BBC On The Record - Broadcast: 19.03.00



==================================================================================== NB. THIS TRANSCRIPT WAS TYPED FROM A TRANSCRIPTION UNIT RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT; BECAUSE OF THE POSSIBILITY OF MIS-HEARING AND THE DIFFICULTY, IN SOME CASES, OF IDENTIFYING INDIVIDUAL SPEAKERS, THE BBC CANNOT VOUCH FOR ITS ACCURACY ==================================================================================== ON THE RECORD RECORDED FROM TRANSMISSION: BBC ONE DATE: 19.03.00 ==================================================================================== JOHN HUMPHRYS: Good afternoon. Tony Blair says Europe's now at a turning point.... and it's turning in our direction. We'll be reporting on this week's summit that's meant to set Europe on a new course. And the new leader in Wales ... can he really make a difference when he doesn't have the powers that he needs ? I'll be talking to Rhodri Morgan. That's after the news read by Sian Williams. NEWS HUMPHRYS: The Tories have high hopes for the local elections ... will they show that the party now poses a real threat to Labour at the GENERAL Election? And William Hague says he doesn't want Britain to be run by Europe, so might a Tory Government tell Brussels we want some of our power back. I'll also be talking to Rhodri Morgan, the new leader in Wales, and asking him: what's the point of his job? But first ... On Wednesday European leaders gather in Portugal for a summit meeting on economic reform in Europe. Sounds pretty dry ... but Tony Blair says this is the turning point and it will prove that the rest of Europe is finally going our way. However, as Paola Buonadonna reports, it's going to be quite a task to convince the other leaders that they should abandon their economic policies and embrace the British model. PAOLO BUONADONNA: Rush hour at London' s Waterloo station. Tony Blair is proud of Britain's booming economy and its record for creating jobs. Next week at a special summit in Lisbon he hopes to persuade other European leaders to go his way and adopt British-style reforms to tackle unemployment. The Prime Minister needs progress on these economic reforms if he is to persuade the British public to join the Euro. HELEN LIDDELL MP: We need to create an environment that is business friendly and through that we can create high quality jobs. And we also have to at the same time make sure through skills and training that all of our people are getting an opportunity to benefit from the kind of changes that a modern economy has. BUONADONNA: By Eurostar France is less than an hour away from Ashford in Kent but its government's attitude to the economy is worlds apart. Several thousand French entrepreneurs like Jean-Claude Cathias have made their feelings clear by relocating this side of the Channel Tunnel. He now helps run an association which advises French businesses based in the UK. JEAN-CLAUDE CATHIAS: France always thinks we need regulation for everything - absolutely everything. It costs twice the price in France to employ someone than in Britain. So it really prevents employers to employ people and as a result in France you have approximately twelve per cent unemployment for only five per cent here in England. BUONADONNA: The flexibility that French entrepreneurs enjoy in Ashford is what the British government insists is needed to stimulate job creation. Tony Blair says that the Lisbon summit should be a turning point in European economic policy. He says we can combine a more dynamic economy with the European Social Model and its concern for workers. The Prime Minister wants to avoid what he calls "heavy handed intervention and regulation". But a core group of continental countries, headed by France, is determined to use the summit to strengthen the social agenda. The champion of this approach is the French minister for employment, who's also the daughter of Jacques Delors, one of the architects of the European Social model. MARTINE AUBRY (INTERPRETED): I think if Europe has failed to deliver on jobs for years it's simply because it believed that economic growth would solve everything and the unemployed should adapt to the needs of companies. But the State has a greater role to play. It must anticipate and be more proactive. JOHN MONKS: Different countries have got different agendas going into Lisbon. I think the British government, I think wrongly, have tended to preach at Europe and say that Britain holds the key, holds the way. In fact I think mainland Europe is doing well in some areas we're not doing very well. Its education and training standards are higher, productivity is generally higher and certainly in terms of manufacturing it's doing better on balance of payments than we are. BUONADONNA: On the French side of the Channel Genset is one of the leading biotech companies in Europe. Although managers here have had to contend with a raft of social legislation, including recently the thirty-five hour week, they say higher