JOHN HUMPHRYS:                 But first the Euro.  This 
has been has been a very difficult week for the government and it's the 
Euro largely to blame. Ministers have always been divided over what strategy 
to follow and now those divisions have surfaced in the most damaging way. 
They're not likely to go away, certainly not over the next few days because 
Europe's leaders are meeting in Portugal for their twice yearly summit. 
A golden opportunity, then, for the opposition to make progress. Well, 
that depends on whether THEY can convince an increasingly sceptical public 
that their policies are the right ones. I'll be talking to Menzies Campbell 
of the Liberal Democrats in a moment but, first, the Shadow Foreign Secretary 
Francis Maude. 

                        Good afternoon Mr Maude.

FRANCIS MAUDE:                Good afternoon.

HUMPHRYS:                      In a somewhat windswept 
sunny West Sussex garden it seems. Gordon Brown has very firmly reasserted 
his position on the Euro, the government's position on the Euro and it 
is incredible. What he is saying is that we prepare for going into the 
Euro but we do not decide until we have passed - Britain has passed the 
five economic tests that have been set for it. It's all about the economy 
and what is right for Britain. That's a sensible position isn't it?

FRANCIS MAUDE:                Well I mean it's an understandable 
position. We think it's wrong because there's no way in which the British 
economy can be right to join the Euro anytime during the next Parliament 
so the right thing to do is to say no we won't join it and there are huge 
political risks in terms of, you know there never has been a currency union 
without a political union before. Now it may turn out that this one can 
operate without a political union but it will be a first in history and 
that's why we've concluded the right thing to do is to say no we won't 
join the Euro. But, I mean it's a perfectly honourable position to hold. 
What is not honourable, or honest, is to try and pretend to the public 
that there is no debate and that's where I feel a certain sympathy, perhaps 
unusually for Robin Cook who has assumed that government policy means what 
it says and has sought to engage in a really open serious public debate 
about the merits of scrapping the Pound and joining the Euro.   It's rather 
humiliating for  him, he's been sought of stamped on by Gordon Brown and 
told he mustn't do any of this but I think the people who really lose out 
here are the public who are denied the chance for really serious debate 
with the issues hammered out being treated like grown ups. 

HUMPHRYS:                    But you can see that 
Gordon Brown is right that it is about the economy. That it is all about 
what is in the best economic interests of Britain, you'd accept that?

MAUDE:                    No it isn't. No I don't 
accept that. It isn't just about economics, it's about the effect on the 
way Britain governs itself as well. Of course economics matter and of course 
it's right that Britain's economy is fundamentally out of sync with the 
rest of Europe. It tends to drag what goes on in North America more than 
it does the Continent of Europe which is why the Pound has been so extraordinarily 
stable against the United States' Dollar but very volatile against the 
Continental currencies so there is a huge economic issue which is no way 
near to being resolved but is also, as I've just said, it is part of the 
whole issue, what difference does this make to our ability to govern ourselves 
and in reality that has already being eroded to a considerable extent and 
we've taken the view by and large that the loss of self-government is a 
trade-off worth making for the benefits that we've had from it. But, if 
the cost of scrapping the Pound and joining the Euro is as we fear it will 
be that we will end up with a full scale political union then that is not 
a price that anyone could possibly contemplate paying. But we ought to 
have that debate. Gordon Brown and Tony Blair simply maintain that these 
issues don't exist, that there's no constitutional issues involved, well 
there are and very big ones and we should talk about them. 

HUMPHRYS:                    But just to return to 
the economic argument for a moment. The OECD is now saying that we are 
beginning to resolve those economic difficulties, that the  convergence 
that everybody says must happen before we join is now on its way, it's 
happening. 

MAUDE:                    Well that's based on very, 
very slender evidence and a few sort of passing indications and in reality 
you will want to look at something really sustainable.  If you look at 
what's happening at the moment, you know the interest rate cycle is different, 
it's fundamentally different. The business cycle is different. We've been 
through a long and sustained boom for quite some time now and it's now 
our economy is probably cooling off now. The continental economies are 
only just getting going so the cycles are fundamentally misaligned.  Now 
it may be that over time they will come back into -.or come into convergence 
but they are not anywhere near that at the moment. 

HUMPHRYS:                    But if that were to happen 
during the lifetime of the next Parliament, I  know you believe it to be 
unlikely but nonetheless clearly not impossible, but if that were to happen..

MAUDE:                    No, I'd say it is impossible. 


HUMPHRYS:                    You'd say it was impossible. 


MAUDE:                    Yes it is, it is impossible 
that you could have a sustained convergence emerging in the course of the 
next five years, it just beggars belief that that could happen. 

HUMPHRYS:                    How long is sustained 
then?

