:00:07. > :00:10.inception, BBC Three is going off air. Will it be missed from our
:00:11. > :00:18.televisions? And what happens to home-grown comedy now? They're
:00:19. > :00:21.mouthing worse things than that in some places. We speak to presenters
:00:22. > :00:24.and writers, critics and defenders of the channel.
:00:25. > :00:27.Newsnight learns exclusive details of Theresa May's letter to her
:00:28. > :00:34.cabinet colleagues. She asked for stop and search reforms back in
:00:35. > :00:37.December. What's taking so long? The Met says stop and search is
:00:38. > :00:41.changing, and wants the rest of the country to catch up. But there's
:00:42. > :00:44.still mistrust on the streets. We're out on the beat.
:00:45. > :00:46.And trying to connect the world by drone? The next step of global
:00:47. > :01:00.domination for the internet giants. Good evening. Either your office has
:01:01. > :01:03.been reverberating tonight with quotes from Gavin and Stacey, Don't
:01:04. > :01:07.Tell The Bride, The Mighty Boosh and The Call Centre, or else you don't
:01:08. > :01:11.have a clue what I'm on about - which could hold the key to the
:01:12. > :01:14.problem. The BBC has decided to axe the digital tv channel BBC Three and
:01:15. > :01:17.put it solely on iPlayer. The channel, which has promoted
:01:18. > :01:21.home-grown comedy and attracted a much younger average audience, may
:01:22. > :01:24.be the first victim of a push by the Director-General for the corporation
:01:25. > :01:27.to focus on what it does best. Comedians who've made their names on
:01:28. > :01:31.BBC Three have launched a campaign to try and save it. Tonight we ask
:01:32. > :01:43.whether the move is inevitable, and how much money it would really save.
:01:44. > :01:58.Here's Steve Hewlett. No but, yeah, this what happened... Can we go to
:01:59. > :02:02.euro Disney. What's this? Your dad. What's occurring. What's occurring
:02:03. > :02:07.indeed. Having spent ten years getting its started and fighting off
:02:08. > :02:12.legion call, not least from its own former senior executives for it to
:02:13. > :02:16.be closed, the BBC is about to announce that BBC Three, hope of
:02:17. > :02:21.Little Britain, Gavin and Stacey and the rest is for the chap. It will
:02:22. > :02:28.seize to be a broadcast TV channel but will live on, online.
:02:29. > :02:31.For the BBC this is a big statement. Director-General Tony Hall said it
:02:32. > :02:36.was time for tough choices, and here is the first of them. The message to
:02:37. > :02:42.the Government is clear. One senior executive told me it was meant as a
:02:43. > :02:47.wake upical call. Keep cutting the licence fee in real terms and
:02:48. > :02:50.license payers, your voters really won't like it, and this is just the
:02:51. > :02:55.start. We have had news here at the
:02:56. > :03:00.station. Remember the public reaction to BBC 6 Music, a station
:03:01. > :03:04.never more popular than when the BBC threatened to shut it. Plans
:03:05. > :03:08.ultimately abandoned in the face of a licence payer revolt. In a
:03:09. > :03:15.nutshell, and the BBC knows this, there is little public appetite for
:03:16. > :03:22.cuts to be BBC services. So, why BBC Three? Why not BBC Four?
:03:23. > :03:25.If you are to choose between three and four, you clearly choose BBC
:03:26. > :03:31.Three because that is where the audience is going, it is moving
:03:32. > :03:35.online and iPlayer. When BBC Three has done advance screenings of
:03:36. > :03:42.programmes through the iPlayer they have good audiences on the back of
:03:43. > :03:47.it. So BBC Three did attract the younger audiences that auntie
:03:48. > :03:51.craved, albeit with the help of Eastenders repeat and maybe it is
:03:52. > :03:56.well placed to take them with it on line. But how will it be remembered
:03:57. > :04:05.by the crickets and those of us not in the tar debt demographic. Me and
:04:06. > :04:10.my big breasts, I am ginning jer, snog, marry and avoid which ran for
:04:11. > :04:16.five year, these are the programmes that gave the channel the bad name
:04:17. > :04:20.and made it a convenient whipping boy today. As any channel controller
:04:21. > :04:24.knows you have to sandwich the public service stuff, even on the
:04:25. > :04:27.BBC, between programmes that are going to attract mainly because of
:04:28. > :04:33.stupid titles. But back to the sharp end. The BBC
:04:34. > :04:41.still needs to find another ?450 million of cuts, or savings,
:04:42. > :04:47.annually by 2017. So how much money might the BBC save by moving BBC
:04:48. > :04:56.Three online only? Well, there is the rub. Stacy... My God. The big
:04:57. > :04:59.money, some ?90 million, is in BBC Three's content budget.
:05:00. > :05:05.But if you cut much of that, which is after all spent on things that
:05:06. > :05:10.lie since payers appreciate, like programme, while at the same time
:05:11. > :05:13.admitting, that the BBC is spending shed loads on corporate
:05:14. > :05:19.inefficiency, too many manager, too many people, and all of that, which
:05:20. > :05:24.license payers definitely do not appreciate, you can quite easily end
:05:25. > :05:29.up in a bad place. Do you know your flies are open?
