31/07/2014 Newsnight


31/07/2014

Robert Peston looks at a row over Steiner schools, catastrophe bonds, whether Nato is prepared for Russia, a Lynton Crosby profile, and questions if immersive theatre is a fad.


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Newsnight has learned that parents complained to the Department for

:00:07.:00:12.

Education about racism and bullying at steiner schools, those schools

:00:13.:00:17.

favoured by less conventional middle-class families. Why has the

:00:18.:00:21.

Government provided public funds for new Steiner free schools. Newsnight

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has exclusively seen two Department for Education memos which relate

:00:27.:00:31.

serious concerns about Steiner concerns, memos that the British

:00:32.:00:35.

Humanist Association had to go to court to get released. With Russia

:00:36.:00:39.

on manoeuvres, does NATO have the resources and capabilities to handle

:00:40.:00:47.

any future threat from Moscow. No comes the resounding answer from

:00:48.:00:50.

a group of MPs, who say NATO and Britain must do more. We are

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sisters, hand in hand, posters of the sea and land, thus you go about,

:00:56.:01:04.

about thrice to nine, thrice to mine. The new vogue for joining in

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at the cinema and theatre. Why is so called "immersive entertainment" so

:01:12.:01:16.

of the moment. Is it just a fad. Whether it is cinema with music,

:01:17.:01:19.

art, theatre I think the audiences now are looking for a new way. I

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think this and a lot of similar organisations are showing this is

:01:27.:01:30.

not just a pop-up culture, this is the future.

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Steiner schools, they have been popular for decades among the more

:01:43.:01:52.

liberal and Bohemian, some white say whacky middle-classes, Sandra

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Bulloch and others former students. We have heard reports that in

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reports to the Department of Education that some have thought in

:02:03.:02:08.

these schools bullying was how kids worked out their Karma, and in one

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school there was racism linked directly to the school's philosophy.

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Since the Government has received these complaints it has agreed to

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fund three new schools. I think the Steiner philosophy is really

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interesting, for many reasons. Not least it centres on the child and

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the child's education hole listically, they focus on the human

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being, they nurture and they are affectionate and I think that is

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really important to build the human being before the academic. Sometimes

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called Waldorf schools or Steiner-Waldorf schools. There are

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30 schools. Since 20 # 08 three died ones another son the way. But

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Newsnight has exclusively seen two Department of Education memos which

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relate serious concerns about the concerns. Memos the British Humanist

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Association had to go to court to get released.

:03:20.:03:33.

Rudolf Steiner was an Austrian born occultist, but his ideas live on. It

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is a spiritual doctrine that covers everything from home on thee and

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biodynamic farming to the purpose of life. This grand work still fills

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bookshops and includes some rather particular ideas about race and

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reincarnation. Specifically that people with darker skin are less

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evolved, but, if they do well, if they have good Karma, they can hope

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to be reincarnated in later lives as a higher ranked race. Why Aryans, of

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course, are at the top, they advanced from colonists. Just how

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many of his less palatable ideas make their way into the classroom.

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Just how much Rudolf is there in the Steiner Schools. The idea that we

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have incarnated through the races is a very controversial idea that is

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not part of our modern thinking in Steiner Schools at all. In fact I

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would find it quite outrageous and unacceptable and it is not a basis

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upon which one would want to find any criticism of Steiner schools

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today because it is not what we believe. Some of those ideas have

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occasionly cropped up within the private Steiner schools very

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recently, and some parents are worried about speaking out. There

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was diversity training at the school and part of it was ticking boxes of

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which ethnicity you were, four of the teachers ticked all the boxes

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and the trainer asked why on earth they had done that, because they

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said they had been all those races and all those teachers were white

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and obviously they see themselves as the pinnacle. The Department for

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Education memos also reveal some important concerns about bullying,

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for example it said that in eight of the 25 private Steiner schools there

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had been serious complaints about staff bullying pupils. There were

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also concerns about policies on stamping out bullying, and worries

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that this might be related to Rudolf Steiner's teachings. The memo

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reports that one parent witnessed a physical attack on their son where

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the teacher failed to intervene. The teacher justified the approach by

:05:53.:05:55.

claiming the children were working out their Karma. That is concernly

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not the approach everywhere. There was an incident where my child was

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attacked in class, and it was terribly traumatic for everybody

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involved. The school, however, were incredible at dealing with it. The

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teacher in the classroom, the assistant were both very NUTTing at

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the in -- nurturing and caring, and my daughter has flourished and grown

:06:19.:06:22.

after the event. The school management pounced on the problem

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very quickly. Since the memos were written three state Steiner schools

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have been opened or approved to open. That is not uncontroversial

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given the nature of Steiner's work. The DFE said it wouldn't approve

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anything where racism or bullying were issues, tonight it said it can

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and would close schools, even private one where is they were. But

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that doesn't close the question of whether this Austrian mist

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particular's ideas are actually worth public money? Here to discuss

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Steiner schools are Francis Russell whose child was a pupil at Greenwich

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Steiner school, and the chief executive of the British Humanist

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Association. If I could start with you, the evidence seems to suggest

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that kids learn at these schools and they are pretty happy, why on earth

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are you making such a fuss about them? The reason we tried to get the

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document that is the DfE has finally released because we feared what they

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contained, eight out of 12 Steiner schools had serious cases of

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bullying of children by staff which is massively out of proportion than

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other schools, there was secrecy over teacher training materials

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within the Steiner teacher training scheme which is he they said they

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shouldn't let people see their lesson plans and make sure they were

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lost, that was because of the controversial nature of them. The

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qasi-religious and mystic systems of Steiner's work was linked directly

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to incidents of racism and bullying within those schools as well. That

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is why we are concerned. We are concerned if any sort of ideolgical

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belief system takes the place of real education in state schools.

