:00:38. > :00:41.Afternoon, folks. Welcome to the Daily Politics. The government
:00:41. > :00:46.spends �280 million helping first time buyers on to the housing
:00:46. > :00:49.ladder. But will this really help us out of the housing crisis?
:00:49. > :00:54.Credit rating agencies downgrade spanish bonds to one notch above
:00:54. > :01:03.junk status. But what do the financial markets know? We'll be
:01:03. > :01:08.speaking to polemicist Max Keiser. But say direct result of a bank's
:01:08. > :01:13.confiscating millions from the economy using illegal practices and
:01:13. > :01:18.larceny. Could David Cameron and Alex
:01:18. > :01:23.Salmond open the door to allow 16 and 17-year-old to vote? They will
:01:23. > :01:26.be allowed to in the referendum of Scotland. We are going to debate it.
:01:26. > :01:33.And how would Conservatives here vote in the US presidential
:01:33. > :01:36.election? Not necessarily for the candidate of the right, apparently.
:01:36. > :01:39.All that coming up in the next hour of top-notch public service
:01:39. > :01:43.broadcasting. And with us for the duration editor of City AM Allister
:01:43. > :01:46.Heath. Welcome to the show. Let's start with the fall out from the
:01:46. > :01:48.collapse of the proposed merger between the aerospace and defence
:01:48. > :01:52.equipment manufacturer BAe Systems, the group once know as British
:01:52. > :01:54.Aerospace, and the giant european aerospace manufacturer EADS. The
:01:54. > :02:01.deal would have created a European defence titan with combined sales
:02:01. > :02:04.of �60 billion and a serious rival to American companies like Boeing.
:02:04. > :02:08.But it floundered on the insistence of the French and German
:02:08. > :02:12.governments that they hold on to a sizeable shareholding. BAe employs
:02:12. > :02:19.over 50,000 workers in the UK. Many in this jet-building factory near
:02:19. > :02:24.Preston. The local MP Mark Hendrick joins us now. Were you disappointed
:02:24. > :02:28.it did not go ahead? Very disappointed. Quite exasperated,
:02:28. > :02:32.actually, because potentially it would have created a huge company
:02:32. > :02:36.to compete with the American giants, which is what is needed for the
:02:36. > :02:39.future. The jobs here are fairly safe for the short to medium term
:02:39. > :02:43.but, in the longer term, there needs to be some European
:02:43. > :02:48.consolidation in order to take on the Americans, otherwise Europe
:02:48. > :02:51.will fall behind. Wasn't there a huge risk if it had gone ahead, and
:02:51. > :02:55.clearly many people thought there were flaws in the deal being done,
:02:55. > :02:59.you would have lost their jobs in your constituency anyway, because
:02:59. > :03:02.they could have gone to France and Germany? That's true, because the
:03:02. > :03:08.French and German governments needed to reduce their shareholders
:03:08. > :03:10.down to 90% and then there could have been some balance on the
:03:10. > :03:15.governance of the new company, but what would have happened if the
:03:15. > :03:17.deal had gone ahead in the form presented, the German and French
:03:17. > :03:21.governments would have had the better deal, and decisions would
:03:21. > :03:26.have been made on a political basis rather than on commercial logic.
:03:26. > :03:30.That may have meant jobs in Lancashire are going to Germany.
:03:30. > :03:36.people in your constituency could be puzzled as you're puzzled the
:03:36. > :03:40.merger did not go ahead? It makes commercial logic. In the longer
:03:41. > :03:45.term, what we want to see are the French and German governments
:03:45. > :03:50.reducing their stake and decisions are made on commercial logic and
:03:50. > :03:53.jobs and investment stay in the UK, and not on the basis of expedience
:03:53. > :03:57.for the German and French governments. What will happen now
:03:58. > :04:03.as far as BAe is concerned? Will it survive or will it be vulnerable to
:04:03. > :04:06.a takeover from elsewhere? BAe has exposed itself. The deal has not
:04:06. > :04:10.gone ahead and the fact they did not ask for an extension to
:04:10. > :04:14.continue negotiations mean the likelihood in the short term of a
:04:14. > :04:18.deal with the Europeans is now off the table. The big American
:04:18. > :04:25.companies like Boeing will look at BAe and decide whether they wish to
:04:25. > :04:29.move in because, clearly, BAe, while it has orders, really needs
:04:29. > :04:33.civil work because it's on the increase and military work, due to
:04:33. > :04:38.the huge defence cuts in America and here, is on the down slope. In
:04:38. > :04:43.order to secured its future, BAe needs to diversify and, ideally, we
:04:43. > :04:46.could do that with the Europeans, but if not, obviously there are big
:04:47. > :04:52.American companies which might fancy taking over. OK, thank you
:04:52. > :04:56.very much. The British Government was never quite explicit about how
:04:56. > :05:00.much it wanted his deal to take place. We now know from Jeremy
:05:00. > :05:04.Heywood, the Cabinet Secretary in 10 Downing Street, through a whole
:05:05. > :05:09.host of senior establishment figures, they wanted this to happen,
:05:09. > :05:11.but it could have been a political crisis for a government? Yes, I'm
:05:11. > :05:15.astonished how the Government backed this tour without thinking
:05:15. > :05:19.about it and looking at the detail. It was apparent to me one it was
:05:19. > :05:27.announced it would not work. It's a political deal. The Germans, French
:05:27. > :05:32.and the Americans, because BAe has a preferred status depending on
:05:32. > :05:36.assets to the market. It didn't seem to make sense. Commercially,
:05:36. > :05:40.the deal failed completely. It's quite astonishing to see the
:05:40. > :05:44.biggest shareholder in one of the UK's biggest companies falling out
:05:44. > :05:48.completely with the board of the company, so this was a really
:05:48. > :05:54.disastrous deal, badly managed, and everybody involved has failed.
:05:54. > :05:57.Someone at the top of BAe needs to step down, I think. Yes, your paper
:05:57. > :06:02.said youth or the chairman at the very least, the chief executive,
:06:02. > :06:06.should stay, but the chairman should step down. Yes, some money
:06:06. > :06:09.to pay the price for this disastrous deal. It collapsed so
:06:09. > :06:13.quickly and it was not thought through properly. There was no way
:06:13. > :06:17.the French and Germans were going to give up control over their own
:06:17. > :06:20.domestic defence industries. This is a corporate system where
:06:20. > :06:23.governments call the shot. You can't run them on a commercial
:06:23. > :06:30.basis. The when I interviewed Philip Hammond about this, on
:06:30. > :06:34.Monday, from up in Birmingham, the Defence Secretary, he had to have
:06:34. > :06:38.been a crucial part of this. You think you would have been. He
:06:38. > :06:43.seemed to be prepared to allow a deal to go ahead in which the
:06:43. > :06:48.French and Germans would still have a 9% each and the British
:06:48. > :06:52.Government would have 0%. Don't you think that would have caused the
:06:52. > :06:56.Tories a lot of problems on their own back benches? Yes, there would
:06:56. > :07:00.be a lot of upset about it. Ultimately, I just didn't
:07:00. > :07:05.understand why they backed this deal. It's a very important
:07:05. > :07:08.decision to make. Do we want to have a European defence industry,
:07:08. > :07:12.an integrated European defence force one day? There is a political
:07:12. > :07:16.message underlying this, which has to be decided in the next few years
:07:16. > :07:20.when it comes to our relationship with the EU, and allowing the whole
:07:20. > :07:24.thing to be decided in the way it could have been decided, had the
:07:24. > :07:33.merger, had, strikes me as something very strange and not
:07:33. > :07:38.thought out. It would have been the biggest merger in history.
