24/10/2011 Daily Politics

Good afternoon and welcome to the Daily Politics. It is Monday, yes,

the start of a difficult week for David Cameron. This afternoon he is

facing one of the biggest rebellions by his backbenchers,

some of whom want a referendum on the UK's relationship with the

European Union. He would like to whip them into shape but it could

prove a tall order. On Wednesday he is off to Brussels

for another crisis meeting. Over the weekend President Sarkozy told

David Cameron that he was sick of Britain criticising the eurozone

countries and telling them what to Is private always best? We will

look up the pros and cons of councils outsourcing their services.

All of that in the next half an hour. With us for the whole

programme is the director general of the CBI, John Cridland. Welcome

to the programme. Without further ado, let's talk about the crisis

facing the eurozone. It has been rumbling on for months and despite

demand for urgent action, European leaders have only gradually edged

towards a solution. The summit revealed there were still

disagreements between France and Germany and friction between

Nicolas Sarkozy and David Cameron. Nevertheless we are promised that

the deal will be struck up the next summit on Wednesday. What might the

final package look like? First, Greece's massive debt will be

written down, possibly by as much as 60%. Without that, the fear is a

disorderly default with Greece leaving the eurozone. That would

mean heavy losses for Europe's Bank's survey will it need more

capital. 8 billion euros was suggested at the weekend. -- 108

billion euros. At about mechanism may have to be expanded to two

trillion euros. Exactly how that will work will be the subject of

debate between Angela Merkel and Nicolas Sarkozy. They will also

discuss whether a European treaties should be redrawn to give them more

control over the budgets of different countries. Is this the

final moment? I do not know if it is the final moment but we are

certainly at the 11th hour. This is where business and politics meet.

Business confidence is slipping, the world growth rate is slowing,

people are worried about jobs and living standards and the biggest

single reason is what is going on in Brussels. Interestingly, the

markets have been pretty mild today, bearing in mind there is so much

uncertainty. Does that surprise you? I think the markets have a

pregnant pause. They are waiting to see if Wednesday will be a

resolution. If we do not get good news on Wednesday, then the markets

will respond badly. At the moment, they are holding fast. But you

think that if on Wednesday there is no deal on those three things,

recapitalisation, shoring up the sovereign debt in those far

honourable countries, and the Greek default, what do you think will

happen to the markets? How bad will it be? There will be some

announcements on Wednesday and then we will have to read the fine print

to see how far they have got. We need each of those three challenges

to be essentially resolved as quickly as possible. Otherwise how

bad will it be? I think the markets have already costed in a lot of the

bad news. Look at what has happened since August. At the end of the day

I am more bothered about what businesses will do, not markets. At

the moment businesses are not investing because they have not got

confidence. Also on businesses, lots of euro-sceptics in Britain so

that one of the biggest problems they have with the eurozone is the

amount of red tape and regulation. Is there that much red tape and

regulation on British business? Is it impeding growth? Yes, red tape

from Europe is impeding growth. We could employ more people if we did

not have European regulations on employment. There are lots of

regulations proposed by the European Commission that would

damage the City of London and our professional and financial services.

British business wants access to the single market but it does not

want the rigmarole that goes with it. We will talk later about the

spat between David Cameron and Nicolas Sarkozy at the weekend.

Before we get to that, David Cameron has been talking about the

eurozone crisis and the vote in the House of Commons today.

