JOHN HUMPHRYS: But first... what a week it's been for John Prescott! Of all the cabinet ministers he has the most business on his plate... and the most controversial. He's got to sort out the mess on the roads and get us out of our cars. The motoring lobby say that's tantamount to declaring war on the car owner. He's got to get the trains running safely, comfortably and on time... and a lot faster than it's likely to happen under the present plans. He's got to push through the partial privatisation of air traffic control even though his own backbenchers hate the idea. And he's got to persuade Londoners that HIS plans for the Underground are better then Red Ken's... thus stopping Mr Livingstone carrying Labour's banner into the election. And on top of all that, as if that's not enough, he's going to have to run the country while the Prime Minister goes off on his paternity leave! Have you cleared your diary for the date yet? (laughs) Has he asked you to stand in whilst Cherie is having the baby? PRESCOTT: We haven't talked about that, but it's wonderful news isn't it - another Labour gain. (laughter) Another target met. HUMPHRYS: Well you're making assumptions there aren't you? Now then - devolution. Onto the serious stuff. Well, serious, some say it's a joke, it's a farce and the.... You are now as a result of your legislation going to be foisting mayors upon cities all over the country - that's the plan isn't it? PRESCOTT: No, we don't foist mayors at all. We're giving them a choice. If they wish to actually have an elected mayor along with other forms of change in local government structure like a kind of cabinet and supporting members, they're the changes we're giving them but it's their choice, we don't foist it and I'm sure they're looking on the London election and watching with some interest those that may be interested in having an elected mayor. HUMPHRYS: I'd have thought they were looking on the London election and holding their sides and saying - 'Thank God that's not happening to us'. PRESCOTT: Well it's their choice. It is their choice and all we do is to give them a choice to have that form of change in local government structure with an elected mayor. HUMPHRYS: And the latest business with Jeffrey Archer has added to the farce hasn't it? PRESCOTT: Yes, and the real lesson of that of course is is the judgement of Mr Hague. He was the man who, Mr Archer told him - 'I'm not a saint. If you're going to elect me bear that in mind.' He was the man that he agreed to go before the Ethics Committee for half an hour. He was the man that endorsed him once he'd been elected and I think therefore his judgement is shown to be wanting in this situation and it does recall the debate on Wednesday when we had an awful lot of great jokes some at the expense of Labour but as Tony Blair said to him - 'good jokes, bad judgement', that's come clear in this particular incident. HUMPHREYS: But at least the process that elected Jeffrey Archer was something like real democracy unlike what's happening in your party. PRESCOTT: Well I think it's right for us to select a candidate. The members will select them. We have an electoral college. I was selected by the electoral college as indeed was Tony Blair and I think that's quite right, that's the procedure as we've decided. We had a bit of controversy about whether you had to endorse manifesto and all candidates have made absolutely clear that if they're elected and nominated as Labour candidate they will endorse that manifesto and carry it out.... And indeed I might say that that took two days but wouldn't it have been better if the Tories had had two days examining Mr Archer before they put him out as a candidate? They might have saved this problem. HUMPHRYS: Well I'm not sure yours is quite as simple as you've just put it..... PRESCOTT: That's factually how it is,...... HUMPHRYS: Well we'll come to that in a minute because the problem is that what you've not got is real devolution. What you're actually saying and what you seem to have been saying for a long time now to the party is - 'you can have anybody you like, you can have any programme you like so long as it's Millbank's choice'. PRESCOTT: No that's not that at all and bye the way on devolution here is a London government, we are giving government back to the Londoners. I mean it was Mr Heseltine this week saying that he was quite proud to have abolished the GLC to get rid of Ken Livingstone. What he did was to abolish the democratic government elected by the people of London. So that's the first point. On devolution though there's a much more fundamental point there of course. We have decentralised and devolution to Scotland and Wales. I'm a strong advocate of regional government and the structure and changes that will come with that following the regional development agencies will move us along that road to greater devolution. We did agree in our manifesto that we would allow the people in the areas to make a decision via referendum. We are discussing the implications of that at the moment but that's what real devolution is not simply the change just in London government. HUMPHRYS: But if you go back to the bitterness over Ken Livingstone we've got him now on the list because effectively he kind of out-fixed your lot. You tried to fix it to keep him out but he fixed it so that he is now on the list and in the end it was a matter of Mr