06/07/2012 Daily Politics


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Morning, folks, and welcome to the Daily Politics.


More coalition trouble this morning with the Lib Dems threatening to


withdraw support for parliamentary boundary changes if Tory MPs derail


plans for Lords Reform. We'll talk to a Tory rebel who's not for


turning. After the anger and acrimony, the Inquiry. But after


Balls and Osborne's bust-up, can MPs really get to the bottom of the


banking scandal? As the Met Office forecasts a month's rainfall in the


next two days in parts of the UK, many homeowners will be living in


fear of floods. But with a deal between Government and the


insurance industry expiring in less than a year, could they soon be


left high and dry - or low and wet - when the waters rise?


And it's a long way from anarchy in the UK as Johnny Rotten joins the


Question Time panel. So how did the punk legend do? We ask his fellow


panellist, and something of a rocker himself, Alan Johnson, for


his verdict. So all that's coming up in the next


half hour. With us for the whole programme today, Amber Elliott from


Total Politics magazine and our old friend Ian Collins. Total madness!


And our old friend Ian Collins. You are our old friend? Yeah! Now, the


coalition air is thick with threats and intrigue this morning. No


change there, then. According to sources to Nick Clegg, there could


be "serious consequences". The Liberal Democrats via an interview


given by one of the Deputy Prime Minister's departing advisers are


warning David Cameron that changes to Parliamentary boundaries much


prized by Conservatives could be at risk if Tory MPs derail the Lib


Dem's pet project, House of Lords reform.


We're going to be joined by one of the rebels that the Lib Dems want


to warn off, Peter Bone, MP. Good morning. Good morning to you. Are


you frightened, going to act? Are you going to retaliate as a result


of this threat? Quaking in my poots, I think, the threat from the


Liberals. They just can't be trusted. The deal was they got this


wretched AV vote in return for the boundary review. They all voted for


that bill. I actually voted against the bill, and now because they


didn't get what they wanted in the AV they're now saying it's all


about House of Lords reform. Hold on. That was in the coalition


agreement. House of Lords reform, bringing forward proposals, seating


agreement, but nothing about that. You had the Prime Minister saying


it was a third term priority. had a manifesto too. Why are you


renegging on it? You did not say that. Your manifesto said you would


seek a consensus on House of Lords reform. It's only because of people


like you we don't have a consensus. A consensus is a consensus. We're


still seeking it, haven't quite made it yet. Do you take the threat


seriously? Because it's pretty hard in the current system for the


Tories to get an overall majority even if you do well in the polls.


If you don't get boundary reform, it's almost mission impossible.


don't agree. I think if we had a strong Conservative Government,


perhaps as a minority Government for six months to a year then went


to the country, we'd get an overwhelming vote and have a clear-


cut Conservative majority. I think the Liberals messing around like


this just proves the sooner we get to a minority Government, the


better. How high would you put the chances of getting a Conservative


Government? I think if we govern as a minority Government and for


instance brought in definite plans for an EU referendum, a bill of


rights, tougher on immigration and things like that... You're not


going to get any of that are you? Not with the Liberals. Not getting


it even from David Cameron. I don't know. If he was free to be


Conservative Prime Minister, we could govern and put our case to


the country in due course, and I think that's - nobody really


seriously thinks this coalition can stagger on to 2015 when you can't


trust for one moment the Liberal Democrat members of it. Is this


just the normal sort of coalition politics, or do we take seriously


the Lib Dem threat? I think, you know, it's quite fun politics,


really, because Nick Clegg has upped the ante without saying a


word. You have had his advisor who left yesterday, and he's put the


situation out there where the Lib Dems have said, look, if you don't


do this for us, we'll stop boundary review - stop the boundary changes.


