07/12/2012 Daily Politics

Afternoon, folks. Welcome to the Daily Politics. The IFS warn that

there is a �27 billion hole in the public finances looming for 2017/18

and it will have to be filled by tax rises and more spending cuts

the other side of the general election. Happy days! We'll have

the details. As Starbucks wakes up, smells the coffee and says, OK,

we'll pay more tax. Has justice been done? Or can we all get to

decide the tax we will pay? A leading businessman takes on UK

Uncut. Would an independent Scotland need to reapply for

membership of the EU? Alex Salmond says no. The Scottish Secretary

says yes. So, it seems, does the EU Commission. We'll talk to both

sides. And, after one of the most moving questions in the history of

Prime Minister's Questions, Ann Clwyd debates the state of nursing

care in the UK with the Royal All that in the next hour. And,

with us for the duration, two shrinking violets - meek Mary Ann-

Sieghart, columinst and chair of the Social Market Foundation - and

shy and retiring Peter Hitchens of the Mail on Sunday. We will be

lucky to get a peep out of them the whole show. Now, it is a winter

tradition, up there with hanging out the tinsel and sinking a warm

glass of mulled wine. The day after the Autumn Statement, the Institute

for Fiscal Studies tears the Chancellor's figures limb from limb

until the true, horrible story emerges. It is never a pretty sight

and this year is no exception. Gemma Tetlow, programme director

from the IFS, joins us with the gory details. Of the this 27

billion. What you're saying is, of to meet the targets that have been

sent out, after the election - the Government will have to find

another 27 billion ING cuts or tax rises. Is that right? What the

centre yesterday, the Chancellor set out a plan to meet his fiscal

mandate by the end of 27/18. In order to do that, he needs to

implement the additional spending cuts. If you want to avoid cutting

departmental spending further, he would need to find �27 billion.

did you know? We have no idea what will happen next it in the economy.

How do you know what will happen in 2017/18? There is clearly a huge

amount of uncertainty about what will happen in the next few years.

That is always the case - particularly so at the moment. It

is important the Government has an idea of what will happen in order

to plan public finances. It could turn out things are better or worse.

The current government may not be in power by 2017/18. Maybe not

George Osborne, Danny Alexander or Nick Clegg's problems. They have so

set out plans at the moment and have said they will set out plans

for the following year, which would take us through to the point of the

next general election. What happens in the next parliament will still

be an clear and will depend on who comes into power. -- not clear.

the cuts on the horizon? Even if the economy returns to growth of

3%? They do think there is a significant output gap remaining by

2018. There was still be scope for growth beyond 2018. If that was not

the case, further cuts will be required. It is clearly very

uncertain. Coming a little closer to where we are, it is my

understanding that for two dozen and 16/17, part of which will fall

under the -- 2015/16, part of which will fall under the cover and --

the current government and then we will have a general election.

set out an additional �4 billion worth of welfare cuts. They said

the remaining spending cuts will come from public services. They

said the same protection for some departments would continue, as we

had in the current Spending Review. That does mean the squeeze on the

remaining areas will be harsher than the average. It has been more

harsh over the current four years. It will squeeze the same

departments. Every time the Chancellor appears, he announces he

is going to borrow more than he had previously thought he was going to

borrow. He has told us he will borrow more again in the Autumn

Statement. Why should we believe these figures, since he is

consistently wrong? Since 2010, we have seen a consistent pattern of

economic growth underperforming. That is feeding through into a

worsening outlook for the public finances as well. It is extremely

to the will to know what will happen. That is essentially what

has been happening over recent years as problems in the eurozone

have been causing further weakness in the UK. Do your eyes ever glaze

over at all these figures? Personally, I find them very

interesting but it is a lot to get your head around. Sadly, so do live.

Bankia very much for joining us. -- thank you very much. When you stand

back from the Autumn Statement and look at the figures - borrowing,

debt, growth going down - the continued squeeze on living

standards into next year, it is remarkable he got the press he did.

His entire plan is failing. He is not cutting the deficit. He is not

cutting debt and will probably lose the sacred AAA credit rating that

he has been doing all this for. The whole point was, I have to do this

or the financial markets will take flight and it will be a disaster.

He will lose his AAA credit rating even though he has done all this

and he has not reduced the deficit all got debt down by the time of

the next election. Fiscal conservatism, debt reduction, that

was the core of the economic strategy. Are the wheels coming

off? It was fake to start with. There has been an incredible

increase in borrowing and the debt is continuing to rise. We are a

fast, welfare junkie, unable to get itself off enormous taxes. Spending

is falling into is just tax revenues are falling as fast and

the deficit is not shrinking. falling relatively. There is no

serious attempt to change the nature of the country.

Government's strategy, or whether it is right is another matter, the

Government inherited a situation where the state spent over 50% of

our national wealth on the trajectory they're trying to hit,

it goes below 40%. That is a huge cut. If it ever happens. At the

moment where the country is too dependent on state spending. It is

not a crisis out of which we will emerge and the cash tills will

start to ring again. This is the moment at which we begin to

experience serious economic decline. There is no end to this. If you are

going to cut state spending, and you do need to do that, you need to

do it at a time when other parts of the economy can pick up the slack.

There is consumer spending, business investment, state spending

and exports. Exports are shot to hell and businesses are not

investing. Consumers are not spending because real incomes are

being cut. It is a terrible time to be cutting government spending. It

reduces growth and tax revenues. Hillary Clinton has arrived in

Belfast this morning over decisions to take down the Union flag, which

flies above City Hall. And last night came a reminder of the threat

of dissident Republican violence with arrests after the discovery of

a bomb in Londonderry. Hardly the ideal backdrop to the high-profile

visit. What is the latest on the ground of the unrest, sparked off

by the argument over the flag? is right. There are separate things

going on. On the one hand, there is the loyalist unhappiness about this

decision to dramatically restrict the flying of the Union flag from

City Hall. We saw more trouble last night related to the protests in

Ballymena. Several vehicles have been damaged and two young men have

been arrested. We have also heard of a death threat which has been

made to an alliance Party MP. The Alliance party was involved in

voting for this decision to restrict the flying of the flags.

Naomi Long, the MP in question, who has been threatened. Police have

advised her to leave her home. She will not be doing so. She is

determined to continue in her democratically-elected role.

Obviously, a great deal of concern about that. On the other side,

about the dissident republicans and the discovery of a viable

improvised explosive device yesterday evening. Is it expected

to get worse? It is difficult to say. There is concern on behalf of

the police that it well. They are hoping it will not. They are urging

people from all sides did think carefully about what they're doing

and where it might be heading. -- to think. Hillary Clinton, one

imagines she will have a similar message. She is meeting Peter

Robertson -- Robinson at the moment. Is this a farewell tour? Is it the

start of her campaign for the presidency in 2016? I do not think

people are saying all that much about it. She is not here for very

long - just a few hours. One does wonder whether it is not kind of a

valedictory visit, designed to put into the minds of people the

success her husband a tutor in Northern Ireland and to put that

fresh in the minds of others. As for the visit, it has been

overshadowed by these new tensions - renewed tensions. It is well

worth pointing out that we are by no means where we were before the

peace process started. It is a very different landscape from the one

she initially visited years ago. What a ill-thought so on mess?

Interesting about the flag. -- what are your thoughts on this? If you

surrender, you have to take your flag down. On government buildings,

it has been illegal to fly the Union flag since 2000. The Hall in

Belfast is falling into line with the rest. The flat poll is bear on

government buildings in Northern Ireland. -- the flagpole. Those are

the days on which it can be flown - state birthdays. In 1998, under

pressure from the Clintons, this country surrendered to the IRA.

They wanted a united Ireland. will get one. All that stands

between the transfer of Northern Ireland and the centenary of the

Irish Free State, which would have been in 2016... All it takes is for

that referendum to happen and the boat to go the way the Republicans

want. If there is a referendum, it is up to the people of Northern

Ireland. Do you think the majority of people will vote for a union?

Democratic change and the blatant weakness of the British connection.

The problem with Northern Ireland has always been that one group or

the other dominates. You are seeing, since the beginning of the process,

putting down riots involving people waving illegal Union Jacks. Peace

has not been achieved. It is much more juice -- peaceful than it was.

If you are an individual, living in Northern Ireland, you face a lot of

criminal intimidation from the crime families, to which we

surrendered the province in 1998. It is hugely more peaceful. That is

why we are surprised to hear two devices have been found. It is a

surprise and it used not to. have to see that what has happened

is it is much lower level. Intimidation and hostility... For

people living there, it is quite frightening. Is it any different

from the tough areas of Glasgow and Manchester? It is. There is a

sectarian gangster element. The idea that republicanism is disarmed

is absurd. Who do you think these What happened here... The Clintons

fixed on the Irish issue as a way of getting back to working-class

Catholic vote which they had lost over abortion. They had no interest

in Ireland, it was a cynical exercise in American domestic

politics. Right. Up Now, the coffee chain Starbucks is

in giveaway mode - excellent, mine's a skinny latte - but the

handout in question is cash not coffee after they caved in to

public pressure yesterday and said they'd pay more in tax over the

next couple of years. The company, along with other multinationals

like Google and Amazon, have faced a public outcry over the amount of

corporation tax they pay in this country. Starbucks says it will pay

"a significant amount of tax during 2013 and 2014, regardless of

whether the company is profitable". Starbucks' troubles began after it

was revealed that in 14 years operating in the UK, they have only

paid �8.6 million in corporation tax despite UK sales of nearly �400

million in 2011 alone. That was all perfectly legal, but it came

against a background of a tax avoidance clampdown that George

Osborne has said can raise an extra �10 billion. The Chancellor's

sidekick, The Chief Secretary to the Treasury, Danny Alexander, was

so outraged that, along with many other customers in the UK, he was

boycotting the chain. Starbucks defended themselves by pointing out

they operate 750 stores across the UK and they employ 8,500 people.

But yesterday they threw in the towel, offering a windfall for the

Treasury - should they accept it - of �20 million in extra tax over

the next two years. But that won't be enough for campaigners UK Uncut,

who plan to go ahead with protests in the Starbucks coffee shops this

weekend. With us to debate the great coffee climbdown is Andrew

Perloff, chairman of property investment company Panther

Securities, and Anna Walker from tax campaigners UK Uncut. Welcome

to both of you. Clearly, Starbucks must have felt, obviously they are

under pressure from public opinion, but they must have felt it is

amazing we got away with paying so little tax we better cough up some

more. Asking my opinion? Yes. People talk about tax. Really, they

are talking about corporation tax, which is a small slice paid on

profit. Starbucks pays between 10 and �15 million property tax on

their shops. Whether they make a profit or not, whether they sell

one cup of coffee or not. We all do. We pay council tax, VAT, national

insurance, it doesn't let us off paying income tax. Her no, but they

still paid 10 to �15 million, they pay taxes on the payroll, a huge

amount, they employ 8,500 people, they probably create employment at

50% of that on all of their suppliers, who either make money

and pay tax, they pay VAT. Let me stop you. They don't pay VAT. We

pay VAT. They collected four HMRC. Every company does this. Costa

Coffee does it, other British companies for up they also pay

corporation tax. No, their benefit to the country is the amount they

come out -- create for the country. You have to say, well, what would

happen if they are not there. People would go to other coffee

shops. Can't necessarily. shortage on the high street.

There's 100,000 shops vacant in the high street. These people take

properties, spend money, pay VAT on the shop fitting, create jobs,

create business. It is spread around the economy. Let me bring in

UK Uncut. You haven't really won because it is almost a medieval

situation where the powerful barons of business can go to the

Government and negotiate how much tax they will pay as a like the

medieval landlords did with the king. I agree completely and that

is why we are protesting against a box tomorrow. It is not up to

Starbucks to pick and choose how much it wants to pay. This �10

million it is claiming, promising, it will pay, is essentially a �10

million PR stunt. It will probably come out of the PR budget. Her I

imagine so. We are calling for the Government to clamp down on tax

avoidance, as it keeps saying it will, but it is not actually taking

any action whatsoever. Starbucks has not promised to change the way

it operates globally or in the UK. It will still be siphon in its

profits that it is making off the back of its sales here out of the

UK and claiming it is not a profitable company. All Starbucks

is doing is following the rules. I would suggest the real villains are

the politicians across the road from here who over the years have

agreed to things that allows Starbucks to be able to do that,

have made the rules so complicated that you spend a ton of money on

expensive accountants and you will find ways to do it. If the system

was simple, no deductions, no loopholes, they would not get away

with it. Absolutely and that is why we are calling on the Government to

complete a radical reform in tax legislation. It is this government,

the last government, which did create these loopholes that

multinational companies like Starbucks and Amazon and are

exploiting. That is what is wrong, particularly at a time of economic

crisis. What do you say? You have not said anything sensible. That is

no change here! They create jobs. The biggest problem in this country

is we have too many unemployed or they create business, they are

based in property. I won't talk about the internet, they are

property-based. They have taxes they can't escape from. They have -

- we have one of the highest property taxes in the world.

you saying no company should pay corporation tax because they are

helping the economy in other ways? I'm not saying that. Whether they

expand or not, they choose. If they stopped expanding their shops, they

would probably go into profit quicker, but by expanding and using

the profits they are making, which goes back into expanding the

business, they create more employment which creates hidden

benefits. Anybody could say that. It is only the companies that pay

for the politicians, the civil service and all the unemployment

benefits, it is only paid by the businesses that create business.

such piety. Why is everybody so keen on paying tax themselves to a

government that is constantly being exposed as incompetent and

wasteful? It throws away large amounts of money on things we don't

like and don't want. It can't run a decent school system, transport

system. Why are we so keen on paying tax? Even Labour politicians,

given the chance to avoid legally, a bit of inheritance tax on their

parents' houses when they inherit them, will do what is necessary to

get around paying tax. Almost anyone with the opportunity to pay

next tasks will take it. Who do you think will end up paying if

Starbucks pays more corporation tax? Their customers of Starbucks.

More money from your pocket into the hands of an incompetent...

There's no shortage of coffee shops. Starbucks is the one not paying the

tax. What do we get for the tax we pay? What do we get for tax? Let's

think about it. Schools... At bad schools. Patricia schools, some of

the worst schools in the advanced schools. -- atrocious schools.

need schools. We need nurses. is a really important question. To

say that nobody should bother paying tax, I don't... We should be

sceptical about tax. Tax pays for roads and rubbish collection and

education and nurses and people to survive. He is and there and

unfairness... Excuse me. We've heard that many times. Isn't there

and unfairness in the situation where British-based competitors of

Starbucks, British-owned, because they can't do the international

jiggery-pokery that Starbucks is doing with royalty fees being

charged so it depresses profits, they are a disadvantage in

competing with Starbucks. That is rubbish. Why? Do you think they

don't do their own accountancy arrangements? Excuse me, at the

British coffee shops pay a lot more tax than Starbucks. Costa Coffee is

one example. The depends. Of a expanding? Yes. They are. They are.

I don't know, you're saying that. Do you think they are consulting

with lawyers to see if they can't pay less? People are always trying

to pay less tax. You talk about... You say they are not paying their

tax. They are paying a minimum corporation tax. If there should be

anything payable. They are not breaking the law. No one has raised

that issue. Another thing, the Revenue have got the cleverest

people in the country working for them, investigating. They have been

cut. No no. Yes, by �3 billion... They have got whole sections

dealing with complicated corporate affairs. If they think for one

minute a company is cheating to a degree that is unacceptable, they

can close it down in a day. They don't do that. If the rules are

wrong, I accept, it is for the Government to change the rules. If

they play by the Rolls, that is fair. I need to quit on this

agreement. It is taxation by media. A witch hunt by 90% of the people

who have not the slightest idea how it works and the benefits they get.

Starbucks is interesting... We are running out of time. Don't start.

They employ a lot of young people. You've already said that. By on a

minimum wage. I think we will stop there. If the rules are wrong, they

should be changed, we are agreed on that. But not Peter.

Now, Prime Minister's Questions is usually an entirely raucous and,

you might say, childish affair where the baying mob wins out every

week. But occasionally, a question comes that rises above all that and

silences the House. It happened on Wednesday when Labour's Ann Clywd,

whose husband died in October after NHS treatment which she compared to

that of a battery hen, stood up to put a question to David Cameron.

Have a look at this. Ann Clwyd. Universal healthcare

system free at the point of delivery is what the overwhelming

majority of the British people want. Something which I remain firmly

committed to. However there are increasing complaints about nurses

who fail to show care and compassion to their patients. What

exactly will the prime minister do about that? The honourable lady

speaks for the whole house and the whole country in raising this issue

and I know how painful it must have been with what she has witnessed in

her own life and with her own family. I am, as she is, a massive

fan of the NHS, an enormous fan of the fact it is free at the point of

use, you don't produce a credit card in hospital and my own family

has had extraordinary care through the NHS. But we don't do the NHS or

nurses any favours if we don't. Elk there are very real problems in

parts of our health and care And Ann Clywd joins me now, along

with Janet Davies - the Director of Nursing at the Royal College of

Nursing. Many people will have seen you on Prime Minister's Questions.

It is a difficult subject for you. What happened? What I saw was lack

of compassion, lack of care, dismissive and us, lack of people

to talk to. I was ill for about four days before my husband died

and I was not able to going. I rang up every day and was told he was

doing well and had had a good night. On the Sunday - the day before he

died - the staff were said to make on the telephone, we see no reason

why he should not be home next week. I thought, that is fine. On Monday

morning, a few hours later, I got the call from a hospital saying he

was very ill and he had got an infection - pneumonia. As soon as I

heard that word, I knew pretty much what that meant. I had been

dreaming at night about him being cold. The days I had been with him

in A&E for 24 hours, it was very cold. I kept asking when he would

be put on a ward. I stood by him a second day in A&E for two-and-a-

half hours. You could not text from inside because there was no signal.

I asked my PA to ring an administrator to try and get an

administrator. Two-and-a-half hours later they came and he was put on a

a respiratory ward that nine. I developed a respiratory infection

and they told me not to come in. I was ringing once a day to find out

how he was. I felt ignored. I felt he was ignored. Let me come on to

that. There was a system failure here, in one situation. I've got

the impression you also felt the care he received was much lower

quality than it should have been. just did not see the personal care.

On the Monday before he died, after a went into hospital after having

that call, I sat by his bed from 2:30pm until 10:30pm, I only saw

one round. And kept trying to stop someone in the corridor and say,

why is my house when not on intensive care? The answer was,

there are lots of people worse than him. I asked another question and

was brushed aside. I do not expect special treatment but we knew our

concern for someone who is very pale, there should be some

appreciation of that. -- very ill. I was on the Commission for the NHS.

In 1979, we received much evidence expressing concern about declining

standards of care. The RCN claimed that standards had been put at risk

because of financial constraints, increased workload and manpower

shortages. In hospitals they submitted neglect of basic nursing

routines. This is 30 years ago. me bring in Janet Davies at the

Royal College of Nursing. Is there something going wrong in the

culture of Nursing which causes these things to happen? This is a

terrible story. As a nurse, I find it very distressing rummy his

stories of poor nursing. Why does it happen? The Prime Minister said

there is no silver bullet. It is a complex situation. The majority of

nurses do a very good job. They are passionate about their roles and

their careers. There are situations when it goes wrong. Nurses come

into nursing because they want to nurse. It is not an easy course and

something goes wrong with some nurses. Not in recruitment but

something later on in their career. We need to pinpoint what goes wrong.

They are a multiple reasons that we can see. The first one is, the

nurse themselves. Usually they are tired, overworked of May maybe the

wrong person for the wrong job in the wrong place. Secondly, they

have to have the support, culture and resource to do their job

properly. They need the right attitude of managers, support

around them, the right equipment and training. We are seeing too

often that nurses are well qualified. It does not stop. You

need a freshers and time - time to reflect. -- refreshers. Have we

made too much of the need... We have made it almost a degree

profession now? Have we put too much emphasis on that and not

enough on the attitudes and compassion and the attitude of the

individual to do this difficult job? A mean look at this and when

we talk to student nurses, we rarely see a case that involves a

student nurse. -- when we look at this. We hear stories like this

again and again. We do not hear stories where everything goes right.

People acknowledge it is a minority problem but it seems to be a

growing minority problem. recognise it is a problem and we

certainly need to make sure it does not happen to other people. I agree,

the majority of nurses, I'm sure, care. I have had hundreds of e-

mails since I decided to go public. It is very difficult to talk about

and I did not really want to do it. Hundreds of letters! Somebody had

said, a doctor said in an article in the Telegraph a few weeks ago,

since they made nursing a degree course, they get the wrong people.

They think they are above the menial tasks. We need compassionate

nurses who are entering the profession because they care for

people and not for the salary. completely agree with that. I am

amazed that nurses are not assessed on their caring skills as well as

their computer input skills. They're actually doing the job. Why

aren't patients asked, how we shall care? How compassionate eye on

nurses? -- How was your care? Patients are terrified of

complaining because the in such a vulnerable position and that nurses

will take out -- taking out on them. First of all, I am very sorry for

your loss. This has been going on for so long that it really is time

to do something about it. There was a thing called Project 2000

introduced in 1988, which is the beginning of the transformation of

Nursing into a supposedly graduate profession, as opposed to what it

was before. My aunt sauna sink as a disciplined - self sacrificing and

humorous but not to be viewed in the terms that any other way of

life was. She saw that disappear before she retired. Something was

lost when we tried to make nurses graduate professionals. I really do

think the RCN has to recognise this and so do politicians. Big mistakes

were made, particularly in the 1980s. What we have done at the RCN

is recognised there was a problem. They have said there is no hiding

place for poor nursing. The issue about graduate nurses, we have said,

we need to look at theirs. We commissioned Lord Willis to do an

independent commission on theirs. He has found there is no evidence

that becoming a graduate professional has reduced any

quality. In fact, they have improved quality. There is no

research behind what you're saying but there is to say many graduate

Nursing has made a difference. get the same sort of letters that

and gets on the subject. If you have not got compassion in nursing,

you should not be there. If you do not have the compassion, do not go

there. Thank you. Now it is the political row which has got all of

Asia talking. The new design for the Chinese passport shows a map

with territories that are disputed And now the US say they will raise

the issue with Beijing too. Who knew the humble passport could be

so political? Adam has been finding out just how much. You cannot leave

home or your home country without it. How much to the really notice

our passports? It is a bit worrying. What do you think that passport

says about South Africa as a country? Very little. Where are you

from? I am from Belgium. What does the Belgian passport has in terms

of design features? That is in Brussels. A Belgian monument.

passport was issued in 2009. They were going through a third phase.

Now they are filled with British Land marks instead. What does a

Libyan passport look like? Just a green one. All the Libyans are

waiting to change this passport. Few people care as much as

immigration official turned author, Martin Lloyd, who has a collection

of 400 of them. This was issued by France in 1820. It was issued to a

Spanish refugee, who was applying for asylum in France. That is a

description of the man, right down to the colour of his eyebrows, the

shape of his chin and knows - everything. It is a British

passport. A single sheet of paper bound in leather covers by the

Passport agent. Passport number 13. It is signed in hand by the British

Foreign Secretary - your palms stone - at the bottom. This is a

Cypriot passport. -- Lord Palmerston. The people in the north

of the island could only get a Turkish passport. They were issued

with this. The Turkish Federated state of Cyprus. It is a travel

document and not a passport. That is a very political passport.

British pass was got political in the mid- 1980s when the old Blue

gave way to EU Burgundy. -- passports. It caused consternation

at the highest levels. Both Mrs Thatcher and Lord Carrington were

doubtful about it a conscious of the sensitivities and

misunderstandings that might make people think Britain had lost

control. I do remember that when the passports were eventually

issued, Jeffrey Howe when he was then Foreign Secretary, he insisted

on having the first one. When you think about it, they really are

lots of passports floating around the world. 47 million UK once, 37

million Chinese ones and 130 million belonging to US citizens.

You thought the most interesting thing about your passport was the

photo. It is a fake! No it is not. Does it matter have a passport

looks? They all look the same, don't they? Exactly. I used to love

my old British passport. It was wonderful and elegant. We had to

give it up for the paper one. point was it was not a British

passport any more. It was a European Union passport. A retired

Lithuanian KGB colonel has the same passport. There is no such thing as

British citizenship or a British frontier and we have lost it.

People should pay more attention. There is controversy in the air

about Scottish independence. The latest row was in the Scotsman

newspaper. It suggested an independent Scotland may have to

reapply for EU membership. Let's see what the Scottish Secretary

Has the British Government sought legal advice on Scotland's status?