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Francis, the evidence that in some schools bullying was not just

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tolerated but in some senses thought of as a good thing, as a way of

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identifying what kind of kid, or what kind of person these kids would

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grow up to be, doesn't that immensely worry you as somebody who

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was a parent of a kid at one of these kids? This is total rubbish

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what you are talking about now, I am a parent who had a child at the

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school, but I have been involved in setting up and running a particular

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school over the last six years, and been involved with it for ten and

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been involved in the movement. The allegations raised in the reports

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were never tested. These were some parents who had written to the

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Department for Education, and they were being raised in the reports as

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issues of how do we manage if parents come up and say these kinds

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of things with the media. There is absolutely no proof at all about

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these things. I'm sorry, can I just continue for a moment. What you are

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decribing does not happen in Steiner schools, that would never happen in

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our school, it would never happen in any of the schools that I know

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anything about. But why does the handbook talk about kids being, you

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know, either victims or bullies and needing to test which category they

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go into, why do the handbooks say these things? I'm not clear about

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this handbook at all. What I can tell you is what our policy says,

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and what policies in all the schools say, and remember they are all

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inspected and they all have to abide by the independent schools rules.

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What they say is that bullying is not tolerated. But within Steiner

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schools, as within many schools, we try to get children to learn to deal

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with conflict that is going on, but they are not left do that on their

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own. It is done with guidance of the adults, teachers and parents

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involved. I'm sorry but all this stuff about the pseudo spiritualism,

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that is all to do with Steiner's views on anthroposaphy, it is not

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caught in schools, it is for some adults to use as a way of guiding

:10:23.:10:26.

their lives if they choose to do so. It just does not form any part of a

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modern Steiner school. Nonetheless he is the driving force

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intellectually behind it. In his philosophy there is this stuff which

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I think most people would think of as racist and bonkers about the

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Aryans being the super-race. Of course it is. Don't you worry about

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being associated with a school founded on such ideas. Rudolf

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Steiner had a lot of good ideas about educational provision, which

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have been taken and developed and progressed, that is what forms a

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part of the education today. Is there any role for public money on

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schools based on this kind of philosophy? I obviously don't think

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so. I think because any state-funded school should be built on proper

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educational practice and theory and Steiner education and theory isn't.

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Your attempt to dereceive. Can I say something because you have spoken

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for a long time and made claims about the documents which is untrue

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and attempted to dismiss the documents as if they contained just

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allegations of individual parents, it will completely fail, they quote

:11:30.:11:34.

teacher training manuals which says many of the things that has just

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been said both in the report and now, about some children being

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destined by their Karma to be victims and some to be bullied. All

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of the things that have just been said. Should public money go to the

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schools? I had to pay and there are many parents who can't afford to pay

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who would like the education you get in Steiner schools which is really

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about educating the whole child in a very imaginative and artistic way,

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if you look at the school inspections reports they are telling

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parents how good these schools are and how good they are at producing

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young people with strong self-esteem, academically able and

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well prepared to go on and be good citizens in life. We will have to

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leave it there, thank you very much. I thought that was a jolly

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interesting discussion. It sounds a bit like a bad joke, doesn't it that

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investors should be piling into investments called "catastrophe

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bonds", six years after the mother of all financial catastrophes, it

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isn't a laughing matter. Pension funds and insurance companies are

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pouring our money into investment which is pay them a good rate of

:12:42.:12:45.

interest, unless, that is, there is a disaster such as a tsunami or an

:12:46.:12:48.

earthquake, in that case they get nothing. Are catastrophe bonds well

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a catastrophe waiting to happen. Be Six years ago the chopping up and

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selling on of risk brought the financial world close to disaster,

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then it was sub-prime mortgages and when the value of those home loans

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fell the whole system was exposed to the losses. Now there is a new

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risky, little understood investment. They are called, appropriately,

:13:29.:13:35.

catastrophe bonds. Catastrophe bondses are being bought by UK and

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US pension funds, I'm not sure they understand the real underlying

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risks. Catastrophe bondses are basically -- catastrophe bonds are a

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bet against natural disasters like hurricanes and earthquake, investors

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get paid interests every year, at the end of the term they get their

:13:56.:14:00.

money back. But, if there is a catastrophe, then the insurers get

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to keep all the money to cover their losses, and the investors lose

:14:04.:14:13.

everything. So far the returns for investors have been pretty good.

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Almost 8. 5% a year since 2002. And, they are also a hedge against market

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losses elsewhere. Catastrophe bonds are what is called an unco-related

:14:27.:14:31.

asset class, that means their return doesn't reflect what's happening in

:14:32.:14:37.

other financial markets. As long as the specified disaster doesn't

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happen the investor keeps getting paid. Investing is trade off between

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risk and return. What's the chance that you will lose money, and given

:14:49.:14:53.

that risk, does the rate of return justify taking it. For example would

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investors buy something that had a one in four chance of making a loss.

:14:58.:15:02.

Not if it paid 5% a year. But they might if it paid 50. When it comes

:15:03.:15:14.

to catastrophe bonds, Giovanni Garcia calculates the probability of

:15:15.:15:19.

the disaster. The probability is 2-2. 75% a year. The bonds are

:15:20.:15:26.

designed to trigger once every 55 years. Since 2007, direct investment

:15:27.:15:32.

by pension funds in catastrophe bonds has gone up by 15-times. But

:15:33.:15:38.

while the risk of disaster is constant, the rates of interest

:15:39.:15:42.

offered have fallen. As more investors pile in bond issuers are

:15:43.:15:47.

offer lower rates of interest, rates on bonds are at record lows. Are

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pension funds exposing themselves to massive risk for too low a return?

