07/07/2012 Dateline London

cut. Now on BBC News it's time for A new investigation into

allegations of fiddling with British banks and cutbacks to the

Army. What about British rule in this century? How much should

London look forward to the Olympic The resignation of Bob Diamond, the

boss of Barclays Bank, has not ended this banking crisis but has

allowed it to shoot up one year. The banking industry and the

politicians, it's quite extraordinary degree to which

people were critical of the banks before and they did not think it

could get much worse. Now the journalists are doing better than

the bankers. For the first time in 60 years, the most unpopular

politicians and bankers are worse off. Want the problems is, this is

an accumulative thing. It's as if we had won the bad thing about the

dangers about one year ago. Then we talk about Lehman Brothers. It

seems they might even be shock fatigue. It's really dangerous. The

public thinks, so what? They are all bankers, what do you expect? It

out range from the population. They expect everybody behaves badly.

It's about trust and I feel that a lot. You have asked the right

question. How is this all the politicians. It's the way in which

we see outsourcing of parliamentary and democratic function. Because of

this absence of trust in all these institutions, nobody knows how to

deal with this crisis and it's very dangerous. It's not enough to just

have Parliament looking into what has gone wrong with the banks

because nobody trusts the politicians. It's also the

parliamentary inquiry about the media. The Leveson Inquiry. There

is now another debate continuing about another inquiry about the

banking system. Does the proliferation of public inquiries.

There's also discussions about decisions with Europe. It's all

about outsourcing of function that we would normally expect

politicians to carry out. Because we don't trust the politicians we

don't trust them and people don't trust us so they don't trust

accountability and we don't trust the bankers or the police. It's a

very dangerous situation. This is the point at which an economic

crisis becomes a political crisis. It's a problem for society and

establishment. Well-educated people came for dinner. Not one of them,

in the UK, they don't believe that if we have an elected House of

Lords, those elections would be a good thing. They don't believe in

democracy. Not one of them boats any more. I found that absolutely

shocking. But they do vote. What do you make of this? There are three

points. The first one, related to the banks. Barclays banks. The

interwoven relationship between the administration and the corporations.

You can hire somebody in London were using the Barclays Bank branch.

One politician stood up to defend Bob Diamond. It raises questions

about how the Government can be moved by money. The other point is

extremely important also. But at the Bob Diamond is an American. An

aggressive American banker. He has experience Credit-Suisse and Morgan

Stanley. He has applied does operations here. It's bad practice

here. It's a funny one. This is related to the economic size terms.

Diamonds are not for ever. He was aggressive in America. And I made

one. About aggressive Americans. It's interesting I think and

misunderstanding to see Bob Diamond with his American culture imported

into London. The City London, look at scandals here. A huge gallery of

rogue traders. Also the original American investigation. It seems to

be American regulators. Or so we know about Barclays because they

talked about what had happened. They opened up. There will be more.

There is a panel of 18 banks. This scandal is likely to extend way

across national borders. The point about the city of London. As been a

gentleman's club infected by Americans. This is absolutely wrong.

Its effectiveness of self regulation. We don't blame the

Americans. We usually blamed the Germans. I don't know whether any

German banks are involved. Normally I think there's little to be gained

from the downward spiral between America and England. This is a

corporate problem. Some companies like Glascote Klein, Gus Kerr, was

fined. It's a corporate responsibility which seems to have

spread under globalisation. Obviously the city of London is the

place where 800 trillion dollars transactions in any given day. It's

a lot of money for those fiddling with it. One of the interesting

things is when even the big guys do bad in America, a called to

question. In this country, that never happens. They find a way once

you have broken through the membrane of power with or politics

or business, you are untouchable in this country. Inquiries a kind of

meat to throw the issue into the sand. The other thing that's

important, it's not just corporate irresponsibility. It's a

combination and you're absolutely right between the corporate

responsibility and willingness of politicians to allow this to happen.

Their need to regulate. To double message being given out. Look at

George Osborne with his interview to the Financial Times talking

about not curtailing the banking bonuses. That's about on one hand

the Government, every government, whichever colour they are, tries to

play a double game on one hen with that city is important as its

source of revenue and the source of fundraising for politicians. A play

that game and on the other end, increasingly, an ugly banker

bashing which is not helpful or edifying or does not understand

issues. The bank of bashing is a rhetorical passion of the bankers.

