ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Let’s take you through this morning’s papers with former Lib Dem leader, Charles Kennedy; Labour Shadow Minister for Public Health, Diane Abbott and Conservative MP, Nadine Dorries, good morning to you all, thank you very much for coming along and Charles, if you can kick us off with I suppose the story of the moment, your fellow countryman, let’s hope he’s crowned Wimbledon champion some time later this afternoon.

CHARLES KENNEDY: And if he is he’ll be British and if he comes second he’ll be Scottish, I can guarantee it but what I like, I mean it’s Murray, Murray, Murray, as you would expect, all over the place and if he does win, God knows what tomorrow’s press is going to be like, I don't know, but I like the Independent on Sunday front page just because this is the most smiley photograph I have ever seen, I don't know what the photographer did to induce this – who is it? – to induce this smile but it’s nice to see him smile and let’s hope he gives us all a lot to smile about later today.

DIANE ABBOTT: It’s going to be so nerve wracking. Did you watch the penalties in the football?

DM: Of course I did!

DA: I was hiding behind the sofa! This is going to be like that.

DM: This is going to be an intriguing, leaving out the nationalistic side of things, it’s going to be an intriguing battle because we have Roger Federer who’s seen as a bit over the top at the age of 30, the master who has played imperiously all his way to the Wimbledon final and Andy Murray, who is playing brilliantly too.

NADINE DORRIES: He is and it’s interesting to note how many people who describe themselves as English are today British suddenly. I observed this in the supermarket yesterday and so everybody is being British today. It’s going to be a fantastic day today, everybody’s behind him and it’s everywhere. What I’m worried about actually is it’s been so hyped up, so much depends on him and rests on his shoulders that if he doesn’t do it today it’s going to be pretty disappointing.

DA: It’s a huge amount of pressure but let’s think of his mum. If we’re going to be nervous, his mum is going to be beside herself.

CK: And we’re going to get history. I mean word historic gets so misused in politics and everything else but it will be historic. Of course if he wins that will be unbelievable history obviously but if Federer wins he equals Sampras’s all time record as well so whatever happens, we can confidently say on Sky News this morning, it’s going to be an historic outcome for this match.

DM: We heard that from Charles Kennedy there, a mouth-watering prospect. I’m not sure if Diane’s story, next one, is mouth-watering, Ed Miliband’s banking revolution and we’ve been talking about that in our news bulletin. He is going to make a speech tomorrow, your leader, Diane, coming up with a prescription for the banks. Haven’t we heard it all before, breaking them up and removing the retail division from the investment and all of that?

DA: It’s not been done though. I mean one of the striking things about this story, it’s in the Mail on Sunday, a Tory paper, and it is a halfway civil interview which shows I think that Ed is tending to call it in the way that the mainstream press regards him. No, I think this is a Millie Dowler moment, public opinion on the banks has turned, I think Bob Diamond and that Libor fixing, even if people don’t really know what the Libor is, it’s the moment when the public says no, these people have gone too far and they want some practical remedies.

DM: Practical remedies and a judge led inquiry.

DA: Well we didn’t get that, we’re going to have a parliamentary inquiry, I’ve been on parliamentary select committees, I know their limitations but we’ll do our best to make it work but the key thing is when Ed talks about the Serious Fraud Office and their role because when MPs fiddle their expenses we go to prison. It is very interesting, this whole Libor thing is led not by the FSA, it was led by the American authorities and we need to go down the American route where, where bankers are convicted of fraud they go to prison.

ND: But it was actually the negligence of the FSA that allowed this culture based in the City and in banking to actually grow. The FSA are absolutely toothless, they’ve been negligent in the way they’ve behaved over the last ten or fifteen years and it is actually the impotence of the FSA, they have allowed this arrogance and this fraudulent behaviour to go on and I’m afraid this was under thirteen years of Labour and two years of us. We actually we are complicit, the last few years, one of the first things we should have been doing was something about the FSA. I made a speech in the House of Lords two years ago when a stockbroking firm that I personally know of were taking people’s life savings away from them, they had been through an FSA investigation, come out the other side, reformed themselves and started again. The FSA is completely impotent and incompetent and it is that which has allowed this culture to grow.

DM: Do you think this is a turning point as Diane said, this is a Millie Dowler moment, an MPs expenses moment, where the public are saying we will not accept this?

CK: Oh I think so, I think we’ve crossed that already with the public, I think the public are well ahead of parliament actually on this one, not for the first time, but the other interesting thing that Diane was saying about Ed Miliband’s interview, which I agree is very good, he is really expanding on what the coalition is doing at the moment in terms of forming new banks and so on. There is the makings here, despite all the blood and thunder of last week, of a degree of all party consensus about banking reform ….

DA: Driven by the public.

CK: Driven by the public and I think that if you could take the Ed Balls, George Osborne poison out of the system you could actually across the floor of the House of Commons get a fair degree of consensus.

DM: Do you agree with that?

ND: Absolutely and I thought last week was a sad moment for parliament, it was a very unedifying debate, it was embarrassing frankly and the Ed Balls, George Osborne exchange …

DM: Who was most embarrassing for you? I mean George Osborne, he led the charge, he wrote the article.

ND: I think they both were, it was just an unedifying hour in parliament, it was one we could have done without. Ed Balls actually has constantly behaved like this, the hand signals that he makes across the despatch box and they both needed to grow up. It was like two schoolboys last week, they both needed to grow up, it was a very serious issue which was being debated and I think that parliament let itself down slightly but Charles is quite right, take that out of it, take Ed Balls and George Osborne out of it, I think you’ll find most of the MPs on both sides of the House of Commons would like to get to a consensual point on this and move it forward for the benefit of politics.

