Interview with Norman Lamont




       
       
       
 
 
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                                  ON THE RECORD 
 
                        AN INTERVIEW WITH NORMAN LAMONT MP  
 
RECORDED FROM TRANSMISSION: BBC-1                              DATE: 27.11.94 
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JOHN HUMPHRYS:                         So, Norman Lamont, former Chancellor, 
we're going to talk about all that in a few moments, if we may.  But, first, 
let me just ask you about all the speculation there is in this morning's papers 
and everywhere else, for that matter, that you have been approached as a 
possible stalking horse candidate to challenge John Major.  
 
NORMAN LAMONT MP:                      Well, in the last couple of weeks, I've 
several times publicly said that I had no intention of participating in a 
Leadership Election.  That remains the position.  Can I also say: I noticed in 
the news clip, at the beginning of this programme, an appeal from the Home 
Secretary for me not to vote against the European Finance Bill. The Home 
Secretary is an extremely good friend of mine and will remain so.  There has 
never been any question, I've repeatedly said,  sometimes I wonder quite what I 
can say.  I appeared on a television programme, said I wasn't going to vote 
against the European Finance Bill because it would be absurd for me, who's 
involved in it to do so, and the news immediately after the programme, led with 
an item saying I was leading a revolt on it.   
 
                                       So, don't believe everything you read in 
the newspapers. 
 
HUMPHRYS:                              So, if - at some time, during the next 
few days - you are approached by some people, some Tory Backbenchers, who say: 
Norman, we've got the thirty-four signatures for that letter, we're going to 
send it off to Marcus Fox, if you will be our man, what will you say to them? 
 
LAMONT:                                Well, I've told you what the situation 
is and I can't envisage circumstances that would change that.  May I say: I 
don't think that there will be a Leadership Election.  I think, the Chairman of 
the Conservative Party was quite right in what he said.  There will not be a 
Leadership Election.  I'm not quite sure why everybody thinks I'm so desperate 
to get involved in this matter.  I'm quite enjoying my life on the 
backbenches.  I enjoy the freedom to speak out, say what I feel about issues 
and I'm not some Edward Heath/Mark Two, filled with bitterness.   
 
                                       I'm merely taking the opportunity - 
which I haven't had for fourteen years - to say what I feel about certain 
issues.  And, I think, it would be wholly wrong and wholly unworthy of a Member 
of Parliament, if I didn't do that.  But, that doesn't mean I'm getting at 
anybody. 
 
HUMPHRYS:                              You said you can't envisage the 
circumstances in which you might run.  Everybody will remember that Michael 
Heseltine said exactly that.  And then of course he said the circumstances 
changed because he'd reached the conclusion, as did many others, that if 
Margaret Thatcher were to lead the Party into the next Election, you'd lose it, 
therefore he felt he ought to mount his challenge. 
 
LAMONT:                                Well, this is Sunday and I've said I 
have no intention and that is what I mean. 
 
HUMPHRYS:                              But, might that change if, during the 
next few days, they come to you and say: Norman, we need you? 
 
LAMONT:                                I'm not wanting to get involved in this 
and I do not think there will be a Leadership Election. 
 
HUMPHRYS:                              That doesn't quite - with respect - 
answer the question. 
 
LAMONT:                                I think, that answers it completely and 
totally.  I think, it wholly answers it and I came here to talk about the 
Budget. 
 
HUMPHRYS:                              No.  I will, indeed.  
 
LAMONT:                                I absolutely understood that you would 
have to ask questions about matters which I was slightly surprised to see in 
the papers this morning - as no doubt you were - but I've long ago learned the  
only true things in the newspapers are the advertisements. 
 
HUMPHRYS:                              Indeed, I'm grateful to you for talking 
about this when, indeed, we asked you to talk about the Budget. But, let me 
just persist with this for just a moment more, if I may and ask you that 
question again because I'm not quite clear that your answer was absolutely: I 
will not.  Even, if they approach me, during the next few days, I will have 
nothing to do with the Leadership bid whatsoever.  
 
