:00:43. > :00:47.Afternoon, folks. Welcome to the Daily Politics on Friday. �1
:00:47. > :00:52.million bonus for the man running the Royal Bank of Scotland. But it
:00:52. > :00:57.is only half what Stephen Hester got last year. Times must be tough.
:00:57. > :01:01.Politicians are still queuing up to criticise the payout. One man that
:01:01. > :01:05.used to stand up for the city is the mayor of London, Boris Johnson.
:01:05. > :01:11.Is he still backing bankers? He will be talking to us from Davos,
:01:11. > :01:15.the annual meeting that has become the snowy playground for plutocrats.
:01:15. > :01:25.Alex Salmond has set the question he would like to ask on Scottish
:01:25. > :01:29.independence. He has been accused of acting like the leader of North
:01:29. > :01:35.Korea. Remember this? We look back at the poll tax riots, now more
:01:35. > :01:45.than 20 years ago. They still shape the national debate over tax to
:01:45. > :01:45.
:01:45. > :01:50.this very day. With me today, Daniel Finklestein of the Times and
:01:50. > :01:53.Laurie Penny of the New Statesman. Welcome. There has been widespread
:01:53. > :01:58.criticism of the bonus paid to the boss of the Royal Bank of Scotland.
:01:58. > :02:03.He is called Stephen Hester. The bank has revealed he has been paid
:02:03. > :02:07.nearly �1 million and it is all in shares, not in cash. It does top up
:02:07. > :02:12.his �1 million plus salary. Politicians have been lining up to
:02:12. > :02:17.criticise the payout, if you expect. -- as you would expect. This is
:02:17. > :02:21.what the Labour leader has to say. It's a disgraceful display of
:02:21. > :02:26.leadership by the Prime Minister. He has been promising action
:02:26. > :02:29.against excessive bonuses and pay, and now he has nodded through this
:02:29. > :02:33.�1 million bonus. He has been lecturing shareholders on how they
:02:33. > :02:37.have to be more active in holding executives to that right account.
:02:37. > :02:40.He owns, through the British government, 85% of the Royal Bank
:02:40. > :02:47.of Scotland. He must explain, not least to the British people, why he
:02:47. > :02:49.has allowed this to happen. Daniel Finklestein, it was clearly the
:02:49. > :02:55.Government going to be getting a kicking when the bonus was
:02:55. > :02:58.announced, whatever it was. It is less than last year, but more than
:02:58. > :03:03.most people will earn in their lifetime. But does the Prime
:03:03. > :03:06.Minister had the power to stop it? He probably does. I am against two
:03:06. > :03:10.executives earning as much as they do. I don't think Stephen Hester
:03:10. > :03:15.should be paid �1 million because I think it is a waste of money.
:03:15. > :03:19.he is? Yes, �1 million and a �1 million bonus. I think you could
:03:19. > :03:24.hire staff for less money than that. There is also the question of
:03:24. > :03:27.whether he should accept it. There is a different question, if we want
:03:27. > :03:31.the Government, any government, to start to manage the Royal Bank of
:03:31. > :03:36.Scotland when they are a political entity. The Royal Bank of Scotland
:03:36. > :03:38.is a commercial entity. I am nervous about that. Once the
:03:38. > :03:43.Government begins to intervene in the commercial decisions, even
:03:43. > :03:46.though in my view does commercial decisions are wrong, they have
:03:46. > :03:50.priced it wrongly, I think what the Government does that it will be
:03:50. > :03:53.difficult for them to stop. I think it is wrong, I think the whole
:03:53. > :04:00.banking world needs to think if it is paying its staff more than it
:04:00. > :04:02.needs to. But I think, in this occasion, I don't think that the
:04:02. > :04:08.Government shark -- should start acting as an active shareholder.
:04:08. > :04:12.Among these big banks, �1 million salary and a �1 million bonus is
:04:12. > :04:15.peanuts! It's interesting that you say that governments should not
:04:15. > :04:19.interfere in the working of commercial banks. Governments and
:04:19. > :04:23.the rest of us, as part of the tax system, are required to shoulder
:04:23. > :04:28.the risk that banks take. Stephen Hester is essentially a public
:04:28. > :04:32.servant, given that we own 85% of Royal Bank of Scotland. The debate
:04:32. > :04:38.has been that public servants and public sector workers are paid too
:04:38. > :04:44.much. Should we not be encouraging him to take the average executive
:04:44. > :04:50.salary? �28,000 he should take, the average. The Government should
:04:50. > :04:54.definitely emphasise persuasion. But not control? The question is if
:04:54. > :04:58.it should act, as it would now have to, to actually say to the bank,
:04:58. > :05:04.you on not allowed to pay these wages. In other words, should it
:05:04. > :05:07.become an active shareholder in the RBS? This is a different decision.
