21/09/2016 Newsnight


21/09/2016

Investigation and analysis with Evan Davis. Has Brexit harmed the economy? As MI6 recruits 1,000 spies, how many are hackers? Plus the latest on Syria and Ed Balls on Corbyn.


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Transcript


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No world War three, tick. Economy hasn't fallen into a big hole, tick.

:00:08.:00:19.

Bake off still on the box, tick. This Brexit thing seems to be going

:00:20.:00:23.

OK. Except of course, hasn't started yet. The economy appears buoyant, so

:00:24.:00:29.

how much can we read into that? We will try to make sense of the

:00:30.:00:33.

economic signals and see where we are heading. The head of MI6 says

:00:34.:00:37.

they will hack their way to victory as he recruits 1000 new spies. The

:00:38.:00:44.

information revolution fundamentally changes our operating environment.

:00:45.:00:48.

In five years' time there will be two sorts of intelligence services,

:00:49.:00:51.

one that understands this fact and prospers and one that doesn't and

:00:52.:00:55.

hasn't. And Ed Balls is here as the polls close in the Labour leadership

:00:56.:01:00.

election, with Jeremy Corbyn the hottest favourites. Where did it all

:01:01.:01:01.

go wrong? The doom-monger Remainers have been

:01:02.:01:08.

slain, their scares exposed. That view has gained a bit

:01:09.:01:13.

of traction of late, and today we got an official

:01:14.:01:17.

statistical summary of data so far from the Office

:01:18.:01:19.

for National Statistics. And it was ambivalent enough

:01:20.:01:23.

to reassure all sides. Basically, it said -

:01:24.:01:25.

we don't really know But we've got through

:01:26.:01:27.

the first part. There was other news too:

:01:28.:01:30.

an official forecast It cut its UK growth

:01:31.:01:32.

forecast for next year, but nudged it up for this year,

:01:33.:01:38.

and headlines went both ways too. Clearly the world hasn't

:01:39.:01:42.

fallen in, and that raises two questions

:01:43.:01:43.

- big questions. And secondly, does the economics

:01:44.:01:45.

profession have egg on its face for suggesting things

:01:46.:01:51.

might go wrong? No one doubts there were

:01:52.:01:57.

the occasional exaggerations on both In fairness to economists,

:01:58.:01:59.

they were a little more The most talked about warnings came

:02:00.:02:10.

from the Governor of Material slowdown in growth,

:02:11.:02:14.

notable increase in inflation, that's the MPC's

:02:15.:02:20.

judgment, it's a judgment not based It is a judgment not based

:02:21.:02:23.

on a whim, it is a judgment based on rigorous analysis and

:02:24.:02:28.

careful consideration. Of course, there is a range

:02:29.:02:30.

of possible scenarios around Which could possibly

:02:31.:02:33.

include a technical Well, in using the words that he did

:02:34.:02:36.

at the bank behind me, Mr Carney gave the Remain politicians

:02:37.:02:45.

something they could COuld work up into

:02:46.:02:47.

more lurid scenarios. But nothing that has happened

:02:48.:02:51.

since June has made the actual words appear

:02:52.:02:53.

particularly stupid. And for economists more generally,

:02:54.:02:56.

they have had some mood swings, as they so often do,

:02:57.:02:59.

and not just the economists. The first big business survey that

:03:00.:03:05.

came after the With the global financial crisis

:03:06.:03:07.

of 2008, 2009, the bursting of the dot-com bubble and the 1998 Asian

:03:08.:03:19.

financial crisis, the difference this time is that it is all entirely

:03:20.:03:22.

home-grown, which suggests the impact could be greater on the UK

:03:23.:03:25.

economy than before. All in all, it's a mixed enough

:03:26.:03:28.

picture for everybody's interpretation to be guided

:03:29.:03:36.

by their preconceptions. So what do we know

:03:37.:03:42.

and what don't we? Look at that edge of

:03:43.:03:44.

the Grand Canyon in the And the pound has not

:03:45.:03:48.

recovered from that But then you can look at things

:03:49.:03:53.

like car production, which So let me tell you why the answer

:03:54.:03:57.

to the question "what is the It is that economists

:03:58.:04:05.

are making one important prediction and that is that

:04:06.:04:12.

companies will hold off investing Why build a new factory if you don't

:04:13.:04:15.

know if you'll be able to sell That is a scary prediction,

:04:16.:04:21.

but it is way too early Economists are saying that business

:04:22.:04:25.

investment will contract next year. 90% of them feel that

:04:26.:04:30.

would be the case. And the average expectation

:04:31.:04:37.

is for a contraction This is quite unusual,

:04:38.:04:40.

it would generally occur in a recession, such as we had

:04:41.:04:47.

in 2009, for example. But this time it is occurring

:04:48.:04:52.

without a recession in GDP So it is a sharp change

:04:53.:04:55.

in an unusual circumstance. We will wait to see

:04:56.:05:03.

what happens next year but the truth is, economies

:05:04.:05:06.

do move quite slowly. Markets move fast, the pound can

:05:07.:05:11.

plummet here in the city in a day but production lines,

:05:12.:05:14.

they chug along, chickens carry on laying eggs,

:05:15.:05:16.

regardless of referendum results. We have little idea

:05:17.:05:21.

yet as to what "Brexit means Brexit" means,

:05:22.:05:23.

what its short-term effects are, let alone

:05:24.:05:25.

the all-important long-term impact. With me now is Linda Yueh,

:05:26.:05:33.

