:00:14. > :00:18.Think a Greek exit from the euro might be a good thing? The deputy
:00:18. > :00:23.PM says you are deluded. Faced with the shrinking economy at home, Nick
:00:23. > :00:28.Clegg was in Berlin today, and says Britain faces dire consequences if
:00:28. > :00:32.Greece leaves. I don't think the break-up of the eurozone, or Greece
:00:32. > :00:37.coming out of the eurozone, can in any way be described as a recipe
:00:37. > :00:43.for success. Instead, I see it as a harsh begin injure, if it were to
:00:43. > :00:48.happen, of even greater instability. For a view of what the future holds,
:00:48. > :00:55.we hear from the former Foreign Secretary, and head of the high
:00:55. > :01:01.street chain Next, Simon Wolfson. Why did the Prime Minister put his
:01:01. > :01:07.culture secretary in charge of the BSkyB deal, when he told him weeks
:01:07. > :01:15.before he was in favour of the deal. Disgraceful misuse of public money,
:01:15. > :01:21.a whistle-blower tells MPs that corruption at A4e was widespread.
:01:21. > :01:26.The company is accused by the audit of systemic abuse, and this time on
:01:26. > :01:34.the coalition's watch. We will ask Chris Grayling if we can trust how
:01:34. > :01:44.public money is being spent. A pizza base on prescription for �17.
:01:44. > :01:49.
:01:49. > :01:53.We reveal the vast sums of money paid out for glutton-free food.
:01:53. > :01:56.Nick Clegg has warned of dire consequences if Greece leaves the
:01:56. > :02:01.euro. Unemployment would go up and a grinding slowdown in economic
:02:01. > :02:05.activity, he says. His words come as latest figures show the economy
:02:05. > :02:12.shrank more at the beginning of the year than previously thought.
:02:12. > :02:18.Suggesting the double-dip recession could be prolonged.
:02:18. > :02:23.Greece only accounts for half of a per cent of Britain's exports, the
:02:23. > :02:28.equivalent of a corner shop in a big city. However its leaving the
:02:28. > :02:35.euro would be catastrophic, according to the Deputy Prime
:02:35. > :02:41.Minister. No-one should labour under the false hope that some how
:02:41. > :02:45.Greece leaving the eurozone can provide instant relief to the
:02:45. > :02:51.problems we face. But Mr Clegg's partner in Government, David
:02:51. > :02:56.Cameron, was an awful lot more equivocal. The eurozone is at a
:02:56. > :03:02.crossroads, it either has to make- up, or it is looking at a potential
:03:02. > :03:09.break-up. That was a view shared in Germany, when the Bundesbank said
:03:09. > :03:14.the Greek exit would be regretable, but manageable. Further bail out
:03:14. > :03:18.fees should be paid to Greece once Athens makes the cuts announced
:03:18. > :03:23.last March. It appears a schism is developing in Europe, between those
:03:23. > :03:28.who think Europe will get over a Greek exit, and those who think it
:03:28. > :03:32.should be avoided at all costs. Lofg aside the horrendous impact of
:03:32. > :03:37.a return to the drachma for Greece itself what would it mean here to
:03:37. > :03:42.the UK economy. The immediate but most intannable
:03:42. > :03:44.impact will be on confidence. -- intangible impact will be on
:03:44. > :03:48.confidence. You wouldn't know it from those enjoying the sunshine
:03:48. > :03:54.today, but Britain is in recession, and figures show it is even deeper
:03:54. > :03:57.than we thought. A break up of the single currency would accentuate
:03:57. > :04:01.and prolong that. British firms sitting on a cash pile worth
:04:01. > :04:06.billions, would hold off even longer before hiring new staff or
:04:06. > :04:11.making big investments. That would create another credit crunch, where
:04:11. > :04:16.banks would be aed frayed to lend to each other and other countries,
:04:16. > :04:20.damaging exports. 40% of British exports are sold into the eurozone,
:04:20. > :04:26.and 15% to the weakest countries in the eurozone. If there was to be a
:04:26. > :04:31.Greek exit, it makes selling goods into those markets extra tough. Add
:04:31. > :04:34.in a stronger pound, you can see why British exporters are
:04:34. > :04:40.particularly worried. The best estimates of what would happen if
:04:40. > :04:45.the Greeks left in a disorderly fast,, is a serious recession in
:04:45. > :04:50.Europe, with the loss of up to 6% of GDP across the euro area over
:04:50. > :04:55.the next two to three years, that is the optimistic case pr. It to be
:04:55. > :05:00.a serious financial crisis then the element of damage to GDP would be
:05:00. > :05:05.worse than that, and the impact on UK exports would be more severe.
:05:05. > :05:08.The most severe impact will be felt in the services sector.
:05:08. > :05:13.The services sector is the single biggest component in the British
:05:13. > :05:17.economy, it includes our lawyers, doctors, dentists, and, of course,
:05:17. > :05:21.our bankers. The instability caused by a Greek exit from the eurozone
:05:21. > :05:25.could be immense, especially to the financial services sector. In the
:05:25. > :05:28.past few weeks we have already seen some turmoil in the financial
:05:28. > :05:30.markets, equity prices falling sharply in the UK as well as
:05:30. > :05:37.elsewhere. We are already seeing the effects on the financial sector
:05:37. > :05:40.in the UK. If we do see a wider eurozone meltdown o even just a
:05:40. > :05:45.contained break-up, -- meltdown or even a contained break up, that
:05:45. > :05:52.will have an effect on the banking system. Because that is so
:05:52. > :05:58.important to the economy, it would have wider impact. British tourists
:05:58. > :06:01.might benefit, the cost of a holiday in Corfu would half, and
:06:01. > :06:06.other Greek products would be cheaper. Either way, contingency
:06:06. > :06:13.plans are being drawn up all over Europe to mitigate what many fear
:06:13. > :06:17.would be Europe's Lehman moment. Earlier I spoke to the Deputy Prime
:06:17. > :06:25.Minister, I started by asking whether the break-up of the
:06:25. > :06:29.eurozone is something he could countenance? No, I don't believe
:06:29. > :06:32.the eurozone will break up. It is hitting the most serious crisis
:06:32. > :06:35.since it was formed, and arguably this is the most serious economic
:06:35. > :06:41.and political crisis that the European Union as a whole has faced,
:06:41. > :06:44.I would say, since the early 1970s. With the benefit of hien sight, it,
:06:44. > :06:48.of course, -- hindsight, it was of course tragic that the monetary
:06:48. > :06:53.union was established in a way in which the rules were not adhered to,
:06:53. > :06:56.and the homework, the reforms that should have accompanied the launch
:06:56. > :07:00.of the monetary union, never took place, partly, frankly, because
:07:00. > :07:04.money was so cheap, money was sloshing around. Everyone was able
:07:04. > :07:07.to borrow money at extraordinarily low rates, everyone lived on the
:07:07. > :07:11.never-never. That has caught up with the whole European continent.