While the UK is not in the eurozone and we have no intention of joining

the euro, it is in Britain's interest to have a strong and

healthy eurozone. Nothing would do more to help our economic recovery

right now than a resolution of the eurozone crisis. I don't think this

is the right time to legislate for an in out referendum. It is the

right time to sort out your its problems, the eurozone problems,

defender national interest and looked to the possibility of

repatriating powers back to Britain. The idea of limited treaty change

in the future might give us that opportunity. I am joined brow by

Sir Michael Rifkind, the former Foreign Secretary. -- I am joined

now. He does have a point. Britain should shut up shouting from the

sidelines on the euro. No, I do not agree. We will all be affected by

the collapse of the eurozone and dramas of that time, so we can

express our opinions. We cannot try and veto what eurozone members want

to do to sort out their own mess. think it is about endlessly

criticising. It is not just having their say. The message was that all

of the rhetoric was not helpful if you are saying that the euro was

useless. You are in buying it is all rhetoric but I think it was a

proper debate and discussion. -- you are implying. If we cannot

express our views open, honestly and courtesy, that would be a

misfortune for Europe. So you think Nicolas Sarkozy should shut up

instead? I would not even say it in French! David Cameron is close to

fiscal integration of the eurozone, but then we have the rowers played

out again, that Britain is on the outside, not at the negotiating

table. I think we are in a better position than the alternative would

have been. The crucial thing is that the euro will be here to say

unless it collapses and if it collapses, it will be bad news for

the United Kingdom because that total instability will jeopardise

the part of the world that takes 40% of our trade. The question is

how you reconcile that with our own very firm position that we will not

be part of the eurozone, but we have no objection to those that

wish to be involved. You are worried that 17 countries will make

decisions and we will be outside? think this is all about the future

of the European Union. It is not in or out, it is what kind of European

Union and whether we can develop a European Union of diversity, which

does not expect everybody to be uniform. At the moment, only some

of the States are in the eurozone and that is not an interim

arrangement. The package is expected to require the rewriting

of existing treaties. Or would you expect there to be a referendum in

Britain? I will answer your question but I have to precede it

by saying that if there is going to be a negotiation about in the

treaty to deal with eurozone problems, that is the perfect

opportunity for Britain to raise other treaty amendments that might

be appropriate. We have always said that if there is any treaty change

which limits British sovereignty further, that would have to be

subject to a referendum. Even if there is not a transfer of power in

that sense but there is some sort of tree detained that has to be

ratified by all 27 countries in order to limit countries borrowing

in the future? -- some sort of treaty. Off I would suggest a

referendum if there is some erosion of sovereignty. Otherwise it

becomes a matter of judgement as to whether it should be subject to a

referendum. That would be the sticking point. Don't ask anyone to

express a view until we know what we are talking about. Fine, but

this could be quite close. David Cameron is trying to claw back

powers and he wants to do it now. It could happen quickly.

crucial business in House of Commons today, is that if you are

going to have a referendum, which may be a pro ship, it should be at

the end of the negotiating process not in advance, -- which may be

appropriate. So why is it the wrong time? There could be a European

Union based on trade, but that is not a third option. Fair enough,

but why is it the wrong time and the wrong subject? This is a

massive economic crisis. David Cameron thinks it is an ideal

opportunity to claw back power. does not. Until the eurozone crisis

is resolved, that is the fundamental crisis that Europe has

to address. The question of Britain's relationship with the

European Union is hugely important. That is not something you can deal

with on Wednesday at the summit that he will be attending. As the

Government handled this well with the back benches? I do, you know. I

do think that. The issue is not who will win the vote. The issue is

that it is a challenge to the Government's authority from now on.

I think the Prime Minister is absolutely right to say it is a

fundamental question. A referendum was not in the manifesto of a

coalition agreement. We have to demonstrate that we are a

Government that is able to govern. The massive vote on Thursday, with

a wan Lin whip, where the Government has not even bother to

explain why it is not be acceptable, that would have a severe impact on

Government credibility. Do you think the Government has handled it

well, bearing in mind so many MPs could rebel? But his business is --

British business is concerned with the economy. We want to get on with

creating jobs. The idea of a referendum on the EU would be a

mild distraction. This is not a referendum right now, but a motion,

a debate, for a call for referendum in the next session of Parliament.

It is an attempt to get the vote in Parliament which would be used to

say that Parliament has voted that there has to be a referendum on

leaving the European Union. For that to be Britain's sole

contribution this week to the resolution of the eurozone crisis

would be a form of self-indulgence which we would not be forgiven for.

Why do you think the Government has handled it well when they have

wrapped it up, trying to nobble MPs? We know there have been

threats that MPs will not get promotion and could achieve their

seats. Does that mean handling it well? I cannot comment on threats.

