25/03/2014 Newsnight


25/03/2014

Jeremy Paxman's exclusive interview with disgraced Co-op boss Paul Flowers. The rights and wrongs of inheritance tax. And a report on al-Qaeda in Somalia.


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Tonight Paul Flowers, the Methodist minister w left the Co-operative

:00:07.:00:15.

Bank in disgrace, talks exclusively about his downfall and hits back at

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tabloid tormenters. I find the Mail on Sunday and its sudden dough

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fascist far right tendencies that make Vladimir Putin look like a

:00:29.:00:32.

bleeding heart liberal, utterly abhorrent. And he reveals the way

:00:33.:00:40.

Government ministers leaned on the bank to make decisions they judged

:00:41.:00:45.

to be commercially unwise. And there was pressure, certainly from Mark

:00:46.:00:50.

Hobon, and I know that originated with the Chancellor himself.

:00:51.:00:55.

Also tonight is the right to pass on wealth the entitlement of everyone,

:00:56.:00:59.

or the root of personal and social unhappiness?

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The latest Al-Qaeda battlefield. There are probably some people in

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Britain who have never heard of the Reverend Paul Flowers, the Methodist

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minister who became the chairman of the Co-operative Bank, and exited

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after an inept performance in front of the Parliamentary Committee who

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were trying to find out how the bank went belly up. Then he was filmed

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talking about his drug habit. He was nicknamed the Crystal Methodist and

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the caravan moved on. But the supposedly ethical bank has been

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left broken and demoralised. He hasn't spoken publicly about what

:01:57.:02:01.

happened, until now. But before that we have this report. SGLA double

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downfall, the minister who preached ethics, the bank meant to make

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ethical decisions, both brought to their knees by a domination of

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ambition and weakness. In the end leaving a bank that appeared out of

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control. And a chairman whose understanding of the business was

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just helplessly wrongy wrong. Give us an idea of the total asset value

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of the bank? Just over ?3 billion. I'm talking about the assets. I'm

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talking about the assets, on the balance sheet I was looking at the

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balance sheets recently. You are offering me ?3 billion and I'm

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telling you your annual accounts show it at ?47 billion. Indeed they

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did, forgive me. Paul Flowers suggested that the assets were a

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tenth of the size they were. But Flower, Labour supporter, was not

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the only one out of his depth. The ethical bank had gone empire build

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anything way it couldn't sustain. As well as building itself a smart new

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headquarters, the Co-Op gobbled up Britannia Building Society, riddled

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with property debt. Then with Flower as chair, made an audacious bid for

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650 branches of Lloyd's. There was all scepticism in the City about

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whether it could work, but with tacit approval from Westminster, the

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Co-Op's ambition far outweighed its ability to cope. Underneath a

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beautifully crafted image of the bank like no other, regulators

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crawling through the undergrowth found a black hole in the books of

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more than a billion. They became very big, very quickly, by buying

:03:57.:04:03.

Britannia and then by being very ambitious to buy branches from

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Lloyd's. That is a very short period of time for a small bank and

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inexperienced bank like Co-Op. Any other business with lots of

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experience in acquisitions would find it difficult to integrate those

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businesses successfully. Although the Reverend had boasted Co-Op P had

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staled -- had sailed through the financial crisis. It would be not

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good for someone from the Co-Op bank to be smug, that is not my nature.

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The loans went back and the Lloyd's deal collapsed, quickly the Reverend

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was out. There was further to fall. The minister was caught newspaper a

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drug and sex scandal. Caught unwares by the Mail on Sunday. Behaviour he

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described as "stupid" and "wrong". Police searching his house

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investigating his conduct. Reverend Flower, as is, s as well as a

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collapsing bank hurt members. A bank founded in the 19th century,

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with the intention of looking after our morals as well as our

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hard-earned money. This bit of the co-operative movement is having its

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own cataclysmic moment where it has to think about what it is about. It

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might be something very different in terms of the public view of it. The

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Co-Op was meant to be different? It was, and it was different. I do

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think it was different. It made two or three errors all at the same

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time. But this has been a terrible episode for a movement with a

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history that's been worth preserving in stone. Neither its Victorian

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founders nor many of the movement's current members would have approved

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of the Reverend's exploits, how did he find himself at the top of a

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rapid low expanding bank in the first place. Well this flimsy three

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pages a record of his approval interview with the regulators. In it

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he asks for the fullest, possible training, but promises to ask

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forensic and tart questions. The regulators themselves though will

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now surely wish they had asked for forensic questions of him. Reverend

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Flowers has been followed out of Co-Op's door by the man brought in

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to save the group. Euan Sutherland announced it was ungovernable.

