:00:00. > :00:16.Welcome to Whitehall in central London. A century after 1914, is
:00:17. > :00:20.another world War a possibility? Is the world economy really
:00:21. > :00:41.recovering? And has Britain cut its defences too far and too deeply?
:00:42. > :00:50.The Cenotaph in Whitehall, one of the finest designs in the modern
:00:51. > :00:54.world, stark and elegant. Everything in all of our lives is still
:00:55. > :00:58.affected one way or another by the First World War, that dreadful
:00:59. > :01:03.process that dragged the mostly peaceful continent of Europe into a
:01:04. > :01:10.conflict which, on and off, went on for 31 years, from 1914 to 1945.
:01:11. > :01:18.Without it, there would presumably have been no nazism, no Stalinism,
:01:19. > :01:24.no Cold War, and yet modern, total war always brings sociologically and
:01:25. > :01:29.technological advances. Women's writes, increasingly powerful
:01:30. > :01:33.aircrafts, computers, drones. But we have got past that stage now,
:01:34. > :01:43.haven't we? World War? Haven't we? I wish I could be sure of that.
:01:44. > :02:02.From 1914 to 1918, around 10 million soldiers on all sides died.
:02:03. > :02:12.Afterwards, people thought it would make war on impossible. In fact,
:02:13. > :02:17.there have been 300 wars since then. This is trying pot, just one of
:02:18. > :02:26.1,000 cemeteries on the Western front.
:02:27. > :02:34.The First World War was fought at exactly the wrong moment in
:02:35. > :02:37.history. There were mass systems of transport and control, but no
:02:38. > :02:45.radios, no heavy aircraft, no effective means of countering
:02:46. > :02:55.artillery and machine gun. Peace and optimism of the 19th century ended
:02:56. > :03:03.here in misery and squalor. There is peace and optimism now. Could this
:03:04. > :03:09.end like that did? I went to Oxford to talk it over with Britain's for
:03:10. > :03:17.most war historian, of all souls College. Warfare of the 1914 kind
:03:18. > :03:24.won't happen again, just because most states have moved away from
:03:25. > :03:27.mass armies. And most states are able to use technologies in much
:03:28. > :03:34.more precise ways than they were able to use them in 1914-18. One
:03:35. > :03:42.argument would be that a combination of unmanned vehicles of one sort or
:03:43. > :03:49.another, robots, and others of cyber, create alternative ways of
:03:50. > :03:58.competition, some of them using force less obviously and involving
:03:59. > :04:05.killing less obviously. Surely, though, war in Europe is impossible
:04:06. > :04:09.now? After all, in 2012, the European Union won the Nobel Peace
:04:10. > :04:18.Prize for ending war on the continent. Yet the First World War
:04:19. > :04:22.cemeteries, whether big or small, like this one on the battlefield of
:04:23. > :04:25.the Somme, filled with the victims of a conflict which started because
:04:26. > :04:40.big countries were manipulated by smaller ones.
:04:41. > :04:48.Think what is going on right now in Ukraine. A small, deeply divided
:04:49. > :04:56.country is causing real tension between Europe and Russia. World War
:04:57. > :05:02.doesn't happen because country cases we going to declare a World War.
:05:03. > :05:07.That isn't how it happens. So how does it happen? The power of small
:05:08. > :05:13.states to manipulate big states. Serbia is very important to what
:05:14. > :05:16.happens in 1914. However you see its degree of responsibility, it is
:05:17. > :05:23.engaging its own war when it begins the war in its own neck of the
:05:24. > :05:28.woods. It is not saying, we need a World War. One way of seeing it is a
:05:29. > :05:29.sequence of separate regional wars which aggravate to become something
:05:30. > :05:40.bigger. The grass has long since covered
:05:41. > :05:48.over the naked rawness of the few remaining trenches on the Western
:05:49. > :05:53.front. But if war in Europe isn't so likely, where else could it break
:05:54. > :06:01.out? We used to think of the Middle East as the region which might cause
:06:02. > :06:04.a World War. But what about the Far East nowadays, where a rising
:06:05. > :06:11.military and industrial power, China, is facing up to an existing
:06:12. > :06:16.power, Japan, over a tiny group of uninhabited islands in the East
:06:17. > :06:26.China Sea? The Americans, of course, are the allies of the
:06:27. > :06:30.Japanese in Asia. It is gradually replacing the Middle East. As the
:06:31. > :06:37.United States withdraws with the pivot of Asia, Israel's capacity to
:06:38. > :06:42.tweak the American tail is reduced and as the United States becomes
