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ON THE RECORD
JOHN PRESCOTT INTERVIEW
RECORDED FROM TRANSMISSION: BBC-1 DATE: 28.11.93
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JOHN HUMPHRYS: Well John Prescott you've criticised
David Hunt for suggesting that there are still going to be at least two million
unemployed by the turn of the century which suggests that you think it's going
to be better than that..it would be better than that if there were a Labour
government. How much better?
JOHN PRESCOTT MP: I said that two and a half million which
apparently they've estimated for in their social expenditures and what Mr
Clarke seemed to be indicating to the IMF when he made the speech. We think
that level is far too high and you could have a lot lower level of unemployment
if you were to adopt certain measures at the moment. Even with the
government's own package of measures you could do that, within its own
financial framework. Now that could be a start. But let me make this
absolutely clear, it's good that John Smith has now reintroduced into our
debate the fact that governments have a responsibility, as we said in 1944 in
that White Paper, to maintain and sustain a high level of unemployment. That
means we have to start rethinking some of our thoughts about how you actually
achieve that. And the government itself at two and a half million, we have to
say that's far too high and if it was prepared to order its finances in a
different way, to begin to do some of the infrastructure expenditure using
public and private money that we've talked about, we can do that. But when I
hear people saying where are you going to get the money from? It does cost
thirty billion pounds to keep our people on the dole wasting away doing
nothing. It shouldn't be too bad for us to actually say isn't it better to put
them back to work. That's what Keynes and that's what Beveridge said in 1944
and that's now what we're about to do and to look at those priorities.
HUMPHRYS: Alright, lots of points in that, we'll
pick them off one at a time. But let's deal with this first point. Beveridge
reckoned three per cent was about right, what do you think is about right?
PRESCOTT: Well he said the importance of two and a
half - three per cent was that you maintained a high level of unemployment in
order to justify the welfare expenditure on that welfare state - work and
welfare. I don't know what level we're likely to get to but I tell you this:
if we're going to reduce it to the levels below two million and get onto that
kind of stage, you've got to have a fundamental change within the labour market
itself and our whole attitude to....
HUMPHRYS: ...you must have some sort of... you
must have some vague idea of....
PRESCOTT: Well I'm afraid what creates jobs
is a number of things, if you've got to have a small capacity in our industry
which Gordon Brown keeps going on about, it is difficult to get them to
increase their actual job creation programmes. So the targets that we would
aim for which I think governments must aim for is to reduce it. That's the
first thing.
Secondly John, I'm not setting the
targets, I've only just been in the job a few weeks, you wouldn't expect me
to....
HUMPHRYS: But you can't go on saying that...
PRESCOTT: But I'm afraid I will go on saying
it while I continue...
HUMPHRYS: .....before as well.
PRESCOTT: I know but at that stage we had one
million jobs we said would be produced in two years of a Labour government.
HUMPHRYS: And you couldn't do that.
PRESCOTT: Well we weren't elected.
HUMPHRYS: No, no, but you couldn't find a way of
doing that on paper.
PRESCOTT: No, no, you're absolutely wrong, we did
actually produce a programme. Curiously enough, I've got the figures here
which the government then went on after that election to produce one point
three million jobs. The trouble is they pumped so much tax into the economy we
had a crisis again and they had to then create unemployment of an extra million
unemployed to actually deal with that problem. So the important point is very
important there John. Governments can if they wish then secure higher levels
of unemployment than we have at the present time. It is a judgement whether
you think it's a political priority. I don't believe it is a political
priority of this government 'cos its political priorities are more to do with
reducing taxes for the next election, to get the economy into that stage and
maintain high levels of unemployment to justify a massive..swingeing attack on
the welfare state.
HUMPHRYS: Alright but it is a political priority
for you, indeed, it's an absolute commitment...
PRESCOTT: It is yes.
HUMPHRYS: ...from a future Labour government and
you're telling me that you don't have any kind of idea what - I'm not asking
you for a commitment for a specific figure, I'm not expecting you to say...