Professor of Economics at London Business School,

:05:34.:05:34.

Chris Giles, who is the Economics Editor

:05:35.:05:36.

at the Financial Times, and Alistair Heath, Deputy Editor

:05:37.:05:38.

of the Daily Telegraph. Alistair, I think you are the most

:05:39.:05:46.

sceptic among the panel. You think the economics profession over egged

:05:47.:05:53.

it and have egg on their faces? Yes, big time. All the hysteria about an

:05:54.:05:57.

immediate recession, a financial collapse, that hasn't materialised

:05:58.:06:02.

and I think it was a mistake for economists to make that kind of

:06:03.:06:05.

prediction or to allow themselves to be portrayed as making that kind of

:06:06.:06:10.

projection. It has damaged their credibility going forward, and that

:06:11.:06:15.

is a problem because we need their assistance when it comes to

:06:16.:06:19.

negotiating the right kind of Brexit, a pro-growth, liberal

:06:20.:06:22.

Brexit. They damaged themselves and went too far. I think what the data

:06:23.:06:27.

to date shows is there was no catastrophe, that this Armageddon

:06:28.:06:31.

situation did not materialise. Linda, speak up for the economists?

:06:32.:06:36.

I think there is some truth to the fact that because this was a

:06:37.:06:40.

referendum that was fiercely argued, I think both cases stated their

:06:41.:06:45.

cases very strongly. Economic is not a science, it is a social science.

:06:46.:06:49.

So the long-term negative effect, that lots of economists predicted is

:06:50.:06:55.

predicated on the UK not having astrometry deal with the EU and the

:06:56.:06:58.

rest of the world, not having the same kind of access to the world's

:06:59.:07:02.

biggest thing this block. But we don't know where that is going to

:07:03.:07:06.

head and the immediate impact, which wasn't emphasised enough, in the

:07:07.:07:13.

short term although this creates economic uncertainty, use and the

:07:14.:07:17.

one thing economists agree on its investment is not on take-off, lots

:07:18.:07:20.

of funds will wait to see, there are some signs of that. The Bank of

:07:21.:07:23.

England report on their business agents around the country said that.

:07:24.:07:27.

But the one thing I want to stress about uncertainty is different for

:07:28.:07:33.

you and me, for other businesses and for consumers. Consumers are much

:07:34.:07:37.

more optimistic, as we have seen in some of the surveys. Businesses are

:07:38.:07:41.

more worried. Eventually the two come together, but just as you and I

:07:42.:07:46.

react to uncertainty differently, there will be mixed reactions to

:07:47.:07:48.

Brexit and the fact we are leaving and I think that point should have

:07:49.:07:52.

been made more clearly. That is all you'll see in the immediate short

:07:53.:07:56.

term, it's only been three months since the vote and we are still in

:07:57.:08:00.

the EU until we are out on the subject of the same trade bills. Do

:08:01.:08:05.

you think the economists over egged it... Mark Carney, said there is a

:08:06.:08:08.

possibility of a technical recession. I think you've got to be

:08:09.:08:13.

very careful. I think Alistair's portrayal of what economists

:08:14.:08:16.

actually said is incorrect. They were much more careful. I think they

:08:17.:08:21.

made in two areas they should hold their hand up and say, actually I

:08:22.:08:25.

don't think we were right about the immediate impact. One was those

:08:26.:08:29.

warnings about a potential financial crisis. That clearly hasn't

:08:30.:08:34.

happened. The second was there was an expectation that sentiment and

:08:35.:08:39.

confidence would disappear and that happened, but it came back much

:08:40.:08:41.

quicker than they thought. Those two things I think they should put their

:08:42.:08:46.

hands up on. With anyone forecasting a financial crisis warning it was a

:08:47.:08:50.

possibility? I think that was entirely correct, it was possible.

:08:51.:08:54.

It didn't happen. If they didn't warn about it we could have been

:08:55.:09:00.

likely wearing 2008 saying, where were these economists, why were they

:09:01.:09:04.

warning about it? I think the way they warned of this and the words

:09:05.:09:08.

they dropped like recession, and some saying the next six quarters

:09:09.:09:12.

there will be three or four negative quarters of growth, I think that

:09:13.:09:15.

contributed to a sense of panic and created a lot of problems. There was

:09:16.:09:20.

a run on some commercial property funds and all sorts of dislocation,

:09:21.:09:24.

which fortunately seems to have abated. I think economists made a

:09:25.:09:28.

mistake and overrate their case, but it says nothing about the long run

:09:29.:09:31.

or the medium run. It doesn't say whether Brexit will a long long run

:09:32.:09:37.

triumph or a damp squid are in the shorter men made a mistake. One

:09:38.:09:42.

