06/06/2012 Newsnight


With Kirsty Wark. As speculation grows about a bailout for Spain, how close is Europe to a wider banking collapse?

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Tonight, is Spain too big to fail? Its leaders say their banks need


help from Europe, they won't accept more austerity in return. Who will


blink first? Meanwhile on the ground, the crisis


intensifies, Paul Mason is just back from Seville, some are taking


matters into their own hands, occupying houses and land. Did any


of you ever think you would be living in a squat? No. TRANSLATION:


We are here to fight or a roof, a roof over our heads, this is my


house now, nobody can throw me out, let's see them try. We will get the


Spanish Government view s and hearing from the head of the Berlin


stock exchange. What if the answer to save the euro looks like this,


will more integration choose Britain to be in or out of Europe.


The row over unpaid security stewards, we speak to the company


who provided them, an isolated incident, or something rotten in


the Government's Work Programme. How was the Jubilee reported abroad,


from ten sea to Taiwan. Good evening, Spain's banks need


more money from Europe, that is not in doubt. How much and by the


method which it happens is far from decided. The Spanish Government is


reluctant to accept a bail out for fear of the political reprecussions,


and the pain of even more austerity. Efiguress in Brussels, Berlin and


Madrid tonight are pouring over their options. Can a special case


be made for Spain, direct help for its banks with few conditions. With


the stand-off going on, how close are we to a wider banking collapse.


Paul Mason is here. What sort of plans are being mooted in Spain


tonight? A big turn around, 48 hours ago it was, we don't need a


bail out, our banks are fine. Now it is, please can we have a bail


out, and give it to us unconditionally or Europe gets it.


How much? 40 billion, more economists think, some think 400


billion. The point is, they want the money without the attached


austerity that Greece, Ireland and Portugal got made to. Do the


Financial Times, usually well informed out of Brussels, thinks


and reports that what is on offer now is that the Europeans are going


to give Spain quite a bit of money, unconditionally, at a state level,


that is it gets given straight to the banks, and the reason is s


because they have done so much austerity that they can have it


safely. So the Europeans are prepared to say what the markets


are not prepared to believe. As you say, Greece in particular is


watching this carefully. If Spain gets this money, with no strings


attached, will that be a game- changer? Massively. For two reasons,


first of all, Spain is on the verge of losing its ability to borrow.


The markets look at it and say your public finances are not sustainable.


They look at the autonomous regions, not making the cuts required. Then


you look at Greece, Greek voters are right now trying to weigh up a


gamble, one party is telling them if you don't vote for austerity, we


will get kicked out of the euro, disaster, the left is saying, no,


the Germans will blink, and the Germans will come back to the table


if you vote for us. What will it look like in Greece if, over the


next 48, 72 hours, they do blink. Big stakes here, for the entire


euro zone. Paul has spent the weekend amongst


Spaniards on the streeds Andalucia, struggling with the economic crisis


-- streets of Andalucia, struggling with the economic crisis. This is


his film. In the province of Andalucia, the


posh do weddings in style. And so do the protestors, here enacting


the marriage of a corrupt state to failing bank.


Protestors banging pots and pans, are becoming common now, an echo of


the revolt in Argentina, ten years ago, when it went burst.


They try to keep it light, but, as the crisis hits, there is simmering


anger. Many people are losing their homes,


people with children and it is now on the streets, living on charity.


Spain's economy is in recession. Many of its banks need a bail out


fast. One in four adults is unemployed. Spain has become the


test case for the European mantra of austerity.


The irony is, Spain's banking crisis is solvable, although with


large amounts of money. The problem is with the real economy, it is


shrinks fast, and theory dictates that people's wages and benefits


have to shrink as well. How low can it go, with any market in Spain,


most things are all right one or two euros.


This block of luxury flats was empty for three years. The owner


has gone bankrupt. Now it has been occupied by people's whose own


homes were repossessed. These women were among the first to move in.


