24/11/2013 Sunday Politics Yorkshire and Lincolnshire

Morning, folks. Welcome to the Sunday Politics.

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

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

Shapps. Five years on from the financial

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

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

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

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

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

In Yorkshire and Lincolnshire, we find out why the Barnsley born

business tycoon Paul Sykes wants to use his millions to get Britain out

of And as always, the political panel

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

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

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

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

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

sanctions. Iran will pause the enrichment of uranium to weapons

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

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

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

agreement. We have pursued intensive diplomacy, bilaterally with the

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

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

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

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

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

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

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

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

The early signs are pretty good The Iranian currency strengthened

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

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

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

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

deal. The question now becomes implementation. Here, everything

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

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

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

There are military men and intelligence officials within Iran

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

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

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

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

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

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

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

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

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

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

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

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

Iran. It failed under President McKenna jab. Under President

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

talked about in that first inaugural address potentially coming through.

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

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

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

ambiguity. Ayatollah Khamenei authorise the position that

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

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

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

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

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

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

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

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

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

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

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

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

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

development. More lurid details about the

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

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

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

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

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

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

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

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

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

and our primary concern is making sure that that is properly

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

somebody like Paul Flowers could have ended up thing appointed

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

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

Questions on Wednesday, David Cameron claims that you knew that

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

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

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

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

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

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

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

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

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

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

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

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

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

This is ludicrous. These are important questions about an

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

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

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

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

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

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

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

Labour, the party, certainly knew about these very difficult

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

through just recently. If there had been a proper process back in 2 09,

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

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

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

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

management expertise to become a super medium. Correct? The

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

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

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

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

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

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

was political pressure for the Britannia to be brought together.

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

ended up with a very, very problematic takeover of the

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

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

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

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

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

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

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

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

sheet to make those acquisitions, but instead of heeding those

warnings, your people went to Brussels to lobby for the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The big question your government has two answer is, why, by July 201 ,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

that merger, which proved so disastrous. The Tories facilitated

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

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

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

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

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

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

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

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

government in a supposed revolution in regulation. But will its

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

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

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

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

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

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

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

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

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

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

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

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

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

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

its new Prudential Regulation Authority. And the Financial

Services Authority has been replaced with the new Financial Conduct

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

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

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

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

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

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

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

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

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

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

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

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

Parliamentary commission into banking wonders whether the new

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

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

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

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

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

And the chief executive of the Financial Conduct Authority, the

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

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

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

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

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

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

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

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

additional challenge when he was appointed to chairman, because he

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

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

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

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

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

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

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

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

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

Mr Flowers, and despite being seriously wounded by the Britannia

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

there be a police investigation I think the police have already

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

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

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

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

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

join the Financial Services Authority, to lead it into the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

rollovers, limiting the use of continuous payment authorities.

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

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

thinking of subsidising them, 9 % mortgages are back - should we not

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

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

comprehensive package in under our mortgage market review, which will

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

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

challenge yet, have you? We have many challenges.

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

between David Cameron-style modernisers and old-style

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

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

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

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

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

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

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

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

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

old-fashioned monolith and hasn t done enough to improve its appeal.

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

but they have put more into welfare reform band compassionate

conservatism. David Cameron wants talked about leading the greenest

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

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

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

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

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

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

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

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

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

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

It is just a sign that Tory modernisation has been quietly

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

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

We got the biggest swing since 931, and the thing is we need to do more

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

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

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

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

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

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

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

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

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

this modernisation process back I am very appreciative of covering on

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

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

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

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

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

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

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

it actually was a split between those who were religious and

nonreligious. It is a misinterpretation of what happened.

Is a modernisation in retreat? I think modernisation is an

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

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

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

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

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

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

modernisation exist? Modernisation is about watering our appeal and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

need something that generally appeals to low and middle-income

genuinely care about the life genuinely care about the life

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

are watching the Sunday Politics. Coming up in just under 20 minutes,

You are watching the Sunday Politics for Yorkshire and Lincolnshire.