thing we do know, on the morning the pound fell, Linda, by 10% or so. We

:09:43.:09:47.

looked at that and said, that is a big fall and it has basically gone

:09:48.:09:53.

back up again. It has just settled at 1.30 against the dollar instead

:09:54.:09:59.

of 1.40 or 1.40 five. The markets react quickly but economies moved

:10:00.:10:03.

slowly, like oil tankers. One reaction to the pound could be we

:10:04.:10:08.

sell more, we buy more from the rest of the world than we sell. Some

:10:09.:10:11.

economists would say that sterling is essentially settling to wear

:10:12.:10:16.

investors think the economy is headed, which as we 40 said, in the

:10:17.:10:21.

medium term it depends a lot on what trade deals we get. But on the whole

:10:22.:10:26.

there is worry, the same worries we had about the British economy before

:10:27.:10:32.

the referendum, trade deficit, low productivity and wages, all those

:10:33.:10:35.

things are still true. Sterling reflects that. What's interesting is

:10:36.:10:39.

the stock market. It fell and then recovered. You saw the OECD and

:10:40.:10:43.

others say what they hadn't figured in their June assessment was the

:10:44.:10:48.

action of the Bank of England, of the Treasury, the fact... With the

:10:49.:10:55.

Bank of England made a big difference? I only use that as an

:10:56.:11:03.

example to say that... I think before class should be like the

:11:04.:11:07.

weather app on your smartphone, if it tells you what happened today

:11:08.:11:10.

it's pretty good. My point is policymakers can change the course

:11:11.:11:14.

of the economy and that's why it's hard. I want to come to investment,

:11:15.:11:18.

do we all do we not believe that companies are holding back on

:11:19.:11:21.

investment, relative to those they might have carried out in the

:11:22.:11:25.

absence of the Brexit to come as a result of the uncertainty Linda

:11:26.:11:30.

spoke about? We do, we don't have a lot of evidence for it is the honest

:11:31.:11:33.

answer. You haven't changed your mind that is one of the potential

:11:34.:11:39.

short-term effects? Yes, the potential short-term cost. You gave

:11:40.:11:43.

evidence economists are still very much in that position, thinking

:11:44.:11:46.

investment is going to fall. Not dramatically, but is going to be

:11:47.:11:50.

lower next year. They thought it was going to be rising. And it hasn't,

:11:51.:11:55.

so they've made a six or 7% difference to the forecast.

:11:56.:11:58.

Forecasts have changed for investment. You would think that is

:11:59.:12:02.

rational, because if there is a huge amount of uncertainty, the

:12:03.:12:04.

government doesn't seem to have much of an idea of what sort of Brexit

:12:05.:12:08.

once, it certainly doesn't want to tell the public it. If you hand have

:12:09.:12:13.

to spend ?304 million, would you do it now or wait a little bit? It is a

:12:14.:12:17.

rational thing to wait. You would agree with that? It is possible,

:12:18.:12:22.

yes. If there is one area affected in the short term it is business

:12:23.:12:26.

investment, because companies... It makes sense he would wait. It's

:12:27.:12:32.

possible, but the fact that 90% of economists are predicting something

:12:33.:12:37.

next year, I not bothered by that because I think the constant

:12:38.:12:40.

consensus among economists keeps changing. Sometimes they get it

:12:41.:12:44.

completely wrong and they are bad at making short or long-term forecasts.

:12:45.:12:48.

But I perfectly except it may be the case. One thing we all agree on if

:12:49.:12:52.

it's too early to say what the long-term impact of Brexit is. Any

:12:53.:12:56.

indication, anything, Linda, that has given you a sense of foreboding

:12:57.:13:02.

or a sense of encouragement, as you've looked at what has happened

:13:03.:13:06.

so far? I think consumer sentiment gives me a sense that quite a lot of

:13:07.:13:12.

people think the future will be better. Economists... It's very

:13:13.:13:15.

difficult to model how that plays out, but obviously consumption is

:13:16.:13:19.

the biggest part of the British economy. One of the hardest things

:13:20.:13:23.

about leading indicators is normally you would look at bond deals but

:13:24.:13:27.

because central banks have injected so much cash and rates are so low,

:13:28.:13:33.

they are not good indicator these days. The long-term interest rates

:13:34.:13:36.

in the markets and government lending have been so low... Yes,

:13:37.:13:41.

usually you would say, wait, actually bond yields, the government

:13:42.:13:45.

interest rates look lower in the future, that means the economy will

:13:46.:13:49.

be weaker because rates have to be cut. That's normally how you would

:13:50.:13:53.

view it. The other indicator is stock prices. The fact stocks

:13:54.:13:57.

reflect how companies feel they are going to be earning in the future,

:13:58.:14:02.

how investors view that, that's normally a leading indicator of how

:14:03.:14:07.

the economy does. I think these surveys are important, and it is

:14:08.:14:13.

important to note because all these investment decisions take a long

:14:14.:14:17.

time to realise. We haven't got much time. I just want to ask about the

:14:18.:14:21.

importance of the argument we've been having and the narrative,

:14:22.:14:25.

crests, that Brexit seems all right. I don't know how many conversations

:14:26.:14:29.

you've had, I'd had a lot in the last few weeks. Do you think that

:14:30.:14:31.

might affect the of Having quite a good period now or a

:14:32.:14:41.

reasonable period is paradoxically quite bad for the long-term records

:14:42.:14:46.

of gives us a sense of superiority, we are great, this is what we felt

:14:47.:14:50.

after the Second World War, we don't need to join in with other

:14:51.:14:54.

countries, we can do Brexit all along, let's do it straightaway.

