05/09/2012 Newsnight


05/09/2012

With Jeremy Paxman. Why is there so much child poverty in working families? Economist Larry Summers speaks. New evidence of melting Arctic ice.


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Transcript


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Britain in 2012 a country so expensive that even when parents do

:00:13.:00:19.

work, their children can still go without. Politicians talk of hard

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working Britain, but what is it like when your parents have to work

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too hard. My dad works two jobs. But I don't get to see him much,

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when he's off he does carpets, I feel left out, because I really

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love my dad. We ask the former Labour

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communications director, who has just launched a Save the Children

:00:43.:00:46.

campaign in this country, a single mother, the Education Committee

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chair, and the man from the at this tank founded by Iain Duncan Smith.

:00:52.:00:56.

They are back from the beaches, so it is time for the eurocrisis to

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resume. Tomorrow the head of the European Central Bank hopes to stop

:00:59.:01:04.

the anxiety. What does the man who was President Obama's chief

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financial adviser think he has to say. Come to that, how does he rate

:01:08.:01:12.

George Osborne? Also tonight, Newsnight uncovers

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new evidence suggesting melting Arctic ice will have a dramatic

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effect on our climate. Is now the time to kick back, relax, and learn

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to love cloudy Augusts. The summer area of ice has already gone down

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from eight to four million square kilometres, as it collapses we will

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lose another four million. Four million square kilometres is about

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1% of the surface area of the earth. The new leader of the Green Party,

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:01:52.:01:52.

and a prominent climate change sceptic, are both here.

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You have heard of Save the Children, you may have given to one of their

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appeals, to help suffering children overseas. Yet now, for the first

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time, this affluent society's charity, is running a campaign

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about deprived children in this country. Their conclusions are

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troubling. They say that in the poorest households, nearly two

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thirds of parents say they have cut back on food. Over a quarter have

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gone without meals, and a fifth say their children have gone without

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new shoes, when they have needed them. We are going to talk about

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why it is happening, and what we maybe can do about it. First, we

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ought to hear from some children themselves, all of them in families

:02:32.:02:42.
:02:42.:02:44.

struggling in the downturn. I'm Andrew, I'm 12 years old. I

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like to be a marine biologist. I want to be people that go around

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the world discovering art facts of Diana And Actaeon saurs, an

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archaeologist, a scientist and a professional football player --

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dinosaurs, and an archaeologist, a scientist and a professional

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football player, I can't be all three, I will be too fired. Once we

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were playing football on a field, and there was a gang on there with

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a gun. We heard shots fired. The park, a lad got killed outside

:03:26.:03:32.

there, and was dumped on our street. I had to witness him trying to be

:03:32.:03:42.
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revived. Snails. Another brick. volunteer in a youth project, and

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we come up here and dig out all the weeds. We got rid of 12 tonnes of

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rubbish. We plant flowers. We are making it so it is like a nature

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trail, you can go down and pick berries, and look at the nice

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flowers. We were struggling to pay bills, and me dad lost his job, and

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his contract, so they were struggling, we had to live with our

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nan for a bit. And then my dad got another job, two jobs, and started

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working with that. Me mum helped as well. Me mum, she will miss out on

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a new pair of shoes, to get us uniforms, or a bit more expensive

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stuff, clothes and that. Or she will get a cheaper type of food to

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feed us. When she can't afford to get and pay bills, she will get

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dead stressed and be worried about it. Found a worm. Hey there little

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:05:11.:05:12.

guy. He's trying to eat my finger. My dad works, two jobs. Four nights,

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two nights, two days. But I don't really get to see him much, because

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when he's off, he does carpet, and I feel left out, because I really

:05:24.:05:34.
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love my dad. REPORTER: Would you I'm 13 years old. I'm 12, my name

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is Precious. I would like to be either a medical doctor, or an

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economist. I like maths, and I'm good with my numbers. I either want

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to be a lawyer, or study medicine. I like my free school meals because

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they are good, and they help. Even though I'm happy for it. Sometimes

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the food is costly, which is not even nice, there might be a

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sandwich which is �1.80, and you only have �2 on your dinner ticket,

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you won't have anything to buy anything else. Sometimes it fills

:06:29.:06:39.
:06:39.:06:41.

me up, sometimes it doesn't. chips fill you up, they are cheaper,

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if you were to go to a supermarket and buy a pack of fruit or

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something, which I don't tend to do, they are more expensive. I like

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strawberries, I like mangos and pomegranates. Say there was one

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mango for �1, you may think to yourself, what is the point of

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buying that one mango, and you can have a pack of chips that will fill

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you up even more. We normally do a cake stall to raise money for us.

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We make fairy cakes. You you get extra money so you can spend it on

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stuff you like. We normally do it with our youth groups too. That's

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not funny! We just want to show other children on the road that

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there is more to do than wasting your time being silly on the road,

:07:41.:07:51.
:07:51.:07:51.

creating gangs. School uniform is very expensive. My school uniform

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costs �380 just for me. That wasn't including any of my white T-shirts,

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my school shoes, my bag or anything, just main stuff like the jumper and

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the blazer and the skirt. My school uniform was really expensive, it

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was twice as much as her's. I only got one blazer, because I had to

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get a big-sized blazer to last me quite long. We are privileged, when

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you look across the road to the other houses, which are more posh.

