21/02/2012 Newsnight


With Jeremy Paxman. Is the row over shelf stacking for benefits really just snobbery? We unpick the Greek bail out deal. And John Lanchester's new book.

Similar Content

Browse content similar to 21/02/2012. Check below for episodes and series from the same categories and more!



The Government scheme to get young people into work is in trouble, one


after another, companies expecting to take part in the scheme have


pulled back, in the face of protests that work experience


amounts to slave labour. Is doing this kind of thing,


without proper pay, a way into regular work, or just the state


subsidising private enterprise. Would you do it if you were on


benefits? We will ask these three. The Greek Prime Minister pulls off


his bailout, but could a minority of banks and hedge funds still kill


it by refusing to co-operate, we will talk to their chief negotiator.


It is not inconceivable if too many go in that direction, the system


breaks down, we will not have a successful conclusion to this deal,


and then where will they be? This nursery is run for profit,


what is wrong with the idea of letting businesses run state


schools on the same basis? And it is probably the most international


city on earth, but do Londoners share anything beyond their streets.


Author, John Lanchester, is here to talk about his big new novel,


Capital. Last week they were delighted to be


part of a Government scheme which earned them money for taking on


young people on work experience, today, Tesco hurriedly changed its


position, from now on a young person taken on will be offered a


wage. By tonight numerous retailers had joined the retreat. The


Government scheme to get young people into a job is still alive,


but it is very battered. Those who oppose the device as sweated labour,


are said a cabinet minister today, job snobs. We report.


The bright lights of a bustling high street offer much, but not the


one thing Ben Perkins is looking for. He has had just one paid job


since he grad waited last year -- graduated last year. Christmas work


with HMV. He felt undermined when job seekers on the Government work


programme got taken on. And then as I found out, they said, this work


programme is happening, people are coming in who are unemployed, on


job seekers, come to do work, three people, like, that doesn't chime


with work experience which is the whole idea of this kind of


programme. The row began when Tesco placed an


ad for a night worker, and they would be paid their job see,


allowance, just �53 a week. The job was mistakenly described as


permanent, in fact it was part of the voluntary work experience


scheme. Plays.S of up to eight weeks, in return for benefits and


expenses. The outcry over the ad proves there


is such a thing as bad publicity afterall. Last week Tesco defended


the scheme, now they are offering to abandon it. In future people on


work plays.S can actually get paid for them, with the offer of a


guaranteed job if all goes well. Tesco are calling their about turn


a major confidence boost for young people wanting permanent work. The


Government is putting a brave face on things. I'm pleased when a


company expands what they do. If they do the work plays. Properly,


they will have experience. We get a better offer than we had before.


That is good news for unemployed young people. But there was no


escaping the sound of gears going into reverse, as more high street


names decide they too, like Waterstones and TK Maxx, will pull


out of the placements, Matalan has paused the programme, in the face


of what it calls, negative speculation, and Argos wants to


make sure no-one is disadvantaged working on the programme.


Sainsbury's has already opted out, but today it admitted it has had to


remind local branches of that fact, after some of them signed up free


recruits. This was after they had been approached by Jobcentre plus.


Meanwhile, other private sector providers are to be the subject of


an official complaint to the September for Work and Pensions, by


Oxfam. The charity firmly declined to take part in the work programme,


concerned that those who refused to join, or failed to complete a


placement, would lose benefits. someone refuses to participate or


needs to leave the scheme, their benefits can be stopped a minimum


of 13 weeks and potentially 26 weeks. This cessation of benefits


isn't compatible with Oxfam trying to overcome poverty. You had an


opportunity to help young people get work and you turned it down?


Absolutely not, it was nothing we could have accepted with the


cessation of benefits and putting people into destitution for a


minimum of 13 weeks, we Coventry consider that. With 700 --


couldn't consider that. With 700 stores, Oxfam has been unable to


prevent forced volunteering by the providers in the scheme. We would


like to ask providers to stop contacting our shops about schemes


with sanctions to benefits. You have a great voice. The Deputy


Prime Minister was at pains today to show the coalition is tackling


youth unemployment. Firms will be paid to take on 16 and 17-year-olds.


