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JOHN HUMPHRYS: Good afternoon. It's
been a bad week for the Government with so many questions and accusations
about Labour's links with big business. I'll be asking the Cabinet Office
Minister Lord MacDonald about that letter Tony Blair signed and why he
should want to help a foreign businessman. The European Union seems embarked
on another step down the road towards greater integration. Can Britain
hold it back? That's after the news read by MATTHEW AMROLIWALA.
HUMPHRYS: Thanks Matthew. One of
"new" Labour's great achievements was to break down the barrier of suspicion
that had always existed between OLD Labour and big business. The old enemies
have become close friends. Too close? Well that's what the Government's
critics believe. They point to big donations made by people like Bernie
Ecclestone and close ties to the Hinduja brothers and now (this past week)
the strange tale of the Indian billionaire helped by Tony Blair to buy
the state-owned steel industry in Romania. And there are more revelations
in this morning's newspapers about how Britain helped the company to get
a huge loan. Is there anything sinister in all this or is it - as Mr
Blair said on Wednesday - a load of garbage? I'll be talking to the Cabinet
Office Minister Lord MacDonald after this report from Iain Watson.
TONY BLAIR: This is a complete load of
nonsense from beginning to end. It's not Watergate, it's Garbagegate.
IAIN WATSON: The Prime Minister wanted
to rubbish allegations that he was giving support to the Indian billionaire
Lakshmi Mittal just because he was a Labour donor; but with confirmation
today of yet more indirect British help for his company, it won't be easy
for the government to dispel the stench of sleaze.
FAZ HAKIM: The system leads to
a situation where you are raising money on the one hand, and making decisions
about those companies on the other hand and the two just don't go together
HENRY DRUCKER: Those who want to buy influence
are those who need to buy influence. Very often, they are companies who
are primarily foreign companies, but who are beginning to do business in
the United Kingdom and want access to British ministers.
WATSON: To have one brouhaha over
business links could be considered a misfortune. To have several begins
to look careless. A pattern seems to be emerging - Labour is accused of
impropriety, they mount a robust defence, then it emerges they haven't
exactly been telling the whole story. Even when they've been doing absolutely
nothing wrong, the perception can be as damaging as the reality. So now
some supporters are saying it's time that Labour changed the whole system
of party funding, while opponents say there are more immediate questions
to be answered over the Mittal affair. so it seems Tony Blair still has
some way to go before he consigns Garbagegate to the dustbin of history.
Last July, the Prime Minister wrote a letter to his Romanian counterpart
welcoming the imminent purchase of the country's Sidex steelworks by this
man's company LNM. Lakshmi Mittal had given one-hundred-and-twenty-five
thousand pounds to Labour just weeks before. Tony Blair said he was unaware
of the donation, but the original defence - he was simply standing up for
British business - unravelled when it was revealed that LNM was largely
based overseas and employs fewer than zero-point-one per cent of their
staff in the UK.
TIM COLLINS MP: If the Prime Minister wants
us to believe his version of events he should publish all the briefing
papers he saw when he was invited to sign this letter. He should publish
the full details of all conversations relating to his Chief of Staff, he
should make it clear that he is agreeable now to a proper enquiry, to get
to the root of all this, he should stop just assuming that all he has to
do is say I'm a pretty straight forward kind of guy, and we'll take his
word for it.
WATSON: The political heat continues
to be turned on Labour. Today it emerged that officials at the international
development department supported an application for a seventy million pound
loan for Lakshmi Mittal's company, LNM, to buy this Romanian steelworks.
And late last week, it was revealed that Tony Blair had met Mr Mittal at
a fundraiser's party just weeks before writing his letter to Romania.
And that the financial link to Mr Mittal was forged back when Tony Blair's
Chief of Staff, Jonathan Powell, had been the party's main fundraiser in
COLLINS: I think the government
now must make it clear - what did the Prime Minister know and when did
he know it? What exactly was the role of his Chief of Staff? How is it
defensible to have someone who used to raise money for the Labour Party,
deciding what papers and what people see the Prime Minister? How can it
possibly be right for a British ambassador to be acting as though he was
almost an agent for an Indian businessman, whose British business interests
are almost negligible? This is deeply worrying.
WATSON: Labour's glitzy fundraising
parties take place in the glare of publicity; but one of the party's former
financial consultants believes aspects of the Mittal donation have yet
to come to light.
DRUCKER: Well I think one of the
most interesting aspects of this affair and certainly if I were involved,
questions I would want answers to is who asked Mittal for money? What did
he ask him for and what did Mittal want in return? I haven't heard any
of these things explored.
WATSON: Bernie Ecclestone, the
diminutive motor racing tycoon, was involved in one of the Labour government's
earliest problems of perception. Only when Tony Blair backed exempting
Formula One from a proposed European ban on tobacco advertising, did it
emerge that he'd given a million pounds to the Labour Party; the cash had
to be handed back
HAKIM: We clearly should have,
you know, just come clean about the whole thing straight away. You know,
in, in retrospect there wasn't anything to hide, and, you know, once we
did come clean it was end of story really. But we definitely needed to
think through perceptions.
