15/05/2012 Newsnight


15/05/2012

In-depth investigation and analysis of the stories behind the day's headlines with Kirsty Wark.


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As the Greeks head for new elections, and edge closer to the

:00:12.:00:17.

door marked "euro exit", the new French President meets the German

:00:17.:00:20.

Chancellor, and suggests a new direction for Europe.

:00:20.:00:25.

Sworn in and then his plane hit by lightning on route to Berlin, when

:00:25.:00:30.

he finally stood beside Angela Merkel, he made no attempt to hide

:00:30.:00:35.

their differences. TRANSLATION: Greeks must know that we will,

:00:35.:00:40.

through measures of growth, support of activity, we will go towards

:00:40.:00:43.

them. France and Germany tonight are at

:00:43.:00:48.

odds, a formula that can easily unsettle the markets. And as the

:00:48.:00:55.

head of the IMF openly talks about a messy Greek exit, how can we stop

:00:55.:00:58.

the financial contagion spreading all the way to our shores. Also

:00:58.:01:03.

tonight: I feel today is an attempt to use

:01:03.:01:09.

me and others as escape goats, the effect of which will be to ratchet

:01:09.:01:13.

up the pressure on my wife, who I believe to be the subject of a

:01:13.:01:17.

witch-hunt. Rebekah Brooks and her husband charged with conspiracy to

:01:17.:01:20.

pervert the course of justice, come out fighting.

:01:20.:01:23.

The Employment Minister wants British firms to employ British

:01:23.:01:31.

workers, like this one, why do they prefer migrant workers. He says he

:01:31.:01:35.

can't have work, sometimes English people are lazy. Is it because they

:01:35.:01:45.
:01:45.:01:45.

are brighter, better or just cheaper?

:01:45.:01:48.

Good evening, it was against the backdrop of the unfolding Greek

:01:49.:01:53.

tragedy that Francois Hollande made his unexpectedly dangerous journey

:01:53.:01:57.

to Berlin, changing planes after a lightning strike. His mission? To

:01:57.:02:01.

live up to his election promises to set a new direction for Europe. In

:02:01.:02:04.

the event, the joint conference between Hollande and Merkel was

:02:04.:02:08.

fascinating, there was little attempt, especially by the French

:02:08.:02:11.

President to disguise differences between them. Francois Hollande

:02:11.:02:14.

said everything must be put on the table to promote growth, and hinted

:02:14.:02:18.

there could be some room for manoeuvre over Greece. Is this a

:02:18.:02:26.

real change in the mood music. Our diplomatic editor reports.

:02:26.:02:34.

Oh la la, first he was drenched by a cloud burst laying a wreath, then

:02:34.:02:37.

when Francois Hollande took to the air, heading for Berlin, his plane

:02:37.:02:43.

was struck by lightning. All the while, another tempest, the

:02:43.:02:49.

eurozone one gathers force. There is a belief on both sides a belief

:02:49.:02:53.

of strong Franco-German relationship T has been strained by

:02:53.:02:56.

different fill loss fees about austerity, and weaknesses in the

:02:56.:03:01.

French economy, that mean it is no longer an equal relationship, and

:03:01.:03:04.

there is a German suspicion that Germany will be asked to fund the

:03:04.:03:08.

whole of the European Union, which they are not really up for.

:03:08.:03:12.

Arriving delayed in Berlin, President Francois Hollande made it

:03:12.:03:18.

clear he wants changes to the EU's Fiscal Compact, or austerity pact,

:03:18.:03:21.

as well as a change from the old Merkozy style of political

:03:21.:03:25.

management. TRANSLATION: I understand the

:03:25.:03:30.

relationship between France and Germany, as a balanced and

:03:30.:03:35.

respectful relationship. Balance between the two countries,

:03:35.:03:39.

respectful of our political sensablities, and respectful of our

:03:39.:03:42.

partners in Europe and European institutions. We want to work

:03:42.:03:47.

together for the welfare of Europe. But through the mobilisation of all

:03:47.:03:51.

the other countries of the union. France's new President, sworn in

:03:51.:03:57.

this morning, is trying to set a fresh tone. His approach to the

:03:57.:04:03.

euro crisis, like his Citroen, this morning, is a hybrid. He agrees

:04:03.:04:07.

France must run a balanced budget, but he wants new spending to

:04:07.:04:10.

stimulate growth, and suggested tonight he's prepared to revisit

:04:10.:04:19.

existing agreements in order to get it. TRANSLATION: I have explained

:04:19.:04:24.

that I want growth to be not only a word that can be uttered and

:04:24.:04:29.

followed by tangible acts in truth, the best method is to put

:04:29.:04:33.

everything on the table through the informal summit that will take

:04:33.:04:40.

place on the 23rd of May, with the European council on the end of June.

:04:40.:04:45.

The German Chancellorry are briefing out the line that there is

:04:45.:04:52.

so much that unites the two leaders. There are differences, Mr Hollande

:04:52.:04:56.

wants a new eurobond, a new type of debt. The Germans don't like that

:04:56.:05:00.

idea at all. The two leaders disagree on how far they should

:05:00.:05:04.

continue to help the banking sector. That issue is becoming all the more

:05:04.:05:09.

vexed, because of the gathering crisis in Greece. After several

:05:09.:05:14.

failed attempts to form a new Government committed to EU mandated

:05:14.:05:17.

austerity measures, Greece today announced that it will be heading

:05:17.:05:24.

back to the polls. Is its exit from the euro inevitable, the head of

:05:24.:05:28.

the IMF gave this answer. certainly don't hope so, from the

:05:28.:05:33.

IMF point of view. But we have to be prepared for anything. As I said,

:05:34.:05:37.

with endorsement by the PASOK and the Conservative Party, we thought

:05:37.:05:40.

that we had covered all the potential angles, clearly that was

:05:40.:05:44.

not the case. So we have to be technically prepared for anything.

:05:44.:05:51.

This evening, the new French leader told the Greeks he felt their pain.

:05:51.:05:56.

But as for his formula of growth, Chancellor Merkel revealed a

:05:56.:06:01.

certain scepticism about what it really meant. TRANSLATION: Growth

:06:02.:06:09.

is a general term, and I'm pleased that we have agreed on talking

:06:09.:06:14.

about the different ideas in terms of growth, and I'm not worried that

:06:14.:06:19.

we could not have common ground. Possibly we have some different

:06:19.:06:23.

opinions, but I'm really looking forward to our co-operation.

