31/05/2013 Newsnight


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

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Remember this? Tlfrjts is, I believe, a big issue we can no


longer ignore. The next big scandal waiting to happen. I am talking


about lobbying. Today, over three years later,


Patrick Mercer has resigned the Tory whip to save his party


embarrassment, he says, after being caught up in a lobbying scandal.


We'll ask whether reforms are long unemployment figures, young people


out of work - in Germany, 7.5%, in the south in the eurozone, more than


50%. We'll be discussing the two most powerful men in euroland -


Apology for the loss of subtitles for 127 seconds


2Nd Battalion, The Mercian Regiment was approached by a fake company,


the fake company, Communication The fake company, Alistair Andrews


commune cation. The programme released this clip of


Mr Mercer. I do not charge a great deal of


money for these things. I would normally come out at �500 for half


a day. So �1,000 a day. Patrick Mercer says he took the


money for work outside of Parliament.


It was said he admitted five parliamentary questions, all


answered. In total, he was paid �4,000. This had stale not been


declared by Mr Merer as the rules demand in the register of members


interest. Whatever the truth in this instance, links between the


MPs and lobbyists are problematic. Indeed there are scandals going


back decades. From cash for questions in the 90s. To three


Labour MPs found guilty of breaking the rules in 2010. Indeed, that


year David Cameron called lobbying the next big scandal waiting to


happen. We know how it works. The lunches,


the hospitality, helping big businesses find the way to get its


way. Yet the promise statutory register


of lobbyists still has yet to materialise, inspite of having the


supposed support of all three main Westminster parties. The Government


is considering responses to its consultation.


It is not the complexity of the proposal that is the problem, but


the lack of political will. There is no political oomph behind this


proposal whatsoever. Panorama says that Patrick Mercer


agreed to set up a Fiji all-party group. Officially they have no


status but they are confused in the minds of journalists and the public


with official bodies like select committees. They have grown in


number. There were about 250 all- party groups in 1985. By January,


2012, there were 566. Far more even than the US Congress which has 380.


A recent survey of MPs and peers by the speakers office through up the


result asked if they were agreed that all-party groups were prone to


be taking responses from their own lobbyists for their own purposes,


48% agreed. It is said that the groupings are


small beer in the big scheme of things.


It is in the context of a �2 billion industry. Yes we have lots


of large consultant lobbyist agencies in London, but there is


this enormous in-house industry. You look at something like the case


of Murdoch and his lobbyist. The kind of access that they had to


Jeremy Hunt's office, for example and the close contact, the texting,


that is what of concern here. Whatever else happens, the pressure


on the Government to deliver on lobbying reform is bound to


increase. Well, I am joined by Mark Spencer,


the Conservative MP for Sherwood, the neighbouring constituency of


Patrick Mercer and former lobbyist, Thomas Docherty. First of all, Mark


Spencer, your colleague caught on camera, offering services to a fake


lobbying group, unwise to say the least? It does not look good.


Patrick will have to defend that when it comes to the investigation.


It was interesting he said he was resigning the Whip in order to save


his party embarrassment but does think not thank think that anything


he might have done is efficient to resign from the constituency?


think we have to say it was Patrick's decision to resign from


the party. Nobody forced him out. That is his decision. He has to


justify that course of action, but we have to ensure that we get the


facts and establish the truth and get to the bottom of what has been


happening. If the allegations of cash for


questions prove true, should he resign the constituency? There are


clear lines, cash for questions is wrong. It is set out in the


statutory legislation. Any MP prove tonne have taken cash


for questions should resign. Thomas Docherty, a problem, surely


a lack of clarity over the rules and the regulations? Last year I,


when 2nd Battalion, The Mercian Regiment was accused of the


breaching -- when Patrick Mercer was accused of breaching lobbying


rules, he refused to get involved as he could not see which of the


rules that Patrick Mercer could have broken, but I agree that we


need to overhall the work of the Standards Commissioner.


You are a former lobbyist, in any of the recently issues it is not


the lobbying groups themselves, lobbying company companies, I


should say, sorry, that have been a problem? I think where a important


point is made you cannot differ enSecretary of State between the


third party lobby ists and the lobbying industry as a whole. There


is a �2 billion industry here. They are professionals, they do it with


integrity, but there are too many who will not abide by the rules. It


is disappointing that four years after a voluntary code was


introduced that the individuals and companies that will not sign up


that is why I introcuesed a bill in the last session of Parliament,


that the Government refused to support that would have supported a


statutory register. What difference would that have made in this case?


