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Monday, 18 February, 2002, 10:42 GMT
Lord Macdonald: On the Record
Lord Macdonald of Tradeston
Lord Macdonald appeared on the BBC's On the Record
Cabinet Office Minister Lord Macdonald of Tradeston: On the Record interview on Sunday 17 February.

JOHN HUMPHRYS: Lord Macdonald, we all know the basic details by now, LNM is a foreign company that has a tiny, tiny proportion of its staff working in this country. How is it in the national interest for the prime minister to help it to buy the state owned steel company, or industry, in another foreign country - how is that in the national interest?

LORD MACDONALD: Because we believe that the modernisation of the economy of Romania and indeed of Eastern Europe is fundamental to the future of Europe. Our ambassador in Bucharest was encouraging that process. That's why he wanted to deal at prime ministerial level with Adrian Nastase, the Romanian prime minister. The loan that's been referred to there is a loan from a bank backed by 60 countries

HUMPHRYS: We helped them to get that loan.

MACDONALD: But a couple of dozen of countries in the board of that bank, that shows the wide spread international support for this modernisation process. Now if it's a bank loan but is going to back a company that does have British links, it does have an ownership by Mr Mittal, who is on the voters roll in the United Kingdom. But the most important thing is that we are in there helping the country modernise, to help shape the direction in Romania because that in the end, will be good, not just for Romania but for the European Union and indeed for the United Kingdom.

HUMPHRYS: It helps the United Kingdom, though not a jot in terms of profits or jobs.

MACDONALD: Well, it helps the future of Europe and you ask there about why businesses for instance should back the Labour Party. I think they should back the Labour Party for the same reason that the trade unions do, that we have delivered an economy that is good for business and for workers in those businesses and that economy we believe, in future, will be under-pinned even more by the accession of these European states that are going to fund the European Union (sic).

HUMPHRYS: Not an easy argument if you are talking to a group of steel workers, who feel that their interests - and I'm talking here about British steel workers with jobs in Britain, who feel that their interests have been damaged. Mittal has been damaging the interests of British steel companies and now we learn, this morning, again another revelation, that he has spent 420,000 lobbying in the United States to keep out foreign steel which would of course include our foreign steel, our steel. So, what we are doing is helping a foreign businessman to damage the interests of this country's steel industry.

MACDONALD: This country's steel industry is mainly Corus and Ian Goldsmith of Corus said earlier this week that the deal in Romania would only have a very marginal effect on their markets. Now if you've got a global company like this, trying to position itself in different markets, then of course there may be contradictory elements to it. But what we are concerned about is backing a broad range of international opinion that says modernise Eastern Europe, modernise Romania, encourage that process and let Britain have an influence on it, because in future we want to see more British investment in Romania and that will be good for the British workers and the British economy.

HUMPHRYS: You mention Corus, let me mention another steel company to you, Allied Steel. That's based in South Wales. Its chief executive, Graham Mackenzie, says that what Tony Blair is doing and I'm quoting, is backing a business that is already supplying to the United Kingdom and will import more as a result of this deal. He says: "We are under enormous pressure, he has lost," or his people have lost "350 jobs in and around the Cardiff area because of dumping steel from Eastern Europe".

Now, this is a British steel company that has been damaged by this company and will be damaged more by this company and the union, the GMB union, says exactly the same, "Romania is a major competitor".

MACDONALD: Well I believe that obviously the steel companies have been damaged by the shifts in the global economy in respect to steel but this government...

HUMPHRYS: Why this specific company. This company that has already damaged our...

MACDONALD: There was another statement this week from the Steel Workers Union which said people are playing politics with this issue.

HUMPHRYS: Well, do you want me to read you what the GMB Union have said, which is exactly not: "This is another blow to the beleaguered workers at Corus". The company says this decision has come as a direct result of cheap competition from abroad. The time has come for ministers to stop doing this kind of thing". Well, now?

MACDONALD: Well, to be attacked by the GMB comes as no surprise.

HUMPHRYS: But they represent British workers, unlike this other company that employs foreign workers who we are helping.

MACDONALD: What we have done for the economy has been the greatest possible help to British workers.

HUMPHRYS: I'm not talking about what you have done for the economy, I'm talking about this very specific incident where the prime minister remarkably, remarkably, you've given us no other instances where he's done this, signs a letter to help a foreign company buy an industry in another foreign country - an extraordinary thing to do.

MACDONALD: Not at all, what we are talking about is trying to create an economy in Europe, where Britain can play an increasingly active and we hope prosperous part in that.

HUMPHRYS: How many times has the prime minister done this sort of thing in the past now?

MACDONALD: Well Robin Cook said earlier this week that it had been done many times.

HUMPHRYS: I'm not asking Robin Cook, I'm asking you - how many times has he done it?

MACDONALD: Well, I'm not foreign secretary. When Robin Cook was foreign secretary, he'd done it many times. The prime minister...

HUMPHRYS: Well, has he given any details? I mean I'd be very interested in how many times he'd done it. How many times?