But more people are saying the emphasis of the work programme


should be on jobs that pay. The riots that ripped through Haringey


last summer, gave added urgency to the council's jobs fund, which will


be launched this spring. It is sped spending �2 -- spending �2 million,


directly subsidising people to create jobs. Young people need


high-quality, long-term sustained experience. That is why we have


been working with local and national employers based in the


borough, to make sure we can put in place the year-long schemes.


has moved back to his parents in Lincolnshire, and back on to


benefits, he's volunteering at a radio station, to use his media


degrees, but fears a double bind, as a jobseeker he may lose out to


those doing unpaid work experience. He may be compelled to take up an


official placement himself. With us now is the Conservative MP,


Harriett Baldwin, on the Work and Pensions select commit year, and


three people who have all experience of unemployment and


Government work schemes. Do you understand why some people


find these schemes offensive? have to understand where we came


from. In terms of the inheritance with a lot of young people out of


work. The situation used to be that if you were a young person, and you


were offered work experience, you had to come off benefits, I


actually think that is profoundly unfair and against social mobility,


because, in fact, a lot of prosperous parents can afford for


their parents to do work experience and lose those benefits. Where as


those who rely on the benefits needed to keep them when they got


the work experience. Do you understand my question that some


people find this offensive? understand. Do you understand why


people find it offensive? It is offensive that it has been


portrayed by a lot of people as being something that doesn't help


young people. You know, Jeremy, in an organisation like the BBC that


employs a lot of people on work experience. We have contradictory


experienced here, helps some and not others, but my question is, do


you understand why some people find it offensive that somebody can be


taken on, not be paid in a job that might at least be paid minimum wage,


and be paid by the state, and the employer is able to use unpaid


labour? Does the BBC offer work experience places for students.


doesn't bother you? It is widely used for short work placements.


These are very short work placements.


OK, all of you three have had experience of these schemes, of one


kind or another, it worked in your case, didn't it? Yes. Tell us what


happened? My experience of volunteering was, it is not


necessarily the scheme that is going out now, I wasn't forced into


it, I actually went out and applied for a scheme called V-Talent, I was


working for a year within youth services, that was something I was


passionate about. Throughout that course I was guided, I was helped,


I was given qualifications, I was given certificates, I was helped at


the end of it on getting a job. What was it about being on a course


like that, in that sort of environment, that changed things


for you? I think because it was something that I was passionate


about, and because it was voluntary, I think if you are forced into it,


I think it will be negative, I think it will have knock-on effects.


I think it will give you a negative view on the work environment itself.


I think if you're not passionate about work, why would you do it.


There should be more things voluntary for them to. Have you had


experience of one of these schemes? I have, it was a complete waste of


my time. Four weeks, well, if you get on to phase 2 job seeking,


which is the point where you are put into these schemes, then you


have four weeks, absolutely mandatory, you have no choice,


...Doesn't That get you into the habit, with the greatest of respect,


of getting out of bed and going to a place of work? With the greatest


of respect, I had eight years previous experience to this of


getting up and going to a job. shouldn't get mixed up Work Fair


and short periods of work experience for young people.


talking about both schemes, I did the short scheme and now on the 26


weeks one, both were ineptly handled. In what sense? Firstly


they are, anyone who is involved in it gets dragged off to do things


that, by force, basically. Secondly, they are administered badly.


think we're confusing two things here, the work experience that was


getting all the media attention today, is for young people who are


given short periods of experience, so that they can have something on


their CV to show to employers. are a young person, have you done


any of these schemes? Actually the work programme is a re-established


programme, it was run by a company called Caller UK previously, I was


on the flexible new deal, and I signed to the programme. In about


nine months of the programme, the company got liquid dated because


they failed mis-- liquidated, because they failed miserably to


get people employed. When you look at the current figures,


statistically now, it was 2.3 million to 6.3 million. Let's talk


about your experience, the argument, I think, if I paraphrase it


correctly, is that at the very least, although the precise


employment may be not exactly what you want, it at least gets you into


the habit of going to work, and, re-establish ago work habit?


