:00:12. > :00:16.Tonight, this is the UK's first double-dip recession since the
:00:16. > :00:19.1970s, so why is the Government sticking to a growth plan that
:00:19. > :00:22.doesn't deliver growth. Paul Mason is here.
:00:22. > :00:25.There has been no growth for a year, but the real problem is where will
:00:25. > :00:28.it come from in the long-term. We will be speaking to the Chief
:00:28. > :00:32.Secretary to the Treasury, and the Shadow Chancellor.
:00:32. > :00:35.And we will discuss exactly how we might be able to get out of this
:00:35. > :00:38.mess. A crisis in the Government as the
:00:38. > :00:43.Culture Secretary, Jeremy Hunt, denies claims he smoothed the path
:00:43. > :00:47.for News Corporation to take over BSkyB, our political editor is here.
:00:47. > :00:52.He has lasted 24 hours so far, the resignation of his special adviser
:00:52. > :00:55.today has brought him more time. Questions remain about whether
:00:55. > :01:00.Jeremy Hunt breached the Ministerial Code of Conduct.
:01:00. > :01:04.We will hear from his cabinet colleague, Andrew Mitchell.
:01:04. > :01:11.Rupert Murdoch under oath at the Leveson Inquiry lays into Gordon
:01:11. > :01:16.Brown. He said, your company has made, declared war on my Government.
:01:16. > :01:21.And we had no alternative but to make war on your company.
:01:21. > :01:29.Here in the studio, Neil Wallis, the former deputy editor of News of
:01:29. > :01:33.the World, on how Murdoch wielded power over politicians.
:01:33. > :01:37.Good evening, it's the incredible shrinking economy, and as a
:01:37. > :01:39.recession is defined as two three- monthly periods of contraction, we
:01:39. > :01:43.are officially there. The Prime Minister responded to the figures
:01:43. > :01:48.by saying that he neither sought to excuse them, nor to explain them
:01:48. > :01:50.away. But isn't that akin to slugging your shoulders and
:01:50. > :01:53.scratching your head. The undeniable fact is that George
:01:53. > :01:57.Osborne's plan for growth isn't working, and if confidence in the
:01:57. > :02:01.economy, and the Government, is part of the problem, what is the
:02:01. > :02:05.solution. With me first tonight is our
:02:05. > :02:10.Economics Editor and our political editor. First of all, the
:02:10. > :02:19.Government tried horde to avoid this, how did they -- tried hard to
:02:19. > :02:24.avoid this, how did they get into this mess? A 0.2% shrinkage 0.2
:02:24. > :02:28.billion pounds is not a disaster, but it is a headline disaster. If
:02:28. > :02:30.you are telling people the plan is for rapid growth, and you have a
:02:30. > :02:33.growth plan. What is evident from today's figures is there is no-one
:02:33. > :02:37.cause, construction has fallen heavily, manufacturing has fallen,
:02:38. > :02:42.private services have fallen. The only thing that grew was Government,
:02:42. > :02:45.for a quarter. But then, when you look at the longer term, it is the
:02:45. > :02:48.question of what the double-dip tells you about the kind of
:02:48. > :02:52.recovery we are having. What it tells you is we are not having one.
:02:52. > :02:54.Have a look at what happened in the 1930s, the famous depression our
:02:54. > :02:58.grandparents lived through, there is the economic collapse, three
:02:58. > :03:02.years of pretty horrible pain, and then a recovery in the fourth year.
:03:02. > :03:05.That's the depression of the 30s, they red line shows what is
:03:05. > :03:09.happening now, equally strong collapse, a bit of a clawback, and
:03:09. > :03:15.look, we are not coming back. That is the problem. Worse, in global
:03:15. > :03:18.conditions it is hard to see how we come back. You have given us an
:03:19. > :03:24.idea of the few of the causes it might be what do you think it is?
:03:24. > :03:28.There is an combination -- a combination, banks that don't lend,
:03:28. > :03:33.consumers that don't borrow, the cuts, tax rises, and Europe, it is
:03:33. > :03:38.in its third quarter of recession. That absolutely does impact on the
:03:38. > :03:41.UK, it is a major export market. it fair to blame the Government?
:03:41. > :03:45.The Government contributed in terms of spending, but the biggest
:03:45. > :03:49.problem for the Government is, the story was that cut the state, and
:03:49. > :03:52.there will be a transition to rapid, export-led growth, it is not
:03:52. > :03:56.happening. The growth isn't happening, but if you then focus on
:03:56. > :04:00.the policy, you would say, OK, has the Government done enough, given
:04:00. > :04:04.that was the way out. Has it done enough to help British businesses
:04:04. > :04:08.rebalance towards external sources of growth, China, India, Singapore,
:04:08. > :04:11.Brazil. If you read a letter by Vince Cable, published in January,
:04:11. > :04:15.leaked in January, saying we haven't much of a clue, we have
:04:15. > :04:18.wasted two years, that is where you would focus the policy. As the
:04:18. > :04:21.right-wing will tell you, the austerity really hasn't even
:04:21. > :04:25.started yet. Lots of cuts to come. How woreed he
:04:25. > :04:30.hady is the Government, -- worried is the Government? My understanding
:04:30. > :04:34.is neither side of the coalition, including the Vince Cable side,
:04:34. > :04:44.neither think it is Plan B time. I think we are probably going to
:04:44. > :04:45.
:04:45. > :04:48.enter into a pressure of Plan A+, let's shirk off more things holding
:04:48. > :04:52.back the economy. I think a Conservative person will come
:04:52. > :04:56.forward saying what we are doing is trying to drive with the brakes on
:04:56. > :04:59.and we need to let go. What is key about the political moment with the
:04:59. > :05:03.two negative quarters is this, can you have a series of people at the
:05:03. > :05:05.top of Government who look out-of- touch, as long as they are managing
:05:05. > :05:09.and delivering the things they want to, people accept what they are
:05:09. > :05:14.doing. They don't care if they don't look like them. The moment
:05:14. > :05:19.they don't appear to be competent, in the words of one pollster, they
:05:19. > :05:23.said you can be heartless but not hopeless. That is why this is a big
:05:23. > :05:27.worry for Downing Street. It is extremely high stakes, as
:05:27. > :05:34.ideolgical debate and battle as it can get. Prime Minister's Questions
:05:34. > :05:38.today was a fascinating example of the debate. Why doesn't he admit it,
:05:38. > :05:42.it is his catastrophic economic policy, and plan for austerity,
:05:42. > :05:47.cutting foo far and foo fast that is landing us back in recession --
:05:47. > :05:53.too far and too fast that is landing us back in recession.
