18/11/2013 Daily Politics


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Good afternoon. Welcome to the Daily Politics. Could the Chancellor be


thinking about a big giveaway in the autumn statement? An independent


Scotland faces higher taxes or steeper cuts in public spending


according to the Institute for Fiscal Studies. We'll be talking to


Scotland's Finance Secretary, John Swinney. Happy days for the UK


Independence Party. One of Britain's wealthiest men wants to give the


party an awful lot of dosh. We'll be asking him how much and why? And


should this man ever have become chairman of the Co-Operative Bank.


The Reverend, Paul Flowers, was caught buying crystal meth and crack


cocaine shortly after this appearance in front of MPs.


All that in the next hour, and with us for the first half of the


programme today, is the chief executive of the Royal Society for


Arts, Matthew Taylor. He used to be head of the Number ten Policy Unit,


under Tony Blair's government. So, first to Labour and the two Eds.


Because, according to leaked e-mails, Ed Miliband's team think Ed


Balls is a bit of a nightmare. Do you think they are right? When


people 's jobs overlap with one another, you will get this kind of


tension. It always exists. I do not think you should make too much of


this. It is kind of inevitable. I think there is a bigger problem,


which is the culture which exists within politics. There is an


increasingly weird kind of culture compared with other organisations.


When politicians have problems, they do not do what most organisations


do, which is to create a structure where they think strategically and


create the change process, politicians were within their teams


and they do not share ideas. It is brittle. These e-mails revealed to


us what is always known in that senior politicians have tension. In


a way, it is not relevant. If you are talking about two people at the


top of the leadership structure, on a crucial issue like the economy,


you have to share the same idea. You have to share the idea. You are


trying to give advice to your boss. You want your boss to take your


advice. You are irritated because it is getting in the way of what you


want to achieve. All this friction is inevitable. The way politics


works, the failure to think about issues in depth and work as a team.


When I worked at number ten I desperately argued there should be a


different culture for decision-making policies. You are


involved in the biggest division of all between Tony Blair and Gordon


Brown. In the end, doesn't it damage the product? If Ed Balls does not


obey orders, that is a problem. The Blair, Brown thing was very toxic.


That is an extreme example. Also, a broader question of how it is you


achieve change. The RSA is going through a change process. The team


will spend time together. There are coaches working with us. In politics


it is highly individual. You do not have those kinds of conversations.


We will wait for e-mails to be leaked. Today sees the coalition


trying to work through the tricky old problem of taxation. And it


seems they are spoiling for a scrap. Deputy Prime Minister Nick Clegg


wants to increase the personal allowance threshold to ?10,500


before the next election. It would come at a cost though, ?1 billion.


Nevertheless, George Osborne is said to be smitten with the idea, and it


is thought the Tories next election manifesto might pledge to raise it


even higher. But the influential Tory Free Enterprise Group are not


too keen. They want the Chancellor to do more for the so-called


squeezed middle by ending stamp duty for homes valued under ?500,000. And


some Tory backbenchers say there should be a cut in the headline rate


of taxation, to help increase disposable income. Earlier, Nick


Clegg spoke about this at his monthly press conference. As the


recovery takes hold, it is important that we do all we can to make sure


the largest number of people benefit from that recovery by helping them


retain more of the money that they earn. That is exactly what this idea


is about. It is a workers bonus, in order to make sure that people, as


they face high costs in their weekly and monthly household budgets, also


feels the government is doing more to help them in the way I announced


this weekend. Joining me to discuss is Conservative MP Dominic Raab.


Also by Stephen Tall. Are you against the idea of raising the


personal allowance further? Not in principle. It will do nothing for


the 5 million lowest paid. If you want to do something for them then


brace and national insurance threshold. Two things are vital. --


then raise. We should be prioritising business tax cuts, to


get the economy on track and we should not be forgetting this


squeezed middle. How would you pay for it? As you said, it will cost


about ?1 billion to do. I suspect what will happen is they will look


at the fact that growth is kicking in far higher than was expected at


this point in the recovery and that has given more wiggle room. I


suspect you will see, as the coalition gives up for the general


election, a few more of these sweeteners coming through. Now they


will go on a spending spree. They have talked about economic


management and making sure there was not going to be overspending. You


are saying there is going to be a giveaway. Debt is going up. Would


you tax the wealthy or have additional spending cuts? David


Cameron was saying he wants a mansion tax to be brought in but


that is dead in the water. The idea that austerity has gone away is not


the case. There will be spending cuts across the rest of the


department. There will be bidding process as we get towards the


general election. If it starts anywhere, we will stop at national


insurance. I disagree with the Lib Dems on this. Do you think it will


not help the poorest? Where you have got to the point where ?10,000 is


the rate at which you start paying income tax, the more you raise it,


the less you are helping people below ?10,000. National insurance


equalisation would help to address this. That would be my preference.


