:00:28. > :00:32.cut. Now on BBC News it's time for A new investigation into
:00:32. > :00:38.allegations of fiddling with British banks and cutbacks to the
:00:38. > :00:48.Army. What about British rule in this century? How much should
:00:48. > :00:49.
:00:49. > :00:54.London look forward to the Olympic The resignation of Bob Diamond, the
:00:54. > :01:01.boss of Barclays Bank, has not ended this banking crisis but has
:01:01. > :01:05.allowed it to shoot up one year. The banking industry and the
:01:05. > :01:09.politicians, it's quite extraordinary degree to which
:01:09. > :01:13.people were critical of the banks before and they did not think it
:01:13. > :01:19.could get much worse. Now the journalists are doing better than
:01:19. > :01:25.the bankers. For the first time in 60 years, the most unpopular
:01:25. > :01:32.politicians and bankers are worse off. Want the problems is, this is
:01:32. > :01:40.an accumulative thing. It's as if we had won the bad thing about the
:01:40. > :01:45.dangers about one year ago. Then we talk about Lehman Brothers. It
:01:45. > :01:55.seems they might even be shock fatigue. It's really dangerous. The
:01:55. > :02:02.public thinks, so what? They are all bankers, what do you expect? It
:02:02. > :02:08.out range from the population. They expect everybody behaves badly.
:02:08. > :02:17.It's about trust and I feel that a lot. You have asked the right
:02:17. > :02:23.question. How is this all the politicians. It's the way in which
:02:23. > :02:28.we see outsourcing of parliamentary and democratic function. Because of
:02:28. > :02:33.this absence of trust in all these institutions, nobody knows how to
:02:33. > :02:36.deal with this crisis and it's very dangerous. It's not enough to just
:02:36. > :02:43.have Parliament looking into what has gone wrong with the banks
:02:43. > :02:48.because nobody trusts the politicians. It's also the
:02:48. > :02:55.parliamentary inquiry about the media. The Leveson Inquiry. There
:02:55. > :03:00.is now another debate continuing about another inquiry about the
:03:00. > :03:07.banking system. Does the proliferation of public inquiries.
:03:07. > :03:11.There's also discussions about decisions with Europe. It's all
:03:11. > :03:15.about outsourcing of function that we would normally expect
:03:15. > :03:21.politicians to carry out. Because we don't trust the politicians we
:03:21. > :03:25.don't trust them and people don't trust us so they don't trust
:03:25. > :03:29.accountability and we don't trust the bankers or the police. It's a
:03:29. > :03:35.very dangerous situation. This is the point at which an economic
:03:35. > :03:42.crisis becomes a political crisis. It's a problem for society and
:03:42. > :03:49.establishment. Well-educated people came for dinner. Not one of them,
:03:49. > :03:53.in the UK, they don't believe that if we have an elected House of
:03:53. > :03:57.Lords, those elections would be a good thing. They don't believe in
:03:57. > :04:06.democracy. Not one of them boats any more. I found that absolutely
:04:06. > :04:16.shocking. But they do vote. What do you make of this? There are three
:04:16. > :04:17.
:04:17. > :04:25.points. The first one, related to the banks. Barclays banks. The
:04:25. > :04:35.interwoven relationship between the administration and the corporations.
:04:35. > :04:35.
:04:35. > :04:42.You can hire somebody in London were using the Barclays Bank branch.
:04:42. > :04:49.One politician stood up to defend Bob Diamond. It raises questions
:04:49. > :04:56.about how the Government can be moved by money. The other point is
:04:56. > :05:06.extremely important also. But at the Bob Diamond is an American. An
:05:06. > :05:06.
:05:06. > :05:14.aggressive American banker. He has experience Credit-Suisse and Morgan
:05:14. > :05:24.Stanley. He has applied does operations here. It's bad practice
:05:24. > :05:28.
:05:28. > :05:36.here. It's a funny one. This is related to the economic size terms.
:05:36. > :05:41.Diamonds are not for ever. He was aggressive in America. And I made
:05:41. > :05:48.one. About aggressive Americans. It's interesting I think and
:05:48. > :05:58.misunderstanding to see Bob Diamond with his American culture imported
:05:58. > :05:59.
