21/05/2012 Newsnight


21/05/2012

Stories behind the headlines. Is the power to sack workers good for the economy. Are Europe's banks broken? Plus a hospital for blast victims and Jessye Norman. With Jeremy Paxman.


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Transcript


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So, how do we get ourselves out of the doldrums. Today's answer came

:00:12.:00:17.

from a Tory donor, arguingp employers need to be able to hire

:00:17.:00:20.

and fire more easily. Rubbish said the other half of the coalition

:00:20.:00:24.

Government. We don't need to scare the wits out of workers with

:00:24.:00:27.

threats to dismiss them, it is completely the wrong approach.

:00:27.:00:33.

is the ghost of "I'm all right Jack", still at large. Could the

:00:33.:00:40.

economy be energised if we were all less secure. Is he in. I will see

:00:40.:00:44.

your union bogeyman, and raise awe free market economist.

:00:44.:00:49.

Meanwhile, could a bank run in Greece spread to your local branch.

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How at risk are the major banks of Europe. Later on. TRANSLATION:

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doctors in Iraq told me, if this operation in Iraq does not work out,

:00:58.:01:02.

I will have to have an amputation. Damaged in Iraq, mended in Jordan,

:01:02.:01:08.

the hospital where they try to put back together the shattered bodies

:01:08.:01:14.

of those who survived the violence. I sleep for one week before the

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amputation, and one week after amputation. Amputation for any

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surgeon is failure. We talk to one of the world's greatest sopranos,

:01:25.:01:35.
:01:35.:01:35.

or rather we listen. # Falling in love with love

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# Is falling for make-believe. Britain has a deficit crisis, true,

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the only escape is economic growth, also true enough, but after that,

:01:47.:01:51.

the ideas laid out in a report for the Government, from a big Tory

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donor get a whole lot more controversial. So controversial,

:01:54.:01:59.

involving getting rid of all sorts of labour rights, that the Business

:01:59.:02:07.

Secretary, Vince "diplomacy Cable, delivered the verdict that they are

:02:07.:02:11.

complete nonsense. Will any of these plans that make hiring and

:02:11.:02:17.

firing easier see the light of day, and or important, should they?

:02:18.:02:21.

Here is Allegra Stratton. You can see why the Prime Minister

:02:21.:02:27.

might spend his down time on this, with one dab of the index finger

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you can slice through a juicy fruit, three in one go, you get more

:02:31.:02:37.

points. For his party it is not fruit, it is flexible leave,

:02:37.:02:44.

redundancy pay, and the juicyist of all, the ability to hire and fire.

:02:44.:02:49.

Their set text is this. A review by Tory donor and private equity

:02:49.:02:55.

businessman, Adrian Beecroft, it was published this afternoon. It

:02:55.:03:00.

made 17 proposal that is would allow firms to opt out of

:03:00.:03:10.
:03:10.:03:15.

It was welcomed by those with experience running businesses.

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labour market has to be flexible. You see that particularly with

:03:18.:03:22.

employment law as well. What we want is a right to hire policy, we

:03:22.:03:26.

want companies to be taking people on, and unafraid of the

:03:26.:03:29.

consequences of taking people on. Small companies need flexibility.

:03:29.:03:32.

But employees needs their rights too. It is a question of getting

:03:32.:03:35.

the balance right. I think the Beecroft Report, published this

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week, is a very important step on the road to considering all the

:03:38.:03:43.

options. I think we should look at makes it as easy as possible for

:03:44.:03:47.

smaller companies to take on staff. These ideas, however, do not mix

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well in the coalition furnace, today sparks flew.

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The Business Secretary, conveniently visiting the

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sweltering steel works of Redcar, and so atired in flamable kit, went

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into battle with his intellectual foes. Most of it is pretty

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uncontroversial. There is one bit that has stirred up a lot of

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controversy, this no-fault dismissal, some describe it as a

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hire and fire system. I don't see a role for that. Britain has a

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flexible, co-operative labour force. That is what you see here in this

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steel plant, the work force have made a lot of this happen. Last

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week I was at Ellesmere Port, where we have got back General Motors

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investing in Vauxhall. One of the thing that attracted them is

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British workers being flexible. We don't need to scare the wits out of

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workers with threats to dismiss them, it is completely the wrong

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approach. This is about the differences between the coalition

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partners, it is as serious as it gets, for one it is an ap, the

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other it is a pear. They don't agree. You have Conservative people,

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including cabinet ministers, who think the reason the UK economy is

:04:57.:05:02.

sluggish, is because the labour market is shrer rottic. And the

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Liberal Democrats say there isn't a single shred of evidence that says

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it is the UK's economy. They have a wider point, they say capitalism is

:05:10.:05:13.

allowed to work because of regulation, it allows trust.

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No matter, Tory MPs said in the Commons today, as the Government

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fields questions in the chamber, Beecroft's lessons are legion.

:05:23.:05:29.

2005, Germany exempted businesses with fewer than ten workers from

:05:29.:05:38.

unfair dismissal regulations. They introduced a new catagory of mini

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and midi jobs, their unemployment figures have halved, what can we

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learn from Germany. The last survey in this area showed

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that we were lightly regulated, the third lightest after America and

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Canada. Germany is more regulated. Turkey, the most regulated, drew

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its economy. Circumstantial evidence, and studies carried out

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by a number of think-tanks, national and international, seem to

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put some of the best economic performances, such as Germany, and

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to some extent, France, on the more regulated end of the spectrum.

