:00:36. > :00:40.Morning, folks. Welcome to the Sunday Politics.
:00:41. > :00:43.Labour's been hit hard by scandals at the Co-op. Ed Miliband says the
:00:44. > :00:46.Tories are mudslinging. We'll speak to Conservative Chairman Grant
:00:47. > :00:49.Shapps. Five years on from the financial
:00:50. > :00:52.crisis, and we're still talking about banks in trouble. Why haven't
:00:53. > :00:57.the regulators got the message? We'll ask the man who runs the
:00:58. > :01:01.City's new financial watchdog. And he used to have a windmill on
:01:02. > :01:05.his roof and talked about giving hugs to hoodies and huskies. These
:01:06. > :01:16.Should the Welsh Government extend make
:01:17. > :01:17.Should the Welsh Government extend the charge on carrier bags?
:01:18. > :01:19.warned that benefit falls will be to homelessness and population ships.
:01:20. > :01:29.What is the evidence? And as always, the political panel
:01:30. > :01:33.that reaches the parts other shows can only dream of. Janan Ganesh,
:01:34. > :01:36.Helen Lewis and Nick Watt. They'll be tweeting faster than England
:01:37. > :01:40.loses wickets to Australia. Yes, they're really that fast.
:01:41. > :01:43.First, some big news overnight from Geneva, where Iran has agreed to
:01:44. > :01:48.curb some of its nuclear activities in return for the partial easing of
:01:49. > :01:51.sanctions. Iran will pause the enrichment of uranium to weapons
:01:52. > :02:01.grade and America will free up some funds for Iran to spend. May be up
:02:02. > :02:04.to $10 billion. A more comprehensive deal is supposed to be done in six
:02:05. > :02:10.months. Here's what President Obama had to say about this interim
:02:11. > :02:17.agreement. We have pursued intensive diplomacy, bilaterally with the
:02:18. > :02:22.Iranians, and together with our partners, the United Kingdom,
:02:23. > :02:27.France, Germany, Russia and China, as well as the European Union.
:02:28. > :02:31.Today, that diplomacy opened up a new path towards a world that is
:02:32. > :02:36.more secure, a future in which we can verify that Iraq and's nuclear
:02:37. > :02:44.programme is peaceful, and that it cannot build a nuclear weapon.
:02:45. > :02:49.President Obama spoke from the White House last night. Now the difficulty
:02:50. > :02:53.begins. This is meant to lead to a full-scale agreement which will
:02:54. > :03:00.effectively end all sanctions, and end Iran's ability to have a bomb.
:03:01. > :03:04.The early signs are pretty good. The Iranian currency strengthened
:03:05. > :03:10.overnight, which is exactly what the Iranians wanted. Inflation in Iraq
:03:11. > :03:16.is 40%, so they need a stronger currency. -- information in Iran.
:03:17. > :03:19.France has played a blinder. It was there intransigence that led to
:03:20. > :03:24.this. Otherwise, I think the West would have led to a much softer
:03:25. > :03:30.deal. The question now becomes implementation. Here, everything
:03:31. > :03:34.hinges on two questions. First, who is Hassan Rouhani? Is he the
:03:35. > :03:40.Iranians Gorbachev, a serious reformer, or he's here much more
:03:41. > :03:46.tactical and cynical figure? Or, within Iran, how powerful is he?
:03:47. > :03:53.There are military men and intelligence officials within Iran
:03:54. > :03:56.who may stymie the process. The Western media concentrate on the
:03:57. > :04:00.fact that Mr Netanyahu and the Israelis are not happy about this.
:04:01. > :04:05.They don't often mention that the Arab Gulf states are also very
:04:06. > :04:13.apprehensive about this deal. I read this morning that the enemies of
:04:14. > :04:21.Qatar and Kuwait went to Saudi king. -- the MAs row. That is the key
:04:22. > :04:27.thing to watch in the next couple of weeks. There was a response from
:04:28. > :04:31.Saudi Arabia, but it came from the Prime Minister of Israel, who said
:04:32. > :04:35.this was a historic mistake. The United States said there would be no
:04:36. > :04:40.enrichment of uranium to weapons grade. In the last few minutes, the
:04:41. > :04:48.Iranian Foreign Minister has tweeted to say that there is an inalienable
:04:49. > :04:53.right -- right to enrich. The key thing is the most important thing
:04:54. > :04:59.that President Obama said in his inaugural speech. He reached out to
:05:00. > :05:05.Iran. It failed under President McKenna jab. Under President
:05:06. > :05:10.Rouhani, there seems to be progress. There is potentially now what he
:05:11. > :05:15.talked about in that first inaugural address potentially coming through.
:05:16. > :05:20.In the end, the key issue - and we don't know the answer - is the
:05:21. > :05:24.supreme leader, not the president. Will the supreme leader agreed to
:05:25. > :05:32.Iran giving up its ability to create nuclear weapons? This is the huge
:05:33. > :05:36.ambiguity. Ayatollah Khamenei authorise the position that
:05:37. > :05:40.President Rouhani took to Geneva. That doesn't mean he will sign off
:05:41. > :05:45.on every bit of implementation over the next six months. Even when
:05:46. > :05:51.President Ahmadinejad was president, he wasn't really President. We in
:05:52. > :05:56.the West have to resort to a kind of Iranians version of the study of the
:05:57. > :06:08.Kremlin, to work out what is going on. And the problem the president
:06:09. > :06:14.faces is that if there is any sign... He can unlock these funds by
:06:15. > :06:18.executive order at the moment, but if he needs any more, he has to go
:06:19. > :06:26.to Congress. Both the Democrat and the Republican side have huge
:06:27. > :06:29.scepticism about this. And he has very low credibility now. There's
:06:30. > :06:35.already been angry noises coming from quite a lot of senators. It was
:06:36. > :06:39.quite strange to see that photo of John Kerry hugging Cathy Ashton as
:06:40. > :06:49.if they had survived a ship great together. John Kerry is clearly
:06:50. > :06:52.feeling very happy. We will keep an eye on this. It is a fascinating
:06:53. > :06:55.development. More lurid details about the
:06:56. > :06:59.personal life of the Co-op Bank's disgraced former chairman, the
:07:00. > :07:02.Reverend Paul Flowers. The links between Labour, the bank and the
:07:03. > :07:05.wider Co-op movement have caused big problems for Ed Miliband this week,
:07:06. > :07:10.and the Conservatives have been revelling in it. But do the Tory
:07:11. > :07:19.allegations - Ed Miliband calls them "smears" - stack up? Party Chairman
:07:20. > :07:27.Grant Shapps joins us from Hatfield. Welcome to the programme. When it
:07:28. > :07:33.comes to the Co-op, what are you accusing Labour of knowing and when?
:07:34. > :07:39.I think the simple thing to say here is that the Co-op is an important
:07:40. > :07:43.bank. They have obviously got into difficulty with Reverend flowers,
:07:44. > :07:46.and our primary concern is making sure that that is properly
:07:47. > :07:49.investigated, and that we understand what happened at the bank and how
:07:50. > :07:55.somebody like Paul Flowers could have ended up thing appointed
:07:56. > :08:02.chairman. You wrote to edge Miliband on Tuesday and asked him what he
:08:03. > :08:04.knew and when. -- you wrote to Ed Miliband. But by Prime Minister's
:08:05. > :08:12.Questions on Wednesday, David Cameron claims that you knew that
:08:13. > :08:16.Labour knew about his past all along. What is the evidence for
:08:17. > :08:24.that? We found out by Wednesday that he had been a Labour councillor,
:08:25. > :08:28.Reverend Flowers, and had been made to stand down. Certainly, Labour
:08:29. > :08:32.knew about that, but somehow didn't seem to think that that made him
:08:33. > :08:38.less appropriate to be the chairman of the Co-op bank. There was no
:08:39. > :08:44.evidence that Mr Miliband or Mr Balls knew about that. I ask you
:08:45. > :08:55.again, what are you accusing the Labour leadership of knowing? We
:08:56. > :08:59.know now that he stood down for very inappropriate images on his
:09:00. > :09:04.computer, apparently. You are telling me that they didn't know. I
:09:05. > :09:07.am not sure that is clear at all. I have heard conflicting reports.