:05:53. > :05:57.is not a serious commentator or international body who thinks the
:05:57. > :06:01.plans -- these things happened in the last 24 months. The Chief
:06:01. > :06:04.Secretary to the Treasury, Danny Alexander is here n a moment I will
:06:04. > :06:08.speak to the Shadow Chancellor, Ed Balls. Danny Alexander, first of
:06:08. > :06:12.all, last year David Cameron called on Ed Miliband to apologise for
:06:12. > :06:17.talking down the economy, and talking of a double-dip recession,
:06:17. > :06:22.presumably it is David Cameron apologising today? These are very
:06:22. > :06:27.disappointing figures. So should he apologise? Look, we have major
:06:27. > :06:30.challenges in this country, our economy has been in intensive care
:06:30. > :06:34.since 2008, we have to deal with the deficit and financial problems
:06:34. > :06:38.we have as a country, and the massively underregulated financial
:06:38. > :06:43.sector, that fell into the crisis and credit crunch we saw. And
:06:43. > :06:45.restore the competitiveness of the UK economy, that supporting sectors
:06:46. > :06:51.neglected for many years under Labour's time in office. Those are
:06:51. > :06:56.big challenges for our country. It is very tough to get back to the
:06:56. > :06:59.sustainable austerity this country -- prosperity this country needs.
:06:59. > :07:04.Have you any idea how long this recession might last, people are
:07:04. > :07:07.desperate for answers? If you look at the most recent forecasts on the
:07:07. > :07:12.Office for Budget Responsibility, they forecast very slow growth this
:07:12. > :07:19.year, they forecast growth picking up in the years to come, but, of
:07:19. > :07:23.course. They got the forecast wrong for this quarterer, didn't they?
:07:23. > :07:27.face -- quarter? We heard from the OBR last year that the scale of the
:07:27. > :07:30.damage done to the UK economy through the credit crunch and the
:07:30. > :07:33.investigation, of much, much greater than previously thought. We
:07:33. > :07:39.are seeing high inflation and high commodity prices too there is a lot
:07:39. > :07:43.of head winds we are running into. The OBR saying it is over in a year,
:07:43. > :07:46.the problem is you talk it up too much and it doesn't deliver, or you
:07:46. > :07:51.don't talk it up and people feel a complete lack of confidence in what
:07:51. > :07:56.your Government is doing, you are between a rock and a hard place?
:07:56. > :07:58.The most important thing to do is stick to the plans to deal with the
:07:58. > :08:05.enormous budget deficit we inherited, that is securing the
:08:05. > :08:10.lower interest rates in this country. Hold on. The austerity
:08:10. > :08:14.package was dependant on a growth forecast of 2.6% in November 2010,
:08:14. > :08:18.that is what George Osborne worked on. We haven't had growth of 2.6
:08:18. > :08:23.since. No wonder people are really worried about your ability to
:08:23. > :08:26.calibrate what you should be doing in terms of cuts? The definite
:08:26. > :08:29.reduction package was based on the clear and present danger to the UK
:08:29. > :08:33.economy, when we came into office, we had the largest budgets deficit
:08:33. > :08:38.in this country since the 1940s, worries about Britain's ability to
:08:38. > :08:42.pay its way in the worpld. That is something we had to deal with for
:08:42. > :08:45.economic growth in the country: so too is delivering many of the
:08:45. > :08:48.things we have set out. The investment in infrastructure,
:08:48. > :08:52.greater than Labour had planned during their time in office. The
:08:52. > :08:55.reform of the planning system make as difference to business, the
:08:55. > :08:58.support for exports, the rebalancing of the economy, that
:08:58. > :09:04.became so feck cussed on financial services in the City of -- focused
:09:04. > :09:09.on financial services in the City of London. Look at manufacturing,
:09:09. > :09:13.and construction, dropping by 0.3%, this is an issue, if you want any
:09:13. > :09:16.growth you have to get those sectors back on their feet again,
:09:16. > :09:21.they are domestic. A lot of the problem is they are hanging on to
:09:21. > :09:25.capital, they are not investing because they don't trust you.
:09:25. > :09:28.listened to the British views of business and the Chamber of
:09:28. > :09:31.Commerce, they are saying stick to the plans you set out. What about
:09:32. > :09:35.Vince Cable saying you have a recipe for deficit but not growth?
:09:35. > :09:38.The British business community is telling us those things, and it
:09:38. > :09:44.backs our plans to invest in infrastructure, and it backs the
:09:45. > :09:48.plans for business to help people to invest. It tells us to...Do
:09:48. > :09:50.agree with your colleague, do you agree with your colleague? Let me
:09:50. > :09:54.answer the question. I think we have set out a clear plan for
:09:54. > :09:57.growth. It is not working? I'm sure in many areas there is more we can
:09:57. > :10:00.do. We are investing more in the nation's infrastructure, we are
:10:00. > :10:04.having the largest number of apprenticeships this country has
:10:04. > :10:07.ever seen to raise the skills of the country. If there was a magic
:10:07. > :10:10.wand to be waved overnight for politicians to deal with the
:10:10. > :10:13.biggest economic problems this country has seen for many decades,
:10:13. > :10:18.of course we would do. That the fact is, the deepest recession we
:10:18. > :10:22.have had for very many decades, the worst financial crisis for many
:10:22. > :10:26.decades. Idea this can be dealt with in the blink of the eye which
:10:26. > :10:30.the opposition seems to suggest is not true. It is not a blink of an
:10:30. > :10:33.eye, isn't it? There has been no growth for a year, yet there is no
:10:33. > :10:37.question of revising anything, indeed you want to cut further, and
:10:37. > :10:42.we must remember, of course, that the deficit reduction target is
:10:42. > :10:45.offbeam as well, that will be a much longer problem than you
:10:45. > :10:49.anticipated? In the Autumn Statement last year, in the budget
:10:49. > :10:52.this year, we set out new plans for further investment in
:10:52. > :10:58.infrastructure, getting pension funds invested in infrastructure in
:10:58. > :11:01.this country. In the budget just passed, we set out further cuts to
:11:01. > :11:04.co-operation tax, welcomed by business, we have reforms to the
:11:04. > :11:08.plan system, we are making big changes to restore the
:11:08. > :11:12.competitiveness of the UK economy. Ed Balls, the problem is, no matter
:11:12. > :11:15.how bad it is, people don't trust you to fix it, because the last
:11:15. > :11:19.Labour Government gave us the deepest recession this country has
:11:19. > :11:23.ever had? In the end people listen to what you say, and they judge you
:11:23. > :11:29.on results, and a year-and-a-half ago, David Cameron and George
:11:29. > :11:32.Osborne said we have got a plan and it will work, we will get the
:11:32. > :11:35.recovery moving, we will get unemployment and borrowing down.
:11:35. > :11:38.Today it is clear, the plan has failed, we are back in recession,
:11:38. > :11:41.and all we get from Danny is more of the same. Businesses and
:11:41. > :11:46.families hearing that, thinking it is not working, we are just going
:11:46. > :11:51.to carry on, it is a pity Danny wouldn't debate with me today. That
:11:51. > :11:56.is pathetic, we need plans for jobs and growth, he needs to admit the
:11:56. > :12:00.austerity is not working. We need to get the economy going, he has to
:12:00. > :12:05.admit we were right to say going too far and too fast, this
:12:05. > :12:09.austerity is not working. If Danny Alexander is insistent this plan
:12:09. > :12:12.won't change, what is your plan, that will have to change, people
:12:12. > :12:16.don't trust you, and your record proves you didn't handle the
:12:16. > :12:21.economy very well? How arrogant and out-of-touch can you be to say when
:12:21. > :12:26.you demonstrate it your plan is not working, we will just carry on,
:12:26. > :12:30.people will be dismayed. It is not working, austerity, in Italy or
:12:30. > :12:34.Spain, in America, a more balanced plan, a jobs plan, their economy is
:12:34. > :12:37.growing. You want more stimulus? need plan for jobs and growth.
