24/11/2013 Sunday Politics East Midlands


24/11/2013

Andrew Neil and John Hess present the latest political stories, with Conservative chairman Grant Shapps and a look at Ed Miliband's choices for Desert Island Discs.


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Morning, folks. Welcome to the Sunday Politics.

:00:36.:00:40.

Labour's been hit hard by scandals at the Co-op. Ed Miliband says the

:00:41.:00:44.

Tories are mudslinging. We'll speak to Conservative Chairman Grant

:00:45.:00:47.

Shapps. Five years on from the financial

:00:48.:00:49.

crisis, and we're still talking about banks in trouble. Why haven't

:00:50.:00:53.

the regulators got the message? We'll ask the man who runs the

:00:54.:00:58.

City's new financial watchdog. And he used to have a windmill on

:00:59.:01:01.

his roof and talked about giving hugs to hoodies and huskies. These

:01:02.:01:06.

days, not so much. Has the plan to make the

:01:07.:01:12.

In the East Midlands: Campaigners want more help for people dying from

:01:13.:01:17.

illness caused by warned that benefit falls will be to

:01:18.:01:19.

homelessness and population ships. What is the evidence?

:01:20.:01:26.

And as always, the political panel that reaches the parts other shows

:01:27.:01:31.

can only dream of. Janan Ganesh Helen Lewis and Nick Watt. They ll

:01:32.:01:35.

be tweeting faster than England loses wickets to Australia. Yes

:01:36.:01:39.

they're really that fast. First, some big news overnight from

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Geneva, where Iran has agreed to curb some of its nuclear activities

:01:43.:01:45.

in return for the partial easing of sanctions. Iran will pause the

:01:46.:01:50.

enrichment of uranium to weapons grade and America will free up some

:01:51.:02:00.

funds for Iran to spend. May be up to $10 billion. A more comprehensive

:02:01.:02:03.

deal is supposed to be done in six months. Here's what President Obama

:02:04.:02:06.

had to say about this interim agreement. We have pursued intensive

:02:07.:02:15.

diplomacy, bilaterally with the Iranians, and together with our

:02:16.:02:19.

partners, the United Kingdom, France, Germany, Russia and China,

:02:20.:02:23.

as well as the European Union. Today, that diplomacy opened up a

:02:24.:02:29.

new path towards a world that is more secure, a future in which we

:02:30.:02:35.

can verify that Iraq and's nuclear programme is peaceful, and that it

:02:36.:02:42.

cannot build a nuclear weapon. President Obama spoke from the White

:02:43.:02:45.

House last night. Now the difficulty begins. This is meant to lead to a

:02:46.:02:51.

full-scale agreement which will effectively end all sanctions, and

:02:52.:02:57.

end Iran's ability to have a bomb. The early signs are pretty good The

:02:58.:03:01.

Iranian currency strengthened overnight, which is exactly what the

:03:02.:03:07.

Iranians wanted. Inflation in Iraq is 40%, so they need a stronger

:03:08.:03:14.

currency. -- information in Iran. France has played a blinder. It was

:03:15.:03:18.

there intransigence that led to this. Otherwise, I think the West

:03:19.:03:22.

would have led to a much softer deal. The question now becomes

:03:23.:03:27.

implementation. Here, everything hinges on two questions. First, who

:03:28.:03:33.

is Hassan Rouhani? Is he the Iranians Gorbachev, a serious

:03:34.:03:38.

reformer, or he's here much more tactical and cynical figure? Or

:03:39.:03:45.

within Iran, how powerful is he There are military men and

:03:46.:03:47.

intelligence officials within Iran who may stymie the process. The

:03:48.:03:55.

Western media concentrate on the fact that Mr Netanyahu and the

:03:56.:03:59.

Israelis are not happy about this. They don't often mention that the

:04:00.:04:04.

Arab Gulf states are also very apprehensive about this deal. I read

:04:05.:04:09.

this morning that the enemies of Qatar and Kuwait went to Saudi king.

:04:10.:04:20.

-- the MAs row. That is the key thing to watch in the next couple of

:04:21.:04:25.

weeks. There was a response from Saudi Arabia, but it came from the

:04:26.:04:30.

Prime Minister of Israel, who said this was a historic mistake. The

:04:31.:04:34.

United States said there would be no enrichment of uranium to weapons

:04:35.:04:38.

grade. In the last few minutes, the Iranian Foreign Minister has tweeted

:04:39.:04:42.

to say that there is an inalienable right -- right to enrich. The key

:04:43.:04:52.

thing is the most important thing that President Obama said in his

:04:53.:04:57.

inaugural speech. He reached out to Iran. It failed under President

:04:58.:05:01.

McKenna jab. Under President Rouhani, there seems to be progress.

:05:02.:05:07.

There is potentially now what he talked about in that first inaugural

:05:08.:05:12.

address potentially coming through. In the end, the key issue - and we

:05:13.:05:18.

don't know the answer - is the supreme leader, not the president.

:05:19.:05:22.

Will the supreme leader agreed to Iran giving up its ability to create

:05:23.:05:27.

nuclear weapons? This is the huge ambiguity. Ayatollah Khamenei

:05:28.:05:33.

authorise the position that President Rouhani took to Geneva.

:05:34.:05:39.

That doesn't mean he will sign off on every bit of implementation over

:05:40.:05:44.

the next six months. Even when President Ahmadinejad was president,

:05:45.:05:50.

he wasn't really President. We in the West have to resort to a kind of

:05:51.:05:55.

Iranians version of the study of the Kremlin, to work out what is going

:05:56.:06:06.

on. And the problem the president faces is that if there is any

:06:07.:06:12.

sign... He can unlock these funds by executive order at the moment, but

:06:13.:06:16.

if he needs any more, he has to go to Congress. Both the Democrat and

:06:17.:06:21.

the Republican side have huge scepticism about this. And he has

:06:22.:06:28.

very low credibility now. There s already been angry noises coming

:06:29.:06:33.

from quite a lot of senators. It was quite strange to see that photo of

:06:34.:06:37.

John Kerry hugging Cathy Ashton as if they had survived a ship great

:06:38.:06:41.

together. John Kerry is clearly feeling very happy. We will keep an

:06:42.:06:51.

eye on this. It is a fascinating development.

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More lurid details about the personal life of the Co-op Bank s

:06:55.:06:56.

disgraced former chairman, the Reverend Paul Flowers. The links

:06:57.:07:01.

between Labour, the bank and the wider Co-op movement have caused big

:07:02.:07:04.

problems for Ed Miliband this week, and the Conservatives have been

:07:05.:07:09.

revelling in it. But do the Tory allegations - Ed Miliband calls them

:07:10.:07:13.

"smears" - stack up? Party Chairman Grant Shapps joins us from Hatfield.

:07:14.:07:23.

Welcome to the programme. When it comes to the Co-op, what are you

:07:24.:07:32.

accusing Labour of knowing and when? I think the simple thing to say here

:07:33.:07:36.

is that the Co-op is an important bank. They have obviously got into

:07:37.:07:41.

difficulty with Reverend flowers, and our primary concern is making

:07:42.:07:45.

sure that that is properly investigated, and that we understand

:07:46.:07:48.

what happened at the bank and how somebody like Paul Flowers could

:07:49.:07:52.

have ended up thing appointed chairman. You wrote to edge Miliband

:07:53.:07:57.

on Tuesday and asked him what he knew and when. -- you wrote to Ed

:07:58.:08:04.

Miliband. But by Prime Minister s Questions on Wednesday, David

:08:05.:08:08.

Cameron claims that you knew that Labour knew about his past all

:08:09.:08:15.

along. What is the evidence for that? We found out by Wednesday that

:08:16.:08:21.

he had been a Labour councillor Reverend Flowers, and had been made

:08:22.:08:27.

to stand down. Certainly, Labour knew about that, but somehow didn't

:08:28.:08:30.

seem to think that that made him less appropriate to be the chairman

:08:31.:08:37.

of the Co-op bank. There was no evidence that Mr Miliband or Mr

:08:38.:08:43.

Balls knew about that. I ask you again, what are you accusing the

:08:44.:08:48.

