05/10/2011 Newsnight


05/10/2011

David Cameron re-wrote his conference speech at the last minute to omit a call on households to pay off their credit cards. Newsnight picks through the detail of what stayed in.


Similar Content

Browse content similar to 05/10/2011. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

It's the threat of another banking crisis, and not a speech to a huge

:00:11.:00:13.

conference hall that keeps political leaders awake at night.

:00:13.:00:17.

Is there a plan to stop another crash? How close are we to a

:00:17.:00:22.

banking meltdown? And is there a way to prevent it? With Greece in

:00:22.:00:24.

turmoil once again, the markets seem to think that Europe's leaders

:00:24.:00:28.

are about to act. But is that just wishful thinking?

:00:28.:00:33.

We discuss who's going to default, who's going bankrupt, and who's

:00:33.:00:36.

left carrying the can. Meanwhile, the Prime Minister

:00:36.:00:41.

shares with us his views on borrowing. The only way out of a

:00:42.:00:44.

debt crisis is to deal with your debts.

:00:44.:00:48.

And on mortgages. Because the lenders won't lend, the builders

:00:48.:00:53.

won't build, and the buyers can't buy. We're going to sort this out.

:00:53.:01:01.

So are we supposed to borrow money or not?

:01:01.:01:04.

The Syrian Government lets Lyse Doucet into the town where soldiers

:01:04.:01:07.

have clashed with protestors, there is no problem at all. We haven't

:01:07.:01:11.

talked to one person in Duma. We haven't spoken to a single person.

:01:11.:01:19.

You want us to go, OK, we're going. Also tonight, the moods of the time,

:01:19.:01:24.

and music of the time. You know I hate rembering, I can't bear it, it

:01:24.:01:31.

is all past, you know. Brian Eno, veteran musician and

:01:31.:01:36.

record producer is here to talk about what these horrible economic

:01:36.:01:45.

circumstances might do for modern music.

:01:45.:01:49.

The British news machine was focused on Manchester today.

:01:49.:01:53.

Dutifully dancing attendance on the Prime Minister's speech to the

:01:53.:01:57.

Conservative Party Conference. But decisions of much more importance

:01:57.:02:00.

than anything announced there, were being mulled over elsewhere. For

:02:00.:02:05.

the crisis in the euro has now become a banking crisis. And the

:02:05.:02:09.

possibility of a catastrophic collapse had the German Chancellor

:02:09.:02:18.

promising today to shore up banks the European Union muttering about

:02:18.:02:24.

similar and the sper national monetary - International Monetary

:02:24.:02:28.

Fund talking about getting involved. Is there any plan emerging to shore

:02:28.:02:32.

up the banks? Four months ago, in the middle of the last Greek crisis,

:02:32.:02:36.

I remember being briefed by people close to this action that there was

:02:36.:02:40.

a danger of another Lehman Brothers. If we let Greece default it would

:02:40.:02:43.

shoot through the system and cause another Lehman Brothers. Four

:02:43.:02:48.

months on, all the signs are that many of the stresses in the system

:02:48.:02:52.

are higher than they were when Lehman collapsed. There was a

:02:52.:02:56.

danger, it is not inevitable, that we could have a similar kind of

:02:56.:03:00.

crisis, at more or less any moment. Against this you have to judge what

:03:00.:03:03.

the actions are. There are just three things that need to be done.

:03:03.:03:07.

Greece needs to be sorted out. It is either defaulting or not

:03:07.:03:11.

defaulting. But there is a committee chewing its pen sit,

:03:11.:03:15.

right now in Athens, deciding - pencil, right now in Athens

:03:15.:03:20.

deciding whether or not to do that. The banks need to be recapitalised,

:03:20.:03:24.

someone needs to say there is a plan, not what it is, just a rough

:03:24.:03:27.

outline and people agree it. That too, we have not had that today.

:03:27.:03:33.

Then the big countries, bubbling on the edges, Spain and Italy, which

:03:33.:03:36.

have more structural problems, not so urgent as Greece, but probably

:03:36.:03:40.

bigger. Somebody needs to work out what is to be done about them. I

:03:40.:03:46.

just, with protestors on the streets of Wall Street, protests

:03:46.:03:52.

going all over America, not yet on the scale we see in Greece and

:03:52.:03:58.

Italy, but people generally expressing their disquiet. The

:03:58.:04:05.

short answer is today's been almost day of inaction and going backwards.

:04:05.:04:11.

The bad news drips out day by day, Greece set to miss its budget

:04:11.:04:15.

target. Dexia, the Belgium bank, in trouble, Italy downgraded, and

:04:15.:04:20.

ominously, the bad news flow is speeding up. Faced with the dlet of

:04:20.:04:27.

a Greek debt default, the banks most exposed are showing. It is

:04:27.:04:31.

Dexia, based in Belgium, but so big it would have to be bailed out and

:04:31.:04:36.

broken up with French help. Dexia is not a very big bank. It is

:04:36.:04:41.

partly French and partly Belgian. There is doubt about which country

:04:41.:04:45.

stands behind it. It has a lot of exposure to sovereign debt,

:04:45.:04:48.

particularly Greece. There are reasons to worry about Dexia, on

:04:48.:04:51.

its own it is small. The bigger concern is people will start to

:04:51.:04:54.

worry about other banks, they are even talking about Deutsche Bank,

:04:54.:04:58.

the biggest bank in Europe. Next in the firing line, French banks, and

:04:58.:05:04.

they are not just exposed to Greece. This is a mesh of the default risk

:05:04.:05:07.

This is a mesh of the default risk faced by 25 major global banks. It

:05:07.:05:12.

is higher now than in 2008, that reflects fears of a global slowdown,

:05:12.:05:16.

a second credit crunch, and political paralysis. Suddenly there

:05:16.:05:22.

is talk of bank recapitalisation, as in 2008, a mixture of Arab and

:05:22.:05:27.

far eastern billions and state bailouts. Who will organise it?

:05:27.:05:32.

Chancellor Merkel today came round to the idea in principle.

:05:32.:05:35.

