:00:21. > :00:27.A flagrant disservice to patients We don't even know who said that,
:00:27. > :00:32.he's referred to in the report as "Mr F", where why are they allowed
:00:32. > :00:36.to hide behind the Data Protection Act. Can the boss of the Care
:00:36. > :00:37.Quality Commission explain how an organisation to serve the public
:00:37. > :00:42.went rotten? The Chancellor of the Exchequer
:00:42. > :00:47.starts the process of privatisation for one of the banks bailed out by
:00:47. > :00:51.the taxpayer. He claims everything is going swimmingly. Let me say
:00:51. > :00:55.this tonight, the British economy is healing. We are moving from
:00:55. > :01:00.rescue to recovery. But is the real achievement of
:01:00. > :01:05.George Osborne to have changed the face of public spending in Britain.
:01:05. > :01:10.And what would the men who fought at D-Day have made of it? Families
:01:10. > :01:13.of soldiers who died on active service are given the right to sue
:01:13. > :01:23.for negligence. Can combat really be reconciled with the Human Rights
:01:23. > :01:25.
:01:25. > :01:29.This is the long and short of it, an organisation supposed to look
:01:29. > :01:32.after the interests of the patient knows there is something wrong with
:01:32. > :01:37.a treatment centre but in order to look after its own interests it
:01:37. > :01:42.doesn't publish its findings. Then a new broom comes in, the
:01:42. > :01:46.instruction to suppress is itself disclosed but with the key names
:01:46. > :01:51.obscured. Cover-up on cover-up. The Health Secretary apologised this
:01:51. > :01:56.afternoon, not that it did anything much to explain quite how it all
:01:56. > :02:00.happened. This is not the first time the
:02:00. > :02:05.spotlight has fallen on healthcare regulator, the Care Quality
:02:05. > :02:10.Commission. It faced criticism over neglect of patients in Mid-
:02:10. > :02:17.Staffordshire, over the treatment of residents at the Winterbourne
:02:17. > :02:21.View and Ashcourt Care Home. An investigation into a number of
:02:21. > :02:26.babies dying at Morecambe Bay Hospital Trust made familiar
:02:26. > :02:31.reading. Families struggling to be heard over bureaucracy. New born
:02:31. > :02:36.James Titcombe died in 2008, his father has led efforts to expose
:02:36. > :02:39.the full extent of failings at the maternity unit, and the role of the
:02:39. > :02:44.regulator ever since. Whilst I recognise there were obviously
:02:44. > :02:48.failures in the regulation, I didn't realise the extent. It is no
:02:48. > :02:53.exaggeration I felt physically ill when I read about the cover-up.
:02:53. > :02:58.Because that was just such an outrageous thing to have happened.
:02:58. > :03:08.Today's report found evidence of a deliberate cover-up of a critical
:03:08. > :03:13.
:03:13. > :03:23.One senior manager, talking about that review is even said to have
:03:23. > :03:28.
:03:28. > :03:31.At a CQC board meeting today, the main whistblower, Kay Sheldon spoke
:03:31. > :03:35.emotionally. I have been subjected to the most appalling treatment.
:03:35. > :03:44.I'm not going to say any more about it. But I think that in itself
:03:44. > :03:49.should shame the organisation. Indeed higher. This is how events
:03:49. > :03:55.unfolded, in November 2008 new born James Titcombe dies at Furness
:03:55. > :04:01.General Hospital. In June 2009 the CQC increased Morecambe Bay's risk
:04:01. > :04:05.rating to red. In April 2010 it decreased the rating to green. In
:04:05. > :04:09.October 2011 the internal review was ordered. In March last year
:04:09. > :04:14.came the apparent decision to delete the internal report.
:04:14. > :04:17.Today's report says the individual concerned denies the allegations.
:04:17. > :04:21.In parliament today the Health Secretary, Jeremy Hunt, apologised
:04:21. > :04:24.to the families. Saying events at Morecambe Bay should never have
:04:24. > :04:30.been covered up and should never have happened in the first place.
:04:30. > :04:35.Later the gloves came off, as he and Shadow Health Secretary, Andy
:04:35. > :04:38.Burnham exchanged criticism. Earlier the Prime Minister said
:04:39. > :04:42.that there should be always support for whistblowers, and he was right
:04:42. > :04:52.to say so. But there are serious doubts about whether that has
:04:52. > :04:56.
:04:56. > :04:59.happened in this case. There were concerns raised by another
:04:59. > :05:05.whistleblower and there were questions raised about her
:05:05. > :05:11.character. Can the minister say there was appropriate concerns
:05:11. > :05:14.raised. Jeremy Hunt turned the tables on Labour who set up the CQC
:05:14. > :05:18.in the first place. He talks about accountability, the opposition if
:05:18. > :05:20.they were to give confidence that they really took the issues raised
:05:20. > :05:23.today seriously, they would recognise it was fundamentally
:05:23. > :05:29.wrong to set up an inspection regime, not being done by
:05:29. > :05:32.specialists, where the same person is inspecting a dental clinic, a
:05:32. > :05:40.slimming clinic, a hospital or GP practice perhaps in the same month.
:05:40. > :05:44.That may have contributed to why it was that in 2009 the CQC decided
:05:44. > :05:48.not to investigate the maternity deaths in Morecambe Bay. There was
:05:48. > :05:52.clearly some battlement amongst MPs today as to why the names of senior
:05:53. > :05:56.figures at the CQC had been redacted from the report. Whether
:05:56. > :05:59.this was down to some possible legal action by the individuals
:05:59. > :06:04.involved, or under a constraint due to the data protection legislation
:06:04. > :06:07.as the CQC said earlier. This feels like a public authority hiding
:06:07. > :06:12.behind the Data Protection Act. It is very common. But you have to go
:06:12. > :06:17.by what the law says. And the law is very clear, you have to process
:06:17. > :06:20.data fairly, you have to take into account the people's expectation of
:06:20. > :06:26.confidentiality, patient data obvious, but officials, there you
:06:26. > :06:28.have to apply a public interest test. I'm not convinced that the
:06:28. > :06:32.Care Quality Commission have been correctly advised. I think they are
:06:32. > :06:37.going to have to look at this again. We have to have accountability when
:06:37. > :06:40.there is such poor practice in our public bodies. How can people be
:06:40. > :06:45.allowed to walk away with full pensions, no investigation into
:06:45. > :06:49.their conduct or blot on their copy book? Allowing them, potentially,
:06:49. > :06:55.to walk into a job with another regulator or the NHS. There is now
:06:55. > :06:58.a new management team in place at the CQC. The former chairman, Dame
:06:58. > :07:03.Jo Williams, and former chief executive, Cynthia Bower, left the
:07:03. > :07:07.organisation last year. An independent public inquiry,
:07:07. > :07:12.Stafford-style, is now under way. The Trust itself also has a new
:07:12. > :07:16.board which today acknowledged past failings and said it is committed
:07:16. > :07:22.to providing safe care. The CQC hopes today's report draws a line
:07:22. > :07:26.in the sand for them. But as the patients' champion, the regulator
:07:26. > :07:29.must reassure the public it will act differently from now on.