LAMONT:                                I have firmly said: I have no plans and 
intention and that is that.  
 
HUMPHRYS:                              But, that could change, if they come to 
you? 
 
LAMONT:                                I have said that I can't see 
circumstances, I can't see why that would change.  I do not wish to be involved 
in this. 
 
HUMPHRYS:                              Why do you think it is then? 
 
LAMONT:                                That this has happened? 
 
HUMPHRYS:                              Well, I was going to say: a) that this 
has happened but, also, that the Government seems to be going out of its way to 
belittle you. 
 
LAMONT:                                Well, I don't know if the Government's 
going out of its way. 
 
HUMPHRYS:                              Well, we heard Norman.... we heard the 
Home Secretary this morning talking about how you'd cut a ridiculous figure if 
you ran.  They've been digging out quotes, supplying the newspapers with them 
about....
 
LAMONT:                                Well....
 
HUMPHRYS:                              ...things you'd said about Mr Major 
after Edinburgh.  There seems to be some fear that you're going to do something 
to them. 
 
LAMONT:                                Well, there seems to have been a 
misunderstanding that I was going to vote against the European Finance Bill.  I 
do not know why that could possibly have arisen because I have said, time after 
time again, that it would be ridiculous if I voted against that because I was 
associated with it.  It doesn't mean that I approve of our having to pay such 
huge sums of money but from where we start, I believe that that Bill got us the 
best deal we could and I obviously will support it.  Any suggestion 
that I was going to do otherwise was obviously quite wrong and privately and 
pubicly I've always made that crystal clear to anyone who has asked me.  Why 
has all this arisen? 
 
                                       I've been asking myself that this 
morning.  I think, the reason it has arisen, frankly, is simply because the 
Government has got itself in a bit of a hole-in-a-mess this week and there are 
a lot of very angry people as a result of the tactics that have been adopted on 
the European Finance Bill.  They don't like it and they have been running 
around and, I think, thinking of ways in which they can vent their frustration 
and anger. 
 
HUMPHRYS:                              Does that explain why, a man whom you 
describe as your friend, Michael Howard, said this morning, as I say that  
you'd cut a ridiculous figure if you ran for the leadership?  That's not very 
friendly.                                                     
 
LAMONT:                                Well I think he was referring actually 
to the European Finance Bill. 
 
HUMPHRYS:                              I don't think he was, I think he was 
referering to the leadership. 
 
LAMONT:                                Well I haven't actually seen the 
interview, what he said about the European Finance Bill in turn was obviously 
inappropriate 'cause the question hasn't arisen. 
 
HUMPHRYS:                              Indeed, but he was referring to...he was 
asked about your possibly running for the leadership, and it was in response to 
that question. 
 
LAMONT:                                Well I wouldn't expect Michael Howard 
other than to defend the Prkme Minister extremely strongly. 
 
HUMPHRYS:                              And attack you? 
 
LAMONT:                                That is his job.  I would expect him to 
be very against a leadership election taking place. 
 
HUMPHRYS:                              He's against you personally. 
 
LAMONT:                                Well I don't think you'll manage to get 
a quarrel between Michael Howard and myself however hard you try. 
 
HUMPHRYS:                              But he started it. 
 
LAMONT:                                Well he didn't really, I don't think. 
 
HUMPHRYS:                              So you clearly don't approve of Mr. 
Major's tactics over Europe, the way he's handled this vote tomorrow.   
 
LAMONT:                                Well I understand that this Bill has to 
be got through, I understand that. I think there is a danger obviously, in 
using the tactic of making it into an issue of confidence.  First of all I 
think there is a constitutional question as to how often you can do this.  You 
can't go on all the time saying we're going to make measures an issue of 
confidence. 
 
HUMPHRYS:                              You can't keep playing the same card? 
 