TRANSLATION: The German Government, as the Finance Minister has made

:05:35.:05:39.

very clear in the last two days, stands ready to implement such a

:05:39.:05:43.

capitalisation of the banks if it is needed. We need criteria, we are

:05:43.:05:46.

under time pressure wrecks need to make a decision quickly. The IMF

:05:46.:05:51.

seemed to make a decision today. It volunteered to pile in, alongside

:05:51.:05:58.

Europe, and start rescuing banks Europe, and start rescuing banks

:05:58.:06:02.

itself. There are many other possiblities that are now opened up

:06:03.:06:09.

by this new model for the FSF that we could envisage and we would be

:06:09.:06:13.

ready to make that role. Like ourselves, many other private

:06:13.:06:17.

investors. This is revolutionary, creative, thought the journalists.

:06:17.:06:23.

Within hours, the IMF had retracted the proposal. Moody's last night

:06:23.:06:26.

downgraded Italy's credit rating by three notches, and gave three

:06:26.:06:30.

reasons. And again, it is down to more than just Greece. They cited

:06:30.:06:35.

the increased risk that Italy would default, the downturn in the global

:06:35.:06:40.

economy, and political leadership uncertainty. A sideswipe at Silvio

:06:40.:06:47.

Berlusconi's chaotic Government. Shows at the centre of the 2008

:06:47.:06:50.

bailout are exasperated at the foot-dragging and inaction. They

:06:50.:06:55.

need to understand the lessons we learned in 2007/08. The first is,

:06:55.:07:00.

act very quickly, secondly, overshoot market expectation,

:07:00.:07:09.

thirdly, act comprehensively, seal off all the avenues of attack, and

:07:09.:07:12.

lastly, don't disagree with each other in public. They haven't

:07:12.:07:16.

learned one of those lessons. Greece it is a deluge of rhetoric,

:07:16.:07:20.

protest, tear gas, and economic pain. Few doubt where it will end.

:07:20.:07:27.

Really, Greece is in a situation where it is insolvent, and the deal

:07:27.:07:31.

agreed on its behalf with banks is insufficient to make it solvent. So

:07:31.:07:35.

it needs to have a further restructuring. They need to

:07:35.:07:40.

actually have a firewall between Greece, which is insolvent and

:07:40.:07:44.

Italy and Spain, which has liquidity issues. So it has been

:07:44.:07:49.

another day of rioting andify finance, with nothing solved, and

:07:49.:07:52.

very - at high finance, with nothing solved and very few

:07:52.:07:56.

questions answered. Joining us now is Lord Myners, the

:07:56.:07:59.

former finance secretary, who organised the recapitalisation of

:07:59.:08:03.

the banks here in 2008, Tracey Corrigan, editor of the Wall Street

:08:03.:08:07.

Journal, Europe, and from our studio in Washington, we're joined

:08:07.:08:11.

by the kpwheist, Dr Robert Shapiro, who advised President Obama, and

:08:11.:08:15.

now the IMF. How close are we to banking

:08:15.:08:19.

meltdown? We are already in a banking crisis, demonstrated by the

:08:19.:08:22.

fact that banks are no longer able to finance themselves, many of them

:08:22.:08:26.

in the short-term markets, they are having to rely on the European

:08:26.:08:34.

Central Bank. The closer we get to that abyss the more concrete the

:08:34.:08:40.

plan will be that the Government, that the IMF or EFSF, will have to

:08:40.:08:45.

come up with to convince the market we are not about to go into a

:08:45.:08:48.

meltdown. Robert Shapiro, how does it look from where you are?

:08:48.:08:52.

looks very serious, there has been an underlying problem from the

:08:52.:08:55.

beginning, that is a monetary union can only survive if the full faith

:08:55.:09:00.

and credit of the union is behind the full faith and credit of each

:09:00.:09:05.

member. The problem for the eurozone is there are only really

:09:05.:09:09.

about six members, and only one large one, who have really sound

:09:09.:09:17.

full faith and credit. The problems have really outpaced the capacity

:09:17.:09:22.

of the eurozone's arrangements to address them. So consequently they

:09:22.:09:27.

have to go to more radical reforms. So, just leaving the question of

:09:27.:09:32.

the reform of the euro, to one side, looking specifically at the banking

:09:33.:09:36.

crisis which this has developed into, Lord Myners, you were in

:09:36.:09:41.

charge of the recapitalisation of the banks in 2008, what should be

:09:41.:09:45.

done? Decisive action. Without any further delay. In this type of

:09:45.:09:49.

situation, if you delay, it becomes more costly. The banks need a

:09:49.:09:56.

significant increase in capital. A minimum of 50 billion euros,

:09:56.:10:01.

possibly as much as 150 billion. Plus more liquidity and decisive

:10:01.:10:04.

action by the regulators to agree some new common standards about

:10:04.:10:10.

capital. The key thing is to move with determination and with a

:10:10.:10:13.

comprehensive programme. It is very interesting f it is as plain as the

:10:13.:10:17.

nose on your face, why hasn't anyone done it? Because none of the

:10:17.:10:22.

political leaders want to have to tell Tony Blair tax-payers that

:10:22.:10:26.

once again they are car - to tell their tax-payers that once again

:10:26.:10:30.

they will be carrying the can for this. What do you think? It is not

:10:30.:10:34.

just the money, they have to come up with a set of arrangements,

:10:34.:10:42.

which will assure global investors that if the problems in sovereign

:10:42.:10:46.

debt continue that there will be, that there is access to a great

:10:46.:10:50.

deal more money. The amount of money required to recapitalise at

:10:50.:10:56.

this point, may be a small traction of what would be required if we had

:10:56.:11:00.

a - fraction of what would be required if we had a full blown

:11:00.:11:04.

crisis on Italian and Spanish sovereign debt. Is there enough

:11:04.:11:09.

money physically to do it, Lord Myners? This would require the

:11:09.:11:14.

combined resources of national treasures, the union Financial

:11:14.:11:23.

Stability Facility, and the IM - national treasure rees, the

:11:23.:11:26.

European Financial Stability Facility, the IMF is not willing to

:11:26.:11:29.

step in and provide funds, the Governments have to say they will

:11:29.:11:33.

be there with capital and compel the banks to take capital. That

:11:33.:11:37.

means tax-payers? Yes. It is interesting the IMF is talking

:11:37.:11:44.

about coming into it, if reluctantly, there is clearly a

:11:44.:11:48.

worry that the eurozone won't get it sorted out and may need the IMF

:11:48.:11:55.

as a backstop. Who are the main problem makers, let's Naimos?

