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ON THE RECORD
RECORDED FROM TRANSMISSION: BBC-1 DATE: 02.10.94
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JOHN HUMPHRYS: Good afternoon, we're in Blackpool for
the Labour Party conference. The new leadership has done a remarkably good job
of appealing to the uncommitted voter. This week they have to persuade the
party faithful here that they haven't sold them down the river in the process.
I'll be talking to Gordon Brown. That's after the news
read by Moira Stuart.
NEWS
HUMPHRYS: Hello again and welcome back to a new
series of On The Record. How things have changed since the old one! The
Labour Party has a new leader and deputy leader. Some say it's a new party. And
very attractive it is, too, to many people who'd never have dreamed of voting
for the old one. We'll be considering that, and talking to Gordon Brown about
their economic policies: are they really new?
HUMPHRYS: Gordon Brown, that is your problem, it's
a bit of a conundrum isn't it, you've got to satisfy the old Labour and the
new, you are doing pretty well with the new, at least on the evidence of that
poll in particular, but, you are worrying the old.
GORDON BROWN MP: Well I can understand people are worried
about change and I can understand people's fears, but I think what the film did
not bring out is that this a new economics in the sense we have a completely
new analysis of what is wrong with the economy and what I've been saying, and
I've been saying it for two years now, is that the real problem of the British
economy - and this explains what we can do about inflation and enployment and
about industry. The real problem of the British economy is the diminished
capacity, it is simply too small, it is too technologically unsophisticated, we
have not invested sufficiently in industry and in people and in our social and
economic fabric and the failure has actually been a failure of ideology, a
Conservative ideology that equates the presence of opportunity with the absence
of Government.
Instead, we believe that Government must
work with industry, public and private sector must work together to address
these problems, so we have an analysis of what's wrong - under capacity - what
the Conservatives have failed to, which is a level of investment in the
economy, we explain it philosophically - a failure of ideology - and then we
can move to Labour's prescriptions, new prescriptions for investment in
industry, like our investment agreements, investment in people and investment
in our infrastructure and it's to achieve a high level of sustainable growth,
what has evaded the British economy for fifty years now - a level of
sustainable growth that we want to achieve under a Labour Government that we
say no quick fix, but we will deal with these fundamental problems that the
Conservatives have failed to address.
HUMPHRYS: And although old Labour will accept that
yes, there are those fundamental problems, and they'll agree with you on the
ultimate destination, they don't agree, it seems, many of them at any rate, on
how you are going to get there, so how do you persuade them in particular that
they are wrong and you are right?
BROWN: Well I think we can persuade them and I
think there are signs, not just from your opinion poll, but from the motions
down at the Labour Party Conference, from the acceptance of documents that we
have put round to educate the Party about what's happening, that people are
moving towards the analysis that we have been putting forward.
HUMPHRYS: Twenty per cent of the motions down for
this conference are saying let's have more borrowing, fifty per cent on the
economic debate say let's have a bit of re-nationalisation?
BROWN: I don't think you'll find that is the
case at all, when the Conference votes on the motions tomorrow I think you'll
find that people understand that the lack of productive capacity in the economy
that the fact that the economy is too small, is the source of problems of
highunemployment, and you can only deal with our goal of full employment by
addressing that problem, it is also the source of problems of trade deificit,
but equally, it is the source of problems of inflation and it is true to say
that as long as you've an economy that is too small, where there is under
investment, you'll have problems of both low growth, high unemployment, high
public borrowing and inflation and unless you understand the basis of our
analysis, that it is genuinely new economics for a global economy, then I think
people will reach wrong conclusions and it's my job of course to get that
message across.
HUMPHRYS: This isn't just new economics for a new
kind of global economy, this is the Holy Grail that you've discovered...they've
been searching..the Labour Party, the Tory Party have been searching for it for
fifty years, and you've discovered it just like that?
BROWN: But we have looked very carefully at
what's wrong, we've looked at the experience of other countries, I'm not saying
it's going to be easy but I think anybody looking at this country will
understand that every time the British economy expands, it happened under Nigel
Lawson, it's happened previously, that we run into problems, we don't
haveenough skills, there's not enough investment in industry, there are too
many bottlenecks and then the inflationary pressures start to come as we import
more and more. Now, how do you address that problem and the new economics is
about addressing that problem by recognising that the problems of capacity lead
to problems with inflation as well as unemployment and unless you address the
problem of capacity, you will have the boom-bust economics of the 1980's.
