=================================================================================== .................................................................................... ON THE RECORD FRANCIS MAUDE INTERVIEW RECORDED FROM TRANSMISSION: BBC ONE DATE: 21.2.99 .................................................................................... JOHN HUMPHRYS: The Shadow Chancellor, Francis Maude is in our studio at the moment. Mr Maude, they've got to make preparations have they not, and it would be irresponsible not to do so wouldn't it? FRANCIS MAUDE: Well if you're going to make preparations you should actually make the absolute commitment. What they've done is made the commitment in principle to joining, but without spelling out what the implications are, and I think you know - you talk about preparing, but what they mean is encouraging people and particularly businesses to sink huge amounts of capital into preparations which make it more and more inevitable. You don't hear any ministers today arguing the case for Britain's membership of the Euro on the merits of the case, on the substance. They simply assert that it's inevitable and this process of this national change over plan is simply designed to encourage the sense of it being inevitable and in lots of ways. We've discovered for example that they're proposing, they've said that it's alright to spend huge amounts of taxpayers' money on propaganda before parliament's had a chance to say this, that that's okay, before the British people have had a chance to give it the okay, and we'll be writing to the National Audit Office to question whether this is appropriate. It doesn't seem to us to be within the rules as they're set out - proper rules which are there to avoid governments arrogantly abusing taxpayers' money. They've also said that health authorities should give preference to firms when they're procuring services and goods from firms to firms which are supposedly Euro-compliant, so actually firms which are providing good value to the taxpayer and providing high quality services to patients will be turned away because they don't happen to fall into the government's latest category of political correctness. HUMPHRYS: But, surely it would be barmy not to do that wouldn't it? If there is a possibility, and there is a possibility, some would say as you say an inevitability, but at least a very very strong possibility that we are going to join up with the Euro ultimately, it would be crazy to buy the sort of IT equipment that in a few years' time would be obsolete, and they'd have to spend billions of pounds doing it all over again. I mean that's just making sensible preparation surely? MAUDE: No, but that's not what they're saying. What they're saying is that they want to require businesses who they deal with in the Health Service to be themselves Euro-compliant. HUMPHRYS: That's sensible surely? MAUDE: It's imposing a whole new set of dynamics on it, a whole new hurdle on businesses, and the fact is if they're this certain that they want to go in then let them hold the referendum now, let people decide now. But you see there are two very key things that will make a difference to people's readiness to accept going into the Euro, and neither of them I'm prepared to take a large bet, will be in the national changeover plan. One is what's it going to cost British business? We've had estimates from outside which range from twenty billion pounds up to you know, a hundred-and-fifty billion pounds thereabouts, huge amounts of money. HUMPHRYS: But that is silly talk isn't it, a hundred-and-fifty billion pounds, that's half our national spend. We spend about three-hundred-and fifty billion pounds a year or something. MAUDE: No, I mean our GDP - national income is about eight-hundred billion pounds.... HUMPHRYS: Yes, but our national spend is about three-hundred billion. I mean barmy figures. MAUDE: A hundred-and-fifty billion pounds, which is the highest estimate that I've heard is a very very large number. Now, if it's an absurd number then let the Government produce its own official estimate and we can argue about that and see whether it makes sense, but they won't do it. Now if they produce - Mr Byers is all over the newspaper today saying he's very keen on getting rid of red tape. Now if the Government produces a single set of regulations they are under an obligation, introduced by the last government to cost it, to say what the cost to businesses of implementing it will be. Here, with this enormously important step being taken they're not bothering to cost it at all, and yet on the lowest estimate there is this is a staggering cost for business. And you see what they're doing is, they're encouraging people to go along with it without actually spelling out what the implications are, and that generates its own sense of inevitability - and another thing... HUMPHRYS: Well let me put this to you, before we leave that particular point. I don't know about you, I've have not talked to the boss of a big business or indeed a medium sized business in the last, I don't know, six months, year, whatever it is, who hasn't said we are making plans, we must be makings plans for the eventuality that we go into the Euro and they are doing so, and it would be a irresponsible of them not to. MAUDE: Well what they're doing, what they are probably doing is taking steps to deal with the Euro as a foreign currency, because that's obviously happening as we speak HUMPHRYS: And the possibility that we join up ourselves... MAUDE: Well, they would be very rash if they're committing large amounts of money to the certainty, because you know for banks, for financial services, businesses, for retail businesses the costs of making the change are enormous and they'd be daft to commit money to that unless they know what's happening because the numbers are very very large, but there's another thing which is being left out by the government, and you try asking Gordon Brown about this and again I bet you he won't give you an answer. The treaty requires Britain if it's going to join the single currency to shadow the Euro for a period beforehand which is not just a silly legal obligation from the Treaty it actually makes very good sense in terms of the Treaty, in terms of the economics, because if you are going to lock a currency to a much bigger one you need to show that it can sustain that parity. Now if that's going to happen then the Bank of England Act will have to be changed in the course of the coming year so that interest rates are set in this country not to press down on inflation in this country but to converge Britain's economy and its currency with the Euro. Now this an obligation, it would have huge implications because Britain's economy is on a different cycle from that of the Continent it tends to be aligned economically with the North American economy you would have to turn this tank around and you'd have to turn it round pretty quickly with huge implications for the way our economy would behave. It would be like a Victorian lady being squeezed and pushed and pulled into a tight corset in order to make her figure conform to the dictates of fashion, cause severe internal injury. Now you try getting Gordon Brown to say whether that's all going to be dealt with in the national changeover, I bet you he won't he'll just skate over it . HUMPHRYS: I might choose a slightly different picture but I take your point it's very colourful imagery. What we've not talked about is how much the government itself is doing and spending on this national changeover plan. Now you think it shouldn't be doing it, are you going to insist in so far as you can that there should be a law that allows them to do it because as I understand at the moment there isn't anything that actually allows them to do that, are you happy that... I know you're not happy that they do it but are you saying that there should be there must be legislation before they are allowed to do it and will you press for that. MAUDE: I think people will be shocked to discover that the government is simply spending freely, taxpayers money on propaganda for this referendum without parliament HUMPHRYS: What nothing new in government spending public money on propaganda, they've been doing it including yours for ever MAUDE: Well what's significant about this is that it comes on the heels of Lord Neil the watchdog set up to protect standards in public life appointed by this government itself who have said that a government should not produce even supposedly purportedly factual material in advance of a referendum. The government has now said that that is precisely what it plans to do, now I think people will be pretty horrified that that's happening. HUMPHRYS: So, do you want a Bill, do you want legislation? MAUDE: Parliament should certainly be consulted but I think if they are serious about this, why not go ahead and have the referendum now, then we can have the argument, we can inform the British people of the implications of it and then a decision can be made and then businesses will know what they are doing. I think people, the reason the government won't do that is that they know that the British people are pretty sceptical of this process. They agree with us that it's madness to be contemplating joining this thing until at least you've had the chance to see it working in bad times as well as good and until you've had the chance to see whether it turns to lead to political union, which is what the proponents of the single currency on the Continent actually want. They say the reason for having the single currency is that it will lead to political union, they don't just accept that it's a sort of unfortunate by product. Tony Blair and Gordon Brown don't even accept that it's a by product of it. Now it must be right for Britain to allow this thing to come into existence as it is doing, to watch it happen to see it work economically in bad times as well as good, and to see whether it does tend to lead to political union. All the indications are with this big programme of tax harmonisation, higher taxes imposed on Britain from Brussels, then actually the kind of political union that we've here is coming along in its wake. HUMPHRYS: OK, Francis Maude, thanks very much indeed. A quick return to Paddy Ashdown 3 FoLdEd