29/06/2012 BBC News at One

The Governor of the Bank of England calls for a real change in the

culture of British banking. He criticises the banks for excessive

levels of compensation, shoddy treatment of customers and

deceitful manipulation. What I hope is that everyone, everyone, now

understands that something went very wrong with the UK banking

industry and we need to put it right.

The Chief Executive of RBS says he won't take his bonus after

customers were let down by the bank's computer systems.

Eurozone leaders agree a deal to get to grips with the debt crisis.

Delivering a profit for the first time in four years - Royal Mail's

UK postal service is back in the black.

After the storms, thousands of homes remain without power as the

clear-up begins. In America, it is flames they are

fighting as Colorado's wildfires are declared a major disaster.

There's a big rise in the number of people sleeping rough - over 5,000

on our streets last year. And wildcat protests cause

disruption to dozens of bus routes Good afternoon. Welcome to the BBC

News at One. The Governor of the Bank of England has called for a

real change in the culture of British banking. He says the recent

behaviour of banks has ranged from the shoddy treatment of customers

to deceitful manipulation of a key interest rate. He said some hard-

working, honest people in banking had been let down by their leaders.

His comments come on the day another banking boss said it

wouldn't be appropriate for him to take a bonus following the recent

problems with computer systems. Every day it seems to get worse.

Another scandal and a new condemnation of Barclays and its

Chief Executive. Last night, he said he wouldn't give in to

pressure to resign after the revelation this week that Barclays

had tried to rig a key interest rate in the financial markets to

make money. At a press conference today, the Governor of the Bank of

England didn't call for scalps but said honest bankers were being let

down. Everyone now understands that something went very wrong with the

UK banking industry and we need to put it right. That goes to both the

question of culture in the banking industry and to the structure of

the banking industry, from excessive levels of compensation,

to shoddy treatment of customers, to a deceitful manipulation of one

of the most important interest rates. The latest shoddy treatment

is a new mis-selling scandal. This woman says her family's butchers

business was one of the victims. The bank, Barclays, again. It is

awful. It is killing us to the point that it is unbearable. I feel

like I have lost my dignity. We have had to beg and borrow to keep

up with the payments. It is a rope around my neck. I feel I'm going to

get strangled. Serious failings among thousands of these sales

along with loans from Barclays, HSBC, Lloyds and RBS means this

compensation bill will top �1 billion. Banks didn't warn about

the risks or how big the exit charges would be. What we know is

that there were around 20,000 products sold and we know that

these four banks sold 95% of it. What we now need to work out is on

each individual case is the extent of mis-selling. The compensation

won't be automatic. Each bank will appoint an independent reviewer who

will decide who gets a payout and how much. It is another major

embarrassment for the banks. They seem to have got themselves stuck

in a disaster zone of their own making. The Chief Executive of RBS

has said he won't pick up his bonus this year after RBS and NatWest

customers weren't able to use their accounts for several days. The TUC

has joined calls for a public inquiry into banking. Waheeda

Bashir says all she wants are banks she can trust.

The Shadow Chancellor has called for an independent inquiry into

banking. Norman Smith is in Westminster. How much pressure is

the Government now under to do something about all this? Well, the

Government are promising to legislate to close some of the

loopholes exploited by unscrupulous bankers. They are saying those at

the top must be held accountable and the Serious Fraud Office could

still prosecute rogue traders. My sense is that still doesn't go far

enough to assuage mounting public and political anger where there is

a growing demand for a Leveson- style inquiry into the conduct and

practices of British banks, a move supported by the Shadow Chancellor,

supported by the TUC, supported by senior Liberal Democrats. There is

even a petition up on the Downing Street website calling for an

independent, judge-led, under oath, inquiry. At the moment, the

Government is resisting such a move. My sense is a bit like with the

MPs' expenses' scandal, a bit like with the whole media and Milly

Dowler hacking saga, there is a desire in the public for that sort

of cathartic moment. There is a desire for a day of reckoning with

the banks. Eurozone leaders have approved new

measures to try to end the crisis in the eurozone following overnight

talks in Brussels. They have agreed to send money to struggling banks

without it adding to the debts of individual governments. Herman Van

Rompuy described the measures as a breakthrough and stock markets rose

sharply on the news. Chris Morris is in Brussels for us now.