HUMPHRYS: Even if you do all that, even if you
address all those problems, it's going to be a very very slow business isn't
it, it's going to take time.
BROWN: I think you've got to make a start, I
have said and I said on Tuesday there is no quick fix, but you've got to make a
start. The problem with this Government is it will not admit the problem
therefore it cannot actually begin to start solving the problem.
HUMPHRYS: So you're going to make a start...
BROWN: Of course we are going to make a start
but first of all we are going to show that the measures for longterm investment
in people and in industry are capable of raising the sustainable growth rate of
the economy, now, we have got entirely new measures to deal with these problems
and I think it's got to be understood as well our proposals for example, for
investment agreements, for longterm investment, for the university for industry
to deal with the problems of skills, are very important...
HUMPHRYS: But you...I'm sorry...you can't say to
two and a half million people who are out of work if you realistically expect
to get re-elected, hang on for, I don't know, three years, five years, ten
years, until all these things have worked through, those new graduates going to
these new universities when industry are going to come out and transform the
economy, you can't say that, that's no way to enter an election is it?
BROWN: That's why as we move into the election
we'll announce the immediate programme of measures we will take, suitable to
the conditions of the time, but the important thing is that you make a start,
you make a start by dealing with the problems of under investment, you make a
start by re-allocating, as Harriet Harman has been suggesting, expenditure,
rescue expenditure to renewal expenditure, you make a start by dealing with the
problems of under investment generally and you make a start....
HUMPHRYS: But you haven't got that money to
reinvest, the rescue money because you are still paying the unemployed.
BROWN: And you make a start and I was coming to
this with the problem of unemployment, I don't think anybody is in any doubt
that what I would do as we come to the election is announce the emergency
measures we will take to reduce the levels of unemployment...
HUMPHRYS: By how much?
BROWN: ...I will also show how that is going to
be funded and I will also show how that is part of our longterm proposals for
dealing with the under capacity of the economy....Well I think it's important
to understand there is no conflict between pursuing our objectives of
high growth and low inflation and having an emergency programme to deal
with unemployment, which is not inflationary in itself and I think as we move
nearer the election, it will be appropriate to put down these measures.
HUMPHRYS: So what sort of number of new jobs is
this emergency programme going to create?
BROWN: You will have to wait and see John
because...
HUMPHRYS: Do you have no idea?
BROWN: We've got to look at the circumstances
that will arise as we move nearer the election, we don't know what's going to
happen in the stage of the economic cycle, we don't know what the condition of
the economy two years from now exactly is going to be, we don't have
theinformation that Government Ministers have at the moment as they prepare for
the Budget....
HUMPHRYS: But you've been terribly positive about
analysing the problems?
BROWN: Of course, because it's a longterm
problem that I think people immediately you look at the problems facing the
British economy and you explain under-capacity, the lack of capacity in terms
of underinvestment over the longterm, people understand what's got to be done,
now the difference between us and the Conservatives is that we recognise
thatproblem has got to be addressed and we will address it. The Conservatives
can't even begin to accept that that is a problem.
HUMPHRYS: But even though you have a whole mass of
figures to look at at the moment, even though you know what you'll get from the
council house sales and all that kind of thing, you've no idea at all how many
jobs you might create in the first year or five years?
BROWN: John, you are obviously going to be
persistent and you are finding ingenious ways of asking the same
question....but you're asking me...
HUMPHRYS: Well it isn't just me that is asking
them though is it?
BROWN: No but you're asking me to set down
targets in terms of numbers for a situation two and a half years from now, what
I am saying to you is that we recognise what the problem is, we recognise that
to reduce unemployment there will have to be immediate measures, we recognise
also we'll have to say how these are going to be funded but I am not going to
let that detract from the central analysis of what's wrong, and I think British
people are beginning to understand that analysis, that you need a new economics
to deal with the undercapacity of the economy and it can only be done by the
measures that we have been outlining, which rest on a new relationship between
Government and industry.