Labour leadership of knowing? We know now that he stood down for very

:08:49.:08:58.

inappropriate images on his computer, apparently. You are

:08:59.:09:01.

telling me that they didn't know. I am not sure that is clear at all. I

:09:02.:09:06.

have heard conflicting reports. There is a much bigger argument

:09:07.:09:10.

about what they knew and when. There was a much bigger issue here. This

:09:11.:09:15.

morning, Ed Miliband has said that they don't have to answer these

:09:16.:09:19.

questions and that these smears This is ludicrous. These are

:09:20.:09:23.

important questions about an important bank, how it ended up

:09:24.:09:26.

getting into this position, and how a disastrous Britannia -- Italia

:09:27.:09:33.

deal happen. -- Britannia deal happened. And we need to know how

:09:34.:09:40.

the bank came off the rails. To be accused of smears for asking the

:09:41.:09:44.

questions is ridiculous. I am just trying to find out what you are

:09:45.:09:48.

accusing Labour of. You saying that the Labour leadership knew about the

:09:49.:09:54.

drug-taking? Sorry, there was some noise here. I don't know what was

:09:55.:10:03.

known and when. We do know that Labour, the party, certainly knew

:10:04.:10:07.

about these very difficult circumstances in which he resigned

:10:08.:10:12.

as a councillor. I think that the Labour Party knew about it. We knew

:10:13.:10:18.

that Bradford did, but not London. Are you saying that Ed Miliband knew

:10:19.:10:21.

about the inappropriate material on the Reverend's laptop? It is

:10:22.:10:26.

certainly the case that Labour knew about it. But did Mr Miliband know

:10:27.:10:33.

about it, and his predilection for rent boys? He will need to answer

:10:34.:10:40.

those questions. It is quite proper to ask those questions. Surely,

:10:41.:10:45.

asking a perfectly legitimate set of questions, not just about that but

:10:46.:10:49.

about how we have ended up in a situation where this bank has made

:10:50.:10:54.

loans to Labour for millions of pounds, that bank and the Unite

:10:55.:10:59.

bank, who is connected to it. And how they made a ?50,000 donation to

:11:00.:11:06.

Ed Balls' office. Ed Balls says that was nothing to do with Reverend

:11:07.:11:11.

Flowers, and yet Reverend Flowers said that he personally signed that

:11:12.:11:16.

off. Lots of questions to answer. David Cameron has already answered

:11:17.:11:20.

them on Wednesday. He said that you now know that Labour knew about his

:11:21.:11:26.

past all along. You have not been able to present evidence that

:11:27.:11:30.

involve Mr Miliband or Mr Balls in that. So until you get that, surely

:11:31.:11:35.

you should apologise? Hang on. He said that Labour knew about this,

:11:36.:11:39.

and they did, because he stood down as a councillor. If Ed Miliband

:11:40.:11:46.

didn't know about that, then why not? This was quite a serious thing

:11:47.:11:50.

that happened. The wider point is about why it is that when you ask

:11:51.:11:55.

perfectly legitimate questions about this bank, about the Britannia deal,

:11:56.:11:58.

and about the background of Mr flowers, why is the response, it is

:11:59.:12:08.

all smears? There are questions about how Labour failed to deal with

:12:09.:12:11.

the deficit and how it hasn't done anything to support the welfare

:12:12.:12:16.

changes, but there is nothing about that. Let us -- lets: To the wider

:12:17.:12:24.

picture of the Co-operative Bank. Labour wanted the Co-op to take over

:12:25.:12:32.

the Britannia Building Society, and it was a disaster. Do you accept

:12:33.:12:37.

that? The government of the day has to be a part of these discussions

:12:38.:12:44.

for regulatory reason. The government in 2009 - Ed Balls was

:12:45.:12:50.

very pleased... But you supported that decision. There was a later

:12:51.:12:56.

deal, potentially, for the Co-op to buy those Lloyds branches. There was

:12:57.:13:00.

a proper process and it didn't go through just recently. If there had

:13:01.:13:08.

been a proper process back in 2 09, would the Britannia deal have gone

:13:09.:13:14.

through? First, you accept that the Tories were in favour of the

:13:15.:13:20.

Britannia take over. Then your Chancellor Osborne went out of his

:13:21.:13:23.

way to facilitate the purchase of the Lloyds branches, even though you

:13:24.:13:27.

had no idea that the Co-op had the management expertise to become a

:13:28.:13:35.

super medium. Correct? The difference is that that deal didn't

:13:36.:13:41.

go through. There was a proper process that took place. Let's look

:13:42.:13:47.

at the process. There was long indications as far back as January

:13:48.:13:53.

2012 that the Co-op, as a direct result of the Britannia take over

:13:54.:13:58.

which you will party supported, was unfit to acquire the Lloyds

:13:59.:14:02.

branches. By January 2012, the Chancellor and the Treasury ignored

:14:03.:14:09.

the warnings. Wide? In 2009, there was political pressure for the

:14:10.:14:13.

Britannia to be brought together. Based on the information available,

:14:14.:14:17.

this was supported, but that process ended up with a very, very

:14:18.:14:20.

problematic takeover of the Britannia. Wind forward to this

:14:21.:14:26.

year, and when the same types of issues were being looked at for the

:14:27.:14:29.

purchase of the Lloyds deal, the proper process was followed, this

:14:30.:14:34.

time with us in government, and that purchase didn't go through. It is

:14:35.:14:38.

important that the proper process is followed, and when it was, it

:14:39.:14:42.

transpired that the deal wasn't going to be done. But it was the

:14:43.:14:52.

Treasury and the Chancellor who were the cheerleaders for the acquisition

:14:53.:14:56.

of the Lloyds branches. But there was a warning that the Co-op did not

:14:57.:15:00.

have enough capital on its balance sheet to make those acquisitions,

:15:01.:15:04.

but instead of heeding those warnings, your people went to

:15:05.:15:09.

Brussels to lobby for the requirements to be relaxed - why on

:15:10.:15:14.

earth did you do that? Our Chancellor went to argue for all of

:15:15.:15:18.

Rajesh banking, not specifically for the Co-op. He was arguing for the

:15:19.:15:23.

mutuals to be given a special ruling. The idea was to make sure

:15:24.:15:29.

that every bank in Britain could have a better deal, particularly the

:15:30.:15:34.

mutuals, as you say. That is a proper thing for the Chancellor to

:15:35.:15:37.

be doing. We could go round in circles here, but in the end, there

:15:38.:15:42.

was not a takeover of the Lloyds branches, that is because we

:15:43.:15:46.

followed a proper process. Had that same rigorous process been followed

:15:47.:15:50.

in 2009, the legitimate question to ask is whether the Co-op would have

:15:51.:15:55.

been -- would have taken over the Britannia. That is a proper question

:15:56.:15:58.

to ask. It is no good to have the leader of the opposition say, as

:15:59.:16:02.

soon as you ask any of these questions about anything where there

:16:03.:16:05.

is a problem for them, they come back with, oh, this is all smears.

:16:06.:16:10.

There are questions to ask about what the Labour government did, the

:16:11.:16:14.

debt and the deficit they left the country with, the way they stopped

:16:15.:16:19.

work from paying in this country. The big question your government has

:16:20.:16:24.

two answer is, why, by July 201 , when it was clear there was a black

:16:25.:16:27.

hole in the Co-op's balance sheet, your government re-confirmed the

:16:28.:16:33.

Co-op as the preferred bidder for Lloyds - why would you do that?

:16:34.:16:38.

Well, look, the good thing is, we can discuss this until the cows come

:16:39.:16:41.

home, but there is going to be a proper, full investigation, so we

:16:42.:16:45.

will find out what happened, all the way back. So, we will be able to get

:16:46.:16:50.

to the bottom of all of this. Grant Shapps, the only reason the Lloyds

:16:51.:16:55.

deal did not go ahead was, despite the Treasury cheerleading, when

:16:56.:17:00.