Are the Lib Dems behaving like an opposition party? Reaction for the


political class as a whole needs to do something honest about government


spending. Household debts are high. The first priority is economic


recovery. Let's not lose sight of the squeezed middle. That is the


mantra of labour. I am addressing what Gordon Brown did. They may be


saying it is their mantra now but it is not the answer. Is that where you


would concentrate any giveaway? This is a wonderful conversation. The


Liberal Democrats say raising this helps the poor. The Conservatives


are arguing that we should have a tax cut for the middle classes. Most


of the benefit of raising the tax threshold goes to middle income.


Those who do not benefit are over ?100,000. That is not most people 's


account of who you are talking about. The economy is the number one


thing. As I wrote today, I will be freezing interest rates and raising


the small business rate relief because the high street need a shot


in the arm. Secondly, if you look at house prices, the fiscal drought,


the average house is over ?250,000 and that is hit by the 3% rate. If


you want to help the squeezed middle, deal with that. Answer the


question about who it helps more in terms of the squeezed middle. Your


squeezed middle is who? If you are dealing with stamp duty, you need to


look at thresholds. If you are trying to buy buy a home at over


?250,000, they are not the Google which any more. If you can afford a


home of over 500,000, why should tax cuts be concentrated there? -- rich


any more. I am not against raising national insurance. We can only talk


about tax sweeteners if we are serious about government spending.


No other party is doing that. Mark Carney has said recovery is taking


hold. They are focusing on the cost of living crisis. It seems we have


moved into week help other tics. Which party can promise more things


to the electorate? -- retail politics. We still have a debt and


it is growing. In Birmingham they are talking about reducing the


number of people who work for the local authority. Politicians are


making promises left, right and centre and austerity will really


start to kick in in the next few months. This debate is very odd.


Doesn't it mean we should talk about spending? Do you think talking about


spending at all is irresponsible. Certainly not. Even when the debt is


spiralling? The Lib Dems would be one of the few parties not to say we


would ring fence NHS spending, precisely because we thought all


public spending would have to be looked at in the round. I do just


want to pick up on this point. Tax cuts do not help the low paid. I do


not agree with that at all. Too many of the lowest paid have been taken


out of tax altogether. That is a good thing. It's incentive rises


people to get back into work. If you raise the tax threshold, the bottom


earners do not get anything from it. Those people on tax credits will


lose the benefit. There are various other concessions you get, you will


lose those. Raising the tax threshold will not help the bottom


quarter. The Liberal Democrats use this policy as a way of saying, they


are wanting to help the pool. What you say to that? You just said it


does. The minimum wage is ?12,000 a year. You will be paying income tax


directly. The lowest paid on minimum wage are having to pay back in tax.


If you make sure that those on minimum wage do not pay income tax,


only 10% of that cut goes to the poorest. It needs to be properly


costed and the economy needs to be put first. I've found ?30 billion of


savings by funding the various Whitehall departments. I would


freeze non-pensionable welfare benefits. That would leave 6 billion


over to pay off the deficit. Do you agree with those proposals and those


cuts? Having only had five seconds to study that information, everyone


looks for efficiency savings. They are harder to deliver. I have set


out in a long report. Halve the number of government departments.


