06/09/2012 Newsnight


06/09/2012

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


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Tonight, are the Government's home building plans a solid foundation

:00:12.:00:17.

for growth, or a house of straw? The new planning minister is here

:00:17.:00:22.

to tell us that building new conserve trees is the way out of

:00:22.:00:29.

the recession. The Central Bank fires the gun on the way out of the

:00:29.:00:32.

crisis in the eurozone. Will it hit the target?

:00:32.:00:40.

The way is now open for the ECB to buy unlimited amounts of debt,

:00:40.:00:43.

taking Spain and maybe Italy out of the firing line. With opposition to

:00:43.:00:47.

austerity rising, it will be hard for them to deliver the conditions

:00:47.:00:51.

set, and I have been on the road with the man organising the

:00:51.:00:55.

fightback in Andalucia. TRANSLATION: Another Europe is

:00:55.:00:59.

necessary, a Europe of the people, a Europe of the ones who don't have

:00:59.:01:06.

anything. The unemployed, the poor, people who demand a new reality.

:01:06.:01:12.

will be discussing the morals of the rescue deal. And, on board the

:01:12.:01:22.
:01:22.:01:29.

Africa express. The train that runs on music, we have access to the

:01:29.:01:36.

African musicians for a magical mystery tour.

:01:36.:01:41.

Good evening, a building bonanza in England, or an urban blight. The

:01:41.:01:44.

Government has announced plans it hopes will build our way out of a

:01:44.:01:48.

recession, ending the need for planning permission for virtually

:01:48.:01:52.

every garage extension, rear extension, basement conversion. The

:01:52.:01:57.

rules will last for three years and are designed to kick start the

:01:57.:01:59.

construction industry, and there by boosting Comet. It is about getting

:01:59.:02:03.

the planners off our back, says the Government. Will every Englishman

:02:03.:02:08.

put a new Tourette or two in his castle. Is this the coalition's

:02:08.:02:11.

really big economic idea. We will hear from the plan minister, Nick

:02:11.:02:16.

Boles, in a moment. Nobody who buys a house now, in the

:02:16.:02:20.

south of England, in London or Oxford or Bournemouth wants to know

:02:20.:02:25.

that the day they bought it, it has gone up by �5,000. This has been

:02:25.:02:28.

called the ripple effect, the delayed overfle of the property

:02:28.:02:33.

boom in the south. One estate agent it was more like a flood tide.

:02:33.:02:39.

one is suggesting we go back to the days of housing boom: In Leeds,

:02:39.:02:42.

estate agents report what they call staggering house price increases

:02:42.:02:45.

over the last six months. There is a lot of confidence now in the

:02:45.:02:49.

economy. That is one of the main reasons, I think people now feel

:02:49.:02:52.

far more confident about moving house, job prospects are better,

:02:52.:02:57.

and the budget, of course, helped the economy. What would David

:02:57.:03:02.

Cameron give to have someone saying that right now. Today the Prime

:03:02.:03:05.

Minister of unveiling the latest part of his plan, to unstick the

:03:05.:03:09.

housing market. The problem with the system at the moment is it is

:03:09.:03:13.

too slow, planning permission takes too long to get. There are too many

:03:13.:03:16.

strings attached. We need to cut through all of that. There are

:03:16.:03:19.

people living in homes with their parents, aged 30. I want them to

:03:19.:03:24.

have a home of their own. Let's get new houses built, let as allow

:03:24.:03:27.

people to extend their houses, so they have a better quality of life.

:03:27.:03:30.

That will help put people to work. All of these things need to be done,

:03:31.:03:33.

that is why we are taking the steps today. For a start, the

:03:33.:03:36.

Government's removing the requirement to build affordable

:03:36.:03:40.

homes in any new developments. That is an attempt to unlock 75,000

:03:41.:03:44.

homes currently stalled. The Government will also guarantee up

:03:44.:03:48.

to �50 billion worth of major infrastructure and housing projects.

:03:48.:03:52.

And, there will be a major infrastructure fast-track for

:03:52.:03:55.

politically sensitive projects. There by, projects can be approved

:03:55.:04:01.

by planning inspectors, rather than councils. For householders and

:04:01.:04:05.

businesses, some extensions will be exempt from planning permission for

:04:05.:04:13.

a limited period. And there will be a �280 million enlargement for the

:04:13.:04:20.

FirstBuy scheme, to help first time buyers with deposits. Is this the

:04:20.:04:23.

red tape/bureaucracy reducing, some say, we need to get growth.

:04:23.:04:26.

once, a really good supply side measure from the Government. It is

:04:26.:04:29.

a limited measure, it won't change the world. But on the margins, it

:04:29.:04:32.

will help the economy and also the lives of hundreds of thousands of

:04:32.:04:36.

homeowners. Such voices might take heart at the

:04:36.:04:44.

views of the new planning minister, Nick Boles. Back in 2010 he says he

:04:44.:04:48.

doesn't much like planning at all. There comes a question in life, is

:04:48.:04:53.

do you believe that planning works, that clever people, sit anything a

:04:53.:04:56.

rom, can plan how people's communities should develop, or do

:04:56.:05:00.

you believe it can't work. I believe it can't work. David

:05:00.:05:03.

Cameron believes it can't work, Nick Clegg believes it can't work,

:05:03.:05:07.

chaotic, therefore, in our vocabulary, is a good thing.

:05:07.:05:12.

Chaotic is, what our cities are, when we see how people live, where

:05:12.:05:15.

restaurants spring up, where they close down, where people move to,

:05:15.:05:18.

can you predict any of that, would you like to live in a world where

:05:18.:05:22.

you could predict any of that. I certainly wouldn't. But relaxing

:05:22.:05:25.

planning laws isn't necessarily welcome from the people who

:05:25.:05:30.

currently run them. It is ill conceived, we just spent two years

:05:30.:05:35.

going through a whole review of planning policies, and to literally,

:05:35.:05:39.

and only just publish those new national policy planning policy

:05:39.:05:46.

framework, and to literally, a couple of months afterwards, to

:05:46.:05:51.

come up with these kneejerk, poorly thought out responses, is really

:05:51.:05:54.

disappointing, and suggests the Government isn't thinking about the

:05:54.:05:57.

long-term implication of what it is saying. The Prime Minister and his

:05:57.:06:01.

deputy were visiting a new build housing estate in Hertfordshire

:06:01.:06:07.

today. As the news came through, that the OECD had downgraded its

:06:07.:06:16.

forecast for UK growth this year. From an anaemic plus 0.5 per cent,

:06:16.:06:22.

to a dismal, minus 0.7, both know a recovery in construction could be

:06:22.:06:27.

vital to get the numbers going in the opposite direction. In recent

:06:27.:06:30.

quarters, construction growth has gone from flatlining to negative

:06:30.:06:35.

territory. The importance of that growth to the wider economy, well,

:06:35.:06:38.

last quarter, construction retraction was responsible for

:06:38.:06:43.

dragging down output of the whole economy by 0.3%.

