06/11/2013 Newsnight

Tonight Newsnight reveals Saudi Arabia's deal with Pakistan to

secure their own nuclear weapons. For years the sawed keys have warned

America that if Iran went nuclear they would too. We will examine

their plans. Glasgow beats Portsmouth for a contract for three

Royal Navy ships, ending Portsmouth's shipbuilding days. The

yard is closed, that is all we have been told. The end for shipbuilding

in Portsmouth, the end for me. If Scotland votes for independence will

the decision be reversed? Is this the world's least favourite airline

despite carrying 81 million passengers. The shareholders are not

happy, Michael passengers. The shareholders are not

population, he has toilet rolls to help.

Good evening. Tonight we reveal a secret Saudi Arabian plan to secure

nuclear weapons. On the eve of two-day talks between Iran and six

world powers in Geneva, designed to contain Iran's nuclear programme,

Newsnight has learned that such is Saudi concern about Iran's nuclear

position, they are taking steps to secure their own nuclear capability.

Several sources have told Newsnight that Saudi Arabia has invested in

Pakistani nuclear projects and believes it could obtain atomic

bombs at will. While it is seen as countering

bombs at will. While it is seen as that nuclear weapons made in

Pakistan for Saudi Arabia were sitting, waiting for delivery. A

former Pakistani intelligence official added, certainly the

Pakistanis maintain a certain number of warheads on the basis that if the

Saudis asked for them, they would immediately be delivered.

A few years ago Saudi Arabia started signals to its closest ally its

intention of having a nuclear option.

When I was working in the White House the Saudis were extremely

alarmed by the possibility that Iran would acquire nuclear weapons and

they told every American visitor they could get their hands on that

if Iran got nuclear weapons the Saudis would have to have nuclear

weapons. They couldn't possibly live in the shadow of Iran having nuclear

weapons. The most in the shadow of Iran having nuclear

the US to rein in Iran? The Saudis speak about Iran and nuclear matters

very seriously. They don't bluff on this issue. Perhaps they wished they

could, but they know that unless they speak firmly and even shout

they are not going to be heard in Washington DC.