:05:30. > :05:35.Even people who were never especially keen on BBC Three... Let
:05:36. > :05:41.me give you a list of distinctive programmes. Help me, I am infested
:05:42. > :05:46.Not to mention Government and politicians for whom the original
:05:47. > :05:53.message was meant might start to wonder what indeed is occurring.
:05:54. > :05:59.Steve Hewlett there, we me Ash Attala, producer of The Office,
:06:00. > :06:05.probably best known for that. Tessa Jowell the cormer Culture Secretary
:06:06. > :06:10.and David Elstein who launched who launched Channel 5ful we saw some of
:06:11. > :06:13.the programmes there and the titles, are the grabbiest bit of what BBC
:06:14. > :06:20.Three did. Give us a sense of what made it so vital? I think today the
:06:21. > :06:25.BBC, who I am a friend of have had a bad day at the office, today they
:06:26. > :06:29.have cut their link to the future, so BBC Three is the main plank at
:06:30. > :06:33.which the BBC connect with their on television with the youth audiences
:06:34. > :06:38.and today, it feels like a 60-year-old man in a golf jumper who
:06:39. > :06:45.has walked into a good night club and turned the music off so he can
:06:46. > :06:49.hear classical music. I am embarrassed. Surprised. It has been
:06:50. > :06:56.fast. They would say he hasn't turned the music off, he has put it
:06:57. > :07:01.on iPlayer. Will the next generation go to iPlayer? . It sends out a
:07:02. > :07:05.message that the youth message should be shoved on line. We are all
:07:06. > :07:10.online, the statistic, they don't even bear it out, a BBC Three
:07:11. > :07:15.audiences watches linear television. It is a slightly middle-aged older
:07:16. > :07:19.man's perception that kids are similarly on line. They like to
:07:20. > :07:24.watch TV in in the way we do. You had doubts about it from the start,
:07:25. > :07:29.but this seems to sort of throw it into a rather stark light, that you
:07:30. > :07:35.know, we have given up on it. Well, I think you know, I take very
:07:36. > :07:43.seriously what Ash has said, and when I was Secretary of State, and I
:07:44. > :07:48.was asked to approve two new channels in 2002, BBC Four, which
:07:49. > :07:54.has been very successful, BBC Three, I turned back the first submission
:07:55. > :07:57.for BBC Three, because I thought it was insubstantial, implausible and
:07:58. > :08:02.wouldn't add anything to the BBC. However, the then Director General,
:08:03. > :08:07.and chairman of the Governors were passionate for all the reasons that
:08:08. > :08:14.Ash is giving about the importance of there being a BBC channel, that
:08:15. > :08:20.appealed to 16-34-year-olds. It is a wide demographic. And it got there?
:08:21. > :08:24.They took it away, they reworked it, it came back it was a better
:08:25. > :08:30.proposal, and on that basis, I approved it. And I think the
:08:31. > :08:37.important question is the one which Ash has put, which is does this mean
:08:38. > :08:42.that the BBC is giving up on mainstream connection, with
:08:43. > :08:47.16-34-year-olds. David, I imagine that image of the middle aged man in
:08:48. > :08:53.the golf jumper will have BBC executives reaching for the sink at
:08:54. > :08:57.this point. The irony is stronger, because all the savings that might
:08:58. > :09:02.be made out of BBC Three will have to be applied to filling the hole in
:09:03. > :09:05.the BBC pension fund so it is BBC pensioners who will benefit from
:09:06. > :09:13.these cuts more than anybody else. But look, the truth of the matter is
:09:14. > :09:19.this, the BBC is in financial fix. The coalition cut 16% of its
:09:20. > :09:24.spending power in October 2010, and the pigeons are coming home to
:09:25. > :09:30.roost. Something has to go. They tried slicing, everything gets worse
:09:31. > :09:36.and Tony Hall announced last week I am going to make a big cut, we
:09:37. > :09:42.assumed it was morning BBC Two and four, it is... Why do you think it
:09:43. > :09:48.wasn't two and four? The simple reason is economics. It is just that
:09:49. > :09:52.of the BBC channels, this is the least effective in converting cash
:09:53. > :09:57.into viewer ship. It is basic as that. You have said it is
:09:58. > :10:01.patronising to think a whole youth audience will go to iPlayer, do you
:10:02. > :10:06.think this is a temporary grave then before it gets axed completely or do
:10:07. > :10:13.you think iPlayer could come into its own? Look, iPlayer is brilliant
:10:14. > :10:19.but it is inexplicable they have chosen to act BBC Three as oppose to
:10:20. > :10:27.Four. A service like the BBC has to look, they need to serve everyone. I
:10:28. > :10:32.know they need to make cuts. A BBC Four audience can migrate to BBC
:10:33. > :10:36.Two. A BBC One audience serves the whole family. A BBC Three have
:10:37. > :10:40.nowhere else to go on BBC television, they have been today
:10:41. > :10:45.marriage prized and something that is worse, BBC has got whiter, older,
:10:46. > :10:48.and more middle class, because it is the BBC Three audience that is the
:10:49. > :10:55.most diverse of all the BBC channels. I guess the problem always
:10:56. > :11:00.was that it felt like it was on commercial territory, there were all
:11:01. > :11:07.the Fours that could do that. The MTVs. Exactly, this is I suppose one
:11:08. > :11:13.of the ways in which the decision is made easier, but we knew that, I
:11:14. > :11:18.knew that when I gave approval to the channel. It was a crowded market
:11:19. > :11:24.place, there are other channels, but the important thing about this, was
:11:25. > :11:27.that this is the BBC serving this population of young people. I am
:11:28. > :11:32.trying to get a sense from you, when you signed it off and you were clear
:11:33. > :11:42.you didn't like the first proposal, did you sign it off thinking "This
:11:43. > :11:49.is doomed"? No, I didn't, because I was persuaded by the by Greg Dyke
:11:50. > :11:54.and it is a compelling case, that the BBC are a great institution,
:11:55. > :12:00.national institution, has got to keep on kind of replacing, you know,
:12:01. > :12:06.the people, the license fee payers who die, and extend its reach to
:12:07. > :12:11.much younger people. I do accuse -- actually, and this is a slightly
:12:12. > :12:16.off-piste point on this, I think the BBC has sometimes got to say to the
:12:17. > :12:20.Government, this is the license fee payer's money, it is not part of
:12:21. > :12:24.your spending round, it comes from a different source. They pay ?145...