:06:43.:06:47.

Faced with this reality, Labour say the Government is merely tinkering.

:06:48.:06:53.

I do have to say, a one-year holiday from the current rules on

:06:53.:06:57.

planning for conservatory extensions for up to eight metres

:06:57.:07:00.

in a garden, which is what the Government is announcing today,

:07:00.:07:06.

does not represent an economic plan. Construction once fuelled economic

:07:06.:07:11.

and political fortunes. Although all parties say we need to move

:07:11.:07:16.

away from depend ance -- dependance on the housing market. The next

:07:16.:07:22.

election could be decided on who is judged today to have the best plan

:07:22.:07:27.

to get us closer to the good old days. Nick Boles is the new

:07:27.:07:30.

minister for planning following the reshuffle. He joins me now. First

:07:30.:07:35.

of all, a new projection for growth of 0.5%, is this planning change

:07:35.:07:40.

going to deliver growth? Remember the initiative you focused on, I

:07:40.:07:45.

can understand why, because it is a more colourful one, is one of a

:07:45.:07:49.

number of great initiatives. Which includes a huge investment through

:07:49.:07:54.

this guarantee of �40 billion on infrastructure project, and �10

:07:54.:07:58.

billion of building houses for rent, and other things, all of those,

:07:58.:08:01.

along with other things announced in the next few week, contribute to

:08:01.:08:05.

growth in the economy. What will this planning change contribute of

:08:05.:08:10.

that growth? I don't know, and you are a bit of a fool to be able to

:08:10.:08:13.

project precisely which each element is. Do you know a number of

:08:13.:08:16.

people who want to build a conservatory or extend their house,

:08:16.:08:19.

that would be a difficult thing to guess. What is clear, is it is

:08:19.:08:22.

important to make it easier for people to do t and encourage people

:08:22.:08:25.

to do it now, rather than wait for three years time when they will

:08:25.:08:29.

have to go through the planning process. You have absolutely no

:08:29.:08:34.

idea whether conservatories, extensions, baigsments, will

:08:34.:08:39.

deliver you any -- basements, will deliver you any growth whatsoever?

:08:40.:08:43.

People do have to have planning permission, and it is a painful and

:08:43.:08:47.

expensive process, if you make it less so, more people will want to

:08:47.:08:51.

do it, it is logical and human nature. Who will put on these

:08:51.:08:54.

extensions and conservatories, when houses are in negative equity,

:08:54.:08:58.

people are losing their jobs, this Government says there is more cuts

:08:58.:09:01.

coming. People are stretching themselves for their mortgage, and

:09:01.:09:05.

we know their disposable income, average disposable income has

:09:05.:09:09.

dropped by 2% over the last two years. This is a kie mere ra,

:09:09.:09:13.

people won't be able to do this in any numbers whatsoever? That is not

:09:13.:09:17.

true, for many people, fortunately because of the Government's

:09:17.:09:21.

policies to keep interest rate low, their mortgage payments are low.

:09:21.:09:24.

And long may that continue. People are very streched? Mortgage

:09:24.:09:27.

payments are very low, what they can't afford to do is to move house,

:09:27.:09:32.

they can't afford it buy a bigger house, they can't afford to pay the

:09:32.:09:36.

stamp duetyie, not least to buy a - - duty, not least, to buy a bigger

:09:36.:09:40.

house. The opportunity to extend their house, this apply to a

:09:40.:09:43.

business too, the opportunity to extend the premises, rather than

:09:43.:09:47.

the huge extra cost of changing premises, is one that might well be

:09:47.:09:51.

attractive. People don't have the stamp duty to move, but do you

:09:51.:09:54.

think they will be confident about taking out a loan? Because it adds

:09:54.:09:57.

to the value of their house. necessarily n this climate?

:09:57.:10:01.

course it does. If you extend a house and add a bedroom because

:10:01.:10:05.

your two teenage kids no longer want to share, or you have had

:10:05.:10:08.

another baby, or your mother has come to live with you. If you add a

:10:08.:10:11.

bedroom that will add to the value of the house in the long-term.

:10:11.:10:14.

want people to get into more debt? It is not about that. It will be?

:10:14.:10:18.

It is not about that. What you are doing is singling out one measure.

:10:18.:10:22.

Which has been trumpeted by this Government, absolutely? Sorry there

:10:22.:10:26.

are seven other measures being trumpeted today. You haven't talked

:10:26.:10:28.

about the measure which is going to mean that planning permissions that

:10:28.:10:32.

have been granted that haven't been fulfilled, are going to be

:10:32.:10:36.

unblocked by removing the affordable housing component from

:10:36.:10:42.

them. You haven't talked about the guarantee of �so 10 billion about

:10:43.:10:46.

new rented housing construction, which is a very significant measure.

:10:46.:10:50.

These are component parts of a big package, which you say will deliver

:10:50.:10:54.

growth. It is significant, an Englishman's house is his castle

:10:54.:10:59.

and all that, you can't say whether any of that domestic dwelling

:10:59.:11:02.

change will deliver any growth whatsoever? With the other measures

:11:02.:11:05.

it is easier to make an estimate. It is harder with planning

:11:05.:11:08.

extensions, because how many people out there want to extend their

:11:08.:11:14.

house. What I want to put into context, given Mr Miliband's rather

:11:14.:11:19.

ludicrous attack. His entire five- point growth plan is worth �20

:11:19.:11:24.

billion, we are making available �50 billion of guarantees. His

:11:24.:11:29.

plans will go on the tax and on the borrowing of the British taxpayer,

:11:29.:11:37.

our -- payer our's draw in private funds through a guarantee. Let's

:11:37.:11:43.

talk about the plans, is the green belt sack sabgt with this coalition

:11:43.:11:46.

