12/12/2011 Daily Politics


12/12/2011

Jo Coburn discusses the eurozone crisis with Sir Martin Sorrell, Sir Malcolm Rifkind, Sir Menzies Campbell and the shadow foreign secretary Sir Douglas Alexander.


Similar Content

Browse content similar to 12/12/2011. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

And good afternoon. Welcome to the Daily Politics here at Westminster,

:00:27.:00:29.

where the stage is set for the mother of all family arguments in

:00:29.:00:33.

the Commons this afternoon. He says he was right to veto a new European

:00:33.:00:37.

treaty that would have seen the Eurozone countries forming a new

:00:37.:00:41.

fiscal union. The Prime Minister insists that it would not have been

:00:41.:00:45.

in Britain's interest. But he says he is bitterly disappointed. The

:00:45.:00:49.

Deputy PM says it will be bad for jobs, bad for growth and leave this

:00:50.:00:56.

country a pygmy on the world stage. And what about him? It is back to

:00:56.:00:59.

"I agree with Nick".. Remember that phrase from the election last year?

:00:59.:01:03.

The Labour leader is accusing the Tories of failing the country and

:01:03.:01:06.

mishandling negotiations. All three will be in the Commons

:01:06.:01:10.

this afternoon in what promises to be a highly charged parliamentary

:01:10.:01:14.

occasion, with the future of Europe at stake and the Westminster

:01:14.:01:22.

coalition under extraordinary pressure.

:01:22.:01:26.

That parliamentary statement will be at around 3:30pm this afternoon.

:01:26.:01:30.

We will be taking the political pulse of members of all three main

:01:30.:01:34.

parties in the next half-hour. With me throughout the programme is the

:01:34.:01:38.

businessman Sir Martin Sorrell. If you have any thoughts or comment on

:01:38.:01:45.

anything we are discussing, send them to us. But first, the economy

:01:45.:01:49.

itself. More dire predictions this morning, this one from the Standard

:01:49.:01:53.

Chartered Bank, which says the British economy is already

:01:53.:01:56.

shrinking and will continue to stagnate until at least halfway

:01:56.:02:00.

through next year. Martin, do you see the UK economy returning to

:02:00.:02:05.

recession? No, actually. I have seen the numbers through to

:02:05.:02:08.

November. We have just finished doing our budgets in New York over

:02:08.:02:13.

the last couple of weeks. While the UK has been vibrant this year, we

:02:13.:02:19.

are up about 10% against five to 6% for the company as a whole, we have

:02:20.:02:24.

added 10% to the number of people in the country, so it is at about

:02:24.:02:29.

14,000. A but growth is flatlining. Generally, but our business has

:02:29.:02:36.

done well. It is certainly not flatlining. That is your view, but

:02:36.:02:40.

you do not think the country as a whole will be back into recession?

:02:40.:02:45.

No, I think it will be low levels of growth. That is subject to

:02:45.:02:49.

nothing catastrophic happening. If an Italian or Spanish bank went

:02:49.:02:53.

down, which some say is a possibility, less so a French or

:02:53.:02:57.

German bank, because they would be bailed out. But if that happened,

:02:57.:03:01.

all bets would be offered. I was asked last week whether we would we

:03:01.:03:09.

do our budgets -- whether we would redo our budgets, and if that sort

:03:09.:03:13.

of thing happened, you would be back to a layman's scenario, or the

:03:13.:03:17.

business back budgets are in much better shape than they were.

:03:17.:03:22.

that is a potential event, that the Eurozone fails or that a major bank

:03:22.:03:26.

in one of the Eurozone countries fails. The bank failure is much

:03:26.:03:30.

more short-term. The Eurozone failure is something, given the

:03:30.:03:36.

decision the Prime Minister made, is more in the air. But is the

:03:36.:03:39.

crisis in the Eurozone or anything connected to it the main reason for

:03:39.:03:45.

lack of British growth? It is partly to do with the Eurozone. The

:03:45.:03:49.

Government has reduced the rate of increase in spending. It has not

:03:49.:03:55.

cut spending is. It has addressed the issue of getting the deficit

:03:55.:03:59.

under control, which the Americans have not done. The Americans will

:03:59.:04:03.

face the same issue after their election in mid- November next year.

:04:03.:04:08.

