11/10/2012 Daily Politics

Afternoon, folks. Welcome to the Daily Politics. The government

spends �280 million helping first time buyers on to the housing

ladder. But will this really help us out of the housing crisis?

Credit rating agencies downgrade spanish bonds to one notch above

junk status. But what do the financial markets know? We'll be

speaking to polemicist Max Keiser. But say direct result of a bank's

confiscating millions from the economy using illegal practices and

larceny. Could David Cameron and Alex

Salmond open the door to allow 16 and 17-year-old to vote? They will

be allowed to in the referendum of Scotland. We are going to debate it.

And how would Conservatives here vote in the US presidential

election? Not necessarily for the candidate of the right, apparently.

All that coming up in the next hour of top-notch public service

broadcasting. And with us for the duration editor of City AM Allister

Heath. Welcome to the show. Let's start with the fall out from the

collapse of the proposed merger between the aerospace and defence

equipment manufacturer BAe Systems, the group once know as British

Aerospace, and the giant european aerospace manufacturer EADS. The

deal would have created a European defence titan with combined sales

of �60 billion and a serious rival to American companies like Boeing.

But it floundered on the insistence of the French and German

governments that they hold on to a sizeable shareholding. BAe employs

over 50,000 workers in the UK. Many in this jet-building factory near

Preston. The local MP Mark Hendrick joins us now. Were you disappointed

it did not go ahead? Very disappointed. Quite exasperated,

actually, because potentially it would have created a huge company

to compete with the American giants, which is what is needed for the

future. The jobs here are fairly safe for the short to medium term

but, in the longer term, there needs to be some European

consolidation in order to take on the Americans, otherwise Europe

will fall behind. Wasn't there a huge risk if it had gone ahead, and

clearly many people thought there were flaws in the deal being done,

you would have lost their jobs in your constituency anyway, because

they could have gone to France and Germany? That's true, because the

French and German governments needed to reduce their shareholders

down to 90% and then there could have been some balance on the

governance of the new company, but what would have happened if the

deal had gone ahead in the form presented, the German and French

governments would have had the better deal, and decisions would

have been made on a political basis rather than on commercial logic.

That may have meant jobs in Lancashire are going to Germany.

people in your constituency could be puzzled as you're puzzled the

merger did not go ahead? It makes commercial logic. In the longer

term, what we want to see are the French and German governments

reducing their stake and decisions are made on commercial logic and

jobs and investment stay in the UK, and not on the basis of expedience

for the German and French governments. What will happen now

as far as BAe is concerned? Will it survive or will it be vulnerable to

a takeover from elsewhere? BAe has exposed itself. The deal has not

gone ahead and the fact they did not ask for an extension to

continue negotiations mean the likelihood in the short term of a

deal with the Europeans is now off the table. The big American

companies like Boeing will look at BAe and decide whether they wish to

move in because, clearly, BAe, while it has orders, really needs

civil work because it's on the increase and military work, due to

the huge defence cuts in America and here, is on the down slope. In

order to secured its future, BAe needs to diversify and, ideally, we

could do that with the Europeans, but if not, obviously there are big

American companies which might fancy taking over. OK, thank you

very much. The British Government was never quite explicit about how

much it wanted his deal to take place. We now know from Jeremy

Heywood, the Cabinet Secretary in 10 Downing Street, through a whole

host of senior establishment figures, they wanted this to happen,

but it could have been a political crisis for a government? Yes, I'm

astonished how the Government backed this tour without thinking

about it and looking at the detail. It was apparent to me one it was

announced it would not work. It's a political deal. The Germans, French

and the Americans, because BAe has a preferred status depending on

assets to the market. It didn't seem to make sense. Commercially,

the deal failed completely. It's quite astonishing to see the

biggest shareholder in one of the UK's biggest companies falling out

completely with the board of the company, so this was a really

disastrous deal, badly managed, and everybody involved has failed.

Someone at the top of BAe needs to step down, I think. Yes, your paper

said youth or the chairman at the very least, the chief executive,

should stay, but the chairman should step down. Yes, some money

to pay the price for this disastrous deal. It collapsed so

quickly and it was not thought through properly. There was no way

the French and Germans were going to give up control over their own

domestic defence industries. This is a corporate system where

governments call the shot. You can't run them on a commercial

basis. The when I interviewed Philip Hammond about this, on

Monday, from up in Birmingham, the Defence Secretary, he had to have

been a crucial part of this. You think you would have been. He

seemed to be prepared to allow a deal to go ahead in which the

French and Germans would still have a 9% each and the British

Government would have 0%. Don't you think that would have caused the

Tories a lot of problems on their own back benches? Yes, there would

be a lot of upset about it. Ultimately, I just didn't

understand why they backed this deal. It's a very important

decision to make. Do we want to have a European defence industry,

an integrated European defence force one day? There is a political

message underlying this, which has to be decided in the next few years

when it comes to our relationship with the EU, and allowing the whole

thing to be decided in the way it could have been decided, had the

merger, had, strikes me as something very strange and not

thought out. It would have been the biggest merger in history.

