Question: What is your view on why the World Trade Organisation talks in Cancun failed to reach agreement?

Lord Brittan: First of all I think the Mexican chairman didn't handle it terribly well. Handling the final stages is a difficult thing to do, but I think he brought it to an abrupt conclusion when perhaps he could have done rather more sophisticated manoeuvring which might have done the trick.

By all accounts progress was being made on agriculture, and the European Union was quite content that only two of the so-called "Singapore issues" should go ahead for negotiation. That doesn't seem to me to have been quite the fundamental breakdown that should have led to things coming to an end.

I think Pascal Lamy was also right to point to the structure of the WTO, where decisions have to be taken by unanimity. It is difficult enough in the European Union, and when we move to 25 members there are proposals to reduce the number of subjects on which unanimity is required. When you have over 140 countries it becomes all the more difficult.

I also think the alliance of developing countries might have seemed to be a very brave and bold thing to create, but it was actually counterproductive. What I used to say to the developing countries - and I was the person who first called for this round on behalf of the European Union in 1996, when we wanted it to be called the "Millennium Round" because we hoped it would be started by then - was "are you satisfied with the current world trade arrangements?". The answer, universally, was "no".

If that is the case, the only possible way you can get change is through multilateral agreement, and the only way to get that is by negotiation.

So its no use thinking you are being very clever by digging your toes in before the negotiation has really got very far underway, because that way you will get nothing. What will happen if the situation is left as it stands is there will be no liberalisation benefiting developing countries, and the United States in particular will proceed with bi-lateral agreements with countries that are intrinsically friendly to it, and that will be very, very bad news for everybody.

Question: Pascal Lamy has come in for some criticism; was it wise for him to press for the Singapore issues to be taken forward?

Lord Brittan: These issues were not raised for the first time at Cancun. Some of the press reporting on this issue has been lamentable. You'd think that he had suddenly come up with a whole set of new ideas, but they had been on the agenda. It was agreed at Doha that the decision would be taken whether to proceed to full negotiations at this conference.

Actually, I think on all these issues it is very much in the interests of developing countries to proceed to negotiations. The only question is when the negotiations should start.

And then Pascal Lamy was prepared to drop two of the Singapore issues at the end. I don't think you can criticise him for that.

The important question is what happens next. Obviously there will have to be a pause to let the consequences sink in.

I would reiterate that the lesson to the developing countries is that they could get nothing by not continuing to negotiate. It may be wonderful for them to show the European Union and the United States that they are advancing, but it is a pyrrhic and short term victory.

I hope that after a pause for reflection a formula will be found to resume the talks.

I am a little alarmed to see some European suggestions that we should drop our commitment to the multi-lateral system, I think that would be a great mistake. It would certainly be premature, we have always been foremost in supporting the multi-lateral system and should continue to do so.

Let us not forget that every previous set of talks has had its crises and breakdowns. The Heysel conference in 1990 broke down, but eventually we got there. The benefits for all concerned are huge, and there is no other way of getting any of those benefits for anyone, so I hope wiser counsels will prevail.

So while the breakdown is extremely disappointing, I don't think we should allow this to be the last word. We should bear in mind the historical precedents of the many occasions where there have been major hiccups and we have come through in the end.

Of course the timescale is disappointing for people with their own personal agendas. I was the lucky one who happened to be at the tail end of the Uruguay round and was able to bring it to a conclusion, whereas my predecessors had not. This is not something where you get short term political gain, but pressing on is entirely in the interests of the world community and Europe as well.

Question: Do you think that the European Union and the United States under-estimated the emergence of new and more powerful alliances among developing countries?

Lord Brittan: I think it was pretty apparent, even at the Singapore conference in 1996. I was there when it took five days trying to reach an agreement, which we did get, on a form of words - not even an agreement on substance or an agreement to start negotiations.

So it was pretty clear then that the balance had shifted, and the time since then has been used to try to persuade the developing countries to take a constructive line.

And of course we have had to make changes ourselves. What has been put forward by Europe on agriculture has been under-estimated in the British press. I share the wishes for more substantial reform, but don't forget that there was a quite significant agreement and willingness was expressed to go further.

Question: Was it a tactical mistake by the European Union to announce its plans to reform the Common Agricultural Policy in advance, making concessions before the talks had even begun?

Lord Brittan: On the contrary there was some criticism, which I don't share, that the EU had decided on reforms, but it didn't then put them forward in schedules and documents for the WTO.

I think that was not a mistake, as there was a clear indication that the EU could go further, if others were prepared to advance too.

And don't forget that this was only an interim conference. They weren't actually stitching up a deal or intending to do so. They were merely attempting to narrow the parameters, so that progress could be made with a view to completing a deal over a year from now.

