:00:07. > :00:12.Newsnight has learned that parents complained to the Department for
:00:13. > :00:17.Education about racism and bullying at steiner schools, those schools
:00:18. > :00:21.favoured by less conventional middle-class families. Why has the
:00:22. > :00:26.Government provided public funds for new Steiner free schools. Newsnight
:00:27. > :00:31.has exclusively seen two Department for Education memos which relate
:00:32. > :00:35.serious concerns about Steiner concerns, memos that the British
:00:36. > :00:39.Humanist Association had to go to court to get released. With Russia
:00:40. > :00:47.on manoeuvres, does NATO have the resources and capabilities to handle
:00:48. > :00:50.any future threat from Moscow. No comes the resounding answer from
:00:51. > :00:55.a group of MPs, who say NATO and Britain must do more. We are
:00:56. > :01:04.sisters, hand in hand, posters of the sea and land, thus you go about,
:01:05. > :01:11.about thrice to nine, thrice to mine. The new vogue for joining in
:01:12. > :01:16.at the cinema and theatre. Why is so called "immersive entertainment" so
:01:17. > :01:19.of the moment. Is it just a fad. Whether it is cinema with music,
:01:20. > :01:26.art, theatre I think the audiences now are looking for a new way. I
:01:27. > :01:30.think this and a lot of similar organisations are showing this is
:01:31. > :01:42.not just a pop-up culture, this is the future.
:01:43. > :01:52.Steiner schools, they have been popular for decades among the more
:01:53. > :01:58.liberal and Bohemian, some white say whacky middle-classes, Sandra
:01:59. > :02:02.Bulloch and others former students. We have heard reports that in
:02:03. > :02:08.reports to the Department of Education that some have thought in
:02:09. > :02:14.these schools bullying was how kids worked out their Karma, and in one
:02:15. > :02:18.school there was racism linked directly to the school's philosophy.
:02:19. > :02:28.Since the Government has received these complaints it has agreed to
:02:29. > :02:31.fund three new schools. I think the Steiner philosophy is really
:02:32. > :02:35.interesting, for many reasons. Not least it centres on the child and
:02:36. > :02:41.the child's education hole listically, they focus on the human
:02:42. > :02:46.being, they nurture and they are affectionate and I think that is
:02:47. > :02:55.really important to build the human being before the academic. Sometimes
:02:56. > :03:00.called Waldorf schools or Steiner-Waldorf schools. There are
:03:01. > :03:05.30 schools. Since 20 # 08 three died ones another son the way. But
:03:06. > :03:10.Newsnight has exclusively seen two Department of Education memos which
:03:11. > :03:19.relate serious concerns about the concerns. Memos the British Humanist
:03:20. > :03:33.Association had to go to court to get released.
:03:34. > :03:43.Rudolf Steiner was an Austrian born occultist, but his ideas live on. It
:03:44. > :03:47.is a spiritual doctrine that covers everything from home on thee and
:03:48. > :03:51.biodynamic farming to the purpose of life. This grand work still fills
:03:52. > :03:55.bookshops and includes some rather particular ideas about race and
:03:56. > :04:00.reincarnation. Specifically that people with darker skin are less
:04:01. > :04:04.evolved, but, if they do well, if they have good Karma, they can hope
:04:05. > :04:13.to be reincarnated in later lives as a higher ranked race. Why Aryans, of
:04:14. > :04:20.course, are at the top, they advanced from colonists. Just how
:04:21. > :04:25.many of his less palatable ideas make their way into the classroom.
:04:26. > :04:32.Just how much Rudolf is there in the Steiner Schools. The idea that we
:04:33. > :04:36.have incarnated through the races is a very controversial idea that is
:04:37. > :04:42.not part of our modern thinking in Steiner Schools at all. In fact I
:04:43. > :04:50.would find it quite outrageous and unacceptable and it is not a basis
:04:51. > :04:55.upon which one would want to find any criticism of Steiner schools
:04:56. > :04:59.today because it is not what we believe. Some of those ideas have
:05:00. > :05:02.occasionly cropped up within the private Steiner schools very
:05:03. > :05:06.recently, and some parents are worried about speaking out. There
:05:07. > :05:10.was diversity training at the school and part of it was ticking boxes of
:05:11. > :05:13.which ethnicity you were, four of the teachers ticked all the boxes
:05:14. > :05:18.and the trainer asked why on earth they had done that, because they
:05:19. > :05:22.said they had been all those races and all those teachers were white
:05:23. > :05:25.and obviously they see themselves as the pinnacle. The Department for
:05:26. > :05:29.Education memos also reveal some important concerns about bullying,
:05:30. > :05:32.for example it said that in eight of the 25 private Steiner schools there
:05:33. > :05:37.had been serious complaints about staff bullying pupils. There were
:05:38. > :05:44.also concerns about policies on stamping out bullying, and worries
:05:45. > :05:49.that this might be related to Rudolf Steiner's teachings. The memo
:05:50. > :05:52.reports that one parent witnessed a physical attack on their son where
:05:53. > :05:55.the teacher failed to intervene. The teacher justified the approach by
:05:56. > :05:59.claiming the children were working out their Karma. That is concernly
:06:00. > :06:03.not the approach everywhere. There was an incident where my child was
:06:04. > :06:07.attacked in class, and it was terribly traumatic for everybody
:06:08. > :06:12.involved. The school, however, were incredible at dealing with it. The
:06:13. > :06:18.teacher in the classroom, the assistant were both very NUTTing at
:06:19. > :06:22.the in -- nurturing and caring, and my daughter has flourished and grown
:06:23. > :06:28.after the event. The school management pounced on the problem
:06:29. > :06:31.very quickly. Since the memos were written three state Steiner schools
:06:32. > :06:34.have been opened or approved to open. That is not uncontroversial
:06:35. > :06:39.given the nature of Steiner's work. The DFE said it wouldn't approve
:06:40. > :06:42.anything where racism or bullying were issues, tonight it said it can
:06:43. > :06:46.and would close schools, even private one where is they were. But
:06:47. > :06:49.that doesn't close the question of whether this Austrian mist
:06:50. > :06:54.particular's ideas are actually worth public money? Here to discuss
:06:55. > :07:01.Steiner schools are Francis Russell whose child was a pupil at Greenwich
:07:02. > :07:04.Steiner school, and the chief executive of the British Humanist
:07:05. > :07:08.Association. If I could start with you, the evidence seems to suggest
:07:09. > :07:11.that kids learn at these schools and they are pretty happy, why on earth
:07:12. > :07:18.are you making such a fuss about them? The reason we tried to get the
:07:19. > :07:23.document that is the DfE has finally released because we feared what they
:07:24. > :07:29.contained, eight out of 12 Steiner schools had serious cases of
:07:30. > :07:33.bullying of children by staff which is massively out of proportion than
:07:34. > :07:37.other schools, there was secrecy over teacher training materials
:07:38. > :07:41.within the Steiner teacher training scheme which is he they said they
:07:42. > :07:45.shouldn't let people see their lesson plans and make sure they were
:07:46. > :07:51.lost, that was because of the controversial nature of them. The
:07:52. > :07:55.qasi-religious and mystic systems of Steiner's work was linked directly
:07:56. > :07:58.to incidents of racism and bullying within those schools as well. That
:07:59. > :08:02.is why we are concerned. We are concerned if any sort of ideolgical
:08:03. > :08:10.belief system takes the place of real education in state schools.
