:00:13. > :00:17.Tonight, Greece gets a pat on the back from Germany's Chancellor
:00:17. > :00:21.Angela Merkel, fork knuckling down to austerity. With more unrest on
:00:21. > :00:26.the streets and the IMF forecasting a further downgrading in global
:00:26. > :00:32.growth, is austerity still the answer?
:00:32. > :00:38.The IFM now thinks it totally underestimated the impact of
:00:38. > :00:42.austerity growth. Greece's former Finance Minister is here. The
:00:42. > :00:46.Conservative Party Conference cheers plans to make it legally
:00:46. > :00:51.easier to have a go at burglar Bill. Will changing the law have any
:00:51. > :00:54.practical effect. We hear from the police minister.
:00:54. > :00:59.The biggest defence and Aerospace merger is due to be decided
:00:59. > :01:03.tomorrow. BAe and EADS could create a giant to rival Boeing. But at
:01:03. > :01:09.what cost to our relationship with America. If you introduce European
:01:09. > :01:19.Governments into that equation as well, American receipt since to
:01:19. > :01:23.share intellectual -- receipt at this since to share intellectual
:01:23. > :01:33.intelligence will be there. So many people have died in Syria because
:01:33. > :01:38.
:01:39. > :01:43.of it. Because of terrorism! In ancient myths Sisyphus was
:01:43. > :01:51.punished by the Gods, if would roll a boulder up a hill and when he got
:01:51. > :01:54.to the top he would start again. And The person many Greeks blame
:01:54. > :01:59.for the cuts in their living standards, German's Chancellor,
:01:59. > :02:05.Angela Merkel, when she arrived in Athens today, she was greeted with
:02:05. > :02:07.protests and hostility on the streets. The advise Tim came as the
:02:08. > :02:12.International Monetary Fund published figures to suggest that
:02:12. > :02:15.it may not just be the Greeks rolling a stone up a hill to no
:02:15. > :02:19.effect. What is happening? They have put
:02:19. > :02:23.out a statement saying the eurozone is the cause of acute instability
:02:23. > :02:26.is the cause of acute instability in the world. We knew that. A few
:02:26. > :02:30.hours ago they issued a forecast for the world economy, which we
:02:30. > :02:33.will see as a turning point in attitudes. There is a growth
:02:33. > :02:38.downgrade across the board they have forecast. In this country we
:02:38. > :02:40.are going to say 0.4% shrinkage of the economy. We have suffered the
:02:40. > :02:45.biggest downgrade in growth projections for any major economy.
:02:45. > :02:47.But the IMF is also starting to basically put it about in politics,
:02:47. > :02:51.it is saying to the British Government, you have to start
:02:51. > :02:58.thinking about a plan B, abandoning your debt and deficit targets, if
:02:58. > :03:02.things don't get any better than this. It said outright to the
:03:02. > :03:07.American Government, that its planned, across the board cuts,
:03:07. > :03:11.planned for next year, must be removed, or they will tank the
:03:11. > :03:13.American economy, and possibly the world's. It is very political.
:03:13. > :03:18.Especially with the American elections and implicit blame on
:03:18. > :03:22.Congress. In simple terms, is this the high priest of austerity, the
:03:23. > :03:25.IMF, saying it is not working? have just decided that their own
:03:25. > :03:29.economics have been wrong for several years, that their maths are
:03:29. > :03:37.wrong. Now, what it is about is how you calculate the impact of tax
:03:37. > :03:42.rises and spending cuts, on growth. These are consult mult pliers. They
:03:42. > :03:49.thought for every 1% of austerity you do, you lose about half a per
:03:49. > :03:52.cent of growth. That is the British Government's methodology for
:03:52. > :03:56.departmental spending. But they have said tonight it is more like
:03:56. > :03:59.1.7%. That is not just a little bit more, it is in the opposite
:03:59. > :04:03.direction. Instead of minimising the impact of austerity, as a
:04:03. > :04:08.normal economy would, the current economic conditions aream plifying
:04:08. > :04:13.it in a way they didn't --am plifying it in the way they didn't
:04:13. > :04:16.think. They said you do austerity and you get growth, they now
:04:16. > :04:21.realise you don't get growth and you can get a death spiral. There
:04:21. > :04:25.is no country more in the grip of that than Greece. If the IMF
:04:25. > :04:29.manages to change attitudes and its own attitudes, as a player in
:04:29. > :04:39.Greece, there will be nobody more pleased than those who had to cope
:04:39. > :04:43.with what we are about to show new Greece. Angela Merkel arrived, she
:04:43. > :04:53.said, to support Greece, to support its progress on reform and
:04:53. > :04:54.
:04:54. > :04:58.austerity. She did not find much support on the streets of Athens.
:04:58. > :05:08.7,000 riot police were deployed, all demonstrations banned, the
:05:08. > :05:17.
:05:17. > :05:22.square outside parliament cleared in the same old way. The Greek
:05:22. > :05:26.Prime Minister said this weekend his country was facing a collapse,
:05:26. > :05:29.democracy, he said, faces its greatest challenge, his coalition
:05:29. > :05:34.had pledged to renegotiate the bail out deal, with softer conditions,
:05:34. > :05:37.and more time to balance the books. But Mrs Merkel could offer none of
:05:37. > :05:41.that. TRANSLATION: Despite the fact this is a difficult path, I think
:05:41. > :05:46.it is going to prove worthwhile for Greece, for if you would not attend
:05:46. > :05:50.to solving the problems now, they would recur at a later point in
:05:50. > :05:53.time in a more dramatic way. many Greek, even away from the
:05:53. > :05:59.trouble, it is dramatic already. 25% of them have had to join the
:05:59. > :06:03.dole queues, and since the crisis, the economy has shrunk by 23%. A
:06:03. > :06:11.country that was once peaceful and prosperous, is just depressed.
