BBC On The Record - Broadcast: 03.02.02

Interview: JOHN PRESCOTT MP Interview

The Government plans to give private companies a bigger role in running public services. Will this be Labour's poll tax?

JOHN HUMPHRYS: Mr Blair is about to get onto his feet in Cardiff and address a Party Conference, as we've already been told he will attack the wreckers, the people he says want to stop him reforming and improving our public services. The official line is that they are the Tories but the trade unions see it differently, they and many other traditional Labour supporters, believe they are fighting a battle to save the public services from being run by the private sector and that they are seen as the wreckers. Some of them see it as a battle to the very soul of the old Labour Party - one union leader even called the plans Labour's poll tax. Well John Prescott has been widely seen as the conscience of old Labour, indeed, many believe he was promoted by Tony Blair precisely because he could act as a buffer to shield him from the wrath of the traditionalists. I've been talking to Mr Prescott this morning and I asked him if he could understand the trade unions worries. JOHN PRESCOTT MP: Well, whether I'm the conscience or not I'll leave others to judge it. I have some very strong views and I've expressed them that I believe in traditional values but I also put them in the modern setting and the one that's causing concern at the moment is to whether you can use private finance in the provision of public facilities, the public private partnership. You know, back in 1992, myself and Gordon Brown and Robin Cook, put together this proposal before the Tories ever came to their privatisation programme because we could see the massive disinvestment that had gone in our public services and we wouldn't be able to raise enough money if it came from public exchequer. So we need to put the combination together, a massive disinvestment programme and you know we did put that to the conference, is our manifesto policy. The unions campaigned on the same policy that I've campaigned on and now when I hear people like John Edmonds saying well, I don't agree with it and apparently it's not supported by the party, cause the decibels of support in the claps in Cardiff were not very high. Well, it's a new interpretation of democracy. We have a policy, we have a manifesto and we have, even during these difficult economic times, in the first five years put twenty billion more into public services, nine of that has come from private financing. HUMPHRYS: But what Mr Edmonds says and he said it again just a couple of hours ago, is that if you want to raise more money, then the right way to do it, if you are concerned about the public services, is to tax the richest a little bit more and that way you will raise more money and you can put it into public services and that's what people want, especially people within the party. PRESCOTT: Well I think you've referred to the IFS report before and it makes that very point. You can raise the monies if you like by taxation, you can do it by extra borrowing if you want and you have to get a balance and that's what this Chancellor does but when John Edmonds comes along, telling us, well I believe in the old public borrowing, he's the same man who comes along and says I want low interest rate because it effects the manufacturing industry... HUMPHRYS: ...he's not alone though of course, is he John... PRESCOTT: ...I'm not just saying...John's articulated these arguments in a way and I have to say he's the one who comes along for the interest rates. We have the lowest interest rates, the lowest inflation and more people back at work. And by the way, on the public sector area, something like a hundred and eighty thousand more people back into the public service industries now, with the kind of investment of a scale that we haven't had before. So, you know, I think there's every reason for him to recognise that that's a considerable advance on public services, benefiting his members, benefiting basically the public in this country and if John's in disagreement, as he clearly is, I did appeal to him, look at some of these facts, look at what we've done and put it in one of your ads, that you put in the paper attacking us. HUMPHRYS: Well, he's looked at it and he has concluded that this is a very dangerous road to go down. He says that for the Labour Party it could be the equivalent of the Tories' Poll Tax, that's what he means about it. PRESCOTT: That's the kind of rhetoric. I mean John has put these arguments at conference and has been defeated at conference. So I mean in a democratic party and we are a party who has implemented our manifesto. Another point John used to get on about, we want governments who implement the manifesto, well this new form of financing was in our manifesto, he has more members in work in these areas, more services are being provided for people. We've still a lot to do but we have made that start and it's in line with get the economy right and then improve