Government? The position on the green belt is not changing as a

:11:46.:11:50.

result of anything today. What about changing in the future, will

:11:50.:11:54.

it be sacrosanct for the length of this coalition Government? There

:11:54.:11:58.

are flexablities in the regime, that many local authorities don't

:11:58.:12:00.

understand, they were brought in. So local authorities don't

:12:00.:12:03.

understand what they are doing? They are not being fully explored

:12:03.:12:05.

by local authorities. Local authorities are sometimes worried

:12:05.:12:09.

about how it is going to work. What we are trying to remind them today,

:12:09.:12:13.

is in exceptional circumstances, only that, for instance, Cambridge

:12:13.:12:16.

has used those exceptional circumstances, in exceptional

:12:16.:12:20.

circumstances, they can, slightly change the boundaries of their

:12:20.:12:25.

green belt. Will that be changed, or will you simply be pointing out

:12:25.:12:30.

where there can be rules used that he can sis, or will you be changing

:12:30.:12:35.

the -- exist, or will you change the rules to allow more

:12:35.:12:38.

flexibility? We are pointing out that flexibility exists, and help

:12:39.:12:42.

them take advantage that have. that be policy for the rest of the

:12:42.:12:44.

coalition Government. Are you actually considering changing the

:12:44.:12:48.

rules on the green belt? I was appointed yesterday, and secondly,

:12:48.:12:50.

I'm not a member of the cabinet or the Prime Minister, I don't make

:12:50.:12:54.

policy. Right now, what we are trying to do is encourage people to

:12:54.:12:57.

use the policy. You have explained it as far as you know, as you say

:12:57.:13:01.

you are a new minister, what you did have is long held views on the

:13:01.:13:05.

planning permission. We saw you in 2010, let me repeat, December 2010

:13:05.:13:10.

do you believe that planning work? The clever people in a room can

:13:10.:13:14.

plan how communities develop, I believe it can't work, David

:13:14.:13:18.

Cameron believes it can't work and Nick Clegg. Chaotic is a good thing.

:13:18.:13:24.

Do you think everybody thinks that? Let me tell you about newly-elected

:13:24.:13:29.

MPs, we are like young children, you are an attention seeker, you

:13:29.:13:34.

are desperate to get notice from someone, and I succeeded there,

:13:34.:13:39.

given it was shown on the programme. You must be incredibly attention

:13:39.:13:44.

seeking, I want to put to you that you got a new cabinet now. You were

:13:44.:13:47.

very vociferous at the beginning about the promise of Liberal

:13:47.:13:52.

Democrats. You wrote an article in the Times, saying an electoral pact

:13:52.:13:55.

is essential to make the radical changes. Do you believe an

:13:55.:13:58.

electoral pact needed with the Liberal Democrats? I think Nick

:13:58.:14:03.

Clegg ruled it out within about two minutes of me making the proposals.

:14:03.:14:06.

Do you believe in it? I thought it was a good idea, and if Nick Clegg

:14:06.:14:10.

agreed with me, I would support it now. He didn't, he's the party

:14:10.:14:12.

leader of the Liberal Democrats. David Cameron also didn't agree

:14:12.:14:20.

with it, it's not going to happen. It is a spurious question.

:14:20.:14:24.

The euro at any price, that is the motto of the European Central Bank,

:14:24.:14:28.

it seems, Mario Draghi's plan is to hoover up Spanish and Italian bonds

:14:28.:14:34.

to try to stop those countries' debts becoming uncontrollable. Mrs

:14:34.:14:38.

Merkel appears to go going along with the carbon nan za. Is there

:14:38.:14:44.

not a danger of a moral hazard which all of Europe will end up the

:14:44.:14:49.

peer. It seems the crisis in Spain which has concentrated Mr Draghi's

:14:49.:14:56.

mind. How significant was it today?

:14:56.:15:01.

is a hugely significant moment. There is a bail out fund for Europe,

:15:01.:15:06.

it has 700 billion in the kitty, but not enough to bail out Madrid.

:15:06.:15:09.

They needed something bigger, that something bigger is to print money,

:15:09.:15:17.

via the ECB, and to use it to buy up the bonds of Italy and Spain,

:15:17.:15:20.

and anybody else who gets into trouble, on an unlimited basis. The

:15:21.:15:24.

aim is that the cost of borrowing for those countries comes down, the

:15:24.:15:29.

concern about the European banking system recedes, the ECB has had to

:15:29.:15:34.

eat a lot of humble pie do this. They are going to take junk and

:15:34.:15:37.

collateral, to keep the euro system going. They will stand back and

:15:37.:15:41.

allow themselves to stand equally in the queue for repayment of debt

:15:41.:15:48.

with anybody else, unheard of. And it is all designed to try to put a

:15:48.:15:52.

lid on the euro crisis, because nothing else has, and of course the

:15:52.:15:56.

Germans have had too, to eat a lot of humble pie, to get this done.

:15:56.:16:00.

But there it is, it is a massive move, we are all waiting to see

:16:00.:16:06.

what the next move is. Will it work, do you think? There are two

:16:06.:16:09.

obstacles to making it work, they are both political. The first one

:16:09.:16:14.

is not here in Madrid, it is in Berlin. The German politicians had

:16:14.:16:18.

to really bend over backwards to convince themselves to let this

:16:18.:16:23.

happen. They haven't let the full Monty go ahead, as it were, of

:16:23.:16:28.

quanative easing, but this is big, but the German Central Bank, the

:16:28.:16:33.

Bundesbank, issued a statement condemning the move, saying it is

:16:33.:16:35.

tantermount to financing Governments by printing bank note.

:16:35.:16:40.

Here is the problem with that. This works as long as the markets

:16:40.:16:44.

believe the European political elite are going to do it. If they

:16:44.:16:49.

believe that 100%, then it is foolish to bet against it. If they

:16:49.:16:52.

don't believe it, then some people in the markets will say this could

:16:52.:16:57.

fail, and we will sell these bonds, we don't want to touch them. And

:16:57.:17:03.

