:00:12. > :00:14.The United States believes the Russians are sending military
:00:14. > :00:19.helicopters to Syria. The Secretary of State's warning came this
:00:19. > :00:24.evening. We are concerned about the latest
:00:24. > :00:29.information we have that there are attack helicopters on the way from
:00:29. > :00:33.Russia to Syria. Which will escalate the conflict quite
:00:33. > :00:37.dramatically. At least 50 people are said to have died in Syria
:00:37. > :00:42.today. What will this intervention do to what the UN now calls a "full
:00:42. > :00:47.scale civil war ". Brussels plans a system to link all
:00:47. > :00:49.the banks of Europe to make the eurozone secure. Paul Mason is in
:00:49. > :00:53.Athens. Locking Europe's banking systems
:00:53. > :00:56.together, might save this place, but it would change Britain's
:00:56. > :01:00.relationship with the continent forever.
:01:00. > :01:03.Could such an institution save a currency in such deep trouble that
:01:03. > :01:09.George Osborne today openly discussed the benefits of a Greek
:01:09. > :01:13.exit. We will hear from Berlin, Strasbourg and from London.
:01:13. > :01:16.The Lib Dem leader contradicts Cameron and tells his cabinet
:01:16. > :01:20.colleague, the Culture Secretary, you're on your own in tomorrow's
:01:20. > :01:24.vote in the House of Commons. A former Prime Minister discloses the
:01:24. > :01:28.price Murdoch sought for his endorsement. He wished me to change
:01:28. > :01:32.our European policies. If we couldn't change our European
:01:32. > :01:37.policies, his papers could not and would not support the Conservative
:01:37. > :01:42.Government. Also, a stand-off with one of Britain's most violent young
:01:42. > :01:52.offenders in his new �20,000 cell. We go inside the wing where they
:01:52. > :01:54.
:01:54. > :01:59.handle the most violent teenagers in British jails.
:01:59. > :02:03.It is only a belief, a suspicion, an accusation, but it is a Sirius
:02:03. > :02:07.one. The Russians are shipping attack helicopters to support
:02:07. > :02:11.President Al-Assad in Syria, according to the US Secretary of
:02:11. > :02:17.State Hillary Clinton tonight. If if she didn't look or sound like a
:02:17. > :02:21.woman warning of world war III, if did sound like the bad old days of
:02:21. > :02:23.the Cold War. This, on day when the UN head of peacekeeping said the
:02:23. > :02:28.conflict was now full scale civil war.
:02:28. > :02:32.Our diplomatic editor Mark Urban is here. How did this revelation come
:02:32. > :02:35.about? A bit of a bolt from a blue. The Israeli President was on a
:02:35. > :02:42.visit to Washington. He and the Secretary of State did an event,
:02:42. > :02:47.and she was asked about the issue of Russian arms supplies. We have
:02:47. > :02:53.confronted the Russians about stopping their continued arms
:02:53. > :02:59.shipments to Syria. They have, from time to time, said that we
:02:59. > :03:06.shouldn't worry, everything they are shipping is unrelated to their
:03:06. > :03:10.actions internally. That's patently untrue. And we are concerned about
:03:10. > :03:16.the latest information we have, that there are attack helicopters
:03:16. > :03:20.on the way from Russia to Syria. Which will escalate the conflict
:03:20. > :03:24.quite dramatically. Do you think it will escalate the
:03:24. > :03:29.conflict dramatically, as she puts it? I don't think it would, no. It
:03:29. > :03:33.is an exaggeration. Bear in mind that Syria already has something
:03:33. > :03:36.approaching 200 Russian-made helicopters, about half of them
:03:36. > :03:46.armed or gunship helicopters. They have been filmed. This footage,
:03:46. > :03:47.
:03:47. > :03:54.taken by the BBC, in northern Syria, of this Mil-17-Hip, machining
:03:54. > :04:00.gunning positions of the Syrian national army. Other pictures show
:04:00. > :04:05.these helicopters firing rockets at the ground. This confronts the
:04:05. > :04:11.Russian lie that these are not being used on the civilians in
:04:11. > :04:15.military operations. The close- range nasty intercommunal violence
:04:15. > :04:23.with militia groups and other murder gangs going around stirring
:04:23. > :04:29.it all up is the issue. It is an escalation on the diplomatic level,
:04:29. > :04:33.the US trying to push yau, into a more robust line. We have seen a
:04:33. > :04:37.lot of information published about Russian ships docking in ports,
:04:37. > :04:42.delivering Syrian arms. It is all campaign to put pressure on the
:04:42. > :04:45.Russians, in particular. What is the Russian game in this? It is a
:04:45. > :04:48.big geopolitical thing. As far as they are concerned they say they
:04:48. > :04:51.have no interest in the survival of the Al-Assad regime, per se, that
:04:51. > :04:55.is the line they have used in recent weeks. They do seem to feel
:04:55. > :04:59.that this group of people around them, many of them Russian-trained
:04:59. > :05:04.generals, and people who they have cult vailted for many years around
:05:04. > :05:09.him, -- cultivated for many years around him, are national interest,
:05:09. > :05:14.they should stay in power as a bulwark against Saudi and Sunni
:05:14. > :05:18.forces, they would see as taking over there.
:05:18. > :05:28.We have the director of the Middle East centre in the LSE, and our
:05:28. > :05:35.guest from waarken to, the director of the Euraisa group's Russian team.
:05:35. > :05:38.What do you think President Putin's reaction is likely to be to this
:05:38. > :05:43.ultimatum, threat or menace from Hillary Clinton? He won't be very
:05:43. > :05:48.happy. Mr Putin, who I have met a few times, is a tough customer. He
:05:48. > :05:54.will not be shamed, he doesn't mind being named. He will just put his
:05:54. > :05:59.next foot forward. I think we have a bit of a stand-off here now.