:07:12. > :07:17.We have to deal with this huge hangover of that credit binge,
:07:17. > :07:27.which went on for so long. And I think it is really important that
:07:27. > :07:30.the eurozone now re constitutes itself, on a more balanced footing,
:07:30. > :07:34.that requires monetary regulation, long-term competitiveness, making
:07:34. > :07:38.sure the banks are properly capitalised. Sharing some kind of
:07:38. > :07:42.fiscal arrangement, so richer parts of the eurozone could help poorer
:07:42. > :07:47.parts and so on. What is missing is putting all those things together n
:07:47. > :07:52.a grand bargain, at the same time. The point is, David Cameron has
:07:52. > :07:57.said very clearly, make-up or break-up. He has countenanceed that,
:07:58. > :08:02.does it borey you? I don't think the break -- worry you? I don't
:08:02. > :08:10.think the break-up of the eurozone or Greece coming out, can in any
:08:10. > :08:13.way be described as a recipe for success. I see it as a harbing er,
:08:13. > :08:16.of greater uncertainty and instability. Not just in Greece or
:08:16. > :08:21.south-east Europe, but across Europe, in the UK, and the global
:08:21. > :08:25.economy as a whole. When our economies are as fragile as they
:08:25. > :08:30.are, I don't think anyone rationally could advocate that
:08:30. > :08:33.degree of further instability as a route out of the problems we
:08:33. > :08:37.presently face. That is what, by the way, the Prime Minister
:08:37. > :08:40.believes as well. Can you paint a picture of us of what you think
:08:40. > :08:45.Britain would be like if Greece left the euro, practically, what
:08:45. > :08:50.would we see? I think the potential risk is what you get then is an
:08:50. > :08:58.immediate question mark about the ability of Portugal, Spain, Italy
:08:58. > :09:04.and other, bigger countries, to pay their way, sort out their public
:09:04. > :09:07.finances, and rescue their sick banking system. That in turn has a
:09:07. > :09:11.knock-on effect on the British banking system which, is very
:09:11. > :09:15.exposed, one way or another, to those other economies. Then, of
:09:15. > :09:22.course, that, in turn, could set off a chain of uncertainty. The
:09:22. > :09:24.thing that is most person ni, to an emerging economic recovery, is more
:09:24. > :09:29.uncertainty, more big question marks about the future. That is
:09:29. > :09:32.what we must avoid, I have no doubt in my own mind, that Greece exiting
:09:32. > :09:36.from the eurozone increases rather than decreases those question marks.
:09:36. > :09:40.Apart from a sense of uncertainty, do you think it would mean more
:09:40. > :09:47.unemployment, less growth, that we would stay in recession for longer?
:09:47. > :09:50.I have no doubt in my mind that if you have a chain reaction in the
:09:50. > :09:56.eurozone, where you get this contagion effect, as they call it
:09:56. > :10:00.in the jargon, from Greece to other, bigger countries, that will
:10:01. > :10:04.undoubted lie lead and could lead to higher unemployment --
:10:04. > :10:08.undoubtedly lead and could lead to higher unemployment, less foreign
:10:08. > :10:13.investment, companies sitting on their hands. Not investing in new
:10:13. > :10:17.plant machinery, and factories like this. In other words, a grinding
:10:17. > :10:23.slowdown in economic activity, which is already fairly fra guy. It
:10:23. > :10:29.is something that I think nobody -- fairly fragile, I think it is
:10:29. > :10:33.something nobody could rationally wish for. You say that the economy
:10:33. > :10:38.is on the road gently to recovery, people would say we are going the
:10:38. > :10:42.other way in recession, downgraded growth today, but the rest of the
:10:42. > :10:46.eurozone is stable? It is disappointing enough that the
:10:46. > :10:49.figures for GDP in the first quarter were negative, and they
:10:49. > :10:55.have been downgraded further. I think it means we need as a
:10:55. > :10:58.Government to shift up a gear, to redouble our efforts, to do more to
:10:58. > :11:04.help support demand in the British economy, whilst, of course, at the
:11:04. > :11:08.same time, making sure that we continue to enjoy the confidence of
:11:08. > :11:12.the market, so we have the space to do those things. What do I mean by
:11:12. > :11:18.that? Well, I think the fact that we have done this heavy lifting
:11:18. > :11:21.over the last two years, to prove our credentials in sorting out the
:11:21. > :11:24.sky high structural deficit that this country has inherited from the
:11:24. > :11:29.previous Government, should now be used, that credibility should now
:11:29. > :11:33.be used as a guarantee, if you like, as an insurance kol policy to get
:11:33. > :11:38.more money into the British -- insurance policy to get more money
:11:38. > :11:42.into the British economy, into homes, and small and medium-sized
:11:42. > :11:45.enterprise who can't get hold of credit from banks at reasonable
:11:46. > :11:50.rates, and creating more jobs for young people. With me now to
:11:50. > :11:56.discuss the difficulties in the eurozone and at home, the chief
:11:56. > :12:02.executive of Next, and Tory peer, Lord Wolfson, and David Miliband,
:12:02. > :12:06.is here also. I'm wondering when you look at the eurozone, Simon
:12:06. > :12:09.Wolfson, do you think we are beyond political solutions, what does the
:12:09. > :12:14.hard-headed businessman want to do? I think the biggest problem in the
:12:14. > :12:17.eurozone is being largely ignored. The biggest problem in the eurozone
:12:17. > :12:20.is the structural lack of competitiveness of places like
:12:20. > :12:26.Greece and Spain. Over the last ten years wages in Spain and Greece
:12:26. > :12:29.have gone up by 20-30% relative to Germany. Their goods are simply too
:12:29. > :12:35.expensive. It used to be cheap to go on holiday to Spain or Greece,
:12:35. > :12:39.now it is expensive. That lack of competitiveness means they have
:12:39. > :12:43.between 20-25% unemployment. How can an economy dig itself out of a
:12:43. > :12:46.hole when it has 25% unemployment. Even those people advocating
:12:46. > :12:51.helping them are saying you have to have less austerity. You are sort
:12:51. > :12:53.of saying free them from this, get them out? It is difficult to see
:12:53. > :12:57.how anything other than devaluation can get them out of the hole they
:12:57. > :13:01.are in. That means leaving the euro? Exactly. David Miliband, it
:13:01. > :13:06.is ironic that such a deeply undemocratic institution like the
:13:06. > :13:10.EU is now having its fate decided by the electorate in Greece?
