20/12/2012 Newsnight


20/12/2012

As the plebgate story refuses to die, have police/government relations hit a new low? And why President Putin thinks Russia's relations with America are being poisoned.


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Transcript


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It's plebgate, is it becoming plodgate, today the Police

:00:19.:00:24.

Federation was effectively lobbying a move towards a possible apology.

:00:24.:00:28.

I will wait to see what happens in relation to the investigation. If

:00:28.:00:31.

he has been done a disservice in relation to what has happened, I

:00:31.:00:35.

will be first in the queue to apologise. Why is the relationship

:00:35.:00:38.

between the Government and the police so fraught. Also tonight,

:00:38.:00:41.

the kings of the credit crunch. Thousands of pawnbrokers filling a

:00:41.:00:48.

gap in the market for the rich and the poor. There is no other choice,

:00:48.:00:54.

really. I wouldn't go to my family for money, I would rather use what

:00:54.:00:59.

I have got myself. We will talk to one MP who thinks the rules need to

:00:59.:01:04.

be toughened up. And Vladimir Putin threatens to retaliate against an

:01:04.:01:08.

American ban on corrupt Russian officials, will he really stop

:01:08.:01:18.
:01:18.:01:21.

Americans adopting Russian children. Good evenings. While the police

:01:21.:01:25.

investigate the role played in Andrew Mitchell's downfall by an e-

:01:25.:01:28.

mail sent by an offduty officer, who allegedly claimed to be a

:01:28.:01:33.

member of the public. The former Home Secretary, Kenneth Baker, have

:01:33.:01:36.

has accused the Police Federation of using the affair for political

:01:36.:01:42.

ends. In the days following the dispute, not only did they want to

:01:42.:01:47.

get a cabinet minister but they also wanted to use it as a

:01:47.:01:50.

campaigning tool between Government and officials. The Police

:01:50.:01:53.

Federation has denied this, but the chairman says he will apologise if

:01:54.:01:59.

there was a disservice committed. We will look at why the relations

:01:59.:02:02.

between Government and rank and file officers are so strained.

:02:02.:02:06.

First we have this. And so, it appears, we might have

:02:06.:02:13.

to say farewell to that rather clumsy label "plebgate" and give a

:02:13.:02:19.

cautious, but weary reincarnation, "plodgate". Was there a conspiracy

:02:19.:02:22.

to fit up the former Chief Whip. That is a question we still can't

:02:22.:02:24.

answer. Today the Metropolitan Police made a second arrest in

:02:24.:02:28.

their on going investigation. There are questions too for dam yofpblt

:02:28.:02:32.

how come it took Channel 4 to uncover, David Cameron, how come it

:02:32.:02:36.

took Channel 4 to uncover significant questions on the

:02:36.:02:40.

strength of evidence against Andrew Mitchell. When David Cameron's own

:02:41.:02:44.

cabinet secretary, Jeremy Heywood, had been given the job of

:02:44.:02:48.

investigating and had access to a...We Have a programme of reform

:02:48.:02:54.

that the police have actually been in need of for 30 years, really.

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How has that gone down, that combination of measures? The Police

:02:59.:03:03.

Federation has opposed each of those measures, tooth and nail, and

:03:03.:03:07.

with as emotional a campaign as any public sector union has done.

:03:07.:03:11.

are the actions of a Police Federation in furthering their aims

:03:11.:03:16.

the legitimate campaigning of a representative body, or have they

:03:16.:03:23.

tipped into moral blackmail and bullying.

:03:23.:03:27.

Home Secretary, do you sleep at night? There are not many playing

:03:27.:03:30.

nice cop at the Police Federation Conference, if you are the Home

:03:30.:03:32.

Secretary. Today, the Police Federation answered questions for

:03:32.:03:37.

the first time, about their actions during the Mitchell affair. I think

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it is unfortunate that we are three months down the line and only now

:03:41.:03:45.

finding out what some of these facts were at the very start.

:03:45.:03:51.

Seeing the CCTV footage, seeing the fact that there was apparently some

:03:51.:03:54.

police officer purporting to be a member of the public, that sort of

:03:54.:03:57.

thing. It is unfortunate it has taken three months for those facts

:03:57.:04:03.

to come out. It is clear that Andrew Mitchell is now a far more

:04:03.:04:08.

relaxed figure, given the events of the week. Happy Christmas.

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Relations between the police and the Government are now more tense

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than ever. I'm joined from Brighton by the

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former Home Secretary, Lord Baker, from Newcastle the best-selling

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diarist, Chris Mullen, and with me in the studio Mr Hurly, a former

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senior official at Scotland Yard, and Mike Pannett. The Police

:04:35.:04:38.

Federation was not available to come on tonight. The police are in

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a situation where they are not allowed to strike. Surely they have

:04:42.:04:47.

every right to take the battle to the Government wherever they can?

:04:47.:04:51.

Of course they can protest, I'm not objects to that at all. The police

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are in real trouble this year. We had the Hillsborough affair, where

:04:56.:05:00.

there was fabricated evidence, and the Rotherham affair where the

:05:00.:05:07.

police didn't prosecute people who were abusing young girls. And the

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extraordinary episode of a police officer pretending to be a member

:05:09.:05:13.

of the public, fabricating evidence, totally false evidence, saying

:05:13.:05:17.

there was a crowd. Let's be clear these are still allegations, Lord

:05:18.:05:23.

Baker on the last point? Sorry? They are still allegations?

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Certainly allegations. I believe the Police Federation had decided

:05:26.:05:30.

they had saw a wounded cabinet minister and they decided to strike

:05:30.:05:35.

and bring him down. They ran an overtly political campaign. They

:05:35.:05:38.

produced T-shirts and banners at the Tory Party conference. They

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were using this as an attack upon the Government which, they dislike.

:05:41.:05:45.