There have long been rumours of the deal between Saudi and Pakistan in

which funding for Pakistan's bomb was linked to Saudi access to atomic

weapons in an emergency. Indeed photographs have surfaced of visits

more than a decade ago by the Saudi Defence Minister to Pakistan's

nuclear research establishment. NawazSharif, the then and now Prime

Minister sits in the centre and the nuclear scientist to

Minister sits in the centre and the Arabia has become so exasperated

with the United States that they probably judge that the time for

ambiguity has passed. The Saudis have also shown elsewhere they can

act counter to US interests and pay for the consequences. They could

simply compensate Pakistan for the wider cost of delivering nuclear

weapons. The Saudis have always said they could never imagine there could

be only a Shi'ite bomb, as they the leaders and the guardians of the two

holy sites and the champion of the Sunni Arab world. So that's kind of

very much in their DNA. Secondly, there is lots of circumstantial

evidence. There is evidence of recent contingency planning, for

example Saudi Arabia has created additional launch pads for its

example Saudi Arabia has created Israeli military intelligence argued

this September that Iran just had to go nuclear for Saudi to activate its

nuclear cash and carry. Because the Saudis will not wait one month, they

have already paid for the bomb. They will go to Pakistan and bring what

they need to bring. And then every regional superpower like Egypt,

Turkey, Iraq will be nuclear. Of course the Israelis have an obvious

agenda in wanting to use the possibility of a Saudi bomb to

galvanise the Americans to do more about Iran's nuclear programme. But

the Americans also have an agenda and it works in the opposite

direction. They would rather not think too much about the possible

consequences of the Saudi nuclear option. The intelligence that Saudi

nuclear weapons could option. The intelligence that Saudi

control, insulating Pakistan from the huge problems that might follow

giving nukes to Saudi Arabian outright. From Pakistan's point of

view, just giving Saudi Arabia a handful of nuclear weapons would be

a very difficult action, it could jeopardise Pakistan's access to the

international funds the economy needs. I have always thoughed it was

much more likely, the most likely if Pakistan were to honour any

agreement, would be for Pakistan to send its own forces and troops,

armed with nuclear weapons and with the delivery systems to be deployed

in Saudi Arabia. Many think that Iran is lurking just below the

nuclear threshold, but the Saudi situation is as if NATH to me, they

-- fascinating to me, they may be situation is as if NATH to me, they

the US and focussed on strategic confrontation with Iran. For the

time being it suits everyone for any Saudi bombs to remain sitting in

Pakistan. But the allure of becoming a nuclear power may prove

irresistable. Well we gave details of our story to

both the Pakistani and Saudi Arabia Governments earlier today. The

Pakistan Foreign Ministry has described our story as "speculative,

mischievous and baseless", they add, "Pakistan is a responsible nuclear

weapon state with comprehensive export controls", the royal Saudi

embassy in London has issued a statement pointing out that the

kingdom is a signatory to the Non-Proliferation Treaty and has

worked for a nuclear-free Middle East. It says the UN

worked for a nuclear-free Middle timebomb that can't be easily

diffused by manoeuvring around it. The significance of both of these

statements? The Pakistani one is a denial. We might as well take that

on the chin. It is fascinating all the same. It highlights the fact

that if there is this understanding, and we believe from the many people

believe spoken to, including Pakistanis that such an

understanding exists, it does depend on the good will of both parties. We

do have information from people, as I say, including on the Pakistani

side that would run counter to the Pakistani Government statement

tonight. The Saudi one very interesting indeed, generally

speaking the Saudi Arabia Government doesn't comment on press stories,

and yet we have this statement tonight that is not in any sense a

denial of our story. In fact it even seems to up the ante

denial of our story. In fact it even is the former ambassador to Saudi

Arabia, and a former members of the US defence policy board is in our

Pittsburgh studio. First of all, the significance of this moment do you

think? I think it is significant in that this has come out publicly, and

publicly due to journalism, but interestingly one asks why at this

time. It may be that the Saudis are not too unhappy at the idea that a

speculation about their ability to acquire nuclear weapons via Pakistan

may suit them when they are anxious about the US commitment to stop

Iran's nuclear ambitions. about the US commitment to stop

Absolutely. We can't blame the United States fully for what's

happening in Riyadh, but we have to be able to say that the retreat that

the US has demonstrated is in 2013 alone by the Obama administration,

from the greater Middle East has been troubling to the Saudis, to the

Israelis, to all of our major allies in the region. We stood by and

watched MUB Barak fall and our inability -- Mubarack fall and our

inability to step in on the Morsi ray genome and that fell. And our

inability to EP gauge with Syria when asked at least two years ago.

With the Iranian talks being restarted, there is a sense by the

Saudis that the US is restarted, there is a sense by the

UN Security Council. If they are some what pleased in looking the

other way as the story floats about a possible nuclear capability in

their own country, I think it is just another example of how

confused, exasperated they are at the United States for not being the

US it once was in the Middle East. Do you think that the Saudis feel

that you know they are not as valuable to the US any more? I think

some of their certainties have disappeared. I think they have been

reliant on a US security guarantee for quite some time. And I think as

they would see it the failure of the US to act on the red line that was

crossed in Syria. Their concern that they may be doing a deal with Iran

and Iran may be pulling the wool over their eyes. I don't think that

is the case but you can see it from a Saudi point of view. The

is the case but you can see it from can't trust Iranian s and they would

be sceptical. There is an opportunity to bring the Saudise on

board and Mike sure think -- Saudis on board by making sure... How? By

talking, engaging and being open with them. Allaying fears, I think

their fears of an absence of a western guarantee are exaggerated.

But it is understandable given the sequence of events given recently

that they should be in that position. We might find ourselves in

a position where there is nuclear capability in Iran, in Pakistan, in

Saudi Arabia and in Israel. What a position that would be in terms of

proliferation? Well, you know, it is game-changer for the whole region.

