15/10/2012 Daily Politics

$:/STARTFEED. Hello and welcome to the Daily Politics. Alex Salmond

will meet with David Cameron in just over half an hour, after thae

gree plans for a referendum on Scottish independence. There'll be

one question and held in two years' time.

The Home Secretary Theresa May is expected to tell MPs she will take

Britain out of over 100 European Union measures on law and order.

The Government asks Virgin Rail to continue operating the West Coast

main line for at least another nine months.

MPs could get paid more in return for paying more into their pensions

and waiting longer to draw them. We'll look at the latest proposals

for MPs' pay. All that in the next hour. With us

for the whole programme today is the businessman and entrepreneur

James Cann. Welcome to the Daily Politics. If you have any thoughts

or comments on anything we're discussing then you can send them

to us: [email protected] or tweet your comments using the

hashtag #bbcdp. Let's start with the news this morning that the

Government has asked Virgin Rail to continue to operate the West Coast

main line for at least another nine months. The move comes after the

original franchise process was scrapped by the Transport Secretary

last month, after Virgin appealed against a decision to award the

contract to their rivals FirstGroup. Well, James Cann, your impressions

of this whole debacle? I think it's a bit of a mess to say the least.

The thing that probably concerns me the most is you know, the

Government is probably the biggest spender in the UK and there's a

real encouragement for Government to govern and business to run

businesses. This was quite an important opportunity where the

Government essentially is procuring to bring in a private contractor to

run a business. The way that it's gone about doing that and the

issues that it's caused have been quite embarrassing. On the one hand,

you select somebody then you change your mind. Then you say you've got

it wrong. Now you're going to get essentially legal issues from both

Virgin, from the company that was granted it. You're almost going to

have to retender the process. are going to retender it. On that

basis and the way you've outlined your concerns, do you have any

faith in the process in the way that it will be carried out for a

second time, when the first time, the technical flaws that were found

meant the process had to be done again? For me, I'd like to

understand what the technical issues were. I understand

Government procurement quite well. I'm pretty sure there were a number

of clear issues where those guidelines have been breached. I

think therefore to retender, to be blunt, I don't think it should take

that long. If you've done it once before, you've gone through the

process, there's probably been a handful of issues you haven't been

very clear about, therefore why would it take that long again. As a

commercial businessman, that should be done, I would imagine... Do you

think the franchises should be between 13 and 15 years, that

apparently has been used as one of the arguments for the mistakes in

terms of predicting passenger numbers and effects of inflation.

Do you think the franchises should be shorter? Typically those type of

deals are ten-year type deals, bearing in mind you are talking

about a huge amount of investment required to manage, to control, I

think any investor going into that needs an opportunity to recover the

investment that it makes wh. You're dealing with large-scale projects

of that nature, you need to have a sensible period of time. One could

argue is it ten or 13, the point of principle here is do it and do it

right, make sure it's clear and transparent and also, remember, you

have the entire business community looking at you for encouragement to

say, when I put a tender forward, because to private businesses,

tendering for Government contracts costs an awful lot of money. That's

the worry isn't it that they have to put the money in again. It takes

a huge amount of time. What you're trying to do, if you imagine today,

large businesses sitting there saying, you know, is it worth it?

Can I risk that much time and money because if I do end up winning and

they change their mind. FirstGroup may still decide to sue. Now, it's

time for our daily quiz. David Cameron is the latest in a number

of public figures who are narrating a chapter of a famous book. The

section he's recorded it out today. The question is which book is Mr

The question is which book is Mr We'll give you the answer at the

end of the show. It's been highly contentious and

after months of negotiations David Cameron is about to meet Scotland's

First Minister, Alex Salmond, in First Minister, Alex Salmond, in

Edinburgh. They are expected to sign a deal grapbtding the power to

hold a referendum on independence. What's at stake here and was been

agreed? Alex Salmond had wanted there to be two questions on the

ballot paper, one asking about independence and another, asking

for more devolves powers. There will be just a single yes/no

question on independence. The SNP had also lobbied for 16 and 17-

year-olds to be allowed a vote, which David Cameron has agreed to.

Both sides claim they've achieved their goals, but the honours are

divided. The Electoral Commission will play a key role, advising on

the wording of the question, something which the SNP had

previous live rejected. And will oversee other issues such as

campaign finance. The vote will take place in the Autumn of 2014,

meaning a marathon campaign for both sides. But this was always the

SNP's preferred date. David Cameron has pledged that keeping the United

Kingdom together is his number one priority. Whereas Alex Salmond has

said the referendum is an important step towards creating a fairer and

more prosperous Scotland. Last week, a poll suggested support for

leaving the UK has recently dropped. 53% of people are in favour of the

union, compared to 28% who want independence. Well, we can now talk

to the SNP's Derek Mackay, the Scottish local government minister.

Thank you for joining us. The terms of trade have been agreed, but we

don't yet have a question. What would you like it to be?

Scottish Government would like the question to be - do you believe

that Scotland should be an independent country?

