................................................................................ ON THE RECORD RECORDED FROM TRANSMISSION BBC-1 DATE: 15.5.94 ................................................................................ JOHN HUMPHRYS: Good afternoon. In today's programme, how the untimely death of John Smith has changed the course of British politics. The contest for the succession has not yet begun, but we'll be talking to a man who once sought the leadership for himself. That's after the news read by Moira Stewart. NEWS HUMPHRYS: Welcome back. The political scene in Britain had been frenetic - if not positively frenzied. One election campaign ended and another just begun, the ruling party tearing itself apart, the Prime Minister himself facing the real possibility of a leadership challenge. Every day bringing new tensions, new excitements. At quarter past nine on Thursday morning it all stopped. And the hands on the political clock have been frozen ever since. They will stay frozen until after John Smith's funeral on Friday morning, at least for the main players in the political drama as far as their appearances on the public stage are concerned. But backstage, things are moving. ****** HUMPHRYS: Bryan Gould, you ran against John Smith because you, fundamentally, disagreed with him over some very important issues; the economy, Europe. Do you believe that that debate should now be re-opened? BRYAN GOULD: Well, I think, it's not so much a question of whether I believe it should be but I'm certain it will be. I think, for the moment, however, the various reports we've heard - commentators' views - they're all right, they're accurate in saying that for the time being, the Party doesn't want that debate. And, I think, for the foreseeable future that debate will be suppressed. But, in the interests of British politics and of the Party, I believe, that it will, inevitably, re-emerge and that it cannot be postponed forever. If it's not...if it doesn't take place in Opposition and there may be some tactical sense in not allowing it to take place in Opposition - it will, then, certainly, take place in Government. HUMPHRYS: What's the foreseeable future? GOULD: I think, up to and just beyond the next General Election. My own view is that the Party shows no disposition to want to enter into this debate because it has been convinced by the experience of John Smith's leadership that by eschewing any such difficulty that we can satisfy the electorate that Labour is united and can safely be entrusted with Government. But, I believe that the very real issues which are there - as we see in the Tory Party. They're there in the Labour Party and right across the spectrum in British politics. Those real issues are bound to emerge. And, in many respects, I would argue, that it is better that they are properly discussed in the open so that we know where we stand, rather than waiting until we form a Government when, I believe, we will see the same strains within the Party and Government as we see currently within the Tory government. HUMPHRYS: Should they be discussed as part of the leadership campaign, the leadership contest? GOULD: Well, this will be very much up to the prospective candidates to decide on what basis they pitch their campaigns. My own expectation is that they won't discuss these issues and, again, I think, that is regrettable, although understandable. The difficulty with the current strategy, which was I think succeeding very well under John's leadership, is that it may, at least, have depended very much on John's personal qualities. If the message is: trust me, then, it may have sounded more convincing in John's soft Scottish burr than it will do in any other mouth. I think, therefore, that the legacy from John while it is certainly a valuable one, as John Rentoul pointed out, in terms of Party unity and a sense of feeling that we're on the right course, the legacy may - in the long run - actually betray us, at least, in the sense that we won't grapple with the issues which I think many people in the Party want to see grappled with. And, which, in any case, will, inevitably, arise. HUMPHRYS: Stong phrase 'betray us'? GOULD: Well, I don't mean that in any sense as a personal comment on John because that would be completely inappropriate. But, I think, that the legacy of believing that we can wait for the Tories to lose the Election looked very good. It looked very good on the eve of John's tragic death. And, I believe, that many people accept - and, I certainly accept - that John was destined to be our next Prime Minister. But, without him, it may well be that the Party's pitch of saying: nothing essential will change - Although we keep on talking about changes in economic policy, and so on, we do not challenge the essential Conservative consensus about who should run the economy, on what principles and in whose interests. And, therefore, what we really say to the Electorate is that within that accepted framework we will operate more competently and more compassionately. Now, I believe, those are true. Those are true claims and will be immensely beneficial to the British people. But, they are not radical claims and they won't, in the end, change anything very much. HUMPHRYS: But, if John Smith was succeeding, in the sense that you