WATSON: But it wasn't just the
Ecclestone affair. In 1997, it was revealed that the trade minister, Lord
Simon, still held BP shares worth two-million pounds. While this wasn't
illegal, some rotten publicity persuaded him to dispose of them. More
recently, the wealthy Hinduja family donated one-million pounds to the
Millennium Dome. Quite coincidentally, SP Hinduja received a British passport
in about a third of the usual time. The US energy corporation Enron donated
thirty-six-thousand pounds to Labour, and the moratorium on gas-fired power
stations was lifted; while no connection's been proven, the opposition
have thrown plenty of dirt around. Last week, further embarrassment for
the government when the former minister for Europe, Keith Vaz, was thrown
out of the House of Commons for a month for trying to frustrate an investigation
into his financial affairs. And now a former fundraising consultant for
Labour believes 'cash for access' is at least the expectation of some who
throw their spare dosh the government's way.
DRUCKER: You don't have to pay
money to get to see a politician, but there is the impression, which is
so strong that there's got to be something in it, that your comments, your
suggestions, your queries are paid more attention to, if you are a useful
donor to either party, the party of government, than if not.
WATSON: The question the government
is pondering is how to avoid future accusations or insinuations over 'cash
for access.' Downing Street say the Prime Minister is relaxed about a debate
over state funding but doesn't yet believe there's a consensus amongst
the public for it. That's code for saying it's politically risky. But some
of his former advisers believe there's no other only realistic option.
JAMES PURNELL MP: I think it was important in run
up to the ninety-seven election that the party could raise money from business
as well as from trade unions. It was one of the things which showed that
the party had changed, but the situation has now arisen where the party
gets criticised for raising money from the trade unions, the RMT, from
Enron and from private individuals and, given all of that, it's quite difficult
to see who we'll raise money from in the future without being criticised,
and I think that's why the case for looking at state funding of political
parties is now quite strong.
HAKIM: I think there will be some
problems in terms of getting the public to accept state funding and funding
of political parties, but the alternative is to keep having these stories
coming out again and again and again.
WATSON: State funding may be some
way off, but an influential Labour MP says the government can quickly and
easily distance themselves from the perception that rich business people
can buy access or influence.
TONY WRIGHT MP: We should have decided
there should be a cap on individual donations. We could discuss the amount,
I think probably something like ten thousand pounds a year would do it.
You could do that immediately. It would need the slightest amendment, to
the party funding legislation that we already have brought in, and I think
that would take care of any suggestion that you had donations of amount,
of an amount that could possibly influence policy.
WATSON: Tony Blair said he wouldn't
shirk tough choices, but if he chooses to tough out the Mittal affair and
casts aside a wider reform of political funding, he could find his troubles
piling up in the future.
HUMPHRYS: Iain Watson reporting
JOHN HUMPHRYS: Lord MacDonald, we all know
the basic details by now, LNM is a foreign company that has a tiny, tiny
proportion of its staff working in this country. How is it in the national
interest for the Prime Minister to help it to buy the state owned steel
company, or industry, in another foreign country - how is that in the national
LORD MACDONALD: Because we believe that the modernisation
of the economy of Romania and indeed of Eastern Europe is fundamental to
the future of Europe. Our Ambassador in Bucharest was encouraging that
process. That's why he wanted to deal at Prime Ministerial level with Adrian
Nastase, the Romanian Prime Minister. The loan that's been referred to
there is a loan from a bank backed by sixty countries...
HUMPHRYS: ..we helped them to get
MACDONALD: ..but a couple of dozen of countries
in the board of that bank, that shows the wide spread international support
for this modernisation process. Now if it's a bank loan but is going to
back a comapny that does have British links, it does have an ownership
by Mr Mittal, who is on the voters roll in the United Kingdom. But the
most important thing is that we are in there helping the country modernise,
to help shape the direction in Romania because that in the end, will be
good, not just for Romania but for the European Union and indeed for the
HUMPHRYS: It helps the United Kingdom,
though not a jot in terms of profits or jobs.
MACDONALD: Well, it helps the future of
Europe and you ask there about why businesses for instance should back
the Labour Party. I think they should back the Labour Party for the same
reason that the trade unions do, that we have delivered an economy that
is good for business and for workers in those businesses and that economy
we believe, in future, will be under-pinned even more by the accession
of these European states that are going to fund the European Union. (sic).
HUMPHRYS: Not an easy argument
if you are talking to a group of steel workers, who feel that their interests
- and I'm talking here about British steel workers with jobs in Britain,
who feel that their interests have been damaged. Mittal has been damaging
the interests of British steel companies and now we learn, this morning,
again another revelation, that he has spent four hundred and twenty thousand
pounds lobbying in the United States to keep out foreign steel which would
of course include our foreign steel, our steel. So, what we are doing is
helping a foreign businessman to damage the interests of this country's
MACDONALD: This country's steel industry
is mainly Corus and Ian Goldsmith of Corus said earlier this week that
the deal in Romania would only have a very marginal effect on their markets.
