24/11/2013 Sunday Politics West


24/11/2013

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


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Morning, folks. Welcome to the Sunday Politics.

:00:36.:00:40.

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

:00:41.:00:44.

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

:00:45.:00:47.

Shapps. Five years on from the financial

:00:48.:00:50.

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

:00:51.:00:53.

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

:00:54.:00:58.

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

:00:59.:01:01.

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

:01:02.:01:06.

days, not so much. Has the plan to make the

:01:07.:01:15.

Is immigration really out of control? We meet Romanians working

:01:16.:01:18.

on farms in homelessness and population ships.

:01:19.:01:19.

What is the evidence? And as always, the political panel

:01:20.:01:30.

that reaches the parts other shows can only dream of. Janan Ganesh,

:01:31.:01:34.

Helen Lewis and Nick Watt. They'll be tweeting faster than England

:01:35.:01:37.

loses wickets to Australia. Yes, they're really that fast.

:01:38.:01:41.

First, some big news overnight from Geneva, where Iran has agreed to

:01:42.:01:44.

curb some of its nuclear activities in return for the partial easing of

:01:45.:01:48.

sanctions. Iran will pause the enrichment of uranium to weapons

:01:49.:01:52.

grade and America will free up some funds for Iran to spend. May be up

:01:53.:02:02.

to $10 billion. A more comprehensive deal is supposed to be done in six

:02:03.:02:05.

months. Here's what President Obama had to say about this interim

:02:06.:02:11.

agreement. We have pursued intensive diplomacy, bilaterally with the

:02:12.:02:17.

Iranians, and together with our partners, the United Kingdom,

:02:18.:02:22.

France, Germany, Russia and China, as well as the European Union.

:02:23.:02:27.

Today, that diplomacy opened up a new path towards a world that is

:02:28.:02:32.

more secure, a future in which we can verify that Iraq and's nuclear

:02:33.:02:37.

programme is peaceful, and that it cannot build a nuclear weapon.

:02:38.:02:44.

President Obama spoke from the White House last night. Now the difficulty

:02:45.:02:50.

begins. This is meant to lead to a full-scale agreement which will

:02:51.:02:53.

effectively end all sanctions, and end Iran's ability to have a bomb.

:02:54.:03:00.

The early signs are pretty good. The Iranian currency strengthened

:03:01.:03:05.

overnight, which is exactly what the Iranians wanted. Inflation in Iraq

:03:06.:03:10.

is 40%, so they need a stronger currency. -- information in Iran.

:03:11.:03:17.

France has played a blinder. It was there intransigence that led to

:03:18.:03:20.

this. Otherwise, I think the West would have led to a much softer

:03:21.:03:25.

deal. The question now becomes implementation. Here, everything

:03:26.:03:30.

hinges on two questions. First, who is Hassan Rouhani? Is he the

:03:31.:03:35.

Iranians Gorbachev, a serious reformer, or he's here much more

:03:36.:03:40.

tactical and cynical figure? Or, within Iran, how powerful is he?

:03:41.:03:47.

There are military men and intelligence officials within Iran

:03:48.:03:53.

who may stymie the process. The Western media concentrate on the

:03:54.:03:57.

fact that Mr Netanyahu and the Israelis are not happy about this.

:03:58.:04:00.

They don't often mention that the Arab Gulf states are also very

:04:01.:04:05.

apprehensive about this deal. I read this morning that the enemies of

:04:06.:04:14.

Qatar and Kuwait went to Saudi king. -- the MAs row. That is the key

:04:15.:04:22.

thing to watch in the next couple of weeks. There was a response from

:04:23.:04:27.

Saudi Arabia, but it came from the Prime Minister of Israel, who said

:04:28.:04:32.

this was a historic mistake. The United States said there would be no

:04:33.:04:36.

enrichment of uranium to weapons grade. In the last few minutes, the

:04:37.:04:40.

Iranian Foreign Minister has tweeted to say that there is an inalienable

:04:41.:04:49.

right -- right to enrich. The key thing is the most important thing

:04:50.:04:54.

that President Obama said in his inaugural speech. He reached out to

:04:55.:04:59.

Iran. It failed under President McKenna jab. Under President

:05:00.:05:06.

Rouhani, there seems to be progress. There is potentially now what he

:05:07.:05:11.

talked about in that first inaugural address potentially coming through.

:05:12.:05:16.

In the end, the key issue - and we don't know the answer - is the

:05:17.:05:21.

supreme leader, not the president. Will the supreme leader agreed to

:05:22.:05:25.

Iran giving up its ability to create nuclear weapons? This is the huge

:05:26.:05:32.

ambiguity. Ayatollah Khamenei authorise the position that

:05:33.:05:37.

President Rouhani took to Geneva. That doesn't mean he will sign off

:05:38.:05:40.

on every bit of implementation over the next six months. Even when

:05:41.:05:45.

President Ahmadinejad was president, he wasn't really President. We in

:05:46.:05:52.

the West have to resort to a kind of Iranians version of the study of the

:05:53.:05:57.

Kremlin, to work out what is going on. And the problem the president

:05:58.:06:08.

faces is that if there is any sign... He can unlock these funds by

:06:09.:06:14.

executive order at the moment, but if he needs any more, he has to go

:06:15.:06:19.

to Congress. Both the Democrat and the Republican side have huge

:06:20.:06:27.

scepticism about this. And he has very low credibility now. There's

:06:28.:06:30.

already been angry noises coming from quite a lot of senators. It was

:06:31.:06:36.

quite strange to see that photo of John Kerry hugging Cathy Ashton as

:06:37.:06:40.

if they had survived a ship great together. John Kerry is clearly

:06:41.:06:50.

feeling very happy. We will keep an eye on this. It is a fascinating

:06:51.:06:52.

development. More lurid details about the

:06:53.:06:55.

personal life of the Co-op Bank's disgraced former chairman, the

:06:56.:07:00.

Reverend Paul Flowers. The links between Labour, the bank and the

:07:01.:07:03.

wider Co-op movement have caused big problems for Ed Miliband this week,

:07:04.:07:06.

and the Conservatives have been revelling in it. But do the Tory

:07:07.:07:11.

allegations - Ed Miliband calls them "smears" - stack up? Party Chairman

:07:12.:07:19.

Grant Shapps joins us from Hatfield. Welcome to the programme. When it

:07:20.:07:27.

comes to the Co-op, what are you accusing Labour of knowing and when?

:07:28.:07:34.

I think the simple thing to say here is that the Co-op is an important

:07:35.:07:39.

bank. They have obviously got into difficulty with Reverend flowers,

:07:40.:07:44.

and our primary concern is making sure that that is properly

:07:45.:07:47.

investigated, and that we understand what happened at the bank and how

:07:48.:07:50.

somebody like Paul Flowers could have ended up thing appointed

:07:51.:07:56.

chairman. You wrote to edge Miliband on Tuesday and asked him what he

:07:57.:08:02.

knew and when. -- you wrote to Ed Miliband. But by Prime Minister's

:08:03.:08:05.

Questions on Wednesday, David Cameron claims that you knew that

:08:06.:08:12.

Labour knew about his past all along. What is the evidence for

:08:13.:08:17.

that? We found out by Wednesday that he had been a Labour councillor,

:08:18.:08:25.

Reverend Flowers, and had been made to stand down. Certainly, Labour

:08:26.:08:29.

knew about that, but somehow didn't seem to think that that made him

:08:30.:08:33.

less appropriate to be the chairman of the Co-op bank. There was no

:08:34.:08:38.

evidence that Mr Miliband or Mr Balls knew about that. I ask you

:08:39.:08:45.

again, what are you accusing the Labour leadership of knowing? We

:08:46.:08:55.

know now that he stood down for very inappropriate images on his

:08:56.:08:59.

computer, apparently. You are telling me that they didn't know. I

:09:00.:09:04.

am not sure that is clear at all. I have heard conflicting reports.