:05:59. > :06:07.into London. The City London, look at scandals here. A huge gallery of
:06:07. > :06:14.rogue traders. Also the original American investigation. It seems to
:06:14. > :06:20.be American regulators. Or so we know about Barclays because they
:06:20. > :06:28.talked about what had happened. They opened up. There will be more.
:06:28. > :06:35.There is a panel of 18 banks. This scandal is likely to extend way
:06:35. > :06:45.across national borders. The point about the city of London. As been a
:06:45. > :06:51.gentleman's club infected by Americans. This is absolutely wrong.
:06:51. > :06:56.Its effectiveness of self regulation. We don't blame the
:06:56. > :07:06.Americans. We usually blamed the Germans. I don't know whether any
:07:06. > :07:10.
:07:10. > :07:16.German banks are involved. Normally I think there's little to be gained
:07:16. > :07:26.from the downward spiral between America and England. This is a
:07:26. > :07:30.
:07:30. > :07:36.corporate problem. Some companies like Glascote Klein, Gus Kerr, was
:07:36. > :07:41.fined. It's a corporate responsibility which seems to have
:07:41. > :07:51.spread under globalisation. Obviously the city of London is the
:07:51. > :07:51.
:07:51. > :07:59.place where 800 trillion dollars transactions in any given day. It's
:07:59. > :08:04.a lot of money for those fiddling with it. One of the interesting
:08:04. > :08:11.things is when even the big guys do bad in America, a called to
:08:11. > :08:16.question. In this country, that never happens. They find a way once
:08:16. > :08:23.you have broken through the membrane of power with or politics
:08:23. > :08:26.or business, you are untouchable in this country. Inquiries a kind of
:08:26. > :08:32.meat to throw the issue into the sand. The other thing that's
:08:32. > :08:35.important, it's not just corporate irresponsibility. It's a
:08:36. > :08:40.combination and you're absolutely right between the corporate
:08:40. > :08:46.responsibility and willingness of politicians to allow this to happen.
:08:46. > :08:50.Their need to regulate. To double message being given out. Look at
:08:50. > :08:56.George Osborne with his interview to the Financial Times talking
:08:56. > :09:00.about not curtailing the banking bonuses. That's about on one hand
:09:00. > :09:05.the Government, every government, whichever colour they are, tries to
:09:05. > :09:12.play a double game on one hen with that city is important as its
:09:12. > :09:18.source of revenue and the source of fundraising for politicians. A play
:09:18. > :09:22.that game and on the other end, increasingly, an ugly banker
:09:22. > :09:29.bashing which is not helpful or edifying or does not understand
:09:29. > :09:35.issues. The bank of bashing is a rhetorical passion of the bankers.
:09:35. > :09:44.It's not anything Bjorn back as far as we know it. End up having a lot
:09:44. > :09:51.of false in the sense that people believe this. We have angry people
:09:51. > :09:57.on the streets setting fire to pins and they are angry about bankers.
:09:57. > :10:01.Do you agree with the general public Biarritz effectively a
:10:02. > :10:06.crisis of legitimacy of institutions, worldwide
:10:06. > :10:12.institutions including the IMF. What are they doing? It's about
:10:12. > :10:21.specific ones here including the press. I believe in that totally.
:10:21. > :10:31.Let's start with the banking. But investigation by the Fraud Office.
:10:31. > :10:31.
:10:31. > :10:36.It took 46 used to come to fruition. That's not affected. Or so budget
:10:36. > :10:41.cuts which does not speed things up. All this and these questions
:10:41. > :10:48.indicate something that actually we are appearing to be working but it
:10:48. > :10:55.is not working. With regard to the spread of the inefficiency and
:10:55. > :11:03.corruption in other institutions, yes, we have a democratic system.
