21/10/2013 Newsnight


With Jeremy Paxman. Why the French and Chinese build our nuclear plants, London house prices soar, the LulzSec hacker meets his tracker and Saatchi says capitalism isn't working.

Similar Content

Browse content similar to 21/10/2013. Check below for episodes and series from the same categories and more!



Chapters four and five of the most charged story in politics right now,


the cost of keeping the lights ablaze. It is with pride that I now


open Calder Hall, Britain's first atomic power station. The Queen


moved a lever, releasing atom power producing electricity into the


National Grid. Once upon time we built nuclear power plants for


ourselves, now we ask competitors do it for us. It may be necessary, but


is it wise? What happened when the hacker met the tracker who got him


convicted. FRMTHS what was the most interesting thing you found on my


hard drive. I found lots of interesting things on your hard


drive! He was behind the Conservative Party's most famous


election poster, why doss Morris Saatchi now think marks may have


been right afterall. He's here to tell us. Glory be to China and


France, out of the goodness of their hearts, and with the promise of


massive guarantees from the British Government, and tax-payers, they are


generously restarting Britain's nuclear energy programme. The Prime


Minister said the Government was securing the country's energy


future. Now there was a time when Britain led the world in this sort


of technology. No longer. None the less, building the Hinkley C Power


Station may create 25,000 jobs. To say that Britain has lost its


lead in nuclear power doesn't adequately describe the decline in


the UK civilian nuclear programme. Today announcing the building of a


new Hinkley C power station, the Prime Minister talked about a


rebirth. It is going to give another kick-start to our nuclear industry,


I think many people will see it is going to provide good, long-term,


well-paid, high-tech jobs for our future. It is also going to provide


low-carbon, reliable, safe, secure energy supplies long into the


future. All of us here know that we are present at the making of


history. But some may regard this as more of a national humiliation.


Britain once led the world in civilian nuclear power. Britain's


first atomic power station. When Her Majesty opened the first one, in the


world at Calder Hall, nobody would think that the new generation of


nuclear power plants would be built and owned by the Chinese and French


Governments. Here is the rise and decline in graph, the decent upturn


is simply due to so unplanned shutdown stations coming on-line.


The trend is down and down fast. There are three reasons for this


decline, the first is technology. It is one of the country's first


generation of Magnox nuclear power stations. Because we got to go


first, we created our own generators, others went down the


safer and more efficient water-cooled route. They didn't want


our technology and we couldn't create the economies of scale that a


big export market would have brought us. We ended up with handful of


different types of reactors that no-one wanted to know about. The


advantage of water-cooled technology, such as the plant


planned for Hinkley Point C, is it is more efficiently, water carries


the heat to make electricity better than carbon dioxide gas, which was


the British approach. The fact that the rest of the world didn't follow


gas-cooled technology left us in deadent. We couldn't export any of


our reactors, our second generation stations. It took a long time to get


them working well. The next problem our nuclear industry has faced is


the market. When Conservative ministers hit the button on energy


privatisation, the nuclear industry was packaged up into British Energy.


Whilst other companies bought up domestic suppliers, ensuring they


always had a market, British Energy didn't. When the energy market


crashed, they had nothing to cushion the fall, they went bust. Sorting


out the mess meant a decade was wasted. Plans to build an earlier


version of Hinkley C was scrapped at this time, when it was deemed


uneconomic. The other problem we had, in the UK, certainly didn't


look like a problem at the time, plentiful North Sea oil and gas.


Just when we needed to be replacing our nuclear power station, it looked


like we didn't need to. FRMTHS in 1973 the French were dependant on


imported oil for two thirds of their energy in their economy. They were


massively hit by the oil price hike and problems of 1973 and OPEC. So


they switched an awful lot of their electricity from oil to nuclear. In


the UK we had oil Gas in the North Sea. Not directly used for


electricity, but certainly great cushion in terms of our overall


energy picture. We still had home mined coal. The case for nuclear


looked weaker than it did in a number of other countries like


France. Then there is the politics, building nuclear power stations are


hugely expensive, huge upfront costs and a long life. So the politicians


who commissioned them just get to take the flack and pay the bills


they probably won't cut the ribbon. What has changed? Well George


Osborne visiting a new nuclear plant being built in China last week has a


sense of urgency that previous politicians just haven't had.