Coming up today. We find out why the Barnsley`born business tycoon Paul

Sykes wants to use his millions to get Britain out of Europe.

And why some train services in our part of the world were faster in the

1920s than they are today. Does that strengthen the case for HS2? So let

us say hello to our guest today. Joining us here in Yorkshire and

Lincolnshire, Diana Johnson is the Labour MP for Hull North and in our

Westminster studio, is Martin Vickers, the Kvyat MP for

Cleethorpes. Outline your opening positions on HS2, do you think it

will benefit your constituents? Well, I sup port HS2 in principle

but there isn't a blank cheque and we immediate to keep an eye on the

cost, but I want to see investment in rail across the north, and I have

come on the train from Hull and it has taken a long time to get the

Leeds, which isn't too far away, I would like some HS1 for our part of

the world first. What about your Martin Vicor, can you justify the

thick end of ?50 billion? I will attempt to. It is 50 billion but it

is over a period of 17, 18 years and in fact, of course some of that is

picked up by the rail operating companies with rolling stock, there

is a large contingency to avoid the blank cheque that Diana speaks of.

We will chat more in a minute, you may or may not be surprised to learn

that train services in some areas were faster in the 1920s, than they

are today. 90 years ago passengers could travel from parts of

Lincolnshire to London half an hour faster than the modern day. Now we

have heard about the proposed benefits of heist highs for cities

like Leeds but will other part of the network get left behind? Some

call it the golden age of rail travel.

This is the East Coast Mainline recreated in its 1940s glory.

Back then this Lincolnshire had a network of lines, criss`crossing the

County. It wasn't to last. Before the Beeching cuts of the

'60s, train travel from Lincolnshire looked very different than it does

today. Take Boston for an example. Back in the 1920s, there were round

six direct services from Boston to London most days.

The whole journey took two`and`a`half hours.

It was one of the fastest pieces of Railtrack in the country, straight

line, runs across the fens as it did and the trains could get up a fair

old speed you had a fast service to London. It was the HS2 of its time

Not perhaps on that level, it was a secondary plain line but it was

still a fast main line with top class locomotives and through trains

to London. And this is today's service. Passengers here will pick

up this train, and travel to Grantham. Where they will have to

change. Because there are no direct services to London today.

What is more, the entire journey takes just under three hours.

Passengers have mixed views on local services. Would you be Navdeep Suri

priced if I said to you 90 years, would you be surprised if I said

there were direct services to London and it took half an hour quicker

than it does now? That surprised me, in that case they should bring it

on. It is probably because we are not used to do doing it because it

is such a bad journey. The highly expensive HS2 won't put back what

Beeching took out. But according to an official report by KPMG it will

boost the UK economy by ?15 billion a year, and the Lincolnshire economy

by ?115 million. HS2 is is not the only game in town, and for somewhere

like Lincolnshire there are a lot of good news stories. There will be

space released on the East Coast Mainline, that will make for better

journeys between possibilities of more direct journeys between Lincoln

and London, more direct journeys between Hull and London, better

regional service, all of these opportunities are there when HS2 is

is there to supplement and complement the East Coast Mainline.

But one leading conservative councillor in Lincolnshire describes

HS2 as a vanity project, saying the money would be better spent

improving existing road and rail links. The one thing we do know is

when they build it, if they build it it will be considerably more

expensive than ?50 odd billion. Fraction of the money spent on the

country's roads, and spent on some key bottleneck, to upgrade the

Victorian struck we have, it is scary some of the rail

infrastructure is over 100 years old. We could spend a fraction of

that money and get better returns. HS2 is a long way down the track. In

cam `` campaigners say money should be spent now to keep Lincolnshire

moving. The joys of model railway, I can

watch that footage all day. Diana Johnson, the chap from HS2 was

saying that places like Hull will share in the economic benefits of

HS2, do you buy that argument? I think first of all we have to accept

we need to invest in infrastructure, and we vent done enough of that in

the past. I do think that the point that was made about additional

capacity being made available on the East Coast Mainline will be

important to places like Hull because we have a restricted

service, if there is more services that can run that is great. I have

to say I am really still concerned that we make sure that we invest in

the trans`pennine network as well as between Doncaster and Hull and

Selby, because at the moment the electrification planned between

Doncaster and Hull will stop at Selby. I can't see the sense of

that. There is a rot lot of regional investment that needs to go in. Let

me put that point to Martin Vickers. Are you satisfy we will get more

investment that we need in the regional railways? That is right.

