Browse content similar to 25/04/2012. Check below for episodes and series from the same categories and more!
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Tonight, this is the UK's first double-dip recession since the | :00:12. | :00:16. | |
1970s, so why is the Government sticking to a growth plan that | :00:16. | :00:19. | |
doesn't deliver growth. Paul Mason is here. | :00:19. | :00:22. | |
There has been no growth for a year, but the real problem is where will | :00:22. | :00:25. | |
it come from in the long-term. We will be speaking to the Chief | :00:25. | :00:28. | |
Secretary to the Treasury, and the Shadow Chancellor. | :00:28. | :00:32. | |
And we will discuss exactly how we might be able to get out of this | :00:32. | :00:35. | |
mess. A crisis in the Government as the | :00:35. | :00:38. | |
Culture Secretary, Jeremy Hunt, denies claims he smoothed the path | :00:38. | :00:43. | |
for News Corporation to take over BSkyB, our political editor is here. | :00:43. | :00:47. | |
He has lasted 24 hours so far, the resignation of his special adviser | :00:47. | :00:52. | |
today has brought him more time. Questions remain about whether | :00:52. | :00:55. | |
Jeremy Hunt breached the Ministerial Code of Conduct. | :00:55. | :01:00. | |
We will hear from his cabinet colleague, Andrew Mitchell. | :01:00. | :01:04. | |
Rupert Murdoch under oath at the Leveson Inquiry lays into Gordon | :01:04. | :01:11. | |
Brown. He said, your company has made, declared war on my Government. | :01:11. | :01:16. | |
And we had no alternative but to make war on your company. | :01:16. | :01:21. | |
Here in the studio, Neil Wallis, the former deputy editor of News of | :01:21. | :01:29. | |
the World, on how Murdoch wielded power over politicians. | :01:29. | :01:33. | |
Good evening, it's the incredible shrinking economy, and as a | :01:33. | :01:37. | |
recession is defined as two three- monthly periods of contraction, we | :01:37. | :01:39. | |
are officially there. The Prime Minister responded to the figures | :01:39. | :01:43. | |
by saying that he neither sought to excuse them, nor to explain them | :01:43. | :01:48. | |
away. But isn't that akin to slugging your shoulders and | :01:48. | :01:50. | |
scratching your head. The undeniable fact is that George | :01:50. | :01:53. | |
Osborne's plan for growth isn't working, and if confidence in the | :01:53. | :01:57. | |
economy, and the Government, is part of the problem, what is the | :01:57. | :02:01. | |
solution. With me first tonight is our | :02:01. | :02:05. | |
Economics Editor and our political editor. First of all, the | :02:05. | :02:10. | |
Government tried horde to avoid this, how did they -- tried hard to | :02:10. | :02:19. | |
avoid this, how did they get into this mess? A 0.2% shrinkage 0.2 | :02:19. | :02:24. | |
billion pounds is not a disaster, but it is a headline disaster. If | :02:24. | :02:28. | |
you are telling people the plan is for rapid growth, and you have a | :02:28. | :02:30. | |
growth plan. What is evident from today's figures is there is no-one | :02:30. | :02:33. | |
cause, construction has fallen heavily, manufacturing has fallen, | :02:33. | :02:37. | |
private services have fallen. The only thing that grew was Government, | :02:38. | :02:42. | |
for a quarter. But then, when you look at the longer term, it is the | :02:42. | :02:45. | |
question of what the double-dip tells you about the kind of | :02:45. | :02:48. | |
recovery we are having. What it tells you is we are not having one. | :02:48. | :02:52. | |
Have a look at what happened in the 1930s, the famous depression our | :02:52. | :02:54. | |
grandparents lived through, there is the economic collapse, three | :02:54. | :02:58. | |
years of pretty horrible pain, and then a recovery in the fourth year. | :02:58. | :03:02. | |
That's the depression of the 30s, they red line shows what is | :03:02. | :03:05. | |
happening now, equally strong collapse, a bit of a clawback, and | :03:05. | :03:09. | |
look, we are not coming back. That is the problem. Worse, in global | :03:09. | :03:15. | |
conditions it is hard to see how we come back. You have given us an | :03:15. | :03:18. | |
idea of the few of the causes it might be what do you think it is? | :03:19. | :03:24. | |
There is an combination -- a combination, banks that don't lend, | :03:24. | :03:28. | |
consumers that don't borrow, the cuts, tax rises, and Europe, it is | :03:28. | :03:33. | |
in its third quarter of recession. That absolutely does impact on the | :03:33. | :03:38. | |
UK, it is a major export market. it fair to blame the Government? | :03:38. | :03:41. | |
The Government contributed in terms of spending, but the biggest | :03:41. | :03:45. | |
problem for the Government is, the story was that cut the state, and | :03:45. | :03:49. | |
there will be a transition to rapid, export-led growth, it is not | :03:49. | :03:52. | |
happening. The growth isn't happening, but if you then focus on | :03:52. | :03:56. | |
the policy, you would say, OK, has the Government done enough, given | :03:56. | :04:00. | |
that was the way out. Has it done enough to help British businesses | :04:00. | :04:04. | |
rebalance towards external sources of growth, China, India, Singapore, | :04:04. | :04:08. | |
Brazil. If you read a letter by Vince Cable, published in January, | :04:08. | :04:11. | |
leaked in January, saying we haven't much of a clue, we have | :04:11. | :04:15. | |
wasted two years, that is where you would focus the policy. As the | :04:15. | :04:18. | |
right-wing will tell you, the austerity really hasn't even | :04:18. | :04:21. | |
started yet. Lots of cuts to come. How woreed he | :04:21. | :04:25. | |
hady is the Government, -- worried is the Government? My understanding | :04:25. | :04:30. | |
is neither side of the coalition, including the Vince Cable side, | :04:30. | :04:34. | |
neither think it is Plan B time. I think we are probably going to | :04:34. | :04:44. | |
:04:44. | :04:45. | ||
enter into a pressure of Plan A+, let's shirk off more things holding | :04:45. | :04:48. | |
back the economy. I think a Conservative person will come | :04:48. | :04:52. | |
forward saying what we are doing is trying to drive with the brakes on | :04:52. | :04:56. | |
and we need to let go. What is key about the political moment with the | :04:56. | :04:59. | |
two negative quarters is this, can you have a series of people at the | :04:59. | :05:03. | |
top of Government who look out-of- touch, as long as they are managing | :05:03. | :05:05. | |
and delivering the things they want to, people accept what they are | :05:05. | :05:09. | |
doing. They don't care if they don't look like them. The moment | :05:09. | :05:14. | |
they don't appear to be competent, in the words of one pollster, they | :05:14. | :05:19. | |
said you can be heartless but not hopeless. That is why this is a big | :05:19. | :05:23. | |
worry for Downing Street. It is extremely high stakes, as | :05:23. | :05:27. | |
ideolgical debate and battle as it can get. Prime Minister's Questions | :05:27. | :05:34. | |
today was a fascinating example of the debate. Why doesn't he admit it, | :05:34. | :05:38. | |
it is his catastrophic economic policy, and plan for austerity, | :05:38. | :05:42. | |
cutting foo far and foo fast that is landing us back in recession -- | :05:42. | :05:47. | |
too far and too fast that is landing us back in recession. | :05:47. | :05:53. | |
is not a serious commentator or international body who thinks the | :05:53. | :05:57. | |
plans -- these things happened in the last 24 months. The Chief | :05:57. | :06:01. | |
Secretary to the Treasury, Danny Alexander is here n a moment I will | :06:01. | :06:04. | |
speak to the Shadow Chancellor, Ed Balls. Danny Alexander, first of | :06:04. | :06:08. | |
all, last year David Cameron called on Ed Miliband to apologise for | :06:08. | :06:12. | |
