................................................................................ ON THE RECORD RECORDED FROM TRANSMISSION BBC-1 DATE: 4.2.96
................................................................................ JOHN HUMPHRYS: But first, the return of the prodigal son. John Redwood, who WAS the Welsh Secretary himself till he was cast into outer darkness for challenging John Major's leadership last summer. He's been welcomed back into the fold. At the end of last week, Conservative Central Office sent out one of Mr Redwood's speeches. A rare honour for a humble backbencher - and the strongest sign possible perhaps that he has been rehabilitated. Mr. Redwood, good morning. JOHN REDWOOD MP: Good morning. HUMPHRYS: Why do you think - why have you been welcomed back into the fold? REDWOOD: Well I think Central Office realise that that speech, along with many others that I was making, is taking up points that are very important. The nation should see and discuss points about what Labour has on offer, points about the way in which Labour would do grave damage to the country's economy if their policies were followed. Points about the Constitutional crisis which Labour would want to plunge the country into. And I'm delighted that your programme is going to be looking at part of that later on because these policies do need exposure before the General Election. HUMPHRYS: Well you've made many speeches in the past, or since you challenged for the Leadership, none of those have been released, now this one. Do you think it is perhaps that they need you now rather more than you need them? REDWOOD: I don't think that's quite true and you'd better ask them if you want to know their motives for putting it out. I'm delighted they helped me put the message out. I speak to a large number of Conservative Associations up and down the country, week after week - typically three or four Constituencies a week - and I've got messages that I think will help the Party in the run up to the General Election. So I do look forward to working with Central Office from time to time, when it's of mutal benefit. HUMPHRYS: When you challenged Mr Major for the Leadership back last summer: your campaign put out that famous slogan: No change, no chance. Has enough changed since then for you to have a chance? REDWOOD: I think there are opportunities for the Conservatives and I trust they'll be many more months to achieve things for this country and to put forward our message before the General Election. I expect to see some improvement in the opinion polls when we next see an opinion poll. Labour have done very badly in the last two or three weeks and I think the public are settling down and are saying: Well there are still things about the past record that we don't like but we do realise now there are an awful lot of things in Labour's policies that could be very damaging. And, so,
as that message gets through, I think you'll see the opinion polls move in our favour. HUMPHRYS: But let's look at - not so much Labour's policies but - your own and how they have or have not changed. On Europe, for instance, the rhetoric sounds much more like John Redwood these days but the reality perhaps doesn't. What hasn't changed and isn't going to change, is the attitude towards what you consider to be the most important thing of all, as far as Europe is concerned, and that is the Single European Currency. It is not going to be in the White Paper before the Inter Governmental Conference. REDWOOD: That's right but I think there has been some movement in attitude towards the Single Currency by the Government. HUMPHRYS: In attitude - yes. REDWOOD: And, after all, John Major did go to Madrid and said exactly what I would like to see him saying that the Single Currency is now very divisive, that it's pulling Europe apart, that it's very unlikely to be able to work, that it's going to be much delayed if it happens at all. Absolutely right and very important that Britain should make up that case. We need to warn the rest of Western Europe that this Single Currency scheme is already doing a lot of damage to the countries taking it seriously. That's why France and Germany have very high levels of Unemployment AND it's now very clear that it will exclude Italy, Spain, Greece, Portugal, the Scandinavian countries, and that is bound to split Europe, rather than bringing it together. So I am delighted he's saying those things and I trust Britain will push that case very strongly, in all the next big meetings coming up, including the IGC meetings, the Inter Governmental Conference. HUMPHRYS: Yeah, he's saying things that are acceptable to you but he's not doing these things, is he? As I say, it isn't in the White Paper, it's not going to be ruled out for the lifetime of the next Parliament, it's not going to be in the Manifesto - that. REDWOOD: Well, let's wait and see. We're some way away from the Manifesto being completed and then issued, I assume, and things can change quite rapidly over these European issues. We've seen big changes on the Continent and I think as the business community in this country looks at the issues, they're becoming more sceptical. As the French and German public look at the issues, they're becoming more sceptical. So, there's still an opportunity that we could have even further language in our Manifesto which I would clearly welcome. HUMPHRYS: So you will be pressing for