didn't get me into the habit of going to work. It demote vaited me,


it took away my e-- demote vaited me, it took away me equal


opportunity of rights, you don't have the freedom to choose


something that would practically work. What was getting the media


attention today, was a voluntary scheme for young people to get work


experience. We are hearing about historical experiences of work


experience under the last Government, it wasn't working well


and was complicated. The new thing is a black box approach. If you


penalise someone who agrees to start the programme, by saying if


you don't carry on turning up in an efficient and satisfactory manner,


you will lose your benefits, that is coercion, isn't it? I think you


have to have turned down several jobs before that starts to happen


to you. That is not true. That is not true. I have sat in, with


people on the four-week scheme, I have seen people thrown off


placements. One for speaking too loud, and they had not been to


several interviews. These were all young people on the young people's


scheme. There was two separate young people's scheme that we


encountered. One of them was volumity, the work programme ones


that -- voluntary, the work programme ones that were there were


not voluntary, they were all mandatory, you had to turn up and


take part. It was part of the suppliers' contract with the


Department of Work and pension, that the person they sent to them


will be there for a four-week period, and will have a four-week


work placement. This is different from what we were talking about


with young people. It is a four- week work period, it is not


voluntary, anyone who says it is voluntary is lying. We looked at


the rules earlier and it clearly says it is voluntary?


Department of Work and Pensions sends you to a supplier, the


supplier has in the contract that they will send you for a mandatory,


not a voluntary, mandatory work placement. I think, to be fair, I


think we are confusing two different things here, we are


talking about the work programme that was put out to new contracts,


starting in June, the early indications on that are that about


28-30% of people are put into jobs, compared to about 1.2% at this


stage for the flexible new deal. would like to ask you, why you


think it is that it is an outrage that Governments and departments


acting on behalf of the taxpayer, who afterall has to fund benefits,


shouldn't expect people to do as they are asked and get a job?


I believe it is a complex situation, and what they are doing is to use


the lower percentage of the population who are unemployed, as a


scapegoat, because you still have these bankers getting big lump sums.


Bankers are irrelevant? It is relevant because, they are the ones


you should be penalising for this, not us. We didn't cause the


recession in the first place. So why should we be forced and imposed


a system to force somebody to do something voluntary, for 30 hours a


week, for four weeks consecutively, without a proper wage. I think it


is great that these employers are offering work experience to young


people. They are not, they are now saying, one after another, one big


recoginsable name after another, is saying, this is too embarrassing


for us to continue our connection with the scheme? That is very sad,


because it will mean, from now on it will be people who can afford to


subsidise their children to do work experience, it will hamper social


mobility in this country. So you assert, but if these companies


consider it to be an embarrassment to them, some sort of besmirching


of their name, it is failing? sad that a lot of people waving the


copies of the Socialist Worker have put paid to these companies


offering workers peerence to young people. It is important to get it


on your -- experience to young people. It is important to get it


on your CV early on in life. It is hard to know whether to laugh or


cry if you are a Greek, the other countries cobbled together an


agreement which will make sure the Greek Government get a shed load of


cash and the people will have to work for the foreseeable future.


How can Greece, which couldn't pay existing debts, will pay off an


additional 130 billion euros. A problem for another day.


