:00:07. > :00:12.If you thought Middle East politics were complicated, they just got a
:00:13. > :00:17.whole lot more complicated. At what point do figures who have a common
:00:18. > :00:23.enemy, like these three, become effectively allies. We will hear
:00:24. > :00:28.from the Deputy Prime Minister of the newly-enlarged Kurdistan.
:00:29. > :00:34.Remember when this signified the end of history? We hear someone who
:00:35. > :00:39.still thinks that. You have heard of offshore banking,
:00:40. > :00:52.the Isle of Man is now doing offshore space programmes. How does
:00:53. > :00:55.that work again? It's pure coincidence of course that
:00:56. > :00:58.the Foreign Secretary today announced the time was right to
:00:59. > :01:02.reopen the British Embassy in Tehran, but having spent so much
:01:03. > :01:06.blood and treasure taking part in George W Bush's invasion of Iraq,
:01:07. > :01:09.both London and Washington are keen to find any friends they can in the
:01:10. > :01:14.Middle East, no matter how unexpected they might seem. The
:01:15. > :01:18.catastrophe sweeping through northern Iraq seems to be remaking
:01:19. > :01:31.the map of that part of the world. Our diplomatic editor's report has
:01:32. > :01:36.some flashing images. The swift advance of Sunni militants in
:01:37. > :01:40.northern Iraq is seen as game changer. How does it change things,
:01:41. > :01:43.for some the significant point means this sudden victory creates
:01:44. > :01:47.opportunity for strategic partnership between the US and Iran.
:01:48. > :01:51.I do think the time has come that people are beginning to waken to
:01:52. > :01:59.that Iran is the most stable country in south-west Asia, Iran is demo
:02:00. > :02:02.graphically, militarily, national cohesion-wise, probably the best
:02:03. > :02:09.ally that anyone could have in the region if one were able to achieve
:02:10. > :02:13.that. It is clear now that Iran and the United States, which has moved
:02:14. > :02:16.its carrier group to the gulf, have a common interest in the survival of
:02:17. > :02:21.the Nouri Al-Maliki Government in Baghdad. But you could add others to
:02:22. > :02:27.this coalition of the apparently irreconcilable. Israel and the Sunni
:02:28. > :02:31.monarchy in Jordan both also strongly identify ISIS as a
:02:32. > :02:36.strategic threat. And the question now is if they can all agree that
:02:37. > :02:40.the movement is a problem in its advances in Iraq, what's their
:02:41. > :02:44.attitude going to be to ISIS in Syria.
:02:45. > :02:47.Here is the man who ran the Foreign Office Syria desk until last year
:02:48. > :02:52.and now advises the Syrian opposition. I don't think that there
:02:53. > :02:58.is any alternative than to maintain the current policy, posture with
:02:59. > :03:02.respect to the Assad regime. I don't think it is a viable policy to
:03:03. > :03:05.recalibrate in the way that you are suggesting. I have heard this, I
:03:06. > :03:10.don't think it is something that western Governments would consider
:03:11. > :03:18.seriously. I think there is only one viable option in Syria, which is to
:03:19. > :03:24.continue bolstering and reinforcing the efforts of the moderate Syrian
:03:25. > :03:27.opposition forces on the ground in Syria who have been fighting the
:03:28. > :03:35.extremist threat in Syria for the past year and continue to do so. And
:03:36. > :03:39.while even the Israeli leader, who has visited Syrian war wounded being
:03:40. > :03:43.treated in his country, has apparently decided that even Assad
:03:44. > :03:48.would be better than a ISIS victory, he and many others in the region are
:03:49. > :03:55.all too aware that doesn't necessarily make their enemies
:03:56. > :04:00.enemy, Iran, their friend. Iran is playing it like a chess game and its
:04:01. > :04:06.objective is the jackpot which is the control of Syria, Iraq and
:04:07. > :04:13.Lebanon, through its militias that it has on the ground. The United
:04:14. > :04:19.States is playing it more like a poker game, aiming for a quick win
:04:20. > :04:25.without looking at the larger strategic picture. In places like
:04:26. > :04:30.this suburb of Damascus, the Free Syrian Army has local truces with
:04:31. > :04:34.Assad's forces. But as a BBC team there discovered, even that is a
:04:35. > :04:40.fragile arrangement. How well is the ceasefire holding here? (Gunfire)
:04:41. > :04:45.TRANSLATION: Not very well, you can hear the clashes. Moderate Syrian
:04:46. > :04:53.groups like this are fighting ISIS as well as the regime. Increasing
:04:54. > :04:58.aid to the FSA could be the most likely western response to Jihadist
:04:59. > :05:01.games, rather than cosying up to President Assad. The moderate forces
:05:02. > :05:06.on the ground have been fighting on two months now for some time. They
:05:07. > :05:11.are doing that with limited capabilities. I think the time has
:05:12. > :05:17.come now to redouble those efforts. And the signs are in some of what
:05:18. > :05:21.has been happening over the last few months with western and Arab policy
:05:22. > :05:25.is there is a recognition that more needs to be done with those moderate
:05:26. > :05:31.forces. And certainly redoubling those efforts, stepping up those
:05:32. > :05:35.efforts is the way to go. But the success of President Assad in
:05:36. > :05:39.holding on to power, and the failure of the international diplomatic
