24/11/2013 Sunday Politics Scotland


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

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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.


Political magazine presented by Andrew Neil and Andrew Kerr.

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