On Sunday 08 March Andrew Marr interviewed Lord Mandelson, Business Secretary. Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used. Lord Mandelson defends part-privatisation plans. ANDREW MARR:  Lord Mandelson, Business Secretary |
Now then, two cabinet ministers - the Work and Pensions Secretary James Purnell and the Energy Secretary Ed Miliband - are calling for "calm and unity" inside the Labour Party in the face of testing and indeed turbulent times. But their colleague Peter Hain also says they need to do more to set the voters pulses racing with new and different ideas. Well the strategist of New Labour, now a key figure in the government again, Lord Mandelson, is with me. Good morning, Lord Mandelson. LORD MANDELSON: Good morning, Andrew. ANDREW MARR: Before we turn to those aspects of politics - former Northern Ireland Secretary, you must look at the events of late last night with horror and ask yourself is this the return of something we thought had gone away? LORD MANDELSON: It isn't the return of something that's going to destabilise or throw away the peace process. That is here to stay. But I would like to offer my condolences to the families of those who have been killed or injured in what is just plain cowardly, futile barbarism. But the difference between the Northern Ireland now and the past is that all shades of political opinion are going to be united in condemning what was done last night. There's nobody in Northern Ireland who wants to take the province back to its violent past and that's a very, very key difference. ANDREW MARR: So do you think it was a splinter of a splinter of a splinter? LORD MANDELSON: Yes, and they're multiplying and they're fragmenting and we have to maintain our guard against them. But the overwhelming bulk of Northern Ireland society is absolutely determined. Whether they are Nationalists and Republicans or Loyalists and Unionists or whatever, nobody wants to go back to this past and the people are not going to allow these fragments, these killers to drag Northern Ireland backwards. ANDREW MARR: And it's presumably it's the mainstream Republican voices at a moment like this which have now become quite important? LORD MANDELSON: They're very important and they have to choose their words very carefully. Obviously they don't want to say or do anything that's going to give any sort of strength or momentum to these dissidents and so they will be very careful in what they say, but at the same time they have to align themselves with what everyone else in Northern Ireland wants and that is to go forwards, not go backwards. ANDREW MARR: Let's turn to the domestic scene. LORD MANDELSON: Yuh. ANDREW MARR: The Royal Mail debate comes into the Lords I think on Tuesday. LORD MANDELSON: On Tuesday, yeah. ANDREW MARR: On Tuesday. Of all those Labour MPs in the Commons who don't hold a government position, more than half of them are against it. The Liberal Democrats are also now coming out against it. Do you think this is actually a battle you're going to lose? LORD MANDELSON: Well the Liberal Democrats are coming out against it because they want to go the whole hog in privatisation, so don't confuse their position. Look, I didn't come into government asking for this argument. I didn't pick this fight. It had its origins in the conditions of the Royal Mail and in a report that was commissioned before I came back into the government. Nor do I wish to be defined by it. But at the same time, Andrew� ANDREW MARR: (over) But is it a fight you could have put into a drawer? LORD MANDELSON: (over)� Well Andrew, this is precisely the point. You know the situation in the Royal Mail is very serious. The finances have to be turned round. It is losing much business, much revenue because people are turning from letters to emails and texts. There is a spiralling pension fund deficit. And, I'm sorry, I just don't think I can walk away and put it into a bottom drawer and say this is for somebody else to sort out; and sort out, incidentally, in a way that we may not choose to do so in the plans that we're bringing forward at the moment. But I do think� ANDREW MARR: Sorry, could you just explain that? LORD MANDELSON: Well, I mean if� ANDREW MARR: You're going to look again at the plans? Is that� ? No, no. LORD MANDELSON: (over) No. No, no, no. Look, if we don't sort this out� ANDREW MARR: Somebody else will. LORD MANDELSON: � and simply put it off to another day, and in theory to another government, are they going to sort out Royal Mail in the way that we're choosing to do at the moment - just getting in a minority strategic partner, sorting out the regulator and the competition, sorting out the Pension Fund? I think people should look at what we're proposing as a government and see it as a much better deal for the Royal Mail and those who work in it than anything any alternative government would have to offer. ANDREW MARR: Is this primarily a sort of financial problem - there's the Pension Fund, there's all these things we need to spend money on; we haven't got enough money; therefore reluctantly we have to bring in a private partner? Or is it more than that? Is it� LORD MANDELSON: No, it is more than that. It is more than that. ANDREW MARR: It's about ideology? LORD MANDELSON: Look� It's not about ideology. It's about transforming a business which is desperately in need of change and modernisation. And we have tried again and again as a government during the last ten years to find the right way forward and, frankly, we have not succeeded. Now I think this is the sort of last throw of the dice for this government in trying to find an acceptable, consensual