:05:59. > :06:02.does it seem from a Middle East point of view, this is not new this
:06:02. > :06:07.Russian arms supply to Syria. At this point it seems a strange thing
:06:07. > :06:14.for the ruarks to do, doesn't it? Not at -- The Russians to do,
:06:14. > :06:19.doesn't it? Not at all, Russia is the main supplier for Syrian arms,
:06:19. > :06:23.helicopters, jets, tanks and what have you. As your guest has just
:06:23. > :06:29.said, Syria has scores of armed helicopters. Syria has no shortage
:06:29. > :06:33.of armed helicopters. Syria has utilised armed helicopters, and in
:06:33. > :06:38.the last few days, extensively. I think Clinton's statement, and this
:06:39. > :06:42.is the point, is designed to exert more pressure on the Russian
:06:42. > :06:46.leadership in order to stop supporting the Al-Assad regime. In
:06:46. > :06:52.fact, statement itself testifies to the fact that the Obama
:06:53. > :06:56.administration, as you know, has been trying to co-opt the Russians
:06:56. > :07:01.to get a Security Council resolution and exert more sanctions
:07:01. > :07:07.on Syria and the threat of force. It seems to me a rift has developed
:07:07. > :07:10.between Washington and Russia. The second point, that hasn't received
:07:10. > :07:17.any attention, Clinton warned the Syrian leadership against massing
:07:17. > :07:21.groups in Alapo, that is a city that faces Turkey. This tells but
:07:21. > :07:25.the implications, the potential that the Syrian conflict could
:07:25. > :07:29.merge into a region-wide conflict. Syria has already become a
:07:29. > :07:32.battleground, a war for proxy for regional players and we are seeing
:07:32. > :07:36.the Russians and the Americans clashing over Syria at this point.
:07:36. > :07:41.Does this seem to you to be a purely diplomatic manoeuvre that is
:07:41. > :07:44.being engaged in here? Not really. It doesn't to me. I have a
:07:44. > :07:49.different take than your other guest. I think it is a real big
:07:49. > :07:55.deal when a global power sends attack helicopters on the very same
:07:55. > :08:00.day the UN use the words "civil war" for the first time. On the
:08:00. > :08:04.same day that a report documenting unspeakable atrocities has come out.
:08:04. > :08:10.This is direct intervention in a military conflict by Russia. Now,
:08:10. > :08:14.yes, there is stand-off, there is a diplomatic stand-off going on here.
:08:14. > :08:22.But I think it is more than that. I think the Russian, I think the
:08:22. > :08:27.secretary was right in calling it escalatory. How do you think, you
:08:27. > :08:31.don't think this could evolve into any kind of military confrontation
:08:31. > :08:36.between the two great powers, do you? Ironically an American general
:08:36. > :08:40.was asked today why the Americans, the American military does not
:08:40. > :08:43.really stop the shipment of Russian arms into Syria, his answer was,
:08:43. > :08:48.well the administration has not made a decision to basically stop
:08:48. > :08:52.the shipments. He said the question is not whether Syria receives arms,
:08:52. > :08:59.the question is what does Assad do with the arms. The reality is, we
:08:59. > :09:04.do have a stand-off, between Russia and the United States, and the
:09:04. > :09:08.Russian-American rivalry over Syria has really exacerbated the Syrian
:09:08. > :09:12.conflict. There is no doubt that Russia's support for Syria has
:09:12. > :09:17.emboldened the Assad regime, and allowed him to do what has been
:09:17. > :09:22.doing for the last 14 months. Are we closer to any outside
:09:22. > :09:24.intervention in Syria? I doesn't doubt it very much. There is no
:09:24. > :09:29.political will, on the part of the United States or the international
:09:29. > :09:32.community, to intervene in Syria. The consensus in Washington is
:09:32. > :09:37.military intervention would exacerbate an already dangerous
:09:37. > :09:42.situation, and would turn into a region-wide conflict. Where
:09:42. > :09:49.Hezbollah, Iran and Saudi Arabia would become involved, and also the
:09:49. > :09:52.spill over into neighbouring countries, particularly Lebanon.
:09:52. > :09:56.are led to believe then that these are rather hollow words by the
:09:56. > :10:01.Secretary of State? I don't think they are hollow words, I think it
:10:01. > :10:05.is a shot across the bough to Russia to stand down. There are
:10:06. > :10:11.ways across this, the President of Yemen where the Dayton accords and
:10:11. > :10:16.the power-sharing agreements in the Balkan agreement, there are -- the
:10:16. > :10:19.Balkan conflict, there are model, but the Russians have to stop
:10:20. > :10:26.saying no to everything. Which is there policy. I think this is
:10:26. > :10:34.running through the hole and call your bluff, and make you play a
:10:34. > :10:43.constructive game rather than an obfuscating role. You think that Mr
:10:43. > :10:47.Putin is person who might take that opportunity? To Play a more
:10:47. > :10:53.constructive game. Yes. Not when he has been caught shipping attack
:10:53. > :11:01.helicopters over to Syria. I think when they take on more wart he,
:11:01. > :11:04.taking bad press -- more water, taking bad press throughout the
:11:04. > :11:08.world. The Secretary of State was right to call him out today. Things
:11:08. > :11:13.are looking worse and worse in Syria? Absolutely. I think that
:11:13. > :11:17.Syria is nearing the end of the point of no return. It is nearing
:11:17. > :11:27.the tipping point. Syria reminds me of Lebanon during the first phase
:11:27. > :11:33.of the 1975-1976 war. Massacres, assassination, car bombings,
:11:33. > :11:36.neighbours turning against neighbours, communities against
:11:36. > :11:41.communities. In Syria the Syrian Government is losing control of
:11:41. > :11:49.areas of Syria, and losing its monopoly on the use of force. That
:11:49. > :11:53.is Sirius situation. There is plan to safety trembling
:11:53. > :11:58.banks of Europe, and therefore the euro. It is said to approve a first
:11:58. > :12:02.stage of a banking ewe union in the eurozone at a summit this summer.
:12:03. > :12:06.The British Government said it supports the scheme, yet earlier
:12:06. > :12:09.today the Chancellor of the Exchequer was wondering aloud if it
:12:09. > :12:14.would take the departure of Greece for the Germans to sign up for the
:12:14. > :12:17.scheme. Something more is need for the bail out of troubled Spanish
:12:17. > :12:19.banks, that was supposed to restore confidence there and didn't
:12:19. > :12:27.convince the international money markets today. Last night Paul
:12:27. > :12:30.Mason was in Madrid, on his no so grand tour, tonight he's in Athens.
