11/02/2018 Sunday Politics Scotland

Morning, everyone, and welcome

to the Sunday Politics.

I'm Sarah Smith.

And this is the programme that

will provide your essential briefing

on everything that's moving

and shaking in the

world of politics.

After all the waiting we're

finally going to hear

the Prime Minister's vision

for Britain's future relationship

with the European Union,

but not for another couple of weeks.

We'll look at what she might say.

Key to any agreement will be

whether we should bind our customs'

arrangements closely to the EU,

or strike out on our own.

We'll speak to leading figures

from both sides of the argument.

And Labour argue public

ownership of services

like the railways are

an "economic necessity".

We'll look at how

the policy could work

Coming up on Sunday

Politics Scotland:

The Scottish Government has been

accused of going AWOL over

the East Coast Mainline franchise.

We'll be asking Humza Yousaf

about transport strategy.

Who needs the Winter Olympics

when there's plenty

of thrills, spills and potential

wipeouts in the world

of Westminster.

And with me today are three experts

who may very well go off piste:

Tom Newton Dunn from the Sun,

the Guardian's Zoe Williams

and Iain Martin from the Times.

So we hear that Theresa May

will finally be giving her

vision of a Brexit deal

in the next few weeks.

The news follows Mrs May hosting two

Brexit cabinet meetings this week

in an attempt to thrash out

the government's

negotiating position.

If reports are to be believed

not much was decided,

and so there will now have to be

a team building session

at the prime minister's

country residence Chequers.

Maybe a few trust exercises

will be in order.

At the moment however we're none

the wiser and the EU's Chief

Negotiator Michel Barnier seems

less than impressed.

To start the week the EU chief

negotiator, Michel Barnier,

made a trip to Downing Street

with Brexit secretary David Davis.

Pleasantries with the PM,

but the warning was clear.

Time has come to make choice.

All week the question was,

are the Cabinet running

away from making tough

decisions on Brexit?

As America woke up, the President

took a pop at the

National Health Service on Twitter.

But was it all fake news?

The Health Secretary hit back.

The Transport Secretary,

Chris Grayling, told the Commons

that yet again the East Coast

mainline franchise had failed,

with renationalisation an option.

While tensions in the

Conservative Party on Brexit

were on full display.

One leading Tory Remainer

did not hold back.

35 hard ideological Brexiteers

who are not Tories.

It's about time Theresa May stood up

to them and slung them out.

On Tuesday, deeds and words,

MPs celebrated 100 years since

some women were given the vote.

Westminster awash with suffragette

colours purple, green, and white.

Wednesday and Thursday,

the Brexit War Cabinet settled

in for crunch talks.

They were meant to decide

what the end state should look like.

Breakthrough?

Not yet.

Also on Thursday, a leaked EU paper

warned that the UK's single market

access in the Brexit transition

period could be revoked

in the event of a dispute.

Discourteous?

The Brexit secretary thought so.

It's not in good faith.

We think it's unwise

to publish that.

The week ended as it

began, with more warnings

from Michel Barnier on Ireland,

the customs union,

and continuing EU UK disputes.

If this disagreement persists,

the transition is not a given.

So, at the end of a busy week why

not let off steam with a glass

or two of Brexit juice,

that's English sparkling wine

to you and me, at the annual

Conservative fundraiser the black

and white ball.

The highest bid of the night?

£55,000 to spend a day with the PM.

We could not afford to get her on to

this programme but we will talk to

our panel of experts to find out

what is going on behind the

headlines. Iain Martin, by now we

thought we would know more about the

government's final negotiating

position. We had two Brexit

subcommittee meetings this week.

They were meant to come to a

conclusion I thought. Are we any

further forward?

No. It is possible

this is a cunning baldric style plan

to make Britain look as confused as

possible.

A very, very cunning plan.

Very cunning. But the chances of

that are highly unlikely. It seems

the meeting has happened, there was

discussion, the Prime Minister did

not express an opinion. The Prime

Minister was more interested in

secrecy and in fear of a leak, but

it seems there was not much to leak

anyway, because there was not a

decision. Actually, the UK's closer

to a position than people commonly

understand, definitely out of the

single market, but on this crucial

question of the customs union, or a

customs agreement after, there is

still no decision taken. I think the

feeling at Westminster, people on

both sides of the argument seems to

be will someone decide, make the

case and then get stuck into the

talks which lets remember our

supposed to begin in six or seven

weeks' time.

This Brexit

subcommittee is split between

Brexiteers and Remainers. The Prime

Minister sits in the middle we

understand not really expressing a

view, that is put together for

careful political reasons but it

cannot continue, can it?

I think the

presentation at the minute cannot

come to a decision because they have

not done their homework, student

essay style crisis conclusion and in

the case of David Davis you could

believe that is true but the main

reason they cannot come together is

because of an implacable deadlock.

There is no compromise between in

the customs union or not in the

customs union. One side has to

vanquish the other. The Remainers

really have to think it would be

economic suicide to leave the

customs union but they are also

really aware that this deadlock is

grinding government to halt. It is

national duty pulling them in two

directions. They will ultimately be

the ones to say I do not want to cut

the baby in half, you have the baby.

At some point it will have to go to

the country because it is a stupid

idea to cut a baby in half expect

what will happen for the Prime

Minister who will have to make a

decision for the kind Brexit she has

advocated?

She will do that and the

danger is huge. She will have to get

off the perch at some point. We have

been sitting in these chairs for 20

months saying the Prime Minister has

to choose between prioritising

market access and prioritise and

sovereignty. That is the simple

case. You may get a bit of both out

of the EU but you will get more of

one than the other. I think

interestingly, there is a lot of

movement going on under the surface

which Number Ten are desperate not

to show any of the machinations of

it because they want to present a

complete finished article. There is

some sense of consensus growing in

the Brexit community I am told, not

to sign off on a customs union but

to sign off on a semi-single market

alignment, soap aligning with all

the single market rules on

manufactured goods is what I am told

they are beginning to agree to do,

which they feel they should do

because British companies will go

ahead and stand by all the EU

regulations because that is what

they want to continue to sell into

the EU. There are some members of

the committee who are opposed to

this. Boris Johnson is the main one.

