PLEASE NOTE "THE ANDREW MARR SHOW" MUST BE CREDITED IF ANY PART OF THIS TRANSCRIPT IS USED On Sunday 20th March Andrew Marr interviewed Chancellor of The Exchequer George Osborne ANDREW MARR: Now listening to that was one of the men who was with the Prime Minister last night at the Cobra meeting and has been talking to him again this morning, the Chancellor George Osborne. Welcome. Can I ask what your understanding is, the government's understanding is of the legal position as far as the UN is concerned because if it turns out that this is a long-running effectively guerrilla war on the streets and that a lot of people are being killed by Gaddafi people inside Libya, and yet we can't hit them just from the air, is your understanding that we could send in ground forces at least for a short while? GEORGE OSBORNE: Well we are enforcing a United Nations Resolution, a resolution that actually was supported by many Arab countries and African nations as well. ANDREW MARR: Yuh. GEORGE OSBORNE: And the resolution is very clear about what we're there to do. We're there to enforce a ceasefire, we're there to protect the civilian population. We are not there to put in an occupying force into the country. ANDREW MARR: It says very specifically there can't be an occupying force, but what I wonder is whether that allows, is your understanding, that would allow, ground forces to go in at some point if it's impossible to get rid of the Gaddafi regime from the air, which seems quite likely? GEORGE OSBORNE: Well we are not considering ground forces at the moment. We are undertaking operations from our Navy through the submarine launched cruise missiles, from the RAF and the Tornado planes that flew missions last night. And I think we should all acknowledge the incredibly dangerous and brave job that those airmen and sailors and soldiers are doing for us. And indeed I should say, by the way, journalists who are reporting on this from places like Tripoli on our behalf. But we are enforcing the United Nations Resolution and we are acting as part of an incredibly broad international coalition of nations from around the world - not just the West - who are very clear that the killing has to stop and this is about protecting civilian lives. ANDREW MARR: To what extent is there a sort of medium or longer term plan about what to do next though because quite clearly Gaddafi is using human shields to protect some of the places that we would want to hit? There can be a very, very long period where the no fly zone is effective, but actually inside Libya Gaddafi is still in control, still able to do what he wants. What happens then? GEORGE OSBORNE: Well I think this is a little bit of speculation at this stage. I mean the immediate task is to enforce the United Nations' will. And one can, you know without speculating too much about what's happening today, it seems fairly clear that Colonel Gaddafi was making an attempt to occupy Benghazi in that space that Alan Little was talking about … ANDREW MARR: Yes, sure. GEORGE OSBORNE: … and was not able to do that. So we've already had some effect, but we've now got to make sure that the will of the United Nations is felt, that the will of international law is felt. You know as for the long-term, obviously we have made it clear - as have many others - that we would like to see Colonel Gaddafi go, but that is not part of the United Nations Resolution and it is for the Libyan people to decide their fate. And in the end what this is all about is creating the space for the Libyan people to make their own decisions about their future and not be under vicious military assault from their own government. ANDREW MARR: If this turns into, as seems quite likely, a pretty vicious war on the ground between Gaddafi's people and other Libyans, has there been any discussion in Cobra or inside the government about how to respond to that? GEORGE OSBORNE: Well we have a United Nations mandate to protect civilians. The mandate specifically refers to Benghazi. I'm not going to speculate on future military operations, not least because it might endanger the lives of those carrying out those operations. But I don't think the Libyan government and Colonel Gaddafi should be in any doubt that we will enforce the will of the United Nations. Nor should people be in any doubt that those now fighting on behalf of Colonel Gaddafi are in defiance of international law. There will be an international criminal process after the events and that should be well heard by people who are currently siding with Colonel Gaddafi. ANDREW MARR: But does that not simply mean that he is then as it were trapped, he's up against a wall, he's got nowhere else to go? GEORGE OSBORNE: Well … ANDREW MARR: And we know what kind of man this is and he will fight as long as he is able to carry on fighting? GEORGE OSBORNE: Well the sadness is he's had plenty