:12:30. > :12:33.Here in Athens we are in the last few days of a very important
:12:33. > :12:38.election campaign. Opinion polls are banned. But it feels to me,
:12:38. > :12:43.having been here half a day, speaking to contacts and ordinary
:12:43. > :12:49.people, it is still 50-50 whether the Conservatives win this or the
:12:49. > :12:54.far left party, Syriza. If they win, as their leader, Alexis Tsipras
:12:54. > :12:58.said today, a new era starts on Monday. They scrap the bail out
:12:58. > :13:02.conditions and throw the ball back into the European Union's court.
:13:02. > :13:06.The old era is looking dodge year, the Spanish debt costs today rose
:13:06. > :13:10.to their highest-ever in the eurozone, nudging the point of
:13:10. > :13:14.uncontrollability, despite the bail out. So, what we have seen is bait
:13:14. > :13:20.of choreography from the called mass Masters of the Universe, the
:13:20. > :13:24.people supposed to run the whole system. Finally Doug a bit less
:13:24. > :13:30.running and floundering, with this proposal of a banking union in
:13:30. > :13:34.Europe, in the form of a plan from Mr Barroso. The eurocrisis needs a
:13:34. > :13:37.circuit breaker. For months the leaders have struggled to find one.
:13:37. > :13:44.The President of the European Commission proposed a European
:13:44. > :13:47.banking union. He wants to flip the switch, sharpish. The commission in
:13:47. > :13:53.this debate will be for a structured and ambitious approach,
:13:53. > :13:57.that may include what you can call a banking union. Some elements of
:13:57. > :14:02.this banking union will be more integrated financial supervision,
:14:02. > :14:07.and also more integrated deposit guarnantees. And I think it is
:14:07. > :14:11.important we have this long-term vision about more Europe. Here is a
:14:11. > :14:15.clue to the size of the problem, when the European Central Bank lent
:14:15. > :14:19.over a trillion euros to EU banks on rather favourable terms a few
:14:19. > :14:23.months ago, there was no shortage of takers. We don't know the exact
:14:23. > :14:29.figures, or participant, we found out quite a bit about the health of
:14:29. > :14:33.the sector. Banks in Austria, Netherlands, Ireland, Denmark,
:14:33. > :14:37.Britain and Spain. Barroso's plan involves moving rapidly towards a
:14:37. > :14:42.common supervision system, and a common bail out fund, raised
:14:42. > :14:46.through a levy on the banks themselves. Deeper reforms, like a
:14:46. > :14:50.common deposit guarnantee and formal commitment to tax-payers to
:14:51. > :14:54.fund cross-border bail out, would require a treaty change. But, says
:14:54. > :14:59.Mr Barroso, the first phase could be agreed at the European Council,
:14:59. > :15:03.this month, and implemented as early as January 1st next year. The
:15:03. > :15:08.plan comes as the focus of the euro crisis has switched from
:15:08. > :15:12.Governments struggling to borrow, to banks struggling to stay solvent
:15:12. > :15:17.as losses on property loans mount, and billions of euros fly out of
:15:17. > :15:21.the system to safe havens. Germany has already signalled its
:15:21. > :15:25.support for common supervision, and Newsnight understands, Angela
:15:25. > :15:29.Merkel is now ready to sign up to the first phase of a banking union
:15:29. > :15:32.at the European Summit. The plan comes as the focus of the
:15:33. > :15:36.eurocrisis has switched from Governments struggling to borrow,
:15:36. > :15:42.to banks struggling to stay solvent as losses on property loans mount
:15:42. > :15:47.and billions of euros fly out of the system to safe havens.
:15:47. > :15:51.TRANSLATION: We do want Europe, we do want more Europe, but I want a
:15:51. > :15:57.Europe in which it is always made certain that joint accountability
:15:57. > :16:01.and joint control are always in one hand. There is a near consensus
:16:01. > :16:06.amongst political leaders in Germany, business leaders, and
:16:07. > :16:12.indeed senior bankers, and top officials, that the answer to the
:16:12. > :16:17.eurozone crisis is more Europe, loosely defined, more integration.
:16:18. > :16:23.Almost nobody is saying the reverse. There are one or two people in the
:16:23. > :16:28.Bundesbank, who are not in favour and would be happy if it broke up.
:16:28. > :16:32.And one 0 two maverick euro-sceptic academics saying the euro is bad
:16:32. > :16:36.for Germany, they are very isolated. Britain has signalled its support
:16:36. > :16:40.for the plan, agreed last week at the called quad of senior ministers
:16:40. > :16:45.and at the cabinet today. But the UK will stay out of the union. Veto
:16:45. > :16:50.any attempt to impose it beyond the eurozone, and insist on a
:16:50. > :16:54.strengthened single market for financial services across the 27EU
:16:54. > :16:59.countries, protecting the City of London.
:16:59. > :17:03.Ever since the euro crisis started here in Greece, the focus has been
:17:03. > :17:07.on bailing out countries, now the focus is definitely on bailing out
:17:07. > :17:10.banks. Because money is flowing out of the system here and out of other
:17:10. > :17:16.stressed peripheral economies. But the banking union, as a solution,
:17:16. > :17:21.poses the question, point blank, who is in, and who is out?
:17:21. > :17:26.But the circuit breaker might come too late. On Sunday Greece votes,
:17:26. > :17:29.the left, Syriza, stands a chance of winning, and it would cancel the
:17:29. > :17:33.austerity programme demanded during the write-off of the country's
:17:33. > :17:41.debts. In any case, some think there are big problems with the
:17:41. > :17:44.whole concept of the banking union. I think it is quite easy to levy a
:17:44. > :17:49.criticism at European politicians and commissioners and say they are
:17:49. > :17:53.just trying to do union of any description, because that's their
:17:53. > :17:59.agenda and actually it is putting all Europe's sovereign invalids
:17:59. > :18:09.together, which isn't going to make the situation better for anyone. I
:18:09. > :18:10.
