BBC On The Record - Broadcast: 28.01.01



==================================================================================== 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: 28.01.01 JOHN HUMPHRYS: Good afternoon. We're told that Tony Blair and Peter Mandelson are now at war over Mr Mandelson's resignation. Does that give the Tories new hope? I'll be talking to Ann Widdecombe. Has the government ditched its promise to get us out of our cars and onto public transport? I'll be asking the Transport Minister. And how can we pay the bills for our public services if politicians keep promising to cut our taxes? That's after the news read by George Alagiah. NEWS HUMPHRYS: Britain's roads are seizing up... will they get much worse now the government's stopped promising to reduce traffic? GWYNETH DUNWOODY: "Anybody who suggests that somehow or other by just letting everybody rely all the time on the combustion engine is producing a recipe for total chaos in the final analysis." HUMPHRYS: We're promised lower tax bills. Very nice too... but what happens when the bills for all the public services are presented? JOHN HUMPHRYS: Tony Blair might have hoped that the Mandelson resignation and all its ramifications would have been fading away by this weekend. Quite the opposite. And if he wants to find the reason he need talk only to his own Press Secretary Alastair Campbell. Mr Campbell gave a briefing to journalists that's been interpreted as an extraordinary attack on Peter Mandelson. Mr Mandelson himself has written a piece for the Sunday Times in which he says he was "forced" from the Cabinet and had never done anything wrong. The Conservatives must be hugging themselves with glee. The Shadow Home Secretary is Ann Widdecombe. Miss Widdecombe, Peter Mandelson says he was forced from government, hadn't done anything to deserve it - do you accept that? ANN WIDDECOMBE MP: I just feel completely baffled by the whole business. No senior minister, particularly that senior a minister, has to resign because he had a memory lapse about an entirely innocuous conversation. If that is what has happened, then we would all say, what is this about, what is going on in government, what is Blair doing, what is Alastair Campbell, who is afterall a Civil Servant, what is he doing. What is going on? And that I think we need to know. But above all, from my point of view, as Shadow Home Secretary, where my responsibilities in all of this are concentrated, I want to know what happened after that telephone conversation had taken place. HUMPHRYS: The telephone conversation with Mike O'Brien, the Home Office Minister. WIDDECOMBE: Indeed, so when Mike O'Brien, Home Office Minister, put down his telephone after that conversation with Peter Mandelson, what happened next and was there any link between either that conversation or the million pounds, or anything else and the final very speeded up granting of citizenship. Now we are entitled to ask those questions. I think we must all keep our heads, we can't get to a stage where we paralyse representation and say you must never mention to anybody anything at all. We can't get to that stage. But we do need to ask if there is a serious link between the final decision and the speed at which it took place and the dealings between the Hindujas and Mandelson. HUMPHRYS: Do you accept at least the possibility that he didn't do anything wrong? WIDDECOMBE: Well he insists that he did not. Now as I say, if he didn't, if this was really, a totally harmless conversation, there is a way to establish that straightaway. The record of that conversation, because a civil servant will have made a note, a record of that conversation can be placed in the public domain. That can be established right away. HUMPHRYS: He says he's happy to appear before the enquiry, indeed he wants to appear before the enquiry. WIDDECOMBE: Mr Mandelson will probably have no choice but to appear before the enquiry. But as I say, I think most people will be feeling baffled today. Either he did something seriously wrong or he did not. If he did something seriously wrong then clearly he should have resigned but now we need all the facts out in the open. If he did not do something seriously wrong, then what is going on in the Blair government. I mean what exactly is taking place and why all these briefings. HUMPHRYS: Well what the briefers, including Mr Campbell, are saying is that he was sort of temporarily unfocused, he lost it for the moment and you know these things happen, that's the sort of implication isn't it. WIDDECOMBE: Well the fact that you have a temporary memory lapse. If every time a minister had a memory lapse he had to resign there wouldn't be anybody on the government benches. I mean that is clearly a nonsense but also I think this enquiry now needs to broaden its terms. We've had a lot of allegations today about another minister, in the papers. HUMPHRYS: Keith Vaz. WIDDECOMBE: I don't presume to take a view as to the truth or otherwise of those allegations, I wouldn't dream of doing so, I don't think we must now get wild about this. But what I do know is that also has got to be cleared up and therefore we haven't had so far published the terms of reference of this enquiry and I think whatever happens they must be broadened to look at all the circumstances surrounding the Hindujas and government. I think that is the only way we are going to get the complete truth, which may vindicate the people concerned or it may indict them but it has to be one or the other. We have to know what the truth is. HUMPHRYS: You say the Hindujas and government. The fact is the Hindujas have met an awful lot of people, including a party thrown by the Hindujas for your own leader, William Hague. WIDDECOMBE: I don't have any problem with people meeting others. I've been into prisons in this country and met some pretty people rum people I can assure you. HUMPHRYS: Well that's slightly different... WIDDECOMBE: ..well I don't have a problem with meeting - I mean in public life you meet pretty well anybody who's playing a major part, that happens. I never condemn anybody just for having a meeting. But the question is what happens next and that is the question in the Mandelson/O'Brien chain - what happened next? Now for example, one extraordinary thing is that they appear to be claiming that they were just talking to Mandelson about a change in policy and yet - that change in policy hadn't been announced. It wasn't announced for another month. There are extraordinary things like that that I think we do actually need to know what was going on. And any government that has nothing to hide would welcome us knowing what was going on. HUMPHRYS: You say, quite rightly, that politicians meet all sorts of people all the time. But, it is a fact that rich and powerful people have an access to politicians, whether they be leaders of the opposition or whether they be members of the Cabinet that most of us don't have. WIDDECOMBE: Well I think that we have to be grown up about this. I mean it's quite obvious that where you've got major players, very big captains of industry, people who are playing a major part, it could even be in a charity, it could be anything at all, but where you've got very major players, they are going to want to make representations on behalf of their organisation or whatever it may be, from time to time. That's... HUMPHRYS: And they are going to be listened to because they are rich. WIDDECOMBE: Well no, not necessarily, that's why I'm saying you mustn't paralyse representation, but