NB: THIS TRANSCRIPT WAS TYPED FROM A TRANSCRIPTION UNIT RECORDING AND NOT
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ON THE RECORD
RECORDED FROM TRANSMISSION: BBC-1 DATE: 29.1.95
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JOHN HUMPHRYS: Good afternoon. There IS going to be a
referendum on whether Britain should join a single European currency.
It will happen here on this programme -
in the next hour.
Our studio audience will vote after
they've seen a campaign, complete with commercials and politicians for and
against, cross-examining each other.
What's it going to tell us about whether
Britain would vote yes or no? Find out after the news read by Chris Lowe.
NEWS
HUMPHRYS: Hello again. So, Europe is the big story
again this week. The fault line in British politics runs deep - between those
who want closer ties with Brussels and those who want to back off. And the
pressure is now building as we get closer to Maastricht Two, as they call it,
and the big decisions that have to be taken.
Jacques Santer - who's rapidly becoming
the new bogeyman of the European Commission - wants a single currency to go
ahead in two years from now. But the signs are that as a nation we are
becoming more sceptical. There is no more divisive - or indeed more important
issue. It could decide the outcome of the next election - and that's what this
programme is about. That's why we have an audience here today. How might an
INFORMED public vote in a referendum on a single currency?
For the purpose of this programme, we're
going to jump ahead a year and assume that a referendum has been called. But
first, where are we today? We got the Harris Organisation to carry out a
nationwide poll last week. They asked a thousand people whether they'd be
inclined to vote for or against a single European currency and here's what they
said - thirty one per cent were in favour; fifty five per cent were against it
and fourteen per cent were undecided.
But what if those people had been
subjected to a campaign by supporters for and against BEFORE they'd voted.
Well, that's what we're about to find out. We selected a more-or-less
representative audience and we're going to stage our OWN campaign. But let's
find out their views BEFORE the campaign begins.
Now ladies and gentlemen you all have
your buttons to press, yes, no, or undecided, so if you'd be kind enough to
press them now we'll get some idea of that. And there we are, that's it.
Well, absolutely even, forty one per cent yes, forty one per cent no, undecided
eighteen per cent. That's interesting. Now those undecided eighteen per cent
let's have a quick word from you first, what might make you decide to change
your mind, to go one way, is there somebody undecided here perhaps? The
gentleman in the front row I think said earlier that he was undecided, yes sir.
UNNAMED MAN: Yes, at the moment I feel that the
messages coming across from either side are a little bit muddled, a little bit
confused and hopefully the debate today will clarify those issues.
HUMPHRYS: Right, so you think once you know what
the issues are quite clearly that'll make you make up your mind.
UNNAMED MAN: Certainly.
HUMPHRYS: All right. Now people who have made up
their mind, I think we've got a couple here a husband and wife who disagree
with each other, one of you is for and one of you is against. This couple
here.
UNNAMED WOMAN: I am against.
HUMPHRYS: You're against and you're for.
UNNAMED MAN: I am for.
HUMPHRYS: I'd love to be at your breakfast table
conversations in the morning. Why, what, in your case?
UNNAMED WOMAN: I feel that by changing our currency
it's just another link in the chain towards losing our identity. We may be
part of the European Community but we're still a country in our own right and I
think as such we should keep our currency and our traditions together.
HUMPHRYS: Right, so afraid of losing our identity,
what about your husband, what's your view on that?
UNNAMED MAN: I feel that all the arguments I've heard
either way so far they seem good logical reasons for a single currency and only
emotional reasons against it.
HUMPHRYS: So your wife...
UNNAMED MAN: I can't see one logical reason why we
shouldn't have a single currency.
HUMPHRYS: Your wife is being too emotional on this
issue at any rate. Right, anybody else with a view on this for or against and
yes, the lady in the back row there, yeah, what are you at the moment for or
against?
UNNAMED WOMAN: Against.
HUMPHRYS: You're against and why is that?
UNNAMED WOMAN: I don't think that everybody will
benefit from it, from the single currency.
HUMPHRYS: You don't think anybody would benefit.
UNNAMED WOMAN: Not everybody will benefit.
HUMPHRYS: Not everybody would benefit. Okay.
Well, let us see now whether we can persuade anybody here to change his or her
minds.
We have two teams with us to do that:
Roy Hattersley and Edwina Currie are in different parties as you know but both
believe we SHOULD be part of a single currency. Iain Duncan-Smith and Peter
Shore (again Tory and Labour) believe equally passionately that we should not.
They've been working on their campaigns since before Christmas and we'll see
the result of that work in a few minutes. But first, the news for January 29th
1996 - a momentous day in Europe's history.
PETER SISSONS: As key European countries decide to form
a single currency, the British people are to vote in a referendum. The ECU is
set to become the main European currency as seven members of the European Union
announced today that they would join together in a permanent monetary union.
The Prime Minister has announced a
referendum in the UK calling the issue of the single European currency one of
major constitutional importance.
Good afternoon. A two speed Europe
looks like a distinct possibility today as a core of seven countries announced
in Brussels that they are committed to an irrevocable fixing of their
currencies in less than a year. On January the first 1997, the earliest date
allowed by the Maastrict Treaty. The countries forming a monetary union are
Germany, France, Belgium, Luxembourg, the Netherlands, Austria and Ireland.
Denmark, like Britain, will be holding a referendum. The new currency will be
called the ECU and will be legal tender throughout the seven countries. The
European central bank, which will take over effective control of the national
banks joining the monetary union, is expected to announce guidelines shortly on
the types of notes to be issued.
In the past hour the British Government
has announced that the question to be put before the British people is; do you
think the United Kingdom should take part in the single European currency. The
Liberals are the only political party whole heartedly committed to supporting
the single currency, the Prime Minister has announced that the Cabinet will be
allowed to campaign freely on the issue. With Labour split as well, the
announcement is expected to trigger a wide ranging political debate.
HUMPHRYS: So, there we are. The referendum has
been called, the campaign is now underway and that means we'll be seeing the
equivalent of Party Political Broadcasts on television and radio made by both
sides in the campaign to get their messages across. Here's one of the
broadcasts now on behalf of the vote yes campaign. The advertising consultant
Barry Delaney (phon) produced it.
