:00:09. > :00:15.The British economy is growing faster than any other major economy
:00:16. > :00:24.in Europe. Are we back to happier times? Or is this all something of a
:00:25. > :00:29.mirage. There are mutterings from the Liberal Democrats that this is
:00:30. > :00:34.the wrong sort of recovery. Not enough focus on this sort of thing.
:00:35. > :00:39.We forget, made in Yorkshire, made in Britain, that damage sells across
:00:40. > :00:44.the world, we seem to have forgotten about that. Does the Chief Secretary
:00:45. > :00:51.to the Treasury get it? Police are practising for the next round of
:00:52. > :00:56.riot in Ukraine. The opposition have run big concessions already, what is
:00:57. > :00:59.it the protestors want. They are criminals, the Government, our
:01:00. > :01:05.President, all of them, they are criminals. The Government, they
:01:06. > :01:10.offered to resign? ? Is that good enough for you? It is not good
:01:11. > :01:17.enough for me. # Where have all the flowers gone
:01:18. > :01:25.# Long time passing Do you remember, Pete Seeger, one of the great
:01:26. > :01:31.protest singers? We remember him tonight.
:01:32. > :01:36.Just in nice time for the election next year we learn that the British
:01:37. > :01:41.economy grew by nearly 2% last year. Things certainly seem better than
:01:42. > :01:45.they were. But how impressed should we be? If you look at the four
:01:46. > :01:51.quarters of last year, the overall size of the economy grew by one. 9%,
:01:52. > :01:55.making it much larger than it was in 2010 in the midst of the credit
:01:56. > :02:00.crunch. But if you take a longer view, the year before the crash,
:02:01. > :02:05.2007, the economy was consider below bigger. Some parts of the economy
:02:06. > :02:11.are now bigger than they were at the economic peak in early 2008. Here
:02:12. > :02:15.you can see that the service sector, which represents three-quarters of
:02:16. > :02:19.the economy is one. 3% larger. But the production sector, which
:02:20. > :02:24.includes manufacturing and construction is nearly 12% lower
:02:25. > :02:29.than it was in 2008. And the figures also show that the amount we're each
:02:30. > :02:34.producing, GDP per person, hasn't grown at all. Because while more
:02:35. > :02:40.people are employed than for a long while, the people in work aren't
:02:41. > :02:46.producing any more than before. So what to make of it all? Earlier I
:02:47. > :02:49.spoke to the Chief Secretary to the Treasury, Danny Alexander. Who
:02:50. > :02:53.should take credit for this recovery? I think there are a lot of
:02:54. > :02:57.people who deserve credit, primarily it is the workers and businesses of
:02:58. > :03:01.Britain who have worked very hard to create this growth, to help get the
:03:02. > :03:04.economy through the recovery, I think the coalition Government has
:03:05. > :03:07.played a significant role in providing the conditions through our
:03:08. > :03:10.economic plan, dealing with the deficit, and I think we as Liberal
:03:11. > :03:13.Democrats deserve our fair share of the credit for that coalition
:03:14. > :03:16.Government agreements. You would say that, wouldn't you, of course, when
:03:17. > :03:20.times have been bad you have always blamed it on economic head winds or
:03:21. > :03:25.the euro crisis or something or other? Look, the point is, we came
:03:26. > :03:31.into Government with hugely serious economic problems as a country, we
:03:32. > :03:35.put in place when we started a plan, plan that was involving taking a lot
:03:36. > :03:38.of difficult decisions, you are right there have been head winds
:03:39. > :03:43.along the way, head winds from problems within the eurozone,
:03:44. > :03:46.domestic problems in terms of the banking system and financial crisis.
:03:47. > :03:49.I think what we are seeing now is the plan we set out when we started
:03:50. > :03:54.was the right plan for this country for creating the conditions for
:03:55. > :03:59.economic growth. You planned that this growth should be fuelled,
:04:00. > :04:02.essentially, by consumer spending, is that it? You didn't tell the
:04:03. > :04:05.public that? I don't think that is a fair reading of the figures that
:04:06. > :04:10.came out today. When you look at the figures what you see is the service
:04:11. > :04:15.sector has grown by zero. 8% and manufacturing by zero. 9%. We have
:04:16. > :04:18.seen agriculture and so on growing, the construction quarter shrinking
:04:19. > :04:23.but growing strongly across the year. And the whole thing lower than
:04:24. > :04:27.it was in 2008? The economy is still smaller than 2008, that is true.
:04:28. > :04:31.That is a measure of the depth that our economy fell to during the
:04:32. > :04:35.financial crisis. I always said, and you and I have spoken about this a
:04:36. > :04:39.number of times over the years, that it would be a long process of hard
:04:40. > :04:43.work, that hard work is by no means over if we're going to secure and
:04:44. > :04:48.stablise our economy. When do you think we will be at a point above
:04:49. > :04:56.the level in early 2008? I'm not an economic forecaster. We contracted
:04:57. > :05:00.that out. Your forecasts are rubbish? We contracted that out to
:05:01. > :05:02.an independent Office of Budget Responsibility, precisely so
:05:03. > :05:08.politicians conned diddle the forecast. On the OBR forecast they
:05:09. > :05:12.reckon that will be met some time during the calendar year or early
:05:13. > :05:14.into the next one. What matters is making sure we have the conditions
:05:15. > :05:18.in this country now for businesses to invest. One of the weaknesses
:05:19. > :05:23.still in our numbers is business investment. Why aren't they
:05:24. > :05:26.investing, businesses? Business investment has always tended to lag
:05:27. > :05:29.behind a recovery. Businesses have been building up large cash balance,
:05:30. > :05:34.especially large businesses over the last few years, because of
:05:35. > :05:39.uncertainties about the UK economy. Uncertainties about the wider UK
:05:40. > :05:41.economy. Now people can have a degree of confidence in the
:05:42. > :05:44.direction of the UK economy, backed by a Government that has a strong
:05:45. > :05:48.and firm economic plan, I think this is the year to be investing if you
:05:49. > :05:52.are a business that h built up those cash balances over the last few
:05:53. > :05:58.years. Of course your friend, Vincent Cable, has been saying this
:05:59. > :06:00.for ages and ages that businesses have to get around to investing
:06:01. > :06:07.their cash. They didn't take any notice of him or indeed you. What a
:06:08. > :06:11.should they now? What we have been doing as a Government is
:06:12. > :06:14.systematically tackle the problems holding back business investment.
