26/10/2013 Dateline London


26/10/2013

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Hello and welcome to Dateline. America's spy agency bugging its

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friends and allies. What the possible closure of a huge

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petrochemical works tells us about the global economy, and what to do

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about petrol prices. Well, the files released by the

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former US spy agency contractor Edward Snowden produces new

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embarrassments week by week. This week it was news that the US have

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been bugging Angela Merkel, something not explicitly denied by

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the White House, and they have been bugging other foreign leaders as

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well. Should we be surprised? That is what they are paid to do, but are

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they paid to spy on Angela Merkel? I sometimes look at Spies, the bidding

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of fruit is there but you must clear of it. `` the four bed and fruit. It

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requires political guidance to tell these people, stay clear of someone

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like Angela Merkel. What is there to learn in the fight against terrorism

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by bugging Angela Merkel's phone? You wonder what else is there to

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learn. Here we are in the real kind of New World. This is espionage. We

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are friends, in political terms, and allies in security matters. But we

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are competitors in the area of industrial relations. We want to

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find out whether we can learn something in the area of economic

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advantage. It is definitely damaging to relations and we have to be

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careful not to let this summer. The notion the Brussels summit has come

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up with a bilateral delegation from France and Germany to talk to

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Americans to find a regime is ridiculous. Once you have a

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signature on such a deal, the Spies will be on to each other's telephone

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to see if they are at hearing to it or not. Just to be clear, she is

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really annoyed about this. She has to be annoyed, publicly. This is a

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political issue of the worst kind. She did not seem to care too much in

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the summer when it was first involved there was some going on.

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Now she is involved, she has to really climb the highest ladder of

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annoyance. But are a lot of crocodile tears are being shared

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here. From the French most of all. The French are leaders in industrial

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espionage. And have been for years. Francois Hollande said, we have to

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protect our industrial area from foreign intervention. But they are

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doing it themselves. Maybe German capabilities are not quite up to the

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modern standard. Thank goodness the British do not get involved. Thomas

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makes the central point, a lot of this is about economics buying,

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isn't it? People think it is all about terrorism, but actually

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questions about trade between the United States and the European

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Union, what Angela Merkel is doing about the economy, those things are

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of great interest to other countries. The French will steal

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actual industrial secrets and give it to their national champions.

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Trying to understand what another delegation is doing in trade talks,

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that is state to state stuff. I think it is true that everyone has

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been spying on everyone else for as long as they can get away with it. I

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think perhaps the German sensitivity on the subject given the second

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World War is different to the attitude in America. In America

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security forces are not looked at as such evil things. It is,

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fundamentally, one more thing that makes Europeans think the Americans

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are not like them and that is a dangerous thing in the long one. I

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do not think President Obama will be winning a Nobel Peace Prize any time

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since. When you add this to discussions about whether drones are

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illegal, the issue with Syria, the Americans cannot get their budget

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passed in any intelligent fashion, this is the kind of long`term change

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you have to worry about. President Obama is pivoting to Asia, but he

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has to worry about whether the fundamental understanding between

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Americans and the Europeans that they are on the same team is

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protected. Germans are wondering particularly whether these spying

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services mean that Germany has fallen down a peg or two on the

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ladder. It is not just the Germans. The French are doing it. Everybody

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is doing it. This is what Spies do. The Americans have greater

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capabilities. We no longer differentiate well between enemies

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and friends. Friends have always spied on one another. It is just the

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fact it has come out. Exactly. The EU line was that this is a breach of

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trust, and trust is important in our relationship if we are going to

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cooperate in terrorism and other things. It is a very fair point. It

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is good that this is not a terrorism story. People say, everything is

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acceptable in the fight against terror. This has nothing to do with

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terror, but it is economic and industrial. It is important not to

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forget about Brazil, and what happened with the Brazilian

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president. She made her entire General Assembly speech about this

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and called it a breach of international law. It was

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interesting because there were quite a few Europeans who thought, yes of

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course she is upset, but they did not give it much thought until it

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hit home. The fact the Brazilian president cancel the only state

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dinner that President Obama had set up this year because of this

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fallout. This is about where America stands in the world and is it

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getting too big for its own good in terms of surveillance. Or too

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paranoid. On the other hand, we do not hear about the successes. Let's

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say this is hoovering up on a large scale, at the hoovering of cold data

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has actually led to picking out terrorists. `` cold data. There is a

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lot more cooperation underneath this. There is a lot going on that

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the Americans can do that is useful, but we will never really

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understand it in the public realm because they cannot talk about it.

