07/01/2013 Newsnight


Is the governing coalition a happy marriage or a civil partnership? Anti-censorship protests in China. How did Iceland rebuild its economy? With Gavin Esler.

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Tonight, for two-and-a-half years, it has been called everything from


a marriage of convience, to a bro- mance. Today it was rebranded as a


civil, a very civil partnership. Let me put it like this, we are


married, not to each other, this is a Government, not a relationship.


With no new major policy details and a row over benefit payments,


and the Government and the opposition offer different


scorecards on the coalition. The panel will double as agony auoints


on the real state of the Conservative-Lib Dem relationship.


What Iceland can teach Britain from going from near economic collapse,


to businesses bursting back into light. Don't depend on a formal


economy, we realised it was not real, a bubble. Protests in China


over newspaper censorship, -- censorship, with the state loosen


the grip on what the Chinese people hear, read and see.


Good evening, at a time of real difficulty for his Government, some


40 years a the then Prime Minister, Harold Wilson, told the people that


he knew what was going on, he was going on and the Labour Government


was going on. Today the single Wilson eye became the plural "we"


of David Cameron and Nick Clegg telling us the coalition is going


on until 2015. To what effect? Today is one of those crunch days


with the Government pushing through plans to restrict rises in benefits


to 1%, that is lower than inflation. Unformer Lib Dem minister said she


will not be -- one former Lib Dem minister she wouldn't be able to


vote for the move. We explore the rhetoric of the coalition


Government. Today was a pretty gloomy day. Not


so much for the weather, although that didn't help, but for the whole


holidays-are-over, let-down-feeling. For some it was back to work or


school, for others, even more gloomy today, today is the day we


are told that divorce lawyers expect the most new business. No


divorce news in Downing Street, the coalition still very much together.


What better way then to cheer us all up, than a mid-term review by


the coalition. A list of achievements made since 2010, and


crucially, a list of new policy ideas for the second half of the


parliament. This was all contained in a big


chunky document, a big souvenir programme for the press conference.


It was big on symbolism and occasion, what about new policy.


Since you are very busy and haven't got time, we have been through the


entire document to extract only the new policy details. So, if you are


sitting comfortably, Mr Cameron and Mr Clegg will now read them out.


(sound of the wind whistling) This lack of anything new didn't exactly


cheer up the post-festive journalists, who then had to ask,


instead, questions about the state of the coalition's political


marriage, which, in turn, didn't exactly cheer up the PM. I hate to


spoil the party, but, let me put it like this, we are married, not to


each other. We are both happily married, this is a Government not a


relationship. It is a Government about delivering for people,


because of the mess that we were left in by the previous Government,


because of the huge challenges that we face. And what we said to people


two-and-a-half years ago, was that we would come together for a five-


year parliament. We would tackle these problems. So, to me, it is


not a marriage, it is, if you like, it is a "Ronseal deal", it does


what it says on the tin. Today's performance was not only about


demonstrating a unity of purpose within the coalition, they haven't


run out of ideas, they tell us, but it is also to set up some useful


political dividing lines between the coalition, on the one hand, and


Labour on the other. We can see one of those coming into view tomorrow,


when the Commons will vote on the up-rating of benefits.


In the Autumn Statement, the Government announced that certain


benefits, claimed by working age people, would rise by only 1% a


year for three consecutive years, rather than in line with inflation.


The benefits affected include, jobseeker's allowance, Employment


and Support Allowance, income support, including some aspects of


housing benefit, maternity allowance, Statutory Sick Pay,


paternity, and maternity and adoption pay, it covers some part


of the Working Tax Credit and Child Tax Credit. Child benefit, frozen


for three years since 2011, will also be up-rated by only 1% for two


years, until 2015-2016. Labour are voting against this. Which the


Government is absolutely delighted with. Expect to see much


Conservative campaigning suggesting Labour are on the side of claimants


and against working people. Labour, of course, aren't having any of


this. More than 60% of those affected by the changes that they


are voting on tomorrow will be working families, that is going to


be handicaping and stopping working families who want to get into work


and do the right thing. I don't think this is a Government on the


side of the strivers, people doing the right thing. I think this is a


Government on the side of a few people in the country, the richest


and most powerful. So, how many people are affected? Well the


changes in the bill will affect four million families who claim in-


work benefits, with a further three million being affected by the


changes to the 1% child benefit up- rating. Of 2.8 million workless


households, 2.5 million will see their entitlements reduced. The


Government estimate that is it will save �1.9 billion in 2015-2016.