:06:11. > :06:14.Greece is now going through a humanitarian catastrophe. The
:06:14. > :06:19.social fabric of the country's is decaying, and may collapse. With
:06:19. > :06:24.the huge number of homeless in the streets, with people shooting up,
:06:24. > :06:29.with people looking into rubbish bins to get food and so on. The
:06:29. > :06:34.place is collapsing. Two years ago, the IMF predicted that, despite the
:06:34. > :06:40.cuts and tax rises, the Greek economy would now be growing, at 1%
:06:40. > :06:45.a year. It is now predicted to shrink by 6% this year. Its debt
:06:45. > :06:50.looks set to reach 171% of GDP by Christmas. And the EU, yesterday,
:06:50. > :06:56.said Greece has until the 18th of October to implement a new round of
:06:56. > :06:59.cuts, privatisations and reforms, only then will the 31 billion euro
:06:59. > :07:03.bail out payment be repleased. problem, of course, if the money
:07:03. > :07:06.doesn't come and there is no change in conditions, it is, first of all,
:07:06. > :07:08.that everyone will get completely disillusioned with the Government
:07:08. > :07:13.that promised they were going to achieve some negotiations in all
:07:13. > :07:16.this, and come back with some goodies to show to the Greek
:07:16. > :07:21.population that voted for them. The second is, they won't be able to
:07:21. > :07:25.carry on as they are at present. I predict that at that point, if you
:07:25. > :07:29.like, the things we have seen so far, in terms of protests, are
:07:29. > :07:34.nothing by comparison to what we will see then.
:07:34. > :07:42.But Greece's problem is no longer just economic. The far right party,
:07:42. > :07:47.Golden Dawn, is coming third in the polls at 12%. Here, the activists
:07:47. > :07:52.clash with police as they attempt to attack a migrant centre.
:07:52. > :07:56.Meanwhile, strikes are everywhere. It was hospitals today. And Syriza
:07:56. > :08:04.Party, the big far left party, that nearly won the last election, is
:08:04. > :08:10.drawing a stark conclusion. When austerity come, democracy goes.
:08:10. > :08:15.This is absolutely true in Greece. We have seen democracy
:08:15. > :08:22.deteriorating all these years, three consecutive years. They
:08:22. > :08:31.change the laws and when they don't change the law, they put the police
:08:31. > :08:38.to do their dirty jobs, or they allow their -- the new Nazi party
:08:38. > :08:43.to run the society. Today, the demonstrators brought in
:08:43. > :08:47.some distinctly non-Neo-Nazi uniforms in fancy dress to make the
:08:47. > :08:51.point. But worries about Greek democracy are widely shared. To be
:08:51. > :08:57.in the European Union, you have to be a democracy. When communist
:08:57. > :09:00.states wanted to join in the early 1990, they were shown the called
:09:00. > :09:06.Copenhagen criteria, stable institutions, guarnteeing democracy,
:09:06. > :09:10.the rule of law, human rights and the protection of my norts. There
:09:10. > :09:20.is now growing concern -- my norts, there is growing concern inside and
:09:20. > :09:22.
:09:22. > :09:25.out of Greece that the country itself may no longer meet them.
:09:25. > :09:29.military won't standby and see all this happen. It is interesting for
:09:29. > :09:33.me, the only way Greece can actually leave the EU is if it is
:09:33. > :09:37.no longer a democracy. I suspect if the rest of Europe doesn't help
:09:37. > :09:41.Greece, Greece will not be a democracy for long.
:09:41. > :09:46.Greece is approaching some kind of end game, if the IMF, which
:09:46. > :09:51.prescribed austerity, now says it should be taken in smaller doses,
:09:51. > :09:54.no-one will heave a greater sigh of relief, than those trying to hold
:09:55. > :09:59.this country together. George Papaconstantinou was the Finance
:09:59. > :10:03.Minister of Greece when this crisis began. Let's start with the IMF,
:10:04. > :10:07.first of all, what do you think is the impact going to be in Greece,
:10:07. > :10:14.what we have heard tonight, which is the suggestion that austerity is
:10:15. > :10:19.not working, simply not working? are in the fifth year of recession,
:10:19. > :10:26.basically, growth stopped in 2008, since then we have lost a quarter
:10:26. > :10:32.of GDP. And unemployment, as you reported, is about 23%, one in two
:10:32. > :10:35.young people are out of job. 50% of young people is out of a job,
:10:35. > :10:40.austerity is not working for you? It is clear that austerity by
:10:40. > :10:45.itself cannot work. We are now beyond a point where you need to
:10:45. > :10:49.find a way to get growth going again. Whatever you do, on
:10:49. > :10:52.expenditures and getting revenues up. If your economy isn't growing,
:10:52. > :10:56.it is a self-defeating process. That is where we are at the moment.
:10:56. > :11:00.If that is where you are at the moment. Do you think Greek people
:11:00. > :11:03.feel you are at the sharp end of an experiment going completely wrong?
:11:03. > :11:07.I don't think there is any high mathematics behind the kind of
:11:07. > :11:11.formulas that the IMF is using. It depends on a number of factors. For
:11:11. > :11:15.example, are other countries growing, so you can grow by
:11:15. > :11:18.exporting toe them? Is the confidence so the investors can
:11:19. > :11:26.come into the country? At the moment we have not been able to get
:11:26. > :11:30.rid of what people call a currency risk, people are afraid Greece will
:11:30. > :11:34.exit the eurozone, so investors and assets out there are not coming in.
:11:34. > :11:38.As long as we don't turn that, whatever we do on austerity won't
:11:38. > :11:42.be enough. You have got to negotiate for the next tranche of
:11:42. > :11:46.bail out money, which means negotiating for the next round of
:11:46. > :11:49.austerity. I mean, the implication of that IMF report, one would have
:11:49. > :11:53.thought, and you say the mathematics are not that difficult,
:11:53. > :11:58.would be that the appetite for more austerity in Greece is absolutely
:11:58. > :12:05.zero? Yes, because you have had wages being reduced by 40%, you
:12:05. > :12:09.have had huge increases in taxation, and you have everyone hurting.