They don't like the review that has been set up into their pay and

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conditions and early retirement. As a result they behaved atrociously

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and unfairly. Let me put that to the studio. Atrociously unfairly,

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it looked like the Police Federation were being gleeful and

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acting in a cheap way? I come from the point of view of trying to

:06:03.:06:10.

deliver for the people of sury. My concern is to make sure the morale

:06:10.:06:13.

of and motivation of police officers is fit for purpose. Would

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you have been happy if a police officer in your area was wearing

:06:18.:06:21.

those T-shirts, maybe they were? don't know if they were. The

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strongest weapon the police always have is to retain their dignity and

:06:26.:06:30.

remain measured. Did they lose it by having those T-shirts? They Z

:06:30.:06:36.

there is a huge measure of from us trai, they have seen the starting

:06:36.:06:41.

numbers of police constables cut to �14,000 a year, less than a

:06:41.:06:44.

community support officer. average police officer is on more

:06:44.:06:54.
:06:54.:06:54.

than �40,000 ay, and one in four met constables are on more than

:06:55.:06:59.

that? There are a number of police officers on that salary, but the

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nature and number of police officers we can recruit on that

:07:02.:07:05.

money, I want quality people to protect the Surrey population.

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Chris Mullen, you have long experience of the police, are you

:07:11.:07:16.

surprised that the federation acts in such a vehement way? -- acted in

:07:16.:07:19.

such a vehement way? Not in the least. They have a long track

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record of bullying and intimidating people who get in their way, be

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they journalists or politicians or whoever. I have been monstered by

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them myself in days gone by. quick example of being bullied, you,

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personally, bullied, really? I was the chairman of the Home Affairs

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Select Committee some years a and we conducted an inquiry into -- ago,

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and we conducted an inquiry into reforming police procedure, and as

:07:47.:07:50.

a result of some not very controversial remarks I made, they

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started ringing up the Home Secretary, demanding that he call

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for my dismissia. Then they rang the opposition home affairs

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spokesman and made the same demand. Then they rang round each member of

:08:02.:08:04.

the committee, demanding they disassociate themselves from me.

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All of them declined, as it happened. But, and I, you know,

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don't complain about that, because I'm politician, and I don't -- I'm

:08:14.:08:22.

a politician, and I know the heat of the kitchen. This is modus Peter

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Mandelson die. Is that OK -- Modus operandi.

:08:28.:08:31.

have been called the last unreformed public service, is there

:08:31.:08:38.

real rancour there? What is in here, is the rank and file officers and

:08:38.:08:43.

their morale is at an all-time low. I have heard to Lord Baker and

:08:43.:08:47.

listening to comments made by the federation and the rest. The real

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question here, yes there is issues between federation and Government,

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I have never known it so bad. That is not good for policing and

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governance. Do you think, just on the very point that Lord Baker was

:08:58.:09:01.

saying, do you think there is a defensiveness in the police,

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Hillsborough, Leveson and so forth? There is dreadful things happening

:09:06.:09:11.

within policing, and a lot of those, like Hillsborough, big inquiries

:09:11.:09:15.

taking place. Taking it back, while we are all sitting here, looking at

:09:15.:09:19.

the months. We are looking at the original incident, where the Chief

:09:19.:09:24.

Whip has come to the gates of Downing Street and there has been

:09:24.:09:29.

an altercation at those gates. Those officers have then reported

:09:29.:09:35.

what was said. We have to remember this is all about what did the

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Chief Whip say. I have no doubt, neither has the commissioner,

:09:39.:09:43.

Hogan-Hoe, about the integrity of those two police officers that have

:09:43.:09:49.

said what was said. All through this Mitchell has never said what

:09:49.:09:53.

he did say. If he had just said he was sorry, and he need not have

:09:53.:09:57.

said what he used, but he said in the end he said he didn't say

:09:57.:10:00.

anything, then he said I did swear, but I didn't say what those

:10:00.:10:05.

officers have said. Lord Baker, do you think what has been said about

:10:05.:10:10.

the sequence of events there, and the idea if Andrew Mitchell had

:10:10.:10:16.

spoken quickly it would have diffused this, is symptomatic of

:10:16.:10:20.

the bad relationship between the police and the Government? Andrew

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Mitchell apologised several times, he responded very quickly what you

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might be witnessing here is a grave error of injustice. In fact, from a

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police officer. We know that one is lying, total lo. And could I just

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say to the commissioner. -- Totally. And could I just say to the

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commissioner. We are at allegation stage at the moment? He needs to

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try to restore the trust of the British public in the police, I

:10:43.:10:45.

don't think that begins with talking about their pay and

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salaries. In fact, there is a lack of trust at the moment, that is

:10:49.:10:54.

very, very disturbing. Because you have got the British public who

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have to have trust in their police. Let me talk about that, the trust

:10:58.:11:02.

in the police is very, very important. And Lord Baker, and

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Chris Mullen too there were two reports, the Sheehy report, that

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wasn't implemented, that was a real struggle, and the Windsor Report,

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there has to be some kind of accommodation. Why is it so hard to

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come to that? Lord Baker is correct. We need to rebuild the trust in the

:11:19.:11:23.

whole way in which the police are viewed. But they are still regarded

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very, very highly. But what is this amounting to, there has been a

:11:28.:11:30.

break down of relationships between Government and the Police

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Federation. You saw that there, you saw the remark to Theresa May, "Do

:11:37.:11:42.

you sleep at night?" Why should the Home Secretary go to the

:11:42.:11:44.

conference? Because she's the leader, she needs to influence the

:11:44.:11:49.

people she's working with. The real problem we have got here, is like

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everybody else in society they are having their pay and conditions cut.

:11:53.:11:56.

They are also having huge changes done to the sway they operate,

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which causes them to believe they are considered as lesser citizens,

:12:00.:12:03.

their bosses have been replaced by people who have never been in the

:12:03.:12:09.

police before. You are talking about Tom Windsor? And other people,

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they are told all their promotions are stopped and people coming in

:12:12.:12:16.

with three years service to replace them. I come at this, not as a

:12:16.:12:19.

police officer, but a politician, who wants to maintain the morale of

:12:19.:12:24.

the work force. Maybe you don't agree, or you do that actually the

:12:24.:12:27.