:18:10. > :18:13.think that is a mistaken view on it. And taken by euro-sceptics, the key
:18:13. > :18:18.to the euro-system survival is integration or bust, there is very
:18:18. > :18:24.little inbetween. Meanwhile, this is a scene from the
:18:24. > :18:28.Europe they are trying to save. Miners in the Spanish provinces,
:18:28. > :18:35.protesting about job losses, after the Government withdrew their
:18:35. > :18:40.supsidies. Europe can at least measure its
:18:40. > :18:47.banking and bond risks in tenths of one per cent. The social risks of
:18:47. > :18:51.failure are, in some parts of southern Europe, off the scale.
:18:51. > :18:57.Paul's still in Athens. Are the Germans likely to fall for this
:18:57. > :19:03.scheme. Mr Barroso wouldn't have made the point so strongly today,
:19:03. > :19:07.come out, with the proposal, unless he was getting big signals, and I
:19:07. > :19:13.understand he is, from the CDU, from Merkel's Government, that they
:19:13. > :19:18.are going to support phase 1, the du doable bit that they can decide
:19:18. > :19:22.at the end of the month of banking union, likewise voices in the ECB
:19:22. > :19:25.are being put behind that. There is a theory out there, among people
:19:25. > :19:28.close to the loop, it is a were, that the Germans are in the process
:19:28. > :19:32.of deciding that the future of Europe will look like who will go
:19:32. > :19:35.with them, which countries might not make it. Obviously with Mr
:19:35. > :19:39.Osborne raising the possibility of Greece here not making it through
:19:40. > :19:44.to the much more tightly integrated Europe that is being designed. One
:19:44. > :19:47.has to hope that somebody is indeed designing the future of Europe.
:19:47. > :19:51.Because day by day, as we cover this, the surface impression
:19:51. > :19:57.remains that nobody is really designing much.
:19:57. > :20:02.Thank you very much. Our political editor, Allegra Stratton, is here
:20:02. > :20:06.today. There were some surprisingly frank words from George Osborne
:20:06. > :20:10.weren't there? An American journalist once said gap is when a
:20:10. > :20:14.politician speaks the truth. Today George Osborne suggested this idea
:20:14. > :20:18.that he was possibly speaking off the record, but his aides are not
:20:18. > :20:21.resigning from his comments, that it might be best for Germany if
:20:21. > :20:25.Greece were to leave the Europe, because the German public would
:20:25. > :20:28.have a greater sense of clarity of there being resolution within the
:20:28. > :20:31.eurozone to deal with various countries, and Greece wasn't one of
:20:31. > :20:35.those countries that was prepared to deal with it. Is this what is
:20:35. > :20:41.known as being helpful? He's incredibly frustrated. Some of his
:20:41. > :20:44.friends talk about his stories from some G20/eurozone meetings where
:20:44. > :20:49.people are playing on their I pads rather than coming up with
:20:49. > :20:54.pollution -- iPads rather than coming up with solutions. His
:20:54. > :20:59.frustrations is coming through. Equally, Paul used the phrase,
:20:59. > :21:04."people close to the loop", many people don't think there is a loop
:21:04. > :21:07.and people are close to the game plan. And other people saying
:21:07. > :21:11.really Barroso could legislate with all these eurozone economies for
:21:11. > :21:14.the beginning of January 2014, that is very quick and unlikely even
:21:14. > :21:17.Barroso's plan is being met with raised eyebrows inside Government
:21:17. > :21:22.right now I think there is a sense that we are hearing concrete plans,
:21:22. > :21:25.but actually the likelihood of them being realised is still, very, very
:21:25. > :21:28.small. One further thing, there is a growing number of people within
:21:28. > :21:34.cabinet who think this entire chaos should be used as way in which to
:21:34. > :21:39.back out of Europe. We might explore that later on.
:21:39. > :21:42.Here also tonight we have Joe Johnson, the business ministers's
:21:42. > :21:45.Parliamentary Private Secretary, an opening bowler for the House of
:21:46. > :21:49.Commons cricket team. We have the chair of the European Parliament's
:21:49. > :21:53.economic affairs committee in Strasbourg, and from Berlin we have
:21:53. > :22:01.the head of the Berlin stock exchange.
:22:01. > :22:05.Let's go to Strasbourg, do you think this is a good idea?
:22:05. > :22:10.banking union? Yeah. There are elements of a good idea in it. One
:22:10. > :22:15.of the things it recognises is that banking supervision has to take
:22:15. > :22:19.account of what monetary policy is. So to have the ECB involved in
:22:19. > :22:23.supervision of eurozone banks, and therefore taking account of
:22:23. > :22:27.eurozone monetary policy in that supervision is a good idea. The
:22:27. > :22:31.parallel to that is, of course, that it would mean that in the
:22:31. > :22:36.United Kingdom then the Bank of England would be able to continue
:22:36. > :22:40.to have some adjustment in banking supervision, in line with the
:22:40. > :22:44.policies that we were setting. So there is some happy parallels there.
:22:44. > :22:48.There is a lot more that we would have to do. There is concern, I
:22:48. > :22:52.think, as to whether Germany actually would have all their banks
:22:52. > :23:02.in it. They tend to talk about the largest banks. Let's go to Berlin
:23:02. > :23:03.
:23:03. > :23:06.and find out does it seem a sensible idea to you there?
