27/06/2012 Newsnight

Tonight, bankers back in the dock as Barclays is found guilty of

lying to customers and investors, by tempting to rig interest rates.

The bank is fined, the boss forgos his bonus, but is that enough, and

was everyone else at it. The regulator tells us the wrongdoing

went further than one rogue bank. We have to look at each case on its

own particular facts, but the initial indications is that

Barclays was not the only firm involved in this. As we understand,

RBS was in the frame, we ask our panel what needs to be done to

control our banking system. How hard do you have to look before you

find this on your computer, more importantly, how hard do your kids

have to work. I typed in two words on my laptop, I was absolutely

gobsmacked by what came up. I had no idea at that point, just how

explicit the pornography was. campaigners warn of the Government

going soft on porn, we talk to the virtual reality pioneer, Jaron

Lanier, and ask our panel if it's time to make us opt in to what we

view. Also tonight:

Welsh baritone Bryn Terfel talks to us on the eve of his major Welsh

music festival. I can't act. I put myself in whatever the director

tells me, I try my best to achieve his insights and thoughts.

Good evening, how do we put some of the banker blame game behind us?

Bob Diamond the head of Barclays asked the select committee last

year. Tonight he may be eating his words, after his bank was found

guilty of lying over the course of four years about the interest rate

it was having to pay to borrow money. Perhaps, most shockingly of

all, the lying was done as decently as 2009, as a result of

instructions from Barclays senior management. Today Mr Diamond

apologised and has given up his bonus. Tonight Newsnight has

learned of other banks under the spotlight doing the same thing.

Inside Barclays there is the gambling side called investment

banking, and more mundane advisory and retail sides. Between them is

supposedly a sacrosanct Chinese wall, but this rate-setting scandal

appears to have destroyed the very edifice of that wall. The

reprecussions could be huge. The InterBank lending rates, which

Barclays has conceded it tried to manipulate, are also used to set

mortgage rates for millions of people around the world. The banks'

traders reached across the corridors to their colleagues, who

set these rates, and illegally persuaded them to push them up or

down in the bank's favour. That has earned the dubious result of

getting fines on both sides of the Atlantic. The CTFC, the American

watchdog, said Barclays top boss, not only lowly traders were

Some of the e-mails between traders underpinned the level of collusion

At the heart of this scandal is LIBOR, or the London Interbank

Offered Rate, this interest rate is agreed by a select number of key

banks every day, and despite its very local name, it is a global

Bevan mark for contracts worth hundreds of trillions of pounds. So

even the smallest deviations can save or cost a bank billions.

