03/07/2012 Newsnight


Analysis of the stories behind the day's headlines with Emily Maitlis. The Bank of England is drawn further into the Barclays affair. Plus care home reform and sexual abuse.

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How much is a diamond worth, Barclays chief executive goes,


their chairman returns, and the sticky questions, it seems, keep


coming. The men who eased out Diamond


overnight, from the Bank of England, and the FSA, were around at the


time when Barclays and other banks were fiddling The Libertines rate.


There is growing evidence that somebody, somewhere -- the LIBOR


rate. There is growing evidence that somebody, somewhere, senior,


knew about it. And the row about who was told what


and when at Whitehall. A former hedge fund manager and a


minister will talk about who will be brought into the fray next.


Also tonight: After Newsnight revealed the scale


of the problem with sexual exploitation of children in care


homes, we ask the Children's Minister if his new proposals will


really improve these lives. They probably see a young girl, and


think, ah, she don't live with her mum and dad, because they don't


care, and she's in cautious of course she can come stay at mine.


Then they will just get what they want. They loathe each other


outside the ring, now they will fight for the first time inside T


how come David Haye and Dereck Chisora can fight in London,


without even having a British license. Do I look crazy to you,


since you walked in the gym, do I look crazy. REPORTER: No, but you


can be crazy without looking crazy? Who knows. Ahhh! The fight's


promoter, Frank Warren, is here to Duke it out with the General


Secretary of the British board of boxing control in their first-ever


bout. Good evening, it is our business to know your business,


rang the old Barclays slogan, today their business is pretty confused.


This morning, the man about to quit at chairman, reappointed himself,


whilst the man who insisted he wasn't quitting, quit.


An explosive account of conversations with the Bank of


England over LIBOR rates in 2008 come out. How much were their


actions motivated by what they thought Whitehall insiders and the


Central Bank were encouraging them to do. If he's attacked, he will


fight back, with those words, Bob Diamond's friends signalled to the


media he was prepared to take down politicians and regulators in the


fight to stay boss of Barclays. But this morning, London's financial


centre woke to the news there was a man overboard, pushed by the


regulator and the Central Bank. Diamond had resigned. The past 24


hours have seen the British financial establishment in state of


disarray. The men who "eased" out Bob Diamond, from the Bank of


England, and the FSA, were around at the time when Barclays, and


other banks,were fiddling the LIBOR rate. And today, Barclays provided


evidence that somebody, somewhere, seen senior, knew about it.


-- senior, knew about it. It was in October 2008, with the


City still reeling from the Lehman Brothers crisis, LIBOR, the bank


lending rate, was a key barometer for the rate of lending for banks,


and for Barclays it was too high, consistently, signalling the bank


could be in trouble. This man called Bob Diamond, after this man,


Jerry Del Missier, instructed staff to fiddle the interest rate,


believing he was acting on the orders of the Central Bank. The


staff reluctantly complied, one said, they will not be posting


honest prices. We were proudly one of the most


sensitive countries in the world to LIBOR funding. So it was very keen


for the Bank of England, the Treasury, everybody in the banking


community, to see, that LIBOR, which was spiking up at that time,


to be managed down, or to be get down as quickly as possible. What


we are seeing is some people some what bent the rules to imply it was


getting down faster than it really Today, Barclays submitted a note of


the Tucker phone call, suggesting the rate had been fiddled,


downwards, under political pressure from senior figures in Whitehall.


There was a public interest in keeping the banks in business, and


that coincided with Barclays' private interest in loi-balling its


estimate -- low-balling its estimates on the interest rates,


because it made Barclays look more credible in the markets. Yes there


is kind of a public interest defence of all of this. But I think


this needs to be set in the larger context of elites having made


massive errors of judgment, before and after the financial crisis.


Afterall, the regulatory and the political elites, co-promoted this


dodgy investment banking before 2008.


Baroness Videra, Gordon Brown's City fixer at the time, said she


had no recollections of any conversations with Paul Tucker


about LIBOR. Alistair Darling too has denied it was him. But if a


politician did pressure the bank to pressure Barclays to rig the market,


it is not, say the experts, a victimless crime. This doesn't


excuse the fact that this is a global benchmark that is trusted


worldwide to be accurate. I understand there might be a reason


for banks not to look like they are riskier than their peers, but that


doesn't mean you can go and suggest that something should be change.