:11:55.:11:59.

structural, you have to get - name names. It is structural. You have

:11:59.:12:04.

to get all the countries to agree. In the turnt extension of the EFSF,

:12:04.:12:10.

that is going on at the moment, we are waiting for a vote in Slovakia,

:12:10.:12:14.

where a junior partner in the coalition is holding things up.

:12:14.:12:24.
:12:24.:12:25.

Let's suppose political leaders remain resistant, what happens?

:12:26.:12:29.

they cannot address this in a credible way, I believe within two

:12:29.:12:33.

to three weeks we will have a meltdown in sovereign debt, which

:12:33.:12:37.

will produce a meltdown across the European banking system. We are not

:12:37.:12:41.

just talking about a relatively small Belgium bank. We are talking

:12:41.:12:45.

about the largest banks in the world, the largest banks in Germany

:12:45.:12:49.

and France. That will spread, it will spread to the United Kingdom,

:12:49.:12:53.

in part through sovereign debt problems in Ireland, it will spread

:12:53.:12:57.

everywhere because the global financial system is so

:12:57.:13:02.

interconnected they are each, all the banks, counter parties to every

:13:02.:13:06.

significant bank in the United States and Britain, Japan, and

:13:06.:13:10.

around the world. This would be a crisis that would be, in my view,

:13:10.:13:19.

more serious than the crisis in 200. - 2008. Is he exaggerating? I wish

:13:19.:13:23.

I could give a more cheerful complex. We are on the verge of a

:13:23.:13:27.

perfect storm. A number of European countries cannot raise money, banks

:13:27.:13:29.

are therefore increasingly worried about the default, therefore people

:13:29.:13:33.

won't lend money to banks, therefore banks won't lend money to

:13:33.:13:37.

business. Something has to be done. It has to be done substantially

:13:38.:13:42.

across the whole of Europe. If you do it individually, country by

:13:42.:13:47.

country, you simply shift the focus from one bank to another. That is

:13:47.:13:53.

why in October 200, we obliged all UK banks to increase capitalisation.

:13:53.:13:59.

We are often accused, journalists of being apocalyptic, this is an

:13:59.:14:03.

apeople lips. What happened to the spirit of the G20? You can still

:14:03.:14:08.

see a way round this, on a more positive note. You can still see a

:14:08.:14:13.

way of taking concerted action which would now, the banks have

:14:13.:14:16.

short-term funding, they can get short-term funding from the

:14:16.:14:19.

European Central Bank. There is not an immediate liquidity crisis. If

:14:19.:14:23.

we get a situation where the banks are recapitalised, and the Greek

:14:23.:14:26.

situation sorted out, and the markets convinced that Spain and

:14:26.:14:31.

Italy, which are really the big ones, will get through this, even

:14:31.:14:35.

with some trouble. If we can push things out a couple of years until

:14:35.:14:40.

that happens, it can still be averted. Are we talking about a

:14:40.:14:43.

crisis that affects, apart from the taxpayer, who has to pay out if

:14:43.:14:47.

action is taken. If the banks go under, does it affect ordinary

:14:47.:14:50.

people? It will have an effect on economic activity. It is worthwhile

:14:50.:14:55.

saying that the UK banks are pretty strongly capitalised. This is not a

:14:55.:15:01.

problem for UK and Scandinavian banks. You have already heard Dr

:15:01.:15:05.

Shapiro say it will affect UK banks? It will affect the UK

:15:05.:15:08.

economy, which is why we have an interest in the economy. The UK

:15:08.:15:11.

banks n relative terms are very well capitalised compared with most

:15:11.:15:16.

European banks. Well, what we don't know, we do know, for example, in

:15:16.:15:20.

the United States, there is relatively, our banks have

:15:20.:15:22.

relatively little exposure to European sovereign debt. They have

:15:22.:15:27.

been getting rid of those holdings for a year. However, no-one knows

:15:27.:15:32.

the state of credit default swaps held by these institutions, again

:15:32.:15:37.

sovereign debt, and against European banks. Nor do we know the

:15:37.:15:41.

state of Credit Default Swaps held by British banks. Nor are we

:15:41.:15:47.

certain of how serious the exposure of British banks is to the Irish

:15:47.:15:52.

sovereign debt problems. What needs to happen night now, Lord Myners?

:15:52.:15:56.

Very significant agreement across Europe to recapitalise the banks.

:15:56.:15:59.

This problem can be solved, it is within the wit of man to do t but

:15:59.:16:03.

it requires the political will of Europe's leaders to agree a

:16:03.:16:07.

programme as soon as possible. Thus far we haven't seen it, have

:16:07.:16:11.

we? No, they are talking in more urgent terms about the plan for the

:16:11.:16:15.

plan, but we haven't got the plan yet. We need to get that now.

:16:15.:16:22.

Thank you very much. We really need two things, not only

:16:22.:16:26.

to recapitalise the banks, even more crucially we have to come up

:16:27.:16:31.

with a credible plan to preserve the stability of the sovereign debt

:16:31.:16:35.

of Italy and Spain. Thank you very much.

:16:35.:16:38.

The main political conference season came to an end today with

:16:38.:16:44.

David Cameron's speech to the one ten thousand nt of the electorate

:16:44.:16:49.

who spent the last few days in Manchester. There was some old,

:16:49.:16:57.

some new, some borrowed and everything washed in blue. A work

:16:57.:17:01.

aday speech, for a work aday crowd. He said there was no money for

:17:02.:17:06.

fireworks, so he asked people to imagine a fireworks display in the

:17:06.:17:08.

future. At party conference top politicians

:17:08.:17:12.

get photographed all day long, the leader's speech, his opportunity to

:17:12.:17:17.

give us his picture. The Chancellor, of course, knew what he was going

:17:17.:17:21.

to say, as party members queued to get in, they could read the preview

:17:21.:17:25.

quotes handed out in time for this morning's newspapers. The whole

:17:25.:17:29.

purpose of the speech is, not to say anything, at least not to say

:17:29.:17:32.

anything startling or revalatory. We have been told to expect a

:17:32.:17:35.

restatement of main of the themes that we have heard from the Prime

:17:35.:17:39.