talking down the economy, and talking of a double-dip recession, | :06:12. | :06:17. | |
presumably it is David Cameron apologising today? These are very | :06:17. | :06:22. | |
disappointing figures. So should he apologise? Look, we have major | :06:22. | :06:27. | |
challenges in this country, our economy has been in intensive care | :06:27. | :06:30. | |
since 2008, we have to deal with the deficit and financial problems | :06:30. | :06:34. | |
we have as a country, and the massively underregulated financial | :06:34. | :06:38. | |
sector, that fell into the crisis and credit crunch we saw. And | :06:38. | :06:43. | |
restore the competitiveness of the UK economy, that supporting sectors | :06:43. | :06:45. | |
neglected for many years under Labour's time in office. Those are | :06:46. | :06:51. | |
big challenges for our country. It is very tough to get back to the | :06:51. | :06:56. | |
sustainable austerity this country -- prosperity this country needs. | :06:56. | :06:59. | |
Have you any idea how long this recession might last, people are | :06:59. | :07:04. | |
desperate for answers? If you look at the most recent forecasts on the | :07:04. | :07:07. | |
Office for Budget Responsibility, they forecast very slow growth this | :07:07. | :07:12. | |
year, they forecast growth picking up in the years to come, but, of | :07:12. | :07:19. | |
course. They got the forecast wrong for this quarterer, didn't they? | :07:19. | :07:23. | |
face -- quarter? We heard from the OBR last year that the scale of the | :07:23. | :07:27. | |
damage done to the UK economy through the credit crunch and the | :07:27. | :07:30. | |
investigation, of much, much greater than previously thought. We | :07:30. | :07:33. | |
are seeing high inflation and high commodity prices too there is a lot | :07:33. | :07:39. | |
of head winds we are running into. The OBR saying it is over in a year, | :07:39. | :07:43. | |
the problem is you talk it up too much and it doesn't deliver, or you | :07:43. | :07:46. | |
don't talk it up and people feel a complete lack of confidence in what | :07:46. | :07:51. | |
your Government is doing, you are between a rock and a hard place? | :07:51. | :07:56. | |
The most important thing to do is stick to the plans to deal with the | :07:56. | :07:58. | |
enormous budget deficit we inherited, that is securing the | :07:58. | :08:05. | |
lower interest rates in this country. Hold on. The austerity | :08:05. | :08:10. | |
package was dependant on a growth forecast of 2.6% in November 2010, | :08:10. | :08:14. | |
that is what George Osborne worked on. We haven't had growth of 2.6 | :08:14. | :08:18. | |
since. No wonder people are really worried about your ability to | :08:18. | :08:23. | |
calibrate what you should be doing in terms of cuts? The definite | :08:23. | :08:26. | |
reduction package was based on the clear and present danger to the UK | :08:26. | :08:29. | |
economy, when we came into office, we had the largest budgets deficit | :08:29. | :08:33. | |
in this country since the 1940s, worries about Britain's ability to | :08:33. | :08:38. | |
pay its way in the worpld. That is something we had to deal with for | :08:38. | :08:42. | |
economic growth in the country: so too is delivering many of the | :08:42. | :08:45. | |
things we have set out. The investment in infrastructure, | :08:45. | :08:48. | |
greater than Labour had planned during their time in office. The | :08:48. | :08:52. | |
reform of the planning system make as difference to business, the | :08:52. | :08:55. | |
support for exports, the rebalancing of the economy, that | :08:55. | :08:58. | |
became so feck cussed on financial services in the City of -- focused | :08:58. | :09:04. | |
on financial services in the City of London. Look at manufacturing, | :09:04. | :09:09. | |
and construction, dropping by 0.3%, this is an issue, if you want any | :09:09. | :09:13. | |
growth you have to get those sectors back on their feet again, | :09:13. | :09:16. | |
they are domestic. A lot of the problem is they are hanging on to | :09:16. | :09:21. | |
capital, they are not investing because they don't trust you. | :09:21. | :09:25. | |
listened to the British views of business and the Chamber of | :09:25. | :09:28. | |
Commerce, they are saying stick to the plans you set out. What about | :09:28. | :09:31. | |
Vince Cable saying you have a recipe for deficit but not growth? | :09:32. | :09:35. | |
The British business community is telling us those things, and it | :09:35. | :09:38. | |
backs our plans to invest in infrastructure, and it backs the | :09:38. | :09:44. | |
plans for business to help people to invest. It tells us to...Do | :09:45. | :09:48. | |
agree with your colleague, do you agree with your colleague? Let me | :09:48. | :09:50. | |
answer the question. I think we have set out a clear plan for | :09:50. | :09:54. | |
growth. It is not working? I'm sure in many areas there is more we can | :09:54. | :09:57. | |
do. We are investing more in the nation's infrastructure, we are | :09:57. | :10:00. | |
having the largest number of apprenticeships this country has | :10:00. | :10:04. | |
ever seen to raise the skills of the country. If there was a magic | :10:04. | :10:07. | |
wand to be waved overnight for politicians to deal with the | :10:07. | :10:10. | |
biggest economic problems this country has seen for many decades, | :10:10. | :10:13. | |
of course we would do. That the fact is, the deepest recession we | :10:13. | :10:18. | |
have had for very many decades, the worst financial crisis for many | :10:18. | :10:22. | |
decades. Idea this can be dealt with in the blink of the eye which | :10:22. | :10:26. | |
the opposition seems to suggest is not true. It is not a blink of an | :10:26. | :10:30. | |
eye, isn't it? There has been no growth for a year, yet there is no | :10:30. | :10:33. | |
question of revising anything, indeed you want to cut further, and | :10:33. | :10:37. | |
we must remember, of course, that the deficit reduction target is | :10:37. | :10:42. | |
offbeam as well, that will be a much longer problem than you | :10:42. | :10:45. | |
anticipated? In the Autumn Statement last year, in the budget | :10:45. | :10:49. | |
this year, we set out new plans for further investment in | :10:49. | :10:52. | |
infrastructure, getting pension funds invested in infrastructure in | :10:52. | :10:58. | |
this country. In the budget just passed, we set out further cuts to | :10:58. | :11:01. | |
co-operation tax, welcomed by business, we have reforms to the | :11:01. | :11:04. | |
plan system, we are making big changes to restore the | :11:04. | :11:08. | |
competitiveness of the UK economy. Ed Balls, the problem is, no matter | :11:08. | :11:12. | |
how bad it is, people don't trust you to fix it, because the last | :11:12. | :11:15. | |
Labour Government gave us the deepest recession this country has | :11:15. | :11:19. | |
ever had? In the end people listen to what you say, and they judge you | :11:19. | :11:23. | |
on results, and a year-and-a-half ago, David Cameron and George | :11:23. | :11:29. | |
Osborne said we have got a plan and it will work, we will get the | :11:29. | :11:32. | |
recovery moving, we will get unemployment and borrowing down. | :11:32. | :11:35. | |
Today it is clear, the plan has failed, we are back in recession, | :11:35. | :11:38. | |
and all we get from Danny is more of the same. Businesses and | :11:38. | :11:41. | |
families hearing that, thinking it is not working, we are just going | :11:41. | :11:46. | |
to carry on, it is a pity Danny wouldn't debate with me today. That | :11:46. | :11:51. | |
is pathetic, we need plans for jobs and growth, he needs to admit the | :11:51. | :11:56. | |
austerity is not working. We need to get the economy going, he has to | :11:56. | :12:00. | |