regulation doesn't necessarily mean higher costs and it makes for a more committed workforce. DANIEL COHEN: You will always need rules to protect the employees against the employers. The employers tend to forget the human aspects of the people in the company. We must understand and accept that for a company to be successful everyone has to be comfortable and successful. BUONADONNA: It's from the Gare du Nord in Paris that the Eurostar travels back to Britain but the message coming from the continent is not a welcome one for Tony Blair. France, together with Luxembourg, Belgium and Italy is determined to strengthen employment rights and wants to see new directives to protect workers on the agenda soon. France will be in charge of EU business in three months' time as it takes over the Presidency from the Portuguese and there's little doubt that social legislation will be high on their list of priorities. Many governments in Europe feel that legislation has a part to play to protect the growing number of workers who are not in traditional full-time jobs. The British government is currently drafting regulation to implement a new EU directive on part-time work. The aim is to ensure that part-time workers receive the same hourly pay and similar conditions as their full-time counterparts. Two more EU directives to regulate temporary work and agency work are being drafted and could be pushed through in the next couple of years. AUBRY: (INTERPRETED) I think that companies which choose to operate on a temporary footing must bear the cost. There is no reason why other companies, why taxpayers, should foot the bill for what then becomes a form of institutionalised job insecurity. LAURETTE ONKELINX:(INTERPRETED)It is clear that any directives aiming to offer better protection for people, for workers, must be adopted as quickly as possible. BUONADONNA: But businesses in Britain say they cannot cope with more legislation. Caterham Cars is a successful sports car manufacturer in Kent. They build these models by hand and employ sixty-five technicians but also need part-time and temporary staff during busy periods. Its managing director says more regulation will put companies like this under pressure. SIMON NEARN: We have to maintain our flexibility. If there's business to be done out there we have to react and to do that we have to bring in new staff, sometimes on a part-time basis, sometimes on a short contract. We need the flexibility and the more we are laboured down with different regulations and requirements from our point of view the more it makes it hard to react to these things. BUONADONNA: The government is sensitive to employers' concerns. Unions and some Labour MPs fear that some part-time workers will be excluded from the new rules. The government is meant to put the finishing touches to legislation to implement this directive by next month. MONKS: We think they're being too narrow and minimalist in their interpretation of it. The major argument is that we want to apply it to all workers - they're thinking of limiting it to just employees. That makes a difference of several million people who will be covered by the directive. TONY LLOYD: One of the concerns to members of parliament, Labour members of parliament, one of the concerns of people within the world of work, is that we have a definition that allows people who are part-time workers to benefit from the protection that this directive seeks to give them. So we want a wide definition that takes in as many as possible. BUONADONNA: Another draft directive waiting for approval in Brussels would give workers in companies with more than fifty employees the right to be informed and consulted about any major changes to their contract of employment. If a company fails to consult its workers, its plans could be stopped. So far the UK has been blocking progress on this. LIDDELL: Good businesses are already communicating both upwards and downwards within those businesses. So I don't think over burdensome regulation is the way forward. We want to create a modern business model that recognises the dynamism of a modern economy. BUONADONNA: Caterham cars is doing well - but it's one of the few remaining examples of what was once a thriving industry. Some feel that what's happened at Rover's Longbridge plant underscores the need for better consultation with workers and they're hoping to persuade the government to listen. LLOYD: I don't think we have anything to be afraid of in terms of information and consultation. I think we have an awful lot to gain by saying that where we take an issue like Longbridge for example, it's in the interest of everybody if the workforce are consulted at the earliest possible time when major changes are due to take place. BUONADONNA: French companies such as Genset have already accepted this type of legislation. If a substantial majority of countries could be found to back a European directive on this it would become law despite British opposition. MONKS: We expect when the French take