| Why was the BBC discussing its coverage of spending cuts with No 10? | Aditya Chakrabortty The BBC is helping convince viewers that spending cuts are inevitable. It's a large-scale version of peer pressureLast Thursday was a great day for conspiracy theorists. The story goes like this: the head of the BBC, Mark Thompson, went into Downing Street to meet one of David Cameron's top lieutenants, Steve Hilton.Walking in, he was snapped with a briefing note from the BBC's head of news, which suggested lines defending the Corporation's coverage of the government's spending cuts.For members of the grassy-knoll brigade, this little sequence of events had it all: an unpublicised meeting between two of the men who run Britain, a snatched photo of an internal email, and the suggestion that BBC staffers would now have to tone down their Spending Review season that begins this week. Cue arched eyebrows and indignant tweets all round.And it's true that the episode raises some questions. Why on earth was a BBC manager discussing its coverage of spending cuts with Number 10?How much pressure has the BBC been put under already by the Conservative-led coalition? And why doesn't Mark Thompson get himself a nice satchel to keep his private notes private?After that point, though, I part company from the X-Files gang. For one thing, conspiracies surely come better than this. More importantly, Cameron surely couldn't ask for a bigger favour from the BBC than the one it's already doing him – by running a six-week long series of programmes softening up the public for his government's spending cuts.On 20 October, George Osborne will stand up in parliament and lay out the most savage spending cuts in more than 60 years. The typical government department will have a third of its budget lopped off. Some will be cut by as much as 40%. Whole areas of public service will either be axed or handed over to big private firms to run at a profit. The austerity will be on a scale similar to that which the Greeks have had imposed on them; except here it has been enthusiastically adopted by the government. And when the cuts are finally made, they are likely to arouse more domestic discontent than Tony Blair's decision to go to war with Iraq. There is nothing consensual, let alone inevitable about these actions – they amount to an extreme political choice and a massive gamble to boot.So what is the BBC doing? Why, running a series on TV, radio and the web between now and the big day called The Spending Review: Making it Clear. This strand was dreamed up by Thompson's deputy, Mark Byford, and in a blog published this weekend he promises: "We'll look at where and at what level the cuts may be made and why they are happening now, ask what the key issues are, how the government is dealing with them and what the implications of the cuts could be." In other words: through special debates, big-number editions of Newsnight and the Today programme, we'll treat these cuts as a fact of life, and show you how much this will hurt.Which is not to say that the entire strand will be credulous. The BBC has too many good journalists to allow that to happen, and in any case its management will be far too anxious not to cover the subject from all angles. There will be due consideration given to the wisdom of cutting so deep and so fast; there will probably also be case studies of other countries that managed their debt crises rather differently.But, these will inevitably be presented as caveats to the main argument, which is that the spending cuts are coming. And by doing that, the BBC will help convince watchers and voters that they are inevitable. Psychologists refer to this phenomenon as social proof – where people are won round to a point of view not so much by stats and facts as by the fact that lots of others are doing or talking about a particular thing.It's a large-scale version of peer pressure and there's decades of evidence that shows it works. Nor is the evidence just in the academic journals: when the advertising folk proclaimed that "eight out of 10 owners" said their cats preferred one particular catfood, they were using social proof.The same trick is used in politics too. When, in 2008, Gordon Brown pointed to how the rest of the G20 group of leading economies were copying his economic rescue plans, he was using a classic social-proof argument: all these world leaders are following my policy, so it can't be wrong.But you don't always need lots of people in your corner to persuade others; sometimes, one institution will do. The BBC is so important a part of public life in Britain that in this instance it can very well act as the social proof. That is certainly the risk it is running here.As you might have guessed, I am not in favour of the sort of public-spending cuts that Osborne is proposing. But I am not arguing that the BBC should broadcast my particular politics, any more than I expect Radio 1 to play The Fall all day and night. No, it simply shouldn't be taking sides at all. When the results of the spending review are announced on 20 October, that would be the ideal time to begin a six-week long series covering the fallout. The question is, will we get one?PsychologyEconomic policyBBCGeorge OsborneLiberal-Conservative coalitionRecessionAditya Chakraborttyguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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Chinese moves to limit mineral supplies sparks struggle over rare earths • China