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Yesterday the bank had to write off another ?400 million to pay for

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other mistakes of the past. Yet it is Reverend Flowers, more than

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anyone else, whose faults came into focus. The bank and his error's

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rewriting history of this proud ethical know. Movement few wanted to

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write. Earlier today I went to man chest Tory meet Paul Flowers. What

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has the last year been like? Interesting! TRANSMIT

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I resigned from the bank, and it was a joy as it was on my birthday and

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there were a few months that have been hellish. Because I knew I

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particularly needed to find some professional support for the issues

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that I was facing, I actually booked myself into a very well known

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hospital for four weeks from the end of November until Christmas Eve. I

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underwent what was called their addictions treatment programme for

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the 28 days that I was there. I found that both cathartic and

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traumatic. But it actually helped me to look at, not so much the

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superficial issues of the addictions themselves, but the more deep-seated

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reasons why people resort to any sort of addiction. And for me that

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was I think life-changing and I continued to go there every week for

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therapy. Can we go back then to the question of the chairmanship of the

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bank. Yeah. What was it that made you think you were qualified to run

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a bank? I didn't and it wasn't my job to make a judgment about whether

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I was qualified, others made a judgment that I was the right and

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appropriate person to be the chair at that particular time. There was

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panel, which interviewed four of us, who were candidates for the job. I

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was the unanimous choice of that panel. I was then the unanimous

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choice of the bank board. I was then the unanimous choice of the group

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board. And I then went again to the FSA for a further interview to see

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whether they thought I was fit to be chair of that bank board. I was

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prepared for this by a very hellish mock interview. A bit like you at

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your worst really if I might be so bold. And they took me to hell and

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back in terms of questions. But the FSA had a really wonderful

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conversation about philosophy and ethics and issues that were around

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and their panel approved me. It is not for me to make a judgment about

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whether I was qualified, a range of other people at the time said I was.

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You weren't a banker? No, but I wasn't put in as banker. I was put

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in as operator, a representative of the Co-Op Group, and I had a job in

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terms of governance Did you know the extent of the problem after the

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merger with the Britannia Building Society? Nobody did, forgive me.

:10:23.:10:31.

Hindsight is a wonderful science, if can I be so bold. We took over the

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Britannia effectively in 2008. There was a merger. But effectively it was

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takeover. I inherited that when I became the chair in 2010. At the

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time of the takeover of Britannia I recall and still have the documents

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at home, there were three separate pieces of due diligence, done by

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accountany firms, KPMG for us and fancy merchant bankers who Mr Paid

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paid vast amounts of money to do it. All said it was a good deal. All

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pointed up dish use with the corporate lending book, but that

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lending book could be addressed by what are called fair value

:11:26.:11:28.

adjustments in the accounts. That is precisely what we did. And we did it

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in thorough consultation with the FSA at the timecisely what we did.

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And we did it in thorough consultation with the FSA at the

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time. They didn't pick it up and neither

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did the FSA at the time. How much pressure did you come under with the

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Lloyd's issue? Specifically from the present Government, mainly from

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Conservatives. They wanted a deal. Remember that the Government was,

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still is, the major shareholder of that bank. Because of the structural

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support that it had needed back in 2008. Clearly they wanted a deal

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which would help them in terms of public finances. They actually said

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that they were keen on this Co-Op becoming a much more significant

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player with more scale. We would have had about seven or eight per

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cent of the market if this had gone through. And there was pressure

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certainly from mark Holbon and I know that originated higher up with

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the Chancellor himself. What form did this pressure take? Regular

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calls and regular checks to see whether or not they were progressing

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well. And I mean two or three times a week calls from the junior

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minister. They wanted a deal and they wanted us to do it. They might

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say no now, but I know that's what they wanted. That was the pressure

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they were applying. You are painting yourself as an

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innocent abroad? I'm not innocent. I take full responsibility for the

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decision that is we took. And indeed I resigned because I believe it was

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right for the chair of the board to take responsibility, although all

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the decisions taken were not by me personally but by the board as a

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whole. But resignation was an admission of inadequacy wasn't it?

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No, it was an admission that things had gone wrong. And as the person in

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the chair, I should take responsibility for it. How is it

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then, if you were cognisant of what was going on and you weren't an

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innocent aBROSHGSD how could you possibly appear before -- abroad,

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how could you possibly get the assets of the bank out by a margin

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of ?40 40 billion. Ill-prepared and not ready for all the questions and

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in particular put off a tad by the aggression of some of the members of

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that committee and the clear attempts that some of them were

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making, not to ask sensible or rational questions, but to try to

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trip me up and in particular to engage in political points scoring.