They are not habitual rebels. Did any of you ever think that you


would be living in a squat? TRANSLATION: At first, the truth is,


I was frightened. Because I didn't know what could happen.


TRANSLATION: We're here to fight for a roof, a roof over our heads.


This is my house now, nobody can throw me out. Let's see them try.


The way it is going in this country, things are going to end badly. We


will be biting chunks out of each other, just for a bit of meat.


Everywhere you go in Spain there's a small savings bank, a Caja, now


many of them are bust. One bank alone, Bankia, needs 24 billion


euros to stay afloat. Spain wants the EU to give tax-payers' money


directly to these banks, so their bad debts don't get transferred on


to the Government's books. On the face of it, what could be simple


letter, you bail out the Spanish banks direct, with EU money,


bypassing the Government, avoiding the need for austerity, and


firewalling Spain from Greece. What's the problem? That's the


problem. This is unfinished skyscraper was built by one bank,


sold to another, and is now owned by a third. Many in Seville see it


as a giant folly, for, as those who have covered the story know, the


Cajas were politically controlled. The Cajas were banks who used


regular economic rules, but with a political background. So, it's like


getting politicians to grow your money. That is a CAJA? And when


they need to be bailed out by 24 billion euros, where are the


politicians? They are in the same place. Do people recognise this?


And maybe they should be answering some questions in parliament, and


maybe on trial. Europe goes pump 100 billion euros of tax-payers'


money into these banks t leaves the political apppointees who created


the mess unscathed, often with multimillion pay-offs. Andalucia's


land is rich. But decades under General Franco left it


underdeveloped, with EU membership came infrastructure. It is a region


where the state is the biggest employier, and the state is cutting


back. This farm had been abandoned to lie


fallow, now it too has been occupied by members of the Land


Workers' Union, and their supporters.


TRANSLATION: The crisis happened because the majority of people who


worked in the countryside left to go and work in the construction


boom. Only a few of us stayed behind. They brought in migrant


labour, and machinery to help with the crops. Then the property boom


collapsed, and all those people who left wanted to come back to the


land. They are trying to run it as an organic farm, this is as much a


political gesture as an economic one. Land occupations were the


scene of some of the bloodiest events in the civil war in the


1930s. TRANSLATION: I believe it will all


end with occupations, farplgs, parliamentary partys and factories,


there is no other -- apartments -- farms, apartments, factories, there


is no other way. We have to go out on the streets, fill the city


centres and occupy the land. Nobody will give us anything.


For now, what's holding Spain together is the strong social bonds,


family, religion, tradition, the welfare system, the minimum wage.


The statue depicts Our Lady of Hope, for many of these young people,


hope is all they have got. 51% of Spaniards under the age of 24 are


unemployed. TRANSLATION: We're following the


wrong path. The problem isn't public deficit, it is unemployment.


The more we strangle public spending, the more we damage our


chances of recovery. We need to recover confidence, and increase


consumption. It is a vicious circle. What we need is a system like the


New Deal. We are condemning Spain to a lost decade, like Japan had.


For now, the sun is free, and so is lunch, if you can catch it. But


this is a wasted generation. It is beginning to dawn on them things


could get worse before they could get better. A combined banking and


sovereign debt crisis for Spain would, even though, be cheaper than


Greece to solve. But bigger than Lehman Brothers, if they failed to


solve it. That is where Spanish people are scared.


What they are scared of, above all, is that the delicate social balance


they had will suddenly come to an end. Joining me now from Madrid is


Jose Maria Beneyto, a spokesman for foreign affairs in the parliament.