Let's not forget this is only one important, but not the most


important part of a much bigger package of tax changes and benefit


changes, which, across the period of the console daigs, is hitting


the very richest very hard -- consolidation, which is hitting the


very richest very hard, and those at the bottom of benefits. Those on


middle earnings, they are doing least badly out of all of this.


row between Labour and the Conservatives about who supports


the strivers, and who is on the side of the skivers, is pretty


uncomfortable for Nick Clegg and the Liberal Democrats, some Lib


Dems are supposedly minded to support Labour in tomorrow's vote.


I will be very clear with you, I don't think it helps at all to try


to portray that decision as one which divides one set of people off


against another, the deserving or undeserving, poor people, people in


or out of work. However Mr Clegg went on to challenge those opposed


to the 1% cap to answer a simple question. Where would you find that


�5 billion, what would you cut? Schools, health, defence, local


Government? Social care? That's the question you have got to ask


yourself. And Mr Clegg has, perhaps, the consolation of knowing, that


for now, at least, the policy seems popular with voters. Consistently


polls show that people in lower income groups are more likely to


think that people are fiddling the system more than people in higher


income groups. So, when you look at this from a political, from a


demographic perspective, it does seem to be something that appeals


to all different groups. But, the big caveat is what does it actually


mean in practice, when people start seeing their benefit levels, their


disposable income being whittled away over the coming years, will


they still be as supportive, the answer to that has got to be


probably no. The Commons vote is, of course, not


until tomorrow, you could argue that really, today's big political


news was, not the coalition mid- term report, but a cabinet minister


resigning. Yes, Lord Strathclyde, leader of the Lords, says he now


wants to do something else, which, of course, may be his real reason,


but, nevertheless, it was still rather odd to do it on the day of


the big show of coalition unity. Schapps Shas, the Conservative


Party chairman is with us, along with the Labour Party Treasury


shadow minister. The big thing that David Cameron, the coalition


promised to do, is fix the economy. That is the big thing, and you


haven't. To that extent, the past two-and-a-half years have not been


a success? I certainly would like it to be fixed faster, and for us


not to have a position in Europe, and America and the rest of the


world where economies are in difficulty. That is the


disappointment the last two years? We would like things to have moved


faster. In reality, we have cleared a quarter of the deficit, we have a


million people working in new jobs in the private sector, and we have


got the highest employment in this country ever at 29.6 million,


including more women in work than ever before. I think there is a


series of things where we can say we are starting to heal the economy.


I agree with you saying I would like it to be faster. Faith healing


some would say. In that the many successes trotted out today, there


was no room to mention, for instance, the botched 2012 budget,


there was room to mention the fiscal targets missed, and the


double-dip recession, the possibility of a triple-dip


recession, or we might lose our credit rating? All these things


have to be taken in the backdrop of what is going on in the world. Who


could have predicted 2010 that we would still be talking about


whether or not Greece will default or not in Europe. We have the same


budget deficit as Greece as a percentage of our economy back in


2010, now that budget deficit has reduced by a quarter. That means we


do have the confidence of the markets. We are borrowing at rates


that this country has barely ever seen. You fully expect, for


instance, because we want to look ahead to 2013, you do not expect,


given that, then, to lose the triple-A rating? I don't know what


will happen in the future, I'm not trying to predict the future. What


I do know is you cannot solve this kind of problem with your economy,


a problem caused by debt, by more borrowing, more spending and more


debt. So we cannot go down that route. So far the coalition, say


what you want about it, has stopped us from going to the wall.