:08:11. > :08:13.Francis, the evidence that in some schools bullying was not just
:08:14. > :08:19.tolerated but in some senses thought of as a good thing, as a way of
:08:20. > :08:23.identifying what kind of kid, or what kind of person these kids would
:08:24. > :08:28.grow up to be, doesn't that immensely worry you as somebody who
:08:29. > :08:34.was a parent of a kid at one of these kids? This is total rubbish
:08:35. > :08:37.what you are talking about now, I am a parent who had a child at the
:08:38. > :08:41.school, but I have been involved in setting up and running a particular
:08:42. > :08:45.school over the last six years, and been involved with it for ten and
:08:46. > :08:48.been involved in the movement. The allegations raised in the reports
:08:49. > :08:51.were never tested. These were some parents who had written to the
:08:52. > :08:58.Department for Education, and they were being raised in the reports as
:08:59. > :09:02.issues of how do we manage if parents come up and say these kinds
:09:03. > :09:07.of things with the media. There is absolutely no proof at all about
:09:08. > :09:12.these things. I'm sorry, can I just continue for a moment. What you are
:09:13. > :09:15.decribing does not happen in Steiner schools, that would never happen in
:09:16. > :09:20.our school, it would never happen in any of the schools that I know
:09:21. > :09:26.anything about. But why does the handbook talk about kids being, you
:09:27. > :09:30.know, either victims or bullies and needing to test which category they
:09:31. > :09:33.go into, why do the handbooks say these things? I'm not clear about
:09:34. > :09:37.this handbook at all. What I can tell you is what our policy says,
:09:38. > :09:42.and what policies in all the schools say, and remember they are all
:09:43. > :09:48.inspected and they all have to abide by the independent schools rules.
:09:49. > :09:53.What they say is that bullying is not tolerated. But within Steiner
:09:54. > :09:57.schools, as within many schools, we try to get children to learn to deal
:09:58. > :10:03.with conflict that is going on, but they are not left do that on their
:10:04. > :10:08.own. It is done with guidance of the adults, teachers and parents
:10:09. > :10:19.involved. I'm sorry but all this stuff about the pseudo spiritualism,
:10:20. > :10:22.that is all to do with Steiner's views on anthroposaphy, it is not
:10:23. > :10:26.caught in schools, it is for some adults to use as a way of guiding
:10:27. > :10:32.their lives if they choose to do so. It just does not form any part of a
:10:33. > :10:36.modern Steiner school. Nonetheless he is the driving force
:10:37. > :10:39.intellectually behind it. In his philosophy there is this stuff which
:10:40. > :10:44.I think most people would think of as racist and bonkers about the
:10:45. > :10:48.Aryans being the super-race. Of course it is. Don't you worry about
:10:49. > :10:53.being associated with a school founded on such ideas. Rudolf
:10:54. > :10:56.Steiner had a lot of good ideas about educational provision, which
:10:57. > :11:01.have been taken and developed and progressed, that is what forms a
:11:02. > :11:04.part of the education today. Is there any role for public money on
:11:05. > :11:09.schools based on this kind of philosophy? I obviously don't think
:11:10. > :11:14.so. I think because any state-funded school should be built on proper
:11:15. > :11:18.educational practice and theory and Steiner education and theory isn't.
:11:19. > :11:20.Your attempt to dereceive. Can I say something because you have spoken
:11:21. > :11:25.for a long time and made claims about the documents which is untrue
:11:26. > :11:29.and attempted to dismiss the documents as if they contained just
:11:30. > :11:34.allegations of individual parents, it will completely fail, they quote
:11:35. > :11:37.teacher training manuals which says many of the things that has just
:11:38. > :11:40.been said both in the report and now, about some children being
:11:41. > :11:45.destined by their Karma to be victims and some to be bullied. All
:11:46. > :11:50.of the things that have just been said. Should public money go to the
:11:51. > :11:54.schools? I had to pay and there are many parents who can't afford to pay
:11:55. > :11:57.who would like the education you get in Steiner schools which is really
:11:58. > :12:02.about educating the whole child in a very imaginative and artistic way,
:12:03. > :12:05.if you look at the school inspections reports they are telling
:12:06. > :12:11.parents how good these schools are and how good they are at producing
:12:12. > :12:17.young people with strong self-esteem, academically able and
:12:18. > :12:21.well prepared to go on and be good citizens in life. We will have to
:12:22. > :12:23.leave it there, thank you very much. I thought that was a jolly
:12:24. > :12:28.interesting discussion. It sounds a bit like a bad joke, doesn't it that
:12:29. > :12:33.investors should be piling into investments called "catastrophe
:12:34. > :12:38.bonds", six years after the mother of all financial catastrophes, it
:12:39. > :12:41.isn't a laughing matter. Pension funds and insurance companies are
:12:42. > :12:45.pouring our money into investment which is pay them a good rate of
:12:46. > :12:48.interest, unless, that is, there is a disaster such as a tsunami or an
:12:49. > :13:09.earthquake, in that case they get nothing. Are catastrophe bonds well
:13:10. > :13:13.a catastrophe waiting to happen. Be Six years ago the chopping up and
:13:14. > :13:18.selling on of risk brought the financial world close to disaster,
:13:19. > :13:22.then it was sub-prime mortgages and when the value of those home loans
:13:23. > :13:28.fell the whole system was exposed to the losses. Now there is a new
:13:29. > :13:35.risky, little understood investment. They are called, appropriately,
:13:36. > :13:41.catastrophe bonds. Catastrophe bondses are being bought by UK and
:13:42. > :13:47.US pension funds, I'm not sure they understand the real underlying
:13:48. > :13:52.risks. Catastrophe bondses are basically -- catastrophe bonds are a
:13:53. > :13:55.bet against natural disasters like hurricanes and earthquake, investors
:13:56. > :14:00.get paid interests every year, at the end of the term they get their
:14:01. > :14:03.money back. But, if there is a catastrophe, then the insurers get
:14:04. > :14:13.to keep all the money to cover their losses, and the investors lose
:14:14. > :14:20.everything. So far the returns for investors have been pretty good.
