23/04/2013

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:00:12. > :00:18.$:/STARTFEED. This piece of rubbish was sold as a bomb detector to

:00:18. > :00:22.Governments in some of the most violent countries in the world.

:00:22. > :00:27.Newsnight exposed the conman behind this scam, today he was found

:00:27. > :00:32.guilty at the Old Bailey. He said it does exactly what it is designed

:00:32. > :00:38.to. I said what's that? I was expecting him to say it detects

:00:38. > :00:44.explosives, ivory, gold, he never said that, he said it makes money.

:00:44. > :00:48.If Scotland goes it alone will the Chancellor refuse to accept the

:00:48. > :00:51.Scottish tenner? Why independence might kick it out the pound.

:00:51. > :00:56.We go in search of perfect childcare as the Children's

:00:56. > :01:01.Minister faces her critics on the hot issue at the moment. Welcome to

:01:01. > :01:11.Newsnight all about the difference between England and France,

:01:11. > :01:14.

:01:14. > :01:20.reception year and nursery. Going to enjoy this show, da-da-da-da!

:01:20. > :01:24.Good evening, it started life as a novelty golf ball finder and it

:01:24. > :01:27.helped end the lives of hundreds. A businessman took this gadget, a

:01:27. > :01:30.mere aerial on a hinge and convinced Governments in some of

:01:30. > :01:35.the most volatile countries in the world that it was a bomb detector.

:01:35. > :01:40.Newsnight first revealed the scam in 2010, tonight we can reveal how

:01:40. > :01:45.he bribed senior figures in Iraq to win an $85 million contract. This

:01:45. > :01:50.afternoon he was found guilty of fraud by the Old Bailey. Caroline

:01:50. > :01:55.Horley, who broke the original story, reports.

:01:55. > :02:00.If you believe the sales pitch this called bomb detector could detect

:02:00. > :02:08.explosives more than half a mile away. All powered by no more than

:02:08. > :02:13.the user's static electricity. REPORTER: How many people's lives

:02:13. > :02:17.were taken in Iraq. Today Jim McCormick was convicted of fraud at

:02:17. > :02:21.the Old Bailey. His scam began with this, a novelty golf ball finder n

:02:21. > :02:25.reality just an aerial on a hinge that couldn't find anything. Jim

:02:25. > :02:31.McCormick bought hundreds of them from the US for $20 each, he put

:02:31. > :02:36.his own label on them and sold them as bomb detectors for as much as

:02:36. > :02:42.$5,000 a time. He then created a more advanced-looking version,

:02:42. > :02:47.which he called the ADE 651, this time it came with special cards,

:02:47. > :02:53.supposedly programmed to detect everything from explosives to ivory,

:02:53. > :03:01.human beings or even $100 bill its. He sold this -- bills. He sold this

:03:01. > :03:05.version for as much as $55,000 each. Iraq alone spent $85 million buying

:03:05. > :03:09.thousands of them for use at checkpoints from Baghdad to Basra,

:03:09. > :03:12.as protection from suicide bombs. We have been told that bribes to

:03:12. > :03:20.senior Iraqi officials helped Jim McCormick sweeten the deal for the

:03:20. > :03:25.bogus devices. This was just one of a series of ploifgss to rock

:03:26. > :03:31.Baghdad in -- explosions to rock bad dad in late 2009. At the height

:03:31. > :03:39.of the bombings there were call force the devices to be withdrawn.

:03:39. > :03:44.Mr Jim here. Jim McCormick came to Iraq, and with the head of the

:03:44. > :03:49.Baghdad bomb squad, organised a press conference to persuade Iraqis

:03:49. > :03:52.that it worked. We have discovered that the general had been bribed by

:03:52. > :03:57.Jim McCormick. He has now been jailed for corruption, thanks to

:03:57. > :04:01.the work of this man. He's the Inspector General of the Interior

:04:01. > :04:07.Ministry, Aqil al-Turehi. He says his investigation is backed by the

:04:07. > :04:12.Prime Minister, but that other, high-ranking officials are

:04:12. > :04:16.implicated in the conspiracy. TRANSLATION: I feel furious as a

:04:16. > :04:20.citizen of Iraq when I think that this gang of Jim McCormick and the

:04:20. > :04:25.Iraqis working with him killed my people in cold blood by creating a

:04:25. > :04:30.false sense of security with a useless device. How many people

:04:30. > :04:34.lost their lives in bombs that passed through checkpoints where

:04:34. > :04:40.this device was being used? TRANSLATION: I think hundreds, I

:04:40. > :04:44.don't have the exact statistics, but it was hundreds. For every bomb

:04:44. > :04:52.stopped, he said, four got through. And the explosives that were found

:04:52. > :04:57.were discovered because of tip-offs or by chance. Between 2008-2009

:04:57. > :05:05.over 1,000 Iraqis died in bomb abacks in Baghdad alone, many more

:05:05. > :05:09.were seriously injured. I met Haneen Alwan in Jordan, where she

:05:09. > :05:13.has come for medical treatment. She has already had 59 operations after

:05:13. > :05:17.she suffered horrific burns in a double bomb anything Baghdad in

:05:17. > :05:21.early 2009. She had been two months pregnant at the time, and craving

:05:21. > :05:26.ice-cream, which she had gone out to buy when she was caught in the

:05:26. > :05:30.explosion. TRANSLATION: My life was completely destroyed, I lost

:05:30. > :05:38.everything in an instant. I was left with nothing. I lost the baby

:05:38. > :05:43.and my husband divorced me. She had trusted that Jim McCormick's called

:05:43. > :05:50.bomb detector, used at virtually every checkpoint worked. What do

:05:50. > :05:54.you think of the man who sold these devices? TRANSLATION: The man has

:05:54. > :05:58.no conscience, he is morally bankrupt. How could he sell them

:05:58. > :06:07.just for the money and destroy the lives of others. He has no humanity,

:06:07. > :06:12.a useless person. What kind of man would sell fake bomb detectors to a

:06:12. > :06:16.country where lives depended on it? This is Jim McCormick on a sales