what you must always do and what we have always sought to do in British politics, whether it be the Civil Service or politicians, we have always sought to keep a very clear line between listening and acting with strings attached. I mean the reason that the Prime Minister had so many questions to answer about the Ecclestone affair, was not that there was an exemption for Formula One, but that there was an exemption for Formula One following a large donation. Now, those are the sorts of questions we have to address ourselves to. We have to keep clear heads, this is not about the ability of people to make representations on their or somebody else's behalf. This is about corruption, it is about a favour in return for a particular decision. That's got to be wrong. HUMPHRYS: You mean it may be about corruption, because... WIDDECOMBE: ...the questions are about that. The questions are about that... HUMPHRYS: ...because... WIDDECOMBE: ...no indeed, I mean I've been very careful to say throughout that the enquiry might vindicate everybody in sight - we don't know. But on the other hand, it may not. But the question is about, was there a favour given in return for, in this case, money? But, those are the sorts of questions we have to ask and they're different. HUMPHRYS: You say, yeah, of course, rich and powerful people are going to want access to politicians for all sorts of entirely obvious reasons, but would it not be sensible for politicians of all stripes to say, look, let's insulate ourselves from these from these suspicions. I mean, you in the Conservative Party for instance, if you've got a thousand pounds plus, I realise, I read this morning in the newspapers, you can join this thing called The Treasurer's Club, and you're guaranteed, it seems, a meeting with a Shadow Minister, well a Shadow Cabinet Member. Well, I mean, that isn't right, surely? It means if you haven't got a thousand pounds, you can't meet the Shadow Cabinet Minister, well that's no right is it? WIDDECOMBE: ...well no, it doesn't follow at all because... HUMPHRYS: ...well, you probably won't be able to... WIDDECOMBE; ...a cat can look at a King in this country and anybody can approach those Shadow Cabinet Ministers and they do... HUMPHRYS: A cat can look at a King, he can't necessarily sit down and have a meeting with a King. WIDDECOMBE: ...ah well, no, again, that is completely untrue. I mean, anybody can approach me, I can't see all... HUMPHRYS: ...so why charge them a thousand quid for the privilege then? WIDDECOMBE: ...no, this is straight-forwardly a fund-raising exercise, all parties have fund-raising exercises... HUMPHRYS: ...doesn't it worry you a bit though? WIDDECOMBE: No. No, what would worry me, it doesn't worry me that people who have made huge successes of things and who are very influential players should meet Ministers from time to time, because the fact is you cannot insulate yourself, or, you get accused of not listening. No wonder politicians have got this policy wrong. They wouldn't meet me, they don't listen. Now how often do we hear that. So you've got to have a balance and the preservers of that balance are the Civil Service. And if meetings are always transparent, are always done in the proper fashion with a note being taken, that is a politician's protection and it is the protection of standards in this country and that's what this enquiry is about, were those standards breached? Let's keep clear heads, that is what the question is. HUMPHRYS: Ann Widdecombe, many thanks. HUMPHRYS: We'll be returning to that subject before the end of the programme but first, transport. The government once had a grand vision for transport in this country. We would use our cars less and public transport would be so improved that we would travel on the trains and buses instead. There would be fewer traffic jams and less pollution from all those cars. What a wonderful thought on these congested islands of ours. But it hasn't happened. Quite the opposite indeed. I'll be talking to the Transport Minister, Lord MacDonald, after this report from Paul Wilenius. PAUL WILENIUS: Travelling around Britain in Victorian times may have seemed slow. But now 100 years after Queen Victoria's death, too often it seems little faster. Instead of having a modern transport system fit for the twenty-first century, it appears to be caught in a bygone era. Four years ago Labour promised to drag transport out of the dark ages. There was a grand vision to persuade motorists out of their cars and back on to buses and trains. But now transport experts and Labour MPs fear that great dream has been blown off course. The seaside town of Hastings was once teeming with Victorian holidaymakers. Now it has to put up with hordes of less welcome visitors, traffic. When he came to power John Prescott pledged to tackle the jams, with congestion charging, and work place parking taxes, while Gordon Brown increased fuel prices and stopped spending on new road schemes. It seemed bad news for drivers. EDMUND KING: When they first came to power there were some simplistic assumptions that all you need to do is improve public transport and then the roads will get clearer, there'll be less congestion. I think they've realised that that's really not the case; that some ninety-four per cent of passenger journeys are dependent on the car. WILENIUS: The big problem for the government is that in many areas, like here on the South Coast, the rail system appears rundown. This small station in Hastings looks shabby and dirty. But Labour urgently needs to make the rail system more attractive to motorists, with private sector investment in new trains and stations. Even before the Hatfield crash when passenger numbers were up, many local people were staying away from the aging trains. MICHAEL FOSTER MP: Well we're a historic town, and indeed certainly our trains are. And we've got rolling stock that's forty years old. I mean in fact people going on the trains are younger than, than the rolling stock. WILENIUS: John Prescott had hoped that a Transport Bill would be rushed through early in the Parliament, to excite passengers with his grand vision of a rail renaissance. But like these trains in East Sussex, it was beset with delays. Transport was not seen as a top priority, and combined with a cap on spending for two years this starved Prescott of cash and legislation. This means the new Strategic Rail Authority, which has the job of reviving the ailing network, will only get under way with its full powers this week. RICHARD BRANSON: Ninety per cent of all delays are down to the track, the track has not been renewed, most of it for twenty-five, thirty years, and it is, you know, largely worn out. Railtrack have got this enormous programme of trying to fix the track. SIR ALASTAIR MORTON: We have a Railtrack that has been found to be less than fully fit for purpose, we have a delivery industry the transport operators that carry the passengers and the freight, that have been found to be hard pressed between the lack of capacity and performance in the network and the demands of a growing market. We have a need for funding that the sources of which in the future are not yet fully clarified. So we've been given some rather hard lessons - we're like a puppy having our nose rubbed in something. WILENIUS: Question marks were raised about Railtrack's performance by rail crashes at Southall and Ladbroke Grove. But the chaos that followed the Hatfield crash has shaken passenger confidence. Now On The Record has found out that the Health