If they do agree to allow heavily on

manufactured goods but not on

services, in other words they choose

what to Jerry picked and can agree

what to cherish pick -- cherry pick,

but if they choose what to align on

Ben Boris Johnson has do make a

decision himself.

decision himself. We could

potentially see some Cabinet

resignations and I put Boris Johnson

at the head of it in two or three

weeks' time. That is the root of the

potential compromise.

On services,

on financial services, there is not

a functioning single market. The

question comes down to manufactured

goods. A lot of the regulations have

their origins in global standards,

something like the car industry. Is

Boris Johnson going to find himself

in a position where he will die in a

ditch over trying to make the UK

diverged from globally set standards

on carburettors? It would be an

interesting position if he does.

It

sounds ridiculous but it also sounds

like the sort of thing he will do.

We will come back to this later in

the programme.

As it's still not clear

what the government wants its final

relationship with the EU will look

like, we thought we'd

try to help out by looking

in detail at the key dilemma,

when it comes to working out

a customs arrangement,

should we hug the EU close,

or break out on our own?

We've lined up two politicians

from either side of the argument

and, just for a change,

they'll be asking

the questions not me.

So I'm joined by the soon to be

former Conservative MEP and leading

figure in the Leave campaign

Daniel Hannan and by the former

Labour frontbencher and supporter

of Open Britain Seema Malhotra.

Earlier this morning we tossed

a coin to see who would go first.

Daniel Hannan won and he agreed that

he would go first.

So here with thoughts

on what our end

relationship should be.

90% of the world's economic growth

over the next 15 years will come

from outside the European Union.

Britain is a maritime nation, linked

to the world's fastest-growing

economies by language, law, culture

and kinship. But we cannot sign

trade deals, not while we are in the

EU's customs union. Staying in the

customs union after we leave, would

be the worst of all worlds. It would

give Brussels 100% of our trade

policy with 0% input from us. In

order to take advantage of Brexit,

we need to set our own regulations.

Sometimes, for reasons of economies

of scale, we might want to match

what the EU is doing. If we do want

to keep elements of the single

market, it must be through agreement

and on a case-by-case basis. In

1980, the states now in the European

Union counted for 30% of the world's

GDP. Today that figure is 15% and

falling. Britain needs to raise its

size. Our future bright, our future

is global.

Well, Seema and Dan are with me now.

And just to explain the rules.

Seema Malhotra has five minutes to

interrogate down.

This week a Tory

MP said I think the real concern

about the direction of travel when

it comes to Brexit, we are to real

crunch point and the government has

not worked out 19 months on what the

endgame is and we need to know. That

is pretty clear, isn't it? You and

others said Brexit will be easy so

why is this the case?

Nothing

worthwhile is ever easy. I do not

accept that the government has not

made it position clear. It made it

clear in Lancaster House beach and a

series of white papers since. As

Theresa May says we want to keep

control of our laws, taxes and

borders. But within that, we want to

have the closest possible

relationship with the rest of the

EU, compatible with being a

sovereign country. We want to be its

best friend and ally. We will align

with other countries but on our own

terms.

Things are not going

according to plan. You and others

said we will be keeping key

agencies. David Davis said we would

keep the agencies but now they are

leaving. The European medicines

agency is heading for Amsterdam, the

European banking agency will go to

Paris. That is 2000 highly skilled

jobs being lost from the capital.

Isn't this a high price we are

paying for certainty?

If you're that

fixated on Eurocrats jobs then you

there is something wrong with your

priorities. All of the worries we

had about job losses turned out to

be nonsense. Instead of losing half

a million, we have gained half a

million. More people are working

than ever before. I never claimed we

would be keeping these Euro agencies

in the UK. Of course if you leave

the EU you leave these Euro agencies

and you no longer have them on our

soil. We will make our own

regulations.

You are calling these

agencies Eurocrats, these are people

helping with key sectors of our

economy, scientists, those who are

experts in finance and other

sectors. I agree that Britain could

trade more with the world and we

need to, but evidence of leaks from

the government this week shows that

the impact of free trade deals

around the world will no way

compensate for the loss of trade

with the EU which a hard Brexit

would do for the UK. If you don't

believe me, you can listen to the

words of the Prime Minister who said

during the referendum we export more

to Ireland than we do to China,

twice as much to Belgium as we do to

India, it is not realistic to think

we could replace European trade than

these markets.

We export more to

Ireland than China, that is our

problem! Which is the better

long-term growth prospects?

Don't

you agree that there will be an

impact on British businesses and

families even in the short term and

isn't it right that you raise that

risk with the British people?

Obviously we want free and

frictionless trade with the EU and

the freedom to my trade deals

further of broad. EU does not have a

trade deal with US, with India and

old friends like Australia, the idea

that we cannot do trade deals and

bring benefits to this country I

think is incredibly defeatist. Are

we really saying it is a good idea

to sell more to Ireland with five

mil in people than to China with

more than a billion. -- 5 million

people.

Their study after study

which shows the proximity we have

two nations goes a long way to

determining our economic links, that

is not just the case for us but for

countries around the world. Of

course we can do more. We have a

trade surplus with the US already. I

have spoken to investors from other

countries who say they want to come

and do more in the UK but the point

is, part of the reason they do that

is because we have access and they

have access to the European markets

of 500 million people to sell those

goods as well. What do you say to

the genuine concerns from Nissan and

Honda, now even the Japanese

ambassador talking about a challenge

to the profitability of those

companies in the UK, and the threat

they may have to leave those

operations and go elsewhere?

They

made those threats during the

referendum and after the vote was in

they confirmed that not only were

they staying here but Nissan was

increasing its productivity and

activity in the UK. I think you

should look at what they are doing

rather than what they are saying.

This idea that we are defined by our

geography is an old-fashioned

18th-century way of looking at

trade. In the modern age where we

have low freight costs, the Internet

and cheap flights, geographical

proximity has never mattered less.

We are linked by language, law,

cultural, legal systems and

accountancy systems to the fastest

growing con is the planet.

I would like to ask you, you have

set all your vision for how you

would like to see our future

relationship with the EU. How

confident are you the Prime Minister

will outline a clear vision soon and

it will outline with Ewels?

She's

outlined the broad principles

already. -- with yours. Fleshing out

issues like how to make the Irish

border were, how to make the

facilitation of customs work. This

thing nobody has explained what we

can do in terms of customs is not

true. The government produced a

lengthy paper talking about how we

can do things like expand the ...

