0:00:00 > 0:00:04Tonight, unemployment is down after nine months of a shrinking British
0:00:04 > 0:00:07economy. Does anyone know what's going on? With the Mayor of London
0:00:07 > 0:00:11telling the Government to stop pussy footing around on measures
0:00:11 > 0:00:14for growth, the Work and Pensions Secretary tells us their plan is
0:00:14 > 0:00:17the right one. The fact is that where he's wrong,
0:00:17 > 0:00:20Boris is wrong, is the Prime Minister and chancellor do not sit
0:00:20 > 0:00:25there twiddling their thumbs. Together with their colleagues such
0:00:25 > 0:00:29as myself, we are working on every way. Also a potentially big
0:00:29 > 0:00:34development on the LIBOR scandal. American prosecutors sumon three
0:00:34 > 0:00:39British banks for manipulating LIBOR. Is this the the start of a
0:00:39 > 0:00:43battle royal. Virning trains are out of the railway business. Sir
0:00:43 > 0:00:47Richard Branson is far from pleased and tells us it is the government
0:00:47 > 0:00:52that is off the rails. It is the standing that the same department
0:00:52 > 0:00:57officials who made the same mistakes with GNER and National
0:00:57 > 0:01:02Express are going down the same line with First Group and it's sad.
0:01:02 > 0:01:06The pride of Great Britain, Jessica ensis the Olympic champion.
0:01:06 > 0:01:10lessons of winning. We have a special report on whether some of
0:01:10 > 0:01:16the genius behind Team GB could translate to your birx or even to -
0:01:16 > 0:01:21- business or even to the Government. It is trying to be a
0:01:21 > 0:01:31true meritocracy, you get what you need on merit. We will ask our
0:01:31 > 0:01:38
0:01:38 > 0:01:41panel, including Ben Ainslie, UK Good evening. One of the basic
0:01:41 > 0:01:45school economics lessons is that when you have a shrinking economy,
0:01:45 > 0:01:48more people end up out of work. Wrong. Apparently. We have a double
0:01:48 > 0:01:51dip recession and the good news today was that unemployment fell
0:01:51 > 0:01:54again. We will hear from the Work and Pensions Secretary on his
0:01:54 > 0:02:00explanation for the puzzle and whether the Government really is
0:02:00 > 0:02:04pussy footing around and guilty of inertia when it comes to taking
0:02:04 > 0:02:09bold measures for growth. Before that, our economics editor joins me.
0:02:09 > 0:02:14It is a puzzle what is going on. all know the terms jobless recovery.
0:02:14 > 0:02:19But what we have at the moment is recoveryless jobs. Tens and tens of
0:02:20 > 0:02:25thousands of jobs being create indeed an economy that is that is
0:02:25 > 0:02:31shrinking, but increedingly rapidly. The Bank of England very
0:02:31 > 0:02:36pessimistic on every area. Pulling back on investment, back on exports
0:02:36 > 0:02:43and everything and yet jobs are there. It's made some economists
0:02:43 > 0:02:48think maybe think there is no recession. Recession let's be clear.
0:02:48 > 0:02:52The jobs created in the last three months were in London, a lot were
0:02:52 > 0:02:56self-employed a lot were part-time jobs, and when you dig into the
0:02:56 > 0:03:00deep detail of what kind of jobs those are, while it is great for
0:03:00 > 0:03:10the people who get them, it is not so great for the story of how we
0:03:10 > 0:03:14
0:03:14 > 0:03:18dig ourselves out of this mess as I Clocking off time at Britain's
0:03:18 > 0:03:25fastest growing workplace, yes, sorry everybody else, it's London.
0:03:25 > 0:03:30Over half the jobs created in the past three months were created here.
0:03:30 > 0:03:34It's a mystery really. The economy is shrinking, but the workforce is
0:03:34 > 0:03:37actually growing. It's made some economists doubt we are even in a
0:03:37 > 0:03:43recession. Others think it is the employment figures that are hiding
0:03:43 > 0:03:48something. What's going on? You can't mistake it. This month's
0:03:48 > 0:03:5146,000 drop in the jobless statistics is part of a trend. The
0:03:51 > 0:03:56graph peaks over the winter and is falling. But dig into the figures
0:03:56 > 0:04:04and there is a glaring trend. Over the same period 36,000 people
0:04:04 > 0:04:07became self-employed. It's not dark. It's not satanic and it's not a
0:04:07 > 0:04:12mill. It is part communications agency, part workplace for anybody
0:04:12 > 0:04:16who wants to hire T I started out as an inconcern in April 2012 and
0:04:16 > 0:04:23now I do everything from art direction, coming up with logoes,
0:04:23 > 0:04:28looking at colours. This route into the labour market is typical for
0:04:28 > 0:04:33many. I get paid, maybe I should get paid more. But you are not an
0:04:33 > 0:04:41employee?. No I am an independent, I was an inconcern and when I came
0:04:41 > 0:04:44back I am on a contract at the moment. So I come in and hope.
0:04:44 > 0:04:50Technically you are self-employed. Technically, though I don't think
0:04:50 > 0:04:54of it like that. Her boss was once senior manager at a major ad agency,
0:04:54 > 0:04:59the consultancy he runs now has a loser structure. We see everything
0:04:59 > 0:05:05we do as project base, where we work in very short moments of time,
0:05:05 > 0:05:09with very good people. This concept of working, no employees, no
0:05:09 > 0:05:14clients no employees is our headline, it allows us to bring the
0:05:14 > 0:05:19right people. Compared to a steel works this might seem nebulous, but
0:05:19 > 0:05:22this is the kind of business that is growing. But it is fuelled on
0:05:22 > 0:05:26extreme precariousness of labour, even for the highly skilled. We are
0:05:26 > 0:05:29about to commission an artist in Japan for a job for a guy in Leeds.
