:00:39. > :00:49.Good morning. Labour has been hit hard by scandals at the Co-op. Ed
:00:50. > :00:53.Miliband says the Tories are mudslinging. We speak to Grant
:00:54. > :00:57.Shapps. We are still talking about banks in
:00:58. > :01:12.trouble. I haven't the regulators got the message?
:01:13. > :01:17.He used to have a windmill on his roof, but has planned to make the
:01:18. > :01:19.Conservative Party more cuddly been ditched?
:01:20. > :01:24.And on Sunday Politics Scotland. Hot off the press - the blueprint for
:01:25. > :01:27.independence is published on Tuesday and the Scottish government names
:01:28. > :01:33.the day the country becomes independent if we vote yes.
: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. > :02:09.months. Here's what President Obama had to say about this interim
:02:10. > :02:14.months. Here's what President Obama agreement. We have pursued intensive
:02:15. > :02:19.diplomacy, bilaterally with the Iranians, and together with our
:02:20. > :02:23.partners, the United Kingdom, France, Germany, Russia and China,
:02:24. > :02:29.as well as the European Union. Today, that diplomacy opened up a
:02:30. > :02:35.new path towards a world that is more secure, a future in which we
:02:36. > :02:41.can verify that Iraq and's nuclear programme is peaceful, and that it
:02:42. > :02:45.cannot build a nuclear weapon. President Obama spoke from the White
:02:46. > :02:51.House last night. Now the difficulty begins. This is meant to lead to a
:02:52. > :02:57.full-scale agreement which will effectively end all sanctions, and
:02:58. > :03:00.end Iran's ability to have a bomb. The early signs are pretty good. The
:03:01. > :03:06.Iranian currency strengthened overnight, which is exactly what the
:03:07. > :03:14.Iranians wanted. Inflation in Iraq is 40%, so they need a stronger
:03:15. > :03:18.currency. -- information in Iran. France has played a blinder. It was
:03:19. > :03:21.there intransigence that led to this. Otherwise, I think the West
:03:22. > :03:27.would have led to a much softer deal. The question now becomes
:03:28. > :03:33.implementation. Here, everything hinges on two questions. First, who
:03:34. > :03:38.is Hassan Rouhani? Is he the Iranians Gorbachev, a serious
:03:39. > :03:44.reformer, or he's here much more tactical and cynical figure? Or,
:03:45. > :03:47.within Iran, how powerful is he? There are military men and
:03:48. > :03:54.intelligence officials within Iran who may stymie the process. The
:03:55. > :03:59.Western media concentrate on the fact that Mr Netanyahu and the
:04:00. > :04:04.Israelis are not happy about this. They don't often mention that the
:04:05. > :04:09.Arab Gulf states are also very apprehensive about this deal. I read
:04:10. > :04:19.this morning that the enemies of Qatar and Kuwait went to Saudi king.
:04:20. > :04:25.-- the MAs row. That is the key thing to watch in the next couple of
:04:26. > :04:30.weeks. There was a response from Saudi Arabia, but it came from the
:04:31. > :04:34.Prime Minister of Israel, who said this was a historic mistake. The
:04:35. > :04:38.United States said there would be no enrichment of uranium to weapons
:04:39. > :04:42.grade. In the last few minutes, the Iranian Foreign Minister has tweeted
:04:43. > :04:51.to say that there is an inalienable right -- right to enrich. The key
:04:52. > :04:56.thing is the most important thing that President Obama said in his
:04:57. > :05:00.inaugural speech. He reached out to Iran. It failed under President
:05:01. > :05:07.McKenna jab. Under President Rouhani, there seems to be progress.
:05:08. > :05:11.There is potentially now what he talked about in that first inaugural
:05:12. > :05:17.address potentially coming through. In the end, the key issue - and we
:05:18. > :05:22.don't know the answer - is the supreme leader, not the president.
:05:23. > :05:27.Will the supreme leader agreed to Iran giving up its ability to create
:05:28. > :05:32.nuclear weapons? This is the huge ambiguity. Ayatollah Khamenei
:05:33. > :05:38.authorise the position that President Rouhani took to Geneva.
:05:39. > :05:44.That doesn't mean he will sign off on every bit of implementation over
:05:45. > :05:49.the next six months. Even when President Ahmadinejad was president,
:05:50. > :05:55.he wasn't really President. We in the West have to resort to a kind of
:05:56. > :06:05.Iranians version of the study of the Kremlin, to work out what is going
:06:06. > :06:12.on. And the problem the president faces is that if there is any
:06:13. > :06:16.sign... He can unlock these funds by executive order at the moment, but
:06:17. > :06:21.if he needs any more, he has to go to Congress. Both the Democrat and
:06:22. > :06:28.the Republican side have huge scepticism about this. And he has
:06:29. > :06:32.very low credibility now. There's already been angry noises coming
:06:33. > :06:36.from quite a lot of senators. It was quite strange to see that photo of
:06:37. > :06:40.John Kerry hugging Cathy Ashton as if they had survived a ship great
:06:41. > :06:51.together. John Kerry is clearly feeling very happy. We will keep an
:06:52. > :06:53.eye on this. It is a fascinating development.
:06:54. > :06:56.More lurid details about the personal life of the Co-op Bank's
:06:57. > :07:01.disgraced former chairman, the Reverend Paul Flowers. The links
:07:02. > :07:04.between Labour, the bank and the wider Co-op movement have caused big
:07:05. > :07:08.problems for Ed Miliband this week, and the Conservatives have been
:07:09. > :07:12.revelling in it. But do the Tory allegations - Ed Miliband calls them
:07:13. > :07:22."smears" - stack up? Party Chairman Grant Shapps joins us from Hatfield.
