:00:11. > :00:16.Over 2,000 senior figures in the public service are employed on
:00:16. > :00:19.deals that may allow them to pay less tax. This letter, leaked to
:00:19. > :00:23.Newsnight, makes plain the extent of special arrangements that
:00:24. > :00:28.trouble the Treasury. How do these deals get done? How
:00:28. > :00:31.much might it cost the taxpayer to end them?
:00:31. > :00:36.Virtually impossible he did it himself, but no indication of who
:00:36. > :00:41.else might have been involved, an inquest leaves the death of an MI6
:00:41. > :00:44.operative, an abiding mystery. The coroner today blamed the
:00:44. > :00:48.Intelligence Service and the police for mistakes that may have made
:00:48. > :00:51.this case harder to solve. And she said she believed it was an
:00:51. > :00:55.unlawful killing. The two men wrestling for the
:00:55. > :00:59.presidency of France slug it out this evening, we review their
:00:59. > :01:04.performances. A last flush of campaigning in the
:01:04. > :01:14.elections in Wales tomorrow. Although there are some obstacles
:01:14. > :01:17.
:01:17. > :01:21.to overcome. See you on Thursday. That is if I'm awake, mind. In his
:01:21. > :01:25.budget statement the Chancellor described aggressive tax avoidance
:01:25. > :01:28.as morally repugnant, yet now we learn there are thousands of senior
:01:28. > :01:32.figures in the public sector, who knows maybe even in the Treasury,
:01:32. > :01:36.maybe even in George Osborne's office, working on arrangements
:01:36. > :01:40.which do not require them to pay tax at source. Newsnight as
:01:40. > :01:46.obtained the results of the inquiry, ordered after we revealed that the
:01:46. > :01:52.boss of Student Loans Company was on a similar deal.
:01:52. > :01:56.It is a letter to the Chancellor, George Osborne, from the Chief
:01:56. > :02:00.Treasury Secretary, Danny Alexander. It is marked "restricted", no
:02:00. > :02:05.wonder. It contains the information that over 2,000, highly-paid,
:02:05. > :02:10.senior public servants, are working off the payroll, avoiding tax.
:02:10. > :02:15.The tax arrangements of the head of the student lone company, Ed Lester,
:02:15. > :02:20.raised a stink earlier this year, when we revealed he was being paid
:02:20. > :02:25.by the Government through a private company, based on his home on the
:02:25. > :02:30.Thames t reduced his tax bill by the thousands. It seems over 2,000
:02:30. > :02:34.other public servants are doing the same. I am completely shocked. When
:02:34. > :02:39.Newsnight first broke this story, I thought it was a rogue individual.
:02:40. > :02:42.What we have now learned from this letter is it is endemic across the
:02:42. > :02:47.senior Civil Service. This is particularly important here,
:02:47. > :02:51.because what the public sector should be doing is leading by
:02:51. > :02:58.example. The Whitehall letter was first obtained by David Hencke was
:02:58. > :03:06.investigative website Xaro News, he says the thousands the Government
:03:06. > :03:11.has identified as "off-payroll" is larger. It it doesn't include the
:03:11. > :03:15.whole of the NHS or the academy schools and other places. It is far
:03:15. > :03:19.worse than 2000, you suspect? worse. And it is extraordinary that
:03:19. > :03:22.we have had a Government in for two years, and this has been going on,
:03:22. > :03:26.without ministers having the slightest clue, that this was
:03:26. > :03:32.happening. Election Alexander, who signed off
:03:32. > :03:40.on Ed Lester arrangements, suggests, in his leaked letter, he's shocked
:03:40. > :03:44.by the sheer scale of the "off- payroll deals" involving civil
:03:44. > :03:48.servants, that is people earning a certain amount of money. He wants
:03:48. > :03:52.board members and senior officers to be compelled to go on staff. He
:03:52. > :03:57.wants full details of income tax and national insurance for anyone
:03:57. > :04:02.engaged for more than six months and paid more than �220 a day, he
:04:02. > :04:06.wants it all brought in in three months. A Treasury adviser told me
:04:06. > :04:13.at least they are doing something, the last Government did nothing,
:04:13. > :04:17.after being questioned about the leak. This is a cabinet that has
:04:17. > :04:23.called excessive tax avoidance as morally repugnant. But they could
:04:23. > :04:27.be biting off more than they can chew looking at these payroll deals.
:04:27. > :04:35.Base cost is the national insurance that Government would have to find.
:04:35. > :04:45.On �58,200, that would bring in, per person, an additional �8 though
:04:45. > :04:46.
:04:46. > :04:49.031, of cost, -- �8,031, and brings an extra cost in. That is only that
:04:49. > :04:56.amount, if they were earning more than that? If the earnings are
:04:56. > :05:01.greater, I would have expected the average to be between �75,000-
:05:01. > :05:06.�80,000 a year, with a number of that 2,000 earning well in excess
:05:06. > :05:08.of �100,000. What will the cost be in national insurance contributions
:05:08. > :05:12.overall? The cost in national insurance would be in the region of
:05:12. > :05:15.�30 million a year. On top of that there are pensions, holiday pay,
:05:15. > :05:19.and a variety of statutory employment rights. The danger is,
:05:19. > :05:22.if it is not handled carefully, recouping lost tax revenue could
:05:22. > :05:30.cost the country a fortune. Meanwhile, what's the position of
:05:30. > :05:33.the people whose job it is to chase down tax avoidance? I find it
:05:33. > :05:40.astonishing that the Revenue & Customs don't seem to have spotted
:05:40. > :05:43.this. Either they knew all about it, and like Ed Lester approved it all,
:05:43. > :05:48.or else they didn't seem to be doing their job very well. Because
:05:48. > :05:55.how have all these people, who may only have one major controlling job,
:05:55. > :05:59.managed to escape tax and national insurance. A story that began at Ed
:05:59. > :06:01.Lester's private company on the Thames, has dredged up thousands of
:06:01. > :06:09.tax avoidance deals in the Government. The Treasury Secretary
:06:09. > :06:14.believes he can change it all in three months. An ambitious man.
