:00:11. > :00:18.This programme coin tains scenes of repetitive flashing images.
:00:19. > :00:22.After the apology, the resignation, and now a management Petersburg --
:00:22. > :00:27.purge of sorts, account BBC work properly.
:00:27. > :00:32.The BBC pay off the previous Director-General with double what
:00:32. > :00:37.he's entitled. To REPORTER: Did you ever say I'm trying to put trust
:00:37. > :00:40.into the BBC and you are paying him �450,000? In terms of just coming
:00:40. > :00:42.into the job, I have to work on into the job, I have to work on
:00:42. > :00:45.what I can control. We talk to the BBC Creative
:00:45. > :00:50.Director, Alan Yentob. Is the Chancellor planning a new
:00:50. > :00:54.batch of cuts in the Autumn Statement? The markets might like
:00:54. > :00:57.it, but at ground level it is just not what they are crying out for.
:00:57. > :01:02.People are trying to get work, and you have to give them a bit more
:01:02. > :01:07.money, to at least let them live. Abu Qatada isn't getting sent to
:01:07. > :01:10.jail in Jordan, he's getting sent back to his home, right here.
:01:10. > :01:14.Britain's ten-year struggle to counter this militant Islamist, has
:01:14. > :01:21.suffered another setback, and it could still take years for the case
:01:21. > :01:25.to be closed. Seven barren island, two powerful
:01:25. > :01:29.nation, will old enemies really use military force to control this land.
:01:30. > :01:34.This crisis is clearly not over, in China and now in Japan as well,
:01:34. > :01:44.this crisis is bringing back to the surface old anomosities, and long
:01:44. > :01:49.
:01:49. > :01:52.Good evening. The Culture Secretary has already hinted that the
:01:52. > :01:57.outgoing Director-General of the BBC, George Entwistle, could be
:01:57. > :02:00.striped of his payout. Maria Miller confirmed the National Audit Office
:02:00. > :02:04.could review the payment, and suggested that the former Director-
:02:04. > :02:07.General should consider whether it was appropriate to accept the money.
:02:07. > :02:11.This evening, the internal MacQuarrie report into the
:02:11. > :02:15.Newsnight broadcast, that wrongly accused a Tory politician of child
:02:15. > :02:18.abuse, confirmed that basic journalistic checks were not
:02:19. > :02:23.completed, and final checks were unclear, and disciplinary
:02:23. > :02:28.procedures have begun. Have today's appointments left anything more
:02:28. > :02:32.than a shadow struck teeure at the BBC, and will it be enough to re--
:02:32. > :02:39.structure at the BBC, will it be enough to restore trust.
:02:39. > :02:43.This is the day the BBC tried 0 get a grip, and recover from one of the
:02:43. > :02:47.worst crises in its his treatment The start of disciplinary
:02:47. > :02:53.proceedings, senior executives stepping asierbgsd and the process
:02:53. > :02:58.fundamental change to restore trust in the BBC and all its programme,
:02:58. > :03:03.especially Newsnight. It is the biggest crisis for the BBC. At the
:03:03. > :03:08.heart of the BBC's troubles is the report by this programme that
:03:08. > :03:13.accused an innocent man of being a paedophile. A full on-air
:03:13. > :03:16.retraction one week later, couldn't undo what has been called "awful
:03:16. > :03:22.shoddy journalism", George Entwistle resigned less than eight
:03:22. > :03:26.weeks into his job. The man who leads the BBC Trust, and who
:03:26. > :03:30.appointed him, called it one of the saddest nights of his life. This is
:03:30. > :03:34.not a clean break, today the Trust's decision to pay him a
:03:34. > :03:37.year's salary, �450,000, generated new criticism. Diverting attention
:03:37. > :03:43.from Lord Patten's commitment, yesterday, to fundamental change in
:03:43. > :03:49.BBC management. If you are saying, does the BBC
:03:49. > :03:55.need a thorough structural, radical overhaul, absolutely it does.
:03:55. > :03:59.morning, the new acting DG, Tim Davie, arrived for work, promising
:03:59. > :04:06.a brisk start with immediate changes. Just into the job I have
:04:06. > :04:11.got full grip of the situation by clarifying exactly who is in charge,
:04:11. > :04:15.which, by the way, was a key learning curve from the report. If
:04:15. > :04:19.the public have a BBC they can trust, I have to be very clear, as
:04:19. > :04:24.Director-General, on who is running the news operation, and ensuring
:04:24. > :04:29.that journalism we put out passes muster. The first decision I have
:04:29. > :04:33.made is takingsings and on that, and put a clear line of command --
:04:33. > :04:37.taking control of that and putting a clear line of command.
:04:38. > :04:41.Helen Boaden, Head of News, and her deputy, Stephen Mitchell, will be
:04:41. > :04:46.stepping aside from normal roles, until the Pollard Review report,
:04:46. > :04:48.they can then expect to return to their positions. Because Pollard is
:04:48. > :04:53.investigating their part, if any, in the first Newsnight crisis, that
:04:53. > :04:56.is the decision not to air a report exposing Jimmy Savile, boast of
:04:56. > :05:00.those executives had already stepped aside from some of their
:05:00. > :05:03.duties. That meant neither of them was in any way involved in the more
:05:03. > :05:06.recent decision to run Newsnight's report on the North Wales children
:05:06. > :05:12.home. Another consequence of that,
:05:12. > :05:15.according to new findings from an internal BBC investigation is this,
:05:15. > :05:20.there was ambiguity around who was taking the ultimate editorial
:05:20. > :05:24.responsibility for the Newsnight report. The result of all this,
:05:24. > :05:30.turmoil among BBC management. But it also means tonight there are
:05:31. > :05:33.many BBC leaders in temporary, acting jobs, so the BBC has an
:05:33. > :05:39."acting" Director-General and Editor in Chief, below him an
:05:39. > :05:43."acting" director of news, and her new "acting" deputy. All overseeing
:05:43. > :05:48.a new "acting" editor of Newsnight. It may be a clear chain of command,
:05:48. > :05:52.after weeks of confusion, but it is still a temporary fix. We have got
:05:52. > :05:56.ago theing heads in almost every major division, an acting head of
:05:56. > :05:59.vision, the person responsible for the TV channels acting, the person
:06:00. > :06:03.responsible for radio is acting, the person responsible for news is
:06:03. > :06:07.acting, and the DG himself is acting. When you are acting, it is
:06:07. > :06:10.much more difficult to take major decisions that are going to have
:06:10. > :06:15.long-term consequences. So, some stability, people need to know who
:06:15. > :06:18.they are going to be reporting in to, who their boss is. They need to
:06:18. > :06:23.have confidence that those bosses are capable of sorting problems
:06:23. > :06:26.like this out. Today in parliament, the anger was obvious. MPs queued
:06:26. > :06:31.up to complain about BBC failings and the pay-off for George
:06:31. > :06:36.Entwistle, when he resigned. circumstances of his departure make
:06:36. > :06:42.it hard to justify the level of severence money that has been
:06:42. > :06:48.agreed. Here, here. Here. Contractual arrangements are a
:06:48. > :06:52.matter for the BBC Trust, but the Trust also has clear
:06:52. > :06:57.responsibilities to ensure value for money for the license fee payer.