:07:23. > :07:31.Welcome to the programme. When it comes to the Co-op, what are you
:07:32. > :07:35.accusing Labour of knowing and when? I think the simple thing to say here
:07:36. > :07:41.is that the Co-op is an important bank. They have obviously got into
:07:42. > :07:45.difficulty with Reverend flowers, and our primary concern is making
:07:46. > :07:48.sure that that is properly investigated, and that we understand
:07:49. > :07:51.what happened at the bank and how somebody like Paul Flowers could
:07:52. > :07:57.have ended up thing appointed chairman. You wrote to edge Miliband
:07:58. > :08:04.on Tuesday and asked him what he knew and when. -- you wrote to Ed
:08:05. > :08:07.Miliband. But by Prime Minister's Questions on Wednesday, David
:08:08. > :08:14.Cameron claims that you knew that Labour knew about his past all
:08:15. > :08:21.along. What is the evidence for that? We found out by Wednesday that
:08:22. > :08:26.he had been a Labour councillor, Reverend Flowers, and had been made
:08:27. > :08:30.to stand down. Certainly, Labour knew about that, but somehow didn't
:08:31. > :08:37.seem to think that that made him less appropriate to be the chairman
:08:38. > :08:43.of the Co-op bank. There was no evidence that Mr Miliband or Mr
:08:44. > :08:48.Balls knew about that. I ask you again, what are you accusing the
:08:49. > :08:58.Labour leadership of knowing? We know now that he stood down for very
:08:59. > :09:00.inappropriate images on his computer, apparently. You are
:09:01. > :09:05.telling me that they didn't know. I am not sure that is clear at all. I
:09:06. > :09:09.have heard conflicting reports. There is a much bigger argument
:09:10. > :09:14.about what they knew and when. There was a much bigger issue here. This
:09:15. > :09:19.morning, Ed Miliband has said that they don't have to answer these
:09:20. > :09:22.questions and that these smears. This is ludicrous. These are
:09:23. > :09:26.important questions about an important bank, how it ended up
:09:27. > :09:33.getting into this position, and how a disastrous Britannia -- Italia
:09:34. > :09:40.deal happen. -- Britannia deal happened. And we need to know how
:09:41. > :09:43.the bank came off the rails. To be accused of smears for asking the
:09:44. > :09:48.questions is ridiculous. I am just trying to find out what you are
:09:49. > :09:54.accusing Labour of. You saying that the Labour leadership knew about the
:09:55. > :10:03.drug-taking? Sorry, there was some noise here. I don't know what was
:10:04. > :10:07.known and when. We do know that Labour, the party, certainly knew
:10:08. > :10:12.about these very difficult circumstances in which he resigned
:10:13. > :10:17.as a councillor. I think that the Labour Party knew about it. We knew
:10:18. > :10:21.that Bradford did, but not London. Are you saying that Ed Miliband knew
:10:22. > :10:25.about the inappropriate material on the Reverend's laptop? It is
:10:26. > :10:33.certainly the case that Labour knew about it. But did Mr Miliband know
:10:34. > :10:40.about it, and his predilection for rent boys? He will need to answer
:10:41. > :10:45.those questions. It is quite proper to ask those questions. Surely,
:10:46. > :10:48.asking a perfectly legitimate set of questions, not just about that but
:10:49. > :10:53.about how we have ended up in a situation where this bank has made
:10:54. > :10:59.loans to Labour for millions of pounds, that bank and the Unite
:11:00. > :11:06.bank, who is connected to it. And how they made a ?50,000 donation to
:11:07. > :11:10.Ed Balls' office. Ed Balls says that was nothing to do with Reverend
:11:11. > :11:16.Flowers, and yet Reverend Flowers said that he personally signed that
:11:17. > :11:20.off. Lots of questions to answer. David Cameron has already answered
:11:21. > :11:26.them on Wednesday. He said that you now know that Labour knew about his
:11:27. > :11:29.past all along. You have not been able to present evidence that
:11:30. > :11:35.involve Mr Miliband or Mr Balls in that. So until you get that, surely
:11:36. > :11:39.you should apologise? Hang on. He said that Labour knew about this,
:11:40. > :11:45.and they did, because he stood down as a councillor. If Ed Miliband
:11:46. > :11:50.didn't know about that, then why not? This was quite a serious thing
:11:51. > :11:54.that happened. The wider point is about why it is that when you ask
:11:55. > :11:57.perfectly legitimate questions about this bank, about the Britannia deal,
:11:58. > :12:08.and about the background of Mr flowers, why is the response, it is
:12:09. > :12:11.all smears? There are questions about how Labour failed to deal with
:12:12. > :12:15.the deficit and how it hasn't done anything to support the welfare
:12:16. > :12:24.changes, but there is nothing about that. Let us -- lets: To the wider
:12:25. > :12:32.picture of the Co-operative Bank. Labour wanted the Co-op to take over
:12:33. > :12:37.the Britannia Building Society, and it was a disaster. Do you accept
:12:38. > :12:44.that? The government of the day has to be a part of these discussions
:12:45. > :12:49.for regulatory reason. The government in 2009 - Ed Balls was
:12:50. > :12:55.very pleased... But you supported that decision. There was a later
:12:56. > :13:00.deal, potentially, for the Co-op to buy those Lloyds branches. There was
:13:01. > :13:07.a proper process and it didn't go through just recently. If there had
:13:08. > :13:14.been a proper process back in 2009, would the Britannia deal have gone
:13:15. > :13:19.through? First, you accept that the Tories were in favour of the
:13:20. > :13:23.Britannia take over. Then your Chancellor Osborne went out of his
:13:24. > :13:26.way to facilitate the purchase of the Lloyds branches, even though you
:13:27. > :13:34.had no idea that the Co-op had the management expertise to become a
:13:35. > :13:40.super medium. Correct? The difference is that that deal didn't
:13:41. > :13:47.go through. There was a proper process that took place. Let's look
:13:48. > :13:53.at the process. There was long indications as far back as January
:13:54. > :13:58.2012 that the Co-op, as a direct result of the Britannia take over
:13:59. > :14:02.which you will party supported, was unfit to acquire the Lloyds
:14:03. > :14:09.branches. By January 2012, the Chancellor and the Treasury ignored
:14:10. > :14:12.the warnings. Wide? In 2009, there was political pressure for the
:14:13. > :14:16.Britannia to be brought together. Based on the information available,
:14:17. > :14:20.this was supported, but that process ended up with a very, very
:14:21. > :14:26.problematic takeover of the Britannia. Wind forward to this
:14:27. > :14:29.year, and when the same types of issues were being looked at for the
:14:30. > :14:34.purchase of the Lloyds deal, the proper process was followed, this
:14:35. > :14:38.time with us in government, and that purchase didn't go through. It is
:14:39. > :14:41.important that the proper process is followed, and when it was, it
:14:42. > :14:51.transpired that the deal wasn't going to be done. But it was the
:14:52. > :14:56.Treasury and the Chancellor who were the cheerleaders for the acquisition
:14:57. > :14:59.of the Lloyds branches. But there was a warning that the Co-op did not
:15:00. > :15:03.have enough capital on its balance sheet to make those acquisitions,
:15:04. > :15:09.but instead of heeding those warnings, your people went to
:15:10. > :15:14.Brussels to lobby for the requirements to be relaxed - why on
:15:15. > :15:18.earth did you do that? Our Chancellor went to argue for all of
:15:19. > :15:22.Rajesh banking, not specifically for the Co-op. He was arguing for the
:15:23. > :15:28.mutuals to be given a special ruling. The idea was to make sure
:15:29. > :15:33.that every bank in Britain could have a better deal, particularly the
:15:34. > :15:37.mutuals, as you say. That is a proper thing for the Chancellor to
:15:38. > :15:41.be doing. We could go round in circles here, but in the end, there
:15:42. > :15:45.was not a takeover of the Lloyds branches, that is because we
:15:46. > :15:50.followed a proper process. Had that same rigorous process been followed
:15:51. > :15:54.in 2009, the legitimate question to ask is whether the Co-op would have
:15:55. > :15:58.been -- would have taken over the Britannia. That is a proper question
:15:59. > :16:02.to ask. It is no good to have the leader of the opposition say, as
:16:03. > :16:05.soon as you ask any of these questions about anything where there
:16:06. > :16:10.is a problem for them, they come back with, oh, this is all smears.
:16:11. > :16:13.There are questions to ask about what the Labour government did, the
:16:14. > :16:19.debt and the deficit they left the country with, the way they stopped
:16:20. > :16:23.work from paying in this country. The big question your government has
:16:24. > :16:27.two answer is, why, by July 2012, when it was clear there was a black
:16:28. > :16:32.hole in the Co-op's balance sheet, your government re-confirmed the
:16:33. > :16:37.Co-op as the preferred bidder for Lloyds - why would you do that?