would have been taken over by EADS. I agree. It involves the biggest

manufacturing company in Britain and yet, I don't think we've heard

a word from the Prime Minister. There was not enough discussion and

debate about this. I'm more in favour of free markets than anybody

else but this was not that kind of deal. This was a bad governance,

governments, politics, the long- term relationship between the UK

defence establishment and the European and American defence

establishment. There needed to be a proper discussion. On a purely City

terms, the deal was a failure. A revolt of shareholders. I don't

understand what they were playing at. It's not going ahead. No, I

wouldn't be surprised if it came back on the agenda some time. It

would be European companies. wouldn't be surprised if somebody

tries to bring life to this. Remember where you heard this first.

Now time for our daily quiz. A car previously owned by David and

Samantha Cameron is being auctioned today. The car was bought by the

Prime Minister as a surprise present for is wife way back in

1998. And it's expected to fetch up to �12,000 at the auction today.

But what kind of car is it? Is it: At the end of the show we'll see if

Allister knows the answer. I don't think he does. No, but he has got

time to find out. Now, as we read the runes of the conference season,

one of the policy problems that all three parties said they knew how to

solve was housing. And, as if by magic, today the government is

announcing the latest allocations of funds from their First Buy

scheme which aims to reduce the amount of deposit first time buyers

have to have to save. In a moment I'll be speaking to the Housing

Minister Mark Prisk. But first, Jo has put on her hard hat and taken a

look at Britain's housing crisis. That's right, Andrew. The Prime

Minister said yesterday the Conservatives are the party of home

ownership. But are enough new homes being built? There are three

million 20 to 34-year-olds still living with their parents. And,

according to government figures, the total number of households in

the UK is expected to hit 27.5 million by 2033. Up by 5.3 million

since 2008. That's an extra 232,000 households every year. So are

enough new homes being built to meet this increased need? Well,

government figures show only 21,540 were started in the three months

from April to June of this year. A drop of 10% on the first three

months. That's 54% below the pre- year, only 98,670 homes were

started. Also down 10% on the previous year. And way below the

232,000 needed to meet the The problem is that there's not

enough homes. What is needed? What is the priority, as far as you're

concerned? It's great to see housing got a strong profile in the

conference programmes across the political parties. It's very clear

now that this is going to be significant coming up to the

election. There's a number of younger families worried about

getting on the ladder, worried that their bank of mum and dad may not

help out with a deposit, so the profile is welcome. We now need

policy to link up with that rhetoric and at the moment, we're

getting from successive governments, a number of small schemes which

nibble around the edges but not been changing policies which will

deliver 232,000. What is the policy needed? The Government needs to

look far more seriously at how we reduce the price of land to make it

more affordable. Look at the structure of the development market.

A small number of large developers who have never deliver the kinds of

numbers of homes we now need. They need to bring in more competition

into that sector. They need to bring in bigger, simplified schemes

along the lines of First Buy. To help those on the middle and lower

incomes. But what's the point of this it does no homes out there for

them to buy? The primary focus has to be on supplying. It's

interesting home ownership, a staple of political rhetoric for

the last 30 years, is now in decline. Since 2003. We have far

too many mortgages and home ownership so it clearly not a

mortgage problem but a supply problem. Should we encourage people

to get onto the housing ladder when it is so expensive? That is

arguably what caused the crash in the first place. Certainly we need

to make sure mortgage regulation and lending is done very sensibly.

We need to look at the private rented sector where people can't

get in the social housing, can't to become homeowners, and many more

families end up in that sector, over one million. This does not

provide the stability the need. They signed contracts for one year

but put their children to school for up to five years. The governor

needs to reform that sector as well. The thank you very much. And the

shiny new Housing Minister Mark Prisk is here. Is this your first

appearance? Yes, it is. Less look at the context of this initiative.

There were 120,000 houses built in the 2010. 98,000 last year. Down at

20,000. How many will be built this year? So far we have seen

completions, not starts, which is very important because they

sometimes stay as foundations. I don't believe in speculate in a

whopper number will be in the next six months but, so far, in the

private sector, there is some real progress. Overall, how much will

housing be? You build 98 last year, rounded up to 100, so you say

110,000 this year? I'm not going to guess. We are in the middle of

October, and is only a couple more months to go and not much happens

over Christmas. You must know how many completions we will have this

year? We are on target for an improvement on that and I'm making

sure, not only do we do things about supplying would also demand.

