:00:27. > :00:34.Hello and welcome to Dateline. America's spy agency bugging its
:00:35. > :00:38.friends and allies. What the possible closure of a huge
:00:39. > :00:40.petrochemical works tells us about the global economy, and what to do
:00:41. > :00:54.about petrol prices. Well, the files released by the
:00:55. > :00:57.former US spy agency contractor Edward Snowden produces new
:00:58. > :01:03.embarrassments week by week. This week it was news that the US have
:01:04. > :01:08.been bugging Angela Merkel, something not explicitly denied by
:01:09. > :01:16.the White House, and they have been bugging other foreign leaders as
:01:17. > :01:22.well. Should we be surprised? That is what they are paid to do, but are
:01:23. > :01:28.they paid to spy on Angela Merkel? I sometimes look at Spies, the bidding
:01:29. > :01:37.of fruit is there but you must clear of it. `` the four bed and fruit. It
:01:38. > :01:45.requires political guidance to tell these people, stay clear of someone
:01:46. > :01:51.like Angela Merkel. What is there to learn in the fight against terrorism
:01:52. > :01:56.by bugging Angela Merkel's phone? You wonder what else is there to
:01:57. > :02:06.learn. Here we are in the real kind of New World. This is espionage. We
:02:07. > :02:10.are friends, in political terms, and allies in security matters. But we
:02:11. > :02:14.are competitors in the area of industrial relations. We want to
:02:15. > :02:20.find out whether we can learn something in the area of economic
:02:21. > :02:29.advantage. It is definitely damaging to relations and we have to be
:02:30. > :02:34.careful not to let this summer. The notion the Brussels summit has come
:02:35. > :02:38.up with a bilateral delegation from France and Germany to talk to
:02:39. > :02:41.Americans to find a regime is ridiculous. Once you have a
:02:42. > :02:45.signature on such a deal, the Spies will be on to each other's telephone
:02:46. > :02:53.to see if they are at hearing to it or not. Just to be clear, she is
:02:54. > :02:59.really annoyed about this. She has to be annoyed, publicly. This is a
:03:00. > :03:04.political issue of the worst kind. She did not seem to care too much in
:03:05. > :03:12.the summer when it was first involved there was some going on.
:03:13. > :03:18.Now she is involved, she has to really climb the highest ladder of
:03:19. > :03:24.annoyance. But are a lot of crocodile tears are being shared
:03:25. > :03:30.here. From the French most of all. The French are leaders in industrial
:03:31. > :03:34.espionage. And have been for years. Francois Hollande said, we have to
:03:35. > :03:40.protect our industrial area from foreign intervention. But they are
:03:41. > :03:44.doing it themselves. Maybe German capabilities are not quite up to the
:03:45. > :03:58.modern standard. Thank goodness the British do not get involved. Thomas
:03:59. > :04:05.makes the central point, a lot of this is about economics buying,
:04:06. > :04:08.isn't it? People think it is all about terrorism, but actually
:04:09. > :04:13.questions about trade between the United States and the European
:04:14. > :04:15.Union, what Angela Merkel is doing about the economy, those things are
:04:16. > :04:21.of great interest to other countries. The French will steal
:04:22. > :04:27.actual industrial secrets and give it to their national champions.