:16:38. > :16:41.Well, look, the good thing is, we can discuss this until the cows come
:16:42. > :16:45.home, but there is going to be a proper, full investigation, so we
:16:46. > :16:50.will find out what happened, all the way back. So, we will be able to get
:16:51. > :16:54.to the bottom of all of this. Grant Shapps, the only reason the Lloyds
:16:55. > :17:00.deal did not go ahead was, despite the Treasury cheerleading, when
:17:01. > :17:02.Lloyds began its due diligence, it found that there was indeed a huge
:17:03. > :17:08.black hole in the balance sheet and that the Co-op was not fit to take
:17:09. > :17:13.over its branches. That wasn't you, it wasn't the Government, it was not
:17:14. > :17:19.the Chancellor, it was Lloyds. You were still cheerleading for the deal
:17:20. > :17:23.to go ahead... Well, as I say, a proper process was followed, which
:17:24. > :17:27.did not result in the purchase of the Lloyds branches. At that proper
:17:28. > :17:32.process been followed with the purchase of the Britannia, under the
:17:33. > :17:37.previous government... Which you supported. Yes, but it may well be
:17:38. > :17:40.that under that previous deal, there was a excess political pressure
:17:41. > :17:49.perhaps put on in order to create that merger, which proved so
:17:50. > :17:54.disastrous. The Tories facilitated it, Grant Shapps, they allowed it to
:17:55. > :17:58.go ahead. I have said, we are going to have a proper, independent
:17:59. > :18:02.review. What I cannot understand is, when you announce a robber,
:18:03. > :18:09.independent review, the response you get to these serious questions. The
:18:10. > :18:14.response is, oh, this is a smear. It is crazy. We are trying to answer
:18:15. > :18:24.the big questions for this country. We have done all of that, and we are
:18:25. > :18:26.out of time. The Reverend Flowers' chairmanship of the Co-op bank was
:18:27. > :18:32.approved by the regulator at the time, which no longer exists. It was
:18:33. > :18:35.swept away by the coalition government in a supposed revolution
:18:36. > :18:39.in regulation. But will its replacement, the Financial Conduct
:18:40. > :18:48.Authority, be different? Adam has been to find out. Come with me for a
:18:49. > :18:53.spin around the Square mile to find out how we regulate our financial
:18:54. > :18:57.sector, which is almost five times bigger than the country's entire
:18:58. > :19:03.annual income. First, let's pick up our guide, journalist Iain Martin,
:19:04. > :19:09.who has just written a book about what went so wrong during the
:19:10. > :19:11.financial crisis. The FSA was an agency which was established to
:19:12. > :19:16.supervise the banks on a day-to-day basis. The Bank of England was
:19:17. > :19:19.supposed to have overall responsible at for this to Bolivia the financial
:19:20. > :19:24.system and the Treasury was supposed to take an interest in all of these
:19:25. > :19:30.things. The disaster was that it was not anyone's call responsibility, or
:19:31. > :19:33.main day job, to stay alert as to whether or not the banking system as
:19:34. > :19:37.a whole was being run in a safe manner. And so this April, a new
:19:38. > :19:47.system was set up to police the City. Most of the responsibly delays
:19:48. > :19:50.here, with the Bank of England, and its new Prudential Regulation
:19:51. > :19:54.Authority. And the Financial Services Authority has been replaced
:19:55. > :20:00.with the new Financial Conduct Authority. Can we go to the
:20:01. > :20:05.financial conduct authority, please? Canary Wharf, thank you. Here, it is
:20:06. > :20:08.all about whether the people in financial services are playing by
:20:09. > :20:13.the rules, in particular, how they treat their customers. This place
:20:14. > :20:17.has got new powers, like the ability to ban products it does not like, a
:20:18. > :20:21.new mandate to promote competition in the market, the concept being,
:20:22. > :20:26.more competition means a better market, plus the idea that a new
:20:27. > :20:33.organisation rings a whole new culture. Although these are the old
:20:34. > :20:38.offices of the FSA, so maybe not quite so new after all. It has also
:20:39. > :20:42.inherited the case of the Co-op bank and its disgraced former chairman
:20:43. > :20:45.the Reverend Paul Flowers. The SCA will be part of the investigation
:20:46. > :20:50.into what happened, which will probably involve looking at its own
:20:51. > :20:54.conduct. One member of the Parliamentary commission into
:20:55. > :20:59.banking wonders whether the new regulator, and its new boss, are up
:21:00. > :21:04.to it. I have always said, it is not the architecture which is the issue,
:21:05. > :21:08.it is the powers that the regulator has, and today, it does not seem to
:21:09. > :21:14.me as if there is any increase in that. And with the unfolding scandal
:21:15. > :21:21.at the Co-op, it feels like the new architecture for regulating the City
:21:22. > :21:24.is now facing its first big test. And the chief executive of the
:21:25. > :21:30.Financial Conduct Authority, the SCA, Martin Wheatley, joins me now.
:21:31. > :21:33.Welcome to The Sunday Politics. The failure of bank regulation was one
:21:34. > :21:39.of the clearest lessons of the crash in 2008, and yet two years later, in
:21:40. > :21:45.2010, Paul Flowers is allowed to become chairman of the Co-op - why
:21:46. > :21:49.have we still not got the regulation right? We have made a lot of changes
:21:50. > :21:53.since then. We have created a new regulator, as you know. At the time,
:21:54. > :21:57.we still had a process which allowed somebody to be appointed to a bank
:21:58. > :22:01.and they would go through a challenge, but in the case of Paul
:22:02. > :22:03.Flowers, there was no need for an additional challenge when he was
:22:04. > :22:10.appointed to chairman, because he was already on the board. But going
:22:11. > :22:15.from being on the board to becoming chairman, that is a big jump, and he
:22:16. > :22:19.only had one interview? That is why today, it would be different. But
:22:20. > :22:24.the truth is, that was the system at the time, the system which the FSA
:22:25. > :22:28.operated. He was challenged, we did challenge him, and we said, you do
:22:29. > :22:32.not have the right experience, but at the time, we would not have
:22:33. > :22:35.opposed the appointment. What we needed was additional representation
:22:36. > :22:40.of the board of people who did have banking experience. You can say that
:22:41. > :22:45.that was then and this is now, but up until April of this year, it was
:22:46. > :22:48.still the plan for the Co-op, under Mr Flowers, and despite being
:22:49. > :22:54.seriously wounded by the Britannia takeover, to take on 632 Lloyds
:22:55. > :22:58.branches. That was the Co-op's plan. They needed to pass our test
:22:59. > :23:02.as to whether we thought they were fit to do that, and frankly, they
:23:03. > :23:07.never passed that test. It was not the regulator that stopped them? It
:23:08. > :23:11.was. We were constantly pushing back, saying, you have not got the
:23:12. > :23:13.capital, you have no got the systems, and ultimately, they
:23:14. > :23:19.withdrew, when they could not answer our questions. You were asking the
:23:20. > :23:24.right questions, I accept that, but all of the time, the politicians on
:23:25. > :23:28.all sides, they were pushing for it to happen, and I cannot find
:23:29. > :23:34.anywhere where the regulator said, look, this is just not going to
:23:35. > :23:37.happen. I cannot comment on what the politicians were doing, but I
:23:38. > :23:40.continue what we were doing, which was constantly asking the Co-op,
:23:41. > :23:45.have you got the systems in place, have you got the people, have you
:23:46. > :23:48.got the capital? And they didn't. But it only came to a head when
:23:49. > :23:52.Lloyds started its own due diligence on the bank, and they discovered
:23:53. > :23:57.that it was impossible for them to take over the branches, it was not
:23:58. > :24:02.the regulator... In fairness, what we do is ask the questions, can you
:24:03. > :24:06.do this deal? And we kept pushing back, and we never frankly got
:24:07. > :24:13.delivered a business plan which we were happy to approve. Is the SCA
:24:14. > :24:24.going to launch its own inquiry into what happened? -- the FCA. The
:24:25. > :24:28.Chancellor has announced what will be a very broad inquiry. There are a
:24:29. > :24:34.number of specifics which we will be able to look at, relating to events
:24:35. > :24:38.over the last five years. Could there be a police investigation? I
:24:39. > :24:42.think the police have already announced an investigation. I am
:24:43. > :24:46.talking about into the handling of the bank. It depends. There might
:24:47. > :24:55.be, if there is grim low activity, which we do not know yet. You worked
:24:56. > :25:02.at the FS eight, didn't you? I did. Some of those people who were signed
:25:03. > :25:08.off on the speedy promotion of Mr Flowers, are they now working
:25:09. > :25:11.there? Yes, we have some. I came to join the Financial Services
:25:12. > :25:17.Authority, to lead it into the creation of the new body, the SCA.
