BBC On The Record - Broadcast: 24.11.02

==================================================================================== NB. THIS TRANSCRIPT WAS TYPED FROM A TRANSCRIPTION UNIT RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT; BECAUSE OF THE POSSIBILITY OF MIS-HEARING AND THE DIFFICULTY, IN SOME CASES, OF IDENTIFYING INDIVIDUAL SPEAKERS, THE BBC CANNOT VOUCH FOR ITS ACCURACY ==================================================================================== ON THE RECORD RECORDED FROM TRANSMISSION: BBC ONE DATE: 24.11.02 ==================================================================================== JOHN HUMPHRYS: Good afternoon. How is the Government going to find a way out of the fire-fighters' dispsute. I'll be to the man at the centre of it all, the Deputy Prime Minister John Prescott. Can the Tories EVER again convince us that the economy is safe in their hands? I'll be asking the Shadow Chancellor Michael Howard. And what do Labour MPs think of the monarchy? You may be a little surprised. That's after the News read by Fiona Bruce. NEWS HUMPHRYS: Thank you very much. The man with the toughest job in politics right at this moment is John Prescott. I'll be talking to him later in the programme. And we'll be reporting on a survey we've done to find out what Labour MPs think of the monarchy. But let's go to the Conservative Party first. Next week Gordon Brown delivers his pre-budget statement. He'll have to admit that the economy is growing more slowly than he'd expected. And that could mean higher taxes and more borrowing. Nevertheless Mr Brown's credibility as Chancellor seems to be as strong as ever. But what about the Tories? Well it's ten years since Black Wednesday... the day the Conservative government was humiliated when the pound was forced out of the ERM. They've never recovered from it. Pretty well every test of public opinion since then has shown them lagging behind Labour when we're asked who we trust to run the economy. The ace card they had been able to flourish for so many years had been trumped. If they are ever to return to power they know they must regain the public's trust in this crucial area. Can they? Indeed are they making any real progress? I'll be talking to Michael Howard, the Shadow Chancellor, after this report from Terry Dignan. TERRY DIGNAN: Where is Michael Howard heading? On Friday he was in his Folkestone constituency visiting schools and GP surgeries. At the last election many Conservatives believed the party ignored public services. They want the shadow chancellor to put that right. But it may mean downgrading some of the party's most sacred beliefs. When Michael Howard was first elected here in Folkestone nearly two decades ago he was an ardent Thatcherite - a low tax, low spend Conservative who also believed that government should regulate private enterprise as little as possible. But has the time now come for him to admit that these policies are nowhere near as popular as they once were. That's the question which goes to the heart of the debate over how the Conservatives can regain their reputation for economic competence. Trust in the Conservatives to run the economy competently collapsed after the early nineties. In September 1991 ICM asked who had the most successful economic policies? The Conservatives won the support of forty-one per cent of voters, Labour just twenty-four per cent, the Liberal Democrats eleven per cent. But since then the big two parties have swapped places. In a recent poll on economic competence the Conservatives were down to just twenty per cent, Labour up to thirty-nine, the Liberal Democrats way behind on eight. Some former Conservative policymakers believe these figures are disastrous for the party's electoral prospects. DAVID MAWDSLEY: Since the early nineties, I mean ever since the ejection from the ERM, the Conservative Party Party has trailed the Labour Party on economic competence and that's absolutely vital because without a lead on economic competence, I don't think the Conservative Party stands a chance of winning the next election. DIGNAN: Last week children at Mandella Primary walked to school in a campaign to encourage parents to leave the car at home. With them, local MP Michael Howard, who says public services like education are now his priority, not cutting taxes. But with taxes rising under Labour, is this the time to back away from a tough tax cutting message, asks a right of centre think tank? SHEILA LAWLER: The message which Conservatives wrongly to my mind took from their defeat in the 1990s was that they had to be more cuddly, more apparently voter friendly and stop giving these hard messages. I think that the party should be bold, should go to the country promising to cut taxes, to lower public spending, that this will be good for the overall economic prosperity of the country and good indeed for the Conservative Party. DIGNAN: The children of Mandella Primary arrive safely. The Conservatives want better value for the money spent on schools and hospitals. But reforming public services would also allow the Tories to reaffirm their commitment to cutting taxes, says one of Michael Howard's economic advisers. PROFESSOR PATRICK MINFORD: So I think the first thing the Conservatives should do is focus on the efficiency of delivery of public services, not let's throw money at it which is wasted, let's spend money that is necessary and make sure it's effectively