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HUMPHRYS: Rhodri Morgan is the man
Tony Blair did NOT want to be the leader of his party in Wales, the first
secretary in the Welsh Assembly. But he is ... because Alun Michael,
Mr Blair's choice, was forced out in a vote of no confidence. So Mr Morgan's
presumably a happy man. Wales is his to lead in the direction he chooses.
Or is it? His problem is that the Welsh Assembly has precious little
real power and there's not that much he can do as its leader. Mr Morgan
is in our Cardiff studio.
Good afternoon Mr Morgan.
RHODRI MORGAN: Good afternoon.
HUMPHRYS: You do have a problem
here don't you. It's an odd one in a sense because the people of Wales
seem to like you very much indeed, they think you will work miracles because
you're not, as they see it, Tony Blair's poodle but you can't give them
what they want because you don't have the power to do so.
MORGAN: That's a bit harsh I think......
HUMPHRYS: Accurate....?
MORGAN: I think it's quite possible
that the people of Wales might think in ten years' time that we ought to
be given more powers over more areas of government but they're certainly
not going to do that if we keep moaning about the powers we've been given.
It's only going to happen if we actually make the best creative use we
can of the powers we've got. So as far as I'm concerned we ought to stop
worrying about whether the pitch has been marked out properly and get on
with the game.
HUMPHRYS: Well the trouble is it's
difficult to get on with the game without much of a ball to play with and
you're totally dependent on the size of the ball that Gordon Brown the
Chancellor gives you, that's the snag, and if he won't give you the cash
you can't do the things you need. He won't give you the cash, he won't
even commit himself, guarantee that he'll match the money that Brussels,
the so-called Objective One money that Brussels wants to give you.
MORGAN: But that's true of devolution
everywhere, you have to have some sort of resource transfer mechanism from
central government to the province, region, land, state, small nation as
we are in Wales and Scotland of course in roughly the same position in
dependence on the Barnett Formula. But you know the German lender don't
have resource...they don't have their own tax raising power either, although
they've got a different mechanism by the Upper House in the German Parliament
HUMPHRYS: Ah but that's different...........
MORGAN: But I wouldn't equate -
have you got enough powers with have you got enough tax raising ability
because a tax raising ability for a very poor country like Wales is an
absurdity anyway because people in Wales can't afford the taxes they've
got now. So then the issue is - what is the resource transfer mechanism
from the British Treasury into Wales and into Scotland and into Northern
Ireland. It's worked reasonably well for the past twenty one years although
there are always arguments about the exact application of it and there
are arguments going on now and then there is a particular problem about
Europe and Objective One which is a new thing for us because we've never
had it before.
HUMPHRYS: I want to come onto the tax raising
thing in a moment because that's rather different but as far as this Objective
One money is concerned, Brussels, and here's the oddity about it, Brussels
actually wants to give it to: 'The Commission needs to be satisfied that
future financial resources will be able to provide public funding for the
whole programme......can't be satisfied that this will simply be reviewed
in the public spending review'. In other words what the Commission is
saying is that the Chancellor, as you very well know, has to say now, pretty
much yeah, we will match that money that Brussels is going to give you
and then Brussels will be very happy to hand it over. So it is very odd
isn't it that with a large chunk of money sitting there, that is ours by
right after all, you're not able to get your hands on it.
MORGAN: Well this is a three handed
argument between us in Wales, the Treasury in London for the UK government
and the Commission and each of us has a different timing requirement and
in particular the Treasury doesn't want to commit funds for the years 2001
and beyond before July of this year when it completes the comprehensive
spending review. Brussels wants to know in April of this year but isn't
worried about the first year either so they're reasonably happy and I think
if you'd read the rest of the paragraph you were quoting from you'd see
that they did actually evince considerable satisfaction with the arrangements
for year one from April now, next month, to April 2001 but they do want
to know now roughly what the arrangements are after that, after April 2001
but they want to know before the end of the spending review and the Treasury
don't want to say before the end of the spending review because of the
inevitable jealousies people in other regions of England perhaps particularly
looking at us in Wales, are we getting away with something and obviously
in the West Midlands they'd be looking to see 'well are they going to be
reasonably well treated if there is the ultimate catastrophe in Rover?',
the north-east will be looking because they are very similar to Wales in
terms of standard of living, low GDP per head, but they didn't get Objective
One for various technical factor reasons.
