:00:36. > :00:40.Morning, folks. Welcome to the Sunday Politics.
:00:41. > :00:43.Labour's been hit hard by scandals at the Co-op. Ed Miliband says the
:00:44. > :00:46.Tories are mudslinging. We'll speak to Conservative Chairman Grant
:00:47. > :00:49.Shapps. Five years on from the financial
:00:50. > :00:52.crisis, and we're still talking about banks in trouble. Why haven't
:00:53. > :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. > :01:05.his roof and talked about giving hugs to hoodies and huskies. These
:01:06. > :01:12.days, not so much. Has the plan to make the Conservative Party more
:01:13. > :01:17.cuddly been ditched? In London this week, many have
:01:18. > :01:19.warned that benefit falls will be to homelessness and population ships.
:01:20. > :01:29.What is the evidence? And as always, the political panel
:01:30. > :01:33.that reaches the parts other shows can only dream of. Janan Ganesh,
:01:34. > :01:36.Helen Lewis and Nick Watt. They'll be tweeting faster than England
:01:37. > :01:40.loses wickets to Australia. Yes, they're really that fast.
:01:41. > :01:43.First, some big news overnight from Geneva, where Iran has agreed to
:01:44. > :01:48.curb some of its nuclear activities in return for the partial easing of
:01:49. > :01:51.sanctions. Iran will pause the enrichment of uranium to weapons
:01:52. > :02:01.grade and America will free up some funds for Iran to spend. May be up
:02:02. > :02:04.to $10 billion. A more comprehensive deal is supposed to be done in six
:02:05. > :02:10.months. Here's what President Obama had to say about this interim
:02:11. > :02:17.agreement. We have pursued intensive diplomacy, bilaterally with the
:02:18. > :02:22.Iranians, and together with our partners, the United Kingdom,
:02:23. > :02:27.France, Germany, Russia and China, as well as the European Union.
:02:28. > :02:32.Today, that diplomacy opened up a new path towards a world that is
:02:33. > :02:36.more secure, a future in which we can verify that Iraq and's nuclear
:02:37. > :02:44.programme is peaceful, and that it cannot build a nuclear weapon.
:02:45. > :02:49.President Obama spoke from the White House last night. Now the difficulty
:02:50. > :02:53.begins. This is meant to lead to a full-scale agreement which will
:02:54. > :03:00.effectively end all sanctions, and end Iran's ability to have a bomb.
:03:01. > :03:04.The early signs are pretty good. The Iranian currency strengthened
:03:05. > :03:10.overnight, which is exactly what the Iranians wanted. Inflation in Iraq
:03:11. > :03:16.is 40%, so they need a stronger currency. -- information in Iran.
:03:17. > :03:19.France has played a blinder. It was there intransigence that led to
:03:20. > :03:25.this. Otherwise, I think the West would have led to a much softer
:03:26. > :03:30.deal. The question now becomes implementation. Here, everything
:03:31. > :03:35.hinges on two questions. First, who is Hassan Rouhani? Is he the
:03:36. > :03:40.Iranians Gorbachev, a serious reformer, or he's here much more
:03:41. > :03:46.tactical and cynical figure? Or, within Iran, how powerful is he?
:03:47. > :03:53.There are military men and intelligence officials within Iran
:03:54. > :03:57.who may stymie the process. The Western media concentrate on the
:03:58. > :04:00.fact that Mr Netanyahu and the Israelis are not happy about this.
:04:01. > :04:05.They don't often mention that the Arab Gulf states are also very
:04:06. > :04:14.apprehensive about this deal. I read this morning that the enemies of
:04:15. > :04:21.Qatar and Kuwait went to Saudi king. -- the MAs row. That is the key
:04:22. > :04:27.thing to watch in the next couple of weeks. There was a response from
:04:28. > :04:31.Saudi Arabia, but it came from the Prime Minister of Israel, who said
:04:32. > :04:35.this was a historic mistake. The United States said there would be no
:04:36. > :04:40.enrichment of uranium to weapons grade. In the last few minutes, the
:04:41. > :04:48.Iranian Foreign Minister has tweeted to say that there is an inalienable
:04:49. > :04:53.right -- right to enrich. The key thing is the most important thing
:04:54. > :04:59.that President Obama said in his inaugural speech. He reached out to
:05:00. > :05:05.Iran. It failed under President McKenna jab. Under President
:05:06. > :05:10.Rouhani, there seems to be progress. There is potentially now what he
:05:11. > :05:15.talked about in that first inaugural address potentially coming through.
:05:16. > :05:20.In the end, the key issue - and we don't know the answer - is the
:05:21. > :05:24.supreme leader, not the president. Will the supreme leader agreed to
:05:25. > :05:32.Iran giving up its ability to create nuclear weapons? This is the huge
:05:33. > :05:36.ambiguity. Ayatollah Khamenei authorise the position that
:05:37. > :05:40.President Rouhani took to Geneva. That doesn't mean he will sign off
:05:41. > :05:45.on every bit of implementation over the next six months. Even when
:05:46. > :05:51.President Ahmadinejad was president, he wasn't really President. We in
:05:52. > :05:56.the West have to resort to a kind of Iranians version of the study of the
:05:57. > :06:08.Kremlin, to work out what is going on. And the problem the president
:06:09. > :06:14.faces is that if there is any sign... He can unlock these funds by
:06:15. > :06:19.executive order at the moment, but if he needs any more, he has to go
:06:20. > :06:26.to Congress. Both the Democrat and the Republican side have huge
:06:27. > :06:29.scepticism about this. And he has very low credibility now. There's
:06:30. > :06:35.already been angry noises coming from quite a lot of senators. It was
:06:36. > :06:39.quite strange to see that photo of John Kerry hugging Cathy Ashton as
:06:40. > :06:49.if they had survived a ship great together. John Kerry is clearly
:06:50. > :06:52.feeling very happy. We will keep an eye on this. It is a fascinating
:06:53. > :06:55.development. More lurid details about the
:06:56. > :06:59.personal life of the Co-op Bank's disgraced former chairman, the
:07:00. > :07:02.Reverend Paul Flowers. The links between Labour, the bank and the
:07:03. > :07:05.wider Co-op movement have caused big problems for Ed Miliband this week,
:07:06. > :07:10.and the Conservatives have been revelling in it. But do the Tory
:07:11. > :07:19.allegations - Ed Miliband calls them "smears" - stack up? Party Chairman
:07:20. > :07:27.Grant Shapps joins us from Hatfield. Welcome to the programme. When it
:07:28. > :07:33.comes to the Co-op, what are you accusing Labour of knowing and when?
:07:34. > :07:39.I think the simple thing to say here is that the Co-op is an important
:07:40. > :07:43.bank. They have obviously got into difficulty with Reverend flowers,
:07:44. > :07:46.and our primary concern is making sure that that is properly
:07:47. > :07:49.investigated, and that we understand what happened at the bank and how
:07:50. > :07:55.somebody like Paul Flowers could have ended up thing appointed
:07:56. > :08:02.chairman. You wrote to edge Miliband on Tuesday and asked him what he
:08:03. > :08:05.knew and when. -- you wrote to Ed Miliband. But by Prime Minister's
:08:06. > :08:12.Questions on Wednesday, David Cameron claims that you knew that
:08:13. > :08:16.Labour knew about his past all along. What is the evidence for
:08:17. > :08:24.that? We found out by Wednesday that he had been a Labour councillor,
:08:25. > :08:28.Reverend Flowers, and had been made to stand down. Certainly, Labour
:08:29. > :08:32.knew about that, but somehow didn't seem to think that that made him
:08:33. > :08:38.less appropriate to be the chairman of the Co-op bank. There was no
:08:39. > :08:45.evidence that Mr Miliband or Mr Balls knew about that. I ask you
:08:46. > :08:55.again, what are you accusing the Labour leadership of knowing? We
:08:56. > :08:59.know now that he stood down for very inappropriate images on his
:09:00. > :09:04.computer, apparently. You are telling me that they didn't know. I
:09:05. > :09:07.am not sure that is clear at all. I have heard conflicting reports.