DA: Just quickly on bankers and arrogance. I was on the Treasury Select Committee in the 90s and we inquired into the collapse of Barings, we inquired into the collapse of BCCI, long before the FSA. As for Ed Balls and George Osborne, well if you find that unedifying you wouldn’t have wanted to be an MP in the 18th century, that was mild compared to what MPs used to be like!

CK: You can remember it, Diane, can you? You were there?

DA: I’ve read about it, I’ve read about it!

DM: Nadine, this issue of Lords reform, I was discussing it earlier in the programme, it’s seen as a test of your leaders leadership and how he controls on that issue.

ND: Well it is going to be a very interesting week next week. I am one of the MPs who will not be voting for this I’m afraid Charlie.

CK: Why am I not surprised?

ND: But I can assure you it is not just me and the usual, the 81 who voted in the Europe referendum vote, there are quite a lot of MPs who won’t be voting for this, as many as 110. The whips are putting pressure on and that number will possibly come down but I still think it will be enough to bring about a defeat. The interesting thing is that the government didn’t actually need to bring forward the programme motion but they are doing and if it is voted out then this Lords Reform debate could go on ad infinitum, for the next year we could be discussing Lords reform because that means there will no limit on the amount of time that could be spent discussing it and it will be talked out. We will see the return to the days of filibustering where you have MPs talking for ten, twelve hours at a time.

DM: But isn’t there an element in your objections as well that it’s about the Liberal Democrats isn’t it, it’s about the tail wagging the Conservative dog?

ND: Well your party said let’s have a referendum on AV and we’ll give you boundary commission vote and now what you’re saying is actually no, we lost AV so that doesn’t matter, what we want is Lords reform. This is about the Liberal Democrats knowing that at the next general election they face wipe-out so what they want to do to secure their future is to have an elected House of Lords via an AVPR system which they can go to their activists and say well look, we lost it in the Commons, we’ve got no MPs left, we’re only coming back with ten MPs rather than sixty or whatever, but we’ve got this in the Lords.

DM: You’re sat there very quietly, Charles Kennedy, but I’m sure you’ve got a riposte so let’s hear it.

CK: Well I just wish there was that degree of sophisticated forward planning in the Liberal Democrats, it’s an interesting conspiracy theory but I don't think it’s much more than that at the moment.

ND: So why are you blackmailing us then?

CK: Well I don't think anybody is blackmailing anybody.

ND: The Liberal Democrats, they are saying if you don’t give us the vote on Lords reform we won’t give you boundary control, it’s reported today.

CK: Nick Clegg has made it absolutely clear that he is not approaching it in that way and he speaks as the leader of the party after all. The point I would make is we take a pretty relaxed view about this, it’s part of the Coalition Agreement. All three parties in fact were committed to House of Lords reform and …

ND: Not peer selection.

CK: Well a degree of House of Lords reform and this has been through, as you heard in the earlier interviews, all sorts of committees and consultations and all the rest of it. This is as much David Cameron’s handprint on this as it is Nick Clegg’s remember, so I’m sorry if some Conservatives are not going to give it support but that’s a decision for them. Equally I’m sorry if the Labour party, they shouldn’t be allowed off the hook on this one either …

DM: But the Lib Dems are relaxed about it, the Lib Dems are saying we’ve heard it from Nick Clegg’s strategy director, he was saying that …

CK: Yes, but that was pretty much disavowed by Nick Clegg so …

ND: Was it? I didn’t see that, where did he disavow this, where has he rebutted this? I haven’t seen that, I’ve only seen the statement this week from Richard Reeves, we will, we want, we will not give boundary commission vote if we don’t get Lords reform, there was no denial by Nick Clegg.

CK: Oh there was. David Laws was out on the airwaves including Sky News saying that …

ND: That’s not Nick Clegg.

CK: … making clear that that’s not the case.

DM: Diane Abbott, Labour are loving all this, a chance to make a lot of mischief here and perhaps even bring the coalition down.

DA: It’s sad to see both sides of the coalition squabbling …

DM: Really?

DA: … with this internal quarrel. No, we’re in favour of Lords reform. Ed Miliband is particularly keen on Lords reform.

CK: Make us virtuous, but not just yet oh Lord.

DA: But we don’t think there should be a guillotine on debate, we think it’s too important a subject but I have to say, I have to say …

ND: Are you mostly against the programme motion then Diane?

DA: Well this is something there is internal discussion about. What I would say is this …

ND: So that would be no.

DA: … when you tell the Tory back benchers that if you vote against Lords reform that might also kybosh the boundaries review and if people think that’s a disincentive for Tory MPs to vote against Lords reform, they’re crazy. The boundary review and the changing of boundaries is unpopular with a lot of back bench MPs.

DM: So now we get to another conspiracy theory, unpopular with you and you’d be threatened and you’d be threatened as well wouldn’t you?

ND: I’m out.

DA: Well there, you see.

CK: I think obviously the whole ambit of constitutional reform issues, as Nadine fairly says, I mean you can’t deny what’s happened in recent history. AV flushed down the plughole by the electorate at the ballot box, we do have fixed term parliaments, we have had in fact European constitutional reform in the sense that there’s legislation saying a future treaty, if it meant more powers going to Brussels, there’s have to be a referendum so there has been a degree of constitutional reform. Whether we can achieve more, obviously I hope we can but that’s very much in the gift of the parliamentary Labour party, and I’m intrigued by what Diane has just said about what they may or may not do on this process vote …

DM: We never got the yes or no, maybe you’ll get one as you exit this studio because I’m about to throw you all out, not to put too fine a point on it! Thank you all very much indeed, Charles, Nadine and Diane Abbott, great to see you here on Sky News.