:12:09. > :12:14.There is no question that, there has been an agreement, and we have
:12:14. > :12:19.to pass these measures, but that is the first step into changing the
:12:19. > :12:22.environment, whereby you then tell the European Parliament and the IMF
:12:22. > :12:25.that we have done our bit. You need to help with debt sustainability,
:12:25. > :12:29.there is a number of ways to do that, for example the money that
:12:29. > :12:34.goes into the banks, the recapitalisation of the banks does
:12:34. > :12:37.not count towards the national debt. The official sector agrees to also
:12:37. > :12:41.participate, and some how get the level of the debt down. There by
:12:41. > :12:44.you change the environment outside. So that the outside wall, the
:12:44. > :12:49.investors -- outside world, the investors see you are out of the
:12:49. > :12:57.hole you are in. Do you worry as a number of people in the film said,
:12:57. > :13:02.that Greece's democracy itself is so fragile, the idea of the Neo-
:13:02. > :13:06.Nazi party, and the far left, making a stance saying the
:13:06. > :13:09.traditional parties haven't handled this, including your own party?
:13:10. > :13:12.don't needing to to the extreme of what we have heard, that when
:13:12. > :13:15.austerity comes in, democracy leaves. There is no question when
:13:15. > :13:19.you started off with the kind of deficits and external deficits we
:13:19. > :13:23.had, and you tried to put these into some kind of control, it hurts
:13:23. > :13:28.everyone, it hurts everyone very badly extremes find a fertile
:13:28. > :13:31.ground, and yes, indeed, at the moment, in the Neo-Nazi parties
:13:31. > :13:37.polling third, that is extremely dangerous. I don't think we are
:13:37. > :13:43.close to a coup, as some people seem to believe here. Because the
:13:43. > :13:45.military wouldn't want to takeover that kind of mess? We do have a
:13:45. > :13:50.stable democracy, but we are very close to the kind of social unrest,
:13:50. > :13:54.after which you don't know where it will go. And whoever is looking at
:13:54. > :13:59.Greece, at the whole problem, cannot simply look at where weather
:13:59. > :14:03.the targets are met. Most of the tarts have met. We have done more,
:14:04. > :14:07.in terms of austerity, than any other country, in the modern rather,
:14:07. > :14:10.in a short time. We have to go beyond that, in that context we
:14:10. > :14:13.have to take account of what is happening to the democratic process
:14:13. > :14:16.and the social tensions in the country. Forgetting the politics of
:14:16. > :14:20.it, as a Greek man, are you really worried about the future of your
:14:20. > :14:23.country right now? I'm worried because I see young people that
:14:24. > :14:26.think there is no future. I'm worried because I see
:14:26. > :14:30.disillusionment, and I'm worried because people don't see the end of
:14:31. > :14:34.the tunnel. It is a shame, this country has tremendous potential,
:14:34. > :14:37.great people, fantastic natural resources. Its geopolitical place
:14:37. > :14:41.in the world is excellent for growth and prosperity. It needs to
:14:41. > :14:48.be given a chance. It has proven over the last two years that it is
:14:48. > :14:51.willing to do what it take, even though it hurts. Now, it was, as
:14:51. > :14:54.one observer suggested, tough- talking Tuesday, at the
:14:54. > :15:00.Conservative Party Conference today. Everything from immigration and
:15:00. > :15:04.Europe to burglars and other law and order issue, the Conservative
:15:04. > :15:11.leadership were pretty conservative. Victims of anti-social behaviour
:15:11. > :15:15.may in future be able to choose suitable punishments for tormenters.
:15:15. > :15:19.Homeowners may find it less legally problematic if they tackle burglars
:15:19. > :15:22.in their own homes. This all heads up for the Prime Minister's big
:15:22. > :15:27.speech tomorrow. We have had some sight of the Prime
:15:27. > :15:30.Minister's speech tomorrow. Obvious low it is all subject to rather
:15:30. > :15:33.tedious embargos, what we will be talking about tomorrow evening is,
:15:33. > :15:37.firstly, his speech will have a message that the coalition is the
:15:37. > :15:40.only group in town who are determined about bringing down the
:15:40. > :15:44.deficit. That's pose supposed to highlight the fact that last week
:15:44. > :15:48.the lead -- that's supposed to highlight the fact that last week
:15:48. > :15:51.the leader of the opposition gave a speech and never mentioned the
:15:51. > :15:54.deficit once. It is supposed to highlight the difference in
:15:54. > :15:57.seriousness and the coalition is the only group to do anything about
:15:57. > :16:01.it. What we will be talking about tomorrow, I think, is this is a
:16:01. > :16:04.speech different in tone than many others have come before, it is very
:16:04. > :16:07.personal. It is the seventh speech that the Prime Minister, as was
:16:07. > :16:10.leader of the opposition, and for two years as Prime Minister has
:16:11. > :16:14.made. It does feel like there is elements of his background we are
:16:14. > :16:17.learning for the first time, certainly in speech form. We will
:16:17. > :16:21.discuss that tomorrow evening. We will also discuss what they won't
:16:21. > :16:26.talk about in the speech, which is what we call in politics, the
:16:26. > :16:28.process of everything, which is why they are reaching out in the way
:16:28. > :16:33.they are. They have been in Government for two years and they
:16:33. > :16:37.are shifting the message, it is more about the strivers, what they
:16:37. > :16:40.call blue collar Conservatism, it is about those who want an emphasis
:16:40. > :16:44.on crime, welfare and immigration, it is not to say the party is going
:16:44. > :16:47.right-wing, many will say that, it is a central concern for lots out
:16:47. > :16:50.there, it is saying, and perhaps in the past the Government hasn't
:16:50. > :16:56.talked about it enough. We have done what the Conservative managers
:16:56. > :17:01.don't really want us to do, which is to look at the methodology and
:17:01. > :17:06.process behind it, and the strivers and blue collar Conservatism. In
:17:06. > :17:09.the first two years of the coalition this chap, Burglar Bill
:17:09. > :17:12.might have thought he was operate anything a benign climate. If you
:17:12. > :17:15.found him on the other side of your front door, you might have felt
:17:15. > :17:21.helpless. When we woke up in Birmingham this morning, we had
:17:21. > :17:25.gone back to basics, batter a burglar, the Sun announced.