:07:29. > :07:33.David Behan is the chief executive of the Care Quality Commission,
:07:33. > :07:39.Jamie Reed is a Shadow Health Minister and Heather Wood is a
:07:39. > :07:42.former NHS manager who worked at the CQC's precursor, the Healthcare
:07:42. > :07:47.Commission, where she led the investigation into avoidable deaths
:07:47. > :07:50.at Stafford hospital. She went on to work at the CQC, but left in
:07:50. > :07:56.2010 after the national investigations team was abolished.
:07:56. > :08:00.Can I talk to you for a minute first, David Behan, why have you
:08:00. > :08:04.excluded these names? The first thing to say is we are committed to
:08:04. > :08:08.openness and transparency in our work. This is why I commissioned
:08:08. > :08:11.this report in the first place. This isn't a problem we want. We
:08:12. > :08:15.want to be absolutely clear about what we did and we are accounting
:08:15. > :08:18.for this, the facts are not in dispute. It has come to the
:08:18. > :08:23.question you asked, I was advised to put people's personal data would
:08:23. > :08:27.be a breach of their rights. We decided today that we will review
:08:27. > :08:31.that legal advice and we have commissioned a review of that legal
:08:31. > :08:34.advice to see if we can put this information into the public domain.
:08:34. > :08:40.We do not want this problem. independent commissioner says it is
:08:40. > :08:45.not a problem at all? Well the only thing I can say, Jeremy, is we
:08:45. > :08:49.commissioned this report, we published it today. He's more
:08:49. > :08:52.likely to know? We published it today warts and all. You excluded
:08:53. > :08:55.the names? We have been open and transparent about where we failed
:08:56. > :08:59.the people in Morecambe Bay, we have apologised for that today. We
:08:59. > :09:04.are looking and reviewing the advice we have been given to see if
:09:04. > :09:08.we can put that right. You accept your legal advice was duff?
:09:08. > :09:11.accepted the legal advice I was given, I acted in good faith.
:09:11. > :09:14.Information Commissioner is surely likely to know? I have listened to
:09:14. > :09:17.what the Information Commissioner has said. He's saying review the
:09:17. > :09:20.advice, I have said earlier this evening we will review the advice.
:09:20. > :09:25.He said unambiguously the advice you have been given is wrong and
:09:25. > :09:28.that you are hiding behind it? We are not hiding behind it.
:09:28. > :09:32.wouldn't have commissioned the report in the first place, we are
:09:32. > :09:35.clear we need to account for what we did. You will published the
:09:35. > :09:38.names tomorrow will you? I will take legal advice tomorrow on
:09:38. > :09:44.publishing the names. You have just been told by the Information
:09:44. > :09:47.Commissioner it's a croc of rubbish? I'm committed to openness
:09:47. > :09:50.and transparency. No you are not, if you were committed to that you
:09:50. > :09:52.would publish the names? I have been advised legally of the
:09:53. > :09:56.difficulties in publishing the names and putting people's personal
:09:56. > :10:00.information out there. Legal advice is never binding, it is up to you
:10:00. > :10:04.to make a decision to accept it or not? It is and on the advice we
:10:04. > :10:08.have published the facts. As people have recorded today all the facts
:10:08. > :10:11.are in the public domain, with the exception of people's names. I have
:10:11. > :10:15.acted on the legal advice and tomorrow we will review it. Despite
:10:15. > :10:18.the fact you have been told by the one man in the country who is in
:10:19. > :10:23.the position to know exactly what the law says, and has said your
:10:23. > :10:26.legal advice is wrong, if they come back tomorrow and say the same
:10:26. > :10:30.thing, you will act the same? will take different legal advice,
:10:30. > :10:34.not the same people who advised me. We will take alternative legal
:10:34. > :10:37.advice to make sure we can act in openness and transparency. We want
:10:37. > :10:42.to put it right. I have an important job and people need trust
:10:42. > :10:45.and confidence in what we do. My job is to restore that trust and
:10:45. > :10:49.confidence in CQC. Can you tell me as the new broom who came in, what
:10:49. > :10:52.went wrong there? I think the story that is revealed in the report is
:10:52. > :10:57.one of a dysfuntional relationship between the board and the senior
:10:57. > :11:00.leadership. I think that is what led to this absence of openness and
:11:00. > :11:05.transparency. And we're determined to put this right. We published a
:11:05. > :11:07.new strategy. We have replaced the board, we are bringing in a new
:11:08. > :11:12.executive team. It was rotten, wasn't it? There were changes we
:11:12. > :11:15.needed to make. What was happening was not acceptable, the model as
:11:15. > :11:18.the Secretary of State stated was not the right model and we are
:11:18. > :11:24.making changes to that and we have begun those changes, we are
:11:24. > :11:26.determined to see them through. seem to suggest it is some sort of
:11:26. > :11:30.managerial malfunction. There was something deeply rotten in the
:11:30. > :11:33.organisation, wasn't there? culture that is demonstrated by
:11:33. > :11:37.this report is not the culture I want to see in any organisation I'm
:11:37. > :11:40.responsible for. Why can't you call a spade a spade. You don't, what
:11:40. > :11:45.don't you want to see? I want to see an organisation. What don't you
:11:45. > :11:48.want to see that you found there? don't want to see people not
:11:48. > :11:51.declaring reports in the public domain. I want us to be open and
:11:51. > :11:56.transparent and account for what we do with people trusting our
:11:56. > :12:01.judgments. Let's broaden this out a bit if we may, do stay with us. Are
:12:01. > :12:07.you surs priced by what has been revealed? I'm not one bit surprised.