If the Government has a very clear policy, which it has, that they

wish to repatriate certain powers and we do wish there to be

renegotiation, we do not believe in a referendum, then that is what the

Government believes and the Government is perfectly right and

proper to seek to persuade its own members, who were elected on that

manifesto. It is not a binding vote. That is not the point. It is the

impact I made earlier. The erosion. I was in John Major's Government

and the constant attacks, not just by euro-sceptics, we are role euro-

sceptics on single European currency! -- we are all euro-

sceptics. But that constantly damage the credibility of that

Government, did a lot of harm and contributed to the size of Tony

Blair's of majority won the election finally came. Thank you.

How is David Cameron's battle of strength with his backbenchers

facing at? This could be the largest ever revolt on Europe.

Parliament will debate later proposals for a referendum on

Europe. Let's look in more detail at what is at stake. The motion

calls for a referendum in the next session of Parliament with three

options put to the public. Keep the status quo, leave the EU, or reform

the terms of the European Union membership. MPs have been

instructed to vote against the motion. There is likely to be a

significant rebellion, especially among Conservative MPs. How big

will it be? If you combine a number of Conservatives that signed the

motion by Friday and the number that have already defied the whips

over Europe since May, 2010, then the number was 78. Some reports say

that as many as 100 Conservative MPs could defy the Government in

some way later today. However big the Conservative revolt, it is

likely to be the largest ever rebellion by Conservative MPs when

in Government over the issue of Europe. Joining me now is the

Conservative backbencher Mark Pritchard, who will be voting

against the Government and the Liberal Democrat peer whose party

promised an outright referendum at the last election. Mark Pritchard,

you probably heard Malcolm Rifkind talking then. He was saying it was

the wrong motion, the wrong time and the wrong subject. There are

those that say that we should have an immediate referendum. That is

not the case. If it was, then I would have some sympathy with the

concerns expressed by Sir Malcolm Rifkind and indeed other Government

ministers. This motion is calling for a Bill to be brought before

Parliament, over an 18 month period, the period is actually specified.

After that, the bill would be debated in the normal way, going

through both Houses of Parliament, and then subsequently there would

be a referendum which would be another couple of years after that.

This motion is neither determine the final contents of a build nor

the final contents of any referendum question. It would

instruct the Government to hold that referendum in the next session

of Parliament and that is their problem. The fact is I do not think

that Europe will go away as an issue. I think it is back and it

will be more of an issue rather than less. I think it is right that

Parliament should reflect public opinion and speak out on behalf of

constituents. The Government should get ahead of the political perv,

rather than being behind the political curved. Whether it is tax,

bail-outs, Europe is here as an ever-present issue. It is something

that we have to tackle and we need But you are trying to tell the

Government what to do, and that's why they don't like it? We are not.

The motion calls on the Government to introduce a Bill to provide for

the hold of course a national referendum on whether the UK should

A remain a member of the union, status quo, or leave all together.

Now, that is telling the Government what it should do if you were to

win that motion today which you are not going to? The origins of this

was the Government's own initiative e-petitions over 100,000 people

have signed this petition. That's high the motion has been brought

before Parliament, not because of some centre right grouping within

the Conservative Party and let's remember, Jo, that there are people

across the political divide that have signed this motion today.

that is true. Bringing in Lord Oakeshott. It's hypocritical of

your party who stood on a platform with an in-out referendum, now they

are saying everyone should vote against it? No, it's not

hypocritical. We said we were committed to it if there was

fundamental change in the relationship between the UK and the

EU and there won't be. What we have is a coalition agreement that Mark

may not think, but the rest of us signed up to which thinks Britain

is going to be a positive participant in the ch U playing a

strong and positive role. This is the last thing we should be doing

at a time when the eurozone and the whole kth western world is in

crisis, to start going on about what Mr Pritchard says is an in or

out or shake it all about referendum. What on earth does that

mean? If we want to talk about the commitment that both parties made...

No, let's talk about the specific point. Why are you going on about

this at a time when John Cridland and Lord Oakeshott have said it's

destructive at a time when the eurozone is in crisis? Let me say

that Europe's made Europe an issue again in the House of Commons, not

a small group of Conservative backbenchers. The size is growing.

Europe will be more rather than less of an issue. Europe need to be

ahead of the political curve. This issue is not going to go away. It's

not just about the individual powers that we may or may not

renegotiate, it's about the independence and sovereignty.

a minute, Mr Pritchard is like a stamp collector going on whatever

is happening about his collection. Britain is in a desperate state.

