:00:10. > :00:15.Six healthy young men cut off in the prime of their lives, executing
:00:15. > :00:19.a task which would any way have been terminated on the orders of
:00:19. > :00:23.politicians in a couple of years time. In death they are rightly
:00:23. > :00:26.honoured, how can belief be maintained in a mission, that seems
:00:26. > :00:28.as hazardous as it ever was. We will discuss it all with
:00:28. > :00:34.politicians, a soldier and a relative.
:00:34. > :00:40.At last some economic news, which isn't gloomy, out in the Wols,
:00:40. > :00:45.something is stirring, and yes, it looks like something distinctly
:00:45. > :00:52.like green shoots. A couple of years ago we were making 35 of
:00:52. > :00:55.these gas turbines, next year it is 81, and next year 100. He has made
:00:55. > :00:59.himself immensely rich, why can't Mitt Romney make himself appealing
:01:00. > :01:03.to the people he needs if he's ever to make good on his bomb bast.
:01:03. > :01:07.Tonight we are counting up the delegates for the convention, it
:01:07. > :01:17.looks good, and we are counting down the days to November, that
:01:17. > :01:19.
:01:19. > :01:23.looks even better. It is a very Mel collie milestone,
:01:23. > :01:28.over 400 young people have been killed in Afghanistan, for what.
:01:28. > :01:32.The six soldiers of the Yorkshire and Duke of Lancaster regiments
:01:32. > :01:35.were on what is described as a routine patrol in an armoured
:01:35. > :01:39.personnel carrier when they were blown up. British troops have been
:01:39. > :01:42.in the country for over a decade, we are told the last combat
:01:42. > :01:51.soldiers will return at the end of the year after next. Before we talk
:01:51. > :01:55.about the mission, our defence editor has his assessment. At times
:01:56. > :02:00.like this, people ask what is this for. More than 400 have died, and
:02:00. > :02:04.thousands have had their lives irrevokably changed through injury.
:02:04. > :02:10.The years become intangible, and it is hard to maintain public support
:02:10. > :02:15.for the mission. Dan Jarvis commanded a group of paratroopers
:02:15. > :02:21.in Afghanistan, and is now an MP. think it is hard, the events of the
:02:21. > :02:25.last 24 hours, will inevitably contribute towards a fatigue for
:02:25. > :02:29.our mission in Afghanistan. My constituents continue to question
:02:29. > :02:37.why it is we are still involved in Afghanistan, ten years after we
:02:37. > :02:41.first went there. A Government of whatever colour has a job to
:02:41. > :02:47.articulate that stragically it is in this country's interest to
:02:47. > :02:51.continue with the mission, to work towards a point at which we can
:02:51. > :02:53.develop the capabilities of the Afghanistan force, to withdraw in
:02:53. > :02:59.good order. The latest loss was caused by a
:02:59. > :03:04.destruction of a Warrior infantry fighting vehicle. It is a heavily
:03:04. > :03:09.armoured machine, which suggests a huge improvised bomb. The image of
:03:09. > :03:12.destroyed hardware is one of great sensitivity in the war of
:03:12. > :03:16.perceptions. The wreck was surrounded with other vehicles to
:03:16. > :03:20.conceal it, and recovered at night to a British base. Commanders
:03:20. > :03:26.insisted the loss wouldn't affect their day-to-day mission.
:03:26. > :03:31.You feel it in your gut, it is a sickening blow. But one thing I
:03:31. > :03:35.have learned over the years that these young soldiers are incred
:03:35. > :03:41.plea tough and resilient. They -- incredibly tough and resilient.
:03:41. > :03:43.They grieve and it is right they do, but it makes their resolve even
:03:43. > :03:48.stronger. Today's incident was a shock, but runs counter to the
:03:48. > :03:57.trend. The number of British troops lost in combat has actually fallen
:03:57. > :04:01.steeply. Going from 108 in 2009, or 109 in 2010, to 46 last year, and
:04:01. > :04:04.ten so far this year, including today's loss. That is due to new
:04:04. > :04:09.tactics, the concentration of force in a smaller part of Helmand, as
:04:09. > :04:13.well as handing over some of the most difficult districts, like
:04:13. > :04:16.Sangin in the north, to the Americans. The problem for Britain
:04:16. > :04:20.is British forces are making real progress where they are operating.
:04:20. > :04:24.They are winning all the tactical battles and the battle for hearts
:04:24. > :04:28.and minds where they are. As a country and alliance we are letting
:04:28. > :04:31.the war slip away. We can't control what happens in Pakistan and the
:04:31. > :04:35.way the Americans think about the war. The whole Afghanistan
:04:35. > :04:38.enterprise is out of our control. All we can do is the best we can in
:04:38. > :04:42.the areas we operate. They are doing a good job, but ultimately we
:04:42. > :04:46.are win the battles in probably a war we will find difficult to come
:04:46. > :04:50.away with anything other than a score draw. For the Prime Minister,
:04:50. > :04:53.who has sought to extricate Britain from Afghanistan, as quickly as is
:04:53. > :05:03.decently possible, today's loss required a statement of why young
:05:03. > :05:08.men and women are still risking their lives there. Our mission in
:05:08. > :05:12.Afghanistan does remain an issue of national security. We are
:05:12. > :05:17.preventing a safe haven for Al- Qaeda where they might plan attacks
:05:17. > :05:22.on allies. Our job is to equip the forces of Afghanistan with the
:05:22. > :05:26.capacity and equipment to take care of their own capacity without the
:05:26. > :05:32.need for foreign troops on the soil. But it is precisely in this area
:05:32. > :05:37.that the last few weeks have raised renewed concerns in NATO.