They talked for 14 hours, which in itself highlighted the gulf between


what creditor countries such as Germany and Finland wanted, and


what the embattled Greeks wanted. In the end the 16 other eurozone


Governments agreed to lend 130 billion your yr roars and pay it


out in tranches over the next two years. Greeks wouldn't have to pay


back loans to banks worth 100 billion euros. In order to get it,


Greece has promised a programme of austerity, unseen in a western


democracy in a generation. Including mass privatisation of


ports, airports and some public utilities, on top of widespread job


and wage cuts. The lenders, who will oversee that, the IMF, the


European Central Bank and the EU, known as the troika, hailed this


morning's hard earned deal. Today's deal is a key remaining building


block of our comprehensive crisis, and with this agreement we have a


real chance to turn the corner and move from stablisation to boosting


sustainable growth and job creation. But the agreement depends crucially


on a number of key, and some might say, optimistic assumptions.


Firstly, that the cocktail of austerity, fresh loans and bank


haircuts, will bring Greek national debt, as a percentage of its annual


income, down from its current level of 160%, to an equally high 120%,


by the end of the decade. That assumes a fair wind at its back. A


leaked internal EU document says it is more likely that debt will be


129% by 2020, and worse, if Greece's run of bad luck continues,


the leaked debt sustainability report says that it may end up


owing exactly as much in eight years as it does today. Or 1.6-


times GDP. The bailout deal also assumes that


the private sector will grow enough to make up the shortfall from a


dramatically shrinking Government sector. That is a big ask, given


the massive capital flight that Greece has endured over the past


two years. We really don't know what might happen in eight years


time. It is very hard to project. Even the projections made in 2010


at the time of the first loan are very far from the reality we now


see. I would have thought it is quite difficult, particularly when


tax receipts are falling, VAT and other tax receipts are falling


quite sharply, it is very difficult to know that austerity would


deliver much of an improvement at all. The Greek Finance Minister,


Evangelos Venizelos, says today's deal means his country avoids a


nightmare scenario. It is true, they do get the bailout, and they


stay within the warm embrace of the eurozone. But with unemployment at


21%, GDP shrinking rapidly, and private wealth abandoning the


country, it is hard to think of any other description for the current


situation other than a nightmare scenario, that is before you drill


into the detail of today's deal. Like will the Greek populus accept


on the ground what their leaders have Bartered in Belgium. With


elections planned for late April, opinion polls suggest a big lurch


to the extreme parties. Who may want to tear up today's deal.


This second bailout also assumes that Greece's creditor banks accept


write-downs in the face value of their bonds of 53.5%. Something


that they themselves ruled out only last autumn. I think for Greece the


50% nominal reduction is, in my view, at the border line of what


could be reasonably viewed as voluntary. Any further dereduction


in -- reduction in value and losses would be put at non-voluntary.


begs the important question, how many of Greece's lenders will sign


up for the proposed haircut, which is looking like an all over blade


one. Greece said at least two- thirds of the creditors have to


sign up for the debt write-off to work. If they don't reach that


threshold, it might be Greece's banks, rather than the political


elite that will pull the plug on Greece.


To find out, earlier I spoke to the man at the forefront of the Greek


debt talks, the managing director of the Institute for International


Finance, Aaron Delahunty. I asked him, how much -- Charles Dallara, I


asked him how much of the 200 billion cuts in Greece he


represented? We represent under half of that, just under 100


billion euros. We have communication with an investor base


much larger. Our formal representation is just under 100


billion euros. Is this deal dependant on a certain level of


participation? Certainly it is. We have not judged, nor has the Greek


Government set a particular minimum threshold, but certainly I think we


all realise, that for this economic programme to work, and for the


cloud of debt burden to be sufficiently cleared off the Greek


horizon. That we will need very high participation in this deal, we


will work to achieve that. But you have no guarantee you will get a


very high level of participation, do you? No, no guarantee at all.


