16/12/2015 Newsnight


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

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Tonight, six months after Newsnight revealed Yemeni civilians could have


been killed by British weapons sold to Saudi Arabia -


the UK Government faces possible legal action.


The UK has a very clear legal regime.


That legal regime says the UK won't provide licenses for arms


exports if there is a clear risk there may be violations


Newsnight has the full story, including how the Foreign


Secretary's interview on this programme could form


And we'll speak to the former Business Secretary,


who, while in government tried to stop British weapons


The US Federal Reserve hikes interests for the first time


We'll ask whether it could be too soon for the global economy.


Our series on the faces of the migrant crisis continues.


We find the Syrian father and son tripped up by


When you watch this, how do you feel? Of course, I am very angry. I


feel very angry. There is a very real prospect


of the Government being taken to court over sales of weapons


to Saudi Arabia which is leading a coalition in Yemen against rebel


fighters in a conflict which has cost almost 6,000 lives,


among them many civilians. The issue is whether these weapons,


in particular laser guided bombs, have been involved in civilian


deaths, a question that arose in a Newsnight interview


with the Foreign Secretary. Now Lawyers for Campaign Against


the Arms Trade says the UK Government is in breach of UK,


European and International law. A separate legal opinion,


prepared for Amnesty International, and seen by Newsnight,


says the UK is in breach of its own legislation,


including the Arms Trade Treaty, You may find some images


in this film distressing. Yemen has been under almost constant


bombardment since March. A coalition led by Saudi Arabia has


been trying to defeat a rebel army. Both sides have been


accused of war crimes. Now lawyers say Britain could be


breaking the law for selling the bombs that the


Saudis are dropping. On the night of July 24th,


coalition warplanes repeatedly struck a residential compound


in the port city of Mokha. At least 65 civilians were killed,


according to human rights watch, who collected this footage


and visited the site The group says the compound


was merely a column to away The strike on Mokha is one of many


incidents where civilians have been targeted in Saudi led air strikes.


We saw remains of water bottling site that had been struck. A teenage


boy was killed. The Saudi led campaign has the backing of the UN


security council, which gives it legitimacy under international law.


The UK supports the coalition and, along with the United States and


others, has been supplying weapons used in the conflict. Attacks


directed against civilians awesomely and objects constitute grave


violations of international, humanitarian law. The UK has a very


clearly gory shoe. That regime says the UK will not provide licenses for


armed exports. -- Berry clear legal regime. The facts on the ground of


what is happening in Yemen suggest there is that clear risk. The


Government has continued to grant export licences for arms sales to


Saudi Arabia for use in Yemen. Lawyers for the group campaigning


against the Arms trade told us they will take the Government to court


unless it stops. From the very beginning, the response by the


British government has been to say they have received repeated


assurances from the Saudis that British weapons are being used in


accordance with international law. Privately, I have been told the


Government lawyers and officials are very worried indeed about the


possibility of a legal challenge. At issue is whether the UK has done


enough to satisfy itself that British weapons are not being used


to commit war crimes. That is a requirement under the arms trade


Treaty which David Cameron champion Tim came into force last year. A key


piece of evidence cited by the lawyers came in an interview on


Newsnight with the Foreign Secretary. The Saudis deny there


have been any breaches of international humanitarian law. That


denial alone is not enough. We need to seek proper investigations. That


admission is significant say authors of the separate legal opinion


prepared by Amnesty International. The British government has confirmed


it is aware of the allegations that the violations of international law


are being committed on the ground in Yemen. It is also aware that the


assurances being given by the Saudi authorities are perhaps not


watertight. That heightens the degree of scrutiny be ought to be


applying in the determination of whether any new weapons should be


supplied. The 90 page legal opinion concludes: on the basis of the


evidence available to ask any authorisation by the UK the transfer


of weapons or other items to Saudi Arabia in circumstances where such


weapons are capable of being used in the conflict in Yemen would


constitute a breach by the UK of its obligations under domestic, European


and international law. The Saudis have consistently denied


targeting civilians. They point out their campaign comes at the request


of Yemen's internationally recognised government against a


rebel force, who themselves stand accused of violating the rules of


war. Britain is not supplying weapons to the Huthis. A spokesman


told us... Yemen is in the grip of one of the


world's worst crises. Apart from the Blom -- the bombing, public aid by


coalition forces has caused acute shortages. A shaky ceasefire in


place since yesterday has already been violated. The Government should


use its influence to make sure the ceasefire holds. We have


considerable influence with the Saudi regime and the coalition.