:12:37. > :12:41.Absolutely, I have said consistently for 18 months, there
:12:41. > :12:46.should be a plan for jobs and growth. A year-and-a-half ago,
:12:46. > :12:51.Danny Alexander, George Osborne and David Cameron said we don't need it,
:12:51. > :12:55.our plan will work. Their plan has failed, cat grorically, they can't
:12:55. > :12:58.blame anyone -- categorically, they can't blame anyone else, it was
:12:58. > :13:01.made by Cameron and Osbourne and they need to do something about it.
:13:01. > :13:05.There are more cuts in the pipeline, Danny Alexander announced this week
:13:05. > :13:10.that he would be looking for a further 5% from additional
:13:10. > :13:13.departments which would reach �16.3 savings, Ed Miliband said if there
:13:13. > :13:16.was an election tomorrow, he would reinstate the 50p tax band. If
:13:16. > :13:23.there was an election tomorrow, in the light of the recession, would
:13:23. > :13:33.you recertificates the cuts? Right now, -- reverse the cuts? Right now
:13:33. > :13:38.
:13:38. > :13:41.we would go to a more balanced plan, cut VAT, we we have different cuts.
:13:41. > :13:45.What different departmental cuts would you make? We set out spending
:13:45. > :13:49.cuts and tax rises, a more balanced plan. They said they would go
:13:49. > :13:53.faster, they said it would work, and it has failed. The economy is
:13:53. > :13:56.in recession, borrowing is �150 billion higher, we need plan for
:13:56. > :14:00.jobs and growth right now. But the rest of the cuts in the pipeline
:14:00. > :14:03.for the Government putting forward, the rest of the cuts in different
:14:03. > :14:09.departments, you would keep, you wouldn't reverse those? I can't
:14:09. > :14:12.tell you where we will be at 2015. Ed Miliband was happy to tell us
:14:12. > :14:17.what he would do if there was an election today? I can't tell you
:14:17. > :14:21.other than the fact we will be clearing up George Osborne. Now,
:14:21. > :14:26.today, Ed Balls, it is not hypothetical, if you were to take
:14:26. > :14:32.over tomorrow, what would you do? five-point plan for jobs and growth,
:14:32. > :14:36.we would move to a steadier pace of definite reduction, we would copy
:14:36. > :14:39.America not the eurozone. We had a more balanced plan, George Osborne
:14:39. > :14:43.said he would cut faster, and he's borrowing more than our plan,
:14:43. > :14:47.because of his failure. If the economy is failing, if the plan is
:14:47. > :14:51.failing, it is arrogant to plough on, it is out-of-touch. Thank you
:14:51. > :14:55.very much. Yesterday, from the Leveson Inquiry,
:14:55. > :15:00.came the revelations about the Culture Secretary, Jeremy Hunt, and
:15:00. > :15:03.his links with Rupert Murdoch's BSkyB. Cue the ministerial fight
:15:03. > :15:09.for survival, with the Prime Minister expressing full confidence
:15:09. > :15:13.in him. His confession over the candid e-mail sent by an adviser to
:15:13. > :15:20.News International, and pressure forced an emergency statement in
:15:20. > :15:24.the House. An hour or so his aide, Adam Smith, had resigned for "going
:15:24. > :15:30.too far". Is everything cleared up? Oh no.
:15:30. > :15:35.Government has felt it to be the cruelest month, their budget had
:15:35. > :15:38.inadvertantly picked a fight with grannies, charities, conservatory
:15:39. > :15:42.owners, caravan owners, even churches, as quintessentially
:15:42. > :15:46.British as the pouring rain. But Downing Street insisted it was
:15:46. > :15:50.temporary, and knew better events would arrive, resetting the course.
:15:50. > :15:55.New events have come along, many of them, they are not the right sort
:15:55. > :15:57.of new events. Over Tuesday night and into the
:15:57. > :16:02.morning, the popular Culture Secretary had looked like he might
:16:02. > :16:08.be drowned by a dossier of e-mails that had emerged at the Leveson
:16:08. > :16:13.Inquiry. They suggested an improper intimacy surrounding his handling
:16:13. > :16:18.of the Murdoch bid to take over BSkyB. By the next morning, Lord
:16:18. > :16:22.Justice Leveson had intervened himself to urge caution with his
:16:22. > :16:27.inquiry's evidence. I'm acutely aware from considerable experience,
:16:27. > :16:33.that documents such as these cannot always be taken at face value.
:16:33. > :16:39.Things moved fast this morning, within moments of the bad GDP
:16:39. > :16:43.figures coming out, Adam Smith, Jeremy Hunt's adviser had resigned,
:16:43. > :16:48.and there was an urgent statement in the House of Commons. By the end
:16:48. > :16:51.of the morning, there would be admissions of seeing Swan Lake.
:16:51. > :16:56.Grabbing a swift chat with Jeremy Hunt at the ballet was one of the
:16:56. > :17:01.bogus claims made. Jeremy Hunt's team said. He saw Swan Lake all
:17:01. > :17:06.right, just five days later. Inaccurate details there may be,
:17:06. > :17:09.the leader of the opposition said, but there were also plenty of
:17:09. > :17:12.accurate ones. Lord Justice Leveson is responsible for a lot of things,
:17:12. > :17:18.but he's not responsible for the integrity of the Prime Minister's
:17:18. > :17:20.Government. In case he has forgotten, that is his
:17:20. > :17:25.responsibility as the Prime Minister. Two days before the
:17:25. > :17:28.statement to the House, on the 25th of January, the Culture Secretary's
:17:28. > :17:33.office was not only including with News Corporation, to provide them
:17:33. > :17:38.with information in advance, they were hatching a plan to ensure, and
:17:38. > :17:42.I quote, "it would be game over for the opposition to the bid". Does
:17:42. > :17:46.the Prime Minister really believe that is how a judge and his
:17:46. > :17:52.advisers are supposed to act? Later, in his statement, Jeremy
:17:52. > :17:59.Hunt sought to show he had been so scruplous, as to even snub News
:17:59. > :18:01.Corporation. I took four decisions in this process, each of those
:18:01. > :18:06.decisions was against what News Corporation wanted. The first
:18:06. > :18:10.decision that I took, well no, if you're making a very serious
:18:10. > :18:15.allegation, that I was supporting this bid and not acting quasi-
:18:15. > :18:19.judicially, you do at least have to listen to the evidence of what
:18:19. > :18:23.happened. It would be a question from an MP on his own side that
:18:23. > :18:26.would prove most tricky. The only thing I think affects parliament is
:18:26. > :18:32.the allegation from the honourable lady opposite, that a statement to
:18:32. > :18:36.parliament was leaked in advance. There are allegations in an e-mail
:18:36. > :18:46.that did not happen, I'm not able to come to the House today and say
:18:46. > :18:47.