Straightforward, clear and unambiguous. Zuz it have the

support of the pro-union parties? think they're pretty close to that

wording. I'm sure they would want more prejurortive terms talking

more Negtively about independence. I think everyone understands what

the question means and what's significant about today, this is an

historic agreement where the bill, the question and framework for the

referendum will be made in Scotland. That's what the SNP Scottish

Government sought all o long. say the pro-union parties would

like more negative language. It's very important because the way you

frame the question is influence the answer. I mean most questions do,

don't they? If you ask a straightforward question, agree or

disagree, could you understand people might feel that is tilting

in your favour? It was good enough to establish the Scottish

Parliament itself, where people were asked a question, would you

lick a Scottish Parliament? It's the same framework, it's the same

formula that's been deployed for the independence referendum. What's

crucial it's not a conva luted question. It's a direct yes or no,

do you want independence for Scotland and whatever words feature

in that, as long as it's clear what the proposition is, I think that's

most important. The Electoral Commission has an official role now

to decide whether the question is fair, will you abide by the

Electoral Commission's views on this? In the same way that any

Government or Parliament takes the advice of the Electoral

Commission... If they say no... think we'll wait and see what they

say around the question. Most people aren't far away from the

wording that we proposed. We'll see what their advice is. We wouldn't

want to be prejudice their position on that. But the Parliament elected

by the people of Scotland and incidentally, two thirds of the

people of Scotland trust in its Parliament to make better decisions

than Westminster, will determine what the question will be. Of

course, we want it to be fair and transparent and unambiguous. The

Electoral Commission will have exactly the same role in this

process as they do for other elections in the United Kingdom.

That seems fairly consistent. they reject the question as it

stands and say it needs to be changed, you and your party will

abide by that? We'll cross that bridge when we come to it. I don't

believe they will reject the question. We want clarity in what

the question is. We're proposing the question - do you believe

Scotland should become an independent country. That feels

fairly strailgt forward to me. People understand what that means.

The substance of this debate is not necessarily the wording of the

question, but whether people want to be an independent country - yes

or no. We'll get to those issues quickly now we've moved on the

process. What about the support as it stands? Opinion polls over the

last year or so have showed less than a third of Scots supporting

independence. The herald poll last week found less than a third. You

have a mountain to climb. We have a long way to go. We have two years

to impress upon the people of Scotland the very positive case for

independence. If opinion polls were everything, I wouldn't be sitting

here as a member of the Scottish Parliament that said I would be

defeated. Going from behind in the opinion polls, the SNP delivered a

majority Government that was unthinkable before the May 2011

elections. We have a long way to go, but here's crucial, two pollles

that really matter. The most important poll will be the one in

the Autumn of 2014. Two interesting polls, the first, if we can prove

the case that Scotland would be better off economically, a majority

would vote for Scottish independence. The second poll was

around trust in the Scottish Government. More people trust the

Scottish Government to make the right decisions for Scotland than

the UK Government. That is the essence of independence. That's why

I believe we can win. It's amazing that the polls have fallen over the

last few months. Let's see what independence would mean. Keeping

sterling and the Queen, what does independence mean as far as you're

concerned for the people of Scotland? Independence means that

the people of Scotland get the Government that they vote for. That

means that we wouldn't be ruled by a Conservative liberal Government

we didn't vote for. Your monetary union, you'd be part of the union,

your interest rates would be set in London not in scolgd. That's

correct. -- Scotland. That's correct. We would have more fis Val

power than under current arrangements. We would pick the

kurbsy that best suits Scotland's needs. We're not alone in proposing

a monetary union. Over 39 countries in the world have that.

eurozone doesn't seem to be functioning well as part of a

monetary union. We're not proposing that. You would be in a union where

your fiscal flexibility would be limited, wouldn't it? The Scottish

Government within the current arrangements has a very -- very

little fiscal independence. The monetary union and sterling seems

right for Scottish circumstances, would be good for English, Welsh

and Northern Ireland circumstances as well. Why would we reject a

country with such immense wealth. In Scotland we generate more than

we spend. You mention the wealth, when people come to vote in 2014,

they won't know the predicted income from North Sea oil because

no decision on how the funds from North Sea oil will be split has

been made. The commission will be looking into that. People will not

know how much income you can generate from that fund. They'll

have a great deal of clarity. We can estimate even at this stage

that there's about �1.5 trillion worth of ref enough still to come

from -- revenue still to come from North Sea oil and gas. Those

figures I can tell you now. In terms of the future, we want to

invest in renewables. That's not the question I asked. In terms...

We will... Just let me put this to you. We will put a full democratic

case in terms of a white paper where we can answer the questions

that people will rightly ask. Because figure that's have come

from Government expenditure and revenue service for Scotland say,

given figures for 2010/11 even with the Scottish share of North Sea oil,

Scotland would run a deficit of �10.7 billion. What would you do,

cut services or borrow money? think it's perfectly clear across

the world with the current international recession very few

countries don't run a deficit. A structural deficit at the moment wh.