Because after years of underinvestment, there is a real


prospect now of Britain's lights going out within a few years. And


politicians who are blamed for power cuts don't tend to do well. Needing


nuclear power in a hurry, and cheaply, means foreign-owned and


foreign-operated was the only option.


With us now is Dr Sue Ian of the Royal Academy of Engineering, and a


former technology director she is at British Nuclear Fuels Ltd. David


Norris is chairman of Conservative Friends of Nuclear Energy.


Is this a humiliation? No, I see it as good news for the engineering


sector in the UK. Although the current designs about to be built


are overseas-designed, our engineers in the UK have been involved in some


of these designs on the international stage for some years.


It is UK engineers that will help to build the plant and operate it


ultimately. It may be overseas-owned, but there are plenty


of British engineers involved now and in the future. How do you feel


about it? I'm elated we are getting the nuclear power stations finally


built. Doesn't it matter who builds them? Not to me, as the good doctor


was saying before, we have the home-grown effect in my


constituency. Explain your constituency and what the


Aberdeen-effect is? It is lots of expertise going overseas to work in


an industry that you have been brought up, in Aberdeen it is the


oil industry. In my area it is the nuclear power industry. We have lots


of youngsters with good jobs at the moment, with go skills they can


export. The North West dose is st coast is a good breeding ground for


that to happen. We are always told that the future of the economy is in


knowledge, if the key parts of this project is foreign-innovated,


doesn't it make you worry about future of this country? One of the


good things done is to invest in the nuclear manufacturing advance


research centre. A joint venture between the University of Manchester


and Sheffield. This is designed to bring 21st century techniques to the


designs to be built. Although the designs are overseas, the


manufacturing and tools and techniques may well have UK IP


associated with them, as we go through the decades. When you hear


somebody prominent in the project talking about it being muck-shifting


what do you think? They might one day regret their choice of words in


that. Even the British construction industry is a world-class


construction industry with a world-class safety record, as


evidenced by the Olympic Games and the Channel Tunnel. British


engineers are involved in the nuke clear power -- nuclear power


programme, and with the new investment that is about to be made


that will grow. The other thing is we have fantastic university base


here in the UK. Our nuclear courses in our universities like ones here


in Manchester and at Imperial College in London, they are


fantastic international low- renowned courses attracting a lot of


students. There is another element which is Government industrial


policy, doesn't it look at an occasion like this as if the French


got it right and the British got it wrong. I have always advocated that


we should have gone straight into nuclear instead of going into wind


farms. I'm bound to that say, that' the chairman of the Conservative


Friends of Nuclear Energy. I do believe the way ahead is nuclear.


But ?90 as a strike price seems high at the moment. It is ?150 for on


shore wind farms as strike price. EDF is what 80% or so owned by the


French taxpayer. Right? We just flog all these things off? We have not


got at the moment with austerity measures the actual finance to build


these things outright. It is good to have foreign investment coming into


our country to do this. At the end of the day we will be keeping the


lights on and that is really what we are in it to do. You don't wore, you


don't worry? I do worry, I joke in parliament all the time that I could


be the man that signs off the next generation of nuclear power


stations. I really want public subsidy into nuclear power stations


because we are going to have a shortage of energy. We can't be


reliant on gas forever and a day. 2013 looks like we are going to be


80% reliant on gas. We can't have, that we must have nuclear power


built sooner rather than later. We all know what we expect a soldier


to look like right? Pale, spotty, rarely seen outside a darkened room,


tracksuit bottoms and lots of pizza cartoons lying around. That is an


artist's impression of what the defence of this country may hang.


