'Priorities upside-down'

On Sunday 25 January, Andrew Marr interviewed Nick Clegg MP, Leader of the Liberal Democrats

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

Lib Dem Leader Nick Clegg says public can distinguish between humanitarian relief in Gaza and the politics of the Middle East.

Nick Clegg MP, Leader of the Liberal Democrats

ANDREW MARR: Now, as promised, I'm joined by the Leader of the Liberal Democrats: Nick Clegg. Welcome.

NICK CLEGG: Good morning.

ANDREW MARR: Could I start by asking you something similar to the question that I asked Ken Clarke about the British economy because you've made the point that we are in danger of as it were losing much of, if not all of, the City of London.

We've lost a lot of our manufacturing industry as a country already. Are you concerned with the question of how we're going to make our living as a country in the future?

NICK CLEGG: Well I think at this time of gloom, we must also keep things in perspective and retain a certain optimism about what this country is capable of. The British economy is more than the casino gambling of the City of London. We have fantastic strengths in other service industries - media, theatre, film, legal profession, accounting and so on; we are still the sixth largest manufacturing power in the world - so we have great strengths.

I think where I strongly disagree with Ken Clarke is he somehow suggests that government shouldn't be trying to look forward to the future in identifying new sectors where we need to build up our strength; and one area where I think we are woefully weak, where I want to see the Government take further action in cooperation with the private sector are the new green technologies, new ways of producing energy, new forms of insulation because that is where we are lagging behind countries like Germany, Denmark. We've just heard this weekend that President Obama has announced a massive new investment programme in green technologies. I think we need to make a major national effort as a country to become world leaders in that area as well.

ANDREW MARR: You've spoken of your own intense anger about the behaviour of some of the bankers and the greed, the bonuses that are still being paid. What, if anything, can be done about any of that or will politicians simply have to stand on the sidelines and say, "Well we think that's wrong"?

NICK CLEGG: Well clearly if they've broken the law, the law will catch up with them and...

ANDREW MARR: But we're not talking about that really, are we?

NICK CLEGG: No, we're not.

ANDREW MARR: We're talking about misjudgements and possibly about greed.

NICK CLEGG: We're talking about greed, we're talking about delusions of grandeur. I mean Sir Fred Goodwin, RBS, classic example. I remember three months ago, I was on the radio saying I thought it was a very bad deal for RBS to have taken over the Dutch bank ABN Amro at the huge cost that it did, which of course is one of the reasons why RBS...

ANDREW MARR: (over) It's now in trouble.

NICK CLEGG: ...is now holed below the waterline. My office had to deal with emails and letters of protestations of innocence and you know indignation from RBS all day that this was a perfect deal and so on.

So I think things have moved on. I think whilst the City needs to take the responsibility for many of the things that have gone wrong, we mustn't forget that blame is perhaps also equally shared by regulators who were you know asleep at the wheel and a government, in fact a succession of governments (if you look over the last twenty years) who've pursued an economic model - both Conservative and Labour governments - based on light regulation; huge, astronomical levels of debt, particularly private household debt; and this total subservience to financial services.

And so I think what we're seeing now, particularly this week as all these things are coming together and there's a sort of crisis of confidence in UK plc altogether, is not just a recession but a crisis in the very model by which we ran our economy over the last couple of decades. And that's why I think we need to think much more profoundly about how we go forward in the future.

ANDREW MARR: The other two big parties have had to radically reshape their policies looking ahead because of the depth of this recession. Are you doing the same when it comes to spending and tax?

NICK CLEGG: Yes we are, of course we are, everybody is.

ANDREW MARR: And so can you give us a flavour of your thinking on that?

NICK CLEGG: Well certain principles will remain the same. So, for instance, I'm adamant that the tax system as we come out of this recession must be fairer than the tax system that we went into the recession with.

It is in my view absurd that large corporations can avoid huge amounts, billions of pounds of tax whilst people on low and middle incomes are paying more in tax than the wealthy. We need to put money back in the pockets of people...

ANDREW MARR: (over) And you agree that the wealthy, in terms of income tax, should be paying a bit more and people at the bottom perhaps a little bit less?

NICK CLEGG: I certainly think people at the top shouldn't benefit from the huge multi-billion pound loopholes that they presently enjoy; you can pay fancy accountants and you can run a coach and horses through the tax system. That must end. Everyone needs to pay their fair share and the money generated needs to be given back - every pound, every pence of it - to people who really need more money in their pockets today.

ANDREW MARR: Do you think the euro is somehow back on the agenda? Ken Clarke was scoffing at that.

NICK CLEGG: Well poor man, of course he's being tethered and gagged by David Cameron and George Osborne, so he has to sort of suddenly sing a different tune to that which he's...

ANDREW MARR: (over) He didn't sound terribly tethered I have to say, but...

NICK CLEGG: Well he's absolutely right, and I'm absolutely clear, it is not for now, it is not for now. But I think it is important that all politicians also start spelling out the kind of things we're going to have to ask ourselves in the future. The future's going to look - it sounds trite, but it is important - dramatically different to the past in terms of how we run our economy. And at a time...

ANDREW MARR: (over) And in terms of, in terms of the City and the financial services industry, in your view do you think that the future requires membership of the euro for it to be sustained?

NICK CLEGG: I think the City of London, which used to be the crown jewel in the British economy, is now becoming if you like its great liability. And the great danger for us is that because of the prominence of the City of London, we're very exposed to the ebb and flow of international markets, but we don't enjoy the protection of being part of a global reserve currency like the US dollar or the euro. That puts us in a uniquely vulnerable position.

