13/09/2013 Daily Politics

Afternoon, folks. Welcome to the Daily Politics. The Bank of England

is urged to intervene in the housing market and limit price

rises to 5% a year to avoid a house price bubble. How is that possible?

The Green Party kick off conference season with their gathering in

Brighton. We will report from the Green-run city and talk to its

Green MP, Caroline Lucas. Labour continue their campaign

against zero hours contracts but what are they and why are they in

Ed Miliband's sights? And we'll wrap up all this week's

top political stories in just 60 seconds. Or a pacy ten seconds, if

you are paying attention now! That is the name of the game. You have

lied to the people of London. I apologise. It just popped out. With

Boris, it has a habit of popping out, quite regularly. All that in

the next hour. And with me for the duration, Iain Martin, who writes

for the Sunday Telegraph, and Miranda Green, a former Lib Dem

insider, who now edits The Day - a daily news service for students.

She did not just be called the half-day? It is for secondary

schools. These of students who have to stay all day! It will never

catch on. Let's kick off with the suggestion this morning that the

Bank of England should intervene to put a lid on house price rises. The

Royal Institute of Chartered Surveyors says the Bank should

consider acting to limit increases in the cost of houses to 5% a year

to take the froth out of the market. I would see it more as a speed bump.

When house-price inflation hits a certain level, there will be a

reaction from the Bank of England to try to slow things down. It is

about a more sustainable market. We're trying to avoid the market

lurching from bust to boom and back to bust again. What gives these

chartered surveyors the idea they can do just declared that house

prices should not rise by more than 5%? We are just coming off the back

of an economic crisis that has lasted almost as long as the Second

World War. I'm not sure how the proposals are practical. The

British are addicted to house price rises. It is also a very London

centric you. House prices are rising about 6% in London. London

has a whole ecosystem of its own. They are not rising in Wales. That

is the danger with this sort of proposal. It is understandable

where this is coming from. Maybe introducing some grit in the system

is a good idea. If you tried to do something to damp down London, all

the other areas of the country where people are still seeing the

value of homes for Jews year on year and not rise at all, will

suffer. -- reduced. There are legitimate concerns that this new

growth in house prices is not happening of its own volition. It

is happening because the Government is pumping up the market. Precisely.

The Government was desperate when it did not think growth was coming.

It launched the scheme and is stuck with it. It is a bizarre

proposition. After the experience of the last decade and a half and

the economic disaster that came from the last property bubble that

the Government should be fuelling house prices. It is completely

bonkers. If the Government is to give help to any kind of borrowers

cricketers not housebuyers it should be helping. That will not

happen anyway. -- borrowers, it is not house buyers. It is about loans

made him and small sized businesses. The problem with help to buy is

what they want to do is to relate new house building. The structural

problem in the housing market in the south-east is a lack of homes.

They want to stimulate a new build essentially. In London and the

south-east we have a particular problem. A lot of the new-build is

being bought by foreign nationals. Apparently flaps are being bought

up by Malaysians. 20% of new build in London goes to foreign buyers.

You need to have a look at a whole set of issues. It is clear Mr cable

is a little bit sceptical of this help to buy. He is obviously

worried about the bubbly effect. He said it needs to be watched

carefully and closely. A second stage comes in in the New Year.

Given that the housing market, certainly in London, is looking

pretty healthy and the economy is growing again. They may not go to

the second stage. It is time to turn off the tap and the get these

fiddly measures suggested this morning. They sound very

complicated. The morning. They sound very

one major tool to use, which is interest rates. They are not going

to move on interest rates any time soon. Capital Taliban from the PR

Ray and the Bank of England commit you could argue that restrictions

on capital... Taliban?Decided that the Bank of England under Mervyn

King, now departed, and Andrew the Bank of England under Mervyn

Bailey, the new regulator, were particularly concerned that banks

were not being asked to hold enough capital. They have increased their

amount of capital. They are known in the city as the capital Taliban.