Would it reap the number you are talking about? I do not think I can


be accused of trying to rigourously cost what I am doing. Isn't this


just about the politics? The Liberal Democrats and Nick Clegg are trying


to claim they are champions of the low paid. It is an audacious attempt


to grab the mantle of economic management at this point in the


cycle. The Lib Dems were the only party that went into the 2010


election promising tax cuts for the low paid. The Conservatives say it


is their policy as well. What Nick Clegg is worried about is that


George Osborne will steal that. It is a pre-emptive move to try to make


sure whatever tax cuts are offered in the next budget, they are owned


by the Lib Dems. He wants credit for something that George Osborne is


jumping on the bandwagon about. We want ideas to reduce the overall tax


burden. Is Dominik right? Bleeding into this next election, the cost of


living crisis continues and that hits the squeezed middle, the sort


of policies he is suggesting will be boat winners. We have seen from the


revival of Ed Miliband, this issue of living standards and being seen


to do something about it strikes a chord. There is genuinely an issue


about living standards. We talk about symptoms. We do not talk about


the structural causes of the fact that British economy is not


generating jobs which pay people the amount of money they want for a


decent life. We're not talking about structural aspects of it. The second


we get a bit of economic growth, a bit of this school room, we are back


into throwing policies around. -- fiscal wiggle room. We are trying to


look at the economic fundamentals. The problem is, for Labour and the


Liberal Democrats, they will be offering the same array of tax


sweeteners that they will not be addressing the knock-on effect on


competitiveness which is what Matthew is fretting about so much.


I may not agree with the specific package, but if you need things to


be directed towards a specific economy, absolutely that is what we


need to be doing. Gentlemen, thank you.


There has been lots of arguing over the financial implications of an


independent Scotland, and that will continue. Both sides claim the upper


hand. Today, respected independent think tank, the Institute for Fiscal


Studies, published their report, and I asked Carl Emmerson what he


thought the impact would be. The UK as a whole faces a significant


fiscal challenge because of a loss of oil revenue and an ageing


population. Even under the most optimistic


scenario we consider, that challenge for Scotland will be greater because


oil revenues are more important to Scotland and the Scottish population


is ageing faster than that of the rest of the UK. So what will that


mean financially for the average Scot? What it means is that for the


UK as a whole, we could expect some tax rises or spending cuts over the


next 50 years, averaging about 0.8% of what the UK economy produces in


any one year. Under the most optimistic scenario for Scotland,


that number would be more like 2% of national income, significantly


greater. Your figures have been dismissed, surprise, surprise, by


the Scottish government to claim that Scots claim -- pay more in tax


per head than the rest of the UK. It is true at the moment, but that is


entirely explained by all revenue. Over the next 50 years is that


disappears, that would go in Scotland would be left with a higher


level of expending that they currently enjoy but without the


higher level of tax revenue that they currently generate. In terms of


spending, the Scottish government will argue that they would make


different decisions to compensate for any loss of oil revenue. Is that


a sustainable argument? Certainly an independent Scotland could do a


better job than the current UK Government does in setting tax


policy. You could make a difference as do things better. What is highly


unlikely is that you could do enough better things to generate enough


growth to offset this fiscal challenge. Even the most optimistic


scenario suggests that the challenge for Scotland will be far greater


than the challenge the rest of the UK would face. So an independent


Scotland would have to increase taxes further, or lose some of those


public spending commitments that they have had over the last few


years? Over the longer term, we can expect some combination of tax rises


or spending cuts for the whole of the UK. What I'm saying is that


those would be eager in Scotland, so yes, some combination of tax rises


or spending cuts would look likely. Public spending is high in Scotland,


so they could suffer disproportionately if they have to


cut those public spending commitments. Scotland could look


different than it does now. It could, and in terms of defence or


aid, Scotland will be inheriting a fairly high burden, so they could


cut those. They could cut social housing, transport, economic


development, where they spend a lot more than the rest of the UK.


Will the Scots have to payback for their extremely level of spending on


public services if they gain independence? They will have to


finance that level of spending themselves. Over the longer term in


the UK, it is conceivable that the higher spending is maintained and


financed by the UK Government. Scotland is independent, that option


wouldn't be there, so they would have to choose what level of tax and


spending they wanted. What they couldn't do is have higher levels of


spending without higher levels of tax. Is it difficult to exactly


predict Scotland's economic future because of the variables like oil


revenue? We don't know what exactly is going to happen to it or how


quickly it will diminish, and also the level of debt that Scotland


would inherit. Certainly the fiscal position that Scotland has over the


longer term is very sensitive to exactly how and when oil revenues


decline. We would consider a range of scenarios, the most optimistic


where we say that supposed Scotland gets half the debt that the UK has


an all revenue is follow the higher level as predicted by the Scottish


government for the next few years, even under that more optimistic


scenario, it still looks fiscal challenge that is considerably


greater than that facing the rest of the UK. Carl Emmerson from the


Institute for Fiscal Studies. I had hoped to be joined by John Swinney,


Scottish finance secretary, but he can't make it, unfortunately. But


Matthew Taylor is still here. What you make of the ISS report? I guess


it is bad news, because the ISS is an incredibly trusted organisation.