The fact that the banks have been manipulating LIBOR, the rate of

interest on those loans, is outrageously shocking. The Barclays

boss, Bob Diamond, said today he would give up his bonus this year,

he has been trying to draw a line under banker bashing for two years,

and even drew an ethical line under the business last year. We have to

build a better way of banks generating growth. Second, we have

to accept responsibility for what had gone wrong. Finally, and most

importantly, we have to use the lessons learned to become better

and more effective citizens. Bob Diamond's predecessor, John

Varley, boss at the time of the collusion, is 12-1 to be the next

Governor of the Bank of England. Diamond had a shred of shame he

would resign, he hasn't, if the Barclays board has an inch of

backbone they will sack him. Utterly unacceptable that he could

carry on after this, and after Barclays' aggressive tax avoidance

when they had to pay �500 million back to the Treasury in February,

enough is enough. Barclays would have paid a much bigger fine but

for the fact of the banks being investigated, they were the first

to put up their hands and claim leancy. This suggests this is just

the tip of the iceberg, and there are plenty of banks, including some

very big British banks, that are waiting anxiously for the wrath of

the regulator, or the approbium of the public. We know that other

leading banks are involved in these investigations. So we know that the

Royal Bank of Scotland, UBS, Citigroup, Lloyds Banking Group,

Deutsche Bank, the broker ICAP, are all currently in the spotlight. We

could see more events like we have had today. Newsnight understands a

handful of RBS traders have already been dismissed for their part in

fixing InterBank rates. The state- controlled bank is co-operating

fully with regulators both here and in the states. There is no doubt,

though, that this latest scandal, surrounding the banking fraternity,

will further damage an industry, whose public reputation already

ranks below car clampers and tax inspectors. After PPI, outlandish

bonus, and the mortgage-backed assets, that caused the financial

crisis, this latest may beat them all. Colluding to set the rate of

interest that decides how much ordinary people pay for their homes,

may prove for banking what phone hacking did for tabloid journalism.

We asked Barclays for an interview tonight, they declined our

invitation. A little earlier I asked my guest from the Financial

Services Authority, how shocked she was at what they had discovered?

found the misconduct of Barclays is some of the most serious we have

ever seen, that is why the penalty we have imposed is such a

significant one. We were looking at this at the end of 2009, beginning

of 2010. The more we dug into it and the more we looked into it the

more we found in relation to misconduct by the traders and

across the relevant desks. We took this very seriously indeed.

damaging do you think this could have been, then? The issue that is

of concern to us here, is LIBOR is obviously the benchmark rate used

for contracts across the world, worth hundreds of millions of

pounds. It is really important for the integrity of that rate to be

preserved, that the market is confident that the rate that is

fixed actually reflects what it is supposed to, which is the amount at

which banks can borrow from each other. The risk that was supposed

by the misconduct we have seen at Barclays is that the rates risk not

being based on those borrowing figure, but were being based on

other issues, for instance, the positions of derivative traders in

relation to their book, or concerns about Barclays reputation. We took

this very seriously indeed. Realistically, you haven't got to

the end of things here, how widespread do you think the

practice is? We have a number of on going investigations in relation to

LIBOR. Whilst those investigations are on going I can't comment on

them, when they are concluded we will clearly publicise the outcome.

When you say a number, are we talking more than a dozen, more

than five, how many are we looking at? I'm afraid I can't give awe

number. All I can say is we have a number of investigation that is are

on going. But you are pretty sure you are going to find a situation

similar to the one in Barclays in at least one of them? I think that

obviously we need to look at each case on its own particular facts,

but the initial indication was that Barclays was not the only firm

involved in this. You have imposed a fine which you say is the largest

of its kind, nearly �300 million, that is the kind of sum Barclays

could make in half an hour? penalty, the number you talked

about is not just our penalty, that is also the penalties imposed by

the US authorities as well. They have imposed penalties on Barclays

today. The penalty we have imposed we think is a very significant

penalty, it is set in accordance with our own penalties' framework,

I think the impact on Barclays goes far beyond the simple penalty, the

amount of publicity and comments that will have happened today and

over the coming days in itself will be significant for Barclays'

reputation. Thank you. Here to take the story on, from

Washington we have a lawyer for the securities and exchange commission

in Washington, he now runs a company advising bankers about

regulations. In the studio we have the former City Minister, and a

former banker, thank you very much to all of you.

In Washington, I will start with you. You heard from the FSA there,

in your opinion, does the punishment fit the crime, would

this stop any bank doing it again? First, I have to say I'm a former

ACC lawyer, not current. I think what the FSA did was not hard

enough. I think the facts support conflicts of interest, a systemic

breakdown in supervision and management. There is an attempt to

blame compliance when compliance was not responsible for it. I think

what the FSA did was levied a slap on the wrist, when compared to the

US Justice Department, and also the CFTC. If you read the CFTC's order

that came out today, there were 18 pages of significant controls,

requirements, that Barclays has to adhere to. There is training,

supervision. I think this is what I would call not a victimless crime.

