:00:11. > :00:16.Tonight, bankers back in the dock as Barclays is found guilty of
:00:16. > :00:22.lying to customers and investors, by tempting to rig interest rates.
:00:22. > :00:26.The bank is fined, the boss forgos his bonus, but is that enough, and
:00:26. > :00:29.was everyone else at it. The regulator tells us the wrongdoing
:00:29. > :00:35.went further than one rogue bank. We have to look at each case on its
:00:35. > :00:39.own particular facts, but the initial indications is that
:00:39. > :00:42.Barclays was not the only firm involved in this. As we understand,
:00:42. > :00:46.RBS was in the frame, we ask our panel what needs to be done to
:00:46. > :00:49.control our banking system. How hard do you have to look before you
:00:49. > :00:54.find this on your computer, more importantly, how hard do your kids
:00:54. > :00:59.have to work. I typed in two words on my laptop, I was absolutely
:01:00. > :01:03.gobsmacked by what came up. I had no idea at that point, just how
:01:03. > :01:08.explicit the pornography was. campaigners warn of the Government
:01:08. > :01:13.going soft on porn, we talk to the virtual reality pioneer, Jaron
:01:13. > :01:18.Lanier, and ask our panel if it's time to make us opt in to what we
:01:18. > :01:23.view. Also tonight:
:01:23. > :01:29.Welsh baritone Bryn Terfel talks to us on the eve of his major Welsh
:01:29. > :01:39.music festival. I can't act. I put myself in whatever the director
:01:39. > :01:41.
:01:41. > :01:46.tells me, I try my best to achieve his insights and thoughts.
:01:46. > :01:49.Good evening, how do we put some of the banker blame game behind us?
:01:49. > :01:52.Bob Diamond the head of Barclays asked the select committee last
:01:52. > :01:55.year. Tonight he may be eating his words, after his bank was found
:01:55. > :02:00.guilty of lying over the course of four years about the interest rate
:02:00. > :02:07.it was having to pay to borrow money. Perhaps, most shockingly of
:02:07. > :02:11.all, the lying was done as decently as 2009, as a result of
:02:11. > :02:16.instructions from Barclays senior management. Today Mr Diamond
:02:16. > :02:21.apologised and has given up his bonus. Tonight Newsnight has
:02:21. > :02:24.learned of other banks under the spotlight doing the same thing.
:02:24. > :02:29.Inside Barclays there is the gambling side called investment
:02:29. > :02:33.banking, and more mundane advisory and retail sides. Between them is
:02:33. > :02:36.supposedly a sacrosanct Chinese wall, but this rate-setting scandal
:02:37. > :02:40.appears to have destroyed the very edifice of that wall. The
:02:40. > :02:44.reprecussions could be huge. The InterBank lending rates, which
:02:44. > :02:48.Barclays has conceded it tried to manipulate, are also used to set
:02:48. > :02:51.mortgage rates for millions of people around the world. The banks'
:02:51. > :02:55.traders reached across the corridors to their colleagues, who
:02:55. > :03:00.set these rates, and illegally persuaded them to push them up or
:03:00. > :03:05.down in the bank's favour. That has earned the dubious result of
:03:05. > :03:11.getting fines on both sides of the Atlantic. The CTFC, the American
:03:11. > :03:21.watchdog, said Barclays top boss, not only lowly traders were
:03:21. > :03:29.
:03:29. > :03:39.Some of the e-mails between traders underpinned the level of collusion
:03:39. > :03:46.
:03:46. > :03:49.At the heart of this scandal is LIBOR, or the London Interbank
:03:49. > :03:53.Offered Rate, this interest rate is agreed by a select number of key
:03:53. > :03:56.banks every day, and despite its very local name, it is a global
:03:56. > :04:01.Bevan mark for contracts worth hundreds of trillions of pounds. So
:04:01. > :04:06.even the smallest deviations can save or cost a bank billions.
:04:06. > :04:15.The fact that the banks have been manipulating LIBOR, the rate of
:04:16. > :04:20.interest on those loans, is outrageously shocking. The Barclays
:04:20. > :04:25.boss, Bob Diamond, said today he would give up his bonus this year,
:04:25. > :04:30.he has been trying to draw a line under banker bashing for two years,
:04:30. > :04:34.and even drew an ethical line under the business last year. We have to
:04:34. > :04:38.build a better way of banks generating growth. Second, we have
:04:38. > :04:42.to accept responsibility for what had gone wrong. Finally, and most
:04:42. > :04:49.importantly, we have to use the lessons learned to become better
:04:49. > :04:57.and more effective citizens. Bob Diamond's predecessor, John
:04:57. > :05:01.Varley, boss at the time of the collusion, is 12-1 to be the next
:05:01. > :05:05.Governor of the Bank of England. Diamond had a shred of shame he
:05:05. > :05:08.would resign, he hasn't, if the Barclays board has an inch of
:05:08. > :05:14.backbone they will sack him. Utterly unacceptable that he could
:05:14. > :05:19.carry on after this, and after Barclays' aggressive tax avoidance
:05:19. > :05:23.when they had to pay �500 million back to the Treasury in February,
:05:23. > :05:27.enough is enough. Barclays would have paid a much bigger fine but
:05:27. > :05:30.for the fact of the banks being investigated, they were the first
:05:30. > :05:34.to put up their hands and claim leancy. This suggests this is just
:05:34. > :05:38.the tip of the iceberg, and there are plenty of banks, including some
:05:38. > :05:45.very big British banks, that are waiting anxiously for the wrath of
:05:45. > :05:49.the regulator, or the approbium of the public. We know that other
:05:49. > :05:55.leading banks are involved in these investigations. So we know that the
:05:55. > :06:01.Royal Bank of Scotland, UBS, Citigroup, Lloyds Banking Group,
:06:01. > :06:04.Deutsche Bank, the broker ICAP, are all currently in the spotlight. We
:06:04. > :06:08.could see more events like we have had today. Newsnight understands a
:06:08. > :06:12.handful of RBS traders have already been dismissed for their part in
:06:12. > :06:15.fixing InterBank rates. The state- controlled bank is co-operating
:06:15. > :06:19.fully with regulators both here and in the states. There is no doubt,
:06:19. > :06:23.though, that this latest scandal, surrounding the banking fraternity,
:06:23. > :06:28.will further damage an industry, whose public reputation already
:06:29. > :06:32.ranks below car clampers and tax inspectors. After PPI, outlandish
:06:32. > :06:37.bonus, and the mortgage-backed assets, that caused the financial
:06:37. > :06:40.crisis, this latest may beat them all. Colluding to set the rate of
:06:40. > :06:44.interest that decides how much ordinary people pay for their homes,
:06:44. > :06:48.may prove for banking what phone hacking did for tabloid journalism.