:25:18. > :25:27.We had people who were challenging and they did the job. There was not
:25:28. > :25:31.a requirement to approve the role as chairman. There was not even a
:25:32. > :25:36.requirement to interview at that stage. What we did do was to require
:25:37. > :25:48.that he was interviewed, and that the Co-op should get additional
:25:49. > :25:52.experience. One of the people from the old organisation, who signed up
:25:53. > :25:55.on the promotion of Mr Flowers to become chairman is now a
:25:56. > :26:03.nonexecutive director of the Co-op, so how does that work? Welcome he
:26:04. > :26:06.was a senior adviser to our organisation, one of the people who
:26:07. > :26:11.made the challenges, and who said, you need more experience on your
:26:12. > :26:15.board. Subsequently he then went and joined the board. Surely that should
:26:16. > :26:20.not be allowed, the regulator and the regulated should not be like
:26:21. > :26:24.that. Well clearly, you need protection, but we have got to get
:26:25. > :26:28.good people in, and frankly, we want the industry to have good people in
:26:29. > :26:33.the industry, so there will be some movement between the regulator and
:26:34. > :26:36.industry. We all wonder whether you have the power or even the
:26:37. > :26:39.confidence to stand up if you look at all of the really bad bank
:26:40. > :26:44.decisions recently, politicians were behind them. It was Gordon Brown who
:26:45. > :26:49.pushed the disastrous merger of Lloyds and RBS. It was Alex Salmond
:26:50. > :26:54.who egged on RBS to buy the world. All three main parties wanted the
:26:55. > :26:58.Co-op to buy Britannia, even though they did not know the debt it would
:26:59. > :27:01.inherit, and all three wanted the Co-op to buy the Lloyds branches -
:27:02. > :27:07.how do you as a regulator stand up to that little concert party? Well,
:27:08. > :27:11.that political pressure exists, our job at the end of the day is to do a
:27:12. > :27:16.relatively technical job and say, does it stack up? And it didn't, and
:27:17. > :27:19.we made that point time and time again to the Co-op board. They did
:27:20. > :27:23.not have a business case that we could approve. The bodies on left
:27:24. > :27:30.and right -- the politicians on left and right gave the Co-op special
:27:31. > :27:35.support. They may have done, but that was not you have made a warning
:27:36. > :27:39.about these payday lenders, but I that was not you have made a warning
: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. > :28:52.change how people lend and will put affordability back at the heart of
:28:53. > :28:55.lending decisions. -- 2007-08. You have not had your first big
:28:56. > :29:01.challenge yet, have you? We have many challenges.
:29:02. > :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. > :30:11.but they have put more into welfare reform band compassionate
:30:12. > :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. > :31:01.family is allowed you to come? David Skelton, getting rid of all the
:31:02. > :31:06.green crap, or words to that effect, that David Cameron has been saying.
:31:07. > :31:10.It is just a sign that Tory modernisation has been quietly
:31:11. > :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. > :32:33.North of England? We have to look at ways to reduce energy bills.
:32:34. > :32:43.The UI happy that the party made gay marriage must a symbol of its
:32:44. > :32:52.modernisation? -- are you happy. David Cameron was recorded as a
:32:53. > :32:57.rebel at one point. It is often said this is a split between old and
:32:58. > :33:01.young, it is actually a split between religious and nonreligious.
:33:02. > :33:08.I think it is a misinterpretation of what happened. Is the modernisation
:33:09. > :33:13.agenda on retreat? Well, what is modernisation? The Tory party is
:33:14. > :33:20.always moving on. Seven years ago, in my part of the world, we got
:33:21. > :33:26.three councillors and the age of 21 elected. Only a few months ago, a
:33:27. > :33:32.25-year-old was chosen to fight Corby for the Conservative Party.
:33:33. > :33:40.The Tory party is moving on. You have found three young people. Hang
:33:41. > :33:46.on a minute. Three in one patch is not bad. What do you say?
:33:47. > :33:54.Modernisation is about broadening our appeal and showing our values
:33:55. > :34:02.are modern and relevant to voters who have not thought about voting
:34:03. > :34:07.for us for decades. Modernisation is about boosting the life chances of
:34:08. > :34:20.the poorest, about better schools in poor areas. Modernisation and Tory
:34:21. > :34:28.party... We have always been for making poor people better. Was
:34:29. > :34:38.Margaret Thatcher moderniser? At the moment, if we were to get all the
:34:39. > :34:44.people who vote for UKIP to vote for us, we would have about 47% of the
:34:45. > :34:51.vote. We have to worry about voters in the North. We need to show that
:34:52. > :34:55.the other party for them. Going on a husky ride is not going to get
:34:56. > :35:00.somebody in Darlington to vote Tory. Adding an EU referendum will
:35:01. > :35:07.get them to vote Tory. We have to reach out, not by some London based
:35:08. > :35:16.in it, you have to broaden the base. -- based in heat. We need something
:35:17. > :35:22.which generally says we are on the side of poor voters, that they want
:35:23. > :35:26.to boost the life chances of the poorest. Do you not think that
:35:27. > :35:31.people who voted UKIP now do not share those aspirations? What they
:35:32. > :35:36.are cross about is that we are not doing enough to cut immigration, we
:35:37. > :35:42.have not got an EU referendum. We have to get the centre-right voting
:35:43. > :35:53.for us again. Do that, and we will have them voting for us. We did not
:35:54. > :35:58.win a majority at the last election because people thought we had not
:35:59. > :36:04.changed enough. People thought we were still a party of the rich. Is
:36:05. > :36:11.that not still the problem? People in the North seat you as a bunch of
:36:12. > :36:16.rich southerners. Which is why we have to do more... You are a bunch
:36:17. > :36:25.of rich southerners. We need to do more to show that we are building on
:36:26. > :36:30.helping the poorest. There is a perception that the leadership is
:36:31. > :36:37.rich, public school educated. I was educated at a public school. -- at a
:36:38. > :36:42.comprehensive school. We have to get more people from state education at
:36:43. > :36:55.the top. But you are going the other way. I think that is fair. And also
:36:56. > :37:04.the modernisers are Porsche. -- posh. Thank you both. It could have
:37:05. > :37:24.gone on for hours. Good morning. Coming up on the
:37:25. > :37:27.programme. Going to the presses. The Government prepares its long-awaited
:37:28. > :37:35.blueprint for independence. The launch dates please -- the launch
:37:36. > :37:39.takes place here in Glasgow. Will it answer the questions of the people
:37:40. > :37:46.in Scotland are asking? What will happen to the health care system. At
:37:47. > :37:51.the moment, we get prescription is. Will the new tax be better or worse
:37:52. > :37:55.for me? We'll be putting those questions and
:37:56. > :37:57.others to the Deputy First Minister Nicola Sturgeon who's here in the
:37:58. > :38:00.studio. And need your history refreshed? The
:38:01. > :38:06.three-minute cartoon taking us through 300 years.
