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DERMOT MURNAGHAN: The Chinese Prime Minister will be town this week meeting the Prime Minister, David Cameron and after some diplomatic wrangling, the Queen.  The British government has been courting China’s trade of course but what do we actually have to offer the East?  Let’s speak now to Lord Prescott, the former Deputy Prime Minister and he was also chair of the government’s China Taskforce and is now Vice President of Globe International.  A very good morning to you Lord Prescott, when we posed the question before the break ‘Does Britain still matter to China?’, does it matter if we stop talking about the Dalai Lama and human rights? 

LORD PRESCOTT: Yes, I think you’ve put a finger on one of the points that made the change.  At the China Taskforce the relations improved after we passed over Hong Kong, it was tremendous, the Taskforce moved in every area – education, technology, culture.  Then in came the Prime Minister who first of all put a junior minister in charge of the Taskforce therefore reducing its importance and a signal given to China, followed by the disastrous meeting with the Dalai Lama which obviously got the Chinese very upset even though the Dalai Lama met the Germans and the French, we made it very political and seemed to recognise his case.  So it deteriorated then with no visas for ministers, no visiting and we’ve got a real situation, a problem of relations with China.  

DM: It also is a problem, is it not, when you talk to particularly Chinese businesses, the issue of still being in the European Union?  China firmly wants the UK, if these companies are to invest in this country, to be part of the European Union.   

LORD PRESCOTT: Yes and this discussion will have come up with Cameron when he visited China because when he went there he was asking for investment in Britain and ended up having state investment from the Chinese in our nuclear industry and now they are invited to come to Britain.  They’re going to say to him what is the position of the European market?  Both the Japanese and the Chinese take the view that investment in Britain is good only after you have the access to the European Market of 450 million people.  He seems to be saying now we want to get out of it, every day he says something like that.  That’s going to make investors say to themselves, am I going to put a long term investment in a country that is probably going to leave Europe?  That is a major question that businessmen will certainly be putting to him.  

DM: So what about the next Labour government, you hope, there are straws in the wind that Labour might change it position and offer and in/out referendum. 

LORD PRESCOTT: Well Ed’s made his position clear on that about the referendum, he didn’t want to have a whole business being subjected to delay on investment until 2017, that was the real problem with the Tory’s proposal.  If there were constitutional changes he will do that but I do believe myself, since you’re asking me, that fundamental changes have to take place. I fought for the referendum in 1997 – no, certainly in the 80s, and we lost that referendum and I didn’t want to support it because I thought it was a step towards federal Europe.  That has happened and so fundamental changes are necessary whether it’s on the finance side or free movement of labour.  Free movement of labour and capital has caused major problems but the political advance by the Brussels people and pro-market is heading us further into greater disaster.  

DM: I think it was 1975 Lord Prescott actually the referendum, how time flies!  

LORD PRESCOTT: Yes, that shows you how old I’m getting that I was about in 1975!  

DM: Aren’t we all!  To get back to China … 

LORD PRESCOTT: Can I just say that I supported the referendum because I thought it would take Britain out of it but in fact what happened was the people voted to stay in because of the uncertainty.  It’s my view that if you had another referendum the people would still vote to stay in. 

DM: Okay and back to China, lastly on this, is Britain now in a position given what’s gone on in the past in terms of trade relations, that issue that you picked up on with the Dalai Lama, where we now clearly, the UK clearly needs China way, way more than they need us?  We’re cap in hand.  

LORD PRESCOTT: Absolutely yes, because the economy is desperately short of any investment.  The private sector is not able to produce the investment that’s necessary to get real economic growth so in desperation he’s been forced to turn to China and say come and give me the investment I can’t get in my country in order to be able to develop the economy, relying on housing we’re beginning to see and Help to Buy is already causing a crisis and we’re back on to boom and bust.  So it needs real private investment, in this case state investment from China, to get real investment and growth in the British economy.  

DM: Now we can’t have you on without getting some reaction to what Tony Blair has been saying this morning on this programme.  You were hand in glove with him, deputy Prime Minister in 2003 as you took this country to war alongside George Bush in Iraq.  Tony Blair is now saying that still was the right decision, nothing would be very different if Saddam had not gone despite the lack of weapons of mass destruction, despite the fact that Al Qaeda were not established in Iraq in 2003, do you agree with Tony Blair? 

LORD PRESCOTT: No I don’t but the Chilcott Inquiry, I told them that when Tony Blair and I were arguing about the Americans and the British in Iraq we were convinced and Tony constantly said it was not about regime change. I went over to America, talked to Vice President Cheney and others and said to Tony it does look to me even though you are saying it’s the UN that this is basically about regime change.  His latest statement seems to confirm that, he says he is disappointed with what has happened in Iraq, it wasn’t as he thought it might happen but he wants to invade somewhere else now.  It is intervention and he said in his interview that I watched this morning, he was saying we do it where there isn’t open economy, open society – what he means is Western democracy.  I said to him at the time there is a great danger when you want to go and do these regime changes, you’re back to what was called a crusade and I said actually put on a white sheet and a red cross and we’re back to the Crusades.  It’s all about religion in these countries, it’s gone on for a thousand years and then when they say, ah we’re not going to send troops in.  Why?  We won’t send troops in because the public won’t accept it.  So they’re into drones now, sitting in a little room thousands of miles away and letting loose these drones on civilians and troops.  That is not a way for Britain to go in the name of open society, hardly democratic either so I don’t agree with Tony, as I didn’t then.   

DM: Let me ask you about that red cross and white sheet in a non-violent way, referring to the World Cup.  Would you have posed, Lord Prescott, with a copy of the Sun newspaper last week supporting the England team in Brazil?   

LORD PRESCOTT: Would I have done that?  No.   

DM: Why not? 

LORD PRESCOTT: Well particularly at a sensitive time at the moment, just on Liverpool at this time an inquiry into the terrible circumstances of the deaths of those supporters, we’ve got the inquiry, the criminal case probably now going on against Murdoch and the role of the Sun in the past who I don’t trust quite frankly.  All papers have political positions, the Sun’s quite clear is Tory, the Mirror is Labour and I would not have done it with the Sun but that’s my decision, leaders have to make difficult ones and Ed’s had to make this one but you asked me if I’d do it and I said no.   

DM: But it’s now being spun, is it being spun that Ed Miliband was badly advised.  As you say, he is a very, very bright guy, we all know that, he makes his own decisions so he was wrong in your book to do it.   

LORD PRESCOTT: Well I wouldn’t do it, right, but a leader has to make a judgment about many things.  His judgement was on balance to do what he did.  No doubt advisors give advice but you can’t keep blaming advisors though I think you could make a case for it.  At the end of the day the leader must make a judgement and he’ll be judged on his judgments.  I wouldn’t have done it. 

DM: Okay, great to talk to you, thank you very much indeed Lord Prescott there, live from Hull for us.