08/02/2013 Daily Politics


08/02/2013

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


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Afternoon, folks, this is the Daily Politics. David Cameron has been

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eating German sweets and lots of biscuits all night to help stay

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awake during the EU budget talks. It is a diet that appears to have

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worked wonders for his negotiating skills. He and his European chums

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have been brokering a new EU budget and for the first time in the EU's

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56 year history, they may actually cut, I repeat, cut the budget. Mr

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Cameron will like that. But will the final settlement actually save

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Britain any money? Taking risks with our money. Fixing

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interest rates. Paying for failure. Still trousering a shed load of

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money. We will be asking if anything can be done to improve the

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culture of banking. Should the British National Party

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and other far-right groups in Europe get EU funding? Lots of MEPs

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don't think so, and the issue is cooking up a bit of a political

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storm. And our Adam is in a bit of a spin

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over the rotating presidency. So we sent him on a European merry-go-

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round. All that in the next hour. And with

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us for the first half, Banking Editor of the Times, Sam Coates and

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by the blogger and occasional columnist Rowena Davis, who is also

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:02:04.:02:13.

a Peckham Labour councillor. Welcome to you both. So, horse-

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trading in Brussels, and at Findus, the latest food company to have a

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long face. The food agency has been told to carry out urgent tests on

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all beef products after some Findus lasagnes were found to contain up

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to 100 per cent horsemeat. Findus withdrew the meals from sale after

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its French supplier raised concerns. The Food Standards Agency has

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called the situation appalling. Last month, frozen beef burgers

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were taken off the shelves of many supermarkets after tests revealed

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the presence of horse DNA. Well, this is what the shadow environment

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secretary Mary Creagh had to say about it all this morning.

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problem with the horsemeat scandal is the more tests that are carried

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out, the wider the scandal spreads and the more horsemeat that is

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found. My concern is that if these processed meats are present in

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schools, hospitals and prisons that these tests are not being carried

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out and they will not be carried out until March or April. That is

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not good enough. So, has the Government been too

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slow to react? I think it is hard to ask the government to test every

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little bit of food. They are meant to regulate things. They are, but

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over the last 20 years Britain has benefited from extraordinarily

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cheap food costs. What is striking is that a lot of the products taken

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off the shelves are at the economy and of the market. I think a lot of

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us have had a suspicion about what on earth is in them. When did you

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last have a Findus lasagne? More recently than I would like to admit.

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You just know that there is a lot of dodgy practice going on in the

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food industry. You see with bacon and other products, the bulking it

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up with sugar and water. If they are doing that at a higher end of

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the market, what on earth they doing at the low end? It is not

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surprising. This is not really on a par with the BSE scare and things

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like that, is it? No, but I think it is one of the risks of having a

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globalised food industry. As you were saying, we have become

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completely divorced from the production of our food that we eat

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in this country. It goes through many different continents, it goes

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through different stages and has different products added to it. The

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ownership is left -- less. This has involved the Irish and the French.

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What is interesting is the lower income groups are generally buying

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products which are the processed meat products. Those food products

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which had the least stages in the chain are often the organic produce

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and local produce and their assets which are more expensive, not less.

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Have you got a decent butchers in Peckham? There is one that has

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opened. Now to the banks because if you are

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a banking editor, like Sam Coates here, it has been a busy week and

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he has probably earned his keep at the Times. It started off on Monday

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when George Osborne, the Chancellor of the Exchequer, delivered a

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speech setting out what he will do to prevent banks from using the

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money of ordinary savers to subsidise risky investment banking.

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New rules are being implemented to put up a so-called ring fence

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around high street retail banks. The Chancellor insisted the

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mistakes of the past would not be repeated.

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I can tell you that your high street bank will have different

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bosses from the Investment Bank. Your high-street bank will manage

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its own risks and not the risks of the Investment Bank. And the

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Investment Bank will not be able to use your savings to fund their

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inherently risky investigations. My message is clear, if a bank flout

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the rules, the regulator and the Treasury will have the power to

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break it up altogether. Full separation. Not just a ring fence.

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We are not going to repeat the mistakes of the past. In America

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and elsewhere, banks found ways to undermine and get around the rules.

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Greed overcame good governance. We could see that again so we are

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going to arm ourselves in advance. In the jargon, we will electrify a

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ring fence. So, don't touch it.

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The Chancellor's speech was on Monday, but on Wednesday we had a

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reminder of another banking scandal when the state-owned RBS, the Royal

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Bank of Scotland, was fined �390 million by regulators in Britain

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and the United States over the fixing of what is known as the

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LIBOR rate. Traders at the bank had deliberately manipulated the

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interest rate, which is used to set the cost of mortgages and loans, in

:07:18.:07:28.
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order to make a profit. Or to avoid losses. RBS said it had uncovered

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wrongdoing by 21 employees, and its chief executive, Stephen Hester,

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admitted their greed was part of a wider problem.

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What these 21 people did is wrong. There can be no place in RBS or in

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the banking industry for wrongdoing of this nature. I think in some

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ways worse than that wrongdoing is the fact that it is an extreme

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example of a selfish and self- serving culture, of which there are

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too many other milder examples across the banking industry for the

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Prix financial crisis period. another banking apology there from

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a banker in sackcloth and ashes. Yesterday, it was the turn of Mark

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Carney to have his say. He is the Canadian who is going to take over

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as the Governor of the Bank of England in July. He was in front of

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the Treasury Select Committee where he was setting out how he would

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handle the job. He suggested allowing a degree of flexibility in

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the bank's inflation target, but he also expressed sympathy with the

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view that bankers had not suffered enough for their role in the 2008

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financial crisis. It was not just that the financial

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crisis triggered a very sharp recession, here and in the United

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States, but that the senior most officials in those financial

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institutions appeared to escape unscathed, not pay the price, in

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fact in many of the institutions that failed, some of the C E Os

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received large payout prior to their demise.

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You will be hearing a lot more from him in the months to come.

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With us now is the Conservative MP for the cities of London and

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Westminster. So he knows a thing or two about the banking industry.

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Welcome, Mark Field. Will the Chancellor's electric fence work?