They won't be swayed by headline chasing. This will be pretty


authoritative. Whether it makes that much difference to the consideration


of the outcome of the referendum, I'm not sure. Either the argument


about a wonderful bonanza in streets running with Golden hurricane honey


-- gold and honey, or a more realistic argument, I think at the


moment people are unlikely to vote yes for independence because the


benefits are not clear. That is the point. It is about whether they will


be worse or better off with independents financially in terms of


literally the amount of money they will be left within their pockets.


If there is this idea that I could better off under independence,


surely that will sway voters? I'm not sure it will. There are so many


imponderables in all of this, it is a matter of faith. Most people in


Scotland have a fairly settled view on this issue and are not going to


be swayed by an argument saying it will cost ?500 here or there. If you


go to Scotland and spend time there, it does not feel like a country that


is under the oppression of the UK. My sense is that in Scotland, what


will they actually gain from this? The problem is more fundamental,


what you gain from independence? That is what is not clear. That is


what John Swinney will be setting out. He will say that Scotland may


have missed out on economic growth worth more than ?900 a head as a


result of not being an independent country, he will say that the


coalition government has been dreadful for Scotland and it would


be better to go alone. Once that argument holds some weight? I feel


great sympathy for having to wade through all this for the next year


or so, but the Scottish people will hear, it will save you ?900, it will


cost you ?600. I think people will realise it won't lead to any Big


Bang either way. See you think that when it comes down to it, it will be


an emotional decision, that the money would persuade enough people?


Unless there is a really powerful sense of what you gain from


independence, in the end, people will say, if there is no really big


gain or loss, why would we change it? It doesn't feel when you go to


Scotland at the moment that this is a country which is having itself


dramatically constrained by being part of the UK. In many ways, it has


a very dynamic economy, lots of parts of Scotland do extremely well.


If you are going to make a big change like this, you have to feel


that you are going to get a big gain, and that argument has not been


articulated. We will leave that to the SNP when we speak to them.


Last week saw the return of that's biggest annual skills event, the


skills show. Our apprenticeships working for Britain's youngsters?


David Thompson went along to find out.


If they let you try your hand at a whole lot of jobs when I was at


school, things might have been very different. Welcome to Britain's


biggest careers event, where you can try your hand at everything from


baking to welding. It is called the Skills Show, and it might change


your life. More than 850,000 people are on


apprenticeships, and one of the stars of Dragons' Den is in. All of


my business is run apprenticeship schemes, because taking somebody on


with a passion and desire for the industry they is far more important


to me than finding out that somebody can spend three years at university


getting a degree that might not be relevant and then have to catch up


with every body else. Earning while you are learning has got to be the


way forward. For ministers, these kinds of shows are a win-win thing.


There are a record number of jobs in this country, and we have got to


make sure that our young people have the skills that they need to take up


those jobs. But while the coalition is keen on boosting both the


quantity and quality of apprenticeships, the number of


16-year-olds taking them up has fallen. We had to remove some low


quality provision. There were some apprentices that didn't have jobs in


the past, and I think every apprenticeship must be a job. We


also need to make sure that every apprenticeship as a minimum of one


year in duration, and that wasn't true in the past. We have had to


remove some low quality providers, but that trend is now reversing, and


various a broad plan of action to make sure that the numbers go up as


well as that increase in quality. And if you stick at it, who knows


where an apprenticeship might take you? I started as an assistant to


the tea boy in Lloyd's of London, and found my passion working in a


shop. I got all my skills learning on the job. I had no formal


education, so my apprenticeship was being a junior shop assistant all


the way through. Apprenticeships might seem a bit retro, but


increasingly these days, they are seen as an idea whose time has come,


a solid way into the world of work. I think I will stick to my day job.


Over 1.5 million new apprenticeships have begun under this government. It


should be congratulated, shouldn't it? I think they should. And the


apprenticeships, although lots of bits of the policy haven't worked


terribly well, and we found out that most apprenticeships are being taken


up by people who are over 25 and already have a job, generally


speaking, since the late 80s, early 90s, as a country, we have taken it


seriously. In our meandering route, and there are interesting things


below the surface... There is some evidence that parents are beginning


to recognise that apprenticeship might be a good route, and it is not


always a second prize to going to university. I think it will take is


another generation to get to where we need to get to. But that culture


of university being the great Annecy, that was Labour 's fault.