Dobson saying, 'Look, if you keep him out I am actually not going to run myself' so you're left with no choice. PRESCOTT: You mustn't throw out these words 'You lot...' You're asking me today what my position was. I entered into the fray with Ken.... HUMPHRYS: The Labour leadership to let me use a more respectful expression...... PRESCOTT: Well.... no... I don't mean it in that disrespectful way. I mean people making decisions. You're asking me about my position and indeed in regard to Ken I entered into it when he actually put to the select committee that it wasn't his job to observe manifestos and I made it very clear, indeed on your programme, made it clear that in fact if you were nominated as a Labour candidate you had to observe the manifesto, you couldn't pick and mix. And to be fair Ken then went before the committee the next day and said 'John Prescott's right I accept that'. Now that's what I think happened, we've got candidates that have been selected. They have to observe the manifesto and that's what I'd have thought is the normal practice and procedure. HUMPHRYS: Except that he doesn't accept it..... PRESCOTT: Well he does. He's said it already very clearly. He said that he does accept the manifesto, not only that he fought on the London manifesto and the national manifesto. We will have a London manifesto that will come to the election when the process have got our candidate and we will put forward a candidate and a manifesto and he along with all the other candidates - Glenda and Frank made it absolutely clear they will accept that manifesto whatever it is saying and that they will campaign for it and would not find themselves any of them in a position of saying 'I now resign if I'm the candidate because I don't like the manifesto'. They are cast iron commitments that they have given to the Labour party. HUMPHRYS: Yes, but what he does not accept, and this is at the heart of the whole debate about London is your policies for the Tube. PRESCOTT: Well, let's get to that.. I think that's an important point and I'm at disagreement.... HUMPHRYS: But you accept that, I mean you accept that that he does not accept it? PRESCOTT: No, no. What he said: he accepts the public-private partnership, and what he's say is he doesn't like some aspect of it, and I think he concentrates on two things, one about bond financing and the other one about Railtrack, and in both cases he's putting a false prospectus to people when he puts this case. HUMPHRYS: But the point is just before we get into the detail, of it, the point is that he has not - you talk about him accepting the manifesto, he has not accepted the policies that you believe are right for the Underground which is an absolutely vital part of it. PRESCOTT: He believes in the public-private partnership. That was in our manifesto. HUMPHRYS: Well, he doesn't! He specifically doesn't. PRESCOTT:. Well, if you want me to go and get the manifesto I will give it you and show you chapter and verse. I even quoted on your programme,. HUMPHRYS: Well, there would no point in doing that because Ken would say as he's said endlessly - I'm not in for that.. PRESCOTT: I don't want to get into a lot of - Ken has made it clear both in his statement and the Chairman of the Select Committee, he will accept the manifesto,. He's actually said he's not against public-private partnerships because he prepared to finance the cross-rail on it, so that isn't an issue for him. Where he's focussed on is on Railtrack and I think you've got to bear in mind that what he's doing is in an election period because we as a government have said that once we've concluded this deal, and we believe the public-private partnership is the best way of doing it, that deal will be concluded and passed on to whoever is elected Mayor. So he knows he's not in any position to change whatever we agree because we've made it clear to all those who are negotiating with us now because not to have done so would have deemed delaying modernising the Underground for another five years, and Ken if he'd been elected wouldn't have been able to do it in his period of office. HUMPHRYS: So, it's beginning to look though, now as if you're the last man in Britain that really does believe in this public-private partnership. PRESCOTT: Well, let's come to it, I think that's an important point. People run out the idea of bonds as if that's the quick and easy solution to do it, right. He says, let's have the public sector done by bond financing. Can I say I was the first one to advocate bond financing, ten - fifteen years ago when the Tories and our own Treasury people didn't like it, and I've looked at New York, I've looked at the proposals, and I've actually used bond financing, that's just another form of borrowing, guaranteed by government, yes, on the Channel Tunnel rail link, but there's only a fifteen per cent chance of it being called in because of the profits that will be made on the Channel Tunnel rail link, so it doesn't count, and this is an important point, as part of government borrowing, because if government has to borrow for its hospitals and its schools and its railways, if we can reduce the pressure on the public borrowing we have more monies for hospitals and schools and we can get the money from the private sector for Underground or Channel Tunnels rail link or.... HUMPHRYS: No, no, that's only on the assumption that the Treasury