17/01/2014 Daily Politics


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Afternoon, folks - welcome to The Daily Politics. Our top story today


- Ed Miliband promises a day of reckoning for Britain's big five


banks, if Labour wins the next election. Speaking in the last hour,


Mr Miliband said they should be broken up. George Osborne says he


wants the minimum wage to rise to ?7 an hour after the next election.


That would take it back to the value it was in real terms in 2004.


William Hague travels to Glasgow to make the case against Scottish


independence. We'll talk to both sides of the referendum, after an


intensive week of campaigning on debt, tuition fees and childcare.


And as EU leaders lay into David Cameron's idea of capping migration


from other European countries, we'll bring you the latest news from the


European Parliament in Strasbourg. All that in the next hour. And with


us for the next half an hour is the deputy political editor of the


Financial Times, Beth Rigby. Welcome to The Daily Politics. Let's start


with George Osborne's announcement that he'd like to see the minimum


wage rise to ?7 an hour after the next election. It would be an above


inflation rise, which would take it back to its 2004 value. You get a


feeling that in terms of the politics of this, it is George


Osborne's energy price freeze, just as that was a political move by Mr


Miliband, this is a political move by the Chancellor? This is pure


politics. He took a swipe at Ed Miliband the night before he was to


give his big economy speech. He nicked a policy from the Lib Dems,


and effectively, Vince Cable announced this policy back in set


amber, that the Government wanted the Low Pay Commission to look at


above inflation rises in the minimum wage for several years. So it is not


essentially new. And then also, for full measure, he took a little swipe


at Iain Duncan Smith when he said that it would be revenue no,.


There's lots of people said the minimum wage rise would cut the


welfare bill. He said, it will not. So, he actually did three in one. It


is quite good politics. They are worried, though, behind-the-scenes,


that it sets a precedent, in that the minimum wage, since it was


introduced, has basically been set by the Low Pay Commission, without


political interference. And here you have the Labour government, which


invented the minimum wage, opposed by the Tories at the time, but a


Tory government not only interfering in the process, but indicating to


the Low Pay Commission, you should put it up a bit. The Chancellor,


although he grabbed the headlines today, he was very careful to say,


it has to be a matter for the Low Pay Commission. But he has left


everybody in no doubt what he wants. The reason for this is that


they know that they have a problem with blue-collar voters. They are


still seen as the party of the rich, and what better way to say, we


would really like an increase in the minimum wage? He can see that the


Low Pay Commission might find reasons to increase it, and then, if


that does happen, he can claim the plaudits. It is brilliant. But in


all seriousness, I was looking through some of the responses from


business, and the small business Federation said, look, somebody with


nine employees, this will add nine grand to their wage bill,


potentially, before tax. So businesses are saying, we do not


mind increasing wages, the locking with the employment market. That is


the job of the Low Pay Commission to decide that, so it is not a done


deal. It is not a problem for the big companies. Watch out for when he


gives out a national insurance cut. He is a very political Chancellor.


Now it's time for our Daily Quiz. David Cameron spoke at a new annual


dinner for Westminster journalists last night. He gave what was


described by one hack as a "gag-packed" speech. But what did he


say was his number one priority for the year ahead? Was it...? To knock


UKIP into last place at the European elections? To avoid being


photographed getting changed on the beach? To keep his bald spot hidden?


Or to be best friends with Ed Balls? And a bit later in the show, Beth


will give us the correct answer. Do you know the correct answer? I was


there, and I am struggling Dawn at was it a good night, was the speech


funny? It was very funny. It was a bit risky. Some of his advisers said


to me that he was a bit nervous that he might have gone over the edge.