:06:57. > :07:01.The BBC Trust cannot justify a pay- off of double the amount laid down
:07:01. > :07:06.in his contract. Does she, therefore, take the same view that
:07:06. > :07:13.I do, that George Entwistle should reflect on this, and only take that
:07:13. > :07:17.to which he is entitled, under his contract.
:07:17. > :07:21.The recent catalogue of senior management failings, has given
:07:21. > :07:24.opponents to attack for what is the most part a great broadcasting
:07:24. > :07:34.institution. Lord Patten justifies his decision
:07:34. > :07:44.
:07:44. > :07:48.to offer George Entwistle a year's Lord Patten makes clear the Trust
:07:48. > :07:58.needed quick agreement, and Mr Entwistle's co-operation with
:07:58. > :08:02.
:08:03. > :08:08.What a difference three months makes. The BBC's coverage of the
:08:08. > :08:12.Olympics was widely applauded, as part of a national triumph.
:08:12. > :08:16.Contrast those memories with a collapse of public trust in the BBC
:08:16. > :08:20.after Savile. One recent poll suggests more people no longer
:08:20. > :08:25.trust the BBC than do trust it. Another poll will be conducted
:08:25. > :08:29.tomorrow, results expected by the end of the week.
:08:29. > :08:33.As soon as it starts to get back on its front foot again, and offering
:08:33. > :08:37.very good programmes, I think public trust will return. As long
:08:37. > :08:40.as it is transparent in what it does and how it sorts things out,
:08:40. > :08:44.that will help support trust as well. It is more difficult these
:08:44. > :08:46.days, the BBC has so much competition, not just from print
:08:46. > :08:51.and broadcaster, but from the Internet as well. Therefore, for
:08:51. > :08:56.many people in the audience, it doesn't have the central role that
:08:56. > :09:00.it had even 10-20 years ago. Rebuilding trust and that buy-in to
:09:00. > :09:04.what the BBC represents in Britain, gets more complicated and difficult,
:09:04. > :09:09.but I'm confident it can be done. Is the BBC on a path to recovery?
:09:09. > :09:12.Maybe. But there is still huge uncertainty. As some staff face
:09:12. > :09:16.disciplinary hearings, some sit on the sidelines, others fill their
:09:16. > :09:23.jobs in acting roles. And, the hunt for the next Director-General goes
:09:23. > :09:27.Alan Yentob, the BBC's Creative Director joins me now. Listening
:09:27. > :09:31.there to what James said, do you feel that the BBC is in a better
:09:31. > :09:37.place tonight than it was 24 hours ago? I don't think we can be
:09:37. > :09:44.complacent about any of the events of the last few weeks. This has
:09:44. > :09:47.been a tumultuous few weeks. I think the consequence of the
:09:47. > :09:50.turmoil and of the last of the earlier part of this was also led
:09:50. > :09:54.to, I think, these event on Newsnight in the last few weeks.
:09:54. > :09:58.The confusion, the chain of command, the fact that some people were
:09:58. > :10:07.acting, others were having to step back, because of the investigations.
:10:07. > :10:11.So I think we have gone through a very difficult time. I do believe I
:10:11. > :10:15.thought Tim Davie, the acting Director-General, made it clear
:10:15. > :10:19.today, that we need to correct those things and rebuild trust.
:10:19. > :10:22.Nobody is saying it is an easy task. I would say one thing about the
:10:22. > :10:27.issue of trust, the BBC has been in trouble before, we have lost trust
:10:27. > :10:31.with the audience, and we have had to rebuild it and work at it.
:10:31. > :10:35.talk about what has happened today, because we have seen a report out
:10:35. > :10:39.already this evening, highlighting the mass confusion of that chain of
:10:39. > :10:43.command, and now we have another chain of command, where as you
:10:43. > :10:47.heard, just about everyone in a senior position is acting? Up to a
:10:47. > :10:51.point, that's true. But I think the confusion we have had is not what
:10:51. > :10:55.we have now. What has gone on, because of these investigations, it
:10:55. > :10:58.has meant that certain people have stepped down. I want to make it
:10:58. > :11:04.clear. They have stepped aside, they could step back again at any
:11:04. > :11:08.point? Let's be clear Helen Boaden and Stephen Mitchell, the Head of
:11:08. > :11:11.News and deputy, have stepped aside in order that the Pollard report
:11:11. > :11:16.can happen. Because of the events of the last few weeks and the fact
:11:16. > :11:19.it was difficult to know who was in charge, I think that has led to the
:11:19. > :11:22.consequences on Newsnight. And mistakes have been made, which
:11:22. > :11:27.would not normally have been made. It is entirely unacceptable. So,
:11:27. > :11:31.now, the chain of command is much clearer, Tim has made that very
:11:31. > :11:36.evident. We now need to learn the lessons, and to try to move on.
