Clegg: "The chemistry's good"

On Sunday 19 September Andrew Marr interviewed Nick Clegg, Deputy Prime Minister and Leader of the Liberal Democrats.

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

ANDREW MARR:

Well if Liverpool is close to her heart, it's also highly significant for the Liberal Democrats. They are a powerful force on the council here, and the party's advance in big cities like this has been one of the keys to its success in recent years. But could all that come to an end now we've got a Lib-Conservative coalition at Westminster? Reassuring his councillors and his activists that he's not selling them out is one of Nick Clegg's big jobs at the conference, and he is with me now. Welcome.

NICK CLEGG:

Good morning.

ANDREW MARR:

Good morning. You've said that you would like this party to sort of take ownership of the coalition, which is after all Conservative Party dominated. Is that really realistic that people out there who've come to conference, that they're going to kind of feel warm about a Tory led government?

NICK CLEGG:

I'm certainly not denying of course that people by the way in both the parties, in both the Conservative and the Liberal Democrat parties, are still feeling their way in this sort of new world of coalition politics. But what I think is if you're in a coalition government, much as if you're in any government, you can't sort of half do it. You either do it properly or you don't do it at all. And I think that actually if you look at the coalition agreement and if you look across the piece at the kind of things we're doing, this really is a … This isn't a Conservative sort of manifesto blueprint for the government; it's not a Liberal Democrat manifesto blueprint for the government. It is a blend and that's what coalition politics is all about. I guess one of the points I'm making this week is that all of us - you know in the press, in society, in the political parties - are getting used to something which is very new, and I think that will take some time. But I don't think that you make it sustainable, successful by trying to sort of constantly find the divisions within the arrangement. You've got to make sure that as a whole it works, it works effectively.

ANDREW MARR:

Sure. And David Cameron himself, you said some fairly disobliging things about him inevitably during the course of the election. You've now …

NICK CLEGG:

I think we all do in election campaigns.

ANDREW MARR:

I know, but you've now worked with him for a while. What do you actually make of him? How close are you?

NICK CLEGG:

Well I think in terms of a working sort of partnership, we have a strong working partnership, which is of course what you want in a coalition government.

ANDREW MARR:

Do you like him?

NICK CLEGG:

Well we work very well together. I don't think either of us go into this sort of looking for sort of friendship. That's not the point. The point is do we both understand that no party won the majority in the election? The British people said very clearly they didn't want to give the keys to No. 10 to any single party. So we have to work together in the national interest; we want to work together in the national interest. And we both approach that task I think practically, without dogmatism, not being doctrinaire about things, making sure that we accommodate each other's concerns and values. And, yeah, that means of course that behind closed doors some …

ANDREW MARR:

(over) The chemistry?

NICK CLEGG:

The chemistry's good. Of course the chemistry's good. But it's a chemistry based on an insight, which is that in order to get us out of the problems that we have inherited from Labour - and they are acute, acute problems - in order to fix those things and point the country to a better future, we need to work well together for this parliament.

ANDREW MARR:

This seems to me in many ways a conference before the storm in the sense that the actual level of the cuts, although it's been talked about in abstract terms, hasn't yet been felt or spelt out.

NICK CLEGG:

Sure.

ANDREW MARR:

We're still waiting for that. Did you really have an intellectual conversion from what you were saying during the election campaign about the danger of imposing this level of cuts, creating a double dip recession?

NICK CLEGG:

Well I mean let's remember, I think there's a bit of mythology which has arisen about this. What I said, what Vince Cable said, what the Liberal Democrats said all the time is that … Do you remember, the Labour and the Conservative parties were saying … Labour was saying you should never, ever start early with deficit reduction. The Conservatives were saying you have to under all circumstances. We were the only party saying over and over again that the timing of deficit reduction is a relatively technical issue which has to be governed by economic circumstances, not by …

ANDREW MARR:

(over) Well you did say it shouldn't happen now; it's too early.

NICK CLEGG:

No, hang on. If I can just finish. What we said it shouldn't be governed by political dogma. It should be governed by economic circumstances. And I think what people expect of us - quite rightly - is that when circumstances change, as they have dramatically, that you also make sure that you adapt your economic plans.

ANDREW MARR:

Well you see this is what people find slightly confusing because the Governor of the Bank of England, for instance, says that the was saying nothing to you that he hadn't said to everybody else; that the situation hadn't dramatically changed in this period. I mean surely the honest answer is that you had to do this deal, you had to accept this level of cuts and this timetable to have the coalition happening at all …

NICK CLEGG:

Well …

ANDREW MARR:

… and that was really what drove it?