:38:07. > :38:09.It has been billed as the most detailed blueprint for an
:38:10. > :38:13.independent country that has ever been published. Journalists are
:38:14. > :38:20.eager to get their hands on the white paper. One of the details we
:38:21. > :38:24.have is the date of independence, optimistically pencilled in as the
:38:25. > :38:29.24th of March 2016. From the First Minister down we have been promised
:38:30. > :38:33.it will answer all the questions. Cue hearty laughter from sceptical
:38:34. > :38:37.opponents. Andrew Kerr has been to the printer to look at some notes
:38:38. > :38:41.and queries on independence. Somewhere at a secret location, but
:38:42. > :38:46.not this one, 20,000 copies of the White Paper will be printed and
:38:47. > :38:50.bound, all 670 pages of it. You would find something like this would
:38:51. > :38:55.appear on your doorstep at two o'clock in the afternoon, be printed
:38:56. > :38:59.overnight and delivered first thing in the morning.
:39:00. > :39:04.It will be an elegantly written historical documents setting out a
:39:05. > :39:09.blueprint for a new vision of Scotland, for those in favour of
:39:10. > :39:19.independence. For those opposed to independence, it will raise more
:39:20. > :39:25.questions than it can answer. We are talking about the Des campaign. They
:39:26. > :39:32.have been on the back foot. You win referendums on by attacking. He says
:39:33. > :39:37.it needs to deliver a simple message and answer the questions that all
:39:38. > :39:47.the Scottish ministers said it would. Opponents are ready to
:39:48. > :39:51.pounce. I and Daniel Johnson. I am going to vote to keep Scotland in
:39:52. > :39:57.Britain. My question is, would independence make life more
:39:58. > :40:03.conjugated for businesses in Scotland? It will mean two sets of
:40:04. > :40:10.laws, two sets of taxes and currencies.
:40:11. > :40:14.But for those in favour, it is an opportunity to show what an
:40:15. > :40:19.independent Scotland can do. I am voting yes for independence. I
:40:20. > :40:26.run a number of manufacturing businesses in Scotland, England and
:40:27. > :40:29.across Europe. My question is, given Scotland's strong financial position
:40:30. > :40:35.and our strong natural resources, how can we use that to support
:40:36. > :40:39.business, particularly manufacturing business to reverse the decline we
:40:40. > :40:44.have seen in manufacturing as part of the union?
:40:45. > :40:53.Economic growth, jobs and business is said to be at the heart of the
:40:54. > :41:01.paper. I'm David and I am voting yes. Would
:41:02. > :41:07.we still keep the pound, or would we have a different currency? My name
:41:08. > :41:12.is Kirsty and I am voting no. I want the truth about what will happen if
:41:13. > :41:18.we become independent, the truth on the economy. I will be voting no to
:41:19. > :41:24.the Scottish referendum and my question is, what is the situation
:41:25. > :41:30.with border control? I am voting yes in next year's referendum, I would
:41:31. > :41:37.like to see investment in renewable energy. My name is Michael, I am
:41:38. > :41:41.undecided how I will vote. Would we still have the monarchy in an
:41:42. > :41:48.independent Scotland? Well the answer is satisfying
:41:49. > :41:52.opponents? Unlikely. I'm joined here in the studio now by
:41:53. > :41:56.the Deputy First Minister Nicola Sturgeon.
:41:57. > :42:00.Those people who want answers to their questions, they will have to
:42:01. > :42:06.plough through 600s of deep pages to get them?
:42:07. > :42:13.The document will be widely accessible, people can read it cover
:42:14. > :42:20.to cover, or dip in and out for particular issues. This is going to
:42:21. > :42:25.be the most comprehensive, detailed, well researched prospectus for the
:42:26. > :42:30.independence of our country that has ever been published. Is there a
:42:31. > :42:38.danger it will bamboozle people? I do not think so. All of the
:42:39. > :42:41.legitimate questions that have been asked their answered in the White
:42:42. > :42:46.Paper. More than answering questions, it will set the agenda
:42:47. > :42:53.for the remainder of this campaign. It is a positive vision for what an
:42:54. > :42:58.independent Scotland can achieve. My question to the no campaign is where
:42:59. > :43:06.is their equivalent? Project fear comes head to head with Project
:43:07. > :43:11.HOPE. You have set a date for independence day as it were, 18
:43:12. > :43:19.months after the referendum. Is that enough time to negotiate all of the
:43:20. > :43:25.detail? Yes, I believe it is. When the UK government got James
:43:26. > :43:31.Crawford, and legal expert to write an opinion for them, he said it was
:43:32. > :43:36.realistic. We have also looked a precedent in other countries. That
:43:37. > :43:45.is the average time skill from people opting to be independent. --
:43:46. > :43:53.timescale. And many other countries have made this journey. In setting
:43:54. > :43:59.out your prospectors, there will be negotiation. You may well have to
:44:00. > :44:06.compromise. What are your headlines when it comes to compromise?
