:00:36. > :00:40.Morning, folks. Welcome to the Sunday Politics.
:00:41. > :00:43.Labour's been hit hard by scandals at the Co-op. Ed Miliband says the
:00:44. > :00:47.Tories are mudslinging. We'll speak to Conservative Chairman Grant
:00:48. > :00:49.Shapps. Five years on from the financial
:00:50. > :00:53.crisis, and we're still talking about banks in trouble. Why haven't
:00:54. > :00:58.the regulators got the message? We'll ask the man who runs the
:00:59. > :01:01.City's new financial watchdog. And he used to have a windmill on
:01:02. > :01:06.his roof and talked about giving hugs to hoodies and huskies. These
:01:07. > :01:13.days, not so much. Has the plan to make the Conservative
:01:14. > :01:18.In Yorkshire and Lincolnshire, we find out why the Barnsley born
:01:19. > :01:21.business tycoon Paul Sykes wants to use his millions to get Britain out
:01:22. > :01:29.of And as always, the political panel
:01:30. > :01:33.that reaches the parts other shows can only dream of. Janan Ganesh
:01:34. > :01:36.Helen Lewis and Nick Watt. They ll be tweeting faster than England
:01:37. > :01:41.loses wickets to Australia. Yes they're really that fast.
:01:42. > :01:43.First, some big news overnight from Geneva, where Iran has agreed to
:01:44. > :01:48.curb some of its nuclear activities in return for the partial easing of
:01:49. > :01:51.sanctions. Iran will pause the enrichment of uranium to weapons
:01:52. > :02:02.grade and America will free up some funds for Iran to spend. May be up
:02:03. > :02:05.to $10 billion. A more comprehensive deal is supposed to be done in six
:02:06. > :02:11.months. Here's what President Obama had to say about this interim
:02:12. > :02:17.agreement. We have pursued intensive diplomacy, bilaterally with the
:02:18. > :02:22.Iranians, and together with our partners, the United Kingdom,
:02:23. > :02:27.France, Germany, Russia and China, as well as the European Union.
:02:28. > :02:32.Today, that diplomacy opened up a new path towards a world that is
:02:33. > :02:37.more secure, a future in which we can verify that Iraq and's nuclear
:02:38. > :02:44.programme is peaceful, and that it cannot build a nuclear weapon.
:02:45. > :02:49.President Obama spoke from the White House last night. Now the difficulty
:02:50. > :02:53.begins. This is meant to lead to a full-scale agreement which will
:02:54. > :03:00.effectively end all sanctions, and end Iran's ability to have a bomb.
:03:01. > :03:04.The early signs are pretty good The Iranian currency strengthened
:03:05. > :03:10.overnight, which is exactly what the Iranians wanted. Inflation in Iraq
:03:11. > :03:16.is 40%, so they need a stronger currency. -- information in Iran.
:03:17. > :03:20.France has played a blinder. It was there intransigence that led to
:03:21. > :03:25.this. Otherwise, I think the West would have led to a much softer
:03:26. > :03:30.deal. The question now becomes implementation. Here, everything
:03:31. > :03:35.hinges on two questions. First, who is Hassan Rouhani? Is he the
:03:36. > :03:40.Iranians Gorbachev, a serious reformer, or he's here much more
:03:41. > :03:46.tactical and cynical figure? Or within Iran, how powerful is he
:03:47. > :03:53.There are military men and intelligence officials within Iran
:03:54. > :03:57.who may stymie the process. The Western media concentrate on the
:03:58. > :04:00.fact that Mr Netanyahu and the Israelis are not happy about this.
:04:01. > :04:05.They don't often mention that the Arab Gulf states are also very
:04:06. > :04:14.apprehensive about this deal. I read this morning that the enemies of
:04:15. > :04:21.Qatar and Kuwait went to Saudi king. -- the MAs row. That is the key
:04:22. > :04:27.thing to watch in the next couple of weeks. There was a response from
:04:28. > :04:31.Saudi Arabia, but it came from the Prime Minister of Israel, who said
:04:32. > :04:35.this was a historic mistake. The United States said there would be no
:04:36. > :04:40.enrichment of uranium to weapons grade. In the last few minutes, the
:04:41. > :04:49.Iranian Foreign Minister has tweeted to say that there is an inalienable
:04:50. > :04:53.right -- right to enrich. The key thing is the most important thing
:04:54. > :04:59.that President Obama said in his inaugural speech. He reached out to
:05:00. > :05:05.Iran. It failed under President McKenna jab. Under President
:05:06. > :05:10.Rouhani, there seems to be progress. There is potentially now what he
:05:11. > :05:15.talked about in that first inaugural address potentially coming through.
:05:16. > :05:21.In the end, the key issue - and we don't know the answer - is the
:05:22. > :05:24.supreme leader, not the president. Will the supreme leader agreed to
:05:25. > :05:32.Iran giving up its ability to create nuclear weapons? This is the huge
:05:33. > :05:36.ambiguity. Ayatollah Khamenei authorise the position that
:05:37. > :05:40.President Rouhani took to Geneva. That doesn't mean he will sign off
:05:41. > :05:45.on every bit of implementation over the next six months. Even when
:05:46. > :05:51.President Ahmadinejad was president, he wasn't really President. We in
:05:52. > :05:56.the West have to resort to a kind of Iranians version of the study of the
:05:57. > :06:08.Kremlin, to work out what is going on. And the problem the president
:06:09. > :06:14.faces is that if there is any sign... He can unlock these funds by
:06:15. > :06:19.executive order at the moment, but if he needs any more, he has to go
:06:20. > :06:26.to Congress. Both the Democrat and the Republican side have huge
:06:27. > :06:30.scepticism about this. And he has very low credibility now. There s
:06:31. > :06:35.already been angry noises coming from quite a lot of senators. It was
:06:36. > :06:39.quite strange to see that photo of John Kerry hugging Cathy Ashton as
:06:40. > :06:49.if they had survived a ship great together. John Kerry is clearly
:06:50. > :06:52.feeling very happy. We will keep an eye on this. It is a fascinating
:06:53. > :06:55.development. More lurid details about the
:06:56. > :06:59.personal life of the Co-op Bank s disgraced former chairman, the
:07:00. > :07:02.Reverend Paul Flowers. The links between Labour, the bank and the
:07:03. > :07:05.wider Co-op movement have caused big problems for Ed Miliband this week,
:07:06. > :07:10.and the Conservatives have been revelling in it. But do the Tory
:07:11. > :07:19.allegations - Ed Miliband calls them "smears" - stack up? Party Chairman
:07:20. > :07:27.Grant Shapps joins us from Hatfield. Welcome to the programme. When it
:07:28. > :07:33.comes to the Co-op, what are you accusing Labour of knowing and when?
:07:34. > :07:39.I think the simple thing to say here is that the Co-op is an important
:07:40. > :07:43.bank. They have obviously got into difficulty with Reverend flowers,
:07:44. > :07:47.and our primary concern is making sure that that is properly
:07:48. > :07:49.investigated, and that we understand what happened at the bank and how
:07:50. > :07:56.somebody like Paul Flowers could have ended up thing appointed
:07:57. > :08:02.chairman. You wrote to edge Miliband on Tuesday and asked him what he
:08:03. > :08:05.knew and when. -- you wrote to Ed Miliband. But by Prime Minister s
:08:06. > :08:12.Questions on Wednesday, David Cameron claims that you knew that
:08:13. > :08:17.Labour knew about his past all along. What is the evidence for
:08:18. > :08:25.that? We found out by Wednesday that he had been a Labour councillor
:08:26. > :08:28.Reverend Flowers, and had been made to stand down. Certainly, Labour
:08:29. > :08:33.knew about that, but somehow didn't seem to think that that made him
:08:34. > :08:38.less appropriate to be the chairman of the Co-op bank. There was no
:08:39. > :08:45.evidence that Mr Miliband or Mr Balls knew about that. I ask you
:08:46. > :08:55.again, what are you accusing the Labour leadership of knowing? We
:08:56. > :08:59.know now that he stood down for very inappropriate images on his
:09:00. > :09:04.computer, apparently. You are telling me that they didn't know. I
:09:05. > :09:07.am not sure that is clear at all. I have heard conflicting reports.
:09:08. > :09:12.There is a much bigger argument about what they knew and when. There
:09:13. > :09:17.was a much bigger issue here. This morning, Ed Miliband has said that
:09:18. > :09:21.they don't have to answer these questions and that these smears
:09:22. > :09:25.This is ludicrous. These are important questions about an
:09:26. > :09:28.important bank, how it ended up getting into this position, and how
:09:29. > :09:36.a disastrous Britannia -- Italia deal happen. -- Britannia deal
:09:37. > :09:42.happened. And we need to know how the bank came off the rails. To be
:09:43. > :09:46.accused of smears for asking the questions is ridiculous. I am just
:09:47. > :09:49.trying to find out what you are accusing Labour of. You saying that
:09:50. > :10:01.the Labour leadership knew about the drug-taking? Sorry, there was some
:10:02. > :10:06.noise here. I don't know what was known and when. We do know that
:10:07. > :10:08.Labour, the party, certainly knew about these very difficult
:10:09. > :10:15.circumstances in which he resigned as a councillor. I think that the
:10:16. > :10:20.Labour Party knew about it. We knew that Bradford did, but not London.
