With Emily Maitlis. As economic bears point to cracks in the economy, Jim O'Neill of Goldman Sachs puts the case for the bulls. Justin Rowlatt sees the booming economy in Brazil.
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Bulls and bears, BRIC and PIIGS, the world struggles to find
communal solutions, will 2012 be everyone for himself.
The word that scared everyone last year was "contagion", this year add
"protectionism". Bun BRIC country, Brazil, has already turned itself
into a powerhouse of agriculture and mining, now it is spending a
fortune building its own oil industry. We are talking about $127
billion US dollars, this means $2,000 dollars persecond, 24 hours
day. We will ask Jim O'Neill who coined the BRIC phrase, and ask if
the world is getting closer together or further apart.
Also tonight, after the protests, the PM and his deputy seem to be
racing to crackdown on tax avoidance, will anything change?
Made to feel like a right tweet, Diane Abbott and the sentence that
landed her in hot water. Was it racist or a storm in a tea cup. We
will ask our guests if she was right?
Good evening, if you are looking for calm markets you generally have
to focus on the one that is are shut. The new year has opened as
turbulently as the last one ended. Focus is on Hungary, which has seen
demonstrations and bond yields through the roof. There are
concerns that 2012 could be the year when protectionist sentiment
take as grip. With a second slowdown happening all over the
world, is a communal solution really possible. Will it soon be
every country for itself. Our economics editor, Paul Mason, is
here. Talk us through Hungary? year ended on the theme of national
parliaments versus the euro, the whole question of democracy, with
the imposition of two technocratic Governments in Italy and Greece.
This year it has begun with the same issue somewhere else. Hundred
gary two years ago was close - Hungary two years ago was close to
being bust and had to be bailed out by the IMF. It now has a right-wing
nationalist Government,ed headed by this man, he and his two thirds
majority in parliament have pushed through a whole number of
constitutional amendment and changes in Hungary, which the IMF
and the European Union think are really quite dangerous. They
threaten the financial stability and democracy itself. So, a stand-
off has taken place over the question over whether it gets any
more money, patently needs. This is the effect of the stand-off. This
is Hungary's borrowing costs. Bubbling along to 7% and just after
Christmas it has gone to 10.5% today. That is a sign that people
believe there is a crisis coming in Hungary, and they believe the
Hungarian Government is quit the prepared to stand up to the IMF and
the EU in a way that the Greeks and the Italians weren't.
It may end quite badly, we will know in the next few days, how will
end. The banks must be incredibly
worried. It All comes against the bigger sovereign debt crisis
background. There is good news, the worldle central banks have been
pumping money into Europe, the European Central Bank has been
buying the bonds of striken countries, Italyed today, Greece et
cetera. But -- Italy today, Greece, et cetera. The bad news is, what
are the banks doing with the money being pumped in. Take a look at
this graph. This is the amount of money depos the every night in the
European equiff leent -- deposited every night in the European
equivalent of a mattress, the safest place, where no harm can
come to it. It has gone from not much to a staggering 44 4 billion
overnight. Take a look at that, it moves in waves every month. If that
were the sea, if those were wave ace proching you, you would say
everybody whon't -- approaching you, you can say everybody who can't
swim get out of the way. A crunch in Europeing in Europe in the next
few weeks. The question Government, economists and the public are
asking, what happens when we come to the cathartic moment in Europe.
The background is people looking for national exit routes from this
crisis. Hungary itself deciding the national parliament will trump the
IMF. Another big country on the edge of Europe, that threw its toys
out of the pram, that is our's, over the question of the European
treaty. We have Canada, walking away from the Kyoto Treaty,
essentially on economic grounds, we have the USA and China, sparring
with each other over trade. We have got now the question of the breaks,
the -- the BRICs, as this crisis goes on, they are exporting their
way out of it. Brazil, only this week, stunning trade figures,
stunningly good for them, and stunningly good negative for
everybody who trades with them. That is the issue I think will
overhang 2012. As Paul was saying, the hope for
growth in the world economy was meant to be those BRIC countries,
Brazil, Russia, India and China. Some critics think it should stand
for "ed bloody ridiculous investment concept", we will
discuss with a bond trader and economist the issue. First Justin
Rowlatt has been to Brazil to see how their economy came to boom and
whether it can last. Brazilia, Brazil's remarkable
capital city, was built as a statement of intent. Enshrined in
cool calm concrete Brazil's ambition to become a dynamic modern
nation. But the economic boom in which this city was born, turned to
bust. And the prosperous modern future that Brasilia was designed
to embody remain tantalisingly out of reach. And then, the starked
modernism of this place seemed to give truth to the old joke about
Brazil, that Brazil is the country of tomorrow, and always will be.