:06:16. > :06:20.trip to Niger, being filmed by a colleague who had believed the

:06:20. > :06:25.devices worked. He has agreed now to talk exclusively to Newsnight,

:06:25. > :06:29.as long as we conceal his identity. Which countries did you go to with

:06:29. > :06:35.Jim McCormick to sell these devices? We flew all around the

:06:35. > :06:41.world, Belgium, Romania, Hong Kong, Niger, Nigeria, Kenya. The training

:06:41. > :06:45.for the Iraqis was done in Turkey. He started to have suspicions, and

:06:45. > :06:49.then senior army officers in Niger complained that the detectors

:06:49. > :06:54.didn't work. The whistleblower confronted McCormick. What happened

:06:54. > :06:57.when you raised your concerns with Jim McCormick? Well, I said if this

:06:57. > :07:03.doesn't work I can't be any part of it. He said it does exactly what it

:07:03. > :07:06.is designed to I said what was that, I was expect him to say it detects

:07:06. > :07:11.explosives, ivory and gold, he never said that, he said it makes

:07:11. > :07:14.money. I said I didn't want nothing to do with it. He said suit

:07:15. > :07:18.yourself, you are walking away from millions, said at least I can sleep

:07:18. > :07:23.at night. The big contract was in Iraq, the trick was to find corrupt

:07:24. > :07:28.middle men who would sign contracts to buy the ADE 651s, people like

:07:28. > :07:31.the head of the Iraqi bomb squad. The middle men don't care if people

:07:31. > :07:36.live or die, they are only interested in one thing, how much

:07:36. > :07:46.will I get back, cash back. question at all that it was bribery

:07:46. > :07:49.

:07:49. > :07:53.that oiled the wheels of this scam? Absolutely, absolutely. Apart from

:07:53. > :08:03.Iraq, one of the places that Jim McCormick sold his bogus bomb

:08:03. > :08:07.

:08:07. > :08:11.detectors was here in Lebanon. The country that had bounce the back

:08:11. > :08:16.after the dark case -- bounced back after the dark case days of the

:08:16. > :08:20.Civil War. He sold them to the Lebanese arm and the United Nations

:08:20. > :08:24.peacekeeping force along the border with Israel. They became suspicious

:08:24. > :08:26.when Mr McCormick couldn't produce evidence that showed they could

:08:26. > :08:31.detect explosives. It conducted a series of tests and found they

:08:31. > :08:34.didn't work. There was something else that brought Jim McCormick to

:08:34. > :08:38.Beirut. The city, once the financial capital of the Middle

:08:38. > :08:43.East, is still a playground for the rich. A free wheeling place where

:08:43. > :08:47.money can be easily spent and laundered. It was, our source says,

:08:47. > :08:51.where McCormick came to pay his bribes to the Iraqis. The

:08:51. > :08:56.whistleblower says he came here to a bank in Beirut and witnessed Jim

:08:56. > :09:01.McCormick organising the pay-offs. He watched as he arranged for bank

:09:01. > :09:04.accounts to be set up under false names. Three Iraqis have so far

:09:04. > :09:10.been arrested for corruption over the deals. But the whistleblower

:09:10. > :09:12.said he saw a list of around 15 names. Our source says the Iraqi

:09:12. > :09:16.officials were issued with bank cards which allowed them to take

:09:16. > :09:20.out large sums of money from cash machines anywhere in the world

:09:20. > :09:26.without being traced. He also says that electronic transfers were made

:09:27. > :09:30.to other accounts. McCormick could afford to give bribes to the Iraqis.

:09:30. > :09:36.He bought exclusive properties in Bath, including this one, sold to

:09:36. > :09:39.him by Hollywood film star, Nicholas Cage. Complete with Roman-

:09:39. > :09:44.style indoor swimming pool. His profits also funded a country home

:09:44. > :09:51.in Somerset, smart cars and dressage horses. As well as houses

:09:51. > :09:56.in Cyprus and Florida. And a yacht. It was Iraq that paid the price.

:09:56. > :10:01.Shockingly the British Government had been alerted months before Han

:10:01. > :10:05.in was injured, that the device was a scam, but nothing was done to

:10:05. > :10:12.prevent the sale. When our whistleblower walked out on

:10:12. > :10:15.McCormick in 2008, he made it his mission to take the bogus bomb

:10:15. > :10:19.detector out of circulation, warning the Ministry of Defence and

:10:19. > :10:24.those who bought the device. By 2009 the American military was

:10:24. > :10:29.sounding the alarm. And Avon and Somerset Police began investigating.

:10:29. > :10:37.But McCormick was freely plugging the ADE 651. In ideal conditions

:10:37. > :10:43.you can be up to 1km away. kilometer, so this device will help

:10:43. > :10:47.this device spot explosives a kilometer away. In ideal conditions

:10:47. > :10:53.it will. Koerm did a BBC interview that said the cards were the key.

:10:53. > :10:58.In early 2010 we decided to put the claims to the test with the help of

:10:58. > :11:02.the Cambridge Computer Laboratory. McCormick said this had been

:11:02. > :11:07.programmed to detect TNT, we decided to find out what was in it.

:11:07. > :11:09.This is the cheapest bit of electronics you can get that look

:11:09. > :11:17.vaguely electronic and are sufficiently flat to fit inside a

:11:17. > :11:22.card. It couldn't be programmed to detect TNT? Absolutely not. The day

:11:22. > :11:29.we broadcast our report in January 2010. Good evening a Newsnight

:11:29. > :11:35.investigation has discovered that a called bomb detector produced by a

:11:35. > :11:39.British company and sold to Iraq does not work.

:11:39. > :11:43.British troops have now left Basra and the Americans have left Baghdad.

:11:43. > :11:48.But at checkpoints across the capital and beyond, where bombs

:11:48. > :11:54.remain a constant threat, the bogus detector is still being used. The

:11:54. > :11:58.man who sold them now faces several years behind bars.