:06:43. > :06:45.less dependent on Middle Eastern oil supplies, because of fracking
:06:46. > :06:50.becomes more self-sufficient, more than self-sufficient in energy,
:06:51. > :06:51.where is the United States most concerned about? The answer is
:06:52. > :07:06.clearly the Pacific. Before 1914, many people thought war
:07:07. > :07:09.couldn't happen because the economies of the main European
:07:10. > :07:19.countries were so closely intertwined. A man called Norman
:07:20. > :07:27.Angell wrote a bestseller, The Great Illusion, which argued that the war
:07:28. > :07:33.was so crazy, nobody would start one. What he didn't realise was that
:07:34. > :07:40.wars are usually sparked off by the unexpected. Nowadays, we have
:07:41. > :07:53.learned that major wars can come completely out of the blue. On what
:07:54. > :07:59.seemed like a normal day, the 11th of September 2001, a dreadful series
:08:00. > :08:05.of attacks sparked off a war which has lasted right up until now. You
:08:06. > :08:08.know, we should be ready for the possibility of the unthinkable. Most
:08:09. > :08:12.of the things which have changed the world in which we live today have
:08:13. > :08:19.been the consequence of dramatic and unexpected change was the very rapid
:08:20. > :08:22.end to the Cold War, which fortunately was entirely benign. The
:08:23. > :08:25.911 attacks, which obviously were not the nine. These are the way
:08:26. > :08:30.point of how we understand our recent history --not benign. It is
:08:31. > :08:34.humanity collectively going to face war in the future? Absolutely. There
:08:35. > :08:43.are plenty of sources of conflicts in the world. Should we be
:08:44. > :08:47.complacent about it? Absolutely not. These are the names of thousands of
:08:48. > :08:55.missing men, each of them blown to pieces or simply disappeared in the
:08:56. > :08:58.mud. My great uncle was a captain in the East Surreys. He actually
:08:59. > :09:04.survived the Somme but was dreadfully injured. He lingered on
:09:05. > :09:13.for 50 years and died a homeless beggar about revenge. --on a railway
:09:14. > :09:21.bench. Everywhere here, you are in the presence of small-scale but
:09:22. > :09:26.devastating tragedies. I have spent the last 50 years reporting on
:09:27. > :09:32.conflict but nothing, thank God, remotely on this scale. And although
:09:33. > :09:40.it may not seem like it, far fewer people die in war nowadays. In the
:09:41. > :09:45.21st century, it has been an average of 55,000 a year. Dreadful, yet the
:09:46. > :09:50.figure was twice that in the 1990s and three times as many in the
:09:51. > :09:55.1980s. Here on the Western Front, it was 150 times as many. Not
:09:56. > :10:08.everything you see automatically gets worse.
:10:09. > :10:14.Downing Street, the home of political power in Britain since the
:10:15. > :10:20.18th century. The people who live and work here nowadays, and in the
:10:21. > :10:24.Chancellor's office next door, are naturally extremely keen that
:10:25. > :10:27.Britain should regard itself as finally climbing out of the
:10:28. > :10:32.financial crisis that has lingered on for five long years. There is
:10:33. > :10:37.even talk here of rate rises nowadays. But remember what happened
:10:38. > :10:42.in Japan 20 years ago. Property values ballooned and ballooned and
:10:43. > :10:46.then burst and ever since, people there have been so nervous that the
:10:47. > :10:52.Japanese economy has never got out of stagnation. Could that be our
:10:53. > :10:57.future too? Or is the world genuinely starting to lift itself
:10:58. > :10:58.out of recession? Another of our contributing editors has been
:10:59. > :11:11.travelling the world to find out. After five years of slow growth, the
:11:12. > :11:16.outlook is starting to look brighter for the global economy. Nowhere more
:11:17. > :11:22.so than Britain. This year, the economy will finally recover to the
:11:23. > :11:26.size it was before the crash and, believe it or not, the growth rate
:11:27. > :11:34.is even outpacing that of other rich countries. Economists are saying it
:11:35. > :11:36.for policymakers are forecasting it. But when will it feel like a
:11:37. > :11:53.recovery to us? Memories of the crash are still
:11:54. > :11:55.fresh. Unemployment remains high. Price rises have squeezed our
:11:56. > :12:05.incomes and our pay isn't keeping up. It is a similar picture in
:12:06. > :12:13.America, where the housing crash set of the global financial crisis.
:12:14. > :12:21.Small towns like this one in Maryland have been in economic
:12:22. > :12:27.degrees. I met with the Mayor and asked him how the town was faring.