:11:36. > :11:40.That is tough, but we can do it. But is there any chance that the
:11:40. > :11:43.organisation can, this terrible phrase "get a grip", when everyone
:11:43. > :11:47.is essentially in a temporary position, unable to make an actual
:11:47. > :11:52.change to their department and when we have people that are outside
:11:52. > :11:56.possibly stepping back in as well? I do it is possible. I think it is
:11:56. > :12:01.more than possible. The people in Vision have a very good team, the
:12:01. > :12:05.people in radio have a very good team. There has been a shift. It is
:12:05. > :12:08.a responsibility of the team to work together. Now, the team have
:12:08. > :12:12.learned some of the lessons of the last few weeks, they are working
:12:12. > :12:16.together. Tim is looking at that. The Trust will have to look forward
:12:16. > :12:20.to what the next appointment will be. I don't consider that the
:12:20. > :12:26.circumstances which we are in are unmanageable. However, I do want to
:12:26. > :12:31.say, that the mistakes that have been made are bad, and we need to
:12:31. > :12:35.learn lessons from that. What do we do, for example, about the poll
:12:35. > :12:42.that James Robins was talking about, that shows for the first time, more
:12:42. > :12:48.people don't trust the BBC than do. I'm looking at my security badge,
:12:48. > :12:52.which has "trust" at the top, "the foundation of the BBC, audiences
:12:52. > :12:56.are at the heart of everything we do". If we have eroded the first
:12:56. > :13:00.two, we are in trouble? Of course we are in trouble. Look, the
:13:00. > :13:04.Director-General of the BBC, after 54 days has resigned, honourably. I
:13:04. > :13:07.would like to know, in the context of the media, how many people in
:13:07. > :13:13.other companies, which I won't name, have stepped down, when they
:13:13. > :13:16.decided that was the right thing to do. So the BBC has understood the
:13:16. > :13:20.gravity of this, and as a consequence we need to move on and
:13:20. > :13:24.try to rebuild the place. Can I say, we have had problems like this
:13:24. > :13:28.before, and we have had to rebuild that trust, that is not an easy
:13:28. > :13:32.task, but it is possible, and we intend to do it. When you talk
:13:32. > :13:37.about rebuilding trust, we have been told that investigations have
:13:37. > :13:40.been halted, for the time being, that's a weird state to be in, and
:13:40. > :13:44.clearly it feels very uncomfortable, me asking you this, from the
:13:44. > :13:48.position of a Newsnight presenter, but where does this leave
:13:49. > :13:51.investigative journalism on a programme like Newsnight? The thing
:13:51. > :13:56.is this, that investigative journalism is not the only thing
:13:56. > :13:58.that Newsnight does. Newsnight has done some very good investigative
:13:59. > :14:02.journalism. I think the first thing that has to happen is the team have
:14:02. > :14:07.to understand what went wrong, from now on wards, if they have got a
:14:07. > :14:09.show that they want to do or a story they have to tell, they have
:14:09. > :14:13.to ask themselves twice if that is right. They have to ensure they
:14:13. > :14:17.know who they are reporting to. It is perfectly obvious. What went
:14:17. > :14:23.wrong in the last, on that programme about abuse in the care
:14:23. > :14:28.home, was unacceptable. I think Newsnight, it is so unlike what
:14:28. > :14:34.this programme has done in the past. It is different from the last event.
:14:34. > :14:39.The next Director-General, whoever that is, will find themselves
:14:39. > :14:44.renegotiating the Charter, this is where, I guess, the existential
:14:44. > :14:47.question about whether the BBC still deserves that �145.50 from
:14:48. > :14:52.everyone in the country? Let me say this, we have to prove we deserve
:14:52. > :14:56.it. We have to rebuild that trust, the new Charter isn't yet there, we
:14:56. > :15:00.are not yet negotiating it. I would also like to point out, as you just
:15:00. > :15:04.said yourself, a few month ago, we had the Olympics, it was
:15:04. > :15:08.spectacularly well done. We have had the Shakespeare season, we have
:15:08. > :15:12.had investigative programme, not least Panorama investigating the
:15:12. > :15:19.same story that Newsnight didn't investigate. We have held ourselves
:15:19. > :15:23.to account in a way that other organisations don't. George had to
:15:23. > :15:27.go on with John Humphrys, just like any CEO would, and had to face him.
:15:27. > :15:31.And I think that in the end we have to trust that if the BBC makes the
:15:31. > :15:33.mistake, it will address that mistake. Was it a mistake for
:15:33. > :15:38.George Entwistle to leave with double what he was entitled to?
:15:38. > :15:41.me just say, these were circumstances in which he behaved
:15:41. > :15:44.extremely well, he had only been two months in the job, he had given
:15:44. > :15:49.up another safe job. The decision there was taken with some thought,
:15:49. > :15:52.I know, by the chairman of the BBC and the Trust, it wasn't a decision
:15:52. > :15:55.I was involved in, but I know he and his colleagues feel they did
:15:55. > :15:59.the right thing. We have seen parliament involved now, do you
:15:59. > :16:04.think, is your gut instinct telling you he will give that money back
:16:04. > :16:08.and he should? That is for George and the Trust to decide. However, I
:16:08. > :16:12.do understand in the environment we are in, that it is tough for people
:16:12. > :16:15.to see that. However, he took a very difficult decision. I don't
:16:15. > :16:18.know quite what the contractual arrangements are, I think the
:16:18. > :16:22.chairman has made clear that the alternative would have been, would
:16:22. > :16:25.be more brutal and he would have had to pay him more money. I don't
:16:25. > :16:30.want to really go there, because that's not, I don't know the
:16:30. > :16:35.details. Briefly, do you think that the BBC will look, sound very
:16:35. > :16:40.different in six months time. don't think going forwards means
:16:40. > :16:43.forgetting where we have been. This is, this period that we have been
:16:43. > :16:48.through has been a terrible period. If we learn the lesson, as we have
:16:48. > :16:52.in the past from things, I admit this is worse than many. I think we
:16:52. > :16:55.will be back on the road to recovery. There are a lot of people
:16:55. > :16:58.in this organisation who have to band together and make that happen.