The Department of Transport have announced their package of spending

over the next five or six years and the electrification that Diana

mentioned will be fairly extensive. I agree that the Selby to Hull issue

needs resolved quickly and hopefully in the more medium term we will have

electrification of the south trans`pennine route from Cleethorpes

to Manchester. Where there the money come from? The money is already

committed. It is there in the projected spending for the

department over the next spending period. I think, you know, we have

to maximise the opportunities here, this is a massive infrastructure

project, HS2, which is a good for the supply chain, not only people

like Tata Steel, but there will be opportunities for other local

businesses to get involved. But it is a disappointment that the east

coast has been put out to franchise again, although at the moment it is

making a profit for the public sector, that money could be used to

do some of this additional work that needs to be done. Is a shame the

Government has turned its face against keeping it in the public

sector. We have to recognise that privatisation has been a massive

success. Not on the east coast. It failed twice. We have got massive

growth, 50% more freight growth in the period since privatisation, we

are dealing with a success story here Not on the east coast. That is

the problem. We can debate that at great length. I am happy to. I am

looking forward to a new franchise operator, we will introduce new

service, hopefully to the Grimsby Cleethorpes area as well. It is all

very well for bawls to say we don't want to write this project a blank

cheque. `` Ed Balls. Labour are either committed to this or they are

not Of course this was Labour's policy, this was Labour's initiative

in the first place, Lord Adonis was the minister at the time, he was

pushing this along, this came out of a Labour Government, but what we are

saying is we need to make sure the costs are kept under control. That

is is responsible thing to do. You can't give a project a blank cheque

and get on with it. You need to have financial control. Many people I

suspect in our area today will say why aren't we investing more in

snroeds Again, there is considerable investment in roads, is a part of

the department's projected spending. I agree there are areas round here

that need that, but, let us concentrate here on the railway, we

have a success story, privatisation has been a great success. Really?

The north Lincolnshire area is a massive freight operation, and the

investment will allow more freight to pass through to other parts of

the country as well as passengers. 's For ordinary people they say to

me, the actual cost of tickets now is a real issue and they are going

up, well above inflation, I think there is real concern that we are

not making the best of the railways and web are not getting as many

people using them as we could. I think the Government need to do

something about that. I would agree on that, we have to have pressure on

the price issue, although there are bargains to be had. We shall move on

now. As MPs debated proposals for an EU referendum this week, a familiar

voice merged from the shadows. Multimillionaire businessman and

leading Euro`sceptic Paul Sykes said he would do whatever it takes to

ensure UKIP succeeds in next year's European elections. Len Tingle

caught one the Barnsley`born tycoon, at his home in North Yorkshire.

At his home near Ripon Paul Sykes was overseeing the first wave of an

advertising campaign aimed at boosting the political fortunes of

UKIP. The blunt speaking Yorkshireman said he made his money

as a British businessman and he is willing to spend us to free us from

a European Union he says is evil. I mean 1,000 million `` I made 1,000

million. They have millions off me in tax, now I am campaigning to keep

my nation sovereign and free. His home movies shows how he made a

million. The coal reminder's son started scrapping old buses You give

me a crowbar around I can get in off this bus quicker than you can say

Jack Robinson. E has rung the bell on the buses business and hopped off

at property development. He was turning an abandoned steelworks into

the Med doe hall shopping centre. He has been using his money to fight

the EU and the launch of the euro ever since. First as a Kvyat, by the

2004 European election he had switched to UKIP. Aiding a four fold

increase in seats for the party. But almost immediately, he fell out with

party leaders. Then, on Monday came this. Back with UKIP and his Walt.