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Even so, to say the assets of the bank you say ?3 billion and they

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were ?47 billion? Forgive me, I was wrong, badly wrong. Do you think

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something has happened in the world of banking, which has made it a

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different sort of business to the sort of business, you did once do a

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banking exam years and years and years ago? 40 plus years ago. But

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banking was a different kind of beast in those days wasn't it? I

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think it was a good profession. I think it was largely led by people

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of honour and decency. Is it no longer? There are people within it

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who are people who are honourable and decent. Sadly there are also a

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number of others who are not. And who I think are there for whole and

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whole range of reasons, some of which are to do with their own avari

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correction and their own green -- avarice and their own greed, that is

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very sad. There is another story today about bonus payments in a

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bank. Yet here you are, chairman of a bank belonging to a different set

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of ideals? Sub-scale. Not big enough? Not big enough at all. So

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lots of our efforts as well were designed to try to improve the

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ability of the bank to be able to run an efficient organisation of

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sufficient scale. So you are saying it is impossible in this country to

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run a successful... You are being too dogmatic, you are looking at

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either a white or black picture and not seeing the complexity of the

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grey in the middle. It is not impossible. We confronted a whole

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raft of problems, I believe it could still be possible. And you failed?

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Yeah, we failed so far. But we are still there. And we didn't actually

:16:36.:16:41.

have to take any Government money at any stage. Unlike some of the other

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banks I have to remind you. Given your background, given the ideals of

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the organisation, personally that must have had a tremendous impact on

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you? With respect my role was not to worry about the personal impact upon

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me, I'm there in a representative capacity to try to do a job with a

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range of other people. You are the embodiment of the values of the bank

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as chairman aren't you? I'm one of them, I hope I'm not the only one. I

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hope the organisation as a whole, and I believe it had done, embodied

:17:22.:17:27.

those values. And staff at the time before all this crisis occurred from

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were extraordinarily happy to work with and for us. Have they been in

:17:35.:17:41.

touch with you any of them? One or two but they have been politely told

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by more senior people not to be in ch. One or two of the braver souls

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have been in touch. You have been cast into the outer darkness I

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suppose? I believe even in Dant, he's Inferno there is a chance of

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release. You have fallen like Lucifer? Where do you find Lucifer

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in the Bible Mr Paxman! Then comes of course all the horrible stuff for

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you when you are outed for drugs and rent boys and all that stuff. Had

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you been doing drugs while chairman of the bank? Forgive me saying so I

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think you are aware that there are still some issues to be inquired

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into by the police and that is a question that I think has to remain

:18:41.:18:45.

at the moment unanswered. But will in due course be answered. But it is

:18:46.:18:51.

subject to the police investigation. Let me put it another way, were you

:18:52.:18:57.

involved in drugs, doing drugs, before you became chairman of the

:18:58.:19:08.

bank? No. But that doesn't answer the earlier question. It doesn't.

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And I cannot answer it for the moment. I understand re understand.

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But -- I understand, it does tell us something. When you saw what the

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Mail on Sunday printed about you, what did you think? The Mail on

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Sunday, its sister paper have printed a lot of things about me. I

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remember dear old Michael Foot once decribing the Mail Group as the

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"forgers' gazette". I find the Mail on Sunday and its pseudofascist far

:19:52.:20:01.

right tendencies which, make Vladimir Putin look like a bleeding

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heart liberal utterly abhorrent. The reality is that a considerable

:20:06.:20:11.

amount of what the Mail on Sunday has printed has been pure and utter

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fiction. Why don't you sue them then? Forgive me, suing a newspaper

:20:17.:20:28.

is a rich person's game. Even if I am right as I know I am, and I know

:20:29.:20:34.

that they are wrong, I would much rather just treat the whole thing

:20:35.:20:38.

with the utter contempt that it deserves for it. But there were

:20:39.:20:42.

stories that were printed that were true? Indeed they were. They

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concerned drugs? And with respect those are still the issues which the

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police are investigating. Given your religious background, do you think

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you have sinned? Forgive me it is always much more complex than that,

:20:58.:21:03.

of course I have. And I am in company in every other human being

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for having my frailties and some of my fragility exposed. Most people

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get through life without that ever coming into the public domain. I am

:21:17.:21:22.

no better and no worse, it seems to me, than any number of other people.

:21:23.:21:30.

But of course I have sinned in that old fashioned term, which I would

:21:31.:21:35.

rarely use, I have to say. But I'm like everybody else, I'm frail. You

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know what people think, they think Flower flowers, -- Paul Flowers,

:21:41.:21:49.