:14:55.:14:59.

These would be the worst sort of decisions we could take and

:15:00.:15:02.

paradoxically, the fact that things have been slightly better than we

:15:03.:15:06.

might have expected might make it worse in the long run. What do you

:15:07.:15:12.

say to that? I think there is the possibility of that but I think that

:15:13.:15:18.

if you look at what Eurosceptics believe, they believed in this Nike

:15:19.:15:30.

swish, some transitionary period and then a stronger economy and so on so

:15:31.:15:34.

I think people have always expected it to be so so it is about the

:15:35.:15:39.

detail and we don't know what the government was today but we have

:15:40.:15:44.

ahead, they seem to want to restrict immigration, and that probably means

:15:45.:15:50.

they will not want a hard Brexit rather than soft. We will know

:15:51.:15:55.

before long. Thank you all very much. --

:15:56.:15:58.

Austerity may be choking local government, --

:15:59.:15:59.

one part of the public sector that is not in retreat.

:16:00.:16:03.

It's MI6, the secret intelligent service.

:16:04.:16:04.

Newsnight has learned that it is on a recruitment

:16:05.:16:06.

drive, and is looking for a thousand extra staff.

:16:07.:16:09.

You're better off applying if you know something

:16:10.:16:11.

about the internet, as it's technology that is making the job

:16:12.:16:13.

of MI6 so much harder, and driving the demand.

:16:14.:16:15.

Our diplomatic editor, Mark Urban explains.

:16:16.:16:30.

in an age when people live so much of their lives online, how can you

:16:31.:16:37.

create convincing false identities? And how do you stop our intelligence

:16:38.:16:43.

service from using facial recognition to find out the real

:16:44.:16:50.

identities of your operatives? MI6 has argued it needs more people to

:16:51.:16:56.

create aliases and cover its tracks. It currently has 2500 staff but

:16:57.:17:01.

Newsnight has established this is set to grow by 40% took nearly 3500

:17:02.:17:09.

by 2020. Last year the government announced the agencies would get

:17:10.:17:15.

1900 more people. Newsnight has established that MI6 will get most

:17:16.:17:23.

of that and MI5, currently 4000, and GCHQ at 5600 receiving smaller

:17:24.:17:28.

increases. Although the service has not yet publicly confirmed the scale

:17:29.:17:33.

of its increase, the MI6 chief, and a rare public appearance yesterday,

:17:34.:17:37.

acknowledged the size of the challenge posed by the internet. The

:17:38.:17:45.

information revolution fundamentally changes or operating environment. I

:17:46.:17:48.

would go further to say that in five years' time there will be two sort

:17:49.:17:54.

of intelligence services, those that understand this factor and those

:17:55.:17:59.

that don't and not. I am determined that MI6 will be in the former

:18:00.:18:05.

category. How exactly has the internet change things? The killing

:18:06.:18:09.

of a Palestinian militant in Dubai in 2010 gives some close. Using CCTV

:18:10.:18:16.

and passport details, it took only a few days to point the finger at his

:18:17.:18:21.

-- is really intelligence. They cloned the passports of people who

:18:22.:18:26.

had visited Israel were left there. Why? Because completely fake

:18:27.:18:29.

identities are not easily discovered. But as they should, bad

:18:30.:18:37.

fakes are not much harder to find with governments and even insurgent

:18:38.:18:43.

groups, able to deploy advanced techniques. Our opponents,

:18:44.:18:49.

unrestrained by considerations of lawfulness or proportionality, can

:18:50.:18:52.

use these capabilities to gain visibility of our activities, which

:18:53.:18:55.

means we have to completely change the way that we do stuff. And then

:18:56.:19:01.

there is rapid advance of facial recognition technology. For example,

:19:02.:19:06.

a photo of John Smith, arriving at an airport somewhere as a vacuum

:19:07.:19:13.

cleaner sales rep, can now be the first searched. It might reveal

:19:14.:19:18.

someone of an entirely different name several years earlier

:19:19.:19:21.

celebrating their recruitment to the foreign office on Facebook. Of

:19:22.:19:26.

course, these techniques can put plenty of aces into the hands of

:19:27.:19:30.