and Safety Executive is investigating the use by Railtrack at Hatfield of specially hardened track. Ministers confirmed that Railtrack has stopped fitting this type of track while the inquiry goes on. DALE CAMPBELL-SAVOURS: Rail Track purchased this hardened, heat-treated rail, simply because they were going to save money in the long term. They believed it would last longer, but of course it required a higher element of maintenance, and it's there where they made the cuts, and that's why of course we've had this problem at Hatfield. From what I'm told from people in the industry, Rail Track have clearly fitted the wrong kind of track. What they should have fitted was bog standard rail which we produce in Workington, instead of this hardened heat-treated rail. WILENIUS: The lack of confidence in the rail system is making it even less likely that drivers like Chris Lee will get out of her car. And the government now seems to agree with her, and is heeding the motorists' cry. CHRIS LEE: You have to live with a car because the buses, the trains are, well the trains are pretty awful everywhere admittedly, but down here on the Hastings route they're particularly bad. WILENIUS: Before the election expected in May, Ministers are backing down to the motorists and truckers. There will further cuts in fuel duties and taxes on small cars, and congestion charges and car parking taxes will be slow in coming into force. KING: What's changed is that the emphasis, the realism, has actually changed with Lord MacDonald, and he said yes, we've got to improve public transport, but at the same time we can't ignore the road system - most of our trucks go on the road system; a majority of traffic, no matter what you do to the railways, will still be on the road system. WILENIUS: The train journey from Hastings to London is no faster than it was in the age of steam. Now environmentalists and senior Labour figures want Tony Blair to get his transport policy back on track. The rail crisis could even affect the party in some marginal seats, but above all they feel that radical action is vital to save his fading transport dream. The government is promising to pour lots more money into the transport problem. One-hundred-and-eighty billion pounds is pledged for the ten-year transport plan, with twenty-nine billion pounds of taxpayers money for rail. But some experts say they won't get value for money unless the Strategic Rail Authority stands up strongly for passengers. STEPHEN JOSEPH: The Strategic Rail Authority isn't being tough enough in terms of the standards it's actually demanding from the train operators themselves. We've been arguing that there should be firm minimum standards for running train services in this country, that standards in relation to information, to security at stations, to accessibility, to fares and ticketing structures to try and simplify those. SIR ALASTAIR MORTON: I very much think that the SRA is part of the industry. We're on the public sector side of the fence but this is an industry that will go forward as a public/private partnership within the industry. So the SRA should be seen as part of the industry, not as a sub-department of the government machine or in any sense political. WILENIUS: Getting worried passengers back into deserted carriages is the immediate problem. But in the longer term, Railtrack is still Labour's biggest headache. There's growing pressure from Labour MPs for the government to consider taking more control, or removing it from private ownership altogether. GWYNETH DUNWOODY MP: Railtrack must know it's on a probationary period, and how it performs in the next year or so will determine its future. But it may be that in the future the electorate will say we would like a non-profit making trust because we'd like to make sure that all the money goes into the system. WILENIUS: Yet this would be fiercely opposed by private business and the rail authorities. BRANSON: I think you know what the rail industry needs now is actually a period of stability, it needs a chance for us to get on and you know get our new trains in, to motivate our staff, it needs Railtrack to get on and get that track sorted out. MORTON: The idea of the government stake -well I in my time, because I've been round a while, I've been on the boards of nationalised industries, British Steel at one time for example, and I haven't noticed that the government stake served any useful purpose other than allowing the government to be blamed for absolutely everything. MICHAEL FOSTER: If the government are prepared to put in the money, which they are, then I think that may be that we need a seat at the table as well, perhaps by shareholding, perhaps by government directors, but certainly we need to have the public interest involved in Railtrack decisions. WILENIUS: There's anger over the government's new car friendly policies. And protesters against the Northern bypass around Hastings have the Deputy Prime Minister in their sights. They're upset most of the eleven miles of the new road would ruin this beautiful area. John Prescott has promised not build his way out of congestion, but now Labour plans to spend fifty-four billion pounds on road building in the next decade. So, can you tell me, what, what is this, what is this? UNNAMED WOMAN: This is part of the High Weald, which is an area of outstanding natural beauty, which is a national designation to show the value of the landscape here and it's going to be completely devastated by the new bypasses if they're built WILENIUS: Ministers may give the go ahead for one-hundred new road projects over the next ten years, provoking fierce argument. FOSTER: Both the by-pass, and indeed the A21 improvements are key to the town's future. I mean it's said that William only won the Battle of Hastings because Harold couldn't get down the A21 in time. But, so the roads are just awful, as indeed is the rail system. But that by-pass is key to our, our success. DUNWOODY: Roads aren't the answer. Roads never have been the answer. They are one part of a complicated system. Anybody who suggests that somehow or other by just letting everybody rely all the time on the combustion engine is producing a recipe for total chaos in the final analysis. WILENIUS: The anti-road protesters gather support in the town centre for a petition to stop the by-pass around Hastings. They want to force John Prescott to return to his grand vision, reducing congestion by cutting traffic levels rather than building new roads. But even as they deliver a symbolic piece of the threatened fields to the local museum, it's clear his ten-year transport plan will do the opposite. ACTUALITY. JOSEPH: I think a lot of people would say we don't want seventeen per cent more traffic on the roads, we want to be able to go outside our door without feeling we are about to be run down. And particularly we don't want our kids to be out there with so much extra traffic, but the government's decided that congestion is the key problem, traffic isn't an issue and I think that's the real retreat that we've seen. WILENIUS: Labour promised a new direction for transport. But in reality very little has changed. Traffic levels are rising and rail still seems to be stuck in the past. And there are fears money alone will not deliver improvements, either big enough or fast enough, to tempt people back on to the trains and out of their cars. HUMPHRYS: Paul Wilenius reporting there. JOHN HUMPHRYS: Lord MacDonald, John Prescott said that if he did not get fewer car journeys in this country within