:05:07. > :05:13.But the decision that Labour took when it nationalised the Bank was
:05:13. > :05:17.not to be an active shareholder. It put 83% of the bank into the public
:05:17. > :05:21.domain, public ownership. But it outsourced management. I am in
:05:21. > :05:25.favour, generally, of what Vince Cable has announced. I'm not
:05:25. > :05:28.against intervening in banks or regulating banks. I'm not even
:05:28. > :05:32.against the Government setting a framework in which executive pay
:05:32. > :05:36.will be set. What I am against is the idea of individual companies,
:05:36. > :05:41.as a nationalised industry, the Government begin to try to run the
:05:41. > :05:45.company. I think that would be an error. Mr Miliband, it is an open
:05:45. > :05:50.goal for any opposition leader. We will hear from Boris Johnson in a
:05:50. > :05:53.minute as well, from the Tory side. Really saying the same thing. I bet
:05:53. > :05:57.if Labour had won the last election and were in power, that this would
:05:57. > :06:00.happen and they would not intervene to stop the bonus? The interesting
:06:00. > :06:05.part of the story is not that it is a Conservative or Labour decision,
:06:05. > :06:11.it is that the banks still seem to be setting their own pay. What
:06:11. > :06:16.Robert Peston reported today was that the Government did try to warn
:06:16. > :06:21.the banks and say, look, this is too high. But the feeling was that
:06:21. > :06:25.the entire top table of RBS would have walked out. I heard that as
:06:25. > :06:29.well. The banks are basically holding us to ransom, as they have
:06:29. > :06:32.for years. Given that we own the biggest chunk of the Bank and the
:06:32. > :06:37.shares are already in the dirt, what would happen if the chairman
:06:37. > :06:41.had walked out with the board? less worried about that. I really
:06:41. > :06:47.am. Are you looking for another job? I could see you on the board.
:06:48. > :06:53.I think it's possible to buy good stuff. You pay lots of money for
:06:53. > :06:59.long words, like suasion. It's possible to get good staff for
:06:59. > :07:03.quite a bit less. But you're not going to get it for her �28,000.
:07:03. > :07:06.That is the average public sector pay. And would somebody run the
:07:06. > :07:11.bank for that? People would be queuing up. But there would not
:07:11. > :07:19.know how to run a bank! I'm not sure that it is so hard that it is
:07:19. > :07:25.worth �1 million. It is more than I earn. I would do it. No it isn't!
:07:25. > :07:30.How do you know? You told me! would be terrible at it. Are you
:07:30. > :07:34.talking to me off her? To precisely the problem with the Government
:07:34. > :07:42.becoming an active shareholder is that she would try to set these
:07:42. > :07:49.salaries at �28,000, because it sounds fair. �28,000, actually,
:07:49. > :07:52.�28,800. You can see it is causing a bit of a row in the Westminster
:07:52. > :07:56.bubble. It will be talked about throughout the country. But Danny's
:07:56. > :08:00.suasion will solve everything, when we find out what it is. The wealthy
:08:00. > :08:03.and powerful have been gathering in the Swiss resort of Davos this week
:08:03. > :08:08.for the World Economic Forum. That explains why we are not there.
:08:08. > :08:12.There are more than a few British politicians present on or near the
:08:12. > :08:17.slopes, helping to plan the future of Europe and even capitalism
:08:17. > :08:23.itself. David Cameron has risked inflaming the Continent by saying
:08:23. > :08:27.it is time for boldness, not caution. He dismissed plans for a
:08:27. > :08:31.tax on financial transactions as simply madness. That comes as we
:08:31. > :08:35.learn from the front runner to become the next President of France,
:08:35. > :08:41.Francois Holland, that he is even keener on the tax than Nicolas
:08:41. > :08:45.Sarkozy. Boris Johnson has rallied to the defence of the City of
:08:45. > :08:49.London on many occasions. He warned that the tax is an example shorter
:08:49. > :08:54.and political vindictiveness. Labour leader Ed Miliband has also
:08:54. > :09:00.joined the debate from Davos. He is calling for action on the euro and
:09:00. > :09:06.also a transaction tax, as long as it is a truly global one. Tell the
:09:06. > :09:13.Americans that! It is that bonus to the boss, however, that was
:09:13. > :09:18.described as the boss of a public owned bank, that is the talk among
:09:18. > :09:24.the Brits. I spoke to Boris Johnson. Urine Davos to promote London as a
:09:24. > :09:27.global business centre. Given that Westminster is intervening on biker
:09:27. > :09:31.bonuses, that there is talk of a mansion tax and the Government
:09:31. > :09:37.takes over 50% of your income if you make big money, how is that
:09:37. > :09:40.going? I think people looking at London and seeing a city of
:09:40. > :09:44.remarkable resilience, and I have been talking to lots of people,
:09:44. > :09:48.incredible opportunities to invest. I have been talking to people that
:09:48. > :09:54.want to literally put billions into the city. Don't forget, people say,
:09:54. > :09:57.well, why are you sloping off to Davos? Isn't it a jolly? It is not
:09:57. > :10:01.at all. This is a place where people with huge cheque books are
:10:01. > :10:05.able to invest in projects that drive growth and jobs in London. It
:10:05. > :10:11.is out of conversations here in Davos that we have �50 million for
:10:11. > :10:18.bicycle hire schemes, �50 million for a new river crossing and cable
:10:18. > :10:21.car. �10 million for an attraction in the Olympic Park, and so on. �30
:10:21. > :10:27.million for eight seamen's Pavilion in the Royal Docks. These are
:10:27. > :10:32.important investments could London, which help drive growth and jobs in
:10:32. > :10:36.tough times. It is right that you are there, there is money to be had
:10:36. > :10:41.for the city. What billions will you bring back this year? Which
:10:41. > :10:45.prospects are looking good? There are lots of conversations going on.