:11:58. > :12:01.I'm joined now by Detective Superintendent Nigel Rock from Avon

:12:01. > :12:05.and Somerset Police who was the senior investigating officer on the

:12:05. > :12:08.case. You must be a very happy man this evening, Nigel Rock. This was

:12:08. > :12:13.a conviction for fraud, which I guess in some ways just doesn't

:12:13. > :12:19.quite cover it, does it, what would be your message to Jim McCormick

:12:19. > :12:25.tonight? I think it does cover it in so much as the device doesn't

:12:25. > :12:33.work, it could never work. Jim McCormick knew it didn't work and

:12:33. > :12:38.the court accepted that. And then he told lies and a deception that

:12:38. > :12:41.he practised and developed over ten years. I think fraud fits the crime.

:12:41. > :12:45.Whether it fits the whole circumstances is a different matter.

:12:46. > :12:50.Because clearly many people's lives have probably been affected by

:12:50. > :12:56.McCormick and his useless device. Hundreds lost we were hearing

:12:56. > :13:00.because of this? We have never been able to directly prove that the

:13:00. > :13:06.device was directly responsible for killing people. But I find

:13:06. > :13:12.inconceivable, there was 6,000 of these devices in Baghdad, in

:13:12. > :13:19.environment of Baghdad. At one point there was there were 10-

:13:19. > :13:24.12IEDs going off in the city how could that not be the device that

:13:24. > :13:27.was thought to protect them. There are many still out there now?

:13:27. > :13:30.it is unfortunate and despite messages from ourselves, messages

:13:30. > :13:35.from Government departments, through the embassies, they are

:13:35. > :13:39.still there and they are still in use on the streets in a number of

:13:39. > :13:44.countries and the people operating them unfortunately still believe

:13:44. > :13:49.they work. How can that be? That is one of the most extraordinary

:13:49. > :13:54.things about this tale, the Home Office tested them, the UN tested

:13:54. > :13:58.them, we know the American military were raising the alarm? Isn't it

:13:58. > :14:03.very simple to work out if something that is a bit of plastic

:14:03. > :14:08.works or doesn't work? It is, clearly the evidence we gathered

:14:08. > :14:11.over a four-year investigation, or the best part of four years, firmly

:14:11. > :14:17.established beyond doubt that the device doesn't work, could never

:14:17. > :14:21.work. But McCormick had developed such a con, such a patter, such a

:14:21. > :14:26.way of delivering the demonstration of the device that he was able to

:14:26. > :14:31.convince some people that it worked. And he was still selling it whilst

:14:32. > :14:37.these investigations were going on? He certainly has not sold one since

:14:37. > :14:44.the moment he was are-ed in September 2009, up until that point,

:14:44. > :14:48.yes, he was selling them. I can assure you that since we -- he was

:14:48. > :14:55.arrested in September 2009, up until that point, yes he was

:14:55. > :15:02.selling you. I can assure you since then he has not sold any more.

:15:02. > :15:06.we claim them back the money from his assets? One of the things we

:15:06. > :15:11.have done through the court is restrain his assets and the

:15:11. > :15:15.investigation continues, hopefully with the assistance of the courts,

:15:15. > :15:19.we will confiscate the assets we know about. It is highly likely

:15:19. > :15:22.there are assets we will never trace. As you saw in the report

:15:22. > :15:25.bank accounts were opened in parts of the world where it may be

:15:25. > :15:28.difficult to get information. money claimed from the assets could

:15:29. > :15:33.go back to refund some of the Governments who have paid out

:15:33. > :15:38.money? The process is the assets are seized through the courts and

:15:38. > :15:43.then the money is distributed through the police and the Crown

:15:43. > :15:47.Prosecution Service. But clearly the civil cases are open to some

:15:47. > :15:50.countries to try to get money back. Do you think you will get money

:15:50. > :15:53.back from those who were bribed? That was a different situation.

:15:53. > :15:57.There are a number of investigations going on in other

:15:57. > :16:00.countries. We are supporting those, and clearly we have had a lot of

:16:00. > :16:04.contact with the Ministry of Interior from Iraq. We are hoping

:16:04. > :16:08.to assist them, we will give them all the information we can. Nigel

:16:08. > :16:16.Rock, we really appreciate you coming in, thanks again.

:16:16. > :16:25.Coming up: The difference between England and

:16:25. > :16:28.France reception year and nursery. (applause) going to enjoy this show,

:16:29. > :16:32.da-da-da-da-da! All that to come, will you still be

:16:32. > :16:36.able to use a tenner in the new independent Scotland. The SNP would

:16:36. > :16:41.like to say, of course, the Chancellor is not so sure. He's

:16:41. > :16:46.warning, some would say fledening, that the UK -- threatening, that

:16:47. > :16:51.the UK might not want to tie itself to a foreign currency. Many say

:16:51. > :16:57.there is gentle political mischief being made. How realistic is it

:16:57. > :17:05.that the two countries could share the same currency, a kind of

:17:05. > :17:08.eurozone-light? At one time it was easier to imagine this happening

:17:08. > :17:11.than Scotland politically separating from the rest of Britain.

:17:11. > :17:17.But now political time is speeding up, we are starting not just to

:17:17. > :17:22.imagine Scottish independent but to measure the cost. Let's be clear,

:17:22. > :17:26.abandoning current arrangements would represent a very deep dive

:17:26. > :17:32.indeed into unchartered waters. Would a newly independent Scottish

:17:32. > :17:37.state be prepared to accept significant limits on its economic

:17:37. > :17:41.sovereignty? To submit its bugetry plans to Westminster before

:17:41. > :17:46.Hollywood? To constrain the degree of tax competition between Scotland

:17:46. > :17:50.and the rest of the UK. To accept some continuing oversight by UK

:17:50. > :17:54.authorities of its public finances. Those are good questions if you

:17:54. > :17:59.want to leave Britain but keep the pound. So the Chancellor headed for

:17:59. > :18:04.the kind of factory, high-tech, export-driven, partly reliant on

:18:04. > :18:08.defence, where getting independence right would be make-or-break. He

:18:08. > :18:11.asked an even more fundamental question. Why would 58 million

:18:11. > :18:14.citizens give away their sovereignty over monetary and

:18:14. > :18:19.potentially other economic policies to five million people in another

:18:19. > :18:24.state. The SNP asserts that it would be in everyone's interest for

:18:24. > :18:27.an independent Scotland to keep the pound as part of a eurozone-style

:18:27. > :18:31.sterling zone. But the Treasury analysis we are publishing today

:18:31. > :18:37.shows that is not the case. Treasury today laid out three

:18:37. > :18:44.options after a Scottish "yes" vote, joining the euro, launching its own

:18:44. > :18:48.currency or keeping the pound. The problem with all of them is

:18:48. > :18:52.Scotland's economic shape, think oil, whiskey and banks. This

:18:52. > :18:55.London-based economist who designed the residue of RBS and HBOS thinks

:18:56. > :18:59.it is the size of the banking sector that dictates much else.