:13:10. > :13:15.don't accept that, what is happening is that Greece, a
:13:15. > :13:18.relatively small part of the European economy, with a deep-
:13:18. > :13:23.seated set of problems, that weren't address two or three years
:13:23. > :13:26.ago, is threatening to upend the whole of the European project. The
:13:26. > :13:30.economics and politics are pulling in opposite directions. The first,
:13:30. > :13:35.best solution, is actually to keep Greece in. To avoid the risks that
:13:35. > :13:39.are attendant on its department tue, but just mudling along, and failing
:13:39. > :13:43.to address the lack of debt mutualisation, on the one hand, the
:13:43. > :13:50.financial instability in the Spanish banks, remember Spain and
:13:50. > :13:58.Greece are not in the same catagory. You think they are mudling along?
:13:58. > :14:04.There has been a chronic lack of leadership. What has happened since
:14:04. > :14:08.the famous walk on the beach in Deauville, and President Sarkozy
:14:08. > :14:12.basically rolled over, for the past few years you have had Mrs Merkel
:14:12. > :14:16.with no counter balance in Europe to Germany orthodoxy. The one hope
:14:16. > :14:19.is the election of President Hollande in France does change the
:14:19. > :14:23.balance. There is a chance, not to put off reform, but to combine
:14:24. > :14:29.reform, with a change to this austerity package, which frankly,
:14:29. > :14:36.is killing any chance of growing the European economy. Is Hollande a
:14:36. > :14:41.game-changer here, he spooked the austerity central politicians
:14:41. > :14:45.hasn't he? He has, unfortunately, a little less austerity, there will
:14:45. > :14:51.be austerity in Spain and other places anywhere, but it won't get
:14:51. > :14:58.them out of the hole. It comes back to the lack of competitiveness. The
:14:58. > :15:02.Germans are to lend more money to keep things going, there is no
:15:02. > :15:05.state solution here, it is just a Band Aid. Do you think we have to
:15:05. > :15:09.see Merkel cave on this one? That is down to the German people.
:15:09. > :15:13.Ultimately the German people and the Government are the people being
:15:13. > :15:16.asked to pay. I don't think that for British politicians or
:15:16. > :15:19.businessmen to dictate to the German people, they have to make
:15:19. > :15:26.that decision themselves. Do you notice the rhetoric changing now
:15:26. > :15:30.since Hollande won, do you think the left here is learning lessons
:15:30. > :15:36.from Hollande? Remember Prime Minister Monti, a centreist
:15:36. > :15:40.technocrat, and in Spain, they are desperate for a way out of this
:15:40. > :15:42.Bermuda triangle they have got. On the one hand they have deficits and
:15:42. > :15:46.debts, and then financial institutions and then no growth.
:15:46. > :15:49.They have to break out of that. The election of President Hollande
:15:50. > :15:53.offers them a chance to join the debate they can't start but want to
:15:53. > :15:56.be part of. I think what has happened is collective austerity,
:15:57. > :16:00.everybody cutting their budgets at the same time has fallen foul of
:16:01. > :16:03.the basic rules of economics, if consumers aren't spending and
:16:03. > :16:07.businesses aren't investing, export markets are down and Government
:16:08. > :16:12.starts cutting. Germany is doing well on it? It is exporting to
:16:12. > :16:17.China. The truth about the rest of the eurozone and us is more than
:16:17. > :16:22.50% of our trade is with each other. We are a case study of that in the
:16:22. > :16:26.UK. I guess the business model, if these countries, if the pigs,
:16:26. > :16:32.receipt let's say, were not doing well as independent parts of your
:16:32. > :16:35.venture, you would let them go, you can't do that politically?
:16:35. > :16:39.someone is so burdened with debt, they never have a chance to pay you
:16:39. > :16:42.back, they can't go out and get a job, because they are so busy
:16:42. > :16:46.labours to pay your debt, then you have to say you will have to write
:16:46. > :16:50.some of that debt off. You will have to put them back in a position
:16:50. > :16:54.where they can begin to grow. I can't see how that will happen
:16:54. > :16:58.without devaluation. One thing I don't agree with David, I don't
:16:58. > :17:03.think Europe can borrow its way out of a debt crises. What about the
:17:03. > :17:07.bigger question of a referendum on EU membership, it is looking almost
:17:07. > :17:10.certain that Labour would put it in the next election manifesto, should
:17:10. > :17:13.they? I voted in the House of Commons last year against a
:17:13. > :17:15.referendum to be held at the moment. The priority is jobs and the
:17:15. > :17:19.priority is getting to grips with this eurozone cry is is. The
:17:19. > :17:21.tragedy in Britain at the moment -- crisis. The tragedy in Britain at
:17:21. > :17:25.the moment, is on the economics the Government are backing the wrong
:17:25. > :17:32.horse, which has led to a double- dip recession. On the politics they
:17:32. > :17:35.have withdrawn to the edge Europe. When people say to me, look this
:17:36. > :17:39.fiscal pact, are you for it origins it, I'm against it for different
:17:39. > :17:42.reasons to David Cameron. He's against it on political ground this
:17:42. > :17:45.fiscal pact, which is about the here and now of the European
:17:45. > :17:49.economy. I'm against it on economic grounds, that is the agenda that
:17:49. > :17:53.British people want to address. Sure, you can come to questions of
:17:53. > :17:58.the democratic deficit in Europe, what exists today is a delivery
:17:58. > :18:02.deficit, and the lack of leadership is an absolutely chronic problem.