:12:25. > :12:29.What should they have done with things now? Are you saying there
:12:30. > :12:36.shouldn't have been a decision taken today is? You say it is a compelling
:12:37. > :12:41.argument -- argument. I think wait and see, whether the audiences do
:12:42. > :12:51.migrate, these young people do migrate, to iPlayer. It is too late,
:12:52. > :12:57.if they don't. I am not saying defend BBC Three at all costs, what
:12:58. > :13:01.I am saying is that you have to find another way, if the BBC wants to
:13:02. > :13:06.continue to appeal to younger people, of doing that, or give up on
:13:07. > :13:09.that cause all together and that would be a Piti. What a strange
:13:10. > :13:14.thing to give up on young people, what a strange thing to marginalise
:13:15. > :13:19.young people, of all the channel, what a weird message to say to the
:13:20. > :13:26.license fee payers of tomorrow there is no television channel aimed at
:13:27. > :13:32.you. There is plenty aimed at them. E 4 is much more efficient and it is
:13:33. > :13:36.publicly owned. We we are going to spend public money on reaching 16-34
:13:37. > :13:41.we would be better off spending it there. Can you save this money by
:13:42. > :13:52.putting it on iPlayer? Of course not. Putting any of the 8 85 million
:13:53. > :13:57.budget is going to be more ineeffective than the current
:13:58. > :14:01.situation. The correct answer is, inject more of this investment in
:14:02. > :14:06.programmes that appeal to young people in BBC One. It's a general
:14:07. > :14:10.list channel. Long before BBC Three and four were thought of the BBC was
:14:11. > :14:17.brilliant at delivering comedies that appealed to all ages. Do you
:14:18. > :14:21.think it will go? What is important is candour about responsibility for
:14:22. > :14:27.that group of license fee payer, and I mean, as far as I am concerned, I
:14:28. > :14:32.don't feel wedded to the continued existence of BBC Three, I do feel
:14:33. > :14:37.wedded to the BBC believing it has a responsibility for those younger
:14:38. > :14:40.people, and not simply saying welling, we will close down BBC
:14:41. > :14:50.Three and whether or not you know, young people go to iPlayer is not a
:14:51. > :14:56.matter of concern to us. You have to have another plan. The BBC trust
:14:57. > :15:01.will adjudicate on this. But I do not see that they can veto it unless
:15:02. > :15:07.they have a better way of saving the money. That is their problem,
:15:08. > :15:09.shortage of cash. Downing Street has denied
:15:10. > :15:12.suppressing a report suggesting that immigration has had less of an
:15:13. > :15:16.effect on British jobs than first thought. Number ten say it isn't
:15:17. > :15:19.finished yet, but hinted it would be published imminently. Labour and the
:15:20. > :15:22.Liberal Democrats are calling for it to be released now and senior
:15:23. > :15:25.members of the Government have given their reaction. Let's hear what the
:15:26. > :15:32.Deputy Prime Minister Nick Clegg said today. On the immigration
:15:33. > :15:38.report, this is not a report that has percolated its way up to my
:15:39. > :15:42.desk. The Prime Minister and I haven't even read it yet. It hasn't
:15:43. > :15:46.been submitted to us yet. But when it's ready, of course it will be
:15:47. > :15:48.published, of course it will be published. It's really important
:15:49. > :15:55.that the debate on immigration is based on facts. Our policy editor,
:15:56. > :16:04.Chris Cook, who broke the story, is here. So what do you make of that?