used and that will provide economies to cut taxes. DIGNAN: But is taxation such a big issue for voters? When asked by the polling company Mori in October of this year what were the most important issues facing Britain today, forty-five per cent said the National Health Service, thirty-five per cent defence and terrorism, thirty-two per cent education, twenty-eight per cent crime. But in the same poll a very small number of voters - just four per cent - said tax. Some Conservatives argue the party has little to gain - and much to lose - if it promises to cut tax. MAWSLEY: If the Conservative Party wants to be taken seriously on its pledge to put public services first, which is what Iain Duncan Smith has said his mission is to do, I think it has to make a choice, and I think it will make it very difficult for them to say that on the one hand and on the other hand to be offering billions of pounds of specific tax cuts. DIGNAN: Michael Howard was a member of a Conservative government which reformed the National Health Service. He believes GP practices like this one became more efficient as a result. He's promising further change should his party win the next election. But one of his predecessors as Shadow Chancellor warns that reform will be expensive and will leave no room for tax cuts. FRANCIS MAUDE MP: We do have to stress that the demands of the public services, which are failing in this country, which urgently need structural reform which will itself cost extra money, will demand extra money in the short term. Therefore we should make it clear that we would not expect to be able to cut taxes in the first parliament after being elected, I think that's a perfectly reasonable thing to say. DIGNAN: At the last election Jonathan Marland was a Tory candidate. He's also been an advisor to the party on its relations with business. Until these improve, he says, the party won't win back its credibility on the economy. JONATHAN MARLAND: Well I think the business community lost faith with the Conservatives after the last election. The party is clearly making noises about reducing the burden of tax on businesses and also regulation, but I think businesses want them to be more specific. DIGNAN: Jonathan Marland runs Janspeed which makes car exhausts in Salisbury, Wiltshire. Although he praises many Labour policies on enterprise he criticises business tax rises - by forty-seven billion pounds under Labour, claims the employers' organisation, the CBI. Jonathan Marland made his fortune in the Thatcher years. He wants a return to a regime of low business taxation even though some Conservatives argue this would put Michael Howard in a dilemma - where would the money come from to pay for such a policy? MARLAND: Well as a businessman I very much hope we'll got back to tax regime that the Conservative Party started in the early nineties which was a much lower tax regime, lower National Insurance Contributions. MAWDSLEY: I think it is very, very debatable quite how high up the list of political priorities business tax cuts would sit, when compared with personal tax cuts, or more resources for initiatives on the public services such as law and order, in any list of priorities of what the next Conservative government would do in office. DIGNAN: Business thrives when government leaves it alone - that's a strongly held Conservative belief. A recent Institute of Directors' report says regulations and red tape have increased under Labour by as much as six billion pounds a year. Yet the Conservatives are unclear about which regulations they would scrap if they came to power. Companies like this complain bitterly about government red tape and they are pleased the Conservatives are now really laying into Labour over the issue. But so far Michael Howard hasn't explained how many government regulations he would get rid of - a dozen? a hundred? a thousand? Until he answers this question it's hard to see how the Conservatives can regain the confidence of business. Given their record, promises to cut red tape are certain to be greeted sceptically. MAUDE: People will tend to look back, particularly at the 1990s and see that the burden of regulation increased during that time. So, they're used to hearing politicians talking about cutting red tape and they're used not to believing it. So I wouldn't place very much store on a commitment to reduce regulation. DIGNAN: And anyway, many regulations are pushed through by the EU - so there's not much the Tories could do about them. MAWDSLEY: Lots of it emanates from Europe and you know, for some of this, we've given away the power to reverse this regulation and you know, no matter what the Conservative Party in government would want to do, it might not be able to reverse some of that regulation. DIGNAN: But what about regulations drawn up by the UK government? Meeting with his Shadow Treasury team ahead of this week's pre budget statement, Mr Howard warned the economy was slowing down because of the burden of red tape. Although his advisers want much of it scrapped, it's not clear this would be terribly popular. MINFORD: Well there's a mass of regulation, mainly concerned with the labour market that Labour has brought in and the damaging effect of that could be very large, so it could be reversed. Fairness at Work Act, has given a substantial new privileges to unions, I think those could be cut back. MAWDSLEY: The problem of course for the Conservative