Germany, having this level of an agoism, doesn't help. Of course --

:17:03.:17:07.

antagonism, of course the other problem is Spain. Do you think

:17:07.:17:12.

Spain will go for the bail out? Mariano Rajoy, the Prime Minister

:17:13.:17:18.

said today, said we haven't asked for a bail out. He said that

:17:18.:17:22.

vehemently. Part of today's deal is to slightly soften what conditions

:17:22.:17:26.

will be attached. In future, countries that use the bail out

:17:26.:17:30.

mechanism, will not go down the route of Greece and Ireland, they

:17:30.:17:34.

will be told to adhere to some conditions, here is the money, and

:17:34.:17:37.

if you don't really do it, we will take the money away. It is not

:17:38.:17:42.

quite the same as saying you don't get the money until you do the

:17:42.:17:47.

austerity. I think that despite the softness that has been signalled to

:17:47.:17:51.

Madrid here, Mariano Rajoy, the Prime Minister, he's going to fake

:17:51.:17:56.

a long of convincing to do -- take a lot of convincing to do it. This

:17:56.:17:59.

country's entire political system has been built on the last two

:17:59.:18:06.

years of not taking this bail out. And the kind of austerity being

:18:06.:18:09.

implemented already, the resistance is growing, as I have been finding

:18:10.:18:14.

out this week. There are parts of Spain, where given the choice, they

:18:14.:18:24.
:18:24.:18:24.

would like to make time go backwards. A small down in

:18:24.:18:30.

Andalucia, a horse fair. -- a small town in Andalucia, a horse fair. If

:18:30.:18:34.

antique lace and horses could solve things, it would be all right, but

:18:34.:18:39.

they can't, the regional Government is effectively bust, and needs a

:18:39.:18:43.

billion euros immediately. Unemployment here stands at 34% and

:18:43.:18:48.

rising. Even the comfortably well off, are surrounded by an

:18:48.:18:53.

atmosphere of rising protest. Last month, the agricultural Workers

:18:53.:18:57.

Union began raiding supermarkets and taking away food, without

:18:57.:19:07.

paying. The food is given to unemployed. The figurehead of this

:19:07.:19:10.

new movement, a local mayor, Juan Manuel Sanchez Gordillo, the name

:19:10.:19:17.

and the beard, instantly famous. Now, Gordillo and his comrades are

:19:17.:19:23.

on the march. Stirring up protest, from town-to-

:19:23.:19:26.

town, under the watchful eye of the police, determined to stop the

:19:26.:19:32.

austerity, everybody knows, is about to hit. For nearly a month

:19:32.:19:37.

now, the agricultural workers have been marching from town-to-town

:19:37.:19:40.

here in Andalucia, as with everything they do, there is an

:19:40.:19:44.

element of symbolism to this, but things in Spain are about to get

:19:45.:19:52.

deadly serious. As small farming towns echo with rhetoric and

:19:52.:19:57.

marching feet, it is clear that the Spanish crisis, and the way it is

:19:57.:20:02.

resolved, will define Europe. Tran Another Europe is necessary. The

:20:02.:20:04.

Europe of the people -- TRANSLATION: Another Europe is

:20:04.:20:08.

necessary, the Europe of the people. The Europe of the people who don't

:20:08.:20:11.

have anything, the unemployed, the poor, people who demand a new

:20:11.:20:15.

reality, people who don't have anything.

:20:15.:20:19.

Andalucia is spectacular, but spectacularly poor. The regional

:20:19.:20:23.

Government had tried to soften the spending cuts demanded by Madrid,

:20:23.:20:29.

but now it needs a bail out, and it will have to pile further job cuts

:20:30.:20:34.

and spending cuts on to those already made. Everybody here feels

:20:34.:20:39.

a crunch is coming. TRANSLATION: What we want to see change, what

:20:39.:20:43.

makes us march, is criticising the general sacking of workers, the

:20:43.:20:47.

fact that many people are losing their homes, and many people can't

:20:47.:20:53.

afford to buy food. That is why we are fighting and reaching out to

:20:53.:21:00.

all parts of society. TRANSLATION: People don't want to hear about

:21:00.:21:03.

premium risk bonds, bail out, Merkel or the European bank. People

:21:03.:21:07.

want to talk about the cost of a bottle of gas, the cost of petrol,

:21:07.:21:12.

medicine, mortgages, work, expectations. They want to talk

:21:12.:21:16.

about their problems, that is what we do.

:21:16.:21:20.

In Madrid, they know today's move by the ECB opens the way for

:21:20.:21:24.

Spain's debts to be bought up en massive scale, removing the

:21:24.:21:29.

constant threat of imminent default. But it's dependant on conditions,

:21:29.:21:34.

and the conditions will be set in a struggle between these two. Angela

:21:34.:21:40.

Merkel, who needs Spain to accept more austerity than the 65 billion

:21:40.:21:44.

already unleashed, to appease German voters, and Spanish PM,

:21:44.:21:48.

Mariano Rajoy, who still couldn't bring himself to ask for the bail

:21:48.:21:53.

out Brussels has just offered. TRANSLATION: The priorities of the

:21:53.:21:56.

Spanish Government right now are to create jobs. The first priority is

:21:56.:22:01.

that we have to continue on the path of cutting the deficit. The

:22:01.:22:05.

next is to continue the structural reforms, then rebuild the banking

:22:05.:22:10.

sector. And in the next few weeks, we will have more detail on changes

:22:10.:22:16.

to the banking sector. But, even if the Spanish people do accept the

:22:16.:22:22.

conditions, say pundits here, the whole process has created cracks in

:22:22.:22:25.

the political system, that look dangerous. TRANSLATION: There is a

:22:25.:22:29.

problem with the loss of credibility, by the political class

:22:29.:22:32.

in Spain. That doesn't mean that eight months into the Government

:22:32.:22:36.