:44:07. > :44:14.Trident? The currency coach Mark -- the currency? The SNP position on
:44:15. > :44:18.Trident is well known, we want to see it removed from Scotland as
:44:19. > :44:25.quickly and safely as that can happen. That is one of the key
:44:26. > :44:29.issues are the heart of this debate. The choice between spending billions
:44:30. > :44:34.of pounds on nuclear weapons that nobody wants, can never be used
:44:35. > :44:40.because it would devastate humanity, or investing those resources in the
:44:41. > :44:45.things that people of Scotland want. What we have set out other
:44:46. > :44:52.reasonable, rational and responsible cases. But you may not get your own
:44:53. > :44:57.way and all of these things? How confident argue that you can get the
:44:58. > :45:02.currency you want? Is there a fallback position? We set out the
:45:03. > :45:06.position that they believe is in the best interests of Scotland, and the
:45:07. > :45:14.best interests of the United Kingdom, the rest of the United
:45:15. > :45:28.Kingdom. Scotland is the second biggest... Our exports make a
:45:29. > :45:33.substantial contribution to the UK balance of payments, they will not
:45:34. > :45:38.want to lose that. This issue about assets and liability, they have to
:45:39. > :45:43.be taken as two sides of the same coin. The pound is as much
:45:44. > :45:48.Scotland's as the rest of the UK. If the UK government want Scotland to
:45:49. > :45:52.take responsibility for its share of the debt, they have to accept the
:45:53. > :46:00.responsibility of sharing of assets. But you cannot guarantee this? There
:46:01. > :46:10.are two categories of policy choices in the White Paper. The things that
:46:11. > :46:14.will be negotiated, that current Scottish government will be leading
:46:15. > :46:19.those negotiations, and these matters on currency and the European
:46:20. > :46:23.Union will form the starting point of an independent Scotland. But
:46:24. > :46:27.there is no guarantee on the currency. Wouldn't a sensible
:46:28. > :46:32.position be to have a fallback? We will be in a currency union because
:46:33. > :46:39.it is in the best interests of Scotland and the UK. Alistair
:46:40. > :46:43.Carmichael said we would not be able to watch Doctor Who in an
:46:44. > :46:49.independent Scotland. The real campaign entirely approach -- the no
:46:50. > :47:00.campaign's entire approach is to make people frightened. But is the
:47:01. > :47:04.low fallback position? The key point is that a currency union is
:47:05. > :47:09.overwhelmingly in the best interests of the UK, so to accept Alistair
:47:10. > :47:13.Carmichael's point you would have to accept that the UK government would
:47:14. > :47:18.argue a position that was against his own interests. That does not
:47:19. > :47:24.make any sense. Your previous White Paper talked about joining the
:47:25. > :47:29.euro. The fiscal commission has done an extensive piece of work on
:47:30. > :47:35.currency options in in an independent Scotland. The best
:47:36. > :47:44.option, they concluded, was to retain sterling. We do not favour
:47:45. > :47:49.going into the euro and we have made that abundantly clear. The other key
:47:50. > :47:54.point that has to be stressed is that there is no way an independent
:47:55. > :47:57.Scotland could be forced into the euro. The conditions for you got
:47:58. > :48:02.membership is voluntary condition. Scotland cannot be forced into the
:48:03. > :48:06.euro and anybody who argues that is being misleading. We are told that
:48:07. > :48:13.the prospectus on Tuesday will tell us what you are likely to offer from
:48:14. > :48:34.the 2016 election in Scotland. Art civil servants join up -- are civil
:48:35. > :48:39.servants join up... Igbo -- it will transfer and it illustrate the way
:48:40. > :48:45.that the Scottish government will choose to make the Scottish people
:48:46. > :48:50.welfare. That is the exciting thing about this debate. We will get the
:48:51. > :48:56.government is that we've fought for. In 2016, I will be campaigning for
:48:57. > :49:01.an SNP government, but the other parties will be able to put forward
:49:02. > :49:06.their position. Scotland will be guaranteed to get the government it
:49:07. > :49:09.votes for, rather than having a Tory government that they did not vote
:49:10. > :49:13.for. That was the Deputy First Minister
:49:14. > :49:16.Nicola Sturgeon. Joining me now live from London is the Scottish
:49:17. > :49:22.Secretary, Alistair Carmichael. We are getting a prospectus of how
:49:23. > :49:28.Scotland would evolve through the rest of this decade. RB going to get
:49:29. > :49:32.a similar prospectus from you? You have been getting this for months as
:49:33. > :49:37.part of the positive case of Scotland remaining part of the
:49:38. > :49:44.United Kingdom. We have published a series of analysis papers,
:49:45. > :49:50.exceptionally well researched. But you are not telling us what will
:49:51. > :49:54.happen to mark you are not allowed to characterise what has been a
:49:55. > :49:58.substantial piece of work which has outlined a very positive benefits
:49:59. > :50:05.that come to Scotland from being part of the United Kingdom.
:50:06. > :50:13.Recently, the tremendous amount of money that comes to Scotland to go
:50:14. > :50:18.into research in our universities. That is part of the benefit that
:50:19. > :50:33.they get from being part of the United Kingdom. There will be no
:50:34. > :50:42.action on the Barnett formula until the economy has stabilised. But
:50:43. > :50:47.there is a campaign, local government chiefs in England are
:50:48. > :50:53.pushing the UK Treasury to snap the Barnett formula. Do you anticipate a
:50:54. > :50:59.position where Scotland may get less money further down the line? I can
:51:00. > :51:08.only tell you that for the first see above future the Barnett formula
:51:09. > :51:12.remains. -- foreseeable future. The simplest way of getting rid of it is
:51:13. > :51:15.to vote yes and for Scotland to become an independent nation because
:51:16. > :51:23.that is the end of the Barnett formula. Do you think the formula is
:51:24. > :51:28.too generous to Scotland? I think it has served the UK very well for a
:51:29. > :51:32.long time. It has evolved in that, we know, will continue to evolve,
:51:33. > :51:37.and unless there is something that is demonstrably wet are able to
:51:38. > :51:46.serve that purpose it stays. -- better able. The Chancellor has said
:51:47. > :51:55.that posterity will continue for some time. The ISS said that the UK
:51:56. > :52:08.will be running a deficit for many years. -- the IFS. In order to get
:52:09. > :52:12.to the same point we are in in the UK then taxes would have to go up
:52:13. > :52:20.and cuts would have to go beyond what we have already seen. Is it
:52:21. > :52:24.still your position that a currency union post independence is
:52:25. > :52:35.unworkable? Is that a political or economic position? If Scotland walks
:52:36. > :52:43.away from the UK it walks away from the pound. Why would an independent
:52:44. > :52:46.Scotland want to enter into a currency union where they had
:52:47. > :52:54.subcontracted their ability to set interests rates and so on? What is
:52:55. > :53:01.in it for the rest of the UK to put themselves forward as the last
:53:02. > :53:06.resort for banks over which they have no control? Currency unions are
:53:07. > :53:11.very difficult to make work. You see that in the Eurozone, they rely on
:53:12. > :53:24.fiscal and Lettergull integration. Independence is is about political
:53:25. > :53:39.disintegration. Carl Wingrove -- car when Jones came to Edinburgh to say
:53:40. > :53:44.exactly that. -- Carwyn. In the event of a currency union not
:53:45. > :53:52.happening, what will be the plan be? People in Scotland want to know.