Would you leave them? I think this is just the beginning step. Given


it's a here-today-gone-tomorrow advisor following Steve Hilton to


the United States. It's great for Nick Clegg because if it doesn't


work out he can say it was just my advisor. That's why you wonder what


it's all about, Alfie, even though your name not Alfie! Because when I


interviewed Nick Clegg on the Sunday Politics and said, "If you


don't get Lords reform, will you retaliate?" He said, "One of the


good things about this coalition is we don't in for tit for tat


retaliation." Peter Bone needs to have a word with Mrs Bone on this


occasion because they seem to have lost the idea of what a coalition


is all about. If Peter thinks seriously the Conservatives can


govern with 50 less seats in a minority Government such as that I


am afraid he's living in cloud coup-coup land. One final thing -


stand back from it all and give me your prediction, when this


timetable - call it the guillotine notion determine debate on the


House of Lords reform comes before, there will be Tory rebellions,


given that Labour will abstain or vote against, will you have enough


rebels to win this vote to stop Lords reform in its tracks?


wouldn't stop Lords reform in its tracks, but it would cause problems.


Will you? I think there is enough votes it in, but I don't think in


the end the Government will move the programme motion. Why move a


motion when you know you're going to be beaten? Carry on with the


legislation... That would mean the Lords reform would carry on in the


House and gum up the works. We'll see how much it does. Remember, all


parties before the election were in favour of scrutinising legislation


fully, full scrutiny. What does it matter that MPs stayed through the


night to look at it? It's about time you did some work. Good to see


you. Now, there is another inquiry on


the way - this time about the rate- rigging scandal that took down Bob


Diamond this week. But agreement did not come easy.


Yesterday's debate on the banking inquiry was dominated by


acrimonious exchanges between Ed Balls and George Osborne about


comments by the Chancellor alleging that his Shadow had questions to


answer over pressure put on Barclays to lower the LIBOR rate in


2008. It was quite a piece of parliamentary theatre.


Impugned my integrity - he has said - no, and he has made an allegation


in The Spectator and all over the newspapers. He has no evidence -


because there isn't any because it's untrue - and he knew there was


no evidence because he knew it was untrue, and he said it anyway


because that is the character of the man, Madam Deputy Speaker.


idea that I am going do take lessons in integrity from a man who


smeared his way through 13 years of Labour Government, who half the


people who ever served in him thinks he was a disgrace in his


post is another thing. Another quiet day in Westminster.


Where does this all leave the banking inquiry? Well, Labour had


wanted a judge-led public inquiry. But after the Government won the


vote in the Commons, the opposition offered qualified support to a


parliamentary inquiry led by the Tory Treasury Select Committee


chair Andrew Tyrie. Questions remain about the effectiveness of a


parliamentary inquiry following criticism of Mr Tyrie's Committee's


cross-examination of Bob Diamond. If you could call it a cross-


examination. It's also unclear whether a politician-led inquiry


can overcome the increasingly partisan tone of the debate about


where responsibility lies for the rate-rigging and wider banking


scandal. With us now is Michael Fallon,


Conservative Deputy Chairman and Chris Leslie, Shadow Financial


Secretary. Welcome to you both. Let's not go through the whole


argument again we had yesterday afternoon. We're going to have a


parliamentary inquiry. The Government wants it. Labour will


reluctantly go along. Do you have a view as to what shape this


parliamentary inquiry should now take? Obviously, we would have


preferred the judicial, but given we are where we are, there are a


number of things to be resolved. There is the question of is there


going to be officials and secretariat? Couldn't be Treasury


officials. They're in the frame. think the Chancellor said there


were going to be discussions in the usual channels. We want to see what


those are. I have to say, you mentioned in the outset, because


this is more than just Barclays, because we're talking about


potentially dozens of banks around the world being involved in this, I


think the public will be saying, you know, is this an inquiry with


sufficient independent importance and stature? I understand that is


why we are still... As you said, we are where we are. We had that


debate yesterday. Let's not go over old cold milk here. Do you have an


idea what - how this inquiry should be constituted? Should it have an


independent secretariat? Should it - people testify under oath, which


doesn't usually happen? Should there be a QC to teach you how to


ask questions? Look, Labour have backed down on the inquiry they


wanted. We have agreed we have parliamentary inquiry. In turn


we're happy to listen to Labour if they have constructive suggestions


about how this inquiry should be framed. In answer to your questions,


yes, more resources can be provided. Parliament cost could do that the


National Audit Office might be able to help. Your second question I


think was on... Should people testify under oath? They can


testify under oath. The Parliament can require that at the moment.