:14:21. > :14:26.Almost 8. 5% a year since 2002. And, they are also a hedge against market
:14:27. > :14:31.losses elsewhere. Catastrophe bonds are what is called an unco-related
:14:32. > :14:37.asset class, that means their return doesn't reflect what's happening in
:14:38. > :14:40.other financial markets. As long as the specified disaster doesn't
:14:41. > :14:48.happen the investor keeps getting paid. Investing is trade off between
:14:49. > :14:53.risk and return. What's the chance that you will lose money, and given
:14:54. > :14:57.that risk, does the rate of return justify taking it. For example would
:14:58. > :15:02.investors buy something that had a one in four chance of making a loss.
:15:03. > :15:14.Not if it paid 5% a year. But they might if it paid 50. When it comes
:15:15. > :15:19.to catastrophe bonds, Giovanni Garcia calculates the probability of
:15:20. > :15:26.the disaster. The probability is 2-2. 75% a year. The bonds are
:15:27. > :15:32.designed to trigger once every 55 years. Since 2007, direct investment
:15:33. > :15:38.by pension funds in catastrophe bonds has gone up by 15-times. But
:15:39. > :15:42.while the risk of disaster is constant, the rates of interest
:15:43. > :15:47.offered have fallen. As more investors pile in bond issuers are
:15:48. > :15:52.offer lower rates of interest, rates on bonds are at record lows. Are
:15:53. > :15:56.pension funds exposing themselves to massive risk for too low a return?
:15:57. > :16:00.This is a completely different sort of risk, it is a completely new risk
:16:01. > :16:05.for pension funds to be getting in to, again I'm just not sure that
:16:06. > :16:12.they have the experience or the expertise in a size myology, New
:16:13. > :16:21.canology, or futurology, whatever it might be, to allow them to make a
:16:22. > :16:26.proper informed decision. The reason why pension funds are dabbling into
:16:27. > :16:33.catastrophe insurance is down to a bigger shift in global finance.
:16:34. > :16:39.Central banks created a sea of money in an attempt to clean up the mess
:16:40. > :16:44.of the last crisis. But this has flooded into all asset classes, from
:16:45. > :16:48.bonds to shares to housing. That sea of money has been partly created by
:16:49. > :16:54.keeping interest rates near zero. Over the last six years interest
:16:55. > :16:58.rates have been at historic lows, so pension funds haven't been able to
:16:59. > :17:01.get the kind of return they need from traditionally safe investments
:17:02. > :17:06.like Government bonds. Instead they have been forced to buy riskier and
:17:07. > :17:13.riskier assets to try to drive up their returns. Since the crash this
:17:14. > :17:18.search for yield has been the defining characteristic of financial
:17:19. > :17:22.markets. Some people see it everywhere. I think in one sense
:17:23. > :17:26.there is lack of discretion in terms of what investors might be investing
:17:27. > :17:32.in currently, anything with a yield will do. Stephen King is HSBC's
:17:33. > :17:37.chief economist, he sees low interest rates fuelling a search for
:17:38. > :17:41.higher yields, across all financial markets and driving ever-greater
:17:42. > :17:46.risk taking. It does reflect the fact that investors are desperate to
:17:47. > :17:49.get higher returns, they find is very difficult to get the higher
:17:50. > :17:53.returns when the economies are so incredibly weak, as a consequence
:17:54. > :18:02.they are pushed into areas that are riskier or more esoteric. The risks
:18:03. > :18:07.are real. The valuation of many cat-bonds is based on the minimal
:18:08. > :18:10.risk of disaster, a major disaster could trigger a large loss in some
:18:11. > :18:16.bonds that could bring down the price of all of them. The worry is
:18:17. > :18:19.so much money has flooded into catastrophe bonds that they have
:18:20. > :18:23.become overvalued, you can see the same alarm signals across all sorts
:18:24. > :18:26.of different financial instrument, a lot of confidence in any of these
:18:27. > :18:36.could trigger a sell-off across wider markets. Low interest rates
:18:37. > :18:40.have been used by central banks to try to restore the economy to
:18:41. > :18:45.health. But they have been so low now for so long that investors are
:18:46. > :18:54.taking risk they otherwise wouldn't take. Catastrophe bonds might prove
:18:55. > :18:59.a risk too far, the next little understood investment that could
:19:00. > :19:04.spiral into disaster. Here with me to assess whether the cure for the
:19:05. > :19:07.banking crisis all that cheap money that the Bank of England and other
:19:08. > :19:13.central banks created is enbeginedering in fact a new
:19:14. > :19:16.financial disaster is the economist George Magnus. Everywhere you look
:19:17. > :19:20.at the moment you see bonkers prices, if you look at the market in
:19:21. > :19:26.Italian and Spanish Government bonds, two pretty risky Governments
:19:27. > :19:29.they are more expensive than an American Government bonds, which
:19:30. > :19:34.most people would say is rather crazy. Why haven't investors learned
:19:35. > :19:41.their lessons? Why do they appear to be taking such ridiculous crazy
:19:42. > :19:49.risks again? Well, the cynical answer is that they are just myopic
:19:50. > :19:55.and prone to crowds and sheep, all marching off in the same direction
:19:56. > :20:00.together. The slightly more serious answer but one that begs a lot of
:20:01. > :20:06.questions, is investors and financial markets are just totally
:20:07. > :20:12.geared to the idea that money is cheap and they have been told by
:20:13. > :20:15.Mark Carney, January until Yellin, the heads of the central banks
:20:16. > :20:20.around the world. They have been told in no uncertain terms that
:20:21. > :20:25.interest rates will stay close to zero for an extended period of time.