You do the best you can in designing these deals. We respect


the right that each investor, including the members of our own


steering committee, who have endorsed the basic perameters of


this deal, has the right to look at the documentation and value wait


the costs of the deal, and make their own judgment. We feel


confident once investors have sorted dlu the documentation, and


looked at the -- through the documentation and looked at the


perameters and benefits, that a large number of investors will come


in. What proportion of their loans will investors lose? They will lose


just over 50% of the nominal value of their current claims, in terms


of the net present value, the economic value of the loans, they


will lose north of the value of 70%. There is substantial loss embedded


in this deal, there is no use trying to hide that. It was


necessary, if we were to deal effectively, and determinately,


with the scale of debt burden, which Greece is simply unable to


cope with. By your own admission, you only represent about half of


the total debt exposure here. What is to stop someone like a hedge


fund or someone, who has bought Greek debt, trying to trigger the


insurance involved in a Credit Default Swap? There is nothing that


I'm aware of, Jeremy, that will definitively stop someone who wants


toe stake such action. There is no iron -- to take such action. There


is no iron-clad guarantee as we discussed earlier, that individual


investors might not contemplate counter-productive activity here.


They have the right, the legal rights, the market judgments to


make, but we are convinced that when you look at the total picture


here, that the overwhelming bulk of investors will consider this a


favourable transaction, which benefits not only the narrow


contours of the balance sheet, but the broader conure tours of the


market place, which is -- contour of the market place. If the


insurance system worked, they could recoup 100% of the money they lent


the Greeks, instead of something like 30%? It is not inconceivable,


if too many go in that direction, though, the system breaks down, we


will not have a successful conclusion of this deal. And then


where will they be. Judgment calls have to be made here. I'm


encouraged that the overwhelming bulk of investors we have been in


communication with, not just those we formally represent, but those


outside the formal umbrella of our Steering committee and investment


committee, with whom we have been discussing the broad strategy, see


the broader benefits of this. We will have to wait and see, of


course, it will be up to the Greeks working with their agents to go out


and mobilise support, but once we see the formal, final details of


the offer, we are also going to give support to this deal as best


we can. But Mr Dallara, of course European


Governments believe in saving the euro, it is the only game in town.


It is a political project. You are acting and talking as if these


financial institutions are some sort of charity? No, I just think -


- No, I just think that most of the CEOs that we work with, it is a


wide range of financial institutions. It includes state-


owned insurance firms, it includes prove detention insurance firms,


banks, hedge funds, Asset Management firms, not just head


quartered in Europe, but the US and elsewhere. The bulk of the CEOs


have a broud perspective of what is in the interest of -- broad


perspective and what is in the interest of their balance sheet and


investor base. That is why they do not consider it an issue of charity,


but an issue of looking at long- term cost and benefits.


The Education Secretary claimed today that the Government was


Marching towards the sound of gunfire, there speaks a scrappy


little Scot and reformed journalist. But the readiness to have a fight


with the educational establishment is yet to lead to the wholesale


reform of the schools system in England, which we were promised


when the Tories asked for our votes. The favourite wheeze of Free


Schools, set up independent of local authority control, has so far


yielded a grand total of 79 such establishments. Tomorrow the


organisation called David Cameron's favourite think-tank, will suggest


they could make more programme if the Government wasn't so allergic


to get -- progress, if the Government wasn't so allergic to


letting private companies get involved. Shrove Tuesday in central


London, not an unusual nursery, it is funded through a mix of public


and private money, and profits can be made. They are, in is over half


of our nurseries. These kids will grow up and go to schools less


unusual. Fully funded by the state, and unlike at nursery level, there


is no chance of companies that might make a profit getting


involved. Why do we left profits in caring for our tiniests, but not


further up. That is the question think-tank exchange is asking, they


think the Government's flagship policy, setting up Free Schools


outside state col could learn from this. This is the right thing to.


Do we urgently need more state schools in Britain, the Government


doesn't have money to spend, bringing in private money could


bring in expertise. Advocated point to Sweden, there, they say there is


a massive rise in children attending Free Schools, because


they were run by profit-making sectors. We could do this, we know


we could, because we have been doing it successfully, parents have


bought into it. The Cameron Government is in a hurry to deliver


policies before the next election. Free Schools are not working as


they would like. Many senior advisers think they should go the


whole way, bring in profit-making companies to Free Schools and allow


the policy to flourish. The politics of putting children's


learning in the hand of profit- making companies has a fraught his


treatment some in the Government pushed it but Lib Dems ruled it out.