:11:03. > :11:08.We have a lack of confidence in the press. All over the place, actually,
:11:08. > :11:13.the British institutions and establishment needs to have a look
:11:13. > :11:17.at itself and revisit its relativity. He is that also true in
:11:17. > :11:22.Germany? Do people look at various institutions they're saying they
:11:22. > :11:29.don't work? They have not quite reached that level of public the
:11:29. > :11:34.Australian and scorn that I find here. It's the first round I agree
:11:34. > :11:40.that I think the Government is in a big malaise. I'd go further than
:11:40. > :11:47.blaming the corporations. Individual irresponsibility as it
:11:47. > :11:55.passed hard. The case of the people who have shifted income to the
:11:55. > :12:05.Channel Islands. They had all that money paid out as loans and credit
:12:05. > :12:05.
:12:05. > :12:08.tax bubble Wiggins. -- tax avoidance. This is a terrible thing.
:12:09. > :12:14.One of the most disturbing things last week is that one million
:12:14. > :12:18.children in Britain are starving. A actually developed this distended
:12:18. > :12:24.bellies, I don't know what you heard about that. I was shocked
:12:24. > :12:31.about those images. Did it not enough to eat. Some of it is due to
:12:31. > :12:36.the parents but it's again blaming people, we have this extraordinary
:12:36. > :12:43.rich class if you like a boarding responsibility. Out is that
:12:43. > :12:47.possible? One million children not eating enough? The other point is
:12:47. > :12:54.the slowness of progress. The proposition on the table at the
:12:54. > :12:57.banking should be split between retail and the corporate power on.
:12:57. > :13:01.While the earth would that needs excuse to take place? It should
:13:01. > :13:10.have happened earlier. There's an unwillingness to come to grips with
:13:10. > :13:17.it. Its virtue was but not yet. final word on that. Do you see this
:13:17. > :13:23.as a deep-seated malaise? Everybody looks to the Government. I see this
:13:23. > :13:27.as an extremely deep-seated malaise. I absolutely share that view. All
:13:27. > :13:31.institutions have lost public trust and it's difficult and the reason I
:13:31. > :13:35.was laughing about that other question about Germany, we had a
:13:35. > :13:42.cover story about Angela Merkel and why everybody loves to hate her.
:13:42. > :13:46.But they are all wrong. The reason she's so in for criticism is
:13:46. > :13:52.because she has more integrity in the way she deals with things and
:13:52. > :13:58.more consistency and she is actually sitting down sticking to
:13:58. > :14:07.her guns and also obeying the German constitution. She works with
:14:08. > :14:17.the constitution and the banks. women ruled the world ex-pat were
:14:18. > :14:19.
:14:19. > :14:24.This comes at a time when the soldiers are fighting and dying in
:14:24. > :14:27.Afghanistan. How far is this a sensible retailer Russian? How far
:14:27. > :14:31.is it a sign of money worries taking precedence over national
:14:31. > :14:36.security. I have read all the criticism and it is quite easy to
:14:36. > :14:40.criticise it because how can you reduce the size of the Army and
:14:40. > :14:46.fill the gap that exists with territorial people will have to be
:14:47. > :14:51.trained. You have to be set free from employers. I wonder what this
:14:51. > :14:54.decision tells me about how the strategic heads of the military
:14:54. > :15:00.establishment consider the future, what kind of military threats they
:15:00. > :15:03.think we will encounter. You could put a positive spin on it then say
:15:03. > :15:06.that may have come to the conclusion that there will not be
:15:06. > :15:13.another Gulf War, they will may be no more Afghanistan. There will be
:15:13. > :15:20.minor conflicts. Also there will be more of technological Oriented
:15:20. > :15:23.scenario. You could say, the prediction is, such horrendous
:15:23. > :15:27.events like the Gulf War, Afghanistan, will not appear and
:15:27. > :15:34.horizon for a long time. Hi-Tec is not for part-timers. There is a
:15:34. > :15:42.contradiction there. The is a big gamble. It is hope over experience.
:15:42. > :15:50.It's and it is half the size Britain had in the Falkland war.