:06:48. > :06:52.We asked Barclays for an interview tonight, they declined our
:06:53. > :06:57.invitation. A little earlier I asked my guest from the Financial
:06:57. > :07:02.Services Authority, how shocked she was at what they had discovered?
:07:02. > :07:06.found the misconduct of Barclays is some of the most serious we have
:07:06. > :07:11.ever seen, that is why the penalty we have imposed is such a
:07:12. > :07:16.significant one. We were looking at this at the end of 2009, beginning
:07:16. > :07:19.of 2010. The more we dug into it and the more we looked into it the
:07:19. > :07:24.more we found in relation to misconduct by the traders and
:07:24. > :07:27.across the relevant desks. We took this very seriously indeed.
:07:27. > :07:32.damaging do you think this could have been, then? The issue that is
:07:32. > :07:35.of concern to us here, is LIBOR is obviously the benchmark rate used
:07:35. > :07:40.for contracts across the world, worth hundreds of millions of
:07:40. > :07:43.pounds. It is really important for the integrity of that rate to be
:07:43. > :07:47.preserved, that the market is confident that the rate that is
:07:47. > :07:51.fixed actually reflects what it is supposed to, which is the amount at
:07:51. > :07:55.which banks can borrow from each other. The risk that was supposed
:07:55. > :07:59.by the misconduct we have seen at Barclays is that the rates risk not
:07:59. > :08:02.being based on those borrowing figure, but were being based on
:08:03. > :08:06.other issues, for instance, the positions of derivative traders in
:08:06. > :08:10.relation to their book, or concerns about Barclays reputation. We took
:08:10. > :08:14.this very seriously indeed. Realistically, you haven't got to
:08:14. > :08:18.the end of things here, how widespread do you think the
:08:18. > :08:21.practice is? We have a number of on going investigations in relation to
:08:21. > :08:24.LIBOR. Whilst those investigations are on going I can't comment on
:08:24. > :08:27.them, when they are concluded we will clearly publicise the outcome.
:08:27. > :08:32.When you say a number, are we talking more than a dozen, more
:08:32. > :08:36.than five, how many are we looking at? I'm afraid I can't give awe
:08:36. > :08:40.number. All I can say is we have a number of investigation that is are
:08:40. > :08:43.on going. But you are pretty sure you are going to find a situation
:08:43. > :08:48.similar to the one in Barclays in at least one of them? I think that
:08:48. > :08:51.obviously we need to look at each case on its own particular facts,
:08:51. > :08:55.but the initial indication was that Barclays was not the only firm
:08:55. > :08:59.involved in this. You have imposed a fine which you say is the largest
:08:59. > :09:04.of its kind, nearly �300 million, that is the kind of sum Barclays
:09:04. > :09:08.could make in half an hour? penalty, the number you talked
:09:08. > :09:12.about is not just our penalty, that is also the penalties imposed by
:09:12. > :09:16.the US authorities as well. They have imposed penalties on Barclays
:09:16. > :09:19.today. The penalty we have imposed we think is a very significant
:09:19. > :09:25.penalty, it is set in accordance with our own penalties' framework,
:09:25. > :09:28.I think the impact on Barclays goes far beyond the simple penalty, the
:09:28. > :09:31.amount of publicity and comments that will have happened today and
:09:31. > :09:35.over the coming days in itself will be significant for Barclays'
:09:35. > :09:39.reputation. Thank you. Here to take the story on, from
:09:39. > :09:44.Washington we have a lawyer for the securities and exchange commission
:09:44. > :09:49.in Washington, he now runs a company advising bankers about
:09:49. > :09:52.regulations. In the studio we have the former City Minister, and a
:09:52. > :09:56.former banker, thank you very much to all of you.
:09:56. > :09:59.In Washington, I will start with you. You heard from the FSA there,
:10:00. > :10:06.in your opinion, does the punishment fit the crime, would
:10:06. > :10:10.this stop any bank doing it again? First, I have to say I'm a former
:10:10. > :10:15.ACC lawyer, not current. I think what the FSA did was not hard
:10:15. > :10:20.enough. I think the facts support conflicts of interest, a systemic
:10:20. > :10:24.breakdown in supervision and management. There is an attempt to
:10:24. > :10:29.blame compliance when compliance was not responsible for it. I think
:10:29. > :10:35.what the FSA did was levied a slap on the wrist, when compared to the
:10:35. > :10:43.US Justice Department, and also the CFTC. If you read the CFTC's order
:10:43. > :10:48.that came out today, there were 18 pages of significant controls,
:10:48. > :10:53.requirements, that Barclays has to adhere to. There is training,
:10:53. > :10:57.supervision. I think this is what I would call not a victimless crime.