Methodist minister how does he end up with rent boys and drugs, a

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Methodist minister? They have not had to live in my skin or bothered

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to inquire about other pressures upon my life. I would not wish to

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talk with them about them because they clearly hold me in complete

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contempt. Do you want to talk about these other pressures in your life?

:22:09.:22:16.

I can do so very briefly. Yeah sure? At the time when things were getting

:22:17.:22:22.

pretty hairy at the bank I had been caring for my mother at home, who

:22:23.:22:27.

was dying, with everything else that was going on and I was weary and

:22:28.:22:35.

stressed. Not least at seeing somebody who I loved die in front of

:22:36.:22:43.

me. And it took a long time. But I would not want to use that as an

:22:44.:22:47.

excuse, it simply happens to be part of the reality that I was facing and

:22:48.:22:55.

which is common to lots of people, most of us have to juggle with a

:22:56.:23:00.

whole raft of different pressures and stresses. It just so happens

:23:01.:23:06.

that I had two or three that all came at the same time. But most of

:23:07.:23:09.

us don't resort to drugs and rent boys? How do you know? What do you

:23:10.:23:13.

most regret about this whole experience? Not taking more advice

:23:14.:23:31.

when I should have done at certain points during several years. And I

:23:32.:23:40.

think in some ways and this probably will sound a tad bitter, but I think

:23:41.:23:45.

in some ways I had been set up to fail in certain areas. Because of

:23:46.:23:51.

the structures of the co-operative and the way in which they encourage

:23:52.:23:55.

democrats within the organisation to move into particular roles. And then

:23:56.:24:01.

to be, frank, they suck you dry and pit you out at the end of it. No-one

:24:02.:24:08.

at the Co-Op has contacted me at all in any way since I left at the end

:24:09.:24:17.

of May. Thank you. Thank you. Our chief correspondent is here. What

:24:18.:24:20.

have we learned from this? I think in a sense we just witnessed the

:24:21.:24:26.

human downfall that went alongside the story of the politician's

:24:27.:24:31.

favourite, the Co-Op bank, the great hope of the banking zest sector

:24:32.:24:34.

turning into a basket case. There are three salient points, one is

:24:35.:24:40.

just how convinced he was now that the Treasury was pushing the deal

:24:41.:24:44.

for the Co-Op to buy more than 600 branches of Lloyds Bank. He talks

:24:45.:24:49.

about Treasury ministers phoning up two and three times a week to see

:24:50.:24:54.

how it was getting on, and making it clear that the Chancellor was behind

:24:55.:25:03.

that. Not much of a surprise, we learned how much he hates the Mail

:25:04.:25:06.

on Sunday, and they have asked to speak to him and he has declined. It

:25:07.:25:11.

is embarrassing for the Government. It is tricky for the Treasury, this

:25:12.:25:15.

accusation that they were the hands trying to push this deal with

:25:16.:25:18.

Lloyd's that was ultimately doomed forward has been made before, it is

:25:19.:25:21.

worth saying that's a pretty different version of events to what

:25:22.:25:25.

Paul Flowers has given in front of MPs before. For their part the

:25:26.:25:28.

Treasury has always denied there was any kind of political interference

:25:29.:25:32.

and of course Paul Flowers is somebody who is very much associated

:25:33.:25:36.

with the Labour movement, it is worth rembering also that the

:25:37.:25:39.

Lloyd's chief executive and chairman on the record have said it was a

:25:40.:25:43.

commercial decision. That said, during that deal myself and many

:25:44.:25:47.

other journalists were hearing time and again from people in the City

:25:48.:25:52.

who were sceptical, not just about whether it was the right decision,

:25:53.:25:56.

but also whether it was feasible. This does again remind people of the

:25:57.:26:01.

awkwardness, that the Treasury was tacitly backing a horse that many

:26:02.:26:07.

thought was a dodgy old nag. In the meantime the Co-Op remain as basket

:26:08.:26:13.

case? Yesterday they had to write off another ?400 million. They have

:26:14.:26:18.

had a turbulent few weeks and an active chief executive in charge of

:26:19.:26:21.

the group. They are trying to plough on. It is worth saying they have

:26:22.:26:25.

managed to stagger on without having to take a bail out from the

:26:26.:26:28.

taxpayer. They found another way of doing that by getting investment

:26:29.:26:32.

from the hedge funds. They are certainly not in a position now

:26:33.:26:36.

where they are free and clear of all the mistakes of the past. They are

:26:37.:26:39.

braced for a series of their own investigations into what went wrong.

:26:40.:26:42.

