ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now then, ahead of the 1997 election, the Labour government in waiting, and it was that, made a concerted effort to court big business, it was known as the ‘Prawn Cocktail Offensive’ and it was pretty successful.  This time though things are much more complicated for Labour.   Ed Miliband has taken on, amongst other things, the big energy companies, the banking industry and the press so should big business fear a Miliband government?  I am joined now by Stuart Rose, Lord Rose, who has run a number of high street chains including the mighty Marks and Spencer of course, he is now a Conservative peer and by the Labour peer, Lord Levy, Michael Levy, who began his career in the music business before becoming a fund raiser for Tony Blair and has had a prawn cocktail or two in his time I would suspect, a very good morning to you both.  I want to start with you Stuart Rose, I mean this issue, we have just had Ed Balls the Shadow Chancellor in here, you have signed letters and been the face of letters, if I can term it that way, saying there is a lot to fear from Labour in power.  Why are you fearful of a Labour government?

LORD ROSE: Listen, I was struck by Ed’s interview just now, it’s not what he said, it’s what he didn’t say.  He didn’t give you a clear question on Corporation Tax, he didn’t give you a clear answer on VAT, so business doesn’t like uncertainty, business wants certainty and my case is very simple, that we have had a very difficult time and we could argue for the rest of our lives about how that came about but having repaired some of the damage we need now to be able to move forward to better times and that’s a very critical place.

DM: Well let’s go back to 1997 Lord Levy and the prawn cocktail events or whatever it was, the fact is that businesses, Stuart Rose no doubt was – where were you in 1997?

LORD ROSE: I was at the Burton Group.  

DM: And I’m sure you welcomed Tony Blair and Gordon Brown, you did a lot of groundwork there and you allayed fears about a Labour government.  

LORD LEVY: We’d better put one thing right, I don’t touch prawn cocktail, Dermot, I keep a kosher diet so I must put that right!

DM: As long as they are kosher prawns, all right!

LORD LEVY: But let’s talk about what Stuart just said, uncertainty.  I mean there has never been such uncertainty if the Tories get back into power.  An EU referendum within two years?  This is literally sucking up to UKIP.  I mean business, read what the boss of Tesco, he’s not political but he has said this morning how dangerous this is for  business, this is the biggest danger that we have facing business, facing our country.  Two years of uncertainty leading to a defined, definitive EU referendum, this is what they are saying in their policy.  Where are people going to turn?  Do we want to be isolated within Europe and in the world?  I totally disagree with Stuart on this.  We are coming into a period of real uncertainty if the Tories win.  As far as I’m concerned Miliband does believe in wealth creation, he believes in a fair society, a society that is not for the few but is for all of us.  

DM: Well there are two things there, we have to separate out the EU referendum, that is a cause of uncertainty and we do know, as Lord Levy is saying there, we do know about business concerns about that, we could be on the exit route for the EU.

LORD ROSE: Listen, personally I am pro-the EU but at the end of the day I think it is perfectly reasonable if you join a club 25 years or so ago when there were nine members, to say listen, 25 years later there are now three times as many members and we’d like to have a conversation about whether the same rules apply.   

DM: But on that specific issue about uncertainty?  Years of renegotiations, of some kind of campaign, some cabinet ministers voting for it, some again it.  

LORD ROSE: Let’s be clear, Dermot, the real issue that will decide whether people … I see that John Allen I think said this morning that  he was worried about the domicile of some companies if there was an uncertainty about the EU. The reason that people want to come to this country is because we have a flexible workforce, because we have stability, because we’ve got a growing economy, because we’ve got strong IPR, because this is a place to do business.  I think it’s ridiculous to suggest that everybody is going to suddenly go offshore, I don’t believe that for one moment and to make sure that that doesn’t happen we have to ensure that we continue to have the right environment, an environment which is invested in, i.e. let’s invest in infrastructure.  To make sure that we’ve got the right tax regime, to make sure that corporation tax is attractive to people who invest here.  To make sure that we invest in the right number of people so that we’ve got these apprenticeships, we’ve got these people who are fit and ready to come into the workforce, that will dictate whether people want to have their businesses domiciled here so I think this is all a red herring and it is just scaremongering.  

