

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important thing is to separate those things out, if there is tax

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avoidance deal with that in a different way. We should be doing

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everything we can at the moment, to encourage the philanthropic sector,

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the third sector was a large part of our Government agenda, it is

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still very important n in times of economic difficulty even more so.

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Would you prefer a person paid the potential level of tax envisaged

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under it, or gave the money to Tony Blair Faith Foundation? If people

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want to give their money there, I'm delighted. You don't run

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foundations unless you are trying to raise money all the time. Anyone

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giving money to a charity, if they are giving it to a genuine

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charitable cause, they are losing money. If they retained that money,

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even if they paid tax on it, they would still retain some of that

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money. If they give it to charity they lose that money. They give it

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to a charitable cause. If they are not giving it to a genuine charity,

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or the charity's not doing work with a proper public benefit, there

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is an armoury, a battery of rules that you can bring in to bear, to

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make sure that doesn't happen. That's why I think, mixing these

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two things up is unfortunate. I'm sure the Government don't

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intentionally want to harm the philanthropic sector, that would be

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daft, I'm sure they don't want to do it. What they should do now,

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they have the time. I have been through many situations like this,

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sometimes things slip through, they are not right. You have the chance

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with a consultation to correct them. The important thing is to correct

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them, and not end up in a battle with the philanthropic sector,

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which they will find difficult to win.

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How can it be right that a multi- millionaire pays a lower rate of

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income tax than a teacher or lorry driver? They shouldn't. People pay

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the top rate of tax at 50p, they should pay that. If someone gives

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to a charitable cause, for many, many years, if they give to the

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charity, they are losing the money, they are giving the money to the

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charitable cause. If you want to encourage the philanthropic sec to

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Governments have necessary roles to makes there are things that

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Government does very well there are things I that discovered in

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Government, that the third sector, the voluntary sector, do better

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than the Government. It is the job of successive Governments to

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encourage this charitable sector. If you want to encourage it, you

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say to people, give your money to charity, that is a good thing, not

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a bad thing. That implies a no upper limit of any kind, just

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encourage them, eh? Why not encourage it. The philanthropic

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sector today in the UK, is worth billions, it isth does fantastic

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work, at local level, international and national level. It is important

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to encourage it. This conference I was giving the keynote speech at

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today in Washington there were philanthropists from around the

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world, including the UK, they do great work F their charities aren't

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doing good work, or we introduced, I think, in 2006, actually as the

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Government introduced an amendment to the charities law, saying

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charities have to display a public benefit. If not take action against

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the charities. Don't end up in a situation where you are implying

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that people are donate to go charities for tax avoidance, I

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really don't think that is the case. Do you think the climate is

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changing in this country, the climate of opinion towards wealth

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creation, do you think it is souring? When times are really

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tough, and times are tough in the UK, here in America, round the

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world at the moment. Then I think there is a risk that people mix two

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quite separate things up together. One is how do we make sure that

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people pay their fair share of tax, and the other is, how do we get the

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economy growing? What is important to realise is that wealth creation

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and entrepeneurship will always be part of a growing economy, we

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should encourage. That obviously people should pay their fair share

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in tax. In any of these situations there is balance to be struck, and

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I think it is important to get that balance right. Now, by the way, all

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Governments go through these periods, that's for sure, but I

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think what actually is important at the moment is to distinguish

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between having a tough time as a Government, because you're taking

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an unpopular decision that you have genuinely worked out and believed

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to be right, and having a tough time because the decision is not

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properly thought through. contrast is with your Government

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who recommended Fred good win for a Knighthood? -- Fred Goodwin for a

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knighthood? If you want to go back over those debates you can, I don't

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think they really impact on now. The question now is how do you make

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the tax system fair, how do you, at the same time, create a tax system

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that is rewarding entrepreneurship and wealth creation. Do you think

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they were wrong to get rid of the 50p tax rate and reduce it to 45p?

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I will deal with one issue at a time. The reason I'm dealing with

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this now is because I'm giving this speech on philanthropy and its

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importance. I think with this, I'm not making some great heavy

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political point, I'm simply saying they have the time to consult,

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consult. If I were them I would literally just disentangle these

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two issues, they are separate issues. I bet you're glad you are

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not in Government now, aren't you? Government, as I always used to say,

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is a great privilege, but it can be sometimes very tough. That's to be

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expected. But, you know, it, as I used to tell the Labour Party, it

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is better to be in Government than opposition. I read your speech

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earlier, you seemed to suggest at one point that philanthropy is

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potentially more inspiring and more effective than many of the

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mechanisms of Government, do you really believe that? I believe

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there is certain things that only Government can do. So only a

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Government can put through education, health reforms, decide

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levels of public spending, I described in my speech how Northern

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Ireland's not a process that can be done outside Government. But I also

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do think that Government itself today has got to reform, Government

:14:30.:14:35.

has to become more strategic, more empowering, less top-heavy, the

:14:35.:14:38.

philanthropic sector, and the private sector, by the way, can be

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great partners in this. I do think we are entering an age in which, if

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you want to get things done, that is the key challenge of Government

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today, it is efficacy, how do you get the job done? Then the

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philanthropic sector can be more creative, imaginative and

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innovative than Government. It is not substituting for Government,

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but in its proper place it can be a great inspiration and compliment to

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it. One final point on the current state of the Government, given the

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state it is in, why isn't Ed Milliband doing better? He is, he's

:15:11.:15:15.

putting his case forward, he is articulating where he thinks the

:15:15.:15:20.

country should go. Look, Labour was only put out of office a couple of

:15:20.:15:23.

years ago. It is not surprising in this first period of opposition it

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is tough, but there is a long way to go. I think one of the things

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that is interesting, actually, about this present situation, by

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the way, since I know how difficult it is, I'm not giving advice to

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anybody. You wouldn't have lost the Bradford West by-election, would

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you? You can't say that, actually, I don't know. What I do know is, I

:15:43.:15:47.

think if I had put my finger on anything that I think is a problem

:15:47.:15:51.

for the Government, it is the nature of this coalition, I think,

:15:51.:15:56.

sometimes. Which is more a marriage of convience than conviction. Is

:15:56.:16:00.

that if they are not careful, they end up having to satisfy one side

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and then the other side. In that policy trade, I think you sometimes

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get incoherence, that's as mild a criticism as you can make. But I

:16:10.:16:15.

think it is quite an important one. If I were them looking forward, I

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would try and make sure that before these policies are announced a

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little more indepth policy work is being done.

:16:22.:16:26.

Tony Blair, thank you very much for joining us.

:16:26.:16:30.

The person being blamed by some Conservatives for the mess that the

:16:30.:16:36.

party's in is the home improvements fanatic, Sayeeda Warsi, or to give

:16:36.:16:41.

her the right title, Baroness Warsi, the Party Chairman. Do you think

:16:41.:16:46.

the budget was a success? The way in which parts of the budget have

:16:46.:16:49.

been communicated, subsequent to the budget being announced, could

:16:49.:16:52.

have been done better. Because it is a coalition, so much of what was

:16:52.:16:57.

in the budget, which traditionally wouldn't be in the public domain,

:16:57.:17:02.

was in public domain. Those bits that weren't, were the bits seized

:17:02.:17:08.

and discussed in detail afterwards. It is all the fault of the Lib

:17:08.:17:13.

Dems? No. A Conservative Government would have been watertight, you are

:17:13.:17:16.

suggesting? The coalition means Governments can't be as watertight

:17:16.:17:20.

than if it was a single party. it is the Lib Dems? It is the

:17:20.:17:23.

reality of the coalition. We are two parties, we talk to our

:17:23.:17:25.

individual parties when these decisions are being made, and some

:17:25.:17:29.

decisions are made public. Conservative is this Government?

:17:29.:17:36.

Well it is interesting, because I spend a lot of my time campaigning

:17:36.:17:39.

and activists ask me that question. One of the things I take around

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with me, and is with me today, is the Conservative manifesto, which

:17:43.:17:46.

gives me a God indication of what we are delivering and how much is

:17:46.:17:50.

in the manifesto. That is a notebook? It is the

:17:50.:18:00.

manifesto from 2010. Wouldn't the coalition agreement be

:18:00.:18:05.

more relevent? It is trying to put together the bulk of the

:18:05.:18:09.

Conservative manifesto and the bits of the Lib Dem coalition. For me it

:18:09.:18:14.

is showing what we campaigned for in 2010 and what we are delivering.

:18:14.:18:20.

Why are you garnering, almost a month after the event, such

:18:20.:18:23.

unhelpful headlines in sympathetic newspapers? There is a lot of

:18:23.:18:26.

miscommunication, some of it in terms of how we communicated it in

:18:26.:18:30.

the Government, some of it in the way it was reported. Look at them,

:18:30.:18:35.

the Telegraph, Mail, the Guardian isn't your friends, and the Mirror,

:18:35.:18:40.

I don't know what that is doing up there. The Mail, the Telegraph, the

:18:40.:18:45.

