Michael Heseltine arrives at St Margaret's Church to attend the funeral of Tony Benn last week in London. Photograph: Getty Images.
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Exclusive: Michael Heseltine: EU referendum will have a "chilling effect" on business

Conservative peer also says that Britain will join the euro, that UKIP is a "racist" party and that Boris Johnson shouldn't stand for parliament before 2016.

At 81, Michael Heseltine retains the energy and lucidity of a man two decades younger. He has recently acquired full control of Haymarket, the publishing group he founded in 1957 and that earned him his estimated £250m fortune, and an office in the Treasury, where he serves as a wise elder to cities minister Greg Clark. He remains as keen as ever to have his say on the issues of the day, not least Britain's membership of the European Union. I recently interviewed him for the NS (read the full piece here), and here are the highlights of our conversation.

EU referendum: "chilling effect" on business

If, as Heseltine expects, David Cameron remains prime minister after the next election, a referendum will be held on EU membership by the end of 2017. It is a decision, he warned, that will have a "chilling effect" on business.

It will [have a chilling effect], this will be one of the arguments, an important argument. And industry is beginning to say it ... serious industrialists and our allies - America, Germany - are beginning to express their concerns. This will become a much more articulate debate as time goes on.

He dismissed Cameron's decision to promise a referendum as an act of party management.

“David Cameron is leader of a party and all parties are coalitions and he has to make a balanced judgement. I believe in Britain’s self-interest being pursued through a European agenda, I’m not in favour of referenda on this or any other subject. I know perfectly well that the only referendum we had on the subject was to get Harold Wilson out of a mess in 1975, it wasn’t a strategic ‘we must consult the people’ activity, it was because he had a split party and the only way to reconcile that was to have a referendum. It’s a time-honoured device, but my party criticised at the time and I still, in perhaps a rather naive way, believe the things today that I believed 30 or 40 years ago.”

Britain will join the euro

After Heseltine mocked the eurosceptics for predicting that the economic crisis would result in the break-up of the euro, I asked him whether he believes that Britain will join the single currency. He replied:

Oh yes, one day, one day. We have resisted all these European ventures in my life, we tried to keep out in Messina in ‘55, that was a very bad decision. Then we joined on terms which were not to our liking but were the best we could get. But we tried to compete with them with EFTA, now of course virtually the whole of EFTA has joined the European Union. Margaret Thatcher was no European but she signed the biggest sharing of sovereignty in British history called the Single European Act, she was quite right to do so.

Of the eurosceptics, he said: “What would be quite amusing is to collect the headlines and speeches from the last three years. They tell their own story: they have a dream, which is to get out of Europe, they use the dream to create the headlines and the headlines turn out to be rubbish ... If you think of what they predicted was going to happen to Europe as a result of the euro ...  Day after day, week after week, in the small print, I read Mr [George] Soros is now putting billions back into the Spanish economy, I’d rather trust him.”

UKIP: "There is a racist undertone"

It is the outfit that Heseltine contemptuously refers to as the "UK Isolationist Party" that has driven much of the debate over the EU and immigration. Recalling that he was "the first Conservative to criticise Enoch Powell", he compared Ukip to far-right parties past and present.

“The racial overtones that are within the Ukip movement have got the same motivation [and] psychological impact as Mosley in the Twenties and Thirties, as Powell in the Sixties, Le Pen in France, the hard right in Holland and in Germany. It’s all the same stuff.

He stood by his description last year of the party as "racist".

There is a racist undertone, there’s no question about it.

Boris Johnson: he shouldn't stand for parliament before 2016

The politician most often compared to Heseltine is Boris Johnson, who succeeded him as MP for Henley and who shares his voluminous mane, overweening ambition and love of grand projets. After Cameron’s declaration that he wants Johnson back "on the pitch", Westminster is rife with speculation that the mayor could return to parliament in 2015, leaving him free to stand in any post-election Tory leadership contest. But Heseltine, who failed in his ambition to become prime minister after the fall of Margaret Thatcher ("He who wields the knife never wears the crown," he presciently told New Society in 1986), advised Johnson to wait until after he has completed his second term as mayor in 2016.

He’s obviously going to fight to help Cameron to win, and so he should. I’m totally convinced that he will do everything he can. I think, if I was him, I would be inclined to say: 'I was elected to be mayor of London until 2016; I gave my word to London; I will stick with my word.'

I think that Boris, in his own interests, and he’s fully entitled to see it in his own interests, wants to leave a mark of reliability and dependability and trust and keeping faith with London. After all, it’s 20 per cent of the electorate. That would be an important thing in that calculation. I think he can do everything he needs to do to help the Conservatives. And of course whenever he wants to come back to the House of Commons, he’ll get a seat.

I asked him whether he believed Johnson would make a good prime minister. He replied: "I’m not going to get involved in trying to speculate on that. He will certainly be a candidate, and a perfectly credible candidate, but there are other candidates and one or two obvious people have got very considerable qualifications as well. I’m not going to get involved in being on one side or another. I’m pleased that the Tory party has such a rich seam of talent available to it whenever David Cameron decides to go, which I don’t think will be for some time."