:10:21. > :10:25.Are you saying that Ed Miliband knew about the inappropriate material on
:10:26. > :10:32.the Reverend's laptop? It is certainly the case that Labour knew
:10:33. > :10:37.about it. But did Mr Miliband know about it, and his predilection for
:10:38. > :10:43.rent boys? He will need to answer those questions. It is quite proper
:10:44. > :10:47.to ask those questions. Surely, asking a perfectly legitimate set of
:10:48. > :10:51.questions, not just about that but about how we have ended up in a
:10:52. > :10:55.situation where this bank has made loans to Labour for millions of
:10:56. > :11:03.pounds, that bank and the Unite bank, who is connected to it. And
:11:04. > :11:07.how they made a ?50,000 donation to Ed Balls' office. Ed Balls says that
:11:08. > :11:13.was nothing to do with Reverend Flowers, and yet Reverend Flowers
:11:14. > :11:17.said that he personally signed that off. Lots of questions to answer.
:11:18. > :11:24.David Cameron has already answered them on Wednesday. He said that you
:11:25. > :11:28.now know that Labour knew about his past all along. You have not been
:11:29. > :11:32.able to present evidence that involve Mr Miliband or Mr Balls in
:11:33. > :11:38.that. So until you get that, surely you should apologise? Hang on. He
:11:39. > :11:43.said that Labour knew about this, and they did, because he stood down
:11:44. > :11:48.as a councillor. If Ed Miliband didn't know about that, then why
:11:49. > :11:53.not? This was quite a serious thing that happened. The wider point is
:11:54. > :11:56.about why it is that when you ask perfectly legitimate questions about
:11:57. > :12:02.this bank, about the Britannia deal, and about the background of Mr
:12:03. > :12:10.flowers, why is the response, it is all smears? There are questions
:12:11. > :12:14.about how Labour failed to deal with the deficit and how it hasn't done
:12:15. > :12:20.anything to support the welfare changes, but there is nothing about
:12:21. > :12:29.that. Let us -- lets: To the wider picture of the Co-operative Bank.
:12:30. > :12:34.Labour wanted the Co-op to take over the Britannia Building Society, and
:12:35. > :12:40.it was a disaster. Do you accept that? The government of the day has
:12:41. > :12:46.to be a part of these discussions for regulatory reason. The
:12:47. > :12:54.government in 2009 - Ed Balls was very pleased... But you supported
:12:55. > :12:59.that decision. There was a later deal, potentially, for the Co-op to
:13:00. > :13:05.buy those Lloyds branches. There was a proper process and it didn't go
:13:06. > :13:09.through just recently. If there had been a proper process back in 2 09,
:13:10. > :13:16.would the Britannia deal have gone through? First, you accept that the
:13:17. > :13:21.Tories were in favour of the Britannia take over. Then your
:13:22. > :13:25.Chancellor Osborne went out of his way to facilitate the purchase of
:13:26. > :13:31.the Lloyds branches, even though you had no idea that the Co-op had the
:13:32. > :13:36.management expertise to become a super medium. Correct? The
:13:37. > :13:43.difference is that that deal didn't go through. There was a proper
:13:44. > :13:49.process that took place. Let's look at the process. There was long
:13:50. > :13:55.indications as far back as January 2012 that the Co-op, as a direct
:13:56. > :14:00.result of the Britannia take over which you will party supported, was
:14:01. > :14:03.unfit to acquire the Lloyds branches. By January 2012, the
:14:04. > :14:11.Chancellor and the Treasury ignored the warnings. Wide? In 2009, there
:14:12. > :14:15.was political pressure for the Britannia to be brought together.
:14:16. > :14:19.Based on the information available, this was supported, but that process
:14:20. > :14:22.ended up with a very, very problematic takeover of the
:14:23. > :14:28.Britannia. Wind forward to this year, and when the same types of
:14:29. > :14:32.issues were being looked at for the purchase of the Lloyds deal, the
:14:33. > :14:37.proper process was followed, this time with us in government, and that
:14:38. > :14:41.purchase didn't go through. It is important that the proper process is
:14:42. > :14:50.followed, and when it was, it transpired that the deal wasn't
:14:51. > :14:53.going to be done. But it was the Treasury and the Chancellor who were
:14:54. > :14:59.the cheerleaders for the acquisition of the Lloyds branches. But there
:15:00. > :15:02.was a warning that the Co-op did not have enough capital on its balance
:15:03. > :15:08.sheet to make those acquisitions, but instead of heeding those
:15:09. > :15:12.warnings, your people went to Brussels to lobby for the
:15:13. > :15:17.requirements to be relaxed - why on earth did you do that? Our
:15:18. > :15:22.Chancellor went to argue for all of Rajesh banking, not specifically for
:15:23. > :15:25.the Co-op. He was arguing for the mutuals to be given a special
:15:26. > :15:31.ruling. The idea was to make sure that every bank in Britain could
:15:32. > :15:35.have a better deal, particularly the mutuals, as you say. That is a
:15:36. > :15:40.proper thing for the Chancellor to be doing. We could go round in
:15:41. > :15:43.circles here, but in the end, there was not a takeover of the Lloyds
:15:44. > :15:48.branches, that is because we followed a proper process. Had that
:15:49. > :15:53.same rigorous process been followed in 2009, the legitimate question to
:15:54. > :15:56.ask is whether the Co-op would have been -- would have taken over the
:15:57. > :16:00.Britannia. That is a proper question to ask. It is no good to have the
:16:01. > :16:04.leader of the opposition say, as soon as you ask any of these
:16:05. > :16:09.questions about anything where there is a problem for them, they come
:16:10. > :16:12.back with, oh, this is all smears. There are questions to ask about
:16:13. > :16:17.what the Labour government did, the debt and the deficit they left the
:16:18. > :16:21.country with, the way they stopped work from paying in this country.
:16:22. > :16:26.The big question your government has two answer is, why, by July 201 ,
:16:27. > :16:31.when it was clear there was a black hole in the Co-op's balance sheet,
:16:32. > :16:35.your government re-confirmed the Co-op as the preferred bidder for
:16:36. > :16:39.Lloyds - why would you do that? Well, look, the good thing is, we
:16:40. > :16:43.can discuss this until the cows come home, but there is going to be a
:16:44. > :16:48.proper, full investigation, so we will find out what happened, all the
:16:49. > :16:52.way back. So, we will be able to get to the bottom of all of this. Grant
:16:53. > :16:56.Shapps, the only reason the Lloyds deal did not go ahead was, despite
:16:57. > :17:01.the Treasury cheerleading, when Lloyds began its due diligence, it
:17:02. > :17:06.found that there was indeed a huge black hole in the balance sheet and
:17:07. > :17:10.that the Co-op was not fit to take over its branches. That wasn't you,
:17:11. > :17:14.it wasn't the Government, it was not the Chancellor, it was Lloyds. You
:17:15. > :17:21.were still cheerleading for the deal to go ahead... Well, as I say, a
:17:22. > :17:25.proper process was followed, which did not result in the purchase of
:17:26. > :17:29.the Lloyds branches. At that proper process been followed with the
:17:30. > :17:35.purchase of the Britannia, under the previous government... Which you
:17:36. > :17:39.supported. Yes, but it may well be that under that previous deal, there
:17:40. > :17:42.was a excess political pressure perhaps put on in order to create
:17:43. > :17:51.that merger, which proved so disastrous. The Tories facilitated
:17:52. > :17:56.it, Grant Shapps, they allowed it to go ahead. I have said, we are going
:17:57. > :18:00.to have a proper, independent review. What I cannot understand is,
:18:01. > :18:07.when you announce a robber, independent review, the response you
:18:08. > :18:12.get to these serious questions. The response is, oh, this is a smear. It
:18:13. > :18:16.is crazy. We are trying to answer the big questions for this country.