You will say you will do whatever it takes, how much will it take? Well,

you have a limit of 4.5 million. Back at his North Yorkshire home he

said he is thinking about the European elections and shrugs off

suggests that boosting UKIP's fortunes could be a major longer

term danger to the Conservatives. UKIP could take votes at the general

election, from Kvyat candidates in those swing seats letting in Labour.

I have done this before. Every time you go back to the Conservatives

they have more European Union, more powers they are giving away. Len, if

me and Jimmy Goldsmith hadn't spent our money on campaigning against the

euro we would have been in the euro now. I am telling you here and now

this will not last. The European Union will break, we need to get

free from it. We need to get our borders back, we need to get to be

an independent nation that trades with the world as well as with the

European countries. So have the Conservatives nervous that this sort

of advertising campaign will sprit its vote? It is a suggestion UKIP is

anxious to play down. I think that is ridiculous. You look at all the

opinion polls for the European elections that are suggesting it's a

challenge as to whether Labour or UKIP are going to win. For the party

that looks like coming in third that the party coming in second or first

is going to split their vote is ridiculous. If they get 24 MEPs,

that gives them a lot of money to play with for the next election. So

they can use that money to then run the Westminster elections and

possibly make a breakthrough there. I don't envisage them getting more

than half a dozen possibly a dozen MPs, but it would be a fantastic

score for them. They will eat into the Conservative vote, and also, in

part of the south, the Liberal Democrat vote and the north, the

Labour vote. So they will be the people who will determine the

outcome of the next general election in May 2015. UKIP leader Nigel

Farage brokered the deal of regaining the Sykes millions, but he

has landed more than a silent partner. Me and Nigel work well. He

is articulate. He has learned a lot. I binned him in 2004, got some, said

you're finished. He is different I know. We have different people now.

I am not leaving them alone. ? You say you a great supporter of

democracy, why should you have a bigger say than anybody else I paid

money out to keep Sweden out and Denmark. I, why shouldn't I pay for

information, for them Swedes to read, and Denmark to read, that kept

them out the euro? Will there be more, he is now ruling out standing

as a UKIP candidate in 2015. He will be taking to the European campaign

trail, in the coming months. So how worries are you that Paul

psychs is bank rolling UKIP again? It is a concern, I mean, if Mr Sykes

is genuine in his desire to get Britain out of the EU, that will be

through the mechanism of referendum, but the reality is the only party

that can deliver a referendum is the Conservative Party. We have heard

there that the UKIP could split the Conservative vote, and that can only

result in one thing, more Labour MP, Labour Party are committed against

the referendum. Many of your Conservative colleagues don't agree.

I know on Friday you voted for a referendum next year, Paul Sykes

wants that but why does the rest of your party not want that? The

reality is the build up we were debating allows for a referendum

next year. It stays that the referendum must take place before

the end of 2017. But, you know, the fact is that the chances of having a

referendum before the general election are remote. Let us be

honest about it. We have to face the fact. My anti`euro credentials are

solid. They predate most of the UKIP supporters. I voted to come out in

the 1975 referendum and I will campaign in same way when we have

the referendum. But we will only get that referendum if we have a

Conservative Government. It is interesting Diana Johnson, we expect

UKIP to take votes off the Conservatives at the euro election,

but the last European elections they came top of the poll in Hull. How

worried are you about what Paul Sykes is doing? I think UKIP feed

into this anti`politics mood at the moment. Perhaps the Liberal

Democrats have been where people put a protest vote. Now the Liberal

Democrats are the party of Government, I think people are

protesting by voting for UKIP. I think if more people look at their

policies though, and explore what they would do, so they have got some

anti`women policy s I think their economic policies are from the 50,

they are not addressing the needs of 2000? 13. To remove ourselves from

the largest market we have at the moment, just seems to me when people

explore that and look at it properly, they may well take a view

they are not wanting to support UKIP.