Lloyds began its due diligence, it found that there was indeed a huge

:17:01.:17:03.

black hole in the balance sheet and that the Co-op was not fit to take

:17:04.:17:08.

over its branches. That wasn't you, it wasn't the Government, it was not

:17:09.:17:13.

the Chancellor, it was Lloyds. You were still cheerleading for the deal

:17:14.:17:19.

to go ahead... Well, as I say, a proper process was followed, which

:17:20.:17:23.

did not result in the purchase of the Lloyds branches. At that proper

:17:24.:17:27.

process been followed with the purchase of the Britannia, under the

:17:28.:17:33.

previous government... Which you supported. Yes, but it may well be

:17:34.:17:38.

that under that previous deal, there was a excess political pressure

:17:39.:17:41.

perhaps put on in order to create that merger, which proved so

:17:42.:17:49.

disastrous. The Tories facilitated it, Grant Shapps, they allowed it to

:17:50.:17:54.

go ahead. I have said, we are going to have a proper, independent

:17:55.:17:58.

review. What I cannot understand is, when you announce a robber,

:17:59.:18:03.

independent review, the response you get to these serious questions. The

:18:04.:18:09.

response is, oh, this is a smear. It is crazy. We are trying to answer

:18:10.:18:14.

the big questions for this country. We have done all of that, and we are

:18:15.:18:24.

out of time. The Reverend Flowers' chairmanship of the Co-op bank was

:18:25.:18:27.

approved by the regulator at the time, which no longer exists. It was

:18:28.:18:32.

swept away by the coalition government in a supposed revolution

:18:33.:18:36.

in regulation. But will its replacement, the Financial Conduct

:18:37.:18:39.

Authority, be different? Adam has been to find out. Come with me for a

:18:40.:18:49.

spin around the Square mile to find out how we regulate our financial

:18:50.:18:53.

sector, which is almost five times bigger than the country's entire

:18:54.:18:58.

annual income. First, let's pick up our guide, journalist Iain Martin,

:18:59.:19:03.

who has just written a book about what went so wrong during the

:19:04.:19:09.

financial crisis. The FSA was an agency which was established to

:19:10.:19:12.

supervise the banks on a day-to day basis. The Bank of England was

:19:13.:19:16.

supposed to have overall responsible at for this to Bolivia the financial

:19:17.:19:20.

system and the Treasury was supposed to take an interest in all of these

:19:21.:19:24.

things. The disaster was that it was not anyone's call responsibility, or

:19:25.:19:30.

main day job, to stay alert as to whether or not the banking system as

:19:31.:19:34.

a whole was being run in a safe manner. And so this April, a new

:19:35.:19:38.

system was set up to police the City. Most of the responsibly delays

:19:39.:19:47.

here, with the Bank of England, and its new Prudential Regulation

:19:48.:19:50.

Authority. And the Financial Services Authority has been replaced

:19:51.:19:54.

with the new Financial Conduct Authority. Can we go to the

:19:55.:20:00.

financial conduct authority, please? Canary Wharf, thank you. Here, it is

:20:01.:20:06.

all about whether the people in financial services are playing by

:20:07.:20:09.

the rules, in particular, how they treat their customers. This place

:20:10.:20:14.

has got new powers, like the ability to ban products it does not like, a

:20:15.:20:18.

new mandate to promote competition in the market, the concept being,

:20:19.:20:22.

more competition means a better market, plus the idea that a new

:20:23.:20:26.

organisation rings a whole new culture. Although these are the old

:20:27.:20:33.

offices of the FSA, so maybe not quite so new after all. It has also

:20:34.:20:38.

inherited the case of the Co-op bank and its disgraced former chairman

:20:39.:20:42.

the Reverend Paul Flowers. The SCA will be part of the investigation

:20:43.:20:46.

into what happened, which will probably involve looking at its own

:20:47.:20:51.

conduct. One member of the Parliamentary commission into

:20:52.:20:54.

banking wonders whether the new regulator, and its new boss, are up

:20:55.:21:00.

to it. I have always said, it is not the architecture which is the issue,

:21:01.:21:04.

it is the powers that the regulator has, and today, it does not seem to

:21:05.:21:08.

me as if there is any increase in that. And with the unfolding scandal

:21:09.:21:14.

at the Co-op, it feels like the new architecture for regulating the City

:21:15.:21:22.

is now facing its first big test. And the chief executive of the

:21:23.:21:24.

Financial Conduct Authority, the SCA, Martin Wheatley, joins me now.

:21:25.:21:30.

Welcome to The Sunday Politics. The failure of bank regulation was one

:21:31.:21:34.

of the clearest lessons of the crash in 2008, and yet two years later, in

:21:35.:21:39.

2010, Paul Flowers is allowed to become chairman of the Co-op - why

:21:40.:21:45.

have we still not got the regulation right? We have made a lot of changes

:21:46.:21:50.

since then. We have created a new regulator, as you know. At the time,

:21:51.:21:54.

we still had a process which allowed somebody to be appointed to a bank

:21:55.:21:57.

and they would go through a challenge, but in the case of Paul

:21:58.:22:01.

Flowers, there was no need for an additional challenge when he was

:22:02.:22:04.

appointed to chairman, because he was already on the board. But going

:22:05.:22:10.

from being on the board to becoming chairman, that is a big jump, and he

:22:11.:22:15.

only had one interview? That is why today, it would be different. But

:22:16.:22:19.

the truth is, that was the system at the time, the system which the FSA

:22:20.:22:25.

operated. He was challenged, we did challenge him, and we said, you do

:22:26.:22:28.

not have the right experience, but at the time, we would not have

:22:29.:22:33.

opposed the appointment. What we needed was additional representation

:22:34.:22:35.

of the board of people who did have banking experience. You can say that

:22:36.:22:40.

that was then and this is now, but up until April of this year, it was

:22:41.:22:45.

still the plan for the Co-op, under Mr Flowers, and despite being

:22:46.:22:48.

seriously wounded by the Britannia takeover, to take on 632 Lloyds

:22:49.:22:55.

branches. That was the Co-op's plan. They needed to pass our test

:22:56.:22:58.

as to whether we thought they were fit to do that, and frankly, they

:22:59.:23:02.

never passed that test. It was not the regulator that stopped them It

:23:03.:23:07.

was. We were constantly pushing back, saying, you have not got the

:23:08.:23:11.

capital, you have no got the systems, and ultimately, they

:23:12.:23:14.

withdrew, when they could not answer our questions. You were asking the

:23:15.:23:19.

right questions, I accept that, but all of the time, the politicians on

:23:20.:23:25.

all sides, they were pushing for it to happen, and I cannot find

:23:26.:23:28.

anywhere where the regulator said, look, this is just not going to

:23:29.:23:34.

happen. I cannot comment on what the politicians were doing, but I

:23:35.:23:38.

continue what we were doing, which was constantly asking the Co-op

:23:39.:23:41.

have you got the systems in place, have you got the people, have you

:23:42.:23:45.

got the capital? And they didn't. But it only came to a head when

:23:46.:23:49.

Lloyds started its own due diligence on the bank, and they discovered

:23:50.:23:53.

that it was impossible for them to take over the branches, it was not

:23:54.:23:57.

the regulator... In fairness, what we do is ask the questions, can you

:23:58.:24:02.

do this deal? And we kept pushing back, and we never frankly got

:24:03.:24:06.

delivered a business plan which we were happy to approve. Is the SCA

:24:07.:24:13.

going to launch its own inquiry into what happened? -- the FCA. The

:24:14.:24:24.

Chancellor has announced what will be a very broad inquiry. There are a

:24:25.:24:29.

number of specifics which we will be able to look at, relating to events

:24:30.:24:34.

over the last five years. Could there be a police investigation I

:24:35.:24:38.

think the police have already announced an investigation. I am

:24:39.:24:42.

talking about into the handling of the bank. It depends. There might

:24:43.:24:46.

be, if there is grim low activity, which we do not know yet. You worked

:24:47.:24:55.

at the FS eight, didn't you? I did. Some of those people who were signed

:24:56.:25:02.

off on the speedy promotion of Mr Flowers, are they now working

:25:03.:25:08.

there? Yes, we have some. I came to join the Financial Services

:25:09.:25:11.

Authority, to lead it into the creation of the new body, the SCA.

:25:12.:25:17.