:20:26. > :20:29.So they have no risk to worry about that interest rates will go on they
:20:30. > :20:32.can carry on crowding into risky investments, extracting higher
:20:33. > :20:37.interest rates, or as the course pond dent said the search for --
:20:38. > :20:43.correspondent said the search for yield without impunity, despite the
:20:44. > :20:49.fact that the risks haven't changed and may change soon. The thing is
:20:50. > :20:53.what goes up will come down, how worried are you that the bubbles in
:20:54. > :20:56.property and Government bonds as and when they burst there will be a bit
:20:57. > :21:01.of a mess, not just for investors but for all of us? That is bet I
:21:02. > :21:05.would take. Because partly because we can see that the debate is
:21:06. > :21:10.beginning to change. In this country, in the UK, we know that the
:21:11. > :21:14.Bank of England is now on the cusp of, not on the cusp but it is
:21:15. > :21:17.certainly debating very actively whether it should raise interest
:21:18. > :21:22.rates later this year and almost certainly will do. And in the United
:21:23. > :21:27.States the process of withdrawing from the quantitative easing
:21:28. > :21:32.programme, called tapering, will end October. The markets are, some
:21:33. > :21:35.markets are actually quite wedded to the idea that interest rates in the
:21:36. > :21:40.US will rise some time towards the summer or the autumn of 2015. But it
:21:41. > :21:44.could happen earlier, because the economy actually is coming back
:21:45. > :21:50.quite nicely. As and when interest rates rise, is that when we will see
:21:51. > :21:56.the first real test of whether the markets are safe or, essentially is
:21:57. > :22:00.that when we might see the first cracks that could be rather
:22:01. > :22:05.damaging? Yes, today there was a minor crack, Wall Street at one
:22:06. > :22:09.stage was down 300 points, and could have been lots of reasons for this,
:22:10. > :22:13.but one of the reasons could have been that employment costs, wages
:22:14. > :22:17.and salaries rose by their fastest rate in the second quarter since the
:22:18. > :22:21.great financial crisis. Which obviously gets people worried about
:22:22. > :22:24.the fact that interest rates may go up sooner. It will happen and even
:22:25. > :22:28.though interest rates in five years time may not be substantially higher
:22:29. > :22:33.than they are today, certainly not as high as they were ten or 20 years
:22:34. > :22:39.ago, the shock of moving out of one regime into another one which is
:22:40. > :22:44.uncertain I think will exact a big toll, I think. Our Government,
:22:45. > :22:47.Central Bank governor, Mark Carney, Governments in America and Europe
:22:48. > :22:51.will say that they have put in place new regulations to protect us from
:22:52. > :22:57.the kind of shocks to the financial system we saw in 2008. Have they
:22:58. > :23:02.done that in fact? As and when these markets cracked will there be a
:23:03. > :23:13.significantly damaging impact on our proport? Yes, I think so. To a
:23:14. > :23:17.degree, I think they talk a lot about macro Prudential regulation,
:23:18. > :23:20.which is about trying to make financial institutions safer, you
:23:21. > :23:25.can do that with a big bank ore insurance company. But you -- bank
:23:26. > :23:28.or insurance company, but you can't really protect the system from an
:23:29. > :23:32.environment. What has happened is the price of lending and capital has
:23:33. > :23:37.fallen to level which is are inappropriately low. We have to get
:23:38. > :23:40.back to normal and it will be a difficult transition. In a moment we
:23:41. > :23:44.will be looking at recommendations for NATO reform from the Commons
:23:45. > :23:50.defence committee. But while we have been on air the American Secretary
:23:51. > :23:55.of State, John Kerry, and the United Nations secretary-general, Ban
:23:56. > :23:59.Ki-Moon, have announced a 72-hour humanitarian ceasefire in Gaza
:24:00. > :24:09.through du to begin at 8.00 on Friday morning. Our diplomatic
:24:10. > :24:13.editor has the latest news. That is the news, the ceasefire has
:24:14. > :24:18.been agreed, the Secretary of State said that Israel and Hamas have
:24:19. > :24:22.agreed to it. We have had some shaky or non-existent attempts at
:24:23. > :24:26.ceasefires before, this is meant to last 72-hours, it may well
:24:27. > :24:29.illustrate an Israeli sense that America is losing patience. And the
:24:30. > :24:34.opinion of the world is moving against them. Do you think this is a
:24:35. > :24:37.ceasefire that will hold, because we have had false dawns before now? I
:24:38. > :24:41.wouldn't make a judgment one way or the other. It could be the beginning
:24:42. > :24:48.of the end as it were, but it may be a temporary ceasefire. On this other
:24:49. > :24:56.issue that we have been looking at today which is the capability of
:24:57. > :25:03.NATO, MPs have raised concerns that NATO is not in a position to defend
:25:04. > :25:07.itself, were there to be a renewed threat from Russia, what has their
:25:08. > :25:11.argument been? We have a situation now where there are fresh Russian
:25:12. > :25:17.build-ups with the borders of Ukraine, we have seen pictures over
:25:18. > :25:20.the plast few days. NATO talk about 15,000 Russian troops amassing
:25:21. > :25:23.there. The west could get caught again in this respect. The MPs have
:25:24. > :25:26.looked at what already has happened there, and also asked questions
:25:27. > :25:30.about well what if suddenly one of the battic Republics or Poland feels
:25:31. > :25:34.very threatened by one of these Russian moves. What could we
:25:35. > :25:38.actually do? They think the answer is not much and not much quickly. So
:25:39. > :25:41.they have got a series of recommendation which is they
:25:42. > :25:44.published today, the defence committee staking a claim, if you
:25:45. > :25:49.like, to get the Government moving on this, and calling for dramatic
:25:50. > :25:52.improvements to rapid reaction, moving stuff to threatened areas,
:25:53. > :25:55.pre-positioning to help that happen faster, putting kit down in some of
:25:56. > :26:01.the eastern European countries ready to go, and the continuous presence
:26:02. > :26:04.of NATO forces there. I think historically the military and
:26:05. > :26:09.Government haven't always been as one on this kind of thing. What is
:26:10. > :26:13.your sense, is there unity on what to do? I have discovered there has
:26:14. > :26:17.been quite a battle going on behind the scenes and actually in the run
:26:18. > :26:21.up to the paper from the Defence Select Committee today, the British
:26:22. > :26:26.general who stepped down in the spring from his job in the NATO
:26:27. > :26:29.military structure, he made some outspoken remarks in a newspaper,
:26:30. > :26:33.which caused Alex Hammond to basically -- Philip Hammond to try
:26:34. > :26:36.to get the man disciplined and stop him speaking again on the subject.