:06:14. > :06:18.Let's discuss this with the Conservative MP Richard Bacon, with
:06:18. > :06:23.Emma Boon of the Taxpayers' Alliance, and the General Secretary
:06:23. > :06:29.of the FDA, the trade union for top civil servants. 2,000, are you
:06:29. > :06:32.surprised it is so high? actually, when we last discussed it,
:06:32. > :06:35.I said it was wider than we expect. I think it is rife across the local
:06:35. > :06:40.Government and health service. health service isn't even included
:06:40. > :06:42.in these figures? Indeed it is not, but the letter today suggests the
:06:42. > :06:46.Health Secretary and the Education Secretary should take a close look
:06:46. > :06:50.in their areas, that is right. Goodness knows it may even be
:06:50. > :06:55.possible that one or two people are doing it in the BBC. Quite possible,
:06:55. > :06:59.I don't know who? I don't either. But there are people like Reed
:06:59. > :07:03.Consulting, and Henar, who are employing people who work for the
:07:03. > :07:07.BBC. There is a lot of it going on, I think it is wrong. Where people
:07:07. > :07:13.are public servants they should pay tax. Hang on a second, some of
:07:13. > :07:16.these people may be your members, is it legitimate? At senior levels,
:07:16. > :07:19.this should not be happening. If you are at a board level
:07:19. > :07:22.appointment, in the Civil Service, you should be fully employed by the
:07:22. > :07:27.department. In fact, I think most people R I think we will find that
:07:27. > :07:33.most of these 2,000 people are not in senior roles, many of them, in
:07:33. > :07:37.fact, will not be in the Civil Service, they will be in arm's
:07:37. > :07:40.length quangos or bodies, they will be technical consultants, IT and HR
:07:40. > :07:44.and other technical professions. That does happen in the wider
:07:44. > :07:48.economy, where you have short-term posts. What I found disturbing was
:07:48. > :07:53.the length of time some of these people had been in this kind of
:07:53. > :07:57.role, paid off the books. As you know, Ed Lester, this was a senior
:07:57. > :08:01.figure, he ran the Student Loan Company? I don't know if anybody
:08:01. > :08:05.will defend that, actually. Most is senior civil servants were pretty
:08:05. > :08:08.upset about it. Most people pay their taxes, and expect to, they
:08:08. > :08:12.think it is very unfair if colleagues are not being treated in
:08:12. > :08:17.exactly the same way. From a Taxpayers' Alliance point of view,
:08:17. > :08:21.this may actually be saving the taxpayer money? I don't think it is,
:08:21. > :08:26.though. We don't know? First of all, it is the sense of unfairness about
:08:26. > :08:29.it is an important fact. You can't look at this blindly from an
:08:29. > :08:33.economic perspective and say is this saving us money. The situation
:08:34. > :08:38.here, these people are claiming that they are consultants, these
:08:38. > :08:43.people n many cases, have been working for up to two years in the
:08:43. > :08:47.same post. 40% of them over two years? May have only had one client,
:08:47. > :08:51.being paid in this way, and not paying your tax through PAYE and
:08:51. > :08:54.having it deducted at source, and paying national insurance
:08:54. > :08:57.contributions, as you should, and sitting alongside people in the
:08:57. > :09:02.same office, doing a very similar role, who are paying a lot more tax
:09:02. > :09:06.than you are, is unfair, and secondly of all, these people claim
:09:06. > :09:10.they are consultants. They are clearly doing something that should
:09:10. > :09:14.be as a salaried role, they should pay through PAYE, like everybody
:09:14. > :09:18.else. We don't know precisely what they are doing, do we? We do need
:09:18. > :09:22.more details about that. What happens next? Two marks out of
:09:22. > :09:27.three, certainly one-and-a-half marks out of three for the Treasury
:09:27. > :09:31.part starting to dig into this and get to the Bart -- starting to dig
:09:31. > :09:35.into this and get to the bottom of it. It is all very well for an
:09:36. > :09:40.edict to come out of the Terek and I welcome it, today the equality
:09:40. > :09:43.and Human Rights Commission, I was told today agreed an existing 17
:09:43. > :09:46.interims to be continued for a further year. It is one thing for
:09:46. > :09:51.the Treasury to say something, but for it to actually happen on the
:09:51. > :09:54.ground is another. I would expect there are a lot of people in the
:09:54. > :09:59.administration who would like to continue in the old sweet way
:09:59. > :10:05.continuing for many years, it will big rigour and political drive from
:10:05. > :10:08.the top to deal with it. I hope George Osborne will go further,
:10:08. > :10:11.David Cameron is very concerned about this, he wrote me a letter
:10:11. > :10:14.saying that, they have to take this very, very seriously. You think
:10:14. > :10:20.there is a good chance that the Government will break contracts
:10:20. > :10:26.that it has legally entered into it? It is not easy to break
:10:26. > :10:30.contracts, it depending on what they say, you don't want to make
:10:30. > :10:35.lawyers rich. In the interim they should be able to break and get rid
:10:35. > :10:40.of with break clauses fairly easily. These people can't have it both
:10:40. > :10:43.ways, they can't be paid as interim staff and then claim the rights of
:10:43. > :10:47.people on the payroll, it is a different way of being employed.
:10:47. > :10:51.it is necessary to change the law, we changed the law in shopping
:10:51. > :10:54.hours for the Olympics and in the last few minutes of the last
:10:54. > :11:01.session in parliament. If they want a quick bill they can have one, I
:11:01. > :11:05.can get it through. We might be able to put on bells and whistles
:11:05. > :11:08.and get a bypass for my area as well. If you look at how long this
:11:08. > :11:12.has been going on, according to the letter 40% of these people have
:11:12. > :11:15.been on these kind of contracts for at least two years, going back to
:11:15. > :11:18.the previous Government as well. There are long-term issues here as
:11:18. > :11:22.well. For those people in senior roles, rather than the contractors,
:11:22. > :11:25.there is an issue about pay levels in the senior Civil Service, which
:11:25. > :11:29.often are below, this is being used as a way of getting round some of
:11:29. > :11:32.the pay levels. We need an intelligent debate about fair
:11:32. > :11:36.levels of pay in senior roles.S That the argument used to justify
:11:36. > :11:41.this sort of arrangement, that it is the only way to get people in
:11:41. > :11:45.from the private sector? I don't think it justifies that, I think it
:11:45. > :11:49.highlights that there is an issue about where we set pay levels.