:16:05. > :16:12.That clip shows how things have moved on in the past 24 hours. Last
:16:13. > :16:16.night we revealed this piece of research showing that immigration
:16:17. > :16:24.had less of an impact on jobs than had previously been claimed. That
:16:25. > :16:30.report had been buried by Downing Street who would not release it. And
:16:31. > :16:35.then this morning we heard... Last night we were told that it was just
:16:36. > :16:40.an internal report. This morning we were told it was not finished. This
:16:41. > :16:45.afternoon we were told we would get it within the next week. That clip
:16:46. > :16:51.of Nick Clegg shows that complete turnaround. Reading between the
:16:52. > :16:55.lines, how big a deal is this for the government? It is quite bad for
:16:56. > :17:05.Theresa May. She has liked to use the impact on unemployment as a
:17:06. > :17:08.justification for reducing the amount. It is quite bad for Downing
:17:09. > :17:15.Street who are now forced to release it. But it is quite good for the Lib
:17:16. > :17:24.Dems. There are pretty relaxed about immigration was the Conservatives
:17:25. > :17:28.are generally not. This is a bit of ammunition inside the Coalition and
:17:29. > :17:33.pretty helpful for Nick Clegg himself. He has the debate coming up
:17:34. > :17:41.with Nigel Farage. So it will give him some ammunition. Newsnight has
:17:42. > :17:44.learned that Theresa May wrote to Cabinet colleagues three months ago
:17:45. > :17:49.seeking approval for her reforms to stop and search. She outlined the
:17:50. > :17:54.desired to change the laws around these controversial police powers
:17:55. > :17:58.and had the backing of the Lib Dems. Downing Street has said the PM
:17:59. > :18:00.accepts reforms need to take place, but some senior Conservatives
:18:01. > :18:13.believe that changes are being held up by regressive attitudes in number
:18:14. > :18:18.ten. Here's Laura Kuennssburg. This happened more than a million times
:18:19. > :18:22.on our streets last year, often to people doing nothing wrong, all too
:18:23. > :18:33.often to young black men. Stopped... Search... Pockets turned
:18:34. > :18:39.out, questions asked. Were you hear the other day? Even socks and shoes
:18:40. > :18:47.checked for weapons. How many times have you been stopped in total,
:18:48. > :18:54.ever? Over 100. At least. Why do you keep getting stopped? I do not know.
:18:55. > :19:01.It is a black neighbourhood. Do you think it is as simple as that? They
:19:02. > :19:08.think everyone is a drug dealer. Do they ever have good reason to stop
:19:09. > :19:12.you? Sometimes. But stop and search does not work very well. A majority
:19:13. > :19:18.of forces do not know how to use the powers properly. Fewer than one in
:19:19. > :19:25.ten league two arrests. Many more lead to resentment. There he is, he
:19:26. > :19:36.is going to stop us. It becomes mutual, it is like Tom and Jerry.
:19:37. > :19:39.Police always chasing people? Always trying to chase people. No surprise
:19:40. > :19:43.there is a strong argument for change. The Met is already doing it
:19:44. > :19:47.on their own. Your searches but raced on more information. More
:19:48. > :19:52.arrests and crucially, fewer complaints. The Home Secretary has
:19:53. > :19:56.made no secret of her desire to redraft the rules. She promised
:19:57. > :20:01.change months ago will stop now we have learned just how far her plans
:20:02. > :20:06.have progressed. She asked a Cabinet colleague to rubber-stamp the
:20:07. > :20:09.proposals in December. It is clear the Home Secretary is ready to
:20:10. > :20:14.reform. On the 4th of December she wrote, this letter home affairs
:20:15. > :20:19.committee clearance for a package of measures which I intend to announce.
:20:20. > :20:25.I would be grateful for responses by the 12th of December. She argued for
:20:26. > :20:30.changing section 60 powers were police can stop and search without
:20:31. > :20:36.permission. She said I intend to amend section 60 so the test for the
:20:37. > :20:39.powers used is necessary rather than expedient to prevent incidents
:20:40. > :20:42.involving serious violence and to raise the level of authorisation to
:20:43. > :20:46.a senior officer who must reasonably believe that violence will take
:20:47. > :20:50.based as opposed to May. Expect this to reduce significantly the number
:20:51. > :20:56.of stop and search is under section 60. The Met is changing its methods.
:20:57. > :21:00.We are in this alley because there were reports of crack being sold and
:21:01. > :21:06.burglaries. To have trust needs to be changed. The Met knows it, the
:21:07. > :21:14.Home Office believes that, the Lib Dems and Labour agree. One minister
:21:15. > :21:20.told me we have to get on with this. So what is the problem? One senior
:21:21. > :21:24.Conservative described to me of aggressive attitude in number ten.