:23:06. > :23:12.Obviously it is feasible with having a centralised supervision,
:23:12. > :23:17.most likely that will happen, but please remember we have the EAB in
:23:17. > :23:22.London, there is almost something already in place. The EAC doesn't
:23:22. > :23:27.have the power which is -- EAB doesn't have the power needed for
:23:27. > :23:31.centralised supervision, and the ECB might be better suited to do
:23:31. > :23:36.that. The second part is there should be a joint debt insurance
:23:36. > :23:40.system, here I believe we first need some kind of fiscal common
:23:40. > :23:43.policy. And the third bit would be some kind of institution which
:23:43. > :23:47.deals with failed banks, which currently happens on national level,
:23:47. > :23:53.and then should happen on a European level. The British
:23:53. > :23:57.position has been that we want the euro to succeed. So we think this
:23:57. > :24:02.is a good idea, do we? Britain is supportive of anything that
:24:02. > :24:08.resolves the eurocrisis, and this is potentially the big bass zook ka
:24:08. > :24:11.that the eurocrisis -- bazooka that the eurocrisis has been waiting for
:24:11. > :24:16.years. If it resolves the crisis, Britain won't stand in the way of
:24:16. > :24:19.it. We won't be part of any banking union, but we won't be part of the
:24:20. > :24:25.problem. We are in favour of the eurozone taking the medicine, but
:24:25. > :24:29.not taking it ourselves? Osborne has made clear he's happy for
:24:29. > :24:33.eurozone countries to go ahead with banking union, but Britain would
:24:33. > :24:39.want safeguards to protect British tax-payers, and to make sure that
:24:39. > :24:45.the single market continues to be the property of all 27 member-
:24:45. > :24:50.states. And isn't arrogated to the signatories of the Fiscal Compact
:24:50. > :24:56.or members of a banking union. you think the German people be
:24:56. > :24:59.prepared to see perfectly decent German banks used to prop up flakey
:25:00. > :25:07.foreign banks? Only if there is a control element in it. I believe if
:25:07. > :25:12.the control, the budget control has been influenced by German
:25:12. > :25:18.politicians then, then the German taxpayer is willing to risk moving
:25:18. > :25:23.some of its tax into banks which fail in different nations.
:25:23. > :25:27.Britain would be right to worry, wouldn't they, about some of the
:25:27. > :25:31.implications of an agreement like this? Yes, I think we would have to
:25:31. > :25:34.get the balance right, in the model that I'm envisaging where the
:25:35. > :25:38.European Central Bank does the actual supervision, or the high-
:25:38. > :25:42.level supervision of the banks. There would still be the European
:25:42. > :25:47.banking authority, which is in London, and that would be looking
:25:47. > :25:51.after the single market side. We still would have common rules about
:25:51. > :25:55.our financial services industry being able to have passports into
:25:55. > :25:59.doing business in other European countries. That's not going to stop
:25:59. > :26:03.and we still would have the EBA as the referee for that. We would have
:26:03. > :26:07.to make sure the voting rules were changed so that the eurozone didn't
:26:07. > :26:11.always outvote everybody else. I think that could quite easily be
:26:11. > :26:19.done. When it comes to market infrastructure, that is talking
:26:19. > :26:23.about whether you are operating in euro, it has been said by the E --
:26:23. > :26:27.ECB that they would want everything cleared by the eurozone, they don't
:26:27. > :26:29.do that in the United States with dollars. We would demand that there
:26:29. > :26:32.wouldn't be discrimination that have kind. That would be the single
:26:32. > :26:35.most important thing for the City, and many other things flow from
:26:35. > :26:41.that. Do you think that an agreement like
:26:41. > :26:46.this would require revisions of European treaties? Foingsly, a
:26:46. > :26:50.banking union might -- potentially, a banking union might. There are
:26:50. > :26:53.many different variations of fiscal union and banking unions. Wouldn't
:26:53. > :26:55.this country be committed to a referendum on membership of the
:26:56. > :26:59.whole thing? The Government's position is pretty clear, it is set
:26:59. > :27:04.down in legislation, if there is a transfer of powers or competences
:27:04. > :27:08.away from the UK to Brussels, then that would automatically trigger a
:27:08. > :27:13.referendum. But that need not necessarily apply in the case of
:27:13. > :27:17.this sort of a thing? Ultimately it will be a political decision as to
:27:17. > :27:21.whether closer fiscal and economic co-ordination among the eurozone
:27:21. > :27:24.members or the Fiscal Compact members, which is a broader group
:27:25. > :27:30.of countries, constitutes a transfer of powers from Britain.
:27:30. > :27:32.Personally I think it is certainly, you can see the strengthening of a
:27:32. > :27:35.group diminishes the relative standing of a country outside of
:27:36. > :27:39.that group, in relation to that group. But it doesn't necessarily,
:27:39. > :27:42.in legal terms, constitute a transfer of powers. It is a
:27:42. > :27:44.political shift of power, not necessarily a legal one. But the
:27:44. > :27:48.question of where exactly the national interest lies is a
:27:48. > :27:51.difficult one, isn't it? Certainly, and Britain's national interest is
:27:51. > :27:56.in resolving this eurocrisis, that is why Britain is supporting
:27:56. > :27:59.measures po, tensionly, such as the banking union, that might do that.
:27:59. > :28:06.The British Chancellor today, the Chancellor of the Exchequer, said
:28:06. > :28:11.that it might require a Greek exit to make Germany take the crisis
:28:11. > :28:15.sufficiently seriously how does that play in Germany? We call this
:28:15. > :28:21.a Lehmans event. There is actually discussion in Germany if it might
:28:22. > :28:25.be a healthy thing to go through an exercise like that. It is pretty
:28:25. > :28:28.drastic, but I believe the eurozone could demonstrate they could
:28:28. > :28:32.survive an exit of a country from the euro. That would stablise on
:28:32. > :28:35.the one hand, on the other hand it would discipline everybody else.
:28:35. > :28:40.I'm not sure if that is the right approach. I personally think you
:28:40. > :28:45.should try everything to keep Greece in the euro, we should try
:28:45. > :28:50.everything to avoid further distance between the most important
:28:50. > :28:55.financial centre in Europe, which is London, from mainland Europe. I
:28:55. > :29:00.think it is very important that if you have a banking union, with 25
:29:00. > :29:04.banks, or so, that we stay as close as possible to what happens in the
:29:04. > :29:08.UK, because we depend in mainland on London and the City. I think the
:29:08. > :29:14.other way round as well. From your point of view, supposing there were
:29:14. > :29:19.this banking union, which didn't involve Britain, for obvious
:29:19. > :29:24.reasons, would that be in, would it do Britain any good or not?
:29:24. > :29:30.wouldn't do Britain any good, it wouldn't do Europe any good.
:29:30. > :29:34.Because the financial system is very much interwoven, and having a
:29:34. > :29:38.two-speed Europe is bad thing, and having two different financial
:29:38. > :29:45.systems in place, might make things even worse. I can see that there
:29:45. > :29:50.will be a lot of arguments coming up between banks sitting in London,
:29:50. > :29:56.and banks sitting in Europe. Thank you all very much indeed.
