24/11/2013 Sunday Politics Scotland

Good morning. Labour has been hit hard by scandals at the Co-op. Ed

Miliband says the Tories are mudslinging. We speak to Grant

Shapps. We are still talking about banks in

trouble. I haven't the regulators got the message?

He used to have a windmill on his roof, but has planned to make the

Conservative Party more cuddly been ditched?

And on Sunday Politics Scotland. Hot off the press - the blueprint for

independence is published on Tuesday and the Scottish government names

the day the country becomes independent if we vote yes.

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

months. Here's what President Obama 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 2009, 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 2012, 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 that was not you have made a warning

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, 95% 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 1931, 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 UI happy that the party made gay marriage must a symbol of its

modernisation? -- are you happy. David Cameron was recorded as a

rebel at one point. It is often said this is a split between old and

young, it is actually a split between religious and nonreligious.

I think it is a misinterpretation of what happened. Is the modernisation

agenda on retreat? Well, what is modernisation? The Tory party is

always moving on. Seven years ago, in my part of the world, we got

three councillors and the age of 21 elected. Only a few months ago, a

25-year-old was chosen to fight Corby for the Conservative Party.

The Tory party is moving on. You have found three young people. Hang

on a minute. Three in one patch is not bad. What do you say?

Modernisation is about broadening our appeal and showing our values

are modern and relevant to voters who have not thought about voting

for us for decades. Modernisation is about boosting the life chances of

the poorest, about better schools in poor areas. Modernisation and Tory

party... We have always been for making poor people better. Was

Margaret Thatcher moderniser? At the moment, if we were to get all the

people who vote for UKIP to vote for us, we would have about 47% of the

vote. We have to worry about voters in the North. We need to show that

the other party for them. Going on a husky ride is not going to get

somebody in Darlington to vote Tory. Adding an EU referendum will

get them to vote Tory. We have to reach out, not by some London based

in it, you have to broaden the base. -- based in heat. We need something

which generally says we are on the side of poor voters, that they want

to boost the life chances of the poorest. Do you not think that

people who voted UKIP now do not share those aspirations? What they

are cross about is that we are not doing enough to cut immigration, we

have not got an EU referendum. We have to get the centre-right voting

for us again. Do that, and we will have them voting for us. We did not

win a majority at the last election because people thought we had not

changed enough. People thought we were still a party of the rich. Is

that not still the problem? People in the North seat you as a bunch of

rich southerners. Which is why we have to do more... You are a bunch

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

helping the poorest. There is a perception that the leadership is

rich, public school educated. I was educated at a public school. -- at a

comprehensive school. We have to get more people from state education at

the top. But you are going the other way. I think that is fair. And also

the modernisers are Porsche. -- posh. Thank you both. It could have

gone on for hours. Good morning. Coming up on the

programme. Going to the presses. The Government prepares its long-awaited

blueprint for independence. The launch dates please -- the launch

takes place here in Glasgow. Will it answer the questions of the people

in Scotland are asking? What will happen to the health care system. At

the moment, we get prescription is. Will the new tax be better or worse

for me? We'll be putting those questions and

others to the Deputy First Minister Nicola Sturgeon who's here in the

studio. And need your history refreshed? The

three-minute cartoon taking us through 300 years.

It has been billed as the most detailed blueprint for an

independent country that has ever been published. Journalists are

eager to get their hands on the white paper. One of the details we

have is the date of independence, optimistically pencilled in as the

24th of March 2016. From the First Minister down we have been promised

it will answer all the questions. Cue hearty laughter from sceptical

opponents. Andrew Kerr has been to the printer to look at some notes

and queries on independence. Somewhere at a secret location, but

not this one, 20,000 copies of the White Paper will be printed and

bound, all 670 pages of it. You would find something like this would

appear on your doorstep at two o'clock in the afternoon, be printed

overnight and delivered first thing in the morning.

It will be an elegantly written historical documents setting out a

blueprint for a new vision of Scotland, for those in favour of

independence. For those opposed to independence, it will raise more

questions than it can answer. We are talking about the Des campaign. They

have been on the back foot. You win referendums on by attacking. He says

it needs to deliver a simple message and answer the questions that all

the Scottish ministers said it would. Opponents are ready to

pounce. I and Daniel Johnson. I am going to vote to keep Scotland in

Britain. My question is, would independence make life more

conjugated for businesses in Scotland? It will mean two sets of

laws, two sets of taxes and currencies.