:18:17. > :18:25.We have done all of that, and we are out of time. The Reverend Flowers'
:18:26. > :18:29.chairmanship of the Co-op bank was approved by the regulator at the
:18:30. > :18:33.time, which no longer exists. It was swept away by the coalition
:18:34. > :18:37.government in a supposed revolution in regulation. But will its
:18:38. > :18:47.replacement, the Financial Conduct Authority, be different? Adam has
:18:48. > :18:50.been to find out. Come with me for a spin around the Square mile to find
:18:51. > :18:54.out how we regulate our financial sector, which is almost five times
:18:55. > :19:01.bigger than the country's entire annual income. First, let's pick up
:19:02. > :19:04.our guide, journalist Iain Martin, who has just written a book about
:19:05. > :19:10.what went so wrong during the financial crisis. The FSA was an
:19:11. > :19:15.agency which was established to supervise the banks on a day-to day
:19:16. > :19:18.basis. The Bank of England was supposed to have overall responsible
:19:19. > :19:22.at for this to Bolivia the financial system and the Treasury was supposed
:19:23. > :19:27.to take an interest in all of these things. The disaster was that it was
:19:28. > :19:32.not anyone's call responsibility, or main day job, to stay alert as to
:19:33. > :19:36.whether or not the banking system as a whole was being run in a safe
:19:37. > :19:40.manner. And so this April, a new system was set up to police the
:19:41. > :19:48.City. Most of the responsibly delays here, with the Bank of England, and
:19:49. > :19:53.its new Prudential Regulation Authority. And the Financial
:19:54. > :19:58.Services Authority has been replaced with the new Financial Conduct
:19:59. > :20:03.Authority. Can we go to the financial conduct authority, please?
:20:04. > :20:07.Canary Wharf, thank you. Here, it is all about whether the people in
:20:08. > :20:11.financial services are playing by the rules, in particular, how they
:20:12. > :20:16.treat their customers. This place has got new powers, like the ability
:20:17. > :20:20.to ban products it does not like, a new mandate to promote competition
:20:21. > :20:25.in the market, the concept being, more competition means a better
:20:26. > :20:31.market, plus the idea that a new organisation rings a whole new
:20:32. > :20:36.culture. Although these are the old offices of the FSA, so maybe not
:20:37. > :20:40.quite so new after all. It has also inherited the case of the Co-op bank
:20:41. > :20:43.and its disgraced former chairman the Reverend Paul Flowers. The SCA
:20:44. > :20:47.will be part of the investigation into what happened, which will
:20:48. > :20:53.probably involve looking at its own conduct. One member of the
:20:54. > :20:56.Parliamentary commission into banking wonders whether the new
:20:57. > :21:02.regulator, and its new boss, are up to it. I have always said, it is not
:21:03. > :21:06.the architecture which is the issue, it is the powers that the regulator
:21:07. > :21:11.has, and today, it does not seem to me as if there is any increase in
:21:12. > :21:16.that. And with the unfolding scandal at the Co-op, it feels like the new
:21:17. > :21:23.architecture for regulating the City is now facing its first big test.
:21:24. > :21:27.And the chief executive of the Financial Conduct Authority, the
:21:28. > :21:32.SCA, Martin Wheatley, joins me now. Welcome to The Sunday Politics. The
:21:33. > :21:37.failure of bank regulation was one of the clearest lessons of the crash
:21:38. > :21:42.in 2008, and yet two years later, in 2010, Paul Flowers is allowed to
:21:43. > :21:47.become chairman of the Co-op - why have we still not got the regulation
:21:48. > :21:52.right? We have made a lot of changes since then. We have created a new
:21:53. > :21:56.regulator, as you know. At the time, we still had a process which allowed
:21:57. > :21:59.somebody to be appointed to a bank and they would go through a
:22:00. > :22:03.challenge, but in the case of Paul Flowers, there was no need for an
:22:04. > :22:08.additional challenge when he was appointed to chairman, because he
:22:09. > :22:13.was already on the board. But going from being on the board to becoming
:22:14. > :22:17.chairman, that is a big jump, and he only had one interview? That is why
:22:18. > :22:22.today, it would be different. But the truth is, that was the system at
:22:23. > :22:26.the time, the system which the FSA operated. He was challenged, we did
:22:27. > :22:30.challenge him, and we said, you do not have the right experience, but
:22:31. > :22:34.at the time, we would not have opposed the appointment. What we
:22:35. > :22:38.needed was additional representation of the board of people who did have
:22:39. > :22:42.banking experience. You can say that that was then and this is now, but
:22:43. > :22:47.up until April of this year, it was still the plan for the Co-op, under
:22:48. > :22:52.Mr Flowers, and despite being seriously wounded by the Britannia
:22:53. > :22:57.takeover, to take on 632 Lloyds branches. That was the Co-op's
:22:58. > :23:00.plan. They needed to pass our test as to whether we thought they were
:23:01. > :23:05.fit to do that, and frankly, they never passed that test. It was not
:23:06. > :23:09.the regulator that stopped them It was. We were constantly pushing
:23:10. > :23:12.back, saying, you have not got the capital, you have no got the
:23:13. > :23:17.systems, and ultimately, they withdrew, when they could not answer
:23:18. > :23:21.our questions. You were asking the right questions, I accept that, but
:23:22. > :23:27.all of the time, the politicians on all sides, they were pushing for it
:23:28. > :23:32.to happen, and I cannot find anywhere where the regulator said,
:23:33. > :23:35.look, this is just not going to happen. I cannot comment on what the
:23:36. > :23:39.politicians were doing, but I continue what we were doing, which
:23:40. > :23:42.was constantly asking the Co-op have you got the systems in place,
:23:43. > :23:47.have you got the people, have you got the capital? And they didn't.
:23:48. > :23:51.But it only came to a head when Lloyds started its own due diligence
:23:52. > :23:54.on the bank, and they discovered that it was impossible for them to
:23:55. > :23:59.take over the branches, it was not the regulator... In fairness, what
:24:00. > :24:05.we do is ask the questions, can you do this deal? And we kept pushing
:24:06. > :24:12.back, and we never frankly got delivered a business plan which we
:24:13. > :24:23.were happy to approve. Is the SCA going to launch its own inquiry into
:24:24. > :24:27.what happened? -- the FCA. The Chancellor has announced what will
:24:28. > :24:32.be a very broad inquiry. There are a number of specifics which we will be
:24:33. > :24:36.able to look at, relating to events over the last five years. Could
:24:37. > :24:39.there be a police investigation I think the police have already
:24:40. > :24:44.announced an investigation. I am talking about into the handling of
:24:45. > :24:52.the bank. It depends. There might be, if there is grim low activity,
:24:53. > :25:00.which we do not know yet. You worked at the FS eight, didn't you? I did.
:25:01. > :25:03.Some of those people who were signed off on the speedy promotion of Mr
:25:04. > :25:09.Flowers, are they now working there? Yes, we have some. I came to
:25:10. > :25:13.join the Financial Services Authority, to lead it into the
:25:14. > :25:26.creation of the new body, the SCA. We had people who were challenging
:25:27. > :25:30.and they did the job. There was not a requirement to approve the role as
:25:31. > :25:34.chairman. There was not even a requirement to interview at that
:25:35. > :25:38.stage. What we did do was to require that he was interviewed, and that
:25:39. > :25:50.the Co-op should get additional experience. One of the people from
:25:51. > :25:54.the old organisation, who signed up on the promotion of Mr Flowers to
:25:55. > :26:02.become chairman is now a nonexecutive director of the Co op,
:26:03. > :26:05.so how does that work? Welcome he was a senior adviser to our
:26:06. > :26:09.organisation, one of the people who made the challenges, and who said,
:26:10. > :26:14.you need more experience on your board. Subsequently he then went and
:26:15. > :26:18.joined the board. Surely that should not be allowed, the regulator and
:26:19. > :26:23.the regulated should not be like that. Well clearly, you need
:26:24. > :26:27.protection, but we have got to get good people in, and frankly, we want
:26:28. > :26:30.the industry to have good people in the industry, so there will be some
:26:31. > :26:34.movement between the regulator and industry. We all wonder whether you
:26:35. > :26:39.have the power or even the confidence to stand up if you look
:26:40. > :26:43.at all of the really bad bank decisions recently, politicians were
:26:44. > :26:47.behind them. It was Gordon Brown who pushed the disastrous merger of
:26:48. > :26:51.Lloyds and RBS. It was Alex Salmond who egged on RBS to buy the world.
:26:52. > :26:56.All three main parties wanted the Co-op to buy Britannia, even though
:26:57. > :27:00.they did not know the debt it would inherit, and all three wanted the
:27:01. > :27:05.Co-op to buy the Lloyds branches - how do you as a regulator stand up
:27:06. > :27:10.to that little concert party? Well, that political pressure exists, our
:27:11. > :27:14.job at the end of the day is to do a relatively technical job and say,
:27:15. > :27:17.does it stack up? And it didn't and we made that point time and time
:27:18. > :27:21.again to the Co-op board. They did not have a business case that we
:27:22. > :27:28.could approve. The bodies on left and right -- the politicians on left
:27:29. > :27:35.and right gave the Co-op special support. They may have done, but
:27:36. > :27:39.that was not you have made a warning about these payday lenders, but I
:27:40. > :27:43.think what most people would like to see is a limit put on the interest
:27:44. > :27:47.they can charge over a period of time - will you do that? We have got
:27:48. > :27:52.a whole set of powers for payday lenders. We will bring in some
:27:53. > :27:56.changes from April next year, and we will bring in further changes as we
:27:57. > :28:00.see necessary. Will you put a limit on the interest they can charge
:28:01. > :28:05.That is something we can study. You do not sound too keen on it? Well,
:28:06. > :28:10.there are a lot of changes we need to make. One change is limiting
:28:11. > :28:13.rollovers, limiting the use of continuous payment authorities.
