25/05/2012 Newsnight


Can Scotland gain independence? Will the English mind? Jeremy Hunt's former wing man faces Leveson. Is Spain trying to lose Eurovision? With Emily Maitlis.

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Next week it will be the Culture Secretary having to explain himself


to Lord hef will lef, today we learned that lawyers -- Lord


Leveson, today we learned that lawyers warned him off the BSkyB


bid, and then he was in charge of the decision himself. Will he be


hearing the same thing he told his special adviser, Adam Smith. Then


you had meeting with Mr Hunt? That's right. Can you remember


precisely what he said. To the best of my recollection is everyone here


thinks you needing to, is what he said. The Deputy Chairman of the


Conservative Party is here to tell us what we should make of the


revelations. The SNP want the people of Scotland to say Yes Yes


Yes to an independent Scotland. the parliament can run education,


why not the economy. If it can be trusted to protect our own people,


why can't we protect the country. Also tonight, as Catalonia and


Spain's fourth largest bank teeter on the brink. Is this the


Eurovision they and everybody else want to lose.


Hello, good evening. The Leveson Inquiry has rapidly become


Westminster's version of Wimbledon. Endless hours of early summer


diversion with a revolving cast of exotic character. For the Culture


Secretary rbgts Jeremy Hunt, there is little amusing --, Jeremy Hunt,


there is little amusing for the drip, drip ammunition for his


critics. Today the inquiry heard he was warned by his lawyers not to


mention the bid to Vince Cable. After weeks of the world discussing


his likely demise, Jeremy Hunt, the Culture Secretary, was given double


protection. From below, the man he sacked came out in his support. And


from above, the man who refuses to sack Mr Hunt did the same. You are


all over the front of the newspapers today. Way before Levitt


got to work, David Cameron was up with the lark, and on ITV's setee,


he was by no mean chillaxed. He did act impartially, because he took


independent at every stage, and he followed independent advise. I


didn't want anybody to have the job, I wanted Vince Cable, the existing


secretary to go on and do the job. We heard of close contact between


Frederic Michel, and the former adviser Adam Smith. The 191 phone


calls and 799 texts exchanged in 11 months. Mr Smith, who said he felt


under bombardment, said he couldn't remember telling Frederic Michel


that it would soon be game over for the bid's opponents. But he could


imagine having a conversation along those lines. On other conversations


he was more vague. What about the reference to judicial review, Mr


Smith. Do you think there was a discussion about that? There may


well have been a discussion about it. There may well have been, or


there was a discussion? I can't remember. How much to News Corp's


likes was Mr Hunt's special adviser. It is an e-mail from last year.


This is the one that I do regret the most. By this stage I was


probably coming towards the end of my tether, as it were, and I sent


him a text to get him off my back. But I certainly don't think anybody


in the department would have said that's what I had been doing, and I


certainly ofn't doing anything on their behalf. But in hindsight I


shouldn't have sent it. It was an attempt to molify him. Adam Smith


was told to resign after the department's permanent secretary,


Jonathan Stephen, saw the e-mails and felt they -- Jonathan Stevens,


saw the e-mails and felt they were inappropriate. I struggled to


understand why, as what seems to be, he came under intense pressure, he


didn't talk to somebody about that. It didn't need to be me, it could


have been someone else. The inquiry heard when Vince Cable was in


charge, on the very day Mr Hunt was warned off lobbying him, by


departmental lawyers, he pressed the Prime Minister to intercede. So


what did the permanent secretary think of Mr Hunt's time in charge?


Mr Stevens, who said they worked in a small office, stressed Jeremy


Hunt had always been scruplous about his quasi-judicial role,


handling the bid. But then Mr Stevens had been unaware what Adam


Smith had been up to until hours before the sacking. Mr Smith was


asked about events in the small office in the time before the event.


Was the mood relaxed? No, it was very pressured and one of the most


stressful I had experienced. said you agreed you had just been


doing your job and left the office at 8.30pm that evening. That have


the reflection of the conversation between myself and the other


special advisers. The next morning he arrived to find Mr Hunt had been


having meeting, then Mr Hunt met him. Can you remember precisely


what he said? To the best of my recollection, is that everyone


there thinks I needing to. And go he did, his boss, Mr Hunt, remains.


It is his turn before Mr Leveson on Thursday, on Monday it is Tony


Blair. The Deputy Chairman of the party is


with me now. Nice of you to come in. The crucial allegation this evening


is Jeremy Hunt misled parliament when he said he had made absolutely


no interventions. We now understand that he tried to make those


interventions. He didn't intervene, the memo he sent the Prime Minister


is absolutely clear, I have it here. He said it would be totally wrong


for the Government to get involved in a competition issue, which has


to be decided at arm's length. However, he did think we should


meet to discuss the policies issues thrown up afterwards. He tried to


set up a meeting with the Business Secretary after he had been told


not to? He tried to set it up, after the decision was going to be


taken. The decision needed to go to the Competition Commission by the


31st December, the following month what he did, it was his policy area,


he was responsible for media ownership. It was his policy area


it was natural he wanted to reflect on the issues involved, discuss


them in Government, once the regulator, the Competition


Commissioner had decided whether or not to refer the bid. He was given


advice, 19th of November, it would be unwise to do so, it would be


unwise to tell Vince Cable what he thought. And then he set up a


meeting, or tried to set up a meeting with that memo through the


Prime Minister as well. Let's be clear he didn't send that memo to


Vince Cable. He sent it to the Prime Minister? He did not send it


to Vince Cable, he sent nothing to Vince Cable. Why not if there was a


recommendation from the lawyers that it would be unwise to do so?


The memo says, in November, Ofcom will issue their report by 31st of


December, it would be wrong of Government to get involved. But he


does think that they should discuss any policies thrown up as a result,


in other words, afterwards. lawyers in your department to say


not to do something, would you issue a memo to do the thing you


were warned not to do. He didn't do that. Wouldn't it have stopped you


from writing a memo asking to do what you had been told not to do?


He makes it absolutely clear, that there will be issues to be


discussed, big policies about media ownership, once the regulatory body,


the Competition Commission has been told not to refer. He has been told


not to talk to the Business Secretary, and then he attempted to


do so? He does not send a memo to the Business Secretary. He asked


for a meeting with him? He suggests to the Prime Minister that once all


this is over, once the regulator has decided, yes then there will be


a need to look at the general question of media ownership. Given


he sent that memo, was it wise for the Prime Minister to ask Jeremy


Hunt to be responsible for the bid. Was there no-one else available,


knowing what he knew then about Jeremy Hunt and's position?


Prime Minister took the cabinet secretary's advice on, that the


cabinet secretary took legal advice. The cabinet secretary looked at


everything Jeremy Hunt had said previously in public. He knew what


Jeremy Hunt thought before he gave him the position? He was quite


satisfied that the statements Jeremy Hunt had issued earlier,


long before, and don't forget he was shadow Culture Secretary. The


cabinet secretary was quite satisfied, having taken legal


advice that those statements would not amount to helping him prejudge


any of these issues, and they didn't. It must strike you as quite


odd that after he is given responsibility that he asks Ofcom


if he can share the report but not with interested parties. Why would


you want to ask that, though? you are dealing with the


competition issue like this h you are negotiating on things like the


undertakings that you are going to require. You are obviously


negotiating with the person that has put in the bid. There a lot of


contact. Negotiating in favour of one side and not the other?


Absolutely not. The permanent secretary, by the way, completely


coroborated Jeremy Hunt's evidence to parliament, that he did not


favour the bid. The permanent secretary goes out of his way,


today, to say that at every turn he took the advice of the regulator,


and limited his own discretion. Let's look at some of Adam Smith's


words. He said he had to resign because he had created a perception


of impropriety. You heard Adam Smith in that clip, he was told the


night of Rupert Murdoch's evidence he would be -- James Murdoch's


advice that he will be all right, and then told the next morning that


most people there thought he should go, because of the headlines,


presumably. Is that the right way to treat an adviser, a junior


employee in his office? It was the scale of the texts and the


inappropriateness of some of them. By Adam Smith afterwards realised.


Which was clear the night before? It became much clearer the


following day. The sheer scale, the number of texts. After the


headlines told him that? After everybody had gone through the e-


mails and texts. Jeremy Hunt told him he was doing his job. You know,


as I do, they are very intertwined those roles, Adam Smith wouldn't


have gone off on a leg without Jeremy Hunt knowing what he was


doing? He wouldn't have resigned if he hadn't accepted he had gone too


far and acted inapropriately. One point here, he was clearly under


pressure, not just from those in favour of the bid, there was the


BBC. Doesn't it feel a little bit shameful for someone to take the


rap for something that comes from higher up? He was the one doing the


texting. There were others opposing the bid, Channel 4, the BBC,


lobbying the department all the time. This was a young man, under


enormous pressure. Thank you for coming in.