:12:28. > :12:30.Speaking at the was a joke we used to tell around here that if we had a
:12:31. > :12:36.depression, it would take is ten years to know it. Because we have
:12:37. > :12:40.been depressed for so long. It is small towns like this one that the
:12:41. > :12:48.US central bank, the Federal reserve, must help. Its former head
:12:49. > :12:57.hands over a tough task to the new chair. In his era, boom turned to
:12:58. > :13:00.bust and to support the recovery, he flooded the economy with cheap cash
:13:01. > :13:06.for five years and kept rates low. Now that the economy is getting back
:13:07. > :13:11.on track, the new era will be different and it has been made clear
:13:12. > :13:14.what the focus will be. She and other central bankers, like those at
:13:15. > :13:19.the Bank of England, are pledging to keep rates low. But is it working or
:13:20. > :13:29.just leading to more debt fuelled spending?
:13:30. > :13:37.Consuming based on borrowing is what got us into a mess before. Now, in
:13:38. > :13:41.the UK, we are borrowing even more. In fact, household debt is at a
:13:42. > :13:48.record high, even higher than before the crash. It is because five years
:13:49. > :13:56.ago, interest rates were slashed to a smidgen above 0% to support the
:13:57. > :14:01.recovery. The problem is, previously when rates were low, cheap credit
:14:02. > :14:09.also helped fuel a housing boom that eventually went bust. With rates now
:14:10. > :14:15.at the lowest that they have ever been, is it creating another housing
:14:16. > :14:24.bubble? A house like that at 3,000,000... I
:14:25. > :14:29.met the editor of Money Week, who tells me her readers are most
:14:30. > :14:33.concerned about the housing market. It doesn't sound like the recovery
:14:34. > :14:37.is driven by sustainable drivers? At the moment, it would be hard to
:14:38. > :14:40.argue that this is a long-term sustainable recovery. Three years of
:14:41. > :14:44.growth has come very clearly from financial services and the rest you
:14:45. > :14:48.can pin on housing. This is taking us back to the mistakes we made
:14:49. > :14:52.before, relying on two sectors to drive everything. We need to see
:14:53. > :14:55.more manufacturing, more than a way of exports and a broader spread of
:14:56. > :14:59.sectors running things and also things that aren't purely driven by
:15:00. > :15:02.very low interest rates. You have to remember that the housing market is
:15:03. > :15:07.almost entirely driven by the price of money, which is interest rates,
:15:08. > :15:13.and one day, that has to rise. Is it the right kind of recovery? When
:15:14. > :15:19.rates go up, debt could become unsustainable. Well, relying on debt
:15:20. > :15:24.to grow could just result in another crisis. But what's the alternative?
:15:25. > :15:29.How well can a country grow without relying on bar owing?
:15:30. > :15:46.-- borrowing? Japan is a country that's been
:15:47. > :15:50.through it. It no longer grows via debt after its housing market
:15:51. > :16:02.crashed and it has been stagnant ever since. I went along to see the
:16:03. > :16:08.economist who wrote the book on Japan and asked Richard why growth
:16:09. > :16:17.hasn't returned? Japan doesn't seem like it came through it even though
:16:18. > :16:21.the bubble burst over 20 years ago? One the balance sheets are repaired,
:16:22. > :16:24.you realise that people are still not borrowing money. This is a very
:16:25. > :16:28.difficult problem to get hold of because it is a psychological
:16:29. > :16:31.problem, right? If it is a mechanical problem, you do this and
:16:32. > :16:35.then something will happen, but it is a psychological problem until you
:16:36. > :16:41.get over the trauma, you just have to keep on trying different measures
:16:42. > :16:46.until you get off the trauma. How did the US get over the trauma after
:16:47. > :16:56.the Great Depression? It took them a long time. It took 30 years until
:16:57. > :17:01.1959 for interest rates to return to the average 1920s. The Great
:17:02. > :17:07.Depression started in 1929 and it was 1959 when interest rates
:17:08. > :17:15.returned to 4% and it took that long.
:17:16. > :17:24.Dao Due to being traumatised by debt, Japan's growth has been slow.
:17:25. > :17:29.Because without relying on debt, what you spend depends on what you
:17:30. > :17:32.earn and that's not helped by a ageing population where there are
:17:33. > :17:37.more pensioners than young people in work. This is what the West worries
:17:38. > :17:43.about. Lower demand and slower growth. If Japan can reverse its
:17:44. > :17:48.stagnation then there is hope for the UK and the US who are facing
:17:49. > :17:52.tepid recoveries five years after their banking crisis. If Japan
:17:53. > :17:58.can't, then it is a glimpse of the future for other rich countries who
:17:59. > :18:09.have the same ageing population, but are just a few years behind Japan.