But he was very funny. Banks in Britain will face a "day of


reckoning" after the next election - if Labour wins a majority. That's


the message from Ed Miliband, who in the last hour has been making a


heavily-trailed speech about the economy. Here's some of what he had


to say. I believe that committing now to


such an in-out referendum has big costs for Britain. Why is this not


the sensible judgment for Britain? It is a really important point. Lord


has a time putted really well. He said, we are committing to a


referendum on a negotiation which has not yet begun, on a timescale


which is uncertain, with an outcome which is unknown, and that is an


unnecessary gamble for our country. Although that was Ed Miliband, it


was not the clip about his banking speech. That was actually another


quiz, those of you who spotted that. Anyway, moving on. With us now is


Labour's Shadow Business Secretary, Chuka Umunna. A Labour government


would fix energy prices, confiscate land from developers and determine


how many branches a bank should have, so who says planned economies


do not work? These are a small number of sectors which have not


been operating in as competitive and fair a fashion as we would like. If


you are serious about reforming your economy, you have got to deal with


those. Today, we are talking about banking just the reason this matters


is because, yes, we have got the biggest cost of living crisis in a


generation, which has depressed people's wages, but also, in the


labour market, we do not have enough middle-income jobs. It is small and


medium-sized businesses which drive that, but they cannot get access to


the credit they need. That is why we want to ensure that the banking


system is more competitive. You say that as if we are the only ones


talking about the need for banking reform. I think there is a degree of


consensus that we have got to reform the banks and we need more


competition. The question is, how you do that? It is a massive U-turn


from Labour. You are having to undo all the work you did when you were


in power. It was the Labour government which was cheerleading


RBS to an ever greater size, giving its chief executive a knighthood,


and it was labour that force-fed the merger between Lloyds and HBOS. You


are now having to undo all of that. Well, what we have said... Is that


right? If you will let me finish. We did not get everything right on the


banks, we have been clear about that. But what Ed Miliband said


today, he was quite clear, this is not a problem which started in 2010,


it has gone back several decades. In respect of the HBOS-Lloyds merger,


that was done in an emergency to prevent collapse. Do you accept that


that was wrong? I would not say that if I was in Alistair Darling? Shoes


at the time, I would have made a different decision. He was the


Chancellor at the time. But it was not him that did it. If you read his


incredibly good autobiography, you will see... I have read it twice.


You are going on about the size of banks, but they got too big under


you. It was government action producing bigger banks under a


Labour government. Do you accept that that was the wrong thing to do,


and you are now having to undo that? I have already said, just a moment


ago, that we did not get everything right on the banks. There were


consolidation is which happened during our time but there were lots


which happened beforehand as well. The question is, what to do now? We


are seeking to ensure that we move away from a situation where we have


got basically, lending to almost 5 million businesses, dominated by


five banks. We have got one of the most concentrated banking systems in


the world. It is not more concentrated than the French banking


system, it is on a par with the Canadian banking system, with regard


to concentration, which is the most stable... I am talking about cars.


You just said we had one of the most concentrated banking systems in the


world. I did not say those systems were perfect. We want to have more


competition, so we can create the kind of jobs we need. One comment


you made in the opening to this was that this was just a speech about


banking. Actually, of course, that was the focus, but what we are


talking about here is how actually we renew our economy. Tanking is one


of those things, but over the next few months, you are going to see us


setting out how we intend to reform the economy. -- banking. I am just


dividing a bit of context. I understand that. Why do you think


that simply because government decrees that branches should be


digested and new branches set up, that that automatically happens?


Politicians have been trying this for years, after all. You and the


Tories wanted to sell off the Lloyds branches, they have not been able to


do that. They have had to put them into a subsidiary. RBS was told to


sell off some branches, they have not been able to do it. Just because


politicians say something does not make it happen. No, but we are


involving the Competition And Markets Authority in this. We are


asking them to provide a legal threshold for market share. You


mentioned, for example, you're right, the divestitures, now, ,


originally those failed. I think it is a really good thing that TSB will


be floated, but it has only got about 2% of the SME lending market,


for example. But the point is, it has been really difficult,


politicians have mandated these branches should be sold off, and you


lead it, with the Co-op, and that would not exactly work. It is not


easy the challenger banks, they are not queueing up to buy these


branches. We are not claiming that it is going to be easy. I have


worked on large transactions and restructurings before I was elected,


and these are context things. We have said we will ask the


Competition And Markets Authority, which is to be set up in April, to


look at this. You are asking me about the detail. We are asking them


to set out a timetable for the market share is to come into effect


by the end of the parliament. That will take some time. What will the


judgment of market share be? Whether or not it produces Morecambe


edition. But how you judge market share, will it be by number of


branches or number of customers? It will be by reference to the number


of personal current accounts, and also the small business market. So,


if I am successful in lending a lot to small business, and getting a lot


of current account customers, you will cut me down to size? The new


authority will determine how that will work. We are asking them to


report on that. By what possible means do you think the challenger


banks will lend more to SMEs? Actually, it will create more


competition in the marketplace. But why would they lend more? Please let


me finish my answer to your question. There is consensus among


the commissions and the Treasury select committee, or have said that


having alternative banks in the market will help make sure that we


get better service. But why? At the moment, if you are turned down for a


loan, there is very little choice for you to go elsewhere. At the


moment, we know that about a -- a third of loan obligations are turned


down. We know from many business organisations that you have got


profitable, responsible business is being turned down for loans. Get me


tell you something about challenger banks. By definition they have small


balance sheets. Lending to small and medium-sized enterprises is the


riskiest of all lending that banks can do, so how could challenger


banks lend substantial sums to small and medium businesses on small


balance sheets, against a very risky investments?