Hello. It was 4.30am when eurozone leaders finished a marathon meeting

which be tpwan yesterday. They always seem to do it the hard --

which began yesterday. They always seem to do it the hard way. The

economic fundamentals in the eurozone haven't changed. They seem

to have taken some of the steps towards closer economic integration,

the first steps, which are increasingly essential.

Arriving early after a late-night, eurozone leaders talked almost

until dawn to reach an agreement. Closer integration in return for

taking steps to help ease the pressure on countries like Italy

and Spain. For non-members of the eurozone, there was a little more

sleep and a sense that progress had been made. I think the countries of

the eurozone did take some important steps forward. For a long

time we have been saying more action needs to be taken for short-

term financial stability, more to recapitalise banks, to use

firewalls, to drive down interest rates to create greater stability.

So what was agreed? A single supervisory body will be set up for

eurozone banks, a first step towards banking union. Once that's

done, struggling banks will have access to eurozone bail-out funds

without increasing government debt. Those funds will be used to buy

bonds of countries under pressure from the markets with less strict

conditions attached. The deal was done after Spain and Italy refused

to sign off on anything, including measures to boost growth, unless

Germany agreed to help them reduce their high borrowing costs. So has

Angela Merkel caved in to Spain and Italy? She has certainly given them

something of what they want. She has stuck with her basic principle

and that is there should be more economic supervision before she

agrees to loosen the purse strings. And Europe's most powerful

politician seemed pretty relaxed this morning.

TRANSLATION: We are sticking firmly to our clear plan, country also be

assisted as long as they fulfil certain conditions. We continue to

have clearly defined rules which include checks and monitoring --

countries will. A significant move towards a new eurozone. Markets

have reacted well. There will be challenges ahead. If the European

Central Bank does become the supervisor for eurozone banks, this

will result in a two-speed single market. This will mean the City

will no longer be seen as an entry point for the financial market of

the eurozone. British officials say they are not worried. This is all a

consequence of a single currency, they argue, and "We are not in it".

So alongside the short-term fixes which are needed, there are all

sorts of long-term debates beginning, about sovereignty, about

how much power countries in the eurozone will give up to Central

European institutions. These are tough issues. They will change the

relationship between the eurozone and the European Union and the

nation states which take part in it. Once again, the Prime Minister has

been emphasising that we wish them well, but we don't want to be part

of that plan. Thank you. Stephanie Flanders joins me now.

Summit after summit, have they finally come up with something that

will get to grips with the eurozone debt crisis? There had been a

careful effort by Chancellor Merkel to lower expectations so that

people like us wouldn't be asking them to solve all the problems

hanging over the eurozone. They have exceeded those low

expectations by making a bit more progress than we expected in some

important areas for the financial markets. The principle that you

could have money injected into troubled banks in Spain without

that money adding to the debt of the government in Spain, that is

important. That was something that had worried people in the past

about the deal that was announced a few weeks ago. But, as we know,

that's only going to happen when there is a single European

supervisor for all eurozone banks. It is not clear to anyone when that

is going to happen. That is quite a big detail that needs to be fleshed

out. Another point that people like was the fact that the rescue funds

are going to be perhaps in a better position to help say Italy, which

is having to pay a lot of money to borrow money, help push down that

cost of borrowing by buying Italian debt in the markets. Again, we

don't know how exactly - in theory they have been able to do that for

a long time - how this is going to be any better. Angela Merkel

looking very relaxed. How much ground has the German Chancellor

had to give on this? She has had to give some ground on this idea of

injecting the money into the banks. She's done so in a way that is very

much a part of her principle which is that you have more control over

banks, more control over governments before you think about

giving them more money. It is very important to note one of the things

we have talked about a lot, will they have more collective

guarantees of government debt? That is not mentioned at all in this

statement. It was quite clear from all Chancellor Merkel's comments

this week that she wasn't going to budge an inch on that.