Party now is that businessmen need specifics particularly, they want to know what specific regulations, what specific red tape and bureaucracy is going to be cut by an in coming Conservative Party government, they're not persuaded by political rhetoric. To do that, the Conservative Party is going to have to tread on very, very politically sensitive terrain, because most of these regulations refer to employment law and health and safety at work legislation and that's very, very sensitive. DIGNAN: Back in Folkestone the outlook is less than favourable. It is for the Conservatives, too, unless they restore their reputation for economic competence. That could mean ditching policies which once made the party successful. But others have a different message for the Tories - be true to your core beliefs. LAWLER: You must get back to being the party of low public spending, low taxation and high growth, which is high prosperity, and as a party that has always been your message and when you abandon that message you really abandon the very basis of your raison d'�tre. DIGNAN: So where is Michael Howard heading? He says he won't tell us until closer to the next election. But time is not on his side. By then the electorate will want to know what the Conservatives would do if they were again given responsibility for managing our economy. HUMPHRYS: Terry Dignan reporting there. JOHN HUMPHRYS: Michael Howard welcome, I don't know whether you are going to answer some of those questions, we've been told you won't answer, we shall see, but... MICHAEL HOWARD MP: No shortage of helpful advice. HUMPHRYS: Lots of advice. You agree, I take it, that you are not yet trusted with the economy and you can't win an election until you are. HOWARD: I think we are still paying a high price for our entry into the Exchange Rate Mechanism, very ironic because everybody was in favour of what we did; the Labour Party supported our entry, Liberal Democrats, TUC, CBI, everybody thought it was a great idea, and also ironic because we are the only party that's actually learned the lessons of that and are determined not to take this country into the Euro but, of course, there are serious lessons to be learned and I think that people are going to turn with us, turn to us, and look much more sympathetically at what we are proposing as they begin to appreciate the scale of the present Government's mis-management of our economy and the way in which they are squandering the golden legacy which they inherited from the last Conservative Government. Let's look at just er, just er, one or two things. We've heard about the tremendous burdens that they are placing on business, huge burdens, fifteen billion pounds a year the CBI says, tax and red tape combined. And it's not as though we're getting anything for it; we produced figures at the beginning of last week showing that if you look at the Government's own targets, and their own assessment of those targets, they're failing forty per cent of the targets they set for the public services in 1998, seventy five per cent of the targets that they set in 2000, so they're not delivering value for money to the people of this country and we're producing figures today which show that if they properly accounted for all their borrowing liabilities, the PFI liabilities, the PPP liabilities, network, rail and all that, they are pushing at the very limit of what Gordon Brown says is a safe and sustainable level of debt, so the problems are mounting up as a consequence of actions this Government has taken and I think people are going to look much more positively and sympathetically at what we are arguing instead. HUMPHRYS: The trouble is, when they look at what you're arguing, they're entitled to say, well, actually, we're not quite sure what they are arguing. If you take tax, for instance, people don't know what you stand for. Iain Duncan Smith says, "maybe we can cut taxes", Oliver Letwin says "maybe taxes will actually have to go up" and that's why you don't have the credibility that you need. HOWARD: Very clear. We believe in the advantages of a local tax economy, we know that low tax economies are the most productive and dynamic the world over, and we know the damage that is being done, and Digby Jones of the CBI and others who have said it, from the burdens of tax on business, making business less competitive, affecting productivity, really making it much more difficult for business people to win orders and create jobs, so that's the way in which we approach these things... HUMPHRYS: But they don't know about your tax position...I mean... HOWARD: Well... HUMPHRYS: Iain Duncan Smith says...let me give you an example of why there is less credibility than there ought to be...Iain Duncan Smith says "under Tories, all public services will improve"...all of them, the whole lot: education, health, police and all the rest of it...and taxes will be lower. Now people don't believe that, they say we stopped believing the tooth fairy a long time ago, you can't do that. HOWARD: That's why we will convince people as we come forward with really detailed policies which will show how we are going to improve the public services. Now let me refer you to a sentence from Labour's 1997 manifesto... HUMPHRYS: I would rather you talk about your own policies... HOWARD: It's directly relevant to this. They said, in 1997, the level of public spending is no longer the best measure of the