10p tax rate: no u-turn on abolition

John Hutton MP, Business Secretary

ANDREW MARR: Welcome.

JOHN HUTTON: Good morning.

ANDREW MARR: Let's start immediately on that tax question.

A lot of people, not just Liberal Democrats but many members of your own party look at the single people with really pretty low incomes who are going to lose money as a result of this change and say that is simply unfair.

JOHN HUTTON: Well there are two or three things I would say about that Andrew. First of all that it's important to bear in mind that when you look at the budget as a whole there are two billion pounds worth of cuts in personal taxes that the Chancellor has been able to put together. And that's a very significant package. And it's allowed us to say in truth that this is the lowest basic rate of income tax for seventy five eyras.

Now what we've tried to do as part of this over all balanced package, because it's important that people see it as a package, is to not lose sight of two other things. Firstly for families with children, including low income families, those families will be significantly better off because of the way that the tax credit system works as well. And that's an important thing to bear in mind. And particularly for those on low incomes. I think you've got, you've got to see this, as I said as part of a wider package ..

ANDREW MARR: Right.

JOHN HUTTON: .. and over a longer time period. And since nineteen ninety seven low income families have gained very significantly from tax ..

ANDREW MARR: Low income families have ..

JOHN HUTTON: .. tax credits and tax changes that the, the Labour government's been able to introduce, at about nearly ten pounds a week better off.

ANDREW MARR: And I understand it's a package. But if you are a low income person, a single person you are going to get quite severely hammered from today on this tax change. It's, it's a lot of money for many people. They're going to lose it and they simply don't understand - put all the packages to one side - why they're getting hit.

JOHN HUTTON: Well again I, with great respect I would say if you actually look at the figures that the Treasury have produced - and we're talking about at most half a per cent, half of, half of ..

ANDREW MARR: Well the Treasury have accepted the IFS's figures on this. And they've accepted that there are serious losses. Prime minister has sort of suggested he might look again at the effects of this. Is that something you would welcome?

JOHN HUTTON: Well I think - let me just come back to what I was trying to say. I mean we're talking in the worst case scenario about half a per cent, half of one per cent of net income being the sort of the scale of the maximum loss that someone might, might have.

And of course we are concerned about the over all situation of people on low and fixed incomes, pensioners as well. And that's why as I said over the last ten years we have done some, some really significant things. In the face of opposition from both the Conservatives ..

ANDREW MARR: Sure but ..

JOHN HUTTON: .. and the Liberal Democrats on things like the national minimum wage which we announced significant increases again only this week. So ..

ANDREW MARR: But ...

JOHN HUTTON: .. it is, it is the case I think Andrew that over all it can't be disputed that people on low and fixed incomes are significantly better off because of the priority and the things that we've done in the last ten years to focus on, on their particular needs. And it's right that we, we did so.

ANDREW MARR: You know know that ..

JOHN HUTTON: Cos they're the ones who've ..

ANDREW MARR: Yeah, sure.

JOHN HUTTON: .. lost out under the Tories.

ANDREW MARR: You know that single people haven't benefited from a lot of the changes that you've been talking about. I come back to the question - these are people on sort of seven thousand pounds a year.

Eight thousand pounds a year. Now if anybody in the country has to pay more surely they are among the last people who should be asked to pay more.

JOHN HUTTON: Look there are concerns about this and you were right to identify that and they have been raised with ministers. And obviously it is right and proper that ministers engage with a debate with our concerned colleagues about this.

ANDREW MARR: Is it possible to re-open, re-look at this again?

JOHN HUTTON: No I really don't think it is possible to do that. I think we've, we've made the decisions now on the budget and of course as Kate Hoey was rightly saying this morning these, this package of measures was actually voted on and debated last year as well.

So I think the right thing to do is to argue the case about what Labour is doing for families on low and fixed incomes, as well as other families too because we've got to think of the national interest too. And I, as I said at the beginning Andrew there's a significant package of cuts in personal taxes for people in this budget, up to two billion pounds worth of people's hard earned money now that they will be able to, to decide for themselves how they spend it. And that is right and proper too.

ANDREW MARR: One of the other groups people have focused on as having a particularly hard time are so called agency workers, people who are not employed directly, sometimes with very poor conditions, very, very low standards of pay and very low standards of service as well, conditions. What are you doing for them?

JOHN HUTTON: Well I think it's right too that we focus on abuses. You know when parliament passes laws they've got to be enforced. And you know we've taken measures to strengthen the way the national minimum wage law is applied to agency and temporary workers. And often migrant workers too. Because again there should be no distinction between migrant workers and UK workers.