0:05:29 > 0:05:33We can do that because he is the right person to do the job, not
0:05:34 > 0:05:38because we are employing a lot of people that need to be paid. That
0:05:38 > 0:05:42liberation, taking down the walls and changing the relationship
0:05:42 > 0:05:45between employer and employee, where we work together, for a
0:05:45 > 0:05:49common objective, is the way the world is going. It is this kind of
0:05:49 > 0:05:55work, plus the Olympics, that the experts think have done most to
0:05:55 > 0:06:00reduce the jobless figures. We have moved from a jobless recovery, into
0:06:00 > 0:06:05a recession which is creating jobs, which is pretty strange. That's
0:06:05 > 0:06:10happened for two reasons: the first is a shift to part-time employment,
0:06:10 > 0:06:19and also people are shifting towards self-employment. So over
0:06:19 > 0:06:22the past two years, self-employment has risen by approximately 7%, and
0:06:22 > 0:06:28traditional employment, say, by a company for by the government has
0:06:28 > 0:06:33risen by only 1ers 1%. For the Olympics f today's figures reflect
0:06:33 > 0:06:38a short terms boost, get ready for the hangover. Over the short-term,
0:06:38 > 0:06:42the Olympic Games employed about 100,000 people. And for lots of
0:06:42 > 0:06:47those people their contracts are going to run out in September when
0:06:47 > 0:06:50the Paralympic Games finishes. Many of those people were comparatively
0:06:50 > 0:06:55young, and they are going to enter an economy where youth unemployment
0:06:55 > 0:07:03is running at 21%. There is no reason why the positive job stats
0:07:03 > 0:07:08might be ing a less whole some picture. Compulsory liquidation for
0:07:08 > 0:07:12businesses are at their lowest since the crisis began. For the
0:07:12 > 0:07:17economy to create 200,000 jobs in three months is good news,
0:07:17 > 0:07:20especially for those that get them, but economyically it is the tined
0:07:20 > 0:07:24of jobs that matter. If it really is the coffee bars and ad agencies
0:07:24 > 0:07:29and hair salons of London that are soaking up the unemployment, it
0:07:29 > 0:07:37would take a brave economist to predict that is sustainable,
0:07:37 > 0:07:44because this is the precare yat and they don't spend much. Precarious,
0:07:44 > 0:07:49low paid, part-time work can't on its own drive the recovery, let eye
0:07:49 > 0:07:54lone -- let alone rebalance the the recovery.
0:07:54 > 0:07:56We will hear from Paul in a moment. I caught up with the Work and
0:07:56 > 0:08:01Pensions Secretary at his office earlier today.
0:08:01 > 0:08:06Are you surprised that an economy which is shrinking is also creating
0:08:06 > 0:08:09jobs? It needs explaining, I think, and people will obviously want to
0:08:09 > 0:08:12look at these figures and set them against the state of the economy,
0:08:12 > 0:08:16but we have from the ONS the statement that we are in recession,
0:08:16 > 0:08:21but through that period of recession we have now got three-
0:08:21 > 0:08:25quarters of sustained jobs growth and the majority of those at full-
0:08:25 > 0:08:27time jobs, so there is a sustainable process. I am not
0:08:27 > 0:08:31forecasting ahead. It is great, down to the private sector, because
0:08:31 > 0:08:34they are the ones creating the jobs and that is robust, but the
0:08:34 > 0:08:39position we've got at the moment is the sport we are giving and what
0:08:39 > 0:08:43the private sector is doing is quite considerable. Bank of England
0:08:43 > 0:08:47is forecasting zero growth this year and the deputy governor saying
0:08:48 > 0:08:53unemployment going down is a genuine economic puzzle we don't
0:08:53 > 0:08:59understand? Who am I to question people as the economists from the
0:08:59 > 0:09:03Bank of England. Do you understand it? The reality is that they all
0:09:03 > 0:09:11seem to be taking a different angle on this. The only thing I can deal
0:09:11 > 0:09:15with is what we have right now and looking at it seriously, 201,000
0:09:15 > 0:09:19new jobs, a net position now if you look at the private sector, they
0:09:19 > 0:09:24have created since the election nearly a million new jobs, and we
0:09:24 > 0:09:28have essentially 630,000 more people in work than we had in 2010,
0:09:28 > 0:09:31those are the facts. No hidden figures. Surely, it is
0:09:31 > 0:09:36unsustainable to have an economy that is shrinking in the long-term
0:09:36 > 0:09:40and have more and more people in jobs, that can't add up. You have
0:09:40 > 0:09:43to get growth right. What the Government and myself and George
0:09:43 > 0:09:46Osbourne agree s we have to do more to get the economy moving, the
0:09:46 > 0:09:50economy needs to be growing at a faster rate. But what we are seeing
0:09:50 > 0:09:54from this, and it is important, this is telling us a very strong
0:09:54 > 0:09:59story about the strength of the private sector in the UK. Which as
0:09:59 > 0:10:02and when we get into growth, you will see a staggering increase and
0:10:02 > 0:10:06a good support from them, because they are in a difficult period
0:10:06 > 0:10:13creating jobs, so if with get growth growing in the economy
0:10:13 > 0:10:17economy, they should do well. help push ahead with that
0:10:17 > 0:10:21staggering increase, Boris Johnson says he wants you to stop pussy
0:10:22 > 0:10:25footing around, cut taxes, cut red tape, build an airport, get
0:10:25 > 0:10:30involved in big public spending projects. OK, I love hearing from
0:10:30 > 0:10:33Boris and I like talking to him a lot and he is a good mate of mine
0:10:33 > 0:10:41but there are some things that we have to also get in perspective. We
0:10:41 > 0:10:44have a debt ridden economy that we inherited, massively fuelled by
0:10:44 > 0:10:51deficit. Any government work its salt has to get that under control
0:10:51 > 0:10:56and that is what George Osbourne has been trying to do with some
0:10:56 > 0:11:04success. We know we need to be looking at all those things we can
0:11:05 > 0:11:09do to help in the short-term growth. There have been a lot of building
0:11:09 > 0:11:13programmes going on that are yet to come to fruition but will help fuel
0:11:13 > 0:11:17this. You are not pussy footing around?. I wouldn't use that term.