:53:53. > :53:54.Would a yes vote not be an endorsement of the decisions the
:53:55. > :53:59.Scottish Government have put into their White Paper? Is it not
:54:00. > :54:05.incumbent on you and other politicians to make that work? If
:54:06. > :54:09.there is a yes vote I am not going to be part of the negotiation
:54:10. > :54:13.because as a Scottish Member of Parliament I will not be determining
:54:14. > :54:17.what the negotiating position will be for the remainder of the UK. You
:54:18. > :54:23.can't possibly expect that to be the case. You would expect ministers in
:54:24. > :54:33.Westminster to our -- to negotiate in good faith. What the Scottish
:54:34. > :54:37.Government have to be honest about is to acknowledge those issues over
:54:38. > :54:43.which they have control, such as the future shape of health care or
:54:44. > :54:46.whatever. And those issues on which they can only express and
:54:47. > :54:57.aspiration. Currency union is one, NATO membership. Once there is a
:54:58. > :55:01.negotiation nothing is guaranteed. A negotiation has to produce something
:55:02. > :55:05.workable for both sides. You can't just say that because the Scottish
:55:06. > :55:09.Government have put it in their White Paper that it is necessarily
:55:10. > :55:15.going to happen. That is not how negotiation works. You mentioned the
:55:16. > :55:25.new year. Can you give a guarantee that by the end of the decade the UK
:55:26. > :55:29.will still be in the U -- the EU? I don't think we can give a
:55:30. > :55:34.guarantee, any more than the Scottish Government can. As long as
:55:35. > :55:39.Scotland is part of the UK then this trend -- the case for keeping the UK
:55:40. > :55:44.as part of the European Union is strengthened. If Scotland walks away
:55:45. > :55:48.from the UK then it walks away from things like European Union
:55:49. > :55:54.membership. She would have to negotiate her way back in. There are
:55:55. > :56:00.other countries in Europe who have interests for there own domestic
:56:01. > :56:05.reasons for making that difficult. Alistair Carmichael, thank you for
:56:06. > :56:09.joining us. Brian Taylor has been listening to
:56:10. > :56:16.Nicola Sturgeon and Alistair Carmichael and joins us live. 670
:56:17. > :56:22.pages, is this to silence the critics of the yes campaign who say
:56:23. > :56:25.they have been vague? Yes, they could have gone for a slim volume
:56:26. > :56:31.but they have gone for one which sets out what they believe is all of
:56:32. > :56:40.the detail. The final section of that, 150 pages, will be a question
:56:41. > :56:44.and answer section, with all of the questions they have had from members
:56:45. > :56:50.of the public. Will those answers satisfy everybody? That is a
:56:51. > :56:54.different question. One of the fundamental elements of the debate
:56:55. > :56:56.is that first of all there can be no guarantees about an independent
:56:57. > :57:00.Scotland but also you heard the point about the European Union,
:57:01. > :57:07.there can be no guarantees generally with regard to politics and life in
:57:08. > :57:11.these troubled times. That is a challenge for those who are
:57:12. > :57:25.advocating change, but on the one hand the other side only have to
:57:26. > :57:29.offer continuation. When we look at the detail contained in this, which
:57:30. > :57:40.areas are likely to come under most scrutiny? The economy is the issue
:57:41. > :57:43.that will determine this. At a time of uncertainty, as we are at the
:57:44. > :57:55.moment, people require reassurance, some form of their concerns being
:57:56. > :57:58.assuaged. That is why I think there will be considerable detail on
:57:59. > :58:07.welfare and pensions, provision for childcare, etc. Do you think the
:58:08. > :58:13.better together campaign will come up with anything new as a result of
:58:14. > :58:21.this? They will be sticking with their themes, not to be pejorative.
:58:22. > :58:26.In some ways the basic questions and answers, basic concerns are fairly
:58:27. > :58:33.well-known in this referendum, it is simply a question of expounding them
:58:34. > :58:42.so people absorb them. An intriguing aspect is the nature of the White
:58:43. > :58:49.Paper, philosophical as well as pragmatic. A Labour Secretary of
:58:50. > :58:55.State set up proposals to be decided by a Labour government. Alex Salmond
:58:56. > :58:58.says the White Paper is a prospectus. They are entitled if
:58:59. > :59:03.there is a mandate from the people to see that delivered in concert
:59:04. > :59:09.with the UK Government. The UK Government say it is a wish list, a
:59:10. > :59:15.starting point for negotiations. Even if there is a yes vote they say
:59:16. > :59:19.that they are not entitled to have that currency zone. It sounds like
:59:20. > :59:21.anything real argument but it is actually the core of the debate
:59:22. > :59:31.about how and whether the white vapour will be put into practice. --
:59:32. > :59:38.the White Paper. How much detail are we really going to get next year?
:59:39. > :59:45.Each of the main opposition parties at Holyrood, they have commission is
:59:46. > :59:55.looking at this in terms of what powers for Holyrood. Do I think
:59:56. > :59:59.there will be a single coherent -- alternative to Westminster? I don't
:00:00. > :00:04.think so. But I think they will find a common point in some way, perhaps
:00:05. > :00:08.the idea of a convention post-referendum that will say,
:00:09. > :00:18.change there will be, without giving every single detail. Perhaps giving
:00:19. > :00:25.more tax powers as a counterpoint to independence. Thank you very much.
:00:26. > :00:30.With what we hear is well over 600 pages of information, we may end up
:00:31. > :00:34.with little time for reflection on how we reached this landmark on the
:00:35. > :00:45.road to referendum. Here is a quick reminder of the story so far.
:00:46. > :00:50.Why are we going round in circles? We are trying to find a way to
:00:51. > :00:56.Scotland's future. Just around the next bend in the road, Scots get a
:00:57. > :01:01.vote on who runs the country. We know who runs the country, the
:01:02. > :01:06.bankers. No, it is a vote on who makes the laws and gets to decide
:01:07. > :01:12.who -- how the government's money is spent. We already decide how to do
:01:13. > :01:18.that. Yes, but many of the big decisions, like going to war, are
:01:19. > :01:24.made in London. What happens if the Scots don't agree with the English
:01:25. > :01:30.or the Welsh? The ones who have the most votes get their way. What is
:01:31. > :01:38.all this about change now? Where to start? How about the ancient Picts
:01:39. > :01:48.keeping the Romans away? Perhaps more recently. 700 years ago we sent
:01:49. > :01:52.them home to think again. How about 1707, when the Scottish Parliament
:01:53. > :02:00.voted the former union with England to popular acclaim. That is not what
:02:01. > :02:05.I remember from history lessons. It all goes into the mix. Some say in
:02:06. > :02:09.the 300 years following the act of union Scotland suffered and many had
:02:10. > :02:14.to leave and Scottish culture was diminished in favour of English.
:02:15. > :02:19.Others point out that the Scots did rather well out of the empire. Some
:02:20. > :02:24.fought for it, others administered it, some made a pile of cash out of
:02:25. > :02:30.trading with it. We are running out of time and you have not mentioned
:02:31. > :02:35.Alex Salmond or the SNP. The Lilly 50 years it grew from being a small
:02:36. > :02:42.band of others and sisters to one of -- to winning a few political
:02:43. > :02:47.skirmishes. They got a 1967 by-election breakthrough. All the
:02:48. > :02:52.while, Scots' sense of there own identity was picking up. In 1999 the
:02:53. > :02:58.Scottish Parliament was created and Donald Dewar became its first first
:02:59. > :03:02.Minister. In 2007, led by Alex Salmond, the SNP claimed victory in
:03:03. > :03:07.the Scottish Parliament for the first time. If we wanted
:03:08. > :03:11.independence, why not voted -- vote on it? Or though they were the
:03:12. > :03:19.largest party they did not have enough seats to win a vote for a
:03:20. > :03:25.referendum. -- or though. Alex Salmond said he did not want a
:03:26. > :03:30.referendum immediately. He has decided on 24 March 2016. Does he
:03:31. > :03:35.need time to make the case for a yes vote? Maybe he thought the economy
:03:36. > :03:42.would be sorted out by then. He wanted to make sure the referendum
:03:43. > :03:50.is legally watertight. So there is agreement on independence? Far from
:03:51. > :03:54.it, Westminster and Holyrood have agreed on how the Scots would run
:03:55. > :04:00.their affairs. Have the Scots agreed on that? We will find out on 24
:04:01. > :04:05.March 2016. That is the point of the vote, remember?
:04:06. > :04:12.You are watching Sunday Politics Scotland, let's cross for the news
:04:13. > :04:19.from Reporting Scotland. Good afternoon. 24 March 2016 will
:04:20. > :04:25.be the day Scotland becomes independent if there is a yes vote.
