:00:36. > :00:40.Morning, folks. Welcome to the Sunday Politics.
:00:41. > :00:44.Labour's been hit hard by scandals at the Co-op. Ed Miliband says the
:00:45. > :00:47.Tories are mudslinging. We'll speak to Conservative Chairman Grant
:00:48. > :00:49.Shapps. Five years on from the financial
:00:50. > :00:53.crisis, and we're still talking about banks in trouble. Why haven't
:00:54. > :00:58.the regulators got the message? We'll ask the man who runs the
:00:59. > :01:01.City's new financial watchdog. And he used to have a windmill on
:01:02. > :01:06.his roof and talked about giving hugs to hoodies and huskies. These
:01:07. > :01:12.days, not so much. Has the plan to make the
:01:13. > :01:17.In the East Midlands: Campaigners want more help for people dying from
:01:18. > :01:19.illness caused by warned that benefit falls will be to
:01:20. > :01:26.homelessness and population ships. What is the evidence?
:01:27. > :01:31.And as always, the political panel that reaches the parts other shows
:01:32. > :01:35.can only dream of. Janan Ganesh Helen Lewis and Nick Watt. They ll
:01:36. > :01:39.be tweeting faster than England loses wickets to Australia. Yes
:01:40. > :01:42.they're really that fast. First, some big news overnight from
:01:43. > :01:45.Geneva, where Iran has agreed to curb some of its nuclear activities
:01:46. > :01:50.in return for the partial easing of sanctions. Iran will pause the
:01:51. > :02:00.enrichment of uranium to weapons grade and America will free up some
:02:01. > :02:03.funds for Iran to spend. May be up to $10 billion. A more comprehensive
:02:04. > :02:06.deal is supposed to be done in six months. Here's what President Obama
:02:07. > :02:15.had to say about this interim agreement. We have pursued intensive
:02:16. > :02:19.diplomacy, bilaterally with the Iranians, and together with our
:02:20. > :02:23.partners, the United Kingdom, France, Germany, Russia and China,
:02:24. > :02:29.as well as the European Union. Today, that diplomacy opened up a
:02:30. > :02:35.new path towards a world that is more secure, a future in which we
:02:36. > :02:42.can verify that Iraq and's nuclear programme is peaceful, and that it
:02:43. > :02:45.cannot build a nuclear weapon. President Obama spoke from the White
:02:46. > :02:51.House last night. Now the difficulty begins. This is meant to lead to a
:02:52. > :02:57.full-scale agreement which will effectively end all sanctions, and
:02:58. > :03:01.end Iran's ability to have a bomb. The early signs are pretty good The
:03:02. > :03:07.Iranian currency strengthened overnight, which is exactly what the
:03:08. > :03:14.Iranians wanted. Inflation in Iraq is 40%, so they need a stronger
:03:15. > :03:18.currency. -- information in Iran. France has played a blinder. It was
:03:19. > :03:22.there intransigence that led to this. Otherwise, I think the West
:03:23. > :03:27.would have led to a much softer deal. The question now becomes
:03:28. > :03:33.implementation. Here, everything hinges on two questions. First, who
:03:34. > :03:38.is Hassan Rouhani? Is he the Iranians Gorbachev, a serious
:03:39. > :03:45.reformer, or he's here much more tactical and cynical figure? Or
:03:46. > :03:47.within Iran, how powerful is he There are military men and
:03:48. > :03:55.intelligence officials within Iran who may stymie the process. The
:03:56. > :03:59.Western media concentrate on the fact that Mr Netanyahu and the
:04:00. > :04:04.Israelis are not happy about this. They don't often mention that the
:04:05. > :04:09.Arab Gulf states are also very apprehensive about this deal. I read
:04:10. > :04:20.this morning that the enemies of Qatar and Kuwait went to Saudi king.
:04:21. > :04:25.-- the MAs row. That is the key thing to watch in the next couple of
:04:26. > :04:30.weeks. There was a response from Saudi Arabia, but it came from the
:04:31. > :04:34.Prime Minister of Israel, who said this was a historic mistake. The
:04:35. > :04:38.United States said there would be no enrichment of uranium to weapons
:04:39. > :04:42.grade. In the last few minutes, the Iranian Foreign Minister has tweeted
:04:43. > :04:52.to say that there is an inalienable right -- right to enrich. The key
:04:53. > :04:57.thing is the most important thing that President Obama said in his
:04:58. > :05:01.inaugural speech. He reached out to Iran. It failed under President
:05:02. > :05:07.McKenna jab. Under President Rouhani, there seems to be progress.
:05:08. > :05:12.There is potentially now what he talked about in that first inaugural
:05:13. > :05:18.address potentially coming through. In the end, the key issue - and we
:05:19. > :05:22.don't know the answer - is the supreme leader, not the president.
:05:23. > :05:27.Will the supreme leader agreed to Iran giving up its ability to create
:05:28. > :05:33.nuclear weapons? This is the huge ambiguity. Ayatollah Khamenei
:05:34. > :05:39.authorise the position that President Rouhani took to Geneva.
:05:40. > :05:44.That doesn't mean he will sign off on every bit of implementation over
:05:45. > :05:50.the next six months. Even when President Ahmadinejad was president,
:05:51. > :05:55.he wasn't really President. We in the West have to resort to a kind of
:05:56. > :06:06.Iranians version of the study of the Kremlin, to work out what is going
:06:07. > :06:12.on. And the problem the president faces is that if there is any
:06:13. > :06:16.sign... He can unlock these funds by executive order at the moment, but
:06:17. > :06:21.if he needs any more, he has to go to Congress. Both the Democrat and
:06:22. > :06:28.the Republican side have huge scepticism about this. And he has
:06:29. > :06:33.very low credibility now. There s already been angry noises coming
:06:34. > :06:37.from quite a lot of senators. It was quite strange to see that photo of
:06:38. > :06:41.John Kerry hugging Cathy Ashton as if they had survived a ship great
:06:42. > :06:51.together. John Kerry is clearly feeling very happy. We will keep an
:06:52. > :06:54.eye on this. It is a fascinating development.
:06:55. > :06:56.More lurid details about the personal life of the Co-op Bank s
:06:57. > :07:01.disgraced former chairman, the Reverend Paul Flowers. The links
:07:02. > :07:04.between Labour, the bank and the wider Co-op movement have caused big
:07:05. > :07:09.problems for Ed Miliband this week, and the Conservatives have been
:07:10. > :07:13.revelling in it. But do the Tory allegations - Ed Miliband calls them
:07:14. > :07:23."smears" - stack up? Party Chairman Grant Shapps joins us from Hatfield.