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Then, on our house some people may judge it from the outside, they

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might say on the outside it looks bad, on the inside it is actually

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nice. We have never been all together on holiday. We went to

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Brighton. But we didn't stay there, I am eight years old. I like street

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dance. I want to be a dancer. Mummy doesn't have enough money to buy

:09:08.:09:15.

clothes sometimes. I get clothes off other people. Clothes that

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:09:25.:09:26.

haven't been used, and some clothes that they have worn. I got to baton

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swirling, swimming and brownies, I like all of them. Mummy knows one

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of the brownie leaders, and the brownie leader says she doesn't

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have to pay for the badges. If I won lods loads of money, I would

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buy loads of presents for my friends for their birthdays, and

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buy loads and loads and loads and loads of presents for mummy on her

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birthday. Sometimes I like to go out for a meal, but I know mum

:10:02.:10:09.

doesn't have enough money. She has to spend loads of money on food.

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She feeds us before her, because she wants to make us happy. She

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gives us nice things, and doesn't eat her breakfast. She's hungry.

:10:21.:10:31.
:10:31.:10:38.

My mum always says to me, even universities cost that much, I will

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still go, even if it costs millions of poupbtdz, I will still go. She

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:10:52.:10:58.

wants me to go to university, I do too. I I want to go to university,

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because education means a better life. I want to go to university. I

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do want to, because we're struggling to pay the bills. It's

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like �10,000. I have been saving up quite a bit of money from birthdays

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and things like that. So I have got a head start of getting to

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university. Well, before we talk about some of the issues in that

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film. Our political correspondent is here. To explain how many

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children we are talking about, and what we actually mean by children

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living in poverty. David. You might think it is an easy thing

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to measure child poverty, and you might point to factors like someone

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not having anywhere to live, being undernourished, having inadequate

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clothing. That is certainly the measures that were used by 19th

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century social campaigner, and mercifully, on those measure, there

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is ininfinitely less poverty in Britain than there was 200 years

:12:02.:12:07.

ago. Job done. Well, not so fast, in recent decades, policy makers

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and campaigner, have settled on a different measure, relative poverty.

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How well off someone is in relation to everyone else. The most common

:12:17.:12:20.

measure of child poverty, favoured by the last Government, is the

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number of children living in households whose income is less

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than 60% of median, or middle income. In 2011, that was �419 a

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week. The Labour Government set a target of eliminating child poverty

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by 2020. And by 2010, they enshrined that in law. And here's

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the good news. Child poverty has fallen, in the past few years. Most

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markedly in 2010/2011, that is not because poorer families have got

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richer, but everyone else has been getting poorer quicker. Leading to

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a reduction in the median income, from �432 a week, to �419. The Work

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and Pensions Secretary, Iain Duncan Smith, has described this as

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perverse, that when times are good we get more poor people, and when

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times are bad we get fewer. He notes that by this way of thinking,

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the simplest way of reducing child poverty, is to collapse the economy.

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The criticism of the Labour years is that ministers fixated on an

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abitary line, and they spent billions on moving people from a

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few pound under the line, to a few pounds over it, without tackling

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the causes of poverty right at the bottom. Like unemployment, family

:13:33.:13:37.

breakdown, and addiction. The current Government says it is

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absolutely committed to tackling child poverty, it is just we have

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to get a whole lot better at measuring it. With us is Justin

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Forsyth, the chief executive of Save the Children, and former

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adviser to Gordon Brown and Tony Blair. Tracey Nugent, a lone parent

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from Glasgow. The Conservative MP, Graham Stuart, chair of the

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Education Select Committee, and Christian Guy, from the Centre for

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Social Justice, founded by the welfare secretary, Iain Duncan

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:14:15.:14:16.

Smith. What is it like to bring up a child who is not only poor, but

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aware of the circumstances? intensifies the stress, which would

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then intensify his stress. He was originally, for a long, long time,

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Adam was my carer, because I couldn't handle the issues I was

:14:30.:14:36.

having to deal with. And now, that I'm out earning, I think a lot of

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people think, they have on the rose tinted glasses, thinking I'm OK now.

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Not taking into consideration the amount of debts that we accrued.

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That we are now paying back. are no better off, despite the fact

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you are working? No. Mentally, my mental health, and the fact that

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I'm getting up and going out to work every morning, that is

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absolutely fantastic. However, when I come home at night, the same

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financial issues are still sitting there. I'm very, very aware, over

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the fact, that if I'm not dealing with them properly, it will have a

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knock-on effect to my child, who is then going to adopt those

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behaviours, and perhaps think it is OK not to earn a great wage, not to

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follow their ambition, and not to better themselves. He's growing up

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in a world which he sees shiny, glistening attractive things

:15:27.:15:37.
:15:37.:15:38.

daingled in front of him all the time? Absolutely. The area we come

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from, there are very few lone parents, they are women. In the

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area we have, people have a mum and dad, two or three bedroom, a front

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door, back door garden. Adam and I are currently sharing a bedroom. My

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kitchen is in the living room. The only reason we can heat our house

:15:55.:16:01.

at this minute, because I got a grant. Are you aware that there are

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fewer people living in poverty in this country than there were, does

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it feel like that to you? Absolutely not. Absolutely not. I

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come from a background where my mum and dad instilled in me that you

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must have a very good and strong work ethic. Unfortunately, because

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of the circumstances that I'm in, and I can't claw myself out of,

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he's going to think that's OK. you surprised when you started

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looking into this situation, in this country? I think we were

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surprised. Because I think what we have heard from children, and

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parents, and we saw in your films, is so many children aren't only

:16:41.:16:44.

eating properly or getting a winter coat, but the stress that goes with

:16:44.:16:48.

that. That took us most by surprise. What is happening to families, as

:16:48.:16:52.