Brazil's tomorrow seems finally to have arrived. The country has been
booming, and the seeds of its new success were zone quite literally,
out in the country's vast interior. We are producing the silos here.
Pedro is an economist turned agricultural businessman, who runs
one of the largest farming enterprise, not just in Brazil, but
the world. Brazil has the capacity to feed
everyone in the world. Everyone in the world. A modest ambition?
Because Brazil leads the world in soya? Second in produce. First in
could have he fee, first in sugar cane. First in orange juice. First
in cocoa. Beef? You are not just the bread bast ket, but the grocery
store of the world. He has good reason to feel cocky,
40 years ago Brazil was a net importer of food, and much of the
country was considered unfit for farming. Now it is an agricultural
superpower. The key to this transformation, something very
unfashionable, state planning. Brazil -- TRANSLATION: Brazil's
secret is not something that happened overnight, it is the
result of planning. It began 40 years ago when Brazil's Government
createded a state enterprise in BRAPA.
This man has been dub the King of Soya, because of his dominance of
this key Brazilian export. He's in politics now, an influential
senator, which, say insiders, presidential ambitions.
TRANSLATION: That state organisation was born with the
mission of sending abroad hundreds of technicians, men and women, to
be trained in universities in the United States, in Britain, and
other places. They returned with a large body of scientific knowledge,
and from that base, we in Brazil, began to develop our own systems of
tropical agricultureure. Government planning may have create --
culture. Government planning may have createded the tropical miracle,
but it doesn't sustain it. Brazilian farms prosper without
virtually any subsidy. They didn't put in place the bricks from
agriculture alone. It has vast reserves of iron ore and countless
other minerals. Recently discovered huge oil reserves too, and is
spending record amounts to get the stuff out. We are talking about a
programme that is $224.7 billion US dollars over the next 20 years,
this is $,000 per second, every 24 hours a day. Of investment? Yes.
The real game changer for Brazil is the prices it has been getting for
all the commodities it has in such abundance. They have been at
historic highs for the last decade, thanks to the huge demand createded
by the rapid industrialisation of fellow BRICs, China and India.
We know that the infrastructure...Charles Tang is a
Chinese-born Brazilian, and the lynch pin between much co-operation
between Brazil and China? The two economies are complimentry, Brazil
needs capital to grow its economy and create jobs. China needs the
strategic resources for a sustained growth and to feed its people.
Countries such as Brazil can provide that.
This vision of harmonious economies neatly complimenting each other
doesn't quite hold. In the past year growth has slowed to just 3.5%.
Half the average for the last decade, and half of what China and
India achieved last year. One reason is what Brazilians call
the "costo Brazil", the hidden costs of doing business here. They
cite unyielding bureaucracy and state distortion, but top of the
list is infrastructure. This is the main high road, the state at the
very heart of Brazil's agricultural bonanza, it is a single highway,
millions of tonnes of soya, beef, maize, are shipped down this road
every single year. Locals say that during harvest time, this becomes
one slow traffic jam. Hundreds and hundreds of kilometres long.
But complaint about the roads pale into incision beside the other
Brazilian bug bear, the currency. Brazil's success exporting
commodities has push the value of the currency through the roof. That
is hitting the country's manufacturers. TRANSLATION:
we're not careful China will eat us up. Then there will be India as
well. The Brazilian Government needs to watch out for this. By all
means sit around the table with the BRICs and negotiate, but know how
far to go, at which point to step in and come to the defence of
Brazilian industry. So there arele challenges ahad he, but Brazil has
weathered the current financial gloom far better than most
developed economies. It is now a creditor, not a debtor nation, the
country that once depended on IMF loans, now lends money to the IMF.