:04:28. > :04:32.Trying to understand what another delegation is doing in trade talks,
:04:33. > :04:36.that is state to state stuff. I think it is true that everyone has
:04:37. > :04:43.been spying on everyone else for as long as they can get away with it. I
:04:44. > :04:47.think perhaps the German sensitivity on the subject given the second
:04:48. > :04:51.World War is different to the attitude in America. In America
:04:52. > :05:00.security forces are not looked at as such evil things. It is,
:05:01. > :05:04.fundamentally, one more thing that makes Europeans think the Americans
:05:05. > :05:08.are not like them and that is a dangerous thing in the long one. I
:05:09. > :05:13.do not think President Obama will be winning a Nobel Peace Prize any time
:05:14. > :05:18.since. When you add this to discussions about whether drones are
:05:19. > :05:22.illegal, the issue with Syria, the Americans cannot get their budget
:05:23. > :05:28.passed in any intelligent fashion, this is the kind of long`term change
:05:29. > :05:34.you have to worry about. President Obama is pivoting to Asia, but he
:05:35. > :05:35.has to worry about whether the fundamental understanding between
:05:36. > :05:41.Americans and the Europeans that they are on the same team is
:05:42. > :05:48.protected. Germans are wondering particularly whether these spying
:05:49. > :05:55.services mean that Germany has fallen down a peg or two on the
:05:56. > :06:08.ladder. It is not just the Germans. The French are doing it. Everybody
:06:09. > :06:15.is doing it. This is what Spies do. The Americans have greater
:06:16. > :06:18.capabilities. We no longer differentiate well between enemies
:06:19. > :06:27.and friends. Friends have always spied on one another. It is just the
:06:28. > :06:33.fact it has come out. Exactly. The EU line was that this is a breach of
:06:34. > :06:37.trust, and trust is important in our relationship if we are going to
:06:38. > :06:43.cooperate in terrorism and other things. It is a very fair point. It
:06:44. > :06:49.is good that this is not a terrorism story. People say, everything is
:06:50. > :06:53.acceptable in the fight against terror. This has nothing to do with
:06:54. > :07:00.terror, but it is economic and industrial. It is important not to
:07:01. > :07:04.forget about Brazil, and what happened with the Brazilian
:07:05. > :07:08.president. She made her entire General Assembly speech about this
:07:09. > :07:10.and called it a breach of international law. It was
:07:11. > :07:16.interesting because there were quite a few Europeans who thought, yes of
:07:17. > :07:21.course she is upset, but they did not give it much thought until it
:07:22. > :07:24.hit home. The fact the Brazilian president cancel the only state
:07:25. > :07:29.dinner that President Obama had set up this year because of this
:07:30. > :07:33.fallout. This is about where America stands in the world and is it
:07:34. > :07:46.getting too big for its own good in terms of surveillance. Or too
:07:47. > :07:51.paranoid. On the other hand, we do not hear about the successes. Let's
:07:52. > :07:56.say this is hoovering up on a large scale, at the hoovering of cold data
:07:57. > :08:04.has actually led to picking out terrorists. `` cold data. There is a
:08:05. > :08:12.lot more cooperation underneath this. There is a lot going on that
:08:13. > :08:16.the Americans can do that is useful, but we will never really
:08:17. > :08:22.understand it in the public realm because they cannot talk about it.
:08:23. > :08:26.Picking up on that, it is interesting how grown`up everyone
:08:27. > :08:32.has been about this after the public outrage. One of the thing that was
:08:33. > :08:38.feared was that these trade talks between the United States and Europe
:08:39. > :08:41.would be affected. It was not. The notion intelligence cooperation on
:08:42. > :08:46.things like terror would be affected, that is not happening. In
:08:47. > :08:51.a way, it is kind of a performance where people have to be indignant.
:08:52. > :08:57.The Americans have to be contrite, for political reasons. The elephant
:08:58. > :09:03.in the room is not so much whether governments are spying on one
:09:04. > :09:15.another, it is this technological change, on such a huge scale and it
:09:16. > :09:19.is not just governments. Any numerous teenager anywhere in the
:09:20. > :09:27.world could probably hack into Angela Merkel's mobile phone. Edward
:09:28. > :09:32.Snowden can get this all into the public sector. Spying is not buying
:09:33. > :09:36.any more. I was going to make a point, which is there is a great
:09:37. > :09:43.deal of outrage about the thought that people all over the world may
:09:44. > :09:47.have their information hoovered up. When it's comes to governments, is
:09:48. > :09:52.it a bad thing to know what government is really up to? Does it
:09:53. > :09:58.not make the world potentially safer to have spying going on and finding
:09:59. > :10:05.out what they really think? It does, and there are historical examples.