:06:15. > :06:19.Whether that is problems in the public finances, which we are
:06:20. > :06:23.fixing. Whether it is the investment in infrastructure, the skills in the
:06:24. > :06:25.work force, a Compative tax system, bringing the corporation tax down to
:06:26. > :06:30.the most competitive level in the G20. We are creating the conditions
:06:31. > :06:33.in this country for businesses to invest, we will start to see that
:06:34. > :06:38.during the course of the year. Why is our productivity so bad? That is
:06:39. > :06:42.an economic problem known as the productivity puzzle. There are lots
:06:43. > :06:47.of different explanations. Have you solved the puzzle? I don't think we
:06:48. > :06:51.have. It is partly about the fact that during this financial crisis
:06:52. > :06:55.and subsequently, businesses have decided to keep on their staff to
:06:56. > :07:00.maintain their skills in their work force. They have chosen not to
:07:01. > :07:03.invest, and so what you have seen is a period of time where we have seen
:07:04. > :07:08.significant job growth in our economy, but much lower investment
:07:09. > :07:11.in plant and machinery. That causes productivity to be lower. That is
:07:12. > :07:13.why I think this year business investment is so important. That is
:07:14. > :07:17.the way we can increase productivity. It is only bin ceasing
:07:18. > :07:22.productivity that we can raise the living standards of our population.
:07:23. > :07:34.Do you worry about the level of house prices in south-east of
:07:35. > :07:40.England? I think that house In central London, very rapid and large
:07:41. > :07:44.rises in house prices. I think fuelled a lot by investment from
:07:45. > :07:48.overseas. But I think what we have got to look at is what is the
:07:49. > :07:51.condition in the housing market, what are we seeing in terms of
:07:52. > :07:54.construction, because in the end we have to get more houses built in
:07:55. > :07:59.this country. On that measure there are some encouraging signs in terms
:08:00. > :08:02.of our planning reform, in terms of the Government's investment in
:08:03. > :08:06.affordable housing. You have now worked for George Osborne for over
:08:07. > :08:11.three years. You know what his priorities are. You have a clear
:08:12. > :08:16.choice now, Ed Balls has said he wants to raise the top level of
:08:17. > :08:22.income tax to 50%, George Osborne would like to reduce it from what it
:08:23. > :08:26.is now, 40% or something. Now, which of those do you prefer? Well I think
:08:27. > :08:31.we have the position about right at the moment. I think the 45p rate is
:08:32. > :08:35.the right place to stay. But let me say this. Would you consider raising
:08:36. > :08:40.the top rate of income tax to 50%? We debated this as a political party
:08:41. > :08:43.at o conference last September, we decided to stick with the 45p rate.
:08:44. > :08:47.There are a number of reasons for that. Firstly there is no evidence
:08:48. > :08:50.at all that raising it to 50p would raise any money. We think we have
:08:51. > :08:57.better ideas of how to get the wealth to pay more. Isn't it more
:08:58. > :09:00.consumate with your principles, fair next you are always going on about
:09:01. > :09:05.that -- fairness, you are always going on about that? I don't think
:09:06. > :09:09.it is fair to levy tax that doesn't raise money. I think what we have
:09:10. > :09:13.done in Government and what we prodoes to do going -- propose to do
:09:14. > :09:16.going forward in Government. Restricting tax relief wealthier
:09:17. > :09:21.people get on pension contributions. That is a better and more effective
:09:22. > :09:25.way to ensure the better-off are making more contribution. Looking
:09:26. > :09:30.ahead to the election, could you work as Chief Secretary to Ed Balls?
:09:31. > :09:36.Look, the question about the future Government of this country is a
:09:37. > :09:40.matter for the British people. We as exactly as we have said in 2010,
:09:41. > :09:43.whichever party, assuming we have a balanced parliament, I don't see
:09:44. > :09:46.much evidence that either Labour or Conservatives have got the political
:09:47. > :09:51.momentum to win a majority by themselves. We would seek to have
:09:52. > :09:55.discussions with whoever had the strongest mandate. The point I would
:09:56. > :09:58.make though is that when, if you are worried about the economy, and you
:09:59. > :10:02.see the threat that Labour poses with their ideas about the economy,
:10:03. > :10:05.you see the threat that Conservatives pose with the game of
:10:06. > :10:08.chicken they want to play with our largest market in Europe, I think if
:10:09. > :10:11.you are worried about economic stability and strength in this
:10:12. > :10:15.country, you need to make sure the Liberal Democrats are part of the
:10:16. > :10:18.next Government. Whatever the overall way the cards fall in the
:10:19. > :10:21.general election. You don't care who you get into bed with? What I care
:10:22. > :10:25.about is making sure that we have a strong and stable economy, a strong
:10:26. > :10:29.economy and a fair society. I think we're the only party that is
:10:30. > :10:33.committed to both of those things. These are parties that have
:10:34. > :10:36.diametrically opposed views of the world? I have just explained to you
:10:37. > :10:42.some areas where I disagree with both parties. I think that what
:10:43. > :10:46.Labour are saying about taking a lot longer to deal with the country's
:10:47. > :10:50.financial problems would be bad for the economic health of this country.