HUMPHRYS: All right I'll give up on figures
because obviously I'm not going to get anywhere there.....
BROWN: Well John, you can press if you like..
HUMPHRYS: No no no no point in wasting time if
you're not going to tell me, but on targets now you do accept then, your answer
seemed to suggest that you accept that there will be targets at some stage just
not yet, you will have a target for the number of new jobs you intend to create
by this time next year? Is that the case?
BROWN: What I've said is a Labour Government,
we will set down inflation and growth targets, now our employment objective is
very clear...
HUMPHRYS: Does growth targets include new jobs?
BROWN: Well, of course, growth targets means
that you are out to get new jobs and I have said that we will have...
HUMPHRYS: No, no that wasn't the question.
BROWN: Well John, I don't know what the
question is then because I've said...I've said we will have an emergency
employment programme, clearly you can see from that how many jobs are likely to
be created as a result and that will be announced at the time of the election.
But we are not going to get into the business of announcing figures two years
before an election - we will do that at the appropriate time - and I think you
again are asking the same question, if I may say so, in a different way.
HUMPHRYS: No, No I think this is a very different
question because your own deputy leader is quite adamant that you should have a
target, a very clear target by which you can be judged.
BROWN: Well, a long term target is of course
the aims of the 1944 White Paper...
HUMPHRYS: So that hasn't changed?
BROWN: High and stable levels of employment.. .
HUMPHRYS: Two point five per cent unemployment?
BROWN: People can be absolutely...well there's
come argument about what fictional unemployment is, but the long term aim is
exactly as has been put down by John Prescott.
HUMPHRYS: Full time employment?
BROWN: Of course it's giving people employment
opportunities, whether they want full time or part time work. Some people want
to work part time, other people want to work full time, and people have got to
have these opportunities.
HUMPHRYS: Yes, but, when you talk about the 1944
White Paper figure, that rested on the basis of full employment, that is to say
a full time job, it's not part time jobs.
BROWN: I think, John, you're trying to say that
Sir William Beveridge would never have favoured the development of part time
work. Part time work is in some cases what many women work...want as far as
their work is concerned, full time jobs are in many cases what both women and
men work, and we have got to meet the objective of employment opportunities for
all.
HUMPHRYS: So has your definition changed from the
Beveridge definition?
BROWN: A definition of the government objective
being high and stable levels of employment has not changed, and I think John
Prescott and Tony Blair put that very well in their leadership campaigns when
they set out the goal of Labour Party economic policy.
HUMPHRYS: But why this is important is because in
the past, when the Tories say after new unemployment figures and new employment
figures are produced, the unemployment rate is coming down, they're going to be
doing that for a very long time now, you, your party says, "no they're not,
they're only part time jobs, they don't count".
BROWN: No, the difference between ourselves and
the Tories is very clear. They have abandoned the 1944 objective, we have not.
I believe...
HUMPHRYS: But you've watered it down, if it
includes part time jobs.
BROWN: We haven't watered it down, we are
applying it to the new circumstances of the time. I don't think you would want
to force a woman into a full time job if she wanted a part time job.
HUMPHRYS: It's not the point.
BROWN: And I think employment opportunities for
all, what was sought in 1944, high and stable levels of employment, remain an
absolutely central objective for Labour Government, and I don't think anybody
is in any doubt about that.
HUMPHRYS: Well, let's be clear then so that there
isn't any doubt, you would include part time jobs?
BROWN: Well, of course, we'd include all jobs.
HUMPHRYS: Right, so that has changed, because what
Beveridge was talking about quite clearly was full time jobs for the wage
earner, in principle, because you know as well as I do that many of these part
time jobs (if I can finish this point) many of these part time jobs are wives
of men who are in work.
BROWN: But this may be the difference between
what you are saying is old and new. If you are assuming that the right
employment pattern is men working and women staying at home, then that is..
HUMPHRYS: No, I'm not making any assumptions..
BROWN: ..and if you're saying that was the
Beveridge assumptions then I don't accept that. It is employment opportunities
for all, and that is the work that people want to do, and I believe that that
is more in keeping with the modern labour market, but it represents a
commitment to high and stable levels of employment.
