:00:08. > :00:12.The Government gets a poke in the eye from a bishop's crook.
:00:12. > :00:16.How come the Government can decide that this woman should have her
:00:16. > :00:21.benefits capped, but not this banker's pay? The Business
:00:21. > :00:24.Secretary declines to tell what he thinks is fair pay package for a
:00:24. > :00:29.banker. By what right does an unelected
:00:29. > :00:33.bishop frustrate the will of Government?
:00:33. > :00:38.Beijing's Forbidden City is forbidden no longer. But the
:00:38. > :00:43.country remains an enigma to the west. Increasingly prosperous and
:00:43. > :00:47.increasingly confident. What does it want in the world. We have asked
:00:47. > :00:51.citizens there. Who does the 21st century belong
:00:51. > :00:59.to? Most people say it is China. wonder what the Chinese ambassador
:00:59. > :01:03.to Britain will have to say about that.
:01:03. > :01:07.It has been a while since you could honestly call the Church of England
:01:07. > :01:10.the Tory Party at prayer. The bishops in the House of Lords
:01:10. > :01:15.certainly don't merit the title tonight. They led the defeat of
:01:15. > :01:17.Government plans to cap the amount of money people can claim on
:01:17. > :01:21.benefits. Earlier the Business Secretary had been dragged before
:01:21. > :01:24.the Commons to lay out his plans to curtail the amount of money being
:01:24. > :01:29.paid to senior business people. Significantly, no figures were
:01:29. > :01:33.mentioned in that plan. Claptrap and dribble were a couple
:01:33. > :01:36.of the more printable words used by some of Vincent Cable's
:01:36. > :01:41.Conservative comments in Government, to describe his ideas. Both issues
:01:41. > :01:45.touch a public nerve. The political challenge is to stay on the right
:01:45. > :01:50.side of the argument. Before we talk, David Grossman reports.
:01:50. > :01:55.1234 this is game of strategy and tactics. Involving castles, only
:01:55. > :02:00.affordable, we are told, for the very rich, or those on overgenerous
:02:00. > :02:05.welfare benefits. Involving bishops, speaking out, against the
:02:05. > :02:12.Government. Lib Dem knights, or at least Lords, speaking out against
:02:12. > :02:15.the bishops, and not to forget the pawns faced being moved out of more
:02:15. > :02:18.expensive accommodation. The Prime Minister was turning the tables on
:02:18. > :02:23.Asda employees in Leeds today. He was trying to sell them something.
:02:23. > :02:27.On offer he had the Government's plans to reform benefits. No
:02:27. > :02:34.household, he says, should get more than �26,000 a year. That is
:02:34. > :02:39.equivalent to a salary of �35,000. Many people in this audience here
:02:39. > :02:43.who are not earning �35,000, are you happy that your taxes are going
:02:43. > :02:47.towards families where no-one is working and they are earning over
:02:47. > :02:54.�26,000 in benefits. Is that fair? No, I don't think it is fair either,
:02:54. > :03:01.that is why it is right to have, thank you for that! How much money
:03:01. > :03:11.is at stake here. The Government says it would make savings of �290
:03:11. > :03:11.
:03:11. > :03:17.million in 2013/14 by introducing the cap. It will affect 67,000, who,
:03:17. > :03:22.on average, will lose �83 a week. The Government is achieving two
:03:22. > :03:24.things, they are hitting those with high levels of housing costs, and
:03:24. > :03:28.taking money away from families with very large numbers of children.
:03:28. > :03:32.If you think either one of those is the problem, maybe you would have
:03:32. > :03:38.been better limiting housing benefit payments or limiting the
:03:38. > :03:43.amount you give for fifth or subsequent children. Given this, it
:03:43. > :03:46.is not exactly clear who is the target. This is a sharper political
:03:46. > :03:51.message? It is clear when you are saying, �26,000 a year, that is all
:03:51. > :03:55.you can get. If you say we will reduce the child supplement for the
:03:55. > :03:58.fourth child is Working Tax Credit, that is less salient. Tonight,
:03:59. > :04:04.though, the Government were defeated in the House of Lords, an
:04:04. > :04:10.amendment led by the bishops. The cap, they said, should not include
:04:10. > :04:18.child benefit. It is important that those people who are already in
:04:18. > :04:24.difficulties, because their benefit has been capped, do not also face
:04:24. > :04:28.having their child benefit removed. It is a very simple amendment. It
:04:28. > :04:31.preserves child benefit as a universal benefit. Ministers have
:04:31. > :04:35.let it be known they are not actually that bothered about
:04:35. > :04:39.today's defeat in the Lords. They promise to overturn it in the
:04:39. > :04:42.Commons and, in any case, I think they have rather successfully
:04:42. > :04:47.managed to manoeuvre Labour on to the wrong side of public opinion.
:04:47. > :04:50.However, this is really only half a political message. So much for the
:04:50. > :04:55.economic pawns getting something for nothing on benefits.
:04:55. > :05:05.What about the economic kings making all the money, squeezing the
:05:05. > :05:09.
:05:09. > :05:15.middle, the other side. A report today looks at all those
:05:15. > :05:19.in the middle, one all the parties are trying to target. The report
:05:19. > :05:23.says those in the middle have become more and more squeezed over
:05:23. > :05:31.the years, and spend 40% on essentials, 15% on housing costs,
:05:31. > :05:36.13% on food and drink, and 13% on transport. If you look at how the
:05:36. > :05:44.costs have changed, the middle has got more squeezed. Household fuel
:05:44. > :05:49.has gone up 110% from 2000 to 2010. Council tax, over the same period,
:05:49. > :05:52.up 67%. Gavin Kelly, of the Resolution Foundation, says all
:05:52. > :05:55.parties are struggling to know how to help this group. For so many of
:05:55. > :05:58.these people, to help them through the tax and benefit system, would
:05:58. > :06:02.you need a lot of cash. You would have to find the cash from
:06:02. > :06:06.somewhere else be clear where it is coming from, it won't be flowing
:06:06. > :06:10.into the Treasury coffers through higher economic growth at the
:06:10. > :06:13.moment. It takes to you the politics of distribution and hard
:06:13. > :06:17.choices, that is not what any political leader wants to talk
:06:17. > :06:24.about now. What about top pay? Today the Business Secretary gave
:06:24. > :06:28.the Commons details of his plans to curb excessive pay. Business and
:06:28. > :06:34.investors recognise there is a disconnect between top pay and
:06:34. > :06:37.company performance, and that something must be done. His recipe,
:06:37. > :06:44.more transparency, combined with more shareholder power, didn't
:06:44. > :06:49.exactly go down too well with all of his coalition partners.