While the vision of modernity that inspired Oscar Nimirye, the
architect of Brasilia, there is no question that Brazil, with its
trillion dollar a year economy, is now very much a modern nation.
Let's take some those thoughts to Jim O'Neill, and our other guests.
Great to have you all here, thank you very much.
BRICs, that phrase coined by you a decade or more ago. When you look
at the kind of success of they have had. Want to say Europe should be
trying to emulate what they are doing, without declaring economic
war, can it? I think you should try to do what is right for Europe.
There is certain things going on with each of the BRIC countries,
which is impossible for other countries to replicate, in
particular two, all four of them have a lot more people than
anywhere in Europe. You can't just magically create people. Secondly,
importantly, and shouldn't be lost by any of your viewers, all of
these countries are coming from a much lower base of wealth. And are
at various stages of development. So the growth statistics look
bigger any way. As big as they are getting they are not anywhere near
as wealthy as we are yet, including Brazil, the wealthiest of the four.
They were thought to be the countries that save the world
economy, they can't shoulder that, can they? I don't know about save,
but they are the countries that are driving the world economy. As I'm
sure we will get into in a second, the decade we are now in, the world,
the true world, not a jaundiced western view of it, will probably
grow by more than 4% on average, because of these countries. But it
is not what many western people think, because they see it purely
from the world in which the west being the premier driver of the
world, is the only think thing that should really be the status quo.
There is the issue people have to get their heads around.
When you look at the BRICs do you think that is the only driver now,
realistically of the world? What people have been exciteded about
BRICs, as Jim as said, the number people, number one, but Russia and
China have appalling demographic, the demo of graphic dividend in
China turns negative from 2015. The second point about base of
cheapness, everything in China has been done on the base of cheapness,
low wage costs, increasing now, companies have to of move further
unland. No paying any social welfare, net net, no heed paid to
the massive solution, most of the standing water is polluted and so
on. What he comists would call negative comebgts d economists
would call negative effects coming down. It is not whether China will
have a hard landing, it it is one. In 2009 I had a trip to Beijing and
was alarmed to what is happening. You see me frowning. Jimmy's story
about the BRIC, and I would broaden it, you have another axe nim that
you use, the N11, the - acronym that you use, the N11, the poorer
countries are catching up. That is the secular story of our generation.
You are right, if you look five or ten years ahead, that is where the
global growth will come from. We are in ageing societies here, we
have really big problems in the western world, we have huge debt
overhanging us, we won't grow very fast. If you look at a shorter time
frame, this year, for example, we will see less than a boost from
these economies than we have in the past couple of years. They bounce
back very quickly from the financial crys, they have been
booming, they are closing -- crisis, they have been booming, China and
Brazil have been slowing. The biggest question is what happens in
Europe, maybe we can get into that. The second biggest, equal second,
is how fast and how far China going to slow. If China has a hard
landing f its growth rate really slows, that hits other emerging
economies. Brazil, big exporter. First of all, we all talk about in
idiotic simplicity, China is not landing at all. It is still going
to be travelling. But, you know. Will its growth rates be sustained?
And by the end of this year, it will either have much weaker growth,
or a big weaker growth. I would argue that China has deliberately
decide to try to slow the he economy down.P much of the things
which many of the China bears worry about, they forget that it has been
orchestrated, in particular a turn around in property price, has been
orchestrated by Chinese policy makers. It is really done because
their cha eing last year, contrary to --le challenge last year,
contrary to your intro, was rising inflation, not the problems we sit
around worrying about in Europe. Once they get inflation back down,
they will not timing policy, and if need be, they will support the
economy. That depends on them fine tuning as perfectly as they have in
the past. In 2008/09 they did it brilliantly. The world economy
slumps, the Chinese do a huge stimulus and the economy keeps
roaring. Because we know so little of what goes on in the
administration, we have this assumption they are totally in
control of what their economy is doing? That is complete fallacy,
even talking to people off the record in Beijing, working for the
larger state-owned enterprise, they will say, if you like, it is not a
scalpel, but a large heavy hammer to hit the economy to get it moving.