Because in addition to those countries that you have just

mentioned, others would countries that you have just

perhaps feeling a bit overconcerned about US intentions and its walking

away from some security guarantees. It is interesting to me that this

report has just surfaced now about a nuclear, possible nuclear capability

happening even faster in Saudi Arabia than some anticipated. Given

the fact that only last week it was noted by an interview done within

the New York Times, with our national security adviser, where she

stated that under a new Middle East doctrine the US has really narrowed

and focussed its priorities in the Middle East. Those priorities are an

Arab-Israeli peace deal if possible. Making sure that Syria does not have

chemical weapons and trying to quell that crisis and then finally the

Iranian nuclear talks. # Fly away

The row over the decision by BAe systems to manage three Navy ships

on the Clyde and not Portsmouth, thus end ing shipbuilding there. Has

for the first time brought the Scottish referendum into sharp focus

in the UK. Was it a political decision, or taken on the basis of

the industrial logic as Philip Hammond claimed. No sooner had the

decision been announced, the ministers, including the Scottish

Secretary, made it clear that the contract will not be signed until

after the referendum. So in the event of a yes vote, might

shipbuilding in Portsmouth be resurrected. We spent the day there.

Henry VII built the world's first dry dock for the Mary Rose, the

DRAET NAUT issued a new era in naval warfare. HMS London

from today a very uncertain future. Today's decision sees hundreds of

jobs lost in Portsmouth, many highly-skilled and well-paid. It is

a blow as the decision to build two aircraft carriers Up to Scotland.

Shipbuilding may finish here after more than 500 years. At a staff

meeting today BAe systems told 900 ship builders they would soon be out

of work. Portsmouth will be turned into a centre for high-tech

maintenance and repair, not construction. The decision will

change many lives here six weeks before Christmas.

I came down from the north in 2005 because I had been unemployed

because they closed all the shipyards in the north-east, I have

spent nine years down here. This is the second time I have been made

Royal Navy and that should start to come to an end in 2016. That leaves

the company with far too much spare capacity at the shipyards. The plan

is now to move all remaining work up to Scotland. Hundreds of jobs will

have to go there too, but shipbuilding will continue on the

Clyde. That decision has many in Portsmouth crying foul ahead of a

Scottish independence vote. What people are telling me locally this

morning and through and I have been around my area talking to people,

they believe it is politically motivated. They think this is from

the top in Government with all sides kind of saying you know this is what

we need to do to try to keep people in Scotland on side. But what they

forget is this is the home of the Navy. For mortages mouth then this

is a sharp economic blow at a time when British manufacturing as a

whole is showing real signs of recovery.

whole is showing real signs of I have a little daughter as well.

That is going to be hard for me to supply my daughter. So I'm quite

angry about this. I'm hurt, yeah. It is not just 1,000 jobs, it is 1,000

homes. I just really feel sorry for young boys.

The Government says this isn't a matter of English jobs versus

Scottish jobs, but for workers leaving this site in Portsmouth it

might feel very much like that. Either way a black day for

shipbuilding in Britain. We have been following the political

debate about today's decision. In Portsmouth they certainly think it

is political? Despite the fact that the UK Government, the Scottish

Government, the shipbuilding industry, BAe itself all insist this

is a purely industrial a matter a purely commercial decision. Public

opinion doesn't seem to purely commercial decision. Public

dangers of a "yes" vote. Alastair car Michael said an independent

Scotland , could wave goodbye to contracts like this in the future.

If Scotland removed herself from the United Kingdom, the United Kingdom

would still have those contracts like today within their country. If

Scotland is not part of the country it is difficult to see how the work

would go to Scotland. The Scottish Government argue that

is typical of the "no" campaign that has used fear as the principal

weapon from the beginning, scaring the Scots about the economic dangers

of the yes vote. The Deputy First Minister had this reaction.