Now if you've got a global company like this, trying to position itself
in different markets then of course there may be contradictory elements
to it. But what we are concerned about is backing a broad range of international
opinion that says modernise Eastern Europe, modernise Romania, encourage
that process and let Britain have an influence on it, because in future
we want to see more British investment in Romania and that will be good
for the British workers and the British economy.
HUMPHRYS: You mention Corus, let
me mention another steel company to you, Allied Steel, that's based in
South Wales, its Chief Executive Graham Mackenzie says that what Tony Blair
is doing, and I'm quoting "is backing a business that is already supplying
to the United Kingdom and will import more as a result of this deal" he
says "we are under enormous pressure, he has lost.." - or his people have
lost "three hundred and fifty jobs in and around the Cardiff area because
of dumping steel from Eastern Europe". Now, this is a British steel company
that has been damaged by this company and will be damaged more by this
company and the union, the GMB union says exactly the same "Romania is
a major competitor".
MACDONALD: Well I believe that obviously
the steel companies have been damaged by the shifts in the global economy
in respect to steel but this government...
HUMPHRYS: ...why this specific
company...this company that has already damaged our...
MACDONALD: ...there was another statement
this week from the Steel Workers Union which said people are playing politics
with this issue.
HUMPHRYS: Well, do you want me
to read you what the GMB Union have said, which is exactly not: "this is
another blow to the beleaguered workers at Corus. The company says this
decision has come as a direct result of cheap competition from abroad.
The time has come for ministers to stop doing this kind of thing". Well,
MACDONALD: Well, to be attacked by the
GMB comes as no surprise...
HUMPHRYS: But they represent British
workers, unlike this other company that employs foreign workers who we
MACDONALD: What we have done for the economy
has been the greatest possible help to British workers...
HUMPHRYS: I'm not talking about
what you have done for the economy, I'm talking about this very specific
incident where the Prime Minister remarkably, remarkably, you've given
us no other instances where he's done this, signs a letter to help a foreign
company buy an industry in another foreign country - an extraordinary thing
MACDONALD: Not at all, what we are talking
about is trying to create an economy in Europe, where Britain can play
an increasingly active and we hope prosperous part in that.
HUMPHRYS: How many times has the
Prime Minister done this sort of thing in the past now?
MACDONALD: Well Robin Cook said earlier
this week that it had been done many times...
HUMPHRYS: I'm not asking Robin
Cook, I'm asking you - how many times has he done it?
MACDONALD: Well, I'm not Foreign Secretary,
when Robin Cook was Foreign Secretary, he'd done it many times. The Prime
HUMPHRYS: ....Well, has he given
any details. I mean I'd be very interested in how many times he'd done
it. How many times?
MACDONALD: Well I don't know how many
HUMPHRYS: Well, I'm sorry, will
the best will in the world, you're here answering questions on the government's
behalf, as a....
MACDONALD: ...oh, come on....
HUMPHRYS: No, not come on at all.
MACDONALD: Don't be facile. How many times...
MACDONALD: ...how many times do ministers
get involved in trying to help companies...
HUMPHRYS: ...well I'm asking you
MACDONALD: ...dozens of times and...
HUMPHRYS: ...I'm asking you to
help me and the audience on this. The Prime Minister sits down and signs
a letter to the Prime Minister of another country supporting a foreign
company whose interests work against the interests of our own steel industry.
I am asking you and it's a perfectly sensible question, I'm sure the audience
of this programme would think anyway, I hope they would, how many times
has that happened before?
MACDONALD: You put it in a way that distorts
what I was saying which is...
HUMPHRYS: ...answer it the way
MACDONALD: ...what we have done, we have
done is we have created an economy which has put one point two million
HUMPHRYS: ...you're broadening
the issue and that isn't the question that I'm asking you as you well know...
MACDONALD: ...well broadening, well I'm
broadening the issue...
HUMPHRYS: ...I'm asking you about
this specific question...
MACDONALD; ...I'm broadening the issue
because you broadened the issue there with a very generalised smear attack
if I might say, by Iain Watson...
HUMPHRYS: ...well let's deal with
this, let's deal with this specific case. How many times has the Prime
Minister done what he did on behalf of this foreign company? How many times
has he done it?
MACDONALD: The Prime Minister's spokesman
earlier in the week said that the Prime Minister had on a number of occasions...
HUMPHRYS: ...how many?
MACDONALD: ...in a number of countries...
HUMPHRYS: ...once, twice, ten times?
MACDONALD: ...I do not know, well you would
have to back through years of correspondence to establish that.
HUMPHRYS: So are you suggesting
to me that he often intervenes on behalf of foreign companies. Is this
what you're telling me?
MACDONALD: No what I'm saying is he's intervened
in Romania, an important future market for us, an important country, a
very important country in the Balkans, which is in desperate need of modernisation.
