03/02/2012 Daily Politics


03/02/2012

Andrew Neil presents the latest political news, interviews and debate.


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We have concluded there is sufficient evidence to bring

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criminal charges against both Mr Huhne and Ms Pryce for perverting

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:00:25.:00:55.

Afternoon, folks, welcome to the Daily Politics. Chris Huhne and his

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ex-wife have been charged with perverting the course of justice

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over a nine-year-old speeding offence. Mr hymn denies the charge

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but has resigned from the Cabinet to fight his case. -- Huhne. He

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clashed with David Cameron and other Tories more than once across

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the Cabinet table, now he has gone and a reshuffle is under way. It

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looks like David Cameron has issued a wider reshuffle, making it a Lib

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Dem affair. Nick Clegg has returned to Westminster could to consider

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Over the next 60 minutes, we will analyse the political fall-out from

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the dramatic developments and bring you the latest on what we will now

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call the Clegg cabinet reshuffle. With me for the duration, Rachel

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Sylvester of the Times and Medhi Hasan of the New Statesman. Now, it

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has been a long time coming, but this morning at 9am Energy

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Secretary Chris Huhne was told by the Crown Prosecution Service that,

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along with his ex-wife, Vicky Pryce, he was to be charged with

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perverting the course of justice. The crime carries a jail sentence.

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The CPS has concluded that Mr Owen did have his wife take the speeding

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points that he had incurred driving to London from Stansted airport one

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night in 2003. Ms Pryce is charged with being complicit. Mr Huhne has

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resigned from the Cabinet. Ms Pryce has said nothing about her guilt or

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innocence but is spending time with her family. The events unfolded

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when, at 10am, Keir Starmer, the Director of Public Prosecutions,

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took the unusual step of making a public statement to explain the

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decision. All the available evidence, including that, has now

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been carefully considered by the CPS. And we have concluded that

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there is sufficient evidence to bring criminal charges against both

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Mr Huhne and Ms Pryce for perverting the course of justice.

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The essence of the charges is that, between March and May 2003, Mr

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Huhne, having allegedly committed a speeding offence, falsely informed

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the investigating authorities that Ms Pryce was the driver of the

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vehicle in question, and she falsely accepted that she was the

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driver. Accordingly, summonses against both parties have been

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obtained from Westminster magistrates court, and those

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summonses will now be served upon them. They are due to appear in

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court on the 16th February this Within the hour, a defiant Mr in-

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off made his resignation statement from outside his home in central

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London. -- Mr Wood. I have a short statement. The CPS decision today

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is deeply regrettable. An innocent of these charges, and I intend to

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fight this in the courts, and I am confident that a jury will agree.

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So has to avoid any distraction to either my official duties for my

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trial defence, I am standing down, resigning as energy and Climate

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Change Secretary. I will, of course, continue to serve my constituents

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in Eastleigh. Thank you, that is all I want to say today. And that

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:04:36.:04:49.

was all he did say. His ex-wife, So that is the statements of the

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two people who have been charged. We are joined by Lembit Opik and

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the editor of the liberal magazine. Let me come to you first, give me

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your initial reaction to these events. I think it was expected by

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of the Liberal Democrats. Chris Huhne is one of the first Lib Dem

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Cabinet ministers since the war, these five Cabinet ministers, and

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they have lost Jay already in less than two years. That is not good

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for the Liberal Democrats. For Chris Huhne, it is a personal

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tragedy, because he was an ambitious man, a high-flyer.

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Regardless of the outcome of the court case, it is difficult to see

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him coming back to frontline politics. He was on the verge of

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leading his party. Something that he actually won the election.

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to the personal tragedy of this. This was a speeding offence, not

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personal corruption, money in brown envelopes or ministerial

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incompetence. The view is that he was a pretty good minister, and it

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is a real shame he has had to stand down over something so long ago

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that seems so minor. It is the Watergate principle, not the actual

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original crime or offence that is the issue. It is, quote, the cover

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up, which the CPS think there has been. No, exactly, it is very sad

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for him, and I think you're right that it is bad for the Liberal

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Democrats. He was a strong voice for them in the Cabinet, and

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putting them on to the backbenches, they will feel one of their biggest

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Representatives has gone. Emma may not be a bad thing for the earth --

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it may not be a bad thing for the Liberal Democrats, I will explain

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why in a minute. There is a political dynamic it, a public

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dynamic and a legal one. The still innocent until proven guilty, and

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it is dangerous for us to give the impression that he has been found

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guilty. We are not doing that. just emphasising that. Let's get to

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the politics of it, I want to talk about the politics. The people can

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see the difference between what has happened to Chris Huhne as an

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individual and the party as a whole. Lib Dems have got all kinds of

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problems, but this is not one of them. What will it do to the Lib

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Dems? It could lead to readjustment. If he is found innocent, he becomes

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a different powerbase within the party. That could be an interesting

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dynamic between him and Nick Clegg. To be found innocent, in a sense,

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is Nick Clegg's worst political nightmare, because Mr Huhne then

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goes to the backbenches, remains MP for Eastleigh, and he becomes the

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rallying cry for the 8th Left opposition inside the party to the

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coalition. I would say it has been hit by a day for the Liberal

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Democrats because he headed what is possibly the most successful

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ministerial party -- ministerial role for the party, which is key to

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the grassroots. If he comes back, he will be a figurehead for

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opposition at the left of the party. What he secured at the ministry was

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considerable, a pledge against many of the protests of the

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Conservatives to cut emissions by half by 2025. That really does

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appeal to left-leaning Lib Dem grass roots. It is why the Tories

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are very happy this morning. They are happy, and that is why Nick

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Clegg is concerned, because further to what you said, if he is

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acquitted, he will be a figurehead of dissent. I think there is a

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danger of exaggerating his left the nest. He would say that of most

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people! I would say especially about Chris Huhne, because I was

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sympathetic to him before the election. In the coalition

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negotiations, talk to the Labour members, he was one of the most

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zealous advocates of a coalition with the Tories. He did a joint

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press conference with the Tories, a party political conference in 2010

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attacking Labour, and a lot of people who thought of him as a

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fellow traveller thought, wait a minute, he has gone native, too! He

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has made lots of noises about AV. Is a very savvy politician. He is a

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pragmatist and very ambitious. If he gets cleared, the existing