:10:57. > :11:02.I think what the FSA could have done, and had the opportunity to,
:11:02. > :11:05.was do more than levy a fine, I think they could have imposed
:11:05. > :11:10.severe restrictions on the ability of Barclays to operate in this
:11:10. > :11:16.market. How would they do that? They could impose the same types of
:11:16. > :11:22.controls that the CFTC did. Would have to make the entire process by
:11:22. > :11:25.which they were to calculate data and submit them, provide it to the
:11:25. > :11:29.regulator. They would have to undergo training, they would have
:11:29. > :11:35.to keep records and beef up their internal controls. Most importantly
:11:35. > :11:40.here, the disappointment that I see, is in a regulatory regime that is
:11:40. > :11:44.designed around tough supervision, there really wasn't tough
:11:44. > :11:51.supervision penalties imposed on this. The supervisers weren't named,
:11:51. > :11:57.when, if you compare with the CFTC did, there were very clear
:11:57. > :12:02.instances pointing out specific instances of supervisory failure.
:12:02. > :12:08.What a regulator has to do is be clear, yes the FSA did the right
:12:08. > :12:12.thing, but it didn't go far enough in imposing specific controls and
:12:12. > :12:17.provisions in Barclays to continue to stay in this area.
:12:17. > :12:21.I will stop you there. You have heard there the blame being levied
:12:21. > :12:25.at the supervision, or the lack of regulation. As a former banker, can
:12:25. > :12:28.you say people should be putting their hands up and saying we did
:12:28. > :12:34.something wrong, you can't just keep pushing the blame on
:12:34. > :12:42.regulation? I think there are a few points here. Very clearly, there
:12:42. > :12:49.was deliberate attempts to manipulate these numbers from the
:12:49. > :12:53.derivative areas to the bit returned to the Reuters that set
:12:53. > :12:57.this rate each day. That process was lax in the way it was being
:12:57. > :13:02.supervised. I think one can't but agree that is the critical flaw
:13:02. > :13:05.here. You are talking about lax as if these are children that were
:13:05. > :13:08.running amock in a playground. Surely the people in charge knew
:13:08. > :13:14.they were doing wrong? I would imagine that it would be difficult
:13:14. > :13:17.not to know that it was quite wrong, what was being influenced. One of
:13:17. > :13:20.the criteria of LIBOR is the rate is set by the people who are
:13:20. > :13:24.responsible for the cash position of the bank, and not by the trading
:13:24. > :13:30.areas of that bank. There shouldn't be any contact between the two.
:13:30. > :13:34.That is the fundamental guideline. This LIBOR position has to relate
:13:34. > :13:39.to the unsecured borrowing between banks, and the rate at which they
:13:39. > :13:45.could borrow that money. When you look at the kind of e-mail that is
:13:45. > :13:50.were sent, the very pally ones, let's open a bottle of champagne,
:13:50. > :13:52.it was a boys' club? There was that kind of culture, there shouldn't
:13:52. > :13:57.have been that kind of communication between those two
:13:57. > :14:01.sides at all, that is the critical thing. You can see from this, the
:14:01. > :14:05.reasons why people are very keen to achieve closer separation between
:14:05. > :14:09.the retail banking side, the Treasury side of the, if you like,
:14:09. > :14:17.the more mundane part of the bank, by comparison with the investment
:14:17. > :14:20.banking piece. Because at the back of this you probably have a
:14:20. > :14:24.boneless structure that is driving behaviours you don't want to have
:14:24. > :14:28.happening. You can talk about a bonus structure or a Chinese wall,
:14:28. > :14:32.but there will be people silting at home saying I don't understand --
:14:32. > :14:36.sitting at home saying I don't understand why there aren't
:14:36. > :14:42.criminal prosecutions over this. Lying on something that is meant to
:14:42. > :14:46.be a standard bearer for the industry? They have let Barclays
:14:46. > :14:49.off lightly, the �300 million is less than Bob Diamond has earned in
:14:49. > :14:53.the last four years. It is a few days trading profit, it could be
:14:53. > :14:57.the profit that arose from one single lie. The American
:14:57. > :15:03.authorities were much stronger in their language than the UK. They
:15:03. > :15:08.used the word "lying", they detailed multiple failures. This is
:15:08. > :15:12.the most corrosive failure of moral behaviour that I have seen in a
:15:12. > :15:18.major UK financial institution n my career. You would like to see
:15:18. > :15:22.criminal prosecutions, presumably? I think fines and public criticism
:15:22. > :15:29.will not stop these behaviours. These behaviour also not stop until
:15:29. > :15:33.the people perpetrating it, or are responseable for oversaeing --
:15:33. > :15:38.Responsible for overseeing them face the prospect of going to jail
:15:38. > :15:42.and criminal charges. What should have happened to Diamond? Barclays
:15:42. > :15:47.people said they were not taking their bonuses, most people would
:15:47. > :15:51.say why are they getting bonus, the bank isn't making an adequate
:15:51. > :15:56.profit, and Mr Dime has had to tear up his business plan. This bank has
:15:56. > :16:00.been fined by the FSA four times in the last two-and-a-half years. Why
:16:00. > :16:03.they were paying bonuses I think, in itself, is highly questionable.
:16:03. > :16:07.What should Barclays Bank do now? They need to look at the people at
:16:08. > :16:11.the top. The chairman at the bank was there when it all happened, the
:16:11. > :16:15.chief executive was there when it happened. What do you mean look at
:16:15. > :16:19.it, do you mean fire them? They have to ask seriously whether the
:16:19. > :16:23.people at the very top of the bank were setting the right cultural toy.
