:00:45. > :00:48.Morning, folks, welcome to the Daily Politics on Friday. It looks
:00:48. > :00:53.like it could be another bad day for British banks. They are under
:00:53. > :00:56.fire again, this time for failings in the way they sold a complex
:00:56. > :01:00.financial product to small businesses. Bank of England
:01:00. > :01:04.governor Mervyn King says change is needed in the culture of the
:01:05. > :01:08.banking industry. I think we worked that out ourselves. Meanwhile,
:01:08. > :01:12.Barclays' chief executive Bob Diamond has said he will not resign
:01:12. > :01:16.despite criticism of his bank for rigging a key international
:01:16. > :01:20.interest rate. We sent Adam out with the mood box to see whether
:01:20. > :01:24.anyone still trusts the banks. A European leaders agreed new
:01:24. > :01:28.measures in another attempt to restore financial stability to the
:01:28. > :01:33.Eurozone. They have also approved a 120 billion euro plan to boost
:01:33. > :01:38.economic growth. And we take a look back at an
:01:39. > :01:43.eventful week in the Westminster village.
:01:43. > :01:51.With me today, Camilla Cavendish from the Times and Rafael Behr from
:01:51. > :01:56.the New Statesman. First, let's turn our eyes to Europe, because
:01:56. > :02:00.after emergency overnight talks, Eurozone leaders have agreed new
:02:00. > :02:05.measures to bolster ailing banks and over indebted governments.
:02:05. > :02:09.Asian and European stock markets have risen sharply on the news. But
:02:09. > :02:14.how they perform later today is another matter. The European
:02:14. > :02:17.Council President, Herman van Rompuy, described the measures as a
:02:17. > :02:23.breakthrough. The agreement is aimed particularly at rescuing
:02:23. > :02:29.Spain's troubled banks and reducing borrowing costs of southern
:02:29. > :02:35.European countries. This is what the Prime Minister, who was not
:02:36. > :02:39.part of this agreement, had to say this morning. The countries of the
:02:39. > :02:44.Eurozone did take important steps forward last night. For a long time,
:02:44. > :02:49.we have said more action needs to be taken for short-term financial
:02:49. > :02:53.stability. More to recapitalise banks, to use firewalls, to drive
:02:53. > :02:58.down interest rates and create greater stability. They took
:02:58. > :03:04.important steps forward last night. There is still work to do.
:03:04. > :03:07.With us now, Sharon Bowles, a Liberal Democrat MEP, and also
:03:08. > :03:13.chair of the European Parliament's economic and monetary affairs
:03:13. > :03:19.committee. And the Conservative MP John Barron is with us, too. Sharon
:03:19. > :03:24.Bowles, let me come to you first. Does this represent a step-change
:03:24. > :03:32.in the Eurozone's efforts to sort itself out, or is it just a bigger
:03:33. > :03:38.sticking plaster? It is a bit of sticking plaster, and one move
:03:38. > :03:46.towards this Aof greater integration. The cars we will have
:03:46. > :03:49.a banking union? Well, it is part of the banking union proposals. The
:03:50. > :03:54.supervision by the ECB is the right way for it to go. There was a fight
:03:54. > :04:00.as to whether it should be the ECB or the European Banking Authority.
:04:00. > :04:04.The ECB fits much better and also works better for the UK. This means
:04:04. > :04:11.the European bail-out funds, the temporary one and then the
:04:11. > :04:15.permanent one, will, in return for buying Spanish bank bonds, they
:04:15. > :04:22.will have to take on to their balance sheet for billions of
:04:23. > :04:28.euros' worth of dodgy Spanish bank shares, correct? Yes. That is
:04:28. > :04:32.really encouraging if you are a German taxpayer. The problem is
:04:32. > :04:37.that neutralising the sovereign debt was difficult. But they have
:04:38. > :04:43.not done that. Neutralising bank debt is even bigger, so they still
:04:43. > :04:49.need to find some way to bring down the cost of sovereign debt without
:04:49. > :04:54.resorting to the bail-out mechanisms. But there is a step
:04:54. > :04:58.towards a banking union, which will be run by the Germans, no doubt.