Joining me from Berlin, Artur Fischer, chief executive of the


Berlin stock exchange. In the studio I'm joined by the director


of the Global Economic Governance Program in Oxford. First of all,


Jose Maria Beneyto, Spain is in crisis you do need money now. How


much money do you think you need, and are you prepared to accept any


conditions attached to that money? Well, the first question is whether


indeed Spain needs money and touch. This is very difficult to know at


this stage. What has emerged is the need to get money for the


capitalisation of Bankia. This is the real problem right now. And


this was unexpected. Because it is a new story which came in the last


weeks. This is a real problem now. Anything else at the moment is a


bit of a speculation. Would you accept any conditions attached to


any money coming to Bankia, particularly? That's not for me to


decide on that. The reason I ask, the reason I ask Mr Beneyto is


because Bankia was severely mishandled, politicians were also


involved in the problems of Bankia, and European tax-payers wonder why


on earth they should give money to a failed bank, when it is throwing


good money after bad? Well, banks have been having troubles all


around Europe. You know, this is not the only case, in Spain. If you


look into the banks in Germany, the problems there were even much


higher, and there were banks managed by politicians. In many


other places in Europe, in France or Italy, this is not something new.


So the issue here is not whether Bankia was particularly bad low


mismanaged, it is an issue whether -- badly mismanaged, it is an issue


whether or not we should have a common system in Europe for banking


rescue. This is the real problem at the moment. Artur Fischer, from


your point of view, will Germany blink first and allow money to go


to Spain to help it out of its crisis? I believe it is the first


test will be on Thursday, when Spain will ask the market, I


believe, for another ten billion. Hopefully Spain will be able to get


that money in the markets below 7% .% obviously is a barrier. If that


doesn't happen, then things might accelerate quite swiftly. In that


case, I believe Germany will play by the rules, which means we have a


rescue fund, money will be lent only to a Government, not to banks.


However, I believe also that in Spain we have a completely


different problem. -- to Greece. The Spanish Government is saying it


doesn't a bail out, the idea is the banks to be recapitalised, you


don't think that will happen? simple, if Spain has to pay more


than 7% there will be no other choice. Obviously if it is higher


than 7%, then you need to take a loan out to pay the interest,


nobody would do that. Do you think it is possible that Spain would


have a bail out without conditions attached, the Financial Times is


talking about a possible bail out without the kind of austerity


measures that applied, for example, to Greece? I think there is a


middle ground here. I believe from what I hear that the German


Government understands that the Spanish Government has done a lot


of things absolutely correctly and riot, and they have started the


special measures to cut down costs some time ago. Therefore, again, as


I said earlier, the situation in Spain is quite different. However,


the banks need to be restructured, that is something which has to be


put in place. Let's come do you now on this.


Two different things here, of course, there is the short-term


problem with Bankia, there is also the possibility of a bail out,


without conditions attached, that would be a big moment, wouldn't it,


it would be a game-changer? would be, at the moment we are what


we are seeing is a very dangerous brinkmanship, it is a three-way


brinkmanship, the European Central Bank is sick of the European


leaders not making decisive moves. So the European Central Bank has


said we are going to stop doing pain relief for Europe, and force


the politicians to do something decisive. The eurozone politicians,


playing brinkmanship with Spain, they want to force Spain to accept


conditionality in return for a loan. Artur Fischer has said it has done


a lot towards this already, it sounds as if there will be an


accord? What Spain knows that is that Germany cannot afford to let


Spain go. Spain knows if there is any moment to negotiate without


conditions now is the moment. will blink first? Germany? We will


see a slightly political fudge, we will see probably a loan from the


European rescue fund, with some light conditionality, which some


how the Spanish Government finds acceptable. What we won't see is a


solution to the underlying problem. Which is that both the Government


and the banks are broke. So they are all playing with fire?


They are. Jose Maria Beneyto what do you make of that analysis?


I think is that Spain needs time. The crisis has been not just a


Spanish crisis, it is a crisis around Europe. If Spain fails, the


consequences will be very, very relevant for the rest of the


European countries, including Germany. Do you believe that if


Spain does fail, the whole eurozone fails? What I think is that we are


very clearly on the same boat, as we were from the very beginning in


the monetary union. So things have happened as they have happened, the


Spanish Government has made very strong efforts, it has done all the


homeworks, it is probably the country in the world which has done


the most reforms in the least time, concerning the size of Spain. We


have done the labour reform, we have done a cap on the expenses of


the autonomous communities. Sorry to interrupt you, I would say two


of the semi-autonomous regions were meant to cut their spending last


year and they increased their spending? No, what they did, they


didn't increase their spending, what happened was that when the


accounts were made public, there was more deficit than expected from


last year. The revenues had been less. So it is the entire problem,


it is a dynamic situation, and if you don't find a solution, then, of


course, your revenues will be less and less. Artur Fischer, what about


this point, though, that if the special measures are given to Spain,


it could possibly affect the outcome of the Greek elections.