:10:06. > :10:09.The peace agreement between Egypt. The end of the Cold War, a lot of
:10:10. > :10:15.that was accelerated by enemies getting better intelligence and in
:10:16. > :10:20.the Soviet's case, they found the Americans did not have plans to
:10:21. > :10:24.launch offensive strikes against the Soviet Union. There were new
:10:25. > :10:29.assessments of the military disposition in Egypt that allow the
:10:30. > :10:35.Israelis to reciprocate. In that sense, you're absolutely right.
:10:36. > :10:41.Greater transparency is are a good thing for a nation state. But it
:10:42. > :10:52.begs the question whether you need embassies any more. It cannot be
:10:53. > :10:58.just old data, it is acceptable to be monitoring because you have to
:10:59. > :11:03.know what information is useful in the fight against terror or any
:11:04. > :11:07.other national interest. I think it is important to make sure you have
:11:08. > :11:13.all that intelligence gathering, as it has always happened. Angela
:11:14. > :11:16.Merkel, or 70 million citizens of one country or another are being
:11:17. > :11:26.monitored. What is the protection side? They are not yet monitored,
:11:27. > :11:31.they are hoovered. But they have the capability. The world waits to hear
:11:32. > :11:39.the transcript of Silvio Berlusconi's phone calls! The
:11:40. > :11:45.company which owns the giant petrochemical works and oil refinery
:11:46. > :11:49.in Grangemouth moved its base to Switzerland in 2010 where taxes are
:11:50. > :11:55.lower. This week they threatened to close half of the plant. Governments
:11:56. > :12:00.are often helpless to set industrial policy and collect taxes in how they
:12:01. > :12:04.used to. The plant has been saved and people are pleased that jobs
:12:05. > :12:10.appear to be safe. Maybe for a generation. Is this a sign of where
:12:11. > :12:16.we are in this recession that in order to keep your job you have to
:12:17. > :12:19.keep `` you have to take a pay cut. A lot of people know this has been
:12:20. > :12:31.the story of their lives for a couple of years. Is this a news
:12:32. > :12:35.story? The acceleration of manufacturing to more low`cost
:12:36. > :12:40.locations, this is not a new story. The factors in this case where that
:12:41. > :12:43.unions seem to overreach and there was a particularly tough boss. He
:12:44. > :12:48.figured out the mechanics of this and how to put pressure at the right
:12:49. > :12:53.time. That kind of hardball negotiation between employers and
:12:54. > :13:01.unions has a long, traditional history in this country. I think the
:13:02. > :13:05.next step is not just industrial jobs are easy to migrate, but
:13:06. > :13:11.service jobs. You can have call centres in India doing the work, you
:13:12. > :13:14.can have legal research being done in the Philippines. Legal
:13:15. > :13:20.secretaries are now doing it in other low`cost locations. And all
:13:21. > :13:25.other kinds of jobs like salespeople, lots of the jobs people
:13:26. > :13:31.have had an industrial countries are much easier and cheaper to do on the
:13:32. > :13:35.end of a fibre`optic pipe. I do not think we are going to be able to
:13:36. > :13:40.have the governments figure out a way of stopping the flow of jobs to
:13:41. > :13:43.cheaper places, that is just what current global capitalism, and
:13:44. > :13:50.capitalism as we can see it is going to be. What government can do is
:13:51. > :13:57.make their country attractive and work against having tax havens. They
:13:58. > :14:02.can coordinate tax policies so it is not so easy to go to Switzerland.