that? REDWOOD: I still think the Single Currency is wrong for us and wrong for the rest of Europe and I think the Government recognises now that it is becoming very divisive. HUMPHRYS: So, on Europe, at least, there ought to be more change for you to have this chance? REDWOOD: Well I like the way the language is developing but of course I would like to see us make a good job of going into that big Inter Governmental Conference. There are lots of ideas that Britain could put forward to get the Community to work better in the interests of all the peoples of Western Europe. I think it needs to legislate better and less and I think we ought to say that the legislative process ought to be changed, that it ought to be more open to the public. There ought to be more formal opposition to proposals before there are finally approved and that national Parliaments ought to have a stronger say in the run up to passing legislation. HUMPHRYS: So we ought to be standing up to Chancellor Kohl, for instance, more firmly than we are at the moment, or have been? REDWOOD: Well, I think we should, when he puts forward proposals that aren't in the interests of Britain or the wider Europe and I think that's exactly what the Foreign Secretary was saying in the last couple of days in response to Chancellor Kohl's extraordinary speech in Belgium. I think there are a lot of countries and people in Western Europe, who have a different view of how they'd like Europe to develop, than that of Chancellor Kohl's. I think Britain has to be the ringleader, I think Britain has to be the force, the catalyst that brings forward those views and opinions so that they are taken seriously. I'm not saying that it will be easy and there'll be lots of people criticising us for doing so. But it is terribly important for us and Western Europe that we have a proper Western Europe where all peoples and interests can have a chance, rather than a federal centralised, rather old fashioned Europe, of the kind that Chancellor Kohl wants. HUMPHRYS: So in that sense, it's Britain against Germany? REDWOOD: I think it's Britain speaking for probably a majority of the peoples of Western Europe but at variance with Chancellor Kohl - yes. I don't think Chancellor Kohl speaks for all the German people on the issue of Monetary Union. Polls show very clearly that most Germans want to keep the Deutschmark and I don't blame them and I think Britain should speak for them if their Chancellor won't. HUMPHRYS: Interesting choice of word - ringleader - that you used a moment ago. Ringleaders normally are accused of causing trouble. You don't mind causing a bit of trouble in Europe? REDWOOD: Well, I don't see it as trouble to warn Europe against something that would be very damaging. I don't think Europe wants more people out of work. I don't think it wants very high interest rates. I don't think it wants policies that mean factories closed rather than open. I don't think it needs policies that cut it off from Asia and America where there will be a lot of trade and investment and common interest. We must speak out for a prosperous Europe. A Europe that is forward looking, that recognises the future is about world trade, not just about regional trade and that the future is about more liberalisation of the economy. HUMPHRYS: And it's not just speaking out you want, it's actions you want. Ruling out British membership of the Single European Currency. REDWOOD: Well, I've said I would rule it out because I think that strengthens our bargaining position. I think you have more influence if you have a clear position and you try and persuade the others that that is sensible for them as well. But, in default of that, I'm delighted that the Prime Minister very strongly believes that this currency scheme is ill-conceived, that it will divide Europe and that it is doing economic damage. That's fine. That is a very strong position. Let's argue it every way we can and let's use diplomacy to bring other countries to our cause. HUMPHRYS: Alright, let's look at another area where you wanted change. You were concerned during the leadership campaign, presumably since then, that the Party - the Government - hasn't strongly enough supported the middle class of this country; things like mortgage tax relief, things like VAT on fuel. Hasn't been very much change there? REDWOOD: Well, I didn't use the phrase 'middle class'. I think, that was Margaret Thatcher's phrase in her recent speech. HUMPHRYS: You wouldn't argue with that, would you? REDWOOD: Mortgage interest relief and VAT on fuel effect a whole range of people who may not be traditionally regarded as middle class but people with modest incomes, decent aspirations; who want to lead a reasonable life and don't want the Government taking too much of their money. No, there haven't been those changes that I urged in July and August and in the run-up to the Budget but I am very pleased that the Government did move on the general proposition of whether taxes could start to come down last autumn or not. Because the starting position - you may remember - in June and July last year was that there was no opportunity to cut taxes or spending at all, that we had to live with the then forecast figures which were much higher. They did manage to find more than three thousand million that they could cut off spending and, therefore, begin the process of Tax reduction. I'm delighted by that. I think we need