It is probably dead. Here is why. In one poll in the National Union


of Teachers, an organisation against Free Schools. Parents were


Policy Exchange think they have come up with a compromise. We don't


have to choose between a traditional for-profit model, we


could have something in the middle, schools owned and run by the


teachers who work in them. We have a situation where a third of


children in some parts of the country are missing out on their


preferred school, as the number of children needing school places go


up in places like London increase, we will have a schools' places


crisis, unless we have new money from somewhere to bring into the


state sector to increase the numbers of places. Critics say it


is about ideology rather than basic education needs. There are clearly


issues in the school system that need reform and we need improvement.


But bringing in the private sector is not necessarily the way to do it.


We have plenty of robust national evidence which shows the best way


to improve schools is improve the quality of teaching, bring in


effective school leadership, provide clear accountability to


parent, there are plenty of ways of doing it which don't involve the


private sector. The The balance of evidence shows in Sweden that Free


Schools bring up standards, and in the US for-profit schools increase


standards. The support for Free Schools coming your way is not high.


The Conservatives believe by 2015 they may have as many as 500 Free


Schools, without the need for help. In their darker moments, when


Tories worry about their legacy, they reach for palatable ways to


implement their own agenda. As policy makers come up with things


to sell to the Liberal Democrats. With us now is Graham Stuart, chair


of the Commons Education Select Committee, and Mary Bousted,


general secretary of the general teachers union, the ATL. What can


the private sector do that the state can't? Two things Policy


Exchange identified, additional capital and a shortage of places,


and we want parental support we have to have surplus of places, and


additional expertise and innovation from the private sector. Those are


the two key benefit that is could come from allowing the profit


sector into education. Given that money is short, school places are


going to get short, it is an obvious solution, isn't it? Not at


all, the problem with the profit motive is schools could be set up


where they are not needed. In that case they will fail? Children are


not cans of beans, you don't want them in schools that fail, you want


regulation of quality. They will only fail because there are not


enough children? If there are no enough children, you don't have the


staff, or the curriculum. So it is a commercial misjudgment, not the


state's problem? It is the children's problem and the state's


money paying for schools to fail. Profit is for profit, schools


should be more pupils. Your objection is ideolgical? No based


on research evidence. There is no evidence whatsoever, that report


was wrong from the director of Policy Exchange, there is no


evidence that for-profit schools raise standards, they haven't done


so in America, they certainly haven't done so in Sweden. What do


you make that have? I think Mary's perhaps wrong on that issue, the


evidence is mixed. I think is the best you could say. The for-profit


sector it is not obvious that standards have been raised in


America and Sweden, we have probably got the largest sector of


for-profit schools there. They are not leading he Lee lights globally,


in terms of he had -- leading lights globally in terms of


education. If we look at the best countries in the world for their


education system, what you don't find in Korea or Singapore or


Finland is a big for-profit sector. On the other hand, if we can bring


in extra capital and do what Policy Exchange says, we can have a social


enterprise model, pilot it and see if the extra money and expertise


can raise standards, that is surely what it should be about. It


shouldn't be a right, left, ideolgical bat, between luddite


unions on the one side. Luddite unions, here we go again, it is odd


that if it is such an attractive model your own party hasn't


embraced it in Government? It is a coalition Government. Left to your


own devices you think they would? think there are many in the


Government who would be sympathetic to it. As I say, the evidence is


mixed, and Policy Exchange is suggesting a social enterprise


model where half the profits are retained by shareholders and the


other half reinvested in the schools. If the private sector


concentrates on schools serving the poorest, and must underprivileged


areas of the country, and they can bring improvement to those children


who need it most, surely, even people like Mary, who have a knee-


jeark opposition to anything to do with the private sector, could set


that asite, put the children first, instead of her own members'