:09:08. > :09:12.There is a much bigger argument about what they knew and when. There
:09:13. > :09:17.was a much bigger issue here. This morning, Ed Miliband has said that
:09:18. > :09:21.they don't have to answer these questions and that these smears.
:09:22. > :09:25.This is ludicrous. These are important questions about an
:09:26. > :09:28.important bank, how it ended up getting into this position, and how
:09:29. > :09:36.a disastrous Britannia -- Italia deal happen. -- Britannia deal
:09:37. > :09:42.happened. And we need to know how the bank came off the rails. To be
:09:43. > :09:46.accused of smears for asking the questions is ridiculous. I am just
:09:47. > :09:49.trying to find out what you are accusing Labour of. You saying that
:09:50. > :10:00.the Labour leadership knew about the drug-taking? Sorry, there was some
:10:01. > :10:05.noise here. I don't know what was known and when. We do know that
:10:06. > :10:08.Labour, the party, certainly knew about these very difficult
:10:09. > :10:15.circumstances in which he resigned as a councillor. I think that the
:10:16. > :10:20.Labour Party knew about it. We knew that Bradford did, but not London.
:10:21. > :10:25.Are you saying that Ed Miliband knew about the inappropriate material on
:10:26. > :10:32.the Reverend's laptop? It is certainly the case that Labour knew
:10:33. > :10:37.about it. But did Mr Miliband know about it, and his predilection for
:10:38. > :10:43.rent boys? He will need to answer those questions. It is quite proper
:10:44. > :10:47.to ask those questions. Surely, asking a perfectly legitimate set of
:10:48. > :10:50.questions, not just about that but about how we have ended up in a
:10:51. > :10:55.situation where this bank has made loans to Labour for millions of
:10:56. > :11:03.pounds, that bank and the Unite bank, who is connected to it. And
:11:04. > :11:07.how they made a ?50,000 donation to Ed Balls' office. Ed Balls says that
:11:08. > :11:13.was nothing to do with Reverend Flowers, and yet Reverend Flowers
:11:14. > :11:17.said that he personally signed that off. Lots of questions to answer.
:11:18. > :11:24.David Cameron has already answered them on Wednesday. He said that you
:11:25. > :11:28.now know that Labour knew about his past all along. You have not been
:11:29. > :11:32.able to present evidence that involve Mr Miliband or Mr Balls in
:11:33. > :11:38.that. So until you get that, surely you should apologise? Hang on. He
:11:39. > :11:42.said that Labour knew about this, and they did, because he stood down
:11:43. > :11:47.as a councillor. If Ed Miliband didn't know about that, then why
:11:48. > :11:53.not? This was quite a serious thing that happened. The wider point is
:11:54. > :11:56.about why it is that when you ask perfectly legitimate questions about
:11:57. > :12:01.this bank, about the Britannia deal, and about the background of Mr
:12:02. > :12:10.flowers, why is the response, it is all smears? There are questions
:12:11. > :12:14.about how Labour failed to deal with the deficit and how it hasn't done
:12:15. > :12:20.anything to support the welfare changes, but there is nothing about
:12:21. > :12:29.that. Let us -- lets: To the wider picture of the Co-operative Bank.
:12:30. > :12:34.Labour wanted the Co-op to take over the Britannia Building Society, and
:12:35. > :12:40.it was a disaster. Do you accept that? The government of the day has
:12:41. > :12:46.to be a part of these discussions for regulatory reason. The
:12:47. > :12:53.government in 2009 - Ed Balls was very pleased... But you supported
:12:54. > :12:59.that decision. There was a later deal, potentially, for the Co-op to
:13:00. > :13:05.buy those Lloyds branches. There was a proper process and it didn't go
:13:06. > :13:09.through just recently. If there had been a proper process back in 2009,
:13:10. > :13:16.would the Britannia deal have gone through? First, you accept that the
:13:17. > :13:21.Tories were in favour of the Britannia take over. Then your
:13:22. > :13:25.Chancellor Osborne went out of his way to facilitate the purchase of
:13:26. > :13:31.the Lloyds branches, even though you had no idea that the Co-op had the
:13:32. > :13:36.management expertise to become a super medium. Correct? The
:13:37. > :13:43.difference is that that deal didn't go through. There was a proper
:13:44. > :13:49.process that took place. Let's look at the process. There was long
:13:50. > :13:55.indications as far back as January 2012 that the Co-op, as a direct
:13:56. > :14:00.result of the Britannia take over which you will party supported, was
:14:01. > :14:03.unfit to acquire the Lloyds branches. By January 2012, the
:14:04. > :14:11.Chancellor and the Treasury ignored the warnings. Wide? In 2009, there
:14:12. > :14:15.was political pressure for the Britannia to be brought together.
:14:16. > :14:19.Based on the information available, this was supported, but that process
:14:20. > :14:22.ended up with a very, very problematic takeover of the
:14:23. > :14:28.Britannia. Wind forward to this year, and when the same types of
:14:29. > :14:32.issues were being looked at for the purchase of the Lloyds deal, the
:14:33. > :14:37.proper process was followed, this time with us in government, and that
:14:38. > :14:40.purchase didn't go through. It is important that the proper process is
:14:41. > :14:50.followed, and when it was, it transpired that the deal wasn't
:14:51. > :14:53.going to be done. But it was the Treasury and the Chancellor who were
:14:54. > :14:59.the cheerleaders for the acquisition of the Lloyds branches. But there
:15:00. > :15:01.was a warning that the Co-op did not have enough capital on its balance
:15:02. > :15:08.sheet to make those acquisitions, but instead of heeding those
:15:09. > :15:12.warnings, your people went to Brussels to lobby for the
:15:13. > :15:17.requirements to be relaxed - why on earth did you do that? Our
:15:18. > :15:22.Chancellor went to argue for all of Rajesh banking, not specifically for
:15:23. > :15:25.the Co-op. He was arguing for the mutuals to be given a special
:15:26. > :15:31.ruling. The idea was to make sure that every bank in Britain could
:15:32. > :15:35.have a better deal, particularly the mutuals, as you say. That is a
:15:36. > :15:40.proper thing for the Chancellor to be doing. We could go round in
:15:41. > :15:43.circles here, but in the end, there was not a takeover of the Lloyds
:15:44. > :15:48.branches, that is because we followed a proper process. Had that
:15:49. > :15:53.same rigorous process been followed in 2009, the legitimate question to
:15:54. > :15:56.ask is whether the Co-op would have been -- would have taken over the
:15:57. > :16:00.Britannia. That is a proper question to ask. It is no good to have the
:16:01. > :16:03.leader of the opposition say, as soon as you ask any of these
:16:04. > :16:09.questions about anything where there is a problem for them, they come
:16:10. > :16:12.back with, oh, this is all smears. There are questions to ask about
:16:13. > :16:17.what the Labour government did, the debt and the deficit they left the
:16:18. > :16:20.country with, the way they stopped work from paying in this country.