Because the left in Greece will say, hang on in there, we don't need to


accept these austerity measures, because Germany will blink. Angela


Merkel will blink, and we will be OK? Actually, there is a potential


that could happen. But I believe in crease, the vote will be whatever -


- increase, the vote will be whatever it will be, either Greece


will vote for the austerity measures or they will not be


provide with any other money, in that casek they will most likely


have to leave the euro. In Spain it is different, the Spain yards are a


proud people, the Government has promised to see through this crisis


on their own, and the Government has been in for half a year. It


looks like they can't, and for that reason I believe the first step is


that Spain asks the fund to release money, and then the next step to


accept some, probably very light measures, which are imposed. Very


briefly? There is one positive point that has emerged today, which


is the idea that the Europeans collectise all the excess debt to


take the Government off burdens and leave them better able to sort out


their banking systems, without that we are in a dangerous space.


have had reports in from activists saying scores of people have been


killed in a village in Hama province, hard to verify, the


killings come less than two weeks after news of a massacre in Houla,


over 100 people were killed, over half of them children. Activist


groups are saying between 78 and 87 people were killed in this village,


either shot at close range or stabbed to death, or hacked to


death by shabiha, that is the Government militia, which has been


widely blamed, certain lie by activists and much of the outside


world for the killings and Houla. We obviously can't confirm these


report, nor is there any video on the Internet to back it up. But


these same groups were the first to come out with the news about Houla,


which UN observers, the following day, coroborate. We will be waiting


to see obviously whether the observers go there tomorrow, and


confirm these kind of figures. It sounds like Houla on a slightly


lesser scale. As many as 87 if not more. Is there any other reaction


tonight? The Government is giving its view, which is now coming out


in flashes on the Syrian state TV screen. Saying that Government


forces in response to pleas from local people, intervened to attack


what they are calling a nest of terrorists in that village, they


clashed and killed a number of these called terrorists, seized


guns and so on. And that, in the process, they came, they say,


across the bodies of two women and a number of children, bound hand


and foot, who the coroner, according to this official version,


said had been killed at 10.00am, yesterday, or today, rather, in


other words when the called terrorists were still there. In


other words the Government is blaming terrorist armed groups or


the rebel fighters for this massacre, as the Government itself


is calling it. And linking it to the impending meeting of the


Security Council tomorrow. Which will be addressed by Kofi Annan, as


everybody looks for a way out of this horrible drama. Thank you very


much for joining us. Back to Europe now, Britain may be


outside the eurozone, probably relieved to be a second teir player


in this crisis. But tomorrow afternoon David Cameron will be


sitting face-to-face, toe-to-toe with Angela Merkel with a following


wind from Barack Obama, more or Liz telling the German Chancellor to


come up with a plan to solve the eurocrisis and deliver long-term


future for the single currency, perhaps in the form of stronger


integration. The moment could welcome when Britain has to decide,


once and for all, Europe, in or out. Here is David Grossman.


