30/04/2014 Newsnight


30/04/2014

In-depth investigation and analysis of the stories behind the day's headlines with Jeremy Paxman.


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Transcript


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Fein is arrested tonight in connection with the murder of a

:00:07.:00:13.

woman killed by the IRA in 1972. We have the latest.

:00:14.:00:17.

How society is dividing into a vast number of have-nots and a very small

:00:18.:00:23.

number of have-lots, and lots, and lots. Why social inequality is

:00:24.:00:27.

predicted to get worse and what, if anything, we ought to do about it.

:00:28.:00:31.

We talk to the French economist who has written what's been called the

:00:32.:00:36.

Das Kapital of the 21st century. On the 25th anniversary of the fatwa

:00:37.:00:41.

pronouncing death on Salman Rushdie, Martin Amis on freedom and

:00:42.:00:47.

fundamentalism. Our latest tribute to Shakespeare: Simon Callow as

:00:48.:00:53.

Prospero. Our rebels are ended, and these are actors, as I foretold you

:00:54.:00:57.

who are all spirits that are melted into air - into thin air.

:00:58.:01:08.

Dramatic developments tonight in the police investigation into the murder

:01:09.:01:13.

of a woman killed by the IRA in 1972. The police Service of Northern

:01:14.:01:17.

Ireland are questioning the president of Sinn Fein, Gerry Adams.

:01:18.:01:22.

Mr Adams says he has always been willing to help the police trying to

:01:23.:01:28.

discover how Jean McConville came to die, although he had nothing to to

:01:29.:01:32.

with it, one veteran IRA man has already been charged with aiding and

:01:33.:01:38.

abetting the murder. Mr Adams said attempts to implicate him are pure

:01:39.:01:42.

mischief. Jean McConville, a widow and a mother of ten was abducted in

:01:43.:01:47.

front of her children, killed bit IRA. She had been wrongly accused of

:01:48.:01:52.

being an ininformer. When do you think you'll see your

:01:53.:01:57.

mummy again? I don't know. Her body was recovered from a beach in 2003.

:01:58.:02:02.

Before his arrest this evening, Mr Adams maintained he was not guilty

:02:03.:02:08.

of Hur perioder. But he presented himself voluntarily to police this

:02:09.:02:15.

evening. I will tell the PSA that I am innocent totally of any part of

:02:16.:02:19.

the abduction, killing, or burial of Jean McConville. I do have concerns

:02:20.:02:27.

about the timing. I volunteered to meet them. I have concerns in the

:02:28.:02:31.

middle of an election about the timing, but I have tried to work at

:02:32.:02:35.

building the peace and I will continue to do that. Allegations

:02:36.:02:39.

surfaced recently in a BBC documentary which included an

:02:40.:02:43.

interview with the former IRA commander Brendan Hughes recorded

:02:44.:02:46.

before his death. In it, he accuses the Sinn Fein president Gerry Adams

:02:47.:02:50.

of involvement in McConville's murder. This woman was taken away

:02:51.:02:57.

and executed. Jean McConville. There is only one man that gave the order

:02:58.:03:02.

for that woman to be executed. That man, right, is now the head of Sinn

:03:03.:03:07.

Fein. The or this evening of such a senior political figure will be

:03:08.:03:10.

Fein. The or this evening of such a as a landmark moment in how Northern

:03:11.:03:14.

Ireland attempts to deal with its past. No-one knows exactly what

:03:15.:03:17.

evidence they have against Gerry Adams, but there's a sense tonight

:03:18.:03:20.

that it will have to be pretty watertight for such a major

:03:21.:03:27.

political gamble to be taken. With us now is the seasoned Northern

:03:28.:03:34.

Ireland reporter Peter Taylor, and Alex Maskey member of the Northern

:03:35.:03:36.

Ireland Assembly for Sinn Fein who is in Belfast. Peter Taylor, the

:03:37.:03:41.

Jean McConville case, remind us what happened. She was accused by the IRA

:03:42.:03:48.

of being a tout, an informer working for British intelligence. She was

:03:49.:03:52.

taken away, abducted in front of her children, and then she disappeared,

:03:53.:03:57.

and she was murdered by the IRA and her body was buried, and ultimately,

:03:58.:04:02.

the IRA pointed out where she was buried and her body was recovered,

:04:03.:04:06.

but it is a terrible, terrible story. No-one has ever been held

:04:07.:04:12.

accountable for it? No. It is really interesting about Mr Adams and what

:04:13.:04:16.

has happened to him. First of all, we've got to remember that he's only

:04:17.:04:19.

been arrested - he has been arrested many times. He hasn't been charged

:04:20.:04:21.

with anything. He is denying it. What it really comes down to is what

:04:22.:04:25.

he has always denied which is that he was never a member of the IRA.

:04:26.:04:35.

I've done a lot of work on this and I remember interviewing the Chief of

:04:36.:04:41.

Staff of the IRA who met Willy Whitelaw with the leadership. When I

:04:42.:04:44.

interviewed him, I asked about the people who are with him, the

:04:45.:04:48.

leadership of the IRA, and I said was Gerry Adams a member of the IRA?

:04:49.:04:54.

He said they were all IRA. I said, "Including Gerry Adams?" Said, "All

:04:55.:05:03.

IRA." If Chief of Staff of the IRA says Mr Adams was a member of the

:05:04.:05:07.

IRA, then I think that's a pretty good chance that he was. Alex

:05:08.:05:12.