admit we were right to say going too far and too fast, this | :12:00. | :12:05. | |
austerity is not working. If Danny Alexander is insistent this plan | :12:05. | :12:09. | |
won't change, what is your plan, that will have to change, people | :12:09. | :12:12. | |
don't trust you, and your record proves you didn't handle the | :12:12. | :12:16. | |
economy very well? How arrogant and out-of-touch can you be to say when | :12:16. | :12:21. | |
you demonstrate it your plan is not working, we will just carry on, | :12:21. | :12:26. | |
people will be dismayed. It is not working, austerity, in Italy or | :12:26. | :12:30. | |
Spain, in America, a more balanced plan, a jobs plan, their economy is | :12:30. | :12:34. | |
growing. You want more stimulus? need plan for jobs and growth. | :12:34. | :12:37. | |
Absolutely, I have said consistently for 18 months, there | :12:37. | :12:41. | |
should be a plan for jobs and growth. A year-and-a-half ago, | :12:41. | :12:46. | |
Danny Alexander, George Osborne and David Cameron said we don't need it, | :12:46. | :12:51. | |
our plan will work. Their plan has failed, cat grorically, they can't | :12:51. | :12:55. | |
blame anyone -- categorically, they can't blame anyone else, it was | :12:55. | :12:58. | |
made by Cameron and Osbourne and they need to do something about it. | :12:58. | :13:01. | |
There are more cuts in the pipeline, Danny Alexander announced this week | :13:01. | :13:05. | |
that he would be looking for a further 5% from additional | :13:05. | :13:10. | |
departments which would reach �16.3 savings, Ed Miliband said if there | :13:10. | :13:13. | |
was an election tomorrow, he would reinstate the 50p tax band. If | :13:13. | :13:16. | |
there was an election tomorrow, in the light of the recession, would | :13:16. | :13:23. | |
you recertificates the cuts? Right now, -- reverse the cuts? Right now | :13:23. | :13:33. | |
:13:33. | :13:38. | ||
we would go to a more balanced plan, cut VAT, we we have different cuts. | :13:38. | :13:41. | |
What different departmental cuts would you make? We set out spending | :13:41. | :13:45. | |
cuts and tax rises, a more balanced plan. They said they would go | :13:45. | :13:49. | |
faster, they said it would work, and it has failed. The economy is | :13:49. | :13:53. | |
in recession, borrowing is �150 billion higher, we need plan for | :13:53. | :13:56. | |
jobs and growth right now. But the rest of the cuts in the pipeline | :13:56. | :14:00. | |
for the Government putting forward, the rest of the cuts in different | :14:00. | :14:03. | |
departments, you would keep, you wouldn't reverse those? I can't | :14:03. | :14:09. | |
tell you where we will be at 2015. Ed Miliband was happy to tell us | :14:09. | :14:12. | |
what he would do if there was an election today? I can't tell you | :14:12. | :14:17. | |
other than the fact we will be clearing up George Osborne. Now, | :14:17. | :14:21. | |
today, Ed Balls, it is not hypothetical, if you were to take | :14:21. | :14:26. | |
over tomorrow, what would you do? five-point plan for jobs and growth, | :14:26. | :14:32. | |
we would move to a steadier pace of definite reduction, we would copy | :14:32. | :14:36. | |
America not the eurozone. We had a more balanced plan, George Osborne | :14:36. | :14:39. | |
said he would cut faster, and he's borrowing more than our plan, | :14:39. | :14:43. | |
because of his failure. If the economy is failing, if the plan is | :14:43. | :14:47. | |
failing, it is arrogant to plough on, it is out-of-touch. Thank you | :14:47. | :14:51. | |
very much. Yesterday, from the Leveson Inquiry, | :14:51. | :14:55. | |
came the revelations about the Culture Secretary, Jeremy Hunt, and | :14:55. | :15:00. | |
his links with Rupert Murdoch's BSkyB. Cue the ministerial fight | :15:00. | :15:03. | |
for survival, with the Prime Minister expressing full confidence | :15:03. | :15:09. | |
in him. His confession over the candid e-mail sent by an adviser to | :15:09. | :15:13. | |
News International, and pressure forced an emergency statement in | :15:13. | :15:20. | |
the House. An hour or so his aide, Adam Smith, had resigned for "going | :15:20. | :15:24. | |
too far". Is everything cleared up? Oh no. | :15:24. | :15:30. | |
Government has felt it to be the cruelest month, their budget had | :15:30. | :15:35. | |
inadvertantly picked a fight with grannies, charities, conservatory | :15:35. | :15:38. | |
owners, caravan owners, even churches, as quintessentially | :15:39. | :15:42. | |
British as the pouring rain. But Downing Street insisted it was | :15:42. | :15:46. | |
temporary, and knew better events would arrive, resetting the course. | :15:46. | :15:50. | |
New events have come along, many of them, they are not the right sort | :15:50. | :15:55. | |
of new events. Over Tuesday night and into the | :15:55. | :15:57. | |
morning, the popular Culture Secretary had looked like he might | :15:57. | :16:02. | |
be drowned by a dossier of e-mails that had emerged at the Leveson | :16:02. | :16:08. | |
Inquiry. They suggested an improper intimacy surrounding his handling | :16:08. | :16:13. | |
of the Murdoch bid to take over BSkyB. By the next morning, Lord | :16:13. | :16:18. | |
Justice Leveson had intervened himself to urge caution with his | :16:18. | :16:22. | |
inquiry's evidence. I'm acutely aware from considerable experience, | :16:22. | :16:27. | |
that documents such as these cannot always be taken at face value. | :16:27. | :16:33. | |
Things moved fast this morning, within moments of the bad GDP | :16:33. | :16:39. | |
figures coming out, Adam Smith, Jeremy Hunt's adviser had resigned, | :16:39. | :16:43. | |
and there was an urgent statement in the House of Commons. By the end | :16:43. | :16:48. | |
of the morning, there would be admissions of seeing Swan Lake. | :16:48. | :16:51. | |
Grabbing a swift chat with Jeremy Hunt at the ballet was one of the | :16:51. | :16:56. | |
bogus claims made. Jeremy Hunt's team said. He saw Swan Lake all | :16:56. | :17:01. | |
right, just five days later. Inaccurate details there may be, | :17:01. | :17:06. | |
the leader of the opposition said, but there were also plenty of | :17:06. | :17:09. | |
accurate ones. Lord Justice Leveson is responsible for a lot of things, | :17:09. | :17:12. | |
but he's not responsible for the integrity of the Prime Minister's | :17:12. | :17:18. | |
Government. In case he has forgotten, that is his | :17:18. | :17:20. | |
responsibility as the Prime Minister. Two days before the | :17:20. | :17:25. | |
statement to the House, on the 25th of January, the Culture Secretary's | :17:25. | :17:28. | |
office was not only including with News Corporation, to provide them | :17:28. | :17:33. | |
with information in advance, they were hatching a plan to ensure, and | :17:33. | :17:38. | |
I quote, "it would be game over for the opposition to the bid". Does | :17:38. | :17:42. | |
the Prime Minister really believe that is how a judge and his | :17:42. | :17:46. | |
advisers are supposed to act? Later, in his statement, Jeremy | :17:46. | :17:52. | |
Hunt sought to show he had been so scruplous, as to even snub News | :17:52. | :17:59. | |
Corporation. I took four decisions in this process, each of those | :17:59. | :18:01. | |
decisions was against what News Corporation wanted. The first | :18:01. | :18:06. | |
decision that I took, well no, if you're making a very serious | :18:06. | :18:10. | |
allegation, that I was supporting this bid and not acting quasi- | :18:10. | :18:15. | |
judicially, you do at least have to listen to the evidence of what | :18:15. | :18:19. | |
happened. It would be a question from an MP on his own side that | :18:19. | :18:23. | |
would prove most tricky. The only thing I think affects parliament is | :18:23. | :18:26. | |
the allegation from the honourable lady opposite, that a statement to | :18:26. | :18:32. | |