NICK CLEGG:

I think the history books will show that on the Sunday evening during the period, the weekend immediately after the General Election, there was an emergency ECOFIN meeting when there was a very real fear that the Eurozone was going to go up in flames. There was a profound sense of systemic instability right on our European doorstep and it was quite, quite clear that the level of …

ANDREW MARR:

(over) And that was the moment, was it, for you?

NICK CLEGG:

Well I think this had been brewing for some time obviously because we'd seen the events in Greece and in Portugal, in Spain. There was a clear sense that the bond markets were going around ruthlessly from one government to the next rattling the cage, seeing what the weaknesses were, and that they were waiting to see what the British government …

ANDREW MARR:

(over) So actually during the campaign itself, you were changing your mind?

NICK CLEGG:

(over) But can I, can I just finish? So what we have done to suit those circumstances is to accelerate the deficit reduction plan which we inherited from Labour. But what I think we cannot do, and I think the sort of … the dishonesty of the Labour Party leadership candidates isn't allowing us to have an honest debate about this. They were planning - let's be very clear about the perspective - an 8 year deficit reduction plan.

ANDREW MARR:

Yes.

NICK CLEGG:

We have shortened that to 5. They were planning 20% cuts in unprotected departments. We're planning 25%. So this debate at the moment that says one alternative is to do nothing as a pain free option, as per some of the Labour leadership candidates; and, on the other hand, the cuts are going to be unthinkingly imposed next Tuesday. Neither of those extremes are true. I think we've got to be reasonable about this.

ANDREW MARR:

Sure.

NICK CLEGG:

We have slightly accel… We've accelerated the timetable because we judge it's right to get this job done in a parliament because it's not right to ask future generations to start to continue to pay off the debt interest payments on the debt that we have racked up; money which could be used by them for their own schools and hospitals.

ANDREW MARR:

But you, and George Osborne indeed, described the first budget and the proposals as "progressive". Since then we've had the Institute of Fiscal Studies, we've had the TUC, we've had all sorts of outside bodies looking in detail at the numbers, and people in the bottom 10% by income are going to be paying vastly more proportionally than people in the top 10%. How can that possibly be described as progressive?

NICK CLEGG:

What we have … Well firstly, and without getting into sort of the undergrowth of all the statistics, we don't agree - reasonably, I think - with some of the assumptions on some of these analyses which don't, for instance, take into account the budgets that we're going to have between now and 2014 and 2015. Without knowing that we're going to do in budgets which haven't yet, you …

ANDREW MARR:

(over) IFS figures are pretty clear and pretty straightforward.

NICK CLEGG:

(over) Well no, the IFS makes a series of assumptions which simply ignores what we're going to do in future budgets. So, for instance, we have been very clear, I have been very clear that our ambition to make the tax system ever fairer - you know it's our government, not Labour government, it's our government - stop this grotesque injustice that under Labour you could pay as a multimillionaire less tax on your investments than your cleaner did on their wages. We have raised the personal allowance on income tax. We have got this objective which we'll introduce over time to take more and more people on low pay out of paying income tax altogether. That hasn't happened and that's not being included in the analysis. The other thing which is not included in the analysis, which is where the welfare reform agenda comes in, is the importance for progressive reasons to try and reduce long-term dependency and increase the incentives to work, and you do that by of course making the tax changes I describe but also increasing the incentives to seek to work in the first place.

ANDREW MARR:

Yes and yet …

NICK CLEGG:

And none of that … It's an important point, this … None of that is included in the statistical analysis.

ANDREW MARR:

I'm going to come back on all of those points. But when it comes to the actual welfare cuts …

NICK CLEGG:

Yuh.

ANDREW MARR:

… I mean those are going to happen and they're going to happen quickly. Of course the IFS and everybody else can't make guesses and judgements about budgets in the future, but those are going to happen. Do you dispute the figures that they're suggesting about the effect of those cuts on the bottom 10%?

NICK CLEGG:

I think they're making some assumptions about how households use income from benefits, which begs all sorts of assumptions, and many experts will tell you there are all sorts of assumptions there. Do I accept? Of course, I mean let's just be …

ANDREW MARR:

Let's be straightforward about it, yeah.

NICK CLEGG:

Well no, of course I accept this is difficult. As it happens, it would have been extremely difficult under Labour. Many, many of the cuts that we are now having to introduce are cuts which were already planned. We're sort of delivering …

ANDREW MARR:

Alright.

