19/06/2013 Newsnight


19/06/2013

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


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A flagrant disservice to patients We don't even know who said that,

:00:21.:00:27.

he's referred to in the report as "Mr F", where why are they allowed

:00:27.:00:32.

to hide behind the Data Protection Act. Can the boss of the Care

:00:32.:00:36.

Quality Commission explain how an organisation to serve the public

:00:36.:00:37.

went rotten? The Chancellor of the Exchequer

:00:37.:00:42.

starts the process of privatisation for one of the banks bailed out by

:00:42.:00:47.

the taxpayer. He claims everything is going swimmingly. Let me say

:00:47.:00:51.

this tonight, the British economy is healing. We are moving from

:00:51.:00:55.

rescue to recovery. But is the real achievement of

:00:55.:01:00.

George Osborne to have changed the face of public spending in Britain.

:01:00.:01:05.

And what would the men who fought at D-Day have made of it? Families

:01:05.:01:10.

of soldiers who died on active service are given the right to sue

:01:10.:01:13.

for negligence. Can combat really be reconciled with the Human Rights

:01:13.:01:23.
:01:23.:01:25.

This is the long and short of it, an organisation supposed to look

:01:25.:01:29.

after the interests of the patient knows there is something wrong with

:01:29.:01:32.

a treatment centre but in order to look after its own interests it

:01:32.:01:37.

doesn't publish its findings. Then a new broom comes in, the

:01:37.:01:42.

instruction to suppress is itself disclosed but with the key names

:01:42.:01:46.

obscured. Cover-up on cover-up. The Health Secretary apologised this

:01:46.:01:51.

afternoon, not that it did anything much to explain quite how it all

:01:51.:01:56.

happened. This is not the first time the

:01:56.:02:00.

spotlight has fallen on healthcare regulator, the Care Quality

:02:00.:02:05.

Commission. It faced criticism over neglect of patients in Mid-

:02:05.:02:10.

Staffordshire, over the treatment of residents at the Winterbourne

:02:10.:02:17.

View and Ashcourt Care Home. An investigation into a number of

:02:17.:02:21.

babies dying at Morecambe Bay Hospital Trust made familiar

:02:21.:02:26.

reading. Families struggling to be heard over bureaucracy. New born

:02:26.:02:31.

James Titcombe died in 2008, his father has led efforts to expose

:02:31.:02:36.

the full extent of failings at the maternity unit, and the role of the

:02:36.:02:39.

regulator ever since. Whilst I recognise there were obviously

:02:39.:02:44.

failures in the regulation, I didn't realise the extent. It is no

:02:44.:02:48.

exaggeration I felt physically ill when I read about the cover-up.

:02:48.:02:53.

Because that was just such an outrageous thing to have happened.

:02:53.:02:58.

Today's report found evidence of a deliberate cover-up of a critical

:02:58.:03:08.
:03:08.:03:13.

One senior manager, talking about that review is even said to have

:03:13.:03:23.
:03:23.:03:28.

At a CQC board meeting today, the main whistblower, Kay Sheldon spoke

:03:28.:03:31.

emotionally. I have been subjected to the most appalling treatment.

:03:31.:03:35.

I'm not going to say any more about it. But I think that in itself

:03:35.:03:44.

should shame the organisation. Indeed higher. This is how events

:03:44.:03:49.

unfolded, in November 2008 new born James Titcombe dies at Furness

:03:49.:03:55.

General Hospital. In June 2009 the CQC increased Morecambe Bay's risk

:03:55.:04:01.

rating to red. In April 2010 it decreased the rating to green. In

:04:01.:04:05.

October 2011 the internal review was ordered. In March last year

:04:05.:04:09.

came the apparent decision to delete the internal report.

:04:09.:04:14.

Today's report says the individual concerned denies the allegations.

:04:14.:04:17.

In parliament today the Health Secretary, Jeremy Hunt, apologised

:04:17.:04:21.

to the families. Saying events at Morecambe Bay should never have

:04:21.:04:24.

been covered up and should never have happened in the first place.

:04:24.:04:30.

Later the gloves came off, as he and Shadow Health Secretary, Andy

:04:30.:04:35.

Burnham exchanged criticism. Earlier the Prime Minister said

:04:35.:04:38.

that there should be always support for whistblowers, and he was right

:04:39.:04:42.

to say so. But there are serious doubts about whether that has

:04:42.:04:52.
:04:52.:04:56.

happened in this case. There were concerns raised by another

:04:56.:04:59.

whistleblower and there were questions raised about her

:04:59.:05:05.

character. Can the minister say there was appropriate concerns

:05:05.:05:11.

raised. Jeremy Hunt turned the tables on Labour who set up the CQC

:05:11.:05:14.

in the first place. He talks about accountability, the opposition if

:05:14.:05:18.

they were to give confidence that they really took the issues raised

:05:18.:05:20.

today seriously, they would recognise it was fundamentally

:05:20.:05:23.

wrong to set up an inspection regime, not being done by

:05:23.:05:29.

specialists, where the same person is inspecting a dental clinic, a

:05:29.:05:32.

slimming clinic, a hospital or GP practice perhaps in the same month.

:05:32.:05:40.

That may have contributed to why it was that in 2009 the CQC decided

:05:40.:05:44.

not to investigate the maternity deaths in Morecambe Bay. There was

:05:44.:05:48.

clearly some battlement amongst MPs today as to why the names of senior

:05:48.:05:52.

figures at the CQC had been redacted from the report. Whether

:05:53.:05:56.

this was down to some possible legal action by the individuals

:05:56.:05:59.

involved, or under a constraint due to the data protection legislation

:05:59.:06:04.

as the CQC said earlier. This feels like a public authority hiding

:06:04.:06:07.

behind the Data Protection Act. It is very common. But you have to go

:06:07.:06:12.

by what the law says. And the law is very clear, you have to process

:06:12.:06:17.

data fairly, you have to take into account the people's expectation of

:06:17.:06:20.

confidentiality, patient data obvious, but officials, there you

:06:20.:06:26.

have to apply a public interest test. I'm not convinced that the

:06:26.:06:28.

