................................................................................ ON THE RECORD RECORDED FROM TRANSMISSION BBC-1 DATE: 5.2.95 ................................................................................ JOHN HUMPHRYS: Good afternoon. Mr. Major has put yet more obstacles in the path of Britain joining the single European currency and infuriated many Tories in the process. I'll be getting both sides of the argument: the view from Brussels, the heart of Europe - and the view from the Foreign Office, born-again sceptics some say. That's On The Record after the News read by Moira Stuart. NEWS HUMPHRYS: And with me now is David Davis, the Minister for Europe. Good morning. In the past month let's look at what has happened, or what appears to have happened. Mr Major has said we won't negotiate on any major constitutional change. We won't accept any major constitutional change coming out of the inter-governmental conference. We've had Mr Portillo spelling out his as it were, three Nos. And now we've got Mr Major wanting effectively, to rewrite substantial bits of the Maastricht
Treaty. What next? - a rewrite of the Treaty of Rome?, where are we going from here? DAVID DAVIS MP: Well, perhaps we'd best start with what we've got as common ground because that's easily put. HUMPHRYS: Common ground between whom? DAVIS: Across the party, I mean across the party from Norman Tebbit to whoever. I mean, firstly a point which wasn't very clear in your otherwise interesting film, was that we pretty much all agree that we want to stay in Europe, it's posed rather differently there, but - and Norman Tebbit would agree with this, and we want to stay in for three reasons, one because this year we're celebrating if you like, fifty years of peace, and the European Community along with NATO has been a part of the architecture that has delivered that, and we hope will continue to deliver it including the central European and eastern nations who want to come on board, very important. Secondly, the point you did pick up in your film, which was the question of the jobs, the economic benefits of Europe. Those inward investments alone gave something like six-hundred-and-fifty thousand jobs, and that's not the only benefit, but that's very important to the constituents of everybody you talk to. And thirdly the point that Leon made very wisely at...towards the end of his commentary, and that was that Britain's involvement in Europe actually makes Europe better for us, for Europe and for the world at large. He picked out GATT, in which he played a very honourable and foreceful presence, and our involvement, his involvement in the negotiations on free trade made Europe less protectionist, more pro-free trade which is better for the whole world including ourselves, including Europe itself. Now those things, those reasons are reasons for us being within Europe. And if you ask Norman Tebbit he would say we should stay in Europe. HUMPHRYS: Right. Well, let's accept those, and look at those things on which there is very little common ground, and the sort of thing that Sir Leon Brittan is worried about. He's worried about what seems to be an attempt by Mr Major to rewrite Maastricht. Let's remember what he said about it at the time. He said, a good deal for Europe and a good deal for Britain. Now he wants to tighten up the conditions governing entry into the ERM, into the single European currency. Indeed he seems to be saying not just, let's tighten up conditions for Britain going in, but for it coming into existence at all. DAVIS: Well, I'm not going to pre-empt Ken Clarke's laying out of the .... HUMPHRYS: I don't think you have to do that because we know what Mr Major said on Friday night. DAVIS:" But on Friday he said, "We want to tighten up the conditions", I think he actually said, "for Britain's entry". HUMPHRYS: No, he didn't, I've got the speech in front of me, I've read it very carefully, and he didn't. DAVIS: But nevertheless, that argument is for a very good reason, and he actually put it this way when he spoke on Friday. What he said was because, he said a wrongly designed, a wrongly arranged EMU would be destructive. HUMPHRYS: He said it would tear the union apart. DAVIS: That's right. That's right, and that's one of the points I think which underpins a lot of what we're doing in terms of positive arguments at the next IGC. HUMPHRYS; But why was it the right treaty at the time and all of a sudden it's not the right treaty. It couldn't be that domestic political considerations have affected the way it's been ... DAVIS: Well, no I think actually that's one of the points, the other points I'm going to take up, and it's this, that you are I think, trying to present an argument that says, well, the policy is designed by some sort of compromise between who pulls hardest. The policy is designed in Britain's national interest and it's considering the question of Britain's national interest, and the effect on Britain's national interest of European Monetary Union, whether we join or not, that leads to this view. (INTERRUPTION) And the view has developed over time. We took, I mean, Leon mentioned the involvement of the Central Bank, but we took a very firm forward line during Maastricht, and it was a negotiation of course, you don't always achieve everything you want in negotiation. We took a very firm forward line on convergence criteria. The reason for that was because we thought at the time that it was very important to get European Monetary Union right, for Europe as a whole irrespective of Britain's position, and Britain secured an opt-out at that time because we were not sure as to what the best outcome would be for Britain. HUMPHRYS: But we did accept those convergence criteria at the time. We said, yep, we've got our own opt-out and we may or may not when the crunch comes, go in, but we accepted the criteria as far as the rest of Europe were concerned. Now Mr Major is saying they've got to be tightened up, so what's changed between then and now, apart from the domestic political scene. DAVIS: This is a fiercely complex area, fiercely complex both in terms of the economics and in terms of the political arguments relate to European Monetary Union, and as we go along our thinking