:06:23.:06:28.

It is too early to start talking about a serious rift between France

:06:28.:06:33.

and Germany. But, the eurozone storm clouds are gathering again

:06:33.:06:38.

because of Greece. So the desire to reopen what was meant to be agreed

:06:38.:06:43.

could easily produce more turbulence in the weeks ahead. As

:06:43.:06:46.

you say, it is too early to talk about a serious rift, did you get a

:06:47.:06:54.

sense of any real difference, of posturing and positioning? There

:06:54.:06:57.

was posturing. Monsieur Hollande has been elected President, but his

:06:57.:06:59.

Socialist Party is going in for the parliamentary elections in France

:06:59.:07:05.

in a few weeks time. Everybody in Paris felt he couldn't step back

:07:05.:07:09.

and roll over and accept a few general phrases from Mrs Merkel

:07:09.:07:13.

today, he had to be true to his platform. Particularly looking

:07:13.:07:19.

ahead to those elections. But, even if he was using stom some of those

:07:19.:07:25.

phrases about re-- some of those phrases of revisiting the Fiscal

:07:25.:07:28.

Compact, for underlying effect there are serious differences. If

:07:28.:07:34.

people are talking about a new fund, a couple of hundred million euros,

:07:34.:07:39.

who where will it come from. Monsieur Hollande suggests

:07:39.:07:42.

eurobonds, Germany gets the feeling they will end up paying for those,

:07:42.:07:48.

they are not keen on that idea. There are other serious divergences

:07:48.:07:52.

of view, about serious sums of money, that could make it a

:07:52.:07:57.

difficult relationship. One of the people advising the Syriza leader

:07:57.:08:06.

in efforts to form a Government in Athens with us, and we have an

:08:06.:08:14.

visor to President Hollande with us. You heard -- adviser to President

:08:14.:08:16.

Hollande. You were listening to the speech and he said everything was

:08:17.:08:21.

on the table and looking at policies for growth, was he serious

:08:21.:08:24.

in suggesting something different than the Fiscal Compact with

:08:24.:08:27.

Greece? I'm sorry I didn't get the end of your question. Was he

:08:27.:08:31.

suggesting that there might be a change in the Fiscal Compact, or is

:08:31.:08:41.
:08:41.:08:42.

it going to be exactly the same position for Greece? I think in

:08:42.:08:45.

Francois Hollande's platform, there was a commitment to steer Europe in

:08:45.:08:48.

a new direction. It is very important for Francois Hollande to

:08:48.:08:56.

put growth on the table, as he said. So Angela Merkel today was quite

:08:56.:09:02.

open, maybe not to IRA negotiation of the treaty, but to an add dent

:09:02.:09:12.

dumb, or another agreement, dealing with growth. Growth is on the top

:09:12.:09:16.

of the agenda of Francois Hollande's agenda, and there might

:09:16.:09:24.

be change in the coming weeks, and on the agenda of the French-German

:09:24.:09:34.

relationship in. -- the future. In terms of Greece, did you get a

:09:34.:09:37.

sense that he might change the Fiscal Compact or might be

:09:37.:09:41.

approaching that? I didn't get that. The terms that Greece has signed up

:09:41.:09:48.

to, did you get a sense that might be changed for Greece? About the

:09:48.:09:52.

memorandum? Yes? No, I think the Francois Hollande said he was

:09:52.:09:57.

waiting for the results of the elections, I think the conditions

:09:57.:10:04.

for Greece to stay in the eurozone is on the memorandum. First of all,

:10:04.:10:07.

Francois Hollande wants to know about the results of the election.

:10:07.:10:12.

He said he would be respectful of the Greek people's votes. I think

:10:12.:10:17.

for the moment he's waiting for the results. Do you get any sense that

:10:17.:10:20.

there is going to be any change, it sounds as if it is business as

:10:20.:10:26.

usual, you have to stick to the memorandum? Well, we hope that, I

:10:26.:10:30.

mean after the fact that we are going to have elections in a you

:10:30.:10:35.

few weeks in Greece. We hope that is the message we wanted to send as

:10:35.:10:40.

a political party, in the previous elections, that we need a change in

:10:40.:10:45.

the European strategy orientation. We need a change in order to

:10:45.:10:52.

abandon all this austerity policies that have created all this crisis,

:10:52.:10:56.

that does not resolve the debt crisis problem. We need a change in

:10:56.:11:01.

these kinds of policies. We hope and we are optimistic with the

:11:01.:11:06.

changes that have taken place in other countries in Europe, such as

:11:06.:11:11.

in France, that there is hope in order to change this kind of policy.

:11:11.:11:15.

But you say we don't want any of the austerity plans. The austerity

:11:15.:11:19.

plans will be staying in place. The memorandum stays in place. You go

:11:19.:11:24.

into elections, and the reality is, if you won't stick to the austerity

:11:24.:11:27.

plans, you must be honest with the people and say you will leave the

:11:28.:11:32.

euro, you will have to leave the euro, won't you? No, I don't

:11:32.:11:36.

believe that. I would like to disconnect these two issues. For me

:11:36.:11:43.

it is a totally different issue, remaining in the euro, and

:11:43.:11:45.

abandoning the memorandum of austerity and bail out programme.

:11:46.:11:50.

For me, right now, with these kinds of policies, the austerity policies

:11:51.:11:56.

and the bail out policies, it is one way in order to make the crisis

:11:56.:12:01.

much worse, much more intensive. Since this kind of policies have

:12:01.:12:05.

been implement - these kinds of policies have been implemented in

:12:05.:12:09.

other European countries, in Spain, Portugal, and Ireland, with these

:12:09.:12:13.

kinds of policies, there is a very big, real threat for the eurozone

:12:13.:12:18.

to be dissolved. In my point of view, the other policies,

:12:18.:12:23.

abandoning the austerity policies, and encouraging pro-growth policies,

:12:23.:12:29.

is the only way in order to have a viable eurozone. The only way to

:12:29.:12:34.

try to create jobs, to boost growth, to stimulate investment. This is

:12:34.:12:40.

the only way that the eurozone can deal with the debt crisis. Is there

:12:40.:12:44.

any way, do you think, to renegotiate the Fiscal Compact for

:12:44.:12:48.

the whole of the eurozone? I think it is going to be very difficult,

:12:48.:12:53.