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leadership is going to be very concerned. Their minds they are

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both part of the Orange Book corpus, the caucus that runs the party, so

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I do not think they are very different politically, but he is

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very ambitious, and it is a nightmare coming home to roost it

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is and isn't. There is no love lost between Mr Huhne and Mr Clegg. He

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depicted him as A calamity Clegg during the leadership campaign, and

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Mr Clegg made jokes about there being nobody better than him for

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getting his points over. They were rivals for the leadership. I was

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there when he said it! They were friends and rivals in the European

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Parliament, then they were friends and rivals in parliament, rivals

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for the leadership, but since then they have served in the cabinets

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together, and if anything, Chris Huhne has been standing up more to

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David Cameron than to Nick Clegg. That is where the rivalry has

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developed. The smallest of violins will be being played in Number Ten,

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let's be honest, they did not like Mr Huhne. They like Ed Davey, who

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is being tipped as his replacement. Chris Huhne was a contributor to

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the Orange Book. So was Vince Cable! It was quite a broad colour.

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He is not seen as an honorary camera and, as Ed Davey is. This

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David Laws comes back, that is good for George Osborne and David

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Cameron. They will be pleased by that. You say it is not bad for the

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Lib Dems, but the point that you have got five Cabinet ministers for

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the first time since Lloyd George out of war. And you have lost 40%

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of them! As I say in my book, which comes out at the end of the month,

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it allows me to analyse this. The loss of David Laws was catastrophic

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in the sense that he was the architect of the Orange Book

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corkers. He is an Orange Book person. He basically designed it.

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So why is it not a disaster? With Chris Huhne, he was not the

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architect, as you have said. He was not seen as the core progenitor of

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the Orange Book. That does not mean, you have lost 40% of your Cabinet

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ministers, and you have not had any since Lloyd George! If the Lib Dems

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strategy is all about differentiation, you lose the best

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advocates of that in the Cabinet. No problem making himself ethernet

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-- a different at the Cabinet table! That is the underlying

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problem that the party has, a lack of differentiation. You are close

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to the grassroots, you have got this magazine and all the rest of

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it. How do you think this will play? I think that many grassroots

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members will be disappointed that such a key post, environment, one

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of the few where the Lib Dems seem to have stood up, drew a line, and

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they were getting... I mean, in terms of fighting with George

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Osborne, as Chris Huhne was what to do on economic issues, saying we

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are not going to allow environmental targets to be watered

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down because of the economic crisis, this was a real line in the sand,

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and when the Lib Dems have given up so much, VAT, tuition fees,

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spending cuts, all of that, I think that this is not the final straw,

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but it is totemic for the party. I think many grassroots will be very

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upset. A bad day for windmill manufactures! We will have a

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moment's silence for them. Not very silent, we will just move on. How

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will the news changed the composition of the government? As

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you have heard, Chris Huhne has exited stage left for now. The

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rumour mill suggests he will be replaced as Secretary of State for

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Energy and climate change by this man, Ed Davey, the MP for Kingston

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and Surbiton in London. He is currently a junior minister in the

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Department for business with responsibility for employment

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relations and consumer affairs. Speculation is that if Mr Davey is

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promoted, his portfolio will go to Norman Lamb, Nick Clegg's

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parliamentary private secretary and chief political adviser, very close

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to Mr Clegg. And if he does move into that official government job,

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some people in the village are suggesting that his new

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parliamentary aide could be, well, a familiar face! Yes, David Laws,

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who was the last Lib Dem to resign from the Cabinet. We are joined now

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by Adam Fleming. The Cabinet reshuffle is still being cooked,

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but my sense is that it is actually done and dusted and just needs to

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be announced. They have quite cleverly, Mr Cameron and Mr Clegg,

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let the media know what is going to happen. This is one we baked

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earlier, that is what they are telling us. Yes, a prix BECTA

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reshuffle, that is the hint that is being dropped behind the scenes. A

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huge frenzy are speculation about how the reshuffle will work out,

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but speculation much more limited than it used to be in the old days

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of 2005, when you have one party in government. The issue is now, with

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coalition, there is a deal about how many cabinet ministers each

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party gets around the top table of government. As our guests have been

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saying, the Liberal Democrats get five, so that means today's

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reshuffle is limited to Liberal Democrats only. In the past, the

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Prime Minister would have been able to pick and choose who we wanted

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and put people into positions. As you said, the speculation this

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morning is that Ed Davey, the junior business minister, will step

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up to join the Cabinet to take over from Chris Huhne, which means that

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Norman Lamb, a close adviser of Nick Clegg, will take that job,

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working with Vince Cable in the business department. As he said,

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the big question mark over David Laws, is he going to get his chance

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to return to government after he had to quit just three weeks into

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It is interesting to look back at what happened when Liam Fox quit

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last year. It was a Tory any reshuffle with the movement of Tory

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ministers and junior ministers and nothing wider than that. This is

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new for us and is a consequence of coalition government that the

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decision by David Cameron not to have a wide-ranging reshuffle but

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too narrow the damage, it means in effect it is not a Cameron

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reshuffle, it is a Clegg reshuffle. We expect Nick Clegg to make a

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statement in the next half an hour so we will hopefully be able to get

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it live on the programme. There is speculation about whether he will

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use that statement finance these new ministerial appointments. Will

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the Prime Minister announced the appointments from Downing Street? I

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suspect it will be Nick Clegg. The whole thing behind the scenes is

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that the parties covered up between themselves. It is not like the old

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days when the whole Cabinet would be moved around. We had problems

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when Tony Blair did it. We are always being told by sources close

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to David Cameron behind the scenes that he is not a big fan of

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reshuffles, having seen how they go disastrously wrong. We are told he

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does not want to have a big revamp of the Cabinet in his first couple

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of years. If the reshuffle happens while we are on air, we will bring

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it to live. They have handled this quite well, have they not? They put

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:17:01.:17:01.

in place the pan to make it seem less. Mr Clegg would make -- take

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the initiative. What is fascinating is how coalition is limiting

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reshuffles. You're not getting huge shake-up so of the Government.

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There have been a lot of mutterings within Number 10 about people not

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liking Ken Clarke or Andrew and spree. If it were not a coalition

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government, you would have had a much wider reshuffle with people

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from all departments. Because it is a coalition, room is limited.