MACDONALD: Well I don't know how many times.

HUMPHRYS: Well, I'm sorry, will the best will in the world, you're here answering questions on the government's behalf, as a.

MACDONALD: Oh, come on.

HUMPHRYS: No, not come on at all. This is...

MACDONALD: Don't be facile. How many times...


MACDONALD: How many times do ministers get involved in trying to help companies?

HUMPHRYS: Well I'm asking you to help.

MACDONALD: Dozens of times and...

HUMPHRYS: I'm asking you to help me and the audience on this. The prime minister sits down and signs a letter to the prime minister of another country supporting a foreign company whose interests work against the interests of our own steel industry. I am asking you and it's a perfectly sensible question, I'm sure the audience of this programme would think anyway, I hope they would, how many times has that happened before?

MACDONALD: You put it in a way that distorts what I was saying which is...

HUMPHRYS: Answer it the way you like.

MACDONALD: What we have done, we have done is, we have created an economy which has put 1.2m extra jobs.

HUMPHRYS: You're broadening the issue and that isn't the question that I'm asking you as you well know.

MACDONALD: Well broadening, well I'm broadening the issue.

HUMPHRYS: I'm asking you about this specific question.

MACDONALD: I'm broadening the issue because you broadened the issue there with a very generalised smear attack if I might say, by Iain Watson.

HUMPHRYS: Well let's deal with this. Let's deal with this specific case. How many times has the prime minister done what he did on behalf of this foreign company? How many times has he done it?

MACDONALD: The prime minister's spokesman earlier in the week said that the prime minister had on a number of occasions.

HUMPHRYS: How many?

MACDONALD: In a number of countries.

HUMPHRYS: Once, twice, 10 times?

MACDONALD: I do not know, well you would have to back through years of correspondence to establish that.

HUMPHRYS: So are you suggesting to me that he often intervenes on behalf of foreign companies? Is this what you're telling me?

MACDONALD: No what I'm saying is he's intervened in Romania, an important future market for us, an important country, a very important country in the Balkans, which is in desperate need of modernisation. We believe that's good for Eastern Europe, we believe it's good for the EU.

HUMPHRYS: All right.

MACDONALD: We believe it's good for Britain. That's why.

HUMPHRYS: Let's look at the other reasons that other people offer, as evidence for why Mr. Blair got involved in this particular case, may be right, may be wrong, but let's put to you a couple of points. He says, Tony Blair says, he did not meet Mr Mittal and yet, he went to a party at Lord Levy's house which was held specifically for fundraisers. A lot of people there admittedly, about a hundred people there. Only a few of them were Asians, point number two. Point number two, I doubt whether there were many there who had handed over 125,000 to the Labour Party. It is surely inconceivable and I use the word advisedly, that Mr Blair did not meet Mr Mittal on that occasion.

MACDONALD: What's quite clear is that our ambassador in Bucharest said that this was a priority as far as he saw.

HUMPHRYS: I'm not asking you about the ambassador of Bucharest.

MACDONALD: For the modernisation...

HUMPHRYS: I'm asking you why Mr Blair said he didn't meet Mr Mittal when it is most unlikely, inconceivable indeed many people would say, that he did meet him. That's what I'm asking you.

MACDONALD: Well prime ministers meet many people.

HUMPHRYS: So why didn't he say I probably did meet him? I met him at that party. Why didn't he say that?

MACDONALD: Because we are concentrating on the big issues John and with respect...

HUMPHRYS: Well I'm sorry. That is a straight-forward question that gets to the core of this, did Mr Blair.

MACDONALD: What you're doing, what you're doing, what you're trying, what you're trying to get into is a pseudo-forensic examination of tiny detail which tries to find guilt.

HUMPHRYS: I'm trying to get to the truth.

MACDONALD: Well let's get at the truth.

HUMPHRYS: Did Mr Blair meet Mr Mittal? Straight forward question.

MACDONALD: In context.

HUMPHRYS: Straight forward question - did Mr Blair meet Mr Mittal?

MACDONALD: What we are talking about here is trying to build a much more prosperous Britain and we're trying to do that by making sure that we're fully involved in Europe.

HUMPHRYS: Made that point and I've allowed you to make that point several times. I'm now trying to get into a little more detail. Let's look at what happened. The donation was made in May. Tony Blair meets Mr Mittal presumably, at this party in June. He signs the letter on his behalf in July. Yet we are told that he didn't know he had made the donation when he signed that letter. Again I put it to you that's inconceivable?

MACDONALD: No, you're putting it exactly the wrong way round. What I'm saying is that many business people will back the Labour Party because we provided a very strong economy...

HUMPHRYS: Of course, I don't dispute that for a moment.

MACDONALD: Just as the trade unions do. And what I'm also saying is the priorities for backing this company evolved out of the situation in Romania. They came to us from the ambassador - that's confirmed by the Foreign Office - so in those circumstances prime ministers yes, sign many letters of that kind.