:11:50. > :11:55.Public sector pay levels will never mirror the private sector, I don't
:11:55. > :11:58.think most people will say they should, you have to have an
:11:58. > :12:02.intelligent debate. Recently we have had a different approach to
:12:02. > :12:05.recruitment bans and freezes, we need to get round it. We need to be
:12:05. > :12:09.intelligent about it, you shouldn't be holding a senior management role
:12:09. > :12:12.and being paid in this way, it is unethical. If the consequence was
:12:12. > :12:15.you drove away talented people who said they wouldn't work here any mo,
:12:15. > :12:21.they will go back to the private sector or wherever they have come
:12:21. > :12:23.from, that would be bad from a tax- payers' point of view, wouldn't it?
:12:24. > :12:29.Nobody will say we will drive away talented people, there is a
:12:29. > :12:33.difference between want to go hire and retain staff at a senior level
:12:33. > :12:38.of the Civil Service, and want to go renumerate them well and pay a
:12:38. > :12:42.pension and retain them. And short- term contracts like an IT expert,
:12:42. > :12:46.for a short period of time in a specific project, paying them in a
:12:46. > :12:52.different way and they make their own tax arrangements, these are
:12:52. > :12:55.different things that shouldn't be confused. How is it that the Civil
:12:55. > :12:58.Service is still the fast stream, we take the brightest people into
:12:58. > :13:01.the Civil Service, but the career formation and the way the culture
:13:01. > :13:04.is structured as such, that 20 years later, they are not all, by
:13:04. > :13:08.any means n a position to take top management roles. They don't have
:13:08. > :13:12.the management skills to marshall the combination of people, money
:13:12. > :13:16.and time and technology in the way that any manager has to do to fill
:13:16. > :13:20.the top roles. That is why 40% of director-generals are coming from
:13:20. > :13:25.the outside. It is a good thing providing fresh blood. But at the
:13:25. > :13:29.bottom of the Civil Service, with the fast stream, there is still a
:13:29. > :13:33.big unresolved issue there in terms of career formation, it needs to be
:13:33. > :13:37.addressed. There are other issues around skills formation. Why isn't
:13:37. > :13:41.Government able to generate good IT people, for example. To be fair I
:13:41. > :13:44.don't think we have been very successful in some of the HR roles.
:13:44. > :13:47.We need to stand back and see what skills you need in central
:13:47. > :13:50.Government and the wider public sector over the next five to ten
:13:50. > :13:53.years. Generate the people with the skills and pay them in a way that
:13:53. > :13:58.keeps them and doesn't just leave them trained up and then rushing
:13:59. > :14:02.out into the private sector to get very much higher pay. For you the
:14:03. > :14:07.decisive thing is do these people have managerial responsibility as
:14:07. > :14:10.opposed to being a specialist? think that is important, if you are
:14:10. > :14:13.in a senior management role, board level or below that, there is no
:14:13. > :14:17.question these arrangements shouldn't operate. That should be
:14:17. > :14:21.the same in the arm's length bodies. The Ed Lester case, without the
:14:21. > :14:24.detail of that, highlighted an anomily, it was not right, it
:14:24. > :14:26.shouldn't have happened, it was clearly happening under the last
:14:26. > :14:31.Government, it is continuing under this Government, it shouldn't be
:14:31. > :14:38.the case. We also have to recognise on the short-term, technical
:14:38. > :14:42.specialists, this is an economy- wide issue. A coroner trying to
:14:42. > :14:46.decide how a brilliant young MI6 operative met his death has failed
:14:46. > :14:50.to come up with an answer. The best she could manage was a narrative
:14:50. > :14:54.verdict. How Gareth Williams ended up naked and dead inside a locked
:14:54. > :14:58.bag remains a mistreatment the inquest did disclose some unusual
:14:58. > :15:01.behaviour by the MI6 man, by one of the world's crack intelligence
:15:01. > :15:11.agencies and by the police. Someone else must have been involved. But
:15:11. > :15:12.
:15:12. > :15:19.there is no answer as to who. Our diplomatic editor reports. Williams,
:15:19. > :15:25.a maths prodigy who joined GCHQ aged 21, with a degree and PhD
:15:25. > :15:30.under his belt. Fit, brilliant but complex, when sent on attachment to
:15:30. > :15:40.MI6, unhappy with work. Even after a week's hearings, his death is
:15:40. > :15:53.
:15:53. > :15:59.little clearer. The coroner, Fiona Little comfort, then, for a family
:15:59. > :16:04.still morning its loss. Our grief is exacerbated by the failure of
:16:04. > :16:08.his employers at MI6 to take even the most basic inquiries as to his
:16:08. > :16:11.where abouts and welfare, which any reasonable employer would have
:16:11. > :16:16.taken. We are also extremely disappointed over the reluctance
:16:16. > :16:25.and failure of MI6 to make available relevant information.
:16:25. > :16:29.This was the scene at an MI6 flat in PIMCO in cough 2010. -- August
:16:29. > :16:34.2010 women's designer clothing lay carefully bagged, and arrayed on
:16:34. > :16:39.the bed. Mr Williams had spent more than �20,000 on his collection.
:16:39. > :16:49.There was a red wig too, and other personal collections. These
:16:49. > :16:55.
:16:55. > :17:00.discoveries soon leaked out, the In the bathroom, his naked body lay
:17:01. > :17:08.in a zipped up waterproof sports bag. It had festered for eight days
:17:08. > :17:12.in the August heat, before it was finally found. But why had his MI6
:17:12. > :17:17.bosses allowed so much time to pass before getting the police involved.
:17:17. > :17:21.They apologised for that today, and insisted they would change their
:17:21. > :17:24.procedures. I think the delay that happened in reporting the fact that
:17:24. > :17:28.he was missing was highly unfortunate, it is very disturbing
:17:28. > :17:31.that it happened. To be fair to the Secret Intelligence Service, they
:17:31. > :17:34.themselves have acknowledged that was a serious fault. They have
:17:34. > :17:38.apologised for that. They are making sure that kind of thing
:17:38. > :17:42.can't happen again. I have no reason to believe it was systemic.
:17:42. > :17:47.But it certainly shouldn't have happened on that occasion.