We believe that's good for Eastern Europe, we believe it's good for the
MACDONALD: ...we believe it's good for
Britain. That's why...
HUMPHRYS: ...let's look at the
other reasons that other people offer, as evidence for why Mr. Blair got
involved in this particular case, may be right, may be wrong, but let's
put to you a couple of points. He says, Tony Blair says he did not meet
Mr Mittal. And yet, he went to a party at Lord Levy's house which was held
specifically for fundraisers. A lot of people there admittedly, about a
hundred people there. Only a few of them were Asians, point number two.
Point number two, I doubt whether there were many there who had handed
over one-hundred-and-twenty-five thousand pounds to the Labour Party. It
is surely inconceivable and I use the word advisedly, that Mr Blair did
not meet Mr Mittal on that occasion.
MACDONALD: What's quite clear is that our
Ambassador in Bucharest said that this was a priority as far as he saw...
HUMPHRYS: ...I'm not asking you
about the Ambassador of Bucharest...
MACDONALD: ...for the modernisation...
HUMPHRYS: ...I'm asking you why
Mr Blair said he didn't meet Mr Mittal when it is most unlikely, inconceivable
indeed many people would say, that he did meet him, that's what I'm asking
MACDONALD: Well Prime Ministers meet many
HUMPHRYS: ...so why didn't he say
I probably did meet him. I met him at that party. Why didn't he say that?
MACDONALD: Because we are concentrating
on the big issues John, and with respect...
HUMPHRYS: ...well I'm sorry that
is a straight-forward question that gets to the core of this, did Mr Blair...
MACDONALD: ...what you're doing, what you're
doing, what you're trying, what you're trying to get into is a pseudo-forensic
examination of tiny detail which tries to find guilt...
HUMPHRYS: ...I'm trying to get
to the truth...
MACDONALD: ...well let's get at the truth...
HUMPHRYS: ...did Mr Blair meet
Mr Mittal - straight forward question.
MACDONALD: ..in context...
HUMPHRYS: ...straight forward question,
did Mr Blair meet Mr Mittal?
MACDONALD: What we are talking about here
is trying to build a much more prosperous Britain and we're trying to do
that by making sure that we're fully involved in Europe...
HUMPHRYS: ...made that point and
I've allowed you to make that point several times. I'm now trying to get
into a little more detail. Let's look at what happened. The donation was
made in May, Tony Blair meets Mr Mittal presumably, at this party in June.
He signs the letter on his behalf in July. Yet we are told that he didn't
know he had made the donation when he signed that letter. Again I put it
to you that's inconceivable?
MACDONALD: No, you're putting it exactly
the wrong way round. What I'm saying is that many business people will
back the Labour Party because we provided a very strong economy...
HUMPHRYS: ...of course, I don't
dispute that for a moment...
MACDONALD: ...just as the trade unions
do. And what I'm also saying is the priorities for backing this company
evolved out of the situation in Romania, they came to us from the Ambassador,
that's confirmed by the Foreign Office, so in those circumstances Prime
Ministers yes, sign many letters of that kind...
HUMPHRYS: ...but do they sign many
letters of that kind...
MACDONALD: ...and I'm sure that....
HUMPHRYS: ...well you've not given
me any examples of when they had. But look, let's look at this other area,
when the Foreign Office drafted the letter, the original letter that went
to Number Ten Downing Street, it described Mr Mittal as a friend of Tony
Blair. Now (a) why did they say that? And (b) why was it cut out of the
letter when it went to Number Ten? This letter that Mr Blair apparently
only gave thirty-seconds to.
MACDONALD: John, this, I think this is
fake forensics here.
HUMPHRYS: ...in what sense is it
MACDONALD: Well because I don't know what
the first draft would be...
HUMPHRYS: Well that doesn't make
MACDONALD: ...the first draft might come
HUMPHRYS: ...I might suggest that
perhaps you ought to know.
MACDONALD: ...your style of trying to conduct
this is an inquisition...
HUMPHRYS: ...I am asking you very
straight-forward questions with the best will in the world.
MACDONALD: ...an official drafts a letter,
another official amends it, that happens all the time...
HUMPHRYS: ...I dare say, I dare
MACDONALD: ...I don't know the details
HUMPHRYS: ...but I am asking you
why in the original letter Mr Blair, Mr Mittal was described as a friend
of Tony Blair and then that was excluded. You see, if what we're looking
at here is allegations that Tony Blair knew about this and might have been,
and I'm not suggesting he was, but I'm trying to get at the basis of this,
at the root of this, might have been influenced by that donation, these
become, I am sure you would accept this, you've been in this business of
journalism yourself long enough, you would accept that those are perfectly
legitimate questions, and if you want it all cleared up (a) why can we
not have those answers? (b) why isn't, why aren't all the papers to do
with this in the public domain? Why not simply publish them and have done
with it and say, look, that's it, there's the picture, our hands are absolutely
clean on this, go away with that, take it away, and now let's have no more
of it? Fine.