over the presidency of the European Union in the second half of this year, for them to revive the proposal for a directive on information and consultation. And we think it's a very, very important measure. AUBREY: (INTERPRETED) This approach exists in France, Germany, Belgium, in most European countries. I think that at a time when there are increasing numbers of pan-European companies, which are merging across European borders, the implementation of common regulations would be useful. Naturally we mustn't impinge on the operations of the companies. I think however, that a balance can be found so that employees are not reduced to learning that their company is about to shut down one of its plants by reading about it in a newspaper. With such an attitude how can anyone persuade them that they're important to the company? BUONADONNA: A whole series of proposals are heading the British way. The Lisbon summit will also start a five year plan to update the European social model. The plan, known as the Social Agenda, will include programmes to tackle discrimination and offer more protection for workers and will inevitably lead to more Europe-wide regulation. ANNA DIAMANTOPOULOU: It will be a coherent framework with a piece of legislation, with projects, with programmes, with policies for co-operation and co-ordination between member states and it will refer to social inclusion issues, to other discrimination policies, to social protection issues, to women issues and we will launch our public debate after Lisbon. ONKELINX: (INTERPETED) We are lobbying for the creation of a genuine European Social Agenda which would act as the guiding thread of Europe's Social integration. It would provide for the monitoring of all developments in the matter throughout Europe, both European standards and European social frameworks. If such a decision is taken the forthcoming rotating presidencies of Europe - France, which is very keen to see a European social agenda, followed by Sweden and Belgium, which is no less keen - will be able to push through the changes required. BUONADONNA: The direction some in Europe are taking is not just worrying for Britain, the chief economist of the European Central Bank says that Europe's economy is hindered by over- regulation. A message Britain will repeat in Lisbon. LIDDELL: Rather than just seeking a legislative solution we should be looking at best practice, at how other countries have coped with situations, who's done it well and who's done it less well rather than necessarily always going down the legislative route. You know, we need to get away from red-tape Europe. Red tape Europe inhibits business, inhibits opportunities for employment and inhibits opportunities for growth. AUBRY: (INTERPRETED) I would like to answer with a Tony Blair anecdote. When he came to France he told us there's no such thing as left-wing policies or right-wing policies. There were only good or bad policies. I don't necessarily share this point of view. I personally would tell him there are good or bad ways of regulating things. To reject regulation as something which is always negative seems to me just as bad as to claim that everything should be regulated. BUONADONNA: This week's summit will be a crucial test for Tony Blair. Unless he can be seen to drive the European economic reform it will be even harder to push Britain's membership of the Single Currency. Although he may have begun the journey he still seems to have a long way to go to persuade all his European partners to follow him. HUMPHRYS: Paola Buonadonna reporting there. 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. HUMPHRYS: William Hague is taking a tough line on Britain's relationship with Europe. He wants us to draw a line in the sand, to say there will be no more powers handed over to Brussels. Some of his party are worried about what that will do to our position in the European Union. But, and here's his real problem, others want him to go even further. They say too much power has been handed over already and they want it back. Jonathan Beale has been looking at how the battle might end. JONATHAN BEALE: Brussels is getting ready to welcome new countries to the European Union. But before they can take their places at the table, changes will have to be made. Some Conservatives accept that means more power being handed over to Brussels. Others want to take power back. The Tory Leadership is trying to keep both sides happy to avoid splits over Europe being on display again. ROGER HELMER MEP: We want to be clear that there are areas of policy currently which are EU competencies that in future under a Conservative government should be brought back as clearly British national competencies. LORD BRITTEN: Well a lot of people talk about a lot of nonsense and you can't stop them talking about it, but it doesn't mean its going to happen. BEALE: William Hague wants a more flexible Europe before it welcomes new member states. He wants Britain to have the right to reject any further Brussels