:10:45. > :10:51.To get back to royally a question about how people looking at London,
:10:51. > :10:55.in relation to banker bashing and so on, I think there is a great
:10:55. > :10:58.deal of enthusiasm. The world is fixated with the Olympics. The
:10:58. > :11:04.heavy hitters are longing to come and see the city. We are trying to
:11:04. > :11:09.explain to them some of the places, Croydon, Tottenham, Battersea, and
:11:09. > :11:12.in east London where they can put their money and seek a long-term
:11:12. > :11:16.return on investment. We are explaining some of the stuff we are
:11:16. > :11:22.doing in putting in the transport infrastructure that will make those
:11:22. > :11:27.investments pay off. You criticise government for taking long-term
:11:27. > :11:32.damage for short-term political gain. I guess that is what has been
:11:32. > :11:35.done over Stephen Hester's bonus, isn't it? Short-term political
:11:35. > :11:42.popularity and long-term damage to London as a global financial
:11:42. > :11:47.centre? Well, I am sure that is what has happened. You will have to
:11:47. > :11:51.fill me in. -- I am not sure that is what has happened. I am sure I
:11:51. > :11:56.will be filled in, it seems he has received a substantial bonus. If I
:11:56. > :12:01.am correct, it is about �1 million. I believe that what is effectively
:12:01. > :12:06.a state-owned concern should be run on public service lines. Everybody
:12:06. > :12:11.knows that RBS was basically bailed out by the taxpayer in 2008.
:12:11. > :12:16.Whatever the contract was between Stephen Hester and Gordon Brown,
:12:16. > :12:22.Alastair Darling, I don't think people really understand why a
:12:22. > :12:28.public concern has to try to mimic a freebooting private sector
:12:28. > :12:31.venture, which it patently isn't. have heard you compared to Gosbank.
:12:31. > :12:34.But that was run by the Soviet state. The Royal Bank of Scotland
:12:34. > :12:39.has not run by the British government, but by an independent
:12:39. > :12:43.board. If you had stop this bonus, in shares, not in cash, been paid,
:12:43. > :12:49.what would you have done if the chairman and the board had
:12:49. > :12:56.resigned? If you look at the Charter Rob Gosbank, you will
:12:56. > :13:02.probably find that it did have a so-called independent board.
:13:02. > :13:08.know how the Soviet Union ran! pretty certain of that. If you look
:13:08. > :13:14.at the reality, it is the taxpayer who bailed out RBS. I have a great
:13:14. > :13:18.deal of sympathy with Stephen Hester. He is actually a very fine
:13:18. > :13:23.guy. I'm sure he has worked incredibly hard to do what he had
:13:24. > :13:30.to do at RBS. But I don't understand, personally, how we can
:13:30. > :13:36.justify paying private sector style bonuses to what is, effectively, a
:13:36. > :13:39.state bank. And that is where I am afraid I beg to differ with you.
:13:39. > :13:43.am not taking an opinion, I am simply asking you questions. His
:13:43. > :13:51.donors would not even give him bragging rights at Goldman Sachs. -
:13:51. > :13:55.- his bonus. If you have the power, you would have stopped the bonus?
:13:56. > :14:00.When you have effectively got a public sector concern, and we all
:14:00. > :14:08.remember what happened with RBS, the taxpayer had to step in and
:14:08. > :14:15.foot the bill. People associated with the beginning of the real
:14:15. > :14:20.financial crunch that set in, it is 83% owned by the taxpayer. You say
:14:20. > :14:24.that, you would have stopped the bonus? In those circumstances, what
:14:24. > :14:29.I would have liked to have seen, you talk about an independent board,
:14:29. > :14:34.but I would like to see an independent ethos, a sense of duty
:14:34. > :14:38.on behalf of those running RBS to the wider public. Is this tone now
:14:38. > :14:44.coming from you about being harsher on this bonus and the bankers? You
:14:44. > :14:49.have been a great defender of them until now. I am a great defender
:14:49. > :14:52.Rob then! I have always said that RBS is different. Is it the fact
:14:52. > :14:57.that the Poles are narrowing and that Mr Livingstone is neck and
:14:57. > :15:06.neck or a little ahead of you in the mayoral election? A bit of
:15:06. > :15:10.I've always said RBS was different. I have never understood how you can
:15:10. > :15:15.have a Gosbank style set-up attracting the kind of reward. I
:15:15. > :15:19.will continue to stick up for bankers and the financial services
:15:19. > :15:25.industry in London. What has happened to you lead in the mayoral
:15:25. > :15:30.election? It is vital we support them, as for the mayoral election,
:15:30. > :15:33.we will see what happens and fight for every vote. I understand that,
:15:33. > :15:40.but if you said the opposite of that it wouldn't be worth running,
:15:40. > :15:45.but why has Mr Livingstone narrowed the lead or taking it away?
:15:45. > :15:50.Polls come and go and if you look over the last few years it has gone
:15:50. > :15:55.up and down, I will campaign very hard. A great case to make to the
:15:55. > :16:00.public about what we have done in London, crime has fallen by 10%, at
:16:00. > :16:03.the murder rate has gone down by 25%, it is one of the things people
:16:03. > :16:08.will catch and they like about London. When people talk about
:16:08. > :16:13.investing in our city they see a very safe city, one of the safest
:16:13. > :16:17.big cities in the world. Be see a place that is growing, pitting and
:16:17. > :16:21.the Tramp -- transport infrastructure the city needs, --
:16:21. > :16:26.putting it in at the transport infrastructure. People were worried
:16:26. > :16:33.about the Jubilee line a year or so ago, that is going three mph faster,
:16:33. > :16:39.we will go up to 30 trains per hour, come April this year. Those trains
:16:39. > :16:43.will convey people to the Olympic Park in great comfort. That
:16:43. > :16:45.investment is starting to pay off. I hope very much people will see
:16:45. > :16:50.that and I will be fighting on that record.
