Press Office

Aired: Sunday, 31 January, 2010 10:00
Sunday Live

Any quotes used must be attributed to Sky News, Sunday Live

ADAM BOULTON:
The political talk this weekend is of a possible hung parliament, Gordon Brown may be hanging on as Labour leader, of a possible row between David Cameron and George Osborne over economic policy and perhaps if he does win, David Cameron having to call a second general election to secure his position. Well joining me now is the man often described as the brains of the Conservative shadow cabinet, some people even go as far as two brains, and his new book is called The Pinch, and he argues that baby boomers, basically the over 45s, have stolen their children’s future by living so well. He is David Willetts, welcome to you indeed.

DAVID WILLETTS:
Good morning, Adam.

ADAM BOULTON:
We’ll come on to the fascinating stuff in here in a moment but just on the domestic politics, I was a bit puzzled when I heard David Cameron saying that perhaps the spending cuts in the first year wouldn’t need to be "particularly extensive". I thought he was saying you really did need to bear down very quickly if you are get elected.

DAVID WILLETTS:
Well we’ve always said that we need a plan because if you don’t have a clear plan then interest rates are going to go up and everybody is going to pay higher mortgages and that’s going to damage the recovery. I know from my time in the Treasury that a credible has to involved decisions you do straight away and we’ve always said there are things that we’d like to get a grip on within the year of 2010/11, decisions that you then take for the year or two ahead like the public sector pay freeze for 2011/12 and of course longer term very responsible decisions like raising the pension age and I think David, George, all of us in the shadow cabinet, have always made it clear that that’s the right way to tackle this very serious problem that we face.

ADAM BOULTON:
But we did hear austerity Britain from George Osborne who seems to have rather dropped out of sight and now we’re getting a rather softer message from David Cameron.

DAVID WILLETTS:
No, it is fundamental to improving Britain’s economic prospects that we get a grip on this appalling level of government debt and we are completely realistic about this. We know there are some things you can do straight away, you can get a grip on this appalling level of spending on advertising and consultancies, you can start saving money on the Child Trust Funds going to more affluent families; there are some things you can do in a year or two’s time and there are some things that it will take longer to complete. I think when you put all that together, the markets will see there is a credible plan and that in turn will enable to us to hold down interest rates.

ADAM BOULTON:
But do you not think you are possibly falling into this trap of wanting to talk tough but at the same time not wanting to say to people there’s going to be bad news and there’s going to be pain? I mean take this latest revelation that apparently councils are going to be all right, the health service is going to be all right, it all sounds rather soft doesn’t it?

DAVID WILLETTS:
Well we made clear at our party conference there are going to be tough decisions and there are tough decisions on public sector pay, tough decisions on the pension age but the purpose of this is not to inflict misery on the British people, the purpose of this …

ADAM BOULTON:
No, but it may be necessary.

DAVID WILLETTS:
… the purpose of this is to get the British economy going and whenever governments, both in Britain before and internationally, get a grip on the public finances, that strengthens the economy, it gets the economy going, it holds down interest rates so we think out of this we’ll get a stronger, better balanced economy than we’ve got now.

ADAM BOULTON:
Councils are going to be okay there?

DAVID WILLETTS:
Well if councils are able to hold down council tax, and we’ve shown how we can help them do it, then that will be a real relief to many people for whom the burden of council tax is one of their big grievances.

ADAM BOULTON:
And do you think we might have two elections this year? I mean just looking at the polls, how close they are?

DAVID WILLETTS:
What I very much hope we’ll get is a clear Conservative victory. Now we’ve never had any illusions that coming from where we are, after the last three heavy defeats we’ve suffered, it was going to be a big battle, we’ve always been completely realistic about this but we are absolutely working flat out for a clear Conservative victory because that’s what the nation needs, it needs a new sense of direction in the management of the economy.

ADAM BOULTON:
Does it worry you that this gap hasn’t widened in the polls and you still seem to be struggling around 40%, you really have got to be over that for a clear cut victory?

DAVID WILLETTS:
Well I think it’s understandable when we’ve had things like all the problems with MPs expenses, people are very wary of politicians, we understand that, that’s why we are trying to be as credible, grown up, sensible in the policies we put forward, to win people’s confidence but after everything that Tony Blair promised them in ’97 and failed to deliver, people of course approach everything politicians say with a degree of scepticism and I understand that.

ADAM BOULTON:
Now you make it, in your book you make it very clear that people that they call the baby boomers, it’s more of an American expression but roughly speaking it is people born after the war, now aged I suppose 45 to 65 …

DAVID WILLETTS:
I think it’s you and me, Adam.