Police Service does need reform, and it should take a hit like so

:12:27.:12:31.

many other services are having to take at the moment. We are still in

:12:31.:12:35.

recessionary times? I agree that the police have to take cuts like

:12:35.:12:37.

so many other public sector organisations. What I don't

:12:38.:12:41.

necessarily agree with is actions that damage the overall morale and

:12:41.:12:45.

sense of value of the Police Service. Some of the things, this

:12:45.:12:48.

isn't just from the police point of view, just about the salaries, it

:12:48.:12:51.

is about the fact that people have been brought in, three years in

:12:51.:12:57.

charge of whole shifts of people. Chris Mullen, do you think that on

:12:57.:13:00.

the Government side there hasn't been a sensitive handling, for

:13:00.:13:04.

example, the commissioner there talks about Tom Windsor coming n

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Tom Windsor's report, and he became Inspector of Constabulary, he has

:13:10.:13:13.

never been a police officer? They have seen off all comers over the

:13:13.:13:17.

last 20 or 30 years when it comes to reform. There is scope for

:13:17.:13:21.

considerable reform in relation to, not only, well in particular to

:13:21.:13:26.

some of the police practices, and great waste of resources, sometimes.

:13:26.:13:30.

I have to say as well, there is nothing new about this, they say

:13:30.:13:34.

that morale is at an all-time low, I have heard that at least half-a-

:13:34.:13:40.

dozen time in the last 20 years. The fact is, given a succession of

:13:40.:13:43.

home secretaries, they have mistreated a succession of hoves

:13:43.:13:47.

ministers in their conferences, they were slow hand-clapping Will

:13:47.:13:56.

Straw, during the 19 -- 2005 general election. This isn't a

:13:56.:14:01.

party plea? The only point I make to you, is not particularly a

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grudge against this Government. has it come to this, in a situation

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where we need the public to trust and have faith in police officers,

:14:10.:14:15.

they do a job where they put their lives at risk day in day out, but

:14:15.:14:19.

we are now where partly as a result of the Andrew Mitchell affair, what

:14:19.:14:24.

happens to it, we might be facing discussions, conversations,

:14:24.:14:29.

negotiating where even more axe crown mus -- that are even more

:14:29.:14:35.

acrimonious with the outcome of this case? Going back to what Lord

:14:35.:14:39.

Baker said about Andrew Mitchell offering an apology, he said he

:14:39.:14:43.

didn't say what the officers said, he brought into question the

:14:43.:14:46.

integrity of those officers. I have said today, I think the public are

:14:46.:14:49.

fed up with what's going on. We have seen political points going

:14:49.:14:58.

from all sides, it has to stop. This is about policing, and this is

:14:58.:15:01.

about policy. We have to get the two together, there should be a

:15:01.:15:04.

common cause, that should be to deal with people who are making

:15:04.:15:10.

people's lives a misry that is what policing is about. Here we are

:15:10.:15:12.

months down the line, there are dreadful things, and cuts happening

:15:12.:15:17.

within the police, and issues within policing. And it may be that

:15:17.:15:20.

Andrew Mitchell is back in a cabinet post soon. What do you

:15:20.:15:24.

think the likelihood of that is? That is quite possible. Can I make

:15:24.:15:27.

a point about Tom Windsor, the police should not really object to

:15:27.:15:33.

somebody outside the police force being their Chief Inspector, the

:15:33.:15:36.

prisons have been inspected now for many years by people who have

:15:36.:15:40.

nothing to do with the Prison Service. They did very, very good

:15:40.:15:43.

reports. The police have always said this is our particular field,

:15:43.:15:47.

no-one else must take an interest in it at all. I think things have

:15:47.:15:50.

to move on from. That that is part of winning back the trust. The

:15:50.:15:54.

police have to answer to somebody, they should be answering to the new

:15:54.:15:59.

commissioners. One of the things that should be happening is that. I

:15:59.:16:04.

still think the politicisation of the police would be disastrous of

:16:04.:16:08.

our economiccy, for our democracy, and the chairman needs to change

:16:08.:16:13.

his tune. And the chairman tonight, the weasel words of that, that if

:16:13.:16:20.

Andrew Mitchell is found knot not guilty we will apologise.

:16:20.:16:23.

apologise for the technical problems in the film previous to

:16:23.:16:27.

this discussion. Pawnbrokers will always be

:16:27.:16:32.

associated with dark Dickensian London. By the end of the 20th

:16:32.:16:36.

century awful them had shut up shop. By 1980 there were 50 branches left

:16:36.:16:41.

in the UK. Now the industry is thriving anew, filling a yawning

:16:41.:16:45.

gap as banks stop lending, and both poor and rich struggle to find

:16:45.:16:50.

credit. There are now more than 2,000 pawn shop. As we report, that

:16:50.:16:55.

number is expected to rise further as the squeeze on household incomes

:16:55.:17:05.
:17:05.:17:05.

continue. Somewhere deep in the Surrey hills,

:17:05.:17:12.

a hidden mile of tunnels. 5,000 aircraft workers, sheltered

:17:12.:17:20.

here in the Second World War. The men and women who made the

:17:20.:17:28.

Hurricane fighter. Untouched for half a century, these cold, dry

:17:28.:17:36.

tunnels, are now being used for something very different. This is a

:17:36.:17:43.

Chateau Petrus 2000, it is about �18,000 worth of wine per crate. A

:17:43.:17:48.

six box is about �3,000 a bottle. James Constantinou is storing

:17:48.:17:53.

�500,000 worth of wine down here. These bottles of Bordeaux are not

:17:53.:17:58.

his to drink. James is a pawnbroker, he set up three years ago. Lending

:17:58.:18:03.

not just to individuals but to companies, struggling in the

:18:03.:18:07.

downturn. 30% of the time they haven't been able to source funding

:18:07.:18:10.

for their business side of things, so they are looking for funding

:18:10.:18:14.

that they are going to pump into their business. So they may be

:18:14.:18:17.

borrowing the money as a private individual, but they are using it

:18:17.:18:21.

for business purposes. Those customers have included a

:18:21.:18:31.
:18:31.:18:32.

restaurant, pawning its wine collection to pay bills and wages.