:12:07. > :12:14.I mean what has been revealed is totally shocking. But in a way I'm
:12:14. > :12:20.pleased that the lid has final ly kufpl -- finally come off the
:12:20. > :12:29.rotten edifice that was CQC. have used the word "rotten",
:12:29. > :12:33.disputed a moment or two ago. Why is it rotten? When CQC was set up
:12:33. > :12:39.originally I'm sure it was in the business of suppressing anything
:12:39. > :12:44.that would ever look like another Mid- Staffs. I would like to point
:12:44. > :12:49.out I think the CQC was dancing to the tune from the Department of
:12:49. > :12:55.Health and the top of the NHS. are we talking about? We are
:12:55. > :12:59.talking about 2009. Jamie Reed, that was when your party was in
:12:59. > :13:03.Government. It is explicit the link there. It has been made by other
:13:03. > :13:05.people, that this was a corrupt relationship between your
:13:06. > :13:09.Department of Health and the Care Quality Commission? This is an
:13:09. > :13:13.allegation that has been made time and time again. Let's not forget
:13:13. > :13:17.the context. Maybe there is a reason for it. Let's not forget the
:13:18. > :13:23.context of today's report. When the order to cover up was made within
:13:23. > :13:26.the CQC that was after Francis, it was during Francis inquiry, the
:13:26. > :13:30.three-year Francis inquiry that looked at the allegations about the
:13:30. > :13:34.cosy relationships implied found no evidence, in the same way that the
:13:34. > :13:37.Davies Report has found no evidence at all to suggest the kind of
:13:37. > :13:40.relationship between the centre and the CQC was in place. Just because
:13:41. > :13:44.there is no evidence found and published, as we have already seen
:13:44. > :13:48.today, doesn't necessarily mean it didn't exist? It this has been
:13:48. > :13:52.investigated time and time again. As I repeat, the allegations aren't
:13:52. > :13:56.new. Robert Francis looked at this over a three-year period, he looked
:13:56. > :13:58.for the evidence. Extensive evidence was given. It was perhaps
:13:58. > :14:01.the most broad-ranging investigation of its type this
:14:01. > :14:06.country has ever seen. Those allegations didn't stack up.
:14:06. > :14:09.have come in as a new broom, do you see any evidence that there was
:14:10. > :14:12.something wrong with the relationship between the Department
:14:12. > :14:16.of Health under Labour and your organisation? I don't think that's
:14:16. > :14:20.the case in our report, Jeremy. Clearly there was a policy.
:14:20. > :14:24.asking you about what you found? Clearly there was a policy to move
:14:24. > :14:27.towards foundation trust, that is a policy of the last Government and
:14:27. > :14:29.this Government. That is what has been happening. I think this
:14:29. > :14:35.independent report that we commissioned has not found any
:14:35. > :14:38.evidence of interference in any way. If they found it they would have
:14:38. > :14:42.mentioned it. If it wasn't corruption what was the problem?
:14:42. > :14:45.There was clearly a problem with the performance of the CQC. They
:14:45. > :14:50.were just incompetent? Let's have a look at the Government's response
:14:50. > :14:53.to this report. There may be that we had the wrong people in the
:14:53. > :14:56.wrongs positions who couldn't do the job asked of them. There was
:14:56. > :15:00.clearly issues with the trust and the trust management as well.
:15:01. > :15:07.us how these inspections were often carried out, you say you are not
:15:07. > :15:11.surprised? I'm not surprised. I just would like to add that maybe
:15:11. > :15:15.Francis's conclusions might have been a bit different if, in a way,
:15:15. > :15:20.everyone had given an entirely accurate account of things. For
:15:20. > :15:23.example witness after witness at the top of the CQC stood up and
:15:23. > :15:29.said their methodology was robust and registration was done
:15:29. > :15:37.rigorously. We now know that simply wasn't true. So I'm sorry, I don't
:15:37. > :15:41.think one can take the fact that Francis said he didn't find, for
:15:41. > :15:44.example, evidence of bullying by David Nicholson. I would suggest he
:15:44. > :15:51.disregarded some of the evidence he had and he didn't look hard enough.
:15:51. > :15:56.But in my view, of course CQC came in, it completely destroyed the
:15:56. > :16:01.specialist teams, set about this ridiculous generic model of sending
:16:01. > :16:08.anybody into hospital regardless of their background. You know and then
:16:08. > :16:15.it is surprised when things don't show up. Even today this report,
:16:15. > :16:19.partly says that the Trust should have given CQC the earlier
:16:19. > :16:23.specialist report that had been done, that had criticised maternity.
:16:24. > :16:30.I think any team that was worth its salt would have found that report
:16:30. > :16:35.for themselves. Hang on a second, this idea that someone, can be
:16:35. > :16:39.inspecting a dental practice one moment, a slimming clinic the next,
:16:39. > :16:43.some apparatus in a hospital the next, this is ridiculous, isn't it?
:16:43. > :16:47.I agree with you Jeremy, that is why I'm changing it. I have said
:16:47. > :16:52.this from day one, we will move from a generic model to specialist
:16:52. > :16:55.model. Professor Sir Mike Richards will be the first inspector of
:16:55. > :16:59.hospitals. A respected clinician and we will change the model we
:16:59. > :17:03.have in place. Who told you that was supposed to be done like that?
:17:03. > :17:08.Nobody told me. What I have said is we are changing the model of
:17:08. > :17:12.inspection. I inherited an organisation that had a generic
:17:12. > :17:15.model of inspection and we are going to change it. Who created
:17:15. > :17:17.that model? The previous organisation, the previous board of
:17:17. > :17:22.CQC will have to accept responsibility and the executive
:17:22. > :17:28.team for the creation of the model. As will the Labour Government?