Should Britain consider slowing the deficit reduction programme? In my

:04:08.:04:13.

view, no. It is a bit like turning around the company. You have to

:04:13.:04:17.

deal with the revenue and cost side, and then put in place a growth

:04:17.:04:23.

policy. The statement from the Chancellor was a plan being put

:04:23.:04:29.

together. It is not fully fledged doubt. I would like to see a more

:04:29.:04:32.

robust, visionary plan for the next three and a half years of this

:04:32.:04:36.

government. They have to get it together, otherwise they will go to

:04:36.:04:40.

the nation with the country in the same condition of slow growth. It

:04:40.:04:43.

will not be a pretty picture electorally. The deputy prime

:04:44.:04:48.

minister Nick Clegg has said some increases in executive pay, which

:04:48.:04:53.

has become an even bigger issue, are irresponsible. I do not know

:04:53.:04:59.

which ones he is referring to, but if you look at WPP on its own, you

:04:59.:05:02.

have to look at it in the competitive environment in which we

:05:02.:05:07.

operate. We still work in an international and highly mobile

:05:07.:05:12.

workplace. Is that less of an argument these days, particularly

:05:12.:05:22.
:05:22.:05:24.

in the Times now? No. You will probably have a record year that

:05:24.:05:28.

WPP. We have to look at that in relation to what is happening

:05:28.:05:31.

competitively. We still have to compete against private equity

:05:31.:05:41.
:05:41.:05:41.

companies. The UK, we have 40,000 people here. Our total workforce is

:05:41.:05:45.

150,000 worldwide. His Nick Clegg referring to companies based in the

:05:45.:05:48.

UK or operating in the UK that are working on a worldwide stage, or is

:05:48.:05:53.

he just referring to UK-based businesses? It might be true in the

:05:53.:06:01.

context of UK-based businesses, but not for us in 2011, or 2012.

:06:02.:06:06.

Now, after David Cameron will do his veto at the EU summit on Friday,

:06:06.:06:10.

the coalition pre-Christmas cheer has descended into open warfare.

:06:10.:06:13.

David Cameron will face MPs later to explain why he did not put his

:06:13.:06:18.

signature to a new European back to try to stem the euro crisis. Deputy

:06:18.:06:22.

prime minister Nick Clegg has angered many Tories by saying David

:06:22.:06:25.

Cameron's decision threatened to turn Britain into a pygmy on the

:06:25.:06:28.

world stage. All is not well around the

:06:28.:06:32.

coalition Christmas table. Peace and goodwill are nowhere to be seen.

:06:32.:06:39.

Following the summit, David Cameron said: however, the deputy prime

:06:39.:06:42.

minister Nick Clegg spoke out yesterday, saying it was bad for

:06:42.:06:46.

Britain. It now looks as though the 26 other members of the EU will

:06:46.:06:51.

sign the so-called new fiscal compact for the Eurozone. What was

:06:51.:06:54.

on the table was a plan to stop Eurozone countries allowing their

:06:54.:07:00.

annual structural deficits to exceed 0.5% of GDP. There will be

:07:00.:07:03.

automatic penalties for countries to break the rules. Euro countries

:07:03.:07:07.

will have to submit their budget plans to the European Commission

:07:07.:07:11.

for approval. David Cameron wanted legal protection for the City of

:07:11.:07:14.

London from excessive EU regulations, but his European

:07:14.:07:19.

colleagues rejected his demands and he refused to sign. So can the

:07:19.:07:23.

coalition survive this spot of pre- Christmas indigestion? Let's speak

:07:23.:07:27.

to our deputy political editor. There will be many Tory Euro-

:07:27.:07:30.

sceptic MPs who will be delighted by what they see as David Cameron's

:07:30.:07:34.

bulldog spirit. Will there be a sense of euphoria in the House of

:07:34.:07:38.

Commons this afternoon? Among some, there will be cheering and applause.

:07:38.:07:43.

But the question is what they say beyond that. How far do they ask

:07:43.:07:47.

for more? Do they say, this is just the start, let's look for

:07:47.:07:53.

repatriation of powers and have a referendum? Or do they say this is

:07:53.:07:57.

enough for now? Dealing with the Euro-sceptic wing of the

:07:58.:08:05.

