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Tuesday 13 March 2012

Verity Murphy | 18:36 UK time, Tuesday, 13 March 2012

A week ahead of the budget we take a longer look at the black hole in the public finances, assessing what the state is going to be able to in decades to come.

We will hear from our Economics editor Paul Mason and our Political editor Allegra Stratton as well as guests Lord Lawson, Ruth Porter and Lord Skidelsky.

David Grossman has the latest on the newspaper phone hacking allegations, which today saw former News International chief executive Rebekah Brooks being arrested as part of the police inquiry.

Five other people, including Mrs Brooks' husband, the racehorse trainer Charlie Brooks, were also detained.

We will be discussing the latest developments with media lawyer Charlotte Harris and former editor of The Scotsman Tim Luckhurst.

And Stephen Smith has the first broadcast interview with ballet superstar Sergei Polunin since he shocked the dance world in January by unexpectedly quitting the Royal Ballet where he was the youngest dancer ever made a principal.

Comments

  • Comment number 1.

    NN BLOG IS LIKE SWEETS - TWO STUCK TOGETHER.

    I had no knowledge of "Monday" until "Tuesday" (just) arrived.

    is it me?

  • Comment number 2.

    Are'nt our police weird? (as opposed to 'wonderful').

    Is it really necessary to arrest people?

    I mean can't they simply invite the person of interest to attend a police station for an interview?

    No hiding place for ex-NoW staff.

    Maybe the police themselves have been watching too many of those never-ending police dramas on TV.

    What would George Dixon think!

  • Comment number 3.

    "A week ahead of the budget we take a longer look at the black hole in the public finances, assessing what the state is going to be able to ??? in decades to come."

    Seems to be a black hole (???) in that sentence but anyway, the pedant in me says the State cannot possibly have a black hole in its finances when it has a magic money tree know as the Bank of England, which can simply print as much electronic money as required to fill even one thousand holes in Blackburn, Lan-cash-ire.

    Just as the the ECB is currently doing via the fig-leaf of the Long Term Refinancing Operation (LTRO).

    Sometimes all that glistens is gold, as central banks around the world quietly continue to purchase the yellow metal.

  • Comment number 4.

  • Comment number 5.

  • Comment number 6.

    We are a trillion pounds in debt.

    The Treasury finances the nation's borrowing by issuing Gilts.

    QE has created over 500 billion pounds.

    The BoE gets the new QE money into the system by buying up bonds & Gilts.

    There are now over £300 Bn worth of Gilts in the BoE, sold to them by banks, several of which are majority owned by the Treasury, and more Gilts are being bought up by the day.

    Of the trillion we owe, more than 10% of it was borrowed to bail out the banks.

    The Treasury via UK Financial Investments owns over £110 Bn of bank shares & loans.

    So the Government is raising taxes like VAT and cutting spending to pay of our debt - to ourselves - getting on for half of whihc is now held by the BoE.

    What if the Treasury sold our bank assets to the BoE, then used the money to pay off some of our Gilt debt - to the BoE - which could then sell these bank assets on the open market - and use then money to cancel out another £100 Bn+ of gilts it already holds?

    This would reduce our debt by nearly a quarter, bringing the UK back into line with the international average level of debt. It would obviate the need for austerity at all and get the government out of commercial banking, freeing up resources to stimulate demand in the economy via tax cuts and/or new spending.

    As the volume of Gilts in the system would then be reduced, this would feed into the money markets and cut the cost of our borrowing, so helping the government to step up the pace of debt reduction for the remaining borrowing.

    This would of course punch a large hole the argument that Labour maxed out the credit card, because it would be using the asset the last government bought - bank shares - to repay the debt we had to incur to prevent the entire financial system coming to an abrupt halt.

    But in this world of smoke & mirrors and creating Fiat money out of thin air, being in debt to our own central bank and the government effectively sitting in all the chairs at the table via the Treasury, the Bank of England, the high street banks and via the regulators too, just about anything is possible.

    The only conclusion I can draw is this. The Coalition believes in shrinking the size and influence of the state and therefore they won't use any of the possible options to alleviate the claimed need for austerity. The debt level is the wooden horse which has carried them right into the heart of the state and this allows them to slash and burn with impunity - any

  • Comment number 7.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 8.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 9.

  • Comment number 10.

    I THINK WE HAVE TO LOSE THE HABIT OF REGARDING WESTMINSTER AS GOVERNANCE (#6)

    Surely it is now very apparent that governance is the last thing they attend to?

    Is Westminster not a place where people of little relevant experience go to exercise a set of behaviours that are anathema to ordinary folk, while playing games with their lives? Priorities: get elected as an individual/rosette, gain a majority as a party-group, do/say/publish ANYTHING to ensure majority is maintained. At each General Election, be it MP, party-of-power, or PM - under the corrupt Westminster Ethos -

    WE GET OURSELVES ANOTHER ONE

  • Comment number 11.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 12.

