Press Office

Aired: Tuesday, 23 February, 2010 19:30
Jeff Randall Live

Any quotes used must be attributed to Sky News, Jeff Randall Live

JEFF RANDALL:

Good evening, I’m Jeff Randall, now broadcasting from the heart of the City. Tonight, Alistair Darling, saint or sinner, the truth behind the tension in Downing Street. We’ll be asking the Chancellor if his next door neighbour has been behaving himself. Should the first cuts be the deepest? Britain’s finances are in a mess with the deficit at a record high, is it time to get a grip on spending before the markets take fright? Over the next half an hour we’ll try to winkle out what plans the Chancellor has to revive a fragile economy that still hooks up to a life support machine.

Welcome to a new home for Sky’s business coverage, here in the heart of the City. Each night at this time we’ll be broadcasting live from our very own studio in the Gherkin Tower. Now history tell us that the relationship between Number Ten and Number Eleven Downing Street is often strained, Tony Blair, John Major and Margaret Thatcher famously found it hard going with their Chancellors but if the allegations are to be believed, Gordon Brown has been mistreating all the occupants of Downing Street. Today his nearest and dearest came out in support.

SARAH BROWN:
Gordon is the man that I know and the man that I love and I know that people have heard me talk about him and they probably know everything that I would have to say about him. He is a strong, hard working, busy man and he isn’t anything else. He’s just what you see is what you get with him.

PETER MANDELSON:
Gordon Brown’s character wouldn’t for one moment indulge in bullying activity or tolerate it in any working environment where he was, that’s his character, those are his values, those are his principles. His personality? Lively.

JEFF RANDALL:
Well according to a new book by Andrew Rawnsley, Gordon Brown is the bully bloggs of Westminster. The Prime Minister has been accused of repeatedly seeking to direct personal attacks at his own Chancellor, hoping to replace Alistair Darling with staunch Brownite Ed Balls. Well let’s find out what’s been going on, Alistair Darling is my guest for the whole of this show. Chancellor, nice to see you, thank you for coming in.

ALISTAIR DARLING:
Good evening.

JEFF RANDALL:
Now that you have faced him down and in some respects called his bluff, has the Prime Minister stopped bullying you?

ALISTAIR DARLING:
Well I don’t quite see it that way. I’ve always said that at the end of the day it is up to the Prime Minister who he wants as his Chancellor. Now all of us can have our good days and our bad days and of course Gordon and I have some very robust exchanges, as you’ve just said. I can’t imagine any healthy relationship between a Prime Minister and a Chancellor where they don’t have differences of opinion from time to time. What unites us though is we’re both committed to the same end goal, of getting ourselves through this recession, getting through to recovery and helping this country do the best it possibly can so of course people have their ups and downs and all of us can be guilty from time to time of saying things or doing things that perhaps in the cold light of day we shouldn’t.

JEFF RANDALL:
I think we all understand robust dialogue and we would expect that but for instance, in the summer of 2008 when you gave that famous interview to a newspaper and you said this is going to be the worst recession for 60 years, weren’t you bullied by the Prime Minister to retract that? Didn’t he try to get you to go back and say it’s not going to be like that?

ALISTAIR DARLING:
No, I remember the conversation with him very well and I was a bit annoyed because the story had sort of spun away from what I originally said and both of us agreed that what had not been got across is that I had said we were certainly in for a very profound and deep recession …

JEFF RANDALL:
And you were right and he was wrong.

ALISTAIR DARLING:
Yes, but I also said that other countries would be there as well. But look, every relationship between politicians, especially between number Ten and Eleven, of course there are going to be differences from time to time but I always take this view, of course there’s been some bad days but actually there have been rather more good days than there have been bad days and I’d say the two of us, there’s more than unites us than will ever divide us I think.

JEFF RANDALL:
There are bad days and then there are dodgy days. After that famous interview the attack dogs were sent out against you, we all know who they are, Damien McBride, Charlie Wheelan and they had a right pop at you behind your back in the press. Are you saying that that wasn’t subtle bullying?

ALISTAIR DARLING:
Look, nobody likes that sort of briefing that goes on but I’ve been around long enough, you pick these things out very quickly and the one thing you learn about briefing is that at least one other person knows you’ve done it so it soon enough gets out but frankly …

JEFF RANDALL:
But you were being briefed against weren’t you? You admit that?

ALISTAIR DARLING:
Of course there were people saying things but frankly my best answer for them is the fact that I’m still here, one of them is not.

JEFF RANDALL:
Ain’t that the truth. Now just on a personal note really, that fruity comment attributed to the delightful Mrs Darling when she realised that you were being stitched up, true or false?