has the power to do that. It does. Finally, I think you said, should


we have a lawyer involved? You can have a lawyer advising the


committee. You do have that. Should you have a prominent QC there to


advise you as a team, to have back- up questions? Certainly to advice.


I don't think our concessions would understand that we would have to


hire somebody to ask the questions for us. Certainly, you could have


legal advice. The Treasury Select Committee already has a lawyer who


advises. The difficulty is, is this the right moment to be trying to


sort of forge a new way of Constitutionally investigating this


within a parliamentary process - oaths and QCs, and so forth. It


would have been better - and the public expect - it should have been


straight away, get into that independent judicial inquiry where


the rules are already set out. You're revisiting yesterday.


can't repeat it three times when we heard it endlessly yesterday. You


may be right or wrong, but we are where we are. I am trying to decide,


what should the scope of the inquiry be? What lessons can we


learn given we have legislation going through. We have already had


a judicial inquiry going on by the States. The facts are out there.


What we need to do is know how to change the legislation already in


front of Parliament to learn the lessons. The inquiry we have had


sparked off by the Americans, not the British, was about particular


LIBOR fiddling - two types of fiddling - one by officials, one by


rogue traders. We have not had an inquiry into why the culture of the


City has been dragged down to the level now where every day we open


our papers and some other bank is having its collar felt for mis-


selling, cheating, lying and paying themselves shed loads of money they


don't deserve. Exactly. We have legislation, Andrew, in front of


Parliament at the moment to better regulate the City, so we need to


learn very quickly from this inquiry. Which isn't good enough.


Which isn't good enough. Speed is of the essence. We have learned the


lessons. We can get them into the bill in front of Parliament. After


the Trace Select Committee in front of Bob Diamond where you barely


laid a finger on him, do you think you need a QC to do this? There


were three different aspects to the LIBOR inquiry - 2005, 2007 and 2008,


and each member was per suing their own line of questioning. Of course,


that can be better organised. One of the advantages of this


particular new committee is there will be more expertise there. There


will be somebody there from the House of Lords there as well. It


will be smaller, more focused, a slightly narrower inquiry. It can


get on with this every week now until Christmas. Is it Labour's


contention that in the autumn of 2008 the Government played no part


whatsoever in trying to get the LIBOR rate down? Well, I mean,


there is a distinction between governments of all parties who will


want to have a view about the level of interest rates, unemployment


inflation and then a suggestion - no, no, this is important - then a


suggestion that somehow manipulating or fraudulently


fiddling figures has to be the route to be pursued. That's not


what I asked you. I am not asking you have... Absolutely. I am asking


you is it Labour's position that it was not your policy to depress


LIBOR in the autumn of 2008? governments want to make sure


interest rates are affordable. That's not the answer to my


question. The key allegation the chance loor was insinuating is


somehow key individual Ministers including Ed Balls had been somehow


complicit in the manipulation fraudulently... No, no, that's not


the allegation. Is it your position that Mr Balls or Ms Vadera or


anybody else played no part whatsoever, directly or indirectly,


in influencing LIBOR policy? We'll go through them. Ed Balls has said


he's not had those conversations about LIBOR... I didn't ask you. I


said indirectly or directly? She's gone on the record and talked


about... She said it was a concern. The paper she commented upon.