because it is -- Angela Merkel made it clear today that she was not

:12:53.:12:57.

willing to reopen negotiations about the fiscal treaty, but maybe

:12:57.:13:05.

the solution is a third way. I think, as I said before, we need to

:13:05.:13:10.

steer Europe in a new direction, and austerity policies have proven

:13:10.:13:17.

inefficient up until now, and we need to find a way to put growth on

:13:17.:13:27.
:13:27.:13:29.

the same level as the disciplines and social integration. I think if

:13:29.:13:35.

not to renegotiate the treaty, but to put growth at the top in the

:13:35.:13:38.

priorities of the agenda. Angela Merkel still holds the cards, if

:13:38.:13:41.

there is no renegotiation of the Fiscal Compact, that is a central

:13:41.:13:44.

thing. Hollande may get other things on the periphery, but not

:13:44.:13:51.

the central thing he wants? know, the formal, the legal terms

:13:51.:13:56.

of the agreements are not very important. The important thing is

:13:56.:14:00.

what is inside the agreements. If it is not in the fiscal treaty, but

:14:00.:14:04.

if we have an additional agreement, saying that growth is important,

:14:04.:14:10.

that we need to boost the action of the European investment banks, that

:14:10.:14:17.

we are going to implement this idea of project bonds, and that we

:14:17.:14:20.

are...I'm Afraid we have lost the line to Paris. Thank you both very

:14:20.:14:26.

much indeed. Contagion, like the title of a sci-

:14:26.:14:29.

fi horror movie, is the word on the lips of politicians across Europe.

:14:29.:14:34.

There is a deep uncertainty of the economies of every single European

:14:34.:14:38.

country of Greece leaving the euro. Another election in that country,

:14:38.:14:43.

is, on present opinion polling, is unlikely to turn up a result that

:14:43.:14:48.

will change Greece's current direction of channel. Who will be

:14:48.:14:56.

hit the hardest. Would a Greek contagion go with the exit? If for

:14:56.:15:00.

whatever reason the Greek Government feels it can't or won't

:15:00.:15:04.

meet the terms of the second bail out. That in itself would act as a

:15:04.:15:11.

kind of trigger. The ECB, propping up the Greeks in the past couple of

:15:11.:15:15.

years, won't give the money, the second trench from European

:15:15.:15:18.

partners won't come. That on the ground will manifest into something

:15:18.:15:23.

of a bank run. Not unlike what we saw four years ago in Northern Rock,

:15:23.:15:28.

but on a far larger scale. The savers in Greece will want the hard

:15:28.:15:32.

currency, in their hand, rather than potentially a soft currency

:15:32.:15:38.

overnight in their bank account. The problem with that is it is

:15:38.:15:45.

leading to a major problem on the ground .00 million euros has been

:15:45.:15:50.

taken out of Greek banks yesterday alone -- 700 million euro has been

:15:50.:15:55.

taken out of Greek banks yesterday alone. If that continues everything

:15:55.:16:00.

will be gone in 100 days, that brings contagion. People in

:16:00.:16:06.

Portugal, and Italy will say maybe I'm next, maybe I want my hard

:16:06.:16:11.

currency in my mattress rather than in my account. They might move to

:16:11.:16:15.

hard currency zones like Germany, the states, Switzerland or even

:16:15.:16:18.

Britain. All the while the cost of borrowing for Spain, as it has done

:16:18.:16:23.

for the past two days is starting to sore, making a bail out for

:16:23.:16:27.

likely. What about the firewalls, how much money is there to put out

:16:27.:16:32.

the fires? At the moment there is the EFSF, the European Financial

:16:32.:16:38.

Stability Facility. This has remaining funds of �248 billion,

:16:38.:16:44.

after bailing out -- 248 billion euros, this is after bailing out

:16:44.:16:50.

Ireland. There is the ESM, with half a trillion euros, potentially,

:16:50.:16:54.

depending on the contributions the member states might cough up, they

:16:54.:16:58.

haven't all made the contribution yet. Then add in the IMF, that

:16:58.:17:01.

usually makes a contribution in proportion to what the Europeans

:17:01.:17:04.

have put on the able, for every two euros the European institutions put

:17:05.:17:10.

on the table, the IMF will give one euro in bail out money as well.

:17:10.:17:14.

British banks, how much are they in hock for? Not that much. Since the

:17:14.:17:18.

major write-down of March, and the various different bail outs,

:17:18.:17:23.

between them RBS, Lloyd's and Barclays, have about 800 million

:17:23.:17:27.

direct exposure to Greece, and 8.3 to Spain. They have investments in

:17:27.:17:32.

other banks and institutions that are heavily exposed to Greece and

:17:32.:17:35.

Spain. For example, Credit Agricole, heavily exposed to Greece, their

:17:35.:17:40.

shares are down 75% in the last six months. The contagion thing starts

:17:40.:17:44.

to grow pretty big. Baroness Vadera is a former

:17:44.:17:47.

investment banker and Business Minister who played a key role in

:17:47.:17:51.

constructing Gordon Brown's response to the banking collapse of

:17:51.:17:57.

2008. She went on to act as an visor for the G20. What did you --

:17:57.:18:01.

advisor for the G20. What did you make of the meeting between

:18:01.:18:04.

Hollande and Merkel and the tone of it tonight? Hollande is still in

:18:04.:18:07.

election mode, that is something to remember. He has been election at

:18:07.:18:13.

home to win. And there is no growth going to be readily agreed to. What

:18:13.:18:17.

was interesting was his advisor, the interview you had with his

:18:17.:18:20.

advisor, where she was pointing to the compromise direction, which is

:18:20.:18:25.

a sort of addendum, saying we think growth is a very important thing,

:18:25.:18:28.

we will have more money from the European investment bank. That is

:18:28.:18:33.

all fine, but not necessarily going to magic some growth into Europe.

:18:33.:18:38.

Frankly, if growth was that easy to magic, they would have done it

:18:38.:18:40.

already. Though you have heard what Joe was

:18:40.:18:45.

saying as well, from your own view, if Greece does essentially fall out

:18:45.:18:48.

of the euro, do you think the rest of Europe will be able to cope.

:18:48.:18:52.

What about the contagion? logical answer is they ought to be

:18:52.:18:57.

able to cope. First of all, Greece is just 2% of the eurozone economy.

:18:57.:19:03.