:09:08. > :09:12.There is a much bigger argument about what they knew and when. There
:09:13. > :09:17.was a much bigger issue here. This morning, Ed Miliband has said that
:09:18. > :09:21.they don't have to answer these questions and that these smears.
:09:22. > :09:25.This is ludicrous. These are important questions about an
:09:26. > :09:28.important bank, how it ended up getting into this position, and how
:09:29. > :09:36.a disastrous Britannia -- Italia deal happen. -- Britannia deal
:09:37. > :09:42.happened. And we need to know how the bank came off the rails. To be
:09:43. > :09:46.accused of smears for asking the questions is ridiculous. I am just
:09:47. > :09:49.trying to find out what you are accusing Labour of. You saying that
:09:50. > :10:00.the Labour leadership knew about the drug-taking? Sorry, there was some
:10:01. > :10:05.noise here. I don't know what was known and when. We do know that
:10:06. > :10:08.Labour, the party, certainly knew about these very difficult
:10:09. > :10:15.circumstances in which he resigned as a councillor. I think that the
:10:16. > :10:19.Labour Party knew about it. We knew that Bradford did, but not London.
:10:20. > :10:24.Are you saying that Ed Miliband knew about the inappropriate material on
:10:25. > :10:31.the Reverend's laptop? It is certainly the case that Labour knew
:10:32. > :10:37.about it. But did Mr Miliband know about it, and his predilection for
:10:38. > :10:43.rent boys? He will need to answer those questions. It is quite proper
:10:44. > :10:47.to ask those questions. Surely, asking a perfectly legitimate set of
:10:48. > :10:50.questions, not just about that but about how we have ended up in a
:10:51. > :10:55.situation where this bank has made loans to Labour for millions of
:10:56. > :11:03.pounds, that bank and the Unite bank, who is connected to it. And
:11:04. > :11:07.how they made a ?50,000 donation to Ed Balls' office. Ed Balls says that
:11:08. > :11:13.was nothing to do with Reverend Flowers, and yet Reverend Flowers
:11:14. > :11:17.said that he personally signed that off. Lots of questions to answer.
:11:18. > :11:24.David Cameron has already answered them on Wednesday. He said that you
:11:25. > :11:28.now know that Labour knew about his past all along. You have not been
:11:29. > :11:32.able to present evidence that involve Mr Miliband or Mr Balls in
:11:33. > :11:38.that. So until you get that, surely you should apologise? Hang on. He
:11:39. > :11:42.said that Labour knew about this, and they did, because he stood down
:11:43. > :11:47.as a councillor. If Ed Miliband didn't know about that, then why
:11:48. > :11:53.not? This was quite a serious thing that happened. The wider point is
:11:54. > :11:56.about why it is that when you ask perfectly legitimate questions about
:11:57. > :12:01.this bank, about the Britannia deal, and about the background of Mr
:12:02. > :12:10.flowers, why is the response, it is all smears? There are questions
:12:11. > :12:14.about how Labour failed to deal with the deficit and how it hasn't done
:12:15. > :12:19.anything to support the welfare changes, but there is nothing about
:12:20. > :12:29.that. Let us -- lets: To the wider picture of the Co-operative Bank.
:12:30. > :12:34.Labour wanted the Co-op to take over the Britannia Building Society, and
:12:35. > :12:39.it was a disaster. Do you accept that? The government of the day has
:12:40. > :12:45.to be a part of these discussions for regulatory reason. The
:12:46. > :12:53.government in 2009 - Ed Balls was very pleased... But you supported
:12:54. > :12:59.that decision. There was a later deal, potentially, for the Co-op to
:13:00. > :13:05.buy those Lloyds branches. There was a proper process and it didn't go
:13:06. > :13:09.through just recently. If there had been a proper process back in 2009,
:13:10. > :13:16.would the Britannia deal have gone through? First, you accept that the
:13:17. > :13:21.Tories were in favour of the Britannia take over. Then your
:13:22. > :13:25.Chancellor Osborne went out of his way to facilitate the purchase of
:13:26. > :13:31.the Lloyds branches, even though you had no idea that the Co-op had the
:13:32. > :13:36.management expertise to become a super medium. Correct? The
:13:37. > :13:43.difference is that that deal didn't go through. There was a proper
:13:44. > :13:49.process that took place. Let's look at the process. There was long
:13:50. > :13:55.indications as far back as January 2012 that the Co-op, as a direct
:13:56. > :13:59.result of the Britannia take over which you will party supported, was
:14:00. > :14:03.unfit to acquire the Lloyds branches. By January 2012, the
:14:04. > :14:10.Chancellor and the Treasury ignored the warnings. Wide? In 2009, there
:14:11. > :14:15.was political pressure for the Britannia to be brought together.
:14:16. > :14:19.Based on the information available, this was supported, but that process
:14:20. > :14:22.ended up with a very, very problematic takeover of the
:14:23. > :14:28.Britannia. Wind forward to this year, and when the same types of
:14:29. > :14:32.issues were being looked at for the purchase of the Lloyds deal, the
:14:33. > :14:36.proper process was followed, this time with us in government, and that
:14:37. > :14:40.purchase didn't go through. It is important that the proper process is
:14:41. > :14:50.followed, and when it was, it transpired that the deal wasn't
:14:51. > :14:52.going to be done. But it was the Treasury and the Chancellor who were
:14:53. > :14:58.the cheerleaders for the acquisition of the Lloyds branches. But there
:14:59. > :15:01.was a warning that the Co-op did not have enough capital on its balance
:15:02. > :15:08.sheet to make those acquisitions, but instead of heeding those
:15:09. > :15:12.warnings, your people went to Brussels to lobby for the
:15:13. > :15:16.requirements to be relaxed - why on earth did you do that? Our
:15:17. > :15:21.Chancellor went to argue for all of Rajesh banking, not specifically for
:15:22. > :15:25.the Co-op. He was arguing for the mutuals to be given a special
:15:26. > :15:31.ruling. The idea was to make sure that every bank in Britain could
:15:32. > :15:35.have a better deal, particularly the mutuals, as you say. That is a
:15:36. > :15:39.proper thing for the Chancellor to be doing. We could go round in
:15:40. > :15:43.circles here, but in the end, there was not a takeover of the Lloyds
:15:44. > :15:48.branches, that is because we followed a proper process. Had that
:15:49. > :15:52.same rigorous process been followed in 2009, the legitimate question to
:15:53. > :15:56.ask is whether the Co-op would have been -- would have taken over the
:15:57. > :16:00.Britannia. That is a proper question to ask. It is no good to have the
:16:01. > :16:03.leader of the opposition say, as soon as you ask any of these
:16:04. > :16:08.questions about anything where there is a problem for them, they come
:16:09. > :16:12.back with, oh, this is all smears. There are questions to ask about
:16:13. > :16:16.what the Labour government did, the debt and the deficit they left the
:16:17. > :16:20.country with, the way they stopped work from paying in this country.