:17:28. > :17:34.model of inspection is being used today. There is a review going on
:17:34. > :17:37.into 14 Hospital Trusts, one of which is my own Hospital Trust,
:17:37. > :17:43.north Cumbria University Hospital Trust and this generic model is
:17:43. > :17:48.still being used. You started it? It is made clear by David that the
:17:48. > :17:51.CQC, as the independent regulator. Let's not forget before 1996 there
:17:51. > :17:54.was no hospital regulation whatsoever, they developed this
:17:54. > :17:57.model. One final point, does Labour want the names published tomorrow?
:17:57. > :18:00.We made this clear today in the House of Commons we do want the
:18:00. > :18:04.names published. We want to know who knew what about this in the
:18:04. > :18:06.Department of Health. We want to know about the details of the
:18:06. > :18:09.conversations between the CQC whistleblower and the former
:18:09. > :18:12.Secretary of State. We want to know all the details of this. We don't
:18:12. > :18:17.believe now is the time to draw the line under this, there is a lot
:18:17. > :18:23.more that needs to be answered. Thank you very much all of you.
:18:23. > :18:31.In a moment, can you really fight a war if human rights legislation is
:18:31. > :18:35.applied on the battlefield? Unlike Gordon Brown, who wouldn't be seen
:18:35. > :18:39.dead in them, George Osborne has been wearing a bowtie and dinner
:18:39. > :18:43.jacket since his nanny dropped him off at nursery school. He put them
:18:43. > :18:47.on again tonight to tell the plutocrats of the City of London
:18:47. > :18:52.what he will do with Lloyds Bank, which Gordon Brown spent millions
:18:52. > :18:57.of our money buying a large chunk of. -- billions of our money buying
:18:57. > :19:00.a chunk of. Lloyd's will be sold, it will be privatised, by an
:19:00. > :19:03.institutional placing, so big pension funds get the first grab at
:19:03. > :19:09.buying some of the shares. Eventually down the line, when
:19:09. > :19:14.that's worked, if it has worked, we might have a "tell Sid" moment,
:19:14. > :19:18.where they go to ordinary people and allow them to buy Lloyd's. With
:19:18. > :19:24.RBS there has been vigorous debate behind the scenes and between
:19:24. > :19:28.policy makers, RBS, we have an 81% stake in that, it is massive. That
:19:28. > :19:34.debate has staid the Chancellor's hand from any sign of a politically
:19:34. > :19:39.rushed attempt to get rid of it before the election. I don't want a
:19:39. > :19:45.quick sale of our RBS shares. I want the right sale, the right sale
:19:45. > :19:50.for the British people. I will only sell our stake in RBS when we feel
:19:50. > :19:56.the bank is fully able to support our economy and we get good value
:19:56. > :20:00.for you the taxpayer. In our judgment, when it comes to RBS that
:20:00. > :20:06.moment is some way off. So instead of a rapid sale they will have a
:20:06. > :20:11.rapid review of a proposal to split RBS into a called good bank/bad
:20:11. > :20:17.bank, like with New York. You take the -- Northern Rock. You take the
:20:17. > :20:24.good debts of RBS, which they have signalled is Ulster Bank and some
:20:24. > :20:29.property loans and you sink it into the bank of Britain and the rest of
:20:29. > :20:33.it can be sold off easily. It will be announced tomorrow that RBS is
:20:34. > :20:39.in line of another �12 billion for capital. All the British banks have
:20:39. > :20:42.to raise �25 billion extra. RBS has the biggest problem. You can't sell
:20:43. > :20:47.a bank rapidly when it is already impaired and needs to raise capital.
:20:47. > :20:51.So they are not. Did he have anything to say about MPs' calls
:20:51. > :20:52.for bankers to be sent to jail? reported on this a bit tonight.
:20:52. > :20:57.Overnight the Parliamentary Commission has come forward with
:20:57. > :21:06.the proposal to make new law, so that specific people, in specific
:21:06. > :21:14.banks are sent to jail if they fail on specific duties. In a way this
:21:14. > :21:18.significant flals the end of struck -- signifys the end of structural
:21:18. > :21:21.banks remedies. Some people in the City have welcomed it. And the
:21:21. > :21:24.Chancellor certainly did today. have already supported the
:21:24. > :21:31.recommendations on new criminal sanctions and cancelling bonuses
:21:31. > :21:34.where banks are bailed out. And let me be clear, where legislation is
:21:34. > :21:39.needed the Banking Bill, currently before parliament, will be amended
:21:39. > :21:43.to ensure the recommendations can be quickly enacted. The other thing
:21:43. > :21:46.they have done is to tell the Office of Fair Trading to bring
:21:46. > :21:50.forward a review. They will look at the impact on the high street and
:21:50. > :21:53.on lending to small businesses of breaking up Lloyd's, breaking up
:21:53. > :21:57.RBS, bringing new entrants. They will do a bit of rapid structural
:21:57. > :22:03.reform of high street lending. They realise there is not enough lending
:22:03. > :22:07.to banks. The other bit of news is this was the swansong of Mervyn
:22:07. > :22:14.King, the Governor of the Bank of England, he has an elevated to the
:22:14. > :22:17.peerage, you will be pleased to know. He promised to do "ruthless
:22:17. > :22:22.truth-telling". Maybe now for the first time ever he might sit in the
:22:22. > :22:25.studio and you can interview him now. I look forward to it. I'm
:22:25. > :22:29.sorry you weren't there I would have liked to have seen that.
:22:29. > :22:34.George Osborne has been running the economy for the past three years,
:22:34. > :22:38.he's not exactly the most popular politician in the country. It's
:22:38. > :22:42.quite clear his strategy for sort ought the economy hasn't worked or
:22:42. > :22:46.yet at least. But he has made huge changes, not least to the state
:22:46. > :22:50.itself, which all the other parties in politics are having to adjust to.
:22:50. > :22:57.Is it possible that his impact may be far greater than most of us
:22:57. > :23:00.recognise? Time was when the Chancellor,
:23:00. > :23:05.George Osborne, was accused of cutting the British state to
:23:05. > :23:08.ribbons. But with the Labour Party's recent pledge to match the
:23:08. > :23:13.Chancellor's spending plans, the path cut by George Osborne's
:23:13. > :23:18.scissors looks to become permanent. Possibly unintentionally, the
:23:18. > :23:23.Government may have cut a new shape for the British state. The numbers
:23:24. > :23:27.you are going to get next week are the first pitch by the governing
:23:27. > :23:32.parties ahead of the next general election. And actually, really, it
:23:32. > :23:36.is probably the first time ever that governing parties have gone
:23:36. > :23:42.into an election telling the public they will be cutting their public
:23:42. > :23:46.services and exactly where. He's looking to save something like an
:23:46. > :23:52.additional �10 billion in public service spending for the year
:23:52. > :23:55.2015/16, the year directly after the next election. That's �10
:23:55. > :24:01.billion on top of what have been five years of the steepest spending
:24:01. > :24:06.cuts we have ever seen. But this time it is getting quite vicious.
