ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Well now, leaving the European Union would be a jump into a void for the UK.  Those are the words of a new group of Conservative MPs fighting to stay within the European Union.  Now it comes as a poll this morning has given the out campaign a six point lead, the highest it’s been since the general election.  Well I’m joined now by the former Chancellor, he is of course Lord Lawson, now President of the Eurosceptic group Conservatives for Britain.  So you have got to counter that argument, good morning Lord Lawson.  A leap into the void?  

LORD LAWSON: It’s an extraordinary expression because of course it’s not a voice, it’s a place called the world and we know the world quite well, it’s not outer space and we do an enormous amount of business all over the world.  We trade with the world, we invest, they invest in us, we have all manner of links and indeed because the European market is suddenly something of a disaster zone at the moment, our trade with the rest of the world is growing faster.  

DM: But we still do the majority of our trade with the European Union.  

LORD LAWSON: No, it’s not the majority but it is a lot.  It only accounts for about 15% of our total economy because of course a lot of our economy is trade within our own country.  We would carry on … I don't know if you ever have time in your busy life to go shopping but if you do you will find goods on the shelves from all over the world.  You don’t have to be within the European Union to trade with the European Union, that is a complete nonsense so really the question is, would we do better outside and I have no doubt that we would, quite apart from the fact that it is primarily a political project, it is not an economic project, that is one of the reasons why it is no good.  It’s a political project and a perfectly legitimate one but one whose objective we don’t share.  

DM: Well I’ve got to throw this at you, as a poacher turned gamekeeper, as Chancellor you shadowed the deutschemark in preparation for trying to join the forerunner of the euro, the Exchange Rate Mechanism.  You’ve changed your view because then presumably you thought it was primarily an economic organisation.

LORD LAWSON: No, I didn’t and I had written that it was a political organisation but the difference is that when I was shadowing the deutschemark, I think this is a little bit old hat but when I was shadowing the deutschemark it was a matter of keeping our own currency.  What has happened now is that there is a monetary union, a currency union, a eurozone and this has changed the dynamics totally.

DM: Is there anything that the Prime Minister could bring back from Brussels that would change you and your supporters minds?  A lot of progress is being made, Jean-Paul Junker is saying we think a deal can be done, that perhaps Britain could become – this is further in the rumour mill, that Britain could become some kind of second tier member of the European Union and keep those economic links?

LORD LAWSON: I have read very carefully what David Cameron has asked for in his letter to President Tusk of the European Union and in my judgement, even if he gets 100% of what he asks for, and he is unlikely to get more than 100% but we shall see, even if he gets 100% of what he asks for it is inconsequential.  Just as in 1975 Harold Wilson came back and conned the people of this country into believing he’d secured a fundamental reform when of course he hadn’t.

DM: So you are drawing parallels with the plan you think Mr Cameron has, to come back and pump up, inflate what he’s got?

LORD LAWSON: I suspect that may be the case, yes.  I don't think the British people will be so keep to be conned a second time.

DM: Okay, what do you think also about the nature of the campaign?  He has said that once a deal, whatever shape that takes, is done – technically the Prime Minister says he could still vote against it but that looks pretty unlikely.  Within his own cabinet, his own ministers will then be free to campaign according to their conscience but up to this point we are talking to people like you, not cabinet members who have doubts about membership of the European Union, because they are not allowed to speak out yet.

LORD LAWSON: But they are going to be able to speak out and they will speak out and that’s good and that’s healthy.  It is also very important because whatever the result of the referendum and in my judgement it is likely to be pretty close either way, whatever the result of the referendum the Conservative party will need to come together again and carry on governing on a whole range of issues on which is it is completely united and on which it is necessary for the British people that it should continue to govern once this is over so David Cameron was very sensible to allow Members of Cabinet to do their own thing, campaign the way they feel is right and I believe that it is clear in my mind what is right.  Also I think the British people are concerned that the European Union is such a profoundly undemocratic institution.  We in this country have an addiction to democracy and we like to feel that we have self-government and that is what the immigration issue is about, whether we have control of our own border.

DM: Just on the addiction to democracy and long may it last, it is all about fairness really and on the issue of fairness, just on what the Prime Minister has allowed, hasn’t he given the euro supporters, the Europhiles, a head start?  They are allowed to campaign, they are allowed to speak out, we’re just about to speak to one of them next.

LORD LAWSON: Yes, I think … well I think that perhaps he has but there are so many bigger issues at stake that I don’t want to start arguing about that.  It is fundamental, it is the future of our country which is at stake and I have no doubt whatever that politically and economically, on both fronts, we would do far better outside it.  We are a big country, we are the fifth biggest economy in the world, we have a lot of clout and the idea that we are somehow like Norway or somebody like that is ludicrous.  Anyone who understands an ounce of realpolitik knows that we could do very, very well outside.

DM: But let me just ask you about the leadership of your campaign, you feel it’s important as we’ve been discussing here, that the discussion, the argument, the debate is couched, framed mainly by the economy and you have said in the past that you don’t want the xenophobes to be seen to be leading the campaign.  

LORD LAWSON: No, I think when it comes to campaign, it will be led probably by both a member of the present cabinet and also by some very experienced senior businessmen who know that we would prosper more outside the European Union.  

DM: Any names for that member of the cabinet?

LORD LAWSON: You will find out in due course.  

DM: And what about UKIP, you don’t want Nigel Farage involved then?  

LORD LAWSON: No, he is doing his own thing, UKIP are doing their own thing but they have a different perspective from the perspective that we have and the big issue is who will be designated by the Electoral Commission as the Leave campaign group and I have no doubt it’ll be us.    

DM: But could UKIP give it that xenophobic tinge?

LORD LAWSON: Look, this is a free country.  He is entitled to do his own thing.  I disagree with a lot of what he says but as I say, this is a free country and long may it remain so.  

DM: Great to see you, Lord Lawson, thank you very much indeed for your time.