VOICE OVER: There now follows a referendum campaign
broadcast on behalf of the yes committee.
UNNAMED ACTOR: For most of its history, Britain was a
disunited kingdom. A desperate collection of warring tribes, Pitts, Scots,
Celts, Angles, Saxons and small kingdoms whose names are seldom mentioned
nowadays, except in history books. Places like Mersea or Wessex. From time to
time we were invaded by Italians, for instance, or Danes or the French. But
eventually of course these invaders either went back or more often than not
stayed and became British themselves. Over time these fractious encounters
with each other and with our overseas visitors taught us a lesson that the rest
of the world was also struggling to learn. Namely, that co-operation is far
less expensive than conflict. So we became a United Kingdom and as we did, so
we became more prosperous.
I's been more than half a century now
since the last great conflict in Europe. At the end of World War Two countries
that had fought and squabbled for centuries decided at last to join together
for their mutual benefit and as a consequence, they have enjoyed an era of
unbroken peace. And not withstanding economic fluctuations, unprecedented
prosperity. Now Europe is to have its own currency, money that you can spend
in every country in the European Union, money that will be worth the same in
every country.
The immediate benefit of this is that
trade between member countries will be very much easier. This in turn will
mean increased growth, more jobs, and the increase in prosperity that comes
with them. There will be massive savings in accountancy costs too. And in the
charges that are made every time currencies are exchanged, whether by huge
corporations or by holiday makers.
There'll also be savings on the money
that is paid every day to currency speculators. People who get rich by
exploiting fluctuations in the exchange rate but contribute nothing to the
wealth of the community.
And to be absolutely honest, Britain
will gain a particular advantage from a single European currency, that's
because we have a particular expertise in financial services, they already earn
this country a lot of money. So when the entire community is using the same
money, a whole lot of valuable new business will come flooding in. Now, of
course, there are people who say this new currency will undermine our national
identity, or that we'll be handing over control to others. Well the fact is we
don't have much control over our own currency. Increasingly, global markets
already see to that.
And we won't lose our identity, not as
long as we have confidence and pride in ourselves and if we become better off,
we'll be better able to express our cultural differences in all sorts of ways.
But if we became poorer, as we surely
will if we reject this unique opportunity, then national identity may well be
used as an excuse for ugly nationalism as it has been so often around the world
and throughout history. For the fact is that wherever and whenever greater
co-operation between nations or even tiny kingdoms has been proposed, there
have always been those who have said no. Let's resist, let's stay as we are,
fight for what's familiar. But if these insecure voices had been heeded often
enough, you know where we would be today - we'd still be living in caves.
HUMPHRYS: Well, Roy Hattersley and Edwina Currie,
I'm a bit surprised by that one to be honest. It's a bit emotional, playing
the patriotic card a bit there, the Union Jack waistcoat. I thought you might
have been a bit more cerebral perhaps in your approach.
ROY HATTERSLEY MP: I think that's about as cerebral as
Party Political Broadcasts ever get and we're really not competing here for the
Nobel Prize for anything, we're trying to produce a simple and absolutely
accurate message. I'd be interested to see if anybody can refute the facts
which are buried in that very very clear indicational way.
HUMPHRYS: Simple but not simplistic a bit do you
think?
HATTERSLEY: I think it's a very very potent message.
I think many people will respond to it.
EDWINA CURRIE MP: I think I would also make the point that
we're as patriotic as anybody else. We believe in our country, we believe that
our country should be great within Europe, not on the outside. We are British
and we are patriotic too.
HUMPHRYS: OK well let's see whether you scored any
points with the no voters here. I think you were a no voter weren't you, were
you impressed by that?
UNNAMED MAN: I think the arguments were in many ways
valid but personally I still don't feel that a single European currency would
be a valuable feature.
HUMPHRYS: What do you think about Edwina's point
that this is a patriotic argument after all?
UNNAMED MAN: Patriotism is not what the argument should
be about. It should be about pure economic sense. Economically it may be
useful but equally it would be seen as a next step towards the Federal States
of Europe which I'm most definitely against.
HUMPHRYS: OK, I think somebody here, what about
you, what's your view?
UNNAMED MAN: I think if the Conservatives had a
single currency, I mean people who've been working in this country for a long
time would lose their jobs. The homeless would double and the crime rate would
just go sky high.
HUMPHRYS: So it's the economic argument primarily
that concerns you again. You're not concerned about patriotic arguments so
much.
UNNAMED MAN: No, no.
HUMPHRYS: Anybody else who was impressed by that
or not impressed by that, thought it was a lot of old rubbish perhaps. What -
yes sir, gentleman here.
UNNAMED MAN: We in Scotland gave up our nationalism.
HUMPHRYS: Sorry?
UNNAMED MAN: We in Scotland sacrificed our
nationalism four hundred years ago and I would challenge them to say that I'm
not still Scots.
HUMPHRYS: I must say you don't sound like a man
who's given up his nationalism to me but you're going to get it all back again
aren't you. Maybe, who knows.
What about the lady here who was against
UNNAMED WOMAN: I'm still not convinced.
HUMPHRYS: You're still not convinced.
UNNAMED WOMAN: No, I'm not convinced.
HUMPHRYS: Did you not like it or did you think it
took a wrong tack or what?
UNNAMED WOMAN: I can see some sides of it. I just
still feel that we're in danger of losing our identity as a nation. I'm not
changed on that yet.
HUMPHRYS: Right, more arguments to come so don't
give up because now we're going to here the broadcast on behalf of the vote
'no' campaign masterminded by the Mustoe Merriman Advertising Agency.
VOICE-OVER: There now follows a referendum campaign
broadcast on behalf of the 'no' committee.
ANDREW NEIL: Hello, the short film you're about to
see has been made for one simple reason. In the forthcoming referendum all of
us in this country will be asked the single most important constitutional
question of our lifetimes. Now let's be quite clear about that. It's the
single most important constitutional question of our lives and the answer we
give on that day will directly affect our lives today and those of our children
and grandchildren. Now some people will argue that it's only a matter of
currency but if ours changes to something like this then foreign trade and
travel will become easier and that these places will cease to exist but don't
be fooled.