:16:21. > :16:25.The big question your government has two answer is, why, by July 2012,
:16:26. > :16:31.when it was clear there was a black hole in the Co-op's balance sheet,
:16:32. > :16:34.your government re-confirmed the Co-op as the preferred bidder for
:16:35. > :16:39.Lloyds - why would you do that? Well, look, the good thing is, we
:16:40. > :16:43.can discuss this until the cows come home, but there is going to be a
:16:44. > :16:48.proper, full investigation, so we will find out what happened, all the
:16:49. > :16:52.way back. So, we will be able to get to the bottom of all of this. Grant
:16:53. > :16:56.Shapps, the only reason the Lloyds deal did not go ahead was, despite
:16:57. > :17:01.the Treasury cheerleading, when Lloyds began its due diligence, it
:17:02. > :17:06.found that there was indeed a huge black hole in the balance sheet and
:17:07. > :17:10.that the Co-op was not fit to take over its branches. That wasn't you,
:17:11. > :17:14.it wasn't the Government, it was not the Chancellor, it was Lloyds. You
:17:15. > :17:21.were still cheerleading for the deal to go ahead... Well, as I say, a
:17:22. > :17:25.proper process was followed, which did not result in the purchase of
:17:26. > :17:29.the Lloyds branches. At that proper process been followed with the
:17:30. > :17:34.purchase of the Britannia, under the previous government... Which you
:17:35. > :17:39.supported. Yes, but it may well be that under that previous deal, there
:17:40. > :17:42.was a excess political pressure perhaps put on in order to create
:17:43. > :17:50.that merger, which proved so disastrous. The Tories facilitated
:17:51. > :17:56.it, Grant Shapps, they allowed it to go ahead. I have said, we are going
:17:57. > :18:00.to have a proper, independent review. What I cannot understand is,
:18:01. > :18:06.when you announce a robber, independent review, the response you
:18:07. > :18:12.get to these serious questions. The response is, oh, this is a smear. It
:18:13. > :18:16.is crazy. We are trying to answer the big questions for this country.
:18:17. > :18:25.We have done all of that, and we are out of time. The Reverend Flowers'
:18:26. > :18:29.chairmanship of the Co-op bank was approved by the regulator at the
:18:30. > :18:33.time, which no longer exists. It was swept away by the coalition
:18:34. > :18:36.government in a supposed revolution in regulation. But will its
:18:37. > :18:47.replacement, the Financial Conduct Authority, be different? Adam has
:18:48. > :18:50.been to find out. Come with me for a spin around the Square mile to find
:18:51. > :18:54.out how we regulate our financial sector, which is almost five times
:18:55. > :19:00.bigger than the country's entire annual income. First, let's pick up
:19:01. > :19:04.our guide, journalist Iain Martin, who has just written a book about
:19:05. > :19:10.what went so wrong during the financial crisis. The FSA was an
:19:11. > :19:14.agency which was established to supervise the banks on a day-to-day
:19:15. > :19:18.basis. The Bank of England was supposed to have overall responsible
:19:19. > :19:21.at for this to Bolivia the financial system and the Treasury was supposed
:19:22. > :19:26.to take an interest in all of these things. The disaster was that it was
:19:27. > :19:31.not anyone's call responsibility, or main day job, to stay alert as to
:19:32. > :19:36.whether or not the banking system as a whole was being run in a safe
:19:37. > :19:40.manner. And so this April, a new system was set up to police the
:19:41. > :19:48.City. Most of the responsibly delays here, with the Bank of England, and
:19:49. > :19:53.its new Prudential Regulation Authority. And the Financial
:19:54. > :19:58.Services Authority has been replaced with the new Financial Conduct
:19:59. > :20:03.Authority. Can we go to the financial conduct authority, please?
:20:04. > :20:07.Canary Wharf, thank you. Here, it is all about whether the people in
:20:08. > :20:11.financial services are playing by the rules, in particular, how they
:20:12. > :20:16.treat their customers. This place has got new powers, like the ability
:20:17. > :20:20.to ban products it does not like, a new mandate to promote competition
:20:21. > :20:25.in the market, the concept being, more competition means a better
:20:26. > :20:31.market, plus the idea that a new organisation rings a whole new
:20:32. > :20:36.culture. Although these are the old offices of the FSA, so maybe not
:20:37. > :20:40.quite so new after all. It has also inherited the case of the Co-op bank
:20:41. > :20:43.and its disgraced former chairman the Reverend Paul Flowers. The SCA
:20:44. > :20:47.will be part of the investigation into what happened, which will
:20:48. > :20:53.probably involve looking at its own conduct. One member of the
:20:54. > :20:56.Parliamentary commission into banking wonders whether the new
:20:57. > :21:01.regulator, and its new boss, are up to it. I have always said, it is not
:21:02. > :21:06.the architecture which is the issue, it is the powers that the regulator
:21:07. > :21:11.has, and today, it does not seem to me as if there is any increase in
:21:12. > :21:15.that. And with the unfolding scandal at the Co-op, it feels like the new
:21:16. > :21:23.architecture for regulating the City is now facing its first big test.
:21:24. > :21:27.And the chief executive of the Financial Conduct Authority, the
:21:28. > :21:31.SCA, Martin Wheatley, joins me now. Welcome to The Sunday Politics. The
:21:32. > :21:37.failure of bank regulation was one of the clearest lessons of the crash
:21:38. > :21:42.in 2008, and yet two years later, in 2010, Paul Flowers is allowed to
:21:43. > :21:47.become chairman of the Co-op - why have we still not got the regulation
:21:48. > :21:52.right? We have made a lot of changes since then. We have created a new
:21:53. > :21:55.regulator, as you know. At the time, we still had a process which allowed
:21:56. > :21:59.somebody to be appointed to a bank and they would go through a
:22:00. > :22:02.challenge, but in the case of Paul Flowers, there was no need for an
:22:03. > :22:08.additional challenge when he was appointed to chairman, because he
:22:09. > :22:13.was already on the board. But going from being on the board to becoming
:22:14. > :22:17.chairman, that is a big jump, and he only had one interview? That is why
:22:18. > :22:22.today, it would be different. But the truth is, that was the system at
:22:23. > :22:26.the time, the system which the FSA operated. He was challenged, we did
:22:27. > :22:30.challenge him, and we said, you do not have the right experience, but
:22:31. > :22:33.at the time, we would not have opposed the appointment. What we
:22:34. > :22:38.needed was additional representation of the board of people who did have
:22:39. > :22:42.banking experience. You can say that that was then and this is now, but
:22:43. > :22:47.up until April of this year, it was still the plan for the Co-op, under
:22:48. > :22:52.Mr Flowers, and despite being seriously wounded by the Britannia
:22:53. > :22:56.takeover, to take on 632 Lloyds branches. That was the Co-op's
:22:57. > :23:00.plan. They needed to pass our test as to whether we thought they were
:23:01. > :23:05.fit to do that, and frankly, they never passed that test. It was not
:23:06. > :23:09.the regulator that stopped them? It was. We were constantly pushing
:23:10. > :23:12.back, saying, you have not got the capital, you have no got the
:23:13. > :23:17.systems, and ultimately, they withdrew, when they could not answer
:23:18. > :23:20.our questions. You were asking the right questions, I accept that, but
:23:21. > :23:27.all of the time, the politicians on all sides, they were pushing for it
:23:28. > :23:32.to happen, and I cannot find anywhere where the regulator said,
:23:33. > :23:35.look, this is just not going to happen. I cannot comment on what the
:23:36. > :23:39.politicians were doing, but I continue what we were doing, which
:23:40. > :23:42.was constantly asking the Co-op, have you got the systems in place,
:23:43. > :23:47.have you got the people, have you got the capital? And they didn't.