They wanted to target 50% of people to go to university, and they made


it seem it was the best option. I think Labour felt that the answer to


the issue of social mobility was to make it possible for more working


class and lower middle-class young people to get into higher education,


which is commendable. But the problem is that misses at the whole


vocational route, and Britain has been worrying about how to get


people to take vocational education seriously for decade. Apprenticeship


is a step forward, and we still have to look at what we teach children in


schools, and there is still a strong bias towards the academic in


schools, and there isn't a strong enough lead into apprenticeships.


There are various things that can improve the system such as technical


colleges, but most schools think that what matters is pushing


children through academic exams. And careers advisers collapsed in


schools, so young people who need really good advice at 13 and 14,


face-to-face advice that will encourage them not to take an


unsuccessful academic route, that is the problem. If combined together,


is there the crucial issue, a job? In that film, the Minister that


talked about poor providers in the past. You accept that getting rid of


some of the poor provision and making sure that apprenticeships


have a guarantee of a job at the end might improve the quality of


apprenticeships? Employers need to buy what is needed. We need a strong


relationship between employers and schools and much more work


experience. Employers need to be more engaged in developing what


children learn in schools. There are lots of bits to this jigsaw.


Expanding apprenticeships is part of it but only a part of it. What will


bring the employers on board? Not the big employers. In places like


Germany, employers are much more involved at a gang age in schools.