five years, then he would have failed. It's going in the opposite direction, so therefore you've failed. Right? LORD MACDONALD: No, I don't accept that John, because you can argue about the nuance of it but we were talking about reduction and the rate of change and the number of cars on the road were going up in past periods at eight per cent in the previous administration, four per cent in the early nineteen-nineties. Now, in the last couple of years it has been reduced to a two per cent growth and in the year 2000, last year, it was down to one per cent. So I reckon that's progress and what we've said is, we're not concerned about the number of cars owned per head because in European... HUMPHRYS: ...no, not in ownership, I accept that... LORD MACDONALD: ...because people can own more cars and use them less. HUMPHRYS: ...but that's the whole point... LORD MACDONALD: ...and that's what we're trying to do... HUMPHRYS: ...and that is the whole point and what he said and I don't think it is a matter of nuance, I've spoken to him about it several times myself, he was asked about it in the House by Tom Brake, who put the quote to him, the quote in which he said "reducing the overall number of journeys made by car" and Mr Prescott said, and I quote his answer from the House "I agree to commitment - judge my performance in five years". There's absolutely no question about what he meant, he said it so many times. LORD MACDONALD: Well Mr Prescott said in his Transport White Paper in July '98 we need to reduce the rate of road traffic... HUMPHRYS: ...he might have said that as well at some stage, but there is absolutely no question about what he... LORD MACDONALD: ...this is a White Paper we also want to see an absolute reduction in traffic in those places and streets where environmental damage is worse. Now, more importantly, let me come round to the Commission for Integrated Transport which reports to John Prescott... HUMPHRYS: ..Yes, whose boss is Willy Rickett and who says he never said it. LORD MACDONALD: No, their boss is actually Professor Begg. HUMPHRYS: Yeah, but the civil servant in charge of it is Willy Rickett. LORD MACDONALD: Well, the Commission for Integrated Transport says no country in the world has cut traffic in absolute terms while its economy is growing. And what they advised was that it wasn't about the overall rate of traffic, it was about congestion and pollution, the bad things that come from traffic, not about necessarily reducing the number of cars... HUMPHRYS: ...so John Prescott was being unrealistic when he made that promise. LORD MACDONALD: I think he was being realistic in saying that we want to reduce the rate of growth... HUMPHRYS: He didn't say that. "I will have failed if in five years there are not..." - listen "there are not many more people using public transport and far fewer journeys by car. It's a tall order, but I want you to hold me to it." He said that. LORD MACDONALD: Well let's just...it came up also in your report there previously. There are more people using public transport. If you look at the railways, it's up seventeen per cent... HUMPHRYS: ...well, I want to come back to railways in a minute... LORD MACDONALD: ...right, so that's gone up. The decline in buses....and it went down after that privatisation which ended up like in a wild west frontier on our roads as far as the buses were concerned in the eighties, we've stopped the decline in the number of bus journeys, we've got eighteen-hundred more services every day amongst rural buses alone. We've got, what is it, I think, fourteen-hundred new rail services every day, so we have increased the number of people travelling on public transport and the rate of growth of traffic is down from eight per cent in Tory times to one per cent last year... HUMPHRYS: ...well, I'm going to have to argue with that as well I'm afraid. Your ten year plan and this is after spending a massive of money, your ten year plan, predicts that traffic levels will rise by seventeen per cent by the year 2010. Now it has, over the last ten years, been rising at fifteen per cent, so on that basis too, you will have failed on your own figures. LORD MACDONALD: Not at all, what we were saying... HUMPHRYS: ...well they're your figures... LORD MACDONALD: ...no... HUMPHRYS: ...I didn't make them up! LORD MACDONALD: Our figures say that they will go up and that we reckon... HUMPHRYS: ...by seventeen per cent... LORD MACDONALD: ...it's up one per cent, seventeen per cent, but you... HUMPHRYS: ...over ten years... LORD MACDONALD: ...you don't relate the reduction in congestion. What I said earlier, it's congestion and pollution that count John... HUMPHRYS: ...so what are all these cars doing, when they... are they not adding to congestion? They're trundling around the roads and streets of our country... LORD MACDONALD: I hope they're flowing around more freely, because again, as you said in your report, we're going to spend more in reducing the bottlenecks in the roads and widening motorways and creating by-passes. But of the hundred-and-eighty billion in our ten-year plan, two-thirds of that goes in public transport and of the money going on the roads, thirty billion of it, half the money going on the roads is going to improve local roads. HUMPHRYS: I've heard some rewriting of promises but this takes the biscuit! I mean, Jonathan Porritt, the man that Tony Blair put in charge of the Sustainable Develop Commission, he says, "we are not moving forward on transport policy," and I quote again, "we're moving backwards". And he's absolutely right. You told us there would be a reduction in car use. We are going to see, not just an increase in car use of seventeen per cent, after all this money has been spent, but we are actually going to see a bigger increase in car use than we have been seeing. LORD MACDONALD: Well, Jonathan Porritt with respect to him is an outside advisor. I don't think he's up-to-speed in a lot of the aspects of our transport policy... HUMPHRYS: ...well he's been working in this area for a lot longer than you have... LORD MACDONALD: ...well he's been working with.... HUMPHRYS: ...I mean he's been doing it for about thirty years... LORD MACDONALD: ...but some of things that he's said about our transport policy simply don't chime with our understanding of them. Let me say, we've got one-hundred-and-eighty billion going into Transport and we've made a lot of progress. If you take buses for instance, we have eight-thousand new buses came on last year, we'll have forty-thousand new buses in the time of this government, that'll be about half the bus fleet has been renewed... HUMPHRYS: But it doesn't deal with this essential problem, that we are going to see more, rather than less, car use. And you may rubbish old Jonathan Porritt who was appointed as I said, by the Prime Minister himself, but he says, a hundred-and-eighty-billion pounds, which is what you're going to be spending and you'll be proudly spending all that money, one hell of a lot of money, for one very small policy outcome. LORD MACDONALD: And I think he's utterly wrong. And let me say that what we are talking about at the end of that ten years is a reduction in congestion across the country of five per cent... HUMPHRYS: ...you've moved the goal posts then... LORD MACDONALD: ...no, a bigger reduction in congestion in cities or towns where they want to introduce other measures to control traffic. We've made monies available on a scale they've never seen before for local transport plans and that includes eight-thousand