Making sure the ceasefire holds is the best way of stopping the


apparent division in government policy. On the one hand blockading


the ports, which is what the defence and foreign affairs are trying to


do. The humanitarian and development wing in the British government is


trying to get food, medicine and fuel in through the same ports. The


Arms trade Treaty was supposed to make civilians save her in war


zones. It was backed enthusiastically by the British


government. The first test may be in Yemen, concerning the use of British


weapons. We did ask the Saudi government onto the programme


tonight but that request was declined.


Joining me now in the studio is the former Business Secretary Sir


Vince Cable, and from Geneva, Sir William Patey, the former UK


Good evening used by the lawyers are clear risk.


As Business Secretary can you have real concerns about the guided laser


bombs. What did you do about it? Let me just go back a little bit. Very


few arms contracts for Saudi Arabia and anywhere else. By me or


questioned by ministers. There is a clear framework of law. There are


relatively few cases that are actually very controversial. I do


challenge and indeed blocked this particular sale of basically bombs


for the aircraft. Largely because of a report that I had heard about


for the aircraft. Largely because of the time which was uncorroborated


for the aircraft. Largely because of but seemed plausible about bombing


of hospitals. I challenge that. had a detailed set of conversations


with government during the had a detailed set of conversations


campaign. We're not in our offices. I was assured eventually, by the


Defence Secretary, who went this in some detail, that British


embedded personnel this in some detail, that British


and we have people who are very closely involved with the


and we have people who are very the Saudi air force activities on


the same basis the Saudi air force activities on


currently have. I was satisfied that extra measures were being put into


place. The aircraft were on the runway, won't they? I was making


myself unpopular by holding it up. Eventually I was given very clear


assurances there would be proper oversight. That oversight committee


assurances, did you take legal advice? I had legal advice within my


department. There are essentially three government departments


department. There are essentially involved. We are all given official


and legal advice from you make involved. We are all given official


decisions. You have thought this advice was watertight. Ta me your


honest reaction? I was having to make a judgment on the basis of good


faith. -- tell me. We were given additional safeguards.


faith. -- tell me. We were given heard today that somehow civilian


targets are heard today that somehow civilian


bombing raids. If heard today that somehow civilian


had oversight, this heard today that somehow civilian


lot of people reporting with heard today that somehow civilian


bottling plant and so forth, they are being bombed. Whether


bottling plant and so forth, they that is with American weaponry, we


do not know. In your view is it enough to go ahead? This is a legal


question for the courts. I was given assurances we had sufficient


oversight of the bombing activity to make sure that international


humanitarian law would not be compromised. Sir William, the report


tonight comes from highly respected lawyers, who believe the British


government could be in breach of British European


government could be in breach of law by supplying these particular


weapons to Saudi Arabia. What is your response? I am not a lawyer but


I imagine there is some element of deliberate targeting that needs to


be there. I agree with Vince Cable. I cannot see why the Saudis would


deliberately target civilians will still be contrary to what they're


trying to in Yemen. There is a Security Council resolution. The


Huthis are the aggressors, if you like. They are trying to push that


back. I was ambassador in Afghanistan and Iraq. I know there


was no deliberate targeting of civilians. You cannot guarantee that


in a complex situation like Yemen, Iraq all Syria, civilians might not


accidentally be hit. I imagine the legal case with hinge on deliberate


targeting. I cannot see why the Saudis would deliberately target


civilians. These bombs are meant to be hugely accurate. It is not as if


it would be collateral damage, would it? We have seen mistakes occur.


Americans have made mistakes in Iraq and Syria. It is possible that


mistakes were made. The Saudis are trying to support the legitimate


government in Yemen, trying to re-establish some sort of control


and promote a political sentiment. Targeting civilians would have no


part in that I would be foolish. Do you think the Saudis are as careful


in pursuit of their goals? I do not see why they would be less careful.


Britain has a very close relationship with Saudi Arabia and


should be in a position to advise and to work with them. I suspect the


British governor will be talking to the Saudis and seeking the


reassurances of the measures, they have put in place. -- the British


government. I have seen statements about measures that are in place to


try to ensure there are no civilian casualties. I suppose there will be


close scrutiny of what these measures are. These are civilian


casualties in hospitals and they do turn out to be as a result of


British weapons being dropped, would you be comfortable with that?


Well, if they were deliberately targeted it would be unacceptable.