parliament was leaked in advance. There are allegations in an e-mail | :18:32. | :18:36. | |
that did not happen, I'm not able to come to the House today and say | :18:36. | :18:46. | |
:18:46. | :18:47. | ||
what the truth was, or otherwise, of the comoun Kay of the account of | :18:47. | :18:50. | |
the conversation with Frederic Michel, which we know contained a | :18:50. | :18:54. | |
number of exaggerations, that is why we have Lord Leveson looking | :18:54. | :18:57. | |
into the whole matter. Now the question is whether the resignation | :18:57. | :19:01. | |
of a special adviser can really be the end of it. The House is being | :19:01. | :19:05. | |
invited to believe that either the relationship between the Secretary | :19:05. | :19:08. | |
of State and Adam Smith was to dysfuntional that the Secretary of | :19:08. | :19:12. | |
State was unaware of the extent and nature of the communication between | :19:12. | :19:16. | |
Adam Smith and News Corporation, or, that it was a good relationship, in | :19:16. | :19:20. | |
which case, the Secretary of State must, as the code of Connelly duct | :19:20. | :19:24. | |
says, take full responsibility. special adviser has resigned, but | :19:24. | :19:31. | |
does it cauterise the wound. Many people think the way a cabinet | :19:31. | :19:35. | |
minister and special adviser relationship works, is the special | :19:35. | :19:38. | |
adviser knows before the minister has thought it, what he's thinking, | :19:38. | :19:43. | |
and the special adviser in the room is as good as the minister there, | :19:43. | :19:47. | |
otherwise why is it a good use of another person's time. Adam Smith | :19:47. | :19:51. | |
resigning is flying in the face of how many people think the system | :19:51. | :19:55. | |
works. Tonight, shadow Culture Secretary, Harriet Haman, has | :19:55. | :20:00. | |
written to the Prime Minister, asking for Jeremy Hunt to be | :20:00. | :20:04. | |
disciplined for breaking the Code of Conduct. This asks a minister to | :20:04. | :20:06. | |
take responsibility for his special adviser. In order to get through | :20:06. | :20:10. | |
the last 24 hours, the Government have escalated the importance of | :20:10. | :20:13. | |
Jeremy Hunt's appearance in front of Lord Leveson. They may have | :20:13. | :20:17. | |
bought the minister more time, but it does now make the Leveson | :20:17. | :20:21. | |
Inquiry much more political. Lord Justice Leveson will be pronounced | :20:21. | :20:25. | |
on a cabinet minister's career. Ahead there is as much of two | :20:26. | :20:29. | |
months of political testimony, before Lord Justice Leveson, | :20:29. | :20:33. | |
politics, like our weather, will be unpredictable. | :20:33. | :20:36. | |
Earlier tonight I spoke to Jeremy Hunt's cabinet colleague, Andrew | :20:36. | :20:40. | |
Mitchell. Andrew Mitchell, yesterday the | :20:41. | :20:44. | |
Government said the permanent secretary had cleared Adam Smith to | :20:44. | :20:48. | |
speak to News Corporation, today Adam Smith resigned what did he do | :20:48. | :20:53. | |
that was wrong? He said himself that he had exceeded his brief, and | :20:53. | :21:01. | |
he resigned. That was the right thing to do. Was it, do you think, | :21:01. | :21:04. | |
the disclosure of contents of a parliamentary statement to News | :21:04. | :21:06. | |
Corporation before that statement was released to MPs, was that | :21:06. | :21:10. | |
something he did wrong? We must be clear about what the evidence is. | :21:10. | :21:14. | |
We will be clear about what the evidence is, when Jeremy Hunt gives | :21:14. | :21:20. | |
his evidence to Lord Leveson. was clear from the e-mails? | :21:20. | :21:24. | |
absolutely clear is the special adviser -- what is absolutely clear | :21:24. | :21:27. | |
is the special adviser was the point man and that was agreed with | :21:27. | :21:32. | |
the permanent secretary. If there was a disclosure, as is clear in | :21:32. | :21:36. | |
the e-mails, of contents of parliamentary statement to News | :21:36. | :21:39. | |
Corporation before MPs, that is a breach of the minutes tearal code, | :21:39. | :21:42. | |
and as such, Jeremy Hunt would have to resign, wouldn't he? First of | :21:42. | :21:46. | |
all, that is not clear. We need to have a much more detailed, and hear | :21:46. | :21:50. | |
both sides of the case, in respect of the e-mails and everything else. | :21:50. | :21:56. | |
Secondly, there have been special advisers who have had to revise, | :21:56. | :22:00. | |
resign before, and they haven't taken their boss with them, for | :22:00. | :22:04. | |
example Damian McBride resigned, I don't remember Gordon Brown going. | :22:04. | :22:07. | |
Under the ministerial code, we are talking about the Conservatives | :22:07. | :22:12. | |
here, the coalition here, under the ministerial code, ministers must | :22:12. | :22:18. | |
take responsibility for the actions of the special advisers, if Jeremy | :22:18. | :22:22. | |
Hunt was to act honourably, under the ministerial code, he would | :22:22. | :22:26. | |
resign? I don't agree either that it is the ministerial code that has | :22:26. | :22:30. | |
become broken. All these things will be dealt with by the Leveson | :22:30. | :22:33. | |
Inquiry. It is right and proper, particularly in Britain, that we | :22:33. | :22:36. | |
hear both side of the case. That is why Jeremy Hunt asked his evidence | :22:36. | :22:40. | |
to be brought forward, and Lord Leveson has agreed it should be. | :22:40. | :22:43. | |
The Home Secretary, Theresa May, made it quite clear on the question | :22:43. | :22:47. | |
of the dates, for the Abu Qatada appeal, if any of her officials | :22:47. | :22:51. | |
made a mistake, it was her responsibility. She said clearly it | :22:51. | :22:55. | |
is her responsibility. Surely that should be the line of every member | :22:55. | :22:59. | |
of the cabinet. I don't believe that a cabinet minister can be | :22:59. | :23:02. | |
responsible for every single action. So she's wrong. That their special | :23:02. | :23:08. | |
adviser takes. So she's wrong? had the President of Stephen Byers | :23:08. | :23:12. | |
and Gordon Brown on exactly that point. You take the precedent of | :23:12. | :23:16. | |
Gordon Brown for another party as your defence, as the human shield? | :23:16. | :23:20. | |
I don't think it is remotely possible or practical to suggest | :23:20. | :23:23. | |
that Jeremy Hunt can take responsibility for behaviour he did | :23:23. | :23:27. | |
not know about when he did know about it and discovered about it | :23:27. | :23:31. | |
this morning, is his special adviser resigned. This special | :23:31. | :23:35. | |
adviser had a relationship, an inappropriate relationship, if we | :23:35. | :23:41. | |
are to believe the e-mails, with News Corporation. There was no such | :23:41. | :23:45. | |
conversation taking place with any of the opposition group, to the | :23:45. | :23:48. | |
News Corp takeover. There was no special adviser, there was no lines | :23:48. | :23:52. | |
of communication like that. That in itself is simply wrong, it is black | :23:52. | :23:56. | |
and white, it is wrong. I don't agree, the whole reason why the | :23:56. | :24:02. | |
special adviser was appointed to act as a link with News Corp, in a | :24:02. | :24:06. | |
process approved by the permanent secretary, was because in these | :24:07. | :24:09. | |
circumstances, it is right that there should be some contact. He | :24:10. | :24:15. | |
was the appointed piorn to carry it out. There is nothing -- person to | :24:15. | :24:19. | |
carry that out. There is nothing exceptional in that. Jeremy Hunt | :24:19. | :24:22. | |
took parliament through the four decisions he did make, today, | :24:23. | :24:30. | |
acting in his quasi-judicial role, none of them related today News | :24:30. | :24:35. | |