What will bring them in? -- a younger age. You need a simple


system. It needs to be at Minister of -- it needs to be simple. The


language that is taught in schools, what schools feel their job is about


does not really engage employers. A lot of employers think that what is


taught to young people is not what is needed. It is about a broader set


of life skills, capacity to work in a team and communicate. Employers


say they are not getting that from young people. Young people turn up


with a sheet of qualifications that cannot make eye contact. Another


overhaul of the education system will not be welcomed. Ed Miliband


has talked about a higher level vocational qualification. He said


this is for the bottom 15%. As long as people think that is for the


bottom 15%, it is not good. It is in our British DNA about taking


vocational education seriously. There are some signs of change but


there is a long way to go. Now for a look at the week ahead. Later today,


Labour launches its strategy on childcare, they want the banks to


pay for extended free childcare for three and four-year-olds. Cameron is


also making a statement to MPs on the outcome from the Commonwealth


Heads of Government Meeting. Wednesday is Prime Minister's


Questions and we'll also be seeing the TUC's national day of action


against the use of blacklisting. The unions are unhappy that construction


companies who have blacklisted workers have still not been held


accountable. And the European Union Referendum Bill returns once again


to the Commons for the second day of its second reading today. This,


you'll remember, is the Private Members Bill, launched by


Conservative MP James Wharton. Joining us now is James Lyons from


the Mirror and Isabel Hardman from the Spectator. Isabel, it seems the


fight is on in the coalition over which party will prove the most


popular at tax cutting. There is unity at the top of the coalition


over raising the personal allowance. The Tories have said they wanted it


and Nick Clegg has said he wants to do it. Backbenchers are saying, are


be really sure this is what we want to do? Is it not better to focus on


families who may be affected by the fiscal drought. At the top they are


arguing over who takes credit for the policy but colleagues are


questioning over whether this is the right thing. So, this is about


claiming credit as the economy starts to grow and Liberal Democrats


do not want to be forgotten as the ones they claimed talking about tax


threshold. Is it about thinking ahead to the Autumn statement and


the fact there might be some giveaways? There has been better


economic news. That creates problems for George Osborne. It raises


expectations amongst his inside and what they might see out of this


statement. Isabel is not sure what will be given away. Most people want


to see that but they want to see other things as well. They want to


see higher thresholds go up and various other ideas. It is all


mounting up on the desk of George of Bourne. Demands are coming thick and


fast. The other problem -- George Osborne. Demands are coming thick


and fast. It will damage the election strategy. George Osborne


and David Cameron want to fight a rerun of the 1992 election and tried


to scare voters to death about consequences of the Labour


government. What happened about posterity and holding on to death


about consequences of the Labour government. What happened about


posterity and holding onto the purse we have got this growth. The


Conservatives do still have the opportunity to say, it is not a done


deal. We are not back to the years of prosperity yet. Stick with us and


we will finish the job. They have said, voting for Labour is a boat


for wrecking the recovery. They still have a strong message to


communicate. They have talked about the cost of living and you have


occupied that space. With Mark Carney saying the recovery is


finally taking hold, what is Labour 's answer to growth? We would have


got this a lot earlier had it not been for the coalition argument. It


will be about the old chestnut we used to hear a lot about, sharing


the proceeds of growth. This is what is interesting. The Lib Dems are


trying to outflank the Tories about what they can do for families,


partly in response to the way Ed Miliband set the agenda with the


energy price freeze. The Tories are all over the shop. They have a


completely confused message. Last week, David Cameron said he wanted a


leaner, meaner, fitter state going forward. No one wants the old days


of tax rises to pay for spending. You have a long list of expensive


demands. The coalition has managed that money for free school dinners


and marriage tax breaks. On Friday, the EU Referendum Bill makes it back


into the House of Commons. There has been a project to look at the


different clever procedures you can use to make this path into an act.


The chance of it surviving the house of lords certainly are very slim.


There was a big threat about bringing the referendum forward from


2017 towards -- to 2014. They are much more interested in what David


Cameron wants. They are worried he does not have a slimmer view of a


reformed Europe as they do. -- as slim a view. Welcome to our guests.


Let's talk about UKIP. The party has received a massive boost from Paul


Sykes, who has pledged to do whatever it takes to help the party


went next year 's European elections. He previously supported


the Conservative Party under Margaret Thatcher and Michael


Howard. He backed UKIP in 2004. He joins us from our central London


studio. Welcome to you. You say you will do whatever it takes to help


UKIP when the elections next year. How much will it take? You have a


limit of 4.5 million for the European elections. The limit spells


it out. We will be spending within the law of the land. What we want


that money to do? We want a massive awareness campaign. The British


people are almost totally aware of the power that has been transferred


to Brussels. They are asking questions about what is happening to


borders. They are not kept in the circuit. It seems to be people in


Britain, especially politicians, do not want to give the British people


the opportunity to see what it is all about. We have been holding


opinion polls up and down the country. In Yorkshire, two thirds of


Yorkshire people do not want the borders taking down on 1st of


January. Are you a member of UKIP? No. I am not a member of any party.


Will you pledged to support UKIP for the general election or is this just


about the European election? -- pledge. It is all about the European


election. You could support the Tories in the general election. I do


not vote for political parties. I am campaigning for information to be


put to the British people so they know where we have got with the EU


situation. You have made it clear about your views. Let's say UKIP


topped the poll, what will you do then? If you feel so passionately


about your messaging to the British electorate, what will you do post


European elections? We will see what happens. We have no idea. I have


only one target and that is to win the European elections. I know then


we will allow other nation states within Europe to take on our


particular model. They are trying to get democracy back and control


economies of known countries. We intervened in the euro. Everyone


sees that as a bad idea. The campaign to not abolish the pound


and not go into the euro. We won on that and now it is the bigger


picture. What about the promise by David Cameron to the Electric to


renegotiate the relationship with the EU and reform it in a way which


would be beneficial to Britain and be better to stay in? -- the


electorate. A man who wants to negotiate it wants to stay in any


way. You would have to break the treaties to start negotiating. This


is growing power from Brussels. That is the way it is. The law states,


you had to say straightforwardly, we wish to leave and then start


negotiations. You cannot start negotiations still being a member.


It is still about the party holding a referendum. David Cameron may be


nowhere in sight by 2017. Thank you very much. I'm going to have to put


some of those points to you, Simon Hart. It is a massive blow to you.


It will help UKIP topped the poll. I would not describe it as a blow. He


described it as the only election he stands a chance of winning. The


greatest prospect for UKIP, I am afraid, next year or the year after,


is the returning Labour government. That is what they are hoping to


achieve will stop that is our problem. We have to persuade people.