Martin Vicor, one of your own Conservative ministers Nick Boles

said young voters see your party as aliens from another planet. What

planet are you from? I am from planet earth and Cleethorpes is

sound. Nick Boles goes off at a tangent on a number of occasion, on

this one he, he is just way off beam. In so`called decontamination

of the Tory brand David Cameron has been trying to do, it is a fillure?

I would reject that, the reality is we have got to look at the world as

it is and face it. The problem with the UKIP agenda, and I agree with

Diana in as much as many of their supporters are anti`politics and

wanting to to turn the clock back. Any Government that comes to power

will in 2015 will have to look forward and it's a different world

to the one that many UKIP supporters would like to see. Much as we may

regret it. Interesting comments from David

Cameron this week, Downing Street say he didn't say this but he was

quoted as saying we have to do something about the all this green

stuff? I have to say I am furious where the Prime Minister, because as

a Hull MP, who is very supportive of the renewables in industry and

building that up in the UK and in Hull in particular with hopefully

see Mondays coming to the city. Having the Prime Minister talking

about that is unhelpful to making sure we can get the invest it.

Intour country. It is where the economy could see growth if we

became a centre of excellence for renewables. The Prime Minister is

wrong and Ed Davey and the Prime Minister it seems to me are on a

collision course on this. I have to say I have been with the Prime

Minister this morning and he flatly denies he said that. We have come a

long way since hug a husky. Let us get more of the political news.

Disgraced former Co`operative Bank chairman Paul Flowers has been sceed

by police. Mr Flowers is an ex`Bradded for councillor and

Methodist minister suspended by church and the Labour Party,

following allegations that he bought and used illegal drugs. Former MP

for Rotherham Denis MacShane admitted obtaining almost ?13,000

through fraudulent expenses claim, McShane, who resigned last year was

minister for Europe in Tony Blair's Government. He will be sentenced at

the Old Bailey next month. And it was celebrations all round on

Thursday when Hull was named City of Culture, but the Prime Minister

found himself under fire from another of his heroes after he

mentioned 1980s band the housemartins while congratulating

the city. The band's former lead singer Paul Heaton took to Twitter,

telling fans when I took over my pub in Salford the first people I barred

were Cameron and George Osborne. That ban still stands.

We will talk about that in a moment. Diana Johnson, how damaging has the

Paul flowers business been for Labour? Well, I think it is

obviously a very difficult time for the Co`op. Of course the Co`op are a

long`standing institution in this country that have done an enormous

amount of good work. Clearly, there is investigation that needs to take

place about how this man became the chair of the bank. What I would also

say is I do think the Government have been in power for three year,

the Treasury, the Chancellor, the regulator, what have they been doing

to watch over what is happening to the Co`op? So they have questions to

answer, I know a lot of mud has been thrown at the Labour Party this week

but I think the Government need to answer serious questions about what

they have been doing? There was a perception in the Labour Party that

the Co`op movement and the Co`operative Bank in particular were

holier than thou, they were an ethical bank, that was not the case?

I think generally across all political parties there was a view

that mutuals are a good thing that, the Co`op has a long history, great

tradition, it has been affiliated to the Labour Party since 1917. The

Conservative Party have talks about mutuals: We have to recognise the

Labour Party and the Co`op are joined at the hip so the Labour

Party have to answer most of the questions. I would agree with Diana

that the regulators have, I am not a great fan of regulator, they seem

too wedded to the, the organisations and companies they are regulating,

rather than on the side of the customer, but on this one they have

some serious questions. So congratulations to Hull winning

UK City of Culture, what will it mean to the city? It is an enormous

boost. An enormous boost at a time when things are difficult in Hull

but it means that we have got the focus of the country on us now, we

have had excellent publicity since Wednesday, the first time the

national media has been saying positive things about Hull. Long may

that continue. Do you the think there will be benefits for the wider

region? I am sure the tourist trade in Cleethorpes will putting up post

ers in Hull, directing people to the Humber Bridge and come and see the

sun, sea and sand of Cleethorpes. Happy hour in Hull again. Thank you

for your time today. With that, we will go back to Andrew Neil

will be returning to this one. Thank you.

