24/11/2013 Sunday Politics North West

Morning, folks. Welcome to the Sunday Politics.

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

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

Shapps. Five years on from the financial

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

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

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

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

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

In the North West: The fallout here from the Co`op bank scandal.

And ` fuelling the local economy or heading for meltdown? What's the

future for our nuclear warned that benefit falls will be to

homelessness and population ships. What is the evidence?

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

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

be tweeting faster than England loses wickets to Australia. Yes

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

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

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

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

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

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

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

diplomacy, bilaterally with the Iranians, and together with our

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

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

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

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

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

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

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

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

Iranian currency strengthened overnight, which is exactly what the

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

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

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

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

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

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

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

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

intelligence officials within Iran who may stymie the process. The

Western media concentrate on the fact that Mr Netanyahu and the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

nuclear weapons? This is the huge ambiguity. Ayatollah Khamenei

authorise the position that President Rouhani took to Geneva.

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

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

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

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

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

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

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

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

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

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

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

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

eye on this. It is a fascinating development.

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

disgraced former chairman, the Reverend Paul Flowers. The links

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

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

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

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

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

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

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

difficulty with Reverend flowers, and our primary concern is making

sure that that is properly investigated, and that we understand

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

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

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

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

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

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

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

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

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

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

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

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

inappropriate images on his computer, apparently. You are

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

have heard conflicting reports. There is a much bigger argument

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

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

questions and that these smears This is ludicrous. These are

important questions about an important bank, how it ended up

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

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

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

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

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

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

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

about these very difficult circumstances in which he resigned

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

problematic takeover of the Britannia. Wind forward to this

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

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

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

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

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

Treasury and the Chancellor who were the cheerleaders for the acquisition

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

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

but instead of heeding those warnings, your people went to

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

swept away by the coalition government in a supposed revolution

in regulation. But will its replacement, the Financial Conduct

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Authority. And the Financial Services Authority has been replaced

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

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

all about whether the people in financial services are playing by

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

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

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

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

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

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

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

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

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

conduct. One member of the Parliamentary commission into

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

opposed the appointment. What we needed was additional representation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

think the police have already announced an investigation. I am

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

continuous payment authorities. Simply jumping to one trigger would

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

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

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

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

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

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

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

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

many challenges. It was once called the battle of the

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

modernisers and old-style traditional Tories for the direction

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

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

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

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

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

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

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

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

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

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

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

reform band compassionate conservatism. David Cameron wants

talked about leading the greenest government ever. Downing Street says

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

modernisation and doing what ordinarily people want. And old

dinosaurs like you are just holding this modernisation process back I

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

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

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

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

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

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

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

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

those who were religious and nonreligious. It is a

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

you are moderniser or traditionalist, people, particularly

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

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

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

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

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

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

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

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

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

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

Coming up in just under 20 minutes, I

Fuelling the local economy or heading for meltdown? What is the

future for our nuclear power industry? With me this week Tom two

electrifying politicians, Lisa Nandy, Labour MP for Wigan, and

Baroness Susan Williams, newly appointed to the House of Lords and

the former Conservative leader of Trafford Council. Lisa, let me pick

up with you because you are shadow charities minister, which means you

have some responsibility for Co`op as well. On the issue of Paul

Flowers and Co`op how has it gone so badly wrong? It has been astonishing

in the last few weeks. You have a Prime Minister who has presided over

the near collapse of one of our those important financial

institutions. Instead of answering questions about why his Chancellor

was pushing so hard for the Co`op to take over 630 Lloyds TSB branches,

which it fail to do, he is trying to smear the Labour Party with

allegations about this bank. This is a Prime Minister focused on his

party and not focused on the country. I think that is not worthy

of that office. Why didn't Labour flag up concerns about Paul Flowers?

Actually, the mail on Sunday revealed in its investigation back

Paul Flowers had illegally been buying illegal drugs on the 17th of

November. Paul Flowers was suspended from the Labour Party 24 hours

later. The first time we heard about the allegations was before that

because Mr Flowers had already been stopped from being in a Manchester

's charity because of questions over his expenses, and then he goes on to

run a bank. Ed Miliband met with Paul Flowers just once at all, and

as soon as those allegations... This is a Labour councillor. Paul Flowers

resigned from Bradford Council previously, so this was not a Labour

councillor at the time at which the mail on Sunday investigation came

out, and as soon as it allegations came out he was suspended from the

Labour Party. David Cameron, by contrast, has failed to answer

questions about his Government's involvement in the near collapse of

this financial institution. I want to have a look at what the Prime

Minister said a prime ministers questions.