That is what the First Buy is about. Even with an 80% increase, you will

still build fewer houses this year than were built in 2010 when you

came to power, and that was only 120,004 for a pretty bad figure in

its own right. There has been a long dysfunctional market, rented

and ownership, but what I would say, we are looking to make sure

affordable homes are expanded. Making sure private rented sector

is expanded. And using things like First Buy so the first buyers can

come into the market because if you help them, you unlock the housing

chain. It's got to be balanced carefully here. Alastair would

think we don't want to create the next boom and bust but we want to

make sure we are investing. I can assure you, you are a long way over

from a boom of for so I don't see how you can put life into the

housing market for affordable housing when you're cutting capital

$:/STARTFEED.. You're cutting capital spending on housing by 60%.

The public sector side. We are using the public sector money to

leave a private money. This scheme, where you get a mortgage, but you

get a loan as well to help you with the deposit. You only have to raise

5%. How many people will this help? In its first 12 months we have seen

3,000 sales and 8,000 reservations. This year we will double that. We

are looking at 27,000 first-time buyers. We were told it would help

16,500 first-time buyers. That is from this year onwards. Many people

are on bleak affordable housing waiting list. A more than that.

many? I don't know. 1.8 million on the waiting list. Would you like to

give me these figures again of how much your scheme will buy?

first time by ink is about helping a third -- particular group. The

affordable housing programme is bigger than that, that is 170,000

homes in that market. This scheme will help very few people and on

the start to a state where you launched it, you needed a joint

income of �60,000 to take part. Is that right? You have to make sure

you have an income. Winnie goes there, where I launched it, what

you see is the number of affordable homes was nil because the old

planning laws prevented it. We will have 114 new homes. It only applies

to first-time buyers. It only applies to new-build homes. It

can't be used to get a flat somewhere in an existing building,

is that right? That is correct. It is designed just for that group.

The danger is if we go broader than that, we start reaching beyond its

purpose. If we look at new by, that is a broader group. Qui do you

think any of these schemes make a blind bit of difference? The real

problem is that the price of land has been made artificially very,

very expensive bike over restrictive planning rules in this

country. We have a distorted construction and housing market.

That has been a problem for a long time. We need a massive increase in

the building of homes. They need to be the right kind of homes in the

right places, not tiny flats in privileged destinations. That is

where the change has to come. You need to liberate a lot of land,

maybe 1% of the total UK Land Pastor suddenly become developed

over the next few years. That is a very big issue that has to be

tackled. I see no sign... Tell me otherwise. I see no sign of any

housing boom happening in this country for the foreseeable future.

We are trying to not have a boom... Even building a lot more. The extra

170,000 homes is a good start. 170... 170,000 new houses. The

private rented sector which Roger referred to it is an important

thing which is often overlooked. It is correct to say that we need more

investment and that is what we're looking for. We looked at the run

rate for start-ups and so far this year, if you look at the first

couple of quarters, start ups of new houses were running at an

annual rate of only 80,000. That is below your completion rate. Rather

than any danger of a boom, you will probably end up building fewer

houses. We are trying to make sure that we don't get ourselves into

the danger of creating that potential boom. You're as far from

a boom as we are from the Antarctic! Wears the danger of the

boom in housing? We have to make a difference. Investing in an

affordable homes for makes a difference. You really think

there's no cause for concern when start-ups in the first half of this

year were running at an annual rate of only 80,000? There's a lot of

cause for concern. This is a dysfunctional market that has been

like this, whether it is owner- occupied or rented, for 15 to 20

years. You are only tinkering at the edges? I don't buy that.