:06:49. > :06:52.liberal, left-wing claptrap he has announced today, which even Labour
:06:52. > :06:56.didn't do in 13 years. He has some how got through the coalition, in
:06:56. > :07:00.the hope of a good headline, it has doing done nothing to increase
:07:00. > :07:04.growth or employment in this country. This is a long political
:07:04. > :07:08.game, the Government hasn't come up yet with a winning move. But
:07:08. > :07:12.believes it has the right strategy. Assuming, of course, the bishops
:07:12. > :07:18.don't get in the way. Earlier this evening I went to the
:07:18. > :07:22.Department of Business to talk to Mr McCabe. What does it say -- Mr
:07:22. > :07:27.Cable. What does it say that this Government is prepared to tax
:07:27. > :07:33.people's benefits, but not willing to set a level for senior bankers'
:07:33. > :07:36.pay? We are dealing with pay, both for bankers' and executives
:07:36. > :07:42.generally. I was introducing a statement today on the wider issue
:07:42. > :07:47.of the pay of senior executives. That has got out of control. That
:07:47. > :07:53.is way in excess of performance and workers' pay. We have introduced a
:07:53. > :07:58.set of measures, more clarity, and paorncy, votes for pension funds
:07:58. > :08:02.and shareholders, and other rules that will change the culture.
:08:02. > :08:07.is the appropriate ratio to senior executives' pay to average pay in
:08:07. > :08:12.the country? It is not for me to define ratio. Why not? The reason
:08:12. > :08:16.why not is that what's right and what's sensible varies in almost
:08:16. > :08:20.every company. If you take two examples, retail company, employing
:08:20. > :08:25.unkilled workers, you will have a big ratio. If you have another
:08:25. > :08:31.company, outsorsd, all of its unkilled work -- outsourced, all of
:08:32. > :08:36.its unskilled work to India, it has a good ratio. What is the ratio?
:08:36. > :08:39.What is a good ratio, you have used the term? It is for the owners of
:08:39. > :08:43.the companies to decide when they see it alongside a lot of other
:08:43. > :08:48.information, which we will require them to publish. You don't have a
:08:49. > :08:52.view? I would have a view about a particular company, if I had shares
:08:52. > :08:55.in it. Which is why we are giving shareholders the responsibility of
:08:55. > :09:00.deciding how their companies are actually being run. These changes
:09:00. > :09:04.you have announced today will not, by themselves, cut a single
:09:04. > :09:07.bankers' bonus, will they? Not in themselves, it will require the
:09:07. > :09:12.shareholders of the banks to act on the information that will be out
:09:12. > :09:18.there, and to vote on it. Yet you are willing to cut the benefits of
:09:18. > :09:22.67,000 people in this country by an average of �4,000 a year? The issue
:09:22. > :09:26.of benefits and executive pay are different issues, and need to be
:09:26. > :09:30.tackled in a different way. Done by the same Government, on the same
:09:30. > :09:35.day? The thing they have in common is the issue of fairness and
:09:35. > :09:38.inequality. But the way we deal with major inequalties of income in
:09:38. > :09:43.society is through taxation measures. Executive pay, which is
:09:43. > :09:49.what I'm dealing with, is one corner of a much bigger problem.
:09:49. > :09:54.you think Steven Hester should get a bonus of estimated over �1
:09:54. > :10:03.million? What I have said and what the Prime Minister and other senior
:10:03. > :10:06.ministers have said is he and other senior executives in the RBS,
:10:06. > :10:09.predominantly publicly-owned, to exercise restraint over their
:10:09. > :10:12.bonuses. They haven't come to a decision yet, the board. We are
:10:12. > :10:15.making it clear they have to look at the wider context, that people
:10:15. > :10:19.are suffering hardship and we expect restraint from them. What,
:10:19. > :10:23.do you think will be appropriate? Let's get nearer the time when they
:10:23. > :10:27.come up with their proposals, and the Government, as a predominant
:10:27. > :10:35.shareholder can react to them. We haven't had them. The tax-payers
:10:35. > :10:42.own this company? They do. You are our representative? Absolutely,
:10:42. > :10:46.there are good reasons for exercising restraint. You said
:10:46. > :10:50.putting in a restraint on executive pay was above your pay grade, whose
:10:50. > :10:54.pay grade is it? From the top of the Government down we have
:10:54. > :10:58.expressed a view that we expect restraint on pavement I don't
:10:58. > :11:02.personally have direct responsibility for RBS. -- on pay.
:11:02. > :11:06.I don't personally have direct responsibility for RBS, but along
:11:06. > :11:09.with the Prime Minister and the Chancellor expect restraint. So it
:11:09. > :11:14.is within the Prime Minister's pay grade? Absolutely. So the Prime
:11:14. > :11:18.Minister can express a view on what Steven Hester should get, but you
:11:18. > :11:24.can't? He has already expressed a view. I was trying to be jockular
:11:24. > :11:27.in a somber occasion. Are you willing to intervene to stop
:11:27. > :11:31.something you disapprove of? never back ward in expressing a
:11:31. > :11:36.view in Government and outside. I have made it very clear, some of my
:11:36. > :11:41.colleagues have made it clear, we expect restraint. We are already
:11:41. > :11:44.seeing it. The bonuses are much reduced from what we have seen S
:11:44. > :11:48.The tax-payers are the major shareholders, whittering on outside
:11:48. > :11:54.won't get us anywhere? Government will express a view. The
:11:54. > :11:58.other aspect of the management of RBS, as you know, the structure set
:11:58. > :12:03.up kept the company, the bank, at arm's length from Government.