Now we know all along they knew about his past. Why did they do

nothing to bring to the attention of the authorities this man who has

broken a bank? He has taken millions from tax exiles and tax avoidance.

His party has never paid back.. Susan, pick up what Lisa has been

saying, the allegation that David Cameron is playing politics with

this. There is clearly a pattern of not only incompetence from Paul

Flowers, but also questionable lifestyle as well, which has

compounded the issue. So the Government clearly have a duty to

investigate what has gone on with this man. That Lisa is saying that

the Government is not looking at its own actions here. I think the

Government's attempt to keep the cooperative going, last year or the

year before, was the right thing to do, to keep a bank going. So I am

trying to look at this from the point of view of the man, rather

than the politics, and I just think there is a job to do here and any

Government would have to do this job, to investigate what has clearly

been a catalogue of incompetence and bad management along the way.

Coupled with a drug album. Allegedly. Allegedly. Lisa, do you

think the Co`op has been damaged? It is a Manchester organisation. That

is the worst thing about this political smearing tactic that David

Cameron has used. The Co`op is able the institution founded in Rochdale

150 years ago. In the last year they have given thousands of people

financial literacy skills and turned down financial investment that is

unethical. It should be supported. We will move on because this week a

report came out saying child poverty in Greater Manchester is as bad as

at any time in the last 120 years. The Children's Society says it is

among the worst in the country and this week launched a scheme to help

former but teenagers with the help of a former X factor star.

Thanks to the Ex`factor, she has made it into the charts. Now she is

campaigning to help children in poverty. I saw how they are

suffering, had they come to school with a dozen things going on back

home... According to the children Society, 150,000 children in Greater

Manchester live in poverty. 450 of them ran away. The school was

sleeping rough until the charity stepped in. It helped my confidence

loads. It was there for me. I can ring them up. This boy left home

feeling unwanted. My dad's girlfriend was planning to move in

and they were spending more time together. I was not spending that

much time with my dad. The statistics highlight concerns and

questions. An initiative is under way helping children who live in

more full rubble areas. Local councils also have a role to play.

For me it is one of the priorities. We have got to eradicate child

poverty, to help people. To get young people on track, give them

apprenticeships. Support them. And that kind of encouragement is what

the children Society badly needs. This is about parenting, about

families as a whole unit as well. We cannot necessarily all do that

ourselves. It is about collaboration. Hope is that this new

initiative will help change children's lives.

And we are now joined from London. How much of your personal experience

is inspiring you to get involved in this? Being from Manchester myself,

I have witnessed the struggle amongst the young people. A lot of

my peers growing up. So now I feel like I am in a position to raise

awareness and do all that I can to help. That is what I am doing. The

children are the future. Speaking of raising awareness, what are the

challenges that you and the people who you were trying to help actually

face? A lot of them face being alone, being neglected, just feeling

almost like there is nobody there. And having the Children's Society

help, you have got people to talk to, allowing their voices to be

heard, almost been united. Can you put these problems down to poverty?

That is the root cause? Definitely. If we all come together and join

forces, I would feel like these are the top of issues that we will not

have to deal with. So what would you most like to change? The key thing,

I think, is allowing our young people to believe in themselves

Giving them the support and the drive and just the extra power for

them to feel comfortable in their environment to believe in

themselves. You have been helping launch the Children's Hub. Will that

make a difference? Definitely. I got a chance to meet the young people

and see how the Children's Society Hub is helping them. A lot of them

have said they do not feel alone any more. When they need somebody they

can pick up the phone. Thank you for joining us and giving us a bit of

the X Factor star power this week. Susan, if I can pick up with you.

The Child poverty action group, the Institute for financial studies

fiscal studies, says that the Government's cuts are making child

poverty worse. How worried are you? When you talk about child poverty, I

always think about child poverty in the sense of poverty of the whole

family, that is affected by it. So it is things like warm homes, things

like what your guest was talking about, giving children aspiration.