Compared to the UK, those figures show Scotland's deficit

proportionately is smaller than the UK. But how would you pay for it,

balance it? In the exact same way that any other country in the world

would, on the basis of our assets and projections we would be able to

borrow like any other independent nation. We would have access to far

more resources. We're blessed with resources in this country, natural

resources and human resources as well. We would borrow. With more

adept economic policies we could deliver growth and economic

recovery more quickly. Thank you very much. We can now talk to

Norman Smith in Edinburgh for us. This is an historic moment. Sum up

the feeling, the atmosphere from where you are. I think there say

broad consensus amongst the parties that it is a genuinely historic

moment and we cover politics day in, day out, we cover rows and splits

and gaffes and what have you, they pale into insignificance with the

comparison of the magnitude of events now unfolding over the next

two years. You could be signalling an e -- event bringing to the end

of the 300 years of history. The consequences for the politicians

and political parties are massive. For David Cameron, very obviously,

he does not want to be the leader of the Conservative and Unionist

Party at a time when it splits. Similarly, for Alex Salmond, this

is his moment. This is what the SNP have strifb for for decades. Were

he to lose the referendum, it seems to me it poses something a question

for what on earth is the SNP for. And for Labour too, if the Scots do

vote for independence, then it make it's a huge mountain for Labour

ever to win again south of the border. There are massive

consequences and implications for all three main players here.

Beautiful day for a big moment, which will be carried out behind

you. It's all about the process today really. Single question on

the ballot paper, referendum, timing has been set. 16 and 17-

year-olds to vote. Would do you Alex Salmond won some important

tactical victories, but Downing Street will comfort themselves by

having one the big strategic victory, which was to ensure there

was one question. The great fear was the two questions and

devolution Max. However, they took the view it was basically a free

luench question that everyone and anyone would -- lunch question,

that everyone and anyone would vote for that, because you don't have to

worry, so Downing Street take the view by getting it down to one

question it's a crucial win and they believe they can beat Alex

Salmond on that. Word of caution, although the polls would suggest

that the SNP have an allmighty mountain to climb, they've climbed

such mountains before in successive by-elections and the last

Parliamentary election. James Caan, it's a long campaign. Do you think

people will be fed up or will they understand the issues more? I think

they understand the issues. I think the interesting thing for me is

first, over 65% of the local people are not voting with their feet, the

polls suggesting that there isn't the kind of euphoria of

independence on the ground as you might be looking at when you listen

to politicians. However, as a businessman, if I took a very

helicopter view on this, I think this comes down to North Sea

revenues at the end of the day. I think this is a whole issue which

is clouded in massive debate. the economy? Really, it comes down

to the one issue, who will get the lion's share of the revenues and we

are talking about a lot of money? The question that goes through my

head when I listen to those two interviews is if you took away

North Sea revenues would we still be having the same debate? I'm not

sure, because I think that's the thing driving this, because I think

Scotland would like to keep all of those revenues for themselves. I

think the UK currently is looking on a macrolevel and saying they're

important to us as a whole and economies of scale that we can help

a much greater population across the board. It's not about politics,

but money. We'll talk more about this with our three MPs later in

the programme. First, later today the Home Secretary, Theresa May, is

expected to tell MPs that the Government will opt out of over

100EU measures on law and order. James can tell us more. Thank you

very much. It's a long-standing thorny question. How much should

the prosecution and police officers and our courts co-operate with

counterparts in the rest of the union? For many, many years it's

been done on an intergovernmental basis, but now as part of the

Lisbon Treaty there's a plan to bundle it up and make it agreed by

the EU decision-making structures, so no veto and the of justice has a

say in what is -- the court of justice has a say in what is going

on. The Home Secretary will say the Government is minded to opt out, as

is their right. I have two men here with me to explain their views.