We had people who were challenging and they did the job. There was not

:25:18.:25:28.

a requirement to approve the role as chairman. There was not even a

:25:29.:25:31.

requirement to interview at that stage. What we did do was to require

:25:32.:25:37.

that he was interviewed, and that the Co-op should get additional

:25:38.:25:48.

experience. One of the people from the old organisation, who signed up

:25:49.:25:53.

on the promotion of Mr Flowers to become chairman is now a

:25:54.:25:56.

nonexecutive director of the Co op, so how does that work? Welcome he

:25:57.:26:03.

was a senior adviser to our organisation, one of the people who

:26:04.:26:07.

made the challenges, and who said, you need more experience on your

:26:08.:26:11.

board. Subsequently he then went and joined the board. Surely that should

:26:12.:26:15.

not be allowed, the regulator and the regulated should not be like

:26:16.:26:20.

that. Well clearly, you need protection, but we have got to get

:26:21.:26:25.

good people in, and frankly, we want the industry to have good people in

:26:26.:26:29.

the industry, so there will be some movement between the regulator and

:26:30.:26:33.

industry. We all wonder whether you have the power or even the

:26:34.:26:37.

confidence to stand up if you look at all of the really bad bank

:26:38.:26:40.

decisions recently, politicians were behind them. It was Gordon Brown who

:26:41.:26:45.

pushed the disastrous merger of Lloyds and RBS. It was Alex Salmond

:26:46.:26:49.

who egged on RBS to buy the world. All three main parties wanted the

:26:50.:26:54.

Co-op to buy Britannia, even though they did not know the debt it would

:26:55.:26:58.

inherit, and all three wanted the Co-op to buy the Lloyds branches -

:26:59.:27:02.

how do you as a regulator stand up to that little concert party? Well,

:27:03.:27:07.

that political pressure exists, our job at the end of the day is to do a

:27:08.:27:12.

relatively technical job and say, does it stack up? And it didn't and

:27:13.:27:16.

we made that point time and time again to the Co-op board. They did

:27:17.:27:19.

not have a business case that we could approve. The bodies on left

:27:20.:27:24.

and right -- the politicians on left and right gave the Co-op special

:27:25.:27:31.

support. They may have done, but that was not you have made a warning

:27:32.:27:38.

about these payday lenders, but I think what most people would like to

:27:39.:27:41.

see is a limit put on the interest they can charge over a period of

:27:42.:27:46.

time - will you do that? We have got a whole set of powers for payday

:27:47.:27:50.

lenders. We will bring in some changes from April next year, and we

:27:51.:27:55.

will bring in further changes as we see necessary. Will you put a limit

:27:56.:27:57.

on the interest they can charge That is something we can study. You

:27:58.:28:03.

do not sound too keen on it? Well, there are a lot of changes we need

:28:04.:28:08.

to make. One change is limiting rollovers, limiting the use of

:28:09.:28:12.

continuous payment authorities. Simply jumping to one trigger would

:28:13.:28:16.

be a mistake. Finally, an issue which I think is becoming a growing

:28:17.:28:21.

concern, because the Government is thinking of subsidising them, 9 %

:28:22.:28:25.

mortgages are back - should we not be worried about that? I think we

:28:26.:28:30.

should if the market has the same experiences that we had back in 2007

:28:31.:28:35.

- oh wait. We are bringing a comprehensive package in under our

:28:36.:28:40.

mortgage market review, which will change how people lend and will put

:28:41.:28:43.

affordability back at the heart of lending decisions. -- 2007-08. You

:28:44.:28:55.

have not had your first big challenge yet, have you? We have

:28:56.:28:56.

many challenges. It was once called the battle of the

:28:57.:29:05.

mods and the rockers - the fight between David Cameron-style

:29:06.:29:07.

modernisers and old-style traditional Tories for the direction

:29:08.:29:10.

and soul of the Conservative Party. But have the mods given up on

:29:11.:29:17.

changing the brand? When David Cameron took over in 2005, he

:29:18.:29:23.

promoted himself as a new Tory leader. He said that hoodies need

:29:24.:29:26.

more love. He was talking about something called the big society. He

:29:27.:29:33.

told his party conference that it was time to that sunshine win the

:29:34.:29:37.

day. There was new emphasis on the environment, and an eye-catching

:29:38.:29:42.

trip to a Norwegian glacier to see first-hand, supposedly, the effects

:29:43.:29:47.

of global warming. This week, party modernise and Nick bone has said

:29:48.:29:51.

that the party is still seen as an old-fashioned monolith and hasn t

:29:52.:29:56.

done enough to improve its appeal. The Tories have put some reforms

:29:57.:30:04.

into practice, such as gay marriage, but they have put more into welfare

:30:05.:30:09.

reform band compassionate conservatism. David Cameron wants

:30:10.:30:13.

talked about leading the greenest government ever. Downing Street says

:30:14.:30:22.

that the quote in the Son is not recognised, get rid of the green

:30:23.:30:28.

crap. At this point in the programme we were expecting to hear from the

:30:29.:30:31.

Energy and Climate Change Minister, Greg Barker. Unfortunately, he has

:30:32.:30:34.

pulled out, with Downing Street saying it's for ""family reasons"".

:30:35.:30:40.

Make of that what you will. However, we won't be deterred. We're still

:30:41.:30:45.

doing the story, and we're joined by our very own mod and rocker - David

:30:46.:30:48.

Skelton of the think-tank Renewal, and Conservative MP Peter Bone.

:30:49.:30:54.

Welcome to you both. I'm glad your family is allowed you to come? David

:30:55.:30:59.

Skelton, getting rid of all the green crap, or words to that effect,

:31:00.:31:04.

that David Cameron has been saying. It is just a sign that Tory

:31:05.:31:07.

modernisation has been quietly buried. I do think that's right

:31:08.:31:13.

Modernisation is about reaching out to the voters, and the work to do

:31:14.:31:19.

that is now more relevant than ever. We got the biggest swing since 931,

:31:20.:31:24.

and the thing is we need to do more to reach out to voters in the North.

:31:25.:31:29.

We need to reach out to non-white voters, and show that the concerns

:31:30.:31:38.

of modern Britain and the concerns of ordinary people is something that

:31:39.:31:42.

we share. And what way will racking up electricity bills with green

:31:43.:31:45.

levies get you more votes in the North of England? We have to look at

:31:46.:31:52.

ways to reduce energy bills. The renewable energy directive doesn't

:31:53.:31:54.

do anything to help cut our emissions, but does decrease energy

:31:55.:32:01.

bills by ?45 a year. We should renegotiate that. That is a part of

:32:02.:32:05.

modernisation and doing what ordinarily people want. And old

:32:06.:32:11.

dinosaurs like you are just holding this modernisation process back I

:32:12.:32:16.

am very appreciative of covering on this programme. The Tory party has

:32:17.:32:21.

been reforming itself for more than 150 years. This idea of modern eyes

:32:22.:32:26.

a is just some invention. We are changing all the time. I'm nice and

:32:27.:32:33.

cuddly! So you are happy that the party made gay marriage almost a

:32:34.:32:38.

kind of symbol of its modernisation? Fine Mac the gay marriage was a free

:32:39.:32:47.

vote. David Cameron was recorded as a rebel there because more Tories

:32:48.:32:51.

voted against his position than ever before. It was said that this was a

:32:52.:32:54.

split between the old and young but it actually was a split between

:32:55.:32:59.

those who were religious and nonreligious. It is a

:33:00.:33:02.

misinterpretation of what happened. Is a modernisation in retreat? I

:33:03.:33:10.

think modernisation is an invention. Seven years ago, in my

:33:11.:33:15.

part of the world, we got three councillors elected, two were 8 and

:33:16.:33:22.

one was 21. A few months ago, a 25-year-old was chosen to fight

:33:23.:33:25.

Corby for the Conservative Party. He came from a comprehensive School. He

:33:26.:33:31.

was one of the youngest. The Tory party is moving on. So you found

:33:32.:33:37.

three young people? Hang on a minute. You can't get away with

:33:38.:33:46.

that. Three in one batch. Does modernisation exist? Modernisation

:33:47.:33:51.

is about watering our appeal and sharing our values are relevant to

:33:52.:33:54.

voters who haven't really thought about voting for us for decades now.

:33:55.:33:59.

Modernisation is about more than windmills and stuff, it is about

:34:00.:34:03.

boosting the life chances of the poorest, it is about putting better

:34:04.:34:11.

schools in poorer areas. It is also saying that modernisation and the

:34:12.:34:16.