In a sense we have more in common with Iceland than we do with France, Germany or America in that sense. And that's why I think over time, as people realise the danger of being in such an exposed environment with such a volatile currency, as there's this public longing for greater stability and sustainability and balance in the way we run our economy - yes, I think how we run our currency will become an issue. Not for now; in the months and years ahead. But I do think it's important that people start thinking about that because if we don't, we won't be prepared for the future as we weren't prepared for the past.

ANDREW MARR: Now as a party leader, you've got lots of policies on different things and you've said that you are hungry for the chance to implement some of these changes and hungry for power. What does that mean?

NICK CLEGG: I've come into politics for - it sounds perhaps glib - but because I want Britain to be a better place. You come into politics because you want to change things. I want to see greater fairness, greater green-ness, I want to see greater protection of civil liberties, I want to see us commit to the world around us in a different way. (Marr tries to interject) Can I just finish?

ANDREW MARR: I understand what you want.

NICK CLEGG: Well hang on. Well, therefore, it is logical that I want to take every opportunity to make those changes happen.

ANDREW MARR: So how? I mean you look at the next election. You don't expect to be the main governing party. Do you now think about possible alliances, deals, as were done in Scotland, where you come up with a shopping list and say well these are the things that really matter to the Liberal Democrats and you talk to another party and you agree a joint programme possibly?

NICK CLEGG: No, I don't think you spend time worrying about deals or no deals in the future. What I do focus on - and I think it's right that I am asked if you like by the public to focus on this - is what are our values, the Liberal Democrats; what are our beliefs; what are our policy priorities.

They clearly are fairness, greater fairness in the tax system I've already talked about; revolutionising the way in which we deal with the environment in this country. That is why, for instance, I've been so outspoken in saying to Gordon Brown don't blow twelve and a half billion pounds of our money on a VAT cut that makes no difference. Invest it in the green infrastructure that we need which creates jobs...

ANDREW MARR: It just strikes me...

NICK CLEGG: But hang on, I'll tell you why this is important. Because what I think... My duty, my obligation by the next General Election is to say if you share my values, if you share the values of the Liberal Democrats, vote for us and one way or another we will make sure Britain is changed in those directions.

ANDREW MARR: It's just that when you itemise those things - I've said this to you before - you sound like you're close in some respects to David Cameron and the Conservative Party.

NICK CLEGG: Do you think David Cameron would start talking about the euro? Do you think David Cameron would...

ANDREW MARR: Not the euro, but...

NICK CLEGG: Hang on. Do you think David Cameron would change...

ANDREW MARR: ...the environment he's talked about, taxes...

NICK CLEGG: (over) The most important thing I can perhaps emphasise to you - do you think David Cameron is going to change the tax system to ask people at the top to pay considerably more, to close the huge... ?

ANDREW MARR: (over) Well he said he's pro the 45... Or you know he'd keep the 45p increase on people at the top.

NICK CLEGG: I don't believe for a minute that a Conservative government will take the radical action to make the tax system fairer - such that, for instance, upper rate earners at the moment get twice as much tax relief when they make contributions to their pension pots than people on an ordinary income.

You won't get that radical change to our tax system to put money back in the pockets of the people who need it the most from a Conservative or, judging by the record of Labour over the last ten or eleven years, from the Labour government either.

ANDREW MARR: (over) But you're not philosophically against doing a deal with Labour ultimately even though they're so unpopular at the moment? You could prop them up after an election.

NICK CLEGG: I think, unsurprisingly, the Liberal Democrats are different...

ANDREW MARR: Yes, sure.

NICK CLEGG: ...starkly different from Labour and the Conservatives. In the same way that we don't share the Conservatives' indifference to social injustice or their nationalism when it comes to Europe, I am extremely...

ANDREW MARR: (over) I mean it may be a beastly choice, but it may be a choice that you have to make.

NICK CLEGG: Well that is... If politicians need to make a choice, they will have to make a choice judged by the cards that have been dealt to them by the British people. I think it's very arrogant of any politician to start...

ANDREW MARR: (over) So wait and see what they...

NICK CLEGG: But in the meantime politicians clearly have to say these are our priorities, these are our values, these are our beliefs.

ANDREW MARR: Let me ask you, as I've asked others, about this story about the four Labour peers who are alleged - and I say alleged - to have accepted the offer of money in order to change legislation. How serious do you think that is and what do you think should be done?

NICK CLEGG: Well I think people will be very, very angry reading about these allegations. This is the week when people are filling in their tax forms. Every family in the country is worrying about how they spend their own money and what do they hear from Parliament this week?

Firstly a government seeking to cover up how MPs you know use their expenses, which is paid for by the taxpayer; and, secondly, allegations basically of total corruption in the House of Lords. You're right, now we need to investigate whether these allegations are true. But if anyone needed any reminder of how threadbare and weak the credibility of Westminster and the way we do politics has become, you just need to look at today's headlines.

And I think it is a scandal that both Labour and the Conservative Parties for so many years have refused, simply refused to make the profound changes we need to make to bring British politics into the 21st century.

ANDREW MARR: And that includes changing the way the House of Lords is in time?

NICK CLEGG: Completely, from tip to toe.

ANDREW MARR: Alright. For now, Nick Clegg, thank you very much indeed.

NICK CLEGG: Thank you.

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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