Bruno is understood to be seeking a share of the additional revenue which pay-per-view coverage

Bruno is understood to be seeking a share of the additional revenue which pay-per-view coverage would generate, while Sky is unwilling to meet his demands.For despite posting sharply higher profits, BSkyB, which is 40 per cent owned by Rupert Murdoch’s News Corporation, saw its shares drop 22p to 392p, well off its peak of 434 reached just before Christmas. MATHEW HORSMAN

and KEN JONES
Outstanding financial results from BSkyB were overshadowed yesterday by the Office of Fair Trading’s decision to refer the satellite broadcaster’s Premier League contract to the courts.The skies were further clouded as BSkyB found its plans for making Frank Bruno’s world title fight next month against Mike Tyson the first domestic pay-per-view broadcast threatened by a financial dispute with the British boxer. Furthermore, the planned reduction below 40 per cent by 1997 has been helped by a redefinition of public expenditure that excludes lottery-financed spending and treats interest payments in a way that flatters the total.The key theme of Mr Clarke’s speech was that the goals of a low-tax, enterprise economy and a high-quality welfare state were both compatible and, indeed, were mutually reinforcing.”I believe that we can have modern public services and at the same time be a low tax economy,” the Chancellor said.. By contrast, Mr Major and William Waldegrave, the Chief Secretary to the Treasury, have said they would ideally like to get the ratio down to 35 per cent.As both the Treasury and Downing Street went out of their way to emphasise the harmony between Mr Clarke and the Prime Minister, the Chancellor said that he expected to reach the “extremely important milestone” of getting public spending below 40 per cent of national income by the 1997/98 financial year.”The Prime Minister and I have both said in remarkably similar words that we will achieve that target and we have both said we will then aspire to reduce it further.”However, according to the Treasury’s projections, public spending will still be 39 per cent in the financial year 1998/99. The recent events in France, riots on the streets of Paris, illustrate the social disruption which social reforms can bring.”A key reason for the reports of divisions between the Chancellor and the Prime Minister arose from the scepticism Mr Clarke recently appeared to have expressed about the feasibility of cutting public spending as a proportion of GDP to below 40 per cent.In an interview with the Financial Times last week, Mr Clarke said he thought this was the maximum that should be aimed for, adding that he would be “very surprised if you got a developed Western economy much below 40 per cent”. The percentage of 18-year-olds going to university has grown in the past decade from one in five to almost one in three, and funding has not kept pace.. PAUL WALLACE and

DONALD MACINTYRE
Kenneth Clarke yesterday warned the Tory right that “overnight” slashing of the social security budget could lead to “social disruption” along the lines of the recent riots in France.The Chancellor pulled out the stops yesterday to scotch the growing perception at Westminster that a dangerous rift had opened up between him and John Major over social policy.But while allies of Mr Clarke were at pains to emphasise that the speech was a “mainstream Tory” statement of policy goals, his impassioned defence of a modern welfare state as a key foundation of an enterprise economy will be seen as a strong reassertion of “One Nation” Toryism.Mr Clarke said that social security reform was a lengthy process and added: “You cannot expect to get to grips with a burgeoning social security bill overnight.

A statement from the department said Mrs Shephard had invited the universities to provide more evidence on the impact of the cuts and to set up a discussion group on initiatives to increase private-funding sources.There has been a growing political consensus that students should be charged fees. The committee had asked Mrs Shephard to complete her review before its annual meeting in September and had called for firm plans before the general election, she said. Its members, who include the heads of more than 100 universities, hope to be able to discuss the proposals when they meet again next Friday.”If all it does is to reopen the whole range of issues which are then kicked into the long grass that just is not good enough,” she said.The vice-chancellors have called for a university funding system like the one which already exists in Australia, under which graduates begin repaying a portion of their fees once they are earning more than the national average wage.Mrs Shephard launched a review of higher education more than a year ago but Downing Street was not satisfied with its results and the publication of the review’s findings has been delayed.Last night, officials at the Department for Education and Employment refused to speculate on what the announcement might contain. The proposals will form the basis of the most wide-ranging review of British universities, their structure and funding, since the 1960s.Charges for university courses are bound to be among the range of options to be put forward by ministers. Both Labour and the Liberal Democrats are also thinking of ending the present system under which local authorities must pay for students’ courses.The universities have threatened to impose a pounds 300 levy on new students and to boycott teaching-quality inspections in the face of pounds 200m cuts over the next year.The restrictions imposed by the Chancellor, Kenneth Clarke, would mean 50-per-cent cuts in building and equipment budgets over the next three years.Last night Diana Warwick, chief executive of the Committee of Vice-Chancellors and Principals, said universities would be deeply disappointed if Mrs Shephard’s new review did not unveil any firm proposals. FRAN ABRAMS