LAMONT:                                Right, but the second point that I think 
is more important really, is that I actually think the Bill would have got 
through the House anyway.  I think it would have been quite difficult for the 
Labour Party to have framed an amendment that Conservative rebels could have 
sided with, and I think they would have been quite careful about doing that. I 
think what may have led to the decision was simply the fear that the rebels 
would have dug in, that you would have had a lot a filibustering and therefore 
you had to get the Bill as quickly as possible, but on the whole I think the 
headlines we've had this week could hardly have been worse and I would have 
preferred to have attempted to do it without these tactics. 
 
HUMPHRYS:                              You've said there was a danger that 
these tactics could inflict long term damage on the party.  What did you mean 
by long term damage? 
 
LAMONT:                                Well, I meant that a lot of people 
resented it, and Europe is an extremely important issue, it is THE issue in the 
Conservative Party, the centre of gravity of the Conservative Party in the 
country and on the backbenches, is very much to the Right of that of the 
Cabinet on this issue, and I think you have to take that into account.  In my 
opinion the backbenchers are absolutely right. 
 
HUMPHRYS:                              So all of this has made it more 
difficult for Mr. Major to lead a united party into the next election hasn't 
it? 
 
LAMONT:                                Yes, he has a very difficult job because 
this is a very divisive and very difficult issue. 
 
HUMPHRYS:                              What ought he now to do then? 
 
LAMONT:                                Well I myself would like him to say that 
we won't participate in a single currency. I entirely supported the attitude 
obviously, that we took at Maastricht, but all that did was to defer the 
decision, time is ticking by and it's not that far away now from 1996.  We 
can't just wait until the evening of 1996, I think perhaps the government ought 
to publish a White Paper on what is going to come out of 1996, I certainly 
think we ought to reject a single currency, I also believe that we ought to 
have an undertaking, to have a referendum on either the outcome of the next 
IGC, or any decision to move to a single currency.  A referendum in my opinion, 
is absolutely inevitable, I think Blair will announce the Labour Party are 
going to have one, will commit themselves to one, we will be forced to follow, 
I think it's extremely short sighted not to do so in advance of the Labour 
Party. 
 
HUMPHRYS:                              And if he doesn't do those things? 
 
LAMONT:                                Well, I think that's merely my advice, 
if he doesn't do those things life will go on, but I think there will be 
growing support for those things. 
 
HUMPHRYS:                              And the implication of that is what, 
because he has a very small majority of course? 
 
LAMONT:                                Well, there isn't going to be a lot of 
European legislation after this week, there will be minor pieces of European 
legislation, but I'm quite sure the government will get its majority. I think 
the European issue will then move away from the front, but then it will loom 
again as we move towards 1996, and there will be a big debate in the 
Conservative Party about it. 
 
HUMPHRYS:                              An acrimonious debate, a very divisive 
debate? 
 
LAMONT:                                Well let us hope it will be as 
constructive as possible. 
 
HUMPHRYS:                              Alright, let's look at the other problem 
that is bedevilling the government, and that's obviously the economy.  
Everybody says on the face of it the economy is doing very well but it isn't 
delivering the voters, at least our focus group said so then, John Maples 
himself believes it isn't, so what has Mr. Clarke to do in his Budget on 
Tuesday, to bring those voters back.  Let's deal first if I may with whether he 
should cancel or postpone the second tranche of VAT on fuel. 
 
LAMONT:                                Well, I don't think a government can 
conjure up the "feelgood" factor.  It is something psychological, it is indeed 
puzzling that there isn't a greater feeling of good in the economy, because 
undoubtedly the statistics are very very good, the economy is growing rapidly, 
probably as rapidly as any in the western world.  I say western world, 
unfortunately in times...growing as fast as any economy in the world, I think 
that's a little bit of an exaggeration, inflation is down, above all government 
borrowing is coming down.  So, there has very rarely been so much good news.  
Why does this not percolate through to the public.  I think there are several 
reasons. 
 