effectiveness of Government, and they were right. They've forgotten all about that, and if you ask them now how they're going to improve the state...the current state of affairs in terms of health or education or law and order or transport, all they can talk about is the extra money they're spending, we're spending billions more they say, but Patrick Minford was absolutely right in your clip, what we've got to show is that there's a better way of delivering public services, a much more effective way which will give this country the public services that we want and need, getting away from the centrally-driven monolithic status model which Labour is still devoted to and as we do the work on that and as we show people how we can do it, I think that they will see how in the medium to long-term, we may not be able to do it straight away... HUMPHRYS: Ah... HOWARD: But in the medium to long-term, we will be able to deliver better public services... HUMPHRYS: Ah, but that is... HOWARD: and lower taxes. HUMPHRYS: But that is exactly the point, isn't it, because Francis Maude said that yes, reform may very well work, but it will cost more in the first Parliament, in other words, what he is saying is we need to make it clear that there will be no cuts in taxes in the first Parliament, even if, indeed because of, the reforms that we want to review (sic), so you're acknowledging that, are you, that for the first Parliament, no cuts in taxes? HOWARD: No, I'm not acknowledging that at all and if Francis has done the detailed work which enables him to come to that judgement, I would be delighted to see it, but the honest answer to your question is that we do not yet know. We are doing the work on the public services, very detailed work, we will produce it all, we'll put it before the people and will cost it, and we'll say how we're going to finance it, and it is possible that in the, in the very short-term, because of the crisis that we face in the public services and because there may be transitional costs in moving to a new method of delivery, it may be that in the short term we won't be able to say we will offer you immediate tax cuts. HUMPHRYS: Short-term being a couple of years, which is what your official, well your official seems to be suggesting that... HOWARD: I don't know where that quote came from and it certainly didn't come from me. HUMPHRYS: So.....years.... HOWARD: I do not know the answer yet, but our policy and our approach is crystal clear: we believe in a low tax economy, we know that it's the most dynamic, we know that it delivers the goods for the people of the country who live in that kind of economy and we will get there as soon as we can, but we recognise that there's a crisis in the public services. We have ways, we have plans, of how to deal with that crisis, it may involve some short-term costs, and we won't shrink from them. HUMPHRYS: Right, business. You've got to win back the confidence of business leaders - business people, not just business leaders - all business people, and what they want to hear you talking about is precisely cutting taxes, cutting regulations as well - we'll come to that in a moment - but they want you to say "we will cut back business taxes". By definition, you're not going to be able to give them that promise, are you? HOWARD: Well, I don't know yet, but we will have to see, we will have to do all the sums. I think that it would be regarded as highly irresponsible of me, we're still probably two and a half years away from the next election, if I were to say "I know today that I'm going to be able to promise tax cuts at the next election". HUMPHRYS: Well, you've got to have a philosophy, haven't you? HOWARD: We have a philosophy, and I have explained the philosophy to you .... HUMPHRYS: But...without any's so difficult. HOWARD: No, no. I have explained the philosophy: we believe in low taxes, we continue to think that that is the best way of running an economy, but I have no idea what kind of fiscal situation we are going to be facing in two and a half years' time, I don't know how much worse the crisis in the public services will have got in two and a half years' time, so it would be very irresponsible for me today to say "yes, I am definitely going to be able to promise..." HUMPHRYS: Well exactly, so therefore... HOWARD: "...lower taxes at the next election..." HUMPHRYS: And if you can't....? HOWARD: I'm being prudent. HUMPHRYS: Yes, quite so and you've explained to us where prudence gets - or at least boasts of prudence can get you. The problem is you cannot promise them that, indeed you can't promise them anything and unless you can do that they're entitled to say, they are saying whether they are entitled to or not, they are saying: we don't trust this lot. And look at the result, twenty per cent confidence in their ability to handle the economy. How are you going to get out of that? HOWARD: I don't think that comes from anything I've said. That comes as was clear from your... HUMPHYRS: ...from a whole series of things. HOWARD: It comes more than anything else from our entry into the Exchange Rate Mechanism and the circumstances in which we left it. HUMPHYRS: But it's ten years ago. HOWARD: That's right, people have long memories about this sort of thing. Our philosophy is clear and as we get closer to the next election the practical implications of that and how we work them out in detail and what our proposals for the