way forward. And let me just say this. It's nothing to do with privatisation, as the union maintains. It's about finding a partner that's going to help us transform this. And incidentally it's� ANDREW MARR: (over) And so you think the managers from TNT or whoever are going to run this business better; the people that you're going to bring in? LORD MANDELSON: They're going to� If it is TNT - and they're already a significant player and employer in the United Kingdom as well - but there are others showing an interest, other European postal operators showing an interest in providing partnership and teaming up with the Royal Mail - it is not they who will be doing it by themselves. They will be doing it with the workforce, with the management, and with the government shareholder that will retain majority ownership on behalf of the public of the Royal Mail. And I must just make this point as well, Andrew. Not only are people pretending that this is about privatisation in their propaganda against what the government is saying. They're also saying it's about changing the Post Office. It isn't. It's about the Royal Mail. And it is not incidentally either about putting the Royal Mail into the hands of foreigners, as they maintain. We, the government, on behalf of the public will retain control of the Royal Mail. We're not putting it into the hands of foreigners as the union would like to maintain. ANDREW MARR: Talking about we, the public, having the controlling voice, let's move to the banking system where you now as a government, on behalf of the people, have the majority stake in a range of major British banks. What a lot of people don't understand is exactly what that means and what it can mean. Would it not be better, as some have said, to go for full-scale nationalisation, or at least to put politicians or politicians' servants on the board of these companies to ensure that the lending that you want to see in the economy actually happens because it's not happening at the moment? LORD MANDELSON: Well I don't think it's either necessary or desirable to make that move at this stage, and I do not believe it has yet become inevitable. I think it is better for the banks, with all the government interest and the taxpayers' stake in these banks - from which incidentally in the longer term the taxpayer will get back quite a lot in return� ANDREW MARR: Maybe, maybe. LORD MANDELSON: No, I think� I'm pretty confident of that and I actually don't believe the taxpayer should be asked to put anything into these banks without knowing that eventually the taxpayer's going to get something back. I think that's a very important principle. But at the moment what the government is able to do is to exercise a great deal of influence over the restructuring, change and reform of the banks and their direction without taking that final step of taking away the share� removing the shareholders from the banks. And I think that as things stand at the moment� ANDREW MARR: (over) That's what I'm probing in a sense because� LORD MANDELSON: Well I think as things stand at the moment, that's where we need to be, that's where we ought to be, and I disagree with those who argue that it's inevitable that we would have to take that final step. ANDREW MARR: Well when we focus, when the papers focus on particular individuals - there's another banker across the paper today, it was Fred Goodwin last week with his pension and ministers express outrage and say something must be done - people are confused because it appears that nothing can be done actually by ministers despite the fact that the public now own these institutions. LORD MANDELSON: No, that's simply untrue. The government, when we stepped in and intervened in these particular banks last autumn, changed the system of reward, of remuneration and bonuses. We did that immediately and we will maintain that position. But we've got to go further. We have got to change the transparency and corporate governance of the banks. We've got to not only change the system of remuneration and bonuses here. We've got to do it internationally. And we've also got to change� ANDREW MARR: (over) You can't do it internationally with respect. LORD MANDELSON: Now hold on a moment. Let me make this point. We've also got to change� ANDREW MARR: You can't. LORD MANDELSON: Hold on a moment. We've also got to change the regulatory system within which the banks operate not just in this country, but crucially that has to be joined up internationally because these flows of funds are not simply national. They are international in the global financial system we have now and, therefore, the international changes that we need to make become all the more important, which is of course at the heart of the G20 meeting that the government is hosting at the beginning of April. That's the new sort of steering committee, if you like, of the global economy, and people frankly should take pride in the fact that it's we in Britain who are hosting that and it's our government who are driving it. ANDREW MARR: Looking back, what did you� what do you think was got wrong when it came to dealing with the international banking system, regulation of the banks, because clearly something badly went wrong? LORD MANDELSON: (over) I think what was got wrong� Well I think what was got wrong was that the regulatory system that we put in place in this country - I mean pulling together a rather fragmented, self-governing set of arrangements, we brought them together, made them coherent and put them on statute, and I think the overall model of that was right. Within hindsight, the regulatory system might have been wider