For a whole extra long weekend it was almost as if the EU didn't


exist. For four rather soggy days we were back in the Britain that


George VI pass today his daughter. The British show no great desire to


fly the EU flag at the best of times, this weekend, forget it. But,


as the parade routes return to normal, so does politics. For the


politicians, business as usual on the eurocrisis, is, well, trying to


keep their options open for as long as possible. In a comparatively


short period we could be looking at one end, the complete break up of


the entire European project, or, at the other end, a new, vast


superstate. However, whilst a certain amount of ambiguity suits


our leaders, increasingly backbenchers are looking for


clarity and precision. The Conservative backbencher,


Douglas Carswell has won a place in the parliamentary ballot to


introduce a piece of legislation, and consulted the public as to what


law they would like. The overwhelming winner, he says, exit


from the EU. So far we have seen almost no leadership at all. We


have seen all the old certainties and cliches of the past 40 years


recycled, different ministers, they wear different colour rosettes on


election day, but no new thinking. I mean this really should concern


us. Events are changing fast in Europe, and yet we're getting the


same sold out of date platitudes and cliches recycled as if they


will see us through, they will not. The Prime Minister is in Norway


tonight, on his way to a meeting with the German Chancellor tomorrow.


Last night there was a phone call with the American President. The


subject under discussion, of course, the eurozone. I did have a


conversation with President Obama yesterday, he very decently held


off the phone call until after the red arrows had finished going over


bucking hall palace, only just. We do -- Buckingham Palace, only just.


We do share some similar views, as I said, there is the urgent action


to deal with the financial crisis in Europe. We have seen interest


rates rise so high that it is causing real problems for countries.


That is why you need a conclusive resolution of the Greek issue. You


need the firewalls, you need the bank recapitalisations, all those


things have to be done. But that is only about stablisation, we then


need to make sure we have long-term growth plans.


For some in his party, Norway was a good place for David Cameron to go


and see for himself. It provides, they think, a good blueprint of


where Britain could go. Trading with Europe, but outside the EU.


Norway is in the European Economic Area, alongside Iceland and


Liechtenstien. According to one academic, this middle way utopia is


a losery. There is a gap in the model between formal serenity and


actual dependance on Brussels on the other side. You could say in


the places and Britain for those considering it, even outside the


European Union, you can't be outside the European integration


processes, that is something you have to participate in if you don't


want to be totally isolated. Sonar way is really participating in


European integration, although we have kept some formal serenity.


Others, though, think a better example of Britain's post-crisis


relationship with the EU is not looking north to nor way, but south


to Switzerland. The Swiss are in the European free trade association.


I think a Swiss-type relationship with the European Union very much


has to be on the cards. One of the reasons why the Swiss are


prospering is because by being outside the European Union, not


only do they have free trade with the European Union, but they arery


to -- free to trade with the rest of the world, and it is outside the


world there is growing, it is countries outside the European


Union that are growing fast. If we can find a way of trading freely


with the European Union, being free to trade with the rest of the world,


we will be on to a winner. The big problem, right now, is, of


course, is that no-one can predict what will happen with the EU and


the eurozone, and Britain's relationship with both. The only


scenario we can perhaps safely discount is this one.


Daniel Hannan is a Conservative MEP, who supports a UK exit from the EU,


and Menzies Campbell, leader of the Liberal Democrats, who have always


enthusiastically usual guiseed the EU benefits. Menzies Campbell


tomorrow morning in the Times, David Owen planned to offer a vote


on EU to Britain. Do you think a vote on EU membership is inevitable


now? I don't think it would be the time to call it now at the moment.


People's views would inevitably be covered by what has happened in the


most recent past. You have to remember for the past 40 years we


have participated in the biggest single market in the world, 50% of


our exports go to the European Union. It is said that three-and-a-


half million jobs in this country depend upon the European Union.


More to the point, perhaps, since the end of the Second World War,


the European Union's been an important component in the


maintenance, not just of economic opportunity, but of political


stability. Against that background, then, a referendum on Europe, in my


view, is something which those of us who support Europe should not be


afraid of. Because I believe in an argument of the kind I have


described, that the view would prevail that Britain should remain


within the European Union. We would have a clearer picture, Daniel


Hannan. Can you sketch out, from your point of view, how it would


work, if Britain left Europe? may on the referendum, it is a bit


much to say it is the wrong time. It is always the wrong time, we


used to be told it was the wrong time because Europe wasn't an issue,


now we are told it is the wrong time because Europe is an issue.