thing that will interest families up and down this country, is the


possibility that there will be some help on childcare, and also capping


social care cost. It was short on detail today, people will


understand that, but can you at least say this is fully costed, it


will be revenue-neutral? What you will see in the next few weeks is a


series of announcements. Today's document was called a review,


looking back at the two-and-a-half years. What we have also signalled,


in areas like child cautious people who want to go back to work,


pensions, a fairer system there, infrastructure for transport and


housing, and helping people on to the market. You have something that


is revenue-neutral? We will see announcements that will be


significant and important. can't tell us now this is fully


costed, we are not going to have to raise the money? It will be, and


you won't have to wait long, these will be announcements made in the


weeks to come. I want to move on, one other point, there is huge


things ahead this year, in terms of overall welfare reform, reallying


the beginning the question of the NHS reform. Absolutely huge


questions over reforming the structure of our bureaucracy, why


should people have any faith that you are going to be competent in


doing this, when you couldn't even introduce pasty tax? Well, look,


the big issues like reforming welfare, frankly, that we have


tackled, which have been left in generations, just in welfare system


getting ever more expensive, so welfare and pensions together take


up one pound in every three spent by this Government. We have tackled


the big reforms. You haven't done it yet? The Universal Credit is


coming in this year. I'm asking will it be competent? To answer the


question, tomorrow, for example, we will be vote to go put a 1% cap on


the rise in the welfare. Now, we need to see what the opposition is


going to do, if they don't vote for, that they need to explain why the


billions will come from, cuts from the NHS budget, perhaps. Just on


the big picture. The one thing that guarantees that the markets look at


a country and think it is going OK, is if they think it has stable


Government, we have a stable Government and it will be here for


the next couple of years? The coalition have made it clear they


will continue to 2015. What we have heard really doesn't sit with what


people out there in the real world, away from the political process,


the day-to-day political process, will understand as what is going on


in their lives. What we saw today was really David Cameron and Nick


Clegg, patting one another on the back, at the point which order wry


families are feeling their income squeezed. You have to find the


money from somewhere, to take the issue of tomorrow, tomorrow's vote


will be a big watershed for you, as a party you said it is OK for


public servants to be limited to a 1% increase in their pay, lower


than the rate of inflation, but you are now saying that it is not OK


for benefits claimants to do it. That doesn't add up, does it?


important to recognise that many of the people who actually are


receiving these benefits are receiving in-work benefits. I will


put that to Grant Schapps in a second. It is very unfortunate they


have tried to portray this as some how it is only those out of work


receiving benefits. On the specific question, why is it OK to limit


public sector workers to a 1% increase and it is not OK to do it


for people out of work? We also made it very clear we wanted to see


that limit done in a fair way, with a tougher approach to people on the


highest earnings, and more protections for those on lower


incomes. That is why I find it astonishing that we are still


hearing from the Government, that they some how believe it is fair to


give millionaires a massive tax cut, at the point in which working


families are struggling. The point is you are penalising the strivers,


a lot of people who don't get a lot of money, they look forward to some


kind of benefit to help them and their family. 60% was Ed Miliband's


figure of those who will be hurt? That is skewed by those including


Child Tax Credit, those not within the employment market. It is


challengable on that. The strivers who you think are the good people


in this country and you want to help them? Governing at the end of


the day is all about making difficult choice, working out where


the money will come from. In a world where we have not had any


increases until this year, 1% increase in the higher threshold,


in a world where the public sector workers are accepting 1% pay, and


many people in the private sector the same, you have to make some


decisions about what you will do with welfare. We have made our


decision, we have said it is 1%, at the same time, though, for people


in work, we have raised the personal threshold from �6,500, to


�9,440 this April, this has taken two million people completely out


of tax and helping 24 million people pay tax. Hard choices have


to be made, and one, which in the balance, he's suggesting, is quite


reasonable? I accept hard choices have to be made, we have to


recognise this Government has not done what they said they would do.