Tracey as said, is a combination of factors that have come together.

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High energy prices are a big factor, unemployment, cuts in benefits,

:16:56.:16:59.

high food prices, there is that perfect storm, that is really

:16:59.:17:03.

affecting families, that is what makes it really hard. What people

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don't realise, because they have this caricature in their head, that

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most people that are poor in families are undeserving, they are

:17:10.:17:16.

drug addicts and dropouts, but actually 61% of families are

:17:16.:17:20.

actually working, where children are poor. They are striving to get

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out of poverty, and they need a bit of a helping hand. Is there a

:17:24.:17:28.

solution? I think there is, it doesn't cost the earth either. One

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of the biggest factor, and Tracey knows this full well, is childcare.

:17:31.:17:35.

It is a huge factor, actually being able to afford to go into work, and

:17:35.:17:39.

earn an income. That saves the Government money if you are in work.

:17:39.:17:43.

So the taxpayer pays this? What we have had is a cut in childcare

:17:43.:17:47.

support for the poorest families, it is a tiny investment. You would

:17:47.:17:51.

help a million children, with a �400 million investment. That would

:17:51.:17:54.

help then get them into work and would mean less benefits and save

:17:54.:17:59.

money longer term. Does that make sense to you? About childcare or

:17:59.:18:02.

the general debate. The solution? On childcare I think there is a

:18:02.:18:07.

major problem with childcare, I'm not convinced that more tax-payers'

:18:07.:18:10.

money to subsidise the inflated costs of childcare is quite the

:18:10.:18:14.

answer. There are things we can do with childcare to flood the market,

:18:14.:18:20.

make it easier to train as registered child minders, look at

:18:20.:18:23.

wrap-around school childcare. By flooding the market will child

:18:23.:18:27.

cautious we will reduce the childcare costs, and Government

:18:27.:18:31.

shouldn't keep subsidising that. Childcare is one part of the

:18:31.:18:35.

problem. You must be scandalised by this, when you hear the moving

:18:35.:18:38.

stories of the children, talking about what it is like, they have

:18:38.:18:42.

got working parents, who have been told get a job and you can get

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yourselves out of poverty, and it isn't happening. They are full of

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dreams and aspirations and hopes and ambitions, I don't know whether

:18:48.:18:52.

they will be realised, I hope they are? I do too, we have been at the,

:18:52.:18:56.

CSJ, all over the country listening to families like these. The

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interesting thing tonight is what we see as a an aspiration, hope and

:19:00.:19:03.

belief in the power of work, even though it is difficult, work is

:19:03.:19:08.

still what people pursue. What is the alternative to work if you want

:19:08.:19:11.

to lift yourself out of poverty and be self-reliant. There is no

:19:11.:19:15.

alternative. It is tough right now, but work is the surest route out of

:19:15.:19:18.

poverty. There is no doubt about that. Do you agree with that?

:19:18.:19:23.

Absolutely. The other thing we saw in the film, from Precious and

:19:23.:19:27.

others, is the power of education, the recognition of the need to get

:19:27.:19:31.

a good education to earn the money. We are in an ever-more competitive

:19:32.:19:34.

global economy, we know we are losing jobs every day at the

:19:34.:19:38.

unskilled level. So the message, which I'm delighted to see had got

:19:38.:19:41.

through to the children there, that needs to go to parents, is that you

:19:41.:19:45.

might have been able to leave school without much on the way of

:19:45.:19:48.

qualifications and skills, get a good job, support a family, have a

:19:48.:19:51.

rich and fulfiling life. This generation, increasingly, isn't

:19:51.:19:56.

able to do so. Getting education right, making sure that the 42%

:19:56.:20:04.

last year of children who took GCSEs, 42% of them didn't get five

:20:04.:20:07.

good GCSEs including English and math, which we know triggers a move

:20:07.:20:11.

on to education or employment. are you going to do about it?

:20:11.:20:14.

have to intervene early, there is cross-party agreement on this.

:20:14.:20:17.

Perhaps what happened, and it was understandable, part of the times,

:20:17.:20:23.

but huge amounts of money were thrown in the direction, by the

:20:23.:20:25.

last Government, I don't think, they would accept in many ways,

:20:25.:20:28.

that the long-term routes weren't tackled as effectively as we would

:20:28.:20:32.

like. Now this Government has commissioned Graham allen, a Labour

:20:32.:20:39.

MP, and Frank Field, in this area, looking at early intervention, and

:20:39.:20:46.

the causes of poverty. And the Early Years Intervention will be

:20:46.:20:50.

set up hopefully soon, and look at getting the evidence on the right

:20:50.:20:53.

interventions to support. The Government is doing things like

:20:53.:20:56.

extending free nursery education to two-year-olds, trying to make sure

:20:56.:21:00.

that the children, who all too often from poor families, arrive at

:21:00.:21:04.

school is and they are not able to learn, they are not school-ready,

:21:04.:21:09.

and their confidence is knocked. And children who are born poor end

:21:09.:21:15.

up not getting the qualifications. These problems reinforce each other.

:21:15.:21:19.

Work is a key way out of poverty, we all agree. Not for those kids?