It's not anything Bjorn back as far as we know it. End up having a lot

of false in the sense that people believe this. We have angry people

on the streets setting fire to pins and they are angry about bankers.

Do you agree with the general public Biarritz effectively a

crisis of legitimacy of institutions, worldwide

institutions including the IMF. What are they doing? It's about

specific ones here including the press. I believe in that totally.

Let's start with the banking. But investigation by the Fraud Office.

It took 46 used to come to fruition. That's not affected. Or so budget

cuts which does not speed things up. All this and these questions

indicate something that actually we are appearing to be working but it

is not working. With regard to the spread of the inefficiency and

corruption in other institutions, yes, we have a democratic system.

We have a lack of confidence in the press. All over the place, actually,

the British institutions and establishment needs to have a look

at itself and revisit its relativity. He is that also true in

Germany? Do people look at various institutions they're saying they

don't work? They have not quite reached that level of public the

Australian and scorn that I find here. It's the first round I agree

that I think the Government is in a big malaise. I'd go further than

blaming the corporations. Individual irresponsibility as it

passed hard. The case of the people who have shifted income to the

Channel Islands. They had all that money paid out as loans and credit

tax bubble Wiggins. -- tax avoidance. This is a terrible thing.

One of the most disturbing things last week is that one million

children in Britain are starving. A actually developed this distended

bellies, I don't know what you heard about that. I was shocked

about those images. Did it not enough to eat. Some of it is due to

the parents but it's again blaming people, we have this extraordinary

rich class if you like a boarding responsibility. Out is that

possible? One million children not eating enough? The other point is

the slowness of progress. The proposition on the table at the

banking should be split between retail and the corporate power on.

While the earth would that needs excuse to take place? It should

have happened earlier. There's an unwillingness to come to grips with

it. Its virtue was but not yet. final word on that. Do you see this

as a deep-seated malaise? Everybody looks to the Government. I see this

as an extremely deep-seated malaise. I absolutely share that view. All

institutions have lost public trust and it's difficult and the reason I

was laughing about that other question about Germany, we had a

cover story about Angela Merkel and why everybody loves to hate her.

But they are all wrong. The reason she's so in for criticism is

because she has more integrity in the way she deals with things and

more consistency and she is actually sitting down sticking to

her guns and also obeying the German constitution. She works with

the constitution and the banks. women ruled the world ex-pat were

This comes at a time when the soldiers are fighting and dying in

Afghanistan. How far is this a sensible retailer Russian? How far

is it a sign of money worries taking precedence over national

security. I have read all the criticism and it is quite easy to

criticise it because how can you reduce the size of the Army and

fill the gap that exists with territorial people will have to be

trained. You have to be set free from employers. I wonder what this

decision tells me about how the strategic heads of the military

establishment consider the future, what kind of military threats they

think we will encounter. You could put a positive spin on it then say

that may have come to the conclusion that there will not be

another Gulf War, they will may be no more Afghanistan. There will be

minor conflicts. Also there will be more of technological Oriented

scenario. You could say, the prediction is, such horrendous

events like the Gulf War, Afghanistan, will not appear and

horizon for a long time. Hi-Tec is not for part-timers. There is a

contradiction there. The is a big gamble. It is hope over experience.

It's and it is half the size Britain had in the Falkland war.