We know it is not just an issue of lending per se, it is also an issue


of the service they give and understanding they have. I'm sorry


to interrupt you. I was just about to start talking about a challenger


bank which also has a different way of working. The way that Handle's


Bank works, I have visited them. Their motto is the branch is the


bank, so they empower their local relationship managers to make


decisions and also, they are mandated to lend in a set area. They


understand it better. They actually visit the businesses in a which that


many other of the bigger banks don't o do and this is the kind of


cultural difference you get... It may be a cultural difference, but


frankly, can you give me any evidence that our existing


challenger banks are lending more to SMEs as a percentage of their


balance sheet, than the big banks? I can't. I can't give you that


percentage. But what I can say is if you like at banks like Handle's Bank


and metro Bank, they are growing the number of loans they are giving to


small businesses and making a difference. You might disagree with


that but actually I have talked to lots of businesses who have


benefited from what had those banks bring to the party. How much lending


does Metro Bank give to SMEs. You have said that's -- I can't give you


the figure. You said that's the future I have cited them as


examples. Am I saying they are a panacea, no. The whole reason we are


doing this is because we want them to have a greater share of the


market. I understand that but what I'm asking you is, if challenger


banks are the way forward, can you tell me how much Handle's Bank and


Metro Bank are currently lending to SMEs? I knted. But what I can say,


what we are looking at, we use the threshold set by the Independent


Commission on Banking. They think for challenger banks to have a


substantial difference they need 6% market share. The Governor of the


Bank of England says breaking up banks is not the way to get more


competition, partly for the reasons we have been talking about, it is


hard it sell branches off and it is hard for new entrants to come into


the market. We are being asked to believe that Ed Miliband knows more


about this than the jofrnor of the Bank of England? -- Governor of the


Bank of England No, people aren't. If you watch the Exchange as I did


of the Treasury Select Committee hearing he was at E he was asked a


leading question by a Conservative MP, that there were going to be


crude, arbitrary market caps. Actually this is asking for


commentary on a spech that hadn't even been delivered. And crude


arbitrary market caps is not what we are talking about and also we are


not saying that divestitures and challengers banks are not the


panacea to solve all the issues we have. What what do you make of it? I


think that the idea about bank portability for retail customers


Which is important a... Switching. I think you can reform the banking


system further. But I think that the Government have done tonnes of work


on this through Vicars. You also have the Business Bank that Vince


Cable set up. He has set up a business bank to try to help set up


- you talk about a British business bank and actually the fact is when


big banks try to make divestitures or, as we were talking about, they


are very hard to sell off. I think that this is an - it feels to me - I


mean we have to look more at the detail. But it feels like an


unnecessary step which I'm not sure you are making it because you are


developing this sort of catalogue of areas where you think that you can


be on the side of the consumer and the voter, against big business. And


I just wonder if it is a step too far. I don't think that this will


sort out small SME lending. As Andrew said, you need big balance


sheets to lend and that's partly why lending is concentrated in a few


banks because you have to have the balance sheet. Final word from you.


All I would say, is change isn't easy. This isn't about big verses


small. Many of those small businesses form a fundamental


important part of bigger businesses supply change. Since of beginning of


this Parliament, 85% of lending was concentrated out of the Big Five


banks. That's still the case now. It has not been changed. If we are


serious about building a more product I have, long-termed,


focussed economy, you have to make the changes and of course it'll


ruffle a few feathers but we cannot just give up. That's something we


refuse to do. Thank you very much. .


Now to the Scottish independence campaign. The referendum is a mere


eight months away you know. This morning William Hague entered the


fray, unveiling the latest in a series of UK Government papers


challenging the case for independence. The Foreign Secretary


argues that a new Scottish state may not be able to negotiate the same


terms of EU membership as the UK, and may be forced to adopt the Euro.