Maskey, what do you make of this arrest tonight? First of all, as

:05:13.:05:17.

you've already heard, Gerry Adams has repeatedly rejected all these

:05:18.:05:22.

allegations in relation to the killing of Mr McConville and

:05:23.:05:27.

repeatedly said over many years that he's available and willing to speak

:05:28.:05:33.

to the police about this manner. We believe the manner this has

:05:34.:05:37.

happened, that Gerry Adams has arranged to speak to the police this

:05:38.:05:41.

evening, and been arrested in such a public fashion. We believe it is a

:05:42.:05:45.

political agenda. We want to make the point again that Gerry Adams has

:05:46.:05:49.

rejected all allegations against him. You say there is a political

:05:50.:05:54.

agenda here: you're accusing the Police Service of Northern Ireland

:05:55.:05:57.

of acting in a politically motivated fashion? We believe on the basis

:05:58.:06:02.

that Gerry Adams has repeatedly stated publicly that he was

:06:03.:06:05.

available to speak to police at any time, we're now three weeks into an

:06:06.:06:09.

election, and then this has happened in the manner in which it has

:06:10.:06:12.

happened, and we believe there is an agenda, which is a very negative

:06:13.:06:18.

agenda, and it is regrettable it is happening and should not be

:06:19.:06:21.

happening. You surely wouldn't want to impede a police investigation

:06:22.:06:24.

into an ancient and horrible crime like this, would you? Absolutely

:06:25.:06:29.

not. As I've said, Gerry Adams has said repeatedly publicly, over a

:06:30.:06:32.

long number of years now, that he has always been willing and able,

:06:33.:06:37.

and available to meet the police at any time. Far from impeding Gerry

:06:38.:06:42.

Adams has been able to speak to the police for a number of years now in

:06:43.:06:46.

this regard. This has now happened until three weeks before an

:06:47.:06:50.

election. As far as we are concerned, we republicans will take

:06:51.:06:53.

this as part of an agenda. Depending on what does happen, if Mr Adams is

:06:54.:06:58.

charged - and remember he has only been arrested - if he is charged, I

:06:59.:07:01.

find it difficult to see how they're going to make the charges stand up

:07:02.:07:05.

because I can't see any former IRA man or woman standing up pointing

:07:06.:07:10.

the finger at Mr Adams, and I don't think they can use as evidence

:07:11.:07:15.

perhaps as confirmatory or corroborating evidence the voice

:07:16.:07:18.

from the grave of Brendan Hughes because you can't, whatever Mr

:07:19.:07:23.

Hughes says in that tape-recording, can't be cross-examined in a court

:07:24.:07:26.

of law because he's no longer with us. I think they would find it very

:07:27.:07:31.

difficult to make a incredible case against him, assuming he were to be

:07:32.:07:36.

charged, which of course he hasn't. Do you share a similar view on that?

:07:37.:07:41.

I would expect Gerry Adams to be released fairly soon because there

:07:42.:07:45.

was no case against Gerry Adams, and let's remind ourselves that those

:07:46.:07:48.

people who made statements because obviously we're working on the basis

:07:49.:07:52.

that Gerry Adams is in this position because people have made statements,

:07:53.:07:58.

for example, to the boss, the tapes inquiry, as it has been called,

:07:59.:08:03.

those people who made those statements can have no reliability

:08:04.:08:05.

since they made the statements on the basis they would not be released

:08:06.:08:11.

until they died. There is no reliability or integrity as far as I

:08:12.:08:18.

am concerned - Alex says this very well,

:08:19.:08:23.

am concerned - Alex says this very through much of the

:08:24.:08:25.

am concerned - Alex says this very conflict, a very close friend of

:08:26.:08:28.

am concerned - Alex says this very Gerry Adams. He was

:08:29.:08:30.

am concerned - Alex says this very Brendan Hughes says what he says

:08:31.:08:30.

when he Brendan Hughes says what he says

:08:31.:08:36.

degree of credibility in it, Brendan Hughes says what he says

:08:37.:08:41.

over the peace process. First of all, you're

:08:42.:08:45.

over the peace process. First of comment. They parted their ways,

:08:46.:08:48.

over the peace process. First of unfortunately, and the same could be

:08:49.:08:51.

said for a small number of other republicans.

:08:52.:08:53.

said for a small number of other someone makes a statement for

:08:54.:08:55.

whatever reason doesn't mean to say that it is true. I have to say that,

:08:56.:08:58.

as far as I am concerned, there's not a lot of integrity in a process

:08:59.:09:00.

as far as I am concerned, there's where someone says, "I am going to

:09:01.:09:04.

say what I want to say but you can't use it until I die." I really don't

:09:05.:09:09.

think that is credible, to be truthful with

:09:10.:09:10.

think that is credible, to be Once upon a time, inequality,

:09:11.:09:16.

think that is credible, to be gap between rich and poor was a

:09:17.:09:17.

touchstone of gap between rich and poor was a

:09:18.:09:20.

country, but, by the turn of the millennium, attitudes had changed.

:09:21.:09:24.

Peter Mandelson, one of the architects of new Labour, confessed

:09:25.:09:29.

he was intensely relaxed about people getting filthy Richard, and

:09:30.:09:33.

apart from the occasional flourish with mansion taxes, a version of

:09:34.:09:37.

trickle-down seemed to have held sway. The poor are always with us.

:09:38.:09:43.

According to that rare commodity, a hugely popular new book on

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economics, while inequality reduced in the 20th century, it is now

:09:48.:09:50.

rising and destined to carry on rising. The situation which the

:09:51.:09:53.

French author thinks is hugely dangerous. I'll be talking to him

:09:54.:09:59.

shortly, but first sit back and pay attention to Chris Cook.

:10:00.:10:06.

When it comes to inequality, Thomas Picketty Capital in th 21st Century

:10:07.:10:10.

says we should all worry about capital. Not so much incomes and

:10:11.:10:15.

bonuses. So, what does he an by "capital"? That's anything that can

:10:16.:10:18.

be owned and that generates an income. That can be housing, land,

:10:19.:10:23.

stocks, or shares. That idea isn't new. In fact, the link between

:10:24.:10:26.

capital and incomes is very familiar, not least to readers of

:10:27.:10:33.

Jane Austen and Balzac. He says 19th century novelists and their readers,

:10:34.:10:36.

the two ideas were used interchangeably. The book's big

:10:37.:10:40.

innovation has been to build a massive data set that allows him to

:10:41.:10:45.

look at patterns in the ownership of stuff going back centuries. His

:10:46.:10:49.

research found that, in the 18th and 19th centuries, the value of capital

:10:50.:10:55.

grew faster than the economy at large. So, by 1900, the amount of

:10:56.:11:00.

wealth had grown to aroundseven times national output in Britain.

:11:01.:11:04.