Question: We've seen from campaigners and in the media the criticism of subsidies in Europe and the US, is it a positive move that we've seen developing countries putting more pressure on for greater reform?

Lord Brittan: It is a positive thing as long as they look to the mote in their own eye as well. It is wonderful to be sanctimonious and complain about subsidies, which is justified to an extent, but there has to be readiness to move on all sides.

In negotiations you have got to be aware of the pressures on the other side, and if you push people to move further than they can possibly go then you won't get anything.

On the other hand the American position on cotton was completely indefensible. You have to have credible targets, rather than just make across the board demands.

A lot of trade between developing countries was impeded by some of the developing countries' own obstacles to trade, and that issue also has to be addressed.

So the wave of criticism saying "wicked Europe", "wicked United States" is both unfair and inappropriate, but is also totally counter-productive because it ends up getting no where.

Question: Do you think that there is still a deal to be had at the World Trade Organisation?

Lord Brittan: Ultimately, yes.

Question: Even with, for example, the electoral timetable in the United States? The momentum hasn't been lost?

Lord Brittan: It will have to be after the US election. Leaving aside the election, the fact is that this having happened in September 2003 means that the chance of getting agreement by the end of 2004, which is when it is supposed to happen, isn't huge in any event.

There are technicalities, and when you add to that the political dimension I don't think you are going to meet the deadline, but that doesn't mean we are not going to get there eventually. As I say, every trade round up to now has gone on much longer than the original programme.

This is not a pessimistic position, it is an optimistic position. The pessimistic position would be to say it is all over, which I don't accept.

Question: Would there be any benefit in looking again at calls for a free trade pact between the EU and the US?

Lord Brittan: I don't think the time is ripe for that. We should not yet abandon the multilateral approach.

Question: Turning to the European Commission, there has been a lot of criticism recently regarding the scandals at Eurostat, as well as the Andreasen allegations. Is the Commission as an institution failing to learn the lessons from previous scandals?

Lord Brittan: I think it is too early to say. The Eurostat issue is a pretty serious allegation, but on the other hand pretty firm action has been taken and the people who have had action taken against them insist that this action was excessive and unreasonable. Until the course has been run through on that, I don't think you can comment one way or another.

Question: On the proposed European Union constitution, who do you see as the winners and losers as things stand at the moment?

Lord Brittan: One thing that is sure is that as soon as you start talking about winners or losers you won't get an agreement. Those who are the so-called losers and champions of the losers will dig their toes in.

I think the broad thrust of the proposals is reasonable and balanced in that it takes the steps necessary to prevent decision making paralysis in a European Union of 25 members. It also simplifies the whole system and does contain important reforms which are necessary.

Where I am most critical of what is proposed, in the sense that I think it is not clearly articulated and not going to work, is the plan for a foreign minister.

So much focus has gone on the presidency of the Council of Ministers that not enough attention has been given to this curious animal of the foreign minister - apart from the fact that people in the UK don't like the name "foreign minister", which I regard as the least important aspect of it.

It is a very hybrid creature that is going to be created. He is going to be a member of the Commission, a vice-president, but at the same time is going to be primarily accountable to the member states.

Within the area of his competence he is not going to be out-voted in the Commission. I doubt whether all that is a viable proposition.

And he is at the same time going to have the Commission's resources in terms of money and people. So in that sense if this proposal goes through in its current form the Commission would be a loser.

Question: There is scope for confusion and disagreement in this proposal?

Lord Brittan: Yes, and in the relationship between the foreign minister and the president. So I think that is the least satisfactory part of the package. Not unsatisfactory just because of the impact on the Commission, but because it is not clear to me that it is well worked out.

Question: Would you prefer to see the foreign minister moved wholly within the Commission?

Lord Brittan: I don't think that is a good idea either as member states would never agree to it.

There is something to be said for some change, but I don't think this one is particularly well thought through.

Question: Moving on to the euro, what was your reaction to the Swedish No vote?

Lord Brittan: I was naturally very disappointed that should happen, that goes without saying, as a supporter of the euro. But they are entitled to take their decision.

I think that in a paradoxical way the situation is a bit different in Britain.

If you have the whole establishment in favour of something it makes it much easier to organise a populist campaign and say, "we are not going to accept the advice of our 'elders and betters'", as it were.

If, on the other hand, you have deep divisions - as you do in the UK - then it is less an issue of the establishment versus the people.

I think the analogy between Britain and Sweden that is drawn is not a complete one, but I am not going to pretend that the vote in Sweden has been helpful to the pro-euro case in this country.

Question: What kind of timescale do you think we are looking at now before the UK can join the euro? Are we at least five years away?

Lord Brittan: I think it is impossible to say in the present circumstances. It depends above all on the economy.