Care Quality Commission have been correctly advised. I think they are

:06:28.:06:32.

going to have to look at this again. We have to have accountability when

:06:32.:06:37.

there is such poor practice in our public bodies. How can people be

:06:37.:06:40.

allowed to walk away with full pensions, no investigation into

:06:40.:06:45.

their conduct or blot on their copy book? Allowing them, potentially,

:06:45.:06:49.

to walk into a job with another regulator or the NHS. There is now

:06:49.:06:55.

a new management team in place at the CQC. The former chairman, Dame

:06:55.:06:58.

Jo Williams, and former chief executive, Cynthia Bower, left the

:06:58.:07:03.

organisation last year. An independent public inquiry,

:07:03.:07:07.

Stafford-style, is now under way. The Trust itself also has a new

:07:07.:07:12.

board which today acknowledged past failings and said it is committed

:07:12.:07:16.

to providing safe care. The CQC hopes today's report draws a line

:07:16.:07:22.

in the sand for them. But as the patients' champion, the regulator

:07:22.:07:26.

must reassure the public it will act differently from now on.

:07:26.:07:29.

David Behan is the chief executive of the Care Quality Commission,

:07:29.:07:33.

Jamie Reed is a Shadow Health Minister and Heather Wood is a

:07:33.:07:39.

former NHS manager who worked at the CQC's precursor, the Healthcare

:07:39.:07:42.

Commission, where she led the investigation into avoidable deaths

:07:42.:07:47.

at Stafford hospital. She went on to work at the CQC, but left in

:07:47.:07:50.

2010 after the national investigations team was abolished.

:07:50.:07:56.

Can I talk to you for a minute first, David Behan, why have you

:07:56.:08:00.

excluded these names? The first thing to say is we are committed to

:08:00.:08:04.

openness and transparency in our work. This is why I commissioned

:08:04.:08:08.

this report in the first place. This isn't a problem we want. We

:08:08.:08:11.

want to be absolutely clear about what we did and we are accounting

:08:12.:08:15.

for this, the facts are not in dispute. It has come to the

:08:15.:08:18.

question you asked, I was advised to put people's personal data would

:08:18.:08:23.

be a breach of their rights. We decided today that we will review

:08:23.:08:27.

that legal advice and we have commissioned a review of that legal

:08:27.:08:31.

advice to see if we can put this information into the public domain.

:08:31.:08:34.

We do not want this problem. independent commissioner says it is

:08:34.:08:40.

not a problem at all? Well the only thing I can say, Jeremy, is we

:08:40.:08:45.

commissioned this report, we published it today. He's more

:08:45.:08:49.

likely to know? We published it today warts and all. You excluded

:08:49.:08:52.

the names? We have been open and transparent about where we failed

:08:53.:08:55.

the people in Morecambe Bay, we have apologised for that today. We

:08:56.:08:59.

are looking and reviewing the advice we have been given to see if

:08:59.:09:04.

we can put that right. You accept your legal advice was duff?

:09:04.:09:08.

accepted the legal advice I was given, I acted in good faith.

:09:08.:09:11.

Information Commissioner is surely likely to know? I have listened to

:09:11.:09:14.

what the Information Commissioner has said. He's saying review the

:09:14.:09:17.

advice, I have said earlier this evening we will review the advice.

:09:17.:09:20.

He said unambiguously the advice you have been given is wrong and

:09:20.:09:25.

that you are hiding behind it? We are not hiding behind it.

:09:25.:09:28.

wouldn't have commissioned the report in the first place, we are

:09:28.:09:32.

clear we need to account for what we did. You will published the

:09:32.:09:35.

names tomorrow will you? I will take legal advice tomorrow on

:09:35.:09:38.

publishing the names. You have just been told by the Information

:09:38.:09:44.

Commissioner it's a croc of rubbish? I'm committed to openness

:09:44.:09:47.

and transparency. No you are not, if you were committed to that you

:09:47.:09:50.

would publish the names? I have been advised legally of the

:09:50.:09:52.

difficulties in publishing the names and putting people's personal

:09:53.:09:56.

information out there. Legal advice is never binding, it is up to you

:09:56.:10:00.

to make a decision to accept it or not? It is and on the advice we

:10:00.:10:04.

have published the facts. As people have recorded today all the facts

:10:04.:10:08.

are in the public domain, with the exception of people's names. I have

:10:08.:10:11.

acted on the legal advice and tomorrow we will review it. Despite

:10:11.:10:15.

the fact you have been told by the one man in the country who is in

:10:15.:10:18.

the position to know exactly what the law says, and has said your

:10:19.:10:23.

legal advice is wrong, if they come back tomorrow and say the same

:10:23.:10:26.

thing, you will act the same? will take different legal advice,

:10:26.:10:30.

not the same people who advised me. We will take alternative legal

:10:30.:10:34.

advice to make sure we can act in openness and transparency. We want

:10:34.:10:37.

to put it right. I have an important job and people need trust

:10:37.:10:42.

and confidence in what we do. My job is to restore that trust and

:10:42.:10:45.

confidence in CQC. Can you tell me as the new broom who came in, what

:10:45.:10:49.

went wrong there? I think the story that is revealed in the report is

:10:49.:10:52.

one of a dysfuntional relationship between the board and the senior

:10:52.:10:57.

leadership. I think that is what led to this absence of openness and

:10:57.:11:00.

transparency. And we're determined to put this right. We published a

:11:00.:11:05.

new strategy. We have replaced the board, we are bringing in a new

:11:05.:11:07.

executive team. It was rotten, wasn't it? There were changes we

:11:08.:11:12.

needed to make. What was happening was not acceptable, the model as

:11:12.:11:15.

the Secretary of State stated was not the right model and we are

:11:15.:11:18.

making changes to that and we have begun those changes, we are

:11:18.:11:24.

determined to see them through. seem to suggest it is some sort of

:11:24.:11:26.

managerial malfunction. There was something deeply rotten in the

:11:26.:11:30.

organisation, wasn't there? culture that is demonstrated by

:11:30.:11:33.

this report is not the culture I want to see in any organisation I'm

:11:33.:11:37.

responsible for. Why can't you call a spade a spade. You don't, what

:11:37.:11:40.

don't you want to see? I want to see an organisation. What don't you

:11:40.:11:45.

want to see that you found there? don't want to see people not

:11:45.:11:48.

declaring reports in the public domain. I want us to be open and

:11:48.:11:51.

transparent and account for what we do with people trusting our

:11:51.:11:56.

judgments. Let's broaden this out a bit if we may, do stay with us. Are

:11:56.:12:01.

you surs priced by what has been revealed? I'm not one bit surprised.