HUMPHRYS: If you have a million people in part
time work, whether they are the wives or the spouses of other people in full
time work, if you have that figure, you will include that in your overall time,
you will say, if we've got two million in full time, and a million in part
time, you will say we have three million people in work.
BROWN: Our objective is high and stable levels
of employment, the jobs that people want to do, if people want to do part time
jobs, depending on what hours they want to work, then that is important to them
and it is important to us.
HUMPHRYS: Let's move on to what you're going to
do with all this extra money that you're going to have as a result of running
the economy so much better. Let's make this up...and you agree that there is
going to be more money available to you, because you will manage the economy
better than the Conservatives have done.
BROWN: Well, let's just look at the growth
rates and that explains why. Under the Conservatives growth has been something
in order of one point six per cent a year, and that is half the historic
rate...
HUMPHRYS: You're going to get it up.
BROWN: ...that was achieved in terms of
growth. Even in the nineteen nineties, with all the predictions from Kenneth
Clarke, is to be one and a half per cent. Now, it is the business of
government to raise the sustainable level of growth, otherwise we will not have
the public services we want, we will not be able to tackle unemployment in the
way we should, and of course we will be running trade deficits with our
industry weakened. So that is a central objective of government, and I think
people understand that that is very important to achieve.
HUMPHRYS: So you have all this extra money
sloshing around. What are you going to do with it, and I know you'll say you
are going to do all these things, but what is your priority? You have a
certain amount of money to play with. Are you going to cut taxes with it? Are
you going to cut spending, so that you've got.... or what are you going to do,
are you going to reduce borrowing? Where is all that money going to go, what's
your priority, what is your instinct?
BROWN: Well, I think John, you would understand
the first priority is to increase the sustainable level of growth and that's
very important.
HUMPHRYS: But I'm making the assumption that
you've done that.
BROWN: And the measures we take, that I've been
outlining are important to achieve that. If we can of course achieve very high
levels of growth, then we would want to improve - as many people who run the
country see the state of - our public services, and that is very important to
us. Now of course, if we can make the improvements in the public services that
people want to see, and are satisfied with, then I've said, as any I think
sensible Treasury spokesman from the Labour Party would say, that if there was
scope, we would want to reduce the burden of taxation particularly on low
income Britain.
HUMPHRYS: But what's your instinct? If you ask
this of a Tory politician, of Kenneth Clarke for instance, he will say, and
let's not talk about the record, because there will be different views on that,
but he will say, "I am by instinct a tax cutter". Are you, Gordon Brown,
Shadow Chancellor, possibly future chancellor, by instinct a tax cutter?
BROWN: Well by instinct I want to make people
better off. It may be cutting the taxes, but it may also...
HUMPHRYS: Every Chancellor would say that.
BROWN: But it may be improving the public
services, and I think it's important to recognise that if the Conservatives are
saying they're going to have tax cuts, at the expense of our National Health
Service or education, then I think the public won't accept that, but just
remember this, the divide between us and the Conservatives is that they have
said they would put taxes down, but have continued to put taxes up, and I think
that when people realise as they move to the next election, that it's been the
equivalent of a seven p in the pound rise in the basic rate of income tax,
they're not going to think about the Conservative instincts, they're going to
think about the Conservative failure.
HUMPHRYS: But the reason I put the question to
you: "are you a tax cutter, or not?" is because many people still believe you
are actually going to put taxes up when it comes to it. I spoke to John
Prescott, deputy leader of the party yesterday, high income earners are going
to pay considerably more. Pretty straightforward that, isn't it?
BROWN: Well, I think John Prescott was talking
about what I've been talking about. I had a speech on Thursday talking about
the undeserving rich...
HUMPHRYS: He wasn't....high income? High income
earners aren't the undeserving rich.
BROWN: He was, and I think he's explained it in
another interview today. What John Prescott and I have been drawing attention
to are abuses that have been allowed to develop in the tax system under the
Conservatives, that have got to be dealt with as a matter of urgency. I will
outline many of them tomorrow. They include the tax privileges governing share
options, they include controlled foreign companies and using tax havens
overseas, they include excess profits on the part of the utilities, and these
are abuses that have got to be dealt with, and they're not just loopholes,
they're abuses that have been allowed by government decisions, so that's what
John was referring to, and that's what I'm referring to.