:16:58. > :17:02.It is not about just saying it will just happen, it won't just happen,
:17:02. > :17:05.we have to make it happen. That, by the way, is nothing to do with
:17:05. > :17:08.structures, it has to do with people and their conviction. It has
:17:09. > :17:13.to do with their ability to speak to each other, and understand what
:17:13. > :17:16.the issues are, and where they are going. And that's a journey that we
:17:16. > :17:18.are all going to have to make together.
:17:18. > :17:22.Thank you very much, thanks for coming in.
:17:22. > :17:25.Could we be in for another �48 billion worth of spending cuts,
:17:25. > :17:29.when the Chancellor announces his Autumn Statement next month. The
:17:29. > :17:32.sums are the work of the Social Market Foundation and think-tank
:17:32. > :17:35.that thinks his deficit reduction plans are in double. A lack of
:17:35. > :17:39.growth and I here costs of borrowing, has created something of
:17:39. > :17:46.a black hole in the finances, they believe could translate into bigger,
:17:46. > :17:50.bolder and cuts in every department that isn't ring-fenced.
:17:50. > :17:54.The macro economy looks very macro indeed from all the way up here.
:17:54. > :17:57.But hurtle down, as we hurdle towards the Government's next grand
:17:58. > :18:06.economic pronouncement in a few weeks time, and reality Hoves into
:18:06. > :18:09.view. From a million anonymous streets,
:18:09. > :18:14.to London one street where the reality is played out at length. On
:18:14. > :18:17.the oneen end the very wealthy, the other end -- on one end the very
:18:17. > :18:21.wealthy and the other not very wealthy.
:18:21. > :18:25.Wages have been flatlining and the Government is trying to address the
:18:25. > :18:30.balance? I can see that, sometimes they need to look at where they are
:18:30. > :18:33.addressing the balance. What would you say? The other ideas in the mix
:18:33. > :18:36.is the rich would shoulder a bit more of the burden? That does
:18:36. > :18:40.spring to mind. The Conservatives are certainly preparing for a bang.
:18:40. > :18:43.We revealed some time ago on Newsnight that they planned to
:18:43. > :18:47.freeze working-age benefits, which would loosely affect some people
:18:47. > :18:51.living on this side of the street. But the Lib Dems believe, up the
:18:51. > :18:55.street, at the Abbey Road end, it is the other lot who should
:18:56. > :18:59.shoulder the burden. But why is the Government even on the hunt for
:19:00. > :19:06.more savings? In 2010, on takes office, the Chancellor set out two
:19:06. > :19:09.fiscal targets, one of them, the more forgotten one, was that by
:19:09. > :19:13.2015/16 fiscaly, debt as a proportion of GDP would be falling.
:19:13. > :19:18.Today a new report has come out suggesting that there is an even
:19:18. > :19:23.larger black hole than we realised. It is possibly as much as �48
:19:23. > :19:26.billion. Just how did the black hole get quite that black.
:19:26. > :19:30.The Royal Society of Arts and the Social Market Foundation study
:19:30. > :19:33.shows that �11 billion is due largely to a predicted rise in
:19:33. > :19:37.social security spending. That is because things like the number of
:19:37. > :19:41.pensioners, or an increase in rent costs, affecting housing benefit,
:19:41. > :19:46.are outside the Government's control. We know that already.
:19:46. > :19:50.A further �15 billion of spending cuts were included in the 2011 out
:19:50. > :19:55.dumb statement, because the economy had per-- Autumn Statement because
:19:55. > :20:00.the economy had performed more poor lie. The �22 billion hole
:20:00. > :20:03.identified today is partly because of borrow, and the UK economy is
:20:03. > :20:07.performing nearer its potential. Good news, except it leaves the
:20:07. > :20:12.Chancellor with a larger long-term structural deficit to plug.
:20:12. > :20:21.This Government is essentially run by a quad, four people, Nick Clegg,
:20:21. > :20:24.David Cameron, George Osborne and Danny Alexander. When Iain Duncan
:20:24. > :20:27.Smith goes to them and tells them what cuts to expect in the social
:20:27. > :20:31.welfare, we know the Conservative side of the Government believes
:20:31. > :20:35.they have to find if cuts to other departments are to remain the same
:20:35. > :20:38.level as they are now. We didn't know that in coming weeks in the
:20:38. > :20:44.Autumn Statement that set down what Conservative sources are saying to
:20:45. > :20:48.me, is a downpayment towards that �10 billion. In short, in the next
:20:48. > :20:55.few weeks we will find out what more cuts will come in and how soon.
:20:55. > :21:01.Take the benefits cut, �26 -- benefits cap �26,000, that is one
:21:01. > :21:07.of the most popular policies so far. My constituents say �26,000, that
:21:07. > :21:11.is a lot of money, we could reopen the debt cap and look more further
:21:11. > :21:16.being realistic at �20,000. It is not just welfare payments to the
:21:16. > :21:21.less well off we need to look at. We need to look at issues around
:21:21. > :21:24.the Winter Fuel Payment. I have heard examples that it is used to
:21:24. > :21:28.heat people's swimming pools. That is not there for that.
:21:28. > :21:30.I hear the Chancellor is threatening if he doesn't get his
:21:31. > :21:35.welfare cuts he will cut departments elsewhere, before the
:21:35. > :21:40.next election. It is probably bluff, but I understand Iain Duncan Smith,
:21:40. > :21:45.the Welfare Secretary, will meet Lib Dem leader, Nick Clegg, to
:21:45. > :21:50.discuss these possible cut. The Conservatives think popular support
:21:50. > :21:54.for welfare cuts could force a Liberal Democrat change of heart.
:21:54. > :21:58.The Liberal Democrats think they are cannier than that. What do they
:21:58. > :22:01.really want? Council tax is something that should be looked at.
:22:01. > :22:04.We have a situation at the moment where you have hugely expensive
:22:04. > :22:07.properties in the same banding as what people would regard as fairly
:22:07. > :22:11.modest family homes. So I think there is an opportunity to look at
:22:11. > :22:15.that as well as an opportunity to look at how we can achieve that in
:22:15. > :22:20.different situation. Elsewhere, in the negotiations, there is a desire
:22:20. > :22:24.that some of any savings made will go into something else all together.