:04:58. > :05:03.They are already in control of the committee to set it up. The bail-
:05:03. > :05:06.out mechanisms will be able to put money directly onto the dodgy
:05:06. > :05:10.banks' balance sheets rather than through the Government's, so it
:05:10. > :05:14.doesn't amount to sovereign debt. But there will also be able to buy
:05:14. > :05:18.a sovereign debt as well, not the ECB, but the bail-out mechanisms
:05:18. > :05:23.will be able to buy dodgy sovereign debt to add to that dodgy bank
:05:23. > :05:27.shares. It sounds dodgy to me. The problem is that there is an
:05:27. > :05:32.enormous amount of debt in the system, and no amount of moving the
:05:32. > :05:36.debt between government and banks or vice versa can conceal or erode
:05:36. > :05:41.its scale. Until you address that, everything else is sticking
:05:41. > :05:46.plasters. This must be the 20th summit we have had. It has done
:05:46. > :05:50.more than usual. A bit more, but it has not solved the problem in the
:05:50. > :05:55.sense that we still have enormous debt. If you really want a
:05:55. > :06:00.sustainable long-term solution, you have to narrow the gap between what
:06:00. > :06:02.governments earn and spend, make economies more competitive. Where
:06:02. > :06:09.are the sweeping supply-side reforms needed to encourage greater
:06:09. > :06:14.growth? Mrs Merkel, in some ways, retreated from the position she had
:06:14. > :06:18.before. That is the position of the New Statesman, which described Mrs
:06:18. > :06:24.Merkel as the most dangerous German leader since Hitler. I did not
:06:24. > :06:28.realise the New Statesman was a tabloid. You must be happy. Those
:06:28. > :06:33.are not my words, it is a view. We are an ecumenical publication. This
:06:33. > :06:38.has been a defeat for Angela Merkel to an extent. The big picture with
:06:38. > :06:41.this crisis has always been that at some stage, if they want to save
:06:41. > :06:46.the Eurozone, Germany has to put its economy up as collateral for
:06:46. > :06:51.the debts of the southern European states. The German economy is not
:06:51. > :06:54.big enough. They need to demonstrate to the markets to give
:06:54. > :06:58.them the confidence that institutionally, there will be
:06:58. > :07:07.integration at a scale that will tell everyone they are committed to
:07:07. > :07:12.the project. As you say, German taxpayers are not keen on that.
:07:12. > :07:15.Berry's a lot of trust -- they need a lot of trust in the southern
:07:15. > :07:19.European states that they would behave in a way that would make
:07:19. > :07:24.this work. But yesterday, we saw a softening of the German position.
:07:24. > :07:31.They were saying, OK, you need the money. The Italians and Spanish
:07:31. > :07:35.were saying, trust us, we will do the fiscal discipline. The banking
:07:35. > :07:40.union will be supervised by the Germans, and the Germans will be in
:07:40. > :07:46.direct control of the behaviour of every systemic Club Med bank. For
:07:46. > :07:50.Britain, as the capital of European finance, is it a danger or an
:07:50. > :07:57.opportunity that the Eurozone is going to a banking union? It is
:07:57. > :08:01.both. Clearly, the City is concerned. Since 2007, the EU has
:08:01. > :08:05.started to swing away from creating a level playing field, which
:08:05. > :08:15.benefited the city enormously, towards endless levels of medalling,
:08:15. > :08:17.
:08:17. > :08:22.which the City does not like. There will be some business lost. But on
:08:22. > :08:25.the other hand, it is firstly vital that we get the Eurozone sorted out.
:08:26. > :08:32.Nobody will benefit if these countries collapse. Secondly, the
:08:32. > :08:38.City is the gateway to the world, not just Europe. We have the second
:08:38. > :08:47.biggest insurance industry in the world. And we set LIBOR. Which we
:08:47. > :08:55.will come on to. If what do you think? Is a banking union an
:08:55. > :09:01.opportunity for Britain, or a disadvantage? I agree that it is a
:09:01. > :09:05.bit of both. It is better than try to have supervision that covers us
:09:05. > :09:10.as well by the European Banking Authority, which would not have had
:09:10. > :09:15.the adequate powers to supervise a large systemic bank. So it is
:09:15. > :09:19.better than the alternative. If you have the ECB playing a role for the
:09:19. > :09:24.Eurozone, a consequence of that is that a parallel role has to be
:09:24. > :09:29.recognised for the Bank of England. This argument about maximum
:09:29. > :09:34.harmonisation of capital has to be eroded, because they are saying you
:09:34. > :09:39.have to take account of monetary policy in supervision. What is
:09:39. > :09:45.sauce for the goose is sauce for the gander. That applies to the UK
:09:45. > :09:50.as well. That helps resolve the tension. We still do not know the
:09:50. > :09:57.shape of it, though. The City of London seems to have prospered well
:09:57. > :10:03.in the shadow of a bigger monetary union known as the United States.