Let the people decide. How would it work? You could do worse than


looking at the two examples you cited in your film there, Norway


and Switzerland. They are in the European free market, but outside


the common agricultural policy, and the common fisheries policy. They


pay only a token contribution to the EU budget. They control their


own borders and human rights issues. In Switzerland it is completely


different, Switzerland doesn't regard itself as being a force in


the world, the UK does? It is the absolute rule of this, when you are


discussing aspects of their relationship with the European


Union, you are always told a separate thing about the country.


You asked me about what would be the motdle for us -- model for us,


the key thing is both Norway and Switzerland export substantially


more per capita to the European Union than we do. They sell more in


percentage terms from outside than we do from the inside. Which is


what makes a nonsense of the claim about three-and-a-half million jobs.


My job depends on it, and a couple of other eurocrats and others.


would lose your job? Free to trade with the rest of the world, outside


the euro. Let's put that to Mr Campbell, what you were talking


about, jobs depending on it, Daniel Hannan's point is more jobs would


be cailted and there would be greater -- created and there would


be greater flexibility to trade outside the European Union? We are


free to trade with north and south America, which explains why the


British Government for example, hold on, let me finish. Let him


finish. In the last few months has been exercising very strong


diplomatic activity, in relation, for example, to Brazil. We are not


prevented from trading with other parts of the world. But the


European Union does allow us access to a single market, with freedom of


capital, freedom of persons and freedom of services. Let's move


this on politically. They are not bound by the common external tarrif.


There is no doubt, is there not, that Barack Obama look at Britain


as being part of a European bloc, we are more powerful because we are


part of that bloc? At the risk of stating the obvious, you are more


influential in the world if you have your own foreign policy rather


than contracting it out to Baroness Ashton and the EU diplomatic


service. To make the most obvious point, when we joined the European


Union, we thought there would be a trade off of economics versus


politics. Yes, we would lose a bit of sovereignity, and democratic


self-rule, that was a bad thing, on the other hand we would be, we


thought, gaining access to this vast, growing market. It doesn't


look that way today. The European Union is dwindling as a percentage


of the world. It was 38% of the world economy in western Europe


when we joined, it is now 25%, it will be 15% in 2020. We crazely,


while shackling ourselves into the European Union, turned our backs on


the developing markets and the Commonwealth and wider anglo-sphere,


which is where the growth is. idea that by walking out we would


some how, overnight, achieve something infinately better, simply


isn't supported other than anything other than speculation, we have the


opportunity to trade elsewhere in the world. We also, through the


European Union, have the capacity to protect ourselves, when we are


the subject of the kind of thing, happened not all that long ago in


this country, when the Americans used restrictions against cashmere


exports in Scotland to boost their claim that there should be a


different policy in relation to bananas. We couldn't write of the


rules in the single market, that would be a problem for us, we would


be excluded? Our exporters would have to meet EU standards when


selling to the EU, just as they meet Japanese standards selling to


jappafpblt I come back to the point, Norway and Switzerland sell more to


the EU, Norway two-and-a-half times as much per head as we do, and


Norway four-and-a-half times. They are in splus plus, we are in --


surplus, we are in deficit. We have run a cumulative trade surplus with


every continent in the world, except Europe. Are we really to


believe that four million Norwegians, seven million Swiss,


relying on trade agreements, furnishing their people with the


highest standards in Europe, wouldn't be able to survive running


its own affairs in its own interest is the United Kingdom.


The Diamond Jubilee wasn't a picnic for everybody, thousands worked


hard stewarding the whole affair, keeping audiences safe, happy and


in the right place. Now Lord Prescott is has been leading the


cause for a stewards inquiry, after it emerged that unemployed people


from Bristol, Bath and Plymouth, were bused to London, and left


under London Bridge to spend the early hours of the morning, and


paid nothing for their stewarding efforts. It was, according to the


Government's work programme, work experience, for others it was


nothing but a horrible experience. 700 boats, a million people lining


the Thames. Thousands of street parties across


the UK. It was a very British Jubilee, in very British weather.