:24:06. > :24:08.Newsnight understands that in order for the Treasury to cajole various
:24:08. > :24:13.departments across Whitehall into settling their cuts, they have what
:24:13. > :24:16.has become known as, across the Government, a Treasury blacklist.
:24:16. > :24:20.So this is all sorts of embarrassing stories that they will
:24:20. > :24:25.allow to be released as and when they want to force departments to
:24:25. > :24:29.settle. So you have already heard about the MoD having more horses
:24:29. > :24:33.than soldiers, but did you know that Vince Cable's department is
:24:33. > :24:40.supposed to support a bursary for the performing arts and that Philip
:24:40. > :24:44.Hammond owns quite a few goats! This is the problem, the Government
:24:44. > :24:47.has ring-fenced department central to the political message.
:24:47. > :24:51.International development and health at the top here. This has
:24:51. > :24:56.meant deep cuts elsewhere. Look further down this chart. If these
:24:56. > :24:59.ring-fences are kept in place then according to analysis by the
:24:59. > :25:03.Resolution Foundation, Britain's Foreign Office is slashed by 65%
:25:03. > :25:06.and the Home Office nearly 50% smaller.
:25:06. > :25:11.For the Foreign Office it might have seen its budget cut by as much
:25:11. > :25:14.as a half, where as somewhere like the Department for International
:25:14. > :25:18.Development could have seen its budget go up by a quarter. The
:25:18. > :25:23.department for health simply is a ring-fenced budget. It looks like
:25:23. > :25:27.it is going to grow to become as much as a third of public spending.
:25:27. > :25:31.There are many people across Whitehall who agree that ring-
:25:32. > :25:34.fencing some departments is very damaging for the other ones.
:25:34. > :25:37.Including, apparently, the Chancellor George Osborne. He is
:25:37. > :25:43.said to be well aware of the problems that are beginning to be
:25:43. > :25:46.caused. There are big ring-fences in public spending. The biggest is
:25:46. > :25:49.the National Health Service, effectively pension spendinging is
:25:49. > :25:56.also ring-fenced. Put those two together and you have a very large
:25:56. > :26:00.chunk, a very large chunk of public spending not being cut back. That
:26:00. > :26:04.means just arithmetically if you want to save two or three per cent
:26:04. > :26:09.across the piece, if you are protecting a third or total, you
:26:09. > :26:15.need to take 4-6% from everything else. So a refashioned state, but
:26:15. > :26:19.is this job of cutting back the state nearly done? There was an
:26:19. > :26:24.expectation back in 2010/11 when the coalition came in that this was
:26:24. > :26:28.going to be a one-parliament issue, that we would get the spending
:26:28. > :26:31.fixed by the time of the next election the economy would be back
:26:31. > :26:37.on track and we would be discussing different things. It is still
:26:37. > :26:42.around. To meet George Osborne's deficit target, as well as 2015's
:26:42. > :26:46.�11 billion of cut, there will be �13 billion in each subsequent year.
:26:47. > :26:51.The time may have come for something completely different.
:26:51. > :26:58.Every year a Government spends about �700 billion on the state.
:26:58. > :27:02.Half of that is this expenditure. It is departmental and it is so far
:27:02. > :27:09.very heavy cut by this Government. What about this, it is more than
:27:09. > :27:13.half and actually is rising. It is called AME, but you could describe
:27:13. > :27:16.it as discretionary spending. It has many pots within it, but a
:27:16. > :27:22.large part of it is welfare payments. The kind of payments that
:27:22. > :27:26.go up when people have a demand for them. This pot so far hasn't been
:27:27. > :27:32.capped. But now all three parties agree that if you want to stop huge
:27:33. > :27:36.damage to departments, you have to look here. There is a clear trade
:27:36. > :27:40.off take more and more money out of Government departments and either
:27:40. > :27:43.increasing taxes or cutting various benefits. Now, clearly any
:27:43. > :27:47.Government coming in will use a combination of measures, but to
:27:47. > :27:50.give you an illustration of the sorts of issues we are talking
:27:50. > :27:53.about here. In order to maintain the current rates of cuts in
:27:54. > :27:57.departmental spending, not doing any more than that, just
:27:57. > :28:05.maintaining the current pace will take about �10 billion of further
:28:05. > :28:10.welfare savings or tax rises in 2016/17 and 17/18. That is a 10%
:28:10. > :28:15.cut in the tax credit budget. We are looking at �9 billion being
:28:15. > :28:18.taken out of tax credits by 2018, that is a further hit that tax
:28:18. > :28:24.credits can't probably stand. If you think about tax it is 1%
:28:24. > :28:28.increase in the standard rate of VAT, increasing to 21% in 2016,
:28:28. > :28:32.would raise �11 billion over two years. In the next parliament,
:28:32. > :28:37.politicians will reach for these different kinds of levers. Because
:28:37. > :28:40.try as this current Government might, while they may have reshaped
:28:40. > :28:45.public spending, by just cutting departments they have struggled to
:28:45. > :28:49.bring down its cost. But none the less, in making the Labour Party
:28:49. > :28:53.agree to welfare cuts, this Chancellor has changed the shape of
:28:53. > :29:03.Britain's political debate. And in just a few years he's also been
:29:03. > :29:05.