:15:50. > :15:54.wonder... To see how this is phrase is interesting. It's people respect
:15:55. > :15:59.the difficulties soldiers are under now. Wouldn't it have been the
:15:59. > :16:03.normal way to say what you're political needs you think are in
:16:03. > :16:10.the future, in other words who are the enemy and threats? And then cut
:16:10. > :16:13.the costs. A I wrote a cover story in 2010 before the election in
:16:13. > :16:18.which I quoted a bit Cameron saying that perhaps Britain had to trim
:16:18. > :16:23.its ambitions to its resources. This is not something he has been
:16:23. > :16:26.prepared to be brave enough to say when he got into power because it's
:16:26. > :16:31.politically inexpedient to do so. But another reason... The Strategic
:16:31. > :16:34.Defence Review had been delayed and delayed because he was such a
:16:34. > :16:39.difficult problem. But it was a difficult problem not only because
:16:39. > :16:44.of shrinking resources and equipment costs spiralling and the
:16:44. > :16:47.change in the kinds of conflicts that armies, that military is were
:16:47. > :16:53.getting into, but also because of the fight between the different
:16:53. > :16:56.services. The way the British military is set up, they see each
:16:56. > :16:59.other as competitors. Every time you get your spending round you
:16:59. > :17:09.have NAB fighting and saying, Winnie the aircraft carriers. The
:17:09. > :17:10.
:17:10. > :17:20.EU have the RAF say we need this. The Army so we need this. -- you
:17:20. > :17:21.
:17:21. > :17:29.have the Navy. -- weak-kneed. And there are people driven by populist
:17:29. > :17:35.intervention. It's people sought for example that Iraq could be
:17:35. > :17:42.cheap and short. That was a mistake. So some people thought that. A lot
:17:42. > :17:45.of the military planners on both sides. I could not disagree more
:17:45. > :17:49.with Tom. Which is great, I have not have that opportunity for a
:17:49. > :17:53.while. I think the country needs to shrink to its proper size in the
:17:53. > :17:58.world show. Why can't we be like Switzerland? What is this thing
:17:58. > :18:01.about thinking that we are still an imperial power and we must have,
:18:01. > :18:07.cast ourselves as the saviours of the world, or dominate us of the
:18:07. > :18:11.world. But the more worrying for me is that the technological
:18:11. > :18:15.development in weaponry means that they know that the West can now
:18:15. > :18:19.fight these wars by sending unmanned planes and destroying
:18:19. > :18:29.populations. Quite a lot of innocent populations. And it does
:18:29. > :18:30.
:18:30. > :18:35.not cost them anything. I find that disturbing. if you are right and
:18:36. > :18:44.Britain should settle for a role of Switzerland, or more like Spain,
:18:44. > :18:50.why doesn't have politicians say that? For the reasons Catherine
:18:50. > :18:58.said. There is a gung-ho attitude. People wonder, what are we going
:18:58. > :19:08.there? Every time a body comes back. I think there has been a
:19:08. > :19:13.redefinition of the pot -- foreign policy objectives its. I believe
:19:13. > :19:20.what has gone on in Libya gives an indication of what Britain seems --
:19:20. > :19:26.sees itself to do. Sending some groups of SAS on the ground to
:19:26. > :19:34.indicate targets and then go and do it with the assistance of American
:19:34. > :19:41.tankers in alliance with other European partners. I believe there
:19:41. > :19:46.is a change of objective probably more focused on cyber -- seeing
:19:46. > :19:56.more in terms of the unmanned drones, like war games par
:19:56. > :20:03.excellence. The thing is, Britain is changing. We need to see this as
:20:03. > :20:12.a reality. Politicians do not tell you that it is not the case that we
:20:12. > :20:20.are doing is, but there as one of the generals said, economic
:20:20. > :20:26.necessity is the mother of all inventions. With respect, I was not
:20:26. > :20:36.arguing for a larger role for Britain, there is no, combatants
:20:36. > :20:39.
:20:39. > :20:43.about what this means other than... The Ministry of Defence has wasted
:20:43. > :20:47.money ordering agreement that was never needed. It was never used.
:20:47. > :20:53.But because everybody is meant to love the Army, and that PR
:20:53. > :20:57.onslaught has really worked, because there were times, remember
:20:57. > :21:03.where people were so angry that they can get a certain towns...