:21:19.:21:23.

It is if their parents get a chance to work and they get a decent

:21:23.:21:25.

income. Part of the problem is they go to work without a decent income.

:21:25.:21:30.

Also, in terms it of getting the more earnings, the more benefits

:21:30.:21:33.

they lose. We have to skew the system, we have to pay for more

:21:33.:21:36.

childcare. We have a mix of prokblems. They reinforce each

:21:36.:21:41.

other. If you are at home, and the energy prices are high, you put

:21:41.:21:45.

their children to bed and they do it in bed. They are so cold. You

:21:45.:21:49.

send their friends home because you can't afford to have them round to

:21:49.:21:53.

cook them a meal. These kids get much less chance at school, they

:21:53.:21:57.

don't succeed at school, they don't get your educational benefits.

:21:57.:22:01.

have to make work pay, we have to reform benefit, which is happening.

:22:01.:22:05.

The Universal Credit is an aim to make sure you don't get this

:22:05.:22:07.

disproportionate loss, when you do more hours, so many people would

:22:07.:22:11.

get a job and find themselves worse off. You know about this? I think

:22:11.:22:15.

what a lot of people are forgetting, I'm going to work and paying

:22:15.:22:19.

national insurance and tax, I should be, therefore, entitled to

:22:19.:22:25.

support, to get my child looked after properly. But the other issue

:22:25.:22:29.

is, as well, once they hit first year in Scotland, there no

:22:29.:22:36.

childcare provision at all. Which leaves the children, at a

:22:36.:22:40.

vulnerable age, to become latch-key kids. That is not acceptable.

:22:40.:22:44.

really important to recognise that, whilst Universal Credit, perhaps is

:22:44.:22:47.

far from perfect, what the Government is doing is making sure

:22:47.:22:51.

work does pay. The new system will prevent many more of these cases. I

:22:51.:22:54.

think right now we have a broken benefits system, and work doesn't

:22:54.:23:00.

reward, and people on benefits are penalised by taking work, that is

:23:00.:23:03.

perverse. But the universal benefits system has been a long

:23:03.:23:09.

time in gestation, and will take a long time to get properly grounded.

:23:09.:23:16.

Those children, those 8, 10, 12, 13, 14-year-old children, living in

:23:16.:23:19.

poverty, in this country, making calculation about what they can

:23:19.:23:23.

afford to eat on their called free school lunch, and having a chip

:23:23.:23:27.

because it fills them up. As opposed to fruit. Those children,

:23:27.:23:31.

they are not going to be rescued, are they? They will be, because the

:23:31.:23:35.

new system will help their parents to make sure that work pays them.

:23:35.:23:38.

Interestingly you mentioned the point, let me finish the point. The

:23:38.:23:41.

interesting point about how we measure poverty in this country is

:23:41.:23:45.

a big debate, we heard it in the clip earlier. It is madness how the

:23:45.:23:48.

measure is set. What we see, under the previous Government, for

:23:48.:23:53.

example, �150 billion on tax credits, for a 1%age point

:23:53.:24:00.

reduction in the -- 1% point reduction in the poverty. You were

:24:00.:24:05.

part that have team, and it didn't work? It did work, we lifted a

:24:05.:24:09.

million out of poverty. I actually support the Universal Credit, I'm

:24:09.:24:11.

here as Save the Children, not the previous Government. I think you

:24:11.:24:17.

have to put money into it. You have an extra �3 billion secured in

:24:17.:24:20.

difficult times. If we put some more money towards childcare, we

:24:20.:24:24.

could help a million children. Part of the problem with the Universal

:24:24.:24:27.

Credit, as it is being set up, and we don't know exactly how it will

:24:28.:24:31.

work yet. As you earn more and you begin to bring money in you will

:24:31.:24:35.

lose your benefits. That is the opposite of what it is about, it is

:24:35.:24:40.

about keeping more of your benefits, which is the �3 billion. On

:24:40.:24:44.

childcare they are adding an extra �300 million into childcare and

:24:44.:24:49.

more will receive it. At the moment you have to work 16 hours a week to

:24:49.:24:52.

get childcare cover. If this is the case, why so many people like

:24:52.:25:00.

Tracey and those in the film? have a broken system now, the

:25:00.:25:06.

benefit coming to an area near you, will help. In the boom years, not

:25:06.:25:09.

the post-recession time, the children in the most severe poverty,

:25:09.:25:12.

under the last Government, increased in number. That's not all

:25:12.:25:17.

just to do with failure of policy. There has been a change in the

:25:17.:25:19.

labour market and increasing challenges there. We have to get

:25:19.:25:22.

the long-term conditions right. I think the Government is moving in

:25:22.:25:26.

the right direction. People at home might be saying, the poor you have

:25:26.:25:31.

always with you, there are always going to be poor people, but what

:25:31.:25:35.

is the consequence of children failing to see their aspirations

:25:35.:25:40.

realised, their dreams realised. The sense that you can't do. What

:25:40.:25:45.

happens? It is tragic. And the social cost is appalling, in this

:25:45.:25:49.

country, in an economy, that is relatively still very prosperous,

:25:49.:25:52.

it is completely wrong and an inJews at this. How we measure that

:25:52.:25:57.

poverty is really important. Take the tax credit point, I'm not

:25:57.:26:00.

making a party political point, that �150 billion that went in for

:26:00.:26:04.