People have had two years to provision themselves and to deal

:19:03.:19:06.

with what their exposure to Greece would be. The problem is, that

:19:06.:19:10.

every time politicians have said, this is isolated to Greece, the

:19:10.:19:14.

next thing that has happened is Ireland, and then Portugal, now we

:19:14.:19:17.

have Spain in trouble, Italy will be next. Actually there is no

:19:17.:19:22.

credibility and plausability in the system. So there is a really

:19:22.:19:28.

serious policek of conat that stage. You heard also the members of the

:19:28.:19:31.

Syriza Party, they are not willing to accept the austerity measures,

:19:31.:19:35.

it looks like the next election will throw up a similar problem. Do

:19:35.:19:40.

you think Greece will leave. What is your best guess? It is logical

:19:40.:19:44.

for Greece to leave, I don't think the structure of their economy

:19:44.:19:48.

belongs in the euro. I don't think it is inevitable that they will

:19:48.:19:53.

leave. Fundamentally they are making a false choice. They are

:19:53.:19:57.

essentially saying 70% of Greeks would rather the euro than the

:19:57.:20:01.

drachma, but they don't want to pay the price of it. You heard that.

:20:01.:20:04.

They are facing a false choice. At some point they will be forced to

:20:04.:20:07.

make a real choice, and we don't know how they will respond then.

:20:07.:20:13.

You were talking about his advisor there, but when Hollande was saying,

:20:13.:20:17.

they would come towards them, and policies, do you think there could

:20:17.:20:24.

be any move to Greece to delay a repayment, or something, to ease

:20:24.:20:28.

their pain? I'm sure there can be guestures to ease their pain. But

:20:28.:20:32.

for Greece there is really no getting away are from the fact that

:20:32.:20:36.

they have a structurally difficult economy that is not competitive,

:20:36.:20:41.

and they can't live within the euro. If you are saying that we should be

:20:41.:20:44.

quite prepared for this, but there is a lot more we could do. What

:20:44.:20:49.

else can we do, do you think, to protect ourselves from any

:20:49.:20:52.

contagion? I'm sure they would never say so. But I'm sure there is

:20:52.:20:55.

a plan. The minute they say there is a plan, it creates the

:20:56.:20:59.

impression that Greece is about to leave. So they won't say it. I'm

:20:59.:21:03.

pretty sure there are plans in the banking system, with the ECB, and

:21:03.:21:07.

for the use of the firewall, although the firewall is not

:21:07.:21:13.

actually fully under funded. doesn't really exist. -- Fully

:21:13.:21:18.

funded. It doesn't really exist. How about problems hitting our

:21:18.:21:22.

shores? We have had some exposure to Greece, all of the provisions

:21:22.:21:29.

have been made. I think our problem is not exposure directly to Greece,

:21:29.:21:31.

but exposure to the European banking system, which is very

:21:31.:21:35.

fragile, not just because of Greece, but Spain and Italy. Essentially

:21:35.:21:42.

one of the pieces of collateral damage from the financing that the

:21:42.:21:46.

European Central Bank has been providing, is that French and

:21:46.:21:51.

German banks have dumped their Spanish and Italian bonds, and

:21:51.:21:54.

Italian and Spanish banks have been buying them. They are holding them,

:21:54.:21:58.

and that is very fragile. Thank you very much.

:21:58.:22:01.

Rebekah Brooks, the former chief executive of News International,

:22:01.:22:05.

faces the prospect of a jail sentence, fee if she's found guilty

:22:05.:22:09.

of the three charges of conspiring to pervert the course of justice

:22:09.:22:12.

brought towed by the Crown Prosecution Service. Her husband,

:22:12.:22:16.

Charley Brooks, charged alongside her with perverting the course of

:22:16.:22:19.

justice, during the phone hacking investigations, told the press his

:22:19.:22:26.

wife was the victim of a witch-hunt. And so this already convoluted

:22:26.:22:29.

omniscandal develops another complex curlicue. Rebekah Brooks,

:22:29.:22:32.

her husband, and four others, charged with conspiracy to pervert

:22:32.:22:37.

the course of justice. As we waited for the announcement from the Crown

:22:37.:22:41.

Prosecution Service at 10.00, the official news was scooped ten

:22:41.:22:48.

minutes beforehand, by a statement from Mr and Mrs Brooks. When the

:22:48.:22:51.

couple appeared outside their solicitor's office, late this

:22:51.:22:55.

afternoon, they were angry and defiant. I feel today is an attempt

:22:55.:23:00.

to use me, and others, as scapegoats, the effect of which,

:23:00.:23:05.

will be to ramp chet up the pressure on my wife -- ratchet up

:23:05.:23:09.

the pressure on my wife, who I also believe is the subject of a witch-

:23:09.:23:15.

hunt. One day the details of this case le emerge, people will see --

:23:15.:23:20.

case will emerge, people will see today as nothing more than an

:23:20.:23:24.

expensive side show, and a waste of public money, as a result of an

:23:24.:23:27.

injust and weak decision. The Crown Prosecution Service were

:23:27.:23:30.

handed the file by the Metropolitan Police on the 27th of March,

:23:30.:23:35.

relating to seven suspects. Rebekah Brooks, her husband, Charles Brooks,

:23:35.:23:41.

Cheryl Carter, Miss Brooks PA, Mark Hanna, head of security at News

:23:41.:23:45.

International, there are Brooks chauffeur, employed by News

:23:45.:23:48.

International, Paul Edwards, and Daryl Jorsling, and a seventh

:23:48.:23:52.

suspect, both of whom provided security for Mrs Brooks Brookes,

:23:52.:23:58.

and made by News International. The CPS applies a two-stage test, first,

:23:59.:24:02.

if there is a realistic chance of conviction, and secondly, if the

:24:02.:24:07.

prosecution is in the public interest. Today the CPS announced

:24:07.:24:11.

its conclusions. In relation to all suspects, except the seventh, there

:24:11.:24:15.

is sufficient evidence for there to be a realistic prospect of convibs.

:24:15.:24:20.

I then considered the second stage of the test -- conviction. I then

:24:20.:24:25.

considered the second stage of the test, and I have concluded a

:24:25.:24:28.

prosecution is in the public interest in relation to the six.

:24:28.:24:31.

