............................................................................... ON THE RECORD JOHN PRESCOTT INTERVIEW RECORDED FROM TRANSMISSION: BBC-1 DATE: 28.11.93 ............................................................................... JOHN HUMPHRYS: Well John Prescott you've criticised David Hunt for suggesting that there are still going to be at least two million unemployed by the turn of the century which suggests that you think it's going to be better than that..it would be better than that if there were a Labour government. How much better? JOHN PRESCOTT MP: I said that two and a half million which apparently they've estimated for in their social expenditures and what Mr Clarke seemed to be indicating to the IMF when he made the speech. We think that level is far too high and you could have a lot lower level of unemployment if you were to adopt certain measures at the moment. Even with the government's own package of measures you could do that, within its own financial framework. Now that could be a start. But let me make this absolutely clear, it's good that John Smith has now reintroduced into our debate the fact that governments have a responsibility, as we said in 1944 in that White Paper, to maintain and sustain a high level of unemployment. That means we have to start rethinking some of our thoughts about how you actually achieve that. And the government itself at two and a half million, we have to say that's far too high and if it was prepared to order its finances in a different way, to begin to do some of the infrastructure expenditure using public and private money that we've talked about, we can do that. But when I hear people saying where are you going to get the money from? It does cost thirty billion pounds to keep our people on the dole wasting away doing nothing. It shouldn't be too bad for us to actually say isn't it better to put them back to work. That's what Keynes and that's what Beveridge said in 1944 and that's now what we're about to do and to look at those priorities. HUMPHRYS: Alright, lots of points in that, we'll pick them off one at a time. But let's deal with this first point. Beveridge reckoned three per cent was about right, what do you think is about right? PRESCOTT: Well he said the importance of two and a half - three per cent was that you maintained a high level of unemployment in order to justify the welfare expenditure on that welfare state - work and welfare. I don't know what level we're likely to get to but I tell you this: if we're going to reduce it to the levels below two million and get onto that kind of stage, you've got to have a fundamental change within the labour market itself and our whole attitude to.... HUMPHRYS: ...you must have some sort of... you must have some vague idea of.... PRESCOTT: Well I'm afraid what creates jobs is a number of things, if you've got to have a small capacity in our industry which Gordon Brown keeps going on about, it is difficult to get them to increase their actual job creation programmes. So the targets that we would aim for which I think governments must aim for is to reduce it. That's the first thing. Secondly John, I'm not setting the targets, I've only just been in the job a few weeks, you wouldn't expect me to.... HUMPHRYS: But you can't go on saying that... PRESCOTT: But I'm afraid I will go on saying it while I continue... HUMPHRYS: .....before as well. PRESCOTT: I know but at that stage we had one million jobs we said would be produced in two years of a Labour government. HUMPHRYS: And you couldn't do that. PRESCOTT: Well we weren't elected. HUMPHRYS: No, no, but you couldn't find a way of doing that on paper. PRESCOTT: No, no, you're absolutely wrong, we did actually produce a programme. Curiously enough, I've got the figures here which the government then went on after that election to produce one point three million jobs. The trouble is they pumped so much tax into the economy we had a crisis again and they had to then create unemployment of an extra million unemployed to actually deal with that problem. So the important point is very important there John. Governments can if they wish then secure higher levels of unemployment than we have at the present time. It is a judgement whether you think it's a political priority. I don't believe it is a political priority of this government 'cos its political priorities are more to do with reducing taxes for the next election, to get the economy into that stage and maintain high levels of unemployment to justify a massive..swingeing attack on the welfare state. HUMPHRYS: Alright but it is a political priority for you, indeed, it's an absolute commitment... PRESCOTT: It is yes. HUMPHRYS: ...from a future Labour government and you're telling me that you don't have any kind of idea what - I'm not asking you for a commitment for a specific figure, I'm not expecting you to say... PRESCOTT: Well you did, that's exactly what you said. HUMPHRYS: No, no, no, I said some sort of target, I didn't say is it going to be one point, three four million new jobs or one point, three two million new jobs, I asked you for a - what the Americans call: (a hateful phrase) "ballpark figure". You must have something in.. PRESCOTT: No, you can hang on for the target figures because why people have to sit down and talk is to look at what measures we're going to do on investment, on in training, we have the worst trained labour force of any developed economy, we have the lowest levels of investment we've had compared to most of our major competitors. You've got to get that moving again. So it will be come in phases, the first phase of any employment programme will be to have a look at what you can do to get people immediately back to work - both in training and I heard people talk about an awful lot of money will be needed for training, that's true but what did this