:05:40. > :05:43.process designed to ease him from office does beg questions of western
:05:44. > :05:48.policy. While open alliance will remain too distasteful for Britain
:05:49. > :05:54.or America, a resumption of some secret co-operation with Iran and
:05:55. > :06:01.Syria is quite possible. Let's try to make a little more sense of this
:06:02. > :06:06.now with my guests, a fellow in the Middle East Chatham House, and a
:06:07. > :06:11.journalist and author of The Road from Damascus. I suppose all bets
:06:12. > :06:14.are off now aren't they in the Middle East? It is a good sign now
:06:15. > :06:19.that the west is seriously considering talking with Iran,
:06:20. > :06:22.specifically on the Iraqi file. The Americans and Iranians share
:06:23. > :06:27.strategic interests in Iraq, they both support the demographic process
:06:28. > :06:30.and the Iraqi Government, they share a common enemy in ISIS. The recent
:06:31. > :06:35.developments are encouraging I think. It will also open up the
:06:36. > :06:39.discussions over the nuclear file and broader Middle East. It is a
:06:40. > :06:43.funny situation when Iran is a potential ally in Iraq and
:06:44. > :06:47.continuing enemy in Syria? Well, if it is an enemy in Syria I think the
:06:48. > :06:50.west is very confused at the moment about what it is doing. It seems, I
:06:51. > :06:53.don't think there should have been sanctions on Iran in the first
:06:54. > :07:06.place. But it does seem very upsetting that there is a
:07:07. > :07:11.reroachment with Iran over ISIS. In Syria Iran has militias on the
:07:12. > :07:16.ground supporting the regime slaughtering the people, and in Iraq
:07:17. > :07:20.itself where it has encouraged the most sectarian instincts of the
:07:21. > :07:23.Al-Maliki Government. What we have seen in Iraq is not the success of
:07:24. > :07:27.ISIS, which is a weak group, it is the failure of the Iraqi state and
:07:28. > :07:31.of course the collapse of the Syrian state. Iran, along with other
:07:32. > :07:35.countries too, but Iran is very complicit in that collapse in both
:07:36. > :07:39.countries. I think it would be, in the short-term, maybe beneficial to
:07:40. > :07:42.deal with Iran. I can see why people want to because Iran has an
:07:43. > :07:45.organised military, and it is an organised country and they can go
:07:46. > :07:49.in, they could establish order if they wanted to in Iraq. In the
:07:50. > :07:53.medium and long-term it is a disaster because Sunni Arab
:07:54. > :07:58.communities are going to be more enraged and become maybe the
:07:59. > :08:02.sectarian backlash that has been overexaggerated which will be bigger
:08:03. > :08:06.if they see Iran walking over Syrian and Iraqi sovereignty. I don't think
:08:07. > :08:15.it is fair to compare Syria with Iraq, the Prime Minister unlike with
:08:16. > :08:21.Syria isn't a dictator that has inherited because of his father. It
:08:22. > :08:26.is unfair to portray ISIS as Sunni, they are also killing Sunnis as well
:08:27. > :08:30.as Shias. This uneasy relationship between ISIS and other insurgent
:08:31. > :08:34.groups won't last forever. They are strange bed fellows and it is a
:08:35. > :08:40.marriage of convience. In coming weeks we will see Syria with
:08:41. > :08:45.infighting between the rebels, you will have ba'athist insurgents and
:08:46. > :08:49.Sunni and Shia all fighting each other as well as the Iraqi
:08:50. > :08:52.Government. It is important to stress something people don't
:08:53. > :08:57.realise since January it was a grey area which side ISIS is on. Since
:08:58. > :09:03.January there is no excuse for the greyness, all of the Syrian
:09:04. > :09:08.opposition group, the Islamist and Islamic front, even the victory
:09:09. > :09:13.front that is Al-Qaeda linked, all of these groups have been fighting
:09:14. > :09:21.against ISIS. So ISIS is a common enemy of everybody, it seems, but it
:09:22. > :09:27.is helping Assad really, . But that means President Assad is on the same
:09:28. > :09:31.side as much of the west? In fighting ISIS? Well he is producing
:09:32. > :09:35.the chaos in which ISIS thrives. Whenever he has been following a
:09:36. > :09:39.scourged earth policy in Syria, any part of the country which he can't
:09:40. > :09:43.control he has been devastating, from aerial bombardment and other
:09:44. > :09:47.means, sieges and so on. That means there are massive refugees flowing
:09:48. > :09:51.out of the country. It means that there are no schools, no hospitals
:09:52. > :09:55.working, no economy going. Into this chaos it is very easy for, and
:09:56. > :09:59.sometimes with the help of neighbouring states, we were talking
:10:00. > :10:05.about Turkey earlier, it is very easy for international Jihad
:10:06. > :10:11.tourist, psychopaths and kneelists to come -- nihilists to come in. It
:10:12. > :10:15.has got so strained in Iraq that they have been able to come back in.
:10:16. > :10:19.These people come wherever there is a chaos. Assad has created a chaos
:10:20. > :10:24.in Syria by committing a near genocide and massive "ethnic
:10:25. > :10:28.cleansing". This ref news in Syria started -- revolution in Syria
:10:29. > :10:32.started and continues as a fight for democracy and freedom and freedom of
:10:33. > :10:37.expression, it was remarkable that it wasn't sectarian for the whole of
:10:38. > :10:41.2011 and then under the strain of Assad's war it began to come down.
