24/11/2013 Sunday Politics West Midlands

Morning, folks. Welcome to the Sunday Politics.

Labour's been hit hard by scandals at the Co-op. Ed Miliband says the

Tories are mudslinging. We'll speak to Conservative Chairman Grant

Shapps. Five years on from the financial

crisis, and we're still talking about banks in trouble. Why haven't

the regulators got the message? We'll ask the man who runs the

City's new financial watchdog. And he used to have a windmill on

his roof and talked about giving hugs to hoodies and huskies. These

days, not so much. Has the plan to make

And in the Midlands: Will easier immigration rules in the New Year

trigger a huge surge in Bulgarian and Romanian migrants? Or is this

just so much warned that benefit falls will be to

homelessness and population ships. What is the evidence?

And as always, the political panel that reaches the parts other shows

can only dream of. Janan Ganesh, Helen Lewis and Nick Watt. They'll

be tweeting faster than England loses wickets to Australia. Yes,

they're really that fast. First, some big news overnight from

Geneva, where Iran has agreed to curb some of its nuclear activities

in return for the partial easing of sanctions. Iran will pause the

enrichment of uranium to weapons grade and America will free up some

funds for Iran to spend. May be up to $10 billion. A more comprehensive

deal is supposed to be done in six months. Here's what President Obama

had to say about this interim agreement. We have pursued intensive

diplomacy, bilaterally with the Iranians, and together with our

partners, the United Kingdom, France, Germany, Russia and China,

as well as the European Union. Today, that diplomacy opened up a

new path towards a world that is more secure, a future in which we

can verify that Iraq and's nuclear programme is peaceful, and that it

cannot build a nuclear weapon. President Obama spoke from the White

House last night. Now the difficulty begins. This is meant to lead to a

full-scale agreement which will effectively end all sanctions, and

end Iran's ability to have a bomb. The early signs are pretty good. The

Iranian currency strengthened overnight, which is exactly what the

Iranians wanted. Inflation in Iraq is 40%, so they need a stronger

currency. -- information in Iran. France has played a blinder. It was

there intransigence that led to this. Otherwise, I think the West

would have led to a much softer deal. The question now becomes

implementation. Here, everything hinges on two questions. First, who

is Hassan Rouhani? Is he the Iranians Gorbachev, a serious

reformer, or he's here much more tactical and cynical figure? Or,

within Iran, how powerful is he? There are military men and

intelligence officials within Iran who may stymie the process. The

Western media concentrate on the fact that Mr Netanyahu and the

Israelis are not happy about this. They don't often mention that the

Arab Gulf states are also very apprehensive about this deal. I read

this morning that the enemies of Qatar and Kuwait went to Saudi king.

-- the MAs row. That is the key thing to watch in the next couple of

weeks. There was a response from Saudi Arabia, but it came from the

Prime Minister of Israel, who said this was a historic mistake. The

United States said there would be no enrichment of uranium to weapons

grade. In the last few minutes, the Iranian Foreign Minister has tweeted

to say that there is an inalienable right -- right to enrich. The key

thing is the most important thing that President Obama said in his

inaugural speech. He reached out to Iran. It failed under President

McKenna jab. Under President Rouhani, there seems to be progress.

There is potentially now what he talked about in that first inaugural

address potentially coming through. In the end, the key issue - and we

don't know the answer - is the supreme leader, not the president.

Will the supreme leader agreed to Iran giving up its ability to create

nuclear weapons? This is the huge ambiguity. Ayatollah Khamenei

authorise the position that President Rouhani took to Geneva.

That doesn't mean he will sign off on every bit of implementation over

the next six months. Even when President Ahmadinejad was president,

he wasn't really President. We in the West have to resort to a kind of

Iranians version of the study of the Kremlin, to work out what is going

on. And the problem the president faces is that if there is any

sign... He can unlock these funds by executive order at the moment, but

if he needs any more, he has to go to Congress. Both the Democrat and

the Republican side have huge scepticism about this. And he has

very low credibility now. There's already been angry noises coming

from quite a lot of senators. It was quite strange to see that photo of

John Kerry hugging Cathy Ashton as if they had survived a ship great

together. John Kerry is clearly feeling very happy. We will keep an

eye on this. It is a fascinating development.

More lurid details about the personal life of the Co-op Bank's

disgraced former chairman, the Reverend Paul Flowers. The links

between Labour, the bank and the wider Co-op movement have caused big

problems for Ed Miliband this week, and the Conservatives have been

revelling in it. But do the Tory allegations - Ed Miliband calls them

"smears" - stack up? Party Chairman Grant Shapps joins us from Hatfield.