:18:02. > :18:06.This is beigeer question, it will increase as a bigger - bigger
:18:06. > :18:09.question, it will increase as a bigger problem. Would you call for
:18:09. > :18:13.a referendum on something that is clearly a big part of what the
:18:13. > :18:18.British public are talking about? I'm sure that Ed would advise me,
:18:18. > :18:22.rather than me advising him, if I want to offer him advice I will do
:18:22. > :18:26.that through him and not through you. It is a empt iting offer you
:18:26. > :18:28.are giving me. There is -- tempting offer you are giving me. There is a
:18:28. > :18:31.bigger game here, what is the politics and economics of the
:18:31. > :18:35.future of Europe. I think it is very important that we understand
:18:35. > :18:38.that for 40 years British Governments, Tory and Labour, Mrs
:18:38. > :18:44.Thatcher and Tony Blair, have insisted Britain has to be at the
:18:44. > :18:48.top table. The truth today is we are not in the room. Would you go
:18:48. > :18:51.for a referendum on this? I don't think so, the membership of the EU
:18:51. > :18:55.is another matter all together. We have to focus on preparing Britain
:18:55. > :19:01.for the impending crisis in the eurozone, there is a lot that can
:19:01. > :19:05.be and needs to be done. If someone wrote you a note saying
:19:05. > :19:10.something would be a great thing, would you assume they were neutral
:19:10. > :19:15.enough to oversee a judgment about that thing. That is the question
:19:15. > :19:22.the Prime Minister faces after another day of the Leveson Inquiry.
:19:22. > :19:26.The inquiry was told that Jeremy Hunt had written to his boss four
:19:26. > :19:30.weeks before he was put in charge of the judicial decision that he
:19:30. > :19:35.thought the deal was a good idea. We watched the day in court.
:19:35. > :19:40.In this massive sprawling inquiry, there have been many highlights,
:19:40. > :19:46.but perhaps the most incendiary part was the publication last month
:19:46. > :19:50.of the 163-pages of e-mails, that suggested, at least, a remarkable
:19:50. > :19:54.level of collusion, between a company making a commercial kid bid,
:19:54. > :19:59.and the minister deciding the -- commercial bid, and the minister
:20:00. > :20:03.deciding the fate of that bid. For the most part the e-mails were
:20:03. > :20:06.written by this chap, Frederic Michel, head of corporate affairs
:20:06. > :20:12.for News Corporation in Europe. There were reports back to his
:20:12. > :20:18.colleagues about his contact with this chap. Adam Smith, was, until
:20:18. > :20:22.recently, special advise Tory the Culture Secretary, Jeremy Hunt. --
:20:22. > :20:30.adviser to Culture Secretary, Jeremy Hunt. Today we got to hear
:20:30. > :20:34.from both people. Frederic Michel repeatedly had the question, did
:20:34. > :20:41.the e-mail reflect what he had said, or had he puffed himself up to
:20:41. > :20:45.impress his boss. My memos, internal e-mails, were an accurate
:20:45. > :20:49.account of conversations we had. it that you believe this is a
:20:49. > :20:53.communication with the Secretary of State, through the mouth of Mr
:20:53. > :20:57.Smith? I believe that whatever Mr Smith tells me represents the view
:20:57. > :21:03.of the Secretary of State. Time and to imagain, Mr Michel denied that
:21:03. > :21:07.there was -- time and time again Mr Michel denied there was anything
:21:07. > :21:11.improper with this contact. Time and time again he also denied he
:21:11. > :21:15.had any clue of what Jeremy Hunt's view of the bid was. It is
:21:15. > :21:20.something I can't say. Counsel for the inquiry seemed to have some
:21:20. > :21:26.trouble with this account of events. Particularly as he began to take
:21:26. > :21:31.the witness through pages and pages of e-mails. One in particular, from
:21:31. > :21:35.January 23rd of 2011. Again, it is a report back from a
:21:35. > :21:39.conversation with Smith, decribing Jeremy Hunt's view, it is almost,
:21:39. > :21:43.he writes, game over for the opposition. He says that he
:21:43. > :21:47.specifically said he was keen to get the same outcome and wanted JRM,
:21:47. > :21:51.that is James Murdoch, to understand he needs to build some
:21:51. > :21:55.political cover over the process. Later he says, that they would get
:21:55. > :22:00.there in the end, and that he shared their objectives. That means
:22:00. > :22:04.only one thing, that he shared the ultimate objective of News
:22:04. > :22:08.Corporation, which was to secure the remaining shares in BSkyB.
:22:09. > :22:14.with due respect, you wouldn't take that leap in terms of interpreting
:22:14. > :22:18.it. Next up, was, Adam Smith, he's already resigned from his job as
:22:18. > :22:23.special adviser to hunt hut hunt, over this affair. He told the
:22:23. > :22:27.inquiry that he saw his role at the time as acting as a sort of point
:22:27. > :22:31.of contact for the interested parties in the bid. However, under
:22:31. > :22:34.questioning, he conceded that the only interested party that he had
:22:34. > :22:39.any contact with, whatsoever during this whole time, was, News
:22:39. > :22:44.Corporation. As Mr Smith approached to give
:22:44. > :22:49.evidence, he gave the briefest glance at Frederic Michel, who was
:22:49. > :22:52.leaving. Mr Smith refused to accept that his old boss was always a
:22:52. > :23:00.committed supporter of the bid, that he had already made up his
:23:00. > :23:09.mind. Today, though, he was presented with a memo. Written to
:23:09. > :23:14.David Cameron on the 19th 2010, he writes, James Murdoch is pretty
:23:14. > :23:18.furious at Vince Cable's referral to Ofcom. He writes that if they
:23:18. > :23:26.block their media sector they will suffer for years. He thinks it
:23:26. > :23:31.would be totally wrong to cave into the Mark Thompson/Channel
:23:31. > :23:34.4/Guardian line that this represents substantial change of
:23:34. > :23:40.control. In terms of his judgment he was favourable to the bid?