British espionage also. But the agencies have convinced Whitehall

:19:31.:19:36.

that post Snowdon, cooperation with the big service providers and

:19:37.:19:40.

technology firms has taken a knock. To the extent that those revelations

:19:41.:19:43.

damaged and undermines the trust that needs to exist, I think it is

:19:44.:19:49.

highly problematic. Now the agency has to recruit almost 1000 new

:19:50.:19:53.

people to establish more elaborate aliases, sweep up Bridge of Spies

:19:54.:19:59.

online identities and exploit the options to gather more intelligence

:20:00.:20:04.

through the internet. And on civil service pay, finding so many new

:20:05.:20:06.

people could be quite a challenge. Markers of me. How quickly has those

:20:07.:20:16.

caught up? George Osborne talked about expanding the intelligence

:20:17.:20:21.

services? There were two statements last year, one about 1000 new spies

:20:22.:20:26.

and one about 1900 in the strategic defence review and both referred to

:20:27.:20:31.

the top agencies, including GCHQ, the security service and buy some

:20:32.:20:34.

aspects even of police intelligence as well but we know that 1000 will

:20:35.:20:41.

go just to MI6, so forget the numbers going to those other

:20:42.:20:47.

agencies, which on their terms is a famous bureaucratic victory. And a

:20:48.:20:50.

pretty substantial growth. It is 40%. Is it technology driving that

:20:51.:20:58.

order they just want extra people? That is very important and it is

:20:59.:21:03.

fascinating, yesterday, to hear the chief making those arguments

:21:04.:21:05.

publicly without going into the details of how much they are going

:21:06.:21:12.

to get. They are comfortable talking about two there are three key

:21:13.:21:15.

missions. As they involve counterterrorism, cyber security

:21:16.:21:18.

and, in those areas, this is the key, this type of thing. The other

:21:19.:21:24.

area which they term more generically strategic advantage,

:21:25.:21:26.

that is more interesting, the traditional business of spying, in

:21:27.:21:32.

support of the UK's diplomatic position and all of this was agreed

:21:33.:21:36.

before Brexit but if you wish to say that we still punch above our weight

:21:37.:21:41.

in the world, and to find out the detail of those other European

:21:42.:21:46.

countries' positions on this negotiation, it would be useful to

:21:47.:21:48.

have this extra resources. Thank you.

:21:49.:21:52.

For the world community, or most of it, the Syrian government

:21:53.:21:54.

and Russia are between them responsible for atrocities that

:21:55.:21:56.

In addition to the targeting of an aid convoy on Monday,

:21:57.:22:00.

there were more deaths of those trying to help people yesterday,

:22:01.:22:03.

Well, when it comes to Syria we know our position,

:22:04.:22:06.

we know the American position, the Russian position too.

:22:07.:22:08.

But what do self-respecting Syrian government supporters say

:22:09.:22:11.

about the things that are occurring in their country?

:22:12.:22:14.

Earlier I spoke to Bouthaina Shaaban.

:22:15.:22:20.

A spokesperson for the Syrian government.

:22:21.:22:23.

I believe that nobody knows for sure what happened but what is certain

:22:24.:22:29.

is that neither the Syrians nor the Russians have any interest

:22:30.:22:34.

in targeting the humanitarian convoy when we are trying our best to make

:22:35.:22:38.

humanitarian assistance reach everywhere in that country.

:22:39.:22:43.

But it is unlikely the rebels would want to attack a convoy

:22:44.:22:46.

There are Russian planes, there were Russian planes,

:22:47.:22:53.

two Russian warplanes in the sky at the time.

:22:54.:22:58.

The Russians have just released pictures of the convoy

:22:59.:23:08.

that was protected by artillery and they have just said, the UN,

:23:09.:23:12.

that there was an American drone who was accompanying the convoy.

:23:13.:23:18.

So as you said, there are many statements about what happened

:23:19.:23:22.

but the one certain thing is that the convoy was in an area

:23:23.:23:29.

Neither nor the Syrians or Russians were anywhere near the area

:23:30.:23:43.

You know, also, I would like to remind you that for the last

:23:44.:23:49.

week that terrorists in Idlib were announcing in full

:23:50.:23:51.

mouth that they would not adhere to the truce agreed

:23:52.:23:58.

upon by the Russians and the Americans and it was

:23:59.:24:01.

said that they were going to burn any convoy that comes

:24:02.:24:03.

Do you think the bombing, deliberate bombing or

:24:04.:24:11.

attack on a Red Cross convoy is a war crime?

:24:12.:24:13.

Because many people are saying that this looks really

:24:14.:24:15.

They think your side is guilty of it.

:24:16.:24:19.

I think the logical thing would have been for the Russians and

:24:20.:24:23.

the Americans to try to investigate, do a proper investigation,

:24:24.:24:27.

instead of circulating concepts and assumptions.

:24:28.:24:35.

Do you think the Syrian government can win the war that is currently

:24:36.:24:38.

Do you know how we can win the war in our country?

:24:39.:24:44.

By stopping this war and by stopping the bloodshed in our country.

:24:45.:24:49.

We are absolutely devastated every day because of this war.

:24:50.:24:55.

It is a war that has been imposed on us, it is a war that has been

:24:56.:25:02.

brought to our people, to destroy our people

:25:03.:25:04.

I know, but what I want to ask is, do you think you can win the war?

:25:05.:25:10.