But, as the long weekend came to a soggy close, we began to learn more


about the treatment of security staff working behind the scenes.


In the early hours of Sunday morning, coachs from Bristol, Bath


and Plymouth, arrived here at London Bridge, full of, mainly


young people, ready to carry out a day's work, as trainee stewards.


Many were here as part of the Government's work experience


programme, knowing they wouldn't get paid, but hoping for something


permanent in the future. Some of those coaches arrived at


3.00am, earlier than expected. Workers were told they should get


some rest for a few hours under the bridge, before starting a full


shift in the rain. If I do that there is jobs that I can do, paid,


come off of benefits, I have been on benefits for a little while now.


I'm getting fed up of being one of these people that cannot get a job.


There is no jobs out there, not really, you know, it is hard to


come across a job, and I thought, well, this job seems really good, I


got offered the job, I took it. I think they took advantage of people.


The stewards were taken on as part of the Government's Work Programme,


they were directly employed by a firm called Close Protection UK,


which Newsnight has learned, has also won two separate contracts to


supply security staff for the Olympic site. The company's


contracted and gets paid to take these people on, was it paid to


take unpaid labour? Secondly, they have an obligation to make sure


they look to the social welfare of the people that they are involved


in. They totally failed in. That they looks a if they are in breach


of their contract. This isn't just about, you know, a few volunteers


going together and hoping for a job, clearly they were. This company is


being paid, and has abused its position n my view. Close


Protection UK has apologised for what it says is a small number of


staff who complained. In a This case raises more questions


about the Government's welfare-to- work policies, one of the scheme's


largest private contractors A4e, is currently the subject of two police


investigations over allegations of fraud. And the Government was


forced to change a related work experience scheme earlier this year,


after more protests over the use of free Labour. In this separate case,


described as an isolated incident by the Government, the charity


Tomorrow's People, placed the Jubilee workers with Close


Protection UK, the organisation, run by the Conservative peer,


Baroness Scott, is being paid �3 million this year for Government


work. There is a lot riding on this for the Government, it launched the


flagship work programme a year ago this -- Work Programme, a year ago


this week. The promise, to help more than two million people into a


job by 2016. It will be the unemployment statistics that decide


the success or failure of that policy. If those numbers start to


fall, those allegations of exploitation, could be quickly


forgotten. I'm joined from Liverpool by Baroness Scott, who is


the CEO of Tomorrow's People. Baroness Scott, what due diligence


did your company do before you sent these unemployed people to work


with CPT? Well, our relationship with CP UK, has been going on now


for six months. We have placed people with them, locally, in the


Plymouth, Bristol and Bath area. All our experience of them is they


have honoured every obligation to look after them, and have a duty of


care, and provide them with good training. This was a distance they


had to come from Bath and Plymouth. Was due diligence done by Close


Protection UK about bringing these unemployed people to London, making


sure their four-day work experience, including the overnight, was


properly managed, and their welfare was properly looked after? If you


will allow me to finish, all our experience gave us confidence that


the preparations they had made for the trip to London, and the


experience would be met in the same way as it had been locally. And


what happened was...You Didn't do due diligence on this particular


trip? We did due diligence on CPUK and we had every confidence that


the arrangements in place were in the best interests of our clients.