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have three Cabinet ministers who have gone. All went for personal

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problems. None of them have gone for policy. The real resignation is

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they Andrew Lansley resignation. Why do you think that? Will he

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resign or will he be kicked out? will be asked to resign, I suspect,

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before the end of the year. That is the big one. That will be about

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government policy. If the reports are right, they have chosen not to

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do the wider reshuffle which has been discussed, at this point.

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will it play outside this Westminster village to the idea?

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People are quite sensitive about this. Chris Huhne has to resign

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because there are criminal charges against him. As part of the

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reshuffle that follows, if you bring back David Laws, who had to

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resign because of malpractice with his expenses. Plain folk will think,

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how does that work? It does not play well at all. Nick Clegg wanted

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to bring back David Laws much sooner. It is interesting with the

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introduction of a Davies. He is very loyal to the circle of Nick

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Clegg. He is a curiously modern politician. He does not stick his

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ideological colours to the mask. Many people are curious about where

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he stands on many things. He moves in a circle with performers. It is

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not sure where he will be. It was catastrophic you had the architect

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thrown out for whatever reason. Bringing him back may be costly in

:19:25.:19:29.

public relations but it is important strategically. If there

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is one thing that will harm the Lib Dems, it is the feeling that

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something bad has happened in the party. You are all referring to the

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Orange Book. That was written by a number of senior Liberals. It was

:19:44.:19:47.

called the Orange but because it was coloured orange and it was

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liberals who tended to come from more market orientated than

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collectivist wing. I have a book. It is by my bed, particularly when

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I cannot get to sleep. I use it quite a lot. It is an interesting

:20:08.:20:16.

book. The Treasury was beginning to take on climate change policies. Mr

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Osborne referred to that at the Tory conference, in his speech.

:20:21.:20:25.

Behind the scenes there have been even more. Mr Hume was a strong

:20:25.:20:35.
:20:35.:20:38.

figure in his own right, he was across his brood -- breach. During

:20:38.:20:46.

the baby referendum, there was the infamous moment when Chris Huhne

:20:46.:20:52.

asked if he would resign. Areas that personal link. I think the

:20:52.:20:58.

Treasury made it clear in its conference. They were under

:20:58.:21:02.

pressure from the Daily Mail wing of the media. There were barriers

:21:02.:21:12.
:21:12.:21:12.

to growth. Get rid of the factions. Will he stand up to that? He was

:21:12.:21:17.

therefore a -- he was there from the start. It does not seem to be a

:21:17.:21:24.

big issue. How will it go down if, as he may be entitled, he gets

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�17,000 in redundancy for leaving the Cabinet? That is not a big

:21:30.:21:35.

issue. Do you think he should take it? Politicians have been there a

:21:35.:21:45.

keen to get Mr Heston not take his bonus. Chris Huhne, like David Laws,

:21:45.:21:55.
:21:55.:21:56.

has a reputation problem. He has nine houses, or conveniently priced

:21:56.:22:02.

under 2 million. David Laws, as an ex banker, they have our

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expectation issues. If the Liberal -- bear our expectation issues. If

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the Liberal Democrats were to use - - lose this along with other

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policies and ideological points they had given in, political and

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ecological, I do think there will be problems. Nick Clegg has to bear

:22:26.:22:34.

that in mind. Maybe by bringing David Laws in, it will strengthen

:22:34.:22:39.

him. They are super loyal. He is stronger now but for the reasons

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you have just said. If the environment begins to slip off the

:22:44.:22:48.

agenda, the Lib Dems will have trouble at the back of the ranch

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quite even if the public is not so concerned about that. Should he

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have resigned? What would he have been designing for? He is claiming

:22:59.:23:05.

his innocence. We will find out in a few weeks' time what happens.

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Should he have resigned the England captaincy? It is the same. He has

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had to resign for something that was off-pitch. It has the strange

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and agree. A good day for Ed Miliband to do a speech. Eastleigh

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is the constituency that Chris Huhne represents on the south coast

:23:28.:23:35.

of England. It looks on to the Isle of Wight, which touches the sea. He

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has shied of just 20,000 votes. The Conservative have just over 21,000

:23:42.:23:46.

votes. There was a majority of 4000. The Labour vote was clearly squeeze

:23:47.:23:52.

because Labour people voted for Chris Huhne, to keep out the Tories.

:23:52.:23:56.

There would have to be a by- election if he is found guilty.

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he is found guilty, the game is up for him. He is the first Cabinet

:24:04.:24:11.

minister in more than 200 years to be charged with a criminal offence.

:24:11.:24:18.

I read back somewhere. You need to be lucky in politics. Chris Huhne

:24:18.:24:23.

only narrowly lost in the battle to lead the party. He might have been

:24:23.:24:29.

Deputy Prime Minister but for a few votes in the leadership election.

:24:29.:24:34.

It would be a global story today if it were the Deputy Prime Minister

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facing criminal charges having to resign. Instead it is the Energy

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Secretary. His political career is potentially in tatters. It has

:24:44.:24:49.

certainly changed. Now we look back at the Korea. He has been a

:24:50.:24:54.

journalist and an MEP. He is a millionaire and reported --

:24:54.:24:59.

reportedly the owner of eight properties. He is the second Lib

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Dem to leave the Cabinet. He won Eastleigh in Hampshire for the Lib

:25:03.:25:08.

Dems in the 2005 general election. He ran for the leadership of his

:25:08.:25:12.

party, losing out to Menzies Campbell. A year after that he lost

:25:12.:25:16.

out to Nick Clegg - just - in a further leadership contest, which

:25:16.:25:21.

became fairly bad-tempered. Why had he issued a briefing document

:25:21.:25:26.

called Calamity Clegg? I have not. This came from your office on

:25:26.:25:32.

Friday to the Politics Show. I am sorry. I did not see it. Do not

:25:32.:25:36.

know what goes out of your office? It is impossible to check

:25:36.:25:40.

everything that goes out of the office. It is a large campaign

:25:40.:25:44.

going right the way across the country. It has not had my

:25:44.:25:48.

authorisation. He was authorised to negotiate the coalition agreement

:25:48.:25:54.

with the Tories. The climate change Secretary was one of five Lib Dems

:25:54.:25:57.

in the Cabinet. He often caused tension around the table,

:25:57.:26:03.

especially during the referendum on changing the voting system when he

:26:03.:26:06.

confronted the Prime Minister over the conduct of the no campaign.