:18:10. > :18:14.The Government aims to squeeze more out of workers like these in Tokyo's
:18:15. > :18:19.fish market. If they are more productive then their bosses will
:18:20. > :18:30.pay them more and the recovery would be on a sounder footing.
:18:31. > :18:36.It is not just the developed economies, China's population is
:18:37. > :18:41.also ageing. So it is not an easy choice anywhere. Growing via debt
:18:42. > :18:47.maybe unsustainable, but the alternative could be slower growth
:18:48. > :18:52.than what we're used to. The global and British economy will recover
:18:53. > :18:57.this year, but it maybe sometime yet before it feels like it. But
:18:58. > :18:59.importantly, growth has returned and tomorrow looks more promising than
:19:00. > :19:23.today. Whitehall here is stacked with
:19:24. > :19:32.statues to Britain's military heroes. Montgomery here. But this
:19:33. > :19:40.may surprise you, the world's fourth largest military power, that's after
:19:41. > :19:46.the painful cuts in the 2010 Strategic Defence Review. Last month
:19:47. > :19:50.the former US Defence Secretary, Robert Gates warned that Britain's
:19:51. > :19:57.defence cuts limited its ability to be a reliable military ally. He
:19:58. > :20:03.singled out cutbacks to the Royal Navy and reminded us for the first
:20:04. > :20:07.time since the First World War Britain won't have a single aircraft
:20:08. > :20:15.carrier until the ones being in Scotland come into service. Caroline
:20:16. > :20:27.Wyatt wonders whether the defence cuts have really gone too far?
:20:28. > :20:34.For centuries, these small islands prided themselves on their might as
:20:35. > :20:37.Britain punched well above her weight in the world, sending
:20:38. > :20:43.warships and soldiers across the seas. The Royal Navy and Army helped
:20:44. > :20:47.create the British Empire and in 1982, the Falklands War showed
:20:48. > :20:52.Britain could still fight to win even thousands of miles from these
:20:53. > :20:57.shores. But in the past few years of
:20:58. > :21:01.economic austerity, the UK's defence spending dropped while that of
:21:02. > :21:09.others countries from China to Saudi Arabia has risen creating some say a
:21:10. > :21:14.perfect storm for defence so the question we are asking is have we
:21:15. > :21:16.cut too far in defence and should we re-think our ambitions on the global
:21:17. > :21:38.stage? At the Cenotaph in Cardiff, Simon
:21:39. > :21:42.Weston remembers his fallen comrades. He remembers the terrible
:21:43. > :21:46.burns he suffered. Today, he is appalled by the level of cuts to
:21:47. > :21:56.Army numbers. It is under half the size it was when he joined with
:21:57. > :22:00.thousands of soldiers made rebundant. -- rebundant. We will
:22:01. > :22:08.sell ourselves short. You look at all these people here and the
:22:09. > :22:14.talents and the skills, the medical corp, we lose all those talents and
:22:15. > :22:17.all those experiences and all the things that they can pass on to
:22:18. > :22:28.other people. They are gone. They're not coming back. Do you think that
:22:29. > :22:36.we, as a nation, have cut defence spending too far? Without a doubt.
:22:37. > :22:42.We've got far too few people and the MoD and the Government have to stop.
:22:43. > :22:48.Stop before it goes too far. Before there is no gaining the ground that
:22:49. > :22:53.they've lost. You cannot bring a war in under budget and you certainly
:22:54. > :22:59.cannot prepare for conflict without spending money properly. And we're
:23:00. > :23:03.in a situation where we are selling people short. Would you still join
:23:04. > :23:10.the Army today? Would you advice one of your children to join the Army?
:23:11. > :23:14.Not a chance. Despite the cuts, the Army still
:23:15. > :23:21.needs young men and women fight to fit -- fit to fight for the future.
:23:22. > :23:24.The current plan is to have more reservists even as the number of
:23:25. > :23:29.regulars come down, but take-up has been slower than hoped, but on the
:23:30. > :23:33.day I visit this recruiting centre in Cardiff. I'm preparing myself for
:23:34. > :23:40.the challenges that lie ahead. David Jones has come to sign up for the
:23:41. > :23:45.reserves. It is just the adventure really and the commitment, the
:23:46. > :23:56.professionalism, you see soldiers putting in every day. I think I can
:23:57. > :24:03.transfer that to my own career. The Army has gone back to training on
:24:04. > :24:11.Salisbury Plain. No one knows what threat could be around the corner.