:09:05.:09:07.

There is a much bigger argument about what they knew and when. There

:09:08.:09:12.

was a much bigger issue here. This morning, Ed Miliband has said that

:09:13.:09:17.

they don't have to answer these questions and that these smears.

:09:18.:09:21.

This is ludicrous. These are important questions about an

:09:22.:09:25.

important bank, how it ended up getting into this position, and how

:09:26.:09:29.

a disastrous Britannia -- Italia deal happen. -- Britannia deal

:09:30.:09:36.

happened. And we need to know how the bank came off the rails. To be

:09:37.:09:42.

accused of smears for asking the questions is ridiculous. I am just

:09:43.:09:46.

trying to find out what you are accusing Labour of. You saying that

:09:47.:09:49.

the Labour leadership knew about the drug-taking? Sorry, there was some

:09:50.:10:01.

noise here. I don't know what was known and when. We do know that

:10:02.:10:06.

Labour, the party, certainly knew about these very difficult

:10:07.:10:09.

circumstances in which he resigned as a councillor. I think that the

:10:10.:10:15.

Labour Party knew about it. We knew that Bradford did, but not London.

:10:16.:10:20.

Are you saying that Ed Miliband knew about the inappropriate material on

:10:21.:10:25.

the Reverend's laptop? It is certainly the case that Labour knew

:10:26.:10:32.

about it. But did Mr Miliband know about it, and his predilection for

:10:33.:10:38.

rent boys? He will need to answer those questions. It is quite proper

:10:39.:10:43.

to ask those questions. Surely, asking a perfectly legitimate set of

:10:44.:10:47.

questions, not just about that but about how we have ended up in a

:10:48.:10:51.

situation where this bank has made loans to Labour for millions of

:10:52.:10:56.

pounds, that bank and the Unite bank, who is connected to it. And

:10:57.:11:03.

how they made a ?50,000 donation to Ed Balls' office. Ed Balls says that

:11:04.:11:07.

was nothing to do with Reverend Flowers, and yet Reverend Flowers

:11:08.:11:13.

said that he personally signed that off. Lots of questions to answer.

:11:14.:11:18.

David Cameron has already answered them on Wednesday. He said that you

:11:19.:11:24.

now know that Labour knew about his past all along. You have not been

:11:25.:11:28.

able to present evidence that involve Mr Miliband or Mr Balls in

:11:29.:11:32.

that. So until you get that, surely you should apologise? Hang on. He

:11:33.:11:38.

said that Labour knew about this, and they did, because he stood down

:11:39.:11:43.

as a councillor. If Ed Miliband didn't know about that, then why

:11:44.:11:48.

not? This was quite a serious thing that happened. The wider point is

:11:49.:11:53.

about why it is that when you ask perfectly legitimate questions about

:11:54.:11:56.

this bank, about the Britannia deal, and about the background of Mr

:11:57.:12:02.

flowers, why is the response, it is all smears? There are questions

:12:03.:12:10.

about how Labour failed to deal with the deficit and how it hasn't done

:12:11.:12:14.

anything to support the welfare changes, but there is nothing about

:12:15.:12:20.

that. Let us -- lets: To the wider picture of the Co-operative Bank.

:12:21.:12:29.

Labour wanted the Co-op to take over the Britannia Building Society, and

:12:30.:12:34.

it was a disaster. Do you accept that? The government of the day has

:12:35.:12:40.

to be a part of these discussions for regulatory reason. The

:12:41.:12:46.

government in 2009 - Ed Balls was very pleased... But you supported

:12:47.:12:54.

that decision. There was a later deal, potentially, for the Co-op to

:12:55.:12:59.

buy those Lloyds branches. There was a proper process and it didn't go

:13:00.:13:05.

through just recently. If there had been a proper process back in 2009,

:13:06.:13:09.

would the Britannia deal have gone through? First, you accept that the

:13:10.:13:16.

Tories were in favour of the Britannia take over. Then your

:13:17.:13:22.

Chancellor Osborne went out of his way to facilitate the purchase of

:13:23.:13:25.

the Lloyds branches, even though you had no idea that the Co-op had the

:13:26.:13:31.

management expertise to become a super medium. Correct? The

:13:32.:13:36.

difference is that that deal didn't go through. There was a proper

:13:37.:13:43.

process that took place. Let's look at the process. There was long

:13:44.:13:49.

indications as far back as January 2012 that the Co-op, as a direct

:13:50.:13:56.

result of the Britannia take over which you will party supported, was

:13:57.:14:00.

unfit to acquire the Lloyds branches. By January 2012, the

:14:01.:14:04.

Chancellor and the Treasury ignored the warnings. Wide? In 2009, there

:14:05.:14:11.

was political pressure for the Britannia to be brought together.

:14:12.:14:16.

Based on the information available, this was supported, but that process

:14:17.:14:19.

ended up with a very, very problematic takeover of the

:14:20.:14:23.

Britannia. Wind forward to this year, and when the same types of

:14:24.:14:28.

issues were being looked at for the purchase of the Lloyds deal, the

:14:29.:14:32.

proper process was followed, this time with us in government, and that

:14:33.:14:37.

purchase didn't go through. It is important that the proper process is

:14:38.:14:41.

followed, and when it was, it transpired that the deal wasn't

:14:42.:14:50.

going to be done. But it was the Treasury and the Chancellor who were

:14:51.:14:53.

the cheerleaders for the acquisition of the Lloyds branches. But there

:14:54.:14:59.

was a warning that the Co-op did not have enough capital on its balance

:15:00.:15:02.

sheet to make those acquisitions, but instead of heeding those

:15:03.:15:09.

warnings, your people went to Brussels to lobby for the

:15:10.:15:12.

requirements to be relaxed - why on earth did you do that? Our

:15:13.:15:17.

Chancellor went to argue for all of Rajesh banking, not specifically for

:15:18.:15:22.

the Co-op. He was arguing for the mutuals to be given a special

:15:23.:15:25.

ruling. The idea was to make sure that every bank in Britain could

:15:26.:15:31.

have a better deal, particularly the mutuals, as you say. That is a

:15:32.:15:35.

proper thing for the Chancellor to be doing. We could go round in

:15:36.:15:40.

circles here, but in the end, there was not a takeover of the Lloyds

:15:41.:15:43.

branches, that is because we followed a proper process. Had that

:15:44.:15:49.

same rigorous process been followed in 2009, the legitimate question to

:15:50.:15:53.

ask is whether the Co-op would have been -- would have taken over the

:15:54.:15:56.

Britannia. That is a proper question to ask. It is no good to have the

:15:57.:16:00.

leader of the opposition say, as soon as you ask any of these

:16:01.:16:04.

questions about anything where there is a problem for them, they come

:16:05.:16:09.

back with, oh, this is all smears. There are questions to ask about

:16:10.:16:12.

what the Labour government did, the debt and the deficit they left the

:16:13.:16:17.

country with, the way they stopped work from paying in this country.

:16:18.:16:21.

The big question your government has two answer is, why, by July 2012,

:16:22.:16:26.

when it was clear there was a black hole in the Co-op's balance sheet,

:16:27.:16:31.

your government re-confirmed the Co-op as the preferred bidder for

:16:32.:16:35.

Lloyds - why would you do that? Well, look, the good thing is, we

:16:36.:16:40.

can discuss this until the cows come home, but there is going to be a

:16:41.:16:44.

proper, full investigation, so we will find out what happened, all the

:16:45.:16:48.

way back. So, we will be able to get to the bottom of all of this. Grant

:16:49.:16:52.