Dominic Raft from the Conservatives and also Chris Bright the Shadow

Immigration Minister. Dominic, where is the Government thinking of

opting out? There has been a drive for some time now to move towards a

pan-European criminal code, backed up by a prosecution under the

jurisdiction of the European Court of Justice. This is a fork in the

road and an opportunity to say we want to co-operate on a base-by-

case basis, but we don't want to see democratic control, so what the

Government is saying we'll opt out on block and look across the piece

and do a cost-benefit analysis and we might opt back in if there's an

interest, but we should maintain democratic control. There's a huge

amount of co-operation. It's been proved to work. They've been able

to tackle people trafficking and paedophile rings and getting

suspects back from other countries here. Aren't you putting all that

at risk? I don't think so. We want enhanced, practical co-operation

and we have great co-operation co- operation after the Anders Breivik

atrocity and that didn't require control. We don't see the FBI

handing out dick tacks to the UK police. This is negotiated by

Labour and we should not put it aside, but see the cost and benefit

analysis. I've been through the 130 measures and we would be amazed

where we don't use them. Doesn't that sound sensible. You suggested

this is not what happens in the future. We have already been co-

operating and we have opted into many of these things up until now

and the Government's intentions, so far as I understand it, and it's a

muddy area, is to opt out of these, so where we have seen co-operation

on providing data perfect country to country on paedophiles, where we

have seen co-operation on driving disqualifications, or for that

matter on the arrest warrant, as far as I understand it, the

Government's intention is to withdraw. Or maybe to go back in

and in a sense the hoki cokey position is the worst of all,

because there is no clarity, when criminals in Europe, we would like

to send them back and we won't be able to do that. Once the deal is

agreed and the new opts-ins have been agreed, won't there be

clarity? Well it's an if. It's up to the council, one we opt out, to

decide how much that should cost us. It expressly says we have no rule

in deciding how much that costs. Secondly, there's the danger that

all right we have opted out of the ar rest warrant and we want to

renegotiate it -- arrest warrant and we renegotiate it, so what

happens if another teacher abducts a 15-year-old girl? Will we be able

to get a terrorist back from Italy? There is no agreement on the bits

to opt in and there's no certainty you'll get the opt-outs. You need

the agreement of the commission. It will be tricky. There are risks

alongside in here and going down the track towards an integrated EU

criminal justice system, but this is Labour's opt-out so if it

doesn't work there are questions to answer there. What I would say,

look at each measure on a cost and benefit fal cyst and ask yourself,

are these in British interests -- analysis and ask yourself, are

these in the British interests? Sharing data more broadly, DNA

fingerprinting, that is something that even the last Government

didn't opt us into. How many should we opt out? We should look at them

all in the round. How many? There are very few that I can see in the

list that I would want to out of opt out of. Driving

disqualification is really useful if someone is disqualified in

Poland, then they should be disqualified here and the rules

apply. There's a majority that says no tangible law enforcement in

Britain at all. There are others like the European Arrest Warrant

where we should reform it and go back in. We can't reform it

unlaterally. Thank you very much. As you can see, this is not

something you can resolve in five minutes. This will run and run. We

have got a long way to go. Technically the opt-out wouldn't

happen until 2014, so prepare for more. Well done for trying, anyway,

but no, consensus wasn't reached. Governments of all persuasions

always claim they're on the side of business and they are especially

fond of saying they're sticking up for the little guys. The coalition'

no different and believes the private sector and smaller

employers will be the ones to help to drive the recovery. To help get

things going ministers have announced loans and tax breaks

worth billions of pounds, but is that really the job of Government

or best left to people like, well, our guest today, James Caan? These

are the dragons. Five of Britain's wealthiest and most enterprising

business leaders. Dragons' den where business Gods pick winners

and losers. The Government's been playing its own version, putting up

millions of pounds in loans and tax breaks to help entrepreneurs get up

and go. London's Fashion and Textile Museum is more friendly

than the dep and it may be where one day Elaine may find her work.

She has created a business with a start-up loan programme. She has

been lent �2,000 and she has a mentor. I tried the bank and they

told me I had no chance. But the interest rates are so high. This

loan has put me in the position to open the doors to begin trading.

this age we have to agree that we have a high unemployment record and

if we can give them the mentoring and experience from within business,

matched with a loan, then it's a great initiative. So, what's not to

like? With, while this is good news for people like Elaine, it's our

taxpayers' cash being used to back their businesses. Is it our job to

say, "I'm in."? I don't think the Government should provide financial

support to small businesses. In the end the taxpayers are taking risks

if the Government is guarantee supporting and finance that banks

themselves should be taking. I think this is very dangerous.

start-up loan scheme is just one of about nine pots of money available

to entrepreneurs like Elaine. On the way, you have got the business

in the green banks and regional schemes, all of which add up to

billions of pounds in Government support for smaller firms. That's a

lot of eggs in a lot of baskets, but is it really the way to go?

fact you have got different pots all over the place is a huge

problem, because businesses first and foremost don't know how to

access the information on those pots. That's part of the problem.

Secondly, a lot of the pots are either time-sensitive or by the

time you recognise you can avail yourself of it, they've been

fulfilled, so there's no money left in that pot. Which is another

reason why some experts are sceptical about the wisdom of the

Government's approach to helping small business. The paradox here is

if the scheme did provide a meaningful amount of money for

small businesses then the taxpayer would be on the hook for very large

financial risks. If on the other hand, the schemes were small then

they won't help small businesses very much, so by and large I think

the schemes are bad in principle and will probably provide very

little help in practice. The rights and Government's attempts don't

probably bother Elaine too much. She's just happy to be up and

running, but they should matter to us, but, after all, it's our money

they're playing with. Lovely clothes. David Thompson reporting

there. James Caan is with us and we have been joined by Margot James,

the Conservative MP. We'll pick up on that point, should taxpayers'

cash be used in the form of loans to prop up businesses? I think

there's a definite place for Government support for new

businesses, start-ups to provide some support, because we all know,

we have been through a huge banking crisis and there has been a failure

of business loans from banks. are really filling in the gap? It's

an admission of failure that the banks haven't lent, so the taxpayer

steps in? The taxpayer has always had a role in supporting small

businesses. When I ran mine I had a little bit of support from

Government and it really helped us. I wouldn't normally look to the

Government if I was running a business still, but there's a role

and a lot of these things are loan, they are not all grants, so the

taxpayer, you can view it as an investment and I think that they do

provide a really necessary boost to some small businesses that can't

raise even when the banking days were good, it was still very

difficult. If you didn't have collateral when you were starting a

business, to get a loan in the traditional banking way, so I think

there's a role. Gl is that right, the businesses -- Is that right,

then? Should the taxpayer step in, because they sound like risky

enterprises? What I can say is I think we should applaud K

Government for taking some sense of leadership here. The heart of the

UK economy is small businesses. Britain is a nation of shopkeepers

and here we have a situation where we have so many young people who

are desperately looking to do something. They are looking for

support and I think the Government has put together a very creative

solution, with not just capital, but as you saw in the clip, it's

capital with mentors, so providing people with the opportunity of

building businesses, because if those people weren't doing that

they would be relying on Government They're not relying on the state

for a handout. They're doing something for themselves. How much

are we talking about? You're talking about �2,500 to get them up

and running. What we're not looking for, we don't want to own their

businesses. We don't want them to be dependent. As you saw in the

clip, you have an idea, if she produces her own dresses that she

sells to the local community, local shops, she starts to become self-

sufficient and therefore, we've almost created a job there. This

scheme could create thousands of jobs and to me, I'd like to applaud

the Government and say I'm glad we're doing something about it.

difficult is it to set up a small business? It's getting easier.