Presub time crisis you have 50% of the bank loans off balance sheet.
You have 26 million empty parliaments. I know that --
parliamentary partys, I know China bulls -- apartments, I know China
bulls say it won't matter. But the cost of apartments are high, and
the economy is slowing. There was large parts of China had a have yet
to urbanise, the problems which Gillian alludes to, are the ones
where most people travel to, and the ones that are most developed.
At the high end their property markets things have got out of
kilter, that is why they have been deliberately trying to turn it
round. If need be. For the whole national economy, they will
accelerate already existing plans to stimulate fresh building of
properties in parts of China that most of us don't even know how to
spell. So this kind of view is relevant in a cyclical sense, in
some previously, highly excitable parts of the property market. To
simply translate that as a nationwide thing. You need to go
back and visit more. I want to get on to one of the
points that Paul Mason was raising, we have basically had decades of
globalisation. It seems like the only wayer for the world to talk to
each other and the economy to move. It is. Are we moving towards a more
protectionist model, there are some countries that have protect
themselves quite well, insulated themselves against the downturn, by
their protxist measures? I'm struck by, -- Protectionist measures?
struck by, I come from the Economist, we constantly worry
about protectionist all the time.S striking in its absence over the
past few years. If you thought in the wake of the financial crisis,
in 2008, we were terrified there would be a wave of protectionist
pressure, it didn't happen. This year will be a tough year for the
world economy. It will grow more slowly, depending on how badly
things go in Europe, could be nasty. I don't see it yetment I see spats
here and there. If you join up the dots, Paul has given us ten
examples in the last year. Paul could have done that for you three
years ago. It was a very popular view on the aftermath of the 08
severity, that was the end of globalisation. It is not even close
to it. I would argue, in the aftermath of 08, people thought the
Governments had all the solutions, and all that is happening is the
debt has been passed from the private sector to Government sector.
Now that is going bad. Now it is an accident of history that 2012 sees
so many changes andle challenges to Government around the world, China,
Russia, US, frapbts, the list goes on. The temptation of protectionism
goes ever higher. I wo agree with both of you to argue from a ration
-- I would agree with bolt of you to argue from the ration -- both of
you to argue from the rational point of view of an economist.
Tomorrow will be a a figures list of employment and unemployment
picture in the US T will show in the US that the picture is
improving. The whole push for protectionism in the US is losing
the impetuous. You remain very bullish? I worry about the European
thing. We will talk about about this. We saw Paul's crest of waves
on the graphic. Is it possible that crisis won't hit? Won't hit where?
Europe? Europe is already being hit, what we have talked about so far,
is whether that is, or on the edge of, or what is implicit, that is
going to, by definition. Will it hang together? Drag down the rest
the world. The most interesting news in the past few weeks about
Europe is that Europe's biggest economy, Germany, itself, seems to
be reasonably coping with it. Which I myself am surprise with about. I
thought Germany would be weaker than it is. I think the p best case
scenario is Europe has a short, Europe has a short and sharp resgs.
I don't see why it should be short, I don't think see growth in Italy
or Spain, they have massive austerity feeding on bank
contraction. That is the best case scenario, the worst is the eurozone
falls apart with a real cat it is a trough he fee. I think it will have
a real -- catastrophy, I think it will have a real effect on the rest
of the world. Everyone is framing the question, how to keep the
eurozone together in its current guise, I don't think Germany is
plated in gold, the Germany constitution court ruling shows a
lack of economic clout and political will. Also the frame, can
we hold the eurozone together, it is such a disaster, that perhaps
taking it apart now will save a greater disaster down the line.
Prime Minister has signalled he wants to crack down on large
companies and their Francy corporate lawyers who endlessly
reduce their tax bills. He seems to be in a competition with his deputy,
Nick Clegg, in rhetoric on tax avoidance, which unlike tax evasion
is legal. What will a crackdown look like, and will it do anything.
Here is a guide to avoid tax. Navigating the maze of British tax
legislation to advantage, exploiting every loophole is what
legal tax avoidance is all about. Tackling those greedy capitalists
who minimise their bills is a populist campaign. Something must
be done, said the Prime Minister, addressing hard-pushed leaders of
smaller and medium-sized businesses today. We need a tougher approach.
