Murnaghan 17.03.13 Interview with William Hague, Foreign Secretary
PLEASE ATTRIBUTE ANY QUOTES USED TO MURNAGHAN, SKY NEWS
DERMOT MURNAGHAN: Well, let’s say a very good morning then to the Foreign Secretary. William Hague joins me now from North Yorkshire. Mr Hague, first of all, this strange situation in Cyprus. Can you just underline this for us, this government guarantee to British citizens potentially affected by this levy, that they will be compensated in full by the British government?
WILLIAM HAGUE: They will be compensated. The people who are serving in our military or people who work for the British government that have been posted to Cyprus, we will compensate for them. We’re working on the details of that this weekend so we’ll be able to make further announcements during the week about that but we’ve taken that decision in principle. It’s a very difficult situation in Cyprus, as everyone can see, and it’s a lesson in a way, to everyone who says that this country can just take on more debt rather than paying down our debts. Well, this is what happens if a country can’t pay its way and Cyprus is in a position at the moment where it can’t pay its way. It can’t borrow money on the international markets. This is what can happen if you don’t put that right.
DM: But just on that issue of compensation. I mean, the estimates as you say, working on the figures of what the estimates are; it could be over £100 million, in which case it’s the British government through the British taxpayer which would be subsidising Cyprus.
WH: Well, no. One of the other important things about this is that the UK no longer has to pay into Eurozone bailouts, so we are not putting money directly into the banks. That’s because David Cameron negotiated a change in what the last Labour government left us liable for.
DM: No, but I mean, it’s a backdoor way, isn’t it?
WH: What you’re asking about is the compensation that we’re going to get.
DM: If the Cypriot government take the money from British citizens living there and we give them the money back, that’s a roundabout way of the British exchequer putting money into the bank bailout...
WH: I don’t think the amount of money would be anything comparable to the UK taking part in the whole bank bailout. What you’re looking at here, as I understand it, is five or six billion Euros coming from the banking system, from bank deposits. Then there’s another ten billion Euros that comes from Eurozone countries bailing out Cyprus, and the UK is not part of that. So we have separated Britain from having to take part in those bailouts. However, of course, where people have no choice but to be in Cyprus, that is the case. There are military serving in the sovereign base areas where they have no choice but to be there. We do need to look after those people. I think people would understand that but the expenditure involved which of course, we don’t know immediately what that expenditure would be, but it would be nothing comparable to taking part in the bank bailout as a whole.
DM: But does the British government have a view on the wisdom of following this course of action. Presumably, if there is still a vote to come on it, you’d rather it didn’t happen in the first place.
WH: Well, Cyprus faces a really difficult choice and President Anastasiades, the new president is, all credit to him actually, for confronting this quickly. This has been hanging over Cyprus for a long time. He is saying to the people of Cyprus that either they have to do this or the alternative is the collapse of their banking system and an exit from the Eurozone with all the unknown implications for the Cypriot economy. Now, that’s for them to decide about in Cyprus, of course. They will have a parliamentary vote on this which I think this morning, as I understand it, has been moved to tomorrow, so it being a public holiday in Cyprus tomorrow, So they will have to resolve that but they face unpalatable choices and any country that doesn’t pay down its debts, reduce its deficits and confront the economic problems we all face would end up in this situation. It’s something people should remember before the budget this week, that I know you have also been discussing on your programme.
DM: Indeed, and we will in a moment or two more, but you seem to be saying given their circumstances, it’s not perhaps an unwise thing to do, But doesn’t it risk reigniting the whole Eurozone crisis? If you’re an ordinary citizen waking up in Italy or Spain today in particular, aren’t you going to listen to this and say, “Well, it’s happened in Cyprus, it could happen here. Come Monday morning first thing, I’m going down the bank and I’m taking my money out”?
WH: Well, this is a decision, as I said, for the Eurozone to take that decision on what’s best for stability in the Eurozone and then for Cyprus, for the parliament of Cyprus to decide whether it’s happy with these terms. This is not a British decision about the form of this bailout so I can’t express a view on every detail of it, we’re not part of the decision about this. But clearly, people in Italy, Spain and all countries across Europe will want to know that their governments are doing what they need to do now to make sure their banking systems are healthy, to make sure that their governments are not borrowing too much that it becomes unsustainable in the future; to make sure the banking system doesn’t grow excessively compared to the rest of the national economy. Yes, people across Europe should be taking a close interest in whether their governments are doing that. In this country, we are doing those things and it’s painful, it’s difficult but that’s what the Chancellor has been achieving.
