11/10/2012 Daily Politics


11/10/2012

Andrew Neil and Jo Coburn with the latest political news live from Westminster including an interview with new housing minister Mark Prisk.


Similar Content

Browse content similar to 11/10/2012. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Afternoon, folks. Welcome to the Daily Politics. The government

:00:38.:00:41.

spends �280 million helping first time buyers on to the housing

:00:41.:00:46.

ladder. But will this really help us out of the housing crisis?

:00:46.:00:49.

Credit rating agencies downgrade spanish bonds to one notch above

:00:49.:00:54.

junk status. But what do the financial markets know? We'll be

:00:54.:01:03.

speaking to polemicist Max Keiser. But say direct result of a bank's

:01:03.:01:08.

confiscating millions from the economy using illegal practices and

:01:08.:01:13.

larceny. Could David Cameron and Alex

:01:13.:01:18.

Salmond open the door to allow 16 and 17-year-old to vote? They will

:01:18.:01:23.

be allowed to in the referendum of Scotland. We are going to debate it.

:01:23.:01:26.

And how would Conservatives here vote in the US presidential

:01:26.:01:33.

election? Not necessarily for the candidate of the right, apparently.

:01:33.:01:36.

All that coming up in the next hour of top-notch public service

:01:36.:01:39.

broadcasting. And with us for the duration editor of City AM Allister

:01:39.:01:43.

Heath. Welcome to the show. Let's start with the fall out from the

:01:43.:01:46.

collapse of the proposed merger between the aerospace and defence

:01:46.:01:48.

equipment manufacturer BAe Systems, the group once know as British

:01:48.:01:52.

Aerospace, and the giant european aerospace manufacturer EADS. The

:01:52.:01:54.

deal would have created a European defence titan with combined sales

:01:54.:02:01.

of �60 billion and a serious rival to American companies like Boeing.

:02:01.:02:04.

But it floundered on the insistence of the French and German

:02:04.:02:08.

governments that they hold on to a sizeable shareholding. BAe employs

:02:08.:02:12.

over 50,000 workers in the UK. Many in this jet-building factory near

:02:12.:02:19.

Preston. The local MP Mark Hendrick joins us now. Were you disappointed

:02:19.:02:24.

it did not go ahead? Very disappointed. Quite exasperated,

:02:24.:02:28.

actually, because potentially it would have created a huge company

:02:28.:02:32.

to compete with the American giants, which is what is needed for the

:02:32.:02:36.

future. The jobs here are fairly safe for the short to medium term

:02:36.:02:39.

but, in the longer term, there needs to be some European

:02:39.:02:43.

consolidation in order to take on the Americans, otherwise Europe

:02:43.:02:48.

will fall behind. Wasn't there a huge risk if it had gone ahead, and

:02:48.:02:51.

clearly many people thought there were flaws in the deal being done,

:02:51.:02:55.

you would have lost their jobs in your constituency anyway, because

:02:55.:02:59.

they could have gone to France and Germany? That's true, because the

:02:59.:03:02.

French and German governments needed to reduce their shareholders

:03:02.:03:08.

down to 90% and then there could have been some balance on the

:03:08.:03:10.

governance of the new company, but what would have happened if the

:03:10.:03:15.

deal had gone ahead in the form presented, the German and French

:03:15.:03:17.

governments would have had the better deal, and decisions would

:03:17.:03:21.

have been made on a political basis rather than on commercial logic.

:03:21.:03:26.

That may have meant jobs in Lancashire are going to Germany.

:03:26.:03:30.

people in your constituency could be puzzled as you're puzzled the

:03:30.:03:36.

merger did not go ahead? It makes commercial logic. In the longer

:03:36.:03:40.

term, what we want to see are the French and German governments

:03:41.:03:45.

reducing their stake and decisions are made on commercial logic and

:03:45.:03:50.

jobs and investment stay in the UK, and not on the basis of expedience

:03:50.:03:53.

for the German and French governments. What will happen now

:03:53.:03:57.

as far as BAe is concerned? Will it survive or will it be vulnerable to

:03:58.:04:03.

a takeover from elsewhere? BAe has exposed itself. The deal has not

:04:03.:04:06.

gone ahead and the fact they did not ask for an extension to

:04:06.:04:10.

continue negotiations mean the likelihood in the short term of a

:04:10.:04:14.

deal with the Europeans is now off the table. The big American

:04:14.:04:18.

companies like Boeing will look at BAe and decide whether they wish to

:04:18.:04:25.

move in because, clearly, BAe, while it has orders, really needs

:04:25.:04:29.

civil work because it's on the increase and military work, due to

:04:29.:04:33.

the huge defence cuts in America and here, is on the down slope. In

:04:33.:04:38.

order to secured its future, BAe needs to diversify and, ideally, we

:04:38.:04:43.

could do that with the Europeans, but if not, obviously there are big

:04:43.:04:46.

American companies which might fancy taking over. OK, thank you

:04:47.:04:52.

very much. The British Government was never quite explicit about how

:04:52.:04:56.

much it wanted his deal to take place. We now know from Jeremy

:04:56.:05:00.

Heywood, the Cabinet Secretary in 10 Downing Street, through a whole

:05:00.:05:04.

host of senior establishment figures, they wanted this to happen,

:05:05.:05:09.

but it could have been a political crisis for a government? Yes, I'm

:05:09.:05:11.

astonished how the Government backed this tour without thinking

:05:11.:05:15.

about it and looking at the detail. It was apparent to me one it was

:05:15.:05:19.

announced it would not work. It's a political deal. The Germans, French

:05:19.:05:27.

and the Americans, because BAe has a preferred status depending on

:05:27.:05:32.

assets to the market. It didn't seem to make sense. Commercially,

:05:32.:05:36.

the deal failed completely. It's quite astonishing to see the

:05:36.:05:40.

biggest shareholder in one of the UK's biggest companies falling out

:05:40.:05:44.

completely with the board of the company, so this was a really

:05:44.:05:48.

disastrous deal, badly managed, and everybody involved has failed.

:05:48.:05:54.

Someone at the top of BAe needs to step down, I think. Yes, your paper

:05:54.:05:57.

said youth or the chairman at the very least, the chief executive,

:05:57.:06:02.

should stay, but the chairman should step down. Yes, some money

:06:02.:06:06.

to pay the price for this disastrous deal. It collapsed so

:06:06.:06:09.

quickly and it was not thought through properly. There was no way

:06:09.:06:13.

the French and Germans were going to give up control over their own

:06:13.:06:17.

domestic defence industries. This is a corporate system where

:06:17.:06:20.

governments call the shot. You can't run them on a commercial

:06:20.:06:23.

basis. The when I interviewed Philip Hammond about this, on

:06:23.:06:30.

Monday, from up in Birmingham, the Defence Secretary, he had to have

:06:30.:06:34.

been a crucial part of this. You think you would have been. He

:06:34.:06:38.

seemed to be prepared to allow a deal to go ahead in which the

:06:38.:06:43.

French and Germans would still have a 9% each and the British

:06:43.:06:48.