But Deputy SNP Leader Nicola Sturgeon's been making her own


speech this week. She said that as an independent EU member, Scotland


would get ?850 million more in agricultural funds, supporting


thousands of extra jobs. This week also saw the Treasury announcing


that the Government will assume full responsibility for Britain's ?1.4


trillion of debt should Scots vote to leave the UK. There would be a


negotiation to divvie it up. Alex Salmond said that would give


Scotland a strong negotiating position when it comes to dividing


up the debt. And there have been questions over plans for an


independent Scotland to continue to charge English students tuition


fees, while other EU students come for free. A former European


Commissioner for Education said that would be "illegal". Joining us now


from Glasgow, Blair Jenkins who leads the "yes" campaign, Blair


Mcdue a, campaign director for Better Together. You have to be


called Blair to be able to lead the campaign in Scotland or to be a


Labour Prime Minister. Blair Jenkins. When William Hague


says that an independent Scotland would have to reapply for member -


put aside his remarks about the euro - but would have to reapply for


membership of of the European Union, that is now the settled opinion of


those who know, isn't it? No, it is not the case, Andrew, not the case


at all. When we heard that David Cameron was despatching the Foreign


Secretary to Scotland today, we wondered if he'd already conceded


the referendum result but perhaps that will come later in the year. I


think it is accepted by lots of people who have looked at this, who


are expert that it is not - this is not something that he can settled


legally and it won't be settled legally. This is about political


process. Therefore, what you have to look at is the political reality of


the EU, what its priorities are, it's a naturally-democratically


human rights' based club. It is instinctively and institutionally


expansionist. Sure but you would have to renegotiate Scotland's


membership. From within. You wouldn't be within. You would. A


transition process that begins from the "yes" vote in September this


year and 18 months until Independence Day and the bulk of the


transition process could be accommodated within that time and


transition arrangements would kick in. There is no precedent. I'm sure


you have heard this before, there is no provision anywhere in the


European Treaty for territory people who have been in the EU for 40


years, remember, to be excluded. OK. Blair McDougall. It is a bit rich


for the unionists side to say, oh, well, if Scotland leaves you'll have


to renegotiate membership when the United Kingdom is heading for a


referendum. I mean, the sure way of Scots staying in the European Union


is to vote for independence. Well, I think the one thing that is clear,


as has been made perfectly clear by your questioning, is if we leave the


UK, we leave the European Union. All three parties within Better


Together. All three of the main UK political parties, want to remain


within the United European Union. But I think those arguments of UKIP,


that say that the UK should leave the European Union are as


wrong-headed as the argument we hear from the nationalists up here. What


would happen if Scotland stays within the UK? We have a referendum


European membership, Scotland votes to stay in England overall, England


votes to leaf and the weight of English votes means the whole of the


UK comes out That was the point I was making. Those arguments of UKIP


to leave the European Union are as bad as those arguments to leave


Scotland, that we hear from the nationalists. Scotland, yes, we sell


a lot to the European Union, but we sell four times as much to see rest


of the UK as we do to the European Union. Our best future is to remain


within the UK and through remaining in the United Kingdom and having a


more certain future within the European Union, than we would as


part of independence. Let me just say, Blair Jenkins has just said


that this is now a political matter. We remember, because it was your


interview a year ago, Andrew, that caught out the First Minister when


he said it was a legal matter. It turned out he had lied about the


legal advice we had on the European Union. He is not here. He is at it


again with tuition fees. He is not here to defend himself. Let me move


on to tuition fees, Blair Jenkins. At the moment Scottish universities


charge English students fees, indeed charge fees from anybody outside


Scotland within the United Kingdom but they don't charge, under


European law, they are not allowed to charge, French, German or Italian


students. Now if ask the land becomes independent, England will be


in exactly the same position as France or Germany. By what legal


basis could you charge English students tuition fees? Well, the


advice that the universities body, University Scotland, got, is that it


would be possible to continue with that policy on the basis that there


were exceptional circumstances. Scotland is aJayes ented to the


country that charges the -- adjacent. That charges the highest


level of tuition fees to anyone in Europe. That's a special


circumstance, the land border and shared language. Who gave the


advice? From a firm of solicitors. I should say, for people in the


Scotland, where we think the principle of free access to


education is important, the ability to learn not pay, our ideal solution


when Scotland becomes independent, is that the people of England elect


a Government that's committed to higher education and stops charging


?9,000 a year. All very well but if you go independent you will have no


say over who runs England. That's a price you pay for separation. My


point is, I cannot foresee on any legal challenge whatsoever, that you


could win, discriminating against English students, if Scotland is an


independent country that you could say that German students and French


students can come free, but English students, you are going to have to


pay. Well, as I say, there's very good information making the


exceptional circumstances argument. Has the Scottish Government had


advice on this? Well, so they say. Has the Scottish Government had


legal advice? I don't speech for the Scottish Government, Andrew but I am


quoting from University Scotland. I think, it is one of these


interesting areas, where, you know, the only way to get certainty with


some of these issues which involve the position that the European Union


or the European Commission would take, would be to directly ask the


European Commission, the European Union, what their view would be. The


onlientity that can do that is the UK Government but the UK Government


has an interest in maximum confusion and maximum uncertainty, which is


why they are not go to Europe and ask what the position will be for


Scotland in terms of transition to full membership. Well they are not


the ones trying to break up the United Kingdom. Blair McDougall. Why


are you, in the Better Together campaign, being accused of running a


comatose campaign Comatose? Well we are trying to ask difficult


questions. The nationalists don't like that and attack the campaign


for asking questions. This is a great example of that. Blair Jenkins


just said the only person that could ask the European Commission what


they thought about this tuition fees issue was the UKKer Government.