PRESCOTT: Well you did, that's exactly what you
said.
HUMPHRYS: No, no, no, I said some sort of target,
I didn't say is it going to be one point, three four million new jobs or one
point, three two million new jobs, I asked you for a - what the Americans call:
(a hateful phrase) "ballpark figure". You must have something in..
PRESCOTT: No, you can hang on for the target
figures because why people have to sit down and talk is to look at what
measures we're going to do on investment, on in training, we have the worst
trained labour force of any developed economy, we have the lowest levels of
investment we've had compared to most of our major competitors. You've got to
get that moving again. So it will be come in phases, the first phase of any
employment programme will be to have a look at what you can do to get people
immediately back to work - both in training and I heard people talk about an
awful lot of money will be needed for training, that's true but what did this
government do in the last few years? It scrapped the training boards, it
scrapped the levy system, twenty six boards have gone. We had the disgraceful
situation, the privatisation of ASTRA (phon), so that now we have something
like two hundred thousand apprentices and Germany has one million apprentices.
I mean they have ten times as much of what we have - no, sorry, it's two
million of them.
HUMPHRYS: Alright...
PRESCOTT: No, wait a minute, the important point
is there, you can't then begin to say there should be a levy on training. We
should re-establish labour training boards, if you like, or training funds, so
that we get the resources which industry must begin to bind to invest in skills
because what's strategically wrong about this government is that it's decided
to invest in low pay, low skill, there's no future for us in that. We have to
be in a high skill, high tech, high educated training and our resources are
nowhere near necessary to meet those requirements which will sustain the levels
of employment moving towards full employment. So the first stage is to move
for phasing in people, long term employment, start the training programme, then
the infrastructure programmes. Gordon Brown's already spelt out in his paper
that we can start doing, our alternative in this budget, and then make the
major, funadamental investment requirements and strategic changes that are
necessary to move to the next stage of full employment.
HUMPHRYS: That is a commitment, isn't it, on the
long term unemployed, you are committed to finding either a job or a training
place - quality training - for every single....
PRESCOTT: Quality training.
HUMPHRYS: Quality training, okay.
PRESCOTT: Not the skivvy schemes the government
have given us.
HUMPHRYS: Okay, quality training for every one of
those one million or so long term unemployed.
PRESCOTT: That's over a period of four or five
years of a Labour government right.
HUMPHRYS: So it's during a lifetime of a Labour
government?
PRESCOTT: Yes.
HUMPHRYS: And that's an absolute commitment?
PRESCOTT: We're giving a commitment to give all
those people on long term unemployment that we will put them into some form of
training or job. That has to be a commitment for us, over the period of
government right. Gordon Brown has announced what we would do in the first
year as an alternative in the budget. That makes some step towards making
these kind of figures....
HUMPHRYS: But you'll accept fairly modest steps?
PRESCOTT: Well they are modest, yes, because the
constraints in our economy after fourteen years of this government are very
very considerable because we haven't done the investments.
HUMPHRYS: So a few modest steps in that first
year. You're now left with three or four years to create jobs or real training
places for close on a million people. Without reflating the economy?
PRESCOTT: Well, I mean, the training of the
economy... the training for people in the economy, something like two or three
years, it does take a long time to give proper qualifications to people and
proper training which is needed. Our labour force now is much more flexible,
much more part-time than full time. There are many major problems. That I
think is creating problems for us, as Paul Gregg was pointing out, of many
unskilled people living on the dependency of the welfare state and not being
able to break out of that because the unskilled kind of skills that they have
means they can't make a proper contribution to getting a job and that's a real
problem. We have real problems in the market...the labour market itself which
we have to address ourselves to.
HUMPHRYS: But you'd accept that to create that
sort of number of new jobs or to pay for those real training places, the
economy's got to be producing more, hasn't it, and you've got to reflate the
economy. In short, you're going to have to borrow more money, aren't you, in
order to make all of that possible?