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Time will tell. I am sceptical about ring-fencing, electric or

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otherwise. We are looking ahead to what the next crisis may be. The

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vicar's Commission and the whole idea of ring-fencing is very much

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George Osborne's baby. I think he has been quite pragmatic in what he

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has done this week. If it was such a marvellous idea, why has no other

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organisation or big jurisdiction following this route? There are

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variations on ring-fencing. The big worry is we get another layer of

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uncertainty that surrounds this financial services business which

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is so crucial to the economy. think it is interesting that a

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Member of Parliament is not convinced these proposals will work.

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These firewalls may turn out to be China waltz when you think the

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shareholders of the Bank will remain the same, when you think the

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banks will not be broken up, it is just a threat. And when they have

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been no criminal prosecutions at all despite the revelations we have

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heard. Will the banks take seriously the threat that they

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could be broken up or will they think that his political spin, you

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will never dare? Talking to them this week, they did not think

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George Osborne's speech amounted to that much. What has happened as the

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government decided not to break apart the whisky arm from the High

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Street counterparts -- of the whisky on, the investment bank from

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its how it -- high street counterparts. Can these investment

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arms use our money? Can they access our savings and current accounts

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for their risky ventures or not? Under the ring-fence plan, no. You

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cannot use retail money to fund activities in the Investment Bank.

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But I think what we are missing here is the bigger problem with the

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UK banking sector which nobody is tackling, which is broadly that we

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have two -- four big banks and that is it. There a couple nibbling

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around the edges. If they topple over they could bring down the

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financial system. That is the boldness that a lot of people on

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the political side are now asking. It is also so difficult to move

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your banking camp. My bank is the Royal Bank of Scotland. I have been

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with it since 1973. In the past couple of weeks, dealing with it is

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a nightmare. Getting a simple money transfers done takes that 20 emails

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and three phone calls and they are never there when you call them.

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When you think I will just move it and then you look at all the direct

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debits and a new cheque book, can something be done to make it

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easier? In fairness, George Osborne has got this in mind, the need for

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more competitive banking sector. The difficulty is, the more you are

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regulated, the more you put more ring-fencing in place. That is a

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direct threat to new competitors. The barriers for entry become

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higher. I am simply saying that somebody wants to move their bank

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account, it should be incumbent on the bank you are leaving it to hand

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over all the direct debits and other details to the bank you have

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chosen to go to. I agree. To be fair, this is very much in George

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Osborne's eye is now. With all due respect, there is another bigger

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question. There are two issues going on, the first is how the

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banks -- how you ensure that banks do not make the same risky mistakes

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as they did in 2008, the second is how banks can play a role in the

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recovery of our economy. We heard the former Chancellor of the

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Exchequer, Nigel Lawson, saying he wants to nationalised RBS and turn

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it into an investment bank. Whether we like it or not, we need the

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banks more than ever. If we are going to get an economic recovery

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and getting small businesses being lent to. The problem I have over

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LIBOR is, LIBOR was clearly wrong and there was fraud going on, but

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will almost looking with a 2020 hindsight, any novel product is

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accused of being mis-sold. If we are going to have a constant diet

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of class actions and legal actions... Here is the thing, I'm

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not convinced that many of the interest rate swaps products were

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mis-sold. There are some people... Its some people were sold things

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they did not need or want. Perhaps. The FSA found last week that 90 %

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of the swaps they look that had been mis-sold. But now we are

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looking at almost any novel financial product which will be

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susceptible. Date can con the customer. For the high street arm

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to generate large profits. To a certain extent, the banks created

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the problem. Whether or not making them shell out of pay back money

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they did is hobbling them for the future, it is a very difficult

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policy dilemma. Pa to the problem is politicians want banks to face

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:15:22.:15:32.

You want them to lend a lot more. By stocking up their balance sheets,

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they are not able to lend more. You cannot do both. There is a tension.

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Politicians are not honest about Ted. We should have that discussion

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openly. -- about it. A lot of businesses have very sound business

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plans, are ready to go, but they cannot get the lending. This relies

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on every business proposal being too risky to take a chance on. We

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know there are very good and sound business plans up and down the

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country that are not getting the money. They have a funding for

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lending scheme. Most of the money has gone into mortgages. Most of

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them say, confidence is at such a low level Cammack unique two sides

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for any transaction. -- at a low level, you need. If you are a hard-

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working person commits you get up early, go to a job that is not that

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interesting, get paid the average earnings - �26,000 or so on. These

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traders making tons of money. It is amazing how these traders can make

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that money. People are right to be furious at this sort of nonsense.

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Not one of these traders has been charged. Not red. Quite a lot has

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been fired and they Rupp ongoing disciplinary actions. -- not yet.

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:17:25.:17:28.

The LIBOR activity was not on. has been completely destroyed.

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was very bad. We need the banks more than ever to get the economy

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moving again. It just depends which bank. Now, believe it or not, it

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has only been a month and a day since David Cameron and Nick Clegg

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announced their midterm review, with both leaders saying they were

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in it for the long haul. But no sooner had they set out on the

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journey for the next two and a half years than it was first stop Europe,

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when Cameron promised an in/out EU referendum which Nick Clegg

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described as not in the national interest. Next, it was the Liberal

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Democrats turn to reach for the stop button when they voted to

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delay changes to constituency boundaries and, in the process,

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give themselves a fighting chance at the next election. Earlier this

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week former Energy Minister and Lib Dem MP Chris Huhne felt decidedly

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travel sick after admitting it was him speeding on the M11 in March

:18:12.:18:16.

2003 after all - forcing him to resign his seat and trigger a by-

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election that will pit both sides of the coalition against each other

:18:19.:18:29.
:18:29.:18:31.

for the first time. And then, on Thursday, English Baccalaureate

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Certificates failed to get into first gear after Michael Gove

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decided he actually really rather liked GCSEs - a hand-brake turn

:18:36.:18:39.

thought to be popular with Nick Clegg and his chums who were

:18:39.:18:49.
:18:49.:18:51.

worried about a two-tier system. So, all in all, it has been a pretty

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damaging month for the coalition government but, with more than two

:18:53.:18:57.

years to go, are they going to get to the finishing line or could

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there be an obstacle in the road that proves too big to overcome?