:18:47. > :18:50.what the truth was, or otherwise, of the comoun Kay of the account of
:18:50. > :18:54.the conversation with Frederic Michel, which we know contained a
:18:54. > :18:57.number of exaggerations, that is why we have Lord Leveson looking
:18:57. > :19:01.into the whole matter. Now the question is whether the resignation
:19:01. > :19:05.of a special adviser can really be the end of it. The House is being
:19:05. > :19:08.invited to believe that either the relationship between the Secretary
:19:08. > :19:12.of State and Adam Smith was to dysfuntional that the Secretary of
:19:12. > :19:16.State was unaware of the extent and nature of the communication between
:19:16. > :19:20.Adam Smith and News Corporation, or, that it was a good relationship, in
:19:20. > :19:24.which case, the Secretary of State must, as the code of Connelly duct
:19:24. > :19:31.says, take full responsibility. special adviser has resigned, but
:19:31. > :19:35.does it cauterise the wound. Many people think the way a cabinet
:19:35. > :19:38.minister and special adviser relationship works, is the special
:19:38. > :19:43.adviser knows before the minister has thought it, what he's thinking,
:19:43. > :19:47.and the special adviser in the room is as good as the minister there,
:19:47. > :19:51.otherwise why is it a good use of another person's time. Adam Smith
:19:51. > :19:55.resigning is flying in the face of how many people think the system
:19:55. > :20:00.works. Tonight, shadow Culture Secretary, Harriet Haman, has
:20:00. > :20:04.written to the Prime Minister, asking for Jeremy Hunt to be
:20:04. > :20:06.disciplined for breaking the Code of Conduct. This asks a minister to
:20:06. > :20:10.take responsibility for his special adviser. In order to get through
:20:10. > :20:13.the last 24 hours, the Government have escalated the importance of
:20:13. > :20:17.Jeremy Hunt's appearance in front of Lord Leveson. They may have
:20:17. > :20:21.bought the minister more time, but it does now make the Leveson
:20:21. > :20:25.Inquiry much more political. Lord Justice Leveson will be pronounced
:20:26. > :20:29.on a cabinet minister's career. Ahead there is as much of two
:20:29. > :20:33.months of political testimony, before Lord Justice Leveson,
:20:33. > :20:36.politics, like our weather, will be unpredictable.
:20:36. > :20:40.Earlier tonight I spoke to Jeremy Hunt's cabinet colleague, Andrew
:20:41. > :20:44.Mitchell. Andrew Mitchell, yesterday the
:20:44. > :20:48.Government said the permanent secretary had cleared Adam Smith to
:20:48. > :20:53.speak to News Corporation, today Adam Smith resigned what did he do
:20:53. > :21:01.that was wrong? He said himself that he had exceeded his brief, and
:21:01. > :21:04.he resigned. That was the right thing to do. Was it, do you think,
:21:04. > :21:06.the disclosure of contents of a parliamentary statement to News
:21:06. > :21:10.Corporation before that statement was released to MPs, was that
:21:10. > :21:14.something he did wrong? We must be clear about what the evidence is.
:21:14. > :21:20.We will be clear about what the evidence is, when Jeremy Hunt gives
:21:20. > :21:24.his evidence to Lord Leveson. was clear from the e-mails?
:21:24. > :21:27.absolutely clear is the special adviser -- what is absolutely clear
:21:27. > :21:32.is the special adviser was the point man and that was agreed with
:21:32. > :21:36.the permanent secretary. If there was a disclosure, as is clear in
:21:36. > :21:39.the e-mails, of contents of parliamentary statement to News
:21:39. > :21:42.Corporation before MPs, that is a breach of the minutes tearal code,
:21:42. > :21:46.and as such, Jeremy Hunt would have to resign, wouldn't he? First of
:21:46. > :21:50.all, that is not clear. We need to have a much more detailed, and hear
:21:50. > :21:56.both sides of the case, in respect of the e-mails and everything else.
:21:56. > :22:00.Secondly, there have been special advisers who have had to revise,
:22:00. > :22:04.resign before, and they haven't taken their boss with them, for
:22:04. > :22:07.example Damian McBride resigned, I don't remember Gordon Brown going.
:22:07. > :22:12.Under the ministerial code, we are talking about the Conservatives
:22:12. > :22:18.here, the coalition here, under the ministerial code, ministers must
:22:18. > :22:22.take responsibility for the actions of the special advisers, if Jeremy
:22:22. > :22:26.Hunt was to act honourably, under the ministerial code, he would
:22:26. > :22:30.resign? I don't agree either that it is the ministerial code that has
:22:30. > :22:33.become broken. All these things will be dealt with by the Leveson
:22:33. > :22:36.Inquiry. It is right and proper, particularly in Britain, that we
:22:36. > :22:40.hear both side of the case. That is why Jeremy Hunt asked his evidence
:22:40. > :22:43.to be brought forward, and Lord Leveson has agreed it should be.
:22:43. > :22:47.The Home Secretary, Theresa May, made it quite clear on the question
:22:47. > :22:51.of the dates, for the Abu Qatada appeal, if any of her officials
:22:51. > :22:55.made a mistake, it was her responsibility. She said clearly it
:22:55. > :22:59.is her responsibility. Surely that should be the line of every member
:22:59. > :23:02.of the cabinet. I don't believe that a cabinet minister can be
:23:02. > :23:08.responsible for every single action. So she's wrong. That their special
:23:08. > :23:12.adviser takes. So she's wrong? had the President of Stephen Byers
:23:12. > :23:16.and Gordon Brown on exactly that point. You take the precedent of
:23:16. > :23:20.Gordon Brown for another party as your defence, as the human shield?
:23:20. > :23:23.I don't think it is remotely possible or practical to suggest
:23:23. > :23:27.that Jeremy Hunt can take responsibility for behaviour he did
:23:27. > :23:31.not know about when he did know about it and discovered about it
:23:31. > :23:35.this morning, is his special adviser resigned. This special
:23:35. > :23:41.adviser had a relationship, an inappropriate relationship, if we
:23:41. > :23:45.are to believe the e-mails, with News Corporation. There was no such
:23:45. > :23:48.conversation taking place with any of the opposition group, to the
:23:48. > :23:52.News Corp takeover. There was no special adviser, there was no lines
:23:52. > :23:56.of communication like that. That in itself is simply wrong, it is black
:23:56. > :24:02.and white, it is wrong. I don't agree, the whole reason why the
:24:02. > :24:06.special adviser was appointed to act as a link with News Corp, in a
:24:07. > :24:09.process approved by the permanent secretary, was because in these
:24:10. > :24:15.circumstances, it is right that there should be some contact. He
:24:15. > :24:19.was the appointed piorn to carry it out. There is nothing -- person to
:24:19. > :24:22.carry that out. There is nothing exceptional in that. Jeremy Hunt
:24:23. > :24:30.took parliament through the four decisions he did make, today,
:24:30. > :24:35.acting in his quasi-judicial role, none of them related today News
:24:35. > :24:39.Corp. Just to be clear, in your view, it is perfectly acceptable,
:24:39. > :24:44.for News Corp to have a special relationship with a special adviser,
:24:44. > :24:48.but not for the opposition, who did not want the News Corp takeover to
:24:48. > :24:52.have a relationship with a special adviser? There were links with many
:24:52. > :24:55.people. There was a process called for that took evidence in huge
:24:55. > :24:59.numbers from those who did not want the process to proceed. But the
:24:59. > :25:04.point which I'm making is the special adviser exceeded his brief,
:25:04. > :25:08.that is why he has resigned. But I think the matter end there until we
:25:08. > :25:11.hear from the inquiry and from Jeremy Hunt's evidence to Lord
:25:11. > :25:14.Leveson. Thank you very much.