the 1% reduk. How would the money have been used, it would have been

:26:04.:26:09.

important to give it to the charities and get ahead of the

:26:09.:26:11.

family breakdown, reform the welfare system and drugs and

:26:11.:26:15.

alcohol. So many of those things make a difference to how much

:26:15.:26:19.

poverty people are in. We will long-term make more difference than

:26:19.:26:23.

anything else. Tracey, how do you keep a sense of dream and ambition

:26:23.:26:30.

and aspiration? Adam does that for me. He bolsters everything that

:26:30.:26:36.

goes on in my life. If it wasn't for his attitude, then I don't

:26:36.:26:43.

think I would have returned to work. The thing is, with children, they

:26:43.:26:45.

are there, they will support each other, without doubt. When you

:26:45.:26:52.

become an adult, it becomes political, and it is just, the

:26:52.:26:56.

wrong people are picked on, in my point of view. It is easy to take

:26:56.:27:02.

it from people that are already down, to kick them while they are

:27:02.:27:07.

down, it is easier that way. The people who don't vote any more, I

:27:07.:27:10.

don't really wonder why that is now. It is because they don't feel as

:27:10.:27:16.

though they are getting anything back at all. I did work before I

:27:16.:27:21.

had ar Adam, and it was mental health issues that me dig my own

:27:21.:27:25.

hole, that I haven't been able to get back out of financially. Now,

:27:26.:27:31.

what I did was, I flitted from the Jobcentre to the Benefits Agency,

:27:31.:27:36.

the Department of Work and Pensions. And nothing happened, I went to One

:27:36.:27:41.

Parent Family in Scotland, within a year, I had a job. Why haven't the

:27:41.:27:44.

Government adopted a more holistic method to deal with all these

:27:44.:27:48.

issues, that is my question. Thank you very much. The summer

:27:48.:27:53.

holiday is over, time for the next installment of the disaster story

:27:53.:27:55.

that is the European single currency.

:27:55.:28:00.

Tomorrow, and I'm sorry if this sounds familiar, we will hear how

:28:00.:28:04.

the European Central Bank will save the euro, or possibly not. The fate

:28:04.:28:07.

of the currency is one of the subjects to be tackled in a elect

:28:07.:28:12.

tue at the London Stock Exchange, by one of the most respected

:28:12.:28:15.

economists in the world, Larry Summers, Bill Clinton's Treasury

:28:15.:28:17.

Secretary, and Barack Obama's Chief Economic Advisor.

:28:18.:28:23.

It is not hard to see why Barack Obama wanted Larry Summers at his

:28:23.:28:29.

side, at a time that he called a time of great peril for America.

:28:29.:28:33.

Summers is used to being close to power, he was economic advise Tory

:28:33.:28:42.

Ronald Regan in the 1980, and back in the White House a decade later,

:28:42.:28:52.
:28:52.:28:53.

with Bill Clinton. He rows through the ranks, and many say his zeal in

:28:53.:28:57.

the US financial markets helped paved the way for the crisis.

:28:57.:29:01.

Summers went back to acedemia, as President of Harvard, just in time

:29:01.:29:05.

to get caught up in one of the early disputes about who really

:29:05.:29:09.

came up with the idea for Facebook. I don't think you are in any

:29:09.:29:13.

position to make that call. I was the US Treasury Secretary, I'm in

:29:13.:29:19.

some position to make that call. Hollywood's take on the Facebook

:29:19.:29:22.

story portrayed Summers as dismissive, and most of all,

:29:23.:29:27.

arrogant. He said pretty accurate. The courts are at your disposelia,

:29:27.:29:32.

anything else I can do for you? The Republicans now have the

:29:32.:29:37.

economic record of Obama, and those, like Summers, who advised him, in

:29:37.:29:43.

their cross hairs. American growth, at 2%, may look rosy, compared with

:29:43.:29:48.

Britain's double-dip recession, but unemployment lies at more than 8%.

:29:48.:29:51.

Only one President has ever been re-elected with jobless figures

:29:51.:29:58.

like. That A little earlier I spoke to Larry

:29:58.:30:04.

Summers, from his current lair, at Harvard. It is yet another decision

:30:04.:30:10.

day for the euro tomorrow, what is the minimum that needs to be heard?

:30:10.:30:18.

I think there needs to be a very clear statement that what needs to

:30:18.:30:24.

be done will be done to ensure the continued availability of finance,

:30:25.:30:33.

particularly to pain and Italy. There needs to be a clear

:30:33.:30:36.

commitment on the part of the ECB to do what is necessary there needs

:30:36.:30:42.

to be a political recognition from the nations of northern Europe,

:30:42.:30:45.

that failure is not an option. that has been the requirement from

:30:45.:30:51.

the start of this crisis, hasn't it, to restore confidence, and make

:30:51.:30:54.

people believe that Governments, if necessary, the European Central

:30:54.:30:59.

Bank, and the rest, will save this currency, will do whatever it takes.

:30:59.:31:02.