:17:25. > :17:28.Householders acting instinctively and honestly in self-defence, are
:17:28. > :17:35.victims not criminals. They should be treated that way.
:17:35. > :17:41.APPLAUSE That is why we are going to deal
:17:41. > :17:47.with this issue once and for all. I will shortly bring forward a change
:17:47. > :17:52.to the law. It will mean that even if a householder, faced with that
:17:52. > :17:56.terrifying situation, uses force, that in the cold light of day might
:17:56. > :18:03.seem over the top, unless their response is grossly
:18:03. > :18:07.disproportionate, the law will be on their side. Except the first
:18:07. > :18:10.figures available show that from 1990 to 2005 there were 11
:18:10. > :18:14.prosecutions against people defending their property. Of those
:18:14. > :18:18.only seven were domestic burglaries. Grayling's move poses philosophical
:18:18. > :18:23.questions, but on the numbers alone, it is clearly a signal, not a
:18:23. > :18:29.seismic shift, for those involved in the every day fight against
:18:29. > :18:34.crime. Battering burglar, wap loling the welfare budget,
:18:34. > :18:36.emulating the immigration, lots of policy speeches, not that much
:18:36. > :18:40.substance right now. The Conservatives are trying to subtley
:18:40. > :18:44.move on to an agenda more about the every day concerns of most people's
:18:44. > :18:49.lives. Like life on the street like this. In the past people used to
:18:49. > :18:53.talk about whether the party would go off to the right or TUC into the
:18:53. > :18:56.centre. Actually, the -- tuck into the centre. Actually the public's
:18:56. > :18:59.views on crime are very tough, same on welfare and migration. The
:18:59. > :19:02.question for the Conservatives in terms of get to go the centre, is
:19:02. > :19:05.about what they are going to do for people on low incomes, what they
:19:05. > :19:08.will do about things like jobs. That is the balance that the party
:19:08. > :19:11.is trying to strike. They know a lot of their positions, like being
:19:11. > :19:15.tough on crime, are very popular. They have been trying to balance it
:19:15. > :19:19.out, and talking about the strivers, talking about people working hard
:19:19. > :19:22.on low incomes. That is where they needing to to next. The challenge
:19:22. > :19:26.for them, against the background to do things different, are big enough
:19:26. > :19:30.things that cut through in the public and they notice them. In her
:19:30. > :19:33.speech today, Theresa May, the Home Secretary, for the first time, made
:19:33. > :19:39.explicit the link between bringing down immigration levels and the
:19:39. > :19:46.positive effect that would have on people's wages. By the way, Labour
:19:46. > :19:51.knew exactly what they were doing. According to the John Cruddas, Ed
:19:51. > :19:56.Miliband's policy chief, Labour were using migration to introduce a
:19:56. > :20:02.covert 21st century incomes policy. That's right, Labour, the party of
:20:02. > :20:08.the working man and woman, admit that they deliberately used
:20:08. > :20:13.immigration to keep down British wages. So we will reduce and
:20:13. > :20:18.control immigration. Though their means for doing so controversial
:20:18. > :20:22.and not proven to work yet. This is why Boris might be more than just a
:20:22. > :20:25.pretty face. As the Mayor of London arrived to titilate conference, it
:20:25. > :20:29.was his article yesterday, calling for much more house building, that
:20:29. > :20:33.resonated with senior Conservatives. The bore business bandwagon may
:20:34. > :20:37.have rolled back to -- Boris bandwagon may have rolled back to
:20:38. > :20:41.London, but his threat remains. Those close to Cameron believe that
:20:41. > :20:48.unless they tackle house building they will struggle with strivers,
:20:48. > :20:51.and Boris Johnson knows that. Last week Ed Miliband laid claim to the
:20:51. > :20:55.one-nation Disraeli mantle, today Conservatives are grumbling about
:20:55. > :20:59.that. They say Miliband can't be Disraeli's disciple, because he
:20:59. > :21:02.took on the vests interests in Victorian Britain, and Miliband's
:21:02. > :21:06.interests are unions and public sector workers, until he knows he
:21:06. > :21:10.will face them down, he can't claim to be the heir to Disraeli. David
:21:10. > :21:13.Cameron's claim to be a modern-day Disraeli is also in the balance.
:21:13. > :21:17.Disraeli tried to break down the boundaries between the haves and
:21:17. > :21:22.have nots in Victorian Britain, for David Cameron today, doing exactly
:21:22. > :21:25.like, pumping up the chances of the have-nots is in question. That is
:21:25. > :21:30.why they are talking in this conference about the strivers.