I think what the FSA could have done, and had the opportunity to,

was do more than levy a fine, I think they could have imposed

severe restrictions on the ability of Barclays to operate in this

market. How would they do that? They could impose the same types of

controls that the CFTC did. Would have to make the entire process by

which they were to calculate data and submit them, provide it to the

regulator. They would have to undergo training, they would have

to keep records and beef up their internal controls. Most importantly

here, the disappointment that I see, is in a regulatory regime that is

designed around tough supervision, there really wasn't tough

supervision penalties imposed on this. The supervisers weren't named,

when, if you compare with the CFTC did, there were very clear

instances pointing out specific instances of supervisory failure.

What a regulator has to do is be clear, yes the FSA did the right

thing, but it didn't go far enough in imposing specific controls and

provisions in Barclays to continue to stay in this area.

I will stop you there. You have heard there the blame being levied

at the supervision, or the lack of regulation. As a former banker, can

you say people should be putting their hands up and saying we did

something wrong, you can't just keep pushing the blame on

regulation? I think there are a few points here. Very clearly, there

was deliberate attempts to manipulate these numbers from the

derivative areas to the bit returned to the Reuters that set

this rate each day. That process was lax in the way it was being

supervised. I think one can't but agree that is the critical flaw

here. You are talking about lax as if these are children that were

running amock in a playground. Surely the people in charge knew

they were doing wrong? I would imagine that it would be difficult

not to know that it was quite wrong, what was being influenced. One of

the criteria of LIBOR is the rate is set by the people who are

responsible for the cash position of the bank, and not by the trading

areas of that bank. There shouldn't be any contact between the two.

That is the fundamental guideline. This LIBOR position has to relate

to the unsecured borrowing between banks, and the rate at which they

could borrow that money. When you look at the kind of e-mail that is

were sent, the very pally ones, let's open a bottle of champagne,

it was a boys' club? There was that kind of culture, there shouldn't

have been that kind of communication between those two

sides at all, that is the critical thing. You can see from this, the

reasons why people are very keen to achieve closer separation between

the retail banking side, the Treasury side of the, if you like,

the more mundane part of the bank, by comparison with the investment

banking piece. Because at the back of this you probably have a

boneless structure that is driving behaviours you don't want to have

happening. You can talk about a bonus structure or a Chinese wall,

but there will be people silting at home saying I don't understand --

sitting at home saying I don't understand why there aren't

criminal prosecutions over this. Lying on something that is meant to

be a standard bearer for the industry? They have let Barclays

off lightly, the �300 million is less than Bob Diamond has earned in

the last four years. It is a few days trading profit, it could be

the profit that arose from one single lie. The American

authorities were much stronger in their language than the UK. They

used the word "lying", they detailed multiple failures. This is

the most corrosive failure of moral behaviour that I have seen in a

major UK financial institution n my career. You would like to see

criminal prosecutions, presumably? I think fines and public criticism

will not stop these behaviours. These behaviour also not stop until

the people perpetrating it, or are responseable for oversaeing --

Responsible for overseeing them face the prospect of going to jail

and criminal charges. What should have happened to Diamond? Barclays

people said they were not taking their bonuses, most people would

say why are they getting bonus, the bank isn't making an adequate

profit, and Mr Dime has had to tear up his business plan. This bank has

been fined by the FSA four times in the last two-and-a-half years. Why

they were paying bonuses I think, in itself, is highly questionable.

What should Barclays Bank do now? They need to look at the people at

the top. The chairman at the bank was there when it all happened, the

chief executive was there when it happened. What do you mean look at

it, do you mean fire them? They have to ask seriously whether the

people at the very top of the bank were setting the right cultural toy.