:29:05. > :29:10.changing the shape of the state. That was Allegra st. Tratton
:29:10. > :29:14.reporting there. We are joined by the previous
:29:14. > :29:20.adviser for Ed Miliband and now work for a charity focusing on
:29:20. > :29:23.services for children. The former director of the Centre for Policy
:29:23. > :29:27.Studies. And Danny Finkelstein is executive editor at the Times. You
:29:27. > :29:30.can start, how significant do you think is this achievement in
:29:30. > :29:35.changing the pattern of public spending? I think we have seen a
:29:35. > :29:40.big change in the debate on public spending, just in the last two week,
:29:40. > :29:44.with Ed Balls saying, in a rather muted way, that he's going to try
:29:44. > :29:47.to match or start from George Osborne's position and then Ed
:29:47. > :29:51.Miliband coming out and saying that on welfare. It is an
:29:51. > :29:54.acknowledgement there is no going back, that it is impossible for any
:29:54. > :29:57.in coming Government to start spending a lot more money. I think
:29:57. > :30:01.there has been a big shift in the responsibilities of the state and
:30:01. > :30:05.in the cost to the date already. We will see more of that. It is a huge
:30:05. > :30:09.change isn't it, when you look at what your party, what the Labour
:30:09. > :30:14.Party used to talk about. Only three or four years ago. Only
:30:14. > :30:18.actually about a year ago on the question of child benefit, for
:30:19. > :30:22.example. This is an amazing change? Danny's right. The big issue, there
:30:22. > :30:25.is no debate here around the size of the state and where it needs to
:30:25. > :30:29.get to and the fact it needs to be smaller. I think all the parties
:30:29. > :30:31.are agreed on that. I think where the Labour Party would find
:30:31. > :30:37.difference with George Osborne though is in the way he's making
:30:37. > :30:41.these cuts. I think he's making a couple of biggerors. The first is
:30:41. > :30:45.really around equity. And he's doing things that are politically
:30:45. > :30:49.savvy around welfare. But aren't necessarily fair. So he's
:30:49. > :30:52.protecting pensioner benefits, some of which go to really affluent
:30:52. > :30:58.pensioners and it is really working families that are taking the brunt
:30:58. > :31:04.of the cuts. Four out of every five pounds of welfare cuts are
:31:04. > :31:08.happening to families in work that's very tough. The second area
:31:08. > :31:11.where I think he's making big mistake, is he's making cuts that
:31:11. > :31:15.save money in the short-term but will store up problems for the
:31:15. > :31:19.state in the long-term. By that I mean things like the Future Jobs
:31:19. > :31:24.Fund, spending on job guarantees for unemployed young people. We
:31:24. > :31:27.know that youth unemployment carries huge cuts. Cuts to things
:31:27. > :31:32.like early years centres and children's centres. That stores up
:31:32. > :31:36.costs for the state. Cuts to social care that puts pressure on the NHS.
:31:36. > :31:39.You are shaking your head, it doesn't feel like that to you?
:31:39. > :31:43.premise of this conversation is we have seen a radical reshaping of
:31:43. > :31:47.the state, we just haven't. There has been a reshaping of public
:31:47. > :31:52.spending clearly? It is moved in the sense that it is moved around.
:31:52. > :31:57.Departmental spending. OK, but this is no reshaping of the state.
:31:57. > :32:01.George Osborne came to power after a decade in which Gordon Brown had
:32:01. > :32:06.allowed public spending to explode. Health spending had nearly doubled
:32:06. > :32:08.in ten years. Clearly and one out of every four pounds was debt was
:32:08. > :32:12.being borrowed in order to fund that. It is interesting, looking
:32:12. > :32:15.back, actually, there is a statement that George Osborne
:32:15. > :32:19.issued as the criteria for his first Spending Review in 2010,
:32:19. > :32:23.after the election. And the first question was in effect should the
:32:23. > :32:28.state be funding this activity at all? He was attempting at that
:32:28. > :32:33.point and in certain low the rhetoric there to reverse this
:32:33. > :32:36.discussion -- certainly in the rhetoric to say should Government
:32:36. > :32:41.be doing that? We haven't seen departments closed or any big
:32:41. > :32:46.changes since then. We see the debt continuing to rise. Go on. You have
:32:46. > :32:51.to have political consent, but there have been very big changes,
:32:51. > :32:56.tuition fees is a very big change. Moving something to basically
:32:56. > :32:59.private payment. Privatisation of prisons. The NHS reforms. It is
:32:59. > :33:03.interesting though, because tuition fees, it is a good example, some
:33:03. > :33:07.experts are saying because the Government's made such optimistic
:33:07. > :33:11.assumptions about its new policy, it could end up costing a lot more
:33:11. > :33:14.than the Government has predicted. I want to bring in a visual aid
:33:14. > :33:19.here, if we may. Let's have a look at this, a graph shortly will
:33:19. > :33:23.appear on the wall here. There it is, changing state spending. It is
:33:23. > :33:28.almost impossible to read in rather brilliant fashion. But actually I
:33:28. > :33:32.think viewers at home can see it. But the green on the left of it,
:33:32. > :33:37.that's NHS spending. Under this current configuration, look it goes
:33:37. > :33:40.up from about a quarter to over, nearly a third, almost exactly a
:33:41. > :33:44.third, now that's what happens, isn't it, when you have some areas
:33:45. > :33:47.that are ring-fenced and other areas that aren't? This was
:33:47. > :33:52.politically mandated. The British people wanted that. They wanted to
:33:52. > :33:55.protect schools, they wanted to protect...What Do you mean they
:33:55. > :34:00.wanted to? I don't think they would have elected the Conservative Party
:34:00. > :34:03.even as a minority component in the Government without that promise.
:34:03. > :34:07.But it stall everything else? shifts expenditure into a service
:34:07. > :34:12.that lots of people value hugely. It means you have to do things like
:34:12. > :34:17.cap welfare, frankly. It is an area where spending is inevitably going
:34:17. > :34:21.to go on rising,, the structural reforms we have seen have not cut
:34:21. > :34:25.cost, they haven't actually looked at what the health service is doing.
:34:25. > :34:29.And whether it needs to be doing what it is doing. It is simply
:34:29. > :34:34.building. The problem there is that when you have an area like that for
:34:34. > :34:40.spending it will go on and on and getting bigger. It is unsustainable
:34:40. > :34:43.isn't it? I completely think it is. I believe that this next round of
:34:43. > :34:47.spending in 2017, is going to require a big look at functions.