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of how Germany has deregulated? have to see these particular

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measures in the German context, which is the context of a highly-

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regulated, neo-corporate, industrialised economy. And labour

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lawyers, and comparative labour lawyers, are always warning against

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the simplicity of the argument, of suggesting legal transplants from

:06:40.:06:50.
:06:50.:06:50.

one legal system to another. International Labour comparison is

:06:50.:06:55.

interesting, Denmark is highest in the world for ease of hiring and

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firing and redundancy costs. They have a system that is very good at

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getting people back into work when they are unemployed, they support

:07:02.:07:07.

them very well, and they have a highly-skilled work force. The

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lesson is, if we are going down this path, we have to look at it in

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the round, rather than focusing specifically on one element of

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deregulation, as a solution to getting people into work.

:07:17.:07:20.

Some within Government expect that there will be action on the

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Beecroft Report, as part of a great reckoning between the two parties

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that they have to do everything they can to get growth. The

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question will be, will it be in substantial areas, where previously

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there had been much disagreement, or whether it will be in those

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areas where actually they have already said they sort of agree, so

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the low-hanging fruit. There are some consultations out there, there

:07:41.:07:44.

are some things the Department of Business has already said it will

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implement. I understand that the Lib Dems

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could move towards the Tories on Beecroft's ideas, it would be

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limited to those affecting small businesses. Those employing fewer

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than five employees may be exempted from regulations. Lib Dems suggest

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they may exempt employee-owned, John Lewis-styled companies from

:08:05.:08:08.

regulation, in an attempt to increase that model in the economy.

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The Beecroft Report emerged having had hefty help from Downing Street

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and civil servants. One source joked, final version was version 27.

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Varnished or unvarnished, many think the Prime Minister does have

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to act in some way, and Lib Dems know it. Tory MPs think the

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Beecroft Report offers many fruits to be sliced, some in one swipe.

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We have Lord Oakeshott, and the Conservative MP Tominic Raab, the

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one-time economic adviser to George Bush, and head of an Asset

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Management company, Pippa Malmgren, and Labour Party economist, Davit

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Blanchflower. Where is the evidence that making

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it easier to hire and fire people actually promotes growth? There is

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actually a total of abundance of domestic and international evidence.

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The CBI did a report last year, a survey which found 77% of

:09:09.:09:13.

employiers said regulation was the major -- employers said regulation

:09:13.:09:18.

was a major threat to businesses. The World Economic Forum says we

:09:18.:09:22.

come 83rd on the league table for overregulating our businesses.

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These are statements of opinion, I'm asking for evidence? In the

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CBI's case it was a survey of employers. And they said something,

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they did not produce any evidence, isn't that correct? In that case,

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yes. But all of the business groups, all of the employee groups, are in

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unison saying we have a major problem in this country. It is not

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a silver bullet, there is finance and business taxes. But if you are

:09:47.:09:50.

a small business, with all the uncertainty around you, you are

:09:50.:09:53.

worried about taking that risk to hire someone, and someone in this

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debate has to stand up for the 22% youth unemployed. That is what we

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are doing, it is not standing up for the employers, but the

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unemployed. Have you seen evidence to support this contention, Davit

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Blanchflower? No. I listened to the commentator a moment ago, I looked

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at what Vince Cable said. He's quite right to say there is

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absolutely no evidence for this. There has been a huge literature in

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economic about the effects of regulation, and how it impacts

:10:22.:10:30.

unemployment. We see no co-relation whatsoever. A good thing to think

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about in the UK, we have seen incredibly flexible wages and hours,

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there is no credible evidence whatsoever to say that regulation

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in the UK is a major problem. In fact, if you go to the business

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department survey of 201, they said 7% of firms thought regulation was

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a problem, so I'm afraid there is no basic evidence to support the

:10:53.:10:59.

contention, at all. Lord Oakeshott, there is an apparent plausibilty to

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this argument. It seems to make a certain amount of sense, doesn't it,

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if you are Mr Beecroft, of course it makes sense. Yes. It is my turn

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now. You hang on a second blees, Davit Blanchflower, I want to bring

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in Lord Oakeshott. Can I say in my day job, not talking politics with,

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I'm a small businessman, and I run a small business with five people.

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I know a bit about it, and more than Adrian Beecroft, who has been

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an asset stripping executive. may employ five people? He doesn't

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employ them directly. If you ask small businesses and the Federation

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of Small Businesss what the biggest problem is, it is not whether they

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can sack workers, it is whether they can get the finance from the

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banks, particularly the Royal Bank of Scotland, to take the workers on

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in the first place. That is the biggest single problem. This

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Beecroft Report, it does have some good things in it. Taking the fruit

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analogy, there is decent apples in there, but two or three very bad

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ones. The things like putting off the compulsory fund pension

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contributions are being done, a lot is being done. What is not being

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done is to have a sack on the spot culture just at the time when there

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is no economic confidence. There is no chance, in your view, of the

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Government to bring in those regulations? Not the one that says

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sak-on-the-spot. In this country, we in this country do not believe

:12:30.:12:34.

that is a price worth paying, even if they might in America.

