JOHN HUMPHRYS: That name "Brussels" ... guaranteed to raise the hackles of every red-blooded Briton. Or so it would seem if we're to believe what most of our newspapers and the opinion polls tell us. Last week, Mr Blair teamed up with his political enemies to try to persuade us that we should put aside our reservations and learn to love our Continental cousins. The ultimate objective: to win our support for the Euro. The problem is that so long as suspicion of Brussels and all its works remains, the British are never likely to be enthusiastic. Quite a task, then, for the British government ... And for the European Commission. Its vice president is the former leader of the Labour Party, Neil Kinnock. I spoke to him earlier this morning from Brussels and pointed out that the one thing no-one seemed very keen to talk about was the Euro. So even if even THEY are shying away from it, how can WE be persuaded? NEIL KINNOCK: Well I didn't detect an absence of willingness to talk about the possibilities of the Euro. What is evident and of course is well established policy, that requires certain basic economic conditions to be satisfied and then to submit the matter to the British people so..in that referendum. So consequently, you wouldn't expect an endless discussion on the possibilities when the policy is so well established. HUMPHRYS: The big issue is Britain's membership, ultimately or otherwise, of the Europe isn't it. Do you believe that being a fully, ultimately being a fully committed member of Europe means joining the Euro? KINNOCK: I don't think that the two are absolutely interchangeable. I think there's a rationale developing for membership of the Single Market and the development of the Euro that says when economic conditions suit the rather differently structured economy of the United Kingdom, then it is sensible to put the issue to a referendum. Meanwhile, of course, everybody has the opportunity to judge the success of the Euro as a currency arrangement that facilitates investment, development, employment and so on. And I think when we reflect on the fact that the interest rate in the United Kingdom at the moment is five and a quarter per cent and in the Euro zone two and a half per cent, then questions are bound to be asked about which kind of environment in the medium to long term is most conducive to investment, to sustainable growth and to generating employment, but it is a medium term question. HUMPHRYS: But ultimately we are going to have to join aren't we, ultimate. I mean..you talk about the medium term environment, in the long term we are going to have to join, aren't we, if we are going to be fully committed. KINNOCK: I think that the test is not one of full commitment. I think it is one of practicality.. HUMPHRYS: ..well I was picking up your phrase from earlier.. KINNOCK: ..in practicality, in due course, practicality means that one of Europe's largest economies, which is very closely integrated in trading terms, both in services and in tangible goods, will be part of the Euro zone. The question, of course, is when and on what terms, in which conditions, and it's quite natural that the British government and others should argue for those terms to be as conducive to British interests as they possibility can be. HUMPHRYS: Right, so using your test, we will lose out ultimately, if we don't join? KINNOCK: In the medium term I think that there would be disadvantages both in terms of the value of our currency, the facility for our exporters and therefore the prospects of sustainable growth. But it is a medium term question. HUMPHRYS: So, therefore, Tony Blair, surely, should be creating a climate, put it no stronger than that at the moment, but at least creating a climate that suggests people ought to be feeling rather warmer towards the Euro, indeed to Europe as a whole, than they are at the moment. KINNOCK: I think that an attempt to create a climate would be difficult when people will make the judgement about the acceptability of the Euro on very basic and objective grounds, whether they as individuals will be better off, whether the companies they work for will be better off, whether the economy overall will be better off. And so the climate will be created by those objective realities and not by propagandising. In the meantime, of course, what Tony Blair and the rest of the government are sensibly doing and have been since October 1997, is making preparations for the full development of the Euro zone with which we will be engaged, whether we are members by let's say 2002, or 2003 or not. Now, the extraordinary thing is, that there are elements in British politics, including the leader of the Conservative Party, that are even against that preparation and that must make him the first political leader in all history, certainly since King Canute or Ethelred The Unready perhaps, to make a strategy out of not preparing for something that will have a direct impact inevitably on the way in which we conduct ourselves as an economy in the United Kingdom. HUMPHRYS: Well if you believe it's going to happen of course, but you have no doubt, you are absolutely clear.. KINNOCK: No, sorry, John, the Euro exists.. HUMPHRYS: ...it's happening in Europe yes, it's not happening here yet. KINNOCK: Sorry, the Euro, exists. We do something like fifty-five per cent of our trade with the Euro zone. We are a major banking and finance economy and therefore not to make preparation for the physical engagement even if sterling were to be retained with that Euro zone appears to me to be an extraordinary view of the realities of the present let alone the very strong prospects of the future and the development of the Euro zone with or without the United Kingdom. HUMPHRYS: With or without the United Kingdom but you have no doubt yourself that we'd be better off in the Euro? KINNOCK I think that the practicalities will in the medium term show that. HUMPHRYS: Can I suggest to you some reasons why it is going to be difficult to persuade Britain to love Europe and indeed to love the Euro. Now the problem at the moment, and you're very well aware of this, is that they don't like