interference. His is a vision of being able to pick and choose any future EU legislation. It's Europe a la carte: There are currently fifteen countries in the Union, but eastern Europe is queuing to join. Conservatives are worried that in a larger EU Britain's right to veto legislation could be diminished. The Tories fear it would leave Britain unable to prevent more powers of the national parliament being handed over to Brussels. The transfer has already started. In previous treaties Brussels has been given powers to create a SINGLE MARKET, a SINGLE CURRENCY and a SOCIAL CHAPTER to protect workers' rights. The Commission is now ready to look at the next course: Beefing up the European Foreign and Security policy and EU Justice and Immigration controls It could also press for a European Charter of Rights. Eventually the Commission would like to get round to creating a European Army and to gain some influence over Taxation. The Hague menu would add flexibility. FRANCIS MAUDE: We take the view that the European Union's reached a fork in the road - with enlargement much overdue it's got to do one of two things. It will either have to intensify the integration towards full political union or it's got to go down the route of flexibility, of having a European Union where the one size fits all dogma, of uniformity that's been really the dominant theory of the European Union since its inception. We recognise that that's out of date. A modern Europe in a modern world needs to be more flexible. BEALE: The party's pro- Europeans are worried. Candidate countries could be left in the cold if there isn't a new treaty. But William Hague says a Tory Government would be willing to hold up the negotiations if he didn't get what he wanted: BRITTAN: It would be a tragedy for the Conservative party as the champion of enlargement, and greatly respected and admired in east and central Europe were to lose all that by seeming to stand in the way of the one change which would certainly be a modest one which is needed to achieve enlargement, which everybody agrees is needed. BEALE: But the Conservatives want Britain to set its own agenda. It, and any other country could refuse to sign up to any future EU legislation. Countries such as Germany France, Holland Belgium and Luxembourg could still pursue further integration. But they couldn't force Britain to join their party. BRITTAN: It would mean that there was a forward looking group and we were left behind and we would have much less influence. Conservatives, some Conservatives argue in favour of it because they think it's a way of picking and choosing and cherry picking and doing what we want and not doing what we don't want. Well, that can't work in the European Union and it wouldn't be agreed. BEALE: Some Tory Euro- sceptics wouldn't swallow it either. They fear a two tier Europe would only speed up integration for some. Even if Britain opted out at the start - as with the social chapter - it could always get pulled in later. BILL CASH: That means a hard core two tier Europe of the kind that was ruled out by the Conservative Party when in power in 1996. Now I happen to be dead against the idea of a hard core two tier Europe because actually it is conceding the principle of a federal Europe BEALE: But the policy may brighten up Tory fortunes back home by appealing to an electorate that's showing sings of disillusionment with the EU. In last May's Euro elections the slogan "In Europe, not run by Europe" struck a chord - at least with some of those who bothered to vote. The party is being urged to go further still. Many Tories believe there's already been too much influence from Europe. They want to turn back the clock and renegotiate past EU rules and regulations which they say have been bad for Britain. In essence they want a menu that's decided by Westminster not Brussels. Tory Euro sceptics have already prepared a list of ingredients they want taken out of the EU's hands. The leadership itself is already committed to trying to take control of fishing rights, but many within the party want more Some would like to renegotiate the Common Agricultural Policy. Getting rid of European health and safety rules such as the working time directive and new workers rights in the Social chapter are high on the list of demands. DAVID DAVIES MP: I cannot conceive of a Conservative Government in the future leaving in place the social chapter, not just because of its Labour law overtones but because it means the rest of Europe can overrule us and tell us what laws we should have in that area and there are others too. JOHN REDWOOD MP: Is it enough merely to say we're going to renegotiate fishing or should we also say that the Social Chapter - which all Conservative members of parliament voted against - should no longer apply in Britain under a Conservative government? If so I think that will require a re-negotiation as well. So I think near the election William Hague has got to put before the British people what his re-negotiation would