and tougher and it might also have focused not just on the solvency on banks but their liquidity too. But what essentially has happened� ANDREW MARR: Sorry, just on that though. Do you not accept that politicians, like many other people over the last ten years, became sort of too starry-eyed about the bankers; started to believe that they could do things that they couldn't� LORD MANDELSON: No� ANDREW MARR: � believed their propaganda in a way? LORD MANDELSON: No, I don't think that's the real problem. I may come back and discuss that in a moment. But what I was going to say - that in essence what has happened is that the whole globalisation of the financial system has taken place more rapidly and in a more far reaching way than was anticipated when that original regulatory system was put in place. I don't think that the regulatory system has kept pace with those changes that have unfolded across the international financial system. That's why we� ANDREW MARR: So that is� LORD MANDELSON: � that's why we have to learn lessons and move it on a step further. ANDREW MARR: So that is a mistake and when people say� LORD MANDELSON: Well� ANDREW MARR: � actually it would be frank, it would clear the air for the government to say sorry about that, it would be plain dealing? LORD MANDELSON: But, Andrew, of course lessons have got to be learned, but the lesson that has got to be learned is that the entire international financial system was changing in a� more quickly and in a more far reaching way than our� ANDREW MARR: Than was realised here. LORD MANDELSON: � than the regulatory system in every single country in the world recognised and kept pace with. Now my� ANDREW MARR: Sorry, can I just interject for a second? LORD MANDELSON: � well my problem with� ANDREW MARR: When people say, when people say we'd like the government to say sorry� LORD MANDELSON: Well this is exa� ANDREW MARR: � it's not, it's not that we want the government to say sorry on behalf of the international regulatory system but just for those things that happened here. LORD MANDELSON: But Andrew� ANDREW MARR: Lots of people are to blame� LORD MANDELSON: I know. ANDREW MARR: � including the government. LORD MANDELSON: I know. But the way in which this sort of 'apology' story is being driven by your political reporting staff makes out that this is some sort of you know political story for which the government is to blame or that this is some national crisis. ANDREW MARR: The government is partly to blame, surely Lord Mandelson? LORD MANDELSON: Let me finish making my point, if I may, that this is some sort of national crisis for which you know the government has to offer an apology. If it were as simple as that, if it were as simple as that, I think we would be� we would be not focusing on the right issue at the right level. ANDREW MARR: I, I think� LORD MANDELSON: And I� And I think that whilst the government and the Prime Minister himself have been absolutely right to say you know we should have gone further, the regulation should have been tougher, you know we should have kept it up and its pace of change should have kept up with the way in which the international financial system was changing, we have to learn lessons from that, we have to see what went wrong. That is precisely why we're making the proposals now and why we're leading the debate in the G20 to make sure that these lessons are learned and that we avoid any such crisis emerging in the future. ANDREW MARR: I'm just putting it to you that if the government was able to say look, we all went along for the ride, we didn't get it right. I mean George Osborne in the Conservative Party has said you know we weren't on the ball either. Nobody was on the ball! And actually� LORD MANDELSON: Well� (laughs) ANDREW MARR: Well no, and including government. LORD MANDELSON: Well it's rich, it's rich coming from the Conservatives� ANDREW MARR: Well� LORD MANDELSON: � who oppose the very regulatory system that we put in place over those years. So let's not take any lessons, please, from the Conservatives. ANDREW MARR: Alright. LORD MANDELSON: All I'm saying to you, Andrew, is this. This sort of you know idea that this is some sort of national political event - somebody has to take the blame, somebody must have done something wrong, let's therefore get somebody's scalp on the table - this is the stuff of domestic political reporting. This is an international economic phenomenon and that's what we've got to focus on putting right and making sure that it doesn't happen again. ANDREW MARR: Well let's, let's turn to the real economy� LORD MANDELSON: Yeah. ANDREW MARR: �and let's turn to the lack of funds still flowing through. Vauxhall in terrible trouble. Is the government going to help them? LORD MANDELSON: Well Vauxhall is in terrible trouble because its owners, General Motors, are in danger of becoming insolvent. I say in danger because it hasn't happened yet. And that's not to do with ordinary bank lending. This is a much bigger and wider issue. And, yes, the government is very focused on it. I've spoken three times in the last week to the President of General Motors in Europe. I've also spoken to the German Economics Minister because their plants are similarly affected and we will approach what we need to do together on this. ANDREW MARR: We hear stories from all over, as I'm sure� you know you're at the centre of this, of businesses in terrible trouble partly because of bank lending, partly because of the lack of spending. Just take us through what you think the next few months are going to be like? LORD MANDELSON: I think the next few months are going to be tough, but