And, since that wealth started off being owned by rich people, that

:11:05.:11:08.

means that the rich pulled away from the rest of us. Now, you can see

:11:09.:11:14.

that in the way that the proportion of national wealth owned by the top

:11:15.:11:19.

one per cent rose, and, the top ten per cent, but, in the twentieth

:11:20.:11:24.

century, things were a little different. First of all, because of

:11:25.:11:30.

war. Between 1910 and 1950, the world wars and decolonisation

:11:31.:11:36.

clobbererd the European rich. All that stuff they had accumulated got,

:11:37.:11:41.

well, blown up, or handed back to other people. Then, after the war,

:11:42.:11:45.

the recovery was historically unusual, partly because it was all

:11:46.:11:50.

catch-up growth. The capital stock grew more slowly in the economy at

:11:51.:11:54.

large and was more heavily taxed. So, owning all that stuff didn't

:11:55.:11:59.

really help the top one per cent power ahead. The rest actually

:12:00.:12:03.

caught up a little bit. Since 1980, however, Piketty thinks that things

:12:04.:12:08.

have reverted to the older pattern. Capital has been growing faster than

:12:09.:12:12.

the economy at large, and, since the rich start off owning more stuff,

:12:13.:12:19.

that drives up inequality. So far, so uncontroversial. But Piketty's

:12:20.:12:26.

thesis is that this trend might well continue. If the rate at which

:12:27.:12:30.

capital grows remains faster than the economy at large, then the rich

:12:31.:12:34.

will keep pulling away, and the world could look once again like a

:12:35.:12:38.

Victorian age. The rich will be rich because of who

:12:39.:12:42.

their parents are, not who they are, and that's a major public policy

:12:43.:12:47.

challenge. Piketty's diagnosis might upset people, but his prescription

:12:48.:12:51.

will make him even more enemies. His proposed solution is a global wealth

:12:52.:12:57.

tax, a policy that he suggests is pretty unlikely to happen. Still,

:12:58.:13:01.

Piketty's data collection and analysis is likely to win him a

:13:02.:13:06.

Nobel Prize, even if his policy suggestions are not taken up.

:13:07.:13:14.

The book has had Guardian-reading North London Liberals smiling into

:13:15.:13:18.

their frappuccinos. I sought out Thomas Picketty and asked him why we

:13:19.:13:23.

should care and inequality. Inequality matters because our

:13:24.:13:27.

democratic institutions can't work properly if inequality becomes too

:13:28.:13:32.

extreme. We need inequality for growth to happen to have incentives.

:13:33.:13:37.

If it is really too extreme, then the unequal voice and unequal access

:13:38.:13:42.

to political influence - When does it become too extreme? There is no

:13:43.:13:46.

mathematical formula for that. We have to rely on history. This is an

:13:47.:13:51.

imperfect guide but this is the best we have. One of the lessons from

:13:52.:13:59.

history is that, for instance, 19th century inequality wasn't good for

:14:00.:14:02.

democracy and wasn't good for growth, either. That was useless

:14:03.:14:06.

inequality, if you wish. There was no middle class then, the wealth was

:14:07.:14:12.

concentrated prior to World War one in Britain or France, 90 per cent of

:14:13.:14:15.

the national wealth would belong to the top ten per cent. This was one

:14:16.:14:21.

of the reasons I think why our parliamentary system was not working

:14:22.:14:26.

as well as it should have. Some people seem to believe that there is

:14:27.:14:30.

nothing to learn from this because the future will be different, growth

:14:31.:14:36.

will be a lot higher. Prior to World War one, this was a time where we

:14:37.:14:39.

invented the automobiles, the electricity, the radio, so this is

:14:40.:14:44.

less important than Facebook but still these are important

:14:45.:14:48.

innovations, so growth and innovation was already there, but

:14:49.:14:54.

growth was not sufficient to prevent very large wealth concentration from

:14:55.:15:00.

happening, and I think there is a lot to concern by going back through

:15:01.:15:04.

time. There are circumstances, are not there, where inequality can be

:15:05.:15:08.

good for a society? Of course. It is all a matter of degree. Look, let's

:15:09.:15:13.

be very concrete. In this country, the bottom half of the population

:15:14.:15:19.

owns about two and three per cent of national wealth. Now, if that was

:15:20.:15:23.

full equality, it should only 50 per cent. I am not saying it should be

:15:24.:15:26.

50 per cent. I am just saying that two or three per cent is very small,

:15:27.:15:33.

and that maybe, you know, it is I think spreading wealth and giving

:15:34.:15:37.

access to wealth is important for our economy, and for our democracy.

:15:38.:15:42.

If you take - Speaking out of ideology there, aren't you? I am

:15:43.:15:47.

talking about poor people who would like to access wealth and become

:15:48.:15:50.

owners. Everyone would like to access wealth. It is one of the

:15:51.:15:55.

triggers for capitalism, isn't it? Some inequality, capitalism doesn't

:15:56.:15:59.

work? Some inequality, but I am telling you that the bottom half of

:16:00.:16:02.

the population who own three per cent of national wealth, so I am not

:16:03.:16:09.

saying it should be 50% but maybe we can make it to five or eight or do

:16:10.:16:13.

you think that three per cent is the maximum that the bottom half can own

:16:14.:16:17.

in order to make the economy work. Why draw another arbitrary figure?

:16:18.:16:21.

There is no mathematical certainty about it. Exactly. What we know is

:16:22.:16:25.

that the share of national wealth going to the middle class has been

:16:26.:16:31.

shrinking over the past 30 years. In this country, and actually across

:16:32.:16:34.

Europe and in the US. Why does that matter? It matters because the

:16:35.:16:40.

question is has it been good for growth? No. Growth over the past few

:16:41.:16:45.

decades compared to the previous period wasn't better. If these

:16:46.:16:48.

trends continue, I think it is period wasn't better. If these

:16:49.:16:53.

benefits to broad segments of period wasn't better. If these

:16:54.:17:00.

that disproportionate share of the benefits from globalisation and

:17:01.:17:03.

economic openness accrues only to top income and wealth groups, I

:17:04.:17:08.

think there is a risk that a passenger part of the population

:17:09.:17:11.

will turn against that. The latter part of the book, you do propose

:17:12.:17:14.

some solutions. Now you say people are free to come up with their own

:17:15.:17:23.

solutions. If there were to be an international wealth tax - well, it

:17:24.:17:26.

is never going to happen, is it? What I would propose is to transform

:17:27.:17:35.

this, given tax revenue a progressive tax on net wealth. That

:17:36.:17:39.

means most people will pay less. If you have ?500,000 property but a

:17:40.:17:45.

president you have ?500,000 property but a

:17:46.:17:48.

not rich. You should pay less tax than someone who has inherited from

:17:49.:17:53.

his property and doesn't have a mortgage. If your net wealth is only

:17:54.:17:57.