plans for road safety, just in the local transport plans alone announced in December, it's about park-and-ride schemes across the country, it's about twenty-five new tram lines, metro lines in the big cities of England, so there's an enormous amount going in at local level, as well as the money going into rail, and as I say, roads make up only one-third of it, but it's very important that we try to get our roads flowing more freely. HUMPHRYS: May I make the point that one-third of a-hundred-and-eighty-billion pounds is a huge amount of money isn't it? By anybody's standards, even when it's only poor old taxpayers' money. LORD MACDONALD: Absolutely. HUMPHRYS: And what is actually going on here is this. You led us to believe, John Prescott led us to believe that you were going to be very tough on the motorist and as a result of being tough, some carrots as well as sticks admittedly, but as a result of both carrot and stick, we would see this reduction in car use. Absolutely no question about that. That is no longer the ambition. What he said, what John Prescott said was we cannot build our way out of this problem. Again, he said that to me, personally, on this programme, sitting in the exact seat that you're sitting in now, last July, we cannot build our way out of this problem. That is exactly what you are going to do and even having spent all of that money, even having spent all of that money, we are still going to see big increases in car use. Extraordinary business. LORD MACDONALD: Not at all. The Deputy Prime Minister says, and I quote him, that we should focus on the targets and policies, and the outcomes we want to achieve, the reduction in congestion and pollution rather than a national plan ... HUMPHRYS: And have you forgotten the bit where he said the reduction in car journeys and car use? LORD MACDONALD: Well what he said is that we will reduce those where that's most necessary inside towns and ....... HUMPHRYS: But congestion... LORD MACDONALD: Well it is congestion. HUMPHRYS: Even congestion will rise by ten per cent. LORD MACDONALD: John, you said that a hundred-and-eighty billion was a huge sum of money. It's far more than anybody expected at the start of this year, and that's because the Chancellor, prudent though he may be, has put the country in a position where we've got far more in terms of investment in every mode of travel than would have been dreamed a year ago. HUMPHRYS: In spite of that we're seeing more car use and more congestion - seventeen per cent more car use, ten per cent more congestion. What is going on here? LORD MACDONALD: I'll tell you what is going on. If you put a million extra people in jobs as we have done then they have to travel to their work. What you're getting is through the general prosperity that we're generating you're getting an increase in the number of people travelling on public transport, there's say seventeen per cent up on trains, an increase of seven per cent a year in the number of people travelling by air inside the United Kingdom, a decline ended in bus travel. We're now seeing bus travel going up ten-twenty per cent in the hundred and thirty cities and towns across England where they now have these quality partnerships that we've put in place, so what you're seeing is money and better strategy and better management I believe going into ... HUMPHRYS: Well, what we're seeing, of course what we're seeing is a new policy, because you've abandoned the old strategy, the old ambitions, and we're seeing a new policy, and the reason is, I'm sure you're right. The reason is that lots of people love it because it means they can build roads, it means that industry is going to be very happy about it, because of course industry likes seeing roads built. A lot of people don't like seeing roads built. LORD MACDONALD: No, you'll get better roads, but you'll have them based on a much more environmentally sensitive system, and we've now got five criteria in place to make sure that the environmental damage is very constrained and only allowed where it's necessary, and we've also got consultation systems in where English Heritage, English Nature, the Countryside Agency, the Environment Agency all have to be consulted under our new criteria for the environment. HUMPHRYS: You've turned down one scheme out of seventy-four. LORD MACDONALD: They don't bring them forward now if they're going to be damaging. HUMPHRYS: Well, let's have a look at the railways. You told us, you promised us that we would have better public transport. You told me about buses at some length, so let's take buses out of the equation for a moment and look at the railways, and the fact is and I don't believe there is a single person watching this programme who would argue with the statement that I am about to make possibly except Richard Branson, and I doubt even he, the railways are in a considerably worse mess than they were four years ago. Would you argue with that? LORD MACDONALD: I put it in context. They are in a crisis at the moment, and it's a crisis that we're trying to manage, and I ... HUMPHRYS: You acknowledge that there is a crisis. LORD MACDONALD: Oh, absolutely. There's been a crisis since Hatfield and I meet twice a week with - chairing a group, an action group for the whole industry to get them back on track, and we're hoping that this weekend the promises that have been made about their return to eighty-five per cent of normal services running will be fulfilled by the train operating companies. And also I'm delighted to say that the passengers have come back. For instance in the last month in the London area, the London commuters it's actually up five per cent, five per cent higher in the last month than it was in the same period last year, which is quite extraordinary given the problems that we've had. So, yes we hope that we will get the passengers back there, but we accept that there is a big job to be done, but where we have improved things there's all the activity that we've had in safety for instance. The number of derailments and collisions is the lowest it's ever been on records, the number of signals passed at danger, we've brought them down over the last year. We've been very tough I think on safety. What we're dealing with is a crisis of under-investment here. We really had decades of neglect on the rail, so where there's been that neglect we have again to invest. Where there's been I think... stagnation we've got to expand and most importantly where's there's been fragmentation after the industry was literally broken into a hundred pieces by privatisation we've got to bring coherence and leadership.. That's what the SRA the Strategic Rail Authority is in place to do it. HUMPHRYS: But what you said the last time you where in this studio was that it would be back to normal services, would be back to normal by the end of January, the beginning of February. Well we are there and they're not. LORD MACDONALD: Well, we're back to, as I say, I am anticipating that they'll tell us that they're at least eighty-five per cent back to normal by this weekend.and we're also looking at a return of passengers. The number of passengers are much higher than people had anticipated would return after the kind or crisis that we've had. HUMPHRYS: It doesn't feel as if we are back to normal does it. I mean if you're a passenger, I know a lot of it is anecdotal of course, but you can't speak to anybody, well I don't seem to be able to speak to anybody who doesn't say that it is absolutely hell out there. You know, the journey that