:26:37. > :26:40.He was furious about it, it endangered in his mind his sort of
:26:41. > :26:42.discipline he thought he had got the department under. The defence
:26:43. > :26:48.committee asked the general to come in and tell them what sort of risk
:26:49. > :26:52.he is thought there were to the Baltic Republics for example. The
:26:53. > :26:58.fact is that there is a Russian aviation base within 40 minutes
:26:59. > :27:04.flying time of Riga. So unless NATO has stationed forces in the Baltic
:27:05. > :27:10.states I think it is highly unlikely that NATO could respond quickly to a
:27:11. > :27:13.sudden surprise attack. Now, of course the MPs at the time wanted to
:27:14. > :27:19.know what did the Defence Secretary make of this. He in fact pretty much
:27:20. > :27:22.rubbished the general. He said this morning, sitting in that chair, that
:27:23. > :27:26.he thought we ought to have a significant NATO and UK presence in
:27:27. > :27:31.the Baltic states. Now that is not in the SDSR and the SDSS. It is not
:27:32. > :27:38.the Government's view, and it is not NATO's view, and he is a retiring
:27:39. > :27:43.general on resettlement leave. He can speak for himself but he doesn't
:27:44. > :27:47.speak for the department. What has happened today is effectively the
:27:48. > :27:50.MPs have bought almost everything the general said. They have been
:27:51. > :27:54.wrapped into the recommendations of what should happen. This, if you
:27:55. > :27:58.like, pre-figures a bigger battle that will happen about the defence
:27:59. > :28:01.budget, about the posture of the Armed Forces over the next year as
:28:02. > :28:05.they move into the next defence review and do the Government
:28:06. > :28:08.statements about the seriousness of what has been happening in Eastern
:28:09. > :28:13.Europe actually mean they have got to change course, spend more on
:28:14. > :28:17.defence and reposition the forces? Thank you. Now one of the MPs' main
:28:18. > :28:23.recommendation was the establishment of a continuous NATO presence in
:28:24. > :28:33.vulnerable states including Estonia. That country's Defence Minister
:28:34. > :28:40.joins us now. Can I just ask you, how vulnerable do you feel, do you
:28:41. > :28:45.regard a threat from Russia as a serious really serious thing to your
:28:46. > :28:52.security? Well there is definitely no panic in Estonia in the streets
:28:53. > :28:54.or among the policy makers. We have invested significantly in our
:28:55. > :29:00.defence and security over the years. We have very strong relationships
:29:01. > :29:05.with the strongest and biggest allies, both in Europe and on the
:29:06. > :29:10.other side of the Atlantic. However, we have seen a very significant
:29:11. > :29:15.build up of Russian military forces in our region. So basically I would
:29:16. > :29:20.agree with most of the recommendations that were made by
:29:21. > :29:25.the MPs from the House of Commons, indeed actually those reflections,
:29:26. > :29:32.those recommendations reflect very much what I told the delegation when
:29:33. > :29:37.they visited Tallin. I definitely believe we need pre-positioned
:29:38. > :29:41.forces and assets in our part of the world. We need better, clearer
:29:42. > :29:45.defence plans, we need to improve our situational awareness and our
:29:46. > :29:49.early, our rapid reaction capability. So basically I agree
:29:50. > :29:57.with the majority of those recommendations definitely. Just to
:29:58. > :30:03.be clear, how serious do you think NATO's deficiencies are? NATO
:30:04. > :30:08.collectively I believe is still very much the, by far the strongest
:30:09. > :30:15.player when it comes to conventional military forces. However, I do
:30:16. > :30:21.believe that the current regime in the Kremlin, Putin's regime thinks
:30:22. > :30:26.they have certain advantages, they have parity with NATO and
:30:27. > :30:29.superiority in convention terms when it comes to certain regions, they
:30:30. > :30:37.believe probably with some justification that they have a time
:30:38. > :30:41.advantage. They have been doing snap exercises while Putin can take most
:30:42. > :30:45.of the strategic decisions on his own, so basically in order to cope
:30:46. > :30:50.with this situation we need to improve our ability to take
:30:51. > :30:55.decisions quickly, but also to implement those decisions quickly.