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Picking up on that, it is interesting how grown`up everyone

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has been about this after the public outrage. One of the thing that was

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feared was that these trade talks between the United States and Europe

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would be affected. It was not. The notion intelligence cooperation on

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things like terror would be affected, that is not happening. In

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a way, it is kind of a performance where people have to be indignant.

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The Americans have to be contrite, for political reasons. The elephant

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in the room is not so much whether governments are spying on one

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another, it is this technological change, on such a huge scale and it

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is not just governments. Any numerous teenager anywhere in the

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world could probably hack into Angela Merkel's mobile phone. Edward

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Snowden can get this all into the public sector. Spying is not buying

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any more. I was going to make a point, which is there is a great

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deal of outrage about the thought that people all over the world may

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have their information hoovered up. When it's comes to governments, is

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it a bad thing to know what government is really up to? Does it

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not make the world potentially safer to have spying going on and finding

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out what they really think? It does, and there are historical examples.

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The peace agreement between Egypt. The end of the Cold War, a lot of

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that was accelerated by enemies getting better intelligence and in

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the Soviet's case, they found the Americans did not have plans to

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launch offensive strikes against the Soviet Union. There were new

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assessments of the military disposition in Egypt that allow the

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Israelis to reciprocate. In that sense, you're absolutely right.

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Greater transparency is are a good thing for a nation state. But it

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begs the question whether you need embassies any more. It cannot be

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just old data, it is acceptable to be monitoring because you have to

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know what information is useful in the fight against terror or any

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other national interest. I think it is important to make sure you have

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all that intelligence gathering, as it has always happened. Angela

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Merkel, or 70 million citizens of one country or another are being

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monitored. What is the protection side? They are not yet monitored,

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they are hoovered. But they have the capability. The world waits to hear

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the transcript of Silvio Berlusconi's phone calls! The

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company which owns the giant petrochemical works and oil refinery

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in Grangemouth moved its base to Switzerland in 2010 where taxes are

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lower. This week they threatened to close half of the plant. Governments

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are often helpless to set industrial policy and collect taxes in how they

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used to. The plant has been saved and people are pleased that jobs

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appear to be safe. Maybe for a generation. Is this a sign of where

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we are in this recession that in order to keep your job you have to

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keep `` you have to take a pay cut. A lot of people know this has been

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the story of their lives for a couple of years. Is this a news

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story? The acceleration of manufacturing to more low`cost

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locations, this is not a new story. The factors in this case where that

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unions seem to overreach and there was a particularly tough boss. He

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figured out the mechanics of this and how to put pressure at the right

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time. That kind of hardball negotiation between employers and

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unions has a long, traditional history in this country. I think the

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next step is not just industrial jobs are easy to migrate, but

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service jobs. You can have call centres in India doing the work, you

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can have legal research being done in the Philippines. Legal

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secretaries are now doing it in other low`cost locations. And all

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other kinds of jobs like salespeople, lots of the jobs people

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have had an industrial countries are much easier and cheaper to do on the

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end of a fibre`optic pipe. I do not think we are going to be able to

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have the governments figure out a way of stopping the flow of jobs to

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cheaper places, that is just what current global capitalism, and

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capitalism as we can see it is going to be. What government can do is

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make their country attractive and work against having tax havens. They

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can coordinate tax policies so it is not so easy to go to Switzerland.

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And the money can come in for long`term investment to things which

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make your country were living in. I do not know what else governments

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can do to stop people going further ashore. Written's GDP seems to have

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gone up quite healthily. At the same time, a lot of people say, and the

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Labour Party certainly says, people are still hurting because wages have

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not gone up. Ed Miliband is `` is onto something. This notion of the

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squeezed middle and the fact that living standards are not keeping

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pace with inflation, low though it is, is obviously of political

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concern to the government. They are looking for a way to respond. What

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is fascinating about this, and Grangemouth is part of the story, is

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there are going to be two competing narratives at the next election, it

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would appear. The Labour narrative is the old Ronald Reagan to Jimmy

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Carter debate, are you better off than you were four years ago? And

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the government line is Bill Clinton, it is the economy. Would you trust

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these guys to take it over. It will be fascinating to see who wins out.