:18:59. > :19:03.When you have a bank in trouble you have a Central Bank to support it,

:19:03. > :19:06.and behind the Central Bank is always the taxpayer. That means if

:19:07. > :19:11.you have an independent Scotland within a sterling area you need to

:19:11. > :19:14.have a Central Bank, not only for monetary policy, but also banking

:19:14. > :19:20.policy. That requires the big taxpayer, which is the rest of the

:19:20. > :19:24.UK. That's where the complication becomes. Probably the most selling

:19:24. > :19:27.graphs in today -- telling graphs today are these. It shows Scottish

:19:27. > :19:31.exports declining to the UK over the past few years, but remaining

:19:31. > :19:36.way above exports to the rest of the world. It is the same when it

:19:36. > :19:41.comes to imports. Scotland's main trade route, effectively, runs down

:19:41. > :19:45.the M6 and the west coast railway line between Gretna and Carlyle.

:19:45. > :19:49.Confused? A lot of Scottish people are. I like the pound and what we

:19:49. > :19:52.have got. I don't like the euro. Ideally I would like to see it as

:19:52. > :19:58.it is at the moment. Just continuing with the Scottish notes.

:19:58. > :20:03.If it came down to changing the currency I think that would swing a

:20:03. > :20:06.lot of votes. We should create our own currency. With the oil still

:20:06. > :20:11.flowing and the globally important engineering industry it has

:20:11. > :20:16.produced, the SNP's argument is the rest of Britain that needs Scotland

:20:16. > :20:19.to keep the pound. The rest of the UK needs Scotland within the

:20:19. > :20:23.currency area to support the balance of payments. If they didn't

:20:23. > :20:26.have access to Scotland's resources like our oil, that would be a loss

:20:26. > :20:30.of �40 billion from the sterling balance of payments. That would

:20:30. > :20:33.double the balance of payments deficit and cause all sorts of

:20:33. > :20:36.problems. There is no need for. That they can continue to have

:20:36. > :20:40.Scottish resources underpinning the sterling balance of payments. That

:20:40. > :20:44.is why it is in the interests of the rest of the UK. What George

:20:44. > :20:47.Osborne is effectively saying to Scottish voters is you can have

:20:47. > :20:52.independence, but if you want to keep the pound you may end up

:20:52. > :20:57.giving quite a lot of control over that independent Scottish economy

:20:57. > :21:00.to London. So why doesn't Scotland opt, like Denmark, for its own

:21:00. > :21:03.separate currency? This certainly is what some supporters of

:21:03. > :21:07.independence see as the long-term goal? I think you have to

:21:07. > :21:10.distinguish between the short-term and the long-term. The short-term

:21:10. > :21:14.practically would have to be some arrangement whereby Scotland

:21:14. > :21:18.continued to use sterling. I think the option of moving to the euro is

:21:18. > :21:25.a non-starter. You could say that we have been in one dysfuntional

:21:25. > :21:29.currency union in the UK kuorn union, why go into an even more

:21:29. > :21:32.dysfuntional currency union. The preferred option is for our own

:21:32. > :21:35.currency. It is the getting there that worries people and on both

:21:35. > :21:39.sides of the border. The difficulty is how to get from where they are

:21:39. > :21:43.today, with all of their contracts in sterling, to all of their

:21:43. > :21:46.contracts being in a new currency that hasn't been set yet. And going

:21:46. > :21:51.from where we are today to there, you run the risk of capital coming

:21:51. > :21:53.out of the country. It is a big transitional risk, but in the

:21:53. > :21:59.longer term it is a coherent solution.

:21:59. > :22:02.But in the shorter term, come next September, the prospect is of a

:22:02. > :22:07.Scotland-shaped economy using money issued by the bank of somewhere

:22:07. > :22:11.else. The Scottish Finance Minister, John

:22:11. > :22:16.Swinney, joins us from from Dundee. Thank you for your time this

:22:16. > :22:20.evening. Let's imagine, if you like, that you have won, that Scotland's

:22:20. > :22:24.independent. Why wouldn't a proud, new low- independent Scotland want

:22:24. > :22:28.to have its own currency? What we have set out is a framework that is

:22:28. > :22:32.well evidenced about the arguments which essentially create the

:22:32. > :22:36.platform for a continuity of the business environment between

:22:36. > :22:38.Scotland and the rest of the United Kingdom. That is one of the very

:22:38. > :22:42.powerful attractions of the proposition we have put forward to

:22:42. > :22:48.the rest of the UK into the bargain. That companies south of the border

:22:48. > :22:52.would continue to be able to trade with Scotland in the same currency.

:22:52. > :22:55.And visa versa for companies and organisations within Scotland. It

:22:55. > :23:00.is a practical and sensible and rational approach which is in the

:23:00. > :23:06.interests of everybody north and south of the border. In currency

:23:06. > :23:08.terms Scotland couldn't go it alone then? I think that Scotland has all

:23:08. > :23:13.the attributes to be a strong, independent country. Our

:23:13. > :23:16.proposition is to ensure that our country is able to take all of the

:23:16. > :23:21.decisions that are relevant and important to the economic and

:23:21. > :23:24.fiscal interests of our country. But not with its own currency?