:25:14. > :25:19.After the bombshell detonated by the resignation of Jeremy Hunt's
:25:19. > :25:23.special adviser, following the revelation of the inappropriate e-
:25:23. > :25:27.mails, it was the turn of the News Corp boss, the world's most
:25:27. > :25:31.powerful media mogul, to take the oath and say more than we have ever
:25:31. > :25:35.heard from Rupert Murdoch, in his 80 years. He was derped to do two
:25:35. > :25:38.things, to skwhrund play his influence in the political -- to
:25:38. > :25:43.underplay his influence in the politic skal sphere, and to settle
:25:43. > :25:46.a few scores, not least with Gordon Brown.
:25:46. > :25:50.Only the Queen has had more facetime with more prime ministers.
:25:50. > :25:56.Over more than 40 years, a parade of politicians has presented
:25:56. > :26:02.themselves for Murdoch approval, hoping for an endorsement, a fair
:26:02. > :26:12.wind, that, Mr Murdoch told the inquiry today, is the game. A game
:26:12. > :26:12.
:26:12. > :26:16.he clearly relishes. I enjoy meeting them. It is our leaders.
:26:16. > :26:22.Some impress me more than others. Into that catagory falls Mrs
:26:22. > :26:25.Thatcher, he's still an admirer. Let's say John Major, who despite
:26:25. > :26:28.many meetings, Mr Murdoch can't recall a single word of
:26:28. > :26:31.conversation. All politicians wanted his support, but time and
:26:31. > :26:36.again Mr Murdoch rejected any suggestion that he asked for
:26:36. > :26:43.commercial favours in return. want to put it to bed once and for
:26:43. > :26:51.all, that is a complete myth. is the myth, Mr Murdoch. That I
:26:51. > :26:53.used the influence of the Sun, or the supposed political power to get
:26:53. > :26:58.favourable treatment. What interested Mr Murdoch, he said,
:26:58. > :27:02.were the issues, like the euro, a whole evening spent debating this
:27:02. > :27:07.with Tony Blair, who was in favour, Mr Murdoch, dead set against. Tony
:27:07. > :27:11.Blair worked hard for the Sun's endorsement in 1977, but, again,
:27:11. > :27:16.the question, what was the price? in ten years of his power there,
:27:16. > :27:22.never asked Mr Blair for anything. Nor indeed did I receive any
:27:22. > :27:25.favours. If you want to check that, you should call him. Mr Murdoch
:27:26. > :27:30.admitted stewarding the Sun's editoral line, other papers had
:27:30. > :27:33.more freedom, but, he said, he loved papers and discussing stories
:27:34. > :27:41.with journalists. I'm a curious person, who is interested in the
:27:41. > :27:44.great issues of the day. I'm not good at holding my tongue.
:27:44. > :27:49.As former Sun editor, Kelvin MacKenzie found out, Mr Murdoch
:27:49. > :27:54.said he didn't much like the paper's famous verdict on the 1992
:27:54. > :27:58.election, and communicated his displeasure. My son, who is here
:27:59. > :28:04.today, and was apparently beside me, said I did indeed give him a hell
:28:04. > :28:12.of a bollocking. That is very frank, Mr Murdoch. But
:28:12. > :28:15.the point may be this, that you would not want it to appear that
:28:15. > :28:21.newspapers did have this influence over voters, because that might be
:28:21. > :28:25.said to be anti-democratic. I think using "democratic" is too strong a
:28:25. > :28:30.word. I thought it was tasteless and wrong for us. It was wrong, in
:28:30. > :28:34.fact, we don't have that sort of power. What the Sun gives, the Sun
:28:34. > :28:38.can take away. As Gordon Brown found out in September 2009, when
:28:38. > :28:47.the newspaper switched its support to the Conservatives. Mr Murdoch
:28:47. > :28:52.says Gordon Brown phoned him and made a quiet threat. He said, well,
:28:52. > :28:56.your company has, declared war on my Government, and, we have no
:28:57. > :29:00.alternative but to make war on your company.
:29:00. > :29:06.I said I'm sorry about that Gordon, thank you for calling, end of
:29:06. > :29:11.subject. How could Mr Brown have declared
:29:11. > :29:15.war on your company? I don't know, I don't think he was in a very
:29:15. > :29:19.balanced state of mind. Mr Brown has tonight issued a statement
:29:19. > :29:22.denying that any such conversation took place. And what of the man
:29:22. > :29:28.whom the Sun transferred his support to, David Cameron, well
:29:28. > :29:34.it's too early, says Mr Murdoch, to decide if he is a lightweight. He
:29:34. > :29:39.does dimly remember Mr Cameron interrupting a holiday in 2008, to
:29:39. > :29:46.fly out to the Murdoch yacht in Santorini. Perhaps, he said, Mr
:29:46. > :29:49.Cameron wanted to impress him. Someone who has impressed is Alex
:29:49. > :29:53.Salmond. I don't know Mr Salmond well, he as an amusing guy, and I
:29:53. > :29:57.enjoy his company. On his own account, Mr Murdoch is merely an
:29:57. > :30:00.interested newspaper man, driven by political ideals, rather than
:30:00. > :30:08.commercial advantage. If, through the years, the politicians have
:30:08. > :30:12.overestimated his power, well, it's not his fault, is it? What exactly
:30:12. > :30:16.was Rupert Murdoch's relationship with the political elite, and what
:30:17. > :30:20.influence did he exert. Watching his former boss at the Leveson
:30:20. > :30:25.Inquiry was Neil Wallis, the former deputy editor and executive editor
:30:25. > :30:27.of the News of the World. He's on police bail as part of the phone
:30:27. > :30:31.hacking investigation, he cannot ask questions in relation to that
:30:31. > :30:35.investigation. He joins me now. What did you make of Rupert
:30:35. > :30:40.Murdoch's demeanor today, he seemed to be playing himself down a bit?