:23:40. > :23:43.I suppose the personal view there was, yes. This personal view wasn't,
:23:43. > :23:48.as it were, a revelation, it is true it has been communicated
:23:48. > :23:56.privately to the Prime Minister, but it is a view which you knew any
:23:56. > :24:01.way? And had been publicly stated. I asked you a quarter of an hour
:24:01. > :24:04.ago was he supportive of the bill, you gave me a non-committal answer.
:24:05. > :24:08.We are now reaching a point where you might agree with me that he was
:24:08. > :24:12.supportive of the bid. One month after he wrote this memo, hupbtd
:24:12. > :24:16.Hunt was handed responsibility for -- Jeremy Hunt was handed
:24:16. > :24:23.responsibility for the bid. Vince Cable was striped of the role,
:24:23. > :24:26.having been caught on tape by undercover reporters that he had
:24:26. > :24:30.declared war on Rupert Murdoch. There were questions for Jeremy
:24:30. > :24:33.Hunt, he insisted he followed the advice of independent regulators
:24:33. > :24:37.and hasn't done anything wrong. There are questions too for the
:24:37. > :24:43.Prime Minister, not least, if Vince Cable was unsuitable to decide the
:24:43. > :24:47.bid, because he had declared strong views on the subject, why was
:24:48. > :24:51.Jeremy Hunt suitable to decide the bid, when he had already declared
:24:51. > :24:55.his views, although in the opposite direction. Tomorrow Adam Smith will
:24:55. > :25:03.continue his evidence, perhaps as early as next week, his former boss
:25:03. > :25:07.too will take the stand. Is the welfare-to-work business, a
:25:07. > :25:11.multibillion pound scandal, that is what a former auditor told
:25:11. > :25:15.parliament in secret this week, now we can reveal the testimony in full.
:25:15. > :25:22.He claims there is an unethical culture at companies like A4e,
:25:22. > :25:26.fraud is rife, and the bosses are dishonest, and untalented, but pay
:25:26. > :25:33.themselves handsomely. Public money is being chronically misused. The
:25:33. > :25:37.document put before MPs describes serious problems at another body
:25:37. > :25:42.called Working Links, part-owned by the Government.
:25:42. > :25:47.We will put that to Chris Grayling in a moment. First we have this.
:25:47. > :25:51.This is a story about a company that has just been cleared of
:25:51. > :25:54.systemic fraud. About civil servants who don't see the point of
:25:54. > :25:58.investigating that company's past activities, and a committee of
:25:58. > :26:05.companies who didn't want you to hear the evidence you are about to.
:26:05. > :26:08.The company is A4e. Its only source of income is contracts from the
:26:08. > :26:11.Government, main low placing unemployed people into jobs. A
:26:12. > :26:17.business -- main low placing unemployed people into jobs. A
:26:17. > :26:21.business that made Emma Harrison, the head, millions last year. A man
:26:22. > :26:27.called Eddie Hutchinson has told companies the company tolerated
:26:27. > :26:33.systemic fraud. Mr Hutchinson joined A4e in October 2010, about a
:26:33. > :26:36.year before David Cameron made this official visit to the firm. Soon
:26:36. > :26:39.the whistle-blower became concerned of the incidents of frauds and
:26:39. > :26:44.irregularities, there is no suggestion that anybody in these
:26:44. > :26:47.pictures is involved. But, the whistle-blower says, he ran up
:26:47. > :26:51.against a complete absence of corporate governance and
:26:51. > :26:56.accountability. On Tuesday, the whistle-blower told this committee
:26:56. > :27:00.of companies, sitting in private, that the frauds generally involved
:27:00. > :27:04.falsifying the outcome of job placements, for the which the
:27:04. > :27:09.company was paid thousands at a time. He said some of the issues
:27:09. > :27:12.had existed for a considerable time, including systemic fraud, that had
:27:12. > :27:19.been perpetrated and continued to be undertaken within the company's
:27:19. > :27:23.operations. It gets curiouser, a year before Mr Hutchinson joined
:27:23. > :27:29.the company, this report, leaked to Newsnight two months ago, was drawn
:27:29. > :27:34.up by one of his predecessor, in it there is a warning of potential,
:27:34. > :27:38.systematic failure, to mitigate the risk, towards fraud. Knowing the
:27:38. > :27:42.DWP was suggesting A4e, we handed this report to civil servants, now
:27:42. > :27:47.we know what happened to it. What should be published and what
:27:47. > :27:51.should not be published when it comes to an internal investigation?
:27:51. > :27:55.Once the committee went into public session, the civil servant in
:27:55. > :28:02.charge told MPs his investigators were focusing on the current risk
:28:02. > :28:07.of fraud in A4e, not those revealed in the 2009 document. You were
:28:07. > :28:10.happy to say that only three, A4e, it tells you nothing about the
:28:10. > :28:15.company, does it? Let me say it again, that report says they
:28:15. > :28:19.believe there could be fraud in nine case. A4e as a company believe
:28:19. > :28:24.they did further investigation to conclude only three of them were
:28:24. > :28:32.fraudulent. You are quite happy. am not quite happy, my letter makes
:28:32. > :28:36.it very clear I am now reviewing every single one of the nine cases.
:28:36. > :28:41.When Mr Hutchinson, the whistle- blower, found out about this report
:28:41. > :28:51.he was puzzled. The civil servants had already been assured that
:28:51. > :28:51.