In Bob Diamond's BBC Today Programme lecture, he said the

culture of an organisation was what happened when you thought people

weren't looking. We now know what was happening in Barclays when they

thought people weren't looking. They were, in the words of the

Department of Justice in America, lying. And we cannot have people

like that holding responsible and senior positions in a banks where

the taxpayer ultimately stands behind it. Why isn't there a single

political leader or party tonight, then, that is calling for him to go

f that's right? I don't think we know enough, Emily, about the

detail. But the idea that the time has come for deputy heads to hole

is a nonsense, the people at the very top must take responsibility

for a complete cultural failure. This is a company that is had to

pay back �100 million for mis- selling of protection insurance,

and multiple fines in multiple jurisdictions. This behaviour

didn't just happen here, it happened in America and Asia. It

involved a wide number of executive, according to the regulators. There

is something deeply wrong at the heart of Barclays, and the response

to date has simply been inadequate. Do you think that's right. In the

report, we heard many other banks and institutions named. This is

presumably going on in the US too, you probably know the ones under

investigation there. I agree, being a former regulator in the United

States and Britain. Having been a compliance officer and seeing firms

from the inside. The heart and soul from any organisation is tone at

the top and proper supervision. The evidence here is neither were

present. The thing that shocks me the most is the attempt to blame

compliance for something is completely wrong. That is situation

where senior management have an affirmative responsibility to

document that they are supervising. In Asia, here in the states, in

England, anywhere in the world, conduct like this is flat out

unacceptable. When you say, conduct, there is no proof that anyone

actually physically lost money over this? Right? The issue is not the

loss of money. The issue is a failure to supervise, consistently

in enforcement actions around the world, regulators always point to a

failure to supervise as a contributing factor to an initial

breach. If these individuals were properly sup advising, they would

have not only idea -- supervising, they would have not only looked at

the conflicts of interests, but addressed it. There is a failure to

deal with conflicts of interest and supervise, if there was, the firm

would have been caught out and rooted out months ago.

wondering if you were working at Barclays tonight, would you be

thinking your reputation was in tatters, or would you be saying, we

got off that one quite likely and look at the other ones under

investigation, we will just melt into the middle? There are big

worries certainly about the supervision point. I superintendant

a lot of people don't understand what this relates to. But these

interest rates governs about �10 trillion worth of borrowing on the

syndicated markets, and �250 trillion of trading in swaps,

interest rate cover and other things. It is a very important

mechanism. It is crucial the pricing is right, otherwise the

counter parties to the organisation, you and I, and everybody else, are

basically paying the wrong interest rates. That is what the fundamental

risk is that is going on here. What is crucial. Let me just ask you

that again, faced with what we have got, essentially a fine, which as

Lord Myners said, Bob Diamond could make in four years, they won't be

feeling this is something that is so outlawed, so immoral, so

criminal, that nobody will be doing it ever again? They will be feeling

the reputational damage imposed by this control. Even if they are one

of 10 or 12? Even so. There will be big problems associated with this.

What is critical to us. And by "us" I mean, us, as a country, is that

we put the supervision in place to make sure this type of problem

doesn't arise, and bear in mind this was raised back in 200, by the

Wall Street Journal. Raised in 200, when you were City's minister, you

must have known about this? There were problems of setting The

Libertines interest rate structures, this is not a new occurrance -- the

LIBOR interest rate structure, this is not a new occurrance. This was

not known about at the time, if it had, action would be taken. People

have lost money because of this, the Department of Justice in

America is very clear in its wording, that losses have arisen as

a result of this. We are going to see a lot of litigation.

As anyone who has ever looked for porn on the Internet, many of you

haven't, but found it any way. It doesn't take a degree in computer

science, gone are the days of credit card payments and tricky

encryptions, now it is as easy to get as YouTube. Should be providing

be made block all pornographic images, an issue looked at tomorrow.

Newsnight understands that coalition ministers are currently

reluctant to opt-in measures, they want to go for a watered down

version of on-line child protection. A good old fashioned scare story,

or a genuine threat to Britain's teenagers. Newspapers have been

full of headlines, warning about the dangers of unfiltered,

unstoppable porn on the Internet. Now the argument's changing. It is

not whether porn is damaging young people, it is how the Government

should stop children from watching Hi, welcome to our lesson on

pornography. At this comprehensive in Sheffield a group of 16-year-

olds are being taught the difference between real life and

what they see on a computer screen. A girl wouldn't feel comfortable

doing something on porn, but boyfriends would expect them to do

it. Born in 1996, this is the first generation to be brought up on-line.