another Budget in that vein next November, in order to carry on the good work and to win back support. HUMPHRYS: But as you say, there has not been the change in those areas where you specifically wanted to see it. REDWOOD: No, there hasn't. I thought it would help the housing market. It does look, though, as if there is a bit more crediot around in the housing market now and that is beginning to enable more people to move on, even those whose houses are worth less than they paid for them, which is obviously a worry and a sadness to them and I think as the housing market improves, so sentiment might improve generally - very important it does. HUMPHRYS: Was Mrs Thatcher, Lady Thatcher wrong to hone in on the 'middle class' - use the phrase 'the middle class' - in the way she did in that speech?. REDWOOD: It's just not a phrase I myself use. I just want to remind your viewers that that was Margaret Thatcher's speech and not mine. I think if middle class means a whole range of people on a range of incomes, with different types of lifestyle, then that's fine by me. But I think, it can sound a little old-fashioned. HUMPHRYS: The point about these changes that you're calling for is not that on mortgage interest relief, for instance - Tax relief - it's not so much that they don't want to do them because they don't see the need, or they don't feel they ought to support the housing market, in the way you suggest it might. But, there is a kind of visceral resistance to that. I mean, they've made it absolutely clear that they are not ideologically in tune with that sort of thing and that's got to worry you a bit hasn't it? REDWOOD: Well I'd have rather they'd done it but it's not THE most crucial issue. The most crucial issue is what is the overall level of taxation and there are different ways of taking money out of people's pockets or out of their salary cheques and the fewer the better and the lower the better. So, you give back a bit of money by cutting the standard rate - just as you give back money if you put back Mortgage Interest Relief at the full amount that it was at before two or three Budgets ago and it often goes back to rather similar people. So, much more important is the fundamental issue: is taxation coming down and can we get it down enough? HUMPHRYS: And, you're not going to get it down any further - let alone enough - you're not going to get it down unless you cut spending and you cut it substantially? And, there is no commitment, it seems - in the short term - or indeed in the longer term, in some areas - to substantial cutting of Government spending. REDWOOD: No I think we must reduce Government spending and of course it's much easier to reduce the proportion of the National Income going to the Government when the economy is growing quickly. We had a good year for growth a year ago. I think, we can have a much better year this year. I think, the economy will pick up in the second half. We've had a bit of a lull over the winter and that makes the task easier. If you can then control spending, you will find that its proportion falls because the private sector is doing that much better and of course as the economy grows, some elements of spending fall, anyway. As people get jobs, you pay out less Income Support and Unemployment Benefit and more families can look after themselves. That's the best possible way of cutting Welfare expenditure - people getting jobs, people being able to make their own way in the world. So, I'd like more of that. But I think we will have to look at the whole Welfare area, as well as the other areas of Government expenditure, in order to achieve the Prime Minister's long term objective, of getting expenditure well down from these levels. HUMPHRYS: But, that is a very, very long term - that's a long way off, as he said himself. And if you look at the Chancellor, for instance - if you listen to what Mr Clark has said - he's perfectly happy with forty per cent. He doesn't think it ought to come below forty per cent. REDWOOD: Well I think the Chancellor is right that in the next two or three years, getting to forty per cent, or just a little below, would be a good achievement. HUMPHRYS: Ah, but that's not what he said. He said he didn't in a civilised country- REDWOOD: And I'm happy with that. But, I'm with the Prime Minister in saying that looking out - ten to fifteen years - we should be aiming to get expenditure down to, say, thirty-five per cent of National Income. Now, that requires taking decisions very soon about some very big things and then, allowing that to develop over the years. For example, I think, we need to have much better second pension provision and savings provision for the elderly. And, then, ten or fifteen years down the track fewer people would need to depend on Means Tested benefits when they retire. They'll have a better lifestyle in retirement but quite a bit of it will be paid for from their savings and their pension funds. That's the kind of change I'd be looking at, now. HUMPHRYS: Indeed, but as I say Mr Clark was quite clear. He thinks forty per cent is about right. Large difference between you and him on that then. REDWOOD: Well, I'm happier with the Prime Minister's view that as a very long term objective we ought to be aiming for thirty-five per cent. But, as I'm sure the Prime Minister would stress that isn't immediately in prospect and I think you do need to take some big decisions