:17:47. > :17:51.coroner's court saw evidence like this, an expert trying to zip
:17:51. > :17:57.himself into the bag and lock it. The witnesses felt it was virtually
:17:57. > :18:02.impossible to do that alone. Was he forced in, or was it consensual,
:18:02. > :18:05.maybe a sex game gone wrong. Forensic experts would have found
:18:05. > :18:13.that question easier to answer, if the body had been found after just
:18:13. > :18:18.a day or two. The body, particularly in a summer months and
:18:18. > :18:24.warm environment, starts to undergo changes after death quite rapidly,
:18:24. > :18:29.within a day or so. Particularly if the body is enclosed within another
:18:29. > :18:34.compartment, such as a suitcase, or a bag or something like that.
:18:34. > :18:40.Because there is no air currents there, and therefore, the botty
:18:40. > :18:45.will become discoloured. Marks such as bruises, scratches, that kind of
:18:45. > :18:50.thing, will not be visible. It also emerged this week, that MI6
:18:50. > :18:53.was in possession of computer flash drive, memory device, and a similar
:18:53. > :18:59.sports bag used by Mr Williams. The investigating detectives hadn't
:18:59. > :19:03.known about that. Because the specialist police liaising with MI6
:19:03. > :19:08.hadn't told them. The coroner was unhappy about it. But could the
:19:08. > :19:11.police have pushed harder? I think you do have quite a difficult
:19:11. > :19:16.procedural problem, that always applies in a democracy, where you
:19:16. > :19:20.have Secret Services, which by their nature handle information
:19:20. > :19:23.that simply cannot be brought into the public domain, without real
:19:23. > :19:27.damage to the national security interest. And a police inquiry, or
:19:27. > :19:32.the normal interests of justice. We are always grappling with how you
:19:32. > :19:36.create struck tour that is meet that requirement. Summing up today,
:19:36. > :19:46.the coroner avoided a specific verdict, and said much was still
:19:46. > :19:53.
:19:53. > :19:57.unclear. Yet at the end of her At the end of her narrative, the
:19:57. > :20:03.coroner expressed her sympathies to Mr Williams family. And her voice
:20:03. > :20:08.faltered with emotion as she did so. In truth, of course, this inquest,
:20:08. > :20:12.because it has failed to answer so many key questions, will not give
:20:12. > :20:17.the former intelligence officer's family the closure they desire. It
:20:17. > :20:22.will also leave the way open for those who wish to spin conspiracy
:20:22. > :20:26.theories about his death. Outside the police were adamant their
:20:26. > :20:30.investigation goes on. And their appeal to someone who may have been
:20:30. > :20:35.with Gareth Williams that August night, revealed something about
:20:35. > :20:41.their assumptions of how he may have died. It's highly likely that
:20:41. > :20:46.a third party was involved in Gareth's death. I urge anyone who
:20:46. > :20:53.knows Gareth, who had contact with him, to search their conscience and
:20:53. > :20:57.come forward with any information about what happened that night, on
:20:57. > :21:03.the 16th of August 2010. The last hours of Gareth Williams and the
:21:03. > :21:06.events in his flat will continue to excite comment to the sorrow of his
:21:06. > :21:11.family. But investigators believe there could still be a good chance
:21:11. > :21:17.of solving the case, even if that takes years.
:21:17. > :21:22.Philip Davies is director of the Brunel Centre for Intelligence and
:21:22. > :21:26.Security Studies, Harry Ferguson is a former MI6 officer. This is
:21:26. > :21:30.highly embarrassing for MI6? coming on top of rendition and the
:21:30. > :21:35.Iraq war it is a series of incidents. The problem being, in
:21:35. > :21:40.large part, that MI6, or SIS, does not seem like a concerned employer,
:21:40. > :21:44.it took them a terribly long time to realise that he was gone. Then
:21:44. > :21:48.to snotify anybody, and then there is -- notify anybody, then there is
:21:48. > :21:52.all the other events afterwards? can see a couple of possible
:21:52. > :22:00.factors that might have been driving it. One of them might be
:22:00. > :22:04.that he was a GCHQ officer, on se connedment to SIS, the operations
:22:04. > :22:10.have been high because of Afghanistan, it is conceivable
:22:10. > :22:14.people might have thought he was yanked back to GCHQ, and waiting
:22:14. > :22:17.for a memo. If they thought he was doing something risky and
:22:17. > :22:22.inappropriate, they would have rather than make a report and a
:22:22. > :22:27.security vetting process, and ruin his career, they thought they would
:22:27. > :22:31.take it up with him informally. didn't turn up to a meeting?
:22:31. > :22:36.Sometimes people don't. What do you make of it? Somebody dropped the
:22:36. > :22:40.Bill ball. You wouldn't allow that kind of -- Somebody dropped the
:22:41. > :22:44.ball. You wouldn't allow that kind of thing happening in any
:22:44. > :22:48.organisation. He could have been kidnapped, extremist groups in this
:22:48. > :22:57.country could have decided to nab something, it is a big enough
:22:57. > :23:00.building, it is not the Cold War, but seven days is a long time. All
:23:00. > :23:05.organisations make mistakes, like managers make mistakes, it is clear
:23:05. > :23:09.from the inquest that no action was taken against line managers. That
:23:09. > :23:13.SIS didn't feel any action was necessary to correct this. That is
:23:13. > :23:17.worrying. What should they have done? They should have immediately
:23:17. > :23:21.sent someone around to the flat and found out where he was. I was on a
:23:21. > :23:26.radio programme earlier on, an old hand in the 1960s, he said in his
:23:26. > :23:31.day, if you were an hour late for work, somebody was out trying to
:23:31. > :23:37.find out where you were. Classic Cold War times, but even so. This
:23:37. > :23:44.was a guy on attachment from GCHQ, it is not as if he was a top secret,
:23:44. > :23:50.he was a spy? That was a guy so valuable he was to assist on SIS
:23:50. > :23:52.operations from GCHQ, he had knowledge through cryptography,
:23:52. > :23:55.extremely valuable. You have somebody not part of your
:23:55. > :23:59.organisation, you are responsible for them. It is like a guest in
:23:59. > :24:01.your family. If they go missing you should know. It is like looking
:24:01. > :24:06.after somebody else's child. It is very important. Because he worked
:24:06. > :24:10.in a small unit, and he's an outsider, they let this go. What do
:24:10. > :24:14.you imagine will be going through the mind of senior people in the
:24:14. > :24:18.Intelligence Service now? I would imagine there will be serious
:24:18. > :24:23.thinking about their own security protocols, revisiting vetting
:24:23. > :24:27.standards. They may be wondering if there were things to be picked up
:24:27. > :24:37.during his regular vetting top-ups. The other thing to keep in mind is
:24:37. > :24:40.