There are a lot of innocent companies, trading firms, pension


funds that relied on this rate to be accurate. That is a complete


breakdown in the trust system in the financial markets. With Bob


Diamond gone, the chairman, Marcus Agius, quickly had to unsack


himself. At Canary Wharf, at Barclays and across the finance


industry, they are braced for prosecutions, more banks to be


fined, some class action that is could cost billions. Business


experts are calling for a Leveson- style investigation, felt


strengthened by today's investigations. There is a contest,


isn't there, between those that want to see what has gone wrong as


a narrow, technical problem to do with the culture of the trading


room. Those of us who see it as a power elite problem, and the more


that comes out, the more it appears to be a power elite problem, about


the cosy relations between political, regulatory and financial


elites, which lead to misjudgments of the public interest. Now, that


kind of problem is only ameanable to a judicial inquiry, with a QC


asking the questions. The future of Barclays matters, it


is one of the biggest lenders to British business, but it is also a


giant global investment bank w more than a �1 trillion of debt. The


Diamond years have not been so kind to the domestic part of Barclays


market. Four years ago Barclays' was lending �52 billion to non-


financial and non-property businesses in the UK. 27% of all


loans. Now the figure is just �38 billion, and just 16% of business


loans. For Barclays' board, without Bob Diamond, they have got to think


about, one, whether they can find someone to run an investment bank


this size, that they will have a lot of confidence in. As well as,


do they really want to have an investment bank this size at all.


That debate must be going on right now in a very heated sense, trying


to figure out what is the strategy of Barclays going forward.


Diamond built his career, and personal fortune, by taking high


risks with other people's money. Some how, he failed to spot at the


very core of Barclays, a culture of contempt for principle, and for the


rules. But so did the regulators, and so did the politicians.


We will find out more tomorrow. Once again, it seems the political


establishment is being called into question, who knew what, when, and


what was the chain of command, were there winks and nods from the


Treasury and the ministers at the time the LIBOR rate was being fixed


between 2006-2009. Our political editor is here. It was interesting


to hear the phrase used, "a power elite problem", how do you see


this? The Government will be relieved it is not the political


establishment, it is the Labour establishment, just for today, 24


hours ahead of Bob Diamond's appearance, you have the spotlight


thrown on the 2005 Labour cohort people inside the Treasury. Those


civil servants inside the Treasury said it isn't about Alistair


Darling, from whom we had hasty denial, that this is anything he


would dream of doing, it is something people call the Brownite


Treasury opposition. In power he was also trying to run the Treasury


through people like Baroness Videra, we had a denial from her and Ed


Balls, a denial from him. 9 current -- the current Government is happy,


it shows it is a political fight t goes to the heart of politics at


the moment. It is not just about the banking scandal but who can be


trusted with the City and the public finances. And pretty


frenetic briefing from both the Government and Labour. You feel


that today the Government had the better day of it? This evening we


have seen the Lords. It seems technical this issue of what sort


of inquiry, should it be a judicial one, which is what Labour wants o


should it be this narrower one which, is a parliamentary one.


Tonight the Lords voted for the parliamentary one. So the


Government ostensibly the better day. There are a series of reasons


why they should be worried, people on the select committees, Tories


saying even if it is a parliamentary inquiry, it will go


on and on, longer than December, which is the deadline the


Government wants it to report by t will probably end up having to call


many more leaders of banks, probably the Bank of England


governor. It won't, in the limited form the Government wants it to be,


it won't be small beer. So, one down, you might say, but


how many more to go? We know that the FSA investigations are on going,


and up to maybe 20 other banks might anybody the spotlight. With


us here to discuss further the former Chancellor, niejgel, now


Lord Lawson, David Yarrow and Chuka Umunna our other guests.