:15:53.:15:56.

This is a completely different sort of risk, it is a completely new risk

:15:57.:16:00.

for pension funds to be getting in to, again I'm just not sure that

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they have the experience or the expertise in a size myology, New

:16:06.:16:12.

canology, or futurology, whatever it might be, to allow them to make a

:16:13.:16:21.

proper informed decision. The reason why pension funds are dabbling into

:16:22.:16:26.

catastrophe insurance is down to a bigger shift in global finance.

:16:27.:16:33.

Central banks created a sea of money in an attempt to clean up the mess

:16:34.:16:39.

of the last crisis. But this has flooded into all asset classes, from

:16:40.:16:44.

bonds to shares to housing. That sea of money has been partly created by

:16:45.:16:48.

keeping interest rates near zero. Over the last six years interest

:16:49.:16:54.

rates have been at historic lows, so pension funds haven't been able to

:16:55.:16:58.

get the kind of return they need from traditionally safe investments

:16:59.:17:01.

like Government bonds. Instead they have been forced to buy riskier and

:17:02.:17:06.

riskier assets to try to drive up their returns. Since the crash this

:17:07.:17:13.

search for yield has been the defining characteristic of financial

:17:14.:17:18.

markets. Some people see it everywhere. I think in one sense

:17:19.:17:22.

there is lack of discretion in terms of what investors might be investing

:17:23.:17:26.

in currently, anything with a yield will do. Stephen King is HSBC's

:17:27.:17:32.

chief economist, he sees low interest rates fuelling a search for

:17:33.:17:37.

higher yields, across all financial markets and driving ever-greater

:17:38.:17:41.

risk taking. It does reflect the fact that investors are desperate to

:17:42.:17:46.

get higher returns, they find is very difficult to get the higher

:17:47.:17:49.

returns when the economies are so incredibly weak, as a consequence

:17:50.:17:53.

they are pushed into areas that are riskier or more esoteric. The risks

:17:54.:18:02.

are real. The valuation of many cat-bonds is based on the minimal

:18:03.:18:07.

risk of disaster, a major disaster could trigger a large loss in some

:18:08.:18:10.

bonds that could bring down the price of all of them. The worry is

:18:11.:18:16.

so much money has flooded into catastrophe bonds that they have

:18:17.:18:19.

become overvalued, you can see the same alarm signals across all sorts

:18:20.:18:23.

of different financial instrument, a lot of confidence in any of these

:18:24.:18:26.

could trigger a sell-off across wider markets. Low interest rates

:18:27.:18:36.

have been used by central banks to try to restore the economy to

:18:37.:18:40.

health. But they have been so low now for so long that investors are

:18:41.:18:45.

taking risk they otherwise wouldn't take. Catastrophe bonds might prove

:18:46.:18:54.

a risk too far, the next little understood investment that could

:18:55.:18:59.

spiral into disaster. Here with me to assess whether the cure for the

:19:00.:19:04.

banking crisis all that cheap money that the Bank of England and other

:19:05.:19:07.

central banks created is enbeginedering in fact a new

:19:08.:19:13.

financial disaster is the economist George Magnus. Everywhere you look

:19:14.:19:16.

at the moment you see bonkers prices, if you look at the market in

:19:17.:19:20.

Italian and Spanish Government bonds, two pretty risky Governments

:19:21.:19:26.

they are more expensive than an American Government bonds, which

:19:27.:19:29.

most people would say is rather crazy. Why haven't investors learned

:19:30.:19:34.

their lessons? Why do they appear to be taking such ridiculous crazy

:19:35.:19:41.

risks again? Well, the cynical answer is that they are just myopic

:19:42.:19:49.

and prone to crowds and sheep, all marching off in the same direction

:19:50.:19:55.

together. The slightly more serious answer but one that begs a lot of

:19:56.:20:00.

questions, is investors and financial markets are just totally

:20:01.:20:06.

geared to the idea that money is cheap and they have been told by

:20:07.:20:12.

Mark Carney, January until Yellin, the heads of the central banks

:20:13.:20:15.

around the world. They have been told in no uncertain terms that

:20:16.:20:20.

interest rates will stay close to zero for an extended period of time.

:20:21.:20:25.

So they have no risk to worry about that interest rates will go on they

:20:26.:20:29.

can carry on crowding into risky investments, extracting higher

:20:30.:20:32.

interest rates, or as the course pond dent said the search for --

:20:33.:20:37.

correspondent said the search for yield without impunity, despite the

:20:38.:20:43.

fact that the risks haven't changed and may change soon. The thing is

:20:44.:20:49.

what goes up will come down, how worried are you that the bubbles in

:20:50.:20:53.

property and Government bonds as and when they burst there will be a bit

:20:54.:20:56.

of a mess, not just for investors but for all of us? That is bet I

:20:57.:21:01.

would take. Because partly because we can see that the debate is

:21:02.:21:05.

beginning to change. In this country, in the UK, we know that the

:21:06.:21:10.

Bank of England is now on the cusp of, not on the cusp but it is

:21:11.:21:14.

certainly debating very actively whether it should raise interest

:21:15.:21:17.

rates later this year and almost certainly will do. And in the United

:21:18.:21:22.

States the process of withdrawing from the quantitative easing

:21:23.:21:27.

programme, called tapering, will end October. The markets are, some

:21:28.:21:32.

markets are actually quite wedded to the idea that interest rates in the

:21:33.:21:35.

