Public view politicians as 'thieves'

On Sunday 05 April Andrew Marr interviewed Kenneth Clarke MP, Shadow Business Secretary.

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

Shadow Business Secretary: "It has made people more sceptical about politicians than I ever recall".

ANDREW MARR:

The G20 leaders got their London communique out, agreed a new huge injection of cash into the IMF, but we didn't hear an awful lot about commitments from individual countries.

Kenneth Clarke MP, Shadow Business Secretary

Gordon Brown said that these details would emerge in the domestic budget of each nation state.

So what can we expect from our budget in just over a fortnight?

How can Britain, having already borrowed on an unprecedented scale, stimulate growth? I'm going to be talking to the Chancellor of the Exchequer Alistair Darling shortly. But first Ken Clarke, the last Tory Chancellor, joins us from Nottingham. Welcome, Mr Clarke.

This was generally agreed to be a success, the G20. Do you agree with that?

KENNETH CLARKE:

Yes, it was. I think it was a very good idea to move to the G20 from the G7. Its big achievement was to lay down the basis for refinancing the IMF, which is going to be very necessary for the next few years, and that was their principal achievement. They haven't finally decided where the money's going to come from, but it plainly is going to come.

The big things they ducked, they didn't address, were toxic debt, bank balance sheets, which is still left to individual countries to tackle. We won't get out of the recession till banks start lending normally and they weren't able to get any international understanding on that. And of course the big thing they left on one side, which will have to be addressed as we come out of the recession, is the international imbalance: in the West we borrow money and we spend more than we earn; and in the East they won't spend money, they save money, and they produce more than they can sell to us unless they lend us the money to buy it. So all that, which lay behind the collapse in markets across the world, that's got to be addressed. But you have to have reasonable expectations of summits. They make little steps forward.

It is important that the heads of government ratify these things and I think this was a worthwhile step forward. I hope they also stick to what they said about protectionism, which they agreed in November in Washington when they last met and then most of them promptly broke what they said under the pressure of domestic lobbies as soon as they got home.

ANDREW MARR:

When you look at the numbers coming out in all sorts of different areas, how bad do you think it is current and how bad is it going to get?

KENNETH CLARKE:

I just don't know how long and how deep the recession is going to be. I always say the uncertainty is so bad that any pundit who tells you he knows how deep and how long it's going to be is by definition an idiot, and if you listen to most of the pundits they don't. 2009 is going to be very bad. Most people are saying it will recover in 2010.

We don't know. Because … Particularly in Britain because of the crushing burden of debt that we have, public debt and household debt, I think our problems when we come out will be very great and the consequences of this appalling recession will be with us for some years to come.

ANDREW MARR:

You got into a slight bit of bother over inheritance tax a few days ago. But you were making the point, as I understood it, that because we don't know how many non-doms (so-called) are going to be in this country or how much they're going to be earning, it's very difficult to plan how much money you're going to raise from them. Isn't that true and isn't it the case actually for all tax planning and spending planning?

KENNETH CLARKE:

Well I honestly, despite my famed experience, didn't quite understand how people could contrive all the fuss about what I said about inheritance tax.

The point you make was when I was asked, "Well why can't you say you will do this straightaway?" and I explained you can't write a 2010 budget now because of the present uncertainties and on that particular tax you've got to discover how much it would cost because we don't know as at the moment the wealth being left by people is coming down, we don't know how many non-doms we'll be.

The details have to wait till whatever budget you're going to do it in the next parliament. We won't know until next year what the financial outlook for the next government will be. Alistair Darling hasn't done his 2009 budget yet and Alistair won't start predicting a 2010 one.

George Osborne certainly can't do the same thing. The one thing we do know is, for example, that the Brown government will leave behind a bill to pay the interest on the national debt, which will exceed what we're proposing to spend on schools in this country. The sheer interest on the debt will be a major item in anybody's budget and there has to be some credible plan for getting the whole burden of debt on the economy down to some realistic levels.

ANDREW MARR:

Which means …

KENNETH CLARKE:

And Alistair's got to do that, I think, in the forthcoming budget because we'll have terrible troubles if people look at his next budget and think it's as incredible as the one he produced in November because we'll have more trouble with sterling, we'll have more trouble with selling bonds and so on - all the things which undermined Gordon Brown's tour recently.

ANDREW MARR:

But that means that taxes are going to have to go up quite quickly and quite sharply to start to pay off this. All spending is going to have to be slashed back. Does that mean that if the government propose tax rises that your party is likely to support them?

KENNETH CLARKE:

Well the last tax rise that caused controversy was raising the top rate of income tax to 45% for people earning over £150,000 a year, and we had to respond by saying we don't think it's likely we're going to be able to reverse that. I'm not sure they will raise taxes.

If you go back to the November budget, they always call the autumn budget the pre-Budget Report for some silly reason, we have two budgets a year from New Labour. We have for some time.

But in that, there was a leak at the last minute showing they intended to put VAT up to 20% after its temporary decrease to 15%, and obviously somebody at the last minute insisted that got taken out. Now whether that'll come back in again in the next budget, I have no idea.

ANDREW MARR:

Okay.

KENNETH CLARKE:

Brown obviously wouldn't wear it and they went in for fancy figures for growth instead, which nobody believed when he declared them and which Alistair has rather sheepishly acknowledged he doesn't believe now. So we wait to see, but the last tax increase we had to acknowledge. It's not credible to think of reducing it again.

ANDREW MARR:

Can I ask you, finally, as an old parliamentary hand what you make of this slew of stories about MP's expenses and double homes and triple homes and all the receipts that we know are coming out. A dreadful time for the House of Commons.

KENNETH CLARKE:

It is dreadful. I mean it's made people more skeptical about politicians than I ever recall. People should be skeptical about their politicians. Don't regard them as heroes.

But now we have an exaggerated public view that they're all thieves, they're all rogues, they're all lining their own pockets. I now get more modest because I get shocked by what comes out. So two thirds of them, I'm quite sure are doing nothing improper at all - at least two thirds, I hope.

There is a good case for having an allowance for a second home, as there has always been a case for giving some expenses - as it's usually called - for anybody who has to live away from home or in a second home for any sort of work. But if you look at what's been done to it, it needs to be sorted out now. We can't keep drifting on with more inquiries into it.

ANDREW MARR:

Okay.

KENNETH CLARKE:

I hope the party leaders will get together, as David Cameron has said, and sort some way of getting rid of the abuses as quickly as possible.

ANDREW MARR:

Ken Clarke, thank you very much indeed.

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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