The defence committee is not just committed to cyberprotection, but


cybercounter-attack. The people who can mastermind that campaign won't


be found on the playgrounds of Eton. We're barely ware of it any more,


but our lives are dependant on a digital world that operates unseen.


In parallel to the one all around us. Being wired has changed the way


we do everything, but also means new VUNabilities. So what kind of people


seek to disrupt it? And what motivates those who try to protect


it. There is often little difference between the hackers and those who


track them. Is it time to include hackers in our plans to protect the


nation from emerging cyber-threats? The same people who make very good


malicious hackers can also be very good at non-malicious hacking. I


prefer to look at the skills these people may be bringing rather than


putting labels on the skills. It will be highly beneficial to recruit


hackers, especially at a corporate level. They are scared to do it.


There is wealth of talent underground. Not the place that


industry and the military would orderly look for new recruit, but


they may just have the skills we are going to need. Perhaps the most


notorious of recent hacking groups sprang out of the Anonymous


Movement. A jokey offshoot called Lulsec, that came to worldwide


attention, at first they targeted for laughs. Jake Davies went by the


name of Topiary, he was their quirky spokesman and shaped the on-line


Presence. The youngest was 16. When they turned their hacking skills


against law enforcement, most of the members were eventually tracked down


and sent to prison. Some are now free and thinking about what to do


next with their lives. Those who have been immersed in the world of


hacking talk about it being exciting, even thrilling, about an


intellectual stimulus that's hard to beat. So is it ever possible for a


malicious hacker to turn their skills for good. Is there such a


thing as hacker reHAB! This hacker MustaffaAl-Bassam was convicted with


a sended sentence earlier this year, and is studying computer science.


The computer forensic expert whose evidence helped convict him was


David Day. We brought hacker and tracker together. This is the first


time they have met. What was the most interesting thing you found on


my hard drive! I found lots of interesting things on your hard


drive, maybe some of the more interesting things I'm not sure I


want to talk about now. But I found pretty much every website you looked


at. I found loads and loads of files which you probably thought had been


deleted. I found them in system information folders in place they


were hidden away. Was it thrilling for you to look at someone's almost


life? Honestly? A little bit. He was looking for evidence that he and the


Anonymous hacker T-Flow were one in the same. He doesn't condone


anything he did but can't admire his programming -- ANT help but admire


his programming skills. I don't know if you are aware that you are more


skilled at doing shows things than other people. What is the motivation


DPOR doing it? Being a teenager at the time, the motivation was the


ability to use basic technology to embarrass major corporations and


people in authority. That was a thrill as a teenager. In simple


terms it was just for fun, for kicks? Pretty much. It is like


solving a puzzle or problem solving. If when you complete the problem at


the end you do get quite a sense of achievement. Do you know that's


exactly the same feeling that you get when you are doing forensic work


as well. I think what was more important for the group was showing


the world how these major corporations weren't following basic


security. One of the codefendants in the case was the PR man Jake Davies.


We last spoke to him before the case came to court. I don't feel like a


criminal, I feel like a kid that put the creativity in the wrong place at


the wrong time. Jake sent 37 days in a youth offenders institution in


Feltham, now he said the time he spent off line had a bigger impact.


What changed me was the two years being banned from the Internet,


electronically tagged to my house. The 37 days in Feltham was


interesting. It gave me some good perspective on where our youth end


up when they have done what the state perceives as wrong. Has turned


away from -- he has turned away from hacking and leads a different life,


working in film distribution. The same parts are being stimulated in


the same way but they won't, you get paid at the end of the month rather


than being sent to Feltham. We are often told there is a short-terming


of people with skills in the industry, to protect the Government


systems from attack. The MoD is calling for cyber-reservist, a GEEK


version of the Territorial Army. Is anyone likely to sign up, should


former hackers bother to apply. At the Ministry of Defence's


multimillion pound communication centre, specialists from all three


force, army, Navy and air force, work together to keep the country's


military communications systems secure. Cameras are rarely allowed


in. Each screen we filmed had to be individually vetted. This is the key


centre that operates and defends the UK's military networks worldwide. It


is also where some of the new joint reserve unit will be based and


trained. And the hope is to employ people who are not only from


elsewhere in the military and defence, but also from industry and


people who are not necessarily traditional military material.