:10:51. > :10:56.What the Conservatives are saying about increasingly some of their
:10:57. > :10:59.backbenchers taking Britain out of the European Union would be a
:11:00. > :11:05.catastrophic thing for our economy. We have a role to anchor the
:11:06. > :11:08.economics in the next election. And anchor society. If you care about
:11:09. > :11:10.the stability of the British economy, and you want to have the
:11:11. > :11:13.Liberal Democrats in there as part of the mix. So were the largest
:11:14. > :11:17.party to be the Labour Party you would say we will open talks with
:11:18. > :11:25.you but let as you be quite clear, there will be no 50p rate of tax?
:11:26. > :11:28.I'm not going to get into prenegotiation for coalition talks.
:11:29. > :11:31.I can tell you what I think as a Liberal Democrat. And what I think,
:11:32. > :11:35.I don't think there is any strong case for going back to the 50p rate
:11:36. > :11:39.because you would be raising a tax that doesn't raise any money for the
:11:40. > :11:42.country, but sends bad signals about us around the world. Therefore you
:11:43. > :11:47.couldn't be part of the Government that did it could you? I'm not going
:11:48. > :11:52.to get into trying to renegotiate coalitions at this point. What I'm
:11:53. > :11:56.saying to you is my tax priority. Surely wouldn't join a Government
:11:57. > :12:00.going to do something as foolish as that? My tax priority for the next
:12:01. > :12:04.parliament is to make sure that we continue to deliver further tax cuts
:12:05. > :12:11.for people on low and middle incomes. This coming April we will
:12:12. > :12:15.get to that 10,000 tax-free amount that we promised in 2010. I want to
:12:16. > :12:19.go much further. That is what we want to raise money for. I want to
:12:20. > :12:23.make sure the next Government in tackling the deficit, on the path we
:12:24. > :12:26.have set out, also asks the wealthy to make a contribution. I think
:12:27. > :12:30.there are much better ways do that than a 50p rate. Which as I say is
:12:31. > :12:37.ineffective and there are better ways to raise money. While we are in
:12:38. > :12:42.this terrain, do you think walls walls Ed Balls -- Ed Balls could run
:12:43. > :12:46.the economy as well as George Osborne? I don't think that the
:12:47. > :12:49.Labour Party and Ed Balls would have done anything other than a
:12:50. > :12:52.catastrophic job on the economy. I think together the Conservatives and
:12:53. > :12:55.the Liberal Democrats in this parliament have had a good plan for
:12:56. > :12:57.the economy, we have taken tough decisions and came together as a
:12:58. > :13:00.coalition Government. This recovery wouldn't be happening if we didn't
:13:01. > :13:03.have a strong and stable coalition Government. As a Liberal Democrat
:13:04. > :13:07.I'm incredibly proud of the role we have played in making sure we get to
:13:08. > :13:13.this point of strong economic recovery in the UK. Now, if we
:13:14. > :13:17.accept the economy is finally pick up after more than half a decade in
:13:18. > :13:22.the doldrum, where is that growth coming from? Can it continue to
:13:23. > :13:26.create new well-paid jobs? Jim Reid has gone in search of signs of the
:13:27. > :13:41.recovery in Yorkshire and the north-east. This is. Here come the
:13:42. > :13:47.steel workers, nearly seven thousand men and women, these are the men and
:13:48. > :13:53.here is the metal. Just 40 years ago, the UK made twice
:13:54. > :13:58.as much steel as the whole of China. Yorkshire firms, Vickers, Browns,
:13:59. > :14:03.fox's, were all major industrial names. These are the men who are
:14:04. > :14:14.producing the new steels needed to build the engineering and scientific
:14:15. > :14:20.achievements of our age. The days of rolling hills and mass production
:14:21. > :14:27.here might have gone, but 900 workers are left and they specialise
:14:28. > :14:32.in something more cutting edge. Here ?2 million electric forges turn out
:14:33. > :14:38.electric high-quality steel. Metal is melted and remelted until it is
:14:39. > :14:41.strong enough to make parts for the energy and Aerospace sectors. It is
:14:42. > :14:44.a business now taking on staff, after losing a third of its work
:14:45. > :14:50.force in the recession. Last month there were four new orders, three of
:14:51. > :14:54.those from China. You don't want the plane you a flying on to fall out of
:14:55. > :14:57.the sky. The consequence is unthinkable, what you have to do is
:14:58. > :15:02.produce material that does exactly what it says, always, every time the
:15:03. > :15:06.same, and is reliable for the next 25 years. Those applications almost,
:15:07. > :15:09.almost, the price is not the most relevant factor. It is actually the
:15:10. > :15:13.quality, the knowledge, the high-tech. When you look around a
:15:14. > :15:17.site like this you don't see hundreds of steel workers, you are
:15:18. > :15:23.not creating the jobs that maybe the steel industry was 20, 30 years ago?