:30:40. > :30:47.He was certainly doing that. It wasn't the Rupert Murdoch that I
:30:47. > :30:52.was expecting. I don't think anybody was. He played a cuddly,
:30:52. > :30:58."what me?" role today. It wasn't a Rupert Murdoch that I particularly
:30:58. > :31:05.recognise. It was good acting? I think he brought himself into a
:31:05. > :31:09.role. In a sense, you might say, News Corp is going down and taking
:31:09. > :31:12.politicians with them. We will talk broadly about his attitude to
:31:12. > :31:18.politics, on the question of Gordon Brown, that was a direct hit,
:31:18. > :31:21.wasn't it? Deadly, I thought. I mean, I had heard that story well
:31:21. > :31:27.over a year ago. It surfaced somewhere about three month ago, I
:31:27. > :31:30.think. But that story is extremely well known. And partly it came out.
:31:30. > :31:35.Gordon Brown has denied tonight that was a Conservatives. So I
:31:35. > :31:39.gathered. Partly the reason it was told, was because of Mr Murdoch's
:31:39. > :31:45.genuine upset that he has fallen out with a guy whom he genuinely
:31:45. > :31:50.admired a lot. Interestingly, at that moment, was that a flash of
:31:50. > :31:53.the role hard-nosed Rupert Murdoch making that attack? What I saw
:31:53. > :32:00.there, in particularly the phrasology of thank you for the
:32:00. > :32:04.call, I thought what you -- phraseyology, of thank you for the
:32:04. > :32:09.call, and it was like, if that is business, we will fight like that.
:32:09. > :32:15.Tell us how he calibrated his relationship with other politicians,
:32:15. > :32:19.everybody was flocking, Tony Blair, David Cameron? In the introduction,
:32:19. > :32:23.you said Rupert Murdoch wielded his power, he didn't need to wield his
:32:23. > :32:28.power. In my experience, I have worked for him for about 20 years,
:32:28. > :32:31.ten years of that at a senior level. Politicians crawled over broken
:32:31. > :32:36.glass to see Rupert Murdoch. Rupert Murdoch didn't have to ring them,
:32:36. > :32:40.they were lining up round the block. How do you judge the relationship,
:32:40. > :32:44.for example, with someone like David Cameron? Well, Mr Murdoch was
:32:44. > :32:47.never that impressed by David Cameron. I remember being at a
:32:47. > :32:51.dinner in which, this was while he was still in the opposition, and
:32:51. > :32:55.they had met at the understand gaigs of somebody else who was at
:32:55. > :33:00.the table -- instigation of somebody else at the table. It was
:33:00. > :33:04.very clear he was pretty unimpressed, and the feeling was
:33:04. > :33:09.that there was disappointment about how little Cameron had impressed
:33:09. > :33:13.him. So, moving on to his own role, his close role, would you say, with
:33:13. > :33:21.his papers. He said that really, if you want his view, you can read it
:33:21. > :33:28.in the Sun editoral. Was he pretty closely involved? In my time,
:33:28. > :33:31.particularly at the Sun, enormously. One of the issues, in my view,
:33:31. > :33:37.happening with News International, is this business has exploded over
:33:37. > :33:41.the years, and he has less involvement with the papers. My
:33:41. > :33:45.experience is more Rupert, better papers. Where the Sun is concerned,
:33:45. > :33:49.that is absolutely true. The Sun is the thing he really loves, he loves
:33:49. > :33:55.the Times as well. He loses millions on it. He's telling the
:33:55. > :34:00.truth when he says, if you want to know what Rupert thinks, read the
:34:00. > :34:04.Sun leaders. There was talk of him being the master of the universe,
:34:04. > :34:09.he was deciding the papers' editoral line? It didn't really
:34:09. > :34:14.work like that. If you go and work for the Sun, you know what you are
:34:14. > :34:19.getting into. This is a populist, hard-hitting, right of centre,
:34:19. > :34:24.newspaper. Now what I did think was interesting today, I understood why
:34:24. > :34:28.he used the word "independent", Rupert was not party political. The
:34:28. > :34:33.best way to describe him was he was a populus, he was a man, despite
:34:33. > :34:38.his incredible wealth, had a distinctive understanding of the
:34:38. > :34:42.common man. Under him, people like yourself felt you could get to any
:34:42. > :34:45.politician or chief police officers, it was the Murdoch calling card?
:34:46. > :34:50.think working for the Sun, or working for the News of the World,
:34:50. > :34:54.which, of course, was owned by Mr Murdoch. But the truth is, these
:34:54. > :34:57.were small papers, the Sun was virtually broke, less than a
:34:57. > :35:01.million selling. He took it over, his genius for mass communication,
:35:01. > :35:05.meant it was something you could not ignore. The interesting thing
:35:05. > :35:09.is, we will all be watching with baited breath, because he's back
:35:09. > :35:15.tomorrow. Will we get a sense tomorrow, do you think, of hoi
:35:15. > :35:20.Leveson himself, even change -- the whole question of Leveson might
:35:20. > :35:25.change the relationship between politicians and media magnates.
:35:25. > :35:30.whole question of Leveson in where the press is going, I think there
:35:30. > :35:33.is always something called Leveson's Law, I think that is
:35:33. > :35:37.already damaging the effectiveness of the press. It is damaging. You
:35:37. > :35:41.think it is for ill rather than good? Yes, I think politicians are
:35:41. > :35:46.terrified now to talk to people they are desperate to speak to.
:35:46. > :35:54.Just before we finish, should we be looking out for slightly more ever
:35:54. > :35:56.so humble, or is there some exorates from Rupert Murdoch
:35:56. > :35:59.tomorrow? I suspect he will have more to give.
:35:59. > :36:03.Back to the recession and the news that the UK has hit a double-dip
:36:03. > :36:07.would not have come so much as a surprise to the people of South
:36:07. > :36:12.Wales, where unemployment is up to 25% in some part. There the green
:36:12. > :36:22.shoots of recovery have been rarer than hen's teeth. Joe Lynam spent
:36:22. > :36:23.
:36:23. > :36:26.the day there. Bridgend, home to the inventor of
:36:27. > :36:33.X-raying, supersonic travel and Richard Burton, is doing better
:36:33. > :36:38.than the rest of the Wales. However this industrial estate has lots of
:36:38. > :36:44.empty space. Sony moved out, it used to make TVs. Future growth
:36:44. > :36:48.might come from making Biotechling to or life sciences. This company,
:36:48. > :36:52.conveniently called Biotec, processes and packaging and
:36:52. > :36:55.clinical trials for the big pharmacological giants. The
:36:55. > :37:00.Government wants to see more like them. It is one of the areas that
:37:00. > :37:04.will drive the economy forward in Wales. The Welsh Government have
:37:04. > :37:08.recently released �100 million funding into that sector. Wales has
:37:08. > :37:12.been strong in terms of research and innovation, probably not too
:37:12. > :37:16.strong in terms of commercialisation, especially in
:37:16. > :37:21.the Biotech sector, in terms of getting the product from research
:37:21. > :37:28.and Government to market. If you can get a decent supply of
:37:28. > :37:33.pharmacists and Biotech nigss, because Bridgend is in the M4
:37:33. > :37:38.corridor, stretching from Swansea to Newport. It has the best roads,
:37:38. > :37:45.universities and railways and broadband in the UK. These places
:37:45. > :37:54.can attract talent and capital. Further into the valleys that
:37:54. > :37:59.attractiveness withers. Blaun a new gent has unemployment of 25%. PMB,
:37:59. > :38:06.the plastics manufacturer can't compete with wage rises in line
:38:06. > :38:13.with inflation. One of our guys came to work and said I come to
:38:13. > :38:17.stay sane, the wages compete with benefits. We awarded a 2% pay rise
:38:17. > :38:21.this year. The answers I got back from staff is inflation is running
:38:21. > :38:26.higher than that, the gas bills are through the roof, and we can't
:38:26. > :38:30.afford rates and to live. We have always been in a recession. That is
:38:30. > :38:34.the feeling you get from talking to people around the area. There has
:38:34. > :38:39.been signs or messages that we might be coming out of it, or just
:38:39. > :38:45.about coming out of it. But we have always been in it. On the ground
:38:45. > :38:47.this shrinking has continued? 30 years ago this was home to one
:38:47. > :38:53.of the largest steel factories in Britain, employing most of the
:38:53. > :38:58.people around here and the hinterland, the steel factory has
:38:59. > :39:01.long since gone, and left unemployment, low educational
:39:02. > :39:07.attainment and low life expectancy. Given the opportunity of creating
:39:07. > :39:10.the type of jobs that they had three decades ago, and it has
:39:10. > :39:17.passed, local authorities here are in the business of managing decline.