But for those in favour, it is an opportunity to show what an

independent Scotland can do. I am voting yes for independence. I

run a number of manufacturing businesses in Scotland, England and

across Europe. My question is, given Scotland's strong financial position

and our strong natural resources, how can we use that to support

business, particularly manufacturing business to reverse the decline we

have seen in manufacturing as part of the union?

Economic growth, jobs and business is said to be at the heart of the

paper. I'm David and I am voting yes. Would

we still keep the pound, or would we have a different currency? My name

is Kirsty and I am voting no. I want the truth about what will happen if

we become independent, the truth on the economy. I will be voting no to

the Scottish referendum and my question is, what is the situation

with border control? I am voting yes in next year's referendum, I would

like to see investment in renewable energy. My name is Michael, I am

undecided how I will vote. Would we still have the monarchy in an

independent Scotland? Well the answer is satisfying

opponents? Unlikely. I'm joined here in the studio now by

the Deputy First Minister Nicola Sturgeon.

Those people who want answers to their questions, they will have to

plough through 600s of deep pages to get them?

The document will be widely accessible, people can read it cover

to cover, or dip in and out for particular issues. This is going to

be the most comprehensive, detailed, well researched prospectus for the

independence of our country that has ever been published. Is there a

danger it will bamboozle people? I do not think so. All of the

legitimate questions that have been asked their answered in the White

Paper. More than answering questions, it will set the agenda

for the remainder of this campaign. It is a positive vision for what an

independent Scotland can achieve. My question to the no campaign is where

is their equivalent? Project fear comes head to head with Project

HOPE. You have set a date for independence day as it were, 18

months after the referendum. Is that enough time to negotiate all of the

detail? Yes, I believe it is. When the UK government got James

Crawford, and legal expert to write an opinion for them, he said it was

realistic. We have also looked a precedent in other countries. That

is the average time skill from people opting to be independent. --

timescale. And many other countries have made this journey. In setting

out your prospectors, there will be negotiation. You may well have to

compromise. What are your headlines when it comes to compromise?