:23:24. > :23:28.currency, you have looked at all the various options that the UK

:23:28. > :23:30.Government has looked at into the bargain. We consider the best

:23:30. > :23:34.approach for Scotland is to maintain the use of sterling as

:23:35. > :23:40.part of a sterling zone. Is that just for a short-term transition or,

:23:40. > :23:45.I mean is there a long-term goal for a Scottish currency?

:23:45. > :23:49.proposition we have put forward is a strong and sustainable

:23:49. > :23:53.proposition. It is one we put forward as a robust long-term

:23:53. > :23:56.proposition to give the correct framework for the Scottish economy

:23:56. > :24:00.and to enable the companies and businesses of Scotland to continue

:24:00. > :24:03.to be able to trade effectively with the rest of the UK and for

:24:03. > :24:08.other companies in the rest of the United Kingdom to be trading with

:24:08. > :24:11.the companies and businesses in Scotland. It makes sense in the

:24:11. > :24:15.interests of everybody in these islands to be taking that approach.

:24:15. > :24:20.There seems to have been three identifyable positions on currency.

:24:20. > :24:25.You were unambiguously committed to joining the euro in 1999, you were

:24:25. > :24:29.in favour of pegging the Scottish pound to sterling. Now you are

:24:29. > :24:33.staying with terling, if you got your own way -- sterling, if you

:24:33. > :24:36.got your own way and there is no talk of a currency at all. It is

:24:36. > :24:39.hard for people looking at your policies to work out what you

:24:39. > :24:43.really mean isn't it? Over the years there has been a broad cross

:24:43. > :24:47.section of political opinion that at some stage has supported

:24:47. > :24:51.membership of the single currency, not least of which the last Labour

:24:51. > :24:54.Government and the current Chief Whip to the Treasury and the Lib

:24:54. > :24:58.Dem party. The issue of the single currency is broadly debated across

:24:58. > :25:01.the political spectrum. What we have set out over some considerable

:25:01. > :25:06.time is the advantages of Scotland retaining the pound, establishing a

:25:06. > :25:10.sterling zone that would enable us to operate within a framework which

:25:10. > :25:14.would essentially create the stability of a unified market

:25:15. > :25:19.across these islands and that in the interests of everybody aclos

:25:19. > :25:21.the UK. We have heard the -- Across the UK. We have heard the

:25:21. > :25:25.advantages for Scotland, the Chancellor has laid down the

:25:25. > :25:28.compromises you needed to make, significant limits, and submitting

:25:28. > :25:31.plans to Westminster. Accepting continuing oversight of public

:25:31. > :25:35.finances, you would be prepared to do that would you, under the Bank

:25:35. > :25:39.of England? These are some of the overbearing interventions of George

:25:39. > :25:42.Osborne. Why are they overbearing, they seem completely sensible don't

:25:42. > :25:46.they? They are pretty overbearing. We have made it pretty clear that

:25:46. > :25:50.we would see the logic and the rationale of some form of

:25:50. > :25:53."stability pact" arrangements in which we set out some strategic

:25:53. > :25:57.rules around the management of the public finances in Scotland. With

:25:57. > :26:06.particular agreements around the level of debt that we would incur,

:26:06. > :26:09.or the level of borrowing we would be undertaking. When you talk about

:26:09. > :26:14.strategic rules, a lot of tax- payers will be rembering that

:26:14. > :26:17.billions were paid out to rescue Scottish banks, RBS and HBOS to be

:26:17. > :26:20.rescued by the Bank of England. Would that continue? All of these

:26:20. > :26:23.factors are part of the public finances of the United Kingdom as

:26:23. > :26:27.we stand just now. Basically you would use the loans there are the

:26:27. > :26:30.Bank of England without submitting any of our bugetry restrictions or

:26:30. > :26:35.qualifications, you would be prepared to just take and not give?

:26:35. > :26:39.What I said a moment ago is we accept the rationale for a

:26:39. > :26:43."stability pact" type arrangement, where the levels of debt we would

:26:43. > :26:47.be incurring, or the level of borrowing we would undertake would

:26:47. > :26:50.be part of the "stability pact". That would give Scotland a maximum

:26:50. > :26:53.amount of fiscal flexibility to determine economic policy in the

:26:53. > :26:58.interests of the community of Scotland and to create the

:26:58. > :27:03.strongest possible economy. Chancellor said it was unworkable.

:27:03. > :27:08.That is the argument to enable us to do that. The Chancellor said it

:27:08. > :27:12.was unworkable. The Chancellor said why would the 58 million citizens

:27:12. > :27:17.of the rest of the UK to give their sovereignty to share in a new kind

:27:17. > :27:19.of eurozone with you? There are two reasons why that would be in their

:27:19. > :27:22.interests, the first is there is a significant amount of trade between

:27:22. > :27:28.Scotland and the rest of the UK, and crucially between the rest of

:27:28. > :27:33.the UK and Scotland. And secondly, you can see, you saw in the clip

:27:33. > :27:37.from the First Minister in the package that you just ran, Scotland

:27:37. > :27:41.makes a significant contribution towards the balance of payments

:27:41. > :27:45.situation for the United Kingdom, to the tune of �40 billion alone in

:27:45. > :27:47.North Sea oil and gas revenues. That is a particular prize that I

:27:47. > :27:51.think the Chancellor of the Exchequer would be determined to

:27:51. > :27:55.get his hands on for the sterling zone benefits. Isn't the truth, as

:27:55. > :27:58.was made clearly and succinctly by the woman in the film, that people

:27:59. > :28:04.don't want to hear about any real change. They want to think you

:28:04. > :28:07.still keep the pound and the Queen, nothing really changes. It is an

:28:07. > :28:11.independance-light, where you take the good bits and leave the bad

:28:11. > :28:15.bits, and you don't tell people exactly what they are settling for,

:28:15. > :28:18.because it is easier to get them voting for you? People want to hear

:28:18. > :28:21.is what it is possible to achieve within Scotland. What it is

:28:21. > :28:25.possible to achieve is a much stronger economy, using the

:28:25. > :28:28.economic and fiscal levers that countless other countries around

:28:28. > :28:35.the globe take advantage of. To make sure we have a more prosperous

:28:35. > :28:39.and fairer society. We live in the United Kingdom, in the fourth-most

:28:39. > :28:42.unequal country in the IOC. It is high time we used our wealth,

:28:42. > :28:48.imagination and talent to create a more prosperous and fairer country.