NICK CLEGG:

But no, this is an important point. You have to ask yourself what is fair about not doing these things, what is fair about inaction, what is fair about constantly saying manana, manana, manana - we'll do it another time when someone else has to take responsibility? I think there's nothing fair about asking future generations to pay off our debt interest when we could be using that money on public services. And I also think …

ANDREW MARR:

You mentioned …

NICK CLEGG:

… to be fair, I think people have overlooked some of the radical things we have already introduced. The guarantee to pensions, that pensions are going to increase.

ANDREW MARR:

I can hear a list coming and I'm going to …

NICK CLEGG:

Well it's an important list.

ANDREW MARR:

I know - sure, sure. But …

NICK CLEGG:

You can dismiss the list, but it's an important list of measures - the increase in child tax credit …

ANDREW MARR:

Okay.

NICK CLEGG:

… which are explicitly designed in these difficult times to make sure that we protect the elderly, protect the young, protect the vulnerable.

ANDREW MARR:

What about middle class, so-called middle class credits - including that one, including payments for children, some of the payments for really relatively well-off older people? They're going to have to go, aren't they, in this climate?

NICK CLEGG:

I think we do need to look at benefits in the round. I clearly don't think it's fair or right to only look at the benefits which are concentrated on people on lower incomes and lower means. Clearly benefits which go up the income scale need to be looked at. I think it would just be … I think people wouldn't understand how you can possibly only target one bit of the benefit system but not …

ANDREW MARR:

(over) ……………. universal, it has to be.

NICK CLEGG:

(over) … but not those parts which benefit people who are less in need. So we are looking at it in the round, yes.

ANDREW MARR:

Okay, you mentioned tax just now. We certainly have a situation in this country where a lot of people right at the top of the tree with very clever tax lawyers are able to avoid paying the taxes that in justice most of the rest of the country think they owe. Are you going to do anything about that?

NICK CLEGG:

Yes we are, and it's one of the things that I always … I said this constantly in opposition. I was so frustrated that Labour didn't do more to make the tax system fairer - including by coming down much more heavily on people who were evading or avoiding tax. And I think you know …

ANDREW MARR:

What can you do about this?

NICK CLEGG:

Well you hear a lot about people who cheat the benefit system. I want us to be - and we will be - as hard on people who are tax cheats as people who are benefit cheats, and that's why I'll be making announcements later today, which we'll provide more detail on, which will increase the number of people who are being prosecuted, which will go after people who are putting their taxes into offshore havens, which will put more resources into the Revenue & Customs; to really make sure that people who have to pay tax pay that. You cannot ask people, millions of people in this country, to have restraint in pay, to have their pensions looked at again because we're having to deal with the deficit and allow people who can pay an army of lawyers and accountants from getting out of paying their fair share of taxes. We will change that.

ANDREW MARR:

And can I be clear about this because there's two different things? There's people who are breaking the law now …

NICK CLEGG:

Yuh.

ANDREW MARR:

… and you can go after them. Fine …

NICK CLEGG:

Evasion.

ANDREW MARR:

Yuh. What about people who aren't breaking the law, but are managing to find ways of avoiding tax? Can you change the law to go after them too?

NICK CLEGG:

You have to do both, absolutely. You need to close the many loopholes which allow. as you say, perfectly legal but I find morally questionable tax avoidance on an industrial scale. And we've done some of that already. That's why, for instance, we raised capital gains tax, so you didn't get this standing invitation (as we had under Labour) for people on very high incomes to pay themselves capital rather than income. But at the same time, of course, you make sure that you beef up the resources, as we will in our announcement today in a big and significant way, to recoup billions of pounds that should be you know in the government's coffers to help deal with the deficit.

ANDREW MARR:

Let me ask you about another spending commitment, which is the commitment to get up to the … You're going to the United Nations after this conference to do our bit, our percentage promise - I think it's by 20...

NICK CLEGG:

13.

ANDREW MARR:

…13 for third world and for …

NICK CLEGG:

0.7%.

ANDREW MARR:

The 0.7%. Is that still an absolutely hard commitment?

NICK CLEGG:

It's an absolutely hard commitment that we're going to deliver the .7%.

ANDREW MARR:

By that date?

NICK CLEGG:

Well that's the date we've got and that's the date that we're aiming for. But the key thing is to honour the promises we've made to the developing world, and the Millennium Development Goal Summit which I'm going to in a couple of days time is in a sense all about trust because we made all these promises 10 years ago, the developing world, all these grand promises - the rich world, that is - saying we were going to increase the amount of money we provide to aid up to .7% of our national wealth. Bluntly lots and lots of countries haven't done that. This government will do that.