0:11:18 > 0:11:20The Chancellor is determined and is driving stuff and sometimes through
0:11:20 > 0:11:24bureaucracy things don't happen as fast as they should in government
0:11:24 > 0:11:27and that is another point he and I have been working on to break down
0:11:27 > 0:11:30the Prime Minister's determined to do this, we have had meetings about
0:11:30 > 0:11:34this, we are focusing on the things that should have gone through
0:11:34 > 0:11:39months ago. Boris Johnson is talking about institutional inertia
0:11:39 > 0:11:42in the Government. We will talk about reregulating the workforce,
0:11:42 > 0:11:46but inertia in the government, a serious charge and you are pleading
0:11:46 > 0:11:51gilingty? -- guilty. governments have to recognise they
0:11:51 > 0:11:54have to keep their foot on the accelerator when programmes are
0:11:54 > 0:11:59going through like capital programmes, but it is more
0:11:59 > 0:12:04difficult, if you have regulations and rules you can't ride roughshod
0:12:04 > 0:12:07over those. There's more to come. The fact is that where he's wrong,
0:12:07 > 0:12:10Boris is wrong, is the prils and chancellor do not sit there
0:12:10 > 0:12:14twiddling their thumbs. Together with their colleagues we are
0:12:14 > 0:12:17working on every way. If you take my area, the way we have been
0:12:17 > 0:12:25working to get young people back to work through the youth contract,
0:12:25 > 0:12:28work experience which Labour and the trade unions have attacked, we
0:12:28 > 0:12:33are gambling on young people, investing the money, these things
0:12:33 > 0:12:37are beginning to work. The praise the private sector for being an
0:12:37 > 0:12:41engine for growth and jobs. But it seems that quite a large proportion
0:12:41 > 0:12:46of this increase in employment is in the London area, and some of
0:12:46 > 0:12:50that may very well be due to the Olympics and the Olympic effect and
0:12:50 > 0:12:54that was major pump priming by a government in a capital project.
0:12:54 > 0:12:59Over half the employment statistics we see come from outside of London.
0:12:59 > 0:13:03It is not all to do with the Olympics. A lot of the Olympic
0:13:03 > 0:13:06effect, such as the temporary jobs won't come through to the figures
0:13:07 > 0:13:11until next month or the month after, because these are June June figures
0:13:11 > 0:13:14we are looking at. These are before much of the Olympic surge. Of
0:13:14 > 0:13:22course there is an effect of Olympics in the longer term stuff
0:13:22 > 0:13:27but remember, most of these jobs are full-time full-time jobs, not
0:13:27 > 0:13:31par time. These are jobs that will go on beyond the Olympics. There is
0:13:31 > 0:13:35a problem that some people see in what are called zero hours
0:13:35 > 0:13:39contracts in which people have a job but are not told how many hours
0:13:39 > 0:13:42they will work or from day-to-day how much they will get paid. That
0:13:42 > 0:13:46is very hard for people, because at the moment, if they take these jobs,
0:13:46 > 0:13:50they may lose benefits. People who desperately want to get into the
0:13:50 > 0:13:55workforce and can't. Of course the good thing about this is I agree
0:13:55 > 0:13:59that that is a problem under the present system, which is a clunky
0:13:59 > 0:14:03ses roo system set up by the last government. The universal credit
0:14:03 > 0:14:07which comes in next year will hugely help here because it will
0:14:07 > 0:14:10cover every hour you work and because it will be real time, it
0:14:10 > 0:14:13will pick it up every month. If you change your hours as the months go
0:14:13 > 0:14:18by, we will pick it up and we will support you through that at every
0:14:18 > 0:14:22hour all the way up until you break free of the system. Yes, at the
0:14:22 > 0:14:25moment, some of those are difficult decisions, I accept that.
0:14:25 > 0:14:29accept it is a problem. Yes, but of course, sometimes when you are
0:14:29 > 0:14:33going into work you need to take that bit of a chance, you need to
0:14:33 > 0:14:36say this job will develop, it is worth the risk getting into work.
0:14:36 > 0:14:39But we recognise that, and we want to see jobs that develop people and
0:14:39 > 0:14:43dome with those people and to do that you need to have protections
0:14:44 > 0:14:48in place to make sure that unscrupulous employers don't get
0:14:48 > 0:14:52away with making life a misery for employees because they can. Of
0:14:52 > 0:14:56course we have to look carefully at this. It is all right for people to
0:14:57 > 0:15:00say get on and do it. We have made changes. These discussions will go
0:15:00 > 0:15:03on further and more will happen. But they have to be done in the
0:15:03 > 0:15:07context of what is good for the economy and still allows us to
0:15:07 > 0:15:10develop people in work rather than harming them. That is a balance the
0:15:10 > 0:15:17Chancellor and Prime Minister and myself and the Liberal Democrats
0:15:17 > 0:15:22all agree about. But there is more we can do.
0:15:22 > 0:15:28There is a development tonight in the LIBOR bank rate fixing scandal.
0:15:28 > 0:15:38Several banks have apparently been sumoned to appear in court by the
0:15:38 > 0:15:44
0:15:44 > 0:15:48What's happened is that the state level prosecutors of Connecticut
0:15:48 > 0:15:51and New York State have demanded that they produce evidence, we
0:15:51 > 0:15:57don't know what evidence, they demanded this two months ago, if
0:15:57 > 0:16:05they don't produce it, they can be penalised. What we think this is is
0:16:05 > 0:16:09that states are doing this on behalf of civil... A prosecution.