Minister many times before. The need to sort out the economy. If

:17:39.:17:44.

there is a change, it is simply going to be a tonal nudge, to put a

:17:44.:17:49.

bit more optimisim into the picture. So, you can imagine the

:17:49.:17:52.

consternation in the Prime Minister's camp, when it turned out

:17:52.:17:57.

he had, or his aides had, actually, said something. In briefings to

:17:57.:18:04.

journalists, which resulted in this headline. "Pay off your credit

:18:04.:18:09.

cards, for the sake of the economy". The quote says the only way to deal

:18:09.:18:13.

with the debt crisis is to pay off your debts. That means households,

:18:13.:18:18.

all of us, paying of the credit card and store card bills. This

:18:18.:18:24.

message is both ecomomically and politically difficult. Ecomomically

:18:24.:18:27.

because if everyone starts paying off their debts and spending money,

:18:27.:18:30.

as the Prime Minister appears to be telling us, we can kiss goodbye to

:18:30.:18:36.

a whole load of economic growth. It is what economists call the parodox

:18:36.:18:40.

of thrift. Politically it is difficult, because team Cameron

:18:40.:18:45.

know how bad it is to have a bunch of pretty well off people in

:18:45.:18:48.

cabinet, appearing to lecture the rest of us about what we should do

:18:48.:18:51.

with our money. Even as the seats were filling up,

:18:51.:18:55.

we were told the line was supposed to have described what was already

:18:55.:18:59.

going on. People were already paying back their debts, not, that

:18:59.:19:03.

this was the Government in some way, telling them what to do. In any

:19:03.:19:07.

case, we were told, the line was being we written. The Prime

:19:07.:19:10.

Minister's background was a blue sky obscured with clouds, it fitted

:19:10.:19:14.

with his core message on the economy. We need to tell the truth

:19:14.:19:19.

about the overall economic situation. People understand that

:19:19.:19:23.

when the economy goes into recession, times get tough. But

:19:23.:19:28.

normally, after a while, things pick up. Strong growth returns,

:19:28.:19:33.

people get back into work. This time it is not like that. People

:19:33.:19:39.

want to know why the good times are so long in coming. The reason, he

:19:39.:19:45.

said, was before we could recover, well we had to pay back debt. In

:19:45.:19:49.

saection containing the rewrit - a section containing the rewritten

:19:49.:19:55.

line about credit cards, Mr Cameron said borrowing more was not an

:19:55.:20:00.

option? Why, because it make us it more risky and the threat of higher

:20:00.:20:03.

taxes in future. The only way out of a debt crisis is to deal with

:20:03.:20:07.

your debts. That is why households are paying down the credit card and

:20:07.:20:13.

the store card bills. What had been a controversial line had become

:20:13.:20:17.

unremarkable. And no-one was surprised by Mr Cameron's pledge on

:20:17.:20:20.

the euro. As long as I'm Prime Minister, this country will never

:20:20.:20:25.

join the euro. Labour were blamed for the debt and criticised for not

:20:25.:20:28.

apologising. Public sector strikes were condemned, growth, Mr Cameron

:20:29.:20:32.

said, would come from the private sector. It needed, he said, a

:20:33.:20:36.

change to the planning laws. Mr Cameron said we needed a housing

:20:36.:20:40.

revolution to provide enough homes and enough lending for people to

:20:40.:20:45.

buy those homes. Some kinds of debt, it seems, are OK. Mr Cameron

:20:45.:20:51.

pledged to end, what he called, the scandal of barriers placed in the

:20:51.:20:55.

way of loving families adapting babies in care. And he said because

:20:55.:20:58.

gay marriage would strengthen family life, his party should

:20:58.:21:01.

support it. I don't support gay marriage in spite of being a

:21:01.:21:03.

Conservative, I support gay marriage because I am a

:21:03.:21:10.

Conservative. But mostly this speech was an

:21:10.:21:18.

exhortation, to believe in what he called the can-do spirit of Britain.

:21:18.:21:21.

No Britain ever had the largest land mass or richest resources, but

:21:21.:21:25.

we had the spirit. It is not the size of the dog in the fight, it is

:21:25.:21:29.

the size of the fight in the dog. Overcoming challenge, yes,

:21:29.:21:32.

confounding the sceptics, reinventing ourselves. We have the

:21:32.:21:35.

ideas and the people, and now we have a Government freeing those

:21:35.:21:39.

people, backing those ideas, let's see an optimistic future. Let's

:21:39.:21:43.

show the world some fight. Let us pull together, let us work together,

:21:43.:21:46.

and let us together lead Britain to better days ahead.

:21:46.:21:53.

APPLAUSE George what did you think of that

:21:53.:21:58.

speech? I thought it was fan tais particular, it struck the right now

:21:58.:22:01.

- fantastic, it struck the right note, all about leadership,

:22:01.:22:04.

optimisim. He won this over. He also spoke to the country. That is

:22:04.:22:08.

what we have been doing at this conference. The stuff about credit

:22:08.:22:13.

cards, was that poor drafting? he spoke what we have all been

:22:13.:22:17.

saying, this is a debt crisis, we need to deal with our debts, we

:22:17.:22:21.

understand you can't borrow your way out of debt, that analysis is

:22:21.:22:29.

shared by the British people. Mr Cameron's exit music was clearly

:22:29.:22:39.
:22:39.:22:40.

inspired by yesterday's called cat flap (Love Cats by The Cure)

:22:40.:22:43.

The Conservative conference ended for the year.

:22:43.:22:47.

Stop talking, there is an audience out there. James Forsyth, the

:22:47.:22:52.

political editor of The Speckor, and John McTernan, political

:22:52.:22:56.

adviser to Tony Blair. They were chewing the fat of what went on in

:22:56.:23:00.

the conference. You might as well continue for the benefit of

:23:00.:23:02.

everybody. Three major conferences over what do we know about the

:23:02.:23:08.

state of British politics then? know there is a complete absence of

:23:08.:23:10.

genuine analysis about the depth of the crisis we face in Britain,

:23:10.:23:14.

Europe and the world, and any actions that any of the leading

:23:14.:23:17.

politicians can sketch out in any detail, that could give people

:23:17.:23:21.

confidence that the political leadership have some project to

:23:21.:23:24.

lead. I think we also know that the mass membership political party is

:23:24.:23:27.

completely and utterly dead. It was striking today during David

:23:28.:23:30.