:26:06.:26:11.

have never come across an election campaign of this nature in all my

:26:11.:26:16.

years involved in campaigning back to the early 1980s, where we have

:26:16.:26:21.

had and -- a repeated untruth may buy the other side in this way. It

:26:21.:26:25.

is a new low in British politics. At the same time his family life

:26:25.:26:30.

became big news. His marriage to Bickley price collapsed, leading to

:26:30.:26:34.

the claims about speeding. He said he was in a new relationship with

:26:34.:26:40.

his press adviser, who was seen by his side on election night. What

:26:40.:26:45.

was personal became deeply political. We're joined now from

:26:45.:26:48.

Salford by the Lib Dem MEP Chris Davies who worked side by side with

:26:48.:26:55.

Chris Huhne for many years in the European parliament. He was

:26:55.:26:57.

returning from the European Parliament on the fateful night

:26:58.:27:01.

when the speeding took place and the whole argument about who took

:27:01.:27:06.

the points has led to today's events. Chris Huhne is very smart.

:27:06.:27:12.

He is tough, he is a fighter. How will he be feeling this morning?

:27:12.:27:19.

How would you feel? I would be devastated. Absolutely. I do not

:27:19.:27:24.

think he can be anything other than that. It is not just one career

:27:24.:27:30.

that has been hugely damaged, it is the key price as well. She is a

:27:30.:27:35.

hugely talented woman was that they have both been brought down by this.

:27:35.:27:39.

Was he popular among Lib Dems question that he had an ability to

:27:39.:27:45.

rub people up the wrong way. -- among Lib Dems? The vast majority

:27:45.:27:52.

of MEPs voted for Nick Clegg. That is not because they thought Chris

:27:52.:27:57.

Huhne had less ability. He does have an ability to rub people up

:27:57.:28:06.

the wrong way. He is very self- confident, very ambitious. He is

:28:06.:28:14.

pugnacious. Less easy to have dinner with. If you look at the

:28:14.:28:19.

coalition post, let's assume the stuff we are being fed by the

:28:19.:28:24.

Government machine is accurate, it may not be but we are being fed it.

:28:24.:28:30.

It is Ed Davey, Norman Lamb and David Laws coming in almost as a

:28:30.:28:34.

political adviser to Nick Clegg. Does it change the coalition very

:28:34.:28:40.

much? I do not think it changes the policy in any sense. I doubt

:28:40.:28:45.

whether we will find anyone around the Cabinet table laying down his

:28:45.:28:50.

fist right -- quite in the way that Chris Huhne has done. Many Liberal

:28:50.:28:54.

Democrats like the idea we have a minister who is prepared to blow

:28:54.:28:58.

his top and let off a jet of steam in the direction of the

:28:58.:29:03.

Conservatives from time to time. One bigger thing which is not being

:29:03.:29:09.

looked at the moment is his role on the European stage. He has just

:29:09.:29:17.

come from the climate change conference in Durban. They managed

:29:17.:29:24.

to bring in India and China into what we hope will prove the next

:29:24.:29:28.

stage of aggressive climate change negotiations, leading to a binding

:29:28.:29:34.

treaty. He will be sorely missed among climate change people. Chris

:29:34.:29:42.

Huhne is not personally popular among Lib Dem activists... No, no,

:29:42.:29:47.

he almost beat Nick Clegg so you cannot say that. A bit like going

:29:47.:29:54.

back to the old days, he is the Pardoe and Nick Clegg is the David

:29:54.:30:02.

Steel. My emphasis was about personal popularity. He stood for

:30:02.:30:06.

policies that were popular with Lib Dem at this and they will regret

:30:06.:30:11.

his departure. I do not think you could put a paper between Nick

:30:11.:30:16.

Clegg and Chris Huhne when it comes to policy. It is style. I am sure

:30:16.:30:21.

you know that, behind the scenes, Nick Clegg is doing an incredible

:30:21.:30:28.

job in dealing with the whole work of government, trying to make sure

:30:28.:30:30.

that Liberal Democrats can live with what is coming out of a

:30:30.:30:40.
:30:40.:30:40.

coalition where we are outnumbered four to one. It is a difference in

:30:41.:30:46.

style. You seek Nick Clegg on the green benches trying to keep his

:30:46.:30:50.

face expressionless when the Prime Minister is saying this or that.

:30:50.:30:54.

Chris Huhne has a harder job at doing that. Liberal Democrat

:30:54.:30:58.

activist do not feel cut well being in coalition with the Conservatives.

:30:58.:31:03.

That is a fact of life. You say you cannot put a cigarette paper

:31:03.:31:07.

between the two on policy. You're not trying to tell us we're bosom

:31:07.:31:17.

No, and that rivalry became better during the leadership contest. It

:31:17.:31:23.

goes back further than that. Chris is ambitious and self-confident and

:31:23.:31:27.

pushy, and that is what you wanted a minister, I do not deny that by

:31:27.:31:32.

second, but remember that Chris, after he had only been in

:31:32.:31:35.

Parliament for a year or two, stood against Ming Campbell to be leader.

:31:35.:31:39.

Nick Clegg could have done so, too, but he thought they had an

:31:39.:31:44.

arrangement not to do it. You know, there is no question that Chris is

:31:44.:31:48.

capable of running Nick Clegg up the wrong way, and yet I suspect

:31:48.:31:53.

that not for a second would Nick have wanted this to happen. He

:31:53.:31:58.

wanted Chris Huhne alongside him, because he added to the team.

:31:58.:32:03.

to see Salford so resplendent behind you there! What you make of

:32:03.:32:10.

that? Suspect, in a scheme of things, obviously a Lib Dem leader

:32:10.:32:13.

does not want resignations from his ranks, but as Lembit Opik pointed

:32:13.:32:17.

out, it is good for Nick Clegg in the long run. It strengthens his

:32:17.:32:22.

and Borders. There is no challenger to his leadership now. -- his

:32:23.:32:27.

supporters. Even outside of the Cabinet, Tim Farron is not a

:32:28.:32:31.

serious challenger. If he is found innocent, returns to the

:32:32.:32:35.

backbenches and become a lightning rod for the Social Liberals, it

:32:35.:32:40.

could be a problem. At the moment, Clegg is secured and the

:32:40.:32:43.

relationship in cabinet his mother. Clegg himself is now trying to

:32:43.:32:47.

differentiate more than the Conservatives, and it would have

:32:47.:32:51.

helped him to have more differentiate us alongside him,

:32:51.:32:57.

which Chris Huhne would have been. We will return to that story later

:32:57.:33:01.

in the programme, particularly if we get the Clegg cabinet reshuffle,

:33:01.:33:05.

as we are calling it, but Stephen Hester turned down his bonus, Fred

:33:05.:33:09.