?10,000, then the progressive would be 0, and the progressive tax

:17:58.:18:04.

would only start with people above ?1 million. You've identified this

:18:05.:18:06.

as ?1 million. You've identified this

:18:07.:18:10.

presumably, you believe that ?1 million. You've identified this

:18:11.:18:18.

people finding shelter somewhere else but they're everywhere, equally

:18:19.:18:24.

liable to punitive rates of taxation. Who do you want to punish?

:18:25.:18:28.

You want to punish the rich? Not at all. I want to - You don't want - I

:18:29.:18:33.

want to help the middle class. When you have 90 per cent of the

:18:34.:18:38.

population who owns less than 25 per cent of the wealth, I think it would

:18:39.:18:44.

be crazy to say that we cannot do better than that. I think we can

:18:45.:18:49.

spread the wealth more. One lesson of the 20th century is that we don't

:18:50.:18:54.

need 19th century inequality to grow.

:18:55.:18:59.

need 19th century inequality to we don't need the kind of extreme

:19:00.:19:01.

concentration of wealth that we had in Britain but also in France and

:19:02.:19:03.

all over Europe. in Britain but also in France and

:19:04.:19:08.

now? We still have a middle class. There is one big difference to

:19:09.:19:12.

now? We still have a middle class. and one century ago. Today, at

:19:13.:19:15.

least, there is a middle class that owns 20, 25 per cent of the total

:19:16.:19:18.

wealth. That didn't even exist at the time of the-of-down tonne Abbey;

:19:19.:19:26.

of down tonne Abbey. You don't want to get back there for economic and

:19:27.:19:28.

political reasons. Given it to get back there for economic and

:19:29.:19:36.

you think clearly is necessary - That's not what I said. I told you

:19:37.:19:38.

the opposite. Yes, but when That's not what I said. I told you

:19:39.:19:47.

with the problem of disproportionate shares of the national cake, the

:19:48.:19:52.

only way you can do that is by taxation, isn't it? Okay, you can

:19:53.:19:58.

have a mansion tax in this country without

:19:59.:20:00.

have a mansion tax in this country European Union. Number 1. Number 2,

:20:01.:20:04.

of course, it is even better if you have

:20:05.:20:06.

of course, it is even better if you can do more in terms of top

:20:07.:20:10.

of course, it is even better if you progress - is it easy? No. Is it

:20:11.:20:13.

impossible? No. You know, five years ago, everybody was saying that Swiss

:20:14.:20:23.

banks will never renounce seeksy. Then the United States came with

:20:24.:20:26.

sanctions on Swiss banks and told Swiss banks you know, if you keep

:20:27.:20:32.

not sending us information on our taxpayers and how much you have in

:20:33.:20:35.

your banks, we will cut your banking licence in the US. Suddenly, things

:20:36.:20:41.

change in Switzerland. I am not impressed by people who know in

:20:42.:20:44.

advance who will know or will not happen. I think history is full of

:20:45.:20:50.

surprises, and I think the European countries have a lot more to lose

:20:51.:20:56.

than the US from bank secrecy in Switzerland. I think in the future,

:20:57.:21:02.

it is possible with better and more international co-operation,

:21:03.:21:05.

particularly involving European countries and the US to move towards

:21:06.:21:09.

a global registry of financial assets in order to have more

:21:10.:21:15.

international co-operation in the fiscal domain. That doesn't mean a

:21:16.:21:19.

global tax, but that means national tax with more global co-operation

:21:20.:21:24.

between those countries. Thank you very much.

:21:25.:21:32.

While Mr Piketty's tome has provoked debate, today, Ed Miliband accused

:21:33.:21:38.

the Prime Minister of presiding over inequality in the UK. Two years ago,

:21:39.:21:45.

protesters were camped outside St Paul's Cathedral complaining about

:21:46.:21:49.

the fat tax one per cent. What is going on here? Have or have-not?

:21:50.:22:07.

Equal or less equal? Forget the concepts. What is

:22:08.:22:15.

actually happening here? It wasn't so long ago this square

:22:16.:22:21.

was crammed with protesters, furious at bankers' behaviour and angry

:22:22.:22:26.

about the gap between rich and poor. Politicians clambered over each

:22:27.:22:29.

other to look concerned about fat-cat pay, but, through the

:22:30.:22:33.

recession, overall incomes actually became more equal as George Osborne

:22:34.:22:39.

now likes to boast. But that only happened because, as pay fell,

:22:40.:22:43.

benefits continued to rise. That situation is expected to go into

:22:44.:22:47.

reverse. And the gap in earnings has

:22:48.:22:52.

stretched uncomfortably. By 2011, FTSE bosses were taking home 139

:22:53.:22:58.

times as much as their average workers. But the actual UK top one

:22:59.:23:02.

per cent includes not just bankers or bosses, but the best-paid police,

:23:03.:23:09.

doctors, even teachers - anyone earning over ?100,000 after tax,

:23:10.:23:14.

but, in the shadow of St Paul's, arrange is still there. Anger is

:23:15.:23:21.

still there. It annoys me, there should be people they've worked

:23:22.:23:24.

their way to the top. The amount of money you've got up there, when

:23:25.:23:28.

you've got the lowest of the low scrimping and scraping, it is not

:23:29.:23:32.

right. If people are poor, they should go to work more, shouldn't

:23:33.:23:37.

they? I just like earning money. We're going to have a very big

:23:38.:23:42.

social problem because you're going to have all these youngsters that

:23:43.:23:47.

have worked hard for their education and the salary they get, they won't

:23:48.:23:51.

be able to afford accommodation for any kind of decent lifestyle. You

:23:52.:23:56.