:28:48. > :28:51.Thank you very much indeed. How do we want our kids to be

:28:51. > :28:55.raised? What role should the Government have in looking after

:28:55. > :29:01.them? If child minders were more qualified they could look after

:29:01. > :29:06.more children at a time, childcare would cost less, children would be

:29:06. > :29:09.better behaved? Make sense? The French does, and our Education

:29:09. > :29:19.Minister, Elizabeth Truss, agrees with them. We went across the

:29:19. > :29:23.channel to see if we could learn a lesson.

:29:23. > :29:28.Look at these faces very carefully. They seem perfectly normal. But

:29:28. > :29:36.from a very young age they have become more disciplined, more

:29:36. > :29:44.socialised, more attentive, more mind-boggleing angelic! By the way,

:29:44. > :29:47.they are French. If on the rare occasion a French child throws a

:29:47. > :29:50.tantrum or throws food, it is because, we are told, they have

:29:50. > :29:56.permission to do so. That is the idea we are going to test with a

:29:56. > :30:00.Government minister on a trip to France. Before we head off to check

:30:00. > :30:10.this little angel thesis, I want someone of my own to test any

:30:10. > :30:11.

:30:11. > :30:16.claims that we hear in France. So, we have French mother Lola. She has

:30:16. > :30:20.three children who -- Leila, she has three children who at various

:30:20. > :30:24.stages of their upbringing have experienced both systems. We will

:30:24. > :30:34.come back to her later. Until the children enter school parent are

:30:34. > :30:38.really struggling here. Probably in France they do not as much. Last

:30:38. > :30:45.Tuesday we got up and out with Government minister for children,

:30:45. > :30:51.Elizabeth Truss. We are on a research expresident dix into early

:30:51. > :30:54.years education. -- expedition into early years education. This is a

:30:54. > :30:59.nursery, but more like a school, three-year-olds attend it, a year

:30:59. > :31:03.earlier than attending school in the UK. A lot of problems in the UK

:31:03. > :31:07.is quite a lot of kids arrive in school not able to sit and

:31:07. > :31:11.concentrate in lesson. That means they will get behind further on in

:31:11. > :31:15.their school career. What these children are doing is they are

:31:15. > :31:22.being led by really qualified professionals, who know what they

:31:22. > :31:28.are doing. Who can operate with large groups and encourage that

:31:28. > :31:31.self-reliance amongst children. children here are not shouting out

:31:31. > :31:39.or running about, they are concentrating on what the teacher

:31:39. > :31:44.is saying. That is so important. You would see this in some nursery

:31:44. > :31:48.in -- nurseries in the UK, but only a third of them, this is an

:31:48. > :31:53.entitlement for all children in France. The headteacher has hosted

:31:53. > :31:57.a large delegation from the UK, why does he think that they are

:31:57. > :32:04.mesmerised by his school? Language is improving fast. We can see they

:32:04. > :32:13.develop social relationships very, very quickly. They become quite

:32:14. > :32:23.deep as well for this age. As well they improve their abilities about

:32:23. > :32:29.being ready to learn how to read, how to write. What did Leila's son

:32:29. > :32:34.make of the French school? He has take great advantage of being

:32:34. > :32:40.schooled that early. He enjoyed it. He was ready to have other

:32:40. > :32:45.relationships and that he started to build up his own path,

:32:45. > :32:52.confidence, knowledge. What does the big sister think? They have

:32:52. > :32:57.these sort of stricter methods of teaching children. Here we learn

:32:57. > :33:04.through games and through all that. So we learn more discipline in

:33:04. > :33:08.France. Discipline at three years old but also in the earlier years.

:33:08. > :33:14.As we travelled around nurseries we met child minders with high

:33:14. > :33:17.qualifications where one looked after eight two-year-olds.

:33:17. > :33:21.Elizabeth Truss is shifting Britain to this French system, one to eight,

:33:21. > :33:27.if the minder is looking after children at home, it will be one to

:33:27. > :33:36.four. Elizabeth Truss has been much criticised for this shift, she

:33:36. > :33:39.thinks it is possible. My colleague Jacob Reece-Mogg has four under-

:33:39. > :33:43.fives and they are capable of looking after it and so should

:33:44. > :33:47.child minders. We are saying it is down to individual child minders to

:33:47. > :33:53.say how many children it is OK to look after and how it fits with

:33:53. > :33:57.their life. Back in Oxford we had ratios that had a mixed report card.

:33:57. > :34:02.When my last baby started in a French City Council nursery, she

:34:02. > :34:08.was six months old, she was one of eight children for one carer. And I

:34:08. > :34:14.thought it was a bit hard after the experience of the British ratios of

:34:14. > :34:17.three children for one carer. Leila does agree with Elizabeth

:34:17. > :34:20.Truss that all round provision in France is better. This means that

:34:20. > :34:25.more French mothers than British mothers work. Two-thirds of mums in

:34:25. > :34:30.Britain go out to work. I'm very concerned that those mums who often

:34:30. > :34:34.have to go out to work for economic reasons, and this is a trend across

:34:34. > :34:38.the world, in all developed countries dual-income families are

:34:38. > :34:47.the norm, I'm concerned those mums are made to feel guilty about a

:34:47. > :34:52.choice they don't really have. France probably the experiences of

:34:52. > :34:58.women are the same as the experiences of British women. We

:34:58. > :35:02.are juggling probably you know we have got our cultural habits of

:35:02. > :35:10.raising children that are quite different from the more relaxed

:35:10. > :35:14.approach of British women. I feel like English mums and parenting is

:35:14. > :35:24.much more gentle and geared toward the children, where as in France

:35:24. > :35:28.maybe we ask the children to fit into our lives more. With me now is

:35:28. > :35:33.the Education Minister, Elizabeth Truss, also joined by Laura Perrins

:35:33. > :35:36.who is the mother who challenged Nick Clegg on his radio programme.