:12:01.:12:07.

I mean what has been revealed is totally shocking. But in a way I'm

:12:07.:12:14.

pleased that the lid has final ly kufpl -- finally come off the

:12:14.:12:20.

rotten edifice that was CQC. have used the word "rotten",

:12:20.:12:29.

disputed a moment or two ago. Why is it rotten? When CQC was set up

:12:29.:12:33.

originally I'm sure it was in the business of suppressing anything

:12:33.:12:39.

that would ever look like another Mid- Staffs. I would like to point

:12:39.:12:44.

out I think the CQC was dancing to the tune from the Department of

:12:44.:12:49.

Health and the top of the NHS. are we talking about? We are

:12:49.:12:55.

talking about 2009. Jamie Reed, that was when your party was in

:12:55.:12:59.

Government. It is explicit the link there. It has been made by other

:12:59.:13:03.

people, that this was a corrupt relationship between your

:13:03.:13:05.

Department of Health and the Care Quality Commission? This is an

:13:06.:13:09.

allegation that has been made time and time again. Let's not forget

:13:09.:13:13.

the context. Maybe there is a reason for it. Let's not forget the

:13:13.:13:17.

context of today's report. When the order to cover up was made within

:13:18.:13:23.

the CQC that was after Francis, it was during Francis inquiry, the

:13:23.:13:26.

three-year Francis inquiry that looked at the allegations about the

:13:26.:13:30.

cosy relationships implied found no evidence, in the same way that the

:13:30.:13:34.

Davies Report has found no evidence at all to suggest the kind of

:13:34.:13:37.

relationship between the centre and the CQC was in place. Just because

:13:37.:13:40.

there is no evidence found and published, as we have already seen

:13:41.:13:44.

today, doesn't necessarily mean it didn't exist? It this has been

:13:44.:13:48.

investigated time and time again. As I repeat, the allegations aren't

:13:48.:13:52.

new. Robert Francis looked at this over a three-year period, he looked

:13:52.:13:56.

for the evidence. Extensive evidence was given. It was perhaps

:13:56.:13:58.

the most broad-ranging investigation of its type this

:13:58.:14:01.

country has ever seen. Those allegations didn't stack up.

:14:01.:14:06.

have come in as a new broom, do you see any evidence that there was

:14:06.:14:09.

something wrong with the relationship between the Department

:14:10.:14:12.

of Health under Labour and your organisation? I don't think that's

:14:12.:14:16.

the case in our report, Jeremy. Clearly there was a policy.

:14:16.:14:20.

asking you about what you found? Clearly there was a policy to move

:14:20.:14:24.

towards foundation trust, that is a policy of the last Government and

:14:24.:14:27.

this Government. That is what has been happening. I think this

:14:27.:14:29.

independent report that we commissioned has not found any

:14:29.:14:35.

evidence of interference in any way. If they found it they would have

:14:35.:14:38.

mentioned it. If it wasn't corruption what was the problem?

:14:38.:14:42.

There was clearly a problem with the performance of the CQC. They

:14:42.:14:45.

were just incompetent? Let's have a look at the Government's response

:14:45.:14:50.

to this report. There may be that we had the wrong people in the

:14:50.:14:53.

wrongs positions who couldn't do the job asked of them. There was

:14:53.:14:56.

clearly issues with the trust and the trust management as well.

:14:56.:15:00.

us how these inspections were often carried out, you say you are not

:15:01.:15:07.

surprised? I'm not surprised. I just would like to add that maybe

:15:07.:15:11.

Francis's conclusions might have been a bit different if, in a way,

:15:11.:15:15.

everyone had given an entirely accurate account of things. For

:15:15.:15:20.

example witness after witness at the top of the CQC stood up and

:15:20.:15:23.

said their methodology was robust and registration was done

:15:23.:15:29.

rigorously. We now know that simply wasn't true. So I'm sorry, I don't

:15:29.:15:37.

think one can take the fact that Francis said he didn't find, for

:15:37.:15:41.

example, evidence of bullying by David Nicholson. I would suggest he

:15:41.:15:44.

disregarded some of the evidence he had and he didn't look hard enough.

:15:44.:15:51.

But in my view, of course CQC came in, it completely destroyed the

:15:51.:15:56.

specialist teams, set about this ridiculous generic model of sending

:15:56.:16:01.

anybody into hospital regardless of their background. You know and then

:16:01.:16:08.

it is surprised when things don't show up. Even today this report,

:16:08.:16:15.

partly says that the Trust should have given CQC the earlier

:16:15.:16:19.

specialist report that had been done, that had criticised maternity.

:16:19.:16:23.

I think any team that was worth its salt would have found that report

:16:24.:16:30.

for themselves. Hang on a second, this idea that someone, can be

:16:30.:16:35.

inspecting a dental practice one moment, a slimming clinic the next,

:16:35.:16:39.

some apparatus in a hospital the next, this is ridiculous, isn't it?

:16:39.:16:43.

I agree with you Jeremy, that is why I'm changing it. I have said

:16:43.:16:47.

this from day one, we will move from a generic model to specialist

:16:47.:16:52.

model. Professor Sir Mike Richards will be the first inspector of

:16:52.:16:55.

hospitals. A respected clinician and we will change the model we

:16:55.:16:59.

have in place. Who told you that was supposed to be done like that?

:16:59.:17:03.

Nobody told me. What I have said is we are changing the model of

:17:03.:17:08.

inspection. I inherited an organisation that had a generic

:17:08.:17:12.

model of inspection and we are going to change it. Who created

:17:12.:17:15.

that model? The previous organisation, the previous board of

:17:15.:17:17.

CQC will have to accept responsibility and the executive

:17:17.:17:22.

team for the creation of the model. As will the Labour Government?

:17:22.:17:28.

model of inspection is being used today. There is a review going on

:17:28.:17:34.

into 14 Hospital Trusts, one of which is my own Hospital Trust,

:17:34.:17:37.

north Cumbria University Hospital Trust and this generic model is

:17:37.:17:43.

still being used. You started it? It is made clear by David that the

:17:43.:17:48.