:16:21. > :16:25.The big question your government has two answer is, why, by July 2012,
:16:26. > :16:31.when it was clear there was a black hole in the Co-op's balance sheet,
:16:32. > :16:35.your government re-confirmed the Co-op as the preferred bidder for
:16:36. > :16:39.Lloyds - why would you do that? Well, look, the good thing is, we
:16:40. > :16:43.can discuss this until the cows come home, but there is going to be a
:16:44. > :16:48.proper, full investigation, so we will find out what happened, all the
:16:49. > :16:52.way back. So, we will be able to get to the bottom of all of this. Grant
:16:53. > :16:56.Shapps, the only reason the Lloyds deal did not go ahead was, despite
:16:57. > :17:01.the Treasury cheerleading, when Lloyds began its due diligence, it
:17:02. > :17:06.found that there was indeed a huge black hole in the balance sheet and
:17:07. > :17:10.that the Co-op was not fit to take over its branches. That wasn't you,
:17:11. > :17:14.it wasn't the Government, it was not the Chancellor, it was Lloyds. You
:17:15. > :17:21.were still cheerleading for the deal to go ahead... Well, as I say, a
:17:22. > :17:25.proper process was followed, which did not result in the purchase of
:17:26. > :17:29.the Lloyds branches. At that proper process been followed with the
:17:30. > :17:34.purchase of the Britannia, under the previous government... Which you
:17:35. > :17:39.supported. Yes, but it may well be that under that previous deal, there
:17:40. > :17:42.was a excess political pressure perhaps put on in order to create
:17:43. > :17:50.that merger, which proved so disastrous. The Tories facilitated
:17:51. > :17:56.it, Grant Shapps, they allowed it to go ahead. I have said, we are going
:17:57. > :18:00.to have a proper, independent review. What I cannot understand is,
:18:01. > :18:06.when you announce a robber, independent review, the response you
:18:07. > :18:11.get to these serious questions. The response is, oh, this is a smear. It
:18:12. > :18:16.is crazy. We are trying to answer the big questions for this country.
:18:17. > :18:25.We have done all of that, and we are out of time. The Reverend Flowers'
:18:26. > :18:29.chairmanship of the Co-op bank was approved by the regulator at the
:18:30. > :18:33.time, which no longer exists. It was swept away by the coalition
:18:34. > :18:36.government in a supposed revolution in regulation. But will its
:18:37. > :18:47.replacement, the Financial Conduct Authority, be different? Adam has
:18:48. > :18:50.been to find out. Come with me for a spin around the Square mile to find
:18:51. > :18:54.out how we regulate our financial sector, which is almost five times
:18:55. > :19:00.bigger than the country's entire annual income. First, let's pick up
:19:01. > :19:04.our guide, journalist Iain Martin, who has just written a book about
:19:05. > :19:10.what went so wrong during the financial crisis. The FSA was an
:19:11. > :19:14.agency which was established to supervise the banks on a day-to-day
:19:15. > :19:18.basis. The Bank of England was supposed to have overall responsible
:19:19. > :19:21.at for this to Bolivia the financial system and the Treasury was supposed
:19:22. > :19:26.to take an interest in all of these things. The disaster was that it was
:19:27. > :19:31.not anyone's call responsibility, or main day job, to stay alert as to
:19:32. > :19:36.whether or not the banking system as a whole was being run in a safe
:19:37. > :19:40.manner. And so this April, a new system was set up to police the
:19:41. > :19:48.City. Most of the responsibly delays here, with the Bank of England, and
:19:49. > :19:53.its new Prudential Regulation Authority. And the Financial
:19:54. > :19:58.Services Authority has been replaced with the new Financial Conduct
:19:59. > :20:03.Authority. Can we go to the financial conduct authority, please?
:20:04. > :20:07.Canary Wharf, thank you. Here, it is all about whether the people in
:20:08. > :20:11.financial services are playing by the rules, in particular, how they
:20:12. > :20:16.treat their customers. This place has got new powers, like the ability
:20:17. > :20:20.to ban products it does not like, a new mandate to promote competition
:20:21. > :20:25.in the market, the concept being, more competition means a better
:20:26. > :20:31.market, plus the idea that a new organisation rings a whole new
:20:32. > :20:36.culture. Although these are the old offices of the FSA, so maybe not
:20:37. > :20:40.quite so new after all. It has also inherited the case of the Co-op bank
:20:41. > :20:43.and its disgraced former chairman the Reverend Paul Flowers. The SCA
:20:44. > :20:47.will be part of the investigation into what happened, which will
:20:48. > :20:52.probably involve looking at its own conduct. One member of the
:20:53. > :20:56.Parliamentary commission into banking wonders whether the new
:20:57. > :21:01.regulator, and its new boss, are up to it. I have always said, it is not
:21:02. > :21:06.the architecture which is the issue, it is the powers that the regulator
:21:07. > :21:11.has, and today, it does not seem to me as if there is any increase in
:21:12. > :21:15.that. And with the unfolding scandal at the Co-op, it feels like the new
:21:16. > :21:22.architecture for regulating the City is now facing its first big test.
:21:23. > :21:27.And the chief executive of the Financial Conduct Authority, the
:21:28. > :21:31.SCA, Martin Wheatley, joins me now. Welcome to The Sunday Politics. The
:21:32. > :21:37.failure of bank regulation was one of the clearest lessons of the crash
:21:38. > :21:42.in 2008, and yet two years later, in 2010, Paul Flowers is allowed to
:21:43. > :21:47.become chairman of the Co-op - why have we still not got the regulation
:21:48. > :21:52.right? We have made a lot of changes since then. We have created a new
:21:53. > :21:55.regulator, as you know. At the time, we still had a process which allowed
:21:56. > :21:59.somebody to be appointed to a bank and they would go through a
:22:00. > :22:02.challenge, but in the case of Paul Flowers, there was no need for an
:22:03. > :22:08.additional challenge when he was appointed to chairman, because he
:22:09. > :22:13.was already on the board. But going from being on the board to becoming
:22:14. > :22:17.chairman, that is a big jump, and he only had one interview? That is why
:22:18. > :22:22.today, it would be different. But the truth is, that was the system at
:22:23. > :22:26.the time, the system which the FSA operated. He was challenged, we did
:22:27. > :22:30.challenge him, and we said, you do not have the right experience, but
:22:31. > :22:33.at the time, we would not have opposed the appointment. What we
:22:34. > :22:38.needed was additional representation of the board of people who did have
:22:39. > :22:42.banking experience. You can say that that was then and this is now, but
:22:43. > :22:47.up until April of this year, it was still the plan for the Co-op, under
:22:48. > :22:52.Mr Flowers, and despite being seriously wounded by the Britannia
:22:53. > :22:56.takeover, to take on 632 Lloyds branches. That was the Co-op's
:22:57. > :23:00.plan. They needed to pass our test as to whether we thought they were
:23:01. > :23:04.fit to do that, and frankly, they never passed that test. It was not
:23:05. > :23:09.the regulator that stopped them? It was. We were constantly pushing
:23:10. > :23:12.back, saying, you have not got the capital, you have no got the
:23:13. > :23:16.systems, and ultimately, they withdrew, when they could not answer
:23:17. > :23:20.our questions. You were asking the right questions, I accept that, but
:23:21. > :23:26.all of the time, the politicians on all sides, they were pushing for it
:23:27. > :23:32.to happen, and I cannot find anywhere where the regulator said,
:23:33. > :23:35.look, this is just not going to happen. I cannot comment on what the
:23:36. > :23:39.politicians were doing, but I continue what we were doing, which
:23:40. > :23:42.was constantly asking the Co-op, have you got the systems in place,
:23:43. > :23:47.have you got the people, have you got the capital? And they didn't.