interests for once. You have said yourself that there is no evidence


it would put the children first. Let's be clear there are real


dangers. Let's do pilots like Policy Exchange suggest. There are


real problems. Even the pilots are dangerous. Look in America with the


charter schools, $400 million for charter schools, what have they


found out, school management companies raking off between 5-18%


of the school's income. Lack of resources, kids being taught in


huts, kids not having books, children being charged $600 to


gratd wait. What they found in flour -- grat wait. What they found


in Florida is no real control. that was the true picture in Sweden


and America there would be wholesale desire to get rid of for-


profit. If you go to Sweden, historically socialist Sweden, is


there anybody in the political landscape who think you should get


rid of the for-profits, I don't think you are painting a fair


picture, let's have pilots, stop opposing all change just because it


proves for-profit. They don't think they should get rid of Free Schools


in Sweden, but they issued a report and investigation into how Free


Schools and the management company of Free Schools in Sweden are


cutting corners in order to make profit. He said we are finding they


don't have libraries, or school nurses, they don't have a rigorous


curriculum, they are letting the kids do what they want. Strange


they don't want to get rid of them. They want to regulate them better.


That is a different argument, we should pilot it, try to get the


framework right, we have to incentivise the right behaviour, if


we can target it at the children who are most often being let down


by the system now, it is surely something, across the divide, we


should all be able to join together on and see piloted. We will do that,


if you do something for us, stop local authorities being denied the


opportunity to run a school. They can't even bid to run a school.


Even if it is a parents-preferred choice, that good local authorities,


are not allowed to set up and run schools. There is no place planing,


these Free Schools, largely secondary schools, where we have an


explosion of Primary School places needed, there is no place planning,


there is no sensible way of managing and organising place


planing in the system at the moment. It is at tomorrowised, it is


fragmented, and the result will be, never mind the profit motive for


whatever else, children won't have school places, that is because


there is no way they can be controlled. You uniquely -- neatly


changed the subject to place planning. I have no thoits on that.


The man who is tired of London is tired of life, there is no London


all that life can afford. The old place has changed a bit since Dr


Johnson's testimonial, it has changed astonishingly, where it is


unrecoginsable in some places over the last few years. What is it that


making Londoners Londoners, they are as likely toe come from Poland


and Ecuador as Ealing. It seems more plugged into the rest of the


world than the rest of the country. The gap between rich and poor yawns.


A big fat London novel is how John Lanchester describes Capital, the


saga of the residents of Pepys Road, an ordinary street in south London.


The housing boom, that British obsession has made its residents


rich, because all of the houses in the road, as if by magic, were now


worth millions of pounds. The new residents, including a banker


waiting anxiously whether his bonus will top �1 million, it is not


strictly, to him, a bonus, but a vital necessity. But the novel


opens on the eve of the financial crisis. Enthusiastic reviewers have


seen the book as a post-crash state-of-the-nation novel, in which


Asian shopkeepers rub shoulders with Zimbabwean traffic wardens,


and Polish builders lust after Hungarian nannies. The last


locally-born resident dies mid-way through, while they are artist


grandson, basks in the attention of a trivial middle-class. What do


these people have in common, do they share anything beyond


capital's rather grubby air. The author of Capital, John Lanchester,


is with us now. From your novel we are not all in this together, are


we? I don't think we are, no. most striking characteristic of


Londoners portrayed in your novel is how at tomorrowised it is?