:21:03. > :21:08.They have -- they could not go too. Were stock about the Olympics. They
:21:08. > :21:13.do it -- they begin in two weeks. - - let's talk about. How prepared
:21:13. > :21:16.are we and will there be a lasting legacy? You are fully accredited.
:21:16. > :21:25.You get to use the fast lanes in London. The rest of us are stuck in
:21:25. > :21:35.the tubes. Or stuck in the car park. How do you account for this great
:21:35. > :21:36.
:21:36. > :21:40.privilege? Because time is covering the Olympics seriously. I will be
:21:40. > :21:44.working for this. We have set up a separate website. We're doing a
:21:44. > :21:48.double issue. We will be covering it day-in day-out. You are excited
:21:48. > :21:53.by it? I am excited by I have also written a big story about the
:21:53. > :22:00.London Olympics which has not come out it -- on a jet. I was looking
:22:00. > :22:05.for London's who were excited by it. -- out yet. It's that is harder
:22:05. > :22:12.than finding the God particle. I met a woman who was really excited.
:22:12. > :22:18.I met had just before -- I met her just after the stove. She managed
:22:18. > :22:21.to get tickets for what she wanted. -- after the story. In terms of
:22:21. > :22:31.people's attitudes this is one of the problems. It has been
:22:31. > :22:32.
:22:32. > :22:35.incredibly hard to get it is. The competition is so fierce. I think
:22:35. > :22:42.the deeper the National malaise gets the more the excitement grows.
:22:42. > :22:47.It is a one off event. You have to make the most of it. The day after
:22:47. > :22:51.reality was setting and the full extent of the trouble that Britain
:22:51. > :22:59.is in will remove any excitement. A lot of us will settle for Andy
:22:59. > :23:05.Murray winning Wimbledon. A lot quicker. And no traffic. It's it is
:23:05. > :23:11.due shortly before me to believe that there will be a lasting legacy.
:23:11. > :23:15.-- it is too short lived. I hope that the venues will be put to good
:23:15. > :23:25.use. That is not certain. But overall I think this country will
:23:25. > :23:25.
:23:25. > :23:31.have one-upmanship up and see it as trouble. I think you are right.
:23:31. > :23:36.was a distraction for the Jubilee. That was a distraction again. It's
:23:36. > :23:41.but what is great about the Olympics is what it means for the
:23:41. > :23:45.World. We should be thinking about that. The runners from Kenya, there
:23:45. > :23:48.was this article about a Somali woman who wants to run. What it
:23:48. > :23:57.means to the world is really fantastic. We should not be so
:23:57. > :24:02.miserable about what it means for Londoners. If I am right in of
:24:02. > :24:10.serving that Saudi women are going to compete in the Olympics, this is
:24:10. > :24:16.the first. The Olympics will be important for British soft power
:24:16. > :24:23.and influence. -- right in assuming. There are 48,000 journalists coming
:24:23. > :24:27.to cover from overseas. That is also good. Urban regeneration in
:24:27. > :24:35.east London, I think this is the second wave that we see in London
:24:35. > :24:41.after the Docklands. The third thing is the security. The security
:24:41. > :24:45.looks like it will be tight. But from reliable sources, intelligence
:24:45. > :24:51.feel that it will be generally safe except for one thing. But there
:24:51. > :24:56.will be a visible presence of anti- aircraft rockets in central London.
:24:56. > :25:00.I tend to disagree on one point. That is about the journalists being
:25:00. > :25:06.important. Foreign visitors and journalists tend to invariably fall
:25:06. > :25:09.for the glitz and glamour of London. They never understand what lies
:25:10. > :25:13.underneath the surface, the imbalance between rich and poor,
:25:13. > :25:18.the crisis we talked about before. They are not going to run the
:25:18. > :25:22.project the image of what Britain is all about and what she is
:25:22. > :25:26.lacking. In the East end where this development has happened, it is
:25:26. > :25:31.like a great shiny spaceships has landed and flattened some of the
:25:31. > :25:36.slums. The question is, will these great shiny spaceships put out
:25:36. > :25:40.routes and actually integrate? That is the legacy question. That is