public services involve will be spelled out in great detail because I'm very keen that the electorate should have a real choice at the next election. That's what we're going to provide them. HUMPHRYS: Right, well, given this real choice then. I take your point about taxes, you can't do all the sums because you haven't got all the sums yet, or you haven't got all the figures yet. Regulations. HOWARD: Yes. HUMPHRYS Broadly speaking, we want to cut regulations. Well, every single Conservative government in my moderately long life has said we want to do that. We've seen the result of it, it hasn't worked, as we've just heard in that film. And again you're saying we want to do it without being specific. HOWARD: I am being specific. HUMPHRYS: Give me a whole raft. HOWARD: Okay. First of all people rightly say we weren't as successful at dealing with this as we should have been when we were in office. I accept that, but things have got very much worse. Last year there were.... HUMPHRYS: So what are you going to cut? Sorry to cut you short but I am looking for these specifics. HOWARD: There were four-thousand, six-hundred and forty-two regulations last year, new regulations, fifty per cent up on 1997. Now the problem is a systemic one. So we've got to make systemic changes. It's not a question of saying..... HUMPHRYS: Rhetoric, they'll say that's rhetoric. HOWARD: No, no, it's not rhetoric because I'll tell you what the changes are going to be. You can have sunset clauses in regulations so that they expire after a period of time, unless you start the whole process again. You can require government departments to reduce the number of regulations for which they're responsible year on year. You can exempt small firms from regulations, you can make the process of assessing the cost benefit impact of a new regulation independent.... HUMPHRYS: And you'll do all of that, you'll do all of that, that's a pledge, right. HOWARD: These are the kinds of ideas we are looking at which will actually reduce the number of regulations. HUMPHRYS: Alright. HOWARD: So I'm telling you how we're going to do it. HUMPHRYS: Right, let's turn then in the last couple of minutes to two separate subjects - the firefighters' dispute for a start - sixteen per cent they want, John Prescott - I'll be talking to him in a minute - seems to think that maybe that's a talking point at least. Would you give them sixteen per cent? HOWARD: And Gordon Brown has now ruled it out. They are, they are.... HUMPHRYS: Well we'll see. Hang on, before you attack them, you tell me whether you would give them the sixteen per cent. HOWARD: No, they are - the government has mishandled this crisis because that is what it is, in the most dreadful way. It is a shambles. The offer which was described by government ministers last week as uncosted, half-baked, irresponsible, a range of government ministers, a whole array of them were saying that. Now John Prescott says they were very close to a do-able deal. The truth is that the government can't have it both ways. It's either got to stay out of these negotiations and leave them to local authorities and say if necessary there's no more money available, or it's got to get into them and take part in them. It can't have it both ways and that's why we're in the shambles we're in. HUMPHRYS: And the other thought I wanted to put to you as former Home Secretary. Roy Whiting has been sentenced to fifty years in jail for that appalling murder. Your reaction to that? HOWARD: Well, I've no quarrel with the tariff which David Blunkett has set. It may very well be that I would have set a similar tariff if I'd still been Home Secretary. But, why do you think it's been announced on a Sunday? I think that's very strange. I champion the right of Home Secretaries to have this power. I agree with David Blunkett that Home Secretaries should continue to have this power, but it doesn't help our cause when serious announcements of this kind are released on a Sunday instead of being told first to Parliament as part..and released as part of the government's news agenda to try and distract attention from the mess the government's in on the economy, on the firefighters' strike and on so many other issues. HUMPHRYS: Michael Howard, many thanks. HOWARD: Thank you. HUMPHRYS: And now for a look at some of the other main political stories of the last week. Britain's most senior military man, Admiral Sir Michael Boyce, sent a shiver through the government with a warning that the Armed Forces can't cope ADMIRAL SIR MICHAEL BOYCE: I am concerned on, if you like, the military effectiveness of our Armed Forces; and secondly I am concerned with the impact on our individuals who are helping out in the fire-fighting situation. HUMPHRYS: It put his political boss, Geoff Hoon on the spot. Are we prepared to cope with a terrorist attack? The Tories think we're not and Iain Duncan Smith wants a Cabinet Minister responsible for Homeland Security - Tony Blair said no. David Blunkett wants lots more laws changing our legal system. He says it's out of date. He's been accused of undermining our civil liberties. And Tony Blair's won an award - Parliamentarian of the Year. The Spectator editor and Tory MP Boris Johnson didn't seem too embarrassed about it. BORIS JOHNSON MP: He can do cool, he can do Churchill and as one judge put it he can do a cool version of Churchill. HUMPHRYS: One of the Labour's most respected think