ANDREW MARR:

The reason I'm asking you about it is because you know all budgets are under pressure and you know it's a relatively near goal, that one. But that is absolutely nailed down in cast iron?

NICK CLEGG:

.7% will be delivered by this government.

ANDREW MARR:

By 2012? By 2013?

NICK CLEGG:

Well that's what we're aiming for. We're looking at the way in which that money is spent - to make sure it's spent as effectively as possible. I'll be making further announcements today, for instance, as to how we're going to increase further aid to the effort in Pakistan.

ANDREW MARR:

Okay, lots to talk about. Can I move onto defence …

NICK CLEGG:

Yes.

ANDREW MARR:

… and Trident? You would like the Trident decision to be taken probably after the next election. How is that going?

NICK CLEGG:

Well we've been ever more open than that, and in our coalition agreement we state very clearly because you know we don't … the two coalition parties don't see entirely eye to eye on this. We, the Liberal Democrats - I've argued this for a long time now - feel that there are alternatives to complete like for like replacement of Trident which need to be explored.

ANDREW MARR:

This is the kind of thing that Chris Huhne was talking about - cruise missiles and all of that sort of stuff?

NICK CLEGG:

Yes, I mean you know there are alternatives. But we also accept - and you know the Conservatives are very adamant about this, that they want to proceed with the replacement of Trident but subject to what we insisted on was a review of exactly you know how you could make it affordable. Now that review hasn't been complete yet. I haven't seen it yet. The Prime Minister hasn't seen it yet. We will need to debate in the next week or two exactly where we go on this decision. There's lots and lots of stuff …

ANDREW MARR:

(over) I'm sure there is and that's why I'm asking about it.

NICK CLEGG:

But none of it has actually been collectively discussed yet.

ANDREW MARR:

Right. But as we sit here and now, the possibility that Trident will not be formally agreed to be replaced (like for like replacement) during this parliament, and that therefore it could go eventually, is still on the table?

NICK CLEGG:

Well I think everything is possible for the simple reason that the Ministry of Defence would need to fund this replacement from its own budget. That much is clear and that's perfectly right. But of course there are huge other pressures on the Ministry of Defence's budget, so you do need to take in defence, as you do in every other area, very, very difficult … I don't think people would understand why we would sort of exempt Trident from the same financial pressures when people are having some of their benefits you know qualified in different ways. I don't think that would be fair, I don't think that would be reasonable. So I think we are looking at this all in the round. You can't sort of keep a whole lot of things on the table, but take something else completely off the table. I don't think that's right.

ANDREW MARR:

You mentioned benefits again. Do you recognise the 4 billion figure that everyone's talking about?

NICK CLEGG:

The 4 billion figure - again you know we haven't sort of come to any decisions. Daily now, I read a huge amount of sort of speculation about what might be taken as decision which haven't yet been taken. And by the way, I think that's created a climate where arguably some people are developing fears which might even, dare I say it, turn out to be exaggerated because in a sense we have this vacuum - the decisions haven't been taken yet, people are …

ANDREW MARR:

Well I mean Danny Alexander said it could be more than 4 billion. I mean you know maybe he's just keeping his options open.

NICK CLEGG:

I'm simply not going to start getting into sort of precise figures when we don't know what they are yet.

ANDREW MARR:

Okay. But just to be clear, the universality of these benefits is something that's been looked at?

NICK CLEGG:

As I say, we're going to look at all benefits in the round. I don't think it's right, absolutely as a matter of principle, I don't think it's right only to look at benefits which affect people on very low income or low means and not look at benefits which go up the income scale. You have to look at everything in the round.

ANDREW MARR:

When you described the Iraq War as "illegal" in the House of Commons, was that a slip of the tongue?

NICK CLEGG:

Well it was a view that I held and hold. But since this government does not have a formal legal position on it, it's clearly a personal opinion and not a government one.

ANDREW MARR:

But it is your opinion?

NICK CLEGG:

It is my opinion, it is my opinion. But I totally accept that I'm speaking, if you like repeating something I have said many times before, but I am not speaking on behalf of this government.

ANDREW MARR:

Let's talk about the Liberal Democrats themselves now. The party, you were up to 30% at one point during the election campaign. You're now down at around 15%. Some of your colleagues say you could be down to 5% in the opinion polls before you go through the fire.