Two members of the Basque separatist group ETA have been

arrested in West London. 55-year- old Anton Troyteenio and 39-year-

old Ignasio Lereen were wanted in connection with alleged terrorism

offences committed in Spain. They are both believed to be senior

figures within the movement. The Prince of Wales received almost

�2.2 million in funding from the taxpayer during the last financial

year, an increase of 11%. Accounts from Clarence House show that the

cost of travel for the Prince and the Duchess of Cornwall to attend

official engagements rose by more than 20%. The Prince's private

funding from his estate also increased by more than �18 million.

Thousands of people are still without power after violent storms

swept across large parts of the UK yesterday. The East Coast Main Line

between Newcastle and Berwick-upon- Tweed has re-opened after being

closed by landslides triggered by the downpours. The clear-up is

beginning in thousands of homes which were flooded. Danny Savage is

in Newcastle. What a difference less than a day

can make. It looks like a normal suburban street. The people in

their high-visibility jackets give away that something quite serious

happened here yesterday. 50 homes in this street were washed-away.

The sort of weather conditions that people living here say they have

never seen in their lives before. This street in North Tyneside

turned into a torrent last night. The mighty river at number 56!

After a deluge overwhelmed the local neighbourhood. Here, you

needed boats to get around. Although some made the most of the

conditions. This morning came the clean-up. This lady has spent

�30,000 improving her mother's home. Now she will have to do it all

again. I have lived here since I was seven - 40-odd years ago - and

it has never, ever flooded. It's never been subject to flood.

Nothing like this has ever, ever happened. I don't really believe my

eyes. Dozens of schools in North East England are closed today as

classrooms ended up under water. This was one school in Whitley Bay.

There was travel chaos for thousands including rail passengers

trying to get to and from Scotland on the East and West Coast Main

Lines. Unbelievable. 15 and a quarter hours to travel from London

on a train. Fire, rain, landslides. I have never known anything like it.

All the problems were caused by short-lived but violent storms.

Lightning was widespread. Weather experts say yesterday's conditions

were some of the most severe imaginable in the UK. There was

even a tornado seen here sweeping across fields in Lincolnshire.

Today, though, is about picking up the pieces, ruined by the flash-

floods and working out if the People here have seen understanding

about what happened and acknowledged that these were freak

weather conditions and nobody is necessary to blame. The water just

came and went very quickly. But the clear-up operation will continue

for a few days yet. Our Scotland correspondent is at

Waverley station in Edinburgh. What is the situation there? As things

are slowly starting to get back to normal, but there has been a very

difficult 20 or so hours for people trying to travel on the main East

and West Railway routes in and out of Scotland. There has been

cancellation, disruption and delays. We heard about that almost biblical

15 hour journey up the East Coast main line, when people on one train

were trapped by floods, and then by landslides. They were forced to go

back part of the way, then they travelled north and had a fire on

their train. A pretty miserable journey. People who turned up here

this morning to get trains on the east coast routes from Edinburgh to

King's Cross turned up to discover that when the weather had closed

the route between Berwick and Newcastle, where trains usually run

every half-hour. Many had their plans disrupted. There were

alternative ways by going to Glasgow, but we are told hundreds

of engineers have been working on the routes overnight and into the

morning. In the last hour, those landslides on the east coast have

been cleared and the train services have now resumed, albeit on an

hourly basis. It is not just travel that has been disrupted. Another

victim of the weather is Coventry's Godiva Festival, the largest free

festival in the UK, which has been cancelled. Our correspondent is

there. If yes, this is the latest in a summer of soggy

disappointments. The decision has been made to cancel the festival.

Here, you can see why. There is mud everywhere. This as the backstage

area, and late last night, the organisers were hoping they could

still get away with holding the festival, and it is fairly dry now,

but there is still too much mud. People could not get on and off the

site safely. It means thousands who were going to be here will now be

disappointed. This comes as the Met Office has come up with the latest

figures for the rainfall in June, confirming what we already guessed

- it has been extremely wet, the second wettest June on record. We

have had 130.1 mm of rain across the UK, just six millimetres short

of the all-time record. Records go back to 1910. Those numbers do not

include the reign of the last 24 hours. When we get to the end of

the month, it could be that this will be the wettest June we have

ever had. Our top story this lunchtime: the Governor of the Bank

of England calls for a change of culture in British banking,

accusing banks of treating customers shoddily.