Corp. Just to be clear, in your view, it is perfectly acceptable, | :24:35. | :24:39. | |
for News Corp to have a special relationship with a special adviser, | :24:39. | :24:44. | |
but not for the opposition, who did not want the News Corp takeover to | :24:44. | :24:48. | |
have a relationship with a special adviser? There were links with many | :24:48. | :24:52. | |
people. There was a process called for that took evidence in huge | :24:52. | :24:55. | |
numbers from those who did not want the process to proceed. But the | :24:55. | :24:59. | |
point which I'm making is the special adviser exceeded his brief, | :24:59. | :25:04. | |
that is why he has resigned. But I think the matter end there until we | :25:04. | :25:08. | |
hear from the inquiry and from Jeremy Hunt's evidence to Lord | :25:08. | :25:11. | |
Leveson. Thank you very much. | :25:11. | :25:14. | |
After the bombshell detonated by the resignation of Jeremy Hunt's | :25:14. | :25:19. | |
special adviser, following the revelation of the inappropriate e- | :25:19. | :25:23. | |
mails, it was the turn of the News Corp boss, the world's most | :25:23. | :25:27. | |
powerful media mogul, to take the oath and say more than we have ever | :25:27. | :25:31. | |
heard from Rupert Murdoch, in his 80 years. He was derped to do two | :25:31. | :25:35. | |
things, to skwhrund play his influence in the political -- to | :25:35. | :25:38. | |
underplay his influence in the politic skal sphere, and to settle | :25:38. | :25:43. | |
a few scores, not least with Gordon Brown. | :25:43. | :25:46. | |
Only the Queen has had more facetime with more prime ministers. | :25:46. | :25:50. | |
Over more than 40 years, a parade of politicians has presented | :25:50. | :25:56. | |
themselves for Murdoch approval, hoping for an endorsement, a fair | :25:56. | :26:02. | |
wind, that, Mr Murdoch told the inquiry today, is the game. A game | :26:02. | :26:12. | |
:26:12. | :26:12. | ||
he clearly relishes. I enjoy meeting them. It is our leaders. | :26:12. | :26:16. | |
Some impress me more than others. Into that catagory falls Mrs | :26:16. | :26:22. | |
Thatcher, he's still an admirer. Let's say John Major, who despite | :26:22. | :26:25. | |
many meetings, Mr Murdoch can't recall a single word of | :26:25. | :26:28. | |
conversation. All politicians wanted his support, but time and | :26:28. | :26:31. | |
again Mr Murdoch rejected any suggestion that he asked for | :26:31. | :26:36. | |
commercial favours in return. want to put it to bed once and for | :26:36. | :26:43. | |
all, that is a complete myth. is the myth, Mr Murdoch. That I | :26:43. | :26:51. | |
used the influence of the Sun, or the supposed political power to get | :26:51. | :26:53. | |
favourable treatment. What interested Mr Murdoch, he said, | :26:53. | :26:58. | |
were the issues, like the euro, a whole evening spent debating this | :26:58. | :27:02. | |
with Tony Blair, who was in favour, Mr Murdoch, dead set against. Tony | :27:02. | :27:07. | |
Blair worked hard for the Sun's endorsement in 1977, but, again, | :27:07. | :27:11. | |
the question, what was the price? in ten years of his power there, | :27:11. | :27:16. | |
never asked Mr Blair for anything. Nor indeed did I receive any | :27:16. | :27:22. | |
favours. If you want to check that, you should call him. Mr Murdoch | :27:22. | :27:25. | |
admitted stewarding the Sun's editoral line, other papers had | :27:26. | :27:30. | |
more freedom, but, he said, he loved papers and discussing stories | :27:30. | :27:33. | |
with journalists. I'm a curious person, who is interested in the | :27:34. | :27:41. | |
great issues of the day. I'm not good at holding my tongue. | :27:41. | :27:44. | |
As former Sun editor, Kelvin MacKenzie found out, Mr Murdoch | :27:44. | :27:49. | |
said he didn't much like the paper's famous verdict on the 1992 | :27:49. | :27:54. | |
election, and communicated his displeasure. My son, who is here | :27:54. | :27:58. | |
today, and was apparently beside me, said I did indeed give him a hell | :27:59. | :28:04. | |
of a bollocking. That is very frank, Mr Murdoch. But | :28:04. | :28:12. | |
the point may be this, that you would not want it to appear that | :28:12. | :28:15. | |
newspapers did have this influence over voters, because that might be | :28:15. | :28:21. | |
said to be anti-democratic. I think using "democratic" is too strong a | :28:21. | :28:25. | |
word. I thought it was tasteless and wrong for us. It was wrong, in | :28:25. | :28:30. | |
fact, we don't have that sort of power. What the Sun gives, the Sun | :28:30. | :28:34. | |
can take away. As Gordon Brown found out in September 2009, when | :28:34. | :28:38. | |
the newspaper switched its support to the Conservatives. Mr Murdoch | :28:38. | :28:47. | |
says Gordon Brown phoned him and made a quiet threat. He said, well, | :28:47. | :28:52. | |
your company has, declared war on my Government, and, we have no | :28:52. | :28:56. | |
alternative but to make war on your company. | :28:57. | :29:00. | |
I said I'm sorry about that Gordon, thank you for calling, end of | :29:00. | :29:06. | |
subject. How could Mr Brown have declared | :29:06. | :29:11. | |
war on your company? I don't know, I don't think he was in a very | :29:11. | :29:15. | |
balanced state of mind. Mr Brown has tonight issued a statement | :29:15. | :29:19. | |
denying that any such conversation took place. And what of the man | :29:19. | :29:22. | |
whom the Sun transferred his support to, David Cameron, well | :29:22. | :29:28. | |
it's too early, says Mr Murdoch, to decide if he is a lightweight. He | :29:28. | :29:34. | |
does dimly remember Mr Cameron interrupting a holiday in 2008, to | :29:34. | :29:39. | |
fly out to the Murdoch yacht in Santorini. Perhaps, he said, Mr | :29:39. | :29:46. | |
Cameron wanted to impress him. Someone who has impressed is Alex | :29:46. | :29:49. | |
Salmond. I don't know Mr Salmond well, he as an amusing guy, and I | :29:49. | :29:53. | |
enjoy his company. On his own account, Mr Murdoch is merely an | :29:53. | :29:57. | |
interested newspaper man, driven by political ideals, rather than | :29:57. | :30:00. | |
commercial advantage. If, through the years, the politicians have | :30:00. | :30:08. | |
overestimated his power, well, it's not his fault, is it? What exactly | :30:08. | :30:12. | |
was Rupert Murdoch's relationship with the political elite, and what | :30:12. | :30:16. | |
influence did he exert. Watching his former boss at the Leveson | :30:17. | :30:20. | |
Inquiry was Neil Wallis, the former deputy editor and executive editor | :30:20. | :30:25. | |
of the News of the World. He's on police bail as part of the phone | :30:25. | :30:27. | |
hacking investigation, he cannot ask questions in relation to that | :30:27. | :30:31. | |
investigation. He joins me now. What did you make of Rupert | :30:31. | :30:35. | |
Murdoch's demeanor today, he seemed to be playing himself down a bit? | :30:35. | :30:40. | |
He was certainly doing that. It wasn't the Rupert Murdoch that I | :30:40. | :30:47. | |
was expecting. I don't think anybody was. He played a cuddly, | :30:47. | :30:52. | |
"what me?" role today. It wasn't a Rupert Murdoch that I particularly | :30:52. | :30:58. | |
recognise. It was good acting? I think he brought himself into a | :30:58. | :31:05. | |
role. In a sense, you might say, News Corp is going down and taking | :31:05. | :31:09. | |
politicians with them. We will talk broadly about his attitude to | :31:09. | :31:12. | |
politics, on the question of Gordon Brown, that was a direct hit, | :31:12. | :31:18. | |
wasn't it? Deadly, I thought. I mean, I had heard that story well | :31:18. | :31:21. | |
over a year ago. It surfaced somewhere about three month ago, I | :31:21. | :31:27. | |