There is a danger. What we don't want to do is to alienate the


constituents, the charities, the vicar from being able to lobby our


MP what is important to them. But your leader promised that. It


was the next big scandal waiting to happen, was said. It is proved to


be the case? When you try to write it down in legislation it becomes


grey in the areas. So you are not keen in a register?


We need more transparency. But we have to make sure that we


don't if you like, put off the small charities, the small unions.


I have spoken to the Fire Brigade unions, the local lobbyists.


It sounds like the Conservative MP to my left thinks that a statutory


register will not make a difference? I will tell you what my


bill covers. It does not cover the village vicar but it does cover the


�2 billion industry. There is a big difference between a constituent


writing to you about a bill and the �2 billion industry that exists and


what the Labour Party has been calling for is a cross-party


approach that says that we need transparency. We need a code of


conduct that says when Members of Parliament, when lobbyists break


that code of conduct, that they can have disciplinary action. If Mark


does not understand that... Do we need more stings like the Panorama


sting? I think that the journalists do a good job of exposing


corruption, but there are extremes. It is the grey area in the middle


that is the difficulty to write down in legislation.


One of the areas, which is a burgeoning industry, is this idea


of all-party groups, which is what the evidence is suggesting that


some confuse with the select committees, a different thing, why?


To be fair, they are a good way of informing MPs of what is happening.


So, 566 of them are working one day in every two years? I am a member


of the Caresers' All Party group. It is is a really good way of


informing me as to what is happening.


Thank you very much. Well, nearly 3.5 million young


Europeans are out of work. However, today's latest joblessness figures


could be seen as almost Good News. We learn that number has remained


static for a third month. But look more closely, you can see


why the European leaders are so worried about youth unemployment.


In the continent's youth joblessness hotspots, the numbers


out of work are continuing to soarN Greece, 53% of under 25s were


jobless a year ago. That stands now at 62%. Spain, Portugal and Italy


have seen huge rises too, but look at Germany, just 8% a year ago, now


it is even lower. The UK, which, of course, is not part of the eurozone,


has seen its youth unemployment fall too. So when it comes to young


people out of work it is the continent's south that is


continuing to suffer badly. �6 billion of EU funds have been


set aside to get every young person in Europe a job, but there are


demands from both sides for more to be done. Those who are anti-


austerity, blame it for strangling job creation. Supporters of


austerity fear that joblessness prompts social unrest and the


unpicking of the policy. In the words of Italy's Labour minister,


we now have to rescue an entire generation of people, who are


scared. We have the best ever educated generation in this


continent and we are putting them on hold.


Joining me now is Jonathan Todd, Professor Hertz and Megan Greene.


First, is persistent youth unemployment one of the serious


problems facing Europe? It is. As you wouldn'ted -- pointed it out it


is not only the high levels but the disparrities between Austria and


Germany on the one hand and Spain and Greece in another. There are a


number of reasons to go into on this.


Yes, let's do. 7.5% in Germany, and 62% in Greece


is it responsible that -- possible that Germany truly understands the


pain of some of these countries? think that they are beginning to,


but we have to look at the difference between the two. Clearly


countries like Germany and Austria are not hit by the recession as


hard as the eurozone countries, but there are other factors as well.


For example a high rate of school drop-outs in the southern European


countries. There are problems of labour laws. That on the one hand


you have workers, established workers with gold-plated employment


conditions, on the other hand, young people who cannot get a job


or if they are it is on a short- term contract. Their public


employment services do not work very well. So as to link up people


with skills that employers are looking for... Sorry, carry on.


And then there is also the problem of the burden of labour taxation.


That is too high in some countries like France where labour is hit


much more hard. There should ab way to shift these things, for example


property taxes. So a combination of factors?