:05:37. > :05:40.Demonstrations triggered by the burning of Korans have shown the
:05:40. > :05:43.mutual incomprehension between westerners and Afghans. They have
:05:44. > :05:49.also cost the lives of NATO soldiers, who were trying to
:05:49. > :05:54.prepare Afghan forces to take over. It is the failure of the Afghan
:05:54. > :05:57.side in governance, general competence, or those incidents
:05:57. > :06:01.where Afghan troops have murdered western soldiers who were trying to
:06:01. > :06:06.help them, that have caused the greatest concern among those
:06:07. > :06:14.planning Britain's exit. As for the record of this country's forces,
:06:14. > :06:17.the military view tends to be, that after a shaky and costly start,
:06:17. > :06:21.they have mastered operating in Helmand, and are doing their best
:06:21. > :06:25.to move gracefully into the background. The reality is, we have
:06:25. > :06:29.to have a incredibly close and carefully managed relationship with
:06:29. > :06:36.the Afghan authorities. Let's be honest, that comes with a degree of
:06:36. > :06:38.risk. Because the main enemy of the people of Afghanistan is not the
:06:38. > :06:41.Taliban or Al-Qaeda, it is corruption. We need to do
:06:41. > :06:46.everything we can to root out corruption where it exists in
:06:46. > :06:51.Afghanistan. That is much easier to say than do. Increasingly the
:06:51. > :06:54.weight of the western mission in Afghanistan is in the hands of
:06:54. > :06:58.Afghans. NATO accepts that, but senior people are nervous about how
:06:58. > :07:03.they will perform, hoping the sacrifices, like Britains today,
:07:03. > :07:07.might -- Britain's today, might not have been in vain.
:07:07. > :07:14.Our political editor and our diplomatic editor are both here now.
:07:14. > :07:18.Does the Government sense the public mood is shifting?
:07:18. > :07:23.Government has known for a while that the public mood is hostile,
:07:23. > :07:27.that is why we have the deadline of 2015. They are moving towards that
:07:27. > :07:30.next week, next week we have Cameron and Obama meeting and
:07:30. > :07:34.timetables will be on the agenda. When it was last a big issue, David
:07:34. > :07:38.Cameron had a slight fight with the generals and they talked about
:07:38. > :07:42.wanting two fighting seasons. They got last summer, a fighting season
:07:42. > :07:48.in Afghanistan. They get the next summer, this is this coming summer,
:07:48. > :07:52.from the autumn we will begin to see the beginning of the drawdown.
:07:52. > :07:59.What is fixed is they have to be out by 2014/15. What is less fixed
:07:59. > :08:03.is the speed. There has been some discussion that by late 2013, this
:08:03. > :08:07.was suggested by the US Defence Secretary, it is the American
:08:07. > :08:11.leadership, or the faltering of it that is so critical here. With Iraq
:08:11. > :08:15.America stayed to the end, Britain wanted out, two-and-a-half years
:08:15. > :08:19.sooner, with Afghanistan we have seen other countries fall by the
:08:19. > :08:23.way side. Canada going into a non- combat role, the Netherlands
:08:23. > :08:26.withdrawing, France announcing, after four men were killed training
:08:26. > :08:31.the Afghans that they are going sooner. Britain does seem to be
:08:31. > :08:35.hanging on until the end. What is the strategy? The strategy is
:08:35. > :08:39.Karzai was meeting Cameron in the UK in January, the strategy is as
:08:39. > :08:43.much support as possible. They think the military strategy, the
:08:43. > :08:47.sad six deaths, withstanding, is actually going OK. I was in
:08:47. > :08:51.Afghanistan with the Prime Minister in the last summer, and at the time
:08:51. > :08:54.they felt that the local troops were really not good enough. Those
:08:54. > :09:00.same people are now saying they are getting better. The thing they are
:09:00. > :09:03.very worried about is the political process and Hamid Karzai. Indeed,
:09:03. > :09:07.the other great thing, that is making this so hard, this final
:09:07. > :09:13.period, is the attitude of Pakistan. The civilian Government barely in
:09:13. > :09:17.control, elements of the ISI seemingly want to make NATO's exit
:09:17. > :09:21.as bloody and as unpleasant as possible, and doing things to
:09:21. > :09:26.destablise the situation. It is a very difficult strategic picture.
:09:26. > :09:31.To discuss the British experience in Afghanistan and what it is all
:09:31. > :09:35.for, we are joined by Diane Dernie, whose son was severely injured in
:09:35. > :09:40.Afghanistan, which Stuart Tootal who command add battalion in
:09:40. > :09:43.Helmand, Menzies Campbell from the Liberal Democrats, and Labour's Jim
:09:43. > :09:47.Murphy, the Shadow Defence Secretary. Your son is not one of
:09:47. > :09:55.these 400 people who have lost their lives, but he was, he lost
:09:55. > :09:59.his legs, he was severely brain- damageed. Your family have paid a
:09:59. > :10:08.high price for this engagment, when you hear the news today what do you
:10:08. > :10:11.think? We think we are the lucky ones. No matter what, we have got
:10:11. > :10:17.our loved ones back. When we talk about the end of the mission, what
:10:17. > :10:20.people have to understand is for these boys and girls coming back,
:10:20. > :10:23.their war is only just starting. They will come back to a country,
:10:23. > :10:29.particularly if they are wounded, physically and mentally, that is
:10:29. > :10:36.not prepared for their return. An NHS that is not prepared, an MoD
:10:36. > :10:40.that is not prepared. Employment, housing, these boys have got a
:10:40. > :10:45.fight when they come home, make no mistake. Do you think troops should
:10:45. > :10:51.still be in Afghanistan? I don't want to see one more boy injured,
:10:51. > :10:57.one more family suffer. I don't want to see their sacrifice being
:10:57. > :11:01.in vain. This is one instance where I'm very, very glad it is not on my
:11:01. > :11:04.conscience, this decision. If you were still a commander in
:11:04. > :11:08.Afghanistan, Stuart Tootal, what would you tell your men about why
:11:08. > :11:12.they were there and why this was a sacrifice that was worth making?