Goodwin lost his knighthood, but for Ed Miliband this is only the

:33:09.:33:14.

start. He wants to see wholesale reform of the banking system. He

:33:14.:33:19.

calls it responsible capitalism. And that was is the money spoke to

:33:19.:33:23.

an audience in the City of London this morning. -- his theme when he

:33:23.:33:27.

spoke. In my view, we need to learn the most important lesson of this

:33:27.:33:32.

week, which is that the banking sector cannot be divorced from the

:33:32.:33:37.

rest of the economy and the rest of society. As a country, we succeed

:33:37.:33:45.

or fail together. It is not about the politics of envy. It is about a

:33:45.:33:50.

culture of responsibility. It is why we need what I call one-nation

:33:50.:33:55.

banking in this country. So this is a call for banking to recognise

:33:55.:34:00.

that continuing on its current path will lead to further isolation from

:34:00.:34:07.

society, greater public anger and more years in which banking is a

:34:07.:34:12.

subject of lurid newspaper headlines. This is a call on

:34:12.:34:17.

banking to recognise that it needs to find a different path. To

:34:17.:34:21.

recognise, above all, it is not isolated from the economy or

:34:21.:34:25.

society, to recognise that we succeed or fail to get up. We are

:34:25.:34:30.

joined now by Labour's shadow Business Secretary, Chuka Umunna,

:34:30.:34:33.

who joins me from Berlin with the Brandenburg gate behind him, it

:34:33.:34:40.

looks almost as nice as Salford! Your leader says... Hi, Andrew, it

:34:40.:34:47.

is very cold here, I can tell you! Mr Miliband says banks cannot be

:34:47.:34:50.

isolated, segregated economically, geographically and socially. Isn't

:34:50.:34:56.

that what happened under the Blair- Browne years? Well, look, we have

:34:56.:34:59.

had issues grow with our financial services sector of the last three

:34:59.:35:03.

decades, but the question is how you reform and change it. The point

:35:03.:35:07.

that Ed was making is that we depend on each other in the sense

:35:07.:35:11.

of, of course, the financial services sector benefits from an

:35:11.:35:15.

implicit tax they guarantee, it relies on society to provide it

:35:15.:35:18.

with the talent and skills to run our big banks, but also we rely on

:35:18.:35:23.

it not just to provide a social utility function, which is

:35:23.:35:27.

important to us as individuals, somewhere we can store harmonies,

:35:27.:35:33.

but also our small and medium-sized businesses are massively reliant on

:35:33.:35:35.

financial services for funding. That is one of the reasons I am

:35:35.:35:39.

here in Germany, to find out how the banking sector here, among

:35:39.:35:45.

other things, supports their small and medium-sized businesses here,

:35:45.:35:48.

and I think there's quite a lot we can learn, in particular from the

:35:48.:35:54.

savings banksia, which have a much better, if you like, relationship

:35:54.:35:59.

with their businesses. The people here, their business and banking

:35:59.:36:02.

structure is very low court in its native. The people running local

:36:02.:36:07.

banks get to know the businesses. They are any good position to

:36:07.:36:10.

assess risk and provide support. We have not seen that so much in the

:36:10.:36:15.

UK. This is part of the overall transformation that we need to see

:36:15.:36:20.

so that the sector does what we need to do but also so that we can

:36:20.:36:24.

re-establish trust in it, because that is very important. You are

:36:24.:36:27.

treading a well-trodden path. Labour politicians have been going

:36:27.:36:31.

to Germany to study that since Hugh Gaitskell, and you were not even a

:36:32.:36:37.

glint in your father's eye when he was around! Are you really saying

:36:37.:36:39.

there is any possibility that a Labour government is going to

:36:40.:36:46.

promise to bring in the German system of supervisory boards and

:36:46.:36:49.

floorboards and so on? A total revolution in corporate board

:36:49.:36:54.

structure? It may be right or wrong, but is there any possibility what

:36:54.:36:59.

promised to do that? Well, we have already said... Well, what we need

:36:59.:37:04.

to do is look at the international examples of good practice that have

:37:04.:37:08.

worked and then work out, figure out how to transpose that where

:37:08.:37:11.

appropriate to a UK context. We have not only be looking at Germany.

:37:12.:37:16.

I was in the United States, looking at the Small Business

:37:16.:37:18.

Administration in particular, the small business investment company

:37:18.:37:23.

scheme, which gets money going to businesses over there. We have also

:37:23.:37:27.

been to Singapore, too. If you look at the current debate on executive

:37:27.:37:30.

pay and remuneration, one of the things that they do here which we

:37:31.:37:34.

have suggested and can be quite easily implemented in the UK is to

:37:34.:37:37.

have an employee on the remuneration committees of boards

:37:37.:37:41.

which set pay. John Lewis have that kind of model in their business. I

:37:41.:37:46.

would not say that it is a case that we can just take things in

:37:46.:37:49.

Germany or the US and literally implant it exactly the same in the

:37:49.:37:54.

same form in the UK, but we can take the principles, we can look at

:37:54.:37:58.

how they do things and how we could transpose those across to a UK

:37:58.:38:03.

setting, which is more appropriate to us. But what is clear that after

:38:03.:38:08.

the crash, the status quo is not good enough for the country and our

:38:08.:38:13.

businesses. We have not got too much time, and I want to move on.

:38:13.:38:23.