Do you think that pornography is really easy to get hold of on-line.

They don't have to directly type in porn, even when they do it comes up

with pages and pages full. They would easily be able to access it.

Do you think it should be harder to get hold of? For certain ages, yeah.

This sex education class is unusual, though. In other parts of the UK,

schools and colleges have been reluctant to tackle issues like

porn. The governors don't like it, and often parents don't either.

want to know what our young people are looking at, particularly

because I have children of my own. When I typed in two words, into the

Internet, I was absolutely horrified with how easy it was to

get hold of really extreme pornography. I think if our young

people have access to stuff like that, we owe it to them to make

sure our sex education is really up-to-date, takes account of the

fact that they can access this kind of stuff. We need to look at the

messages coming from pornography, and counter act some of those

messages. At the centre of all this is a shift in the way porn is

viewed, the way porn is accessed on the Internet. Just a few years ago

many adult sites needed a credit card, now those pay sites have been

replaced by what looks like very adult, very X-rated versions of

YouTube. The new free sites offer unlimited

access to thousands of hardcore video, with no age restriction at

all. The material is often so extreme, so accessible, many now

think it is time for the Government to step in.

There are three main option ones the table, first up, do nothing,

many civil liberties groups think policing the Internet should be

left entirely up to parents. Next, active choice, sign up for a new

broadband contract and you will be forced to choose whether to install

a child prodetection filter, all the main broadband providers have

agreed do this, it is the Lib Dems preferred option, and Newsnight

understands Conservative ministers are keen as well. Many want to go

further, an automatic block, a porn filter is turned on by default,

that can only be lifted if you contact your internet provider or

switch it off. That is supported by Labour, and some backbench story

MPs. What we want is a one-click solution, that basically means that

adult content is blocked, if you want it, you have to go through the

filter to get T we think that would be safer, we think it is a system,

we know it is a system that works with the mobile operators, we know

it is a system people say they want. Delighted that the Government's

consultation is going to look specifically at that.

But, there are questions as to whether any block can ever really

be effective. With four million customers Talk

talk is one of the biggest broadband providers, it has spent

millions developing its own system for stopping adult content. We have

settings so we can wish not to allow this particular set of

children to view pornographic sites, gambling sites. This is a doctor of

computing at Cambridge, he says systems like this can be easily

evaded. That is how it should work, how

easy is it to get round the restrictions? There are several

ways of accessing unsuitable sites. We could just use a proxy f we want

to go off and look at a porn website, we could type this name in

here, and behold we start getting pictures here which your viewers

don't want to see. That isn't being blocked at all by

Talk Talk. It offers a certain level of protection, but people

would be wrong to assume protection is anything like perfect. The

system will block some of it, by no means all, if you view it as being

a substitute for parenting skills you will be sadly mistake. Switch

on Talk Talk safety settings you get an e-mail saying you can relax

and let your children surf the Internet. Is that a promise too far.

We try to be clear with our customer that is Home Safe is a

tool that will make the Internet safer, it won't make it safe, full

stop, in no way would we advise customers as a means to stepping

away in thinking how their children are using the Internet. Why do you

e-mail customers when they change their internet settings, that they

can relax and allow their children surf the Internet, isn't that the

wrong impression? That is not what we want to do, clearly that is not

right. Which want to give customers comfort that they have done a God

thing and build their confidence. The Government doesn't really want

to go down the road of extra legislation and red tape, but the

pressure is on with newspapers and children's charities now getting

together to demand stronger action. Unless the industry is seen to be

doing more, those voices are only likely to get louder.

We are going to carry on the debate here in the studio. Jaron Lanier,

the Godfather of internet reality, India Knight, the editor of Loaded

and Claire Perry, the Tory MP who you saw in that report.