CQC, as the independent regulator. Let's not forget before 1996 there

:17:48.:17:51.

was no hospital regulation whatsoever, they developed this

:17:51.:17:54.

model. One final point, does Labour want the names published tomorrow?

:17:54.:17:57.

We made this clear today in the House of Commons we do want the

:17:57.:18:00.

names published. We want to know who knew what about this in the

:18:00.:18:04.

Department of Health. We want to know about the details of the

:18:04.:18:06.

conversations between the CQC whistleblower and the former

:18:06.:18:09.

Secretary of State. We want to know all the details of this. We don't

:18:09.:18:12.

believe now is the time to draw the line under this, there is a lot

:18:12.:18:17.

more that needs to be answered. Thank you very much all of you.

:18:17.:18:23.

In a moment, can you really fight a war if human rights legislation is

:18:23.:18:31.

applied on the battlefield? Unlike Gordon Brown, who wouldn't be seen

:18:31.:18:35.

dead in them, George Osborne has been wearing a bowtie and dinner

:18:35.:18:39.

jacket since his nanny dropped him off at nursery school. He put them

:18:39.:18:43.

on again tonight to tell the plutocrats of the City of London

:18:43.:18:47.

what he will do with Lloyds Bank, which Gordon Brown spent millions

:18:47.:18:52.

of our money buying a large chunk of. -- billions of our money buying

:18:52.:18:57.

a chunk of. Lloyd's will be sold, it will be privatised, by an

:18:57.:19:00.

institutional placing, so big pension funds get the first grab at

:19:00.:19:03.

buying some of the shares. Eventually down the line, when

:19:03.:19:09.

that's worked, if it has worked, we might have a "tell Sid" moment,

:19:09.:19:14.

where they go to ordinary people and allow them to buy Lloyd's. With

:19:14.:19:18.

RBS there has been vigorous debate behind the scenes and between

:19:18.:19:24.

policy makers, RBS, we have an 81% stake in that, it is massive. That

:19:24.:19:28.

debate has staid the Chancellor's hand from any sign of a politically

:19:28.:19:34.

rushed attempt to get rid of it before the election. I don't want a

:19:34.:19:39.

quick sale of our RBS shares. I want the right sale, the right sale

:19:39.:19:45.

for the British people. I will only sell our stake in RBS when we feel

:19:45.:19:50.

the bank is fully able to support our economy and we get good value

:19:50.:19:56.

for you the taxpayer. In our judgment, when it comes to RBS that

:19:56.:20:00.

moment is some way off. So instead of a rapid sale they will have a

:20:00.:20:06.

rapid review of a proposal to split RBS into a called good bank/bad

:20:06.:20:11.

bank, like with New York. You take the -- Northern Rock. You take the

:20:11.:20:17.

good debts of RBS, which they have signalled is Ulster Bank and some

:20:17.:20:24.

property loans and you sink it into the bank of Britain and the rest of

:20:24.:20:29.

it can be sold off easily. It will be announced tomorrow that RBS is

:20:29.:20:33.

in line of another �12 billion for capital. All the British banks have

:20:34.:20:39.

to raise �25 billion extra. RBS has the biggest problem. You can't sell

:20:39.:20:42.

a bank rapidly when it is already impaired and needs to raise capital.

:20:43.:20:47.

So they are not. Did he have anything to say about MPs' calls

:20:47.:20:51.

for bankers to be sent to jail? reported on this a bit tonight.

:20:51.:20:52.

Overnight the Parliamentary Commission has come forward with

:20:52.:20:57.

the proposal to make new law, so that specific people, in specific

:20:57.:21:06.

banks are sent to jail if they fail on specific duties. In a way this

:21:06.:21:14.

significant flals the end of struck -- signifys the end of structural

:21:14.:21:18.

banks remedies. Some people in the City have welcomed it. And the

:21:18.:21:21.

Chancellor certainly did today. have already supported the

:21:21.:21:24.

recommendations on new criminal sanctions and cancelling bonuses

:21:24.:21:31.

where banks are bailed out. And let me be clear, where legislation is

:21:31.:21:34.

needed the Banking Bill, currently before parliament, will be amended

:21:34.:21:39.

to ensure the recommendations can be quickly enacted. The other thing

:21:39.:21:43.

they have done is to tell the Office of Fair Trading to bring

:21:43.:21:46.

forward a review. They will look at the impact on the high street and

:21:46.:21:50.

on lending to small businesses of breaking up Lloyd's, breaking up

:21:50.:21:53.

RBS, bringing new entrants. They will do a bit of rapid structural

:21:53.:21:57.

reform of high street lending. They realise there is not enough lending

:21:57.:22:03.

to banks. The other bit of news is this was the swansong of Mervyn

:22:03.:22:07.

King, the Governor of the Bank of England, he has an elevated to the

:22:07.:22:14.

peerage, you will be pleased to know. He promised to do "ruthless

:22:14.:22:17.

truth-telling". Maybe now for the first time ever he might sit in the

:22:17.:22:22.

studio and you can interview him now. I look forward to it. I'm

:22:22.:22:25.

sorry you weren't there I would have liked to have seen that.

:22:25.:22:29.

George Osborne has been running the economy for the past three years,

:22:29.:22:34.

he's not exactly the most popular politician in the country. It's

:22:34.:22:38.

quite clear his strategy for sort ought the economy hasn't worked or

:22:38.:22:42.

yet at least. But he has made huge changes, not least to the state

:22:42.:22:46.

itself, which all the other parties in politics are having to adjust to.

:22:46.:22:50.

Is it possible that his impact may be far greater than most of us

:22:50.:22:57.

recognise? Time was when the Chancellor,

:22:57.:23:00.

George Osborne, was accused of cutting the British state to

:23:00.:23:05.

ribbons. But with the Labour Party's recent pledge to match the

:23:05.:23:08.

Chancellor's spending plans, the path cut by George Osborne's

:23:08.:23:13.

scissors looks to become permanent. Possibly unintentionally, the

:23:13.:23:18.