Sun, your friends, that is not helpful, is it? If you unpick each

:18:45.:18:51.

and every one of those arguments. Let me take a typical one, the

:18:51.:18:58.

pasty tax. A very serious matter? Labour made it into an issue of

:18:58.:19:02.

class, so if anyone, a northerner, someone like you and I eating

:19:02.:19:05.

pasties all day and this was an attack on our lifestyle. They

:19:05.:19:09.

failed to understand, that the chip buttie, or chicken and chips, or

:19:09.:19:14.

any other snacks we may be eating as working-class people, have VAT

:19:14.:19:17.

on them. It was right that the Government in the budget take an

:19:17.:19:21.

opportunity to close the loopholes. There is something deeper than that,

:19:21.:19:25.

there is, what seems to be, a profound incoherence at the heart

:19:25.:19:29.

of policies announced in this budget. For example, cutting the

:19:29.:19:36.

top rate of income tax from 50p to 45p, that yields about how much?

:19:36.:19:42.

don't know the exact figure, but it yields more at 45p than 50p.

:19:42.:19:47.

lose about �50 million, according to projections, and possibly �100

:19:47.:19:54.

million the next year. Capping the rate of donations to charities,

:19:54.:19:56.

yields what? Is that a another thing you don't know? The figures

:19:56.:20:02.

are still to be made clear on that. That is between �50-�100 million?

:20:02.:20:05.

At the moment it is out for consultation. Let me unpick the

:20:05.:20:10.

charities' tax as it is called. are taking with one hand and giving

:20:10.:20:13.

with the other, it doesn't make sense, it is the same people?

:20:13.:20:17.

you look at the charities' tax as it is called. Let's break what it

:20:17.:20:20.

is about. What Tony Blair has just said is it is absolutely right,

:20:20.:20:25.

people are generous, people give to charities and philanthropic causes,

:20:25.:20:28.

and that has to be encouraged. You can't have a situation, say if you

:20:28.:20:33.

are a middle or low income earner, you make your contribution, it is

:20:33.:20:37.

called tax. It goes into the general public purse. If you are

:20:37.:20:44.

very rich and you can actually give away your income in a way where you

:20:44.:20:50.

abort into the 10p brand or else, you are saying, because I am richer,

:20:50.:20:53.

I can choose which causes I want to give to, rather than the general

:20:53.:20:56.

public purse. What the Government is saying is there has to be a

:20:56.:20:59.

balance. You have made this case, your party has made this case

:20:59.:21:04.

repeatedly, all I'm arguing or suggesting to you is it is slightly

:21:04.:21:10.

incoherent, that is all? When you are in coalition. This is the Lib

:21:10.:21:13.

Dems' fault too? When you are in coalition it is not as easy to have

:21:13.:21:17.

a very clear view and matterive, which is based upon the principles

:21:17.:21:21.

of one party. The Conservative Party have some very clear

:21:21.:21:27.

principles, the majority of the coalition Government, and what we

:21:27.:21:31.

are delivering in Government is part of those principles, there are

:21:31.:21:33.

other principles, Liberal Democrat principle, that butt up against

:21:33.:21:37.

that, out of that sometimes comes an incoherence. It is not always

:21:37.:21:41.

easy to have a clear, Conservative narrative. However much I would

:21:41.:21:46.

like it and argue for it, for 2015. You are conceding the Government is

:21:46.:21:50.

incoherent, what about the question about the further influence of the

:21:50.:21:55.

Lib Dem Government? What I'm a saying is it is not always easy to

:21:55.:21:59.

put a single coherent argument on single coherent principles, because

:21:59.:22:02.

we have two parties in the coalition. We have two sets of

:22:02.:22:06.

values, and two sets of narratives, which come together to put forward

:22:06.:22:10.

a Government programme. There is one single narrative, that is this,

:22:10.:22:14.

as Party Chairman I feel it more than anything else. That is, that

:22:14.:22:16.

we are acting in the national interest, not in individual

:22:16.:22:20.

political interests. Does it help to have people like

:22:20.:22:24.

Vince Cable, who have apparently agreed the budget, immediately

:22:24.:22:29.

coming out and denoinsing some of its measures? That is a matter --

:22:29.:22:33.

we nouncing some of its measures? That is a matter for Vince, I

:22:33.:22:37.

believe if you standby a decision once it is made. Doesn't it make

:22:37.:22:47.
:22:47.:22:47.

you hopping mad? I recently described Tim Farren, not in

:22:47.:22:50.

cabinet part of the coalition colleagues we work closely with.

:22:50.:22:53.

Maybe if you were outside Government you would be a more

:22:53.:22:58.

effective Party Chairman? Unlike Tim Farren who sits outside

:22:58.:23:02.