0:16:09 > 0:16:15No, citizens who have cases outstanding or about to be brought
0:16:15 > 0:16:21against these banks. Why might they be doing it, yesterday we saw the
0:16:21 > 0:16:25US regulator take $340 million from Standard Chartered and there is an
0:16:25 > 0:16:30element in America which is a lawsuit dominated society, of form
0:16:30 > 0:16:33a queue and these states have got to the head of the queue. One of
0:16:33 > 0:16:42one senior lawyer involved in one of these class actions told us
0:16:42 > 0:16:49tonight that this is the wars of injury -- walls of Jericho tumbling
0:16:49 > 0:16:55down. One of the banks who didn't want to be named said, they implied
0:16:55 > 0:16:59bring it on because it is one thing to be fined and prosecuted by
0:16:59 > 0:17:04states, by government, it is another thing to be taken on, on a
0:17:04 > 0:17:09lengthy legal battle and what you have to prove is person X lost
0:17:09 > 0:17:15money from LIBOR manipulation on day Y and in the American courts,
0:17:15 > 0:17:20good luck really. One of Britain's best known and
0:17:20 > 0:17:22most successful business figures is seething tonight over losing his
0:17:22 > 0:17:26real franchise. Sir Richard Branson's Virgin Trains will not be
0:17:26 > 0:17:29running on the West Coast Main Line. They are being replaced by first
0:17:29 > 0:17:34group which is paid more and the Government says office more in
0:17:35 > 0:17:40terms of service. Sir Richard is very far from pleased. First to
0:17:40 > 0:17:45explain what's been going on here is Jo. This is a big row over a big
0:17:45 > 0:17:50train set. When you look at the map of the route involved, you can
0:17:50 > 0:17:53understand. It is basically the four biggest cities in the UK are
0:17:53 > 0:18:01embraced in the West Coast Main Line, London, Birmingham,
0:18:01 > 0:18:07Manchester and Glasgow. 31 million people, the catchment area for this.
0:18:07 > 0:18:11�5.5 billion has been agreed for that because it is very lucrative.
0:18:11 > 0:18:15But that is �750 million more than Virgin were prepared to offer and
0:18:15 > 0:18:21Virgin and the reason they are livid is because they are saying
0:18:21 > 0:18:25First Group who won the bid have overpaid, to the extent they may be
0:18:25 > 0:18:29bankrupt. Insanity was the word used. The market tends to agree,
0:18:29 > 0:18:33because if you look at the shares in the Stagecoach, which is half
0:18:33 > 0:18:36the owner of Virgin Trains, they were up 2% today because they
0:18:36 > 0:18:43didn't get the franchise, which means they didn't overpay. Whereas
0:18:43 > 0:18:47the other company, fruch frup, -- First Group, their shares were down.
0:18:47 > 0:18:51Tim O'Toole is the Chief Executive of First Group and he says he is r
0:18:51 > 0:18:56he is still upbeat and it is going to work out well in the end. We are
0:18:56 > 0:18:59going to be delivering a lot more capacity. We are going to put in
0:18:59 > 0:19:04new electric trains north of Birmingham. We are going to provide
0:19:04 > 0:19:09direct service to more places than available now, show Shrewsbury,
0:19:09 > 0:19:16Bolton, a number of other locations. We are also going to be redoing the
0:19:16 > 0:19:20interiors of the trains. Some people aren't a fan of them. We are
0:19:20 > 0:19:27going to do them. Are passengers going to notice a difference?
0:19:27 > 0:19:32will notice a change in livery. The trains are warn, they are getting
0:19:32 > 0:19:36newer trains later. They will be getting spruced up carriages, Wi-Fi,
0:19:36 > 0:19:40better catering, they might be getting less leg room because they
0:19:40 > 0:19:44are talking about squeezing more passengers on to trains and fares
0:19:44 > 0:19:50might be going up and this is on top of yesterday's fare increase,
0:19:50 > 0:19:55going up 6%. But I think the big winner is Her Majesty's Treasury,
0:19:55 > 0:20:01�5.5 billion over the next 13 years when they could use it.
0:20:01 > 0:20:07We did ask to speak to First Group tonight but they are not available.
0:20:07 > 0:20:11I spoke to Sir Richard Branson via describe earlier.
0:20:11 > 0:20:16Why do you think Virgin lost this bid? I think first of all just to
0:20:16 > 0:20:20say, it is obviously disappointing for all the staff on the Virgin
0:20:20 > 0:20:24West Coast, who have done a fantastic job over the last 15
0:20:24 > 0:20:31years and turning one of the most dilapidated networks into one of
0:20:31 > 0:20:36the best networks in the world. We hoped we could take it the next
0:20:36 > 0:20:42stage over the next 15 years. But bidding system in the UK is a
0:20:42 > 0:20:47strange one in that as the incumbent we knew what we had to
0:20:47 > 0:20:55bid, we wanted to be realistic, we have never had a company go bust at
0:20:55 > 0:21:02Virgin. And we bid what we felt was the correct figures. It's taken one
0:21:03 > 0:21:08company, a bid, an enormous amount more, to rerail -- derail us and we
0:21:08 > 0:21:12hope the Government have not made the same mistakes that they made on
0:21:12 > 0:21:16the East Coast main line. Do you really think Government has not
0:21:16 > 0:21:22done due diligence, that the sums don't add up and can't work at that
0:21:22 > 0:21:26price? Let me quickly explain our background on this. On the East
0:21:27 > 0:21:32Coast we bid twice, and we were the runners up. We got our figures
0:21:32 > 0:21:37correct. GNER beat us once, they went once. National expression beat
0:21:37 > 0:21:42us on the other occasion and they went bust. The East Coast main line,
0:21:42 > 0:21:45from being a track that had more passengers than the west coast, now
0:21:45 > 0:21:55has something like 13 million passengers less, it's been a
0:21:55 > 0:21:56
0:21:56 > 0:22:01disaster. On this particular bid, the company that has won First
0:22:01 > 0:22:05Group, with First Great Western, they handed their contract back
0:22:05 > 0:22:09three or four years early to the government at a great cost to the
0:22:09 > 0:22:15taxpayer and they saved themselves an enormous amount of money at the
0:22:15 > 0:22:21end of that contract. We have just learnt today that their bid, our
0:22:21 > 0:22:26bid was ahead of them up to 2020 and just in the last three years,
0:22:26 > 0:22:30suddenly they have worked out they can give the Government another �2
0:22:30 > 0:22:34billion completely unrealistic figures for the numbers of people
0:22:34 > 0:22:38they are suddenly going to imaginically get in those last
0:22:38 > 0:22:42three years and even if they doubled fares they wouldn't be able
0:22:42 > 0:22:50to afford it. We are baffled that the Government have fallen for what
0:22:50 > 0:22:54seems to be a very similar trick, or a similar approach to what
0:22:54 > 0:22:58happened with First Great Western. Obviously Government knows the
0:22:58 > 0:23:02background to this. They have to maximise the take for the taxpayer.