:07:24. > :07:32.Welcome to the programme. When it comes to the Co-op, what are you
:07:33. > :07:36.accusing Labour of knowing and when? I think the simple thing to say here
:07:37. > :07:41.is that the Co-op is an important bank. They have obviously got into
:07:42. > :07:45.difficulty with Reverend flowers, and our primary concern is making
:07:46. > :07:48.sure that that is properly investigated, and that we understand
:07:49. > :07:52.what happened at the bank and how somebody like Paul Flowers could
:07:53. > :07:57.have ended up thing appointed chairman. You wrote to edge Miliband
:07:58. > :08:04.on Tuesday and asked him what he knew and when. -- you wrote to Ed
:08:05. > :08:08.Miliband. But by Prime Minister s Questions on Wednesday, David
:08:09. > :08:15.Cameron claims that you knew that Labour knew about his past all
:08:16. > :08:21.along. What is the evidence for that? We found out by Wednesday that
:08:22. > :08:27.he had been a Labour councillor Reverend Flowers, and had been made
:08:28. > :08:30.to stand down. Certainly, Labour knew about that, but somehow didn't
:08:31. > :08:37.seem to think that that made him less appropriate to be the chairman
:08:38. > :08:43.of the Co-op bank. There was no evidence that Mr Miliband or Mr
:08:44. > :08:48.Balls knew about that. I ask you again, what are you accusing the
:08:49. > :08:58.Labour leadership of knowing? We know now that he stood down for very
:08:59. > :09:01.inappropriate images on his computer, apparently. You are
:09:02. > :09:06.telling me that they didn't know. I am not sure that is clear at all. I
:09:07. > :09:10.have heard conflicting reports. There is a much bigger argument
:09:11. > :09:15.about what they knew and when. There was a much bigger issue here. This
:09:16. > :09:19.morning, Ed Miliband has said that they don't have to answer these
:09:20. > :09:23.questions and that these smears This is ludicrous. These are
:09:24. > :09:26.important questions about an important bank, how it ended up
:09:27. > :09:33.getting into this position, and how a disastrous Britannia -- Italia
:09:34. > :09:40.deal happen. -- Britannia deal happened. And we need to know how
:09:41. > :09:44.the bank came off the rails. To be accused of smears for asking the
:09:45. > :09:48.questions is ridiculous. I am just trying to find out what you are
:09:49. > :09:54.accusing Labour of. You saying that the Labour leadership knew about the
:09:55. > :10:03.drug-taking? Sorry, there was some noise here. I don't know what was
:10:04. > :10:07.known and when. We do know that Labour, the party, certainly knew
:10:08. > :10:12.about these very difficult circumstances in which he resigned
:10:13. > :10:18.as a councillor. I think that the Labour Party knew about it. We knew
:10:19. > :10:21.that Bradford did, but not London. Are you saying that Ed Miliband knew
:10:22. > :10:26.about the inappropriate material on the Reverend's laptop? It is
:10:27. > :10:33.certainly the case that Labour knew about it. But did Mr Miliband know
:10:34. > :10:40.about it, and his predilection for rent boys? He will need to answer
:10:41. > :10:45.those questions. It is quite proper to ask those questions. Surely,
:10:46. > :10:49.asking a perfectly legitimate set of questions, not just about that but
:10:50. > :10:54.about how we have ended up in a situation where this bank has made
:10:55. > :10:59.loans to Labour for millions of pounds, that bank and the Unite
:11:00. > :11:06.bank, who is connected to it. And how they made a ?50,000 donation to
:11:07. > :11:11.Ed Balls' office. Ed Balls says that was nothing to do with Reverend
:11:12. > :11:16.Flowers, and yet Reverend Flowers said that he personally signed that
:11:17. > :11:20.off. Lots of questions to answer. David Cameron has already answered
:11:21. > :11:26.them on Wednesday. He said that you now know that Labour knew about his
:11:27. > :11:30.past all along. You have not been able to present evidence that
:11:31. > :11:35.involve Mr Miliband or Mr Balls in that. So until you get that, surely
:11:36. > :11:39.you should apologise? Hang on. He said that Labour knew about this,
:11:40. > :11:46.and they did, because he stood down as a councillor. If Ed Miliband
:11:47. > :11:50.didn't know about that, then why not? This was quite a serious thing
:11:51. > :11:55.that happened. The wider point is about why it is that when you ask
:11:56. > :11:58.perfectly legitimate questions about this bank, about the Britannia deal,
:11:59. > :12:08.and about the background of Mr flowers, why is the response, it is
:12:09. > :12:11.all smears? There are questions about how Labour failed to deal with
:12:12. > :12:16.the deficit and how it hasn't done anything to support the welfare
:12:17. > :12:24.changes, but there is nothing about that. Let us -- lets: To the wider
:12:25. > :12:32.picture of the Co-operative Bank. Labour wanted the Co-op to take over
:12:33. > :12:37.the Britannia Building Society, and it was a disaster. Do you accept
:12:38. > :12:44.that? The government of the day has to be a part of these discussions
:12:45. > :12:50.for regulatory reason. The government in 2009 - Ed Balls was
:12:51. > :12:56.very pleased... But you supported that decision. There was a later
:12:57. > :13:00.deal, potentially, for the Co-op to buy those Lloyds branches. There was
:13:01. > :13:08.a proper process and it didn't go through just recently. If there had
:13:09. > :13:14.been a proper process back in 2 09, would the Britannia deal have gone
:13:15. > :13:20.through? First, you accept that the Tories were in favour of the
:13:21. > :13:23.Britannia take over. Then your Chancellor Osborne went out of his
:13:24. > :13:27.way to facilitate the purchase of the Lloyds branches, even though you
:13:28. > :13:35.had no idea that the Co-op had the management expertise to become a
:13:36. > :13:41.super medium. Correct? The difference is that that deal didn't
:13:42. > :13:47.go through. There was a proper process that took place. Let's look
:13:48. > :13:53.at the process. There was long indications as far back as January
:13:54. > :13:58.2012 that the Co-op, as a direct result of the Britannia take over
:13:59. > :14:02.which you will party supported, was unfit to acquire the Lloyds
:14:03. > :14:09.branches. By January 2012, the Chancellor and the Treasury ignored
:14:10. > :14:13.the warnings. Wide? In 2009, there was political pressure for the
:14:14. > :14:17.Britannia to be brought together. Based on the information available,
:14:18. > :14:20.this was supported, but that process ended up with a very, very
:14:21. > :14:26.problematic takeover of the Britannia. Wind forward to this
:14:27. > :14:29.year, and when the same types of issues were being looked at for the
:14:30. > :14:34.purchase of the Lloyds deal, the proper process was followed, this
:14:35. > :14:38.time with us in government, and that purchase didn't go through. It is
:14:39. > :14:42.important that the proper process is followed, and when it was, it
:14:43. > :14:52.transpired that the deal wasn't going to be done. But it was the
:14:53. > :14:56.Treasury and the Chancellor who were the cheerleaders for the acquisition
:14:57. > :15:00.of the Lloyds branches. But there was a warning that the Co-op did not
:15:01. > :15:04.have enough capital on its balance sheet to make those acquisitions,
:15:05. > :15:09.but instead of heeding those warnings, your people went to
:15:10. > :15:14.Brussels to lobby for the requirements to be relaxed - why on
:15:15. > :15:18.earth did you do that? Our Chancellor went to argue for all of
:15:19. > :15:23.Rajesh banking, not specifically for the Co-op. He was arguing for the
:15:24. > :15:29.mutuals to be given a special ruling. The idea was to make sure
:15:30. > :15:34.that every bank in Britain could have a better deal, particularly the
:15:35. > :15:37.mutuals, as you say. That is a proper thing for the Chancellor to
:15:38. > :15:42.be doing. We could go round in circles here, but in the end, there
:15:43. > :15:46.was not a takeover of the Lloyds branches, that is because we
:15:47. > :15:50.followed a proper process. Had that same rigorous process been followed
:15:51. > :15:55.in 2009, the legitimate question to ask is whether the Co-op would have
:15:56. > :15:58.been -- would have taken over the Britannia. That is a proper question
:15:59. > :16:02.to ask. It is no good to have the leader of the opposition say, as
:16:03. > :16:05.soon as you ask any of these questions about anything where there
:16:06. > :16:10.is a problem for them, they come back with, oh, this is all smears.
:16:11. > :16:14.There are questions to ask about what the Labour government did, the
:16:15. > :16:19.debt and the deficit they left the country with, the way they stopped
:16:20. > :16:24.work from paying in this country. The big question your government has
:16:25. > :16:27.two answer is, why, by July 201 , when it was clear there was a black
:16:28. > :16:33.hole in the Co-op's balance sheet, your government re-confirmed the
:16:34. > :16:38.Co-op as the preferred bidder for Lloyds - why would you do that?