Mr Miliband said that MPs, he will ask MPs to end on the bonus culture,

:38:23.:38:27.

and it will not be legislation, it will not be binding. In other words,

:38:27.:38:32.

it is just grandstanding. I do nothing that is fair at all,

:38:32.:38:35.

because look, there has obviously been a very big public debate that

:38:35.:38:38.

has occurred over the last couple of weeks, and really Parliament has

:38:38.:38:42.

not had a chance on behalf of the people... The reason that

:38:42.:38:45.

politicians have been talking about excessive pay and rewards for

:38:45.:38:49.

failure is because, Andrew, people raise it with us all the time in

:38:49.:38:52.

the constituencies. This is a chance for us to give life to the

:38:52.:38:56.

debate that is happening outside Parliament so that it is inside

:38:56.:39:00.

Parliament and Parliament can express a view. That is part of our

:39:00.:39:05.

constitutional function. Will you call a debate for Bob Diamond's

:39:05.:39:12.

bonus at Barclays? No, because this is not about a fatwa against... It

:39:12.:39:17.

is not an aim to go against a particular individuals. He went

:39:17.:39:21.

against Mr Hester, why not Bob Diamond? His bonus will be 10 times

:39:21.:39:26.

bigger! Yes, and of course this is one of the reasons that the vote

:39:26.:39:32.

will be about the reintroduction of a bank bonus tax, which will impact

:39:32.:39:35.

on people like Mr Diamond and many others who are earning very large

:39:35.:39:40.

sums of money in the financial services sector at the same time as

:39:40.:39:46.

performances falling. What about... As I said... Andrew, as I said the

:39:46.:39:51.

purpose... There is going to be a RBS bonus pool of �500 million.

:39:51.:39:55.

That is about to be paid out, and it does not include Stephen Hester.

:39:55.:39:59.

Mr Hester is not the best-paid person at RBS, there are several

:39:59.:40:02.

people paid much more than him. What is Labour going to do about

:40:02.:40:09.

that? When you call a vote in a house on that? Well, the vote is on

:40:09.:40:12.

the reintroduction of the bank bonus tax, at the bank bonus tax

:40:12.:40:16.

applies to the bonus pools in the different banks, so that would

:40:16.:40:21.

impact on all the people that you have just spoken about. OK, but I

:40:21.:40:25.

see that is not a vote. Thank you for joining us from Berlin. Well,

:40:25.:40:33.

it is a vote, as I said. Your reaction to Mr Wood's resignation.

:40:33.:40:37.

Well, of course, it is regrettable for him, but it is very important

:40:37.:40:41.

that the course of justice is allowed to follow this course, and

:40:41.:40:44.

I do not think it would be proper for me to comment on the

:40:44.:40:48.

particulars of the case now that a full criminal legal proceeding is

:40:48.:40:52.

in process. What is important is that justice is done and seen to be

:40:52.:40:55.

done, and that well before the courts to decide in terms of they

:40:55.:41:02.

will make findings of fact and make a decision and judgment upon that.

:41:02.:41:06.

D-pawn in Berlin, keep your coat on when you get back here, because I'm

:41:06.:41:10.

not sure you will notice much of a difference! We have got Eastern

:41:10.:41:13.

European temperatures here at the moment. Thank you for joining us.

:41:13.:41:16.

While we were speaking to the Chateau Business Secretary, we

:41:16.:41:23.

learnt that Ed Davey IS the new Energy Secretary. We caught for a

:41:23.:41:26.

second that Mr Clegg was going to make an announcement that. It is

:41:26.:41:32.

confirmed, yes, the DPM coming out. This is his Cabinet reshuffle, and

:41:32.:41:35.

it is going to be limited to Lib Dems. The Prime Minister deciding

:41:35.:41:42.

not to have a wider one. understand and respect why Chris

:41:42.:41:44.

Huhne has stood down from his position in government to clear his

:41:44.:41:49.

name. Chris Huhne is a good friend and a close colleague writing has

:41:49.:41:56.

done an outstanding job as a Secretary of State for the

:41:56.:41:59.

Environment, for energy and climate change. He has really been a

:41:59.:42:02.

pioneer in ground-breaking policies which I believe will stand the test

:42:02.:42:06.

of time, and if he clears his name, as he wishes to, I have made it

:42:06.:42:11.

clear to him that I would like to see him back in government in a key

:42:11.:42:16.

position. I am pleased that Ed Davey has agreed to take up the

:42:16.:42:23.

post as the new Secretary of State for Energy and Climate Change. Ed

:42:23.:42:26.

As a lifelong commitment to the environment, to green issues. He

:42:26.:42:30.

has shown as a minister a formidable grasp of the details of

:42:30.:42:36.

government policy, and I think he is the right man for the job, to

:42:36.:42:40.

take up from where Chris has left off, to provide sustainable

:42:40.:42:44.

solutions to the long-term energy needs of this country. And I will

:42:44.:42:48.

be meeting Ed shortly so that he can make an early start in that

:42:48.:42:58.
:42:58.:42:59.

very important work. Thanks very OK, a short statement there. That

:42:59.:43:04.

looks like Admiralty House, was it not? It was not Downing Street that

:43:04.:43:09.

he was in. I think that is where it was, just off Whitehall. He is

:43:09.:43:14.

being followed in by some schoolchildren, looking for a job!

:43:14.:43:18.

So the Ed Davey announcement, we would get the others very shortly,

:43:18.:43:22.

but we can confirm that Ed Davey is the new Energy Secretary. I want to

:43:22.:43:26.

come back to Chuka Umunna in a minute, but let's just stick with

:43:26.:43:31.

this story as it develops. It is interesting that Nick Clegg, whose

:43:31.:43:36.

back really was against the wall as his coalition began to find its

:43:36.:43:41.

feet, and he was deeply unpopular, even unpopular in Sheffield, he has

:43:41.:43:45.

emerged from this and other developments in a pretty

:43:45.:43:50.

unassailable position. It is in a very strong personal position.

:43:50.:43:55.

Whether Lib Dems strategy at the next election is helped by losing

:43:55.:43:58.

Huhne is a different question, but doing things like that helps.

:43:58.:44:02.

Coming out and announcing things, very grand, very strong, it is a

:44:02.:44:06.

new age of coalition politics, how often you see a DPM career at a

:44:06.:44:10.

reshuffle which is the prerogative of the Prime Minister under our

:44:10.:44:14.

system? It is new for us! It is interesting that he said he would

:44:14.:44:18.

like to see him come back to a key position. David Cameron, in his

:44:18.:44:22.

letter, hold that out in the same way that he did to David Laws.