:28:14. > :28:19.Simply jumping to one trigger would be a mistake. Finally, an issue
:28:20. > :28:22.which I think is becoming a growing concern, because the Government is
:28:23. > :28:27.thinking of subsidising them, 9 % mortgages are back - should we not
:28:28. > :28:32.be worried about that? I think we should if the market has the same
:28:33. > :28:37.experiences that we had back in 2007 - oh wait. We are bringing a
:28:38. > :28:42.comprehensive package in under our mortgage market review, which will
:28:43. > :28:53.change how people lend and will put affordability back at the heart of
:28:54. > :28:56.lending decisions. -- 2007-08. You have not had your first big
:28:57. > :29:02.challenge yet, have you? We have many challenges.
:29:03. > :29:06.It was once called the battle of the mods and the rockers - the fight
:29:07. > :29:08.between David Cameron-style modernisers and old-style
:29:09. > :29:12.traditional Tories for the direction and soul of the Conservative Party.
:29:13. > :29:21.But have the mods given up on changing the brand? When David
:29:22. > :29:24.Cameron took over in 2005, he promoted himself as a new Tory
:29:25. > :29:31.leader. He said that hoodies need more love. He was talking about
:29:32. > :29:34.something called the big society. He told his party conference that it
:29:35. > :29:39.was time to that sunshine win the day. There was new emphasis on the
:29:40. > :29:44.environment, and an eye-catching trip to a Norwegian glacier to see
:29:45. > :29:49.first-hand, supposedly, the effects of global warming. This week, party
:29:50. > :29:52.modernise and Nick bone has said that the party is still seen as an
:29:53. > :30:00.old-fashioned monolith and hasn t done enough to improve its appeal.
:30:01. > :30:06.The Tories have put some reforms into practice, such as gay marriage,
:30:07. > :30:12.but they have put more into welfare reform band compassionate
:30:13. > :30:16.conservatism. David Cameron wants talked about leading the greenest
:30:17. > :30:25.government ever. Downing Street says that the quote in the Son is not
:30:26. > :30:30.recognised, get rid of the green crap. At this point in the programme
:30:31. > :30:32.we were expecting to hear from the Energy and Climate Change Minister,
:30:33. > :30:37.Greg Barker. Unfortunately, he has pulled out, with Downing Street
:30:38. > :30:43.saying it's for ""family reasons"". Make of that what you will. However,
:30:44. > :30:47.we won't be deterred. We're still doing the story, and we're joined by
:30:48. > :30:53.our very own mod and rocker - David Skelton of the think-tank Renewal,
:30:54. > :30:57.and Conservative MP Peter Bone. Welcome to you both. I'm glad your
:30:58. > :31:02.family is allowed you to come? David Skelton, getting rid of all the
:31:03. > :31:06.green crap, or words to that effect, that David Cameron has been saying.
:31:07. > :31:11.It is just a sign that Tory modernisation has been quietly
:31:12. > :31:16.buried. I do think that's right Modernisation is about reaching out
:31:17. > :31:21.to the voters, and the work to do that is now more relevant than ever.
:31:22. > :31:27.We got the biggest swing since 931, and the thing is we need to do more
:31:28. > :31:33.to reach out to voters in the North. We need to reach out to non-white
:31:34. > :31:39.voters, and show that the concerns of modern Britain and the concerns
:31:40. > :31:43.of ordinary people is something that we share. And what way will racking
:31:44. > :31:47.up electricity bills with green levies get you more votes in the
:31:48. > :31:52.North of England? We have to look at ways to reduce energy bills. The
:31:53. > :31:58.renewable energy directive doesn't do anything to help cut our
:31:59. > :32:03.emissions, but does decrease energy bills by ?45 a year. We should
:32:04. > :32:09.renegotiate that. That is a part of modernisation and doing what
:32:10. > :32:15.ordinarily people want. And old dinosaurs like you are just holding
:32:16. > :32:18.this modernisation process back I am very appreciative of covering on
:32:19. > :32:23.this programme. The Tory party has been reforming itself for more than
:32:24. > :32:27.150 years. This idea of modern eyes a is just some invention. We are
:32:28. > :32:35.changing all the time. I'm nice and cuddly! So you are happy that the
:32:36. > :32:40.party made gay marriage almost a kind of symbol of its modernisation?
:32:41. > :32:48.Fine Mac the gay marriage was a free vote. David Cameron was recorded as
:32:49. > :32:53.a rebel there because more Tories voted against his position than ever
:32:54. > :32:56.before. It was said that this was a split between the old and young, but
:32:57. > :33:00.it actually was a split between those who were religious and
:33:01. > :33:06.nonreligious. It is a misinterpretation of what happened.
:33:07. > :33:12.Is a modernisation in retreat? I think modernisation is an
:33:13. > :33:18.invention. Seven years ago, in my part of the world, we got three
:33:19. > :33:24.councillors elected, two were 80 and one was 21. A few months ago, a
:33:25. > :33:28.25-year-old was chosen to fight Corby for the Conservative Party. He
:33:29. > :33:33.came from a comprehensive School. He was one of the youngest. The Tory
:33:34. > :33:39.party is moving on. So you found three young people? Hang on a
:33:40. > :33:47.minute. You can't get away with that. Three in one batch. Does
:33:48. > :33:53.modernisation exist? Modernisation is about watering our appeal and
:33:54. > :33:58.sharing our values are relevant to voters who haven't really thought
:33:59. > :34:01.about voting for us for decades now. Modernisation is about more than
:34:02. > :34:05.windmills and stuff, it is about boosting the life chances of the
:34:06. > :34:12.poorest, it is about putting better schools in poorer areas. It is also
:34:13. > :34:17.saying that modernisation and the Tory party... When has the Tory
:34:18. > :34:22.party been against making poorer people better off? Or against better
:34:23. > :34:26.schools? Do you think Mrs Thatcher was a moderniser when she won all
:34:27. > :34:32.those elections? The problem we have at the moment is that UKIP has
:34:33. > :34:36.grown-up. If we could get all of those people who vote UKIP to vote
:34:37. > :34:41.for us, we would get 47% of the vote. We don't need to worry about
:34:42. > :34:45.voters on the left. We need to worry about the voters in the north, those
:34:46. > :34:53.people who haven't voted for us for decades. Having an EU Referendum
:34:54. > :34:59.Bill is going to get people to vote. We have to reach out to
:35:00. > :35:04.voters, but not by some sort of London based in need. You have to
:35:05. > :35:08.broaden your base. I agree with you on that. We have to broaden our
:35:09. > :35:13.appeal, but this back to the future concept is not going to work. We
:35:14. > :35:18.need something that generally appeals to low and middle-income
:35:19. > :35:22.genuinely care about the life genuinely care about the life
:35:23. > :35:31.chances of the poorest. Do you think that the people who vote UKIP don't
:35:32. > :35:34.support those aspirations? We are not doing enough to cut immigration.
:35:35. > :35:39.We don't have an EU Referendum Bill stop we have to get the centre right
:35:40. > :35:46.to vote for us again. Do that, and we have it. Tom Pursglove, the 25
:35:47. > :35:59.euros, will be returned in Corby because we cannot win an election
:36:00. > :36:04.there. -- the 25-year-old. Whether you are moderniser or
:36:05. > :36:12.traditionalist, people, particularly in the North, see you as a bunch of
:36:13. > :36:18.rich men. And rich southerners. You are bunch of rich southerners. We
:36:19. > :36:24.need to do more to show that we are building on lifting the poorest out
:36:25. > :36:27.of the tax. We need to build more houses. There is a perception that
:36:28. > :36:34.the leadership at the moment is rich, and public school educated.
:36:35. > :36:40.What we have to do is get more people from state education into the
:36:41. > :36:48.top. You are going the other way at the moment. That is a fair
:36:49. > :36:55.criticism. Modernisers also say that. I went to a combo hedge of
:36:56. > :36:58.school as well. -- do a comprehensive school. We need to
:36:59. > :37:07.show that we are standing up for low income. Thank Q, both of you. You
:37:08. > :37:18.are watching the Sunday Politics. Coming up in just under 20 minutes,
:37:19. > :37:27.You are watching the Sunday Politics for Yorkshire and Lincolnshire.