:11:12. > :11:17.First of all, they would understand the mission from the get-go. We
:11:17. > :11:21.would be really clear on that. When a unit takes this level of
:11:21. > :11:27.casualties. Remember the loss of one life is tragic and has an
:11:27. > :11:32.impact. There is a shock, but actually there is also a very clear
:11:32. > :11:36.determination to see a mission through, that is what professional
:11:36. > :11:42.soldiers and servicemen and women do. While I take away nothing from
:11:42. > :11:46.the tragedy of what happened today, our troops will be committee and as
:11:46. > :11:50.focused. While a commanding officer will say all those things, his
:11:50. > :11:54.soldiers will naturally respond to that. What is the mission? To leave
:11:54. > :12:00.Afghanistan in a stable enough condition, where it can maintain
:12:00. > :12:06.and sustain its own security, without the need for the direct
:12:06. > :12:09.contribution of NATO troops. Murphy, it was your Government that
:12:09. > :12:13.initially committed British troops there, I dare say you didn't
:12:13. > :12:19.imagine them there ten years on. Do you understand what the mission is
:12:19. > :12:22.now? I think Stuart has summarised it fairly well. As someone who has
:12:22. > :12:27.served in Afghanistan. It is to make sure the country has a degree
:12:27. > :12:31.of stability, so it has its own defence and police force, so itself
:12:31. > :12:35.can't become an ungoverned space to allow terrorists and others to
:12:35. > :12:41.attack our country. On a day like today, and other days, where we
:12:41. > :12:44.have heard about Ben being so horrifically injured, I accept
:12:44. > :12:48.entirely it is so much more difficult to make an argument, that
:12:48. > :12:52.is so much more complicated than previous conflicts, the Falklands
:12:52. > :12:57.and the Second World War. It is more complicated and more nuanced
:12:57. > :13:00.as an argument. If we weren't there, that country would be jeopardising
:13:00. > :13:05.the safety of citizens here and elsewhere. It is a difficult
:13:05. > :13:08.argument to make and one we have to make very carefully. Do you is
:13:08. > :13:11.sense that if there were a free vote tomorrow in the House of
:13:11. > :13:15.Commons, do you think most MPs would think this is still a war
:13:15. > :13:20.worth committing troops to? I think what they would think is what they
:13:20. > :13:23.would vote for, and that would be to announce David Cameron's
:13:23. > :13:28.announcement that combat troops will be all taken out by 2014. I
:13:28. > :13:32.think we do that, of course because we are subordinate to the United
:13:32. > :13:36.States. Their decision making, as we have heard, is based upon a
:13:36. > :13:43.withdrawal then, and of course, other countries like France,
:13:43. > :13:47.beginning to say they want to go early. Also, the whole thing was
:13:47. > :13:51.endorsed by NATO at the Lisbon conference. 2014 is a post in the
:13:51. > :13:55.sand. We are saying the decision is made in Washington. The decision
:13:55. > :14:02.about how long British troops are there is Notre Dame I don't know?
:14:02. > :14:07.decision is made thatness -- Is not David Cameron? A decision is made.
:14:07. > :14:11.For a soldier, is it any easier to conduct a mission if you have some
:14:11. > :14:14.abitary end time? You have to have something to go for, and an end
:14:14. > :14:24.state. What I would say, this is the argument about blood and
:14:24. > :14:29.
:14:29. > :14:36.Treasury. If incidents like today lead to an untimely exit, then we
:14:36. > :14:40.are into the arguments that the sacrifice made will be in vain. A
:14:40. > :14:43.former professional soldier, and I speak for most serving soldiers
:14:43. > :14:47.today, I'm very conscious of someone like Diane who has suffered
:14:47. > :14:52.a great loss and all those other people, my view is we have to see
:14:52. > :14:58.this through, or give it our best effort, but it is understandable
:14:58. > :15:02.that there has to be politically a line in the sand. Keith thing is we
:15:02. > :15:06.will never tell where we will be until we get there. You say you
:15:06. > :15:12.don't want the sacrifice to be in vain, you, doubtless, share the
:15:12. > :15:18.view about seeing it through. Is that made any easier by having a
:15:19. > :15:23.withdrawal date? No, no. Ben was deployed in 2006, we have seen the
:15:23. > :15:30.mission change to many times, from the original statement, never to be
:15:30. > :15:35.a shot fired, a rebuilding mission, to controlling the drugs trade, to
:15:35. > :15:39.supporting the Afghan army. To support in education, for women in
:15:39. > :15:43.Afghanistan. We have seen the mission change so many times to
:15:44. > :15:49.support whoever, or whatever was being discussed at the time. It is
:15:49. > :15:53.very difficult to see that a given date, and this will end. What we
:15:53. > :15:58.are very interested in is what will be the state of Afghanistan a year
:15:58. > :16:05.after that end date, will it be any different. If you take the argument
:16:05. > :16:09.that you have to see it through, sometimes on the conditions based
:16:09. > :16:14.exit strategy. You have to accept if conditions aren't right you will
:16:14. > :16:20.stay. You can't do that if you have said you are going? Precisely. That
:16:20. > :16:25.is why the fact that 2014 and that date has now been set pretty well
:16:25. > :16:28.in political concrete, meaning that seeing it through, which
:16:28. > :16:34.necessarily implies staying on beyond 2014, simply isn't an option.
