Sarah Smith and Gordon Brewer's guests are Seema Malhotra MP, Daniel Hannan MEP and shadow secretary of state for transport Andy McDonald MP.
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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
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
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
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.
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.
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
No. It is possible
this is a cunning baldric style plan
to make Britain look as confused as
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
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
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. 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
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.
sounds ridiculous but it also sounds
like the sort of thing he will do.
We will come back to this later in
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
Well, Seema and Dan are with me now.
And just to explain the rules.
Seema Malhotra has five minutes to
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?
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
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
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
We export more to
Ireland than China, that is our
problem! Which is the better
long-term growth prospects?
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
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?
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?
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.
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
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?
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
Do you agree with
I think that a lot
has been done to support
Forgive me, that's a
different question... We're not
talking about that, do you agree
that the customs union is
protectionist against developing
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.
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
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...
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
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
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
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
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?
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.
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
That would mean leaving the
customs union, right?
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.
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
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
Thank you both very much
for coming in and asking the
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,
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
Preston described in the press
as a pilgrimage for London folk.
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.
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
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
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
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
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
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?
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
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
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.
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
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
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
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?
they made a loss since they were
privatised? They have not, they have
made very great profits.
they are giving up the east Coast
franchise is because they have lost
That shows how the
franchising system is completely and
utterly flawed and should be
If the government run
East Coast Mainline lost £2 billion,
who would be on the hook, the
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
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.
are recouping the losses and they
have the trajectory of growth and
greater incomes, they will look at
that and say to successful.
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
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?
do both. If you have got that income
you can use it for those purposes.
Do cut energy bills or do you repay
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
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?
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
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
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. 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
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?
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.
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
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,
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
Do you think you should
At the very least.
What do you think should happen?
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.
Leonard couldn't remove him as an
MP, though, it would have to be Mr
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.
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
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
I still don't understand, is
your favourite outcome what Lord
Adonis is suggesting? Take East
Coast Mainline out of public
It is out to them to
It is for you to make a
decision about what you want.
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
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
be happy if Stagecoach made a bid in
the future to run ScotRail?
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.
said in the past that ScotRail...
You said you wanted to prepare a
public sector bid for Scot rail,
have you actually done anything
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.
you're proposing, to be clear, is no
different to what John McDonald has
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
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?
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
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.
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?
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 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
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.
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
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.
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
He was humiliating
staff in the presence of others? Are
you saying the complainants were
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.
resigned. He was failing to
What was he failure to
I am not the one you should
ask, I am not be Justice Secretary
But you said it.
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
One what about failing to
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
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
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.
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.
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.
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
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?
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.
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.
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
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.
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
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.
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.
you mean, values -based?
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?
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
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
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
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?
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
We need some accurate
understanding here of what has
happened. Surely in order to learn
for the future and for this not to
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
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
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?
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
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
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
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.
luck with asserting that went out
this week is what I would say in
response to that question.
clause 11 is only one sentence, all
somebody needs to do is rewrite it.
And say is that OK? That's fine.
have seen how easy that is in
connection with any aspect of Brexit
over the last couple of years.
should confidently expect this to
I would have thought.
Israeli fundamental to Scotland and
the UK's ship afterwards. -- it is
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.
Sarah Smith and Gordon Brewer with the latest political news, interviews and debate. Sarah examines Labour's renationalisation plans with shadow transport secretary Andy McDonald, and discusses Brexit with Conservative MEP Daniel Hannan and Labour's Seema Malhotra. The political panel features Tom Newton-Dunn of the Sun, Zoe Williams of the Guardian and commentator Iain Martin.