................................................................................ ON THE RECORD JOHN EDMONDS INTERVIEW RECORDED FROM TRANSMISSION BBC-1 DATE: 15.3.98 ................................................................................ JOHN HUMPHRYS: John Edmonds is the leader of the GMB Union and the current President of the TUC and he's with me. Good afternoon. JOHN EDMONDS: Hello John. HUMPHRYS: A bit odd that Trade Unions and Labour MPs have to lobby a Labour Government to protect the Welfare State, if that's what you are doing? EDMONDS: Well as a matter of fact the lobby
tomorrow, as far as I'm concerned, is very much to protect full employment. That's the centre of the argument. I mean the thing that- HUMPHRYS: That's odd too. EDMONDS: Well it's a bit odd yes. But Gordon has got to - in the Budget on Tuesday - he's just got to get the value of the Pound down. I go round lots of workplaces and the thing that manufacturing industry is scared stiff about is this continuing high value of the Pound. And unless something is done about it, by the end of this year we're going to see some very, very, serious redundancies, indeed. We're already seeing the postponement of investment; Exports are going down; this is a real threat and it's a real threat to Union members. HUMPHRYS: Well the way to get the value of the Pound down is to put Interest Rates down. EDMONDS: Indeed. Yes. HUMPHRYS: How does he do that? EDMONDS: Well there is only one way now. I mean he can't act directly on Interest Rates and I mean we're in the strange situation where the Monetary Committee of the Bank of England is deadlocked and we're relying on Eddie George, the Governor, to protect manufacturing industry by saying that Interest Rates won't go up any further. Now, that's a rather strange position, isn't it? I mean- . HUMPHRYS: Which is what he did last time, because there was- EDMONDS: I hope that's what he keeps doing and I hope some of the people who want to put Interest Rates up further will change their minds but the-Frankly, the only way he can do it: he can convince that Monetary Committee that Interest Rates should come down - because that's what needs to happen - is to ensure that this is not just a prudent Budget but in Tax terms it's quite tight. There's going to have to be some Tax increase in order to convince that Monetary Committee - I mean, many of us wouldn't have started from here but this is where we are - you've got to get those Interest Rates down and the Pound has got to come down, otherwise redundancy is around the corner. HUMPHRYS: But he's already said he won't put taxes up. He can't for two - I mean, he'd be breaking his promise wouldn't he? EDMONDS: Well he won't put the Standard Rate up and of course he's in this- HUMPHRYS: He also says he won't put the top rate up. EDMONDS: He says he won't put the top rate up and I think that's something-I think that's a restriction which was a restriction too far and I'm not sure that Gordon Brown himself was very keen on it. But of course- HUMPHRYS: Did he tell you that? EDMONDS: I think there's a word round the Labour movement which Gordon is keen not to deny, that this wasn't exactly his decision. But anyway- HUMPHRYS: Whose was it then? EDMONDS: Well, it-it sounded as if it was coming more from Ten Downing Street, or the-Tony Blair, than it did from- his advisors, rather than from Gordon Brown. But the big-the big problem is that in order to put taxes up now, he has to come up with some fairly strange ideas. And if he can't change the Upper Rate and that's the sensible thing to do - I mean people over a hundred thousand a year, people over fifty thousand a year can afford to pay more. There's been a tremendous gap widening between the rich and the poor. People on over a hundred thousand a year can certainly afford to pay more and that would have been a very sensible way of giving a message that Interest Rates can come down. And of course the value of the Pound should come down in quick succession after that. HUMPHRYS: You wouldn't raise a lot of money if you did what you're talking about - putting the top rate up a bit - would you? EDMONDS: Well I think we're talking about something between three and five billion. If we're talking about a hundred thousand, we're talking about fifty or sixty per cent? HUMPHRYS: How would you push it then? EDMONDS: Well, my own feelings? I would about
fifty thousand. That's about a thousand pounds a week. People on a thousand pounds a week are not exactly stretched for the money to pay a new pair of socks or a new pair of stockings. So, I think over fifty thousand I would like to see fifty per cent, over a hundred thousand sixty per cent. And I think the vast majority of the British people would accept that. That would give a very strong message to the Monetary Committee of the Bank of England and maybe Interest Rates can then come down, which helps not only manufacturing industry but an awful lot of young people on mortgages who, I don't think, are very keen on the level of mortgage at the moment. HUMPHRYS: I can almost hear, as you say that, I can hear some of the young Turks, in what we have to call now, New Labour, saying: ach, there he goes again. You know, it's the old Trade Union cry and the sooner we get shot of all that stuff, the better. EDMONDS: Yeah. But isn't it a better solution? I mean what's the alternative? If we're going to have a tight fiscal position, if taxes are going to go up - and that looks as if the position that we are going to find ourselves in - if you don't put the upper rate up, then you are going to be searching around for all sorts of strange taxes. Like, sort of, taxes on car parks and so on, which probably cost more to administer than actually raised in Revenue. So, if you deny yourself the opportunity of doing what I regard as the sensible things, the straightforward things - and for that matter the popular things - you end up with-running around trying to find some rather strange tax increases. HUMPHRYS: They're not going to listen to you though are they? EDMONDS: Well, I'm-Not perhaps this year, but I think long term there is a tremendous popular feeling behind this. HUMPHRYS: What if they don't? EDMONDS: What if they don't-? HUMPHRYS: Listen to you. EDMONDS: Well, we keep arguing for the cause, don't we? We keep arguing for the changes. The one thing that has to be listened to, I think, is this question of the value of the Pound. If the Chancellor can't bring the value of the Pound