Shapps, the only reason the Lloyds deal did not go ahead was, despite

:16:53.:16:56.

the Treasury cheerleading, when Lloyds began its due diligence, it

:16:57.:17:02.

found that there was indeed a huge black hole in the balance sheet and

:17:03.:17:06.

that the Co-op was not fit to take over its branches. That wasn't you,

:17:07.:17:11.

it wasn't the Government, it was not the Chancellor, it was Lloyds. You

:17:12.:17:15.

were still cheerleading for the deal to go ahead... Well, as I say, a

:17:16.:17:21.

proper process was followed, which did not result in the purchase of

:17:22.:17:25.

the Lloyds branches. At that proper process been followed with the

:17:26.:17:30.

purchase of the Britannia, under the previous government... Which you

:17:31.:17:35.

supported. Yes, but it may well be that under that previous deal, there

:17:36.:17:39.

was a excess political pressure perhaps put on in order to create

:17:40.:17:42.

that merger, which proved so disastrous. The Tories facilitated

:17:43.:17:51.

it, Grant Shapps, they allowed it to go ahead. I have said, we are going

:17:52.:17:57.

to have a proper, independent review. What I cannot understand is,

:17:58.:18:01.

when you announce a robber, independent review, the response you

:18:02.:18:07.

get to these serious questions. The response is, oh, this is a smear. It

:18:08.:18:12.

is crazy. We are trying to answer the big questions for this country.

:18:13.:18:16.

We have done all of that, and we are out of time. The Reverend Flowers'

:18:17.:18:25.

chairmanship of the Co-op bank was approved by the regulator at the

:18:26.:18:30.

time, which no longer exists. It was swept away by the coalition

:18:31.:18:33.

government in a supposed revolution in regulation. But will its

:18:34.:18:37.

replacement, the Financial Conduct Authority, be different? Adam has

:18:38.:18:47.

been to find out. Come with me for a spin around the Square mile to find

:18:48.:18:50.

out how we regulate our financial sector, which is almost five times

:18:51.:18:54.

bigger than the country's entire annual income. First, let's pick up

:18:55.:19:01.

our guide, journalist Iain Martin, who has just written a book about

:19:02.:19:04.

what went so wrong during the financial crisis. The FSA was an

:19:05.:19:10.

agency which was established to supervise the banks on a day-to-day

:19:11.:19:15.

basis. The Bank of England was supposed to have overall responsible

:19:16.:19:19.

at for this to Bolivia the financial system and the Treasury was supposed

:19:20.:19:22.

to take an interest in all of these things. The disaster was that it was

:19:23.:19:27.

not anyone's call responsibility, or main day job, to stay alert as to

:19:28.:19:32.

whether or not the banking system as a whole was being run in a safe

:19:33.:19:36.

manner. And so this April, a new system was set up to police the

:19:37.:19:41.

City. Most of the responsibly delays here, with the Bank of England, and

:19:42.:19:48.

its new Prudential Regulation Authority. And the Financial

:19:49.:19:53.

Services Authority has been replaced with the new Financial Conduct

:19:54.:19:59.

Authority. Can we go to the financial conduct authority, please?

:20:00.:20:03.

Canary Wharf, thank you. Here, it is all about whether the people in

:20:04.:20:08.

financial services are playing by the rules, in particular, how they

:20:09.:20:12.

treat their customers. This place has got new powers, like the ability

:20:13.:20:16.

to ban products it does not like, a new mandate to promote competition

:20:17.:20:21.

in the market, the concept being, more competition means a better

:20:22.:20:25.

market, plus the idea that a new organisation rings a whole new

:20:26.:20:31.

culture. Although these are the old offices of the FSA, so maybe not

:20:32.:20:36.

quite so new after all. It has also inherited the case of the Co-op bank

:20:37.:20:40.

and its disgraced former chairman the Reverend Paul Flowers. The SCA

:20:41.:20:44.

will be part of the investigation into what happened, which will

:20:45.:20:47.

probably involve looking at its own conduct. One member of the

:20:48.:20:53.

Parliamentary commission into banking wonders whether the new

:20:54.:20:57.

regulator, and its new boss, are up to it. I have always said, it is not

:20:58.:21:02.

the architecture which is the issue, it is the powers that the regulator

:21:03.:21:07.

has, and today, it does not seem to me as if there is any increase in

:21:08.:21:12.

that. And with the unfolding scandal at the Co-op, it feels like the new

:21:13.:21:16.

architecture for regulating the City is now facing its first big test.

:21:17.:21:23.

And the chief executive of the Financial Conduct Authority, the

:21:24.:21:27.

SCA, Martin Wheatley, joins me now. Welcome to The Sunday Politics. The

:21:28.:21:32.

failure of bank regulation was one of the clearest lessons of the crash

:21:33.:21:38.

in 2008, and yet two years later, in 2010, Paul Flowers is allowed to

:21:39.:21:42.

become chairman of the Co-op - why have we still not got the regulation

:21:43.:21:47.

right? We have made a lot of changes since then. We have created a new

:21:48.:21:52.

regulator, as you know. At the time, we still had a process which allowed

:21:53.:21:56.

somebody to be appointed to a bank and they would go through a

:21:57.:21:59.

challenge, but in the case of Paul Flowers, there was no need for an

:22:00.:22:03.

additional challenge when he was appointed to chairman, because he

:22:04.:22:09.

was already on the board. But going from being on the board to becoming

:22:10.:22:14.

chairman, that is a big jump, and he only had one interview? That is why

:22:15.:22:17.

today, it would be different. But the truth is, that was the system at

:22:18.:22:22.

the time, the system which the FSA operated. He was challenged, we did

:22:23.:22:26.

challenge him, and we said, you do not have the right experience, but

:22:27.:22:31.

at the time, we would not have opposed the appointment. What we

:22:32.:22:34.

needed was additional representation of the board of people who did have

:22:35.:22:39.

banking experience. You can say that that was then and this is now, but

:22:40.:22:42.

up until April of this year, it was still the plan for the Co-op, under

:22:43.:22:47.

Mr Flowers, and despite being seriously wounded by the Britannia

:22:48.:22:52.

takeover, to take on 632 Lloyds branches. That was the Co-op's

:22:53.:22:57.

plan. They needed to pass our test as to whether we thought they were

:22:58.:23:01.

fit to do that, and frankly, they never passed that test. It was not

:23:02.:23:05.

the regulator that stopped them? It was. We were constantly pushing

:23:06.:23:09.

back, saying, you have not got the capital, you have no got the

:23:10.:23:12.

systems, and ultimately, they withdrew, when they could not answer

:23:13.:23:17.

our questions. You were asking the right questions, I accept that, but

:23:18.:23:21.

all of the time, the politicians on all sides, they were pushing for it

:23:22.:23:27.

to happen, and I cannot find anywhere where the regulator said,

:23:28.:23:32.

look, this is just not going to happen. I cannot comment on what the

:23:33.:23:36.

politicians were doing, but I continue what we were doing, which

:23:37.:23:39.

was constantly asking the Co-op, have you got the systems in place,

:23:40.:23:42.

have you got the people, have you got the capital? And they didn't.

:23:43.:23:48.

But it only came to a head when Lloyds started its own due diligence

:23:49.:23:51.

on the bank, and they discovered that it was impossible for them to

:23:52.:23:54.

take over the branches, it was not the regulator... In fairness, what

:23:55.:23:59.

we do is ask the questions, can you do this deal? And we kept pushing

:24:00.:24:05.

back, and we never frankly got delivered a business plan which we

:24:06.:24:12.

were happy to approve. Is the SCA going to launch its own inquiry into

:24:13.:24:23.

what happened? -- the FCA. The Chancellor has announced what will

:24:24.:24:27.

be a very broad inquiry. There are a number of specifics which we will be

:24:28.:24:32.

able to look at, relating to events over the last five years. Could

:24:33.:24:36.

there be a police investigation? I think the police have already

:24:37.:24:40.

announced an investigation. I am talking about into the handling of

:24:41.:24:45.

the bank. It depends. There might be, if there is grim low activity,

:24:46.:24:52.

which we do not know yet. You worked at the FS eight, didn't you? I did.