DM: Okay, talking about Europe’s role in that. Talk to me about Europe’s role in Syria and in particular, Britain and France. The issue of potentially arming the rebels there: arming some of the opposition groups fighting President Assad. Now, Laurent Fabius, your counterpart in France, said the other day, rather intriguingly when asked about this, whether he would act alone or with the UK, that France is a sovereign nation. Can we read into that that France and perhaps the UK are considering acting without perhaps other EU members to arm the rebels?
WH: Well, we could do that. We could lift the arms embargo without the rest of the European Union. If we decided that in May, we’ve now agreed; we agreed at the end of February a three month extension of the sanctions in Syria with an important amendment to the arms embargo that I and the French foreign minister pressed for. And that now allows us to send more assistance but not lethal assistance to the Syrian opposition. Yes, we could as the Prime Minister has made clear, end the EU sanctions regime and pursue our own policies. Now, we would of course, be reluctant to do that but we’ll do that if necessary, if we think it is necessary. I stress we’ve taken no decision at the moment to send arms to anybody in Syria or what we will do at the end of May when the current sanctions regime comes to an end. But we are clear with France that we need to keep doing more, that this situation is deteriorating rapidly. We now have 1.1 million nearly refugees, tens of thousands of people dead, other countries being destabilised. Without a diplomatic and political breakthrough and we’re working on that all of the time, we will have to do more to try to change the calculations of the Assad regime. So as things stand today, there is going to be a strong case as we come towards the end of May, for the lifting of the arms embargo on the national coalition, the opposition or some very serious amendment to the EU arms embargo that allows us to send them more assistance.
DM: And finally, what is your assessment of the risk if that were done? The risk of some of those armaments ending up in Jihadist hands?
WH: Well, if we did that, it would have to be very controlled, of course, in terms of what we would actually send and how we would monitor what was sent, and the guarantees that would be needed from the people they were sent to. And I stress we haven’t taken that decision. The Prime Minister made clear at his news conference on Friday in Brussels that we haven’t taken that decision but if any country was to go down that road then of course, we would have to have those sorts of controls and have regard to that. Because there are risks, of course, this is why we haven’t so far sent lethal equipment to the opposition. There are risks attached to that but if this goes on; if this crisis goes on worsening in the way that it is over the coming weeks and months, there are even greater risks that have to be weighed against that. The risks of international terrorism and extremism taking root in Syria; the risks of Lebanon, Iraq, Jordan being destabilised and the risks of extreme humanitarian distress. We are looking here at what is turning into the biggest humanitarian catastrophe of recent years and we cannot just allow that to happen. So as ever in foreign policy, you have to weigh some risks against other risks.
DM: Okay, lastly, Foreign Secretary, can I just turn to domestic issues. Of course, the budget coming up on Wednesday. What kind of message and tone do you think the Chancellor has to strike here? Let me read you a quotation from Lord Ashcroft. I’m sure you’ve seen it in the papers today; a big supporter of the Conservatives saying, ‘Mr Cameron,’ and by implication, Mr Osborne as well, ‘seems indifferent to the things that keep people awake at night.’ The tone has to be right here, doesn’t it?
WH: Well, of course, yes, and I think by the way, you’re quoting… I think that’s a quote of other peoples’ opinions in a survey. Of course the tone has to be right but I think the chancellor does get that tone right. He’s been speaking, as you know, this morning and I think he very much has the tone right that this country has to deal with its deficit and we’ve been discussing a good example of why that’s the case. That we have to help businesses to compete in Britain. He’s brought down already in previous budgets, the corporation tax rate has come down from 28 to 24 and it’s coming down to 21 next year. And he wants to help hard working people who want to get on in life. He’s already announced in previous budgets lifting people out of income tax at the bottom end altogether. Two million people will be coming out of income tax altogether. Council tax has been held down for three years in a row. Petrol duty is 10p a litre less than it would have been in Labour’s plans. So I think the chancellor has been helping people in a very difficult situation. I have no doubt he will want to continue to do so but there are no easy options here.
DM: Yeah, and as you know, there is quite a lot of discussion about the Prime Minister’s position and indeed, that of the chancellor and we know when it comes to Lederer, you’ve been asked, you’ve been there, done that and worn the T-shirt; you’re not going to go there again. What about; do you ever fancy a crack at delivering a budget yourself, being chancellor?
WH: No. We’re absolutely clear about all that, all of us in the government. As I have often made clear, I came back into frontline politics to help David Cameron and to do foreign affairs which is what David Cameron has always wanted me to do. So I’m very clear about that. I get on with my job and the chancellor will get on with doing the excellent job in difficult circumstances, that he has to do.
DM: And at that very point, the lights go out. Thank you very much indeed,. Foreign Secretary…
WH: The lights have gone out.
DM: Foreign Secretary there, William Hague. Thank you for that.
WH: Thank you.