:14:03. > :14:06.And the money can come in for long`term investment to things which
:14:07. > :14:10.make your country were living in. I do not know what else governments
:14:11. > :14:19.can do to stop people going further ashore. Written's GDP seems to have
:14:20. > :14:25.gone up quite healthily. At the same time, a lot of people say, and the
:14:26. > :14:31.Labour Party certainly says, people are still hurting because wages have
:14:32. > :14:37.not gone up. Ed Miliband is `` is onto something. This notion of the
:14:38. > :14:42.squeezed middle and the fact that living standards are not keeping
:14:43. > :14:48.pace with inflation, low though it is, is obviously of political
:14:49. > :14:54.concern to the government. They are looking for a way to respond. What
:14:55. > :15:02.is fascinating about this, and Grangemouth is part of the story, is
:15:03. > :15:07.there are going to be two competing narratives at the next election, it
:15:08. > :15:12.would appear. The Labour narrative is the old Ronald Reagan to Jimmy
:15:13. > :15:19.Carter debate, are you better off than you were four years ago? And
:15:20. > :15:23.the government line is Bill Clinton, it is the economy. Would you trust
:15:24. > :15:28.these guys to take it over. It will be fascinating to see who wins out.
:15:29. > :15:36.The interesting thing about Grangemouth is, on one hand
:15:37. > :15:41.Scotland, if you were the First Minister of Scotland you could take
:15:42. > :15:46.credit for having a big part in saving this facility. And good on
:15:47. > :15:50.him. If you are an ordinary Scottish voter, for instance with
:15:51. > :15:57.independents coming up for a referendum vote, do you not feel a
:15:58. > :16:03.little bit more vulnerable to the forces of the international economy?
:16:04. > :16:10.And also RBS and the bank of Scotland were bailed out by
:16:11. > :16:15.taxpayers money. Can I come back to your original question about whether
:16:16. > :16:21.it is fine to safeguard jobs. That is not the whole story. Jobs have
:16:22. > :16:28.been saved on conditions of pegging your earnings. Your earnings have
:16:29. > :16:33.been pegged. The Labour argument about the cost of living outpacing
:16:34. > :16:42.any advantages you may gain from safeguarding your jobs. But it is
:16:43. > :16:47.better to be employed. Other jobs are being saved along the same lines
:16:48. > :16:51.and the dignity of life spent under such conditions is being slowly but
:16:52. > :17:00.surely impaired. That has not been answered yet. The issue of employees
:17:01. > :17:04.feeling vulnerable and employers feel they can negotiate much tougher
:17:05. > :17:05.deals, unions have been weakened and that will also
:17:06. > :17:08.deals, unions have been weakened and that will play out in the next
:17:09. > :17:16.election. And the relationship with Labour, also, especially for Unite.
:17:17. > :17:20.As long as unemployment is still high, and as long as people feel
:17:21. > :17:24.there are not that many jobs to go around, partly because it's easy to
:17:25. > :17:28.relocate somewhere else with cheaper wages and so forth, we will have
:17:29. > :17:34.this problem. It comes in different forms but, we have to do is think
:17:35. > :17:38.about how much can you do job protection in a globalised economy?
:17:39. > :17:44.To be fair, you can't. So you're going to do think about how to
:17:45. > :17:48.create new jobs and the of smaller businesses. It's the reality, that's
:17:49. > :17:52.what's going to do the main employment because the big global
:17:53. > :17:58.corporate will go where they can make more money. The allied question
:17:59. > :18:05.is skittles because the kinds of jobs there will be require an
:18:06. > :18:12.education system that turns out young people, retrain people, who
:18:13. > :18:20.are in businesses that have gone south or abroad, to be competitive.