describe, it was more than just his pleasant Scottish burr, wasn't it? It was also because he was persuading people that, for instance, and very importantly, a Labour government would not necessarily be, would not be a high taxing government? GOULD: Yes, I think, under John's leadership, we were very effective Opposition. And, at last - it took a long time - but, at last, we did nail the Tories on their Tax record and that, I think, has very much disarmed them, on that issue. And, we may, therefore, be able to escape, although it's not clear that we will. But, we may be able to escape that last minute attack, which we suffered in 1992 and 1987, for example. But, I believe, that even if we can say that that was a plus that we run a very grave risk if we believe that we can get through to polling day without revealing what we would do on that and other issues. If we choose to say nothing - which, I think, is the current strategy, then, we must expect our opponents simply to make it up. And, if we leave it to the last minute, we must expect to be misrepresented. In either case, we have very little comeback in the face of the sort of firepower that the Tory press and the Tory Party can mount against us in the last few days of an Election. And in my view: it would be preferable to identify some issues. For example, why not if we need more Revenue in order to fund better public services, why not be specific and clear that we intend to raise the Tax burden on the very richest people in society? Because not only have we established that most people have paid more under the Tories, we've also established that those at the top have paid less. And, I believe, there's no Electoral risk to the Labour Party in making that clear. It provides us with an answer on the question: what would you do? It means that when you and others say to Labour's spokespeople, sitting in this chair or elsewhere: how are you going to afford it, instead of gurgling and choking and saying: well, we're not sure and we'd rather not talk about it, we have an answer. HUMPHRYS: No Electoral risk in saying a Labour government would tax more? Surely that would undo the good that John Smith has done, that Gordon Brown has done? GOULD: No. I think, we should make it clear that there is no case for increasing the overall tax burden. Indeed, my own view is that the last Budget was a grave mistake. Our priority should be to recover from recession. And, therefore, anything which increases the Tax burden, at present, is entirely counter productive - literally. But, what we should be saying is that if people are groaning under the burden of taxation and they want, nevertheless, improved public services, then, one way in which we can finance that is by redistributing the Tax burden. The mistake we made in 1992 was not redistributing enough and leaving it to the last minute, with the result that we were vulnerable to the charge and, indeed, there was some truth in it - that we intended to increase the tax burden for those on middle incomes, particularly in the South. HUMPHRYS: You can see the headlines in the Daily Mail and the Daily Express and the Daily Telegraph, even as we speak. GOULD: Of course, but you can't expect in politics to be applauded by everybody for everything you propose, and if you propose something as I think you are bound to do as a radical party; if we are arguing that we believe Britain should be changed for the better it's not unreasonable for people to say well how? How would that change be brought about? And I would be prepared to live with adverse headlines in the Daily Mail and Daily Express provided we could drag the Tories onto an argument - not about whether or not we were going to push up taxes, but about what is fair in taxation, and that is what I think we should be trying to do. HUMPHRYS: And do you also want to see the debate re-opened over, for instance, the ERM because membership of the European Union in the way we are now, members that that are going to be members in the future can.....an economic policy even more. GOULD: Well I think that although it is quite right to say that John and others, Gordon, took on board the objective of full employment and in a very welcome way. It's the first time for some years we've heard that phrase on the lips of Labour leaders. I think they haven't yet faced up to the contradiction between the measures necessary to bring about full employment, the Keynesian programme of using exchange rates and interest rate variably in the interest of the British economy, the contradiction between that approach essential to full employment and their willingness to entrust monetary policy to an ERM or to a European central bank. That was a contradiction which no party has resolved - this is not unique to the Labour Party - but certainly hadn't yet been resolved in the Labour Party. HUMPHRYS: We've just heard David Blunkett, who was of course your campaign chairman..led your campaign for the leadership, saying the whole Party is now behind John Smith's policy. GOULD: What David said - and I agree with it - is that there is a very virtually unanimous and certainly includes me recognition that our future lies in Europe. That has never been the issue - whether or not Europe, the issue has always been what sort of Europe; a single European