PRESCOTT: We certainly need to see more growth in
the ecomony and that's the argument in Europe where Mr Clarke and others are
actually now arguing with Delors, for example. They're suggesting that they
can pump more money into the economy, the traditional way of getting growth in
the economy through infrastructure programmes. We think that's a very good
idea and what we also like about it is that a European facility means it
doesn't come on our public sector borrowing requirement. That's why Mr
Clarke's interested in it.
HUMPHRYS: ......slight of hand in that isn't
there.....
PRESCOTT: Nevermind, whatever it is, they can have
an argument and we want to change those silly rules but for Mr Clarke at the
moment, can take some European money, that can be lever for private sector, we
can start some of these major infrastructure programmes at the moment. If you
look at the housing, we can take the four billion housing receipts we have at
the moment, they are already in the local authority hands, take the quarter of
a million building workers off the dole, begin to train in the industry...
HUMPHRYS: Oh not quite, not quite, this is all a
bit sweeping, isn't it?
PRESCOTT: Well, I don't know whether it's
sweeping, that's actually fact. I mean that's the amount of people we've
got of the unemployed who came from the building industry, from the building
industry, yes on the dole.
HUMPHRYS: Indeed. But by simply using those four
billion receipts, housing receipts
PRESCOTT: Oh, no. I said: take some of the
building workers and we would take the receipts. So, the money is there, the
need for the housing's desperately there and the workers are there. What we
need to do and what we're beginning already to see is that many of those
building workers are not trained.
HUMPHRYS: Right.
PRESCOTT: Even in this recession period, we're
short of bricklayers, plasterers. Now, we need an emergency training programme
to bring them together. Now, the money's there, the unemployed people are
there. We'll reduce the public's borrowing requirement because we take them
off the dole. Now, that's a classic example of how we train, meet a need, have
an industry that is spread throughout the country and begin to get people back
to work. And, the other attraction is it begins to attract unskilled workers,
of which we've got to direct some of our training programme for.
HUMPHRYS: But, you're telling me that you can
achieve all this without borrowing any extra money? Without reflating the
economy, at all?
PRESCOTT: Well, there'll be bits and bits, won't
there?
HUMPHRYS: Well, right. But, that's not going to
do the job you want doing, is it?
PRESCOTT: If you, in fact, take...Wait a minute,
the Government's already using Capital receipts, actually, to put with building
workers together for jobs. It only uses twenty-five per cent. We would say we
would have a much more ambitious way of phasing out that money. So, the
Government does that. We would do it. We would use the monies now to get them
back to work. And, that's clearly there for us to do. We just do it in a more
ambitious way.
HUMPHRYS: Yeah. But, this is the whole point,
isn't it? I don't think there's anything the matter with it. I'm simply
suggesting to you that it doesn't go far enough. You're talking about a
massive ... What was Gordon Brown's quote? "Hugely increased provision of
training and retraining". Hugely increased. You wouldn't deny that that is
going to cost massive amounts of money?
PRESCOTT: But, it doesn't all have to necessarily
come from the Public Sector Borrowing Requirement, does it?
HUMPHRYS: But, a lot of it does. Are
you-what-well, let me finish the question.
PRESCOTT: Sorry.
HUMPHRYS: Are you prepared to borrow in order to
retrain?
PRESCOTT: No. Let's take the training equation.
What has happened with the Government, they've released industry of their levy
payments. They've abolished the twenty-six training boards, right
HUMPHRYS: Yeah.
PRESCOTT: So, Industry doesn't pay it. So, the
taxpayer has taken on the full burden of Training. So, the Government is
constantly, actually, offering skivvy kind-of training 'cos it can't afford the
proper training. We have to be very clear. We have to say to employers: like
everywhere else in Europe, you have an obligation to invest in people. We are
going back to the levy system. It is a charge because it is an investment. It
isn't a cost. You're going to have to meet the requirement to train your
people, as every other country does.
HUMPHRYS: You know, as well as I do, that people
can get out, companies. if they choose, can get out of paying that levy in
all sorts of ways. They can say that ninety per cent of their personnel costs
- put it down to Training. You know that that can be done.