:16:39. > :16:41.Well, look, the good thing is, we can discuss this until the cows come
:16:42. > :16:45.home, but there is going to be a proper, full investigation, so we
:16:46. > :16:50.will find out what happened, all the way back. So, we will be able to get
:16:51. > :16:55.to the bottom of all of this. Grant Shapps, the only reason the Lloyds
:16:56. > :17:00.deal did not go ahead was, despite the Treasury cheerleading, when
:17:01. > :17:03.Lloyds began its due diligence, it found that there was indeed a huge
:17:04. > :17:08.black hole in the balance sheet and that the Co-op was not fit to take
:17:09. > :17:13.over its branches. That wasn't you, it wasn't the Government, it was not
:17:14. > :17:19.the Chancellor, it was Lloyds. You were still cheerleading for the deal
:17:20. > :17:23.to go ahead... Well, as I say, a proper process was followed, which
:17:24. > :17:27.did not result in the purchase of the Lloyds branches. At that proper
:17:28. > :17:33.process been followed with the purchase of the Britannia, under the
:17:34. > :17:38.previous government... Which you supported. Yes, but it may well be
:17:39. > :17:41.that under that previous deal, there was a excess political pressure
:17:42. > :17:49.perhaps put on in order to create that merger, which proved so
:17:50. > :17:54.disastrous. The Tories facilitated it, Grant Shapps, they allowed it to
:17:55. > :17:58.go ahead. I have said, we are going to have a proper, independent
:17:59. > :18:03.review. What I cannot understand is, when you announce a robber,
:18:04. > :18:09.independent review, the response you get to these serious questions. The
:18:10. > :18:14.response is, oh, this is a smear. It is crazy. We are trying to answer
:18:15. > :18:24.the big questions for this country. We have done all of that, and we are
:18:25. > :18:27.out of time. The Reverend Flowers' chairmanship of the Co-op bank was
:18:28. > :18:32.approved by the regulator at the time, which no longer exists. It was
:18:33. > :18:36.swept away by the coalition government in a supposed revolution
:18:37. > :18:39.in regulation. But will its replacement, the Financial Conduct
:18:40. > :18:49.Authority, be different? Adam has been to find out. Come with me for a
:18:50. > :18:53.spin around the Square mile to find out how we regulate our financial
:18:54. > :18:58.sector, which is almost five times bigger than the country's entire
:18:59. > :19:03.annual income. First, let's pick up our guide, journalist Iain Martin,
:19:04. > :19:09.who has just written a book about what went so wrong during the
:19:10. > :19:12.financial crisis. The FSA was an agency which was established to
:19:13. > :19:16.supervise the banks on a day-to day basis. The Bank of England was
:19:17. > :19:20.supposed to have overall responsible at for this to Bolivia the financial
:19:21. > :19:24.system and the Treasury was supposed to take an interest in all of these
:19:25. > :19:30.things. The disaster was that it was not anyone's call responsibility, or
:19:31. > :19:34.main day job, to stay alert as to whether or not the banking system as
:19:35. > :19:38.a whole was being run in a safe manner. And so this April, a new
:19:39. > :19:47.system was set up to police the City. Most of the responsibly delays
:19:48. > :19:50.here, with the Bank of England, and its new Prudential Regulation
:19:51. > :19:54.Authority. And the Financial Services Authority has been replaced
:19:55. > :20:00.with the new Financial Conduct Authority. Can we go to the
:20:01. > :20:06.financial conduct authority, please? Canary Wharf, thank you. Here, it is
:20:07. > :20:09.all about whether the people in financial services are playing by
:20:10. > :20:14.the rules, in particular, how they treat their customers. This place
:20:15. > :20:18.has got new powers, like the ability to ban products it does not like, a
:20:19. > :20:22.new mandate to promote competition in the market, the concept being,
:20:23. > :20:26.more competition means a better market, plus the idea that a new
:20:27. > :20:33.organisation rings a whole new culture. Although these are the old
:20:34. > :20:38.offices of the FSA, so maybe not quite so new after all. It has also
:20:39. > :20:42.inherited the case of the Co-op bank and its disgraced former chairman
:20:43. > :20:46.the Reverend Paul Flowers. The SCA will be part of the investigation
:20:47. > :20:51.into what happened, which will probably involve looking at its own
:20:52. > :20:54.conduct. One member of the Parliamentary commission into
:20:55. > :21:00.banking wonders whether the new regulator, and its new boss, are up
:21:01. > :21:04.to it. I have always said, it is not the architecture which is the issue,
:21:05. > :21:08.it is the powers that the regulator has, and today, it does not seem to
:21:09. > :21:14.me as if there is any increase in that. And with the unfolding scandal
:21:15. > :21:22.at the Co-op, it feels like the new architecture for regulating the City
:21:23. > :21:24.is now facing its first big test. And the chief executive of the
:21:25. > :21:30.Financial Conduct Authority, the SCA, Martin Wheatley, joins me now.
:21:31. > :21:34.Welcome to The Sunday Politics. The failure of bank regulation was one
:21:35. > :21:39.of the clearest lessons of the crash in 2008, and yet two years later, in
:21:40. > :21:45.2010, Paul Flowers is allowed to become chairman of the Co-op - why
:21:46. > :21:50.have we still not got the regulation right? We have made a lot of changes
:21:51. > :21:54.since then. We have created a new regulator, as you know. At the time,
:21:55. > :21:57.we still had a process which allowed somebody to be appointed to a bank
:21:58. > :22:01.and they would go through a challenge, but in the case of Paul
:22:02. > :22:04.Flowers, there was no need for an additional challenge when he was
:22:05. > :22:10.appointed to chairman, because he was already on the board. But going
:22:11. > :22:15.from being on the board to becoming chairman, that is a big jump, and he
:22:16. > :22:19.only had one interview? That is why today, it would be different. But
:22:20. > :22:25.the truth is, that was the system at the time, the system which the FSA
:22:26. > :22:28.operated. He was challenged, we did challenge him, and we said, you do
:22:29. > :22:33.not have the right experience, but at the time, we would not have
:22:34. > :22:35.opposed the appointment. What we needed was additional representation
:22:36. > :22:40.of the board of people who did have banking experience. You can say that
:22:41. > :22:45.that was then and this is now, but up until April of this year, it was
:22:46. > :22:48.still the plan for the Co-op, under Mr Flowers, and despite being
:22:49. > :22:55.seriously wounded by the Britannia takeover, to take on 632 Lloyds
:22:56. > :22:58.branches. That was the Co-op's plan. They needed to pass our test
:22:59. > :23:02.as to whether we thought they were fit to do that, and frankly, they
:23:03. > :23:07.never passed that test. It was not the regulator that stopped them It
:23:08. > :23:11.was. We were constantly pushing back, saying, you have not got the
:23:12. > :23:14.capital, you have no got the systems, and ultimately, they
:23:15. > :23:19.withdrew, when they could not answer our questions. You were asking the
:23:20. > :23:25.right questions, I accept that, but all of the time, the politicians on
:23:26. > :23:28.all sides, they were pushing for it to happen, and I cannot find
:23:29. > :23:34.anywhere where the regulator said, look, this is just not going to
:23:35. > :23:38.happen. I cannot comment on what the politicians were doing, but I
:23:39. > :23:41.continue what we were doing, which was constantly asking the Co-op
:23:42. > :23:45.have you got the systems in place, have you got the people, have you
:23:46. > :23:49.got the capital? And they didn't. But it only came to a head when
:23:50. > :23:53.Lloyds started its own due diligence on the bank, and they discovered
:23:54. > :23:57.that it was impossible for them to take over the branches, it was not
:23:58. > :24:02.the regulator... In fairness, what we do is ask the questions, can you
:24:03. > :24:06.do this deal? And we kept pushing back, and we never frankly got
:24:07. > :24:13.delivered a business plan which we were happy to approve. Is the SCA
:24:14. > :24:24.going to launch its own inquiry into what happened? -- the FCA. The
:24:25. > :24:29.Chancellor has announced what will be a very broad inquiry. There are a
:24:30. > :24:34.number of specifics which we will be able to look at, relating to events
:24:35. > :24:38.over the last five years. Could there be a police investigation I
:24:39. > :24:42.think the police have already announced an investigation. I am
:24:43. > :24:46.talking about into the handling of the bank. It depends. There might
:24:47. > :24:55.be, if there is grim low activity, which we do not know yet. You worked
:24:56. > :25:02.at the FS eight, didn't you? I did. Some of those people who were signed
:25:03. > :25:08.off on the speedy promotion of Mr Flowers, are they now working
:25:09. > :25:11.there? Yes, we have some. I came to join the Financial Services
:25:12. > :25:17.Authority, to lead it into the creation of the new body, the SCA.