Rajoy will pay the price. They have to be closer to the people, to know

:22:36.:22:42.

what's going Onyango the street. Cut spending in a more -- going on

:22:42.:22:49.

on the street. Cut spending in a different way. They have to tighten

:22:49.:22:52.

their belts. There are large numbers of people, especially among

:22:52.:22:58.

the young, who intend to prove it wrong. The Spanish Occupy movement

:22:58.:23:02.

gave a foretaste of the anger that will greet any bail out bill. It

:23:02.:23:06.

won't be only the radicals, with Spain's regions going bust, one by

:23:06.:23:10.

one, this month is set to see huge protests over budget cuts organised

:23:11.:23:15.

by nationalists. The fear is, as in Greece, that this unites the left

:23:15.:23:19.

and right, in opposition to the last-ditch rescue plan of the

:23:19.:23:22.

political centre. Technically the strikes and demonstrations of the

:23:22.:23:25.

past two years have achieved nothing. But throughout that time,

:23:25.:23:28.

the Spanish Government successive Governments, have had to insist

:23:29.:23:33.

Spain will never go to the EU for a bail out. Now they have to. For

:23:33.:23:37.

many of the people here, this is not the end, but the start of the

:23:37.:23:47.
:23:47.:23:52.

fight against austerity. Back in Andalucia, mayor Gordillo

:23:52.:23:56.

is about to find out whether rhetoric and civil disobedience can

:23:56.:24:00.

stop the Spanish Government, the bond market and the ECB. The town

:24:00.:24:07.

he runs is famous as a self- proclaimed, left-wing utopia.

:24:07.:24:12.

Farmers here fought for, and won control of the land in the 1990s.

:24:12.:24:19.

They built their own houses, there was no property boom, and no bust.

:24:19.:24:24.

The town of Marinaleda symbolised one part of the dream that many

:24:24.:24:29.

Spanish bought. The social Europe consisting with the old

:24:29.:24:33.

Conservative traditions. The Spanish press has compared Gordillo

:24:33.:24:39.

to Robin Hood, he himself prefers the Scottish rebel, William Wallace.

:24:40.:24:43.

TRANSLATION: I think he was a true revolutionary, who came from the

:24:43.:24:51.

lower class and fought and demanded a change for his people. He was

:24:51.:24:59.

defeated, though! TRANSLATION: you always have winners and losers

:24:59.:25:06.

in the struggle, the battle you never lose is the battle for utopia.

:25:06.:25:11.

In truth, it's not Gordillo and his utopia the politicians need to

:25:11.:25:14.

worry about, it is ordinary Spanish people, and their reality. The dye

:25:14.:25:19.

is now cast for a full Spanish bail out, and the conditions attached

:25:19.:25:23.

will bring drastic changes to the way people live. And their concern

:25:24.:25:27.

is obvious. TRANSLATION: Somebody had to do something, we should have

:25:27.:25:31.

more Gordillo, there should be more like him, Andalucia is a beautiful

:25:31.:25:35.

place, we can't go on this way, with more and more unemployment and

:25:35.:25:38.

hunger. This region has so much in its favour, but we are becoming

:25:39.:25:44.

increasingly poor. TRANSLATION: don't respect his ideas, but I do

:25:44.:25:51.

respect him, he's a loader, you have to respect that. And political

:25:51.:25:55.

leadership has been the problem. Spanish politicians now have to

:25:55.:25:59.

lead an austerity drive that will bite into the incomes of core

:25:59.:26:03.

voters, and in places like this, as regional budgets are slashed, into

:26:03.:26:08.

the soul of local identity. Spain's strategic problems can't be side

:26:08.:26:15.

stepped any more. With me in the studio, Gillian Tett, the assistant

:26:15.:26:20.

editor of the FT. Helena Morrissey, the CEO of Newton investment bank,

:26:20.:26:25.

Emma Duncan, the deputy editor of the Economist, and Muntaha

:26:25.:26:30.

Mashayekh Professor of economics at university of Sussex.

:26:30.:26:34.

They say they have been resisting the bail out for two years, do you

:26:34.:26:37.

think it is inevitable? It is moving that way, but politically

:26:37.:26:40.

and economically it is very difficult. The crucial thing to

:26:40.:26:43.

understand about what is happening today, Mario Draghi has bought the

:26:43.:26:46.

eurozone time, we don't know what the eurozone is going to do with

:26:46.:26:50.

that time. Will they actually put down the preconditions to create a

:26:50.:26:54.

eurozone that work, by creating some form of banking and fiscal

:26:54.:26:58.

union, some kind of growth strategy, and above all else, a system that

:26:58.:27:02.

ordinary people can actually believe in, or will it just be more

:27:02.:27:08.

fudging and failed bail outs. fudging, we hear the Bundesbank is

:27:08.:27:14.

dead set against this? This is a major problem, and can torpedo the

:27:15.:27:18.

whole thing, it is so much on market confidence. Draghi announced

:27:18.:27:23.

there was one dissenter behind the decision. Everybody assumed it was

:27:23.:27:26.

pretty clear that it was the Bundesbank President. I think we

:27:26.:27:29.

are treading on a knife edge. Today's decision, while it does

:27:29.:27:32.

suggest there has been something of a think, that is a new development

:27:33.:27:37.

about a fiscal or sharing of the fiscal burden. Obviously ultimately

:27:38.:27:42.

this means a backstop across Europe, it does come at a price. It doesn't

:27:42.:27:45.

solve the economic problems, as we have seen in Spain and other

:27:45.:27:49.

countries. How difficult do you think the Bundesbank is? I think it

:27:49.:27:52.

is a huge issue. I think what Draghi has done is really

:27:52.:27:59.

significant. I think it could be incredibly positive. He has done

:27:59.:28:04.

something quite interesting and subtle, he has given two channels

:28:04.:28:08.

for countries that want to seek bond buying. One is the rather

:28:08.:28:12.

unpleasant one, the Portuguese and Greeks have been through, where

:28:12.:28:16.

teams of people turn up and tell you how to run your country. But he

:28:16.:28:21.

has also done this much, much gent letter precautionary route, for

:28:21.:28:25.

countries like Spain and Italy, who can come along and say, we are

:28:25.:28:29.

doing pretty much what you want, can you sort us out. The idea is

:28:30.:28:34.

that should be politically much less toxic for someone like Rajoy.

:28:34.:28:39.