Welcome to the programme. When it comes to the Co-op, what are you

accusing Labour of knowing and when? I think the simple thing to say here

is that the Co-op is an important bank. They have obviously got into

difficulty with Reverend flowers, and our primary concern is making

sure that that is properly investigated, and that we understand

what happened at the bank and how somebody like Paul Flowers could

have ended up thing appointed chairman. You wrote to edge Miliband

on Tuesday and asked him what he knew and when. -- you wrote to Ed

Miliband. But by Prime Minister's Questions on Wednesday, David

Cameron claims that you knew that Labour knew about his past all

along. What is the evidence for that? We found out by Wednesday that

he had been a Labour councillor, Reverend Flowers, and had been made

to stand down. Certainly, Labour knew about that, but somehow didn't

seem to think that that made him less appropriate to be the chairman

of the Co-op bank. There was no evidence that Mr Miliband or Mr

Balls knew about that. I ask you again, what are you accusing the

Labour leadership of knowing? We know now that he stood down for very

inappropriate images on his computer, apparently. You are

telling me that they didn't know. I am not sure that is clear at all. I

have heard conflicting reports. There is a much bigger argument

about what they knew and when. There was a much bigger issue here. This

morning, Ed Miliband has said that they don't have to answer these

questions and that these smears. This is ludicrous. These are

important questions about an important bank, how it ended up

getting into this position, and how a disastrous Britannia -- Italia

deal happen. -- Britannia deal happened. And we need to know how

the bank came off the rails. To be accused of smears for asking the

questions is ridiculous. I am just trying to find out what you are

accusing Labour of. You saying that the Labour leadership knew about the

drug-taking? Sorry, there was some noise here. I don't know what was

known and when. We do know that Labour, the party, certainly knew

about these very difficult circumstances in which he resigned

as a councillor. I think that the Labour Party knew about it. We knew

that Bradford did, but not London. Are you saying that Ed Miliband knew

about the inappropriate material on the Reverend's laptop? It is

certainly the case that Labour knew about it. But did Mr Miliband know

about it, and his predilection for rent boys? He will need to answer

those questions. It is quite proper to ask those questions. Surely,

asking a perfectly legitimate set of questions, not just about that but

about how we have ended up in a situation where this bank has made

loans to Labour for millions of pounds, that bank and the Unite

bank, who is connected to it. And how they made a ?50,000 donation to

Ed Balls' office. Ed Balls says that was nothing to do with Reverend

Flowers, and yet Reverend Flowers said that he personally signed that

off. Lots of questions to answer. David Cameron has already answered

them on Wednesday. He said that you now know that Labour knew about his

past all along. You have not been able to present evidence that

involve Mr Miliband or Mr Balls in that. So until you get that, surely

you should apologise? Hang on. He said that Labour knew about this,

and they did, because he stood down as a councillor. If Ed Miliband

didn't know about that, then why not? This was quite a serious thing

that happened. The wider point is about why it is that when you ask

perfectly legitimate questions about this bank, about the Britannia deal,

and about the background of Mr flowers, why is the response, it is

all smears? There are questions about how Labour failed to deal with

the deficit and how it hasn't done anything to support the welfare

changes, but there is nothing about that. Let us -- lets: To the wider

picture of the Co-operative Bank. Labour wanted the Co-op to take over

the Britannia Building Society, and it was a disaster. Do you accept

that? The government of the day has to be a part of these discussions

for regulatory reason. The government in 2009 - Ed Balls was

very pleased... But you supported that decision. There was a later

deal, potentially, for the Co-op to buy those Lloyds branches. There was

a proper process and it didn't go through just recently. If there had

been a proper process back in 2009, would the Britannia deal have gone

through? First, you accept that the Tories were in favour of the

Britannia take over. Then your Chancellor Osborne went out of his

way to facilitate the purchase of the Lloyds branches, even though you

had no idea that the Co-op had the management expertise to become a

super medium. Correct? The difference is that that deal didn't

go through. There was a proper process that took place. Let's look

at the process. There was long indications as far back as January

2012 that the Co-op, as a direct result of the Britannia take over

which you will party supported, was unfit to acquire the Lloyds

branches. By January 2012, the Chancellor and the Treasury ignored

the warnings. Wide? In 2009, there was political pressure for the

Britannia to be brought together. Based on the information available,

this was supported, but that process ended up with a very, very

problematic takeover of the Britannia. Wind forward to this

year, and when the same types of issues were being looked at for the

purchase of the Lloyds deal, the proper process was followed, this

time with us in government, and that purchase didn't go through. It is

important that the proper process is followed, and when it was, it

transpired that the deal wasn't going to be done. But it was the

Treasury and the Chancellor who were the cheerleaders for the acquisition

of the Lloyds branches. But there was a warning that the Co-op did not

have enough capital on its balance sheet to make those acquisitions,

but instead of heeding those warnings, your people went to

Brussels to lobby for the requirements to be relaxed - why on

earth did you do that? Our Chancellor went to argue for all of

Rajesh banking, not specifically for the Co-op. He was arguing for the

mutuals to be given a special ruling. The idea was to make sure

that every bank in Britain could have a better deal, particularly the

mutuals, as you say. That is a proper thing for the Chancellor to

be doing. We could go round in circles here, but in the end, there

was not a takeover of the Lloyds branches, that is because we

followed a proper process. Had that same rigorous process been followed

in 2009, the legitimate question to ask is whether the Co-op would have

been -- would have taken over the Britannia. That is a proper question

to ask. It is no good to have the leader of the opposition say, as

soon as you ask any of these questions about anything where there

is a problem for them, they come back with, oh, this is all smears.

There are questions to ask about what the Labour government did, the

debt and the deficit they left the country with, the way they stopped

work from paying in this country. The big question your government has

two answer is, why, by July 2012, when it was clear there was a black

hole in the Co-op's balance sheet, your government re-confirmed the

Co-op as the preferred bidder for Lloyds - why would you do that?