:16:23. > :16:26.In Bob Diamond's BBC Today Programme lecture, he said the
:16:26. > :16:29.culture of an organisation was what happened when you thought people
:16:29. > :16:32.weren't looking. We now know what was happening in Barclays when they
:16:32. > :16:36.thought people weren't looking. They were, in the words of the
:16:36. > :16:41.Department of Justice in America, lying. And we cannot have people
:16:41. > :16:46.like that holding responsible and senior positions in a banks where
:16:46. > :16:50.the taxpayer ultimately stands behind it. Why isn't there a single
:16:50. > :16:54.political leader or party tonight, then, that is calling for him to go
:16:54. > :16:59.f that's right? I don't think we know enough, Emily, about the
:16:59. > :17:03.detail. But the idea that the time has come for deputy heads to hole
:17:03. > :17:09.is a nonsense, the people at the very top must take responsibility
:17:09. > :17:16.for a complete cultural failure. This is a company that is had to
:17:17. > :17:20.pay back �100 million for mis- selling of protection insurance,
:17:20. > :17:23.and multiple fines in multiple jurisdictions. This behaviour
:17:23. > :17:27.didn't just happen here, it happened in America and Asia. It
:17:27. > :17:30.involved a wide number of executive, according to the regulators. There
:17:30. > :17:35.is something deeply wrong at the heart of Barclays, and the response
:17:35. > :17:41.to date has simply been inadequate. Do you think that's right. In the
:17:41. > :17:45.report, we heard many other banks and institutions named. This is
:17:45. > :17:52.presumably going on in the US too, you probably know the ones under
:17:52. > :17:56.investigation there. I agree, being a former regulator in the United
:17:56. > :18:00.States and Britain. Having been a compliance officer and seeing firms
:18:00. > :18:04.from the inside. The heart and soul from any organisation is tone at
:18:04. > :18:13.the top and proper supervision. The evidence here is neither were
:18:13. > :18:16.present. The thing that shocks me the most is the attempt to blame
:18:16. > :18:20.compliance for something is completely wrong. That is situation
:18:20. > :18:25.where senior management have an affirmative responsibility to
:18:25. > :18:30.document that they are supervising. In Asia, here in the states, in
:18:30. > :18:35.England, anywhere in the world, conduct like this is flat out
:18:35. > :18:39.unacceptable. When you say, conduct, there is no proof that anyone
:18:39. > :18:47.actually physically lost money over this? Right? The issue is not the
:18:47. > :18:53.loss of money. The issue is a failure to supervise, consistently
:18:53. > :18:57.in enforcement actions around the world, regulators always point to a
:18:57. > :19:01.failure to supervise as a contributing factor to an initial
:19:01. > :19:07.breach. If these individuals were properly sup advising, they would
:19:07. > :19:12.have not only idea -- supervising, they would have not only looked at
:19:12. > :19:17.the conflicts of interests, but addressed it. There is a failure to
:19:17. > :19:21.deal with conflicts of interest and supervise, if there was, the firm
:19:21. > :19:25.would have been caught out and rooted out months ago.
:19:25. > :19:29.wondering if you were working at Barclays tonight, would you be
:19:29. > :19:33.thinking your reputation was in tatters, or would you be saying, we
:19:33. > :19:37.got off that one quite likely and look at the other ones under
:19:37. > :19:42.investigation, we will just melt into the middle? There are big
:19:42. > :19:46.worries certainly about the supervision point. I superintendant
:19:46. > :19:52.a lot of people don't understand what this relates to. But these
:19:52. > :19:56.interest rates governs about �10 trillion worth of borrowing on the
:19:56. > :20:03.syndicated markets, and �250 trillion of trading in swaps,
:20:03. > :20:06.interest rate cover and other things. It is a very important
:20:06. > :20:10.mechanism. It is crucial the pricing is right, otherwise the
:20:10. > :20:12.counter parties to the organisation, you and I, and everybody else, are
:20:12. > :20:17.basically paying the wrong interest rates. That is what the fundamental
:20:17. > :20:22.risk is that is going on here. What is crucial. Let me just ask you
:20:22. > :20:26.that again, faced with what we have got, essentially a fine, which as
:20:26. > :20:30.Lord Myners said, Bob Diamond could make in four years, they won't be
:20:30. > :20:34.feeling this is something that is so outlawed, so immoral, so
:20:34. > :20:38.criminal, that nobody will be doing it ever again? They will be feeling
:20:38. > :20:43.the reputational damage imposed by this control. Even if they are one
:20:43. > :20:49.of 10 or 12? Even so. There will be big problems associated with this.
:20:49. > :20:53.What is critical to us. And by "us" I mean, us, as a country, is that
:20:53. > :20:58.we put the supervision in place to make sure this type of problem
:20:58. > :21:02.doesn't arise, and bear in mind this was raised back in 200, by the
:21:02. > :21:07.Wall Street Journal. Raised in 200, when you were City's minister, you
:21:07. > :21:12.must have known about this? There were problems of setting The
:21:12. > :21:15.Libertines interest rate structures, this is not a new occurrance -- the
:21:15. > :21:18.LIBOR interest rate structure, this is not a new occurrance. This was
:21:18. > :21:22.not known about at the time, if it had, action would be taken. People
:21:22. > :21:26.have lost money because of this, the Department of Justice in
:21:26. > :21:33.America is very clear in its wording, that losses have arisen as
:21:33. > :21:36.a result of this. We are going to see a lot of litigation.
:21:36. > :21:41.As anyone who has ever looked for porn on the Internet, many of you
:21:41. > :21:45.haven't, but found it any way. It doesn't take a degree in computer
:21:45. > :21:51.science, gone are the days of credit card payments and tricky
:21:51. > :21:58.encryptions, now it is as easy to get as YouTube. Should be providing
:21:58. > :22:02.be made block all pornographic images, an issue looked at tomorrow.
:22:02. > :22:06.Newsnight understands that coalition ministers are currently
:22:06. > :22:12.reluctant to opt-in measures, they want to go for a watered down
:22:12. > :22:15.version of on-line child protection. A good old fashioned scare story,
:22:15. > :22:19.or a genuine threat to Britain's teenagers. Newspapers have been
:22:19. > :22:24.full of headlines, warning about the dangers of unfiltered,
:22:24. > :22:27.unstoppable porn on the Internet. Now the argument's changing. It is
:22:27. > :22:36.not whether porn is damaging young people, it is how the Government
:22:36. > :22:40.should stop children from watching Hi, welcome to our lesson on
:22:40. > :22:43.pornography. At this comprehensive in Sheffield a group of 16-year-
:22:43. > :22:47.olds are being taught the difference between real life and
:22:48. > :22:51.what they see on a computer screen. A girl wouldn't feel comfortable
:22:51. > :22:57.doing something on porn, but boyfriends would expect them to do
:22:57. > :23:01.it. Born in 1996, this is the first generation to be brought up on-line.