A 'yes' vote for European monetary union
would mean this. The setting up of a central European bank. The bank would
control all key aspects of European economic policy. It would be based in
Germany, it would be run along the same lines as the German Bundesbank and like
the Bundesbank it would be completely independent of the European Parliament or
anybody else's parliament.
Now let's think about that for a moment.
What we're being asked to accept is that in future an unelected unaccountable
body answerable to no-one will have control of this country's public spending,
our currency, our interest rates and our taxes. Are we alone in finding that
worrying?
Excuse me, can I ask you where you're
from?
UNNAMED WOMAN: Frankfurt.
NEIL: Tell me what's the view in Germany about
European Monetary Union, for or against?
UNNAMED WOMAN: Well we are against it. We don't want
to have control over our economy by someone we haven't even voted for.
NEIL: No wonder. Let's suppose for a moment
that we've agreed to monetary union and that the Government of the day wanted
to increase spending on, say the Health Service. We couldn't, we would no
longer have the authority. In fact our Government for which we've all had the
opportunity to vote would be obliged to devolve almost all it's economic
responsibilities to a central bank for which we'd never have the opportunity to
vote.
UNNAMED MAN: The feeling in France is that we're not
being told the real issues. How can you vote for something when you're being
kept in the dark?
NEIL: Thank you. Do you think you've been
told the real issues, and if not, why not? Could it be that the monetary union
lobby has something to hide? You never hear them talk about the last time we
experimented with monetary union. On September the 18th, 1992 in a desperate
attempt to make it work, interest rates in this country went from ten to twelve
to fifteen per cent in a matter of hours until we withdrew and sanity was
restored.
NORMAN LAMONT MP: Today has been an extremely difficult
and turbulent day.
NEIL: And have any of the system's supporters
ever told us exactly what membership of this highly exclusive but expensive
club would cost? No they haven't, but we can.
The only authoritative study was
completed by Sir Donald McDougall (phon) and his team for the European
Commission. Its conclusions were litle short of frightening. Poorer
countries, mainly in Southern Europe would face economic ruin if they had to
adopt an over valued single currency. To compensate, a transfer of funds would
be required so massive that this country's contribution alone would be fifty
three billion ppounds. Would the British tax payer really be willing to have
income tax doubled to fund often corrupt public works programmes in the
Mediterranean? In strictly financial terms, that's an appalling price to pay.
It almost pales into insignificance compared with what else we and other
European countries would have to sacrifice. This country would be a loser.
Those in control over the management of our economy, our European neighbours
would be losers too.
You only have to look at Spain today
with it's twenty four per cent unemployment, even higher among young people
going through the agonies of the European Exchange Rate Mechanism. If anything
agonies worse than ours and Europe itself would be a loser. Monetary Union
would inevitably lead us, as surely night follows day, to political union and
the tensions that could create in Europe are too awful to contemplate. Mass
unemployment, friction between the regions, irresistable pressures for
protectionism, massive public spending subsidies.
We're not being alarmist, we're not
being anti European but we do believe that Monetary Union could well result in
just the sort of conflict that the European Community was intended to prevent.
A trading Europe, yes, a Europe of closer economic and cultural ties, yes, a
Europe that unites to defend it's interests, yes, but if you care about Europe,
if you don't want to see Europe torn apart, there's only one way to vote on
Monetary Union, and that is emphatically no.
HUMPHRYS: Emphatically no, remind me here who
voted yes, perhaps you'd put your hands up. OK, gentleman over there, what do
you make of those arguments?
UNNAMED MAN: It was totally misinformed declaration
of ...
HUMPHRYS: Misinformed.
UNNAMED MAN: Misinformed because it's a unity. You
can't have your cake and eat it. Unity with other currencies in the unity.
HUMPHRYS: So it clearly hasn't caused you to
change your mind. Right what about this gentleman here, did you put your hand
up?
UNNAMED MAN: Yes, it seems a very unfactual argument
for the actual ..., they don't appear that they're basing any of their argument
on anything that's factual.
HUMPHRYS: Let me just go back to the policies of
that and put that point because there was a huge amount of fact in that, much
more than in the other. Alright let me not say fact, I see Edwina Currie
violently shaking her head over there. What she means by that, not fact, she
believes it was misinformation. There was a lot of ...
HATTERSLEY: Invention is the word that came to mind.
Invention
HUMPHRYS: Invention is what Roy Hattersley said.
All right there was a lot of detail in the way that there wasn't in the other
commercial. Why did you go for that?
IAIN DUNCAN-SMITH MP: We started really feeling in the first
place that we'd already had this sort of experience before, and everybody here
has felt the experience in the ERM. Now what we're offering is just an
extrapolation from those problems, economic problems. Now we were accused
earlier on about patriotism and zenophobia but the truth is that argument was
an economic argument because first and foremost if there's no economic
rationale, which I don't believe there is, and the transfer of money would be
very great, there really would be devastation.
HUMPHRYS: And presumably you're very concerned not
to be seen to be wrapping yourself in the flag here because otherwise people
would say, there you are you're anti European.
DUNCAN-SMITH: It's not anti European, it's anti
European to do something which actually destroys the place.
HUMPHRYS: So what about that argument then. Yes
sir can I just come back, I think somebody in the front, yes, the gentleman
back there, come back to you in a moment.
UNNAMED MAN: I don't see the parallel between the ERM
and between a full exchange rate, a full European currency because the whole
reason the ERM didn't work was because it wasn't united, because we had to
shore it up. We had to sell and buy to keep it going.
HUMPHRYS: Somebody was undecided earlier and let
me just take a quick spot check to see whether at this stage, was it you sir,
you were undecided earlier, are you beginning to waiver a little bit now one
way or the other?
UNNAMED MAN: Slightly towards the no campaign based
on the fact that I do agree was more factual, it didn't place as much on the
emotions as the 'yes' argument about this patriotism.
HUMPHRIES: So you rather liked that broadcast.
UNNAMED MAN: Yes. I want to hear the details, I want
to hear the facts, not a glossed over picture of what the other side is trying
to present.
HUMPHRIES: OK, well you're going to get more facts
yet. Yes sir, here in the front.