:16:50. > :16:54.We need to let you go to lobby more for London, get some more money
:16:54. > :17:00.into the city. If you take that slope behind due later in the day,
:17:00. > :17:04.try not to break a leg. Thank you.
:17:04. > :17:09.Last seen hobbling into the hospital. I asked him a question he
:17:09. > :17:13.didn't answer so I will ask you the same one, Daniel Finkelstein, why
:17:13. > :17:16.has his lead evaporated? The base problem for them -- for
:17:17. > :17:22.the Conservatives and Labour are doing much better in London. I was
:17:22. > :17:26.always surprised by the polls, whether you were really asking
:17:26. > :17:29.people questions he wanted the answer, he will have a real problem.
:17:29. > :17:33.Ken Livingstone is a poor choice of candidate for London. If they had
:17:33. > :17:36.chosen someone else, Labour could be assured of winning, but I do
:17:36. > :17:41.then they can be so Boris has got a very good chance, it will be quite
:17:41. > :17:44.close. The answer is the polls are beginning to focus a bit as the
:17:44. > :17:49.election comes closer. Maybe the remarkable thing is not
:17:49. > :17:56.he has gone from being favourites, but that Labour isn't 15 points
:17:56. > :18:00.ahead? It is Boris, I still cannot believe
:18:00. > :18:05.he is mayor of London. He has been there for four years. Every time I
:18:05. > :18:11.see his face ago, oh, you are the mayor. You're proposing running the
:18:11. > :18:15.Royal Bank of Scotland five minutes ago. It will be fine because what
:18:15. > :18:21.ever they do to -- because whatever I do to mess it up, the taxpayer
:18:21. > :18:25.will bail me out. Boris's great advantage is he is entirely
:18:25. > :18:31.unencumbered by political beliefs, he will say anything, do anything,
:18:31. > :18:35.to get the public vote. Why, given this is a left of centre
:18:35. > :18:40.city, there you have got a Conservative-led government
:18:40. > :18:45.presiding, and iconic left-wing figure, Mr Livingstone, why he --
:18:45. > :18:50.why is he not ahead in the polls? Partly because what Mr Johnson was
:18:50. > :18:55.an mentioning, when he was saying the Jubilee Line is going through
:18:55. > :19:04.mph faster, Boris, Tottenham was on fire, cordon was on fire. Why is
:19:04. > :19:11.Labour not ahead? People are frightened of civil unrest.
:19:11. > :19:21.would they vote... An interesting point. That is not the reason why
:19:21. > :19:23.
:19:23. > :19:31.If I can offer another idea, it is because Labour don't know which way
:19:31. > :19:38.is up at the moment. They cannot find their ideology. Can I point
:19:38. > :19:43.out to 2 euros that this here, this is not a real cigarette. -- Canon
:19:43. > :19:52.point out to our viewers. It is a fake cigarette. An electric
:19:52. > :19:59.cigarette, the future. I am on one person mission. I am not sponsored.
:19:59. > :20:03.Labour actually, a nationally, is doing quite well. Five point behind.
:20:03. > :20:07.Doing quite well in London. I'm sure it is not to do with people
:20:07. > :20:11.being concerned about civil unrest, the question is why it is Ken
:20:11. > :20:16.Livingstone not doing better, he is a board as a candidate. Labour
:20:16. > :20:20.don't have any ideas at the moment. We do not still say despite the
:20:20. > :20:23.narrowing of the polls which is significant, he knew of that,
:20:23. > :20:27.wouldn't you feel Boris is favourite to win? I am not sure
:20:27. > :20:31.about that. Labour will have us -- have to pull some policies out of
:20:31. > :20:38.summer, and natural alternative, if they want people to say it is worth
:20:38. > :20:43.us voted for a Labour government. thick, yes, narrowly. Labour has
:20:43. > :20:47.got strength in London and you cannot ignore that. Ken's great
:20:47. > :20:51.disadvantage is that he believes in something. You are saying he should
:20:51. > :20:59.be doing better. We will move on. The coalition says they want to
:20:59. > :21:03.give you the power of total recall over your MPs. It is the ability to
:21:03. > :21:09.force a by-election. Why has this come about? You may remember back
:21:09. > :21:13.in the misty days of 2009 When talk in the Westminster bubble was not
:21:13. > :21:23.of the euro crisis, capitalism, but the finer things in life, that
:21:23. > :21:23.