:07:38. > :07:41.would have been taken over by EADS. I agree. It involves the biggest
:07:41. > :07:44.manufacturing company in Britain and yet, I don't think we've heard
:07:44. > :07:49.a word from the Prime Minister. There was not enough discussion and
:07:49. > :07:53.debate about this. I'm more in favour of free markets than anybody
:07:53. > :07:57.else but this was not that kind of deal. This was a bad governance,
:07:57. > :08:00.governments, politics, the long- term relationship between the UK
:08:00. > :08:05.defence establishment and the European and American defence
:08:05. > :08:09.establishment. There needed to be a proper discussion. On a purely City
:08:09. > :08:15.terms, the deal was a failure. A revolt of shareholders. I don't
:08:15. > :08:19.understand what they were playing at. It's not going ahead. No, I
:08:19. > :08:23.wouldn't be surprised if it came back on the agenda some time. It
:08:23. > :08:29.would be European companies. wouldn't be surprised if somebody
:08:29. > :08:35.tries to bring life to this. Remember where you heard this first.
:08:35. > :08:38.Now time for our daily quiz. A car previously owned by David and
:08:38. > :08:41.Samantha Cameron is being auctioned today. The car was bought by the
:08:41. > :08:44.Prime Minister as a surprise present for is wife way back in
:08:44. > :08:52.1998. And it's expected to fetch up to �12,000 at the auction today.
:08:52. > :09:00.But what kind of car is it? Is it: At the end of the show we'll see if
:09:00. > :09:04.Allister knows the answer. I don't think he does. No, but he has got
:09:04. > :09:07.time to find out. Now, as we read the runes of the conference season,
:09:07. > :09:10.one of the policy problems that all three parties said they knew how to
:09:10. > :09:13.solve was housing. And, as if by magic, today the government is
:09:13. > :09:16.announcing the latest allocations of funds from their First Buy
:09:16. > :09:23.scheme which aims to reduce the amount of deposit first time buyers
:09:23. > :09:27.have to have to save. In a moment I'll be speaking to the Housing
:09:27. > :09:30.Minister Mark Prisk. But first, Jo has put on her hard hat and taken a
:09:30. > :09:32.look at Britain's housing crisis. That's right, Andrew. The Prime
:09:32. > :09:36.Minister said yesterday the Conservatives are the party of home
:09:36. > :09:40.ownership. But are enough new homes being built? There are three
:09:40. > :09:42.million 20 to 34-year-olds still living with their parents. And,
:09:42. > :09:48.according to government figures, the total number of households in
:09:48. > :09:55.the UK is expected to hit 27.5 million by 2033. Up by 5.3 million
:09:55. > :10:00.since 2008. That's an extra 232,000 households every year. So are
:10:00. > :10:03.enough new homes being built to meet this increased need? Well,
:10:03. > :10:09.government figures show only 21,540 were started in the three months
:10:09. > :10:19.from April to June of this year. A drop of 10% on the first three
:10:19. > :10:19.
:10:19. > :10:27.months. That's 54% below the pre- year, only 98,670 homes were
:10:27. > :10:37.started. Also down 10% on the previous year. And way below the
:10:37. > :10:38.
:10:38. > :10:43.232,000 needed to meet the The problem is that there's not
:10:43. > :10:48.enough homes. What is needed? What is the priority, as far as you're
:10:48. > :10:50.concerned? It's great to see housing got a strong profile in the
:10:50. > :10:54.conference programmes across the political parties. It's very clear
:10:54. > :10:57.now that this is going to be significant coming up to the
:10:57. > :11:03.election. There's a number of younger families worried about
:11:03. > :11:08.getting on the ladder, worried that their bank of mum and dad may not
:11:08. > :11:12.help out with a deposit, so the profile is welcome. We now need
:11:12. > :11:15.policy to link up with that rhetoric and at the moment, we're
:11:15. > :11:19.getting from successive governments, a number of small schemes which
:11:19. > :11:24.nibble around the edges but not been changing policies which will
:11:24. > :11:29.deliver 232,000. What is the policy needed? The Government needs to
:11:29. > :11:32.look far more seriously at how we reduce the price of land to make it
:11:32. > :11:37.more affordable. Look at the structure of the development market.
:11:37. > :11:41.A small number of large developers who have never deliver the kinds of
:11:41. > :11:48.numbers of homes we now need. They need to bring in more competition
:11:48. > :11:52.into that sector. They need to bring in bigger, simplified schemes
:11:52. > :12:00.along the lines of First Buy. To help those on the middle and lower
:12:00. > :12:05.incomes. But what's the point of this it does no homes out there for
:12:05. > :12:08.them to buy? The primary focus has to be on supplying. It's
:12:08. > :12:14.interesting home ownership, a staple of political rhetoric for
:12:14. > :12:22.the last 30 years, is now in decline. Since 2003. We have far
:12:22. > :12:27.too many mortgages and home ownership so it clearly not a
:12:27. > :12:32.mortgage problem but a supply problem. Should we encourage people
:12:32. > :12:36.to get onto the housing ladder when it is so expensive? That is
:12:36. > :12:39.arguably what caused the crash in the first place. Certainly we need
:12:39. > :12:42.to make sure mortgage regulation and lending is done very sensibly.
:12:43. > :12:48.We need to look at the private rented sector where people can't
:12:48. > :12:54.get in the social housing, can't to become homeowners, and many more
:12:54. > :12:58.families end up in that sector, over one million. This does not
:12:58. > :13:02.provide the stability the need. They signed contracts for one year
:13:02. > :13:09.but put their children to school for up to five years. The governor
:13:09. > :13:13.needs to reform that sector as well. The thank you very much. And the
:13:13. > :13:22.shiny new Housing Minister Mark Prisk is here. Is this your first
:13:22. > :13:31.appearance? Yes, it is. Less look at the context of this initiative.
:13:31. > :13:35.There were 120,000 houses built in the 2010. 98,000 last year. Down at
:13:35. > :13:41.20,000. How many will be built this year? So far we have seen
:13:41. > :13:46.completions, not starts, which is very important because they
:13:46. > :13:49.sometimes stay as foundations. I don't believe in speculate in a
:13:49. > :13:54.whopper number will be in the next six months but, so far, in the
:13:54. > :14:02.private sector, there is some real progress. Overall, how much will
:14:02. > :14:07.housing be? You build 98 last year, rounded up to 100, so you say
:14:07. > :14:10.110,000 this year? I'm not going to guess. We are in the middle of
:14:10. > :14:15.October, and is only a couple more months to go and not much happens
:14:15. > :14:18.over Christmas. You must know how many completions we will have this
:14:18. > :14:25.year? We are on target for an improvement on that and I'm making
:14:25. > :14:30.sure, not only do we do things about supplying would also demand.