:24:53.:25:01.

Some of those people who were signed off on the speedy promotion of Mr

:25:02.:25:04.

Flowers, are they now working there? Yes, we have some. I came to

:25:05.:25:09.

join the Financial Services Authority, to lead it into the

:25:10.:25:14.

creation of the new body, the SCA. We had people who were challenging

:25:15.:25:27.

and they did the job. There was not a requirement to approve the role as

:25:28.:25:30.

chairman. There was not even a requirement to interview at that

:25:31.:25:35.

stage. What we did do was to require that he was interviewed, and that

:25:36.:25:38.

the Co-op should get additional experience. One of the people from

:25:39.:25:50.

the old organisation, who signed up on the promotion of Mr Flowers to

:25:51.:25:54.

become chairman is now a nonexecutive director of the Co-op,

:25:55.:26:02.

so how does that work? Welcome he was a senior adviser to our

:26:03.:26:05.

organisation, one of the people who made the challenges, and who said,

:26:06.:26:09.

you need more experience on your board. Subsequently he then went and

:26:10.:26:14.

joined the board. Surely that should not be allowed, the regulator and

:26:15.:26:18.

the regulated should not be like that. Well clearly, you need

:26:19.:26:23.

protection, but we have got to get good people in, and frankly, we want

:26:24.:26:28.

the industry to have good people in the industry, so there will be some

:26:29.:26:31.

movement between the regulator and industry. We all wonder whether you

:26:32.:26:34.

have the power or even the confidence to stand up if you look

:26:35.:26:39.

at all of the really bad bank decisions recently, politicians were

:26:40.:26:43.

behind them. It was Gordon Brown who pushed the disastrous merger of

:26:44.:26:47.

Lloyds and RBS. It was Alex Salmond who egged on RBS to buy the world.

:26:48.:26:51.

All three main parties wanted the Co-op to buy Britannia, even though

:26:52.:26:56.

they did not know the debt it would inherit, and all three wanted the

:26:57.:27:00.

Co-op to buy the Lloyds branches - how do you as a regulator stand up

:27:01.:27:05.

to that little concert party? Well, that political pressure exists, our

:27:06.:27:10.

job at the end of the day is to do a relatively technical job and say,

:27:11.:27:14.

does it stack up? And it didn't, and we made that point time and time

:27:15.:27:18.

again to the Co-op board. They did not have a business case that we

:27:19.:27:22.

could approve. The bodies on left and right -- the politicians on left

:27:23.:27:28.

and right gave the Co-op special support. They may have done, but

:27:29.:27:36.

that was not you have made a warning about these payday lenders, but I

:27:37.:27:39.

think what most people would like to see is a limit put on the interest

:27:40.:27:43.

they can charge over a period of time - will you do that? We have got

:27:44.:27:48.

a whole set of powers for payday lenders. We will bring in some

:27:49.:27:52.

changes from April next year, and we will bring in further changes as we

:27:53.:27:56.

see necessary. Will you put a limit on the interest they can charge?

:27:57.:28:00.

That is something we can study. You do not sound too keen on it? Well,

:28:01.:28:05.

there are a lot of changes we need to make. One change is limiting

:28:06.:28:10.

rollovers, limiting the use of continuous payment authorities.

:28:11.:28:13.

Simply jumping to one trigger would be a mistake. Finally, an issue

:28:14.:28:19.

which I think is becoming a growing concern, because the Government is

:28:20.:28:22.

thinking of subsidising them, 95% mortgages are back - should we not

:28:23.:28:27.

be worried about that? I think we should if the market has the same

:28:28.:28:33.

experiences that we had back in 2007 - oh wait. We are bringing a

:28:34.:28:37.

comprehensive package in under our mortgage market review, which will

:28:38.:28:42.

change how people lend and will put affordability back at the heart of

:28:43.:28:53.

lending decisions. -- 2007-08. You have not had your first big

:28:54.:28:56.

challenge yet, have you? We have many challenges.

:28:57.:29:02.

It was once called the battle of the mods and the rockers - the fight

:29:03.:29:06.

between David Cameron-style modernisers and old-style

:29:07.:29:08.

traditional Tories for the direction and soul of the Conservative Party.

:29:09.:29:12.

But have the mods given up on changing the brand? When David

:29:13.:29:21.

Cameron took over in 2005, he promoted himself as a new Tory

:29:22.:29:25.

leader. He said that hoodies need more love. He was talking about

:29:26.:29:31.

something called the big society. He told his party conference that it

:29:32.:29:35.

was time to that sunshine win the day. There was new emphasis on the

:29:36.:29:39.

environment, and an eye-catching trip to a Norwegian glacier to see

:29:40.:29:44.

first-hand, supposedly, the effects of global warming. This week, party

:29:45.:29:49.

modernise and Nick bone has said that the party is still seen as an

:29:50.:29:52.

old-fashioned monolith and hasn't done enough to improve its appeal.

:29:53.:30:00.

The Tories have put some reforms into practice, such as gay marriage,

:30:01.:30:06.

but they have put more into welfare reform band compassionate

:30:07.:30:12.

conservatism. David Cameron wants talked about leading the greenest

:30:13.:30:16.

government ever. Downing Street says that the quote in the Son is not

:30:17.:30:25.

recognised, get rid of the green crap. At this point in the programme

:30:26.:30:30.

we were expecting to hear from the Energy and Climate Change Minister,

:30:31.:30:33.

Greg Barker. Unfortunately, he has pulled out, with Downing Street

:30:34.:30:38.

saying it's for ""family reasons"". Make of that what you will. However,

:30:39.:30:44.

we won't be deterred. We're still doing the story, and we're joined by

:30:45.:30:47.

our very own mod and rocker - David Skelton of the think-tank Renewal,

:30:48.:30:53.

and Conservative MP Peter Bone. Welcome to you both. I'm glad your

:30:54.:30:58.

family is allowed you to come? David Skelton, getting rid of all the

:30:59.:31:02.

green crap, or words to that effect, that David Cameron has been saying.

:31:03.:31:06.

It is just a sign that Tory modernisation has been quietly

:31:07.:31:11.

buried. I do think that's right. Modernisation is about reaching out

:31:12.:31:17.

to the voters, and the work to do that is now more relevant than ever.

:31:18.:31:22.

We got the biggest swing since 1931, and the thing is we need to do more

:31:23.:31:27.

to reach out to voters in the North. We need to reach out to non-white

:31:28.:31:33.

voters, and show that the concerns of modern Britain and the concerns

:31:34.:31:39.

of ordinary people is something that we share. And what way will racking

:31:40.:31:43.

up electricity bills with green levies get you more votes in the

:31:44.:31:48.

North of England? We have to look at ways to reduce energy bills. The

:31:49.:31:53.

renewable energy directive doesn't do anything to help cut our

:31:54.:31:59.

emissions, but does decrease energy bills by ?45 a year. We should

:32:00.:32:03.

renegotiate that. That is a part of modernisation and doing what

:32:04.:32:09.

ordinarily people want. And old dinosaurs like you are just holding

:32:10.:32:15.

this modernisation process back? I am very appreciative of covering on

:32:16.:32:19.

this programme. The Tory party has been reforming itself for more than

:32:20.:32:23.

150 years. This idea of modern eyes a is just some invention. We are

:32:24.:32:28.

changing all the time. I'm nice and cuddly! So you are happy that the

:32:29.:32:35.

party made gay marriage almost a kind of symbol of its modernisation?

:32:36.:32:41.