:35:36. > :35:40.And we have a member of the professional Association for

:35:40. > :35:43.Childcare and early years. Elizabeth Truss do you think French

:35:43. > :35:48.kids really are better behaved? What I noticed in the French

:35:48. > :35:52.nurseries we visited is they do tend to be very calm and purposeful

:35:52. > :35:56.and they are very good at actually improving the outcomes of children

:35:56. > :36:02.later on in life. There has been some very good studies of the

:36:02. > :36:08.impact of French l'ecole maternello Casanova which are positive. I

:36:08. > :36:14.think the strong eacher leadership is really good. Is that the

:36:14. > :36:17.qualification of the teachers in charge, or is it the numbers or a

:36:17. > :36:20.discipline introduced or what is it? The qualifications of the

:36:20. > :36:23.teachers is really important. That is one of the main factors in the

:36:23. > :36:26.outcomes for children. The more qualified the teacher, generally

:36:26. > :36:31.the better the outcomes are. That is true in studies in Britain, but

:36:31. > :36:37.also for studies in France. I think though that the structured

:36:37. > :36:41.environment they operate in enables them to hire those high-quality

:36:41. > :36:44.teachers. There is a relationship between the two. What do you hear

:36:44. > :36:47.when Elizabeth Truss talks about high-quality teaching and that

:36:47. > :36:51.difference that we see in France? think there is a very different

:36:51. > :36:56.language in terms of the conversations that we have with our

:36:56. > :36:59.members, childcare professionals and nursery workers and childminder.

:36:59. > :37:03.They talk about children enjoying their time in childcare, learning

:37:03. > :37:08.through play, and having a very much mixed balance of child-led

:37:08. > :37:12.experience as well as adult, teacher-led experience. That is at

:37:13. > :37:18.the heart of the early years foundation stage we work with in

:37:18. > :37:21.England. You can't disentangle high-quality from good

:37:21. > :37:26.qualifications and ratios, it is both. What do you mean by that?

:37:26. > :37:29.key factors for a good-quality experience for children are high-

:37:29. > :37:33.quality one-to-one interactions with their adult carer, that is

:37:33. > :37:39.about the number of children you are looking after at any one time,

:37:39. > :37:42.that allows them to be provided by play-led opportunities. Play-led is

:37:42. > :37:45.important? We are talking about structured play, of course we are

:37:45. > :37:49.not talking about three-year-olds sitting down at desks writing

:37:49. > :37:53.things. But we are talking about teacher-led activities. We do know

:37:53. > :37:56.that the impact of the teacher is the most important thing. The level

:37:56. > :38:00.of qualifications is the most important factor, it has been shown

:38:00. > :38:03.to be the case in France as it has in England. Only a third of our

:38:03. > :38:07.nurseries are led by graduate teachers, even though we know that

:38:07. > :38:11.is the most important factor. So, yeah, interaction between adults

:38:11. > :38:15.and children is important, but also socialisation between children is

:38:15. > :38:18.important, learning to take turns is important, all of those kinds of

:38:18. > :38:23.things. You do need structure. What I really worry about is some of the

:38:23. > :38:25.children in the most deprived areas, who don't have structure in their

:38:25. > :38:29.family backgrounds need that structure when they get to nursery

:38:29. > :38:34.so they can learn and be ready forle skoo. What we know is a third

:38:34. > :38:38.of -- school. What we know is a third of children arrive at school

:38:38. > :38:41.without communication and language skills that more structured play

:38:41. > :38:49.delivers. Don't they get that at home with their parents as opposed

:38:49. > :38:52.to being in an organised group? think they get it in both groups.

:38:52. > :38:55.I'm very supportive of more child minders, and I'm supportive of stay

:38:55. > :39:00.at home parents. What we need is people to have a choice. The thing

:39:00. > :39:03.I pointed out in the film is a lot of women, men, have to go out to

:39:03. > :39:07.work for economic reasons, and we need to make sure the childcare

:39:07. > :39:11.that they rely on is really high quality what you get in France is a

:39:11. > :39:15.sense of a continuum, a system you can rely on so you can make your

:39:16. > :39:19.choice, secure in the knowledge that your child is getting a really

:39:19. > :39:24.good quality education. minister has accepted that many,

:39:24. > :39:28.many parents have to go out to work. The reason for that is that this

:39:28. > :39:32.Government has actively discriminated against stay at home

:39:32. > :39:38.mums and single income families by penalising them in the tax system

:39:38. > :39:43.and stag ma advertising them in the language they use, implying --

:39:43. > :39:47.stigmatising them in the language they used and in the language they

:39:47. > :39:53.use, implying they are lazy. Eight out of ten mothers say they would

:39:53. > :39:56.like to reduce their hours to go part-time or full-time stay at home

:39:57. > :40:06.mothers. The minister and the Government, instead of coming here

:40:06. > :40:09.in here with this French fairytale of Ameila and Jacques sitting down

:40:09. > :40:14.at desk, should think about Alice and John, the British children you

:40:14. > :40:16.are elected to represent, they want to be at home with their parents.

:40:16. > :40:20.And importantly, the key factor is those parents want to care for

:40:20. > :40:24.their children at home. And your Government instead of coming in

:40:25. > :40:30.here with this French fantasy, should instead do what they did,

:40:30. > :40:34.and implement the promise in the coalition agreement to provide for

:40:34. > :40:38.a transferable tax allowance. That would give a real choice to working

:40:38. > :40:43.parents to stay at home for the crucial early years and care for

:40:43. > :40:48.those kids at home. You have deprived them of that choice.