That's in the true. The Guardian newspaper asked the current


education Commissioner what they thought of this issue earlier on in


the week. It wasn't just the previous commissioner who said they


thought it was illegal. The current Commissioner said they thought it


was illegal. But, look, the SNP Government could clear up so much of


this tomorrow by releasing the legal advice on the European Union, by


releasing the legal advice on this specific issue of tuition fees,


which they won't even say whether they have or not As Blair Jenkins


say, he doesn't speech for the Scottish Government, he is running


the campaign. Blair oncoins, you are only eight months away from the


referendum and still the polls are not moving your way. What is going


wrong? Well, lots of things are happening. Any momentum is towards


"yes", an dru. I know you have followed this. We have now had a


sequence of public meetings and debates, schools, colleges,


universities. Ever are I time you have a public debate where a vote is


taken before and after, the momentum, the shift is towards


"yes". Our own research tells us, as people become more informed and


engage with the debate they move towards "yes". We are in no doubt


that, as the year progresses, the polls will catch up with the


campaign. Finally, it is interesting what you say there, but when do you


- when would you now expect to see that reflected in the polls? When


will you start to - do you think you will start to see the gap between


yes and no narrowing in your favour? Well, what we know for a fact


Andrew, and people have told us this, a lot of people will make


their mind up on their day which will put a strain on my nervous


system and others, but we have to live with that. Blair andably, come


back as a doubling act again. Thank you very much. It's the middle of


January, a month afflicted by too much rain, dark afternoons and


diets. So for our MPs, what better way to boost morale than a letter,


from a top surgeon, now sitting in the House of Lords, telling them all


to shape up and lose weight. Iain McColl says politicians need to set


an example to the rest of us. He'll join us in a moment. First, though,


here's a reminder of how some politicians at least try to stay


fit. And Ian McColl joins me now. So, our


MPs eating too much of the gross national product? Some of them are,


yes. It is the worst epidemic we have had in 90 years, it is killing


millions, costing millions, and the cure is free. And you want MPs to


set a better example? I think it would help, yes. There is no good as


telling other people what to do if we do not do it ourselves. That is


true, but you have seen the lifestyle across the road, is it not


mission impossible? No. I have been talking about this for many years in


Parliament, and when I walk along the corridor now, when they see me


coming, they tighten their belts, and they say, we are trying. You


have made them feel guilty? But there are eight or ten bars, dozens


of restaurants, it is a sedentary lifestyle, it is not healthy. No,


but all they have to do is eat less to reduce their weight. Exercise is


nothing much to do with it, really, which is good. You are obviously


naturally quite slim, aren't you? No, I do not tell anybody to lose


weight, I just tell them the facts. And also the consequences. One thing


which they could seriously do in the House of Commons is, in all of the


cafeterias, there is one healthy all of the other meals are pretty


fattening. Maybe you should have one unhealthy option instead? Exactly,


so that could be a good starting point. With me, it is all due to one


of my patience. I was on my way to a black-tie dinner, wearing a black


tie which was 50 years old, and I go up to the bedside in Barts Hospital,


and she says, that is very old. I said, it is 50 years old, and she


says, it looks it. She says, I am dying, I know there is no hope, but


I want you to take me to the theatre now. I shook her warmly by the


hand, she was operated on that night, and she survived seven years.


She was a tailor. During that time, she made me a new black-tie outfit.


So it is attributed to her. Quite right. Some politicians I am told


have taken your advice to heart. There is a Weight Watchers group in


Parliament now? Yes, they do good work, really. Lord Falconer, you


probably know, has reduced his weight very substantially. I have


not seen him for a while. There is a wider point, that we seem to be


faced with an obesity epidemic, and as yet, we do not know how to


reverse it. Well, the way to reverse it is to encourage people to eat


food that is chewy. The more you have to chew it, it sends impulses


to your brain, telling you you have had enough. So, we need food which


is not refined. We need porridge, wholemeal bread, a special kind of


pasta, which the Italian government tried to ban, because you cannot eat


so much of it, but it is very good. Time to get the answer to our quiz.


The question was, David Cameron told the Westminster correspondents


dinner his priority for 2014 would be what? Was it... Knocking UKIP


into last place at the European elections? To avoid being snapped


getting changed on the beach? To keep his bald spot hidden? Or to be


best friends with Ed Balls? So, Beth - what's the correct answer? I was


there, and I did not drink, but I think it was number three, the bald


patch. That is correct. Was the food healthy last night at this dinner?


No, it wasn't. It was delicious, though. It was lovely.


It's just gone half past 12. Coming up in a moment, it's our regular


look at what's been going on in European politics. For now, it's


time to say goodbye to my Guest of the Day, Elizabeth Rigby.


So for the next half an hour, we're going to be focusing on Europe.


We'll be discussing restrictions on EU migration and the European


elections, and asking what the EU budget is spent on. First though,


here's our guide to the latest from Europe in just 60 seconds.


Maltese plans to sell their passports to wealthy foreigners for


650,000 euros a time have made the EU cross. Under the skin, buyers


would be able to live in any of the 28 member states. Justice


Commissioner Viviane Reding led the assault. Greek Prime Minister set


out his country's stall as well. Jobs, growth and social cohesion


will top the agenda. Tough talking from George Osborne on the future of


the EU. There is a simple choice for Europe the focus on Francois


Hollande's private life was also on the front pages. Good news for honey


producers. MPs have decided pollen is a natural factor, and not an


ingredient. Sweet! And with us for the next 25 minutes, I've been


joined by the Conservative MEP Kay Swinburne, and Paul Nuttall from the


UK Independence Party. Let's take a look at one of those stories in more


detail - the Maltese government scheme to sell EU passports for


650,000 euros a pop. That is about half ?1 million. Should that be


legal? Well, what you have got to think about is that they are not


just selling Maltese passports, these people can then go across the


border to other countries. Ireland has done it, and Portugal as well.


Ireland has made over ?200 million from this. The Spanish have done it.