:24:40. > :24:44.he's a GCHQ guy on se connedment to SIS, I conned -- se conneded to SIS,
:24:44. > :24:49.I wonder what the relations are like between the two groups, he was
:24:49. > :24:52.in their care. Are you not uncomfortable about the stuff about
:24:52. > :24:56.his private life that was leaked? We don't know enough about how or
:24:57. > :24:59.why it was leaked. I don't want to say more before I have formed any
:24:59. > :25:04.particular judgment about that. It was odd, but on the whole, the
:25:04. > :25:07.whole evidence trail, part of this problem has been handled relatively
:25:07. > :25:11.poorly. The say SIS handled material that should have been
:25:11. > :25:15.subject to chain of evidence standards. And the SO15 officer
:25:15. > :25:20.should have been more attentive to these things. It was suggested that
:25:20. > :25:23.the S015 guy was there as an intelligence liaison Counter
:25:23. > :25:27.terrorism policing and SIS operational activities. If you
:25:27. > :25:30.think people are doing CID chain of evidence responsibilities, that is
:25:30. > :25:36.a slightly different professional interest. And entirely different
:25:36. > :25:40.sort of policeman one might say? The police do seem to have acted
:25:40. > :25:44.oddly in this? It is very difficult for them. You are dealing with a
:25:44. > :25:48.secret organisation, you can't go in and use a search warrant, you
:25:48. > :25:52.can't question witnesses, you have to rely on what you told. Yvette
:25:52. > :25:58.Cooper said in the Intelligence Security Committee, the problem is
:25:58. > :26:01.you can't control what you are told, you are told by the people what you
:26:01. > :26:06.need to know about, that is the problem for the police, it is a
:26:06. > :26:10.closed world. A lot of the officers are star struck by the fact they
:26:10. > :26:14.are dealing with spooks for real, and don't push it hard enough when
:26:14. > :26:20.they are investigating. This is even a more peculiar quality about
:26:20. > :26:26.this, of course we had the police, mostly in the form of indoctrinated
:26:26. > :26:30.Special Branch practitioners, go into Vauxhall Cross, as part of the
:26:30. > :26:34.death of Princess Diana. They had effectively free run of the central
:26:34. > :26:38.registry. They were able to talk to the relevant officers and officials
:26:38. > :26:43.involved. They had, it had to be conducted inside the headquarters.
:26:43. > :26:48.The first point we said is that SIS has a precedent in being able to
:26:48. > :26:50.take another investigation to come in and handle it. Possibly the
:26:50. > :26:55.police are more familiar with how to do this now, than they would
:26:55. > :27:01.have been in the old days. In which case, it is even more bizarre, even
:27:01. > :27:03.more singular, that given you have got that legacy, that they handled
:27:04. > :27:08.the investigatory chain of evidence side of things so poorly in The
:27:08. > :27:14.Willy will case. It is more inconsistent with precedent. What
:27:14. > :27:21.about all the stuff about visits to websites, and women's dresses and
:27:21. > :27:29.all that sort of stuff. Are you surprised by that? Personally? Yes.
:27:29. > :27:34.But not in terms of the service. In the 1970s Morris Oldfield, who some
:27:34. > :27:39.believe was the basis for Smiley in the books, was found to be a
:27:39. > :27:42.homosexual in later life, despite being vetted numerous times. The
:27:42. > :27:45.new enhanced vetting process should put an end to this, you are
:27:45. > :27:48.supposed to be honest, and once you are honest you are not
:27:48. > :27:53.blackmailable. Not that he had these tendencies, if he did, but
:27:53. > :27:57.the fact he never received the pastoral support a lonely guy, away
:27:57. > :28:02.from home, should have received. He worked in a small unit, and from
:28:02. > :28:05.all the evidence given to the unit, he was left pretty much to his
:28:05. > :28:09.devices. That is a security breach waiting to happen, even if it is
:28:09. > :28:14.not a personal tragedy, as it is in this case. I agree with that. I
:28:14. > :28:18.will leave it with that. I agree with that entirely. Do you think we
:28:18. > :28:22.will ever get to the bottom of this? It is very, very rare that
:28:22. > :28:27.something remains a mystery indefinitely? It could be quite a
:28:27. > :28:30.long time before we do. If they have opened up new alternative
:28:30. > :28:34.routes for conducting the investigation, there is a decent
:28:34. > :28:39.chance they will come to the end of the trail. There is a non-zero
:28:39. > :28:44.possibility, I wouldn't rule it out rbgts but the trail may lead abroad
:28:44. > :28:47.--, but the trail may lead abroad, the third party may not be from the
:28:47. > :28:54.UK, there could be a foreign interest here. What is your feeling,
:28:54. > :28:56.will it ever be satisfactorily answered? No, SIS is a closed world,
:28:56. > :28:59.there is no mechanism for investigating fully. The
:28:59. > :29:03.intelligence committee was set up in the early days, they had an
:29:03. > :29:08.investigator, he was quickly disposed of. You will never be able,
:29:08. > :29:10.unless the right mechanisms are introduced, you will never get what
:29:10. > :29:14.was really happening there. With the question of whether or not
:29:14. > :29:17.there was someone involved, there was a failure of management and
:29:17. > :29:21.Pastoral support here. That is the real worry.
:29:21. > :29:25.In a moment we will have reaction to the French presidential debate
:29:25. > :29:27.that finish add few moments ago, a mere two-and-a-half hours after it
:29:27. > :29:29.started. While the people of France are
:29:29. > :29:33.preparing to choose their President, the people of Wales are readying
:29:33. > :29:37.themselves to pick new local authorities. The entire country,
:29:37. > :29:41.apart from Anglesey, which is caught in some space time
:29:41. > :29:44.discontinuum, and doesn't have elections until next year, gets to
:29:44. > :29:47.choose tomorrow. There will be a big troubling question for Wales,
:29:47. > :29:52.not answered by tomorrow's elections, sadly, is what on earth
:29:52. > :30:02.has gone wrong with education there. Since it got its own Government,
:30:02. > :30:11.