And time after time they have failed to instill confidence. Do

:31:02.:31:07.

you think it's been well managed, this crisis? This is surely not

:31:07.:31:13.

going to be a happy chapter in international monetary history. I

:31:13.:31:17.

have often compared this to the Vietnam War. During the Vietnam War

:31:17.:31:22.

in the United States, American policy makers always did what was

:31:22.:31:27.

necessary to avoid immediate collapse, and never did what was

:31:27.:31:33.

necessary to offer a prospect of a long-running solution. And

:31:33.:31:37.

eventually, the policy collapsed around this. Let me ask you,

:31:37.:31:43.

honestly, do you believe in a year's time, there will still be 17

:31:43.:31:47.

members of the eurozone? There can't be any guarantees, we don't

:31:47.:31:51.

know what will happen in Greece. We don't know what political

:31:51.:31:57.

conditions are going to permit, in northern Europe. We don't know what

:31:57.:32:03.

will happen with respect to uncertain banking systems. But I

:32:03.:32:10.

think there is a proper judgment that, having made the momentous

:32:11.:32:15.

commitment to the euro, the right path forward is to try to live with

:32:15.:32:21.

it and do what's necessary to make it work. If the euro were to

:32:21.:32:29.

collapse, how big a deal would that be for the world economy? In ways

:32:29.:32:34.

that that are more negative than has been true historically, and in

:32:34.:32:39.

ways that are larger than is true for some decade now. The fate of

:32:39.:32:44.

the global economy over the next several years, rests heavily with

:32:44.:32:52.

Europe. Europe doesn't have the capacity to be the propulsion, that

:32:52.:33:01.

creates a rapid global expansion. But Europe does have the capacity

:33:01.:33:05.

to be the shock that brings the global economy to a screeching halt.

:33:05.:33:10.

It is the reason why so much of economic and financial diplomacy

:33:10.:33:14.

has centered, including the active involvement of the President of the

:33:14.:33:18.

United States, on Europe over the last year.

:33:18.:33:21.

You mentioned the President of the United States, when asked about his

:33:21.:33:25.

own handling of the economy, and what grade he would give himself.

:33:25.:33:30.

He said he would give himself an "incomplete" grade. What would you

:33:30.:33:34.

give him? I think that's right. I think there was a real prospect of

:33:34.:33:39.

a situation like the US Great Depression, in 2009. If you looked

:33:39.:33:44.

at what happened when the President came into office, employment was

:33:44.:33:50.

falling more rapidly, GDP was falling more rapidly, stock prices

:33:50.:33:53.

were falling more rapidly. All of it, exports, world trade was

:33:53.:33:57.

falling more rapidly all of it was falling more rapidly than in the

:33:57.:34:02.

fall of 1929, and yet, for all the problems we have had a very

:34:02.:34:05.

different path. With nothing like the kind of complete collapse of

:34:05.:34:12.

the economy that the US saw after 1929. That's because of what the

:34:12.:34:16.

President did. What grade would you give George Osborne for his

:34:16.:34:20.

management of the economy? Economic performance has been considerably

:34:20.:34:25.

better in the United States over the last several years than it has

:34:25.:34:32.

been in the United Kingdom. And I believe that relates centrally to a

:34:32.:34:37.

strategic choice, the United States made that, that the British

:34:37.:34:43.

authorities did not make. That was the strategic choice to pursue a

:34:44.:34:50.

strategy of fiscal expansion in the short run, to grow the economy,

:34:50.:34:54.

followed by a commitment to long run fiscal consolidation. In

:34:54.:35:00.

contrast, in Britain, it has been all fiscal consolidation, all the

:35:00.:35:06.

time, and I think it is something that history will not look back on

:35:06.:35:10.

kindly. Sounds to me as if you were giving him something like a D minus

:35:10.:35:20.

in terms of grades? As we pass the mid-term exam, there is real cause

:35:20.:35:24.

for concern about failure. Given what is happening in the British

:35:24.:35:31.

economy. It's life, Jim, but not as we know

:35:31.:35:35.

it, as Dr Spock never said. The evidence of what is already

:35:35.:35:39.

happening to the Arctic, subjects is may be too late to do anything

:35:39.:35:42.

about climate change. We will just have to adapt, big time. It is more

:35:42.:35:45.

than this year's awful summer, because scientists have told

:35:45.:35:50.

Newsnight, that the disappearance of Arctic ice, is effectively

:35:50.:35:52.

doubling mankind's contribution to global warming, which rather raises

:35:53.:35:56.

the question of why we should bother. Not driving to the shops

:35:56.:36:00.

any more. We will be discussing that with Peter Lilley, who has

:36:00.:36:06.

written a new report, which can be summarised as Don't Panic, and the

:36:06.:36:10.

leader of the Green Party in a few moments. We have known for some

:36:10.:36:15.

time that the Arctic ice is melting at a rapid rate. New figures we

:36:15.:36:20.

have been given, subjects the impact of that melt is doubling

:36:20.:36:24.

mankind's contribution to climate change. Now, when we first saw

:36:24.:36:30.

these beautiful shots of earth from space, curtesy of the Apollo as

:36:30.:36:35.

trau not, it triggered the green -- astronauts, it triggered the green

:36:35.:36:39.

movement. But that view has changed. This is what the Arctic looked like

:36:39.:36:46.

in the summer of 1979, and this is what it looked like in 2007, half

:36:46.:36:51.

of the ice had gone. One of Britain's leading ice scientists

:36:51.:36:54.

predict all of the ice could be gone at the North Pole, in summer,

:36:54.:36:58.

within a few years. Well this year there has been another big melt,

:36:58.:37:04.

they are still a few days away from the official minimum.

:37:04.:37:12.