It is happening across the board. I think the bigger problem is not


selling passports to wealthy businessmen, who will then invest in


Malta, the bigger problem is countries like Bulgaria and Romania


handing out passports to people from Macedonia and other countries. Is


there evidence of that? Yes, there is. Also, with Spain, which has


given amnesties in the past two people from Morocco. The problem


there is that if you look at Spain, it has got nearly 60% youth


unemployment, these people will gradually drift west. Is Malta doing


different from what we do? As I understand it, we have a VISA


programme scheme for what is called a tier one investor, it is a point


space to system, you get the passport if you can contribute ?1


million to remain in the country? I think there are many countries


around the world, certainly the US and Canada and others have it,


scheme is in place in most countries just fundamentally, this is a case


where each country can decide what their rules are. Once they have


decided, they must abide by them. But the point is that you are not


just giving them a Maltese passport, they are then free to go


everywhere. So surely it must be a concern of the European Commission?


We need to make sure that the rules which are set out by Malta, they


need to adhere to them. At the moment, there is no evidence to


suggest that they are outside of those European rules.


Being able to travel freely to live and work in any country across the


European Union was one of the founding principles of the Treaty of


Rome. But with poorer countries like Romania and Bulgaria joining the EU


in recent years, David Cameron has suggested there should be limits to


the freedom of movement of European citizens. That has been met with a


hostile reaction in the European Parliament this week. Here's Jo.


As an EU citizen, with one of these, I can arrive in a French city like


Strasbourg and start working and even settle down here if I want,


just like workers from other member states, including Bulgaria and


Romania. But one man is trying to change that, by calling for tougher


controls on freedom of movement from poorer EU countries, even with talk


of it cap on the numbers able to come and work in Britain. That has


been met with derision by leading figures at the European Parliament,


who say the idea will not fly. If David Cameron wants to redefine the


relationship between the United Kingdom and the European Union, that


sounds for me is surprising. The relationship with a body to which


you belong defines a relationship with yourself. I would like to make


it very clear, it is a right which is not up for negotiation. It cannot


come as a surprise to anybody that the principle of free movement


exists, and that it is applicable throughout the union, without


discrimination, because we do not want first-class and second-class


citizens in Europe. The problem for David Cameron is that the principle


of freedom of movement is etched into the fabric of the European


Union. Many here at the Parliament say it is non-negotiable. To stop it


in principle or to describe late against workers from particular


countries, I think there can be a possibility of discrimination.


Therefore, this would be against European law, against treaty law,


and I think nearly everyone else will defend this question of free


movement. What is getting a better reception here in Strasbourg is the


debate around restricting EU migrant workers' access to benefits. The


Work and Pensions Secretary has suggested two years before welfare


can be claimed. The Labour Party agrees with the Government on reform


but does not like the tone of the debate. It is the way they have gone


about it. It is the way they have gone about it just you cannot work


with people who have similar views as you here if you have got one hand


on the exit all. You need to work with those people, not threaten them


and not lecture them. When it comes to Europe, the coalition partners


have always gone in different directions. But one Liberal Democrat


is in no doubt what is behind David Cameron's current tough talk on EU


migration. It is UKIP, I am afraid. I was a Conservative for many years


and fell out with David Cameron over his policy of aligning with some


rather strange people in the European Union. I think upcoming


elections will be about the difference between in and out. The


Liberal Democrats are the party of in, we want to see the benefits from


membership of the European Union in good times and bad. David Cameron's


promise of an in-out referendum on a reformed EU was meant to keep Tory


Eurosceptics on board, but it is clearly not enough for some


Conservatives who, like UKIP, believe it is time for Britain to


pack its bags and leave the EU altogether. She is always going


somewhere! Jo Coburn reporting. And we've been joined by Bulgaria's


Foreign Minister, Kristian Vigenin. Foreign Minister, thank you for


joining us. You have described the British attitude to free movement as


an intimidation campaign, that is pretty strong, is it not? That is


the way Bulgarian citizens have seen this campaign. That is why I had to


say it as we felt it. But of course, what is more important now that this


campaign has proved to be grounded is that we are ready to reset our


relations and start giving positive messages on both sides. This is a


country which over the past 12 years or so has taken in around 3 million,


a net increase of 3 million migrants, it is hardly an


unwelcoming country, in general? Definitely, that is why we were


surprised by the debate which was going on in the past year.