of the yes vote. The Deputy First the heart of the UK political

landscape. Is south of the border it is stirring passions. Before when

this was argued the Government would say it is matter for the Scots to

decide. But there is changing there is a growing sense of grievance

elsewhere in the UK that in Scotland there are no prescription charges

and university fees are waved, and -- waved and now there is this

lucrative shipbuilding contract. As the referendum approaches we can

expect more UK-wide political issues to acquire a Scottish referendum

dimension. Rightly or wrongly there is tonight out there a view that 800

years of naval shipbuilding in England is coming to an end to

appease disa-affected Scots. England is coming to an end to

in any of the BAe Conservativeses? This is an industrial decision that

is of course a very politically sensitive one. I really feel for the

hundreds of families in Portsmouth, but also those in Scotland, because

there are job losses there too who have been affected over this

announcement. Did the referendum come up in the conversations about

BAe making a decision? Nobody can make the decisions without what is

happening in Scotland being at the back of their mind. However, right

back three or four years ago. So that is a yes? Three years ago when

a lot of this was bes discussed under the Strategic Defence Review,

BAe were making it clear at that point that they believed Government

-- Scotland was the place to build ships. We have had the huge

programme to build carriers and frigets all of that had to come to

an end. Inevitably there would be day like this. Hundreds of jobs lost

in day like this. Hundreds of jobs lost

the threat being, that a yes vote would mean the contracts could be

reversed whether or not it is the best place to do it, do you back

that?that? 'S say you cannot sign a contract for the next generation of

warshs until you have the design. The words he used was "after the

referendum"? The type 26 that is the big project going beyond this, that

will be decided after the design is completed, later next year.

Conveniently after the referendum. The point being, would you back, as

a Scottish MP, in the position of a yes vote would you back that

contract not coming to Scotland. I don't want to have the idea that

Scotland will separate from the country procuring the Ships. Your

colleague Ian Davidson talked about this decision being reversed in the

event of a yes vote in a referendum. Is that your view too? The important

point is this isn't Scotland versus England, hundreds of people lost

their jobs today in Scotland and the last thing we need is anyone trying

to play constitutional politics with this. Do you realise the uncertainty

of this? Let's have solidarity of workers right across the UK who are

struggling in this really difficult time. Let's put it another way. This

creates a great deal of uncertainty in Portsmouth as well. Because what

I'm asking you is do you agree with yo colleague, Ian Davidson that in

the event of a yes vote this decision should be reversed and

these jobs, because Scotland would not be part of

these jobs, because Scotland would UK. That is why I don't think we

need to contemplate hopefully Scotland will leave the UK, we need

to campaign to leave it in the UK. Let's not make it a constitutional

issue but reflect on the hundreds of families across the UK who have lost

jobs today. And what we don't need is some divide between us and them.

I feel just as much for the workers in Portsmouth as I do for the

workers of Glasgow today. That is what is happening. The divide has

been created. Alan Little says there are more issues in the next nine

months being seen through the prism of the referendum issue? As we

debate it in Scotland it will spill over to the UK. On balance I hope

people say there is a big debate Scots have to have and I hope they

will stay as part of the UK. What does the word

will stay as part of the UK. Ryanair shareholders did, O'Leary is

apparently on a charm offensive. You may be among those who hate it,

but does that stop you using it. In spite of comedy routine, political

attack and "I Hate Ryanair" the website. It carried 80 million

passengers last year. Proof of its cheapness. It gets a mention in the

latest cinematic success. It is free. You have to pay for everything

on Ryanair. For over 15 years Ryanair has shrugged off its

controversial reputation and kept growing. Lately it has had a bit of

a hard landing. In the summer shares hit

a hard landing. In the summer shares nose dived, they have lost a third

of its value. Ryanair has allowed others to steal a March on customer

service -- march on customer service. Others have upped their

levels on a customer-friendly attitude. Ryanair has stuck to the

traditional formula of offering low fares. It has served well down the

years. But it is not working in the same way it used to. Ryanair's

profit warning came after a poll as it was voted the worst brand for

customer service. Fares that end up being far more than the advertised

price, a ?50 fine for failing to print a boarding card, and no chance

to reserve a seat. What's striking about Ryanair's business model is

there is no sense of the customer always being right, let alone the

customer is king. Until now that is something that its chief executive

O'Leary something that its chief executive

says's happy to take the blame for a macho abrupt culture, some of which

may be down, he told shareholders to his own personal character

deformities. And Ryanair should, as he put it, stop unnecessarily

kissing people off. So no more of this then. So in economy it will be

very cheap fares, and in business class it will be beds and bludgeons?

We need fewer people queueing to go to the toilet, how do you do that,

charge them for it? Shareholders are undecided if Ryanair as a business

is climbing or beginning its descent, exactly how Michael O'Leary

plans to reform an airline so closely identified with his own

robust personality, only he can answer.

And Michael O'Leary is here, and much plusher seats than on Ryanair.