DM: Okay, and in terms of the uncertainty, leaving out the EU referendum Lord Levy, we have got this issue about what would Labour do when it comes to tax and domicile on the bigger companies in the interest of fairness.

LORD LEVY: Well I think that they will have a corporation tax policy that will be fair, Ed Balls has just stated that.  They’re not going to change the rate of VAT, that has already been said but they are going to try and look after the country as a whole.  The last five years, salaries in real terms have been the worst ever in our society.  Is that right?  I don't think so.  This is also about under-employment, where people want more hours, they want to earn more money and they are not able to do so.  This is not about beating up big business, everyone understands there has to be the right relationship between wealth creation, business and those earning the wage and that’s what Labour wants to do and I think that’s absolutely right.  

DM: And it is a message that resonates throughout the nation, Stuart Rose.  I mean do big businesses not get it, you’ve got to pay at least the minimum wage and of course they are legally obliged to do so, but what about a living wage, what about these zero hours contracts and what about the pay of the chief executives and the board?  Do they not hear the message loud and clear?

LORD ROSE: Let’s be clear, everybody knows that I am a free market economist and I believe in the creation of wealth.  Now we can have a completely different debate about the fair distribution of that wealth but unless you create some wealth first you can’t distribute it.  Let’s just look at the facts this morning, I didn’t see that until I came in here this morning, that there has been an EYI report that has come out this morning saying there is a 20 year high in terms of the amount of disposable income coming into people’s pockets.  That has only come about because they have been through the pain for the last four or five years …

DM: Well a lot of it has come about through the collapse of the oil price and cheaper petrol, people are getting an instant hit in their pockets.  

LORD ROSE: Fine but don’t knock it if it’s there but at the day it will provide therefore a stable environment for people to be able to move forward.  You mentioned zero hours contracts, zero hours contracts sure there are some people who on zero hours contracts who would prefer to be on permanent contracts but I can actually find you people who are on zero hours contracts who are quite happy to be on zero hours contracts.  What you want to do is you want to take out the rogue element, you want to take out the uncertainty for people but at the end of the day if we hadn’t had the flexibility in the workforce that we have had for the last four or five years, compare and contrast that with Europe, we would not be in the better position that we are in today.

DM: What about the top level though?  Isn’t it the truth that these chief execs and others are taking it personally as well because a lot of them will be affected by the mansion tax and they are all going to be affected by the reintroduction of the 50p rate?

LORD ROSE: Well let’s just talk about the mansion tax.  I was at a dinner last night in the suburbs with somebody that I’ve known very well for 35 years,  a retired professional doctor, a retired professional doctor retired on a fair pension, happens to have invested in his house 30 years ago.  The house is now worth a substantial amount of money, how is that person going to actually deliver the extra two or three thousand pounds that he is going to have to deliver out of his pocket and is that fair?  

DM: Okay, is that fair?  Has Labour overall got the tone right, Lord Levy, when it comes to business?  

LORD LEVY: The tone I think has perhaps been somewhat exaggerated but they stand for wealth creation and a fair society and I think that’s right.  In terms of mansion tax, I’ve said it already, I hate the description but the tax is a fair tax and dealing with Stuart’s point, they are already building in to the legislation to deal with this retired doctor, how that would be handled, so it would not be punitive on them, they will not be hit, it will be spread over a period of time so when they have this wealth they have created so the estate will [over talking] and that’s a very, very different situation.  

LORD ROSE: I’ll tell you what it will  do, Michael, it will create a huge bureaucracy, a lot of chaos, a lot of uncertainty and a lot of unfairness.  

DM: Okay, you can discuss it later.  Lords both, Levy and Rose, thank you both very much indeed for discussing that.