US will rise some time towards the summer or the autumn of 2015. But it

:21:36.:21:40.

could happen earlier, because the economy actually is coming back

:21:41.:21:44.

quite nicely. As and when interest rates rise, is that when we will see

:21:45.:21:50.

the first real test of whether the markets are safe or, essentially is

:21:51.:21:56.

that when we might see the first cracks that could be rather

:21:57.:22:00.

damaging? Yes, today there was a minor crack, Wall Street at one

:22:01.:22:05.

stage was down 300 points, and could have been lots of reasons for this,

:22:06.:22:09.

but one of the reasons could have been that employment costs, wages

:22:10.:22:13.

and salaries rose by their fastest rate in the second quarter since the

:22:14.:22:17.

great financial crisis. Which obviously gets people worried about

:22:18.:22:21.

the fact that interest rates may go up sooner. It will happen and even

:22:22.:22:24.

though interest rates in five years time may not be substantially higher

:22:25.:22:28.

than they are today, certainly not as high as they were ten or 20 years

:22:29.:22:33.

ago, the shock of moving out of one regime into another one which is

:22:34.:22:39.

uncertain I think will exact a big toll, I think. Our Government,

:22:40.:22:44.

Central Bank governor, Mark Carney, Governments in America and Europe

:22:45.:22:47.

will say that they have put in place new regulations to protect us from

:22:48.:22:51.

the kind of shocks to the financial system we saw in 2008. Have they

:22:52.:22:57.

done that in fact? As and when these markets cracked will there be a

:22:58.:23:02.

significantly damaging impact on our proport? Yes, I think so. To a

:23:03.:23:13.

degree, I think they talk a lot about macro Prudential regulation,

:23:14.:23:17.

which is about trying to make financial institutions safer, you

:23:18.:23:20.

can do that with a big bank ore insurance company. But you -- bank

:23:21.:23:25.

or insurance company, but you can't really protect the system from an

:23:26.:23:28.

environment. What has happened is the price of lending and capital has

:23:29.:23:32.

fallen to level which is are inappropriately low. We have to get

:23:33.:23:37.

back to normal and it will be a difficult transition. In a moment we

:23:38.:23:40.

will be looking at recommendations for NATO reform from the Commons

:23:41.:23:44.

defence committee. But while we have been on air the American Secretary

:23:45.:23:50.

of State, John Kerry, and the United Nations secretary-general, Ban

:23:51.:23:55.

Ki-Moon, have announced a 72-hour humanitarian ceasefire in Gaza

:23:56.:23:59.

through du to begin at 8.00 on Friday morning. Our diplomatic

:24:00.:24:09.

editor has the latest news. That is the news, the ceasefire has

:24:10.:24:13.

been agreed, the Secretary of State said that Israel and Hamas have

:24:14.:24:18.

agreed to it. We have had some shaky or non-existent attempts at

:24:19.:24:22.

ceasefires before, this is meant to last 72-hours, it may well

:24:23.:24:26.

illustrate an Israeli sense that America is losing patience. And the

:24:27.:24:29.

opinion of the world is moving against them. Do you think this is a

:24:30.:24:34.

ceasefire that will hold, because we have had false dawns before now? I

:24:35.:24:37.

wouldn't make a judgment one way or the other. It could be the beginning

:24:38.:24:41.

of the end as it were, but it may be a temporary ceasefire. On this other

:24:42.:24:48.

issue that we have been looking at today which is the capability of

:24:49.:24:56.

NATO, MPs have raised concerns that NATO is not in a position to defend

:24:57.:25:03.

itself, were there to be a renewed threat from Russia, what has their

:25:04.:25:07.

argument been? We have a situation now where there are fresh Russian

:25:08.:25:11.

build-ups with the borders of Ukraine, we have seen pictures over

:25:12.:25:17.

the plast few days. NATO talk about 15,000 Russian troops amassing

:25:18.:25:20.

there. The west could get caught again in this respect. The MPs have

:25:21.:25:23.

looked at what already has happened there, and also asked questions

:25:24.:25:26.

about well what if suddenly one of the battic Republics or Poland feels

:25:27.:25:30.

very threatened by one of these Russian moves. What could we

:25:31.:25:34.

actually do? They think the answer is not much and not much quickly. So

:25:35.:25:38.

they have got a series of recommendation which is they

:25:39.:25:41.

published today, the defence committee staking a claim, if you

:25:42.:25:44.

like, to get the Government moving on this, and calling for dramatic

:25:45.:25:49.

improvements to rapid reaction, moving stuff to threatened areas,

:25:50.:25:52.

pre-positioning to help that happen faster, putting kit down in some of

:25:53.:25:55.

the eastern European countries ready to go, and the continuous presence

:25:56.:26:01.

of NATO forces there. I think historically the military and

:26:02.:26:04.

Government haven't always been as one on this kind of thing. What is

:26:05.:26:09.

your sense, is there unity on what to do? I have discovered there has

:26:10.:26:13.

been quite a battle going on behind the scenes and actually in the run

:26:14.:26:17.

up to the paper from the Defence Select Committee today, the British

:26:18.:26:21.

general who stepped down in the spring from his job in the NATO

:26:22.:26:26.

military structure, he made some outspoken remarks in a newspaper,

:26:27.:26:29.

which caused Alex Hammond to basically -- Philip Hammond to try

:26:30.:26:33.

to get the man disciplined and stop him speaking again on the subject.

:26:34.:26:36.