:21:23. > :21:27.houses, second homes, mansions. And then there was the false accounting,
:21:27. > :21:30.the MPs exposed in the scandal ended up being charged by the
:21:30. > :21:34.police and sent to prison. Even after they had been caught they
:21:34. > :21:43.were allowed to continue as MPs claiming their salaries until they
:21:43. > :21:49.were voted out at the 2020 general election. -- 2010. The Jonathan
:21:49. > :21:52.Aitken brandished his simple sword of truth, I remember it well. Neil
:21:52. > :21:56.Hamilton in boiled in the cash-for- questions affair involving Brown
:21:56. > :21:59.envelopes. In their constituents they had to wait for their
:21:59. > :22:04.constituents to get rid of them so a draft Bill giving people the
:22:04. > :22:10.power to recall MPs has been put before Parliament. Some MPs believe
:22:10. > :22:16.it just doesn't go far enough, including Zac Goldsmith, the
:22:16. > :22:22.Conservative MP for Richmond to joins us now. Why it doesn't go far
:22:22. > :22:26.enough? It is not recall. Recall is a really powerful mechanism, it has
:22:26. > :22:32.a potential to revolutionise politics, electrify politics and
:22:32. > :22:36.make MPs more responsible. But true recall means allowing constituents
:22:36. > :22:38.of either councillors or MPs or anyone in elected office to
:22:38. > :22:47.petition to have their representative recalled if they
:22:47. > :22:53.lose confidence in them. You hit a threshold... The trigger .. Every
:22:53. > :22:58.governor has faced an attempt in California. There are lots of
:22:58. > :23:05.attempt. Plenty of other places along -- beyond California. Your
:23:05. > :23:08.objection is MPs themselves, or the Commons chamber, as a seminal role
:23:08. > :23:12.in this proposed recall procedure. Under the current proposals instead
:23:12. > :23:16.of handing power back to people which is what we call is about, it
:23:16. > :23:20.is about handing power to a small committee of MPs who alone will
:23:20. > :23:26.decide whether an MP qualifies. What MPs think is wrong doing is
:23:26. > :23:33.not likely to be the same as constituents. So just to clarify,
:23:33. > :23:39.as currently proposed, the recall mechanism could not be triggered by
:23:39. > :23:45.the voters, a nest this committee of MPs -- unless this committee of
:23:45. > :23:49.MPs start it. It is quite sinister, it was designed to prevent MPs
:23:50. > :23:55.being recalled. It creates a lot of room for abuse. If you are a
:23:55. > :23:58.maverick or unpopular MP, but very popular locally, there is a
:23:58. > :24:03.possibility the committee will throw you to the walls. You don't
:24:03. > :24:07.have a referendum, should Zac Goldsmith be recalled? If I win,
:24:07. > :24:13.end of story. Under this scheme there is no middle step. 10% of
:24:13. > :24:16.people signing a petition, calling for recall, which they would if a
:24:16. > :24:19.parliamentary committee said they qualified, you go straight to a by-
:24:19. > :24:22.election way you are not fighting on the issues of recall, you are
:24:23. > :24:26.fighting in a national context. If you are a party trailing in the
:24:26. > :24:30.polls, you are out. If there are bigger issues, tuition fees,
:24:30. > :24:33.bankers bonuses, that is what you will be contesting. You will never
:24:33. > :24:38.have an opportunity to say I have been stitched up by my colleagues
:24:38. > :24:45.and not recalled so they give us huge power to the powers that be.
:24:45. > :24:51.It is empowers the voters. This is the opposite of recall.
:24:51. > :24:55.Are you in favour of the principle of recall, and you agree with the
:24:55. > :24:59.criticisms in the way we planned to do it? Both. You're either have
:24:59. > :25:05.recall or you don't. If you have it you have to do is seriously. There
:25:05. > :25:10.is of course the problem of troublesome vexatious recall, and
:25:10. > :25:16.you have to have mechanisms for attempting to prevent people.
:25:16. > :25:20.don't think the committee should be the arbiter? No. The problem is the
:25:21. > :25:23.whole idea of recall came about precisely because what Members of
:25:23. > :25:28.Parliament thought was reasonable behaviour were exposed to the
:25:28. > :25:36.electorate was not reasonable behaviour. -- when exposed. You can
:25:36. > :25:42.drop the whole idea if you don't think it is a good. -- any good.
:25:42. > :25:49.What is your position? I'm on the same page as Daniel. I hate to
:25:49. > :25:53.agree with Tories are anything. It is absolutely .. It might not be a
:25:53. > :25:59.real cigarette but it is not doing you any good. Her I have just
:25:59. > :26:04.swallowed something. I am yet to meet anyone who agrees, this is the
:26:04. > :26:08.worst piece of legislation I have seen in any context. MPs are
:26:08. > :26:15.unsettled by this, they were hoping it would prevent any kind of recall
:26:15. > :26:20.but they concede a sinister aspect of this and it will be very heavily,
:26:20. > :26:23.if it is a pose and approved, we will get a moment through.
:26:23. > :26:28.Still a possibility. I think we will win the campaign but it
:26:28. > :26:33.requires popular pressure. There is an MP's club as you will have found
:26:33. > :26:40.out. They kind of close ranks. seem to invent the Rome morality,
:26:40. > :26:44.this is what this is about. -- their own morality. What seems like
:26:44. > :26:50.wandering to the public might not seem like wrongdoing to MPs. Why is
:26:50. > :26:55.that? A good question but I cannot lit you answer, we have to move on.
:26:55. > :26:58.We will keep an eye on this. Very interesting idea.
:26:58. > :27:02.Thank you for being with us, Zac Goldsmith.
:27:02. > :27:09.If you liked it you called it the community charge, if you hated it,
:27:09. > :27:13.it was the poll tax. It was meant to be a simple and fair way for
:27:13. > :27:19.everyone who used them to pay for local services. Instead, it
:27:19. > :27:25.triggered some of the worst riots in decades. For critics, it defined
:27:25. > :27:35.Margaret Thatcher. They mark the beginning of the end -- it marked
:27:35. > :27:51.