All have been informed of my decisions this morning. This is a

:24:31.:24:37.

complex case with the need for more than one highlighter pen. The first

:24:37.:24:43.

charge relates to all six suspects. Rebekah Brooks, between the 6th and

:24:43.:24:48.

19th of July 2011, conspired with Charles Brooks, Cheryl Carter, Mark

:24:48.:24:54.

Hanna, Paul Edwards, Daryl Jorsling and persons unknown, to conceal

:24:54.:24:56.

material from officers of the Metropolitan Police Service.

:24:56.:25:00.

the charges don't end there, charged two refers to simply

:25:00.:25:07.

Rebekah Brooks and her former PA, Cheryl Carter, that between the 6--

:25:07.:25:12.

9th of July 2011, they conspired together to permanently remove

:25:12.:25:15.

seven boxes of material from the archives of News International.

:25:15.:25:19.

Indeed all the charges relate to a very short period of time, just two

:25:19.:25:23.

weeks in the summer of 2011, when there were, almost daily

:25:23.:25:27.

revelations and developments in the phone hacking saga.

:25:27.:25:31.

The period the offences are alleged to have taken place begins on the

:25:31.:25:37.

6th July last year. Two days previously, the Guardian Newspaper,

:25:37.:25:40.

carried allegations that the News of the World hacked Milly Dowler's

:25:40.:25:45.

phone, and deleted some of her messages, giving her parents false

:25:45.:25:55.
:25:55.:25:56.

hope. More allegations followed the next day, Madeline McCann's parents

:25:56.:26:04.

and victims of the 7/7 offences had their phones hacked too. Then David

:26:04.:26:08.

Cameron committed to public inquiries into media practices in

:26:08.:26:12.

phone hacking and the police. On the day after that, the 7th July,

:26:12.:26:15.

News International announces it is closing the News of the World. The

:26:15.:26:18.

following day, Andy Coulson was arrested in connection with

:26:18.:26:22.

allegations of phone hacking and corruption. On the 15th of July,

:26:22.:26:25.

Rebekah Brooks resigned as chief executive of News International.

:26:25.:26:31.

Two days later she was arrested, and questioned for 12 hours, before

:26:32.:26:36.

being released on police bail. The two-week period ends on 19th of

:26:36.:26:40.

July, the day Rebekah Brooks gave evidence to a select Commons

:26:40.:26:45.

committee. The final charge relates to the final four days of the

:26:45.:26:50.

period. Rebekah Brooks, Charles Brooks, Mark Hanna, Paul Edwards

:26:50.:26:53.

and Daryl Jorsling, conspired together and with persons unknown,

:26:53.:27:02.

between the 15th-9th July, together to conceal papers and computers

:27:02.:27:08.

from officers of the Metropolitan Police. The penalty is life

:27:08.:27:14.

imprisonment at its maximum. It is something the courts make certain

:27:14.:27:18.

they are not interfered with. far these are only charges, all of

:27:18.:27:22.

the suspects are presumed innocent. Even so, that doesn't mean this

:27:22.:27:25.

isn't politically embarrassing for David Cameron, who, until recently,

:27:26.:27:29.

like previous prime ministers before him, was a friend, who

:27:29.:27:32.

texted and socialised with someone now charged with such a serious

:27:33.:27:39.

crime. Are foreign workers a more

:27:40.:27:44.

attractive prospect for British employers than British-born workers.

:27:44.:27:47.

Will the figures out for unemployment, particularly for

:27:47.:27:55.

youth employment, have anything to do with the ready supply of

:27:55.:28:01.

immigrant labour. Chris Grayling says it is easy to find an

:28:01.:28:07.

immigrant labourer with five years experience, but there is workers

:28:07.:28:11.

close to home too. We will discuss that with our

:28:11.:28:18.

guests in a moment. First Allegra Stratton.

:28:19.:28:23.

He's a rolling stone now, but once someone like Paul would have been

:28:23.:28:28.

into rolling stock. It's late morning in the centre of

:28:28.:28:32.

Crewe, and back in the day a thousand pools would knock out one

:28:32.:28:37.

locomotive a week, now this man is without work, why? If someone said

:28:37.:28:41.

to you the trouble is foreign workers have lots of skills, and

:28:41.:28:45.

with the best will in the world you are not as skilled as them? It is

:28:45.:28:53.

not always the truth. How not? Because there is people who are

:28:53.:29:01.

qualified and that at jobs, but just can't get the jobs.

:29:01.:29:06.

There are things about how you work that are more reliable than how

:29:06.:29:11.

some Brits work? You have a get-up- and-go, which some Brits do not

:29:11.:29:16.

have. Paul, behind us, says he can't get work, because of somebody

:29:16.:29:23.

like you? He can get work. He says he can't? Not possible. Sometimes

:29:23.:29:30.

English people are lazy. I don't know why they don't want to go

:29:30.:29:36.

working in the agencies. Because they think that this is a lower

:29:36.:29:45.

level, yeah. No, everybody can work in England, no problem.

:29:45.:29:49.

The charge is this, the number of foreign workers in the UK went up

:29:49.:29:52.

at the same time as the number of British workers in employment went

:29:52.:29:58.

down. One cafe, Pret A Manger, had been found to employ entirely

:29:58.:30:04.

foreign workers, not a Brit amongst them. We are lazy, not pubgt actual,

:30:04.:30:10.

and not industrious, that is the problem. This is a stark graph of

:30:10.:30:20.
:30:20.:30:23.

Migrationwatch, a think-tank concerned by unchecked immigration,

:30:23.:30:29.

puts it like this. They call it a remarkable coincidence that from

:30:29.:30:35.

2004, and the arrival of eastern European workers, to 201, the

:30:35.:30:40.

number of even European workers rose by 600,000, the unemployed

:30:40.:30:45.

young rose by 450,000. Why don't you work in a warehouse? I have

:30:45.:30:50.

done that. How long did it last? About two weeks. Why not longer?

:30:50.:30:54.

Not many of my friends were there, and they only spoke Polish, they

:30:54.:30:58.

talked around you, I don't like that. There is a job, this one here,

:30:58.:31:02.

it looks all right, why not go for something like that, just to show

:31:02.:31:05.

you can hold something down? would go for that, I have done bar

:31:05.:31:10.

work, the thing is, when I send my CV and application, they will

:31:10.:31:15.

refuse it. Why? There is probably better CVs out there than mine.

:31:15.:31:19.