Government would have 0%. Don't you think that would have caused the

:06:48.:06:52.

Tories a lot of problems on their own back benches? Yes, there would

:06:52.:06:56.

be a lot of upset about it. Ultimately, I just didn't

:06:56.:07:00.

understand why they backed this deal. It's a very important

:07:00.:07:05.

decision to make. Do we want to have a European defence industry,

:07:05.:07:08.

an integrated European defence force one day? There is a political

:07:08.:07:12.

message underlying this, which has to be decided in the next few years

:07:12.:07:16.

when it comes to our relationship with the EU, and allowing the whole

:07:16.:07:20.

thing to be decided in the way it could have been decided, had the

:07:20.:07:24.

merger, had, strikes me as something very strange and not

:07:24.:07:33.

thought out. It would have been the biggest merger in history.

:07:33.:07:38.

would have been taken over by EADS. I agree. It involves the biggest

:07:38.:07:41.

manufacturing company in Britain and yet, I don't think we've heard

:07:41.:07:44.

a word from the Prime Minister. There was not enough discussion and

:07:44.:07:49.

debate about this. I'm more in favour of free markets than anybody

:07:49.:07:53.

else but this was not that kind of deal. This was a bad governance,

:07:53.:07:57.

governments, politics, the long- term relationship between the UK

:07:57.:08:00.

defence establishment and the European and American defence

:08:00.:08:05.

establishment. There needed to be a proper discussion. On a purely City

:08:05.:08:09.

terms, the deal was a failure. A revolt of shareholders. I don't

:08:09.:08:15.

understand what they were playing at. It's not going ahead. No, I

:08:15.:08:19.

wouldn't be surprised if it came back on the agenda some time. It

:08:19.:08:23.

would be European companies. wouldn't be surprised if somebody

:08:23.:08:29.

tries to bring life to this. Remember where you heard this first.

:08:29.:08:35.

Now time for our daily quiz. A car previously owned by David and

:08:35.:08:38.

Samantha Cameron is being auctioned today. The car was bought by the

:08:38.:08:41.

Prime Minister as a surprise present for is wife way back in

:08:41.:08:44.

1998. And it's expected to fetch up to �12,000 at the auction today.

:08:44.:08:52.

But what kind of car is it? Is it: At the end of the show we'll see if

:08:52.:09:00.

Allister knows the answer. I don't think he does. No, but he has got

:09:00.:09:04.

time to find out. Now, as we read the runes of the conference season,

:09:04.:09:07.

one of the policy problems that all three parties said they knew how to

:09:07.:09:10.

solve was housing. And, as if by magic, today the government is

:09:10.:09:13.

announcing the latest allocations of funds from their First Buy

:09:13.:09:16.

scheme which aims to reduce the amount of deposit first time buyers

:09:16.:09:23.

have to have to save. In a moment I'll be speaking to the Housing

:09:23.:09:27.

Minister Mark Prisk. But first, Jo has put on her hard hat and taken a

:09:27.:09:30.

look at Britain's housing crisis. That's right, Andrew. The Prime

:09:30.:09:32.

Minister said yesterday the Conservatives are the party of home

:09:32.:09:36.

ownership. But are enough new homes being built? There are three

:09:36.:09:40.

million 20 to 34-year-olds still living with their parents. And,

:09:40.:09:42.

according to government figures, the total number of households in

:09:42.:09:48.

the UK is expected to hit 27.5 million by 2033. Up by 5.3 million

:09:48.:09:55.

since 2008. That's an extra 232,000 households every year. So are

:09:55.:10:00.

enough new homes being built to meet this increased need? Well,

:10:00.:10:03.

government figures show only 21,540 were started in the three months

:10:03.:10:09.

from April to June of this year. A drop of 10% on the first three

:10:09.:10:19.
:10:19.:10:19.

months. That's 54% below the pre- year, only 98,670 homes were

:10:19.:10:27.

started. Also down 10% on the previous year. And way below the

:10:27.:10:37.
:10:37.:10:38.

232,000 needed to meet the The problem is that there's not

:10:38.:10:43.

enough homes. What is needed? What is the priority, as far as you're

:10:43.:10:48.

concerned? It's great to see housing got a strong profile in the

:10:48.:10:50.

conference programmes across the political parties. It's very clear

:10:50.:10:54.

now that this is going to be significant coming up to the

:10:54.:10:57.

election. There's a number of younger families worried about

:10:57.:11:03.

getting on the ladder, worried that their bank of mum and dad may not

:11:03.:11:08.

help out with a deposit, so the profile is welcome. We now need

:11:08.:11:12.

policy to link up with that rhetoric and at the moment, we're

:11:12.:11:15.

getting from successive governments, a number of small schemes which

:11:15.:11:19.

nibble around the edges but not been changing policies which will

:11:19.:11:24.

deliver 232,000. What is the policy needed? The Government needs to

:11:24.:11:29.

look far more seriously at how we reduce the price of land to make it

:11:29.:11:32.

more affordable. Look at the structure of the development market.

:11:32.:11:37.

A small number of large developers who have never deliver the kinds of

:11:37.:11:41.

numbers of homes we now need. They need to bring in more competition

:11:41.:11:48.

into that sector. They need to bring in bigger, simplified schemes

:11:48.:11:52.

along the lines of First Buy. To help those on the middle and lower

:11:52.:12:00.

incomes. But what's the point of this it does no homes out there for

:12:00.:12:05.

them to buy? The primary focus has to be on supplying. It's

:12:05.:12:08.

interesting home ownership, a staple of political rhetoric for

:12:08.:12:14.

the last 30 years, is now in decline. Since 2003. We have far

:12:14.:12:22.

too many mortgages and home ownership so it clearly not a

:12:22.:12:27.

mortgage problem but a supply problem. Should we encourage people

:12:27.:12:32.

to get onto the housing ladder when it is so expensive? That is

:12:32.:12:36.

arguably what caused the crash in the first place. Certainly we need

:12:36.:12:39.

to make sure mortgage regulation and lending is done very sensibly.

:12:39.:12:42.

We need to look at the private rented sector where people can't

:12:43.:12:48.

get in the social housing, can't to become homeowners, and many more

:12:48.:12:54.

families end up in that sector, over one million. This does not

:12:54.:12:58.

provide the stability the need. They signed contracts for one year

:12:58.:13:02.

but put their children to school for up to five years. The governor

:13:02.:13:09.

needs to reform that sector as well. The thank you very much. And the

:13:09.:13:13.

shiny new Housing Minister Mark Prisk is here. Is this your first

:13:13.:13:22.

appearance? Yes, it is. Less look at the context of this initiative.

:13:22.:13:31.

There were 120,000 houses built in the 2010. 98,000 last year. Down at

:13:31.:13:35.

20,000. How many will be built this year? So far we have seen

:13:35.:13:41.

completions, not starts, which is very important because they

:13:41.:13:46.

sometimes stay as foundations. I don't believe in speculate in a

:13:46.:13:49.

whopper number will be in the next six months but, so far, in the

:13:49.:13:54.

private sector, there is some real progress. Overall, how much will

:13:54.:14:02.

housing be? You build 98 last year, rounded up to 100, so you say

:14:02.:14:07.