We're all thinking about ways in which this war, which has gone

:25:11.:25:13.

We don't want it to be like the Lebanese civil war,

:25:14.:25:17.

President Assad is not thinking about himself,

:25:18.:25:27.

he is thinking about Syria and about the Syrian people.

:25:28.:25:36.

It is our institutions, our schools, our army that has been destroyed.

:25:37.:25:38.

We want to stop this war, we want to stop the bloodshed.

:25:39.:25:41.

There are over 30,000 terrorists and mercenaries who have

:25:42.:25:46.

been brought to Syria, they are butchering our people.

:25:47.:25:49.

The West keeps calling it a civil war, it is not a civil war.

:25:50.:26:00.

I understand the way you want to frame the war is not

:26:01.:26:03.

I understand that you want to say it is bad foreigners

:26:04.:26:09.

We know that the war is a bit more complicated than that,

:26:10.:26:12.

which is why we persist in calling it a Civil War, even though,

:26:13.:26:16.

of course, lots of foreign powers are at fault.

:26:17.:26:18.

Let me just ask you about more immediate issues.

:26:19.:26:22.

Do you think, is the Syrian government position that there

:26:23.:26:24.

There was not a single gunshot in which the Syrian government

:26:25.:26:28.

refused to cooperate with the Russians and the Americans

:26:29.:26:32.

It is those terrorists who at every single juncture refused to adhere

:26:33.:26:40.

And yet we don't see the West pointing fingers at the terrorists.

:26:41.:26:45.

We see the West pointing fingers at the Syrian government.

:26:46.:26:48.

The Syrian government is the one who looks like the West,

:26:49.:26:59.

it is not the terrorists who look like the West.

:27:00.:27:01.

I could explain why but I'm not going to because we don't have time.

:27:02.:27:04.

The suggestion from the Americans is that there may be some kind

:27:05.:27:08.

of no-fly zone over large parts of Syria, northern Syria.

:27:09.:27:13.

Could you, Syria, agree to the idea of a no-fly zone as part

:27:14.:27:17.

Because a no-fly zone is a huge violation of our sovereignty.

:27:18.:27:24.

Do you think the Syrian government, as you look back over the last five

:27:25.:27:28.

years, what mistake, what is the biggest mistake

:27:29.:27:30.

Is it not having conceded to the demonstrators early

:27:31.:27:35.

Is it the barrel bombing or the chlorine gas?

:27:36.:27:42.

Is it not having come to the negotiating table earlier?

:27:43.:27:45.

What do you see as the biggest mistake your side has made or do

:27:46.:27:48.

you think you have made no mistakes at all, it is only everybody else

:27:49.:27:52.

Unfortunately, I come here and I take my time out in order

:27:53.:28:02.

to address you and your respectable audience and all I get is accusatory

:28:03.:28:06.

questions that are taken from a media that has taken

:28:07.:28:09.

Everyone speaks about barrel bombs and chlorine and nobody accepts,

:28:10.:28:16.

to come to the country and see exactly what is going on.

:28:17.:28:19.

We actually do have people, the BBC sends people to Syria

:28:20.:28:22.

Can I ask when you were last outside Damascus, just out of interest?

:28:23.:28:27.

Because it must be quite difficult to travel.

:28:28.:28:31.

When were you last able to get to Aleppo, for example?

:28:32.:28:34.

Personally, I haven't been travelling to Aleppo

:28:35.:28:39.

but there are many people from Aleppo who are coming

:28:40.:28:42.

here and from here who are going to Aleppo and who are

:28:43.:28:45.

So we are all a bit reliant on second-hand reports.

:28:46.:28:51.

Thank you very much for talking to us.

:28:52.:28:53.

Theresa May is facing a bit of criticism from supporters

:28:54.:29:04.

of David Cameron for dismantling his legacy - with the return of grammar

:29:05.:29:07.

schools and the very public sacking of George Osborne.

:29:08.:29:09.

But Newsnight has learnt that she is not holding back

:29:10.:29:12.

and is preparing changes to how the Conservative party is run

:29:13.:29:14.

Nick Watt is with me. What have you learned? Newsnight understands that

:29:15.:29:30.

a race me is taking a very hard look at how the Conservative party raises

:29:31.:29:35.

money and the signals that sends out. I understand that in her sights

:29:36.:29:40.

is the annual Black and white party for the party, this takes place

:29:41.:29:44.

every February, lots of champagne, they got into trouble if you years

:29:45.:29:47.

ago when the auction and an internship, not sending out the

:29:48.:29:51.

right signal! No decisions have been made about dumping the name but I

:29:52.:29:55.

think the feeling is that they need to do this differently and there is

:29:56.:30:07.

talk about how maybe you could have a series of parties outside London.

:30:08.:30:09.