think it is as serious as that, we're looking at big social

:23:57.:23:59.

problems? Yes, I think so. You can't hide it. But it is less and less

:24:00.:24:03.

about what you earn or not. No matter how the government tinkers

:24:04.:24:06.

with what you're allowed to keep, it is the influence of what you have or

:24:07.:24:12.

not, your wealth, that's really changing. The gap between haves and

:24:13.:24:23.

have-not haven't - have-notes isn't as big as it was when this square

:24:24.:24:28.

was built, but now inheritance is growing as a share of the whole

:24:29.:24:31.

country's income. For most of us, that's about access to your own

:24:32.:24:36.

slice of bricks and mortar. More people buy homes with cash now than

:24:37.:24:40.

buy for the first time, although Labour and the Lib Dems both vow to

:24:41.:24:46.

tax property raising inheritance tax, few would dare. The value of

:24:47.:24:50.

wealth, even of ordinary wealth, let alone top wealth, became much larger

:24:51.:24:53.

in relation to people's incomes. That makes it very much harder to

:24:54.:24:57.

move a notch or two up the wealth ladder because you need many more

:24:58.:25:02.

years of saving, many more years' worth of income to move a number of

:25:03.:25:06.

rungs up that ladder. That's going to be very difficult for young

:25:07.:25:09.

people to do just through their own saving, and it makes it much more

:25:10.:25:14.

important who their parents and grandparents are, and whether they

:25:15.:25:17.

can help them get on the housing ladder, whether they have a lucky

:25:18.:25:21.

inheritance and so on. This isn't all just about cold, hard cash.

:25:22.:25:25.

There are dramatic variations in our health, not just our wealth, and

:25:26.:25:29.

stubborn gaps in opportunities for our children.

:25:30.:25:33.

The richest children's grandparents are likely to enjoy nearly20 years

:25:34.:25:37.

more healthy life than the poorest, and the difference is growing. And

:25:38.:25:42.

while 40 per cent of children on free school meals get five decent

:25:43.:25:46.

GCSEs, it is 70 per cent for the rest.

:25:47.:25:49.

There is enormous variation between and within schools, so in England,

:25:50.:25:53.

it matters where you're born if you're poor as well addition the

:25:54.:25:56.

fact that you're born to relative poverty, so there are one in seven

:25:57.:26:00.

secondary schools, for example, in England with respect the free-school

:26:01.:26:04.

meal children do better than the national average and those schools

:26:05.:26:06.

are distributed right across the country in all communities. One of

:26:07.:26:09.

the big questions is why can't more schools do what those schools are

:26:10.:26:14.

doing? No-one government can push away or

:26:15.:26:20.

promote global trends alone. But our politicians' choices can affect

:26:21.:26:24.

inequality here. It is our own disquiet or acceptance, perhaps,

:26:25.:26:29.

that dictates how hard they try. With us now are Lord Lamont,

:26:30.:26:33.

Conservative peer and former Chancellor of the Exchequer; Stella

:26:34.:26:39.

Creasy, the Labour MP and shadow business minister; and Gillian Tett,

:26:40.:26:42.

assistant editor at the Financial Times. Telling La Creasy, since --

:26:43.:26:47.

Stella Creasy, since the French economist seemed to accept that a

:26:48.:26:51.

degree of inequality was almost necessary, what is undesirable about

:26:52.:26:56.

it? I don't think he said it was necessary, he said it was

:26:57.:26:58.

inevitable. I think that's the challenge for all of us looking at

:26:59.:27:02.

this which is what is the level of inequality which is actually so

:27:03.:27:05.

damaging and destructive not only to our economy but our society that we

:27:06.:27:09.

should deal with it. How do you decide that? One of the things that

:27:10.:27:12.

is interesting about his research is the link between power and the

:27:13.:27:15.

damage that it does when particularly small groups of power

:27:16.:27:19.

have disproportionate power in our society. We have to look at what are

:27:20.:27:22.

the consequences for this kind of inequality in terms of our future.

:27:23.:27:26.

Are you bothered about growing and inequality? I couldn't envisage

:27:27.:27:32.

circumstances in which I would. If great disparate tease in wealth

:27:33.:27:36.

obstruct social mobility, that would worry me a lot. In tackling the

:27:37.:27:42.

issues, there a two things you ought to consider: the fact that some

:27:43.:27:46.

people are well think, is that harming other people, causing

:27:47.:27:50.

poverty? In very few cases do I think is that the case. Secondly,

:27:51.:27:55.

before you go in for confiscatory taxation, you awed to ask yourselves

:27:56.:27:59.

the question, would this wealth actually exist if this person who

:28:00.:28:04.

had it did not exist, i.e., an entrepreneur who has created a huge

:28:05.:28:09.

n technology empire, if you just tax his wealth out of existence, you

:28:10.:28:12.

damage an economy, and you damage a lot of people. The point is that

:28:13.:28:18.

what Piketty is arguing is not so much about inequality of outcome,

:28:19.:28:21.

the entrepreneur who had the brilliant idea who starts the

:28:22.:28:23.

company and end up with a lot of money, it is more about equality of

:28:24.:28:28.

opportunity. There are two questions here: firstly, what degree of

:28:29.:28:33.

inequality can we live with? Is it about opportunity or outcome? The

:28:34.:28:38.

really big shift about the focus on capital, inheritance and wealth is

:28:39.:28:40.

making the point that if you come from a family that starts with

:28:41.:28:41.

wealth from a family that starts with

:28:42.:28:46.

worried and R if there's been a break between

:28:47.:28:49.

worried and R if there's been a receive. I am struck, we saw those

:28:50.:28:54.

Barclay Shaylerers being rightly angry frankly because they've seen a

:28:55.:28:56.

32 per cent drop in their angry frankly because they've seen a

:28:57.:29:01.

bonus pool. That is clearly not linked to performance, so you have

:29:02.:29:02.

to point. I think, for example, the

:29:03.:29:17.

remuneration of chief executives in very large companies worldwide is

:29:18.:29:21.

probably being very overdone, and I think it has

:29:22.:29:26.

probably being very overdone, and I and the incentive to boost your

:29:27.:29:29.

share price by buybacks and manipulation of that kind. I think

:29:30.:29:33.

that is actually pretty unjustified. But that is a different question.