NICK CLEGG:

Look, I'm not a great psephologist. I don't have a sort of great head for …

ANDREW MARR:

(over) Is that because it's an unthinkable thought? You grimaced.

NICK CLEGG:

No, it wasn't a grimace. It was supposed to be a sort of doubtful frown that it was necessarily going to happen.

ANDREW MARR:

Okay, alright.

NICK CLEGG:

What do I think, what do I think is happening? I think this is clearly a kind of long game. This is marathon, not a sprint. We are having to take as a government, we're condemned to take as a government some very, very difficult decisions on sorting out the public finances. And by the way, whatever the Labour leadership candidates say, they would have to as well if Labour was in power. Whatever government of whatever composition has to take difficult, unpopular decisions. They were planned by the previous government. We're going to have to implement a lot of them now in the new government. That by definition means you have to grit your teeth and hold your nerve and play it long and see the benefits of what we're doing over a period of time. I know that's not very familiar in politics because in our sort of 24/7 sort of media world everyone thinks you have to have instant results, instant headlines. But this is something where both coalition partners - the Conservatives and ourselves - accept that we're trying to not only do something difficult; we're also trying to do it in a new way as a coalition government. And that will take time for people …

ANDREW MARR:

That will take time.

NICK CLEGG:

… to see the merits of that.

ANDREW MARR:

To put it a different way then, you can see two outcomes for this coalition government: it's successful at the end of all of this and people say good old David Cameron, he has led a successful government, and they probably reward the Conservatives for that success; or it's unsuccessful and both parties go down together. Now either way it's hard to see the Liberal Democrats triumphing. How are you going to lead them through?

NICK CLEGG:

Well you missed out the obvious option, which I of course hope will be the case …

ANDREW MARR:

(over) It falls apart?

NICK CLEGG:

No. Which is that it is not only seen to be successful but that both parties share in that success. And that is one of the reasons why I'm saying now here in Liverpool - I accept it's not a message that is easily digested by people, but I think it's essential for that long-term strategy - if we want to have any credit for taking difficult decisions which prove their worth over time, you've got to take ownership of them now. You can't sort of …

ANDREW MARR:

And that goes for things like free schools, which you once described not that long ago as a "naïve idea", and yet it's now absolutely at the core of what you're doing?

NICK CLEGG:

Actually, as it happens, ask your researchers. I think my first speech …

ANDREW MARR:

I've got the quote. I'll dig it out. (laughs)

NICK CLEGG:

Well then they will tell you that my first speech as Leader of the Liberal Democrats was about Scandinavian style free schools. I passionately believe, I've even sort of co-authored books about this ten years ago. I went to visit schools in Scandinavia and Holland and I really … from then on, I really feel that what we need to do in our school system is do two things: increase the autonomy of schools - for all schools by the way, not sort of divide and rule which was the approach from Tony Blair in the first wave of academies. Basically give all the head teachers the freedoms to decide what is best for their children, combined with a much more progressive allocation of resources. And that's why in the coming weeks you will hear new announcements from an idea which I've been championing, we've been championing, the Liberal Democrats, for years - which is a pupil premium, extra money for disadvantaged children which follow them through the school system. So you marry autonomy in the classroom for the people who know best - the teachers and head teachers - with a progressive, fair financial settlement for children who need that extra bit of help. That is basically at the heart of our educational reform.

ANDREW MARR:

(over) And in this new politics which you're still experimenting with, how much leeway is there for your colleagues in the House of Commons and elsewhere to express worry and dissent? I'm thinking for instance about Vince Cable saying that the cap on immigration as proposed is going to be incredibly damaging for a lot of British businesses. Now everyone's saying well is that a split, is that an acceptable kind of dissent to express from inside the coalition? What's your view?

NICK CLEGG:

Well I think Vince was speaking quite clearly as the Secretary for State for Business and you know it's his role it seems to me in government to express the concerns …

ANDREW MARR:

So that was an acceptable level of concern to be expressed?

NICK CLEGG:

I'm not going to be sort of theological about this. What I'm saying is that for a business secretary to worry openly about the impact on businesses, which is in a sense the constituency which he is …

ANDREW MARR:

Representing.

NICK CLEGG:

… mandated to look after, I don't find surprising. And I think frankly if it was a Conservative business secretary, you'd probably hear similar reservations expressed.

ANDREW MARR:

We'll be hearing a lot more about all of that during the conference. Thank you for now very much indeed, Nick Clegg.

INTERVIEW ENDS

E-mail this to a friend

Printable version