:25:18. > :25:28.We had people who were challenging and they did the job. There was not
:25:29. > :25:31.a requirement to approve the role as chairman. There was not even a
:25:32. > :25:37.requirement to interview at that stage. What we did do was to require
:25:38. > :25:48.that he was interviewed, and that the Co-op should get additional
:25:49. > :25:53.experience. One of the people from the old organisation, who signed up
:25:54. > :25:56.on the promotion of Mr Flowers to become chairman is now a
:25:57. > :26:03.nonexecutive director of the Co op, so how does that work? Welcome he
:26:04. > :26:07.was a senior adviser to our organisation, one of the people who
:26:08. > :26:11.made the challenges, and who said, you need more experience on your
:26:12. > :26:15.board. Subsequently he then went and joined the board. Surely that should
:26:16. > :26:20.not be allowed, the regulator and the regulated should not be like
:26:21. > :26:25.that. Well clearly, you need protection, but we have got to get
:26:26. > :26:29.good people in, and frankly, we want the industry to have good people in
:26:30. > :26:33.the industry, so there will be some movement between the regulator and
:26:34. > :26:37.industry. We all wonder whether you have the power or even the
:26:38. > :26:40.confidence to stand up if you look at all of the really bad bank
:26:41. > :26:45.decisions recently, politicians were behind them. It was Gordon Brown who
:26:46. > :26:49.pushed the disastrous merger of Lloyds and RBS. It was Alex Salmond
:26:50. > :26:54.who egged on RBS to buy the world. All three main parties wanted the
:26:55. > :26:58.Co-op to buy Britannia, even though they did not know the debt it would
:26:59. > :27:02.inherit, and all three wanted the Co-op to buy the Lloyds branches -
:27:03. > :27:07.how do you as a regulator stand up to that little concert party? Well,
:27:08. > :27:12.that political pressure exists, our job at the end of the day is to do a
:27:13. > :27:16.relatively technical job and say, does it stack up? And it didn't and
:27:17. > :27:19.we made that point time and time again to the Co-op board. They did
:27:20. > :27:24.not have a business case that we could approve. The bodies on left
:27:25. > :27:31.and right -- the politicians on left and right gave the Co-op special
:27:32. > :27:38.support. They may have done, but that was not you have made a warning
:27:39. > :27:41.about these payday lenders, but I think what most people would like to
:27:42. > :27:46.see is a limit put on the interest they can charge over a period of
:27:47. > :27:50.time - will you do that? We have got a whole set of powers for payday
:27:51. > :27:55.lenders. We will bring in some changes from April next year, and we
:27:56. > :27:57.will bring in further changes as we see necessary. Will you put a limit
:27:58. > :28:03.on the interest they can charge That is something we can study. You
:28:04. > :28:08.do not sound too keen on it? Well, there are a lot of changes we need
:28:09. > :28:12.to make. One change is limiting rollovers, limiting the use of
:28:13. > :28:16.continuous payment authorities. Simply jumping to one trigger would
:28:17. > :28:21.be a mistake. Finally, an issue which I think is becoming a growing
:28:22. > :28:25.concern, because the Government is thinking of subsidising them, 9 %
:28:26. > :28:30.mortgages are back - should we not be worried about that? I think we
:28:31. > :28:35.should if the market has the same experiences that we had back in 2007
:28:36. > :28:40.- oh wait. We are bringing a comprehensive package in under our
:28:41. > :28:43.mortgage market review, which will change how people lend and will put
:28:44. > :28:55.affordability back at the heart of lending decisions. -- 2007-08. You
:28:56. > :28:56.have not had your first big challenge yet, have you? We have
:28:57. > :29:05.many challenges. It was once called the battle of the
:29:06. > :29:07.mods and the rockers - the fight between David Cameron-style
:29:08. > :29:10.modernisers and old-style traditional Tories for the direction
:29:11. > :29:17.and soul of the Conservative Party. But have the mods given up on
:29:18. > :29:23.changing the brand? When David Cameron took over in 2005, he
:29:24. > :29:26.promoted himself as a new Tory leader. He said that hoodies need
:29:27. > :29:33.more love. He was talking about something called the big society. He
:29:34. > :29:37.told his party conference that it was time to that sunshine win the
:29:38. > :29:42.day. There was new emphasis on the environment, and an eye-catching
:29:43. > :29:47.trip to a Norwegian glacier to see first-hand, supposedly, the effects
:29:48. > :29:51.of global warming. This week, party modernise and Nick bone has said
:29:52. > :29:56.that the party is still seen as an old-fashioned monolith and hasn t
:29:57. > :30:04.done enough to improve its appeal. The Tories have put some reforms
:30:05. > :30:09.into practice, such as gay marriage, but they have put more into welfare
:30:10. > :30:13.reform band compassionate conservatism. David Cameron wants
:30:14. > :30:22.talked about leading the greenest government ever. Downing Street says
:30:23. > :30:28.that the quote in the Son is not recognised, get rid of the green
:30:29. > :30:31.crap. At this point in the programme we were expecting to hear from the
:30:32. > :30:34.Energy and Climate Change Minister, Greg Barker. Unfortunately, he has
:30:35. > :30:40.pulled out, with Downing Street saying it's for ""family reasons"".
:30:41. > :30:45.Make of that what you will. However, we won't be deterred. We're still
:30:46. > :30:48.doing the story, and we're joined by our very own mod and rocker - David
:30:49. > :30:54.Skelton of the think-tank Renewal, and Conservative MP Peter Bone.
:30:55. > :30:59.Welcome to you both. I'm glad your family is allowed you to come? David
:31:00. > :31:04.Skelton, getting rid of all the green crap, or words to that effect,
:31:05. > :31:07.that David Cameron has been saying. It is just a sign that Tory
:31:08. > :31:13.modernisation has been quietly buried. I do think that's right
:31:14. > :31:19.Modernisation is about reaching out to the voters, and the work to do
:31:20. > :31:24.that is now more relevant than ever. We got the biggest swing since 931,
:31:25. > :31:29.and the thing is we need to do more to reach out to voters in the North.
:31:30. > :31:38.We need to reach out to non-white voters, and show that the concerns
:31:39. > :31:42.of modern Britain and the concerns of ordinary people is something that
:31:43. > :31:45.we share. And what way will racking up electricity bills with green
:31:46. > :31:52.levies get you more votes in the North of England? We have to look at
:31:53. > :31:54.ways to reduce energy bills. The renewable energy directive doesn't
:31:55. > :32:01.do anything to help cut our emissions, but does decrease energy
:32:02. > :32:05.bills by ?45 a year. We should renegotiate that. That is a part of
:32:06. > :32:11.modernisation and doing what ordinarily people want. And old
:32:12. > :32:16.dinosaurs like you are just holding this modernisation process back I
:32:17. > :32:21.am very appreciative of covering on this programme. The Tory party has
:32:22. > :32:26.been reforming itself for more than 150 years. This idea of modern eyes
:32:27. > :32:33.a is just some invention. We are changing all the time. I'm nice and
:32:34. > :32:38.cuddly! So you are happy that the party made gay marriage almost a
:32:39. > :32:47.kind of symbol of its modernisation? Fine Mac the gay marriage was a free
:32:48. > :32:51.vote. David Cameron was recorded as a rebel there because more Tories
:32:52. > :32:54.voted against his position than ever before. It was said that this was a
:32:55. > :32:59.split between the old and young but it actually was a split between
:33:00. > :33:02.those who were religious and nonreligious. It is a
:33:03. > :33:10.misinterpretation of what happened. Is a modernisation in retreat? I
:33:11. > :33:15.think modernisation is an invention. Seven years ago, in my
:33:16. > :33:22.part of the world, we got three councillors elected, two were 8 and
:33:23. > :33:25.one was 21. A few months ago, a 25-year-old was chosen to fight
:33:26. > :33:31.Corby for the Conservative Party. He came from a comprehensive School. He
:33:32. > :33:37.was one of the youngest. The Tory party is moving on. So you found
:33:38. > :33:46.three young people? Hang on a minute. You can't get away with
:33:47. > :33:51.that. Three in one batch. Does modernisation exist? Modernisation
:33:52. > :33:54.is about watering our appeal and sharing our values are relevant to
:33:55. > :33:59.voters who haven't really thought about voting for us for decades now.
