JOHN HUMPHRYS: Bill Morris, Tony Blair
says our destiny lies in the Euro. Do you agree?
BILL MORRIS: Our economic future certainly
lies in Europe. It's our travel to work area, it's our recruitment area
and it's our investment area but to suggest it's a matter of destiny that
we join the Single Currency, I beg to differ.
HUMPHRYS Your colleague John Edmonds
says that British companies at the moment are competing with one hand tied
behind their backs.
MORRIS: Well, I think that a lot
of the arguments coalesce around manufacturing and it's been suggested
that if we was to join the rate at which we joined would give British manufacturing
a one off boost. Well, it may well do that, but that's like, you know
taking a flutter on the Foreign Exchange Market. What British manufacturing
really needs are some of the fundamental fault lines about investment,
about skills, about productivity, those are the issues which will make
a difference in the market place as we compete with the rest of the world.
HUMPHRYS: And this from your perspective
is where the Stability Pact comes in as well because if we were to join
and we were to be subject to the rules of the stability Pact, to the extent
to that they are being enforced, you'd have grave misgivings.
MORRIS: Well, that's right we've
all been concentrating on the five tests, which are scheduled to be assessed
next year, and what we've taken our eye off from is the plague of the Stability
Pact because this Stability Pact is like a tight corset and it means that
you have to pay a very, very, very high price if you put a little bit of
weight on. In this instance, public sector borrowing, and it seems to me
that you have to have some control, but the control has got to be much,
much more flexible than the Stability Pact because all over Europe we see
in France, in Germany, in Italy, in Portugal, we see the Stability Pact
at work and the result of much of that is high and rising unemployment.
So, we in Britain at the moment can make a choice, we can join with the
Stability Pact and forget our public services in terms of the expenditure
and improvement or we can take the latter.
HUMPHRYS: Forget them?
MORRIS: Well, that's right what
I'm saying John is that you can't have both at this particular point of
our economic cycle. You cannot have both the Stability Pact and continue
declining investment in our public service you have to choose.
HUMPHRYS: Well, what Ken Clarke
says he recognises that choice obviously, but what he says is you put up
taxes and that's the way you pay for your public services. So you don't
have to borrow, after all if you are raising loads of money from us, the
public, then you don't have to borrow the money.
MORRIS: Well, there is a limit
as to how much you can put up tax in terms of the threshold of acceptance
and putting up taxation is something which will react negatively against
what we want to do in expanding public service and indeed in expanding
the private sector, but I think that the proposition which I know that
the Chancellor have indicated that rather than concentrate so strictly
on the Stability Pact, at the three per cent deficit level, what we should
be looking at is to look at total public spending as a percentage of GDP
and the suggestion coming out of the Maastricht Treaty that that should
be about sixty per cent and it gives us manageability over the economic
cycle and not judge it sort of year by year or month by month and it seems
to me that there is something in that to be properly and constructively
HUMPHRYS: So it's your understanding
that the Chancellor himself is worried about the effect, more than worried
about the effect of the Stability Pact.
MORRIS: Well, he hasn't confided
in me, but I am quoting...
HUMPHRYS: ...perhaps he has a little
MORRIS: I'm quoting The Sunday
Business today which indicates that that is a proposition which could be
advanced, because everyone recognises that in the long-term, subject to
all the conditions, there is some value in being part of a marketplace,
where you only have one currency. But it cannot be at any old time and
at..with any old conditions. It has got to be right for us and at the moment
my argument, quite straight and simple: public service is number one priority,
when you get public services right, which will inform the voters' experience
at the next General Election, you are guaranteed a third term, that is
when you turn your mind to all these other complexity about Stability Pact.
HUMPHRYS: Except that you're not
going to get it right, you're not going to get them right within the next
two or three years are you, you're not going to get the NHS right, you're
not going to get schools right, you might start putting them right, you
might begin the process, but nobody not even Tony Blair I think believes
that you are going to have the NHS whistling along merrily in three years
MORRIS: Oh you'll see measurable
improvements John you'll see measurable improvement. It's about whether
we get on the London Underground, whether you know this, the waiting time
to get into the hospitals has been significantly reduced and of course
we're making tremendous progress, for example, on the class sizes coming
down from thirty-plus, thirty-five, forty down to thirty which is government
policy, so I disagree that you won't see measurable improvement I think
you can and I think voters' experience will be informed by those improvements,
when you do that, that's when you get onto the single currency and all
the attendant problems that goes with it.
HUMPHRYS: What that means is that
there could be no question of a referendum on joining the Euro between
now and the next election?
MORRIS: I don't think there will
be one anyway because we have our own economy which is slowing down I think,
the growth rate I suspect might well be downgraded, I think it will come
in under two per cent at their end, there's some difficulty in Germany
as we have seen in terms of whether the German political system will last
given the coalition there because there are some competing priorities there,
firstly the Greens are asking for extension in public spending, the employers
are asking for reduction in public spending and the trade unions are not
in the mood for labour market reform so there is some instability and you
can go all around and have a look, we've got a whole plethora of elections
pending here and, you know, we just cannot in my view absorb a referendum
in this particular parliament, particularly against the uncertainty of
what may or may not happen in Iraq.
HUMPHRYS: But the government is
effectively locked into, Tony Blair specifically said last week that he
wouldn't, he couldn't understand this argument about Iraq, he thinks that's
absolute nonsense that that might push the referendum aside, but the government
is locked in, in this sense isn't it, that they have said if the five tests
are met, there are huge imperatives, huge reasons why we should join the
single currency now Gordon Brown has embarked upon testing the tests and
it's very likely indeed isn't it that by next June or possibly earlier
he'll pop up and say - ah, the tests have been met satisfactorily. Are
you saying even then we should not have a referendum?
MORRIS: Well the prime minister
in his speech said if the five tests are met we should go for it. He didn't
say when we should go for it, to govern is to choose, and to choose is
HUMPHRYS: Ah but the message is
coming from him, particularly when he's asked about would Iraq push it
all away and all the rest, the message is coming from the, the mood music
certainly is that once those tests are met we should go for it as soon
as is respectable.
MORRIS: Well the political imperative
does not lead you to that conclusion. I've just talked about the uncertainty
in terms of our economy, German economy, the Iraq war and the plethora
of elections that we have to win, it's election overload, so the political
imperative is win the general election by fixing public service and return
to the Euro thereafter.
HUMPHRYS: If there were to be a
referendum, in a sentence, your union, or you anyway would campaign against
MORRIS: As things stand there is
no case to support, that's in line with what the British people think and
that's where we are.
HUMPHRYS: Bill Morris thanks very
MORRIS: Thank you.