government do in the last few years? It scrapped the training boards, it scrapped the levy system, twenty six boards have gone. We had the disgraceful situation, the privatisation of ASTRA (phon), so that now we have something like two hundred thousand apprentices and Germany has one million apprentices. I mean they have ten times as much of what we have - no, sorry, it's two million of them. HUMPHRYS: Alright... PRESCOTT: No, wait a minute, the important point is there, you can't then begin to say there should be a levy on training. We should re-establish labour training boards, if you like, or training funds, so that we get the resources which industry must begin to bind to invest in skills because what's strategically wrong about this government is that it's decided to invest in low pay, low skill, there's no future for us in that. We have to be in a high skill, high tech, high educated training and our resources are nowhere near necessary to meet those requirements which will sustain the levels of employment moving towards full employment. So the first stage is to move for phasing in people, long term employment, start the training programme, then the infrastructure programmes. Gordon Brown's already spelt out in his paper that we can start doing, our alternative in this budget, and then make the major, funadamental investment requirements and strategic changes that are necessary to move to the next stage of full employment. HUMPHRYS: That is a commitment, isn't it, on the long term unemployed, you are committed to finding either a job or a training place - quality training - for every single.... PRESCOTT: Quality training. HUMPHRYS: Quality training, okay. PRESCOTT: Not the skivvy schemes the government have given us. HUMPHRYS: Okay, quality training for every one of those one million or so long term unemployed. PRESCOTT: That's over a period of four or five years of a Labour government right. HUMPHRYS: So it's during a lifetime of a Labour government? PRESCOTT: Yes. HUMPHRYS: And that's an absolute commitment? PRESCOTT: We're giving a commitment to give all those people on long term unemployment that we will put them into some form of training or job. That has to be a commitment for us, over the period of government right. Gordon Brown has announced what we would do in the first year as an alternative in the budget. That makes some step towards making these kind of figures.... HUMPHRYS: But you'll accept fairly modest steps? PRESCOTT: Well they are modest, yes, because the constraints in our economy after fourteen years of this government are very very considerable because we haven't done the investments. HUMPHRYS: So a few modest steps in that first year. You're now left with three or four years to create jobs or real training places for close on a million people. Without reflating the economy? PRESCOTT: Well, I mean, the training of the economy... the training for people in the economy, something like two or three years, it does take a long time to give proper qualifications to people and proper training which is needed. Our labour force now is much more flexible, much more part-time than full time. There are many major problems. That I think is creating problems for us, as Paul Gregg was pointing out, of many unskilled people living on the dependency of the welfare state and not being able to break out of that because the unskilled kind of skills that they have means they can't make a proper contribution to getting a job and that's a real problem. We have real problems in the market...the labour market itself which we have to address ourselves to. HUMPHRYS: But you'd accept that to create that sort of number of new jobs or to pay for those real training places, the economy's got to be producing more, hasn't it, and you've got to reflate the economy. In short, you're going to have to borrow more money, aren't you, in order to make all of that possible? PRESCOTT: We certainly need to see more growth in the ecomony and that's the argument in Europe where Mr Clarke and others are actually now arguing with Delors, for example. They're suggesting that they can pump more money into the economy, the traditional way of getting growth in the economy through infrastructure programmes. We think that's a very good idea and what we also like about it is that a European facility means it doesn't come on our public sector borrowing requirement. That's why Mr Clarke's interested in it. HUMPHRYS: ......slight of hand in that isn't there..... PRESCOTT: Nevermind, whatever it is, they can have an argument and we want to change those silly rules but for Mr Clarke at the moment, can take some European money, that can be lever for private sector, we can start some of these major infrastructure programmes at the moment. If you look at the housing, we can take the four billion housing receipts we have at the moment, they are already in the local authority hands, take the quarter of a million building workers off the dole, begin to train in the industry... HUMPHRYS: Oh not quite, not quite, this is all a bit sweeping, isn't it? PRESCOTT: Well, I don't know whether it's sweeping, that's actually fact. I mean that's the amount of people we've got of the unemployed who came from the building industry, from the building industry, yes on the dole. HUMPHRYS: Indeed. But by simply using those four billion receipts, housing receipts PRESCOTT: Oh, no. I said: take some of the building workers and we would take the receipts. So, the money is there, the need for the housing's desperately there and the workers are there. What we need to do and what we're beginning already to see is that many of those building workers are not trained. HUMPHRYS: Right. PRESCOTT: Even in this recession period, we're short of bricklayers, plasterers. Now, we need an emergency training programme to bring them together. Now, the money's