110,000 this year? I'm not going to guess. We are in the middle of

:14:07.:14:10.

October, and is only a couple more months to go and not much happens

:14:10.:14:15.

over Christmas. You must know how many completions we will have this

:14:15.:14:18.

year? We are on target for an improvement on that and I'm making

:14:18.:14:25.

sure, not only do we do things about supplying would also demand.

:14:25.:14:30.

That is what the First Buy is about. Even with an 80% increase, you will

:14:30.:14:34.

still build fewer houses this year than were built in 2010 when you

:14:34.:14:39.

came to power, and that was only 120,004 for a pretty bad figure in

:14:39.:14:44.

its own right. There has been a long dysfunctional market, rented

:14:44.:14:48.

and ownership, but what I would say, we are looking to make sure

:14:48.:14:53.

affordable homes are expanded. Making sure private rented sector

:14:53.:14:59.

is expanded. And using things like First Buy so the first buyers can

:14:59.:15:03.

come into the market because if you help them, you unlock the housing

:15:03.:15:09.

chain. It's got to be balanced carefully here. Alastair would

:15:09.:15:12.

think we don't want to create the next boom and bust but we want to

:15:12.:15:16.

make sure we are investing. I can assure you, you are a long way over

:15:17.:15:20.

from a boom of for so I don't see how you can put life into the

:15:20.:15:23.

housing market for affordable housing when you're cutting capital

:15:23.:15:33.
:15:33.:15:40.

$:/STARTFEED.. You're cutting capital spending on housing by 60%.

:15:40.:15:45.

The public sector side. We are using the public sector money to

:15:45.:15:51.

leave a private money. This scheme, where you get a mortgage, but you

:15:51.:15:56.

get a loan as well to help you with the deposit. You only have to raise

:15:56.:16:02.

5%. How many people will this help? In its first 12 months we have seen

:16:03.:16:07.

3,000 sales and 8,000 reservations. This year we will double that. We

:16:07.:16:14.

are looking at 27,000 first-time buyers. We were told it would help

:16:14.:16:19.

16,500 first-time buyers. That is from this year onwards. Many people

:16:19.:16:22.

are on bleak affordable housing waiting list. A more than that.

:16:22.:16:29.

many? I don't know. 1.8 million on the waiting list. Would you like to

:16:29.:16:35.

give me these figures again of how much your scheme will buy?

:16:35.:16:39.

first time by ink is about helping a third -- particular group. The

:16:39.:16:43.

affordable housing programme is bigger than that, that is 170,000

:16:43.:16:50.

homes in that market. This scheme will help very few people and on

:16:50.:16:53.

the start to a state where you launched it, you needed a joint

:16:53.:16:58.

income of �60,000 to take part. Is that right? You have to make sure

:16:58.:17:06.

you have an income. Winnie goes there, where I launched it, what

:17:06.:17:11.

you see is the number of affordable homes was nil because the old

:17:11.:17:18.

planning laws prevented it. We will have 114 new homes. It only applies

:17:18.:17:23.

to first-time buyers. It only applies to new-build homes. It

:17:23.:17:27.

can't be used to get a flat somewhere in an existing building,

:17:27.:17:34.

is that right? That is correct. It is designed just for that group.

:17:34.:17:38.

The danger is if we go broader than that, we start reaching beyond its

:17:38.:17:45.

purpose. If we look at new by, that is a broader group. Qui do you

:17:45.:17:51.

think any of these schemes make a blind bit of difference? The real

:17:51.:17:54.

problem is that the price of land has been made artificially very,

:17:54.:17:59.

very expensive bike over restrictive planning rules in this

:17:59.:18:03.

country. We have a distorted construction and housing market.

:18:03.:18:08.

That has been a problem for a long time. We need a massive increase in

:18:08.:18:13.

the building of homes. They need to be the right kind of homes in the

:18:13.:18:18.

right places, not tiny flats in privileged destinations. That is

:18:19.:18:25.

where the change has to come. You need to liberate a lot of land,

:18:25.:18:30.

maybe 1% of the total UK Land Pastor suddenly become developed

:18:30.:18:35.

over the next few years. That is a very big issue that has to be

:18:35.:18:44.

tackled. I see no sign... Tell me otherwise. I see no sign of any

:18:44.:18:48.

housing boom happening in this country for the foreseeable future.

:18:48.:18:55.

We are trying to not have a boom... Even building a lot more. The extra

:18:55.:19:04.

170,000 homes is a good start. 170... 170,000 new houses. The

:19:04.:19:07.

private rented sector which Roger referred to it is an important

:19:07.:19:12.

thing which is often overlooked. It is correct to say that we need more

:19:12.:19:19.

investment and that is what we're looking for. We looked at the run

:19:19.:19:25.

rate for start-ups and so far this year, if you look at the first

:19:25.:19:30.

couple of quarters, start ups of new houses were running at an

:19:30.:19:37.

annual rate of only 80,000. That is below your completion rate. Rather

:19:37.:19:41.

than any danger of a boom, you will probably end up building fewer

:19:41.:19:46.

houses. We are trying to make sure that we don't get ourselves into

:19:46.:19:52.

the danger of creating that potential boom. You're as far from

:19:52.:19:58.

a boom as we are from the Antarctic! Wears the danger of the

:19:58.:20:02.

boom in housing? We have to make a difference. Investing in an

:20:03.:20:09.

affordable homes for makes a difference. You really think

:20:09.:20:13.

there's no cause for concern when start-ups in the first half of this

:20:13.:20:17.

year were running at an annual rate of only 80,000? There's a lot of

:20:17.:20:21.

cause for concern. This is a dysfunctional market that has been

:20:21.:20:26.

like this, whether it is owner- occupied or rented, for 15 to 20

:20:26.:20:33.

years. You are only tinkering at the edges? I don't buy that.

:20:33.:20:40.

don't? We are not tinkering. We are looking at where the problems are

:20:40.:20:45.

in supply and demand and using this scheme intelligently. The demand

:20:45.:20:50.

side stuff, I worry when you guarantee loans, first time buyers

:20:50.:20:54.

only have to put in 5%. House prices in most of the UK are

:20:54.:21:00.

falling. It is very plausible that a lot of these people will be

:21:00.:21:04.

pushed into negative equity and this will create a situation of

:21:04.:21:09.

sub-prime light where thousands are encouraged to buy... If we helped

:21:09.:21:13.

the supply and demand we can make a difference. It is a tough market

:21:13.:21:16.

and I don't want to over a promise. We can make a difference, but I'm

:21:16.:21:23.

careful about it. Thank you. Don't become a stranger. Don't go hiding

:21:23.:21:29.

when the figures get worse! Life is getting more difficult for

:21:29.:21:32.

Spain and the situation for the eurozone more perilous. Last night,

:21:32.:21:35.

the credit rating agency Standard & Poor's downgraded Spanish bonds -

:21:35.:21:40.

or government IOUs - to BBB minus, or just above junk status. This

:21:40.:21:42.

morning, the markets have reacted and it's got more expensive for

:21:42.:21:46.