radically, the quality of our public services. HUMPHRYS: But as I say, John Monks....John Edmonds is not alone, John Monks of the TUC, very moderate figure in terms of the Labour Party has said this and I'm sure you know the quote: There is a new ideological preference for the public sector, people believe that if something is done for profit, people in your party believe that if something is done for profit, it makes it more efficient. Therefore, you are more interested in getting more private sector involvement than you were in the past for ideological reasons, is that right? PRESCOTT: Well it's true that if you use private sector money and you borrow from them, you'll want a profit. If the government borrows on bonds from the market and the city, it would still want....the city will still want money for lending it for its bonds for its public financing. HUMPHRYS: Yeah, but if the private sector gets involved they want to make a profit because they're concerned about their shareholders. PRESCOTT: It's a fair point, it's a fair point. But the argument there about profit, it's about risk. If you look at some of the public sector investments, they cost a great deal more and people just sign their cheques away for it. We've tried to say by bringing in public and private partnerships, we will get a better level of efficiency in it. Now I know John Edmonds apparently is rejecting that thinking, but we know for a fact in some of the energy industries he's in, there was a tremendous reduction in the costs, after the privatisation, I don't want to get into the argument about privatisation, but even the National Audit Committee has made clear, that something like eighty per cent of the projects they .... are really welcomed by the people who brought them in as better value. The argument is ongoing and if you bring in the private sector, there's a different set of rules to the public sector and I think I've said on your programme before John, if you go to the Treasury and ask for the money and let's take railways, Peter Parker told us in 1980, if you don't get the money into the railway system, the core is already beginning to crumble and we didn't. Now, you need long term investment. He could see that wouldn't come from Treasury, both Labour and Tories, who have a time arisen of usually one year, Gordon's now taken it to three. But all these massive investment problems require continuity of investment for twenty or thirty years. So if you go to the Treasury, they can't give you that because you don't know whether you are going to be in power, if you go to the private sector and put a public private partnership together, you can guarantee that money because it's a contract requirement on both sides and we believe a greater level of efficiency and shifting the risk onto the private sector, who lose some of his so-called profits if they don't perform as promised. HUMPHRYS: And you believe that if there is a profit motive, you do get greater efficiencies, you're persuaded of that? PRESCOTT: Well, I can look at some of the examples, of the public sector and I can look at some of private, it's not total in every area, mistakes are made... HUMPHRYS: but the broad principle is that if it's private and they're operating for a profit, they're going to be more efficient than the public sector... PRESCOTT: ...I think they're more concerned about saving money if it's the profits affected, whereas if it's the Treasury you just pay the bill, whether it's Air Traffic Control or whether it's the railways, or whether the Jubilee Line at two to three billion pounds more... HUMPHRYS: ...well on that basis wouldn't you just privatise the lot then? PRESCOTT: Pardon? HUMPHRYS: Well on that basis why not just privatise everything? PRESCOTT: But I'm not proposing privatisation. HUMPHRYS: Why not if it's more efficient? PRESCOTT: Well, I don't because public private partnership is where the combination comes together. You get the best of the public and the actual best of the private, putting the two together and there's a great deal of evidence to show this is so and the Audit Commission's come out with its opinion on it. But John, what I was trying to say at Cardiff this week and people like John Evans you know... HUMPHRYS: John Edmonds. PRESCOTT: ...John Edmonds seemed to ignore it is that who pays the price then, if you've a massive disinvestment and by public financing you can complete and replace that investment, let's say in ten, fifteen years. If you bring in private money at the scale that we do, in addition to additional public financing as we've done, you can reduce that period of waiting and that's the real price, who pays it? The kid in the school with the leaking roof and the outside toilet? The patient waiting for an operation? The passengers because there's a delayed........investment in the infrastructure? The pensioner who wants a care home? These are all that we can quicken the process of replacement if we bring public and private together. HUMPHRYS: But even Peter Mandelson says that you're