are going to let you borrow any more than you think is necessary, and you can just increase that, I mean that's a political decision you can make. PRESCOTT: No, no, no. HUMPHRYS: And the point is.... PRESCOTT: No, no, please, this is a very important point. If you have a bond issue then it's a risk carried by government or by Londoners or New Yorkers. What we're saying is...... HUMPHRYS: ..... most cities do it, yes, exactly. PRESCOTT: No, not most, but some do it. New York went bankrupt doing it, but leaving that aside...... HUMPHRYS: You did it to Manchester Airport in this country. PRESCOTT: No. I brought the changes in for Manchester Airport. It's an entirely different position.. Using bonds where it's necessary I've used them, but in the Underground, and let me stay with Underground because I'm sure the listeners might get a bit confused with all these technical things, I've looked at it for years, and I've used it where I think it's correct on the Channel Tunnel, first time ever on the Channel Tunnel rail link. The trouble with the Underground is it doesn't earn enough from its revenues to pay for all its investment programmes. It's short, so money has to be given. Now Ken says, use bonds to finance the difference. I say why don't we go to a public-private sector? The public owns it, runs the safety, you get the private sector construct and invest in the tunnels and in the rolling stock. We transfer the risk not to the taxpayer, to the private sector and by doing that you don't have to face the problem New York had when it collapsed and went bankrupt, you force redundancies, cuts in services and you tax Londoners. I am transferring the risk so Londoners don't carry the risk for the investment, and I'll tell you the good reason why, look at the Channel Tunnel, the Jubilee Line - started off at two billion, ended up nearer four billion, two years behind time. If you'd have borrowed bonds for two billion you would have been trying to get the extra two billion off Londoners. In my case as I did with the Channel Tunnel rail link, the private signs up for a contract, if it costs more then they predicted they carry the cost, if it makes more profit than we predicted I share in the cost. Now that's a better deal for investment, it removes the risk to the private sector and we get a long sustained investment for well over fifteen-twenty years because you know John, if you go to the Treasury the Chancellor changes, Government changes, and the London Underground has been plagued as a political football which has failed to get long term investment and. I'm going to make those changes. HUMPHRYS: Right. But you acknowledged during the course of your previous answer, that yes, it does cost more to borrow the way you're doing it, and that is a very - I mean it's more than twice as much.... PRESCOTT: No, it's not. Let me just come to that point. HUMPHRYS: It's what the experts say. PRESCOTT: Well, you know I get - when I read some of these experts I do worry. I mean I saw one in the Economist this week. Let me try and answer the point. Ken makes the point it's seven per cent, he uses these terms, seven per cent for... HUMPHRYS Not just he, in fairness, not just he. PRESCOTT: No, but please, I mean I'll take some of the experts with him. They say seven per cent and they then say, for the borrowing private sector is twelve per cent. They are not comparing like with like. Why - because in these circumstances our public-private partnership will do the things that we can do publicly better and use the private facilities to get more efficiency. It doesn't cost you as much. Secondly it involves maintenance, the operation of the system, that is in the total package of the price that's being put up, that's the first point. The second mistake made by Ken and some experts is to assume that the seven billion pounds comes totally out of borrowing. It doesn't. Some comes out of fares, and the third mistake they make, they're elementary, and I hope these accountants who make these reports aren't dealing with your tax affairs John. You'll be in a terrible mess if you do. The third point you make is that the fare structure, it doesn't all come out of the fares, and there was a third point ..... HUMPHRYS: Don't worry because what I wanted to move on to is the convoluted nature of what... PRESCOTT: ..well mean these are complicated things. The seven billion doesn't get done in the first year. What some of them have done is take the seven billion pounds and Ken works it out, seven billion pounds by the ten per cent difference or whatever the differences are and works it out by population division. You don't invest right away. It doesn't all come out of a fare box, it doesn't have the effects on the fares that they are talking about and it gets investment. It's an awful lot of sloppy thinking going on and they are quack theories that Ken and those advocate as the kind of way of solving London's problems. HUMPHRYS: The trouble is as you've illustrated that it is an immensely convoluted complicated business and what you will have under your system, let's just remind the viewers of the.. PRESCOTT: ....without considering these possibilities.. HUMPHRYS: Let me put this point about how complicated the system is and people may be slightly surprised if they don't already know what's going on. You will have one company in charge of the infrastructure of the Underground. You