:27:51. > :27:55.the beginning of the end. Was it a Much 31st, 1990, Trafalgar Square
:27:56. > :28:03.is turned into a battle zone. All- over, a new way to get people to
:28:03. > :28:08.pay for local services. -- it was all over a new way. 400 arrests,
:28:08. > :28:13.180 people and 20 police forces injured. The worst riots to hit
:28:13. > :28:16.London in a century. What caused the mayhem? A little something
:28:16. > :28:22.called the community charge. You might know it better as the poll
:28:22. > :28:27.tax. Those riots happened more than 20 years ago, adults caused by what
:28:27. > :28:30.is seen as a flagship policy of the Thatcher era. The idea was then,
:28:30. > :28:33.every adult paid a flat rate for council services with some
:28:33. > :28:36.reductions for the less well-off. John Gummer had been local
:28:36. > :28:40.government minister and had a ringside seat.
:28:40. > :28:46.It was that everybody should pay something, so that there was some
:28:46. > :28:53.balance between demand for services, and the fact you had to pay for
:28:53. > :28:58.them. Where did it all go wrong? would only work if you had a know
:28:58. > :29:02.enough starting point. We all recognise that. -- a low enough.
:29:02. > :29:06.The Treasury for not having it. If they didn't like the idea, they
:29:06. > :29:10.didn't want it, and he did everything to make it clear that
:29:10. > :29:17.they were not going to make the changes which were necessary, and
:29:17. > :29:23.above all, doing it in Scotland first, which was a mistake, not a
:29:23. > :29:27.purposeful one, but mistake, was a gigantic error. One of the first
:29:27. > :29:32.things John Major did when he became prone minister in 1990 was
:29:32. > :29:42.announced the community charge would be replaced by in levy based
:29:42. > :29:43.
:29:43. > :29:48.We know it was unpopular and that even its supporters think it was
:29:48. > :29:52.badly executed. But was it really a bad idea? It does have its admirers
:29:52. > :29:56.in the taxation community. Community job was a wheeze --
:29:56. > :30:01.community tax was a reasonable idea, everybody paid something into
:30:01. > :30:04.public services. The problem was that it wasn't sold very well.
:30:04. > :30:09.People didn't understand. It was not seen as being fair. As an idea,
:30:09. > :30:14.it had quite a bit going for it. The debate about how we pay for
:30:14. > :30:18.council services is still hugely controversial. Labour ignored a
:30:18. > :30:22.review of government finances in 2007. This government has said that
:30:22. > :30:26.no re-evaluation will happen until after the next election. So, is a
:30:26. > :30:31.poll tax idea whose time could come again? I think the poll tax has
:30:31. > :30:37.rather put politicians off local government finances. In a simple
:30:37. > :30:40.way, council tax values have not been operated 20 years or more. If
:30:40. > :30:46.we are to reform local government taxation, what is paid for local
:30:46. > :30:50.services, inevitably this idea of everybody paying something cannot
:30:50. > :30:54.be called the poll tax or community charge, but it needs looking at
:30:54. > :30:58.again. With a few tweaks it could work better than last time.
:30:58. > :31:02.first lesson for David Cameron is very simple. You've got enough
:31:02. > :31:06.troubles on your plate at the moment not to do anything about
:31:06. > :31:11.local government finance. I would not touch it. At some point and the
:31:12. > :31:21.future, we will be forced to do so. Then, I think, one has to be very
:31:22. > :31:22.
:31:22. > :31:26.much more... Imaginative. I suspect that the only real way of doing
:31:26. > :31:31.local government finance is through direct taxation. In the end, a
:31:31. > :31:35.local sales tax is probably what you have to do.
:31:35. > :31:40.You are a big supporter of direct action, protests, Occupy Wall
:31:40. > :31:45.Street, the City of London. This was a protest, it seems to me, that
:31:45. > :31:50.actually had an impact. It actually forced the Government not only to
:31:50. > :31:53.change its policy, but it led to the change of leader. Aviary
:31:53. > :31:57.powerful leader. Has any other protest in recent times have that
:31:57. > :32:02.impact? The thing about protests is that they change the mindset of a
:32:02. > :32:08.culture. They changed political realism. I think when we are
:32:08. > :32:11.talking about the poll tax, you have to talk about them as riots as
:32:11. > :32:16.well as protests. They are a different kind of political direct
:32:17. > :32:20.action. People do not plan for them. Rather than an orderly protest, it
:32:20. > :32:24.shows the hubris of the Government at the time. It relates very much
:32:24. > :32:30.to the hubris of the Government at the moment. There is only so far
:32:30. > :32:35.you can... Sure, but we have had riots recently, in London and Major
:32:35. > :32:39.cities. Some people would describe the student protests over
:32:39. > :32:44.university fees as riots, or parts of them led to riots. I'm trying to
:32:44. > :32:49.think where, in modern British Times, going back 30 years, it
:32:49. > :32:53.seemed to be the one protest that was violent, in parts, which
:32:53. > :32:56.actually forced the Government to change its mind. The real thing
:32:56. > :33:00.that changed the Government's mind was that, underneath it, you were
:33:00. > :33:06.talking about degree distributions, sometimes inside families, of very
:33:06. > :33:10.large sums of money. To do that without proper transitional
:33:10. > :33:14.arrangements, it was extremely unpopular. Not just unpopular with
:33:14. > :33:18.people that might go and drawing riots, but also one popular with
:33:18. > :33:24.the sort of middle England Tory vote. That is the reason why
:33:24. > :33:27.Margaret Thatcher lost. Do you believe it was the beginning of the
:33:27. > :33:33.end for Margaret Thatcher? At the review, that and the split on
:33:33. > :33:38.Europe. It had so that he was. -- absolutely, that and the split on
:33:38. > :33:42.Europe. It absolutely was. It could not have wood the General Election
:33:42. > :33:45.with her, so they thought the best thing was to get rid of her. If you
:33:45. > :33:50.think of a modern version of this, that has had the same policy
:33:50. > :33:54.impact? I'm sure the current government can think of a lot of
:33:54. > :33:58.versions of the poll tax riots. was asking if you could give me one
:33:58. > :34:02.example. I cannot think of one. think because we haven't had one
:34:02. > :34:07.yet, that is the point. The lesson of the poll tax riots is about
:34:07. > :34:10.political hubris. What you saw in the video, it was interesting when
:34:10. > :34:15.that man said that the problem with the poll tax was that it was not
:34:15. > :34:18.sold well enough. It was fine, they were not selling it well enough.