MACDONALD: Well, John, as you say, I've
been in the media business for a long time, and one of the things I know
is that there are papers there which are Tory papers, and they've run agendas
against the Labour Party, always have, they've been doing it...
HUMPHRYS: Oh, this isn't that it's
all got up by the press one is it? Is that the defence?
MACDONALD: Well, take the loan story this
morning. I mean a loan is a loan, it's backed by twenty-odd countries.
I won't go over it again as to why I think it's a good thing, but that's
run in the front page of a Tory paper, that sets the agenda. Now sadly
radio and television......
HUMPHRYS: I've made scarcely any
reference to that. I'm asking you for other examples. I'm asking you
what happened with the signing of the letter, I'm asking you about the
inclusion of the word friend, I'm asking you about Tony Blair meeting
Mr Mittal, all of which are legitimate you must agree, are legitimate questions,
and you're sitting there either unable or unwilling to answer any of them.
MACDONALD. I've told you I'm unable to
answer some of the detailed forensics of it, and therefore I don't want
to be put in a position of looking as though I'm being evasive. What I'm
saying to you is, there is an agenda being run here which is to say, let's
undermine the Labour Party, let's undermine its big picture agenda.
HUMPHRYS .....that supported your
election the last time around. Seems unlikely to me, but look, if Duncan
Smith, Iain Duncan Smith wants an inquiry why not have one?
MACDONALD: Well, if you take the form of
their Select Committee, Donald Anderson their Chairman said it's not worth
inquiring into, because he can see the politics in all of this, and what
he is probably more concerned with is the kind of leadership demonstrated
by Tony Blair on Kosovo and Sierra Leone and Afghanistan. Those are the
big picture issues abroad, the big picture issues in Britain are health
and education and transport and ......
HUMPHRYS: You mention one Labour
MP there, Donald Anderson. That about Piara Khabra, one of your Asian
MPs, Labour MP. What he says, or what he suggests very strongly this morning
is Tony Blair has been - put aside any culpability and dodgy dealings and
all the rest of it, but he says he has been extraordinarily na�ve in his
relations with businessmen, particularly Asian businessmen. Maybe that's
at the root of it is it, naivety?
MACDONALD: No. I think what we're doing
is trying to encourage the business community to have a productive relationship
with government. We want to make it clear that we are prepared to work
just as closely with business as we have in the past with the trade unions,
and we're working......
HUMPHRYS: Everybody who is watching
this programme I suspect would say pretty much what Mr Khabra said this
morning in the newspaper. When a businessman, a tough Indian businessman,
whether he happens to be Indian or not gives an awful lot of money to a
party they want something for it.
MACDONALD: Well, what business has got
for its donations from Labour is the strongest economy in Europe, and that
economy has produced over a million new jobs, the lowest unemployment for
a very long time, the lowest interest rates, the lowest mortgage rates.
Those are the big picture issues that clearly our opponents don't want
to fight on, they want to fight on this kind of minutia.
HUMPHRYS: Lord Macdonald, thank
you very much indeed.
HUMPHRYS: The European Union has moved
a long way since Britain joined the common market. Too far for some tastes.
Too far in the direction of a federal Europe. Now it may be on the brink
of moving towards even closer integration. A new body chaired by a former
president of France is about to convene to find ways to make the EU a more
effective operation - particularly important since the numbers of members
is about to increase from fifteen to twenty five. But the sceptics worry
that it's really about developing a constitution that would turn the union
of independent nations into something more like a federal state. The Europe
Minister Peter Hain is the British Government's representative on that
body and I'll be talking to him after this report from Paola Buonadonna.
PAOLA BUONADONNA: France's Europe Minister, Pierre
Moscovici is on a delicate mission. The people of his country, like elsewhere,
are falling out of love with Europe and a crisis of confidence is engulfing
the EU institutions. Even the countries of Central and Eastern Europe which
are seeking admission have doubts. Moscovici travels to them constantly.
Today's destination is Poland.
Whilst Britain is still
soul searching on the Euro, a different debate has taken off in the rest
of Europe. The main issue is how the EU should reform to function in the
Twenty-First Century and now could be the last chance to achieve fundamental
changes before the Union becomes too big to agree on anything. Everybody
accepts that the European Union must become more effective and more accountable
to its citizens. But will this also mean another step in the development
of an ever closer Union, with the European Union getting more powers at
the expense of national governments?
Finding their way through
the maze of options for reform is a group of representatives from all EU
countries, including Mr Moscovici and from the applicant countries too.
They're known as the Convention. They will set the agenda for the next
round of negotiations in 2004, just before Poland and the other new members
join in. Mr Moscovici has come to meet the Polish representatives.
PIERRE MOSCOVICI: Theoretically everything is
possible. We could decide to go further in European integration which means
to give more power to Europe. We need to have a political control. We
need more legitimacy, we need transparency and this is why our institutions
cannot be something felt as abstract, as outside of our decision, of the
PROFESSOR PETER GLOTZ: I'm not interested in a European
Union and the Germans aren't be interested in a European Union which is
nothing but an internal market.