:44:22.:44:27.

the way it works, if it turns out he is not guilty, he keeps his seat,

:44:27.:44:32.

he goes on to the backbenchers, but he cannot be brought back under the

:44:32.:44:36.

system unless you make room for him, because all the positions will be

:44:36.:44:41.

taken. And we would have another reshuffle, which is why David Laws

:44:41.:44:47.

has had to wait of his time. Get in line behind David Laws! Just to

:44:47.:44:51.

confirm that the Queen has been pleased to approve the following

:44:51.:44:55.

ministerial appointments, we are being told, Ed Davey is to become

:44:55.:44:57.

the new Secretary of State for Energy and Climate Change, taking

:44:57.:45:03.

over from Chris Huhne. Norman Lamb, as was widely leaked, is to become

:45:03.:45:05.

a parliamentary Under-Secretary of State at the Department for

:45:05.:45:10.

business, taking over the Ed Davey position. But Jenny Willott is to

:45:10.:45:13.

become an assistant government whip, I am not sure of the significance

:45:13.:45:19.

of that. But no word of David Laws taking the Norman Lamb... And not

:45:19.:45:24.

sure if Jenny Willott is taking the Norman Lamb position or the David

:45:24.:45:28.

Laws is still under way. The Queen would not sign off on a PPS

:45:28.:45:34.

position for Nick Clegg. We already knew all of this. You think this of

:45:34.:45:38.

elite from Buckingham Palace? I think you might be right! The what

:45:39.:45:43.

is interesting, of course, on a side note, still no diversity in

:45:43.:45:46.

the Cabinet. We have got another male Cabinet minister because the

:45:46.:45:51.

Lib Dems do not have many women to offer, let alone a non-white faces.

:45:51.:46:01.
:46:01.:46:02.

The Lib Dem contingent is still The more they talk about diversity,

:46:02.:46:07.

the less diverse they seem to be. Labour clearly thinks it is on to a

:46:07.:46:12.

winner with the bonus business. I get the impression they are not

:46:12.:46:18.

entirely sure where to go from here. Ed Miliband has made all the

:46:18.:46:22.

running. He'd told to about moral capitalism in his conference speech

:46:22.:46:30.

was up he had the prejudice discussions in his speech at

:46:30.:46:34.

conference. He is not getting any credit. It is partly because

:46:34.:46:38.

somehow Labour has not come up with a policy that really cuts through -

:46:38.:46:43.

an idea that exemplified this better than either of the other

:46:44.:46:48.

parties. The most memorable thing in all of this has been stripping

:46:48.:46:57.

Fred the Shed of his knighthood. It cuts through. People notice. It is

:46:57.:47:02.

symbolic. The bonus tax is very important. Labour brought in as a

:47:02.:47:06.

temporary one-year tax. It was the most popular thing Gordon Brown

:47:06.:47:12.

ever did. This government got rid of it. Bonuses are not going of way

:47:12.:47:19.

in this Parliament. You mentioned RBS. He will get a bonus of �6

:47:19.:47:23.

million was that he is in the investment banking division at RBS.

:47:23.:47:28.

The ailing investment banking division! If Chuka Umunna is

:47:28.:47:36.

willing to go on about bankers, that is a big issue. People are

:47:36.:47:41.

very angry about the crisis. how which you rate the Labour

:47:41.:47:48.

performance on this to date? Perhaps the timing of Ed Miliband

:47:48.:47:56.

and his speech is a problem. They have stopped and started the stock

:47:56.:48:02.

when Ilott -- when Ed Miliband picks on an issue they like, he

:48:02.:48:07.

seems to lose momentum and David Cameron squads on that ground.

:48:07.:48:11.

Banking is not the territory that David Cameron wants to be on. He is

:48:11.:48:16.

not going to support employees on remuneration committees. That is

:48:16.:48:23.

why Labour should keep going on about it. It is a live issue. Pick

:48:23.:48:31.

one or two issues. Sticks to that. You will not get hurt -- heard on

:48:31.:48:36.

anything else. We are in a breaking news situation. Vince Cable has

:48:36.:48:44.

something to say on the events this morning. I am very sad. He is very

:48:44.:48:47.

good and very effective as a colleague in government. I'm sure

:48:47.:48:52.

he will clear his name and we would like to see him back. Do you think

:48:52.:48:57.

he will come back? It is not for me to comment on legal processes. He

:48:57.:49:03.

has been a good colleague and achieved a great deal. He has been

:49:03.:49:07.

an effective member of the coalition. What effect has this had

:49:07.:49:13.

on the party and the coalition? have strength in depth. We have

:49:13.:49:18.

other colleagues who will step up to the plate. It is a tragedy for

:49:18.:49:27.

him. Will feel for him and wish him luck. What has can he say?

:49:27.:49:31.

thing the Liberal Democrats do not have his strength in depth. That is

:49:31.:49:34.

shown in the reshuffles at the moment with the ministers they have

:49:34.:49:40.

in government. It was either going to be a Davey or Jeremy Brown. We

:49:40.:49:50.
:49:50.:49:54.

He still thought he had Enrique to be leader of the Lib Dems. Chris

:49:54.:49:59.

Huhne has been sidelined for the foreseeable future. It is quite

:49:59.:50:04.

good for Vince Cable, is it not? A mite too Machiavellian? I think it

:50:04.:50:10.

is better for the younger generation. -- am I to

:50:10.:50:18.

Machiavellian? It is great for David. He is the younger generation.

:50:18.:50:25.

If Nick Clegg were to fall under a bus tomorrow, he would be in prime

:50:25.:50:30.

position to as a young, dynamic Cabinet minister doing climate

:50:30.:50:36.

change. It did not hand -- hamper Ed Miliband doing that portfolio.

:50:36.:50:41.

The central issue there still faces this country is the economy. Almost

:50:41.:50:46.

everything has been tried by his coalition. We have had the lowest

:50:46.:50:51.

interest rate on record. Quantitative easing and the

:50:52.:50:57.

devaluation of the pound. We are running a budget deficit. We're

:50:57.:51:02.

heading for 1.5 trillion pounds in debt and there is still no growth.

:51:02.:51:08.

In programmes like this, we talk about the knighthood of Fred the

:51:08.:51:13.