:34:00. > :34:03.Modernisation is about more than windmills and stuff, it is about
:34:04. > :34:11.boosting the life chances of the poorest, it is about putting better
:34:12. > :34:16.schools in poorer areas. It is also saying that modernisation and the
:34:17. > :34:20.Tory party... When has the Tory party been against making poorer
:34:21. > :34:24.people better off? Or against better schools? Do you think Mrs Thatcher
:34:25. > :34:28.was a moderniser when she won all those elections? The problem we have
:34:29. > :34:33.at the moment is that UKIP has grown-up. If we could get all of
:34:34. > :34:39.those people who vote UKIP to vote for us, we would get 47% of the
:34:40. > :34:43.vote. We don't need to worry about voters on the left. We need to worry
:34:44. > :34:52.about the voters in the north, those people who haven't voted for us for
:34:53. > :34:57.decades. Having an EU Referendum Bill is going to get people to
:34:58. > :35:02.vote. We have to reach out to voters, but not by some sort of
:35:03. > :35:07.London based in need. You have to broaden your base. I agree with you
:35:08. > :35:10.on that. We have to broaden our appeal, but this back to the future
:35:11. > :35:15.concept is not going to work. We need something that generally
:35:16. > :35:19.appeals to low and middle-income voters, and something that shows we
:35:20. > :35:26.genuinely care about the life chances of the poorest. Do you think
:35:27. > :35:33.that the people who vote UKIP don't support those aspirations? We are
:35:34. > :35:36.not doing enough to cut immigration. We don't have an EU Referendum Bill
:35:37. > :35:44.stop we have to get the centre right to vote for us again. Do that, and
:35:45. > :35:47.we have it. Tom Pursglove, the 5 euros, will be returned in Corby
:35:48. > :36:00.because we cannot win an election there. -- the 25-year-old. Whether
:36:01. > :36:06.you are moderniser or traditionalist, people, particularly
:36:07. > :36:15.in the North, see you as a bunch of rich men. And rich southerners. You
:36:16. > :36:19.are bunch of rich southerners. We need to do more to show that we are
:36:20. > :36:26.building on lifting the poorest out of the tax. We need to build more
:36:27. > :36:31.houses. There is a perception that the leadership at the moment is
:36:32. > :36:35.rich, and public school educated. What we have to do is get more
:36:36. > :36:42.people from state education into the top. You are going the other way at
:36:43. > :36:50.the moment. That is a fair criticism. Modernisers also say
:36:51. > :36:56.that. I went to a combo hedge of school as well. -- do a
:36:57. > :37:05.comprehensive school. We need to show that we are standing up for low
:37:06. > :37:07.income. Thank Q, both of you. You are watching the Sunday Politics.
:37:08. > :37:25.Coming up in just under 20 minutes, Coming up in just under 20 minutes,
:37:26. > :37:35.In the East Midlands, a fatal lung illness, but diagnosed five days too
:37:36. > :37:43.early to qualify for compensation. It happened a long time ago. So what
:37:44. > :37:46.matters what day they do the investigations?
:37:47. > :37:51.And after a spate of good figures on jobs, housing and investment, we'll
:37:52. > :37:54.be asking; are the good times back? Hello, I'm Jon Hess and my guests
:37:55. > :37:57.today are the Conservative's prospective candidate for the Derby
:37:58. > :38:00.North seat, Amanda Solloway who'll be hoping that the good times are
:38:01. > :38:04.back and the Conservatives can take the credit. And a regular visitor,
:38:05. > :38:12.Labour's Leicester South MP, Jon Ashworth. Who'll be out to prove it
:38:13. > :38:17.would all be much better under Labour. Welcome to you both.
:38:18. > :38:20.First, we've heard the claims, now we have the figures: the under
:38:21. > :38:23.occupancy penalty or bedroom tax is one of the most controversial issues
:38:24. > :38:27.in politics at the moment. And the National Housing Federation has just
:38:28. > :38:30.released the figures for the impact it's having in the region. They show
:38:31. > :38:34.that the most affected areas in the East Midlands are our big cities.
:38:35. > :38:41.Nottingham has the highest number of families hit by the penalty with
:38:42. > :38:49.5,288. In Leicester it's 3,402. And in Derby 2,303. Rutland is the least
:38:50. > :38:51.affected with just 151 households. Overall, the National Housing
:38:52. > :38:54.Federation calculated that 35,000 families in the East Midlands have
:38:55. > :39:02.been affected, with an average loss in housing benefit of ?718 a year.
:39:03. > :39:09.Giving a figure across the region of just over ?25million.
:39:10. > :39:18.And, Jon Ashworth, you could say that's ?25 million of taxpayers'
:39:19. > :39:23.money that's been saved. Not really because a lot of councils across the
:39:24. > :39:29.region are building up huge arrears because lots of people cannot afford
:39:30. > :39:35.to pay this tax. It is a cruel piece of legislation, hitting a lot of
:39:36. > :39:41.honourable people, disabled people. A woman got in touch with me, she is
:39:42. > :39:48.57 with grandkids, she has to go to food banks now because she cannot
:39:49. > :39:57.pay yet and Labour would get rid of this. This issue is fast becoming
:39:58. > :40:01.this government's poll tax. What we needed to do was something about it
:40:02. > :40:08.and the fact is under the last government, housing benefit doubled.
:40:09. > :40:16.You have in the house and opportunity of a family of five
:40:17. > :40:27.people or two people. It makes sense to swap it so you have five people
:40:28. > :40:31.in a house suitable. We have had to eats saying it was originally
:40:32. > :40:40.considered by Labour but aimed at Private landlords. They would be
:40:41. > :40:45.penalised for surplus rooms. The past Labour government has consulted
:40:46. > :40:50.in different ways to make savings. If people are forced out of their
:40:51. > :40:55.council properties and they are forced into the private sector, they
:40:56. > :41:05.will pay more in housing benefits so the taxpayer will lose out. From my
:41:06. > :41:11.point of view it is not crazy. My dad lives in a council house and my
:41:12. > :41:17.auntie. Neither had to move because the policy is they can stay in their
:41:18. > :41:20.own home because they are there. A new bill to give compensation to
:41:21. > :41:22.people who've contracted fatal illnesses after working with
:41:23. > :41:25.asbestos, is making its way through Parliament. The government say it's
:41:26. > :41:29.a breakthrough. But campaigners in the East Midlands say it doesn't go
:41:30. > :41:32.far enough. Chris Doidge has met a Derbyshire man suffering from
:41:33. > :41:37.mesothelioma, an illness caused by working with asbestos which is
:41:38. > :41:40.always fatal. He missed out on financial help, because he was
:41:41. > :41:56.diagnosed FIVE days short of the cut off point.
:41:57. > :42:01.When it was being installed in buildings or even used to make
:42:02. > :42:06.loading, people were blase about asbestos. But with symptoms taking
:42:07. > :42:10.many decades to appear, the consequences are now becoming very
:42:11. > :42:15.clear and 40 insurers, very expensive. Last year the government
:42:16. > :42:20.struck a deal with insurance companies creating a fund to support
:42:21. > :42:25.victims of asbestos whose employers had disappeared or cannot prove they
:42:26. > :42:30.were insured. But as part of the agreement, people whose mesothelioma
:42:31. > :42:33.was diagnosed before last July and who cannot call upon a valid
:42:34. > :42:40.insurance policy will receive nothing. Keith worked with asbestos
:42:41. > :42:45.for just a few days more than 60 years ago. Fit, healthy and able to
:42:46. > :42:52.take energetic holidays he was diagnosed last summer. Had you been
:42:53. > :43:00.diagnosed five days later, you would have qualified. Yes, but I cannot
:43:01. > :43:08.understand why there should be any cut`off date because this happened
:43:09. > :43:16.to me. It happened 60 years ago so why should it make any difference
:43:17. > :43:20.what date it was that they started doing investigations? This law firm
:43:21. > :43:26.represents hundreds with mesothelioma and it thinks one in
:43:27. > :43:34.five will miss out because of the scheme. Hapsburg 's of these East
:43:35. > :43:41.Midlands industrial heritage, it says there are dozens who stand to
:43:42. > :43:52.lose out. There is no reason why people before that date should be
:43:53. > :43:56.excluded. I represent many sufferers who are not eligible for a payment
:43:57. > :44:04.under this new scheme and that seems grossly unfair. What the insurance
:44:05. > :44:08.industry and the government have developed is a carefully balanced
:44:09. > :44:14.package which provides as much support as can be provided to those
:44:15. > :44:18.people who are suffering with mesothelioma relative to the small
:44:19. > :44:24.and medium enterprises who do not want to see their insurance premiums
:44:25. > :44:29.increase. Campaigners say it is good news that the thousands who will be
:44:30. > :44:33.diagnosed in the future will be compensated for the harm asbestos
:44:34. > :44:38.did to them, but for those whose diagnosis came to soon, the lack of
:44:39. > :44:46.financial support to them and their families as to their worry. Keep my
:44:47. > :44:52.fingers crossed, I got away with it, I thought, but after 60 years, it is
:44:53. > :44:57.quite a long time to wait for something to happen to you.