Tory party... When has the Tory party been against making poorer

:34:17.:34:20.

people better off? Or against better schools? Do you think Mrs Thatcher

:34:21.:34:24.

was a moderniser when she won all those elections? The problem we have

:34:25.:34:28.

at the moment is that UKIP has grown-up. If we could get all of

:34:29.:34:33.

those people who vote UKIP to vote for us, we would get 47% of the

:34:34.:34:39.

vote. We don't need to worry about voters on the left. We need to worry

:34:40.:34:43.

about the voters in the north, those people who haven't voted for us for

:34:44.:34:52.

decades. Having an EU Referendum Bill is going to get people to

:34:53.:34:57.

vote. We have to reach out to voters, but not by some sort of

:34:58.:35:02.

London based in need. You have to broaden your base. I agree with you

:35:03.:35:07.

on that. We have to broaden our appeal, but this back to the future

:35:08.:35:10.

concept is not going to work. We need something that generally

:35:11.:35:15.

appeals to low and middle-income voters, and something that shows we

:35:16.:35:19.

genuinely care about the life chances of the poorest. Do you think

:35:20.:35:26.

that the people who vote UKIP don't support those aspirations? We are

:35:27.:35:33.

not doing enough to cut immigration. We don't have an EU Referendum Bill

:35:34.:35:36.

stop we have to get the centre right to vote for us again. Do that, and

:35:37.:35:44.

we have it. Tom Pursglove, the 5 euros, will be returned in Corby

:35:45.:35:47.

because we cannot win an election there. -- the 25-year-old. Whether

:35:48.:36:00.

you are moderniser or traditionalist, people, particularly

:36:01.:36:06.

in the North, see you as a bunch of rich men. And rich southerners. You

:36:07.:36:15.

are bunch of rich southerners. We need to do more to show that we are

:36:16.:36:19.

building on lifting the poorest out of the tax. We need to build more

:36:20.:36:26.

houses. There is a perception that the leadership at the moment is

:36:27.:36:31.

rich, and public school educated. What we have to do is get more

:36:32.:36:35.

people from state education into the top. You are going the other way at

:36:36.:36:42.

the moment. That is a fair criticism. Modernisers also say

:36:43.:36:50.

that. I went to a combo hedge of school as well. -- do a

:36:51.:36:56.

comprehensive school. We need to show that we are standing up for low

:36:57.:37:05.

income. Thank Q, both of you. You are watching the Sunday Politics.

:37:06.:37:07.

Coming up in just under 20 minutes, Coming up in just under 20 minutes,

:37:08.:37:25.

In the East Midlands, a fatal lung illness, but diagnosed five days too

:37:26.:37:35.

early to qualify for compensation. It happened a long time ago. So what

:37:36.:37:43.

matters what day they do the investigations?

:37:44.:37:46.

And after a spate of good figures on jobs, housing and investment, we'll

:37:47.:37:51.

be asking; are the good times back? Hello, I'm Jon Hess and my guests

:37:52.:37:54.

today are the Conservative's prospective candidate for the Derby

:37:55.:37:57.

North seat, Amanda Solloway who'll be hoping that the good times are

:37:58.:38:00.

back and the Conservatives can take the credit. And a regular visitor,

:38:01.:38:04.

Labour's Leicester South MP, Jon Ashworth. Who'll be out to prove it

:38:05.:38:12.

would all be much better under Labour. Welcome to you both.

:38:13.:38:17.

First, we've heard the claims, now we have the figures: the under

:38:18.:38:20.

occupancy penalty or bedroom tax is one of the most controversial issues

:38:21.:38:23.

in politics at the moment. And the National Housing Federation has just

:38:24.:38:27.

released the figures for the impact it's having in the region. They show

:38:28.:38:30.

that the most affected areas in the East Midlands are our big cities.

:38:31.:38:34.

Nottingham has the highest number of families hit by the penalty with

:38:35.:38:41.

5,288. In Leicester it's 3,402. And in Derby 2,303. Rutland is the least

:38:42.:38:49.

affected with just 151 households. Overall, the National Housing

:38:50.:38:51.

Federation calculated that 35,000 families in the East Midlands have

:38:52.:38:54.

been affected, with an average loss in housing benefit of ?718 a year.

:38:55.:39:02.

Giving a figure across the region of just over ?25million.

:39:03.:39:09.

And, Jon Ashworth, you could say that's ?25 million of taxpayers'

:39:10.:39:18.

money that's been saved. Not really because a lot of councils across the

:39:19.:39:23.

region are building up huge arrears because lots of people cannot afford

:39:24.:39:29.

to pay this tax. It is a cruel piece of legislation, hitting a lot of

:39:30.:39:35.

honourable people, disabled people. A woman got in touch with me, she is

:39:36.:39:41.

57 with grandkids, she has to go to food banks now because she cannot

:39:42.:39:48.

pay yet and Labour would get rid of this. This issue is fast becoming

:39:49.:39:57.

this government's poll tax. What we needed to do was something about it

:39:58.:40:01.

and the fact is under the last government, housing benefit doubled.

:40:02.:40:08.

You have in the house and opportunity of a family of five

:40:09.:40:16.

people or two people. It makes sense to swap it so you have five people

:40:17.:40:27.

in a house suitable. We have had to eats saying it was originally

:40:28.:40:31.

considered by Labour but aimed at Private landlords. They would be

:40:32.:40:40.

penalised for surplus rooms. The past Labour government has consulted

:40:41.:40:45.

in different ways to make savings. If people are forced out of their

:40:46.:40:50.

council properties and they are forced into the private sector, they

:40:51.:40:55.

will pay more in housing benefits so the taxpayer will lose out. From my

:40:56.:41:05.

point of view it is not crazy. My dad lives in a council house and my

:41:06.:41:11.

auntie. Neither had to move because the policy is they can stay in their

:41:12.:41:17.

own home because they are there. A new bill to give compensation to

:41:18.:41:20.

people who've contracted fatal illnesses after working with

:41:21.:41:22.

asbestos, is making its way through Parliament. The government say it's

:41:23.:41:25.

a breakthrough. But campaigners in the East Midlands say it doesn't go

:41:26.:41:29.

far enough. Chris Doidge has met a Derbyshire man suffering from

:41:30.:41:32.

mesothelioma, an illness caused by working with asbestos which is

:41:33.:41:37.

always fatal. He missed out on financial help, because he was

:41:38.:41:40.

diagnosed FIVE days short of the cut off point.

:41:41.:41:56.

When it was being installed in buildings or even used to make

:41:57.:42:01.

loading, people were blase about asbestos. But with symptoms taking

:42:02.:42:06.

many decades to appear, the consequences are now becoming very

:42:07.:42:10.

clear and 40 insurers, very expensive. Last year the government

:42:11.:42:15.

struck a deal with insurance companies creating a fund to support

:42:16.:42:20.

victims of asbestos whose employers had disappeared or cannot prove they

:42:21.:42:25.

were insured. But as part of the agreement, people whose mesothelioma

:42:26.:42:30.

was diagnosed before last July and who cannot call upon a valid

:42:31.:42:33.

insurance policy will receive nothing. Keith worked with asbestos

:42:34.:42:40.

for just a few days more than 60 years ago. Fit, healthy and able to

:42:41.:42:45.

take energetic holidays he was diagnosed last summer. Had you been

:42:46.:42:52.

diagnosed five days later, you would have qualified. Yes, but I cannot

:42:53.:43:00.

understand why there should be any cut`off date because this happened

:43:01.:43:08.

to me. It happened 60 years ago so why should it make any difference

:43:09.:43:16.

what date it was that they started doing investigations? This law firm

:43:17.:43:20.

represents hundreds with mesothelioma and it thinks one in

:43:21.:43:26.

five will miss out because of the scheme. Hapsburg 's of these East

:43:27.:43:34.