UNNAMED MAN: I voted yes originally as well but I
think by looking at the 'no' video I'd like to see more because from what the
video reported it showed that they're kind of praying on the traditional
holier than thou attitude of Britain compared to the rest of Europe and when
they mentioned corrupt governments potentially and other places in Europe, not
wanting to tie themselves to that.
HUMPHRYS: You will have a vote will you, with an
accent like yours you don't sound like a Briton.
UNNAMED MAN: I don't have a vote right now...
HUMPHRYS: ... but you're going to qualify for one
are you by the time you ...
UNNAMED MAN: I have a better view because I can look
at Britain as compared to the whole union as opposed to....
HUMPHRYS: All right. Roy Hattersley what about
this argument if you're glossing over it a bit. In your broadcast you rather
glossed over, you didn't give them the detail that this.
HATTERSLEY: The 'no' broadcast didn't give the
details either because nobody of sense and integrity believes that joining the
Union is going to double the rate of income tax in Great Britain. Peter Shore
wouldn't say that, nobody believes that the European Central Bank is going to
decide on hospital closures in Britain, Peter Shore wouldn't say that. OK that
wasn't fact, that was pure invention.
HUMPHRYS: Hold on a second if you would, Edwina
because lots of time to discuss that, and you an come back as well I promise
you, but let's move on for the moment because we've quite a lot to go through.
There is of course more to a campaign than a few broadcasts and posters. You
have to line up influential supporters, the so-called opinion-makers. That's
what our politicians have been doing, and it's apparent from the people they've
chosen that the economic arguments will be at the heart of the debate. Jon
Rentoul is our referendum correspondent, and he reports first on the business
backing for the Yescampaign.
JOHN RENTOUL: Business leaders have stepped up their
campaign in support of a single currency. Sir John Banham, the chairman of a
leading building company has been campaigning in London for a Yes vote.
SIR JOHN BANHAM: We have to have low inflation and in my
experience of working with parliament, with the government, and indeed with the
Bank of England, they will not be able to guarantee low inflation, indeed they
tend to cause it. We must have low inflation and the only way to get that in
my judgement, to secure it is to have a sheet anchor, which of course a single
currency will provide.
RENTOUL: In a letter to the Financial Times the
chairman of Northern Foods, Chris Haskins, warns that Britain has to be part of
the mainstream in Europe.
CHRIS HASKINS: It is vital in the interests of jobs and
the interest of the economy of this country that people accept the next step in
Europe which is a single currency.
RENTOUL: The City of London is also anxious about
its position as a global financial centre if the pound does not join a single
currency. The Yes campaign believes that its strongest arguments are about
the nation's future economic prosperity, arguments we can expect to hear more
of as the moment of decision approaches. John Rentoul, BBC, the City.
HUMPHRYS: So business backing for the Yes vote as
you might expect, and surprisingly perhaps the No campaigners are fighting on
that same ground. They believe they must contest this key area, as John
Rentoul again reports.
RENTOUL: At a No campaign rally tonight, Peter
Morgan, chairman of a group called, "Business says No", will hit back at claims
that a single currency will create jobs.
PETER MORGAN: I do know what I'm talking about. I've
worked for a multi-national company in Europe for eight years, and I was the
Director or Marketing for IBM in Europe for five. I know that multi-nationals
don't need single currencies.
RENTOUL: MPs are away from Westminster
campaigning in their constituencies this week. The clear message from the No
campaign, is that if Britain votes for a single currency, when MPs return
they'll find they no longer have any real power.
SIR ALAN WALTERS: The basic danger is that our monetary
policy, and indeed our fiscal policy would be determined by - primarily by
Germans, perhaps a few Frenchmen - but primarily by Germany, with the focus of
their policy being what's good for Germany, not what's good for Britain.
RENTOUL: The No campaigners refuse to accept
there would be economic benefits in a single currency, but they believe that
their clinching argument is that it would mean the end of national sovereignty.
John Rentoul, BBC, Westminster.
HUMPHRYS: Right, well those are the arguments,
more or less, but something else that you'll get in the real campaign is lots
of politicians shouting at each other - they do plenty of that of that anyway -
or put another way, testing each other's arguments, so let's do that now. Iain
Duncan-Smith and Peter Shore, you have six minutes to try to demolish the case
put forward by the Yes campaigners. By the way this is meant to be
cross-examination, you must not make speeches, you'll get a chance to do a bit
of that later, so before I open it up to the audience, off you go.
SHORE: Well, the most important thing in that
rather emotive film on the Yes campaign was the claim that it had, as it were,
reinforced the peace in Europe during the past fifty years. Now that's a very
very important objective, and a very important achievement, but looking back
over the fifty years, doesn't Mr Hattersley and his colleague agree that the
real reason why we've had such a long period of unbroken peace is that we've
had North America in Europe, we've had NATO treaty, we've had German, British
French, and American armed forces banded together in a single command. Isn't
that the real reason why we have had so long a period of peace, and isn't it a
reason why we should continue with NATO in the future.
HUMPHRYS: Right, answer that.
HATTERSLEY: I'm a great believer in the Atlantic
alliance, but I've never believed, nor has anyone else that I know in America,
that we have to choose between America and Europe. Indeed one of the reasons
I want to see closer European integration is something that President Clinton
said in Paris six months ago. He said, from now on the special relationship
wasn't between Washington and London, it was between Washington and the
European Community. I want us to remain part of that relationship and I
believe that our ties with the Atlantic Alliance will be substantially loosened
if we become an off-shore island rather than part of the Europe that America
wants to do business with.
SHORE: But that's not the choice. Surely what
is emerging is the separation of Europe from North America with a European
defence force, a European armaments industry, European security, separate from
that of the United States and Canada, and do you really believe that such an
organisation in Western Europe would not be in fact German dominated, and are
you really content to have as it were, a German peace in Europe, rather than
the kind of peace we've had under NATO since the end of the war?
HATTERSLEY: Well it'll be Germany dominated if we
don't play our part. Germany will score the goals if we don't take part in the
competition. If we're in there we'll have a view and a voice on how the union
progresses, but when you say aren't we moving away from America - America
believes that we're moving closer towards them by integration. Europe believes
we're moving closer towards America with integration, it's a partnership of
equals, that's what I want to see. I'm very pro-American, but I don't want us
to be subservient to America, I want a partnership of -
SHORE: I didn't mean subservient to America.