You saw, Claire Perry, a second ago, who is willing to go the whole way,

and say if you don't like porn, make people opt in for it. That is

the bravest option, isn't it, India Knight? I don't agree, I do like

porn and I consume porn, I don't think, I know, statistics show us,

that an enormous number of men and women consume porn. That was the

phenomenal success of 50 Shades of Grey, triology, busting any Harry

Potter records. Porn you see on the Internet is legal, it is not

illegal, there is a dishonesty that occurs when lobbies seeking to

ghettoise porn link it to child pornography. Nobody sane or

rational is interested in looking at child pornography, that is out

there all on its own, to conflate child pornography and porn. I don't

think we have done that. You are comfortable watching porn, and

being known on national television being a viewer of porn, you

wouldn't mind opting into a scheme that asked you to choose? I know

when my children were small, like any parent, I tortured myself with

the idea of the images they might be seeing, and the appalling things

I might inadvertantly expose them to. The solution is to have the

computer in a public space, like a kitchen or sitting room, and not

send nine-year-old kisd up to the stairs -- up the stairs with a lap

stop. I put filters on them that my teenage boys dismantled in the --

in minutes. I don't want little kids watching t but it is my

parental responsibility. I have got children slightly younger, you are

right, in an ideal world, this is absolutely part of parental

responsibility, keeping kids safe, whether in cars or on the Internet,

we know, if you look at the facts, four out of ten families are

downloading these device-level filters, six out of ten British

children are going on-line, often with their laptop, offer half of

kids access the Internet in a private space, something we don't

think is right. We have to stop dealing with the perfect and the

theoretical and deal with the facts. We know children are accessing this

material. It is not porn as we know it, that came across, that teacher

is a very brave lady to be tackling that thing. What are you saying,

you are saying six out of ten British children probably watch

porn on-line? Are able to access pornography on-line. Hypothetically.

Also the proportion of teenagers, the filtering drops as your

children get to puberty. And arguably that is when you actually

want to start being very well aware. I agree being a vigilent parent is

absolutely the ideal, the facts are people aren't doing T the current

system we believe is defunct and it is time for different. Who is the

hypothetical six-year-old constantly exposed to porn.

evidence suggests that 82% of British people are really worried

about how easys to access porn. It is unique that people feel helpless

about it, half of people say their kids know more than them about

technology. And others think the school is teaching them how to

safely use the Internet, we are teaching them not to put out their

number on Facebook. There is a sense of helpless. You edited

Loaded for six years, do you think this problem should fall to the

broadband companies, the vehicle Which? You access? I think so.

Getting everybody to opt in is a step too far. The thing we should

stress is adults consume pornography in a healthy way and

shouldn't be criminalised. In relation to opting in, and you are

married, and your wife doesn't approve, what will that say about

that relationship correction it lead to marital break-ups. It does,

a lot of people are reporting it is a problem. If you drive anything

underground you make it more desirable and aspirational. More

people want it if you ban it, same as anything, that is the world.

What are you saying f you made people opt in, you think it could

have a detrimental effect on marriage in this country? I think

it possibly could lead to relationship problems because

people are made to feel grubby and secretive. Lots of people consume

pornography, why isn't it an issue. The consultation being led by

Number Ten tomorrow, this is something with a broad consensus.

To get back, we treat the Internet really differently, that is where

Gerald's view is so great, you have to opt in to get adult content on a

mobile phone. A parent getting a mobile phone contract for a child

has to opt in for adult content t works there why not the Internet.

Is it better to leave the Internet as the untamed wild west? First,

the Internet is not like the printing press or the TV, it has

really become more intimate and universal, it is the conversation

people have with each other. Getting into the middle of it has

more profound implications than getting into the middle of earlier

media technologies. My concern is if the Government takes this step,

you will enter into a cat and mouse game with all sorts of sneaky

technical players from around the world and you will have to escalate,

and end up in a different place than you intend. What makes more

sense is to look at the motivations of those who would pipe this free

porn nothing fee. If you really look at why on earth -- pornography.