Exactly. Marina, the social nightmare. We


heard the Italian labour minister saying that we have the best-


educated generation, however there are school drop-outs, so the best-


educated youngsters with nothing to do? The figures are shocking. The


ramifications will be felt for decades, on the individuals and the


scarring. We know that the longer someone is out of work, the less


likely they will have jobs in the future and they will get a wage cut,


but in terms of society. As you raise, we know that youth


unemployment is linked with higher rates of social unrest. We have


seen riots in Sweden. Not only because of youth unemployment but


youth unemployment playing a role. We have seen protests in Spain, in


Italy, in Greece. And when these young people they


are out of work for 12 months, some of them? Yes, and graduates in


Spain, 40% of the unemployed youth there are college graduates N


Greece, 30%. They have no hope. What Mr Todd is saying that Mr Must


be structural changes, changes in the labour laws, hiring and firing


issues that should be changed? the short-term, structural reforms


result in more unemployment. Then they support employment later, but


that is not the case immediately. In countries such as Italy, Spain,


Greece, they have a lot more to do in terms of opening up the labour


markets so I expect that employment will rise before it stabilises. I


would say some of the other long- term effects of such high use


unemployment it is not just a reduction in the productive


capacity for the youths but also a lot of them are joust leaving. For


example, I am not exactly in the youth employment age bracket but


half of the context that I know have left N Ireland and also a lot


more political fragmentation. This is a long-term problem for the


eurozone. If young people are leaving the southern European


countries, then the chance of recovery is lessened? Absolutely.


And the point is that if you managed to create jobs that creates


demand which helps the economy o get out of a recession. The


attitude in the passes has all too often been once we restore growth


the jobs come after but the jobs should be coming before the growth


as well. You raise the point, that follows on from what you are saying


that the focus on austerity, austerity plus recession is a very


toxying cocktail. We cannot sacrifice our youth on the


austerity. We need policies that focus on job creation, growth, on


increasing lending to small and medium-sized enterprises so that


they can hire people. Creating apprenticeship schemes that give


jobs to the under 25. A whole host of measures that cost money.


But the problem is we don't know the direction that Europe is going


in? Is it about deficit reduction, banking reform, is it about


targeting? I mean, what is the plan to get us out of this? It is not


one thing or the other. Clearly we have to resolve the underlying


financial crisis. To get back to sustainable growth, but at the same


time, we have to introduce the structural reforms. One solution


that we are pushing hard is the so- called youth guarantee. It is the


idea that has been applied successfully in Austria and Finland.


It is a system whereby in four months of a young person losing


their job or leaving school that they are either offered a job or


failing that an apprenticeship, traineeship or further education.


This means that the young person what cannot find a job is at least


spending their time in investing and acquiring the skills that could


get them a job in the future. You look sceptical? It is the sums


that seem small. There will be hope in the European Investment Bank in


terms of helping facilitating lending to support growth and youth


unemployment, but the EMB is a sclerotic institution. If anybody


is looking for a quick turn around on unemployment in Europe.


-- I think they will have to wait. How much can we lay the blame to


anyone? Germany has been at the helm. They have not borne the brunt


of this crisis. That has driven their crisis to. Make a 108 turn on


the approach to this crisis, they would need to feel it also at home.


Do you agree? Germany does not feel the pain has it does not have a


crisis at home? Well, Germany is beginning to be uncomfortable to


say the least with the high levels of unemployment.


And should they be uncomfortable? Absolutely. Absolutely. Because


something has to change. But the point is that there is no


magic bullet to resolve the problem from one day to the next there. Are


a whole series of reforms that must be put in place and to resolve the


underlying financial crisis and the underlying economic problems of the


European Union. There is no getting away from that at the same time we


have to take specific measures to help the young people, to make them


more employable, to ensure that they are not cut off from society


whilst they are unemployed. Thank you very much indeed. Well,


this week in the European Commission has been giving advice


to its members in how to get their economies going. Joe Lynam has been


in Strasbourg to meet the movers and shakers.


Including one in particular. Yet if asked to name the President of The


European Parliament, how many of us would know it was a bespekled


German chap called Martin? He represents half a billion Europeans


at global summits like the IMF and G20. He is Europe's top directly


elected official. The signature enacts laws that affect all and he


is well placed to become the new head of the European Commission.


Yet how many of us know his name? How would he describe himself? What


kind of guy are you? President Martin Shulz is arriving. I am


going to spend the day with him. Do you have a busy day today? Always


busy days in Strasbourg. Martin Sh lurbgs z is chairing a


debate about tax havens and tax avoidance. Something that Britain


has a keen interest in. Push for a political commitment on


a simple principle, in 2015, the European Union should have an


automatic exchange of information for all forms of income.