MAUDE:                    Because you would want to 
see it happen certainly over the course of a cycle wouldn't you, an economic 
cycle, you wouldn't to see just a flickering convergence, the two paths 
just happening to cross for a moment. You would want to see this really 
sustained. Because we have seen with the Exchange Rate Mechanism what happens 
if you try to lock currencies together without the cycles being properly 
converged. We thought we were converged sufficiently in 1990 to join the 
Exchange Rate Mechanism but within two years of that the divergence had 
become so stark that we actually had to leave it. Now the thing about the 
ERM is that it wasn't for ever, there was an exit from it, it wasn't a 
very dignified or graceful exit but there was an exit. There's no exit 
from the Single Currency, once you scrap the Pound that's it. 

HUMPHRYS:                    So, you say - in answer 
to the question how long? You say it has to be a full cycle, so in other 
words if we were to see, let me put this - if we were to see convergence 
beginning to happen, the economies coming together during the lifetime 
of the next Parliament and let's assume a cycle to be, I don't know, five, 
six years, something like that, is that a reasonable period?

MAUDE:                    Yes it's that sort of time. 


HUMPHRYS:                    So by the end of that 
five or six year period, it might well be that you would be in government, 
I mean it's possible that the next, it might be in the next election of 
course, it might be the one after that. You would then, you would then 
say alright we will then take the country into the Euro, is that your position?

MAUDE:                    No, not a bit as you know 
very well. Our position is that we think there are enormous risks in scrapping 
the Pound and joining the Euro, both economic risks which are very clear 
and it isn't just the cycle it is also that our economy is structurally 
very different. It is much more liberalised, a much more open economy, 
it trades in far more different directions. Our trade is very multinational, 
it's globally orientated, not just European orientated and so there are 
major structural differences which would need to be resolved before one 
could contemplate it but also, as I said before, there are these major 
constitutional concerns. Now it's just the case there never has been a 
currency union before that's operated without there being a political union. 
Actually a political union has happened before the currency union is created. 
 Now that's fine to do that but the fact is if you are going to go into 
this, scrap the Single Currency.. scrap the Pound and join the Single Currency 
you would want there to be really serious evidence that this wasn't drawing 
political union in its wake. And of course the first aspect of political 
union you would see is tax harmonisation and we are already seeing that 
with intense pressure among our partners in Europe and the Commission to 
introduce a really serious programme of tax harmonisation and you can understand 
that case for that. But it is entirely to do with currency union. 

HUMPHRYS:                    So in short, it's possible 
to envisage the circumstances in which we would go in isn't it?


MAUDE:                    Well, I've made it very 
clear on a number of occasions that I find it very hard to envisage circumstances 
in which we'd want to join the Euro.  I don't rule it out, I'm not arrogant 
enough to believe that we know all truth for all times.

HUMPHRYS:                    .... pretty fine distinction......

MAUDE:                    .. that we can say never. 
 No it isn't at all, but do I find it hard to envisage circumstances in 
which we would join, yes I do.

HUMPHRYS:                    Mm.  I mean most people 
listening to that would say, well come on, the Tories clearly aren't going 
to join.  Why don't they just come out and say so instead of spinning us 
along so that they can say to some people in their party, you know we might 
go in one day but in truth we know we won't.

MAUDE:                    Well, this is a discussion 
you and I have had on a number of occasions John.

HUMPHRYS:                    And it's never been resolved, 
and it's going to dog you right through the next election, and maybe the 
one after that.

MAUDE:                    No, I don't think it is, 
because actually I think most people, most people take a rather more robust 
view of all this than you do.  There's no other policy on which we're constantly 
pressed to say what is going to be our manifesto after next.  We get elected 
for a parliament at a time, and of course we set down policies for a parliament 
at a time.  That's just ordinary parliamentary democracy, but you know, 
we are saying vote Conservative at the next election to keep the pound. 
 If you want to keep, to be sure of keeping the pound the only way to do 
it is to vote Conservative, and that's a very straight-forward position, 
and Labour ought to be honest enough to say that they are robustly and 
firmly committed to scrapping the pound and joining the Euro, which as 
I say there's nothing evil or dishonourable about that.   What is dishonourable 
though is to try to pretend that there is no debate about it, to try to 
suppress the debate, and as I say I have a lot of sympathy with those like 
Peter Mandelson, Robin Cook, Stephen Byers  who say that if the Government's 
really serious about it and we know that they are, then it is their duty 
to the public to go out there and make the case.  We know what their plan 
actually is, to try to win the election and if they win the election to 
come in on, in the slip stream of that and have a referendum immediately 
afterwards.  And people will be very resentful I think if that's the case. 
 Let's have the debate, let's have it openly, honestly, let's explore the 
issues, let's treat the public as the grown-ups, the intelligent grown-ups 
that they are, and not pretend that this is somehow you, something you 
shouldn't discuss in front of the children - let's keep it, you know, turn 
Britain into  'don't mention the Euro' zone. 

HUMPHRYS:                    As you raise the question 
of the referendum there, you would have possibly a very large number of 
referendums wouldn't you, because you're now saying that you would have 
a referendum on any serious constitutional - or any serious issue, substantial 
issue that comes up in Europe and that would be changed - change our relationship 
with Europe.  Are you doing that because you want to win back the support 
of the very rich Mr Paul Sykes and other supporters of his.  Is that what 
this is all about?