Lieutenant Colonel Michael White is the commanding officer of the new


reserve unit. He said the kind of people they are looking for are in


short supply, so they would have to be open-minded when recruiting. If


somebody had a quirky personality but very good at computing, you


might consider them? We will look the individuals in the round as they


apply, we are looking at the capability development rather than


setting hard and fast rules about individual personal traits. If


somebody came to you and they had a criminal record for hacking but all


the skills you were looking for, you wouldn't necessarily rule them out?


If they could get through that security process, then if they have


that capability that we would like, then if the vetting authority was


happy with that, then why not. Simply building cyber s is not


enough. We also have to decertificate. Britain will build a


dedicated capability to counter-attack, and if necessary to


strike in cyber-space. This was the first time that Britain's approach


to cyber s had been spelt out so clearly. That we will not only


defend against attacks but potentionally launch our own. But


the Government may find it hard to attract the talented individuals the


needs, if former hacker Mustafa is typical. If you had the opportunity


to take up a role or assist in trying to prevent threats to the


nation's security, would that be something you would be interested in


using your skills for? For me that would be important, I can understand


the need for a Government to protect itself, but when you go ahead and


stamp on everybody's civil liberties, which we have seen on the


massive surveillance stories broken this year, you will repel talented


people. A stereotypical hacker mentality, often anti-establishment,


may not fit neatly into Government institutions. There is heightened


sensitivity after high-profile leak, such as those by insider Edward


Snowdon, who revealed details of secret masseur veilence by UK and US


groups. So -- mass Surveillance by UK and US Government groups. As a


hacker you have an inset belief, the people who would hire that are


afraid, there could be another Snowdon situation, they don't want


discrepancies in anything. It would be highly beneficial to recruit


hackers, especially at a corporate level, but they are scared to do it.


Are they right to do it? It depends on the hacker. It can be


particularly difficult to get a job in industry after you have been


convicted of malicious hacking. Which in certain situations for


certain individuals is a terrible shame, if they have those abilities


and those skills, some of the best talent and we can't use it. Would


you employ a former hacker? That is tricky. That is very tricky. I think


it would have to be every case on its merits. You have met Mustafa


today, would you employ him? He seems like a really nice lad, and


obviously clearly very talented. I might. A surprise, perhaps, that


there is a growing appetite for hiring ex-hackers, even within the


military, but those prepared to take the risk may find it harder than


they think to win over the GEEKs as defenders of our on-line security,


or as part of a cyberarmy. I spokes to the Defence Secretary Neil


Hamilton and I asked him whether the armed services would employ someone


with a criminal conviction for hacking? The Armed Forces don't


necessarily exclude people with criminal convictions. Each


individual case would be looked at on its MER sits. The conviction


would be examined in terms of how long ago it was, how serious it was,


what sort -- its merit, the convictions and how serious it was,


I couldn't rule it out. In the cyber-world, is there any way to


know how someone has gone from a black hat hacker to white hat


hacker? There are many professional people out there with the skills you


might traditionally associate with the hacker's skills set, who have


never done anything illegal and who scruplously maintain their


activities on the right side of the law. This will be a matter of


judgment in individual cases. But the Armed Forces overall do not have


an absolute bar on people with criminal convictions becoming


members of them. Would a hacker recruited to your cybersecurity


force have to wear a uniform and pass standards of physical fitness?


Well the cyberreserve that we are recruiting will have considerable


flexibility in terms of recruitment criteria around areas like fitness.