:30:11. > :30:16.relative achievement has plummeted. On a sodden May Day in Caerphilly,
:30:16. > :30:20.even Tommy Cooper, the town's funnyiest son, is looking too grey
:30:20. > :30:25.to lift spirits. With the prospects of tomorrow's local elections it is
:30:25. > :30:35.hard to spot. But Caerphilly, fought over before, is again a key,
:30:35. > :30:37.
:30:37. > :30:42.if not a lower key battleground. Labour is key to regain this
:30:42. > :30:45.council, in a valleys heartland, before four years of a Plaid Cymru
:30:45. > :30:49.administration. Keen enough to combat the rain and a certain lack
:30:49. > :30:56.of voter commitment. Thank you very much for your time. I'll be there.
:30:56. > :30:59.See you on Thursday. That's if I'm awake! Strictly local problems will
:31:00. > :31:04.help decide the election. So too will views on questions which
:31:04. > :31:09.affect all of Wales, such as schools. Education is an important
:31:09. > :31:13.issue in the campaign. Pupils' attainment level in Wales have
:31:13. > :31:19.fallen steadily since devolution, they are now lower than in England,
:31:19. > :31:22.Scotland or Northern Ireland. The question now, does Wales need more
:31:22. > :31:29.English-style reforms, testing, league tables, independence for
:31:29. > :31:33.schools, or should it preserve its own, more comprehensive approach?
:31:33. > :31:39.Tests of a sample number of Welsh 15-year-olds, under the
:31:39. > :31:49.international assessment, show a decline in reading ability between
:31:49. > :31:58.
:31:58. > :32:02.The Welsh Education Minister said it was an unacceptable performance
:32:02. > :32:07.in overall attainment. These pupils show what can be achieved. Their
:32:08. > :32:17.school is one of the best in Wales. 85% here are from families classed
:32:18. > :32:18.
:32:18. > :32:23.as deprived. Science, like all other objects, except English, is
:32:23. > :32:26.taught in Welsh. Only 2% of pupils in this school speak Welsh at home.
:32:26. > :32:34.But Welsh education, here and in other parts of Wales, is
:32:34. > :32:41.increasingly popular. Bileft-wing usualism itself promote
:32:41. > :32:44.-- biling ualism itself promotes cognitive thinking. They might read
:32:44. > :32:47.it in English and discuss it in Welsh, they have to understand the
:32:47. > :32:53.work to do that, it is not reproducing. Bringing all schools
:32:53. > :32:57.up to the standards of this school will take a lot of extra cash.
:32:57. > :33:01.Currently Wales spends �600 less a year on each pupil than England.
:33:01. > :33:05.Labour says it will reduce the shortfall by spending at least 1%
:33:05. > :33:10.more on education than the block grant the Welsh Government gets
:33:10. > :33:14.from Westminster. It will give schools more control over the money.
:33:14. > :33:18.It is about further investment going in, whether that is school
:33:18. > :33:23.buildings or going into initiatives such as the foundation phase, such
:33:23. > :33:27.as Flying Start, to look at their very young children and give that
:33:27. > :33:33.extra support, at that age, and continue in the investment. It is
:33:33. > :33:40.not a short-term fix, it is, over the long-term, and Welsh Labour are
:33:40. > :33:44.in there for the long-term. Labour is bringing in other reforms too,
:33:44. > :33:51.Wales abolished SATs tests and league tables, it is placing
:33:51. > :33:55.schools into bands, according to reviews. Plaid Cymru shared power
:33:55. > :33:58.with Labour until last year. There is several things we should be
:33:58. > :34:02.doing, not to introduce the free market happening in England. We
:34:02. > :34:06.were against academys, and banding that the Welsh Labour Government is
:34:06. > :34:10.doing, we need to concentrate more on core skills, that is the reading
:34:10. > :34:16.and writing skills, ensuring those are there and safely there.
:34:16. > :34:19.The Welsh Assembly in Cardiff Bay was set up to enable Wales to find
:34:19. > :34:23.distinctively Welsh solutions to Welsh problems. But in the fierce
:34:23. > :34:28.debates here, over education, some have questioned whether the country
:34:28. > :34:32.has now diverged too far in policy. Welsh Conservatives want schools
:34:33. > :34:37.all still council controlled, to be able to free themselves from the
:34:37. > :34:41.local authorities as they can in England. We have to look at what
:34:41. > :34:45.suits Wales. Where I am uncomfortable, is we will look at
:34:45. > :34:51.anything, anything, as long as it is not exactly the same as England.
:34:51. > :34:55.Because that, I think, is totally self-defeating. If we want to be
:34:56. > :34:58.the best of the best, we must look at the best of the best and
:34:58. > :35:02.implement that. Liberal Democrats talk more of working through local
:35:02. > :35:06.authorities. Our view is that there is a need to look at the inspection
:35:06. > :35:09.regime, and the quality of school leaders. And, perhaps, to have more
:35:09. > :35:14.robustle cha eing, the reality as far as local Government is
:35:14. > :35:17.concerned. Is that ultimately they are responsible for those school
:35:17. > :35:21.improvement services. Certainly there is a lot of work to be done.
:35:21. > :35:24.The decisions of the assembly and the Welsh Government wofpbt be
:35:24. > :35:28.directly affected by tomorrow -- won't be directly affected by
:35:28. > :35:32.tomorrow's elections, the vote will certainly reflect the changing
:35:32. > :35:35.political mood, in a country whose confidence in its ability to
:35:35. > :35:39.educate its young people, has now been severely shaken.
:35:39. > :35:43.The last big event of the fight for the presidency of France ended a
:35:43. > :35:47.few minutes ago. Nicolas Sarkozy and his socialist challenger,
:35:47. > :35:51.Francois Hollande, squared up on television for a knock them down,
:35:51. > :35:55.drag them out debate, which mattered more to Sarkozy than
:35:55. > :35:58.Hollande. Not a single poll has shown Sarkozy will hang on to the
:35:58. > :36:04.presidency. Hollande might have had a charisma bypass, but he offers
:36:04. > :36:14.France, and he says the rest of Europe, an alternative to austerity.