Fine Mac the gay marriage was a free vote. David Cameron was recorded as

:32:42.:32:48.

a rebel there because more Tories voted against his position than ever

:32:49.:32:53.

before. It was said that this was a split between the old and young, but

:32:54.:32:57.

it actually was a split between those who were religious and

:32:58.:33:00.

nonreligious. It is a misinterpretation of what happened.

:33:01.:33:07.

Is a modernisation in retreat? I think modernisation is an

:33:08.:33:13.

invention. Seven years ago, in my part of the world, we got three

:33:14.:33:18.

councillors elected, two were 80 and one was 21. A few months ago, a

:33:19.:33:24.

25-year-old was chosen to fight Corby for the Conservative Party. He

:33:25.:33:28.

came from a comprehensive School. He was one of the youngest. The Tory

:33:29.:33:33.

party is moving on. So you found three young people? Hang on a

:33:34.:33:39.

minute. You can't get away with that. Three in one batch. Does

:33:40.:33:47.

modernisation exist? Modernisation is about watering our appeal and

:33:48.:33:53.

sharing our values are relevant to voters who haven't really thought

:33:54.:33:58.

about voting for us for decades now. Modernisation is about more than

:33:59.:34:01.

windmills and stuff, it is about boosting the life chances of the

:34:02.:34:06.

poorest, it is about putting better schools in poorer areas. It is also

:34:07.:34:12.

saying that modernisation and the Tory party... When has the Tory

:34:13.:34:17.

party been against making poorer people better off? Or against better

:34:18.:34:22.

schools? Do you think Mrs Thatcher was a moderniser when she won all

:34:23.:34:26.

those elections? The problem we have at the moment is that UKIP has

:34:27.:34:32.

grown-up. If we could get all of those people who vote UKIP to vote

:34:33.:34:36.

for us, we would get 47% of the vote. We don't need to worry about

:34:37.:34:41.

voters on the left. We need to worry about the voters in the north, those

:34:42.:34:45.

people who haven't voted for us for decades. Having an EU Referendum

:34:46.:34:53.

Bill is going to get people to vote. We have to reach out to

:34:54.:35:00.

voters, but not by some sort of London based in need. You have to

:35:01.:35:04.

broaden your base. I agree with you on that. We have to broaden our

:35:05.:35:09.

appeal, but this back to the future concept is not going to work. We

:35:10.:35:14.

need something that generally appeals to low and middle-income

:35:15.:35:18.

voters, and something that shows we genuinely care about the life

:35:19.:35:22.

chances of the poorest. Do you think that the people who vote UKIP don't

:35:23.:35:31.

support those aspirations? We are not doing enough to cut immigration.

:35:32.:35:34.

We don't have an EU Referendum Bill stop we have to get the centre right

:35:35.:35:39.

to vote for us again. Do that, and we have it. Tom Pursglove, the 25

:35:40.:35:46.

euros, will be returned in Corby because we cannot win an election

:35:47.:35:59.

there. -- the 25-year-old. Whether you are moderniser or

:36:00.:36:05.

traditionalist, people, particularly in the North, see you as a bunch of

:36:06.:36:13.

rich men. And rich southerners. You are bunch of rich southerners. We

:36:14.:36:18.

need to do more to show that we are building on lifting the poorest out

:36:19.:36:24.

of the tax. We need to build more houses. There is a perception that

:36:25.:36:28.

the leadership at the moment is rich, and public school educated.

:36:29.:36:34.

What we have to do is get more people from state education into the

:36:35.:36:40.

top. You are going the other way at the moment. That is a fair

:36:41.:36:48.

criticism. Modernisers also say that. I went to a combo hedge of

:36:49.:36:55.

school as well. -- do a comprehensive school. We need to

:36:56.:36:58.

show that we are standing up for low income. Thank Q, both of you. You

:36:59.:37:08.

are watching the Sunday Politics. Coming up in just

:37:09.:37:22.

Welcome to the part of the programme that is just for us in the West.

:37:23.:37:29.

Coming up this week, UKIP claims we cannot cope with more immigration.

:37:30.:37:33.

We'll Romanians and Bulgarians really flocked to the West Country

:37:34.:37:37.

as they claim? We hear from some of those who are already working here

:37:38.:37:40.

and what has drawn them to live in market towns like Yeovil. Joining us

:37:41.:37:46.

are two politicians whose parties are locked in a fierce battle over

:37:47.:37:50.

the issue of immigration. They are the Conservative MP Ashley Fox and

:37:51.:37:54.

for the UK Independence Party, Neil Hamilton. Before we talk about

:37:55.:37:59.

immigration, let's take a look at the goings`on in the European

:38:00.:38:04.

Parliament this week. Ashley Fox, you have upset the French by trying

:38:05.:38:09.

to stop the parliament's monthly pilgrimage from Brussels to

:38:10.:38:13.

Strasbourg. Once a month, 766 MEPs, 3000 staff

:38:14.:38:20.

and 25 lorry loads of documents shuttle from here in Brussels to

:38:21.:38:24.

this rather similar looking building in the French city of Strasbourg. It

:38:25.:38:30.

is thought the round`trip costs over 100 million euros a year.

:38:31.:38:35.

Environmental terms it is 19,000 tonnes of carbon emissions.

:38:36.:38:40.

French members here should confess what they are doing, they are

:38:41.:38:43.

defending selfish national interest. If the seat of the European

:38:44.:38:48.

Parliament was in my home city of Bristol, I would do the same.

:38:49.:38:53.

That has not gone down well with the French, who insist that sitting in a

:38:54.:38:59.

city on the border with Germany is of huge symbolic significance.

:39:00.:39:03.

We are turning our backs on our history and culture and on some of

:39:04.:39:06.

the founding principles of the European Union.

:39:07.:39:10.

In the end, the European Union voted in favour of trying to change the

:39:11.:39:16.

treaty in favour of these two cities. But to do that they will

:39:17.:39:21.

need your disapproval of the two EU Council of ministers, one of whom

:39:22.:39:25.

happens to be French. Ashley, nice try, but you're wasting

:39:26.:39:28.

your breath because the French will veto it?

:39:29.:39:34.

Not at all. We want get it immediately, but the French and

:39:35.:39:38.

Germans will be coming with their own treaty changes to improve

:39:39.:39:42.

changes in the year was on. The only consent of Parliament to approve the

:39:43.:39:47.

changes. Any deal will need to be done. There is huge momentum for us

:39:48.:39:53.

to have one seat and save 150 million euros a year.

:39:54.:39:57.

The French might have to get something like that up, they will

:39:58.:40:00.

say to us, give up your budget rebate for something you get.

:40:01.:40:04.

This is nothing to do with the budget rebate, it is of a treaty

:40:05.:40:09.

change. They will want amendments to the treaties, and the European

:40:10.:40:12.

Parliament wants one seat. We want the treaty amended for that, and I'm

:40:13.:40:16.

confident within five years we can do a deal.

:40:17.:40:20.

No, has he got a crack? I think it is unlikely the French

:40:21.:40:25.

will ever agree to move the Parliament from Strasbourg because

:40:26.:40:27.

it is a huge symbolic significance for them. But this isn't a matter of

:40:28.:40:32.

a huge question of waste in the EU. If they say 150 million pounds a

:40:33.:40:38.

year and this move, they will only wish that somewhere else. We're not

:40:39.:40:44.

really convinced by this one way or another.

:40:45.:40:49.

It is not a sideshow, it is very important. You might ask Mr Hamilton

:40:50.:40:54.

by the UKIP MEPs did not support this. There are only four of them

:40:55.:40:59.

and they abstain. The whole thing is a Charente. The

:41:00.:41:03.

Parliament has no right to make this decision. It is so much hot air. If

:41:04.:41:07.

the money is not wasted on this, it will be wasted on something else. It

:41:08.:41:13.

makes sense for the Parliament at one Single Place to meet.