:15:24. > :15:27.I guess in absolute terms that is absolutely correct, not what it was
:15:28. > :15:30.20 years ago, but the jobs we are creating are actually real high-tech
:15:31. > :15:36.jobs, they are real jobs, they are not zero hour contracts. There are
:15:37. > :15:43.signs the manufacturing sector, in parts of the north, is starting to
:15:44. > :15:46.recover. New figures show 57% of factories in Yorkshire show a rise
:15:47. > :15:50.in orders over the last three months. That is well over the UK
:15:51. > :15:56.average, and ahead of London and the south-east. Specialist engineering
:15:57. > :16:00.has been enjoying a quiet resurgence in this region. Sheffield university
:16:01. > :16:05.has been working with companies like Tata, but also Boeing and
:16:06. > :16:08.Rolls-Royce to develop new products and manufacturing techniques. The
:16:09. > :16:13.people behind the project say it is about more than trading off
:16:14. > :16:18.Yorkshire's industrial heritage. The issue we have is we cannot committee
:16:19. > :16:23.with the eastern European block, or China, particularly on price. We
:16:24. > :16:29.have had to go for quality. What we have here we forget, made in
:16:30. > :16:32.Sheffield, made in Britain, made in Yorkshire, that badge sells across
:16:33. > :16:36.the world, and we seem to have forgotten about that. All of a
:16:37. > :16:45.sudden we have remembered that and that sells. The charm of Newcastle
:16:46. > :16:53.lies in its virility, the four great bridges overriding the city, yes,
:16:54. > :17:05.virility with a capital "V", that's Newcastle. Another city with a proud
:17:06. > :17:10.industrial past, from mining to shipbuilding to rail. This tunnel
:17:11. > :17:15.deep beneath Tyneside was built to take coal from Newcastle and ship it
:17:16. > :17:19.to every corner of the world. In 150 years since it has closed the local
:17:20. > :17:23.economy has really had its highs and lows. In the last recession this
:17:24. > :17:27.region lost more public sector jobs than any other part of the UK. But
:17:28. > :17:38.again, the economic picture is starting to look a bit different.
:17:39. > :17:41.This is a project we have been developing ourselves as a team. And
:17:42. > :17:46.we have been using the environment around us. So this is you know the
:17:47. > :17:51.famous bridge in the centre of Newcastle at the bottom of Dean
:17:52. > :17:55.Street. This fantasy version of Gateshead was created by a local
:17:56. > :17:59.digital arts company, Ron lost his job in 2009, so he gambled and
:18:00. > :18:06.started up his own firm in the middle of a recession. It now makes
:18:07. > :18:12.images for big budget films and games. Can you see here how it was
:18:13. > :18:15.reduced into the painting. This firm has just opened an office in South
:18:16. > :18:20.Africa and is planning to grow its work force by a third this year. If
:18:21. > :18:23.you are a big sort of lumbering London company and agency who has a
:18:24. > :18:28.lost of staff and overheads it is very hard to then suddenly cut
:18:29. > :18:33.prices or produce something that is competitive. I think there is an
:18:34. > :18:43.unfair sort of view of the north from the south, that it isn't all
:18:44. > :18:48.like you know delap dated factories and kids ddelapidated factories and
:18:49. > :18:51.kids running around with no shoes! It is high-tech business here and we
:18:52. > :18:55.are able to stand our own against any company in the world these days.
:18:56. > :19:00.The latest figures showed the last time companies in the north-east was
:19:01. > :19:06.this optimistic was back in 2003. But growing confidence doesn't yet
:19:07. > :19:09.mean widespread job growth. Unemployment here is still twice
:19:10. > :19:13.what it was before the recession. I think a lot of the growth is taking
:19:14. > :19:16.place in the main core cities, Manchester, Leeds, Sheffield,
:19:17. > :19:22.Newcastle and Liverpool. But those are some of the places where we're
:19:23. > :19:27.seeing high growth, innovative businesses. But we have concerns
:19:28. > :19:33.that some of those sectors, if you like, are very much at the high end.
:19:34. > :19:38.And we need jobs across the board in the north of England. We need to see
:19:39. > :19:44.lots of jobs and not just a few jobs in the high-tech companies. There
:19:45. > :19:49.might then be some signs of optimisim in cities like Newcastle.
:19:50. > :19:53.But with so much lost ground to make up, it may take a while until this
:19:54. > :20:03.recovery starts to feel it is built to last. Here now in the studio are
:20:04. > :20:12.Stephaine Flanders, formally the BBC editor, and also with us Ruth Glee,
:20:13. > :20:16.director and adviser at the Arbuthnot Banking group. Are you
:20:17. > :20:19.impressed by the growth figures? It is good news, we always make the
:20:20. > :20:23.mistake in economics when things are going well we expect the good times
:20:24. > :20:27.to carry on forever. When things are going badly, as they have for so
:20:28. > :20:32.long in recent years, a year ago, when I was still in my old year,
:20:33. > :20:37.people were wallowing in the gloom and dispond dennedcy, and they came
:20:38. > :20:40.-- dispondancy, and they came around to the idea that the economy
:20:41. > :20:44.wouldn't grow again. It is growing again. We are taking time to catch
:20:45. > :20:48.up with the optimisim. I wasn't asking whether it is good or bad
:20:49. > :20:53.news, are you impressed? I think it is very good news. I'm not
:20:54. > :20:57.particularly impressed. We're quite to grow by well over 3%, but I don't
:20:58. > :21:01.think that will be a moment when we should say we have gone to heaven. I
:21:02. > :21:06.think we forget this is a normal rate of growth. We have not gone to
:21:07. > :21:09.heaven, but I am impressed by it. I must say when peop talk about this
:21:10. > :21:14.is the wrong sort of growth because it is consumer led, I think hang on
:21:15. > :21:17.a minute most recoveries are consumer-led to start with. They
:21:18. > :21:22.talk about investment, investment only responds when you have growth.