economy with a single currency, a single monetary policy, a single state as it were which is... HUMPHRYS: Which is what John Smith was moving towards. GOULD: Well that may well be the case, but I point out simply that if that is the case and that certainly has been the position of the Party then there is a contradiction between that and the assertion that we will use all the instruments of policy, macro economic polic, exchange rates, interest rates, fiscal policy, in order to bring about full employment. HUMPHRYS: David Blunkett made the point in that film that that was the only way forward. GOULD: No, I think David again was making that more general point and again one with which I agree, that no-one - at least to my knowledge - in the Labour Party argues that somehow we should bring about a breach of our relations with the European Union. Our future lies in Europe. HUMPHRYS: He was going beyond that. GOULD: No I don't believe that that's the case. I think it is very much part of the Party's current stance that it prefers not to look at some of these difficult and contadictory issues. HUMPHRYS: You've seen what's happened in the Tory Party as a result of their fundamental disagreements over Europe, they are quite literally tearing themselves apart. You'd see the same thing happening again in the Labour Party wouldn't you if you re-opened this particular debate? GOULD: Well my point is simply this, that whether we want to re-open that debate or not it is bound to occur and within a few weeks, at most a few months, of the election of a Labour government which I firmly look forward to and endorse and want to see, the pressure will come on. The pressure will come on because there will be run on Sterling or there will be some doubt about Labour's policy on inflation. And the question will arise: do we adhere to a monetary policy which is approved of by the financial establishment and in particular by central bankers who are now fulfilling a much more important role, even in the run-up to Maastricht than they did in the past, or do we adhere to our campaign commitments to run the economy in the interest of ordinary people to secure full employment, decent public services and so on. Now that issue, which has bedeviled every Labour government virtually since the beginning of time, perhaps only the Attlee government escaped it, but the Ramsay MacDonald government fell foul of it with the gold standard, Harold Wilson fell foul of it with his defence of the pound Sterling, Callaghan and Healey fell foul of it with the adherence to Sterling M-three (phon). In each case, they gave priority to a monetary measure and disappointed their supporters. And I don't want to see that happen again. HUMPHRYS: And these are the issues that you want to see discussed as part of the leadership contest now? GOULD: Well I would like to think that those issues would be discussed but I don't believe they will be and I believe the contenders will see themselves as benefitting from tactically the attempt that was being successfully made by John Smith, to avoid discussion of these issues. HUMPHRYS: But all the contenders can't benefit, only one can benefit, only one can win. GOULD: No but I think they will see that it would be dangerous for them because they would be subjected to exactly the line of questioning and criticism which you've put to me. HUMPHRYS: Questioning, not criticism. GOULD: That's right. But I think they would see that the Party is of such a mood at present that it believes it has been set on the right course for victory. My concern is that it may not be enough to pursue that course if the Tories get their act together and if we are then looking for real commitment to the idea of a Labour government when we've failed to build it. HUMPHRYS: Having heard what you've said it sounds as though there is only one contender who put forward the kinds of arguments that you've been putting forward here this morning and that's John Prescott. GOULD: Well I think John and I would agree on a good deal of that and John would certainly put forward employment high up on his list of priorities.. HUMPHRYS: So you'd support his candidacy? GOULD: Well, I'm er, my caveat about John, I have reasons for supporting almost all the potential candidates and I have caveats of a sort about each one of them as well. I'm not sure John either would necessarily see what I believe I see clearly and that is the need to resolve - even if we don't broadcast it in a sense, but at some point we are going to have to resolve this question - do we go for full employment using the powers of a British government to manipulate and decide the level of demand or do we hand those elements of policy over to an independent and European bank. HUMPHRYS: You have to support somebody, who's it going to be? GOULD: I personally think that the choice is likely to resolve itself into a contest between Tony Blair and Robin Cook. I think Robin is perhaps the ablest of the contenders; he may well provide the sort of radical substance to policy which I would like to see, but I think Tony is perhaps more voter friendly and is the more likely winner. HUMPHRYS: So he'd be your man? GOULD: Like everybody else, I think it's a little early for me to say that. HUMPHRYS: Bryan Gould, thank you very much indeed. ...oooOooo...