BBC On The Record - Broadcast: 24.11.02

Interview: John Prescott MP, Deputy Prime Minister.

What can the Government do to resolve the fire dispute?

JOHN HUMPHRYS: The government is facing its worst industrial crisis since it came to power - some say the worst we have seen in this country since the winter of discontent a quarter of a century ago. And the man at the centre of it is the Deputy Prime Minister John Prescott. It was he who vetoed a deal agreed between the Fire Brigades Union and the employers in the early hours of Friday morning - hours before the strike was due to start. Well now we're three days into the strike with another five to go and there's no sign of a peace deal. The problem is the government says there's no more money on top of what the local authorities (the employers) have got in their own kitties. If they do agree to more, then it has to come from savings resulting from what is called "modernisation" of working practises. So why is the government involved in this at all? John Prescott is with me. Good afternoon, Mr Prescott. JOHN PRESCOTT MP: Good afternoon. HUMPHRYS: Can we just clear up what I think is a misunderstanding on the part of a lot of people, confusion on the part of a lot of people, are you happy, in principle - in principle - with a sixteen per cent pay increase over this period of time. PRESCOTT: Let me come to back point, but let me just say at the beginning, we are in a strike situation, I'm very sad about that. I think they could have avoided that but I want to assure the public that the safety backup is not as good as the complete fire service, but it is good and I want to thank all of those people who are involved in it, the Armed Forces, the police and all other organisations who are doing a tremendous job and I think the public have accepted that and I have provided more red fire engines, basically the pool available for them and you've seen that on television. So, I just wanted to record that. I think the second thing I have to do is to make sure the confusions of the deal are cleared up and you've started to do that, but at the end of the day, this will be settled by negotiations and that's what we've got to get to to make sure that the confusions, if you like, of the last negotiations, are now removed and we get into serious negotiations about what you say, the sixteen per cent. Let me come to the sixteen per cent point. That was a programme put forward by the employers and they said that they could put that deal to the fire brigade and hope to get an agreement about it. It changed in its form during the night and from the day before and material was altered quite considerably but we could come to that later. Our view about that, that any deal that is actually agreed by the Local Authority which costs money over and above the money they've been given to in the public pay and the public payments settlements, that would have to be financed by modernisation. That has always been clearly set out by the Prime Minister, clearly set out by myself and the Chancellor, it's an agreed Cabinet policy. But we needed to know what the costs were, and therefore the sixteen per cent in two years, which Bain inquiry, when it looked at it and gave recommendations and modernisation changes, said it could be eleven per cent in two years, clearly there is a material difference but the same criteria would apply. Namely, it had to be financed out of changing work practices and the modernisation in the Fire Service. HUMPHYRS: So, if, given that modernisation, in principle - again I keep emphasising this phrase in principle - you would be happy with sixteen per cent. You've no routed objection yourself to sixteen per cent? PRESCOTT: Well I would say about sixteen per cent, it does raise the question of public pay policy... HUMPHYRS: I understand that... PRESCOTT: No, no, but I mean it's a very important point. I mean as Gordon has made clear, if you gave sixteen per cent to everybody, whatever the circumstances, that's sixteen billion pounds, so there is a major economic policy here about whether we continue with stability in our economy, with low inflation, low interest rates and higher levels of employment - two hundred thousand of them inside. So, the fair answer to you is to say, yes there are other considerations in public pay on sixteen per cent, for example, let's take the local authority workers, at the same time as the negotiations the fire workers, the same employers were negotiating over local authority. They settled for four per cent with changes in work practices. Now we have a situation where we want sixteen per cent and no changes in work practices, the signal that gives to everybody else is just the wrong signal, we have to have reform and modernisation which every other worker has done, except the firemen. HUMPHYRS: But given that you get the sort of reform that would satisfy you, then would sixteen per cent be acceptable - given that you get the reform. PRESCOTT: If we can get the modernisation, that's a very important issue, but I must tell you, the first agreement they had which was on the Wednesday, detailed them, when we got the later agreement, it was taken out of the agreement. So that does indicate, and I've heard some of the pickets, on the fire strike at the moment, saying we are not having any of these changes at any price. So, clearly, before you can argue whether they are acceptable, they have to enter in to a form of negotiations on modernisation. HUMPHYRS: But there would be a transition period wouldn't there, between the productivity gains coming into effect, so that they would need, the employers would need some extra money to carry them through. Let us assume that you get those modernisations that you want, it's still not going to result in massive savings, one way or the other, for quite a long period of