:16:34. > :16:37.I don't think there is a chance now to revisit the 2014 date, we are
:16:37. > :16:41.working towards that. The first question you were asking is why are
:16:41. > :16:45.we there. It is not enough to explain why we are there, tough
:16:45. > :16:50.explain why we leave. That is a bigger question. We need, with
:16:50. > :16:54.respect to Newsnight, Newsnight covers this subject very well, but
:16:54. > :16:58.there is need for a public conversation with the British
:16:58. > :17:01.public about what state we will leave that country in, what type of
:17:01. > :17:09.political deal will there be with elements of the Taliban. How many
:17:09. > :17:12.force also stay in a training role. We have to have a cross-party
:17:12. > :17:17.programme involving charities with a proper grown-up conversation
:17:17. > :17:21.about an acceptable state to leave Afghanistan. There needs to be a
:17:21. > :17:28.political settlement. It is clear there is not a Nelson Mandela-type
:17:28. > :17:33.character in Afghanistan, or even a Gerry Adams or Martin McGuinness-
:17:33. > :17:36.type character. How do you imagine history will judge this
:17:36. > :17:39.entangledment in Afghanistan, Stuart Tootal? I think they will
:17:39. > :17:43.look back and say the intent was right, I have always believed in
:17:43. > :17:48.that. The initial concept was wrong, the rebalancing to the right
:17:48. > :17:54.direction, with all the complexties and risks and no guarantees, is
:17:54. > :18:00.something that we have landed on, arrived at, the right track and
:18:00. > :18:03.right direction. It has taken a long time to get there, that is the
:18:03. > :18:10.biggest risk. How do you think history will judge this? This
:18:11. > :18:18.country has got a very nasty experience coming, when instances
:18:18. > :18:22.of mental illness and PTS D come through. I think we will have a
:18:23. > :18:26.small portion of a generation who are traumatised, and who are ill
:18:26. > :18:33.equipped to deal with the aftermath of this war. That is in this
:18:33. > :18:43.country, not in Afghanistan. I think there is a conflaigs in the
:18:43. > :18:43.
:18:43. > :18:48.minds of many members of the public between Iraq and Afghanistan. There
:18:48. > :18:52.was United Nations support and approval, and support and all that
:18:52. > :18:56.in Afghanistan. Iraq is a very controversial subject, there was a
:18:56. > :18:59.feeling it was illegal, and it involved staying too close to the
:18:59. > :19:05.United States and not exercising sufficient independent judgment
:19:05. > :19:10.about where our interests lay. As a result I think Afghanistan has been
:19:10. > :19:18.drawn into the general public disillusionment with Iraq. That is
:19:18. > :19:22.why any effort to depart from the 2014 date would have enormous
:19:22. > :19:26.reprecussions so far as public opinion is concerned. What is your
:19:26. > :19:30.verdict about the history? It is too early to say. It is depending
:19:30. > :19:36.on the state we leave the country is. Stuart is right about the
:19:36. > :19:41.intent and the right purpose of why we got involved, post-9/11 and the
:19:41. > :19:46.worries about Al-Qaeda. Unless we leave at 2014 in a stable state,
:19:46. > :19:51.and not threatening our security, and people see the progress been
:19:51. > :19:55.made, unless that is irreversible the public will say what is it for.
:19:55. > :20:01.There is a wider weapon that says let's not do anything again beyond
:20:01. > :20:05.our shores. Some people might conclude we might stay longer?
:20:05. > :20:10.don't think that is feasible, the worry after this, for some people,
:20:10. > :20:16.a conflict arises, something beyond our shores again, such as Libya.
:20:16. > :20:19.There could be an ambivalence of not getting involved again. It is
:20:19. > :20:21.not just Afghanistan that will condition decisions in the future,
:20:22. > :20:27.we are going through a reduction in the defence capability of the
:20:27. > :20:31.country. It may well be in the future there may be occasions when
:20:31. > :20:35.people might feel motivated to intervene and engage, we won't have
:20:35. > :20:38.the military resources to do so. Oxford the other day, I was
:20:38. > :20:43.approached by three attractive young women, who said the only
:20:43. > :20:49.reason they switched on Newsnight was to watch Paul Mason, he's so
:20:49. > :20:55.exy, they said. In all respects they seemed perfectly normal. Feast
:20:55. > :20:59.your eyes girls, here he is, the thinking woman's Brad Pitt. In
:20:59. > :21:03.contrast to his usual fare of graphs and gloom, wondering whether
:21:03. > :21:10.there are reasons to be cheerful? hope you told them to get a better
:21:10. > :21:15.television or pair of spectacles. think they were serious, Brad?
:21:15. > :21:18.that note, keeping the moral tone of the propbl high, as it always is,
:21:18. > :21:25.the recovery. Let's talk about it, tomorrow, in the European Union, we
:21:26. > :21:30.are about to see, hopefully, some kind of closure on the Greek crisis.
:21:30. > :21:34.We hope the Greeks get their debt swapped and that goes well. That
:21:34. > :21:38.Greece no longer looks like a ticking timebomb that blows up the
:21:38. > :21:42.rest of the European economy. If that is so, attention turns to what
:21:42. > :21:47.is happening in America. Let's have a look at the graph. This is never
:21:47. > :21:50.a bad sign, never a bad index of what is happening in the US, the
:21:51. > :21:54.stock market, the Dow Jones, as you can see the back end of last year
:21:55. > :22:03.and beginning of this year, it has really recovered. This is another
:22:03. > :22:08.graph, this is new job claims in the United States, and it is looks
:22:08. > :22:14.pretty good having looked pretty awful. Early 2012 we are seeing the
:22:14. > :22:17.new unemployed people falling. The US has created nearly two million
:22:17. > :22:21.jobs since the US Federal Reserve intervened. If Europe goes quiet
:22:21. > :22:25.and cold for a bit, there is a chance that the USA and the soft
:22:25. > :22:28.land anything China, could draw the rest of the world into something
:22:28. > :22:33.like a recovery. The question is whether which can be part of it,
:22:33. > :22:43.and whether our role in it can be sustainable. That is why I went to
:22:43. > :22:43.