:44:58. > :45:00.Remember that Keith missed out on financial help, because he was
:45:01. > :45:03.diagnosed FIVE days short of the cut off point. With me is Joanne Gordon,
:45:04. > :45:09.who campaigns for asbestos victims in the East Midlands. Joanne, how
:45:10. > :45:17.typical is a case like Keith's? We have a number of cases of people who
:45:18. > :45:23.have died and cannot chase that insurer and will get nothing under
:45:24. > :45:27.this new scheme. It is a terrible thing. People don't want it for
:45:28. > :45:36.themselves, they want to provide for their families. They want to provide
:45:37. > :45:42.compensation for their families. You must be pleased the government has
:45:43. > :45:49.introduced some form of scheme? Yes, but it is not going far enough.
:45:50. > :45:55.Amanda, do you think the deadline that caught out Keith was rather
:45:56. > :46:02.arbitrary and a bit unfair? It is a horrible disease and I feel for
:46:03. > :46:06.Keith and anyone who suffers. I welcome the fact that this is going
:46:07. > :46:12.through and we are doing something about it. As it goes through, we
:46:13. > :46:16.will see how it progresses. Is it to the credit of the coalition that
:46:17. > :46:23.there has been some movement on this? I am pleased there has been
:46:24. > :46:27.movement but what I would say is the consultation on this started under
:46:28. > :46:33.the last government and there is a sense from the campaigners that the
:46:34. > :46:37.government have caved in to the insurance industry, they have not
:46:38. > :46:43.push them hard enough on this. You talk about the last Labour
:46:44. > :46:46.government getting underway at a consultation process but it has
:46:47. > :46:55.taken the coalition to get this off the ground? Stuff did happen under
:46:56. > :47:01.Labour. They won a case in the High Court where a victim had to prove
:47:02. > :47:08.which employer in their past caused the asbestos caused mesothelioma.
:47:09. > :47:15.The insurance industry have been pushing back on this. That is key.
:47:16. > :47:26.Won't this be seen as a victory for the powerful law `` lobbying
:47:27. > :47:36.organisations? I hope it will be a victory for all asbestos sufferers.
:47:37. > :47:42.Does it go far enough? Personally I would like to see this considered.
:47:43. > :47:47.The Department of work and pensions says the scheme is a major
:47:48. > :47:54.breakthrough. It says they are also paying dependence and to make sure
:47:55. > :48:01.the scheme is affordable, they also had to take tough decisions. Which
:48:02. > :48:09.means we cannot pay out to every dependent of every person who has
:48:10. > :48:15.died. I do not think the cost is prohibitive. The insurance industry
:48:16. > :48:19.have taken ?800 million in unpaid compensation so they can afford to
:48:20. > :48:25.give something back to the victim is. We are asking for 100% of
:48:26. > :48:33.average compensation and we are asking for at least it to be paid
:48:34. > :48:37.back to February 2010 when the government took over the
:48:38. > :48:44.consultation. They discussed it with the insurance industry exclusive
:48:45. > :48:47.without victim representation. There will be some people who will think
:48:48. > :48:53.if the insurance industry pick`up the entire tab for what is a
:48:54. > :48:59.dreadful illness, it does mean premiums will go up. No. The
:49:00. > :49:05.insurance industry have set a maximum at which they can pay and at
:49:06. > :49:20.100% compensation they can pay that over ten years. Jon, this
:49:21. > :49:25.legislation is still to come to the Commons and go through Parliament.
:49:26. > :49:32.Is it the type of thing you would like to back? It will go to the
:49:33. > :49:36.house of commons in two weeks time. If we thought we could get some
:49:37. > :49:41.amendments down to deal with these different issues, we would support
:49:42. > :49:45.it. If you start amending the bill it delays the whole process and
:49:46. > :49:49.there are people out there who need something so that is something we
:49:50. > :49:56.need to look at. Hopefully the government will listen to concerns
:49:57. > :50:02.and take these on board. Amanda, it strikes me you would welcome that.
:50:03. > :50:11.Absolutely. The other thing is we have been looking at the time. Time
:50:12. > :50:15.is crucial in all of these things. Lots of good things hopefully going
:50:16. > :50:21.through. If you have the chance to redraw the legislation, what would
:50:22. > :50:31.be the key things you would want to see? A look at the timings on these.
:50:32. > :50:36.With that be welcome to you? It certainly would. If we can take this
:50:37. > :50:40.back to February 2010 and then the teams like Keith can get
:50:41. > :50:43.compensation. Now, are the good times finally
:50:44. > :50:47.ready to roll again? We've been used to years of bad news, but suddenly
:50:48. > :50:49.this week, there's been a spate of more optimistic stories. On the
:50:50. > :50:52.economy, the Derbyshire and Nottinghamshire Chamber of Commerce
:50:53. > :50:57.has reported that orders are up and more firms are looking to take on
:50:58. > :51:00.staff. Meanwhile, there's been an increase in new homes being built
:51:01. > :51:04.and house prices are rising too, if only by just over one per cent.
:51:05. > :51:07.Finally, there's been tens of millions of pounds of investment
:51:08. > :51:19.announced this week in roads and buildings across the East Midlands.
:51:20. > :51:25.Amanda, you are a business consultant. What message are you
:51:26. > :51:30.getting for businesses now? An optimistic message. The opportunity
:51:31. > :51:36.to set up businesses which is vital. I work in manufacturing, the
:51:37. > :51:50.opportunity for apprenticeships, I am feeling very buoyed. Something is
:51:51. > :51:57.going on out there. David Cameron and George Osborne think they have
:51:58. > :52:01.sorted the economy out now. That is a bit presumptuous. If you look at
:52:02. > :52:07.what is happening in the economy, wages have been growing at much less
:52:08. > :52:15.a pace than prices throughout the whole of this government. People are
:52:16. > :52:19.worse off by ?1600. Are we not now seeing the advantages of having a
:52:20. > :52:24.five`year parliament because both the political and economic cycle are
:52:25. > :52:31.starting to work in favour of this government and isn't that bad news
:52:32. > :52:34.for Labour? I am interested in how people in Leicester and the East
:52:35. > :52:40.Midlands are feeling and they are feeling worse off because of this
:52:41. > :52:44.cost of living crisis. Gas and electricity bills rocketing, train
:52:45. > :52:50.fares rocketing, these are the issues the government need to be
:52:51. > :52:56.dealing with. That is the reality for many people who you hope will be
:52:57. > :53:02.voting for you. I think we are doing a lot and this has only started the
:53:03. > :53:06.process. But there are some really positive messages, the fact that
:53:07. > :53:13.when I fill my car with petrol it costs me less. My daughter, recently
:53:14. > :53:23.married, would not have been able to get a house and now there is an
:53:24. > :53:31.opportunity for her to be able to do this. Really good messages out there
:53:32. > :53:36.and I don't see this negativity. Labour's mantra in the early days of
:53:37. > :53:42.the coalition was it was cutting too fast and too deep and isn't the
:53:43. > :53:45.problem now that in all those marginal constituencies, the
:53:46. > :53:52.electorate are likely to warm to this talk of economic revival more
:53:53. > :53:57.than maybe Labour's message? Do you think people in Loughborough, Derby
:53:58. > :54:05.field they are better off under this lot? Their bills rocketing, we will
:54:06. > :54:09.freeze them. Childcare costs up 30% and prices are rising higher than
:54:10. > :54:16.wages. You are worse off under David Cameron and George Osborne and I am
:54:17. > :54:21.sure people know that. Let's find out some of those views because What
:54:22. > :54:24.counts when it comes to the ballot box is whether people feel the
:54:25. > :54:27.recovery's underway, and they're feeling the benefit.