amount to. How much flexibility he wants on things that have already happened. BEALE: The issue of re-negotiation is still being considered by the shadow cabinet. An internal party discussion paper penned by Archie Norman warns: "We should as far as possible avoid the language of re-negotiation..." It goes on to say that : "Some element of re-negotiation in the manifesto is unavoidable. It is a question of how it is described" MAUDE: It has a connotation for people at both extremes of the argument - there may be some for all I know for whom re-negotiation is code for getting out of the European union. HELMER: We in the party seem to be very coy about the word re-negotiation, but it seems to me that if we are committed to going back to areas like fisheries and bringing back national control of fisheries then whether you like it or not that is re-negotiation. That's what we have to do, that's what the British people want and that is what I hope very much will be in large letters in the Conservative General Election manifesto. BEALE: But the language has so far been limited to future flexibility. Even that would still need the approval of all member states. But rewriting past treaties may prove to be as difficult as changing the favourite dish of a long established restaurant. BEALE: Though as a last resort other countries could always be reminded of who helps pay the bill REDWOOD: We make a very big contribution to the budget. I'm sure they wouldn't want to jeopardise that kind of relationship in any way. We can remind as were paying for a lot of the show maybe we should have a bit more influence over the show. BEALE: Such suggestions may be simply unpalatable. The former shadow foreign secretary is calling for a more cautious approach. He says they should limit its demands. JOHN MAPLES MP: I think if we said we wanted to go back and renegotiate bits of the past I think we'd find that impossible to achieve in negotiation. Forward flexibility may well be something that we can achieve and I believe we can. BEALE: Back in Brussels as the EU government's prepare to sign the new treaty even such modest changes may never reach the table. Out of office the Tories are effectively out of the discussions. Euro-sceptics warn if the party doesn't commit itself to re-negotiation, more people will be wanting out altogether: CASH: What I'm saying is that there is an increasing call for withdrawal from certain quarters in the United Kingdom, and that that will simply be increased if in fact we don't have a clear blue light policy of re- negotiation which does stand up which is not withdrawal, which is in favour of the single market , but which at the same time upholds the right of the British people to govern themselves. HELMER: The other member states will realise that if in the long term the British people don't get what they want out of Europe, then indeed the question of withdrawal will arise whether we like it or not. So that will be lurking in the background of the negotiations. BEALE: The Conservative leadership still hopes that it's created a recipe that can unite the party and attract the voters too. But pro-Europeans are already concerned that re-negotiation will one day appear on the menu. As for the Euro-sceptics they are already asking for more. HUMPHRYS: Jonathan Beale reporting there. JOHN HUMPHRYS: The Tories are feeling relatively pleased with themselves this weekend. They reckon they've got the government on the run over a number of different issues and they've just scored their first by-election victory in Scotland for more than thirty years. The next big test for all the parties is the local government elections in England and Wales in the first week in May. Labour's worry is that many of their traditional supporters will stay at home and the Liberal Democrats are afraid they may continue to lose voters in the south. All of which would be good news for the Tories and people may start saying that Tony Blair cannot take the General Election for granted. Terry Dignan has been taking some soundings of his own. TERRY DIGNAN: For nearly twenty years the high tide of Conservatism dashed Labour's attempts to capture the towns of the Medway. Then, in 1997, the Conservatives were swept away. Now they hope to show they're on course to winning back the Medway towns by taking the council from Labour in May's local elections. What the Tories are counting on is a little help from Labour's core supporters. If Labour's traditional core vote fails to turn out here in the Medway towns and the rest of England, the Conservatives could be heading for their best election result since 1992. Like Labour, the Liberal Democrats are also worried. Although they expect to make gains at Labour's expense in the urban North of England, they fear losing to the Tories in their Southern strongholds. The big question mark hanging over the Conservatives is whether they do well enough in these local elections to suggest they pose a serious threat to Labour at the General Election. Hoo St