Well, look, the good thing is, we can discuss this until the cows come

home, but there is going to be a proper, full investigation, so we

will find out what happened, all the way back. So, we will be able to get

to the bottom of all of this. Grant Shapps, the only reason the Lloyds

deal did not go ahead was, despite the Treasury cheerleading, when

Lloyds began its due diligence, it found that there was indeed a huge

black hole in the balance sheet and that the Co-op was not fit to take

over its branches. That wasn't you, it wasn't the Government, it was not

the Chancellor, it was Lloyds. You were still cheerleading for the deal

to go ahead... Well, as I say, a proper process was followed, which

did not result in the purchase of the Lloyds branches. At that proper

process been followed with the purchase of the Britannia, under the

previous government... Which you supported. Yes, but it may well be

that under that previous deal, there was a excess political pressure

perhaps put on in order to create that merger, which proved so

disastrous. The Tories facilitated it, Grant Shapps, they allowed it to

go ahead. I have said, we are going to have a proper, independent

review. What I cannot understand is, when you announce a robber,

independent review, the response you get to these serious questions. The

response is, oh, this is a smear. It is crazy. We are trying to answer

the big questions for this country. We have done all of that, and we are

out of time. The Reverend Flowers' chairmanship of the Co-op bank was

approved by the regulator at the time, which no longer exists. It was

swept away by the coalition government in a supposed revolution

in regulation. But will its replacement, the Financial Conduct

Authority, be different? Adam has been to find out. Come with me for a

spin around the Square mile to find out how we regulate our financial

sector, which is almost five times bigger than the country's entire

annual income. First, let's pick up our guide, journalist Iain Martin,

who has just written a book about what went so wrong during the

financial crisis. The FSA was an agency which was established to

supervise the banks on a day-to-day basis. The Bank of England was

supposed to have overall responsible at for this to Bolivia the financial

system and the Treasury was supposed to take an interest in all of these

things. The disaster was that it was not anyone's call responsibility, or

main day job, to stay alert as to whether or not the banking system as

a whole was being run in a safe manner. And so this April, a new

system was set up to police the City. Most of the responsibly delays

here, with the Bank of England, and its new Prudential Regulation

Authority. And the Financial Services Authority has been replaced

with the new Financial Conduct Authority. Can we go to the

financial conduct authority, please? Canary Wharf, thank you. Here, it is

all about whether the people in financial services are playing by

the rules, in particular, how they treat their customers. This place

has got new powers, like the ability to ban products it does not like, a

new mandate to promote competition in the market, the concept being,

more competition means a better market, plus the idea that a new

organisation rings a whole new culture. Although these are the old

offices of the FSA, so maybe not quite so new after all. It has also

inherited the case of the Co-op bank and its disgraced former chairman

the Reverend Paul Flowers. The SCA will be part of the investigation

into what happened, which will probably involve looking at its own

conduct. One member of the Parliamentary commission into

banking wonders whether the new regulator, and its new boss, are up

to it. I have always said, it is not the architecture which is the issue,

it is the powers that the regulator has, and today, it does not seem to

me as if there is any increase in that. And with the unfolding scandal

at the Co-op, it feels like the new architecture for regulating the City

is now facing its first big test. And the chief executive of the

Financial Conduct Authority, the SCA, Martin Wheatley, joins me now.

Welcome to The Sunday Politics. The failure of bank regulation was one

of the clearest lessons of the crash in 2008, and yet two years later, in

2010, Paul Flowers is allowed to become chairman of the Co-op - why

have we still not got the regulation right? We have made a lot of changes

since then. We have created a new regulator, as you know. At the time,

we still had a process which allowed somebody to be appointed to a bank

and they would go through a challenge, but in the case of Paul

Flowers, there was no need for an additional challenge when he was

appointed to chairman, because he was already on the board. But going

from being on the board to becoming chairman, that is a big jump, and he

only had one interview? That is why today, it would be different. But

the truth is, that was the system at the time, the system which the FSA

operated. He was challenged, we did challenge him, and we said, you do

not have the right experience, but at the time, we would not have

opposed the appointment. What we needed was additional representation

of the board of people who did have banking experience. You can say that

that was then and this is now, but up until April of this year, it was

still the plan for the Co-op, under Mr Flowers, and despite being

seriously wounded by the Britannia takeover, to take on 632 Lloyds

branches. That was the Co-op's plan. They needed to pass our test

as to whether we thought they were fit to do that, and frankly, they

never passed that test. It was not the regulator that stopped them? It

was. We were constantly pushing back, saying, you have not got the

capital, you have no got the systems, and ultimately, they

withdrew, when they could not answer our questions. You were asking the

right questions, I accept that, but all of the time, the politicians on

all sides, they were pushing for it to happen, and I cannot find

anywhere where the regulator said, look, this is just not going to

happen. I cannot comment on what the politicians were doing, but I

continue what we were doing, which was constantly asking the Co-op,

have you got the systems in place, have you got the people, have you

got the capital? And they didn't. But it only came to a head when

Lloyds started its own due diligence on the bank, and they discovered

that it was impossible for them to take over the branches, it was not

the regulator... In fairness, what we do is ask the questions, can you

do this deal? And we kept pushing back, and we never frankly got

delivered a business plan which we were happy to approve. Is the SCA

going to launch its own inquiry into what happened? -- the FCA. The

Chancellor has announced what will be a very broad inquiry. There are a

number of specifics which we will be able to look at, relating to events

over the last five years. Could there be a police investigation? I

think the police have already announced an investigation. I am

talking about into the handling of the bank. It depends. There might

be, if there is grim low activity, which we do not know yet. You worked

at the FS eight, didn't you? I did. Some of those people who were signed

off on the speedy promotion of Mr Flowers, are they now working

there? Yes, we have some. I came to join the Financial Services

Authority, to lead it into the creation of the new body, the SCA.