don't? We are not tinkering. We are looking at where the problems are

in supply and demand and using this scheme intelligently. The demand

side stuff, I worry when you guarantee loans, first time buyers

only have to put in 5%. House prices in most of the UK are

falling. It is very plausible that a lot of these people will be

pushed into negative equity and this will create a situation of

sub-prime light where thousands are encouraged to buy... If we helped

the supply and demand we can make a difference. It is a tough market

and I don't want to over a promise. We can make a difference, but I'm

careful about it. Thank you. Don't become a stranger. Don't go hiding

when the figures get worse! Life is getting more difficult for

Spain and the situation for the eurozone more perilous. Last night,

the credit rating agency Standard & Poor's downgraded Spanish bonds -

or government IOUs - to BBB minus, or just above junk status. This

morning, the markets have reacted and it's got more expensive for

Spain to borrow money. But what do these credit ratings agencies know

and have we all become slaves to the financial markets? This man

thinks so. Bankers? They need to be dredged out on the streets and

shafted. The bloody bankers, they are responsible for the food banks,

this bloody shower of a government is prostituting itself for the

bloody bankers. The omniscient London taxi driver. It is absurd to

think that it is a period of Banket bashing that has come to a close

because we have not even begun to - the bankers. We will fight them in

the trenches. We haven't even started. How dare they say it time

to stop? It is absurd. Makes our programme seemed quite quiet! And

the star of the Keiser Report - Max Keiser - joins us now. We take our

inspiration from you. You are the template we try to follow. There

goes my trance -- my chance of contract renewal! Give me a system

that works without bankers. We saw some great bridge bank against

Bankers in Iceland. -- push back. They got the country into deep

trouble and they effectively pushed back begins the bankers. They had

been economic downturn and now they are recovering. They still have

banks. Sure. The problem is not banking per se, but too big to fail

banks. Part of the crisis of 2008 was that the big banks got even

bigger. We have fewer of these institutions. Iceland is the best

we can do? It is a great example. You ask me for examples. I'm not

arguing. It is a global problem. We don't have a lot of great examples.

We need banks. The banking institutions are a necessary part

of running society, no doubt, but when you have too big to fail banks

and bankers engaging in wholesale fraud, manipulation, insider

trading, this country... In London you have just come out of the libel

scandal and other scandals. The City of London is the most regular

to relax environment in the world. AIG come through London, Lehman

Brothers come through London. All of these scandals come through

London because they have very lax banking standards and that is one

thing for prime minister should address. He should address this

issue, to get rid of some of these guys who are making it very

difficult. Whether or not we need banks, and we probably do, the

record of the banks in recent years has been quite appalling. Just when

you think it will get better, some other mis-selling or scandal or

moving the money of the Mexican drug cartels or helping finance the

Iranian government against sanctions. You couldn't make it up.

It has been catastrophic. Why were these decisions made? One wire --

why was there a huge bubble? A huge cluster of errors made by bankers

and financial services? The first explanation is it is a spontaneous

outcome when you have banks and capitalism. That is my view. The

markets were horribly distorted by a very lax and ridiculous monetary

policy and ridiculous guarantees from governments and intervention

at this idea that big banks would be bailed out and the Federal

Reserve would always step in if the financial markets went down. Those

two factors were the dominant cause of the financial crisis. We have

common views in terms of monetary policy. It has been a catastrophe.

It is not a spontaneous eruption of fraud. There's more premeditation

going on because somehow bankers continued to get enormous bonuses

every year. They are not suffering. It is not a spontaneous combustion.

The monetary policies are definitely... There it -- there are

regulatory loopholes and they must be looked at. The Monetary Policy

encourages moral hazard. The Fed and the Bank of England keep giving

banks cheap money. That is a massive government failure. Q2 are

agreeing! We will have to put an end to this. For when it comes to

fraud, there has been a massive error in the UK. Fraud in finance

or business in general wasn't prosecuted heavily enough compared

to the weight it was in other countries. What we saw a... When

there's a bubble, nobody cares, nobody looks for the fraud in the

crime, everybody's happy. When there's a recession, everybody

starts looking under every stone and finds horrible things.

housing market booms and everybody says look the other way because my

house is going up. The housing market collapses and they go, wait

imminent. -- wait a minute. There was a massive pharmaceutical

scandal recently where one company had to pay it -- making huge fine.

It didn't make the front pages. Rightly we are exposing scandals

and banking. Let's focus on the new regulator, Martin Wheatley. They

are bringing in a new regulatory agency. He says we will start

prosecuting crimes in the future, they should start to look at the

crimes that are still seething in the present. They bring in a new

regulator, out with the old, in with the new, deflect attention.

Martin Wheatley has an demonstrated... If he wanted to do

A way key Iceland is the way ahead? The way ahead is to treat banks

much more like other kinds of businesses and make sure that

failure in banking is published in the same way it is punished in

other industries, with bankruptcy and loss. You can't nationalise

losses. You need to find new ways of allowing the biggest banks to go

bankrupt. Her what would be the effect on the population at large?

Exactly. You have to protect that, but you have to make sure the

bondholders that were bailed out pay the price. There's ways of

doing this. That is the most important point. You need to have

real capitalism in banking, not the rigged markets we've seen. Haven't

we become too dependent on the financial markets? We borrow so

much as individuals and as governments. We wouldn't have to be

in hock to these guys if we lived within our means. That is true.

