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Breakfast with Frost
Gordon Brown MP, Chancellor of the Exchequer
'Five tests' are key
BBC Breakfast with Frost interview:

Gordon Brown, MP, Chancellor of the Exchequer

18 May 2003

Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST: Well decision day for the government over the euro is approaching. Approaching fast, one might say, after a weekend spent pouring over those two and a half thousand pages, we read, or 1800 pages - we'll find out exactly how many pages - individual Cabinet ministers will this week meet the Chancellor and the Prime Minister to give their views. On Thursday the full Cabinet will discuss the subject for the first time together. On the 5th or 6th of June there will be a final special Cabinet meeting and the government's decision on whether Britain is yet ready to join the single currency will be revealed on the 9th of June in a statement to parliament by Gordon Brown. The man who will be making that statement is here right now and he joins me, Gordon welcome.

GORDON BROWN: Good morning, how are you?

DAVID FROST: Very well indeed, very well indeed. In these sessions that you're going to have in Cabinet, and trilaterally as is said, can the Cabinet ministers dispute whatever is the verdict on the tests, or can they say dispute those, disagree with those, or can they, is their task to say okay we have to accept the findings that you've come up with on the five tests and their job is to talk about what do we do now, or are they allowed to dispute the findings of the tests?

GORDON BROWN: This is Cabinet government and then it's parliamentary government and then if the recommendation were yes, the assessment had said yes, and the recommendation were yes, then we would have a referendum and it would be the people that would decide - and I've always made that clear since 1997, that the process is the Cabinet decides, parliament takes its view and if the assessment is yes, then it would be the people that would decide, and of course if there were a referendum then I would be urging on the basis of the five test assessment a yes vote.

DAVID FROST: You would be urging it as strongly as the Prime Minister?

GORDON BROWN: Absolutely. I think, I think what people have failed to understand about the procedure so far, is that we set it down in 1997, we made a decision in principle about the desirability of a single currency, that it would be good for trade and commerce if we could meet the tests that I set down. And the point about the tests and why we've done these 18 studies, why there is this considerable debate in the country at the moment and people say what is the importance of the five tests, the five tests, effectively, define the national economic interest for our country. It is a guarantee that we can ensure jobs, investment and the future profitability of industry and the prosperity of the country, it is our insurance policy against making the mistakes of the past - particularly the mistakes that were made in the Exchange Rate Mechanism era under the last government. So when I make the statement to parliament on June 9th, the focus will be on these five economic tests that define the economic interest of the country, how we can have high and stable levels of employment and growth for Britain, and that's why I think both businessmen who were here this morning will welcome the fact that it's the national economic interest that will be the decisive factor.

DAVID FROST: And in that context, can Cabinet ministers disagree with you about your conclusions, on the five tests? Can they or do they have to -

GORDON BROWN: This is what I said in 1997, it's a Cabinet decision and then it's a parliamentary decision and then it would be the decision of the people, so it is, in a sense, the Treasury examining and providing the assessment, looking in such detail - because, you know, when we joined the Exchange Rate Mechanism, nobody ever did an assessment. The national economic interest was not really analysed in detail. I think people will be very interested in the findings of our documentation, I think they will like to look at it in considerable detail and it will be the national economic interests that will be decisive.

DAVID FROST: And in that situation, as you say, you say that if the tests were passed that you would campaign for them, if the tests indicated yes. If the tests indicated no, or not yet, would there be time in this parliament still to have a later referendum in this parliament, or is it now or never until the next parliament?

GORDON BROWN: No, nobody has ruled out a referendum as an act of dogma during the parliament. What I think people will want to know is the decision that is made on June 9th and where it takes us for the future, and it wouldn't be right for me to presume on the programme this morning - tempting as it is to talk to you about all these issues - what we've got to say to parliament first of all, and we will make our position about the five tests and what we're going to do next clear to parliament when we announce that on June the 9th.

DAVID FROST: I understand that, but what I was meaning was if there was - if there was and you're not saying at this moment - but if there was a situation where it was no to a referendum immediately, would there be in that putative situation, would there be time to have a later referendum in this particular parliament, or is it now or never?