You first of all made you only need cheap publicity to

sell them. The piece missing, we have had a fairly minor profit

warnings. Two profit warnings? The profits will be down 10%. Shares

have halved in value? They are up year to date. Instead of us making

?570 million we make half a billion. The reason on the profit warning the

good news is prices are down. The bad news is your shareholders didn't

like the lack of customer service, and they didn't like the image that

the airline was projecting and they thought that was potentially and

indeed bad for business now. You are about to take 150 Boeings, you need

to get better? Absolutely. We can always improve. But we are going to

improve at a time when we are lowering the cost of air travel all

over Europe. We have 81 million people. It is not enough? I have one

of the highest low fare airlines. 1 million people choose to fly with

us. million people choose to fly with

old. You learn as you get older, you mature like a fine wine, but our

prices keep going down. Which is why actually in last Friday we reported

a 6% growth in October traffic and our load factors are up 1%. It is

enough. You spoke to the shareholders, and I think this is

the perfect quote, correct me if I'm wrong of course? Never Kirsty,

surely. "I'm very happy to take the blame or responsibility if we have a

macho or abrupt culture, some of that may well be down to my own

personal character deformities" what are they? I'm some what much

understood. It is not your fault? Of course it is. If there are any

problems in the Ryanair service it is my fault. But character

deformities, that is an interesting expression? What you say in a kind

of wry and ironic sense in a meeting doesn't translate well later on. The

of wry and ironic sense in a meeting it because there is no other service

to the place they want to go. That is a business offering? We have 20%

of our routes we have no competitor, 80% of our routes we have a

competitor, everybody has a choice. 1 million people, put that in

context. Bitter air ways carries -- British Airways carries less than

30% of that. I save those people in one year ?3 billion over the fares

charged by easyJet and 60% over other fares. You can't talk about

fares later talk about it now. That is why people choose Ryanair, low

fares and great service. Tell me, your attitude to women? My what? Who

adverts pulled in 2012, scantily clad women with receipt hot fares

and crew! Let's look at the image of a bikini-clad women in a jet engine.

Is that appropriate to a bikini-clad women in a jet engine.

tone of the company is we offer you lower fares than any other airlines.

And women in bikinis? That is part of the travel industry. I know of

almost no airline. These are not 15-stone women in bikini, they are

this idea that you are selling something? In many cases it is not

as sales. We use price to tell our tickets, we are promoting a charity

calendar that over the last six years has raised 700,000 euros for

charity and this year it will be 100,000 euros for the teenage cancer

trust. It is a joint effort by the cabin crew, nobody criticises the

Women's Institute for stripping naked but if our cab Britain crew do

it and raise money for charity and you condemn it as our attitude to

women. Our attitude to customers is offer lower fares and great service.

The add-ones? offer lower fares and great service.

your choice. I have been in a rayian air clue watching people being

turned away to put their luggage in the hold? All the other airlines

charge forks baggage. What is changing, if doesn't seem you want

to change anything? Some things PEE our customers off, the free seating

is changing it is gone. When you say free seating as in the run for the

plane it is known as, are you going to charge for people to actually

have their seat numbers? You will have the option of paying for

selecting your seat or having a seat allocated to you for free. It will

be your choice. In all cases with our charges they are optional. And

yet we tend to sometimes get hit over the head for charges paid by

less than 0. 1% of passengers. 99. 9% of our passengers have never

will you print it out, we sent you e-mails before the departure and a

text. If you still show up without your boarding card... It is

interesting you are making this huge defence at the moment, having

already admitted to your shareholders that there is a problem

with your attitude, but you seem to have said there is a problem with

your attitude there and then gone away with your fingers crossed

behind your back and saying it is all fine. What we have done is

announced a series of customer service improvement, the recapture

on the website, the free seating and rush for the plane, and not allowing

ladies carry a small handbag on to the plane. We are still lowering the

cost of air travel and saving our customers billions each year, not

millions, billions. Let's turn to another aspect whereof there are

concerns about Ryanair, another aspect whereof there are

whizzle blowing in you like in Ryanair. That really does come back

to the way you lead the airline? Absolute rubbish. The safety

authorities of Ireland issued a statement the following day saying

we have no concerns over Ryanair safety, there is an absolute and

confidential safety reporting system through the airline and safety

authorities, and the Dispatches programme was based on false and

misleading information. You have created and built a successful

airline, but maybe it is over? Europe's favourite airline. What if

the shareholders remain unhappy with your own performance? Who are these

shareholders you are talking to. Will you leave? I will continue to

lead the company until the majority of shareholders ask me to leave.