It's worth noting that both ahead of

HMR see here and his equivalent in

the Republic of Ireland have said

there is no need for a Customs

border, that companies can make

their customs declarations in the

way they make their tax

declarations. They are now

emphatically not choosing to listen

to the experts when they say they

don't need a hard order in Ireland.

Thanks.

Now it's the turn of Seema

to be grilled but first,

here's her thoughts on how

our future relationship

with the EU should look.

I respect the result of the

referendum. We need to move forward

to find a deal that protects jobs in

the economy. 43% of all of our trade

is done with the EU. Staying inside

the customs union gives us tariff

free trade access to our many new

partners. Issues surrounding

immigration and sovereignty can be

addressed while staying in the

customs union and the single market.

But on terms that we negotiate. We

can also then trade freely with

countries the EU has deals with.

Deals that we have helped negotiate.

And staying in the customs union is

key to a solution on Ireland. Our

select committee found that it is

unclear how we can avoid a hardboard

if we leave the customs union. I

agree we need reform and greater

controls on the freedom of movement,

but people did not vote to become

poorer. Let's leave the European

Union in a way that puts the

prosperity of families and

businesses first.

So as before you have five

minutes to give a grilling.

Off you go.

Two weeks ago Jeremy Corbyn says

said he was against staying in the

customs union because it is

protectionist against developing

countries, do you agree?

It's

important to balance what we do need

to see change in terms of

international trade and support for

developing countries. But also to

recognise the contribution that

being in the customs union and the

European Union has made for our

prosperity...

Do you agree with

Jeremy Corbyn?

I think that a lot

has been done to support

development, International

development...

Forgive me, that's a

different question... We're not

talking about that, do you agree

that the customs union is

protectionist against developing

countries?

It can be for those

countries that are in the customs

union. That's very understood

economics. It encourages trade

creation and development between

those countries, but it doesn't

preclude, as has been shown by the

over 60 trade agreements we have is

a European Union with countries

around the rolled, from having

strong relationships with other

countries. That's what I believe. --

countries around the world.

There

are lots of things we do not produce

ourselves. We have to impose tariffs

on oranges. In yours and my

constituencies there are not orange

plantations. Is it a reasonable

thing that to protect Mediterranean

orange growers we should be

discriminating against producers in

Africa, the Americas, developing

countries, at a cost our own

consumers?

I believe what you can do

is negotiate across the world in

terms of how you encourage greater

free trade and greater ways in which

we can trade with different nations.

That's what we do also already. We

had no Norma 's track record in

investing in farmers in Africa...

On

that point... -- we have had an

enormous track record. That means we

are giving Brussels total control of

our trade policies but we are no

longer EU members so we have no

control.

Almost 50% of our trade is

with the EU. Over 70% of the

companies... Over 70% of companies

that export to the EU, that is jobs

your constituents and my

constituents will be dependent on,

over 90% of that being small and

medium-size enterprises. They

look...

I'm not having much joy

getting answers to my questions. You

are going off on a tangent. Let me

have another go.

I'm saying we can

do both and that is what we should

be doing.

You think leaving the EU

but staying in the customs union so

Brussels controls 100% of our

Brussels controls 100% of our trade

but we have zero input... You think

that gives us more influence in

world trade than taking our own

voice and vote in the world trade

organisation and be able to do our

own deals, is that what you are

saying?

When you talk about the WTO

rules, if you look at the

government's analysis which was an

average of other studies, it shows

even in the South East if there is a

withdrawal based on...

I'm going to

have one more go to get an answer

because you are telling me lots of

interesting things which are nothing

to do with what I'm asking. Let me

have another go... The highest

tariffs imposed by the customs union

are on the items that most

negatively impact people on low

incomes, particularly food,

clothing, and footwear. They pay a

proportionately higher chunk of

their weekly Budget on these

commodities, these basic things.

They are the most badly hit. We are

clobbering poor people in this

country in order to hurt developing

nations. How can you come as a

progressive politician with a proud

history of standing up for people

who are underprivileged, now stand

there and defend a system that

forces us to give more to wealthy

French farmers than poor African

farmers, and forces the highest

bills to be paid by the lowest

income people in Britain?

I will

fundamentally disagree with you. I

believe being a member of the EU has

been fundamental for our prosperity,

for families and businesses. What

you fail to highlight is numerous

studies that show many British

families are worse off as a result

of us having had the referendum and

now the uncertainty that is

followed. People have already

suffered. -- that has followed.

You

are still not answering. Let me have

another crack at this. The countries

closest to the EU economically. The

countries that have opted to

parallel or join the single market

Norway, Switzerland, Iceland,

Liechtenstein, none of them is

interested in joining the customs

union. Why do you think that is?

They have separate arrangements.

They have arrangements with each

other. They have ways of resolving

disputes. It is like a mini European

Union in the way that they work

together. I believe that we could

consider approaching those countries

to see whether that would be an

arrangement that could work for

Britain.

That would mean leaving the

customs union, right?

Potentially

alongside how we negotiate being in

the customs union. Fundamental for

peace in Northern Ireland and the

Good Friday Agreement. It's not just

me saying that, it's the Irish

government, the head of the Irish

police, and the Irish people.

Time

is up. Thank you for your questions.

What you are advocating is not

Labour policy. Do you believe you

will change the mind of Jeremy

Corbyn?

You know there is a debate

going on in the Labour Party. That

is not unexpected, because as the

situation changes, as new facts come

to light, as we have to consider

what life will be like with the end

state post the transition, we will

have that debate. It is certainly

the case that the range of views

across the Labour Party are far less

in terms of the spectrum of what's

going on in the Conservative Party.

The fundamental issue is we have a

Prime Minister and cabinet that have

no idea about end state. They have

failed to reach any sort of

agreement after two days away this

week. And I think it is embarrassing

for us as a nation that 19 months

after the referendum we are in such

disarray.

Thank you both very much

for coming in and asking the

questions.

And those of you in the South

of England will be lucky

enough to see more of Dan Hannan

as he'll be appearing

in the Sunday Politics South

in just over ten minutes.

And you can find

more Brexit analysis

and explanation on the BBC website,

at bbc.co.uk/Brexit.

The recent collapse

of Carillion and the ending

of the East Coast Rail franchise

early has emboldened the

Labour Party to push its agenda

for renationalising key services

such as rail, water and energy.