:41:14.:41:19.

Why didn't you vote on it? Because you have got no power to do

:41:20.:41:23.

anything. It seems extraordinary you did not

:41:24.:41:26.

even bother to say that we should not have two seats of government.

:41:27.:41:31.

It is of no interest to us at all. We want to be out of the EU.

:41:32.:41:36.

You should be interested in getting the best value for taxpayers' money.

:41:37.:41:41.

The best way to save taxpayers not about money is to get out of the EU.

:41:42.:41:48.

Four out of 13, they cannot be bothered to vote to save money.

:41:49.:41:53.

Would you have ordered a the debate had been held in Strasbourg?

:41:54.:41:57.

We don't vote in Strasbourg on matters which are of no interest in

:41:58.:42:06.

anybody. It is a waste of time. It is a story really out of the

:42:07.:42:10.

news, with politicians claiming we're on the wave of the new mass of

:42:11.:42:20.

immigration from Bulgaria mania. Today UKIP have warned that towns

:42:21.:42:25.

like Yeovil weather is already significant Eastern European

:42:26.:42:27.

community, cannot cope with more immigrants.

:42:28.:42:34.

This is virtual. He is Romanian and works in Yeovil as a taxi driver.

:42:35.:42:44.

We are 40 or 45 Romanians. The reason he has come is simple.

:42:45.:42:48.

More money, more opportunities for me.

:42:49.:42:53.

These Romanians and vulgarians are working on agricultural visas and

:42:54.:42:58.

for advance. They say they are not taking jobs from locals because they

:42:59.:43:01.

are the only ones who want to take the work will stop.

:43:02.:43:08.

I found some jobs in the mania, but it is better here. Better money

:43:09.:43:17.

here. They preferred the good jobs, they don't like working in

:43:18.:43:20.

agriculture. The same happen in my country. I don't want to work in

:43:21.:43:25.

agriculture in my country, I want to hear.

:43:26.:43:30.

But according to the UKIP councillor for central Yeovil, people are fed

:43:31.:43:33.

up with the drain immigration is putting on their committee.

:43:34.:43:40.

The main concern is immigration. Every person I spoke to said

:43:41.:43:45.

immigration. That, he claims, is putting a strain

:43:46.:43:51.

on our public services. When you have got a relatively small

:43:52.:43:54.

town, it can have a big impact on medical services, on education,

:43:55.:44:06.

school places. On housing. There is no doubt things have

:44:07.:44:09.

changed in our committees. Take a look at the number of Polish

:44:10.:44:12.

immigrants in this part of the world. It has gone up significantly

:44:13.:44:17.

since 2001, at least ten times. Here at this Catholic primary School in

:44:18.:44:20.

Yeovil, you can see the impact immigration has had on the area.

:44:21.:44:26.

Back in 2000, none of the pupils years book English as a second

:44:27.:44:29.

language, now it is nearly 50% of the pupils. But according to the

:44:30.:44:36.

headteacher that is not a bad thing. We are an inclusive Catholic school,

:44:37.:44:40.

are priorities to get on with our neighbours. This is a very

:44:41.:44:44.

harmonious place. Most of the parents of these peoples

:44:45.:44:48.

work in the hospitals or for local businesses.

:44:49.:44:55.

What we see is that most of those people coming in, most of whom are

:44:56.:45:01.

economic migrants, become here to work, they do not come here to live

:45:02.:45:05.

on benefits. We are 40 days away from the lifting

:45:06.:45:08.

of working restrictions on Bulgaria and Romania.

:45:09.:45:12.

There is a catastrophe looming ahead.

:45:13.:45:17.

But nobody knows yet how many more people will choose places like

:45:18.:45:21.

Yeovil for their home. Joining us is Jon Fox, an expert on

:45:22.:45:25.

immigration. But first, Neil Hamilton, are you and your

:45:26.:45:31.

colleagues in Yeovil using scare tactics here?

:45:32.:45:36.

The scale of immigration has been truly astonishing. These are numbers

:45:37.:45:42.

that are completely unheard`of in the whole of our history. When Enoch

:45:43.:45:46.

Powell made his famous speech nearly 50 years ago, we were getting

:45:47.:45:49.

immigration of 50,000 a year. In 2010 alone we have more people come

:45:50.:45:55.

to this country, 210,000, that came between 1066 and 1950 to stop we are

:45:56.:46:00.

dealing with a massive problem. If they are working hard and paid

:46:01.:46:06.

taxes, what is the problem? It is not against the individuals

:46:07.:46:08.

coming here, we can understand why they would want to. The average wage

:46:09.:46:12.

in Romania is less than jobseeker's allowance year. I would be not want

:46:13.:46:17.

to come here? Especially when they can qualify by simply turning up.

:46:18.:46:25.

Jon Fox, would you take a guess about how many Romanians and

:46:26.:46:30.

Bulgarians might come this way? No. It is they difficult to predict.

:46:31.:46:36.

We don't even have a good sense of how many people are here at the

:46:37.:46:40.

moment. Census figures will be different from National Insurance

:46:41.:46:44.

registrations. Migrants move, become here, they turn around and got back,

:46:45.:46:47.

then they come back again. It is hard to get a sense of this. This is

:46:48.:46:53.

why the predictions we do see are all over the place.

:46:54.:46:57.

People are worried. They say it is hard to get a doctors appointment at

:46:58.:47:00.

the moment, is hard to get a house, public services are pushed, it is

:47:01.:47:03.

hard to get the job. Can you understand why people are given

:47:04.:47:06.

nervous about possibly more immigration?

:47:07.:47:12.

Yes, sure. And in some places these will be felt more acutely than in

:47:13.:47:16.

other places. But if you look at the overall scale of things, I think you

:47:17.:47:19.

see that we are absorbing this migration fairly well, and we don't

:47:20.:47:25.

have this terrible problem of a strain on local councils, local

:47:26.:47:27.

services everywhere. This is an isolated places, and not in the

:47:28.:47:33.

entire country. Ashley Fox, is there a case for the

:47:34.:47:39.

government saying, we let the Polish in when the rest of Europe said now

:47:40.:47:43.

there has to be transitional controls, therefore, in this case

:47:44.:47:47.

should we have more strength now and let Europe take the strain as we did

:47:48.:47:53.

when the Polish game? There is no doubt there during the

:47:54.:47:56.

13 years of Liberal government far too many immigrants were allowed to

:47:57.:48:01.

comment United Kingdom. It was uncontrolled immigration, and the

:48:02.:48:03.

Labour Party have agreed that was a catastrophic mistake, they are

:48:04.:48:06.

words. The coalition government is committed to reducing immigration

:48:07.:48:10.

significantly, firm but fair controls.

:48:11.:48:14.

What controls are you putting over Romanians and Bulgarians coming in?

:48:15.:48:20.

Those controls expire on the 1st of January 2014. Those are EU laws, and

:48:21.:48:25.

that is the deal that Tony Blair signed. There is nothing we can do

:48:26.:48:30.

other than take the Neil Hamilton route which is to leave the EU.

:48:31.:48:36.

That is correct. We have an open door immigration policy in this

:48:37.:48:40.

country, and each of the three main parties believes in staying in the

:48:41.:48:43.

EU, that means we cannot control our borders from immigration, anywhere

:48:44.:48:49.

else in the whole of Europe. Would you urge the government not to

:48:50.:48:51.

allow Romanians and vulgarians not to come here from the 1st of

:48:52.:48:56.

January? We think there should be a points

:48:57.:48:59.

system for immigration, as Australia does and many other countries.

:49:00.:49:06.

If we had a UKIP government... That is not going to happen by the

:49:07.:49:10.