:21:23. > :21:26.Growth doesn't lead recovery it lags recovery. I think too I'm encouraged
:21:27. > :21:30.that this particular recovery is reasonably sustainable. Afterall the
:21:31. > :21:36.labour market is behaving extremely buoyantly. Employment was up 280,000
:21:37. > :21:40.in the three months from November, compared with three months earlier,
:21:41. > :21:43.it was 450,000, higher than a year earlier. These are encouraging
:21:44. > :21:49.numbers. But people aren't better off? That is to come, and obviously
:21:50. > :21:53.at the moment you have still got inflation running ahead of earnings
:21:54. > :21:57.growth. Inflation is 2% and earnings growth less than one. With any luck,
:21:58. > :22:01.as commodity prices are weakening, inflation should weaken, and as the
:22:02. > :22:07.economy continues to recover, assuming it does, the Lea labour
:22:08. > :22:12.market will tie in a wage settlements and earnings will tie
:22:13. > :22:16.in. Do you see it in the same way? I think it is important to remember
:22:17. > :22:19.how far we have come in terms of living standards. Even just a few
:22:20. > :22:23.weeks ago when inflation finally went back to target. There is all
:22:24. > :22:27.this conversation about Labour is wrong to be focussing on living
:22:28. > :22:31.standards because we have had one month where inflation is lower than
:22:32. > :22:36.wages. There is a danger, I think, that we get a year zero problem. We
:22:37. > :22:44.don't remember the fact that we have actually had many years of very,
:22:45. > :22:47.very low growth. It has taken us an extraordinary long time to get to
:22:48. > :22:50.where we are, and people have been hit with living standards. And
:22:51. > :22:53.people talk a lot about productivity, that puzzle and people
:22:54. > :22:57.worrying about why workers are not making more and why we are not able
:22:58. > :23:00.to make more per head is actually the flip side of the living
:23:01. > :23:04.standards issue. You can pay workers more when they are making more. I
:23:05. > :23:10.asked Danny Alexander about this, he didn't seem to know what the answer
:23:11. > :23:13.was? Officially we don't know. I think it is growth, as the economy
:23:14. > :23:19.continues to grow one should get catch up on productivity. There is
:23:20. > :23:21.another side to the coin on the productivity, that is the labour
:23:22. > :23:25.market has done better than most people expected. I expected
:23:26. > :23:30.unemployment to rise far more than it did during the great recession.
:23:31. > :23:37.When GDP at one point was over 7% down on the peak. We mustn't regret
:23:38. > :23:43.that. It is still below the peak? It is, but by the second half of the
:23:44. > :23:49.year it will be back to the 008 level. You can't have it both ways,
:23:50. > :23:54.you can't have a buoyant economy and jobs. If you take your pick I would
:23:55. > :23:58.prefer lower productivity and more people in jobs, and as the economy
:23:59. > :24:02.recovers you hope to get that other growth in. Why? Because I prefer
:24:03. > :24:05.people to stay in jobs? You want them to stay connected to the labour
:24:06. > :24:10.market. But there is a genuine puzzle. I hope growth will be the
:24:11. > :24:14.answer to the productivity problem. But you know, it was perfectly
:24:15. > :24:18.reasonable. The Bank of England has done a terrible forecasting job, and
:24:19. > :24:22.you rightly pointed that out to Mark Carney the other day. But when the
:24:23. > :24:25.Bank of England was making that forecast about how slowly
:24:26. > :24:30.unemployment would fall, they weren't the only ones. They were
:24:31. > :24:35.assuming it would take a long time and would be an historically low
:24:36. > :24:39.recovery of productivity. We haven't had that, we have had employment go
:24:40. > :24:43.faster than output. It is a genuine puzzle. We have to hope the Bank of
:24:44. > :24:47.England gets the room to test out how to let the economy find that
:24:48. > :24:53.capacity. It is a lot slower here than some places elsewhere? Put it
:24:54. > :24:57.this way, we are now growing faster than the eurozone. That is good
:24:58. > :25:05.news. Come on, let's cheer up for goodness sake! Come on. But I think
:25:06. > :25:13.there were dreadful head winds, and merit veining king -- Mervyn King
:25:14. > :25:16.used to talk about it. It was about the terrible crash in the banking
:25:17. > :25:20.sector which is slowly only recovering. And the European market
:25:21. > :25:26.doesn't seem to be doing terribly well. We had the period of fiscal
:25:27. > :25:32.consolidation. You had these three dreadful head wants the economy had
:25:33. > :25:35.to push against. It was the Bank of England's superloose monetary policy
:25:36. > :25:40.that has managed to push the whole thing. This is a test year, this is
:25:41. > :25:43.a year for not just the UK but across the world, it is a year where
:25:44. > :25:48.the excuses have run out. The he can ten waiting circumstances for this
:25:49. > :25:53.-- extenuating circumstances for this slow recovery is starting to
:25:54. > :25:59.run out. I hope we will seeks port and growth come back, but if in a
:26:00. > :26:03.year or two's time we don't see those things and seeing relatively
:26:04. > :26:08.slow growth elsewhere, we have to talk about structural change. I
:26:09. > :26:13.think the eurozone is condemned to a period of slow growth. The IMF
:26:14. > :26:16.thinks so too. If we stopped the conversation 30 seconds ago I could
:26:17. > :26:21.have said two cheerful economist, I can't do that now. I'm still
:26:22. > :26:24.cheerful, relatively. You have to be cheerful but also trying to get that
:26:25. > :26:29.lost capacity, that lost growth back, let's not forget about it.
:26:30. > :26:34.Absolutely. The man David Cameron chose as his head of communications
:26:35. > :26:37.sat and listened to a recording of a private phone conversation between
:26:38. > :26:41.two actors who were having an affair. Andy Coulson exclaimed it
:26:42. > :26:45.was brilliant and then organised to try to hide the fact that he had
:26:46. > :26:49.heard it at all. At least he did, if the court believes the account given
:26:50. > :26:53.today at the phone hacking trial at London's Old Bailey. The Prime
:26:54. > :26:58.Minister has promised a profound apology if it turns out that Andy
:26:59. > :27:02.Coulson was party to phone hacking, which Mr Coulson of course denies.