:36:14. > :36:18.
:36:18. > :36:24.Who can forget thiser receiptically charged classic of French cinemas
:36:24. > :36:31.seen here on a lovingly curated print from the Newsnight vaults. On
:36:31. > :36:38.TV screens across France tonight, another red-hot tete-a-tete, not
:36:38. > :36:42.Belle De Jour this time, mais non, it is beau de jour, as France
:36:42. > :36:50.decides who will be her consort for the next five years. First to
:36:50. > :36:57.arrive for a televised debate, the French socialist, Francois Hollande,
:36:57. > :37:01.nicknamed flamy, because he's sweet and comforting, no bland and a bit
:37:01. > :37:05.wobbly. Then the incumbent, Nicolas Sarkozy, accompanied by his wife,
:37:05. > :37:15.the former model, Carla Bruni, who seemed to take her low-key
:37:15. > :37:16.
:37:16. > :37:18.sartorial cue, from her husband. As a giant clock ensured equal time
:37:19. > :37:23.for interlocuteurs, Hollande accused Sarkozy of passing the buck
:37:23. > :37:27.for the country's problems. TRANSLATION: It is never your fault,
:37:27. > :37:30.5-10% of unemployment is not your fault either, it is the fault of
:37:30. > :37:33.the crisis. You are never responsible, are you. Watched by
:37:33. > :37:37.their pert, Prime Minister time hosts, the two men also traded
:37:37. > :37:42.views on the safety or otherwise of nuclear power, following the
:37:42. > :37:50.disaster in Japan. TRANSLATION: have the safest nuclear energy in
:37:50. > :37:56.the world, it is recognised as such, in Fukasima it was not the energy,
:37:57. > :38:00.it was the tsunami, as you know. As part of our commitment to
:38:00. > :38:05.covering the French elections, Newsnight has these exclusive
:38:06. > :38:09.pictures from inside a French restaurant in London tonight.
:38:09. > :38:15.Where supporters of Monsieur Sarkozy have been following the
:38:15. > :38:20.debate and emotions are running high. Back in the French capital,
:38:20. > :38:25.the exchanges were growing increasingly tense, and personal.
:38:25. > :38:30.TRANSLATION: You can't stop people to vote for me, no more than I can
:38:30. > :38:37.call for your, the people who support you to vote in your favour.
:38:37. > :38:42.But having said that, you wanted to be a victim of five years, France
:38:42. > :38:47.has been hurt, divided, has suffered. So many words have been
:38:47. > :38:50.said, not by some of your assistants, but by yourself. In
:38:50. > :38:54.that kind of debate. Please let me tell you.
:38:54. > :38:58.TRANSLATION: In that kind of debate, please, let me tell you, enough
:38:58. > :39:04.difficulties are a problem, enough things I have managed to do, others
:39:04. > :39:08.I have not succeeded to do. We don't need to add outrageous words
:39:08. > :39:16.and lies. The politicians also clashed over immigration, and
:39:16. > :39:21.France's cultural identity. Quite a warm-up for Sunday's decisive vote.
:39:21. > :39:24.Here now, different to the agenda, but simply divided, two candidates
:39:24. > :39:27.hoping to be the first member of the French National Assembly
:39:28. > :39:31.representing the seat of northern Europe. French people living
:39:31. > :39:35.everywhere from Iceland to Finland, since most of them live in west
:39:35. > :39:42.London, it is known as the constituency to most as south
:39:42. > :39:46.Kensington. What for you was the most exciting
:39:46. > :39:50.point of this debate? I think the first time Nicolas Sarkozy could
:39:50. > :39:54.ask the real questions to Francois Hollande. Until now he didn't want
:39:54. > :39:58.to answer any questions, he was complete low avoiding any debate.
:39:58. > :40:03.It was a good -- completely avoiding any debate. It was a good
:40:03. > :40:07.starting point to have finally a debate. You take a complete low
:40:07. > :40:12.contrary view, being of the opposite persuasion. What was the
:40:12. > :40:17.exciting moment in it? It was all in all to see that Mr Hollande has
:40:17. > :40:22.a very strong personality. He was both firm, stable, convincing,
:40:22. > :40:28.straight forward, where as Mr Sarkozy appeared as irrational,
:40:28. > :40:34.nervous, he was both patronising and appearing as a victim. That's
:40:34. > :40:39.not what we want as President. is Francois Hollande so dull, then,
:40:39. > :40:44.if he's so charasmatic in this debate? I think he has started his
:40:44. > :40:49.campaign one year ago, he has defined a programme, he's sticking
:40:49. > :40:52.to his line, sticking to his ideas. He has very convincing arguments,
:40:52. > :40:56.and he doesn't keep changing his mind just like Mr Sarkozy has been
:40:56. > :41:01.doing. There is also a chance he might be a bit nicer about Britain
:41:01. > :41:06.than Mr Sarkozy has been? I think Francois Hollande is changing his
:41:06. > :41:11.mind, he's proposing things which actually are not correct. Even the
:41:11. > :41:16.number he presented time were not correct. So how could you trust
:41:16. > :41:18.someone who doesn't know what he's talking about, and start to make
:41:19. > :41:23.announcements and criticising Nicolas Sarkozy who is trying to do
:41:23. > :41:26.his best to save France during the financial crisis. Interesting isn't
:41:27. > :41:30.it that most French people don't share your analysis, not a single
:41:30. > :41:35.poll showing Sarkozy will win? Today we had an extra point on the
:41:35. > :41:40.poll today. We can see the French people start. Not enough to still?