:39:17. > :39:20.What sort of improvements in productivity can you investment in
:39:20. > :39:24.to enable to have jobs elsewhere in Wales. At the moment it takes an
:39:24. > :39:28.hour to get from Cardiff to here. If I was living in the south-east,
:39:28. > :39:32.there would be a fast journey from here to the centre that would take
:39:32. > :39:37.20 minutes, we have to investment in that sort of -- invest in that
:39:37. > :39:43.sort of thing to manage decline, so people might not live in places but
:39:43. > :39:46.might not live in those places. GDP numbers are out, it seems to
:39:46. > :39:49.suggest the construction sector dragged the UK economy back into
:39:49. > :39:56.recession, how does that play nationally, and more legally here
:39:56. > :40:00.in Wales? I think the construction sector has reined back in, there
:40:00. > :40:04.has been a significant reduction in going forward. You can look at that
:40:04. > :40:07.in terms of the impact of the public sector cuts, in terms of
:40:07. > :40:10.transport infrastructure, health and education, all starting to come
:40:10. > :40:14.back again. At the moment the private sector is not going forward
:40:14. > :40:17.in that area. Wales should be well placed to benefit from rebalancing
:40:17. > :40:22.of the UK economy, away from consumption, and towards
:40:22. > :40:26.manufacturing, in reality, though, its best hope is to create high-
:40:26. > :40:30.value, low-intensity jobs, like Biotec, but talent and remoteness
:40:30. > :40:34.don't always go together. With me to explain how we got into
:40:34. > :40:44.this mess and how we should get out of it, is Martin Bashir, the
:40:44. > :40:44.
:40:44. > :40:49.general secretary of the trades union -- Brendan Barber, a venture
:40:49. > :40:54.capitalist John molten to, chairman of Better Capital. Let's get
:40:54. > :40:58.ourselves out of had this mess in the next few minutes. First of all,
:40:58. > :41:02.your analysis of why the growth predirections were wrong, Kate?
:41:02. > :41:07.growth comes that came out today were a bid odd. A lot of people
:41:07. > :41:11.have been looking at the construction numbers, and been
:41:11. > :41:14.puzzled, the service sector, the big disappointment, you look at
:41:14. > :41:17.retail sales, they have been strong. You look at the other surveys, and
:41:17. > :41:21.they have been strong. I don't think that is the point. I don't
:41:21. > :41:25.think today's numbers are the point. The real point is, we don't seem to
:41:25. > :41:30.be getting back any time soon to the kind of sustained growth rate
:41:30. > :41:33.that deliver the things that people really care about, which is grot
:41:33. > :41:38.growth in -- growth in jobs and real incomes, that is more
:41:38. > :41:43.important than the figures going up or down today. It suggests that the
:41:43. > :41:46.austerity package, as one might put it, simply isn't working?
:41:46. > :41:52.certainly isn't. You can't say the economy is thriving, it certainly
:41:52. > :41:56.is not. The question is, what do you do about it, do you put
:41:56. > :42:00.financial stimulus in, or as was said earlier, a senior Tory coming
:42:00. > :42:05.out and saying we have to go at it, harder and faster? One of the big
:42:05. > :42:10.causes of low growth, that won't go away, is the size of the public
:42:10. > :42:18.sector. The economy is 48% public sector. And basically, in the last
:42:18. > :42:24.few years we have gone from 37 to 48, every per cent takes away 0.12
:42:24. > :42:31.per cent of the growth in the economy. 48 take away 37, 11,
:42:31. > :42:34.multiply it up. Something like 1.5% comes off growth rate. We won't
:42:34. > :42:38.grow quickly until we cut the public sector. If we have no growth,
:42:38. > :42:45.the only way to cut the public sector, is harder austerity, with
:42:45. > :42:48.all the pain that gives. That's short-term pain, long-term gain.