ALISTAIR DARLING:
Well I haven’t heard Margaret using that sort of language but when you go through a thing like that, I remember the weekend after we came back and I’d done this interview and the forces of hell were unleashed …

JEFF RANDALL:
By Number Ten?

ALISTAIR DARLING:
Not just them, the Tories as well. The Tories jumped on to the bandwagon as ever and they all tried to join in and of course it’s difficult, especially for the Chancellor. If you’re in politics you have to be thick skinned I think to an extent. Of course you are not immune from the fact that you wish people hadn’t said things or you hadn’t done things but frankly, when I look back at the three years I’ve been Chancellor, okay it was a weekend you could have done without but there was far more important things …

JEFF RANDALL:
But what a lot of people will not understand is this. Why would the Prime Minister and his henchmen brief against you, one, for telling the truth and two, for being right?

 

ALISTAIR DARLING:
I do not know why the briefers if you like did what they did, one day maybe they’ll explain. What I do know is that yes, unfortunately, and it’s not a great source of pleasure, what I said did turn out to be true as we well know but what is important is yes, you have your ups and downs, yes you have your differences of opinion and a lot of people had different views right at the start of the recession as to exactly what we were going into. The important thing is did we get it right in sorting it out, are we getting it right now and making sure we have got through to recovery and are we making it clear that there is a choice that faces people – but we are going to come on to that no doubt in the rest of the interview – as to which of the two major political parties have got a clear view of what will be in the future.

JEFF RANDALL:
Precisely. So I think we’ve had enough of bullying, it’s a magnificent triviality but not much more. Let’s get down to brass tacks. At the weekend, last weekend, Lord Mandelson said this: "Economic growth is the best antidote to state deficits and debt." Do you agree?

ALISTAIR DARLING:
Well yes, I do. Growth is very, very important, not just because it is one way in which you can reduce deficits but it’s also, if we’re going to get jobs for the future you’ve got to make sure you’ve got growth. It’s insufficient in itself though, which is why I’ve made it clear that the next spending round will be very, very tough. We’ve got to halve our deficit over a four year period, I’ve already announced our measures in the pre budget report, both in relation to tax and in relation to spending, so we’ve got to both ensure that as we get recovery established we reduce our spending As the Prime Minister has said at the weekend, there’s some things will have to be cut and some things will have to be postponed but the key must be for our country, and other countries, when you look at what’s happening and the uncertain times in which we live at the moment, we’ve got to do everything we can to get growth because if you don’t get growth you won’t get the jobs and if you don’t get the jobs, you don’t get the opportunities that people expect.

JEFF RANDALL:
Well let’s talk about growth because I put this to you, I think your problem is this: your predecessor demonstrated beyond doubt that growth under a Labour government is not the antidote to deficits and debt, it is quite the reverse. Have a look at this on the monitor. In 2003 there was lots of growth, that was the deficit run up by Gordon Brown. In 2004, even more, £33 billion deficit run up by the then Chancellor. 2005, more growth, yet more deficits, £32 billion deficit. 2006, yes, more growth but oops, deficit, £36 billion of deficit and in his final year, 2007, yes, there was growth but a deficit of £34 billion. That gave us in five years of great economic growth a total deficit of £163 billion. You can see where I’m coming from. The Prime Minister would have us believe that all this debt should have swept over us like a plague from America, I’m putting it to you that that’s not true, it is the result of a profligate Labour government.

ALISTAIR DARLING:
I don't think Gordon would argue that and I wouldn’t argue it either. Yes, we were borrowing money in the early part of the last decade because we were spending more on health, more on education, more on other public services and I’ll tell you something else, at the time others, including the Tories, were not calling on us to spend less, many of them wanted us to spend even more.

JEFF RANDALL:
I’m not here to defend the Tories, your record speaks for itself. This is about your record on growth and debt.

ALISTAIR DARLING:
If you look at the years immediately before we went into the downturn then recession as you were saying, yes, we were borrowing more and if you look at … the structural deficit at that time was about 2.3%, which is roughly accounted for by the fact that we were spending money on rebuilding schools and hospitals, transport infrastructure, at the same time.

JEFF RANDALL:
What I don’t understand is those numbers started in 2003, you had already been in power six years, surely it was time to tuck a few quid away under the rock at the bottom of Number Eleven’s garden, as the Tories would say to prepare for bad days ahead.

ALISTAIR DARLING:
We did reduce the amount of debt that we inherited, then when we sold the Spectrum in the late 1990s, people said why don’t you spend it on education or health or whatever …

JEFF RANDALL:
That was before 2003.