Our jobs, our economy is at risk and all he can talk about is the

small print of what the Tories did in one particular election or not.

We've bot to stick together. These are our main trading partners --

got to stick together. Our own economy will go down the tubes. I

never thought I would agree with William Hague on Europe but I am

today. Events have moved on since the

coalition agreement and also there are things in the coalition...

that was the deal and we stuck to it. Not everything has been

necessarily clear with legislation. It's quite clear. I hope that Lord

Oakeshott and the Deputy Prime Minister, Nick Clegg, would accept

that fiscal union, which looks like it will happen, would mane a

fundamental change between in the relationship between this country

and the European Union, and if that is the case, I think it's common

ground between the Liberal Democrats and the Conservatives,

potentially common ground to say fiscal union would mean a

fundamental change and it would triger referendum. Why not wait

until that point? We are already having hints from the Prime

Minister. You and your friends tonight voting are wreckers, you

are wrecking the economy and the coalition agreement. That's a bold

pledge. It's about time you stuck to the deal. When you think about

the rising unit cost, the rising employment costs, the lack of

competitiveness in Europe, many people would argue that a lot is

wrong with the European Union is having a major impact on the

British economy. The obsession we have on the Conservative backbench

is... Very quickly. What about the rest of the world? I didn't

interrupt you. You go on and on. The tone of the debate needs to be

measured and calm. The concern the backbenchers have was to grow the

economy, jobs and tackle the deficit. The Government shouldn't

be a One Trick Pony, we can teal with Europe and the economy.

many resignation also there be? don't know. You don't know if any

aids... I think PPSs need to put forward their own case and put

forward their own arguments as to why or why not they won't stay in

the Government. The figures are going to be probably 80-90 which is

a significant number of the backbenchers that are not happy

with the way this has been played. I hope the will think again in this

11th hour -- I hope the Government will think again. That's the deal

and you have to stick to it. Thank you. Do you care who empties your

bins? A private company or the council.

Does outsourcing always work? David Thompson reports.