It is also helping those families with the cost of living. All of

which do not happen, these transformations do not happen

overnight, and I think that some of the measures like taking people out

of income tax, some of the free schools, and I know it is quite

general, but I do think these things are a multitude of factors. Do you

believe the reports that child poverty in Manchester is at its

worst for 120 years? I do not dispute it, but I can understand it.

We have had a tough few years, but I know now that doing things around

income tax, about education, around fuel poverty, that is the weak topic

of the week... Do you agree with that? I agree with a lot of that. I

agree certainly that there are multiple factors causing children to

have the stress and anxiety and typical livestock market but also it

is how the Government is handling it? Where I disagree is that this is

entirely avoidable. It is not just a disgrace. It is completely

avoidable. So if this Government, for example, had chosen not to cut

tax credits for working families in its recent budget, and chosen not to

give a tax cut worth ?2000 a week to the country's millionaires, we would

have been able to detect some of the poorer families. The other

interesting thing happening in Greater Manchester is that if you

look at child poverty rates in different parts of Greater

Manchester, in areas like Moss side and we can, child poverty is going

up. In areas like Trafford, child poverty has remained relatively

stable. What that tells you is this Government is not just making unfair

decisions about individual families, it is pursuing an economic strategy

that has a disproportionate impact on areas that already suffer from

deprivation. We are not only this together. I completely accept that

there parts of Trafford that are very affluent, but also there are

parts of Trafford that are amongst the purest communities in Greater

Manchester, so... But my point is this, there are areas... Local

authority... THEY TALK OVER EACH OTHER

They have been hit hard by this Government's economic strategy of

cutting the private sector... Season, respond quickly because I

have to move on. There are not Government funding and policy

decisions that have disproportionately disadvantaged

Trafford. We do need to move on Did you know more people work in nuclear

energy in the North West than any other part of the UK? It is

increasingly on the agenda after ministers gave the go`ahead for the

country's first new nuclear reactor in a generation at Hinkley Point in

Somerset. Stuart Pollard has been investigating the future for the

industry here. At Windscale, a new milestone nears

completion, the first nuclear power station in the world... In the days

when being green meant you were inexperienced or seasick, the

Northwest pioneered a new world of nuclear power. 60 years on and this

remains the nuclear industry's heartland. That is because half the

jobs in the industry are in this region, so 25,000 people relying on

nuclear to keep a roof over their heads as well as the rest of us

relying on power stations like these to keep our lights on. But with

plenty of other energy options including, as you can probably tell,

wind power, is nuclear the future? Alan, we are deep inside the power

station. How big is this site? It is the largest in the UK. 1200

full`time people work on the site and we supply around 2.5 million

homes. The future he is guaranteed Kindle 2023, when its second power

plant is due to close. We are looking for at least a seven`year

extension so we are looking towards 2030 and beyond. Is it was able to

beyond that to any new buildings? There is a proposal that a power

station can be built on the Heysham side. It will not happen in the near

future but it is a possibility. That is good news for these graduates who

are the future workforce. Is part of your training would likely to spend

some time... When you were looking for a skilled job after university

were there many options? Not really. There are not many options,

especially for chemistry graduates. Without patient, I would rob the

bleep be a long way from home in order to put my degree to good use.

`` I would robber Bibi. But according to some, the risks of

nuclear power remain and skilled graduates could be put to good use

elsewhere. It is a dirty technology and whilst we appreciate the jobs it

provides and it will for many years to come because decommissioning will

take a long time, we think there are more jobs to be had in the

renewables industry. It is not just about power stations like Heysham

and Sellafield, it is also about places like this on the edge of

Preston, the oldest producer in the world of nuclear fuels. From the

Belgian Congo or containing uranium reaches the sprinkle factory... This

week the modern buses were held to account with those `` by those with

an interest in the site's work. Of future is based on fuel in this

nuclear reactors. They will be closed in ten or 15 years. We need

something else to take over. In Cumbria, the debate has moved to

what to do with nuclear waste. Sid should it be buried under here? The

county council said no and criticised when the Government

afterwards gave the power to decide back to the two district councils.