:10:03. > :10:07.Are you any closer on your petition numbers? IUD gathering names among
:10:08. > :10:13.Tories or the public in general? This is simply Conservative
:10:14. > :10:17.backbenchers. About 100. The referendum will take place in the
:10:17. > :10:20.next Parliament, but they will be put on the statute book in this
:10:20. > :10:24.Parliament, making the case for a referendum. The wording will be
:10:24. > :10:34.decided once we have had an informed debate. That debate has
:10:34. > :10:39.
:10:39. > :10:43.yet to be had. So you are asking people to sign a petition with no
:10:43. > :10:48.idea what the referendum will be about? Well, yes, because at the
:10:48. > :10:52.end of the day, we need a debate as to what should be on the referendum.
:10:52. > :10:56.But it is about our future relationship with the EU, because
:10:56. > :11:01.they can be no doubt, particularly after the Eurozone crisis, that the
:11:01. > :11:07.EU is fundamentally changing. And people want a say as to our future
:11:07. > :11:15.relationship. Will the Europeans be happy that you have been chair of
:11:15. > :11:21.this committee? This is something I face almost day in, day out. There
:11:21. > :11:26.is a fair degree of respect that how I have handled matters. The
:11:26. > :11:30.parliament in general is united in that we do not divide. We are a
:11:30. > :11:36.parliament for the EU. I would not take the pessimistic view you have
:11:36. > :11:42.about the Eurozone. If the euro wants to be a reserve currency, it
:11:42. > :11:48.can't do that. The US doesn't do that for the dollar. And I think
:11:48. > :11:51.the UK is right. It is against the single market. We have to leave it
:11:51. > :11:55.there. No doubt there will be lots more discussion about where this
:11:55. > :11:59.leaves the City of London. Speaking of the City of London, who
:11:59. > :12:04.would think the London interbank offered rate, or LIBOR, would kick
:12:04. > :12:09.up such a financial and political storm? Assets but 99% of you didn't
:12:09. > :12:13.even know what LIBOR was until this boat. Some of you may still not.
:12:13. > :12:17.Well, it would be a storm if a bank was found trying to rid it for
:12:17. > :12:21.financial gain. That is what bhajis was found try to do, and they have
:12:21. > :12:26.had to pay a hefty price for it. But not the resignation of their
:12:26. > :12:31.chief executive, Bob Diamond, or even the chairman has not been put
:12:31. > :12:34.up for ritual sacrifice yeah, but they paid �290 million in fines.
:12:34. > :12:38.This is what the Governor of the Bank of England Mervyn King had to
:12:39. > :12:43.say about the affair a few minutes ago. There must be many people who
:12:43. > :12:47.work in the banking industry today who know that they are honest,
:12:47. > :12:53.hard-working and feel they have been let down by some of their
:12:53. > :12:58.colleagues and leaders. I hoped everyone now understands that
:12:58. > :13:03.something went very wrong with the UK banding -- banking industry, and
:13:03. > :13:07.we need to put it right. That goes both to the question of culture in
:13:07. > :13:13.the banking industry and to the structure of the banking industry,
:13:13. > :13:17.from excessive levels of compensation to shoddy treatment of
:13:17. > :13:21.customers, to a deceitful manipulation of one of the most
:13:21. > :13:27.important interest rates, and now this morning to news of yet another
:13:27. > :13:32.misselling scandal. We can see that we need a real change in the
:13:32. > :13:35.culture of the industry. That was the Governor of the Bank of England.