:21:30. > :21:35.start of David Cameron's modernisation of the Tories, people
:21:35. > :21:38.would have said they were backward looking, the polls said he didn't
:21:38. > :21:43.like migrants and gay people, he has dealt with those challenges,
:21:43. > :21:46.but there is a lot of negative things he has inherited from the
:21:46. > :21:49.past, and one is that it is a party for the rich and it doesn't care
:21:49. > :21:53.about people working on low income. That is why they are talking about
:21:53. > :21:56.the strivers. They have dealt with one set of challenges, but they
:21:56. > :21:59.have such baggage from the fast they have to deal with that. When
:21:59. > :22:03.they return to London the Conservatives' task is tough. If
:22:03. > :22:08.catching burglars is so central to the new no-nonsense Tory offer,
:22:08. > :22:12.many strategists and non- strategists alike, regard it to be
:22:12. > :22:17.monumentally unhelpful, that one of their number called policemen
:22:17. > :22:21."plebs", even Burglar Bill would stop there, he has become a striver
:22:21. > :22:27.at the end of his story. We have the police minister joining
:22:27. > :22:33.us from the conference in Birmingham, Damian Green, in terms
:22:33. > :22:37.of homeowners and burglars you have aprepared to help everyone, if
:22:37. > :22:40.there is only one problem every two years? There may not be many
:22:40. > :22:44.prosecutions, but a lot more people may have been arrested and never
:22:44. > :22:49.brought to proskueing. Each one of these prosecutions does give rise
:22:49. > :22:53.to a sense of huge unfairness for people. These people are victims of
:22:53. > :22:56.crime and then they become criminalised. What Chris Grayling
:22:56. > :23:00.announced today was clearly designed to shift the balance in
:23:00. > :23:04.favour of the householder, and against the intruder. Because this
:23:04. > :23:08.is not people taking a decision calmly, these will be people in the
:23:08. > :23:13.heat of the moment, they will be frightened, they will certainly be
:23:13. > :23:16.angry. And so what we are saying is you will only be doing something
:23:16. > :23:19.illegal if it is grossly disproportionate. I think that does
:23:19. > :23:23.move the balance sensibly. The Home Secretary, Theresa May, said today
:23:23. > :23:26.that you are the party of law and order. But, surely you would expect
:23:26. > :23:30.the party of law and order to have reasonable relations with the
:23:30. > :23:34.police. And relations between you and the police right now are
:23:34. > :23:40.appalling? Well, I have just done a number of fringe meetings today,
:23:40. > :23:44.including one this evening put on by the Police Federation, with ACPO,
:23:44. > :23:49.chief police officers organisation there, and the superintendant. We
:23:49. > :23:54.all agreed that we are doing one of the biggest public sector reforms
:23:54. > :23:57.ever, certainly one of the biggest reforms to the police ever. Cutting
:23:57. > :24:00.by 20%? To welfare and education. We are doing it against the
:24:01. > :24:04.background of a very tough financial crisis which we inherited,
:24:04. > :24:07.very bad public spending numbers. Of course there are stresses and
:24:08. > :24:12.strains. These are absolutely the necessary reforms we need to make
:24:12. > :24:16.sure that the police can become ever more professional, and can
:24:16. > :24:21.provide an ever-better service. The backdrop to all of this is crime is
:24:21. > :24:25.falling and victim satisfaction is rising. So, actually it is not
:24:25. > :24:28.unreasonable. That is because there is a lot more police on the streets
:24:28. > :24:32.than there will be. For example, the idea that Vic imits of anti-
:24:32. > :24:35.social behaviour should be allowed to choose -- victims of anti-social
:24:35. > :24:39.behaviour should be allowed to choose the punishments, Theresa May
:24:39. > :24:44.was talking about that. Isn't it to stop people becoming victims of
:24:44. > :24:47.crime, that is why people like bobbies on the beat? People like a
:24:47. > :24:52.lot of things, they like an attack on serious and organised crime,
:24:52. > :24:55.that is why we are setting up the National Crime Agency, to make us
:24:55. > :25:00.more effective against that. There are many ways in which you can
:25:00. > :25:03.release police to do the job we all want to see them doing, actually
:25:03. > :25:07.fighting crime. We have taken out millions of hours of form filling
:25:07. > :25:11.from the police. It is the equivalent of adding more than
:25:11. > :25:15.2,000 extra police on to the streets. So the way you organise
:25:15. > :25:19.the police is important. The way the police are run is important,
:25:19. > :25:21.that is why we have the elections next month for police and crime
:25:21. > :25:27.commissioners, so local people, for the first time, will have a say in
:25:27. > :25:33.how their local police force is run. Should we read what happened today
:25:33. > :25:43.as the end of the hug-a-hoodie period of the cabinet
:25:43. > :25:43.
:25:43. > :25:46.administration, and it is now back to "prison works" and other simple
:25:46. > :25:50.Conservative ideas? The appeal of the Conservative Party at its best
:25:50. > :25:55.is it chimes with the instinct of the British people. It is perfectly
:25:55. > :26:02.possible and politically coherent to care about the NHS and to care
:26:02. > :26:06.that immigration is high -- too high, to care about law and order
:26:06. > :26:10.and to worry that welfare should help people who want to help
:26:10. > :26:14.themselves, the strivers everyone is talking about here this week.
:26:14. > :26:18.That's a very traditional set of Conservative values, which people
:26:18. > :26:22.can hold on the left or the right- wing of the party. Just a final
:26:22. > :26:25.thought. Did it help you and your relations with the police that
:26:25. > :26:29.Andrew Mitchell didn't turn up at the conference today? Andrew, what
:26:29. > :26:33.he did was wrong, he has apologised for it. The police officer he had
:26:33. > :26:37.the row with has accepted the apology, everyone has moved on from
:26:37. > :26:41.there. Indeed the police representatives at the meetings I
:26:41. > :26:48.was at today were saying that. There were big important debates to
:26:48. > :26:53.be had about the future of policing. We have all moved on from that.
:26:53. > :26:57.the two high-tech giants BAe and EADS, should, tomorrow, be on the
:26:57. > :27:00.way to becoming a unified European defence and Aerospace giant, but
:27:00. > :27:03.there are reports that the deal is on the brink of collapse, because
:27:03. > :27:08.of concerns from the French and German Governments about what the
:27:08. > :27:14.deal means for them. Supporters of the merger say BAe will help win
:27:14. > :27:19.sales in America, while EADS concentration on passenger
:27:19. > :27:29.airliners compliments BAe as defence work. Opponent of the plan
:27:29. > :27:33.worry that Britain is, yet again, selling off the family silver.
:27:33. > :27:38.In the hey day, this was the cutting edge of aircraft
:27:38. > :27:41.manufacturing, 18,500 planes were builter, now broke lands is a
:27:41. > :27:45.museum. Perhaps -- Brooklands is a museum, perhaps this monument to
:27:45. > :27:49.the past could be a warning to the future. If you want to see the
:27:49. > :27:55.impact of megaindustrial mergers, come to the Brooklands Museum in
:27:55. > :28:00.Surrey. This place used to make DC- 10s, Harrier jump jets and Concorde.