:22:24. > :22:29.Newsnight can reveal that the Business Secretary, Vince Cable, is
:22:29. > :22:33.pushing for the reallocation of over �1 billion to his department
:22:33. > :22:36.in the Autumn Statement. My sources also suggest, that with the
:22:36. > :22:40.Chancellor he's pushing at an open- door. They want more money on
:22:40. > :22:44.science, they want more money on Aerospace, the sweet spot for those
:22:44. > :22:48.across Government, they want to reallocate funds from they believe
:22:48. > :22:52.to be unproductive areas of spending, like benefits, towards
:22:52. > :22:56.productive areas. The trouble is, even if they g can get agreement,
:22:56. > :22:59.for many, it won't go far enough the short-term we would be much
:22:59. > :23:03.better off if we were borrowing more and spending more,
:23:03. > :23:05.particularly on infrastructure and investment. We can borrow for
:23:06. > :23:08.essentially nothing, interest rates are at historically low level, the
:23:08. > :23:12.Government could afford to borrow and spend more, good for the
:23:12. > :23:18.economy in the short-term. Over the medium-to-long-term, the Government
:23:18. > :23:23.is right, we need to balance the book. There is a medium to long-
:23:23. > :23:26.term question of how do we get borrowing at levels we are happy
:23:26. > :23:29.with. They are aiming to balance wealth and welfare, can they get
:23:29. > :23:33.the mix right for the wealth of the nation.
:23:33. > :23:37.Joining me in the studio, Margot James, the Conservative MP for
:23:37. > :23:42.Stourbridge, and the former Treasury spokesman, Lib Dem peer,
:23:43. > :23:46.Lord Oakshott, welcome you both. Do you accept that the Government
:23:46. > :23:50.will have to find more spending cuts, or more taxes to raise?
:23:50. > :23:54.think the important thing is that we have reduced the deficit now by
:23:54. > :23:58.25%, and the economy is starting to grow again. So I think we have got
:23:58. > :24:02.the fundamentals right. That wasn't the question I asked, do you accept
:24:02. > :24:06.there will be more spending cuts? You are referring to the rorl that
:24:06. > :24:10.Allegra Stratton has just reported on. -- report that Allegra Stratton
:24:10. > :24:13.has just reported on. Chalt has already said the time which --
:24:13. > :24:17.Chancellor has already said the time we will address the deficit is
:24:17. > :24:22.longer than originally planned. Yes, I think there may well have to be
:24:23. > :24:27.further cuts in spending. Where would you want those to be? I think
:24:27. > :24:32.one of the areas under consideration may well be the rise
:24:32. > :24:36.in people's benefits. This year there was a very generous rise in
:24:37. > :24:41.benefits by over 5%. Many of us felt with inflation down to just
:24:41. > :24:45.over 2% that was perhaps too high, and I can see, you know, a freeze
:24:45. > :24:49.on benefit increase. That is pure speculation at this stage. Would
:24:49. > :24:54.you buy that? Would you first acknowledge that we will see these
:24:54. > :24:58.spending cuts? No. Go on? Simple answer. The last thing we need, we
:24:58. > :25:01.don't know whether the economy is growing, it has one good zig after
:25:01. > :25:07.three bad zags. The Governor of the Bank of England says it is
:25:07. > :25:10.basically flat. The last thing we need is get stuck on a down
:25:10. > :25:13.escalator, and no growth, and slower growth. That is economic
:25:13. > :25:16.disSASer t we are not going along with it, they are not my words,
:25:16. > :25:19.they are Vince Cable in the party conference speech. It is
:25:19. > :25:23.economically mad to have further cuts now when the economy is flat
:25:24. > :25:29.on the floor. We need to stimulate it, getting the banks lending and
:25:29. > :25:32.builders building. This suggests you, Vince Cable, do not accept
:25:33. > :25:36.that Osborne's fiscal golden rules that debt should be falling by the
:25:36. > :25:40.end of this parliament is immutable? That is different. The
:25:40. > :25:44.debt is the balance sheet, the deficit is what we are worrying
:25:44. > :25:47.about immediately now. Frankly, we are not. That is a golden rule
:25:47. > :25:50.isn't it? We are not going to get there. If the economy doesn't grow,
:25:50. > :25:54.and there is no growth. It depends whichever country we are in, the
:25:55. > :26:01.IMF, everyone seeing that, we had to take urgent action to get on top
:26:01. > :26:07.of the deficit to start W frankly, now, the policy is not work --
:26:07. > :26:11.start with. Frankly now the policy is not working. I disagree that the
:26:11. > :26:14.policy is not working. A million new private sector jobs have been
:26:14. > :26:22.created in the last two years. There is no growth, there was a
:26:22. > :26:29.tiny. There is not much growth in Stourbridge, but maybe London.
:26:29. > :26:34.have growth in Stourbridge, every visit I -- to business I go to they
:26:34. > :26:40.are having growth. Construction? With the one exception of
:26:40. > :26:45.construction? That is getting the economy in depression on its own.
:26:45. > :26:50.Let's talk about some of the issues, looking forward to the Autumn
:26:50. > :26:53.Statement are you happy to see a relook at council tax bands? I hope
:26:53. > :26:57.very much, I moved the amendment in our conference that we should go
:26:57. > :26:59.for the mansion tax. He has ruled that out? If you look at the
:26:59. > :27:03.financial tax today, leading Conservatives are saying we need
:27:03. > :27:08.much more fairness on. That we need to move the balancing of taxation
:27:08. > :27:12.from income to wealth. And how can it be right that on a �200 million
:27:12. > :27:17.in London you pay the same property tax as you do on a modest semi-.