If you look at why on earth they do it, when kids send to to each other

we can't do anything about, that I would prioritise issues like

bullying, however. You are saying the porn providers are doing it for

money? They are, and how are they doing it for the money, the porn is

free, it is not directly for the money. They are using it as bait to

gather data about people and children. It is a private spy

service. So if the law was focusing on that, if you said that sneakly

gathering data on people and selling data has more severe

penalties for everybody in the chain, you would get universal

support and shut down the motivation, without getting into

the middle of expression. It is this bizarre, corrupt idea that

because everything is supposed to be free on the internet, the only

allowed business is to run these private spy agencies and sell data

about people. That is the core problem here, that is the motivator.

That is not something the Government will tackle.

Internet is a global, unregulate thing, that is why it is a force

for good in the world. It is Ince credibly hard to regulate it. We

are not suggesting that, Government doing that is bad idea, we would

like the ISPs to have a self- regulation model. If you make them

do that it is the same as the Government stepping in? It is

putting up a consultation about the pros and cons. When we had the

debate and the parliamentary inquiry, we had tonnes of ideology

about it being too expensive and destroying the Internet economy,

there were no facts produced to support any of that, it is

assertion. We would like the facts and make the decision. If it had

been as easy for Loaded to get pornography to readers as it is to

the internet, you would have done brilliantly? Our business was

destroyed by the Internet pornography, we were �4, and had

you to go and buy t and we could be sued if we break the laws. We

operated within the PCC and the retailers, we would be delisted, we

couldn't compete. The Internet is a din interprice, they eroded our

business and destroyed it. Did we want to do that? No, we weren't a

porn magazine. Where do you sit on this debate, do you regret the kind

of stuff you pushed as an editor? grew up and became a father, my

perspective changed at that moment, it is a young man's game. Being a

father and working in an industry where Loaded was the softer end of

the scale, it is described as a nursely slope for it, I got out, it

was my choice. When you say you are happy with porn being in the house?

I'm not saying I'm gathering people around after Sunday lunch. If your

boys came and you had the talk with your sons, do you think it aters

the way that they will say sexual relationships? I used to think that

it would. I used to think in my more panicked moments that they

would be Ruskin, unable to have sex with his wife on her wedding night,

because she didn't look like a perfect Greek statue and had pubic

about hair. I used to worry prech that my male children would think

women looked and behaved in a different way. That is nonsense,

they exist in a world of normal women, and are able to tell the

difference between fantasy and reality. I think it is worth saying,

I don't think Claire realises the level of intrusion and snooping

that her plan involves. I don't want when I'm Googleing, if I'm

doing something innocent, if I want to buy underwear on-line, and

include my bra size, or if a 15- year-old is going goinging

penetration with regard to work, we are branded and blocked. We can't

do it. One phrase you used about the

difference between reality and the web. You coined this phrase,

"virtual reality", do you think people understand the difference,

people that have grown up from 1996, they have grown up using and

knowing nothing but the web? What I have observed with the young people

I have worked with is two divergant trend, on the one hand we are

creating a new class of bullied people, an underclass, that is

divergant from the issue of on-line pornography, that is on-line

society and the meanness of it. If anything, I would worry about us

growing a new generation of kids who are too tame, who have lived

too much in the world of simulation and information, live in a social

context that is categorised and reliable and constant. I would

worry much more about that sense of predigested sense of society, I

worry that they are too soft, they are not exploratory enough. That

they take the world too much as a given. It is almost inner city.

Something like that. I think there are concerns but perhaps these are

not the ones that I would prioritise.

Thank you very much. Bryn Terfel rose to fame after

coming second in Cardiff Singer of the World in 1989, known for his

grand opera roles, he has cornered the Wagner market. Next week sees

BrynFest, a festival of musical talent, at the Royal Festival Hall.