:14:30. > :14:34.That is what the First Buy is about. Even with an 80% increase, you will
:14:34. > :14:39.still build fewer houses this year than were built in 2010 when you
:14:39. > :14:44.came to power, and that was only 120,004 for a pretty bad figure in
:14:44. > :14:48.its own right. There has been a long dysfunctional market, rented
:14:48. > :14:53.and ownership, but what I would say, we are looking to make sure
:14:53. > :14:59.affordable homes are expanded. Making sure private rented sector
:14:59. > :15:03.is expanded. And using things like First Buy so the first buyers can
:15:03. > :15:09.come into the market because if you help them, you unlock the housing
:15:09. > :15:12.chain. It's got to be balanced carefully here. Alastair would
:15:12. > :15:16.think we don't want to create the next boom and bust but we want to
:15:17. > :15:20.make sure we are investing. I can assure you, you are a long way over
:15:20. > :15:23.from a boom of for so I don't see how you can put life into the
:15:23. > :15:33.housing market for affordable housing when you're cutting capital
:15:33. > :15:40.
:15:40. > :15:45.$:/STARTFEED.. You're cutting capital spending on housing by 60%.
:15:45. > :15:51.The public sector side. We are using the public sector money to
:15:51. > :15:56.leave a private money. This scheme, where you get a mortgage, but you
:15:56. > :16:02.get a loan as well to help you with the deposit. You only have to raise
:16:03. > :16:07.5%. How many people will this help? In its first 12 months we have seen
:16:07. > :16:14.3,000 sales and 8,000 reservations. This year we will double that. We
:16:14. > :16:19.are looking at 27,000 first-time buyers. We were told it would help
:16:19. > :16:22.16,500 first-time buyers. That is from this year onwards. Many people
:16:22. > :16:29.are on bleak affordable housing waiting list. A more than that.
:16:29. > :16:35.many? I don't know. 1.8 million on the waiting list. Would you like to
:16:35. > :16:39.give me these figures again of how much your scheme will buy?
:16:39. > :16:43.first time by ink is about helping a third -- particular group. The
:16:43. > :16:50.affordable housing programme is bigger than that, that is 170,000
:16:50. > :16:53.homes in that market. This scheme will help very few people and on
:16:53. > :16:58.the start to a state where you launched it, you needed a joint
:16:58. > :17:06.income of �60,000 to take part. Is that right? You have to make sure
:17:06. > :17:11.you have an income. Winnie goes there, where I launched it, what
:17:11. > :17:18.you see is the number of affordable homes was nil because the old
:17:18. > :17:23.planning laws prevented it. We will have 114 new homes. It only applies
:17:23. > :17:27.to first-time buyers. It only applies to new-build homes. It
:17:27. > :17:34.can't be used to get a flat somewhere in an existing building,
:17:34. > :17:38.is that right? That is correct. It is designed just for that group.
:17:38. > :17:45.The danger is if we go broader than that, we start reaching beyond its
:17:45. > :17:51.purpose. If we look at new by, that is a broader group. Qui do you
:17:51. > :17:54.think any of these schemes make a blind bit of difference? The real
:17:54. > :17:59.problem is that the price of land has been made artificially very,
:17:59. > :18:03.very expensive bike over restrictive planning rules in this
:18:03. > :18:08.country. We have a distorted construction and housing market.
:18:08. > :18:13.That has been a problem for a long time. We need a massive increase in
:18:13. > :18:18.the building of homes. They need to be the right kind of homes in the
:18:19. > :18:25.right places, not tiny flats in privileged destinations. That is
:18:25. > :18:30.where the change has to come. You need to liberate a lot of land,
:18:30. > :18:35.maybe 1% of the total UK Land Pastor suddenly become developed
:18:35. > :18:44.over the next few years. That is a very big issue that has to be
:18:44. > :18:48.tackled. I see no sign... Tell me otherwise. I see no sign of any
:18:48. > :18:55.housing boom happening in this country for the foreseeable future.
:18:55. > :19:04.We are trying to not have a boom... Even building a lot more. The extra
:19:04. > :19:07.170,000 homes is a good start. 170... 170,000 new houses. The
:19:07. > :19:12.private rented sector which Roger referred to it is an important
:19:12. > :19:19.thing which is often overlooked. It is correct to say that we need more
:19:19. > :19:25.investment and that is what we're looking for. We looked at the run
:19:25. > :19:30.rate for start-ups and so far this year, if you look at the first
:19:30. > :19:37.couple of quarters, start ups of new houses were running at an
:19:37. > :19:41.annual rate of only 80,000. That is below your completion rate. Rather
:19:41. > :19:46.than any danger of a boom, you will probably end up building fewer
:19:46. > :19:52.houses. We are trying to make sure that we don't get ourselves into
:19:52. > :19:58.the danger of creating that potential boom. You're as far from
:19:58. > :20:02.a boom as we are from the Antarctic! Wears the danger of the
:20:03. > :20:09.boom in housing? We have to make a difference. Investing in an
:20:09. > :20:13.affordable homes for makes a difference. You really think
:20:13. > :20:17.there's no cause for concern when start-ups in the first half of this
:20:17. > :20:21.year were running at an annual rate of only 80,000? There's a lot of
:20:21. > :20:26.cause for concern. This is a dysfunctional market that has been
:20:26. > :20:33.like this, whether it is owner- occupied or rented, for 15 to 20
:20:33. > :20:40.years. You are only tinkering at the edges? I don't buy that.