0:23:02 > 0:23:10If they are offered a vast sum more it would look odd if they took a
0:23:10 > 0:23:17lower bid? The cost to government of taking the biggest bidders every
0:23:17 > 0:23:21time is enormous. The cost to the taxpayer of GNER going bust and
0:23:21 > 0:23:25national express going bust has been enormous. We would have been
0:23:25 > 0:23:29running high speed fast trains on the East Coast main line, more than
0:23:29 > 0:23:3430 million passengers on the East Coast main line if our bid had been
0:23:34 > 0:23:38accepted and they hadn't gone for the highest bidder. And
0:23:38 > 0:23:43interestingly, the other two bidders on the West Coast Main Line
0:23:43 > 0:23:48who weren't incumbents bid something like 2.5 billion less
0:23:48 > 0:23:53than First Group. First Group was a company that was struggling. It
0:23:53 > 0:23:57needed cash flow in the short-term, and so it put in a bid where they
0:23:57 > 0:24:02are not paying the Government a lot in the short term and right at the
0:24:02 > 0:24:09end of the contract they are suddenly going to find another �2
0:24:09 > 0:24:14billion of income. It is astounding that the same department officials
0:24:14 > 0:24:20who made the same mistakes with GNER and National Express are going
0:24:21 > 0:24:26down the same line with First Group and it's sad. I personally have got
0:24:26 > 0:24:31lots of other wonderful things like space projects and exciting things
0:24:31 > 0:24:38to do, but very sad for all the staff at Virgin Trains who have
0:24:38 > 0:24:42done a magnificent job and created the best rail network in the world,
0:24:42 > 0:24:50but certainly in the UK. You could sound like a sore loser? One could
0:24:50 > 0:24:54sound like a sore loser. We didn't speak out when we were runners up
0:24:54 > 0:25:00to GNER. We didn't speak up when the same thing happened to us with
0:25:00 > 0:25:04cross country. And the people who took it over have lost money since.
0:25:04 > 0:25:11On a fourth occasion we think it is important that the public know
0:25:11 > 0:25:14what's happened. Is Virgin then now out of the railway business? If the
0:25:14 > 0:25:18rules stay the same we are almost definitely out of the railway
0:25:18 > 0:25:26business. We bid twice for the East Coast main line before, it costs a
0:25:26 > 0:25:30lot of money, and although we would love to run it, if the rules are as
0:25:30 > 0:25:37they are, I don't think we will waste our money bidding again.
0:25:37 > 0:25:41Thank you very much. In the past hour Ecuador has
0:25:41 > 0:25:51accused the British Government of threatening to storm its embassy in
0:25:51 > 0:25:59London if Julian assang is not handed over. What is going on.
0:25:59 > 0:26:04has been holed up in the Ecuadorean embassy since June, trying to avoid
0:26:04 > 0:26:14extradition on rape claims which he denies. We are expecting a decision
0:26:14 > 0:26:25
0:26:25 > 0:26:31tomorrow if on whether Ecuador will allow him political asylum.
0:26:31 > 0:26:35It is a little known law we found out tonight about the diplomatic
0:26:35 > 0:26:40consular premises act act. It says if the Secretary of State withdraws
0:26:40 > 0:26:44his consent in relation to land, it ceases to be diplomatic or consular
0:26:44 > 0:26:46premises. This seems to be reminding the Ecuadoreans by
0:26:46 > 0:26:51bringing this law up that the British Government does have the
0:26:51 > 0:26:56power to enter the embassy. The Foreign Office has confirmed it has
0:26:56 > 0:27:01reminded Ecuador about this law. Very quick response from the
0:27:01 > 0:27:05Ecuadoreans. Such a threat is improper of a democratic civilised
0:27:05 > 0:27:10and rule abiding country. If this measure announced by the British
0:27:10 > 0:27:16officials is inacted, it would be unfriendly and hostile and it will
0:27:16 > 0:27:20force us to respond, we are not a British colony. Is there any
0:27:20 > 0:27:29precedent for this happening? Entering an embassy is
0:27:29 > 0:27:34diplomatically scene as beyond the pale. It has happened in 1979, the
0:27:34 > 0:27:38the Iranian hostage crisis. It hasn't happened in the UK, or in a
0:27:38 > 0:27:43western democracy. If this did happen, oppressive regimes could
0:27:43 > 0:27:46use the same argument to go into the British Embassy. It is
0:27:46 > 0:27:56difficult to believe that they will go ahead with a raid. It is perhaps
0:27:56 > 0:27:58
0:27:58 > 0:28:03more like lie this is a bit of private sabre-rattling.
0:28:03 > 0:28:07There's no doubt that individual effort, extraordinarily motivated
0:28:07 > 0:28:11athletes and dedication helped win so many medals at the Olympics, but
0:28:11 > 0:28:17would any of the organisational secrets behind Team GB help the
0:28:17 > 0:28:22rest of us in business or in government or in daily lives. Times
0:28:23 > 0:28:27correspondent Matthew Syed thinks there might be. Before we speak to
0:28:27 > 0:28:37our guests, here is Matthew's special report on the secret
0:28:37 > 0:28:44
0:28:44 > 0:28:50The London Games. Arguably the greatest in modern Olympic history.
0:28:50 > 0:28:56The city is now moving on. Perhaps the most intriguing story of 2012
0:28:57 > 0:29:02is how British sport has moved on. The pride of Sheffield, the pride
0:29:02 > 0:29:07of Great Britain, Jessica Ennis is the Olympics champion.