Conservative Party, David Cameron has managed expectations. What

:08:05.:08:08.

about the Liberal Democrats - how difficult will it be for Nick

:08:08.:08:14.

Clegg? It will be difficult for Nick Clegg and David Cameron. Both

:08:14.:08:19.

of them need to manage the coalition. It will be under a huge

:08:19.:08:23.

amount of strain as a result of this. For many Liberal Democrats,

:08:23.:08:29.

their position on Europe is something fundamental. There will

:08:29.:08:32.

be a fair expression of anguish over what has happened from the

:08:32.:08:36.

Liberal Democrat benches this afternoon, when the Prime Minister

:08:36.:08:41.

gives his statement. The question is how much the Conservatives are

:08:41.:08:45.

prepared to allow the Liberal Democrat to express that view

:08:45.:08:49.

almost to let off steam, and how much it develops into a fundamental

:08:49.:08:53.

fissure. The problem with Europe is that it is not a one-off issue like

:08:53.:08:58.

electoral reform or specific policy like tuition fees. Europe is

:08:58.:09:03.

something that is with us day in, day out. It involves constant

:09:03.:09:10.

decision-making. If it becomes a Fisher, you could potentially have

:09:10.:09:14.

rows further down the line. With us now is the former Foreign

:09:14.:09:17.

Secretary Sir Malcolm Rifkind. From the Lib Dems, their former leader

:09:17.:09:21.

Sir Menzies Campbell. And joining Sir Martin, Sir Menzies and Sir

:09:21.:09:25.

Malcolm is the no doubt future Sir Douglas Alexander, the shadow

:09:25.:09:30.

Foreign Secretary. Before we get carried away, Menzies Campbell, how

:09:30.:09:34.

is a bitterly disappointed Nick Clegg going to sit in the Commons

:09:34.:09:36.

this afternoon as part of a coalition government after David

:09:37.:09:40.

Cameron vetoed a deal that he said his bat for Britain? Because the

:09:41.:09:44.

coalition government is essential in the economic interests of this

:09:44.:09:51.

country. So you will give up any other Liberal Democrat plan?

:09:51.:09:55.

overwhelming need is to restore economic stability in the UK. That

:09:55.:10:00.

is why we entered into the coalition agreement. The coalition

:10:00.:10:03.

agreement also provides clearly that there should only be a

:10:03.:10:06.

referendum is an -- if there is any transfer of powers from Westminster

:10:06.:10:11.

to Brussels. What happened on Friday is disappointing. There is

:10:11.:10:15.

no point in hiding that, but it does not reflect a transfer of

:10:15.:10:21.

powers, so no referendum is required. It is of course a setback,

:10:21.:10:24.

but I am not willing to allow it to become a source of permanent

:10:24.:10:28.

division. What made Nick Clegg changed his mind in his response

:10:28.:10:32.

from what he said immediately after the summit and Sunday? The benefit

:10:32.:10:40.

of hindsight. It is not surprising that after a few days, when the

:10:40.:10:44.

full facts and implications begin to be known, that people's emphasis

:10:44.:10:48.

would change. Look what happens when we have a Budget in this

:10:48.:10:51.

country. On the Tuesday, it is hailed as the best thing since

:10:51.:10:56.

sliced bread. By Sunday, people reach different conclusions.

:10:56.:11:03.

that what you would expect from the deputy prime minister? One of the

:11:03.:11:06.

problems of 24 hours-a-day news is that people are expected to make

:11:06.:11:15.

instantaneous response has. David Cameron was in Brussels and

:11:15.:11:18.

Nick Clegg is in his flat in Sheffield being called up at 4

:11:18.:11:21.

o'clock in the morning. Apparently without a clue of what was going

:11:21.:11:30.

on? No, there was a common position. Nick Clegg agreed to proposals

:11:30.:11:35.

which he described as being reasonable, which I believe to be

:11:35.:11:40.

reasonable as well. And that broke down. There was an inevitability

:11:40.:11:44.

about the position in which David Cameron found himself. If you are a

:11:44.:11:49.

student of European history, which all three of us are, for the last

:11:49.:11:54.

25 years, we have found ourselves often at odds with Europe.

:11:54.:11:59.

Therefore, we have few obvious and immediate allies. We have not got a

:12:00.:12:03.

history of co-operation. That was the background against which David

:12:03.:12:08.