But that's not all, the party

is looking into supporting local

economies by helping councils do

things like bringing

more services in house,

using local small businesses

where possible and helping to set up

new small scale energy companies.

So, is the plan workable,

and can it help Labour shed

the image that more state control

will lead to inefficiency and a lack

of innovation and investment?

Elizabeth Glinka has

travelled to Preston,

a Labour council the party

are championing as a model

for the future, to find out more.

When he visited in the 1850s car

Marks said industrial Preston might

be the staging post for an economic

revolution. It's taken 160 years but

he may have been onto. -- Karl Marx

said.

Preston described in the press

as a pilgrimage for London folk.

LAUGHTER

The Shadow Chancellor just dropping

in this week to heap praise on

Preston's new locally focused

economic plan. Nowhere is that plan

more visible than at the city's

trendy undercover market. Traders

rush to finish their new stalls

ahead of next week's reopening. The

so-called Preston model borrows

heavily from similar schemes in the

American rust belt. It installs the

virtues of keeping more services

in-house using worker let

cooperatives. And when it comes to

big contracts like the redevelopment

of this beautiful Victorian market,

they go not to the overextended big

boys like a religion but to smaller,

local firms, keeping the money in

the area. -- like Carillion but to

smaller, local firms. Matt Brown, a

local boy motivated by what he saw

as the continued decline of a once

great city, is behind this.

We came

to the conclusion that a fightback

we've got to do it ourselves. We

cannot be dependent on central

government that is cutting back on

money. The public sector is pretty

much buying locally from local

suppliers. We are looking to form

cooperatives. We're selling our own

energy in partnership with other

councils. Pensions are invested

locally. These alternatives around

the world. In American cities like

York, Cleveland, and Barcelona,

people are waking up to the fact

that we have an economy that works

for the top 1%. -- like New York and

Cleveland. And the rest of us are

basically fighting for the scraps.

Under the model the council has

spent an additional £4 million

locally since 2012. It has also

persuaded universities and hospitals

to redirect their spending towards

local suppliers. And it isn't just

Preston, a number of other Labour

authorities are trying something

new.

We have local councils now that

have set up energy companies to

provide cheaper, renewable energy

foot we have others running bus

networks. -- cheaper, renewable

energy and we have others running

bus networks. It is a way of getting

best value for money as well as

Democratic controlled of services.

Your critics might say this is

cuddly, cooperative windowdressing

for an agenda which, long-term, is

about mass renationalisation, which

you think the public would not be

keen on.

CHUCKLES

How sceptical people can be. I am a

socialist. We should share our

wealth. We have councillors going

out to get elected. When they get

elected they say they will use our

council resources locally and in

that way we can benefit local

people.

Is it back to the future? It

was revealed this week the

government may be on the brink of

renationalising the East Coast

mainline. Labour's frontbencher has

been clear about its aspiration to

renationalise not just a rail but

energy, the Post Office, and even

water. This weekend the party held a

conference to discuss the expansion

of the Preston model, but others

remain less convinced by its wisdom.

This idea is very popular nowadays,

both on the political right, people

like Trump promoting it, and on the

political left. But it is a failure

to understand the benefits of trade.

The idea you can enrich yourself

with the border. I draw a line

around an area. And somehow that

will make us better off is magical

thinking. How you become better off

is through becoming more productive.

These ideas are tricks for becoming

richer that involve boundaries. It

is an abiding fantasy, but it is a

fantasy.

The doubters may doubt, but

in a post-Carillion world labour is

convinced public opinion is pulling

in its direction.

Well, to help me to understand

more about Labour's

plans I'm joined by Labour's Shadow

Transport Secretary Andy McDonald

who's in Newcastle.

Good morning, thank you for joining

us.

John McDonnell says the plans to

re-nationalise energy, water and

rail would cost absolutely nothing.

That sounds too good to be true.

Explain how it could work?

In terms

of the rail Wales, it would bring

the railways back into public

ownership at no cost at all. -- in

terms of the railways. We would

bring them back once the franchises

expire. That would be considerable

savings of £1 billion per annum.

Then you will have to find £70

billion for the water industry,

nearly 40 billion for the National

Grid, how can that cost nothing?

Because you would be acquiring an

asset, you would be acquiring an

asset, you would be paying back the

revenues which you derive over the

businesses over time and you would

keep the costs down for the

consumer.

So you would be adding to

the national debt and you would have

to pay interest on that debt which

you would do out of the revenue you

get from the companies, but you also

say it will cost less from the

consumers that bills would come

down.

If you have £30.5 billion of

dividends paid out, if you run

things on a not-for-profit basis, it

can ensure that customers can get

the best possible returns.

That

profit might be good for customers

but it does not sound good for

paying back the interest on the

loans that you took out for buying

the organisations in the first

place?

You heard John McDonnell

express the analogy of having a

mortgage over a property. You have

acquired the assets, you have the

income derived from renting it out,

it pays the gas it and you have

still got it. It makes consulate

sent to hold those acids and make

them work for the benefit of the

citizens.

If interest rates rise,

after you bought that house and you

are renting it out, it is important

that costs can derive from the

rental income. We know that rates

can rise. There is every possibility

that the interest you will be paying

will not cover the profits and cost?

It is no different to the position

now. If water companies and energy

companies are financed, they have

those structures in

those structures in place, the rate

of interest that they pay on their

financing is passed through to the

consumer ultimately.

I tell you how

it is different now, and your system

it would be passed to the taxpayer

presumably. If any of these

industries started making a loss,

who picks up the tab for that?

Have

they made a loss since they were

privatised? They have not, they have

made very great profits.

The reason

they are giving up the east Coast

franchise is because they have lost

£200 million.

That shows how the

franchising system is completely and

utterly flawed and should be

abandoned.

If the government run

East Coast Mainline lost £2 billion,

who would be on the hook, the

taxpayer?

When the government last

ran East Coast Mainline they ran it

at a profit, it brought money into

the Treasury. We have a good history

of running the railways correctly

and not having this bailout to

Richard Branson and Brian Souter and

the rest of them or seeing the

dividends and profits overseas to

the state-owned companies of

continental Europe. We want to put

an end to that and make sure we run

our railways for the benefits of the

public.

Let's look at one company,

Bristol energy which looks like the

kind of company you are advocating.