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The interesting thing about Grangemouth is, on one hand

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Scotland, if you were the First Minister of Scotland you could take

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credit for having a big part in saving this facility. And good on

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him. If you are an ordinary Scottish voter, for instance with

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independents coming up for a referendum vote, do you not feel a

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little bit more vulnerable to the forces of the international economy?

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And also RBS and the bank of Scotland were bailed out by

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taxpayers money. Can I come back to your original question about whether

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it is fine to safeguard jobs. That is not the whole story. Jobs have

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been saved on conditions of pegging your earnings. Your earnings have

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been pegged. The Labour argument about the cost of living outpacing

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any advantages you may gain from safeguarding your jobs. But it is

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better to be employed. Other jobs are being saved along the same lines

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and the dignity of life spent under such conditions is being slowly but

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surely impaired. That has not been answered yet. The issue of employees

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feeling vulnerable and employers feel they can negotiate much tougher

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deals, unions have been weakened and that will also

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deals, unions have been weakened and that will play out in the next

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election. And the relationship with Labour, also, especially for Unite.

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As long as unemployment is still high, and as long as people feel

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there are not that many jobs to go around, partly because it's easy to

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relocate somewhere else with cheaper wages and so forth, we will have

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this problem. It comes in different forms but, we have to do is think

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about how much can you do job protection in a globalised economy?

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To be fair, you can't. So you're going to do think about how to

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create new jobs and the of smaller businesses. It's the reality, that's

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what's going to do the main employment because the big global

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corporate will go where they can make more money. The allied question

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is skittles because the kinds of jobs there will be require an

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education system that turns out young people, retrain people, who

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are in businesses that have gone south or abroad, to be competitive.

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That's a huge investment, complex. And long term. A recent survey in

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England suggested actually 22nd in literacy and numeracy in 26

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countries, which is not great. Except the people doing it couldn't

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add up. OK, let's move on. Everyone knows energy is increasingly

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expensive and the politics of energy are increasingly difficult. This

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week, the former British Prime Minister John Major suggested the

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government could introduce a windfall profit tax on energy

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companies. Is that the best way to deal with the problem? What do you

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think? There is clearly a problem and everybody recognises that, but

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there is now a lot of different solutions. It's been very

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interesting hearing from different conservatives how they would deal

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with the problem. Of course, we had David Cameron saying if British Gas

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is raising prices, you should just go and change to another competitor,

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which is capitalism. You have to do try to go for what the consumers

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actually would want but, in reality, everybody is raising

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questions so it's not a solution. Then John Major interestingly saying

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there should be a windfall tax and I agree with that. I think there is a

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benchmark, if companies are making more than was expected, there should

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be an extra tax, but it comes back to, in this current economic system,

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that's not really favoured because the people who actually have it

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within their remit to make that decision are often benefiting from

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the actual system. But also, another interesting energy story has been

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the fact the UK will build a new nuclear power plant with the Chinese

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investments. Again, we see the politics of it, not only the

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economic scum of energy, which is impacting the UK in different ways

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as we see, of course, less reliance on domestic resources. There is the

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Ed Miliband idea you can cap energy prices, which some people have

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ridiculed because there is a world market. Others have said it might

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work. The Scottish Government is thinking of doing, if they win the

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independence referendum, pay for green levies out of general

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taxation. Slightly more compensated than that but that's basically it.

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They are scrabbling around to try to hit an outrageous system where we

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have to pay a lot of money. And also the fact the increases are so much

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higher than inflation so when you are looking at 10% increases, for

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your energy bill, at a time when wages are not going up at all, let

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alone by 5%, so there's definitely a problem. Nobody has found a solution

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and that's why there's so many different ideas being thrown around.