If they look again at what was outlined today in terms of


reviewing, they haven't met their targets in deficit reduction, they


are heading for more borrowing than they intended, at the same time


there is still a lack of fairness. It is completely unfair that those


on the highest incomes, the millionaires seem to be getting the


benefit, when ordinary working people are being hit. Is it unfair


that those who work, seeing no rise in living standards, pay more so


people out of work can get a little bit over the rate of inflation?


Many of the people hit by these changes are people who are already


in work. And I find it again astonishing that the Government


persists on penalising working families, particularly women, we


have had a whole series, a whole raft of measures, where people who


are in work have already seen cuts. Tax credits, Working Tax Credits


are really important. They are really important for family budgets,


this is hurting real people. Surely, a better way to run a tax system, a


better way to run an economy, is rather than taxing money away and


handing it back in tax credits s not to take the tax in the first


place. That is what happens when you take two million people out of


tax entirely. More people will lose because of the changes in tax


credits, particularly some of those who were in part-time work.


people you would care about here, let me give you one figure, it is a


sim one, for somebody on a minimum wage, under this Government, since


2010, their tax bill has halved. It is a significant picture it helps a


lot of people. But the problem is, that the changes that you have made


and are making to tax credits means many of those people are not any


better off. We have seen charities, we have seen third sector


organisations, respected think tanks, all coming out and saying


that these changes are hurting the lowest income families. That really


isn't fair. We will leave it there. It doesn't take a great predickive


skill to know we will come back to it -- predictive skill to know we


will come back to it. Let's have a look at what lies ahead in 2013


with our political panel, Danny Finkelstein used to work for


Conservative Central Office, now working for the Times, Baroness


Blair worked in Downing Street, and Miranda Green used to advise Paddy


Ashdown. I wonder on the theatre of today, when you watch that, the two


of them together, do you not find it a bit yucky? These set piece


events have a grim inevitability about them. So does the surrounding


chat about the Bro-mance and the relationship, it is all wearying, I


find. There is a danger in doing events like this h it is because


the public will think why not get on with governing, why spend time


communicating to us about how well you think you are doing, isn't it


up to us decide. On the other hand there is a massive danger of not


taking stock at a half time point in a political experiment, a


coalition in peacetime. There is a big danger in not doing that, and


not assessing where we are, these are our achievements and our agenda


is still this. You allow your enemies, on the right and left to


describe what is happening for you. I think they really wanted to avoid,


that and set the tone themselves, for the -- to avoid that, and set


the tone themselves. I heard one journalist complain that thanks for


coming out to talk to us, we don't get many of these! Very few people


would have watched it, it won't make a difference. It was about


trying to create 24-hours of news coverage out of the policies they


have already introduced. Otherwise you keep throwing more meat off the


wagon to create the idea of momentum F that isn't too bad a


mixed metaphor. They did this to dominate the news agenda for a


period, showing they had a Government that was successful in


so far as that makes a difference. In reality people's behaviour will


be determined by how these policies impact on their lives. You might


say, rather snidely, they do get on better than Blair and Brown?


might say that! I thought it was a missed opportunity, I could see why


it was quite a good exercise, the plan was good, which was to take


stock, which they sort of did. To present a bit of a forward plan,


which, when you look at it was very bad, it had everything from peace


in Iran to midwives, 2,000 of them. It was a pretty bizarre list. The


thing that didn't work, I thought the plan was they are doing this to


show the interest of the country and we are running it in a


business-like way. Then they got into the ghastly jokey stuff, that


is the picture that will stick with people. It is pretty irritating.