That is like the economics of Robert Mugabe. We will not dwell on

that! Now it's time for our daily quiz. The question for today is,

who has indicated the Liberal Democrats should consider ditching

Nick Clegg before the 2015 general election? Was it... A) The

listeners of his radio show, b) Vince Cable, c) Matthew Oakeshott,

d) David Cameron? At the end of the show, Miranda and

Iain will give us the correct answer. It is pretty clear who it

is but you do know. We do know.It is like the first swallow in spring.

If you had looked at any of the newspapers this week, and why would

you bother when you can get your fix of political news here on the

Daily Politics, you might have read ithas not been a great week for

Labour and Ed Miliband. His march down to Bournemouth to bash the

unions at the annual TUC meeting on Wednesday never quite materialised.

Instead, the Labour leader was keen to show he was in tune with union

members, by attacking the increasing use of so-called zero

hour contracts. Here's a bit of what he had to say. We are going to

change it by banning zero hours contracts that same workers have to

be exclusively available for one employer. We are going to ban zero

hours contracts that save employer. We are going to ban zero

worker has to guarantee they will be available but they get no

guarantee of work. And we're going to end zero hours contracts. People

are actually doing regular hours but get a zero hours contract and

not a regular contract. We will end the exploitation of zero hours

contracts in this country. Ed Miliband there outlining Labour's

position on zero hours contracts. But what exactly are zero hours

contracts? Well, they allow employers to hire staff with no

guarantee of work. In other words, employees only work as and when

they are needed by employers, often at short notice, and are only paid

for the hours they work. Sick pay is often not included, although

holiday pay should be included, in line with working time regulations.

There is some dispute over how many workers are on these contracts. The

Office for National Statistics says it is around 250,000 workers, while

the Chartered Institute of Personnel and Development estimates

that the real number is more than a million. A number of British

companies use these contracts, including retailer Sports Direct,

companies use these contracts, which employs 20,000

companies use these contracts, zero hours. Pub chain JD

Wetherspoon, Cineworld cinemas, a number of London councils - even

Buckingham Palace uses them. Despite their widespread use in

certain industries, the CIPD survey found only 14% of employees on zero

hours said their company failed to provide them with sufficient hours

to have a basic standard of living. But Labour and some union groups

argue their use is on the rise and they do not offer enough financial

stability and security for workers. I am joined now by Mark Beatson,

chief economist from the Chartered Institute of Personnel and

Development, which represents people working in recruitment and

has carried out its own research on zero hours. These contracts are

obviously popular with employers. Are they popular with employees?

They will be popular with some employees. One of the features is

that, in principle at least, they allow people to turn down the offer

of work. That can suit people who want to work periodically. For

example, a student might want to work 60 hours a one-week and then

they might have an essay the next week and want to turn the work down.

Are they on the rise? Probably. Our research did not look at the past

Trans. The Office for National Statistics data said it has been

increasing over the last five or six years. That is probably the

case. Mr Miliband says he does not want to ban them outright but he

wants to buy some kinds of contracts. Would that work? A lot

depends on the detail. It is difficult to define what these

practices are in terms of workable law. We need to look at regulation

alongside other approaches. For example, greater transparency. MPs

will be more aware of what they're letting themselves in for when they

signed up for these contracts. With us now is the Labour Shadow

Business Minister, Ian Murray, and Ruth Porter from the Institute of

Business Minister, Ian Murray, and Economic Affairs.

There are £250 a workers on these contracts. Only 14% of which say

they would like to work more pounds. What is the problem? The ONS

figures are believed to be slightly on the low side. Some people do not

know they are on zero hours contracts. The 14% figure is

interesting. Actually people can get more pounds and 10 to get more

pounds. It is the insecurity that is a problem. -- tend to get. He

have to look at how this is affecting job security. You would

not ban contracts and a bright, would you? They work for some

people. They work for students. They do work for various industries

and Ferris people. It is the exploitation that needs to be dealt

with. A problem is, if you were not going to ban them out right but you

are going to start to ban some kinds, it will become very

complicated to regulate, won't it? People need not to turn up to a

place of work and be told there is no work incentive. It needs to be

regulated. An employer needs to offer Howarth if they are asking

you to go into work. -- ate offered you hours. What will you do? Give

me a simple change in the law he would make. You would stop people

having an exclusive contract with employers on 0 hours and -- on 0

having an exclusive contract with hours less it is proven that is

what is wanted. We have asked the ONS to provide figures about

whether people want them. There are determining what the figures will

be and we can take them forward. I think there seems quite reasonable.