:12:03. > :12:07.you know what the slogan is above your reception desk downstairs?
:12:07. > :12:12.we talking about the department for growth. In this building, it is
:12:12. > :12:17."ripping up red tape", it says that in big letters in a red poster
:12:17. > :12:19.above your reception. All you have done today is create more red tape?
:12:19. > :12:24.This is something we have pursued in consultation with the business
:12:24. > :12:27.community and the investors. The measures which we are proposing,
:12:27. > :12:32.they consider to be something that is necessary, and they are happy to
:12:33. > :12:37.work with. This is additional red tape, isn't it? There is sensible
:12:37. > :12:39.regulation, which has been brought in. There is nothing inherently
:12:39. > :12:43.wrong with regulation, we need it to protect consumers, the
:12:43. > :12:46.environment and the work force. Where it is a problem is when it
:12:46. > :12:52.becomes very bureaucratic. final point, also on this question
:12:52. > :12:55.of fairness, what's happened to the mansion tax? It's under active
:12:55. > :13:01.discussion. Is it going to happen? I can't tell you that. I know it is
:13:01. > :13:04.a good idea, I have advocated it, my party has advocated it. It is
:13:04. > :13:08.very fair, economically efficient, and contribute to Government
:13:08. > :13:13.revenues. It is a debate going on. You have not won it yet? No, no.
:13:13. > :13:18.But I always argue my case, and my party colleagues do too. Vincent
:13:18. > :13:21.Cable, thank you. With us now is Liam Byrne, the
:13:21. > :13:29.Labour Work and Pensions spokesman, and in a minute the Bishop of
:13:29. > :13:33.Leicester and Margo James MP. Liam Byrne, most of the peers who
:13:33. > :13:38.voted down this cap tonight were Labour peers. Is the party in
:13:38. > :13:43.favour of the cap on benefits or not? Yes, we are. So these Labour
:13:43. > :13:46.peers were, out of control or what? No, we think the bill is so badly
:13:46. > :13:53.thought through, that there is a real risk that this policy, which
:13:53. > :13:56.is a good idea, in principle, will backfire and dump council tax
:13:56. > :14:02.payers with a new bill for homelessness. We want a few more
:14:02. > :14:05.safeguards written in, before coming fully behind it.
:14:05. > :14:10.expressed your support for the principle by voting against it?
:14:10. > :14:19.principle of the bill was not voted on today. Labour put down Anne
:14:19. > :14:25.mendment which said hang on, let's not -- an amendment which said hang
:14:25. > :14:28.on, let's not put it through like that. Somebody has to pay for the
:14:28. > :14:34.bill, and that person is the council tax pair, we don't want
:14:34. > :14:38.that to happen. You think �26,000 a year in benefits may be too low a
:14:38. > :14:43.cap? We think it is a good place to start. You have just voted against
:14:43. > :14:47.it? What we did is put down an amendment which said, before the
:14:47. > :14:51.cap kicks in, local authorities have to make an assessment if the
:14:51. > :14:55.family will be made homeless, somebody has to pick up the tab for.
:14:55. > :14:58.That the figures we released today will show housing benefit going up
:14:58. > :15:02.over this parliament by �4 billion. That is driven by the Government's
:15:02. > :15:05.failure to get people into work. Isn't this why your party is
:15:05. > :15:08.suffering a credibility problem with the public, you say you
:15:08. > :15:12.support things in principle, but when it comes to anything difficult
:15:12. > :15:17.in prakti, you don't know what to do? We are very -- practice, you
:15:17. > :15:21.don't know what to do? We are very clear on this. The Tories want to
:15:21. > :15:26.pay party politics, and say it is a black and white issue, it isn't. It
:15:26. > :15:30.is a complicated bit of legislation, with good idea at its heart, we
:15:30. > :15:34.don't want the good idea to backfire, creating a whopping great
:15:34. > :15:37.bill for homelessness, that the good hard honest taxpayer has to
:15:37. > :15:40.clean up. When it goes through, it is a will when it comes back to the
:15:40. > :15:44.House of Commons, where the Government has a healthy majority,
:15:44. > :15:47.when it goes through, and it becomes law, an in coming Labour
:15:47. > :15:51.Government would reverse it, would they? No, we would look at the
:15:51. > :15:54.impact on homelessness, that is the risk we want to guard against.
:15:54. > :15:58.would find out what you were talking about after someone had the
:15:58. > :16:02.courage to make the decision? what we're saying is we think it is
:16:02. > :16:04.foolish to proceed with a bill that your own Secretary of State for
:16:04. > :16:07.Local Government has said...You Have just said you don't know what
:16:07. > :16:11.the impact will be? In three years time when a Labour Government has
:16:11. > :16:14.been elected we will know the impact, and what kind of mess in
:16:14. > :16:18.terms of the homelessness bill we have to clear up. You might reverse
:16:18. > :16:21.it or not? If the worst happens, which is what we fear. We think
:16:21. > :16:24.there will be a big spike in homelessness, we think that will
:16:24. > :16:28.put families, and children, out of their homes, and we think that is
:16:28. > :16:31.going to present a big new bill for council tax payers. You would then
:16:31. > :16:35.reverse it? We think the Government can see this coming. They are
:16:35. > :16:40.playing politics with it a bit, we are saying don't play politics with
:16:40. > :16:45.this, think it through, put in the right safeguards now. Do you think
:16:45. > :16:48.the general public understands your position? We have to work hard to
:16:48. > :16:52.explain it. Look, I don't make any apology for thinking through the
:16:52. > :16:58.policy, rather than plunging ahead blindly. I think that is what we
:16:58. > :17:03.are paid to go to work to do. with us, we have the Bishop of
:17:03. > :17:07.Leicester here and Margo James, Conservative MP. Now bishop what is
:17:07. > :17:09.it that gives you the right to obstruct a policy that clearly
:17:09. > :17:14.seems to have terrific public support? The bishops have the same
:17:14. > :17:18.right to speak and vote in the House of Lords as any other peer.