:28:00. > :28:05.When they merged with BAC to form British Aerospace, this place
:28:05. > :28:08.became surplus to requirements. It is almost inconceivable that BAe
:28:08. > :28:12.systems and EADS, will keep factories open in all four
:28:12. > :28:17.countries, so the political horse trading begins. At the moment there
:28:17. > :28:23.are four factories around Europe where Typhoon aircraft are finally
:28:23. > :28:28.assembled and flight tested. The idea you can have duplication
:28:28. > :28:31.across Europe in the manufacturing of the aircraft and the major sub
:28:31. > :28:37.systems, that must be a thing of the past. In Brussels to underline
:28:37. > :28:41.the importance of the tie-up, defence ministers from Britain,
:28:41. > :28:45.Germany and the US met at the summit. Britain's Defence Secretary
:28:45. > :28:48.added to the air of expectancy? companies now have a very clear
:28:48. > :28:52.understanding of the positions and the red lines of the Governments
:28:52. > :28:56.involved. I understand that the companies have gone into board
:28:56. > :29:00.meetings now, that started half an hour or so ago, they will go on
:29:00. > :29:04.possibly for some hours. They will make the decision whether they
:29:04. > :29:10.think that the parties are close enough together to warrant seeking
:29:10. > :29:17.an extension of time from the Stock Exchange. At stake is potentially a
:29:17. > :29:21.$45 billion defensive Aerospace giant, building some of the
:29:21. > :29:25.politically most sensitive kit in the world. Mostly made by BAe
:29:25. > :29:30.Systems, it is said to be the junior partner to EADS, mostly
:29:30. > :29:35.French and German. EADS owns Airbus, the largest commercial plane maker
:29:35. > :29:40.in the world. Just as civil aviation orders are bloom booming.
:29:40. > :29:48.The Object is to bring together the different skills countries have to
:29:48. > :29:54.build a better product. The other advantage is build a European
:29:54. > :29:59.company to compete with Boeing. It is the role of governments that
:29:59. > :30:05.intrigues most. The French Government owns 15% of EADS and has
:30:05. > :30:10.strong input into decisions. Daimler owns 15% and the German
:30:10. > :30:20.Government has clout there. The UK Government will block any takeover
:30:20. > :30:22.
:30:22. > :30:30.of BAe systems using its single, But the real king maker or breaker
:30:30. > :30:34.is the American Government. At over $700 billion a year, US defence
:30:34. > :30:38.spending dwarfs every other country, and they are careful about who
:30:38. > :30:42.building their aircraft and submarines. BAe does 50% of its
:30:42. > :30:45.business with the Pentagon, only because its American division is
:30:45. > :30:47.almost fully hived off from the European business. We have
:30:47. > :30:51.developed, over time, a good relationship with the United States.
:30:51. > :30:56.There will always be some issues of intellectual property, the
:30:56. > :31:00.relationship the UK has with the United States minimises those
:31:00. > :31:04.difficulty. If you introduce -- difficulties, if you introduce
:31:04. > :31:11.European Governments into that equation as well, the Americans
:31:11. > :31:17.will be more reticent to share information. Shareholders are
:31:17. > :31:20.decidedly lukewarm, Invesco is concerned about the level of state
:31:20. > :31:23.shareholding in the combined group will result in governance
:31:23. > :31:27.arrangements driven more by political considerations than
:31:27. > :31:33.shareholder value creation. Not everyone is down on the deal. The
:31:33. > :31:36.respective chief executives, Tom Enders end and Ian King would be
:31:36. > :31:41.big financial winners. We were told the managers would be the only
:31:41. > :31:46.winners. Normally in mergers you get winners and losers, and you get
:31:46. > :31:50.winners and winsers, this is a unique deal with everybody loses.
:31:50. > :31:53.Except the management? If the tie-up collapses then senior
:31:53. > :31:59.management in both companies may have questions to answer F it does
:31:59. > :32:05.proceed, it will be in it the teeth of most major shareholders. All
:32:05. > :32:08.stakeholders will want to avoid the companies ending up in the museum
:32:08. > :32:18.of formerly great industrial players.
:32:18. > :32:20.
:32:20. > :32:23.My guests are with me now. I wonder what you are hearing, does
:32:23. > :32:27.it sound as if the deal is on the brink of collapse and can't be done
:32:27. > :32:32.by tomorrow? I very much doubt that it could actually be done by
:32:33. > :32:38.tomorrow. We will have to wait and see whether the companies deciding
:32:38. > :32:43.to for a two-week extension under the UK takeover panel rules, or,
:32:43. > :32:47.indeed, call it a day. The jury is out on it. They are probably still
:32:47. > :32:50.discussing the facts in front of them, as we speak. They will
:32:50. > :32:56.announce one way or the other tomorrow. Why do you think that
:32:56. > :33:03.this dole is in the interests of Britain? I think we have to look
:33:03. > :33:06.forward. Here we have two very large and very large companies. One
:33:06. > :33:10.a global player in the defence industry, with many home markets,
:33:10. > :33:14.not just the UK, and one who is the largest commercial aircraft
:33:14. > :33:18.manufacturer in Europe. They want to come together, because they want
:33:18. > :33:22.to grow together on a level playing field, and compete with the best in
:33:22. > :33:26.the world. They are also looking at the future, in terms of the
:33:26. > :33:29.technology that they can create together. The investment that they
:33:29. > :33:32.can create together, and indeed the jobs and growth that will follow
:33:32. > :33:36.from that investment. This is locking long-term, this isn't a
:33:36. > :33:39.short-term decision, based on jobs or consolidation, this is two
:33:39. > :33:43.companies with very little overlap coming together, if they can.
:33:43. > :33:46.The advantages in the long-term for Britain are what you have just
:33:47. > :33:50.heard? I'm not sure they are those advantages. They are advantages for
:33:50. > :33:54.those firms, but there are bigger security issues at stake in this. I
:33:54. > :33:59.think absolutely the Americans will be very concerned by this. I think,
:33:59. > :34:04.for example, I signed an agreement with an Admiral about exchange of
:34:04. > :34:09.nuclear information for nuclear submarines, the next follow-on
:34:09. > :34:11.submarines who replace the Tridents, the Americans have brought forward
:34:11. > :34:15.a missile compartment that will be shared between the nations, they
:34:15. > :34:18.are not willing to do that with the French or the Germans. Our
:34:18. > :34:21.relationship with the Americans in defence terms is very important.