What do you think was happening between the bank and the Bank of


England, is it conceivable that Barclays was some how nudged into a


position they wouldn't have otherwise taken? I think it is


important, first of all, to realise that there are two Separate


episodes. As we know from the FSA inquiry, this thing started at


least in 2005. This was going on for some time, before the financial


crisis, before the events of 2008, before this telephone call between


Barclays' Diamond and Paul Tucker, the deputy Governor of the Bank of


England. During that period it was entirely a matter of Barclays and


the banks, traders. No-one bank can fix the LIBOR rate on its own t


requires collusion, and a number. - It requires collusion and a


number. What they were doing was for private gain, clearly, it was


totally disreputable. There is no breath of a public interest defence


at that stage. That was what it was going on for time. There is in this


later stage, when I think it was wholly impror to fiddle t but you


can mount a public interest defence. We understand there was


correspondence between the Bank of England, normal, and Barclays, some


how Barclays took away the message, or said that they z that they had


received encouragement, or a suggestion they could maybe keep


the rates lower, is that conceivable? We don't know if that


happened or not. I think the hearing tomorrow will be quite


prorpbt, when Bob Diamond appears - - important, when Bob Diamond


appears before the select committee, chaired by a very important man,


Andrew Tyrie, he used to be my special adviser when I was


Chancellor, he will want to get to the bottom of this. One of the


areas you may be assured is what exactly transpired in the course


pond dense and the telephone conversation between -- telephone


conversation between Paul Tucker and Bob Diamond. Chuka Umunna,


Baroness Videra has been dragged into this, she denies any


involvement. She wrote that document entitled "Getting LIBOR


down: Getting LIBOR Down is Desirable". Has she anything to do


with it? She denies it. If you look at the memo it refers to a


Whitehall source t isn't specific. This does have the whiff of mud


slinging. It will be interesting to see what exactly Mr Diamond says


about this memo tomorrow, because obviously that needs to be cleared


up. What exactly does it refer to. I think secondly, also, the


position of the Bank of England, I think this is a very serious matter


and needs to be cleared up as soon as possible. I think Mr Tucker,


obviously, the sooner he comes before the Treasury Select


Committee, in relation to their on going hearings on this matter, the


better. Let me ask you your gut feeling, the same question, is it


inconceivable that a Labour minister or adviser, would he exert


pressure on a -- bank to do that type of thing? I would find that


quite remarkable. Take out the word "misreport", and say we would


understand it would be important for you to lower the rates. If


there was some kind of nudge or wink to that I allowed them to


think it was OK, could that conceivably happen? I can't see


that happening myself. It is one thing to want to see the cost of


borrowing reduced for businesses, it is an on going issue for them


now, it is quite another to encourage misreporting and


deceitful behaviour. I would be very surprised if anyone from the


Treasury or the Bank of England were involved. You are right in the


middle of this industry, David Yarrow, what do you think could


have happened there? It is all supposition, as Lord Lawson says. I


think we will know an awful lot more tomorrow. Time Diamond, I


think maybe has slightly more moral sovereignty, in very small levels,


than he had maybe 24 hours ago. He clearly is no fool. I would


imagine's going to go in there all guns blazing tomorrow. You think


this is revenge? I don't know about that, and that's, I wouldn't want


to couch it in those terms. Let's not forget the summer of 2008 was


the Wild West, markets were broken. Whatever happened with regard to


LIBOR submission, some people gained, borrowings gained, maybe


lenders lost, it was the Wild West and markets were very broken.


saying it was the Wild West, do you condone or sympathise, to an extent,


with a process that was probably going on at the time? Absolutely


not. You will not get me either to come here and be an apologyist for


what has gone done. Never in my time of 25 years in banking, has


the self-esteem of the collective I work for been lower, sensitivity is


never an word associated with bankers, but now people are very


aware why people in the street have total contempt. I don't know if


Vince Cable could have used the word cesspit, but I can understand


him using that word. You say that Bob Diamond and Barclays couldn't


have done this on their own, we will see other banks in the same


position as Barclays, once the FSA has finished their inquiry? That is


bound to happen. Barclays are in the frame, largely, because they


were the first to settle. And the first to fess up, as it were. They


weren't alone in this. That doesn't make any better. But there is much


more to be known. Let me say anything about the City of London,


which is a world class financial centre, there are not all that many


major industries in which this country is world class. It is a


world class financial centre, long may be it remain so. And it is not


just British banks who are involved in this, there are foreign banks in


London involved in this, and there the standard of ethics, I'm afraid


to saying, on Wall Street, is probably even lower than in the


City of London. That is a very key point, actually. This isn't just a


case of indulging in another bout of banker bashing. I think Lord


Lawson make as good point there about, we have one of the global


financial services sectors here. But if it is to endure, it has got


to demonstrate that those qualities of integrity, honesty, which, of


course, form part of how the City came into being, over a couple of


centuries, are still there. So there is a much bigger public


interest here. Very directly, let's imagine that ten more banks get


found out to have colluded in this type of operation. If ten more


chief executives had to leave, would that be a good thing, would


we be in a better place at the end of that? I don't think this is


about individual scalps, this is why we have been calling for a


commission to actually look at the culture, and the practices in the


financial services sector. What doesn't wash is this notion that


some how this was just a few bad eggs, a tiny minority. This is a


cultural problem. If you look at Barclays' case, yesterday they were


fined �59 million by the FSA for the attempted rigging of LIBOR, but


they have also sustained fines of over �11 million over the past


three years, for failing to make proper reports to the FSA and


failing to properly separate out their monies from client monies.