It is set up locally and has ethical

behaviour. There are no shareholders

so nobody is taking a profit out of

it. It has lost 2 million over two

years and does not expect to be

profitable until 2021. But does not

sound like a great deal for the

taxpayer if that is how you're going

to run the National Grid.

If they

are recouping the losses and they

have the trajectory of growth and

greater incomes, they will look at

that and say to successful.

The

Labour government...

They got tax

breaks, public capital to set them

up in the first instance, they were

heavily subsidised so they could go

on and enjoy the benefits of private

enterprise that does not benefit the

consumer or the taxpayer or the

citizens, however you wish to

describe it.

The consumer and the

taxpayer may be the same person but

they have a different financial

relationship with these companies.

What comes first, using any profit

or revenue you have used to acquire

these assets or cutting bills?

You

do both. If you have got that income

you can use it for those purposes.

Do cut energy bills or do you repay

the debt?

Those who have benefited

from privatisation of had the

benefit of not only using that money

to pay the debt they incurred to buy

the assets, they are now using it to

make dividend payments out to their

shareholders. It clearly can be done

and we want to be in that position

so it works for the benefit of

people and not for corporate

entities.

The shareholders are not

all millionaire individuals. A lot

of this is owned by pension funds to

which many workers pensions are

held, can you guarantee that you

will reinforce the Leave reimburse

them at full market value so that

nobody's pension will lose out?

The

market value is the market value at

the time these assets are required.

John McDonnell has made it clear

that they will be acquired at that

rate.

But not for cash, in exchange

for government bonds?

They are still

in that strong position of having

the value fully reflected. What is

happening is that not everybody is a

shareholder. It means there is

greater equity for all of the

population, not only an narrow

segment of it, surely that has got

to be for the benefit of everybody.

Thank you for talking to us.

It's coming up to 11.40,

you're watching the Sunday Politics.

Still to come:

We'll look at the implications

to the charity sector of the latest

allegations of sexual abuse

involving Oxfam staff

Good morning and welcome

to Sunday Politics Scotland.

Coming up on the programme:

Lord Adonis has accused

the Scottish Government

of going AWOL over Stagecoach's

running of the East Coast Mainline.

We'll speak to the Transport

Secretary Humza Yousaf.

Has the resignation

of Chief Constable

Phil Gormley ended the questions

about the management of

Police Scotland?

The former justice

Secretary Kenny MacAskill

and former SPA board member

Moi Ali will be giving

us their views.

Concerns about the future of the

railways are back in the headlines

this week after it was announced

that Stagecoach's contract to run

the East Coast Mainline will end

earlier than expected after the UK

Government said it got its sums

wrong.

wrong. How realistic is that, given

the large sums of money needed to

make it happen?

Our reporter Andrew Black looks

at what's gone wrong.

The great days of the railway.

People say they are over. This was

once the future.

Not by a long way.

30 years ago, a vision was unveiled

for a fast, reliable railway service

run by the state.

British rail, we

are getting there.

Division did not

last and a decade later, private

companies began running trains. If

you look behind me, you can see the

start of East Coast Mainline where

trains begin their journey, you're

in Edinburgh down to London.

Services here have been run for many

years under a Private franchise

agreement. But given recent events,

might we be seeing a return to the

past? Virgin and Scots company

Stagecoach run services on the East

Coast Mainline, but maybe not for

much longer. This week, they said

they could no longer deliver the

contract. Now the UK Government

might have to take it over. That has

once again raise the question, would

our railways be better off in public

hands?

I think you have to look back

to the days of British rail with

reality. Many plans they had for a

new trains, new lines, improved

services were always held back by

Government not funding them. They

lived hand to mouth year-to-year. If

we were to go back to that, would

they be priority again? Wouldn't

education and health be much higher

priority in Government spending?

The

benefit of the franchise system...

There are benefits and minuses for

bold, but the minute it has been a

guaranteed franchise free period of

time where we will deliver new

services and improvements.

services and improvements. If the

railway could enjoy the level of

Government funding that it has since

privatisation, perhaps it would

work. But would it? I doubt it.

We've been here before. In 2009,

National Express was running trains

on the East Coast Mainline, but its

contract hit the buffers and the UK

Government had to dig over. What

went wrong with the current east

coast contract? The UK Government

said that was clear.

The problem is

straightforward. Stagecoach December

is wrong, it over a bed and is now

paying the price.

Stagecoach admits

it got its numbers wrong. In a

statement, its chief executive

Martin Griffiths said a lot of what

happened was out of control and we

have suffered from a ongoing

unreliability on the track and

signalling that our dreams use. This

former Labour Transport Secretary

says there must be a stiff penalty.

Stagecoach and Virgin should both be

banned from operating rail

contracts, because they have walked

away from commitments they have made

to taxpayers across United Kingdom.

When national express reneged on

their contract from the East Coast

Mainline in 2009, I banned them as a

good array of state for transport

and they are no longer in the rail

business. -- as Secretary of State

for cars bought look like some say

the private model can work if it

improves.

We should consider whether

the franchisees should take the risk

and then decide how much subsidy it

needs or how much it can be to the

Treasury or the sector keep the

revenue, take the revenue risk and

simply pays the operator to operate

the trains. I think in that case

also do reduce the risk to the

bidding operators, you will have

more have more beds, lower costs.

The Scottish Government is

considering a takeover of the

troubled Scot rail franchise, but

the question is how much would it

cost and can it be paid for?

The Transport Secretary,

Humza Yousaf,

is in our Dundee studio.

We will talk about the promise of

trains any moment, but something

else that bubbled up this morning, a

fierce surrounding Hugh Gaffney. He

wrote a letter to Richard Leonard,

have you got it reply?

I have not

received a reply from him or when I

have been tweeting directly to the

ghastly response from him either and

are the number of questions I

clearly need to be answered. --

directly to Hugh Gaffney. Many of

his former colleagues have contacted

me privately to say that he would

have done, and if that is the case,

does that not further the week

action that Richard Leonard has

taken in reaction to the racial

slurs that Hugh Gaffney has made? I

am frustrated from a personal point

of view, but it is not about me

versus them, there are many people

have contacted me whether ethnic

minority or not to have been utterly

dismayed. Labour members themselves

coming up to me any chamber of

parliament to say they are utterly

appalled at their party's stance on

this. The Labour Party are

traditionally a parties has taken a

very strong stand against racism and

are showing themselves to be weak in

the face of racial slurs. One week

after one of their own colleagues,

Anas Sarwar, came forward to tackle

racism in his own party and a brave

man indeed.