We had people who were challenging and they did the job. There was not

a requirement to approve the role as chairman. There was not even a

requirement to interview at that stage. What we did do was to require

that he was interviewed, and that the Co-op should get additional

experience. One of the people from the old organisation, who signed up

on the promotion of Mr Flowers to become chairman is now a

nonexecutive director of the Co-op, so how does that work? Welcome he

was a senior adviser to our organisation, one of the people who

made the challenges, and who said, you need more experience on your

board. Subsequently he then went and joined the board. Surely that should

not be allowed, the regulator and the regulated should not be like

that. Well clearly, you need protection, but we have got to get

good people in, and frankly, we want the industry to have good people in

the industry, so there will be some movement between the regulator and

industry. We all wonder whether you have the power or even the

confidence to stand up if you look at all of the really bad bank

decisions recently, politicians were behind them. It was Gordon Brown who

pushed the disastrous merger of Lloyds and RBS. It was Alex Salmond

who egged on RBS to buy the world. All three main parties wanted the

Co-op to buy Britannia, even though they did not know the debt it would

inherit, and all three wanted the Co-op to buy the Lloyds branches -

how do you as a regulator stand up to that little concert party? Well,

that political pressure exists, our job at the end of the day is to do a

relatively technical job and say, does it stack up? And it didn't, and

we made that point time and time again to the Co-op board. They did

not have a business case that we could approve. The bodies on left

and right -- the politicians on left and right gave the Co-op special

support. They may have done, but that was not you have made a warning

about these payday lenders, but I think what most people would like to

see is a limit put on the interest they can charge over a period of

time - will you do that? We have got a whole set of powers for payday

lenders. We will bring in some changes from April next year, and we

will bring in further changes as we see necessary. Will you put a limit

on the interest they can charge? That is something we can study. You

do not sound too keen on it? Well, there are a lot of changes we need

to make. One change is limiting rollovers, limiting the use of

continuous payment authorities. Simply jumping to one trigger would

be a mistake. Finally, an issue which I think is becoming a growing

concern, because the Government is thinking of subsidising them, 95%

mortgages are back - should we not be worried about that? I think we

should if the market has the same experiences that we had back in 2007

- oh wait. We are bringing a comprehensive package in under our

mortgage market review, which will change how people lend and will put

affordability back at the heart of lending decisions. -- 2007-08. You

have not had your first big challenge yet, have you? We have

many challenges. It was once called the battle of the

mods and the rockers - the fight between David Cameron-style

modernisers and old-style traditional Tories for the direction

and soul of the Conservative Party. But have the mods given up on

changing the brand? When David Cameron took over in 2005, he

promoted himself as a new Tory leader. He said that hoodies need

more love. He was talking about something called the big society. He

told his party conference that it was time to that sunshine win the

day. There was new emphasis on the environment, and an eye-catching

trip to a Norwegian glacier to see first-hand, supposedly, the effects

of global warming. This week, party modernise and Nick bone has said

that the party is still seen as an old-fashioned monolith and hasn't

done enough to improve its appeal. The Tories have put some reforms

into practice, such as gay marriage, but they have put more into welfare

reform band compassionate conservatism. David Cameron wants

talked about leading the greenest government ever. Downing Street says

that the quote in the Son is not recognised, get rid of the green

crap. At this point in the programme we were expecting to hear from the

Energy and Climate Change Minister, Greg Barker. Unfortunately, he has

pulled out, with Downing Street saying it's for ""family reasons"".

Make of that what you will. However, we won't be deterred. We're still

doing the story, and we're joined by our very own mod and rocker - David

Skelton of the think-tank Renewal, and Conservative MP Peter Bone.

Welcome to you both. I'm glad your family is allowed you to come? David

Skelton, getting rid of all the green crap, or words to that effect,

that David Cameron has been saying. It is just a sign that Tory

modernisation has been quietly buried. I do think that's right.

Modernisation is about reaching out to the voters, and the work to do

that is now more relevant than ever. We got the biggest swing since 1931,

and the thing is we need to do more to reach out to voters in the North.

We need to reach out to non-white voters, and show that the concerns

of modern Britain and the concerns of ordinary people is something that

we share. And what way will racking up electricity bills with green

levies get you more votes in the North of England? We have to look at

ways to reduce energy bills. The renewable energy directive doesn't

do anything to help cut our emissions, but does decrease energy

bills by ?45 a year. We should renegotiate that. That is a part of

modernisation and doing what ordinarily people want. And old

dinosaurs like you are just holding this modernisation process back? I

am very appreciative of covering on this programme. The Tory party has

been reforming itself for more than 150 years. This idea of modern eyes

a is just some invention. We are changing all the time. I'm nice and

cuddly! So you are happy that the party made gay marriage almost a

kind of symbol of its modernisation? Fine Mac the gay marriage was a free

vote. David Cameron was recorded as a rebel there because more Tories

voted against his position than ever before. It was said that this was a

split between the old and young, but it actually was a split between

those who were religious and nonreligious. It is a

misinterpretation of what happened. Is a modernisation in retreat? I

think modernisation is an invention. Seven years ago, in my

part of the world, we got three councillors elected, two were 80 and

one was 21. A few months ago, a 25-year-old was chosen to fight

Corby for the Conservative Party. He came from a comprehensive School. He

was one of the youngest. The Tory party is moving on. So you found

three young people? Hang on a minute. You can't get away with

that. Three in one batch. Does modernisation exist? Modernisation

is about watering our appeal and sharing our values are relevant to

voters who haven't really thought about voting for us for decades now.

Modernisation is about more than windmills and stuff, it is about

boosting the life chances of the poorest, it is about putting better

schools in poorer areas. It is also saying that modernisation and the

Tory party... When has the Tory party been against making poorer

people better off? Or against better schools? Do you think Mrs Thatcher

was a moderniser when she won all those elections? The problem we have

at the moment is that UKIP has grown-up. If we could get all of

those people who vote UKIP to vote for us, we would get 47% of the

vote. We don't need to worry about voters on the left. We need to worry

about the voters in the north, those people who haven't voted for us for

decades. Having an EU Referendum Bill is going to get people to

vote. We have to reach out to voters, but not by some sort of

London based in need. You have to broaden your base. I agree with you

on that. We have to broaden our appeal, but this back to the future

concept is not going to work. We need something that generally

appeals to low and middle-income voters, and something that shows we

genuinely care about the life chances of the poorest. Do you think

that the people who vote UKIP don't support those aspirations? We are

not doing enough to cut immigration. We don't have an EU Referendum Bill

stop we have to get the centre right to vote for us again. Do that, and

we have it. Tom Pursglove, the 25 euros, will be returned in Corby

because we cannot win an election there. -- the 25-year-old. Whether

you are moderniser or traditionalist, people, particularly

in the North, see you as a bunch of rich men. And rich southerners. You

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

building on lifting the poorest out of the tax. We need to build more

houses. There is a perception that the leadership at the moment is

rich, and public school educated. What we have to do is get more

people from state education into the top. You are going the other way at

the moment. That is a fair criticism. Modernisers also say

that. I went to a combo hedge of school as well. -- do a

comprehensive school. We need to show that we are standing up for low

income. Thank Q, both of you. You are watching the Sunday Politics.