ANDREW MARR: So are they getting a better ...?

JOHN HUTTON: We're putting more resources into enforcing the national minimum wage. And we've made some changes literally this week too to the rules about what people can be charged for in terms of accommodation and so on. Because I think there are cases of people being ripped off there. And it is not acceptable.

Migrant workers - I know there's been a lot of argument about it this week and last week - make a positive contribution to our economy. And we've got to make sure they're not exploited and ripped off by cowboy employers. And we're determined to do that. And that's why the law is being strengthened. And we're putting more resources as I said into the national minimum wage which parliament has rightly decided is an important tier in the protection we give to vulnerable workers. And it, and it's, it's got to be properly followed through.

ANDREW MARR: Weren't you a little shocked at that House of Lords report saying that actually when it comes to people who've been living here for a long time, those great waves of immigration that have come into this country over the last few years have been almost no economic benefit whatever.

JOHN HUTTON: Well I think that's an issue of dispute between us. I mean I don't think what is in dispute is the significant increase in the value of our economy that migrant workers have introduced - up to six billion pounds last year. And I think the House of Lords Committee accepted that. And I know the argument has become a very complicated one ..

ANDREW MARR: But who is it for ..

JOHN HUTTON: .. about GDP per capita and so on.

ANDREW MARR: Yeah.

JOHN HUTTON: But over all migrant workers make a positive contribution to the British economy. They come here to work.

And I think there's a different sort of pattern that's visible now. The current wave of migration I think is transient and it's economic. And actually when you look at what people are doing they're adding ..

ANDREW MARR: But when you say it's transient do you think people will then go back?

JOHN HUTTON: They are. Well they are going back. I mean we think probably about half of the, the Polish workers for example, Polish migrant workers have already returned to Poland. So they're making a positive contribution to our economy and I think we should see it in that way.

And I think you've got a choice in all of these things between imagining that you can remain a successful economy in the world by shutting up you know, shutting your frontiers and becoming a closed economy. You can't. In the modern world the successful economies will be the open economies that are willing to, to, to receive investment, willing to work with other countries and other companies across the world, to create value in the British economy and skill our workers for the challenges that lies ahead. So you know it's a false choice this you know. If we put up the shutters the British economy will suffer.

If we, if we deal flexibly with the issue of migration and make sure that people are coming here, are going to add value to the British economy, and that's what the new rules about so called points based system will allow us to do, to make sure people are bringing sort of a net benefit into the British economy, then I think we can, we can, we can make this a win-win situation for the UK.

ANDREW MARR: Without quote, trotting them all out, the latest poll figures again are dreadful, dreadful for Labour. Are you now in a tailspin that you can't come out of?

JOHN HUTTON: No I don't, I don't believe that at all. And I say that for one, one reason. I mean at the moment there's a sense of this is if you like a referendum. And people are saying they like us and a lot of them are saying they don't. Fine, we have to deal with that and we are trying to deal with that.

The next election will be not just a referendum it'll, we, we've got to make it a choice. And people have got to think about the alternative. And I think the real issue really is if you look at the sort of state of the parties, the Labour government has got a clear mission.

It's, it's got a, a direction of travel about the long term interest of the British economy the many, not the few making sure our public services are high quality. If you ask the same question to people of the Tories I think people would scratch their head. What is the big message ..

ANDREW MARR: And yet ..

JOHN HUTTON: .. for David Cameron and the Tories? It's completely unclear what the, what the Tories actually stand for now. Their economic policy changes every week ..

ANDREW MARR: And yet when it comes to what you stand for, when it comes to what you stand for, series of ministers have been, have been shooting their mouths off, apparently still keeping their jobs. When it comes to ..

JOHN HUTTON: Well ..

ANDREW MARR: .. ten P rate there's going to be a Commons Committee attacking it. Your own Deputy Chief Whip in the House of Lords has attacked it... Slight feeling that discipline and good order is breaking down.

JOHN HUTTON: Well I, again I, I don't accept that. I think the position of the Labour government is clear and the responsibility of ministers is clear.

Our job is to, to argue our case for why we deserve another term in government. And I think it's a very clear choice.

ANDREW MARR: Okay.

JOHN HUTTON: You know we are governing in the national interest, not the vested interest. And we've got a clear direction of travel for the country.

ANDREW MARR: All right. John Hutton thank you for coming in.

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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