Spain to borrow money. But what do these credit ratings agencies know

:21:46.:21:50.

and have we all become slaves to the financial markets? This man

:21:51.:22:00.

thinks so. Bankers? They need to be dredged out on the streets and

:22:01.:22:06.

shafted. The bloody bankers, they are responsible for the food banks,

:22:06.:22:11.

this bloody shower of a government is prostituting itself for the

:22:11.:22:19.

bloody bankers. The omniscient London taxi driver. It is absurd to

:22:19.:22:23.

think that it is a period of Banket bashing that has come to a close

:22:23.:22:28.

because we have not even begun to - the bankers. We will fight them in

:22:28.:22:34.

the trenches. We haven't even started. How dare they say it time

:22:34.:22:41.

to stop? It is absurd. Makes our programme seemed quite quiet! And

:22:41.:22:48.

the star of the Keiser Report - Max Keiser - joins us now. We take our

:22:48.:22:53.

inspiration from you. You are the template we try to follow. There

:22:53.:23:00.

goes my trance -- my chance of contract renewal! Give me a system

:23:00.:23:04.

that works without bankers. We saw some great bridge bank against

:23:04.:23:11.

Bankers in Iceland. -- push back. They got the country into deep

:23:11.:23:16.

trouble and they effectively pushed back begins the bankers. They had

:23:16.:23:20.

been economic downturn and now they are recovering. They still have

:23:20.:23:26.

banks. Sure. The problem is not banking per se, but too big to fail

:23:26.:23:31.

banks. Part of the crisis of 2008 was that the big banks got even

:23:31.:23:35.

bigger. We have fewer of these institutions. Iceland is the best

:23:35.:23:40.

we can do? It is a great example. You ask me for examples. I'm not

:23:40.:23:47.

arguing. It is a global problem. We don't have a lot of great examples.

:23:47.:23:52.

We need banks. The banking institutions are a necessary part

:23:53.:23:57.

of running society, no doubt, but when you have too big to fail banks

:23:57.:24:02.

and bankers engaging in wholesale fraud, manipulation, insider

:24:02.:24:07.

trading, this country... In London you have just come out of the libel

:24:07.:24:13.

scandal and other scandals. The City of London is the most regular

:24:13.:24:17.

to relax environment in the world. AIG come through London, Lehman

:24:17.:24:21.

Brothers come through London. All of these scandals come through

:24:21.:24:25.

London because they have very lax banking standards and that is one

:24:25.:24:29.

thing for prime minister should address. He should address this

:24:29.:24:33.

issue, to get rid of some of these guys who are making it very

:24:33.:24:38.

difficult. Whether or not we need banks, and we probably do, the

:24:38.:24:42.

record of the banks in recent years has been quite appalling. Just when

:24:42.:24:48.

you think it will get better, some other mis-selling or scandal or

:24:48.:24:53.

moving the money of the Mexican drug cartels or helping finance the

:24:53.:24:57.

Iranian government against sanctions. You couldn't make it up.

:24:57.:25:02.

It has been catastrophic. Why were these decisions made? One wire --

:25:02.:25:08.

why was there a huge bubble? A huge cluster of errors made by bankers

:25:08.:25:13.

and financial services? The first explanation is it is a spontaneous

:25:13.:25:18.

outcome when you have banks and capitalism. That is my view. The

:25:18.:25:22.

markets were horribly distorted by a very lax and ridiculous monetary

:25:23.:25:25.

policy and ridiculous guarantees from governments and intervention

:25:25.:25:30.

at this idea that big banks would be bailed out and the Federal

:25:30.:25:35.

Reserve would always step in if the financial markets went down. Those

:25:35.:25:41.

two factors were the dominant cause of the financial crisis. We have

:25:41.:25:46.

common views in terms of monetary policy. It has been a catastrophe.

:25:46.:25:51.

It is not a spontaneous eruption of fraud. There's more premeditation

:25:52.:25:55.

going on because somehow bankers continued to get enormous bonuses

:25:55.:26:02.

every year. They are not suffering. It is not a spontaneous combustion.

:26:02.:26:08.

The monetary policies are definitely... There it -- there are

:26:08.:26:13.

regulatory loopholes and they must be looked at. The Monetary Policy

:26:14.:26:18.

encourages moral hazard. The Fed and the Bank of England keep giving

:26:18.:26:24.

banks cheap money. That is a massive government failure. Q2 are

:26:24.:26:28.

agreeing! We will have to put an end to this. For when it comes to

:26:28.:26:33.

fraud, there has been a massive error in the UK. Fraud in finance

:26:33.:26:37.

or business in general wasn't prosecuted heavily enough compared

:26:37.:26:47.
:26:47.:26:47.

to the weight it was in other countries. What we saw a... When

:26:47.:26:51.

there's a bubble, nobody cares, nobody looks for the fraud in the

:26:51.:26:55.

crime, everybody's happy. When there's a recession, everybody

:26:56.:27:00.

starts looking under every stone and finds horrible things.

:27:00.:27:03.

housing market booms and everybody says look the other way because my

:27:03.:27:08.

house is going up. The housing market collapses and they go, wait

:27:08.:27:12.

imminent. -- wait a minute. There was a massive pharmaceutical

:27:12.:27:17.

scandal recently where one company had to pay it -- making huge fine.

:27:17.:27:22.

It didn't make the front pages. Rightly we are exposing scandals

:27:22.:27:27.

and banking. Let's focus on the new regulator, Martin Wheatley. They

:27:27.:27:32.

are bringing in a new regulatory agency. He says we will start

:27:32.:27:35.

prosecuting crimes in the future, they should start to look at the

:27:35.:27:43.

crimes that are still seething in the present. They bring in a new

:27:44.:27:48.

regulator, out with the old, in with the new, deflect attention.

:27:48.:27:52.

Martin Wheatley has an demonstrated... If he wanted to do

:27:52.:28:02.
:28:02.:28:14.

A way key Iceland is the way ahead? The way ahead is to treat banks

:28:14.:28:17.

much more like other kinds of businesses and make sure that

:28:17.:28:20.

failure in banking is published in the same way it is punished in

:28:20.:28:24.

other industries, with bankruptcy and loss. You can't nationalise

:28:24.:28:28.

losses. You need to find new ways of allowing the biggest banks to go

:28:28.:28:33.

bankrupt. Her what would be the effect on the population at large?

:28:33.:28:38.

Exactly. You have to protect that, but you have to make sure the

:28:38.:28:42.

bondholders that were bailed out pay the price. There's ways of

:28:43.:28:48.

doing this. That is the most important point. You need to have

:28:48.:28:53.

real capitalism in banking, not the rigged markets we've seen. Haven't

:28:53.:28:57.

we become too dependent on the financial markets? We borrow so

:28:57.:29:02.

much as individuals and as governments. We wouldn't have to be

:29:02.:29:08.

in hock to these guys if we lived within our means. That is true.

:29:08.:29:13.