And tonight they are pretty reluctant to getting into talking

:26:43.:26:47.

about exactly what Flower has suggested. They are working very

:26:48.:26:51.

hard to try to get this done. They are trying to make big changes to

:26:52.:26:54.

the group to be able to survive into the future and they are going to

:26:55.:26:58.

have more very difficult headlines, not just about Reverend Flower and

:26:59.:27:02.

his exploits while he was there but perhaps about some people who are

:27:03.:27:05.

still actually at the group themselves. They may prove difficult

:27:06.:27:11.

to shrug off in the coming weeks. It is a long way from a commitment, but

:27:12.:27:14.

the Prime Minister says he would really like to raise the point at

:27:15.:27:18.

which the Government confiscates money people might otherwise have

:27:19.:27:23.

passed on to their children when they die. Hang on, you might say, he

:27:24.:27:27.

has promised that before, and indeed he has. But he says his plans to

:27:28.:27:31.

raise the threshold for what used to be called death duties have been

:27:32.:27:35.

wrecked by being in partnership with the Liberal Democrats. It points up

:27:36.:27:39.

the fact that this is a more politically and morally charged tax

:27:40.:27:48.

than most. Once upon a time there was a large happy family, a bit like

:27:49.:27:52.

the Walton, they lived in a big house and always said good night to

:27:53.:27:56.

each other. When the elderly couple died, the whole family wept, then

:27:57.:28:01.

they had to sell the house to pay death duties and they wept a bit

:28:02.:28:06.

more. Hardly what you might call a fairytale ending. A long, long time

:28:07.:28:12.

ago, back in 2007, the man who would be Chancellor promised to change all

:28:13.:28:16.

that. The next Conservative Government will raise the

:28:17.:28:20.

inheritance tax threshold to ?1 million. LINEBREAK

:28:21.:28:27.

It was electoral Viagra, a speech that sealed him as the ultimate

:28:28.:28:33.

politician, a game-changer in many ways, forcing Gordon Brown to stop

:28:34.:28:42.

in his tracks and his call fors an early -- for an early election and

:28:43.:28:46.

forcing them to re-think their inheritance tax policy. They decided

:28:47.:28:53.

to create a tax-free limit of estates up to ?650,000 in marriages.

:28:54.:28:58.

Then disaster struck in the form of the financial crisis the Tory policy

:28:59.:29:01.

flew out the window and the coalition agreement with the Lib

:29:02.:29:05.

Dems ensured it never flew back in. The Lib Dems aren't the only ones

:29:06.:29:09.

against it. Many see inheritance tax as fair way to ensure the wealth of

:29:10.:29:15.

the nation doesn't just subside in a few dynasties. All civilisations

:29:16.:29:20.

going back to Rome and through fuedal Europe have had some kind of

:29:21.:29:30.

system where society shares in wealth being transferred from rich

:29:31.:29:33.

fathers and mothers to their offspring. Why? Because the

:29:34.:29:36.

offspring did nothing to deserve the wealth, so we should share in their

:29:37.:29:43.

good luck. And if you don't do that societies OKsify. But there teams --

:29:44.:29:50.

OKsify. There seems to be new life in it, with UKIP looking for their

:29:51.:29:55.

grey votes they broach the same ground. Would I like to go further?

:29:56.:30:00.

Yes I would. I believe people should able to pass money down through the

:30:01.:30:03.

generations and pass things on to the children. The ambition is still.

:30:04.:30:07.

There I would like to go further. It is better than it was, but it didn't

:30:08.:30:10.

make it into the coalition agreement, it is something to

:30:11.:30:21.

address in the manifesto. Something You wonder at the new figure, under

:30:22.:30:28.

?1 million might not be so tempting. Tories are promising expensive

:30:29.:30:34.

things without showing how they will pay for them. Those who came to

:30:35.:30:38.

power on the stark shores of austerity, this upland is sending

:30:39.:30:41.

out a very different message of how much cash there is to spend now.

:30:42.:30:45.

What has happened since 2010 is there is no increase even in line

:30:46.:30:50.

with inflation of the inheritance tax threshold to bring more people

:30:51.:30:54.

in. Rather than increasing the threshold significantly, it has

:30:55.:30:59.

actually been cut relative to price inflation. You might ask whether the

:31:00.:31:02.

need to raise the flesh hold now is a signal of how badly the Government

:31:03.:31:06.

has failed on its own housing policy. Last week the Office for

:31:07.:31:11.