I'm really confident that where we are in relation to the banks now is the right place to be in, that the measures that we have put in place, the instruments that we've created will in time work but they won't happen automatically or overnight. That's obviously the case. Where I am worried is not so much in the supply of lending, although that will take time to get back to normal. I'm as worried about the demand for lending - you know that we're going to see the new businesses, the growing businesses, the innovative businesses that are going to be coming to the banks with requests for lending. And there I think the government has got to be more active. I believe in a greater industrial activism by the government to lend a much more supportive hand and framework for� ANDREW MARR: To industry. LORD MANDELSON: � into industry and for businesses to spot the opportunities in the supply chain both in our country and internationally. ANDREW MARR: (over) More engineering and less financial engineering, as you've put it in the past. LORD MANDELSON: Well I have put it in that way and that's what I believe. We have to rebalance the economy and we cannot any more take for granted that the market economy is going to work perfect and is going to carry all before it. We have to work more closely with markets and with the private sector as a government in order to make sure these changes happen. ANDREW MARR: (over) Right. And� LORD MANDELSON: In contrast, I might say, to the Conservatives who simply say well Britain's broke, it'll fix itself and the government should do less. ANDREW MARR: Well� LORD MANDELSON: I don't think that's an answer at all. ANDREW MARR: No recovery this year? Recovery next year possibly? LORD MANDELSON: We will start to see changes taking place in the economy this year, but I am not going to put a timetable on when the recovery will start to take place. ANDREW MARR: You famously already had a large amount of green gloop thrown at you, or custard. LORD MANDELSON: (laughs) Very unpleasant it was too. ANDREW MARR: Do you always carry a change of suit because you reappeared remarkably quickly? LORD MANDELSON: Same suit, different tie, brilliant young Private Secretary, tie to the fore. New tie to the fore. ANDREW MARR: Quite seriously, were you slightly disconcerted that the woman concerned wasn't arrested, that she could get to you so quickly? (Lord Mandelson laughs) I mean you know it could have been something nastier. LORD MANDELSON: It could have been something nastier and it did actually leave a slight sort of irritation on my face. But I mean not only was I slightly surprised that she could just sort of saunter off without being apprehended. I was also slightly disappointed that some in the media just took her into their studios and started interviewing her, which is I think an advertisement you know for� ANDREW MARR: (over) Well you're a former Northern Ireland Secretary. I mean it's quite surprising that somebody could walk straight up to you. LORD MANDELSON: A bit surprising. But I mean, look, you know we live in a� We don't live in a police state in Britain, and thank goodness for it. I mean you know there are security measures where people need them. I used to have twenty-four hour permanent security. I would on balance prefer not to go back to those days. But you know, look, I'm not going to comment on this further. This is a matter for the police and the personal protection folk, not me. ANDREW MARR: Lord Mandelson - for now, thank you very much indeed. LORD MANDELSON: Thank you very much. MAIN INTERVIEW ENDS SOFA QUESTION ANDREW MARR: I guess the only thing we didn't, the obvious thing we didn't talk about earlier on was actually what's going on inside the Labour Party� LORD MANDELSON: Yeah. ANDREW MARR: � because there is, you know there seems to be a fair amount of manoeuvring; and on the face of it, it's not inevitable that Gordon Brown will be the Prime Minister at the next election, is it? LORD MANDELSON: I think all this so-called manoeuvring is a lot of media fluff without legs - I mean if fluff can have legs. I don't know whether it can or not. ANDREW MARR: I don't think fluff could have legs under these circumstances. LORD MANDELSON: No, but I mean it's a lot of� You know, look, come on. Look all I know is that� ANDREW MARR: There isn't a sort of atmosphere of jitter and sort of nervous breakdown? LORD MANDELSON: I don't really, I don't really find it. I find the government is really focused, really determined. And the Prime Minister works like a Trojan. I mean he gathers and sorts out complex issues and problems like a combine harvester. So he's going to carry on. He's well focused. He knows what he and the government have to do and we're going to carry on doing it. But of course we have to renew ourselves. We have� ANDREW MARR: (over) And you, you wouldn't� you wouldn't consider giving up your peerage and coming back into the Commons? LORD MANDELSON: No, I can't. I'm not allowed to. But one thing I do know is that as well as leading Britain through this recovery, we've also got to remain the change makers in British politics. We've got to renew ourselves in office as well. And that's hard, given all the pressures, but we've got to do both those things. ANDREW MARR: Alright. Thank you very much. INTERVIEW ENDS
Please note "The Andrew Marr Show" must be credited if any part of this transcript is used.
NB: This transcript was typed from a recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy
Your comments
Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.
| 
E-mail this to a friend 
Printable version 
Bookmark with:
What are these?