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And we are joined now by Tim Montgomerie from Conservative Home

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and from Liberal Democrat Voice, Mark Pack. How to categorise the

:19:15.:19:21.

state of the coalition? It is a business arrangement. -- how do you

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categorise? We had the two leaders in the rose garden in Downing

:19:26.:19:32.

Street and it was put across as a loving relationship. It is not that.

:19:32.:19:38.

Everyone knows that. It is still a great that it is incredibly

:19:38.:19:46.

important principle projects. -- it is still agreed. I think it will

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last. The Lib Dems have very little enthusiasm for welfare and

:19:50.:19:56.

education forms -- reforms. The deficit has stopped going down.

:19:56.:20:03.

lot of Liberal Democrats have a lot of support for the reforms.

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would you categorise the state of your coalition? It is a functioning

:20:08.:20:11.

business relationship. David Cameron and Nick Clegg add a

:20:11.:20:15.

personal level can get on with each other. They disagree but they get

:20:15.:20:20.

on with each other. They understand that a huge part of how the public

:20:20.:20:24.

use them is the state of the economy. The longer time they have,

:20:24.:20:28.

the better for both parties. That is why we will see a lot of

:20:28.:20:35.

rumbustious stuff but the Eastleigh by-election. Both parties will be

:20:35.:20:41.

in coalition until the next election. Can they knock the spots

:20:41.:20:47.

off each other and still have a pint down the road? The Liberal

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Democrats are we talking about had just under 4000 people in Eastleigh

:20:51.:20:56.

had been taken out of paying tax altogether. The Tories will take

:20:56.:21:03.

credit for that as well. Who should get the credit for it? The Liberal

:21:03.:21:09.

Democrats? Are the Tories going to win the by-election? Is Mr Cameron

:21:09.:21:16.

going to win? That is the trouble. There is only one winner. It is one

:21:16.:21:20.

of the most interesting by- elections for us political anoraks.

:21:20.:21:27.

The media and the political anoraks and the pollsters. If he wins, he

:21:27.:21:31.

will enormous to strengthen his position in the Conservative Party.

:21:31.:21:36.

The strategy is based on the fact we can win seats like Beasley. It

:21:36.:21:39.

is hard because the Liberal Democrats control all of the

:21:39.:21:47.

councils. That is not fertile territory. -- like Eastleigh.

:21:47.:21:53.

there be a local candidate? It is very likely. What does it mean for

:21:53.:21:57.

Nick Clegg? Certainly come up almost the reverse of the point

:21:57.:22:02.

about David Cameron and their conservative strategy. It is just

:22:03.:22:09.

the sort of seat the party can hold. It is easy to up the stakes in

:22:09.:22:17.

terms of a knife hold edge. The poll we saw published by Lord

:22:17.:22:21.

Ashcroft this morning shows the Labour Party in a distant third. Ed

:22:21.:22:27.

Miliband is not getting any traction in places like that.

:22:27.:22:33.

Neither for UKIP. Nigel Farage has not gone for this. He is supposed

:22:33.:22:40.

to be super-confident and yet he has not. Labour are a distant third

:22:40.:22:43.

was that they were a distant third at the election. What will happen

:22:43.:22:49.

to the Labour vote in your view? Willett vote tactically? Willett

:22:49.:22:57.

vote for the Lib Dems? -- will it boat? The timetable was finalised

:22:57.:23:02.

last night to choose a candidate for Labour. There is a lot of

:23:02.:23:06.

energy than the neighbouring constituencies to go and flex

:23:06.:23:11.

muscles. You have Alan Whitehead's constituencies. Also the seat of

:23:11.:23:17.

Lord Denham. They need to go out there and chase the vote. If you

:23:17.:23:26.

take votes from the Lib Dems can make you will secure a Conservative

:23:26.:23:31.

victory. It could be pushed to a point where they live Dems win but

:23:31.:23:41.

after seven recounts! You want to keep us up all night. -- where the

:23:41.:23:48.

Lib Dems win. I think, time together all the things that have

:23:48.:23:52.

happened this week of what a lot of people will be looking at is the

:23:52.:23:56.

sheer dysfunction that the entire political system looks like. It is

:23:56.:23:59.

dysfunction with the GCSE announcements and with Chris Huhne

:23:59.:24:05.

and Vicky Pryce. I think the public bar just irritated with the whole

:24:05.:24:10.

machinery of politics. They could end up being a reverse disinterest

:24:10.:24:16.

among so people of Eastleigh in that by-election. Is the

:24:16.:24:18.

Conservative Party moving more than a direction you have been calling

:24:18.:24:25.

for? It looks like he has done the decent enough deal in Brussels. I

:24:25.:24:29.

do not know all the details but it looks like it is going his way a

:24:29.:24:36.

bit. Now he has a by-election test which, if he wins, it almost

:24:36.:24:41.

certainly make his position unassailable. I do nothing be can

:24:41.:24:47.

make any long-term predictions on any one result. He has certainly

:24:47.:24:51.

made in the direction a lot of Conservatives wanted. That is not

:24:51.:24:58.

just about Conservatives. Some proposals have been proposed by

:24:58.:25:04.

backbenchers - a rate of 10p for the low-paid. Not just issues about

:25:04.:25:08.

immigration and crime. It is about gay marriage and tax for the low-

:25:08.:25:13.

paid to ensure we have are barn as suffering for every voter. If the

:25:14.:25:19.

Prime Minister is watching, he did not think the position is

:25:19.:25:27.

necessarily unsustainable. implied, would there be a debate?

:25:27.:25:33.

did not imply that at all? Let me be absolutely clear... Of when

:25:33.:25:40.

people said that to me, I know a fog is coming in. That means it is

:25:40.:25:46.

just about to get very muddy. Will this coalition go down to the wire?

:25:46.:25:53.

Will it go down to the start of the election campaign in 2015? Will the

:25:53.:25:58.