MAUDE:                    You know very well it isn't. 
 I've heard the suggestion made and it is utterly absurd.  The last time 
I talked to Mr Sykes, which is I think the only time I talked him which 
was about two years ago.  We've formulated our policies on the basis, and 
this may seem a bit old-fashioned to you John, but on the basis of what 
we think to be right for the people of this country.  And we do think it 
right that if there were to be - and we're saying that under the Conservatives 
there won't be further transfers of power from Britain to Brussels, but 
if there were to be in an circumstances then there should be referendum. 
 The people should be consulted about it.  I think support for Britain's 
membership of the European Union has been eroded in recent years by the 
fact that people felt that decisions - major decisions of this nature were 
being taken without they're being consulted, and if you believe as I do 
that Britain should remain in the European Union, then you would want the 
legitimacy to come from the public being properly consulted.  And that's 
why at the end of this year when there's a further treaty which looks as 
if it will be an integrationist treaty giving away further powers to Brussels 
...

HUMPHRYS:                    The treaty of Nice...

MAUDE:                    ... the treaty of Nice, 
there should be a proper referendum then.  Tony Blair should not just try 
and slide it in by claiming that it's just about technicalities.  It won't 
be about technicalities so far as we can see, and the people should be 
consulted.

HUMPHRYS:                    What about the referendum 
- the changes that are being proposed now at Portugal - the talk about 
fundamental rights treaty and that sort of thing.  Would you want a referendum 
on that?

MAUDE:                    Well, yes if that's going 
to transfer powers, and it sounds as if that's going to be legislated through 
the treaty in one way or another, even as an annex to the treaty.  Now 
Tony Blair will say well it's just technicalities, just declaring a few 
rights.  Well, we know what happens.  When these things get decided they 
get brought into the European Union jurisprudence, the court adjudicates 
on them and before you know where you are you have British laws being overset 
by European courts.  Now, we know that that happens in certain cases but 
we should - it's where we've taken a deliberate decision to hand over powers. 
 What shouldn't happen is it happening by stealth, by slippage, and by 
the treaty somehow creeping forward by the way it's interpreted.  So we're 
saying......

HUMPHRYS:                    ...so why did you...sorry, 
I was to say why didn't you have one on Maastricht if you feel this way 
about things?

MAUDE:                    Well I think for one thing, 
at that stage there was not the custom of having referendums, but you know 
we've had referendums now on everything.   We've even had a referendum 
for heaven's sake on whether London should have a Mayor.  If you can have 
a referendum on that then, surely should be having a referendum on whether 
Britain becomes a province of a United States of Europe.

HUMPHRYS:                    So the Conservatives 
now like the idea of referendums.  We're going to go the way of Switzerland, 
is that it?

MAUDE:                    Well, no, not a bit, but 
Mr Blair has introduced the referendum as a constitutional instrument. 
 We've now had what - four or five in the few years since he's been Prime 
Minister, and I think people will say, well if we can one on Scottish devolution, 
even rigged ones like the Scottish and Welsh ones were, and you have one 
on Northern Ireland and you have one on whether London should have a Mayor, 
and you're threatening to have them on whether the south-east of  England 
and the North-west should have their own regional assemblies, then you 
should certainly have one on whether the Houses of Parliament are turned 
into a regional assembly of the United States of Europe.

HUMPHRYS:                    Right.

MAUDE:                    People will be pretty resentful 
if they're not given that.

HUMPHRYS:                    Well, Mr Sykes would 
enjoy hearing you say all of this.  He told us this morning that he wants 
to come back into the Tory Party which of course he left a few years back. 
 Would you like to see him come back in?

MAUDE:                    Well, I mean I welcome people 
who support our aims, but obviously we don't welcome people who don't support 
our aims, and if he's seen our policies and likes what he sees then I'm 
very pleased indeed.

HUMPHRYS:                    I imagine you'd welcome 
his money wouldn't you?

MAUDE:                    Well, as far as I can say 
- I mean I'm not aware that he's offered us any money.  If he does then 
we'll obviously be ready to listen, but I'm not at all confident that he 
has offered any money.


HUMPHRYS:                    And then people will 
say 'Ah, well, look, you see he's buying your policies'.  That's what will 
happen isn't it.

MAUDE:                    People always say silly 
things like that, but in reality as I've told you I haven't talked to Paul 
Sykes for two years.  I've only talked to him once in passing, and you 
know the idea that this policy has been developed to please Mr Paul Sykes, 
it hasn't been developed to please him at all. It has been developed to 
give the British public the sense that they actually have some say over 
the destiny of their country, and they aren't just going to get dragged 
further and further into a single European super-state which none of them 
want.

HUMPHRYS:                    Right.  Francis Maude, 
thank you very much indeed for that.

MAUDE:                    Thank you John.