Clearly it is not necessarily for somebody who is going to spend their


serving time doing cyber-work, not necessarily necessary for them to


have the same level of fitness as someone who was joining a royal


marine or an infantry reserve unit to do. Will they wear a uniform? The


routine would be that they would wear uniform, but again service


personnel when they are doing and performing roles that are not in


public, don't necessarily need the wearing of uniform, they may not


always need do so. Would they have to have a haircut? The regulations


around The Verves will still apply, but there will be some flexibility


where we're talking about members of the cyber-reservists. What we are


trying to do is recruit the very brightest and the best from across


the IT industry. And use the skills sets that they have got in the


national interest to enhance our cyberdefences, and to help us build


an offensive cybercapability. Can you tell us what a cyber-attack is


please? There are two types, there are cyber-attacks seeking to take


information from the victims' systems and there are cyber-attacks


seeking to deny service to the victims' system, shut them down. The


United States has identified China as the source of the greatest threat


at a Government level. Who is our enemy? We don't, it is not about a


specific enemy, it is about being aware that both our traditional


perceived potential adversaries and also some non-traditional smaller


states do have this capability. There are a number of countries


around the world who have recognised that this is an asymmetric


capability. It is an area whereby building a niche capability, a


relatively small country could have a disproportionate effect. That they


could never hope to do by building up traditional conventional military


forces. Can you tell us what these countries are? I'm not going to name


individual countries. How many are there? There are a number of major


players around the world who are already known to have


cyber-capabilities. There are other smaller countries who are known to


be seeking to develop them. What would a British cyber-attack be


like? I should start by emphasising that this is very naisent


early-emerging technology. But it is possible in time there will be


capabilities to interfere with an enemy's ability to control its


weapons systems. You might be able to deny an enemy the use of certain


weapons systems. You might be able to interfere with the way they


worked. You might be able to do by cyber-intervention, something that


today would be done by a kinetic strike. By bombing or missile


attacks. Would such an take have to be authorised by the Prime Minister?


Well any, we're very clear that the law of armed conflict applies to the


cyber-domain, there is an interesting debate going on


internationally at the moment and quite openly about how the law of


armed conflict should properly be applied in the cyber-domain. We are


very clear that any cyber-activities will have to be lawful and have to


meet the same standards as we require for conventional attacks.


That is to say they will have to be proportionate to the threat that we


were dealing with or the attack that we had suffered.


Another energy company waded into politic today, NPower is going, wait


for it, to put up its prices by an average 10%, just like the other two


that have already announced their hikes. The Government advice to all


those squirming with anxiety or boiling with anger is we should shop


around. Labour, by contrast, promises to cap energy prices for a


while at least. The voters like that idea, which has given the Tories a


bit of a problem. In the Mail on Sunday, the former Conservative


Party chairman, Lord Saatchi pointed out, it is now 21 years since the


Conservatives won an election. The corrosive question for people


like him is whether they can ever do so again. I will be talking to him


in a moment or two. First we report. With his conference speech, Ed Mill


band set the political weather, and is a said this autumn energy prices


would go up and so they have. The number of Labour voters


satisfied with their leader is up by 22 points since the Labour Party


Conference. The party's overall lead on the Tories hasn't extended. Some


Tories are delayeded with the energy price freeze. They believe that he


resusitated Markism, and it is no longer a plaque on the wall. There


are two camps with how to deal with the energy freeze from Ed Miliband.


Some believe they don't have to do anything and figures say that it


shows the purring purring along. Then there is the tax camp,


believing to give people more money back. The third camp is competition.


That Ed Miliband is right the energy companies need to be cracked down


on, but the Tory answer is competition.


Vast sections of the country favour action on the utilities companies.