will have three others, including Railtrack in charge of the network and that is the recipe that is creating such problems for the railways. Why introduce it onto the Underground? That's the point... PRESCOTT: ....it wasn't Underground that built the Jubilee Line, they contracted out to builders to do it. All we are doing with these people now, leave Railtrack aside just for a moment because that's a little different but the other ones are taking certain tunnels and will have a responsibility to do the construction work to modernise, to replace the track, to do all the things that we want that haven't been done to the Underground to improve it. They come in at one o'clock in the morning, they work until five, they are the constructors dealing with it. That's not an unusual way of doing it. HUMPHRYS: No but it's Railtrack, people don't want Railtrack.. PRESCOTT: Railtrack's a different one, HUMPHRYS: Let's go to Railtrack, Frank Dobson this morning on this network said: 'I..' - and don't forget he's your kind of official candidate Frank Dobson afterall. PRESCOTT: Well it's not about whether his argument is right or wrong, rather the candidate.... HUMPHRYS: Well fine, alright... PRESCOTT: Well that is a point... HUMPHRYS: Very important point...what he said was: 'I'm not wild about Railtrack' so if Frank Dobson, who's carrying your banner you hope into the election, isn't wild about Railtrack.. PRESCOTT: I didn't realise that. I'm not particularly wild about Railtrack, I don't think there are many people in the country wild, but that isn't the issue.. HUMPHRYS: Why are you going to let them run the.. PRESCOTT: If you're asking me I'll try to give you an explanation. Railtrack is different from the others, we've done the sub-service lines and I want to see a connection between the national railway system and indeed the Underground, so trains can go from west to east through the Underground at Paddington on into the west part. We also have got a line going north and south so you can go from Brighton, you can go further north and go through parts of the Underground system. That's what I call integration. You don't have to get off at Paddington, you don't have to get off at these stations, the trains can go right through. So we have said to Railtrack, let's have integration, let us see if you can make this integration work of the system. Now they are going to give us a report, probably in about March which will tell us precisely whether that can be achieved because there are a number of complications with it John. If they can achieve that, fine, we are prepared to look at it, but on Railtrack you know at the moment the Underground, on the Bakerloo line and District line Underground trains are running on track owned by Railtrack at the moment. I don't know whether Ken is going to cancel these Undergrounds because the track is being run, they run at the moment. Underground trains run on Railtrack and Railtrack are running on Underground. HUMPHRYS: So you are absolutely committed to this PPP proposal... PRESCOTT: ...the best deal.. HUMPHRYS: Absolutely and.. PRESCOTT: By the way Railtrack don't run safety, don't run operations, I heard all these myths of Ken and others, it's totally untrue. HUMPHRYS: Okay, you've given us a very clear idea of how it's all going to work, so you are absolutely committed, but the problem is that it seems many people are not, including this morning, as a result of an interview he gave to the Observer newspaper, Tony Blair himself, let me quote you what he said: 'If the manifesto sticks by the Labour policy of a PPP, Ken will have to abide to it.' Ken Livingstone will have to abide it. Now that's a big word isn't it, in this context - if - it's not a done deal then. PRESCOTT: I think if he had said the London manifesto has to be decided in consultation with Londoners and candidates will be taken into account by the National Executive. If he had said I'll tell you what my manifesto is, you'd have said: oh this is control freaks now, here's Tony Blair ....but he's not saying that. If there's a good democratic principle of making sure that those who make the decision are the National Executive in consultation with Londoners. That is our practice, it's the issue with Ken that I disagreed with it....(interruption)...that doesn't throw doubt on it. It throws the possibility... no but not Tony Blair. It allows the National Executive to endorse.. HUMPHRYS: Or not..hang on it allows the National Executive to endorse... PRESCOTT: I'm not going to disagree with you on that, of course I reserve the rights, I'm a member of the National Executive, that we will make a decision about that... HUMPHRYS: They may say we don't want PPP.. PRESCOTT: They may do a number of things but at the end of the day Ken is signed up to the manifesto as is Frank and as is Glenda and that's all I expect of them. I'll let you into a secret, there are certain things that I do and implement that I don't like in manifesto but it's calls democracy. HUMPHRYS: Impossible. Can't believe that. PRESCOTT: But I implement it.. HUMPHRYS: Let's move on to what this is really all about and that is keeping people out of cars and onto public transport, that's at the heart of all of this isn't it. When you started in this immensely big job of yours, you talked about deterring the motorist, about using their cars...what you have always said is it's not about