:20:40. > :20:45.don't? We are not tinkering. We are looking at where the problems are
:20:45. > :20:50.in supply and demand and using this scheme intelligently. The demand
:20:50. > :20:54.side stuff, I worry when you guarantee loans, first time buyers
:20:54. > :21:00.only have to put in 5%. House prices in most of the UK are
:21:00. > :21:04.falling. It is very plausible that a lot of these people will be
:21:04. > :21:09.pushed into negative equity and this will create a situation of
:21:09. > :21:13.sub-prime light where thousands are encouraged to buy... If we helped
:21:13. > :21:16.the supply and demand we can make a difference. It is a tough market
:21:16. > :21:23.and I don't want to over a promise. We can make a difference, but I'm
:21:23. > :21:29.careful about it. Thank you. Don't become a stranger. Don't go hiding
:21:29. > :21:32.when the figures get worse! Life is getting more difficult for
:21:32. > :21:35.Spain and the situation for the eurozone more perilous. Last night,
:21:35. > :21:40.the credit rating agency Standard & Poor's downgraded Spanish bonds -
:21:40. > :21:42.or government IOUs - to BBB minus, or just above junk status. This
:21:42. > :21:46.morning, the markets have reacted and it's got more expensive for
:21:46. > :21:50.Spain to borrow money. But what do these credit ratings agencies know
:21:51. > :22:00.and have we all become slaves to the financial markets? This man
:22:01. > :22:06.thinks so. Bankers? They need to be dredged out on the streets and
:22:06. > :22:11.shafted. The bloody bankers, they are responsible for the food banks,
:22:11. > :22:19.this bloody shower of a government is prostituting itself for the
:22:19. > :22:23.bloody bankers. The omniscient London taxi driver. It is absurd to
:22:23. > :22:28.think that it is a period of Banket bashing that has come to a close
:22:28. > :22:34.because we have not even begun to - the bankers. We will fight them in
:22:34. > :22:41.the trenches. We haven't even started. How dare they say it time
:22:41. > :22:48.to stop? It is absurd. Makes our programme seemed quite quiet! And
:22:48. > :22:53.the star of the Keiser Report - Max Keiser - joins us now. We take our
:22:53. > :23:00.inspiration from you. You are the template we try to follow. There
:23:00. > :23:04.goes my trance -- my chance of contract renewal! Give me a system
:23:04. > :23:11.that works without bankers. We saw some great bridge bank against
:23:11. > :23:16.Bankers in Iceland. -- push back. They got the country into deep
:23:16. > :23:20.trouble and they effectively pushed back begins the bankers. They had
:23:20. > :23:26.been economic downturn and now they are recovering. They still have
:23:26. > :23:31.banks. Sure. The problem is not banking per se, but too big to fail
:23:31. > :23:35.banks. Part of the crisis of 2008 was that the big banks got even
:23:35. > :23:40.bigger. We have fewer of these institutions. Iceland is the best
:23:40. > :23:47.we can do? It is a great example. You ask me for examples. I'm not
:23:47. > :23:52.arguing. It is a global problem. We don't have a lot of great examples.
:23:53. > :23:57.We need banks. The banking institutions are a necessary part
:23:57. > :24:02.of running society, no doubt, but when you have too big to fail banks
:24:02. > :24:07.and bankers engaging in wholesale fraud, manipulation, insider
:24:07. > :24:13.trading, this country... In London you have just come out of the libel
:24:13. > :24:17.scandal and other scandals. The City of London is the most regular
:24:17. > :24:21.to relax environment in the world. AIG come through London, Lehman
:24:21. > :24:25.Brothers come through London. All of these scandals come through
:24:25. > :24:29.London because they have very lax banking standards and that is one
:24:29. > :24:33.thing for prime minister should address. He should address this
:24:33. > :24:38.issue, to get rid of some of these guys who are making it very
:24:38. > :24:42.difficult. Whether or not we need banks, and we probably do, the
:24:42. > :24:48.record of the banks in recent years has been quite appalling. Just when
:24:48. > :24:53.you think it will get better, some other mis-selling or scandal or
:24:53. > :24:57.moving the money of the Mexican drug cartels or helping finance the
:24:57. > :25:02.Iranian government against sanctions. You couldn't make it up.
:25:02. > :25:08.It has been catastrophic. Why were these decisions made? One wire --
:25:08. > :25:13.why was there a huge bubble? A huge cluster of errors made by bankers
:25:13. > :25:18.and financial services? The first explanation is it is a spontaneous
:25:18. > :25:22.outcome when you have banks and capitalism. That is my view. The
:25:23. > :25:25.markets were horribly distorted by a very lax and ridiculous monetary
:25:25. > :25:30.policy and ridiculous guarantees from governments and intervention
:25:30. > :25:35.at this idea that big banks would be bailed out and the Federal
:25:35. > :25:41.Reserve would always step in if the financial markets went down. Those
:25:41. > :25:46.two factors were the dominant cause of the financial crisis. We have
:25:46. > :25:51.common views in terms of monetary policy. It has been a catastrophe.
:25:52. > :25:55.It is not a spontaneous eruption of fraud. There's more premeditation
:25:55. > :26:02.going on because somehow bankers continued to get enormous bonuses
:26:02. > :26:08.every year. They are not suffering. It is not a spontaneous combustion.
:26:08. > :26:13.The monetary policies are definitely... There it -- there are
:26:14. > :26:18.regulatory loopholes and they must be looked at. The Monetary Policy
:26:18. > :26:24.encourages moral hazard. The Fed and the Bank of England keep giving
:26:24. > :26:28.banks cheap money. That is a massive government failure. Q2 are
:26:28. > :26:33.agreeing! We will have to put an end to this. For when it comes to
:26:33. > :26:37.fraud, there has been a massive error in the UK. Fraud in finance
:26:37. > :26:47.or business in general wasn't prosecuted heavily enough compared
:26:47. > :26:47.
:26:47. > :26:51.to the weight it was in other countries. What we saw a... When
:26:51. > :26:55.there's a bubble, nobody cares, nobody looks for the fraud in the
:26:56. > :27:00.crime, everybody's happy. When there's a recession, everybody
:27:00. > :27:03.starts looking under every stone and finds horrible things.
:27:03. > :27:08.housing market booms and everybody says look the other way because my
:27:08. > :27:12.house is going up. The housing market collapses and they go, wait
:27:12. > :27:17.imminent. -- wait a minute. There was a massive pharmaceutical
:27:17. > :27:22.scandal recently where one company had to pay it -- making huge fine.
:27:22. > :27:27.It didn't make the front pages. Rightly we are exposing scandals
:27:27. > :27:32.and banking. Let's focus on the new regulator, Martin Wheatley. They
:27:32. > :27:35.are bringing in a new regulatory agency. He says we will start
:27:35. > :27:43.prosecuting crimes in the future, they should start to look at the
:27:44. > :27:48.crimes that are still seething in the present. They bring in a new
:27:48. > :27:52.regulator, out with the old, in with the new, deflect attention.
:27:52. > :28:02.Martin Wheatley has an demonstrated... If he wanted to do
:28:02. > :28:14.
:28:14. > :28:17.A way key Iceland is the way ahead? The way ahead is to treat banks
:28:17. > :28:20.much more like other kinds of businesses and make sure that
:28:20. > :28:24.failure in banking is published in the same way it is punished in
:28:24. > :28:28.other industries, with bankruptcy and loss. You can't nationalise
:28:28. > :28:33.losses. You need to find new ways of allowing the biggest banks to go
:28:33. > :28:38.bankrupt. Her what would be the effect on the population at large?
:28:38. > :28:42.Exactly. You have to protect that, but you have to make sure the
:28:43. > :28:48.bondholders that were bailed out pay the price. There's ways of
:28:48. > :28:53.doing this. That is the most important point. You need to have
:28:53. > :28:57.real capitalism in banking, not the rigged markets we've seen. Haven't
:28:57. > :29:02.we become too dependent on the financial markets? We borrow so
:29:02. > :29:08.much as individuals and as governments. We wouldn't have to be
:29:08. > :29:13.in hock to these guys if we lived within our means. That is true.