Banks make money by putting money - - people in hock. You see this on

:29:13.:29:17.

an individual level with the pushing of credit cards, but also

:29:17.:29:22.

on a regional level and sovereign level. The problem in the eurozone

:29:22.:29:25.

was these countries were forced into these huge debt positions,

:29:25.:29:29.

particularly Greece, they were encouraged into enormous debt

:29:29.:29:33.

before a jury -- joining the euro by bankers on Wall Street.

:29:33.:29:40.

banks made them do it. You can fudge the rules by not complying to

:29:40.:29:44.

the Maastricht treaty, according to Goldman Sachs. The politicians went

:29:44.:29:48.

along with that. I don't buy this idea that borrowers are powerless

:29:48.:29:56.

people who have to borrow. Tainted meat! They need consumer

:29:56.:30:00.

protections. People are selling bad debts. Politicians borrowed too

:30:00.:30:07.

much because they were stupid. They joined the euro. I knew I could get

:30:07.:30:14.

the two of you to disagree. Who is the biggest contributor to the re-

:30:14.:30:20.

election campaigns in the US? Wall Street. David Cameron is very, very

:30:20.:30:30.
:30:30.:30:32.

city with the City of London. And, Max, you're staying with us

:30:32.:30:36.

because, did you understand any of what we heard there? Do you know

:30:36.:30:39.

your debt from your deficit? Your RPI from your CPI? Your QE from

:30:39.:30:41.

your government bonds? They're terms we hear on programmes like

:30:41.:30:45.

this one all of the time. But we at the Daily Politics believe that our

:30:45.:30:48.

audience should be well informed. So Susana Mendonca has put together

:30:48.:30:58.
:30:58.:31:03.

her very own shopping list of terms Goods and services, we all buy them

:31:03.:31:07.

and the price we pay for them changes over time. The inflation is

:31:07.:31:12.

the rate at which that change happens. Say this basket of

:31:12.:31:17.

groceries cost me �10 today. An extra 25p for the same items in one

:31:17.:31:23.

year. That would mean inflation had gone up by 2.5%. But there are

:31:23.:31:28.

different ways to construct a representative basket. There is the

:31:28.:31:37.

RPI, and CPI, I think I might need a copy of this now. The main

:31:37.:31:44.

difference between them is that the RPI includes mortgage interest

:31:44.:31:50.

payments and the CPI does not. Meaning the RPI tends to lead to

:31:50.:31:55.

the entire outcomes for inflation. Debt and deficit. Don't confuse

:31:55.:32:00.

them. Debt is the total amount of UK government owing, whilst the

:32:00.:32:08.

deficit is added to that debt each year. That's what I was looking for,

:32:08.:32:12.

a bit of feta cheese, which brings me to another financial phrase we

:32:12.:32:17.

hear a lot about. The eurozone debt crisis. The eurozone debt crisis is

:32:17.:32:21.

the result of market's thinking that the peripheral countries of

:32:21.:32:27.

Europe, Portugal, Ireland, Italy, Spain and Greece have bad debts,

:32:27.:32:30.

and can only be lent to at very high interest rates. The Bank of

:32:31.:32:34.

England has rolled out a couple of rounds of quantitative easing,

:32:34.:32:41.

printing money to you and die. print anatomically and use it to

:32:41.:32:45.

buy a specific types of assets, long-term debt, held by financial

:32:45.:32:49.

institutions and companies. This makes debt cheaper for those

:32:49.:32:53.

companies and allows them to keep operations ticking over. The

:32:53.:32:58.

problem is, it is very hard to determine what effect it's actually

:32:58.:33:02.

had and if it has had positive effect, it could make the rich

:33:02.:33:08.

richer. Why not throw in a few Bonts? Imagine I want to borrow

:33:08.:33:13.

money from you, I would say, lend me 10 quid until next week. If I am

:33:13.:33:18.

a government, I want to borrow billions of pounds, obviously this

:33:18.:33:24.

not one person to give me a cheque for that much, so I split it into

:33:24.:33:28.

little Bonts and sell them so people can buy the bike to get

:33:28.:33:36.

interest on the debt from me. -- born tos. That's the shopping done.

:33:36.:33:39.

I'm off to find out what the word broke means.

:33:39.:33:43.

I think I can help you with that one, Susanna.

:33:43.:33:47.

Max and Allister are still here. Andrew Hawkins from ComRes joins us.

:33:47.:33:51.

The economy has been the main issue for the last five years. Has

:33:51.:33:56.

economic literacy improved? I don't if it improved in the last five

:33:56.:34:00.

years, but in that context of the present crisis, nine out of 10 of

:34:00.:34:06.

the public, in some recent polling, actually thought at the end of this

:34:06.:34:12.

Parliament, the Government will have paid back �600 billion in debt,

:34:12.:34:17.

rather than increased it, and the political row of the occasions of

:34:17.:34:21.

but obviously are huge. The Government's message on the deficit

:34:21.:34:27.

has been very strong. When you look at who wrongly believes the debt is

:34:27.:34:31.

being repaid, the Government could be in real difficulty because most

:34:31.:34:35.

of those are Conservative voters. So when it comes to saying of the

:34:36.:34:39.

economy is stupid, how are politicians supposed to direct

:34:39.:34:46.

their campaigns if the understanding is pretty mediocre?

:34:46.:34:51.

It can be done. The single message in the last election was a brace

:34:51.:34:55.

yourself, it's going to be bad. The trouble is, the timing of the cuts

:34:55.:35:02.

and the nature of them haven't really affected people. Obviously,

:35:02.:35:06.

you go for the easiest things to cut first and then get into the

:35:06.:35:10.

nitty-gritty. The fact that the economy has not turned around, the

:35:10.:35:14.

time has been delayed when the nasty cuts are going to hit at the

:35:14.:35:20.

next election. If one doesn't really understand enough about

:35:20.:35:24.

fiscal and monetary policy, austerity verses fiscal stimulus,

:35:24.:35:30.

how can you decide who to vote for? The it's a terrible problem. These

:35:30.:35:33.

findings are interesting and show it's a major issue at the heart of

:35:33.:35:36.

British culture and anybody is to blame for this. The education

:35:36.:35:42.

system, media and politicians. Nick Clegg not long ago was confusing

:35:42.:35:46.

deficit and debt for the George Osborne has also confused them

:35:46.:35:51.

saying that we are paying down the debt. Is that accidental? The

:35:51.:35:54.

probably accidental, but it shows is a major problem if the

:35:55.:36:00.

politicians are confused. I think it makes matters worse. It's a

:36:00.:36:05.

really big problem. His economic literacy worse in this country than

:36:05.:36:10.

it was 30 years ago? I don't know if it has become worse but what I

:36:10.:36:14.

do know, it is really, really bad, and the basic concepts need to be

:36:14.:36:18.

taught in schools from a younger age. There needs to be public

:36:18.:36:22.

conversation about this and it's about numbers and innumeracy and

:36:22.:36:26.

percentages, the difference between millions and billions. But people

:36:26.:36:32.

will understand the way you have been bashing the bankers. It's a

:36:32.:36:37.

simple concept but, beyond that, perhaps they don't really know what

:36:37.:36:41.