:34:22. > :34:24.Does it outweigh the long-term strategic planning for these two
:34:24. > :34:30.major corporations? It is interesting them talking about
:34:30. > :34:34.long-term strategic planning. The BA board sold 30% shares in Airbus
:34:34. > :34:37.six years ago. When I raised the question of why are you doing it, I
:34:37. > :34:40.was told I didn't understand, a sailor like me, they need money to
:34:40. > :34:45.buy firms in America and show we are separate from Europe, so the
:34:45. > :34:48.Americans will accept us there. Now, suddenly, six years later, they
:34:48. > :34:51.seem to have changed. I'm not so sure about the long-term views he
:34:51. > :34:56.might have. It is a simple fact, isn't it, that the Americans trust
:34:56. > :35:00.the British a bit, and don't trust the French and Germans at all. Idea
:35:00. > :35:05.of some kind of synergy is perhaps a bit pie in the sky? It is
:35:05. > :35:09.certainly true the Americans and British have a very strong
:35:09. > :35:14.relationship, but remember EADS has sold into the US helicopters, and
:35:14. > :35:18.it is building that relationship slowly. But your guest is
:35:18. > :35:22.absolutely right, that the political implications from the US
:35:22. > :35:26.have to be taken into consideration here. We don't know what those are,
:35:26. > :35:30.because they have kept very quiet, until there is a formal deal,
:35:30. > :35:34.actually put before them. It will be complicated. And it has to be
:35:34. > :35:38.settled. We do have to look forward, and Europe, in this case, will
:35:38. > :35:42.probably do a lot better by standing together. Remember, too,
:35:42. > :35:46.that the US, whilst they are our allies and friends, and we have
:35:46. > :35:52.done and continue to do a lot with them, have not necessarily given us
:35:52. > :35:57.the freedoms over here we would like in the UK. I have to say, also,
:35:57. > :36:01.the way the whole thing has been put together. Invesco, it is
:36:01. > :36:08.amazing, they are very good investors, they hardly had a talk
:36:08. > :36:11.with the chief executive. I think there was a 90-minute discussion
:36:11. > :36:17.with the CEO. It seems pushed together, only a number of us have
:36:17. > :36:19.come out of the wood work and said, hang on, there are real
:36:19. > :36:23.implications here, real implications about how it is put
:36:23. > :36:27.together. Real concerns by some of the shareholders, it does seem to
:36:27. > :36:32.have been rushed a bit. I think there is a sub plot as well, there
:36:32. > :36:35.are a lot of people in Whitehall, some politicians, like the Deputy
:36:35. > :36:39.Prime Minister, Clegg, who see European defence as the thing.
:36:39. > :36:43.Until European defence changes, I can tell you, that is not a defence.
:36:43. > :36:48.That will not defend you, and the Germans and French are about to
:36:48. > :36:52.stop buying military qipt, no wonder EADS are keen to get in the
:36:52. > :36:59.UK, because we don't spend enough on defence, but we spend something.
:36:59. > :37:02.The Americans still spend a lot. agree we don't spend enough on
:37:02. > :37:06.defence. The way ahead is affordability, the Government is
:37:06. > :37:10.forced into the position it is. It is not just here, it is in the US,
:37:10. > :37:14.Germany and France, all concern nations. We have to adapt and
:37:14. > :37:18.change to the new conditions in front of us. As far as Invesco is
:37:18. > :37:22.concerned, they are a shareholder today, they may not have been a
:37:22. > :37:27.shareholder yesterday. There is a long history of disagreements
:37:27. > :37:31.between Invesco and BAe Systems, let's not draw too many conclusions
:37:31. > :37:34.about the particular spat at the moment. They are entitled to a view.
:37:34. > :37:40.One of the complication in the Syrian conthribgt there are over
:37:40. > :37:44.the last 18 months, that is -- conflict over the last 18 months,
:37:44. > :37:49.that is however inconvenient it is for the opposition, Bashar al-Assad
:37:49. > :37:56.does have support among Syrians. Much of the western areas of Syria
:37:56. > :38:02.remains untouched by violence. It is the presidential ancestoral home
:38:02. > :38:08.of the President. Another day dawns along the
:38:08. > :38:13.Mediterranean. It starts slowly, peacefully here.
:38:13. > :38:20.The only fighting on this part of the Syrian coast is between friends
:38:20. > :38:25.on jetskis. Welcome to La Tachia, long a place of holiday for Syrians.
:38:25. > :38:28.Now they are coming here from embattled cities, in if search of
:38:28. > :38:38.refuge. There is an ease on the streets here you don't find in many
:38:38. > :38:39.
:38:39. > :38:44.places any more. I arranged to meet a group of young
:38:44. > :38:48.students from lackia, they come from mainly -- Latakia, they come
:38:48. > :38:52.from mainly religious and ethnic groups. There is no trouble around
:38:52. > :38:57.this table, the friends say they are one big family of the listen to
:38:57. > :39:03.them, it is hard to believe war is raging about an hour's drive away?
:39:03. > :39:08.Here is peaceful place. It is so fantastic this place, I like my
:39:08. > :39:18.town. What if they say to you, it is too dangerous to come to Syria?
:39:18. > :39:18.
:39:18. > :39:23.No, no. You can see in the streets, people shopping and playing and
:39:23. > :39:28.nothing. There is nothing happening, no problem here in Latakia, they
:39:28. > :39:37.say there is a problem like in Damascus, for example, it is not
:39:37. > :39:42.the whole of Damascus. One area, Aleppo, not the whole city.