:30:56. > :31:03.So this definitely requires pre-positioning of assets, this
:31:04. > :31:07.requires also more regular exercises with more realistic defence
:31:08. > :31:11.scenarios. You would be happy to have foreign troops on your soil,
:31:12. > :31:18.that is not a problem for you? Well, basically, yes, foreign troops, but
:31:19. > :31:24.also pre-positioning of equipment, of the kind that is required to
:31:25. > :31:29.respond quickly to any scenario that we can foresee realistically
:31:30. > :31:34.unfolding. I would say that we have very strong confidence in NATO
:31:35. > :31:38.Article 5 and the allied solidarity. However, we would like to do
:31:39. > :31:42.everything it takes to avoid a situation that would trigger Article
:31:43. > :31:48.#R5, and deterrence is the best way to do that. I do believe that
:31:49. > :31:52.strength is language that Putin's regime understands. I think some
:31:53. > :31:59.would say it also occasionally inflames him. Thank you very much.
:32:00. > :32:04.As MPs flee Westminster for their summer holiday one man will be left
:32:05. > :32:10.behind pouring over polls and that infamous news grid, he's Linton
:32:11. > :32:14.Crosby and the adviser paid to propel David Cameron back into
:32:15. > :32:20.Number Ten in 2015. Like Labour's Peter Mandelson and Alastair
:32:21. > :32:24.Campbell, he's seen as the Tory Party's controller of who is up and
:32:25. > :32:31.down in the cabinet. Has he become too powerful? We have been finding
:32:32. > :32:38.out. You always play to win, you don't play to come second. The smirk
:32:39. > :32:43.is attitude, it is a person who says he can get away with this.
:32:44. > :32:47.I'm no genius, just an ordinary person who wanted to help the
:32:48. > :32:51.Conservative Party. If, for some reason, you would like
:32:52. > :32:55.to see the most powerful people in the Tory Party on a Monday morning
:32:56. > :32:59.at 8.00am come down to this street corner and you will see loads of
:33:00. > :33:02.them streaming out of this building, the campaign headquarters and up to
:33:03. > :33:05.Whitehall and Downing Street and the Prime Minister's layer, where they
:33:06. > :33:09.will have a planning meeting for the week, but actually nine months out
:33:10. > :33:13.from a general election they are on war footing. One of their number is
:33:14. > :33:16.head of their general election campaign, Linton Crosby, to many
:33:17. > :33:24.people he's the most powerful person in the Tory Party.
:33:25. > :33:28.Tory communication chief, Craig Oliver got into trouble for getting
:33:29. > :33:31.Crosby into Downing Street. But since arriving he has been kept
:33:32. > :33:40.close. Whenever David Cameron is in trouble he brings Crosby to assure
:33:41. > :33:45.restless MPs, they know's a winner. Thrusting immigration into the
:33:46. > :33:50.campaign glare has been attributed to Australian election strategist,
:33:51. > :33:54.Linton Crosby. He notched up a woulding four victories for John
:33:55. > :33:59.Howard, and the boss was grateful. Briefly but sincerely I can't let
:34:00. > :34:03.the opportunity of Linton's report go by without recording mime mens
:34:04. > :34:09.personal gratitude to you Linton. But it also got pretty nasty. The
:34:10. > :34:13.Indonesian ferry carrying the asylum seekers was intercepted by the
:34:14. > :34:17.Australian Navy at the end the Prime Minister John Howard said those on
:34:18. > :34:22.board threw children into the sea to force the Navy to pick them up. Yes
:34:23. > :34:27.he did run campaigns for John Howard that were largely, or significantly
:34:28. > :34:34.fear-based, they were trying to worry people about the fact that
:34:35. > :34:37.there was this asylum seeking and illegal immigration going on, and
:34:38. > :34:41.John Howard would determine who comes to the country and under what
:34:42. > :34:45.circumstances. There is a lot of unfair stuff thrown at Linton about
:34:46. > :34:51.the dog whistling and the racism. You will read here that this is part
:34:52. > :34:56.of Crosbyism, well it wasn't, it was John Howard, the Prime Minister at
:34:57. > :35:01.the time, and his Defence Minister, Peter Reith, who actually said those
:35:02. > :35:04.things. In 2005 he came to work in the UK for another Howard, Michael
:35:05. > :35:09.Howard, and he went hard on immigration again. The theory is
:35:10. > :35:13.that you some how put out these messages, that people can't
:35:14. > :35:17.generally hear, but the people who need to hear them pick them up and
:35:18. > :35:21.pond and vote your way. They are not issues you talk about in the broad.
:35:22. > :35:24.But, hey, everyone knew that Michael Howard and the Conservatives were
:35:25. > :35:27.focussing on immigration and crime and all of these things, no-one
:35:28. > :35:31.could say they were trying to secretly, below the line, through
:35:32. > :35:34.phone calls or direct mail letters, address an issue that they were
:35:35. > :35:40.trying to hide from the rest of the voters. The Tory vote share went up
:35:41. > :35:44.in that election, but they still lost. Polling would later show that
:35:45. > :35:51.the country wanted a crackdown on immigration, just not from the
:35:52. > :35:58.Conservatives. Unlucky in 05, things picked up on getting Boris Johnson
:35:59. > :36:01.elected in 2008 and 2012. Boris is a very loyal member of the team and
:36:02. > :36:05.good to have. Immigration took a back seat, instead they promised to
:36:06. > :36:11.cut commuting costs and crime for the outer suburbs, Linton Crosby
:36:12. > :36:16.doesn't appear to run cookie cutter candidate, which brings us to 2015
:36:17. > :36:20.and how he will run David Cameron. Linton Crosby is fond of the saying
:36:21. > :36:23.of this man, General Slim, whose statue is not far from Downing
:36:24. > :36:28.Street. Slim said in battle things are rarely as good or as bad as the
:36:29. > :36:33.first reports of excited men would have them. I can tell you firsthand
:36:34. > :36:37.that Linton Crosby detests the breathless ups and downs of
:36:38. > :36:42.Westminster gossip, instead he gets his politicians to focus on three or
:36:43. > :36:45.four core messages and rams them home over months and months and
:36:46. > :36:48.preferably years and years. Sources of mine who have dared to deviate
:36:49. > :36:53.from those messages know about it. They get rung up for the Linton
:36:54. > :36:59.Crosby hair dryer treatment. It doesn't found like a hugely big