So the Treasury has to
handle all those things politically and financially in a way that is seen
to be fair and we have to make sure that this timing difference between
April and July, with the Commission wanting April and the Treasury wanting
July does not inhibit the commencement of the programme even though everybody
accepts that we've got enough money for the first year.
HUMPHRYS: But you're not, surely,
telling me that you're not asking Gordon Brown - 'Come on, please make
this possible.'?
MORGAN Only weekly John.
HUMPHRYS: Just not daily then.....?
MORGAN: No, not daily. I'm satisfied
that they do understand the problem but they're trying to balance it out
on a basis that will be seen to be fair across the UK and of course I understand
that and we've got year one sorted out we believe and I think everybody
now accepts that the first year from April 2000 to 2001 is okay but it's
a seven year programme and the Commission needs to know - Is there the
commitment there? Are we being serious in the UK then or is Labour in
danger of falling into the same trap as the Tories were of trying to find
little wangles by which you accepted the European money gleefully and then
cut the UK public sector expenditure and all Europe was doing was not contributing
to the net sum of human wealth but enabling the Tories to pursue a tax-cutting
agenda. Now obviously they fought very hard against that when the Tories
did it but they're going to make damn sure that Labour doesn't try that
trick as well. All Treasuries try that trick - of course, it's natural
for all Treasuries to do that, that's how they're made, that's why you
work in Treasury because you like to hold back public expenditure in all
forms, but I think there is an acceptance at the political level in the
UK government that Objective One has got to be a success in Wales because
it's the only chance we have because Eastern Europe will be in in 2007
and most regional expenditure will then be going east of the old Iron Curtain
and it's not going to come to areas like Wales or Ireland or Scotland.
HUMPHRYS: All the more reason to
get it now - exactly. So as far as spending is concerned generally, you
don't have enough money in Wales at the moment to do the things that you
want to do - that's an uncontroversial statement isn't it.....?
MORGAN: That's absolutely true.
No, it is very difficult, I mean the Barnett Formula is now putting a
lot of pressure on expenditure in Wales. We now cannot keep up with increases,
percentage increases in health and education that the Department of Health
and the Department of Education and Employment are doing in England. We
just can't do it because of the way convergence is bringing expenditure
in Wales more into line with that in England and so if you get a five per
cent increase in England we can only afford a four per cent increase in
Wales and that is crippling us at the moment and that's before the European
Objective One factor kicks in from April.
HUMPHRYS: And that's one of the
reasons why debts in the NHS are rising the way they are at the moment
- enormously according to the National Audit Office who said - 'The deficit
for Wales, NHS in Wales, eighty million pounds and rising.'
MORGAN: Absolutely, we are not
now able to match the percentage increases in England because of the way
the Barnett Formula is impacting and it is causing us huge difficulties
and would cause us absolutely insuperable difficulties if we don't win
the battle over Objective One funding. So we do have to have that Objective
One funding, the matched funding then from UK public sector sources to
be outside the Barnett Formula because it's just not acceptable obviously
that if you get a five per cent increase in health or education expenditure
in England, we can only do a three and a half or four per cent increase
in Wales which is what is happening now.
HUMPHRYS: Just for people who don't
understand. The Barnett Formula is the formula by which the amount of money
is calculated goes to places like Scotland and Wales. But just to return
to this question of tax. You need more money, all sorts of people need
more money and yet you can't cope. At the moment, as you say the NHS is
in very serious difficulty in Wales and yet we've got the spectacle of
Gordon Brown cutting a penny off income tax in the forthcoming Budget,
the one that he announced last time around. Possibly, possibly, even cutting
another penny of income tax. Now that sort of money, the money that he
is giving back to some of us in tax cuts would be more than enough to cover
your costs wouldn't it. What do you make of this idea of a Labour Government
cutting taxes and making it difficult to spend enough money on the NHS.
