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DERMOT MURNAGHAN: Now around the world financial markets are struggling as we’ve been discussing with the price of oil and commodities slumping, the spectre of 2008s economic crisis is looming pretty large with concerns particularly about the Chinese economy and it could be in deep trouble. Well eight years on from that last financial earthquake, just how well placed would Britain be to endure another shock?  I am joined now by the Shadow Chief Secretary to the Treasury, Seema Malhotra, a very good morning to you.  Well Labour was in power during the course of the last crisis and look what had to be done there, is Britain in any kind of better shape now than it was then in your assessment to deal with any economic shock?

SEEMA MALHOTRA: Well I think it’s difficult to say we are in much better shape when you look at some of the indicators now of rising household debt and really the fact that George Osborne has failed to deal with some of the fundamentals.  He has failed to deal with investment, to improve productivity, he inherited an economy that was growing in 2010 and what we saw was a slow-down after that so we’re very concerned that he is not doing what is needed to ensure that Britain is best placed to withstand a future shock.

DM: So you would throw that back at him then would you, his oft quoted phrase of fixing the roof while the sun is shining, you don’t think he’s done that?

SEEMA MALHOTRA: Well you don’t even need to ask me that question, if you look at the respected commentator Tim Montgomerie, who himself is a Conservative, he has made that very claim.  If you look at what Larry Elliot and John Longworth have been saying, John Longworth who is head of the British Chambers of Commerce, again a very respected business voice, they don’t say these things lightly.  What they are saying is we had a Chancellor, and we still do, with the opportunity to do the right thing – to invest in infrastructure, to invest in our skills, to make sure that we are best placed to see the growth that Britain could be leading and instead what we see is his rollback on that for political reasons and not in the interest of the economy.

DM: But there’s a specific question about battening down the hatches and this is of course the banks.  We saw what a role they played in the last crisis and how much money it cost to bail them out, I was talking to the former Business Secretary Vince Cable and he was saying of course when he was in power in the coalition he was trying to do more to make sure that that couldn’t happen again, that no bank did become too big to fail but he feels it is a project now that the Chancellor is not really that concerned about and all those issues about firewalls within banks and splitting them up, it hasn’t happened, it’s off the agenda.  Are they on Labour’s agenda?

SEEMA MALHOTRA: We believe very strongly in needing to learn the lessons of why we were less prepared for the shock when it came and we do believe that the Chancellor is rolling back on the commitments that he made to the British people because at the end of the day this is all about the prosperity of British businesses and families and making sure we have got the capital available to businesses particularly to invest, to create those jobs for the future.  Vince Cable I believe is absolutely right to say that was on the agenda, what we drove through a lot of the arguments we made in the last parliament and the work that we supported, was to make sure that there were those protections, there were those firewalls and what we’ve been very concerned about, if we look at what George Osborne has now effectively started to roll the clock back on and not take a lead in Europe as well where being at the heart of the European financial services debate is also part of our role and why it’s very important for us to stay in Europe.  We’ve seen him rolling back and we believe that was is starting to be moved towards lighter touch regulation in the Bank of England Bill that is currently going through parliament as well as other measures, they do give cause for concern and really lend themselves to this question about how serious George Osborne is about investing for the future and for the long term in Britain.

DM: I wanted to ask you about that because you said it there explicitly about how important it is we stay, from your perspective we stay within the European Union.  Now let me ask you about this letter sent to the Sunday Mirror today by the so-called big beasts of Labour, apart from one of them they are all big beasts from the past, there is only Hilary Benn there from the current leadership.  Why isn’t Jeremy Corbyn’s name on this letter, why isn’t John McDonnell’s name on this letter, why isn’t your name, Shadow Chief Secretary, on this letter?  Are you lukewarm about the campaign to remain in Europe?

SEEMA MALHOTRA: Well I think something that is very clear is that the Labour party is campaigning to stay in Europe and we believe that very strongly for the…   

DM: But not very actively.  

SEEMA MALHOTRA: No, that’s not true.  For the economy, I’m very involved, many others were very involved and essentially the letter today was an important one because what it was saying was here are five people who are very well known, who have been leaders in the Labour party as well over the last twenty years and who are saying we were sceptical before but we absolutely are rolling in behind the Stronger in Europe campaign because it’s right for our economy and …

DM: But one person you are leaving out of that is the current leader who surely all that applies. I was sceptical before, now I’m the leader, now I want to stay in, his name would enhance the letter would it not?

SEEMA MALHOTRA: Jeremy and John and conversations I’ve had with them as well, have also been very clear about it being right for Britain, for our economy, for our security, to be staying in Europe but you can also have additional debates and that’s part of what this is about.  You have to debate other issues but at the end of the day it comes down to this – is it right to stay in Europe? And on that there is absolutely clear unequivocal answer, it’s right for our economy to be staying in Europe and that’s what …

DM: We hear all those arguments but it’s a simple question, you describe the five who signed the letter but it exactly describes Jeremy Corbyn and he is the current leader of the Labour party, why didn’t he sign it?  

SEEMA MALHOTRA: Can I disagree with you?  There was a purpose to that letter and there is still effectively four months to go if we are to believe that the referendum might be on the 23rd of June so I think …

DM: So he will come out banging the drum?

SEEMA MALHOTRA: I think we will all be banging on the drum, of course, because we see the need and the importance of staying in Europe. That isn’t to say that Europe is perfect and I think any of us who you talk to as politicians will say that we need to look at areas of reform and what is important is about saying how can we work in a Europe that is also there to safeguard our rights for workers, to make sure that we are building on those political structures to make sure that we’ve got the peace process that we’ve had in the last 60 years.  Never before has there been a more time of uncertainty and a need for us to be stronger in Europe.  

DM: Okay, Shadow Chief Secretary, thank you very much indeed for your time, Seema Malhotra there.