:27:17. > :27:21.That can't be fair. Is the mansion tax back on the table now? I hope
:27:21. > :27:25.not, tax should be fair and affordable. I think this Government
:27:25. > :27:34.has put in place some measures to tax the wealthier far more than
:27:34. > :27:39.they were under the last Government. The increase in stamp duty and the
:27:39. > :27:42.freeze on allowances against tax avoidance. That doesn't catch the
:27:42. > :27:45.non-Dom, they hide their houses behind a brass plate. The rich
:27:45. > :27:49.people in central London, stamp duty doesn't catch them, the
:27:50. > :27:54.mansion tax is the only tax they can't dodge. If it turned into a
:27:54. > :27:58.council tax band enlargement, or rise, it is an ugly phrase, would
:27:58. > :28:02.that satisfy the Liberal Democrats? We don't expect to get exactly our
:28:02. > :28:07.specific policy S if we were going to get something, whereby the
:28:07. > :28:10.people in the �5 million, �10 million, and �20 million. In most
:28:10. > :28:13.constituencies there aren't any of those. If they are paying their
:28:13. > :28:18.fair share, I would be surprised if Margot James didn't support t
:28:18. > :28:22.Conservative voters support it, overwhelmingly, why don't you?
:28:22. > :28:28.don't think a tax on homes people have worked hard to pay for is
:28:28. > :28:32.necessary at this stage. I don't think a simple council tax
:28:32. > :28:36.reevaluation will trap non-Doms in �200 million homes, that wouldn't
:28:36. > :28:46.work at all, that was the example you gave. What we are trying to do
:28:46. > :28:57.
:28:57. > :29:00.is not increase the tax burden that people are suffering at the moment.
:29:00. > :29:05.Eight million are out of tax at the moment already. Come back nearer
:29:05. > :29:09.the time and discuss it then. What were the sanctions be if we just
:29:09. > :29:12.put Abu Qatada on a plane and sent him home to Jordan. The question
:29:12. > :29:15.was asked of the Home Secretary in the Commons, after the terror
:29:15. > :29:18.suspect won his latest battle against deportation. Tomorrow
:29:18. > :29:21.morning Abu Qatada will still be under 16-hour curfew, but
:29:21. > :29:26.technically, he will be free to stay in this country. The Home
:29:26. > :29:30.Secretary, as she has pretty much admitted, powerless to do anything
:29:30. > :29:34.concrete without breaking the law. Given all parties and the country
:29:34. > :29:38.seem united and impotent in seeing the suspect to go. Is it time to
:29:38. > :29:42.put the law on to one side. How did this happen? It was a
:29:42. > :29:46.decision by a British court, a special immigration appeals court,
:29:46. > :29:51.three judge. Essentially, on the question of would he get a grossly
:29:51. > :29:54.unfair trial if send sent back to Jordan. This goes to article -- if
:29:54. > :29:59.he got sent back to Jordan. This goes to article six of the
:29:59. > :30:03.Convention on Human rights. The Government thought he they had done
:30:03. > :30:07.enough to convince that he would get a fair trial. That is what the
:30:07. > :30:12.Home Secretary said, she felt she had convinced them of, large low,
:30:12. > :30:15.when she was speaking in the Commons. The court said that the
:30:15. > :30:18.Jordanian judiciary, like their executive counterparts, are
:30:18. > :30:28.determined to ensure that the appellant will receive and be seen
:30:28. > :30:28.
:30:28. > :30:33.to receive a fair retrial. SIAC also said, if the only question we
:30:33. > :30:39.had to answer was whether or not the appellant would be subject to
:30:39. > :30:43.an unfair trial in Jordan, our unquestioning answer would be he
:30:43. > :30:46.would not. Then to the but. Two expert witnesses talking about the
:30:46. > :30:49.Jordanian system of justice, would he get justice, one for the
:30:49. > :30:54.Government, one for Abu Qatada's side of the argument. The court
:30:54. > :30:58.tended towards Abu Qatada's person. His expert witness who essentially
:30:58. > :31:02.argued that information from torture might still, despite the
:31:02. > :31:12.guarantees, be introduced into the trial, and he might still be
:31:12. > :31:15.subject to some abitary form of detention. We are 11 years on, this
:31:15. > :31:18.is bit embarrassing for the Government? They had gone to all
:31:18. > :31:21.the trouble to negotiate safe agreements with the Jordanians and
:31:21. > :31:24.changed their constitution last year in an attempt to ease
:31:24. > :31:29.situations like this one, the Jordanian Justice Minister, tonight,
:31:29. > :31:31.speaking of his disappointment with the British court's decision. It is
:31:31. > :31:35.politically embarrassing, the European Court, it is not part of
:31:35. > :31:37.the EU, but it is a European institution. And the European
:31:37. > :31:42.Convention on Human Rights is very much resented by many backbenchers
:31:42. > :31:48.in the Tory Party, making it a very politically difficult issue for the
:31:48. > :31:51.Home Secretary. From here, the lawyers are happy, presumably?
:31:51. > :31:54.continues as a Dickensian saga, it would seem. The Government
:31:54. > :31:58.immediately said it would appeal the decision to the Appeal Court in
:31:59. > :32:01.the UK. If the issue is still deadlocked, it could go to the
:32:01. > :32:06.Supreme Court. That could easily take a year. The thing could then
:32:06. > :32:10.go beyond that, as we discovered today, talking to a leading human
:32:10. > :32:15.rights QC. I think we have another year's worth of UK let gaigs at
:32:16. > :32:20.least. If Abu Qatada is the -- litigation at Lee. If Abu Qatada is
:32:20. > :32:23.the loser at the domestic phase, he can go back to the European Court
:32:23. > :32:29.and say the English courts have misunderstood the evidence, and the
:32:29. > :32:33.European Court will look at it in 2015, or whatever it is, there is a
:32:33. > :32:40.possibility we are in for several years more of litigation.
:32:40. > :32:44.Several years more of litigation, Shami Chakrabarti and Peter Bone
:32:44. > :32:49.join me now. You up for seven more years of this? That is unacceptable.
:32:49. > :32:52.He should be on the plane tonight, going home, we will worry about the
:32:52. > :32:56.consequences afterwards. I'm absolutely sure that 95% of British
:32:56. > :32:59.people would support that. Most people in this country would
:32:59. > :33:03.probably agree with that? Qatada has followed me around for
:33:03. > :33:09.longer than he has followed Mr Bone's around, possibly even you.