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Frightfully rude, I should have brought you in. I want to bring

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Dominic on the point that whether this Government will introduce this

:12:41.:12:44.

particular, do you think the Prime Minister is on your side, the

:12:44.:12:49.

particular point about making it easier to hire and fire? I'm not a

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psychologists, I'm a politician. You are asking me to guess what the

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Government will do, don't -- are asking me to guess what the

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Government will do. Don't you know what your leader

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will do? Does he agree with you? hope he does. You don't know?

:13:05.:13:09.

are having a consultation and we will find out. On the issue of

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firing on the spot. There are whole swathes of ways of doing this. We

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extended the period from one to two years, and I didn't hear Lord

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Oakeshott complaining then. I'm in favour of that. What we are arguing

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about is this one thing here which you Conservative right-wingers seem

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to be fixating on, which is the sack-on-the spot culture. You don't

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need to throw jibes. The one to two years has been done by the

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Department of Business. You support that. So for two years you are

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happy with sack-on-the spot. When you take someone on it is

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reasonable to have two years. The sensible parts of Beecroft are

:13:51.:13:56.

being done already, so why is there suddenly this great attack on Cable

:13:56.:14:03.

because they won't do the sack-on- the-spot thing. As you have

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accepted, most of it is completely uncontentious. This particular

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point is held by people like Tominic Raab and his friends to be

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abs you luetly key. Absolutely keen. It is a totem pole. What about the

:14:20.:14:23.

United States? Two-thirds of economies are generated by firms

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that employ fewer than 50 people. So if we want to create new jobs,

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it is only going to come from one place, that is from entrepeneurs

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who are taking risk. So far so uncontentious? If we talk about

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sacking on the spot, I want to be clear. The thing to cause people to

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be sacked on the spot is not regulation, but the debt problem

:14:46.:14:50.

that is bearing down on this country and the austerity. You

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can't project people from losing their jobs by having all this

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legislation in place. That is what we learned in the United States.

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The one thing you have to do is create new jobs. And that GDP

:15:00.:15:05.

construction can only occur if you have a risk-taker, the risk-taker

:15:05.:15:10.

needs to know if he or she puts his capital down, that they can

:15:10.:15:14.

manoeuvre who are my employees, what is the nature of the business,

:15:14.:15:21.

can I innovate fast. What we have to do in Britain is to innovate

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fast. We have that already. Look at this clart, you will be able to see

:15:25.:15:29.

it, -- This chart. You will be able to see, it was referred to in the

:15:29.:15:34.

piece. It is the OECD's assessment of employment protection in this

:15:34.:15:41.

country. You can't see it Davit Blanchflower, but you know the

:15:41.:15:47.

facts. I have it here. The UK is down there, why does that have

:15:47.:15:50.

anything whatsoever to do with economic performance? The point is,

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the debt problem in this country has created such a burden on growth,

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the point is how are you going to get growth going, you are not going

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to go through the state. Davit Blanchflower you are in the states.

:16:03.:16:13.
:16:13.:16:15.

Putting your hand up, you can speak. Job protection, there is no

:16:15.:16:19.

question it is a problem. If you look at the World Bank's business

:16:19.:16:23.

ratings, the UK ranks 7th behind the US and Canada, same countries.

:16:23.:16:27.

There is no evidence whatsoever to say it is regulation, and actually,

:16:27.:16:32.

I agree that the big problem in the UK are two things, lack of demand

:16:32.:16:36.

and lack of access to finance to small firms. None of which are

:16:36.:16:40.

being dealt with. All of this stuff is just a way to scare workers,

:16:40.:16:44.

make them have an increased fear of unemployment, stop consuming,

:16:44.:16:49.

increase spending, lowering growth. I think this looks like a right-

:16:49.:16:53.

wing disaster. Can I say something nice about the

:16:53.:16:57.

stories, please. Hang you, you want to hear something nice, we don't

:16:57.:17:01.

want to hear that! Seriously, the point he's making, and the point

:17:01.:17:05.

about I'm already Jack, we have a totally different Labour market

:17:05.:17:09.

than 20 years ago. I pay tribute for Mrs Thatcher for cracking the

:17:09.:17:13.

strength of the unions, we have a free and flexible market. Look at

:17:13.:17:17.

Vauxhall, it is not a problem any more. I want to talk to Tominic

:17:17.:17:23.

Raab now, about this point that David Blanchflower -- Dominic Raab

:17:23.:17:26.

now, about this point that David Blanchflower made. If people fear

:17:26.:17:30.

for their jobs, they are not going to consume, and without consumption

:17:30.:17:34.

you don't get demand and therefore no growth? That may be true, but if

:17:35.:17:38.

they are languishing unemployed. is rather serious? There are a

:17:38.:17:45.

whole range of competing risks here, the big risk for us is we have 22%

:17:45.:17:48.

youth unemployed, 8% unemployed, I agree with the points about finance,

:17:48.:17:52.

we have told the banks we have introduced major reforms, we

:17:52.:17:55.

probably agree on most of those. We are telling the banks two different

:17:55.:18:00.

things at the moment. Our control over certain things, like finance,

:18:00.:18:04.

is wanting to stop bail outs happening again. One of the things

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we have total control about is the regulatory climate. The problem

:18:07.:18:11.

with the chart, it is four years old, if you look at what the IOD

:18:11.:18:14.

estimates for last year, they said the equivalent of the output of

:18:14.:18:18.

Singapore is what businesses lost in the regulatory burden. That is

:18:18.:18:25.

why if you look at other surveys. Anecdote. We are still well down

:18:25.:18:30.

towards the deregulated labour markets around the world.

