On Sunday 15 March Andrew Marr interviewed Douglas Alexander, International Development Secretary. Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.  |  I would expect that as we move towards the leaders' meeting in a couple of weeks time, there will be even more detail in terms of the work that the IMF can do |
Douglas Alexander on volatile polls and how recession has changed the "rules of the game". ANDREW MARR: The eyes of the world are going to be on the G20 Summit in London next month, one of the biggest gatherings of international leaders in modern times in the face of what's often described as the 'gravest crisis since the Second World War'. The Prime Minister stakes his political reputation on a successful outcome. And I'm joined now by his long-time ally, the International Development Secretary, Douglas Alexander. Thank you for joining us. DOUGLAS ALEXANDER: Good morning. ANDREW MARR: Good morning. It doesn't seem to have gone terribly well, the first part of this - the meeting of the finance ministers. No agreement on international fiscal boost as the Americans and Britain had hoped for - France and Germany saying no to that; and at the same time no agreement yet on a reforming of the financial system. DOUGLAS ALEXANDER: Actually I disagree. I spoke to Alistair Darling last night after the finance ministers' meeting, which comes ahead of the meeting with Chancellor Merkel today and the African leaders tomorrow, and there were really three key deliverables out of yesterday's meeting. First of all, we had agreement from everybody round the table to do all that was necessary for as long as is necessary, and that sends an important signal to the markets. Secondly � ANDREW MARR: It's a bit vague though, isn't it? DOUGLAS ALEXANDER: Well there was a recognition that with twenty different countries represented around the room, the fiscal response is going to vary from country to country. But there was an agreement that everybody needs to act. Secondly, there was agreement that there needs to be significant additional resources for the International Monetary Fund because there are a number of countries that are suffering as a consequence of this. ANDREW MARR: And yet, and yet no agreement as to where that money's coming from. DOUGLAS ALEXANDER: Well the IMF can borrow, and in that sense it can go to the international capital markets. And I would expect that as we move towards the leaders' meeting in a couple of weeks time, there will be even more detail in terms of the work that the IMF can do. ANDREW MARR: If you look at the main meeting as it comes, your colleague, Lord Malloch-Brown, has said that if that is not successful, we're going to see sort of mayhem in the markets the day afterwards. It really is an absolute expletive or bust moment, isn't it? DOUGLAS ALEXANDER: Well it's an important moment, but we're working on planning for success, not for failure. I mean there was a meeting in London I think in 1931 where the world came together, failed to reach agreement on the way to deal with the recession at that time, and we all know the consequences. The fact is we do have a heavy responsibility to stop protectionism taking hold, making sure that in the interests of British consumers and British workers we do actually get to a position where they can export their services and their products over the years to come. So it's vitally important here in Britain, but it's also vitally important in the developing world as well. ANDREW MARR: Big difference, nonetheless, at least in emphasis between ourselves and the Americans. DOUGLAS ALEXANDER: No, I wouldn't agree with it. ANDREW MARR: No? DOUGLAS ALEXANDER: I mean Tim Gardner was in town for the last couple of days, the US Treasury Secretary. They clearly have an attitude that the greatest risk is inaction rather than action. They've taken a very significant fiscal stimulus, as it's called, an economic boost for their economy. We've done the same. I think there's broadly a consensus and that was reflected in the communique yesterday. ANDREW MARR: And France and Germany, they're keen on the regulation side; but Angela Merkel was just saying yesterday again very, very un-keen on another stage of fiscal boost. They think we've all spent enough. Let's see what happens. DOUGLAS ALEXANDER: But that's partly because Germany's already had two major fiscal stimuli already, two big economic boosts. The French have done one already. ANDREW MARR: As have we. DOUGLAS ALEXANDER: And they signed up yesterday to the fact that if there needs to be more action, they're prepared to take more action. Let's see what Angela Merkel says after a meeting with Gordon today. ANDREW MARR: Ah, right okay. There's been an endless debate about you know who should say sorry for what and so on. Putting that all to one side, do you not think that over the past ten years or so almost everybody, but certainly including the political class and the government themselves, just became a little bit too starry-eyed about bankers and banking? They became seen as sort of super people who were able to kind of conjure profits out of almost nothing and everybody got a bit na�ve about them. DOUGLAS ALEXANDER: Well there's no doubt that financial services has been an absolutely central growth area in years to come. We're sitting in Edinburgh. I think the sixth largest private sector employers in Edinburgh are all financial services companies. ANDREW MARR: And falling. DOUGLAS ALEXANDER: Exactly. That's why it's important that the right steps are taken. In terms of the political classes, well it's not the political classes alone. If you look at the regulators around the world, I don't think they fully understood what's now called 'systemic risk' - the fact that some of these products were leading to huge risks right across the system. No regulator � ANDREW MARR: (over) Bankers brought