:54:28. > :54:31.Des has been to Leicester and met people who were still waiting for
:54:32. > :54:39.the turn up. I am in Leicester and it is the time
:54:40. > :54:44.of year for Christmas cheer but is the recession still here? Everyone
:54:45. > :54:50.has got rose tinted glasses on. I work in catering, in a cafe and
:54:51. > :54:58.people come in and want the cheapest thing they can get because they do
:54:59. > :55:04.not have the spare cash. House prices are going up and companies
:55:05. > :55:09.are taking on more people. That is not necessarily a good thing. All
:55:10. > :55:15.these youngsters want houses but they cannot get on the property
:55:16. > :55:24.ladder. Bad as ever. Money is more tight. House prices are going up,
:55:25. > :55:32.companies taking on a lot of people? Their roster a lot out of work. Are
:55:33. > :55:39.you enjoying Christmas? Not really, it is too expensive. House prices
:55:40. > :55:48.are going up and how do you expect people to afford them? Companies are
:55:49. > :55:56.employing more people. There are not many employing that many people. You
:55:57. > :56:02.are not guaranteed any hours so you are better on benefits.
:56:03. > :56:05.Well, that was just a snapshot, but our team in Leicester told us they
:56:06. > :56:12.couldn't find anyone who thought things were improving. When I look
:56:13. > :56:18.at that it is not the case. People will find it a lot easier to get
:56:19. > :56:23.deposits and start`up loans, they are available. I wonder at the
:56:24. > :56:29.cross`section of people asked about this. After five years of economic
:56:30. > :56:35.gloom, surely you would expect exports to improve, record books and
:56:36. > :56:40.order books to be filling up again. Shouldn't the government take
:56:41. > :56:46.credit? If manufacturing and exports are improving, I am pleased about
:56:47. > :56:51.that but people in Leicester, I am not surprised what they were saying
:56:52. > :56:57.because we know hard`pressed people are ?1600 worse off. They have to do
:56:58. > :57:03.something about it. They have to freeze bills. This cost of living
:57:04. > :57:11.thing is causing huge problems and we have a government doing nothing
:57:12. > :57:16.about it. We had a president of the CBI saying in a speech in Leicester
:57:17. > :57:21.saying any economic revival has to be shared and he was talking about
:57:22. > :57:27.pay packets being boosted to help people cope with the slump. Our
:57:28. > :57:36.manufacturers, our bosses going to be generous to boost pay packets? In
:57:37. > :57:41.the manufacturing, if you start to prosper you will reward people. I am
:57:42. > :57:44.a great believer that what we need to do is boost industry,
:57:45. > :57:49.manufacturing and all the stuff we are doing are all helping towards
:57:50. > :57:53.that. Time for a round`up of some of the other political stories in the
:57:54. > :58:01.East Midlands this week ` in 60 seconds.
:58:02. > :58:05.The battle over where to bury Richard III heads to the High Court
:58:06. > :58:10.for a hearing in front of judges on whether he should be reinterred in
:58:11. > :58:16.Leicester all your. The Conservative MEP Mike Larkin has
:58:17. > :58:22.welcomed steps towards ending the Strasse board circus. The habit of
:58:23. > :58:27.splitting the European Parliament sessions between Strasbourg and
:58:28. > :58:32.Brussels. The European Parliament has voted to look at reforming the
:58:33. > :58:38.system and the regions smell politicians have been joining in
:58:39. > :58:44.with Movember. Growing a moustache to raise money for cancer research.
:58:45. > :58:51.Alan Charles is not enjoying his own attempts. I am looking forward to
:58:52. > :58:57.when I can shave it off again. Meanwhile, Mark Spencer is growing
:58:58. > :59:05.one also but his moustache has been likened to that of a Mexican drug
:59:06. > :59:13.lord. Having lost the City of Culture, Leicester needs to hold
:59:14. > :59:18.onto Richard's bones. We are going to hold onto Richard the third. This
:59:19. > :59:26.High Court thing, what a waste of time. He should stay in Leicester.
:59:27. > :59:32.Movember, what do you think of these men, colleagues of yours? Mark
:59:33. > :59:39.Spencer looked more like a refugee from the Village people! Probably
:59:40. > :59:46.yes! I thought he looked rather dashing. Let's not forget what it is
:59:47. > :59:53.all about, it is a serious message to give. Jon, are you tempted? Who
:59:54. > :59:59.knows. When I was on paternity leave, a group a beard so maybe I
:00:00. > :00:06.will grow a beard. Why just Movember? Exactly, all year round!
:00:07. > :00:08.That's the Sunday Politics in the East Midlands, thanks to Amanda
:00:09. > :00:10.Solloway and Jon Ashworth. Don't forget to catch
:00:11. > :00:14.those people who want to cycle. We will be returning to this one. Thank
:00:15. > :00:25.you. A little bit of history was made at
:00:26. > :00:30.Prime Minister's Questions this week. A teensy tiny bit. It wasn't
:00:31. > :00:32.David Cameron accusing one MP of taking "mind-altering substances" -
:00:33. > :00:36.they're always accusing each other of doing that. No, it was the first
:00:37. > :00:39.time a Prime Minister used a live tweet sent from someone watching the
:00:40. > :00:48.session as ammunition at the dispatch box. Let's have a look We
:00:49. > :00:54.have had some interesting interventions from front edges past
:00:55. > :00:58.and present. I hope I can break records by explaining that a tweet
:00:59. > :01:02.has just come in from Tony McNulty, the former Labour security
:01:03. > :01:07.minister, saying that the public are desperate for a PM in waiting who
:01:08. > :01:12.speaks for them, not a Leader of the Opposition in dodging in partisan
:01:13. > :01:16.Westminster Village knock about So I would stay up with the tweets if
:01:17. > :01:21.you want to get on the right side of this one! We are working on how the
:01:22. > :01:25.Prime Minister managed to get that wheat in the first place. What did
:01:26. > :01:32.you think when you saw it being read out? I was certainly watching the
:01:33. > :01:36.Daily Politics. I almost fell off my chair! It was quite astonishing He
:01:37. > :01:41.didn't answer the question - he didn't do that the whole time. But I
:01:42. > :01:46.stand by what the tweets said. I have tweeted for a long time on
:01:47. > :01:52.PMQs. Normally I am praising Ed Miliband to the hilt, but no one
:01:53. > :01:56.announces that in Parliament! Because the Prime Minister picked up
:01:57. > :02:01.on what you said, it unleashed some attacks on you from the Labour side.
:02:02. > :02:05.It did, minor attacks from some very junior people. Most people were
:02:06. > :02:11.supportive of what I said. They took issue with the notion of not doing
:02:12. > :02:16.it until 12:30pm, when it wasn't available for the other side to use.