produces 97% of the world's supply of rare earths• China says exports quota is cut by 72% to ensure sustainabilityThe price of crucial minerals used in everything from smart phones to wind turbines and radar systems – and the shares of companies seeking to produce them – are soaring after Beijing slashed global supplies.China produces as much as 97% of the world's supply of so-called rare earth elements, but has drastically cut back exports, to the concern of foreign businesses and governments.The move has seen prices rise as much as nine-fold in a few months and given new impetus to mining firms across the world that have long been seeking to develop deposits. But analysts warn that stocks in such firms are reaching unrealistic highs in an investment surge which some compare to the dotcom bubble.Despite their collective name, the 17 elements are not rare. According to the US geological survey, China has only about a third of the deposits and for many years a US mine run by Molycorp was the main global supplier.But the minerals are expensive to extract and process and China's expansion into the market saw prices plummet. Analysts say its labour costs are kept low and looser environmental laws, and the fact that the main deposit at Baotou in Inner Mongolia is also an iron ore mine, that keeps overall processing costs down.Now Molycorp is looking to reopen its Mountain Pass mine in California, which closed in 2002, and a host of other firms are attempting to develop deposits.Although China began tightening export quotas some time ago, the industry was shocked when it slashed the export quota for the second half of 2010 by 72% year-on-year. Beijing said it wanted to ensure sustainability and curb environmental damage.The government has also consolidated the industry, closing smaller mines and seeking to create stronger, more efficient enterprises.But the overseas facilities now under development are well over a year away from production, at best."It's all down the road – and everyone is worried about today and tomorrow," said Suzanne Cammell of Metal-Pages."If you don't get rare earths, you can't produce anything; that's why there's a panic."In early July, cerium oxide, used in the manufacture of ceramics and photosensitive glass, was $6-7 a kilo, she said. Later that month the price started to leap; now it is $36-38. Samarium, used in magnets for items such as headphones and carbon arc lights for the film industry, cost $4.25-$4.75; now it is $34-35.BubbleThe soaring prices produced dramatic gains for related stocks. The Financial Times reported that an index of shares in rare earth companies, from research firm Kaiser Bottom-Fish Online, has increased 12-fold in less than two years and by more than a third in the last month.It pointed out that the combined market capitalisation of six junior mining firms had reached almost $7bn (£4.5bn) although they are not yet mining rare earths and the market is worth about $2bn annually."It is a bubble. There is no doubt about that," said Gareth Hatch, co-founder of Technology Metals Research.But he said usage was increasing fast because rare earths are now used in so many consumer goods and because of the growing demand for such items in emerging economies.They are also vital for green technology developments: one wind turbine generating 3 megawatts of power might require 600kg of rare earths for its magnets, he said.Last year, global production stood at 124,000 tonnes. Lynas, which is developing a major rare earths project in Australia, reported that demand would increase by an average of 9% a year until 2014, but that supply would only grow to 170,000 tonnes, leaving a shortfall of about 20,000 tonnes. The Chinese Rare Earths Industry Association has predicted demand will rise by almost two-thirds within five years.China will use an increasing amount of its production itself. Some also fear Beijing may use quotas to promote domestic manufacturing because export controls apply solely to the raw materials, not alloys or components.That makes foreign governments anxious, particularly following reports that China has cut some shipments to Japan.On Sunday, the Japanese trade minister Akihiro Ohata urged China to begin shipping rare earths again, saying the Chinese vice minister of commerce had told him customs had tightened checks on rare earth exports to all destinations. China has denied claims that it is punishing Japan over a maritime dispute and earlier this month premier Wen Jiabao insisted: "China is not using rare earths as a bargaining chip."QuotaIn a statement last week the commerce ministry denied reports it might cut the export quota for 30% year-on-year and said China would continue to supply rare earths to the world."At the same time, to protect usable resources and sustainable development, China will also continue to impose restrictive measures on exploration, production and import and export," it added.For all the industry's hype, said Hatch, there is an underlying problem."Despite the relatively low value of these materials, the technologies enabled by rare earths and components that contain rare earths run into the trillions of dollars," he said."There is certainly going to be an issue in the next zero-to-three years where there will be a gap between material available from China and actual demand outside."MiningChinaInternational tradeAutomotive industryGeologyRenewable energyWind powerTania Braniganguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |