12/09/2011 Daily Politics


Similar Content

Browse content similar to 12/09/2011. Check below for episodes and series from the same categories and more!



Afternoon, folks, and welcome to the Daily Politics. The government


welcomes proposals to reform the banking system, but will changes


damage the UK economy? The union's call for co-ordinated strikes over


cuts to pensions. As the TUC conference begins today, we will


hear from the general secretary. And it is musical chairs as 50


parliamentary seats are abolished. MPs prepare to fight their


That should be quite a fight, I bet! All of that in the next half-


hour, and with us for the duration is former ambassador to the S --


the US, Sir Christopher Meyer. The Prime Minister is on a whistle-stop


visit to Russia. Later today he will meet Kremlin leaders,


including his counterpart Vladimir Putin. It is the first meeting


between Mr Putin and the British prime minister since the murder of


Alexander Litvinenko in London, a killing blamed by Britain on the


Russian security services. David Cameron has been urged by four


former foreign secretaries in yesterday's newspapers to raise the


issues of corruption and human rights when he meets the Russian


Prime Minister. Both were mentioned in a speech at Moscow State


University this morning, when Mr Cameron also called for greater co-


operation between the two countries. We face a choice. We can settle for


the status quo, where into many areas we are in danger of working


against each other and therefore both losing out, or we can take


another path that is open to us, to co-operate, to work together and


therefore both women. Today I want to make the case that the mess...


Let me try this again, carefully, Like me, the Prime Minister did


economics at university and not languages, which I think is quite


apparent with both of us. Can we talk tough to the Russians and


expect to do more trade with them? We can expect to do both, and we


should do both. You were in the Russian embassy. I was there in the


1960s, the depths of the Cold War, and I went back in the 1980s, still


Brezhnev, hanging on by a thread. He died while I was there. They all


died in a row. Do you remember the phenomenon of funeral diplomacy?


Everybody went out to the funerals of these chaps, and it turned into


a huge international meeting. Communist or Putin-Medvedev Ciara,


you have to be very strong in dealing with the Russians. I kind


of agree with that letter which was signed by the four former foreign


secretaries in the Sunday Times. is a tough balancing act. The


Russians are notoriously sniffy about the British when we criticise


them. Many people will wonder, given recent events in Libya,


should we be asked to do business with what many people think is a


gangster state? If you only do business with that country's, you


end up doing very little business at all. That is one of the


realities. But the Russian foreign minister called for the British to


take a pragmatic approach to relations with Russia, forget all


the human rights staff, but it is difficult to be pragmatic if there


is not a proper rule of law, including contract law, for British


businesses who invest. Cameron must press the tough but in here.


would you categorise Anglo-Russian relations? This is the first time a


British Prime Minister has been in Russia since 2005, and they have


not been cosy in recent years. I mean, Tony Blair tried to create


a cosy relationship with Putin, and it existed at a verbal level.


tried to have a cosy relationship with everybody. It did not add up


to very much with Russia, that he sure as hell. Looter gave him a


kicking. President Assad did the same thing. I had a very great head


of department in the Foreign Office when I was dealing with Russia, who


said to me that the natural condition of relations with Russia


is a cool one, and I think that is true. I think it is true today,


whether it is a capitalist Russia or communist Russia. Very


interesting, good to have your expertise for the rest of the show.


How do you prevent a repeat of the financial meltdown of 2008? That is


the question put to John Vickers and his Independent Commission on


Banking. He has been thinking about it for more than a year. Their


final report is published this morning. It is expected that the


report recommends that the UK banks ring-fence their retail banking


from the rest of their business. Above all, the riskier investment


operations. And that they increase the amount they keep in capital,


sort of in the bank as a buffer against future shocks. The Vickers


report says that all this will cost the banks. It does not shy away


from this, between �4 billion-7 billion, and he was the reforms to


be in place by 2019 at the latest. That is read international changes


come into banking regulation, too. That means that much political


wrangling lies ahead. Banks and many Tory MPs will be lobbying


George Osborne for a slower pace of reform, while senior Liberal


Democrats have made it clear they want to see the changes pushed


through. This is what the Chancellor said this morning.


have a commitment now to legislate to get the rules in place while


this government and this Parliament is sitting, and then it will take


some time for the four rules to come into effect, but that is what


John Vickers himself recommends. I think that gets the balance right


between showing everybody we are doing it whilst giving everyone


time to digest the details and put the changes in place. I enjoyed by


David Ruffley, Conservative MP and a member of the Treasury Select


Committee, and by the Liberal Democrats former Treasury spokesman,


often regarded as the voice of Vince Cable on this earth, Matthew


Oakeshott. Let me get this straight, a good or bad thing? Overall, good.


Bankers need sorting out. Two problems, is is going to increase


the amount of corporate lending to businesses? That is the big


question. With the higher cost of capital, it looks like it will be


more difficult. The second thing is that his regime is the first of its


kind in the western hemisphere. It has never been tried before, and we


have to work out whether, if Britain moves first, we are going


to be at a disadvantage compared with France, Germany and the Far


East. He is sounds like it is good with serious caveats. Those are two


powerful question marks, but the thrust is good. Good or bad? Very


good. John Vickers has issued a strong prescription, and now we


have to make the banks take their medicine. Bank lending could not be


worse for businesses than it is now, so we absolutely must have reform


and radical reform as he has come out and recommended. Why are we the


only ones doing it? No other country has been down this road.


Other countries are thinking about it. We have to do it because our


back crash was worse than others. Our Paul banks are four times


bigger in the economy. -- -- our banks. We have a monopolistic


sector were the only four big players. People are not getting


proper competition. We have to do it. The things that they have done


in East Asia, loan-to-value restrictions, restrictions are the


amount of loans you can get proportionate to your income, that


is what the Far East and East Asian countries have done. That is


without the rather radical regime which is going to push at the cost


of capital, which means people going for mortgages and small


businesses, in the short run at least, will see an increase in


their costs. No other country is doing it. Under the Basel III


arrangements which will come into force, it will up the capital


requirements anyway. Even without the reforms! That is true, but it


is coming over a period of time. is this. These capital requirements,


capital adequacy requirements are higher, and though, than Basel III.


A much better way, many of us think, is to go in lockstep with the other


countries over the next five years so that we are not an outlier.


we wait for this, we will be waiting a long time. We have got


far bigger immediate problems. This is the British, the first item in


the coalition agreement, which we both signed. I do not think he


signed it! It is to reform our broken banking system and sort out


unacceptable bonuses. We have an immediate problem that we cannot


leave until then. You could do bonus legislation... The important


thing is to get the structure sorted out now so that the banks


never bring the British economy to its knees again. The timetable in a


minute, but maybe the reason we need tougher rules is that the


American banking system, which went into meltdown along with ours, its


combined balance sheets only account for about 60% of American


GDP. The combined balance sheets are banks account for 400%! It is a


lot more. For that very reason, don't you need tougher rules?


think there are ways that you can sort out the problem. The disgrace


of bankers being paid for a year, that is obscene, we all understand


that. It is still going on. How do stoppered by regulation? You have


to break it up so the gambling people are not running the main


bank. There are good things in this independent report which tackle


that, but the key question must be, financial services are big in this


country, and they pay for a lot of public programmes, and it was a


cash cow which has done this country very well. Now, and not a


defender of Bankers... You are doing quite a good job. I am


defending what I consider the national interest. Why should we be


an outlier when the rest of Europe, although it has different problems,


why should we be implementing Basel III before we have to? That brings


me on to the timetable. Bankers have served this country well, we


are all sitting here... Not in a last few years, we are sitting here


with a �2,000 tax bill each for bailing out banks. It used to


account for 25% of revenues and paid for the increases in spending


on schools and hospitals that your party called for. It used to, but


as the commissioner said this morning, what we have had to put in


to bail out RBS would have paid for our universities for five years. We


need proper regulation and a proper insurance policies so it never


happens again. What is the timetable as far as you are


concerned? We need to get on with legislation as soon as possible.


Obviously, the exact rate at which he pays in the capital requirements


is fine. Vickers is saying that the backstop date is 2019, but he is


clearly saying that we want to make a start as soon as possible. I


believe the obvious place to see as much of this as we can kiss in the


Financial Services Bill next year. It has got an expert committee


which already looks good to me. You cannot do financial regulation


without including the banks, show we should start next year of the


legislation. When you say next year, it is a big deal. Exactly when?


Financial Services Bill is waiting to go. Obviously, there is time


to... It does not include any of this. It is already quite big.


telling you the point. When Vickers has been clever is that the smoke


out objections in the interim. We have 100 pages here are because


dealing with the bank's' objections, sorting that out. That job has been


done. We do not need the bankers rattling their begging bowls.


agree with you. My plea is simply this. The broad thrust is fine, but


we should not get ahead of our international banking competitors


in Europe and elsewhere. If we do, there is a threat to London and all


the revenue that it breaks -- brings into this country. Where are


you honest? Wearing my tiny hat as a philosopher-historian, I look


back to 1933 and see the introduction in the United States


of the Act which is not an exact parallel... It actually separated


rather than ring fence. You cannot be a retail bank and an investment


bank until Mr Clinton said he could. 60 years later, the wheel turns and


Mr Clinton says that you can do these things. Here we are in the


United Kingdom, contemplating an Act of Parliament which may well be


right, which will restore some of these restrictions. The question I


ask is whether 60 years from now, someone will pop up and say, the


banks are terribly restricted in the business they can do, let's


undo some of the stitches. thing is for sure, unless there is


an amazing breakthrough in science, we will not be here to talk about


it. At small businesses cannot wait 16 months, never mind 60 years!


the purposes of this, we will call it roughly-no shot. That is roughly


better! Traditionally, this would be the week when journalists like


myself would pack our bags for four weeks at the British seaside. I am


still doing it for three, but in the old days, when dinosaurs ruled


the earth, it all kicked off with the Trade Union Congress conference,


the TUC conference, and in these austere times the TUC does not go


anywhere. They're holding a scaled- down conference in their HQ in


London. A bit of a pity, really, but there is nothing scaled-down


about the gender with several trade unions threatening co-ordinated


industrial action this autumn over reforms to public sector pensions


and the cuts in general. And joined now, it used to be from Blackpool,


Brighton or Bournemouth, but from the conference, by the TUC general


secretary, Brendan Barber, in downtown London! Does the TUC


Some of the my colleagues have been talking of that as part of the


campaigning that will be done in the coming period. We've seen some


examples of that in recent times, of course, things like UK un cut's


protest to highlight the issue of tax avoidance, the billions that


the rich aren't paying into the tax system, which they should be. So,


that might be a part of the mix. Will it be TUC policy? Last year,


you told us that civil disobedience would be counterproductive. I think


we're always careful to think threw these things. Of course, our


objective is to win broad public support for the powerful case that


we're making for a very different approach to running our economy, an


approach that delivers fairness, that gets people back to work, that


gets growth moving again. That case will be more powerful the more


we're able to demonstrate we have broad based public support. Do you?


If you had broad-based public support, why have you lost half of


your membership in 30 years? Only 15% of people in the private sector


are unionised. Less than 20% of 18- 29-year-olds are in unions. I mean,


you are quite seriously declining institution. Well, we certainly did


lose membership, in particular over the long period of Conservative


Government. Very much less so over the period of Labour Government


that we had. It still fell. Look, I absolutely acknowledge that our


membership has not kept pace with the changing shape of the labour


market. We're determined to tackle that problem. We have to reach out


in new ways for sure. But look, it's only a few months ago that


over half a million people came out onto the streets of London to show


powerful broad-based support, not just trade unionists, people from


every section of the community, powerful support for our case for


an alternative. We need to build on that and to take our campaign into


every community in the country. That's what we're determined to do.


There is clearly in the country serious concern about the impact of


the cuts. Many people in the public sector are worried about the impact


of changes on their pensions too. You don't have to be on the extreme


left or anywhere else to be worried about these things, but isn't there


a danger of your case being put, so many of today's trade union leaders


are on the far left, on the extreme, they're hard line, way on the left,


tot left of the Labour Party. Why are they so left-wing in the 21st


century and doesn't that undermine your case? I don't recognise that


description that you give of the current generation of union leaders.


Bob crow, Mark sn serwotka, Christine Blower. Yeah, but Andrew,


the trade union movement has always had powerful perplts as you well


know. Look, I mean, we are all facing the gravest crisis that our


economy has endured for generations. That banking crash in 2008, the


effects are still being felt. At the moment, our economy absolutely


flatlining. The growth that the coalition promised us that would


come, private sector jobs to replace public sector jobs and so


on, our growth is utterly negligible. More and more people


are recognising we might actually have that double-dip recession that


I forecast some time ago, as a real risk. Even the IMF and the World


Bank are saying we need more stimulus and less austerity. It


really is time the Government started to listen You miss the


seaside? I'm sorry? Do you miss the seaside? Being by the seaside?


miss the seaside? Of course! I miss the seaside but we're having a fine


time here in Congress House. Come down and see us. I will. Thank you


very much. You must be delighted that the trade unions are going


into battle for your gold plated pension. They're not going into


battle for my gold plated pension. I think they are. I'm lucky. I am a


relic of the old regime before these things happen. You mean, you


have a hell of a pension? Fplgts I have a defined benefit pension.


Mind you I contributed, handsomely too. So.rest of us too. It's a good


pension. So did the rest of us. That's the way it works. Was I


going to be the only person contributing to my pension. You're


the only one here today who's got that pension. I have been looking


round the BBC today and I have seen fatter pensions than my own. Not in


this studio. Maybe not. Just one point briefly, I've just come back


with Greece, I had a bit of a holiday, on my pension! They've


rioted there, they've done civil disowe beadence. They've torn


Athens to shreds, but the brutal realities of the economic situation


don't change a jot for that. Some similar message has to be sent to


our trade unions. We shall see. It will be the issue of the Autumn I


suspect. Now if you're an MP with a constituency in England, it's only


England at the moment. Scotland and Wales are later. You might be


feeling anxious this lunch time. Just landed on the desk is a report


telling them whether their constiltwaepbs is due to be


abolished or the safe seat will become more marginal. The changes,


which will be public tomorrow, are being made in order to reduce the


number of MPs from 650 to 600. Why not, the Senate only has 100. David


Thompson has been investigating. There are times when you think this


place should be cut down to size. Well, you're not alone, because MPs


are being asked to shrink the House of Commons. The plan is simple: Cut


the number of MPs from 650 to 600, try to make sure that almost all


constituencies have roughly the same number of voters and make sure


no-one feels too hard done by. Good luck with that. Why? Well, if


you're a Conservative, because you think it will save money, and


because you also believe that the current system favours labour. If


you're Labour you think this is a plot rip the electoral map against


you. If you're a Lib Dem, because this was part of the deal that gave


you the AV referendum. The fun part will be watching MPs fighting for


their political lives. There may be some juicy scrap as head. In


Cheshire there's George -- George Osborne and Graham Brady. One is


the Chancellor the other argue able the backbencher. Then there's Danny


Alexander who could be against Charles Kennedy. Tricky. And in


Yorkshire, the gloves could be off behind Ed "bruiser Balls and


Hillary Ben. How brutal could it be? You must think of it as musical


chair was machetes. When the music stops there will be a limited


number of seats and there will be large numbers of members of


Parliament. They will be grabbing each other round the throat. It's


madness. It's crude politics. It's an accommodation for the liberals.