Government may have cut a new shape for the British state. The numbers

:23:18.:23:23.

you are going to get next week are the first pitch by the governing

:23:24.:23:27.

parties ahead of the next general election. And actually, really, it

:23:27.:23:32.

is probably the first time ever that governing parties have gone

:23:32.:23:36.

into an election telling the public they will be cutting their public

:23:36.:23:42.

services and exactly where. He's looking to save something like an

:23:42.:23:46.

additional �10 billion in public service spending for the year

:23:46.:23:52.

2015/16, the year directly after the next election. That's �10

:23:52.:23:55.

billion on top of what have been five years of the steepest spending

:23:55.:24:01.

cuts we have ever seen. But this time it is getting quite vicious.

:24:01.:24:06.

Newsnight understands that in order for the Treasury to cajole various

:24:06.:24:08.

departments across Whitehall into settling their cuts, they have what

:24:08.:24:13.

has become known as, across the Government, a Treasury blacklist.

:24:13.:24:16.

So this is all sorts of embarrassing stories that they will

:24:16.:24:20.

allow to be released as and when they want to force departments to

:24:20.:24:25.

settle. So you have already heard about the MoD having more horses

:24:25.:24:29.

than soldiers, but did you know that Vince Cable's department is

:24:29.:24:33.

supposed to support a bursary for the performing arts and that Philip

:24:33.:24:40.

Hammond owns quite a few goats! This is the problem, the Government

:24:40.:24:44.

has ring-fenced department central to the political message.

:24:44.:24:47.

International development and health at the top here. This has

:24:47.:24:51.

meant deep cuts elsewhere. Look further down this chart. If these

:24:51.:24:56.

ring-fences are kept in place then according to analysis by the

:24:56.:24:59.

Resolution Foundation, Britain's Foreign Office is slashed by 65%

:24:59.:25:03.

and the Home Office nearly 50% smaller.

:25:03.:25:06.

For the Foreign Office it might have seen its budget cut by as much

:25:06.:25:11.

as a half, where as somewhere like the Department for International

:25:11.:25:14.

Development could have seen its budget go up by a quarter. The

:25:14.:25:18.

department for health simply is a ring-fenced budget. It looks like

:25:18.:25:23.

it is going to grow to become as much as a third of public spending.

:25:23.:25:27.

There are many people across Whitehall who agree that ring-

:25:27.:25:31.

fencing some departments is very damaging for the other ones.

:25:32.:25:34.

Including, apparently, the Chancellor George Osborne. He is

:25:34.:25:37.

said to be well aware of the problems that are beginning to be

:25:37.:25:43.

caused. There are big ring-fences in public spending. The biggest is

:25:43.:25:46.

the National Health Service, effectively pension spendinging is

:25:46.:25:49.

also ring-fenced. Put those two together and you have a very large

:25:49.:25:56.

chunk, a very large chunk of public spending not being cut back. That

:25:56.:26:00.

means just arithmetically if you want to save two or three per cent

:26:00.:26:04.

across the piece, if you are protecting a third or total, you

:26:04.:26:09.

need to take 4-6% from everything else. So a refashioned state, but

:26:09.:26:15.

is this job of cutting back the state nearly done? There was an

:26:15.:26:19.

expectation back in 2010/11 when the coalition came in that this was

:26:19.:26:24.

going to be a one-parliament issue, that we would get the spending

:26:24.:26:28.

fixed by the time of the next election the economy would be back

:26:28.:26:31.

on track and we would be discussing different things. It is still

:26:31.:26:37.

around. To meet George Osborne's deficit target, as well as 2015's

:26:37.:26:42.

�11 billion of cut, there will be �13 billion in each subsequent year.

:26:42.:26:46.

The time may have come for something completely different.

:26:47.:26:51.

Every year a Government spends about �700 billion on the state.

:26:51.:26:58.

Half of that is this expenditure. It is departmental and it is so far

:26:58.:27:02.

very heavy cut by this Government. What about this, it is more than

:27:02.:27:09.

half and actually is rising. It is called AME, but you could describe

:27:09.:27:13.

it as discretionary spending. It has many pots within it, but a

:27:13.:27:16.

large part of it is welfare payments. The kind of payments that

:27:16.:27:22.

go up when people have a demand for them. This pot so far hasn't been

:27:22.:27:26.

capped. But now all three parties agree that if you want to stop huge

:27:27.:27:32.

damage to departments, you have to look here. There is a clear trade

:27:33.:27:36.

off take more and more money out of Government departments and either

:27:36.:27:40.

increasing taxes or cutting various benefits. Now, clearly any

:27:40.:27:43.

Government coming in will use a combination of measures, but to

:27:43.:27:47.

give you an illustration of the sorts of issues we are talking

:27:47.:27:50.

about here. In order to maintain the current rates of cuts in

:27:50.:27:53.

departmental spending, not doing any more than that, just

:27:54.:27:57.

maintaining the current pace will take about �10 billion of further

:27:57.:28:05.

welfare savings or tax rises in 2016/17 and 17/18. That is a 10%

:28:05.:28:10.

cut in the tax credit budget. We are looking at �9 billion being

:28:10.:28:15.

taken out of tax credits by 2018, that is a further hit that tax

:28:15.:28:18.

credits can't probably stand. If you think about tax it is 1%

:28:18.:28:24.

increase in the standard rate of VAT, increasing to 21% in 2016,

:28:24.:28:28.

would raise �11 billion over two years. In the next parliament,

:28:28.:28:32.

politicians will reach for these different kinds of levers. Because

:28:32.:28:37.

try as this current Government might, while they may have reshaped

:28:37.:28:40.

public spending, by just cutting departments they have struggled to

:28:40.:28:45.

bring down its cost. But none the less, in making the Labour Party

:28:45.:28:49.

agree to welfare cuts, this Chancellor has changed the shape of

:28:49.:28:53.

Britain's political debate. And in just a few years he's also been

:28:53.:29:03.
:29:03.:29:05.

changing the shape of the state. That was Allegra st. Tratton

:29:05.:29:10.

reporting there. We are joined by the previous

:29:10.:29:14.

adviser for Ed Miliband and now work for a charity focusing on

:29:14.:29:20.

services for children. The former director of the Centre for Policy

:29:20.:29:23.