There is clearly a problem when young people are unemployed and

:31:19.:31:22.

there is jobs available and they are going to migrants. I don't

:31:22.:31:25.

think it tells us stopping immigration will solve youth

:31:25.:31:29.

unemployment, it tells us that young people may not be qualified,

:31:29.:31:34.

the jobs may be insecure and at low wages, and there may be a whole

:31:34.:31:38.

load of other reasons why young people aren't getting the jobs.

:31:39.:31:44.

If the foreign workers, 160,000 hadn't come to the country, you

:31:44.:31:47.

couldn't say 160 young people could have been in work. That is not how

:31:47.:31:50.

it works. But critics of the Government, who don't like the link,

:31:50.:31:54.

think there is something in the fact that a steady supply of keen

:31:54.:31:58.

immigrants means there is less incentive for places to train up

:31:58.:32:03.

British workers, like Pete Waterman has done here.

:32:03.:32:08.

Waterman has a philosophy, help the local kills burnish their careers,

:32:08.:32:15.

by burnishing the local industry. What was the one skill you realised

:32:16.:32:21.

you were not good at, notlessly a mechanical one? Getting up on time,

:32:21.:32:26.

getting here and lasting the day. At no point when at the Jobcentre,

:32:26.:32:30.

did you not say I clearly have a work ethic, I don't know what the

:32:30.:32:34.

problem is? They weren't interested, they wanted to to be you off with

:32:34.:32:37.

cleaning jobs, engineering is something I have always wanted to

:32:37.:32:42.

do. They were just, it is just shocking to me, there is an

:32:42.:32:45.

engineering shortage in this country, they should have

:32:45.:32:49.

encouraged you. Do you think they didn't tailor your job search to

:32:49.:32:53.

you? Not at all. They try to to be you off, cleaning jobs, because

:32:53.:32:58.

there is lots of them about. Some urge a closer examination.

:32:58.:33:01.

That sharp increase in the top line shows youth unemployment climbing

:33:02.:33:06.

up during the recession. As the bottom line, net immigration from

:33:06.:33:12.

Eastern Europe, plateaus. All agree we have a youth

:33:12.:33:17.

unemployment problem, economic recession, and immigration. A

:33:17.:33:20.

troubling trifecta has aligned. The Employment Minister, Chris

:33:20.:33:28.

Grayling is here, along with the entrepeneur, Luke Johnson, who owns

:33:28.:33:36.

high street patisseries, Nicola Smith, and a supplier of Polish

:33:36.:33:42.

food for supermarkets, and Pete Waterman. What are British

:33:42.:33:47.

employers to do, take second best British workers? The reality is it

:33:47.:33:50.

is often easier, quicker, more straight forward to hire somebody

:33:50.:33:54.

in their mid-20s, who has come half way across the continent to find

:33:54.:34:00.

work, and has that level of get-up- a-go, compared with someone coming

:34:00.:34:04.

out of college or university and struggling without experience. If

:34:04.:34:08.

you give those people a chance and get them into an apprenticeship, we

:34:08.:34:12.

can help turn their lives around. Businesses are having it tough

:34:12.:34:16.

themselves, sometimes they don't have the time to make that choice,

:34:16.:34:22.

they need good workers, working fast, well and imaginatively

:34:22.:34:26.

straight away? I was out in my constituency last week, a local

:34:26.:34:31.

house builder, big development, they have 500 apprenticeships,

:34:31.:34:36.

because they have seen eastern workers -- eastern European workers

:34:36.:34:40.

going elsewhere for the jobs. You can't be sure the workers will

:34:40.:34:44.

always be there. What is your opinion on hiring? I'm in favour of

:34:44.:34:49.

hiring locals where you can, we to in various of my companies. We are

:34:49.:34:53.

on our way to creating 1,000 jobs a year, they are tough to fill. There

:34:53.:34:59.

are times when you feel, perhaps, there isn't a culture here of a

:34:59.:35:07.

work ethic, and perhaps some people are having a sense of entitlement,

:35:07.:35:13.

it is a concern. You can be offering a thousand jobs in the

:35:13.:35:16.

catering industry? Yeah, the fact is a lot of British people look

:35:16.:35:21.

down on jobs in particular in the hospitality industry. That is a

:35:21.:35:26.

problem. Attitude problem? I think the facts don't back that up. There

:35:26.:35:30.

are one million people in the UK today working in hospitality in

:35:30.:35:33.

retail. That is one third of all young people employed. There is

:35:33.:35:37.

absolutely no evidence that British workers don't have the work ethic,

:35:37.:35:42.

every month, 300,000 workers, moving off jobseeker's allowance,

:35:42.:35:47.

we have far fewer jobs than before the recession. You are someone

:35:47.:35:50.

looking for employees all the time, you are expanding your business, do

:35:50.:35:53.

you think there is a problem with the work ethic among British

:35:54.:35:57.

workers? A huge one, try to find British people who want to work on

:35:57.:36:01.

Saturday evening or Sunday, or Christmas Day, or New Year's Eve,

:36:01.:36:06.

they want to go out on those days, and somebody has to work. I suppose

:36:06.:36:10.

you might say, that is a hole I dark are you prepared to

:36:10.:36:17.

renumberate them well for working the decision days, -- renumerate

:36:17.:36:22.

them for working on special days, or is it just foreign workers who

:36:22.:36:27.

will do that? There is always minimum wage jobs, there is a

:36:27.:36:31.

question of flexibility, attitude and multitasking. Let me put that

:36:31.:36:36.

to Chris Grayling, there is an entrepeneur in this country, two,

:36:36.:36:40.

in fact, not finding the right staff here? There is certainly a

:36:40.:36:43.

job to be done in turning around the lives of some young people. We

:36:43.:36:46.

have large numbers of young people growing up in communities or

:36:46.:36:49.

families where no-one has worked. They are entering a world they

:36:49.:36:53.

haven't known about. We have to do that. We have to help them take

:36:53.:36:57.

those steps, by getting them into apprenticeships, and take a big

:36:57.:37:00.

step forward in their careers and learn it can be a positive

:37:00.:37:04.

experience in work. You did take, as it were, the slow

:37:04.:37:07.

train to do it, Pete Waterman, you had to turn them around, you were

:37:07.:37:11.

in a position where you could do that? I take a different attitude,

:37:11.:37:16.