:41:40. > :41:44.We will see on Sunday. OK. I'm intrigued by the two of you, you
:41:44. > :41:49.are sitting in the studio in London, discussing French politics, about
:41:49. > :41:53.to face off against each other in a constituency which actually is not
:41:53. > :41:57.in France at all. This is a very, very odd state of affairs, isn't
:41:57. > :42:02.it? I don't know if it is odd, I think it is quite interesting and
:42:02. > :42:06.progressive, this idea that French citizens can live abroad, so they
:42:06. > :42:10.travel with their passport, and their right to vote. They keep this
:42:10. > :42:16.political link to their country. What do you think of this, don't
:42:16. > :42:22.you find it slightly bizarre? at all, for the last 30 years
:42:22. > :42:28.French people have been asking to have a representative for French
:42:28. > :42:31.people living abroad. I think it is a good step. One thing that is very
:42:31. > :42:37.important, Francois Hollande actually voted against it t the
:42:37. > :42:40.socialists are against it, so today it is very good. People are within
:42:40. > :42:43.their rights to move out of France, because they find the tax regime,
:42:43. > :42:49.for example, a bit burdensome, and still retain the right to choose
:42:49. > :42:52.the Government there? It is no question of leaving the country to
:42:52. > :42:59.avoid tax. For whatever reason they leave the country, some of them do
:42:59. > :43:04.leave for that reason, as you know? That is onlyers of the expats. For
:43:04. > :43:08.the 99 % of other French people living abroad, they represent
:43:08. > :43:13.France, and work in French companies, or bring their expertise.
:43:13. > :43:17.Also they come back to France. They have got another% pective of what
:43:17. > :43:21.is going on in France -- perspective of what is going on in
:43:21. > :43:25.France. Nicolas Sarkozy thinks the French people living abroad are
:43:25. > :43:29.very important. Given how we know that French public opinion has
:43:29. > :43:33.appeared to have divided thus far on the basis of the first round,
:43:33. > :43:39.18% going to the French National Front. Isn't it very odd to see a
:43:39. > :43:41.socialist candidate trying to get some of that vote? People who would
:43:41. > :43:44.otherwise vote National Front? Believe me, if you watched the
:43:45. > :43:51.debate this evening, you wouldn't think that Mr Hollande tried to
:43:51. > :43:56.attract any votes. What he said is that he would be fair and tough on
:43:56. > :44:01.security, just like the last socialist Government has been. But
:44:01. > :44:09.he hasn't followed the line of Mr Sarkozy, which has been in the last
:44:09. > :44:15.few weeks, talking about halal meat, swimming pools, women and men being
:44:15. > :44:19.divided in swimming pools. Things that are not real concerns for the
:44:19. > :44:22.French people. Your candidate, Mr Sarkozy, knows he needs to get some
:44:22. > :44:27.of this National Front folk doesn't he? There is no question of getting
:44:27. > :44:31.the vote of the National Front. It is a question of responding to 18%
:44:31. > :44:35.of the population, who has those questions. In the real world he has
:44:35. > :44:40.to get some of that vote in order to be in with a chance, right now
:44:40. > :44:45.it doesn't looks a if he has much of a chance? We will see on Sunday.
:44:45. > :44:52.In the real world, the Telegraph described the National Front as a
:44:52. > :44:56.racist party, that is what it is. Aren't you uncomfortable at the
:44:56. > :45:01.idea of trying to court that vote? A lot of people vote National Front,
:45:01. > :45:06.not because they were for Marine Le Pen, it is because they wanted to
:45:06. > :45:11.show they were not happy about some policies. They want some issues
:45:11. > :45:16.related to immigration, because it is a big problem in France. Until
:45:16. > :45:18.now, the immigration was only the issue of the National Front, and it
:45:18. > :45:25.is now 18% of the population complaining about it.
:45:25. > :45:29.We have to do something about it. Do you think when Monsieur Hollande
:45:29. > :45:35.says he's going to offer Europe another model for how to deal with
:45:35. > :45:40.this economic crisis, is he serious? I think he is. If he gets
:45:40. > :45:46.elected by over 20-25 million French people, I think he would
:45:46. > :45:52.benefit from a strong democratic legislative to put forward some new
:45:52. > :45:56.proposals. He doesn't necessarily want to ask 25 other states to
:45:56. > :46:02.forget about what they have agreed. He does claim there will be a
:46:02. > :46:04.model? Yes, but he says he agrees with fiscal responsibility, he
:46:04. > :46:08.thinks it is very important. He also reminded the French people
:46:09. > :46:14.tonight that the public debt has been doubled under the right-wing
:46:14. > :46:20.Government in France in the last ten years. So fiscal responsibility
:46:20. > :46:30.is not necessarily where he is...That Is not right, it is
:46:30. > :46:35.incorrect. It is incorrect. 250 billion were debts carried on since
:46:35. > :46:40.1974. Also 200,000 billion of debts also from the financial crisis, and
:46:40. > :46:43.all the other countries of Europe had it. So it is not that it is
:46:43. > :46:46.coming from the five years of Nicolas Sarkozy.
:46:46. > :46:52.Thank you very much. Tomorrow morning's front pages,
:46:52. > :46:59.some of them, the Guardian goes with the story of the SIS operative
:46:59. > :47:09.who was found dead in the suitcase, and the coroner unable to discern
:47:09. > :47:17.
:47:17. > :47:27.That's all from Newsnight tonight, Kirsty is here tomorrow after the
:47:27. > :47:48.
:47:48. > :47:51.polls close. Good evening, after a respite from
:47:52. > :47:55.the rain it returns tonight into the morning, across the Midland,
:47:55. > :47:59.southern England and Wales. Heavy downpours in places. Risks of
:47:59. > :48:06.further flooding in one or two spots. Brightening up in the south
:48:06. > :48:10.coast, north of the rainband a fine day. North West of England fine.
:48:10. > :48:13.Feeling cool under the rainband, it should continue to affect parts of
:48:13. > :48:14.the Midland, East Anglia into the afternoon. The southern most
:48:14. > :48:21.They will be rain in the counties, after a bit of rain in
:48:21. > :48:24.the morning, a largely dry day in store. Sunny spells possible, not
:48:24. > :48:28.especially warm, any sunshine and temperature also lift a little.
:48:28. > :48:33.Still remaining cloudy in Wales, further rain into the afternoon.
:48:33. > :48:37.North Wales staying largely dry and bright. You couldn't rule out a few
:48:37. > :48:43.spots of rain. For Northern Ireland there will be sunny spells to take
:48:43. > :48:52.us throughout the day. Western areas a fine day in store.
:48:52. > :48:54.Cloud gathering to the far north later on. Northerly winds really
:48:54. > :48:58.digging in, they will eventually get to southern parts of England
:48:58. > :49:01.and Wales, Friday could be a bit warmer for some of you, with dry
:49:01. > :49:04.conditions around for you for a time. Not completely dry, a few