    After the war there was austerity which was constantly attacked then rationing ended and consumerism began. What was then seen as a luxury is now seen as basic. There have admittedly been many jobs created in the private sector - in India and China etc. rather a long commute! Automation has further reduced jobs while civil service jobs which provided money to spend in shops etc. have also been reduced. How nice for the few survivors of the war. They at least won't be surprised at where excess got us a species.

  • Comment number 13.

    Crikey, pity I missed tonight's episode! Will catch up on iPlayer..... Newsnight is one of the top 4 topics on Twitter!

  • Comment number 14.

    THE ENLIGHTENMENT ISN'T WORKING - BRING ON THE AWAKENING

    Take a look at our culture: a society functioning under the influence a fairy-tale monarchy with all its sub-trappings, pantomime religions, and a feudal government, interlocked with the aforementioned two.

    Our citizens - products of secondary mothering and state institutionalising, now consist of the poor-in-spirit COPERS, THE ASSORTED SICK, and CRIMINALS. In my view, only by instilling in the young the neglected skills of philosophy and awareness, leading to maturity and wisdom, such that CONTENTED lives may be lived with a minimum of 'stuff', can any sort of viable future be achieved. We watch endless discussion of MECHANISMS, to be applied to our increasingly incompetent mass of humanity, with all the participants conspiring to ignore reality, as above. They are “living within the lie”.

    Oh - it's all going terribly well.

  • Comment number 15.

    MAKE DO AND MEND - BEWARE THE SQUANDERBUG - WASTE NOT WANT NOT (#12)

    In the 40s, things could be mended. As plastics and automated manufacture came in, they could not. Modern technology and materials COULD make repairable things again, and as manual workers have declined in numbers, there would be a boom in little shops where talented artisans fix things.

    http://www.youtube.com/watch?v=ASQmU3L9lNI

    Such a cultural shift might well go with THE AWAKENING (#14). Our best bet is to drop out of this 'world power' illusion and just be good at stasis and sustainability within our shores. BUT IMAGINE HOW HARD DAVE AND CHUMS WOULD FIGHT THAT!

  • Comment number 16.

    'Functioning under the influence of a fairy tale' full stop.

  • Comment number 17.

    Was it the Brothers Grimm who concocted a story about a fisherman and his wife who lived simply but the wife was not satisfied so nagged her husband into asking the enchanted flounder he had caught and thrown back (well, you would if you caught a fish that spoke!) to give them a bigger house. This went on until she wanted to be God. They were sent back to where they came from.

  • Comment number 18.

    Paul Mason is right. It makes me laugh to hear about people trying to predict our future 50 years on, when we do not even have a medium term, let alone longer term plan for business from politicians or business people in this country. I mean someone in 1912 predicting what would happen, or would be our future in the 1960s is similar to now, it's going to be different to what we imagine, and things change. Didn't someone say, the future is not set.

    Regarding working to an older age. I have seen people in any job deteriorate when they have finished work, especially if they have no interests. But people who work in manual or physically intensive jobs fair better if they carry on working. Four fit men who I knew, who retired from work, died only a few years after retirement. They all missed work too. Two I know who are in their late 60s and decided to carry on working are still fit, happy and show no signs of decline. Once they stop, they have had it. That's not to say they should not have more time off if they need to in the future. This may be the new type of thing to do in years to come, rather than retiring, and that's it, the end. I see myself working until I die. I don't feel there will be retirement, and quite frankly, we as individuals and as a country cannot afford it anyway.

  • Comment number 19.

    Maybe the answer to the threat of a black hole lies in the hands of middle-income Britain rather than the government.

    In the worst case scenario laid out in the prog, it is possible that the government cannot solve the problems simply by changing the system - it would not achieve anything like enough. In that case, it would be up to the large middle income block to start saving like mad for their own futures and contemplate living with their children as a matter of course in later life.

    Then they do not need to be paid a government pension (the pension becomes a benefit-in-need only payment) and care provision would be less because they are looked after by family members.

    Of course, to achieve this situation and to make sure we all save enough, a few luxuries may need to be abandoned - huge TVs, iPhones, living long distance from work, foreign holidays, computers with everything, expensive internet connections, multiple cars, massive BBQs on the new decking, iTunes downloads (well, you wont have an ipod to play them on), huge wardrobes, online bingo, take-a-ways....

    That should be a popular solution! :)

    http://www.theliberalmajority.co.uk/business/the-looming-long-term-black-hole/

  • Comment number 20.

    @6 "The Coalition believes in shrinking the size and influence of the state and therefore they won't use any of the possible options to alleviate the claimed need for austerity. The debt level is the wooden horse which has carried them right into the heart of the state and this allows them to slash and burn with impunity"

    You've hit the nail on the head there Richard!

    @9 A good link - surprising words of wisdom from the Express - Maddie wasn't mentioned once! The only objection I might have is that it would encourage even more people to move to the overcrowded South-East of England. And - if the South-East wants the water, the South-East should pay: otherwise it will mean that the rest of the country are subsidising their property prices.

  • Comment number 21.

  • Comment number 22.

    '1. At 19:55 13th Mar 2012, barriesingleton wrote:
    NN BLOG IS LIKE SWEETS - TWO STUCK TOGETHER.
    I had no knowledge of "Monday" until "Tuesday" (just) arrived.
    is it me?