Education Correspondent
Plans for far-reaching reforms in higher education will be published within days, fuelling fierce speculation that students will soon have to repay university fees, it emerged last night.Ministers have bowed to pressure from vice-chancellors who say deep cuts to university budgets are making it impossible for them to deliver high- quality degrees.At an emergency meeting on the crisis yesterday the Secretary of State for Education, Gillian Shephard, said she hoped to produce her proposals for reform before the end of next week.

I had no knowledge or business experience of Iran.”Mr Aitken did, however, make one intervention. Despite his lack of defence industry knowledge, he suggested the company should hire as an agent in Saudi Arabia someone who had previously secured a contract for Vosper Thorneycroft, the warship builder.. “My business activities had been conducted on the Arabian side of the Gulf. “My own business experience in the Middle East had been in the fields of financial services and civil engineering, and had not been in defence,” Mr Aitken writes. They discussed export possibilities for the firm, especially in Saudi Arabia. When it looked as though Astra might suffer in the fall-out from the privatisation of Royal Ordnance, Mr Aitken fought its corner.In July 1988, Mr James repeated his offer. Mr Aitken declined again but this time consulted a fellow director of his bank, Aitken Hume, who persuaded him Astra was a go-ahead company that should be courted.”So I reversed my previous stance and telephoned Gerald James to say that while I would not be interested in a Parliamentary consultancy I would be willing to become a non- executive director.” Mr James suggested he join the board of BMARC, for pounds 10,000 a year.Before his first board meeting, in November 1988, Mr Aitken held meetings with Mr James and acquainted himself with BMARC’s business.

.”In June 1987, Gerald James, the Astra chairman, offered him a paid consultancy Mr Aitken refused but he continued to assist the company. As part of what he describes as “routine constituency work” he wrote to ministers on the company’s behalf, “on matters such as ECGD cover, an export licence for distress flares to Iran. He resigned from his ministerial post last year in order to devote more time to fighting libel actions against the Guardian and Granada TV’s World in Action, which made a series of allegations about a health farm with which he was connected.He says in the submission to the committee that he first became involved with BMARC through its Astra Holdings parent, which was based in his South Thanet constituency. I was if anything reassured to know that BMARC was shipping its products to a company owned by a friendly Commonwealth Government whose record for strict probity and compliance with UN resolutions and general international regulations was well known,” Mr Aitken writes.The committee investigation was set up after Michael Heseltine, the then President of the Board of Trade, confirmed the Independent’s articles when he reported last June that there was evidence that BMARC guns had gone to Iran.Mr Aitken is due to appear before the committee next month to answer questions on his version of events. Singapore has only a small navy, and defence experts have argued that it could not possibly have required the140 naval cannons shipped by BMARC.Mr Aitken, who says he visited the Grantham factory, “saw the products being manufactured and discussed them with members of the management team and workforce,” but was apparently unaware of the rumours about their final destination.He attended other board meetings, but again, contrary to assertions from Mr James and another director that Project Lisi and Iran were discussed, Mr Aitken says he heard nothing.He stresses: “It should be remembered that in those days I had no previous knowledge of the technical terminology of defence equipment or ammunition types whose acronyms and shorthand descriptions can be bewildering at first hearing, particularly to someone coming new to defence business, as I was.”Mr Aitken says in his submission:”The destination of Singapore did not cause me to have any suspicions.