In one recent poll only 12% trust gene companies to treat their --


energy companies to treat their customers fairly. 3% don't. 3%


support plan to freeze energy prices for 20 months. But the Labour


leader, pollsters say, has to convince voters a little more if


he's to capitalise on this. David Cameron is a veteran of


election campaign, but one colleague of his from this, a 1992 campaign,


none the less urging him to realise the new threat posed by Ed Miliband,


one-time Tory chairman, Lord Saatchi said unfettered capitalism will help


Labour into power, Ed Miliband has set the weather and the Tories need


to dress for it. Lord Saatchi is here. You think that


Marx might have been right? I really would like it, I would like him not


to be proved right. The particular aspect of his prophesis, which


worries me, which is why I wrote the article in the Mail on Sunday is he


forecast that after years of warfare amongst capitalists, there would be


fewer and fewer capitalists controlling vaster and vaster


empires, that seems an accurate prediction. I would be alarmed if


that was allowed to take hold and what it says behind me, "capitalism


isn't working "became what people believe. Then they might turn to


state socialism, and state control as a free market system that they


don't regard as being effective. The energy, as you have been dealing


with in the programme, this is a key test for public opinion. Absolutely,


it is clear where public opinion resides in this, it is also quite


clear that when David Cameron says that people should shop around, he's


talking nonsense really isn't he? He's expressing what is the true


faith of Conservatism. That is at the root of Conservatism is free


market competition. This is what we believe in. It strikes at the heart


of Conservative belief to find a situation in which there isn't real


competition. I think the Prime Minister is expressing the view


that's what he wants. That's what Conservatives want. But it isn't


what we have got, we have cartel? That is true. So now here you have a


serious problem. That's why I wrote what I wrote. How did the


Conservatives find themselves on the wrong side of the fence on this? I


think the solution that Labour proposes is a solution that we don't


want. Because what is the solution? The solution would be some kind of


state control. Our solution more in keeping with free market views would


be that the market should operate. That is what the Prime Minister is


saying. But the market isn't operating? People should be able to


shop around. This the market isn't working? If globalisation has, as an


unintended consequence of globalisation is the creation of


global cartels, that is a major problem. As you are seeing with


energy will come to many other categories, people will come to the


conclusion that the free market competition is not working, because


there is not enough competition. That is what I'm trying to suggest,


this is something we must watch out for very carefully, which Labour


could exploit if we don't. We must make sure they can't. If the


consequence, you believe in the market because you believe it makes


people free isn't that right? If you asked me what is the actual


fundamental belief of Conservatism, I would say in one word it is


freedom, independent, individuality, self-determination. It hasn't led to


freedom has it? Energy is a classic case, it hasn't led to freedom, if


you can't afford to pay the bill it is an interesting and philosophical


idea but that is all? Let me go on with basic Conservative belief, will


that help? Yeah. Let's say the fundamental Conservative belief is


freedom. Now let me ask you this, is there a connection between freedom


and money? I would say that there is. To deny that would be


hypocritical. I take as my case Professor JK Galbraith, he said, I


think it is very memorable, he said "the greatest restriction on the


liberty of the citizen is a complete absence of money". Therefore what


Conservatism should aim at is that people will have more money. How


will that, in order that they can be more free, you take my point. In


other words there is a moral purpose to Conservatism which it is very


important important to express, it could lead people to the view that


Conservatism is only interested in money. We are interested in money,


but the root is to the highest thing of all, freedom. What do you think


the Tories should do? I am the chairman of a fine body called the


Centre for Policy Study, created by Margaret Thatcher some years ago. It


was responsible for iconic policies that allowed the Conservative Party


to win many elections, including of course you can own your own home,


the sale of council houses. We are going to have to develop and we


will. A policy, just one, more than one is already too complicated,


before the next election that has the iconic status in terms of appeal


and simplicity of "you can own your own home". That is our aim in the


Centre for Policy Studies. And we will do it, this will have a big


impact. Do you know what that policy will be about? Yes. Go on? It is


going to be about freedom. It is going to be about freedom and the


connection between freedom and money. We are not going to shy away


away from the fact that to speak about freedom and money is


hypocrisy. The Conservative Party is often accused, are we not, condemned