Can I just make a point here. You talked earlier on, if I can - either of
you, about this business of there's no proof for what taxation might go up by,
or that there's any extra flow of monies required, and yet we have the
experience of the unification of Germany which it may be considered an extreme
example, but it is still an example of what happens when you put people
together on a parity where you do have unequals and their taxation's risen by
seven per cent. How do you rebut that as an example?
CURRIE: Well, I think it's probably worth
pointing out that if we're putting people together as equals and unequals we
are one of the unequals, because in terms of income per head we're one of the
poorest countries in Europe. It never used to be the case, and I think it's
because we haven't been properly engaged - we haven't taken it seriously.
DUNCAN SMITH: Well, we do have this rather about not
being properly engaged, but we've been in Europe for twenty-five years; why is
it we're not engaged?
CURRIE: May I ask you a question?
If you look at income per head you will find that of the fifteen countries in
Europe right now we are number eleven. The only countries poorer than us are
Ireland, Spain, Portugal and Greece. Germany's a lot wealthier. One of the
reasons the Germans are a little worried, is they're worried possibly some of
that money coming to us, and I think that would be a very good thing.
DUNCAN-SMITH: So what you're saying to me is you agree
and accept the fact that there will be massive transfers under the cohesion
fund to the cohesion four at least, which will be an element of tax increase.
CURRIE: Well, you mustn't mix up the Cohesion
Fund which is already in existence with the possibility of going into a single
currency. A single currency is something quite separate. If decisions are
taken to spend money for example - can I finish the sentence?
If decisions...
DUNCAN-SMITH: Do you accept that there will be
transfers of money under the Cohesion Fund?
HUMPHRYS: Can you just explain in sentence what
the Cohesion Fund is?
DUNCAN-SMITH: The Cohesion Fund was set up so that
money will be transferred to those countries who find themselves in a most
unequal position in this sort of circumstance.
HUMPHRYS: Right.
CURRIE: But that's already happens, these
structural funds already happen. I have money spent in my part of the world,
you have money spent in your part of the world,...there a good thing.
SHORE: Can I come in on this because, and then
ask you the question. Don't you recognise the fact that although we may be
rather low down in the league of European prosperity, one, there is no
comparison between Britain and the last four by the way, but leaving that
aside, surely you recognise that it is an extraordinary thing that we should be
contributing more than every other country apart from Germany to the European
budget?
CURRIE: That's because of the Common Agriculture
policy, and the quicker that's abolished the better.
SHORE: Indeed, and why shouldn't that continue
in the future?
CURRIE: Isn't it interesting that they're not -
SHORE: ....in which we had the single currency?
CURRIE: But they're not actually talking about
the single currency at all, d'you see? They're talking about some of the
difficulties that we have now, because they don't like the idea of the single
currency.
(ALL TALKING AT ONCE)
HUMPHRYS: We can only hear one at a time.
HATTERSLEY: One of the reasons that I have a degree
of sympathy for Peter talking about the failures of the Community, which you
and I both know exist, is because many of the failures in the past have been
because Britain has not been in there negotiating, we've got on the bus too
late and then it's been going in the wrong direction.
HUMPHRYS: Peter Shore.
SHORE: We've been in there Roy for twenty-five
years and every successive British minister who's been to Brussels has said,
the CAP has got to change. Well you and I know that it has been impossible to
change the CAP, although it's greatly against our own interests, costing every
British family twenty pounds extra week in food, and we've haven't been able to
change it, we haven't been able to change their fishery policy and we haven't
been able to change ...
HUMPHRYS: ... because he's got ten seconds left,
that's all. Go on, a very quick question.
DUNCAN-SMITH: Can I just ask a very quick question.
What other place do you have an experience of, that has a single currency?
CURRIE: The United Kingdom.
DUNCAN-SMITH: Right, thank you. Now, on that basis,
on that basis the transfers of money from the South of England to Scotland are
eighteen per cent higher, and twenty per cent higher to Wales, and forty-one
per cent higher to Northern Ireland. How do you think that will transpose
across Europe with the community?
HUMPHRYS: You've got a few seconds Roy, he's
pointing at himself - go on.
HATTERSLEY: No, Edwina's answer but we both think
the money will come to Britain.
CURRIE: I think the Scots think it's on the
whole rather a good thing.
HUMPHRYS: Right there we must stop it because
you've run out of your six minutes and now let me turn to the audience and give
them a chance to ask questions. Yes sir.
UNNAMED MAN: I'd like to ask something to Mr Peter
Shaw...
HUMPHRYS: No, no, address your questions this
time, if you would please to the 'yes' committee because they are the ones in
the firing line at the moment so if you've got a question for the 'yes' people
- Roy and Edwina - put your hand up please. Yes sir, over there.
UNNAMED MAN: Who would the Central Bank be
accountable to, I mean, assuming that Frankfurt will take over which
undoubtedly they will, who will they be accountable to on how they spend our
money?
HATTERSLEY: Well first of all Frankfurt's taken over
already. Our interest rates, our cost of living, the value of our currency is
more influenced by anything that goes on in Frankfurt than it is by what goes
on in Whitehall, so don't pretend or don't let me allow you to suggest that
they are not already determining very many of our financial decisions. There's
absolutely no reason in the world why a proper Central Bank in which we have a
say and a part shouldn't be under some control by the ministers of the
community. That was always a policy of the Labour Party before the last
election and there can be a proper democratic structure controlling.
There's an argument about whether
Central Banks should be under political control. I think they should, if they
should then it can be done in Europe.
HUMPHRYS: Right, another question from the
audience. Yes sir, the third or fourth row back, yes.
UNNAMED MAN: If all the countries in Europe don't get
on at the moment over one particular policy then how on earth are we going to
be able to control a single currency with all the European countries?