Coming up in just under Hello once again from the Midlands.

I'm Patrick Burns. With us today, an MP who grew up on a farm. And an MEP

who is a farmer himself. Birmingham Edgbaston's Gisela Stuart is a

milkmaid no longer. She's the only Labour MP to say she thinks Britain

will inevitably leave the EU ` or rather, it will leave us. While the

Liberal Democrat MEP, farmer Phil Bennion, is determined to defend our

place in the EU, along with his seat in its Parliament in next year's

elections. Welcome to you both. And while the two biggest parties

agonise over a referendum that could eventually lead us out of the EU,

the Liberal Democrats "accentuate the positives" of staying in. Phil

Bennion is trumpeting the ?765 million worth of regional

development and social funding coming our way in the six years to

2020. Coventry's Transport Museum receives ?7.7 million for its

refurbishment and development programme. Prince Charles will be

celebrating because Burslem in North Staffordshire gets ?1 million to

turn the listed Middleport Pottery into work space units for new

businesses, and a visitor centre. And for West Bromwich there is life

after The Public: ?4 million for the town centre regeneration scheme. You

have been celebrating this, Phil but when you have view `` UK

Independence Party representation here, they say that there is not

getting enough here, they say that there is not

back, the net contribution is smaller and we also get a lot of

agricultural money back. Overall, we only pay in around ?4 million a

year... Sorry, 4 billion. We do not know what it is regionally. There is

no break down of those statistics. It is very compact to find out. As a

region we do very well into the drawing down the money. The Treasury

is in charge so it depends where the tax comes from. The budget is being

cut for this? There is a smaller budget for the European union as a

whole, 6% smaller for the period but the West Midlands is drawing down in

social and structural funds considerably more. We are getting

seven in city 5 million `` 765 million compared to 760 million. We

have done very well. It sounds like lots of money that we

are missing out if we come out of Europe? My stance is not that we

should come out, it is that we should not contemplate joining a

single currency and Britain will find it hard to be part of this

union. But with that of the European funding, I would be churlish to be

not glad that we are not getting a significant amount of money. But we

had regional development agencies and labour which co`ordinated across

the whole region is how these funds would be invested. Now we have got a

fragmentation of local enterprise boards and beget buckets here and

there but over a structured... But they say it is more targeted and

efficient. If you look at things like overall transport and

regeneration, that requires someone to hold the ring and say this is

what we need to do and this is how we will fill the pocket. So we may

have gained some money but we have lost strategic spending. For the

moment, thank you. Coming up: what price a duty of

candour in the Health Department? Jeremy Hunt says staff numbers in

hospital wards must be published monthly because of Stafford. But are

our politicians ever entirely open about the vital signs of the NHS

itself? And how will this issue play in our election hotspots over the

next 18 months? More on this in a few minutes.

Should we brace ourselves for an unprecedented influx of Eastern

European migrant workers? Or is the spectre of Bulgarians and Romanians

descending in their thousands on our famous crop`growing areas, just so

much political scaremongering and media hype? We'll know soon enough

what impact this will have on local jobs and services. The immigration

rules are to be eased in the New Year. So our Hereford and Worcester

political reporter Matthew Bone has been talking to the people most

directly affected. At the height of the picking season,

thousands of migrant workers come to Herefordshire to help bring in the

harvest. On Lower Hope Farm near Hereford, quick picking is critical

for a successful cherry harvest. They need to get the fruit off the

trees, before temperatures drop. On a cold morning in November, those

busy days seem a long time ago, and only a few workers remain. One of

them is Koko. He was born in Bulgaria and has been on Lower Hope

Farm for more than a decade. He's now employed all year round as the

shift manager. Well, straightaway I socialised with people. I've been

playing football for the local village. The guys accepted me quite

well, it was quite fun for them as well to have an international player

there, you know, we had a great time with the boys. Everything has

changed for me and when I go home, sometimes a feel like a stranger

sometimes. Most of the Eastern European workers who picked this

field clean this year came through what's called the Seasonal

Agricultural Workers Scheme. The farm used a company to hire staff

from Eastern Europe, they were flown over for a few months, put up and

paid by the farm, then flown back once their term ended. This scheme

is being scrapped next year. Instead, the restrictions on workers

will be lifted, meaning Romanians and Bulgarians will be able to come

to Britain to do any job they choose and stay as long as they like. Down

the road in Marden it's a typical English village. There's the post

office, a church ` and a local Eastern European food store. And in

Hereford city centre, you can see signs of retailers catering to more

diverse tastes. But how do people in the city feel about it all? Well,

only probably that if they're working in low`paid jobs, they're

not getting the right rate. I know people that can't get jobs who are

British people and they can't get jobs. I mean, if they're letting

more people take jobs from here, what's going to happen in the end?

It sounds racist, doesn't it, but British people need somewhere to

live as well. And jobs, obviously. But some politicians are worried

about a sudden increase. The obvious increase is the extra pressure on

public services, on primary school places, on housing. And of course,

what it does is it plays into the hands of keeping wages low.