Professor Peter Wadhams has spent the summer on the Arctic ice, using

:37:12.:37:16.

lasers and rob robot submarines to get a picture of what is left. He

:37:16.:37:22.

has also taken part in a BBC Two documentary series, broadcast next

:37:22.:37:27.

month, called Operation Iceberg. On an area, twice the size of

:37:27.:37:34.

Manhatten, where he had to dodge the odd polar bear. He has seen for

:37:34.:37:39.

himself the dramatic decline in sea ice. 30 years ago, then there was

:37:39.:37:46.

typically about eight million square kilometres of ice, left in

:37:46.:37:51.

the Arctic in the summer. And by 2007, five years ago, that had had

:37:51.:37:55.

halved, it had gone down to four million. This year it has gone down

:37:55.:38:00.

below that, and heading for oblivion. And the ice is also

:38:00.:38:06.

getting thinner. The volume of ice at the pole, naturally goes up in

:38:06.:38:10.

the winter and down in the summer. It has been declining over the last

:38:10.:38:18.

30 years. It is now at the lowest level since records began.

:38:18.:38:21.

Estimates that the North Pole could be ice-free in summer in a few

:38:21.:38:25.

years, contrasts with the official view of the Met Office. That the

:38:25.:38:29.

Arctic will not be completely free of ice before the summers of 2030.

:38:29.:38:34.

But it's the effect of losing all that white ice, that matters.

:38:34.:38:39.

The polar icecap acts as a giant parasol, reflecting sunlight back

:38:39.:38:43.

into the atmosphere, in what is known as the albedo effect. 30

:38:43.:38:50.

years ago, the ice looked like this. The Arctic ice covered 2% of the

:38:50.:38:54.

earth's surface, reflecting most of the sun's ray. But half of that ice

:38:54.:38:58.

has now gone. And open water absorbs far more of the sun's

:38:58.:39:04.

energy. Professor Wadhams told us, parts of

:39:04.:39:09.

the Arctic Ocean are now as warm in summer, as the North Sea in winter.

:39:09.:39:13.

Over that 1% of the surface of the earth, you are replacing a bright

:39:13.:39:18.

surface, which reflects nearly all the radiation falling on it, by a

:39:18.:39:22.

dark surface, which absorbs nearly all. The difference, the extra

:39:22.:39:27.

radiation that is absorbed, from our calculation, the equivalent of

:39:27.:39:33.

20 years of additional carbon dioxide, being added by man. If his

:39:33.:39:39.

calculation are correct, that means, over recent decades, the melting

:39:39.:39:44.

icecap has put as much heat into the system as all the C067892 we

:39:45.:39:48.

have generated at that time. If the ice continues to decline at the

:39:48.:39:52.

current rate, it could play a bigger role than greenhouse gases.

:39:52.:39:55.

Professored Wadhams suggests there are uncertainties, cloud cover over

:39:55.:39:59.

the Arctic could change, and help reflect back some of the sun's

:39:59.:40:04.

radiation. But then, another greenhouse gas, me tain, currently

:40:04.:40:09.

trapped in the Arctic methane, currently trapped in the Arctic,

:40:09.:40:13.

could be released and make matters worse. What does it mean for us?

:40:13.:40:16.

could end up with more of the kind of weather that deluged so much of

:40:16.:40:22.

June and July. As the ice melts, this pumps a lot of heat into the

:40:22.:40:26.

lower atmosphere. That has an important effect on the jetstream,

:40:26.:40:30.

and the storm track that impinges on Europe, and changes the weather

:40:31.:40:36.

time scales. Some studies suggest there is increased wet summers over

:40:36.:40:40.

the UK as the ice melts. Other suggests the winter weather could

:40:40.:40:46.

be more snowy and cold, due to the ice decline. It all raises

:40:47.:40:50.

questions, for both sides of the debate about how best to respond to

:40:50.:40:55.

the changing climate. Do we need another new Manhatten project,

:40:55.:40:59.

ambitious engineering skeefpls, such as mirrors in space, or

:40:59.:41:04.

artificial seeding of clouds to keep the panel cool. Does it

:41:04.:41:10.

reinforce calls to save the Arctic, by cutting carbon emissions.

:41:11.:41:15.

The very question we want to discuss with Natalie Bennett, the

:41:15.:41:20.

new leader of the Green Party, and Peter Lilley, who has written a

:41:20.:41:24.

robust rebuttal on the stern committee findings. If that

:41:24.:41:29.

analysis is correct, about what has happened to the Arctic, and what

:41:29.:41:32.

the consequence is. There is precious little point in making any

:41:32.:41:36.

of the adjustments to our lifestyle that you in the Green Party seem to

:41:36.:41:42.

be suggesting? Not at all. We can still make a big impact in cutting

:41:42.:41:46.

carbon emissions. And we can also act in ways that make society

:41:46.:41:50.

better and stronger. We can invest in the future of our society, we

:41:50.:41:54.

must do it now. We just saw the figures in terms of the ice melt,

:41:54.:42:00.

we need to act and now. If the effect of the melting icecap, or

:42:00.:42:05.

melted icecap, is, as is suggested, that will make dam

:42:05.:42:13.