ADAM BOULTON:
Yeah, okay … have done very well for ourselves in terms of having continually rising salaries, rising incomes and all the rest and you are suggesting that that actually comes at a price for our children, if you like.

DAVID WILLETTS:
Exactly. I am worried about the kind of opportunities that we are leaving to our kids and I think this is what many parents of our age worry about. We worry about whether they are going to be able to get started on the housing ladder like we do, we worry about whether they are going to be able to build up some serious savings the way that many of us have got something in a funded pension scheme, we worry about whether Britain is going to have the opportunities and be as socially mobile as it was in our day. So mine is a kind of appeal to the best interests of the baby boomers, the better half of their natures and saying look, we’ve got to make sure we offer a fair deal to our kids and I don’t think that at the moment we are.

ADAM BOULTON:
So what should we do about it? I mean does it basically mean that you and me should be taxed a lot heavier and it should be put away for a rainy day for our children?

DAVID WILLETTS:
Well what we have to do is look at the different ways in which we can for example help young people get started on the housing ladder and that’s why it is so important that we both ease the burden of tax on first time buyers and also have very strong incentives for local communities to build more houses so that if they build more houses they get to keep some of the revenues so that young people have got a better chance of getting started on the housing ladder and I do think that if you look at issue after issue, it suddenly takes on, it suddenly becomes more personally significant if you think what does this mean for the younger generation.

ADAM BOULTON:
Isn’t in a sense this focus on generational fairness a little bit un-Conservative? I mean a Conservative argument would say okay, we may have had very good times but we created a lot of wealth, the world is infinitely better than it was and therefore that in the end will pass on a better society to our children even if it is a bit tougher for them?

DAVID WILLETTS:
Well I think that a Conservative argument is the other way round. I think the Conservative argument is that what holds a country together is both a kind of recognition of the debt we owe our parents and the people who came before and also an obligation to pass something on. A country does not belong to any one generation, any one generation should try to leave it in better shape than we found it for future generations, be it the state of the environment or their ability to get started owning some property or indeed the burden of government debt and the taxes that the younger generation are going to have to pay, I think that at the moment that we, the baby boomers, are failing to discharge that obligation and I think that obligation, to be honest, is at the heart of Conservatism.

ADAM BOULTON:
So if you look at the policies that we know about, you mentioned one policy earlier about shoving out Child Trust Funds for the better off, I mean that would seem to work directly counter to your argument.

DAVID WILLETTS:
You have got to admit that the purpose of this is to bring down the burden of government debt and I find the thing that brings the issue of debt home to people is when they realise that the bonds that the government is going to have to be issuing, that are going to cover the appalling gap between spending and tax revenues, there is going to be interest payable on those bonds for decades to come and younger people, as they get into the jobs market, they are going to be paying taxes to pay the interest on the borrowing we’re taking on this year and next year and that’s why it is such a priority for us to get a grip on the burden of government borrowing.

ADAM BOULTON:
But as I said, that’s not going to help the rising generation much though is it?

DAVID WILLETTS:
I think that if we can hold down the burden of tax and future government debt, and also remember interest rates really matter – if you were going to get started on the housing ladder, one of the big issues at the moment is when you actually do try to negotiate to get a loan from a bank or building society, the very high cost of mortgages. It is very important that we try to hold down interest rates. 

ADAM BOULTON:
Likewise universities is one your responsibilities, again it seems because of the financial squeeze, fewer children will be going to university in future, which again is not doing anything about the …

DAVID WILLETTS:
And again I think it is really important that young people have an opportunity if they can benefit from it and they have got the aptitude to go to university, and of course if they are more vocational perhaps have apprenticeships, and I have put forward with David and George proposals for 10,000 extra university places next year because we know in 2010 there is going to be a surge in applicants and proposals for more apprenticeship places …

ADAM BOULTON:
If you speak to any university, I mean they are talking about having to cut the number of people they can take because of the amount of money available. They have had their hefty funds cut backs.

DAVID WILLETTS:
Yes, and I realise that we can’t exempt universities from the kind of cuts which the government has been talking about but at least we have been able to apply our ingenuity to identify an extra source of cash for next year by a special discount if people pay their student debt off early and we say when that extra cash comes in to the system we can use that once off for more places at university, 10,000 extra places which whilst it doesn’t solve the entire crisis, at least it is a practical way of helping more young people in what is going to be a tough few years.

ADAM BOULTON:
So this is not just interesting one key, it is actually affecting what you will do if you get in to power. 

DAVID WILLETTS:
It lies behind everything that we’re trying to do and everything that we believe in if we’re in government.

ADAM BOULTON:
David Willetts, thank you very much indeed.