Coming up, the man who came from nowhere to Val Rafael Nadal.

Later on BBC London: we hear from an east London resident who has had

to leave his home after voicing concerns about surface-to-air

missiles. And diamonds for a diamond queen -

10,000 gems go on display to mark The world's biggest food company,

Nestle, has been accused of failing to carry out basic checks on its

cocoa supply chain where child labour and abuse are widespread.

The Fair Labour Association, who were hired by Nestle, tracked the

journey of cocoa from the poorest and most remote farms to the

exporters that sold directly to Nestle. The company says it will

carry out the association's recommendations.

Three years, this has been a sad, but familiar scene in the Ivory

Coast. Children had at pods of cocoa for the chocolate companies.

In an industry worth more than �60 billion a year. Last November, they

told me they barely got paid, and untreated machete injuries are

common. Many children are separated from their families and Work far

from home. TRANSLATION: My father sent me here

to work. I have not seen my family for three years. The big household

name chocolate companies by Coco that comes from places like this.

Last year, Nestle commissioned an independent auditor to find out the

exact details. The investigators discovered that there had been

multiple serious violations of Nestle's own company code on child

labour, safety and other issues. Ten years ago, Nestle and other

chocolate companies signed a protocol promising to act against

child labour. Activists are now impatient at the lack of results.

If this was happening here, we would do something now, today. This

is an intolerable situation to continue for a month longer, a

night longer for this lad. Nestle says it will now monitor at all

stages of its supply chain, such as in small warehouses like this.

During the cocoa harvest, we had no difficulty finding children at work.

Nestle says this goes against everything the company stands for,

and tackling child labour has now become a top priority.

The parents of a two-year-old boy who died in an explosion on Tuesday

have been paid tribute to their son. Jamie Heaton's parents said he was

unique and they would miss everything about him. Michelle and

Ken Heaton have been visiting the street where they lived, and where

messages and flowers are being left for their son.

Royal Mail's UK postal business has returned a profit for the first

time in four years. It helped the group's overall profits rise to

�211 million, up from �39 million last year. Our industry

correspondent joins me now. How have they done it? Royal Mail

actually makes most of its profits outside the UK. But traditionally,

those profits are pulled down by losses here at home. But for the

first time in four years, it has made a profit with its core UK

business by driving through a modernisation plan. A lot of

automation is going into it, sorting mail. This is having an

impact on staff. It lost 4000 people over the past year. So that

is cutting its overheads. It has also been allowed to put up the

prices for the service it provides. Stamp prices increased last year.

Royal Mail says overall, its profit margin is still low compared to

others, but it said it is on its way to restoring the group's

financial health, which is good news for the Government, because it

is government policy to see Royal Mail either privatised or for

somebody to come in and take a stake in the business perhaps as

early as next year. In Wimbledon, tennis fans have been

getting over one of the biggest upsets in the tournament's recent

history after the number two men's seed Rafael Nadal was defeated by

Lukas Rosol, who was playing at Wimbledon for the first time.

Nadal's early exit has of course raised hopes that this could be

Andy Murray's year. Kathryn Dowse is at Wimbledon. Rafa himself said

last night that this was only a tennis match, but it is hard to

downplay what an upset Lukas Rosol caused. He completely outplayed

Nadal. It is disappointing for the fans that they will not see the

wonder that Rafa can be on court any more, but it has opened up hope

that Andy Murray could have his year.