DAVID HEATHCOAT-AMORY: The worst case is if the solution
to the acknowledged problems is perceived to be simply more Europe, more
centralisation, more expenditure, more majority voting, more civil servants
and more politicians. That is the danger, that is the whole thrust of the
European Union over the past forty- five years. If they don't change direction,
then I think the whole exercise will be a waste of time.
BUONADONNA: It's not just the British who
feel that Europe has swallowed up too many powers. People here in Poland
as well as in other aspiring new member states, are also concerned about
the loss of national sovereignty. But there are still significant pressures
to have more decisions taken centrally, by the European Union through its
Pierre Moscovici is here
to reassure the Poles that they won't lose their identity. But once they
and the others join in there are calls for the veto power of each country
to be reduced, to avoid paralysis. And there's already a long list of suggestions
on the Convention's table for areas in which European integration could
be reinforced. They range from foreign and defence policy, to police and
justice, economic and social policy and even taxation.
GLOTZ: I personally believe that
a Euro tax would make sense. That means money for which the European Parliament
in the future would have a budget right.
JEAN-LUC DEHAENE: If you want to come out of the
present discussion on financial needs and move discussions from 'I want
my money back' and so on, I think the best way to solve that is to have
a European, and a real European source of income, like for instance the
custom taxes are. You can have some internal taxes too, which should be
real European income tax.
MOSCOVICI: Prime Minister Jospin,
is in favour of a social treaty in Europe in order to strengthen the cohesion
of Europe on this field. I also think that Justice and home affairs have
to be taken very seriously by Europe because we're just fighting terrorism
right now and we see that nation states are very important but they are
not sufficient for that. These are the two main areas - I also think about
defence, about security, about foreign affairs policy - well, we've got
to discuss that.
BUONADONNA: A tete-a-tete with the Polish
Prime Minister was one of the highlights of Mr Moscovici's trip. Britain
has no problem with Europe co-operating more in foreign policy but it finds
itself in a very uncomfortable position when there are calls for an economic
government and when France and others put forward ideas for tax co-ordination.
HEATHER GRABBE: Britain has long resisted the idea
of tax co-ordination and certainly of tax harmonisation and Britain can
do that because you have to have a unanimous vote in the EU in order to
get that kind of agreement. The problem is that the Euro zone members are
discussing these issues among themselves and Britain is not part of the
debate. So they could come to a decision about perhaps coming towards more
economic policy co-ordination in a way that Britain doesn't like and Britain
cannot stop them from doing it, because we're not actually part of that
BUONADONNA: Once the applicant countries
join the European Union club, decision-making could come to a standstill,
weakening Europe's effectiveness and prestige. The French, the Germans
and many other governments believe that in the future more decisions should
be taken if the majority of the member states are in favour rather than
all having to agree to everything.
GLOTZ: I hope that we will find
in a lot of fields to co-decision procedure with qualified majority and
then indeed, Europe will be stronger than it is today. And I think after
the 11th September in the attacks in New York, this is the only possibility
that European states like the UK and Germany can play a sensitive role
in this dangerous and complicated world.
BUONADONNA: After the decision-makers,
it's time to meet the Polish opinion-formers, at the offices of the influential
national newspaper Gazeta Viborcha. Many countries believe that people
would understand the EU better if it had a constitution, a basic text which
sets out its role. Critics in Britain argue that a European constitution
would undermine the national states.
HEATHCOTE AMORY; It tends to be federations that
have constitutions between countries so it would in a sense be sanctifying
a federal structure for Europe, which is of course very much not what either
I or indeed the British government or certainly the British people want.
MOSCOVICI: I know that it's not
in the British tradition to have a constitution but we must think about
it together and I notice very positively that the target of constitutional
treaty was written in the Laeken Declaration which was of course accepted
by all the governments in Europe including the British Government.
BUONADONNA; Tony Blair came to Warsaw two
years ago to speak about the Europe he wanted. Now it's France's turn to
set out its vision. With most other EU countries France is keen for the
Charter of Fundamental Rights, which was drafted in 2000, to be made legally
binding so that the EU could set new standards in areas like trade union
MOSCOVICI: The Charter is very
important because it tells us what are the values that we share, what
are the rights that have to be respected, dignity, solidarity, justice
and freedom. And it's very important that it has to be legally binding
in order that we can translate those values into acts that we can sanction
people or countries who don't respect those values.
GRABBE: Britain is having a debate
within the government about this question. The Foreign Office has traditionally
been much more wary of incorporating it into the EU's treaties whereas
I probably think Number Ten, Downing Street is becoming much more relaxed
about that issue.