:29:13. > :29:17.Banks make money by putting money - - people in hock. You see this on
:29:17. > :29:22.an individual level with the pushing of credit cards, but also
:29:22. > :29:25.on a regional level and sovereign level. The problem in the eurozone
:29:25. > :29:29.was these countries were forced into these huge debt positions,
:29:29. > :29:33.particularly Greece, they were encouraged into enormous debt
:29:33. > :29:40.before a jury -- joining the euro by bankers on Wall Street.
:29:40. > :29:44.banks made them do it. You can fudge the rules by not complying to
:29:44. > :29:48.the Maastricht treaty, according to Goldman Sachs. The politicians went
:29:48. > :29:56.along with that. I don't buy this idea that borrowers are powerless
:29:56. > :30:00.people who have to borrow. Tainted meat! They need consumer
:30:00. > :30:07.protections. People are selling bad debts. Politicians borrowed too
:30:07. > :30:14.much because they were stupid. They joined the euro. I knew I could get
:30:14. > :30:20.the two of you to disagree. Who is the biggest contributor to the re-
:30:20. > :30:30.election campaigns in the US? Wall Street. David Cameron is very, very
:30:30. > :30:32.
:30:32. > :30:36.city with the City of London. And, Max, you're staying with us
:30:36. > :30:39.because, did you understand any of what we heard there? Do you know
:30:39. > :30:41.your debt from your deficit? Your RPI from your CPI? Your QE from
:30:41. > :30:45.your government bonds? They're terms we hear on programmes like
:30:45. > :30:48.this one all of the time. But we at the Daily Politics believe that our
:30:48. > :30:58.audience should be well informed. So Susana Mendonca has put together
:30:58. > :31:03.
:31:03. > :31:07.her very own shopping list of terms Goods and services, we all buy them
:31:07. > :31:12.and the price we pay for them changes over time. The inflation is
:31:12. > :31:17.the rate at which that change happens. Say this basket of
:31:17. > :31:23.groceries cost me �10 today. An extra 25p for the same items in one
:31:23. > :31:28.year. That would mean inflation had gone up by 2.5%. But there are
:31:28. > :31:37.different ways to construct a representative basket. There is the
:31:37. > :31:44.RPI, and CPI, I think I might need a copy of this now. The main
:31:44. > :31:50.difference between them is that the RPI includes mortgage interest
:31:50. > :31:55.payments and the CPI does not. Meaning the RPI tends to lead to
:31:55. > :32:00.the entire outcomes for inflation. Debt and deficit. Don't confuse
:32:00. > :32:08.them. Debt is the total amount of UK government owing, whilst the
:32:08. > :32:12.deficit is added to that debt each year. That's what I was looking for,
:32:12. > :32:17.a bit of feta cheese, which brings me to another financial phrase we
:32:17. > :32:21.hear a lot about. The eurozone debt crisis. The eurozone debt crisis is
:32:21. > :32:27.the result of market's thinking that the peripheral countries of
:32:27. > :32:30.Europe, Portugal, Ireland, Italy, Spain and Greece have bad debts,
:32:31. > :32:34.and can only be lent to at very high interest rates. The Bank of
:32:34. > :32:41.England has rolled out a couple of rounds of quantitative easing,
:32:41. > :32:45.printing money to you and die. print anatomically and use it to
:32:45. > :32:49.buy a specific types of assets, long-term debt, held by financial
:32:49. > :32:53.institutions and companies. This makes debt cheaper for those
:32:53. > :32:58.companies and allows them to keep operations ticking over. The
:32:58. > :33:02.problem is, it is very hard to determine what effect it's actually
:33:02. > :33:08.had and if it has had positive effect, it could make the rich
:33:08. > :33:13.richer. Why not throw in a few Bonts? Imagine I want to borrow
:33:13. > :33:18.money from you, I would say, lend me 10 quid until next week. If I am
:33:18. > :33:24.a government, I want to borrow billions of pounds, obviously this
:33:24. > :33:28.not one person to give me a cheque for that much, so I split it into
:33:28. > :33:36.little Bonts and sell them so people can buy the bike to get
:33:36. > :33:39.interest on the debt from me. -- born tos. That's the shopping done.
:33:39. > :33:43.I'm off to find out what the word broke means.
:33:43. > :33:47.I think I can help you with that one, Susanna.
:33:47. > :33:51.Max and Allister are still here. Andrew Hawkins from ComRes joins us.
:33:51. > :33:56.The economy has been the main issue for the last five years. Has
:33:56. > :34:00.economic literacy improved? I don't if it improved in the last five
:34:00. > :34:06.years, but in that context of the present crisis, nine out of 10 of
:34:06. > :34:12.the public, in some recent polling, actually thought at the end of this
:34:12. > :34:17.Parliament, the Government will have paid back �600 billion in debt,
:34:17. > :34:21.rather than increased it, and the political row of the occasions of
:34:21. > :34:27.but obviously are huge. The Government's message on the deficit
:34:27. > :34:31.has been very strong. When you look at who wrongly believes the debt is
:34:31. > :34:35.being repaid, the Government could be in real difficulty because most
:34:36. > :34:39.of those are Conservative voters. So when it comes to saying of the
:34:39. > :34:46.economy is stupid, how are politicians supposed to direct
:34:46. > :34:51.their campaigns if the understanding is pretty mediocre?
:34:51. > :34:55.It can be done. The single message in the last election was a brace
:34:55. > :35:02.yourself, it's going to be bad. The trouble is, the timing of the cuts
:35:02. > :35:06.and the nature of them haven't really affected people. Obviously,
:35:06. > :35:10.you go for the easiest things to cut first and then get into the
:35:10. > :35:14.nitty-gritty. The fact that the economy has not turned around, the
:35:14. > :35:20.time has been delayed when the nasty cuts are going to hit at the
:35:20. > :35:24.next election. If one doesn't really understand enough about
:35:24. > :35:30.fiscal and monetary policy, austerity verses fiscal stimulus,
:35:30. > :35:33.how can you decide who to vote for? The it's a terrible problem. These
:35:33. > :35:36.findings are interesting and show it's a major issue at the heart of
:35:36. > :35:42.British culture and anybody is to blame for this. The education
:35:42. > :35:46.system, media and politicians. Nick Clegg not long ago was confusing
:35:46. > :35:51.deficit and debt for the George Osborne has also confused them
:35:51. > :35:54.saying that we are paying down the debt. Is that accidental? The
:35:55. > :36:00.probably accidental, but it shows is a major problem if the
:36:00. > :36:05.politicians are confused. I think it makes matters worse. It's a
:36:05. > :36:10.really big problem. His economic literacy worse in this country than
:36:10. > :36:14.it was 30 years ago? I don't know if it has become worse but what I
:36:14. > :36:18.do know, it is really, really bad, and the basic concepts need to be
:36:18. > :36:22.taught in schools from a younger age. There needs to be public
:36:22. > :36:26.conversation about this and it's about numbers and innumeracy and
:36:26. > :36:32.percentages, the difference between millions and billions. But people
:36:32. > :36:37.will understand the way you have been bashing the bankers. It's a
:36:37. > :36:41.simple concept but, beyond that, perhaps they don't really know what
:36:41. > :36:46.you're talking about in terms of regulation. Is there any point
:36:46. > :36:52.going on about it? Financial literacy is a problem and clearly,
:36:52. > :36:55.it is, you have to ask yourself whether George Osborne puts forward
:36:55. > :37:01.a scheme to exchange rights for shares to a population and knows
:37:01. > :37:05.nothing about shares. You have to ask yourself, is George Osborne
:37:05. > :37:09.exploiting that knowledge gap? Exploiting the a literacy to get
:37:09. > :37:14.bigger to sign up for something not in their best interests? That is
:37:14. > :37:18.shameless. I was shocked he made that offered to the public. The I
:37:18. > :37:25.also shocked by Ed Miliband and others saying millionaires are
:37:25. > :37:31.going to get a cheque for �40,000. Because of cutting the income tax
:37:31. > :37:36.to a 45p. He said the redistribution, which attacks the
:37:36. > :37:41.problems in the system, before they develop and get out of hands,
:37:41. > :37:46.that's interesting concept, adopted by Margaret Thatcher. It was a
:37:46. > :37:51.justification for selling off the council estates. There were some
:37:51. > :37:58.interesting policies which I think are more market sensitive. This
:37:58. > :38:02.prime minister, this chancellor, shows remarkable market illiteracy.