Cameron's speech how many empty seats there were. Empty seats

:23:30.:23:35.

during a leader's speech. The Prime Minister's speech. I mean, this is

:23:35.:23:39.

a new going to fringe meetings, most people who get up to speak

:23:39.:23:45.

come from lobby groups and NGOs. There is a real problem in politics.

:23:45.:23:47.

There were moments when Cameron improved his delivery during the

:23:48.:23:50.

speech, those were the moments intended to be clipped for

:23:50.:23:55.

programmes like this or the news. There is something really sad

:23:55.:23:59.

happening. Why is the BBC slavishly sending off dozens and dozens of

:23:59.:24:03.

people, why do you go there, and you go there, these are empty

:24:03.:24:08.

events? I think the time has come to say we don't need annual party

:24:08.:24:12.

conferences any more. We're the only political culture in Europe

:24:12.:24:15.

that has annual conferences. They have now run their course. There is

:24:15.:24:19.

no purpose for the speeches, there is no purpose for the meetings. If

:24:19.:24:27.

it wasn't for the lobbyists paying for the passes and sponsoring the

:24:27.:24:30.

fringes. The party is addicted to the money from the lobbyists and

:24:30.:24:33.

the fringe meetings. They never made policy in the Tory Party, or

:24:34.:24:40.

the Labour Party for 20 years have they? I think the end of the mass

:24:40.:24:42.

membership party also reflects John's point, that there is a lack

:24:43.:24:46.

of reality to a lot of this talk. There is also, I think, a problem

:24:46.:24:50.

of, the one speech at the Tory Party conference that soared a

:24:50.:24:54.

little bit was George Osborne. It actually had some explanation to

:24:54.:24:57.

people of what is going wrong with the economy, this is why this time

:24:57.:25:01.

it is different, and this is why we are not growing. That is what we

:25:01.:25:04.

need. That is the danger of politics at the moment, is it seems

:25:04.:25:07.

incredibly detatched from people's lives. That is, when you look at

:25:07.:25:12.

what is going on in Europe, this is going to...To Be fair to the

:25:12.:25:14.

politicians, it is not entirely their fault they are detatched from

:25:14.:25:17.

real life. A lot of the events, which are really going to determine

:25:17.:25:23.

how people live in this country, aren't within their gift any way,

:25:23.:25:26.

are they? I think one of the big criticisms of Cameron's speech

:25:26.:25:30.

today, is there was no sense of what Britain wants the eurozone to

:25:30.:25:34.

do, or the rest of the world to do. There was no sense of I'm going to

:25:34.:25:38.

get on the world stage and load. It was almost very much here is what

:25:38.:25:42.

we do while the rest of the world go to hell in a hand cart. We are

:25:42.:25:45.

in a difficult position in terms of the eurozone. You heard the chaps

:25:45.:25:50.

here a few moments ago, talking about this possible cat it is a

:25:50.:25:53.

trophy about to overwhelm us, we don't have dog in that fight, do

:25:53.:25:58.

we? It is not even having a dog in the fight. I think we should

:25:58.:26:05.

probably ban all metaphors about dogs, cats and fighting.

:26:05.:26:09.

You have Obama facing an election, Merkel facing election, Sarkozy

:26:09.:26:12.

facing election. The three biggest players in the G20, involved in

:26:12.:26:18.

this, are all in fear of their own electorates. So there is a bit of

:26:18.:26:20.

paralysis in other people's politics that is feeding through

:26:20.:26:27.

into this. In contrast, and I think Lord Myners was right, the contrast

:26:27.:26:33.

with 2008, in a global vacuum, actually Gordon Brown did something,

:26:33.:26:37.

he flew to the eurozone and told them what to do. He did take the

:26:37.:26:41.

space and said the world should orchestrate pumping in money and

:26:41.:26:44.

demand. The difficulty today is it is not clear to me that Gordon

:26:45.:26:49.

Brown, or Alastair Darling would know what to say or their like, let

:26:49.:26:52.

alone have the authority to say it to the eurozone. In the end

:26:52.:26:57.

somebody has to take leadership. That is what was odd about

:26:58.:27:00.

Cameron's speech. The leadership was the strap line, there was

:27:00.:27:04.

nothing to lead, unless it was making sure that people can use

:27:04.:27:07.

highlighters in classrooms without health and safety instructions and

:27:07.:27:11.

goggles. When it came to the details they were pathetic. What

:27:11.:27:16.

did you think about the cock-up over the question of credit cards,

:27:16.:27:21.

what does that tell us about the state of the party. It is a very

:27:21.:27:25.

small thing, but, if you are going to try to orchestrate the

:27:25.:27:27.

newspapers to go with a particular line, you better get it right,

:27:27.:27:31.

hadn't you? I think what it tells you is how politicians are

:27:31.:27:34.

struggling to explain. The metaphor for the Conservative Party like to

:27:34.:27:38.

use is the deficit is like the nation's credit card, you can't

:27:38.:27:41.

keep running it up and borrowing more and more money, because you

:27:41.:27:47.

have to pay higher interest and then you end up bankrupt. When they

:27:47.:27:52.

tried to fly it in the speech in the extracts, then they said are

:27:52.:27:57.

you telling everybody to pay for credit card, because that would

:27:57.:28:01.

suck demand out of the economy. And also this thing of David Cameron

:28:01.:28:05.

being a very wealthy man. I think it is simpler than that, they don't

:28:05.:28:10.

have a proper operation in Number Ten. So many people must have read

:28:10.:28:15.

that, before you brief a passage to the paper, the press team, the

:28:15.:28:20.

political team, policy team, number 1, they all have to see it. In the

:28:20.:28:25.

whole set of people that looked at it, they didn't see it causing a

:28:25.:28:30.

bad headline. There are people works closely with the Prime

:28:30.:28:35.

Minister that don't know how newspapers operate or language can

:28:35.:28:38.

be mest misconstrued. There is a failure at the head of the

:28:38.:28:41.

operation. If you brief it, it has to be in the speech.

:28:41.:28:46.