Phillip Hammond, for example, a Shadow Chief Secretary, also talked


about LIBOR... You were the Government, Chris. There is a


difference between saying interest rates should be affordable and


implying you should somehow... sorry. A criminal approach to


fiddling the figures. Nobody wanted to do that. The issue is not should


interest rates be affordable. was. You need to reread your


history. The issue was wholesale lending for the banks had


completely dried up and the LIBOR rate was going through the roof. It


was a matter of life or death. It was not about affordability. I ask


you one more time - are you saying the Labour Government at no stage


directly or indirectly put pressure on the bank to lower LIBOR?


Diamond himself said in response to a question from Michael, were


Ministers putting pressure on you to fiddle LIBOR? His answer was, "I


didn't believe that no." Diamond being instructing, which is


entirely different. The answer you're looking for, for indirectly


is yes, because he was the City Minister. You can't be the


Government and have no indirect connection between what's going on.


Do you understand the interest between fiddling figures? It wasn't


George Osborne's best moment. Somehow he was sitting around the


table with a calculator and abacus trying to instrument what the rate


should be is preposterous. The Government of the day were not


indirectly linked at some level with what is going on in the City -


you must know that. Part of the problem is we seem to be doing an


inquiry before anyone started an inquiry. Yesterday in the Commons


we had a situation where it was sort of very unparliamentary to a


certain extent. It got very personal. The worry with this is it


sets a precedent. You then go into an inquiry which is a parliamentary


inquiry... If someone accused you of fiddling figures you would want


to defend your position. George Osborne overplayed his position. I


have spoken to Conservative MPs who tell me he's overplayed his hand.


Some were on the record. Yesterday we saw Ed Balls who can be very


tribal - he's not so good at taking it. We're finished. But here's a


prediction. We'll come back do this. As you may have noticed, it is


chucking it down out there. According to the forecast, parts of


the UK can expect a month's worth of rain in the next 48 hours. The


Met Office told us it would be dry. It is what makes the British summer


great! But for many whose homes are at risk of flood, the threatened


downpour is serious stuff. And it could get worse if a deal on flood


insurance between the government and the industry expires next year.


Here is Len Tingle, our political editor in Yorkshire.


This man demonstrates brand new flood defences just fitted to his


front door. Affected, he hopes, to keep out the water. Five years ago,


this is what happened to his street. This is just outside Barnsley in


South Yorkshire. The nearby river burst its banks and locals were


rescued by boat, waves up to five feet high burst through doors, and


destroyed everything in sight. There had not been a single flat


here since the 1950s. The Environment Agency says it cannot


reduce the risk of it happening again to less than once every 25


years. That is a risk too far for insurance companies. I would need


to pay 800, 900 pounds more. could be far worse. Across all


affected areas, at temporary deal between the government and effected


insurers are keeping coverage in place. The deal runs out next year


and the insurers want a new one, with government agreeing to


underwrite property in the highest areas. If we ever managed to get


insurance again. This man is the Finance Minister. Last week he


toured some of the latest area has to be inundated. Here he is near


Halifax in West Yorkshire. We are reducing the spending over four


years by 6%. It is a real priority for us. Broadly speaking, we're


spending similar amounts as the previous government because we're


spending the money smarter. couple of days later, the Prime


Minister visited and neighbouring town. He had a clear message for


the insurers. We need a clear deal with the insurance companies so


that they do what it says on the 10, they provide people with insurance.


Labour warns of falling insurance crisis. At a flat summit in Hull,


there were claims that government spending cuts are deeper than


admitted. Spending on flood defences was cut by this Government


by more than 30 %. The insurance industry have accepted that but


they have said, do not expect us to take up the risk. As the


politicians and insurers argue, the tide of fear and uncertainty grows.


These pictures must have made many reach for their insurance policies.


The fear is that if there is next time, those policies may not exist.