There is a change in the air at Wimbledon today. It is cooler, and

it feels unsettled. Perhaps that is because one of the biggest stars in

tennis went out last night. Under the bright lights of Centre Court,

Nadal looked dazzled. The two-time champion had no answer to Lukas

Rosol's blistering groundstrokes. Until yesterday, who had heard of

Lukas Rosol? He was playing his first ever Wimbledon, having only

won 18 matches on tour in his career. He had nothing to lose, and

no one is more surprised than him. He is a superstar, and I am very

sorry for him. I played unbelievable today. So... Yeah. I

hope I can play one more match like this. If the seedings go to plan,

Andy Murray is now expected to go through to the final. Nadal was

supposed to be his biggest obstacle. It should highlight the fact that

there are a lot of dangerous players. Rafa is one of the

greatest champions. Raphael has gone. Is his conqueror now the

biggest threat in the draw? Every so often, it takes a big upset to

show the players but even against the superstars, they, too, can dare

to dream. Will dreams come true for Britain's

Heather Watson? She has her own Goliath to slay on Centre Court

this afternoon. She faces the No. 3 seed here and the five-time grand-

slam quarter-finalist. But if Lukas Rosol can do it, surely Heather can,

too. China's latest manned spaceflight

has returned successfully and safely to Earth. The three crew

members landed in Inner Mongolia earlier this morning. The

astronauts, including China's first woman in space, had docked with an

orbiting laboratory during a 13 day mission. The country's premier

hailed it as a "complete success". President Obama has declared the

state of Colorado a disaster area following wildfires which have

forced thousands from their homes. Thousands of firefighters are

attacking the blazes, which are the worst in the state's history. It is

thought it will be weeks before the fires are brought under control.

From a distance, it looks like the molten lava of a volcano,

destroying everything in its path. The wall the Kenyan wildfire is

living up to its name, just as destructive, refusing to be tamed.

There are 20,000 homes in its path. This is unbelievable. It is all the

way down the hill, dude, look at this. So from above, the

destruction becomes brutally clear. Rows of houses reduced to

smouldering ashes. Nearly 350 homes had been destroyed, with only 15%

of the fires under control, strong winds hindering firefighters'

efforts. I was standing by my apartment, and you could see the

fire coming down the hill. I could not grasp that it was real. As soon

as the wind picked up, it was horrible. Everyone was coughing.

Now the fires have clinched their The weather is giving some respite.

Rescue teams have a chance to recover and prepare a case the

There has been some extraordinary extreme weather. No wildfires here,

but some American justice for sure. Welcome to tornado alley in

Lincolnshire. Thank you to Sarah for sending in this video. It is

quite dramatic. You can see how that twister ravaged parts of

Lincolnshire yesterday. It takes rare ingredients to produce a storm

like this. Let me show you what happened yesterday. Ingredient

number one - warm, moist air coming off the near Continent. We almost

hit 30 degrees in London. That humidity stored near the surface

like a loaded gun. The trigger came from cold air above. That

combination of warm and cold air made storms explode into life. The

worst of the storms were over the Midlands yesterday morning. There

was a dramatic thunderstorm, which sadly brought that fatality across

Shropshire. The storm brought the flooding. There were other stone

clusters across north-east England, giving further dramatic flooding.

That has pushed out of the way. The instability and the warmth have

gone. We have fresher south- easterly winds now. Much cooler.

Still some slow-moving thunderstorms, but not the dramatic

beasts we saw yesterday. Northern Ireland catches a shower or two,

but drier here. Some sunshine in between. For Wimbledon, we might

see a few more interruptions, Brum but any showers should not last

long. Cool everywhere. It stays cool tonight as well. But then more

clusters of rain develop across southern and eastern parts of

England, perhaps into the Midlands as far north as Yorkshire by the

end of the night. It could be a damp start across central and

eastern areas. That rain should gradually fade away and move into

the North Sea. But then the showers get going again, moving west on

that stiff breeze. They will probably take all afternoon before

arriving. It will be a cooler day. As we go into the new month, don't

expect the weather to change. It stays very unsettled. But briefly

on Sunday, the weather is settling down. Still showers across northern

areas, but further south, it will be drier and will feel pleasant. On

balance, Saturday is the better of the two days, with sunshine. By

Sunday, things will turn showery. A reminder of our top story: the

Governor of the Bank of England calls for a change in culture in

I hope everyone now understands that something went very wrong with

the UK banking industry, and we need to put it right.