They would be really lucky if anything stayed with people. It is


all that has been shown today, that clip. On the substance, David


Cameron said it is not whether you have disagreements but how you


handle them that matters, big disagreements ahead. What do you


foresee as the really bumpy bits of the pol coalition? This whole


subject subject of welfare reform. We will have a little bump tomorrow,


because I think of some of the rhetoric that has been used about


this freeze for benefits. Do you that Sarah Teather is not alone in


the way she thinks, but she may be alone in how she votes, but there


are others? She represents a certain strand of Lib Dem opinion,


which would be happier with the fact of what Government are doing


with the cap, rather than the rhetoric that surrounds it. The


devisive rhetoric has been damaging for the coalition on this issue.


The arguments over welfare reform will continue. Europe, David


Cameron is about to, apparently, make this enormous speech, saying


he wants to redefine Britain's entire relationship with Europe. It


will be very unhappy for the Lib Dems to carry on in partnership


with somebody who wants to, I don't know what he wants to do, take us


off into the middle of the Atlantic, I don't know. What will impact on


politics is people's living standards. What makes people


uncomfortable about the benefit freeze, is not well off people


feeling even more squeezed. On the other hand, Nick Clegg was very


good on the point, where else will the money come from. Everybody is


going to lose money, and of course this point about people working,


those people are paying for this policy as well as losing, by having


a 1% increase. It is really about saving money from some people, and


those people are out of work. not strictly true, I think Miranda


is right about the rhetoric around this. It isn't that everybody is


paying for it. I understand the decision on some benefits being


raised and some not, from the Government's point of view. But,


for example, it is so clearly about trying to divide the acceptable


poor from the non-acceptable poor. Pensioners, of whatever kind of


background. It is not my way of expressing an argument. Do you


think Labour have got this right, it is tricky, if you are seen to be


getting people, who are not very well paid, to pay more, relatively,


for people who are not in work or claiming benefits? I think it is a


really difficult decision. But I think the way that they have


explained the decision tomorrow is right, actually. Talking to Grant


Schapps before the programme, he was saying Tory posters going up


tomorrow saying Labour have it completely wrong, and spelling out


why they think so, the Tories think this is a win for them? I think the


politics are with the Government. People are suspicious of people


receiving welfare benefits. They do see the fairness of public sector


wages going up the same as benefits. I never like revelling in anybody's


misfortune of any kind, so I think that they have to be careful of the


tone. Although, that is for me, other people maybe don't feel the


same way. The tone has been deliberate. This is a political


move. We have all seen them before, this is a clear political decision


to have a clear dividing line and to have a political split. That's,


it's been done well, it has been not accidental. I'm resolute about


the choice, I think you need to explain the choice, everyone has


their own way of earnings pressing an argument. -- Expressing an


argument. How can the two leaders keep a lid on the backbenchers over


the next two years. Very tricky on welfare reform and the NHS reforms,


bumps on that, that will be very difficult? I think it will be.


Absolutely. Actually, it has been surprising to everyone, I think,


how well the Lib Dems have actually hung together during the coalition


so far. I think they will continue to do so. Frankly, I don't think


there is much ofpgs for the Lib Dems, they have just got to carry


on marching through the mud, with all the in coming shrapnel. What


else can they do. The only thing they can hope for is to get credit


for providing stability at a very important moment, where otherwise


the country wouldn't have been able to borrow money at an affordable


rate. You have to hang on to that, you are doing a job in an


uncomfortable way at an uncomfortable time. Something else,


the prospect of David Miliband coming back into cabinet? I don't


know where the story is. My personal view was David was right


not to come in when Ed had won, it would have been pretty impossible.


David is a great talent, so I hope at some point he does come back.


You would like him back, even though it might give newspapers and


television programmes another thing to talk about other than a


bromance? It would be another soap opera, that is the dilemma.


Lord Strathclyde doing? It was odd to do it today. I do politically


that was very odd, why they didn't wait 24-hours. I understand the


reasons of what he said, that is what everyone thinks, that he has


decided to move into the private sector, he's in his mid-50s, and if


he doesn't do it now. It is not because he doesn't like working


with the Lib Dems in the Lords? That is not what he has told people


or what they are led to believe. Just over four years ago the tiny


island Republic of Iceland experienced the worst economic


brown yaek of any group. House prices slumped and banks folded and


the banks had to be nationalised. They let the banks died and growth


has been averaging 2%, more than the UK. The macro-economics masks


the pain being felt by many ordinary people. We have been to


learn what we can learn from their experience.