Midlands industrial heritage, it says there are dozens who stand to

:43:35.:43:41.

lose out. There is no reason why people before that date should be

:43:42.:43:52.

excluded. I represent many sufferers who are not eligible for a payment

:43:53.:43:56.

under this new scheme and that seems grossly unfair. What the insurance

:43:57.:44:04.

industry and the government have developed is a carefully balanced

:44:05.:44:08.

package which provides as much support as can be provided to those

:44:09.:44:14.

people who are suffering with mesothelioma relative to the small

:44:15.:44:18.

and medium enterprises who do not want to see their insurance premiums

:44:19.:44:24.

increase. Campaigners say it is good news that the thousands who will be

:44:25.:44:29.

diagnosed in the future will be compensated for the harm asbestos

:44:30.:44:33.

did to them, but for those whose diagnosis came to soon, the lack of

:44:34.:44:38.

financial support to them and their families as to their worry. Keep my

:44:39.:44:46.

fingers crossed, I got away with it, I thought, but after 60 years, it is

:44:47.:44:52.

quite a long time to wait for something to happen to you.

:44:53.:44:57.

Remember that Keith missed out on financial help, because he was

:44:58.:45:00.

diagnosed FIVE days short of the cut off point. With me is Joanne Gordon,

:45:01.:45:03.

who campaigns for asbestos victims in the East Midlands. Joanne, how

:45:04.:45:09.

typical is a case like Keith's? We have a number of cases of people who

:45:10.:45:17.

have died and cannot chase that insurer and will get nothing under

:45:18.:45:23.

this new scheme. It is a terrible thing. People don't want it for

:45:24.:45:27.

themselves, they want to provide for their families. They want to provide

:45:28.:45:36.

compensation for their families. You must be pleased the government has

:45:37.:45:42.

introduced some form of scheme? Yes, but it is not going far enough.

:45:43.:45:49.

Amanda, do you think the deadline that caught out Keith was rather

:45:50.:45:55.

arbitrary and a bit unfair? It is a horrible disease and I feel for

:45:56.:46:02.

Keith and anyone who suffers. I welcome the fact that this is going

:46:03.:46:06.

through and we are doing something about it. As it goes through, we

:46:07.:46:12.

will see how it progresses. Is it to the credit of the coalition that

:46:13.:46:16.

there has been some movement on this? I am pleased there has been

:46:17.:46:23.

movement but what I would say is the consultation on this started under

:46:24.:46:27.

the last government and there is a sense from the campaigners that the

:46:28.:46:33.

government have caved in to the insurance industry, they have not

:46:34.:46:37.

push them hard enough on this. You talk about the last Labour

:46:38.:46:43.

government getting underway at a consultation process but it has

:46:44.:46:46.

taken the coalition to get this off the ground? Stuff did happen under

:46:47.:46:55.

Labour. They won a case in the High Court where a victim had to prove

:46:56.:47:01.

which employer in their past caused the asbestos caused mesothelioma.

:47:02.:47:08.

The insurance industry have been pushing back on this. That is key.

:47:09.:47:15.

Won't this be seen as a victory for the powerful law `` lobbying

:47:16.:47:26.

organisations? I hope it will be a victory for all asbestos sufferers.

:47:27.:47:36.

Does it go far enough? Personally I would like to see this considered.

:47:37.:47:42.

The Department of work and pensions says the scheme is a major

:47:43.:47:47.

breakthrough. It says they are also paying dependence and to make sure

:47:48.:47:54.

the scheme is affordable, they also had to take tough decisions. Which

:47:55.:48:01.

means we cannot pay out to every dependent of every person who has

:48:02.:48:09.

died. I do not think the cost is prohibitive. The insurance industry

:48:10.:48:15.

have taken ?800 million in unpaid compensation so they can afford to

:48:16.:48:19.

give something back to the victim is. We are asking for 100% of

:48:20.:48:25.

average compensation and we are asking for at least it to be paid

:48:26.:48:33.

back to February 2010 when the government took over the

:48:34.:48:37.

consultation. They discussed it with the insurance industry exclusive

:48:38.:48:44.

without victim representation. There will be some people who will think

:48:45.:48:47.

if the insurance industry pick`up the entire tab for what is a

:48:48.:48:53.

dreadful illness, it does mean premiums will go up. No. The

:48:54.:48:59.

insurance industry have set a maximum at which they can pay and at

:49:00.:49:05.

100% compensation they can pay that over ten years. Jon, this

:49:06.:49:20.

legislation is still to come to the Commons and go through Parliament.

:49:21.:49:25.

Is it the type of thing you would like to back? It will go to the

:49:26.:49:32.

house of commons in two weeks time. If we thought we could get some

:49:33.:49:36.

amendments down to deal with these different issues, we would support

:49:37.:49:41.

it. If you start amending the bill it delays the whole process and

:49:42.:49:45.

there are people out there who need something so that is something we

:49:46.:49:49.

need to look at. Hopefully the government will listen to concerns

:49:50.:49:56.

and take these on board. Amanda, it strikes me you would welcome that.

:49:57.:50:02.

Absolutely. The other thing is we have been looking at the time. Time

:50:03.:50:11.

is crucial in all of these things. Lots of good things hopefully going

:50:12.:50:15.

through. If you have the chance to redraw the legislation, what would

:50:16.:50:21.

be the key things you would want to see? A look at the timings on these.

:50:22.:50:31.

With that be welcome to you? It certainly would. If we can take this

:50:32.:50:36.

back to February 2010 and then the teams like Keith can get

:50:37.:50:40.

compensation. Now, are the good times finally

:50:41.:50:43.

ready to roll again? We've been used to years of bad news, but suddenly

:50:44.:50:47.

this week, there's been a spate of more optimistic stories. On the

:50:48.:50:49.

economy, the Derbyshire and Nottinghamshire Chamber of Commerce

:50:50.:50:52.

has reported that orders are up and more firms are looking to take on

:50:53.:50:57.

staff. Meanwhile, there's been an increase in new homes being built

:50:58.:51:00.

and house prices are rising too, if only by just over one per cent.

:51:01.:51:04.

Finally, there's been tens of millions of pounds of investment

:51:05.:51:07.

announced this week in roads and buildings across the East Midlands.

:51:08.:51:19.

Amanda, you are a business consultant. What message are you

:51:20.:51:25.

getting for businesses now? An optimistic message. The opportunity

:51:26.:51:30.

to set up businesses which is vital. I work in manufacturing, the

:51:31.:51:36.

opportunity for apprenticeships, I am feeling very buoyed. Something is

:51:37.:51:50.

going on out there. David Cameron and George Osborne think they have

:51:51.:51:57.

sorted the economy out now. That is a bit presumptuous. If you look at

:51:58.:52:01.

what is happening in the economy, wages have been growing at much less

:52:02.:52:07.

a pace than prices throughout the whole of this government. People are

:52:08.:52:15.

worse off by ?1600. Are we not now seeing the advantages of having a

:52:16.:52:19.

five`year parliament because both the political and economic cycle are

:52:20.:52:24.

starting to work in favour of this government and isn't that bad news

:52:25.:52:31.

for Labour? I am interested in how people in Leicester and the East

:52:32.:52:34.

Midlands are feeling and they are feeling worse off because of this

:52:35.:52:40.

cost of living crisis. Gas and electricity bills rocketing, train

:52:41.:52:44.

fares rocketing, these are the issues the government need to be

:52:45.:52:50.

dealing with. That is the reality for many people who you hope will be

:52:51.:52:56.

voting for you. I think we are doing a lot and this has only started the

:52:57.:53:02.

process. But there are some really positive messages, the fact that

:53:03.:53:06.

when I fill my car with petrol it costs me less. My daughter, recently

:53:07.:53:13.

married, would not have been able to get a house and now there is an

:53:14.:53:23.

opportunity for her to be able to do this. Really good messages out there

:53:24.:53:31.

and I don't see this negativity. Labour's mantra in the early days of

:53:32.:53:36.

the coalition was it was cutting too fast and too deep and isn't the

:53:37.:53:42.

problem now that in all those marginal constituencies, the

:53:43.:53:45.

electorate are likely to warm to this talk of economic revival more

:53:46.:53:52.

than maybe Labour's message? Do you think people in Loughborough, Derby

:53:53.:53:57.

field they are better off under this lot? Their bills rocketing, we will

:53:58.:54:05.

freeze them. Childcare costs up 30% and prices are rising higher than

:54:06.:54:09.

wages. You are worse off under David Cameron and George Osborne and I am

:54:10.:54:16.

sure people know that. Let's find out some of those views because What

:54:17.:54:21.

counts when it comes to the ballot box is whether people feel the

:54:22.:54:24.

recovery's underway, and they're feeling the benefit.