of opportunities to find a way out … ANDREW MARR: (over) Yeah, hasn't taken them. GEORGE OSBORNE: … and hasn't taken them. You've got to remember this started with peaceful demonstrations by people in Libya wanting change and they were never given that opportunity, unlike in some other countries like Tunisia and Egypt, to effect that change. And of course even in the last couple of days when we all heard Colonel Gaddafi say, "I'm going to obey the United Nations, there's going to be a ceasefire", and lo and behold on the ground, he was advancing towards Benghazi. So we will judge him by his actions, not by his words. And I think we should also treat with some caution you know some of the things we see on Libyan state television because I know that our military planners are taking absolutely every precaution to try and avoid any civilian casualties and the targets last night were very specifically military targets around the … connected with the Libyan air defence system. ANDREW MARR: In your understanding of it, does the UN Resolution allow us, for instance, to attack Gaddafi's tanks or soldiers on the ground as well as the air defence position? GEORGE OSBORNE: Yes, that's our understanding of the resolution and … ANDREW MARR: So if you do Gaddafi or they see Gaddafi tanks moving around, moving somewhere, we can attack? GEORGE OSBORNE: Well the operation last night involving American and British forces - and we also had the operation from the French earlier in the day - our operation was specifically targeted at the air defence network, to take that down, so that there can be a no fly zone, so that other countries can take part in that no fly zone. And again, I stress this is not just the US, Britain, France. ANDREW MARR: Sure. GEORGE OSBORNE: You know at the meeting in Paris yesterday, you had people from Morocco, you had people from the Arab League, you had people from Qatar. The people of Lebanon, the government of the Lebanon were the sponsors of the United Nations Resolution which we're now enforcing. ANDREW MARR: But the resolution does say very specifically the job to do is to protect Libyan civilians from attacks by Gaddafi's government. GEORGE OSBORNE: (over) Yes. ANDREW MARR: Is it the case that there is no more beyond simply dropping some bombs and missiles on Libya that can be done to protect those people? GEORGE OSBORNE: Well again I don't want to speculate about future operations, but I don't think anyone should be in any doubt we're here to save lives, we're here as an international community to protect the civilians of Libya, to give them the space to determine their own future. And I think this is actually why we have international institutions like the United Nations. This is actually the United Nations working as it was originally conceived sixty odd years ago, and I think that makes for a better world, a world where international law, the writ of international law is felt. ANDREW MARR: And we'll see, will we, British jets over flying Libya to enforce that no fly zone in the days and weeks ahead? GEORGE OSBORNE: Well there are going to be further British contributions to what is going on, but also contributions from other countries. And of course you know David Cameron, with Nicolas Sarkozy, the two world leaders who were right at the forefront of calling for this action. And if I could also say the Foreign Secretary, William Hague, who has had some rough press over the last couple of weeks has actually done an incredible job in bringing this Coalition together, and at the same time getting British people out of Libya before a lot of this started, and I think that should be acknowledged too. ANDREW MARR: One final go on the question of what some of the commentators would call Mission Creep. That we start off from the air and it ends up inevitably with troops on the ground; it's going to end up one way or another with non-Libyan military, whoever they're from, actually inside Libya in order to protect civilians because there is no other way of doing it. GEORGE OSBORNE: Well the UN Resolution does not authorise an occupying force. There are going to be … I think you know everyone needs to understand this, and it was discussed at the full cabinet we had on Friday. Of course when you start this, there are dangers and uncertainties ahead and you should always be conscious of that when you make use of military force. But we have thought long and hard about this as an international community. We have brought the broadest possible coalition of states from around the world. We are acting actually on the urging of the Arab League themselves and I think you know … ANDREW MARR: (over) Do you think we'll see Arab countries involved directly? GEORGE OSBORNE: Well I hope we do see that. And I think people will see that this is not, as I say, David Cameron or the British or the Americans acting