MORGAN: Well I notice the Tories
also accusing Gordon Brown of piling even more money on via stealth taxes
than he is saving in income tax, so there is a difference between what
you call headline tax increases and overall tax burden increases and I
think Gordon is catching it both ways at the moment, from the press and
the Tory Government of actually increasing the overall tax burden while
reducing the, you know the Daily Mail and Daily Express headline income
tax figures. So I'm not sure which you are accusing them of this week,
wherever it is the increase in the tax burden which you were accusing him
of last week, or the speculative reduction in the headline income tax rate.
HUMPHRYS: I'm not accusing him
of anything. What I'm asking you is whether you are happy that he should
be cutting taxes when the money could go on the NHS or education or something
else. Are you quite happy about that?
MORGAN: We want the ability to
increase health and education expenditure and other frontline service expenditure
on a par with what is happening in England and for various technical reasons
relating to the way the Barnett Formula....
HUMPHRYS: ...but you can put that
aside can't you...
MORGAN: ..was structured in 1979
we're not able to do that now. Now, I'm not going to tell Gordon Brown
how to run the economy and I'm certainly not going to do it just before
Budget Day when he'll be making his announcements on Tuesday..
HUMPHRYS: ..might be the best time
to do it.
MORGAN: ...the overall issue of
the tax burden and the overall issue of public expenditure in the UK and
sometimes he's accused of doing both. You can't be doing both, you can't
be cutting taxes and increasing taxes and you've got to look at the overall
net picture on the tax burden. Our problem is that one way or another,
for factors relating back to 1979, at the moment we can't match increases
in health and education expenditure and we hope that the way we can restructure
things from either this year or next year, we will be able to have that
freedom again to be able to match English increases.
HUMPHRYS: You said earlier, you
talked about it being a nonsense for regions or nations like Wales to be
able to raise its own income tax, but that's what they are doing in Scotland.
I mean they can raise or lower the rate of tax by three pence in the pound.
Don't you think it would be nice for you to be able to do the same ultimately.
MORGAN: The Scottish standard of
living and therefore the Scottish taxable capacity is much higher than
ours..
HUMPHRYS: ..oh no, it's the principle
that we're talking about isn't it.
MORGAN: They're roughly at the
same standard of living as England and we're eighteen per cent behind the
Scottish and English standard of living, so you know, if you can't afford
to pay the taxes you are paying now, the prospect of devolution enabling
you to pay more tax than that, and more tax than you would pay if you lived
in England is extremely unattractive. What is more, looking back at the
very narrow percentage by which we won the devolution referendum, if we
now went back less than twelve months later compared to the start of devolution,
then at three years later you look back at the referendum and said we are
going to change the rules now, and we are going to say we are going to
have a tax raising ability in Wales, that's constitutionally outrageous.
HUMPHRYS: So they wouldn't get
away with it in other words. Can't do that - what about this Freedom of
Information business. You want us to know more about how government works,
you want us to have a more open system. But it's not actually going to
happen is it?
MORGAN: I'm not sure why you think
it's not going to happen. It certainly is going to happen. I mean, alright
I run a minority administration, therefore without the support of one of
the three other parties I can't say clap my hands and get my group in order
and therefore that's what happens, you've got to have at least one other
party on board. But on this issues, all three other parties are actually
as interested as we are in having an open government agenda.
HUMPHRYS: ...but you want to release
more information don't you..
MORGAN: There are already three
ways that we can take the devolution project you know further. One is on
the open government agenda, where we can push away at the fusty corridors
of Whitehall method of doing things and the second is by having wider powers
which we may get, which the old Welsh Office used to get once every five
years, some additional power not previously devolved to Cardiff would actually
be transferred to Wales and then finally, there's the issue you were talking
about earlier, the primary legislative powers or tax raising powers, which
for the moment I think is completely off the agenda. Now, as regards open
government, how you do things in Wales. I think we have every right and
every expectation to be able to have an open government agenda pushed forward,
really quite quickly. Remember that we don't have the security implications
in what we do that central government institutions do, so it's a lot easier
for us to do it than it is for government in London.
HUMPHRYS: But you wouldn't be able
to release information from Whitehall would you, that's the point.