Government. He can say what he wants? I described him as a bad

:23:02.:23:07.

episode of Come Dine With Me, I don't think it is right people sit

:23:07.:23:11.

down and eat your food and slag you off in the cab home. When you are

:23:12.:23:18.

in coalition and partnership, it is about being in it together, and we

:23:18.:23:23.

standby the decisions we make together. But those parties in

:23:23.:23:28.

coalitions throughout Europe and the world, they try to carve a

:23:28.:23:35.

singling out for themselves. I want to see from my party, I'm glad my

:23:35.:23:38.

Conservative colleagues uphold to, that is a more collective approach

:23:38.:23:42.

to responsibility, and coming to agreement, let's stick to them.

:23:42.:23:46.

Just before he left office, Tony Blair bitterly remarked that the

:23:46.:23:51.

media in this country had become like a feral beast. Nothing such

:23:51.:23:57.

creatures like more than a bit of political chaos. Three who left the

:23:57.:24:03.

confines of polite society are with us now.

:24:03.:24:10.

James Purnell, Miranda Green, and Fraser Nelson, the editor of the

:24:10.:24:16.

Spectator. Last time you two were here was on the budget night?

:24:16.:24:21.

I was watching. Very loyal. Did you imagine that a month on we would

:24:21.:24:25.

still be talking about the budget? We did say it was a big risk, the

:24:25.:24:29.

cut to the 45p, there was quite a lot of discussion about the grany

:24:29.:24:39.
:24:39.:24:45.

tax. I think we were fairly cautious about that. It is not just

:24:45.:24:48.

Lib Dem and Conservative coalition, you have The Big Idea society and

:24:48.:24:52.

economic liberals, in the Lib Dems there is the Social Democratic side,

:24:52.:24:56.

like Shirley Williams, then the orange-bookers, Nick Clegg, and

:24:56.:25:01.

David Laws, you also have the Tory right, which can veto anything at

:25:01.:25:05.

any time. The danger is it is hard to get big new things off the

:25:05.:25:09.

ground, because there is always someone who can return it. They

:25:09.:25:12.

could agree the coalition agreement, but it is very, very hard to come

:25:12.:25:16.

up with new ideas, someone always around the table says they won't

:25:16.:25:23.

stand for it. There is something in that, we hear about the "quad", the

:25:23.:25:28.

elite group of four who agree everything behind closed doors,

:25:28.:25:32.

Osborne, Nick Clegg and Danny and Vince. That is not getting both

:25:32.:25:35.

parties to agree. David Cameron has a particular problem with his own

:25:35.:25:39.

backbenchers who think he should have won the last election outright.

:25:39.:25:41.

They disagree with them fundamentally. They think if the

:25:41.:25:44.

party shifts to the right they will win another election outright. He

:25:44.:25:50.

won't do that, because he knows it is wrong. It is frustrating that

:25:50.:25:55.

what the Government is getting right, radical school and welfare

:25:55.:25:59.

reform, is being eclipsed by a long list of things, the pasty tax and

:25:59.:26:03.

granny tax. It is not so much to do with bad spin, they don't really

:26:03.:26:07.

engage their brain a lot before making ale policy. This group of

:26:07.:26:11.

four, the quad, they passed what is now known as the charity tax,

:26:11.:26:15.

without realising the extent of the effect it would have. If that was

:26:15.:26:19.

thought through properly, there is a proper political unit in nen

:26:19.:26:23.

Number Ten, as in stair's day, they would have thought about this

:26:23.:26:27.

before, and you wouldn't have got to the stage where you are making

:26:27.:26:31.

the announcement first and working it out only seeing it in the next

:26:31.:26:34.

day's paper. It is easy for media smart arses to make that sort of

:26:34.:26:38.

comment after the event. But that is what happens in Government,

:26:38.:26:43.

isn't it? You have to keep battering on, always, two or three

:26:43.:26:48.

years into a Government, this sort of thing happens. You hit choppy

:26:48.:26:54.

water? I was in the policy unit before, it was a tightly-knit band

:26:54.:26:58.

of political advisers, through opposition together, they could

:26:58.:27:02.

read each other's minds, we were quick at spotting political

:27:02.:27:06.

problems. Having said that we were criticised for having too many

:27:06.:27:09.

special advisers and it was spin gone mad. In a way you can never

:27:10.:27:13.

completely win. There is also a question about whether the

:27:13.:27:16.

Conservatives have drawn slightly the wrong lesson from Tony Blair.

:27:16.:27:20.