That would be the issue. And if they were attributable to Saudi as


strikes and two British equipment. Let me put that to Vince Cable.


Would you make that distinction when you see what has actually been


happening in Yemen, between deliberate targeting and collateral


damage, the line between them, are you comfortable with that? As Sir


William Patey said, there is a difficult balance to be struck. I


would have thought that prudent military activity would not just be


avoiding deliberate targeting, it would be taking all proper effort to


avoid collateral civilian damage. They should be doing more than just


not targeting. Given how central to the Saudis' Arsenal are British


bombs and how important they are to our export trade... It is more than


just bombs, it is a vast amount of equipment. Yes. Do you think Britain


imposes the same standards with the Saudis as they do with other


countries? I think there is growing discomfort that we are very highly


dependent on Saudi Arabia in a variety of areas, not just on the


supply of equipment, but for regional security, and issues around


human rights which Michael Gove gave vent to a few weeks ago. I think


even within this Conservative government you have ministers who


think, actually we are being over compromised by having this


overdependence. Any relationship has to be in balance. Did you have


worries or discomfort over the nature of the relationship and how


it was conducted when you were Business Secretary, and indeed


before? Well, I had no problem with us exporting kit to Saudi Arabia. I


was a champion of British manufacturing industry and this was


part of it. I did worry that we were becoming overdependent in a variety


of different ways and it was inhibiting our ability to say what


needed to be said. And so in terms of saying what needs to be said, do


you think now there should be an independent inquiry at least, given


the nature of the allegations, and given the seniority of the lawyers


that are making them? Well, now presumably there will be a legal


process, and that has to happen. There is a very good select


committee in the House of Commons which is set up specifically to


pursue issues around arms export licensing. I think they are the


appropriate body to look at this. In that film, Ian Gatehouse said his


understanding was that government lawyers are very uncomfortable about


this. Do you think the government is in some discomfort? I do not know. I


was there seven months ago. It was an own comfortable subject at the


time. But a vast amount more is now known. At that stage we only had


some fragmentary reports. Janet Yellen has learned her place in US


history by announcing the first hike in rates in almost a decade. The


impact might be more psychological than anything else. She said it


reflected the confidence of the committee that the economy would


continue to strengthen. She cited lower-than-expected inflation


figures among other factors for the decision.


The financial crisis of the late 2000s was centred on American banks.


Today, the US passed a milestone in recovery. The Federal Reserve,


America's central bank, raised interest rates for the first time


since 2006. It is a first small step back to normal. So,. The recent


history of US interest rates. When the line is low, rates are low. This


means that banks can borrow cheaply overnight. That gets passed on into


the real economy. So, in the early 1980s, the Fed raised these


borrowing costs, taking the heat out of the economy and cutting


inflation. Conversely, rates got slashed as the financial crisis


unfolded. They went down to historic low rates for an unprecedented long


time. So why are they being raised now? The Fed only worries about two


big things. First of all come US inflation, which has been very low,


but it has just risen to about 2% on the Fed's preferred measure. They


are starting to worry about that. The second thing is unemployment. It


was at about 10% back in 2010. Now it is just 5%. So the Fed feels that


all things considered it is now safe to start withdrawing the stimulus


which has been keeping the US economy going. If we keep interest


rates down for too long, the pressures on the economy will


continue to build up. So we will get a bigger build-up in inflationary


pressures and possible financial bubbles. Both of those things could


cause interest rates to rise more sharply in the future. So if the Fed


wants to raise interest rates in a gradual fashion, it must start


sooner rather than later. What really matters now is how fast the


Fed raises rates and what the market expects. The Fed gets its


rate-setting committee to predict how they think rates will rise. So


each committee member puts dot showing how high they expect rates


to be at the end of each year. So you can see they all expect rates to


rise from this year to next and so on. Note two things. First of all


come these rate rises are actually very slow. This is a gradual


phasing, about half the pace of the last round of Fed hikes. Secondly,


this last column is their long-term estimate. They all crowd around


3.5%. And that is really low, about 1.5% off the long run Fed average.