Do you think you should

be suspended?

At the very least.

What do you think should happen?

I

think he should seriously consider

his position. If an MP used any

other racial slogan I don't think we

would say that person would be fit

to hold office. I think he should be

considering his position. I don't

doubt that I am the only one who

thinks that, but this kind of week

action from Richard Leonard is

unacceptable. It's frustrating for

people outside of politics who have

approached me to say they are

utterly dismayed at the lack of

action from him on this.

Richard

Leonard couldn't remove him as an

MP, though, it would have to be Mr

Gaffney.

Either you're the reader

and you did a commanding role over

your MPs, you MSPs, this is another

problem, the inconsistency of

Richard Leonard. The councillor who

made the remarks to Anas Sarwar is

being investigated, E denies those

remarks, and rightly he has been

suspended. Hugh Gaffney admits

making a racial slur, absolutely

comparable to the remark made to

Anas Sarwar and all he gets is

barely a tackle on the rest. That

week action from Richard Leonard is

a slap in the face to every single

ethnic minority in the country.

Lord

Adonis has suggested that the SNP

Government demands the East Coast

Mainline is nationalised and the

share of the profits given to the

Scottish Government. Will you make

such a demand?

I spoke to Chris

Grayling earlier this week. Every

option should be on the table, that

includes the Government running it

as a last resort, and I have always

said that the Scottish women should

have control over east and west

Coast franchises. In fairness to the

Secretary of State, he said the

internal review and what went wrong

is currently taking place, but he

has not ruled out the option of the

Government taking over.

To be clear,

are you in these talks with Mr

Grayling arguing for taking these

routes into public ownership and for

Scotland to have some of the

revenue?

My first and foremost

piracy is to ensure there is no

disruption to service and the

passengers enjoy... That has got to

be the number one priority. In terms

of what Lord Adonis said, much of

what he said makes sense. The

taxpayer was chewed £2 billion

more...

I still don't understand, is

your favourite outcome what Lord

Adonis is suggesting? Take East

Coast Mainline out of public

ownership?

It is out to them to

decide...

It is for you to make a

decision about what you want.

If

they can be a similar outcome from

another method, that should not be

discounted either. I have been

promised that once the review takes

place, we will be told as opposed to

having to be told by the media, has

unfortunately I did when we found

out the powerless outcome of this.

Lord Adonis also suggests that

Stagecoach and Virgin, given what

has happened on East Coast Mainline

should be banned from bidding on

future rail context, would you agree

with that?

This is a UK Government

contract and it is up to them to

decide who gets banned. If you're

asking about Scottish Government

contracts, there are things to

consider, one, is it legally

possible? I have not heard whether

it is legally possible within the

procurement legislation.

Would you

be happy if Stagecoach made a bid in

the future to run ScotRail?

We would

have to take it on a case-by-case

basis on its merits. I would like to

make the point that I have no

loyalty to Stagecoach nor any

sympathy to them. They should be

punished. The First Minister was

very clear that they have serious

questions to answer, but clearly we

have procurement wasn't legislation

to follow and we will follow that.

This doesn't put Stagecoach in a

very good light whatsoever.

You have

said in the past that ScotRail...

You said you wanted to prepare a

public sector bid for Scot rail,

have you actually done anything

about this?

Yes, we have had a

number of cross-party conversations

that have gone very well. The latest

and last of those was widely

important, showing revealed looking

at five potential options, including

creating a new public sector bodies

or having one of our existing public

sector bodies or another public

sector body taking that bid forward.

We are committed to doing that and

we introduce the legislation. The

First Minister has already said we

want get that moving and up and

running as soon as possible. As I

have said previously, I have no

intention whatsoever of not seeing

this contract to the end of its

contract period which would be 2025.

Better still the aim and know that

ScotRail over the course of 2017

their performance improved and I

want to see them continue.

What

you're proposing, to be clear, is no

different to what John McDonald has

been

been proposing. You're not proposing

that, you just put a bid in, that

would presumably just compete with

other like Stagecoach and be judged

on its merit, secure and not

proposing the same thing as Labour?

I am not proposing the same as

Labour. I found your package quite

interesting. Taking the politicians

out of it, the experts both said

that nationalising was a very

simplistic solution to a very

complex challenge and what we are

suggesting the UK Government should

do particularly in the face of the

East Coast Mainline is bring forward

legislation as the Scottish

Government has done which allows

competition with private sector

entities.

If having the public

sector running the railways is

simplistic, to use your own word,

what is the point in having a public

sector bid for it?

We nationalising

every single contact is a very

simplistic view of the world. I

heard what John McDonald had to say

and it seemed to suggest that we

nationalising a whole lot of public

services wasn't going to cost the

taxpayer a penny and I find that

simplistic. We know that they made

it £3.5 billion loss, Abellio. That

would have to come from the health

budget of the education budget. I am

saying, there is not a simple

solution with what is a very complex

structure with the railways and 50%

of it is already nationalised with

Network Rail. Nott thank you for

joining

He denied any wrongdoing

over alleged bullying,

but decided a return to duty

would have been impossible.

With Phil Gormley gone,

the focus is not only on who'll

replace him as Chief Constable

of Police Scotland, but whether that

person will be capable

of healing the wounds.

It's been a troubled time for both

the force and the body

charged with overseeing it -

the Scottish Police Authority.

It was the SPA which recommended Mr

Gormley should be allowed to return

to work in November.

This was later reversed after

Justice Secretary Michael Matheson

questioned the decision process.

I'm joined now by the former SNP

Justice Secretary Kenny MacAskill

who was responsible for bringing

in the single force plan.

Kenny MacAskill, this is hardly

satisfactory from a public point of

view. We have got the resignation of

a Chief Constable, we don't know why

he has resigned, we don't know

whether the allegations have any

merit, we don't know who made those

allegations and it looks like we

will never know.

It's highly

embarrassing for the senior echelons

of Police Scotland and it is

debilitating for those in it. But it

has to be put into the context.

Police Scotland see on with the day

job with a 43 year low in recorded

crime and despite the pressures they

face, police Scotland doing a good

job. But these events are unseemly

to say the least. The sooner they

can put them behind them and get on

with just doing the job, the better.