:28:51. > :28:56.nothing was wrong before this. He This is what Mr Hutchinson has to
:28:56. > :29:00.say about the bosses of A4e, and another company called Working
:29:00. > :29:05.Links, where he worked and claimed to have found similar evidence of
:29:05. > :29:09.fraud. While many people employed in these organisations are honest,
:29:09. > :29:12.highly capable and talented individuals, I do not see the same
:29:12. > :29:16.characteristics in others in the most senior positions in these
:29:16. > :29:21.companies, whose interests, it would appear, is to serve only
:29:21. > :29:26.themselves, regardless of unethical behaviour persisting around them.
:29:27. > :29:31.He says it was disgraceful misuse of Government and taxpayer funding,
:29:31. > :29:34.characterised by unethical behaviour, mismanagement,
:29:34. > :29:38.inadequate corporate governance and risk management. And excessive
:29:38. > :29:43.payments, in the form of salaries and bow news et cetera. Paid to
:29:43. > :29:50.those who head up these organisations. In short, I see it
:29:50. > :29:54.as a multibillion pound scandal. Both A4e and Working Links, deny
:29:54. > :29:58.widespread fraud within their organisations.
:29:58. > :30:01.A4e told us in statement tonight, the majority of allegations made by
:30:01. > :30:05.Mr Hutchinson are unfounded and unstrew. From the evidence we have
:30:05. > :30:10.seen, we can state the remaining small number of allegations, which
:30:10. > :30:14.had any substance, were fully examined, in all but one of those
:30:14. > :30:19.cases, it was concluded there was no case to answer. None of the
:30:19. > :30:23.issues raised prove there was systemic fraud, at A4e, all relate
:30:23. > :30:26.to historic contracts. Chris Grayling joins me now. Let's go
:30:26. > :30:30.through some of the quotes from Eddie Hutchinson now. The incidents
:30:30. > :30:34.of fraud and irregularities was a major problem for the company, ever
:30:34. > :30:37.increasing volume of frauds, a multibillion pound scandal. Is this
:30:37. > :30:42.something you are going to reinvestigate? Let's be clear.
:30:42. > :30:46.First of all, important to say this is not about the coalition's work
:30:46. > :30:51.programme. There is no suggestion in any of this, the NAO, the
:30:51. > :30:55.National Audit Office, has given it a completely clean bill of health.
:30:55. > :30:59.We have ring-fenced the taxpayer, the money into welfare-to-work is
:30:59. > :31:03.paid for by companies like A4e themselves, we only pay them months
:31:03. > :31:10.down the track when someone is in work. There is a lot of contracts
:31:10. > :31:13.that have been awarded, this comes 2010, 2011, when you were in power?
:31:13. > :31:18.We are talking about the tailend of the contracts introduced by the
:31:18. > :31:22.previous Government. The ones we scrapped a few months into taking
:31:22. > :31:30.office. Paul Mason made reference to the document made two months ago.
:31:30. > :31:33.Two months ago we decommissioned a detailed investigation. We sent in
:31:33. > :31:36.independent accountants, and called in a third firm of independent
:31:36. > :31:40.accountants to look at the issue. Are you saying it is completely
:31:40. > :31:46.clean now? They have come back to us and said they have found no
:31:46. > :31:50.evidence of systemic fraud. What they did find was evidence of lax
:31:50. > :31:55.management in one contract, I terminated the contract. If I find
:31:55. > :31:59.it again I will terminate other contracts. We have not found
:31:59. > :32:04.evidence of systemic fraud. There has been no contract issued since
:32:04. > :32:10.this was looked under, all those contracts are now ended?
:32:10. > :32:15.contracts have all ended, more than a year ago. This is from 2010-2011,
:32:15. > :32:20.it can't have ended, he is talking about that? The work programme took
:32:20. > :32:24.over from all programmes in 2011, it is a payments by results. We
:32:24. > :32:28.don't pay anything other sthan a small attachment fee until they
:32:28. > :32:32.have kept something in work for six months. At that point the taxpayer
:32:32. > :32:36.get a good deal. Is this a fit and proper company? What we have here.
:32:36. > :32:39.That is a simple question, is it a fit and proper company, from
:32:39. > :32:43.everything you have heard here? There are question marks about the
:32:43. > :32:47.evidence delivered to the select committee. This are question marks
:32:47. > :32:54.about the individual who gave that evidence. I have sent in. What does
:32:54. > :32:57.that mean, you don't believe him? won't sit in the media and give a
:32:57. > :33:02.detailed examples. I have significant doubts about the
:33:02. > :33:07.information to the select commity. I have sent our independent
:33:07. > :33:12.solicitors in to see if there is systemic fraud. They said no, they
:33:12. > :33:14.had found in one contract lax management, and I terminated the
:33:14. > :33:19.contract immediately. This company something you and the Government
:33:19. > :33:22.want to be associated with? I have to be careful. What I can't do is
:33:22. > :33:26.just terminate contracts without evidence, possibly on the say so of
:33:26. > :33:31.a former employee, who stayed for a few months. What I should do, lodge
:33:31. > :33:38.clo, is send in the accountants, and the independent auditors. And
:33:38. > :33:42.they have not found evidence of Isis temic fraud. You didn't --
:33:43. > :33:48.Systemic fraud. You didn't send them in to look at allegations in
:33:48. > :33:53.2009, and this is what we are talking about 2010/11? The things
:33:53. > :33:57.talked about we are looking at. And we are also calling on former
:33:57. > :34:01.Labour ministers, to release to us the contracts. We can't see as
:34:01. > :34:07.ministers the documents before 2010. We are asking them to make those
:34:07. > :34:12.documents public so, we can see what previous ministers, including
:34:12. > :34:17.Margaret Hodge, who was Employment Minister in the last parliament.
:34:17. > :34:22.this was a fraudulent benefit claimant, you would be in there
:34:22. > :34:27.like a tonne of bricks, why not here. If somebody walked in and
:34:27. > :34:31.said this woman is dodgy, you would not expect us to racket on the hoof
:34:31. > :34:35.and confirm up dodgey. You have to be very careful when a whistle-
:34:35. > :34:39.blower, about whom there are certainly question marks, and makes
:34:39. > :34:43.allegations which is not consistent in what independent auditors have
:34:43. > :34:47.said. A quick question on the Leveson Inquiry before, was Jeremy
:34:47. > :34:52.Hunt the right person to put in charge in a quasi-judicial role, in
:34:52. > :34:57.a bid he clearly favoured. Was that a misjudgment by the time? The key
:34:57. > :35:00.point about Jeremy Hunt, clear all the way through. He took all the
:35:00. > :35:05.independent advice he was given, at each stage of the process, he
:35:05. > :35:10.called in the appropriate external advice. He already had a memo
:35:10. > :35:14.saying hunt unhunt was in favour of the bid, why would he do that?