Look what he's facing in Andalucia, this is just the start of it?

:28:39.:28:43.

is true, as far as the ECB is concerned, Rajoy is doing exactly

:28:43.:28:53.
:28:53.:28:53.

what he ought to be doing on reform. If the ECB is undermined in

:28:53.:28:56.

confidence before this thing is started, it is difficult to see how

:28:56.:29:00.

it will work. Merkel has to get these guys under control.

:29:00.:29:05.

Interesting that Angela Merkel gave it a following wind, that clearly

:29:05.:29:08.

wasn't enough to sign the Bundesbank? The real change is it

:29:08.:29:11.

becomes a self-fulfiling prophesy, one of the reasons the Bundesbank

:29:11.:29:16.

is so scared, they think if you allow this to happen, you will be

:29:16.:29:21.

having this constant demand for these direct and indirect bail out

:29:21.:29:25.

mechanisms, by imposing these conditions in order for the

:29:25.:29:28.

outright transmission mechanism, that is what he has called it today,

:29:28.:29:33.

to work, these conditions are all about austerity, which will not

:29:33.:29:39.

allow the "Goldman Sachs pigs", Ireland, Greece, Spain to grow. So

:29:39.:29:43.

you might get into the constant mechanism of requiring the bail out.

:29:43.:29:48.

Is this more likely to hasten a Greek exit, do you think? We could

:29:48.:29:52.

see a vicious spiral situation. I think at the moment we are treading

:29:52.:29:57.

on that knife edge. And the markets rallied, everyone liked it, it was

:29:58.:30:01.

a relief, perhaps we got something further than people were expecting,

:30:01.:30:06.

but it is not over yesterday. markets rallied, if you talk to

:30:06.:30:10.

traders today, people were joking that OMT, outstanding market

:30:10.:30:15.

transactions, stands for "on my tap", basically meaning that

:30:16.:30:20.

Germany is now the lender of last resort, and the political tensions

:30:20.:30:25.

behind that are growing. Germany being the lender of last resort,

:30:25.:30:32.

aka in this majority of the ECB. German people, are they going to

:30:32.:30:35.

rise up against this, or realise how much it will affect them?

:30:35.:30:39.

Looking at the film about Spain, it would be interesting if you

:30:39.:30:43.

conducted a referendum across the eurozone and asked voters if they

:30:43.:30:47.

wanted the eurozone right now. The sense protest is rising day by day.

:30:47.:30:51.

It is too early to say whether this will make a difference? There is an

:30:51.:30:54.

interesting poll of German voters as compared to other European

:30:54.:30:58.

voters. German voters are incredibly sceptical about the

:30:58.:31:02.

ability of any of the peripheral countries to hold it together.

:31:03.:31:08.

German voter, compared to French ones. Merkel is torn, she's in this

:31:08.:31:14.

unbelievably difficult position. There is the central poll of German

:31:14.:31:17.

post-war policy, which is European unity, Franco-German alliance,

:31:17.:31:21.

holding this thing together. On the other hand, she has her voters,

:31:21.:31:27.

disappearing, losing confidence. She made that change, didn't she?

:31:27.:31:30.

Angela Merkel, from her position, to say, not even to stand back, but

:31:30.:31:34.

to actually actively say that she supported this? Absolutely. I think

:31:34.:31:40.

that was very significant, that was a dramatic shift on her part.

:31:40.:31:44.

only difficulty now is who is winning from all of this? I think

:31:44.:31:47.

the whole eurozone concept was clearly built on a house of sand,

:31:47.:31:50.

we haven't had fiscal union, we haven't had political union, we

:31:50.:31:54.

have had monetary union, it hasn't worked, we seem to be prolonging

:31:54.:31:58.

the inevitable. House of sand? haven't had the growth union. Both

:31:58.:32:02.

the German people, and commentators in this country, you always hear

:32:02.:32:07.

this story about some how that the problem in Greece and Italy was

:32:07.:32:11.

they were going fiscal and irresponsible and spending too much.

:32:11.:32:15.

If you look at the Spanish deficit before the cry he is, Italy, also

:32:15.:32:20.

had a low deficit, it wasn't spending all the places Germany has

:32:20.:32:22.

been spending. You do want conditions, but what kind of

:32:22.:32:25.

conditions. The conditions we should be asking for are that

:32:25.:32:29.

Greece actually develop the kind of institutions, for example, that

:32:29.:32:35.

Germany has, by includes institutes, eye R & D spending, patient finance.

:32:35.:32:40.

Who has managed to deal with the austerity deliver some growth?

:32:40.:32:43.

some ways one country which has managed to walk the tight rope

:32:43.:32:47.

better than many has been a country like Ireland. That is partly

:32:47.:32:51.

because they are reallyively unified, and they have a level of

:32:51.:32:54.

social cohesion, it has been very painful, and they are not out of

:32:54.:32:58.

the woods yet. It is very hard to look at positive inspiring examples

:32:58.:33:03.

at the moment. Germany is producing growth, but doing so in a poisonous

:33:03.:33:07.

political climate now. We do need more growth stimulus out of Germany,

:33:07.:33:12.

we have this huge adjustment that has to happen in Europe, which is

:33:12.:33:16.

that basically the wages of the overborrowed countries have to fall

:33:16.:33:21.

in relation to Germany's. Because that's the big imbalance, the big

:33:21.:33:24.

problem that has happened. That is not necessarily a problem here.

:33:24.:33:29.

What will deliver growth, as Nick Boles said, we talked about one

:33:29.:33:32.

area that will help to deliver growth, he said. The other big ones

:33:32.:33:37.

are the infrastructure plans and so forth. Also the pension funds are

:33:37.:33:42.

desperate to invest somewhere, they need these big infrastructure

:33:42.:33:45.

projects? You can't completely generalise, but I think it is a

:33:45.:33:49.

good idea to have. We obviously have an antiquated infrastructure,

:33:49.:33:54.

ma many parts, whether it is roads, or whether it is utilities, there

:33:54.:33:59.

is a lot that needs investment. Pension funds want long, stable

:33:59.:34:04.

cashflows. As came up earlier, we need a stable regulatory background.

:34:04.:34:09.