I take the attitude that if you train somebody properly, you have a

:37:16.:37:21.

better worker. I have experienced exactly what we hear here, we start

:37:21.:37:26.

at 7.30 in the morning, you say to kids you have to be at work at

:37:26.:37:33.

7.30am, they don't understand what that is. Reuben nef lant? I started

:37:33.:37:36.

work in certain circumstances, people were good to me, I believe

:37:36.:37:41.

that if I get that respect and strength back, those two guys, you

:37:41.:37:46.

saw in that film, particularly that girl, was seven years unemployed. I

:37:46.:37:53.

was told she was unemployable. I have to tell you, she is my star

:37:53.:37:56.

apprentice, she is my only female, not because I won't take female,

:37:57.:38:00.

but she wanted the job. You want people who want to work. It is four

:38:00.:38:04.

years, they need to work for me for four years, it is 15 months, two

:38:04.:38:07.

years before I see a penny from them. But you can afford that?

:38:08.:38:11.

can, because they have turned my business round. It is 15 months

:38:11.:38:15.

before Pete Waterman will see a penny, for people in business just

:38:15.:38:19.

now, that is a long time to wait? It is, it is very tough. We are not

:38:19.:38:23.

in recession, we are close to one. A lot of companies are close to the

:38:23.:38:30.

edge. You need people to be productive. Carrying workers who

:38:30.:38:35.

are not delivering is an expense many businesses can't afford.

:38:35.:38:38.

about the bigger principle, that a lot of foreign workers don't inject

:38:38.:38:44.

as much into the economy as domestic workers do, because they

:38:44.:38:48.

are repatriateing money, and they are not here for long, they won't

:38:48.:38:51.

have as big an impact on the economy. Can you have that come

:38:51.:38:55.

into our thinking? Immigration is important in all aspect of the

:38:56.:39:00.

economy. We need students, we need brains, we need talent here. We

:39:00.:39:04.

shouldn't start erecting barriers to immigration, because of

:39:04.:39:09.

prejudice. I think this is a very bad error. Is that not a danger, if

:39:09.:39:13.

you say British jobs for British workers, that is dangerous stuff?

:39:13.:39:16.

It is not about British jobs for British workers, it is about

:39:16.:39:20.

investing in the next generation. We can't afford to say, these gies,

:39:20.:39:22.

they are 18, growing up in difficult circumstances, let's

:39:22.:39:26.

forget about them. We have to turn their lives around. I keep meeting

:39:26.:39:30.

people who have taken on young people, from difficult backgrounds,

:39:30.:39:35.

turned them round and had exact low the same kind of story that Pete

:39:36.:39:39.

has had. I agree, we need to take on more unemployed people, but the

:39:39.:39:43.

best thing is to get the economy growing again. We saw in 2010, a

:39:43.:39:47.

strong period of economic growth, over that period 300 jobs were

:39:47.:39:52.

created in the private sector, two- thirds of which went to young

:39:52.:39:55.

people. Strong jobs growth is best for young people, not stagnating

:39:56.:39:59.

economy. We don't have a problem with the growth of the economy in

:39:59.:40:02.

the UK. We have the problem with mental problems, people are

:40:02.:40:06.

thinking young people, especially young people, who always have

:40:06.:40:11.

everything, whatever background they are from, they are usually not

:40:11.:40:16.

hungry, they didn't have to worry about delivering newspapers when

:40:16.:40:20.

they were 10 or 11, they were given everything, they have education,

:40:20.:40:24.

and they just think that they should get everything from life.

:40:24.:40:29.

They don't have to work. Is there an issue with employee rights, are

:40:29.:40:32.

people coming into the country more flexible, willing to take less and

:40:32.:40:37.

put up with more? We have a million more unemployed people than four

:40:37.:40:39.

years ago, that is not because people are laceier, but a

:40:39.:40:43.

structural problem in the economy. I do agree employers have to do

:40:43.:40:48.

more. If you look at the numbers of employers offering apprenticeships,

:40:48.:40:54.

it is only 8%, we need help for those facing long-term unemployment,

:40:54.:40:58.

getting rid of migrants won't help. There is lots of Government

:40:58.:41:01.

incentives, but we have to offer jobs at the end. You can't ask

:41:01.:41:10.

somebody to do all of this and there is nothing at the end. That

:41:10.:41:14.

girl you saw, had been on seven schemes w no job at the end, that

:41:14.:41:19.

is not right. Do you think workers coming are from other countries are

:41:19.:41:23.

more willing, not to waive rights, but willing to do the double and

:41:23.:41:26.

triple shift, where other people have kids to go home to, because

:41:26.:41:29.

they are older, whatever, that actually it is a problem for

:41:29.:41:33.

British workers, because they lose out for those kind of reasons?

:41:33.:41:37.

and there is always a trade-off, I'm not suggesting for a second

:41:37.:41:42.

that foreign workers are always better than local workers, I agree

:41:42.:41:46.

employers need to invest. If we are saying to ourselves there is no

:41:46.:41:50.

issue about work ethic, whatsoever, in the culture of this country,

:41:50.:41:56.

that is misguided. There is a huge difference between

:41:56.:42:00.

somebody who is 25, 26, coming half way across the continent to work in

:42:00.:42:05.

the UK, somebody who has just left school coming from a difficult

:42:05.:42:08.

background, no be work experience. We talk about a difficult

:42:08.:42:12.

background, that is an element, but just in terms of general work

:42:12.:42:16.

ethic? We need a transformation of our welfare state, that is what we

:42:16.:42:19.

are doing at the moment. We have to have a situation where the welfare

:42:19.:42:23.

state is not somewhere you can expect to live, it is a ladder up

:42:23.:42:29.

where you climb. All the incentives have to push you towards work. That

:42:29.:42:33.

is we are changing the benefits system so work pays, tougher rules

:42:33.:42:39.

for those not trying to find a job. All that has to happen, we need the

:42:39.:42:42.

employers to provide the opportunities too. People are

:42:42.:42:44.

saying immigration for all sorts of reasons is a good thing. You seem

:42:44.:42:48.

to be saying, and there is a co- relation, a lot of British young

:42:48.:42:53.

people are out of work and a lot of immigrants are in work, you think

:42:53.:42:58.

the two things, they are two sides of one coin? I don't think you can

:42:58.:43:02.

prepare an exact mirror of the two, I'm convinced there is a link

:43:02.:43:05.

between the growth and the number of people coming to Britain to work

:43:05.:43:09.

and some of the unemployment challenges we face, I'm sure of

:43:09.:43:14.

that. You feel the growth in immigration has contributed to

:43:14.:43:18.

unemployment. Do you think it was a mistake to let people in from the

:43:19.:43:22.