Lib Dems crisis think we should pull out not in acrimony, but we

:25:58.:26:03.

should get out to distance ourself - refined our bearings sometimes

:26:03.:26:10.

after the summer of 20 14th - will they win the day? It is very

:26:10.:26:15.

unlikely. -- 2014. The public does not always pay huge amounts of

:26:15.:26:20.

attention to politics. The public does have a memory. You cannot pull

:26:20.:26:23.

out of the coalition a few months before polling day. Both parties

:26:23.:26:28.

will be judged predominantly a have they have done in coalition. It

:26:28.:26:34.

makes sense to make the most out of that right up until polling day.

:26:34.:26:38.

Now they are meant to work smarter, do more for less and, of course,

:26:38.:26:40.

think creatively about tapping in to their revenue-generating

:26:40.:26:43.

potential. No, I am not talking about contestants in Alan Sugar's

:26:43.:26:49.

Apprentice but local councils. And, do you know what? Some are. Liz

:26:50.:26:59.
:27:00.:27:02.

The medieval market town of Shrewsbury. Famous for its historic

:27:02.:27:05.

buildings career its flower show and for being the birthplace of

:27:05.:27:10.

Charles Darwin. His book On the Origin of species fast established

:27:10.:27:14.

the theory of evolution. Nasha is Prix is witnessing the emergence of

:27:14.:27:20.

a new breed of local council. the first time in a generation,

:27:20.:27:25.

striving councils now have licence to go full steam ahead. Grab a

:27:25.:27:32.

share of wealth for their local areas. To stand tall, and seize the

:27:32.:27:37.

opportunity of enterprise, growth and prosperity. That was not

:27:37.:27:42.

Charles Darwin but a modern-day exponent of the evolutionary theory.

:27:42.:27:45.

The Secretary of State for local government, Eric Pickles. His

:27:45.:27:52.

message to local councils, adapt to survive. It is lunchtime at this

:27:52.:27:55.

high school in Shrewsbury. There are hundreds of hungry mouths to

:27:55.:27:59.

feed. They are so good at cooking school dinners in Shropshire, they

:27:59.:28:03.

are already selling them to other council areas. We had to come up

:28:03.:28:09.

with a plan on how to deal with future cuts. Our plan is to trade

:28:09.:28:12.

in the marketplace across the public sector. We note a lot of

:28:13.:28:18.

councils will have huge Kurds again and they will be looking to make

:28:18.:28:23.

savings. -- cuts. They are asking how we can help. Shropshire council

:28:23.:28:29.

hopes to move the majority of its 6000 staff into the new company.

:28:29.:28:33.

The Local Government Association says the scale of the plans is

:28:33.:28:37.

unprecedented. The idea of making a profit from a council service is

:28:37.:28:41.

not necessarily new. In Stoke on Trent, the city council joined

:28:41.:28:47.

forces with the construction and engineering firm backing 2008. The

:28:48.:28:51.

core business instead was the maintenance of 19,000 council

:28:51.:28:54.

houses. Its plan to grow the business and makes the money has

:28:54.:28:59.

not been easy. It was almost to the point of dissolving the partnership.

:28:59.:29:04.

But, we reduced waste and the response time went down. Tenants

:29:04.:29:08.

are much happier with the way things were working. It has settled

:29:08.:29:13.

into quite a nice working relationship. It is a cautionary

:29:13.:29:17.

tale. Do not gamble public money without a large slice of commercial

:29:17.:29:21.

know-how. If you are going to do it could enter into it knowing you

:29:21.:29:31.
:29:31.:29:31.

have an escape route. The second key issue is, where are the

:29:31.:29:37.

opportunities to trade services? Local thirties are being encouraged

:29:37.:29:42.

to use their own methods of survival. -- local authorities.

:29:42.:29:48.

Will the fittest be able to embrace radical change and the rest pays

:29:48.:29:58.
:29:58.:30:04.

How bad is the situation? It is pretty bad. The welfare budget is

:30:04.:30:11.

growing sharply. That is driven by demand. If you put that to one side,

:30:11.:30:17.

you have to cut everything else more. It is reducing spending in

:30:17.:30:23.

cash as well as in real terms. kind of approach as we saw on our

:30:23.:30:28.

film to raise revenues and make a profit, should we take that

:30:28.:30:32.

seriously in the sense that it makes a serious contribution to the

:30:32.:30:37.

finances or is it just marginal? think it is marginal in the great

:30:37.:30:40.

scheme of things. If you look at a whole cost of providing services

:30:40.:30:46.

for the elderly and children and so on, these things can help. In the

:30:46.:30:52.

year where government spending is falling by two of 3%, clearly a

:30:52.:30:56.

council can squeeze its spending a bit. If you asked cannot reduce

:30:57.:31:02.

spending by 20 of 30 %, no, it can't. It can squeeze it a bit but

:31:02.:31:06.

it cannot rescue councils from the scale of the cuts. And looking at

:31:06.:31:13.

the cuts, I'm told here that there will be a 33 % cut in real terms to

:31:13.:31:16.

the money councils receive from central government across the

:31:16.:31:23.

current spending review period which has 2011 to 2014 / 15. That

:31:23.:31:29.

kind of thing. This is expanding -- extending it. This is because the

:31:29.:31:34.

government has chosen to concentrate the cuts on some parts

:31:34.:31:38.

of public expenditure. Capital expenditure has been cut sharply.

:31:39.:31:42.

Some central departments like the Home Office and justice is being

:31:42.:31:48.

cut very sharply. Local government is being cut most sharply. Partly

:31:48.:31:51.

because politically that spreads the blame. It forces people other

:31:51.:31:56.

than the government to defend cuts at the local level. What is your

:31:56.:32:05.

area, Peckham or so that? Peckham is in Southwark. Southwark Council,

:32:05.:32:10.

to pick up on the sharing services. We are looking at talking to

:32:10.:32:15.