Compared to? To ten years ago. It is easier to register a company now.

We're reducing the bureaucracy and the regulations associated with

registering yourself as a limited company. I think in that sense,

things are getting easier. An interesting model for what the

Government is trying to do is the Prince's Trust. I used to mentor

young people with business ideas through the trust. That was only

available, it was a similar amount of money, �2,500uals the maximum

loan they could get. They've started 40,000 businesses. Are they

still going? Yes, they're doing well. They are quite rightly, they

focus on people from very disadvantaged communities or people

who, ex-offenders, you know people who need a second chance. The

Government is seeing the benefit and thinking we should apply that

to a wider group. One of the things that's key is not only are those

businesses going, but what's really important is 65% of those loans

granted to those young people have been repaid. So not only have we

created jobs and businesses but we've recovered that ininvestment -

- investment back. Are you in favour then, because credit, money

and lending is the problem, are you in favour of the Business

Secretary's business bank plans? am. I think I'm certainly willing

to give it a chance. I think it is a good initiative. On that scale, I

would prefer to see a private sector solution. You said it's a

good idea. Sorry I thought you were talking about the business bank,

that's �1 billion for a state-owned bank. That's slightly different

when I was talking earlier. idea being there are still state

intervention,if you like. Going back to the point there is has this

crisis in banking, it's not just credit drying up, it's also skills

being lost. When I was in business 20 years ago, you could go into a

High Street bank, you could meet someone who understood your

business and the market and had a specialisation in small businesses.

Then we had this whole you know, drift to central control and

everything being decided by a computer. A lot of those skills

have been lost. It's important that the Government recognises the need

to get capital into businesses and I'm willing to give the business

bank a good chance. OK. Margot James thank you very much and James

Cann. Parliament is back after the party conference season and there's

plenty going on. Tomorrow we expect to hear whether the computer hacker

Gary McKinnon will be extradited to the United States for charges there.

Wednesday is the first Prime Minister's questions for four weeks.

It's sure to be a lively one. David Cameron and Ed Miliband haven't

come face to face since Andrew Mitchell's encounter in Downing

Street with the police and all eyes will be on him. Thursday sees a

European heads of state meeting in Brussels and more discussions about

the planned European banking union are expected. The Scottish National

Party also begin their annual conference in Perth on Thursday. On

Saturday, the TUC hold their rally in London protesting against the

Government's austerity policies. Ed Miliband is expected to join the

march. Let's talk now to Iain Martin who writes for the telegraph

and Ben Duckworth from the tollal politics website. Welcome to the --

Total Politics website. Welcome to the programme. Andrew Mitchell will

be close to David Cameron how awkward will that be? Very awkward.

If he doesn't turn up to PMQ's and attending the House of Commons

again he might as well resign as an MP. It will be a fiery occasion.

Labour have the Prime Minister precisely where they want him on

this. This story is playing out brilliantly for the Opposition. It

keeps running. There are new stories every couple of days or the

latest twist. For Labour, it's perfect because it feeds into that

stereotype that the Prime Minister is so keen to get rid of of the

Conservative Party. It's just there. He's a walking party political

broadcast for the Labour Party. Prime Minister will not be keen to

seed his Chief Whip because of media pressure. The talk around

Westminster is that won't happen. As Iain Martin has outlined you

will have this drip, drip effect, if he's still there. Do you think

he will still be there? My big question about it is how does he

possibly have authority over the MPs he's supposed to corral to vote

for the Government. The MPs at the conference last week doing

impressions of Andrew Mitchell. It's already a difficult generation

of MPs to whip as his predecessor found out. When Andrew Mitchell

calls you into his office for a meeting without coffee and what's

going to be ringing around your head, can you imagine that scene in

Downing Street when he has lost his temer -- temper with a couple of

policemen. Sounds like a lot of fun in terms of party politics. Looking

at Europe the issue that won't goi away for David Cameron, no mat

whaer he says, we saw the papers, the reports of friends of Michael

Gove and Cabinet members who say they would like to see Britain

leave the EU. Still a headache. is a headache for him. He's trapped

in a sense. He has, he's draining support about six or seven or 8% of

the national support. He's draining support to UKIP and some activists

and donor money. But it's very difficult to get those people back

because they feel they have been promised things before in the past

by David Cameron on Europe and that they can't believe a word that he

says. What Gove has done very interestingly is to open up a whole

new front that suggests that Cameron realises he has to shift a

bit, that he has to, for renegotiation, which he keeps

talking about, for that to mean anything, the Tories have to have

this ultimate sanction of being prepared to consider leaving if

they don't get the renegotiation they want. The problem is there has

been this repositioning,if you like, Ben Duckworth, on Europe, but it

marches MPs back up to the top of the hill and nothing much happens,

he's going to be in big trouble. Yes, David Cameron's MPs don't

trust him on Europe. They believe he overpromises. There's very

strong language at various EU summits, but in the end they

doesn't deliver. Europe is particularly messy because the

unique way the European Union operates, where for example today

in Theresa May's statement about eawe law and order, she can only

talk about what the Government is minded to do because in 2014 it all

has to be negotiated again. In another sense, is the fact that the

Euro-sceptics on the Conservative benches aren't one united force.