What we have on offer is that it strikes the right balance. Those


people with concerns over Europe had a huge economic interest in staying


in. Do you think the Conservative Party has insulted some of its


grassroots? I do take that view. We should look at every person who


decides to drift away from our camp as a failure on our part. Not a


failure on their part. We have not made those cases. There is no point


about talking about UKIP voters or sympathisers in a derogatory way. We


need to prove we are trustworthy, confident and relevant. If we can do


that, Mr Sykes and be back on our team if he so wishes. That is what


will happen. Let's see the state of the national parties after the


elections. He will give his party to the Conservatives and that will be


the election that counts. He has not said he will do that. I would like


to thank him for his long-term commitment to the freedom and


independence of this country. I must challenge this point, we are talking


about this whole debate as though it were about UKIP taking votes from


the Tories. I was up at the Northeast conference in the South


Shields constituency on Saturday. We had 300 people there. It was bigger


than some of our national conferences. It is Labour


heartland. I campaigned in Rotherham, where we came second. Our


story on education did extremely well on the Labour doorsteps. We are


a common-sense party. Are you still keen on the idea of labour


apologising for what UKIP claim was an open door policy on immigration,


awkward labour be talking about the benefits of immigration? We didn't


get everything right, and we have been clear that the transitional


arrangements should have been extended for longer. But whatever


Roger says, UKIP are a threat to the Tory party. It is a failure of


politicians rather than a failure of voters if they drift away to other


parties. But at the same time, I represent Sunderland, and thousands


of people depend on jobs at the factory there, and we have been very


clear that all of this talk about our future in Europe puts jobs and


investment at risk. And business people have been saying it is a


threat. At a time when Ford have just removed their van operations to


Turkey, it is very difficult for anyone, Nissan or Toyota, to make


the case that being outside the EU creates a problem. China exports to


Europe, America does, there are free-trade agreements with Korea,


one in the pipeline for India. When we leave the European Union, we will


have a free-trade agreement from day one, and it will be as easy to


export cars from Britain to Europe as it is today. You say that, and we


haven't got a time to talk about the possible a tea of tariffs that will


be placed on countries that are already outside the EU. They pay all


of the costs of being within a free-trade area of the EU but get


none of the benefits of sitting at the table. That me just ask the


question first of all about expectation management in the


European elections. It is factored in that you are likely to top the


poll. But if you don't, it will be a disaster, won't it? That is why we


are working hard to make sure we do, and we are grateful to Paul Sykes


for his help. You think that will clinch it for you? I think that will


make a difference. Obviously if you have more money you will do better.


So is it going their way? There are two parties with a very clear


positions. UKIP are clearly very against Europe, and the Liberal


Democrats are very clear that we should stay in. I think the donors


are obviously as confused as voters when it comes to Labour and the


Conservatives, because they are both try to sound Euro-sceptic but know


that we should stay in. Is your party confused? I think we are the


party with a referendum on the table, and we are united behind it.


This is as close as we has ever been to actually be able to give the


choice to voters. It seems to me that that is actually a major step


forward and a pretty united opposition. We know that people will


have a choice. You spend most of last week tried to stop this


happening and talk it out. You have been trying to talk at the bill


since it first came in. We spent most of the time in the last time at


the European Union for a Conservative amendment on Gibraltar,


because Gibraltar was left out of the bill. And it is your side who


has actually propose one of the more serious amendments to the Bill. But


the truth is, arguing about the menu Shi'ite of referendums is not the


big issue. -- arguing about the finer points. Because of jobs, the


environment, fighting crime, we need to be in. The conservative argument


is absolutely clear that that is a choice that voters should take. It


is not up to me. We Mac but do you want to be in or out? In or out? In


or out? I don't buy the idea that they have to be on one side of the


other. You have three old parties that all want to stay in, and one


party that wants to get out. And that is why Paul Sykes was right


when he said that this European election next year will be a


referendum. The choice for the people is that you can vote for the


old parties if you want to stay in Europe and vote for UKIP if you want


to get out. And what happens after that? We will have change the


agenda. You think all of a sudden the other parties will want to have


a referendum? I conceive example Labour offering a referendum. I'm


not sure whether these guys will. Very briefly, because I want to move


on. You did very well at last you's European elections, and it didn't


change of anal. -- it wouldn't change anything. Let's talk about


the countryside. Simon Hart, you are a former chief executive of the


countryside Alliance. Support has dropped by 20% in just a couple of


years. It goes back to what we were saying earlier on. We have to take


it seriously, any party who are losing some of its core voters...


But why are they being lost? I think it is an exasperation, an


exasperation of being in a coalition, that no one ever quite


gets what they want when they want or how they want it. Voters have


stuck by party leaders for quite a long time, and I think there is this


feeling that it is a case of, what have the Romans ever done for me?


When you draw up the list, there aren't as many things on it is


people perhaps expect there to be. So there is this feeling of


uneasiness. I don't think it is terminal. We have to persuade people


to come back and we will do that in the next election. But it would be


crazy to assume that the role vote is in the bag. It is a case of, do


not take them for granted. We will leave it there.