:13:35. > :13:42.We are joined now by our political correspondent, who also doubles up
:13:42. > :13:47.adds the BBC's Mary Poppins, as you can see. The chief executive of
:13:47. > :13:51.Barclays, Bob Diamond, sent this letter to Andrew Tyrie, chair of
:13:51. > :13:56.the select committee. He will have to appear before them. It was quite
:13:56. > :14:00.a defiant letter. How has it gone down? I do not think MPs will be
:14:00. > :14:05.impressed with the tone of this letter, because Bob Diamond says he
:14:05. > :14:10.is happy to come to the committee to talk about what has gone on at
:14:10. > :14:15.Barclays, but there is no hint of any kind of apology. He admits that
:14:15. > :14:18.there was inappropriate behaviour, but he says this was limited to a
:14:18. > :14:24.small number of individuals and there is no suggestion that it went
:14:25. > :14:31.to the top of the bank. That kind of response will not satisfy
:14:31. > :14:35.politicians across all parties, who feel that the way this rate was
:14:35. > :14:40.manipulated, and you heard from Mervyn King talking about cynical
:14:40. > :14:43.manipulation of a rate which affected the mortgages of ordinary
:14:43. > :14:47.people, and politicians from all parties are questioning how the
:14:47. > :14:56.bank is possibly going to manage to rebuild trust with the public while
:14:56. > :15:00.Bob Diamond remains in charge. For some strange reason, we thought
:15:00. > :15:08.that feeling on the banks on the high streets could be running high.
:15:08. > :15:12.They may like them, they may not. There have been loads of stories
:15:12. > :15:17.about banks mucking up. When we asked people do you still have
:15:17. > :15:22.faith in the banking system, where will they make their deposit, yes
:15:22. > :15:27.or no? Reluctantly, I will say yes. Why is that? It needs regulating,
:15:27. > :15:31.obviously. At the moment I know things look bad, but I think it's
:15:31. > :15:35.probably not the the banking system we shouldn't have faith in but more
:15:35. > :15:40.the bankers themselves. No. Why is that? Because sometimes they will
:15:40. > :15:44.take my money out of my account but I don't know why. From what I have
:15:44. > :15:50.been reading lately it's quite bad, I don't trust it myself. But you
:15:50. > :15:55.still use a bank? I have to, I get paid into a bank. It's the only way.
:15:55. > :15:58.Why have you said no? I don't really know why, because it's a
:15:59. > :16:04.business, and it's about profit. It's not about people who have a
:16:04. > :16:08.bank account. I don't think I have ever had faith in the banks. It's
:16:08. > :16:13.going to be a no. I hate credit cards and things, I try not to have
:16:13. > :16:17.an overdraft or anything. Yeah, it's all gone up the creek.
:16:17. > :16:22.vote with your pennies and pounds? I have a big penny jar at home that
:16:22. > :16:27.needs counting. Do you trust the system? Have you come to
:16:27. > :16:32.investigate Barclays? Well, there are absolutely loads of
:16:32. > :16:38.banks on this street, so let's go and head to another one.
:16:38. > :16:41.You said no, why? Well, it's just what's in the press at the moment.
:16:41. > :16:49.You I think it's probably a reflection of dodgy dealings going
:16:49. > :16:53.on there. Would you like to give us your
:16:53. > :16:59.views on the banks while you are waiting for the bus? I trust them,
:16:59. > :17:03.even though I work for them. are in the belly of the beast?
:17:03. > :17:08.but I trust them. It's not the problem. What is the problem?
:17:08. > :17:12.Government. You work in a bank, are you a trustworthy person? Very.
:17:12. > :17:19.They get the blame for things that weren't their fault, so I am not
:17:19. > :17:26.sure who to vote for. In the middle? Try to balance it. You are
:17:26. > :17:29.like a hedge fund. People have been so keen to vote and voted for one
:17:29. > :17:33.option overwhelmingly, it looks like the banking system is
:17:33. > :17:39.seriously overdrawn. You don't keep your money under the mattress?
:17:39. > :17:44.Might get robbed. I got to have enough for my funeral, you know,
:17:44. > :17:48.because I won't be here too long. She won't need that money for a
:17:48. > :17:53.long, long time. We did ask the Treasury if a Minister was
:17:53. > :18:00.available and to our shock, horror and surprise, none was. No idea why.