HEATHCOTE-AMORY: During the treaty of Nice negotiations
the British Government gave an explicit assurance that the Charter of Fundamental
Rights was not legally binding and would not be - it was only a political
declaration or aspiration and I think it would be a betrayal of all the
assurances we were given if they give in and allow that document now to
become legally binding at the first opportunity. Those assurances were
always suspect, they will be shown to be worthless if they give in on that
BUONADONNA: The French ambassador's parties
are of course always excellent. But the institutions of the EU are less
popular. Another issue the Convention will look at is what to do to make
the European Commission more accountable. Britain is against turning the
Commission into a political entity. But many politicians in Europe believe
the Commission President should be elected, rather than appointed by the
heads of state.
MOSCOVICI: What I propose is that
the President of the convention - of the commission is appointed through
the European election. Such as any election you need to have a fight between
the Conservatives and the Social Democrats. And I think that the leader
of the coalition who wins the election must also be the President of the
DEHAENE: The Europe of tomorrow
will be a much more political Europe who wants to play a role on world
level to have a voice, to be one of the powers that is taken to account,
at world level. Well, if you want that you need an executive level that
is democratically elected and that level is the President of the Commission
BUONADONNA: It would be easy to dismiss
the Convention as just another European talking shop. In reality governments
around Europe are taking it very seriously - it hasn't even been launched
yet and already the national representatives travel around to meet each
other to forge alliances and deals, eager for their own particular vision
of Europe to prevail in the end. The British Foreign Secretary Jack Straw
has good allies in Europe. Denmark, Italy and Spain are all keen to rein
in the EU. But the traditional Franco-German alliance, the push for more
integration has not run out of steam yet .
MOSCOVICI: If we put our strength
all together then we're stronger - then we have the real weight, then we
can have also a shared leadership with the US and not be always following
them. So this is why we need to make more Europe
HEATHCOTE-AMORY: There is a huge federalist momentum
in Europe. A great many continental politicians and the technocratic class
in Europe believes that the solution is always more powers at the centre
and unless they can reverse that, then I think we're going to get ourselves
deeper in the mud.
BUONADONNA: The Warsaw visit draws to a
close but the debate on the future of Europe is just beginning. The convention
has a huge task on its hands if it is to increase people's respect for
Europe. But if it goes down the route of more and stronger integration
it will be very hard for the British Government to sell it back home.
HUMPHRYS: Paola Buonadonna reporting
JOHN HUMPHRYS: Peter Hain, it's a familiar
story in a way this, isn't it? What we're seeing is our colleagues in Europe,
our partners in Europe, many of them anyway, want to go further than we
do, we argue against it. Perhaps we ought to be more co-operative, I mean
just to take an example, Germany and the Belgians want a sort of Europe
tax that would pay for the doings of the European Union. Might be quite
sensible, stop a lot of squabbling and all that, wouldn't it?
PETER HAIN: No I don't agree John but your
report made very clear that we're not isolated on this matter. Germany
and Belgium, Belgium in a way are isolated, in wanting ever more greater
federalism and some kind of federal super state. Italy doesn't want it,
the Prime Minister and I accompanied him, was talking to the Italian government,
Prime Minister Berlusconi in Rome on Friday. They don't want that, Spain
doesn't want it, many other countries including Sweden and Denmark don't
want it. So there is a healthy debate about how we can have a Europe which
has got twenty-five members, which it's likely to have after the enlargement
of the European Union in a coupe of years, how we can manage that more
efficiently and some things need to be done at the centre, such as the
fight against terrorism. We agreed extra security measures, which you can't
do on your own, there's no point Britain standing aside and saying, we
can fight terrorism on our own, we can only do it by co-operating with
other countries in Europe and we're doing that very very effectively and
without the European Union we couldn't have put in place these extra security
measures which defend our own livelihoods and our own freedoms.
HUMPHRYS: But I mean, given
the sorts of problems that inevitably this kind of expansion is going to
bring with it, perhaps a Europe-wide tax of some sort might not be a bad
idea, as I say, it would sort out all the squabbles there always are about
who pays what for, how much for what, and all the rest of it.
HAIN: I don't agree
and I don't think there's majority support in the European Union for that,
and since you take on my point about enlargement, I found travelling to
Poland, to, rather to Czech Republic talking to the Polish ministers, to
Slovakia, Slovenia, Hungary and so on, and talking to others recently,
to the Latvian Foreign Minister and also to the Romanians, that I found
that actually there's more interest in those countries like Britain, preserving
their national identity and their nation states, after all they've just
become independent, most of them, from the Soviet Bloc and they are very
jealous of their nationality and their nationhood as we are. And I think
there's now a debate, a healthy debate as there will be in the convention
of Europe where I'm representing the government, which really says that
we ought to put the nation state at the heart of Europe, inter governmentalism
as being the driving force, rather than electing a commission president
and having the European Commission and the European Parliament as the strategic
driving force of Europe. That's the position of our government.
HUMPHRYS: But what they
do want, what our partners do want, I'd have thought what we wanted, was
to make Europe more effective, to work better, given these various problems.
So surely, in that sense removing the veto on...that we have at the moment
on certain areas. Maybe that, but I mean imagine, twenty-five countries,
each one of them able to veto certain things, be chaos won't it?