The need to look at the reality was that if we are talking about a

situation where 14% of people on these contracts cannot get

sufficient allowance, the answer to that is not to increase regulation

on employers and make it tougher for businesses committed to curb

what kind of conditions we can change in the economy to make more

jobs. -- it make it tougher for businesses. You do not think they

should intervene on these contracts. For some employers, it is a way of

getting cheap labour, isn't it? Some employers need flexibility.

That is a euphemism for cheap labour, isn't it? Flexibility is

hugely important. The CBI Homs said their estimate is that over the

course of the recession, if we had not hired a flexible labour market,

which had seen an extra half a million people who would have been

made unemployed. It is the really critical issue. I think it is a

slightly lazy argument. I ran my own business before becoming an MP.

I could have asked for two people on 0 as converts to turn up at 9

o'clock in the morning and choose 10 or 12 people to work. That

surely cannot be right. That is not the reality. If you have a small

manufacturing plant and you need people with a specific skill said,

manufacturing plant and you need it is not easy. It may simply be

the reality that you do not know from month to month what to order

book will look like. The dingy people on call on an exclusive

basis with the skills. That works for high-end skilled manufacturing.

He does not work at the lower end of the labour market. Low-skilled

workers are being put on to these contracts. It is bad for employees

and is ultimately bad for the employer. This is how the labour

market is moving. They are looking towards freelancing. They are not

seen the whole trend of 95, Monday to Friday, job for life. -- 9-5. In

the retail sector, you know you're busy on a Saturday, perhaps a

Thursday evening if you are late opening. We have seen JD Sports in

your piece. I think 90% of the staff are on that. Quite a few

Labour councils are on them as well. Some Labour councils have taken the

lead and getting rid of these contracts. Some of the councils to

have them. They must find some value in these contracts.

We have to be careful we don't lump everybody into the contracts. They

do work for some people. Lifeguards, supply teachers, to

guides at the House of Commons. -- tour guides. They want that. It has

to be something you want. The resolution foundation found that

those on these kinds of contract averagely earn £9 per hour compared

to £15 per hour for other workers. This is cheap Labour. That is a

reflection of some of the sectors where they tend to be most common.

Retail and the care sector. I'm not sure the average wage tells us much

about it. It goes to the question of what kind of economy we have. That

route point, the issue here is there are workers with more hours, what is

Labour going to do to create more jobs of all different kinds in the

economies of the people who are able and willing are able to find

sufficient work? That is a big question. Save it for another day.