CURRIE: Well the fact is they do get on, they
get on very well. We export more to France for example than we export to the
United States. We are part of a very large operation, a remarkable, the
largest free market the world has ever seen, created from scratch. And we
should recognise that its population is as big as America and Japan put
together. We are all still learning. Now if they learn without us we are the
losers, we are the country that misses out. I was just going to add that we
should ask why Germany is richer than we are, why France is richer than we are.
Partly because they have had central banks which have not taken any notice of
the politicians and which have kept their economies on an even keel.
HUMPHRYS: Right, one very quick question. One
more very quick question from the audience. I can't see any more hands up.
Yes sir, there, there we are. Make it a quick one please.
UNNAMED MAN: The ERM failed miserably. How would
they bring in a single currency?
HUMPHRYS: Fifteen seconds.
CURRIE: It's 1996, it's already happened as far
as other countries are concerned. It wasn't ERM that failed. It was still
there. It was the United Kingdom that decided to pull out. We didn't need to,
we could have done what the French did, we could have stayed in and we would
now not be bothering about whether we should be in a single currency - we would
be in it.
HUMPHRYS: Edwina Currie, Roy Hattersley, for the
moment thank you. That's the time up for the 'yes' campaign to defend their
case now they do the same to the 'no' campaign. Roy Hattersley and Edwina
Currie you have six minutes to cross-examine them.
CURRIE: If we don't join the single currency -
and we have a choice - then we would be once more on the outside of a major
institution of a developing Europe. How would we benefit from that,
particularly in economic terms?
SHORE: Enormous advantages of not being in a
fixed exchange rate. You saw the one time when Britain has been - for many
years - in a fixed exchange rate with European countries. That was the ERM.
During that period unemployment in Britain rose by a million and further more
we were driven out of that exchange rate because we couldn't hold it in a
disastrous way in the summer of 1992. Since then we have had currency
stability, we have been floating, we have been free to determine our own
currency and every European currency has followed suit and are now floating
fifteen per cent on either side.
CURRIE: Let me just pursue you a little bit.
How did we get richer as a result of all this? Why did we benefit from
allowing our currency to devalue? It doesn't actually float up again, does it,
Peter? It never floats up it keeps floating down all the time.
SHORE: It's the one way of correcting for
really major differencies between the productivity and efficiency of one
country and another. Edwina, let me put it back to you. Why do you think that
the dollar, why is the dollar not pegged against the yen? Because the
Americans know very well that if they did that the Japanese would drive the
life out of their industry in America and therefore they won't do it. Why
should we join up with the Mark and the other currencies?
CURRIE: Well, with respect, I mean, I thought
that you might just say well we could do things outside the monetary system
that we couldn't do inside. You haven't said that at all. Except to say we
could devalue our currency. The question is: What could we do outside that we
can't do now?
SHORE: You go ahead.
DUNCAN-SMITH: It's simply this. Edwina you were asked
the question, this answers your question. How would you get to there from
here? And the answer is you are going to have to fix exchange rates. You're
going to have to fix them and that's when the Sorrice's (phon) of this world
move in.
HUMPHRYS: That's a great speculator.
DUNCAN-SMITH: That's right. As soon as they have a
target they will make you move off that fixed exchange point. Now the truth is
that Sorrice made a lot of money on the ERM for a lot of other speculators but
what we don't hear is he had his fingers very badly burned when he tried the
same on the dollar yen which were floating and he accepts the fact. You really
can't predict things on a floating currency. And what are we going to do
outside? We do forty three point six per cent of our trade, total, with Europe
from the pink book.
CURRIE: But what's stopping us ...
DUNCAN-SMITH: The rest of Europe is outside of this
currency union anyway. So the point is that we are floating against all of
them. You are asking us to undergo an experience that you don't say the
Deutsch Mark has had. You say they have done very well but what you are now
saying to us is, no, abandon all that anyway because you are going to hand it
all over to somebody else, which the Deutsch Mark has never done and the
Bundesbank and say that's fine we don't even think we need to have any control.
It's a new experience.
HATTERSLEY: Reading your speeches, admittedly back
in 1993/94, now you wanted to stay out because you wanted a wholly unregulated
British economy. You compared us with Singapore, what we might be as compared
with ...
DUNCAN-SMITH: I never actually compared anybody with
anybody on that basis.
HATTERSLEY: Well you have but you wanted a wholly
unregulated economy.
DUNCAN-SMITH: I want essentially recognition of the
fact that the world is becoming smaller and that global trade is a feature of
what we are doing now and our investment flows are actually going to the Far
East, North America and the old commonwealth more than they go to Europe now.
HATTERSLEY: I'm sorry to pursue the actual question
I asked you. I am sure that is all fascinating stuff. But you have been
saying for two years you want a wholly unregulated economy which is not
possible inside the common currency system, haven't you?
SHORE: I've said for years, Roy, that I do want
an economy which will enable us as a British government to help create...
HATTERSLEY: I want your colleague to tell me whether
that is his ambition or not.
DUNCAN-SMITH: My ambition is simply this. That a
government that's elected by the people here who accept to take responsibility
for economics ups and downs should actually have the responsibility for that.
That's not being unregulated or regulated, that's allowing the electorate to
make the choice not unelected bankers.
HATTERSLEY: Well let me now ask Mr Shore, since
having singularly failed - I'm sure it's my fault - to get a straight answer to
a very straight question...
HUMPHRYS: I can assure you others have failed in
the past.
HATTERSLEY: ...your colleague wants a wholly
unregulated economy. That's been the nature of his speeches. Is that your
ambition for Britain outside Europe?
SHORE: No it isn't. I want to have sufficient
power over the British economy to really influence the prosperity of the
economy and indeed the level of employment. Unemployment is far too high and
the major instruments of regulating that level of unemployment and prosperity
are: one, our interest rate policies - which means we must have control over
our own Bank of England, secondly, our exchange rate - which means we must have
control over our own currency and thirdly, control over our own public
expenditure and taxation - which as you know is limited and controlled and
rate-capped under the European treaties.
HATTERSLEY: Assuming we don't go in. Do we leave?
Are you suggesting that we will have control over our own exchange rate or do
you think we ...
SHORE: Very substantially. When we left the
ERM ... when we were in the ERM we had to conform to what the German rate was
and we had an interest rate of over ten per cent. In order to stay in the ERM
the last desperate effort, Lamont put up the interest rates to fifteen per
cent. The moment we left the ERM we were able to start progressively lowering
our interest rate down to six per cent.