Banks make money by putting money - - people in hock. You see this on

an individual level with the pushing of credit cards, but also

on a regional level and sovereign level. The problem in the eurozone

was these countries were forced into these huge debt positions,

particularly Greece, they were encouraged into enormous debt

before a jury -- joining the euro by bankers on Wall Street.

banks made them do it. You can fudge the rules by not complying to

the Maastricht treaty, according to Goldman Sachs. The politicians went

along with that. I don't buy this idea that borrowers are powerless

people who have to borrow. Tainted meat! They need consumer

protections. People are selling bad debts. Politicians borrowed too

much because they were stupid. They joined the euro. I knew I could get

the two of you to disagree. Who is the biggest contributor to the re-

election campaigns in the US? Wall Street. David Cameron is very, very

city with the City of London. And, Max, you're staying with us

because, did you understand any of what we heard there? Do you know

your debt from your deficit? Your RPI from your CPI? Your QE from

your government bonds? They're terms we hear on programmes like

this one all of the time. But we at the Daily Politics believe that our

audience should be well informed. So Susana Mendonca has put together

her very own shopping list of terms Goods and services, we all buy them

and the price we pay for them changes over time. The inflation is

the rate at which that change happens. Say this basket of

groceries cost me �10 today. An extra 25p for the same items in one

year. That would mean inflation had gone up by 2.5%. But there are

different ways to construct a representative basket. There is the

RPI, and CPI, I think I might need a copy of this now. The main

difference between them is that the RPI includes mortgage interest

payments and the CPI does not. Meaning the RPI tends to lead to

the entire outcomes for inflation. Debt and deficit. Don't confuse

them. Debt is the total amount of UK government owing, whilst the

deficit is added to that debt each year. That's what I was looking for,

a bit of feta cheese, which brings me to another financial phrase we

hear a lot about. The eurozone debt crisis. The eurozone debt crisis is

the result of market's thinking that the peripheral countries of

Europe, Portugal, Ireland, Italy, Spain and Greece have bad debts,

and can only be lent to at very high interest rates. The Bank of

England has rolled out a couple of rounds of quantitative easing,

printing money to you and die. print anatomically and use it to

buy a specific types of assets, long-term debt, held by financial

institutions and companies. This makes debt cheaper for those

companies and allows them to keep operations ticking over. The

problem is, it is very hard to determine what effect it's actually

had and if it has had positive effect, it could make the rich

richer. Why not throw in a few Bonts? Imagine I want to borrow

money from you, I would say, lend me 10 quid until next week. If I am

a government, I want to borrow billions of pounds, obviously this

not one person to give me a cheque for that much, so I split it into

little Bonts and sell them so people can buy the bike to get

interest on the debt from me. -- born tos. That's the shopping done.

I'm off to find out what the word broke means.

I think I can help you with that one, Susanna.

Max and Allister are still here. Andrew Hawkins from ComRes joins us.

The economy has been the main issue for the last five years. Has

economic literacy improved? I don't if it improved in the last five

years, but in that context of the present crisis, nine out of 10 of

the public, in some recent polling, actually thought at the end of this

Parliament, the Government will have paid back �600 billion in debt,

rather than increased it, and the political row of the occasions of

but obviously are huge. The Government's message on the deficit

has been very strong. When you look at who wrongly believes the debt is

being repaid, the Government could be in real difficulty because most

of those are Conservative voters. So when it comes to saying of the

economy is stupid, how are politicians supposed to direct

their campaigns if the understanding is pretty mediocre?