:34:18. > :34:23.That is the massive mistake you make with modern politics. It
:34:23. > :34:27.doesn't matter what you say, it is how you sell it. The British public
:34:27. > :34:31.can only be pushed so far. We seem like a nice little England people
:34:31. > :34:36.that like royal weddings and cups of tea, and then... It I know them
:34:36. > :34:39.too well, we are going to move on from that. Suasion, hubris, you
:34:39. > :34:44.don't get this sort of thing on the other programme.
:34:44. > :34:48.The debate over Scotland's future has been dominated by Alex Salmond.
:34:48. > :34:51.His job, if he is to win our referendum on independence, is to
:34:51. > :34:56.become Mr Scotland in the public mind, a 21st century William
:34:56. > :35:02.Wallace. Of course, William Wallace himself was home, drawn and
:35:02. > :35:11.quartered at a show trial at Westminster. Yesterday, their
:35:11. > :35:19.Lordships seemed bent on its Of course, he is cunning, a ball,
:35:19. > :35:24.he is a gambler. But he is not infallible. I know that already you
:35:24. > :35:29.will have seen that he is unable to answer some of the really searching
:35:29. > :35:33.questions about the reality of independence. One other aspect of
:35:33. > :35:39.the consultation paper is that he wants to rig the franchise and give
:35:39. > :35:43.the vote to 16 and 17-year-olds. My researchers tell me that there are
:35:43. > :35:50.only nine countries in the world that give the franchise to 16 and
:35:50. > :35:54.17-year-olds. Two of which are North Korea and Cuba, both of whom
:35:54. > :35:58.also half metres with a high opinion of themselves. -- have
:35:58. > :36:08.leaders with a high opinion of themselves. We are dealing with an
:36:08. > :36:08.
:36:08. > :36:14.extremely clever, extremely devious, extremely easy going, so it appears,
:36:14. > :36:22.until things are at a difficult stage and then he will put the sue
:36:22. > :36:28.him. Can I rephrase that Andy positive and say that he is
:36:28. > :36:35.successfully manipulative. That is a compliment, but he is. I have
:36:35. > :36:41.said repeatedly that members of Her Majesty's government, at their
:36:41. > :36:45.peril, underestimate him. He is not known as smart-alec for nothing.
:36:45. > :36:51.cannot sit here and here my good friend Alex Salmond been bad-
:36:51. > :36:54.mouthed, in the way that he has already been in this debate. It is
:36:54. > :36:58.for the noble Lords to decide for themselves whether the noises made
:36:58. > :37:07.in this chamber and heard in Scotland will help or hinder the
:37:07. > :37:12.Joining me now from Dundee is Stewart Hosie of the Scottish
:37:12. > :37:17.nationalists. If Alex Salmond was to fall under a bus, would the
:37:17. > :37:22.steam go out of the independence movement? No. This cause has been
:37:22. > :37:26.around for a long time. The leader of the SNP is doing a fantastic job.
:37:26. > :37:32.But the scheme would not go out. Your party is a bit of a one-man
:37:32. > :37:36.band, isn't it? It clearly isn't. Indeed, my recollection, when David
:37:36. > :37:40.Cameron blundered into the debate a few weeks ago, we put any number of
:37:40. > :37:45.politicians before cameras, including your own. Alex Salmond
:37:45. > :37:48.did not have to say anything for some days. There were enough able
:37:48. > :37:52.and competent politicians to take on the nonsense coming out of
:37:52. > :38:00.Westminster. Would you not agree that the sensible way to proceed,
:38:00. > :38:04.whatever the exact nature of the question, is to solve what is an
:38:04. > :38:09.extra central issue, if Scotland remains part of the union or not.
:38:09. > :38:17.If it votes not to be part, that remains for the terms of severance
:38:17. > :38:21.to be negotiated. If it votes to stay a part, you can go back to
:38:21. > :38:25.what the nature of that union should be. Would that not be a
:38:25. > :38:29.mature wake to proceed? It would be our way of proceeding, but better
:38:29. > :38:33.if we are having a referendum to decide Scotland's constitutional
:38:33. > :38:37.future, to ask the question which has been framed. To ask, at the
:38:37. > :38:41.same time, for those that want to go part of the journey with us, do
:38:41. > :38:47.you want more powers only? It is a perfectly mature and sensible
:38:47. > :38:53.approach. But your party policy is to ask only one question. That is
:38:53. > :38:57.right. Why are you arguing for two? We recognise a body of opinion that
:38:57. > :39:05.wants to go further than we are at the moment, but not to independence.