One of the things we will look at this year is whether there should
be a more general anti-avoidance power, that HMRC can use,
particularly on very wealthy individuals and on the bigger
companies, to make sure they pay their fair share.
No less keen to talk tough was the Deputy Prime Minister, speaking on
Radio 4 this morning. He sees an attack on corporate greed as a
defining issuer for the Liberal Democrats. Millions of people, and
these are millions of people who I feel Liberal Democrats and politics
are for, who pay by the rules, who pay their tax, who work hard, to
aspire to do the right thing for themselves and their families, who
are angered when they feel there is a wealthy elite, or big business,
who pay an army of accountants to get out of paying their fair share
of tax. How do companies avoid paying tax, these are the five most
popular ways, they can decide the location the transactions take
place. Ireland has an attractively low rate of corporation tax. Then
there is the timing of payment. Deferring it for a period allows
you to bank the interest. The identity of who is doing it is
important. Some multinationals shift debt on to UK-based companies,
and recording big profits in countries where taxes are lower.
The type of transaction can be changed, capital gains tax is lower
than income tax. Finally it is possible to obscure the way the
information is disclose. Many offshore tax havens have rules much
less stringent than the UK. I say cutback, you say fightback.
London October 2010, protestors gather outside a Vodaphone shop,
complaining about what they say is an unpaid tax bill of billions. The
company says it has never owed that sum. But the dispute over revenue
has cost millions over nine years. This attrition of war ended last
year, when the company agreed to pay �1.25 billion in a final
settlement. Tax avoidance is not working within the law. Listen to
the description. It is avoiding. You getting round the law. What
these people -- companies do is find ways to get around the UK law
and trade it off with the law of other countries. They trade of off
different accounting systems between the UK and other countries.
They are really trying to get round the law. It is legal, no-one is
disputing that. But it is unethical. Parliament has been critical of
Vodaphone, but the firm says it has been unfairly ma lined. Here at the
Treasury Select Committee, another bigp company was under fire over
the -- another big company was under fire over the amount of tax
paid over to the revenue. We paid �2 billion in tax to HMRC, over the
last six years we have paid �12.5 billion. Of that �2 billion, what
percentage was non-payroll taxes?Off The periodsages. Most
that could be the payroll tax paid by employees, in terms of corporate
tax we don't know. That is the payment from Barclays to HMRC.
Barclays later wrote to the committee confirming it paid just
�113 million corporation tax in 209. That low figure was blamed on UK
losses. Newsnight asked the amount of UK corporation tax paid in other
years, the firm said it never gives out these figures. Many of the
small and medium sized businesss in this country, struggling in the
current economic climate, do not have access to the army of tax
experts. Wr talking about big rich companies? We are. But what does
that mean we do, do we kind of give up and walk away from the piste,
and give up trying to ensure people make a fair contribution, or do we
do absolutely everything we can to ensure that we clampdown on the
loopholes. But for that to happen, the revenue
must be firing on all cylinders, there is precious little sign of
that. The top man, Dave Hartnett left recently after negotiating a
series of controversial tax settlements with powerful firms.
Cosy deals, according to MPs. And the service is facing severe cuts.
You you have a real problem, it is a real dilemma in that over the
last few years a lot of their experience in this area has just
gone. And for the revenue to try and recruit and get people in place,
who are capable of dealing with matters where it is large
corporates, who have good solid advisers, it is hard to imagine
that it is going to be an easy one for the revenue to win.
In reality, then, it is easy to talk tough about tackling loopholes,
but those with money have access to elite, legal and financial advice.
Victory in court is not assured, and naming a and shaming is tricky,
because allegations will be denied. In the short-term, then, this
becomes an ethical, rather than a legal debate.
With me now, representatives of the two parties in coalition, the Lib
Dem deputy leader, Simon Hughes, a the Conservativep MP, Jesse Norman.