    Nope. My thoughts exactly. Questions won't be answered.

    Sorry you are having fun negotiating with the powers that be minus over at The Editors.

    Speaking of not answering, I have asked for input on this:

    http://www.bbc.co.uk/blogs/theeditors/2012/03/why_bbc_journalists_are_in_bes.html?postId=111979561

    '9. At 21:49 13th Mar 2012, NollyPrott wrote:
    http://www.express.co.uk/ourcomments/view/307718/Basic-engineering-could-sort-out-our-water-shortages


    I can see two reasons our politico-media classes have lost the plot here: 'basic' & 'engineering'

    13. At 23:31 13th Mar 2012, Mistress76uk - Newsnight is one of the top 4 topics on Twitter!

    As is, currently, Bexley, at least in a certain hashtag configuration.

    But given what goes in, or out of our MSM these days, many might not know why.

  • Comment number 23.

  • Comment number 24.

    Debt

    migration results in social instability which is why we are spending billions on internal security against 'our own citizens'. This is only set to increase. Migration also provides a base for far left nd far right movements.

  • Comment number 25.

    There IS An Alternative To European Austerity: Modern Money Theory (MMT)

    http://michael-hudson.com/2012/03/mmt-as-the-austerity-alternative/

  • Comment number 26.

    museV @ 21

    Years ago, the clients of convicted swindler Roger Levitt, including author Frederick Forsyth, were know as 'Dibbles' in by Levitts staff, after the hapless Officer Dibble in the wonderful Top Cat cartoon series.

    Today I read that clients of the 'giant vampire squid' aka Goldman Sachs, are routinely referred to as 'muppets'.

    After all these years, all that has really changed is the size of the swindle.

    Mel Gibson 'rant mode' fans might have noticed another connection but I think I'll leave that one well alone and put it down to co-incidence.

  • Comment number 27.

    Cameron in USA

    will there be a extradited prisoner swap on the lawn? On wait i can see the flaw in that idea

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    23. At 12:53 14th Mar 2012, museV wrote:
    Why I am leaving the Empire, by Darth Vader
    http://www.thedailymash.co.uk/index.php?option=com_content&task=view&id=5007&Itemid=81


    That, I like.

    But speaking of going over to the cryptic side, whilst le chien de blogue may be cool, less sure on this, coincidentally, on the all-inclusivity front, left alone, well, or otherwise...

    'Mel Gibson 'rant mode' fans might have noticed another connection..'

  • Comment number 30.

    BONA FIDO? (they know who they are)

    Permission to have you taken down for use of Lingua Frogga Junkk?

    All this decoding is hard for my old brain.

    Suff rhet

  • Comment number 31.

    It's all Latin to me!

    Permission refried.

  • Comment number 32.

    Our past mistakes of believing that our government knew what they were doing and only worked in the interest of the people have come home to haunt us.

    As Newsnight made clear they only look as far as the next election and problems continue to pile up and are pushed into the long grass.

    The graph shown by Paul on Tuesday's Newsnight should bring home just how much has been accumulated for the future generations to have to tackile. Unfortunately there won't be enough of them to pay for it.

    Perhaps that's why the new strategy seems to be water cannon tasers and chemical gas.

    Some of us do care about what we leave behind but what about the rest?

  • Comment number 33.

    The mainstream media seem hell-bent on trying to convince us that the 'recovery' is in place. The glass is a quarter full, instead of being three quarters empty. It's all BS! The basic sums simply do not add up. Average pay is up only by 1.4% while inflation is 3%+, and this is on the back of bigger deficiencies over the last few years. There are more cuts coming this year, problems with the PIIGS, and then there's the cost of oil reaching record levels. This is not to mention the UK drought may hit food prices later this year.

    We essentially have a Tory government that is hell-bent on social engineering and ripping up the social contract that exists between citizen and state which did not get a mandate from the electorate - only 22% of the electorate voting for them. The British are the most hypocritical spineless losers on the planet. Tie a stick to their heads with a carrot on the end and watch them happily run off a cliff. You get the government you deserve losers!

  • Comment number 34.

    33. At 19:13 14th Mar 2012, dceilar wrote:
    The mainstream media seem hell-bent on trying to convince us that the 'recovery' is in place.


    May I beg to differ, at least presuming the definition of main encompasses all media monopolies forwarding tribal PR?

    'This is not to mention the UK drought may hit food prices later this year.

    Being the one that can be averted by spending bazillions on averting climate change, as opposed to not shoehorning vast numbers of extra folk onto previously open spaces around London and the South East, the former being mentioned a lot in some media quarters, and the latter... not so much?

    'You get the government you deserve!'

    True enough. Though one might hazard your suggested alternatives are absent as relative comparisons would be even less favourable. Depending on which objective editor assigned to 'analyse', of course. Sadly you can also 'get' the media you don't deserve, or want, without choice, or vote, or...

    But kudos on trying to win folk over to your argument with honesty over empathy.

 

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