:33:09. > :33:13.But here is the thing, you don't get to pick and choose which courts
:33:13. > :33:17.you obey. Whether you are a kid. You do, actually. This was a
:33:17. > :33:20.domestic court? This is a British court. You are a kid on a council
:33:20. > :33:23.estate, and you are told the magistrate tell you, this is your
:33:23. > :33:26.ASBO, and it is unfair, and you don't like it, and you desagree
:33:26. > :33:29.with it, and you are the Government, the Prime Minister, the Home
:33:29. > :33:34.Secretary, and you disagree with the court, you don't get to pick
:33:34. > :33:37.and choose, that is the rule of law. We tell people, you don't riot, you
:33:37. > :33:42.don't disobey the law or the courts, you tell people that, if you are
:33:42. > :33:46.the Government you have to lead by example. You are a legislator, what
:33:46. > :33:49.message does that send out? That is wrong, the Supreme Court of this
:33:49. > :33:52.country has said Abu Qatada can be deported, that should have been
:33:52. > :33:57.good enough for. It is the fact that the European Court has
:33:57. > :33:59.interfered. That is where you do come and pick and choose. Say our
:33:59. > :34:03.Supreme Court should be the ultimate judge, not this fancy
:34:03. > :34:07.court in Europe. That's the difference. It is legal, completely
:34:07. > :34:12.legal to send him home. Today's judgment is not from a fancy court
:34:12. > :34:18.in Europe. What about Italy, Italy deported a man to Tunisia, it has
:34:18. > :34:22.been fined �12,000, we don't call Italy a lawless country? Listen, it
:34:22. > :34:25.is not about Italy or Russia or Jordan. There are all sort of
:34:25. > :34:31.countries that have all sorts of different standards about human
:34:31. > :34:35.rights, and about the law. Today a British court set up by a British
:34:35. > :34:39.parliament, the Special Immigration Appeals Commission is a court, a
:34:39. > :34:43.special secret court, that the Government gets to put people
:34:43. > :34:48.secret intelligence to, and it said he can't be deported. I don't know
:34:48. > :34:51.that's what it decided, does the Prime Minister say, two fingers to
:34:51. > :34:55.you. Doucet follow the rule of law? Our Supreme Court said he could be
:34:55. > :34:59.deported. No it didn't. Yes it did. You are fundamentally wrong on that.
:34:59. > :35:03.What has happened is since then the European Court raised the bar. I
:35:03. > :35:06.did agree to the Home Secretary today, she laid this at the door of
:35:06. > :35:12.the European Court of human right. What we should be doing is
:35:12. > :35:17.accepting our law as the supreme law and ignore all the rest of it.
:35:17. > :35:21.She is not going to put him on a plane? She's entitled to appeal.
:35:21. > :35:24.Think she will, I think the British people will make her put him on the
:35:24. > :35:27.plane. It is absurd we have years and years of more legal argument.
:35:27. > :35:30.The Home Secretary and I do not agree about many things, she today
:35:30. > :35:34.said she will appeal. That is the decent, honourable thing to do.
:35:34. > :35:39.will go on for years, put him on the plane now, send him home, worry
:35:39. > :35:43.about it afterward. You think Theresa May will put him on the
:35:43. > :35:46.plane and worry about the consequences, that is what you thu
:35:46. > :35:52.she should do? I think she should, and she will be a national hero if
:35:52. > :35:59.she does it. She tell people who riot and she tells kids on council
:35:59. > :36:02.estates, stop it! Abu Qatada is he allowed to remain here
:36:02. > :36:06.indefinitely? To be honest she has picked this problem, she has
:36:06. > :36:10.inherited this problem, this has gone on for years, he should have
:36:10. > :36:14.been charged with offences years ago.
:36:14. > :36:18.Thank you very much. This is a row about eight uninhabited islands
:36:18. > :36:22.with a total area of sevenkms squared. It is not what they are
:36:22. > :36:29.but where they are, lodged in the China sea between Japan and China,
:36:29. > :36:33.two hours with a history of empty, and a resurgence, many would say,
:36:33. > :36:37.of nationalism. The Shins or Diaoyu islands matter because they are for
:36:37. > :36:43.rich fishing and may contain oi deposit. In the first of a series
:36:43. > :36:47.of films about the new China, eing from the 18th Congress being held
:36:47. > :36:55.in Beijing. We have been to the islands to assess rising tensions
:36:55. > :37:00.between China and Japan. Just after dawn we get our first
:37:00. > :37:07.view of the islands. A jagged huddle of rock, sticking
:37:07. > :37:12.up from the deep blue waters of the China Sea. It has taken ten hours
:37:13. > :37:18.sailing to get here from China's closest inhabited islands. As we
:37:19. > :37:24.approach the Japanese coastguard speeds alongside, making sure we
:37:24. > :37:28.don't get any closer. For decades these islands were long forgotten.
:37:28. > :37:35.The last settlers left during World War II.
:37:35. > :37:40.But now, a newly emboldened China has decided to assert its
:37:40. > :37:44.historical claim. As if on cue, the Chinese make their entrance. The
:37:44. > :37:46.skipper aboard our boat has just been told by the Japanese
:37:46. > :37:50.coastguard, which is coming alongside here, we have to move
:37:50. > :37:52.around to the north of the island, because they say there are Chinese
:37:52. > :37:58.ships off to the south here, they are worried they will come and
:37:58. > :38:03.board us. Things now start to get very busy.
:38:03. > :38:08.Four Chinese ships are clearly visible, well inside Japan's
:38:08. > :38:14.territorial water. Overhead a Japanese air force plane
:38:14. > :38:19.swoops low. But the Chinese ships steam on, undeterred. Until last
:38:19. > :38:24.month, it was inconceivable that Japan and China could come to blows
:38:24. > :38:28.over this uninhabited, remote group of islands. Look at the situation
:38:28. > :38:30.today, there are four Chinese coastguard cutters, and two
:38:30. > :38:34.Japanese coastguard cutters within my sight. There is a tense stand-
:38:34. > :38:37.off going on, the Japanese coastguard is very nervous about us
:38:37. > :38:40.being here, they are clearly worried this could turn into some
:38:40. > :38:45.sort of international incident. This crisis is clearly not over. In
:38:45. > :38:52.China, and now in Japan as well, this crisis is bringing back to the
:38:53. > :38:58.surface old anomosities, and long dormant nationalism.