:54:25.:54:27.

Des has been to Leicester and met people who were still waiting for

:54:28.:54:31.

the turn up. I am in Leicester and it is the time

:54:32.:54:39.

of year for Christmas cheer but is the recession still here? Everyone

:54:40.:54:44.

has got rose tinted glasses on. I work in catering, in a cafe and

:54:45.:54:50.

people come in and want the cheapest thing they can get because they do

:54:51.:54:58.

not have the spare cash. House prices are going up and companies

:54:59.:55:04.

are taking on more people. That is not necessarily a good thing. All

:55:05.:55:09.

these youngsters want houses but they cannot get on the property

:55:10.:55:15.

ladder. Bad as ever. Money is more tight. House prices are going up,

:55:16.:55:24.

companies taking on a lot of people? Their roster a lot out of work. Are

:55:25.:55:32.

you enjoying Christmas? Not really, it is too expensive. House prices

:55:33.:55:39.

are going up and how do you expect people to afford them? Companies are

:55:40.:55:48.

employing more people. There are not many employing that many people. You

:55:49.:55:56.

are not guaranteed any hours so you are better on benefits.

:55:57.:56:02.

Well, that was just a snapshot, but our team in Leicester told us they

:56:03.:56:05.

couldn't find anyone who thought things were improving. When I look

:56:06.:56:12.

at that it is not the case. People will find it a lot easier to get

:56:13.:56:18.

deposits and start`up loans, they are available. I wonder at the

:56:19.:56:23.

cross`section of people asked about this. After five years of economic

:56:24.:56:29.

gloom, surely you would expect exports to improve, record books and

:56:30.:56:35.

order books to be filling up again. Shouldn't the government take

:56:36.:56:40.

credit? If manufacturing and exports are improving, I am pleased about

:56:41.:56:46.

that but people in Leicester, I am not surprised what they were saying

:56:47.:56:51.

because we know hard`pressed people are ?1600 worse off. They have to do

:56:52.:56:57.

something about it. They have to freeze bills. This cost of living

:56:58.:57:03.

thing is causing huge problems and we have a government doing nothing

:57:04.:57:11.

about it. We had a president of the CBI saying in a speech in Leicester

:57:12.:57:16.

saying any economic revival has to be shared and he was talking about

:57:17.:57:21.

pay packets being boosted to help people cope with the slump. Our

:57:22.:57:27.

manufacturers, our bosses going to be generous to boost pay packets? In

:57:28.:57:36.

the manufacturing, if you start to prosper you will reward people. I am

:57:37.:57:41.

a great believer that what we need to do is boost industry,

:57:42.:57:44.

manufacturing and all the stuff we are doing are all helping towards

:57:45.:57:49.

that. Time for a round`up of some of the other political stories in the

:57:50.:57:53.

East Midlands this week ` in 60 seconds.

:57:54.:58:01.

The battle over where to bury Richard III heads to the High Court

:58:02.:58:05.

for a hearing in front of judges on whether he should be reinterred in

:58:06.:58:10.

Leicester all your. The Conservative MEP Mike Larkin has

:58:11.:58:16.

welcomed steps towards ending the Strasse board circus. The habit of

:58:17.:58:22.

splitting the European Parliament sessions between Strasbourg and

:58:23.:58:27.

Brussels. The European Parliament has voted to look at reforming the

:58:28.:58:32.

system and the regions smell politicians have been joining in

:58:33.:58:38.

with Movember. Growing a moustache to raise money for cancer research.

:58:39.:58:44.

Alan Charles is not enjoying his own attempts. I am looking forward to

:58:45.:58:51.

when I can shave it off again. Meanwhile, Mark Spencer is growing

:58:52.:58:57.

one also but his moustache has been likened to that of a Mexican drug

:58:58.:59:05.

lord. Having lost the City of Culture, Leicester needs to hold

:59:06.:59:13.

onto Richard's bones. We are going to hold onto Richard the third. This

:59:14.:59:18.

High Court thing, what a waste of time. He should stay in Leicester.

:59:19.:59:26.

Movember, what do you think of these men, colleagues of yours? Mark

:59:27.:59:32.

Spencer looked more like a refugee from the Village people! Probably

:59:33.:59:39.

yes! I thought he looked rather dashing. Let's not forget what it is

:59:40.:59:46.

all about, it is a serious message to give. Jon, are you tempted? Who

:59:47.:59:53.

knows. When I was on paternity leave, a group a beard so maybe I

:59:54.:59:59.

will grow a beard. Why just Movember? Exactly, all year round!

:00:00.:00:06.

That's the Sunday Politics in the East Midlands, thanks to Amanda

:00:07.:00:08.

Solloway and Jon Ashworth. Don't forget to catch

:00:09.:00:10.

those people who want to cycle. We will be returning to this one. Thank

:00:11.:00:14.

you. A little bit of history was made at

:00:15.:00:25.

Prime Minister's Questions this week. A teensy tiny bit. It wasn't

:00:26.:00:30.

David Cameron accusing one MP of taking "mind-altering substances" -

:00:31.:00:32.

they're always accusing each other of doing that. No, it was the first

:00:33.:00:36.

time a Prime Minister used a live tweet sent from someone watching the

:00:37.:00:39.

session as ammunition at the dispatch box. Let's have a look We

:00:40.:00:48.

have had some interesting interventions from front edges past

:00:49.:00:54.

and present. I hope I can break records by explaining that a tweet

:00:55.:00:58.

has just come in from Tony McNulty, the former Labour security

:00:59.:01:02.

minister, saying that the public are desperate for a PM in waiting who

:01:03.:01:07.

speaks for them, not a Leader of the Opposition in dodging in partisan

:01:08.:01:12.

Westminster Village knock about So I would stay up with the tweets if

:01:13.:01:16.

you want to get on the right side of this one! We are working on how the

:01:17.:01:21.

Prime Minister managed to get that wheat in the first place. What did

:01:22.:01:25.

you think when you saw it being read out? I was certainly watching the

:01:26.:01:32.

Daily Politics. I almost fell off my chair! It was quite astonishing He

:01:33.:01:36.

didn't answer the question - he didn't do that the whole time. But I

:01:37.:01:41.

stand by what the tweets said. I have tweeted for a long time on

:01:42.:01:46.

PMQs. Normally I am praising Ed Miliband to the hilt, but no one

:01:47.:01:52.

announces that in Parliament! Because the Prime Minister picked up

:01:53.:01:56.

on what you said, it unleashed some attacks on you from the Labour side.

:01:57.:02:01.

It did, minor attacks from some very junior people. Most people were

:02:02.:02:05.

supportive of what I said. They took issue with the notion of not doing

:02:06.:02:11.

it until 12:30pm, when it wasn't available for the other side to use.

:02:12.:02:16.

Instant history, and instantly forgettable, I would say. Do you

:02:17.:02:21.

think you have started a bit of a trend? I hope not, because the

:02:22.:02:25.

dumbing down of PMQs is already on its way. Most people tweet like mad

:02:26.:02:35.

through PMQs! Is a measure of how post-modern we have become, we have

:02:36.:02:39.

journalists tweeting about someone talking about a tweet. That is the

:02:40.:02:45.

level of British politics. I am horrified by this development. The

:02:46.:02:48.

whole of modern life has become about observing people -- people

:02:49.:02:55.

observing themselves doing things. Do we know what happened? Somebody

:02:56.:03:00.

is monitoring the tweets on behalf of the Prime Minister or the Tory

:03:01.:03:05.

party. They see Tony's tweet. They then print it out and give it to

:03:06.:03:09.

him? There was a suggestion that Michael Goves had spotted it, but

:03:10.:03:14.

Craig Oliver from the BBC had this great sort of... Craig Oliver was

:03:15.:03:24.

holding up his iPad to take pictures of the Prime Minister, which he then

:03:25.:03:28.

tweeted, from the Prime Minister. People will now be tweeting in the

:03:29.:03:32.

hope that they will be quoted by the Prime Minister, or the Leader of the

:03:33.:03:38.