PRESCOTT: Well-well, you can set targets easily
enough for that. Why is that just the characteristic of the British system,
which it has been under those training boards, I'm bound to say, in the past.
But, it isn't in Sweden, it isn't in Germany, it isn't in France, which train
ten more times their youngsters. That they're unskilled, are without
qualification - in Germany, it's twenty-five per cent. In our country, it's
sixty-five per cent. It's an absolute disgrace.
And, if you don't deal with the seed
corn - train our youngsters - and the long term unemployed, offer the
opportunities for people who are locked away on Welfare benefits, because
they're unskilled and have nothing to offer to provide for a job. We have to
break that. That's the fundamental change that is necessary.
HUMPHRYS: And nobody in your Party would argue
with that but what a lot of people-
PRESCOTT: Why are you arguing with it?
HUMPHRYS: Well, I'm not arguing with it. I'm
putting alternative points. That's different. What a lot of people in your
Party would argue with is that, here you are, John Prescott, refusing to say:
yes, of course, we'd borrow a bit of extra money in order to push these
programmes through, because I'm a Keynesian. You've said you're a Keynesian,
you've written that you're a Keynesian and that's the way to do it.
And, what Keynes was about - if he was
about anything at all - is investing in order to get things going. And, you're
not telling me- you're not prepared to say-
PRESCOTT: Well you're not listening to me. I'm
saying that you can get-
HUMPHRYS: Well, alright. Straight question, then.
PRESCOTT: Well, I mean, that's the kind of answers
you want. You can, actually invest it.
HUMPHRYS: That's not an answer.
PRESCOTT: Well, listen to the one I'm giving you,
then. Let the audience make the judgment, as to whether it's relevant to the
question.
HUMPHRYS: Alright, alright.
PRESCOTT: What I'm saying is: if you've got two
hundred and forty million pounds which the Government billion pounds is
spending on it programmes at the present time - right? If you order that, in a
different way, you can put that kind of resources to investment.
HUMPHRYS: So, the answer's No, then, isn't it?
PRESCOTT: You can get-No. Of course, it will
increase the amounts of money that are, actually, available for job audits.
That is, certain amounts of expenditure can produce more jobs than others. Let
me put a quick example. I've given you Housing as one. I've given you another
one, for example, on buses. If you decide you want to privatise the buses,
then, you set it out and you deregulate the industry, what happened then is
that most companies managers' bought them, had no money for buying buses and we
saw a reduction in the bus building manufacturing from seven thousand buses a
year to three hundred.
Now, if the Government did that to save
a hundred million in subsidies to the buses, it wiped out our bus building
capacities.
HUMPHRYS: Right.
PRESCOTT: If you change those orders of
priorities, we'd have more for Manufacturing, more for jobs, more for Training,
than a silly ideological nonsense of providing a privatised bus service that
costs more and doesn't meet 'alf people's need. That's the kind of difference
you can make.
HUMPHRYS: Let's run through a few quick
suggestions - ways of creating new jobs. Thirty-five hour/four day week. Good
idea?
PRESCOTT: Well, it has been, for some companies
but you can't apply it, as a rule.
HUMPHRYS: No. But, is it a good idea?
PRESCOTT: It's a good idea in some companies.
They're doing it now because they've been able to increase the amounts of jobs,
greater productivity that has come from it and some companies have already said
it. But, you can't apply it right through the market itself.
HUMPHRYS: No, but would you offer incentives to
those-
PRESCOTT: Ah, yes.
HUMPHRYS: -companies. So, that's one way you'd
create new jobs.
PRESCOTT: Well, Government do it now with the
Welfare Payments, for example, by offering companies ten pound on something
while Europe is now offering a social fund to offer better flexibility of work
practices, that gives greater productivity and employs more workers. I think,
the balance between the idea- you know, the five-day/forty hour week for forty
years is going to change. There's no doubt about it.
HUMPHRYS: You've said, in the past, that's gone.