The British economy, I believe, is heading for difficulties because of the economic policies of this government, which could catch up with them before the next election. And the reform process in France and Germany could move ahead, as it is beginning to. In these circumstances the grass may look greener on the other side of the Channel and the balance of the political and economic arguments will change.

I'm not saying that is going to happen, but that seems to me as credible an analysis as any other.

Question: Have disagreements over Iraq damaged Britain's standing in Europe?

Lord Brittan: Yes, I think they have. Britain's support for the Americans in a war which is increasingly seen as unjustifiable has of course damaged relations with Europe.

When you have, as has been disclosed, intelligence advice that attacking Iraq will increase the risk of terrorism rather than reduce it, and when you have the government going ahead, with so many other European leaders not being in favour, I think the government's position is incredibly weak.

This is leaving aside second order issues such as the Hutton inquiry, with due respect to the late Dr Kelly. However, the inquiry has led to the revelation of this intelligence on Iraq coming out and that is devastating.

Plus there are all the problems in Iraq itself and no evidence that Saddam Hussein was working with al Qaeda, and no evidence of weapons of mass destruction.

In these circumstances you can't expect our continental colleagues to come running to us and say "you got it right and we got it wrong". It looks much more like the reverse.Question: Do you hold out much hope that with the central and eastern European states now joining the European Union they may bring with them a more atlantacist approach to foreign affairs?

Lord Brittan: I think it will not take long before they are no longer a bloc. They never wanted to be a bloc, they were only members of a bloc because they were all under communism.

I remember speaking to one of the leaders of those countries, who is now in a very prominent position in that country, at a time when we were trying to encourage them to have closer cooperation within central and eastern Europe. He asked me, "why are you asking us to have special cooperation with country X and country Y when we have nothing to do with them historically or geographically and the only thing we have in common with them is that we were all under the communist yoke?".

I think that is illustrative of the fact that the common position based upon that legacy will diminish over time and they will become members of the European Union with their own positions.

Question: In the UK, is Europe still the faultline when it comes to causing divisions in the Conservative Party?

Lord Brittan: That depends on how the issue is played by the leadership.

Those like myself, who think it is absolutely crucial that Britain should play a leading and positive role in Europe, are in favour of the euro, and do not regard the constitutional proposals as the end of life as we know it on this planet, are not going to be silent.

If the leadership follows the line which it did in the first part of this parliament, that Europe is a divisive issue and we are not going to win an election on it, then there is no reason why this should be a faultline within the Conservative Party.

As I said on the morning after the last general election, which antagonised some of my friends, the idea of the Conservative Party campaigning as the saviour of the Pound has been tested to destruction. We got beaten then worse than we did in the 1997 election - not worse in number of seats but worse in the sense that after 18 years of Conservative government it was natural there should have been a defeat, but after four years of Labour government we should have done better but failed to do so.

We had campaigned entirely on that issue and that was the defining issue of the Conservative leadership's position. So I hope that lesson has been learned. It certainly appeared to be learned in the early stages of the Duncan Smith leadership, and I hope it will continue to be learned. If that happens the Conservative Party will not be perceived as divided on this issue.

Question: Are you more concerned now that the Conservatives have begun campaigning for a referendum on the proposed European Union constitution?

Lord Brittan: I think there is no justification for campaigning for a referendum on the constitution at all, because we haven't got a constitution yet.

To argue, when we are just embarking on an inter-governmental conference where the actual decisions will be made, that there should be a referendum is, I think, indefensible.

Question: How would you rate Iain Duncan Smith's leadership of the Conservative Party so far?

Lord Brittan: The jury is out.

Question: Are you still happy to reconcile your views on Europe with voting Conservative?

Lord Brittan: That is not a problem at all because the Conservative Party has always been a broad church.

When the pro-Europeans were in the ascendant, there were always members of the party who even voted against British membership of the European Community as it then was.

If we are to stand any chance of winning the next election or the one after that we have to recognise the divisions in the party on this issue and that Conservatives can take different views on it. I don't think there is any problem with that all.

Question: Is it realistic to think that Iain Duncan Smith can lead the Conservatives to victory at the next election?

Lord Brittan: I have no view on that which is worth more than anyone else's - I don't know.

The way the government is going now, they are handing it to the Conservatives on a plate irrespective of what anyone else does. They are making a mess in almost every possible area of policy.

But I don't think it is excessively high-minded or po-faced to want to win elections on the basis of what we have to offer and not the mess that the other lot are making.

Historically however, it is true that oppositions often do get in because of the mess governments get into. And we also know that we are entering a danger period when people get bored of the government because of the long time that they have been in office, and they also start making serious mistakes after being so long in power . The point is, we do have a chance.