There was a particular situation there, but from the point of view


of the public, one important point to get acorrection a complete myth


has been propogated that there are not proper laws and sanctions that


can be prevailed upon that if there is wrongdoing people can be brought


to justice. There are market provisions under the Financial


Services Act, and a Fraud Act 2006. That is precisely why I'm not


surprised that the Serious Fraud Office have been called in to look


at this. Where there is criminal wrongdoing, people have to see we


are all equal in the eyes of the law. It is no good, somebody in my


constituencies, who commits an offence, and steals �50, the strong


arm of the law comes down on them and they are banged up. Where you


see white collar crime t seemingly goes unpinnished, which is why the


criminal investigation of this is an important part of the piece, in


addition to having that proper judge-led inquiry into culture.


That is where we will go next. Thank you very much. We are heading


to the US now. An investigation into the manipulation of LIBOR was


opened back in 200, because they suspected the banks weren't -- 2008,


because they suspected the banks weren't behaving properly. Our


guest is head of the future trading commission which led the operation,


and responsible for preventing future fraud of the market. Do you


think, are you surprised, this hasn't been pursued in a criminal


way? Good to be with you. I think that what is important is this


benchmark rate, the mother of all rates in the interest rate markets,


be honest and there be ining at thety. What we found at Barclays,


working with the F -- integrity. What we found at Barclays working


with the FSA and authorities, is it wasn't the case with Barclays, but


we all lost in that case, we brought a strong action against


Barclays this week and they settled. Why was it down to hold you -- you


to hold Barclays to account, it was you who tipped off the FSA here?


You are kind, it is the staff at the futures trading commission, not


myself as the chairman. We oversee a markets called the futures'


market. Many of your viewers might not know us, it is traditionally


agriculture markets, futures help hedge the risk of corn and wheat,


and also interest rates, we happen to oversee a large market called


the euro-dollar market, which is priced to the interests, set in


London, called London InterBank offering rate. That is why we got


involved several years ago, reached out to the FSA, worked co-


operatively with them and brought this joint action. Realistically


you would be surprised if Barclays were alone in this, right? Because


I don't want to compromise any other enforcement matters, I don't


want to go there. I would say that in this matter, we are identified


four other banks. We call them bank A, B, C and D, where Barclays


attempt today manipulate this rate, reaching out to others, asking --


attempted to manipulate this rate, reaching out to others to aid them,


and they aided them. They are four British banks? A very good question,


but I didn't say. Really I can't compromise the engoing enforcement


matters. Let me ask you something a lot -- the on going enforcement


matters. Let me ask you something puzzling a lot of people here. What


kind of pressure, do you think n the Wild West days of 2008, would a


bank come under from Central Bank, from politicians, over something


like LIBOR rates would, it surprise you if they had bowed to pressure?


I think that Barclays did falsely report the rate, because they were


worried about their reputation. That is no excuse for breaking the


law. The law is very clear on this side of the ocean, and I'm sure on


your side of the ocean. That you're not supposed to falsely report


these rates. We all lose out if they do. Even if senior management


was thinking some how they were protecting the reputation of the


bank. So, in terms of fixing LIBOR, this has global implications, do


you think the next step now is criminal prosecution? It does have


global implication. Each of us, we might have a car loan, or mortgage


that in that fine print might be related to something called a


variable rate LIBOR. So it has very far-reaching implications, and we


have to make sure the submissions are honest and clean of any


attempted manipulation or false reporting.


There is not a town, a village or hamlet in which children are not


being sexually exploited, the childrens' commissioner said last


month. After a Newsnight investigation exposed the problems


of children in cautious we heard today what the Government plans to


do to protect them and other vulnerable people. I will be asking


the childrens minister and the deputy childrens minister f their


plans will -- Children's Minister and the Deputy Children's Minister


if their plans will make a difference. First we hear the story


of a girl who ended up the victim of sexual predators. We have a


child reported missing from home, we are going to look for a child


missing for four days. 8.00pm in Blackburn, a pioneering police


protection team is on the trail of a 14-year-old girl, one of the


thousands of children who go missing in Britain every year. One


of the main aims to try to safeguard her from the sexual


exploitation the Government says is blighting the lives of too many


young people. Abows that often involves gangs or groups of men.


-- abuse that often involves gangs or groups of men. We are going to


an address where we believe a number of parties are held at.