:18:30.:18:34.

Please? Smaller companies need to face less regulation. You can

:18:34.:18:38.

choose what is the level of employees at which you want to have

:18:38.:18:41.

protection of employment begin, but that's not even the critical issue

:18:41.:18:44.

here. I think this is what the Beecroft Report isn't addressing.

:18:44.:18:48.

Is what is the bigger question of how to incentivise more risk-taking

:18:48.:18:54.

in the economy. That involves a question about tax policy,

:18:54.:18:57.

regulatory policy, frankly, monetary policy and what purpose it

:18:57.:18:59.

service in the current environment. The point is, this country needs to

:18:59.:19:02.

have a massive debate, about the relative balance between these

:19:02.:19:07.

different things. All with a view to incentivising more risk-taking.

:19:07.:19:11.

I agree with, that we need more investment and more confidence and

:19:11.:19:14.

more growth, at the moment it is not working.

:19:14.:19:19.

Thank you. The dealers who make-or- break currencies, were willing to

:19:19.:19:23.

pay a little more to buy euros, it was a reflection of the weekend

:19:23.:19:26.

comments by leaders that Greece will stay in the euro. Easier said

:19:27.:19:30.

than done, perhaps what may determine the fate of the euro, and

:19:30.:19:34.

of many European economies, is much less words of politicians, than the

:19:34.:19:37.

actions of their citizens. Specifically whether they are

:19:38.:19:42.

willing to leave their money in the banks, and whether those banks are

:19:42.:19:46.

themselves judged safe. Paul Mason, our Economics Editor,

:19:46.:19:51.

is here, before you talk about that. It didn't seem to me to achieve

:19:51.:19:55.

very much that gathering in America. That is clear, the news is, nothing

:19:55.:19:59.

happened in the weekend. The G8 leaders don't get together often.

:19:59.:20:03.

It was an opportunity. What we can say is the battle lines inside the

:20:03.:20:06.

powerful nations were drawn more clearly in the sense that Germany

:20:06.:20:10.

is a bit more isolated in its insistence that there has to be a

:20:10.:20:19.

lot of austerity in Europe. The growth wing strengthened its hand.

:20:19.:20:23.

The good news today is no bank run in Greece and Spain. Towards the

:20:23.:20:27.

end of the week people in the markets were pretty wordied that

:20:27.:20:32.

people would pull their money out of the banks. What passes for good

:20:32.:20:36.

news today is there is not a run on the bank? That is not just because

:20:36.:20:43.

we don't like to see queues outside banks or 1930s-style scenes. It is

:20:43.:20:45.

very difficult to understand at the moment what is holding Europe

:20:45.:20:49.

together. Europe has a sovereign debt problem. The European banks

:20:49.:20:53.

are currently buying the debt of countries, because the European

:20:53.:20:56.

banks have been given money by the European Central Bank. If there is

:20:56.:21:01.

a bank run, that is not just a bad thing for Greece, where the most

:21:01.:21:04.

likely candidate it is for it to happen. A bank run, for reasons I

:21:04.:21:08.

will explain in a minute, can take apart the very mechanism that

:21:08.:21:14.

allows the money to flow through banks to state. The whole situation

:21:15.:21:18.

being created could come tumbling down if we got one queue outside a

:21:18.:21:24.

big bank in Athens. It is technical, but here is why.

:21:24.:21:29.

Eurozone banks send money to each other through a system known as

:21:29.:21:34.

Target 2, it is a payment system, not a lending system. All

:21:34.:21:37.

transactions take place within the European Central Bank, not direct

:21:37.:21:43.

between a Greek bank and a Germany bank, say. Here is the problem,

:21:43.:21:47.

with the Greek banks in droubl, they can only operate in this

:21:48.:21:52.

system because the ECB is letting them draw money they don't have. It

:21:52.:21:57.

is auld emergency liquidity assistance, ELA, it is a lifeline

:21:57.:22:02.

the European Central Bank has to vote for, twice a week. Last week

:22:02.:22:08.

it was raised ten billion, to 100 billion euros. If a real bank run

:22:08.:22:11.

begins in Greece, independent of who wins the election, that

:22:11.:22:19.

lifeline could be shut down. It did seem quite clear, pleasingly

:22:19.:22:22.

clear. There is a European meeting later this week? It is a dinner of

:22:22.:22:31.

the heads of state, convened by your favoured man in Europe, Mr Van

:22:31.:22:36.

Rompey. There is fun already happened there is two-and-a-half

:22:36.:22:42.

pages of detail before the immortal statement, "before the end of

:22:42.:22:46.

dinner, I propose we talk about recent developments in the

:22:46.:22:49.

eurozone". It is a kind of acceptance that at the big

:22:49.:22:52.

diplomatic evidence there is not much more action until the Greek

:22:52.:22:57.

election on the 17th of June. And while Greece is a ticking detonator,

:22:57.:23:02.

ready to go, what people are then worried about is what it sets off.

:23:02.:23:05.