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As we get closer to the election, some will try to make a very

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compelling promises, for example, capping prices. It can't be done

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because the regulator for energy prices impose that, so what role can

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government play? What are the politics of this? Ed Miliband also

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says what is needed is restructuring the energy market. Pretty much

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everybody agrees with that. Politics is fascinating that Ed Miliband hit

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on a winner with identifying the issue. Even most of his own party

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recognised this price freeze is not workable, and some people would

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argue one of the reasons we got this precipitous increase in price by the

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big six, at this stage, is in anticipation of a freeze. That may

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be true, but people might blame the current government even though it

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was caused... But in terms of the politics, I agree with you. Labour

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is on to something. The issue, what I find politically fascinating about

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this, is the one thing that might be a game changer, and what is needed

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is a long`term market solution. None of these things, not even John

:22:20.:22:23.

Major, although if the most workable, the windfall tax, deals

:22:24.:22:30.

with the fact that you need are ready and affordable and stable

:22:31.:22:35.

supply of energy. If you gave that check list of someone in the USA

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now, they would say fracking. They would say shale gas which has

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transformed the American market. But there is this English tradition of

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things like fracking is fine as long as it is not in my backyard. I've

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see another political problem here, a potential wedge in the coalition

:22:56.:22:58.

because the Conservatives are thinking about when it comes to

:22:59.:23:03.

reducing prices, perhaps to withdraw the green levies or some of it. They

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are certainly reviewing it. There is a potential conflict here as we come

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to the next election. It could be sleight of hand, they could put on

:23:16.:23:19.

general taxation. Like the Scottish, pay for differently. Also there are

:23:20.:23:25.

new consumer nations like Japan who are now also moving off atomic

:23:26.:23:33.

energy altogether. The energy companies are arguing for the

:23:34.:23:37.

increasing their prices. What is happening in Germany now because

:23:38.:23:41.

Angela Merkel has abandoned a new programme? It's uncertain. It's an

:23:42.:23:45.

enigma wrapped in a mystery how we will confront the energy supply for

:23:46.:23:49.

the future and at what price? By the way, the price is a question in

:23:50.:23:53.

England, to force we don't know whether the Chinese will actually

:23:54.:23:59.

help reduce the price. We are trying to find a way to make energy

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affordable but haven't found the answer yet. We are in uncharted

:24:04.:24:11.

territory. Normally we have figured out 2000 steps in the future. That

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is one Angela Merkel's impetuous decisions. I imagine that's what was

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behind it. It was so out of character. The Americans. Where is

:24:25.:24:32.

the USA on this? Fracking is seen as what? The holy Grail? No more

:24:33.:24:39.

independence on imported oil? The environmental concerns, although

:24:40.:24:42.

there are some, seem to have been muted. The wholesale price of gas is

:24:43.:24:49.

coming down. It's competing, the price of coal and oil has come down.

:24:50.:24:54.

Manufacturing can I be done more cheaply than before. It's a good

:24:55.:24:58.

thing for the USA. It doesn't cost global warming. You have all the

:24:59.:25:05.

space in the world to do these things. We all breathe the same air,

:25:06.:25:12.

as Jack Kennedy says. It reminds the British rail, the energy situation

:25:13.:25:15.

here, you don't know who was responsible for what. A big

:25:16.:25:19.

investment is needed for energy systems. I have changed my supplier

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that I have no idea who these people are? What relation it has world

:25:25.:25:31.

prices. I can't figure out 95 options of tariffs. You need a Ph.D.

:25:32.:25:36.

. It's mind numbingly dull. Who is Ofgem, the regulators? In some

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American states the public voting for regulators to have some sense

:25:44.:25:50.

somebody is minding the store. Here, various companies, who are these

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people? More political control and transparency is needed. Perhaps we

:25:57.:25:59.

should bugs and find out what they are doing. That's it from Dateline

:26:00.:26:02.

London for this week. We're back next week at the same time. You can

:26:03.:26:05.

comment on the programme on Twitter. Goodbye.

:26:06.:26:32.

Hello there. This could be a good weekend for enjoying the autumn

:26:33.:26:37.

colours before more leaves are stepped from the trees. Wild weather

:26:38.:26:42.

in Monday. A weather warning in place of central and southern

:26:43.:26:47.

England and Wales. 80 mph wind possible on Monday which will cause

:26:48.:26:50.

potential travel and power disruption as well. Low`pressure

:26:51.:26:57.

blossoming to live this morning after East Coast. Watch on Sunday

:26:58.:27:03.

how it deepens. The isobars tighten. On the southern flank we will see

:27:04.:27:06.

some damaging gusts, so the

:27:07.:27:08.

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