:37:28. > :37:30.Coming up today. We find out why the Barnsley`born business tycoon Paul
:37:31. > :37:34.Sykes wants to use his millions to get Britain out of Europe.
:37:35. > :37:38.And why some train services in our part of the world were faster in the
:37:39. > :37:47.1920s than they are today. Does that strengthen the case for HS2? So let
:37:48. > :37:51.us say hello to our guest today. Joining us here in Yorkshire and
:37:52. > :37:57.Lincolnshire, Diana Johnson is the Labour MP for Hull North and in our
:37:58. > :38:01.Westminster studio, is Martin Vickers, the Kvyat MP for
:38:02. > :38:07.Cleethorpes. Outline your opening positions on HS2, do you think it
:38:08. > :38:11.will benefit your constituents? Well, I sup port HS2 in principle
:38:12. > :38:15.but there isn't a blank cheque and we immediate to keep an eye on the
:38:16. > :38:19.cost, but I want to see investment in rail across the north, and I have
:38:20. > :38:23.come on the train from Hull and it has taken a long time to get the
:38:24. > :38:27.Leeds, which isn't too far away, I would like some HS1 for our part of
:38:28. > :38:33.the world first. What about your Martin Vicor, can you justify the
:38:34. > :38:39.thick end of ?50 billion? I will attempt to. It is 50 billion but it
:38:40. > :38:43.is over a period of 17, 18 years and in fact, of course some of that is
:38:44. > :38:49.picked up by the rail operating companies with rolling stock, there
:38:50. > :38:53.is a large contingency to avoid the blank cheque that Diana speaks of.
:38:54. > :38:57.We will chat more in a minute, you may or may not be surprised to learn
:38:58. > :39:02.that train services in some areas were faster in the 1920s, than they
:39:03. > :39:05.are today. 90 years ago passengers could travel from parts of
:39:06. > :39:11.Lincolnshire to London half an hour faster than the modern day. Now we
:39:12. > :39:19.have heard about the proposed benefits of heist highs for cities
:39:20. > :39:26.like Leeds but will other part of the network get left behind? Some
:39:27. > :39:29.call it the golden age of rail travel.
:39:30. > :39:35.This is the East Coast Mainline recreated in its 1940s glory.
:39:36. > :39:41.Back then this Lincolnshire had a network of lines, criss`crossing the
:39:42. > :39:46.County. It wasn't to last. Before the Beeching cuts of the
:39:47. > :39:51.'60s, train travel from Lincolnshire looked very different than it does
:39:52. > :39:57.today. Take Boston for an example. Back in the 1920s, there were round
:39:58. > :40:01.six direct services from Boston to London most days.
:40:02. > :40:05.The whole journey took two`and`a`half hours.
:40:06. > :40:10.It was one of the fastest pieces of Railtrack in the country, straight
:40:11. > :40:14.line, runs across the fens as it did and the trains could get up a fair
:40:15. > :40:20.old speed you had a fast service to London. It was the HS2 of its time
:40:21. > :40:25.Not perhaps on that level, it was a secondary plain line but it was
:40:26. > :40:28.still a fast main line with top class locomotives and through trains
:40:29. > :40:32.to London. And this is today's service. Passengers here will pick
:40:33. > :40:36.up this train, and travel to Grantham. Where they will have to
:40:37. > :40:41.change. Because there are no direct services to London today.
:40:42. > :40:53.What is more, the entire journey takes just under three hours.
:40:54. > :40:57.Passengers have mixed views on local services. Would you be Navdeep Suri
:40:58. > :41:02.priced if I said to you 90 years, would you be surprised if I said
:41:03. > :41:06.there were direct services to London and it took half an hour quicker
:41:07. > :41:09.than it does now? That surprised me, in that case they should bring it
:41:10. > :41:17.on. It is probably because we are not used to do doing it because it
:41:18. > :41:22.is such a bad journey. The highly expensive HS2 won't put back what
:41:23. > :41:28.Beeching took out. But according to an official report by KPMG it will
:41:29. > :41:35.boost the UK economy by ?15 billion a year, and the Lincolnshire economy
:41:36. > :41:40.by ?115 million. HS2 is is not the only game in town, and for somewhere
:41:41. > :41:44.like Lincolnshire there are a lot of good news stories. There will be
:41:45. > :41:48.space released on the East Coast Mainline, that will make for better
:41:49. > :41:52.journeys between possibilities of more direct journeys between Lincoln
:41:53. > :41:55.and London, more direct journeys between Hull and London, better
:41:56. > :41:59.regional service, all of these opportunities are there when HS2 is
:42:00. > :42:03.is there to supplement and complement the East Coast Mainline.
:42:04. > :42:09.But one leading conservative councillor in Lincolnshire describes
:42:10. > :42:13.HS2 as a vanity project, saying the money would be better spent
:42:14. > :42:19.improving existing road and rail links. The one thing we do know is
:42:20. > :42:22.when they build it, if they build it it will be considerably more
:42:23. > :42:29.expensive than ?50 odd billion. Fraction of the money spent on the
:42:30. > :42:33.country's roads, and spent on some key bottleneck, to upgrade the
:42:34. > :42:36.Victorian struck we have, it is scary some of the rail
:42:37. > :42:44.infrastructure is over 100 years old. We could spend a fraction of
:42:45. > :42:51.that money and get better returns. HS2 is a long way down the track. In
:42:52. > :42:55.cam `` campaigners say money should be spent now to keep Lincolnshire
:42:56. > :43:00.moving. The joys of model railway, I can
:43:01. > :43:03.watch that footage all day. Diana Johnson, the chap from HS2 was
:43:04. > :43:07.saying that places like Hull will share in the economic benefits of
:43:08. > :43:11.HS2, do you buy that argument? I think first of all we have to accept
:43:12. > :43:14.we need to invest in infrastructure, and we vent done enough of that in
:43:15. > :43:20.the past. I do think that the point that was made about additional
:43:21. > :43:22.capacity being made available on the East Coast Mainline will be
:43:23. > :43:24.important to places like Hull because we have a restricted
:43:25. > :43:29.service, if there is more services that can run that is great. I have
:43:30. > :43:34.to say I am really still concerned that we make sure that we invest in
:43:35. > :43:39.the trans`pennine network as well as between Doncaster and Hull and
:43:40. > :43:42.Selby, because at the moment the electrification planned between
:43:43. > :43:46.Doncaster and Hull will stop at Selby. I can't see the sense of
:43:47. > :43:50.that. There is a rot lot of regional investment that needs to go in. Let
:43:51. > :43:54.me put that point to Martin Vickers. Are you satisfy we will get more
:43:55. > :43:59.investment that we need in the regional railways? That is right.
:44:00. > :44:04.The Department of Transport have announced their package of spending
:44:05. > :44:07.over the next five or six years and the electrification that Diana
:44:08. > :44:12.mentioned will be fairly extensive. I agree that the Selby to Hull issue
:44:13. > :44:18.needs resolved quickly and hopefully in the more medium term we will have
:44:19. > :44:24.electrification of the south trans`pennine route from Cleethorpes
:44:25. > :44:29.to Manchester. Where there the money come from? The money is already
:44:30. > :44:31.committed. It is there in the projected spending for the
:44:32. > :44:36.department over the next spending period. I think, you know, we have
:44:37. > :44:43.to maximise the opportunities here, this is a massive infrastructure
:44:44. > :44:47.project, HS2, which is a good for the supply chain, not only people
:44:48. > :44:51.like Tata Steel, but there will be opportunities for other local
:44:52. > :44:55.businesses to get involved. But it is a disappointment that the east
:44:56. > :44:57.coast has been put out to franchise again, although at the moment it is
:44:58. > :45:01.making a profit for the public sector, that money could be used to
:45:02. > :45:04.do some of this additional work that needs to be done. Is a shame the
:45:05. > :45:08.Government has turned its face against keeping it in the public
:45:09. > :45:13.sector. We have to recognise that privatisation has been a massive
:45:14. > :45:21.success. Not on the east coast. It failed twice. We have got massive
:45:22. > :45:24.growth, 50% more freight growth in the period since privatisation, we
:45:25. > :45:29.are dealing with a success story here Not on the east coast. That is
:45:30. > :45:33.the problem. We can debate that at great length. I am happy to. I am
:45:34. > :45:38.looking forward to a new franchise operator, we will introduce new
:45:39. > :45:42.service, hopefully to the Grimsby Cleethorpes area as well. It is all
:45:43. > :45:49.very well for bawls to say we don't want to write this project a blank
:45:50. > :45:52.cheque. `` Ed Balls. Labour are either committed to this or they are
:45:53. > :45:57.not Of course this was Labour's policy, this was Labour's initiative
:45:58. > :46:00.in the first place, Lord Adonis was the minister at the time, he was
:46:01. > :46:04.pushing this along, this came out of a Labour Government, but what we are
:46:05. > :46:09.saying is we need to make sure the costs are kept under control. That
:46:10. > :46:14.is is responsible thing to do. You can't give a project a blank cheque
:46:15. > :46:18.and get on with it. You need to have financial control. Many people I
:46:19. > :46:24.suspect in our area today will say why aren't we investing more in
:46:25. > :46:28.snroeds Again, there is considerable investment in roads, is a part of
:46:29. > :46:33.the department's projected spending. I agree there are areas round here
:46:34. > :46:37.that need that, but, let us concentrate here on the railway, we
:46:38. > :46:44.have a success story, privatisation has been a great success. Really?