HAIN: Well that's
why we've agreed qualified majority voting as indeed the Tories did, David
Heathcoat-Amory was a supporter of that government.....
HUMPHRYS: ...but we still
have veto on some things don't we?
HAIN: .... Yes
we do. Taxation's one, that's absolutely right. Social Security is another.
So is committing our troops to an armed operation of some kind, so is Foreign
Policy. These are all ultimately matters for national veto. But we can't
agree common environmental standards to protect our air, to clean up our
beaches, to ensure our water's purer without common majority voting, so
we don't need a veto in those areas, but on some key issues, vital to our
national rights and our national independence, including taxation policy,
we have a veto and we intend to keep it.
HUMPHRYS: And all the vetoes
that we have will remain, is that what you're saying?
HAIN: Well, on
justice and home affairs, in response to September 11th for example, more
qualified majority voting was brought in, because it was easier to deal
with quickly, with security measures, a common arrest warrant for example,
to arrest people wherever they are in Europe, rather than complicated extradition
arrangements, to do it without having the veto remaining and stopping that.
So where it's sensible we'll consider it on its merits, but there are some
very strong red lines for us, taxation, social security, foreign policy,
defence, these matters should be subject to that the veto should remain.
So we should just approach this on a common sense basis, not on some kind
of fanatical basis, pro-Europe, or anti-Europe.
HUMPHRYS: Would it make common
sense to have some sort of constitution for Europe. People like Mr Heathcoat-Amory
say that it would sanctify a federal structure, which I imagine you would
describe as a bit of yabooing, the sort of thing that you perhaps wouldn't
want to get involved in, but it could be very popular, it could be very
sensible, couldn't it, it might connect the people of Europe with the institution
of Europe in a more effective way.
HAIN: Well there
is a need to make that connection more effectively and I agreed with what
some of the points made in your report and if we were talking about a European
constitution that enshrines certain values of the sort that Pierre Moscovici
the French Europe Minister was talking about earlier, freedom, solidarity
and so on...
HAIN: Well let's
look at that in terms of enshrining basic principles and clarifying what
is an enormously complicated set of Treaties that no ordinary member of
the public frankly, no Europe minister can fully get to grips with. They
run into millions of words. So if there's a desire as I think there may
be, to have a set of principles enshrined, call it a constitution if you
like, that lay out exactly what the European Union does, where our rights
are, where the opportunities for advance are, that's one thing. If it's
a blue-print for a federal super state centralising all power in Brussels,
that's quite another, we wouldn't accept that.
HUMPHRYS: So where would this Charter
of Fundamental Rights fit in then? Again, Mr Amory says it would be a betrayal
to make it legally binding. Our own Robin Cook, former Foreign Secretary
of course, said it's a political declaration and that's the way it should
stay. But Heather Grabbe, whom you say in that film, says you...there is
a thinking in Downing Street now and in the Foreign Office that maybe there
is something in it, maybe we ought to agree to it. What do you say to that?
HAIN: Well it depends what
it actually means...
HUMPHRYS: How, what do you take
it to mean?
HAIN: Well, I'm about to
tell you John. If it meant that we would have it as an alternative to
the Convention on Human Rights and therefore, if it was some kind of rival
to that, then you'd have to be very careful about that. If it could be
enforceable in British courts, we would find that extremely difficult.
If, on the other hand, it were a set of principles put in a new treaty
or not, as the case may be, with very clear delimitations and restrictions
around it, well I think we can have a common sense look at that, because
it would be an advantage in basic values of rights and solidarity and dignity
being stated so clearly in the treaty. Because I think there is, as we
saw in the Irish Referendum, when they rejected ratification of the Treaty
of Nice, allowing for enlargement, we saw the No campaign running on the
slogan "if you don't know, vote no" and there is a gulf between the citizens
of Europe, the led of Europe and the leaders and the institutions of Europe
which must be closed in all our interests.
HUMPHRYS: What Mr Moscovici would
like, and many others of course, is to see the existing, the Charter, made
legally binding. You're saying no to that are you? Or...
HAIN: I'm saying let's
find out what that means. If it means by legally binding that it runs right
across the European convention on human rights and it runs right across
the European Court, well, then that's not something that we would go down
the road on. If it means that it would be able to be enforced in British
Courts, that's something we would object to, so I think we need a common
sense discussion as to exactly what peer means and what others mean and
I think we should go into this debate, so I am representing the government
with confidence, because if you look at what we've done under this Labour
government, we've actually won argument after argument in Europe for no
federal super state but a Europe based on Europe of nations for economic
reform, an important agenda there, for having a peace-keeping capability
so that we can take action in the Balkans and so on. These have been British
agendas and I think the British agenda will win out in the convention about
building our kind of Europe, a Europe that delivers better security for
people, more jobs, better rights, a cleaner environment.
HUMPHRYS: Peter Hain, thanks very
HUMPHRYS: And that's it for this week,
don't forget about our web-site if you're on the Internet. Until the same
time next week, good afternoon.