:23:48. > :23:51.But it only came to a head when Lloyds started its own due diligence
:23:52. > :23:54.on the bank, and they discovered that it was impossible for them to
:23:55. > :23:59.take over the branches, it was not the regulator... In fairness, what
:24:00. > :24:04.we do is ask the questions, can you do this deal? And we kept pushing
:24:05. > :24:11.back, and we never frankly got delivered a business plan which we
:24:12. > :24:23.were happy to approve. Is the SCA going to launch its own inquiry into
:24:24. > :24:27.what happened? -- the FCA. The Chancellor has announced what will
:24:28. > :24:32.be a very broad inquiry. There are a number of specifics which we will be
:24:33. > :24:36.able to look at, relating to events over the last five years. Could
:24:37. > :24:39.there be a police investigation? I think the police have already
:24:40. > :24:44.announced an investigation. I am talking about into the handling of
:24:45. > :24:51.the bank. It depends. There might be, if there is grim low activity,
:24:52. > :25:00.which we do not know yet. You worked at the FS eight, didn't you? I did.
:25:01. > :25:03.Some of those people who were signed off on the speedy promotion of Mr
:25:04. > :25:09.Flowers, are they now working there? Yes, we have some. I came to
:25:10. > :25:13.join the Financial Services Authority, to lead it into the
:25:14. > :25:26.creation of the new body, the SCA. We had people who were challenging
:25:27. > :25:30.and they did the job. There was not a requirement to approve the role as
:25:31. > :25:34.chairman. There was not even a requirement to interview at that
:25:35. > :25:37.stage. What we did do was to require that he was interviewed, and that
:25:38. > :25:50.the Co-op should get additional experience. One of the people from
:25:51. > :25:54.the old organisation, who signed up on the promotion of Mr Flowers to
:25:55. > :26:02.become chairman is now a nonexecutive director of the Co-op,
:26:03. > :26:05.so how does that work? Welcome he was a senior adviser to our
:26:06. > :26:09.organisation, one of the people who made the challenges, and who said,
:26:10. > :26:13.you need more experience on your board. Subsequently he then went and
:26:14. > :26:17.joined the board. Surely that should not be allowed, the regulator and
:26:18. > :26:22.the regulated should not be like that. Well clearly, you need
:26:23. > :26:27.protection, but we have got to get good people in, and frankly, we want
:26:28. > :26:30.the industry to have good people in the industry, so there will be some
:26:31. > :26:34.movement between the regulator and industry. We all wonder whether you
:26:35. > :26:38.have the power or even the confidence to stand up if you look
:26:39. > :26:43.at all of the really bad bank decisions recently, politicians were
:26:44. > :26:47.behind them. It was Gordon Brown who pushed the disastrous merger of
:26:48. > :26:51.Lloyds and RBS. It was Alex Salmond who egged on RBS to buy the world.
:26:52. > :26:56.All three main parties wanted the Co-op to buy Britannia, even though
:26:57. > :27:00.they did not know the debt it would inherit, and all three wanted the
:27:01. > :27:05.Co-op to buy the Lloyds branches - how do you as a regulator stand up
:27:06. > :27:10.to that little concert party? Well, that political pressure exists, our
:27:11. > :27:14.job at the end of the day is to do a relatively technical job and say,
:27:15. > :27:17.does it stack up? And it didn't, and we made that point time and time
:27:18. > :27:21.again to the Co-op board. They did not have a business case that we
:27:22. > :27:28.could approve. The bodies on left and right -- the politicians on left
:27:29. > :27:35.and right gave the Co-op special support. They may have done, but
:27:36. > :27:39.that was not you have made a warning about these payday lenders, but I
:27:40. > :27:42.think what most people would like to see is a limit put on the interest
:27:43. > :27:47.they can charge over a period of time - will you do that? We have got
:27:48. > :27:52.a whole set of powers for payday lenders. We will bring in some
:27:53. > :27:56.changes from April next year, and we will bring in further changes as we
:27:57. > :28:00.see necessary. Will you put a limit on the interest they can charge?
:28:01. > :28:05.That is something we can study. You do not sound too keen on it? Well,
:28:06. > :28:10.there are a lot of changes we need to make. One change is limiting
:28:11. > :28:12.rollovers, limiting the use of continuous payment authorities.
:28:13. > :28:18.Simply jumping to one trigger would be a mistake. Finally, an issue
:28:19. > :28:22.which I think is becoming a growing concern, because the Government is
:28:23. > :28:26.thinking of subsidising them, 95% mortgages are back - should we not
:28:27. > :28:32.be worried about that? I think we should if the market has the same
:28:33. > :28:37.experiences that we had back in 2007 - oh wait. We are bringing a
:28:38. > :28:42.comprehensive package in under our mortgage market review, which will
:28:43. > :28:53.change how people lend and will put affordability back at the heart of
:28:54. > :28:55.lending decisions. -- 2007-08. You have not had your first big
:28:56. > :29:01.challenge yet, have you? We have many challenges.
:29:02. > :29:06.It was once called the battle of the mods and the rockers - the fight
:29:07. > :29:08.between David Cameron-style modernisers and old-style
:29:09. > :29:12.traditional Tories for the direction and soul of the Conservative Party.
:29:13. > :29:21.But have the mods given up on changing the brand? When David
:29:22. > :29:24.Cameron took over in 2005, he promoted himself as a new Tory
:29:25. > :29:30.leader. He said that hoodies need more love. He was talking about
:29:31. > :29:34.something called the big society. He told his party conference that it
:29:35. > :29:38.was time to that sunshine win the day. There was new emphasis on the
:29:39. > :29:43.environment, and an eye-catching trip to a Norwegian glacier to see
:29:44. > :29:49.first-hand, supposedly, the effects of global warming. This week, party
:29:50. > :29:52.modernise and Nick bone has said that the party is still seen as an
:29:53. > :30:00.old-fashioned monolith and hasn't done enough to improve its appeal.
:30:01. > :30:06.The Tories have put some reforms into practice, such as gay marriage,
:30:07. > :30:11.but they have put more into welfare reform band compassionate
:30:12. > :30:16.conservatism. David Cameron wants talked about leading the greenest
:30:17. > :30:25.government ever. Downing Street says that the quote in the Son is not
:30:26. > :30:29.recognised, get rid of the green crap. At this point in the programme
:30:30. > :30:32.we were expecting to hear from the Energy and Climate Change Minister,
:30:33. > :30:37.Greg Barker. Unfortunately, he has pulled out, with Downing Street
:30:38. > :30:43.saying it's for ""family reasons"". Make of that what you will. However,
:30:44. > :30:47.we won't be deterred. We're still doing the story, and we're joined by
:30:48. > :30:52.our very own mod and rocker - David Skelton of the think-tank Renewal,
:30:53. > :30:57.and Conservative MP Peter Bone. Welcome to you both. I'm glad your
:30:58. > :31:01.family is allowed you to come? David Skelton, getting rid of all the
:31:02. > :31:06.green crap, or words to that effect, that David Cameron has been saying.
:31:07. > :31:11.It is just a sign that Tory modernisation has been quietly
:31:12. > :31:16.buried. I do think that's right. Modernisation is about reaching out
:31:17. > :31:21.to the voters, and the work to do that is now more relevant than ever.
:31:22. > :31:27.We got the biggest swing since 1931, and the thing is we need to do more
:31:28. > :31:33.to reach out to voters in the North. We need to reach out to non-white
:31:34. > :31:39.voters, and show that the concerns of modern Britain and the concerns
:31:40. > :31:42.of ordinary people is something that we share. And what way will racking
:31:43. > :31:47.up electricity bills with green levies get you more votes in the
:31:48. > :31:52.North of England? We have to look at ways to reduce energy bills. The
:31:53. > :31:58.renewable energy directive doesn't do anything to help cut our
:31:59. > :32:03.emissions, but does decrease energy bills by ?45 a year. We should
:32:04. > :32:09.renegotiate that. That is a part of modernisation and doing what
:32:10. > :32:14.ordinarily people want. And old dinosaurs like you are just holding
:32:15. > :32:18.this modernisation process back? I am very appreciative of covering on
:32:19. > :32:23.this programme. The Tory party has been reforming itself for more than
:32:24. > :32:27.150 years. This idea of modern eyes a is just some invention. We are
:32:28. > :32:35.changing all the time. I'm nice and cuddly! So you are happy that the
:32:36. > :32:40.party made gay marriage almost a kind of symbol of its modernisation?