Do not give it to any other programme. You can see why some of

this could lead to exploitation but also why some people would want some

kind of contract rather than none. Absolutely. There is an important

question about the statistics. I would like to know how it affects

young people in the workforce, a shop like JD Sports, they are going

into their first jobs, perhaps they are not fully aware of what kind of

contract they are getting. You are twice as likely to be young as those

on average on a contract. There is another side of the argument. It is

all leading to something better than being unemployed. The business

Department has said it will look at this. It is very interesting that Ed

Miliband promised to ban certain applications of this contract and

not ban it out right. Quite clearly, the way we work is changing. We are

not ban it out right. Quite clearly, not talking about turning up and not

not ban it out right. Quite clearly, being implied. This was a classic Ed

Miliband intervention, an interesting piece of analysis, but

he doesn't really have a clear plan. This is a very deep, long-lasting,

injuring problem. It is a consequence of globalisation driving

down Labour costs, and this is a problem in the tax and benefit

system, over many decades we have trained certain sectors to become

reliant on cheap Labour with the expectation that the taxpayer will

then top it up. Somehow, over the next decade, we have to unscramble

those changes. My response would be a simpler, lower, flatter tax

system, but that is easier to say than implement. I can understand why

Labour want to look at this, but in the grand scheme of things it is not

exactly going to set the heather on fire. This is very bad for the

economy, consumer confidence. How can you create the jobs that people

want when you cannot get this? The government are giving significant

tax cuts to corporations while the taxpayer is subsidising wages. I

will give you the final word. The Mac one positive thing that has come

out of this being raised is more people are on these contracts are

now realise they are on these contracts. There is evidence. I had

better look at my contract. Hopefully this debate will have

approved -- improve that. It has certainly educated me. It is not

just the big parties in conference mode. The Green Party of England and

Wales are about to go to the seaside today. They help minority control of

the Council of the city they are meeting in and they have the

country's only Green MP. He liked to tell us they are different. Living

up to that principle has meant they seem to be doing some rather public

falling out on Brighton City Council.

The thing about visiting and living in Brighton is it is not a shy

city. It is loud, determinate lead different, and it wants you to know

it. -- determined to be different. That attitude has permeated the

politics. It is a place of alternative lifestyles, alternative

mindsets. The Green Party sum that up. When they came in two years

ago, people thought they wanted something different. What has

happened recently is certainly different. By principle, Green

councillors are not whipped into voting for party policy. Councillors

have had some very public arguments. Astonishingly, this whole

thing comes down to fruit. The Greens are divided into watermelons

and mangoes. Watermelons are read on the inside, socialist. Mangoes are

yellow on the inside, more practical. But they need to work

together. Here in Brighton, that mix has been more of a fruit salad.

Examples include a strike green leader was arguing why the binmen

were wrong and needed to get back to work, and his deputy was outside on

the picket lines with the workers. The first Green MP was also publicly

sympathetic to the binmen's cause. It was unfortunate. It was not the

best message to be sending. The outcome is we are on course to have

a fairer system of pay. Then the Green Party voted for a plan to do

at the local area, it would have meant a tree would have been left.

But then one of them change the mind -- their mind and led the campaign

whilst their fiance led the protests from up the tree.

Taxes and businesses have scoffed at the 20 mph speed limit that nobody

in forces. Opponents have said the Greens have gone through the looking

glass, especially when there was an idea that mediators might be brought

in to get them back together. Mediation for political parties just

does not happen. It is just bonkers. People said that. When you

look at our record, we are effective. I accept the perception

that this is less than helpful. The only way to know if they understood

is when Bray Tony and is go to the polls in 2015. -- Brighton people.

We can top to the former leader of the party, Caroline Lucas. Welcome

back. I understand that the Green Party in Brighton who run the

council have been falling out among themselves so much you had to

consider mediators to sort out the party. Is that right? I think

parties having differences of views is not specific to the Green Party.

You have Labour with the rows over the unions or the conservative

rebellion on Syria, Sarah Teather walking away from the Liberal

Democrats. This is nothing new. What is new is when it happens, we look

for help. Did you bring in mediators? I'm not sure if they have

or not. I am not on the council. I know that is being discussed. You

are the MP for the city. I imagine... If the party is so

divided you need to bring in mediators... I really disagree with

you. You would not be saying that if there were two people in a marriage

trying to find their way through it and used mediators. It is

interesting, the language that mediation is a dirty word. Imagine

if Tony Blair and Gordon Brown had got some mediation a few years ago.

We might have had a better country. I would not knock it. Are you a

mango or a watermelon? I had a feeling you were going to ask me

that. I do not want to identify myself as a piece of fruit. I will

say that policies are more popular than your clip suggested. We have

been the first council to say that we will not evict people on the

basis of the bedroom tax. The counsellor is also reduced the

differential between the highest and lowest paid. They have been bringing

a living wage to Brighton and will the there is a lot of good news. How

can you ended up on the picket line protesting against the council? --

how come. There was one high-profile decision where the council was

divided and the local party and the city was divided. That issue was one

we inherited, from previous administrations who had not sorted

out this situation. It was desperately difficult and of course

there will be differences of views. You will have differences of views

with Labour and the Tories. Here is the first green council in the

country, it is a minority counsel, so it is more difficult than if you

had a majority. They face a difficult dispute with rescues

collectors. Lo and behold, they find their fellow Green MP for that city

is on the picket line against them. It is not exactly a brotherly or

sisterly organisation. The council was split on the issue. The party

was split on the issue, the city was split on the issue. You are trying

to make this into some symbol of division, but the decisions and

divisions are unfortunately part of political life whichever party you

are part of. How are your relations with the most powerful Green

politician in the country, Jason Kitcat? Very good. You will see it

as the conference on full because you will be glued to the television.