You cannot put the waste in this areas. It is unsafe. So from its

creation to its disposal, the heated arguments around nuclear power are

not going to run out of steam any time soon.

We are joined by Peter Cranie, standing in next year's European

elections for the Green Party. Nuclear power is popular in parts of

the region. Why are you against it? It is an industry from the past and

we need to look to the future. There are more jobs to be created and a

more sustainable energy industry in the future. But what we have to

start right now is with the energy hierarchy looking at saving people

money on their bills by insulate homes. We are talking about... But I

am asking what is wrong with nuclear? If we stop this cost, the

guaranteed price the Government is looking at for the forthcoming years

is effectively another subsidy of a building plant on top of the 2.

you'll think that nuclear has already received. The second reason

is we still have not found a way to deal with all of the waste that has

already been produced. What you are doing is you need to look towards

the future and right now, people's priority is affordable energy to

heat their homes and our priority have to be getting those homes

insulate it, cutting people's fuel bills, and reducing our total energy

demand. But you do not think that nuclear produces carbon? It is not

carbon free technology but what we need to do is get back to the

emphasis, which is let's make people 's homes more affordable to heat,

make sure that is where we focus our energy efficiency. And you are not

happy with either the Conservative all the labour policies on this Is

that right? The two are very similar in that they are backing nuclear

option over the long term and if you want the genuine choice and

difference there is only the Green Party that will stand against that,

and after a recent conference the Liberal Democrats have backed it.

David Cameron seems to be ditching his green credentials. Is not

ditching them. Watering them down. We have just talked about child

poverty and something very much linked to that is the cost of

heating homes. I totally agree with you about insulating homes but if

you are suggesting that the way around our energy crisis is to

insulate homes, it really is quite naive. My view is that we need a

broad range of energy sources, first to be more self`sufficient in this

country, and secondly to stop the reliance on other sources of energy

from foreign sources. And nuclear is one of them. If you want to call the

IPPR naive and various other organisations that have said this is

the way to do it, with green energy, then you may do so. We need to

reduce energy demand because that will make bills more affordable I

need to bring Lisa in. Labour did not do very much here, did they

They did not commission any nuclear power. But they seem to be in favour

of it. We did a huge amount on home insulation. We did a huge amount as

well to open up different sorts of energy, like wind technology, for

example. But nothing on nuclear We saw Portis `` we are supportive of

what the Government has tried to do by striking a deal over nuclear

power stations so there is a mix of sources of energy in this country

but where we really are struggling to understand the Government is

doing is that they, as Peter said, have negotiated a deal to fix the

price of that energy cost with those energy companies. If they can do a

deal with the energy companies of the cost of energy, why can't they

do a deal that benefits consumers over the cost of their bills? But

when you were in Government, why didn't you commission a new nuclear

power station and get that right. I came into Parliament in 2010. I m

talking about the Labour Party. Shore, and there were discussions

with the energy companies. That isn't think I know from being

outside the Government. I was working for the Children's Society

at the time. There were negotiations with the power companies but there

was strong focus on opening up new forms of technology like wind power.

It is right to enslave people 's homes. But we are not opposing

nuclear. We would like to see a mix. `` it is right to insulating people

assess my poems. Lisa is saying a problem with the Government is you

do not have a decent deal for taxpayers. Reducing energy bills is

something that everybody is agreed on because they are becoming

swingeing and the more that we ourselves sufficient in our energy

sources, the less reliant we will be on other sources of energy. I wish,

and you will go green over this that we had done this years ago It

is not before time. To finish off, we also need to realise we are

dealing with a privatised industry that has had ?4 billion of profit

per year. Until we can get an energy system that is sustainable, then we

need to... Thank you for giving us that. Time for the rest of the

week's news with 60 Seconds. The mother of a Merseyside musician

killed in a coach crash met the Transport Secretary this week.

Frances Molloy wants the use of old tyres banned after her son died when

one burst. Could you balance the books?

Liverpool City Council created a computer app to ask how you'd make

cuts of ?156 million. I started by trying to be fair and I have cut 10%

of every service. We are still in budget.

Child benefit on the Isle of Man is to be stopped for higher earners.