As Scotland was bathed in sunlight and blue skies, was the best advert


the nationalists could have hoped to, as they linked arms, fixed


grins and launched the campaign for independence. But the Scottish


Government doesn't want the referendum until 2014, that is a


long time to hold a smile. The yes yes campaign's preference is to


keep the Queen and the pound. We look at how it could work, the


report contains flash photography. It is often called the most


successful union the world has ever seen. It is certainly made for a


striking flag. The two crosses have more or less


lane comfortably over each other for 400 years, in just over two


years it could look so different. The question for us, as we begin


this journey, is how do we mobilise that sentiment. From the beginning


the Scots were agrieved that the Red Cross overlaid the blue one,


today the descendants of that agrieved party, launched that


campaign -- launched the campaign for independence. We want a


Scotland that is greener, in the words of the declaration, greener,


fairer and more prosperous. If the parliament can run education, why


can't it run the economy. If it can be trusted to run the health


service, why can't had represent Scotland internationally. If it can


be trusted to protect our own people, then why can't we protect


the country, and do so without the obscenity of nuclear weapons.


Ahead of this launch, the Save The Union campaign, sought to spike


their opponents' guns. Not yet up and running, they released an


opinion poll, it showed only 33% of Scots would opt for independence,


57% would reject it. They also dug into the views of the SNP voters,


polling of them suggested 58% of those who voted for the SNP last


May, would back independence. 28% of SNP voters opposed it.


The SNP say they are not surprised by this morning's polling. That is


why, they say, they need a two-and- a-half lead-in time to the


referendum. To give people time to get used to the arguments on how


defence and social security would work post independence. There has


been possibly a slight change in language. The SNP appeared to know


they had independence diehards in the bag, and they need to reach out


to middle Scotland. That is why this morning they made a slightly


different argument. That is our preference would be to remain


within sterling, we think that would be good for Scotland in terms


of the stability of that. We also think there would be advantages,


big advantages to the rest of the UK as well. Because it would mean


the UK's balance of payments would still get the advantage of


Scotland's massive oil export, our whiskey exports, and other exports,


that would help to support a sterling zone. Keeping the pound,


some people call it independence light, and say it raises more


questions than it answers. They say the Scots would end up with no MPs


in Westminster, and a monetary policy set in Threadneedle Street


at the Bank of England. They believe Scotland would have ended


up being more dependant on London than it was before. Some think it


is a foolhardy exercise. When Czechoslovakia split up in 1992


into two separate countries, they thought they would have a monetary


union. They both agreed to this, it didn't work. It lasted all of five


week. That is because they spent four of them figuring out how to


end it. The problem wasn't really the international monetary system,


or the speculator or the banks, it was ordinary people, wondering what


was going to happen to their money, their contracts, ordinary


businesses, and they moved their money from one side of the country


to the other. To ease this transition, one way the SNP think


they can bring in revenue, is a cut to corporation tax. The Scottish


Government has said that it would like to emulate Irish policy on


corporation tax. At some point reduce the British rate of


corporation tax, currently in place in Scotland, to around 12.5%, that


is the Irish rate. That would mean that Scotland would have to find an


extra �1.8 billion in revenue, to fill the gap that was caused by


that decrease. The SNP have their own facts and


figures, when they tell Scots that independence could make them �500


richer, per person, per year. One opinion poll sut65% of respondents


supporting an independent Scotland. They show the latest figures could


bear that out. Their official statisticians show last year that


Scotland contributed to more in UK taxes than it got in return, to the


tune of �500 a person. The Save The Union campaign will be kicking off


in June, and headed by Alistair Darling. Why are they waiting until


the end of June. Alex Salmond is due shortly before the Leveson


Inquiry. Labour believes the SNP was damaged in local elections


recently, because of the recent suggestion of a link between Alex


Salmond and Rupert Murdoch. Labour believe it tarnished Salmond's


reputation as a man of the people, and it damaged them in the local


elections and might damage their campaign for independent. Back at


the flag's inception, Scotland and England were still separate. Today


begins a two-year debate to decide if they will be again. The former


Chancellor of the Exchequer, Alistair Darling, has been helping


toe organise the No Campaign. When I spoke to him earlier, I asked how


prominent a role he would play. will play a major role, along with


other political parties, and crucially, along with people who


are not allied with political parties. This is not an argument


won by two sets of politicians arguing with each other over the


next two-and-a-half years. We have to engage Scottish opinion, and


what will be the biggest dwegs we make as a country, for -- decision


we make as a country for perhaps 300 years. These are important


decisions to be discussed. I believe very strongly that Scotland


would be better off remaining part of the UK. These are arguments that


have to be pursued and debated. Isn't the blunt truth that the SNP


currently have the only charismatic voice in Scotland at the moment?