You say put it behind them. That is

what Susan Deacon, the new head of

the SPA said, but surely if Police

Scotland the bodies which regulate

them are going to restore trust are

to -- we have to know what has been

going on? I'm not questioning that

people trust police officers, it's

the leadership of the Scottish

policing authority and of Police

Scotland. Surely the public has a

right to know why the second Chief

Constable in five years has gone?

I

think there are clear is easier.

That is something that Susan Deacon

will need to decide and Pirc will

decide what they release. But he is

gone and she is quite correctly just

getting on with making sure that the

organisation performs as well as it

can

can and the organisation overseeing

it does a good job. There are issues

which should be exposed for the

purpose of clarity. A parliamentary

committee can undoubtedly drill into

this but what police got the needs

is stability at the top and they

have got now with is a deacon in at

the SPA...

You say stability, but to

people watching, this looks like"

lemon", the people -- them, the

people who run this saying, run

along, this is none of your

business, we will sort this out. In

a policing system in the 21st

century, you can't do that.

You

can't stop a police constable --

Chief Constable resigning and I

figure was a good idea and it is now

done. But it is full Susan Deacon to

decide whether to rake over Cole's

or make the organisation as good as

it can be. I think there has to be

some investigation and clarity and

some issues to look at, but as soon

as Mr Gormley decided that he was

the issue, which she was, and he has

gone, he ceases to be our

contractors employee and there is

little that can be done. -- our

contracted employee.

You say that

you are pleased that he has gone and

he should have gone earlier, why?

There were many complaints. I also

personally think that Mr Gormley

brought in a style that was wrong

and even if no wrongdoing was not

found, and I know that he is a

policeman great service elsewhere,

his management style did not fit.

Why?

It was dictatorial, humiliating

staff in the presence of others. You

would not accept that in any walk of

life, whether in the BBC or in the

police force.

He was humiliating

staff in the presence of others? Are

you saying the complainants were

correct?

I think at the end of the

day, the complaints are not here or

there, many would have been held

lacking in substance or not reaching

the threshold for disciplinary

action. But it was a failure of

style rather than...

Hang on a

minute. This just gets more opaque

by the moment. You say that many of

the complaints would have not met

the threshold but the guy has

resigned. And you say you don't like

his style. Sorry, he was appointed

as the Chief Constable. Huw Jones

black people or force them out of an

organisation because you do not --

you don't sack people or force them

out of the organisation because you

do not like their style.

He

resigned. He was failing to

deliver,...

What was he failure to

deliver?

I am not the one you should

ask, I am not be Justice Secretary

since 2014.

But you said it.

I

watched the same press as you. I

think there is doubt that the

complaints would have reached the

standards that would have made it

necessary to take disciplinary

action...

One what about failing to

deliver?

Let me finish, that doesn't

mean there wasn't any problem was

how he was running Police Scotland.

Some of that management level, he

fails to deliver. -- so, at that

management level. Whether he would

have formally breached any charges,

that is a separate matter. I think

he failed because he became the

issue. Police Scotland was an

unhappy ship at leadership level

despite the fact that it continued

to function on the ground and I

think that was up to others, not to

him.

If some of these complaints did

not meet the threshold, I don't

understand why it takes so long. If

there are allegations of bullying,

why did it take for months and

months of Phil Gormley being on

gardening leave to get to the bottom

of it?

You would need to speak to

the SPA or Pirc. It has moved

shamefully slowly. Not just for the

benefit of the organisation, but for

the likes of Mr Gormley himself.

How

can we have any confidence that

whoever is appointed as the next

Chief Constable, he or she will not

meet the same fate as Phil Gormley?

I can't give you any guarantee about

that but we do know that police

Scotland is continuing to deliver.

They have had remarkable successes

at tackling serious crime, violent

crime, keeping Scotland say.

Kenny

MacAskill, thank you very much. --

keeping Scotland safe.

Well, to get an insight

into the role the Scottish Police

Authority has played in events,

I spoke to former board member

Moi Ali and asked if she was unhappy

that it might never be

known if there was any merit

in the allegations made

against Phil Gormley.

I think that is exactly right. I

don't think it is in anybody's

interest to have innocence or guilt

and not properly investigated. The

regulations say there is no

alternative but those regulations

need to be looked at to bring them

into line with the regulations in

England which provide safeguards

both for those complaining and for

those complained about.

In England,

the investigation could continue

despite a resignation?

Yes, as I

understand it, resignation or

retirement can be prevented by the

regulations until an investigation

has run its course and that is what

has been happening for the last few

years.

Your argument is that it is

not fair to the complainant or two

Phil Gormley either because we won't

know whether the complainants had

any merit in their cases or whether

he was innocent or guilty?

That is

exactly right. It is in everybody's

interest. Phil Gormley has left with

a cloud over him. Nobody knows

whether that is justified or not

because there has not been a

completed investigation. It is in

the interest of justice to complete

that investigation and either clear

his name or finding guilty of

misconduct, one or the other.

There

is also an issue of public

confidence. The public do not know

why the second Chief Constable in

five years has resigned. They don't

know whether there is any merit to

the case against him and they will

never know. You can understand why

many people will think they don't

know whether they can trust the

leadership of police Scotland or the

bodies which regulate it.

That is

the issue. It undermines public

confidence because there is a clear

process in place but that process

falls away with a resignation. That

is the shortcoming in the Scottish

system.

Is there a systemic problem

with police Scotland and its

regulators? You famously resigned

from the police -- Scottish Police

Authority because you thought it was

enmeshed in secrecy and not

transparent enough. But there has

been a list of ACs. There are other

officers who have been suspended. --

a list of issues. It looks like

there is something going deeply

wrong with that organisation.

I

think it is a problem, not a

structural problem, about how things

are structured and how the

regulation takes place, it is a

problem about individuals. The

structures are right if people did

their job properly. The problem is

that people have become, the SPA

board became too close to government

and was not independent enough. And

that led to a number of issues. It

also led to a loss of confidence by

parliamentarians and by the public

in the way that policing was being

policed.

You could argue what is a

personal problem, what is a

structural problem, but from what

you are saying, the fact that an

organisation whose job it is to

regulate the police, all the

individuals in it have become too

close to government, sounds like a

structural problem to me.