Lambeth to say can we manage your library services for you and that

:32:15.:32:19.

would help us bring in some money but it is an absolute drop in the

:32:19.:32:23.

ocean compared to the fact that at the end of the next financial year,

:32:23.:32:29.

we would have taken at �249 for every man, woman and child in our

:32:29.:32:34.

borough. When you have cuts of that kind of scale, any kind of

:32:34.:32:38.

outsourcing we can do is very limited. Sam, it is made worse

:32:38.:32:44.

getting less funding because there is effectively a council tax freeze

:32:44.:32:49.

on. They cannot raise their own taxes? Exactly. What worries me is

:32:49.:32:55.

they involve degrees of risk. One thing councils cannot dig is a fail.

:32:55.:33:03.

That is not an option. Or put money in Icelandic banking accounts?

:33:03.:33:07.

could be some councils trying really risky schemes to make up the

:33:07.:33:11.

shortfall which then and up costing their residents more. The final

:33:11.:33:16.

point, Tony, we always told there's a lot of waste in town halls, will

:33:16.:33:20.

this force them to get lean and mean? I think they are always

:33:20.:33:24.

pretty lean and mean. Local government, despite a reputation to

:33:24.:33:29.

the contrary, is well managed. It does not run deficits. It is

:33:29.:33:34.

efficient. Interestingly, it is the most important part of the public

:33:34.:33:38.

sector being driven to make even greater efficiency is. I would much

:33:38.:33:41.

ask the question whether some parts of the public sector that are not

:33:41.:33:46.

being cut could perhaps be put under little pressure in the future.

:33:46.:33:50.

I think cabinet ministers are beginning to ask that as well.

:33:50.:33:58.

Travers, thanks for being with us. And thank you to Sam and Arena.

:33:58.:34:01.

So, nearly 2000 years after the event, the European Union has

:34:01.:34:04.

decided to give Pompeii and facelift. And not just any old

:34:05.:34:08.

facelift, a 105 million euros facelift. Scientists have been

:34:08.:34:11.

looking for dark matter in a big mountain in Italy. A ban on women

:34:12.:34:14.

wearing trousers in Paris dating back to 1799 has finally been axed

:34:15.:34:20.

and a wolf hunt in Sweden came to an abrupt end. It has been a busy

:34:20.:34:23.

of week in Europe. But what have members of the European Parliament

:34:23.:34:33.
:34:33.:34:36.

been up to? Here is our guide in French President Francois Hollande

:34:36.:34:39.

addressed the European Parliament where he warned the EU could be

:34:39.:34:44.

heading for a split and took a swipe at David Cameron's our carte

:34:45.:34:51.

approach to Europe. MEPs have been sounding off about noisy traffic.

:34:51.:34:54.

They have backed a draft law that would make vehicle noise reduced

:34:54.:34:58.

but they want electric cars to make more noise so pedestrians can hear

:34:58.:35:04.

them coming. Europol, that is the EU Law Enforcement Agency says it

:35:04.:35:08.

has uncovered match-fixing on an unprecedented scale and it could

:35:08.:35:13.

include a European and World Cup qualifiers. And MEPs have backed

:35:13.:35:18.

big reforms to the EU's Fisheries Policy. It is the first time they

:35:18.:35:22.

have shared power over fishing with member states. It will end the

:35:22.:35:28.

practice of throwing unwanted dead fish back into the sea. We want to

:35:28.:35:37.

see an end to the discarding of fish which is indefensible.

:35:37.:35:40.

And with us for the next 30 minutes, I have been joined by the

:35:40.:35:43.

Conservative MEP, Sajjad Karim, and by the Liberal Democrat MEP, Sarah

:35:43.:35:51.

Ludford. Welcome to you both. We used to have wine lakes in the

:35:51.:35:55.

old days, we used to have beef mountains, we still have fish being

:35:55.:35:59.

thrown back into the sea, these reforms, do you think they will

:35:59.:36:04.

really make a difference? They certainly will. I'm delighted that

:36:04.:36:08.

it is the first time the European Parliament has had leverage on a

:36:08.:36:12.

policy and this is the first time we have real reform. In the bad old

:36:12.:36:17.

days, the institutions had a short- term approach with vested interests

:36:17.:36:22.

which meant keeping the quotas above what scientific advice said.

:36:22.:36:28.

I am delighted that my colleague Chris Davies MEP, working with a

:36:28.:36:30.

big campaign like Hugh Fearnley- Whittingstall, has achieved real

:36:30.:36:37.

reform, banning discards, throwing dead fish back in, with long term

:36:37.:36:41.

management and regional decision- making. Not micro managing from

:36:41.:36:46.

Brussels. It shows you can get reform. A dig Britain get its way

:36:46.:36:52.

on this? I think a strong yes. A strong British input. Is it all

:36:52.:36:58.

over? I see there will be more negotiations with the 27 fisheries

:36:58.:37:03.

ministers before it becomes EU law. That is right. It has got to go

:37:03.:37:07.

through the Council of Ministers. Keep the champagne on ice? I really

:37:07.:37:11.

think we will get there. Political will has been demonstrated by the

:37:12.:37:14.

parliament. We will push this through.

:37:14.:37:19.

Let's move on to the big story today which is the budget. Soon

:37:19.:37:25.

after 6am this morning, the shape of the EU's budget began to emerge

:37:25.:37:30.

from Brussels. The European leaders have been up for most of the night

:37:30.:37:35.

negotiating, occasionally snubbing each other. Francois Harland said

:37:35.:37:41.

Mr Cameron captains of their with coffee, biscuits and sweets.

:37:41.:37:45.

Leaders calling for a straight seemed to have got it. We do not

:37:45.:37:52.

know yet. It is not over. The fat lady has not sung. He looks like a

:37:52.:37:57.

cut of 34 billion euros on the Budget which is coming to an end.

:37:57.:38:01.