:18:32.:18:38.

Back above ground, a petrolhead's dream. All pawns are locked up for

:18:38.:18:43.

safe keeping. A high-end sports car, or a plane gold ring, the

:18:43.:18:47.

transaction is the same. If you don't pay on time, your item will

:18:47.:18:56.

be sold, or melted down to cover the debt. Mark Landsberg runs his

:18:56.:19:02.

own IT business, he handed over the keys to his Porsche last month, to

:19:02.:19:04.

raise �20,000 to pay a looming tax bill.

:19:05.:19:09.

Why not go to a bank and get a straight loan? Forget t the banks

:19:09.:19:12.

are useless nowadays. You can't get money out of a bank for business

:19:13.:19:16.

unless it is made of solid gold, and you have more assets than you

:19:16.:19:20.

are borrowing. Pawning his car meant no credit check and little

:19:20.:19:23.

paperwork, the cash was in his account hours later. Interest

:19:23.:19:30.

charges on a loan like this go from 2% a month, right up to 7%. Do you

:19:30.:19:33.

worry about the stigma attached to pawnbroking, does it send a message

:19:33.:19:37.

out to people you do business with, that there's something wrong?

:19:37.:19:43.

is the same question you could have asked my mother 20 years ago about

:19:43.:19:47.

credit cards and higher purchase. She never had those in her life

:19:47.:19:50.

because of the associated stigma. The bank loan you can't get for a

:19:50.:19:54.

month. They want a year out of you, and there is penalties if you want

:19:54.:20:00.

to pay back early. You haven't got the flexibility, if you like.

:20:00.:20:05.

Those same trends, same market forces, are even more obvious on

:20:05.:20:13.

the high streets. With banks not lending, pawnbrokers have quickly

:20:13.:20:18.

filled the gap. 200 have soped this year alone, the real growth --

:20:18.:20:22.

opened this year alone, the real growth story of the credit crunch.

:20:22.:20:26.

Three of those new stores belong to one of the oldest names in the

:20:26.:20:32.

business. Fish Brothers, first opened its

:20:32.:20:40.

doors almost two centuries ago. This, though, is how it looks today,

:20:40.:20:46.

all modern counters and slick marketing. A redesign this year,

:20:46.:20:51.

meant to make it look less Victorian money-lender, more high

:20:51.:21:01.
:21:01.:21:06.

street bank. These are a pawnbrokers right hand equipment,

:21:06.:21:12.

these were still in use when I started. This is a fifth generation

:21:12.:21:15.

worker in the business. The business was about to die, and now

:21:15.:21:19.

he has seen it grow at its strongest rate in more than a

:21:19.:21:24.

century. The recession has affected middle-classes, that has affected

:21:24.:21:27.

pawn brokers because the middle- classes are using us in a way they

:21:27.:21:30.

never have before. Our average loan over the last four or five years

:21:30.:21:36.

has gone up, I think, by a factor of six. Wages haven't risen, and

:21:36.:21:40.

people have accepted the fact that they haven't got a wage rise, but

:21:40.:21:44.

they still have a job. A lot of firms are hanging in there, and

:21:44.:21:51.

holding on to as many people as they can, and the result of that is,

:21:51.:21:55.

people's income is being squeezed. I wondered if you could tell me how

:21:55.:22:00.

much you could give me for those on pawning, please? Not a problem.

:22:00.:22:06.

Today I have come in to pawn some coins, a sovereign which my father

:22:06.:22:12.

gave me for my 21st birthday, a Kruger and a coin I received on his

:22:12.:22:20.

death when he died, and a gold $10 coin, so I can buy some gas bottles

:22:20.:22:24.

to heat my flat. I want enough to heat my flat for the next month,

:22:24.:22:30.

and maybe some Christmas presents if people are lucky.

:22:30.:22:34.

Jeanine is a regular here, as well as new clients, Fish Brothers is

:22:34.:22:40.

seeing its traditional customers, borrowing larger amounts. On those

:22:40.:22:48.

ones we can do �1800 on those coins. The rising price of gold has made

:22:48.:22:52.

the coins more valuable. 90% of customers like this repay their

:22:52.:22:58.

loans own time, and get their pawned items back. Without pawning,

:22:59.:23:02.

without that money you get from here, what would happen? I wouldn't

:23:02.:23:07.

be able to buy the gas bottles until I next get paid, Will which

:23:07.:23:11.

will be at least another two weeks. I would have two weeks without

:23:11.:23:20.

heating. Is there no other option to get money, if it is not this,

:23:20.:23:26.

what is the implication? There is no other choice, really. I wouldn't

:23:26.:23:32.

go to my family for money, for a gas bottle. I would rather use what

:23:32.:23:38.

I have got myself, and raise the money that way. Then pay it back

:23:38.:23:44.

when I get paid. Why not go to your family, or your mum? They are

:23:44.:23:53.

pensioners. They are feeling tough times as well. For many, the

:23:53.:23:57.

pawnbroker is not just a quick solution. Would you like an

:23:57.:24:03.

envelope? It is now the only choice. But, at 5-6% interest, every month,

:24:03.:24:06.

it could never be described as cheap.

:24:06.:24:09.

Thank you very much. I really appreciate it.

:24:09.:24:13.

Whichever way you look at it, pawnbroking is not a cheap option,

:24:13.:24:17.

it is an expensive way to borrow money? It is if you are doing it

:24:17.:24:20.

long-term, I'm talking about years. If you are talking about months,

:24:20.:24:25.

which is what pawnbroking is actually aimed at, then it is an

:24:25.:24:29.

expense -- it isn't expensive. Don't you rely on repeat customers,

:24:29.:24:34.

don't the people you speak about come back again and again, and it

:24:34.:24:38.

is all short-term loan, when you add them up they are expensive?

:24:38.:24:41.

They haven't got a bank account, and if you come to the pawnbroker,

:24:41.:24:51.
:24:51.:24:55.

they are into a totally regulated These are incredible survivals.

:24:55.:25:01.