ALISTAIR DARLING:
But Gordon Brown took the decision to get debt down so that at the end of that period, with the second lowest amount of debt in the G7, rather than having one of the highest. Now you are right, and I’ve just said that during the course of the early last decade, we were catching up on a decade of under investment in the public services. What really caused our deficit to go up dramatically was when we went into this downturn, the receipts from the financial services industry for example, stamp duties, income taxes, like in every other country they fell. That’s why our borrowing now is as high as it is. Now you can carry that for a short time in extraordinary circumstances as you support the economy but I have always been clear that once we get recovery established, that you must reduce your deficit, therefore in that way you stabilise your debt. It is absolutely critical to what we’re about but it has to be seen alongside a policy too that is focused on getting growth as we go through it.

JEFF RANDALL:
Are you really saying that in five boom years, 2003 to 2007, Gordon Brown was right in piling up £160 billion plus of debt, that can’t be right?

ALISTAIR DARLING:
What I’m saying to you is the reason that we were maintaining the borrowing is that at that time we were catching up on a backlog – in health for example in 2001/2 it didn’t matter, and I’m not suggesting you should defend the Conservatives for one minute, I wouldn’t wish that on you, the Tories, the Liberals, everybody was saying you need to spend more on health. As a country we recognised that we had a deficit if you like in investment and infrastructure. Now as we came in to this downturn, yes, borrowing has gone up, debt has gone up but it has gone up for every single developed country and some countries, Japan for example, debt – and the United States – debt is far greater than the amount of debt we are carrying at the moment.

JEFF RANDALL:
Chancellor, I’m sorry to do this, we’ll have to leave it there for the moment. We’ll talk about the deficits and Britain’s growing deficit after the break. Stay with us, we’ll be back very soon.

END OF PART ONE

PART TWO

JEFF RANDALL:
Welcome back to Jeff Randall Live, here in the heart of the City. Let’s return to my discussion with the Chancellor, Alistair Darling, who’s with me at the Gherkin. Chancellor, between now and the election I suspect there will be a budget, is that right?

ALISTAIR DARLING:
Well I hope there is because I’m working on it.

JEFF RANDALL:
Well jolly good, we wish you well. Will you be telling us about the savage cuts to public spending that you will have to make or will you buckle to the Prime Minister’s wishes and hide them?

ALISTAIR DARLING:
Well look, I’ve been very clear that we’re not going to do a spending review at this stage, we’ll have to do one during the course of this year because remember we’ve fixed public spending up until the end of March of 2011 and my argument right since the pre budget report in 2008 was that we needed to maintain that spending because I reckoned we needed to support the economy because I didn’t think we’d get recovery established before 2011. Now I know there is a difference between us and the Tories on that, they want to start cutting immediately after the election were they to win, I think that’s wrong, I think that would risk the recovery, I think it would risk tipping us back into recession but I’m not going to do a spending review just now. What I have said though is that we need to halve the deficit in a four year period, the structural deficit actually comes down by about two-thirds during that period but as we go through this year I think there will be a little bit more certainty that will allow us to do a spending review. But at the moment I am not going to anticipate my budget and what I might or might not say that day.

JEFF RANDALL:
I think that a lot of people, including me, think hang on, you just don’t want to tell us because the news is so bad it will frighten the horses. Let me read you something that the Treasury Select Committee said, and this is a Labour dominated Treasury Select Committee, quote "There is a sense that the Treasury" – you guys – "is using uncertainty to suit itself. We can see no good reason for the Treasury failing to produce illustrative figures for future expenditure."

 

ALISTAIR DARLING:
Well I don’t agree with them. I can understand why a Select Committee might come to that conclusion but I think for us to produce a range of figures which might not actually turn out to be what you’re doing, I don't think that would be particularly helpful. What I have said is, you know, I said it is totally non negotiable to reduce the deficit. Now that puts a ceiling, if you like, on expenditure. I also at the pre budget report announced a reduction of spending, about £57 billion, about two thirds of it is spending, about a third of it is tax. Now I am not going to tell you now what might be in the budget but I think people see our direction of travel. I’ve made it clear that in the next spending review we will protect front line services in the health service and schools for example and police but the rest of the spending review is going to be very, very tight. I’ve said before, it will be the tightest maybe 20 years or so.

JEFF RANDALL:
It’s non negotiable for you but is it non negotiable for the Prime Minister and his friends Ed Balls and Yvette Cooper?

ALISTAIR DARLING:
Absolutely.

JEFF RANDALL:
They understand this?

ALISTAIR DARLING:
Absolutely. You know Gordon at the weekend, when we were launching our spring campaign made the point that we had to get the deficit down. Indeed if you look at the four things that he set out was securing the recovery, making sure that we got sustainable finances as well as making sure that we get growth and jobs in the future. We must get the deficit down, we are absolutely committed to that, there can be no doubt about that whatsoever.