He was furious about it, it endangered in his mind his sort of

:26:37.:26:40.

discipline he thought he had got the department under. The defence

:26:41.:26:42.

committee asked the general to come in and tell them what sort of risk

:26:43.:26:48.

he is thought there were to the Baltic Republics for example. The

:26:49.:26:52.

fact is that there is a Russian aviation base within 40 minutes

:26:53.:26:58.

flying time of Riga. So unless NATO has stationed forces in the Baltic

:26:59.:27:04.

states I think it is highly unlikely that NATO could respond quickly to a

:27:05.:27:10.

sudden surprise attack. Now, of course the MPs at the time wanted to

:27:11.:27:13.

know what did the Defence Secretary make of this. He in fact pretty much

:27:14.:27:19.

rubbished the general. He said this morning, sitting in that chair, that

:27:20.:27:22.

he thought we ought to have a significant NATO and UK presence in

:27:23.:27:26.

the Baltic states. Now that is not in the SDSR and the SDSS. It is not

:27:27.:27:31.

the Government's view, and it is not NATO's view, and he is a retiring

:27:32.:27:38.

general on resettlement leave. He can speak for himself but he doesn't

:27:39.:27:43.

speak for the department. What has happened today is effectively the

:27:44.:27:47.

MPs have bought almost everything the general said. They have been

:27:48.:27:50.

wrapped into the recommendations of what should happen. This, if you

:27:51.:27:54.

like, pre-figures a bigger battle that will happen about the defence

:27:55.:27:58.

budget, about the posture of the Armed Forces over the next year as

:27:59.:28:01.

they move into the next defence review and do the Government

:28:02.:28:05.

statements about the seriousness of what has been happening in Eastern

:28:06.:28:08.

Europe actually mean they have got to change course, spend more on

:28:09.:28:13.

defence and reposition the forces? Thank you. Now one of the MPs' main

:28:14.:28:17.

recommendation was the establishment of a continuous NATO presence in

:28:18.:28:23.

vulnerable states including Estonia. That country's Defence Minister

:28:24.:28:33.

joins us now. Can I just ask you, how vulnerable do you feel, do you

:28:34.:28:40.

regard a threat from Russia as a serious really serious thing to your

:28:41.:28:45.

security? Well there is definitely no panic in Estonia in the streets

:28:46.:28:52.

or among the policy makers. We have invested significantly in our

:28:53.:28:54.

defence and security over the years. We have very strong relationships

:28:55.:29:00.

with the strongest and biggest allies, both in Europe and on the

:29:01.:29:05.

other side of the Atlantic. However, we have seen a very significant

:29:06.:29:10.

build up of Russian military forces in our region. So basically I would

:29:11.:29:15.

agree with most of the recommendations that were made by

:29:16.:29:20.

the MPs from the House of Commons, indeed actually those reflections,

:29:21.:29:25.

those recommendations reflect very much what I told the delegation when

:29:26.:29:32.

they visited Tallin. I definitely believe we need pre-positioned

:29:33.:29:37.

forces and assets in our part of the world. We need better, clearer

:29:38.:29:41.

defence plans, we need to improve our situational awareness and our

:29:42.:29:45.

early, our rapid reaction capability. So basically I agree

:29:46.:29:49.

with the majority of those recommendations definitely. Just to

:29:50.:29:57.

be clear, how serious do you think NATO's deficiencies are? NATO

:29:58.:30:03.

collectively I believe is still very much the, by far the strongest

:30:04.:30:08.

player when it comes to conventional military forces. However, I do

:30:09.:30:15.

believe that the current regime in the Kremlin, Putin's regime thinks

:30:16.:30:21.

they have certain advantages, they have parity with NATO and

:30:22.:30:26.

superiority in convention terms when it comes to certain regions, they

:30:27.:30:29.

believe probably with some justification that they have a time

:30:30.:30:37.

advantage. They have been doing snap exercises while Putin can take most

:30:38.:30:41.

of the strategic decisions on his own, so basically in order to cope

:30:42.:30:45.

with this situation we need to improve our ability to take

:30:46.:30:50.

decisions quickly, but also to implement those decisions quickly.

:30:51.:30:55.

So this definitely requires pre-positioning of assets, this

:30:56.:31:03.

requires also more regular exercises with more realistic defence

:31:04.:31:07.

scenarios. You would be happy to have foreign troops on your soil,

:31:08.:31:11.

that is not a problem for you? Well, basically, yes, foreign troops, but

:31:12.:31:18.

also pre-positioning of equipment, of the kind that is required to

:31:19.:31:24.

respond quickly to any scenario that we can foresee realistically

:31:25.:31:29.

unfolding. I would say that we have very strong confidence in NATO

:31:30.:31:34.

Article 5 and the allied solidarity. However, we would like to do

:31:35.:31:38.

everything it takes to avoid a situation that would trigger Article

:31:39.:31:42.

#R5, and deterrence is the best way to do that. I do believe that

:31:43.:31:48.

strength is language that Putin's regime understands. I think some

:31:49.:31:52.

would say it also occasionally inflames him. Thank you very much.

:31:53.:31:59.

As MPs flee Westminster for their summer holiday one man will be left

:32:00.:32:04.

behind pouring over polls and that infamous news grid, he's Linton

:32:05.:32:10.

Crosby and the adviser paid to propel David Cameron back into

:32:11.:32:14.

Number Ten in 2015. Like Labour's Peter Mandelson and Alastair

:32:15.:32:20.

Campbell, he's seen as the Tory Party's controller of who is up and

:32:21.:32:24.

down in the cabinet. Has he become too powerful? We have been finding

:32:25.:32:31.

out. You always play to win, you don't play to come second. The smirk

:32:32.:32:38.

is attitude, it is a person who says he can get away with this.

:32:39.:32:43.

I'm no genius, just an ordinary person who wanted to help the

:32:44.:32:47.

Conservative Party. If, for some reason, you would like

:32:48.:32:51.

to see the most powerful people in the Tory Party on a Monday morning

:32:52.:32:55.

at 8.00am come down to this street corner and you will see loads of

:32:56.:32:59.

them streaming out of this building, the campaign headquarters and up to

:33:00.:33:02.