Brussels, they don't like the Commission and there are very good reasons for not liking them - a very long history of incompetence and complacency and nepotism and all the rest of it and it is going to be very difficult indeed, and this is your job, to turn that around. KINNOCK: Yes that's right. Of course part of what you describe is mythology...... HUMPHRYS: ..... not all..... KINNOCK: No, well there is enough fire under the smoke for people to have reasons to resent the centralisation and the role of an executive administration I fully understand that it's not confined to the United Kingdom and you are right to say that a very significant part of the job that I now have is to change the operation and the character of the European Commission in order to ensure that it is a top class public administration in which the people can have trust and from which they understand they will get value as taxpayers and that's the whole emphasis and the reform mission that I have and Romano Prodi has made very clear, we will accomplish it. KINNOCK: Well let's give you a few reasons why you're going to find it very difficult to accomplish it. One of them is that the big jobs, the Director Generalships are allocated by sort of national quotas, almost a sort of a Buggins term: If the French think it's...... KINNOCK: No, we've stopped that.... HUMPHRYS: Well, you haven't really have you because it's still the case that if, for instance, the French thought it was their turn and for an extra post, not a specific post, I'm not saying 'this particular job is now ours by right' but if they thought it was their turn for an extra post and they wanted to put, frankly, an incompetent into that post in political terms, in real terms it would be very very difficult indeed for you to stop them doing so. KINNOCK: It might be difficult but I'd certainly do it. I think that you will recognise that two weeks ago when I changed the system with the support of Romano Prodi we uprooted traditions that were forty years old. For instance there had never been anything but a French civil servant, as it happens a man of very high capability on this occasion, in the position of Director General for Agriculture. That is stopped and it has changed and we made several other changes which really do get rid of some of the established conventions that did not work in favour of maximum efficiency and accountability in the Commission or the best interests of the European Union as a whole, that's not a reflection on an individual, particularly the one in question, it is a reflection on the way in which an informal quota system came to govern the appointment of very senior positions and that's the system that we've stopped with an absolutely insistent requirement of merit for all posts. HUMPHRYS: Well sort of but you've said that there has to be a broad geographical balance, well you can't have both. You can't have both a broad geographical balance and no sort of quota system at all because if you didn't have a competent Frenchman to do a particular job then you'd have to find an incompetent one in order to have a broad geographical balance that's common sense...... KINNOCK: No, we can have the broad geographical balance which is necessary in an international association of democracies of the kind that we have in the European Union, but if we make the implacable requirement for any form of top job, that of merit, proved to a selection panel which includes independence from outside which is the new system that we've introduced, then we can ensure that yes there is a spread across the member states of people in top jobs but they can only be in that position if they've satisfied basic and universally required requirements of merit. Now that is the system that is going to operate and I'll be, in a few weeks' time, publishing a document which will demonstrate the detail of it but nevertheless I think that the principle is easily understood that the only way in which you can get into the top floor as it were is by satisfying those meritorious requirements, demonstrating your ability to manage and then from there on whatever the distribution of jobs beyond the general acceptance of people from member states it will be a top management of very high merit, that's the requirement that we have. HUMPHRYS: Let's look at how the culture should have changed and isn't changing, and let me give you the name of the man that you will know very well indeed van Buitenen who was, who is, an official and who blew the whistle. He supplied the European Parliament with the document that showed all kinds of things going wrong - waste, incompetence, mismanagement, a great deal of which turned out to be bang on. That's one of the reasons ultimately why the old Commission had to resign. Let me just finish the question if I may. A lot of people would say: He should have had a medal for doing that. Instead of which what happened - he got a formal reprimand. KINNOCK: Yes, the problem is of course that Mr van Buitenen could have made his disclosures to the European Parliament, if he didn't trust the procedures in the commission, but of course he could have done it to President of the Budgetary Control Committee or the President of the parliament or he could have sent it to the Court of Justice or the Court of Auditors. He didn't, he sent it the President of the Green Group and that meant that his material was published. HUMPHRYS: Yes, good, a lot of people would say "Excellent". KINNOCK: Yes, John you finished the question, if I can finish the answer. The problem was of course that all his disclosures related to cases already under either administrative or judicial investigation by the European Commission started long before Mr van Buitenen took his action, and the problem is then as you will realise, is that those cases could be compromised by the publication of that material in an untimely way. That's the fundamental problem. And indeed when the disciplinary board looked at Mr van Buitenen's case what they said was, because he risked this, very seriously risked this, then he should be reprimanded, he broke the rules, but because of the rules at that time