Budget Responsibility predicted that because of rising house prices one

:31:12.:31:15.

in every ten people will become liable to pay inheritance tax over

:31:16.:31:19.

the next five years if it stayed at the current rate. That number is

:31:20.:31:24.

currently one in 20. This street in a posh part of London illustrates

:31:25.:31:29.

the fiscal drag dilemma rather well. It is not just the mansions that are

:31:30.:31:34.

liable for inheritance tax, no it is something far more modest house

:31:35.:31:43.

boat, just short of ?800,000. And don't think this is just a London

:31:44.:31:47.

bubble. House price rises have created a massive fiscal drag all

:31:48.:31:54.

over the country. Areas around Manchester or Leeds where change

:31:55.:31:58.

will be keenly felt. Look closely you will see many story archals

:31:59.:32:05.

right there. So far it is all fantasy, no commitment, just

:32:06.:32:09.

expressions of Tory hope. Do you see this as the perfect ending or a

:32:10.:32:15.

rather grim fairytale. That will depend quite bluntly on whether you

:32:16.:32:20.

think kids deserve their parents' wealth. Mone is an entrepeneur and

:32:21.:32:27.

founder of the lingerie line Ultimo. Peter Buffett is a musician, fill

:32:28.:32:35.

lentist and son of the -- philanthropist and son of Warren

:32:36.:32:39.

Buffett. He joins us from his home in the states. When this happens you

:32:40.:32:46.

will be dead, why do you care? Because Jeremy I work really hard

:32:47.:32:50.

every single day. Like a lot of people for my children and for my

:32:51.:32:54.

children's future. I want them to have that little nest there for

:32:55.:33:02.

their future and for their children and I don't see why I, others,

:33:03.:33:08.

should work extremely hard, pay your tax and then when you die it is a

:33:09.:33:15.

double what happens OKKy and you have to pay it again, it should be

:33:16.:33:23.

stopped completely. Even if passing money on perpetuates social

:33:24.:33:26.

division, you don't worry about that? I should decide what to do

:33:27.:33:41.

with my money and whether I want to give it to charity. The Government

:33:42.:33:44.

shouldn't tax me again when I have already paid. It is unfair and I

:33:45.:33:47.

think you know there is a lot more people that have to pay inheritance

:33:48.:33:52.

tax now because house prices are rising. You pay on your whole

:33:53.:33:56.

estate, so there is a lot more people that have to pay that tax and

:33:57.:34:01.

I have heard some horror stories, where you know someone has lived in

:34:02.:34:06.

the family home for 20, 25 years and they have to actually move out of

:34:07.:34:10.

their family home to pay the tax. That is completely and utterly

:34:11.:34:14.

unfair. They will be dead? They have had to pay it because they have

:34:15.:34:19.

inherited the house and the estate. They need to pay the tax bill and

:34:20.:34:22.

they have to sell the house to move out. Let me bring in Peter Buffett,

:34:23.:34:28.

your father famously supports the inter-Hans tax? That's correct --

:34:29.:34:35.

inheritance tax? That's correct. Do you share that view? I do, my only

:34:36.:34:40.

question would be where the tax is going. That is my personal

:34:41.:34:43.

frustration, if it is going to better public schools and

:34:44.:34:48.

infrastructure that is great. So we might all agree that a Government

:34:49.:34:54.

getting taxes that are doing good things with it is better than

:34:55.:35:04.

shovelling it into a Bonn dog hole. -- boon dog hole. That is the

:35:05.:35:07.

problem with Governments everywhere, this principle that everybody should

:35:08.:35:12.

start off more or less equal is one you subscribe to? Absolutely. Part

:35:13.:35:16.

of that comes down to the question of how much is enough. That is where

:35:17.:35:21.

I definitely agree with my father and have experienced it myself. In

:35:22.:35:25.

what way are you better for not having a great inheritance to look

:35:26.:35:34.

forward to? I could sum it up in phrase, I believe self-respect comes

:35:35.:35:39.

from earning its own reward. So I'm very proud of the life I built

:35:40.:35:44.

myself. I think if I lived off my father's wealth or do in the future,

:35:45.:35:48.

I'm going to frankly wonder if I could have done it myself. Michelle

:35:49.:35:52.

Mone, do you worry about your children ever getting out of bed if

:35:53.:35:55.

they inherit a vast amount of money from you? You know Jeremy I bring my

:35:56.:36:02.

children up with that hard-working, want to succeed background. I just

:36:03.:36:07.

think that you know there is people out there that work extremely hard

:36:08.:36:11.

and it is up to them what they want to do with their money, once they

:36:12.:36:15.

have paid the tax. If you want to give it to charity, if they want to

:36:16.:36:19.

give it to their children. But for me, my will is my kids don't

:36:20.:36:23.

suddenly get all the cash, my kids get it in stages in life. Hopefully

:36:24.:36:27.

they won't get it until they are really old and I will live forever.