We've taken legal advice and we publish the fact we took it some

weeks ago. We have an initial view that the most likely scenario is

that the rest of the UK would continue as the member state,

Scotland would have to apply and Scotland would have to negotiate

its terms and conditions. That is a huge set of issues for us when we

contemplate what is at stake for independence and for businesses in

particular, at a time when three- quarters of businesses say they are

very worried about independence. Are you saying for British

Government has legal advice that if Scotland votes to leave the UK, it

is in effect also leaving the European Union and would have to

reapply as a new member? Is that the import of the legal advice you

have? The advocate general, one of the UK Government's law officers,

has made public speeches about this in the last few weeks. We are doing

a lot of work on this, we've looked at the international precedents,

we've looked at the weight of academic opinion and our initial

views of that the most likely scenario is the UK stays as the

member state and Scotland would have to apply to join the EU again.

How quick and complex a process that is, nobody knows. But the

terms and conditions, I think, are the key to this. The UK has a lot

of Dr Putts on the euro and other things. Scotland has huge interests

in six fishing and agriculture. None of that is certain and all of

that is a worry. Forgive me for coming back to the original

question. Your second dancer was a little different from the first. --

answer. You said it looks as if Scotland would have to reapply. Can

I clarified... Have you had divinity Atif British legal advice

to that effect or not? Definitive. Can I make the distinction? The

First Minister had some difficulty with this a month ago. We have

answered a question that we have legal advice within government. On

the basis of that, the Advocate- General, one of the law officers of

the UK government, has been public set out what we draw from that. We

don't comment on whether or not we have taken the advice itself, that

his ministerial code that is well established, but people can see we

are being clear that the most likely scenario, based on our

initial research and consideration, is that the rest of the UK stays in

vu you -- he used, Scotland would have to reapply to join the EU.

will understand that the most likely scenario, which is your

phrase, is very different from saying we've had definitive legal

advice from the highest law officers in the land, the best

advice this government can get, that Scotland will have to leave

and reapply. I don't think you are telling me that this morning, are

you? I am saying exactly the same as Jim Wallace has said in public,

as I've said to the Scottish Parliament and other places. The

distinction between what we are saying and what the Scottish

government are saying is that they don't have legal advice and they

have stopped all sorts of court proceedings a round that issue. We

are looking at the balance of the probabilities. What is the expert

opinion? What is the President? We think it is the most likely

scenario. Very few people are doing anything different to that. If you

are right on the balance of probabilities in Scotland, if it

votes to leave the UK, then have to reapply to join the EU, is there

any doubt... Surely the run EU would want Scotland to join. Plenty

of people would rather see Scotland in and be glad to see the back of

England! The point I would make is that it is a serious issue about

Scotland's status at that moment, but much more significant will be

the terms and conditions of that membership. There's no country that

has joined since 2005 which has been able to escape the obligation

to adopt the single currency. Likewise, the Shangla knocked out

which we have around border controls is one that would have to

be specially negotiated. None of that is clear from the way the SNP

are putting for their argument, but it's absolutely critical to

businesses, individuals and families. We have to get these

things nailed down. The uncertainty of those terms and conditions is

the big worry for people across the country. One quick question on an

unrelated matter. Your role as a Privy Counsellor. The Telegraph

newspaper reporting that as part of a system of regulation of the

newspapers, David Cameron is considering setting up a new press

watchdog by royal charter, which would mean the Privy Council would

be involved. Can you confirm that? As you know, since Lord Leveson's

report was published, the two parties in the coalition and

opposition parties have all been considering their response to that.

The specific proposals from each of the parties will be brought forward

over the next few weeks and we will look forward to the debate that

will ensue. His there discussion that would please the Lib Dems

about regulation involving a royal charter? We have got a number of

discussions going on between ourselves and the coalition

partners. Discussions across Parliament as well. Discussions in

Scotland, too. None of the detail is sorted out yet, none of the

proposals have got to a point where they are agreed. In the next few

weeks we will see that emerge and we will build up a proper debate

about the right way forward. Her go inside and get warm! Thank you for

joining us. By the man some gloves! And listening to that from our

Edinburgh studio is Alyn Smith - he's a Scottish Nationalist Member

of the European Parliament. We've always been told, and I've been

personally told by Alex Salmond, that there's no question that if

Scotland leaves the UK it remains part of the European Union. Without

a hiccup. You can't say that any more, can you? Yes, we can. It is

really important that we understand the significance of the Edinburgh

agreement within this context. Where people... Michael Moore, I

lost count of how many caveats he was sticking in to everything he

was saying. We need to look at the reality can of how the EU operates.