for being money obsessed. Therefore having a heart of stone. But at the


root of Conservatism is a very high moral purpose. Which is the pursuit


of freedom and independent. When the Centre for Policy Studies produces


this policy, you will see that it connects the aim of freedom with the


need for money. And it will be DRAM Maastricht Treaty, will be dramatic,


culture changing. As someone who has been finding somewhere to live will


be know, the cost of property in the capital has conbeserk. Asking prices


have gone up 10% between September and October. The British obsession


with homeownership is part of the reason. So too perhaps is the


Government's help to buy scheme. But it is also quite clear that many


foreigners are frantic to buy property in London, and in so doing


the city is being made unaffordable to many. Before we talk about it we


have this report. Whose housing boom is it? For four years the rest of


the UK has watched as prime property in central London behaved like it


was part of a different country. Price booms started in London in the


past and went out to the UK. In the capital they have risen 60% since


2009, the rest of the country has some catching up to do. If you look


at the stamp duty take from the two central London borough, Kensington


and Chelsea and City and Westminster, in 2012/13 it was ?7208


million, that is ?78 million more than Northern Ireland, Scotland,


Wales and the north-east and the North West and Yorkshire and Humber


put together. Who are the buyers who can afford prime central London


property? The latest research shows 49% of them aren't British


nationals. The biggest chunk are from other European countries,


followed by buyers from Russia in the former Soviet Union countries,


close behind are buyers from the Middle East, followed by Americans,


Asians, and the rest of the world. To rich international investors,


London property means financial safety. Initially it was an exchange


rate thing, people cashing in at the bottom of the market and weak


sterling. A lot is driven by safe haven places, uncertainty in the


eurozone looking for alternative investments driving wealth into


London. We have also a lot of wealth being generated in immature markets,


they are keen to put their money into a safe, secure and well known


asset. And prime central London ticks those boxing. Buyers are going


off central London, prices rose 8% last year. Central London is so


awash with money looking for a home that it has pushed prices up to the


point where you can't really make money. If you bought one of these


modest sized flats for probably ?1 million, you might get a rent of


?30,000 a year, a 3% return, not much better than savings. Don't


forget you are taking a risk with money. Now those international


buyers are copying an old British habit, they are searching for better


value for money. Welcome to London's latest house price hot spot. A


stone's throw from West Ham's football ground, it may not always


have been a magnet for buyers, foreign or domestic, but it is one


of the few places in London where you might get a house for less than


a quarter of a million pounds. To use a local expression, I'm not


taking the mickey, if you judge an economy by house price, Plaistow is


booming, prices up 15% by January, agents say they are accelerating. On


the weekend more than 30 people were booked into see this three-bed


terrace, on offer at ?240,000. In a sellers' market like this, there is


no need to tidy up. Buyers are looking for what is known as


"potential. This couple are among those hoping to take advantage of


cheap Help To Buy mortgages before prices take off. This isn't for


them. The rooms are really small, for us wanting to start family as


well. They are too small for us. Is that your plan at the moment? In the


next few months, yeah. Is it your plan too Chris? In the next few


years! Ten years ago, if you worked in Dubai and got an ?80,000 job in


Canary Wharf, you would look in the City, for this City high flyer


Plaistow is the best he can get. You are in corporate finance, should be


able to afford stuff? It still means having, if you are buying a ?1


million property you need ?200,000 in the bank. What is the answer?


Bank of mum and dad. Not all buyers are well-healed, born in Vietnam and


brought up in Australia, this man has come to Plaistow because Help To


Buy has priced him out of Leytonstone? It is too hot. I think


it might get worse because they were tightening the lending, now they are


starting releasing it, so everybody can get the loan. It pushed the


price up. So even as an of a -- earner ?40,000, I don't think you


can afford that sort of property in London. Behind London's boom is a


chronic shortage of property for sale and some of the cheapest


mortgages ever offered. If the market is this heated here, buyers


looking for better value for money are going to have to travel even


further out of town. With us now is Michael Goldfrab an American


journalist observing London since 1985 and Isabel Harding, editor of


the Spectator's Coffee House blog. What has gone wrong in your view?


Trends have been going on for quite a long time. The accel RANT in all


of this has been Help To Buy in the last month. What has happened in


2008 we had the crash, it didn't reform the financial services


industry. Money has been thrown at the financial services industry.