Whitehall and Downing Street and the Prime Minister's layer, where they

:33:03.:33:05.

will have a planning meeting for the week, but actually nine months out

:33:06.:33:09.

from a general election they are on war footing. One of their number is

:33:10.:33:13.

head of their general election campaign, Linton Crosby, to many

:33:14.:33:16.

people he's the most powerful person in the Tory Party.

:33:17.:33:24.

Tory communication chief, Craig Oliver got into trouble for getting

:33:25.:33:28.

Crosby into Downing Street. But since arriving he has been kept

:33:29.:33:31.

close. Whenever David Cameron is in trouble he brings Crosby to assure

:33:32.:33:40.

restless MPs, they know's a winner. Thrusting immigration into the

:33:41.:33:45.

campaign glare has been attributed to Australian election strategist,

:33:46.:33:50.

Linton Crosby. He notched up a woulding four victories for John

:33:51.:33:54.

Howard, and the boss was grateful. Briefly but sincerely I can't let

:33:55.:33:59.

the opportunity of Linton's report go by without recording mime mens

:34:00.:34:03.

personal gratitude to you Linton. But it also got pretty nasty. The

:34:04.:34:09.

Indonesian ferry carrying the asylum seekers was intercepted by the

:34:10.:34:13.

Australian Navy at the end the Prime Minister John Howard said those on

:34:14.:34:17.

board threw children into the sea to force the Navy to pick them up. Yes

:34:18.:34:22.

he did run campaigns for John Howard that were largely, or significantly

:34:23.:34:27.

fear-based, they were trying to worry people about the fact that

:34:28.:34:34.

there was this asylum seeking and illegal immigration going on, and

:34:35.:34:37.

John Howard would determine who comes to the country and under what

:34:38.:34:41.

circumstances. There is a lot of unfair stuff thrown at Linton about

:34:42.:34:45.

the dog whistling and the racism. You will read here that this is part

:34:46.:34:51.

of Crosbyism, well it wasn't, it was John Howard, the Prime Minister at

:34:52.:34:56.

the time, and his Defence Minister, Peter Reith, who actually said those

:34:57.:35:01.

things. In 2005 he came to work in the UK for another Howard, Michael

:35:02.:35:04.

Howard, and he went hard on immigration again. The theory is

:35:05.:35:09.

that you some how put out these messages, that people can't

:35:10.:35:13.

generally hear, but the people who need to hear them pick them up and

:35:14.:35:17.

pond and vote your way. They are not issues you talk about in the broad.

:35:18.:35:21.

But, hey, everyone knew that Michael Howard and the Conservatives were

:35:22.:35:24.

focussing on immigration and crime and all of these things, no-one

:35:25.:35:27.

could say they were trying to secretly, below the line, through

:35:28.:35:31.

phone calls or direct mail letters, address an issue that they were

:35:32.:35:34.

trying to hide from the rest of the voters. The Tory vote share went up

:35:35.:35:40.

in that election, but they still lost. Polling would later show that

:35:41.:35:44.

the country wanted a crackdown on immigration, just not from the

:35:45.:35:51.

Conservatives. Unlucky in 05, things picked up on getting Boris Johnson

:35:52.:35:58.

elected in 2008 and 2012. Boris is a very loyal member of the team and

:35:59.:36:01.

good to have. Immigration took a back seat, instead they promised to

:36:02.:36:05.

cut commuting costs and crime for the outer suburbs, Linton Crosby

:36:06.:36:11.

doesn't appear to run cookie cutter candidate, which brings us to 2015

:36:12.:36:16.

and how he will run David Cameron. Linton Crosby is fond of the saying

:36:17.:36:20.

of this man, General Slim, whose statue is not far from Downing

:36:21.:36:23.

Street. Slim said in battle things are rarely as good or as bad as the

:36:24.:36:28.

first reports of excited men would have them. I can tell you firsthand

:36:29.:36:33.

that Linton Crosby detests the breathless ups and downs of

:36:34.:36:37.

Westminster gossip, instead he gets his politicians to focus on three or

:36:38.:36:42.

four core messages and rams them home over months and months and

:36:43.:36:45.

preferably years and years. Sources of mine who have dared to deviate

:36:46.:36:48.

from those messages know about it. They get rung up for the Linton

:36:49.:36:53.

Crosby hair dryer treatment. It doesn't found like a hugely big

:36:54.:36:59.

insight, you would be amazed how many British politicians find it

:37:00.:37:04.

difficult to stick to the script. Scrape barnacles off the boat said

:37:05.:37:10.

Linton Crosby. The energetic Health Secretary, Jeremy Hunt is always

:37:11.:37:14.

trying to announce new ideas on health but stopped by the iron grip

:37:15.:37:20.

of Crosby. But the biggest barnacle of all, Michael Gove, the Prime

:37:21.:37:23.

Minister was shown polling that he was so unpopular it could be an

:37:24.:37:28.

electrical barnacle, he moved Gove and the Prime Minister remonstrate,

:37:29.:37:35.

and the Chancellor remonstrated but lost. Everyone would love to come to

:37:36.:37:41.

a party and say they have a silver bullet for all the problems. They

:37:42.:37:46.

don't, they have the techniques and mechanisms for consolidating the

:37:47.:37:49.

vote and growing the pool. That is what you try to do, grow the pool of

:37:50.:37:53.

voters who potentially might listen to you. That is obviously the advice

:37:54.:37:57.

that Linton is giving to the Tories. Try to grow the pool on right by

:37:58.:38:02.

finding policies to appeal to the defectors, to UKIP, find some

:38:03.:38:06.

policies which appeal to women voters. It is 2. 30 and we have seen

:38:07.:38:13.

a steady stream of Tories into the building although it is the

:38:14.:38:16.

holidays. He's running a tight ship. Every day he's in from six through

:38:17.:38:21.

until late at night. Instead of his own office tucked away on the side,

:38:22.:38:28.

he sits in the thick of things alongside juniors and interns alike,

:38:29.:38:32.

that is why he's liked he has few airs and graces. It is from this

:38:33.:38:36.

building he's controlling the Tory message, if at the last election

:38:37.:38:39.

there was four different characters with four different takes on how the

:38:40.:38:42.