:23:48. > :23:51.But it only came to a head when Lloyds started its own due diligence
:23:52. > :23:54.on the bank, and they discovered that it was impossible for them to
:23:55. > :23:59.take over the branches, it was not the regulator... In fairness, what
:24:00. > :24:05.we do is ask the questions, can you do this deal? And we kept pushing
:24:06. > :24:12.back, and we never frankly got delivered a business plan which we
:24:13. > :24:23.were happy to approve. Is the SCA going to launch its own inquiry into
:24:24. > :24:27.what happened? -- the FCA. The Chancellor has announced what will
:24:28. > :24:32.be a very broad inquiry. There are a number of specifics which we will be
:24:33. > :24:36.able to look at, relating to events over the last five years. Could
:24:37. > :24:39.there be a police investigation? I think the police have already
:24:40. > :24:44.announced an investigation. I am talking about into the handling of
:24:45. > :24:51.the bank. It depends. There might be, if there is grim low activity,
:24:52. > :25:00.which we do not know yet. You worked at the FS eight, didn't you? I did.
:25:01. > :25:03.Some of those people who were signed off on the speedy promotion of Mr
:25:04. > :25:09.Flowers, are they now working there? Yes, we have some. I came to
:25:10. > :25:13.join the Financial Services Authority, to lead it into the
:25:14. > :25:26.creation of the new body, the SCA. We had people who were challenging
:25:27. > :25:30.and they did the job. There was not a requirement to approve the role as
:25:31. > :25:34.chairman. There was not even a requirement to interview at that
:25:35. > :25:37.stage. What we did do was to require that he was interviewed, and that
:25:38. > :25:50.the Co-op should get additional experience. One of the people from
:25:51. > :25:54.the old organisation, who signed up on the promotion of Mr Flowers to
:25:55. > :26:02.become chairman is now a nonexecutive director of the Co-op,
:26:03. > :26:05.so how does that work? Welcome he was a senior adviser to our
:26:06. > :26:09.organisation, one of the people who made the challenges, and who said,
:26:10. > :26:14.you need more experience on your board. Subsequently he then went and
:26:15. > :26:17.joined the board. Surely that should not be allowed, the regulator and
:26:18. > :26:22.the regulated should not be like that. Well clearly, you need
:26:23. > :26:27.protection, but we have got to get good people in, and frankly, we want
:26:28. > :26:30.the industry to have good people in the industry, so there will be some
:26:31. > :26:34.movement between the regulator and industry. We all wonder whether you
:26:35. > :26:38.have the power or even the confidence to stand up if you look
:26:39. > :26:43.at all of the really bad bank decisions recently, politicians were
:26:44. > :26:47.behind them. It was Gordon Brown who pushed the disastrous merger of
:26:48. > :26:51.Lloyds and RBS. It was Alex Salmond who egged on RBS to buy the world.
:26:52. > :26:56.All three main parties wanted the Co-op to buy Britannia, even though
:26:57. > :27:00.they did not know the debt it would inherit, and all three wanted the
:27:01. > :27:05.Co-op to buy the Lloyds branches - how do you as a regulator stand up
:27:06. > :27:10.to that little concert party? Well, that political pressure exists, our
:27:11. > :27:14.job at the end of the day is to do a relatively technical job and say,
:27:15. > :27:17.does it stack up? And it didn't, and we made that point time and time
:27:18. > :27:21.again to the Co-op board. They did not have a business case that we
:27:22. > :27:28.could approve. The bodies on left and right -- the politicians on left
:27:29. > :27:35.and right gave the Co-op special support. They may have done, but
:27:36. > :27:39.that was not you have made a warning about these payday lenders, but I
:27:40. > :27:42.think what most people would like to see is a limit put on the interest
:27:43. > :27:47.they can charge over a period of time - will you do that? We have got
:27:48. > :27:52.a whole set of powers for payday lenders. We will bring in some
:27:53. > :27:56.changes from April next year, and we will bring in further changes as we
:27:57. > :28:00.see necessary. Will you put a limit on the interest they can charge?
:28:01. > :28:05.That is something we can study. You do not sound too keen on it? Well,
:28:06. > :28:10.there are a lot of changes we need to make. One change is limiting
:28:11. > :28:12.rollovers, limiting the use of continuous payment authorities.
:28:13. > :28:18.Simply jumping to one trigger would be a mistake. Finally, an issue
:28:19. > :28:22.which I think is becoming a growing concern, because the Government is
:28:23. > :28:26.thinking of subsidising them, 95% mortgages are back - should we not
:28:27. > :28:32.be worried about that? I think we should if the market has the same
:28:33. > :28:37.experiences that we had back in 2007 - oh wait. We are bringing a
:28:38. > :28:42.comprehensive package in under our mortgage market review, which will
:28:43. > :28:53.change how people lend and will put affordability back at the heart of
:28:54. > :28:56.lending decisions. -- 2007-08. You have not had your first big
:28:57. > :29:02.challenge yet, have you? We have many challenges.
:29:03. > :29:06.It was once called the battle of the mods and the rockers - the fight
:29:07. > :29:08.between David Cameron-style modernisers and old-style
:29:09. > :29:12.traditional Tories for the direction and soul of the Conservative Party.
:29:13. > :29:21.But have the mods given up on changing the brand? When David
:29:22. > :29:24.Cameron took over in 2005, he promoted himself as a new Tory
:29:25. > :29:30.leader. He said that hoodies need more love. He was talking about
:29:31. > :29:34.something called the big society. He told his party conference that it
:29:35. > :29:38.was time to that sunshine win the day. There was new emphasis on the
:29:39. > :29:43.environment, and an eye-catching trip to a Norwegian glacier to see
:29:44. > :29:49.first-hand, supposedly, the effects of global warming. This week, party
:29:50. > :29:52.modernise and Nick bone has said that the party is still seen as an
:29:53. > :30:00.old-fashioned monolith and hasn't done enough to improve its appeal.
:30:01. > :30:06.The Tories have put some reforms into practice, such as gay marriage,
:30:07. > :30:12.but they have put more into welfare reform band compassionate
:30:13. > :30:16.conservatism. David Cameron wants talked about leading the greenest
:30:17. > :30:25.government ever. Downing Street says that the quote in the Son is not
:30:26. > :30:29.recognised, get rid of the green crap. At this point in the programme
:30:30. > :30:32.we were expecting to hear from the Energy and Climate Change Minister,
:30:33. > :30:37.Greg Barker. Unfortunately, he has pulled out, with Downing Street
:30:38. > :30:43.saying it's for ""family reasons"". Make of that what you will. However,
:30:44. > :30:47.we won't be deterred. We're still doing the story, and we're joined by
:30:48. > :30:52.our very own mod and rocker - David Skelton of the think-tank Renewal,
:30:53. > :30:57.and Conservative MP Peter Bone. Welcome to you both. I'm glad your
:30:58. > :31:02.family is allowed you to come? David Skelton, getting rid of all the
:31:03. > :31:06.green crap, or words to that effect, that David Cameron has been saying.
:31:07. > :31:11.It is just a sign that Tory modernisation has been quietly
:31:12. > :31:16.buried. I do think that's right. Modernisation is about reaching out
:31:17. > :31:21.to the voters, and the work to do that is now more relevant than ever.