were deficient then that moderated the seriousness of what he did and that's why he got off with the second lowest form of penalty you can have which is a formal reprimand. HUMPHRYS: Yes, but that's.... KINNOCK: Now, I think we've got to have proper arrangements for whistle blowing which is why I've proposed the reforms, but even when we've got the best whistle blowing procedures in the whole world as I hope we will get it'll still be necessary to ensure that we don't get untimely disclosure which would compromise serious cases being taken against those who are suspected of wrongdoing. HUMPHRYS: Well yes,..... KINNOCK: I want to get them more than I want to get publicity. HUMPHRYS: Well fine, but I mean what you're inviting people to believe here is that all of this was going to be sorted out anyway if they just waited a bit longer. But I mean, look, we've had forty years of incompetence, and it's a bit remarkable isn't it that a man comes along, blows the whistle and then people say, Oh we were on top of that anyway. Come on, it's stretching it a bit isn't it? KINNOCK: No, it isn't stretching it at all because I'll happily, when we've got longer to do it, go through the cases and show you in each individual case what's happened, including judicial proceedings against some of the people that were involved and indeed others that Mr van Buitenen didn't even mention, and so I can actually go through that. I'm not suggesting that the European Commission's procedures were perfect, far from it, which is why it was necessary to make the commitment to reform and why it is necessary to make that reform. In the meantime of course, there has been real progress with the establishment of a new and completely independent anti-fraud office. Mr van Buitenen says it's not independent. Well frankly it is completely, and I think that any examination of its status will demonstrate that beyond all doubt. So that's been progress, but there is need for further change, there will be further change and the point that I'm making is, even when that change comes, even though during the course of the previous procedures there's been effective action against wrong-doers, it will still be necessary to ensure sufficient security of the new procedures so that we don't have the case against those who should be penalised, prosecuted, brought to justice, undermined by untimely disclosure. That's the problem. HUMPHRYS: The Unions - they are powerful in Brussels to say the very least. Are you prepared to take them on if they say: Look, we are not going to allow people to be sacked sometimes for incompetence, sometimes even for fraud in some cases. Are you prepared to say, I'm going to take them on, even if it means they're going to walk out and bring the whole thing grinding to a halt. KINNOCK: Well, first of all I don't think that that will happen. I do think that there will be some of the unions who will object very strongly to the reform proposals that I put forward last week, which will actually provide for effective free trade unionism as well as much more effective representation for the staff, but there will be resistance. After twenty-five years of using one procedure you can expect a degree of conservatism. We will however proceed with the reforms which are widely supported amongst many members of staff including members of trade unions, because people are fed up with a system that does produce some of the effects that you've already mentioned as well as failing to properly represent the professional interests of people in all grades throughout the staff here. But again, changing the industrial relations system is an ingredient of reform that must be achieved if we're going to get the sort of accountable and transparent organisation that the taxpayers of the union actually deserve and should have had over the past decade. HUMPHRYS: Some of this may feel a bit reminiscent for you with some of your battles with the left in your party a few years ago, in the Labour Party a few years. A wonder what you made of possibly the left arising again in London - Ken Livingstone after the job of Mayor of London - maybe going to be stopped from getting it. What do you think about that? KINNOCK; Well, I certainly would never vote for Ken Livingstone as a candidate for the Labour Party for the Mayor of London on the basis of his past record, but also on the basis I think of his motivations too. Frankly, the people of London I believe want good, efficient, democratic all-London government to restore, or help to restore vitality to the city and overcome many of its problems. If they want that then I think they will be well advised to vote for Frank Dobson. If they want entertainment then they might be tempted to vote for Ken Livingstone, but I don't think that London wants a kind of daily "Have I Got News For You" which is about where Ken is at.... HUMPHRYS: ...the polls show that people want him. KINNOCK ...so I am utterly against him being a candidate. Pardon? HUMPHRYS: The polls show overwhelmingly that people want him. KINNOCK: Yes, for eighteen months Ken has been running. He's been running on different tickets of course. When he started out he would only run if the Mayor of London had tax-raising powers. I think London needs additional taxes to reduce the possibility of generating jobs like it needs a hole in the head. But he then changed his mind and he's decided to run in any case, but he's had eighteen months to advertise himself and I think these very early polls that we've seen show the effect of that. When people get down to remembering Ken's real record as the man who brought about the destruction of the GLC, the man who invented the London loony-left and everything that went with it, then they'll say we really don't want this guy to represent I think the greatest city in the world, in Britain and in the world. We want somebody who will do the job seriously and do it in the cause of London rather than to provide himself with a permanent platform for opposition., HUMPHRYS: Neil Kinnock, thank you very much indeed. KINNOCK: Thank you. HUMPHRYS: I was talking to Mr Kinnock a bit earlier this morning.