Bulgarians are not a nation which is ready to come in big numbers to the


United Kingdom. We have proved in past years that those Bulgarians


that are already here in the United Kingdom, they contribute, they are


good members of the communities where they live. That is why this


campaign was not understandable for us. Is it not an even bigger problem


for Bulgaria, though, that you are going to lose, or you are at risk of


losing, some of your best, your brightest, your hardest working,


best educated people, leaving Bulgaria and coming here, and we


will get the benefit of them? It is true. If we talk about the problem,


I would say that sometimes it is a bigger problem for us, because


highly educated people do not stay and work for our economy, but they


support the British economy. That is part of the rules within the


European Union. People are free to go where they like, where they will


feel welcome, and where they would like to continue their lives. So, we


are ready, and we do accept that. On our side, we also have to accept


some difficult rules, including, by the way, another transitional


period, which was in our accession treaty, which means that EU citizens


are allowed to come and buy agricultural land in Bulgaria. There


was a debate, but our government said really, it is part of our


commitments, it is not negotiable, and yes, from this month onward, we


are applying these rules. The evidence we have seen so far, very


early days, but there has not been an avalanche of Bulgarians or


Romanians coming to the country and those who have been coming have been


coming here to work. But do you have a view as to when it is appropriate


for people who come here, when they should qualify? How long should they


have to be here before they qualify for welfare? I wouldn't enter in a


debate about the possibly changes in the welfare system and Social


Security system of the United Kingdom. It is, of course, a


national responsibility and the national governments and parliaments


have wide possibilities to change their rules. Of course, within the


European rules - that is why experts of the European Commission will


follow closely what is being proposed and adopted in the United


Kingdom, will do it as well. What is important, is that any change is not


being done in a discriminatory way and this is the general agreement


and confirmation, as well, yesterday, in my meetings with


parliamentarians, leaders of committees and also with Mr Hague


and Mr Liddington, who confirmed, re-confirmed, I must say that any


change will have no discriminatory nature. That's very important. Thank


you very much for joining us. Forcing force Hasn't this turned out


to be a storm in a teacup? I think there are two things here. The first


one is that we do, in our country, have always welcomed people who want


to come here and work and likewise, a lot of British people choose to go


and work elsewhere within the European Union. That I think, is


without doubt a very positive thing and people generally are quite


welcoming of that. Particularly given that many of our doctors and


professionals and certainly the City of London benefits hugely from many


of those European traders working. But the real issue is about no


continuity or consistency in social and welfare benefits across Europe.


Some countries allow you to actually have access to welfare within three


months, some within six months, some within a year, there is no


consistency. The UK actually had open access to welfare from day one.


We have now changed that. I think once we start it put these changes


in place and start it make sure that people come here to work, people


come here and benefit our economy, then we can start it make a


difference but we need to get this on the table for debate. OK, hold


on. We have to let Paul Nuttal have a say. The big issue is that freedom


of movement of people might work when you are talking about similar


economies but when you open up to the whole of Eastern Europe. Take


gull gayia. The minimum wage -- Bulgaria. The minute yum wage is 150


euro a month. Traffic is only ever going to be one way. We have a


million of our own kids unemployed in this country. For every one that


comes in. That's not necessarily the fault of Romanians or Bulgarians?


Sno no, a fault of the systems. MPs at Westminster have got that wrong.


We should have a points-based system. If we need the skills you


have, come here and work but with you shouldn't have an open border.


But your party leader was predicting they would be pouring in. There is


no evidence of that yet? He will be quite disappointed, won't he? We are


only 17 days in. I understand. Many think-tanks, including Migration


Watch UK think there will be 250,000 over the next five years. Additional


to those already here? 250,000 Romanians and Bulgarians? Yes. Over


five years. The institute for democracy say it is going to be


380,000, that's a city not too dissimilar it bris to. As far as I'm


concerned it makes no sense to have an open border when we have 2. 4


million people unemployed in our country. If we stay in the European


Union, the issue of welfare payments, when you qualify, it is a


different matter but the principle in the Treaty of Rome of free


movement of peoples. It doesn't say free movement of workers or benefit


seekers. It says free movement of seekers T covers everybody. There is


no appetite in the European Union to change that cardinal principle. We


are asking for a debate. I think Vivien Reading as Commissioner


called it popularism. I call it dome crasscy. We need to have a grown-up


debate. You want to re-open this clause, clause 3 C of the Treaty of


Rome? I think we need it ensure as the EU enlarges and it will, we have


countries who are signed up to come and join, that we have sensible


rules. That they have to get to is enstandards before they are allowed


that right of free movement and free package. And if they get their way


we'll have Ukraine, Serbia and... Well it won't matter do you, if you


get your way. We will be out. We'll be able to control our borders. As


you may know already, 2014 is the year of fresh elections to the


European Parliament. The vote will take place in May. In Britain, polls


will open on Thursday the 22nd, but votes won't be counted until Sunday,


25th May because other European countries vote at the weekend. Up


for grabs, 751 seats across 28 nations. In the UK, 73 MEPs will be


returned, with seats allocated according to share of the vote. The


outcome of the election will determine the make up of the


European Parliament for the next five years. But the vote is also


important because, for the first time, national leaders will have to


take the result into account when deciding who should be the next


president of the EU Commission. That's led the pan-European


political groupings to nominate their own candidates. The Party of


European Socialists has already made Martin Schulz, the current President


of the European Parliament, their choice for Commission President. The


Liberal grouping will decide next month whether to choose Ollie Rehn,


the current Economic Affairs Commissioner, or Guy Verhofstadt, a


former Prime Minister of Belgium. He is a well-known federalist. Paul


Nuttal is shaking his head here like I mentioned the devil. And in March


the right-of-centre European People's Party will decide their


candidate. The two declared candidates so far are Jean Claude


Juncker, former Luxembourg PM and Michel Barnier who is the EU


Commissioner for the Internal Market. He is French. So there we


go. OK. Who would you like to be the next president? None of the above is


the answer it that. #12k3w4r do you have a candidate yourself? I


genuinely feel that this needs to be decided amongst the Member States.