The topic may be tax but it soon gets to Britain's future in the


European Union. I think that the British business


leaders yesterday had it completely right. They said very loud and


clear, to you and to the others, that it will be an economic


disaster to to leave the European Union.


You can probably see the President of The European Commission, Jose


Manuel Durao Barroso and two seats over, Nigel Farage, the scourge of


the European Union is there as well. UK Independence Party got wind that


Newsnight was in town. Suddenly and in breach of parliamentary rules,


Union Jacks appeared on their desks. Looking at officials that work for


the European Commission and Parliament. The highest category


are people that earn a net take- home pay of just over �100,000 a


year. And yet under EU rules they pay tax


of 12%. It is tax fraud Ann absolutely


massive scale. Jose Manuel Durao Barroso, I say, how can that be


deemed fair? They are used to Nigel Farage's views here. So much so,


that Mr Shulz can do a half-decent impression of the UKIP leader.


What are you planning here, Mr Barroso ?! Mr Shulz may anybody


charge of the Parliament but has not hidden his desire to become the


commission President. To achieve it he may have to replace bras Jose


Manuel Durao Barroso. Who we intercepted to meet Mr Shu lz.


What kind of guy is he? I am not prepared... We are doing a


professional of the man. I get the impression he is man of strong


opinions? It is true. He is on the opposite side of the


political divide from you? Opposite? What do you mean by


opposite? He is centre-left, you are centre-right.


Oh! We are, it is true, he is a socialist, I am not, but yes a good


working relationship. OK. I was just giving an interview,


also about HerrKlaus. Are we looking at the current of


the... Are you worried about the scepticism growing? The real threat


to Europe is in difrt. I like the debates, but what we need is a real


political debate about the way that Europe needs to go forward.


But the one country that were talking of retreating from its


relationship with the EU is Britain. So are some people in Europe tiring


of Britain as much as some in Britain are tiring of the EU? Is


the thrrb there a fatigue for the British in the European Union?


Absolutely not. I think that the majority like me


members of the European Parliament, we want to see the UK as a member


of the European Union active within the European Union, we honour the


enormous contribution of the situation to the UK to our success.


Therefore, there is no anglofatigue. There is perhaps a euro fatigue in


the UK. It is purely tactical. Nothing else. This is creating a


problem. From the first day, whatever he did and said, David


Cameron, in my eyes, that is my feeling, had more to do with the


internal situation in the Tory Party and in Europe and as a member


in the UK. There is an exten shall opinion,


that it may not survive it may break up? If it fails, the


political project behind the currency will fail as well.


Therefore we should be prudent in some of the Member States of the


European Union, 50% of young people, younger than 25 years, they are


unemployed, this is a shame. Unacceptable in the richest


continent of the world. Therefore, yes, I understand that people are


angry, but is this a result of European integration? Or is this a


result of a very poor fairness in this distribution of the rich to


welfare within the European Union. What kind of guy are you? We know


about your political background. What kind of person are you if you


were to describe yourself to someone who met you? That is


difficult to describe yourself. (speaks in German.) I think, from a


political point of view... I'm a fighter.


Sharon Bowles works closely are Martin Shulz on key financial


legislation. He can be fiery and thoughtful.


a personal level, he is OK. You can deal with him.


If he replaced Jose Manuel Durao Barroso, what do you make of that


don't think it is an outcome that I would favour there. Are many other


candidates whose ylds that I identify with.


-- ideals, that I identify with. Mr President... The end of a long


day? Not yet. So, ten hours after he arrived in


Strasbourg, Martin Shulz leaves for a flight to brels to address


Europe's 27 leader. And the front pages. We begin with


the Daily Telegraph: It says that the original deal was a �24,000


contract to help lobbyists to help push Fiji business. To the


Independent: Sir Bradley Wiggins out of the Tour de France. Eurozone


crisis as one in four youths is jobless. The Daily Mail: A block


for wild child porn. In the Guardian: Sleaze returns to damage


Tories as MP quits in lobbying scandal. That is all from us


tonight, but there is an important anniversary on Sunday, for which we


need a suitably regal tone. Over to my colleague, Sylvia Peters.


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