alone. This is the whole world community acting under international law to do what is necessary, what is legal and what is right. And I would just end by saying this. Right a) because I think as human beings we should step in when we are able to, to stop the slaughter of civilians; but also right in the UK's interest, because we know that Colonel Gaddafi in the past has funded terrorists that have attacked our country, was responsible for the biggest terrorist atrocity in our land - the shooting down or the blowing up of the Lockerbie jet; and … ANDREW MARR: (over) And then we hugged him tight. GEORGE OSBORNE: Well you know mistakes were made after that, but let's be clear this is a man who it's not in Britain's interests that we allow him to continue doing what he was doing over the last few days. ANDREW MARR: We're going to be talking a little bit later about the Budget, but just on this. Do you not look at what's going on and say this is an even more dangerous world perhaps than we recalled and we have to think again about some of those defence cuts, including things like aircraft and so on? GEORGE OSBORNE: Well I would say actually that the Chief of the Defence Staff, the person who runs our military, has made it clear that what we're doing in Libya does not in any way diminish what we can do in Afghanistan and we're able to make use of equipment that we've purchased over the years. And indeed, if you look at the future defence budget, we are planning to have the fourth largest defence budget in the world with a whole range of new military equipment, including for example Astute class submarines, built in John Hutton's former constituency, which are going to be able to launch Tomahawk cruise missiles and the like. So we are building … not only using what we've purchased in the past, but we are creating a modern fighting flexible force for the future as well. ANDREW MARR: Alright, for now thank you very much indeed. Chancellor. ANDREW MARR: George Osborne's Emergency Budget last June, you may remember, laid out the framework for the austerity plan, confirming that he would cut fast and deep, just as we've been saying, and adding approximately £40 billion of tax rises and spending cuts to the £70 billion previously planned by Alistair Darling. Now on Wednesday Mr Osborne's going to present his second budget to the House of Commons, unveiled against a difficult backdrop: concern about the UK's faltering emergence from the recession and, as we said, much uncertainty about the global economic outlook. And the Chancellor is with me for the second time. Welcome. Let me start just looking at the outlook. The OECD and the IMF have downgraded likely growth to about 1.5%, I think, this year and so on. Are we going to see the Office of Budget Responsibility making that same sort of shift? GEORGE OSBORNE: Well it's an independent Office for Budget Responsibility. ANDREW MARR: But you know what it's about to say. GEORGE OSBORNE: Well I do know what it's about to say, but that's because they've told me in advance, but it is completely independent. Robert Chote, who used to run our Institute of Fiscal Studies, will be making this forecast. And so when Ed, just sitting here a minute ago, says "these are George Osborne's forecasts", actually that's one of the big changes since the days when Ed Balls was trying to run the economy, which is these things are done independently and it would be completely wrong for me to come on the programme … ANDREW MARR: (over) Okay, but … GEORGE OSBORNE: … three days before the Budget and start announcing the numbers from an independent body. ANDREW MARR: But it is going to be a bumpy and rough year. I mean not only because of weakness in the British economy, but also problems around the world. There's the Japanese issue and so on. It's going to be a very tough year, isn't it? GEORGE OSBORNE: Well I think we have to be realistic about where we're coming from as a country. We've come out of the deepest recession since the 1930s. We've had the biggest banking crisis in our history, arguably, and we've got the largest budget deficit of any major economy in the world. So you know those are the challenges which were present the moment I walked into the job. We've also got the additional headwind now of the oil price. So you know these are all issues, but that was why it was so important in the Budget last year to undertake the rescue mission of putting in place a credible plan for deficit reduction that provides us with economic stability. So I'm not, I'm not a European finance minister who is currently terrified of the bond markets, worried about my sovereign debt sustainability. And if you think these things aren't real, actually later this week we're going to have a meeting of European heads of government to discuss precisely these issues in some other European countries. So we've taken Britain