:10:42. > :10:46.There is no question that Assad created the chaos, but ISIS is a
:10:47. > :10:50.monster of its own. There is a seemingly endless supply of funds
:10:51. > :10:54.coming from western allies, Saudi Arabia and Qatar and Kuwait. From
:10:55. > :10:58.private donors absolutely. The Governments are doing very little to
:10:59. > :11:02.combat. One viable policy of the west, if it doesn't want to get
:11:03. > :11:07.engaged militarily in Syria is to do more to stop its allies, to do more
:11:08. > :11:12.to pressure its allies to stop ISIS getting funds from these private
:11:13. > :11:17.donors? I agree absolutely, it is very important too. But I think
:11:18. > :11:23.making a deal with Iran is the wrong idea. Make the Saudis or pressure
:11:24. > :11:27.them and other gulf countries the UAE and the Kuwait, make them
:11:28. > :11:30.pressure private donors, who may be important people to stop donating,
:11:31. > :11:34.they are not helping the Syrians. Even the Syrian Islamists don't want
:11:35. > :11:38.the ISIS people there. They are obviously not helping the Iraqis,
:11:39. > :11:42.they are confusing the issues and actually making it more difficult
:11:43. > :11:46.for Sunni Arabs to get their rights. The Iranians are a reality on the
:11:47. > :11:50.ground in Iraq. If the west seriously wants to combat ISIS it is
:11:51. > :11:55.about time to start talking with Iranians on Iraq. I'm happy to see
:11:56. > :11:59.Barack Obama saying he won't take action until Al-Maliki changes his
:12:00. > :12:03.approach to the Sunni-Arab issue. I hope he's also leaning on the
:12:04. > :12:07.Iranians, they need their military security help to face this monster
:12:08. > :12:11.that has just exploded, the reason this monster has exploded is because
:12:12. > :12:15.of the sectarianism, you are quite right, the democratically elected
:12:16. > :12:19.Iraqi Government and because of the genocide going on in Syria which
:12:20. > :12:23.Iran is supporting which, is radicalising Sunnis around the
:12:24. > :12:30.world. It takes two to Tango, Iran is not operating out of a vacuum in
:12:31. > :12:34.Iraq, there is the Saudis, Qatar, and other states involved in Iraq,
:12:35. > :12:41.and variously in domestic affairs. Thank you very much. Sandwiched amid
:12:42. > :12:47.all of this is the autonomous region of Kurdistan which stretches across
:12:48. > :12:50.Syria and into Iraq and Iran. The in coming Deputy Prime Minister spoke
:12:51. > :12:55.to me shortly before coming on air. I asked him whether he thought Prime
:12:56. > :12:59.Minister Nouri Al-Maliki was capable of holding the country together?
:13:00. > :13:04.Prime Minister Al-Maliki's policies to date have not done a good job of
:13:05. > :13:08.keeping this country together. His sectarian ways have really caused a
:13:09. > :13:15.sectarian response from many parts of the country. So unless there is a
:13:16. > :13:19.rapid change of policies coming out of the federal Government I'm afraid
:13:20. > :13:27.this country is facing more and more crises. Do you think it will break
:13:28. > :13:33.up? It has the risk of breaking up unless there is a serious dialogue
:13:34. > :13:38.with a serious change in attitude from the federal Government. Because
:13:39. > :13:44.this country has not been able to govern in a way that's made
:13:45. > :13:48.everybody feel part of this country, we in Kurdistan have had our
:13:49. > :13:54.complaints. Clearly many in the centre and west of the country have
:13:55. > :14:05.had their grievances. They are now showing their grievances in a very
:14:06. > :14:11.different way. Do you fear ISIS? ISIS is a real threat, it is a real
:14:12. > :14:16.threat to Iraq, it is a threat to stability and some of what we have
:14:17. > :14:22.seen over the last few days have caused us much concern, so we're
:14:23. > :14:27.very concerned about the current situation and we're hopeful that
:14:28. > :14:33.through our efforts and through the efforts of others we can calm the
:14:34. > :14:39.situation and we can try to live in a stable country. It is a very odd
:14:40. > :14:48.situation, isn't it, from an outsiders point of view, you look in
:14:49. > :14:54.and you see Mr Al-Maliki, President Assad, President Obama, the Kurdish
:14:55. > :15:02.authorities, all effectively on the same side? Well, sometimes people's
:15:03. > :15:06.national interests and strategic interests sometimes you know
:15:07. > :15:13.overcome internal differences, but obviously there is all kinds of
:15:14. > :15:16.complication to this, there is not a zero sum game, there are threats
:15:17. > :15:20.caused byies circumstance but there are also major disappointments in
:15:21. > :15:24.the way that Prime Minister Al-Maliki's Government has
:15:25. > :15:28.functioned to date. It is not a black and white situation Jeremy. At
:15:29. > :15:34.the end of all of this of course Kurdistan could end up leaving Iraq,
:15:35. > :15:37.couldn't it? I think it is more likely that Iraq could end up
:15:38. > :15:41.leaving Kurdistan. We have done everything we can to make this
:15:42. > :15:45.country successful, we have done everything we can to make this
:15:46. > :15:52.country look very different to what it used to look like during Saddam's
:15:53. > :15:56.days and prior to that. But regrettably politics has failed in
:15:57. > :16:01.Iraq, and people have not stuck to the principles that formed the
:16:02. > :16:06.post-Saddam Iraq. We have continued to stick to the principles that we
:16:07. > :16:12.fought so hard for during the days when we were in the opposition and
:16:13. > :16:15.when we drafted the constitution of the country, we have committed to
:16:16. > :16:20.that constitution, but if others are not committed to that constitution
:16:21. > :16:25.then ultimately it will lead to more chaos and potentially the break up
:16:26. > :16:33.of the country. Thank you very much for joining us. My pleasure.
:16:34. > :16:36.The Queen was wheeled out, military bands played, speeches were made and
:16:37. > :16:40.human rights protesters were ignored. It was another visit from a
:16:41. > :16:44.Chinese notable today, no mention was made of supression of dissidents
:16:45. > :16:49.and that sort of thing, because today Britain was busy oiling up to
:16:50. > :16:54.the Chinese premier in the hope of getting some business. But while
:16:55. > :16:57.Chinese growth is often seen as an unstoppable force, there are growing
:16:58. > :17:01.worries about just what is happening in its property market. Our
:17:02. > :17:06.economics correspondent weighs it up.
:17:07. > :17:11.In Britain we love to talk about house prices. It is an obsession.
