Murnaghan Interview with John Longworth, former Director of the British Chambers of Commerce, 3.04.16
ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS
DERMOT MURNAGHAN: Let’s take a look through some of the business pages in today’s newspapers and I’m joined by a man who has been described as the first Brexit martyr, John Longworth, who was the Director of the British Chambers of Commerce until last month and he is backing Vote Leave. We can talk about your defenestration a little bit later on if you can call it that and on the other side of the argument is Sir Martin Sorrell, the founder and chief executive of the advertising giant WPP, Sir Martin supports of course remaining within the European Union and if that comes up during the course of our discussions – I wonder if it will? Yes it will and indeed perhaps in the first story we are going to cover. John, bring this to us, this is the row, the huge row not just about Port Talbot and its steelworks but state intervention and the whole attitude to steel.
JOHN LONGWORTH: Yes, there’s the whole steel thing and this is an article on state aid. It seems to me that the papers have sort of missed one of the central points of this issue. I am a free marketeer by instinct, if this were happening within the UK there would be abuse of market power issues, there’d be distortion of the market, there would be a failed market here but because it’s taking place on a global scale we ignore the fact that actually the market is not actually …
DM: So if this was an internal UK industry in which one party was under-pricing to grow its market share or whatever, the competition authorities would move in?
JOHN LONGWORTH: Exactly or in fact have a 50% share, like the Chinese do, of the global market and then use that market power to force their product on other people, they would actually be prosecuted for it.
DM: But people would respond to you instantly and say the body to take them on is a big large entity, that’s the European Union and …
DM: Are you saying you can’t resist globalisation?
JOHN LONGWORTH: But it’s not resisting globalisation … hold on, hold on. The truth of the matter is that many of the things the UK government could do to actually ameliorate the situation are barred by the European Union. The fact that the Germans, the Italians and the French put in long term cheap loans into their industries, we are prevented from doing it because … We are prevented from doing it.
DM: Are you saying they’re cheating?
JOHN LONGWORTH: No, no, it’s an accident of history. They set up their state backed business banks before the European Union was formed, so they were able to do it and the Treasury and the BIS department have maintained over the years – and I’ve raised this many times – that we cannot do it for state aid reasons. We can’t for example procure steel preferentially for HS2, for Cross Rail and so on because of state aid rules so the EU is the biggest bar to the solutions to this issue.
[All talking at the same time]
DM: Moving on to the state aid story in the Mail.
JOHN LONGWORTH: The truth of the matter is of course that I object to governments pinching my tax money for vanity projects overseas. The fact that I’ve not volunteered, I give to charity, why should I allow the government to give to charity on its own behalf using my money without my say? The truth of the matter is this is not used for the UK to help UK people, UK workers, this is being wasted overseas. I know, you know as well as I do that government … hold on, let me finish Martin. We should use aid money to invest, other countries use aid for trade and the fact that the matter is though that if you set a target in government to say you’ve got to spend 0.7% of our national budget on aid, the government departments will rush to spend it. Look around London now, all the streets are dug up because they are trying to spend the roads money by the end of March, that is true. The truth of the matter is that’s how governments actually work. That’s how government works.
DM: John, that is a point there, that corporate entities are sitting on so many huge reserves.
JOHN LONGWORTH: Martin is absolutely right, he is absolutely right that corporates are very short term and very narrowly focused, quarterly reporting, twice yearly dividends, end of year executive bonuses, big fat bonuses. What they don’t do is think about the medium to long term which is why they are not thinking …
MARTIN SORRELL: Which is why it’s a good idea to stay in the EU.
JOHN LONGWORTH: A lot of corporates actually get rewarded for non-performance.
DM: John, let’s move it slightly into the political world and this article in the Sunday Times written by my colleague Adam Boulton, he writes that our politicians lack confidence and conviction. Why is he saying that?
JOHN LONGWORTH: How kind am I to Adam? But it is a really great article and I have to say I’ve spent the last five years interacting with our political class, I’ve spent the last 30 years in business doing the same thing and I have to say they are political pygmies in comparison with past politicians. The fact of the matter is they haven’t got confidence in the UK and they are not prepared to lead our country out of the EU and make a better future. I always believed that if Thatcher or Blair had come along before we actually joined the European Union we would never have done it. The fact is, it was a failed political class looking for…
DM: So you are saying David Cameron is a pygmy? You mentioned Thatcher and Blair, so the current prime minister is a political pygmy?
JOHN LONGWORTH: The current political class are political pygmies by comparison with the past politicians. We’ve got great things going for this country as Adam Boulton points out and they have not got the confidence. The reason is of course because they have been turned into a town council, they are just a town council of the European Union.
DM: And also very reliant on focus groups.
JOHN LONGWORTH: What I said [when I resigned] was I had long held the view that the best place for the UK to be was within a reformed European Union but it was very clear to me that the European Union was incapable of reform and actually Cameron’s negotiations, which were not about European reform at all, they were about the relationship with Europe, had completely failed. So the truth is we have a completely unreformed Europe and a failed negotiation about our relationship. Our future is out of the European Union. We haven’t reformed from within for the last 30 years.
[All talking at the same time]
DM: The YouGov poll out today say that young people want to stay in by quite a large majority but the other of the coin – and that’s why you don’t want them to vote …
JOHN LONGWORTH: I want young people to vote because it’s their future. Martin just said we have a massive trade deficit, in fact an unsustainable trade deficit. That trade deficit has been created while we’ve been in the EU and it’s is mainly because we have a massive trade deficit with the European Union.
MARTIN SORRELL: Stand by John if we come out, just stand by.
JOHN LONGWORTH: It will be fantastic. We have a great trade surplus and …
[All talking at the same time]
DM: If we didn’t have that trade with the European Union how would we replace it?
JOHN LONGWORTH: It’s companies and people that trade, not governments. They just get in the way. The truth is, we have been trading with the United States, with whom we have no trade deal and we’ve got twice the trade [inaudible] than we do with Europe.
MARTIN SORRELL: Listen to your own members.
JOHN LONGWORTH: They’re telling me that they want to leave the EU. Half of businesses in the UK want to leave the EU. Half of them. In our own polls, of those businesses that make up the vast majority of the UK economy, half of them want to leave.
DM: Finished! Martin Sorrell, John Longworth, thank you very much indeed. And I asked if the EU would come up in our discussions!