Because of the intelligence we have from our interaction with this


young girl on previous occasions, we believe she might be attending


these parties. The intelligence is accurate, they find the girl in the


company of two older boys. She is not pleased to be rescued from


people she thought were friends. And not pleased she will face more


questioning in the days ahead. Police used to target suspected


child abusers, and through them, find potential victims. Operation


Engage in Blackburn, works the other way round, they follow


potential victims, who may lead them to possible abusers, the


result is a huge increase in conviction rates. If we can find


children vulnerable to sexual exploitation, and deal with them


and work with them, we are much more likely to get the information


to lead to us the perpetrators. The perpetrators hide from us, the kids


less so. Whatever the details of this case, long-term police


operations like this one in Blackburn, have helped reveal how


many children in Britain are potentially vulnerable to sexual


exploitation. But it is a problem that takes many forms, and that's


why it is so difficult to tackle. Sexual exploitation involves


something offered in return for sexual favours. Sweets, drugs,


alcohol, money, or apparent affection. In plain language, it is


grooming. The Deputy Children's Commissioner has been told it is


happening in every town, village and hamlet in the country.


The Children's Society is one of the charities trying to deal with


it. One of the key challenges about child exploitation, is the fact


that children themselves don't often recognise it. They don't


realise they are being manipulated or being exploited, they are being


used. Quite often they think they are in control, they think they are


the ones making the choices and decisions. Newsnight has seen


images too graphic to broadcast, passed around to hundreds of people


on a messaging service. Showing girls in their mid-teens performing


sex acts on boys of about the same age, some of whom we understand are


members of a London gang. The filming and the passing round of


such pictures are another form of exploitation that's thought to be


not uncommon amongst some young people.


Most cases of exploitation involve children living at home. But a


disproportionate number of victims, more than one in five, are in care.


Some care homes, the Government says, are specifically targeted by


abusers. Julie, not her real name, who was in care for four years, and


often ran away, now believes that she was one of many similar,


willing victims of older men. they just are after sex, aren't


they. And they probably just see a young girl and think, ah, she don't


live with her mum and dad, because they don't care, and she's in care,


of course she's going to come and stay at mine, do you know what I


mean. And, and, then they will just get what they want. They pour a bit


of alcohol in you and then you are legless. Research published today


finds evidence that children in care are sometimes introduced to


their abusers by other children, who may themselves be being


exploited. Julie had a friend, now she thinks no friend at all, who


led her into danger. She was like talking to this lad, they were like


friends, or something, but I didn't like him. And I wanted to go home,


but because it was late, and then, she was like pulling my arm, you


know. Stay out, stay out and stuff. And then because he wanted her to


stay out, so I got pulled along any way. They made me sleep or whatever


on the wooden floor while they were doing things. What did he try to do


to you? Eh, like, well he did do stuff to me, like have sex and


stuff. And like he were hitting me and swearing at me and stuff.


In an investigation into the care system last month, Newsnight


revealed many of the problems the Government is now seeking to solve.


Many vulnerable children are actually being exposed to greater


danger by the very people supposed to protect them. Councils often


send them away from their own areas to places, including some coastal


resort, which have cheap property for private care homes, but also a


high concentration of sex offenders and prostitution. We find it


utterly extraordinary that they would want to send their most


vulnerable children to an area with such significant social problems.


We think it is irresponsible of them, and cynical. Today the


Government announced it would make it harder for councils to send


their children away from their home area. It promised to have better


data on the number of children in care and missing, saying councils


are underestimating the problem. It ordered a review of the quality of


care homes T wants police to work heard, like those in Blackburn, to


win the trust of victims, and foings victims of abuse. Partly as


a means to secure more convictions. Back in the house where they found


the missing girl, they are still suspicious about the two 17-year-


old lads there. Can I have a look through your pockets for ID.


they will be taken to the politician. You are under arrest


for child abduction, you do not have to say anything...Later,


boys were released without charge. With no evidence of anything


untoward having happened. But they were formally warned to have no


further contact with the girl. She lives at home, but in other cases,


Blackburn Police work closely with care home staff, and the


responsible local authority, to try to ensure children run away less.


Where we started off at maybe 50% of the children we were dealing


with were from children's homes, now we are down to about 8% of the


children that we see referrals from being from children's homes. I


would say that we have had a dramatic effect on that, and again


it all comes down to multientity core location. Better information


sharing is at the heart of what the Government wants to do. It will let


the inspection agency, Ofsted, tell police the location of care homes.


Much depends on councils, which in many cases have cut their youth


service, which can't always find local care provision, and which


don't always want to acknowledge the danger that children may face


for fear they will have to spend more money to tackle it. The moment


you accept there is a problem in your area, then you will have to


invest some money. You are going to have to invest some time and


resources to respond to it, therefore, it is easier to either


ignore it or just say, no, we don't have their problem. I think that is


the key issue. In Blackburn, police are out most nights, touring the


hot spots, where children are exploited. But a problem so


widespread, so old, and so hard in some ways to define, won't easily


be solved, even by the best- intentioned of authorities.