Damn all difference? -- damn all difference? Let's wait, we want to

:42:13.:42:17.

bring industries and farming back to Britain. That is entirely

:42:17.:42:22.

another point to climate change? need to shorten the supply chain to

:42:22.:42:26.

use less fossil fuels, so no carbon emissions. If the damage is already

:42:26.:42:30.

done, what is the point? We can reduce the further damage if we act

:42:30.:42:35.

now and immediate low. We need to do that. I was told to come on the

:42:35.:42:41.

programme and not discuss the science, to take the UN inter-

:42:41.:42:44.

governmental panel on climate change assessment as a correct pro-

:42:44.:42:48.

jex on what the likely trends were going to be -- projection on what

:42:48.:42:52.

the likely trends were going to be. You presented something that

:42:52.:42:56.

purports to be new evidence, which contains something new, it is not

:42:57.:43:01.

peer reviewed by a well known alarmist, and bun come, compared

:43:01.:43:09.

with the IPCC. The IPCC's prediction is this they say sea ice

:43:09.:43:14.

is predicted to shrink in the Arctic and Antarctic, and in all

:43:14.:43:18.

scenario, in some projections, the late summer ice disappears almost

:43:18.:43:22.

entirely by the latter part of the 21st century. They present a graph

:43:22.:43:27.

of all the different projections, none of them shows it melting

:43:27.:43:33.

before the year 2070, on a regular basis in the summer. It used to

:43:33.:43:41.

melt in other times n the 1930s it was warmer in the Antarctic. We

:43:41.:43:50.

have a contentious piece of filming. It is the BBC's policy, not to

:43:50.:43:55.

broadcast anyone who thinks the IPCC is excessive. You do think

:43:55.:44:00.

climate change is happening? I do, I want to work on the IPCC science,

:44:00.:44:06.

not something concocted by the BBC, in an alarmist fashion, which is

:44:06.:44:10.

not peer reviewed. We're not sufficiently co-ordinated to manage

:44:10.:44:17.

to concoct something like that? did, it just had. It was a report

:44:17.:44:22.

printed by the science editor, who -- presented by a science editor

:44:22.:44:24.

who interviewed someone who probably knows more than three of

:44:24.:44:29.

us. You know better than him? know what the IPCC says, and I

:44:29.:44:32.

think their assessment of the science is better than Professor

:44:32.:44:36.

Wadhams, who is a well known alarmist. We know that consistently,

:44:36.:44:43.

all of the indicators of climate change, or global warning, have

:44:43.:44:47.

moved much faster than scientists predicted. Everything has been at

:44:47.:44:51.

the upper end of projection, or on the projections. The fact is,

:44:51.:44:57.

really, Mr Lilley, what you represent, are the last throws of a

:44:57.:45:04.

dying argument. The -- gros of a dying argument. The geological

:45:04.:45:08.

Association of America, last year, entitled its conference, as being

:45:08.:45:15.

about the anthropist scene, we have created a new geological era.

:45:15.:45:21.

is no dispute about the two of you with weather anything is change

:45:21.:45:26.

anything the climate. What needs to be done or what can be done?

:45:26.:45:30.

think we need to project forward, what is likely to happen, on the

:45:30.:45:34.

basis of the best scientific evidence. And the IPCC provides

:45:34.:45:39.

that, not so much BBC person, a bit like. That then work out the

:45:39.:45:43.

economics, and only do things where the costs are less than the benefit.

:45:43.:45:49.

That is what we ought to be doing. I have assessed the Stern Report,

:45:49.:45:53.

and looked at that, it says even on the worst scenario that depict, if

:45:53.:45:58.

we take the action that he proposes, the costs will exceed the benefits

:45:58.:46:01.

for the first century. We are talking of doing something where

:46:01.:46:05.

any returns are going to accrue to people more than a century hence.

:46:06.:46:11.

Should we be going that, the Green Party may think so. Do you want us

:46:11.:46:15.

all to stop flying in the Green Party now? No, we don't want you to

:46:15.:46:21.

start crying. That is not what Stern proposes,

:46:21.:46:26.

let as be sensible, you are being unfair to the Green Party. What we

:46:26.:46:32.

would like to do is relocalise our industries, bring farming back into

:46:32.:46:37.

the UK. Stop flying peas from Peru and beans from Kenya. We want jobs,

:46:37.:46:41.

we want to bring industries back into the UK. All very much positive

:46:41.:46:46.

for the UK, and are good to reducing the carbon emissions at

:46:46.:46:50.

the same time. We can insulate people's homes, so people have

:46:50.:46:57.

warmer and more comfortable homes and and lower fuel bills. You think

:46:57.:47:01.

its benefits way outweigh the costs? We can bring a more healthy

:47:01.:47:06.

life. Timing is key here? Let's look at the situation of the green

:47:06.:47:09.

business. The green economy now accounts for about 9% of the

:47:10.:47:14.

British economy. That is about the same as the finance industries. 5%

:47:14.:47:17.

growth rate every year, year on year. A third of the growth in the

:47:17.:47:23.

UK, last year, came from the green industries. What do you say to

:47:23.:47:30.

that? Let's, if we spend lots on supsidies, we will get a growth in

:47:30.:47:33.

those subsidised industries, at the expense ift other countries paying

:47:33.:47:38.

taxes. If you spent a lot of money building wind turbines, you will

:47:38.:47:43.

get employment in erecting them. You will get less employment in

:47:43.:47:48.

erecting gas turbines that are more efficient, because you are not

:47:48.:47:54.

producing those. Let's leave it there. I do want to resent the idea

:47:54.:48:00.

we should impoverish the people of keenia and Peru, by stopping

:48:00.:48:05.

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

Why is there so much child poverty in working families? Economist Larry Summers speaks.

New evidence of melting Arctic ice.


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