in, bankers admired, bankers given awards and honours of all kinds. I mean everybody at the moment is saying you know it wasn't just � it was them as well. It was the politicians. DOUGLAS ALEXANDER: Well, listen, are we angry with the effects of the banking crisis on our constituents' lives? Of course we are. I see people losing their job every week. ANDREW MARR: (over) Do you look in the mirror and say actually I wish, I wish I'd taken these people less seriously in the past; I wish I'd looked more closely and tried to understand what was going on in the City? DOUGLAS ALEXANDER: I think you've got to take banking very seriously. If you look at the crisis in banking just now and the impact that it's having on exports, on services, on employment, it's absolutely vital that the right regulatory steps are taken, and right around the world I think regulators missed some of the big risks that were being run. But if we've learnt anything in the last six or seven months, it's the extent to which having a healthy banking sector is absolutely vital not just for banking but actually right across the economy. ANDREW MARR: You keep saying, if I may say so, "right across the world and right across banking". A lot of the worst mistakes were made here in Edinburgh by Scottish bankers, including Sir Fred Goodwin, who's got his knighthood. I don't know whether you think he should be stripped of that. But this is not entirely a world created problem. A lot of it happened here. DOUGLAS ALEXANDER: Yes and I think people here in Scotland are as indignant as anywhere else about the decisions that were being taken in the boardroom frankly by people who were paid a vast amount of money and should have understood the risks that they were running not just with other peoples' monies, but with fine institutions like the Royal Bank of Scotland and HBOS, which had served Scotland well for many years. ANDREW MARR: One of the other stories running in the papers we talked about a moment ago was the alcohol story - a sort of substantial rise in the price of alcohol to cut drinking. Would you like to see that happen? DOUGLAS ALEXANDER: Well let's see what they do in the Scottish Parliament. At a UK level, we've just introduced within the last three months mandatory guidelines on what we regard as highly responsible promotions - the kind of all you can drink Happy Hours. I think that's the next step. But we're not ruling anything out in the future. Let's see the evidence that emerges. ANDREW MARR: (over) I mean Liam Donaldson would like to see 50p per unit. DOUGLAS ALEXANDER: (over) Well Liam Donaldson's a distinguished clinician. He'll publish his report in due course and then the government will consider it. But I can't pre-judge the outcome that the government will offer today. What I can tell you is we're taking action just now to deal with the worst excesses of these kind of Happy Hours that cause all kinds of problems. ANDREW MARR: With your international development hat on, there's been talk of perhaps 200 to 400,000 more children dying within a short period of time because of the recession, because of the financial crisis affecting the third world. Is that realistic talk? DOUGLAS ALEXANDER: I'm afraid it is. I mean there was a belief, a wrong belief at the beginning that because Africa and the developing world were isolated from the financial system, they were quite peripheral, that somehow they would be protected from the effects of this global downturn. I was in Kenya this week. We're now estimating that about 90 million more people are likely to be pushed into extreme poverty just over the next couple of years and that's why we're announcing today a new �200 million vulnerability fund. That will contribute to ��. fund going to be held by the World Bank which we believe can run to several billion dollars. That's the kind of practical action that we need to see out of the G20 Summit in London. ANDREW MARR: You've been put in charge of planning the election campaign for the Labour Party. Not perhaps the easiest job that anybody's got at this stage. The G20 Summit is the last hope for the Labour Party not being hammered at the next election, isn't it -getting that to be a success? DOUGLAS ALEXANDER: Listen the G20 Summit matters because it matters profoundly to the economy and prospects of people here in Britain and right around the world. On its own merits. ANDREW MARR: But as a party, it's your last throw as well. DOUGLAS ALEXANDER: Well if you look at the polls, I mean we saw the polls with Labour pushing ahead of the SNP in Scotland this morning. The polls are very volatile and in that sense if we've seen anything over recent months it's the extent to which the recession has changed the rules of the game. I mean if I was arguing from a Conservative point of view at the moment, then the arguments in favour of deregulation, privatisation, they wouldn't make much sense. I do believe there's a real opportunity for Centre Left parties like Labour to say there are limits to markets and markets need morals. That's traditionally the position of the Labour party, not the Conservative Party. ANDREW MARR: But they have cleared some of the ground by saying sorry, we did get things wrong, we didn't understand what was going on. And you won't do that. DOUGLAS ALEXANDER: But listen, we're both in uncharted waters as we look ahead. I would argue that on the Left we have a compass. We know that there are values beyond the market that need to be upheld in society. It's the Conservative Party traditionally who've been in favour of much greater deregulation. They don't have the solutions that the country faces and that's why ultimately I'm pretty optimistic despite the challenges that we face. ANDREW MARR: Douglas Alexander, 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
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