:27:03. > :27:12.Our man on the press benches is Steve homosexual lit. -- Hewlett.
:27:13. > :27:17.SMEI That was the sub tense of a message allegedly left by Siena
:27:18. > :27:21.Miller, on the voice mail of her secret lover, actor Daniel Craig.
:27:22. > :27:26.The Old Bailey was told it had been hacked and recorded by a News of the
:27:27. > :27:30.World report e and it was the proof that the paper's editor, Andy
:27:31. > :27:34.Coulson, had been waiting for. "Brilliant" is what Coulson is
:27:35. > :27:38.alleged to have said when he was played the phone hacked message by
:27:39. > :27:43.the man who had recorded it and who has gone on to become the star
:27:44. > :27:46.prosecution witness. He's also the first self-confessed phone hacker to
:27:47. > :27:51.come to court and give an account of what he did. Which is why he's so
:27:52. > :27:54.central to the crown's case against Andy Coulson, which is that he
:27:55. > :27:59.didn't just know about phone hacking at his newspaper, but was thoroughly
:28:00. > :28:03.complicit in it. Dan Evans claimed to have learned the dark arts of
:28:04. > :28:06.phone hacking, not at the News of the World, but at the Sunday Mirror
:28:07. > :28:10.were it served him very well, story-wise. It didn't take long for
:28:11. > :28:16.the News of the World to come knocking. But an initial attempt to
:28:17. > :28:20.poach him failed. However a subsequent approach, from a senior
:28:21. > :28:25.journalist, who we can't name for legal reasons, led to a breakfast
:28:26. > :28:30.meeting, over scrambled egg and smoked salmon, here at the central
:28:31. > :28:33.London hotel, between Dan Evans and Andy Coulson. Dan Evans told the
:28:34. > :28:54.court: That, Evans told the court was a
:28:55. > :28:58."kerching" moment, within ten minutes of the meeting ended he had
:28:59. > :29:03.got the job. And the News of the World had hired another expert phone
:29:04. > :29:08.hacker. The pressure to deliver scoops was, Evans said, intense. He
:29:09. > :29:13.found life there tough. He told the court how after an enormous
:29:14. > :29:18.rollicking of a senior colleague, he went home and spent the entire
:29:19. > :29:24.weekend hacking celebrities' phones. Which is where Siena Miller's
:29:25. > :29:31.personal message to Daniel Craig, which so thrilled Andy Coulson, came
:29:32. > :29:33.from. He went further, accusing Coulson of masterminding a programme
:29:34. > :29:52.to cover the phones. Andy Coulson of seen making notes
:29:53. > :29:57.and shaking his head during today's proceedings. Evans, who has already
:29:58. > :30:01.admitted phone hacking, also has previous convictions for possession
:30:02. > :30:06.of drugs and whilst at the News of the World used cannabis, cocaine and
:30:07. > :30:10.ecstacy. His cross-examination by Coulson's legal team is due to start
:30:11. > :30:18.tomorrow. All the defendants deny the charges against them. God knows
:30:19. > :30:24.what it seems like if you are one of the unfortunate people trapped by
:30:25. > :30:31.the Civil War in Syria. But the piece -- Pacific talks broke off
:30:32. > :30:35.early today with both sides unable to get past the sticking point of
:30:36. > :30:42.what a transitional Government looks like. Nothing is done to evacuate
:30:43. > :30:49.the trapped and wounded from some of the more intense fighting. One of
:30:50. > :30:57.those behind closed doors is a Syrian minister. Good evening to
:30:58. > :31:06.you, Faisal Mekdad. Good evening. Why were these talks ended early
:31:07. > :31:11.today? In fact today's talks did not end early, but there were no
:31:12. > :31:18.traditional consultations in the afternoon. In today's session the
:31:19. > :31:25.delegation of the Syrian Arab Republic tried to discuss deeply and
:31:26. > :31:34.to go into the heart of the matter, but when we protested the fact that
:31:35. > :31:37.the United States has resumed arming the armed groups and this was a
:31:38. > :31:43.decision announced today or yesterday. The other party refused
:31:44. > :31:49.to discuss this issue. We believe this is a bad message by the
:31:50. > :31:52.Government of the United States and we believe that the US
:31:53. > :31:57.administration should be more serious, and it should not be arming
:31:58. > :32:06.armed groups or terrorist groups. So when will the talks resume? They
:32:07. > :32:09.will resume tomorrow morning. The United States position won't have
:32:10. > :32:19.changed by tomorrow morning will it? No, it will not change. But at least
:32:20. > :32:24.we have put before the mediation, before the meeting and before the
:32:25. > :32:34.public international opinion what the United States is doing to harm
:32:35. > :32:40.and influence those talks. In a way that may harm the interests of the
:32:41. > :32:46.Syrian people. We don't need arms what we need is peace talks. The
:32:47. > :32:52.opposition group have put forward their proposition which demand
:32:53. > :32:56.Syria, a democracy with a rule of law, reconciliation between the
:32:57. > :33:00.opposing sides, guarantee of human rights. What could you possibly
:33:01. > :33:06.object to in all of that? We didn't object to any of these things. In
:33:07. > :33:13.fact yesterday we presented a paper that includes, among others, these
:33:14. > :33:19.very points. But it was totally rejected by the opposition. In fact,
:33:20. > :33:25.we want to go directly for discussions about concrete issues
:33:26. > :33:28.but step by step to build a consensus and to tell the Syrian
:33:29. > :33:34.people that we are advancing before we go to the very heart and core
:33:35. > :33:40.issues. What is the feeling there, do you think that there is a belief
:33:41. > :33:49.in these talks, that there will be a peace settlement at the end of them?