US monetary policy will be followed very widely. Higher interest rates


encourage investors to pull out of riskier sectors and markets across


the world. And those of us in countries which are a little way


behind should watch particularly carefully. We have to return to


normal as well. I'm joined now by Professor Danny


Blanchflower, former member of the Bank of England's


own rate-setting Monetary Policy Committee, and Gillian Tett,


US Managing Editor of First of all, Danny Blanchflower,


they were unanimous about this - other conditions right for a rate


rise? Well, the surprise was that they actually were unanimous. But


rise? Well, the surprise was that you look at the remake to which the


Fed has, with the worries about inflation


Fed has, with the worries about rates right now. Big deal is, the


Fed is using its forecast and saying, we think


Fed is using its forecast and really believe them. So why have


they done it then? There is not much difference from a


they done it then? There is not much ago? I would say it is different


they done it then? There is not much the sense that the market


expectation in September was actually that they were not going to


go up. The market was expecting them to go now, so the surprise would


have been if they hadn't. to go now, so the surprise would


pushed themselves into this move. Is this a turning point, do you think?


I think it is a very important moment, because they are desperate


to show that they can get back to a world where monetary policy begins


to look a bit more normal, or at least a bit less completely weird.


Over the last five years we have become used to this world where


weirdness seems normal. We have had zero rates and incredible


distortions in the markets which everybody is ignoring because they


have got used to it so much. If the Fed wants to


have got used to it so much. If the psychological block that we have to


stop living in this weird world and psychological block that we have to


money has a price... So actually it will not make


money has a price... So actually it the economy? The crucial question


now is what happens next. Firstly, can they actually implement this


so-called rate rise? can they actually implement this


money markets are so distorted, it can they actually implement this


is not clear they can actually get the normal levers to work.


is not clear they can actually get what are they going to do with this


massively bloated Fed balance sheet they now have, four times bigger


than it was before 2008? Can it go back on a diet and slim down?


Question lots of us be asking over Christmas. Thirdly, how quickly is


it actually turn followed today 's supposed rise by more rises, is it a


one-off? This whole impact which it is going to have, with better


interests in America than in the emerging markets, people are going


to be taking their money out of those markets, India, and putting it


back in America? Gillian is right about the risks, but actually there


have been 28 cases in the last seven years where central banks have


raised rates, and in all cases, they have actually had to cut them later.


That is a worry. And right now, this is going to have an effect on


emerging markets, on corporate bond yields, the manufacturing sector


will be impacted by the rise in the dollar. So the worry is actually,


this does not work at all and what we will see down the road is not


just a return fire a cut but maybe even a cut to negative, which is


what we have seen at the ECB, the Swiss central bank and other places.


So if this does not work, we are in trouble. American homeowners,


Gillian Tett, have been used to this cheap money. Even a small rise like


this could put some of them, who are borrowing to the hilt, in trouble?


Absolutely. Banks spoke to me the other day and said,,, if you are


thinking about getting a mortgage, get it now. But you have to keep it


in proportion. This is still a very small hike. In some ways it is long


overdue I would say because people have got used to alter cheap money.