:31:22. > :31:27.We got the biggest swing since 1931, and the thing is we need to do more
:31:28. > :31:33.to reach out to voters in the North. We need to reach out to non-white
:31:34. > :31:39.voters, and show that the concerns of modern Britain and the concerns
:31:40. > :31:42.of ordinary people is something that we share. And what way will racking
:31:43. > :31:47.up electricity bills with green levies get you more votes in the
:31:48. > :31:52.North of England? We have to look at ways to reduce energy bills. The
:31:53. > :31:58.renewable energy directive doesn't do anything to help cut our
:31:59. > :32:03.emissions, but does decrease energy bills by ?45 a year. We should
:32:04. > :32:09.renegotiate that. That is a part of modernisation and doing what
:32:10. > :32:15.ordinarily people want. And old dinosaurs like you are just holding
:32:16. > :32:18.this modernisation process back? I am very appreciative of covering on
:32:19. > :32:23.this programme. The Tory party has been reforming itself for more than
:32:24. > :32:27.150 years. This idea of modern eyes a is just some invention. We are
:32:28. > :32:35.changing all the time. I'm nice and cuddly! So you are happy that the
:32:36. > :32:40.party made gay marriage almost a kind of symbol of its modernisation?
:32:41. > :32:48.Fine Mac the gay marriage was a free vote. David Cameron was recorded as
:32:49. > :32:53.a rebel there because more Tories voted against his position than ever
:32:54. > :32:56.before. It was said that this was a split between the old and young, but
:32:57. > :33:00.it actually was a split between those who were religious and
:33:01. > :33:06.nonreligious. It is a misinterpretation of what happened.
:33:07. > :33:12.Is a modernisation in retreat? I think modernisation is an
:33:13. > :33:18.invention. Seven years ago, in my part of the world, we got three
:33:19. > :33:24.councillors elected, two were 80 and one was 21. A few months ago, a
:33:25. > :33:28.25-year-old was chosen to fight Corby for the Conservative Party. He
:33:29. > :33:33.came from a comprehensive School. He was one of the youngest. The Tory
:33:34. > :33:39.party is moving on. So you found three young people? Hang on a
:33:40. > :33:47.minute. You can't get away with that. Three in one batch. Does
:33:48. > :33:53.modernisation exist? Modernisation is about watering our appeal and
:33:54. > :33:58.sharing our values are relevant to voters who haven't really thought
:33:59. > :34:01.about voting for us for decades now. Modernisation is about more than
:34:02. > :34:05.windmills and stuff, it is about boosting the life chances of the
:34:06. > :34:11.poorest, it is about putting better schools in poorer areas. It is also
:34:12. > :34:17.saying that modernisation and the Tory party... When has the Tory
:34:18. > :34:22.party been against making poorer people better off? Or against better
:34:23. > :34:26.schools? Do you think Mrs Thatcher was a moderniser when she won all
:34:27. > :34:32.those elections? The problem we have at the moment is that UKIP has
:34:33. > :34:36.grown-up. If we could get all of those people who vote UKIP to vote
:34:37. > :34:40.for us, we would get 47% of the vote. We don't need to worry about
:34:41. > :34:45.voters on the left. We need to worry about the voters in the north, those
:34:46. > :34:53.people who haven't voted for us for decades. Having an EU Referendum
:34:54. > :34:59.Bill is going to get people to vote. We have to reach out to
:35:00. > :35:04.voters, but not by some sort of London based in need. You have to
:35:05. > :35:08.broaden your base. I agree with you on that. We have to broaden our
:35:09. > :35:13.appeal, but this back to the future concept is not going to work. We
:35:14. > :35:18.need something that generally appeals to low and middle-income
:35:19. > :35:22.voters, and something that shows we genuinely care about the life
:35:23. > :35:30.chances of the poorest. Do you think that the people who vote UKIP don't
:35:31. > :35:34.support those aspirations? We are not doing enough to cut immigration.
:35:35. > :35:39.We don't have an EU Referendum Bill stop we have to get the centre right
:35:40. > :35:46.to vote for us again. Do that, and we have it. Tom Pursglove, the 25
:35:47. > :35:59.euros, will be returned in Corby because we cannot win an election
:36:00. > :36:04.there. -- the 25-year-old. Whether you are moderniser or
:36:05. > :36:12.traditionalist, people, particularly in the North, see you as a bunch of
:36:13. > :36:17.rich men. And rich southerners. You are bunch of rich southerners. We
:36:18. > :36:24.need to do more to show that we are building on lifting the poorest out
:36:25. > :36:27.of the tax. We need to build more houses. There is a perception that
:36:28. > :36:34.the leadership at the moment is rich, and public school educated.
:36:35. > :36:40.What we have to do is get more people from state education into the
:36:41. > :36:48.top. You are going the other way at the moment. That is a fair
:36:49. > :36:55.criticism. Modernisers also say that. I went to a combo hedge of
:36:56. > :36:58.school as well. -- do a comprehensive school. We need to
:36:59. > :37:07.show that we are standing up for low income. Thank Q, both of you. You
:37:08. > :37:11.are watching the Sunday Politics. Coming up in just under 20 minutes,
:37:12. > :37:15.I will be looking at the big events of the week with our political
:37:16. > :37:24.panel. Until then, the Sunday Politics across the UK.
:37:25. > :37:31.Hello. Coming up a little later, critics have claimed that benefit
:37:32. > :37:34.reports will lead to homelessness, displacement and population shifts
:37:35. > :37:40.across the capital and outside of it, but what is the evidence for
:37:41. > :37:44.this? With me, a government whip and Conservative MP for Chelsea and
:37:45. > :37:51.full, and a Labour MP for Eltham. Nice to see you. London Underground
:37:52. > :37:56.is going to run weekend services aren't -- around the clock, under
:37:57. > :38:02.plans which also involve ticket office closures, and up to 750 job
:38:03. > :38:08.cuts. The night Chubut idea will provide services on the Piccadilly
:38:09. > :38:17.-- the night tube idea will provide services on the Piccadilly, Northern
:38:18. > :38:20.and other lines. The RMT union says it has not ruled out strike action
:38:21. > :38:27.in the run-up to Christmas because of threatened job cuts. What will
:38:28. > :38:31.your constituents say? My constituency has the highest
:38:32. > :38:35.percentage of Tube users in any constituency in London and the
:38:36. > :38:39.south-east. My constituents will find it very good news to have a
:38:40. > :38:44.24-hour underground. That will be popular. It is similar to what they
:38:45. > :38:48.have in New York City. That will be good news. In terms of what happens
:38:49. > :38:52.in the stations, the closure of the ticket offices, the stations will
:38:53. > :38:58.still be staffed and all passengers will still be able to buy tickets at
:38:59. > :39:02.the station, so overall, it is a very good package for passengers, to
:39:03. > :39:08.increase packing set -- passenger use. The stations will remain fully
:39:09. > :39:14.staffed, and I think it is a very good innovation. Should it have
:39:15. > :39:19.happened a long time ago? Certainly, opening the cheap
:39:20. > :39:23.overnight and at weekends has to be -- overnight at weekends has to be
:39:24. > :39:28.popular. But ticket offices closing, that hast to alarm people.