It's their prerogative to decide who should be the next president of the


Commission? Do you have a candidate? I would like to see the next UK


Commissioner. Who is that? We don't know yet and we won't until July. I


would actually like to have the Commissioner... I don't believe the


Lisbon Treaty said, the European Parliament should dictate who it


should be. Who would you like the next President to be? No-one, I


don't think we should be in the European Union. I knew we were going


to say that. Predictable. Assuming you don't get your way, who would


you like? None of the above. All that will happen is it'll be a big


group stitch-up like we have with the president of the European


Parliament. The socialist also select their man or they'll come to


a deal and the EPP will select theirs. It won't be democratic,


it'll be business as usual. What is it going to do to the European


Parliament, indeed the whole European project, if after May, we


have in the European Parliament, a huge group of maybe 35%, maybe more


of those outside the mainstream right, and to the further right - I


mean UKIP hopes to do very well. Your party is currently third place


in the polls. Madam LePenn is ahead in the polls in France at the moment


and more in France and Italy. What will that do? My concern is that


most of the work is done in committee and legislation,


individual dossiers. UKIP doented work on those dossiers, in my


committee. What does that mean? Less people doing more work and the


centre will have to work harder to get the votes through on


proportionate decisions. Is it right to say that such a big chunk of the


European Parliament - will that mean more clashes between the Parliament


and the Brussels elite? I hope so, in a way. Because at the moment


they've had an easy ride - well they certainly had an easy ride before


UKIP arrived. I think the make-up of the Parliament is going to change


radically next time. And maybe, just maybe, they will start listening to


national democracies a little bit more. Do you still think you will


come first? I certainly hope so. Do you think you will come first. We


are in with a good chance. You are getting very political these days.


The biggest chunk the European Union budget goes to farmers in the form


of the comaul, it still does. Where does the second-largest chunk go? --


Common Agricultural Policy. Not to flags or MPs' pensions. It is


sent back to the Member States to be spent on their poorest areas. Over


the next seven years it'll be worth more than 300 billion euros. Where


does it all go? In the latest instalment of our A to Z of the


European Union, Adam has been looking at EU regional funds.


Welcome to Cornwall, in the eyes of Brussels, on a par with Sicily or


transvainia. That's because Cornwall's annual income is less


than three-quarters of the EU average which means it qual face for


special regional funding, called convergence, designed to even out


economic disparities across Europe. Here and Wales are the only places


in the UK that get it. In typical EU-style there is a flotilla of


other funds, too, but the bulk of regional money goes to regions like


this. In corn wall's case, half a billion pounds over six years. So,


where has it gone? This yacht builders was awarded ?190,000. Like


all beneficiaries, they had to match the funding with their own money.


And this is what it paid for. The mould for making the hull for a new


model of yacht. The Rustler 37.


The Boats go to the superrich but they are helping to spread the


wealth by creating jobs. Cornwall is pretty around the outside and in


summer when all the range Rovers come down from London and park


outside their lovely holiday cottages, if feels difference but


you drive in five miles and the individual was at a low ebb. Over


the last ten years, I think there has been a huge change. Up the road,


this use the to be fields. Now courtesy of the EU, it is a higher


education campus. The centre-piece - the University of Exeter's


environment and sustainability institute a nip at ?21 million.


They all seem cheap compared to the biggest product, superfast


broadband. BT got ?55. 5 million to pay for t with the company stumping


up the same amount. It all comes together here at the innovation


centre. ! Try the headset on. The investment


in the internet, new work spaces, education and employment, lured this


games company which has gone from one worker last summer to 11 by the


end of this month. They just made me feel a bit six. It is so weird. !


There isn't really an aspect of the business operation down here which


isn't in some way affected by European Union convergence funding.


So, do you go to bed every night thanking the founding fathers of the


EU? I wouldn't say that necessarily. I wouldn't say I think about it that


deeply but it certainly is something that has made - it's made it a will


the easier for us. In return, the EU gets its flag prast mraserred


everywhere. Yes, everywhere, which enrages critics who think the UK


could spend its own money, thank you very much. Would that really be so


bad? As a local councillor I'm not sure that investment would have


happened. It has happened through the European Union and it is going


to happen in the future and we're certainly want to do our best to


make the most of that investment. Home time, and, yes, Europe funded


this place, too. Brussels insiders admit not every


euro of regional funding was well-spent like rural airports in


Spain. A lot quieter than this one. But regional funds aren't going


anywhere. They are staying a crucial and big part of the budget.


Adam disappearing into the sunset there. What is not to like, look at


the funds doing the all this in the West Country? Because it is our own


money. In the last round Britain put in ?30 billion, we got ?#9d billion


back. It is not good value for moneyment in Merseyside-for-every


?2.88 we only get ?1 back. It is our money anyway, you have 20 seconds to


remrie. In all variness, Wales is a huge recipient of convergence


funding and cap funding. We'll take whatever money we get as long as we


spend it correctly. Who can take you for taking all you can get -- who


can blame you. Thank you to my guests for today. That's all for


now. Goodbye.


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