The Children's Minister, Tim Loughton, and the Deputy Children's


Minister are here. Tim Loughton, bluntly, this comes down to market


forces, tragically. If 76% of children's homes are run for profit,


you cannot stop private care homes being set up in place where is


accommodation is cheap, can you? but this isn't down to ownership of


this form of children's care. What it should be down to is the quality


of the care offered, to often very vulnerable children. We have over


65,000 people in the care system, through no fault of their own,


spread across the country. We don't have children's homes spread across


the country, they are in clusters in certain seaside resort,


concentrated in the south-east and north-east of England. And 50% of


children in those homes come from well out of their area. I don't


believe that is the safest place and the best way to look after


these children. We understand that, the point is, if these are being


run by private companies, which three quarters of them are, you


will not get them to invest in areas where the accommodation is


more expensive. So they will be in these deeply unsuitable places, how


do you stop that? We are paying large amounts of money. A billion


pounds is being spent on up to 5,000 children in residential care


homes. That is an average of �200,000 a child in each year. That


is an awful lot of money. I don't believe we are getting value for


money. I believe the homes should come for the children, not the


children going to the homes. We should be looking after these


children, where they are safest were we can look after them and


give them the support they need. That is not by dumping them in


coastal resorts hundreds of miles from their homes in too many cases.


That is a platitude? It is not. is that message for, for those who


open the homes or councils paying for the homes? This is primarily


the responsibility of the corporate parents, local authorities,


responsible for those 65,500 people in care at the moment. They have


the responsibility to make sure those children are safe, and they


are getting the best possible care. I don't think they can justifiably


say they are looking after those children in the best way if they


are dumping them hundreds of miles away from home. Is that your


understanding, is it the local authorities to blame for sending


them further away? I would completely concur with that. Local


authorities are, as the minister said, the corporate parent, the


legal parent of children in cautious under particular types of


care orders. It is their responsibility to place the


children. Local authorities actually have a response, a duty in


law, to make sure that they have a sufficiency of places for children


in care, within their local authority area. What we know is


there are some local authorities that have no residential care homes


within their areas and they export all their children outside. There


are others, interestingly enough, that do have their own residential


care homes and they still export their children, so it is quite an


interesting phenomenon. Debbie Jones, the President of the


Associations of children and directors services, say there are


good reasons to place a child away from home, even when they are at


risk. Is that overused, do you think that response is overused?


is overused. What I would say, and I know this from years and years of


experience, and now from talking to children, who have experience of


being sexually exploited, is that too often children are placed in


homes as a matter of expeedcy. One of the 11 recommendations we have


made today, and this is not rocket science, every child who is placed


in care home, indeed whether it is foster home or residential home,


needs to have a proper assessment before they are placed. It is not


about making generalised at the same times about where children are


placed. The important thing is that each individual child is in the


right place for that child. And Tim Loughton, you have made some


changes that will come in immediately, which allows the data


to be shared between Ofsted and police and all the rest of it. If


Ofsted now finds these places unsuitable, because it has the data


at its fingertips, it will close these places down? We have changed


the way Ofsted inspect children's homes. And stopped any more


children being placed in homes thought to be unsuitable? Ofsted


have the power to close down children's homes f they inspect and


fail and can't get their act together they will not take


children. Will children's homes shut as a result of these measures?


I don't know, we have changed the way we inspect children's homes as


of April. Only 2% of children's homes inspected were deemed to be


failing. I don't believe that figure, I think we have a lot of


very good children's homes, but we have a lot of inadequate ones. The


anecdotal evidence through the changes we have made through Ofsted


is a greater number of homes will be found lacking. They need to get


their act together quickly. Found lacking and shut down? If they


don't get their act together they will close down or local


authorities will not place their children there, they should find a


better, more suitable, loving, caring place for those vulnerable


children. It is up to the corporate parent to take that decision now.


The wider cultural implication of what you have said recently, is


there isn't a town, village or hamlet in which children aren't


being exploited. Do you think this is getting worse? Firstly, let me


say that statement was given to me by a police officer, who had


undertaken a major investigation in his area. Those were his findings,


that I was reporting on. He was doing further investigations. What


I have depound, and we haven't -- found and we haven't yet concluded


all our data analysis, what you have found from the data gathered


already, is children are being sexually exploited all over the


country, in rural, urban and metropolitan areas, from people of


all kinds of different backgrounds, victims from all different kinds of


backgrounds and the abusers too. know from the technology that there


is a sense that more material is out there? That's right. Is that a


fallacy? No, it is absolutely accurate. Again, what we are


finding is, you saw on the film clip you showed, young boys,


sexually abusing and exploiting other girls. We are finding boys as


young as 14 and 15 as well as much older men, sometimes women but


largely males, being fuelled by violent pornography and the use of


social networking sites. And after that the high-profile Rochdale case,


and the question of whether race is a legitimate issue in this case.