how many cars are on the roads, it's how much we use them and integrate and...that might have meant, would have meant being tough on the motorists, sometimes, not always, bit of stick and a bit of carrot, exactly. But now it seems you are backing off... PRESCOTT: Let me just say to you, when I came in as you said, I was faced with a problem of massive disinvestment in the public transport system right, a declining industry, growth in the motor vehicles after seventy billion pounds of the road investment had gone from seventy cars per mile to a hundred cars per mile. I came to the conclusion, so did the last government actually, came to the conclusion you can't build your way out of it, doing nothing isn't an option and you had to do something radically different. You had to integrate the transport system so that I could get more out of the existing system. I had to find radical ways of financing the system to get more investment and a Transport Bill to get more framework. I've got the Transport Bill when everybody told me I wasn't going to get one in the timetable I wanted. I've got changes in the finance with hypothecation that everybody thought you couldn't get and congestion charges... HUMPHRYS: ..spending.. PRESCOTT: I've now got a framework, quite a radical package of measures which I believe is the way forward but at the heart of it John is choice. I want to offer a better choice to motorists so they can use their public transport and use their cars less right. Now congestion charges, we can't come in for four or five years because.. HUMPHRYS: You said this was going to come in by 2002. PRESCOTT: No I didn't... HUMPHRYS: ..that was the implication.. PRESCOTT: No I didn't, if you want to know you're talking about a report that was produced by a London government, it's Ken who said 2002, the report says 2003 and talks about.. HUMPHRYS: Now it's going to be 2005 according to a briefing from some of your own people yesterday.. PRESCOTT: In the reports it makes clear, if you want to use a paper mechanism, that is you buy a bit of paper and you put it on the windscreen that can get in by 2003 if you wish it, there's a number of problems with that. The other one is actually to have cameras taking photographs of the numbers.. HUMPHRYS: Kind of electronic job.. PRESCOTT: ..to see where we are right. And the third one is electronic systems like they've got in Singapore and I've looked at all of them. All have different timetables, well some of them go up to 2005 but my real point is this. I can't force it on the motorist and I can't even force it on the local authorities. Out of the local authorities who have actually put in their plans, there's something like seventy-seven local authorities who are prepared to try this. Now they have got to wait four or five years, six years, I've got to actually implement it and agree with them what they are going to do because I said those charges must go in to a special fund so it's transparent and goes in to public transport, they have to agree that with me. My biggest priority at the moment is not just getting the legislation which I am now doing, it's putting more money into public transport investment to improve the quality of the system. That's why we have a new regulatory framework now on the railways. HUMPHRYS: Yeah but let's have a look at as you say local authorities and stay under local authorities. They are going to have to hold referendums aren't they before they can implement congestion charges. PRESCOTT: They are not required under that but I would expect them... HUMPHRYS: You would expect them to.. PRESCOTT: I would be looking and say have you agreed with this with the people in your area.. HUMPHRYS: How do you prove that other than having a referendum. PRESCOTT: ..there has to be a transport plan, there has to be consultations with them. Then they come along to me and say: look we've got these proposals, we think this is the way we do it, they have to agree it with me. I then insist those charges have to be put into a separate fund and then invested in public transport. But you know, I can't wait until those funds come into being. I'm four or five or six years away from that, I have got to start getting the investment in the public transport now, that means extra resources coming from public sources, extra resources coming from private finance initiatives that we've been talking about now, billions of pounds now going into Underground, Channel Tunnel rail link, which I wouldn't have got out the Exchequer because they want to put it into Health and into Education because they are their priorities. I have a chance of raising the money in a private way..from private finance and public private partnerships. Billions of pounds now being poured back into our transport system and on a sustained long term basis. Not knocking on the Chancellor's door every two years to see if he's changed his expenditure plan, that's what's undermined the transport system in this country and I am fundamentally changing it. HUMPHRYS: So it is absolutely essential that you get income from congestion charges, one way or the other. PRESCOTT: I think the congestion charge argument is two: one income, money to go into the public transport, one of the difficulties is that if you have got a lousy public transport system and you're asking people to get out of their cars. Take London, eighty-five per cent of the people