MORGAN: No, of course not because
it would destroy our relationship with central government so I mean any
journalist who is thinking they can pop down to Cardiff and get information
about government in London that they can't get from London by asking for
it via us is going to be very disappointed - they can save themselves the
train fare now. With respect to what we do in Wales can get an open government
agenda in a much freer way than you could in London with all the implications
for defence and security and foreign policy and international relations
that London has, well we don't have those inhibitions so we can push ahead
on that agenda using international benchmaking as our formula, who runs
this kind of thing best in the world, can we match the best standards in
the world, and I'm sure we can.
HUMPHRYS: But at the moment a lot
of people say, I think, that it's your own view isn't it, that the Freedom
of Information legislation isn't tough enough. Certainly people like Maurice
Frankel believe that that is the case. Would you be prepared to vote for
greater freedom in Westminster and I suppose really I'm saying to you that
you've always been regarded as a bit of a rebel and now that you are a
highly distinguished leader of a party in Wales and you have that posh
title, does that mean you've become a bit of a pussy cat or are you still
prepared when you go up to Westminster to sit in the House of Commons to
vote for the things that you think really matter.
MORGAN: Oh no, that's for others
to judge. I don't get to London as often as I would like because of the
pressure of work in the middle of the week, and we've got plenary sessions
on Tuesdays and Wednesdays and a lot of these key votes are on Tuesdays
and Wednesdays in London as well. It's very unfortunate, so I'm not in
the House of Commons as often as I would like. If I was, then there are
some issues which relate to conscience or issues of principle where, who
knows what might happen.
Now the Freedom of Information
Act or Bill that is going through at the moment, it's not as strong as
the Scottish Parliament Bill and it's certainly not as strong as what we
hope to do, but I sympathise with the different factors that relate to
government in London and which we don't have to worry about in Cardiff.
Basically I think, you know, the fact is that devolution is as devolution
does, so in a few years' time there will be different models and people
will look across at different models and they will say from Westminster
to Cardiff, to Edinburgh down to London again and across to Commonwealth
countries, the Irish Republic, and I think people will be much freer and
easier in seeing, well there's a better model, why don't we follow that
model. There's a better model in a devolved assembly, why don't we follow
that model.?
HUMPHRYS So you might do that?
MORGAN: This is thought pretty
unnatural at the moment, but this is all part of the variable geometry
UK coming into being slowly, and everybody will adapt to it from the media
to the Sir Humphreys in Whitehall and in Cardiff and Edinburgh before very
long.
HUMPHRYS: What about your own difficulties
in Wales because you're a minority government there effectively. Yeah,
you're going to have to have a coalition aren't you, a sort of formal coalition
the way the Labour Party did in Scotland. Is that in your mind or have
you ruled it out, or what?
MORGAN: Neither. No. I mean it
could be ... I mean the problem is that it took a lot of spade-work in
Scotland. I mean it happened in a week, but the week after the elections
that it took to sign the agreement was based on seven years of co-operation
between Labour and the Liberals in a constitutional convention. We did
not have a constitutional convention and we came into the election therefore
expecting to win a majority, because only one third of our seats are by
proportional representation compared to forty-two per cent I think it is
in Scotland, so they knew they weren't going to form a majority right from
the White Paper, as soon as they saw the voting proportions, We thought
we were going to win a majority but we didn't so it was all a bit new to
us.
Now, we are developing methods
of closer co-operation with at least two of the other three parties in
Wales, and on some issues with all three parties on open government, but
where we finish up in six months time and whether we'll have a coalition,
a working arrangement of some sort, an agreement, about where you have
common ground, well why try and oppose each other when you actually agree
on something, and that applies to not just one party, there's an element
of competition between the Liberals and Plaid Cymru to want to be quite
close to us on some issues, but to want to grandstand.on the outside on
other issues for reasons that I perfectly well understand, and they're
certainly not going to go for, you know, just the perks or the Ministry
of your car, and having one minister in the government unless they get
a lot out of it and they're not sure what they would get out of it, and
we're not sure either, whether we're ready for this. So for the moment
we're trying to work together to find common ground.
HUMPHRYS: Okay Rhodri Morgan, thanks
very much indeed for joining us.
MORGAN: Thank you.
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