Around 3,800 seasonal migrant workers came to Herefordshire in

2012. 42% of them were from Bulgaria, 19% of them were from

Romania. For people like Koko, the opportunities for work in

Herefordshire have been too good to turn down. But how many more

migrants will follow him once the restrictions end? That is proving

very difficult to predict. All we know is nobody knows. Matthew

Bone reporting. And we're also joined here today by Alp Mehmet from

Migration Watch UK. They're campaigning for what they call the

"absolute need" to set a target on net migration, and stick to it. How

can that be done? There is no way we can legally say to people go home,

you're not wanted if you are members of the EU and the European Union,

Romanians and Bulgarians will be in that position. So should we be

bracing ourselves for an influx? You are using colourful words, these

numbers will certainly materialise, there will be between 30`70,000

additional migrants coming here from the 1st of January, we believe over

the five`year period. How does that compare with Polish immigration? I

don't Inc ministers know and they seem reluctant to say that Mike I

don't think ministers. If you compare living standards with what

happened `` to say, I don't think ministers. I have lived in Romania,

and Romanians are wonderful people. My concern is that no one ever gives

any thought to the numbers that are going to be coming in and the

consequences. Well, what are the consequences? The worry is that jobs

and services and things like education and the housing issue

which is already stretched as it is without the extra numbers to cater

for. Everybody is worried about the seasonal agricultural workers, they

will come, the farmers want them to come. But I suggest this gives us an

opportunity to attract the young people into the agricultural sector

that have been flying away from that particular sect the and perhaps pay

them a little more and I say that knowing that there are farmers in

the room. We could be paying a little more rather than relying on

cheap labour which is what often happens. Do farmers feel reliant on

cheap labour? Seasonal fruit pickers? I do not know what the

wages are that the farmers depend on them and the indigenous population

have not shown any inclination whatsoever to take the jobs so the

farmers... I know the farming union are very worried about losing this

scheme because these are seasonal workers, not workers that are here

all year round and it is not just Herefordshire, it is all over the

West Midlands. What do you say to the point in the report there that

this will add yet more to the race to the bottom of the lower end of

the wages scale? That it will put more pressure downwards on low`paid

jobs? It will not put pressure on low`paid people because effectively

we have a very strong minimum wage framework and that is likely as our

economy is now pulling up, to see an increase in the minimum wage. So

that is an unwarranted scare. The other point is that what we have

seen with migrant labour is that they are generally running a budget

surplus. That is the evidence we have from researchers, that they pay

more in taxes than they draw down in services and benefits. Gisela, what

do you make of this? Jack Straw admitted that Labour had got it

wrong a decade ago in terms of the absence of controls, where a wave of

new accession countries came in. With the seasonal workers, I think

much stronger in fermentation of the minimum wage and enforcing it is

really important. The thing which grieves me so much is that 40 years

ago, the common market compared to another was the thing that was meant

to unite Europe and the free movement of labour. What you see now

across the continent in Germany, France, elsewhere, the free movement

of labour is something which is causing the greatest political

discontent and that is a source of great sadness on my part. White

actor and it is driving the immigration issue ``.

It is driving up the immigration issue everywhere. We have had

380,000 new jobs created in the UK and 90% of those have gone to

British people. The fact is when people talk about the contribution

that immigrants make, of course nobody is saying that they don't. I

am an immigrant, I am a first generation immigrants. We talk about

limiting immigration and controlling it, we are talking about sensible

numbers, not running at the rate which is in no one's interests

including the immigrants coming here. What you make of an

observation in the comments if you days ago by David Willetts pointing

out what he called a suspiciously high number of applications from

students loans from Bulgarian and Romanian students? And three

quarters of them had not produced the qualifications and evidence they

needed to show where they were entitled to it's of course it will

happen, it does not take a genius to know that is the sort of thing that

will happen. Not because they are all corrupt in other countries but

because you give young people the opportunity to have access to

money, they will do it and that is what has happened. we hear that Mark

Prichard is supporting an amendment to the Immigration Bill going

through Parliament which would extend for a further five years this

seasonal agriculture workers scheme which would give us longer time to

think about it. It does not address the fundamental open. If you have

unlimited problem in 28 countries `` unlimited movement, you will have a

problem if you don't do anything about it. We will get a smaller

number of people coming, and as has been said, we don't know how many

people will come but one of the things we must remember is that the

economy is in a mania and Bulgaria are growing strongly, 5% per year ``

in Romania and Bulgaria. White Nine months after Robert Francis QC

delivered his Stafford Hospital report, came the Government's formal

response. Jeremy Hunt enshrined the "duty of

candour", recommended by Francis, with staffing numbers on the wards

to be published monthly, to 'build trust in the NHS': but no guaranteed

minimum staffing levels. So is there still a question of trust in the

politicians responsible for it all? Especially in those key marginal

seats which happen to be in the front`line of hospital

reorganisation plans. Safer hospitals, more staff, better

training, better care. The message from the Health Secretary was clear

as he announced his proposals for an improved NHS following the Stafford

Hospital scandal. Cruelty became normal in our NHS and nobody

noticed. But after Mid`Staffs, the NHS has listened and learned and the

NHS will not rest until it is delivering the safest, most

effective and most compassionate care anywhere in the world. Stafford

became a byeword for shockingly poor treatment, neglected patients died

early, an NHS hospital that apparently didn't care. A hospital

now trying to rebuild its reputation. A culture of so care for

all in the NHS must be a legacy of the Francis enquiry, it is the least

that those who suffered from neglect and their loved ones who campaign

for justice deserve. Mr Hunt's shadow raised a current issue about

staffing a concerns mount that hospital staff levels are falling

not rising. But isn't it the case that nurse patient ratios have got

significantly worse in the last three years with 5890 fewer nurses,

more older patients in hospital and bed occupancy running at record

levels? The fall`out from Mid Staffordshire, hospital

reorganisations in Shropshire and Worcestershire and concerns about

patient waiting times have once again pushed the NHS up the

political agenda. For voters in places like Stafford, Redditch,

Worcester and Telford the state of our hospitals could yet prove to be

THE decisive issue in 2015's general election.