:17:18. > :17:23.Indeed I think we have more than a right, we have a duty to speak
:17:23. > :17:26.there. Particularly if, arising from situations in our own diocese,
:17:26. > :17:30.we see there is something of an injustice being committed,
:17:30. > :17:34.particularly to the children of the poorest families. Has it occurred
:17:34. > :17:38.to you, if you want to frame laws, you might perhaps go to the
:17:38. > :17:43.inconvience of getting elected? That is a debate about whether the
:17:43. > :17:48.whole House of Lords should be reformed, and a fully elected House.
:17:48. > :17:52.There is a draft bill, no doubt it will come before House in due
:17:52. > :17:58.course, as it has the parliament functions as it has for 700 years
:17:58. > :18:02.with bishops in it. With what authority do you obstruct the will
:18:02. > :18:05.of Government on a policy that as tremendous public support?
:18:05. > :18:11.amendment carried was carried by a majority of 20, which required 250
:18:11. > :18:17.peers to vote. There were five bishops, 245 other peers. This was
:18:17. > :18:21.not something just concocted by the bishops. Or create bid the bishops.
:18:22. > :18:25.But the bishops sponsored the amendment because we saw it as a
:18:25. > :18:30.matter of profound social justice. What do you think of what's
:18:30. > :18:34.happened? I disagree in the Lords in passing this amendment. I think
:18:34. > :18:38.the Government has wisely set the cap at average earnings, so let's
:18:38. > :18:42.not forget there is a huge number of people who are going out to work
:18:42. > :18:46.every day and earning less than this proposed capped amount.
:18:46. > :18:50.Do you know how many children will, for whatever reason, as a
:18:50. > :18:55.consequence of this, have to leave the family home, move house, in
:18:55. > :19:00.some respect? I don't think many people have to move house.
:19:00. > :19:04.don't know, do you? In the vast majority of areas. Do you know
:19:04. > :19:10.bishop? I think we have every reason to suppose a Signum. It may
:19:10. > :19:15.be thousands, ten -- a significant number. It may be thousands, tens
:19:15. > :19:18.of thousands who can't continue living where they are. The majority
:19:18. > :19:28.parts of the country have enough affordable accommodation in the
:19:28. > :19:30.
:19:30. > :19:33.private and social housing sectors, to accommodate most people. In the
:19:33. > :19:39.sad case where someone has to move, that is not something the ordinary
:19:39. > :19:42.working family is immune from. In a family where both or one partner is
:19:42. > :19:46.working, sometimes, when conditions get difficult, people have to move
:19:46. > :19:49.house. They have to make choices, all we're saying is that those
:19:49. > :19:54.choices should not be just the preserve of people who are working.
:19:54. > :19:59.They have to make choices. People who are earning have to make choice
:19:59. > :20:04.about where to live what they can afford to do. Don't forget this cap
:20:04. > :20:07.is set at average earnings. point about the amendment is people
:20:07. > :20:11.who are earning have the right to have child benefit. If you lose
:20:11. > :20:15.your job, under these proposal, you are quite likely to have your
:20:15. > :20:18.benefits capped and to lose your child benefit as well. That seems
:20:18. > :20:22.to penalise the children of the poorest families. What do you say
:20:22. > :20:25.to the people in your diocese, who are working hard, and who are
:20:25. > :20:29.earning less than people are getting on benefits, what do you
:20:29. > :20:33.say to them? I say to them, and I have this conversation with a
:20:33. > :20:37.number of them. People who are in work, and who might fall out of
:20:38. > :20:41.work, through no fault of their own, have every reason to suppose that
:20:41. > :20:47.at that point the state will support them to a minimum standard
:20:47. > :20:51.were they can at least keep their children housed and at school and
:20:51. > :20:55.in their networks. At the moment a very significant number of families,
:20:55. > :21:01.through absolutely no fault of their own. There was a great deal
:21:01. > :21:04.of talk in today's debate about incentivising people back to work.
:21:04. > :21:08.With three million unemployed you can't do that for everyone. We have
:21:08. > :21:10.to support people through this very difficult period. No-one would
:21:10. > :21:14.disagree with having to support people when they lose their job.
:21:14. > :21:18.That is what the welfare state is for. That is why the cap has been
:21:18. > :21:23.set as high as it has been, on average earnings. If you don't have
:21:23. > :21:28.children, there is no way you would have benefits anything like to the
:21:28. > :21:31.tune of �26,000 a year, the cap is bearing in mind that a lot of
:21:31. > :21:35.people do have children. You are entirely comfortable with the
:21:35. > :21:38.position your party has taken, where you can be specific about
:21:38. > :21:44.pounds and pence when it comes to people on benefits, because you
:21:45. > :21:48.refuse to be specific when it comes to bankers' bonuss? They are two
:21:48. > :21:53.different things. We are taxing banks, the bank levy has brought in
:21:53. > :21:56.more than the last bank bonus tax did. As you have seen from McCabe's
:21:56. > :22:02.announcement today, there is a lot of -- Vincent Cable's announcement
:22:02. > :22:07.today there is a lot of pressure on bankers' bonus, they are 40% in the
:22:07. > :22:10.last two years. The majority of those working for state-controlled
:22:10. > :22:14.banks are having their bonuses capped at �2,000. That is a lot
:22:14. > :22:21.less than it used to be. Not the investment bank, that is not true,
:22:21. > :22:23.of course, is it? �2,000 at RBS is the standard. I think it is
:22:23. > :22:27.absolutely clear that the inequalties in our society are
:22:27. > :22:31.widening all the time. Some of the poorest families are being
:22:31. > :22:35.extremely hard hit, while they see the people at the other end of the
:22:35. > :22:38.scale, getting richer and richer, faster and faster. The effect on
:22:38. > :22:42.the general well being of our society is extremely damaging.