1st of January. The government should take

:49:11.:49:13.

unilateral decision to close the borders, and do that unlawfully. Why

:49:14.:49:18.

not? Rather, you should have a

:49:19.:49:21.

referendum, which my government wants to do.

:49:22.:49:27.

Yes, possibly in 2017. We're not talking about 2017, we're talking

:49:28.:49:31.

about 1st of January 2014. You want to bring in unlawful

:49:32.:49:35.

measures. We do not accept the legitimacy of the EU.

:49:36.:49:40.

If we had responsibility for taking this decision, we would control

:49:41.:49:44.

immigration. You do not want to control immigration.

:49:45.:49:50.

Let's go back to the expat here, Jon Fox. People are worried about people

:49:51.:49:55.

taking benefits. What can they actually get?

:49:56.:50:03.

The 2004 entrance to the EU have access to benefits after one year of

:50:04.:50:05.

continuous climate. Most of those people can claim benefits just like

:50:06.:50:12.

you and me. Or, like you. The Romanians and Bulgarians have

:50:13.:50:17.

stricter restrictions placed on them for what they can claim, but that

:50:18.:50:20.

will change from 1st of January 2014, when it will be the same as

:50:21.:50:28.

the 2004 entrance into the EU. I will get what benefits are being

:50:29.:50:32.

claimed, we see very clearly that eastern European migrations are

:50:33.:50:36.

making a net contribution. The statistic is the paying 34% more

:50:37.:50:39.

into the system than they are taking out.

:50:40.:50:44.

If they are paying in more than they are getting, why do you object?

:50:45.:50:49.

We're not the individuals coming here. The scale of the problem is

:50:50.:50:54.

what matters here. The numbers that are coming, the speed with which

:50:55.:50:59.

immigration is taking place is placing enormous strains on public

:51:00.:51:02.

services. It is also requiring us because of the numbers to concrete

:51:03.:51:08.

over vastly greater makers of England, because this is an English

:51:09.:51:14.

problem first and foremost. The planning minister wants another 3

:51:15.:51:18.

million acres of housing. And it is required because of the scale of

:51:19.:51:20.

immigration that is coming in from outside the EU as well, but we don't

:51:21.:51:27.

know what the scale of the problem will be from Romania and Bulgaria,

:51:28.:51:31.

but we do know what the scale of the problem was for the last 15 years.

:51:32.:51:36.

Nearly 1 million came from Poland in the end.

:51:37.:51:41.

There is this image of the people showing up and claiming benefits and

:51:42.:51:44.

being a strain on services, but they are paying a lot of money into the

:51:45.:51:48.

system, more than you and I are paying into the system.

:51:49.:51:52.

It is a question of how quickly you can have services that can respond

:51:53.:51:56.

to the scale of the immigration. Thank you.

:51:57.:52:00.

The protection of honourable children in the West Whatley is not

:52:01.:52:04.

good enough to stop under a new Ofsted Rhegium, two thirds of our

:52:05.:52:07.

councils would not meet the required standard. Somerset is taking

:52:08.:52:11.

measures after being judged inadequate.

:52:12.:52:18.

The shocking realities of front line social work.

:52:19.:52:28.

This was a social worker from Bristol on a TV documentary last

:52:29.:52:31.

year minutes after taking a baby into care. His mother was living

:52:32.:52:36.

with a sex offender. This challenging work has increased

:52:37.:52:39.

dramatically in the last five years. Child protection orders have, by

:52:40.:52:44.

47%, while care proceedings have gone up 64%. The number of children

:52:45.:52:50.

ending up in care has increased by 13%. Bristol was one of only three

:52:51.:52:55.

authorities in the West officially judged to have good child

:52:56.:52:58.

protection. Five were labelled as inadequate. `` adequate. That

:52:59.:53:08.

standard is no longer acceptable. In the future that will require

:53:09.:53:12.

improvement. One of them, Somerset, was told in August that its child

:53:13.:53:15.

protection was completely inadequate. The council knew they

:53:16.:53:19.

were in trouble. They brought in a new director of children's services,

:53:20.:53:22.

experience in helping struggling authorities. This week he was asked

:53:23.:53:26.

if things had improved for the county's children.

:53:27.:53:31.

Yes. Certainly better protected. There is sometimes a bit of

:53:32.:53:36.

mythology that says that all children can be protected of time,

:53:37.:53:39.

that is not true, but we have to make sure that we do our very best

:53:40.:53:43.

of the children be known about we protect very well, that we find out

:53:44.:53:46.

about those children who are at risk and do something about their

:53:47.:53:49.

circumstances. But Somerset is under huge financial

:53:50.:53:52.

pressure. Proposed changes to children centres have caused

:53:53.:53:57.

controversy. Campaigners packed a council meeting and forced a

:53:58.:54:00.

rethink. The council insists it wants to spend more on front line

:54:01.:54:04.

staff, not buildings, but saving money is a factor.

:54:05.:54:10.

The cuts have gone really deep now. Eric Pickles has given local

:54:11.:54:13.

government as almost a sacrificial lamb. I think this government is any

:54:14.:54:17.

fairly serious situation. In key care services, social care and

:54:18.:54:22.

learning disabilities, we're only one bad case away from being in the

:54:23.:54:26.

newspapers. Meanwhile in the chamber, members

:54:27.:54:28.

were reporting through another ?4 million of cuts, with more to come.

:54:29.:54:32.

The leader said other areas are harder hit, so children services can

:54:33.:54:37.

be protected. But winning approval from inspectors is a long way off.

:54:38.:54:43.

Ofsted continue to change the goalposts. Every year they change

:54:44.:54:48.

their inspection process. Yes, we hold our hands up and say this year

:54:49.:54:51.

we did not need their standards. We are working very hard, we have got

:54:52.:54:54.

the right people in place, we have made the right financial

:54:55.:54:59.

commitments. We are doing our best for children in Somerset to ensure

:55:00.:55:02.

they are safe. Nationally, one child a week dies

:55:03.:55:07.

because of abuse. Social workers worried because of increased and

:55:08.:55:09.

decreased resources, make that worse.

:55:10.:55:16.

Joining us is Ray Jones a professor of social work had shared the

:55:17.:55:19.

children safeguarding board for Bristol. Has reduced sauces got

:55:20.:55:25.

anything to do with this problem? It is a combination of things. There

:55:26.:55:31.

is a greater need in the community because of the welfare and benefit

:55:32.:55:35.

changes. Secondly, welfare cuts is bringing less assistance for those

:55:36.:55:40.

families, such as sure start centres closing. And more work is coming

:55:41.:55:46.

through to social workers and there is no commensurate increase in

:55:47.:55:51.

social worker numbers. They're not cutting social worker

:55:52.:55:54.

numbers. Now, they're trying to maintain the

:55:55.:55:57.

numbers of social workers they have, but doing well making cuts in other

:55:58.:56:02.

areas, children's centres for example, so they're not cutting the

:56:03.:56:07.

numbers of social workers, but they're not increasing them in line

:56:08.:56:12.

with increasing demand. Tragically around one child a week

:56:13.:56:16.

dies because of abuse in this country, which is absolutely

:56:17.:56:18.

shocking, but that figure has been static for 20 years.

:56:19.:56:27.

40 years. The first big scandal was a young girl who died in Brighton.

:56:28.:56:30.

Over the years we have learned more and more about how to take children.

:56:31.:56:35.

My concern at the moment is that we are seeing the amount of work coming

:56:36.:56:39.

into social work increasing dramatically. Child protection

:56:40.:56:46.

plans, plans for children, those have gone up dramatically. Someone

:56:47.:56:52.

has got to be around to make sure we implementing those plans

:56:53.:56:55.

appropriately. That requires an increase in resource. Overall we are

:56:56.:57:00.

seeing resources seeing static, the needs of families increasing.