Rather than in investing in things that create jobs and business, if


you want a quick return get into bricks and mortar and in London. And


so what's happened is London property is no longer, it is no


longer an investment and shelter for a family to make over a 25-year


mortgage term, it is something for people who want to turn a quick


buck. Just this weekend Jeremy in Hong Kong they launched, there is a


little three storey block of flats in E 15, they are launching it in


Hong Kong to buy it off plan. The people who buy it will never see the


building. That is not healthy is it? It is not very helpful, I think it


is only 28% of foreign investors who are nonresident in the UK. But the


fact is that they are distorting the UK housing market and distorting the


London housing market. And their activity has been increasing since


200 #. In -- 2007. In 2011 the investment in the housing market


alone was more than the Government investment in affordable housing in


the whole of the UK. A good or a bad thing? Not a good thing for people


in London not PRATH at that level. There is another problem which is


supply. The number of households will far outstrip supply in London.


The communities and local Government department estimates I think it is


525,000 new households in the next decade. There is nowhere near enough


homes being built to match that. You are absolutely right, when I was


talking long-term, supply and demand, there has never been enough


supply. One of the interesting things is you hear people, I mean


Conservative politicians saying the Government needs to build house, the


Government doesn't build house, Barrett builds house, what hasn't


been done... The Government has build houses. I know I live very


near some greater London council 190 -- 1900 thousands and they survived


and lovely. It is true that the planning laws are old and should be


revived, what Governments successively have not done is create


an infrastructure that allows the free market to work. I don't want to


sound like Lord Saatchi here. The free market is working, people are


buying property. The market is not working, the market should be about


shelter for people who live in Britain. Why should it be. That is


not the market. There is a limited supply of this commodity and


increasing demand,ering geothe price goes up? Is it a demand for shelter


or a demand for the equivalent of that. One of the really important


things that politicians can do, rather than penalising those at the


top who can afford to move into the high-value properties is protect


those at the bottom. I'm not so worry -- worried that I can't afford


a nice property in London, it is those cleaning offices in London who


can't afford the train fares or the housing. Does that matter? It does,


London has a mixed capital heritage, unlike Paris, you can walk past a


council estate in the middle of Westminster. We have a heritage


where the founder of the olders and largest housing association was an


American bank e Joseph Peabody, that has to be safeguarded by politicians


like Boris Johnson who can create that sort of protection for the


people who keep the city moving and feed the city as well. One of the


things that could be done is for Boris to use his bully pulpit. We


know he doesn't have that much power, but he's good on the bully


pulpit. He says he doesn't care? He was writing today about stop beating


up on foreigners. I'm not, I'm saying let's make the housing market


be about housing and not about some new form of global reserve currency.


There is another thing in London and let's be clear about it, councils


are sitting on a lot of properties, many of them are rotting away. I


come from New York, and in New York in the 80s when I left, the city was


in very bad shape. There were a lot of houses that had been repossessed


by the city. What they did is they started selling them back to people


who couldn't possibly raise a mortgage, like a dollar down, and


you put sweat equity in it, they took these houses that were off the


market and turned them into SDWELings, it would be useful if


councils like Hackney and tower hamlets started putting their houses


back on the market. Southwark Council has been looking out to


Limehouse and Popular, they are thinking about how to increase the


overall housing supply. Boris says don't beat up foreigners but he has


ambitious targets on affordable housing, we can have an argument


about how affordable it is, it is still 80% of market rent. He has the


aim to protect those who can't afford the sky high prices.


Tesco revealed today massive quantities of food and fresh fruit


and vegtables simply thrown away by the supermarket and its customer,


four out of ten apples they sell end up in the tip. Most of those nice


bags of salad decompose, as we say good night, we have been reminded in


2001 decomposition can be quite beautiful.


With Jeremy Paxman. Why the French and Chinese build our nuclear plants, London house prices soar, the LulzSec hacker meets his tracker and Saatchi says capitalism isn't working.

Download Subtitles