you're talking about in terms of regulation. Is there any point

:36:41.:36:46.

going on about it? Financial literacy is a problem and clearly,

:36:46.:36:52.

it is, you have to ask yourself whether George Osborne puts forward

:36:52.:36:55.

a scheme to exchange rights for shares to a population and knows

:36:55.:37:01.

nothing about shares. You have to ask yourself, is George Osborne

:37:01.:37:05.

exploiting that knowledge gap? Exploiting the a literacy to get

:37:05.:37:09.

bigger to sign up for something not in their best interests? That is

:37:09.:37:14.

shameless. I was shocked he made that offered to the public. The I

:37:14.:37:18.

also shocked by Ed Miliband and others saying millionaires are

:37:18.:37:25.

going to get a cheque for �40,000. Because of cutting the income tax

:37:25.:37:31.

to a 45p. He said the redistribution, which attacks the

:37:31.:37:36.

problems in the system, before they develop and get out of hands,

:37:36.:37:41.

that's interesting concept, adopted by Margaret Thatcher. It was a

:37:41.:37:46.

justification for selling off the council estates. There were some

:37:46.:37:51.

interesting policies which I think are more market sensitive. This

:37:51.:37:58.

prime minister, this chancellor, shows remarkable market illiteracy.

:37:58.:38:02.

I agree. The Ed Miliband argument about millionaires, every single

:38:02.:38:07.

millionaire in the country being given a cheque was clearly wrong

:38:07.:38:08.

and something Republic could have understood immediately had there

:38:08.:38:13.

been more financial literacy. It's a damn a complicated debate about

:38:13.:38:17.

the cause of the crisis if there's not more financial literacy. I

:38:17.:38:25.

would argue that that is why your ideas are not so successful. Your

:38:25.:38:33.

ottomans are more complicated? easier than saying there's a whole

:38:33.:38:40.

set of issues, cheaper money, imbalances, all that sort of stuff.

:38:40.:38:44.

There is an issue of right and wrong. Listening to the Prime

:38:44.:38:48.

Minister in his speech, he talks about ambition for the country to

:38:48.:38:53.

knuckle down a. That would encourage fair play. When you have

:38:53.:39:00.

a looting at the banks, rigging scandals, laundering drug money,

:39:00.:39:05.

it's tough to put the opposition out there. Aren't all politicians

:39:05.:39:10.

guilty of putting a political gloss on a more complicated economic

:39:10.:39:16.

message? He yes, and people who support different parties will see

:39:16.:39:19.

a political message in what they want to see, but we shouldn't

:39:19.:39:24.

forget an awful lot of people are in business, run businesses, and I

:39:24.:39:33.

seem to recall in the days before I had lots of grey hair, Margaret

:39:33.:39:36.

Thatcher countered this in grocer's shop finances and I think people

:39:36.:39:42.

understood that. The chattering classes may deter for doing that.

:39:42.:39:48.

But today, for example, I wouldn't want to be having debt higher than

:39:48.:39:54.

5% of my turnover. The Government seems to think it's OK to have a

:39:54.:40:00.

debt 15 times the size of that 5%. Yes, people also understand, of

:40:00.:40:06.

course, the analogy of you have your credit-card, and you spend it

:40:06.:40:11.

all, then you have a problem. The Government do not have a credit

:40:11.:40:14.

card but run debt for the it's different when you talk about

:40:14.:40:19.

governments, because they can print money and do all sorts of things.

:40:19.:40:24.

Consumers are not empowered to make the right choices when it comes to

:40:24.:40:28.

financial services. You have had endless scandals. Miss selling and

:40:28.:40:35.

so on. It never ends and the never solve these problems and people are

:40:35.:40:40.

not saving enough and have enough pensions. It's a major problem.

:40:40.:40:44.

going to up to stop you there for that we will have to get you one

:40:44.:40:48.

for an economics lesson in future. Thank you very much. Come back and

:40:48.:40:54.

see us. Now, on Monday, the Prime Minister and First Minister of

:40:54.:40:57.

Scotland will meet to seal the deal on a referendum on independence.

:40:57.:41:01.

Part of that deal is said to be a concession which will allow 16 and

:41:01.:41:04.

17-year-olds to vote in the poll expected to be held in two year's

:41:04.:41:11.

time. It looks like the nationalists will agree there is

:41:11.:41:14.

only one question, are you for against it? Concern about the

:41:14.:41:22.

proposal was raised in the House of I beg leave to ask a question about

:41:22.:41:27.

which I have given private notice. The question is as follows. To ask

:41:28.:41:31.

her Majesty's Government, whether, before the Prime Minister meets the

:41:31.:41:36.

First Minister of Scotland on Monday 15th October, they will

:41:36.:41:40.

clarify whether it is proposed to extend the franchise in any

:41:40.:41:46.

referendum on Scottish independence to 16 and 17-year-old and, if so,

:41:47.:41:51.

by what legislative means? And what of the implications for electoral

:41:51.:41:59.

law in the UK? My Lords, people in Scotland deserve a referendum of

:41:59.:42:02.

the Scottish independence which is legal, and decisive. There has been

:42:03.:42:06.

progress made towards an agreement but details are still under

:42:06.:42:09.

negotiation between the two governments. The Government which

:42:09.:42:13.

will both houses of parliament are fully informed and are required to

:42:13.:42:18.

provide components to the Scottish parliament will require the

:42:18.:42:23.

approval of both Houses and Her Majesty's Council. Could I suggest

:42:23.:42:30.

he's not answered my question? Matters of electoral importance and

:42:30.:42:36.

the extension of the franchise are not matters to be carried out in a

:42:36.:42:41.

corner negotiations, however senior the party. If the franchise is to

:42:41.:42:44.

be extended in Scotland for referendum, is it not inevitable

:42:44.:42:48.

that we will have to extend it to 16 year-olds for all elections

:42:48.:42:52.

throughout the UK? A matter which has huge implications, not least

:42:52.:42:56.

that it will bring politics into schools? If the Government is

:42:56.:43:01.

proposing to do that, would it not be proper for them to issue a paper

:43:01.:43:05.

for consultation and to consult widely and make no commitments

:43:05.:43:10.

what's above until they have done And here to debate the pros and

:43:10.:43:13.

cons of lowering the voting age are the Conservative MP Eleanor Laing.

:43:13.:43:17.

And Rhammel Afflick from the British Youth Council. Welcome to

:43:17.:43:23.

both of you. Do Conservatives oppose votes for 16 and 17 year-

:43:23.:43:28.

olds? No, in principle, not because they will vote one way or another

:43:28.:43:31.

but because I think you have to draw the line somewhere. The

:43:31.:43:38.

obvious place to do it is adulthood, 18. Why is that question you can

:43:38.:43:45.

have a job, pay tax, get married at 16? Isn't that the age? You can

:43:45.:43:52.

legally get matter at 16 but I wouldn't recommend it. Why can't

:43:52.:43:56.

you vote them to? It's not a sudden point when somebody becomes an

:43:56.:44:03.

adult, but a process. For some of us, it's still going on! Do I

:44:03.:44:07.

couldn't agree more. I know lots of 16 year-olds who are far, far

:44:07.:44:12.

better informed about politics than many 60 roles. Of course, they are

:44:12.:44:15.

intellectually Capel, writing essays for A-level politics, for

:44:15.:44:21.

example. -- capable. There's nothing intellectually wrong with

:44:21.:44:26.

people being involved in politics. I want people involved at all ages,

:44:26.:44:31.

but you have to draw the line somewhere. It is silly to draw it

:44:31.:44:38.

at 16 for this, when the age of adulthood is 18. It's not fair to

:44:38.:44:43.

give people a responsibility too early. What do you say to that?