:29:34.:29:37.

That's a particular example from the issue of is society becoming

:29:38.:29:41.

That's a particular example from the unequal? I don't think we had a lot

:29:42.:29:47.

of talk from the Professor about this is incompatible with democracy.

:29:48.:29:51.

Well, as an American writer once said, if democracy consists of

:29:52.:29:54.

robbing Peter to pay Paul, Paul will vote for that. We should not just

:29:55.:29:57.

construct a great vote for that. We should not just

:29:58.:30:02.

prejudice. Maybe that is a difference between you and I because

:30:03.:30:05.

I don't want to live in a society where it is the largest waltz or

:30:06.:30:08.

perhaps the loudest funded by where it is the largest waltz or

:30:09.:30:11.

largest waltz that determine outcomes. I am not alone in thinking

:30:12.:30:13.

that. I don't outcomes. I am not alone in thinking

:30:14.:30:18.

Thatcher but she talked about enfranchising people by giving them

:30:19.:30:21.

a stake in society. Inequality damages that. I agree with that and

:30:22.:30:25.

what Gillian said that what we are talking about is equality of

:30:26.:30:27.

opportunity, but of course equality of opportunity is a very abstract

:30:28.:30:33.

idea because, unless you were bullish or inheritances, you can't

:30:34.:30:36.

have true equality of opportunity, so it is only an idea you can move

:30:37.:30:41.

towards gradually. What is interesting is that it is not just

:30:42.:30:45.

in the UK that Piketty's book is provoking debate amongst the

:30:46.:30:48.

Liberals of North London, what is fascinating in America, this book,

:30:49.:30:53.

which is 557 pages long, it is dense and heavy, is a top-selling book in

:30:54.:30:58.

America on Amazon in all categories. It is beaten books about Frozen,

:30:59.:31:04.

Kardashian, sports memoirs, you name it. The reason for that is many

:31:05.:31:08.

people are saying we came out of this big recession, big financial

:31:09.:31:12.

crisis. We've got to get growth at all costs, and now they're saying

:31:13.:31:18.

hang on a second, who benefits? Can I make one point: this one point

:31:19.:31:22.

about the arithmetic of this that people forget and that is even if

:31:23.:31:26.

you had a society in which everybody was paid the same income but they

:31:27.:31:31.

saved a given proportion of it each year, you would end up with a

:31:32.:31:35.

society in which people over 60 owned 80 per cent of the wealth.

:31:36.:31:40.

Wealth is concentrated among elderly people, and all these statistics you

:31:41.:31:47.

get from - I remember this with Professor Titmus a long time ago

:31:48.:31:51.

when he used to write about inequality, he made that fundamental

:31:52.:31:55.

arithmetical error that so much wealth is concentrated in older

:31:56.:31:58.

people. I think the solution to the problem of inequality is to spread

:31:59.:32:04.

wealth, and I think - I feel like I have to stand up for Professor

:32:05.:32:10.

Titmus having won his prize, because that's not what he said.

:32:11.:32:14.

Autoinrolement of pensions will give people the opportunity to save, and

:32:15.:32:17.

create more distribution of wealth as well. That's not what the

:32:18.:32:20.

research is telling us. What is fascinating about the research it is

:32:21.:32:23.

about the accumulation of capital and how that is being passed on, and

:32:24.:32:27.

one of the challenges of being able to access capital in itself. That is

:32:28.:32:32.

different from savings. Gillian, in your experience, what is it that

:32:33.:32:37.

people most get angry about? Income disparatety or angry about the fact

:32:38.:32:40.

that some people have inherited wealth. Speaking from an American

:32:41.:32:43.

perspective, there are two things going on. Until now, America had

:32:44.:32:48.

probably been the Western country most accepting of inequality because

:32:49.:32:51.

people believed there was equality of opportunity. That was the

:32:52.:32:54.

American dream. What people are realising is that in America it is

:32:55.:32:58.

actually no longer that much equality of opportunity, and they're

:32:59.:33:02.

questioning whether they can live with such unequal outcomes. It is a

:33:03.:33:05.

recognition that, essentially, what things like quantitative easing has

:33:06.:33:08.

done is making people who have assets a lot wealthier; what the

:33:09.:33:12.

globalisation is doing, what the change in industry, the increasing

:33:13.:33:18.

competition, not just from China but digitisation is hollowing out the

:33:19.:33:22.

middle class, you have a small minority at the top who have lovely

:33:23.:33:27.

jobs earning wonderful incomes and many people are struggling. I think

:33:28.:33:32.

there is force in that. Quantitative easing has altered things. The

:33:33.:33:35.

sooner we get back to normality, the better. I do think that the

:33:36.:33:39.

Professor is not on a strong point in predicting that what has happened

:33:40.:33:44.

in the recent pass will go on. A longer period, over 40 years, LSE

:33:45.:33:49.

research shows that the share going to incomes in this country, the

:33:50.:33:54.

share of GDP has remained broadly constant, and the idea that this is

:33:55.:33:56.

going to diminish I don't think is borne out by the facts. The

:33:57.:34:02.

proportion of corporate profits being retained and not paid paid out

:34:03.:34:07.

by employment earnings and at capital is at record levels. Who

:34:08.:34:09.

benefits from the fact that corporate profits go to capital?

:34:10.:34:13.

It's basically the shareholders. Who owns the shares? Primarily the rich.

:34:14.:34:15.

Essentially, what you're seeing time and time again is that workers,

:34:16.:34:20.

ordinary workers, are being weeded in their slice of the economic pie.

:34:21.:34:23.

In the recent past, both in this country, Europe, and going on in

:34:24.:34:28.