:23:01. > :23:05.Do you think that pornography is really easy to get hold of on-line.
:23:05. > :23:09.They don't have to directly type in porn, even when they do it comes up
:23:09. > :23:16.with pages and pages full. They would easily be able to access it.
:23:16. > :23:21.Do you think it should be harder to get hold of? For certain ages, yeah.
:23:21. > :23:24.This sex education class is unusual, though. In other parts of the UK,
:23:24. > :23:30.schools and colleges have been reluctant to tackle issues like
:23:30. > :23:33.porn. The governors don't like it, and often parents don't either.
:23:33. > :23:37.want to know what our young people are looking at, particularly
:23:37. > :23:42.because I have children of my own. When I typed in two words, into the
:23:42. > :23:47.Internet, I was absolutely horrified with how easy it was to
:23:47. > :23:51.get hold of really extreme pornography. I think if our young
:23:51. > :23:54.people have access to stuff like that, we owe it to them to make
:23:54. > :23:58.sure our sex education is really up-to-date, takes account of the
:23:58. > :24:02.fact that they can access this kind of stuff. We need to look at the
:24:02. > :24:05.messages coming from pornography, and counter act some of those
:24:05. > :24:10.messages. At the centre of all this is a shift in the way porn is
:24:10. > :24:14.viewed, the way porn is accessed on the Internet. Just a few years ago
:24:14. > :24:19.many adult sites needed a credit card, now those pay sites have been
:24:19. > :24:25.replaced by what looks like very adult, very X-rated versions of
:24:25. > :24:29.YouTube. The new free sites offer unlimited
:24:29. > :24:33.access to thousands of hardcore video, with no age restriction at
:24:33. > :24:37.all. The material is often so extreme, so accessible, many now
:24:37. > :24:42.think it is time for the Government to step in.
:24:42. > :24:46.There are three main option ones the table, first up, do nothing,
:24:46. > :24:53.many civil liberties groups think policing the Internet should be
:24:53. > :24:56.left entirely up to parents. Next, active choice, sign up for a new
:24:56. > :25:01.broadband contract and you will be forced to choose whether to install
:25:01. > :25:06.a child prodetection filter, all the main broadband providers have
:25:06. > :25:09.agreed do this, it is the Lib Dems preferred option, and Newsnight
:25:09. > :25:13.understands Conservative ministers are keen as well. Many want to go
:25:14. > :25:17.further, an automatic block, a porn filter is turned on by default,
:25:17. > :25:21.that can only be lifted if you contact your internet provider or
:25:21. > :25:26.switch it off. That is supported by Labour, and some backbench story
:25:26. > :25:29.MPs. What we want is a one-click solution, that basically means that
:25:29. > :25:33.adult content is blocked, if you want it, you have to go through the
:25:33. > :25:37.filter to get T we think that would be safer, we think it is a system,
:25:37. > :25:41.we know it is a system that works with the mobile operators, we know
:25:41. > :25:46.it is a system people say they want. Delighted that the Government's
:25:46. > :25:50.consultation is going to look specifically at that.
:25:50. > :26:00.But, there are questions as to whether any block can ever really
:26:00. > :26:00.
:26:00. > :26:05.be effective. With four million customers Talk
:26:05. > :26:09.talk is one of the biggest broadband providers, it has spent
:26:09. > :26:13.millions developing its own system for stopping adult content. We have
:26:13. > :26:18.settings so we can wish not to allow this particular set of
:26:18. > :26:23.children to view pornographic sites, gambling sites. This is a doctor of
:26:23. > :26:26.computing at Cambridge, he says systems like this can be easily
:26:26. > :26:30.evaded. That is how it should work, how
:26:30. > :26:34.easy is it to get round the restrictions? There are several
:26:34. > :26:39.ways of accessing unsuitable sites. We could just use a proxy f we want
:26:39. > :26:42.to go off and look at a porn website, we could type this name in
:26:42. > :26:52.here, and behold we start getting pictures here which your viewers
:26:52. > :26:58.don't want to see. That isn't being blocked at all by
:26:58. > :27:02.Talk Talk. It offers a certain level of protection, but people
:27:03. > :27:07.would be wrong to assume protection is anything like perfect. The
:27:07. > :27:12.system will block some of it, by no means all, if you view it as being
:27:12. > :27:17.a substitute for parenting skills you will be sadly mistake. Switch
:27:17. > :27:20.on Talk Talk safety settings you get an e-mail saying you can relax
:27:20. > :27:25.and let your children surf the Internet. Is that a promise too far.
:27:25. > :27:30.We try to be clear with our customer that is Home Safe is a
:27:30. > :27:34.tool that will make the Internet safer, it won't make it safe, full
:27:34. > :27:39.stop, in no way would we advise customers as a means to stepping
:27:39. > :27:43.away in thinking how their children are using the Internet. Why do you
:27:43. > :27:47.e-mail customers when they change their internet settings, that they
:27:47. > :27:50.can relax and allow their children surf the Internet, isn't that the
:27:51. > :27:54.wrong impression? That is not what we want to do, clearly that is not
:27:54. > :27:57.right. Which want to give customers comfort that they have done a God
:27:57. > :28:00.thing and build their confidence. The Government doesn't really want
:28:00. > :28:04.to go down the road of extra legislation and red tape, but the
:28:04. > :28:10.pressure is on with newspapers and children's charities now getting
:28:10. > :28:13.together to demand stronger action. Unless the industry is seen to be
:28:14. > :28:21.doing more, those voices are only likely to get louder.
:28:21. > :28:28.We are going to carry on the debate here in the studio. Jaron Lanier,
:28:28. > :28:34.the Godfather of internet reality, India Knight, the editor of Loaded
:28:34. > :28:38.and Claire Perry, the Tory MP who you saw in that report.