:18:01. > :18:04.But there you go. It's Friday. With us however is the shadow
:18:04. > :18:08.Treasury Minister, Chris Leslie. Why did you allow this to happen
:18:08. > :18:13.under Labour? Well, I mean, hindsight is a wonderful thing.
:18:13. > :18:16.When Labour came in it had a whole series of unregulated self-
:18:16. > :18:19.regulated financial services. We created a Financial Services
:18:19. > :18:24.Authority and gave it some regulatory powers. Of course, we
:18:24. > :18:28.then had this global credit crunch, regulators, governments around the
:18:28. > :18:32.world didn't spot the absolute appalling risk-taking going on. The
:18:32. > :18:37.question now is today with a contemporary legislation before
:18:37. > :18:39.parliament what are the judgments that need to be made? I think there
:18:39. > :18:44.are serious doubts about whether the Government are going far enough
:18:44. > :18:48.today. Maybe, but your only financial services and markets Act
:18:48. > :18:52.failed to regulate LIBOR, didn't mention LIBOR. You left it to the
:18:52. > :18:58.banks to fix LIBOR themselves. Why did you do that? Well, and LIBOR
:18:58. > :19:02.has been unregulated since it began. Interestingly over the past year
:19:02. > :19:06.several of my Labour colleagues, including myself on the 6th March,
:19:06. > :19:11.raised this question about surely LIBOR should now begin to come
:19:11. > :19:14.under the regulator - I put this... Shouldn't you be asking Ed Balls,
:19:14. > :19:17.Ed Miliband and Alistair Darling, they were the people who who didn't
:19:18. > :19:22.do it. We have known there has been some sort of investigation for the
:19:22. > :19:25.past year into LIBOR. I put to the Minister on 6th March do you have a
:19:25. > :19:28.view about whether this should be regulated. His answer to me in a
:19:28. > :19:33.single word, no. No view at all. That's the astonishing thing. Of
:19:33. > :19:38.course they've been forced to U- turn yesterday when this blew up. I
:19:38. > :19:42.think now we need to recognise that this isn't just a question of
:19:42. > :19:44.regulatory fail failures with one individual and one bank, this could
:19:44. > :19:48.be across the whole system. We are starting to head to a situation
:19:48. > :19:51.where we really need to take a systemic view about whether bigger
:19:51. > :19:56.reforms are necessary. It's interesting almost everything you
:19:56. > :19:59.did has fallen apart, hasn't it? You put in a tri-partite regulatory
:19:59. > :20:05.system, that didn't survive the crash. No longer exists. No more
:20:05. > :20:09.boom and bust. We have had the biggest bust since the 1930s. You
:20:09. > :20:13.imposed PFI on the NHS, they're now going - hospitals are going bust,
:20:13. > :20:16.as well. You dined out out on a light touch regulation which was
:20:16. > :20:23.really another word for the wild west. I am not going to claim
:20:23. > :20:27.everything... Not a great record. Not everything being rosy. It's all
:20:27. > :20:29.all withered on the vine. There were some steps taken to improve
:20:29. > :20:32.regulation, not enough. But the idea that the Chancellor or the
:20:32. > :20:35.Conservatives have some sort of insight here that the previous
:20:35. > :20:44.Government didn't, they were not saying regulate more heavily,
:20:44. > :20:48.Andrew. Excuse me, as you know,... They criticised us for regulating.
:20:48. > :20:53.Could you show me where you urged Labour to do more and answer comes
:20:53. > :20:57.there none. Why are you not calling for Bob Diamond's resignation?
:20:57. > :21:02.suspect because this is more than just one chief executive of one
:21:02. > :21:05.bank. We are talking about multiple executives. Why shouldn't we have a
:21:05. > :21:08.huge clearout of this generation of bankers that's brought us to our
:21:08. > :21:13.knees and start again? I suspect that's probably going to be on the
:21:13. > :21:20.cards. I really do think that we are talking about a much more
:21:20. > :21:24.systemic inquiry. There are plenty of banks - but why not... Why are
:21:24. > :21:27.you not calling for Bob Diamond's resignation? There could be a move
:21:27. > :21:31.between regulators slapping people on the wrist and finding them and
:21:31. > :21:35.into criminal investigations. There was some doubt yesterday about do
:21:35. > :21:38.the regulators have the criminal powers. It's clear now that the
:21:38. > :21:41.Serious Fraud Office, the City of London Police do have the criminal
:21:41. > :21:47.capability to pursue conspiracy to defraud and so forth. That's why we
:21:47. > :21:50.have to be a little bit circumspect about the criminal implications.