you look at the poll published today, opinion on independence


hasn't shifted really in the five years since the nationalists took


power here. Their momentum hasaled, there is no doubt about it. They


did not -- has stalled, there is no doubt about it. They didn't do as


well as they thought in Scottish elections, have a look at the polls,


they are not shifting opinions. The reason is, prom people in Scotland


are pretty canny. Would a single currency work for two nations?


nationalists have changed their position, they were in favour of


the euro until the beginning of the year. Then they said they would use


the pound like Panama uses the dollar, when it was pointed out


that interest rates would be fixed by a foreign currency, they say


they want a currency union. The problem with currency unions, as we


can see in Europe, they lead to increasing economic and then


political union. So what is the point of leaving a union, only to


arrive back in a situation where you are forced back into it. And


you have all the problems that you see with the euro just now. Where


you have to have your budgets agreed by some sort of central body.


We have to send our budgets down to London. This is nonsense and will


be exposed as such, and the majority of people in Scotland will


see it as complete nonsense. Could you see the -- If you look at the


MPC at the moment, it doesn't have representation from different parts


of the UK, it has people on it, whose expertise is trying to


forecast what will happen on inflation and setting interest


rates. It is not a representative body. If you think about it, if


Scotland decided to leave the UK, why is it that the remaining parts


of the UK will say here is our Central Bank and here is our policy


committee thatics ifs interest rates. But we are having -- that


fixes interest rates, but we are having someone from another country


on it. We are invite bid the nationalists to take unquantified


risk with our future, at probably the most uncertain time in modern


timesment we are in a very difficult situation, we have a


European situation that seems to be getting worse by the day. Problems


with banks there, as well as the economy. They are asking for risks


they can't quantify. Would you in any circumstances countenance a


second question on the referendum balance, that said, shorthand, deaf


very max? I don't think you can put another question on the ballot


paper, unless you specify exactly what it is. The problem with what


is known as devo max and plus, is it is not defined. There are 57


varieties of these things. I'm inclined to agree with the SNP's


deputy leader, on this point and this point alone, she said unless


you have a specific defined opposition you can't quantify it on


the ballot paper. We understand independence and being part of the


UK, that is the question to put on the ballot paper, we don't have to


wait two-and-a-half years for that. We could have that referendum now,


and the only reason we don't have it now is Alex Salmond doesn't


think he can win, he wants to sit it out, I don't think that is right


for Scotland. Stuart Hosie is the SNP's Treasury spokesman in


Westminster, he's in the Dundee studio. You heard there from


Alistair Darling that they were being asked to take unqualified


risks at the most uncertain economic time. Why would you choose


such a vulnerable moment to convince people this was a good


idea? Alistair Darling made a whole series of assertions in his package.


It amounts to no more than the usual scaremongering. We have seen


them, and the best one was the stuff about the Central Bank. The


Bank of England's our Central Bank as well. It is completely


independent. What would happen with independence, of course, is because


the Central Bank doesn't work or set debt targets or deficit target


or growth targets, and the Government and the MPC studious low


avoid commenting on fiscal policy, is the Scottish Finance Minister,


and a UK Chancellor, would have exactly the same powers, that is


monetary discipline set by the Central Bank. It sets interest


rates, and its remit is set by the Chancellor of the Exchequer, you


heard there from a former Chancellor that Scottish


politicians would not have a place at that table, wouldn't that worry


you? UK politicians don't have a place at the table, because it is


completely independent. The only target which is set is the


inflation target, that is sensible. In a currency union, if you agree a


"stability pact", say deficits to run more than 3% over the cycle,


that is extremely sensible. We are very comfortable with that.


know the Treasury is involved in major decisions, like quanative


easing, you have to approve things like that. What was spelled out, is


you wouldn't have a force in the economic cycle and movement n with


what would be essentially your own country? That is simply not the


case. You accept the discipline of the Central Bank, of course you do,


in relation to monetary policy S what we would have, and it is a


thing we don't have now, is full control over all of the fiscal


levers, in order to grow the economy, and not make the same


austerity policy driven mistakes that the UK Government are making,


and Alistair Darling made when he was Chancellor, laying out �87


billion worth of taxes and cuts. You don't have to look very far to


Europe to understand it is not a great idea to shoe horn two


economies into one monetary policy? That is right, the reason we have


problems in Europe is preSicily that. Productivity in Greece and


the rest are not the same. wouldn't be able to make those


decisions independently? Productivity is across Scotland and


the UK is near idea ka. You don't epbtder a currency union with --


identical, you don't enter a currency union with those


differences, it is not the same as southern Greece and northern


Germany. You heard the poll that showed 30% would vote yes if it was


asked today. Doesn't it tell us a lot about your confidence in your


campaign, that it is not even on the table for another two years?


it is going to be in 2014, that is the promise we made at the election.