I think that Theresa May thinks that sort of event really does not sound

:30:10.:30:12.

very good signal, does not fit in with their mission. To champion the

:30:13.:30:14.

struggling middle classes. And I understand from Downing Street that

:30:15.:30:17.

she is thinking of taking quite a look at how wider fundraising, is

:30:18.:30:20.

applied to be so reliant on hedge funds and also looking at imposing

:30:21.:30:25.

that ?50,000 cap on individual donations. The Labour Party will not

:30:26.:30:28.

like that, they say that will be hostile because that would harm

:30:29.:30:29.

their trade union donations. Do you feel you're getting a picture

:30:30.:30:37.

of Theresa May, the Prime Minister and what she will be like? She made

:30:38.:30:42.

her name in 2002 when she said there was a danger the Conservative Party

:30:43.:30:45.

could look like the nasty party. She clearly thinks it looks like the

:30:46.:30:49.

elitist party wants to move away from that. It also shows how she

:30:50.:30:53.

wants to run the Conservative Party very differently. Patrick McLachlan,

:30:54.:30:57.

the party chairman has gone back to the traditional role, he sits in the

:30:58.:31:02.

Cabinet in the Woakes Cecil Parkinson did under Margaret

:31:03.:31:11.

Thatcher and he does the two bits, runs the machinery century, out in

:31:12.:31:13.

the country. She wants to get away from the split role when the

:31:14.:31:15.

fundraising was done by Andrew Feldman, David Cameron's big body.

:31:16.:31:18.

She wants to get away from that but there murmurings maybe she does need

:31:19.:31:21.

to realise that money does need to be raised and there are some

:31:22.:31:26.

concerns among Tories that know about fundraising who say, watch

:31:27.:31:30.

out, you need to be careful, we do need to raise money. Nick, thank

:31:31.:31:31.

you. The voting is over in Labour's

:31:32.:31:32.

leadership election. The results will not be counted

:31:33.:31:34.

as quickly as a vote on Strictly. We have to wait to Saturday,

:31:35.:31:37.

but hey, you know who's One person who was a leadership

:31:38.:31:40.

candidate himself once, but whose career has had some

:31:41.:31:44.

interesting turns since, One time sidekick to Gordon Brown,

:31:45.:31:47.

then a job in the Cabinet, Shadow Chancellor,

:31:48.:31:50.

he has been around. A very good evening to you. Thank

:31:51.:32:01.

you for coming in. Good to be here. How bad is it that Jeremy Corbyn is

:32:02.:32:05.

going to win the Labour Party, do you think? I think the country needs

:32:06.:32:09.

a strong opposition that can be a credible party of government. At the

:32:10.:32:12.

moment the verdict of the voters is the Labour Party is not a credible

:32:13.:32:17.

party of government. I'm afraid Jeremy Corbyn has brought in new

:32:18.:32:21.

members, he might win the leadership election among the new members and

:32:22.:32:25.

members of the Labour Party, but the issue is, what does the country say?

:32:26.:32:29.

If Jeremy had succeeded in a great boost in the opinion polls, that

:32:30.:32:33.

would be different, but I'm afraid at the moment the verdict of people

:32:34.:32:42.

in marginal seat is they don't feel that Labour at the moment is

:32:43.:32:45.

speaking for them. Until that changes, I'm afraid Labour will be a

:32:46.:32:47.

party of opposition and that's not good enough, we should be a party of

:32:48.:32:50.

government. What you think went wrong with the Owen Smith campaign?

:32:51.:32:54.

Is it about him, the candidate, the pitch? What happened? Clearly the

:32:55.:32:59.

membership of the Labour Party has changed very substantially over the

:33:00.:33:03.

last year and a half. Jeremy Corbyn is clearly speaking for, in touch

:33:04.:33:09.

with the members of the Labour Party, it seems, because they are

:33:10.:33:12.

voting for him in large numbers. Owen Smith was almost the outsider,

:33:13.:33:17.

challenging the incumbent. The problem is, in a democracy it is not

:33:18.:33:22.

the members of the party who elect the government, it's the voters. I

:33:23.:33:26.

don't remember a time where the Labour Party membership and its

:33:27.:33:30.

views had become so disconnected from where the marginal seat, the

:33:31.:33:36.

swing voter, the centre-left vote is an issue after issue, things are

:33:37.:33:40.

pulled apart. To be fair to Jeremy, if he wins, he is winning because he

:33:41.:33:45.

speaking for his members. The failure, and you are part of this

:33:46.:33:48.

scum and new Labour is part of this, the failure is, is it not, that your

:33:49.:33:53.

site, Owen Smith and your clan have not managed to grip 500,000 people

:33:54.:34:01.

in the same way Jeremy Corbyn did? Jeremy Corbyn has mobilised and

:34:02.:34:07.

infused a lot of people and for some reason the other wing of the party

:34:08.:34:13.

just can't? What's wrong? In this world, where numbers are being

:34:14.:34:16.

recruited on the mentorship has grown, the only answer in the end,

:34:17.:34:22.

for the centrist mainstream centre-left of the Labour Party, is

:34:23.:34:27.

to do the same. But in the end, I know from general elections and how

:34:28.:34:31.

you win, you have to have a compelling vision, which people

:34:32.:34:35.

think reflects their view of the world. Jeremy clearly has a complete

:34:36.:34:39.

vision that represents members views and I think Owen has been saying, I

:34:40.:34:45.