:28:38. > :28:42.You saw, Claire Perry, a second ago, who is willing to go the whole way,
:28:42. > :28:47.and say if you don't like porn, make people opt in for it. That is
:28:47. > :28:53.the bravest option, isn't it, India Knight? I don't agree, I do like
:28:53. > :28:58.porn and I consume porn, I don't think, I know, statistics show us,
:28:58. > :29:07.that an enormous number of men and women consume porn. That was the
:29:07. > :29:11.phenomenal success of 50 Shades of Grey, triology, busting any Harry
:29:11. > :29:16.Potter records. Porn you see on the Internet is legal, it is not
:29:16. > :29:20.illegal, there is a dishonesty that occurs when lobbies seeking to
:29:20. > :29:24.ghettoise porn link it to child pornography. Nobody sane or
:29:24. > :29:30.rational is interested in looking at child pornography, that is out
:29:30. > :29:34.there all on its own, to conflate child pornography and porn. I don't
:29:34. > :29:37.think we have done that. You are comfortable watching porn, and
:29:37. > :29:41.being known on national television being a viewer of porn, you
:29:41. > :29:45.wouldn't mind opting into a scheme that asked you to choose? I know
:29:45. > :29:49.when my children were small, like any parent, I tortured myself with
:29:49. > :29:54.the idea of the images they might be seeing, and the appalling things
:29:54. > :29:59.I might inadvertantly expose them to. The solution is to have the
:29:59. > :30:05.computer in a public space, like a kitchen or sitting room, and not
:30:05. > :30:13.send nine-year-old kisd up to the stairs -- up the stairs with a lap
:30:13. > :30:17.stop. I put filters on them that my teenage boys dismantled in the --
:30:17. > :30:20.in minutes. I don't want little kids watching t but it is my
:30:20. > :30:23.parental responsibility. I have got children slightly younger, you are
:30:23. > :30:26.right, in an ideal world, this is absolutely part of parental
:30:26. > :30:31.responsibility, keeping kids safe, whether in cars or on the Internet,
:30:31. > :30:35.we know, if you look at the facts, four out of ten families are
:30:35. > :30:39.downloading these device-level filters, six out of ten British
:30:39. > :30:41.children are going on-line, often with their laptop, offer half of
:30:41. > :30:44.kids access the Internet in a private space, something we don't
:30:45. > :30:48.think is right. We have to stop dealing with the perfect and the
:30:48. > :30:51.theoretical and deal with the facts. We know children are accessing this
:30:51. > :30:55.material. It is not porn as we know it, that came across, that teacher
:30:55. > :30:59.is a very brave lady to be tackling that thing. What are you saying,
:30:59. > :31:04.you are saying six out of ten British children probably watch
:31:04. > :31:07.porn on-line? Are able to access pornography on-line. Hypothetically.
:31:07. > :31:10.Also the proportion of teenagers, the filtering drops as your
:31:10. > :31:16.children get to puberty. And arguably that is when you actually
:31:16. > :31:20.want to start being very well aware. I agree being a vigilent parent is
:31:20. > :31:26.absolutely the ideal, the facts are people aren't doing T the current
:31:26. > :31:29.system we believe is defunct and it is time for different. Who is the
:31:29. > :31:33.hypothetical six-year-old constantly exposed to porn.
:31:33. > :31:38.evidence suggests that 82% of British people are really worried
:31:38. > :31:44.about how easys to access porn. It is unique that people feel helpless
:31:44. > :31:49.about it, half of people say their kids know more than them about
:31:49. > :31:53.technology. And others think the school is teaching them how to
:31:53. > :31:58.safely use the Internet, we are teaching them not to put out their
:31:58. > :32:02.number on Facebook. There is a sense of helpless. You edited
:32:02. > :32:07.Loaded for six years, do you think this problem should fall to the
:32:07. > :32:11.broadband companies, the vehicle Which? You access? I think so.
:32:11. > :32:15.Getting everybody to opt in is a step too far. The thing we should
:32:15. > :32:19.stress is adults consume pornography in a healthy way and
:32:19. > :32:23.shouldn't be criminalised. In relation to opting in, and you are
:32:23. > :32:28.married, and your wife doesn't approve, what will that say about
:32:28. > :32:33.that relationship correction it lead to marital break-ups. It does,
:32:33. > :32:37.a lot of people are reporting it is a problem. If you drive anything
:32:37. > :32:40.underground you make it more desirable and aspirational. More
:32:40. > :32:45.people want it if you ban it, same as anything, that is the world.
:32:45. > :32:48.What are you saying f you made people opt in, you think it could
:32:48. > :32:51.have a detrimental effect on marriage in this country? I think
:32:51. > :32:58.it possibly could lead to relationship problems because
:32:58. > :33:04.people are made to feel grubby and secretive. Lots of people consume
:33:04. > :33:07.pornography, why isn't it an issue. The consultation being led by
:33:07. > :33:13.Number Ten tomorrow, this is something with a broad consensus.
:33:13. > :33:18.To get back, we treat the Internet really differently, that is where
:33:18. > :33:25.Gerald's view is so great, you have to opt in to get adult content on a
:33:25. > :33:32.mobile phone. A parent getting a mobile phone contract for a child
:33:32. > :33:37.has to opt in for adult content t works there why not the Internet.
:33:37. > :33:41.Is it better to leave the Internet as the untamed wild west? First,
:33:41. > :33:45.the Internet is not like the printing press or the TV, it has
:33:45. > :33:49.really become more intimate and universal, it is the conversation
:33:49. > :33:53.people have with each other. Getting into the middle of it has
:33:53. > :33:57.more profound implications than getting into the middle of earlier
:33:57. > :34:02.media technologies. My concern is if the Government takes this step,
:34:02. > :34:04.you will enter into a cat and mouse game with all sorts of sneaky
:34:04. > :34:08.technical players from around the world and you will have to escalate,
:34:09. > :34:13.and end up in a different place than you intend. What makes more
:34:13. > :34:17.sense is to look at the motivations of those who would pipe this free
:34:17. > :34:22.porn nothing fee. If you really look at why on earth -- pornography.