time. Would you fund, this is the question, would you fund that transition period. Would you say to the employers, here's a bit of cash, whatever it happens to be, to tied you over until those savings come into effect? PRESCOTT: No, I can't make that judgement. I mean, the only person who has produced any report which the union refused to co-operate was the Bain inquiry... HUMPHYRS: That's the Bain one, the eleven per cent.... PRESCOTT: But it actually showed how it can be done, the kind of changes he had in it, the reforms on the operation of control rooms, joint working. It happens in some of the brigades, but the FBU is against it, paramedic training, permanent staff working with retained firefighters, unbanned over-time, alternative shift systems. In some cases these are actually carried out by brigades but opposed by the national union. Now this is what's meant by modernisation. HUMPHYRS: No, I understand that. PRESCOTT: If you can do all that and Bain set it out in three stages. If you go for the first four weeks and you agree to do that, you can get your first stage payment, if you go to the next one, you can get the second stage payment. What this agreement did, was set out stage payments, but no agreement to modernise, no specific set out as by Bain. If you disagree with it, then please come and negotiate and unless you do that, you can't have any realistic negotiations where reform and modernisation is placed alongside the pay. HUMPHYRS: If they do that, if they go through that negotiating process and they reach the sort of productivity deals that you would be reasonably satisfied with but, it would cost a bit of extra money in the meantime, before the productivity gains kick in, would you finance - it's a terribly important question - would you be prepared to finance that gap, to fill that gap if you like. PRESCOTT: I was asked the same question by the local authority workers who had got four per cent. They say we can't settle, it was very difficult negotiations, but I had to say there's no more money available in those circumstances. HUMPHRYS: Is that what you are saying to the FBU, is it, no more money, full stop. PRESCOTT: Well I think everybody has been saying, you can't have anymore money until you look at what the modernisation. Let me come to your point. If you look at what Bain said, he said eleven per cent in two years, this is an agreement that is sixteen per cent in two years, no evidence of costing... HUMPHRYS:, no... PRESCOTT: ...wait a minute, it's quite an important point. If you are indicating you are not prepared to go down some of the routes that were put out by Bain, or an alternative which wasn't put in any of these documents, you are settling for a wage agreement on the basis of only talks about modernisation. We can't accept that. Second point is, unless you find out exactly how the deal washes itself and what savings you can make, some they might agree with, some they might disagree with - at the moment they seem to disagree with everything - then you will find if there is a shortfall. Now, if the shortfall was a million pounds for example and I had to find a million, it would be absolutely stupid on the basis of one million, I can have some... HUMPHRYS: ...what if it was a hundred million? PRESCOTT: ...that's precisely the big question for me. What is...if it was a hundred million? I can't just add a hundred million pounds to the agreement. If the union wants to get to sixteen per cent and twenty-five thousand, that's their aim and their objective right, as I understand it, it's still been forty per cent, but let's say that night they changed to twenty-five thousand and sixteen per cent. It may well be better washed over three years rather than two, I don't know. But I tell you what is quite essential to it, you better know the costs, the union don't know the cost, the employers don't know the cost, I am asked to sign that early hours of the morning an agreement that had no figures attached to it, that was a kind of blank cheque for me to sign. I said to the local authorities, you were signing up to a bouncing cheque with a bouncing cheque would be on us and the taxpayer would be concerned about one million, a hundred million or three hundred million. HUMPHRYS: Right, but you've said if they came along and said it would cost a million, fine, no problem, you could sign that... PRESCOTT: Well I mean that's using practical judgement. HUMPHRYS: Of course it is, exactly, but what I'm trying to get at is how much further than that you are prepared to go, because it may be that it's to be fifty million. PRESCOTT: I know, but that's the same question for every worker that comes along. All of the local workers, let's take the nurses. Everybody recognise they're an essential group of workers, right? If they walked out of their wards, know, there would be pandemonium and deaths and they don't, they don't. HUMPHRYS: But we are in the middle of a strike now, this why this question is so crucial. PRESCOTT: I know, I know, but it's, aye, it's crucial to all of the workers who are looking at this and saying "do I have to modernise and change and pay some, and settle for my pay?" Lots of workers have already done: the local authority workers paid out of the same pot. Nurses will be looking exactly the same, but when I hear some of the Trade Union leaders saying at the moment "we fully support this", they're the people who will be knocking at my door and be saying "well if you can do it for the fireworkers", 'cause none of them have said they're prepared to change their position - if you're the nurses negotiating at the moment as they are with Milburn, trying to get an agreement which involves productivity and pay, and that's about to be announced - won't they say "why are we doing all that if the Fire Brigade can say, we believe we're not going to