:02:17. > :02:21.Instant history, and instantly forgettable, I would say. Do you
:02:22. > :02:25.think you have started a bit of a trend? I hope not, because the
:02:26. > :02:35.dumbing down of PMQs is already on its way. Most people tweet like mad
:02:36. > :02:39.through PMQs! Is a measure of how post-modern we have become, we have
:02:40. > :02:45.journalists tweeting about someone talking about a tweet. That is the
:02:46. > :02:48.level of British politics. I am horrified by this development. The
:02:49. > :02:55.whole of modern life has become about observing people -- people
:02:56. > :03:00.observing themselves doing things. Do we know what happened? Somebody
:03:01. > :03:05.is monitoring the tweets on behalf of the Prime Minister or the Tory
:03:06. > :03:09.party. They see Tony's tweet. They then print it out and give it to
:03:10. > :03:14.him? There was a suggestion that Michael Goves had spotted it, but
:03:15. > :03:24.Craig Oliver from the BBC had this great sort of... Craig Oliver was
:03:25. > :03:28.holding up his iPad to take pictures of the Prime Minister, which he then
:03:29. > :03:32.tweeted, from the Prime Minister. People will now be tweeting in the
:03:33. > :03:38.hope that they will be quoted by the Prime Minister, or the Leader of the
:03:39. > :03:44.Opposition. I wasn't doing that I'm just talking about the monster you
:03:45. > :03:49.have unleashed! I hope it dies a miserable death. I think Tony is a
:03:50. > :03:59.good analysis -- a good analyst of PMQs on Twitter. Moving onto the
:04:00. > :04:07.Co-op. You were a Co-op-backed MP, white you? I was a Co-op party
:04:08. > :04:11.member. There are two issues here about the Co-op and the Labour
:04:12. > :04:16.Party. All the new music suggests that the Co-op will now have to
:04:17. > :04:21.start pulling back from lending or donating to the Labour Party, which,
:04:22. > :04:24.at a time when Mr Miliband is going through changes that are going to
:04:25. > :04:30.cut of the union funds, it seems quite dangerous. There are three
:04:31. > :04:34.things going on. There's the relationship that the party has
:04:35. > :04:39.politically with the Co-op party, there is the commercial relationship
:04:40. > :04:43.you referred to, and then there is this enquiry into the comings and
:04:44. > :04:50.goings of Flowers and everybody else. The Tories, at their peril,
:04:51. > :04:54.will mix the three up. There's a lot of things going on with a bang.
:04:55. > :04:59.Labour has some issues around funding generally, and they are
:05:00. > :05:07.potentially exacerbated by the Co-op issue. The Labour Party gets soft
:05:08. > :05:14.loans from the Co-op bank, and it gets donations. ?800,000 last year.
:05:15. > :05:18.Ed Balls got about ?50,000 for his private office. You get the feeling,
:05:19. > :05:24.given the state of the Co-operative Bank now, that that money could dry
:05:25. > :05:28.up. We will see. There's lots of speculation in the papers today At
:05:29. > :05:33.the core, the relationship between the Co-op party and the Labour Party
:05:34. > :05:38.is a proud one, and a legitimate one. I don't think others always
:05:39. > :05:43.understand that. Here is an even bigger issue. Is it not possible
:05:44. > :05:50.that the Co-op bank will cease to exist in any meaningful way as a
:05:51. > :06:01.Co-op bank? Is the bane out means it is 70% owned -- the bail out means
:06:02. > :06:06.that it is 70% owned, or 35% going to a hedge fund, I think I read
:06:07. > :06:10.Yes, there is a move from the mutualism of the Co-op. But don t
:06:11. > :06:21.confuse the Co-op bank with the Co-op Group. Others have done that.
:06:22. > :06:29.I haven't. Here's the rub. The soft loans that Labour gets. They got
:06:30. > :06:38.?1.2 million from this. And 2.4 million. They are secured against
:06:39. > :06:44.future union membership fees of the party. What is Mr Miliband doing? He
:06:45. > :06:49.is trying to end that? You have this very difficult confluence of events,
:06:50. > :06:53.which is, could these wonderful soft loans that Labour has had from the
:06:54. > :06:59.Co-op, could they be going? And these union reforms, where Ed
:07:00. > :07:04.Miliband is trying to create a link between individuals and donations to
:07:05. > :07:08.the Labour Party... Clearly, there could be real financial difficulties
:07:09. > :07:11.here. The government needs to be careful, because George Osborne
:07:12. > :07:14.launched one of his classic blunderbuss operations this week,
:07:15. > :07:22.which is that the Labour Party is to blame for Paul Flowers' private
:07:23. > :07:28.life. No, it's not. And that all the problems, essentially... Look at
:07:29. > :07:32.what George Osborne was doing in Europe. He was trying to change the
:07:33. > :07:38.capital requirement rules that would make it easier for the Co-op to take
:07:39. > :07:40.over Lloyd's. If there is to be a big investigation, George Osborne
:07:41. > :07:46.needs to be careful of what he wishes for. This is another example
:07:47. > :07:49.of the Westminster consensus. All of the Westminster parties were in
:07:50. > :07:54.favour of the Britannia takeover. This is how the Co-op ended up with
:07:55. > :07:58.all this toxic rubbish on its balance sheet. All the major parties
:07:59. > :08:02.were in favour of going to get the Lloyds branches. The Tories tried to
:08:03. > :08:09.outdo Labour in being more pro-Co-op. There was nobody in
:08:10. > :08:15.Westminster saying, hold on, this doesn't work. It is like the
:08:16. > :08:20.financial bubble all over again Everyone was in favour of that at
:08:21. > :08:24.the time. I think there is no evidence so far that the storm is
:08:25. > :08:29.cutting through to the average voter. If I were Ed Miliband, I
:08:30. > :08:33.would let it die a natural death. I would not write to an editorial
:08:34. > :08:39.column for a national newspaper on a Sunday. That keeps the issue alive,
:08:40. > :08:47.and it makes him look oversensitive and much better at dishing it out
:08:48. > :08:50.than taking it. I agree about that. The Labour press team tweeted this
:08:51. > :09:00.week saying that it was a new low for the times. And this was
:09:01. > :09:06.re-tweeted by Ed Miliband. It isn't a great press attitude. It is very
:09:07. > :09:11.Moni. Bill Clinton went out there and fought and made the case. So did
:09:12. > :09:18.Tony Blair. If you just say, they are being horrible to us, it looks
:09:19. > :09:23.pathetic. And it will cut through on Osborne and the financial
:09:24. > :09:33.dimensional is, not political. I shall tweet that later! While we
:09:34. > :09:38.have been talking, Mr Miliband has been on Desert Island Discs. He
:09:39. > :09:46.might still be on it. Let's have a listen to what he had to say.
:09:47. > :09:58.# Take on me, take me on. # And threw it all, she offers me
:09:59. > :10:09.protection. # A lot of love and affection.
:10:10. > :10:25.# Whether I'm right or wrong #. # Je Ne Regrette Rien. #.
:10:26. > :10:31.Obviously, that was the music that Ed Miliband chose. Who thought -
:10:32. > :10:41.you would have thought he would choose Norman Lamont's theme tune!
:10:42. > :10:52.He chose Jerusalem... He has no classical background at all. He had
:10:53. > :11:00.no Beethoven, no Elgar. David Cameron had Mendelssohn. And Ernie,
:11:01. > :11:10.the fastest Notman in the West. -- fastest milkman. Tony Blair chose
:11:11. > :11:14.the theme tune to a movie. Tony Blair's list was chosen by young
:11:15. > :11:24.staffers in his office. It absolutely was. Tony Blair's list
:11:25. > :11:28.was chosen by staff. The Ed Miliband this was clearly chosen by himself,
:11:29. > :11:38.because who would allow politician to go out there and say that they
:11:39. > :11:42.like Aha. I am the same age as Ed Miliband, and of course he likes
:11:43. > :11:53.Aha. That was the tumour was played in the 80s. Sweet Caroline. It is
:11:54. > :12:02.Angels by Robbie Williams. I was 14-year-old girl when that came out.
:12:03. > :12:09.I thought Angels was the staple of hen nights and chucking out time in
:12:10. > :12:12.pubs. The really good thing about his list is that the Smiths to not
:12:13. > :12:17.appear. The Smiths were all over David Cameron's list. The absolutely
:12:18. > :12:27.miserable music of Morris he was not there. What was his luxury? And
:12:28. > :12:33.Indian takeaway! Again, chosen for political reasons. I would agree
:12:34. > :12:41.with the panel about Aha, but I would expect -- I would respect his
:12:42. > :12:46.right to choose. Have you been on Desert Island Discs? I have. It took
:12:47. > :12:50.me three weeks to choose the music. It was the most difficult decision
:12:51. > :12:56.in my life. What was the most embarrassing thing you chose? I
:12:57. > :13:01.didn't choose anything embarrassing. I chose Beethoven, Elgar, and some
:13:02. > :13:13.proper modern jazz. Anything from the modern era? Pet Shop Boys.
:13:14. > :13:16.That's all for today. The Daily Politics will be on BBC Two at
:13:17. > :13:20.lunchtime every day next week, and we'll be back here on BBC One at
:13:21. > :13:23.11am next week. My luxury, by the way, was a wind-up radio! Remember,
:13:24. > :13:30.if it's Sunday, it's the Sunday Politics.