HUMPHRYS: But do they sign many letters of that kind?

MACDONALD: And I'm sure that...

HUMPHRYS: Well you've not given me any examples of when they had. But look, let's look at this other area, when the Foreign Office drafted the letter, the original letter that went to Number 10 Downing Street, it described Mr Mittal as a friend of Tony Blair. Now (a) why did they say that? And (b) why was it cut out of the letter when it went to Number 10? This letter that Mr Blair apparently only gave 30 seconds to...

MACDONALD: John, this I think, this is fake forensics here.

HUMPHRYS: In what sense is it fake?

MACDONALD: Well because I don't know what the first draft would be.

HUMPHRYS: Well that doesn't make it fake.

MACDONALD: The first draft might come up.

HUMPHRYS: I might suggest that perhaps you ought to know...

MACDONALD: Your style of trying to conduct this is an inquisition.

HUMPHRYS: I am asking you very straight-forward questions, with the best will in the world.

MACDONALD: An official drafts a letter, another official amends it, that happens all the time.

HUMPHRYS: I dare say, I dare say.

MACDONALD: I don't know the details of what...

HUMPHRYS: But I am asking you why in the original letter Mr Blair, Mr Mittal was described as a friend of Tony Blair and then that was excluded. You see, if what we're looking at here is allegations that Tony Blair knew about this and might have been, and I'm not suggesting he was, but I'm trying to get at the basis of this, at the root of this, might have been influenced by that donation, these become, I am sure you would accept this, you've been in this business of journalism yourself long enough, you would accept that those are perfectly legitimate questions, and if you want it all cleared up (a) why can we not have those answers? (b) why isn't, why aren't all the papers to do with this in the public domain? Why not simply publish them and have done with it and say, look, that's it, there's the picture, our hands are absolutely clean on this, go away with that, take it away, and now let's have no more of it? Fine.

MACDONALD: Well, John, as you say, I've been in the media business for a long time and one of the things I know is that there are papers there which are Tory papers and they've run agendas against the Labour Party, always have, they've been doing it.

HUMPHRYS: Oh, this isn't that it's all got up by the press one is it? Is that the defence?

MACDONALD: Well, take the loan story this morning. I mean a loan is a loan, it's backed by 20-odd countries. I won't go over it again as to why I think it's a good thing, but that's run in the front page of a Tory paper, that sets the agenda. Now sadly radio and television.

HUMPHRYS: I've made scarcely any reference to that. I'm asking you for other examples. I'm asking you what happened with the signing of the letter. I'm asking you about the inclusion of the word friend. I'm asking you about Tony Blair meeting Mr Mittal - all of which are legitimate, you must agree, are legitimate questions and you're sitting there either unable or unwilling to answer any of them.

MACDONALD: I've told you I'm unable to answer some of the detailed forensics of it and therefore I don't want to be put in a position of looking as though I'm being evasive. What I'm saying to you is, there is an agenda being run here which is to say, let's undermine the Labour Party, let's undermine its big picture agenda.

HUMPHRYS: ...that supported your election the last time around. Seems unlikely to me, but look, if Duncan Smith, Iain Duncan Smith, wants an inquiry - why not have one?

MACDONALD: Well, if you take the form of their select committee, Donald Anderson their chairman said it's not worth inquiring into, because he can see the politics in all of this and what he is probably more concerned with is the kind of leadership demonstrated by Tony Blair on Kosovo and Sierra Leone and Afghanistan. Those are the big picture issues abroad. The big picture issues in Britain are health and education and transport and.

HUMPHRYS: You mention one Labour MP there, Donald Anderson. What about Piara Khabra, one of your Asian MPs, Labour MP? What he says, or what he suggests very strongly this morning is Tony Blair has been - put aside any culpability and dodgy dealings and all the rest of it - but he says he has been extraordinarily naive in his relations with businessmen, particularly Asian businessmen. Maybe that's at the root of it is it, naivety?

MACDONALD: No. I think what we're doing is trying to encourage the business community to have a productive relationship with government. We want to make it clear that we are prepared to work just as closely with business as we have in the past with the trade unions, and we're working...

HUMPHRYS: Everybody who is watching this programme I suspect would say pretty much what Mr Khabra said this morning in the newspaper. When a businessman, a tough Indian businessman, whether he happens to be Indian or not, gives an awful lot of money to a party they want something for it.

MACDONALD: Well, what business has got for its donations from Labour is the strongest economy in Europe and that economy has produced over a million new jobs, the lowest unemployment for a very long time, the lowest interest rates, the lowest mortgage rates. Those are the big picture issues that clearly our opponents don't want to fight on. They want to fight on this kind of minutia.

HUMPHRYS: Lord Macdonald, thank you very much indeed.

See also:

17 Feb 02 | UK Politics
Labour tops sleaze poll
17 Feb 02 | UK Politics
Sleaze watchdog 'nobody's patsy'
17 Feb 02 | UK Politics
Bank behind the loan
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