sort of share your views, but I'm not Jeremy Tilse I don't think in

:34:46.:34:48.

the end that will work. Labour is going to have to say, or the PLP,

:34:49.:34:54.

the mainstream Labour MPs are going to have to say, we have a view of

:34:55.:34:58.

the world which is not the same as the Conservatives, not the same as

:34:59.:35:01.

new Labour but also not the same as Jeremy Corbyn's... He didn't define

:35:02.:35:07.

himself enough? I think it is very difficult for Owen when you have

:35:08.:35:13.

such a short campaign, to do that. I think he chose not to do that. Chose

:35:14.:35:18.

to be as close to Jeremy as he could be, that's not going to work. Look

:35:19.:35:25.

back to when Labour was in power. Somehow, at some point, now you look

:35:26.:35:28.

back on it looks as though there was a bit of a wedge between traditional

:35:29.:35:32.

Labour voters and the new Labour project. A lot of them went to Ukip,

:35:33.:35:39.

some went to Jeremy Corbyn, who is not New Labour at all. Is that a

:35:40.:35:48.

single thing, is it about the immigration, the polls in 2004,

:35:49.:35:53.

2005, when we had unrestricted immigration and no one else in

:35:54.:35:57.

Europe did? Is it about the crash? What do you think whether one or two

:35:58.:36:01.

things that led to that? I don't think it's one thing and I think in

:36:02.:36:04.

some ways the problem started earlier than that. 1997, Labour said

:36:05.:36:09.

we can run the economy competently, we can be tough with the public

:36:10.:36:13.

finances and invest in the schools and hospitals. We can reverse the

:36:14.:36:20.

unfairness of the Tory years. From 97-2001 that was compelling. After

:36:21.:36:25.

2001, a weak Conservative leader. Labour turned on itself. We started

:36:26.:36:29.

to be defined by arguments about whether we were going to privatise

:36:30.:36:33.

the NHS or not, which was completely out of touch of whether country was

:36:34.:36:37.

and where the members were. It started earlier. On top of that you

:36:38.:36:41.

have the global financial crisis, which we didn't see manage, the

:36:42.:36:47.

globalisation of labour, a problems for communities up and down the

:36:48.:36:50.

country... China, industry moving to China over that period? I think we

:36:51.:36:56.

thought in 2001 globalisation would be about companies moving to China.

:36:57.:37:00.

What we never saw was that globalisation would actually be

:37:01.:37:03.

people moving from Poland and the Czech Republic to work in Britain. I

:37:04.:37:09.

don't think in our country, France, Germany, America politics has coped

:37:10.:37:13.

with that global financial crisis or the mobility of labour or the

:37:14.:37:17.

squeeze on medium incomes at a time when incomes at the top have been

:37:18.:37:22.

rising so fast. All of those things meant the centrists, centre ground,

:37:23.:37:25.

which said we could grip a manage this, people said, you are not doing

:37:26.:37:31.

so well. Why has it not really work? In those circumstances populism

:37:32.:37:35.

techs over, whether it is Donald Trump, Marine le Pen or Jeremy

:37:36.:37:39.

Corbyn. It's easier to communicate in a protesting way, it's not a

:37:40.:37:45.

manifesto for government. Ed Balls, thank you very much indeed. Let's

:37:46.:37:50.

take a quick look at the the Times's from page. Our story, MI6 hires

:37:51.:37:59.

hundreds more spies. That is it from us.

:38:00.:38:00.

We leave you with great news for TV post-production geeks.

:38:01.:38:03.

The ReelSteady image stabilisation software plugin for Adobe

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After Effects has been thoroughly tested and works rather well.

:38:06.:38:10.

Why are we telling you this interesting but slightly niche fact?

:38:11.:38:12.

Well, the stabiliser software has now been tested with the help

:38:13.:38:15.

of a legendary GoPro movie - that of basejumper Graham Dickenson

:38:16.:38:17.

In case you're wondering, yes he used a parachute.

:38:18.:38:28.

Vive la France! Vive la France!

:38:29.:39:18.

across western Scotland and Northern Ireland. Plenty of sunshine

:39:19.:39:25.

cloud, a bit damp. Eastern Scotland will see some showers, into the

:39:26.:39:32.

cloud, a bit damp. Eastern Scotland of Northern Ireland later on. Plenty

:39:33.:39:32.

of sunshine in of Northern Ireland later on. Plenty

:39:33.:39:36.

north-west up and having a sunny day that some

:39:37.:39:44.

will brighten up across northern England, with quite a

:39:45.:39:50.

will brighten up across northern across East Anglia and the

:39:51.:39:50.

south-east. Through the afternoon across East Anglia and the

:39:51.:39:57.

quite warm, 20 or 21 the high. across East Anglia and the

:39:58.:40:03.

glum start much of Wales in south-west

:40:04.:40:04.

In-depth investigation and analysis of the stories behind the day's headlines with Evan Davis. Has Brexit harmed the economy? As MI6 recruits 1,000 spies, how many are hackers? Plus the latest on Syria and Ed Balls on Jeremy Corbyn.


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