You said the experience over the last six month, I didn't ask that,


I asked what due diligence you did on their preparedness to actually


prepare for this trip to London, by these people, on buses? All the


information we received and saw from CPUK was that the same level


of care and duty of care to our clients on this trip would be the


same as those locally. You saw the paperwork? My staff were in liaise


on with them. As I understand it, all the due diligence and the duty


of care, we had every confidence. The thing is that Tomorrow's People


as a charity and provides people for the Work Programme, and it gets


�3 million, and there is one person on �100,000 and eight people on


�50,000 a year, and when you look at what happened to unemployed


people w no power in this situation, who desperately want jobs, it could


be seen as ripe for exploitation, it could be seen that way? No, it


depends on how you want to look at this. At the end of the day, let me


be clear, what happened when the coach dropped these people off,


earlier than they should have done, and didn't allow them to stay on


the coach was unacceptable. CPUK have issued an unreserved apology,


we do the same. What we have to do is be really careful, work


experience is a vital element in an unemployed person's journey towards


getting to work. And we have got to be really careful. We do not give


the impression that work experience is not valuable and it is


exploitation. What this does appear to look like, is that it was sloppy


and it didn't really matter, and what I was wondering was, in the


light of what has happened, have you changed your relationship with


CPUK, and are you going to make sure that something like this could


never, ever happen again? The first thing we have done is we have spent


our time speaking to every client who was involved in the work


experience in London, to make sure they are OK, and to get their


feedback. That's involved our staff doing that. We are now looking at


our elements of the experience, and of all the arrangements in place,


and I can tell you that we will not allow this to happen again in the


way that it did. But, let me tell you also, that having spent,


Tomorrow's People, 30 years, really understanding what it is like for


unemployed people, we have been told by the majority of clients


that were on this experience, that notwithstanding the situation that


happened that shouldn't have done, they would be livid if this


prevents them, or spoils the opportunities that CPUK are going


to present them with the Olympics. Thank you very much.


The weekend Diamond Jubilee coverage of the River Thames pagent


on television attract 717 million people in the UK. How was it


reported elsewhere in the world. We have been trawling the tapes and


will go over at the Newsnight Jubilee Desk.


Thank you, you know what, conditions are terrible here, but


we are not going to let the weather dampen our enthusiasm. If I had a


�1 for every time I heard that last weekend, I would be richer than the


man with the kaing gull concession on the South Bank -- kag ol


concession on the South Bank. I have been up four straight nights


covering the Jubilee. What have others made of the party thrown by


Great Britain. It was a magnificent spectacle, you could almost see


through the inside of a car wash, that is England in juend. When an


oskes tra starts up, first Charles -- orchestra starts up, Prince


Charles takes up his sword, and then Camilla takes a lead, then the


family dances. They are not dancing, they are shivering. From New


Zealand, home of rugby players and Shaggy shepherds, a complaint about


the British weather. Dozens of rowers in the Queen's


Diamond Jubilee pagent, including a New Zealander, caught hypothermia


during the seven hours they were on the Thames. Organisers had been


worried the choppy tide might be a safety risk for the Kiwi crew, it


was the cold conditions that caused trouble in the end. And Moscow got


right behind the spectacle, talking about Britain's "pompus


festivities", oh those Russians. It's brilliant to be British, and


with 60 years of Her Majesty on the throne, there is no better time to


fly the flag and mark the occasion with a huge celebration. That is if


you can forget about the job cuts, slashed wages, petrol hikes and


rising education costs, in fact, unless you are among the Royal


Courts, you might be finding it hard to get festive.


Not to be outdone, Italian television hired Lord Sugar for


their coverage! The Queen's Diamond Jubilee celebrations got off to a


wet and windy start in London at the weekend. Looks like a trip to


the tower,or Taiwanese TV, less say Her Majesty is more. Which of us


will easily forget that extraordinary concert at Buckingham


Palace, that said, there have been some complaints about the BBC's


coverage, its tone, the level of knowledge. We have the little royal


teabags here. They are just chilling out. This is one of the


more unusual things. If you have eaten too much you can vomit into a


Jubilee sick bag. How lovely is that! National Theatre, the Royal


Festival Hall, we have some Semaphore on the Royal Festival


Hall. You can understand that, can't you? I haven't got a clue.


More than ten million viewers watched the river pagent. There


have been over 2,000 complaints to the BBC. But director-general, Mark


Thomson, said he was very proud of the coverage. That's just about all


from Newsnight tonight, before we go, the science fiction and fantasy


writer died tonight. We leave you with classics from Fahrenheit 451.