We won't hand the money for a 30- year project and the rules get

:34:09.:34:12.

changed by an in coming Government. There has to be careful planning on

:34:12.:34:20.

how this could work. Negative 0.5% growth? I do think that you were

:34:20.:34:24.

slightly teasing Nick Boles about his conservatories, but I'm afraid

:34:24.:34:28.

that is a really sharp illustration with the whole problem with

:34:28.:34:31.

infrastructure. You want infrastructure you have to have big

:34:31.:34:36.

stuff. You need big roads, third runways. Power stations, and all

:34:36.:34:40.

sorts of things? You need house building. You need large scale

:34:40.:34:44.

house buildings. In the 1930s, our economies jump started out of

:34:44.:34:47.

depression by massive house building. Which you still see all

:34:47.:34:53.

over the country. To do that you have to deal with story nimbyism,

:34:53.:35:00.

and deal with the green belt. back to Nick Boles, he said as of

:35:00.:35:04.

now the policy is the green belt holds with some exceptions. But

:35:04.:35:08.

didn't say if it would change? is a key issue, but the good news,

:35:09.:35:12.

if you like, in the UK and the western world in general, there is

:35:12.:35:17.

an awful lot unused capital in the system. Financial markets are not

:35:17.:35:20.

short of money. Pension funds are sitting on large pots of money,

:35:20.:35:24.

particularly in the UK. We are unusual in having a large pension

:35:24.:35:30.

industry with a lot of pension funds that need long-term assets to

:35:30.:35:35.

invest in. If only you could match up the demand for investment with

:35:35.:35:39.

projects. You say we elect politicians, we have armies of

:35:39.:35:44.

pensions and the CBI, why is nobody doing it? Here is the problem, our

:35:44.:35:47.

system is so centralised, that any local authority that gives

:35:47.:35:50.

permission for the building of a local housing he state, doesn't get

:35:50.:35:53.

any benefit of that. All the cash goes straight back into the

:35:53.:35:57.

Treasury. If we had a more decentralised fiscal system in this

:35:57.:36:01.

country, then there would be an incentive for local authorities to

:36:01.:36:06.

give permission for stuff. I would say, just to defend what's out

:36:06.:36:10.

there already, there are projects that have bonded which we buy into,

:36:10.:36:16.

and there are infrastructure fund, it is a tiny market. It is 2.5% of

:36:16.:36:20.

all the pension funds' assets. I think there is an appetite. You can

:36:20.:36:26.

get 1.5% on a ten-year gilt, it not enough for feingsers. We need a

:36:26.:36:33.

decent return, but -- pensioners. We need a decent return. The money

:36:33.:36:40.

is there, there is �1. -- over $1 trillion in the US and more than

:36:40.:36:44.

that here. This Government needs to show what they think drives

:36:44.:36:46.

business and investment, is basically getting the state out of

:36:46.:36:50.

the way. If you go to the Business Innovation and Skills department in

:36:50.:36:54.

Victoria Street, it says Great Britain is open to innovation, with

:36:54.:37:02.

the lowest tax and lowest regulation. You have to spend money

:37:02.:37:08.

for that, rather than just take away red tape. It is called Africa

:37:08.:37:14.

Express, one of the most bizarre and successful musical events of

:37:14.:37:18.

the year. 80 African musicians are travelling in a special train,

:37:18.:37:24.

stopping off for concerts and free Pop Up events, with music they

:37:24.:37:31.

create on the train. Damon Albarn is on board, with Baaba Maal and

:37:31.:37:40.

other guests, they gave exclusive access to the journey. This is a

:37:40.:37:45.

tour that breaks all the known rules of the music industry. Over

:37:45.:37:49.

80 musician, some very famous, some virtually unknown in Britain, but

:37:49.:37:53.

stars in Africa. Touring the country in a chartered train, in a

:37:53.:37:58.

venture costing �500,000. But there are no headliner, some events are

:37:58.:38:01.

planned at the very last minute and they decide who is playing what,

:38:01.:38:10.

and with whom, after non-stop rehearsals on the train itself. One

:38:10.:38:14.

carriage is laid out as a studio, complete with mixing desk, and

:38:14.:38:21.

musicians playing from the moment we left Middlesborough. In this

:38:21.:38:26.

session, guitarist Romeo Stodart from the Magic Number, and the

:38:26.:38:30.

wildly enthusiastic Damon Albarn, whose other projects this summer

:38:30.:38:35.

were an opera and a Blur reunion. He has been a key figure in all

:38:35.:38:41.

past Africa Express events, from Mali and the Congo to west Africa.

:38:41.:38:47.

This train trip is the most ambitious, high-profile event to

:38:47.:38:50.

date. It is nothing but music and communication. It isn't a person,

:38:50.:38:57.

it isn't a group of people. It is an idea.

:38:57.:39:02.

Really I think the level of musicianship is just, for me, this

:39:02.:39:08.

is the best one. I just think everyone knows what it is about now.

:39:08.:39:13.

So it attracts people who want to participate. That is amazing, it is

:39:13.:39:19.

a relief for everyone to just be musicians, nothing really sort of

:39:19.:39:24.

getting in the way of just when you want to make music on a day, just

:39:24.:39:28.

make it, whatever it is at that moment, it is very therapeutic.

:39:28.:39:38.

Just a few carriages away, there is another impromptu session. This one

:39:38.:39:44.

involving one of Africa's greatest star, Baba Mal from Senegal, who we

:39:44.:39:54.
:39:54.:40:23.

found singing with Jupiter, the In this journey, it is not just

:40:23.:40:27.

music, or classic music, it is young ones, the famous ones, the

:40:28.:40:33.

less famous one, all together. People waking up and going beyond

:40:33.:40:37.

the stages of music together, thinking and travelling together

:40:37.:40:41.

into a wonderful journey. This is unlike any music event I have ever

:40:41.:40:46.

been to, none of the artists are being paid, though they do get a

:40:46.:40:50.

small allowance, and they are not here to promote new singles, or

:40:50.:40:54.

albums or product, different musicians from Africa, Britain and

:40:54.:40:57.

different age groups are all playing together in musical

:40:57.:41:05.

combination, the aim is to create a positive image for Africa.

:41:05.:41:10.