You said 0-hour contracts have no place in the 21st century and should

be banned but we learn Brighton Council has about 1000 people on

0-hour contracts. There is a difference between the contract that

mean you have to absolutely be on stand-by at any point, do not have

the benefits of holidays and other provisions, but you are asking me

about council issues. I would rather provisions, but you are asking me

you ask me about Parliamentary issues. It is perfectly legitimate,

since you have said this, and the one council in this country run by

your party as 1000 casual workers who have no guarantee of shifts. --

your party as 1000 casual workers as 1000. That is not the same thing.

We need to be clearer about what we mean by this. There is a difference

between people having a relationship with the council where they come in

and they are perfectly able to take other jobs when they want them and

the situation as we understand it which is when you absolutely have to

be at beck and call and if you do not do it you are penalised and do

not have any of the benefits that go along with it. Where does the Green

Party go from here? You have one MP, one minority counsel, there is no

sense that they either coming force in this country. You may struggle to

hold onto what you have got. What you do? The European elections are

coming up next year. They are the next big platform. There has been a

poll published that put us at 12%. That means we have a really good

chance of increasing the number of members of the European Parliament.

We currently have two. We could look at as many as six. If we achieve

that it is a really good springboard going forward. Many of the things we

will be doing is basically showcasing the European policies and

making sure people know very clearly that if they want a safer

environment then vote Greens into the European Parliament. The problem

with pinning hopes on a breakthrough in the European elections is you

will certainly be overshadowed by UKIP. Since UKIP apparently are on

track to win hands down you could say that if you were talking to

anyone. I'm not sure that is the most significant issue. If we were

to treble Arab MEPs that would be fantastic -- our MEPs. . There have

been countries where the Greens are fantastic -- our MEPs. . There have

on the mark, much more so than in Britain. Where would you identify

where you can see a green movement to which the future belongs?

We take huge inspiration from the Greens, certainly in Nordic

countries. They have to critical things we do now have at home -

state funding for political parties... In Germany, Angela

Merkel is going to get the biggest vote in Germany. The Greens are

doing incredibly well in Germany. Sweden is what I mentioned, not

Norway. The you mentioned Scandinavia. Anyway, let's talk

about Sweden in particular, where we are doing extremely well. Greens

all over Europe a doing well. For me have a more fair electoral

system, you will see that here. -- when we have. In the European

elections with but over when we have. In the European

votes. That should not be easily dismissed. -- we got. What message

to want to come at the Brighton this weekend? The Green Party is

the only party that is delivering. Come and join us. It is in your

home Parliamentary Cancer it should be good fun for you. -- Council.

Cast your minds back far enough and you might remember our next guest.

He is the founder of UKIP and served as their first leader. Yes,

that's right. It's Alan Sked. And now he has formed a new left of

centre, anti-EU party called New Deal. As well as advocating

Britain's exit from the EU, New Deal will pledge to renationalise

the railways and scrap some of the coalition's benefit changes. But

how does he feel about his old party now that it's doing so well

electorally? He has described the UKIP led by Nigel Farage as anti-

immigrant, anti-intellectual and racist. Strong words indeed. Here

is Mr Sked unveiling UKIP's general election manifesto in 1997. We will

be the rock in this Craik period of flux in British politics with other

parties cracking and groaning and braking. We expect MPs to come

swimming to us, believing in the policy of British independence and

withdrawal from the European Union. policy of British independence and

And Alan Sked joins us now. That was very embarrassing. I looked

younger. That was a long-time ago. We all looked younger. That was in

1997. What went wrong? What went wrong was that the party has gone

into a bunker bonkers land. That is to coin a phrase. They want to be

MEPs and take monies. Nigel Farage has claimed £2 million of expenses.