:22:42. > :22:47.Thank you all very much indeed. For the Chinese community across
:22:47. > :22:51.the world, today is the beginning of the new year festival, so the
:22:51. > :22:54.rabbit gives way to the dragon. Dragon years are considered
:22:54. > :22:58.exciting and unpredictable. Given the state of things in the world,
:22:58. > :23:03.this might be one of the rare occasions when primitive
:23:03. > :23:06.superstition matches reality. Nowhere is better place today face
:23:06. > :23:08.challenges than the People's Republic of China. Where over a
:23:08. > :23:12.billion people live under a communist Government in a country
:23:12. > :23:18.that grows richer every day. It poses enormous challenges for the
:23:18. > :23:22.rest of the world. I have just been there.
:23:22. > :23:30.In 1793, Britain sent an official trade mission to Beijing. It didn't
:23:30. > :23:35.go well. Britain was emerging as the
:23:35. > :23:39.greatest power on earth. Inconveniently, inside the
:23:39. > :23:46.Forbidden City, the Chinese Emperor was under the impression that was
:23:47. > :23:52.his role. The leader of the trade delegation,
:23:52. > :23:59.George Viscount McCartney, was keen to open up a massive New Market for
:23:59. > :24:05.British manufacturing. -- new market for British manufacturing.
:24:05. > :24:09.When he got there he brought forward Wedgwood pottery,
:24:09. > :24:15.Birmingham metalware, the finest of instruments and a minature
:24:15. > :24:19.planetarium. The Emperor was splendidly
:24:19. > :24:27.dismissive. He looked at the cream of European science and
:24:27. > :24:31.manufacturing, and he said, we have no need of things ingenious or
:24:31. > :24:37.mechanical. China had everything if could possibly -- it could possibly
:24:37. > :24:41.want, the trade mission was a disaster.
:24:41. > :24:47.The Emperor may have been secure in his palace, but soon Britain could
:24:47. > :24:52.afford simply to ignore the old boy. When the Chinese tried to stop
:24:52. > :24:56.British merchants, the Royal Navy sent in gun boats. At the end of
:24:56. > :25:00.the conflict, Britain could trade where she liked. Hong Kong was
:25:00. > :25:07.her's, and the Chinese were embarked on what they called their
:25:07. > :25:14.century of humiliation. There is a fourth opium war in 1880,
:25:14. > :25:19.the second one in 1860 and after that it is the collapse of the last
:25:19. > :25:26.Chinese dynasty. As Britain rose, China fell. Liu Jing is trying to
:25:26. > :25:31.tell his country's past in comic book form. So you could say the
:25:31. > :25:36.experience China had with western powers, especially Britain, in the
:25:36. > :25:44.19th century, is very unpleasant. The hardest thing for a European to
:25:44. > :25:49.appreciate is how very long the perspective is. Rise and fall. A
:25:49. > :25:54.history of dynastic cycles that last thousands of years.
:25:54. > :26:03.Periods of war and foreign invasion brought to an end by strong
:26:03. > :26:06.Government. Whose policies sow the seeds of their own destruction.
:26:06. > :26:15.Dynasties collapse, and the whole process starts again. So where are
:26:15. > :26:19.we now? There is a very strong central Government. There's an
:26:19. > :26:27.overall stability in society. People's living standards are
:26:27. > :26:37.improving. There is the development that is very fast. So this is,
:26:37. > :26:47.
:26:47. > :26:52.according to the history point of Chinese people really never have
:26:52. > :26:56.had it so good. The gospel according to the Party is at the
:26:56. > :27:04.end of a century of humiliation, was the achievement of Chairman Mao
:27:04. > :27:08.moo and the communists. -- but and the communist, but fear
:27:08. > :27:14.of dynastic collapse is hard to shake.
:27:14. > :27:18.The old summer palace of the Chinese Emperor's, took generations
:27:19. > :27:24.to construct. Then, in this supposed earthly paradise, a
:27:24. > :27:30.Chinese Emperor had the temerity to seize and torture two British
:27:30. > :27:37.envoys. If you ask the average British citizen what Britain did in
:27:37. > :27:43.China, 150 years ago, but the chances are he or she couldn't tell
:27:43. > :27:46.you. In fact, what Britain and France did was this. They took the
:27:46. > :27:52.Emperor's summer palace and they destroyed it. They destroyed it
:27:52. > :27:58.because the Emperor wouldn't agree to the demands of western kalalism.
:27:58. > :28:02.The British may have -- capitalism, the British may have forgotten that,
:28:02. > :28:08.but the Chinese haven't. The generation who will forge the
:28:08. > :28:14.historically aware society, are in no doubt about the story the ruins
:28:14. > :28:18.tell. Do you remember this as humiliation? Yes. For give but not
:28:18. > :28:23.forget. China is become -- forgive but not forget, China is becoming a
:28:23. > :28:28.very strong economy. In the west they fear that China will bully
:28:28. > :28:36.them. We Chinese don't think so. you think China will become a
:28:36. > :28:41.superpower? In the future, in the 21st century. Probably. I think,
:28:41. > :28:46.yeah. As a Chinese, I would like to see it. You would like to see China
:28:46. > :28:50.as a superpower? That means more responsibility, more influence on
:28:50. > :28:56.this world. It doesn't mean more military threat to this world.
:28:56. > :29:00.All this destruction was done in the 19th century, the 19th century
:29:00. > :29:05.really was the century of the European imperial powers, the
:29:06. > :29:11.British, mainly, but also the French. Who does the 21st century
:29:11. > :29:18.belong to, do you think? For most people they say it is China's.