come in by public transport, they are not going to have to be persuaded to get out of the car, what they are going to have to be persuaded about is going to be extra capacity, a better quality transport system because they are already using it. If you are in Hull, I might want to get them to transfer, to change to the bus. If you are in Manchester they are already changing to a metro system. So there are different solutions that I have to find in different areas working with the local authorities, that's why I'm giving them nearly eight hundred million pounds now in local transport plans to put these bids in to me to get a better public transport system. HUMPHRYS: So, you are going to have to raise an awful lot more money aren't you. That's what he amounts to.. PRESCOTT: ..we're doing it at the moment. I mean if we take the buses, I had a bus summit recently, they've now put three hundred and fifty million pounds into buses because they see I'm saying bus has a major role to play and that's twice the level that it was before. Eight thousand new buses and more bus services than ever. On the railways, a different kind of problem, we've got a thousand trains a day more which is obviously congesting an already congested system. We have now got an agreement in the re-franchised negotiations which is now being conducted by the strategic rail authority that is going to bring in billions of pounds of new investment. The difference is that they sign up for the contract John, before they never had to sign up for new investment. We've got some investment, but I want them signed up in longer term franchises to bring.. HUMPHRYS: Ah well.. PRESCOTT: That's the choice I made twelve months ago, that I would re open the franchise negotiations but I wanted guarantees that they would bring in the investment, private money over a longer period of time. HUMPHRYS: But you've set up this strategic rail authority, right, which is going to be dealing with these franchises and all the rest of it.. PRESCOTT: ..and the franchised negotiator is now in it. HUMPHRYS: Indeed, to renegotiate the franchises. Now what they are going to do is come back to you and say, or to the negotiator himself Sir Alastair Morton or whoever it happens to be, and they are going to say to you: look things have changed. We actually need much more money than we had thought. You therefore are going to have to match our spending and increase our subsidies, that's what's going to happen isn't it. PRESCOTT: We're in a process of negotiation. At the moment we spend something like one point two million pounds given to the franchises in their already existing contracts... HUMPHRYS: And that's meant to drop down. PRESCOTT: If I was a negotiator across the table with the company I would be saying to them listen, you thought it was a declining industry when you came in, passengers have increased by over eleven per cent.. HUMPHRYS: ..so you bought their arguments... PRESCOTT: No, no, don't say that before you've heard me, we're negotiating.. HUMPHRYS: I wouldn't wan to negotiate with you. PRESCOTT: ..eleven per cent more traffic. You're getting a lot more money. I don't necessarily assume you need more money but we have a massive investment requirement in the railway industry of new capacity, not old. I mean the Strategic Rail Authority not only see what we are doing about the old system and getting that to work better and to modernise it, but what we need for new investment, whether it is for freight or new forms of trains. That is going to involve a lot more money, we have always recognised that, but I don't readily accept for the moment the taxpayers there just necessarily shove money down the throats of franchised directors, that's for negotiation. HUMPHRYS: Well it's for negotiations, but you're obviously going to be impressed if they say to you: look, we're carrying more people, we're carrying more freight, now we want more money. That's an argument that you will listen to. PRESCOTT: Well listen, let me give you the buses, it's the same argument. On the buses, only twenty-five per cent of the space is used, if I can increase passengers by four or five per journey, they increase their revenue by four hundred million pounds. Now I give a billion pound subsidies, or government - forgive the I -... HUMPHRYS: We do.. PRESCOTT: A billion pound to that industry I have to say why do I have to keep giving you a billion for subsidies for your industry. When I am filling your seats, putting as they say 'bums on seats' you are going to earn an awful lot more money so I believe I become a negotiator through a body like the Strategic Rail Authority, which has the national interest at heart, that wants a railway system which has been massively under invested for so long, to get it modernised, to the automatic train protection, all these kinds of arguments that cost money but are going to have to be implemented. HUMPHRYS: So Alistair Morton... was quite right when he said that there was nothing to say when they signed up, the train operating companies and all the rest of them, that the rate at which subsidies declined would be correct. In other words, the decline in subsidies may not be the decline that we thought it would be? PRESCOTT: Well he's a very good negotiator. I mean they're talking publicly. Well I mean any negotiator puts all sorts of things on the table. I've spent my life negotiating on