tanks, the Fabian Society, is examining that politically taboo subject - the future of the monarchy. It will report next spring. But we've been doing a bit of work of our own on it. We've approached more than a hundred Labour MPs and asked them what they think of some of the options that the Fabians are working on. As Gloria de Piero reports, the result of our survey will alarm Buckingham Palace, upset the nation's monarchists and hugely embarrass Tony Blair. GLORIA DE PIERO: It was just a few months ago that the nation celebrated the Queen's fifty year reign over us. But a poll last week showed even lower public support for the royals than at the time of Diana's death. An embarrassing court case, allegations of rape and rumours that you're raising cash on the side, are bound to spoil the festivities. PAUL FLYNN MP: It's an extraordinary end to a wonderful year when the royal family, the monarchy, had been promoted and the press and public had been very kind, but suddenly it all collapsed in ruins and we had these stories that are more reminiscent of events in a porn movie, or of the fencing that takes place in an Arthur Daly shop than a group of people that we are meant to look up to and respect. DE PIERO: On The Record asked 101 back bench Labour MPs "how much, if at all, do you believe that recent events have damaged the royal family?" 56 said a great deal, 36 said a little, just 9 said not at all. Even the best parties have to come to an end and this one ended pretty abruptly, aided by the lurid headlines detailing the unconventional comings and goings at the House of Windsor. It's not just members of the public that are getting fed up, many on the government side of the House are now saying the monarchy has to change. We asked our sample of Labour MPs "which of four options comes closest to your preference for the future role of the monarchy?" The 'no change' option was favoured by just 7 of the 101 and some of those supporting the status quo seemed to do so for pragmatic, rather than principled, reasons. KATE HOEY MP: I don't find any appetite for any constitutional change relating to the monarchy in my constituency. Most of my constituents would much prefer us to be worrying about, you know, they're worried about how to get a job, how to get their children educated, how to get round London, that kind of thing, it really isn't an issue, DE PIERO: The level of support for the Jubilee led the Prime Minister, privately of course, to express his unease at such enthusiastic embracing of a deferential age. The Jubilee year provided the perfect stage to explore ideas about a modern monarchy for the Labour affiliated Fabian Society. They're discussing all the options - leave it alone, make cosmetic changes, restrict it to a ceremonial role or declare a republic. MICHAEL JACOBS: I do think that people will look at this and over the last few weeks and think maybe reform is the option that at least we should be properly debating now. I think some people will feel there simply needs to be some kinds of cleansing process, that something rather serious has happened, and there needs to be, something has to be done and that I think a lot of people in the public, but also a lot of parliamentarians will now be feeling. DE PIERO: Yes it was spectacular but it was expensive too. Some of the cost of the Jubilee - nearly half a million pounds - was borne by the civil list - that's the �7.9 million a year we give to the Queen. One of the options we asked MPs to consider was cutting this back which in turn would reduce the money available for the Queen's extended family, for her staff and for a suitably regal lifestyle. This might help to modernise the royals but it would leave untouched the Queen's constitutional role. Asked if the monarchy's constitutional powers should remain but the civil list be reduced significantly, 15 of the 101 MPs we spoke to agreed. JACOBS: It's essentially the kind of reform that would leave the monarchy more or less unchanged, so it would be things that would gain the monarchy some degree of public support that it may have lost, for example, over the last few weeks. So for example, reducing the number of members of the royal family who receive the so called civil list money, money from the tax payer and clarifying their duties and roles. DE PIERO: Laws devised in the 16th Century still govern the way the monarch reigns and that's what prompts some MPs to say the royals must move with the times TONY WRIGHT MP: We've known for years the kind of things that we needed to do to the monarchy to bring it up to date, and make it work in a democratic age. I mean I can give you the whole list, I mean it means stopping the discrimination against women, it means stopping discrimination against Catholics, it means culturally sorting out the, you know, the double barrel flummery that surrounds the royal family. DE PIERO: A large number of the MPs that we spoke to expressed a desire to reform the monarchy radically and strip away the Queen's Constitutional powers. Among other things that would mean no royal assent to laws, no Queen's Speech to announce the legislative programme, and no Parliamentary oath of allegiance - keep the pomp and circumstance but lose the political power. PROFESSOR STEPHEN HASELER: The monarchy in this country is above the law in the sense that power and authority technically flows from the crown downwards, the government is Her Majesty's