Iceland stuns in so many ways. Its geezers, glaciers and thermal


springs reward even the pickiest tourist. But beyond the beautiful


world heritage sites, Iceland is a bleak place for any humanity to


survive. Winters are cold and daylight is a precious commodity.


In summer 13 degrees is a warm day. It means Icelandic people had to


develop tenacity, resilience and propenceity for hard work, which


they have had to draw upon to survive this very man made crisis.


I wanted to know whether those characteristics that helped create


the economic bubble, might now lift the economy? The President has been


in office for 16 years, he has seen boom and bust. We have a very


strong sense of history of our culture. Mingled with that,


solidarity and history, there is also an entrepeneural sense that,


perhaps, led us astray in the years before the collapse. It has also


enabled a nation of farmers and fishermen to transform themselves


from being up to the 1960s and 1970s, among the poorest countries


in Europe, to having achieved now one of the highest standards of


living that you can find in the world, despite the difficulties


that follow the crisis. Fundamentally we are still a nation


of farmers and fishermen. But fishermen turned into fanciers


between 2001 and 2008, and the economy grew up 230%, as the banks


loaned money to everyone and anyone who wanted it, until the global


money markets froze. Destroying the Icelandic economy over a summer,


and creating the country's first- ever civil unrest. We stand


together and demand the Government do a better job. When the then


Prime Minister addressed a shocked nation in October 2008, he envoked


the help of a higher deity. really makes me feel angry and sad.


Because, you know, the country is made of people, the nation is made


of people, and it is made for people and by people. Now it seems


like banks are running societies and that is horribly wrong. Theodor


Magnusson works in IT, he also hunds reindeer for a living. He,


like -- hunts reindeer for a living. He like most people took out a


mortgage 12 years Agatha ties inflation to the principal. It


means he now owes 1.5-times the original mortgage, because of the


spikes in the economy. I have been paying 150 months of this loan, I


owe much more than I borrowed. I borrowed six million krona, I owe


9.7 million. I have been paying around five million in these 150


months. As is often the case in politics, the party which inherits


the mess, doesn't always get much credit for cleaning it up.


Iceland's ruling coalition, in power since 2009, has turned things


around. The deficit is down from 14% of GDP, to around 1% today.


Unemployment has halved, and exports are up. But this has been


achieved, in part, by almost 100 new taxes, including a tax on


sugary drinks. We have closed this dramatic gap in the budget, which


has been very important for our economy, and so I think that we


have made difficult decision, but I think some were good, some were not


less good, but overall, I think we are well on the way in becoming a


very strong economy again. What the Government and Icelanders in


general won't do is compromise on the welfare state. Education and


healthcare are free for all, and many who lost their jobs simply got


another degree to make themselves more employable. There is also no


glass ceiling in this country. Participation rates by women are


amongst the highest in the world. From the Prime Minister to the


Finance Minister and to business leaders at all levels, women are


vital to this economy. People always say that if you can see Esja


from any parliament the price is a million pounds higher. This woman


used to be the Mayor of One of Reykjavik's wealthiest suburbs, now


she runs a privately-owned care home service, her biggest customers


are local authorities. When you start a new business, and the


economy just like, overnight collapses, it is like wow, can we


really, really survive. But at the same time, I always had in mind a


sentence from one of my professor, when I was doing my MBA studies.


One I was doing my studies, he said "and then when you go out there to


run companies, keep in mind it is not like an exciting movie, it is


more like a soap opera, you do the same things over and over and over


again". With that in mind, we are doing a soap opera.