is my own view of London -- atomised it is. That is my own view


of London. I always think about when politicians talk about


community, people live in parallel solitude, they don't know the


people around them and they are on these parallel tracks that barely


brush up against each other. centres on one road, built for


people of relatively modest means, and because of the London profit


boom they have all got wealthy, there is the banker, Polish


builders, the Hungarian nannies, the Zimbabwean traffic warden, they


all lead very independent lives, do you get any sense of what it is


draws people to London. I once spent an afternoon in the pub, I


was locked out of the house, and there was a misunderstanding about


the keys. I got chatting to a Polish woman working as a nanny,


although she was a qualified teacher, she had a doctorate. She


talked about her reasons for being in London and reeled off these


things, and the expression became whist. And said there is also the


London dream. There was a striking sense, once people would have


talked like that about America. Now there is a sense that the UK in


general, London in particular is a place where people come to make


their fortunes. It seems, I don't know whether it


seems like this to you, it seems a city that is not really plugged


into the rest of Britain so much, as plugged into the world? I worry


about that aspect, the Manhattenisation of London. In the


way that Manhatten is the financial centre and is much more ethnically


diverse and regarded as a special case by the rest of the US. London


could go in that direction t might almost be an island floating of the


rest of the UK. Does it matter? might as inequality grows, not just


the 0.1%, but the 0.01% of those, with the wealth and privilege there


and the rest of the country struggling. I get a slight whiff of


that already. There are parts of the UK you go to and it feels like


1976. If we move apart from each other, that does matter.


There is in your portrait of this straight, there is no such thing as


what used to be called the host community, is there? No, I think


that's a thing you notice in London too. That a lot, it is like those


things when you used to see diagrams of the neutron bomb


radiating out, and leaving buildings intact, but killing all


the people. Money has done that to London, the people who used to live


in centre now live further out, the people who used to live in the


periphery have largely dispersed, it has changed the pexure of London


life. It has -- texture of London life. And in a factual way changed


the people who live here. What about changed moral codes? That is


an issue, one of the things that can happen in the modern world, if


you never go anywhere or do anything and stay in the same place


all your life, you still look out of the window and don't recognise


where you are. That can happen, the sleepiest, most rural parts of the


country, people have that experience. I think a big part of


it is that sense that the stories we tell each other, and the values


we have, are no longer shared. mention that the opportunity that


London seems in the minds of many people to offer to realise a dream,


it also offers sanctuary, doesn't it? That's true. I pine for a


simple letter day when we speak straight forwardly about refugees -


simpler day when we talk about refugees, and people noi talk about


asylum seekers and it is a contested -- now talk about asylum


seekers and it is a contested issue. It is about the places people want


to get away from and to, and the second catagory is a better thing


to be. Do you feel optimistic about the future about this


increatesingly heterogeneous, -- increasingly hettro genius


straining at the seems city. I was born in hoing Kong and brought up


in Germany, I'm from where else, the hettro genius -- hettro genius


is a strength. It will be a difficult few years for everyone in


the UK, but there is so much energy, talent, enterprise and appetite


here, I'm optimistic. That's all from Tuesday night tonight, nothing


so exciting as the political career of the former Prime Minister of


Belgium, Herman Van Rompuy, his time has President of the European


Union's council has been such a glittering success it is to be


extended for another couple of years, it seems no-one else wants


the job. What a man. # As I walk along the street


# With my naiyo in this case and frittes


# You can tell I'm as happy as can # It is a shame about the weather


# But we all live in harmony # It is great to be a Belgian


# I'm not English, French or Dutch # I'm not Polish, Italian ordainish


# I'm a Belgian, so thank you very Wettest conditions in western


Scotland and the Cumbrian fells during the day.


Surface water flooding, easing off across the North West later, patchy


mainly light drizzle, gusty winds possible. In East Anglia dry, but a


cooler day to come compared with today. Temperatures only around 9-


10, strengthening winds. After a reasonably dry start to the south


west, here the rain will develop widely, heaviest to be across


Snowdonia. In the Northern Ireland rain to be heavy all morning, light


in the afternoon. 12-13 possible in the westerly winds. Scotland 12-14


is likely. Damp across western areas, not as wet as the morning,


the north-east dryer and brighter. Changes into Thursday, not as wet


across parts of North West England, Scotland and Northern Ireland, but


the western coast jal hills damp and drizzley, same too across


England and Wales, Thursday set to be dry, brighter and that is going


to have a huge impact. Even with the outbreaks of rain across the


With Jeremy Paxman. Is the row over shelf stacking for benefits really just snobbery? We unpick the Greek bail out deal. And John Lanchester's new book.