We were told they all went out and read his book. He said hi a big

:27:20.:27:24.

majority and I wasted it, and didn't do enough with it. They

:27:24.:27:28.

haven't got a big majority, maybe they should have done what he did

:27:28.:27:32.

in 1997, which is cautious with his political capital, do big things,

:27:32.:27:35.

like education and constitutional reform. Make sure you win the next

:27:35.:27:40.

election, in a way they read the book but applied completely the

:27:40.:27:43.

wrong lesson. You are shouting "slow down"? Yes, there is a lot of

:27:44.:27:47.

criticism that the Government is trying to do too much at the same

:27:47.:27:52.

time, and rushing ahead, because they have the blairb book as a

:27:52.:27:56.

background manifesto. There was too much of a reaction against Tony

:27:56.:28:00.

Blair, David Cameron prides himself in how few special advisers he has

:28:01.:28:04.

got. My advice is he hasn't enough. We are not seeing ale could igs l

:28:04.:28:14.
:28:14.:28:15.

but a coup at the at that time with -- coalition, but a coup de etat.

:28:15.:28:19.

You need a grey beard saying no goodwill come of this, or something.

:28:19.:28:22.

That is what the Civil Service are saying, they are saying don't do

:28:22.:28:25.

it? They are saying no, Prime Minister, you don't want any of

:28:25.:28:30.

these nasty special advisers. about George Osborne, supposed to

:28:30.:28:36.

be the master tactition, election planner and winner in all, where is

:28:36.:28:43.

he in all of this? Has been on holiday. But it is certainly true

:28:43.:28:47.

to say this budget was not a great advert for Osborne the master

:28:47.:28:51.

tactition. But then again, we are mid-way through, you show me any

:28:51.:28:55.

Government that is not taking a kicking, two or three years into

:28:55.:28:59.

the term. It is always happening. It just seems a lot more

:28:59.:29:07.

embarrassing, because there are things that are so avoidable. The

:29:07.:29:10.

10p pension increase that Labour had to endure, that was one mistake.

:29:10.:29:13.

It seems we are getting this almost every week. What is interesting

:29:13.:29:17.

about that period, the 10p tax, we were losing tax discs, that was a

:29:18.:29:21.

big story, is the smaller things become a big story when there was

:29:21.:29:25.

not a big driving thing happening. It doesn't have to be a detailed

:29:25.:29:29.

strategy, but a guiding policy. The Government has lots of different

:29:29.:29:33.

ones at the same time. Why isn't Ed Milliband doing better, Tony Blair

:29:34.:29:41.

was pretty loyal and supportive, pretty discreet? He's 11 ahead in

:29:41.:29:45.

the polls. Tonighter on talking about the problems in the coalition

:29:45.:29:48.

and two months ago it would have been the problems with the Labour

:29:48.:29:52.

Party. What has happened with the budget is there is a shift in the

:29:52.:29:56.

mind set. An inevitable ability about a Cameron majority in the

:29:56.:30:01.

next election is not there any more. The polls shifting is really

:30:01.:30:04.

interesting, they have shifted since the budget, which is

:30:04.:30:11.

significant. Except for the Lib Dem ratings? Glossing swiftly over that.

:30:11.:30:16.

We are at a mid-term cusp. If we are heading to a hung parliament,

:30:16.:30:20.

who will be the larger party. This is a moment when the main parties

:30:20.:30:24.

need to get a grip, the Liberal Democrats we will leave to one side

:30:24.:30:28.

in terms of getting a grip. It could be a moment for Labour to

:30:28.:30:35.

actually capitalise, or it could be a moment for the Government to

:30:35.:30:40.

discover this narrative they lack. We are looking as the Lib Dems

:30:40.:30:44.

won't be an effective force in politics? It is a tough set this

:30:44.:30:48.

week as well. No Lib Dem going into a coalition with the Tories ever

:30:48.:30:52.

thought it would be easy, they expected a kicking, they are

:30:52.:30:56.

getting one, there may be a reward at the end of it, they may not.

:30:56.:31:01.

They have lost half of their political support, the portion

:31:01.:31:06.

voting Lib Dem is the same as visiting Elvis is alive, it is not

:31:06.:31:11.

a good time to be a supporter. Nick Clegg thought when they went into

:31:11.:31:15.

coalition in Scotland, it wasn't the same effect. You are seeing

:31:16.:31:21.

this blue Tory cimen to night in the Lib Dems, weakening them.

:31:21.:31:26.

I wonder if they will recover. Nick Clegg makes brave concessions, but

:31:26.:31:31.

they appear to be an opposition party. We say where's Ed Milliband

:31:31.:31:35.

now? 11 points ahead in the polls isn't that bad. Cameron was

:31:35.:31:37.

punching the air when he got this in opposition.

:31:37.:31:40.