:39:05. > :39:10.It is right to test that democratically. This is sheer
:39:10. > :39:14.opportunity. You are afraid that he would lose a Yes-no. So you want to
:39:14. > :39:24.put in so that you get 70% of the cake instead of not at all? I am
:39:24. > :39:24.
:39:24. > :39:29.absolutely confident that we will win the ADS case. -- the yes case.
:39:29. > :39:32.It is a democratic principle, that Test bat against public opinion as
:39:32. > :39:36.well. The huge issue is if you will break up the United Kingdom,
:39:36. > :39:43.Scotland becomes a separate state with its own seat in the UN,
:39:43. > :39:48.although not in NATO. Let's resolve that one way or another. If the
:39:48. > :39:52.answer is no, we still want to remain part of the United Kingdom,
:39:52. > :39:55.then you can build on existing devolution. It sounds, to me,
:39:55. > :39:59.entirely logical and reasonable. The independence question will be
:39:59. > :40:03.settled. There will be an independence question. You're
:40:04. > :40:08.asking why we are doing two, let me ask the question a different way.
:40:08. > :40:13.The Liberals claim to believe in federalism in 1914. Why are they
:40:13. > :40:17.afraid to give federalism to the people in 2014? Let's test these
:40:17. > :40:22.opinions against public opinion and see who wins. I am confident that
:40:22. > :40:25.public opinion will win, but the people will decide, not the House
:40:25. > :40:33.of Lords. If you had somebody in there yesterday, you could have
:40:33. > :40:37.stopped your man getting a kicking. Daniel Finklestein, you have your
:40:37. > :40:43.ear at the Westminster regime, it is it a red line for Westminster
:40:43. > :40:47.that there should only be one question on the ballot paper?
:40:47. > :40:51.doubt it will turn out to be a red line. They wanted to be a red line,
:40:51. > :40:55.but I am not sure that it will be. You don't actually need to be,
:40:55. > :40:58.because I don't know what devo-max is. What are they asking the
:40:58. > :41:02.question about, what proposal of a putting forward that people will
:41:02. > :41:05.have a chance to vote for? Until that is much clearer and the
:41:05. > :41:13.consequences for English voters are clearer, I think it would be wrong
:41:13. > :41:16.to say that it is definitely a red line. They want to avoid Alex
:41:16. > :41:19.Salmond having to do that. I think they are not going to have as much
:41:19. > :41:23.trouble as they think, he hasn't been able to explain it in a way
:41:23. > :41:28.that means it doesn't have vast consequences for England. A final
:41:28. > :41:32.question, if the Scots did vote for you to go and negotiate the terms
:41:32. > :41:36.of independence and then you did, the Scot said, well, we do not like
:41:36. > :41:41.these terms, they are not very good. We should probably stick with the
:41:41. > :41:44.UK. You would not have a second referendum, would you?
:41:44. > :41:49.referendum would be very clear air, if you want Scotland to be an
:41:49. > :41:52.independent country. If people vote for that, Scotland will be an
:41:52. > :41:56.independent country. That is democracy and I am happy to stick
:41:56. > :42:00.to the will of the Scottish people. We have to stick to our time. It is
:42:00. > :42:09.good to see the Dundee road bridge behind you. I liked the rail bridge
:42:09. > :42:15.as well. It is so old that there is Time to look back at the big
:42:15. > :42:23.stories of the last seven days. Here is the week in 60 seconds.
:42:23. > :42:29.Crash, bank, wallop. Growth figures came in at -0.2 %, building fears
:42:29. > :42:32.of a recession. Tue, it is your fault! No, it is your fault!
:42:32. > :42:36.policies are failing the country. The party opposite has only one
:42:36. > :42:40.answer, to deal with a debt crisis by borrowing more and adding to
:42:40. > :42:44.death! The cat might fit, but the Lords refused to wear it.
:42:44. > :42:48.Government plans to limit welfare payments at �26,000 displeased
:42:48. > :42:52.peers, who voted to have child benefit excluded. Ministers say
:42:52. > :42:57.they will be back. Nick Clegg is speeding up plans to increase the
:42:57. > :43:03.tax threshold. I want the coalition to go further and faster in
:43:03. > :43:07.delivering the full �10,000. the Prime Minister got very little
:43:07. > :43:10.satisfaction as Mick Jagger pulled out of an event in Davos. He had no
:43:10. > :43:13.sympathy for the PR devil's he said were using him as a political
:43:13. > :43:19.football. It might be rock and roll, but he didn't like it and he was
:43:19. > :43:23.out quicker than jumping Jack Flash. Still, it is all over now.
:43:23. > :43:27.Are things going to get better for Ed Miliband? I am not sure about
:43:27. > :43:29.that. I couldn't care less what the Labour Party does until it stops
:43:29. > :43:36.supporting welfare reform in the Commons and comes up with an
:43:36. > :43:39.alternative to cuts. With what we have just seen, welfare cuts, 0.2%
:43:39. > :43:47.shrinkage, I think Scotland is looking nice at this time of year.
:43:47. > :43:52.I will be watching that devolution result. The thing is, poor people
:43:52. > :43:55.and people on low incomes overwhelm any support welfare reform. They do,
:43:55. > :43:59.a so the Labour Party would not be representative of the people that