Trident? The currency coach Mark -- the currency? The SNP position on

Trident is well known, we want to see it removed from Scotland as

quickly and safely as that can happen. That is one of the key

issues are the heart of this debate. The choice between spending billions

of pounds on nuclear weapons that nobody wants, can never be used

because it would devastate humanity, or investing those resources in the

things that people of Scotland want. What we have set out other

reasonable, rational and responsible cases. But you may not get your own

way and all of these things? How confident argue that you can get the

currency you want? Is there a fallback position? We set out the

position that they believe is in the best interests of Scotland, and the

best interests of the United Kingdom, the rest of the United

Kingdom. Scotland is the second biggest... Our exports make a

substantial contribution to the UK balance of payments, they will not

want to lose that. This issue about assets and liability, they have to

be taken as two sides of the same coin. The pound is as much

Scotland's as the rest of the UK. If the UK government want Scotland to

take responsibility for its share of the debt, they have to accept the

responsibility of sharing of assets. But you cannot guarantee this? There

are two categories of policy choices in the White Paper. The things that

will be negotiated, that current Scottish government will be leading

those negotiations, and these matters on currency and the European

Union will form the starting point of an independent Scotland. But

there is no guarantee on the currency. Wouldn't a sensible

position be to have a fallback? We will be in a currency union because

it is in the best interests of Scotland and the UK. Alistair

Carmichael said we would not be able to watch Doctor Who in an

independent Scotland. The real campaign entirely approach -- the no

campaign's entire approach is to make people frightened. But is the

low fallback position? The key point is that a currency union is

overwhelmingly in the best interests of the UK, so to accept Alistair

Carmichael's point you would have to accept that the UK government would

argue a position that was against his own interests. That does not

make any sense. Your previous White Paper talked about joining the

euro. The fiscal commission has done an extensive piece of work on

currency options in in an independent Scotland. The best

option, they concluded, was to retain sterling. We do not favour

going into the euro and we have made that abundantly clear. The other key

point that has to be stressed is that there is no way an independent

Scotland could be forced into the euro. The conditions for you got

membership is voluntary condition. Scotland cannot be forced into the

euro and anybody who argues that is being misleading. We are told that

the prospectus on Tuesday will tell us what you are likely to offer from

the 2016 election in Scotland. Art civil servants join up -- are civil

servants join up... Igbo -- it will transfer and it illustrate the way

that the Scottish government will choose to make the Scottish people

welfare. That is the exciting thing about this debate. We will get the

government is that we've fought for. In 2016, I will be campaigning for

an SNP government, but the other parties will be able to put forward

their position. Scotland will be guaranteed to get the government it

votes for, rather than having a Tory government that they did not vote

for. That was the Deputy First Minister

Nicola Sturgeon. Joining me now live from London is the Scottish

Secretary, Alistair Carmichael. We are getting a prospectus of how

Scotland would evolve through the rest of this decade. RB going to get

a similar prospectus from you? You have been getting this for months as

part of the positive case of Scotland remaining part of the

United Kingdom. We have published a series of analysis papers,

exceptionally well researched. But you are not telling us what will

happen to mark you are not allowed to characterise what has been a

substantial piece of work which has outlined a very positive benefits

that come to Scotland from being part of the United Kingdom.

Recently, the tremendous amount of money that comes to Scotland to go

into research in our universities. That is part of the benefit that

they get from being part of the United Kingdom. There will be no

action on the Barnett formula until the economy has stabilised. But

there is a campaign, local government chiefs in England are

pushing the UK Treasury to snap the Barnett formula. Do you anticipate a

position where Scotland may get less money further down the line? I can

only tell you that for the first see above future the Barnett formula

remains. -- foreseeable future. The simplest way of getting rid of it is

to vote yes and for Scotland to become an independent nation because

that is the end of the Barnett formula. Do you think the formula is

too generous to Scotland? I think it has served the UK very well for a

long time. It has evolved in that, we know, will continue to evolve,

and unless there is something that is demonstrably wet are able to

serve that purpose it stays. -- better able. The Chancellor has said

that posterity will continue for some time. The ISS said that the UK

will be running a deficit for many years. -- the IFS. In order to get

to the same point we are in in the UK then taxes would have to go up

and cuts would have to go beyond what we have already seen. Is it

still your position that a currency union post independence is

unworkable? Is that a political or economic position? If Scotland walks

away from the UK it walks away from the pound. Why would an independent

Scotland want to enter into a currency union where they had

subcontracted their ability to set interests rates and so on? What is

in it for the rest of the UK to put themselves forward as the last

resort for banks over which they have no control? Currency unions are

very difficult to make work. You see that in the Eurozone, they rely on

fiscal and Lettergull integration. Independence is is about political

disintegration. Carl Wingrove -- car when Jones came to Edinburgh to say

exactly that. -- Carwyn. In the event of a currency union not

happening, what will be the plan be? People in Scotland want to know.

Would a yes vote not be an endorsement of the decisions the

Scottish Government have put into their White Paper? Is it not

incumbent on you and other politicians to make that work? If

there is a yes vote I am not going to be part of the negotiation

because as a Scottish Member of Parliament I will not be determining

what the negotiating position will be for the remainder of the UK. You

can't possibly expect that to be the case. You would expect ministers in

Westminster to our -- to negotiate in good faith. What the Scottish

Government have to be honest about is to acknowledge those issues over

which they have control, such as the future shape of health care or

whatever. And those issues on which they can only express and

aspiration. Currency union is one, NATO membership. Once there is a

negotiation nothing is guaranteed. A negotiation has to produce something

workable for both sides. You can't just say that because the Scottish

Government have put it in their White Paper that it is necessarily

going to happen. That is not how negotiation works. You mentioned the

new year. Can you give a guarantee that by the end of the decade the UK

will still be in the U -- the EU? I don't think we can give a

guarantee, any more than the Scottish Government can. As long as

Scotland is part of the UK then this trend -- the case for keeping the UK

as part of the European Union is strengthened. If Scotland walks away

from the UK then it walks away from things like European Union

membership. She would have to negotiate her way back in. There are

other countries in Europe who have interests for there own domestic

reasons for making that difficult. Alistair Carmichael, thank you for

joining us. Brian Taylor has been listening to

Nicola Sturgeon and Alistair Carmichael and joins us live. 670

pages, is this to silence the critics of the yes campaign who say

they have been vague? Yes, they could have gone for a slim volume

but they have gone for one which sets out what they believe is all of

the detail. The final section of that, 150 pages, will be a question

and answer section, with all of the questions they have had from members

of the public. Will those answers satisfy everybody? That is a

different question. One of the fundamental elements of the debate

is that first of all there can be no guarantees about an independent

Scotland but also you heard the point about the European Union,

there can be no guarantees generally with regard to politics and life in

these troubled times. That is a challenge for those who are

advocating change, but on the one hand the other side only have to

offer continuation. When we look at the detail contained in this, which

areas are likely to come under most scrutiny? The economy is the issue

that will determine this. At a time of uncertainty, as we are at the

moment, people require reassurance, some form of their concerns being

assuaged. That is why I think there will be considerable detail on

welfare and pensions, provision for childcare, etc. Do you think the

better together campaign will come up with anything new as a result of

this? They will be sticking with their themes, not to be pejorative.