on welfare and some elements of Government expenditure at the moment to get there in ten or fifteen years' time. HUMPHRYS: So, it may be - having listened to various things you've said during the course of this interview - it may be that the reason that much of this change - that you deem so important - much of the reason why that change isn't happening is that the Chancellor Mr Clark is standing in the way of it. So, perhaps, if you want a chance, you've got to get rid of the Chancellor - if you'll forgive the clumsy word. REDWOOD: I think, you should ask the Chancellor of the Exchequer. I'm sure the Chancellor would agree that, as a long term objective, the Prime Minister is right about Public Spending and that's a question you could put to him when you interview him next. HUMPHRYS: Well, what's your view? REDWOOD: Well, I think, we should try to do that. HUMPHRYS: Your view of him I really meant. The way he's being going about things. REDWOOD: Well, I think, the current economic policies are working well. There's a lot of things that have to be put right because the recession did a lot of damage. People did get bruised in the values of their homes, quite a lot of people lost their jobs, factories did close - that's extremely damaging. The economy is now being nursed back gradually. It's still not good if you're a housebuilder but there are lots of other business areas now that are going much better and can look forward to better prospects. So, that is good news. HUMPHRYS: Yeah, that is good news but it wasn't exactly what you've just given me, it wasn't exactly a ringing endorsement for the Chancellor. I mean, he is standing in the way. His attitudes, fundamentally, are different to yours. You can't endorse him, can you because of that? REDWOOD: Well, I haven't had this debate with him. HUMPHRYS: You know what he stands for. You read his pieces. You saw what he had to say in the Financial Times, earlier this week, for instance. You know exactly where he's coming from - he's made it very clear. And, on all the big issues - that you've talked about here - Single European Currency - ruling it out; things like MIRAS things like Public Spending - he is different to you - from you. REDWOOD: But, he is a Member of the Government and the Government's general position is as I've described. The Prime Minister has said that thirty-five per cent is a longterm objective - although it's not an immediate prospect or target. Well, I agree with that and the Chancellor must agree with it because it was said by the Leader of the Government in which he serves. HUMPHRYS: Well, perhaps, it doesn't stop him saying other things, though, does it? The Chancellor clearly holds different views than those that the Government holds. REDWOOD: That really is something you must ask him about. I can't be expected to answer for the Chancellor of the Exchequer. HUMPHRYS: No. But, you could - if you were a loyal Member of the Party, and you wanted things to be absolutely plain sailing from here on in - you could say: I stand by everything the Chancellor said because he's our Chancellor and I'm with him all the way. You can't do that because he takes a different view. REDWOOD: Well, I'm not sure he does. I've tried to explain to you what I understood to be both the Prime Minister's position and the Chancellor's position, in a way which tried to bring them together and I said the Chancellor is absolutely right that forty per cent is the maximum objective we could achieve in the foreseeable future, given the decisions that are being made and the state of the economy. But, I'm sure the Chancellor would agree with the Prime Minister about a long term objective and he has to, doesn't he because he serves in John Major's government? HUMPHRYS: Well, in that case, it would be better to have a Chancellor who does and says so, wouldn't it? REDWOOD: Well you really must ask the Chancellor. I'm very happy to talk to you about my views on these subjects - and my position is very clear - I think, the Prime Minister is right that the longterm objective should be thirty-five per cent. But, it's going to take a lot of action and maybe it's more important to discuss the things you need to do to get there because I don't want to get there by cutting teachers, sacking nurses and doctors and all that kind of thing. We have to protect those crucial services. The answer lies in part in Welfare, persuading people and helping people make better provision for themselves and, in part, in the less important services in government where there is still scope for reducing Expenditure. HUMPHRYS: Having listened to what you've said and we've talked about the changes that you wanted. There have, by your own admission, been few of those changes, actually having taken place. Therefore, that must suggest little chance. REDWOOD: But I did say that we'd had a big change which is that we had a Budget which cut Taxation by more than three thousand million pounds. Whereas last summer, when I applied for the leadership of the Conservative Party the official Government position was that there could be no reductions in Expenditure and therefore I think, in Taxation. So, that was a change, a very important signal to the country that Conservatives would rather have lower taxes and I do hope we'll have time for another Budget because I think we need to do more of that. HUMPHRYS: John Redwood, thank you very much. ...ooOOOoo...