:17:12. > :17:15.Recently we have begun fretting about another bubble. But the
:17:16. > :17:18.property market we should be worrying about is not in London or
:17:19. > :17:22.the south-east of England, it is at the other end of the world, in
:17:23. > :17:27.China. There are rising fears that China has become consumed in a
:17:28. > :17:33.credit and property bubble that dwarves anything in Britain or the
:17:34. > :17:37.west. I think Chinese real estate is probably the most important sector
:17:38. > :17:44.in the world economy. Because so much of what China has imported over
:17:45. > :17:48.the last five-to-fifteen years, actually, which is consistent with
:17:49. > :17:53.its remarkable and perhaps unique economic success and construction
:17:54. > :17:58.has really driven a lot of the world's economy. Something happens
:17:59. > :18:02.to China real estate, we will all feel a little bit of that news. As
:18:03. > :18:06.the Chinese premier continues his visit to the UK, it is the Chinese
:18:07. > :18:11.property market that is keeping people awake at night. When the
:18:12. > :18:17.global crisis hit, China launched its on stimulus, banks were told to
:18:18. > :18:22.lend, state-owned companies were instructed to invest and it worked.
:18:23. > :18:26.Whilst the US and Europe languished in recession, China's economy grew
:18:27. > :18:30.strongly. But what really drove that growth was a huge increase in
:18:31. > :18:36.construction, much of it funded by debt. House building soared from
:18:37. > :18:41.around six million units a year before 2008 to over ten million a
:18:42. > :18:47.year recently. Here in leafy North London it is quite hard to build new
:18:48. > :18:51.houses and so prices are rising. Over in China though they have the
:18:52. > :18:55.opposite problem. Too many houses have been built, supply is
:18:56. > :18:59.outstripping demand, and in some urban areas one in five properties
:19:00. > :19:05.are now standing vie cannot. Chinese growth has finally begun to slow,
:19:06. > :19:09.property prices are falling and the big fear is a housing slowdown will
:19:10. > :19:13.hit the rest of the economy. The debate now is between those who
:19:14. > :19:18.think China can achieve a soft landing and those who think it is
:19:19. > :19:22.heading for a hard one. A hard landing, in which the property and
:19:23. > :19:26.credit bubbles burst and growth collapses would have a huge impact
:19:27. > :19:31.on the global economy. One investment bank has estimated it
:19:32. > :19:37.would mean world GDP would be 2. 5% lower in 2016. That's almost $2
:19:38. > :19:44.trillion. But not everyone is running scared of the hard landing
:19:45. > :19:48.just yet. Urban populations their demands for housing are mostly met,
:19:49. > :19:51.but there is a large contingent of rural population that doesn't have
:19:52. > :19:56.housing yet. It is very much in the Chinese dream to own a property in
:19:57. > :20:02.urban areas, so there will still be pent-up demand for housing coming
:20:03. > :20:06.from the rural population. I think the medium-term horizon is enough
:20:07. > :20:13.demand for housing. China's property market is looking distinctly ropey.
:20:14. > :20:17.No country is ever experiencing this kind of build-up in debt without it
:20:18. > :20:21.ending in tears. If something is unsustainable it will eventually
:20:22. > :20:27.end. But that eventually could be further away than many seem to
:20:28. > :20:32.assume. Time and time again in the last two decades, China's economic
:20:33. > :20:36.performance has confounded its critics. Whether or not it can avoid
:20:37. > :20:39.a property market crash is one of the really big questions in global
:20:40. > :20:51.economics. It probably makes more sense to worry about condough prices
:20:52. > :20:56.in Nanjing than the cost of a semi, in Dorking. There were interesting
:20:57. > :20:59.inflation figures out today? As interesting as inflation gets. These
:21:00. > :21:02.were very interesting? They are of interest to those who are not
:21:03. > :21:07.economists. Inflation has fallen all the way down to 1. 1.5%. That is the
:21:08. > :21:11.lowest inflation has been in five years. What is interesting about
:21:12. > :21:16.that is this isn't really supposed to happen. The last few years the
:21:17. > :21:18.economy hasn't been, until very recently, the economy wasn't growing
:21:19. > :21:22.very strongly and inflation was high. Now the economy is growing
:21:23. > :21:26.very strongly indeed and inflation is low. Usually it would be the
:21:27. > :21:31.other way around. And alongside this, very low price rises, but
:21:32. > :21:36.quite big moves in house prices, 10% across the country. Almost 20% in
:21:37. > :21:40.London. But most of us have got accustomed to being told by
:21:41. > :21:43.politicians that inflation is the enemy and eats up people's savings
:21:44. > :21:47.and the like, surely very low inflation is a good thing? You might
:21:48. > :21:55.think that, but what you really want is it is like Goldilock's porridge,
:21:56. > :22:02.not too hot and not too cold, just right. The Bank of England has a
:22:03. > :22:04.target of 2%, it is not low it is 2%, at the moment inflation is below
:22:05. > :22:10.target. This is confusing analysts out in the City. Only last week the
:22:11. > :22:14.Governor of the Bank of England, Mark Carney, stood up and said we
:22:15. > :22:17.might have to raise interest rates, the reason you raise interest rates
:22:18. > :22:20.is because inflation is too high. Today we find out it is a bit too
:22:21. > :22:24.low. You are not seriously suggesting there might be an attempt
:22:25. > :22:29.to stoke up inflation a little bit? It seems unlikely that we might try
:22:30. > :22:34.to stoke up inflation, we might get to that point, that is the point the
:22:35. > :22:37.European Central Bank are at. The reason the Bank of England can't do
:22:38. > :22:41.that is because of what is happening in the housing market. You can't cut
:22:42. > :22:46.interest rates when the housing market is up 20%. They might use
:22:47. > :22:50.some of their new tools. What is the outlook for inflation, if you asked
:22:51. > :22:53.people in Whitehall they are looking at what we covered in the top of the
:22:54. > :22:57.programme. They are looking at the Middle East and Ukraine. And they
:22:58. > :23:01.are thinking back to early 2011 during the Arab Spring when unrest
:23:02. > :23:04.in the Middle East, the oil price goes up and pulls up inflation, very
:23:05. > :23:12.bad for the economy and for consumers. Thank you. Ed Miliband,
:23:13. > :23:15.what's he for? The question that bedevils modern politics may finally
:23:16. > :23:19.get an answer over the next few weeks. The Labour Party has set up a
:23:20. > :23:23.number of inquiries to tell it what it ought to do with itself. What was
:23:24. > :23:27.once done by core conviction and block votes at Labour Party
:23:28. > :23:31.Conferences, is now the businesses of think tanks and policy wonks. The
:23:32. > :23:36.first inquiry into what it ought to promise in social policy reports the
:23:37. > :23:42.day after tomorrow. Chris Cook reads this sort of stuff for fun. Radical.