In some ways the basic questions and answers, basic concerns are fairly

well-known in this referendum, it is simply a question of expounding them

so people absorb them. An intriguing aspect is the nature of the White

Paper, philosophical as well as pragmatic. A Labour Secretary of

State set up proposals to be decided by a Labour government. Alex Salmond

says the White Paper is a prospectus. They are entitled if

there is a mandate from the people to see that delivered in concert

with the UK Government. The UK Government say it is a wish list, a

starting point for negotiations. Even if there is a yes vote they say

that they are not entitled to have that currency zone. It sounds like

anything real argument but it is actually the core of the debate

about how and whether the white vapour will be put into practice. --

the White Paper. How much detail are we really going to get next year?

Each of the main opposition parties at Holyrood, they have commission is

looking at this in terms of what powers for Holyrood. Do I think

there will be a single coherent -- alternative to Westminster? I don't

think so. But I think they will find a common point in some way, perhaps

the idea of a convention post-referendum that will say,

change there will be, without giving every single detail. Perhaps giving

more tax powers as a counterpoint to independence. Thank you very much.

With what we hear is well over 600 pages of information, we may end up

with little time for reflection on how we reached this landmark on the

road to referendum. Here is a quick reminder of the story so far.

Why are we going round in circles? We are trying to find a way to

Scotland's future. Just around the next bend in the road, Scots get a

vote on who runs the country. We know who runs the country, the

bankers. No, it is a vote on who makes the laws and gets to decide

who -- how the government's money is spent. We already decide how to do

that. Yes, but many of the big decisions, like going to war, are

made in London. What happens if the Scots don't agree with the English

or the Welsh? The ones who have the most votes get their way. What is

all this about change now? Where to start? How about the ancient Picts

keeping the Romans away? Perhaps more recently. 700 years ago we sent

them home to think again. How about 1707, when the Scottish Parliament

voted the former union with England to popular acclaim. That is not what

I remember from history lessons. It all goes into the mix. Some say in

the 300 years following the act of union Scotland suffered and many had

to leave and Scottish culture was diminished in favour of English.

Others point out that the Scots did rather well out of the empire. Some

fought for it, others administered it, some made a pile of cash out of

trading with it. We are running out of time and you have not mentioned

Alex Salmond or the SNP. The Lilly 50 years it grew from being a small

band of others and sisters to one of -- to winning a few political

skirmishes. They got a 1967 by-election breakthrough. All the

while, Scots' sense of there own identity was picking up. In 1999 the

Scottish Parliament was created and Donald Dewar became its first first

Minister. In 2007, led by Alex Salmond, the SNP claimed victory in

the Scottish Parliament for the first time. If we wanted

independence, why not voted -- vote on it? Or though they were the

largest party they did not have enough seats to win a vote for a

referendum. -- or though. Alex Salmond said he did not want a

referendum immediately. He has decided on 24 March 2016. Does he

need time to make the case for a yes vote? Maybe he thought the economy

would be sorted out by then. He wanted to make sure the referendum

is legally watertight. So there is agreement on independence? Far from

it, Westminster and Holyrood have agreed on how the Scots would run

their affairs. Have the Scots agreed on that? We will find out on 24

March 2016. That is the point of the vote, remember?

You are watching Sunday Politics Scotland, let's cross for the news

from Reporting Scotland. Good afternoon. 24 March 2016 will

be the day Scotland becomes independent if there is a yes vote.

The White Paper will soon be printed before publication on Tuesday.

Deputy First Minister Nicola Sturgeon said if it came -- said

they would the currency union but Alistair Carmichael said it would be

unworkable. Falkirk Labour party is set to elect

a new chair. It is believed Stephen Deans will not stand for re-election

when the post is contested. He is a Unite union convener who was accused

of vote rigging in Falkirk and was later cleared.

independent if there is a yes vote. Now if you're named David and you

live in Aberdeen, you could take part in a record-breaking,

carol-singing extravaganza. At three o'clock at the city's Mercat Cross,

a David-only choir will sing what else but Once in Royal David's City.