:38:02. > :38:07.I agree. The Ed Miliband argument about millionaires, every single
:38:07. > :38:08.millionaire in the country being given a cheque was clearly wrong
:38:08. > :38:13.and something Republic could have understood immediately had there
:38:13. > :38:17.been more financial literacy. It's a damn a complicated debate about
:38:17. > :38:25.the cause of the crisis if there's not more financial literacy. I
:38:25. > :38:33.would argue that that is why your ideas are not so successful. Your
:38:33. > :38:40.ottomans are more complicated? easier than saying there's a whole
:38:40. > :38:44.set of issues, cheaper money, imbalances, all that sort of stuff.
:38:44. > :38:48.There is an issue of right and wrong. Listening to the Prime
:38:48. > :38:53.Minister in his speech, he talks about ambition for the country to
:38:53. > :39:00.knuckle down a. That would encourage fair play. When you have
:39:00. > :39:05.a looting at the banks, rigging scandals, laundering drug money,
:39:05. > :39:10.it's tough to put the opposition out there. Aren't all politicians
:39:10. > :39:16.guilty of putting a political gloss on a more complicated economic
:39:16. > :39:19.message? He yes, and people who support different parties will see
:39:19. > :39:24.a political message in what they want to see, but we shouldn't
:39:24. > :39:33.forget an awful lot of people are in business, run businesses, and I
:39:33. > :39:36.seem to recall in the days before I had lots of grey hair, Margaret
:39:36. > :39:42.Thatcher countered this in grocer's shop finances and I think people
:39:42. > :39:48.understood that. The chattering classes may deter for doing that.
:39:48. > :39:54.But today, for example, I wouldn't want to be having debt higher than
:39:54. > :40:00.5% of my turnover. The Government seems to think it's OK to have a
:40:00. > :40:06.debt 15 times the size of that 5%. Yes, people also understand, of
:40:06. > :40:11.course, the analogy of you have your credit-card, and you spend it
:40:11. > :40:14.all, then you have a problem. The Government do not have a credit
:40:14. > :40:19.card but run debt for the it's different when you talk about
:40:19. > :40:24.governments, because they can print money and do all sorts of things.
:40:24. > :40:28.Consumers are not empowered to make the right choices when it comes to
:40:28. > :40:35.financial services. You have had endless scandals. Miss selling and
:40:35. > :40:40.so on. It never ends and the never solve these problems and people are
:40:40. > :40:44.not saving enough and have enough pensions. It's a major problem.
:40:44. > :40:48.going to up to stop you there for that we will have to get you one
:40:48. > :40:54.for an economics lesson in future. Thank you very much. Come back and
:40:54. > :40:57.see us. Now, on Monday, the Prime Minister and First Minister of
:40:57. > :41:01.Scotland will meet to seal the deal on a referendum on independence.
:41:01. > :41:04.Part of that deal is said to be a concession which will allow 16 and
:41:04. > :41:11.17-year-olds to vote in the poll expected to be held in two year's
:41:11. > :41:14.time. It looks like the nationalists will agree there is
:41:14. > :41:22.only one question, are you for against it? Concern about the
:41:22. > :41:27.proposal was raised in the House of I beg leave to ask a question about
:41:28. > :41:31.which I have given private notice. The question is as follows. To ask
:41:31. > :41:36.her Majesty's Government, whether, before the Prime Minister meets the
:41:36. > :41:40.First Minister of Scotland on Monday 15th October, they will
:41:40. > :41:46.clarify whether it is proposed to extend the franchise in any
:41:47. > :41:51.referendum on Scottish independence to 16 and 17-year-old and, if so,
:41:51. > :41:59.by what legislative means? And what of the implications for electoral
:41:59. > :42:02.law in the UK? My Lords, people in Scotland deserve a referendum of
:42:03. > :42:06.the Scottish independence which is legal, and decisive. There has been
:42:06. > :42:09.progress made towards an agreement but details are still under
:42:09. > :42:13.negotiation between the two governments. The Government which
:42:13. > :42:18.will both houses of parliament are fully informed and are required to
:42:18. > :42:23.provide components to the Scottish parliament will require the
:42:23. > :42:30.approval of both Houses and Her Majesty's Council. Could I suggest
:42:30. > :42:36.he's not answered my question? Matters of electoral importance and
:42:36. > :42:41.the extension of the franchise are not matters to be carried out in a
:42:41. > :42:44.corner negotiations, however senior the party. If the franchise is to
:42:44. > :42:48.be extended in Scotland for referendum, is it not inevitable
:42:48. > :42:52.that we will have to extend it to 16 year-olds for all elections
:42:52. > :42:56.throughout the UK? A matter which has huge implications, not least
:42:56. > :43:01.that it will bring politics into schools? If the Government is
:43:01. > :43:05.proposing to do that, would it not be proper for them to issue a paper
:43:05. > :43:10.for consultation and to consult widely and make no commitments
:43:10. > :43:13.what's above until they have done And here to debate the pros and
:43:13. > :43:17.cons of lowering the voting age are the Conservative MP Eleanor Laing.
:43:17. > :43:23.And Rhammel Afflick from the British Youth Council. Welcome to
:43:23. > :43:28.both of you. Do Conservatives oppose votes for 16 and 17 year-
:43:28. > :43:31.olds? No, in principle, not because they will vote one way or another
:43:31. > :43:38.but because I think you have to draw the line somewhere. The
:43:38. > :43:45.obvious place to do it is adulthood, 18. Why is that question you can
:43:45. > :43:52.have a job, pay tax, get married at 16? Isn't that the age? You can
:43:52. > :43:56.legally get matter at 16 but I wouldn't recommend it. Why can't
:43:56. > :44:03.you vote them to? It's not a sudden point when somebody becomes an
:44:03. > :44:07.adult, but a process. For some of us, it's still going on! Do I
:44:07. > :44:12.couldn't agree more. I know lots of 16 year-olds who are far, far
:44:12. > :44:15.better informed about politics than many 60 roles. Of course, they are
:44:15. > :44:21.intellectually Capel, writing essays for A-level politics, for
:44:21. > :44:26.example. -- capable. There's nothing intellectually wrong with
:44:26. > :44:31.people being involved in politics. I want people involved at all ages,
:44:31. > :44:38.but you have to draw the line somewhere. It is silly to draw it
:44:38. > :44:43.at 16 for this, when the age of adulthood is 18. It's not fair to
:44:43. > :44:47.give people a responsibility too early. What do you say to that?