It can be done. The single message in the last election was a brace

yourself, it's going to be bad. The trouble is, the timing of the cuts

and the nature of them haven't really affected people. Obviously,

you go for the easiest things to cut first and then get into the

nitty-gritty. The fact that the economy has not turned around, the

time has been delayed when the nasty cuts are going to hit at the

next election. If one doesn't really understand enough about

fiscal and monetary policy, austerity verses fiscal stimulus,

how can you decide who to vote for? The it's a terrible problem. These

findings are interesting and show it's a major issue at the heart of

British culture and anybody is to blame for this. The education

system, media and politicians. Nick Clegg not long ago was confusing

deficit and debt for the George Osborne has also confused them

saying that we are paying down the debt. Is that accidental? The

probably accidental, but it shows is a major problem if the

politicians are confused. I think it makes matters worse. It's a

really big problem. His economic literacy worse in this country than

it was 30 years ago? I don't know if it has become worse but what I

do know, it is really, really bad, and the basic concepts need to be

taught in schools from a younger age. There needs to be public

conversation about this and it's about numbers and innumeracy and

percentages, the difference between millions and billions. But people

will understand the way you have been bashing the bankers. It's a

simple concept but, beyond that, perhaps they don't really know what

you're talking about in terms of regulation. Is there any point

going on about it? Financial literacy is a problem and clearly,

it is, you have to ask yourself whether George Osborne puts forward

a scheme to exchange rights for shares to a population and knows

nothing about shares. You have to ask yourself, is George Osborne

exploiting that knowledge gap? Exploiting the a literacy to get

bigger to sign up for something not in their best interests? That is

shameless. I was shocked he made that offered to the public. The I

also shocked by Ed Miliband and others saying millionaires are

going to get a cheque for �40,000. Because of cutting the income tax

to a 45p. He said the redistribution, which attacks the

problems in the system, before they develop and get out of hands,

that's interesting concept, adopted by Margaret Thatcher. It was a

justification for selling off the council estates. There were some

interesting policies which I think are more market sensitive. This

prime minister, this chancellor, shows remarkable market illiteracy.

I agree. The Ed Miliband argument about millionaires, every single

millionaire in the country being given a cheque was clearly wrong

and something Republic could have understood immediately had there

been more financial literacy. It's a damn a complicated debate about

the cause of the crisis if there's not more financial literacy. I

would argue that that is why your ideas are not so successful. Your

ottomans are more complicated? easier than saying there's a whole

set of issues, cheaper money, imbalances, all that sort of stuff.

There is an issue of right and wrong. Listening to the Prime

Minister in his speech, he talks about ambition for the country to

knuckle down a. That would encourage fair play. When you have

a looting at the banks, rigging scandals, laundering drug money,

it's tough to put the opposition out there. Aren't all politicians

guilty of putting a political gloss on a more complicated economic

message? He yes, and people who support different parties will see

a political message in what they want to see, but we shouldn't

forget an awful lot of people are in business, run businesses, and I

seem to recall in the days before I had lots of grey hair, Margaret

Thatcher countered this in grocer's shop finances and I think people

understood that. The chattering classes may deter for doing that.

But today, for example, I wouldn't want to be having debt higher than

5% of my turnover. The Government seems to think it's OK to have a

debt 15 times the size of that 5%. Yes, people also understand, of

course, the analogy of you have your credit-card, and you spend it

all, then you have a problem. The Government do not have a credit

card but run debt for the it's different when you talk about

governments, because they can print money and do all sorts of things.

Consumers are not empowered to make the right choices when it comes to

financial services. You have had endless scandals. Miss selling and

so on. It never ends and the never solve these problems and people are

not saving enough and have enough pensions. It's a major problem.

going to up to stop you there for that we will have to get you one

for an economics lesson in future. Thank you very much. Come back and

see us. Now, on Monday, the Prime Minister and First Minister of

Scotland will meet to seal the deal on a referendum on independence.

Part of that deal is said to be a concession which will allow 16 and

17-year-olds to vote in the poll expected to be held in two year's

time. It looks like the nationalists will agree there is

only one question, are you for against it? Concern about the

proposal was raised in the House of I beg leave to ask a question about

which I have given private notice. The question is as follows. To ask

her Majesty's Government, whether, before the Prime Minister meets the

First Minister of Scotland on Monday 15th October, they will

clarify whether it is proposed to extend the franchise in any

referendum on Scottish independence to 16 and 17-year-old and, if so,

by what legislative means? And what of the implications for electoral

law in the UK? My Lords, people in Scotland deserve a referendum of

the Scottish independence which is legal, and decisive. There has been

progress made towards an agreement but details are still under

negotiation between the two governments. The Government which

will both houses of parliament are fully informed and are required to

provide components to the Scottish parliament will require the

approval of both Houses and Her Majesty's Council. Could I suggest

he's not answered my question? Matters of electoral importance and

the extension of the franchise are not matters to be carried out in a

corner negotiations, however senior the party. If the franchise is to

be extended in Scotland for referendum, is it not inevitable

that we will have to extend it to 16 year-olds for all elections

throughout the UK? A matter which has huge implications, not least

that it will bring politics into schools? If the Government is

proposing to do that, would it not be proper for them to issue a paper

for consultation and to consult widely and make no commitments

what's above until they have done And here to debate the pros and

cons of lowering the voting age are the Conservative MP Eleanor Laing.