:32:41. > :32:48.Fine Mac the gay marriage was a free vote. David Cameron was recorded as
:32:49. > :32:52.a rebel there because more Tories voted against his position than ever
:32:53. > :32:56.before. It was said that this was a split between the old and young, but
:32:57. > :33:00.it actually was a split between those who were religious and
:33:01. > :33:06.nonreligious. It is a misinterpretation of what happened.
:33:07. > :33:12.Is a modernisation in retreat? I think modernisation is an
:33:13. > :33:18.invention. Seven years ago, in my part of the world, we got three
:33:19. > :33:24.councillors elected, two were 80 and one was 21. A few months ago, a
:33:25. > :33:28.25-year-old was chosen to fight Corby for the Conservative Party. He
:33:29. > :33:33.came from a comprehensive School. He was one of the youngest. The Tory
:33:34. > :33:38.party is moving on. So you found three young people? Hang on a
:33:39. > :33:47.minute. You can't get away with that. Three in one batch. Does
:33:48. > :33:53.modernisation exist? Modernisation is about watering our appeal and
:33:54. > :33:58.sharing our values are relevant to voters who haven't really thought
:33:59. > :34:01.about voting for us for decades now. Modernisation is about more than
:34:02. > :34:05.windmills and stuff, it is about boosting the life chances of the
:34:06. > :34:11.poorest, it is about putting better schools in poorer areas. It is also
:34:12. > :34:17.saying that modernisation and the Tory party... When has the Tory
:34:18. > :34:22.party been against making poorer people better off? Or against better
:34:23. > :34:26.schools? Do you think Mrs Thatcher was a moderniser when she won all
:34:27. > :34:32.those elections? The problem we have at the moment is that UKIP has
:34:33. > :34:36.grown-up. If we could get all of those people who vote UKIP to vote
:34:37. > :34:40.for us, we would get 47% of the vote. We don't need to worry about
:34:41. > :34:44.voters on the left. We need to worry about the voters in the north, those
:34:45. > :34:53.people who haven't voted for us for decades. Having an EU Referendum
:34:54. > :34:59.Bill is going to get people to vote. We have to reach out to
:35:00. > :35:04.voters, but not by some sort of London based in need. You have to
:35:05. > :35:08.broaden your base. I agree with you on that. We have to broaden our
:35:09. > :35:13.appeal, but this back to the future concept is not going to work. We
:35:14. > :35:17.need something that generally appeals to low and middle-income
:35:18. > :35:22.voters, and something that shows we genuinely care about the life
:35:23. > :35:30.chances of the poorest. Do you think that the people who vote UKIP don't
:35:31. > :35:34.support those aspirations? We are not doing enough to cut immigration.
:35:35. > :35:38.We don't have an EU Referendum Bill stop we have to get the centre right
:35:39. > :35:46.to vote for us again. Do that, and we have it. Tom Pursglove, the 25
:35:47. > :35:59.euros, will be returned in Corby because we cannot win an election
:36:00. > :36:04.there. -- the 25-year-old. Whether you are moderniser or
:36:05. > :36:12.traditionalist, people, particularly in the North, see you as a bunch of
:36:13. > :36:17.rich men. And rich southerners. You are bunch of rich southerners. We
:36:18. > :36:24.need to do more to show that we are building on lifting the poorest out
:36:25. > :36:27.of the tax. We need to build more houses. There is a perception that
:36:28. > :36:34.the leadership at the moment is rich, and public school educated.
:36:35. > :36:40.What we have to do is get more people from state education into the
:36:41. > :36:48.top. You are going the other way at the moment. That is a fair
:36:49. > :36:55.criticism. Modernisers also say that. I went to a combo hedge of
:36:56. > :36:57.school as well. -- do a comprehensive school. We need to
:36:58. > :37:07.show that we are standing up for low income. Thank Q, both of you. You
:37:08. > :37:19.are watching the Sunday Politics. Coming up in just under
:37:20. > :37:27.Hello and on the Sunday Politics Wales. Should the Welsh Government
:37:28. > :37:29.extend the five pence charge on plastic bags to cover bags-for-life
:37:30. > :37:31.at supermarkets? And as Alex Salmond prepares to
:37:32. > :37:35.unveil his administration's detailed plans for Scotland to leave the UK,
:37:36. > :37:38.Carwyn Jones has been in the Scottish media headlines.
:37:39. > :37:41.Joining me throughout today's programme are two AMs - Plaid
:37:42. > :37:51.Cymru's Jocelyn Davies and Labour's Mike Hedges.
:37:52. > :37:53.We will begin with The Independent police Commission report. It will
:37:54. > :38:10.suggest that neighbourhood policing is under threat. If you speak to the
:38:11. > :38:17.public, that is what they want. They want to see police officers on the
:38:18. > :38:29.beat. Whether that is sustainable remains to be seen. People always
:38:30. > :38:34.want policemen on the beat. They now have police community support
:38:35. > :38:40.officers funded by the Welsh Government. They are immensely
:38:41. > :38:48.popular in my constituency. They meet people. The show front line
:38:49. > :38:57.policing to the public. Are you happy that they are able to bridge a
:38:58. > :39:01.gap in Wales? They do not have the full powers of a police officer but
:39:02. > :39:06.they are out on the street giving people comfort. They look like
:39:07. > :39:18.police officers. They appear to be in the U of police officers. I have
:39:19. > :39:27.written in favour of devolution of policing.
:39:28. > :39:30.It's widely been seen as a success but should the five pence charge on
:39:31. > :39:33.carrier bags be extended to cover bags for life you can buy in the
:39:34. > :39:36.supermarket? The Welsh Government's looking at the idea, but the
:39:37. > :39:40.retailers aren't happy. They say charging for bags for life would be
:39:41. > :39:46.perverse. Tomos Livingstone has been doing some early Christmas shopping.
:39:47. > :39:51.Christmas is coming and everyone is stocking up on cheap. In Cardiff
:39:52. > :39:58.people are used to paying five pence for a carrier bag. But should we be
:39:59. > :40:06.paying a charge for bags for life? The plastic bag charge has been a
:40:07. > :40:12.success. The number of bags used has fallen to magically. But now Welsh
:40:13. > :40:16.ministers want to see if they can do more to drive down the number of
:40:17. > :40:26.bags being used further and make sure more money goes to
:40:27. > :40:30.environmental charities. What we are doing in the White Paper is saying
:40:31. > :40:34.we want to change the way we manage our natural resources in Wales. We
:40:35. > :40:37.want to see a more coherent way of doing things across the whole
:40:38. > :40:43.country. We want to manage our waste better. As part of managing our
:40:44. > :40:51.waste we want to have the powers to enable us to make additional charges
:40:52. > :40:54.where they are necessary. But the supermarkets are not happy. They say
:40:55. > :40:59.extending the charge to cover bags for life sends out the wrong
:41:00. > :41:05.message. The Welsh retail Consortium does not support extending the
:41:06. > :41:11.charges to reusable carrier bags or bags for life. We are trying to
:41:12. > :41:14.encourage customers to reuse the carrier bags and we are doing that
:41:15. > :41:21.by placing a charge on single use carrier bag. It seems perverse to
:41:22. > :41:36.penalise people for using reusable Yanks. Northern Ireland also charges
:41:37. > :41:40.for plastic bags. Scotland is at the its own charge next year. In England
:41:41. > :41:46.the plan is for a 5p charge after the general election but only in
:41:47. > :41:51.larger shops and supermarkets. In Wales the main opposition party
:41:52. > :41:56.thinks we should leave it at that. I would like to see a light touch when
:41:57. > :42:01.it comes to legislation or regulation. It is about striking a
:42:02. > :42:15.balance to what is a sensible compromise. It is a modest sum of
:42:16. > :42:20.money and that is making an impact. If it is seen as a penalty people
:42:21. > :42:27.will resent it. The Welsh Government's plans are out to
:42:28. > :42:30.consultation until the New Year. The 5p charge was introduced without
:42:31. > :42:39.much resistance. Ministers say they do not want to pick a charge -- do
:42:40. > :42:49.not want to pick a fight with supermarket.