This was always a central tenet of theed Liberal Democrat position on
tax, wasn't it. How successful, truly, do you think you have been
in pushing had to the top of the agenda, in the coalition
Government? Firstly, happy new year, the answer is we have, the argument
has been won. Across the coalition. Before the last general election,
we had proposals that suggest that there should be a general anti-
avoidance provision. There was a commitment in our fest toe, the
coalition agreement he spe -- manifesto, the coalition agreement
specifically made a commitment to it with the proposal West came
forward with. From Danny Alexander there was a speech talking about
action happening. In the first speech it was the Government
spending a billion to get in �7 billion, the extra that was avoided.
The feeble 5,000 top earners that Labour targeteded, we were going to
look at the top 350,000 top earners, driven by �2.5 million a year.
were forced to look at this because of pressure on you from the Liberal
Democrats? I wouldn't think that is right at all. What has happened is
actually there has been an argument, a discussion has been had within
the coalition, and I think the Chancellor's actually leading it as
much as anyone, actually. If you lock at the decisions he has made
in terms of cracking down on this crony capitalism. He has had a non-
dom tarrif. That was his idea, we have had a bank levy out of that.
It is interesting the two sides have come together, and the
Chancellor has commissioned this new review on anti-abuse. That is
what we are coming up now. In that report, the quote that it is
concluded to be introducing a broad spectrum anti-avoidance rule would
not be beneficial for the UK tax system. He says there is a real
risk of undermining business being table to carry out sensible
business. Of this thrown it Alawites together? They haven't
done that. They are saying there are two kinds of things to separate,
legitimate, proper, tax planning, from abnormal and abusing tax
evasion and avoidance. That is what they are targeting. Not evasion, we
are talking anti-avoidance. What is an Antwiity avoidance rule? -- an
anti-avoidance rule? It is an anti- abuse regulation. What that
regulation is looking at is all the grey areas in which the tax law is
being manipulated in favour of companies with rich lawyers, as
described, and being pushed from legitimate avoidance into evasion.
What is fascinating about the review, there is a lot of
consultation withm sol of the key industrial and other groups around
it. -- some of the key industrial and other groups around it. And it
has the provisions in the back of it which we can discuss. Can you
understand what it involves, Nick Clegg says the report shows it is
feasible? Let me put it to you clearly and hopefully to viewers as
well. Most common law jurisdictions, Australia and Hong Kong have such a
provision. It changes the way we would do tax arrangements and
collection, are from the old system which is you would try to avoid it,
the that was the presumption. Ever year the Finance Bill would close a
loophole somebody had found. To putting in place provision that is
say, we are asueing, we the state, through the tax collectors, are
assuming it is wrong it avoid tax. An anti-avoidance rule would not be
beneficial for the UK tax system, that is what it says? Please let me
explain. The proposition that was reject there was a general
provision across all taxes, because, for some taxes that wouldn't be
clever.S an incentive for people who investment in ISAs, he was
clear that you take sectors, corporation tax, capital gains tax,
income tax, petroleum tax, and you have provision that is make sure
you don't avoid those liabilities. Corporation tax, he gave the
example. Would net �2.1 billion. Are you convince that this will be
adapt and you will see anti-tax avoidance rules implemented?
answer is yes. I accept that the Tories have signed up to the common
agenda. That is very positive. And I am very clear that where as at
the moment we miss �7 in �100 that we should collect, Liberal
Democrats will be more successful. That was their argument before.
will be more successful in this parliament, with Tory partners n
dealing with tax avoidance than any other Government sow far in British
history. It is very -- So far in British history. This is about
perception, the IMF said basically the Tory-led Government cuts would
make the poorest families suffer most. This is about trying to say
we're all in this together, isn't that what it is about? The truth of
it is, that the anti-tax avoidance measure that is have been taken now
are ones in which the Tories have been leading, just as much as the
Liberal Democrats. There is no suggestion that George Osborne, a
man who introduceded the idea of a non-dom tarrif, before becoming --
introduced the idea of non-dom tarrif before becoming Chancellor
would not be on board with this. The same on the tax levy and the
other elements to combat the Crowny capitalism Judge the outcome in
five years. Many people have fallen foul of
Twitter, Diane Abbott, Labour's shadow Health Minister, is the
latest. She wrote "white people love playing divide and rule".
Today she ale poll guise, after an apparent dressing -- apologiseded
after an apparent dressing down from Ed Milliband.