HATTERSLEY: Are you really telling me that when the
European Central Bank interest rates move, Britain's interest rates won't have
to move?
SHORE: Not necessarily at all. We shall be
influenced of course, not only by the Euro rate but by the dollar and the yen
and other currencies as well but we are not so hopelessly, as it were,
disadvantaged as you are suggesting.
HUMPHRYS: I have to stop the cross-examination
there - give the audience a chance. Isn't it nice to hear a politician
complaining about not getting straight answers from other politicians?
SHORE: But they don't give straight questions.
HUMPHRYS: Your opportunity to question the
politicians yourselves ladies and gentlemen. Yes sir, gentleman in the front
row.
UNNAMED MAN: I would just like to say that I am a
fervent advocate of the principles of free trade and I strongly believe that
countries that trade together will eventually grow together. In this respect I
am firmly in favour of anything that will facilitate the expansion of the free
trade argument as a whole and I believe that a single European currency would
do so by reducing the segmentations that exist within European markets at the
moment. How would the politicians respond to my argument?
HUMPHRYS: Right, how would you respond to that,
gentlemen?
SHORE: Well look, I am in favour of free trade
myself, very much so and I have no difficulty with that whatever but you know
you don't have to lose your identity as a separate country, you don't have to
give up your democracy, you don't have to give up having a currency in order to
have free trade.
UNNAMED MAN: But surely this argument should not
revolve around national sovereignty.
SHORE: But self-government and democracy surely
matters to you. You want to control the decisions that are taken affecting
your own economic life. Look, in North America they've recently formed NAFTA,
a huge free trade area. America, Canada and Mexico. Do you think Canada and
Mexico - let alone America - are now going to merge everything into a single
central bank? Do you think they are going to have a single currency? Do you
think they are trying to create a separate state covering the whole of North
America? Of course they are not! Not so stupid to do so.
HUMPHRYS: All right another question, yes sir back
there.
UNNAMED MAN: I believe perhaps that we should look
back in history slightly and really recognise the fact which seems to be time
and time again passed over - one should learn from history and if you look at
Europe as a whole I think that since 1945 we have regressed because of that
fact. We have not bothered to look at past history; we have concentrated
wholly on what is good for other countries without first looking after our own
interests.
HUMPHRYS: Right, should you not be thinking more
about what's happened to us in the last...
DUNCAN-SMITH: I'm a great believer in looking back in
history and I think what you find is that history tells you time and again when
you try to coerce people into an arrangement which they don't really feel
comfortable with then you get a movement to the extremes of politics and you
will see it when we go towards a single currency, simply because people will
find themselves unable to get their mainstream politicians to answer to the
problems. Now the ERM is history now, for us and for the rest of Europe but
what was the experience that taught us? That actually going for a political
fixing didn't work and we nearly crushed the economy in this country and across
the other ...
HUMPHRYS: One very quick question from you sir,
yes.
UNNAMED MAN: I'm very concerned with your statement
in your film that income tax in Britain will double and yet you said, your own
statement was, that in Germany when East and West combined with one currency
there was a seven per cent increase in income tax. How do you equate that with
a doubling of British income tax in the...
HUMPHRYS: Right and you haven't got very long for
this one either.
DUNCAN-SMITH: It's a very simple point. What you've
got here is the extrapolation of the McDougal report which was quite clear.
It's actually talking about an increase of some six and a half times our budget
contribution to Europe. The experience in Germany if taken out and
extrapolated here would actually run to four or five times the level that we
put up in that. The truth is the Germans have already got a seven per cent
surcharge - again year on year - for the costs of unification. That is
peculiar to Germany, it would be far larger if it were across Europe.
HUMPHRYS: Thank you gentlemen very much indeed.
So the end of the campaign is in sight and the audience will cast their votes
in a few minutes. But let's give each side now a minute to sum up their cases.
First for the 'yes' campaign, Roy Hattersley. One minute.
HATTERSLEY: Britain's future lies in Europe. Not as
a timid, fearful, reluctant partner but as a participating member who will help
to shape Europe in the way that benefits this country. Don't believe for a
moment that by being enthusiastic and prosperous and powerful within the union
we lose our national identity. The French don't believe they've lost theirs or
can lose theirs. The Germans don't believe they are going to be obliterated in
some amorphous European state. They actually believe that by becoming more
prosperous, by growing stronger, they can maintain all those things they had
been proud about in the past. In my experience, there's no alternative to
prosperity for doing what a democratic government wants to do.
If we are more prosperous we'll help the
foreign countries that need our help more. We'll help the poor in Britain
more, we'll invest more. Europe offers a unique chance to break out and break
forward. It would be a tragedy if we were to turn it down today.
HUMPHRYS: Roy Hattersley, thank you very much
indeed for that. And now for the other side, for the 'no' campaign. Peter
Shore, one minute.
SHORE: What matters of course is that we do
have self-government and democracy in Britain now and what is at risk -
grievously at risk - in this proposal to merge into Europe, is that very
self-government that we have so long cherished and which we must at all costs
preserve. You see, there's a different agenda in Europe from what there is in
Britain. In Europe - and as you will have heard from Monsieur Santer only a
few hours ago - the aim is to create a new state in Western Europe. It's not
just about co-operation and free trade and a single currency, it's to create a
new state, a state which will reduce Britain to the kind of position that
California and New York is in in relation to the United States. A new state
with a new currency of its own, a central bank of its own, armed forces of its
own, citizenship of its own - that's the aim and the agenda of the Euro
federalists, people who run Europe politically but who do not speak for their
own people.
HUMPHRYS: Peter Shore, there I must stop you,
you've had your minute. Thank you very much indeed.
Now the newspapers are obviously going
to play a vital role in the campaign. Remember that Sun headline from some
time ago after the last election? 'It was the Sun what won it'. Well, while
our campaign has been raging here this afternoon, the papers have gone to press
and they have very kindly sent over to us some of their first editions for us
to see. The Mirror hasn't actually reached us yet but I can tell you that it
has come out in favour of the single currency. The other tabloids tend to take
a different view - there's the Sun: 'Hands off the pound, tell Brussels where
to stick its ECU'. Surprise, surprise. And the Star, another tabloid, has
done much the same, only 'Hans off', rather clever, that one. And the bottom
bit says: 'You can stick the ECU up your Kohl hole'. Right, that's the Star.