Instead it's more of a mood towards Europe. There are various ideas

running around about how exactly David Cameron should deal with this

from his backbenchers, for example Liam Fox wants a time table then

referendum. Other MPs would only be satisfied with a definite date for

a referendum. It makes it difficult for David Cameron to control that

process. Also the mood of MPs towards him on urine. And what are

Britain's chances of renegotiating key parts of our relationship with

Europe any way, when you could argue that we don't have that many

friends round the table and there has to be some sort of unanimity in

terms of voting? That's true, but even go back one step beyond that.

What does renegotiation mean? What do those who advocate renegotiation

actually want? What powers do they want returned? On the single market,

do they want Britain to be governed by the rules of the single market

but then opt out of the decision making processes which will come

from ever greater, closer union, which the 17 members of the

eurozone are pushing towards? It's a very complicated, difficult

question. My instinct on this, however, is that Cameron comes out

of the Tory party conference in pretty good shape, actually. I

think it was arguably the best speech of his leadership. He's

bought himself some time and some space to operate in all of this.

It's not inconceivable, despite the difficulties he has, that actually

Europe and doing something big on Europe could be his way back into

the game and could be a way of him fighting and winning the next

election. We'll end on that prediction, Iain Martin and Ben

Duckworth, thank you. I've been joined bit Deputy Leader of the

Scottish Labour Party party Anas Sarwar, Lib Dem MP Lorely Burt and

Chris Bryant for the Conservatives. In the last few minutes, we can sho

you pictures, David Cameron has arrived in Edinburgh for a meeting.

There he is. Meeting with Alex Salmond to discuss plans - there

they are, shaking hands - for a referendum on independence for

Scotland. It's expected the two men will appear for a signing ceremony

just over an hour. Going inside there, Alex Salmond and David

Cameron. Let's discuss this historic moment with our panel. Do

you see it as a historic moment? is an historic moment. This will be

the biggest decision the people of Scotland have had to make for 300

years. Certainly the biggest decision people will make in their

life Times. I'm delighted we finally seem to be getting past the

process arguments and hopefully get on to the substance of the debate

and give Scotland the honest, transparent debate it deserves.

Before we move on to the substance. Let's dwell on the question. I

talked about that with Derek Mackay from the SNP. He says they've got a

question. Scotland should be an independent state, agree or

disagree? The interesting thing is Derek Mackay's version was

different from Alex Salmond's version. It is. But Scotland should

become an independent state, would you sign up to that question?

Salmond has his view of what the result to be. I have my view. It

shouldn't for politicians to decide what the question is. Let's leave

to to the Electoral Commission. Government is deciding the wording.

The Electoral Commission will judge whether it's fair. Absolutely. The

Government have put together a proposal about what the question

should be. The Electoral Commission tests that question and comes back

with process. We should respect the Electoral Commission. We can't have

Alex Salmond both the player and referee. The question then will be

chewed over when it's finally agleed. Looking at the polls, they

have a mountain to climb, the SNP. We talked about that. They are

confident they can shift that number because they have two years

to do it. This time last year support for independence was at 38%.

Now it's 28%. That's not because of the constant process arguments,

it's because every time they've been challenged on the details they

haven't come up with the answers. Through yut their existence the

answer to every question has been independence. Now the question is

independence they don't have answers to the questions. Whether

it's on currency, whether... They know what they want. They want to

stay part of sterling. That's their answer there. They will have then

flexibility over fiscal policy if not over monetary policy. Currency

is a perfect example. They say the Bank of England will be the lender

of last resort and weeds' have the Financial Services Authority --

we'd have the Financial Services Authority looking over Scotland.

They say we would have a seat over the Monetary Policy Committee, they

don't automatically get a seat. And in independence do you really want

a foreign country setting your interest rates, and borrowing

limits. What about the agreement to have 16 and 17-year-olds vote?

a strange one. You're talking about rising 18 here. We've seen them on

the canvas cards knocking on doors, who will be 18 at the time of the

election. If you're talking about some 16 and 17-year-olds that will

be able to vote and some that won't. That is, A, I think it's unfair.

Are you principally against the idea of giving 16 and 17-year-olds

the vote? No. I think... A lot of your colleagues are. Sure. That's

their view. I think it is possibly even open to legal challenge if you

give some 16 and 17-year-olds the vote and some not. This is a

referendum two years down-the-line here. I would have thought that it

was within the wherewithal of the Scottish Parliament to get this

sorted. Whether Alex Salmond thinks having them vote in the referendum

is to his power or not. I hear it's those that were teenagers when

brave heart was on television that are likely to support independence.