GORDON BROWN: No, as I've always said, nothing is ruled out and certainly nothing is ruled out as an act of dogma or principle. The important thing, however, is to remember that it is the five economic tests that are forming the basis of the decision. The importance of the tests are that they will define whether we believe we can get all the benefits of a single currency in terms of jobs, in terms of growth, and that's why we're looking quite specifically at these issues, David, investment, which was raised by your previous speakers, investment, financial services, the future of the financial services industry, jobs - of course, absolutely crucial, we've created one and a half million jobs over the last few years, we want to create more over the next few years, and we've got to be absolutely sure that there is structural convergence with the rest of Europe and that we have the flexibility to deal with any shocks as they arise. Now that's what the five test assessment is looking at and I really do believe that all this speculation about what happens then, later, after and so on, it's got to get back to this central question, people want to be sure that they have a chancellor, they have a cabinet and they have a government that is putting the national economic interest first. And they want to be sure that the economics and not dogma will be the decisive test and that is why the focus in my statement on June 9th will be on the five economic tests and how they're met.

DAVID FROST: In that case Gordon, is it therefore logically possible that in fact we will never go into the euro? That when Leo Blair gets married and takes his children to the continent, he'll still be changing his pounds into euros and where as John Reid says, its not a question of if, it's just a question of when, you would say it's a question of if and when, wouldn't you? I mean we could not go in ever.

GORDON BROWN: But David sometimes the discussions that people have are based on a misunderstanding. We are committed to the principle of a single currency. That was a decision that was made by the Cabinet in 1997. We looked at the constitutional arguments that were mentioned by Mr Forte earlier on in the discussion, we said that the constitutional issue should not be a barrier to joining, and that was a decision we made as a government in 1997. So the principle of being committed to a single currency is a well-established policy of the government, but what we've got to satisfy ourselves is that the economic tests that we have set down that refer to people's jobs, the businesses and the investment they can get into, that these tests are met - and that's what the statement on June the 9th will be absolutely, absolutely about. I am committed, and have been committed over this period of time, to the principle of joining a single currency and I think there's something of a misunderstanding about this debate because to be committed to the principle of a single currency requires us now to be absolutely sure that the economic tests can be met.

DAVID FROST: But I think it would be fair to say that the Prime Minister probably is more passionate about entering the euro and thinks it more important politically than you. I don't mean you're opposed to it, but I think he's more passionate about it, don't you?

GORDON BROWN: I think that's a misunderstanding of the position as well. My job as chancellor has always been to make sure that the economic case for this country and the economic position is fully protected. And what I've had to look at is all the different issues of jobs, investment, financial services, the flexibility of our economy, and that is specifically what the Treasury's assessment is all about. So both of us are committed to the principle of the single currency -

DAVID FROST: But you're coming at it - but you both, nothing wrong with this, but you come to it from different ...

GORDON BROWN: Not at all.


GORDON BROWN: Not at all, because we both say if the economics are right we should join, we should go ahead and have a referendum. If the economics are not right, in other words the five tests assessment is not met, then we shouldn't do so. That is the position of both of us, and I think the important thing to stress is that the economics and not some sort of dogma about this or that are paramount in this decision. We have made the decision in principle, the question is are the economics right, and the five tests assessment is so important to that, that that is the reason why it will be the centrepiece of what we say on June 9th.

DAVID FROST: But in terms of this whole situation, I mean disagreements are not obviously dishonourable in anyway. I mean obviously the two of you don't agree on everything but you have, you have united in comprise you've united this week on this issue - that was the statement on Friday night, yes?

GORDON BROWN: You know David from all your long experience of studying politics that what's written in the newspapers and the speculation and the gossip and so on, that's not the central issue. The central issue is making sure the national economic interest of our country is advanced properly. And Tony Blair and I are at one on this, if the economics are right, through the five tests assessment, we should join, if they're not right we shouldn't join. There is, of course, a wider debate taking place about Europe, partly reflected in your earlier discussion, about where Europe is going as a whole and I passionately believe that it is possible, in fact it's necessary in this country, to build a pro-European consensus. If you look at what's happened over the last 20, 30, 40 years, there have been debilitating divisions about the future of Europe. I think that now that Europe is in a new phase, that we're having to tackle the problems of globalisation, it is British values and British ideas that are going to be paramount in the development of Europe for the future - whether it's economic reform, looking outwards, better relationships with the United States of America, partners not rivals, and I believe that it is time to build the pro-European consensus in this country, around which I think large and substantial sections of the population can unite where they haven't before.

DAVID FROST: What about the story, Gordon, in the paper here today, this is the Mail on Sunday, Brown - we discussed it earlier - "Brown, I'll quit if Blair pushes euro".

GORDON BROWN: Well I think that's part of the gossip and the speculation. It's not, it's not true.