:29:56. > :29:59.Now, when Jeremy Hunt, the embattled Culture Secretary, faces
:29:59. > :30:02.the House of Commons demands tomorrow that he be investigated
:30:02. > :30:07.for alleged breaches of the Ministerial Code, he will do so
:30:07. > :30:12.without the aid of some of his supposed allies. The Lib Dem
:30:12. > :30:17.leaders has told his MPs to abstain, when the man he shares a cabinet
:30:17. > :30:20.table with faces censure tomorrow. One might say with friends like
:30:20. > :30:23.this...He Survived Leveson, but not the Lib Dems. They had a meeting
:30:23. > :30:29.this evenings, and Nick Clegg told them to abstain on a vote tomorrow.
:30:29. > :30:34.It won't be critical in terms of the Government losing the vote. But
:30:34. > :30:38.it will be embarrassing, or a sign to Jeremy Hunt that his Lib Dem
:30:38. > :30:42.colleagues don't support him not having been referred to Sir Alex
:30:42. > :30:46.Allan who is the Prime Minister's adviser on the Code of Conduct
:30:46. > :30:51.issues. Is it surprising that Nick Clegg is behaving like this, or is
:30:51. > :30:54.he leading from the back? It is not surprising, he's supposed to have
:30:54. > :30:58.raised these issues with David Cameron many times in private, and
:30:58. > :31:03.indeed, his MPs have made careers out of these sort of probity issues.
:31:03. > :31:08.It is not surprising, it is very, very irritating for Tory MPs,
:31:08. > :31:12.possibly like Joe Johnson, but more discreet than Joe Johnson, who feel
:31:12. > :31:17.they have been ordered back. One person has come back from honeymoon
:31:17. > :31:21.to vote in favour of the Government, and alongside Jeremy Hunt tomorrow
:31:21. > :31:25.afternoon, and then they learn their coalition colleagues are
:31:25. > :31:28.abstaining. It stores up this feeling that the Lib Dems are
:31:28. > :31:33.allowed to do what their consciences says but the Tories
:31:33. > :31:36.can't. There is elements of the Jeremy Hunt that upsets Tory
:31:36. > :31:41.backbenchers, but it is also about coalition relationships getting
:31:41. > :31:43.more difficult. What do you feel about it, Joe Johnson? Jeremy Hunt
:31:43. > :31:47.has the confidence of the Prime Minister and the parliamentary
:31:47. > :31:51.party. Tomorrow's vote should be mechanical and over quickly. What
:31:51. > :31:54.do you think about the Lib Dems abstaining? It is something for
:31:54. > :31:58.them to explain. Frankly Jeremy Hunt has the confidence of the
:31:58. > :32:02.Government and the Prime Minister, and parliamentary party, and
:32:02. > :32:05.everybody wishes him the best of luck into the olympics. You are
:32:05. > :32:08.more discreet than the people Allegra Stratton has been talking
:32:08. > :32:14.Earlier today it was the turn of the former Prime Minister, John
:32:14. > :32:18.Major, to appear at Leveson, it turned into an awkward session for
:32:18. > :32:20.Rupert Murdoch. David Grossman looked on. By his own admission,
:32:20. > :32:25.John Major cared too much about what the press wrote about him. It
:32:25. > :32:32.was natural, he explained, to get a bit raty, when his policies, like
:32:32. > :32:36."back to basics ", were, he said, willfully misrepresented. I wear by
:32:36. > :32:39.almighty God...We Did get an and very interesting anecdote of a
:32:40. > :32:44.dinner before the 1997 election, where, Rupert Murdoch, apparently,
:32:45. > :32:47.sought to change the Major Government's policy on Europe.
:32:47. > :32:53.Murdoch said that he really didn't like our European policies, this
:32:53. > :32:57.was no surprise to me. That he didn't like our European policies,
:32:58. > :33:02.and he wished me to change our European policies. If we couldn't
:33:02. > :33:08.change our European policies, his papers could not and would not
:33:08. > :33:14.support the Conservative Government. As I recall, he used the word "we",
:33:14. > :33:19.when referring to his newspapers. He didn't make the usual nod
:33:19. > :33:23.towards editoral independence. this point there was a collective
:33:23. > :33:27."aha" from those watching. Afterall Rupert Murdoch had previously told
:33:27. > :33:31.the inquiry this. I have never asked a Prime Minister for anything.
:33:31. > :33:36.Mr Murdoch's supporters say he was talking there about asking prime
:33:36. > :33:40.ministers for personal or commercial favours. Changing
:33:40. > :33:43.Government policy is another matter. Afterall, more or less every
:33:43. > :33:48.newspaper seeks to change Government policy, more or less
:33:48. > :33:51.every day. Although, not always in that sort of face-to-face personal
:33:51. > :33:55.way. It is not very often someone sits in front of a Prime Minister
:33:55. > :34:00.and says to a Prime Minister, I would like you to change your
:34:00. > :34:04.policy. If you don't change your policy, my organisation cannot
:34:04. > :34:09.support you. So it is unlikely to be something I
:34:09. > :34:14.would have forgotten. John Major then went on to accuse former
:34:14. > :34:20.advisers of Gordon Brown of lying about him to the press, on not one
:34:20. > :34:23.but two occasions. Firstly, saying both he and Norman Lamont were
:34:23. > :34:27.trying to prevent publication of documents relating to Black
:34:27. > :34:32.Wednesday, and on a second occasion, that he had tried to prevent Robert
:34:32. > :34:35.Mugabe being striped of his Knighthood. In fact, Sir John said,
:34:35. > :34:45.he was so angry about what had happened, he wrote to the then
:34:45. > :35:04.