A little bit of history was made at Prime Minister's Questions this

week. A teensy tiny bit. It wasn't David Cameron accusing one MP of

taking "mind-altering substances" - they're always accusing each other

of doing that. No, it was the first time a Prime Minister used a live

tweet sent from someone watching the session as ammunition at the

dispatch box. Let's have a look We have had some interesting

interventions from front edges past and present. I hope I can break

records by explaining that a tweet has just come in from Tony McNulty,

the former Labour security minister, saying that the public are

desperate for a PM in waiting who speaks for them, not a Leader of the

Opposition in dodging in partisan Westminster Village knock about So

I would stay up with the tweets if you want to get on the right side of

this one! We are working on how the Prime Minister managed to get that

wheat in the first place. What did you think when you saw it being read

out? I was certainly watching the Daily Politics. I almost fell off my

chair! It was quite astonishing He didn't answer the question - he

didn't do that the whole time. But I stand by what the tweets said. I

have tweeted for a long time on PMQs. Normally I am praising Ed

Miliband to the hilt, but no one announces that in Parliament!

Because the Prime Minister picked up on what you said, it unleashed some

attacks on you from the Labour side. It did, minor attacks from some very

junior people. Most people were supportive of what I said. They took

issue with the notion of not doing it until 12:30pm, when it wasn't

available for the other side to use. Instant history, and instantly

forgettable, I would say. Do you think you have started a bit of a

trend? I hope not, because the dumbing down of PMQs is already on

its way. Most people tweet like mad through PMQs! Is a measure of how

post-modern we have become, we have journalists tweeting about someone

talking about a tweet. That is the level of British politics. I am

horrified by this development. The whole of modern life has become

about observing people -- people observing themselves doing things.

Do we know what happened? Somebody is monitoring the tweets on behalf

of the Prime Minister or the Tory party. They see Tony's tweet. They

then print it out and give it to him? There was a suggestion that

Michael Goves had spotted it, but Craig Oliver from the BBC had this

great sort of... Craig Oliver was holding up his iPad to take pictures

of the Prime Minister, which he then tweeted, from the Prime Minister.