:29:18. > :29:21.China can make the rise continue for another 15-20 years, and China
:29:21. > :29:26.will inevitably become another superpower, because of the size of
:29:26. > :29:30.its population. But the fear of chaos in this enormous country is
:29:30. > :29:36.ever present. Even university professors believe the antedote is
:29:36. > :29:41.firm Government. Which means the question of world status is a
:29:41. > :29:46.political one. It is really decided by the Chinese Government, or the
:29:46. > :29:50.Chinese political leadership. If the Chinese leadership can provide
:29:50. > :29:55.a strong and creative leadership, for this country, and then this
:29:55. > :29:59.country will move in that direction. If the political leadership is a
:29:59. > :30:06.weak and directs the country in the wrong direction t may collapse at
:30:06. > :30:11.any time. And where does this leave Britain? In the garden shed,
:30:11. > :30:17.according to this animation. This seems to be how the Chinese see us
:30:17. > :30:21.now. It hasn't gone quite to plan, the scheme was for the
:30:21. > :30:27.manufacturing to be outsourced to the world's most populist nation,
:30:27. > :30:32.while the clever, creative stuff, stayed in Europe. Not any more.
:30:32. > :30:36.Britain likes to call itself the design capital of the world. Well,
:30:36. > :30:43.get this, even the animations for the London Olympics are made in
:30:43. > :30:49.China. The young people here don't see themselves as labourers, they
:30:49. > :30:54.have set their sights on the clever, creative stuff done in Europe and
:30:54. > :30:58.North America. This is not how complacent, western Governments saw
:30:58. > :31:02.things developing. And history shows that economic gain is
:31:02. > :31:09.generally the forerunner of political and military power.
:31:09. > :31:13.My view is that when China gets the military capability, larger than
:31:13. > :31:22.the US, the leadership will inevitably fall on China's shoulder,
:31:22. > :31:29.no matter if they like it or not. Increasingly, the lucky ones in
:31:29. > :31:33.China's megacities, live a life of unequivocal modernity.
:31:33. > :31:40.The ambitions are grand, that China becomes a global centre, not just
:31:40. > :31:45.for commerce and design, but for power and influence.
:31:45. > :31:55.But can you have the freedom to create without the freedom to
:31:55. > :31:55.
:31:55. > :32:01.think? My internet access only limited to the website which the
:32:01. > :32:06.Chinese Government allows me to visit. In the cultural revolution,
:32:06. > :32:12.Mao Yushi, was sent to be reeducated in the countryside and
:32:12. > :32:17.almost starved to death. Mr Mao shares the same name as the great
:32:17. > :32:22.leader. But Mr Mao has been named as a party menace, his offence? He
:32:22. > :32:28.has written a book criticising the cult of Chairman Mao. If people
:32:28. > :32:35.cannot even challenge history, can China really challenge the west? Do
:32:35. > :32:39.you think that China will become a superpower in the sense that the
:32:39. > :32:49.United States or the Soviet Union, as was, were superpowers? I don't
:32:49. > :32:53.
:32:53. > :33:00.think so. China doesn't provide any hope, any hope for the ordinary
:33:00. > :33:08.people in the world. Nobody would migrate to China. People want to
:33:08. > :33:12.migrate to yuen Europe or Canada or Australia or the United States.
:33:12. > :33:22.It doesn't have any attraction. So I don't think China can be a
:33:22. > :33:23.
:33:23. > :33:28.This current dynasty looks likely to remain unchallenged, as long as
:33:28. > :33:33.it continues to provide a level of comfort, unimaginable to China's
:33:33. > :33:37.ancestors. For ordinary Chinese, the country's
:33:37. > :33:44.international status is a lot less important than the prosperity
:33:44. > :33:47.brought by this strange marriage of communism and capitalism.
:33:47. > :33:52.There truly never has been a time in Chinese history, when the
:33:52. > :33:58.country has got so much richer, so quickly. The industry of the world
:33:58. > :34:03.has come calling, and this time, it's been allowed in. The world has
:34:03. > :34:13.yet to see what China expects in return for its labour. But expect
:34:13. > :34:15.
:34:15. > :34:19.something it certainly will. Viscount McCartney's trade mission
:34:19. > :34:22.scuttled away from Beijing with what dignity it could. Claiming
:34:22. > :34:27.there wasn't a single proper lavatory in the entire company.
:34:27. > :34:30.That sort of abuse won't work any longer, and nor will military
:34:30. > :34:35.adventurism. It is maybe time for the rest of the world to learn
:34:35. > :34:38.something about the cycles of Chinese history.
:34:38. > :34:42.Tomorrow night in another film I will be exploring what it is like
:34:42. > :34:45.to live under a Government which allows people to get filthy rich,
:34:45. > :34:50.but denies them the chance to change their system of Government.
:34:50. > :34:54.But before that, our diplomatic editor and economics editor are
:34:54. > :34:58.both here. First off, the amount of trade that the rest of the world
:34:58. > :35:01.does with China, how big are the figures? There are two challenges
:35:01. > :35:05.that face China, one is trade, the other one is the balance of what
:35:05. > :35:09.drives its own economy. Let's have a look at the famous trade
:35:09. > :35:15.imbalance. This is in manufactured goods, Chinese trade in balance
:35:16. > :35:19.with the USA takes off when they join the WTO, $150 billion a year,
:35:19. > :35:22.falls back in the recession. This drives the demand for the Chinese
:35:22. > :35:26.currency to be freed up so Chinese goods can become dearer and
:35:26. > :35:29.Americans can get their jobs back. But it is complicated, let's
:35:29. > :35:33.animate the second line. This is China's trade balance with the rest
:35:33. > :35:37.of the world, excluding America. So that includes Japan and the
:35:37. > :35:45.European Union, it is not so bad. This is because, in part, China
:35:45. > :35:48.itself is a massive importer. The actual complexity of this. It is an
:35:48. > :35:52.America-China thing, we should remember that, more than China
:35:52. > :35:57.versus the rest of the world. Now let's look at the internal balance.