2 million! That was in a debate with Denis MacShane. They did not

do anything. A almost as big as a BBC pay-off. You will be looking

forward to that. I would not get one of them. I am not stuff. I

could go back and a zero hour contract. Is there room for two

anti-EU parties? I hope so. I have this idea of having a pincer

strategy of where by the first party I founded presses the

Conservatives, per-second will pressure - smack of the second will

press the Labour and Lib Dems. -- the second. UKIP is going to

dominate this debate still. No, it is not. It might do well at the

European elections but after that it is not doing well at will. It

got 23% in the local elections. That was on a turnout of 70%. I do

not want to talk about UKIP. It is not my party. Is it not because

not want to talk about UKIP. It is you're trying to launch you kip of

the left? Isn't it the case that people who want to leave Brussels,

who are anti-European, tend - not always - they tend to be more right

of centre and left of centre. The Labour Party has been staunchly

anti- EU. Since I founded the party, I am approached by all sorts of

people - young people. Mainly students. The average age of people

working has been 25. They want out of the EU but have a sense of

social justice. The other thing we are in politics for is to try to do

something with the huge inequality that exists today in a our society.

-- in our society. I think the bedroom tax is iniquitous and

obscene and we would abolish it. How many candidates were you put up

obscene and we would abolish it. at the European elections? -- will

you put up? We are not contesting that. It is hypocritical. We

thought you were the anti-party. We do not believe in European

institutions. The anti-party is UKIP. We are not going to go down

that road. We will boycott those. What about council elections? It

depends how fast the party grows. We have been in existence for four

days. You cannot give us some idea We have been in existence for four

of how many parliamentary candidates you hope. As many as

possible. Where is the money coming from? We do not have millionaire

backers yet. I would love as many backers as possible. What we will

probably do is try to follow the Obama campaign and to rip through

social networks and donations. -- and do it through. We're setting up

a website. What chance has he got - between none an zero? It reminds me

of Monty Python's Life of Brian and the Popular Front of Judaea. Alan

was a man ahead of his time. British politics is and has been

fracturing and cities incredibly difficult for the two large parties

- to ever get back to the mid- forties, 48, 49% vote they got in

the 1950s. There is room for new parties, a new political ventures.

I think it would be very tough. So much attention will be focused on

UKIP. The media is desperate to see whether or not they are successful

or whether they blow up spectacular early next year. You mentioned a

figure of 6%. If Nigel Farage does get 6% in the next UK general-

election, that is very significant. It is almost 2 million votes cast a

body huge damage to David Cameron. What we are seeing - what we also

saw was Alan decorin some of the things Caroline Lucas was saying

about the bedroom tax and inequality. -- echoing. There is

another threat and that is to do with the idea of an unequal society.

It is a huge problem for the Government. We are moving towards

economic recovery. What do you do to try to share the proceeds of

growth? Will the new parties be able to start a genuine gap in the

market? The new promise Labour Party has accepted the working

plans of the Tory, Lib Dem government. The thing about

inequality is the top 1% is seen to be getting richer and richer, the

people at the bottom have zero contracts and unpaid internships.

These were the issues for you as much as Europe? Yes.Do not go away

yet. I have to read this and then you can go. You need to get the

hang of this if you are coming back into politics. When the Royal Bank

of Scotland collapsed in October 2008, it had to be bailed out by

you, me, and all British taxpayers. And it played a leading role in

taking the British economy into its deepest downturn since the 1920s.

At the centre of it all was the pantomime banking villain himself,

Fred Goodwin. In a new book, our guest, Iain

Martin, tells the story of Fred the Shred and the collapse of RBS.

We'll discuss it in a moment. First though, let's remind ourselves of

We'll discuss it in a moment. First the trouble Fred got into in front

of the Treasury Select Committee back in 2009. How much worse could

it have been at RBS had he not been in charge? Well, I think I fully

accept my responsibility in the matter. I would imagine there are

others out there who think they are there but for the grace of God. It

was a fact, all the more numbing, after a rights issue - right

through to the middle of September - we were moving forward positively.