:42:50. > :42:57.Alan Davies says he does not want to pick a fight with supermarkets. He
:42:58. > :43:07.already has. The 5p charge has worked well. 81% reduction in
:43:08. > :43:17.supermarkets is the figure quoted by the Government. In England earlier
:43:18. > :43:21.in the year is for life were being given away free. If that was brought
:43:22. > :43:27.in two wheels you would have the same position with bags for life as
:43:28. > :43:51.you have with single use carrier bags. What do you think about it?
:43:52. > :43:55.The idea of the bag for life as you pay that charge and the retailer
:43:56. > :44:04.replaces it free of charge. Reduced ill have two a 5p every time you
:44:05. > :44:28.replace your bag. What is the point of the policy? The Jews waste says
:44:29. > :44:36.minister. -- Reduce waste says the Minister.
:44:37. > :44:47.People will adapt very quickly to it. This policy was a headline
:44:48. > :44:57.grabber. This policy was a success. Are they
:44:58. > :45:02.taking it too far? If supermarkets decided to give away bags for life
:45:03. > :45:13.that means they turn into bags that can be thrown away. The attitude
:45:14. > :45:30.change has already happened if people get axed three eight will use
:45:31. > :45:45.them for refugees. -- if people get carrier bags for three they will use
:45:46. > :46:00.them for refuse. With this policy it will not change behaviour.
:46:01. > :46:06.It is a levy on a plastic bags. Companies are encouraged to give
:46:07. > :46:14.that money to environmental causes. Has that been a success? It is
:46:15. > :46:25.difficult to monitor. We do not know how much has been collected and what
:46:26. > :46:34.organisations have benefited. That is one part of the introduction of
:46:35. > :46:41.this levy which has not been clear. The Welsh Government does not get a
:46:42. > :46:48.penny. But we do not know where the money is going. It is not a tax. It
:46:49. > :46:57.is money that is going to good causes. I do know that one or two
:46:58. > :47:01.organisations have done well out of it.
:47:02. > :47:05.It's not often the Welsh First Minister makes it on to the front
:47:06. > :47:07.page of The Scotsman or The Glasgow Herald, but his intervention in the
:47:08. > :47:11.Independence Referendum debate earlier this week hit the headlines.
:47:12. > :47:14.In a speech in Edinburgh, Carwyn Jones poured cold water on SNP plans
:47:15. > :47:18.for an independent Scotland to use the pound - a key point in the
:47:19. > :47:20.referendum campaign. Well, our political reporter James Williams
:47:21. > :47:22.was there listening to that speech and joins us from the Scottish
:47:23. > :47:34.capital. Carwyn Jones made a splash.
:47:35. > :47:40.Carwyn Jones came to Scotland Re: the silk Commission on devolution of
:47:41. > :47:47.powers. He said that evolution can work within the United Kingdom. He
:47:48. > :47:51.said there is no need to vote for independence. But what hit the
:47:52. > :47:58.headlines, as you can see in the Scotsman, was his opposition to the
:47:59. > :48:04.SNP plans for an independent Scotland to join a currency union
:48:05. > :48:11.with the rest of the UK stop if one part of the currency union decides
:48:12. > :48:16.to leave. If an independent nation wants to join it is a matter for
:48:17. > :48:22.Wales, Northern Ireland, and England. I would want to have a say
:48:23. > :48:27.in that. It is unlikely that currency union with a strong fiscal
:48:28. > :48:32.controls would work. They would be too much uncertainty. It would slow
:48:33. > :48:38.down decision-making. The risk to us and northern Ireland would be
:48:39. > :48:45.greater. It is in the interest of the rest of the UK to retain the
:48:46. > :48:47.currency. It makes for a straightforward trading relationship
:48:48. > :48:54.which already exists between Scotland and the rest of the UK stop
:48:55. > :49:01.it makes practical economic sense. That was the SNP's John Swinney. The
:49:02. > :49:09.SNP has admitted that they do not have an alternative plan for the
:49:10. > :49:11.currency. The Better Together campaign has jumped on that. There
:49:12. > :49:19.has been a string of negative stories in the press questioning the
:49:20. > :49:25.idea of currency union. Carwyn Jones is just one voice in
:49:26. > :49:35.that debate. That's the is a senior elected politician and he is the
:49:36. > :49:40.leader of another devolved nation. Messages like that from England may
:49:41. > :49:46.be regarded as unexpected that are relatively easily dispersed at least
:49:47. > :49:55.by those who do not feel much regard for British politics. But when the
:49:56. > :50:03.message comes from Wales, a country that in some sense has had the same
:50:04. > :50:14.journey as Scotland, it has more resonant.
:50:15. > :50:17.He makes the point about the intervention of Carwyn Jones. He
:50:18. > :50:21.will not be the only Welsh politician making an intervention.
:50:22. > :50:28.There was strong opposition from some quarters in Wales about Carwyn
:50:29. > :50:34.Jones coming to Scotland and making the point about Scottish
:50:35. > :50:39.independence. I predict to Plaid Cymru this
:50:40. > :50:50.morning. With their leader be coming to Scotland to make an
:50:51. > :50:52.intervention? They said no. It will be interesting to see if Carwyn
:50:53. > :51:05.Jones makes any further interventions.
:51:06. > :51:09.On Tuesday the Scottish Government is going to publish a white paper.
:51:10. > :51:21.They have suggested that Scotland could go independent on a certain
:51:22. > :51:39.date. Yes they say the 24th of March 2016 would be the date. They will
:51:40. > :51:52.issue a blueprint. Now it is incumbent on their No campaign.
:51:53. > :51:59.Thank you very much. Jocelyn Davies, interesting that the
:52:00. > :52:08.leader of Plaid Cymru will not be going up there will you? If I get
:52:09. > :52:16.the opportunity I think I will. I think it would be fun to go.
:52:17. > :52:24.Agreement has broken out on these seats. I think there will be at thy
:52:25. > :52:31.vengeance. I would go up for the opposite reason. I would be
:52:32. > :52:39.campaigning for Scotland to stay part of the UK. Is it any of your
:52:40. > :52:50.business though? It is. Any path-breaking away will have an
:52:51. > :52:54.effect on the other parts. I will be trying to do the best for Scotland.
:52:55. > :53:03.Only the Scottish people will get a full but other people will be
:53:04. > :53:13.interested. Carmen Jones made the point about reform. He gave a gift
:53:14. > :53:17.to the yes campaigners seeing if you stay in the union the unfair
:53:18. > :53:24.advantage that you have had over your funding will end. Barnett
:53:25. > :53:34.reform in Scotland means less money. Yes. He knows that will have
:53:35. > :53:40.an impact if they stay in the union. If I was a photo in Scotland I would
:53:41. > :53:48.be thinking, stay in, and we could be worse off. What do you make of
:53:49. > :53:57.the fact that the leader of Plaid Cymru will not be travelling up
:53:58. > :54:10.there? I am surprised. I would have thought that Welsh politicians would
:54:11. > :54:18.be giving their view. Clearly her view is similar to
:54:19. > :54:25.yours. Why was she not go up there? I have no idea. I can assure you she
:54:26. > :54:35.will be hoping for I guess thought in that referendum.