Cameron found himself operating. Malcolm Rifkind, what does David

:12:08.:12:12.

Cameron need to do this afternoon? Does he need to stop a sense of

:12:12.:12:15.

euphoria to make it even more difficult for Nick Clegg and the

:12:15.:12:21.

Liberal Democrats? There will not be euphoria as a whole. The crucial

:12:21.:12:24.

point is to establish what has happened and what has not happened.

:12:24.:12:28.

You have had a lot of comment over the last 48 hours about Britain

:12:28.:12:35.

being isolated and not being at the table when important decisions are

:12:35.:12:42.

made. Actually it's, ever since the single currency was created some

:12:42.:12:46.

years ago, there has been an empty seat at the table because the UK,

:12:46.:12:50.

by said -- deciding not to join the single currency, has not been

:12:50.:12:54.

involved in discussions amongst Eurozone members. All that will

:12:55.:12:58.

happen now is that the subject being discussed by Eurozone members

:12:58.:13:03.

will also cover the issues agreed inter-governmental the last Friday

:13:03.:13:07.

on fiscal union and tax harmonisation and so forth. Either

:13:07.:13:10.

we took the right decision not to join the single currency or we

:13:10.:13:15.

didn't. Are you saying that there is no isolation when Britain will

:13:15.:13:18.

be one country among 26 that could make decisions ahead of European

:13:18.:13:23.

summits, and Britain will find it difficult to undo or negotiate a

:13:23.:13:27.

position from that standpoint? has been true for ten years.

:13:27.:13:30.

there are countries outside the Eurozone that have signed up to the

:13:30.:13:38.

treaty. They will not necessarily be around the table either. It will

:13:38.:13:42.

not make much difference what Slovenia, Bulgaria or Romania think

:13:42.:13:46.

on issues that affect the City of London. We have a situation where

:13:47.:13:51.

for ten years, since the single car as he was created, the UK, rightly,

:13:51.:13:55.

by deciding not to join that single currency, cannot expect to be

:13:56.:14:03.

involved in discussions about it. So the Liberal Democrats are wrong?

:14:03.:14:08.

We will be no more isolated than we have been for ten years.

:14:09.:14:11.

Immigration, environment of foreign policy, defence - these are issues

:14:11.:14:15.

in which Europe has a fundamental interests. They are all issues in

:14:15.:14:20.

which the UK has a important contribution to make. If you want

:14:20.:14:24.

an illustration of that, the co- operation between Great Britain and

:14:24.:14:27.

France in respect of Libya, one of the most successful operations of

:14:27.:14:33.

its kind in recent history, that capacity will not go as a result of

:14:33.:14:37.

what happened on Friday. What would you have done on Friday? There was

:14:37.:14:41.

a deal to be done, and we would have got a better deal. You would

:14:41.:14:51.
:14:51.:14:54.

With the benefit of hindsight, what has emerged was that actually,

:14:54.:14:58.

there was a leader who was motivated by a party interests,

:14:58.:15:04.

rather than national interests, the words of Nick Clegg. And a leader

:15:04.:15:09.

that got a bad outcome for Britain, again, the words of Nick Clegg.

:15:09.:15:15.

That is where we have ended up. The fact that we went into these

:15:15.:15:20.

negotiations without Denmark, Poland, Sweden, it was not a

:15:20.:15:26.

coincidence, it was a conscious choice by David Cameron to walkout

:15:26.:15:30.

of the grouping in order to get the Conservative Party leadership. That

:15:30.:15:36.

is a terrible indictment of British diplomacy. I think that's a

:15:36.:15:40.

ridiculous charge, that he walked into negotiations deliberately

:15:40.:15:44.

without a friend. You have to ask yourself, what would Gordon Brown

:15:44.:15:49.

have done in similar circumstances? Because he was by no means an

:15:49.:15:54.

enthusiast for Europe. The fact is, we paid the price for 20 years when

:15:54.:15:59.

we have not appeared to be fully engaged, and it was an inevitable

:15:59.:16:02.

conclusion, that when David Cameron put forward what he did, that he

:16:02.:16:07.

was going to be knocked back. was not fate, this was choice. What

:16:07.:16:12.

would Gordon Brown have done differently? I travelled with

:16:12.:16:15.