would have taken two hours takes three- three-and-a-half hours, and so and so on and so on and so on. MACDONALD: Well, you have to remember that one of the problems we're dealing with, and that's why we're investing so much money is that before Hatfield, only about eighty-five per cent of the trains ran on time. I had three train journeys last week, all three of them were pretty much on time to ... HUMPHRYS: ...perhaps they knew you were on the train, ha, ha, did you tell them ahead of time? MACDONALD: ...I didn't, no, it was Southampton, Leeds and the Heathrow Express, so, I think anecdotally I also hear it's getting, it's getting back to normal, but you've got to be careful with that, because of the fifteen per cent of people who aren't at normal have every right still to be angry, so we're going to press on and try and make sure that the promise that it'll all be sorted by Easter, is kept. HUMPHRYS: Gwyneth Dunwoody says Railtrack is on probation. Do you accept that? MACDONALD: Well I think that what we need is more money coming from government and the private sector and Railtrack, but also better management and we've ... HUMPHRYS: ...more still? More money than is included in the ten-year plan. MACDONALD: No, the ten-year plan I think has money there, unallocated monies as well, I think sixty-billion is what we're predicating in the ten-year plan that we're going to, to rail but about twenty-nine billion of that will come from the public sector, so we want to see the private sector investing alongside us. The train operating companies like Richard Branson's, as well Railtrack, and indeed City investors. So it's a big programme of investment that's in prospect. Railtrack have to prove that they can manage that. I think they would accept it that management hasn't been what it might have been and it should get better. HUMPHRYS: And if they can't prove that they're capable of managing it, or as good as is needed, are you open as to whether the government takes a bigger hand in it, whatever system you use, whether it's some kind of trust, whether it's some kind of golden share, whatever it is, are you open to that possibility? Gwyneth Dunwoody again clearly thinks you should be. MACDONALD: We're not looking at that possibility. HUMPHRYS: Even if they make a pig's ear of it. Even if Railtrack continue to make a pig's ear of it? MACDONALD: I believe in concentrating on the problem in hand, and that's about building confidence in this industry, and co-operation, and better co-ordination, because it was fragmented by privatisation, broken into literally a-hundred pieces. Now what we need is better management from Railtrack. I'll try to encourage them in every way that I can and encourage the relationships with other parts of the, of the industry. HUMPHRYS: But you don't I mean, you're not waving a stick at them here are you? I mean, there is no particular incentive for them, I mean, if they, if they do... MACDONALD: ...John, there is indeed... HUMPHRYS: ...you, you can't say, 'cos, you know, if you're ruling out something that a lot of your MPs think you ought to rule in, and that is the possibility of getting more actively involved, if you're ruling that out, they can say, ah well, the government can huff and puff, but at the end of it all they're not going to do anything are, they, we'll just carry on. MACDONALD: We'll do more than, than, than huff and puff. HUMPHRYS: Well, what? BOTH SPEAKING TOGETHER MACDONALD: Well, it's our money going in there, and it's er... HUMPHRYS: ...some of it's taxpayers money... MACDONALD: Well, it's taxpayers money, absolutely. And that's why we've got to be extremely careful we get value for money. But what you have here is a five-billion pound company with shareholders who if they have a management that aren't delivering for them, and don't forget that Railtrack are down to lose six-hundred-million pounds, their shareholders lose that money because of what happened at Hatfield, then those shareholders will get rid of that management if it's not performing, and that's the Board's job, they're there to represent the shareholders, and indeed the stakeholders, like government and passengers, and if the Board isn't performing, then that too will be shaken up, I'm sure, by the shareholders. HUMPHRYS: But John Prescott said back in ninety-nine that they were on probation then, well if they were on probation then, they're still on probation now, nothing has improved, as we've acknowledged, things have got worse. MACDONALD: Now I believe things have been improving in recent weeks... BOTH SPEAKING TOGETHER HUMPHRYS: ...you said there's a crisis... MACDONALD: ...there's a crisis and we've been managing that crisis and managing it I hope, pretty effectively. I believe that the targets we set of eighty-five per cent return to normality by the end of January will be, be met, the, the train operating companies should be confirming that this weekend. HUMPHRYS: But here you are, acknowledging the possibility, as of course you must, looking at it's record, that things may not get better under Railtrack. I mean, that has to be a possibility, they may not be up to the job, it's as simple as that, but ruling out even the possibility, in spite of the fact that it's urged upon you by many of your back-benchers, by people like Gwyneth Dunwoody, considering the possibility that you should actually take a bigger part in er Railtrack. MACDONALD: Those MPs have just put through a Transport Act which er, gives you a much tougher regulation from the office of the rail regulator, it gives you a strategic rail authority and also, I believe, it gives a sense of direction and leadership to the industry that wasn't there before. Now those MPs put that through. With that Transport Act in place it's important now that we make sure the money goes into the railroad, we want to see a fifty per cent increase in the number of passengers travelling the rail in our ten-year plan, and we want to see an eighty per cent increase in freight. Now we've already had about five-hundred new, new vehicles running in the rolling stock, but there are two-thousand ordered. We want to see those brought on to the railways as quickly as possible. There are two-and-a-half thousand stations, and most of them have been refurbished, I've seen some spectacular changes, but also the difficulties of investment in Leeds, for instance, a-hundred-and-sixty-five million pound development that has overrun. But we are investing in change and we will get a better railway because for forty years it's been in decline and at last the money is going in. HUMPHRYS: Let me in the last couple of minutes turn to this other subject that's preoccupying every... well all the newspapers at least this morning and that is the war between Tony Blair and Peter Mandelson, as it's now being described. It was quite extraordinary wasn't it that the Prime Minister's Press Secretary, Alastair Campbell, should have made the sort of attack on a former minister that he made in briefings yesterday. Did you not find that a bit strange? LORD MACDONALD: No I think that Peter laid out his position on Wednesday and that's a position that the Prime Minister confirmed. Sir Anthony Hammond is going in to carry out an enquiry. That enquiry should be in weeks rather than in months and obviously... HUMPHRYS: No question about the result before the election, absolutely no question about that? LORD MACDONALD: Well it's my understanding and I think it's been stated you know by the press briefings and so on is that it will be in