                                       Firstly, the memory of the recession is 
quite recent, so time will cure some of it.  Secondly, I think the fact that 
inflation is so very very low, a lot of people actually rather like the world 
where their pay-packets go up in nominal terms even if they're not actually 
really any better off.  So I think that is another factor.  I don't think that 
there is an enormous amount you can do just in a budget to alter this.  I think 
an appearance of steadiness, of underlining the good news and letting time 
pass. I believe eventually it will come through. 
 
                                       Above all, what the government has got 
to give is an impression of steadiness and confidence.  And one reason why the 
"feelgood" factor might not come through is because people have other adverse 
views about the government and the government must appear steady, to have 
objectives, to have a purpose, to have a philosophy. 
 
HUMPHRYS:                              But one thing they could do, to please a 
great many people, as we've been hearing over and over again, and apparently Mr 
Major has been urged that this ought to happen, by all sorts of senior people 
in the party, quite apart from outside, is this question of the second tranche 
of VAT on fuel - dump that. 
 
LAMONT:                                Well, senior people in the party are 
always urging things like this.  You make difficult decisions, they always want 
to run away from them.  I believe that that would be a mistake, I'll probably 
en up being the last man in England in favour of the second stage of VAT on 
fuel and power, but we've had so much of the unpopularity for this, I think not 
to go through with it now, and quite frankly when it is through I think it will 
be quite quickly forgotten. 
 
                                       The reason that I think we ought to go 
through with it, is simply this: that we have to get borrowing down and as 
Edwina Currie said, the question is can we afford it?  The people in your 
programme were saying they wanted more on the Health Service, more on 
education, we must get borrowing down.  We can't just, because we have some 
figures coming through that look reasonably good, immediately give it back to 
the people.  Let's get the borrowing down, amd THEN look for tax cuts and 
income tax cuts ought to be the priority.  
 
HUMPHRYS:                              But there is a danger here again, isn't 
there, if it becomes a matter of confidence in the government, you heard two 
backbench MPs there saying they wouldn't support it. And you won't get the 
Ulster Unionists with you on this one this time. 
 
LAMONT:                                Well I think Conservative backbenchers 
ought to and I suspect that when the moment comes they will.  And I certainly 
hope that we will see the same strong arm tactics the whips have employed on 
other measures employed on this, be good to back a few Conservative measures. 
 
HUMPHRYS:                              What, do you mean threatening to 
withdraw the whip and threatening their constituencies with dissolution if 
they.. it's a bit heavy handed...you can't keep doing this can you. 
 
LAMONT:                                I quite agree, you can't keep doing this 
but all I'm saying is that I do believe that Conservative backbenchers ought to 
support this.  I will be surprised if Kenneth Clarke drops it. 
 
HUMPHRYS:                              And if he does it will be a sign that 
they've lost their nerve as far as you're concerned? 
 
LAMONT:                                Well I won't say a word if they drop it. 
 
HUMPHRYS:                              Alright, something else the voters are 
telling you, very clearly, again from our focus group and all sorts of other 
areas, is that they don't want cuts in public spending on things like health 
and education and wealth.  But you're saying that Mr Major MUST, Mr Major and 
Mr Clarke MUST make big reductions in public spending, that is vital.  
 
LAMONT:                                Well when you say I am, what I have said 
in comments I've made in advance of the budget, is that lower inflation means 
that you can cut the amounts of money that have been allocated to programmes 
without in any way effecting what those programmes deliver. 
 
HUMPHRYS:                              But you want it to go deeper than that, 
don't you.  You're not satisfied with trimming, at this stage, you're not 
satisfied with saying, as I understand it, with saying, let's hold it at this 
level, you're saying we've actually got to....     
 
LAMONT:                                I think the longterm objective of the 
government is to reduce the proportion of the economy that is taken by the 
state, I think that philosophically is what the Conservative Party ought to be 
about.  In this immediate budget, I think the priority ought to be to get about 
five or six billion pounds, say six, I think it ought to be six, off the new 
control total.  Even doing that, there's no reason why that should effect the 
volume of goods that the public service purchases or provides, that is merely a 
reflection of the improving situation in our public finances and above all of 
lower inflation. 
 