Europe, and in the United States, obviously, incomes of ordinary

:34:29.:34:31.

people haven't risen. That is what has created this problem. That has

:34:32.:34:35.

been the adjustment to 2007, 2008. The rich have run away with, in, but

:34:36.:34:39.

we've got a greater challenge, what is the potential we're missing out

:34:40.:34:42.

on if we live in an equal society because we're not going to tackle

:34:43.:34:46.

those issues until we have an ability for everyone to create

:34:47.:34:49.

wealth. What this book shows so well is that this American dream if you

:34:50.:34:53.

work hard and put your effort it is rewarded is not necessarily true,

:34:54.:34:56.

and that should challenge all of us of the what potential does that give

:34:57.:35:00.

us for our children and future that we can create wealth and be a more

:35:01.:35:04.

prosperous society if we can't do that? You may recall hearing a

:35:05.:35:08.

couple of weeks ago that more than 200 girls had been abducted in the

:35:09.:35:11.

middle of the night from their boarding school in Nigeria. There's

:35:12.:35:20.

not been much coverage since, and indeed there doesn't seem to be much

:35:21.:35:26.

action to rescue them either. Today, marchers marched to press the

:35:27.:35:30.

government to do more. The girls are thought to have been taken by the

:35:31.:35:37.

Islamist group Boko Haram, b with little information where they might

:35:38.:35:41.

be being held, relatives are left to hope and pray for their daughters'

:35:42.:35:47.

safe return. Joining us from Abuja is the novelist and journalist

:35:48.:35:52.

Mbwarde. What is the feeling in Nigeria about the way this mass

:35:53.:35:56.

abduction - almost unimaginable -- what is the feeling there about the

:35:57.:36:04.

way it's being dealt with by the government? I think what is most

:36:05.:36:09.

worrying is the fact that the first few days after the acducks, the

:36:10.:36:13.

government didn't - there wasn't a flurry of activity in terms of

:36:14.:36:16.

rescue operation. That was the worrying thing. We of course are

:36:17.:36:20.

concerned about the fact that - we are concerned about the ability to

:36:21.:36:24.

do anything and about the fact that no-one was pretending to do anything

:36:25.:36:28.

and there was some misinformation from the armed forces when we are

:36:29.:36:31.

told on the second day that the girls had been rescued, and it

:36:32.:36:35.

turned out to be a lie. There's so much confusion, nobody is sure about

:36:36.:36:39.

what the government is doing and how much anybody can do. It is all a bit

:36:40.:36:43.

confusing for people here. Yet, there was this protest march today

:36:44.:36:46.

which was expected to attract at least many thousands of people, and,

:36:47.:36:50.

in the end, it was just a few hundred, wasn't it? Yes, it was.

:36:51.:36:58.

Yes, it was a few hundred. I think that's the disadvantage of a lot of

:36:59.:37:02.

the activity and social media: people who actually live here, who

:37:03.:37:06.

get about their business, are not really involved in all that, so it

:37:07.:37:12.

was mostly a social media thing. Really, the Nigerians on social

:37:13.:37:17.

Twitter and Facebook are different from everyday Nigerians. It is

:37:18.:37:22.

almost t different worlds. Most of the organisation was done on social

:37:23.:37:26.

media, and there are thousands of Nigerians who are not on Twitter,

:37:27.:37:30.

Facebook, or at least who don't engage as one would expect. A lot of

:37:31.:37:34.

the Nigerians on Twitter, a number of them are abroad, so we have

:37:35.:37:39.

situations where a lot of there is so much organisation going on

:37:40.:37:42.

Twitter and social media, but when it comes to being physically present

:37:43.:37:45.

to get things done, there are not that many people. I think that's

:37:46.:37:47.

what happened. Everybody is concerned but I am not sure about

:37:48.:37:50.

how many people really knew what was going on today and how many people

:37:51.:37:54.

will be mobilised to come on board. That's what happened, I think.

:37:55.:37:58.

You've talked about the failure of government and the failure of the

:37:59.:38:03.

military. The Nigerian military is actually one of the better

:38:04.:38:06.

militaries in Africa, isn't it? Are you saying that you really need some

:38:07.:38:12.

outside help here? I think we are facing a situation that we haven't

:38:13.:38:17.

ever faced before, so it is new terrain. I am not sure how much

:38:18.:38:21.

training our armed forces have received in this area in terrorism.

:38:22.:38:24.

We are facing a situation no government, no Nigerian government

:38:25.:38:29.

has ever faced prior to this president, so it is a completely new

:38:30.:38:34.

situation. There are lots of things we face in the pass: violence,

:38:35.:38:37.

religious, but this Boko Haram situation is so peculiar. I don't

:38:38.:38:40.

think we know exactly how to handle it yet, which is not to say we

:38:41.:38:45.

can't, but we haven't been trained. Our armed forces in that direction

:38:46.:38:48.

haven't been trained. It's new. The horrors of Boko Haram are different

:38:49.:38:52.

from any horror we've witnessed in this country ever before - not even

:38:53.:38:56.

in the civil war has it been like this, you know? There's just

:38:57.:38:59.

something different, something more horrifying about this. We don't know

:39:00.:39:02.

who the enemy is, we don't know who the target is. It is just so

:39:03.:39:06.

arbitrary, so I think we don't quite know how to handle this kind of

:39:07.:39:11.

situation, which is why I believe the government should reach out for

:39:12.:39:15.

help. There are countries that have dealt with this kind of thing for a

:39:16.:39:18.

long tim We should be asking those people how to go about it. Thank you

:39:19.:39:23.

very much indeed. Thank you. Now, it's 25 years since Ayatollah

:39:24.:39:26.

Khomeini the Iranian religious leader pronounced a fatwa to the

:39:27.:39:32.

effect that anyo murdering Salman Rushdie will be doing God's work.

:39:33.:39:36.

Rushdie's crime in the eyes of this ancient bearded zealot was to have

:39:37.:39:47.

written a book The Satanic Verses. The Ayatollah died soon after, but

:39:48.:39:51.

the if a the with a remained in force. Rushdie was force to live

:39:52.:39:54.

under police protection for years. It was never just a book: critical

:39:55.:40:00.

praise quickly turned to controversy. The The Satanic Verses

:40:01.:40:01.

was banned in many controversy. The The Satanic Verses

:40:02.:40:05.

burned at protests, including on British streets.

:40:06.:40:07.

Many demonstrators hadn't read it, British streets.

:40:08.:40:13.

but the anger and hurt of its depiction of the Muslim Prophet

:40:14.:40:22.

Mohammed was real. Sir Iqbal Sakarani was one of the main

:40:23.:40:27.

organisers of the protests. The book was deeply offensive, not only to

:40:28.:40:30.