:46:45. > :46:48.The north Lincolnshire area is a massive freight operation, and the
:46:49. > :46:51.investment will allow more freight to pass through to other parts of
:46:52. > :46:55.the country as well as passengers. 's For ordinary people they say to
:46:56. > :46:58.me, the actual cost of tickets now is a real issue and they are going
:46:59. > :47:02.up, well above inflation, I think there is real concern that we are
:47:03. > :47:08.not making the best of the railways and web are not getting as many
:47:09. > :47:11.people using them as we could. I think the Government need to do
:47:12. > :47:16.something about that. I would agree on that, we have to have pressure on
:47:17. > :47:21.the price issue, although there are bargains to be had. We shall move on
:47:22. > :47:26.now. As MPs debated proposals for an EU referendum this week, a familiar
:47:27. > :47:29.voice merged from the shadows. Multimillionaire businessman and
:47:30. > :47:35.leading Euro`sceptic Paul Sykes said he would do whatever it takes to
:47:36. > :47:39.ensure UKIP succeeds in next year's European elections. Len Tingle
:47:40. > :47:45.caught one the Barnsley`born tycoon, at his home in North Yorkshire.
:47:46. > :47:49.At his home near Ripon Paul Sykes was overseeing the first wave of an
:47:50. > :47:54.advertising campaign aimed at boosting the political fortunes of
:47:55. > :47:57.UKIP. The blunt speaking Yorkshireman said he made his money
:47:58. > :48:05.as a British businessman and he is willing to spend us to free us from
:48:06. > :48:11.a European Union he says is evil. I mean 1,000 million `` I made 1,000
:48:12. > :48:17.million. They have millions off me in tax, now I am campaigning to keep
:48:18. > :48:23.my nation sovereign and free. His home movies shows how he made a
:48:24. > :48:28.million. The coal reminder's son started scrapping old buses You give
:48:29. > :48:33.me a crowbar around I can get in off this bus quicker than you can say
:48:34. > :48:39.Jack Robinson. E has rung the bell on the buses business and hopped off
:48:40. > :48:43.at property development. He was turning an abandoned steelworks into
:48:44. > :48:47.the Med doe hall shopping centre. He has been using his money to fight
:48:48. > :48:52.the EU and the launch of the euro ever since. First as a Kvyat, by the
:48:53. > :48:56.2004 European election he had switched to UKIP. Aiding a four fold
:48:57. > :49:01.increase in seats for the party. But almost immediately, he fell out with
:49:02. > :49:08.party leaders. Then, on Monday came this. Back with UKIP and his Walt.
:49:09. > :49:15.You will say you will do whatever it takes, how much will it take? Well,
:49:16. > :49:18.you have a limit of 4.5 million. Back at his North Yorkshire home he
:49:19. > :49:23.said he is thinking about the European elections and shrugs off
:49:24. > :49:29.suggests that boosting UKIP's fortunes could be a major longer
:49:30. > :49:34.term danger to the Conservatives. UKIP could take votes at the general
:49:35. > :49:40.election, from Kvyat candidates in those swing seats letting in Labour.
:49:41. > :49:43.I have done this before. Every time you go back to the Conservatives
:49:44. > :49:49.they have more European Union, more powers they are giving away. Len, if
:49:50. > :49:53.me and Jimmy Goldsmith hadn't spent our money on campaigning against the
:49:54. > :49:57.euro we would have been in the euro now. I am telling you here and now
:49:58. > :50:01.this will not last. The European Union will break, we need to get
:50:02. > :50:05.free from it. We need to get our borders back, we need to get to be
:50:06. > :50:09.an independent nation that trades with the world as well as with the
:50:10. > :50:14.European countries. So have the Conservatives nervous that this sort
:50:15. > :50:19.of advertising campaign will sprit its vote? It is a suggestion UKIP is
:50:20. > :50:23.anxious to play down. I think that is ridiculous. You look at all the
:50:24. > :50:27.opinion polls for the European elections that are suggesting it's a
:50:28. > :50:32.challenge as to whether Labour or UKIP are going to win. For the party
:50:33. > :50:36.that looks like coming in third that the party coming in second or first
:50:37. > :50:41.is going to split their vote is ridiculous. If they get 24 MEPs,
:50:42. > :50:46.that gives them a lot of money to play with for the next election. So
:50:47. > :50:50.they can use that money to then run the Westminster elections and
:50:51. > :50:55.possibly make a breakthrough there. I don't envisage them getting more
:50:56. > :50:58.than half a dozen possibly a dozen MPs, but it would be a fantastic
:50:59. > :51:02.score for them. They will eat into the Conservative vote, and also, in
:51:03. > :51:05.part of the south, the Liberal Democrat vote and the north, the
:51:06. > :51:08.Labour vote. So they will be the people who will determine the
:51:09. > :51:12.outcome of the next general election in May 2015. UKIP leader Nigel
:51:13. > :51:17.Farage brokered the deal of regaining the Sykes millions, but he
:51:18. > :51:23.has landed more than a silent partner. Me and Nigel work well. He
:51:24. > :51:29.is articulate. He has learned a lot. I binned him in 2004, got some, said
:51:30. > :51:38.you're finished. He is different I know. We have different people now.
:51:39. > :51:44.I am not leaving them alone. ? You say you a great supporter of
:51:45. > :51:51.democracy, why should you have a bigger say than anybody else I paid
:51:52. > :51:59.money out to keep Sweden out and Denmark. I, why shouldn't I pay for
:52:00. > :52:05.information, for them Swedes to read, and Denmark to read, that kept
:52:06. > :52:10.them out the euro? Will there be more, he is now ruling out standing
:52:11. > :52:15.as a UKIP candidate in 2015. He will be taking to the European campaign
:52:16. > :52:20.trail, in the coming months. So how worries are you that Paul
:52:21. > :52:25.psychs is bank rolling UKIP again? It is a concern, I mean, if Mr Sykes
:52:26. > :52:30.is genuine in his desire to get Britain out of the EU, that will be
:52:31. > :52:36.through the mechanism of referendum, but the reality is the only party
:52:37. > :52:42.that can deliver a referendum is the Conservative Party. We have heard
:52:43. > :52:48.there that the UKIP could split the Conservative vote, and that can only
:52:49. > :52:51.result in one thing, more Labour MP, Labour Party are committed against
:52:52. > :52:55.the referendum. Many of your Conservative colleagues don't agree.
:52:56. > :52:58.I know on Friday you voted for a referendum next year, Paul Sykes
:52:59. > :53:03.wants that but why does the rest of your party not want that? The
:53:04. > :53:06.reality is the build up we were debating allows for a referendum
:53:07. > :53:12.next year. It stays that the referendum must take place before
:53:13. > :53:18.the end of 2017. But, you know, the fact is that the chances of having a
:53:19. > :53:23.referendum before the general election are remote. Let us be
:53:24. > :53:29.honest about it. We have to face the fact. My anti`euro credentials are
:53:30. > :53:33.solid. They predate most of the UKIP supporters. I voted to come out in
:53:34. > :53:36.the 1975 referendum and I will campaign in same way when we have
:53:37. > :53:39.the referendum. But we will only get that referendum if we have a
:53:40. > :53:43.Conservative Government. It is interesting Diana Johnson, we expect
:53:44. > :53:46.UKIP to take votes off the Conservatives at the euro election,
:53:47. > :53:51.but the last European elections they came top of the poll in Hull. How
:53:52. > :53:56.worried are you about what Paul Sykes is doing? I think UKIP feed
:53:57. > :53:59.into this anti`politics mood at the moment. Perhaps the Liberal
:54:00. > :54:02.Democrats have been where people put a protest vote. Now the Liberal
:54:03. > :54:05.Democrats are the party of Government, I think people are
:54:06. > :54:08.protesting by voting for UKIP. I think if more people look at their
:54:09. > :54:14.policies though, and explore what they would do, so they have got some
:54:15. > :54:18.anti`women policy s I think their economic policies are from the 50,
:54:19. > :54:21.they are not addressing the needs of 2000? 13. To remove ourselves from
:54:22. > :54:25.the largest market we have at the moment, just seems to me when people
:54:26. > :54:28.explore that and look at it properly, they may well take a view
:54:29. > :54:34.they are not wanting to support UKIP.