:35:04. > :35:09.cabinet secretary about it. In the I regarded the behaviour that
:35:09. > :35:12.Norman Lamont and I, in the first instance, and me in the second, had
:35:12. > :35:15.suffered, as being absolutely dishonest and dishonourable. I
:35:15. > :35:18.suppose we're big enough to take t but it seemed to me, from what I
:35:18. > :35:22.heard, it was happening to lots of other people as well. In terms of
:35:22. > :35:26.this direct briefing against people. I thought it was time that there
:35:26. > :35:31.should be no doubt that the Prime Minister knew about it. Ed Miliband
:35:32. > :35:36.was next up, giving evidence. He, of course, was once one of Gordon
:35:36. > :35:41.Brown's advisers, although not one who briefed the press. He was,
:35:41. > :35:44.though, asked about the then advisers who did? Were you aware of
:35:44. > :35:53.off the record briefings against Tony Blair and other Government
:35:53. > :35:59.ministers by, in particular, Ed Balls, Charley Whelan, and Damian
:35:59. > :36:03.McBride? Let me answer that specifically, Ed Balls, no, Charley
:36:03. > :36:06.Whelan left the Government in 1999. One of the reasons he left was
:36:06. > :36:11.because of his style of operation. I can't point you to direct
:36:11. > :36:14.evidence, but I would say one of the things he did, was he briefed.
:36:14. > :36:21.Including potentially against people who were in the Government.
:36:21. > :36:27.On Damian McBride, when I was a cabinet minister, I did raise a
:36:27. > :36:32.specific concern that I had with Mr Brown, I believe in September 2008,
:36:32. > :36:36.about some of Mr McBride's activities.
:36:36. > :36:40.Mr Brown, of course, yesterday told the inquiry, that he didn't
:36:40. > :36:44.authorise any briefings against John Major, Tony Blair or indeed
:36:44. > :36:49.anyone else. Today, his successor as Labour leader told the inquiry
:36:50. > :36:55.that part of the problem has been the size of Rupert Murdoch's
:36:55. > :37:05.newspaper operation. I don't believe that one person should
:37:05. > :37:06.
:37:06. > :37:12.continue to control 37%, or now 34% of the newspaper market. My strong
:37:12. > :37:15.instinct is that's too much. And I would like to see, I submit, that I
:37:16. > :37:20.would like to see the inquiry looking at the question as to
:37:20. > :37:23.whether we should have lower limits. Tomorrow the inquiry will be
:37:23. > :37:29.hearing from Alex Salmond and Nick Clegg, before hearing from the
:37:29. > :37:32.Prime Minister on Thursday. What do you do with young
:37:32. > :37:36.criminals? Bang 'em up is the usual answer from much of the population,
:37:36. > :37:41.despite the fact that we know that most of them will just go on to
:37:41. > :37:46.offend again. Battery farms full of bothered young people is what one
:37:46. > :37:51.reform group -- bored young people is what one reform group calls
:37:51. > :37:54.prison. The hardest cases can be a nightmare to manage. Now the
:37:54. > :37:59.biggest young offenders prison in Europe is trying a new way of
:37:59. > :38:09.dealing with these most troubled and troublesome images. In this
:38:09. > :38:09.
:38:09. > :38:15.report they use some strong language.
:38:15. > :38:20.Beyond two walls, hundreds of yards of razor wire, and five secure
:38:20. > :38:23.gates. Europe's largest youth prison. Hindley, near Wigan, is
:38:23. > :38:31.home to some of the most violent and disruptive teenagers in Britain.
:38:31. > :38:35.And we're the first to film inside. Two lads tried to jump me, I turned
:38:35. > :38:40.around and started fighting with them. One picked up a bottle and
:38:40. > :38:46.tried to hit me with it, I took it off him and smashed it around one
:38:46. > :38:52.of them and put it in the other one's neck. I walked into a shop
:38:52. > :38:56.with a knife, I pointed the knife at him to give me all the money.
:38:56. > :39:01.Talk me through the incident? a couple of drinks with the boys
:39:01. > :39:08.and that, and just got into a bit of an argument, and broke one of
:39:08. > :39:11.their noses, and the police seen it. This unit inside Hindley, the
:39:11. > :39:16.Willow Unit, is the first of its kind, a prison within a prison, set
:39:16. > :39:19.up to take the most difficult, violent teenagers. Almost all are
:39:19. > :39:28.transferred here after getting involved in fights on the sprawling
:39:28. > :39:34.main wings of Hindley. Why did you do that, did you that on purpose
:39:34. > :39:37.you fuckin dickhead. I hit one lad and he fell on the floor and I
:39:37. > :39:41.stamped him, and I went on to another one, I sorted two people
:39:41. > :39:45.and went for the third one. People want to wind you up, you have to
:39:45. > :39:48.stand your ground, or people will start bullying you. Is that quite
:39:48. > :39:51.important to you, the whole reputation thing? If you don't have
:39:52. > :39:55.a reputation people will take you as a Muppet, if you have a
:39:55. > :39:59.reputation they will ease on you a bit. If I can't beat you I will
:39:59. > :40:03.come back with a weapon. We are locking up far fewer young people.
:40:03. > :40:09.The number held across England and Wales has fallen by a third in five
:40:09. > :40:14.years. Fewer than 3% of those in custody are now under 18. But those
:40:14. > :40:19.under 18s are involved in more than 20% of all assaults in prison.
:40:19. > :40:22.The main wings in Hindley are large, 60 prisoners, watched over by six
:40:22. > :40:28.prison officers. It is easy for one small incident
:40:28. > :40:33.to get out of hand. Willow is the first real attempt to change that.
:40:33. > :40:43.A separate 11-bed unit, with three- times more staff. There to respond
:40:43. > :40:44.
:40:44. > :40:48.when things go wrong. (shouting) A routine search has
:40:48. > :40:57.turned violent a teenager has smashed up his TV. Now he's
:40:57. > :41:01.throwing himself against his cell door again and again and again.
:41:01. > :41:06.Do this on the busy main wing of the prison and you disturb everyone
:41:06. > :41:11.else. You make yourself a target, as soon as you step outside your
:41:11. > :41:19.cell. Ryan, are you going to talk to me? Talk to me, fucking talk to
:41:19. > :41:23.He has been quite problematic this morning, very threatening and
:41:23. > :41:28.abusive towards staff. He doesn't like to accept any responsibility.