:33:50. > :33:53.In fact we are coming determined to achieve peace. Because for the last
:33:54. > :33:59.three years we have been working to achieve this objective, but frankly
:34:00. > :34:06.speaking some misinformation has been taking place all the time. That
:34:07. > :34:09.has led to some big fragments of the international public opinion that we
:34:10. > :34:14.are not for peace. But we are here, now, in Geneva, for this conference,
:34:15. > :34:18.to achieve peace, and we shall try do it as soon as possible. In the
:34:19. > :34:22.meantime, of course, you have all these unfortunate people trapped by
:34:23. > :34:28.the fighting, now I believe you said that women and children can leave
:34:29. > :34:34.the city of Homs, is that correct? Absolutely. In fact they should have
:34:35. > :34:40.left, yes, yes of course. I have been directly involved in this file
:34:41. > :34:43.for the last two years. This is not a new issue, I don't know why the US
:34:44. > :34:48.administration is emphasising this issue since the beginning of these
:34:49. > :34:53.talks. It is partly I think because... Let me just ask you a
:34:54. > :34:58.specific point if I may. The point is, you are saying that the men
:34:59. > :35:04.there must register their names with you y do you want their names? --
:35:05. > :35:10.why do you want their names? We don't mean the men, we mean the
:35:11. > :35:13.fighters. Amnesties have been declared in all parts of Syria, and
:35:14. > :35:21.lists of names have been given in all parts of Syria, we shall allow
:35:22. > :35:25.women and children to leave without any conditions. As far as fighters
:35:26. > :35:29.are concerned, we have to know who these people are so they don't go
:35:30. > :35:36.outside and shoot other people in other places in Syria. It is only
:35:37. > :35:43.for the departure of this these men. Who will determine whether they are
:35:44. > :35:47.civilians or fighters? Frankly speaking in the recent amnesties,
:35:48. > :35:54.declared by President Assad, the only precondition we wanted was that
:35:55. > :36:04.they give up their arms and live and be free Syrians. So you don't want
:36:05. > :36:07.their names. We need their names to distinguish between those who are
:36:08. > :36:14.killing innocent people and those who are innocent. But once they give
:36:15. > :36:19.their games, we are will be clear who are these people who have been
:36:20. > :36:23.trying to leave because they have been taking citizens in Homs hostage
:36:24. > :36:27.for at least one-and-a-half years. The protest in the Ukraine brought
:36:28. > :36:31.down the Government there today. With the Prime Minister and all of
:36:32. > :36:37.his cabinet quitting. Though President Yanukovych is still in
:36:38. > :36:42.post. It will still be a bold person who chooses to predict how this
:36:43. > :36:46.confrontation between those who want a European future and those leaning
:36:47. > :36:51.towards Russia turn out. Things seem to be moving, the capital Kiev has
:36:52. > :36:55.been the arena for many of the protests, but it is not of course
:36:56. > :37:00.the country. We sent Gabriel Gatehouse to eastern Ukraine where
:37:01. > :37:07.you night expect to find more pro-Russian feeling. Here they are
:37:08. > :37:12.building barricades out of snow. But these are not protestors. These are
:37:13. > :37:18.the riot police. Fortifying local Government offices against the
:37:19. > :37:24.threat of attack. This city was once a centre of Soviet rocket
:37:25. > :37:28.manufacturing. It's Ukraine's pro-Russian industrial heartland,
:37:29. > :37:32.where the people and the oligarchs have been traditionally been solidly
:37:33. > :37:35.behind the Government. While the demonstrations were contained in the
:37:36. > :37:40.capital, Kiev, the Government felt like it could handle the situation.
:37:41. > :37:44.But then last week, following that violence, the demonstrations moved
:37:45. > :37:48.west, into opposition heartland and some of the protestors even seized
:37:49. > :37:53.local Government buildings. Now they have come east, and this week a mob
:37:54. > :38:00.tried to storm the local Government headquarters. Hundreds of young men,
:38:01. > :38:06.most of them armed with clubs and rocks, attacked the police. Both
:38:07. > :38:11.sides took casualties, several policemen were seriously injured,
:38:12. > :38:15.one is still in a coma. The rioters were eventually dispersed and dozens
:38:16. > :38:21.were arrested. But the authorities were rattled. We spoke to somebody
:38:22. > :38:26.who knows just how rattled they are, this woman is an insider, part of a
:38:27. > :38:32.team of close advisers to the President. TRANSLATION: It was only
:38:33. > :38:37.when violent protests broke out in the province, when people started
:38:38. > :38:40.taking over Government buildings that those in power started taking
:38:41. > :38:44.the demonstrations seriously. Then they realised they had a big problem
:38:45. > :38:53.on their hands. That they were losing the electorate, in one region
:38:54. > :39:02.after another. And so, this afternoon, at a trap -- tram spot,
:39:03. > :39:09.they digested the latest concessions, the Prime Minister and
:39:10. > :39:15.the entire cabinet quit. The repressive laws that caused the
:39:16. > :39:20.protest were repealed, an argument breaks out. This lady says get rid
:39:21. > :39:23.the demonstrator, under no circumstances says the gentleman,
:39:24. > :39:26.let the people come out and demand their people. Another woman
:39:27. > :39:33.dismisses him and says the President has been far too soft on the
:39:34. > :39:37.protesters, she said. But in Ukraine real political pressure comes not
:39:38. > :39:42.from the bottom but the top. It was a public intervention late last week
:39:43. > :39:52.by an oligarch, Ukraine's richest man, that prompted the President to
:39:53. > :39:55.compromise. TRANSLATION: He can't ignore the oligarchs, that is
:39:56. > :39:58.impossible, they are too powerful. Yanukovych won the last elections,
:39:59. > :40:03.not because he was hugely popular with the electorate. We He won
:40:04. > :40:10.because he had the strong support of the oligarchs. Today we saw
:40:11. > :40:14.policemen in training, preparing to protect Government buildings from
:40:15. > :40:19.attack. But the more pressing threat to President Yanukovych is that he
:40:20. > :40:23.could lose his financial backers. We have spoken to people close to two
:40:24. > :40:26.of Ukraine's most prominent oligarchs, both said they were
:40:27. > :40:34.unhappy with the President's handling of the crisis. And on that
:40:35. > :40:40.point, for once, the oligarchs seem to be in tune with the protesters on
:40:41. > :40:43.the street. Here their numbers may be small compared to Kiev, but they
:40:44. > :40:47.are no less vocal and they are clear. Today's concessions are not
:40:48. > :40:53.enough. They want the President to go. They are criminals, you know,
:40:54. > :40:57.the Government, our President, all of them they are criminals. The
:40:58. > :41:05.Government today offered to resign? Yes. Is that God enough for you? It
:41:06. > :41:11.is not good enough for me. This is unfamiliar territory for Ukraine,
:41:12. > :41:14.the old assumptions of the divide between east and west and Russia and
:41:15. > :41:19.Europe are being thrown into question, the allegance of the
:41:20. > :41:24.oligarch seems to be in flux, one things seems clear is the centre is
:41:25. > :41:29.struggling to hold. As the politicians in Kiev try to pull this
:41:30. > :41:33.country back from the brink, here the police prepare for another long,
:41:34. > :41:38.cold night outside the local Government headquarters, their riot
:41:39. > :41:41.shields propped up like tomb stones in the snow.