European community? There is a direct link. I think the previous

:43:22.:43:25.

Government should have had transitional controls, every other

:43:25.:43:29.

country did. You talk about a million young people unemployed, is

:43:29.:43:32.

immigration leading to higher unemployment? The evidence shows

:43:32.:43:36.

immigration has a small positive impact on employment levels in the

:43:37.:43:40.

UK. We have immigrants creating jobs and growth, that is happening

:43:40.:43:44.

in the UK. There are two things from the chart. Firstly, at the

:43:44.:43:48.

point where unemployment was increasing, levels of migration

:43:48.:43:52.

were stagnating or falling, there is not a co-relation. Secondly,

:43:52.:43:56.

areas of high unemployment in the UK, are areas of the lowest my igs

:43:56.:44:00.

gra. We talk about immigrants, let's talk about British people who

:44:01.:44:05.

haven't got jobs. Kids leave school with no idea of what they are doing.

:44:06.:44:11.

How can we expect kids leaving school, 17 and 18, they have no

:44:11.:44:17.

idea what the profession is. Work is actually fun. You have been here

:44:17.:44:21.

for a long time, you can see it coming up through the schools and

:44:21.:44:24.

attitudes, where does the problem lies? There is a mental problem,

:44:24.:44:31.

first of all, British people, because of many different reasons,

:44:31.:44:34.

but basically because you have a huge empire, and half of the world,

:44:34.:44:38.

or the whole world belonged to you, many British people think that they

:44:38.:44:44.

are better than the rest of the world. And they think that they are

:44:44.:44:47.

too good for certain jobs. And somebody else should be doing them.

:44:48.:44:51.

That is exactly what Luke Johnson was saying, the attitude is we

:44:51.:44:55.

don't have a great record in service, and we see a lot of people

:44:55.:45:00.

coming to this country who are much more interested in looking after

:45:00.:45:04.

other people. And they are saying that we don't have it in our

:45:04.:45:07.

culture, in us is this attitude of entitlement? There are clearly

:45:07.:45:13.

people out there who are not trying. But the unemployment people I meet,

:45:13.:45:17.

the long-term unemployed I meet going around the country are

:45:17.:45:20.

desperate to work. The real challenge is match those people

:45:20.:45:22.

with opportunities and find employers willing to give them the

:45:22.:45:26.

chance. There are people who would love to walk into work tomorrow,

:45:26.:45:29.

who would work extremely hard for an employer who will give them a

:45:29.:45:32.

chance. As we have been discussing, getting people off benefits and

:45:32.:45:37.

back to work is one of the coalition Government's most

:45:37.:45:43.

cherished goals. Embarrassing today, they announced the termination to

:45:43.:45:48.

do just that, under A4e. The Government has been auditing its

:45:48.:45:50.

commercial relationship with the company, and said one such contract

:45:50.:45:54.

in the south-east of England would end, because continuing it would be

:45:54.:46:00.

too great a risk. Chris Grayling is still here. We ask him about that.

:46:00.:46:04.

The findings of the audit identified no evidence at all of

:46:04.:46:08.

fraud in the company. Pretty desperate failure of judgment in

:46:08.:46:12.

hiring this company? My view, and I have said it from the start, with

:46:12.:46:16.

all of the contracts. If people don't fulfil the terms of the

:46:16.:46:19.

contracts we are prepared to terminate them. We have done that.

:46:19.:46:24.

Took a long time to do that? found out there was a problem two

:46:24.:46:28.

months ago, we have sent in an audit team, we have not identified

:46:28.:46:32.

fraud, but we have identified lax management practice, bringing them

:46:32.:46:35.

into breach of contract, and we have taken a decision to terminate

:46:35.:46:39.

it. I expect contractors to operate within the letter of the agreement

:46:39.:46:43.

reached with us, and if they don't, we are prepared to act. That is the

:46:43.:46:46.

end of the line, there is no contact between the Government and

:46:46.:46:50.

that company? This is one of the contracts. Had we discovered

:46:50.:46:55.

fraudulent behaviour, we would have finished all the contracts. We can

:46:55.:47:00.

trust everything else is in order? Everything else is in order, the

:47:00.:47:05.

work programme has had thumbs up for from those looking at it. We

:47:05.:47:07.

will look carefully at all contractors to make sure there is

:47:07.:47:11.

no problems in the future. Thank you very much. That is all from

:47:11.:47:15.

Newsnight. In China they can build a three storey building in nine

:47:15.:47:25.
:47:25.:47:48.

days, maybe they will branch out to It's cold out there, a touch of

:47:48.:47:50.

frost first thing, would you believe. It will be a sunny start,

:47:50.:47:54.

it is said to be a fine day. There will be one or two showers, nothing

:47:54.:47:58.

like the extent or the ferocity of showers some of us have seen over

:47:58.:48:03.

the last couple of days. Dry and bright sums it up for most of us.

:48:03.:48:08.

Lighter winds and more sunshine feeling warmer. Temperatures up to

:48:08.:48:12.

14 degrees. Showers inland from the south coast of England, along the

:48:12.:48:15.

South Downs, a shower or two. South-west England had a nice day

:48:15.:48:19.

on Tuesday, more of the same on Wednesday. Broken cloud, sunny

:48:19.:48:23.

spells, fairly light winds as well. Some of the best of the sunshine

:48:23.:48:27.

across Wales will be towards the west coast. More cloud developing

:48:27.:48:30.

inland. For Northern Ireland it will tend to cloud over, with rain

:48:30.:48:34.

knocking on the door. By the time we reach the end of the afternoon.

:48:34.:48:37.

Some of that cloud will be spreading into the west of Scotland

:48:37.:48:39.

as well. Further east we hold on to the brightness through the

:48:39.:48:44.

afternoon too. Enjoy it, on Thursday it turns wet, across many

:48:44.:48:48.

northern parts of the country. Wet and chilly, some places struggle to

:48:48.:48:52.

get out of single figures all day long. Further south, well the cloud

:48:52.:48:57.

will increase, but hopefully the rain will hold off, so if you are

:48:57.:49:00.

going to the first day of the first test at Lords, you will see some

:49:00.:49:04.

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