Gordon Brown to Brazil, literally to each corner of the globe, in

:16:15.:16:21.

order to get the support of the G20 in the face of the crisis in 2008.

:16:21.:16:25.

But you need to answer the question on behalf of Labour, would you have

:16:25.:16:30.

signed up? First of all, we would have had a different approach, by

:16:30.:16:35.

talking to other countries. And you would have signed up? We would say,

:16:35.:16:40.

why was he not in a position to ask for a seat at the table, when the

:16:40.:16:46.

reality is that when 26 countries now sit down on a monthly basis,

:16:46.:16:49.

Malcolm knows that those issues will have a profound impact on

:16:49.:16:54.

Britain. We would have asked for different protections in relation

:16:54.:16:58.

to the single market, and the terrible truth is that David

:16:58.:17:02.

Cameron came away with a position where 26 countries now, if they so

:17:03.:17:07.

choose, have the capacity to defeat Britain on qualified majority

:17:07.:17:12.

voting and financial the donation. It was not a veto, it was a defeat.

:17:12.:17:17.

There is the question, what exactly did you veto? There was nothing

:17:17.:17:20.

actually in the communique which was going to directly damage the

:17:20.:17:25.

City of London at that point. suggestion is being made that this

:17:25.:17:29.

was all done because of party pressure and so forth. What the

:17:29.:17:35.

Euro-sceptics, of which I am not one, were asking for, was to demand

:17:35.:17:38.

repatriation regarding fisheries, working-time directives, things

:17:39.:17:42.

that were nothing to do with the eurozone or the financial problems.

:17:42.:17:47.

He refused to do that. What he concentrated on was something

:17:47.:17:51.

absolutely crucial to the economic and financial future of the country,

:17:51.:17:54.

which is the City of London, rather similar to what Angela Merkel has

:17:54.:18:00.

been doing, refusing to allow the European Central Bank to be used as

:18:00.:18:04.

a bank of last resort. So each country has its own perception.

:18:04.:18:08.

are you saying that the City of London has now actually been

:18:08.:18:12.

safeguarded? What about all of this qualified majority voting, with

:18:12.:18:18.

Britain excluded? That has always been a threat. It would have been

:18:18.:18:22.

much more of a threat if these new powers, which these countries were

:18:22.:18:27.

seeking, had been sanctified as being European Union treaties. When

:18:27.:18:31.

they are European treaties, not only do you have the risk of

:18:31.:18:36.

qualified majority voting, the European Court of Justice can try

:18:36.:18:39.

and enforce it, the European Commission - but in fact none of

:18:39.:18:43.

that will be possible now. They would be enforceable by law, that's

:18:43.:18:49.

the difference. This is a faire point. What the European Court of

:18:49.:18:53.

Justice would have had the ability to enforce were the rules of the

:18:53.:18:56.

eurozone, in relation to the eurozone. In relation to the City,

:18:57.:19:01.

we are still as vulnerable as we were last week, we are even more

:19:01.:19:05.

vulnerable, because the way you win in these matters is by having

:19:05.:19:13.

allies. Was he right, David Cameron, and in this discussion, have our

:19:13.:19:22.

interests been safeguarded? instant response which Menzies

:19:22.:19:26.

Campbell referred to is a difficult one. My instinct is that it is

:19:26.:19:32.

better to be inside than outside. The Google response to China was to

:19:32.:19:38.

withdraw. I think that was a mistake. This is similar in essence

:19:38.:19:42.

to me. It is much better to be inside, working with the powers

:19:42.:19:47.

that be, rather than outside. I think the issue about... Whatever

:19:47.:19:51.

the rights or wrongs of it, the perception will be, and I have been

:19:51.:19:54.

speaking to an Indian businessman this morning about where he would

:19:54.:19:59.

locate, given what has happened in the last 72 hours, the perception

:19:59.:20:03.

will be that the UK is outside western Europe, and this is a

:20:03.:20:07.

problem. This was exactly the argument when we declined to join

:20:07.:20:11.

that currency in the first place. People said it is better be deep

:20:11.:20:20.

inside, but sometimes you have got to make a judgment. We have two

:20:20.:20:25.

strikes against us, and it is three strikes and you're out. How worried

:20:25.:20:30.

are you about further calls for repatriation of powers? The

:20:30.:20:36.