When the crisis struck in the autumn of 2008, Iceland's economy


entered an apparent death spiral, spluinging for ten straight


quarters, but by letting its currency collapse and its bloated


banks simply die, things turned around rapidly, so since 2011,


Iceland has seen seven straight quarters of growth, averaging at


around 2.5% per an number. But the macro-economic picture


hides the reality for many ordinary Icelandic people. Thousands have


had to emigrate in search of work, that has artificially kept the


unemployment rate down. For those who have stayed, many of them have


taken on second or third jobs, in order to maintain living standards.


They are still amongst the highest in the world.


The question is, how long can Iceland maintain this facade.


Neil McMahon has been living here 38 years, he's a full-time teacher,


but also translator and tour guide. He and his daughter met me in a


restaurant in the reinvigorated area Marina area. For an outsider


reading articles in the newspaper, or following a brief TV coverage of


Iceland, they might be fooled into believing that Icelanders have


managed to extricate themselves very effectively from this crisis.


However, there is still a lot of problems, people have lost their


homes, particularly perhaps the younger generation, people who had


huge mortgages and are now having to try and deal with this situation.


I work as a teacher, and after 35 years in the profession as a


secondary teacher I come out with �24,000 annually. It would be


rather difficult to make ends meet on that. Icelanders know many


countries, including Britain, are watching their economic recovery


very closely. Certainly, when this crisis broke,


Reykjavik didn't abide by the usual rules. Apart from letting the


bloated banks collapse, Iceland also imposed strict capital


controls. Even today companies and individuals need permission to take


money out of the country. So what can the UK, with its still dominant


banking sector learn from Iceland's experience? Don't defend on a


formal economy. It was not real, -- on a phoney economy. It was not


real. We understand in Iceland if we look back, we see very clearly


this was not real. This was completely a bubble. The financial


business is very necessary, don't get me wrong, but it is very, it is


very dangerous as a business, because it sucks the best, it is


not real. This business is very real, they make the bionic legs,


which the called Blade Runner, Oscar Pistorious, has made so


famous. They help many people, including soldiers who have lost


limbs in Afghanistan, to abandon their wheelchairs, and vastly


improve their quality of life. They struggled to find engineers during


the regin of the banks, because they couldn't match the salaries,


not any more. Like so many Icelandic firms, engineers work in


engineering since the crash. Of course, they are the lucky ones,


well-paid specialists rarely have their homes repossessed. But it is


a reality facing thousands of Icelanders tethered to thousands of


mortgages that never get paid off. It is an intergenerational conflict


as grandparents have to pass their debts on. What is so serious is


those who had their houses with no debts, like elderly people, they


gave the mortgage to their children or grandchildren. It is like their


eating up our homes. It is very important for us now to just take


the status on where are we, and where do we want to go, what kind


of society do we want, into the long-term future. That is the big


question we should be asking at the moment. And one part of this


question is whether we should be a member of the European Union,


whether we should be a member of the eurozone. I have answered this


question on, for me personal, and my answer is yes.


Over all, I think, that we are just typical islanders, with hopes and


dreams. You could also saying, maybe we have been a little bit


arrogant in the past. Hopefully we are evolving into a more humble


nation after what we have been through. Now, Google today admitted


that users in China were no longer being warned when their internet


searches were being censored, the news appeared a victory for the


authorities in Beijing who had frequently sabotaged Google's


attempts to warn of censorship. But 2,000kms south of the capital, the


city of Guangzhou was experiencing rare genes of public defiance


against censorship, as people rallied behind journalists of the


Southern Weekend newspaper, after it was forced to change an


editorial calling for reform, into a tribute in praise of the


Communist Party. TRANSLATION: You can speak, he can


speak, I can speak, let us discuss. Protestors want the local censor


dismissed and more political freedoms. On the Twitter-style


blogging site, one Chinese activists with 30,000 followers,


appeared to intimate her support for the protests. Ever since the


violent crackdown on protestors in Tiananmen Square in 1989, China has


bought off some political protests, through the Communist Party's


greatest achievement, increased prosperity. The new leadership


promises reforms. But retains a strong grip on what Chinese


citizens can see, read and hear in the media. The official Global


Times said in an editoria that, "in China's current social reality,


there cannot be the free media these people hope in their hearts


for". Perhaps not, so far the protests have remained very small.