Today, a bit more neutral but it has a
picture of the Queen and of Mr Kohl there, Chancellor Kohl, so perhaps it's so
you can choose between one and the other. That's Today. This is the Times, it
has a leading article and it has come out on behalf of the 'no' campaign: 'Save
the pound,' it says, 'the case for surrender has not yet been made'. That's
the Times.
The Daily Telegraph, again I don't
suppose this will surprise you. 'An idea whose time's,' single currency that
is, 'An idea whose time has not come'. And there we have a very gloomy
Brittania looking very sad at the prospect of it all. 'A single currency or
the end of a nation,' writes Simon Heffer. He thinks the worst is going to
happen if we have a single currency. The European, well this may surprise you:
'Why Britain must say no to the ECU'. So the European says no to the ECU.
European says no to Europe.
Financial Times is altogether less
decided: 'Decision day looms for single European currency'. They didn't want
to say one way or the other how they thought people ought to vote. The
Independent, that has no doubt about it at all. 'Britain goes to the polls' it
says, but there under the comment on the front page: 'It is time to move
forward, vote yes'. Very clear that is.
The Guardian's got a funny old front
page - ignore that picture there, I'm not sure what that means. 'Single
currency is here,' it says. They won't actually tell us what they would
recommend in the real campaign but they are making the assumption that we would
vote yes. Well, would we? Now remember, when our campaign in this studio
began an hour ago our audience was evenly divided between those in favour and
those against. Has anyone been swayed? Well, let's remind you of the
question. Should the United Kingdom take part in the European Currency? So,
members of the audience would you please press your buttons now. Yes, No or
Undecided still.
And there is, I'm just waiting for the
last of the votes to be registered. There is a clear swing and it is a swing
in favour of the 'no' campaign. Forty seven per cent no, thirty three per cent
yes. Interestingly there's a rather large number still undecided, so you've
not persuaded them, many of them, one way or the other ladies and gentlemen.
So, Roy Hattersley, what do you make...? You lost on the basis of this.
CURRIE: Can we have their advertising company?
HATTERSLEY: I tell you what I made of it, I mean
I've been through five election campaigns in which I have won the argument and
lost the vote. It's happened again today.
HUMPHRYS: Why do you think, I mean this is an
audience who was quite prepared to be swayed, obviously, as they have shown, as
they listened to the arguments. They have asked their own questions, they are
now much better informed than they were - or at least they ought to be much
better informed than they were before it all began, so what do you think?
HATTERSLEY: If I were a gentleman I would say the
other side did better than we did but I would be lying if I said that. No, I
think there's still a great deal of emotion buried under the reality and when
we get to the real campaign we will have weeks of very, very intense
examination of the real facts. I mean the Party Political Broadcast done by
Andrew Neil, I don't think the BBC would let him get away with because they
actually want a Party Political Broadcast to contain truth rather than
invention.
HUMPHRYS: I am not sure we have much influence
over that under the Act but there we are. The parties make their broadcasts
and we transmit them, that's the rule isn't it.
CURRIE: But this country generally tends to be
rather resistant to change, it's one of its best qualities. When the point is
seriously put - as we hope it will be in due course - I think many of the
arguments will be argued much more thoroughly. If we don't, if we think on to
the future we will find ourselves with the European currency in existence and
us not in it, there will be three world currencies: the dollar, the yen and the
Euro currency and sterling will be nowhere.
HUMPHRYS: All right. Let me just give you
gentlemen about thirty seconds to gloat, if that's what you want to do.
What do you think won it for you?
SHORE: I think the vote reflects the basic good
sense of the British people of which this is simply a representative sample and
I think undoubtedly the arguments against are really very, very powerful
indeed.
HUMPHRYS: OK, let me ask the audience then now.
Which of you changed your minds during the course of that debate? Right,
gentleman there, I think we started with you, didn't we and we asked you
whether you were undecided. Now you obviously came down on the side of the
'no'. Why?
UNNAMED MAN: Most emphatically because I think two
points remain. First of all the question of accountability. And secondly the
fact is that a fixed exchange rate is unhealthy.
HUMPHRYS: So you weren't swayed by patriotic, as
it were - I use the word loosely, but the sort of patriotic arguments one way
or the other. It was straight economics.
HATTERSLEY: Can we ask him a question?
HUMPHRYS: Ask him a question, by all means.
HATTERSLEY: Well if you don't believe in a fixed
exchange rate as a matter of principle, how come you were neutral to begin
with?
UNNAMED MAN: I just wanted to be clear on the issues.
HUMPHRYS: He hadn't decided. He's allowed to be
neutral if he wants to be neutral.
HATTERSLEY: Just interested.
HUMPHRYS: No, no, I take your point. But we don't
question our ... the credentials of our guests.
Yes sir.
UNNAMED MAN: My main concern .. my main concern at
the start I was totally open minded but I had a very strong concern that
something this major, when we've seen Europe make mistakes before on the common
agriculture and the ERM, my concern was that trying to do it in a one or two
yeartime span, if someone had said they would do it in twenty or thirty years
and get it right, trying to rush it through in two or three years, I was very
very concerned about that and in the short term, I see too many problems, I
dont' see, I don't see the clarity for that (sic).
CURRIE: But you know...
HUMPHRYS: No no I'll stop you Edwina, I want one
more comment from the audience if I may, yes sir at the end, yeah.
UNNAMED MAN: The reality of the situation is that if
there ever was to be a referendum on a single European currency, it would not
by on such a narrow issue, it would come down as to whether the British public
felt it would be a sign post towards a united states of Europe.
HUMPHRYS: Right and on that note I fear we must
end it we've run out of Roy Hattersley applauding there. That's it, it may
never happen of course, there may never be a referendum but one way or another
a decision is going to have to be made. I hope that we have at least helped to
illuminate the debate. We'll be back to normal On The Record next week.
Goodbye.
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