:21:25. > :21:27.Officials tell us the prime Minister accepts the need for change. The
:21:28. > :21:31.important thing is to get a policy right, they believe, rather than
:21:32. > :21:36.rush. But sources believe there is a lack of will. But if David Cameron
:21:37. > :21:43.or listening to his own former adviser on youth crime, he would
:21:44. > :21:51.hear that it has to happen. In urban communities it will be dangerous
:21:52. > :21:58.because I think it breeds criminals. They will be rewarded for stopping
:21:59. > :22:04.stop and search. People feel the forces that be do not represent them
:22:05. > :22:10.and this would be a message in the right direction. By the The Home
:22:11. > :22:15.Office would the police argued for anything like scrapping the powers
:22:16. > :22:19.altogether. In parts of our cities stop and search, use well, can get
:22:20. > :22:24.weapons and drugs off the street. The powers that help keep people
:22:25. > :22:29.safe. But in the same urban areas like Brixton in south London, who is
:22:30. > :22:33.not just historical anger at Radley focused stop and search but fresh
:22:34. > :22:40.mistrust among teenagers today. It is just another day. This is what
:22:41. > :22:49.the police do, go around harassing, stop and searching. It is about
:22:50. > :22:55.being street smart. I was stopped when I was 11 years old. I have not
:22:56. > :22:59.been stopped since but it was not a pleasant experience. Since then I
:23:00. > :23:04.have despised them more and more. For me they are like criminals in
:23:05. > :23:09.fancy dress. They have got a mob mentality. There were seven officers
:23:10. > :23:13.who stopped me. When they are by themselves they look a bit nervous
:23:14. > :23:27.but when there are a lot of them they are comfortable. These two
:23:28. > :23:33.chaps... The Shadow Home Secretary has had cross-party talks to push
:23:34. > :23:37.the matter forward. The Home Secretary has made up her mind in
:23:38. > :23:43.favour of reform that has not yet got her way. But more important
:23:44. > :23:45.perhaps, the hold-up seems to hurt on the streets. Often in places
:23:46. > :23:57.where relationships between the police and the public need the most
:23:58. > :24:00.to heal. Last night my colleague Kirsty Wark recorded this interview
:24:01. > :24:07.with the Met Commissioner Bernard Hogan Howe. Stop and search are
:24:08. > :24:11.worried that do not have a good connotation for the police. If you
:24:12. > :24:18.look over the years at what has happened, you had section 44 of the
:24:19. > :24:28.terrorism act after 9/11. And more recently section 60. And they lead
:24:29. > :24:33.to random stop and search. For many black people in London that has been
:24:34. > :24:37.their experience with the police. And that has created distrust
:24:38. > :24:41.between communities and the police. Yes because there has been some
:24:42. > :24:48.disproportionality with the number of people stopped. I arrived in
:24:49. > :24:52.2011. We had a public enquiry into what had happened with the riots.
:24:53. > :24:56.But I thought it was important to understand the genetic factors. Many
:24:57. > :25:02.people I talk to referred back to stop and search. If you look at
:25:03. > :25:09.statistics, there is something there I thought we needed to look at. So
:25:10. > :25:13.you took unilateral action? The public were asking me to do
:25:14. > :25:17.something. The Met knew something needed to change and I thought it
:25:18. > :25:20.was possible to do less stop and search and be more effective. We had
:25:21. > :25:29.to maintain community support. search and be more effective. We had
:25:30. > :25:30.the arrest rate is still too low search and be more effective. We had
:25:31. > :25:30.the arrest rate is still too low for comfort throughout the country
:25:31. > :25:36.according to Theresa May. It could be better. Over the past two years
:25:37. > :25:43.we reduced stop and search by one third and doubles the number of
:25:44. > :25:46.arrests to almost 20%. We were just the number of complaints now by
:25:47. > :25:55.almost half and reduced the disproportionality. In black and
:25:56. > :26:02.nonblack? Yes, but at the same time we would just stop and search and
:26:03. > :26:08.also reduced violent. You have reduced under section 16 way you can
:26:09. > :26:15.target a particular area without necessarily much suspicion. Could
:26:16. > :26:23.you were just that by 100%? We reduced it around 92% under section
:26:24. > :26:29.60. What was happening was that borough commanders were under
:26:30. > :26:36.pressure. The automatic response was to put in a section 60 stop and
:26:37. > :26:42.search. But the more the where are the less affected the police where.
:26:43. > :26:47.So we took it down to around one. You still have situations where
:26:48. > :26:54.there is evidence of a young boy, he was 11 and was stopped and searched.
:26:55. > :26:57.Because he had an expensive rail ticket. That can circulate through
:26:58. > :27:07.the community and leave your problems. It is not perfect. When we
:27:08. > :27:12.make a mistake, then we do leave a bad imprint on that child, that
:27:13. > :27:16.family. So it is important to get it right. But I think it is an
:27:17. > :27:21.important power that is really effective when used wisely.
:27:22. > :27:30.Effectively a generation has been lost to you in terms of trust. It is
:27:31. > :27:33.always important to keep trying. It has not always been used wisely in
:27:34. > :27:41.the past. It is impossible that it is possible to keep it and use it
:27:42. > :27:46.wisely. I was entirely open-minded. All the public we spoke to have said
:27:47. > :27:50.keep it, but target the right people and when you do it, do it with
:27:51. > :27:54.respect. But for that message of trust, it is not just about what
:27:55. > :28:00.happens in London at the general atmosphere. Do you want to see new
:28:01. > :28:07.legislation for England and Wales? One thing I would do if I have the
:28:08. > :28:11.power, around those section 60 stop searches, limited by time and
:28:12. > :28:22.geography. I would advertise the more in the areas where the operate.
:28:23. > :28:26.People who live in that area might think their property value would be
:28:27. > :28:32.effective. But I would advertise them better. It is something that is
:28:33. > :28:38.being considered. There has been a big consultation exercise. The Home
:28:39. > :28:42.Office has plans, we understand. Why are they not been implemented? We're
:28:43. > :28:47.waiting to hear what those plans will be. And of course if there is
:28:48. > :28:56.something to learn we will learn from it. The biggest thing is this
:28:57. > :29:01.is the first time the Metropolitan police have listened to concerns and
:29:02. > :29:06.done something about it. That is a big allegation about previous
:29:07. > :29:13.incumbents in your job. I'm not trying to have a go at my bid
:29:14. > :29:16.assessors. Genuinely. But it is time to make a change. It is fair to say
:29:17. > :29:21.that in the past there have been arguments about stop and search. I
:29:22. > :29:29.have said I want to do something about it. What are relations like
:29:30. > :29:34.with the critical establishment? I think they're pretty good. We always
:29:35. > :29:41.have issues that we can debate and argue about. But on the whole it is
:29:42. > :29:46.a good relationship. Would Downing Street do well to listen to the Home
:29:47. > :29:50.Office wants top and search? I will leave it to them to have their
:29:51. > :29:55.debate. I will not get involved. We found a way we believe to improve
:29:56. > :30:01.what we are doing. They will have two decide what they want to do
:30:02. > :30:05.next. It is possible to do less and to get better.