:39:29. > :39:37.There's a lot of detail we have to look at. Losing those sorts of jobs,
:39:38. > :39:41.how does that all stacked up in terms of unmanned trains, is the
:39:42. > :39:45.technology there? How soon are we going to see the technology in place
:39:46. > :39:48.that makes it safe for people travelling. Boris is very good at
:39:49. > :39:54.making these sorts of announcements before things are in place. How can
:39:55. > :40:01.it add up? How can you lose 750 staff - and that is the bottom
:40:02. > :40:05.estimate - as well as Lott -- running a longer service. How can
:40:06. > :40:09.you keep that level of security and safety at every station? If you go
:40:10. > :40:15.into a tube station at a moment, you will always find staff sitting
:40:16. > :40:19.there, being available to give out tickets when asked. Most people
:40:20. > :40:22.these days, and this is a technological change over the past
:40:23. > :40:26.few years, are now choosing to go to the machines because it is quicker.
:40:27. > :40:33.This is just about redeploying staff to make sure there is a much more
:40:34. > :40:36.efficient use to get a longer tube operating time that favours
:40:37. > :40:42.passengers, which I think will be popular amongst Tube users,
:40:43. > :40:45.particularly on my constituency, travelling on the district line.
:40:46. > :40:51.There will be fewer people fighting to get taxis home in the middle of
:40:52. > :40:55.the night. North Greenwich is as far as it comes for us in south-east
:40:56. > :41:01.London, and obviously, we would like to see more of the mass
:41:02. > :41:05.transportation systems extended into south-east London. In that sense, we
:41:06. > :41:10.are the poor relations of London people. Talk and focus on the
:41:11. > :41:16.Underground assumes it is a London wide issue, but many people from my
:41:17. > :41:22.constituency will complete or start journeys from home using the London
:41:23. > :41:25.Underground, but that's it. It is one of the most potent charges made
:41:26. > :41:31.against the government, but it's benefit reforms will lead to
:41:32. > :41:36.homelessness and families being forced to move to the outskirts of
:41:37. > :41:40.the capital. Some councils are having to find extra resources
:41:41. > :41:45.already to deal with people needing temporary accommodation. We look at
:41:46. > :41:50.the evidence so far. We will not accept any kind of
:41:51. > :41:55.Kosovo- style social cleansing. You are not going to see on my watch
:41:56. > :42:01.thousands of families being evicted from the place where they have been
:42:02. > :42:07.living. These comments were made by the Mayor on BBC London in 2010, and
:42:08. > :42:11.were controversial at the time. They have also been proved right.
:42:12. > :42:17.Including to London Councils, in the 12 months leading up to June this
:42:18. > :42:23.year, 789 capitals -- households were placed outside the centre.
:42:24. > :42:28.There were lots of concerns raised by people like us, and the
:42:29. > :42:32.government provided some extra, transitional housing, which has
:42:33. > :42:37.prevented Local Authorities from sending large numbers of people away
:42:38. > :42:43.yet. But in the next year or so, who knows? We might see more people sent
:42:44. > :42:48.a long way away from their jobs. Bromley's housing advice centre.
:42:49. > :42:54.More and more people are coming here in need of the council's help. On
:42:55. > :43:00.the ground in this conservative borough, the reforms do seem to be
:43:01. > :43:04.causing homelessness. This week, Bromley are drawing ?1 million out
:43:05. > :43:09.of special contingency funds to pay for more homelessness services this
:43:10. > :43:12.year. They say it is partly because properties are more expensive, but
:43:13. > :43:17.also because of the government's welfare reforms. A lot of family
:43:18. > :43:21.units are making do. The pressures of Christmas and the rest of it, we
:43:22. > :43:24.always thought that the early part of next year would see the most
:43:25. > :43:28.telling information come through about how this is going to be
:43:29. > :43:34.managed, and the pressures we would have on homelessness. You have
:43:35. > :43:37.already seen an increase as a result of the welfare report, and you think
:43:38. > :43:44.it will be worse in the New Year? Yes. The pressures we are currently
:43:45. > :43:49.experiencing, and the drawdown of ?1 million of contingency money, is
:43:50. > :43:57.part -- is partly because of welfare reforms. Westminster are already on
:43:58. > :44:01.the record saying that welfare reforms and homelessness are
:44:02. > :44:06.related. In Croydon and Bexley, it is expected that welfare reforms
:44:07. > :44:11.will lead to increased homelessness down the line. Here at the housing
:44:12. > :44:15.charity Shelter, more calls are being made to their homelessness
:44:16. > :44:18.helpline. The numbers of people being put up in temporary
:44:19. > :44:22.accommodation, including families with children having to live in the
:44:23. > :44:25.worst kind of bed breakfast accommodation because there is no us
:44:26. > :44:29.to put them, is just rising through the roof at the moment. That means
:44:30. > :44:34.that thousands of children are living in squalid conditions, having
:44:35. > :44:40.to share toilets with upto 30 other people, we are witnessing all sorts
:44:41. > :44:47.of unpleasant things in a grotty environment. That is no way to raise
:44:48. > :44:51.kids. Could it be that while, so far, welfare reform is yet to force
:44:52. > :45:02.the homeless from London in huge numbers, it may yet come to
:45:03. > :45:05.materialise? Or it may not, and actually, because of the interim
:45:06. > :45:11.arrangements, people will have time to adjust and get used to this? What
:45:12. > :45:17.has happened is that we are seeing people being impoverished by these
:45:18. > :45:23.austerity measures, the cuts in welfare, and the bedroom tax, and we
:45:24. > :45:27.are seeing people being forced out of the communities that they lived
:45:28. > :45:31.in for many years. There just is not the housing to rehouse these people,
:45:32. > :45:34.particularly in central London. For a wealthy borough like Romney to be
:45:35. > :45:40.speaking like that, telling us the way that their welfare measures are
:45:41. > :45:45.hitting into their budget, just tells us that what we are seeing --
:45:46. > :45:48.Bromley -- is the Government telling us that they are making these
:45:49. > :45:54.savings in welfare, but actual it, they are dumping that debt onto
:45:55. > :45:58.local authorities this is all about the housing benefit got out of
:45:59. > :46:10.control under Labour, doubling to ?20 billion a year. Hammersmith and
:46:11. > :46:17.Fulham, one of my local councils, has done a fantastic job. They have
:46:18. > :46:20.put 543 families in temporary accommodation, and only ten of those
:46:21. > :46:24.families have been forced to move out of the borough. The remaining
:46:25. > :46:27.ones which have been affected by this, the council, and this is
:46:28. > :46:32.happening with councils across London, have been successful in
:46:33. > :46:36.negotiating a lower rent from the. That has been what it has all been
:46:37. > :46:42.about, trying to have a more effective system, where people are
:46:43. > :46:45.housed in social, temporary housing, which is much more likely to be the
:46:46. > :46:49.size for their household, saving us money overall, and very, very few
:46:50. > :46:53.people have been adversely affected in Hammersmith and Fulham and
:46:54. > :47:02.elsewhere, I having to move out of London. 57% of households that are
:47:03. > :47:05.in poverty now in London are in working households. So, it is not
:47:06. > :47:10.just a question of leaving people behind. We know that 26% of
:47:11. > :47:13.households in London received housing benefit last year. The idea
:47:14. > :47:20.that there is this downward pressure on the welfare budget, what we saw
:47:21. > :47:27.is soaring housing values, and rents going up, that is what was forcing
:47:28. > :47:32.it up. I will hold my hand up and say, the last Labour government, and
:47:33. > :47:36.I criticised them at the time, did not build enough houses. But this