:22:43. > :22:48.Lincoln yesterday to have a look at it. It doesn't look like the
:22:48. > :22:52.throbbing heart of industrial revival, Lincoln can look a lot
:22:52. > :22:57.like gift shop Britain. But the city is home to the people and
:22:57. > :23:03.places that are driving something precious, spectacular economic
:23:03. > :23:10.growth. At this factory they make high-tech bits of metal, bearings
:23:10. > :23:15.to go in aircraft landing gear, helicopter rotars and trams. The
:23:15. > :23:20.machines are operated 2446 hours a day, because the world -- 24-hours
:23:21. > :23:25.a day because the world can't get enough. Globally people have
:23:25. > :23:29.started spending money again, and aircraft are being purchased.
:23:29. > :23:33.is happening now that wasn't before? There is a confidence and
:23:33. > :23:39.availability of money. We have had significant growth in the last 12
:23:39. > :23:43.months where we have increased output of the order of 30%. From
:23:43. > :23:47.regular running levels of the year previous.
:23:47. > :23:54.In fact, the firm can't grow fast enough, there is a waiting list for
:23:54. > :23:57.the stuff they make. If we had the human capacity to do it, we could
:23:57. > :24:02.grow by 25% immediately. Manufacturing is not the only thing
:24:02. > :24:06.growing, consumer spending edged up again last month, prompting the
:24:06. > :24:10.idea that the worst may be over. Certainly, on the streets of
:24:10. > :24:14.Lincoln, it looks very unlike a recession, that is because the town
:24:14. > :24:17.has things that insulate you against a downturn. Foreign
:24:18. > :24:27.students, farming, tourism, and there is a lot of relatively high-
:24:28. > :24:28.
:24:28. > :24:33.paid work. Lincoln is where the German engineering giant, Seimens,
:24:33. > :24:37.makes gas turbines. The company has poured money into this factory,
:24:37. > :24:41.they export nearly everything they make. It is the global recovery
:24:41. > :24:46.driving things. A couple of years ago we were making 35 of these gas
:24:46. > :24:49.turbines a year, this year we will make 81, next year we are looking
:24:49. > :24:56.at whether we can make 100. We are seeing a doubling in the amount of
:24:56. > :25:01.work we are doing, that is going worldwide, exporting to Middle East,
:25:01. > :25:04.Australia, and we are seeing everywhere customers are coming to
:25:04. > :25:08.Lincoln. Because Seimens is global, it can raise finance without
:25:08. > :25:14.worrying about British banks, it has also invested heavily, German-
:25:14. > :25:18.style, in training, it is not held back by a skills shortage. It is
:25:18. > :25:23.driven by a combination of the global economy and the
:25:23. > :25:32.competitiveness of the staff. It is not a UK market, we don't work in
:25:32. > :25:36.the UK predominantly, we export 85% of what we are doing. At the
:25:36. > :25:41.university, where they have just opened a whole near engineering
:25:41. > :25:45.school, paid for, you guessed it, Seimens. They are all too oh aye
:25:45. > :25:49.what's that then ware of the flip side, what what -- aware of what is
:25:49. > :25:55.happening to the flip side. What is happening to the small businesses.
:25:55. > :26:04.The banks are not as interested in small ventures as perhaps they
:26:04. > :26:08.could be, as was agreed through project Merlin. We do get reports
:26:08. > :26:12.by most businesses about constraints in formal finance from
:26:12. > :26:15.banks. We also have a place in places like Lincoln is a
:26:15. > :26:19.significant number of family businesses, generating growth
:26:19. > :26:24.through retained profits, year on year, and do have resources and
:26:24. > :26:29.savings. For the butcher, the baker and cappuccino maker, the recovery
:26:29. > :26:36.is a bit two speed, the question is raises once you get beyond one firm
:26:36. > :26:41.and one city, can it be saend? shows the number of hours worked in
:26:41. > :26:46.manufacturing, it is at the highest levels. Graham Turner was one of
:26:46. > :26:52.the first economists last year to declare the US recovery under way.
:26:52. > :26:56.He thinks the UK data is nowhere near as promising. Despite the
:26:56. > :27:05.stellar performance of some manufacturing firms, there is still
:27:05. > :27:10.a mountain to climb. We have a strong recovery in manufacturing
:27:10. > :27:17.output. We have only recovered half the losses sustained during the
:27:17. > :27:21.downturn of 2008/09. Other countries like Germany have clawed
:27:21. > :27:26.a larger share of the lost output back. We have to focus on that if
:27:26. > :27:31.we want serious rebalancing. We need a much quicker reduction in
:27:31. > :27:35.the trade deficit. We devalue the pound, and yet our trade deficit
:27:35. > :27:42.carried on going up for a good couple of years, it is only now
:27:42. > :27:49.starting to improvment those are the indicators we are looking at,
:27:49. > :27:53.to see if there is a serious restructuring to make the recovery
:27:53. > :27:56.sustainable, like we are seeing in the US. It is this statement that
:27:56. > :28:01.led Vince Cable to say the Government lack as compelling
:28:01. > :28:07.vision of where the industrial strategy is heading. The idea that
:28:07. > :28:14.ignore the shoots are there, but that they are so isolate. If these
:28:14. > :28:17.are the early signs of recovery, the downsides are that the economy
:28:17. > :28:22.shrank during the recession and the Treasury will command money out of
:28:22. > :28:28.it for the next five years. I think it shows where the British economy
:28:28. > :28:32.is exposed to global traditions and new technology, it does better than
:28:32. > :28:37.we expect. But that is no consolation to the pie shop and the
:28:37. > :28:44.school leaver. What non-global, low tech Britain needs, is simply for
:28:44. > :28:50.the credit crunch to be over. Should the Chancellor be singing in
:28:50. > :28:54.the balt and giving us all the stuff about the - bath and giving
:28:54. > :28:58.all the stuff about green shoots of recovery. My guests are here. What
:28:58. > :29:02.does it seem like for you? I feel for some months there is a return
:29:02. > :29:08.of what is called animal spirits amongst entrepeneurs, I think there
:29:08. > :29:12.are signs of confidence. Partly, as Paul says, America is definitely
:29:12. > :29:19.recovering, and generally speaking, Britain follows what they. Do but
:29:19. > :29:26.also because after four years of tough times I think there is
:29:26. > :29:31.inevitable cyclicality about it. How does it feel to you? As it did
:29:31. > :29:36.last year and 2009. That good! we have been getting, Jeremy, are
:29:36. > :29:40.these little spurts of growth, and little spurts of confidence that
:29:40. > :29:48.come up against the buffers of the financial system, which is still
:29:48. > :29:53.broken. We have little spurts of growth and then we go back again.