And Rhammel Afflick from the British Youth Council. Welcome to

both of you. Do Conservatives oppose votes for 16 and 17 year-

olds? No, in principle, not because they will vote one way or another

but because I think you have to draw the line somewhere. The

obvious place to do it is adulthood, 18. Why is that question you can

have a job, pay tax, get married at 16? Isn't that the age? You can

legally get matter at 16 but I wouldn't recommend it. Why can't

you vote them to? It's not a sudden point when somebody becomes an

adult, but a process. For some of us, it's still going on! Do I

couldn't agree more. I know lots of 16 year-olds who are far, far

better informed about politics than many 60 roles. Of course, they are

intellectually Capel, writing essays for A-level politics, for

example. -- capable. There's nothing intellectually wrong with

people being involved in politics. I want people involved at all ages,

but you have to draw the line somewhere. It is silly to draw it

at 16 for this, when the age of adulthood is 18. It's not fair to

give people a responsibility too early. What do you say to that?

completely disagree. It is something I have been passionate

about for a long time, that people, young people, should be able to

vote, simply because, actually, you're quite an independent person

at 16, and they are mature enough and they are affected by the

decisions the politicians make. They are not able to hold them to

account properly without having a vote, so I believe strongly they

$:/STARTFEED. Whatever done so is there that 16-year-old would do it?

It is not relevant. The reason I say that is because the issue of

getting people to vote is a separate issue. If we were having a

problem getting women to vote, we would not take away their vote

because they are disengaged from politics so I don't believe that is

an argument. If you want young people to get involved in politics,

why not get in early? There are other ways in which young people

get involved, there's a Youth Parliament, the British Youth

Council. I hold an annual debating competition in my constituency

where kids take part and they are brilliant and they put forward

brilliant arguments. They are practising, developing their

political ideas. You need to serve an apprenticeship. You are

practising at 16 and 17 and at 18 you can vote. Why is your

government allowing them to vote in the Scottish referendum? If that is

the case, which it looks like it is, it is part of a deal. It is wrong?

I still think it is wrong, but I would question the whole franchise

of the Scottish referendum. There are more Scots living outside

Scotland than there are living in Scotland. A you do think it was

wrong to make that part of the deal? I would rather that hadn't

happened, but if the deal is that there will be one distinct question

on the ballot paper... That is the deal. I'm OK with that. He can have

the vote? If that is the deal, he can have the vote. Just this once?

Is that really possible? This is a stepping-stone for all elections.

Put it back on the agenda. If it has and rightly so. As a 16-year-

old, you can pay taxes. Why shouldn't young people be able to

have a say on the taxes they are paying? At 16, you have to pay

adult fares on the train. If you have an argument that you are going

to use Boris Johnson, you don't like what he is dealing with

transport in London, the prices are too high, how do you have a saying

that? You say this is a stepping stone, this deal will be a stepping

stone to other elections, how will you stop it? You won't be able to

say you were doing it on just this referendum. It is not a precedent.

It puts the matter on the agenda. We had a debate about four years

ago on this. There were about 40 people in the chamber, nobody cared.

40 is quite a lot these days! That is overcrowding. Perhaps. There

weren't many people taking part. I was. It is essential that the

matter should be debated in the Commons properly. If Alex Salmond

has managed to get it through this time, that doesn't create a

precedent. What is upsetting is that something so important,

extending devote to 16 and 17 year- olds, has been part of some grubby

little compromise. It is like House of Lords reform. It is the sort of

thing the public looks at an things, what are the politicians playing

at? How can such important questions be decided in this way?

They can make it up as they go along. Can I quickly say to you, we

have a short gap between her -- before Parliament returns, are you

happy Andrew Mitchell will be come back? He has never called me

something he shouldn't have. Give him time. Undoubtedly. He is a good

chief whip. He was a whip before when it was difficult and he will

get on with it now. I care more about his ability to manage

business in the House of Commons. He will be able to now?

Do you don't fancy him as High Commissioner in Rwanda? He was a

very good International Development Secretary ft up her I'll take that

as a yes! Thank you. You'll all have your alarm clocks

set for 2am tomorrow morning, won't you? Because that's when the debate

between the two vice presidential candidates in the November's US

general election. Only US citizens get to vote, of course, but we like

to extend the franchise here so Adam took his moodbox out at the

Tory Party Conference to find out how British Conservatives might

Which one of these two would people at the Tory conference like to see

in the White House? Let's find out. In America, the colours are the

other way around. Romney is red and Obama is blue. Why Mitt Romney?

think Obama is no friend of the UK. Ronnie is a nutcase. He is out of

touch. Obama is the sensible candidate. We need the American

economy to get moving and I think Bromby could do that. I don't think

the founding fathers believed in mixing religion and politics. I

think mitt Romney is overly religious. I would hope that David

Cameron would vote for Obama because views are nearer his.

he is left-handed. Five of the last seven US President's have been left

handed. K is his red? A Mitt Romney man. Conservative. I support

Conservatives in almost every country so I hope Mitt Romney wins.

The even if they are gaffe-prone? The best politicians are gaffe-

prone? What has Mitt Romney got so wrong? He has been very gaffe-prone.