Someone has pawned a pair of boots. They have got two shillings for

:25:01.:25:06.

that. And even more poignant, I think, is that there is a ticket

:25:06.:25:12.

here of someone in 1907, who has pawned a blanket. One shilling and

:25:12.:25:16.

sixpence. Look at the date, 9th of December, in the cold mid-winter

:25:17.:25:23.

they are having to pawn their blanket, really tragic ticket.

:25:24.:25:28.

You have to go back a long way to find the last time pawnbrokers

:25:28.:25:32.

played such a major role in British life. At the turn of the last

:25:32.:25:38.

century, there were more than 700 in London, one on almost every

:25:38.:25:42.

street corner of the East End. was like a buffer for working

:25:42.:25:46.

people, without this support probably people would have starved,

:25:46.:25:50.

actually. This actually gave them a little bit of money, week by week,

:25:50.:25:56.

to the -- enable them to survive. Wages were very, very low at this

:25:56.:26:00.

period, really, it was actually essential they found a way to get

:26:00.:26:10.
:26:10.:26:16.

some money to buy. Usually it was to buy food. Sometimes it is hard

:26:17.:26:21.

to listen to some of the stories, they are pretty heart-breaking.

:26:21.:26:31.
:26:31.:26:31.

But on the other hand, I'm there to help them, in a sense. The back

:26:31.:26:36.

room of Gemini Jewellers, on the Isle of Sheppey. Here pawnbroking

:26:36.:26:46.

is still done the old fashioned way. The staff know all their customers,

:26:46.:26:51.

privacy and discretion are an important part of the business. It

:26:51.:26:57.

is busy, but few customers want to speak on camera. You do keep it

:26:57.:27:01.

under wraps a bit. I quite enjoy it t I have come to know the girls

:27:01.:27:05.

quite well over the few years I have been in. I have been in and

:27:05.:27:09.

out, got it out, put it back. Like today, I have come out and got it

:27:09.:27:16.

all out. I most probably be back in the new year, pawning again. But,

:27:16.:27:20.

you know, there is stigma and there isn't stigma about it. I could

:27:20.:27:25.

never tell my family that I go to the pawn shop.

:27:25.:27:29.

In the beginning when I first worked here, we had a very small

:27:29.:27:34.

box of pawnbroking, it has got now to three safes full of pawnbroking.

:27:34.:27:39.

We know most people, they come and start talking to you, and they will

:27:39.:27:43.

say their husband has lost their job. It is ever day living, that is

:27:43.:27:46.

-- every day living, that is why they pawn their jewellery, because

:27:46.:27:50.

they can't afford to live. We might not be pawning our boots and

:27:50.:27:53.

blankets to get through this crisis, but more of us are turning to

:27:53.:28:00.

something we can touch, something real. To make ends meet. I'm joined

:28:00.:28:03.

by the Labour MP, Stella Creasy, who has campaigned for the

:28:03.:28:06.

financial conduct authority to be given wide-ranging powers to cap

:28:06.:28:13.

the cost of cred di. And by Ray Perry from the -- credit, and by

:28:13.:28:15.

Ray Perry from the National Pawnbrokers Association. People

:28:15.:28:19.

can't get credit from the bank, isn't it best they go to the

:28:19.:28:23.

pawnbrokers, rather than some shadey back street money lender?

:28:23.:28:26.

Nobody is suggesting people go to illegal lenders. Most other

:28:26.:28:29.

countries cap the cost of credit, and they have lower levels of

:28:29.:28:32.

illegal lending and lower levels of personal debt. The Government has

:28:32.:28:37.

sat on this market for the last couple of years, watching British

:28:37.:28:41.

families struggling. We know next year will get worse. We need to

:28:41.:28:45.

tackle these, whether it is the payday loan industries or the

:28:45.:28:49.

higher purchase agreements, they are all scraming British consumers.

:28:49.:28:53.

Look at Fish there, daily interest rates, surely there should be some

:28:53.:28:57.

kind of cap? The daily interest rate is a legal requirement. They

:28:57.:29:02.

have to express a legal daily interest rate. Most pawnbrokers

:29:02.:29:06.

think of months, the average loan is typically about a month-and-a-

:29:06.:29:11.

half. They are not really thinking about loans that should last a year

:29:11.:29:17.

or more than that. What do you say to the accusation that it is all

:29:17.:29:22.

about payday loans as well, and the pawnbroking side of it lures people

:29:22.:29:28.

in to then be involved in payday loan, you have actually amalgamated

:29:28.:29:33.

the old tradition of pawnbroking with payday loans, very much a

:29:33.:29:37.

feature of these unstable times? is like if you go shopping in

:29:37.:29:41.

Tescos, there is a range of products in there available to the

:29:41.:29:44.

customer. They have that choice. Obviously I would say pawnbroking

:29:44.:29:47.

is better, it gives a better interest rate, and you are

:29:47.:29:54.

borrowing in a sense against itself. Why do so many pawnbrokers in

:29:54.:29:57.

Waltham stow ring them back with payday loans when they come into

:29:57.:30:03.

the shop. Surely you are pushing people into ways of borrowing that

:30:03.:30:06.

are unsustainable? In terms of pawnbroking I don't know who you

:30:06.:30:10.

are referring to, but pawnbroking is providing a good service. It is

:30:10.:30:16.

providing a means for somebody to get credit. Pawnbrokers are

:30:16.:30:21.

offering loans on �50,000 H & T, how is that a good service, it is

:30:21.:30:27.

due to be paid back in six months, that is �2,000 of interest if it is

:30:27.:30:33.

paid back in six months. I spoke to them, they put it there to attract

:30:33.:30:36.

business people, they do two of those a year. We don't necessarily

:30:36.:30:40.

need to talk about those examples. What you are talking about �50,000

:30:40.:30:45.

loans, it is interesting. This whole idea that you saw there, that

:30:45.:30:48.

the entrepeneur there that had to pawn is Porsche, he was saying

:30:48.:30:51.

there was no stigma. That is a different thing. This is just part

:30:52.:30:54.

and parcel of the economic situation we are in, where people

:30:54.:30:59.

have short-term jobs, people maybe can't get money from the bank. They

:30:59.:31:05.

need the pawnbroker. What that businessman proved is a damning

:31:05.:31:07.

indictment of Project Merlin, supposed to be lending to small

:31:07.:31:10.

businesss in this country. If we are lending in ways that push

:31:10.:31:14.

people into further debt, it is not good for them or the economy. It is

:31:14.:31:18.

the same with pawnbroking, that should be one of the cheapest forms

:31:18.:31:24.

of lending because they are secured against an item, the interest rates

:31:24.:31:28.

you charge bear no more interest to the British economy than payday

:31:28.:31:36.

lending. The Money-- A few programmes looked at the issue and

:31:36.:31:40.

said that pawnbroking on a typical one-month loan was cheaper than

:31:40.:31:45.

other options, and the OFT did a report saying the same last week.