Thank you very much. We probably all at some time had

:31:40.:31:44.

one of those e-mails inviting us to help ourselves to free millions of

:31:44.:31:49.

pounds, if only we will share our bank accounts with someone in

:31:49.:31:53.

Nigeria. The former Governor of An oil-rich Nigerian state will be

:31:53.:31:58.

jailed tomorrow, in what is called the world's biggest money

:31:58.:32:01.

laundering scam. James Ibori stole millions from state accounts, and

:32:01.:32:09.

hid the cash around the world. Britain was a focal point. The

:32:09.:32:11.

Treasury Department showed its anti-corruption credentials by

:32:11.:32:14.

funding the police investigation. But part of the department also

:32:14.:32:18.

invested millions in companies which are now themselves under

:32:18.:32:26.

investigation as money laundering fronts.

:32:27.:32:34.

Money makes the world go wrong. How can a human being do this to

:32:34.:32:40.

his fellow human being. It is what happens when billions

:32:40.:32:47.

are stolen from Africa's poor, by their own politicians.

:32:47.:32:57.
:32:57.:32:58.

He gave me $50 million US in cash. Their crimes are hidden by contacts

:32:58.:33:03.

and institutions in the rich and developed nation, the west.

:33:03.:33:06.

He was obviously bringing large amounts of cash with him on the

:33:06.:33:16.
:33:16.:33:17.

flights, he was flying in and out of London like nobody's business.

:33:17.:33:21.

It's January 2004, police are called to a hotel in Marble Arch,

:33:21.:33:24.

where a guest is outside his room on the fifth floor, giving away

:33:24.:33:29.

money. He was throwing �50 notes around

:33:29.:33:39.
:33:39.:33:40.

like confetey. What? Giving the staff money. Just like that.

:33:40.:33:46.

came out of the hotel, and the staff lucky enough to pass in front

:33:46.:33:51.

of his hotel room was just given money, because he had so much.

:33:51.:33:55.

The guest with the hot cash was a senior politician, a state governor,

:33:55.:34:01.

from nigh gearia. His arrest, over time, would -- Nigeria. His arrest,

:34:01.:34:06.

over time, would lead police to worldwide networks set up to

:34:06.:34:10.

launder money. Politicians from Africa would steal millions, and

:34:10.:34:13.

people in supposedly respectable offices in London and elsewhere,

:34:13.:34:23.
:34:23.:34:26.

would bury the trace, cover them up, so they looked legitimate. In

:34:26.:34:29.

Nigeria state governors rule the roost. They are viewed with awe or

:34:29.:34:39.
:34:39.:34:44.

contempt. In Nasarawa, supporters of Aliyu

:34:44.:34:48.

Alhaji Akwai Doma, their former governor, are on the streets.

:34:48.:34:52.

Domino's himself is at the courthouse, he's charged with

:34:52.:34:57.

stealing $100 million from state coffers. In the past decade, since

:34:58.:35:02.

their colleagues' cash give Yayladagi at the hotel, governors

:35:02.:35:12.
:35:12.:35:12.

of more than half Giffordsaway at the hotel, governors of more than

:35:12.:35:16.

half states have been brought to bear. Justice, like everything

:35:16.:35:25.

elsewhere, though, can be compromised. One Nigerian observer

:35:25.:35:33.

said to me, rather ruefully, this is how we celebrate corruption.

:35:33.:35:37.

The consequences of corruption are just around the corner, no

:35:37.:35:41.

pavements, no roads, and filth. This is the centre of the state

:35:41.:35:47.

capital, Lafia. Everything has gone bad. All the situations is, the

:35:47.:35:52.

infrastructure, there is none. is the business district? This is.

:35:52.:35:59.

This is the business district. Detectives from London, following

:35:59.:36:03.

up on the governor who gave away money, went to Nigeria to testify

:36:03.:36:08.

in a number of cases. It was a culture shock.

:36:08.:36:12.

Peter gave evidence, that was a little tricky, to say the least. We

:36:12.:36:17.

had an armed escort, we felt reasonably safe. There were 500

:36:17.:36:22.

security personnel looking after our welfare at the time. There was

:36:22.:36:26.

guns everywhere, I must admit. It was hair-raising to say the least.

:36:26.:36:32.

The London detectives, funded by Britain's development for

:36:32.:36:41.

development, had joined -- Government for development had

:36:42.:36:46.

joined forces. We were going after the governors, it was very

:36:46.:36:50.

difficult, they were extremely powerful. None was more powerful,

:36:50.:36:56.

than the biggest target of all, James Ibori. In the scale of

:36:56.:37:01.

corrupt governors, where would you place James Ibori? Very much on top.

:37:01.:37:05.