After a week where two were jailed for the murder of Stephen Lawrence,
issues of race have never been far from the sent. She spent most her
life on the backbenches, but Diane Abbott has built the profile of a
political A-Lister. Apparently glued to the TV sofas.
The straight talking she has brought tom campaigns against
racism and poverty, has, once again, caused a mighty storm, sent raging
by a little tweet. A freelance journalists, had tweet in reference
There was a furious reaction on- line, and off it in Westminster.
think what Diane Abbott said was just stupid and crass
generalisation. He she should explain and apologise for what she
said. Let as call it the 140 character defence. Diane Abbott use
to claim her remarks were taken out of context. A thesis on 19th
century European Colonialism, far too great for the truncated medium
she had had chosen. There will continue to be
discussion about it. But certainly, from the Labour Party's point view,
her position is secure, as the shadow health minister. And she has
ale poll guiseed for causing offence. Which should be --
apologised for causing offence, that should be enough. Do you know
from Ed Milliband her position is secure? I hope her position is
secure. Ed Milliband becomes the latest Labour leader to call Miss
Abbott to orderment she stood against him for the leadship,
coming last. During the contest she made much of being the outsider,
opposed to the Iraq war, and apart from the Blair-Brown cliques. Some
her issues with senior colleagues from personal, she criticiseded
Tony Blair and Harriet Harmen for sending children to selective
schools, then she sent her own son to a fee-paying school. The double
standard led to a bust-up on her own TV programme. You said "West
Indian mums will go to the wall for their children", so black mothers
love their children more than white. Andrew, we have just had one of the
most important budgets in a generation, I have said everything
I will say about where I send my son to school. No understand the
quote. Supposing Michael had said "white mums will go to the wall for
their children". Andrew I have nothing more to say. So Britain's
first black womanp MP found herself accuse of -- woman MP found herself
abused of racism. This was her description of the coalition
leaders a month ago. One of the things about this new leadership.
This new leadership is how post meritocratic it is, two posh white
boys from the home counties. spent her adult life in the
spotlight, people already know exactly what they think of Diane
Abbott, this flare up tells us not much about her. But the reaction to
it reveals plenty about the ever- sensitive issues of race relations
in this country. This, afterall, is the week in
which two white men were jailed for the murder, 18 years ago, of the
black teenager Stephen Lawrence. It was but a partial settlement of the
case. Other suspects remain free. But the trial has revived some of
the intercommunity tensions felt at the time.
It appears to me there is a bit of a backlash, and it is something we
have seen before, we have seen it when the racial relations acts was
publish as well. It seems we get a very entrenched views coming across
and people going too far in enforcing race relations act and
now white communities won't be supported.Le This burn us alive.
The feeling of unfair abandonment by white working-class communities,
was identified in a report about race relations for Bradford City
Council, shortly before riots broke out there in 2001.
Over a period of time, there has been a neglect of those who are
poor and white in our urban areas, and rural areas. And I think
because we haven't given sufficient attention to that, there is an
inclination for resentment to build, and for people to be resentleful of
initiatives aimed at -- resentful of initiatives aimed at dealing
with black communities. The fast flowing nature of Twitter ensures
the spark caused by Diane Abbott's comments will fade. In its wake,
this week especially, the tough questions about how we all live
together and treat each other, will not be so lightly set aside.
With me now the broadcaster and civil rights activist Darcus Howe,
and the director of British further, a new think-tank. Was Diane Abbott
right to apologise? I got about ten phone calls from friends, activists,
non-activists, and all them black, they said what is she apologising
with about? That is what surpriseded me. Who is she ale poll
guiseing to? Miliband is nowhere and doesn't have the experience of
organising working people as Diane Abbott. You don't think she should
have apologised? I don't know for what, I will meet her and she will
explain it to me. She said divide and rule is part the strategy of
political whites, and I tell you how it happens the to this.
didn't say political whites? Whites, she will say they like their own
type of black. You understand that? I think she's right, I'm glad she
has apologised, it is crass and offensive, it was a crude
stereotype white people. She didn't mean to that, I'm sure as she said,
stereotype all white people, as that was the natural reading of it,
she should withdraw. She said it was out context, I think it is
worse in context. She was talking to a black journalist who made a
cogent point. This issue of community leaders I have some
problems with that, who is representing who, who he decides it.