:41:42. > :41:45.Radio stations across the land have been filled with protest songs
:41:46. > :41:55.today, marking the death of one of the great political tub -- truers.
:41:56. > :42:01.Pete Seeger was nine # and difficult to the end. Only a cop -- 90 and
:42:02. > :42:08.difficult to the end. Only a few years ago he was processing through
:42:09. > :42:14.Manhattan on an occupy Wall Street march.
:42:15. > :42:20.# Me and my wife # Went all over the town
:42:21. > :42:22.# Everywhere the people turned us down
:42:23. > :42:33.Pete Seeger performing a song from the civil rightseria about
:42:34. > :42:38.segregation in hotels. He fell foul of senator McCarthy in the 50s, but
:42:39. > :42:44.he later saw himself and the old Red Square man as ying and yang. Every
:42:45. > :42:57.establishment in the world needs a good opposition to be healthy. Just
:42:58. > :43:03.like the moose population need the animals to harass them. We discussed
:43:04. > :43:09.Seeger with whispering with Bob Harris and what do you know. I'm
:43:10. > :43:17.part of the 60s generation that grew up with Bob Dylan and the protest
:43:18. > :43:23.singers of the mid-1960. Of course Pete Seeger was the God fathering of
:43:24. > :43:29.that entire movement. He's also massively important figure in terms
:43:30. > :43:43.of the shaping of American music as we know today. After te Seeger's
:43:44. > :43:50.salad days, it became a little less folksy.
:43:51. > :43:56.# Get up stand up # Don't give up the fight It
:43:57. > :44:03.continued to address issues, including racism, equality. The
:44:04. > :44:08.Vietnam War. # Brother, brother, brother
:44:09. > :44:11.# There is far too many of you dying I believe very strongly this general
:44:12. > :44:15.election is a very, very important general election, not only for the
:44:16. > :44:19.Labour Party but for democracy as a whole.
:44:20. > :44:23.# Stand down mam # Stand down please
:44:24. > :44:28.Some veterans of the struggle and other struggles are available, say
:44:29. > :44:33.the kids of today aren't up for a good protest song. This generation
:44:34. > :44:39.has other medium available to it. Social media and I think that the
:44:40. > :44:46.idea of music taking that vanguard role again we may not see that. But
:44:47. > :44:53.others claim to hear a protest message from even the most
:44:54. > :44:58.comfortably off of today's stars. You believe racism is a problem it
:44:59. > :45:00.doesn't matter if you are a multi-millionaire black man you will
:45:01. > :45:05.still make the point that feminism is still necessary. You may be as
:45:06. > :45:11.rich and powerful as Beyonce, that is still a point you want to make.
:45:12. > :45:16.# It's raining men Finally pop pickers this track is
:45:17. > :45:21.set to climb the charts again. Coopted by gay rights campaigners
:45:22. > :45:25.after UKIP meteorologists blamed the bad weather on same-sex marriage!
:45:26. > :45:32.That is it for tonight. We will leave you with the musician Frank
:45:33. > :45:37.Turner playing tribute to Pete Seeger, with playing We Shall
:45:38. > :45:48.Overcome, one of the songs he was most closely associated with.
:45:49. > :45:58.# We shall over # We shall overcome
:45:59. > :46:06.# Some day # Oh deep in my heart
:46:07. > :46:16.# I do believe # We shall overcome
:46:17. > :46:29.# Some day # And we'll walk hand in hand
:46:30. > :46:37.# We'll walk hand in hand # Some day
:46:38. > :46:47.# Oh deep in my heart # I do believe
:46:48. > :46:52.# We'll walk hand in hand # Some day
:46:53. > :47:09.# And we are not afraid Lord # We are not afraid today
:47:10. > :47:20.# Deep in my heart # I do believe
:47:21. > :47:26.# We shall overcome # Some day
:47:27. > :47:28.# And we shall overcome Lord # We shall overcome
:47:29. > :47:40.# We shall Hello again, showers continuing
:47:41. > :47:47.through the get, we will have a lot of cloud tomorrow with showers and
:47:48. > :47:50.long spells of rain, we will pick up the easierly, and showers
:47:51. > :47:51.particularly over the hills. Showers moving away