It's the coalition. Is it though? We won't really know until the


Boundary Commission publishes its initial proposals rgs starting with


England tomorrow. Some experts think it's not the big boy who's


have to worry. Proportionately the Lib Dems will be the biggest losers


as far as the parties are concerned. They've only got 57 MPs at the


moment. So if, as I think they will, changes, that's very serious for


that party. Conservative and Labour are both down as well, of course,


but because they start with more MPs the impact is less serious.


have to agree these changes by October 2013, if they're to happen


by the next general election. It's not a done deal. Because by that


time, another little row might be brewing. If the coalition is on the


rocks in 2013 when it comes back tot Commons, a lot of Lib Dems will


say why on earth should we do this. Deal breaker? If the Lib Dems veto


it, I think the Conservatives will be so angry it could be. Shrinking


the mother of parliments was always going to be tough. Is it a good


idea? That might come down to your point of view.


Indeed it does. Let's get some points of view. To discuss the


changes, Rennard, and Sir Peter Bottomley the Conservative MP for


Worthing west. He used to be the MP for Eltham in London before


boundary changes in 1997 meant he went often the chicken run I think,


as we used to call it. Good or bad, cutting the number of MPs? Fplgts


it's in the national interest. Andrew turner on the Isle of Wight


can look well over 100,000, I don't see why the rest of us can't as


well. 50 seems a small amount. would do it by 10%, each boundary


change until either the people say they want more representation or


something else squeals. It's wrong that some MPs have little more than


50,000 voters. Some MPs over 100,000 voters. It's fair to make


the change. Perhaps we could have made these changes though in a


better way. Why did your party agree to this deal, which we've


just heard will result in the Lib Dems proportionately losing more


seats than any other in return for an AV referendum that you lost?


don't know the consequences yet. A lot depends on whether Lib Dem MPs


stand again at the next general election. They're very effective


campaigners. If their constituencies become very


different some of them might stand down. If they stand again, people


will recognise how good and effective they have been for their


community and will vote for them good. -- again. Will there be


problems with this. There's always a row with boundary changes?


think for the Conservatives and Labour there's likely to be less


problem than for the liberals. Both have a tradition of people moving


to different areas. The liberals don't have that They're often


locally based with deep roots in the community. Have or appear to


have. There are few examples of liberals successfully moving from


one constituency to another. that a worry? We have to consider


this is based on a massive misapprehension that the


Conservative Party thought this would be to their advantage and it


won't really be. It won't? Labour Party feared they would lose


hugely from this and they won't particularly either. That only


leaves you. If the Tories aren't to make great gains and Labour isn't


going to make great losses, that leaves you, of the national parties.


Almost all constituencies will be changed by this review. That will


change things for a lot of MPs much it's not just the Liberal Democrats.


A lot of people will ask why have all this change for no political


reason. Everyone looks at self interest. The reason for the


changes are the national interest. Is it better that this country has


600 monies in the House of Commons rather than 650? Yes. Will the


costs go down? Yes. If MPs are selected and then elected will we


behave bet sner yes. If we will still have 600 monies at the end


this, plus about 800 and counting in the Lords, last time I looked


the Senate had 100 members in the United States and the House of


Representatives is 430, something like that. 435 and. Yes and that's


a continent of 350 million people. They have state legislatures as


well. We have Belfast, Edinburgh and Cardiff so far. Yeah, I think


this could have gone more radically than the intention. 435 US members


of the House, 100 senators. Look at the House of Lords, stuffed tot


gulls. You can't fit them all in. I would have been, although it's


politically impossible, I would have been more radical. We have to


leave it there. You're not on the chicken run this time, are you?


don't dispute your expression before, I would look at it more


kindly. It was called that because to get a new seat they had to take


lots and lots of chicken dinners. You're not in the unelected part,


it doesn't bother. It does bother you. I meant personally. They're


Download Subtitles