The Manx Parliament voted in favour of scrapping payments to people

earning ?90,000 and means`testing those on more than 60.

Campaigners opposed to the fracking for shale gas set up camp in

Salford. The Energy company IGas wants to start drilling there.

People really care about this. And what's the the biggest town in

the country without a train station? It's Skelmersdale ` but it might

happily lose that distinction after the county council unveiled plans to

upgrade its transport system. Next week we'll be hearing from the

prize`winning six former who reckons his generation is being hit hardest

the cuts. Time to thanks those people who want to cycle. We

will be returning to this one. Thank you.

A little bit of history was made at Prime Minister's Questions this

week. A teensy tiny bit. It wasn't David Cameron accusing one MP of

taking "mind-altering substances" - they're always accusing each other

of doing that. No, it was the first time a Prime Minister used a live

tweet sent from someone watching the session as ammunition at the

dispatch box. Let's have a look We have had some interesting

interventions from front edges past and present. I hope I can break

records by explaining that a tweet has just come in from Tony McNulty,

the former Labour security minister, saying that the public are

desperate for a PM in waiting who speaks for them, not a Leader of the

Opposition in dodging in partisan Westminster Village knock about So

I would stay up with the tweets if you want to get on the right side of

this one! We are working on how the Prime Minister managed to get that

wheat in the first place. What did you think when you saw it being read

out? I was certainly watching the Daily Politics. I almost fell off my

chair! It was quite astonishing He didn't answer the question - he

didn't do that the whole time. But I stand by what the tweets said. I

have tweeted for a long time on PMQs. Normally I am praising Ed

Miliband to the hilt, but no one announces that in Parliament!

Because the Prime Minister picked up on what you said, it unleashed some

attacks on you from the Labour side. It did, minor attacks from some very

junior people. Most people were supportive of what I said. They took

issue with the notion of not doing it until 12:30pm, when it wasn't

available for the other side to use. Instant history, and instantly

forgettable, I would say. Do you think you have started a bit of a

trend? I hope not, because the dumbing down of PMQs is already on

its way. Most people tweet like mad through PMQs! Is a measure of how

post-modern we have become, we have journalists tweeting about someone

talking about a tweet. That is the level of British politics. I am

horrified by this development. The whole of modern life has become

about observing people -- people observing themselves doing things.

Do we know what happened? Somebody is monitoring the tweets on behalf

of the Prime Minister or the Tory party. They see Tony's tweet. They

then print it out and give it to him? There was a suggestion that

Michael Goves had spotted it, but Craig Oliver from the BBC had this

great sort of... Craig Oliver was holding up his iPad to take pictures

of the Prime Minister, which he then tweeted, from the Prime Minister.