Because while Greece is, we have discussed again and again the Greek

:23:06.:23:10.

problem, the banks are effectively bust, they are on life support from

:23:10.:23:14.

the European system. It is what happens if the Spanish banking

:23:14.:23:19.

system is in some way ignited by that detonator. What you don't want

:23:19.:23:24.

is to have an unstable political situation in Greece, where a

:23:24.:23:28.

trigger is either through the bank run system, or simply by the idea

:23:28.:23:33.

that the Greek also not carry out the austerity moves, that the

:23:33.:23:38.

crisis comes in Greece at a point when the Spanish banking system is

:23:38.:23:42.

not stablised. They are trying to stablise the Spanish banking system

:23:42.:23:46.

and want to give the Spanish banks 100 billion. Now we have the

:23:46.:23:50.

problem we always run into, the Spanish bank doesn't want to be

:23:50.:23:53.

bailed out at the moment. That is where we are, by Wednesday night we

:23:53.:23:57.

might be is somewhere else, or by the time coffee and the canapes

:23:57.:24:01.

come out, I'm not sure. Two people who know a thing or two about banks

:24:01.:24:08.

in trouble, are Gillian Tetting, managingedor of the Financial Times

:24:08.:24:15.

in -- managing director of the Financial Times in America.

:24:15.:24:21.

-- Gillian Tett. Are we there yet? The ECB has

:24:21.:24:29.

propped up the banking system to an extraordinary degree, which is good

:24:29.:24:33.

news, but the key challenges are very serious. The question is, what

:24:33.:24:37.

are they doing behind the scenes to prepare for the worst case. People

:24:37.:24:42.

behind the scenes should watch are they supporting the bond system,

:24:42.:24:46.

will they create an insurance scheme for the entire eurozone, and

:24:46.:24:50.

just how much more can the ECB do. We hope to explore some of those,

:24:50.:24:54.

what is your view of whether there will be a run on the banks?

:24:54.:24:58.

tricky parts is in terms of how Greece will be managed, is manage

:24:58.:25:02.

the cross-border exposures, the extent to which banks are indebted

:25:02.:25:06.

to banks across the border has to be covered. That is the big

:25:06.:25:10.

question. How is it covered, by what Gillian was talking about?

:25:10.:25:15.

There has been experience of this, in the 1980s in Latin America, you

:25:15.:25:18.

had a big crisis of the banks potentially collapsing and the

:25:18.:25:22.

currencies collapsing. It was covered, in effect, in a system

:25:22.:25:31.

known as Brady Bonds, US dollars security, an analogy could be the

:25:31.:25:34.

eurobonds. What is happening now? If they have any sense, they will

:25:34.:25:39.

be working out how that eurobond- type cover can work to stablies

:25:39.:25:43.

those currencies, if there is any risk in that cross-border exposure,

:25:43.:25:46.

between the banks transferring. That's the defence mechanism that

:25:46.:25:49.

needs to be put in place at this point in time in Europe. You have

:25:49.:25:52.

spoken to a lot of these people at the European Central Bank, haven't

:25:52.:25:57.

you? I have recently, yes. Is that what they are doing? They are

:25:57.:26:02.

certainly looking at just how many extraordinary weapons they can pull

:26:02.:26:06.

out of the Arsenal and fire. Over the last year or so they have

:26:06.:26:10.

already surprised people by -- arsenal and fire. Over the last

:26:10.:26:17.

year they have already surprised people by old actions with the LTRO.

:26:17.:26:24.

What is that? Long-term retail operations, the ECB could be

:26:24.:26:28.

fatastically bold if it wanted. We have an article from the Polish

:26:28.:26:32.

Finance Minister today, alling for unlimited purchases of the eurozone

:26:32.:26:37.

bonds by the ECB. That is a very big step for the Germans to stand

:26:37.:26:42.

up to. The Germans are against all that? They have been very cautious

:26:42.:26:47.

up to now. Germany has to recognise, to some extent and to a large

:26:47.:26:52.

extent, it hasn't been explained to the German voter, but the German

:26:52.:26:56.

economy is being largely subsidised by keeping its exports competitive

:26:56.:27:00.

by the other countries in the eurozone. If these countries are at

:27:00.:27:07.

risk, the danger is that the German currency s or the eurobit of that,

:27:07.:27:10.

deflates rapidly making Germany uncompetitive. Germany has had a

:27:10.:27:16.

boom, because of the high level of stability in German employment, in

:27:16.:27:20.

marked contrast to what we were hearing, it has meant the German

:27:20.:27:24.

consumer is not worried about losing their jobs and is spending

:27:24.:27:27.

more. If there is the sort of banking

:27:27.:27:34.

crisis that we are thinking about, what happens to banks in this

:27:34.:27:39.

country? I think this is very much almost a third order, if you like,

:27:39.:27:44.

the second order was the contagion alluded to in terms of Spain and

:27:44.:27:49.

Italy, the third order is the UK, which has less exposure to

:27:49.:27:56.

continental European banks. What about Santander, which took over

:27:56.:28:01.

Abbey National? Santander UK is isolated, it can't pay a dividend

:28:01.:28:05.

to the Spanish parent unless the FSA approves that. If you had money

:28:05.:28:09.

in santand der you would loaf it there? It is pretty safe. The only

:28:09.:28:14.

downside to it, is you can'tness -- the bank can't get capital out of

:28:14.:28:17.

the parent in Spain to support itself, in a way another bank may

:28:17.:28:22.

be able to. The rest of that is very safe. I support Ian's point

:28:22.:28:26.

and pick up on something he said earlier. The good news about the UK

:28:26.:28:31.

system is people have got deposits in UK banks do know there is an

:28:31.:28:34.

insurance scheme in place, they know who stands behind it. One of

:28:34.:28:39.

the big problems in the eurozone is there isn't a common insurance

:28:39.:28:43.

scheme for the entire area. If you are a Greek depositor, you don't

:28:43.:28:46.

know who is backing it, at the end of the day. When it is said the

:28:46.:28:49.

issue right now is the cross-border balances being covered, what is

:28:49.:28:53.

happening in the financial system now is you are seeing fracturing in

:28:53.:28:57.

terms of how banks actually order their businesses, that is

:28:57.:29:02.

incredibly important. If you were a Greek with funds on deposit in a

:29:02.:29:05.