trade unions..... HUMPHRYS: But I thought he was supposed to be looking after our interests not after the interests of the...... PRESCOTT: You can be assured that he will. He knows exactly how to play the argument, he knows we want a better railway system and his vision of a railway system is entirely different one than we've seen in the last few years. It's a growth industry, it's one where we need massive investment not only in the trains but in the infrastructure and those changes are underway. And he negotiates and nobody can doubt the strategic rail authority which by the way John, remember when you used to say to me - a shadow one can't really work? Well it has been working and it's already negotiating without the legislation. HUMPHRYS: Okay, well we've got no time for that argument now but let's turn to the overall point which is that you're going to need more money, clearly going to need more money for all sorts of things. That's one of the reasons therefore I am assuming that you're going to have to sell off National Air Traffic Control or part of it, not all of it as you always say, because Mr Brown has told you that you can have the money from that sale for other things you need. That's the case is it? PRESCOTT: Well what's happened with NATS is another example of a couple of the problems I've got with public sector industries: One, they operate their service very well but in public construction they're not very good..... HUMPHRYS: Yeah... but let's just deal with that point about Gordon Brown's going to give you that money. PRESCOTT: No no. let's just wait.... Yes, he's....... I'll let you into a secret - he's already given me the money. HUMPHRYS: He's given it to you before you've sold it? That's a good deal. PRESCOTT: Because there was an agreement at the beginning that that would be part of the resources that are involved in it right? HUMPHRYS: So it's already been spent and accounted for? PRESCOTT: No no..... it's a three year programme here. I can tell you where money might go and that's another matter but what we're doing with NATS in that situation is to say it's fifty per cent over in construction, hundreds of millions of pounds more for the Swannick centre that should be, a number of years behind time so I want to separate what the public sector can do well and get into the construction part of it with greater efficiencies and modernisation in the NATS situation. But what I've done there is something different again. I'm protecting the public interest in it, I'm separating safety as required by the national.... ... by the House of Commons Select Committee and safety is in the hands of a private operator. That's unacceptable....... HUMPHRYS: ..... you've not persuaded any of them though or many of your other back benchers. Gwyneth Dunwoody let me quote you, she's the Chairman...... PRESCOTT: John... John, you're not listening to me. She recommended what I'm doing. HUMPHRYS: Let me tell the viewers what she said; "When an industry hands over some responsibility to private companies there will be a clash between the interests of directors responsible for raising money and profits and the interests of passengers." That is a fundamental worry of hers. That's what she said. PRESCOTT: I understand you're saying she's making a general principle point but what she's said...... HUMPHRYS: .... But it's a very important principle...... PRESCOTT: I know it's a very important principle and I'm doing what she wanted - to separate safety away from operation. I'm doing that. HUMPHRYS: She's saying you can't do that with a company, with a private company. PRESCOTT: But John.... She's not saying that. I do know what Gwyneth Dunwoody says. She's not agreeing with everything (both speaking at once) well John, if I can explain where perhaps you haven't understood it; She would like it even in the public sector as it is. But she still wants the safety separating. I am separating the safety because whether it's a public operator or a private operator, you shouldn't put them in that conflict of interest. I'm doing that. Where she has perhaps some disagreements with me is to whether any private capital should come into the NATS operation. I'm quite prepared to see that money should come in so capital realisation I can invest somewhere else, right?, which I think is quite proper for us to consider. Secondly that it has a chance to get involved in expanding abroad like British Airways did in global financing, buying into more air traffic...offering these possibilities for the public sector as they've suggested for the Post Office - that possibility is there. HUMPHRYS: Why can't we have the same thing as we have for the Post Office? PRESCOTT: Well yeah... in the case of the Post Office they're still controlled basically on some of its investment programmes. What I'm saying is - this would be free from that, they can raise the money. It wants a billion pounds. If the billion pounds can come from the private sector it's a billion less from the Exchequer who wants money there for hospitals and schools and I've put in a veto, I've put the forty-nine government's share, I've put directors on board. The public interest will be protected. I will take some money out for other investments and the billion pounds that's wanted can come from the private sector in one that is publicly accountable. HUMPHRYS:` John Prescott, thank you very much indeed.