:41:28. > :41:32.I'm not litsening to this any more, we are going around in circles and
:41:32. > :41:36.getting nowhere, when you have chilled out I will come back. He
:41:36. > :41:39.saw the TV had been taken out and kicked the TV and went as if he was
:41:39. > :41:47.going to assault staff, so staff restrained him and returned him to
:41:47. > :41:57.his room. How long until he gets to another TV? Smashing a TV is 28
:41:57. > :42:00.days. We're going into the mental health unit. How do you begin to
:42:00. > :42:05.handle teenagers who slam themselves against cell doors, and
:42:05. > :42:10.think nothing of attacking other prisoners? Well, to start with, you
:42:10. > :42:16.put them in a chill-out room. use it for young people to do
:42:16. > :42:21.relaxation, to help them, to engage. Andy Rodgers is the senior clinical
:42:21. > :42:25.psychologist here, he says the main aim is to improve safety in the
:42:25. > :42:29.prison. Any rehabilitation is a bonus. It is not about they are
:42:29. > :42:34.skwhrus going to be better, the reality is -- just going to be
:42:34. > :42:38.better, the reality is they won't be. It has taken up to 17 years to
:42:38. > :42:43.get to this point, it won't take three months for them to be better.
:42:43. > :42:47.But we try to break some of those cycles, I guess. Is this a reward
:42:47. > :42:51.for bad behaviour, you are behaving badly, therefore, you are put in a
:42:51. > :42:57.nice wing, with an XBox, and the rest of it. You want to me ask me
:42:57. > :43:04.is it a soft option? Yes? Our view, very clearly, is it is not a soft
:43:04. > :43:08.option. Actually, developmentally, overcare, being overly nice can be
:43:08. > :43:14.as harmful as neglect in the situation. All this costs money. �2
:43:14. > :43:17.million to set up Willow. �200,000 a cell. Prison reform groups say
:43:17. > :43:21.that will be far better spent taking these teenagers completely
:43:21. > :43:27.out of jail. And putting them in a high-security children's home, with
:43:27. > :43:37.more staff, more care, more help. This place, they say, is no long-
:43:37. > :43:37.
:43:37. > :43:43.term answer, just a short-term fix. Give me a tour round here?
:43:43. > :43:47.Scott has been on Willow for three months now, again because of his
:43:47. > :43:52.behaviour in the main prison. There's my TV, I can watch that at
:43:52. > :43:58.night.'S About to finish a sentence for holding up a shop with a knife,
:43:58. > :44:02.and a string of burglaries. Do you think it has made a
:44:02. > :44:09.difference to you? Pretty much, I have started to behave here. I have
:44:09. > :44:15.only been on basics once. You get your XBox if you start behaving, I
:44:15. > :44:20.will behave for that. I don't know, out next week, so, I don't know. It
:44:20. > :44:25.has gone faster in here, time. are going to get leased next week?
:44:25. > :44:29.Yeah. Next Friday. Are you looking forward to it? Not really bothered.
:44:29. > :44:34.At the end of the day. You are not really bothered about getting
:44:34. > :44:38.released? Not really. Are you a bit worried? A bit worried, but it is
:44:38. > :44:46.standard, it was only 13 month, I don't know what to expect when I
:44:46. > :44:50.get out. That is the next big step, reoffending rates in youth prisons
:44:50. > :44:57.are notoriously high .5% of the teenagers in Hindley will end up
:44:57. > :45:01.committing another crime within a year of their release. These young
:45:01. > :45:11.-- These young people here will go d'oh well never to offend when they
:45:11. > :45:14.get out? -- here will do well never to offend when they get out? It is
:45:14. > :45:18.better if they refrain from offending earlier than they would
:45:18. > :45:22.have done if they hadn't had some of the intervention. I guess it is
:45:22. > :45:27.a developmental perspective that we take. It sound like the bar is, if
:45:27. > :45:31.we can get someone to hit someone lightly less than they are at the
:45:31. > :45:35.moment, that is almost a prosession? That is a start.
:45:36. > :45:40.-- A progression. That is a start. It is something another Willow
:45:40. > :45:45.inmate has been thinking about hard. Kieran has been in and out of
:45:45. > :45:48.prison since he was 15, this last time after breaking someone's nose
:45:49. > :45:54.in a pub brawl. He's now packing up his stuff, and getting ready to
:45:54. > :46:02.leave in a few weeks time. Do you think being in a unit like this,
:46:02. > :46:07.has it taught you to control your temper a little bit more? Yes,
:46:07. > :46:12.because I haven't lost it since I have been here. I take it that's a
:46:12. > :46:19.good thing. But it is different when I drink, yeah, but hopefully,
:46:19. > :46:26.since I have been down here, I have had more opportunity to see the
:46:26. > :46:29.alcohol nurse, the alcohol misuse worker, she has given me a lot of
:46:29. > :46:36.advice. It is beneficial at the end of the day. Do you think you could
:46:36. > :46:40.get on top of that? Yeah. Honestly, when you are out with mates back
:46:40. > :46:45.home? I'm moving into a new area, I'm trying to have a fresh start.
:46:45. > :46:52.What do you think your chances are of being successful? Auto-auto.
:46:52. > :46:56.What are the odds of the Willow Unit working? The Government is
:46:56. > :46:59.optimistic, it now wants more of these in other prisons. At the very
:46:59. > :47:04.least they could make life safer behind bars. But even the people
:47:04. > :47:08.working here accept the best Willow can really hope to do, is help
:47:08. > :47:11.these teenagers commit a less serious, less violent crime, next
:47:11. > :47:17.time round. On tomorrow's programme we will
:47:17. > :47:21.continue to explore the issue of troubled teenagers. Tim Whewell has
:47:21. > :47:24.been investigating how the private care home system has left
:47:24. > :47:30.vulnerable children open to abuse. Some of tomorrow morning's front
:47:30. > :47:32.pages now the Guardian chooses as its lead the same story we were
:47:32. > :47:42.focusing on earlier, Hillary Clinton's accusation that is the
:47:42. > :48:06.
:48:06. > :48:13.Russians are shipping helicopters That's all for now, for fall-out
:48:13. > :48:17.from last night's draw with France in the Euro 2012 championships. The
:48:18. > :48:23.England supporters' band was banned for performing by stewards in the