think. But that story is extremely well known. And partly it came out. | :31:27. | :31:30. | |
Gordon Brown has denied tonight that was a Conservatives. So I | :31:30. | :31:35. | |
gathered. Partly the reason it was told, was because of Mr Murdoch's | :31:35. | :31:39. | |
genuine upset that he has fallen out with a guy whom he genuinely | :31:39. | :31:45. | |
admired a lot. Interestingly, at that moment, was that a flash of | :31:45. | :31:50. | |
the role hard-nosed Rupert Murdoch making that attack? What I saw | :31:50. | :31:53. | |
there, in particularly the phrasology of thank you for the | :31:53. | :32:00. | |
call, I thought what you -- phraseyology, of thank you for the | :32:00. | :32:04. | |
call, and it was like, if that is business, we will fight like that. | :32:04. | :32:09. | |
Tell us how he calibrated his relationship with other politicians, | :32:09. | :32:15. | |
everybody was flocking, Tony Blair, David Cameron? In the introduction, | :32:15. | :32:19. | |
you said Rupert Murdoch wielded his power, he didn't need to wield his | :32:19. | :32:23. | |
power. In my experience, I have worked for him for about 20 years, | :32:23. | :32:28. | |
ten years of that at a senior level. Politicians crawled over broken | :32:28. | :32:31. | |
glass to see Rupert Murdoch. Rupert Murdoch didn't have to ring them, | :32:31. | :32:36. | |
they were lining up round the block. How do you judge the relationship, | :32:36. | :32:40. | |
for example, with someone like David Cameron? Well, Mr Murdoch was | :32:40. | :32:44. | |
never that impressed by David Cameron. I remember being at a | :32:44. | :32:47. | |
dinner in which, this was while he was still in the opposition, and | :32:47. | :32:51. | |
they had met at the understand gaigs of somebody else who was at | :32:51. | :32:55. | |
the table -- instigation of somebody else at the table. It was | :32:55. | :33:00. | |
very clear he was pretty unimpressed, and the feeling was | :33:00. | :33:04. | |
that there was disappointment about how little Cameron had impressed | :33:04. | :33:09. | |
him. So, moving on to his own role, his close role, would you say, with | :33:09. | :33:13. | |
his papers. He said that really, if you want his view, you can read it | :33:13. | :33:21. | |
in the Sun editoral. Was he pretty closely involved? In my time, | :33:21. | :33:28. | |
particularly at the Sun, enormously. One of the issues, in my view, | :33:28. | :33:31. | |
happening with News International, is this business has exploded over | :33:31. | :33:37. | |
the years, and he has less involvement with the papers. My | :33:37. | :33:41. | |
experience is more Rupert, better papers. Where the Sun is concerned, | :33:41. | :33:45. | |
that is absolutely true. The Sun is the thing he really loves, he loves | :33:45. | :33:49. | |
the Times as well. He loses millions on it. He's telling the | :33:49. | :33:55. | |
truth when he says, if you want to know what Rupert thinks, read the | :33:55. | :34:00. | |
Sun leaders. There was talk of him being the master of the universe, | :34:00. | :34:04. | |
he was deciding the papers' editoral line? It didn't really | :34:04. | :34:09. | |
work like that. If you go and work for the Sun, you know what you are | :34:09. | :34:14. | |
getting into. This is a populist, hard-hitting, right of centre, | :34:14. | :34:19. | |
newspaper. Now what I did think was interesting today, I understood why | :34:19. | :34:24. | |
he used the word "independent", Rupert was not party political. The | :34:24. | :34:28. | |
best way to describe him was he was a populus, he was a man, despite | :34:28. | :34:33. | |
his incredible wealth, had a distinctive understanding of the | :34:33. | :34:38. | |
common man. Under him, people like yourself felt you could get to any | :34:38. | :34:42. | |
politician or chief police officers, it was the Murdoch calling card? | :34:42. | :34:45. | |
think working for the Sun, or working for the News of the World, | :34:46. | :34:50. | |
which, of course, was owned by Mr Murdoch. But the truth is, these | :34:50. | :34:54. | |
were small papers, the Sun was virtually broke, less than a | :34:54. | :34:57. | |
million selling. He took it over, his genius for mass communication, | :34:57. | :35:01. | |
meant it was something you could not ignore. The interesting thing | :35:01. | :35:05. | |
is, we will all be watching with baited breath, because he's back | :35:05. | :35:09. | |
tomorrow. Will we get a sense tomorrow, do you think, of hoi | :35:09. | :35:15. | |
Leveson himself, even change -- the whole question of Leveson might | :35:15. | :35:20. | |
change the relationship between politicians and media magnates. | :35:20. | :35:25. | |
whole question of Leveson in where the press is going, I think there | :35:25. | :35:30. | |
is always something called Leveson's Law, I think that is | :35:30. | :35:33. | |
already damaging the effectiveness of the press. It is damaging. You | :35:33. | :35:37. | |
think it is for ill rather than good? Yes, I think politicians are | :35:37. | :35:41. | |
terrified now to talk to people they are desperate to speak to. | :35:41. | :35:46. | |
Just before we finish, should we be looking out for slightly more ever | :35:46. | :35:54. | |
so humble, or is there some exorates from Rupert Murdoch | :35:54. | :35:56. | |
tomorrow? I suspect he will have more to give. | :35:56. | :35:59. | |
Back to the recession and the news that the UK has hit a double-dip | :35:59. | :36:03. | |
would not have come so much as a surprise to the people of South | :36:03. | :36:07. | |
Wales, where unemployment is up to 25% in some part. There the green | :36:07. | :36:12. | |
shoots of recovery have been rarer than hen's teeth. Joe Lynam spent | :36:12. | :36:22. | |
:36:22. | :36:23. | ||
the day there. Bridgend, home to the inventor of | :36:23. | :36:26. | |
X-raying, supersonic travel and Richard Burton, is doing better | :36:27. | :36:33. | |
than the rest of the Wales. However this industrial estate has lots of | :36:33. | :36:38. | |
empty space. Sony moved out, it used to make TVs. Future growth | :36:38. | :36:44. | |
might come from making Biotechling to or life sciences. This company, | :36:44. | :36:48. | |
conveniently called Biotec, processes and packaging and | :36:48. | :36:52. | |
clinical trials for the big pharmacological giants. The | :36:52. | :36:55. | |
Government wants to see more like them. It is one of the areas that | :36:55. | :37:00. | |
will drive the economy forward in Wales. The Welsh Government have | :37:00. | :37:04. | |
recently released �100 million funding into that sector. Wales has | :37:04. | :37:08. | |
been strong in terms of research and innovation, probably not too | :37:08. | :37:12. | |
strong in terms of commercialisation, especially in | :37:12. | :37:16. | |
the Biotech sector, in terms of getting the product from research | :37:16. | :37:21. | |
and Government to market. If you can get a decent supply of | :37:21. | :37:28. | |
pharmacists and Biotech nigss, because Bridgend is in the M4 | :37:28. | :37:33. | |
corridor, stretching from Swansea to Newport. It has the best roads, | :37:33. | :37:38. | |
universities and railways and broadband in the UK. These places | :37:38. | :37:45. | |
can attract talent and capital. Further into the valleys that | :37:45. | :37:54. | |
attractiveness withers. Blaun a new gent has unemployment of 25%. PMB, | :37:54. | :37:59. | |
the plastics manufacturer can't compete with wage rises in line | :37:59. | :38:06. | |
with inflation. One of our guys came to work and said I come to | :38:06. | :38:13. | |
stay sane, the wages compete with benefits. We awarded a 2% pay rise | :38:13. | :38:17. | |
this year. The answers I got back from staff is inflation is running | :38:17. | :38:21. | |
higher than that, the gas bills are through the roof, and we can't | :38:21. | :38:26. | |