:39:42. > :39:45.But this place isn't shut off from the rest of the country. When
:39:45. > :39:51.Syria's uprising began some 18 months ago, there were also
:39:51. > :39:55.protests here in the main square in Latakia. But they were forcefully
:39:55. > :40:00.put down. Aside from an occasional demonstration, or an explosion
:40:00. > :40:04.since then, this remains one of the most peaceful areas in all of Syria.
:40:04. > :40:10.The authorities are determined to keep it that way, because this
:40:10. > :40:14.region is too important to lose. The long shadow of the Al-Assad
:40:14. > :40:19.family falls across this region. It is not just their political
:40:19. > :40:24.stronghold, it is their ancestoral home. The heartland of their
:40:24. > :40:30.Alawite sect. Like the rest of Syria, this city is mixed. Here the
:40:30. > :40:40.Alawites are a large minority. This is the kind of demonstration they
:40:40. > :40:43.
:40:43. > :40:48.allow here. A pro-Al-Assad rally in the city centre. It is organised by
:40:48. > :40:58.a local youth group. They call themselves the Stand Firm
:40:58. > :41:01.
:41:01. > :41:05.Volunteers. Why do you support Bashar al-Assad? Because it is the
:41:05. > :41:09.President's world, a very good President in the world. Some say he
:41:09. > :41:13.should step down and lose power? The people who say that are
:41:13. > :41:18.terrorists. We don't believe that, he protects us, all people like
:41:18. > :41:26.Bashar al-Assad. So many people have died in Syria over the past 18
:41:26. > :41:30.months? Because of terrorism. That's what you often here, they
:41:30. > :41:35.defend the President, because he defends them.
:41:35. > :41:42.They brandish photographs of him, and his powerful brother, Maher,
:41:42. > :41:47.who commands the elite Republican Guard. In the governor's office,
:41:47. > :41:56.too, there is a photograph of President Assad and his late father,
:41:56. > :42:03.on every wall. Their Intelligence Services keep a close eye on
:42:03. > :42:08.everything here. Governor Suleiman Al-Nasser is the President's man in
:42:08. > :42:13.the county, I ask him about what's going on. TRANSLATION: The security
:42:13. > :42:17.here in Latakia is normal, there can be plots to harm the people of
:42:17. > :42:23.Latakia, and like in any country the Security Services will
:42:23. > :42:26.intervene to protect the regime and rule of law here. Drive into the
:42:26. > :42:32.mountains above Latakia, this is where people are defending the
:42:32. > :42:35.regime with their lives. These are Alawite lands, these poor villagers
:42:35. > :42:40.are providing foot soldiers in the war. There is a funeral almost
:42:40. > :42:48.every day here. But there is still powerful support for Al-Assad's
:42:48. > :42:55.rule. He's one of them. The Al- Assads are also buried in these
:42:55. > :43:00.hills. We were given rare access to their mausoleum in the town. A
:43:00. > :43:10.monument to a dynasty, that has dominated Syrian life for nearly
:43:10. > :43:10.
:43:10. > :43:15.half a century. From poor Alawite roots, Hafaz Al-Assad died as
:43:15. > :43:19.Syria's all-powerful President, even in death he looms large. His
:43:19. > :43:23.son succeeded him with talk of reform. Now it is often said he's
:43:23. > :43:30.under pressure to preserve his father's legacy, a leader who rules
:43:30. > :43:35.with an iron fist. The town of quiet the day we
:43:35. > :43:40.visited. Since then, there have been reports of clash between
:43:40. > :43:43.leading Alawite families, including the Al-Assads, variously portrayed
:43:43. > :43:47.as a feud over money, power or the President's rule. Whatever it is,
:43:47. > :43:53.it is a measure of growing unease over the high price this community
:43:53. > :43:59.is paying in this war. This region is still regarded as the
:43:59. > :44:04.President's last redoubt. There is even speculation it could form a
:44:04. > :44:07.brokaway Alawite state, stretch -- a breakaway Alawite state,
:44:07. > :44:11.stretching from the mountains to the sea. The war is reaching some
:44:11. > :44:17.parts of the coastal region. This amateur region claims to show
:44:17. > :44:21.destruction in mountain village, up towards the Turkish border. These
:44:21. > :44:27.mainly Sunni enclaves have seen heavy fighting, some are now
:44:27. > :44:32.controlled by members. -- rebels. Syria's war is often described as a
:44:32. > :44:37.sectarian conflict. But the regime itself is accused of playing the
:44:37. > :44:43.sectarian card, stalking fear and arming Alawites elsewhere in the
:44:43. > :44:48.country. This man wants his identity hidden.
:44:48. > :44:50.An Alawite, he has long been in opposition, does he see it as a
:44:50. > :44:53.sectarian conflict? TRANSLATION: course it is not. This is the work
:44:53. > :44:58.of the regime from. The very beginning it has been trying to
:44:58. > :45:04.create a fear among the Alawites, to make them align with the regime.
:45:04. > :45:10.They are not going to succeed. Latakia is regarded as an Alawite
:45:10. > :45:16.stronghold, a very strong bastion of support for President Assad, how
:45:16. > :45:24.would you describe it? TRANSLATION: portray, I see it as the opposite.
:45:24. > :45:28.With all the work to make it a sectarian issue, there hasn't been
:45:28. > :45:33.a INGle sectarian attack against all law woits. That is what they
:45:33. > :45:38.want to observe here. This man, Nuhad Abdallah, a leading academic,
:45:38. > :45:45.says diversity is to be celebrated, not feared. This is Jesus Christ,
:45:45. > :45:54.this is Christ in a house of one of the Muslims. He bristles when I ask
:45:54. > :46:04.about his Alawite roots? The issue is not Sunni-Alawites, I can assure
:46:04. > :46:09.
:46:09. > :46:16.you very much. Most of my friends, you know, are mixed. The grandson
:46:16. > :46:22.of 130 years of marriage between Alawites and Sunni. Inherited from
:46:22. > :46:29.this family, so that means we have, we don't have that issue.
:46:29. > :46:33.Many in this city, still hold on to a Syria of old. The secular mosaic
:46:33. > :46:38.that helped define a national identity. Other parts of Syria