Are you concerned that political correctness is hampering whether


you can get to the bottom of that? I think it has in the past, there


is no good denying it. We have had high-profile cases involving


British Pakistani men in particular, taking advantage of white teenage


girls. I can take you to other parts of the country where we have


white middle-aged men exploiting, grooming young girls and boys as


well. It is horses for courses, these are all serious sexual abuse


crimes against children. Ghastly crimes, and I want the police and


other agencies, to have the right and most appropriate tools, to


clamp down on these perpetrators and bring them to justice, wherever


and however they are carrying out this practice. If political


correctness is getting in the way of looking into this, it has to go.


They have slapped each other, spat at each other and called each other


names, this month David Haye and Dereck Chisora, both unlicensed


boxers, who in Britain, will meet in a fight that is promoted as the


boxing clash of the year. Not arguably for the quality of the


boxing, but the level of the an no sirity between the two men. What --


an mossity between -- animosity between the two men. We will


discuss that with our guests in a moment. First w flash photography


in the report, it is Peter Marshall. In the eyes of the sports


authorities, and of many who loathe boxing, Dereck Chisora shouldn't be


allowed near the ring. Mind you, his best-known fight wasn't in the


ring, it was at a news conference, after his latest boxing defeat,


when he fell out with another failing British boxer, David Haye.


And now, empties well aired, and despite the fact that neither has a


British boxing license, Haye and Chisora are to fight without gloves


before crowds. For purists it is a new low for sport, attracting only


the interest of ghouls, but the Chisora-Haye fight promised to make


more money than any boxing match this year. Is it another death


knell moment for boxing as a legitimate sport. Do you want me to


not fight, what do you want me to do hang up my gloves, why look for


another job. Many will say a period of penance is appropriate because


of behaviour in the past? You know what, I came out doing 12 rounds,


and I was already doing a press conference, you know, in less than


20 minutes after my adrenaline pumping, everything happening,


moving at 100 miles an hour. So certain things were said on that


night. You said you were going to shoot him four times? I did, I hold


my hand up and I apologise, I have never owned and gun and never will.


I never shot anybody and I apologise. Dereck Chisora is


personable, but armed or not he has a dreadful record, he has been


known to bite and spit, not only at his opponents, he has convictions


for violence. Maybe it is because of that, his fight with Haye will


attract a big audience on hand and on pay TV. As a fighter you have


lost two championship fights on the run, this is a big pay day? They


are all big pay days, I never get small pay day, me and my big mouth


get big pay days. That is the trick, you use your mouth and get it?


Muhammed Ali uses his mouth and one of the greatest athletes now, why


not follow in the footsteps of the man I love. A business model?


Exactly. Muhammed Ali changed everything.


Here he is pumping up the publicity with Joe Bugner. But Ali had


something to sell. He really was the greatest.


The Haye-Chisora fight is a reflection of the changing nature


of professional boxing. Since the hey day of Muhammed Ali, it has


become ever further removed from the sporting mainstream. What


happened to professional boxing? Money has driven that. TV companies


who supply the most money, don't deal with the sport as in, they


would, in other sports. TV deals with the Premier League, or FIFA in


football, in boxing they deal with the promoter and the boxer.


Everyone wants to stage championship fights, so they


arrange different championships? You can essentially buy belts to go


with your fights. The British Boxing Board of Control who have


declared Chisora unfit to fight, are the latest to see their


authority undermined. If someone told you you were not


fit. They even if psychologically fit? Do I look crazy at all.


behave in a crazy way sometimes? you look crazy, since you walked


into my gym, do I look crazy? but you can be crazy without


looking crazy? Who knows, Ahhhhh! So he is amusing company, but the


British Boxing Board of Control aren't in any mood for laughs. I


didn't flinch! You didn't flinch, great one.