Greek bank, surely you could move it to a German bank? That is why we

:29:05.:29:08.

have money moving out of Greece right now. The legality of this

:29:08.:29:11.

protection scheme, and the question of who is responsible for whom, it

:29:11.:29:15.

is simply not defined right now. What you have already is many banks,

:29:15.:29:19.

as Ian knows, essentially saying, if I'm lending money to Italian

:29:19.:29:25.

companies, I want to make sure I'm electing -- collecting money from

:29:25.:29:28.

Italian depositors to match them up. If you go back to two or three

:29:28.:29:34.

years, everyone thought it was a common euromush, they were treating

:29:34.:29:38.

it like a single currency area, the banks are don't that any more.

:29:38.:29:43.

is to cover the cross-border exposure, if a bank is borrowing

:29:43.:29:48.

across country borders, there is an insulation in the banks for the

:29:48.:29:52.

cross-border exposure. That is, in effect, what the ECB has to put in

:29:52.:29:56.

place to keep it going, that is the called firewall protection they are

:29:56.:29:59.

working on. Time for something positive, it is

:29:59.:30:03.

a pretty rare commodity in coverage of the Middle East, where frontline

:30:03.:30:06.

journalism focuses on bombs, shootings, torture and suffering.

:30:06.:30:11.

For every person who dies in a bomb explosion, many others are wounded,

:30:11.:30:15.

often serious lo. There is a remarkable hospital in the

:30:15.:30:20.

Jordanian capital, Amman, which offers to repair those victims. It

:30:20.:30:23.

has began caring for patients from Iraq, and now patients come from

:30:23.:30:33.

all over. All the patients have something in

:30:33.:30:43.
:30:43.:30:43.

common. They have been terrorised, by explosions, by bullets, by

:30:43.:30:53.
:30:53.:31:07.

catastrophy. I admire my patients. They are great, they are strong.

:31:07.:31:11.

have come to Jordan to meet the faces behind the statistics. Tucked

:31:11.:31:16.

away in a suburb of Amman, the forgotten victims of violence in

:31:16.:31:20.

the Middle East. Is survivors of unimaginable horrors.

:31:20.:31:28.

Here, doctors are reconstructing their broken bodies. And helping

:31:28.:31:38.
:31:38.:31:41.

them rebuild their lives. When we get a result, it makes you feel

:31:41.:31:46.

good, really good. Dr Majd el-Rass, is a Syrian surgeon, preparing to

:31:46.:31:52.

operate on a young Iraqi girl, injured in a bomb. When I see these

:31:52.:31:59.

patients, I feel I'm not having enough, I should give more. They

:31:59.:32:07.

need more. They are suffering, they didn't do anything bad to suffer,

:32:07.:32:12.

they are here asking us to help them.

:32:13.:32:18.

Waiting anxiously is this girl. An explosion outside her home in

:32:18.:32:21.

Baghdad last September killed her brother, and shattered her leg. She

:32:21.:32:27.

hasn't been able to walk or go to school since then. TRANSLATION:

:32:27.:32:31.

doctors in Iraq told me, if they operation doesn't work out, I will

:32:31.:32:35.

have to have an amputation. That's why I'm scared. Since the moment I

:32:35.:32:45.
:32:45.:32:45.

arrived in Jordan, I have been nervous. This is the first stage of

:32:45.:32:50.

surgery. She will need a lot, at least three or four. We hope, after

:32:50.:32:57.

that, she will walk. But there is always a risk. There is a risk of

:32:57.:33:02.

amputation, always. By the time they get here, the

:33:02.:33:06.

patients are all extremely complicated medical cases. And over

:33:06.:33:10.

many months and years they face multiple gruelling surguries. But

:33:10.:33:20.
:33:20.:33:20.

the care they get here is so u Neil Kinnock there is -- surgeries, but

:33:20.:33:28.

the care they get here is so unique, there is a huge waiting list. Set

:33:28.:33:35.

up in to deal with the patients of conflict in Iraq, it was a

:33:35.:33:40.

temporary unit. But with increasing conflicts, the hospital had to

:33:40.:33:47.

expand, with an increase in 46%. It has taken in patients from Libya,

:33:47.:33:51.

Yemen, Iraq and Syria, and Egyptians. Amongst the Syrians,

:33:51.:33:55.

desperate to keep in touch with news from home, there is a special

:33:55.:33:58.

camaraderie. Almost all are afraid to be identified, because of

:33:58.:34:08.
:34:08.:34:09.

concerns for relatives left behind. Not Abu Hassan, he managed to get

:34:09.:34:13.

both himself and his family out. A woodcutter from Deraa, he says he

:34:13.:34:17.

was politicised when he saw the Al- Assad's response to peaceful

:34:17.:34:24.

demonstrations on the streets. He began to mobilise young

:34:24.:34:28.

protestors, and witnessed and filmed, as demonstrators were

:34:28.:34:38.
:34:38.:34:38.

gunned down. Soon he was rounded up, interrogated and tortured.