:29:53. > :29:58.If if you look at the chart about the economy plunging, what happens
:29:58. > :30:02.in the past is it recovers quickly, now it is going up a bit, sideways
:30:02. > :30:10.a bit, and then there. It won't go back up to where it was before, as
:30:10. > :30:13.Graham Turner clearly said. Paul Mason produced several witnesses in
:30:13. > :30:18.the film saying the banks are the problem. Does it feel like that to
:30:18. > :30:22.you as a businessman? I think lack of credit is an issue and will
:30:22. > :30:29.continue to be. They are gradually repairing their balance sheets.
:30:29. > :30:32.There are new banks appearing, I'm on the board of one. There is new
:30:32. > :30:36.capital flowing into the system. Over time it will feed through into
:30:36. > :30:40.industry and help create jobs. is overly optimistic, the fact is
:30:40. > :30:46.the banks are effectively insolvent. We are finding the European Central
:30:46. > :30:52.Bank, for example, is printing money to pump into the banks. They
:30:52. > :30:56.have had a trillion euros since December of cheap money. I'm a
:30:56. > :31:03.small business woman, my bank said to me if I deposit any money with
:31:03. > :31:11.them, I would be lucky to get 0.3%. But if I were to go into an
:31:11. > :31:17.overdraft it would be 28%, on average overdraftings are 20%. How
:31:17. > :31:20.can small businesses cope with that if their overdraft is 28%. The bank
:31:20. > :31:30.is borrowing at 1% from the publicly-backed central banks of
:31:30. > :31:31.
:31:31. > :31:34.Europe and Britain. If you are one of the three million without a job
:31:34. > :31:39.it doesn't feel that good. I don't get the sense talking to people on
:31:39. > :31:43.the street that they do sense things are getting better and the
:31:43. > :31:47.clouds are lifting. Do you feel something different? I do, I talk
:31:47. > :31:53.all the time to entrepeneurs and investors. There is, I feel, a
:31:53. > :31:58.sense that costs have been cut and restructuring is done in business,
:31:58. > :32:03.and industry as a whole, has many hundreds of millions to invest, it
:32:03. > :32:07.has an all-time high levels of cash. Gradually companies will deploy
:32:07. > :32:12.that money into new investments, and that, in itself, will drive
:32:12. > :32:19.demand and growth. We can't run the economy on the
:32:19. > :32:23.basis of anecdotes, the fact is, there is a lack of demand out there,
:32:23. > :32:26.these companies are hoarding their cash because they are afraid,
:32:26. > :32:31.because customers are not through the door. They are deeply worried,
:32:31. > :32:35.about the banking system not being fixed yet, the Government insisting
:32:35. > :32:39.on austerity, we have savage austerity in Europe, that is our
:32:39. > :32:45.big market for the exports we saw in Lincoln, for example.
:32:45. > :32:49.Businessmen, rightly, are hoarding that cash, really afraid. So we may
:32:49. > :32:56.hear and story here and there, Paul is right to identify those. That
:32:56. > :33:00.doesn't make up for the fact that the whole economy lacks demand.
:33:00. > :33:04.We will see how it develops, in the short-term we have a budget coming
:33:04. > :33:13.up in a couple of weeks time. What do you think George Osborne ought
:33:13. > :33:23.to do, give us one measure each, or one rhetorical statement he should
:33:23. > :33:24.
:33:24. > :33:28.make, or some action he should make. I would have him sharply deregulate
:33:28. > :33:36.for smaller companies. Those that can't afford a professional HR
:33:36. > :33:39.person. I think if it were made easier to hire and fire staff, I
:33:39. > :33:45.think entrepeneurs would be more willing to take on people and that
:33:45. > :33:49.would cut unemployment. I think small businesses should be helped
:33:49. > :33:53.as well, we tax employment and that is good, and make it hard for small
:33:53. > :33:59.businesses to employ. I think we face a bigger problem, I think the
:33:59. > :34:03.Government should be investing in one of the biggest security threats
:34:03. > :34:08.we faced, energy security. Oil prices are rising, it is going up,
:34:08. > :34:12.we will have to rely on the Russians for others for gas in the
:34:12. > :34:17.future. We need to insulate our homes to make them more energy
:34:17. > :34:20.efficient so we can cope with with what will be deep energy insecurity
:34:21. > :34:25.in the future. The Government should lead this, at the moment
:34:25. > :34:28.they are not taking that seriously in the Department of Energy. That
:34:28. > :34:37.would generate jobs for small businesses and construction
:34:37. > :34:43.companies, here and not in China. If you were in America today you
:34:43. > :34:48.wouldn't have been able to hear youself think to young men
:34:48. > :34:55.contesting they will boot Barack Obama out of the White House come
:34:55. > :34:59.November. Super Tuesday,'s bumper crop of Republican speeches failed
:34:59. > :35:08.to rouse anyone. It is only March and plenty of people are sick of
:35:08. > :35:12.the whole thing. Super Tuesday is designed to be
:35:12. > :35:17.super-decisive, we are supposed to, by now, have a pretty firm idea of
:35:17. > :35:20.who will face Barack Obama in November's election. But, at the
:35:20. > :35:26.moment, the safest prediction we can make is, the Republican
:35:26. > :35:34.candidate will have a four-letter, one-syllabel first name, still in
:35:34. > :35:38.the hunt are Mitt, Rick and Newt. Each has attractions to the
:35:38. > :35:44.Republican voters, but each with a downside. The big winner from last
:35:44. > :35:51.night was Mitt Romney, of the ten states up for grabs, he took six,
:35:52. > :35:56.but a narrow win in Ohio, has led to a sense from the pundits that he
:35:56. > :36:01.hasn't done enough to make the job his. He, of course, doesn't agree.