0:29:07 > 0:29:1316 years ago Team GB was an international laughing stock. Today,
0:29:13 > 0:29:17it it is it is held up as a model for the rest of the world. What is
0:29:17 > 0:29:22the inside story of this extraordinary transformation and
0:29:22 > 0:29:27are there wider lessons that can be learned from Britain's sporting
0:29:27 > 0:29:34miracle that can help us achieve world beating status in business
0:29:34 > 0:29:40and education. Sport has a particular kind of
0:29:40 > 0:29:49truth. You live and die on objective results, with no room for
0:29:49 > 0:29:56spin or artifice. Perhaps no British sport has
0:29:56 > 0:29:59achieved more astonishing results than rowing. They won nine Olympic
0:29:59 > 0:30:04medals in London and they are gearing up for Rio in four years'
0:30:04 > 0:30:14time. We are there for one another, through the hard times and bad
0:30:14 > 0:30:22
0:30:22 > 0:30:25times. We are always there to help each other out. It is this ethos
0:30:25 > 0:30:31the collective pursuit of excellence that has driven the
0:30:31 > 0:30:35success of British rowing. But 16 years ago British sport had a very
0:30:35 > 0:30:39different culture. Britain has had its best day so far in the Olympic
0:30:39 > 0:30:43Games winning two more medals and the promise of a silver in the
0:30:43 > 0:30:49men's tennis doubles. But the team's medal total could be the
0:30:49 > 0:30:59lowest for 40 years. Not much has gone right for Britain in the
0:30:59 > 0:31:04
0:31:04 > 0:31:09Atlanta 1996 where Team GB won just a solitary Gold Medal. Funding was
0:31:09 > 0:31:16virtually non-existent and there was a widespread acceptance that in
0:31:16 > 0:31:26the face of fierce international competition, deline was inevitable.
0:31:26 > 0:31:27
0:31:27 > 0:31:31The fight back started in the some what curious decision by John Major.
0:31:31 > 0:31:37Peter Keen, a cycling coach who would become Director of
0:31:37 > 0:31:41Performance at UK Sport was one of the beneficiaries. When Lottery
0:31:41 > 0:31:47funding came in in the '90s and opportunities came for people like
0:31:47 > 0:31:50me to do this as a career, as a profession, rather than something
0:31:50 > 0:31:54in my spare time, that was a life- changing moment for me and many
0:31:54 > 0:31:59others in British sport, because you had the opportunity to try and
0:31:59 > 0:32:04put into practice in a systemic way what you may have learnt from
0:32:04 > 0:32:08working with one or two individuals. The new system was emerging that
0:32:08 > 0:32:12would reef illusionise British sport and at its core was a so-
0:32:12 > 0:32:16called traffic light system. Sports that failed to perform were shown a
0:32:16 > 0:32:21red light and have their funding cut. Sports that succeeded were
0:32:21 > 0:32:29given a green light and extra money. The competition between sports for
0:32:29 > 0:32:33funding was unapologetically Darwinian. But this ruthless focus
0:32:34 > 0:32:43on success went far deeper. Walking the shop floor is fundamental. I
0:32:43 > 0:32:47like to get to know the younger athletes coming up. David Tanner
0:32:47 > 0:32:53has been at the helm of British rowing for more than a decade.
0:32:53 > 0:32:56want to be the best sport in the world in rowing and we are. We did
0:32:56 > 0:32:59that in Beijing, we have done it now. If you see the guys here, when
0:32:59 > 0:33:05they are doing their training pieces, they will shout for each
0:33:05 > 0:33:08other. It is ease yes to say that, but in some cases there are people
0:33:08 > 0:33:18that might be trying to take your place in your boat, but they will
0:33:18 > 0:33:20
0:33:20 > 0:33:25shout for each other. The benchmark is does what you are doing make ts
0:33:25 > 0:33:29boat boat go faster, but it is a question asked and people feel
0:33:29 > 0:33:36accountable for what they contribute to the programme. It is
0:33:36 > 0:33:41trying to be a true meritocracy. You get what you need on merit. The
0:33:41 > 0:33:46whole approach to funding starts with understanding what every
0:33:46 > 0:33:49athlete needs in terms of coaching, in terms of facilities, the
0:33:49 > 0:33:57resources you have to have. What we have tried very hard and well
0:33:57 > 0:34:00continue to work on, whatever tough The success of British athletes at
0:34:00 > 0:34:072012 has been extraordinary. It's probably fair to say the elite
0:34:07 > 0:34:10sports set up in the UK is now the envy of the world. But what of the
0:34:10 > 0:34:15wider story, what are the lessons we can learn from the success of
0:34:15 > 0:34:22Team GB when it comes to the broader economy. To business and to
0:34:22 > 0:34:26our national culture itself. Zlt leaders of British sport from David
0:34:26 > 0:34:33Brailsford have very different personalities but almost identical
0:34:33 > 0:34:36values. They define their objective and then deconstruct it. Every
0:34:36 > 0:34:41facet associated with success is examined from science to nutrition,
0:34:41 > 0:34:45to the colour of the lockers in the changing rooms. It is called the
0:34:45 > 0:34:51science of marginal gains and its application extends way beyond
0:34:51 > 0:34:55sport. Businesses are interested in what's happened here and when they
0:34:55 > 0:35:00look at the structures and metrics that lie behind the measures we
0:35:00 > 0:35:04have been talking about, I think that traces to the very origins of
0:35:04 > 0:35:09this approach. Which is the difference between a successful
0:35:09 > 0:35:14athlete and a less successful one. Every training practice and every
0:35:14 > 0:35:22drill, the successful athlete is thinking how do I improve on that,
0:35:22 > 0:35:27what would change if I tweaked this. It's that constant self-
0:35:27 > 0:35:35reinforcement that lies at the heart of all expert performers and
0:35:35 > 0:35:40they are never satisfied. heroes of the London Olympics have
0:35:40 > 0:35:43enthused the nation and provided a template for success that
0:35:43 > 0:35:50transsends the field of play, but perhaps their most profound
0:35:50 > 0:35:56achievement is far broader. The current obsession with celebrity
0:35:56 > 0:35:59culture is encouraging the idea you can be somebody without doing
0:35:59 > 0:36:07something. They offer a powerful corrective. They have achieved
0:36:07 > 0:36:15excellence not overnight through years of dedication and sacrifice.