Tories were fighting the election, this time round it will be just one.

:38:43.:38:47.

In the words of one of my source, Linton Crosby's word is the law.

:38:48.:38:50.

Economic competence, immigration, welfare reform, Crosby's messages

:38:51.:38:55.

next year, but too heavy on immigration and ethnic minority

:38:56.:38:58.

voters will be frightened off the Tories. Too harsh on welfare won't

:38:59.:39:02.

help them with the north of Britain. Right now the PM is on holiday,

:39:03.:39:07.

Linton Crosby is not taking a break, for a few weeks at least he's really

:39:08.:39:12.

in charge. Here to discuss Crosby's influence are the former London

:39:13.:39:18.

mayor, Ken Livingston and Conservative activist and Times

:39:19.:39:23.

columnist, Tim Montgomerie. Allegra says the Chancellor was overruled by

:39:24.:39:29.

Linton Crosby and as a result of polling Michael Gove was demoted.

:39:30.:39:33.

That's no way to run a Government is it? I think it is probably true. But

:39:34.:39:40.

the reason why David Cameron is listening to Linton Crosby is partly

:39:41.:39:44.

you have the reason there in Ken Livingston. The stories couldn't

:39:45.:39:50.

defeat Tony Blair, Ken Livingston did, he won huge majorities in

:39:51.:39:54.

London, but it was Linton Crosby's strategy with a little help from man

:39:55.:39:57.

called Boris Johnson that unseated Ken. In Australia Linton Crosby

:39:58.:40:03.

helped John Howard to four victories. It is that campaigning

:40:04.:40:07.

nouse, and the ability to run a campaign, understand it properly,

:40:08.:40:10.

understand opinion polls and the public. That is why the

:40:11.:40:14.

Conservatives are willing to hire and listen to him. There is a

:40:15.:40:18.

paradox, all the evidence shows one of the reasons politicians are so

:40:19.:40:22.

unpopular is people think they don't show leadership that it is all about

:40:23.:40:25.

spin and polling. Isn't it just part of the whole eating away at

:40:26.:40:29.

confidence in politicians that are actually powerless and they are run

:40:30.:40:34.

essentially by the ad men? We say we like conviction politicians but when

:40:35.:40:38.

they do things we don't like them to do we don't necessarily respect

:40:39.:40:43.

them. Opinion polls are our way of voting between election, telling

:40:44.:40:49.

politicians what we think about what is going on. Sometimes it is wise to

:40:50.:40:53.

listen to them, and sometimes it is right for Ken Livingston to ignore

:40:54.:40:57.

views about the Congestion Charge and plough ahead. But it matters

:40:58.:41:00.

during elections and Linton Crosby is a good interpreter of them. You

:41:01.:41:04.

don't like Linton Crosby, you think of him as an evil person, isn't that

:41:05.:41:08.

just because he got you defeated? He was incredibly successful? He's

:41:09.:41:13.

probably the most successful progandists since Dr Joseph Gobeles,

:41:14.:41:19.

it is a joke I'm not suggesting for one minute they are in the same

:41:20.:41:22.

league. They have one thing in common, it is about fear, that is

:41:23.:41:26.

what is so demeaning about the politics. When I came into politics

:41:27.:41:30.

it was debating about issues, now it is smear and fear. What we should

:41:31.:41:35.

have in the next nine months is an endless debate about how to turn the

:41:36.:41:38.

economy round and where it will go in the future. Crosby will do

:41:39.:41:43.

everything to stop that, it will be immigration, benefits cheats, trade

:41:44.:41:48.

unions. It is not true, if you look at the long-term economic plan every

:41:49.:41:52.

Tory spokesman has to use day in and day out, that is Linton Crosby's

:41:53.:41:55.

argument, he's arguing for them to focus on the economic issues not

:41:56.:42:00.

just welfare. He's not honest about that. We have had 30 years of

:42:01.:42:04.

neo-liberal economics under Thatcher and continued by Tony Blair, it

:42:05.:42:07.

hasn't worked. We are worse off than we were. Surely the issue here is a

:42:08.:42:13.

different one. We recently had the leader of the Labour Party, Ed

:42:14.:42:16.

Miliband, saying he will back away from image building and spin, let's

:42:17.:42:26.

be clear they just hired David Axelrod from America, the game is up

:42:27.:42:30.

and Government is run by spin and pollsters. That was one of the

:42:31.:42:34.

weaknesses of new Labour, they forgot about the core issues and

:42:35.:42:37.

pandered to it. Have you confidence that Ed Miliband will be different?

:42:38.:42:40.

Absolutely, whenever I'm with Ed Miliband he's talking about issues,

:42:41.:42:44.

what do we learn from the success of the German economy. He's never

:42:45.:42:47.

obsessed by this sort of spin nonsense. You look at the key

:42:48.:42:53.

people, they are people who mobilise and organise activists. What about

:42:54.:42:59.