:21:50. > :21:56.The Serious Fraud Office doesn't do financial regulation, it implements
:21:56. > :22:01.the criminal law. That's a different matter. Let me come to
:22:01. > :22:08.our journalists here. Shouldn't we now have a Leveson-style inquiry
:22:08. > :22:12.into the banks? I wouldn't wish a Leveson Inquiry on anybody. A judge
:22:12. > :22:16.who knows something about banking to do it as opposed to the current
:22:16. > :22:20.one on journalism. I think we have had a huge problem in this country
:22:20. > :22:25.because we haven't prosecuted. In the US they've taken a lot of
:22:25. > :22:28.people to court, pursued inquiries. A lot of people have gone to jail.
:22:28. > :22:32.They've had a sort of truth and reconciliation in a sense. One
:22:32. > :22:36.thing we all need in this country is to get over this issue, restore
:22:36. > :22:39.banks, we also need to have faith in our banks again. I agree we need
:22:40. > :22:44.to do something to punch that but I don't want a two-year inquiry. I
:22:44. > :22:47.think this is quite simple. Either you find a way to prosecute which
:22:47. > :22:51.does not - you are saying there is a way, maybe there is or the very
:22:51. > :22:56.least you have to name the 14 traders in Barclays whose e-mails -
:22:56. > :22:59.that would be a factor. Who is this? You have to have heads to
:22:59. > :23:04.roll. There is no other answer. They don't seem to learn. We now
:23:04. > :23:09.have this FSA findings on the swap, mis-selling, rather complicated.
:23:09. > :23:17.The RBS statement, and it's my bank, it beggars belief. They say in the
:23:17. > :23:23.case of a small number of less sophisticated systems who entered
:23:23. > :23:28.into more complex swap products we have agreed to move directly to - I
:23:28. > :23:33.mean... This is the essential point and why people are angry at a much
:23:33. > :23:38.bigger level than thinking some of it is dodgy and that feels rum,
:23:38. > :23:42.because going back over the period at the peak of the financial crisis
:23:42. > :23:45.2007-8, there is now a feeling that the people who arguably were the
:23:45. > :23:48.most responsible for this are the people who have been given immunity
:23:48. > :23:52.from the economic consequences of it. So the whole bail out process
:23:52. > :23:55.of the whole banking sector and then the subsequent recession and
:23:55. > :23:58.you can argue about the causes of that as much as you like, but it
:23:58. > :24:02.feels to a lot of people like a transfer of wealth from people at
:24:02. > :24:06.the bottom to people at the top. People who caused it in the first
:24:06. > :24:09.place. When you hear attitudes like that and see Bob Diamond and the
:24:09. > :24:13.way he behaves the impunity that they seem to have at a sort of
:24:13. > :24:16.level of justice when they might or might not have been committing acts
:24:16. > :24:23.of fraud, sort of reflects the impunity they have, the immunity
:24:23. > :24:26.they have. I didn't see Marie And toeupbet runs the RBS. If there was
:24:26. > :24:32.one thing you could do if you were in power to help get the show back
:24:32. > :24:36.on the road, what would that be? Looking at whether the regulatory,
:24:36. > :24:41.needs to extend to areas like the LIBOR, but on the swap mis-selling
:24:41. > :24:44.they have this this independent commission, they said
:24:44. > :24:49.derequiretives - the Chancellor is still saying those should be in the
:24:49. > :24:53.retail. I think another U-turn is beckoning. Surely not! I suspect so.
:24:53. > :24:59.I can't believe it. Chris, thank you very much for being with us. So,
:24:59. > :25:05.Germany not knocked out of the Euros, Rafael Nadal not Goked out
:25:05. > :25:08.of women -- got knocked out of Wimbledon. Bob Diamond's still got
:25:09. > :25:12.a job. Let's look at the week in 60 seconds.
:25:12. > :25:16.Three times wasn't enough for the man who used to rule at Number 10.