Thank you very much indeed. In the world of statistics this man is a

rock 'n' roll star, in the era where there is talk of rapid population

growth, he uses hard there is talk of rapid population

Two called Don't Panic. It will continue up to eight and then nine

and then here, it is slowing down, it is slowing down by the end of the

century it is becoming more flat there. And if I do a close up on

this, can you see that we are expecting a slowing down and the end

of as if population growth. The professor is here with me. You are

passionate about it and you have another way of explaining it to us?

I'm showing the world here in 1963 each bubble is a country, the size

is the population, this is China and India, and colours show the region

where they are situated. America, Europe, Africa and Asia. You can see

in 1963 I'm showing the countries here according to a number of babies

per women down here. Small countries had high child mortality

and large families. Look almost no-one inbetween. This has changed.

It has changed immensely. Let me show you. I'm starting the world

here. And you can see how 65, 66 they are falling down, this is China

they start family planning they go to smaller families here, India is

following. This is Brazil and Mexico. They don't care about the

Vatican, they used the condom they got fewer and fewer children, but

first lower child mortality, then smaller families and the entire

world is transforming. We get less and less children per women. African

companies are very successful here. The average number of children per

woman today is 2. 5. Some few countries are lagging behind, they

need contraceptives and more help with child

nothing happened back in history and then it fell like never before. So

we are down at 2. 5 today. This is why when we look at the total

population, these people may be concerned about. But it is the

number of adults, look here the children have stopped increasing.

The implications of that for society you have something low tech to show

us about that. I'm going to show you why the number of children is not

increasing. Where as the number of adults, that is why you have the

increase. To understand this, because this is sort of difficult

and many people think if children stop growing you get population

growth stopping. No, the brakingies stance is 70 years -- the braking

distance is 70 years. This is the two billion children aged up to 15,

distance is 70 years. This is the not missing because they died, they

were never born. What will happen when the number of children will not

increase, the old will die the rest will grow older, the old die the

rest die and get two billion children. And look, without the

longer life, without more children you get three billion more adults.

Thank you very much indeed. The big Twitter launch is set to be the

stock market event of the year, at least if you believe talk it may be

valued as worth as much as $15 billion. It depends what people are

prepared to pay. We look at what's on offer. With Twitter you get 140

characters to tell your story. For the story of Twitter we need four

characters. Jack Dorsey, say the least. This is the story of

our average Silicon Valley start-up. After their last idea crashed and

burned. They were desperate for a new multibillion dollar a year. Jack

Dorsey had an idea of communicating status, what you are up to. You can

see from his original one page of A 4 blueprint, it was a simple idea.

You can see incidentally also he was still a student when he came up with

this idea. The only status options he provides are either "in bed" or

"at the park". It was our friends who built this thing, they wanted to

build a technology that would expect emthem to their -- connect them to

their friends and ended up tearing their friendships apart. Almost from

the moment that Twitter was hatched it became this thing that started to

change the world. It took off instantly, as soon as

change the world. It took off took the job but was persuaded to

move on in 2008, Evan was relieved of the roll and like Biz shunted

into a non-job just eventually stopped coming into the office. Now

the company is on the cusp of its stock market float. With a price tag

of somewhere like $15 billion. It is popular of course, but popularity

doesn't guarantee a business model or sustainable revenues. It is still

losing money. $65 million losses in the last quarter alone. We are

already getting hints of what Twitter might become, you can, right

now send someone a coffee on Twitter, or at least a code they can

redeem at Starbucks. Maybe gift vouchers or cash payments in the

future. Then of course there is advertising. All of this depends on

Twitter remaining popular and making sure that the money making doesn't

get in the way of sure that the money making doesn't

dollars. Evan's shares could net him around a billion dollars, poor old

Biz could only get $10 million. Which leaves Noah, thought to have

almost no shares, he could end up with the start up equivalent of

loose change. Perhaps one of the others will tweet him a coffee. That

is all from us tonight, Jeremy is the pilot tomorrow. Good night.