do it with modernisation - pay us or leave it". That is not a reasonable position. HUMPHRYS: I completely understand the principle that you are setting out here, but you raise this question of - if they ask for a million, we could do that... PRESCOTT: No, you raised it and I.... HUMPHRYS: Well, I raised the question and you offered me a million.... PRESCOTT: Yeah, yeah. HUMPHRYS: Yeah, yeah. You raised the answer then, let's put it that way! And what I'm trying to get at is... PRESCOTT: I didn't offer you anything, I gave you the practicalities. HUMPHRYS: This is very true. PRESCOTT: Yes. HUMPHRYS: All right. You said a million quid and I said a hundred million. You're saying "no, absolutely, if it's as much as a hundred million, no deal". PRESCOTT: I don't know what the costs are and I would be stupid... HUMPHRYS: But it might... PRESCOTT: Let me put to you...I've done quite a few years' of negotiation, whatever people might say of me all of the time, sometimes I've been on the other side of the table, now I find myself on this one, and I would never actually indicate you were going to pay anything, do anything, when negotiations are on because... HUMPHRYS: But, what I am trying to establish... PRESCOTT: ...because what would happen is the unions would then basically say "well he's gonna pay, the argument is how much" like you're trying to get to. HUMPHRYS: You just said that. PRESCOTT: No, I didn't. HUMPHRYS: You've just said, we'll give you a million if it's a million, you said...well... PRESCOTT: Don't play around at the edges, you know what I mean about it. HUMPHRYS: No, I'm being very serious about this. PRESCOTT: What the public think of me and I'm supposed to be the one that is actually guarding their interests and the taxpayers' interests, if they said there's a million difference here, and it doesn't wash itself to a million. If I said to them it was four hundred million, they'd say "hang on, but it's not only the costs you have to find, it's the implication of this all across...sixteen per cent for everyone under those circumstances is sixteen billion pounds. It's a threat to the economy, it's a threat to inflation, it's a threat to mortgagers, which affects everybody, so I have to at least read an agreement, for God's sake... HUMPHRYS: All right... PRESCOTT: I don't even the document to look at, they tell me at 5.30 in the morning and by the way I was talking all through the morning, I see a little poster up in my fire station in Hull that apparently says "Don't honk support, you'll only wake up John Prescott". I was talking to all of them through the night, it's only idiot papers like the Daily Mirror that come out with such nonsense like that. Everybody was in that: the TUC, the employers, all those, were talking to me through the night. HUMPHRYS: But you weren't there and this is the point, you see, you say: 'talk, not walk' and that's been your mantra for a while. PRESCOTT: Absolutely and still is the case. HUMPHRYS: But what they're saying and you've heard Bill Morris say it, you've heard John Edmonds say it, you've heard John Monks say it, you've heard the whole..all the Trade Union leaders in the public sector saying exactly the same - what is the point of us doing a deal, going into negotiations with the best will in the world reaching a deal only for John Prescott then, or the Government then, to torpedo it. PRESCOTT: Okay, let's take some of them. Dave... HUMPHRYS: Dave Prentis.. PRESCOTT: Dave Prentis from Unison, John Edmonds, T&G, all of them were involved in the local negotiations that took place a few months before. HUMPHRYS: But I'm asking why you're not involved, if you're prepared to torpedo the deal you should be there shouldn't you. PRESCOTT: but wait a minute. All of them don't expect me to be involved in the negotiations, they're be the first ones to tell you that, right. And they all accepted it within the framework of public pay. Now, they come along to this one and all of them have got nurses, Dave Prentis has got nurses, they are the unions who will be saying to us "if you settle for this amount, then we'll be knocking on the door as well". HUMPHRYS: But there's a difference here, and the big difference is... PRESCOTT: Well, tell me the difference? HUMPHRYS: ...well, yeah, it is that they reached a deal, the public...the union in this case, the FBU and the employers reached a deal. Now you weren't there because your position has been, the Government's position all along has been "we're not involved in these negotiations". PRESCOTT: We are involved if extra public money is involved. HUMPHRYS: Absolutely, but the fact is that what happened was they did a deal and you said... PRESCOTT: John, go back to the original deal only a few weeks before these two strikes were running together, local authority workers and fire people, right, they left off to the end (sic), the local authority, the same unions you are talking about, they came along saying "can you finance by giving us some more money?" We were absolutely clear, "no, you cannot, you can only finance it within the pay". After all, we have put a lot of public service investment going on - reform and investment - you can't take it all away in wage payments, whatever those arguments and we've settled for more than inflation through all those workers. Now those...they accepted that argument. Why should I then, in the circumstance, with a document I can't see, and I did see the local authority ones... HUMPHRYS: Sure enough, point taken. PRESCOTT: ...wait on, I haven't seen it, they don't know the cost, I don't know the cost, and you sign up for it. If you felt so strongly about it, the TUC asked the Fire Brigade not to go on strike, I asked them through the employers not to go on strike, give us twenty four hours at least to look at the agreement. Now, why didn't they do that, after