:18:21. > :18:28.That's a huge investment, complex. And long term. A recent survey in
:18:29. > :18:32.England suggested actually 22nd in literacy and numeracy in 26
:18:33. > :18:35.countries, which is not great. Except the people doing it couldn't
:18:36. > :18:38.add up. OK, let's move on. Everyone knows energy is increasingly
:18:39. > :18:40.expensive and the politics of energy are increasingly difficult. This
:18:41. > :18:42.week, the former British Prime Minister John Major suggested the
:18:43. > :18:45.government could introduce a windfall profit tax on energy
:18:46. > :18:53.companies. Is that the best way to deal with the problem? What do you
:18:54. > :18:55.think? There is clearly a problem and everybody recognises that, but
:18:56. > :19:01.there is now a lot of different solutions. It's been very
:19:02. > :19:06.interesting hearing from different conservatives how they would deal
:19:07. > :19:08.with the problem. Of course, we had David Cameron saying if British Gas
:19:09. > :19:14.is raising prices, you should just go and change to another competitor,
:19:15. > :19:18.which is capitalism. You have to do try to go for what the consumers
:19:19. > :19:23.actually would want but, in reality, everybody is raising
:19:24. > :19:26.questions so it's not a solution. Then John Major interestingly saying
:19:27. > :19:30.there should be a windfall tax and I agree with that. I think there is a
:19:31. > :19:35.benchmark, if companies are making more than was expected, there should
:19:36. > :19:39.be an extra tax, but it comes back to, in this current economic system,
:19:40. > :19:43.that's not really favoured because the people who actually have it
:19:44. > :19:51.within their remit to make that decision are often benefiting from
:19:52. > :19:55.the actual system. But also, another interesting energy story has been
:19:56. > :19:59.the fact the UK will build a new nuclear power plant with the Chinese
:20:00. > :20:03.investments. Again, we see the politics of it, not only the
:20:04. > :20:08.economic scum of energy, which is impacting the UK in different ways
:20:09. > :20:14.as we see, of course, less reliance on domestic resources. There is the
:20:15. > :20:18.Ed Miliband idea you can cap energy prices, which some people have
:20:19. > :20:24.ridiculed because there is a world market. Others have said it might
:20:25. > :20:28.work. The Scottish Government is thinking of doing, if they win the
:20:29. > :20:32.independence referendum, pay for green levies out of general
:20:33. > :20:38.taxation. Slightly more compensated than that but that's basically it.
:20:39. > :20:42.They are scrabbling around to try to hit an outrageous system where we
:20:43. > :20:46.have to pay a lot of money. And also the fact the increases are so much
:20:47. > :20:51.higher than inflation so when you are looking at 10% increases, for
:20:52. > :20:58.your energy bill, at a time when wages are not going up at all, let
:20:59. > :21:01.alone by 5%, so there's definitely a problem. Nobody has found a solution
:21:02. > :21:06.and that's why there's so many different ideas being thrown around.
:21:07. > :21:11.As we get closer to the election, some will try to make a very
:21:12. > :21:15.compelling promises, for example, capping prices. It can't be done
:21:16. > :21:23.because the regulator for energy prices impose that, so what role can
:21:24. > :21:27.government play? What are the politics of this? Ed Miliband also
:21:28. > :21:32.says what is needed is restructuring the energy market. Pretty much
:21:33. > :21:37.everybody agrees with that. Politics is fascinating that Ed Miliband hit
:21:38. > :21:42.on a winner with identifying the issue. Even most of his own party
:21:43. > :21:46.recognised this price freeze is not workable, and some people would
:21:47. > :21:51.argue one of the reasons we got this precipitous increase in price by the
:21:52. > :21:58.big six, at this stage, is in anticipation of a freeze. That may
:21:59. > :22:03.be true, but people might blame the current government even though it
:22:04. > :22:10.was caused... But in terms of the politics, I agree with you. Labour
:22:11. > :22:13.is on to something. The issue, what I find politically fascinating about
:22:14. > :22:19.this, is the one thing that might be a game changer, and what is needed