:38:58. > :39:02.In September, the island dispute burst on to the streets of China's
:39:02. > :39:07.cities. Protests turned into riots against anything Japanese. Cars
:39:07. > :39:11.were smashed, Japanese-owned businesses burned. In Tokyo, the
:39:11. > :39:21.man who will probably be Japan's next Prime Minister, doesn't hide
:39:21. > :39:24.his anger when decribing to me what he thinks happened.
:39:24. > :39:29.TRANSLATION: The Chinese Government does not live up to international
:39:29. > :39:34.standards or rules, it deliberately allows attacks on Japanese
:39:34. > :39:42.companies, and organises boycotts of Japanese goods. We have not
:39:42. > :39:47.retaliated but we won't yield to the Chinese pressure.
:39:47. > :39:51.Since World War II, jat pan has been committed to a -- Japan has
:39:51. > :39:55.been committed to a pacifist constitution. But that is changing,
:39:55. > :40:00.these students belong to nationalist group called Students
:40:00. > :40:05.for the Future. They think it is time for Japan to rearm, and they
:40:05. > :40:13.point to China as the reason. Do you think Japanese people fear the
:40:13. > :40:16.rise of China? TRANSLATION: Because of what is happening with the
:40:16. > :40:23.island, people are starting to realise there is a problem with
:40:23. > :40:28.China, that it is a threat to us. On Sunday afternoon, in Tokyo's
:40:28. > :40:33.main shopping district, Students for the Future is out recruiting.
:40:33. > :40:37.Until recently, nationalism was a dirty word here, confined to a tiny
:40:37. > :40:41.minority of hard right extremists. But listen to what these kids have
:40:41. > :40:45.to say. TRANSLATION: If something happened
:40:45. > :40:50.with China, we need to be able to use our own military force to
:40:50. > :40:56.protect our islands. This young woman likens what is
:40:56. > :41:00.going on here to Britain's conflict in the Falklands.
:41:00. > :41:04.TRANSLATION: Japanese needs to see the islands like Margaret Thatcher
:41:04. > :41:13.did with the Falkland, Japanese need to have determination like she
:41:13. > :41:20.did to protect the Falklands. Would Japan really be prepared to
:41:20. > :41:25.go to war over a few rocks? These people would. These are hard right
:41:25. > :41:29.nationalists, who want to scrap Japan's pacifist constitution. This
:41:29. > :41:35.is their spiritual leader, Shantaro Ishihara, the controversial
:41:35. > :41:43.Governor of Tokyo. He sometimes is described as the
:41:43. > :41:48.Jeanne Marie Le Penn of Japan. This is the man who ignited the dispute
:41:48. > :41:53.with China when he tried to buy the islands. The Governor of Tokyo has
:41:53. > :41:58.set the cat amongst the pigeons, by stepping down as governor and
:41:58. > :42:04.starting a new party, to force Japan to get much tougher with
:42:04. > :42:11.China. How should Japan respond to China's actions? TRANSLATION:
:42:11. > :42:18.must be ready to draw its sword. Then he returns to make sure I have
:42:18. > :42:20.understood. Do you know the meaning of that
:42:20. > :42:26.(speaks Japanese) very important that.
:42:26. > :42:30.Anybody who thinks Japan doesn't have a sword, should look at this.
:42:30. > :42:37.Officially Japan doesn't have a Navy. In reality, it is one of the
:42:37. > :42:44.most modern and powerful in the world. It's open day on the
:42:44. > :42:48.flagship of Japan's "not" Navy. The Huger is a 19,000 tonne helicopter
:42:48. > :42:53.carrier. Hundreds of ordinary Japanese are claiming aboard,
:42:53. > :42:57.fascinated to see this sleek new ship.
:42:57. > :43:01.Officially this is called a helicopter destroyier, but as the
:43:01. > :43:05.saying goes, if it looks like a duck, and it quacks like a duck, it
:43:05. > :43:10.probably is a duck. This is essentially a small aircraft
:43:10. > :43:12.carrier, the first to be built in Japan since the end of the Second
:43:12. > :43:16.World War, this is just the beginning. Two more of these ship,
:43:16. > :43:21.twice as big as this one, are currently under construction just
:43:21. > :43:31.down the coast here. The question is, why has Japan decided it needs
:43:31. > :43:38.to build aircraft carriers. Today it is getting more and more
:43:38. > :43:44.nervous. The Chinese, they are very, more active day by day, and then
:43:44. > :43:48.Japanese Government is not responding well enough yet.
:43:49. > :43:53.TRANSLATION: To see we have ships like this makes me feel more safe.
:43:53. > :43:58.If we didn't have the ships like this, our territory could easily be
:43:58. > :44:08.taken away from us. There is now an undeclared arms
:44:08. > :44:20.
:44:20. > :44:24.race going on in East Asia, driven Japan's opposition leader believes
:44:24. > :44:31.China's military spending is being driven by clear territorial
:44:31. > :44:36.ambitions. In order to secure oil and gas reserve the Chinese is
:44:36. > :44:40.building up its Navy. Its military spending has increased by more than
:44:40. > :44:49.10% every year for 20 years. It is aggressively trying to take over
:44:49. > :44:53.the South China Sea, and now the east China sea. Including our
:44:53. > :44:56.Shenkaku islands. The Chinese are trying to draw them into the a game
:44:56. > :45:01.of chicken. Like any game of chicken. What is
:45:01. > :45:07.going on out here is very dangerous. Since we left the island, Chinese
:45:07. > :45:12.ships have been reported inside Japanese waters every single day.
:45:12. > :45:17.The Japanese Government is so far resisting the urge to act. But with
:45:17. > :45:22.a game of chicken, if both side refuse to back down, there is
:45:22. > :45:28.usually only one, possible outcome. We will be in China late this week,
:45:28. > :45:29.where Paul Mason has gone to cover the once-in-a-decade handover of