there, the unemployed people are there. We'll reduce the public's borrowing requirement because we take them off the dole. Now, that's a classic example of how we train, meet a need, have an industry that is spread throughout the country and begin to get people back to work. And, the other attraction is it begins to attract unskilled workers, of which we've got to direct some of our training programme for. HUMPHRYS: But, you're telling me that you can achieve all this without borrowing any extra money? Without reflating the economy, at all? PRESCOTT: Well, there'll be bits and bits, won't there? HUMPHRYS: Well, right. But, that's not going to do the job you want doing, is it? PRESCOTT: If you, in fact, take...Wait a minute, the Government's already using Capital receipts, actually, to put with building workers together for jobs. It only uses twenty-five per cent. We would say we would have a much more ambitious way of phasing out that money. So, the Government does that. We would do it. We would use the monies now to get them back to work. And, that's clearly there for us to do. We just do it in a more ambitious way. HUMPHRYS: Yeah. But, this is the whole point, isn't it? I don't think there's anything the matter with it. I'm simply suggesting to you that it doesn't go far enough. You're talking about a massive ... What was Gordon Brown's quote? "Hugely increased provision of training and retraining". Hugely increased. You wouldn't deny that that is going to cost massive amounts of money? PRESCOTT: But, it doesn't all have to necessarily come from the Public Sector Borrowing Requirement, does it? HUMPHRYS: But, a lot of it does. Are you-what-well, let me finish the question. PRESCOTT: Sorry. HUMPHRYS: Are you prepared to borrow in order to retrain? PRESCOTT: No. Let's take the training equation. What has happened with the Government, they've released industry of their levy payments. They've abolished the twenty-six training boards, right HUMPHRYS: Yeah. PRESCOTT: So, Industry doesn't pay it. So, the taxpayer has taken on the full burden of Training. So, the Government is constantly, actually, offering skivvy kind-of training 'cos it can't afford the proper training. We have to be very clear. We have to say to employers: like everywhere else in Europe, you have an obligation to invest in people. We are going back to the levy system. It is a charge because it is an investment. It isn't a cost. You're going to have to meet the requirement to train your people, as every other country does. HUMPHRYS: You know, as well as I do, that people can get out, companies. if they choose, can get out of paying that levy in all sorts of ways. They can say that ninety per cent of their personnel costs - put it down to Training. You know that that can be done. PRESCOTT: Well-well, you can set targets easily enough for that. Why is that just the characteristic of the British system, which it has been under those training boards, I'm bound to say, in the past. But, it isn't in Sweden, it isn't in Germany, it isn't in France, which train ten more times their youngsters. That they're unskilled, are without qualification - in Germany, it's twenty-five per cent. In our country, it's sixty-five per cent. It's an absolute disgrace. And, if you don't deal with the seed corn - train our youngsters - and the long term unemployed, offer the opportunities for people who are locked away on Welfare benefits, because they're unskilled and have nothing to offer to provide for a job. We have to break that. That's the fundamental change that is necessary. HUMPHRYS: And nobody in your Party would argue with that but what a lot of people- PRESCOTT: Why are you arguing with it? HUMPHRYS: Well, I'm not arguing with it. I'm putting alternative points. That's different. What a lot of people in your Party would argue with is that, here you are, John Prescott, refusing to say: yes, of course, we'd borrow a bit of extra money in order to push these programmes through, because I'm a Keynesian. You've said you're a Keynesian, you've written that you're a Keynesian and that's the way to do it. And, what Keynes was about - if he was about anything at all - is investing in order to get things going. And, you're not telling me- you're not prepared to say- PRESCOTT: Well you're not listening to me. I'm saying that you can get- HUMPHRYS: Well, alright. Straight question, then. PRESCOTT: Well, I mean, that's the kind of answers you want. You can, actually invest it. HUMPHRYS: That's not an answer. PRESCOTT: Well, listen to the one I'm giving you, then. Let the audience make the judgment, as to whether it's relevant to the question. HUMPHRYS: Alright, alright. PRESCOTT: What I'm saying is: if you've got two hundred and forty million pounds which the Government billion pounds is spending on it programmes at the present time - right? If you order that, in a different way, you can put that kind of resources to investment. HUMPHRYS: So, the answer's No, then, isn't it? PRESCOTT: You can get-No. Of course, it will increase the amounts of money that are, actually, available for job audits. That is, certain amounts of expenditure can produce more jobs than others. Let me put a quick example. I've given you Housing as one. I've given you another one, for example, on buses. If you decide you want to privatise the buses, then, you set it out and you deregulate the industry, what happened then is that most companies managers' bought them, had no money for buying buses and we saw a reduction in the bus building manufacturing from seven thousand buses a year to three hundred. Now, if the Government did that to save a hundred million in subsidies to the buses, it wiped out our bus building capacities. HUMPHRYS: Right. PRESCOTT: If you change those orders of priorities, we'd have more for Manufacturing, more for jobs, more for Training, than a silly ideological