:36:28.:36:32.

If they do not get it through any effort of their own? That's what I

:36:33.:36:37.

want to do. I want to work hard in order to make my children's future a

:36:38.:36:40.

bit easier, and in order that they have got that little nest there,

:36:41.:36:44.

they are protected there. I think that's what most parents want to. Do

:36:45.:36:48.

I have three children, I'm a single parent and I don't want my kids

:36:49.:36:53.

struggling, but I don't want them being spoiled as well. I also want

:36:54.:36:57.

to give to charity, but it should be the people's right to do what they

:36:58.:37:01.

want to do with their money once they pay the tax on T I don't want

:37:02.:37:09.

the Government dewhat to do -- deciding what to do with my money

:37:10.:37:13.

once I'm dead. The same amount of money being taxed twice, you tern

:37:14.:37:17.

you pay income tax on t and other taxes no doubt. Then you die and

:37:18.:37:26.

your tax is again on it? To me and I am no tax export, trust me. I'm an

:37:27.:37:33.

expert of being a child of a really rich guy. But you are taxed as you

:37:34.:37:39.

are making it as it is you know flowing somewhere and then if you

:37:40.:37:48.

have held on to it, and basically hoarded it, they are you are taxed

:37:49.:37:52.

because essentially, and this would be my dad as view that you are

:37:53.:37:56.

allowed to make all that money because the system, the structure,

:37:57.:38:00.

the laws, all the rules of whatever world you were making that money in

:38:01.:38:04.

allowed you to do it. There are places in the world where you can

:38:05.:38:07.

make a lot of money and you don't see a dime for all sorts of reasons.

:38:08.:38:14.

It makes sense essentially to say to the system that allowed you to amass

:38:15.:38:18.

a fortune to say, OK, here is some of that back, thatch. It doesn't

:38:19.:38:24.

mean my kids -- thank you very much. It doesn't mean my kids won't get

:38:25.:38:29.

some. But some of it is a payback to the system that allowed you to get

:38:30.:38:33.

it in the first place. A lot of people want to provide and make

:38:34.:38:37.

their children's lives a lot better when they are not. There for example

:38:38.:38:43.

getting them through university. The worst case scenario happens,

:38:44.:38:47.

sometimes they pay the tax on the state they can't afford to go to

:38:48.:38:50.

university, they can't afford to live the life that other people with

:38:51.:38:57.

lots of money do. That has changed today because it has been raised

:38:58.:39:07.

from ?325,000 to a million. Or possibly will be. House prices are

:39:08.:39:11.

rising which means a lot more people will have to inheritance tax, it is

:39:12.:39:19.

unfair and should be abolished. Isn't it the case, on your 19th

:39:20.:39:23.

birthday you inherited a whole lot of stock to the tune of millions and

:39:24.:39:28.

millions of dollars? It became that. When I got it it was actually

:39:29.:39:37.

$90,000, $250,000 today. No and lot of money, no question. It was

:39:38.:39:45.

$90,000 when I turned 1, it allowed me to invest in myself, build my

:39:46.:39:50.

business and did what I did. You have invalidated your own argument?

:39:51.:39:55.

Not at all, my first statement is how much is enough. I'm not saying

:39:56.:39:59.

inheritance is entirely wrong. I'm saying huge amounts of inheritance

:40:00.:40:05.

can be very damaging. I think a little inheritance can be valuable

:40:06.:40:09.

what Michelle said in terms of doing it in stages is a great idea.

:40:10.:40:17.

Where you do you think of when you hear the words "war on terror.

:40:18.:40:25.

Afghanistan, if not Texas. The new front is in Africa, it is

:40:26.:40:29.

underreported because the fight against the murderous bigots is done

:40:30.:40:35.

by African Union troops. Around the town in Somalia they are wage ago

:40:36.:40:40.

campaign against Islamist forces controlling more territory than any

:40:41.:40:43.

other Al-Qaeda affiliate in the world. The BBC's international

:40:44.:40:49.

development correspondent is the only foreign correspondent

:40:50.:40:59.

accompanying the African troops. Soldiers from Uganda head for battle

:41:00.:41:04.

against radical Islamist rebels in Somalia. Africa is the new frontline

:41:05.:41:17.

in the war against Al-Qaeda. Bruted force is being used against Islamist

:41:18.:41:24.

insurgents, not only here in Somalia but the west African nations too.

:41:25.:41:38.