giving the impression that private involvement is the ... PRESCOTT: this my knock-out punch? HUMPHRYS: may deliver one now, if we're still...though not to me, but a metaphorical one. Peter Mandelson says you're giving the impression that private sector is the only solution. PRESCOTT: Well he's talking about impressions. I'm certainly not, am I. And I'm certainly not advocating privatisation. HUMPHRYS: ...he says that's how it looks and it certainly looks like that to the trade unions. PRESCOTT: ...well, I've got to give you the example that what we've done, if you look at the last five years of the Tory government, something like twenty-four billion pounds went into new capital investments right, under us, it's forty billion pounds... HUMPHRYS: ...will be. PRESCOTT: ...well I mean, will be, in two-o-three.. HUMPHRYS: ...hasn't been. PRESCOTT: ...well, let's just take... HUMPHRYS: ...hasn't been. PRESCOTT; I'm sorry... HUMPHRYS: fact for the first couple of years there was PRESCOTT: no... HUMPHRYS: ...less than in any period... PRESCOTT: no. Well let me tackle you on that one then, because you easily throw it in ... HUMPHRYS: ...well it's the IFS, you quoted the IFS a moment ago. PRESCOTT: Well I was just going to give you the IFS and because we did it in another programme, I looked up the IFS right, and it makes it very clear. It says, given in the first period of a Labour Government, four years, those two years we accepted the Tory expenditure plans which showed public expenditure going down. But we did that largely to get stable economy, to get the reduction in interest, to get people back to work, and we achieved it. But we knew and I knew, as the Transport Spokesman that I wasn't taking a priority in money and transport because we wanted stability of economy and more into health and education. Now the IFS says yes, you did that. So if I take the first period, that's the four years, looking at the proportions is not greater than before right. But he also says in the monies and commitments going on to two-o-three, two-o-four, and the substantial and continuity of investment in health and education, yes, it's doing a lot better. They go further, they say, if you want more money to get real improvements, you've either got to look at taxation or you've got to look at more borrowing or a number of measures they've proposed... HUMPHRYS: ...and the... PRESCOTT: ...and we admit that happened... HUMPHRYS: ...and the unions if... PRESCOTT: ...we've got a stable economy now John. We've never had that for decades and what always used to happen before, when they get a stop/go in the economy, they always cut the public services. HUMPHRYS: Right, that's one thing, that's one thing, running those services, getting investment is one thing and you talk about PFI, we haven't got time to argue that now, but running the services is another thing and Tony Blair says he wants reform and he says there is no ideological bar. That's the expression that he used, so it doesn't matter, take the Health Service, it doesn't matter who provides the Health Service so long as it is free at the point of delivery. That's your view is it? PRESCOTT: Well I think the most essential point is free at the point of use and that's a very distinctive difference between us and the Tories who clearly going through all this process and it's not working. HUMPHRYS: ...and that is all that matters? PRESCOTT: But that is about.... no no, that's a very important point. Secondly, to get more efficient and to get the service to .... much quicker, that's the reforms that we're trying to bring in are equally as good. Let me give you an example. My agent in Hull actually, I say, needed an eye operation right. He didn't go to Hull Hospital, but they offered he could go to Harrogate right, and that was a contracted service done with the Hull Hospital. He was taken by car there, the eye operation was done immediately and then he was serviced by the Health Service. From his point of view... HUMPHRYS: ...or it was a private hospital that he went to in Harrogate? PRESCOTT: Well it was a kind where people had got together, they're only doing eye operations... HUMPHRYS: ...alright, but private, yes, okay. PRESCOTT: ...and they have a contract agreement to provide that and all those facilities were specialised in and he got that service quicker than he would have been getting from his Health Service. He got a very perfect service as he says himself and therefore to that extent it was a combination of public and private, meeting the needs also of free at the point of use and he got the service quicker. Now, he thinks that's pretty good, I think that sounds good and I wouldn't want to get ideological whether in fact you can get a combination of public and private working together for the advantage of the ... HUMPHRYS: ...but looking at it politically, is it wise from your perspective to alienate the trade unions, as you're doing, as you're certainly in danger of doing, I mean the GMB for instance withholding a couple of million pounds. It's