:34:47. > :34:50.But you have to take the public with you each step of the way. And
:34:50. > :34:54.there have already been big changes in functions. Capping welfare, a
:34:54. > :34:58.battle that has been won, capping people's welfare, benefit bills,
:34:58. > :35:01.the reform for housing benefit, the move to universal benefits. You
:35:01. > :35:05.can't do everything in one period in Government. You have to take
:35:05. > :35:10.people with you as you do it. Where I think we are nearly at the limit
:35:10. > :35:13.of public acceptance of this, but public acceptance has been retained.
:35:13. > :35:17.One other thing, one other effect, public spending hasn't really
:35:17. > :35:27.reduceed very much. But what has happened, let's look at this chart
:35:27. > :35:31.here. What it shows is the Green Line is people who average spending
:35:31. > :35:33.per non-pensioner, and the pink line is pensioners. It is obvious
:35:33. > :35:36.who is doing well, the people receiving from the state are
:35:36. > :35:41.getting wealthier and wealthier, and the people paying in are
:35:41. > :35:46.getting poorer and poorer? I think that is right. I think it raises a
:35:46. > :35:50.real issue which is pensioner benefits, some going to affluent
:35:50. > :35:53.pensioners is being protected. are a tiny minority. This is a
:35:53. > :35:57.trivial amount of money involved here. There are lots of pensioners
:35:57. > :36:00.who earn in excess, who have earnings in excess of the medium
:36:00. > :36:04.wage. That is something that I think Labour has some space to talk
:36:04. > :36:08.about now, now that the Labour Party has said. How many?Well they
:36:08. > :36:12.have said they would look at cutting Winter Fuel Payment for the
:36:12. > :36:19.top 5% of pensioner. I think they could go bigger with that and they
:36:19. > :36:22.could save more money on that. can't go on like this h people
:36:22. > :36:27.working are paying for people not working? The Government is
:36:27. > :36:31.proposing a universal pension, for all its philosophical merits and it
:36:31. > :36:34.will guarantee to benefit those who save and end means testing for
:36:34. > :36:38.pensions, it will be extremely expensive to fund. With rising
:36:38. > :36:42.numbers of pensioners and only slight change to pensionable age
:36:42. > :36:45.this is an explosion of state spending. For people who have
:36:45. > :36:52.become pensioners there is political scope to make changes. If
:36:52. > :36:55.you take money away from pensioners good luck to you. It is very easy
:36:55. > :36:58.to propose policies that sound completely correct and get no
:36:59. > :37:02.political consent for them. The trick here is to bring public
:37:02. > :37:05.spending down whilst keeping the public at least broadly on side.
:37:05. > :37:10.And you need, with pensions, you are going to need to do this as
:37:10. > :37:14.people become pensioners. The problem is pensioners vote?
:37:14. > :37:19.Absolutely. Try to take money away from current he can sitsing tension
:37:19. > :37:23.pensioners, I can see the economic case for it, you can summon up the
:37:23. > :37:27.courage and do t but really you have to be politically sensible.
:37:27. > :37:30.Sooner or later politicians have to get off their knees and create a
:37:30. > :37:34.state for somebody other than those who depend on them? Margaret
:37:34. > :37:37.Thatcher when she fought against the trade unions, she did to win
:37:37. > :37:40.against them not just to fight them. It is to get public spending down
:37:40. > :37:43.and keep the public on side. Not merely to say this is how you slash
:37:43. > :37:47.it. We are not getting public spending down. George Osborne is
:37:47. > :37:51.very worried about keeping the public on side, clearly, and
:37:51. > :37:55.building up to the next election, but he clearly has not tackled the
:37:55. > :37:59.debt problem or the size of the state. He hasn't reconfigured the
:37:59. > :38:03.argument as a radical Government. We have to put the NHS figures in
:38:03. > :38:08.context as well. It is a tight settlement for the NHS. The best
:38:08. > :38:13.minds in the NHS should be focused on how you reconfigure, as Jill
:38:13. > :38:16.said. We have a massive structural reform going on that is distracting
:38:16. > :38:20.managers away from reconfiguring what they do and saving money. That
:38:20. > :38:23.is a big problem when it comes to the NHS. The Defence Secretary is
:38:23. > :38:26.worried, the Supreme Court ruled today that the families of soldiers
:38:26. > :38:32.killed in Iraq are free to sue the Government for failing to protect
:38:32. > :38:35.them as well as they might have. Inevitably it invoked European
:38:35. > :38:39.human rights legislation and whether it covered them when they
:38:39. > :38:43.were sent to fight abroad. Being a soldier is, afterall, a slightly
:38:43. > :38:52.dangerous job. That is sort of the point. The biggest protection of
:38:52. > :38:57.all would be never to put them in harm's way anywhere. The soldiers
:38:57. > :39:01.who fought at D-Day would never have imagined it. What precisely
:39:01. > :39:05.constitutes caring for your warriors. To send a man to fight
:39:05. > :39:10.without a weapon is one thing. Is it even possible that some missions
:39:10. > :39:14.might be considered so hazardous they render the Government, the
:39:14. > :39:21.taxpayer, liable. The claims relate to the deaths of two British
:39:21. > :39:24.soldiers killed by IODs, while travelling in the heavily-
:39:24. > :39:30.criticised, light low- armoured Snatch Land Rover vehicles, and the
:39:30. > :39:34.other, who died in a friend low- fire incident travelling in a
:39:34. > :39:38.Challenger Tank. The Supreme Court ruled that the soldiers were within
:39:38. > :39:41.the UK jurisdiction for the purposes of the European Convention
:39:41. > :39:47.on Human Rights. And the Ministry of Defence's argument that they
:39:47. > :39:52.should be covered by called combat immunity was also rejected.
:39:52. > :39:59.Previously human rights protection only applied to military bases and
:39:59. > :40:03.not to the battlefield. concerns are about the wider
:40:03. > :40:07.implications that this will have for the safety and efficiency of
:40:07. > :40:11.our forces in combat in the future. It places some really big questions
:40:11. > :40:15.about how we are going to be able to engage in operations in the
:40:15. > :40:25.future. So will these obligations placed on Government really
:40:25. > :40:30.
:40:30. > :40:35.restrict the UK's ability to fight wars? With us now is our guests.