JEFF RANDALL:
Because the markets will take debt won’t they, you’ll not be able to get away gilt auctions as it stands …

ALISTAIR DARLING:
Well we are as you know at the moment but it isn’t just a matter of the markets, it is a matter of the general public don’t want to see their taxes going to service debt when the money could be better spent either on services they want or on them paying less tax.

JEFF RANDALL:
How much are we paying each year in debt interest?

ALISTAIR DARLING:
Well you can see the figures are set out.

JEFF RANDALL:
How much?

ALISTAIR DARLING:
If you look at the figure at the moment, it’s about forty and …

JEFF RANDALL:
40 billion?

ALISTAIR DARLING:
That’s right.

JEFF RANDALL:
That’s more than the entire defence budget.

ALISTAIR DARLING:
But it is a lot of money but the reason that we are carrying that high level of debt at the moment is because, as I said in the first half of this programme, our revenues dropped when we went into this downturn, a quarter of our corporation tax receipts come from the financial services industry, the stamp duty went down, income taxes have gone down but every single country in the world has been hit by this. Now you have a choice. Of course there are some people that argue, the Tories argued that when this happened like a business you cut your expenditure. If we’d done that more people would have been unemployed, there would have been more taxes having to be paid as a result and it wouldn’t have made any sense whatsoever so my … this is a view that isn’t just shared by me, it is shared by most other developed countries in the world and it’s the right approach.

JEFF RANDALL:
Let’s assume that you’ve done the right thing but the next right thing is getting this deficit down.

ALISTAIR DARLING:
Absolutely, yes, yes.

JEFF RANDALL:
Pain is to come for a broad section of society, that will inevitably mean a loss of state jobs won’t it? If it doesn’t I don’t see how you can achieve it.

ALISTAIR DARLING:
Well there is nothing new in that. If you take for example the Revenue and Customs or the Department of Work and Pensions which has lost something like 30,000 jobs over the last few years, if you are cutting a programme or if you are postponing something, it has consequences. But remember, at the same time part of our strategy is to make sure we can get the conditions right where you get the private investment coming back in and in the last ten years we’ve been very successful getting people into jobs in the private sector as well as in the public sector and indeed one of the encouraging things at the moment is because of what we’re doing in employment, remember most people are back in work within six months. Now I think that is an example of where government intervenes, yes we had to spend some money on Job Centre Plus, the money has been well spent. But I really think to adopt a policy where firstly you refuse to support the economy when you are going through a traumatic period like this, or as the Tories suggest, you start to cut money now, at least I understand that’s their policy as of today, that to me would be utterly ridiculous.

JEFF RANDALL:
Let’s sum up because we’re running out of time here. After the budget you are going to be on the stump trying to persuade people to vote Labour one more time. As I see it this is your 13 year economic record: unemployment is higher than when you came in, the pound is worth much less than when you came in, our gold reserves were sold off at rock bottom prices, our cash savings yield almost nothing, the stock market is lower today than it was ten years ago, our private pension system has been taxed into ruin, we are running record budget deficits worse than anywhere else and our stock of debt is heading for more than one trillion pounds. Why on earth would anybody want to vote for more of that?

ALISTAIR DARLING:
Well what I’d say to you is yes, we have come through a very deep recession, so have other countries but this election …

JEFF RANDALL:
Caused by your policies in part.

ALISTAIR DARLING:
Come on, this is a global recession. What I’d say to you is …

JEFF RANDALL:
Our debt is worse than many other countries, most other countries.

ALISTAIR DARLING:
America, Japan are greater but this election is going to be about the future, it about how can government make a difference to the chances of individuals, of businesses, to get through this recession, to get through into recovery and to get growth for the future, the growth that will bring jobs. Government has a key role to do that and the contrast is with a Tory party that would cut away support just now, one that does not accept that government can make the difference between the opportunities available to businesses and to individuals and I think this election will be very much – yes it will be about our record and I will stand by our record …

JEFF RANDALL:
All of that record, you are happy to stand by all that?

ALISTAIR DARLING:
I will justify to anyone the action that we took to get through a recession but I will also justify the fact that we have a better health service, we have a better education service, we have improved transport out of all recognition from the situation we inherited. Yes, we have got a good record but this election is about two different competing visions if you like about the future of this country and I believe the future of this country depends on the government taking the right economic conditions. Frankly the Tories who are all over the place here, completely flaky, that’s a huge risk to our country and to our economy.

JEFF RANDALL:
Chancellor, we’ll see what the electorate makes of it. Many thanks for coming in, we really do appreciate it.

ALISTAIR DARLING:
Thank you.