But Beijing knows the great political movement of the Arab


Spring began with one tiny protest by a single fruit seller in Tunisia,


fed up with police harassment. What is certain is educated outward


looking ambitious young Chinese, are far less prepared than a


generation ago, to accept the bargain of prosperity at the


expense of freedom. We have the Editor in Chief of the


paper that tries to bring stories about the real China. What are your


thoughts on the significance of the protests, given they are quite


small? It started big, and now it is getting even bigger. When I said


big, it is because Southern Weekend is not just a newspaper, or any


provincial newspaper. It is a most reputable newspaper, nationwide


newspaper, for over a decade. It has millions and millions of loyal


readers across the country. It is a party newspaper, but it is a very


reformed-minded newspaper. It often pushes the envelope. Particularly


on this event, the Southern Weekend had the tradition which put a very


elaborate new year's letter, an editorial with a fancy rhetoric


full of hope and inspiration that every year it tried to inspire the


people to move forward to progress. At the back of that value is always


justice and freedom. This year, it is on that very important message


of the nationally respected newspaper, something went badly


wrong. In that sense, then, how big a challenge is this for the new


leadership, for Xi Jinping and the others, how difficult will it be


for them to handle? This is something we have yet to see. I


think it is a real test. First of all, since Mr Xi Jinping took his


party secretary position, and the chairman of the military


commitmenty, that he is officially head of the country, but not


President of the People's Republic of China, that won't be until the


spring. He has already given a very strong speech about China's dream.


He's trying to build some kind of consensus and public support, both


inside the country and outside, and in the general population, under a


slogan of "China's dream", and he will be the leader to lead the


country towards it. But what is exactly the Chinese dream? He gave


some kind of definition in his speech, and the Southern Weekend,


the new year's editorial, had a title, which was censored later,


had a title called "China's dream, dream of constitutional rule", that


precise message was censored by the propaganda department. That is


where the conflict starts. Do you see this as some kind of watershed


moment. I said the Arab Spring began with one fruit seller and one


protest and it got very big. Is it something like that, because the


bargain of we will make you more prosperous if you keep quiet about


human rights s that bargain changing? It is changing. There is


a small level of street protest in Guangzhou right now, but I don't


know how that will spread. An entire society, on the street


movement, requires many other conditions, and I cannot see that


in China at the moment. In terms it of a message, there is a similarity,


because the event, at this point, is no more just about one newspaper,


with its party propaganda chief, it is a nationwide, participated,


public protest, through the Internet, not anywhere else. It is


nationwide. Let me give you another very concrete example on this,


talking about China's dream, the Mr Xi Jinping's dream, when he was


giving the speech, he touched upon material, the food, the safety,


retirement, medical assurances, healthcare and those things people


care about, then he jumped from materialism to collective national


pride, which the rejufisation of Chinese society in the world. There


is something badly missing in the definition of the dream, is


individual dignity, that is exactly where the Southern Weekend news


editorial, which was later censureed, touched upon. On that


note thank you for joining us. A That's it for us from tonight. We


will have more tomorrow. Until then, Hello, we have had the cloud over


Hello, we have had the cloud over the last couple of days. More to


come on Tuesday. Much of the country with grey skies, still rain,


tomorrow it begins to move further south and east, allowing brighter


skies as part of Scotland and Northern Ireland. 3.3030am, we have


patchy rain in northern England and Clearing away through the afternoon.


Up towards Anglesey, we are looking at brighter weather to finish off


the day. Much brighter, for Northern Ireland, but it will turn


colder, temperatures at 3.3030pm, 9 degrees, a similar story for


Scotland, a dryer, brighter afternoon, but a colder feel to


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