A woman came back from the dead today. Actually Syria put a woman

:28:46.:28:51.

on television, whom the regime claimed had been reported by

:28:51.:28:55.

foreign media as having been beheaded. Thus, they boasted, do we

:28:55.:29:01.

give the lie of the concerted campaign of subversion and

:29:01.:29:06.

terrorism being raged against the boufd leader accidental dictator,

:29:06.:29:09.

Bashar al-Assad. Western reporters who want to find out what is really

:29:09.:29:13.

going on there aren't allowed in. The authorities made an exception

:29:13.:29:17.

for our Lyse Doucet. Though quite how helpful this is to have the co-

:29:17.:29:27.
:29:27.:29:37.

operation of the regime is another Douma, a suburb of Damascus.

:29:37.:29:40.

An activist in Douma gave us this footage, showing clashes between

:29:40.:29:49.

troops and protestors. They say it has been going on for months.

:29:49.:29:54.

This is why we asked the Government for permission to visit Douma. It

:29:54.:29:58.

was the first place in Damascus to see protests.

:29:58.:30:03.

As we entered Douma, the mood changes. We start seeing soldiers.

:30:03.:30:09.

Look more closely, they are concealed in this olive grove. A

:30:09.:30:16.

car joins us, a group of men we are told know this neighbourhood, they

:30:16.:30:24.

will show us around. We ask to go to places where people

:30:24.:30:32.

gather. They take us to a filling station. We have been trying to

:30:32.:30:36.

negotiate with our escorts, as they are called, what we can see in the

:30:36.:30:39.

suburbs of Douma. It is clear they don't want us to see very much. It

:30:39.:30:43.

is the time of day when not a lot of people are out in the streets,

:30:43.:30:47.

but they still don't want us to go to the markets or places like this.

:30:47.:30:51.

They don't really want us to film here. It feels like a ghost town.

:30:51.:30:55.

We insist we have to meet people who live here. They insist we need

:30:55.:31:03.

to move on. Our next stop, a roundabout. Pretty,

:31:03.:31:06.

but deserted. We were hoping it was a gathering place so we can meet

:31:06.:31:14.

some of the people of Douma, but, in fact, it is pretty quiet here.

:31:14.:31:21.

We hear the call to prayer. Could we go to the main mosque? They say

:31:21.:31:26.

there isn't one. What does he want? You haven't done anything wrong.

:31:26.:31:30.

haven't finished Douma yet or talked to one person in Douma. We

:31:30.:31:34.

haven't spoken to a single person. You want us to go, please, please.

:31:34.:31:42.

OK, we are going. They tell us it is for our

:31:42.:31:47.

protection. Terrorists could attack us. We were told we had to leave

:31:47.:31:51.

immediatey, we weren't really told why. It is really frustrating. We

:31:51.:31:55.

were told by the Government we had to show the truth of the situation.

:31:55.:32:05.

But how can you do that when you can't even film.

:32:05.:32:09.

This may be what they didn't want us to see. This footage was filmed

:32:09.:32:14.

by activists. They say it is from the day we were there. A

:32:14.:32:24.
:32:24.:32:27.

demonstration, and then arrests. We can't do anything here.

:32:27.:32:31.

terribly sorry. We asked to go back. We are back in Douma again, after

:32:31.:32:35.

our last visit we complained to the Government, they have given us

:32:35.:32:43.

permission to return. We drive past the olive grove where

:32:43.:32:48.

soldiers still wait. We return to the roundabout where we had been

:32:48.:32:54.

told to leave. Last time we filmed trees and a flag. This time a palm

:32:54.:32:59.

tree is part of the story. Those are blood stains do you think?

:32:59.:33:03.

Syrian officials told us a bomb had been found here the day previous.

:33:03.:33:08.

They wanted us to see the work of what they called armed gangs.

:33:08.:33:13.

Around 1.15 pm yesterday, three officers were trying to dismantle a

:33:13.:33:18.

bomb planted here, unfortunately the bomb was being detonated from

:33:18.:33:23.

the remote. So the man who was trying to dismantle it, with his

:33:23.:33:29.

hands, has been split into two pieces. His compan and the other

:33:29.:33:35.

two were killed. - Companion and two others had killed. A man drives

:33:35.:33:41.

up on a motorcycle and said he hadn't heard an explosion. A crowd

:33:41.:33:45.

starts forming, there is confusion about what happened here. Why were

:33:45.:33:53.

they killed if it didn't destroy the tree? Hard one to answer.

:33:53.:33:58.

As the crowd grows there are more men in shell suits, shadowing us,

:33:58.:34:07.

talking on mobiles, listening in. At times like this, Damascenes, who

:34:07.:34:10.

don't have anything nice to say about the Government, don't say

:34:10.:34:14.

anything at all. Unexpectedly one man starts speaking. He wants to be

:34:14.:34:19.

heard and seen. He tells us his son was picked up by security forces

:34:19.:34:24.

yesterday. What was your son doing? Was he protesting? He said they

:34:24.:34:28.

were leaving the mosque, there was a demonstration outside. They

:34:29.:34:33.

weren't at t but they started shooting towards them. They were

:34:33.:34:36.

separated and he saw him being dragged away. His mother is crying

:34:36.:34:44.

looking for him. We will arrest him. Why did you

:34:44.:34:50.

decide to tell us your story? He said he was afraid now, but what

:34:50.:34:59.

will happen will happen. No armoured gangs? Look how quickly

:34:59.:35:03.

the crowd has gathered, they saw a foreign camera here and people

:35:03.:35:08.

wanted to tell their story, in fact this man is very brave to tell us

:35:08.:35:18.
:35:18.:35:20.

the story of his son who has been taken in.

:35:20.:35:25.

We head down the street to Douma's main mosque, we are immediately

:35:25.:35:34.

surrounded by young men. Suddenly it's a protest.

:35:34.:35:39.

Their voices carry. Within minutes security is on the way. A bus has

:35:39.:35:42.

just arrived with soldiers and yet they are still chanting, and they

:35:42.:35:47.

are not leaving. This is our weapon, they say, the

:35:47.:35:54.

camera is our weapon. Freedom, freedom. Freedom.

:35:54.:35:59.

wanted to stay to see how this would unfold, but we were told we

:35:59.:36:04.

must leave, there is a threat against us.

:36:04.:36:11.