Opposition. I wasn't doing that I'm just talking about the monster you

:03:39.:03:44.

have unleashed! I hope it dies a miserable death. I think Tony is a

:03:45.:03:49.

good analysis -- a good analyst of PMQs on Twitter. Moving onto the

:03:50.:03:59.

Co-op. You were a Co-op-backed MP, white you? I was a Co-op party

:04:00.:04:07.

member. There are two issues here about the Co-op and the Labour

:04:08.:04:11.

Party. All the new music suggests that the Co-op will now have to

:04:12.:04:16.

start pulling back from lending or donating to the Labour Party, which,

:04:17.:04:21.

at a time when Mr Miliband is going through changes that are going to

:04:22.:04:24.

cut of the union funds, it seems quite dangerous. There are three

:04:25.:04:30.

things going on. There's the relationship that the party has

:04:31.:04:34.

politically with the Co-op party, there is the commercial relationship

:04:35.:04:39.

you referred to, and then there is this enquiry into the comings and

:04:40.:04:43.

goings of Flowers and everybody else. The Tories, at their peril,

:04:44.:04:50.

will mix the three up. There's a lot of things going on with a bang.

:04:51.:04:54.

Labour has some issues around funding generally, and they are

:04:55.:04:59.

potentially exacerbated by the Co-op issue. The Labour Party gets soft

:05:00.:05:07.

loans from the Co-op bank, and it gets donations. ?800,000 last year.

:05:08.:05:14.

Ed Balls got about ?50,000 for his private office. You get the feeling,

:05:15.:05:18.

given the state of the Co-operative Bank now, that that money could dry

:05:19.:05:24.

up. We will see. There's lots of speculation in the papers today At

:05:25.:05:28.

the core, the relationship between the Co-op party and the Labour Party

:05:29.:05:33.

is a proud one, and a legitimate one. I don't think others always

:05:34.:05:38.

understand that. Here is an even bigger issue. Is it not possible

:05:39.:05:43.

that the Co-op bank will cease to exist in any meaningful way as a

:05:44.:05:50.

Co-op bank? Is the bane out means it is 70% owned -- the bail out means

:05:51.:06:01.

that it is 70% owned, or 35% going to a hedge fund, I think I read

:06:02.:06:06.

Yes, there is a move from the mutualism of the Co-op. But don t

:06:07.:06:10.

confuse the Co-op bank with the Co-op Group. Others have done that.

:06:11.:06:21.

I haven't. Here's the rub. The soft loans that Labour gets. They got

:06:22.:06:29.

?1.2 million from this. And 2.4 million. They are secured against

:06:30.:06:38.

future union membership fees of the party. What is Mr Miliband doing? He

:06:39.:06:44.

is trying to end that? You have this very difficult confluence of events,

:06:45.:06:49.

which is, could these wonderful soft loans that Labour has had from the

:06:50.:06:53.

Co-op, could they be going? And these union reforms, where Ed

:06:54.:06:59.

Miliband is trying to create a link between individuals and donations to

:07:00.:07:04.

the Labour Party... Clearly, there could be real financial difficulties

:07:05.:07:08.

here. The government needs to be careful, because George Osborne

:07:09.:07:11.

launched one of his classic blunderbuss operations this week,

:07:12.:07:14.

which is that the Labour Party is to blame for Paul Flowers' private

:07:15.:07:22.

life. No, it's not. And that all the problems, essentially... Look at

:07:23.:07:28.

what George Osborne was doing in Europe. He was trying to change the

:07:29.:07:32.

capital requirement rules that would make it easier for the Co-op to take

:07:33.:07:38.

over Lloyd's. If there is to be a big investigation, George Osborne

:07:39.:07:40.

needs to be careful of what he wishes for. This is another example

:07:41.:07:46.

of the Westminster consensus. All of the Westminster parties were in

:07:47.:07:49.

favour of the Britannia takeover. This is how the Co-op ended up with

:07:50.:07:54.

all this toxic rubbish on its balance sheet. All the major parties

:07:55.:07:58.

were in favour of going to get the Lloyds branches. The Tories tried to

:07:59.:08:02.

outdo Labour in being more pro-Co-op. There was nobody in

:08:03.:08:09.

Westminster saying, hold on, this doesn't work. It is like the

:08:10.:08:15.

financial bubble all over again Everyone was in favour of that at

:08:16.:08:20.

the time. I think there is no evidence so far that the storm is

:08:21.:08:24.

cutting through to the average voter. If I were Ed Miliband, I

:08:25.:08:29.

would let it die a natural death. I would not write to an editorial

:08:30.:08:33.

column for a national newspaper on a Sunday. That keeps the issue alive,

:08:34.:08:39.

and it makes him look oversensitive and much better at dishing it out

:08:40.:08:47.

than taking it. I agree about that. The Labour press team tweeted this

:08:48.:08:50.

week saying that it was a new low for the times. And this was

:08:51.:09:00.

re-tweeted by Ed Miliband. It isn't a great press attitude. It is very

:09:01.:09:06.

Moni. Bill Clinton went out there and fought and made the case. So did

:09:07.:09:11.

Tony Blair. If you just say, they are being horrible to us, it looks

:09:12.:09:18.

pathetic. And it will cut through on Osborne and the financial

:09:19.:09:23.

dimensional is, not political. I shall tweet that later! While we

:09:24.:09:33.

have been talking, Mr Miliband has been on Desert Island Discs. He

:09:34.:09:38.

might still be on it. Let's have a listen to what he had to say.

:09:39.:09:46.

# Take on me, take me on. # And threw it all, she offers me

:09:47.:09:58.

protection. # A lot of love and affection.

:09:59.:10:09.

# Whether I'm right or wrong #. # Je Ne Regrette Rien. #.

:10:10.:10:25.

Obviously, that was the music that Ed Miliband chose. Who thought -

:10:26.:10:31.

you would have thought he would choose Norman Lamont's theme tune!

:10:32.:10:41.

He chose Jerusalem... He has no classical background at all. He had

:10:42.:10:52.

no Beethoven, no Elgar. David Cameron had Mendelssohn. And Ernie,

:10:53.:11:00.

the fastest Notman in the West. -- fastest milkman. Tony Blair chose

:11:01.:11:10.

the theme tune to a movie. Tony Blair's list was chosen by young

:11:11.:11:14.

staffers in his office. It absolutely was. Tony Blair's list

:11:15.:11:24.

was chosen by staff. The Ed Miliband this was clearly chosen by himself,

:11:25.:11:28.

because who would allow politician to go out there and say that they

:11:29.:11:38.

like Aha. I am the same age as Ed Miliband, and of course he likes

:11:39.:11:42.

Aha. That was the tumour was played in the 80s. Sweet Caroline. It is

:11:43.:11:53.

Angels by Robbie Williams. I was 14-year-old girl when that came out.

:11:54.:12:02.

I thought Angels was the staple of hen nights and chucking out time in

:12:03.:12:09.

pubs. The really good thing about his list is that the Smiths to not

:12:10.:12:12.

appear. The Smiths were all over David Cameron's list. The absolutely

:12:13.:12:17.

miserable music of Morris he was not there. What was his luxury? And

:12:18.:12:27.

Indian takeaway! Again, chosen for political reasons. I would agree

:12:28.:12:33.

with the panel about Aha, but I would expect -- I would respect his

:12:34.:12:41.

right to choose. Have you been on Desert Island Discs? I have. It took

:12:42.:12:46.

me three weeks to choose the music. It was the most difficult decision

:12:47.:12:50.

in my life. What was the most embarrassing thing you chose? I

:12:51.:12:56.

didn't choose anything embarrassing. I chose Beethoven, Elgar, and some

:12:57.:13:01.

proper modern jazz. Anything from the modern era? Pet Shop Boys.

:13:02.:13:13.

That's all for today. The Daily Politics will be on BBC Two at

:13:14.:13:16.

lunchtime every day next week, and we'll be back here on BBC One at

:13:17.:13:20.

11am next week. My luxury, by the way, was a wind-up radio! Remember,

:13:21.:13:23.

if it's Sunday, it's the Sunday Politics.

:13:24.:13:30.

Andrew Neil and John Hess present the latest political stories, with Conservative chairman Grant Shapps and a look at Ed Miliband's choices for Desert Island Discs on Radio 4.


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