You are I presume in favour of 16 and 17-year-olds voting in this and

would like to see that extended. Yes, it's SNP policy. That's why

it's on the agenda now. Certainly it's something that we've advocated

for a long period of time. I mean, basically, people, you know kids at

16 they get all their citizenship training and then they're told, oh,

sorry, patronisingly, you're not responsible enough to vote now.

Lord Adonis had an article recently where he was saying it will get

young people into the habit of voting if you get them early and

the people, I know a 66 who I trust more to make a political decision

than some 16-year-olds. If 16 and 17-year-olds are allowed to vote,

then surely you're not going to be able to have another election in

Scotland without allowing them to vote? Our argument has been if you

have it for one election it should be the case for all elections. You

suportd of principle. I think both governments need to work together

to ensure 16 and 17-year-olds have the vote. I don't think it's

credible to say only some of them will have the vote in the

referendum. That's open to legal challenge. The issue is that it's

not just about the voting age, all of us as politicians have a much

bigger role to do about getting more people engaged in the

political process and frankly, most people just don't see politics as

relevant to their lives. Do you accept, though, that if, and the

polls at the moment point in that direction, that Alex Salmond

doesn't win a Yes vote, we don't know, he doesn't win a Yes vote,

but enough people support independence in that vote that

there will be undoubted pressure for more powers to be devolves to

It was despite the SNP. They didn't take part in the convention. Within

two months of a Labour landslide in 1997 we had a referendum and we

delivered it. Answer the question on devolved power? The Scotland Act

was passed which gives powers to Scotland. The only vote that kills

devolution is the people vote for separation. I would say, the SNP

have bounced into it. Ironically, the clue is in the title, they seem

to being bounced into this in the new year. David Cameron came out

and sort of kicked this off. It seems strange to me that Alex

Salmond didn't want to talk about a referendum. David Cameron started

this. Here we are now and thank goodness there is one question. We

didn't want the muddle of questions. Just one question. You think David

Cameron won on this issue, even though Michael Forsyth says he lost

and Alex Salmond got his way? a separate Scotland or United

Kingdom. The Prime Minister and the Government will make a very clear

case for the benefits of a United Kingdom. In the end, he's in a win-

win situation, surely even if he loses that vote he'll get the

devolved powers? I think he's in a lose-lose situation in actual fact

and I still bear the scars on my back of another referendum that we

had about fair votes. I think David Cameron is quite good at

referendums. As we all know, ideas come and go in politics and it

wasn't so long ago we were talking about brownedary changes. These to

the size to the MPs' constituencies were favoured by the Conservatives

and it seemed like they had the support of the Liberal Democrats,

their partners, but then Tory -- backbenchers scuppered reform and

yesterday on the Sunday Politics Grant Shapps indicated to Andrew

that despite this he hadn't completely given up. The vote has

to take place next year in or around October, when we know the

final shape of the boundaries. It has to come back to Parliament and

there will need to be a vote through the lobbies. Now, a year is

a long time. A week's a long time and a year is a live time. You are

still for the votes? Yeah, because it was in the coalition agreement

and Nick Clegg came out strongly and said it was base for the basis

-- right for the basis of fairness, but I'm putting in place a strategy

for us to win the election regardless. Grant Shapps, the party

chairman. Wishful thinking? I think so. Certainly, I don't think that

the Conservative coalition colleagues can pick one thing they

want to support and pick another. With Lords' reform the problem is

balance. What we will be talking about is having fewer elected MPs,

but opening the floodgates for more unelected peers. Can you

catagorically say that it's off the agenda, Lib Dem support for

boundary changes? It's not on mine, but it's also above my pay grade. I

can't imagine it. Really, you're skewed? -- screwed? I'm sighing

deeply. I'm so sorry, but the coalition is agreement, we'll

deliver a referendum on alternative vote in return for boundary changes.

We passed the legislation. When Nick Clegg threw the toys out of

the pram and I'm one of the bad boys on the naughty step voting

against the Bill because it's a terrible piece of legislation. That

was the deal. People are talking about the wider changes. You can

repeat it as many times until you're blue in the face, it doesn't

sound like the Liberal Democrats will be persuaded so it's over? Do

you think Grant Shapps is on a hiding to nothing basically?

because at the end of the day, when the toys left the pram the Deputy

Prime Minister didn't ask to repeal the bit of the act that set the

boundary commission to its work. It's finishing the work today. We

get the final recommendations for the seats and we should put it to

the House. Instead of all the talk about whether it's an advantage or

not, it would be a slight advantage to us, but at the moment the

advantage is to the Labour Party, so we're looking for parity and

what we should do it put it to the vote in the House. Nick Clegg has

already voted for these changes for equal-sized constituencies. I have

74,000 people in my constituency and there are MPs with 54,000.

think the Liberal Democrats signed up to the principle, but they're

not going to go ahead because they feel you broke your end of the

bargain. Can they be bought with the offer of state funding? It's

not for me to call it. Would it be warning if you were going to get a

considerable amount? The party is cash strapped, so would it be worth

saying you will back the idea of boundaries if you get the level of

funding? I don't think so. The coalition agreement is a balance.