It it is a policing of debate within black communities about
black communities that says you can't say that in public, that is
divide and rule, you are plauge into a white agenda -- playing into
a white agenda. Of course not All Black people think the same as
everything, that is because, you were campaigning against racism
before the -- I was born, the games you played before were more diverse,
we should welcome the process as well as seeing it is not complete.
I like when somebody tells me something nice about myselfment
you turn it around, if it was a white MP and they made a sweeping
generalisation about black people, they would almost certainly be out
of a job? Why if it was a white person, no white person ever said
it. If they say it, I have to wait and see it who says it where and
why and when the you can't just say if it was a white person. It it is
not logical. I find that Diane Abbott, at this time, is crucial,
at the time when Doreen Lawrence and they and us have won that
campaign, Diane is itching to speak, but she has to...It Sound like you
are excusing what was bluntly a stupid thing to friend? She is my
comrade and French, I would have said the same thing. I would have
told Miliband to go to hell. Do you think this is basically a storm in
a tea cup, on a fairly slow news day, with somebody who has had form
before? It is a question of think before you tweet. I love twittwiter
to bits, it is not the place to have nuanced discussions. The
outrage goes tooer far asle well, apologise, withdraw, move on and
have -- as well, apologise, withdraw, and move on and have a
serious discussion. The big serious issues we have seen with Stephen
Lawrence. We are having a shouting match where people are outraged.
Let's have a conversation. We saw in the report there was talk about
the sense of poor, white isolation as being one of the reasons,
possibly in the backlash from the Lawrence laorn conviction, do you
buy that this week? -- Stephen Lawrence conviction this week, do
you buy that this week? There is a problem, but the real problem is
you don't have to choose. You can either deal with the racism
affecting the black community or the exchugs of the white community,
we want fair communities. You were probably the first person
to say a multiculturalism where white people have no role except as
oppressors won't get us to good society. Nobody heard me say that,
Diane came into the Labour Party under black sections because the
Labour Party couldn't have black MPs. They fought and campaigned,
she became, on that issue alonement the black community, for the first
time in human history in this country could rely on someone who
knew them, where they came from, who didn't have to go...What Do you
make of the reaction, the response to her tweet, do you think this is
a febrile of Twitter? It will go away. What concerns me Diane is in
a Shadow Cabinet with people who are very inferior to her
politically, she is minister of public health, and they go out and
speak about blacks, and she has to sit there, waiting to listen, to
what the rest of them have to say, which amounts to nothing.
I have to leave it there. Just before we go. Let me take you
through the front pages of thep papers.
The picture of Marylin Monroe, which I will show you later, the
which I will show you later, the The American photo journalist died
at the age of 99. This is a reminder of some of her most iconic
Good news. The worst of the storms dying down now. Much lighter winds
to end the week, it will be a pleasant start to the day, a bit
chilly. Sunshine becoming more confined to
the eastern half. Further west cloudier with outbreaks of rain.
Mid-afternoon across parts of the Midlands, brightness hanging on.
Cloudy, not spoiling things. In the south-east a fine day.
Temperatures struggling up to seven or eight. Cloudier across parts of
South-West England, the odd spot rain in the breeze. For walls as
well. After a bright start will tend to cloud over with dampness 0
toen the day. The wind, as I say, nothing like -- to end the day. The
wind nothing like we have seen. In Northern Ireland we will see
outbreaks of rain turning up, wet across the western Highlands and
island. To the east some dry and brighter weather will hang on for a
good part of the day. Further ahead into the weekend. Some hours across
the North West. But the emphasis on bright and breezeyo conditions
through this weekend. Both -- breezy conditions through the
weekend. The winds not as strong. One or two showers around, many
places having a fine weekend, plenty of sunshine from time to
time the The picture on Saturday, a chilly start to the day. The
With Emily Maitlis. As economic bears point to cracks in the economy, Jim O'Neill of Goldman Sachs puts the case for the bulls. Justin Rowlatt sees the booming economy in Brazil.