Studies. And Danny Finkelstein is executive editor at the Times. You

:29:23.:29:27.

can start, how significant do you think is this achievement in

:29:27.:29:30.

changing the pattern of public spending? I think we have seen a

:29:30.:29:35.

big change in the debate on public spending, just in the last two week,

:29:35.:29:40.

with Ed Balls saying, in a rather muted way, that he's going to try

:29:40.:29:44.

to match or start from George Osborne's position and then Ed

:29:44.:29:47.

Miliband coming out and saying that on welfare. It is an

:29:47.:29:51.

acknowledgement there is no going back, that it is impossible for any

:29:51.:29:54.

in coming Government to start spending a lot more money. I think

:29:54.:29:57.

there has been a big shift in the responsibilities of the state and

:29:57.:30:01.

in the cost to the date already. We will see more of that. It is a huge

:30:01.:30:05.

change isn't it, when you look at what your party, what the Labour

:30:05.:30:09.

Party used to talk about. Only three or four years ago. Only

:30:09.:30:14.

actually about a year ago on the question of child benefit, for

:30:14.:30:18.

example. This is an amazing change? Danny's right. The big issue, there

:30:19.:30:22.

is no debate here around the size of the state and where it needs to

:30:22.:30:25.

get to and the fact it needs to be smaller. I think all the parties

:30:25.:30:29.

are agreed on that. I think where the Labour Party would find

:30:29.:30:31.

difference with George Osborne though is in the way he's making

:30:31.:30:37.

these cuts. I think he's making a couple of biggerors. The first is

:30:37.:30:41.

really around equity. And he's doing things that are politically

:30:41.:30:45.

savvy around welfare. But aren't necessarily fair. So he's

:30:45.:30:49.

protecting pensioner benefits, some of which go to really affluent

:30:49.:30:52.

pensioners and it is really working families that are taking the brunt

:30:52.:30:58.

of the cuts. Four out of every five pounds of welfare cuts are

:30:58.:31:04.

happening to families in work that's very tough. The second area

:31:04.:31:08.

where I think he's making big mistake, is he's making cuts that

:31:08.:31:11.

save money in the short-term but will store up problems for the

:31:11.:31:15.

state in the long-term. By that I mean things like the Future Jobs

:31:15.:31:19.

Fund, spending on job guarantees for unemployed young people. We

:31:19.:31:24.

know that youth unemployment carries huge cuts. Cuts to things

:31:24.:31:27.

like early years centres and children's centres. That stores up

:31:27.:31:32.

costs for the state. Cuts to social care that puts pressure on the NHS.

:31:32.:31:36.

You are shaking your head, it doesn't feel like that to you?

:31:36.:31:39.

premise of this conversation is we have seen a radical reshaping of

:31:39.:31:43.

the state, we just haven't. There has been a reshaping of public

:31:43.:31:47.

spending clearly? It is moved in the sense that it is moved around.

:31:47.:31:52.

Departmental spending. OK, but this is no reshaping of the state.

:31:52.:31:57.

George Osborne came to power after a decade in which Gordon Brown had

:31:57.:32:01.

allowed public spending to explode. Health spending had nearly doubled

:32:01.:32:06.

in ten years. Clearly and one out of every four pounds was debt was

:32:06.:32:08.

being borrowed in order to fund that. It is interesting, looking

:32:08.:32:12.

back, actually, there is a statement that George Osborne

:32:12.:32:15.

issued as the criteria for his first Spending Review in 2010,

:32:15.:32:19.

after the election. And the first question was in effect should the

:32:19.:32:23.

state be funding this activity at all? He was attempting at that

:32:23.:32:28.

point and in certain low the rhetoric there to reverse this

:32:28.:32:33.

discussion -- certainly in the rhetoric to say should Government

:32:33.:32:36.

be doing that? We haven't seen departments closed or any big

:32:36.:32:41.

changes since then. We see the debt continuing to rise. Go on. You have

:32:41.:32:46.

to have political consent, but there have been very big changes,

:32:46.:32:51.

tuition fees is a very big change. Moving something to basically

:32:51.:32:56.

private payment. Privatisation of prisons. The NHS reforms. It is

:32:56.:32:59.

interesting though, because tuition fees, it is a good example, some

:32:59.:33:03.

experts are saying because the Government's made such optimistic

:33:03.:33:07.

assumptions about its new policy, it could end up costing a lot more

:33:07.:33:11.

than the Government has predicted. I want to bring in a visual aid

:33:11.:33:14.

here, if we may. Let's have a look at this, a graph shortly will

:33:14.:33:19.

appear on the wall here. There it is, changing state spending. It is

:33:19.:33:23.

almost impossible to read in rather brilliant fashion. But actually I

:33:23.:33:28.

think viewers at home can see it. But the green on the left of it,

:33:28.:33:32.

that's NHS spending. Under this current configuration, look it goes

:33:32.:33:37.

up from about a quarter to over, nearly a third, almost exactly a

:33:37.:33:40.

third, now that's what happens, isn't it, when you have some areas

:33:41.:33:44.

that are ring-fenced and other areas that aren't? This was

:33:45.:33:47.

politically mandated. The British people wanted that. They wanted to

:33:47.:33:52.

protect schools, they wanted to protect...What Do you mean they

:33:52.:33:55.

wanted to? I don't think they would have elected the Conservative Party

:33:55.:34:00.

even as a minority component in the Government without that promise.

:34:00.:34:03.

But it stall everything else? shifts expenditure into a service

:34:03.:34:07.

that lots of people value hugely. It means you have to do things like

:34:07.:34:12.

cap welfare, frankly. It is an area where spending is inevitably going

:34:12.:34:17.

to go on rising,, the structural reforms we have seen have not cut

:34:17.:34:21.

cost, they haven't actually looked at what the health service is doing.

:34:21.:34:25.

And whether it needs to be doing what it is doing. It is simply

:34:25.:34:29.

building. The problem there is that when you have an area like that for

:34:29.:34:34.

spending it will go on and on and getting bigger. It is unsustainable

:34:34.:34:40.

isn't it? I completely think it is. I believe that this next round of

:34:40.:34:43.

spending in 2017, is going to require a big look at functions.

:34:43.:34:47.