:37:00. > :37:04.insight, you would be amazed how many British politicians find it
:37:05. > :37:10.difficult to stick to the script. Scrape barnacles off the boat said
:37:11. > :37:14.Linton Crosby. The energetic Health Secretary, Jeremy Hunt is always
:37:15. > :37:20.trying to announce new ideas on health but stopped by the iron grip
:37:21. > :37:23.of Crosby. But the biggest barnacle of all, Michael Gove, the Prime
:37:24. > :37:28.Minister was shown polling that he was so unpopular it could be an
:37:29. > :37:35.electrical barnacle, he moved Gove and the Prime Minister remonstrate,
:37:36. > :37:41.and the Chancellor remonstrated but lost. Everyone would love to come to
:37:42. > :37:46.a party and say they have a silver bullet for all the problems. They
:37:47. > :37:49.don't, they have the techniques and mechanisms for consolidating the
:37:50. > :37:53.vote and growing the pool. That is what you try to do, grow the pool of
:37:54. > :37:57.voters who potentially might listen to you. That is obviously the advice
:37:58. > :38:02.that Linton is giving to the Tories. Try to grow the pool on right by
:38:03. > :38:06.finding policies to appeal to the defectors, to UKIP, find some
:38:07. > :38:13.policies which appeal to women voters. It is 2. 30 and we have seen
:38:14. > :38:16.a steady stream of Tories into the building although it is the
:38:17. > :38:21.holidays. He's running a tight ship. Every day he's in from six through
:38:22. > :38:28.until late at night. Instead of his own office tucked away on the side,
:38:29. > :38:32.he sits in the thick of things alongside juniors and interns alike,
:38:33. > :38:36.that is why he's liked he has few airs and graces. It is from this
:38:37. > :38:39.building he's controlling the Tory message, if at the last election
:38:40. > :38:42.there was four different characters with four different takes on how the
:38:43. > :38:47.Tories were fighting the election, this time round it will be just one.
:38:48. > :38:50.In the words of one of my source, Linton Crosby's word is the law.
:38:51. > :38:55.Economic competence, immigration, welfare reform, Crosby's messages
:38:56. > :38:58.next year, but too heavy on immigration and ethnic minority
:38:59. > :39:02.voters will be frightened off the Tories. Too harsh on welfare won't
:39:03. > :39:07.help them with the north of Britain. Right now the PM is on holiday,
:39:08. > :39:12.Linton Crosby is not taking a break, for a few weeks at least he's really
:39:13. > :39:18.in charge. Here to discuss Crosby's influence are the former London
:39:19. > :39:23.mayor, Ken Livingston and Conservative activist and Times
:39:24. > :39:29.columnist, Tim Montgomerie. Allegra says the Chancellor was overruled by
:39:30. > :39:33.Linton Crosby and as a result of polling Michael Gove was demoted.
:39:34. > :39:40.That's no way to run a Government is it? I think it is probably true. But
:39:41. > :39:44.the reason why David Cameron is listening to Linton Crosby is partly
:39:45. > :39:50.you have the reason there in Ken Livingston. The stories couldn't
:39:51. > :39:54.defeat Tony Blair, Ken Livingston did, he won huge majorities in
:39:55. > :39:57.London, but it was Linton Crosby's strategy with a little help from man
:39:58. > :40:03.called Boris Johnson that unseated Ken. In Australia Linton Crosby
:40:04. > :40:07.helped John Howard to four victories. It is that campaigning
:40:08. > :40:10.nouse, and the ability to run a campaign, understand it properly,
:40:11. > :40:14.understand opinion polls and the public. That is why the
:40:15. > :40:18.Conservatives are willing to hire and listen to him. There is a
:40:19. > :40:22.paradox, all the evidence shows one of the reasons politicians are so
:40:23. > :40:25.unpopular is people think they don't show leadership that it is all about
:40:26. > :40:29.spin and polling. Isn't it just part of the whole eating away at
:40:30. > :40:34.confidence in politicians that are actually powerless and they are run
:40:35. > :40:38.essentially by the ad men? We say we like conviction politicians but when
:40:39. > :40:43.they do things we don't like them to do we don't necessarily respect
:40:44. > :40:49.them. Opinion polls are our way of voting between election, telling
:40:50. > :40:53.politicians what we think about what is going on. Sometimes it is wise to
:40:54. > :40:57.listen to them, and sometimes it is right for Ken Livingston to ignore
:40:58. > :41:00.views about the Congestion Charge and plough ahead. But it matters
:41:01. > :41:04.during elections and Linton Crosby is a good interpreter of them. You
:41:05. > :41:08.don't like Linton Crosby, you think of him as an evil person, isn't that
:41:09. > :41:13.just because he got you defeated? He was incredibly successful? He's
:41:14. > :41:19.probably the most successful progandists since Dr Joseph Gobeles,
:41:20. > :41:22.it is a joke I'm not suggesting for one minute they are in the same
:41:23. > :41:26.league. They have one thing in common, it is about fear, that is
:41:27. > :41:30.what is so demeaning about the politics. When I came into politics
:41:31. > :41:35.it was debating about issues, now it is smear and fear. What we should
:41:36. > :41:38.have in the next nine months is an endless debate about how to turn the
:41:39. > :41:43.economy round and where it will go in the future. Crosby will do
:41:44. > :41:48.everything to stop that, it will be immigration, benefits cheats, trade
:41:49. > :41:52.unions. It is not true, if you look at the long-term economic plan every
:41:53. > :41:55.Tory spokesman has to use day in and day out, that is Linton Crosby's
:41:56. > :42:00.argument, he's arguing for them to focus on the economic issues not
:42:01. > :42:04.just welfare. He's not honest about that. We have had 30 years of
:42:05. > :42:07.neo-liberal economics under Thatcher and continued by Tony Blair, it
:42:08. > :42:13.hasn't worked. We are worse off than we were. Surely the issue here is a
:42:14. > :42:16.different one. We recently had the leader of the Labour Party, Ed
:42:17. > :42:26.Miliband, saying he will back away from image building and spin, let's
:42:27. > :42:30.be clear they just hired David Axelrod from America, the game is up
:42:31. > :42:34.and Government is run by spin and pollsters. That was one of the
:42:35. > :42:37.weaknesses of new Labour, they forgot about the core issues and
:42:38. > :42:40.pandered to it. Have you confidence that Ed Miliband will be different?