It's happened before, in Wyre Forest of course, where the former

independent MP Richard Taylor is to stand again, this time for the new

National Health Action Party. Gisela, you are a former health

minister. Whatever is said in Parliament and whatever the good

intentions of all parties, isn't it true that the sheer pressure of

numbers, the caring for an ageing population, there is a danger for

another Mid`Staffs? I have got a real sense we have been there

before, around 1999 when Tony Blair announced that we would

fundamentally increase the spending of the NHS and with that expand the

number of nurses and doctors. We have now got a promise of increasing

care of something like losing 6000 nurses in the next few years.

Quality can care commission `` the quality care commission giving other

impressions, I have not got any covenants that this will be

delivered. How will this play in the election when you think about this

coincidence, this like Redditch, Stafford itself, Worcester, Telford,

these are places with the National health action party due to

intervene, potentially a decisive action? It will be critical because

people who have first`hand experience of the NHS, we will see

these configurations which are not stable and if you do not have

nurses, we will see whether ministerial words add up to actions

and I am worried that particularly this winter, we will see something

which I thought we had seen the back of. Phil, you live in Staffordshire,

use all the Minister there fighting the cause for hospital services in

his area, James Lefroy. It is inevitable that every local MP will

stand up for the full set of services they have got, no change.

Giving you have this wider constituency for the whole West

Midlands, is it an argument that is getting lost by constituency MPs?

That is always happening but in this case, the fact that Stafford

Hospital has had the operational problems and then financial problems

does not remove the need for a hospital in Stafford. The need for

that hospital to be there with the services that it has has not changed

due to the problems so we have to put them right and Stafford hospital

has to continue. Now we have got NHS England which appears to be

responsible for everything and nothing so we haven't even got a

structure which allows as to say these are the services we need to

move, it is fragmentation and that is bad. Thank you again.

Now for our regular round`up of the political week in the Midlands in 60

seconds, with our mid`morning presenter on BBC WM 95.6, Adrian

Goldberg. West Midlands MEP Nikki Sinclaire

says she's been overwhelmed with support after revealing she became a

woman at the age of 23 after a sex change.

Labour's Joan Walley is stepping down at the next election. The MP

says it's time to hang up her boots after serving the people of Stoke

North since 1987. Construction workers protested in

Birmingham calling for a public inquiry into blacklisting. They say

building firms used the lists to deny work to people. It is an

abomination, a national scandal, a disgrace.

Campaigners renewed calls for the 1974 Birmingham pub bombings to be

reinvestigated after winning the support of Paddy Hill, one of the

men wrongly convicted of the attacks which claimed 21 lives.

And Director`General Tony Hall announced that BBC Birmingham is to

become a training, apprenticeship and digital innovation centre

bringing 80 jobs to the city. This after some intensive political

lobbying in which Gisela was a prime`mover. I you satisfied with

what you have heard from the director`general's not yet. It is a

great start. Getting these jobs and some of these are relocations from

other places. I will not rest until they bring more production to

Birmingham. The drama village will be extended. I want more programmes

produced here because that when the West Midlands back to the heart of

broadcasting which so far we have lost. I saw Phil nodding. I entirely

agree, we have lost too much of the national picture from Birmingham

with pebble Mill... That will not be rebuilt. No, but we have got

something good coming back. We have lost out in the national picture

deviously and I think it is something we can start to rebuild ``

national picture obviously. This emphasis on the cultural diversity

with the city which seems to chime with you. Tony Hall does understand

and he is caught between a rock and a hard place with other things going

on so that is why anything new coming to the table must come to

Birmingham. My thanks to Gisela and Phil. Coming up tomorrow, a mass

lobby of Parliament by opponents of HS2. They'll be descending on

Westminster by the coachload. We'll be following developments throughout

the day on BBC Coventry and Warwickshire, and on BBC WM. Now

back to Andrew Neil. I wonder if they will be any

those people who want to cycle. We will be returning to this one. Thank

you. A little bit of history was made at

Prime Minister's Questions this week. A teensy tiny bit. It wasn't

David Cameron accusing one MP of taking "mind-altering substances" -

they're always accusing each other of doing that. No, it was the first

time a Prime Minister used a live tweet sent from someone watching the

session as ammunition at the dispatch box. Let's have a look. We

have had some interesting interventions from front edges past

and present. I hope I can break records by explaining that a tweet

has just come in from Tony McNulty, the former Labour security

minister, saying that the public are desperate for a PM in waiting who

speaks for them, not a Leader of the Opposition in dodging in partisan

Westminster Village knock about. So I would stay up with the tweets if

you want to get on the right side of this one! We are working on how the

Prime Minister managed to get that wheat in the first place. What did

you think when you saw it being read out? I was certainly watching the

Daily Politics. I almost fell off my chair! It was quite astonishing. He

didn't answer the question - he didn't do that the whole time. But I

stand by what the tweets said. I have tweeted for a long time on

PMQs. Normally I am praising Ed Miliband to the hilt, but no one

announces that in Parliament! Because the Prime Minister picked up

on what you said, it unleashed some attacks on you from the Labour side.

It did, minor attacks from some very junior people. Most people were

supportive of what I said. They took issue with the notion of not doing

it until 12:30pm, when it wasn't available for the other side to use.