all, in the twelve day strikes, we reduced it down to two, and the union, I'm grateful, actually did reduce that. HUMPHRYS: Let's look at it... PRESCOTT: But John, why didn't they wait twenty four hours, then? HUMPHRYS; Well, let's look at it from their point of view though. What they're saying, and we're hearing about this man called Philip Bassett at number Ten in this context, and the context is this, that you are actually, and I quote, 'sabotaging' the government that is, not necessarily you personally, it might be other people in the government, are 'sabotaging' this deal because - all the points you've made to me throughout this interview, all these other people lining up for big pay increases. And what you've got to do now, the government has to look tough. If it doesn't look tough it's going to cost it dear, it could even cost it the next election if this thing gets out of hand. So you've got to look tough, therefore the deal is being sabotaged. That's the line and that's about it. Philip Bassett apparently wants a punch up with these unions PRESCOTT; Do you believe everything you read in the press. I've got to say..... HUMPHRYS; Depends what it is. PRESCOTT; Well, they said I was in bed, it was a load of nonsense. Well, wait a minute. The same people write these kind of stories because they like these conspiracies. The main players are myself, the Chancellor, Government and Prime Minister, right. Clearly we're into that. We're absolutely united. We were tough about the local authority pay by the way. We actually said, I'm sorry, you can't have any more money to settle, it didn't start with them. What has happened with the Fire Brigade, they've decided now, out of the same pot that pays the local authority worker, the social worker, the canteen worker, who are getting considerably less than the fire people right, settles for the fire people. So if you pay them more you've got less for other people, so that is the issue, not the conspiracy talks here. We have a united government position, we have made it clear, and let me say a personal experience, a personal experience which I imparted to Andy Gilchrist in our conversations. I know from my sea-faring days if you get into a conflict with government about public pay, it becomes more about the public pay issue. If anybody thought that it wasn't a public pay issue here when sixteen per cent for everybody means sixteen billion, governments have a responsibility to be fair, yes, for a deal for the firemen and we've laid out how that can be achieved. You've got a responsibility to be fair to other workers also, because we're the pay-master in regard to public services. But we have to be fair to the economy and the tax-payer. It's a difficult judgement. Can you imagine even if I'd seen the document at five-thirty. I got it at the office at seven-fifteen, they were out on strike at seven-forty-five. The best mind in the world, and I don't claim it, and that'll be another headline for the papers like, couldn't have assessed what that was. It took us a full twenty-four hours to find the cost, but can't sign up for those kind of deals. HUMPHRYS; Well, no, but the effect of all this has been one way or the other to consolidate the Trade Unions, particularly the Trade Unions in the public sector, against you. John Edmonds calls it a call to arms...he said...and of course John Monks himself has said all the public sector Unions... PRESCOTT: I think John Edmonds, but John...wait a minute, John Edmonds is in and out of every time and can dispute he's got about it (sic) doubt we'll get some adverts tomorrow. That's John Edmonds, he's on his last few months... HUMPHRYS: But he's not alone, he's not alone...John know, a friend of the Labour Government of this Government, John Monks himself says all the Trade Unions should support him. Have you really got... PRESCOTT: Wait a minute .....let me deal with that one, because you just move on from those points, John. You are usually fair, you are fair in this but John Monks says and claims I have a TUC policy. I am the General Secretary of the Trade Union Congress, they want to support the fire workers' case. Fine, that's his job. In fact, I heard him on television this morning saying that he didn't intervene as an intermediary and the Fire Brigade asked him to come in and if you talk about people asking to come in, if they were so doubtful why didn't they ring me up then, if that's the case? They ring for the TUC to come in and intervene on their behalf. HUMPHRYS: All right, but... PRESCOTT: And they did a damn good job, actually, they filleted the document! HUMPHRYS: ...the question is...but the question, the final question is this: have you got the stomach for a fight, not just with the FBU, but... PRESCOTT: (Laughs) HUMPHRYS: (Laughs). ...but...we'll accept that...but with the Trade Union movement as a whole, this is the point? Has this Government got the stomach for a fight? PRESCOTT: We've got the stomach for a fight for justice and fairness, fair to the firefighters, fair to other workers, fair to the economy. We have come through four or five years getting stability in the economy, you remember before, high inflation, high unemployment, high interest, we are not going to sacrifice that. That is the issue here, we will be fair to all, governments are expected to do that and this government will do that. HUMPHYRS: John Prescott, many thanks. And since it's probably the last time you'll be on this programme, many thanks for having been on so often. PRESCOTT: Why am I getting called up? HUMPHYRS: You're getting called up, you're being sacked. The programme comes to an end very soon, many thanks. PRESCOTT: Well I'm sad about that and it's wrong quite frankly, 'cause it's a damn good programme. HUMPHRYS: Thanks for being with us.
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.