:35:14. > :35:17.the hunt had been cleared publicly before that about his view. He said
:35:17. > :35:21.nothing was consistent. He took over a prohe is is, he followed the
:35:21. > :35:25.letter of the process, he took the independent advice he was supposed
:35:25. > :35:28.to take. He took the advice and followed the rulings, suggestions
:35:28. > :35:37.and advice. He think he behaved completely properly in managing the
:35:37. > :35:42.process. Lt most people order pizza picking up the phone, some do it
:35:42. > :35:46.with a prescription from the NHS. The health service spent �20
:35:46. > :35:51.million on glutton-free prescriptions, including cakes and
:35:51. > :35:58.biscuits for people who have an intolerance for wheat and glutton.
:35:58. > :36:05.What was not recorded is the handling figures. One NH Trust was
:36:05. > :36:10.led to spend �17 on a single pizza base. Many worry the hidden costs
:36:10. > :36:20.of prescriptions is giving people a bad name. We will ask if the cost
:36:20. > :36:23.
:36:23. > :36:33.is prohibitive and should the NHS pay at all. Spring time in the Lake
:36:33. > :36:42.
:36:42. > :36:47.District, where nicer for a little picnic.
:36:47. > :36:56.OK, I admit it, it is not the healthiest food I could have chosen.
:36:56. > :37:02.All these types of foods are available for free on the NHS.
:37:03. > :37:06.So how can this be happening? With an estimated one in 100 of us
:37:06. > :37:10.having coeliac disease, the NHS's resources are being asked to
:37:10. > :37:17.stretch to fatty foods like these, all available on prescription, from
:37:17. > :37:24.your doctor. I think it is quite perverse,
:37:24. > :37:27.considering the fact that we are facing time of global obesity. This
:37:28. > :37:33.country is now the fattest nation in Europe. As clinicians we should
:37:33. > :37:39.be doing what we think is best for our patients and their health. We
:37:39. > :37:43.are sending the round message to people if we are prescribing foods
:37:43. > :37:47.that are high in sugar and processed cash hide demonstrate.
:37:47. > :37:54.rural areas like Cumbria, the local pharmacy is the nearest source of
:37:54. > :37:59.food for coeliacs, they have an intolerance to glutton, found in
:37:59. > :38:05.wheat, Barlow and rye. Eating it can lead to debilitating health
:38:05. > :38:09.problems. Prescribing it is costing the NHS dear. Across the Pennines
:38:09. > :38:16.in Rotherham, an investigation into the rising costs led to an
:38:16. > :38:22.unappetising discovery. One prescription comes to mind, the
:38:22. > :38:27.cost of the two pizza bases was �8.99, we incurred handling charges,
:38:27. > :38:33.which made the total cost of prescription �35 for two pizza
:38:33. > :38:42.bases. Here is how it breaks down, two glutton-free pizza bases come
:38:42. > :38:48.in at �8.95, admin is �10, handling and delivery costs �13, �1.77
:38:48. > :38:54.covers formcy costs. Lofg the NHS with a bill of �-- leaving the NHS
:38:54. > :38:59.with a bill of �33.29, four-times more than the original product. It
:38:59. > :39:05.is not the only example. Dr Fayyaz Chaudri overhauled the system in
:39:06. > :39:10.Cumbria. His reforms also uncovered some indigestible hidden costs.
:39:10. > :39:15.was something we weren't really aware of until we actually started
:39:15. > :39:24.analysing the whole scheme. We were quite shocked by some of the costs
:39:24. > :39:31.we saw that there were, occasions when there was a bread loaf costing
:39:31. > :39:34.�2.50, and there was a handling fee of �32. We approached leading
:39:34. > :39:44.manufacturers who blamed extra charges on the wholesaleers. They
:39:44. > :39:46.
:39:46. > :39:52.told us they would be keen to investigate any relevant cases.
:39:52. > :39:57.The arguments are having an impact on people like Geoff Martin, he
:39:57. > :40:00.lives in Oxfordshire. Another area reviewing whether to continue
:40:00. > :40:09.funding glutton-free products. He reLois on his prescription to
:40:09. > :40:19.ensure a decent range of food. is a lifetime Complaint, when you
:40:19. > :40:21.
:40:21. > :40:26.have it, there is no cure for it. There is no remedy. The only
:40:26. > :40:31.solution is eating food that is glutton-free. It is different if
:40:31. > :40:36.you live near a large supermarket, this one in the Lake District
:40:36. > :40:42.stocks a big range of glutton-free products. It it is more expensive
:40:42. > :40:47.than normal food. Which is why the NHS is being asked to provide
:40:47. > :40:52.staples like bread and pasta. Only last year coeliac qu.ish oud
:40:52. > :40:56.guidelines saying foods like -- issued guidelines that foods like
:40:56. > :41:00.this should be prescribed, only in exceptional circumstances. We have
:41:00. > :41:04.heard from five NHS Trusts who haven't even issued the guidelines.
:41:04. > :41:08.We have been told that some people are getting these prescriptions
:41:08. > :41:14.from their doctors, even though they haven't been diagnosed with
:41:14. > :41:19.coeliac disease. When we reformed the prescribing of glutton-free
:41:19. > :41:25.products, the minority of people were accessing treatments and
:41:25. > :41:35.didn't have a diagnosis of coeliac disease. We have a diagnostic
:41:35. > :41:39.pathway, to make sure all patients with access to the products have a
:41:39. > :41:43.definite diagnosis of coeliac disease. If they are not diagnosed
:41:43. > :41:47.formally they shouldn't been entitled to the prescriptions at
:41:47. > :41:51.all. GPs need to be aware of that. Never the less, in Cumbria and
:41:51. > :41:57.elsewhere, the numbers of people being diagnosed are going up. For
:41:57. > :42:02.many of them, prescriptions of glutton-free foods, are an
:42:02. > :42:07.invaluable service. But hand-outs of cakes and biscuits, increasingly
:42:07. > :42:12.there being seen as rations, which the NHS can't afford.