:31:45.:31:49.

The argument seems to be that you do not have regulation that exists

:31:49.:31:52.

in other European countries, capping the cost of a loan. Would

:31:52.:31:57.

that not actually be a reasonable way to proceed, if you want

:31:57.:32:03.

pawnbroking, as it were, to become, not that it is illegitimate, but a

:32:03.:32:07.

more legitimate, unstigmatised form of credit? I'm not saying that

:32:07.:32:12.

Stella may have a point in some cases. You know, there is extreme,

:32:12.:32:16.

and indeed there are illegal loan sharks out there, I certainly do

:32:16.:32:19.

not condone that. From the association's point of view,

:32:19.:32:22.

wouldn't it benefit you to be prepared to take a cap on the cost

:32:22.:32:26.

of a loan? I suppose the obvious question would be what is that cap

:32:26.:32:30.

F it's at a certain level, people won't enter the business. It is, at

:32:30.:32:34.

the end of the day a business proposition to loan money. If it is

:32:34.:32:38.

too low. All these other countries have caps on the cost of credit,

:32:38.:32:41.

and they have pawnbroking and payday lending. Let's talk about

:32:41.:32:47.

the interest rates you are talking about, the Which? Study showed

:32:47.:32:52.

pawnbroking interest rates go between 90% and 290%, nobody here

:32:52.:32:56.

watching will think that is a low- interest loan? People watching

:32:56.:33:00.

tonight will know it will be a short-term loan, up to six weeks.

:33:00.:33:04.

Why do 20% of customers don't pay back in time and have to roll over

:33:04.:33:10.

or lose the item? It is 12%. official figures are that, I will

:33:10.:33:15.

listen to them? You can't role over a pawnbroking loan, you are loaning

:33:15.:33:18.

against a particular item, it is your item. The worst that can

:33:18.:33:23.

happen is you lose the item. websites for Fish Brothers says

:33:23.:33:25.

clearly they will offer you the opportunity to extend the terms of

:33:25.:33:29.

the loan, what is that if it is not rolling it over? It is starting a

:33:29.:33:33.

new loan, you can't stop somebody coming back another time with

:33:33.:33:36.

another item. Let's be honest, Stella Creasy, for lots of people n

:33:36.:33:41.

a sense, what you are doing now is further stigmatising it, as it were.

:33:41.:33:45.

For pom some people who don't have a bank account, pawnbroking is

:33:45.:33:49.

something that is facing you in the high street, there is regulation

:33:49.:33:54.

and further regulation in 2014, it is a legitimate form of credit?

:33:54.:33:57.

Absolutely, we do nothing to stigmatise people, we are trying to

:33:57.:34:01.

help them. We stand outside companies like Fish Brothers and

:34:01.:34:06.

Cash Converters, all 18 of them in Walthamstow, and helping people to

:34:06.:34:10.

access the Credit Union and get good financial advice. I won't stop

:34:10.:34:13.

people borrowing to put food on the table, people will doing that in

:34:13.:34:17.

this country, and nas next year will be worse when energy and food

:34:17.:34:20.

prices go up, and you guys will make millions unless we as

:34:20.:34:25.

politicians do something about it. Let's be clear, pawnbroking is

:34:25.:34:29.

legitimate? It is, it is covered by the game governance as banks.

:34:29.:34:32.

Presumably you do risk analysis, presumably you think you are really

:34:32.:34:36.

in a growth business, as long as the banks won't lend and there is

:34:36.:34:39.

problems there, you think you are a growth business? I think the OFT

:34:39.:34:42.

are right when they say it is another form of borrowing money,

:34:42.:34:45.

what is the difference between going to a bank and a pawnbroker,

:34:45.:34:49.

the bank will charge you for more an overdraft, but not declared as

:34:49.:34:53.

part of an APR. We have to stop there. Russia and America are

:34:53.:34:57.

engaged in a new tit for tat battle, after President Putin accused the

:34:57.:35:01.

US of poisoning relations between the two countries, and today

:35:01.:35:06.

threatened to ban Americans from adopting Russian children. The

:35:06.:35:10.

stand-off began over the called Magnitsky List, a law of that name,

:35:10.:35:13.

recently signed by President Obama l ban from the US those associated

:35:13.:35:20.

with the detention and death in a Moscow jail of Sergeir Magnitsky,

:35:20.:35:25.

who uncovered a $230 million fraud perpetrate bid Russian officials.

:35:25.:35:35.
:35:35.:35:39.

Putin has promised a reaction. It was his first major press

:35:39.:35:45.

conference since his third term as President, and he was in hawkish

:35:45.:35:51.

move. President Obama signing a declaration to freeze assets and

:35:51.:35:56.

denying American visas for certain Russians. He said he supported a

:35:56.:36:00.

proposal by the lower house, Americans prevented from adopting

:36:00.:36:03.

Russian children. TRANSLATION: regards this very topic you have

:36:03.:36:06.

touched upon now, the adoption of our children by foreign citizens,

:36:06.:36:11.

as far as I know the results of the opinion polls, the majority of

:36:11.:36:17.

Russian citizens have a negative attitude towards such practices. We

:36:17.:36:20.

should be able to cope with this which ourselves. According to the

:36:20.:36:26.

White House, there are 700,000 registered orphans in Russia,

:36:26.:36:32.

100,000 in institutional care. In 2011, 3,400 of these children were

:36:32.:36:37.

adopted by foreign families. Of those, nearly a third, 956 children

:36:37.:36:41.

were adopted by Americans. It is an issue that has angered many

:36:41.:36:45.

Russians, sensitive to the implication that they must be hard-

:36:45.:36:49.

hearted or unable to take care of their own. The resentment was made

:36:49.:36:51.

worse by stories of the ill- treatment of some Russian children

:36:51.:36:56.

in the US. A child died after being locked in a car in the heat. And in

:36:56.:37:00.

2010, an American woman sent back a seven-year-old Russian boy,

:37:00.:37:04.

complaining he had behavioural problems she didn't want him any

:37:04.:37:11.

more. But Americans were furious that idea of a ban on Russian

:37:11.:37:17.

children. It means they will remain in care. Data shows us that

:37:17.:37:22.

Russians are not inclined to adopt them, the polling data shows that

:37:23.:37:28.

the majority of Russians support intercountry adoption. It is hard

:37:28.:37:32.

to deny children are not being used as political pawns. This is not

:37:32.:37:35.

just a row about children, the Russians are furious that the

:37:35.:37:40.

Magnitsky Act, named in response to a Russian lower, Sergei Magnitsky

:37:40.:37:45.

who died in jail in 2009, he was about to go on trial for fraud.

:37:45.:37:49.

Sergei Magnitsky had alleged that a circle of tax and registry

:37:49.:37:56.

officials had conspired in a $230 million fraud scheme. The Magnitsky

:37:56.:38:00.

Act normalises trade relations with Russia, but allows officials to be

:38:00.:38:05.

bared from the US, if they are involved in ruption or human rights

:38:05.:38:13.

abuses. Putin's response went -- corruption or human rights abuses.

:38:13.:38:17.

Putin's went beyond. He said they would draw up a list of their own

:38:17.:38:22.

of Americans banned for human rights violations. TRANSLATION:

:38:23.:38:27.

have already talking about this, Abu Ghraib, very much talked about

:38:27.:38:31.

in the world. Guantanamo prison, they keep people there for many

:38:31.:38:41.

years, without any crimes, any charges. Even as if in the middle-

:38:41.:38:46.

age, they legaliseed tortures. Just imagine that we have something like

:38:46.:38:52.

this in our country. They will eat us. The Magnitsky Act has clearly

:38:52.:38:56.

not helped Russian-American diplomacy, but President Putin was

:38:56.:39:00.

claiming today, it has poisoned relations between the two sides.

:39:00.:39:03.

Even so, there are growing pressures here in Britain, that a

:39:03.:39:07.

variety of the acts should be introduced here, to stop corrupt

:39:07.:39:10.

Russian officials, and those involved in human rights abuses,

:39:10.:39:12.

coming to London to spend their money.

:39:12.:39:16.

It is about make sure that where you have individuals, responsible

:39:16.:39:20.

for torture, and some of the other most heinous crimes, they are not

:39:20.:39:24.

just free to Waltz into this country, buy up property, or do a

:39:24.:39:28.

bit of light Christmas shopping on the kings road. Why starting Russia,

:39:28.:39:32.

there are human rights abusers all around the world? That is a God

:39:32.:39:36.

point. And when the House of Commons unanimously called for this

:39:36.:39:40.

kind of law back in March, they said we wanted to see it all around

:39:40.:39:44.

the globe. Before becoming low, the measure banning Russian children

:39:44.:39:48.

being adopted by Americans, has to pass a third read anything the

:39:48.:39:52.

State Duma. After that it goes to the Upper House, then it requires

:39:52.:39:54.

President Putin's signature. Some of his ministers are known to be

:39:54.:40:00.

against it, regarding it as eye- for-eye logic, but Putin's angry

:40:00.:40:06.

speech today suggests they could be overruled.

:40:06.:40:10.

Alexander Nekrassov is a journalist and former Kremlin adviser. In

:40:10.:40:14.

Washington, we have the head of the Russia time at the Eurasia Group at

:40:14.:40:19.

this tang. Do you think this has the make -- think-tank. Do you

:40:19.:40:24.

think this has the makings of a serious row? When you start to ban

:40:24.:40:27.

American citizens from adopting Russian children. It is a little

:40:27.:40:34.

bit over the stop. If we had mutual blacklists going on, that is what

:40:34.:40:37.

everybody expects. But the Kremlin has gone a step too far, Americans

:40:37.:40:42.

are taking it personally it is a danger that it will spill over into

:40:42.:40:47.

the range of national security and range of mutual interests that the

:40:47.:40:50.

United States and Russia have. is a long way down the line, we

:40:50.:40:54.

think, because, as was said, this has to be signed off eventually by

:40:54.:40:57.

Vladimir Putin. Now, he was sounding pretty toughed today, but

:40:57.:41:01.

do you think he will take this all -- tough today, but do you think he

:41:01.:41:06.

will take this all the way? I think he will, the Kremlin is very angry

:41:06.:41:10.

that the United States have selected a specific one country,

:41:10.:41:13.

accusing its officials of corruption and human rights abuse.

:41:13.:41:18.

But without, for example, what about China, what about Saudi

:41:18.:41:22.

Arabia, what about Bahrain, there are many countries. The official

:41:22.:41:25.

there is are travelling freely to the west. This is the point that

:41:25.:41:28.

the Kremlin is making. This is hypocrisy. Because you are picking

:41:28.:41:34.

out one country, on the basis of one incident, where no-one has any

:41:34.:41:38.

firm proof, yet, that these people were guilty. No, but Magnitsky did

:41:38.:41:43.

uncover the fraud. He did uncover the fraud. But there is still a

:41:44.:41:49.

question over who actually was involved in the events leading to

:41:49.:41:54.

his murder. Cliff Kupchan, the question of this list, importantly,

:41:54.:42:00.

it calls for freezing of assets. Now, without firm proof, you know,

:42:00.:42:10.
:42:10.:42:12.

can America go about freezing the assets of Russian citizens?