Paul Flowers, former chairman of the corporative bank, has been caught on


camera by the Mail on Sunday apparently trying to buy cocaine and


crystal meth. He has released a statement apologising for his


actions, and saying that during an incredibly difficult year, he did


things that were stupid and wrong. The recording was allegedly made


three days after he feared in front of the Treasury select committee to


answer questions about his stewardship of the bank. During that


session, he seems to have little grasp of some of the most basic


aspect of the bank's asset and balance sheet. Healy is being


questioned by Andrew Tyrie, chair of the select committee. It is the core


asset of a bank. And you don't know what that figure is, even roughly? I


cannot give you that figure at the moment, but I can come back to you


with a notice that would be helpful. Your total assets for June last year


are listed at 47 million. Sorry 47 billion. Just to give you an idea.


You offering me 3 billion, and I am telling you that your annual


accounts show it at 47 billion. Forgive me. And your loan book is


about 32 billion. These are very basic numbers for the chairman of


the bank. Andrew Tyrie interrogating Mr


Flowers. It didn't go very well, did it, in the select committee? How did


Paul Flowers, somebody was no banking experience, get to be


chairman of the bank? I think clearly the evidence we saw of what


has happened in the press over the weekend, Mr Flowers has made a


number of quite serious personal mistakes, and is in an difficult


position personally, going through some difficulties in his life, and


that is very sad. But the Treasury select committee should be allowed


to look at what went on at the Co-op, because we can't see those


mistakes happen again. You are talking about the allegations of


drug use, and I'm sure that we also should talk about her summary like


him, who was basically a politician, who rose through the ranks of the


corporative movement because of the unusual structure of the corporative


anchor, was it right that somebody like him, drug allegations aside,


somebody was no direct experience of banking, should reach the dizzy


heights of chairmanship of a bank? The Treasury select committee will


get to the bottom of this. What do you think? I think there are


concerns in terms of his appearance that he didn't have the grasp of the


figures or to be on top of what happened, and there has been an


attempt within the current leadership and within the previous


leadership to look around and cast blame as to what went wrong. There


was regulatory oversight. Perhaps something went wrong there. But I


think it is right that the Co-op is now not in a position to have to


rely on the taxpayer to bail it out. It is a very sad state of affairs


that the Co-op bank will not exist in the form that it has previously


existed. Because it used to be an ethical bank. Can you tell us a


little about how it works? The links that we have with the bank are part


of it but separate, and a separate ongoing financial concern. Labour


and the corporative bank have worked together for a long time, we have


shared candidates with the party and many areas. We campaign on issues


that matter and we have a good relationship. So this must be hugely


embarrassing. If you are a Labour MP sponsored or supported by the


cooperative movement, how embarrassing is this? I am a member


of the corporative party. And I am proud to be. We do great campaigning


work on issues around cost of living, public services, concerns


that people have around what matters to them. But in terms of the work of


the bank, and it is a big disappointment to many of our


customers, this needs to be put on a stable footing. The cooperative bank


has to be there to look after its customers, and this needs to be got


right for next time is that it doesn't happen again. I'm sure that


they will be looking at people going up through the ranks. His


appointment had to be sanctioned by the FSA. How did that happen? How


did they rubber-stamp that? There are regulatory issues here. I'm a


big supporter of alternative forms of ownership, and there are plenty


of successful examples such as nationwide, the Halifax and others,


who maintain a common ownership model and do well. But there are


issues around when you stop having effective financial management and


the requirements, particularly on a chairman of a bank, but I think you


would expect it to institution, however it is owned and run. And in


terms of financial contributions, they will go down, to Labour? I


think that point is the right one. The banks with larger management to


similar troubles, and of course this has to be right, but there is a


difference between the corporative party into the corporative bank. The


Labour Party has ongoing financial commit with the bank which is not


the same as the party. It is not just about the chairmanship of the


party, either stop the Co-op bank will now be part owned by the


thriving hedge fund is in America, and there is an argument about


whether it is still a corporative. Yellow this guy should never have


been in charge of a bank,. It is a failure of the regulatory system,


not a failure of that bank. And more embarrassment on banking


regulation? It was described on the radio this morning as jaw-dropping


lea incompetent. And just recently, the Government were encouraging


Lloyds bank to take over corporative branches. Thank you to all of my


guests. I will be back tomorrow. Goodbye.


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