It was post Leman Boots that confidence to -- post Lehman that

confidence collapsed. There are lots of banking villains from that

era. We have seen them parading in front of select committees in the

House of Commons. It is the scale that Fred Goodwin operated. The

reason I have focused on RBS particularly, there are other banks

are in the brick, the reason I focused on him particularly is it

was the biggest bank in the world. He said a want us to be bigger than

was the biggest bank in the world. JPMorgan. They got their wish at

precisely the wrong moment. They doubled in size. They went into the

crisis as the biggest bank in the world. The explosion, when it

happened, was obviously enormous. It cost the taxpayer 45 billion at

least to rescue. Hundreds more billions in liquidity and ex Agger

and played a major role in the billions in liquidity and ex Agger

economic crisis that followed. -- in liquidity, etc, and played a

major role. It is thought Fred Goodwin did not realise how bad

things were until it was too late. That is a fair analysis. It is

often forgotten he is not, and was not, a banker. He is an accountant.

He did not going to banking until 1995 when he was poached. Within

five years of that he was running RBS as see either. He has a mission,

which is following on from his predecessor in Scotland to create

the world's best bank, based in Edinburgh. It is a tiny Scottish

institution and will grow to become a world-beating bank. Patters a

perfectly respectable and admirable instinct. -- that is. It gets

completely out of control. He is not a rogue trader. He is not one

banker operating alone and try not to get caught. The crash that

involved RBS was the biggest of the lot. What stunned me, I am not a

financial journalist, I am a political journalist. In terms of

the numbers, I think what is most interesting and what was missed at

the time is the scale of what happened to the British banking

system in terms of its expansion. In 1990, and Margaret Thatcher

leaves office, the UK banking system, its total assets combined

of all the clearing banks, 70% of GDP - a sum equivalent to that. AIG,

30% of GDP. -- by 2005. He bought ABM Amro and the crash came. If the

crash had not come, would he have survived with this incredible

expansion? All we did have caught up with him? It would have caught

up with him eventually cost of the crisis had already started. He

still pushed ahead with it. It is about hubris and monument building.

He was determined to be Barclays. He was very proud of RBS as an

institution and would not be beaten. He had an opportunity to withdraw

and did not - catastrophically. That decision, they did not realise,

that doubled the size of the bank. What was the most surprising thing

you discovered? There is no doubt for all the

mistakes he made, he was the victim after words of a classic British

establishment hit job, in which it suited a lot of people, regulators,

auditors, politicians, to say that it was all about one guy and it was

not. And they rounded on him as the scapegoat. Have you read the book? I

have read some extracts. Who says politics is the only place where

there are psychological flaws? Really extraordinary tics of his

particular character, but it is a very good point. It is the culture

of banking. When Prince William and Prince Harry were doing their stunt,

it is all very jolly and hilarious but actually what happens to £250

billion in one trade is not that funny as it affects the rest of us.

billion in one trade is not that What do you think wins elections?

Manifesto policies, good reviews on the Daily Politics, according to my

next guess, the cancer is the none of the above. Jim Gilliam is an

American software programmer who says he believes political campaigns

need to harness social media. He says British politicians are

learning from the states. Not just good chat on this show. Jim

Gilliam joins us now. It seems to be the lesson of the Barack Obama

campaign was that you needed lots of social media, you needed to use

digital, but you needed boots on the ground as well. Is that true?

Absolutely. Basically it helps you bring that together. Your software.

It is about connecting the online and the off-line together. What the

Barack Obama campaign did really effectively was it took the online

energy, and they really helped all their supporters learn how to tell

their own story and connect it to the campaign, what it was he wanted

to do. Hosting parties and fundraisers locally, knocking on

doors, it came down to people sharing their stories with each

other. So they used the social media to educate the troops into how to

present their candidate to voters? It is quite the opposite of message

discipline, with everybody trying to say the same thing. What they are

trying to do is in power they are supporters to talk about the

campaign from their own personal stories. Everybody had a reason why

they wanted health care. I connecting all that back and

providing the tools and infrastructure, so that now you

don't have to have a lot of resources, it can help everybody,

any campaign that wants to organise people. Have you looked at the

British political party websites? I try not to. They should be in the

British Museum. They are in the dark ages. What is exciting for us is

because the software has been so good, we have had a lot of pick-up.