UKIP's Nigel Farage is in Brussels where it is all happening. Would

:38:01.:38:05.

you like to be the first to congratulate the Prime Minister in

:38:05.:38:10.

getting the first cut in the EU budget for 56 years? Well, I think

:38:10.:38:15.

the British and Germans and other northern Europeans have said we

:38:15.:38:19.

cannot have Anne budget that expanse in size, we cannot sell

:38:19.:38:26.

that people. -- Anne budget. We have the best deal we could

:38:26.:38:30.

possibly have got under the circumstances. When we buy products

:38:30.:38:33.

from the European Union, we have to be careful what the label on the

:38:33.:38:38.

tin says because the contents can be disappointing. The weakness of

:38:38.:38:41.

sterling against the euro at the moment means there is no prospect

:38:41.:38:46.

of British contributions falling below �50 million a day. That is

:38:46.:38:50.

the bigger issue. Five years ago a Prime Minister that came back with

:38:50.:38:54.

a tiny cut in the Budget could have said a success and people believed

:38:54.:38:59.

it but I think the whole debate has moved on from that. Isn't he in

:38:59.:39:03.

danger of stealing your thunder now? He is offering voters a new

:39:03.:39:08.

relationship with Europe and a referendum. He shows he has got

:39:08.:39:13.

friends in Europe. He can negotiate with them and make an impact on EU

:39:13.:39:17.

spending, he has thwarted the demands of France. Francois

:39:17.:39:22.

Hollande would not even speak to him. In that circumstance, what is

:39:22.:39:28.

the point of UKIP? Quite. Cameron can say to the public we were

:39:28.:39:32.

paying �56 million a day to Brussels, we are now paying �52

:39:33.:39:37.

million. May be some voters will be impressed by that. From my part,

:39:37.:39:42.

our argument is we should not be paying any money at all. We want a

:39:42.:39:47.

relationship based on trade and co- operation, not being part of this

:39:47.:39:50.

political union. Really, in terms of the big European debate in

:39:50.:39:54.

Britain this does not change anything. The one person who says

:39:54.:39:59.

that better than anybody, he says it succinctly and with authority is

:39:59.:40:05.

your good self. So it why have you missed the opportunity to tell the

:40:05.:40:10.

British people all this by bottling out of fighting Eastleigh?

:40:10.:40:17.

please! I am here in Brussels at the summit today. I am one of seven

:40:17.:40:21.

group leaders at the European Parliament. We have a big vote

:40:21.:40:26.

coming up on this budget. I have plenty to do over here. I lead a

:40:26.:40:30.

party which is growing rapidly in size and is aiming to put 2000

:40:30.:40:34.

candidates into the field, into the local county council elections this

:40:34.:40:38.

year. I have promised I will tour around the country and support

:40:38.:40:42.

those people. I cannot do everything. We are not a one-man

:40:42.:40:46.

band. There are plenty of capable people who can fight the Eastleigh

:40:46.:40:51.

by-election. The suspicion is you prefer the good life in Brussels,

:40:51.:40:57.

rather than fighting in Eastleigh. Is it is a good life! Listen,

:40:57.:41:02.

Andrew, in the 1980s, I was a trader in the city. That was the

:41:02.:41:08.

high life. This is not, believe me. You did not manipulate LIBOR when

:41:08.:41:12.

you were there, did you? Know, I did not. I will not hold my hands

:41:12.:41:18.

up to that or anything else but I did live a good life. What is your

:41:18.:41:22.

overall attitude to, just as a working assumption, seeing that

:41:22.:41:27.

what we know is broadly what will be determined. What is your overall

:41:27.:41:31.

view? The Liberal Democrats have consistently voted for a straight

:41:31.:41:36.

on the budget. If you cannot have austerity at home and big increases

:41:36.:41:39.

as summer in the European Parliament wanted. We are

:41:39.:41:44.

overwrought OK with the outcome on the size of the budget. What we are

:41:44.:41:48.

very disappointed about is the shape and distribution of the money.

:41:48.:41:53.

Agricultural spending is going up. It is a bit rich for President

:41:53.:41:59.

Hollande to talk about how we need nemesis on growth but what is being

:41:59.:42:07.

cut his development on transport and so on. It is not as much as it

:42:07.:42:16.

should be for a 21st century budget. Foreign spending will come down

:42:16.:42:21.

overall. Not as much as it should. It is coming down a bit. We will

:42:21.:42:28.

look at the fine print. You are broadly in favour? We are in favour

:42:28.:42:31.

of the size but we need more flexibility and future Oriented

:42:32.:42:39.

spending. I assume you are broadly in favour so I will ask you about

:42:39.:42:43.

that. This will go through the European Parliament? Can I just

:42:43.:42:47.

start by saying what we have heard Nigel Farage say it is utter

:42:47.:42:55.

nonsense. He talks about working hard in Brussels. He is in Brussels

:42:55.:42:59.

today. The European Parliament is not meeting in Brussels today. We

:42:59.:43:03.

have repeated debates in Parliament. We had a vital debate about

:43:03.:43:09.

securing EU funds for small and media -- medium-sized enterprises.

:43:09.:43:14.

Not a single UKIP member was in the chamber. If there is ever a case of

:43:14.:43:19.

fraud for the British people then UKIP is it. Now you have done that

:43:19.:43:24.

attack, in fairness I have to hand back to Mr Farid. The ball is in

:43:24.:43:30.

your court, how do you respond? are having an in out debate. The

:43:30.:43:33.

Conservative and Labour position is they will try and battle for better

:43:34.:43:37.

legislation in Brussels and the UKIP position is we will divorce

:43:37.:43:41.

ourselves from Brussels and Take That burden of regulation of

:43:41.:43:46.

bristles -- of business. He said you are not there are enough.

:43:46.:43:50.

is nonsense. We have members from UKIP who are extremely active over

:43:50.:43:56.

here. I want to come back to this, the question I asked year was, I

:43:56.:44:02.

saw the head of the European Parliament, the chairman up in arms

:44:02.:44:06.

about the President. Is there a chance but the European Parliament

:44:06.:44:11.

could vote is down? One of the things Martin Schultz is stranded

:44:11.:44:17.

here is to give a secret vote to MEPs. Are I think it is outrageous.

:44:17.:44:24.

There is a huge lack of democracy at an EU level as far as our

:44:24.:44:29.

citizens are concerned. Wendover Cameron in his speech said only

:44:29.:44:32.

national parties are democratic, I would like to thank the European

:44:32.:44:40.

Parliament for the reform. To say that MEPs should have a secret vote

:44:40.:44:44.

is disgraceful. I would just go back to Nigel Farage, I assume you

:44:44.:44:47.

will have nothing to do with a secret vote in the European

:44:47.:44:53.