:40:48. > :40:52.will be putting in the tax allowance for marriage. When will

:40:52. > :40:57.that happen? Is that a promise on Newsnight? Let me finish responding

:40:57. > :40:59.to your point. Let's just get to the bottom of that, is this a

:40:59. > :41:02.marriage tax allowance that is coming in this parliament? This is

:41:02. > :41:07.a commitment that the Conservatives have in our manifesto. Jo are you

:41:07. > :41:12.going to act on it? I hope so, I'm very supportive of marriage in the

:41:12. > :41:16.tax system. You hope so, are you going to act on a commitment, given

:41:16. > :41:20.in the coalition agreement, parliamentary democracy is for the

:41:20. > :41:23.children you represent, act on that commitment. This is crucial, we

:41:23. > :41:26.have heard a lot about the marriage tax allowance t will come in, it

:41:27. > :41:30.was a commitment, then a promise, it got dropped because now of the

:41:30. > :41:33.Lib Dems, now you say it is a commitment and you hope it will be

:41:33. > :41:37.brought in, before the end of this parliament? I hope so. I can't

:41:37. > :41:40.commit that. I'm not the Chancellor, I can't say that. Why don't you

:41:40. > :41:44.lobby the Chancellor to bring it in? I think it is important.

:41:44. > :41:46.However, what I would say is we need to support all families. We

:41:47. > :41:50.need to allow families to make choices. I don't think it is right

:41:50. > :41:54.to pit one set of parents against another set of parents. We are

:41:54. > :41:58.supporting those parent. What we have to recognise is that childcare

:41:58. > :42:01.costs here in England are twice as high as they are in other countries

:42:01. > :42:06.in Europe, it is very, very difficult for some families to get

:42:06. > :42:13.by. Some families are on very low incomes. We need to make sure that

:42:13. > :42:17.the childcare of those 66% of mums that go out to work can be relied

:42:17. > :42:20.on and is good. There is an important factor that we need to

:42:20. > :42:24.remember. The parents currently signing petitions to Governments

:42:24. > :42:32.around the ratios have two messages, it is not about cost it is about

:42:32. > :42:35.the quality of care for children. There is concerns about increasing

:42:35. > :42:40.ratios, alongside proposals for qualification change that will take

:42:40. > :42:46.longer than the ratio change. of parents are saying we spend an

:42:46. > :42:50.enormous amount, a friend who had twins spent �2,500 a month, that

:42:50. > :42:53.nearly broke them. Can't you say as a parent I want a better

:42:53. > :42:57.qualification and I expect for more that money? Absolutely, one of the

:42:57. > :43:01.lessons we need to recognise is countries like Holland and France

:43:01. > :43:06.are investing far more in state- funded childcare. And alongside

:43:06. > :43:08.that a greater contribution from employers. There is choices to be

:43:08. > :43:13.made around how much childcare costs, will there is more that

:43:13. > :43:16.could be done in terms of employer- supportive vouchers. We spend the

:43:16. > :43:23.same as a proportion of GDP on early years that the French do. It

:43:23. > :43:26.is about getting value for money for what we spend. We spend �5

:43:26. > :43:33.billion. The figures on what you spend keep changing. We had the

:43:33. > :43:37.lower ratios in Europe, and the average childcare worker gets �6.60

:43:37. > :43:39.an hour, barely above minimum wage, we can't kid ourselves that the

:43:39. > :43:42.system we have at the moment is right. Let's not kid ourselves that

:43:42. > :43:46.you have any support for this change in ratio. The entire

:43:46. > :43:55.industry is against you, most parents by the parenting forums are

:43:55. > :43:59.against you, and Professor Nut Brown who commissioned the original

:43:59. > :44:04.report has dismissed the ratio changes as nonsense. These ratios

:44:04. > :44:09.are across Europe. You heard the film about the French system.

:44:09. > :44:14.you interested in British children or British parents are you

:44:14. > :44:20.interested in French parents and children. You can see the high

:44:20. > :44:24.quality care works in France. A lot of childcare providers operate in

:44:24. > :44:29.other countries with different qualifications and higher ratios.

:44:29. > :44:34.Let's be clear we are only going to allow childcare providers who hire

:44:34. > :44:38.high-quality staff to operate these ratios, there will be strict

:44:38. > :44:43.criteria to operate the ratios. There is no link to child minders

:44:43. > :44:47.for qualifications and ratios. is why we are having childcare

:44:48. > :44:52.agencies. That is not about quality assurance through qualifications.

:44:52. > :44:56.It is. I think the key issue for parents is absolute he cost but not

:44:56. > :45:00.at the sacrifice of quality. But I don't think there is evidence

:45:01. > :45:06.really for us to see that how changing ratio levels will really

:45:06. > :45:10.change the cost of childcare. up to the professionals to decide.

:45:10. > :45:20.I'm sorry we have run out of time, thank you for coming. I come to

:45:20. > :45:54.

:45:54. > :45:57.these papers rather new so I will That's all we have time for tonight.

:45:57. > :46:07.But Jeremy will be here tomorrow, from all of us here, a very good

:46:07. > :46:32.

:46:32. > :46:35.Good evening. Wednesday will be a bit of a mixed picture across the

:46:35. > :46:39.UK, some rain, some sunshine. The rain across primarily northern part

:46:39. > :46:42.of the UK, during the first half of Wednesday. It turns brighter across

:46:42. > :46:46.Scotland. Sparkling sunshine and fresh conditions, a little further

:46:46. > :46:49.southwards in Northern Ireland it will remain cloudy. The north coast

:46:49. > :46:53.getting sun but well and truly it is across Scotland where we will

:46:53. > :46:56.have the best of the weather in the north of the UK. Then we get into

:46:56. > :47:01.England, here it is relatively cloudy. To the east of the Pennines

:47:01. > :47:04.there might be breaks in the cloud. A little bit more cloud across the

:47:04. > :47:08.north Midland. For East Anglia and the south-east, a little bit more

:47:08. > :47:12.cloud on Wednesday compared to what we had on Tuesday. So maybe the

:47:12. > :47:16.temperatures in one or two spots won't be quite so high. For the

:47:16. > :47:21.south west some low grey cloud and mist in one or two places affecting

:47:21. > :47:25.areas deep inland, not just around the coast. Some of that may drift

:47:25. > :47:29.up the Bristol Channel. Cloudy across Wales too. Let's look at the

:47:29. > :47:33.outlook over the next couple of days. Wednesday and Thursday

:47:33. > :47:38.temperatures across the north hovering around 1010 degrees. As

:47:38. > :47:41.far as the Midland go on Wednesday. Already temperatures starting to