HUMPHRYS: Well, let's be very clear about this
then, because it's going to become terribly important, it already is terribly
important, isn't it? In some ways it cost you that last election. Is a high
income earner part of the undeserving rich?
BROWN: No, of course not, there are undeserving
rich people who have benefitted from tax avoidance, tax loophole, tax excesses.
I want to see...
HUMPHRY: And there's the other lot and the other
lot are not going to pay higher taxes under a Labour Government, is that the
case?
BROWN: Well, John, I've said, and I think we've
had a number of interviews about this, that I'll announce the tax rates...
HUMPHRYS: That's a cop out.
BROWN: You keep finding different ways of
asking the same question.
HUMPHRYS: No, no, I'm not asking...look I don't
want, I'd love you to tell me the rate of tax you're going to have in your
first Budget, but clearly you're not going to that, it would be silly to press
you on that. What I'm pressing you on is whether the high income earners, of
whom John Prescott spoke yesterday, can expect to pay more under a Labour
Government, for reasons of fairness and ideology as much as anything else.
BROWN: Well, that John, will depend on the tax
rates, and I'll announce these at the appropriate time. But what I have
emphasised...what I have emphasised, is that we don't want to tax people as
a matter of envy, or a matter of reflex action. We will only tax people in
relation to the services that we can provide for them, and when we make these
decisions, we'll be fair in doing so. Now, I think it's right that I should
set down the principles. I think people approve of these principles and
understand they're not applied by the Tories.
HUMPRHYS: I don't know what the principles are,
though, you see, because you're not telling me.
BROWN: You're actually trying to force me into
announcing tax rates, and I'm not going to do that.
HUMPHRYS: No, well actually, since you mention
that, and I do happen to have a note of it here, we spoke exactly a year ago,
and I asked you this very question then, you'll remember it, and you said
perhaps if you invite me back a year from now, I'll give you the figures.
BROWN: Yes, and what we're going to do, in our
economic policy commission, is look at these matters, and I'll announce them at
the appropriate time. And the appropriate time...
HUMPHRYS: This is a year on.
BROWN: Well, I think the appropriate time is
when we've finished the work of our economic policy commission and moved
nearer the elections.
HUMPHRYS: But look let's forget about specific
figures. What I'm trying to get at is the principle of whether, under a Labour
Government, high earners, and that was the expression that Mr Prescott used
yesterday, high earners should expect to pay more as a matter of principle,
under a Labour Government. That's a very straightforward question.
BROWN: When I say, as a matter of principle,
that we will not tax for taxation's sake, I've answered your point.
HUMPHRYS: I don't think you have. I don't
understand this.
BROWN: When we announce tax rates to deal with
the needs of the community, we will tell people what their payments will be,
but I think it's right to wait until you see the state of the economy, until we
know what point we're in in the economic cycle, and till we know what needs
have got to be met, and we will announce these decisions at the appropriate
time. I think the important thing is to understand there are certain things
can be done by the Conservatives at the moment to deal with the abuses, and
that's what I mean by the underserving rich, and the something for nothing
elite. Millionaires pay no tax whatsoever.
HUMPHRYS: But you've acknowledged that there is
a...
BROWN: Even under a Conservative Government
that says it's going to be fair.
HUMPHRYS: But you've acknowledged that there is an
enormous gap between the undeserving rich, and high income earners. You've
acknowledged that. And what I'm asking.....you've been quite clear that the
undeserving rich are going to pay more. I'm asking you to confirm what John
Prescott said yesterday, that the high income earners will pay more as well.
John Prescott clearly believes that to be the case.
BROWN: And what John was referring to is
exactly what I'd been saying on Tuesday and Thursday, that we will deal, and
call on the Conservative Government, to deal with these abuses at the moment.
Tax loopholes, changes and mistakes in the tax system, made by the
Conservatives, but as far as rates are concerned, and he's made that clear
again today, and we are in total agreement about this, we'll announce them at
the appropriate moment.
HUMPHRYS: Gordon Brown, thank you very much indeed.
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