Parliament? No, this will come before the Conference of Presidents.

:44:53.:44:58.

Seven of us will vote on this. I will vote for them not to be a

:44:58.:45:03.

secret ballot. I suspect that what people Britain do not understand is

:45:03.:45:07.

those driving the European project over here are fanatics. They will

:45:07.:45:10.

stop at nothing and I suspect Mr Schultz will get his way and there

:45:10.:45:20.
:45:20.:45:30.

We are making Nigel Farage work for his non money that he gets. How do

:45:30.:45:34.

you feel about your taxes going to fund the BNP or the French National

:45:34.:45:37.

Front? Well, it is happening and the Socialist, Liberal and Green

:45:37.:45:46.

MEPs are trying to stop it. But is it democratic to treat some

:45:46.:45:49.

political parties differently, just because you find their politics

:45:49.:45:51.

unpleasant? It is a live debate among our representatives in

:45:51.:45:56.

Strasbourg, as Jo Coburn found out this week. The face of political

:45:56.:46:02.

extremism in Europe. They may be on the fringes but last year, in

:46:02.:46:09.

France and Hungary, parties qualified for 300,000 euros because

:46:09.:46:13.

of their representation in the European Parliament. This decision

:46:13.:46:19.

has caused uproar amongst MEPs from mainstream parties and is being

:46:19.:46:23.

challenged. We are on the fringe of society. The problem is what they

:46:23.:46:29.

can develop. In former times, fascists and neo-Nazis and the Nazi

:46:29.:46:33.

Party have been at the Fringe. Especially with high unemployment

:46:33.:46:37.

and many social problems were they can gain a lot of influence and do

:46:38.:46:46.

a lot of damage to society. MEPs have signed a petition. They are

:46:46.:46:49.

using a parliamentary rule at state's money should only be given

:46:49.:46:55.

to groups who uphold the values of European Union. Just months after

:46:55.:46:58.

being awarded European Union cash, the alliance of extremist parties

:46:58.:47:03.

could see it taken away. If the initial decision to fund them is

:47:03.:47:07.

bound to break parliamentary rules prevent MEPs will be given a vote

:47:07.:47:10.

on the issue. The prospect of losing the money has put the issue

:47:10.:47:17.

into sharp focus for members of the alliance of European national

:47:17.:47:21.

movements. Parties like the BNP are claiming they are being unfairly

:47:21.:47:24.

discriminated against. We do not think any pan-European political

:47:24.:47:31.

party should get any taxpayers' money at will. While it is being

:47:31.:47:35.

handed out, it is monstrous that they should not get views

:47:35.:47:38.

represented and funded while the socialist groups do for stoppages

:47:38.:47:42.

fundamentally a question of all animals are equal but some animals

:47:42.:47:49.

are more equal than others. -- groups do. There is a dilemma for

:47:49.:47:52.

some Members of the European Parliament. They feel it is

:47:52.:47:56.

undemocratic to use be ceded to make life difficult for them.

:47:56.:48:01.

problem with state funding is that either you end up funding extreme

:48:01.:48:07.

and peasant parties, or, which is worse, you give the opponents of

:48:07.:48:10.

those parties the right to sit in judgment over who does and does not

:48:10.:48:16.

get the money. That is a really dangerous precedent. Once some

:48:16.:48:21.

parties get to disqualify opponents, where does it end? This is how

:48:21.:48:26.

every dictatorship operates. parliament will vote to remove EU

:48:26.:48:30.

funding, it is predicted. The amount of money is relatively small

:48:30.:48:35.

and unlikely to silence them. We asked the BNP to come on and

:48:35.:48:43.

discuss this but they refused. We still have three MEPs with us.

:48:43.:48:47.

Nigel Farage is in Brussels. To get this money, the parties have to

:48:47.:48:54.

read here to the rule 2010. In your opinion, do think the BNP, at the

:48:54.:48:59.

National Front, that Hungarian party, the parties in Greece and so

:48:59.:49:03.

on, do they have full respect for human rights and fundamental

:49:03.:49:08.

respect of freedoms and liberty and the rule of law? The Greek example

:49:08.:49:17.

is the one. This is why it is on increased - they really are a

:49:17.:49:20.

genuine neo-Nazi party. They are at 12% of the polls and rising. People

:49:20.:49:24.

are worried that people from a party will come here in 2014. If

:49:24.:49:34.

you allow freely Parliament, when there -- whether they have the

:49:34.:49:37.

right or left-wing views, to start to withdraw money from them because

:49:37.:49:43.

you do nothing they conform to valleys is a huge mistake. -- do

:49:43.:49:48.

not think they conform to your values. It is likely to make those

:49:48.:49:53.

parties even more popular with the electorate. If we start with race,

:49:53.:50:02.

where do we go next? One man intervened in Parliament and said

:50:02.:50:06.

that my speech, whilst I have nothing against the people of

:50:06.:50:12.

Romania and Bulgaria, I do not want to have an open door. He said I was

:50:12.:50:18.

in contention -- contravention of human values. You cannot dole out

:50:18.:50:25.

money to elected representatives as to whether you find their views

:50:25.:50:32.

acceptable. I want someone to look at the rules - and independent. It

:50:32.:50:37.

is not about the opponents deciding. What home calling for his, or we

:50:37.:50:45.

have a rule. They should not be a dead letter. -- and calling for is,

:50:45.:50:49.

we have a rule. One MP asked for singling out, putting on the list,

:50:49.:50:54.

Jewish MPs has been a threat to national security. There is a

:50:54.:50:57.

difference about campaigning for votes but should they be getting

:50:57.:51:03.

taxpayers' money? I can perfectly understand it is your job as a

:51:03.:51:11.