:36:01. > :36:09.We will take your vote, a huge vote in Massachusetts s and take the
:36:09. > :36:12.victory all the way to the whout White House.
:36:12. > :36:19.As front-runner, Mitt Romney gets the most heat, for being a
:36:19. > :36:24.calculating flip-floper. Noi he tells us, trust me, mime he -- now
:36:24. > :36:31.he tells us, trust him he's a conservative. From being a
:36:31. > :36:39.linguist? He speaks French too. it gets worse, being mean to dogs.
:36:39. > :36:44.You took your Irish setter on a 12- hour road trip, tied to the roof of
:36:44. > :36:49.your car, question, what were you thinking. Jo this is completely air
:36:49. > :36:54.tight kennel, mounted on the top of the car, he climbed up there
:36:54. > :37:01.regularly and enjoyed himself. has led to a campaign using
:37:02. > :37:07.pictures of dogs, with the slogan, "I ride inside". He doesn't come
:37:07. > :37:14.across as a regular guy. Pockets of the Midwest don't like Mitt Romney
:37:14. > :37:17.and other areas. He might be able to win the nomination without
:37:17. > :37:23.fixing the problem. Barack Obama had a skim later problem he never
:37:23. > :37:28.fixed. It would be hard to say he would drop out, unless they tell
:37:28. > :37:32.you they have Achilles heels but five open spots in the armour to
:37:32. > :37:37.attack. For the top three this is how it looked before Super Tuesday.
:37:37. > :37:42.Mitt Romney out in the lead. After Super Tuesday, not much has changed,
:37:42. > :37:48.except Mitt Romney is a little further down the road. He is,
:37:48. > :37:52.though, well short of the delegates he will need if he wants to be the
:37:52. > :37:57.nominee. In second place is Rick Santorum, a former Pennsylvania
:37:57. > :38:02.senator who has a neat line in tank tops, and Conservative Christian
:38:02. > :38:10.politics. His would be a crowded White House, seven children, and if
:38:10. > :38:14.he gets there, he will have proved the perceived wisdom wrong, that a
:38:14. > :38:21.social Conservative can't win a majority in America. Newt Gingrich
:38:21. > :38:25.is not running on family values, that is just as well, as he's on
:38:25. > :38:33.thinks third marriage. He was accused with charges of democracy,
:38:33. > :38:38.because at the time he was leading the moral charge against blilt over
:38:38. > :38:42.the Lewinsky affair, he was having an affair of his own. It has never
:38:42. > :38:48.got past him that he would alienate people with his personal story.
:38:48. > :38:52.may not know who will be in the driving seat, and who will be
:38:52. > :38:58.strapped to the roof rack for a month.
:38:58. > :39:02.The big question, has this Republican contest been so fra,, so
:39:02. > :39:07.damaging, that whoever wins is destend to be the loser come
:39:07. > :39:15.November. The current opinion polls all put the Republican hopefuls
:39:15. > :39:19.well behind President Obama. White working-class voters, across the
:39:19. > :39:27.industrial Rust Belt across America, may decide the election. To discuss
:39:27. > :39:31.how it might go are Thomas Frank, author of What's The Matter With
:39:31. > :39:40.Kansas, and Pity The Poor Billionaire. And the writer of The
:39:40. > :39:47.Grand New Party. Gentlemen, Thomas Frank, first off,
:39:47. > :39:56.he is now Mitt Romney the candidate, is he? Pretty much, he will be the
:39:56. > :40:01.Republican nominee. That is my view. Do you think that too? I think he's
:40:01. > :40:05.the most likely winner, yes. Do you think it is possible, either of you,
:40:05. > :40:11.that he can actually get the support of the white working-class,
:40:11. > :40:17.seems to have a lot of trouble doing it? He really doesn't do the
:40:17. > :40:22.populus thing very well. Also, you no -- you know, we have seen Mitt
:40:22. > :40:28.Romney for a number of months, we know his strengths and weaknesses.
:40:28. > :40:32.His biggest weakness by far is that, well, first of all, he loves to
:40:32. > :40:42.boast about how rich he is, and second of all, he had the career
:40:42. > :40:42.
:40:43. > :40:47.where he made all the money was at a vepture capital outfit. --
:40:47. > :40:50.venture capital outfit. None will play well with the demographic you
:40:50. > :40:54.mentioned. You are shaking your head? I don't think he likes to
:40:54. > :40:58.boast about it, but it is one of the central parts of his life to
:40:58. > :41:02.being a turn around artist in private equity, he would take
:41:02. > :41:05.failing business enterprises and try to make them viable, in some
:41:05. > :41:10.cases he didn't succeed. That has always been a central proposition
:41:10. > :41:15.in public life, when he ran the Olympics in 2002, and ran for
:41:15. > :41:20.Governor of Massachusetts, later that year. He was advancing himself
:41:20. > :41:24.as one who could fix these very, very thorny problems, because he
:41:24. > :41:28.has done it in his private life. Because he is successful, it is
:41:28. > :41:32.hard for him to talk away from because it is deeply in his
:41:32. > :41:38.biography, I don't think he's boasting, but acknowledging it is a
:41:38. > :41:43.central part of his life. It will be a lightning rod and
:41:43. > :41:50.controversial. It is not obvious that he will fail,'s turning it
:41:50. > :41:56.into strength. We have many weeks to the American election.