James Ibori robbed Nigerian state funds of untold fortunes, but he

:37:05.:37:14.

started out here, in Ruislip, west London, working as a cash year in a

:37:14.:37:18.

hardware store, he was sacked for allowing his wife take �200 worth

:37:18.:37:21.

of DIY material without paying. The following year he was arrested

:37:21.:37:27.

again, this time for using a stolen credit card. He now had two

:37:27.:37:31.

convictions for dishonesty, and facing county court judgments for

:37:31.:37:36.

debt. It was 191, and James Ibori fled back to -- 1991, and James

:37:36.:37:42.

Ibori fled back to Nigeria. He was broke and at rock bottom. But by

:37:42.:37:46.

the end of the decade, James Ibori had managed to become one of the

:37:46.:37:51.

richest and most important rulers of all Africa.

:37:51.:37:55.

The Niger Delta should be one of the most prosperous regions on

:37:55.:38:00.

earth. It produces billions worth of oil, while the people live in

:38:00.:38:07.

poverty, the riches are skimmed off for the elite. James Ibori fell in

:38:07.:38:13.

with Nigeria's military rulers, and became Governor of Delta state, his

:38:13.:38:23.
:38:23.:38:23.

salary was $25,000, but as leader of the elite, he was a wealthy man.

:38:23.:38:30.

This man set up the anti-corruption squad, his prime target was James

:38:30.:38:35.

Ibori? He was buying companies all over, he had aeroplanes and

:38:35.:38:41.

properties in South Africa, in the UK, in the US and so on.

:38:41.:38:49.

What's more, he was offering huge bribes. He gave me $50 million US

:38:49.:38:56.

dollars in cash. $50 million? cash, a sack. How big is a sack

:38:56.:39:02.

with $50 million? A big one, a huge one. How could you resist the

:39:02.:39:09.

temptation? There is no difference between $100 and $10 million, as

:39:09.:39:16.

long as it is a person and the cash is not your's, especially for an

:39:16.:39:22.

individual fighting corruption. While in office, governors in

:39:22.:39:26.

Nigeria are immune from prosecution, but at the end of Ibori's term, he

:39:26.:39:32.

was charged with corruption. This is one of the interrogation rooms,

:39:32.:39:37.

where Nigeria's politically exposed people, governors accused of

:39:37.:39:42.

corruption, are brought. For the last ten years the man conductsing

:39:42.:39:47.

those irtergaigss and investigations is -- interrogations,

:39:47.:39:51.

and investigations is here. His biggest challenge is James Ibori?

:39:51.:39:57.

We left him until last, because we no knew he had a lot of influence -

:39:57.:40:02.

- we knew he had a lot of influence, but we also knew what was coming

:40:02.:40:08.

after his arrest. Ibori faced 170 charges, and all dismissed by a

:40:08.:40:13.

court in delta state. A devastating blow for Nigeria's anti-corruption

:40:13.:40:20.

squad. Meanwhile, anti-corruption work had

:40:20.:40:26.

amassed too many enemies, they tried to kill him. To my shock, I

:40:26.:40:33.

saw a pistol. The car was bullet- proof, it needed to be.

:40:33.:40:40.

On a country road he was ambushed. After a second attempt on his life,

:40:40.:40:44.

he went into exile, leaving behind a political class that was rotten,

:40:44.:40:51.

none more than James Ibori. He was a product of this completely

:40:52.:40:58.

corrupt system, and he came like this tower of the whole thing. He

:40:59.:41:07.

was so rich and powerful. With corruption thwarting justice

:41:07.:41:10.

inside Nigeria, 3,000 miles away, there was a breakthrough.

:41:10.:41:15.

Investigators have been following the activities of the bent African

:41:15.:41:19.

politicians, in particular of James Ibori.

:41:19.:41:23.

You could see huge amounts of money being transferred, coming in from

:41:23.:41:27.

Nigerian companies, huge amounts of cash being paid into the accounts.

:41:27.:41:35.

They live an extortionate lifestyle, there was $180,000 a month being

:41:35.:41:41.

spent on a credit guard which Mr Ibori was using, every month. What

:41:41.:41:45.

was he buying? He was spending money like water. Jee should have

:41:45.:41:51.

been in Poland on a trip for his country, for 16 days, he spent two

:41:51.:41:56.

days, and then flew off to Miami for the rest of the days. He was

:41:56.:42:00.

bringing large amounts of cash in with him, he was flying in and out

:42:00.:42:08.

of London like nobody's business, all the governors were.

:42:08.:42:14.

Ibori's �5 million house in Hamstead is now up for sale.

:42:14.:42:18.

