NB: THIS TRANSCRIPT WAS TYPED FROM A TRANSCRIPTION UNIT 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. ............................................................................... ON THE RECORD RECORDED FROM TRANSMISSION: BBC-1 DATE: 29.1.95 .............................................................................. 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. ......oooOooo......