:25:16. > :25:19.Tony Blair would like to be PM again, but doesn't fancy his
:25:19. > :25:26.chances of a comeback. In Northern Ireland, they were building bridges
:25:26. > :25:28.with a handshake when the the Queen met former IRA commander, now
:25:28. > :25:34.Deputy First Minister, Martin McGuinness. At Westminster, it was
:25:34. > :25:37.time for another budget U-turn, this time on fuel backs -- tax. Who
:25:37. > :25:42.knew what and when. The Junior Minister left us none the wiser.
:25:42. > :25:45.When were you told? I have been involved in this for sometime and...
:25:45. > :25:50.You didn't take the decision, obviously? The Chancellor and Prime
:25:50. > :25:54.Minister did, when were you told? We had a collective discussion of
:25:54. > :25:58.that... The policy we have all been waiting for has finally been
:25:58. > :26:03.unveiled. Nick Clegg even took to his soap box to make the case for
:26:03. > :26:07.Lords reform. This comes down to a really, really simple idea. It's
:26:07. > :26:15.called democracy. He might have to shout louder to get the Tory
:26:15. > :26:19.backbenches on side. OK, let's pick up on the back of
:26:19. > :26:23.Nick Clegg there, how will Labour play this House of Lords reform?
:26:23. > :26:28.They are in favour of a elected chamber but they're also the
:26:28. > :26:32.opposition. They're divided over this. Ed Miliband's position is you
:26:32. > :26:35.can see some clarity if you look hard enough, which is that they're
:26:35. > :26:39.in favour of the principle of Lords reform so they'll vote at a second
:26:39. > :26:42.reading of the bill, they'll let it go through if it gets that far. But
:26:42. > :26:45.they are not - they want to have plenty of time in parliament to
:26:45. > :26:48.fiddle with it, argue with it, they don't want to see it rushed through
:26:48. > :26:56.quickly. The problem is that at least half of Labour MPs think that
:26:56. > :27:03.this is really an opportunity to ideally cut Nick Clegg's head until
:27:04. > :27:08.all the Lib Dems are curled up in the floor begging for mercy. They
:27:08. > :27:12.should be getting that crowbar in and trying to prise them apart.
:27:12. > :27:17.you add in what he is saying about the Labour attitude to the view on
:27:17. > :27:20.the Tory backbenches where there is a huge rebellion brewing, you have
:27:20. > :27:24.to wonder whether this is ever going to see the light of day.
:27:24. > :27:27.Certainly there's nobody outside of parliament who cares a hoot about
:27:27. > :27:30.this, which is another problem for Liberal Democrats. But they're
:27:30. > :27:32.desperate to cling on to this. It's important. I think this issue is
:27:32. > :27:36.the one that could break the coalition. It's another reason why
:27:36. > :27:41.Labour is so interested in it. The Conservatives are really split.
:27:41. > :27:46.David Cameron knows that he has to back Nick Clegg. The other issue,
:27:46. > :27:51.fundamentally the idea of electing people from party lists on 15-year
:27:51. > :27:57.terms, it's nonsense. That's no accountability. This is a register
:27:57. > :28:01.for ex-politicians to sit around. That's the biggest problem the MPs
:28:01. > :28:04.have, is you work hard as a MP and most do work quite hard and you
:28:05. > :28:08.might get sacked every four or five years by the electorate. Are you
:28:08. > :28:12.going to put up with some swaggering Senator turning up on
:28:12. > :28:15.your patch saying I am here, I have a better democratic mandate for you
:28:15. > :28:18.but I have a job for life as well or 15 years which in political
:28:18. > :28:22.terms is life. The interesting thing that I found talking to
:28:22. > :28:26.people around parliament about this, is that the Lib Dems are persuaded
:28:26. > :28:30.that David Cameron has given Nick Clegg all the assurances possible
:28:30. > :28:33.that he will whip his MPs behind this and they've looked them in the
:28:33. > :28:36.whites of the eyes and the Conservative MPs are saying it's -
:28:36. > :28:41.we can choose whether we like this or not. They say the whips speak to
:28:41. > :28:45.them with fingers crossed. Thank you both for today. I am going to
:28:45. > :28:51.be back on Sunday with the Sunday Politics at midday. I will be