The forty hour week for forty years is gone.
PRESCOTT: I believe it's gone and it's going.
And, if you look at the levels of overtime and the actual part time Labour
problems in this country, I do think you could, probably, get a better mix of
full time employment, because, at the present stage, as Paul Gregg was pointing
out, it's low pay, part time work, which is what's been growing in Britain.
You force them to live on the dependency of the Welfare State. Then, we have
to raise the money to pay thirty billion pounds for those on the Dole.
HUMPHRYS: So, you-
PRESCOTT: If we organise that much. Well, if we
organise those things much more effectively. John, I've always said, I'm open
to every new idea. If we're to get our people back to work, I'm prepared to
look at anything that will do that, to see that it's fair, rather than the
skivvy low pay schemes that we've had for this Government for the last fourteen
or fifteen years and unemployment continues to go on, on and on. And, we've
ended up now appealing to people abroad: come invest in Britain, 'cos the low
skill, low rights for workers and the worst future for us. We can't possibly
survive like that. A great, proud nation like ours that used to be the centre
of manufacturing. We must go back to having confidence in ourselves, in high
investment, high education, high value production. That's what we've got to
do.
Not to the tourist centre of the world.
HUMPHRYS: Some people might listen to you and say:
I don't like this idea of being restricted to a thirty-five hour week. Well, I
want to be able to do my overtime. I want to be...and for the bosses.
PRESCOTT: Fine and I'm sure they will. And, they
founded in those companies in ... which Pauline Green was talking about, on the
Intro, that they had some resistance when they saw it and looked at it. And,
they found more people were employed, they, actually accepted it. In some
areas, they've actually took wage cuts. And, I'm not advocating this, at the
moment. It's horses for courses. And, they want it to be negotiated between
the social partners, in this sense. The employees and the employers.
And, they found that to be acceptable
because they traded some leisure for cuts. Now, I don't know. It varies from
industry to industry.
HUMPHRYS: But, see, there is a difference.
PRESCOTT: But, I'm quite prepared to look at these
possibilities, if we want to get one third-if we want to get three million of
our own people back to work, instead of wasting away on the dole. That's my
obligation.
HUMPHRYS: You'd be prepared to legislate for that
kind of ....
PRESCOTT: No. I didn't say that.
HUMPHRYS: Well, you said: look at. What is the
difference?
PRESCOTT: Well, I mean-well, I mean, I thought I
made it very clear. These companies have, already negotiated-
HUMPHRYS: Some have, some have not.
PRESCOTT: Well, that's not the total solution to
the problem, John - that's why.
HUMPHRYS: I didn't suggest it was. I suggested
this was one way of approaching it.
PRESCOTT: No. But, you don't have to legislate
for it. That's the political point - you have to legislate for it. Well I'm
saying to you: let us be open in our approach to the whole matter of way hours
are worked, the combination between full time and part time work, the
possibility that everybody must look at their situation and say: are we
prepared to tolerate three million on the dole? Can we afford paying massive
amounts of money on the unemployment and, then, threaten the whole welfare
structure with the instability that's coming in our society, in the drug
situation that's coming, you've got to ask yourself, what kind of society do
you want in Britain? And, if we don't solve this problem of unemployment,
we'll not be living in a civilised society that I and you want to belong to.
HUMPHRYS: But, if Bryan Gould was sitting here,
instead of me, he'd say: I've heard everything you've said now and there are no
truly radical proposals coming out of John Prescott. It's just what I thought,
he's afraid of Gordon Brown and afraid of the modernisers and he's no-
PRESCOTT: The difference between ... myself and
Gordon and Bryan, Bryan copted it out. He comes out on your television and
gives the one statement, now and then. I work with a team, I work with a
Party. I believe we've set our commitment - and, we've only started a few
weeks - and, we're going to achieve that, whether Bryan says it or not. You
get him on your television, you just come back to me, in a year's time or so as
begin to spell our our problems. We're going to get our people back to work.
HUMPHRYS: John Prescott, thank you very much,
indeed.
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