You could

argue that it is a structural

problem. Structures can facilitate

or stand in the way of things but if

you have the right people, they can

make the right things work. That has

been the issue. Partly a closeness

to government and partly about the

way in which the board was

appointed. There was an emphasis on

bringing in people who had a

business background for example, as

with the case with the last two

chairs and if you have a more values

are based appointment process, you

will get people who are doing the

job for the right reasons.

What do

you mean, values -based?

Looking at

people's values, as opposed to their

professional background. If you want

people with business skills or

finance skills, it is easy to find

people who fit the bill. But if you

decide to take the route of looking

for somebody who has a commitment to

policing, a commitment to serving

communities, to openness and

transparency, you might well appoint

different people. I think that

asking for evidence of a background

in standing up, standing out, making

a stand, it is all important because

if you have people who were willing

to take a stand and do the job in

the right way, then you would have a

functioning board. The shortcoming

has been that the board has been a

little bit too eager to please

government and a little unwilling to

make a stand over important things

and to assert its independence. I

think that has been one of the major

shortcomings that has led us to

where we are now.

What changes would

you lie to see? We have talked about

changing the system so that either

people could not resign before

investigations were finished or

investigations could continue after

they have resigned, and you would

like to see people with more

individualism on the board. But in

the eyes of the public, not the

police force, they do their job very

well, but the leadership of the

police board, the SPA and all the

other anagrams surrounding it, it is

just a mess.

Identikit is a mess. I

don't think the structure is wrong

and there are some very good people

both in the SPA and in police

leadership. So I think the issue is

that it has got into a mess and it

needs to get itself out of that mess

and get back to doing what it does.

It's time to look back

on what's happened this week

and what's coming up.

Joining me now is

journalist Pennie Taylor

and Holyrood magazine

journalist Jenni Davidson.

Kenny MacAskill and the police was a

bit extraordinary, but why?

For me,

the reluctance to look back, to

learn lessons from what has happened

here I find utterly extraordinary.

The new chair of the FPA and Kenny

MacAskill are all very keen to say

don't let rake over old calls.

don't let rake over old calls. You

can

we didn't think there was much

merit in the style of Phil Gormley

and he should have resigned earlier.

Trust as far as I am concerned has

to be based on transparency and

having the information to reach that

position.

We should make the point

that trust in the organisations that

run the police, the top of Police

Scotland, nobody is saying there is

any problem with bobbies on the

beat, that is not the issue here, it

is not about police officers doing

their every day duty, it is about

does the public have the right to

know what an earth has been going on

there?

Those bobbies on the beat

will also be wondering what's going

on at the top of their organisation.

I think the fact that somebody can

actually resign and the whole

investigation into allegations of

gross misconduct is shelved after

that resignation is wrong. That's

something that needs to be changed.

It has been changed in England and

Wales, the change that at the

beginning of 2015.

Is it that people

are not allowed to resign until the

investigations are complete?

You're

not allowed to resign if

investigations are being conducted

into you. There are special

circumstances but ill-health, but

generally you have to wait until the

end of the enquiry. I think we

should have that here.

Moi Ali made

the point that it is fairness to

both sides. Both the people who

complained about Phil Gormley and

him himself.

We need some accurate

understanding here of what has

happened. Surely in order to learn

for the future and for this not to

happen again.

If this was a one-off

incident, but has been nothing but

controversy with that organisations

and was created.

I heard Molly Ali

Savary clearly there that she didn't

think the structure was wrong, if

the individuals. -- Moi Ali say very

clearly. It's a point about trusting

the police right through the

organisation. Sometimes the

leadership of the organisation also

dictates what happens further down

and I think that matters to everyone

in Scotland.

Railways? Clear blue

water is going to say, but it is

clear black and yellow water between

them and labour. I've never heard it

expressed like that that the SNP are

not in favour of nationalising the

railways and Labour are clearly are.

It's clear that what they favour is

having some sort of publicly owned

body that would bet, but bid against

private sector bodies in the same

kind of bidding process we have now.

Mother than we nationalising

completely and bring it back into

state ownership. -- rather than. The

SNP seem to be quite in favour of

Caledonian MacBrayne who run the

ferries on the West Coast bidding

for the railways in future. That

seems to be the direction they are

pushing for.

The other side of this

is that ScotRail have got a

passenger approval rating of

something like 85% of that lots of

companies would be very envious. The

other question is, what exactly is

the problem that either it

nationalisation or public sector

bids is supposed to be solving?

I

think ultimately people who use

trains want to know that trains are

going to stop at the stops they are

meant to stop at that and not

overshoot, so it's about

performance, getting to your work on

time. I remember a 30 years ago, I

think it to request time to travel

from Glasgow to Edinburgh then that

it does now. Those of the things

that matter to me. I am perhaps less

interested in who owns them,

although I would want to know that

the money that is spent on them

means that we have an efficient

train service and for me that is

fundamental.

Yes, the ownership

thing is clearly the big political

points Labour want to make, but

that's not some thought into the

SNP, they are more whatever runs the

railways best.

They wanted to be run

well, but the ownership does come

into it, because part of the problem

is that Network Rail are state owned

and then we have operators who are

private and they don't actually own

the train stock. Often the yard

leasing the train stock the using.

-- often they are. Some of the

lateness issues will be due to track

problems or signal failure and

others will be train related. In

terms of faults when there are

problems, having multiple companies

involved can be part of the issue.

Sorry, we are running out of time

and I want to talk about Europe,

because there were suggestions in

the papers this morning this whole

argument about this clause 11, the

clause in the Brexit bill which

seems to contradict the devolution

act by saying things have to be

devolved after their return to UK...

But that will be sorted out this

week?

Yes, I suspect that is a bit

positive or optimistic, rather. We

still have a lot of issues. So far

in the Brexit things we are seeing

there is no problem and then it

turns out actually is a problem. I

will believe it when I see it I

think would be my view on that.

Good

luck with asserting that went out

this week is what I would say in

response to that question.

This

clause 11 is only one sentence, all

somebody needs to do is rewrite it.

And say is that OK? That's fine.

We

have seen how easy that is in

connection with any aspect of Brexit

over the last couple of years.

We

should confidently expect this to

rumble on?

I would have thought.

At

Israeli fundamental to Scotland and

the UK's ship afterwards. -- it is

fairly fundamental.

That's all from the us this week.

Parliament is in recess this week,

so I'll be back at the same

time in two weeks' time.

Until then, goodbye.