Choristers must be at least seven years old. The event will coincide

with the Christmas lights switch on. Now let's take a look at the

weather, here's Gillian. years old. The event will coincide

Another mostly dry afternoon, but a fair degree start to it with

freezing fog patches slow to shift, especially around the Glasgow area.

The cloud will tend to think and break through the day and there will

be some sunshine getting through. It will be called where that -- cold.

That's it. Our next update is at 6.20. Back To Gary. Thanks Andrew.

Now in a moment, we'll be discussing the big events coming up this week,

but first, let's take a look back at the Week in Sixty Seconds.

The think tank, Institute for Fiscal Studies, said an independent

Scotland would need to cut spending or increase taxes to sustain its

finances. Meanwhile the Scottish government published its paper on

economic policy choices and independence. It suggested cutting

corporation tax to spark a Scottish jobs boom. Welsh First Minister

Carwyn Jones said he would veto the creation of a sterling currency zone

if Scotland left the UK. If one part decides to leave, that is their

decision. The bill legalising same-sex

marriage in Scotland passed the first of three hurdles in Parliament

in the face of continued opposition from the Church of Scotland and

Catholic Church. Prestwick Airport passed into public

ownership after the Scottish government bought it for the pound.

It is expected to continue to operate as normal with no job

losses. It is going to be a busy week in

politics. Let's look at that and some of the stories making the

headlines today. My guests this week are former Labour MSP Pauline

McNeill and Murray Ritchie, who used to be the political editor at the

Herald. Several other papers feature the

White Paper. 670 pages. The SNP trying to answer all the questions

people have? You can download it, you do not have to pay for it? I

will try and read it all. But I was hoping for an executive summary?

17,000 words. We know that a lot of people have questions and this is an

attempt to address them. It is a landmark moment in the referendum

debate. Nicola Sturgeon has said this will answer all the questions

people have. The problem for the yes campaign is that it will not answer

all the questions because there will be a lot of assertions in the White

Paper, not the answer is that people are looking for. It may not satisfy

people like you who do not supported. It will provide detail

which is good and positive for the debate, but whatever your position

on the independence referendum, we do know that on key issues like

currency, and independent Scotland would not have an agreement, just an

assertion that it would be part of the currency. I do think that the --

that we are at a critical point where the arguments will intensify.

I think the White Paper will be aimed at those who have not made

their minds up. There can be no guarantees, as in life. I think some

of the arguments have been fairly settled, such as the one about the

European Union, but others can be resolved as well. Carwyn Jones does

not have a veto. There is a lot of nonsense being talked on this. The

currency is probably the issue which is going to cause the yes campaign

the most trouble. Having said that, I think that when the White Paper

comes out, we. The -- we. To see the fightback on the yes campaign. I

think Alex Salmond's approach is I have not yet begun to fight. Talking

about Falkirk, there will be our vote today to elect a new chairman.

This has been a real difficulty. Falkirk has had an unfortunate

history. Since we're back when Dennis Cameron was not selected as a

candidate. I think the Labour Party has to get this sorted out. They

have an all women short list there. Some really good candidates. It is

up to Scottish Labour to win back the trust of people by sorting what

has been happening. There are still questions about what actually

happened. We do not know what happened. When you have a scandal,

that is bad enough, but when you have a cover-up, which appears to be

happening, that is even worse, it is a bigger scandal. Labour have

suffered the selection procedure difficulties for as long as I can

remember. It happens up and down the country. The need to get it sorted.

Ed Miliband is taking a real chance if he is trying to hush it up. We

have the date for the Cowdenbeath by-election, to replace Helen Eadie.

This will be the second by-election in Fife in three months, how

optimistic are you of your party's chances? You cannot take anything

for granted in a by-election. We will be working hard to win the

trust of people. The sad loss of Helen Eadie, very popular,

hard-working person. She left a legacy there, but the approach that

Labour will take at any by-election is to put forward its plans for the

country. You do not always know what the issues are people will be. In

the last by-election, schools became a big issue. Helen Eadie was a

popular meat -- popular member. She was a decent person. In these

circumstances, I think that Labour would be a very strong position.

January is not a good month for campaigning. Yes, and by-elections

can be difficult where parties have suffered a scandal, but not this

one. And that is it for now. Goodbye.