:57:01.:57:05.

We have increased vastly over the last 40 years? The number of

:57:06.:57:14.

resources? But what we have had since the death

:57:15.:57:22.

of baby Peter in 2007 and the story breaking into those in need is an

:57:23.:57:24.

increasing number of children reported to agencies, more work for

:57:25.:57:28.

them to do, and now increasing the capacity for them to do that work.

:57:29.:57:33.

Let's bring in Ashley Fox here. Local authority reductions. The

:57:34.:57:38.

amount of pressure the coalition is putting on them. That has got to be

:57:39.:57:43.

to blame, hasn't it? I don't think it's to blame. Council

:57:44.:57:48.

services are under great pressure. It is very challenging. But just

:57:49.:57:53.

remember why ` we are clearing up the huge budget deficit, 156 Ilium

:57:54.:57:58.

pounds but Labour left us. We have cut that by one third. Taxes have

:57:59.:58:02.

gone up and public expenditure is being cut. But we face a huge

:58:03.:58:07.

challenge clearing up this mess will stop and councillors like those in

:58:08.:58:11.

Somerset are doing their bit and very difficult circumstances.

:58:12.:58:15.

We have to leave it there. Thank you. Now let's take a run through

:58:16.:58:27.

the week in one minute. Brittle's public toilets could soon

:58:28.:58:30.

be flushed away. Amir has proposed closing all but one as he trims his

:58:31.:58:34.

budget I want quarter over the next three years.

:58:35.:58:39.

If you are like me, with an elderly bladder, you need to have access to

:58:40.:58:44.

the loo. And this is a tourist city. Tourists come to the city and expect

:58:45.:58:49.

public toilets. Councillors have called for more

:58:50.:58:54.

time to propose closing 18 children centres after protests from

:58:55.:58:58.

children. We voted through ?4 million of cuts to the budget saying

:58:59.:59:02.

it was the tip of the iceberg. Gloucestershire's controversial

:59:03.:59:04.

incinerator project is being looked at ie government planning inspector.

:59:05.:59:08.

Campaigners say it would be a blot on the landscape by the developer

:59:09.:59:11.

says it is needed and will save millions of pounds.

:59:12.:59:18.

But's cab`drivers save you risk getting lost after being told to

:59:19.:59:20.

ditch their sap maps. Local authority says drivers should know

:59:21.:59:24.

their way around and other devices obstruct the view.

:59:25.:59:33.

That was a week. A word on public loos. Neil Hamilton, in UKIP land,

:59:34.:59:40.

would you have public loos morbidly funded?

:59:41.:59:44.

This is not an issue we are focused on particularly deeply, but on the

:59:45.:59:48.

elections in May we hope to be flushed with success.

:59:49.:59:53.

This is nothing to do with the EU. We have to leave it there. That is

:59:54.:59:57.

all we have time for today. I did it are guests, Ashley Fox and Neil

:59:58.:00:02.

Hamilton. You can watch the programme again on the BCI player,

:00:03.:00:07.

but now we return to Andrew who was waiting for us in London. We'll see

:00:08.:00:10.

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

:00:11.:00:14.

you. A little bit of history was made at

:00:15.:00:25.

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

:00:26.:00:30.

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

:00:31.:00:33.

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

:00:34.:00:36.

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

:00:37.:00:39.

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

:00:40.:00:48.

have had some interesting interventions from front edges past

:00:49.:00:54.

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

:00:55.:00:59.

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

:01:00.:01:02.

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

:01:03.:01:07.

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

:01:08.:01:12.

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

:01:13.:01:16.

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

:01:17.:01:21.

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

:01:22.:01:26.

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

:01:27.:01:32.

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

:01:33.:01:36.

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

:01:37.:01:41.

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

:01:42.:01:46.

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

:01:47.:01:52.

announces that in Parliament! Because the Prime Minister picked up

:01:53.:01:56.

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

:01:57.:02:01.

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

:02:02.:02:06.

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

:02:07.:02:12.

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

:02:13.:02:16.

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

:02:17.:02:21.

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

:02:22.:02:26.

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

:02:27.:02:36.

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

:02:37.:02:39.

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

:02:40.:02:45.

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

:02:46.:02:48.

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

:02:49.:02:55.

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

:02:56.:03:00.

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

:03:01.:03:05.

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

:03:06.:03:10.

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

:03:11.:03:14.

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

:03:15.:03:24.

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

:03:25.:03:29.

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

:03:30.:03:32.

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

:03:33.:03:38.

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

:03:39.:03:44.

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

:03:45.:03:49.

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

:03:50.:03:59.

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

:04:00.:04:07.

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

:04:08.:04:11.

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

:04:12.:04:16.

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

:04:17.:04:21.

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

:04:22.:04:24.

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

:04:25.:04:30.

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

:04:31.:04:34.

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

:04:35.:04:40.

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

:04:41.:04:43.

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

:04:44.:04:51.

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

:04:52.:04:54.

Labour has some issues around funding generally, and they are

:04:55.:04:59.

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

:05:00.:05:07.

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

:05:08.:05:14.

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

:05:15.:05:18.

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

:05:19.:05:24.

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

:05:25.:05:28.

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

:05:29.:05:33.

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

:05:34.:05:38.

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

:05:39.:05:43.

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

:05:44.:05:50.

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

:05:51.:06:01.

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

:06:02.:06:07.

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

:06:08.:06:10.

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

:06:11.:06:22.

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

:06:23.:06:30.

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

:06:31.:06:39.

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

:06:40.:06:45.

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

:06:46.:06:49.

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

:06:50.:06:54.

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

:06:55.:06:59.

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

:07:00.:07:04.

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

:07:05.:07:08.

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

:07:09.:07:12.

launched one of his classic blunderbuss operations this week,

:07:13.:07:15.

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

:07:16.:07:22.

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

:07:23.:07:29.

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

:07:30.:07:32.

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

:07:33.:07:38.

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

:07:39.:07:41.

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

:07:42.:07:46.

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

:07:47.:07:49.

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

:07:50.:07:54.

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

:07:55.:07:58.

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

:07:59.:08:02.

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

:08:03.:08:10.

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

:08:11.:08:15.

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

:08:16.:08:20.

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

:08:21.:08:24.

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

:08:25.:08:29.

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

:08:30.:08:34.

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

:08:35.:08:39.

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

:08:40.:08:47.

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

:08:48.:08:50.

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

:08:51.:09:00.

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

:09:01.:09:06.

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

:09:07.:09:12.

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

:09:13.:09:18.

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

:09:19.:09:23.

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

:09:24.:09:33.

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

:09:34.:09:38.

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

:09:39.:09:46.

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

:09:47.:09:58.

protection. # A lot of love and affection.

:09:59.:10:10.

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

:10:11.:10:25.

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

:10:26.:10:31.

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

:10:32.:10:41.

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

:10:42.:10:52.

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

:10:53.:11:00.

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

:11:01.:11:11.

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

:11:12.:11:14.

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

:11:15.:11:24.

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

:11:25.:11:28.

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

:11:29.:11:38.

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

:11:39.:11:42.

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

:11:43.:11:54.

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

:11:55.:12:02.

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

:12:03.:12:09.

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

:12:10.:12:12.

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

:12:13.:12:18.

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

:12:19.:12:27.

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

:12:28.:12:34.

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

:12:35.:12:41.

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

:12:42.:12:46.

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

:12:47.:12:50.

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

:12:51.:12:56.

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

:12:57.:13:01.

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

:13:02.:13:13.

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

:13:14.:13:17.

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

:13:18.:13:20.

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

:13:21.:13:23.

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

:13:24.:13:31.

Andrew Neil and David Garmston present the latest political stories, with Conservative chairman Grant Shapps and a look at Ed Miliband's choices for Desert Island Discs on Radio 4.


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