:22:20. > :22:23.is a long`term market solution. None of these things, not even John
:22:24. > :22:30.Major, although if the most workable, the windfall tax, deals
:22:31. > :22:35.with the fact that you need are ready and affordable and stable
:22:36. > :22:40.supply of energy. If you gave that check list of someone in the USA
:22:41. > :22:43.now, they would say fracking. They would say shale gas which has
:22:44. > :22:49.transformed the American market. But there is this English tradition of
:22:50. > :22:55.things like fracking is fine as long as it is not in my backyard. I've
:22:56. > :22:58.see another political problem here, a potential wedge in the coalition
:22:59. > :23:03.because the Conservatives are thinking about when it comes to
:23:04. > :23:10.reducing prices, perhaps to withdraw the green levies or some of it. They
:23:11. > :23:15.are certainly reviewing it. There is a potential conflict here as we come
:23:16. > :23:19.to the next election. It could be sleight of hand, they could put on
:23:20. > :23:25.general taxation. Like the Scottish, pay for differently. Also there are
:23:26. > :23:33.new consumer nations like Japan who are now also moving off atomic
:23:34. > :23:37.energy altogether. The energy companies are arguing for the
:23:38. > :23:41.increasing their prices. What is happening in Germany now because
:23:42. > :23:45.Angela Merkel has abandoned a new programme? It's uncertain. It's an
:23:46. > :23:49.enigma wrapped in a mystery how we will confront the energy supply for
:23:50. > :23:53.the future and at what price? By the way, the price is a question in
:23:54. > :23:59.England, to force we don't know whether the Chinese will actually
:24:00. > :24:03.help reduce the price. We are trying to find a way to make energy
:24:04. > :24:11.affordable but haven't found the answer yet. We are in uncharted
:24:12. > :24:15.territory. Normally we have figured out 2000 steps in the future. That
:24:16. > :24:24.is one Angela Merkel's impetuous decisions. I imagine that's what was
:24:25. > :24:32.behind it. It was so out of character. The Americans. Where is
:24:33. > :24:39.the USA on this? Fracking is seen as what? The holy Grail? No more
:24:40. > :24:42.independence on imported oil? The environmental concerns, although
:24:43. > :24:49.there are some, seem to have been muted. The wholesale price of gas is
:24:50. > :24:54.coming down. It's competing, the price of coal and oil has come down.
:24:55. > :24:58.Manufacturing can I be done more cheaply than before. It's a good
:24:59. > :25:05.thing for the USA. It doesn't cost global warming. You have all the
:25:06. > :25:12.space in the world to do these things. We all breathe the same air,
:25:13. > :25:15.as Jack Kennedy says. It reminds the British rail, the energy situation
:25:16. > :25:19.here, you don't know who was responsible for what. A big
:25:20. > :25:24.investment is needed for energy systems. I have changed my supplier
:25:25. > :25:31.that I have no idea who these people are? What relation it has world
:25:32. > :25:36.prices. I can't figure out 95 options of tariffs. You need a Ph.D.
:25:37. > :25:43.. It's mind numbingly dull. Who is Ofgem, the regulators? In some
:25:44. > :25:50.American states the public voting for regulators to have some sense
:25:51. > :25:56.somebody is minding the store. Here, various companies, who are these
:25:57. > :25:59.people? More political control and transparency is needed. Perhaps we
:26:00. > :26:02.should bugs and find out what they are doing. That's it from Dateline
:26:03. > :26:05.London for this week. We're back next week at the same time. You can
:26:06. > :26:32.comment on the programme on Twitter. Goodbye.
:26:33. > :26:37.Hello there. This could be a good weekend for enjoying the autumn
:26:38. > :26:42.colours before more leaves are stepped from the trees. Wild weather
:26:43. > :26:47.in Monday. A weather warning in place of central and southern
:26:48. > :26:50.England and Wales. 80 mph wind possible on Monday which will cause
:26:51. > :26:57.potential travel and power disruption as well. Low`pressure
:26:58. > :27:03.blossoming to live this morning after East Coast. Watch on Sunday
:27:04. > :27:06.how it deepens. The isobars tighten. On the southern flank we will see
:27:07. > :27:08.some damaging gusts, so the