:04:26. > :04:29.The White Paper will soon be printed before publication on Tuesday.
:04:30. > :04:40.Deputy First Minister Nicola Sturgeon said if it came -- said
:04:41. > :04:43.they would the currency union but Alistair Carmichael said it would be
:04:44. > :04:48.unworkable. Falkirk Labour party is set to elect
:04:49. > :04:53.a new chair. It is believed Stephen Deans will not stand for re-election
:04:54. > :04:57.when the post is contested. He is a Unite union convener who was accused
:04:58. > :05:04.of vote rigging in Falkirk and was later cleared.
:05:05. > :05:08.independent if there is a yes vote. Now if you're named David and you
:05:09. > :05:11.live in Aberdeen, you could take part in a record-breaking,
:05:12. > :05:15.carol-singing extravaganza. At three o'clock at the city's Mercat Cross,
:05:16. > :05:20.a David-only choir will sing what else but Once in Royal David's City.
:05:21. > :05:24.Choristers must be at least seven years old. The event will coincide
:05:25. > :05:27.with the Christmas lights switch on. Now let's take a look at the
:05:28. > :05:30.weather, here's Gillian. years old. The event will coincide
:05:31. > :05:34.Another mostly dry afternoon, but a fair degree start to it with
:05:35. > :05:38.freezing fog patches slow to shift, especially around the Glasgow area.
:05:39. > :05:43.The cloud will tend to think and break through the day and there will
:05:44. > :05:54.be some sunshine getting through. It will be called where that -- cold.
:05:55. > :05:59.That's it. Our next update is at 6.20. Back To Gary. Thanks Andrew.
:06:00. > :06:04.Now in a moment, we'll be discussing the big events coming up this week,
:06:05. > :06:08.but first, let's take a look back at the Week in Sixty Seconds.
:06:09. > :06:12.The think tank, Institute for Fiscal Studies, said an independent
:06:13. > :06:15.Scotland would need to cut spending or increase taxes to sustain its
:06:16. > :06:18.finances. Meanwhile the Scottish government published its paper on
:06:19. > :06:22.economic policy choices and independence. It suggested cutting
:06:23. > :06:26.corporation tax to spark a Scottish jobs boom. Welsh First Minister
:06:27. > :06:31.Carwyn Jones said he would veto the creation of a sterling currency zone
:06:32. > :06:38.if Scotland left the UK. If one part decides to leave, that is their
:06:39. > :06:55.decision. The bill legalising same-sex
:06:56. > :06:59.marriage in Scotland passed the first of three hurdles in Parliament
:07:00. > :07:01.in the face of continued opposition from the Church of Scotland and
:07:02. > :07:04.Catholic Church. Prestwick Airport passed into public
:07:05. > :07:08.ownership after the Scottish government bought it for the pound.
:07:09. > :07:11.It is expected to continue to operate as normal with no job
:07:12. > :07:16.losses. It is going to be a busy week in
:07:17. > :07:29.politics. Let's look at that and some of the stories making the
:07:30. > :07:33.headlines today. My guests this week are former Labour MSP Pauline
:07:34. > :07:36.McNeill and Murray Ritchie, who used to be the political editor at the
:07:37. > :07:41.Herald. Several other papers feature the
:07:42. > :07:50.White Paper. 670 pages. The SNP trying to answer all the questions
:07:51. > :07:58.people have? You can download it, you do not have to pay for it? I
:07:59. > :08:05.will try and read it all. But I was hoping for an executive summary?
:08:06. > :08:13.17,000 words. We know that a lot of people have questions and this is an
:08:14. > :08:19.attempt to address them. It is a landmark moment in the referendum
:08:20. > :08:25.debate. Nicola Sturgeon has said this will answer all the questions
:08:26. > :08:32.people have. The problem for the yes campaign is that it will not answer
:08:33. > :08:37.all the questions because there will be a lot of assertions in the White
:08:38. > :08:47.Paper, not the answer is that people are looking for. It may not satisfy
:08:48. > :08:52.people like you who do not supported. It will provide detail
:08:53. > :08:56.which is good and positive for the debate, but whatever your position
:08:57. > :09:00.on the independence referendum, we do know that on key issues like
:09:01. > :09:06.currency, and independent Scotland would not have an agreement, just an
:09:07. > :09:19.assertion that it would be part of the currency. I do think that the --
:09:20. > :09:25.that we are at a critical point where the arguments will intensify.
:09:26. > :09:31.I think the White Paper will be aimed at those who have not made
:09:32. > :09:43.their minds up. There can be no guarantees, as in life. I think some
:09:44. > :09:52.of the arguments have been fairly settled, such as the one about the
:09:53. > :10:04.European Union, but others can be resolved as well. Carwyn Jones does
:10:05. > :10:11.not have a veto. There is a lot of nonsense being talked on this. The
:10:12. > :10:15.currency is probably the issue which is going to cause the yes campaign
:10:16. > :10:23.the most trouble. Having said that, I think that when the White Paper
:10:24. > :10:33.comes out, we. The -- we. To see the fightback on the yes campaign. I
:10:34. > :10:42.think Alex Salmond's approach is I have not yet begun to fight. Talking
:10:43. > :10:50.about Falkirk, there will be our vote today to elect a new chairman.
:10:51. > :10:57.This has been a real difficulty. Falkirk has had an unfortunate
:10:58. > :11:06.history. Since we're back when Dennis Cameron was not selected as a
:11:07. > :11:14.candidate. I think the Labour Party has to get this sorted out. They
:11:15. > :11:20.have an all women short list there. Some really good candidates. It is
:11:21. > :11:26.up to Scottish Labour to win back the trust of people by sorting what
:11:27. > :11:31.has been happening. There are still questions about what actually
:11:32. > :11:38.happened. We do not know what happened. When you have a scandal,
:11:39. > :11:44.that is bad enough, but when you have a cover-up, which appears to be
:11:45. > :11:50.happening, that is even worse, it is a bigger scandal. Labour have
:11:51. > :11:57.suffered the selection procedure difficulties for as long as I can
:11:58. > :12:05.remember. It happens up and down the country. The need to get it sorted.
:12:06. > :12:12.Ed Miliband is taking a real chance if he is trying to hush it up. We
:12:13. > :12:18.have the date for the Cowdenbeath by-election, to replace Helen Eadie.
:12:19. > :12:24.This will be the second by-election in Fife in three months, how
:12:25. > :12:31.optimistic are you of your party's chances? You cannot take anything
:12:32. > :12:38.for granted in a by-election. We will be working hard to win the
:12:39. > :12:45.trust of people. The sad loss of Helen Eadie, very popular,
:12:46. > :12:50.hard-working person. She left a legacy there, but the approach that
:12:51. > :13:01.Labour will take at any by-election is to put forward its plans for the
:13:02. > :13:10.country. You do not always know what the issues are people will be. In
:13:11. > :13:20.the last by-election, schools became a big issue. Helen Eadie was a
:13:21. > :13:31.popular meat -- popular member. She was a decent person. In these
:13:32. > :13:37.circumstances, I think that Labour would be a very strong position.
:13:38. > :13:50.January is not a good month for campaigning. Yes, and by-elections
:13:51. > :13:56.can be difficult where parties have suffered a scandal, but not this
:13:57. > :13:58.one. And that is it for now. Goodbye.