:30:06. > :30:08.Mark Carney will face questions next week about what the Bank of England
:30:09. > :30:11.knew about alleged wrongdoing in foreign exchange markets. The bank
:30:12. > :30:14.has suspended one member of staff, and stepped up an investigation into
:30:15. > :30:17.whether or not its offficials knew about market manipulation long
:30:18. > :30:20.before they acted to stop it. As Andy Verity has discovered, the Bank
:30:21. > :30:21.was discussing the potential for market manupiation with foreign
:30:22. > :30:34.exchange traders as early as 2006. Regulators have said allegation of
:30:35. > :30:39.foreign exchange manipulation are every bit as bad as the LIBOR rate
:30:40. > :30:43.fixing scandal that cost banks billions in fines but now the Bank
:30:44. > :30:50.of England is at the heart of it. At the centre of the allegations a
:30:51. > :30:54.chatrooms, you might use them for gossip but in the city they were
:30:55. > :30:59.allegedly used by traders to swap information on what their clients
:31:00. > :31:02.were buying and selling, ahead of a crucial 4pm deadline when prices
:31:03. > :31:06.were set. If one trader revealed their client
:31:07. > :31:13.was about to buy a large amount of dollars at four, other trader es
:31:14. > :31:17.could be buy them before then. That could drive the prices up. The Bank
:31:18. > :31:20.of England's been investigating whether its First Ladies were told
:31:21. > :31:25.trade es were sharing client information like that, and even
:31:26. > :31:28.whether it condoned it. Today it suspended an official and stepped us
:31:29. > :31:34.investigations into what officials knew.
:31:35. > :31:39.The allegation is that the Bank of England itself was engaged in
:31:40. > :31:42.conversations with leading traders, about the possibility of
:31:43. > :31:46.manipulation of foreign exchange markets, which go back for some
:31:47. > :31:49.year, that is tremendously serious, if there was any knowledge or
:31:50. > :31:53.tolerance of something like this happening, and action wasn't taken.
:31:54. > :31:57.How embarrassing this is for the Bank of England will depend on what
:31:58. > :32:04.happened in a 15 minute converisation here, at BNP par bar,
:32:05. > :32:09.where Bank of England officials met leading foreign currency traders to
:32:10. > :32:13.discuss what was and wasn't proper on the foreign exchange markets.
:32:14. > :32:25.We have seen the official Benjamins of that meeting on the 23rd April
:32:26. > :32:31.2012. Under item six it says: -- minutes. One of the currency traders
:32:32. > :32:35.reportedly took notes, saying at that point the bank was told trader
:32:36. > :32:41.were sharing client information. The bank told the traders it wasn't
:32:42. > :32:47.improper. . You investigating this, what is going on? Yes, the Bank of
:32:48. > :32:53.England does not condone any form of market manipulation in any any
:32:54. > :32:58.contact whatsoever. Today, further Benjamins showed traders raiseded
:32:59. > :33:03.evidence of wefd the Bank of England way back in 2006, yes it was only
:33:04. > :33:09.last October, seven years later that the bank's sister regulator started
:33:10. > :33:12.investigating foreign exchange manipulation. If the bank of England
:33:13. > :33:18.is subsequently found at the end of the review to have known about the
:33:19. > :33:23.activities, which the FSA is investigating it may lead to legal
:33:24. > :33:28.actions, it will be very embarrassing for the bank to have
:33:29. > :33:33.been made wear of those issues some time ago and not to have raised the
:33:34. > :33:38.issues with those banks and other regulators and taken it further.
:33:39. > :33:42.Swapping information on include orders in internet chatrooms is
:33:43. > :33:48.clearly against the rules, and 20 traders have been suspend or fired.