But the big question, as Danny says, is how the rest of the world now


reacts. It is not just the emerging markets, it is also the fact that


you could be seeing the European central bank embarking on more news


and in in the coming months which could create a real potential for


knock-on effects in the foreign exchange markets. -- more loosening


in the coming months. And what happens in Britain? In Britain they


will have to sit for a very long time, as I have been saying for


seven years, because in the UK there is so many people on variable rate


mortgages. As soon as you start to raise rates it hurts people's


ability to pay and it hurts house prices and it hurts the banks. So


the Bank of England is to sit pat for a long time. Is there a problem


being addict to two cheap money? Well, clearly there is. It caused


all kinds of distortions. But the problem is that the shock we have is


so much greater, so as soon as you try to resolve it by a rate rise,


there are all kinds of crazy things which go on. The reason is, we did


not really have a plan on the way in. It was unique times. We voted


for quantitative easing, as I did. It was very scary. You do not know


the way out, either, so, they are having to follow the data and cross


their fingers and hope. We are really there, crossing fingers and


hoping economics. David Cameron has told the commons


that the government has met its target to resettle one


thousand Syrian refugees by the end of the year - a year when some


of the most visceral and memorable images on our screens


and in newspapers have been From new born babies to great


grandparents fleeing, there have been extraordinary scenes


and heartbreaking stories. Tonight we have the third and final


film in Katie Razzall's series When you watch this,


how do you feel? Osama and his young son Zaid brought


down by a camerawoman's foot. Do you think it was


an accident or on purpose? When you say he has been


injured, is it more The Hungarian camerawoman


who tripped them appeared to symbolise Hungary's


hostility to migrants. She apologised, saying


she had acted in self-defence. But Osama was oblivious


to the furore. In what looks on the surface


like a fairy tale ending for them, Osama and his two sons


are now in Spain. Global outrage led to a job offer


for the Syrian football coach from a Spanish football club -


and an apartment. When you first arrived


in Spain, what struck you? It's the first time -


I have been talking to you for a long time,


it is the first time you have smiled There are reasons to smile,


but it is not that simple. Osama's wife and two


other children are stuck in Turkey, to where


the family first fled. Life has thrown many


hazards their way. They come from a town in north-east


Syria which was under Assad attack Britain has recently


begun air strikes against What do you think of what's


happening now in the Syrian I think that it is very


bad, the war in Syria. War drove the exodus


to Europe, and this migrant's I read an interview


with you from before where you said, Now, a few months on,


do you feel you could forgive her, Of course I think yes, because I now


forgive this accident. And I am looking for


the future of my family For now, though, football has


helped him maintain hope. His flight from Syria


with his youngest child in his arms caught the world's attention


for all the wrong reasons. What nobody knew, though,


was that as well as Zaid, Osama was carrying a very


precious possession. When I look at you


there, you are not carrying very much of course


because you have walk. Some T-shirts for


Zaid, and some food. It is proof you really


like football. Some of the most haunting images


of the refugee crisis have And one photographer


above all others has given us defining pictures of conflict over


the past sixty years. Don McCullin turned eighty last


month and spent his birthday in Iraq, under fire as he captured


on camera, the retaking the town of Baiji from so called IS by Iraqi


fighters.He has photographed everything from the building


of the Berlin Wall, to Vietnam to the destruction of Palmyra,


but also series of beautiful landscapes around the world and has


a new exhibition and book to celebrate his


extraordinary body of work. Evan went to meet him


and asked him whether his view I feel slightly defeated by the work


I have done in the past. I thought, I used to


get right up close to things and show people how terrible


it was to see a child starving to death, or a man with half his jaw


missing or legs missing. I thought, I'm going


to make sure that people look at my photographs


and they understand what the real I'm thinking that may have changed


society but that hasn't really. I have almost convinced myself that


what I have done in the past hasn't We're still looking at appalling


atrocities round the world. As quick as one war


has gone, another is in the waiting to come and repeat


itself all over again. We have seen the picture of the boy


washed up on the beach in Turkey. It really did seem to demonstrate


the power of a photograph, The extraordinary thing


about the photograph, without being crude,


it was without blood. It was the sheer dangling legs


of that three-year-old It had another way of


presenting the tragedy to us. It changed the thinking


of people about migration, Tell me what the rules


are for your profession? Obviously you are going in,


taking photographs of people in very vulnerable and


unpleasant situations. What are the rules of your


engagement with those people? Why would you expect immunity


from Downing Street? You don't have the right


in the second place to take people's photographs, to lean over them


when they are dying or starving. Anyway, I have a huge


conscience about what I did in the past because I'm alive,


I'm healthy, and I knew that some I walked into a school one


day and found 800 dying I know many of the children


wouldn't have survived two or three days after I left


that establishment. I can still talk about it


with clarity because I will One of your most


famous photos is the American Marine in Vietnam


with a shell-shocked face. That is actually the cover


of the book of your photos. Have you been able to


stay in touch with him? Does he know his photo has


reached such prominence? I only knew him for


the moment I took five But he was a soldier,


he was a human being. But, compared with the civilian


casualties that bear the brunt of war these days, who nobody helps,


nobody cares about, they are always the last to be informed that tragedy


is coming to destroy their homes That soldier would have


been taken care of by My biggest fear


about that photograph I go to get the


information and bring Basically, I am really


the carrier pigeon. The public, if we


are honest, and I'm guessing this because I see


what the public buys They are more interested in looking


at pictures of life victors This is my biggest


contention in life. We show more interest,


as you isely said, the victors, This narcissism that has


crept into our society. I suppose you have to blame


the proprietors who sell They really do not need to be


trading in tragedy in their lives. They would much prefer


to make money and all make it sanitised and jolly


and what a wonderful world Which is a totally


false picture, really. Are you someone who feels the world


is empowered by digital technology and the smartphone


that takes pictures? There is more communication


than we have ever dreamed of. Are we being fooled


by what we are seeing and receiving? Are we on the right


kind of wavelengths? I'm not saying this because I feel


my photographic work has failed, where it should have


gone, because I'm still holding out. Finally tonight, you can't


have missed the fact that the new Star Wars movie


is premiering tonight - what with the rolling news coverage


and days of free publicity. Thank goodness we've managed


to avoid all that here.


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