Taxing issue

William Hague says any future Tory tax cuts will be 'driven by the economics, not by the politics'.

William Hague MP, Shadow Foreign Secretary

ANDREW MARR: Mr Hague thank you very much indeed for coming in or going there I should say.

Can I ask first of all for you to pick up on what Jonathan Powell was saying about the importance of keeping channels of communication open to people like the Taliban and even Al Qaeda.

What do you make of that?

WILLIAM HAGUE: Well I think it's true, the way Jonathan was putting it there.

And I think we should treat with respect the views of someone who's had his experiences. I think it is true that you always want if possible to have channels of communication to your enemies although they're often very, very distant channels and through many third parties and so on.

I think it's different when you say let's start having negotiations of some kind. That is a different proposition.

Because to really negotiate successfully as I see it with terrorist organisations they have to have somewhat given up hope that they will get what they want by violent means.

And you have to be able to see the outline of a political settlement in the end. Now those things are difficult to imagine with Al Qaeda for instance in the way they were possible to imagine with the IRA ten years ago. ANDREW MARR: We've had a series of polls again today putting your party well ahead. But also suggesting that people are relatively accepting of these new taxes on drink and four by fours.

Do you think that with the new numbers you're going to be able to have the kind of spending that you would like on the military if you were elected looking ahead?

WILLIAM HAGUE: Well we haven't made any commitments about changes in the spending totals of, of individual departments like that. Clearly we are going to face quite a difficult fiscal position if we come to power as we intend in the next couple of years.

This isn't a government that's going to have left any money in the kitty. It is an irresponsible government. It's incompetent in managing the nation's finances and we're now seeing the consequences of that. They didn't put any money aside in the, in the boom. So are we going to face a difficult position? Yes. But that's why we say stability comes first. And that, that will be the first priority of an incoming Conservative government.

ANDREW MARR: So those people thinking goodie, I'll vote Conservative and get some tax cuts had better think again?

WILLIAM HAGUE: Well there won't be up front, unfunded tax cuts. George Osborne has, had made that clear many, many times. He's also made clear however that we have tax cutting instincts, that we want to share the proceeds of growth over time between public expenditure and tax reductions, and that he will want to make tax reductions when it is prudent to do so.

But the stability comes first. And this is driven by the economics, not by the politics. If anyone can tell us what the state of the economy will be, what the budget deficit will be when we come to office then we could be more specific about when there might be tax reductions.

ANDREW MARR: But let's be straight forward. There aren't going to be tax cuts in the first term are there?

WILLIAM HAGUE: Well that depends on the things that I have just mentioned. It will as I say be driven by the economics, not by the politics.

ANDREW MARR: Seems most unlikely though.

WILLIAM HAGUE: We're not going to be government...Well we're not going to be a government that says oh there is an election coming so now we must have tax cuts even if the nation can't afford them. But we are going to be a government that says that over the long term and over an economic cycle we are trying to reduce the burden of tax on people.

It's not possible to foresee the economic events that dictate when we have the opportunity to do that. But it would be a very different picture from the current government that has increased people's taxes relentlessly in good times and bad. And now we're really seeing people feeling the pinch and paying the price of that.

ANDREW MARR: It's an anniver... lots of anniversaries around. Another anniversary of course is the Iraq invasion coming up. In the south of Iraq, in Basra, there have been big demonstrations protesting that the British troops have pulled out too quickly and are leaving a lot of people vulnerable and open to local war lords. How do you react to that? Do you think we've pulled out too quickly?

WILLIAM HAGUE: No I don't think we've pulled out of there too quickly. I think the British troops had reached the limit of what they could productively do. They were themselves becoming the target of terrorist or militia activity. And so I think to pull them back to base and to try to entrust the security there to the Iraqi forces was the right thing to do.

We do need a bit of clarity from the government now about exactly what the role of those troops is and exactly how their numbers are going to change over the coming year. There's now, there seems to be some confusion about whether their numbers will come down further.

ANDREW MARR: There is ..

WILLIAM HAGUE: And on the, since you mentioned the anniversary, if I can just make this point. I think it is very important - and we'll be coming back to this in parliament in the coming weeks - to commence the full scale Privy Council inquiry into the origins and conduct of the war.

Because if we're not going to start it now, five years on from the beginning of the war well then when on earth would we have such an inquiry. So we will be raising this again in parliament in the coming weeks.

ANDREW MARR: Were you struck by what Jonathan Powell said about not being prepared for what happened before the war? Do you think we could have done it better?

WILLIAM HAGUE: Yes I think that's a perfectly frank admission of that by Jonathan Powell. But I think our picture of that should not be formed by an interview with Jonathan on your programme, the publication of a book by a diplomat elsewhere, Freedom Of Information Act requests for cabinet minutes, building up a partial picture of what the, the main people involved thought what was happening at the time and how they made their decisions. We actually need the full picture.

The credibility of British governments telling people in the future that they need to take military action depends on us showing them that we have learnt all the lessons that can be learnt from what happened, any failures of planning, failures in the, after the invasion of Iraq that were clearly there in the planning for the occupation. Those lessons have got to be learnt and visibly learnt and we have to start on that process now.

ANDREW MARR: The situation in Tibet is clearly getting very, very dangerous indeed, very embarrassing, the timing for China. But what would be your message for Beijing at the moment, given what we've seen over the last twenty four hours?

WILLIAM HAGUE: The message for Beijing I think is that we are watching what happens on human rights in China, including what happens on human rights in Tibet, very, very closely. We have good relations with China.

We look to China as it takes on greater international responsibilities around the world - which it is doing - as its economy develops further and it's become so much more open in recent years.

We look to China to additionally improve its record on human rights. And that's a point David Cameron made to the Chinese leaders when he was there last year, that I made the previous year. And this is going to be one of the tests of that.

ANDREW MARR: Okay. And briefly if I may, can I ask you about a domestic matter. This notion that all MPs are going to have to hand publish every detail of their expenses. Is that going to be difficult for parliament as well as for individual MPs do you think?

WILLIAM HAGUE: Well it's necessary for parliament. We've got to restore some faith and trust in the system here. And as David Cameron was saying yesterday we think MPs should no longer set their own pay.

We think the final salary pension system of MPs should now be closed. And we believe in transparency on these things. And we've already committed ourselves from April the first to real transparency.

ANDREW MARR: All right, William Hague, thank you very much indeed for joining us.

INTERVIEW ENDS

Please note "The Andrew Marr Show" must be credited if any part of this transcript is used.

NB: This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy

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