weeks rather than months and therefore I wait to hear what Sir Anthony comes through with... HUMPHRYS: But in the meantime we have Alastair Campbell going to war on Peter Mandelson, saying the most extraordinary things for a man who was Secretary of State for Northern Ireland only a few days ago - unfocused and detached, problem with his state of mind in recent weeks. Do you not find that a little odd. LORD MACDONALD: No, I think that Alastair played I think a very full tribute to Peter and his work in Northern Ireland. But I think that what Alastair is saying was what the people in the country will agree with is that there are much more important issues here. HUMPHRYS: He said rather more than that, do you not think, I mean would it help to clear this matter up if the recording that was made of those briefings were to be released so that we would know precisely what was said because we are having the usual old thing now aren't we, saying stuff was taken out of context, inspite of the fact that the journalists involved say they have shorthand notes and all the rest of it. Should they perhaps..should we not have access to those recordings so that we can clear it all up. What's your view on that? LORD MACDONALD: I think Sir Anthony Hammond will have access to them and he will report to us in good time. I think that what we are looking at here... HUMPHRYS: ..sorry, I'm talking about Alastair Campbell's briefings now, not other things. LORD MACDONALD: I think what Alastair Campbell is saying is get back to the real issues - which is jobs, it's education, it's about health.. HUMPHRYS: ..so why did he launch that attack on Peter Mandelson in that case? LORD MACDONALD: He was simply trying to say to the press, get back to what's important because this is as the Prime Minister phrased it a "feeding frenzy" by the press... HUMPHRYS: But he was feeding it himself, that's exactly what he was not doing, saying let's get back to normal. LORD MACDONALD: This is a froth of politics, not the real issues that I think people in the country care about. So we want to continue governing and worrying about transport. There are others worrying about health, about education and this is, as I say, a mindless story in the context of the big issues that affect us. HUMPHRYS: Well Lord MacDonald, thank you very much indeed. LORD MACDONALD: Thank you John. HUMPHRYS: There's been a sort of Dutch auction going on between Labour and the Conservatives over how much tax we should pay, except that they've been bidding each other down instead of up. Only yesterday Gordon Brown told us we needed tax cuts in the Budget in March. But he also said we must spend more on our public services. That's pretty well what the Tories say as well. Very difficult to see how those two things can be squared but as Iain Watson reports, it seems both parties are getting increasingly boxed in by their tax-cutting promises. IAIN WATSON: Just as a swallow signals the arrival of summer, the political poster tells you there's an election on its way. But for those who thought it might all be different this time, disappointment awaits. At the next election, like 1997, tax and how much it should be cut, will be a key issue. The Tories feel that tax cuts is the strongest card, even though they've had to convince a more sceptical electorate that these won't be at the expense of key public services. Labour still feel vulnerable on tax. Many of their planned improvements have yet to be delivered, so people are asking where their money is going. Indeed, in the wake of the fuel protests, Labour may feel less confident now than they did in 1997 on the tax issue. And with tax rates set to play such a central part in the next General Election campaign, future governments may find it more difficult than ever to convince people to stump up more tax when it's needed LORD PLANT: I think given that there is this public resistance which we acknowledge, it's then very important that we try to chip away at that, to show the inexorable link that there is between taxation and higher levels of public service. GILES RADICE: Obviously a Labour government has to be very mindful of being criticised for sort of ...being automatically increasing taxes because that's the traditional right wing attack on a left of centre government WATSON: The Nicholls family live in South East London. Father Phil is about to take their daughter, Lily, to school; his wife Kim is a childminder. They voted Labour in 1997, believing that public services would get better. Some Labour backbenchers argue that families like these would pay higher taxes to fund the improvements they want to see MARTIN SALTER: Certainly my experience as a deputy leader of Reading Borough Council for many years and as a member of parliament, is that people will tolerate levels of taxation and in some cases quite high levels of taxation, if they feel that it's being spent sensibly, being spent wisely, and being spent on services that matter to them. WATSON: The school run is almost complete. But Labour still has some way to go to deliver the improvements to public services promised in last summer's comprehensive spending review. Phil Nicholls is happy with the education his daughter Lily receives at the local primary school, but wants even more to be spent on the next generation. He's wary about paying tax up front with so few benefits yet to be seen on the ground PHIL NICHOLLS: You know pour the money in for the standards to get better. You know that's great. But when you just think oh we're pouring the money in, millions and millions and nothing is really improving, they haven't got a real strategy about it, I think that's quite dangerous. DAVID RUFFLEY: It is better for ordinary families to keep more of the money that they earn to spend or to save, as they choose, not as the state chooses and I think that is a lesson that any Chancellor would be very stupid to ignore, particularly on the income tax side of things. That is the most visible example of the state taking your money. WATSON: Labour can't afford to give the impression that their natural instinct is to put taxes up, for fear of handing over the initiative in the General Election to the Tories. So just as in 1997 symbolic commitments not to increase direct tax rates seem set to stay - even for the better off RADICE; The Labour government has committed itself to 40% high rate over the life time of the last parliament and I think they're probably likely to do the same for the next parliament and there is an argument for continuity in taxation. I mean what it said, if you like to the middle classes of England that we are not going to be a punitively tax raising party. That we're going to escape from the idea of a Labour government that we're a tax and spend government. WATSON: So boldness on taxation won't be on the Labour menu for the next election. But far from looking for continuity in tax, they are going for cuts. At a conference in London yesterday, the Chancellor signalled more clearly than ever before that there will be targeted tax cuts to help working families in his March budget. And prominent Labour backbenchers are saying done in the right way, this will help sustain the support of Labour's core vote, as well as providing symbolic comfort to middle England, too RADICE: I think that the government is right to say there is room for targeted tax cuts. There is no doubt that the low paid, the less well off groups in society, there are things you can do, in the tax system, and the 10p rate could possibly be extended