Frank Warren who is Dereck Chisora's manager, and Robert Smith,


from the British Boxing Board of Control. They have never debated


each other before, but they join us this evening. Thank you General


gentlemen for coming in. Frank Warren, you heard it there, it is


just a business model, isn't it, it is way of making cash, morality is


out the window on this one? First of all, they are professional


boxers, boxing for unM as regards to morality, I can think of lots of


sportsmen over the years who problems. Eric Cantona, assaulted a


fan, yet BBC and other TV companies showed his matches. You can look at,


only recently, you are talking about morality of things, Formula


One in Bahrain, BBC covered t after all the terrible problems, 50


people died in Bahrain. Your point is these guys are completely wrong


to try to stop it? You say try to stop it t they had a hearing which


the prosecutor, judge and jury at the British Boxing Board of Control,


they took away Dereck Chisora's license. It was said at the boxing


board of control at the time, because the question was asked, if


it goes to another jurisdiction, that's what he can do, and he's


allowed to do it. That is what he has done. This is not about Dereck


Chisora and David Haye, contrary to what the boxing board say. It is


about another governing body coming into this country to sanction


fights. Everybody should remember that the British Boxing Board of


Control is, in fact, a limited company, it is not a Government


department, it is a limited company. For a boxing organisation, you


haven't much punch? It is a shame you haven't shown the whole events


leading up to Mr Chisora having his license withdrawn. It was a weekend


disastrous for the sport. He slapped man, his opponent, on the


way in. He spat a stream of water at his opponent's brother previous


to a fight. He ended the weekend with brawl at a press conference.


These sort of events don't do the sport any good whatsoever, not just


in Great Britain, but elsewhere around the world as well. This


happened where we are happy to send licensed boxers over.


It doesn't work you take away their licenses and Luxembourg steps in?


For the majority it works, most of the people we work with are good


people. The Sports Minister said the events that took place were


disgusting. We have to deal with that. We have a system where the


hearing took place, he had his license withdrawn. That means he


was ultimately banned from boxing until he reapplied again in our


jurisdiction. He had an opportunity to appeal that decision and he


withdrew. Do you admit there would be much less interest in this, if


there wasn't the loathing and animosity about the fight? There


was talk of the fight in Germany getting out of the control. It gave


it some publicity. Which you welcome? I don't welcome what


happened in Germany, but it did happen, you won't change history,


that is what occurred. But, how long is Dereck Chisora not allowed


to box. He's not banned from boxing, you are wrong with what you said,


he was not banned from boxing, you withdrew his license. He's allowed


to box in this country, it is legal. The Sports Minister, you are


misleading there, the Sports Minister said he doesn't want to


get involved in that situation. You wrote to the Sports Minister, and


he said it clear publicly he doesn't want want to get involved.


The Sports Minister said the actions of what happened at the


weekend was wrong. And since then he doesn't want to be involved in


it. He has gone on record saying that. As simple as that. When we


talk about license with people, it is within our jurisdiction, when a


boxer has his license withdrawn, that is the ultimate sanction to


have the license withdrawn, it is ban until he reapplies for the


license. Dereck Chisora, as you asked the question at the hearing,


could he reapply for his license, the answer was yes. A ban is very


simple. Doesn't it make you think, when you are two miles from the


Olympic stadium, a month before the Olympics, you have got this on your


plate to have to say, this is what boxing is about, this is what our


sport is about? These are professional boxers, it is


misleading to say he was banned, when you ban someone you said six


months or 12 months. That didn't happen, he's not banned, he's free


and licensed to box. The fight has been sanctioned by three


association, the British boxing forward of control. You have no


power over this at all? What has happened is the boxing board of


control are totally mishandling it. We talked about this many times,


the British boxing board have made their decision. What is happening


is people have made a decision to circumvent the board's decision


with regard to withdrawing his license. We govern the sport in


this country, we have to look after the reputation of boxing in Great


Britain. We do not feel what has happened is the right thing to


happen. The board of control made a mess of the whole thing. We will


take you briefly through the front That's all from Newsnight tonight,


Jeremy is here tomorrow with news from their appearance, and a


special studio debate about old people's place in society. From all


of us here, good night. A damp night outside, a warm and humid one


as well. So we start tomorrow morning with a lot of moisture


across the country. It is a dull, grey start, some sunny spells


across northern Scotland. Brighter across parts of eastern England,


sunshine here. The likelihood of heavy showers developing over parts


of North West England and the Midlands. East Anglia and the


south-east seeing a shower or two, some sunny spells developing, and


feeling humid. A fresher feel across Kevin and Cornwall after a


fresher start. Western tarts -- Devon and Cornwall after a fresher


start. North Wales staying grey with further outbreaks of rain.


Northern Ireland starts damp, brighter here too, some sunny


In-depth investigation and analysis of the stories behind the day's headlines with Emily Maitlis.

The deputy governor at the bank of England is drawn further into the Barclays affair. Can the government reform care homes to prevent sexual abuse? And Frank Warren on the Haye v Chisora fight.

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