afford rates and to live. We have always been in a recession. That is | :38:26. | :38:30. | |
the feeling you get from talking to people around the area. There has | :38:30. | :38:34. | |
been signs or messages that we might be coming out of it, or just | :38:34. | :38:39. | |
about coming out of it. But we have always been in it. On the ground | :38:39. | :38:45. | |
this shrinking has continued? 30 years ago this was home to one | :38:45. | :38:47. | |
of the largest steel factories in Britain, employing most of the | :38:47. | :38:53. | |
people around here and the hinterland, the steel factory has | :38:53. | :38:58. | |
long since gone, and left unemployment, low educational | :38:59. | :39:01. | |
attainment and low life expectancy. Given the opportunity of creating | :39:02. | :39:07. | |
the type of jobs that they had three decades ago, and it has | :39:07. | :39:10. | |
passed, local authorities here are in the business of managing decline. | :39:10. | :39:17. | |
What sort of improvements in productivity can you investment in | :39:17. | :39:20. | |
to enable to have jobs elsewhere in Wales. At the moment it takes an | :39:20. | :39:24. | |
hour to get from Cardiff to here. If I was living in the south-east, | :39:24. | :39:28. | |
there would be a fast journey from here to the centre that would take | :39:28. | :39:32. | |
20 minutes, we have to investment in that sort of -- invest in that | :39:32. | :39:37. | |
sort of thing to manage decline, so people might not live in places but | :39:37. | :39:43. | |
might not live in those places. GDP numbers are out, it seems to | :39:43. | :39:46. | |
suggest the construction sector dragged the UK economy back into | :39:46. | :39:49. | |
recession, how does that play nationally, and more legally here | :39:49. | :39:56. | |
in Wales? I think the construction sector has reined back in, there | :39:56. | :40:00. | |
has been a significant reduction in going forward. You can look at that | :40:00. | :40:04. | |
in terms of the impact of the public sector cuts, in terms of | :40:04. | :40:07. | |
transport infrastructure, health and education, all starting to come | :40:07. | :40:10. | |
back again. At the moment the private sector is not going forward | :40:10. | :40:14. | |
in that area. Wales should be well placed to benefit from rebalancing | :40:14. | :40:17. | |
of the UK economy, away from consumption, and towards | :40:17. | :40:22. | |
manufacturing, in reality, though, its best hope is to create high- | :40:22. | :40:26. | |
value, low-intensity jobs, like Biotec, but talent and remoteness | :40:26. | :40:30. | |
don't always go together. With me to explain how we got into | :40:30. | :40:34. | |
this mess and how we should get out of it, is Martin Bashir, the | :40:34. | :40:44. | |
:40:44. | :40:44. | ||
general secretary of the trades union -- Brendan Barber, a venture | :40:44. | :40:49. | |
capitalist John molten to, chairman of Better Capital. Let's get | :40:49. | :40:54. | |
ourselves out of had this mess in the next few minutes. First of all, | :40:54. | :40:58. | |
your analysis of why the growth predirections were wrong, Kate? | :40:58. | :41:02. | |
growth comes that came out today were a bid odd. A lot of people | :41:02. | :41:07. | |
have been looking at the construction numbers, and been | :41:07. | :41:11. | |
puzzled, the service sector, the big disappointment, you look at | :41:11. | :41:14. | |
retail sales, they have been strong. You look at the other surveys, and | :41:14. | :41:17. | |
they have been strong. I don't think that is the point. I don't | :41:17. | :41:21. | |
think today's numbers are the point. The real point is, we don't seem to | :41:21. | :41:25. | |
be getting back any time soon to the kind of sustained growth rate | :41:25. | :41:30. | |
that deliver the things that people really care about, which is grot | :41:30. | :41:33. | |
growth in -- growth in jobs and real incomes, that is more | :41:33. | :41:38. | |
important than the figures going up or down today. It suggests that the | :41:38. | :41:43. | |
austerity package, as one might put it, simply isn't working? | :41:43. | :41:46. | |
certainly isn't. You can't say the economy is thriving, it certainly | :41:46. | :41:52. | |
is not. The question is, what do you do about it, do you put | :41:52. | :41:56. | |
financial stimulus in, or as was said earlier, a senior Tory coming | :41:56. | :42:00. | |
out and saying we have to go at it, harder and faster? One of the big | :42:00. | :42:05. | |
causes of low growth, that won't go away, is the size of the public | :42:05. | :42:10. | |
sector. The economy is 48% public sector. And basically, in the last | :42:10. | :42:18. | |
few years we have gone from 37 to 48, every per cent takes away 0.12 | :42:18. | :42:24. | |
per cent of the growth in the economy. 48 take away 37, 11, | :42:24. | :42:31. | |
multiply it up. Something like 1.5% comes off growth rate. We won't | :42:31. | :42:34. | |
grow quickly until we cut the public sector. If we have no growth, | :42:34. | :42:38. | |
the only way to cut the public sector, is harder austerity, with | :42:38. | :42:45. | |
all the pain that gives. That's short-term pain, long-term gain. | :42:45. | :42:48. | |
Are you prepared for short-term pain in the public sector for long- | :42:48. | :42:52. | |
term gain? We are seeing a lot of pain in the public and private | :42:52. | :42:55. | |
sector. In terms of the squeeze on the public sector, the forecast is | :42:55. | :42:59. | |
now for over 700,000 jobs to be taken out of the public sector, | :42:59. | :43:05. | |
over this next forecast period. This strategy isn't delivering, it | :43:05. | :43:10. | |
is demonstrably not delivering. We see now the double-dip recession | :43:10. | :43:16. | |
that we forecast and many people scoffed. A year or so back, when we | :43:16. | :43:20. | |
said it was a real possibility. And other countries are not enduring | :43:20. | :43:23. | |
the same degree of economic hardship that we are being forced | :43:23. | :43:27. | |
to go through. Some eurozone countries are? Some are. Waugh bu | :43:27. | :43:33. | |
what about John Molton. What about the United States. There is a lot | :43:33. | :43:37. | |
more pain after the next election there? They have recovered all the | :43:37. | :43:41. | |
loss to the economy over the recession period, their economy is | :43:41. | :43:48. | |
1% bigger than pre-recession. We are still over 4% smaller. What do | :43:48. | :43:52. | |
you make of the point that putting aside the fact that these are real | :43:52. | :43:57. | |
people, 600,000 people, but if you don't radically reduce your public | :43:57. | :44:03. | |
sector, we won't get back to growth? I think this is a totally | :44:03. | :44:06. | |
false prospectus. We are seeing huge cuts in public spending, those | :44:06. | :44:11. | |
cuts are not only hitting the public sector and public services, | :44:11. | :44:14. | |
they are hitting the private sector hard too. You take the construction | :44:14. | :44:16. | |
industry, one of the first decisions the Government made in | :44:17. | :44:22. | |
their first budget, was to cut billions out of the schools' | :44:22. | :44:25. | |
building programme, building schools for the future. The | :44:25. | :44:29. | |
consequences of that decision are now being seen in the state of our | :44:29. | :44:32. | |
construction industry. Isn't it a problem, although it was said that | :44:32. | :44:36. | |
you have to cut back the public sector, the problem is, that | :44:36. | :44:42. | |
requires, I assume what you mean, the private sector to take up the | :44:42. | :44:48. | |
slack and grow? In due course. can't be that, we are seeing | :44:48. | :44:53. | |
shrubishness in the private sector and they are reluctant to take up | :44:53. | :44:55. | |