:54:35. > :54:38.Martin Vicor, one of your own Conservative ministers Nick Boles
:54:39. > :54:44.said young voters see your party as aliens from another planet. What
:54:45. > :54:48.planet are you from? I am from planet earth and Cleethorpes is
:54:49. > :54:53.sound. Nick Boles goes off at a tangent on a number of occasion, on
:54:54. > :54:59.this one he, he is just way off beam. In so`called decontamination
:55:00. > :55:03.of the Tory brand David Cameron has been trying to do, it is a fillure?
:55:04. > :55:08.I would reject that, the reality is we have got to look at the world as
:55:09. > :55:13.it is and face it. The problem with the UKIP agenda, and I agree with
:55:14. > :55:18.Diana in as much as many of their supporters are anti`politics and
:55:19. > :55:22.wanting to to turn the clock back. Any Government that comes to power
:55:23. > :55:25.will in 2015 will have to look forward and it's a different world
:55:26. > :55:30.to the one that many UKIP supporters would like to see. Much as we may
:55:31. > :55:34.regret it. Interesting comments from David
:55:35. > :55:38.Cameron this week, Downing Street say he didn't say this but he was
:55:39. > :55:44.quoted as saying we have to do something about the all this green
:55:45. > :55:49.stuff? I have to say I am furious where the Prime Minister, because as
:55:50. > :55:53.a Hull MP, who is very supportive of the renewables in industry and
:55:54. > :55:59.building that up in the UK and in Hull in particular with hopefully
:56:00. > :56:02.see Mondays coming to the city. Having the Prime Minister talking
:56:03. > :56:06.about that is unhelpful to making sure we can get the invest it.
:56:07. > :56:10.Intour country. It is where the economy could see growth if we
:56:11. > :56:13.became a centre of excellence for renewables. The Prime Minister is
:56:14. > :56:17.wrong and Ed Davey and the Prime Minister it seems to me are on a
:56:18. > :56:21.collision course on this. I have to say I have been with the Prime
:56:22. > :56:28.Minister this morning and he flatly denies he said that. We have come a
:56:29. > :56:43.long way since hug a husky. Let us get more of the political news.
:56:44. > :56:50.Disgraced former Co`operative Bank chairman Paul Flowers has been sceed
:56:51. > :56:53.by police. Mr Flowers is an ex`Bradded for councillor and
:56:54. > :56:57.Methodist minister suspended by church and the Labour Party,
:56:58. > :57:02.following allegations that he bought and used illegal drugs. Former MP
:57:03. > :57:06.for Rotherham Denis MacShane admitted obtaining almost ?13,000
:57:07. > :57:10.through fraudulent expenses claim, McShane, who resigned last year was
:57:11. > :57:14.minister for Europe in Tony Blair's Government. He will be sentenced at
:57:15. > :57:18.the Old Bailey next month. And it was celebrations all round on
:57:19. > :57:21.Thursday when Hull was named City of Culture, but the Prime Minister
:57:22. > :57:25.found himself under fire from another of his heroes after he
:57:26. > :57:29.mentioned 1980s band the housemartins while congratulating
:57:30. > :57:34.the city. The band's former lead singer Paul Heaton took to Twitter,
:57:35. > :57:38.telling fans when I took over my pub in Salford the first people I barred
:57:39. > :57:44.were Cameron and George Osborne. That ban still stands.
:57:45. > :57:48.We will talk about that in a moment. Diana Johnson, how damaging has the
:57:49. > :57:53.Paul flowers business been for Labour? Well, I think it is
:57:54. > :57:57.obviously a very difficult time for the Co`op. Of course the Co`op are a
:57:58. > :58:02.long`standing institution in this country that have done an enormous
:58:03. > :58:06.amount of good work. Clearly, there is investigation that needs to take
:58:07. > :58:10.place about how this man became the chair of the bank. What I would also
:58:11. > :58:14.say is I do think the Government have been in power for three year,
:58:15. > :58:18.the Treasury, the Chancellor, the regulator, what have they been doing
:58:19. > :58:22.to watch over what is happening to the Co`op? So they have questions to
:58:23. > :58:26.answer, I know a lot of mud has been thrown at the Labour Party this week
:58:27. > :58:30.but I think the Government need to answer serious questions about what
:58:31. > :58:32.they have been doing? There was a perception in the Labour Party that
:58:33. > :58:36.the Co`op movement and the Co`operative Bank in particular were
:58:37. > :58:40.holier than thou, they were an ethical bank, that was not the case?
:58:41. > :58:43.I think generally across all political parties there was a view
:58:44. > :58:49.that mutuals are a good thing that, the Co`op has a long history, great
:58:50. > :58:55.tradition, it has been affiliated to the Labour Party since 1917. The
:58:56. > :58:59.Conservative Party have talks about mutuals: We have to recognise the
:59:00. > :59:02.Labour Party and the Co`op are joined at the hip so the Labour
:59:03. > :59:06.Party have to answer most of the questions. I would agree with Diana
:59:07. > :59:12.that the regulators have, I am not a great fan of regulator, they seem
:59:13. > :59:16.too wedded to the, the organisations and companies they are regulating,
:59:17. > :59:21.rather than on the side of the customer, but on this one they have
:59:22. > :59:24.some serious questions. So congratulations to Hull winning
:59:25. > :59:28.UK City of Culture, what will it mean to the city? It is an enormous
:59:29. > :59:31.boost. An enormous boost at a time when things are difficult in Hull
:59:32. > :59:37.but it means that we have got the focus of the country on us now, we
:59:38. > :59:43.have had excellent publicity since Wednesday, the first time the
:59:44. > :59:48.national media has been saying positive things about Hull. Long may
:59:49. > :59:55.that continue. Do you the think there will be benefits for the wider
:59:56. > :00:01.region? I am sure the tourist trade in Cleethorpes will putting up post
:00:02. > :00:06.ers in Hull, directing people to the Humber Bridge and come and see the
:00:07. > :00:10.sun, sea and sand of Cleethorpes. Happy hour in Hull again. Thank you
:00:11. > :00:13.for your time today. With that, we will go back to Andrew Neil
:00:14. > :00:22.will be returning to this one. Thank you.
:00:23. > :00:28.A little bit of history was made at Prime Minister's Questions this
:00:29. > :00:31.week. A teensy tiny bit. It wasn't David Cameron accusing one MP of
:00:32. > :00:34.taking "mind-altering substances" - they're always accusing each other
:00:35. > :00:37.of doing that. No, it was the first time a Prime Minister used a live
:00:38. > :00:47.tweet sent from someone watching the session as ammunition at the
:00:48. > :00:51.dispatch box. Let's have a look We have had some interesting
:00:52. > :00:55.interventions from front edges past and present. I hope I can break
:00:56. > :01:00.records by explaining that a tweet has just come in from Tony McNulty,
:01:01. > :01:04.the former Labour security minister, saying that the public are
:01:05. > :01:10.desperate for a PM in waiting who speaks for them, not a Leader of the
:01:11. > :01:14.Opposition in dodging in partisan Westminster Village knock about So
:01:15. > :01:20.I would stay up with the tweets if you want to get on the right side of
:01:21. > :01:23.this one! We are working on how the Prime Minister managed to get that
:01:24. > :01:30.wheat in the first place. What did you think when you saw it being read
:01:31. > :01:35.out? I was certainly watching the Daily Politics. I almost fell off my
:01:36. > :01:39.chair! It was quite astonishing He didn't answer the question - he
:01:40. > :01:43.didn't do that the whole time. But I stand by what the tweets said. I
:01:44. > :01:49.have tweeted for a long time on PMQs. Normally I am praising Ed
:01:50. > :01:53.Miliband to the hilt, but no one announces that in Parliament!
:01:54. > :01:59.Because the Prime Minister picked up on what you said, it unleashed some
:02:00. > :02:03.attacks on you from the Labour side. It did, minor attacks from some very
:02:04. > :02:07.junior people. Most people were supportive of what I said. They took
:02:08. > :02:15.issue with the notion of not doing it until 12:30pm, when it wasn't
:02:16. > :02:19.available for the other side to use. Instant history, and instantly
:02:20. > :02:24.forgettable, I would say. Do you think you have started a bit of a
:02:25. > :02:30.trend? I hope not, because the dumbing down of PMQs is already on
:02:31. > :02:38.its way. Most people tweet like mad through PMQs! Is a measure of how
:02:39. > :02:42.post-modern we have become, we have journalists tweeting about someone
:02:43. > :02:46.talking about a tweet. That is the level of British politics. I am
:02:47. > :02:51.horrified by this development. The whole of modern life has become
:02:52. > :02:59.about observing people -- people observing themselves doing things.