down, we are in some considerable trouble. We saw in the early Eighties how we lost a lot of manufacturing industry because the Pound was too high. We saw the same thing at the beginning of the Nineties. And when that manufacturing industry goes, when it's closed down it hasn't come back again. HUMPHRYS Gordon Brown would probably say: aren't you rather missing the point of my Budget? Indeed, everything I've been doing - and he would say that the kernel of it all, the really important thing he's doing is Welfare to Work? Aren't you impressed with that? EDMONDS: Well, I am impressed by it but it-There is a difficulty here, isn't there? I'm very, very keen on the scheme Welfare to Work - the new deal - giving young people the opportunity to work. That's a smashing idea and it's got tremendous support throughout the Trades Union movement. But, of course, wouldn't it be a bit sad if, at the same time, we're putting young people into work, giving them greater opportunities, at that same time, bits of manufacturing industry are closing down and we're finding redundancies there. So, the two go together. We have to have Welfare to Work and a lower value Pound. And, if that Pound stays at three Deutschmarks to the Pound, then, we all know what's going to happen. So, that change has to be made. That means higher taxes and the only point I'm making is the best place to raise taxes is on high earners. HUMPHRYS: Looking at the broader welfare picture, it seems to be the Government's position that we can't afford the Welfare State we have now and it has to be reformed for that reason - do you agree with that? EDMONDS: No, I don't. There's a very nice piece of work that's been done by the TUC, the evidence to the Chancellor which
demonstrates that on current spending and on reasonable predictions for the growth rates of the British economy - not wild rates but the sort of historical rates, we have no problems, whatsoever in funding the Welfare State. And, of course, the irony is that we don't need to worry about that problem because the Tory cuts have cut so deep into the Welfare State that some of the people who could have expected in the past to be supported are not being supported any longer. So, if reform of the Welfare State is on the agenda - and, it must be - we must be getting more people to-more money into the pockets and purses of people who are very low paid or have no work at all. HUMPHRYS: And, the way that they will do that it seems again - because we're not quite sure, are we? - unless you know what they're going to do? I, certainly don't - is more targetting. Fewer universal benefits - we're seeing this morning- one of the leaks in one of the papers this morning says that Child Benefit is going to be taxed. Do you think all of that sort of thing is sensible? EDMONDS: I think that once you start thinking about taxing Child Benefit, you get into some very difficult problems, indeed, because we all know that taxing Child Benefit will, probably, mean - unless you are very careful and do some very strange things - taking money away from women and giving it to men because that's the direction that these processes seem to go for. And, the normal view is that you need to pay a high level of Child Benefit because if it gets to the women of this country, who have the responsibility in an unequal society for supporting dependents, for bringing up children, then, it's most likely spent on the children. So, if you start doing things that move the money from women to men, then, you have some very, very unfortunate results. HUMPHRYS: But, if many of the women who are getting it are using it as pocket money, or saving it up to buy - I don't know - a new coat or something for themselves in a year's time, or whatever they're doing with it - and some people don't need it - how do you justify that? EDMONDS: Well, you don't justify it. But, some of these anectdotal-little bits of anectdote I don't take very seriously at all. The best way to ensure that very rich people do not have runaway opportunities to spend money, while poor people have next to none, is to do something about the top rate of Tax. So, we're back to that issue. And, that's the point I'm making. If you deny yourself, as the Chancellor has, the opportunity to do something about the top rate of Tax, you end up trying to tax other benefits which have very unfortunate effects. HUMPHRYS: So, when you deliver this message - and, I assume you do deliver the message, I- EDMONDS: It has been delivered - yes. HUMPHRYS: It has been delivered. EDMONDS: Yes, Gordon-Gordon Brown has been very, very good at providing access to Trade Unionists, to business people - everybody throughout society. I mean, there has been a much more open process, with the green budget this time - and, we've got to applaude that. So, the opportunities have been made. We've-we've done the lobbying- HUMPHRYS: And..- EDMONDS: And, we'll see on Tuesday whether it has any effect. HUMPHRYS: Well, I was going to say: what-We'll see on Tuesday - certainly - but what's the response that you get from them? I mean, do they say: well, thanks a lot for that, John - very helpful - and we'll take it onboard or do they give you a nod and a wink? Or, do they just indicate that well: he would say that, wouldn't he? EDMONDS: Well, in the run-up to the Budget, of course, the Chancellor has - and all Chancellors do this - they say: we're listening, we're in listening mode. We'll listen very carefully and so on. But, the main argument that we've been putting to him in the last two meetings has been this high value Pound. I'm sorry to keep coming back to it but it is such a-It's like this great block of concrete, hanging there, in the air, over so much of British manufacturing industry and unless that Pound goes down - and, we can't just rely on Eddie George - I mean, unless that Pound value goes down, we're just seeing the beginning of a recession. Manufacturing industry is already in trouble. It was really in recession in the last quarter of last year. It's going down further. High value Pound through the summer - very damaging, indeed. HUMPHRYS: So, unless, he puts the top rate of tax on Tuesday, in your view, this will be a failed Budget? EDMONDS: Unless he puts a package of Tax measures together, I'm afraid he's not going to bring the value of the Pound down and we're all going to be in trouble. And, the best option is to put the top rate up. HUMPHRYS: John Edmonds, thank you very much, indeed. ...oooOooo...