:35:57. > :36:00.This line shows the proportion of the chine naes economy that is
:36:00. > :36:04.driven which investment -- Chinese economy that is driven, which
:36:04. > :36:09.investment in housing, railways, by the Government, prie. Investment T
:36:09. > :36:12.has approached 50% in the anti- crisis period, the fiscal stimulus,
:36:12. > :36:17.their response to the crisis was to boost railway building and road
:36:17. > :36:23.building. Let's have a look at consumption. This is Government and
:36:23. > :36:26.private consum. As you see it has - - consumption. As you can see it
:36:26. > :36:31.has fallen. China wants to boost its private consumption, so people
:36:31. > :36:34.you saw in the film can start buying holidays and cars and
:36:34. > :36:39.financial products. They agree they have to do it. Along the way, the
:36:39. > :36:42.question, who gets what? Do the Chinese workers on �70 a month,
:36:42. > :36:47.eventually get a kind of wage that makes western workers able to
:36:47. > :36:51.compete with them. Mark, are we seeing this
:36:51. > :36:55.translating into national, political power? Yes, there is a
:36:55. > :36:58.tremendous raft of issues where western countries want to co-
:36:58. > :37:02.operate fruitfully with China, particularly in the UN Security
:37:02. > :37:07.Council, where China is one of the five permanent members, veto powers.
:37:07. > :37:10.So on a whole raft of issues, from should sanctions on Iran be
:37:11. > :37:20.extended, through to what do we do about Syria. All these things are
:37:20. > :37:24.vietia. You talked about the cycles of history, the current party is
:37:24. > :37:28.still among the view that Mao espoused, great power politics.
:37:28. > :37:34.They rejected that, they saw themselves as leaders of the Non-
:37:34. > :37:38.Aligned Movement against the packs- American piece. China has stood in
:37:38. > :37:43.the way of votes on military action. The fascinating thing will be as
:37:43. > :37:47.they develop more of a sense of themselves in a great power in the
:37:47. > :37:50.coming years, whether they are moving away from being against
:37:50. > :37:53.packs-America, to creating their own vision.
:37:53. > :37:56.Have we any clues to that? Some people would say, in the region,
:37:56. > :37:59.that they are rather concerned. They look for example at some of
:37:59. > :38:03.the trappings of great power status that China is beginning to acquire.
:38:03. > :38:08.Some of them harmless enough. The space programme. Scientific
:38:08. > :38:14.progress, all of that kind of thing who could object to that. The
:38:14. > :38:18.substantial increases in military spending do cause more concern. The
:38:18. > :38:22.fact in recent months China's aircraft carrier has been at sea.
:38:22. > :38:25.We can see some of the satellite images. This was a carrier the
:38:25. > :38:29.Russians couldn't afford to finish that China bought and is now
:38:29. > :38:35.commissioning. Some regional powers are worried about this. They are
:38:35. > :38:39.thinking will China be exacting a more nationalist influence in terms
:38:39. > :38:43.of China minorities and in the specific region. The Chinese
:38:43. > :38:46.Government insists it is a taking a more full part in international
:38:46. > :38:50.affairs, contributing to UN peacekeeping and that kind of thing.
:38:50. > :38:58.But are some of these trappings of great power status going to be put
:38:58. > :39:06.to more traditional, almost nationalistic objectives. If you
:39:06. > :39:11.would be happy for a lifetime, grow flowers. The man attending to
:39:11. > :39:16.Chino-British flowers is the Chinese Ambassador, he's with us
:39:16. > :39:22.now. Happy new year. Let's try to define
:39:22. > :39:28.the terms, are you a communist? we think China is the ruling party,
:39:28. > :39:32.the ruling party is the communist party, but the communist party only
:39:32. > :39:37.constitutes, and now we have 17 million party members. But you have
:39:37. > :39:41.to remember that China is a country with 1.3 billion in its population.
:39:41. > :39:51.I don't think you can call China a communist party, a communist
:39:51. > :39:55.country. Are you a communist? as you would not call the UK a
:39:55. > :40:04.Conservative country. You could call it capitalist country?
:40:04. > :40:07.could say China a socialist country, with a Chinese characteristics.
:40:07. > :40:12.That is a difference. Talking to young people in particular in
:40:12. > :40:15.Beijing, I very strongly got the impression that they were pretty
:40:15. > :40:19.optimistic about China's international role. They saw this
:40:19. > :40:23.as a century which was developing very much in a way that was going
:40:23. > :40:30.to make China a much more significant force in the world. Do
:40:30. > :40:33.you think that? China will certainly contribute its part for
:40:33. > :40:40.maintaining peace, prosperity of the world. But we do not see China
:40:40. > :40:45.as a superpower. I would characterise China as the largest
:40:45. > :40:50.developing country, which increasing international influence
:40:50. > :40:54.and responsibility. But people look at what China does on the Security
:40:54. > :40:58.Council, for example, over the question of, for example, you
:40:58. > :41:04.opposed sanctions on Syria, sanctions on Iran, and they wonder,
:41:04. > :41:08.you know, what you are trying to achieve? That's not correct
:41:08. > :41:18.impression. In fact, China voted four times with other members of
:41:18. > :41:21.the Security Council, on the issue of Iran. China is strongly opposed
:41:21. > :41:28.to the Iranian nuclear programme. On the other hand, we believe
:41:28. > :41:34.diplomatic and peaceful solutions are the most beneficial solutions
:41:34. > :41:39.to the problem. It is in the interests of maintaining peace and
:41:39. > :41:46.stability in the region. But do you accept that Iran is a potential
:41:46. > :41:50.threat to world peace, a nuclear- armed Iran? I would say Iran with a
:41:50. > :41:55.nuclear weapon is not in the peace, not in the interests of peace and
:41:55. > :41:59.stability in the region. That is why China makes it very clear, from
:41:59. > :42:08.day one, that we are strongly opposed to nuclear weapons
:42:08. > :42:13.programme of Iran. That has been reaffirmed by the Chinese premier
:42:13. > :42:17.in his recent visit. Why not impose sanctions then? There is already
:42:17. > :42:23.sanctions in place, we don't think sanctions for the sake of sanctions
:42:23. > :42:28.serve the purpose. We also encouraged diplomatic negotiations,
:42:28. > :42:36.to engage Iran for a peaceful settlement. Do you think China has
:42:36. > :42:41.a moral role in the world? I think China has a role to play in terms
:42:41. > :42:45.of a voice for our opinions for a more peaceful, harmonious world.