:24:12. > :24:28.The UK aims to be able to fight most. By land, sea or air. Man power
:24:29. > :24:41.was hit hard in the last Defence Review. Their concerns are aired in
:24:42. > :24:46.the calm of the Royal United Services Institute, the military
:24:47. > :24:51.think-tank founded in 1831, now run by Professor Mike Clarke. If we lack
:24:52. > :24:55.anything, it is sustainability. It is staying power given that our
:24:56. > :25:01.ambitions are to be a bit like the United States at about one tenth the
:25:02. > :25:05.size. Have we cut too far in defence? I think in general, we've
:25:06. > :25:09.cut further than our ambitions would allow us so we have either got to
:25:10. > :25:13.scale back our ambitions or we have got to say it is important that we
:25:14. > :25:20.do those things and we have got to spend something more on defence more
:25:21. > :25:28.like something in the order of ?2 billion or ?3 billion after 2015
:25:29. > :25:35.than we're planning to. A number of armoured vehicles are
:25:36. > :25:46.slowly returning home from Afghanistan. Huskies and Mastiffs.
:25:47. > :25:50.The next battles will be closer to home too between the MoD and the
:25:51. > :25:57.Treasury. The forces say the last fence Review was Steph devastating,
:25:58. > :26:01.the next, it is hoped, will be more considered. I hope the signal that
:26:02. > :26:04.we're send is that the UK is committed to living within its
:26:05. > :26:10.means. Defence can't be exempt from that and I've also been clear that
:26:11. > :26:17.you can only build a strong and sustainable defence on a strong and
:26:18. > :26:22.sustainable economy. The two are indivisible. It is not your view
:26:23. > :26:26.that we have cut too far? I would like the defence budget to be
:26:27. > :26:29.bigger. I would like to have a bigger military, who wouldn't? But
:26:30. > :26:33.where we are at the moment is a position that we can sustain and the
:26:34. > :26:37.budget will allow us to do that just. It is not allowing us to put
:26:38. > :26:41.our feet up while we do it, we're having to pedal very hard to make
:26:42. > :26:42.the savings, to deliver the efficiencies that make it possible
:26:43. > :27:00.to have that capability. And this is where much of the UK's
:27:01. > :27:08.defence budget is going, creating its two biggest aircraft carriers
:27:09. > :27:14.ever. The Queen Elizabeth Class. The cost is just as breath taking. Now
:27:15. > :27:19.over ?6 billion, not counting the jet that will fly off them. It is
:27:20. > :27:25.not yet clear whether the UK will be able to afford to run two carriers
:27:26. > :27:31.or one and whether both will be built. That's another battle for the
:27:32. > :27:36.next Defence Review along whether to replace Trident, the nation's
:27:37. > :27:42.nuclear deterrent. The UK can console itself than in a few years
:27:43. > :27:45.time, it will have two world beating aircraft carriers with one due to
:27:46. > :27:49.sail the seas and project Britain's power abroad. If a Government's
:27:50. > :27:54.first duty to its people is defence of the Realm, perhaps it is time for
:27:55. > :28:03.a national debate about what sort of defence we want and crucially, how
:28:04. > :28:07.much we're willing to pay for it? Britannia doesn't rule as much of
:28:08. > :28:12.the waves as she once did, but these islands remain a serious military
:28:13. > :28:15.player. Beneath the surface, the UK's sailors, soldiers and air men
:28:16. > :28:20.are having to work hard after the last wave of cuts. The fear is they
:28:21. > :28:27.couldn't weather another similar storm without real harm. They are
:28:28. > :28:36.often unseen, they remain a guarantee, relied on to protect
:28:37. > :28:38.these shores and our way of life, something more fragile than we
:28:39. > :28:53.think. Everything seems so peaceful now
:28:54. > :28:58.here at. This area was blasted by the heaviest artillery barrage in
:28:59. > :29:04.history that people thought would never grow here again. But nature is
:29:05. > :29:07.so resilient, you never think now that anything had ever happened
:29:08. > :29:11.here. It is something of the same with human beings, in spite of all
:29:12. > :29:17.these people who died in the First World War and in the huge epidemic
:29:18. > :29:21.at the same time, a census soon after the First World War showed
:29:22. > :29:27.that the British population had actually gone up by some way. Not
:29:28. > :29:32.even the effects of war, it seems, are necessarily permanent. Well,
:29:33. > :29:36.that's it from the last of the current series of The Editors. Until
:29:37. > :29:48.we meet again, goodbye.