David Axelrod an American campaigner at a lot of money paid for by Labour

:43:00.:43:03.

activists, the idea th Ed Miliband is very different? The key thing

:43:04.:43:07.

about Clinton is he built a machine. That is what I tried do I couldn't

:43:08.:43:12.

defeat Boris, but we built a machine that mobilise add lot of people

:43:13.:43:17.

across London, got them out, not enough to win N situation where Ed

:43:18.:43:21.

Miliband faces what I faced, a completely hostile media, that is

:43:22.:43:24.

the core. Build the machine, reach people on the doorstep. I think this

:43:25.:43:29.

debate will run all the way to next May and it would be jolly

:43:30.:43:32.

interesting to see what it does to the overall turnout, I'm not sure

:43:33.:43:39.

everyone is enthused? Let's remember the real smear tonight was yours

:43:40.:43:48.

with Joseph Gobeles. Not Linton Crosby.

:43:49.:43:53.

Cinema fans were venting their fury, but after a few nights of a new

:43:54.:44:00.

fangled screening of Back to the Future were cancelled at the last

:44:01.:44:05.

night, tonight 4 thousand young people made it to -- 4,000 young

:44:06.:44:09.

people made it to a secret location dressed as characters of the film,

:44:10.:44:15.

it is what is known as "immersive entertainment", we have jumped on

:44:16.:44:29.

the hover board for a look. It is so exciting, take one of your

:44:30.:44:33.

favourite movies of all time and feel like you are part of it. The

:44:34.:44:40.

secret is now out, somewhere in East London, after delays and

:44:41.:44:44.

cancellations the first night of a summer-long project. Every time from

:44:45.:44:49.

now on when I watch the film it will be I was there. This is the biggest

:44:50.:44:54.

event of its type ever held. A full on replica of Hill Valley, as any 80

:44:55.:45:02.

nostalgia will tell you, scene of Back to the Future. Each of the

:45:03.:45:06.

shops and buildings is say theed to be true to the film itself, from the

:45:07.:45:10.

estate agents to the bank on the corner. There will be live

:45:11.:45:14.

performances from actors and live music once the night is finished. A

:45:15.:45:20.

long way from the Multiplex or the cinema on the high street. The film

:45:21.:45:24.

is shown in full, but the plan is more ambitious than outdoor cinema,

:45:25.:45:29.

with some dressing-up. There is a generation of audience that is are

:45:30.:45:33.

not satisfied with the massive experience any more I think they

:45:34.:45:36.

want to be part of it. That is what I am I'm interested in, that the

:45:37.:45:45.

audience and performance is blurred, that wherever you are you can become

:45:46.:45:48.

part of the story. Secret cinema has come a long way from its underground

:45:49.:45:54.

roots, screening cult clackss to small audiences. Like a video game

:45:55.:45:58.

there are areas to explore and hidden secrets to find. All too much

:45:59.:46:02.

effort say some. The problem I guess with the immersive experience is

:46:03.:46:05.

because there is so much of it and because you are so aware that there

:46:06.:46:11.

is so much going on it can become a box-ticking exercise where you feel

:46:12.:46:15.

you have to complete the thing rather than letting it wash over you

:46:16.:46:19.

as a purer experience. But immersive entertainment is a broad term,

:46:20.:46:27.

taking in everything from Michael Sheen's performance of the passion.

:46:28.:46:31.

To this tower block in Popular where a new version of Macbeth is played

:46:32.:46:36.

in different rooms in the building. The performance stops at 7.00, and

:46:37.:46:41.

the audience is split into smaller groups of ten, and brought into this

:46:42.:46:46.

doorway part of the underground car park, part of the network of housing

:46:47.:46:51.

estates in East London. The weird sisters, hand in hand, posters of

:46:52.:46:58.

the sea and land, thus do go about. We have just been astound today the

:46:59.:47:02.

reception we have got and the amount of audience members, and selling out

:47:03.:47:06.

four months before the performance is incredible. Our audiences

:47:07.:47:10.

yearning for something different and outside of the living room. With so

:47:11.:47:13.

much choice nowadays in terms of media, this type of performance

:47:14.:47:16.

gives people the real experience which they are looking for,

:47:17.:47:19.

interaction with audience and actors and being able to see a story from

:47:20.:47:25.

the inside out. Whether film or theatre, events like this are doing

:47:26.:47:30.

well at the moment, Back to the Future has sold 65,000 tickets at

:47:31.:47:35.

more than ?50 each. Secret cinema is making real money. Charging over ?50

:47:36.:47:40.

a ticket. You think about it, a cinema you are looking about ?10.

:47:41.:47:45.

London prices. So they are making huge amounts of money for the Grand

:47:46.:47:52.

Budapest Hotel a production they put on recently, that contributed over

:47:53.:47:55.

one million pounds to the UK box-office for that film. We are

:47:56.:48:00.

looking to be obviously a profitable business. But we're not, for me the

:48:01.:48:06.

passion of it is making it the best it could be. This then is no longer

:48:07.:48:11.

a niche experiment, it is well and truly mainstream. The challenge for

:48:12.:48:15.

secret cinema and others like it will be to keep growing without

:48:16.:48:18.

losing the sense of mystery, the things that made it popular in the

:48:19.:48:25.

first place. I have massively enjoyed keeping the seat warm for

:48:26.:48:29.

the past three days, sadly that is all I and we have time for. Good

:48:30.:48:46.

night. There is rain in the forecast, some a lot some very

:48:47.:48:50.

little. The main focus of rain

:48:51.:48:51.

In-depth investigation and analysis of the stories behind the day's headlines with Robert Peston. Looking at a row over Steiner schools, catastrophe bonds, whether Nato is prepared for Russia, a Lynton Crosby profile, and questioning if immersive theatre is a fad.


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