DAVID FROST: Not true.

GORDON BROWN: The only basis on which we would make a decision is not personalities or it's not speculation related to individual ambitions, it's the only basis on which I would make a decision on these matters or make a recommendation on these matters is the national economic interest and I, I think people, you know, do understand this, because it's a most important decision for Britain. We have not got our relationships with Europe right over a long period of time until recent years, I think it's very important that we recognise that if we make the mistakes of the past, then that is why the five tests are to be the best insurance policy for us and they are a guarantee that we will do things right for jobs, business investment and ...

DAVID FROST: Did you read Andrew Raunsley today Gordon, who said -

GORDON BROWN: I didn't actually ...

DAVID FROST: No, it's very difficult to read everything before the programme.

GORDON BROWN: Well I was reading quite a lot about Arsenal and ... and about Raith Rovers getting promotion.

DAVID FROST: Absolutely, with Brecon City, yes. "New Labour is a bi-polar world. Tony Blair and Gordon Brown are like the United States and the Soviet Union during the Cold War. Deterred from hot hostilities by the fear that it will all end in mutually assured destruction." Is that the reason for your pact?

GORDON BROWN: There's no pact, as such. There's nothing of that kind. There's nothing like that. The issue is what is the best way of pursuing the national economic interest. I think David, you know, that all this speculation and gossip is just the talk of the day. I believe that we will be judged by whether we get these decisions right, based on the proper assessment of the national commission.

DAVID FROST: Well of course there is this fascination, we all have it, exactly what your relationship with Tony Blair is, of course. I mean it obviously, it's a deep relationship, it's a long-term relationship, it's been a productive relationship but you wouldn't describe it as a tranquil relationship, would you?

GORDON BROWN: Well we've been in parliament together for 20 years, in fact I think in June we both celebrate this 20 years as Members of Parliament - or commemorate - perhaps other people may not feel we should be celebrating, but 20 years as Members of Parliament. And it's a long time to work together and I think most people would agree we've worked together for common aims and common objectives over a very long period of time and I hope that people will look back and say that it's been an effective partnership to achieve economic results for Britain and particularly of course in the last six years, I think we take some satisfaction in the fact that the economy is stable, we've created one and a half million jobs, we've been able to put more money into health, education and public services than at any time. So it's been a constructive working relationship.

DAVID FROST: And tranquil?

GORDON BROWN: And tranquil, yes.

DAVID FROST: Tranquil ... You're the next PM, Gordon. Exclusive Brown's pact with Blair to get his job.

GORDON BROWN: I'm happy -

DAVID FROST: You've read those stories before but this is a new one, because this is not from six years in, this is two years into the next one.

GORDON BROWN: David, I would never make some sort of private arrangement when the national economic interest is at stake. This is about the national economic interest, I think these stories should be consigned to the speculation that they are. The issue, for me, is whether we can get the long term, even short term considerations as were being raised about economics by your previous speakers, about what's happened to the German economy or what's happening to inward investment in any one year. These are not the central issues, they're important, but the central issue is how you gauge and assess the long term national economic interest for Britain.

DAVID FROST: But I mean have you, have you, when was the last time you talked about the succession to Tony, to Tony Blair?

GORDON BROWN: I don't think we've talked about anything other than economic, social and of course Iraqi issues over the last few months. In fact we had a very close working relationship over Iraq, I think I was on your programme talking about these a few weeks ago -

DAVID FROST: Yes you were.

GORDON BROWN: - I talked to Tony Blair yesterday about some of the economic questions that we're facing, I've just come back from a G7 summit about international development, amongst other things that I was talking to him about that and other issues and I'll be talking to him and in fact meeting him later today to talk about some of these, these economic questions.

DAVID FROST: Well we'll just grab the news from Moira and then we'll come back again.


DAVID FROST: I gather there are various reports today that in fact Clare Short told you she was resigning on the Sunday before the Monday when she told the PM. Did she tell you first?

GORDON BROWN: Well I didn't know exactly what she was finally going to decide but I said to her that she should stay in the government. She worked very well on international development, and so too will Valerie Amos, whom you've had on the programme this morning, talking about the same objectives that are being pursued over the next few years and how we can, particularly in relation to Africa, do more.

DAVID FROST: Very good. But as it was, on the Sunday you thought she still might stay?

GORDON BROWN: Well I always thought that was a possibility.

DAVID FROST: Thank you very much for being with us. Congratulations again on Raith Rovers and it's a joy to have you with us.


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