so there are things that can be done WATSON: It's a day of reckoning for the Nicholls. They like to know exactly how much they've got to spend. Similar calculations are going on in Downing Street - numbers 10 and 11 - to see how taxes can be cut without giving the impression they're trying to buy votes. Modest tax cuts for the least well off is thought to be the Chancellor's favoured option, while the Prime Minister is said to want to see a wider range of people feeling the benefit of tax reductions. ANDREW DILNOT: I don't think we necessarily need to assume that a targeted tax cut is a tax cut that will only affect a small group of people and that only that one small group might gain. A targeted tax cut just means something that's targeted at a group that you want to help, we've had targeted tax cuts aimed at motorists, at small businesses, at families with children, at the low paid, all of those are possibilities this time round. MATTHEW TAYLOR: Labour are backing away from this idea of general tax cuts and instead talking about targeted tax cuts. Well what's a target, it appears to be families, it appears to be children, it appears to be pensioners. It's just another way of describing an attempt to address the Conservative agenda of the tax burden WATSON: Kim Nicholls and her young companions, Isobel and Joseph, are making one of their regular trips to the local clinic. The Liberal Democrats say that, unlike the other main parties, they'll support the Health Service by raising the top rate of tax and give more to schools by putting a penny on the basic rate - if needed. They say openness with the electorate works and Labour's caution on tax and spending since 1997 will cost them support this time round. TAYLOR: I think Labour are in real difficulties, they're not delivering on public services and because they won't talk about income tax for historic reasons, they've been forced to use indirect taxes, which have actually hit the poorest hardest. And this has disillusioned traditional Labour voters enormously who are either sitting at home or turning to the Liberal Democrats WATSON: Recent polls suggest that Labour's core vote aren't exactly enthusiastic about turning out at the next election, but support IS holding up in the key marginals which Labour won in 1997. The party aren't too keen to give the Tories the tax issue in those seats. So Labour, for reasons of political expediency, are boxed in on income tax .But their favoured path after the 1997 General Election - allowing less visible taxes to take the strain - has proved a rather rockier road recently. Voters are now looking well beyond what Labour says and does on income tax alone. Last year's petrol protests exacted concessions on fuel duty that the Chancellor would rather not have made and he'll be keen not to make any similar commitments in the manifesto. But his strategy of tapping more and more sources of revenue, other than just income tax, is under pressure. People have become more aware than ever of the taxes they're shelling out. KIM HOWELLS: Your petrol is high and I begrudge, one thing I begrudge is filling up the tank. I use the car Monday to Friday, just doing the school run going to a few local toddler groups and possibly between twenty and twenty five pounds a week. And that's not really going anywhere as such. DAVID RUFFLEY MP: These things are now very very visible and there could well be and I think it's already started, a problem with the Chancellor's reputation. But those are problems that are added to when you look at how little room he's got now, for increasing tax almost anywhere. The stealth taxes, the gaffe has been blown for Gordon, he can't really do that again. JOHN WHITING: I think the fuel duty protests and all the analysis that was done about that time, which showed how much of a gallon, litre of petrol went to the government in the form of taxation, has really got home to a lot of people. It's also made them think well, what about that bottle of whisky, what about the food that I buy, everything else, how much am I paying in taxation. WATSON: No-one likes paying tax, but raising money from so-called 'sinful' products is often seen as fair game. So taxing cigarettes and booze attracts less resistance than taxing petrol. Cars are seen as essential, not luxury items, these days. But with both alcohol and cigarette duty higher here than on the continent, smuggling is rife. So the limit may have been reached in taxing our more pleasurable pursuits. MARTIN SALTER MP: There is a ceiling that is.. that will be reached, probably is reached already, in respect of that particular aspect of indirect taxation, because obviously if it starts to fuel the black economy, then the Treasury ends up cutting its nose to spite its face. WATSON: So Labour may have to find another way out of the tax dilemma and become less dependent on traditional sources of revenue. With relatively low rates of corporation tax, business may seem like an easy hit - especially as companies don't get a vote at election time. But politically, that could signal the end of the line for the New Labour brand, and practically, could encourage multinationals to move their investments elsewhere WHITING: Living in a global economy means that you have to have regard to the fact that your tax base - in other words, the people, the businesses that you are trying to tax - might suddenly start to disappear. WATSON: Labour are tackling the tax issue for maximum electoral advantage. But there are fears that they are perhaps playing to the gallery of public opinion rather than trying to change attitudes towards taxation. Certainly with a big budget surplus, there's no immediate need to raise taxes in order to pay for better public services. Indeed the Chancellor would claim he's banished boom and bust for ever. but there are those within Labour's own ranks who say the next election should be used to dispel the notion you can get something for nothing. Otherwise they could get into trouble in a downturn and bequeath future governments a very unwelcome legacy. PLANT: There does come a point when for the future, we've got to say, look, we want high quality health care for all our citizens. We've got to invest in high quality education if were going to be competitive in the world. There is the money to do that now, but in different economic circumstances, never the less we should have some kind of under pinning through the tax system, to ensure that we're going to maintain that sort of quality of provision into the future. DILNOT: At the moment we're going to be getting better public services, higher public spending, by increasing the amount of borrowing, the reason we can do that is at the moment we've got such a large surplus so we can afford to increase public spending more quickly than taxes, but you can't do that forever. WATSON: Reassuring voters such as Phil Nicholls, who backed Labour in 1997, is a high priority for the government - especially after the events of the past week. Labour strategists have no doubt had some sleepless nights and the idea that the government might risk making the moral case for taxation at this election, has been consigned to the realms of fantasy. In doing so, the option for future governments to argue that better public services really do come at a price could now be closed off. HUMPHYRS: Iain Watson reporting there. And that's it for this week. Don't forget our Web site. Until the same time next week, Good Afternoon. 26 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.