:40:35. > :40:41.Anthony, can you think of a single military campaign in his tro that
:40:41. > :40:44.would not potentially have fall -- in history that would not have
:40:44. > :40:49.potentially fallen foul of this ruling? Warfare is completely
:40:49. > :40:52.unpredictable. Even if you take the German army in the Second World War,
:40:52. > :40:55.regarded as one of the best equipped. They hadn't prepared for
:40:55. > :41:03.the Russian winter. Every single army always gets it wrong. That is
:41:03. > :41:07.one of the truths about warfare. This is lunacy? Isn't it? You have
:41:07. > :41:14.to look at what the court decided. That is the first point really
:41:14. > :41:19.isn't it. The court has said that soldiers are subject to UK
:41:19. > :41:23.jurisdiction when they are operating abroad. Which is what in
:41:23. > :41:27.fact is the case in relation to all other law, both civil law and
:41:27. > :41:32.criminal law. So the only question was is the Human Rights Act some
:41:32. > :41:35.how different from other law? And the court has held, no. The
:41:35. > :41:40.soldiers are subject to UK jurisdiction because they are
:41:40. > :41:44.within the state's authority and control. Anyone under UK
:41:44. > :41:49.jurisdiction. There is a lot of logic to that isn't there?
:41:49. > :41:54.course there is. But at the same time how do you impose zero risk
:41:54. > :41:58.civilian value on a battlefield or military environment. I'm not sure
:41:58. > :42:01.that is what they are saying, where there has to be zero risk? They are
:42:02. > :42:06.not necessarily saying there is zero risk, but the question is how
:42:06. > :42:11.far do you take the minimiseation of risk in this particular process.
:42:11. > :42:14.There is the equipment side where I would certainly agree that the
:42:14. > :42:18.Snatch Land Rovers were a scandal waiting to happen, and it did
:42:18. > :42:23.happen. But then there are other aspects to it, for example when you
:42:23. > :42:26.come to the friendly fire incident. Does that mean that we should have
:42:26. > :42:30.identification, friend or foe technology on every single vehicle
:42:30. > :42:34.in the British Army. Could we ever afford it. The court has absolutely
:42:34. > :42:37.not said it is a zero risk situation. The court has
:42:37. > :42:43.specifically said that no unreasonable or disproportionate
:42:43. > :42:47.burdens will be placed on the military in any way that would put
:42:47. > :42:51.the defence of the country at risk. With the greatest respect have you
:42:51. > :42:56.ever served in the military? Have any of these judges served in the
:42:56. > :43:00.military? Who are we to judge? Can you imagine what it is like out in
:43:00. > :43:03.combat trying to make a decision about how you perform a particular
:43:03. > :43:08.operation, while second-guessing what liability may be at play in
:43:08. > :43:11.the courts comfortably back in England? Those decisions have been
:43:11. > :43:16.specifically ruled out of judicial scrutiny. So in relation to those
:43:16. > :43:21.decisions the court has said decisions on the battlefield are
:43:21. > :43:25.not matters to be considered by the courts. Who is potentially bound by
:43:25. > :43:30.this ruling should it go your way? What do you mean bound? Is this, as
:43:30. > :43:34.Anthony last said, many people feel the preparation for the war in Iraq
:43:34. > :43:38.was scandalously mismanaged and the troops were not given all the
:43:38. > :43:42.equipment that they needed. So it is the people who make that
:43:42. > :43:49.decision is it? The defendant, if you are asking me who the defendant
:43:49. > :43:53.would be, it would be the Government, the MoD, the point is
:43:53. > :43:57.soldiers have, the court has decided that when something goes
:43:57. > :44:03.seriously wrong, soldiers should not be shut out from the courts.
:44:03. > :44:08.They should be able to litigate. But the point is, has something
:44:08. > :44:16.seriously gone wrong? At that point one has to ask whether reasonable
:44:16. > :44:19.steps were taken to protect soldiers' lives. That is the
:44:19. > :44:25.circumstances. You can see why Philip Hammond is twitchy about it?
:44:25. > :44:29.You do indeed. He's right talking about the wider implications. One
:44:29. > :44:33.has to remember that the ethos of the army and attitude is that
:44:33. > :44:38.although the Supreme Court may have ruled out for the moment a question
:44:38. > :44:43.of battlefield decision, I'm afraid in this field, on the whole lawyers
:44:43. > :44:46.tend to go partly for making their names and careers want to push the
:44:46. > :44:50.boundaries. There is always the possibility, therefore, we will see
:44:50. > :44:53.this challenged in the future. What will that mean? We have seen the
:44:53. > :44:57.way, for example, that the police on one occasion actually called
:44:57. > :45:01.back their men and ordered them not to intervene, when, people were
:45:01. > :45:06.being held down by a gunman and were under severe threat. Are we
:45:06. > :45:12.going to see at some stage in the future the SAS have to carry out a
:45:12. > :45:15.health and safety check before they start trying to release hostages?
:45:15. > :45:21.The implications are pretty worrying. Can you reassure him
:45:21. > :45:25.about that? I can certainly do that. Aum the court has said here is that
:45:25. > :45:31.the state is -- all the court has said here that the state is under
:45:32. > :45:37.an obligation it take reasonable steps to protect their soldiers. As
:45:37. > :45:42.a matter of common law, since 1987, when parliament lifted the immunity
:45:42. > :45:47.for soldiers for suing the MoD, parliament has said that the MoD
:45:47. > :45:53.has a duty that can be litigated. A duty of care to its soldiers and
:45:53. > :45:59.soldiers are entitled to sue the MoD. Now parliament decided that in
:45:59. > :46:04.1987, and one has to be slightly realistic about this. What flood of
:46:04. > :46:08.litigation has there been since 1987? There has been a duty of care
:46:08. > :46:13.since then? There has certainly been a number of case, not a flood
:46:13. > :46:23.of litigation, that I would accept. All right, thank you very much
:46:23. > :46:58.
:46:58. > :47:02.indeed. Saying you can't judge a book by
:47:02. > :47:08.its cover, tell that to a publisher, Penguin was announced the winner of
:47:08. > :47:18.the design award. The brief was to design a cover for a book that is
:47:18. > :47:28.
:47:28. > :47:33.70 years old. Here is the ones that It was about 11.00 in the morning,
:47:33. > :47:37.the sun not shining and the look of hard rain on the foot hills. I was
:47:37. > :47:41.wearing my powder blue suit with a dark-blue shirt, tie and display