:03:00. > :03:02.Do we know what happened? Somebody is monitoring the tweets on behalf
:03:03. > :03:07.of the Prime Minister or the Tory party. They see Tony's tweet. They
:03:08. > :03:11.then print it out and give it to him? There was a suggestion that
:03:12. > :03:22.Michael Goves had spotted it, but Craig Oliver from the BBC had this
:03:23. > :03:26.great sort of... Craig Oliver was holding up his iPad to take pictures
:03:27. > :03:30.of the Prime Minister, which he then tweeted, from the Prime Minister.
:03:31. > :03:35.People will now be tweeting in the hope that they will be quoted by the
:03:36. > :03:40.Prime Minister, or the Leader of the Opposition. I wasn't doing that I'm
:03:41. > :03:47.just talking about the monster you have unleashed! I hope it dies a
:03:48. > :03:53.miserable death. I think Tony is a good analysis -- a good analyst of
:03:54. > :04:04.PMQs on Twitter. Moving onto the Co-op. You were a Co-op-backed MP,
:04:05. > :04:09.white you? I was a Co-op party member. There are two issues here
:04:10. > :04:14.about the Co-op and the Labour Party. All the new music suggests
:04:15. > :04:19.that the Co-op will now have to start pulling back from lending or
:04:20. > :04:22.donating to the Labour Party, which, at a time when Mr Miliband is going
:04:23. > :04:27.through changes that are going to cut of the union funds, it seems
:04:28. > :04:32.quite dangerous. There are three things going on. There's the
:04:33. > :04:35.relationship that the party has politically with the Co-op party,
:04:36. > :04:42.there is the commercial relationship you referred to, and then there is
:04:43. > :04:46.this enquiry into the comings and goings of Flowers and everybody
:04:47. > :04:53.else. The Tories, at their peril, will mix the three up. There's a lot
:04:54. > :04:58.of things going on with a bang. Labour has some issues around
:04:59. > :05:04.funding generally, and they are potentially exacerbated by the Co-op
:05:05. > :05:11.issue. The Labour Party gets soft loans from the Co-op bank, and it
:05:12. > :05:16.gets donations. ?800,000 last year. Ed Balls got about ?50,000 for his
:05:17. > :05:19.private office. You get the feeling, given the state of the Co-operative
:05:20. > :05:26.Bank now, that that money could dry up. We will see. There's lots of
:05:27. > :05:30.speculation in the papers today At the core, the relationship between
:05:31. > :05:34.the Co-op party and the Labour Party is a proud one, and a legitimate
:05:35. > :05:40.one. I don't think others always understand that. Here is an even
:05:41. > :05:48.bigger issue. Is it not possible that the Co-op bank will cease to
:05:49. > :05:57.exist in any meaningful way as a Co-op bank? Is the bane out means it
:05:58. > :06:04.is 70% owned -- the bail out means that it is 70% owned, or 35% going
:06:05. > :06:09.to a hedge fund, I think I read Yes, there is a move from the
:06:10. > :06:17.mutualism of the Co-op. But don t confuse the Co-op bank with the
:06:18. > :06:23.Co-op Group. Others have done that. I haven't. Here's the rub. The soft
:06:24. > :06:36.loans that Labour gets. They got ?1.2 million from this. And 2.4
:06:37. > :06:41.million. They are secured against future union membership fees of the
:06:42. > :06:45.party. What is Mr Miliband doing? He is trying to end that? You have this
:06:46. > :06:52.very difficult confluence of events, which is, could these wonderful soft
:06:53. > :06:57.loans that Labour has had from the Co-op, could they be going? And
:06:58. > :07:01.these union reforms, where Ed Miliband is trying to create a link
:07:02. > :07:05.between individuals and donations to the Labour Party... Clearly, there
:07:06. > :07:09.could be real financial difficulties here. The government needs to be
:07:10. > :07:13.careful, because George Osborne launched one of his classic
:07:14. > :07:17.blunderbuss operations this week, which is that the Labour Party is to
:07:18. > :07:27.blame for Paul Flowers' private life. No, it's not. And that all the
:07:28. > :07:31.problems, essentially... Look at what George Osborne was doing in
:07:32. > :07:35.Europe. He was trying to change the capital requirement rules that would
:07:36. > :07:38.make it easier for the Co-op to take over Lloyd's. If there is to be a
:07:39. > :07:44.big investigation, George Osborne needs to be careful of what he
:07:45. > :07:48.wishes for. This is another example of the Westminster consensus. All of
:07:49. > :07:51.the Westminster parties were in favour of the Britannia takeover.
:07:52. > :07:56.This is how the Co-op ended up with all this toxic rubbish on its
:07:57. > :08:01.balance sheet. All the major parties were in favour of going to get the
:08:02. > :08:08.Lloyds branches. The Tories tried to outdo Labour in being more
:08:09. > :08:14.pro-Co-op. There was nobody in Westminster saying, hold on, this
:08:15. > :08:17.doesn't work. It is like the financial bubble all over again
:08:18. > :08:22.Everyone was in favour of that at the time. I think there is no
:08:23. > :08:26.evidence so far that the storm is cutting through to the average
:08:27. > :08:31.voter. If I were Ed Miliband, I would let it die a natural death. I
:08:32. > :08:36.would not write to an editorial column for a national newspaper on a
:08:37. > :08:40.Sunday. That keeps the issue alive, and it makes him look oversensitive
:08:41. > :08:48.and much better at dishing it out than taking it. I agree about that.
:08:49. > :08:56.The Labour press team tweeted this week saying that it was a new low
:08:57. > :09:05.for the times. And this was re-tweeted by Ed Miliband. It isn't
:09:06. > :09:10.a great press attitude. It is very Moni. Bill Clinton went out there
:09:11. > :09:14.and fought and made the case. So did Tony Blair. If you just say, they
:09:15. > :09:19.are being horrible to us, it looks pathetic. And it will cut through on
:09:20. > :09:27.Osborne and the financial dimensional is, not political. I
:09:28. > :09:34.shall tweet that later! While we have been talking, Mr Miliband has
:09:35. > :09:38.been on Desert Island Discs. He might still be on it. Let's have a
:09:39. > :09:57.listen to what he had to say. # Take on me, take me on.
:09:58. > :10:00.# And threw it all, she offers me protection.
:10:01. > :10:23.# A lot of love and affection. # Whether I'm right or wrong #.
:10:24. > :10:29.# Je Ne Regrette Rien. #. Obviously, that was the music that
:10:30. > :10:33.Ed Miliband chose. Who thought - you would have thought he would
:10:34. > :10:45.choose Norman Lamont's theme tune! He chose Jerusalem... He has no
:10:46. > :10:56.classical background at all. He had no Beethoven, no Elgar. David
:10:57. > :11:07.Cameron had Mendelssohn. And Ernie, the fastest Notman in the West. --
:11:08. > :11:12.fastest milkman. Tony Blair chose the theme tune to a movie. Tony
:11:13. > :11:21.Blair's list was chosen by young staffers in his office. It
:11:22. > :11:27.absolutely was. Tony Blair's list was chosen by staff. The Ed Miliband
:11:28. > :11:32.this was clearly chosen by himself, because who would allow politician
:11:33. > :11:40.to go out there and say that they like Aha. I am the same age as Ed
:11:41. > :11:51.Miliband, and of course he likes Aha. That was the tumour was played
:11:52. > :11:59.in the 80s. Sweet Caroline. It is Angels by Robbie Williams. I was
:12:00. > :12:03.14-year-old girl when that came out. I thought Angels was the staple of
:12:04. > :12:11.hen nights and chucking out time in pubs. The really good thing about
:12:12. > :12:16.his list is that the Smiths to not appear. The Smiths were all over
:12:17. > :12:21.David Cameron's list. The absolutely miserable music of Morris he was not
:12:22. > :12:29.there. What was his luxury? And Indian takeaway! Again, chosen for
:12:30. > :12:38.political reasons. I would agree with the panel about Aha, but I
:12:39. > :12:44.would expect -- I would respect his right to choose. Have you been on
:12:45. > :12:47.Desert Island Discs? I have. It took me three weeks to choose the music.
:12:48. > :12:52.It was the most difficult decision in my life. What was the most
:12:53. > :12:57.embarrassing thing you chose? I didn't choose anything embarrassing.
:12:58. > :13:11.I chose Beethoven, Elgar, and some proper modern jazz. Anything from
:13:12. > :13:15.the modern era? Pet Shop Boys. That's all for today. The Daily
:13:16. > :13:18.Politics will be on BBC Two at lunchtime every day next week, and
:13:19. > :13:21.we'll be back here on BBC One at 11am next week. My luxury, by the
:13:22. > :13:23.way, was a wind-up radio! Remember, if it's Sunday, it's the Sunday
:13:24. > :13:30.Politics.