0:36:15 > 0:36:20Self-discipline. Having a structure in which to achieve your ambitions,
0:36:21 > 0:36:27working with other people. It is much more long lasting than the
0:36:27 > 0:36:32self-gratification which I do recognise. This philosophy of
0:36:32 > 0:36:35marginal gains has applications for us all. Those old-fashioned values
0:36:35 > 0:36:40of opportunity, hard work and endeavour are as important for
0:36:40 > 0:36:50success in life as they are in sport. As London moves on, perhaps
0:36:50 > 0:37:00that is the most powerful legacy. Ben Ainslie won his fourth Olympic
0:37:00 > 0:37:03
0:37:03 > 0:37:06Gold Medal last month to add to his silver from 1996. Liz Nicholl is
0:37:06 > 0:37:09Chief Executive of UK Sport. Are there some secrets you are
0:37:09 > 0:37:13particularly proud of that have turned people who could have been
0:37:13 > 0:37:18losers to winners this time? don't think it is rocket science in
0:37:18 > 0:37:22terms of how the high performance system in the UK works. At its
0:37:22 > 0:37:28heart it is about having a really clear goal and really focusing all
0:37:28 > 0:37:32the resources that you possibly can behind the achievement of that goal.
0:37:32 > 0:37:37That is what every athlete does, every Olympian does because they
0:37:37 > 0:37:42want it and Ben has been driving for that Gold Medal at every
0:37:42 > 0:37:50Olympics. He will be looking at the technical and tactical requirements
0:37:50 > 0:37:55around his own preparation, so the system here is about the multiplier
0:37:55 > 0:38:00effect, when you have all the athletes doing the same thing, and
0:38:00 > 0:38:04then across the system, when we look at UK Sport, we fund 47 sports,
0:38:04 > 0:38:07Olympic and Paralympic, and we are investing about �100 million a year
0:38:07 > 0:38:13and all that investment and all the resources are all focused around
0:38:13 > 0:38:18what is going to make each one of those athletes able to achieve
0:38:18 > 0:38:23their very best at the games. you try to pick winners, you
0:38:23 > 0:38:28channel more where you think it will do most good? Peter in that
0:38:28 > 0:38:32interview talked about a meritocratic approach, so we focus
0:38:32 > 0:38:38on sports and athletes that can produce medallists at the next
0:38:38 > 0:38:42games. Our investment is all about that. We have - we will make those
0:38:42 > 0:38:48tough calls, because if you are investing in success, that has got
0:38:48 > 0:38:52to be your top priority. Ben, congratulations again. Going back
0:38:52 > 0:38:58to 1996, you have seen a few changes. What effect has it had on
0:38:58 > 0:39:01you and other athletes? I was very struck by talking about critical of
0:39:01 > 0:39:07your team-mates, and your competitive with them, but you are
0:39:07 > 0:39:13in a time. That's right. My first Olympics in 1996, it was a a
0:39:13 > 0:39:17totally different story. The senior level sailors I was racing against,
0:39:17 > 0:39:20were holding down part-time jobs and sleeping in the backs of cars
0:39:20 > 0:39:26or camping at the international events. These days we have so much
0:39:26 > 0:39:29more support and it does come down to teamwork and people. The The
0:39:29 > 0:39:33funding has to be right but you need the right talent and you need
0:39:33 > 0:39:38the right coaching and staff to support that. Do you need to also
0:39:38 > 0:39:43be open to criticism, for other people to say you didn't do that so
0:39:43 > 0:39:47well? Yes, as a sportsman you have to be completely honest with
0:39:47 > 0:39:52yourself and those around you. You can't hide from the results
0:39:52 > 0:39:55ultimately. You have to take the criticism, you have to always be
0:39:55 > 0:39:59looking looking on how you can improvement the hardest thing is
0:39:59 > 0:40:02not getting to the top, it is staying there. How does this
0:40:03 > 0:40:07translate to business, a lot of people would like Team GB in a
0:40:07 > 0:40:13different way to work, but would it work? I think it does. The top
0:40:13 > 0:40:17businesses already know this. A picks ar movie is put together with
0:40:17 > 0:40:22absolutely with this philosophy of marginal gains, every scene is gone
0:40:22 > 0:40:27over. They don't ask whether it is good, they say what would make it
0:40:27 > 0:40:34better. Tesco's, the pricing, marketing or Amazon, they are they
0:40:34 > 0:40:38are doing something called alpha beta testing, tweaking the pricing
0:40:38 > 0:40:45or positioning. That way of thinking is very familiar to UK
0:40:45 > 0:40:49Sport. When it comes to organisations and when it comes to
0:40:49 > 0:40:56government, we find it harder to follow these examples and there are
0:40:56 > 0:41:01a couple of reasons. One is a cognitive bias called loss aversion.