not going to give you... PRESCOTT: ...well, well... HUMPHRYS:'s going to spend on adverts to fight a war against it, I mean, is that wise? PRESCOTT: Yeah, yeah, yeah, yeah. But listen, listen, listen, I come from the trade union movement like they do. HUMPHRYS: Exactly. PRESCOTT: We like the aggressive style of arguing, at the end of the day they can make judgement how they spend their money. They don't want to get their situation... HUMPHRYS: ...I mean, to call them "wreckers?" PRESCOTT: No, they didn't call the trade union "wreckers." That's just complete nonsense and both the Prime Minister and Stephen Byers has got in a section, you can read it and if you've read ... HUMPHRYS: ...well I have indeed... PRESCOTT: ...well you'll see that he's talking about the Tories, both in Tony's speech and in the... HUMPHRYS: But Stephen Byers said "We won't let vested interest stand in the way of reform" well I mean it was perfectly clear who he meant by "vested interest" wasn't it? PRESCOTT: No, but he makes it clear, in the Tories he's talking about the Tories....the whole section's about the Tories who want to wreck the Health Service.... HUMPHRYS: ...sure, of course... PRESCOTT: and then privatise it... HUMPHRYS: ...that is what you expect, but it's also the trade unions involved in this... PRESCOTT: ...yeah, but, if you come to the trade unions, they want to put their point of view, but at the end of the day, of course they do, they've a vested interest in it and they've made some changes, to my mind, they're the better from the mistakes we made on how you handle Labour situations... HUMPHRYS: ...sure. But on this you're prepared to fight them? PRESCOTT: ...but, no. They are challenging and say, you're not going to carry out your manifesto policy. Well, you know, how many times have Labour politicians been accused on programmes on like this, decades ago, where they said, you're not carrying your manifesto. John Edmonds, I've been on platforms where he used that. I'm carrying out the manifesto of the party. We are doing the investment and meeting the needs of the people in a quicker way than ever. We've got more people back at work, we've got more resources going into public services, now they wish to argue that case, we will argue as well. I can't accept though if he says he's going to use money to back other candidates. Whether there's going to be a GMB party of MPs I don't know, I thought we'd got away from that sponsorship concept. At the end of the day, this government will get on with delivering on its manifesto and delivering for the people in this country. HUMPHRYS: But they are worried about all sorts of things and the other kind of thing that they're worried about is your party's very, very close, increasingly close as they see it, relationship with industry, with business and we've now got this fuss over Enron. People do get worried about your relationship with big business. They look at it and they say, this isn't the party that I thought I was supporting. I mean don't you have a trade union man yourself, as you say.... PRESCOTT: ...have you ever been to meetings of trade unions and business and see how they get on together..... HUMPHRYS: ...but you don't have any misgivings? I mean I mentioned Enron in that question. I mean obviously there's something very serious going wrong... PRESCOTT: keep throwing in Enron as if you've got some accusation to make against us. I presume you haven't because no evidence has been provided, you just throw it in like that. Quite wrong John. HUMPHRYS: Because people are concerned, they see a company like that, that has done some dreadful things. PRESCOTT: But you keep mentioning it, others keep mentioning it, there's no ruddy evidence what for it to suggest any kind of corruption, but if we go back to your original question, which is, does the Labour Party have a relationship with business. Yes it does. Does it have it with the trade unions? Yes it does. HUMPHRYS: Too close was what I said. PRESCOTT: Well, it has relations, you can make a judgement whether it's too close or not and if you look at the TUC and CBI there's no doubt about it there has been a closer working relations, but it used to happen in previous governments. At the end of the day judge us on what we deliver, is it the kind of manifesto and the traditional values placed in a modern setting. I mean it's more with business having discussions than perhaps before, so what's wrong? I've got regional government, I've got development agencies where we put businesses and the whole community together to work for the community. What's so wrong with that? HUMPHRYS: Alright. Some people - I'll not answer that question because it's not my job to answer them as you know, but some people might say, "Oh there's John Prescott, what's he doing here, I thought he was retiring". That peculiar story last week, briefed by... I don't know who briefed it, by somebody that you're going to take the early bath. That's not right? PRESCOTT: No, I want fight. I want a third period for the Labour government. We've