Europeans will feel emboldened, won't they? No, David Cameron has

:20:36.:20:40.

already shown, by refusing to raise the issue of repay tuition last

:20:40.:20:44.

Friday, he concentrated on the issues which were being discussed

:20:44.:20:49.

at the summit, and he was right to do so. The attitude today for David

:20:49.:20:52.

Cameron is not to be too affected by the congratulations from the

:20:52.:20:58.

backbenches, but to stand up to the Euro-sceptics, who, as Malcolm

:20:58.:21:01.

Rifkind rightly says, want to take Britain out of Europe altogether.

:21:01.:21:05.

That would be deeply, deeply damaging. From business, the

:21:05.:21:09.

perception is that this was a political decision, not an economic

:21:09.:21:14.

decision, and that's the problem. The perception, rightly or wrongly,

:21:14.:21:18.

is that it was made because of the pressures being put on the Prime

:21:18.:21:22.

Minister and the coalition. It is our duty to overturn those

:21:22.:21:27.

perceptions. We will all be watching this afternoon. So, the

:21:27.:21:31.

Government is divided over Europe, and everyone is waiting for a

:21:31.:21:35.

crucial Commons statement from the Prime Minister. What does that

:21:35.:21:39.

remind you of? The 1990s, when the Tory party nearly tore itself apart

:21:39.:21:43.

over the Maastricht treaty, laying the foundations for the EU we know

:21:43.:21:48.

today? Up to a point, maybe. But there are some crucial differences.

:21:48.:21:51.

Adam has been looking back in his history book to find out how much

:21:51.:21:56.

all of that is relevant to today. Here's a coincidence, the day David

:21:56.:22:01.

Cameron vetoed the decision was the 20th anniversary of John Major

:22:01.:22:04.

agreeing to the Maastricht treaty. I think it was a very good result

:22:04.:22:12.

for Britain. In 1991, he kept the UK out of the chapter on social

:22:12.:22:15.

policies and the early stages of the euro. But it sparked a war in

:22:15.:22:21.

his own party. The idea that we're going to be able to control the

:22:21.:22:25.

European Community, in imposing these regulations on employers in

:22:25.:22:29.

this country, is pie in the sky, and a triumph of hope over

:22:29.:22:34.

experience. Parliament must put this stalemate over Europe behind

:22:34.:22:38.

it. I am not prepared to let it poison the political atmosphere any

:22:38.:22:44.

longer. I have tracked down two of those foot soldiers, Sir Teddy

:22:44.:22:51.

Taylor, now happily retired by the seaside, and Rupert Allison, also

:22:51.:22:55.

known as espionage author Nigel West, to find out if any of this is

:22:55.:23:02.

still relevant today. Maastricht was the general principle of ever

:23:02.:23:05.

closer union. Whenever we mentioned that, we were told, this is

:23:05.:23:12.

nonsense, political union will only go to a certain point, the idea of

:23:12.:23:18.

a United States of Europe is absolutely Darfur. -- absolutely

:23:18.:23:22.

laughable. Well, that's exactly where we are heading now. It was

:23:22.:23:30.

absolutely obvious, why didn't people see it? It couldn't work.

:23:31.:23:35.

The treaty got through Parliament, but a year later, eight Tory rebels

:23:35.:23:39.

lost the whip, and effectively formed a kind of party within a

:23:39.:23:43.

party, which held John Major's government to ransom, because he

:23:43.:23:52.

had such a tiny majority. It meant every single vote mattered. It was

:23:52.:23:57.

very sad, the Chief Whip was banging on a toilet door, trying to

:23:57.:24:04.

get him out! Yet new lows reports at the time portrayed them as

:24:04.:24:12.

heroes. -- portrayed them less as heroes, more like weirdos. My own

:24:12.:24:17.

view is that we were right. My own parliamentary constituency had the

:24:17.:24:22.

opportunity to ditch me when I lost the whip, and to my gratitude, the

:24:22.:24:32.

whole of the constituencies supported me. There's no euro

:24:32.:24:37.

enthusiasts at all, apart from Ken Clarke. As the new crop of Euro-

:24:37.:24:41.

sceptics gather to hear the current Prime Minister in the Commons today,

:24:41.:24:46.

they view this period with mixed feelings. Some cringe, others say

:24:46.:24:52.

this is when their political views were forged. The Conservative MP

:24:52.:24:56.