Werburgh is a microcosm of England's electoral battleground and, says Medway's Labour leader, could provide clues for the General Election. PAUL GODWIN: Well, this is an ex-council housing estate which has been taken over by a local housing society. A lot of core Labour voters here who would have voted for us in '97 in a marginal ward and obviously we need to ensure they come out again and vote for us on May the Fourth. We currently have one Labour councillor and one Conservative councillor representing this ward so it's extremely important. We returned three Labour MPs in Medway at the '97 General Election and, of course, this is a testing time for us in terms of the vote at the local elections, probably a year, eighteen months in advance of the next General Election. I know the three local MPs are working very hard to help us get the Labour vote out in the local elections for that reason. So it is going to be a clear indicator and pointer to what might happen in the General Election. PROFESSOR COLIN RALLINGS: Labour core supporters exist everywhere - there are of course many more of them in the North of England and in parts of urban Scotland, but even in the South there are pockets of strong Labour support and if Labour supporters there are taking the same attitude to the party and to the Government as Labour supporters in the North and in Scotland, then it can have a similarly damaging effect. DIGNAN: So worried is Medway Council about future turnouts, it's hired a drama group to persuade these bemused sixth formers that voting is cool. Low turnouts don't hurt every party. It's being predicted that if Labour voters stay at home in May, the Conservatives can feel optimistic about regaining Medway's Parliamentary seats at the General Election. RODNEY CHAMBERS: If the traditional Labour core vote stays at home, then it is my belief - and I think it will stay at home - that the three Members of Parliament, Labour Members of Parliament, that are representing the Medway towns at the moment, must be very seriously worried people. DIGNAN: When the parties cast off and set sail for polling day, how many of their supporters will climb aboard? In local by-elections Labour has only been able to retain sixty-eight per cent of the votes it received at a previous council contest. The Conservatives, though, have kept ninety-four per cent of their vote; the Liberal Democrats ninety per cent. So low turn-outs in council elections have been hitting Labour hardest. RALLINGS: In London and in other places, councils for example like Medway, there are pockets of very strong Labour support; and if those Labour supporters sit at home then it means, at the elections in May in Medway, that it could have the effect of Labour losing effective control of the council. And of course if they sat at home again come the General Election, then it would mean a seat like Gillingham, part of the Medway Towns, would be taken back by the Conservatives from Labour with almost no votes actually changing hands. DIGNAN: The early signs of Spring in Kent. Yet Labour fears many of its core supporters feel their lives show little sign of changing for the better under Tony Blair's Government. GODWIN: I think it is of concern. I mean, obviously, the national opinion polls are still very favourable to the Labour Party but I think it is a problem for us. I think any party in power when they're governing clearly has to get across what it's achieved. And the Labour Government's no different from anybody else. DIGNAN: Nowadays local politics generate little excitement. But that doesn't put off Liberal Democrats like Maureen Ruparel. At the last Medway elections her party won as many seats as the Conservatives. To improve the Tories chances of winning the council - and then the Parliamentary constituencies - they need to take votes off the Liberal Democrats. It's conceded that may happen albeit on a limited scale. MAUREEN RUPERAL: Apart from people switching to the Liberal Democrats, I think an awful lot switched to Labour at the last election. Some may go back to the Conservatives if that's their natural home, but basic core Liberal Democrat support doesn't alter. DIGNAN: During the nineties that support rose steeply in Torbay. So much so that the Liberal Democrats won control of the Devon resort from the Tories on the back of the Poll Tax revolt. Since then they've also won the area's Parliamentary seat. The recent history of voting behaviour here in Torbay will be familiar to many parts of Southern England. First, the Liberal Democrats win control of the council. Then, they oust the sitting Conservative MP. To show they're well on the way to reversing this process, the Conservatives in places like Torbay will have to be able to inflict heavy losses on the Liberal Democrats in these elections. Glassblowing - a craft practised at Cockington Court with funding from Torbay Council, whose leader is visiting. She's up against Conservatives who - no longer associated with an unpopular Tory Government - find it easier to exploit local discontents. ANN WIILIAMS: There are difficult decisions that we have to take locally, not just here in Torbay, nationally. Government legislation has to be adhered to, and our local Conservatives here are in an extremely comfortable position. How wonderful to be able to criticise the Labour government. How wonderful to be able to criticise the Liberal Democrat administration. DIGNAN: In areas like Torbay the Liberal Democrats believe they've benefited from tactical voting. It's meant Labour supporters backing them to defeat the Conservatives. But now the Conservatives are out of office, is tactical voting much in evidence? WILLIAMS: I don't think the Labour supporters here in Torbay would like to see a Conservative MP, or a Conservative council. A lot of people that I speak to on a regular basis, they don't forget the Tory days here in Torbay. It's commonly known, many, for many, many years as Tory Bay." RALLINGS: I think the case has now rather changed, and the Government isn't hugely unpopular and neither any longer are the Conservatives. At the next time if people revert to their normal party pattern, then that may allow, in several of the constituencies, the Conservatives to slip through the middle without actually polling many more votes than they did last time. DIGNAN: These are the Conservative activists who stayed loyal during the years of unpopular Tory rule. Driven from power throughout the South West, they're planning a comeback. Today they're delivering newsletters denouncing their arch enemies in the region, the Liberal Democrats. RICHARD CUMING: I think the tide is turning against them, I think if you have a look at the European election results twelve months ago, the Conservatives in the Bay polled over nine thousand votes, the Liberal Democrats just over three thousands votes. The message is clear that people aren't prepared to support the Liberal Democrat policies either locally or of course nationally. DIGNAN: Yet even if the Liberals Democrats do lose seats in the South, that won't tell the whole story. Because they could be making gains at Labour's expense in the urban North. RALLINGS: During the 1990s when the Conservatives were so unpopular the Liberal Democrats took many seats and indeed Councils, from the Conservatives, especially in south and south-west England, places like here in Torbay. And they've found their success now over the last couple of years more in traditional Labour areas where they can compete effectively against Labour Councils and represent a protest vote against the Labour government. DIGNAN: Having once looked as if they might sink without trace in local elections, the Conservatives are back afloat and charting a course to possible victory. In council by-elections their share of the vote is running at thirty-six per cent, ahead of Labour at thirty-five per cent. Lying astern are the Liberal Democrats - their vote share is currently twenty-four per cent. Projecting these figures to May gives the Conservatives about three hundred gains. Labour would make roughly two hundred and eighty losses with the Liberal Democrats showing little or no change - suggesting they'll do well in Labour's Northern heartlands but badly at the hands of the Conservatives in the South of England. So what do these calculations tell us about Liberal Democrat prospects at the General Election? Winning in the North may not be of much comfort to them because there are few marginal Parliamentary seats they can gain there. It's the South which will determine their immediate future. RALLINGS: Almost half the Liberal Democrat seats currently in Parliament are at risk to a five per cent swing from them to the Conservatives at the next General Election; and their performance in parts of the south suggest that they are now suffering that level of swing to the Conservatives - that must put some twenty of their MPs under serious threat. DIGNAN: But does the scale of the Conservatives' predicted gains - three hundred extra council seats - mean William Hague could defeat Labour at the General Election? RALLINGS: I think in reality these elections in the coming May, the Conservatives need to register something in excess of four hundred gains to suggest they have the kind of lead over Labour at this stage in the Parliament which they could use to build on to threaten the Labour majority at the coming General Election. DIGNAN: May will see the start of Torbay's summer season. By then we might only be a year away from Tony Blair calling a General Election. Much could depend on Labour avoiding a poor performance in the local elections. That means persuading core supporters it's worth joining the one in three people who now bother to turn out. HUMPHRYS: Terry Dignan reporting there. And that's it for this week. Don't forget you can keep in touch with us through our website, the address is on your screen now. That's it for this week, goodbye. ...oooOooo... 22 FoLdEd
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.