:44:47. > :44:51.completely disagree. It is something I have been passionate
:44:51. > :44:56.about for a long time, that people, young people, should be able to
:44:56. > :45:03.vote, simply because, actually, you're quite an independent person
:45:03. > :45:07.at 16, and they are mature enough and they are affected by the
:45:07. > :45:10.decisions the politicians make. They are not able to hold them to
:45:11. > :45:20.account properly without having a vote, so I believe strongly they
:45:21. > :45:23.
:45:23. > :45:28.$:/STARTFEED. Whatever done so is there that 16-year-old would do it?
:45:28. > :45:33.It is not relevant. The reason I say that is because the issue of
:45:33. > :45:38.getting people to vote is a separate issue. If we were having a
:45:38. > :45:41.problem getting women to vote, we would not take away their vote
:45:41. > :45:46.because they are disengaged from politics so I don't believe that is
:45:46. > :45:50.an argument. If you want young people to get involved in politics,
:45:50. > :45:55.why not get in early? There are other ways in which young people
:45:55. > :46:00.get involved, there's a Youth Parliament, the British Youth
:46:00. > :46:03.Council. I hold an annual debating competition in my constituency
:46:03. > :46:06.where kids take part and they are brilliant and they put forward
:46:06. > :46:12.brilliant arguments. They are practising, developing their
:46:12. > :46:16.political ideas. You need to serve an apprenticeship. You are
:46:16. > :46:20.practising at 16 and 17 and at 18 you can vote. Why is your
:46:20. > :46:26.government allowing them to vote in the Scottish referendum? If that is
:46:26. > :46:31.the case, which it looks like it is, it is part of a deal. It is wrong?
:46:31. > :46:35.I still think it is wrong, but I would question the whole franchise
:46:36. > :46:40.of the Scottish referendum. There are more Scots living outside
:46:40. > :46:45.Scotland than there are living in Scotland. A you do think it was
:46:45. > :46:51.wrong to make that part of the deal? I would rather that hadn't
:46:51. > :46:58.happened, but if the deal is that there will be one distinct question
:46:58. > :47:04.on the ballot paper... That is the deal. I'm OK with that. He can have
:47:04. > :47:10.the vote? If that is the deal, he can have the vote. Just this once?
:47:10. > :47:16.Is that really possible? This is a stepping-stone for all elections.
:47:16. > :47:20.Put it back on the agenda. If it has and rightly so. As a 16-year-
:47:20. > :47:24.old, you can pay taxes. Why shouldn't young people be able to
:47:24. > :47:30.have a say on the taxes they are paying? At 16, you have to pay
:47:30. > :47:34.adult fares on the train. If you have an argument that you are going
:47:34. > :47:38.to use Boris Johnson, you don't like what he is dealing with
:47:38. > :47:44.transport in London, the prices are too high, how do you have a saying
:47:44. > :47:48.that? You say this is a stepping stone, this deal will be a stepping
:47:48. > :47:53.stone to other elections, how will you stop it? You won't be able to
:47:53. > :47:58.say you were doing it on just this referendum. It is not a precedent.
:47:58. > :48:04.It puts the matter on the agenda. We had a debate about four years
:48:04. > :48:09.ago on this. There were about 40 people in the chamber, nobody cared.
:48:09. > :48:16.40 is quite a lot these days! That is overcrowding. Perhaps. There
:48:16. > :48:20.weren't many people taking part. I was. It is essential that the
:48:20. > :48:23.matter should be debated in the Commons properly. If Alex Salmond
:48:23. > :48:29.has managed to get it through this time, that doesn't create a
:48:29. > :48:33.precedent. What is upsetting is that something so important,
:48:34. > :48:38.extending devote to 16 and 17 year- olds, has been part of some grubby
:48:38. > :48:42.little compromise. It is like House of Lords reform. It is the sort of
:48:42. > :48:46.thing the public looks at an things, what are the politicians playing
:48:46. > :48:51.at? How can such important questions be decided in this way?
:48:51. > :48:56.They can make it up as they go along. Can I quickly say to you, we
:48:56. > :49:01.have a short gap between her -- before Parliament returns, are you
:49:01. > :49:09.happy Andrew Mitchell will be come back? He has never called me
:49:09. > :49:14.something he shouldn't have. Give him time. Undoubtedly. He is a good
:49:14. > :49:18.chief whip. He was a whip before when it was difficult and he will
:49:18. > :49:22.get on with it now. I care more about his ability to manage
:49:22. > :49:28.business in the House of Commons. He will be able to now?
:49:28. > :49:31.Do you don't fancy him as High Commissioner in Rwanda? He was a
:49:31. > :49:41.very good International Development Secretary ft up her I'll take that
:49:41. > :49:42.
:49:42. > :49:45.as a yes! Thank you. You'll all have your alarm clocks
:49:45. > :49:47.set for 2am tomorrow morning, won't you? Because that's when the debate
:49:47. > :49:51.between the two vice presidential candidates in the November's US
:49:51. > :49:54.general election. Only US citizens get to vote, of course, but we like
:49:54. > :49:56.to extend the franchise here so Adam took his moodbox out at the
:49:57. > :50:06.Tory Party Conference to find out how British Conservatives might
:50:07. > :50:16.
:50:16. > :50:20.Which one of these two would people at the Tory conference like to see
:50:20. > :50:30.in the White House? Let's find out. In America, the colours are the
:50:30. > :50:31.
:50:31. > :50:36.other way around. Romney is red and Obama is blue. Why Mitt Romney?
:50:36. > :50:43.think Obama is no friend of the UK. Ronnie is a nutcase. He is out of
:50:43. > :50:48.touch. Obama is the sensible candidate. We need the American
:50:48. > :50:54.economy to get moving and I think Bromby could do that. I don't think
:50:54. > :50:58.the founding fathers believed in mixing religion and politics. I
:50:58. > :51:03.think mitt Romney is overly religious. I would hope that David
:51:03. > :51:07.Cameron would vote for Obama because views are nearer his.
:51:07. > :51:17.he is left-handed. Five of the last seven US President's have been left
:51:17. > :51:20.handed. K is his red? A Mitt Romney man. Conservative. I support
:51:20. > :51:25.Conservatives in almost every country so I hope Mitt Romney wins.
:51:25. > :51:30.The even if they are gaffe-prone? The best politicians are gaffe-
:51:30. > :51:35.prone? What has Mitt Romney got so wrong? He has been very gaffe-prone.