nonsense of providing a privatised bus service that costs more and doesn't meet 'alf people's need. That's the kind of difference you can make. HUMPHRYS: Let's run through a few quick suggestions - ways of creating new jobs. Thirty-five hour/four day week. Good idea? PRESCOTT: Well, it has been, for some companies but you can't apply it, as a rule. HUMPHRYS: No. But, is it a good idea? PRESCOTT: It's a good idea in some companies. They're doing it now because they've been able to increase the amounts of jobs, greater productivity that has come from it and some companies have already said it. But, you can't apply it right through the market itself. HUMPHRYS: No, but would you offer incentives to those- PRESCOTT: Ah, yes. HUMPHRYS: -companies. So, that's one way you'd create new jobs. PRESCOTT: Well, Government do it now with the Welfare Payments, for example, by offering companies ten pound on something while Europe is now offering a social fund to offer better flexibility of work practices, that gives greater productivity and employs more workers. I think, the balance between the idea- you know, the five-day/forty hour week for forty years is going to change. There's no doubt about it. HUMPHRYS: You've said, in the past, that's gone. The forty hour week for forty years is gone. PRESCOTT: I believe it's gone and it's going. And, if you look at the levels of overtime and the actual part time Labour problems in this country, I do think you could, probably, get a better mix of full time employment, because, at the present stage, as Paul Gregg was pointing out, it's low pay, part time work, which is what's been growing in Britain. You force them to live on the dependency of the Welfare State. Then, we have to raise the money to pay thirty billion pounds for those on the Dole. HUMPHRYS: So, you- PRESCOTT: If we organise that much. Well, if we organise those things much more effectively. John, I've always said, I'm open to every new idea. If we're to get our people back to work, I'm prepared to look at anything that will do that, to see that it's fair, rather than the skivvy low pay schemes that we've had for this Government for the last fourteen or fifteen years and unemployment continues to go on, on and on. And, we've ended up now appealing to people abroad: come invest in Britain, 'cos the low skill, low rights for workers and the worst future for us. We can't possibly survive like that. A great, proud nation like ours that used to be the centre of manufacturing. We must go back to having confidence in ourselves, in high investment, high education, high value production. That's what we've got to do. Not to the tourist centre of the world. HUMPHRYS: Some people might listen to you and say: I don't like this idea of being restricted to a thirty-five hour week. Well, I want to be able to do my overtime. I want to be...and for the bosses. PRESCOTT: Fine and I'm sure they will. And, they founded in those companies in ... which Pauline Green was talking about, on the Intro, that they had some resistance when they saw it and looked at it. And, they found more people were employed, they, actually accepted it. In some areas, they've actually took wage cuts. And, I'm not advocating this, at the moment. It's horses for courses. And, they want it to be negotiated between the social partners, in this sense. The employees and the employers. And, they found that to be acceptable because they traded some leisure for cuts. Now, I don't know. It varies from industry to industry. HUMPHRYS: But, see, there is a difference. PRESCOTT: But, I'm quite prepared to look at these possibilities, if we want to get one third-if we want to get three million of our own people back to work, instead of wasting away on the dole. That's my obligation. HUMPHRYS: You'd be prepared to legislate for that kind of .... PRESCOTT: No. I didn't say that. HUMPHRYS: Well, you said: look at. What is the difference? PRESCOTT: Well, I mean-well, I mean, I thought I made it very clear. These companies have, already negotiated- HUMPHRYS: Some have, some have not. PRESCOTT: Well, that's not the total solution to the problem, John - that's why. HUMPHRYS: I didn't suggest it was. I suggested this was one way of approaching it. PRESCOTT: No. But, you don't have to legislate for it. That's the political point - you have to legislate for it. Well I'm saying to you: let us be open in our approach to the whole matter of way hours are worked, the combination between full time and part time work, the possibility that everybody must look at their situation and say: are we prepared to tolerate three million on the dole? Can we afford paying massive amounts of money on the unemployment and, then, threaten the whole welfare structure with the instability that's coming in our society, in the drug situation that's coming, you've got to ask yourself, what kind of society do you want in Britain? And, if we don't solve this problem of unemployment, we'll not be living in a civilised society that I and you want to belong to. HUMPHRYS: But, if Bryan Gould was sitting here, instead of me, he'd say: I've heard everything you've said now and there are no truly radical proposals coming out of John Prescott. It's just what I thought, he's afraid of Gordon Brown and afraid of the modernisers and he's no- PRESCOTT: The difference between ... myself and Gordon and Bryan, Bryan copted it out. He comes out on your television and gives the one statement, now and then. I work with a team, I work with a Party. I believe we've set our commitment - and, we've only started a few weeks - and, we're going to achieve that, whether Bryan says it or not. You get him on your television, you just come back to me, in a year's time or so as
begin to spell our our problems. We're going to get our people back to work. HUMPHRYS: John Prescott, thank you very much, indeed. ...oooOooo...