Liberal MEP, I think Ms people would be appalled at that proposal

:51:11.:51:21.
:51:21.:51:21.

for the Hungarian. -- most people. It is not about breaking the rules,

:51:21.:51:25.

saying you were not go and get the money you are entitled to. I would

:51:26.:51:30.

certainly compete with them and show them up for have nasty they

:51:30.:51:37.

are. What we are calling for, as liberals, not on the same page as

:51:37.:51:42.

socialists, is to say let's do what this will calls for - a review for

:51:42.:51:52.
:51:52.:51:53.

an independent panel to look. this rule. If you do not give out

:51:53.:51:55.

the money... Bearers a query as to whether you should be getting his

:51:55.:52:03.

money at all. -- there is a query. I am told that everything is 5p.

:52:03.:52:08.

When you add it up, it comes to 5 billion. For everybody who wants to

:52:08.:52:12.

spend 5p, if you do not dole out the money simply on the basis of

:52:12.:52:18.

how many MEPs they have, which is a mechanistic approach, you become

:52:18.:52:22.

subjected. I do not understand how that will work. In the first

:52:22.:52:27.

instance, I do not support state funding of political parties on

:52:27.:52:31.

groups or movement of any sort. We have not signed that particular

:52:31.:52:37.

document that was referred to. The fact of the matter remains, we at

:52:37.:52:41.

all times, just this week and I had to sit in the European Parliament

:52:41.:52:45.

and listen to Nick Griffin speaking his language of hate and division.

:52:45.:52:50.

It really was a hate speech. As much as I may disagree with what he

:52:50.:52:57.

says, the fact of the matter is, he is democratically-elected from my

:52:57.:53:01.

constituency. I will defend his right to come and say what he says

:53:01.:53:08.

in a parliament. There are limits. Whether we should be funding

:53:08.:53:11.

political activities being carried up by his party, as long as it is

:53:11.:53:17.

within the rules and they applied equally to everybody, then yes we

:53:17.:53:21.

should. A final question to you, Nigel Farage. Does this money make

:53:22.:53:28.

much difference to you anyway? the money make any difference? Well,

:53:28.:53:33.

not particularly. I have to say, the money going into European

:53:33.:53:38.

political parties is relatively small. The money they European

:53:38.:53:42.

parliamentary groups can access - particularly the announces MEPs can

:53:42.:53:49.

access - is very considerable indeed. -- the allowances. The

:53:49.:53:53.

principle must be all elected members must be treated the same.

:53:53.:53:59.

Please do not demonise these people. The stock Nick Griffin is easy. The

:53:59.:54:03.

timber, Question Time and there will be the end there. -- to stop

:54:03.:54:11.

Nick Griffin is easy. Put him back on Question Time and that will be

:54:11.:54:19.

the end of it. Now does the rotating presidency of the European

:54:19.:54:23.

Council get you all in a spin? Well, worry not. Our Adam has been to

:54:23.:54:31.

Brussels to find out more about it. Here's his handy A to Z guide. It

:54:31.:54:35.

is the part of the EU that really does go round in circles. Every six

:54:35.:54:39.

months, a different and she gets to take on the rotating presidency of

:54:39.:54:49.
:54:49.:54:50.

the EU. -- a different country. Here is the Irish ambassador doing

:54:50.:54:55.

the main job. Generally working as an honest broker between the member

:54:55.:55:01.

states. You have a huge infusion - a fresh energy and drive.

:55:01.:55:05.

Enthusiasm at the start of every six months. It is very important.

:55:06.:55:10.

The pace to work at, you could not keep it up. It keeps a lid on the

:55:10.:55:16.

favourite pastime of Brussels - haggling. Politically, to reach

:55:16.:55:20.

agreement, who should share this group or that group? We have seen

:55:20.:55:27.

that recently stopped imagine the horse trading and bargaining and

:55:27.:55:30.

complaining. Top of the Irish agenda is the promotion of jobs and

:55:30.:55:37.

growth across Europe. Sometimes it means leaving the national

:55:37.:55:47.
:55:47.:55:50.

Then there is the softer side, there will be hundreds of Irish

:55:50.:55:55.

cultural events, like this reading by an award-winning author. Each

:55:55.:56:00.

country installs its own piece of art in the atrium of the council

:56:01.:56:07.

building. It is about promoting Europe to Ireland. The EU is a

:56:07.:56:14.

crash course into how the organisation works. Bearers a crash

:56:14.:56:20.

course for citizens. They hear a lot more about it. -- there is a

:56:20.:56:26.

crash course. Some of it has lost its lustre. Some wonder, what is

:56:26.:56:32.

the point? You can have some presidencies not as strong as

:56:32.:56:36.

others. Or individual chairs that will not be as good as others. You

:56:37.:56:41.

can always be certain that they will be gone in six months.

:56:41.:56:47.

Presidencies to come in threes. To give some continuity, trios of

:56:48.:56:53.

countries work together. Ireland are co-operating with Lithuania and

:56:53.:56:58.

Greece. Because the EU is about to have 28 members, Ireland were not

:56:58.:57:04.

get another shot at presidency for another 14 years. -- will not get.

:57:04.:57:14.
:57:14.:57:19.

He loved it. He is still on it, going round in circles. Should we

:57:19.:57:25.

move to something better than the six month presidency? It can be

:57:25.:57:28.

relieved to wanting, particularly for some of smaller countries like

:57:28.:57:36.

Ireland and Cyprus. -- really daunting. You can imagine the panic

:57:36.:57:42.

that sets in. What should be done? We now have Herman van Rompuy

:57:42.:57:45.

performing a slightly different function to what the presidency

:57:45.:57:50.

does. The fact and the matter is, the need to keep a mechanism

:57:50.:57:53.

whereby the nation states are actually involved in this

:57:53.:57:58.

presidential system. Whether we work on the basis of threes -

:57:58.:58:02.

countries coming together - one country coming along... Ones that

:58:02.:58:06.

are coming along of following up and having a closer relationship

:58:06.:58:12.

and those that are on the way out as well. We are living in

:58:12.:58:18.

historical times. Today is a historical day. For the first time,

:58:18.:58:25.

we have seen a reduction. Nobody likes the rotating presidency.

:58:25.:58:32.

perfectly content with it. I will take away the word, nobody! What I

:58:32.:58:42.
:58:42.:58:46.

think it does is... It illustrates the EU is not trying to create a

:58:46.:58:50.

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