develops on the matter. There's nothing unusual about that, there's nothing odd about that, the more complex the policy the more the thinking will develop. HUMPHRYS; Oh, it's pretty unusual to want to rewrite a treaty that you described as a good deal for Britain and and a good deal for Europe, that's pretty unusual. DAVIS: Oh I don't think so. I think, you know, we...Mr Major himself has said that it was a negotiation. We didn't get everything we wanted at the time and this is an area where our thinking is vast. There's nothing unusual, nothing wrong, nothing reprehensible about that. HUMPHRYS: What we're trying to do is to stop the creation of the single European currency and we're simply not going to succeed
in that are we? It's a hopeless quest. DAVIS: Well it's a wrong premiss, that is simply not the case. What Mr Major has done and it's interesting, this argument wouldn't exist if we hadn't secured the opt out in the first place of course, so it's pretty prescient in that respect but the truth of the matter is, that we want to see if an EMU comes into effect, as it's likely to do I think in 1999, for part of Europe at least. If it comes into effect, we want it to work, we don't want it to destroy Europe. HUMPHRYS: It may come into effect much earlier than that, of course. DAVIS: That's possible but not likely and if so, as the Prime Minister has said, we won't be part of it in '97. HUMPHRYS: You see, Michael Heseltine in The Sunday Times this morning, an article that he's written himself, so there can be no question about whether he was tricked into saying something he didn't intend to say, it's an article that's signed by him, he acknowledges that it is no longer, Europe is no longer a question of a single market. Once the.....let me quote from it: "..once the floodgates of European..of economic advance are
opened, there will be a growing demand for political control, this is the nub." Now what he means, presumably by political control, is what would flow from a single European currency. Now that is something that this government is simply unprepared to accept. Is that the case? DAVIS: He also quotes, at the end of that same article, Winston Churchill I think saying that when you undertake a great project, you don't make all the decisions miles in advance, you make them as they come up. HUMPHRYS: Yes. DAVIS: I don't think..I don't think Michael Heseltine would argue for a centralising Europe, just the reverse. I don't think he would argue for control from Brussels, just the reverse. All he's done in his job recently, it would indicate that he takes the view, just as the rest of the government does, certainly as the Prime Minister does, that a decentralised Europe is better, not just for Britain but for Europe as a whole. HUMPHRYS: Yes, but Mr Heseltine wants a single European currency and everything he has said and everything he wrote in The Sunday Times this morning, suggests that he is enthusiastic, that Britain should be a part of that. The government is not enthusiastic in that sense is it? DAVIS: This government has maintained an open option on it. It said, and the Prime Minister has said, that in 1997 we will not join. In 1999, which will be another Parliament, another Parliament will have the right to look at it and it's quite important to bear in mind with such a complex and difficult issue, as Leon himself admits, as others admit, it's a complex and difficult issue - to get all the facts together and know the position before you make the decision and then that decision would have to go through Cabinet, Parliament and then be carried through. HUMPHRYS: But the fundamental difference between the Leon Brittan or the Michael Heseltine view and your view, is that what they are saying is we must make concessions, what you are saying is we must tighten up conditions, we must make it more difficult for it come about rather than less. DAVIS: No, no. What Leon was saying was actually a..I think, a rather important and rather wise point. He said that we should take a positive agenda into the next IGC, into the discussions there and he's right because the next inter-governmental conference will be the conference that lays the ground for the enlargement to the East, which is an important part of the contribution to security and stability that the European Union can offer and we are going in with a positive agenda for that. The Prime Minister said at Leiden that he wanted to see more flexibility, the ability to bring on board diverse countries.. HUMPHRYS: In that respect certainly, there's no dispute about that, there's no dispute about that. Where the dispute comes is the conditions for setting up the single European currency, what Sir Leon said is that we must slacken, we must loosen, those were his exact words, those conditions. What Mr Major said is that we must tighten them up. DAVIS: As I heard Leon, what he said was that there were people who would try and loosen those conditions but they would not succeed and that is right because the fact of the matter is, if the EMU is built as it were on sand, it will do damage, that's the point the Prime Minister was making on Friday. It would do damage to the European Union and the three reasons I gave before, for Britain wanting to stay within the Union and influence it in the way that we think is best, mean that the Union must go on as a stable entity and this will not add to it, as a stable entity, if you loosen those conditions. HUMPHRYS: Alright, well let me put another of Mr Heseltine's comments this morning to you: 'to secure our objectives', he said, 'we must make concessions'. Now we're doing exactly the opposite aren't we? We're saying, we're going to go to the inter-governmental conference with our mind firmly made up on a series of issues and there is going to be no give on those. Mr Portillo made it absolutely clear what he thought about three key areas and presumably, he has the government's approval, Mr Major's approval to make those points. DAVIS: Michael's pointing