He sprang a surprise after performance with the Simon Bolivar

Orchestra. So how did this extraordinary

secret surprise come about? I had meetings here at the South Bank,

and they thought maybe I could an encore. How exciting for me. I just

told Mr Dudamel that, un ore pan ami.

That's your Spanish! Just to hear them play it for the first time, it

is incredible, that is enthusiasm for you. Youth in music is just

tremendous. What a bridge it is. I'm singing about the wonderful

bridge that goes into Valhalla. The Gods have just cleared the skies,

and built a bridge for us. I wonder if they think of that, kind of, as

a bridge for them. You have the wild Wagner, and then you have the

Covent Garden Wagner, you are doing both, how do you calibrate with

different directors? I'm young in the Wagnerian torrential waters, it

is maybe one-and-a-half productions of The Ring. I can't wait to sing a

full Ring Cycle on my home turf. La Pag, he's production, I was very

lucky to be part of the performance, controversial or not. The

youngsters I came to see it that I invited loved it. When did you hear

your first opera, do you know what you were? It is Othello, the

Zeffirelli production, when -- Otello, the Zeffirelli production

when it was out. I was given a seat by BBC Wales to review the evening.

I gave it such a glowing and fantastic review, that was the

ignition I needed. The candlelit, there was a eureka moment, I

thought this is what I want to do. You came runner up in the Cardiff

Singer of the World, that catapulted you into your future

stardom? I would say it kalt puted the eventual winner, he was the

clear favourite. I maybe took my time and sang smaller roles in

Opera Houses in Britain. You never really had to do chorus, you were

out front from the start? That is very true. Was that a handicap, at

first, or did it put added pressure on you? Maybe I cut my thief more

in misLenous concerts in Wales with male voice choirs and mixed choirs,

without knowing it I was given an education of how to perform on the

stage from a very early stage. lot of directors think opera

singers can't act, how much is the performance in the opera? I can't

act, I put myself in whatever the director tells me, I try my best to

achieve his insights and thoughts. I will do it with gusto and with

feeling. But, I need their help. I can maybe get around the single bit,

but acting is a completely. We did a great evening in the Royal Opera

House, of Shakespearian operas, and then some actors, acted the same

sections, they came on to the set, and set that scene. We need an

orchestra. I always come off the stage thinking I could have done

that better, I don't think it is a bad thing. What roles haven't you

done that you would love to do? never sang any of the Russian

repertoire. Maybe some swan songs towards the end of my operatic

career. Maybe an opera written by son time, he needs to write

something after Sweeney Todd. is an eclectic mix in the BrynFest?

Four eclectic nights, the Super Furry Animals there, the opera

night. Three wonderful singers there, the royal national Welsh

opera and cor chus will hop on stage and the pit. I can steal them

from pit and stage, it doesn't happen very often. There has to be

the staple diet of a male Welsh choir, with a band, myself singing

a couple of songs. It is a little bit like the festival I had in

North Wales on tour. # I can see the quiet churchyard

down below You are very proud of your Welsh

heritage, aren't you? I am incredibly proud. I don't think I

should be afraid of having an ambassadoral shoulder that carries

something that Wales can give, maybe that's a little bit in this

festival, here in this corner of London. I have even started a

foundation now for young singers. The talent that comes from this

small country is magnificent. And going back to my foundation, I

would like to even have the tip of Kiri Te Kanawa's foundation in New

Zealand. Maybe will I become a politician, will I run an Opera

House towards the end of my career? I don't know. Maybe I should start

opening books and reading about it Fantastic, weren't they brilliant.

I love him, I really love him. We admire, oh my God. He can move to

characters, and we will have a lot of fun, let's go one more time.

Bryn Terfel with Kirsty there. That's all from Newsnight tonight,

we leave you with a bit of Olympics, the official Olympic song was

unveiled and the bridge was raised, the song is Survival:

# Life's race # I'm gonna win