:23:43. > :23:46.Radical. Radical. Radical. Radical. It is clear what word Ed Miliband
:23:47. > :23:57.would use about himself, and we're about to find out if it is true.
:23:58. > :24:01.John Cruddus, his policy thinker has commissioned three big reports, the
:24:02. > :24:04.first from IPPR, comes out this week, Labour will have to decide
:24:05. > :24:09.which bits of it make it to the manifesto. A lot of people in the
:24:10. > :24:15.Labour Party think that Ed Miliband needs to promise to build a bold new
:24:16. > :24:21.design for Britain. To come up with what they call "the big offer". They
:24:22. > :24:25.feel if he will win back blue collar voters in particular and match the
:24:26. > :24:28.popularity for his promise to freeze gas prices, he needs a range of
:24:29. > :24:32.other radical policies. I think there is big policy ideas out there
:24:33. > :24:37.that attract a lot of popular support, like common ownership of
:24:38. > :24:40.railways. But there is also ideas like contribution in welfare and
:24:41. > :24:44.contribution in the boardroom as well as the benefits office, that if
:24:45. > :24:50.Labour embraces in terms of policy will have more effect in persuading
:24:51. > :24:55.voters we are on their side. Labour can't spend big so one of the ideas,
:24:56. > :24:58.to use the jargon, that more investments matched by less
:24:59. > :25:04.entitlement. That means spending money on things that will cut
:25:05. > :25:08.benefits spending later. We pay ?24 billion in housing benefit and we
:25:09. > :25:12.pay ?1 billion to build new houses, it plays into the hands of landlords
:25:13. > :25:16.putting up the rents and all your money is getting swallowed in terms
:25:17. > :25:20.of what you send out to your landlord. That is not straight
:25:21. > :25:24.forward. Let's say you want to spend less on housing benefit because you
:25:25. > :25:28.are going to build more house, that's fine, but you have got to
:25:29. > :25:33.build the houses first. Before people can live in them. So in the
:25:34. > :25:43.short-term that means spending more and that opens Labour up to
:25:44. > :25:47.accusations of profligacy. We will send out the questions of whether
:25:48. > :25:51.people can trust politicians, frankly the people who got us in the
:25:52. > :25:55.mess in the first place we have spent the last four years getting
:25:56. > :25:58.out of. There is a real credibility problem with those who made the
:25:59. > :26:03.mistakes, haven't apologised for them and shown no signs of learning
:26:04. > :26:07.lessons. That is one of the strong messages we will repeat now and
:26:08. > :26:11.through to the election. Their policies don't match up to the big,
:26:12. > :26:15.bold radical network they have been espousing for the last few years. In
:26:16. > :26:18.short voters might feel that what they actually get from Labour
:26:19. > :26:32.doesn't quite match up to what's on the box. Scars of old Labour defeats
:26:33. > :26:35.on credibility, particularly 1992, run deep through the party. Talk for
:26:36. > :26:40.example of nationalised railways will set nerves on the party's right
:26:41. > :26:46.jangling. So there is a quiet debate going on about all of this inside
:26:47. > :26:51.the machine. There is a difference of opinion between weather the
:26:52. > :26:56.Labour Party should simply hope for a small technical win, presuming
:26:57. > :27:01.that if we just hold on to the foot that we got in 2010 and get some
:27:02. > :27:04.Liberal Democrats over, Ed Miliband can become Prime Minister. But there
:27:05. > :27:09.is another path open to us, it is harder and more ambition, and that
:27:10. > :27:13.is to -- ambitious, that is to speak to voters left behind by politics,
:27:14. > :27:16.who may have stopped voting or considering UKIP these days. That
:27:17. > :27:20.will require big policy ideas and big changes in the way we organise
:27:21. > :27:25.as a party. So the argument isn't really about radicalism or not,
:27:26. > :27:29.restoring the contributory principle to welfare, for example, is radical
:27:30. > :27:33.but uncontroversial. The real question is whether Labour dares to
:27:34. > :27:38.be radical in areas where it opens them up to attack. The real test
:27:39. > :27:43.will be where it must spend money, like on social care and housing, and
:27:44. > :27:49.on contentious areas like the public ownership of rail or energy.
:27:50. > :27:53.So the Prime Minister polished his shoes for the Chinese premier today
:27:54. > :27:58.while the Foreign Secretary said it was time to reopen the embassy in
:27:59. > :28:02.Iran. How the world turns? The speed with which an apparently pacified
:28:03. > :28:07.Iraq has collapsed into Civil War is another warning not to take anything
:28:08. > :28:12.for granted. It is 25 years now since the events of a revolutionary
:28:13. > :28:16.year. The Berlin wall, a physical symbol of the Cold War was torn
:28:17. > :28:21.down. A wave of protests spread across Eastern Europe from Poland to
:28:22. > :28:26.Romania. In China, students faced death whilst protesting in Tiananmen
:28:27. > :28:33.Square. And a brilliant young American political scientist,
:28:34. > :28:37.Francis Fukiama, said the end of communism might bring the end of
:28:38. > :28:42.history, he added a question mark in the original version. What do we
:28:43. > :28:47.make of it now. He joins me from Stamford university, author of The
:28:48. > :28:54.End Of His treatment we are joined by Simon Sharman and Melissa Lane,
:28:55. > :29:00.from Princeton is here in the studio. It didn't end did it? You
:29:01. > :29:05.have to understand the term "end" properly. End meant not termination,
:29:06. > :29:09.the question was in the grand philosophical sense of the evolution
:29:10. > :29:15.of human societies in what direction was history pointing? And for 100
:29:16. > :29:19.years progressive intellectuals believed it was pointing towards a
:29:20. > :29:22.communist utopia. I made the simple observation in 1989 that it didn't
:29:23. > :29:26.look like we were going to get there. If we were going to end up at
:29:27. > :29:30.any place it would be something like liberal democracy and the market
:29:31. > :29:35.economy, and I think that still is the most likely termination point of
:29:36. > :29:39.the whole modernisation process, 25 years later. Melissa Lane what do
:29:40. > :29:46.you think? The professor suggested that we couldn't judge his thesis
:29:47. > :29:50.yet, we weren't at the end, we could just see the end in the future. The
:29:51. > :29:53.thesis didn't explore the tensions between liberal democracy and
:29:54. > :30:02.capitalism. Those are the tensions we are seeing ever more alive today.
:30:03. > :30:05.Simon Sharma? Well I think actually what really happened, which is
:30:06. > :30:10.extraordinary, is that a small obstinate, violent, vicious little
:30:11. > :30:15.terrier bit us in the leg while we were looking at the great
:30:16. > :30:19.philosophical horizon. That was religious fanaticism. What the model
:30:20. > :30:25.did not predict was the massive return of systems of belief. Partly
:30:26. > :30:29.it was hopeless at predicting it, and it is hopeless talking about it
:30:30. > :30:33.now. I wonder how many in your magnificent 25 years, how many
:30:34. > :30:39.nights you have spent on Newsnight with people talking about religion
:30:40. > :30:43.and spirituality and mass allegiance. We are still hopeless at
:30:44. > :30:52.constructing an argument for liberal tolerant society. We need to go back
:30:53. > :30:57.to Locke, Jeff Jefferson, and others. Those in the grip of
:30:58. > :31:01.fundamentalism is simply a plutocratic device for getting more
:31:02. > :31:05.and more consumers goods unless you are starving to death in the middle
:31:06. > :31:09.of a miserable desert somewhere in Asia or Africa. So what the end of
:31:10. > :31:15.history failed to predict was that history was looking backwards
:31:16. > :31:18.towards religion, ethnicity, tribalism and nationalism, and that
:31:19. > :31:24.is what we have to deal with. History does tend to look backwards?
:31:25. > :31:27.I think that overstates the importance of religion in the
:31:28. > :31:35.contemporary world. We need a little perspective here. In the 40 years
:31:36. > :31:40.between the 1970s and the crisis of 2008, we went from 35 democracies in
:31:41. > :31:45.the world to 120. A lot of them are very, very imperfect, for the last
:31:46. > :31:49.few years a lot of them have been backsliding, Turkey, Nicaragua,
:31:50. > :31:54.Burma, that is a positive case though. So there have been setbacks,
:31:55. > :31:58.but the world is a very, very different place than it was two
:31:59. > :32:02.generations ago. I think democracy has become the norm. I think even in
:32:03. > :32:07.the Middle East, where you have the centre of this kind of religious
:32:08. > :32:11.low-based politics, very many people do not want ISIS, this kind of
:32:12. > :32:15.radical Jihadism, they want Governments that are responsive and
:32:16. > :32:19.actually a lot of the calls for Sharia Law are due to the fact that
:32:20. > :32:22.the Governments there are so authoritarian and unresponsive and
:32:23. > :32:28.unconstrained, that they actually do want something like the rule of law
:32:29. > :32:33.to reduce corruption. So I think this popular mobilisation for more
:32:34. > :32:40.responsive Government still remains extremely powerful force all over
:32:41. > :32:43.the world. But there is an alternative future being sketched
:32:44. > :32:46.out by these people. Whether or not you agree with them they are
:32:47. > :32:55.sketching out an alternative future, aren't they? Some of them are the
:32:56. > :33:00.jury is still out on how many people will flock to the standard. It is
:33:01. > :33:03.interesting how many people in t Muslim world are not flocking to
:33:04. > :33:08.that standard and the Arab Spring was pulling in the opposite
:33:09. > :33:14.direction. We don't know what it will be. It was a colossal failure.
:33:15. > :33:20.The Arab Spring was a colossal failure. Not in Tunisia. The party
:33:21. > :33:23.it brought to power were the Muslim Brotherhood who have been replaced
:33:24. > :33:29.by an authoritarian antidemocratic regime. I was speaking about Tunisia
:33:30. > :33:35.not Egypt. Well that doesn't suggest to me that the Arab Spring, a moment
:33:36. > :33:38.of brief honeymoon euphoria was any kind of template for what is
:33:39. > :33:45.unfolding now. The trouble is we talk about terrorism, we talk about
:33:46. > :33:49.terrorism and that is a lazy way to describe immense communities gripped
:33:50. > :33:53.by systems of belief. Burma is not an encouraging case. Burma is the
:33:54. > :33:57.case where you actually have Buddhism on the violent March
:33:58. > :34:03.against Muslims. That is not a particularly encouraging situation.
:34:04. > :34:08.Can we explore this other area that you mentioned earlier which is this
:34:09. > :34:13.tension between liberal democracy and market capitalism which seems to
:34:14. > :34:16.be evident now? I think it is all the way back to Greek society and
:34:17. > :34:21.Greek ideas that you have to have political equality. And the question
:34:22. > :34:25.is can you have that with economic inequality. With rising economic
:34:26. > :34:28.inequality I think the cause of political equality is becoming
:34:29. > :34:33.fragile and more and more difficult to be confident that democracies can
:34:34. > :34:37.maintain that in a meaningful way. If you add to that the constraints
:34:38. > :34:40.caused by environmental pressures I think liberal democracy and
:34:41. > :34:46.capitalism as a recipe for the future is looking increasingly under
:34:47. > :34:51.strain. What do you make of that argument? Well I agree with Melissa
:34:52. > :34:55.completely that the rising degree of unequality in countries like the
:34:56. > :34:58.United States and Britain is a very major challenge. Because if you
:34:59. > :35:07.don't have a broad middle-class I don't think you will have the kind
:35:08. > :35:11.of broad support for democracy that the system needs. I'm not sure it is
:35:12. > :35:17.capitalism per say is producing this. One of the highest rates of
:35:18. > :35:21.inequality anywhere is the only half marketised China. It is the progress
:35:22. > :35:26.of technology itself that is destroying a lot of middle-class
:35:27. > :35:29.jobs. It is not clear to me there is an alternative system out there that
:35:30. > :35:32.will produce the kind of wealth we have come to expect from modern
:35:33. > :35:38.economies that is actually going to solve this problem of middle-class
:35:39. > :35:45.decline. Do you think the world has become a safer place though in the
:35:46. > :35:53.last 25 years? No. Not really. I think I agree with the last point of
:35:54. > :35:59.both Francis and Melissa, but I think one extra turn of the knife is
:36:00. > :36:05.the slow death of the planet. The wars we have not yet seen as wars,
:36:06. > :36:09.they are wars for water resources, for example. Melissa and Francis are
:36:10. > :36:14.quite right to suggest that for example the nasty surprise of
:36:15. > :36:18.massive pollution in China has put an incredible dent in the way in
:36:19. > :36:24.which the entire authority of the country legitimises itself. And over
:36:25. > :36:28.the next 25 years, over the next 50 years, without being sanctimonious
:36:29. > :36:35.about having to face climate change, it will have both a political and
:36:36. > :36:39.economic impact. For teeth of that particular difficulty it is starting
:36:40. > :36:43.to bite. You were nodding vigorously there Melissa? I think that is
:36:44. > :36:48.absolutely right. If we go back to the end of history thesis, part of
:36:49. > :36:53.the thesis was we had to restore, consciousness, ideas, ideology as
:36:54. > :36:56.the driving moators of history, not material forces. But the environment
:36:57. > :37:05.is a major weak-up call from the material forces. We need now to
:37:06. > :37:09.intergrate the role of forces, and that is something that the history
:37:10. > :37:14.thesis didn't fully do. You don't feel then that the world has become
:37:15. > :37:19.a much safer place? I think there are different time horizons of
:37:20. > :37:24.safety, and if we are looking 20, 30, 50 years down the road. It is
:37:25. > :37:29.far from safer. That is because you worry about resource wars is it?
:37:30. > :37:38.Resource wars, and simply climate change. Global warming. You know
:37:39. > :37:44.dirty bombs. Hang on. Let's give Francis a little bit of a chance to
:37:45. > :37:53.get a word in edgeways here. Come on. Look I do think that a little
:37:54. > :37:59.bit of impericim would help. If you look at the levels of violence they
:38:00. > :38:03.are going down. A lot of political scientists follow this exactly. The
:38:04. > :38:07.possibility of a major war between two big industrialised countries,
:38:08. > :38:11.which is what we experienced in the two world wars in the 20th century,
:38:12. > :38:20.the chance of that is vanishingly small. So I think you know
:38:21. > :38:22.responding to the headlines you get the impression there is ever
:38:23. > :38:26.increasing chaos in the world, but in fact we live in a world knit
:38:27. > :38:30.together through a system of globalised trade and investment that
:38:31. > :38:33.has produced a tremendous amount of prosperity and quite a lot of piece
:38:34. > :38:38.throughout very much of the world. You were trying to say something? I
:38:39. > :38:43.have to say that is the view from Palo Alto, which is a beautiful
:38:44. > :38:47.place. The view from the Democratic Republic of Congo, or the view from
:38:48. > :38:53.south Sudan, the view from the hellish low intensity wars that go
:38:54. > :39:00.on and on and on and on. Massive violence against women and children.
:39:01. > :39:06.When in the last 100 years couldn't you have picked examples of this.
:39:07. > :39:10.But as I said, if you do this on a really empirical basis, I think
:39:11. > :39:14.there is no question that the number of conflicts and their intensity has
:39:15. > :39:18.fallen over the last two generations. The last word Melissa?
:39:19. > :39:22.The yes of the end of history was really whether the ideas had come to
:39:23. > :39:26.an end. I think actually as we see all the challenges we face we
:39:27. > :39:29.realise we need new ideas and we can't rest completely with the old
:39:30. > :39:35.ones. Thank you very much. The Kennedy
:39:36. > :39:39.Space Centre, the CosmoDrome and now the Isle of Man, 45 years after
:39:40. > :39:43.Armstrong and Aldrin became the first men to walk on the moon, the
:39:44. > :39:48.conquest of space has changed out of recognition. Armstrong may have come
:39:49. > :39:53.in peace for all mankind, but space today is more about commerce. We
:39:54. > :40:02.report now on the rival to NASA to be found in the middle of the Irish
:40:03. > :40:11.Sea. I think there is a real space treasure in here. This is fan it is
:40:12. > :40:16.a tickets I have always wanted to see one of these.
:40:17. > :40:24.These Russian-built spacecraft were designed back in the 1970s, but they
:40:25. > :40:29.have proved themselves in space. American lawyer here has bought them
:40:30. > :40:35.with the idea of putting space tourists into space. It will cost
:40:36. > :40:40.upwards of ?50 million to do it. This This last been in space. There
:40:41. > :40:44.is hardly any leg room at all. But I would do it. I mean even though it
:40:45. > :40:50.is not comfortable, I would pay the money and get out there. What I find
:40:51. > :40:54.slightly freaky is I'm sitting in a Russian space capsule in a hanger in
:40:55. > :41:00.the Isle of Man. Who would have thought it, it is quite bizarre.