Shed. This is the problem for Ed Miliband that he has not got

:51:13.:51:18.

credibility on the economy. He has not moved on on the deficit. All

:51:18.:51:23.

this talk of bonuses and responsible capitalism, unless he

:51:23.:51:33.

can get back creditability on that, he will not win. I think, come 2015,

:51:33.:51:38.

he will be in a very good position to do a Ronald Reagan saying, do

:51:38.:51:43.

you feel better off? What have this block given you? For the Lib Dems,

:51:43.:51:52.

people have gone on for ages and nothing has changed. I met Ronald

:51:53.:52:02.
:52:03.:52:03.

Reagan. I do not seek Ed Miliband as being like Ronald Reagan.

:52:03.:52:13.
:52:13.:52:16.

invaded Grenada. That was a good recollection. It has been a busy

:52:16.:52:22.

week in politics. Time to look back at the other big stories of the

:52:22.:52:30.

last seven days. The week started badly for Stephen Hester, the chief

:52:30.:52:33.

executive of RBS was almost �1 million poorer after bowing to

:52:33.:52:39.

pressure and giving up his bonus. He was faring better than his

:52:39.:52:43.

predecessor, who is now plain old Fred Goodwin, after his knighthood

:52:43.:52:49.

were shredded after his role in the collapse of RBS. On Tuesday,

:52:49.:52:53.

Theresa May also lost something on Downing Street. Last year David

:52:53.:52:58.

Cameron threatened to stop other European countries from using EU

:52:58.:53:02.

institutions like its court to force the treaty to be vetoed. On

:53:02.:53:05.

Monday he appeared to back down, prompting some to ask what the

:53:05.:53:10.

point of the veto was in the first place. With this Prime Minister,

:53:10.:53:16.

veto is not for life, it is just for Christmas. Meanwhile, it was

:53:16.:53:22.

back to school for Michael Gove. He was their well-behaved in the

:53:22.:53:32.
:53:32.:53:33.

Commons Education Select Committee. Will you excuse me for a second?

:53:33.:53:40.

There we go. A middling Cabinet reshuffle and not a word from the

:53:40.:53:48.

Prime Minister. Coalition politics is very different from what went

:53:48.:53:54.

before. It enabled him to do other things, having a Deputy Prime

:53:54.:54:00.

Minister. If he wants to watch what happens in coalition politics, it

:54:00.:54:09.

is Borgen. That is about running a coalition. Let's get back to the

:54:09.:54:17.

politics of it. It has been a dreadful time for Ed Miliband. He

:54:17.:54:21.

is regarded by his own side as having terrible performances in the

:54:21.:54:31.
:54:31.:54:32.

Commons was up his brother will not shut up. He keeps writing articles.

:54:32.:54:38.

Are we seeing a turning point? He has not had won a good week, he has

:54:38.:54:46.

two of bid weeks. -- one. He seems to be saying the right things but

:54:46.:54:51.

the message is not getting through. Is a person who can get through to

:54:51.:54:55.

the voters? That is called the big test. Will people seriously

:54:56.:55:01.

consider him on the steps of Number 10? It is hard to do anything about

:55:01.:55:09.

that. Is it a danger that he is in a position where people were

:55:09.:55:13.

presented with a set of policies and they rather like the policies

:55:13.:55:17.

and then they were told, they were Conservative policies, and they

:55:17.:55:23.

were not so sure. That is a problem. It is the case when it is put to

:55:23.:55:30.

people. Labour were in office for 13 years. They left to and were

:55:30.:55:36.

unpopular. That is hard to shake off in 21 months. The leader is

:55:36.:55:40.

trying to bring the party back to government in one term. No party

:55:40.:55:47.

leader has ever done that. It is a big challenge. Do people see him on

:55:47.:55:52.

the steps of Downing Street? Only time will tell. It is easier for

:55:52.:56:01.

him than William Hague and Michael Howard. He has a lot less MPs. He

:56:01.:56:09.

is up against the most elect jury of -- electorally unsuccessful

:56:09.:56:15.

Prime Minister. The attention of the media is in the dynamics of the

:56:15.:56:19.

coalition. We will see how that holds up we are back into double-

:56:19.:56:24.

dip recession. I suspect again, the economic message will be less easy

:56:24.:56:28.

for the coalition to blame Labour and said his all the fault of the

:56:28.:56:34.

Labour Party, as we get further away from 2010. It was because Nick

:56:34.:56:39.

Clegg was seen to veto in Europe. I tried to get Michael Portillo last

:56:39.:56:44.

night to tell me what this veto a man to two. I'm still waiting to

:56:44.:56:54.
:56:54.:56:54.

hear. That made do some damage. -- amounted to. It may be wishful

:56:54.:57:00.

thinking on your part, Army at a turning point? Is the worst over

:57:00.:57:07.

Port Edgar Miliband? -- are we at a turning point? I think they have

:57:07.:57:14.

their ups and downs. If the election is in May, 2015, will Ed

:57:14.:57:18.

Miliband have had a long enough period of quiet? We talked about

:57:19.:57:23.

the intervention of David Miliband in the New Statesman yesterday.

:57:23.:57:27.

That is an important part of British politics and leadership.

:57:27.:57:30.

Nick Clegg is feeling more comfortable with his position,

:57:30.:57:37.

which we think he is, and if Ed Davey is less abrasive than Chris

:57:37.:57:44.

Huhne, what has happened - personal tragedy for Chris Huhne - may be

:57:44.:57:48.

quite good... It may smooths the dynamics of the coalition. If it is

:57:48.:57:53.

hard to see the coalition breaking up before 2015. I think it will

:57:53.:57:58.

last the course. It is not in the interests of either party to end it

:57:59.:58:03.

when the economic uncertainty is so great at the moment. How it clear

:58:03.:58:09.

they would want the economy to be improving. We will leave it there

:58:09.:58:15.

on a Daily Politics on the morning where Chris Huhne has resigned as

:58:15.:58:20.

energy secretary after the Crown Prosecution Service announced that

:58:20.:58:25.

he was to be charged over the speeding points. The Crown

:58:25.:58:30.

Prosecution Service that concluding after its investigation it would be

:58:30.:58:35.

their case against him that he did get his wife to take his speeding

:58:35.:58:38.

points and thereby not lose his licence. Chris Huhne will fight

:58:38.:58:43.

that all away. When the trial starts, you will hear it first on

:58:43.:58:51.

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