wonder... To see how this is phrase is interesting. It's people respect

the difficulties soldiers are under now. Wouldn't it have been the

normal way to say what you're political needs you think are in

the future, in other words who are the enemy and threats? And then cut

the costs. A I wrote a cover story in 2010 before the election in

which I quoted a bit Cameron saying that perhaps Britain had to trim

its ambitions to its resources. This is not something he has been

prepared to be brave enough to say when he got into power because it's

politically inexpedient to do so. But another reason... The Strategic

Defence Review had been delayed and delayed because he was such a

difficult problem. But it was a difficult problem not only because

of shrinking resources and equipment costs spiralling and the

change in the kinds of conflicts that armies, that military is were

getting into, but also because of the fight between the different

services. The way the British military is set up, they see each

other as competitors. Every time you get your spending round you

have NAB fighting and saying, Winnie the aircraft carriers. The

EU have the RAF say we need this. The Army so we need this. -- you

have the Navy. -- weak-kneed. And there are people driven by populist

intervention. It's people sought for example that Iraq could be

cheap and short. That was a mistake. So some people thought that. A lot

of the military planners on both sides. I could not disagree more

with Tom. Which is great, I have not have that opportunity for a

while. I think the country needs to shrink to its proper size in the

world show. Why can't we be like Switzerland? What is this thing

about thinking that we are still an imperial power and we must have,

cast ourselves as the saviours of the world, or dominate us of the

world. But the more worrying for me is that the technological

development in weaponry means that they know that the West can now

fight these wars by sending unmanned planes and destroying

populations. Quite a lot of innocent populations. And it does

not cost them anything. I find that disturbing. if you are right and

Britain should settle for a role of Switzerland, or more like Spain,

why doesn't have politicians say that? For the reasons Catherine

said. There is a gung-ho attitude. People wonder, what are we going

there? Every time a body comes back. I think there has been a

redefinition of the pot -- foreign policy objectives its. I believe

what has gone on in Libya gives an indication of what Britain seems --

sees itself to do. Sending some groups of SAS on the ground to

indicate targets and then go and do it with the assistance of American

tankers in alliance with other European partners. I believe there

is a change of objective probably more focused on cyber -- seeing

more in terms of the unmanned drones, like war games par

excellence. The thing is, Britain is changing. We need to see this as

a reality. Politicians do not tell you that it is not the case that we

are doing is, but there as one of the generals said, economic

necessity is the mother of all inventions. With respect, I was not

arguing for a larger role for Britain, there is no, combatants

about what this means other than... The Ministry of Defence has wasted

money ordering agreement that was never needed. It was never used.

But because everybody is meant to love the Army, and that PR

onslaught has really worked, because there were times, remember

where people were so angry that they can get a certain towns...

They have -- they could not go too. Were stock about the Olympics. They

do it -- they begin in two weeks. - - let's talk about. How prepared

are we and will there be a lasting legacy? You are fully accredited.

You get to use the fast lanes in London. The rest of us are stuck in

the tubes. Or stuck in the car park. How do you account for this great

privilege? Because time is covering the Olympics seriously. I will be

working for this. We have set up a separate website. We're doing a

double issue. We will be covering it day-in day-out. You are excited

by it? I am excited by I have also written a big story about the

London Olympics which has not come out it -- on a jet. I was looking

for London's who were excited by it. -- out yet. It's that is harder

than finding the God particle. I met a woman who was really excited.

I met had just before -- I met her just after the stove. She managed

to get tickets for what she wanted. -- after the story. In terms of

people's attitudes this is one of the problems. It has been

incredibly hard to get it is. The competition is so fierce. I think

the deeper the National malaise gets the more the excitement grows.

It is a one off event. You have to make the most of it. The day after

reality was setting and the full extent of the trouble that Britain

is in will remove any excitement. A lot of us will settle for Andy

Murray winning Wimbledon. A lot quicker. And no traffic. It's it is

due shortly before me to believe that there will be a lasting legacy.

-- it is too short lived. I hope that the venues will be put to good

use. That is not certain. But overall I think this country will

have one-upmanship up and see it as trouble. I think you are right.

was a distraction for the Jubilee. That was a distraction again. It's

but what is great about the Olympics is what it means for the

World. We should be thinking about that. The runners from Kenya, there

was this article about a Somali woman who wants to run. What it

means to the world is really fantastic. We should not be so

miserable about what it means for Londoners. If I am right in of

serving that Saudi women are going to compete in the Olympics, this is

the first. The Olympics will be important for British soft power

and influence. -- right in assuming. There are 48,000 journalists coming

to cover from overseas. That is also good. Urban regeneration in

east London, I think this is the second wave that we see in London

after the Docklands. The third thing is the security. The security

looks like it will be tight. But from reliable sources, intelligence

feel that it will be generally safe except for one thing. But there

will be a visible presence of anti- aircraft rockets in central London.

I tend to disagree on one point. That is about the journalists being

important. Foreign visitors and journalists tend to invariably fall

for the glitz and glamour of London. They never understand what lies

underneath the surface, the imbalance between rich and poor,

the crisis we talked about before. They are not going to run the

project the image of what Britain is all about and what she is

lacking. In the East end where this development has happened, it is

like a great shiny spaceships has landed and flattened some of the

slums. The question is, will these great shiny spaceships put out

routes and actually integrate? That is the legacy question. That is