because the software has been so We are seeing large-scale

roll-outs. We are doing training for conferences coming up. We will start

to see that tide turned quickly. They have a long way to go, don't

they? There is definitely elements of that. There is a lot of software

around, lots of campaigning of this kind going on. What is different

about yours? One big difference is we did not approach it as a

consulting company, but a product company. We bring a Silicon Valley

ethic. It is not about making it available to the top Senate

campaigns, although it works. It is making it broadly accessible to

everybody. As a result it is much easier to use. Did the Lib Dems not

use a version of this? They have always been very good at motivating

the ground troops. Knocking on doors, local organising. It is

really important for them if they are going to hold those seats next

time to get a handle on all these things that can help them retain

that advantage, you have to have the right product to sell. It is very

important they are on the ground organising. They speak about it all

the time but why are British parties so useless about this? Everywhere

else we are plugged into the digital age. There are iPads, twitter,

everything else. Old-fashioned, lack of money. I think the community

engagement side of it is positive. What I find Julius is a lot of this

stuff, having been used so successfully in high finance,

emphasis on computerisation, data mining, all these things when you

transfer them into politics, there is a danger that the candidate does

not need to think about ethics or judgement or ideas or arguments. You

just mine all this information, use a cleverly and get your candidate

just mine all this information, use over the line. -- use it cleverly.

It was tried in high finance, it is now being extended into every area

of our life. Are you going to any of the party conferences? We have staff

at all of them but I am going to have to head home. You are lucky. I

can believe you are doing that with your staff. -- I cannot believe. Now

it is time to look at who has had a good week and who has shocker. --

has had. There were no green shoots as the chancellor visited a building

site to unveil his new catchphrase. Britain is turning a corner. No more

Mr nice Maher at City Hall as Boris Johnson lost his temper. You lied to

the people of London. Get stuffed. The coalition is selling off the

Royal mail. The unions did not exactly give the stamp of approval.

Speaking of unions, look at the rapturous reception they gave Ed

Miliband. We have to have the courage to change. In Strasbourg,

the president of the European commission warned that you respect

ticks bring back war to the continent. -- Eurosceptics. Nigel

Evans announced he was standing down. He says he will sit as an

independent while he faces charges of sexual assault. This is clearly

the most painful thing I have endeared in my life. -- injuried.

Are you going to the party conferences? Absolutely. I am

missing the Lib Dem conference. I have a rule not going to let them

conferences. How could you say that? You will be going. I am. I would

like to go to the others. I think what is going on in the Labour Party

is really fascinating. We have a survey carried out on MPs attending

the Tory conference, 59, 29 word definitely or probably not going. If

they can be bothered, why should anybody else? The Tory conference

has been hollowed out. It is too expensive for activists. It is very

different from what it was 20 years ago. You do not feel you are

encountering real activist or seeing the heart of the party. The Lib Dem

conference I did go to was very different, to the credit. It felt

like proper politics. It could be quite lively this year. C. We had a

quiz at the start of the show when we asked, who was it who called for

the Nick Clegg to be ditched? Miranda was clear who it was. It was

Lord Oakeshott. He has got that on a loop, hasn't he? He has. It pops up

every year at about this time. Can we agree that there is no chance of

the Lib Dems ditching Nick Clegg? I think we can agree about that. There

will be some heated conversations think we can agree about that. There

about various policies. The irony is when the opposition should be

soaring, it is interesting because of Ed Miliband's problems, the

Labour conference. Nick Clegg is in a pretty good place. David Cameron

Labour conference. Nick Clegg is in is resurgent. Ed Miliband has a lot

of questions to answer. That is why you should be going to the Labour

conference. Yes, but he did a damp squib of a speech. He could do

better. Lets hope so. Last year he gave a good speech and he captured

attention. What does he have to say now? If you don't go it will be live

on the Daily Politics. That is it. Thank you to all my guests. I will

be back on BBC One this Sunday for the Sunday politics. It is back. Not

until 1:30pm. I will be speaking to Paddy Ashdown. We will have live

coverage of Vince Cable's speech. Goodbye.