:54:36. > :54:39.There is something on the front of The Papers almost every day and
:54:40. > :54:51.there is ten months to go. This will be a long can aim. Dear are 30% that
:54:52. > :54:57.say they want independence, 24% are against. There will be a big fight
:54:58. > :55:06.for those people who are not quite sure and those that would currently
:55:07. > :55:15.support maximum devolution. At the moment in Wales 10% of people
:55:16. > :55:25.would support independent. I would expect that number to go down. You
:55:26. > :55:33.cannot keep someone else's currency. When Czechoslovakia split up they
:55:34. > :55:39.had separate currencies which they pegged to each other and three
:55:40. > :55:51.months later they started diverging. This pound debate, is
:55:52. > :55:58.this the UK Government playing hardball? Is there any reason
:55:59. > :56:05.Scotland cannot the pound? I do not think there is. If the Scottish
:56:06. > :56:13.people want to keep the pound I think the UK Government will find a
:56:14. > :56:21.way around it. What are your feelings about how things will go?
:56:22. > :56:26.The current opinion polls show that 25% of people would vote no and that
:56:27. > :56:31.yes group is the biggest group. It is the maximum devolution group that
:56:32. > :56:34.is the biggest group. I think Scotland will vote against it
:56:35. > :56:41.because it is in the best interest of Scotland. The value of your
:56:42. > :56:46.currency depends on your economic policy. How can you have too
:56:47. > :56:57.economic policies affecting the value of your currency? If it enters
:56:58. > :57:04.you that it will have to have the brutal. If you share a left to go to
:57:05. > :57:07.Scotland you will have ID to talk about.
:57:08. > :57:19.Time to look at some of the stories of the week.
:57:20. > :57:22.The Plaid Cymru MP who chaired the enquiry has led to stocking being a
:57:23. > :57:33.specific offence warns that the new laws were not being applied.
:57:34. > :57:39.The education minister said that The Independent review into higher
:57:40. > :57:45.education will not be ready until 2016. He denied he is relaying it so
:57:46. > :57:49.we will not have to tell the electorate what all seekers.
:57:50. > :58:01.The Treasury said the Welsh Government will not be able to vary
:58:02. > :58:06.individual tax bands. MPs congratulated Dr Who on its 50th
:58:07. > :58:25.anniversary. The peer of you sit on the Finance
:58:26. > :58:29.Committee. We have heard of the decision to set up a Commission to
:58:30. > :58:32.look at all aspects of higher education particularly funding. The
:58:33. > :58:40.Finance Committee is conducting its own enquiry we are. The enquiry is
:58:41. > :58:47.going well. We will report before the next election. I support the
:58:48. > :59:00.policy of the Welsh Government at the moment. I would never have gone
:59:01. > :59:04.if I had had to pay fees of ?9,000. The opportunity I had should be
:59:05. > :59:08.available to others. I am sure many students feel like that that is not
:59:09. > :59:18.an admission that it is unaffordable. Anything is
:59:19. > :59:32.affordable. You decide how to spend. What do you make of this
:59:33. > :59:37.decision? It cannot inform the manifesto 's leading up to the
:59:38. > :59:58.election. It seems a very long time to be looking at something. It does
:59:59. > :00:01.appear. In Scotland students are funded to go to universities in
:00:02. > :00:07.Scotland. Is that one way of dealing with it? That is Scottish funding
:00:08. > :00:09.for Scottish universities rather than Scottish funding for Scottish
:00:10. > :00:14.student we could switch from funding than Scottish funding for Scottish
:00:15. > :00:22.will be returning to this one. Thank you.
:00:23. > :00:28.A little bit of history was made at Prime Minister's Questions this
:00:29. > :00:31.week. A teensy tiny bit. It wasn't David Cameron accusing one MP of
:00:32. > :00:34.taking "mind-altering substances" - they're always accusing each other
:00:35. > :00:37.of doing that. No, it was the first time a Prime Minister used a live
:00:38. > :00:47.tweet sent from someone watching the session as ammunition at the
:00:48. > :00:51.dispatch box. Let's have a look. We have had some interesting
:00:52. > :00:55.interventions from front edges past and present. I hope I can break
:00:56. > :01:00.records by explaining that a tweet has just come in from Tony McNulty,
:01:01. > :01:04.the former Labour security minister, saying that the public are
:01:05. > :01:09.desperate for a PM in waiting who speaks for them, not a Leader of the
:01:10. > :01:14.Opposition in dodging in partisan Westminster Village knock about. So
:01:15. > :01:19.I would stay up with the tweets if you want to get on the right side of
:01:20. > :01:23.this one! We are working on how the Prime Minister managed to get that
:01:24. > :01:29.wheat in the first place. What did you think when you saw it being read
:01:30. > :01:34.out? I was certainly watching the Daily Politics. I almost fell off my
:01:35. > :01:39.chair! It was quite astonishing. He didn't answer the question - he
:01:40. > :01:43.didn't do that the whole time. But I stand by what the tweets said. I
:01:44. > :01:49.have tweeted for a long time on PMQs. Normally I am praising Ed
:01:50. > :01:53.Miliband to the hilt, but no one announces that in Parliament!
:01:54. > :01:58.Because the Prime Minister picked up on what you said, it unleashed some
:01:59. > :02:03.attacks on you from the Labour side. It did, minor attacks from some very
:02:04. > :02:07.junior people. Most people were supportive of what I said. They took
:02:08. > :02:14.issue with the notion of not doing it until 12:30pm, when it wasn't
:02:15. > :02:19.available for the other side to use. Instant history, and instantly
:02:20. > :02:24.forgettable, I would say. Do you think you have started a bit of a
:02:25. > :02:29.trend? I hope not, because the dumbing down of PMQs is already on
:02:30. > :02:37.its way. Most people tweet like mad through PMQs! Is a measure of how
:02:38. > :02:42.post-modern we have become, we have journalists tweeting about someone
:02:43. > :02:46.talking about a tweet. That is the level of British politics. I am
:02:47. > :02:50.horrified by this development. The whole of modern life has become
:02:51. > :02:58.about observing people -- people observing themselves doing things.
:02:59. > :03:02.Do we know what happened? Somebody is monitoring the tweets on behalf
:03:03. > :03:07.of the Prime Minister or the Tory party. They see Tony's tweet. They
:03:08. > :03:11.then print it out and give it to him? There was a suggestion that
:03:12. > :03:21.Michael Goves had spotted it, but Craig Oliver from the BBC had this
:03:22. > :03:26.great sort of... Craig Oliver was holding up his iPad to take pictures
:03:27. > :03:29.of the Prime Minister, which he then tweeted, from the Prime Minister.