Len Tingle there. And Aidan Kerr, who is Head of Property at the


Association of British Insurers, joins us. Good morning. If the


current agreement is not replace, will you simply stop insuring those


at risk? We're committed to ensuring those who are at risk of


flux. But the fact is that the risk is increasing over time. --


insuring. But if you do not get that agreement with government,


will you stop providing insurance? Insurance will always be available


but as the risk increases, the cost will go up. The issue is about


affordability. I think I would take that as a no. Does the Government


need to ensure that no household in the UK becomes uninsurable? It is a


joint responsibility between the government and the insurance


industry. What do you need from the government? They a government needs


to work with the insurance industry as they have been doing so far.


What does it need to do? It needs to work with us to develop a model.


We need to agree with government a kind of pooling system that allows


those most at risk to be supported by the market more widely. If you


have such a system, and the taxpayers going to be or on the


line for this? -- are going to be responsible for this? The insurance


industry would still hold on to a lot of the risk. There is always a


risk of flooding. I was interviewing a meteorologist last


weekend he was saying that every year we have this conversation. The


risk is always there. You pick and choose where you want to pay and


who you want to insure. For most people come my insurance is very it


affordable. Flood insurance is part of a standard home insurance


package. Where it has happened, people can still get their


insurance renewed. The problem with the packages there is no


stipulation as to how much that will cost. So you do not want to


take the risk? Your parents fear a flood risk. It they live in St Ives.


What would you say? There are 5.2 million homes at risk of flooding.


The Government is planning to cut flood defences. You have a


situation where the last government agreed a deal where they would keep


up flood defences in return for insurance companies subsidising


homes at risk, but we have a situation where this government is


a bit more free-market about it and not keen on the idea. That leaves


people in a difficult situation. They buy annual sled insurance and


in one year's time, they do not know what will happen. Do you think


you will get a deal with the government? I certainly hope so.


Thaw This week, scientists in


Switzerland found the God particle, Andy Murray reached the semifinal


at Wimbledon and we learnt that TomKat were no more. But what else


has been happening in the Westminster village, I hear you


ask? Here is the Week In 60 seconds. The former Defence Secretary Liam


Fox sparked a debate about a potential referendum on Europe. It


sounded a bit like the hokey-cokey. The now ex-boss of Barclays


appeared in front of the parliamentary committee to be


questioned over the interest-rate fixing debacle. He is such a


diamond geezer, as he was on first- name terms with everyone.


George, this was reprehensible behaviour. Nick Clegg gave his


response on the scandal to the children's programme Newsround.


They have got to be responsible for when things go wrong. He said that


being in power may 10 feel like he had had a lobotomy. All the really


big brains head for Question Time, and John Lydon of the sex Pistols,


who disappointed many of his fans by being sane. I do not want my


drugs taxed. And to discuss John Lydon, aka


Rotten's, performance on Question Time last night, we can speak to


his fellow panellist, and something of a rock 'n' roller himself, Alan


Johnsosn, who joins us from Hull. Good morning. How it did he do?


did all right. It is always easier for someone who is not a politician,


because they do not have a constituency to answer to, they are


not expected to take blame for things that happen in the past, at


the moment are in the future. But I thought he captured the mood. I


would think this because I agree with him about having a judge led


inquiry. He was nervous beforehand. He had a go about the smoking ban


beforehand with me but I do not reveal green room conversations.


Did he makes sense on the big issues of our time? Yes, he did. He


made sense on banking and he had important things to say. He puts on


a bit of an act that he is an anarchist, but actually, there is


some establishment in hand. We had this amazing drug confession as


well, but that came from the Tory MP who was on the programme. What


did you make of him? I want to watch wise old men like Alan


Johnson to impart his wisdom. I thought it was preposterous. He


wheeled out some vacuous platitudes. He did at this thing that you can


do it on a show when you're not a politician, you can come to a


crescendo at the end Divya point. He even interrupted the audience.


If people want to be entertained, E C was entertaining. It is Question


Time, it is not supposed to be entertaining. Alan Johnson, are you


telling me that John Lydon is your adviser on banking policy now?


but the name is quite appropriate, because something rotten is


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