But you have to take the public with you each step of the way. And

:34:47.:34:50.

there have already been big changes in functions. Capping welfare, a

:34:50.:34:54.

battle that has been won, capping people's welfare, benefit bills,

:34:54.:34:58.

the reform for housing benefit, the move to universal benefits. You

:34:58.:35:01.

can't do everything in one period in Government. You have to take

:35:01.:35:05.

people with you as you do it. Where I think we are nearly at the limit

:35:05.:35:10.

of public acceptance of this, but public acceptance has been retained.

:35:10.:35:13.

One other thing, one other effect, public spending hasn't really

:35:13.:35:17.

reduceed very much. But what has happened, let's look at this chart

:35:17.:35:27.

here. What it shows is the Green Line is people who average spending

:35:27.:35:31.

per non-pensioner, and the pink line is pensioners. It is obvious

:35:31.:35:33.

who is doing well, the people receiving from the state are

:35:33.:35:36.

getting wealthier and wealthier, and the people paying in are

:35:36.:35:41.

getting poorer and poorer? I think that is right. I think it raises a

:35:41.:35:46.

real issue which is pensioner benefits, some going to affluent

:35:46.:35:50.

pensioners is being protected. are a tiny minority. This is a

:35:50.:35:53.

trivial amount of money involved here. There are lots of pensioners

:35:53.:35:57.

who earn in excess, who have earnings in excess of the medium

:35:57.:36:00.

wage. That is something that I think Labour has some space to talk

:36:00.:36:04.

about now, now that the Labour Party has said. How many?Well they

:36:04.:36:08.

have said they would look at cutting Winter Fuel Payment for the

:36:08.:36:12.

top 5% of pensioner. I think they could go bigger with that and they

:36:12.:36:19.

could save more money on that. can't go on like this h people

:36:19.:36:22.

working are paying for people not working? The Government is

:36:22.:36:27.

proposing a universal pension, for all its philosophical merits and it

:36:27.:36:31.

will guarantee to benefit those who save and end means testing for

:36:31.:36:34.

pensions, it will be extremely expensive to fund. With rising

:36:34.:36:38.

numbers of pensioners and only slight change to pensionable age

:36:38.:36:42.

this is an explosion of state spending. For people who have

:36:42.:36:45.

become pensioners there is political scope to make changes. If

:36:45.:36:52.

you take money away from pensioners good luck to you. It is very easy

:36:52.:36:55.

to propose policies that sound completely correct and get no

:36:55.:36:58.

political consent for them. The trick here is to bring public

:36:59.:37:02.

spending down whilst keeping the public at least broadly on side.

:37:02.:37:05.

And you need, with pensions, you are going to need to do this as

:37:05.:37:10.

people become pensioners. The problem is pensioners vote?

:37:10.:37:14.

Absolutely. Try to take money away from current he can sitsing tension

:37:14.:37:19.

pensioners, I can see the economic case for it, you can summon up the

:37:19.:37:23.

courage and do t but really you have to be politically sensible.

:37:23.:37:27.

Sooner or later politicians have to get off their knees and create a

:37:27.:37:30.

state for somebody other than those who depend on them? Margaret

:37:30.:37:34.

Thatcher when she fought against the trade unions, she did to win

:37:34.:37:37.

against them not just to fight them. It is to get public spending down

:37:37.:37:40.

and keep the public on side. Not merely to say this is how you slash

:37:40.:37:43.

it. We are not getting public spending down. George Osborne is

:37:43.:37:47.

very worried about keeping the public on side, clearly, and

:37:47.:37:51.

building up to the next election, but he clearly has not tackled the

:37:51.:37:55.

debt problem or the size of the state. He hasn't reconfigured the

:37:55.:37:59.

argument as a radical Government. We have to put the NHS figures in

:37:59.:38:03.

context as well. It is a tight settlement for the NHS. The best

:38:03.:38:08.

minds in the NHS should be focused on how you reconfigure, as Jill

:38:08.:38:13.

said. We have a massive structural reform going on that is distracting

:38:13.:38:16.

managers away from reconfiguring what they do and saving money. That

:38:16.:38:20.

is a big problem when it comes to the NHS. The Defence Secretary is

:38:20.:38:23.

worried, the Supreme Court ruled today that the families of soldiers

:38:23.:38:26.

killed in Iraq are free to sue the Government for failing to protect

:38:26.:38:32.

them as well as they might have. Inevitably it invoked European

:38:32.:38:35.

human rights legislation and whether it covered them when they

:38:35.:38:39.

were sent to fight abroad. Being a soldier is, afterall, a slightly

:38:39.:38:43.

dangerous job. That is sort of the point. The biggest protection of

:38:43.:38:52.

all would be never to put them in harm's way anywhere. The soldiers

:38:52.:38:57.

who fought at D-Day would never have imagined it. What precisely

:38:57.:39:01.

constitutes caring for your warriors. To send a man to fight

:39:01.:39:05.

without a weapon is one thing. Is it even possible that some missions

:39:05.:39:10.

might be considered so hazardous they render the Government, the

:39:10.:39:14.

taxpayer, liable. The claims relate to the deaths of two British

:39:14.:39:21.

soldiers killed by IODs, while travelling in the heavily-

:39:21.:39:24.

criticised, light low- armoured Snatch Land Rover vehicles, and the

:39:24.:39:30.

other, who died in a friend low- fire incident travelling in a

:39:30.:39:34.

Challenger Tank. The Supreme Court ruled that the soldiers were within

:39:34.:39:38.

the UK jurisdiction for the purposes of the European Convention

:39:38.:39:41.

on Human Rights. And the Ministry of Defence's argument that they

:39:41.:39:47.

should be covered by called combat immunity was also rejected.

:39:47.:39:52.

Previously human rights protection only applied to military bases and

:39:52.:39:59.

not to the battlefield. concerns are about the wider

:39:59.:40:03.

implications that this will have for the safety and efficiency of

:40:03.:40:07.

our forces in combat in the future. It places some really big questions

:40:07.:40:11.

about how we are going to be able to engage in operations in the

:40:11.:40:15.

future. So will these obligations placed on Government really

:40:15.:40:25.
:40:25.:40:30.

restrict the UK's ability to fight wars? With us now is our guests.

:40:30.:40:35.