People will now be tweeting in the hope that they will be quoted by the

Prime Minister, or the Leader of the Opposition. I wasn't doing that I'm

just talking about the monster you have unleashed! I hope it dies a

miserable death. I think Tony is a good analysis -- a good analyst of

PMQs on Twitter. Moving onto the Co-op. You were a Co-op-backed MP,

white you? I was a Co-op party member. There are two issues here

about the Co-op and the Labour Party. All the new music suggests

that the Co-op will now have to start pulling back from lending or

donating to the Labour Party, which, at a time when Mr Miliband is going

through changes that are going to cut of the union funds, it seems

quite dangerous. There are three things going on. There's the

relationship that the party has politically with the Co-op party,

there is the commercial relationship you referred to, and then there is

this enquiry into the comings and goings of Flowers and everybody

else. The Tories, at their peril, will mix the three up. There's a lot

of things going on with a bang. Labour has some issues around

funding generally, and they are potentially exacerbated by the Co-op

issue. The Labour Party gets soft loans from the Co-op bank, and it

gets donations. ?800,000 last year. Ed Balls got about ?50,000 for his

private office. You get the feeling, given the state of the Co-operative

Bank now, that that money could dry up. We will see. There's lots of

speculation in the papers today At the core, the relationship between

the Co-op party and the Labour Party is a proud one, and a legitimate

one. I don't think others always understand that. Here is an even

bigger issue. Is it not possible that the Co-op bank will cease to

exist in any meaningful way as a Co-op bank? Is the bane out means it

is 70% owned -- the bail out means that it is 70% owned, or 35% going

to a hedge fund, I think I read Yes, there is a move from the

mutualism of the Co-op. But don t confuse the Co-op bank with the

Co-op Group. Others have done that. I haven't. Here's the rub. The soft

loans that Labour gets. They got ?1.2 million from this. And 2.4

million. They are secured against future union membership fees of the

party. What is Mr Miliband doing? He is trying to end that? You have this

very difficult confluence of events, which is, could these wonderful soft

loans that Labour has had from the Co-op, could they be going? And

these union reforms, where Ed Miliband is trying to create a link

between individuals and donations to the Labour Party... Clearly, there

could be real financial difficulties here. The government needs to be

careful, because George Osborne launched one of his classic

blunderbuss operations this week, which is that the Labour Party is to

blame for Paul Flowers' private life. No, it's not. And that all the

problems, essentially... Look at what George Osborne was doing in

Europe. He was trying to change the capital requirement rules that would

make it easier for the Co-op to take over Lloyd's. If there is to be a

big investigation, George Osborne needs to be careful of what he

wishes for. This is another example of the Westminster consensus. All of

the Westminster parties were in favour of the Britannia takeover.

This is how the Co-op ended up with all this toxic rubbish on its

balance sheet. All the major parties were in favour of going to get the

Lloyds branches. The Tories tried to outdo Labour in being more

pro-Co-op. There was nobody in Westminster saying, hold on, this

doesn't work. It is like the financial bubble all over again

Everyone was in favour of that at the time. I think there is no

evidence so far that the storm is cutting through to the average

voter. If I were Ed Miliband, I would let it die a natural death. I

would not write to an editorial column for a national newspaper on a

Sunday. That keeps the issue alive, and it makes him look oversensitive

and much better at dishing it out than taking it. I agree about that.

The Labour press team tweeted this week saying that it was a new low

for the times. And this was re-tweeted by Ed Miliband. It isn't

a great press attitude. It is very Moni. Bill Clinton went out there

and fought and made the case. So did Tony Blair. If you just say, they

are being horrible to us, it looks pathetic. And it will cut through on

Osborne and the financial dimensional is, not political. I

shall tweet that later! While we have been talking, Mr Miliband has

been on Desert Island Discs. He might still be on it. Let's have a

listen to what he had to say. # Take on me, take me on.

# And threw it all, she offers me protection.

# A lot of love and affection. # Whether I'm right or wrong #.

# Je Ne Regrette Rien. #. Obviously, that was the music that

Ed Miliband chose. Who thought - you would have thought he would

choose Norman Lamont's theme tune! He chose Jerusalem... He has no

classical background at all. He had no Beethoven, no Elgar. David

Cameron had Mendelssohn. And Ernie, the fastest Notman in the West. --

fastest milkman. Tony Blair chose the theme tune to a movie. Tony

Blair's list was chosen by young staffers in his office. It

absolutely was. Tony Blair's list was chosen by staff. The Ed Miliband

this was clearly chosen by himself, because who would allow politician

to go out there and say that they like Aha. I am the same age as Ed

Miliband, and of course he likes Aha. That was the tumour was played

in the 80s. Sweet Caroline. It is Angels by Robbie Williams. I was

14-year-old girl when that came out. I thought Angels was the staple of

hen nights and chucking out time in pubs. The really good thing about

his list is that the Smiths to not appear. The Smiths were all over

David Cameron's list. The absolutely miserable music of Morris he was not

there. What was his luxury? And Indian takeaway! Again, chosen for

political reasons. I would agree with the panel about Aha, but I

would expect -- I would respect his right to choose. Have you been on

Desert Island Discs? I have. It took me three weeks to choose the music.

It was the most difficult decision in my life. What was the most

embarrassing thing you chose? I didn't choose anything embarrassing.

I chose Beethoven, Elgar, and some proper modern jazz. Anything from

the modern era? Pet Shop Boys. That's all for today. The Daily

Politics will be on BBC Two at lunchtime every day next week, and

we'll be back here on BBC One at 11am next week. My luxury, by the

way, was a wind-up radio! Remember, if it's Sunday, it's the Sunday

Politics.