:42:48. > :42:52.Are you prepared for short-term pain in the public sector for long-
:42:52. > :42:55.term gain? We are seeing a lot of pain in the public and private
:42:55. > :42:59.sector. In terms of the squeeze on the public sector, the forecast is
:42:59. > :43:05.now for over 700,000 jobs to be taken out of the public sector,
:43:05. > :43:10.over this next forecast period. This strategy isn't delivering, it
:43:10. > :43:16.is demonstrably not delivering. We see now the double-dip recession
:43:16. > :43:20.that we forecast and many people scoffed. A year or so back, when we
:43:20. > :43:23.said it was a real possibility. And other countries are not enduring
:43:23. > :43:27.the same degree of economic hardship that we are being forced
:43:27. > :43:33.to go through. Some eurozone countries are? Some are. Waugh bu
:43:33. > :43:37.what about John Molton. What about the United States. There is a lot
:43:37. > :43:41.more pain after the next election there? They have recovered all the
:43:41. > :43:48.loss to the economy over the recession period, their economy is
:43:48. > :43:52.1% bigger than pre-recession. We are still over 4% smaller. What do
:43:52. > :43:57.you make of the point that putting aside the fact that these are real
:43:57. > :44:03.people, 600,000 people, but if you don't radically reduce your public
:44:03. > :44:06.sector, we won't get back to growth? I think this is a totally
:44:06. > :44:11.false prospectus. We are seeing huge cuts in public spending, those
:44:11. > :44:14.cuts are not only hitting the public sector and public services,
:44:14. > :44:16.they are hitting the private sector hard too. You take the construction
:44:17. > :44:22.industry, one of the first decisions the Government made in
:44:22. > :44:25.their first budget, was to cut billions out of the schools'
:44:25. > :44:29.building programme, building schools for the future. The
:44:29. > :44:32.consequences of that decision are now being seen in the state of our
:44:32. > :44:36.construction industry. Isn't it a problem, although it was said that
:44:36. > :44:42.you have to cut back the public sector, the problem is, that
:44:42. > :44:48.requires, I assume what you mean, the private sector to take up the
:44:48. > :44:53.slack and grow? In due course. can't be that, we are seeing
:44:53. > :44:55.shrubishness in the private sector and they are reluctant to take up
:44:55. > :45:00.the slack? That is hardly surprising, they are looking into a
:45:00. > :45:03.few years, this is true, there is no point getting around it, that
:45:03. > :45:07.the banks will continue to deleverage, and the public sector
:45:07. > :45:11.will shrink, that buys a lot from the private sector. They are
:45:11. > :45:15.interrelated, you can't talk to one without the other. We have seen
:45:15. > :45:21.energy prices rising, and we have a eurozone situation bringing great
:45:21. > :45:26.risks. Against that background will be invest for growth. Some will,
:45:26. > :45:30.they are getting good at investing in good parts of the world. Not
:45:30. > :45:34.every company can switch. I'm not as pessimistic as some of the other
:45:34. > :45:37.people today. When you talk about the fact that companies won't
:45:37. > :45:41.invest for growth, it is not necessarily that they don't have
:45:41. > :45:45.the money to invest, it is just they are holding it in a pot, what
:45:46. > :45:49.good is that? It is good for two things. If you invest and there is
:45:49. > :45:53.no demand there, you have grown it away. Why would you do that. The
:45:53. > :45:57.second thing is companies have just been through, as we all have, a
:45:57. > :45:59.period of shock, a company is made up of people. When people have been
:45:59. > :46:03.through shock, they are more cautious. Companies feel that they
:46:03. > :46:08.would like to have a big irbalance sheet, because they are worried
:46:08. > :46:14.that the next shot, pos below triggered by the eurozone, is down
:46:14. > :46:19.the line. It is not surprising. are more confident that than either
:46:19. > :46:23.Brendan Barber or John Molton? feel more confident, I thought the
:46:23. > :46:30.numbers were odd today. We have seen some signs of things in the
:46:30. > :46:33.economy strengthening. We heard from the CBI a positive
:46:33. > :46:37.manufacturing survey, provided energy price don't go up we will
:46:37. > :46:43.see real income growth at some point this year. Companies will
:46:43. > :46:48.invest because they need to replace their investment, these are the old
:46:48. > :46:52.ways of optimisim. I'm not talking about growth rushing back to trend,
:46:52. > :46:56.but let's not sit here and say it is all doom and gloom. For ordinary
:46:56. > :47:04.people in the street, the problem is, if the Government hangs its hat
:47:04. > :47:08.and policies on figures, that then turn out to be strange, why should
:47:08. > :47:10.people have confidence anything will improve? Picking up on a
:47:10. > :47:16.couple of things. Current expenditure by the Government
:47:16. > :47:21.hasn't been cut. It goes up steadily across the forecast. The
:47:21. > :47:24.Government bet on growth to get the economy back to equality of income
:47:24. > :47:28.and expenditure. Without growth we carry on running the deficit, we
:47:28. > :47:33.carry on stacking up the debt. The debt is large. At some stage people
:47:33. > :47:38.will run out of credibility, and our currency and our gilts, then we
:47:38. > :47:42.have the mother and father of crises, that is a risk that gets
:47:42. > :47:47.larger by the day. We are still at the early stages of these cuts. The
:47:47. > :47:52.IFS have pointed out, so far we have had 6% of the planned cuts. In
:47:52. > :47:57.other words, for every pound cut we have had so far, there are �16 yet
:47:57. > :48:02.to come. And all that is dragging the economy further down into the
:48:02. > :48:08.mire. Pushing unemployment up, damaging confidence, taking demand
:48:08. > :48:13.out of the economy, it is a road to nowhere. Do you believe that the
:48:13. > :48:18.public sector should be taking some of the pain? It has been taking a
:48:18. > :48:22.huge amount of the pain. We need to...Radical Thinking on the public
:48:22. > :48:26.sector? We need radical thinking about building a very different
:48:26. > :48:32.kind of economy, based on different values. We need major changes in
:48:32. > :48:35.the way our banking and financial system operates, it is not acting
:48:35. > :48:40.as an effective channel for investment into sustainable wealth
:48:40. > :48:47.generation. We need much less reliance on the financial sector,
:48:47. > :48:51.as the great engine of growth. We need serious attention to
:48:51. > :48:56.industrial issues. Is it wrong to blame other European countries for
:48:56. > :49:00.our ills? There is tremendous instability in our largest export
:49:00. > :49:06.market. It is affecting confidence and GDP directly. Europe is hurting
:49:06. > :49:09.that I wa, Europe is hurting other ways. We are restricting our
:49:09. > :49:12.economy with excess regulation, which is is a European effect.
:49:12. > :49:18.don't really buy this view that all that has to happen is the
:49:18. > :49:24.Government gets out of the way. Then things will improve. To be
:49:24. > :49:29.fair I didn't quite say that. you said the public certificator
:49:29. > :49:35.should be cut more quick low and there be less ringlation. You
:49:35. > :49:38.implied d quickly and there be less regulation. You implied less
:49:38. > :49:43.Government in those respects. I don't agree, Governments have a big
:49:43. > :49:46.role in the economy and keeping growth going. I have no sympathy
:49:46. > :49:50.with the view that by sticking very hard to the targets that the
:49:50. > :49:55.Government is taking quite a risk. I don't agree, by the way, they
:49:55. > :49:58.have hung their hat on the growth forecast, neither the Government or
:49:58. > :50:02.the banks hang their hat on growth forecasts, they are not worth the
:50:02. > :50:08.paper they are printed on. Just tomorrow morning's front pages,
:50:08. > :50:18.beginning with the Telegraph. It goes on Cameron's five secret
:50:18. > :50:34.
:50:34. > :50:44.That's all tonight, I will be back tomorrow. From all of us here, a
:50:44. > :51:10.
:51:10. > :51:12.More heavy rain and strong winds, the cold winds particularly in
:51:12. > :51:15.evidence across northern Scotland and Northern Ireland during
:51:15. > :51:19.Thursday. A brisk wind across the south-east, it means here the
:51:19. > :51:24.showers will zip through to bring some sunny spells, in central areas
:51:24. > :51:29.the winds are lighter, that means the downpours that develop, they
:51:29. > :51:33.will develop widely, some places in the north-east getting a soaking.
:51:33. > :51:36.There will be some sunshine lifting the temperatures into the teens.
:51:36. > :51:40.The showers across the south west of England will once again contain
:51:40. > :51:45.hail and thunder, as they will across Wales. Here, with relatively
:51:45. > :51:49.light winds, those downpours could last for some time. The wind are
:51:49. > :51:53.brisk across Northern Ireland, a chilly wind here too. Some dryer
:51:53. > :51:57.and brighter spells, a cloudy day with outbreaks of rain. The best of
:51:57. > :52:00.the brightness across western parts of Scotland. Elsewhere cloud and
:52:00. > :52:04.outbreaks of rain, particularly close to the North Sea. It will
:52:04. > :52:08.feel cold with temperatures into single figures. More cloud and rain
:52:08. > :52:14.across northern England. Further north a mixture of sunshine and