But we don't miss everything. Soldiers to the left. Oh my God, oh

:36:11.:36:18.

my God. Oh my goodness. I can show you what

:36:18.:36:24.

is happening to the right of me, I can't show you, there are two green

:36:24.:36:28.

buses of soldiers pulling away from the square. They just flooded this

:36:28.:36:33.

area moments after we were here, and people were criticising the

:36:33.:36:40.

Government for arresting and shooting at people. As soldiers

:36:40.:36:46.

move down the street, our second visit comes to an end.

:36:46.:36:49.

We are leaving Douma now, but unlike all the other places we

:36:49.:36:54.

visited during our time in Syria, we leave knowing what people think,

:36:54.:36:58.

because they told us. This horrible feeling, we don't

:36:58.:37:08.
:37:08.:37:13.

know what's going to happen to them We still don't know what happened

:37:13.:37:18.

to the people we met. Today some activists sent us this footage from

:37:18.:37:23.

Douma. We can't verify it, but it appears to show soldiers outside

:37:23.:37:32.

someone's door. Well now, back here, whatever

:37:32.:37:36.

solution is found to the current economic crisis, if indeed one can

:37:36.:37:39.

be found, we are going to be living in difficult times for a long while

:37:39.:37:45.

yet. Money, or lack of it, trust, or lack of it, hope or lack of it,

:37:45.:37:49.

shape our cultural world as much as they shape our politics. Pop Art

:37:49.:37:54.

and punk music, for example, are inacceptable from particular times.

:37:54.:38:00.

So what can we expect this unhappy era to throw up. Do hard times make

:38:00.:38:03.

good music or art? We thought it would be interesting to hear what

:38:03.:38:07.

Brian Eno, one of the world's foremost music producers and

:38:07.:38:17.
:38:17.:38:24.

writers thinks. Before we hear from It's Nick Clegg's one-time adviser

:38:24.:38:31.

on youth issues. In his own salad days, as the keyboard noodler-in-

:38:31.:38:36.

chief of art rockers, Roxy Music. His outfits were enough to catch

:38:36.:38:46.
:38:46.:38:47.

your eye, or even have it out! Don't think the roof's leaking down

:38:47.:38:53.

at Eno's lab, no it is the sound of ambient music. The composer has

:38:53.:39:01.

been applying his cool all can he me to this often misunder- alchemy

:39:01.:39:09.

to this often misunderstood genre. You think him of the music boffin,

:39:09.:39:15.

the musical genius of music. His CV is pretty impressive, starting from

:39:15.:39:21.

Roxy Music, his own wild and strange solo years, and then as a

:39:21.:39:29.

producer for multi, multimillion selling albums by people like U2

:39:29.:39:34.

and Coldplay it's a maverick genius burrowing around on the fringes of

:39:34.:39:37.

rock n' roll, producing some of the most interesting work of the last

:39:37.:39:45.

30, 40 years. Do grim times produce great music.

:39:45.:39:52.

Eno may be in a position to know. When he was producing David Bowi,

:39:52.:39:58.

he's lepbldly Berlin albums in the 1960s, Britain had strikes. In 1980,

:39:58.:40:02.

the year of Ronald Reagan becoming President, he was working with

:40:02.:40:06.

seminal American outfit, Talking Heads. The theory that poverty

:40:06.:40:10.

equals interesting culture, is not necessarily one I would like to

:40:10.:40:13.

pursue, I would rather people weren't poor. But obviously when

:40:13.:40:17.

you have a situation like this, it makes people angry, and it makes

:40:17.:40:21.

people frustrated if they are not depressed. And that means they are

:40:21.:40:25.

going to do something. Whether or not it takes the form of the riots

:40:25.:40:28.

that we have seen, or whether or not it takes the form of people

:40:28.:40:35.

making music, or whether or not it takes the form of other types of

:40:35.:40:39.

protest, music is great form of communication. I would always hope

:40:39.:40:42.

people would make music and will make music to accompany these hard

:40:42.:40:47.

times. I'm sure they will. It will be very exciting. As to how Brian

:40:47.:40:53.

Eno makes music with U2 and others, we sense it is not by turning all

:40:53.:40:59.

the knobs up to 1 he has been known to issue musicians with cryptic

:40:59.:41:03.

notes. Sometimes I write on bits of card, rhythm, melody, precussion,

:41:03.:41:08.

something like that. He has these cards that he invented that he

:41:08.:41:13.

would produce, and they would just have words on them, you know, like

:41:13.:41:19.

"blue" or "brain", or "tomorrow" or "side salad", I don't know what. He

:41:19.:41:26.

would produce the cards in the studio and the musicians have to

:41:26.:41:29.

play side salad or blue. It is a way of pushing people out of their

:41:29.:41:38.

box. Coldplay released an album, helmed

:41:38.:41:43.

by Mr Eno at the time of the banking crisis. That is the last

:41:43.:41:49.

banking crisis. Hmm, have we hit snag with the theory that troubled

:41:49.:41:53.

times bring forth great music. Ha ha ha had a.

:41:53.:41:58.

Well, you know, everybody has to pay the bills. And also, if you are

:41:58.:42:03.

asked to do something, it is very pleasant. And if you're asked to do

:42:03.:42:08.

something you often do it. I don't have a problem with Eno producing

:42:08.:42:14.

Coldplay or U2. He does plenty of other stuff besides that is

:42:14.:42:24.
:42:24.:42:25.

interesting. Eno remains endlessly inventive, his latest idea he calls

:42:25.:42:28.

generative music n which a computer sequences programmed sounds. I like

:42:28.:42:35.

it, but I'm not sure it is the Christmas number one. The chrome-

:42:35.:42:43.

domed maverick genius, or whatever is here. With side salad! How is it

:42:44.:42:46.

chrome-dome! This theory about difficult times making interesting

:42:46.:42:51.

music, do you buy it? I think difficult times make for good

:42:51.:42:56.

audiences. I think when times are difficult people are much more

:42:56.:43:00.

interested in art. They are much more interested in seeing things,

:43:00.:43:05.

in being challenged in new ways, in finding exciting new feelings. In

:43:05.:43:08.

comfortable times people aren't very much. Do you think it is

:43:08.:43:12.

happening now? Yes i do. I think there is much more live performance

:43:12.:43:17.

than there has been ever in my life. And of course, there are all these

:43:17.:43:25.

new arts that are appearing now. A lot of them internet based or ap-

:43:25.:43:29.

based. Which are really very exciting, that is the beginning of

:43:29.:43:32.

the future. I think the conventional art forms are losing

:43:32.:43:37.

their funding, in some respects, but creativity is a little bit like

:43:37.:43:42.

water, it seeps out wherever there is an outlet. You are talking about

:43:42.:43:46.

music being the expression of creativity, or is it border than

:43:46.:43:51.

music? Broader - broader than music? Broader. You have to look at

:43:52.:43:56.

all the new art forms, you have to look at 1911 and looking at the

:43:56.:44:00.

first films made. It is very difficult to imagine when you see a

:44:00.:44:07.

flickering train going into a station, that, that will turn into

:44:07.:44:17.
:44:17.:44:17.