Instant history, and instantly forgettable, I would say. Do you

think you have started a bit of a trend? I hope not, because the

dumbing down of PMQs is already on its way. Most people tweet like mad

through PMQs! Is a measure of how post-modern we have become, we have

journalists tweeting about someone talking about a tweet. That is the

level of British politics. I am horrified by this development. The

whole of modern life has become about observing people -- people

observing themselves doing things. Do we know what happened? Somebody

is monitoring the tweets on behalf of the Prime Minister or the Tory

party. They see Tony's tweet. They then print it out and give it to

him? There was a suggestion that Michael Goves had spotted it, but

Craig Oliver from the BBC had this great sort of... Craig Oliver was

holding up his iPad to take pictures of the Prime Minister, which he then

tweeted, from the Prime Minister. People will now be tweeting in the

hope that they will be quoted by the Prime Minister, or the Leader of the

Opposition. I wasn't doing that. I'm just talking about the monster you

have unleashed! I hope it dies a miserable death. I think Tony is a

good analysis -- a good analyst of PMQs on Twitter. Moving onto the

Co-op. You were a Co-op-backed MP, white you? I was a Co-op party

member. There are two issues here about the Co-op and the Labour

Party. All the new music suggests that the Co-op will now have to

start pulling back from lending or donating to the Labour Party, which,

at a time when Mr Miliband is going through changes that are going to

cut of the union funds, it seems quite dangerous. There are three

things going on. There's the relationship that the party has

politically with the Co-op party, there is the commercial relationship

you referred to, and then there is this enquiry into the comings and

goings of Flowers and everybody else. The Tories, at their peril,

will mix the three up. There's a lot of things going on with a bang.

Labour has some issues around funding generally, and they are

potentially exacerbated by the Co-op issue. The Labour Party gets soft

loans from the Co-op bank, and it gets donations. ?800,000 last year.

Ed Balls got about ?50,000 for his private office. You get the feeling,

given the state of the Co-operative Bank now, that that money could dry

up. We will see. There's lots of speculation in the papers today. At

the core, the relationship between the Co-op party and the Labour Party

is a proud one, and a legitimate one. I don't think others always

understand that. Here is an even bigger issue. Is it not possible

that the Co-op bank will cease to exist in any meaningful way as a

Co-op bank? Is the bane out means it is 70% owned -- the bail out means

that it is 70% owned, or 35% going to a hedge fund, I think I read.

Yes, there is a move from the mutualism of the Co-op. But don't

confuse the Co-op bank with the Co-op Group. Others have done that.

I haven't. Here's the rub. The soft loans that Labour gets. They got

?1.2 million from this. And 2.4 million. They are secured against

future union membership fees of the party. What is Mr Miliband doing? He

is trying to end that? You have this very difficult confluence of events,

which is, could these wonderful soft loans that Labour has had from the

Co-op, could they be going? And these union reforms, where Ed

Miliband is trying to create a link between individuals and donations to

the Labour Party... Clearly, there could be real financial difficulties

here. The government needs to be careful, because George Osborne

launched one of his classic blunderbuss operations this week,

which is that the Labour Party is to blame for Paul Flowers' private

life. No, it's not. And that all the problems, essentially... Look at

what George Osborne was doing in Europe. He was trying to change the

capital requirement rules that would make it easier for the Co-op to take

over Lloyd's. If there is to be a big investigation, George Osborne

needs to be careful of what he wishes for. This is another example

of the Westminster consensus. All of the Westminster parties were in

favour of the Britannia takeover. This is how the Co-op ended up with

all this toxic rubbish on its balance sheet. All the major parties

were in favour of going to get the Lloyds branches. The Tories tried to

outdo Labour in being more pro-Co-op. There was nobody in

Westminster saying, hold on, this doesn't work. It is like the

financial bubble all over again. Everyone was in favour of that at

the time. I think there is no evidence so far that the storm is

cutting through to the average voter. If I were Ed Miliband, I

would let it die a natural death. I would not write to an editorial

column for a national newspaper on a Sunday. That keeps the issue alive,

and it makes him look oversensitive and much better at dishing it out

than taking it. I agree about that. The Labour press team tweeted this

week saying that it was a new low for the times. And this was

re-tweeted by Ed Miliband. It isn't a great press attitude. It is very

Moni. Bill Clinton went out there and fought and made the case. So did

Tony Blair. If you just say, they are being horrible to us, it looks

pathetic. And it will cut through on Osborne and the financial

dimensional is, not political. I shall tweet that later! While we

have been talking, Mr Miliband has been on Desert Island Discs. He

might still be on it. Let's have a listen to what he had to say.

# Take on me, take me on. # And threw it all, she offers me

protection. # A lot of love and affection.

# Whether I'm right or wrong #. # Je Ne Regrette Rien. #.

Obviously, that was the music that Ed Miliband chose. Who thought --

you would have thought he would choose Norman Lamont's theme tune!

He chose Jerusalem... He has no classical background at all. He had

no Beethoven, no Elgar. David Cameron had Mendelssohn. And Ernie,

the fastest Notman in the West. -- fastest milkman. Tony Blair chose

the theme tune to a movie. Tony Blair's list was chosen by young

staffers in his office. It absolutely was. Tony Blair's list

was chosen by staff. The Ed Miliband this was clearly chosen by himself,

because who would allow politician to go out there and say that they

like Aha. I am the same age as Ed Miliband, and of course he likes

Aha. That was the tumour was played in the 80s. Sweet Caroline. It is

Angels by Robbie Williams. I was 14-year-old girl when that came out.

I thought Angels was the staple of hen nights and chucking out time in

pubs. The really good thing about his list is that the Smiths to not

appear. The Smiths were all over David Cameron's list. The absolutely

miserable music of Morris he was not there. What was his luxury? And

Indian takeaway! Again, chosen for political reasons. I would agree

with the panel about Aha, but I would expect -- I would respect his

right to choose. Have you been on Desert Island Discs? I have. It took

me three weeks to choose the music. It was the most difficult decision

in my life. What was the most embarrassing thing you chose? I

didn't choose anything embarrassing. I chose Beethoven, Elgar, and some

proper modern jazz. Anything from the modern era? Pet Shop Boys.

That's all for today. The Daily Politics will be on BBC Two at

lunchtime every day next week, and we'll be back here on BBC One at

11am next week. My luxury, by the way, was a wind-up radio! Remember,

if it's Sunday, it's the Sunday Politics.