It used to be that councils ran local services, everything from

emptying the bins to running the libraries of these days, however,

more and more of that work is being done by private companies and even

charities. It's called outsourcing, and here in stock, they had a

radical vision for the future, one where everything the council did

would be done by somebody else -- in Suffolk. At least that was the

plan. The The original plan was for us to

be a light council, an easy council that no longer did things, so that

we would be outsourcing all sorts of services and going down to a

very small core. We found it simply didn't work. A one-size fits all

solution wouldn't work in a county the size of Suffolk and we felt

that also in trying to do it so quickly, we were not taking

communities along with us. Suffolk hoped to shave almost 30% from its

budget by contracting services out. Like all councils, it's still got

to save that kind of money. Is going private always best? There is

a choice for Local Government. They don't have to contract services out,

they could improve the way they deliver their own in-house

provision and drive down costs and improve services that way. Despite

that, outsourcing is all the rage. The Government wants to make it

easier for councils to contract services out and the private sector

are prtty keen to help too. Wonder why -- pretty keen. The CBI will be

representing their members who do have a vested interest in more

services being bought in from private companies. But that doesn't

mean there can't be significant advantages, both for councils

because they begin to think what they are trying to deliver, so they

have to think about and specify the services they want. If they can get

a good private company or good voluntary organisation to do it,

they might indeed get a better service. Suffolk is a Conservative-

run council but now believes its former enthusiasm for wholesale

outsourcing could provide a Sal Tory lesson for all local

authorities -- salutory. There are lessons to be learned. You have to

be realistic. If you want to do it, take it at a pace that it will take

people along with you and realise that not everything will be able to

be outsourced. Councils are in a tough place, making swinging cuts

but they have to keep the public happy. If nothing else, Suffolk has

asked a big question, just how much faith should politicians really

place on outsourcing? That was David Thompson. We are

joined by Heather Wakefield from UNISON. Before I come to you, I

want to come to you John Cridland first, you are a fan of councils

outsourcing and getting businesses involved, but we have heard there

that it's not realistic to expect councils to outsource everything

even in a bid to save money. Do you agree? I do. The last thing we want

is an absolute philosophy that everything has to be outsourced or

nothing had to be... I thought that was your philosophy that everything

that can be should be? Councils look at whether they're serving

their constituents' interests well and what can be done to make that

service better and they should look at the potential of outsourcing. If

it's a better answer, use it. Bin collection is the example you

started with. Do we mind who empties our bin, we want to know

it's going to be emptied regularly and effectively. So there it's

about saving money and people don't mind. Heather Wakefield, that

sounds like a sensible way of approaching it There are a number

of problems, I'm afraid, with this approach. First of all, there is

very little evidence indeed to show that outsourcing has improved

services. It has cut the cost of services but generally at the

expense of quality of service and certainly at the expense of the pay,

the pensions and the conditions of local government workers. Is that

the same as the quality that is actually being delivered? Are you

saying it has cut money? Essex is saving money, Barnet is saving

money. If the quality is the same, I would argue that council tax

payers would say they're happy as long as they don't pay more? Take a

look at social care and you will see that the quality of care has

deteriorated significantly in many places. We've had the Southern

Cross example recently, private equity company making large amounts

of money and the service collapsing. I put that to you, John? Where you

have an example of poor practice, I wouldn't defend it and contracts

can go wrong in the private sector as in council provision, but it's

down to the council to specify the outcomes it's looking for and make

sure the contract with outsourced providers delivers value for the

local people. Do you accept now, because national Government, and

Number Ten particularly, has made a great deal of this idea of

outsourcing, it wants to put the public sector to one side and get

as many businesses involved as possible. Do you think now they do

have to row back from that philosophy, you cannot do that in a

rolled out way? What I believe is that competition leads to better

service. But does it? If we go oath out for a meal at a weekend we'll

make a decision which restaurant will give us the best value for

money and it's the same with competition in Public Services. If

you test out whether there's another provider, it could be a

charity or social enterprise, could be a mutual, could be a private

sector business that can provide the service better, the public's

likely to get a better deal than if it's a monopoly. That's the test.

Why shouldn't there be competition in local councils? There are ways

of managing Public Services that generate internal competition. You

don't need to play the private market in order to generate

competition. You are saying not at all, even if there is clear

evidence that it saves money and the quality is still either the

same or improved? There is absolutely no evidence to show that

Public Services have improved as a result of outsourcing and indeed,

at this point in time, a large number of councils are bringing

services like housing management, environmental services and so on

back in-house. The problem with outsourcing is that it adds up to a

massive haemorrhaging of public money through procurement costs,

through fraud, I'm afraid the Government's own National Audit

Office has said that 1.3 billion pounds a year is lost in fraud.

That is through privatisation. going to have to wrap it up there.

Thank you very much. Just time before we go to talk about all

things Europe. Adam Fleming is on College Green. Give us an idea of

the numbers stacking up? Good afternoon. I'll give you an idea of

what is happening here. We have a demonstration by supporters in

favour of a referendum on the EU. It's a mixture of the campaign for

a referendum. I see some UKIP banners there and some signs of

people from the BNP. One of the banners says, forget democracy in

Libya, what about here in the UK. That is what is happening here, the

question is, what is happening over there? It's a febrile atmosphere.

The number everyone is focusing on is 41, that's the biggest historic

rebellion amongst the Conservative Party on Europe in the past. That

happened when John Major was Prime Minister, so everyone is looking to

see if David Cameron will be able to, unfortunately for him, top that

number. We are going to have to wait until tonight when the vote is

held to see how many rebels stick to their guns and walk through the

lobby supporting the motion calling for a referendum on Britain's

membership of the EU. What about the other parties? A good point.

When we are looking at the voting list for who supported this

referendum call, it won't just be Conservative Euro-Sceptics, this

will be some members of Labour supporting it, most notably Keith

Vaz, the senior Labour MP, he's pro-Europe but pro-referendum. We

have heard there will be a Liberal Democrat, Steven Gilbert, who is

supporting in favour of the referendum as well, and then

there's the DUP in Northern Ireland. Mr Shannon in fact was instrumental

in making this happen. Sounds very exciting there. That's all for

today. Thanks to our guests, especial sli John cild land, for