:34:38.:34:42.

TRANSLATION: I was handcuffed and blindfolded, and the interrogator

:34:42.:34:47.

told me he would bring Syrian television in, and I must tell them

:34:47.:34:51.

I smuggled weapons from abroad, and I regreted it. I said I cannot do

:34:51.:34:55.

that. He said he knew how to make me confess, then he put burning

:34:55.:35:00.

coals on my feet, and poured a kettle of boiling water over my

:35:00.:35:05.

legs. But he knows he's lucky, only Syria's walking wounded are making

:35:05.:35:15.
:35:15.:35:21.

it here. Saed had to be operated on three times, but in the end the 27-

:35:21.:35:26.

year-old's leg had to be amputated. He says he was shot while helping

:35:26.:35:31.

wounded protestors, shot by snipers. He hid, sleepless with pain on a

:35:31.:35:37.

farm for seven months, before being smuggled here for treatment. Today

:35:37.:35:41.

the doctor is preparing Saed's stump for a prothesis. I can't

:35:41.:35:45.

sleep for one week before an amputation, and one week after the

:35:45.:35:51.

amputation. Amputation for me, or for any surgeon is like failure.

:35:51.:35:56.

It is like a failure. But times it is the saving measure, the saving

:35:56.:36:06.
:36:06.:36:06.

of life sometimes. For months on end, this hotel is a

:36:06.:36:15.

home from home for the patients. Some will have to return year after

:36:15.:36:24.

year. Amid the pain, hope and expectation. But most of all, this

:36:24.:36:31.

is a place of waiting, and for many, progress is slow.

:36:31.:36:36.

This boy was six years old when a bomb went off at a family funeral

:36:36.:36:41.

in Baghdad. He lost several relatives, as well as his left leg,

:36:41.:36:46.

left eye, and half of his face. Already he's had 25 operations. To

:36:47.:36:52.

help rebuild his mouth, muscle was transferred from his back.

:36:52.:36:56.

Complicated surgery rarely perform anywhere else in the world.

:36:56.:37:00.

One in ten of the project's patients at the moment are children.

:37:00.:37:03.

And in room 502, they have just opened a makeshift school. The

:37:03.:37:08.

teacher told us the children are so keen, that they pile into class the

:37:08.:37:13.

moment she arrives at the hotel. Most of them now are Iraqis, but

:37:13.:37:16.

MSF is readying itself for an influx from Miria in the months

:37:16.:37:20.

ahead. What strikes you most about these

:37:21.:37:26.

children is the complete absence of self-pity. This 12-year-old is from

:37:26.:37:30.

Fallujah. TRANSLATION: I have been here for a

:37:30.:37:37.

year. This bit of my face used to be like the other side. I have had

:37:37.:37:42.

two operations so far. How is it being here, is it difficult to be

:37:42.:37:52.
:37:52.:37:57.

away from home? It's good? In what way? You like the weather. You like

:37:57.:38:04.

the calm and the fact that there are no explosions. Hussein is

:38:04.:38:09.

waiting for a third skin graft. He showed me how he was burned in a

:38:09.:38:19.
:38:19.:38:34.

bomb. He says it hurts, but only at night. The patients living behind

:38:34.:38:38.

these doors all have very visible injuries, but hidden away is the

:38:38.:38:43.

mental pain, of men who have been rejected for work because of their

:38:43.:38:47.

disfigurement. Of women so badly maimed they have been divorced by

:38:47.:38:51.

their husbands, and children, ostracised at school because of

:38:51.:38:54.

their disfigurement. And the psychological wounds are extremely

:38:54.:39:00.

hard to treat. This man's deepest wounds cannot be

:39:00.:39:04.

seen. On day out with his family, the young Yemeny's car was hit by a

:39:04.:39:09.

rocket, killing his wife and two- year-old son, in front of him.

:39:09.:39:12.

Tomorrow he will have complex surgery to transplant a bone from

:39:12.:39:22.

his leg to his arm, and staff are anxious about him. He has attempted

:39:22.:39:28.

suicide three times. TRANSLATION: Since it happened I have known no

:39:28.:39:34.

peace, none at all, I'm in constant pain. I had four operations in

:39:34.:39:38.

Yemen, each one made things worse. Here I love the doctors, they are

:39:38.:39:44.

like a family to me, anything we need, they give us.

:39:44.:39:49.

It is Wednesday afternoon, and they have opened up the hotel ballroom.

:39:49.:39:53.

Every few months staff put on a special party for the patients, to

:39:53.:40:01.

try to lift their spirits. Time to keep a close eye, this woman is

:40:01.:40:05.

responsible for the patients psychological welfare. Do you worry

:40:05.:40:12.

about their physical or mental injuries more? The mental injury,

:40:12.:40:20.

the physical will be treated. It is the last day of the week, and

:40:20.:40:28.

the doctor has patients to check up on. Three days after surgery,

:40:28.:40:33.

wassan is recovering slowly. Her mother is concerned that she

:40:33.:40:38.

has lost weight. That is her on the left, taken before the explosion. A

:40:38.:40:43.

young women now reduced by her injury to childlike dependency. But

:40:43.:40:51.

all are relieved that the first operation has gone to plan. Saed is

:40:51.:40:55.

busy rebuilding his strength. As soon as he gets his new leg and can

:40:55.:41:01.

walk on it, he has told me he's going straight back to Syria. The

:41:01.:41:05.

doctor is gathering his strength for a new influx of patients.