:33:49. > :33:52.But it won't be so easy for regulators to levy fines on the
:33:53. > :33:57.banks if it turns out the bank of England knew all about it. Well, let
:33:58. > :34:01.us talk more about this with Dr Pippa Malmgren, a former economic
:34:02. > :34:06.adviser to George Bush who works in asset management. Thank you for
:34:07. > :34:10.coming in. Clarify for us this whole question of whether something is
:34:11. > :34:14.proper or improper, it sound like the rules have been changed. They
:34:15. > :34:18.are very fluid in the sense that practises that were considered
:34:19. > :34:23.perfectly normal, five or six years ago, now in retrospect don't look so
:34:24. > :34:27.good, in the aftermath of the financial crisis, and I think part
:34:28. > :34:31.of the reason, the regulators like the bank of England were having
:34:32. > :34:36.conversations with people in the market, was to understand how the
:34:37. > :34:41.markets were operating, which is not to say they thought it was
:34:42. > :34:46.inappropriate, or improper, and I think it is still unclear what was
:34:47. > :34:53.improper and what was just normal business practise. Because this has
:34:54. > :34:57.been below the radar, why is -- has it been kept so quiet for so long? I
:34:58. > :35:03.look at it a different way, I think what with are seeing is a systematic
:35:04. > :35:09.effort by policy maker, politicians, to squeeze financial services to
:35:10. > :35:12.find examples of crossing the line and wrongdoing, it started with the
:35:13. > :35:16.LIBOR investigation, that was a success. When you say they are
:35:17. > :35:20.squeezing, you don't think this is inappropriate to go and... I think
:35:21. > :35:25.it is a normal response to a financial crisis that was so severe,
:35:26. > :35:28.it required public funds to bail the institutions out. So in the
:35:29. > :35:33.aftermath of that they are now looking at each business line and
:35:34. > :35:38.trying to discern what practises are occurring and are they appropriate,
:35:39. > :35:42.so as I went through LIBOR, achieved some really substantial fine, then
:35:43. > :35:45.they turned into new areas and now we are talking about foreign
:35:46. > :35:50.exchange and options. We are talking about the bank of England. We have
:35:51. > :35:53.seen it with LIBOR and the commercial banks and the bank of
:35:54. > :36:00.England has said it is auditing staff, and all the rest of it, but
:36:01. > :36:05.if this goes back as Andy suggested, to 2006, and it didn't act as
:36:06. > :36:09.quickly as it could, that is highly embarrassing,isn't it? It is an
:36:10. > :36:15.issue. This question of what was the appropriate stance for the
:36:16. > :36:20.regulator, today their actions in 2006 look different than in 2006.
:36:21. > :36:24.But they are also taking on more regulatory powers. Indeed.
:36:25. > :36:30.Absolutely. So I think, look, let us understand the issue at hand. Every
:36:31. > :36:35.day at 4.00, all of the clients in the foreign exchange market, which
:36:36. > :36:39.every day is roughly four to five trillion dollars a day, there was
:36:40. > :36:42.one moment in time where there was a clear fixed price. That is when most
:36:43. > :36:47.of the clients wanted to trap act, so they would have certainty --
:36:48. > :36:52.transact. They wanted the fixing, so the allegation is not that the
:36:53. > :36:55.fixing shouldn't happen, it is what information was exchanged about
:36:56. > :37:00.clients in the process of arriving at the fixed price, and how much
:37:01. > :37:05.involvement was there by regulators in that process. It is very similar
:37:06. > :37:10.to LIBOR, in that way, then, is there a direct comparison to be made
:37:11. > :37:15.between the scandal? I do think there is, but in the same way that
:37:16. > :37:19.LIBOR systemically pushed the interest rate lower, I with was
:37:20. > :37:23.beneficial to the public and the customer, this maybe true in this
:37:24. > :37:29.case as well, that is not the point. The point is that regulators are
:37:30. > :37:34.looking for examples of transgression, and finding ways of
:37:35. > :37:39.stop the financial markets from engaging in business practises that
:37:40. > :37:41.today make us uncomfortable. Instead of writing a new rule it happens in
:37:42. > :37:45.the course of investigation. When you start looking you find all kinds
:37:46. > :37:50.of other things you weren't looking for. If we are are at the beginning
:37:51. > :37:53.of this investigation, how far do you think this could spread? I think
:37:54. > :37:57.it is going to be quite widespread. Again, because it is not just
:37:58. > :38:04.foreign exchange it is option, which is the business of taking bets on
:38:05. > :38:09.possible future outcomes -- options. Eif I were a poll -- if I were a
:38:10. > :38:13.politician and I was a regulator looking to fine, I would say this is
:38:14. > :38:18.richer territory for success and scoring points. You think it is
:38:19. > :38:25.about trying to find fines? I think there is a strand of that, for sure,
:38:26. > :38:29.but I also think that we could find there were examples of crossing a
:38:30. > :38:34.line, but I also think that what was normal business practise at the time
:38:35. > :38:38.definitely is not acceptable today, and there will be -- they will be
:38:39. > :38:42.judged in retrospect. Very interesting to hear. Thank you.
:38:43. > :38:45.Mark Zuckerberg once told me he wanted to turn Facebook into a
:38:46. > :38:47.global utility, to connect parts of the world that other providers
:38:48. > :38:51.couldn't reach. Now we have a hint at how Facebook
:38:52. > :38:54.might do this - through high altitude pilotless drones that can
:38:55. > :38:59.stay aloft for five years at a time. They're not the only ones. Google
:39:00. > :39:02.have been working on a similar venture, Project Loon, using high
:39:03. > :39:03.altitude weather balloons. Here's our technology editor, David
:39:04. > :39:16.Grossman. While we may have become blase about
:39:17. > :39:22.our online lives, this animation shows that for most of humanity the
:39:23. > :39:25.internet has yet to arrive. Like modern missionaries, the text
:39:26. > :39:27.emperors are looking to spread the wonders of their work to
:39:28. > :39:31.unconnected. When I was getting started with
:39:32. > :39:36.Facebook I could build it because I had access to the internet and a few
:39:37. > :39:42.basic tool, that gave me what I needed to build this for the world.