Government, the courts are Her Majesty's Courts, judges take oaths of allegiance to the Queen, so in a very theoretical sense, power flows down and authority flows down from the crown, and that is quite important in the way the country is run. DE PIERO: Political power in this country is formally exercised by the monarch through Parliament. It's Her Majesty's Parliament and that's why she announces the government's legislative programme. It's this constitutional power that grates with a large number of MPs. ACTUALITY. DE PIERO: We asked "should the monarchy's constitutional powers be cut but the ceremonial role remain?" and 44 out of the 101 Labour MPs agreed. JANE GRIFFITHS MP: We live in a parliamentary democracy and I find it difficult to see why a hereditary monarch should have political power effectively, which is what she does have. I have no difficulty with the way she exercises the power she has as head of state but I'm not sure that as she's a hereditary monarch she ought to be doing so. It's old fashioned in its feel and I certainly find as a Member of Parliament, I feel slightly demeaned by having to trot along and listen to her majesty. Her majesty I'm sure is a wonderful person but I have to trot along and listen to her, it' not the government. DE PIERO: Exercised through the Prime Minister, the Queen has prerogative powers - remnants of the immunities and authorities possessed by feudal lords - so in some matters the Prime Minister can act without consulting parliament. PROFESSOR HASELER: Two aspects of the royal prerogative powers are extremely controversial actually, but are there and are real. One is the ability for the Queen to declare war without reference to parliament, another is the ability of the Queen or the monarch to ratify, not only sign, but ratify treaties. FLYNN: We are in an extraordinarily unhappy position about declaring war and making other major decisions. We flatter ourselves that we're a sophisticated democracy, but in these most important of all decisions, MPs have no voice and no vote and that is a nonsense and a constitutional outrage that we have to correct, if we're going to become a modern democracy, DE PIERO: This concern about the constitutional role of the monarch is compounded by the fact that the Crown is handed down the generations, through the male side of the family of course. A surprising number of Labour MPs are prepared to commit an Act of Treason by calling for a Republic. They believe it's simply unacceptable to choose a head of state by birth rather than election. In our survey of 101 Labour MPs we asked if they felt that the monarchy should be abolished and replaced by a republic - 35 said yes. FLYNN: What we need as a democratic country is the ability for everyone to have the chance of being head of state and to have a head of state who will take on a Prime Minister who is acting in her or his own interests and against the interests of the country, so we do need this strong character, but I believe choosing it on the hereditary principle is all wrong DE PIERO: This feeling is intensified by concerns about the next in line to the throne. On the weekend of the Countryside March a letter to the Prime Minister was leaked in which Prince Charles agreed with the Cumbrian farmer who said "if we as a group were black or gay, we wouldn't be victimised". MPs are concerned that the heir to the throne has a habit of expressing views - particularly on rural issues - and that this blurs the line between head of state and political participant. FLYNN: I think Charles is a well meaning but deeply unhappy man who's had a tortured marriage and now spends his time as Mr Angry of Highgrove, writing letters, some of which are very sensible, some of which are eccentric and some of which are barmy and unfortunately he's put himself in a position where he cannot be monarch and be both above politics and be intimately involved in dozens of political issues, the two things are not compatible. WRIGHT: He strikes me as being someone who is both you know decent and dotty in equal measure. Now that's what happens when you have a monarchy, you take what comes along. I think you get in to dangerous waters though when people do start thinking they know what you believe in and when you do start sounding off about issues of the day. So I'm not surprised that it was said, whether true or not, that the Queen was not amused by some of those letters from disgruntled of Highgrove, because if you go down that route, you put the monarchy into peril. DE PIERO: Labour MPs seem convinced that the party's over for the royals. In our survey of 101 backbenchers a massive 79 said that the monarchy should have no constitutional power or even be abolished. With this level scepticism about the monarchy brought to a head by the recent royal revelations it could be a while before the Windsors need to get the party poppers out again. HUMPHRYS: Gloria de Piero reporting there. 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. HUMPHRYS: You can have your say on the firefighters dispute on a BBC ONE special programme tomorrow night at half past seven. To put your questions to firefighters leaders, the government and the employers, you can call 08705 122212 and that's it for this week. Don't forget about our website, we'll be back at the normal time next week. See you then, good afternoon. 27 FoLdEd
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.