:41:05.:41:13.

hardest part is to see the patient on arrival. When he arrives to me,

:41:13.:41:17.

especially children. I have my habit, when I see a child with a

:41:17.:41:21.

fracture of the limbs o a problem with the limbs, when they arrive to

:41:21.:41:26.

me, I say you will walk for me on both limbs, with a football, I will

:41:26.:41:36.
:41:36.:41:40.

bring the football. If you didn't exist or this

:41:40.:41:45.

hospital didn't exist, what would happen to them? It would be

:41:45.:41:55.
:41:55.:41:56.

catastrophic for them. Catastrophic. Now, one of the greatest voices in

:41:56.:42:03.

the world was heard in London earlier this evening, Jessie Norman,

:42:03.:42:06.

the great American soprano, gave her first concert in a decade on

:42:06.:42:13.

the South Bank. A programme from Gershwin and Bernstein, to Rodgers

:42:13.:42:18.

and Hammerstein. She rarely gives interviews, but she has given one

:42:18.:42:28.
:42:28.:42:33.

to Steve Smith. Jessye Norman is a diva, in a good

:42:33.:42:38.

way, and husband been one for 40 years, if you think she has a great

:42:38.:42:41.

voice, you are quite wrong, unusually she has three great

:42:41.:42:47.

voices. I have the great privilege of

:42:47.:42:54.

having a lot of low notes, a very strong middle voice, and high notes

:42:54.:42:57.

as well. Do you ever ring people up in different voices on the phone

:42:57.:43:00.

and catch them out, does that work? I have never tried it. Most people

:43:01.:43:04.

recognise me on the phone, I don't think I would get away with it at

:43:04.:43:14.
:43:14.:43:19.

all, I hadn't thought of it. Miss Norman was born and raised in

:43:19.:43:23.

what is then the segregated south of the United States. Long before

:43:23.:43:27.

she performed the classical repertoire, other styles claimed

:43:27.:43:33.

her. Growing up I listened to a great deal of gospel music. I love

:43:34.:43:39.

jazz, I love singing the American song book, these things that I will

:43:39.:43:47.

be singing. Cole Porter a Gershwin? Rodgers and hammer stein, Gershwin.

:43:47.:43:51.

This is all beautiful music s I love it T I want other people who

:43:52.:43:57.

are stuck, as it were, in what we call the traditional classical

:43:57.:44:02.

canon, I would encourage them to allow those walls to fall down, and

:44:02.:44:06.

to allow themselves to listen to a song of George Gershwin and be

:44:06.:44:16.
:44:16.:44:22.

happy about it. # It is very clear

:44:22.:44:28.

# Our love is here to stay. Is there still snobbery in the

:44:28.:44:33.

classical world? Oh yes, we are very snobbish, we think if it

:44:33.:44:37.

hadn't been written, particularly and preferably in the 19th century,

:44:37.:44:42.

somewhere in Europe, it can't possibly be as good. That is simply

:44:42.:44:48.

a mistake. Jessye Norman backs Barack Obama

:44:48.:44:53.

for a second term, and not just because he gave her a medal. She

:44:53.:44:57.

supports him over gay marriage. have never understood why it

:44:57.:45:02.

bothers other people so. If you're in a committed hetrosexual

:45:02.:45:07.

relationship, why does it bother you that the people across the road

:45:07.:45:13.

are the same-sex and happy together. Wouldn't you just want to celebrate

:45:13.:45:23.
:45:23.:45:24.

love in any form that it can occur in this challenging world of our's?

:45:24.:45:29.

Religion plays a great big part, particularly conservative religion.

:45:29.:45:36.

I don't know how conserve ive and religion goes together, since any

:45:36.:45:43.

religion is meant to be about love, and understanding, and acceptance.

:45:43.:45:53.
:45:53.:45:53.

So conservative and religion is an objectiony moron for me.

:45:53.:46:01.

Oxymoron for me. You're from the same town as James

:46:01.:46:07.

Brown? I saw him in the lobby, and I thought should I go and say hello,

:46:07.:46:13.

or walk by and keep smiling. He turned around and he said, Jess,

:46:13.:46:19.

how marvellous to see you. And so I said, I was going to say hello, but

:46:19.:46:24.

I certainly could imagine that you had any idea. He said he knows all

:46:24.:46:30.

of his homegirls. I wouldn't do my job properly, and usually that is

:46:30.:46:35.

how it is, if I didn't say, could you please sing a little for us.

:46:35.:46:40.

# Falling in love with love # Is falling for make-believe

:46:40.:46:46.

Falling in love with love # Is playing the fool

:46:46.:46:52.

Good, would you say that you are a diva? One thinks of a diva as being

:46:52.:46:58.

a person who is rather difficult to be around, and difficult to be with,

:46:58.:47:05.

forgive the dangle participles, and capricious and generally rather bad

:47:05.:47:14.

company, and I'm not like that. If a diva is a person that takes

:47:14.:47:20.

In-depth investigation and analysis of the stories behind the day's headlines. Is the power to sack workers good for the economy? Are Europe's banks broken? Plus the Jordan hospital for blast victims and Jessye Norman. With Jeremy Paxman.


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