:39:43. > :39:45.While broadband internet penetration in developed countries is
:39:46. > :39:52.three-quarters of the population in India is it 13%, Africa, 20%, south
:39:53. > :39:57.and east Asia 21% and 45% in Latin America.
:39:58. > :40:01.What is more, the method by which Europe and North America managed to
:40:02. > :40:05.role out broadband simply isn't open to much of the world. -- roll When
:40:06. > :40:10.you are looking at companies like BT they are able to rely on the
:40:11. > :40:16.existing infrastructure that was developed for telephony. In Africa
:40:17. > :40:20.these networks were nerve built, so we have seen very low fixed
:40:21. > :40:28.broadband. Last summer, Mark Zuckerberg, the co-founder of
:40:29. > :40:35.Facebook launched internet.org.uk. What we didn't know, was how he was
:40:36. > :40:39.planning to do it. Now, however, credible press reports suggest
:40:40. > :40:45.Facebook is planning to spend $60 million on a company that makes high
:40:46. > :40:53.altitude pilotless drones that would act like low level satellites. They
:40:54. > :41:02.would fly at over 65,000 feet, above regulated airspace and with solar
:41:03. > :41:11.rechargeable batteries say aloft forify years at a time. I would need
:41:12. > :41:16.thousands though. I can only applaud the initiative, however, I don't
:41:17. > :41:21.think it is going to solve all the problems of Africa, or any other
:41:22. > :41:27.region the world. I believe that there are other solutions that we
:41:28. > :41:35.are currently working on, that are bearing fruit, and that I believe
:41:36. > :41:38.will have bigger impact. Facebook's not the only text joint working on
:41:39. > :41:44.this problem. One, two, three.
:41:45. > :41:49.Google has Project Loon, instead of pilotless drones it would use high
:41:50. > :41:54.altitude weather balloons, when I was there in January I spoke to the
:41:55. > :41:58.architect of Project Loon. I propose something and I can't tell you what
:41:59. > :42:02.this is because we might do it. I proposed an idea I was passionate
:42:03. > :42:07.ant. I thought I have it. They say you know what, this is a good idea
:42:08. > :42:10.but the problem is, most of people who can benefit from this won't
:42:11. > :42:16.because they don't have connectivity. I was like, you are
:42:17. > :42:20.right, I don't know how I could have overlooked that. It is a hard
:42:21. > :42:25.problem. How do I solve that? And many years prior to this I had this
:42:26. > :42:31.crazy idea about you know, using balloons for connectivity, and I
:42:32. > :42:34.thought, well, you know, I don't know why this won't work. Let me go
:42:35. > :42:38.back to that idea. So how big a bump would connecting
:42:39. > :42:44.up the unconnected give? According to a study increasing internet
:42:45. > :42:50.penetration to European levels would be worth $450 per person to Africa
:42:51. > :42:56.as well as 44 million extra jobs. According to the same study it could
:42:57. > :43:00.save one million live, including 130,000 children, but it also makes
:43:01. > :43:04.good business sense for the text companies. Ultimately both companies
:43:05. > :43:08.make money from internet ewe San, whether that is social media or
:43:09. > :43:11.search and advertising or video advertising, so they are both
:43:12. > :43:19.interested in building the scale of internet users in the future so they
:43:20. > :43:24.can basically sell advertising, and generate revenues from the consumers
:43:25. > :43:29.in these market, you are currently untapped. So, the scramble for
:43:30. > :43:34.Africa and other parts of the globe is on once more, this time not under
:43:35. > :43:39.the flags of the European power, but under the logos of the text giants.
:43:40. > :43:46.If this works it could represent the biggest single economic advance ever
:43:47. > :43:50.for the developing world. Let us take you through the
:43:51. > :43:54.front-pages before we go. The independent has Chris Cook's story
:43:55. > :44:02.on front. The impact of immigrants of British workers negligible. Very
:44:03. > :44:12.little evidence of overseas workers taking jobs from Britons.
:44:13. > :44:19.The Financial Times has the foreign exchange scandal. Scandal hits the
:44:20. > :44:24.bank of England. It has on its fifth birthday quantitative easing looks
:44:25. > :44:31.to future. The most extraordinary experiment in the bank's history.
:44:32. > :44:34.Middle class is blamed for migration in the Daily Telegraph, and halve
:44:35. > :44:39.your sugar intake say health experts. While British women have
:44:40. > :44:44.been crowned the Queens of leisure, and the Guardian has BBC Three Gavin
:44:45. > :44:52.and Stacey with Tony Hall's plans to move it on to iPlayer. There was
:44:53. > :44:56.major England football team news today. No, not a World Cup warm-up
:44:57. > :44:59.win over Denmark, but the recording of the official song for this
:45:00. > :45:03.summer's tournament in Brazil. A cover of the Take That hit, Greatest
:45:04. > :45:05.Day. Tthe recording features former England players including Gary
:45:06. > :45:08.Lineker, Peter Shilton and Michael Owen. In the absence of a sneak
:45:09. > :45:23.preview, we're left with no alternative but to dig up the 1990
:45:24. > :45:42.version instead. Oh well. Goodnight. # You can be slow or fast. # There's
:45:43. > :46:12.only one way to beat them. # What you are looking at is the master
:46:13. > :46:14.plan. # Playing for England! We