George Eaton is political editor of the New Statesman.

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Labour is launching a stealthy Scottish comeback - thanks to Jeremy Corbyn and the Daily Mail

The Scottish Labour strategy is paying off - and hard evidence that it works may be more plentiful come 8 June 2017

When I suggested to a senior Scottish Labour figure earlier this year that the party was a car crash, he rejected my assertion.

“We’re past that,” he said gloomily. “Now we’re the burnt-out wreck in a field that no-one even notices anymore.”

And yet, just as the election campaign has seen Jeremy Corbyn transformed from an outdated jalopy into Chitty Chitty Bang Bang magically soaring in the polls, Scottish Labour is beginning to look roadworthy again.

And it’s all down to two apparently contradictory forces – Corbyn and The Daily Mail.

Kezia Dugdale’s decision to hire Alan Roden, then the Scottish Daily Mail’s political editor, as her spin doctor in chief last summer was said to have lost her some party members. It may win her some new members of parliament just nine months later.

Roden’s undoubted nose for a story and nous in driving the news agenda, learned in his years at the Mail, has seen Nicola Sturgeon repeatedly forced to defend her government record on health and education in recent weeks, even though her Holyrood administration is not up for election next month.

On ITV’s leaders debate she confessed that, despite 10 years in power, the Scottish education system is in need of some attention. And a few days later she was taken to task during a BBC debate involving the Scottish leaders by a nurse who told her she had to visit a food bank to get by. The subsequent SNP attempt to smear that nurse was a pathetic mis-step by the party that suggested their media operation had gone awry.

It’s not the Tories putting Sturgeon on the defence. They, like the SNP, are happy to contend the general election on constitutional issues in the hope of corralling the unionist vote or even just the votes of those that don’t yet want a second independence referendum. It is Labour who are spotting the opportunities and maximising them.

However, that would not be enough alone. For although folk like Dugdale as a person – as evidenced in Lord Ashcroft’s latest polling - she lacks the policy chops to build on that. Witness her dopey proposal ahead of the last Holyrood election to raise income tax.

Dugdale may be a self-confessed Blairite but what’s powering Scottish Labour just now is Jeremy Corbyn’s more left-wing policy platform.

For as Brexit has dropped down the agenda at this election, and bread and butter stuff like health and education has moved centre stage, Scots are seeing that for all the SNP’s left wing rhetoric, after 10 years in power in Holyrood, there’s not a lot of progressive policy to show for it.

Corbyn’s manifesto, even though huge chunks of it won’t apply in Scotland, is progressive. The evidence is anecdotal at the moment, but it seems some Scots voters find it more attractive than the timid managerialism of the SNP. This is particularly the case with another independence referendum looking very unlikely before the 2020s, on either the nationalists' or the Conservatives' timetable.

Evidence that the Scottish Labour strategy has worked may be more plentiful come 8 June 2017. The polls, albeit with small sample sizes so best approached with caution, have Ian Murray streets ahead in the battle to defend Edinburgh South. There’s a lot of optimism in East Lothian where Labour won the council earlier in May and MSP Iain Gray increased his majority at the Scottish election last year. Labour have chosen their local candidate well in local teacher Martin Whitfield, and if the unionist vote swings behind him he could overhaul sitting MP George Kerevan’s 7,000 majority. (As we learned in 2015, apparently safe majorities mean nothing in the face of larger electoral forces). In East Renfrewshire, Labour's Blair McDougall, the man who led Better Together in 2014, can out-unionist the Tory candidate.

But, while in April, it was suggested that these three seats would be the sole focus of the Scottish Labour campaign, that attitude has changed after the local elections. Labour lost Glasgow but did not implode. In chunks of their former west of Scotland heartlands there was signs of life.

Mhairi Black’s a media darling, but her reputation as a local MP rather than a local celebrity is not great. Labour would love to unseat her, in what would be a huge upset, or perhaps more realistically go after Gavin Newlands in the neighbouring Paisley seat.

They are also sniffing Glasgow East. With Natalie McGarry’s stint as MP ending in tears – a police investigation, voting in her wedding dress and fainting in the chamber sums up her two years in Westminster – Labour ought to be in with a chance in the deprived neighbourhoods of Glasgow’s east end.

Labour in Scotland doesn’t feel like such a wreck anymore. Alan Roden’s Daily Mail-honed media nous has grabbed attention. Corbyn’s progressive policies have put fuel in the tank.

After polling day, the party will be able to fit all its Scottish MPs comfortably in a small hatchback, compared to the double decker bus necessary just a few years back.

But this general election could give the party the necessary shove to get on to the long road back.

James Millar is a political journalist and founder of the Political Yeti's Politics Podcast. He is co-author of The Gender Agenda, which will be published July 21 by Jessica Kingsley Publishing.

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