West African nations too. The soldiers going through the fight

:41:39.:41:43.

face a fierce some opponent, Al-Shabab. Somali Government troops

:41:44.:41:52.

are involved too. They are tough fighters but they sometimes lack

:41:53.:41:57.

discipline and are always short of equipment. Without the Ugandans, the

:41:58.:42:10.

Somali army wouldn't stand a chance. If so much

:42:11.:42:17.

Map of the Somali troopsers don't look like they can stay and fight,

:42:18.:42:23.

they can. They are part of a force in Somalia paid for by the west to

:42:24.:42:30.

do a job western Governments won't. As the armoured column approaches

:42:31.:42:39.

the town, Al-Shabab are ready. The soldiers I'm with know what's

:42:40.:42:49.

coming. We are close to the town and there appears to be a firefight

:42:50.:42:53.

happening about 100ms in front of us. Another African Union vehicle in

:42:54.:42:58.

front of us and they appear to be engaging across the bank where the

:42:59.:43:04.

town is. There is some fire coming back in this direction. Some of it

:43:05.:43:22.

was coming in this direction. Shoot straight and kill the enemy! Bullets

:43:23.:43:44.

rain on the Ugandans. Fighting vehicles are caught in the traffic

:43:45.:43:53.

jam from hell. This is the main shopping street in the town. Look

:43:54.:44:20.

what's happened to it now? An Al-Shabab side board, "the Koran is

:44:21.:44:28.

the only path". I'm here under the mosque, OK. He's going to start

:44:29.:44:40.

asking for ammunitions now, any vehicle moving between you and you

:44:41.:44:47.

fast, shoot. Get your speed bigger. After fighting his way into town the

:44:48.:44:53.

general took control. What I'm sure is I have adequate man power, 1500

:44:54.:44:59.

soldiers on the ground and they won't do it to us they won't. The

:45:00.:45:07.

battle has taken its toll. But civilians suffer more. This woman's

:45:08.:45:12.

family was hit by a mortar round. She's the only surviving member. The

:45:13.:45:18.

take on the town was only part of a -- the attack on the town was only

:45:19.:45:23.

part of the offensive across the area where 3 million people live,

:45:24.:45:28.

expect more civilian casualties and more refugees. Somalia has been at

:45:29.:45:38.

war for decades, the human cost to that is incalculable. The governor

:45:39.:45:50.

of the region thanked the Ugandans for coming. I put it to him that it

:45:51.:45:56.

was Somalia's deep plan and private traditions was needed to shore it

:45:57.:46:00.

up. You are saying that sides in Somalia have foreign support? More

:46:01.:46:06.

than us. Al-Shabab, there are fighters who are going to teach you

:46:07.:46:11.

know our youngest how to make suicide. How to make EID. This is

:46:12.:46:19.

from these fighters here. That is the tragedy of Somalia,

:46:20.:46:26.

foreign troops dig in, foreign Jihadists battle against them. The

:46:27.:46:32.

Ugandans have made a significant advance by reaching Corleoli, but

:46:33.:46:38.

they don't control the down. Very soon the annual rains will come and

:46:39.:46:43.

the big MPs of war will be dogged down. Then Al-Shabab will retoot to

:46:44.:46:55.

fight although in a distant and often what seems un-Govable country.

:46:56.:47:02.

All the -- ungovernable country. All the men in the office have been

:47:03.:47:06.

preparing, with the quote that Michael Gove is a not very secret

:47:07.:47:14.

fan of our music of choice, fab-hop. In case it has passed you by, here

:47:15.:47:21.

is live, uncut and wild, its leading exponent, Mr Bean the gentleman

:47:22.:47:28.

rhymer. -- Mr B gentleman rhymer.

:47:29.:47:33.

Hip, hop, hip, hop, you don't stop. # Walking to the bang jan rhythm

:47:34.:47:39.

walking to the beat. # You wake up late for school and

:47:40.:47:52.

you don't want to go You ask your ma please and she still

:47:53.:47:56.

says no. You miss two classes and no homework

:47:57.:48:04.

But your teacher thinks he's class You got a fight

:48:05.:48:11.

On Newsnight to party. You got to fight, for your right to

:48:12.:48:21.

party # That's p-a-r-t-y.

:48:22.:48:29.

Cold winds coming in from the North Sea will be a big feature of the

:48:30.:48:38.

weather over the next few days. A lot of cloud across the east during

:48:39.:48:43.

Wednesday, with outbreaks of rain. In the west fair few showers in

:48:44.:48:48.

Northern Ireland, at least there will be sunny spells developing.

:48:49.:48:49.

Quite

:48:50.:48:50.

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