out what is the case in any negotiation, if you had a very complex area of negotiation there will be give and take, but what Michael Portillo is pointing out I think, is that they are areas which the government considers to be very important. We do not want to see a centralising prescriptive European Union. We have said, and it doesn't matter whether you take Michael Portillo or Douglas Hurd... HUMPHRYS: Well that's a straw dog because nobody's saying we do want a centralising and prescriptive union, that's something that you're creating as a kind of myth, then we can say let's put our heads in the sands because things are changing. We don't want that, but nobody's saying we do want that, what Mr. Heseltine said this morning is, "There is another way to secure our objective", he said, "at least some people think there is, and that is to wrap ourselves in the national flag and give not an inch. You will earn the plaudits of the crowd and you will attract today's macho headlines". Now that clearly is what he believes is happening. DAVIS: But if you had Michael Heseltine here now he would not say to you that that means we give up the pursuit of our national interest. HUMPHRYS: No, of course he wouldn't, nobody's suggesting for a moment that he would.... DAVIS: And that is what I'm arguing we're doing, that we are pursuing our national interest and we are also pursuing the interest of the European Union, because those who would argue for a centralising and prescriptive union, and there are those, there are those in Europe. HUMPHRYS: ....hear those voices in Britain too. Can anyone in the Tory Party argue for a centralised and prescriptive union? DAVIS: Well I was talking about our national interest, maybe you should look wider when you're talking about a negotiation we're going to have with fourteen other people, or fourteen other countries. There are those who would argue for a more prescriptive, more centralised European Union, and we will have to argue against them, we will argue against them on two grounds. One, because it's actually in our national interest to have a looser, lighter touch, decentralised Europe if you like, but also because it's in the European Union's interest, it will make it more stable more effective in the long run, and that's what we want. HUMPHRYS: Can you imagine yourself voting for a single European currency, you're the minister for Europe, can you imagine yourself doing that? DAVIS: There's a very good reason for the Prime Minister leaving that option open, it's because... HUMPHRYS: Well I'm asking you....it's a matter of principle now. DAVIS: I am not going to give you an advanced view on what my opinion will be in 1999... HUMPHRYS: I'm not asking for an advanced view of 1999. DAVIS: ...or whenever this issue comes up, I'm not going to give you an advance view on what happens then because for the very reason I gave at the beginning, and that is that this issue is extraordinarily complex, it's complex from the point of view of the economics, whether it's in Britian's national interest from an economic point of view or not, it's also complex from the point of view of the politics of it, what it does to sovereignty and so on. HUMPHRYS: Well if that is the case why do we hear members of the Cabinet saying: I would hesitate for an eternity before I came out and said I will vote for a single currency, I don't think that will happen, and I don't think I will ever do that. DAVIS: That's a matter you will have to ask
them. HUMPHRYS: Jonathan Aitken. DAVIS: That's a matter you'll have to ask him. HUMPHRYS: An important figure in the Tory Party. DAVIS: He's not here. HUMPHRYS: Made up his mind, absolutely clear about it: "I don't think I will ever do that". Now what kind of message is that sending? DAVIS: Well you'll have to ask him what he meant by that, I didn't hear that particular commentary, I gather it was on this morning. I was travelling down to your programme for that. HUMPHRYS: But you couldn't subscribe to that yourself, could you? DAVIS: I've told you what my view is, and that is that we have got an enormously complex issue which we have to address at some point in the future no doubt, in 1999 or later, that's four, five more years away, and to address that issue now, for me is premature. HUMPHRYS: And you really don't think it's important that a government has a very clear view some years ahead, of those
developments. It may happen in two years' time, it may be that in two years'
time we will see ourselves on the fringes, and you would accept, would you not, that if there is a single European currency in which let's say seven countries are involved, and we are on the outside of that, on the fringes of that, it's going to be immensely damaging to us economically. DAVIS: You started this discussion with a comment about what the Prime Minister said about extra conditions about this, that is a perfectly reasonable point of view to take, that you know, we should be looking at the conditions that make this system work. We are doing that, we still have a say in that, it doesn't mean we have to make up our mind five years in advance, the important thing for Britain is we get it right. HUMPHRYS: The important thing for Britain, according to Sir Geoffrey Howe, to Lord Howe, is that we are subordinating our national interest to short term tactical considerations of party management. DAVIS: Well I disagree with him, what we're trying to do is get what's best for Britain, and then we'll persuade people to our cause. The fact of the matter is, we're going into the next inter-governmental conference with arguments on decentralisation, arguments on involving national parliaments, arguments on the European Parliament, arguments on subsidiarity, all of those are positive points which you'll find the Prime Minister of France, maybe the future President of France arguing exactly identical points with last week. HUMPHRYS: He wants a single European currency does the new President...the next President of France. DAVIS: But he also wants to have the nation state protected. HUMPHRYS: David Davis, thank you very much indeed. ...oooOooo...