People will now be tweeting in the hope that they will be quoted by the

Prime Minister, or the Leader of the Opposition. I wasn't doing that I'm

just talking about the monster you have unleashed! I hope it dies a

miserable death. I think Tony is a good analysis -- a good analyst of

PMQs on Twitter. Moving onto the Co-op. You were a Co-op-backed MP,

white you? I was a Co-op party member. There are two issues here

about the Co-op and the Labour Party. All the new music suggests

that the Co-op will now have to start pulling back from lending or

donating to the Labour Party, which, at a time when Mr Miliband is going

through changes that are going to cut of the union funds, it seems

quite dangerous. There are three things going on. There's the

relationship that the party has politically with the Co-op party,

there is the commercial relationship you referred to, and then there is

this enquiry into the comings and goings of Flowers and everybody

else. The Tories, at their peril, will mix the three up. There's a lot

of things going on with a bang. Labour has some issues around

funding generally, and they are potentially exacerbated by the Co-op

issue. The Labour Party gets soft loans from the Co-op bank, and it

gets donations. ?800,000 last year. Ed Balls got about ?50,000 for his

private office. You get the feeling, given the state of the Co-operative

Bank now, that that money could dry up. We will see. There's lots of

speculation in the papers today At the core, the relationship between

the Co-op party and the Labour Party is a proud one, and a legitimate

one. I don't think others always understand that. Here is an even

bigger issue. Is it not possible that the Co-op bank will cease to

exist in any meaningful way as a Co-op bank? Is the bane out means it

is 70% owned -- the bail out means that it is 70% owned, or 35% going

to a hedge fund, I think I read Yes, there is a move from the

mutualism of the Co-op. But don t confuse the Co-op bank with the

Co-op Group. Others have done that. I haven't. Here's the rub. The soft

loans that Labour gets. They got ?1.2 million from this. And 2.4

million. They are secured against future union membership fees of the

party. What is Mr Miliband doing? He is trying to end that? You have this

very difficult confluence of events, which is, could these wonderful soft

loans that Labour has had from the Co-op, could they be going? And

these union reforms, where Ed Miliband is trying to create a link

between individuals and donations to the Labour Party... Clearly, there

could be real financial difficulties here. The government needs to be

careful, because George Osborne launched one of his classic

blunderbuss operations this week, which is that the Labour Party is to

blame for Paul Flowers' private life. No, it's not. And that all the

problems, essentially... Look at what George Osborne was doing in

Europe. He was trying to change the capital requirement rules that would

make it easier for the Co-op to take over Lloyd's. If there is to be a

big investigation, George Osborne needs to be careful of what he

wishes for. This is another example of the Westminster consensus. All of

the Westminster parties were in favour of the Britannia takeover.

This is how the Co-op ended up with all this toxic rubbish on its

balance sheet. All the major parties were in favour of going to get the

Lloyds branches. The Tories tried to outdo Labour in being more

pro-Co-op. There was nobody in Westminster saying, hold on, this

doesn't work. It is like the financial bubble all over again

Everyone was in favour of that at the time. I think there is no

evidence so far that the storm is cutting through to the average

voter. If I were Ed Miliband, I would let it die a natural death. I

would not write to an editorial column for a national newspaper on a

Sunday. That keeps the issue alive, and it makes him look oversensitive

and much better at dishing it out than taking it. I agree about that.

The Labour press team tweeted this week saying that it was a new low

for the times. And this was re-tweeted by Ed Miliband. It isn't

a great press attitude. It is very Moni. Bill Clinton went out there

and fought and made the case. So did Tony Blair. If you just say, they

are being horrible to us, it looks pathetic. And it will cut through on

Osborne and the financial dimensional is, not political. I

shall tweet that later! While we have been talking, Mr Miliband has

been on Desert Island Discs. He might still be on it. Let's have a

listen to what he had to say. # Take on me, take me on.

# And threw it all, she offers me protection.

# A lot of love and affection. # Whether I'm right or wrong #.

# Je Ne Regrette Rien. #. Obviously, that was the music that

Ed Miliband chose. Who thought - you would have thought he would

choose Norman Lamont's theme tune! He chose Jerusalem... He has no

classical background at all. He had no Beethoven, no Elgar. David

Cameron had Mendelssohn. And Ernie, the fastest Notman in the West. --

fastest milkman. Tony Blair chose the theme tune to a movie. Tony

Blair's list was chosen by young staffers in his office. It

absolutely was. Tony Blair's list was chosen by staff. The Ed Miliband

this was clearly chosen by himself, because who would allow politician

to go out there and say that they like Aha. I am the same age as Ed

Miliband, and of course he likes Aha. That was the tumour was played

in the 80s. Sweet Caroline. It is Angels by Robbie Williams. I was

14-year-old girl when that came out. I thought Angels was the staple of

hen nights and chucking out time in pubs. The really good thing about

his list is that the Smiths to not appear. The Smiths were all over

David Cameron's list. The absolutely miserable music of Morris he was not

there. What was his luxury? And Indian takeaway! Again, chosen for

political reasons. I would agree with the panel about Aha, but I

would expect -- I would respect his right to choose. Have you been on

Desert Island Discs? I have. It took me three weeks to choose the music.

It was the most difficult decision in my life. What was the most

embarrassing thing you chose? I didn't choose anything embarrassing.

I chose Beethoven, Elgar, and some proper modern jazz. Anything from

the modern era? Pet Shop Boys. That's all for today. The Daily

Politics will be on BBC Two at lunchtime every day next week, and

we'll be back here on BBC One at 11am next week. My luxury, by the

way, was a wind-up radio! Remember, if it's Sunday, it's the Sunday

Politics.