got to fight to get that case across and it was a nonsense. They knew I wasn't going to retire, but you know we've got papers like The Sunday Times and The Telegraph. They want to keep going for me, I think wishing I would go. I don't want to disappoint them and tell them I'm not going to go. But it's the way the Tories are working, it's not an opposition. You were involved in one with what's his name - Nicholas Soames. HUMPHRYS: Oh, I meant to raise that because in case people don't understand what that's all about, I was going to say I still..... PRESCOTT: Another non-story. HUMPHRYS: What Nicholas Soames did for those who weren't aware of it, Tory MP, was he put down a written answer to ask the Prime Minister what the job of the Deputy Prime Minister, John Prescott is. And the answer came back, we'll get back to you on that. And people thought what, the Prime Minister doesn't know what he's doing! PRESCOTT: No, no, he put the question down on Tuesday. It wasn't answered on the Thursday.......Thursday night it was answered. It was in Parliament and in the hands of the press on Friday. HUMPHRYS: Why didn't he just immediately..... PRESCOTT: Well because I have to check an answer, he has to check an answer. HUMPHRYS: Why? PRESCOTT: Well, because we're answerable to Parliament. If my name's on it they would expect me to have checked it, otherwise... HUMPHRYS: You would expect the Prime Minister to know exactly what his deputy did and... PRESCOTT: No, but he has to....well you could have pressed a button on the Internet and got it yourself. HUMPHRYS: But I'm not the Prime Minister. Why didn't he do that? PRESCOTT: .......why you gave such ...why you gave...a professional journalist such attention to a clearly drawn stunt was beyond belief. HUMPHRYS: Because the Prime Minister seemed for a moment then not to.... PRESCOTT: He didn't at all. HUMPHRYS: Why didn't he press the button on the Internet then? PRESCOTT: Well, he know what it is. I've been before the Select Committee, I've made statements in the House, but you know that answer was there on Friday morning. You had this fool on the television, on the radio... HUMPHRYS: .... Nicholas Soames said he rather liked you.... PRESCOTT: You know he's an ex-Guards officer who finds people like me who used to serve drinks something unimportant, shouldn't really be in the House of Commons for a drink, unless you were getting in there along with a Guards officer. You know a bit of a classer like that. But if you take Saturday, if you take Saturday, he had the answer in the House of Commons Friday but perhaps he didn't call in there, perhaps he couldn't get five days a week in the House of Commons. Look, these are nonsense stories by a Tory press who build it up. They must think I'm important enough to do the stories, but let me tell you, I'm going to be round fighting Tories, I know nothing more but to fight Tories and I want to see that we win that third period for a Labour government. HUMPHRYS: And what about your old role in the government. I mean are you happy with the way that the Number Ten is working in the sense that we've got all these special advisors now and people who had come in from outside running you know, civil servants giving evidence and all that? PRESCOTT: Well John, as when I did the transport one, I take a bit of time just looking at it and then begin to do the White Papers and things I did there. Here, I've only been here four months. I can see things that I don't feel happy about and changes and I discuss what we might do about that. I've got..... HUMPHRYS: exclusion. PRESCOTT Social exclusion and poverty, that is across government to say that's ......and I think I'm now understanding exactly we'll do that. I'm really going to be finishing the White Paper on regional governments which is a major development, and by the way, I've probably got more functions and roles, than any of the Deputy Prime Ministers that have been in there. Yes, I'm happy with the job, yes I am dealing with some of the changes that are necessary. HUMPHRYS: What are you unhappy with, I mean in the way that the operation is run. I mean the.... PRESCOTT: I think that's one of the points that you, when you, I think you interviewed Heseltine in 1997, in 1995 I think about him doing the job, and he said, in this job you have the authority to share the confidence of the Prime Minister and also the confidence of the Secretary of State you work with on the Cabinet committees. You have that confidence by not shouting about what you're doing, but getting the agreements, called fixing, get agreement, and I'm at it as much as any other Deputy Prime Minister and I love it. HUMPHRYS: And no unease about the way some of the advisors operate? PRESCOTT: Well, I always have unease, you know me, and I deal with them. But I do it with less publicity in this job, because I'm supporting the Prime Minister and he's a pretty good Prime Minister to support. HUMPHRYS: John Prescott, thanks very much indeed.
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.