:41:56. > :42:01.What about the jibe, that said he looks like the man who fired you?
:42:01. > :42:06.Exactly, that was four years ago when he said that. It sticks, and
:42:06. > :42:10.what I said about Romney boasting about his wealth. It is amusing. It
:42:10. > :42:17.just slips out, the other day he was talking about what kind of car
:42:17. > :42:20.he drove, he mentioned his wife drove not just one Cadillac but two.
:42:20. > :42:26.Somebody asked him about stock car racing, a popular sport in America,
:42:26. > :42:33.he doesn't follow it. He knows several guys who own stock car
:42:33. > :42:39.racing teams. This kind of talk. He wanted to bet one of the other
:42:39. > :42:43.candidates 10,000 -- $10,000 of all other things. This kind of talk
:42:43. > :42:49.slips out, it is who he is and he can't help it, this will be his
:42:49. > :42:53.great witness. You accept he has to appeal to a broader constituency he
:42:53. > :42:57.currently appeals to? That is absolutely right. That is
:42:57. > :43:04.inevitably a process of the way the presidential elections work. You
:43:04. > :43:07.have this long drown out primary process during which core member of
:43:07. > :43:10.the two respective parties are making the determination, they have
:43:10. > :43:13.their maximum leverage at this point. When you think about the
:43:13. > :43:16.folks turning out to party conferences, in Blackpool or
:43:16. > :43:20.Brighton, these are not the people that David Cameron or Ed Milliband
:43:21. > :43:26.are going to be competing for in a general election. Rather, they are,
:43:26. > :43:30.shall we say, the eccentrics, the true believers and those who turn
:43:30. > :43:35.out. In the United States we have a month-long process during which
:43:35. > :43:38.these people, this relatively small universe of primary voters are
:43:38. > :43:42.pressing their advantage and talking about their issues. They
:43:42. > :43:47.want to make sure any presidential candidate will be a true believer,
:43:48. > :43:52.so they can be relied on to not deBrae them, while in office. That
:43:52. > :43:57.is the job for political activists on the left or right in this
:43:57. > :44:00.country. That is why they are pushed in one day or another. It is
:44:00. > :44:05.a liability, but you pith it once you get to the general election,
:44:05. > :44:12.and that is where we are likely to see it as well. Something has
:44:12. > :44:16.happened to the Republican Party since the last election? Absolutely.
:44:16. > :44:22.Look at Mitt Romney himself, four years ago he was at least trying to
:44:22. > :44:27.sell himself as the Conservative alternative to John McCain. Now
:44:27. > :44:31.he's the guy everyone wants the tie to Conservative is. He's not even a
:44:31. > :44:35.Conservative. What I would describe what is going on in America, this
:44:36. > :44:41.is especially the case for the Conservative movement. The search
:44:41. > :44:45.for awe then sis at the, this is a group of voters in a political
:44:45. > :44:53.movement that has attached its idea to the idea of authenticity for
:44:53. > :44:56.years and years. Now they have got this going on, you have Newt
:44:56. > :45:04.Gingrich saying he's the real candidate. And Mitt Romney who just
:45:04. > :45:07.can't seem to make the sale. understand the way the Republican
:45:07. > :45:10.Party's shifts have been perceived to much of the blik, certainly to
:45:10. > :45:14.much of the public -- public, certainly to much of the public in
:45:14. > :45:19.the UK. On the substance of policy issues, the Republican Party has
:45:19. > :45:26.moved to the centre, on tax, health policies. There is a new consensus
:45:27. > :45:33.about the set of ideas that are very Praguementic. In health there
:45:33. > :45:38.is a set of ideas endorsed by Democrats during the late 1990s,
:45:38. > :45:41.yet the Democratic party has moved away from had a and the others have
:45:41. > :45:46.moved towards. When you look at the substance of issues there is a
:45:46. > :45:51.shift to the centre. In terms of rhetoric, there is a sharper,
:45:51. > :45:57.harder edged rhetoric, that is because it is something you see on
:45:57. > :46:01.both sides of the political divides in. United States. That is all from
:46:01. > :46:06.Newsnight tonight. Kirsty will be in the chair tomorrow night. Lucky
:46:06. > :46:16.old you. old you.
:46:16. > :46:34.
:46:35. > :46:38.A colder night tonight, last night bringing a chillyo start to
:46:38. > :46:42.Thursday. Most of us, -- chilly start to Thursday. Most of us
:46:42. > :46:45.starting off with sunshine. Showers to the North West, wet weather
:46:45. > :46:51.throughout the day across Scotland. A dry and bright day, the cloud
:46:52. > :46:55.will increase a little bit to the east of the Pennines. In the weak
:46:55. > :46:58.sunshine temperatures reaching double figures. After that chilly
:46:58. > :47:04.start, because of the winds being lighter and they have been through
:47:04. > :47:09.the day today, it will feel warmer. South-West England in the same boat,
:47:09. > :47:13.a sunny start, but dry and bright, as it it is across most of Wales. A
:47:13. > :47:20.grey afternoon on the west coast. Breezy, in Northern Ireland, but
:47:20. > :47:25.overall it is dry, if rather cloudy, a hint of brightness in hilly
:47:25. > :47:30.places. Northern Ireland keeps the thick cloud and outbreaks of rain,
:47:30. > :47:34.it should stay dry. Haen of us will be dry on Friday, a weather -- many
:47:34. > :47:38.of us will be dry on Friday. A weather front will bring rain.
:47:38. > :47:41.Temperatures could be higher, despite it being cloudy. Central
:47:41. > :47:47.and oorn parts of England, most likely to see sunshine during