Anthony, can you think of a single military campaign in his tro that

:40:35.:40:41.

would not potentially have fall -- in history that would not have

:40:41.:40:44.

potentially fallen foul of this ruling? Warfare is completely

:40:44.:40:49.

unpredictable. Even if you take the German army in the Second World War,

:40:49.:40:52.

regarded as one of the best equipped. They hadn't prepared for

:40:52.:40:55.

the Russian winter. Every single army always gets it wrong. That is

:40:55.:41:03.

one of the truths about warfare. This is lunacy? Isn't it? You have

:41:03.:41:07.

to look at what the court decided. That is the first point really

:41:07.:41:14.

isn't it. The court has said that soldiers are subject to UK

:41:14.:41:19.

jurisdiction when they are operating abroad. Which is what in

:41:19.:41:23.

fact is the case in relation to all other law, both civil law and

:41:23.:41:27.

criminal law. So the only question was is the Human Rights Act some

:41:27.:41:32.

how different from other law? And the court has held, no. The

:41:32.:41:35.

soldiers are subject to UK jurisdiction because they are

:41:35.:41:40.

within the state's authority and control. Anyone under UK

:41:40.:41:44.

jurisdiction. There is a lot of logic to that isn't there?

:41:44.:41:49.

course there is. But at the same time how do you impose zero risk

:41:49.:41:54.

civilian value on a battlefield or military environment. I'm not sure

:41:54.:41:58.

that is what they are saying, where there has to be zero risk? They are

:41:58.:42:01.

not necessarily saying there is zero risk, but the question is how

:42:02.:42:06.

far do you take the minimiseation of risk in this particular process.

:42:06.:42:11.

There is the equipment side where I would certainly agree that the

:42:11.:42:14.

Snatch Land Rovers were a scandal waiting to happen, and it did

:42:14.:42:18.

happen. But then there are other aspects to it, for example when you

:42:18.:42:23.

come to the friendly fire incident. Does that mean that we should have

:42:23.:42:26.

identification, friend or foe technology on every single vehicle

:42:26.:42:30.

in the British Army. Could we ever afford it. The court has absolutely

:42:30.:42:34.

not said it is a zero risk situation. The court has

:42:34.:42:37.

specifically said that no unreasonable or disproportionate

:42:37.:42:43.

burdens will be placed on the military in any way that would put

:42:43.:42:47.

the defence of the country at risk. With the greatest respect have you

:42:47.:42:51.

ever served in the military? Have any of these judges served in the

:42:51.:42:56.

military? Who are we to judge? Can you imagine what it is like out in

:42:56.:43:00.

combat trying to make a decision about how you perform a particular

:43:00.:43:03.

operation, while second-guessing what liability may be at play in

:43:03.:43:08.

the courts comfortably back in England? Those decisions have been

:43:08.:43:11.

specifically ruled out of judicial scrutiny. So in relation to those

:43:11.:43:16.

decisions the court has said decisions on the battlefield are

:43:16.:43:21.

not matters to be considered by the courts. Who is potentially bound by

:43:21.:43:25.

this ruling should it go your way? What do you mean bound? Is this, as

:43:25.:43:30.

Anthony last said, many people feel the preparation for the war in Iraq

:43:30.:43:34.

was scandalously mismanaged and the troops were not given all the

:43:34.:43:38.

equipment that they needed. So it is the people who make that

:43:38.:43:42.

decision is it? The defendant, if you are asking me who the defendant

:43:42.:43:49.

would be, it would be the Government, the MoD, the point is

:43:49.:43:53.

soldiers have, the court has decided that when something goes

:43:53.:43:57.

seriously wrong, soldiers should not be shut out from the courts.

:43:57.:44:03.

They should be able to litigate. But the point is, has something

:44:03.:44:08.

seriously gone wrong? At that point one has to ask whether reasonable

:44:08.:44:16.

steps were taken to protect soldiers' lives. That is the

:44:16.:44:19.

circumstances. You can see why Philip Hammond is twitchy about it?

:44:19.:44:25.

You do indeed. He's right talking about the wider implications. One

:44:25.:44:29.

has to remember that the ethos of the army and attitude is that

:44:29.:44:33.

although the Supreme Court may have ruled out for the moment a question

:44:33.:44:38.

of battlefield decision, I'm afraid in this field, on the whole lawyers

:44:38.:44:43.

tend to go partly for making their names and careers want to push the

:44:43.:44:46.

boundaries. There is always the possibility, therefore, we will see

:44:46.:44:50.

this challenged in the future. What will that mean? We have seen the

:44:50.:44:53.

way, for example, that the police on one occasion actually called

:44:53.:44:57.

back their men and ordered them not to intervene, when, people were

:44:57.:45:01.

being held down by a gunman and were under severe threat. Are we

:45:01.:45:06.

going to see at some stage in the future the SAS have to carry out a

:45:06.:45:12.

health and safety check before they start trying to release hostages?

:45:12.:45:15.

The implications are pretty worrying. Can you reassure him

:45:15.:45:21.

about that? I can certainly do that. Aum the court has said here is that

:45:21.:45:25.

the state is -- all the court has said here that the state is under

:45:25.:45:31.

an obligation it take reasonable steps to protect their soldiers. As

:45:32.:45:37.

a matter of common law, since 1987, when parliament lifted the immunity

:45:37.:45:42.

for soldiers for suing the MoD, parliament has said that the MoD

:45:42.:45:47.

has a duty that can be litigated. A duty of care to its soldiers and

:45:47.:45:53.

soldiers are entitled to sue the MoD. Now parliament decided that in

:45:53.:45:59.

1987, and one has to be slightly realistic about this. What flood of

:45:59.:46:04.

litigation has there been since 1987? There has been a duty of care

:46:04.:46:08.

since then? There has certainly been a number of case, not a flood

:46:08.:46:13.

of litigation, that I would accept. All right, thank you very much

:46:13.:46:23.
:46:23.:46:58.

indeed. Saying you can't judge a book by

:46:58.:47:02.

its cover, tell that to a publisher, Penguin was announced the winner of

:47:02.:47:08.

the design award. The brief was to design a cover for a book that is

:47:08.:47:18.
:47:18.:47:28.

70 years old. Here is the ones that It was about 11.00 in the morning,

:47:28.:47:33.

the sun not shining and the look of hard rain on the foot hills. I was

:47:33.:47:37.

wearing my powder blue suit with a dark-blue shirt, tie and display

:47:37.:47:41.

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