In terms of today's poll, it was one poll, it was a very strange,


skewed question, but we will set that aside. Some polls have showed


independence ahead, others not so well ahead. What we need to do is


run the campaign, get it bottomed out, published a detailed


prospectus and win the argument. someone offered you devo max, a bit


more power, the SNP would be happy with that? The SNP stands for


independence, and we want independent, and the campaign was


launched today. More gloomy news from the eurozone


today, Spain's fourth-largest lender, Bankia, has requested a 90


million euro bail out, on top of 4.5 billion euros appealed for


earlier in the month. In Catalonia, regional Government could be unable


to pay their bills. Could this be the year where many countries try


their hardest to lose, because it would cost millions to host next


year. The spannic Prime Minister denied remarks she was alleged to


make last year, which would be -- the Spanish contestant has denied


remarks she was alleged to have made last week which would be to


lose would be better. # If you love someone


# Follow your heart # I am close to the


# Border line # Um come on a dance


Paddy O'Connell has the enviable task for covering Eurovision for


the BBC, he joins us now. I guess the joke used to be that nobody


voted for Britain, because they didn't really like us, now if you


didn't like us, you might vote for us, right? Well, no-one can dislike


Spain, and you can probably speak the language. What has happened


here is Pastorus has come back from comments that a TV executive said,


for heaven's sake don't win because it costs too much. It costs many


millions to stage this circus. Everyone wonders about being landed


with a bill in a time of austerity. But the Spanish girl says she's in


it to win it, and don't report those remarks you earlier did.


much did Azerbaijan throw at this one? Look behind me, this was


briefly the world's largest flag hole, it is 300ms away. Then


Malaysia made a larger one. This is the size of half a football pitch.


Look at the light display. This is a new stadium. This is like the


Olympic stadium, built for Eurovision. Which I think is


getting your priorities right. But here it has come with a lot of


human rights questions attached. We have been covering in other parts


of the news bulletins. If you take aside the question of the


construction costs, they are paying about 45 million euros to say to


the world, here we are, we have Eurovision, and we have vast oil


wealth, and you haven't. In the midst. Euro crisis, what is your


redirection for the way the voting patterns will go tomorrow. We are


post-soviet bloc era stuff now, aren't we? Greece is not going to


give 12 points to Germany, let's start there. We have Ireland here,


they rely on votes from the UK often, and they have got those two


chirpping little quiff creature, Jedward, with a mobile water


fountain, they are a country in crisis. Spain are here, Greece are


here, Italy's here, I think they should all support each other,


really, in it this time, show -- in this time, show a currency country


kuen. -- currency union. I don't know who will win, Sweden are the


favourites. Have a great night, thank you very much.


Next week, ahead of the Jubilee, we look at modern Britain, through the


writers of previous great regins, we have Shakespeare on Monday,


Shakespeare and leadership. They all see themselves at the party


conference, standing up and rousing the troops. As with Henry V, it is


quite cynical, and it doesn't solve the problem of how to govern.


that to come on Monday, that is all from Newsnight tonight, from all of


from Newsnight tonight, from all of us here, a very good night.


Good evening. The mercury soared to 29 degrees in some places this


afternoon. Not as humid to start with tomorrow, an easterly wind


bringing in the humid conditions. Temperatures always around the mid-


teens along the coast, thanks to the breeze off the North Sea. We


are getting into the mid-20s in the west. The sun will be every bit as


strong. In the channel island, Cornwall, and the ielgs of silly,


cloud later, a few rumbles of thunder in the night and with rain.


Most completely dry. The torch passing through Cardiff to Swansea,


clear skies overhead. Temperatures of around 25-126. Clear and sunny


throughout, across Northern Ireland too, as it will be in Scotland.


None of the mist and low cloud that bothered us on Friday morning. Blue


skies to start with and blue skies to finish as well. The only threat


to misty low cloud across the Shetlands. Paris sharing the heat


as well. Elsewhere in Europe, Amsterdam cooler, and Berlin, a bit


more cloud here. Some thunderstorms to come in Rome and Athens during


the weekend, and it will temper the temperatures some what.


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