It is an expansionist organisation. This is unprecedented. There's no

rule book. The same way we universe's -- reunification with

East Germany was impossible, a way will be found. All of the certainty

we have, our students are already part... I understand that. You want

to stay in, I understand that, that is not the argument. Let me put

what the EU Commission letter says. It says, if a territory of the

member state ceases to be part of that member state, in other words

Scotland if it voted to leave the UK, because it has become an

independent state, the treaties would cease to apply to that

territory. That is quite clear. You would have to reapply. There's a

couple of points I will make. That letter doesn't actually exist and

hasn't been signed off by the European Commission. We are seeing

a black cops operation by the Scotsman which does it no credit. -

- Black operations. The Edinburgh agreement makes very clear that for

people of Scotland have a choice to make in 2014 which decides the

principle whereupon there is a series of negotiations between

Edinburgh and London and the European Commission has made it

very clear, six months ago, that the commission will take due

cognisance of a negotiated agreement between the two parts of

the former UK. Are you claiming this letter doesn't exist and that

the Scotsman made it? commission made that very clear

yesterday. Are you saying... It has not been signed off. That is

different. Are you claiming this letter doesn't exist and the

Scotsman made it up? There has been no letter sent and how the Scotsman

managed to see that letter. That is not what I've asked. Are you

claiming this letter doesn't exist? I've made various calls to Brussels

and I've been told of the letters exist in various parts, but it

doesn't exist as a unified document. How the Scotsman managed to see

various bits out of context is very curious. I think it is called

original journalism and getting as good! May be imposed Leveson... You

call it black operations, which is why a lot of newspapers don't want

to be regulated by people like you. Isn't it perfectly possible, if the

commission is right and the Secretary of State for Scotland is

right, and I appreciate there were a lot of Pavia to what he said,

that if you vote for independence, you'll have to negotiate with

London the terms of the divorce and at the same time you will have to

be negotiating with Brussels the terms of your re-entry as an

independent nation into the EU? Firstly, the use of the word

divorce is very emotionally-charged. We are negotiating a new status

within the EU. Are we not allowed to use that word? You can if you

like. But it is not like for like. We negotiate a new status from

within, we are part of the EU presently. There's implications for

both sides. Scotland will increase its MEP representation and the UK

will lose some MEPs. We are talking about negotiation over the details

and the housekeeping. The principle will be decided by the people of

Scotland and then we have a period of negotiations where we saw that

out. The EU aspects will be as nothing compared to the

negotiations that will be happening between Edinburgh and London. The

European Commission is based on law and human rights. It will take due

copper dickens -- cognisance of the democratic opinion of the people of

Scotland foot off thank you very much.

Time now to see what else has been hitting the headlines in the last

seven days - here's Giles with the In the wake of Leveson, Fleet

Street's finest were called in to Number Ten to thrash out some House

Rules in a sobering session in the last chance saloon. Meanwhile,

Wills and Kate baby joy!!Is it twins?! Less happy news from a

different palace - George Osborne told us that along with us, the

royal nipper won't be able to rub two silver spoons together until

2018. It's wonderfully news, they will make brilliant parents.

Britain is heading in the right direction. The road is hard, but we

are making progress. Goal gaping for Labour's star

striker, but was the Balls in the back of the net? The national

deficit is not rising... Is rising. It is not falling. Although there

was some good news for the Treasury, when Starbucks says it would

"coughee" up some more tax. And, talking of good news,

Do you think this Budget, and I will call it a budget, will start

unravelling this weekend? It is already unravelling. We have the

Daily Mail and the Daily Telegraph talking about the money tax,

talking about how maternity pay will be cut in real terms. Then

there rather big figures we were talking about with the IFS. How

will they find �27 billion worth of cuts? We have 30 seconds. They

always unravel. One trembles for freedom of the press in an

independent Scotland after seeing what we just heard. That is the

biggest lesson from this week's programme. Black Ops. The other

change in Britain is I've never seen a government so far away from

the next election not able to get any growth going before that

election. They got it wrong. A lot of people have said that for a long

time. It is one of the wonderful things about not being attached for

of -- to a political party that has been clear to me since the

beginning. That's all for today. Thanks to our

guests - special thanks to Peter and Mary Ann. I'll be back on BBC

One on Sunday with the Sunday Politics, when I'll be talking to