Muslims and Britain and overseas but was deeply offensive, not only to

:40:31.:40:34.

of other faiths as well. The notion of freedom of expression goes with

:40:35.:40:37.

responsibility. It must also be noted that the protests were carried

:40:38.:40:41.

out in a dignified and in a responsible manner, and I think we

:40:42.:40:42.

had to get the very across that the book was

:40:43.:40:51.

unacceptable. Anger spread. The new ruler of Iran, Ayatollah Khomeini

:40:52.:40:56.

issuing for a fatwa for ruler of Iran, Ayatollah Khomeini

:40:57.:41:00.

be killed. Despite, or because of this, sales of the book rocketed.

:41:01.:41:03.

Although many British Muslims felt offended by the novel, many also

:41:04.:41:09.

opposed the fatwa. This man took part in some of those protests in

:41:10.:41:13.

London, but he now thinks the episode ended up giving a negative

:41:14.:41:19.

image of Muslims. There's no question that verses have affair was

:41:20.:41:25.

a -- that the versus -- The Satanic Verses affair was a seminal moment.

:41:26.:41:30.

They wanted, as they saw it to defend the honour of the Prophet

:41:31.:41:34.

Mohammed. It served as a catalyst for the emergence of a British

:41:35.:41:38.

Museum identity. However, there were a number of downsides, too, not

:41:39.:41:41.

least of which was the fact that Islam now came to be seen as having

:41:42.:41:45.

real issues with the modern world, and it left a very negative

:41:46.:41:51.

impression on the Western psyche. It was, perhaps, the first

:41:52.:41:55.

contemporary moment when the liberal values of free speech and Muslim

:41:56.:42:04.

culture clashed. But it wasn't to be the last. Angry demonstrations

:42:05.:42:08.

against Danish cartoons mocking the Prophet Mohammed provoked similar

:42:09.:42:13.

fury. 25 years on, the balance between freedom of expression and

:42:14.:42:18.

religious sensitivities is perhaps just as tense.

:42:19.:42:24.

The author Martin Amis was o of Salman Rushdie's inner circle of

:42:25.:42:27.

friends when the fatwa was declared and he joins us from New York. Was

:42:28.:42:39.

Mr Rushdie very - Sir Salmon surprised by the reaction to his

:42:40.:42:45.

book? Yes, he was horrified. Let's not forget that there had already

:42:46.:42:49.

been violence, protests, and some deaths in Pakistan before the fatwa

:42:50.:42:56.

was issued. On the two previous days, there had been intensifying

:42:57.:43:01.

riots in Islamabad and Kashmere, so it was already a nightmare, and the

:43:02.:43:07.

fatwa made it a nightmare within a nightmare. A writer is horrified if

:43:08.:43:15.

anything he writes - a novel - takes on a sort of concrete meaning in the

:43:16.:43:18.

real world. It was never meant to be that. That's not what novels are.

:43:19.:43:24.

But surely he knew what he was doing, for example, naming

:43:25.:43:29.

prostitutes after the prophet's wives? Well, I had an interesting

:43:30.:43:36.

discussion with this with Prince Charles. He said at a small dinner

:43:37.:43:46.

part, in his usual he did xcathedra way, I am sorry if someone sets out

:43:47.:43:54.

to - I said the novel comes with a kind of shiver, this is an idea that

:43:55.:43:59.

I can write a novel about it, nothing else that it appeals to you.

:44:00.:44:04.

Then you start to spore it, and the only restraints on your treatment

:44:05.:44:10.

are those self- - explore it, and the only restraints your -- I am

:44:11.:44:17.

sure Salman like all novelists disappeared into the idea for five

:44:18.:44:20.

years and never thought about what effect it would have when it crossed

:44:21.:44:24.

the border and came into the real world.

:44:25.:44:27.

When he discovered what the effect was, did he regret writing in the

:44:28.:44:35.

terms he wrote? I don't think one can ever quite do that. I know he

:44:36.:44:44.

felt gangrenous with horror when the death toll started to climb and

:44:45.:44:52.

whenties translators - when his translators and pull sifts were

:44:53.:44:56.

attacked, knifed, and shot. It must have been a terrible helter-skelter

:44:57.:45:00.

experience of escalation, and he writes about it beautifully in his

:45:01.:45:07.

memoir Joseph Anton. It is like being on a bucking bronchio. It is -

:45:08.:45:13.

bronco. It has left your control. In the light of what happened in this

:45:14.:45:19.

particular case, and in the light of t rows that we have had either over

:45:20.:45:26.

the Danish cartoons, even these rather anodyne Jesus and MO cartoons

:45:27.:45:30.

in Britain, are writers thinking differently about what they put pen

:45:31.:45:36.

to paper about? Well, they should not be, I don't think. The late

:45:37.:45:44.

Ronald Dworkin said that no-one has the right not to be offended, and

:45:45.:45:48.

that is a fact of the modern world. You don't have that right. The other

:45:49.:45:56.

great sort of maxim is that writing is freedom. That's essentially what

:45:57.:46:02.

it is, an expression of freedom, and once it is hedged, it loses that

:46:03.:46:08.

indivisibility, and you're really like a hack during the Russian

:46:09.:46:18.

revolution; you're like Myerkovky or Senin. Both those poets committed

:46:19.:46:24.

suicide because they had talent that was being resisted by the system.

:46:25.:46:29.

That's almost it for tonight. Our celebration of Shakespeare's 450th

:46:30.:46:32.

birthday comes to an end tonight with his last play The Tempest.

:46:33.:46:40.

Simonal low plays Prospero. Our rebels are ended, and these are

:46:41.:46:45.

actors as I foretold you, are all spirits that are melted into air -

:46:46.:46:51.

into thin air. Like the baseless fabric of this vision, the cloud

:46:52.:46:58.

camped towers, the guard outpalaces, the solemn temples, the great globe

:46:59.:47:05.

itself, yea, all which it inherits shall dissolve. And, like this

:47:06.:47:10.

insubstantial pageant faded leave not a rack behind. We are such stuff

:47:11.:47:22.

as dreams are made on. And our little life is rounded with a sleep.

:47:23.:47:26.

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