:34:22. > :34:26.If you look at why on earth they do it, when kids send to to each other
:34:26. > :34:30.we can't do anything about, that I would prioritise issues like
:34:30. > :34:33.bullying, however. You are saying the porn providers are doing it for
:34:33. > :34:38.money? They are, and how are they doing it for the money, the porn is
:34:38. > :34:42.free, it is not directly for the money. They are using it as bait to
:34:42. > :34:47.gather data about people and children. It is a private spy
:34:47. > :34:52.service. So if the law was focusing on that, if you said that sneakly
:34:52. > :34:56.gathering data on people and selling data has more severe
:34:56. > :34:59.penalties for everybody in the chain, you would get universal
:34:59. > :35:02.support and shut down the motivation, without getting into
:35:02. > :35:05.the middle of expression. It is this bizarre, corrupt idea that
:35:05. > :35:09.because everything is supposed to be free on the internet, the only
:35:09. > :35:12.allowed business is to run these private spy agencies and sell data
:35:12. > :35:17.about people. That is the core problem here, that is the motivator.
:35:17. > :35:20.That is not something the Government will tackle.
:35:20. > :35:25.Internet is a global, unregulate thing, that is why it is a force
:35:25. > :35:28.for good in the world. It is Ince credibly hard to regulate it. We
:35:28. > :35:33.are not suggesting that, Government doing that is bad idea, we would
:35:33. > :35:36.like the ISPs to have a self- regulation model. If you make them
:35:36. > :35:41.do that it is the same as the Government stepping in? It is
:35:41. > :35:44.putting up a consultation about the pros and cons. When we had the
:35:45. > :35:48.debate and the parliamentary inquiry, we had tonnes of ideology
:35:48. > :35:51.about it being too expensive and destroying the Internet economy,
:35:51. > :35:56.there were no facts produced to support any of that, it is
:35:56. > :36:02.assertion. We would like the facts and make the decision. If it had
:36:02. > :36:05.been as easy for Loaded to get pornography to readers as it is to
:36:05. > :36:08.the internet, you would have done brilliantly? Our business was
:36:08. > :36:12.destroyed by the Internet pornography, we were �4, and had
:36:12. > :36:19.you to go and buy t and we could be sued if we break the laws. We
:36:19. > :36:22.operated within the PCC and the retailers, we would be delisted, we
:36:22. > :36:27.couldn't compete. The Internet is a din interprice, they eroded our
:36:27. > :36:30.business and destroyed it. Did we want to do that? No, we weren't a
:36:30. > :36:37.porn magazine. Where do you sit on this debate, do you regret the kind
:36:37. > :36:41.of stuff you pushed as an editor? grew up and became a father, my
:36:41. > :36:46.perspective changed at that moment, it is a young man's game. Being a
:36:46. > :36:51.father and working in an industry where Loaded was the softer end of
:36:51. > :36:55.the scale, it is described as a nursely slope for it, I got out, it
:36:55. > :37:03.was my choice. When you say you are happy with porn being in the house?
:37:03. > :37:08.I'm not saying I'm gathering people around after Sunday lunch. If your
:37:08. > :37:12.boys came and you had the talk with your sons, do you think it aters
:37:12. > :37:16.the way that they will say sexual relationships? I used to think that
:37:16. > :37:23.it would. I used to think in my more panicked moments that they
:37:23. > :37:28.would be Ruskin, unable to have sex with his wife on her wedding night,
:37:28. > :37:32.because she didn't look like a perfect Greek statue and had pubic
:37:32. > :37:35.about hair. I used to worry prech that my male children would think
:37:35. > :37:40.women looked and behaved in a different way. That is nonsense,
:37:40. > :37:44.they exist in a world of normal women, and are able to tell the
:37:44. > :37:50.difference between fantasy and reality. I think it is worth saying,
:37:50. > :37:57.I don't think Claire realises the level of intrusion and snooping
:37:57. > :38:00.that her plan involves. I don't want when I'm Googleing, if I'm
:38:00. > :38:07.doing something innocent, if I want to buy underwear on-line, and
:38:07. > :38:10.include my bra size, or if a 15- year-old is going goinging
:38:10. > :38:15.penetration with regard to work, we are branded and blocked. We can't
:38:15. > :38:21.do it. One phrase you used about the
:38:21. > :38:24.difference between reality and the web. You coined this phrase,
:38:24. > :38:31."virtual reality", do you think people understand the difference,
:38:31. > :38:34.people that have grown up from 1996, they have grown up using and
:38:34. > :38:39.knowing nothing but the web? What I have observed with the young people
:38:39. > :38:44.I have worked with is two divergant trend, on the one hand we are
:38:44. > :38:47.creating a new class of bullied people, an underclass, that is
:38:48. > :38:51.divergant from the issue of on-line pornography, that is on-line
:38:51. > :38:55.society and the meanness of it. If anything, I would worry about us
:38:55. > :39:04.growing a new generation of kids who are too tame, who have lived
:39:04. > :39:09.too much in the world of simulation and information, live in a social
:39:09. > :39:13.context that is categorised and reliable and constant. I would
:39:13. > :39:16.worry much more about that sense of predigested sense of society, I
:39:17. > :39:24.worry that they are too soft, they are not exploratory enough. That
:39:24. > :39:28.they take the world too much as a given. It is almost inner city.
:39:28. > :39:29.Something like that. I think there are concerns but perhaps these are
:39:29. > :39:36.not the ones that I would prioritise.
:39:36. > :39:41.Thank you very much. Bryn Terfel rose to fame after
:39:41. > :39:51.coming second in Cardiff Singer of the World in 1989, known for his
:39:51. > :39:52.
:39:52. > :39:59.grand opera roles, he has cornered the Wagner market. Next week sees
:39:59. > :40:05.BrynFest, a festival of musical talent, at the Royal Festival Hall.