He hasn't come across as a One nation Conservative. He was very

rude about London, frankly. I took that rather badly. We have a real

live American. A lot of people think there's an automatic link.

doesn't follow the same lines. My mother is a democrat and she was

horrified that I was voting Tory. I had to explain the difference to

Watched the next debate because it will be interesting. It is not just

going to be the two leaders, it will be the two candidates being

questioned by a group of voters who have been specially selected by the

Gallup Organisation because they are undecided. Who speaks well on

Would you like to vote in the American election? That is not

diplomatic! Are you worried you might create a diplomatic incident?

I'm always worried about that so I always avoid them. I think he is

one of the most intelligent leaders the Western world has ever had,

Obama. I would like him to be more decisive and cut the deficit faster.

Those are words I could use about David Cameron as well.

confident are you that will be the result? I think it is too close to

call, it will go down to the final debate. We will see which direction

America takes. Whoever wins, they have to get to grips with America's

budget deficit. It threatens our economy as well as theirs. For ages

Obama was ahead and then Ron knee snap up from behind. Look at the

final result. Obama has won at the Tory party conference.

Congratulations on your re-election, Mr President.

If only it was that simple! The MEP Daniel Hannan - a big

Romney supporter - is in Brussels, and Kwasi Kwarteng, who has mixed

feelings about the two candidates. More Conservatives at your

conference saying they would vote for Mr Obama than Mr Romney. What

do you make of that? Four years ago I would have been one of them. What

has changed since then is the size of the US deficit, which is now not

just a domestic problem for them, but it is becoming a global problem.

I wish I had a vocabulary to convey what 16 trillion dollars of debt

means. There are not the words in the English language to do credit

to a numbers at astronomical. don't your fellow Tories recognise

that? The reason is we tend to see him doing what he is good at. He is

a very good speech maker, he does the ceremonial side of the

Presidency beautifully and simply by occupying the office he does, he

reminds us that America is a country with a greatness of spirit

to have moved in a single generation from the semi-

formalised exclusion of black voters to the election of a mixed

race President. It was on those grounds that I backed him for years

ago. We don't have to live with it. Up isn't the truth of this, why we

got the that result, that today's Republican Party, not just Mitt

Romney, but those to the right, and today's Conservatives, probably

have less in common than the Republicans and Conservatives in

any time during the Second World War. I think that is true. You have

to look at what has happened to the Republican Party. The Republican

Party of Ronald Reagan was not as obsessed with social issues

regarding abortion, religion. I've no idea what Ronald Reagan's

religious beliefs were, I suspect he was a Christian. There was

something he never talked about. The rise of the religious Right in

America has alienated a large portion of the Republican Party

from Conservatives. As Daniel said, on the fiscal side, we are in

agreement with Mitt Romney and I think the debt situation... It is

the social issues? We haven't got much time. If you look historically

at this, if you take Mr Eisenhower and Mr Macmillan, they had a lot in

common, they fought a war together. No argument about Mr Reagan and Mrs

Thatcher, they were ideological soulmate. Even John Major and

George Bush were similar post ideological friends, they got on

well, they began a war together. Mr Romney and Mr Cameron, it doesn't

quite work. I hope they will not begin any wars together! Per not

ruling it out. Of course. Religious issues have taken more of a centre

stage, but it is worth stressing that none of these questions have

anything to do with the White House. The issues of gay marriage and

abortion and so on, I'm not saying they're not important, but read the

constitution. Keith Daniel is technically right. In order to win

the Republican nomination, it is absolutely certain that these

issues are critical. They are central to how you get to the

nomination. That is why this sort of language has put off a lot of

people on the centre right. I'm not sure it is fair to include Mitt

Romney in that. He has been desperate not to talk about his

religion. We know why that is. Most Republicans desert -- regard

Mormonism as a cult. I think most Americans have their humanity, the

courtesy and the decency, and are taught by their constitution and a

Bill of Rights, not to make an issue of people's innermost

convictions. They are polite enough to understand they don't do that.

Will you watch the debate tonight? I have to be up at an unfeasibly

early time tomorrow. Don't go to bed! When you watch it? Who would

you vote for in November? I would probably -- probably end up with

Mitt Romney. You would not want to see Mr Obama have a second term?

The debt, welfare, taxes issue is what the Democrats will lose on.

Thank you. There's just time before we go to

find out the answer to our quiz. The car previously owned by David

and Samantha Cameron is being auctioned at today. What car was

it? Have a guess. Is it the Mini Cooper? It is not. It is the Fiat

500. Very similar, but very different. And people say he is a

posh! That's all for today. Thanks to our

guests. The One O'Clock News is starting over on BBC One now. I'm