:41:01. > :41:05.Those spaceships are part of a space revolution on this tiny island. It
:41:06. > :41:10.is 32 miles long with a total population of only 85,000 people.
:41:11. > :41:15.But it is prosperous, because it is not part of the EU or the UK. Which
:41:16. > :41:20.means it can set low taxes and give generous Government grants. There
:41:21. > :41:24.are 30 space-related companies on the island. Including four of the
:41:25. > :41:29.world's top ten satellite organisations. Together with experts
:41:30. > :41:36.in space finance, regulation and law, this builds up to a $300
:41:37. > :41:42.million a year industry. The island's Government has a history of
:41:43. > :41:47.chasing new areas of business. Hello, lovely to see you in the Isle
:41:48. > :41:51.of Man. The space breakthrough came in 2001. At that time we were
:41:52. > :41:56.looking for new things for the Isle of Man to do. We have a very
:41:57. > :41:59.successful ship registry here. Very successful aircraft registry and the
:42:00. > :42:05.Government had the vision to get involved in acquiring things like
:42:06. > :42:10.orbital farming slots. Satellites sweep around the earth in their own
:42:11. > :42:17.protected volume of space, a firing spot. What gives it an advantage is
:42:18. > :42:21.satellite operators have to apply for them in the country, even the
:42:22. > :42:26.Isle of Man. It attempts the island's attempt to capitalise on
:42:27. > :42:31.the third era of space. Space exploration started in the 1950s as
:42:32. > :42:38.a competition. A race to be the first into orbit and the first to
:42:39. > :42:45.the moon. . By the 170s the race was over and collaboration was the key.
:42:46. > :42:51.Apollo, and Soyuez astronauts shook hands in space in 1979. By the 21st
:42:52. > :42:55.century the space station was a multinational project. But still
:42:56. > :43:00.dominated by nation states. I believe we're entering the third era
:43:01. > :43:04.of space, and it is an era of commercialisation. We are launching
:43:05. > :43:09.more and more satellites every day. Space tourism is taking off
:43:10. > :43:14.literally. The global space industry is booming, especially here on the
:43:15. > :43:21.Isle of Man. It looks small scale but this company is part of that new
:43:22. > :43:25.era. His team built space optics for NASA's Mars Rover. The Isle of Man
:43:26. > :43:30.has links to the international space university in Strasbourg. 60 of
:43:31. > :43:35.their graduates work on the island. And the unemployment rate here is
:43:36. > :43:38.just 2%. There are also the advantages of the Isle of Man, it is
:43:39. > :43:42.a very stable and low-crime environment. If you look around you
:43:43. > :43:46.here there is lots of expensive equipment and we know we can lock
:43:47. > :43:54.the company on a Friday or Saturday and come back on the Monday morning
:43:55. > :44:00.and everything will be in its place. Now I don't want to exaggerate the
:44:01. > :44:03.Isle of Man's toe hold on the growing commercialisation of space.
:44:04. > :44:08.But it has formed a whole new industry for the Isle of Man to
:44:09. > :44:13.exploit. Especially in satellite operations. This is the type of a
:44:14. > :44:16.cube satellite, they do simple experiments in space, but they need
:44:17. > :44:21.to get into space, to do that they piggy back on the launch speaks of
:44:22. > :44:25.other big satellites. You might get one big one and 25 of these. Once
:44:26. > :44:30.they are out there, that means there is a who collection of things
:44:31. > :44:34.orbiting the earth every 90 minutes, faster than a speeding bullet. If
:44:35. > :44:44.they collide it causes chaos. To sort out the resulting financial
:44:45. > :44:47.chaos, you need people like Chris. Wherever there is money there is
:44:48. > :44:51.regulation, and space is one of the most regulated industries in the
:44:52. > :44:59.world. Space law, how can it be enforced, it is out there? It was
:45:00. > :45:03.put in there to prevent people claiming Celestial bodies in space.
:45:04. > :45:07.You can't land on the moon and say it is yours. It is from maritime
:45:08. > :45:12.law, it belongs to none and belongs to all. From that noble start space
:45:13. > :45:17.law has grown to cover everything, orbiting the earth. It is complex
:45:18. > :45:21.and comprehensive. It is almost the space version of car insurance. A
:45:22. > :45:26.lot of the companies come here probably, I hate to say it, for the
:45:27. > :45:30.most boring part of space. For us we are excited by this, this is the
:45:31. > :45:36.business of space. In a world gone mad the Isle of Man, and Britain,
:45:37. > :45:40.were seen as the safe, stable bit. The Isle of Man's success brings
:45:41. > :45:44.home the economic opportunities that have been created now that space
:45:45. > :45:50.exploration is moving from a state-funded model to a commercial
:45:51. > :45:55.business. That's about it for tonight. Here is what the producer
:45:56. > :46:01.insists is a quick peek at tomorrow's show. Show you how
:46:02. > :46:07.delightful it is to cycle in London. It is not delightful, it is a bloody
:46:08. > :46:11.nightmare. It is wonderful. This is the most difficult machine I have
:46:12. > :46:18.tried to cycle on, but Newsnight procured it. I'm going over this
:46:19. > :46:24.way, all right. Before we go tonight, a reminder of a momentous
:46:25. > :46:29.week for fans of the selfie, Twitter unveiled a drony account for sell
:46:30. > :46:41.fees taken on cameras mounted on drones. Their first posting was a
:46:42. > :46:43.slick-looking shot of Patrick Stewart at Cannes. We thought of
:46:44. > :47:33.something else. A lot of dry weather to come through
:47:34. > :47:37.the rest of the week, that said it will be a dull and damp start to the
:47:38. > :47:41.day across many parts of England and Wales tomorrow morning. Hopefully
:47:42. > :47:43.things will brighten up. The best of the sunshine will be across Northern
:47:44. > :47:44.Ireland and Scotland. Another