:47:37. > :47:41.government, under Boris Johnson, built fewer houses than we were
:47:42. > :47:44.building in the 1920s last year, at a time when we have got a housing
:47:45. > :47:52.crisis. That is what is the root cause of all of this. A Conservative
:47:53. > :47:55.model borough like Bromley, having to dip into money to pay for these
:47:56. > :47:59.things, and one of your own local boroughs, Kensington and Chelsea,
:48:00. > :48:04.also saying it is having to spend a lot more money on homelessness, you
:48:05. > :48:08.cannot argue with that. The Government has sensibly said that
:48:09. > :48:12.the transitional arrangements, or special cases, involving people who
:48:13. > :48:17.are disabled, elderly, the Armed Forces, the discretionary housing
:48:18. > :48:26.payments will be available. For how long? We will have to see, but at
:48:27. > :48:31.the moment, we have not seen... It will not happen for ever, though,
:48:32. > :48:37.will it? As I said, in Hammersmith and Fulham, only ten of those
:48:38. > :48:40.households have had to leave. This idea of annex a dust from London
:48:41. > :48:45.simply has not happened. Obviously we need to keep watching the
:48:46. > :48:52.situation. -- this idea of an Exodus from London. This was all about
:48:53. > :48:58.reforming the benefit system so that we got a system which is affordable
:48:59. > :49:03.in the long-term for this country. So it will be painful and there will
:49:04. > :49:08.be adjustments? It is not a question of unlimited benefits. I can give
:49:09. > :49:13.you an example of a constituent of mine, a single mother with children,
:49:14. > :49:18.on the benefit, and the council has just had to accept she will never be
:49:19. > :49:21.able to pay all her money. Feeding and clothing her children and paying
:49:22. > :49:25.all her other bills means she will just never have enough money. And
:49:26. > :49:30.that is what is going on in London at the moment. We had austerity, we
:49:31. > :49:35.had the debt that was nationalised when we saved the banking system,
:49:36. > :49:40.and I do not dispute we needed to do that, but that debt is now being
:49:41. > :49:45.lumped on the poorest people in our society. I think the figures speak
:49:46. > :49:51.for themselves, there has not been this exodus from london. The
:49:52. > :49:55.Government has taken action. The benefit bill had got too high. As
:49:56. > :49:59.long as we protect the vulnerable, the public want to see that benefit
:50:00. > :50:03.bill come down. We will probably return to this, once the full
:50:04. > :50:07.universal benefit has been introduced. Now, the ashcan and the
:50:08. > :50:12.Met Police have been challenged this week over the number of unsolved
:50:13. > :50:21.crimes in London. -- the mayor and the Met Police. There are 3000 fewer
:50:22. > :50:26.police officers in London now than three years ago. Met's widget has
:50:27. > :50:31.been cut by about a quarter, but despite all of this, crime in London
:50:32. > :50:36.is falling. -- budget. So, are the effects of the squeeze being felt
:50:37. > :50:39.elsewhere? According to Labour in the London Assembly, it is leading
:50:40. > :50:44.to a fall in the number of cases solved. This week, they publish
:50:45. > :50:49.research claiming that only 21% of crimes in London last year ended up
:50:50. > :50:58.with an official sanction. That is down from 26% in 2008. In Haringey,
:50:59. > :51:01.for example, there has been a 10% drop in solved crime, and similar
:51:02. > :51:07.figures for neighbouring boroughs and other boroughs in London. We see
:51:08. > :51:11.performance sliding, and that can only be an indication that the
:51:12. > :51:15.police cuts have actually gone too far, that actually, the police force
:51:16. > :51:21.is so stretched now, it is not able to do the job which Londoners want
:51:22. > :51:24.it to do. The Mayor told City Hall this week that the fall was down to
:51:25. > :51:30.a focus on charging suspects and taking them to court as opposed to
:51:31. > :51:33.issuing cautions and fixed penalty notices, where suspects
:51:34. > :51:40.automatically accept guilt. We have set a target for sanctions with the
:51:41. > :51:45.police, and we are working to see an improvement in sanction detection.
:51:46. > :51:50.But with the Met having less staff and less money, that might be a big
:51:51. > :51:55.ask. Boris Johnson will be hoping his reforms do not stretch the thin
:51:56. > :51:59.blue line too far. A criminologist from the University of Kent joins me
:52:00. > :52:04.now. What is happening, is this an alarming trend, and something which
:52:05. > :52:11.is happening differently in London from the rest of the country? The
:52:12. > :52:14.peak of 26% in 2008 was also a peak and nationally. You have got to
:52:15. > :52:17.remember, the police were put under the cosh by the previous government
:52:18. > :52:27.to get their detection rates up. In the Met, it was about 13% ten years
:52:28. > :52:30.ago, and nationally, 18%. By 2008, they had miraculously doubled in
:52:31. > :52:35.London, going up to 26%, which is the figure that is being quoted. To
:52:36. > :52:44.an unsustainable rate, you are saying? Well, the rise in London was
:52:45. > :52:47.much sharper than elsewhere, but everyone was trying to make sure
:52:48. > :52:51.they got their detection rates up. I do not think the public fully
:52:52. > :52:56.understands, they think detection means somebody being caught, charged
:52:57. > :53:01.and taken to court. No, according to the Home Office definition, it is
:53:02. > :53:08.not just that, you can also count cannabis warnings, penalty notices
:53:09. > :53:12.for disorder, offences taken into consideration... So by using those
:53:13. > :53:21.you can boost your figures quite easily? And actually, what is quite
:53:22. > :53:25.interesting, I looked at the figures for 2008-2009, and nationally, the
:53:26. > :53:30.cannabis warnings accounted for about 8% of that huge increase. That
:53:31. > :53:35.has been reined back, it has not gone back down as far in the Met as
:53:36. > :53:42.elsewhere. What has happened since when TOH- 2009 is that nationally,
:53:43. > :53:50.the figure has gone down to 27%, and it has stabilised. -- 2008-2009. The
:53:51. > :53:56.reason for the drop in the last two years, I looked at the figures, is
:53:57. > :54:01.not that they are charging more people, because that has actually
:54:02. > :54:08.dropped from 13% to 12%, but they have also dropped off their use of
:54:09. > :54:12.cannabis warnings by 1%. That accounts for it. So it is possible
:54:13. > :54:15.to disable that this might now be a much more accurate assessment as to
:54:16. > :54:20.how good or bad policing is, but what about the figure itself, only
:54:21. > :54:25.one in five crimes being solved? If you think about it nationally, that
:54:26. > :54:29.is not putting it in context. But why is London worse than other
:54:30. > :54:34.cities? It has always been. Actually, if you compare it with the
:54:35. > :54:37.West Midlands, say, and I have compared it with West Midlands and
:54:38. > :54:42.great and chest, great and just has always been streets ahead, but you
:54:43. > :54:45.have got the PAC committee currently looking at whether the crime figures
:54:46. > :54:49.are fiddled, and finding that massively, they are. So everything
:54:50. > :54:53.here has to be taken with a big pinch of salt, especially the best
:54:54. > :54:58.figures. David Blunkett came in and said, this is a disgrace, detection
:54:59. > :55:04.rates have plummeted to this extent since the heyday in 1980, but well,
:55:05. > :55:08.of course, after 1980, you got the Police And Criminal Evidence Act,
:55:09. > :55:13.which stopped people fitting people up, and so you got a drop. They had
:55:14. > :55:15.started to rise, lung could put everybody under the cosh, people
:55:16. > :55:23.started getting nervous and looking round for ways to get the figures
:55:24. > :55:38.better. They are then given targets from 2004, and we see it go up
:55:39. > :55:42.massively. But if you look over the years -- if you look at this blanket
:55:43. > :55:45.rate, and the overall drop, if you compare police forces, you always
:55:46. > :55:52.find that the urban forces have lower detection rates and rural