:51:35. > :51:41.He hasn't come across as a One nation Conservative. He was very
:51:41. > :51:44.rude about London, frankly. I took that rather badly. We have a real
:51:44. > :51:50.live American. A lot of people think there's an automatic link.
:51:50. > :51:57.doesn't follow the same lines. My mother is a democrat and she was
:51:57. > :52:07.horrified that I was voting Tory. I had to explain the difference to
:52:07. > :52:09.
:52:09. > :52:14.Watched the next debate because it will be interesting. It is not just
:52:14. > :52:19.going to be the two leaders, it will be the two candidates being
:52:19. > :52:23.questioned by a group of voters who have been specially selected by the
:52:23. > :52:33.Gallup Organisation because they are undecided. Who speaks well on
:52:33. > :52:37.
:52:37. > :52:42.Would you like to vote in the American election? That is not
:52:42. > :52:48.diplomatic! Are you worried you might create a diplomatic incident?
:52:48. > :52:51.I'm always worried about that so I always avoid them. I think he is
:52:51. > :52:56.one of the most intelligent leaders the Western world has ever had,
:52:56. > :53:01.Obama. I would like him to be more decisive and cut the deficit faster.
:53:01. > :53:05.Those are words I could use about David Cameron as well.
:53:05. > :53:11.confident are you that will be the result? I think it is too close to
:53:11. > :53:15.call, it will go down to the final debate. We will see which direction
:53:15. > :53:22.America takes. Whoever wins, they have to get to grips with America's
:53:22. > :53:26.budget deficit. It threatens our economy as well as theirs. For ages
:53:26. > :53:32.Obama was ahead and then Ron knee snap up from behind. Look at the
:53:32. > :53:34.final result. Obama has won at the Tory party conference.
:53:34. > :53:41.Congratulations on your re-election, Mr President.
:53:41. > :53:44.If only it was that simple! The MEP Daniel Hannan - a big
:53:44. > :53:54.Romney supporter - is in Brussels, and Kwasi Kwarteng, who has mixed
:53:54. > :53:58.feelings about the two candidates. More Conservatives at your
:53:58. > :54:03.conference saying they would vote for Mr Obama than Mr Romney. What
:54:03. > :54:08.do you make of that? Four years ago I would have been one of them. What
:54:08. > :54:13.has changed since then is the size of the US deficit, which is now not
:54:13. > :54:18.just a domestic problem for them, but it is becoming a global problem.
:54:18. > :54:23.I wish I had a vocabulary to convey what 16 trillion dollars of debt
:54:23. > :54:27.means. There are not the words in the English language to do credit
:54:27. > :54:32.to a numbers at astronomical. don't your fellow Tories recognise
:54:32. > :54:37.that? The reason is we tend to see him doing what he is good at. He is
:54:37. > :54:41.a very good speech maker, he does the ceremonial side of the
:54:41. > :54:45.Presidency beautifully and simply by occupying the office he does, he
:54:45. > :54:49.reminds us that America is a country with a greatness of spirit
:54:49. > :54:54.to have moved in a single generation from the semi-
:54:54. > :54:57.formalised exclusion of black voters to the election of a mixed
:54:57. > :55:05.race President. It was on those grounds that I backed him for years
:55:05. > :55:10.ago. We don't have to live with it. Up isn't the truth of this, why we
:55:10. > :55:15.got the that result, that today's Republican Party, not just Mitt
:55:15. > :55:19.Romney, but those to the right, and today's Conservatives, probably
:55:19. > :55:22.have less in common than the Republicans and Conservatives in
:55:23. > :55:27.any time during the Second World War. I think that is true. You have
:55:27. > :55:31.to look at what has happened to the Republican Party. The Republican
:55:31. > :55:37.Party of Ronald Reagan was not as obsessed with social issues
:55:37. > :55:40.regarding abortion, religion. I've no idea what Ronald Reagan's
:55:40. > :55:45.religious beliefs were, I suspect he was a Christian. There was
:55:45. > :55:49.something he never talked about. The rise of the religious Right in
:55:49. > :55:54.America has alienated a large portion of the Republican Party
:55:54. > :55:58.from Conservatives. As Daniel said, on the fiscal side, we are in
:55:58. > :56:06.agreement with Mitt Romney and I think the debt situation... It is
:56:06. > :56:11.the social issues? We haven't got much time. If you look historically
:56:11. > :56:16.at this, if you take Mr Eisenhower and Mr Macmillan, they had a lot in
:56:16. > :56:20.common, they fought a war together. No argument about Mr Reagan and Mrs
:56:20. > :56:24.Thatcher, they were ideological soulmate. Even John Major and
:56:24. > :56:29.George Bush were similar post ideological friends, they got on
:56:29. > :56:35.well, they began a war together. Mr Romney and Mr Cameron, it doesn't
:56:35. > :56:45.quite work. I hope they will not begin any wars together! Per not
:56:45. > :56:48.ruling it out. Of course. Religious issues have taken more of a centre
:56:48. > :56:51.stage, but it is worth stressing that none of these questions have
:56:51. > :56:56.anything to do with the White House. The issues of gay marriage and
:56:56. > :57:05.abortion and so on, I'm not saying they're not important, but read the
:57:05. > :57:08.constitution. Keith Daniel is technically right. In order to win
:57:08. > :57:12.the Republican nomination, it is absolutely certain that these
:57:12. > :57:16.issues are critical. They are central to how you get to the
:57:16. > :57:22.nomination. That is why this sort of language has put off a lot of
:57:22. > :57:26.people on the centre right. I'm not sure it is fair to include Mitt
:57:26. > :57:31.Romney in that. He has been desperate not to talk about his
:57:31. > :57:38.religion. We know why that is. Most Republicans desert -- regard
:57:38. > :57:42.Mormonism as a cult. I think most Americans have their humanity, the
:57:42. > :57:45.courtesy and the decency, and are taught by their constitution and a
:57:45. > :57:49.Bill of Rights, not to make an issue of people's innermost
:57:49. > :57:54.convictions. They are polite enough to understand they don't do that.
:57:54. > :58:02.Will you watch the debate tonight? I have to be up at an unfeasibly
:58:02. > :58:06.early time tomorrow. Don't go to bed! When you watch it? Who would
:58:06. > :58:11.you vote for in November? I would probably -- probably end up with
:58:11. > :58:16.Mitt Romney. You would not want to see Mr Obama have a second term?
:58:16. > :58:23.The debt, welfare, taxes issue is what the Democrats will lose on.
:58:23. > :58:29.Thank you. There's just time before we go to
:58:29. > :58:33.find out the answer to our quiz. The car previously owned by David
:58:33. > :58:40.and Samantha Cameron is being auctioned at today. What car was
:58:40. > :58:48.it? Have a guess. Is it the Mini Cooper? It is not. It is the Fiat
:58:48. > :58:50.500. Very similar, but very different. And people say he is a
:58:50. > :58:53.posh! That's all for today. Thanks to our
:58:53. > :58:56.guests. The One O'Clock News is starting over on BBC One now. I'm