                                         But you must adjust these figures 
down, for lower inflation, you're not being tough simply by knocking five or 
six... 
 
HUMPHRYS:                              But in the longer term you're saying 
there have to be cuts in the amount the government takes out of our pockets, 
otherwise there's going to be trouble, as far as you're concerned. And that, as 
you know as a politician, is going to make the government even more unpopular. 
 
LAMONT:                                I'm sure the Government will - let's 
just be clear about this - I'm sure the Government will go on improving, as it 
has done, ever since 1979 - the Health Service and the Education Service, where 
there have been no cuts.  Cuts just means not as big an increase as people 
want to have.  What I believe ought to happen in the medium term is that 
the proportion of the economy that is taken care of by the State ought to 
diminish and I believe we ought to take less out of people's pockets.   
 
HUMPHRYS:                              But..and you're saying that that ought 
to be done, even if it makes the Government less popular.   
 
LAMONT:                                Well, I certainly wouldn't advocate 
anything that I thought would make the Government less popular.  I believe.. 
 
HUMPHRYS:                              That's not very courageous, is it? 
 
LAMONT:                                I believe that this is what people want  
and I believe that it is... 
 
HUMPHRYS:                              It's not what they're telling us? 
 
LAMONT:                                We've won elections on this platform.  
It was how we won elections throughout the 1980s.  You can do this and have 
strong, improving Health Services and Education Services at the same time.  
But, I believe, the priority ought to be to reduce the rate of Income Tax and 
we ought to ensure that public spending is adjusted to bring that about.   
 
HUMPHRYS:                              And, the fact is that real takehome pay 
is falling again this year.  We learned this again.  If we needed to learn it 
again, from the Maples Letter, it will fall up to '96, he said.  We have to see 
this rise soon and I quote from the letter: "or we'll have had four or five 
years of recovery, with no rise in living standards".   
 
                                       Now, no Government is going to be 
returned to power in that eventuality, is it? 
 
LAMONT:                                Well, I'm not sure that I accept that 
disposable income will not rise before 1996.  In fact, I don't accept it.  I 
think, you will see... 
 
HUMPHRYS:                              So, Maples has got it wrong? 
 
LAMONT:                                I think, the Maples Memorandum is not 
correct, in that respect.  
 
                                       And, don't forget, there have been, 
since two or three years ago, there have been some dramatic falls in interest 
rates.  That, even if people's money incomes from work have not been increasing 
very dramatically, people with mortgages have had more money left in their pay 
packets after the deduction of mortgage interest, because that has come down so 
sharply.  As was brought out in your film. 
 
HUMPHRYS:                              You'd like to see interest rates go back 
up? 
 
LAMONT:                                I think, interest rates will, 
inevitably, go up a little in the next year. 
 
HUMPHRYS:                              Now, these - the sorts of things you're 
talking about - are difficult decisions and you have said, in the past, that 
when Mr Major takes decisions politics are too dominant.  There is a reluctance 
on his part you've said for him to take political...difficult decisions for 
political reasons.  How can you be so certain in the face of all this, the 
kinds of things you've been talking about this morning, that he is going to 
lead the Party into the next Election? 
 
LAMONT:                                Well, I think - I'm sorry I thought you 
were about to ask me whether he would do these things.  I don't think there'll 
be a leadership election.  So, the question doesn't arise.  I think, the 
Government has shown signs of being prepared to take tough decisions of the 
kind you are describing which I've been advocating.  I strongly supported, for 
example, Kenneth Clarke's decision to put up interest rates in advance of the 
signals from money supply and markets telling him it was necessary.   I 
thought that was a good indicator. 
 
HUMPHRYS:                              Norman Lamont, thank you very much for 
joining us.  
 
 
                                ...oooOooo...