:44:43.:44:47.

completely disagree. It is something I have been passionate

:44:47.:44:51.

about for a long time, that people, young people, should be able to

:44:51.:44:56.

vote, simply because, actually, you're quite an independent person

:44:56.:45:03.

at 16, and they are mature enough and they are affected by the

:45:03.:45:07.

decisions the politicians make. They are not able to hold them to

:45:07.:45:10.

account properly without having a vote, so I believe strongly they

:45:11.:45:20.
:45:21.:45:23.

$:/STARTFEED. Whatever done so is there that 16-year-old would do it?

:45:23.:45:28.

It is not relevant. The reason I say that is because the issue of

:45:28.:45:33.

getting people to vote is a separate issue. If we were having a

:45:33.:45:38.

problem getting women to vote, we would not take away their vote

:45:38.:45:41.

because they are disengaged from politics so I don't believe that is

:45:41.:45:46.

an argument. If you want young people to get involved in politics,

:45:46.:45:50.

why not get in early? There are other ways in which young people

:45:50.:45:55.

get involved, there's a Youth Parliament, the British Youth

:45:55.:46:00.

Council. I hold an annual debating competition in my constituency

:46:00.:46:03.

where kids take part and they are brilliant and they put forward

:46:03.:46:06.

brilliant arguments. They are practising, developing their

:46:06.:46:12.

political ideas. You need to serve an apprenticeship. You are

:46:12.:46:16.

practising at 16 and 17 and at 18 you can vote. Why is your

:46:16.:46:20.

government allowing them to vote in the Scottish referendum? If that is

:46:20.:46:26.

the case, which it looks like it is, it is part of a deal. It is wrong?

:46:26.:46:31.

I still think it is wrong, but I would question the whole franchise

:46:31.:46:35.

of the Scottish referendum. There are more Scots living outside

:46:36.:46:40.

Scotland than there are living in Scotland. A you do think it was

:46:40.:46:45.

wrong to make that part of the deal? I would rather that hadn't

:46:45.:46:51.

happened, but if the deal is that there will be one distinct question

:46:51.:46:58.

on the ballot paper... That is the deal. I'm OK with that. He can have

:46:58.:47:04.

the vote? If that is the deal, he can have the vote. Just this once?

:47:04.:47:10.

Is that really possible? This is a stepping-stone for all elections.

:47:10.:47:16.

Put it back on the agenda. If it has and rightly so. As a 16-year-

:47:16.:47:20.

old, you can pay taxes. Why shouldn't young people be able to

:47:20.:47:24.

have a say on the taxes they are paying? At 16, you have to pay

:47:24.:47:30.

adult fares on the train. If you have an argument that you are going

:47:30.:47:34.

to use Boris Johnson, you don't like what he is dealing with

:47:34.:47:38.

transport in London, the prices are too high, how do you have a saying

:47:38.:47:44.

that? You say this is a stepping stone, this deal will be a stepping

:47:44.:47:48.

stone to other elections, how will you stop it? You won't be able to

:47:48.:47:53.

say you were doing it on just this referendum. It is not a precedent.

:47:53.:47:58.

It puts the matter on the agenda. We had a debate about four years

:47:58.:48:04.

ago on this. There were about 40 people in the chamber, nobody cared.

:48:04.:48:09.

40 is quite a lot these days! That is overcrowding. Perhaps. There

:48:09.:48:16.

weren't many people taking part. I was. It is essential that the

:48:16.:48:20.

matter should be debated in the Commons properly. If Alex Salmond

:48:20.:48:23.

has managed to get it through this time, that doesn't create a

:48:23.:48:29.

precedent. What is upsetting is that something so important,

:48:29.:48:33.

extending devote to 16 and 17 year- olds, has been part of some grubby

:48:34.:48:38.

little compromise. It is like House of Lords reform. It is the sort of

:48:38.:48:42.

thing the public looks at an things, what are the politicians playing

:48:42.:48:46.

at? How can such important questions be decided in this way?

:48:46.:48:51.

They can make it up as they go along. Can I quickly say to you, we

:48:51.:48:56.

have a short gap between her -- before Parliament returns, are you

:48:56.:49:01.

happy Andrew Mitchell will be come back? He has never called me

:49:01.:49:09.

something he shouldn't have. Give him time. Undoubtedly. He is a good

:49:09.:49:14.

chief whip. He was a whip before when it was difficult and he will

:49:14.:49:18.

get on with it now. I care more about his ability to manage

:49:18.:49:22.

business in the House of Commons. He will be able to now?

:49:22.:49:28.

Do you don't fancy him as High Commissioner in Rwanda? He was a

:49:28.:49:31.

very good International Development Secretary ft up her I'll take that

:49:31.:49:41.
:49:41.:49:42.

as a yes! Thank you. You'll all have your alarm clocks

:49:42.:49:45.

set for 2am tomorrow morning, won't you? Because that's when the debate

:49:45.:49:47.

between the two vice presidential candidates in the November's US

:49:47.:49:51.

general election. Only US citizens get to vote, of course, but we like

:49:51.:49:54.

to extend the franchise here so Adam took his moodbox out at the

:49:54.:49:56.

Tory Party Conference to find out how British Conservatives might

:49:57.:50:06.
:50:07.:50:16.

Which one of these two would people at the Tory conference like to see

:50:16.:50:20.

in the White House? Let's find out. In America, the colours are the

:50:20.:50:30.
:50:30.:50:31.

other way around. Romney is red and Obama is blue. Why Mitt Romney?

:50:31.:50:36.

think Obama is no friend of the UK. Ronnie is a nutcase. He is out of

:50:36.:50:43.

touch. Obama is the sensible candidate. We need the American

:50:43.:50:48.

economy to get moving and I think Bromby could do that. I don't think

:50:48.:50:54.

the founding fathers believed in mixing religion and politics. I

:50:54.:50:58.

think mitt Romney is overly religious. I would hope that David

:50:58.:51:03.

Cameron would vote for Obama because views are nearer his.

:51:03.:51:07.

he is left-handed. Five of the last seven US President's have been left

:51:07.:51:17.

handed. K is his red? A Mitt Romney man. Conservative. I support

:51:17.:51:20.

Conservatives in almost every country so I hope Mitt Romney wins.

:51:20.:51:25.

The even if they are gaffe-prone? The best politicians are gaffe-

:51:25.:51:30.

prone? What has Mitt Romney got so wrong? He has been very gaffe-prone.

:51:30.:51:35.