There is this parliamentary party in Abbey Road, the country pile in

:42:18.:42:22.

Dorset, and various properties around the globe. He also has

:42:22.:42:25.

luxury cars on three continents, private schools for his children,

:42:25.:42:30.

and tens of millions in assets still to be traced. For the key to

:42:30.:42:36.

it all, laundering his stolen cash, he had a bent London solicitor.

:42:37.:42:39.

The lawyer's name was Bhadresh Gohil, he worked for a firm in may

:42:39.:42:47.

hair. -- Mayfair. The law firm, unaware

:42:47.:42:51.

of Gohil's crimes, had officers here, across from the Ritz.

:42:51.:42:56.

We know Gohil did work for a former President of Zambia, who was

:42:56.:43:00.

himself accused of gross corruption. More significantly we know that

:43:00.:43:04.

Gohil helped James Ibori launder his millions. For that crime, Gohil

:43:04.:43:10.

had particular expertise. Gohil was the money laundering

:43:10.:43:13.

officer for his country. If there was any suspicions around any

:43:13.:43:17.

accounts, from members of staff, they would have to go to him.

:43:17.:43:22.

was the compliance man? That's correct. When the police raided

:43:22.:43:28.

Gohil's office, they found plans mapping out money laundering scams,

:43:28.:43:32.

to hide Ibori's fund. They were on a computer hard drive, hidden

:43:32.:43:38.

behind a fireplace. One scam described a $5 million project for

:43:38.:43:43.

the purchase of Ibori's latest toy, a private jet. The money went to

:43:43.:43:49.

accounts in Switzerland, from accounts in Mauritius, Germany,

:43:49.:43:54.

Luxembourg, Nigeria, on four or five occasions. It goes back to

:43:54.:44:03.

Nigeria? It goes back and forth. had cap importing to Polynesia.

:44:03.:44:06.

Ibori's wife, his mistress and sister, have been jailed for money

:44:06.:44:11.

laundering, along with Gohil who got seven years. Ibori himself will

:44:11.:44:15.

be sentenced tomorrow. The story isn't over.

:44:15.:44:20.

Britain's development secretary, Andrew Mitchell, says his

:44:20.:44:24.

department spent �5 million funding the investigations into London and

:44:24.:44:28.

Nigeria. It showed their commitment to rooting out corruption. We found

:44:28.:44:33.

one branch of his department is itself allegedly embroiled in

:44:33.:44:39.

Ibori's cash laundering. Three years ago an anglo-Nigerian

:44:39.:44:44.

business man warned the private enterprise arm that it had put

:44:44.:44:50.

millions into a company that was laundering his money. We have

:44:50.:44:54.

learned that Nigeria's anti- corruption squad, part funded, has

:44:54.:44:58.

drawn a criminal investigation into the company's private equity

:44:58.:45:04.

investments. It places him on both sides of the investigation. That is

:45:04.:45:07.

an incredible paradox, that the same people who have funded the

:45:07.:45:12.

prougs cushion are the same people who have funded activities which

:45:12.:45:21.

are now being investigated. Amid the decay of corruption, the young

:45:21.:45:27.

suffer once. Some of Nigeria's politicians

:45:28.:45:32.

learned to read and write in this school.

:45:32.:45:37.

Back then it had a proper roof, windows and a floor. Now, there is

:45:37.:45:43.

none of that. Look at these schools, they are in

:45:43.:45:52.

bad shape. Look at the rot, most of the roads are not paved.

:45:52.:45:57.

Exactly how much James Ibori stole from his country, is a matter of

:45:57.:46:01.

speculation. But one American diplomat said it could be as much

:46:01.:46:09.

as up to $3 billion. What does it make you feel about Nigeria?

:46:09.:46:12.

and frustrated, it makes you angry that you want to go after these

:46:12.:46:20.

people. The Department for International Development told us

:46:20.:46:24.

their investment is now under investigation in Nigeria, but they

:46:24.:46:27.

were investigated here three years ago, and there is no indication

:46:27.:46:30.

that British funding has been misused.

:46:30.:46:40.
:46:40.:47:10.

That's all from us for now we leave you tonight with this handy tip, if

:47:10.:47:13.

you think you might one day be appointed President of the World

:47:13.:47:18.

Bank, there are some things you might possibly not do, even if your

:47:18.:47:23.

students think it is funny. The President of Dartmouth college in

:47:23.:47:27.

New Hampshire, today got one of the biggest jobs in world finance,

:47:27.:47:31.

despite having this skeleton in his closet.

:47:31.:47:36.

# I had the time of my life # And I never felt like this way

:47:36.:47:38.

before # And I swear

:47:38.:47:45.

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