:42:45. > :42:51.What are you trying to promote, the United States, for example, says it
:42:51. > :42:55.promotes, and will go to war, to promote democracy. What are you
:42:55. > :42:59.trying to promote? We are promoting a harmonious world. We believe the
:42:59. > :43:06.world will be more peaceful, prosperous, if all countries
:43:06. > :43:11.respect each other, rather than to immos their own ideas and systems
:43:11. > :43:16.on to others. Which believe mutual respect -- impose their own ideas
:43:16. > :43:20.and systems on to others. We believe mutual respect and
:43:20. > :43:23.accommodating, and mutual work for a common good and security are in
:43:24. > :43:28.the interests of peace and stability of the world. We are
:43:28. > :43:32.strongly opposed to any military sanctions. Military solutions.
:43:32. > :43:38.What about economic power, China sits on this mountain of thrillions
:43:38. > :43:44.of dollars worth of foreign exchange, what is that for? What's
:43:44. > :43:51.that for. You know China is still relatively a poor country. Though
:43:51. > :44:01.China now is number two in terms of GDP, after only the United States
:44:01. > :44:04.
:44:04. > :44:09.now. But per cap at that GDP, China is still behind 100 countries.
:44:09. > :44:16.There is several hundred billion living in the countryside. There is
:44:16. > :44:20.still 155 million people living on under $1 US a day. This is a huge
:44:20. > :44:23.poverty line. There is an enormous responsibility for the Chinese
:44:23. > :44:27.Government to improve the livelihoods of those parts of the
:44:27. > :44:33.population of China. Let as talk a little bit about the difficult
:44:33. > :44:39.matter of human rights. Now Leymah Gbowee, the well known artist, says
:44:39. > :44:43.-- Mr Wei Wei, the well known artist, says without free speech
:44:43. > :44:47.you are living in barbaric world. Do you understand what he's
:44:47. > :44:55.getting? I think he has the freedom to express his view, otherwise how
:44:55. > :45:04.could you get his opinion on this. He has been in prison, of course?
:45:04. > :45:10.He has been under investigations for his evading of tax, destroying
:45:10. > :45:14.his accounting books. In any country this is, you know, if you
:45:14. > :45:20.are in a country that is ruled by law, you have to respect, you have
:45:20. > :45:26.to abide by the law. Nobody in the country ruled by law should be
:45:26. > :45:33.above the law, or outside the law. Even this called well known artist,
:45:33. > :45:36.he has to abide by the law. When he violated Chinese law, he should be
:45:36. > :45:42.punished. There is no doubt about that. Even in Britain. He should be
:45:42. > :45:47.free to say what he likes, shouldn't sne I think so. Otherwise
:45:47. > :45:51.--? I think so. Otherwise how can you know his opinions on this issue,
:45:51. > :45:56.if he's forbidden for voicing his opinions. Mr Ambassador, thank you
:45:56. > :46:01.very much. Well now, that's it for now if you
:46:01. > :46:05.are among our more northerly viewers, you may want to look out
:46:05. > :46:09.the window for the glimpse of Northern Lights, they were seen as
:46:09. > :46:19.far south of Yorkshire last night. We will leave you with some
:46:19. > :46:21.
:46:21. > :46:27.# People think style # Rules our life
:46:27. > :46:33.# Some people think otherwise # Where did you go
:46:33. > :46:38.# On that big black night # Did you take the coast road
:46:38. > :46:41.# Back through your life # She's the sand
:46:41. > :46:45.# The moon the stars # That shine a light
:46:45. > :46:48.# And say # And say
:46:49. > :46:52.# They will do all right for me. Pretty cold outside overnight
:46:52. > :46:55.tonight. As wet weather arrives, we will see snow for the morning.
:46:55. > :46:59.Across the hills of southern Scotland into northern England.
:46:59. > :47:02.Even at lower levels there could be snow, possibly as far south as
:47:02. > :47:07.Lincolnshire and East Anglia. It shouldn't last long, but it will be
:47:07. > :47:11.a cold grey day across the east. Temperatures 3-4. Miserable across
:47:11. > :47:15.much of East Anglia and the south- east. Expect dull, cold and wet
:47:15. > :47:18.conditions to last well into the afternoon. It is a bit milder
:47:18. > :47:21.further west, temperatures reaching double figures, it is still grey. A
:47:21. > :47:24.lot of mist around the coast sitting over the hills and the
:47:24. > :47:28.moors, dull, damp, drizzley conditions persisting on the west
:47:28. > :47:32.coast of Wales throughout the day. It is milder here, it is for
:47:32. > :47:37.Northern Ireland, 10-11 Celsius, but a grey, dismal day. The west
:47:37. > :47:40.coast of Scotland also grey and damp, in the east there could, for
:47:40. > :47:44.a time be snow flurries. The weather will get milder for all
:47:44. > :47:47.places, even the east, by the time we get to Wednesday. It is still
:47:47. > :47:49.looking pretty grey. Cloud around, further outbreaks of rain on
:47:49. > :47:53.Wednesday, particularly across Scotland and Northern Ireland. The
:47:53. > :47:57.rain will slowly creep into parts of England and Wales. Much of
:47:57. > :48:01.England and Wales, dry on Wednesday, but still dull. However, on
:48:01. > :48:05.Wednesday, eastern areas will see much higher temperatures,