DERMOT MURNAGHAN: Let’s turn now to Chuka Umunna, the Shadow Business Secretary. Simon Hughes there was being very, very even handed, saying that it is good news of course to see some growth, it might not be that strong, it might even evaporate but that is good news and we have to be cautious, we have to welcome that and we have to plan our next moves so I can’t see how there will be any difference between Labour and the Lib Dems on that.

CHUKA UMUNNA: Well I don’t disagree that it is good news, it is good news, with the help of the Olympics and after the longest double dip recession since the Second World War, that we saw a positive number last week but I think the statistics are one thing, how people feel is another. If you speak to many businesses they are still seeing …

DM: Well there’s no switch where you can say we’re out of recession, you’re going to feel better. It’s going to take a while to feed through isn’t it?

CU: Yes and that’s my point, it is how people feel and businesses have seen, for example, small business lending contract, they are not seeing the orders come through, families, individuals are still feeling the squeeze on their living standards and of course, granted Simon said this, the announcement at Ford, Eric didn’t mention this earlier but of course 1,100 jobs will be going as a result and that was quite a totemic decision. You had Ford announcing it is going to cease vehicle production in the UK and that is in a sector which is doing incredibly well otherwise so it shows that actually no complacency but it is important that they put in place the foundations for a recovery to now settle in, which they choked on.

DM: Exactly but does it pose a fundamental question for Labour in that they can now say well we stuck with Plan A or Plan A-ish and it is beginning to work. It is going to be difficult but look, we have growth with Plan A, no need for a Plan B, no need for more borrowing as Labour are saying.

CU: Let’s actually take a step back and look at the wider figures. All that we saw happen last week is essentially us go back to the position that we were in last year, there has essentially been no growth since then. If you look at what has happened since the government’s comprehensive spending review, our economy has grown by 0.6% whereas if you look at Germany and the US, they have grown by over 3% since that period. So still the problem that we’ve got is that we are bouncing along at the bottom, there should be much stronger growth now and let’s not forget that George Osborne said that at this point we would have seen about 4.5% worth of growth, that hasn’t happened. So we’ve got to make up a lot of that lost ground.

DM: Okay, let me just move forward, however we get growth one of the other fundamental problems, and I was mentioning this to Mr Pickles earlier, that Lord Heseltine has been looking at this issue, almost his whole political career he’s been looking at this issue of the way the growth, the fruits of the economy are spread around the country and this north/south divide seems to be getting worse.

CU: Look, I’m a big fan of Lord Heseltine’s approach, I gave a speech saying that this March just gone and of course he advocates an active government approach where you have got government working at national and regional level, working strategically with the private sector to grow our economy. Now I must say that I am astounded that today, even before Lord Heseltine’s report has been published, it is being briefed against by people in Whitehall before we’ve even seen its contents and in some senses, the interesting thing about this, Dermot, is that we see history repeating itself because of course when Lord Heseltine was in charge of the then DTI, the precursor to the current Business Department, back in 1994 and he was advocating this kind of approach, the flag bearer for the Thatcherite right in the Tory party, Michael Portillo, famously in a letter in 1994 that was leaked, castigated him for not actually questioning whether it was the proper role of government to work actively with business. What we are seeing now, interestingly enough, is history repeating itself, it’s quite extraordinary.

DM: So you’re saying to the government, listen to Lord Heseltine and do what he says? But they have always said they want to encourage growth, investment in skills and training.

CU: Well actually what they’ve said is that the root to growth is simply to deregulate most things and let the market rip, that is essentially what they have been …

DM: Well …

CU: If you look at what they have done on employee rights, now I don't know exactly what is going to be in Lord Heseltine’s report but if you look at the things he has said they very much chime with things that I’ve said. So for example I thought it was a retrograde step abolishing the Regional Development Agencies and I don't think they have given enough resource or power to the Local Enterprise Partnerships that have been put in place to replace them, that seems to be precisely what reportedly is going to be in his report. He said that we should do more to encourage companies to invest in research and development, well in government we introduced R&D tax credits so that’s quite a lot of common ground between us and Lord Heseltine, absolutely.

DM: And you’re right, there is an attempt to free business up, as you mentioned there, with employees to say okay, if you give up certain of your rights you can have shares or participation in the company. Doesn’t that seem a fair quid pro quo?

CU: Look, look, it’s a crazy proposal and many business groups have said so. J. Sainsbury’s have said that they wouldn’t do this, the CBI have said that it’s not relevant for most businesses, many business people worry that now with this scheme, Shares For Rights, you give up, you take between two and fifty thousand pounds worth of shares in your employer and in return you are supposed to give up all your rights. The worry is with a lot of business people that if I go and offer shares to my employees now they’re going to think that I want to take their rights or get rid of them. They have not properly thought this through, they are doing a consultation, Dermot, on this which hasn’t closed yet and isn’t due to close for a good few days and yet they are legislating it, introducing the legislation in the House of Commons this Tuesday, before the consultation is even finished, complacent and shambolic in the extreme.

DM: Okay, Chuka Umunna, thank you very much indeed.