Crazy collaborations, the jamming, you know. We go to so many

:41:10.:41:13.

festivals and you meet so many people, you hardly ever have a

:41:13.:41:19.

chance to mess around with them. This is a lot of fun for me.

:41:19.:41:22.

best-selling young English hip hop Popstars, Rizzle Kicks, were

:41:22.:41:26.

clearly having a good time. It was one of the best nights of my life,

:41:26.:41:33.

I reckon. The best night of your life? One of them. Why? It was just

:41:33.:41:41.

like, I can't explain, the amount of positivity, and musical energy

:41:42.:41:45.

and vibe that was there, it was impossible not to be happy about

:41:45.:41:49.

being part of that experience, and a side of that we got to share the

:41:49.:41:53.

stage with some musicians we respect and idolise. The train has

:41:53.:42:01.

everything from a yoga teacher. you To a meeting room and luggage

:42:01.:42:04.

wagon. Ian Birrell, journalist and former David Cameron speechwriter,

:42:04.:42:08.

was involved in raising money for the trip. Around half the cost is

:42:08.:42:16.

paid by the cullal Olympiad. need to have planning to give space

:42:16.:42:20.

-- Cultural Olympiad. You need to have planning in the chaos and give

:42:20.:42:24.

space for the hotels. I didn't know where you go to hire a train, for

:42:24.:42:29.

instance. The first Africa Express jaunt, six years ago, was to the

:42:29.:42:34.

desert state of Mali, a country famous for its ancient culture and

:42:34.:42:38.

music. Today Mali is in chaos, after a coup in the capital, with

:42:38.:42:42.

two-thirds of the country, now controlled by Islamic groups,

:42:42.:42:49.

wildly opposed to events like this. No-one wants to live under such

:42:49.:42:54.

semi-medieval ideas, it is just not acceptable. Personally, I think,

:42:54.:42:58.

they are a democracy, and they should have a say in their whole

:42:58.:43:05.

country. If they want to have it, then they all should agree to go it

:43:05.:43:09.

together. Many in the west only know about

:43:09.:43:16.

Male and its history through the work of its extraordinary musicians

:43:16.:43:21.

like Rokia Traore, yet music is now banned in part of the country.

:43:21.:43:27.

is really sad, and I don't want to but I can't do nothing against that.

:43:27.:43:33.

The only thing I can do is to keep going on working, do it the best

:43:33.:43:42.

way my work, and trying to make people think good things of Mali,

:43:42.:43:49.

and seeing good things from Mali. Many in the west were introduced to

:43:49.:43:57.

Mali music through the singing and player through the blind duo, Amado

:43:57.:44:02.

and Marion. He has become friends with Romeo Stodart, they have

:44:02.:44:08.

guitar playing, but no language in common. TRANSLATION: It works well,

:44:08.:44:12.

it is a great pleasure sharing music, the fact that we are two

:44:12.:44:17.

guitarists playing together is enriching. I would say Romeo, and

:44:18.:44:24.

he's like sava, and we are off, in Leeds we were in a room two hours

:44:24.:44:28.

just playing, and then there is a kind of, it is talking, you let

:44:28.:44:33.

someone have the chance to play, and then you know, you say, go for

:44:33.:44:40.

it, and I don't know. It is something unique. In Glasgow, many

:44:40.:44:44.

of the musicians appeared at a series of free pop-up events across

:44:44.:44:49.

the city. With Amadu and Romeo playing at very short notice to

:44:49.:44:59.
:44:59.:45:03.

schoolchildren out at Easter House. What did you think that have?

:45:03.:45:06.

was different. What do you make that have? It was quite good.

:45:06.:45:12.

was good about it? I liked the drums. Do you ever see stuff like

:45:12.:45:17.

this at Easter House? No. But we have some parties about our country

:45:17.:45:27.
:45:27.:45:27.

and we play this kind of music in some parties. The full cast

:45:27.:45:33.

appeared for a four-and-a-half hour concert at the arches under Glasgow

:45:33.:45:40.

Central Station. With dam Monday, Traore and others together for

:45:40.:45:45.

Melancholy Hill. When it comes to record sales, the music industry is

:45:45.:45:49.

in crisis, but Africa Express proves there is nothing more

:45:49.:45:54.

excited or creative than live music. There is a special finale near

:45:54.:46:03.

King's Cross station in London on Saturday.

:46:03.:46:13.
:46:13.:46:28.

That was the Africa Express. That's all from Newsnight tonight,

:46:28.:46:36.

Emily will be here tomorrow, until Emily will be here tomorrow, until

:46:36.:46:46.
:46:46.:47:05.

It's going to get warmer over the next few days. We start Friday with

:47:05.:47:10.

a lot of clouds and rain and drizzle in Scotland, Northern

:47:10.:47:13.

Ireland and North West England. Most of it petering out. The sunny

:47:13.:47:17.

skies will be further south and east across the UK. Contrasts in

:47:17.:47:19.

northern England, North West England will be cloudy and damp to

:47:19.:47:22.

the east of the Pennine, sheltered from the westerly wind. It should

:47:23.:47:27.

be a warmer day in the sunshine across the Midlands, East Anglia

:47:27.:47:31.

and the south-east. For the south west of England, after a bit of a

:47:31.:47:35.

misty start, that will lift, we will get increasing amounts of

:47:35.:47:38.

sunshine, fine and dry into the afternoon as well. Wales seeing

:47:38.:47:42.

most of the sunshine, always better in the east, because of the

:47:42.:47:45.

westerly breeze, feeling moisture and clouds towards the west coast,

:47:45.:47:49.

cloudy day for Northern Ireland. Best chance of sunshine is in

:47:49.:47:54.

Antrim and Down, the south west of Scotland stays cooler and grey, and

:47:54.:47:57.

rather damp. But for the north eastern half of Scotland we should

:47:57.:48:02.

get sunshine. Cloudy as you can see there in Belfast on Friday.

:48:02.:48:06.

Hopefully a bit more sunshine on Saturday. A bit of a struggle in

:48:06.:48:09.

Edinburgh, Manchester improving as we head into the weekend. The sunny

:48:09.:48:13.

skies will be further south, it is here we will see the highest

:48:13.:48:16.

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