:55:53. > :55:56.forces. On that note, I want to hear from you, obviously, crime is coming
:55:57. > :56:00.down in London like it is everywhere else in the country, but will it
:56:01. > :56:04.continue to, and will they continue to be able to solve crimes with
:56:05. > :56:09.these cuts? Two things on that, you're right, crime is coming down,
:56:10. > :56:14.and very quickly indeed. At the rate at which it is coming down in
:56:15. > :56:19.London, it is just as fast in the last 18 months as it has been for
:56:20. > :56:22.the last ten years. Secondly, the number of bodies out on the beat
:56:23. > :56:26.fighting crime on the front line is more or less the same. There has
:56:27. > :56:31.been a reduction in police stations and staff in police stations, which
:56:32. > :56:37.has been part of Boris's reforms, and that has come through into
:56:38. > :56:43.actually, the crime detection rate more or less flat-lining. Can you
:56:44. > :56:48.respond to that? There are 2800 less police constables in if you take
:56:49. > :56:53.community support officers into consideration, 4000 less. They have
:56:54. > :56:57.decimated safer neighbourhood teams, which everyone across London
:56:58. > :57:01.accepted were a big success. The big success about Sauber neighbourhood
:57:02. > :57:05.teams is that they were dedicated to their local ward, they had good
:57:06. > :57:10.local knowledge, particularly for those really minor, irritating
:57:11. > :57:15.crimes for local people. In my area, safer neighbourhood teams have not
:57:16. > :57:21.been decimated. Edgley, the story has been getting police out of
:57:22. > :57:27.stations, onto the street, fighting crime. Thank you so much. You have
:57:28. > :57:31.given us a lot to think about. I cannot ask you to share any more
:57:32. > :57:40.with us at this stage. It is time for the rest of the political news
:57:41. > :57:46.in 60 seconds. The House of Lords select committee reported to the
:57:47. > :57:50.London 2012 Olympics. The report finds little evidence of increased
:57:51. > :57:54.participation in sport and highlights the uneven distribution
:57:55. > :57:58.of economic benefits of the Games across the UK. A bridge over the
:57:59. > :58:01.Thames, which would be shared by pedestrians and cyclists, has been
:58:02. > :58:06.given planning permission. It would link Battersea and Chelsea Harbour.
:58:07. > :58:13.It has been given the go-ahead by Wandsworth and Hammersmith and
:58:14. > :58:17.Fulham. Crossrail's first completed tunnel has been unveiled, marking a
:58:18. > :58:23.key milestone for Europe's largest infrastructure project. 4.25 mile
:58:24. > :58:27.journey from Royal Oak to Farringdon took 18 months to build. Boris
:58:28. > :58:32.Johnson has insisted that cycling safety has improved over the last
:58:33. > :58:36.few years, despite a recent spate of fatalities in London. He said he
:58:37. > :58:37.would not be deflected from the cause of encouraging more cycling in
:58:38. > :58:49.London. It has been a tough couple of weeks
:58:50. > :58:55.for him on this policy, and concerns about cycling. Are you more worried
:58:56. > :58:58.now about safety here. We even had a Metropolitan Police Commissioner
:58:59. > :59:02.saying he wouldn't cycle. The amount of attention that has been given to
:59:03. > :59:07.the issue was helpful, but the figures suggest that the number of
:59:08. > :59:11.people dying on cycles has not increased. Seriously injured,
:59:12. > :59:16.remember. As far as I am aware, the figures are not showing that. I
:59:17. > :59:22.think that trying to make London more cycle friendly and getting more
:59:23. > :59:26.people cycling, and those two things are strongly linked, it has been
:59:27. > :59:32.good to have that attention. Boris is very, very keen on cycling, and
:59:33. > :59:35.has done issued amount. It is very unfortunate that this has happened,
:59:36. > :59:41.but he is trying to promote cycling and change people 's attitudes. If
:59:42. > :59:45.we are going to solve congestion problems -- congestion problems on
:59:46. > :59:49.the roads in London, we have to use the road space more efficiently.
:59:50. > :59:53.Cycling is a key part of that. The Mayor is right to try to facilitate
:59:54. > :59:59.more cycle lanes in London, but painting a blue line down the side
:00:00. > :00:02.of a major road - that isn't the solution. I think we need to start
:00:03. > :00:06.to think about getting more radical, and getting some space that is
:00:07. > :00:10.completely separated from vehicle traffic, so we can really encourage
: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. > :00:38.time a Prime Minister used a live tweet sent from someone watching the
:00:39. > :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. > :01:31.you think when you saw it being read out? I was certainly watching the
:01:32. > :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. > :02:38.through PMQs! Is a measure of how post-modern we have become, we have
:02:39. > :02:44.journalists tweeting about someone talking about a tweet. That is the
:02:45. > :02:48.level of British politics. I am horrified by this development. The
:02:49. > :02:54.whole of modern life has become about observing people -- people
:02:55. > :03:00.observing themselves doing things. Do we know what happened? Somebody
:03:01. > :03:04.is monitoring the tweets on behalf of the Prime Minister or the Tory
:03:05. > :03:09.party. They see Tony's tweet. They then print it out and give it to
:03:10. > :03:13.him? There was a suggestion that Michael Goves had spotted it, but
:03:14. > :03:23.Craig Oliver from the BBC had this great sort of... Craig Oliver was
:03:24. > :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. > :03:58.good analysis -- a good analyst of PMQs on Twitter. Moving onto the
:03:59. > :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. > :04:29.cut of the union funds, it seems quite dangerous. There are three
:04:30. > :04:33.things going on. There's the relationship that the party has
:04:34. > :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. > :05:17.Ed Balls got about ?50,000 for his private office. You get the feeling,
:05:18. > :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. > :06:48.is trying to end that? You have this very difficult confluence of events,
:06:49. > :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. > :07:03.Miliband is trying to create a link between individuals and donations to
:07:04. > :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. > :07:37.capital requirement rules that would make it easier for the Co-op to take
:07:38. > :07:40.over Lloyd's. If there is to be a big investigation, George Osborne
:07:41. > :07:45.needs to be careful of what he wishes for. This is another example
:07:46. > :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. > :08:28.cutting through to the average voter. If I were Ed Miliband, I
:08:29. > :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. > :09:17.Tony Blair. If you just say, they are being horrible to us, it looks
:09:18. > :09:23.pathetic. And it will cut through on Osborne and the financial
:09:24. > :09:32.dimensional is, not political. I shall tweet that later! While we
:09:33. > :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. > :10:40.you would have thought he would choose Norman Lamont's theme tune!
:10:41. > :10:51.He chose Jerusalem... He has no classical background at all. He had
:10:52. > :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. > :11:13.the theme tune to a movie. Tony Blair's list was chosen by young
:11:14. > :11:24.staffers in his office. It absolutely was. Tony Blair's list
:11:25. > :11:27.was chosen by staff. The Ed Miliband this was clearly chosen by himself,
:11:28. > :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. > :12:01.Angels by Robbie Williams. I was 14-year-old girl when that came out.
:12:02. > :12:08.I thought Angels was the staple of hen nights and chucking out time in
:12:09. > :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. > :12:26.miserable music of Morris he was not there. What was his luxury? And
:12:27. > :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. > :13:22.11am next week. My luxury, by the way, was a wind-up radio! Remember,
:13:23. > :13:30.if it's Sunday, it's the Sunday Politics.