Richard Shepherd was one of those so-called Maastricht rebels - do

:24:56.:25:03.

you feel vindicated now? I have no doubt that what we did was right.

:25:03.:25:07.

And this was the Maastricht treaty, it made us citizens of the European

:25:08.:25:11.

Union, but predicated all the mess that we are in now, and it

:25:11.:25:16.

challenges the very central themes of British history. For instance,

:25:16.:25:21.

our constitution - who is the master, who governs, who is

:25:21.:25:25.

accountable to anyone in this international morass? You were

:25:25.:25:30.

painted there, along with some of your colleagues, as outcasts - did

:25:30.:25:38.

you feel you were very much on the fringes of the party? No, I didn't,

:25:38.:25:46.

and I don't think it is true to say that of the rebels. The change, the

:25:46.:25:50.

seismic shock to the party, was the removal of the whip. In fact, what

:25:50.:25:55.

you heard was a 22 person committee, and as you know, the Government had

:25:55.:26:00.

to send us in the post membership of the party again within six weeks.

:26:00.:26:04.

So it wasn't a big deal. They were on the back foot. But the themes

:26:04.:26:09.

that I am talking about, Angela Merkel said exactly what we said

:26:09.:26:13.

all of those years ago - this is a political project. And yet we are

:26:14.:26:18.

looking at an economic catastrophe, possibly. And when you hear people

:26:18.:26:22.

say, this is political, when it is economic, you know you're in real

:26:22.:26:28.

trouble. And last weekend, Friday, that's what you saw. They're going

:26:28.:26:32.

on a political project, and knock attacking it as if it were an

:26:32.:26:41.

economic project. Sir Martin Sorrell, those same arguments are

:26:41.:26:46.

still what we will be hearing this afternoon? Yes, the argument is

:26:46.:26:50.

about who has political power. It reminds me about what you see

:26:50.:26:56.

inside agencies. In the old days, the country managers would object

:26:56.:27:02.

to the European headquarters having control over their budgets. So, it

:27:02.:27:06.

is a political decision which was taken, and really, the fundamental

:27:06.:27:11.

problem is an economic one. terms of the mainstay of the

:27:11.:27:15.

Conservative Party now, do you feel your views are being shared and

:27:15.:27:25.
:27:25.:27:25.

held by a significant number? you're seeing the new generation

:27:25.:27:30.

coming up, who will just find this incomprehensible, why are we still

:27:30.:27:34.

struggling on such profound issues? Do you think there will be a push

:27:34.:27:37.

for further repatriation of powers from Brussels and possibly a

:27:37.:27:45.

referendum? This is like a huge smokescreen has gone up since

:27:45.:27:50.

Friday's decision, it takes time for the cloud to you're. And there

:27:50.:27:53.

will be come backs on this. After all you have now got non-

:27:53.:27:58.

functioning democratic governments in Italy and Greece. These will all

:27:58.:28:02.

create their own momentum, I think. And so I would like to see how it

:28:02.:28:10.

settles down, but I think the drift is, I have to say, irrevocably, to

:28:10.:28:13.

use a word from the Maastricht treaty, because that is what this

:28:13.:28:16.

currency is supposed to become irreversible - words from the

:28:16.:28:22.

treaty... Very briefly, you say that is the drift, so would it be

:28:22.:28:28.

impossible for the coalition to continue? The division is clearly a

:28:28.:28:35.

very deep and important one. And you have made the point that this

:28:35.:28:38.

is a very difficult moment for the Liberal Party, too. Because to have

:28:39.:28:42.

a general election at this time would not be helpful. Thank you

:28:42.:28:47.

very much. That's all for today. Thanks to our guests, and

:28:47.:28:52.

Jo Coburn discusses the rising tensions leading to this afternoon's statement by the Prime Minister in the House of Commons regarding his veto of a new European Treaty that would have seen the eurozone countries forming a new fiscal union.

Jo is joined by Sir Martin Sorrell as guest of the day and talks Europe with former foreign secretary Sir Malcolm Rifkind, former Liberal Democrat leader Sir Menzies Campbell and the shadow foreign secretary Sir Douglas Alexander.

Plus a look back in time to see if there are any parallels with the Maastricht Treaty rebels on the 1990s.


Download Subtitles

SRT

ASS