:03:30. > :03:34.People will now be tweeting in the hope that they will be quoted by the
:03:35. > :03:39.Prime Minister, or the Leader of the Opposition. I wasn't doing that. I'm
:03:40. > :03:47.just talking about the monster you have unleashed! I hope it dies a
:03:48. > :03:52.miserable death. I think Tony is a good analysis -- a good analyst of
:03:53. > :04:04.PMQs on Twitter. Moving onto the Co-op. You were a Co-op-backed MP,
:04:05. > :04:09.white you? I was a Co-op party member. There are two issues here
:04:10. > :04:13.about the Co-op and the Labour Party. All the new music suggests
:04:14. > :04:19.that the Co-op will now have to start pulling back from lending or
:04:20. > :04:22.donating to the Labour Party, which, at a time when Mr Miliband is going
:04:23. > :04:27.through changes that are going to cut of the union funds, it seems
:04:28. > :04:31.quite dangerous. There are three things going on. There's the
:04:32. > :04:35.relationship that the party has politically with the Co-op party,
:04:36. > :04:41.there is the commercial relationship you referred to, and then there is
:04:42. > :04:46.this enquiry into the comings and goings of Flowers and everybody
:04:47. > :04:52.else. The Tories, at their peril, will mix the three up. There's a lot
:04:53. > :04:58.of things going on with a bang. Labour has some issues around
:04:59. > :05:04.funding generally, and they are potentially exacerbated by the Co-op
:05:05. > :05:10.issue. The Labour Party gets soft loans from the Co-op bank, and it
:05:11. > :05:16.gets donations. ?800,000 last year. Ed Balls got about ?50,000 for his
:05:17. > :05:19.private office. You get the feeling, given the state of the Co-operative
:05:20. > :05:25.Bank now, that that money could dry up. We will see. There's lots of
:05:26. > :05:29.speculation in the papers today. At the core, the relationship between
:05:30. > :05:34.the Co-op party and the Labour Party is a proud one, and a legitimate
:05:35. > :05:40.one. I don't think others always understand that. Here is an even
:05:41. > :05:47.bigger issue. Is it not possible that the Co-op bank will cease to
:05:48. > :05:57.exist in any meaningful way as a Co-op bank? Is the bane out means it
:05:58. > :06:04.is 70% owned -- the bail out means that it is 70% owned, or 35% going
:06:05. > :06:08.to a hedge fund, I think I read. Yes, there is a move from the
:06:09. > :06:16.mutualism of the Co-op. But don't confuse the Co-op bank with the
:06:17. > :06:23.Co-op Group. Others have done that. I haven't. Here's the rub. The soft
:06:24. > :06:36.loans that Labour gets. They got ?1.2 million from this. And 2.4
:06:37. > :06:40.million. They are secured against future union membership fees of the
:06:41. > :06:45.party. What is Mr Miliband doing? He is trying to end that? You have this
:06:46. > :06:52.very difficult confluence of events, which is, could these wonderful soft
:06:53. > :06:56.loans that Labour has had from the Co-op, could they be going? And
:06:57. > :07:01.these union reforms, where Ed Miliband is trying to create a link
:07:02. > :07:05.between individuals and donations to the Labour Party... Clearly, there
:07:06. > :07:09.could be real financial difficulties here. The government needs to be
:07:10. > :07:12.careful, because George Osborne launched one of his classic
:07:13. > :07:17.blunderbuss operations this week, which is that the Labour Party is to
:07:18. > :07:26.blame for Paul Flowers' private life. No, it's not. And that all the
:07:27. > :07:31.problems, essentially... Look at what George Osborne was doing in
:07:32. > :07:34.Europe. He was trying to change the capital requirement rules that would
:07:35. > :07:38.make it easier for the Co-op to take over Lloyd's. If there is to be a
:07:39. > :07:44.big investigation, George Osborne needs to be careful of what he
:07:45. > :07:47.wishes for. This is another example of the Westminster consensus. All of
:07:48. > :07:50.the Westminster parties were in favour of the Britannia takeover.
:07:51. > :07:56.This is how the Co-op ended up with all this toxic rubbish on its
:07:57. > :08:00.balance sheet. All the major parties were in favour of going to get the
:08:01. > :08:08.Lloyds branches. The Tories tried to outdo Labour in being more
:08:09. > :08:14.pro-Co-op. There was nobody in Westminster saying, hold on, this
:08:15. > :08:17.doesn't work. It is like the financial bubble all over again.
:08:18. > :08:22.Everyone was in favour of that at the time. I think there is no
:08:23. > :08:26.evidence so far that the storm is cutting through to the average
:08:27. > :08:31.voter. If I were Ed Miliband, I would let it die a natural death. I
:08:32. > :08:36.would not write to an editorial column for a national newspaper on a
:08:37. > :08:40.Sunday. That keeps the issue alive, and it makes him look oversensitive
:08:41. > :08:48.and much better at dishing it out than taking it. I agree about that.
:08:49. > :08:56.The Labour press team tweeted this week saying that it was a new low
:08:57. > :09:04.for the times. And this was re-tweeted by Ed Miliband. It isn't
:09:05. > :09:09.a great press attitude. It is very Moni. Bill Clinton went out there
:09:10. > :09:14.and fought and made the case. So did Tony Blair. If you just say, they
:09:15. > :09:19.are being horrible to us, it looks pathetic. And it will cut through on
:09:20. > :09:26.Osborne and the financial dimensional is, not political. I
:09:27. > :09:34.shall tweet that later! While we have been talking, Mr Miliband has
:09:35. > :09:38.been on Desert Island Discs. He might still be on it. Let's have a
:09:39. > :09:56.listen to what he had to say. # Take on me, take me on.
:09:57. > :10:00.# And threw it all, she offers me protection.
:10:01. > :10:23.# A lot of love and affection. # Whether I'm right or wrong #.
:10:24. > :10:28.# Je Ne Regrette Rien. #. Obviously, that was the music that
:10:29. > :10:33.Ed Miliband chose. Who thought -- you would have thought he would
:10:34. > :10:44.choose Norman Lamont's theme tune! He chose Jerusalem... He has no
:10:45. > :10:55.classical background at all. He had no Beethoven, no Elgar. David
:10:56. > :11:06.Cameron had Mendelssohn. And Ernie, the fastest Notman in the West. --
:11:07. > :11:12.fastest milkman. Tony Blair chose the theme tune to a movie. Tony
:11:13. > :11:21.Blair's list was chosen by young staffers in his office. It
:11:22. > :11:26.absolutely was. Tony Blair's list was chosen by staff. The Ed Miliband
:11:27. > :11:32.this was clearly chosen by himself, because who would allow politician
:11:33. > :11:39.to go out there and say that they like Aha. I am the same age as Ed
:11:40. > :11:51.Miliband, and of course he likes Aha. That was the tumour was played
:11:52. > :11:59.in the 80s. Sweet Caroline. It is Angels by Robbie Williams. I was
:12:00. > :12:03.14-year-old girl when that came out. I thought Angels was the staple of
:12:04. > :12:10.hen nights and chucking out time in pubs. The really good thing about
:12:11. > :12:15.his list is that the Smiths to not appear. The Smiths were all over
:12:16. > :12:21.David Cameron's list. The absolutely miserable music of Morris he was not
:12:22. > :12:28.there. What was his luxury? And Indian takeaway! Again, chosen for
:12:29. > :12:38.political reasons. I would agree with the panel about Aha, but I
:12:39. > :12:43.would expect -- I would respect his right to choose. Have you been on
:12:44. > :12:47.Desert Island Discs? I have. It took me three weeks to choose the music.
:12:48. > :12:52.It was the most difficult decision in my life. What was the most
:12:53. > :12:57.embarrassing thing you chose? I didn't choose anything embarrassing.
:12:58. > :13:10.I chose Beethoven, Elgar, and some proper modern jazz. Anything from
:13:11. > :13:15.the modern era? Pet Shop Boys. That's all for today. The Daily
:13:16. > :13:18.Politics will be on BBC Two at lunchtime every day next week, and
:13:19. > :13:21.we'll be back here on BBC One at 11am next week. My luxury, by the
:13:22. > :13:22.way, was a wind-up radio! Remember, if it's Sunday, it's the Sunday
:13:23. > :13:30.Politics.