24/10/2011 Daily Politics


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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


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