:40:05. > :40:13.He sprang a surprise after performance with the Simon Bolivar
:40:13. > :40:17.Orchestra. So how did this extraordinary
:40:17. > :40:23.secret surprise come about? I had meetings here at the South Bank,
:40:23. > :40:33.and they thought maybe I could an encore. How exciting for me. I just
:40:33. > :40:34.
:40:34. > :40:40.told Mr Dudamel that, un ore pan ami.
:40:40. > :40:45.That's your Spanish! Just to hear them play it for the first time, it
:40:45. > :40:49.is incredible, that is enthusiasm for you. Youth in music is just
:40:49. > :40:54.tremendous. What a bridge it is. I'm singing about the wonderful
:40:54. > :41:00.bridge that goes into Valhalla. The Gods have just cleared the skies,
:41:00. > :41:10.and built a bridge for us. I wonder if they think of that, kind of, as
:41:10. > :41:15.
:41:15. > :41:21.a bridge for them. You have the wild Wagner, and then you have the
:41:22. > :41:27.Covent Garden Wagner, you are doing both, how do you calibrate with
:41:27. > :41:33.different directors? I'm young in the Wagnerian torrential waters, it
:41:33. > :41:41.is maybe one-and-a-half productions of The Ring. I can't wait to sing a
:41:41. > :41:46.full Ring Cycle on my home turf. La Pag, he's production, I was very
:41:46. > :41:50.lucky to be part of the performance, controversial or not. The
:41:50. > :41:55.youngsters I came to see it that I invited loved it. When did you hear
:41:55. > :42:01.your first opera, do you know what you were? It is Othello, the
:42:01. > :42:05.Zeffirelli production, when -- Otello, the Zeffirelli production
:42:05. > :42:09.when it was out. I was given a seat by BBC Wales to review the evening.
:42:09. > :42:14.I gave it such a glowing and fantastic review, that was the
:42:14. > :42:20.ignition I needed. The candlelit, there was a eureka moment, I
:42:20. > :42:24.thought this is what I want to do. You came runner up in the Cardiff
:42:24. > :42:32.Singer of the World, that catapulted you into your future
:42:32. > :42:36.stardom? I would say it kalt puted the eventual winner, he was the
:42:36. > :42:42.clear favourite. I maybe took my time and sang smaller roles in
:42:42. > :42:47.Opera Houses in Britain. You never really had to do chorus, you were
:42:47. > :42:53.out front from the start? That is very true. Was that a handicap, at
:42:53. > :42:59.first, or did it put added pressure on you? Maybe I cut my thief more
:42:59. > :43:03.in misLenous concerts in Wales with male voice choirs and mixed choirs,
:43:03. > :43:09.without knowing it I was given an education of how to perform on the
:43:09. > :43:14.stage from a very early stage. lot of directors think opera
:43:14. > :43:20.singers can't act, how much is the performance in the opera? I can't
:43:20. > :43:27.act, I put myself in whatever the director tells me, I try my best to
:43:27. > :43:35.achieve his insights and thoughts. I will do it with gusto and with
:43:35. > :43:39.feeling. But, I need their help. I can maybe get around the single bit,
:43:39. > :43:45.but acting is a completely. We did a great evening in the Royal Opera
:43:45. > :43:52.House, of Shakespearian operas, and then some actors, acted the same
:43:52. > :43:55.sections, they came on to the set, and set that scene. We need an
:43:55. > :43:58.orchestra. I always come off the stage thinking I could have done
:43:58. > :44:04.that better, I don't think it is a bad thing. What roles haven't you
:44:04. > :44:11.done that you would love to do? never sang any of the Russian
:44:11. > :44:19.repertoire. Maybe some swan songs towards the end of my operatic
:44:19. > :44:28.career. Maybe an opera written by son time, he needs to write
:44:28. > :44:36.something after Sweeney Todd. is an eclectic mix in the BrynFest?
:44:36. > :44:41.Four eclectic nights, the Super Furry Animals there, the opera
:44:41. > :44:45.night. Three wonderful singers there, the royal national Welsh
:44:45. > :44:49.opera and cor chus will hop on stage and the pit. I can steal them
:44:49. > :44:53.from pit and stage, it doesn't happen very often. There has to be
:44:53. > :44:57.the staple diet of a male Welsh choir, with a band, myself singing
:44:57. > :45:04.a couple of songs. It is a little bit like the festival I had in
:45:04. > :45:09.North Wales on tour. # I can see the quiet churchyard
:45:09. > :45:14.down below You are very proud of your Welsh
:45:14. > :45:21.heritage, aren't you? I am incredibly proud. I don't think I
:45:21. > :45:25.should be afraid of having an ambassadoral shoulder that carries
:45:25. > :45:29.something that Wales can give, maybe that's a little bit in this
:45:29. > :45:34.festival, here in this corner of London. I have even started a
:45:34. > :45:38.foundation now for young singers. The talent that comes from this
:45:38. > :45:45.small country is magnificent. And going back to my foundation, I
:45:45. > :45:48.would like to even have the tip of Kiri Te Kanawa's foundation in New
:45:49. > :45:53.Zealand. Maybe will I become a politician, will I run an Opera
:45:53. > :46:03.House towards the end of my career? I don't know. Maybe I should start
:46:03. > :46:16.
:46:16. > :46:21.opening books and reading about it Fantastic, weren't they brilliant.
:46:21. > :46:28.I love him, I really love him. We admire, oh my God. He can move to
:46:28. > :46:38.characters, and we will have a lot of fun, let's go one more time.
:46:38. > :47:07.
:47:07. > :47:16.Bryn Terfel with Kirsty there. That's all from Newsnight tonight,
:47:16. > :47:23.we leave you with a bit of Olympics, the official Olympic song was
:47:23. > :47:26.unveiled and the bridge was raised, the song is Survival:
:47:26. > :47:29.# Life's race # I'm gonna win