:42:12.:42:15.

firm proof, there is very little attempt by the Russians to look

:42:15.:42:21.

into what happened to Mr Magnitsky. The President called for an

:42:21.:42:24.

investigation and nothing really happened. In fact, further charges

:42:24.:42:31.

have been brought against Mr Magnitsky, posthumously. This is a

:42:31.:42:36.

very unfortunate affair. I think that it also very much got involved,

:42:36.:42:39.

we haven't talked about the other half of the coin here, the other

:42:39.:42:46.

half of the story, which is that this Magnitsky Bill, was linked to

:42:46.:42:51.

legislation, that allowed American companies to take advantage of

:42:51.:42:55.

Russia's WTO accession, which Russia very, very badly wanted.

:42:55.:42:59.

There was a quid pro quo in American politics. This will very

:42:59.:43:03.

much promote US-Russia trade, but on the other hand it will carry it

:43:04.:43:07.

along, because Congress insisted that human rights be addressed, it

:43:07.:43:10.

carried along this much more controversial act. First of all,

:43:10.:43:15.

the argument that the President and the Putin didn't investigate it

:43:15.:43:19.

properly. Your country didn't investigate the war in Iraq

:43:19.:43:23.

properly, you can go down this road and never stop. The point here is

:43:23.:43:30.

this, this is an act, which has this poisonous element in it, and

:43:30.:43:34.

they are accusing people of something that hasn't been proven,

:43:34.:43:39.

and, and, freezing other people's assets, the citizens of another

:43:39.:43:44.

country. This can open a floodgate that such thing nobody can stop

:43:44.:43:50.

them. In the Kremlin, behind the facade of the Kremlin, is there a

:43:50.:43:54.

lot of saber-rattling going on, or do you think it will be resolved?

:43:54.:44:00.

think that Putin will sign that bill. I think that it will stay

:44:00.:44:03.

there. I don't think that economically, business-wise, we

:44:03.:44:06.

will have problems. I think it will develop. But the stand-off will

:44:06.:44:11.

continue, obviously. Just talking, and picking up now what President

:44:11.:44:14.

Putin said earlier, in terms of spilling over into other elements

:44:14.:44:18.

of relations. Let's talk about, for example, relations over Syria,

:44:18.:44:22.

relations over Iran, do you think the Russians will, there was some

:44:22.:44:25.

accord, we thought there was going to be some meeting of minds on this,

:44:25.:44:29.

do you think there will be a firming of attitudes on this?

:44:29.:44:33.

think there will be problems. Syria will be obviously, they won't agree

:44:33.:44:36.

on Syria at the moment, and Iran as well. But this particular case, I

:44:36.:44:41.

don't think it influences that. Clearly, Cliff Kupchan, the fact is,

:44:41.:44:46.

the Americans are prepared for a backlash? The Americans are

:44:46.:44:51.

prepared for a backlash. And I don't think that one particular

:44:51.:44:57.

issue can become compartmentalised. That is the great fear here. That

:44:57.:45:03.

the road to settling the Iranian nuclear crisis leads through Moscow

:45:03.:45:07.

and Syria it leads through Moscow. We have serious differences on

:45:07.:45:10.

National Missile Defence. If, indeed, Mr Putin signs this bill, I

:45:10.:45:14.

happen to think there is a good chance he won't, he left himself a

:45:14.:45:18.

big, big trap door in the conference today. In the news

:45:18.:45:20.

conference. His own Foreign Minister has condemned it, the head

:45:20.:45:25.

of the Upper House has condemned it. The minister in charged of

:45:25.:45:28.

implementing it has condemned it. In your view, do you think that

:45:28.:45:33.

behind the scenes, there is a lot of negotiation and diplomacy going

:45:33.:45:39.

on? I actually think Mr Putin got out over his skis here. I think

:45:39.:45:44.

that they floated an idea within his party, United Russia, everybody

:45:44.:45:50.

got behind it, I don't think they expected the huge backlash when his

:45:50.:45:54.

own Government to, especially the adoption provision. I think they

:45:54.:45:58.

will both back down. Just time for the papers. The front page of the

:45:58.:46:08.
:46:08.:46:36.

That's all tonight, we will be here with more tomorrow. Until then,

:46:36.:46:46.
:46:46.:46:52.

with more tomorrow. Until then, good night.

:46:52.:46:56.

Weather warnings are still afoot across the north-east. Particularly

:46:56.:47:00.

eastern Scotland, through the night, and into Friday as well. Some

:47:00.:47:04.

pretty horrendous weather around, we could have further flooding

:47:04.:47:07.

problems. A little bit of mist and fog elsewhere. It could stay grey

:47:07.:47:12.

for the east coast of England for much of the day. It does look dryer

:47:12.:47:15.

than we have seen during the last 24 hours. That is not to say river

:47:15.:47:21.

level won't continue to increase, all that rain needs to make its way

:47:21.:47:24.

down stream. At least it is dryer weather-wise for Friday. If you are

:47:24.:47:28.

travelling stay tuned to the forecast. We have more wet and

:47:28.:47:31.

windy weather to come as we move into the weekend. A dryer day for

:47:31.:47:34.

Wales, the south west, a dryer day for Northern Ireland, it could be a

:47:35.:47:38.

bit murky first thing, that will take time to clear. As we move back

:47:38.:47:42.

into Scotland, we come back into the weather system, which will

:47:42.:47:47.

still be affecting northern and eastern areas. Not just heavy winds.

:47:47.:47:52.

Snow over the Grampians. Into Saturday, more rain makes its way

:47:52.:47:56.

right across the country. That is Friday into Saturday, another amber

:47:56.:47:59.

warning from the Met Office is in force as there is an amber warning

:47:59.:48:03.

out for the night and tomorrow. You can see that is also the same for

:48:03.:48:07.

Saturday, further south through London, Cardiff, Birmingham and

:48:07.:48:10.

As the plebgate story refuses to die, have police/government relations hit a new low? How pawnbrokers are the growth story of the credit crunch. And why President Putin thinks Russia's relations with America are being poisoned.


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