the slack? That is hardly surprising, they are looking into a | :44:55. | :45:00. | |
few years, this is true, there is no point getting around it, that | :45:00. | :45:03. | |
the banks will continue to deleverage, and the public sector | :45:03. | :45:07. | |
will shrink, that buys a lot from the private sector. They are | :45:07. | :45:11. | |
interrelated, you can't talk to one without the other. We have seen | :45:11. | :45:15. | |
energy prices rising, and we have a eurozone situation bringing great | :45:15. | :45:21. | |
risks. Against that background will be invest for growth. Some will, | :45:21. | :45:26. | |
they are getting good at investing in good parts of the world. Not | :45:26. | :45:30. | |
every company can switch. I'm not as pessimistic as some of the other | :45:30. | :45:34. | |
people today. When you talk about the fact that companies won't | :45:34. | :45:37. | |
invest for growth, it is not necessarily that they don't have | :45:37. | :45:41. | |
the money to invest, it is just they are holding it in a pot, what | :45:41. | :45:45. | |
good is that? It is good for two things. If you invest and there is | :45:46. | :45:49. | |
no demand there, you have grown it away. Why would you do that. The | :45:49. | :45:53. | |
second thing is companies have just been through, as we all have, a | :45:53. | :45:57. | |
period of shock, a company is made up of people. When people have been | :45:57. | :45:59. | |
through shock, they are more cautious. Companies feel that they | :45:59. | :46:03. | |
would like to have a big irbalance sheet, because they are worried | :46:03. | :46:08. | |
that the next shot, pos below triggered by the eurozone, is down | :46:08. | :46:14. | |
the line. It is not surprising. are more confident that than either | :46:14. | :46:19. | |
Brendan Barber or John Molton? feel more confident, I thought the | :46:19. | :46:23. | |
numbers were odd today. We have seen some signs of things in the | :46:23. | :46:30. | |
economy strengthening. We heard from the CBI a positive | :46:30. | :46:33. | |
manufacturing survey, provided energy price don't go up we will | :46:33. | :46:37. | |
see real income growth at some point this year. Companies will | :46:37. | :46:43. | |
invest because they need to replace their investment, these are the old | :46:43. | :46:48. | |
ways of optimisim. I'm not talking about growth rushing back to trend, | :46:48. | :46:52. | |
but let's not sit here and say it is all doom and gloom. For ordinary | :46:52. | :46:56. | |
people in the street, the problem is, if the Government hangs its hat | :46:56. | :47:04. | |
and policies on figures, that then turn out to be strange, why should | :47:04. | :47:08. | |
people have confidence anything will improve? Picking up on a | :47:08. | :47:10. | |
couple of things. Current expenditure by the Government | :47:10. | :47:16. | |
hasn't been cut. It goes up steadily across the forecast. The | :47:16. | :47:21. | |
Government bet on growth to get the economy back to equality of income | :47:21. | :47:24. | |
and expenditure. Without growth we carry on running the deficit, we | :47:24. | :47:28. | |
carry on stacking up the debt. The debt is large. At some stage people | :47:28. | :47:33. | |
will run out of credibility, and our currency and our gilts, then we | :47:33. | :47:38. | |
have the mother and father of crises, that is a risk that gets | :47:38. | :47:42. | |
larger by the day. We are still at the early stages of these cuts. The | :47:42. | :47:47. | |
IFS have pointed out, so far we have had 6% of the planned cuts. In | :47:47. | :47:52. | |
other words, for every pound cut we have had so far, there are �16 yet | :47:52. | :47:57. | |
to come. And all that is dragging the economy further down into the | :47:57. | :48:02. | |
mire. Pushing unemployment up, damaging confidence, taking demand | :48:02. | :48:08. | |
out of the economy, it is a road to nowhere. Do you believe that the | :48:08. | :48:13. | |
public sector should be taking some of the pain? It has been taking a | :48:13. | :48:18. | |
huge amount of the pain. We need to...Radical Thinking on the public | :48:18. | :48:22. | |
sector? We need radical thinking about building a very different | :48:22. | :48:26. | |
kind of economy, based on different values. We need major changes in | :48:26. | :48:32. | |
the way our banking and financial system operates, it is not acting | :48:32. | :48:35. | |
as an effective channel for investment into sustainable wealth | :48:35. | :48:40. | |
generation. We need much less reliance on the financial sector, | :48:40. | :48:47. | |
as the great engine of growth. We need serious attention to | :48:47. | :48:51. | |
industrial issues. Is it wrong to blame other European countries for | :48:51. | :48:56. | |
our ills? There is tremendous instability in our largest export | :48:56. | :49:00. | |
market. It is affecting confidence and GDP directly. Europe is hurting | :49:00. | :49:06. | |
that I wa, Europe is hurting other ways. We are restricting our | :49:06. | :49:09. | |
economy with excess regulation, which is is a European effect. | :49:09. | :49:12. | |
don't really buy this view that all that has to happen is the | :49:12. | :49:18. | |
Government gets out of the way. Then things will improve. To be | :49:18. | :49:24. | |
fair I didn't quite say that. you said the public certificator | :49:24. | :49:29. | |
should be cut more quick low and there be less ringlation. You | :49:29. | :49:35. | |
implied d quickly and there be less regulation. You implied less | :49:35. | :49:38. | |
Government in those respects. I don't agree, Governments have a big | :49:38. | :49:43. | |
role in the economy and keeping growth going. I have no sympathy | :49:43. | :49:46. | |
with the view that by sticking very hard to the targets that the | :49:46. | :49:50. | |
Government is taking quite a risk. I don't agree, by the way, they | :49:50. | :49:55. | |
have hung their hat on the growth forecast, neither the Government or | :49:55. | :49:58. | |
the banks hang their hat on growth forecasts, they are not worth the | :49:58. | :50:02. | |
paper they are printed on. Just tomorrow morning's front pages, | :50:02. | :50:08. | |
beginning with the Telegraph. It goes on Cameron's five secret | :50:08. | :50:18. | |
:50:18. | :50:34. | ||
That's all tonight, I will be back tomorrow. From all of us here, a | :50:34. | :50:44. | |
:50:44. | :51:10. | ||
More heavy rain and strong winds, the cold winds particularly in | :51:10. | :51:12. | |
evidence across northern Scotland and Northern Ireland during | :51:12. | :51:15. | |
Thursday. A brisk wind across the south-east, it means here the | :51:15. | :51:19. | |
showers will zip through to bring some sunny spells, in central areas | :51:19. | :51:24. | |
the winds are lighter, that means the downpours that develop, they | :51:24. | :51:29. | |
will develop widely, some places in the north-east getting a soaking. | :51:29. | :51:33. | |
There will be some sunshine lifting the temperatures into the teens. | :51:33. | :51:36. | |
The showers across the south west of England will once again contain | :51:36. | :51:40. | |
hail and thunder, as they will across Wales. Here, with relatively | :51:40. | :51:45. | |
light winds, those downpours could last for some time. The wind are | :51:45. | :51:49. | |
brisk across Northern Ireland, a chilly wind here too. Some dryer | :51:49. | :51:53. | |
and brighter spells, a cloudy day with outbreaks of rain. The best of | :51:53. | :51:57. | |
the brightness across western parts of Scotland. Elsewhere cloud and | :51:57. | :52:00. | |
outbreaks of rain, particularly close to the North Sea. It will | :52:00. | :52:04. | |
feel cold with temperatures into single figures. More cloud and rain | :52:04. | :52:08. | |
across northern England. Further north a mixture of sunshine and | :52:08. | :52:14. |