He hasn't come across as a One nation Conservative. He was very

:51:35.:51:41.

rude about London, frankly. I took that rather badly. We have a real

:51:41.:51:44.

live American. A lot of people think there's an automatic link.

:51:44.:51:50.

doesn't follow the same lines. My mother is a democrat and she was

:51:50.:51:57.

horrified that I was voting Tory. I had to explain the difference to

:51:57.:52:07.
:52:07.:52:09.

Watched the next debate because it will be interesting. It is not just

:52:09.:52:14.

going to be the two leaders, it will be the two candidates being

:52:14.:52:19.

questioned by a group of voters who have been specially selected by the

:52:19.:52:23.

Gallup Organisation because they are undecided. Who speaks well on

:52:23.:52:33.
:52:33.:52:37.

Would you like to vote in the American election? That is not

:52:37.:52:42.

diplomatic! Are you worried you might create a diplomatic incident?

:52:42.:52:48.

I'm always worried about that so I always avoid them. I think he is

:52:48.:52:51.

one of the most intelligent leaders the Western world has ever had,

:52:51.:52:56.

Obama. I would like him to be more decisive and cut the deficit faster.

:52:56.:53:01.

Those are words I could use about David Cameron as well.

:53:01.:53:05.

confident are you that will be the result? I think it is too close to

:53:05.:53:11.

call, it will go down to the final debate. We will see which direction

:53:11.:53:15.

America takes. Whoever wins, they have to get to grips with America's

:53:15.:53:22.

budget deficit. It threatens our economy as well as theirs. For ages

:53:22.:53:26.

Obama was ahead and then Ron knee snap up from behind. Look at the

:53:26.:53:32.

final result. Obama has won at the Tory party conference.

:53:32.:53:34.

Congratulations on your re-election, Mr President.

:53:34.:53:41.

If only it was that simple! The MEP Daniel Hannan - a big

:53:41.:53:44.

Romney supporter - is in Brussels, and Kwasi Kwarteng, who has mixed

:53:44.:53:54.

feelings about the two candidates. More Conservatives at your

:53:54.:53:58.

conference saying they would vote for Mr Obama than Mr Romney. What

:53:58.:54:03.

do you make of that? Four years ago I would have been one of them. What

:54:03.:54:08.

has changed since then is the size of the US deficit, which is now not

:54:08.:54:13.

just a domestic problem for them, but it is becoming a global problem.

:54:13.:54:18.

I wish I had a vocabulary to convey what 16 trillion dollars of debt

:54:18.:54:23.

means. There are not the words in the English language to do credit

:54:23.:54:27.

to a numbers at astronomical. don't your fellow Tories recognise

:54:27.:54:32.

that? The reason is we tend to see him doing what he is good at. He is

:54:32.:54:37.

a very good speech maker, he does the ceremonial side of the

:54:37.:54:41.

Presidency beautifully and simply by occupying the office he does, he

:54:41.:54:45.

reminds us that America is a country with a greatness of spirit

:54:45.:54:49.

to have moved in a single generation from the semi-

:54:49.:54:54.

formalised exclusion of black voters to the election of a mixed

:54:54.:54:57.

race President. It was on those grounds that I backed him for years

:54:57.:55:05.

ago. We don't have to live with it. Up isn't the truth of this, why we

:55:05.:55:10.

got the that result, that today's Republican Party, not just Mitt

:55:10.:55:15.

Romney, but those to the right, and today's Conservatives, probably

:55:15.:55:19.

have less in common than the Republicans and Conservatives in

:55:19.:55:22.

any time during the Second World War. I think that is true. You have

:55:23.:55:27.

to look at what has happened to the Republican Party. The Republican

:55:27.:55:31.

Party of Ronald Reagan was not as obsessed with social issues

:55:31.:55:37.

regarding abortion, religion. I've no idea what Ronald Reagan's

:55:37.:55:40.

religious beliefs were, I suspect he was a Christian. There was

:55:40.:55:45.

something he never talked about. The rise of the religious Right in

:55:45.:55:49.

America has alienated a large portion of the Republican Party

:55:49.:55:54.

from Conservatives. As Daniel said, on the fiscal side, we are in

:55:54.:55:58.

agreement with Mitt Romney and I think the debt situation... It is

:55:58.:56:06.

the social issues? We haven't got much time. If you look historically

:56:06.:56:11.

at this, if you take Mr Eisenhower and Mr Macmillan, they had a lot in

:56:11.:56:16.

common, they fought a war together. No argument about Mr Reagan and Mrs

:56:16.:56:20.

Thatcher, they were ideological soulmate. Even John Major and

:56:20.:56:24.

George Bush were similar post ideological friends, they got on

:56:24.:56:29.

well, they began a war together. Mr Romney and Mr Cameron, it doesn't

:56:29.:56:35.

quite work. I hope they will not begin any wars together! Per not

:56:35.:56:45.

ruling it out. Of course. Religious issues have taken more of a centre

:56:45.:56:48.

stage, but it is worth stressing that none of these questions have

:56:48.:56:51.

anything to do with the White House. The issues of gay marriage and

:56:51.:56:56.

abortion and so on, I'm not saying they're not important, but read the

:56:56.:57:05.

constitution. Keith Daniel is technically right. In order to win

:57:05.:57:08.

the Republican nomination, it is absolutely certain that these

:57:08.:57:12.

issues are critical. They are central to how you get to the

:57:12.:57:16.

nomination. That is why this sort of language has put off a lot of

:57:16.:57:22.

people on the centre right. I'm not sure it is fair to include Mitt

:57:22.:57:26.

Romney in that. He has been desperate not to talk about his

:57:26.:57:31.

religion. We know why that is. Most Republicans desert -- regard

:57:31.:57:38.

Mormonism as a cult. I think most Americans have their humanity, the

:57:38.:57:42.

courtesy and the decency, and are taught by their constitution and a

:57:42.:57:45.

Bill of Rights, not to make an issue of people's innermost

:57:45.:57:49.

convictions. They are polite enough to understand they don't do that.

:57:49.:57:54.

Will you watch the debate tonight? I have to be up at an unfeasibly

:57:54.:58:02.

early time tomorrow. Don't go to bed! When you watch it? Who would

:58:02.:58:06.

you vote for in November? I would probably -- probably end up with

:58:06.:58:11.

Mitt Romney. You would not want to see Mr Obama have a second term?

:58:11.:58:16.

The debt, welfare, taxes issue is what the Democrats will lose on.

:58:16.:58:23.

Thank you. There's just time before we go to

:58:23.:58:29.

find out the answer to our quiz. The car previously owned by David

:58:29.:58:33.

and Samantha Cameron is being auctioned at today. What car was

:58:33.:58:40.

it? Have a guess. Is it the Mini Cooper? It is not. It is the Fiat

:58:40.:58:48.

500. Very similar, but very different. And people say he is a

:58:48.:58:50.

posh! That's all for today. Thanks to our

:58:50.:58:53.

guests. The One O'Clock News is starting over on BBC One now. I'm

:58:53.:58:56.

Download Subtitles

SRT

ASS