:42:12. > :42:15.We ask for an interview with a minister from the Department of
:42:15. > :42:25.Health, nobody was available. They have since issued a statement
:42:25. > :42:36.
:42:36. > :42:42.With me now, Jeremy Woods, managing director of glutton-free company,
:42:42. > :42:47.and David Craig, order of Fleeced, locking into Government waste. Does
:42:47. > :42:55.it really cost that -- looking into Government waste. Is there really
:42:55. > :43:00.that much to do with cost, the price is exorbitant? Ten years ago
:43:00. > :43:04.the only way coeliacs, and it is a very debilitating disease. We must
:43:04. > :43:07.remember they have to have glutton- free food. Ten years ago the only
:43:07. > :43:13.way of getting it was through the pharmacies. Nowadays many
:43:13. > :43:18.supermarkets, as you showed in the film. A lot of food does not have
:43:18. > :43:21.glutton in, that they can eat. They can buy alternatives to the stuff
:43:21. > :43:28.they can't? A lot of the supermarkets have special fixtures
:43:28. > :43:33.for glutton-free food. If we follow the example of Norway, where the
:43:33. > :43:39.Government issues those prescribed with coeliac's disease with
:43:39. > :43:43.vouchers, and can redeem with a scannable barcode.
:43:43. > :43:47.Are we pulling the wrong people -- putting the wrong people in charge
:43:47. > :43:51.of this, or would it happen whatever was in charge? When it
:43:51. > :43:58.comes to the NHS, it is such a hopelessly managed organisation
:43:58. > :44:08.nothing surprises me. A couple of figures, ten years ago we had 12
:44:08. > :44:09.
:44:09. > :44:16.hospital beds per manager, now it is down to four managers. In 2006
:44:16. > :44:25.we knew it was a catastrophy, it would never work, two of the major
:44:25. > :44:30.splierd said they didn't want any part of it. As an NHS stakeholder
:44:30. > :44:35.does it strike you as slightly ridiculous that you can't buy
:44:35. > :44:41.Avastin, a cancer judge, but a blueberry muffin on prescription?
:44:41. > :44:48.You can't believe the NHS, the only way ten years ago was to get a
:44:48. > :44:54.prescription from a pharmacy. You could say the NHS is slow to wake
:44:54. > :44:59.up to there beg more products available. It is really the met --
:44:59. > :45:03.being more products available. It is really the method we are arguing
:45:03. > :45:09.about here. Will people need more vouchers, will we feel better about
:45:09. > :45:13.the price of a pizza base? If it is a good idea, but with the NHS it
:45:14. > :45:19.will take five to ten years to adopt it. You can't be defeatist,
:45:19. > :45:24.and say what can be done not really what happens? The NHS has suffered
:45:24. > :45:30.for years from appallingly bad top leadership. The management leftful
:45:30. > :45:36.NHS, I have worked with -- managing level of the NHS, I have worked
:45:36. > :45:46.with them years, and they speak management that nobody understands.
:45:46. > :45:47.
:45:47. > :45:51.Why do you think that level is so predictably bad? The NHS, I'm
:45:51. > :45:55.speechless, it is so badly managed, it wastes so much money. Whenever
:45:55. > :45:58.somebody tries to change the NHS, because their managers can't work
:45:58. > :46:03.with people, they bring in consultants, they are the only
:46:03. > :46:07.people who speak the same language as NHS manager. It is a
:46:07. > :46:14.catastrophic situation. We have 17,000 people a year die in the UK
:46:14. > :46:20.unnecessarily, because we can't match the same survival rates as
:46:20. > :46:25.other countries. The NHS say they are shocked, will it change?
:46:25. > :46:30.should, we have to be careful that solebacks don't lose the food
:46:30. > :46:34.available to them. It is a question of the economics of the delivery
:46:34. > :46:38.method, there is plenty of solutions as I have outlined. What
:46:38. > :46:45.we mustn't allow them to do, is say they can't have prescription food,
:46:45. > :46:50.they should be free to make their own choice.
:46:50. > :47:00.The Times has Tory MPs saying Greek MPs force a referendum, and David
:47:00. > :47:05.
:47:05. > :47:13.Cameron facing demands in the Greek The Independent, Cameron knew Hunt
:47:13. > :47:23.would back the BSkyB bid, and the more Levitt. Plenty more tomorrow
:47:23. > :47:45.
:47:45. > :47:48.more Levitt. Plenty more tomorrow night, that's all tonight. Goodbye.
:47:48. > :47:53.There's more very warm sunny weather to come over the next few
:47:53. > :47:57.days. We will find an easier low breeze on Friday. Particularly
:47:57. > :48:01.across the south on Friday. -- easterly breeze on Friday.
:48:01. > :48:09.Particularly across the south. A dry and sunny day. High thump
:48:09. > :48:12.temperatures to the west of the Pennines. It will be dry and sunny.
:48:12. > :48:15.Temperatures in the south-east won't be as high today. There will
:48:15. > :48:18.be that noticable breeze. That will just make it feel a little fresher,
:48:18. > :48:23.but still the sunshine will be very strong. Most of the south-west it
:48:23. > :48:31.will be a fine day, very warm start across Wales as well. Those
:48:31. > :48:36.temperatures wide low getting into the mid-20s in the sunshine. A
:48:36. > :48:40.lovely say in Northern Ireland, temperatures like today. High
:48:40. > :48:45.temperatures if inland in Scotland. Dry with no thundery showers. That
:48:45. > :48:49.low cloud takes a while to clear away. Should be sunnier and warmer
:48:49. > :48:53.on Saturday. Temperatures into the mid-20s in Manchester Friday and
:48:53. > :48:57.Saturday. High temperatures to come across the southern half of the UK.