:42:41. > :42:44.Absolutely, whenever I'm with Ed Miliband he's talking about issues,
:42:45. > :42:47.what do we learn from the success of the German economy. He's never
:42:48. > :42:53.obsessed by this sort of spin nonsense. You look at the key
:42:54. > :42:59.people, they are people who mobilise and organise activists. What about
:43:00. > :43:03.David Axelrod an American campaigner at a lot of money paid for by Labour
:43:04. > :43:07.activists, the idea th Ed Miliband is very different? The key thing
:43:08. > :43:12.about Clinton is he built a machine. That is what I tried do I couldn't
:43:13. > :43:17.defeat Boris, but we built a machine that mobilise add lot of people
:43:18. > :43:21.across London, got them out, not enough to win N situation where Ed
:43:22. > :43:24.Miliband faces what I faced, a completely hostile media, that is
:43:25. > :43:29.the core. Build the machine, reach people on the doorstep. I think this
:43:30. > :43:32.debate will run all the way to next May and it would be jolly
:43:33. > :43:39.interesting to see what it does to the overall turnout, I'm not sure
:43:40. > :43:48.everyone is enthused? Let's remember the real smear tonight was yours
:43:49. > :43:53.with Joseph Gobeles. Not Linton Crosby.
:43:54. > :44:00.Cinema fans were venting their fury, but after a few nights of a new
:44:01. > :44:05.fangled screening of Back to the Future were cancelled at the last
:44:06. > :44:09.night, tonight 4 thousand young people made it to -- 4,000 young
:44:10. > :44:15.people made it to a secret location dressed as characters of the film,
:44:16. > :44:29.it is what is known as "immersive entertainment", we have jumped on
:44:30. > :44:33.the hover board for a look. It is so exciting, take one of your
:44:34. > :44:40.favourite movies of all time and feel like you are part of it. The
:44:41. > :44:44.secret is now out, somewhere in East London, after delays and
:44:45. > :44:49.cancellations the first night of a summer-long project. Every time from
:44:50. > :44:54.now on when I watch the film it will be I was there. This is the biggest
:44:55. > :45:02.event of its type ever held. A full on replica of Hill Valley, as any 80
:45:03. > :45:06.nostalgia will tell you, scene of Back to the Future. Each of the
:45:07. > :45:10.shops and buildings is say theed to be true to the film itself, from the
:45:11. > :45:14.estate agents to the bank on the corner. There will be live
:45:15. > :45:20.performances from actors and live music once the night is finished. A
:45:21. > :45:24.long way from the Multiplex or the cinema on the high street. The film
:45:25. > :45:29.is shown in full, but the plan is more ambitious than outdoor cinema,
:45:30. > :45:33.with some dressing-up. There is a generation of audience that is are
:45:34. > :45:36.not satisfied with the massive experience any more I think they
:45:37. > :45:45.want to be part of it. That is what I am I'm interested in, that the
:45:46. > :45:48.audience and performance is blurred, that wherever you are you can become
:45:49. > :45:54.part of the story. Secret cinema has come a long way from its underground
:45:55. > :45:58.roots, screening cult clackss to small audiences. Like a video game
:45:59. > :46:02.there are areas to explore and hidden secrets to find. All too much
:46:03. > :46:05.effort say some. The problem I guess with the immersive experience is
:46:06. > :46:11.because there is so much of it and because you are so aware that there
:46:12. > :46:15.is so much going on it can become a box-ticking exercise where you feel
:46:16. > :46:19.you have to complete the thing rather than letting it wash over you
:46:20. > :46:27.as a purer experience. But immersive entertainment is a broad term,
:46:28. > :46:31.taking in everything from Michael Sheen's performance of the passion.
:46:32. > :46:36.To this tower block in Popular where a new version of Macbeth is played
:46:37. > :46:41.in different rooms in the building. The performance stops at 7.00, and
:46:42. > :46:46.the audience is split into smaller groups of ten, and brought into this
:46:47. > :46:51.doorway part of the underground car park, part of the network of housing
:46:52. > :46:58.estates in East London. The weird sisters, hand in hand, posters of
:46:59. > :47:02.the sea and land, thus do go about. We have just been astound today the
:47:03. > :47:06.reception we have got and the amount of audience members, and selling out
:47:07. > :47:10.four months before the performance is incredible. Our audiences
:47:11. > :47:13.yearning for something different and outside of the living room. With so
:47:14. > :47:16.much choice nowadays in terms of media, this type of performance
:47:17. > :47:19.gives people the real experience which they are looking for,
:47:20. > :47:25.interaction with audience and actors and being able to see a story from
:47:26. > :47:30.the inside out. Whether film or theatre, events like this are doing
:47:31. > :47:35.well at the moment, Back to the Future has sold 65,000 tickets at
:47:36. > :47:40.more than ?50 each. Secret cinema is making real money. Charging over ?50
:47:41. > :47:45.a ticket. You think about it, a cinema you are looking about ?10.
:47:46. > :47:52.London prices. So they are making huge amounts of money for the Grand
:47:53. > :47:55.Budapest Hotel a production they put on recently, that contributed over
:47:56. > :48:00.one million pounds to the UK box-office for that film. We are
:48:01. > :48:06.looking to be obviously a profitable business. But we're not, for me the
:48:07. > :48:11.passion of it is making it the best it could be. This then is no longer
:48:12. > :48:15.a niche experiment, it is well and truly mainstream. The challenge for
:48:16. > :48:18.secret cinema and others like it will be to keep growing without
:48:19. > :48:25.losing the sense of mystery, the things that made it popular in the
:48:26. > :48:29.first place. I have massively enjoyed keeping the seat warm for
:48:30. > :48:46.the past three days, sadly that is all I and we have time for. Good
:48:47. > :48:50.night. There is rain in the forecast, some a lot some very
:48:51. > :48:51.little. The main focus of rain