We have had to vote for things which we would never have voted for,

had we been in charge. That's if we had had an overall majority. So,

the Conservatives have taken something out. There may be other

things they can put in, but I honestly can't think what that

might be. Why are Labour against it We talked about 16-year-olds

getting the votes to engage young people. This debate is a perfect

example why people are disengaged. Is Labour's position so moral?

give you an example. You have a Government trying to gerrymander

the constituencies so it gives them a greater chance of winning the

next general election and then you have grubby deals to do with money

to see if they can overcome that process. I think it's disgraceful

and I think everyone will think it's an out-of-touch Government.

Labour says it's in favour of constitutional reform. You are

doing this because you want to prevent the Conservatives having

those extra 20 seat they think they'll get if the boundaries are

withdrawn? No, it's not that. Lords' reform is something that

everyone is agreed on. There is an argument between the Conservatives

and the Liberal Democrats. On the boundaries, there's a fixing of the

seats to help the Conservatives win the next general election. It

doesn't help the Liberal Democrats. It's a gruby deal purely for the

Conservatives. Alongside that, you are moving to single-voter

registration because they knows areas where you are less likely to

have people register where there is more deprevation and they are more

like to be Labour Party seats. takes more votes to elect a

Conservative MP than a Labour MP. Even more for a Liberal Democrat.

I'm not intruding on that private grief. Whether you are a young

voter or middle aged or older it's not a fair situation and the House

of Commons voted clearly to bring equal-sized constituencies and

we'll bring it back before the House. All right. Thank you all

very much. Don't go away. A consultation has been announced

today in MPs' pay. The Independent Parliamentary Standards Authority

or IPSA, will look at pensions, pay and conditions. Some of the

suggestions have included lower salaries for MPs who take on second

jobs and an end to the final salary pension scheme like elsewhere in

the public sector. It's now open to members of the public to put

forward their views on what they think MPs deserve. That will make

interesting reading, I'm sure. Firstly, we'll take the Irish use.

What is your response that you could be penalised for having a

second job? Not many of my colleagues actually have second

jobs. If you for instance had a second job, you would be happy to

take a lower MPs' salary? Yes, I don't see a problem. I think it's a

full-time job so it's right that MPs shouldn't set their own pay and

conditions and people from outside should decide what MPs are paid. We

should concentrate on trying to create a fairer and more prosperous

country. Do you have a second job? No. Do you have a second job?

Certainly not. This is a seven-day- a week job. You are all well paid.

For me, it's a seven- day job and you have to juggle everything. I

don't know how people have time to do other things, but that's a

matter for them and their constituencies. And should they

take a pay cut on their MP salary? I'm sure they'll respond to the

consultation to tell IPSA what they think. Here's a radical idea, maybe

do away with IPSA and pay MPs the sum that they get for their salary

and staff and allowances and then we can save the taxpayer a lot of

money instead of this great bureaucracy that comes around it.

Would could argue that that was as a result of a scandal which

occupied minds for a very long time. The suggestion that MPs should

receive a pay rise, do you think you're York the money? I think so.

I think the MPs are worth the money they're paid, but let's be honest,

I'm not one of these people who says I left a six-figure job to

come to the House. I'm earning more than I've done in my career, but

still earning twice or three times more than most of my constituents.

It's a well-paid job by those standards and it's the best job in

the world. What about a pay rise, would you say yes to that?

shouldn't be for MPs to say what their pay is. Everybody who does

their own job will think they do a great job and get paid for that.

It's an honour to represent the people and it's for norges to

decide. That's why we got in -- others to decide. That's why we got

in trouble in the first place. We should let others decide what pay

we get and expenses and what our conditions are and what our

pensions are, it shouldn't be for us. One of the argument was that

the expenses scandal blew up in part because people felt that that

was part of their salary, wrongly. Would it be better if they were

just paid a bit more? If MPs justified their existence a little

more in the way outlined by you, would it be easier to persuade your

constituents to back a pay rise? Well, it's really difficult to say.

I'm working with IPSA. They are doing a consultation at the moment

and I think a lot of people think that we just sit around here,

recess comes and we all go, we'll go off to our villas. It's not like

that. If people understand the work we do and the hours that we do and

the responsibility that we take, there might be less critical

thoughts of the fact that yes, we have a reasonable salary. When we

go into schools and we ask the students what do we do, we get some

hilarious answers back, are you a mayor or a governor of the school.

People think when we're on recess exactly that and I think the media

have a role to play. After recess the media run the lines, "MPs

return to work today." As if we are not working in our constituencies.

Briefly, on pensions, they are described as gold-plated schemes

because of what is happening elsewhere. Should it be brought in

line with other public sector pensions? If you look at the public

sector with the pay freezes and record levels of unemployment and

inflation rising and not with wage increases. People are feeling the

pinch and the last thing they want to see is MPs talking about their

own pay and their own conditions. Leave it to external bodies. Very

important, we have to do our quiz. Time to give you the answer to it.

Do you know, you three, which book it is? Moby Dick, Winnie the Pooh

or 50 Shades of Grey or Winnie the Pooh? Is it Noddy? I hope it's

Winnie the Pooh. Moby Dick. We'll hear David Cameron. When he had

departed Ahab stood for a while and then, as had been usual with him of

late, calling a sailor of the watch, he sent him below for his school

and also his pipe. There you go, David Cameron. Well done, it was