Sit Zen Kane or something like that or Martin Scorsce. What other sort

:44:17.:44:23.

of things? There are lots of things called aps and a lot of people

:44:23.:44:27.

carry a computer in their pocket, means an artist has a new place to

:44:27.:44:31.

work. A lot of people are taking advantage of it, including me.

:44:31.:44:35.

you taking advantage at a visual level, a musical level, or what?

:44:35.:44:39.

Both of those things. Some how it is all scrambled up together?

:44:39.:44:43.

That is one of the things going on, the distinctions between the arts

:44:43.:44:47.

are starting to break down. Everything is much more power rus,

:44:47.:44:52.

it is possible to - porous, it is possible to work in a new landscape

:44:52.:45:01.

that is visual, musical and textual. And everything is available?

:45:01.:45:05.

Including the complete history of recorded art. One thing I notice

:45:05.:45:11.

with young musicians is their palate is enormously broad. They

:45:11.:45:18.

are able to bring in Dave Brubeck and Talking Heads and collageing

:45:18.:45:23.

them together. One of the problems an artist faces is to decide what

:45:23.:45:28.

form shall I work in, what am I doing. I didn't have that problem.

:45:28.:45:31.

I inherited the idea of being a particular type of musician and I

:45:32.:45:36.

expanded it a bit. I never was looking at 50 years past of music

:45:36.:45:44.

as my palate. They are all equally available and considered equally

:45:44.:45:50.

worthwhile, whether Dave Brubeck or Beethoven, or whatever? Do you know

:45:50.:45:54.

this term "open source" t refers to way of constructing and creating

:45:54.:45:59.

things, by sharing them. In a way, the whole cultural world has sort

:45:59.:46:03.

of gone open source. So that everybody is making things, making

:46:03.:46:08.

them available to be shared. As soon as they are digital, they are

:46:08.:46:12.

very shareable, it is very easy to bind together things that are

:46:12.:46:18.

already digital. This idea of open source, which sort of loses the

:46:18.:46:25.

idea of the artist as the primary controlling individual, and the

:46:25.:46:30.

artist becomes more like a member of a commune. So artists are

:46:30.:46:34.

working more and more in communities, and I think people are

:46:34.:46:37.

as well. Is there a particular type of sound that emerges from that

:46:37.:46:41.

sint sis at the end, in a way that you can associate punk, for example,

:46:41.:46:46.

with a particular time in our history? Well, I think, though I

:46:46.:46:53.

don't like to blow my own trumpet, that this idea of generative music,

:46:53.:46:58.

that I talk about, is something that will prove to be a feature of

:46:58.:47:02.

the future. The idea of the composer being more like a gardener

:47:02.:47:07.

than an architect. The vision of the composer traditionally is

:47:07.:47:10.

somebody who has the whole piece in their head and writes it down.

:47:10.:47:15.

Where as, I think, more and more what people are doing now, is

:47:15.:47:20.

assembling sets of musical seeds, and planting them, and watching

:47:20.:47:23.

them develop, watching them evolve. Both electronically and through

:47:23.:47:31.

sharing with other composers and musicians. So, I think we're in a,

:47:31.:47:35.

Cameron talks about the Big Society, it is actually here, we are already

:47:35.:47:42.

doing t we won't recognise it for a long time, but there is an expon

:47:42.:47:50.

earnings expansion of the thaing - exponential expansion from the book

:47:50.:47:54.

The Rational Optimisim, the growth of the collective mind, the idea of

:47:54.:47:58.

people becoming more and more intelligent by sharing in a larger

:47:58.:48:02.

and larger collective mind. Do you know our brains are getting smaller.

:48:02.:48:06.

That is an alarming thought on which to end. That's it for tonight.

:48:06.:48:16.
:48:16.:48:22.

Quite a blustery spell of weather, rain clearing away from the south-

:48:22.:48:26.

east over the next hour or two. All eyes to the North West, we will

:48:26.:48:30.

start the day with blustery showers. Despite a bright start further

:48:30.:48:33.

south and east, the showers will rattle in on the breeze. Most of us

:48:33.:48:38.

can expect a shower or two on the day. It will be cooler than it has

:48:38.:48:44.

get higher than the mid-teens in most places. Not everyone will get

:48:44.:48:48.

showers, most will. When they come along, they could well be quite

:48:48.:48:53.

heavy. The further north and west you go across the UK, the more

:48:53.:48:56.

widespread and heavier there could well be hail and thunder mixed in

:48:56.:49:01.

as well. Those winds will gust up to 50-60 miles an hour for a time,

:49:01.:49:04.

across parts of Northern Ireland, and up across western Scotland as

:49:04.:49:09.

well. Over high ground of Scotland, we could well see some snow, up

:49:09.:49:15.

over the mountain tops, primarily. A chilly feel, a blustery wind,

:49:15.:49:18.

plenty of showers around. The good news is on Friday most of the

:49:18.:49:22.

showers have dyed away, it will be a bright and - died away, and it

:49:22.:49:27.

will be a bright and crisp end to the week. Make the most of it, it

:49:27.:49:31.

won't last that long, a ridge of high pressure will come in, the

:49:31.:49:34.

With Jeremy Paxman. David Cameron re-wrote his conference speech at the last minute to omit a call on households to pay off their credit cards. Newsnight picks through the detail of what stayed in.


Download Subtitles

SRT

ASS