0:41:01 > 0:41:07When something isn't working we want to double dounl, we want to
0:41:07 > 0:41:12keep going and going on, give more money and maybe it will work next
0:41:12 > 0:41:15time. The second obstacle is we almost take it for granted with
0:41:15 > 0:41:20sport, we know ultimately what success looks like and that is
0:41:20 > 0:41:23often not true with public policy. To give you an example, in
0:41:23 > 0:41:27education, my daughter's school a couple of years ago, sent out a
0:41:27 > 0:41:30note to parents and said we are going to change the way we teach
0:41:30 > 0:41:37literacy, we are going to change the way the children are seated,
0:41:37 > 0:41:41streamed, change the books. We said that's great. Why? What are you
0:41:41 > 0:41:45hoping to achieve and is there any evidence and are you going to test
0:41:45 > 0:41:50it, is it going to make the children perform better or love
0:41:50 > 0:41:55reading more, why? And this is very, very common. And the answer came
0:41:55 > 0:42:01none. They didn't understand why that was a relevant question, they
0:42:01 > 0:42:06formed an opinion this would be a good change. I don't think that you
0:42:06 > 0:42:10get away with that in Team GB. wouldn't this year under the new
0:42:10 > 0:42:14management as it were. Do you see it translating to business, do you
0:42:14 > 0:42:20business talk to you and say how do you do this? We have had visitors
0:42:20 > 0:42:27into UK Sport to look at our mission control process, which is
0:42:27 > 0:42:30very simple. We ask every sport we invest in to have a performance
0:42:30 > 0:42:36management approach, and a review three times a year. We ask them to
0:42:36 > 0:42:40look at their athletes and tell us how they are doing in a health and
0:42:40 > 0:42:44well-being. Examine their system and how is that performing and
0:42:45 > 0:42:49their coaches and be self-critical and tell us what is working and
0:42:49 > 0:42:53what is not working. We ask them to look at the climate and culture.
0:42:53 > 0:42:56The difference over the last four years has been that the sports
0:42:56 > 0:43:00trust, that we are not trying to catch them out here, we want to
0:43:00 > 0:43:04help them, we want them to win, everybody wants them to win. They
0:43:04 > 0:43:07are willing to put up their hands and saying we are not doing well
0:43:07 > 0:43:10here, we need help here. The great thing about the system now is,
0:43:11 > 0:43:16because we work across the sports, if there is a problem with one
0:43:16 > 0:43:20sport, it's been addressed in another sport and we can match that
0:43:20 > 0:43:26problem to that solution. Where does money come into this? Look at
0:43:26 > 0:43:30the athletes who train, the boxers who train so hard, who would do it
0:43:30 > 0:43:35for nothing, but shouldn't do it for nothing, because if money
0:43:35 > 0:43:40helped it, the England football team would be scoring goals and not
0:43:40 > 0:43:44having penalty shoot-outs. It is only one part of the equation, but
0:43:44 > 0:43:47you have to have the money to have the right equipment and coaching
0:43:48 > 0:43:53and development. But that only gets you so far. You then need to use
0:43:53 > 0:43:57that in the right way. That is where UK Sport offer a lot of
0:43:57 > 0:44:01assistance to the different sports. But they each take their own
0:44:02 > 0:44:06responsibility to manage that funding properly and use it in the
0:44:06 > 0:44:12right way to get the results. wonder if you feel managed because
0:44:12 > 0:44:17you have been doing it for a long time. I have a good relationship
0:44:17 > 0:44:23with our Performance Director, Stephen Parks. We get on very well.
0:44:23 > 0:44:27No, the sailing team are fantastic and allowing the sailors to decide
0:44:27 > 0:44:30the direction of their own programmes and they provide the
0:44:30 > 0:44:34funding and of course if the results don't come, people ask
0:44:34 > 0:44:37questions, but it's worked very well. I notice Roy Hodgson was
0:44:38 > 0:44:43saying England could learn from Team GB, but maybe money up to a
0:44:43 > 0:44:46point is fine, but perhaps many of the footballers run it more like a
0:44:46 > 0:44:53business than sports people, in other words the money has a
0:44:53 > 0:44:58negative effect. Yeah, it is clearly possible to be paid too
0:44:58 > 0:45:02much, to be over motivated, to be distracted by this. The thing about
0:45:02 > 0:45:07money is it is useful up to a point. There is only so much to go around.
0:45:07 > 0:45:12The question is how are you going to use it effectively. I think what
0:45:12 > 0:45:17UK Sport have done is constantly ask is this going to make the boat
0:45:17 > 0:45:22go faster, is this going to make the athlete run faster or jump
0:45:22 > 0:45:26higher. What we don't see often enough in most public policy is
0:45:26 > 0:45:31this focus of we are going to introduce a new offender
0:45:31 > 0:45:37rehabilitation scheme or new policing tactic. Whether it work,
0:45:38 > 0:45:41how will we evaluate whether it works. Can we come back in five
0:45:41 > 0:45:45years' time and say we thought it was a good idea, tested it out and
0:45:45 > 0:45:50it turns out it wasn't. I would be delighted to see politicians do
0:45:50 > 0:45:56that but I don't think that comes naturally to them. Are you going to
0:45:56 > 0:46:01be back in four years and even better? I am not sure about that.
0:46:01 > 0:46:06The next project is the Americans cup, that is really about teamwork.
0:46:06 > 0:46:09So four years' time, 2016, it would be great to see the team do just as
0:46:10 > 0:46:19well as they have done this time round.
0:46:20 > 0:46:21
0:46:21 > 0:46:26The Duke of Edinburgh is in hospital. Boris on the runway,
0:46:26 > 0:46:31demand for action for leadership aims.
0:46:31 > 0:46:37The Telegraph has more places for bright students at elite
0:46:37 > 0:46:47universities. The Mail has a �35,000 cap on care bills. That is
0:46:47 > 0:47:13
0:47:13 > 0:47:17That is all from us tonight. Good Good evening. We have had some
0:47:17 > 0:47:20miserable weather through Wednesday. That lies to the north of Scotland.
0:47:20 > 0:47:30Heavy showers follow coastal gales through the night. It will be a
0:47:30 > 0:47:36
0:47:36 > 0:47:40With some lengthy dry spells we will see the temperatures into the
0:47:40 > 0:47:45mid 20s but a breeze will drive the showers in sharely frequently
0:47:45 > 0:47:47across the south-west of England, Wales as well, with longer spells
0:47:48 > 0:47:52of rain returning to Northern Ireland and brushing close to Wales
0:47:52 > 0:47:57by the end of the day. There are further further warnings out for
0:47:57 > 0:48:00rain over the coming few days. Heavy showers around just about
0:48:00 > 0:48:07anywhere. More across the north- west highlands than we have seen
0:48:07 > 0:48:12today. But with some sunshine in between, pleasant spells as well.