out of the fiscal danger zone. That is reflected in the interest rates that families in Britain and businesses in Britain pay compared to, for example, families and businesses in countries like Portugal or Ireland. ANDREW MARR: Yuh. GEORGE OSBORNE: But now we've got to move from rescue to recovery and reform. ANDREW MARR: Well is it time for that move is the question really because if … You know we've got rising unemployment, particularly serious youth unemployment, we've got rising inflation and we seem to have a slowing down pace of growth. Given all of that, is there no part of you that says well actually it is time to take my foot slightly off the accelerator on cuts and be very, very careful that we don't push things back into recession? GEORGE OSBORNE: Well I think that would be a huge mistake for this country. We would lose economic stability. We would be back in the mess of wondering what's going to happen tomorrow to Britain's credit rating … ANDREW MARR: (over) So that's not going to happen. That's clear, okay. GEORGE OSBORNE: That is not going to happen. But let me also say this, Andrew. You know having undertaken the rescue mission last year, I don't have to come back and ask for more this year. So I can say in the Budget later this week, I'm not going to be asking for more tax increases or more spending cuts. We've asked what was required of the British people in last year's Budget, and that enables us in this year's Budget to move on to putting in place the policies that will help Britain compete, help Britain create jobs, help British create growth in the future. Because frankly one of the things that has been revealed by the recession is that Britain has been losing ground for a decade or more. ANDREW MARR: (over) You … GEORGE OSBORNE: (over) And you for example, just very quickly, you mentioned youth unemployment. Youth unemployment was rising before the recession. ANDREW MARR: Sure. GEORGE OSBORNE: And actually another focus of the Budget … ANDREW MARR: (over) Are you going to do something about … I mean because you removed the credits being paid to teenagers to stay on at school. Are you going to do something specifically for teenagers who have this terrible problem? GEORGE OSBORNE: Well we are going to provide additional help to teenagers through apprenticeships, through work experience places. We're going to build more university technical colleges which help people with vocational education. And this is addressing one of the long-term weaknesses of Britain - that we've never been able to create across on a wide scale high quality vocational education, so that we produce the technicians … ANDREW MARR: (over) Will you find more money for this? GEORGE OSBORNE: (over) … and the people with the vocational skills in the future. Yes, we are able to find resources for this within the budget because it's such a priority. And what I'm saying is yes we've got to deal with the challenges of now, but we've also got to address the fact that for a decade or more Britain has been losing ground against many of our competitors. You know our exports have fallen while Germany's has risen. ANDREW MARR: Sure. GEORGE OSBORNE: In our own country, for every ten jobs that businesses created in the South East over the last decade, only one was created in the North and the Midlands … ANDREW MARR: (over) You've … GEORGE OSBORNE: … so these are the longstanding, deep-seated problems that this Budget is going to start addressing. It's going to have far-reaching reforms that equip the British economy for the future, so we create the jobs and growth that people want to see. ANDREW MARR: You've rather mocked the Labour phrase about the "squeezed middle", but if you look at what's happening to incomes, if you look at the effect of inflation and static, most people not getting any kind of pay rise and so on, there is a very serious squeezed middle. Part of that is the pretty shocking price of petrol and diesel at the moment. Now it's been suggested, you've suggested, you've hinted that you can do something about this. So can I ask you directly whether you are going to not impose the next increase on petrol? I know you're not going to do anything about VAT, but what about fuel duty? GEORGE OSBORNE: Well we do have a fuel duty rise planned for people … ANDREW MARR: Yes. GEORGE OSBORNE: … planned actually by Ed Balls and his Labour colleagues - not something he mentioned in his interview. And of course I'm looking very carefully at that, seeing whether we can afford to do something about that. I'm afraid you're going to have to wait for Wednesday to hear what I'm able to do. But of course I completely understand that people are feeling under a lot of pressure because of the rising oil price and the like, and also because of what we've been through. You know I think it's very important to just take a step back and realise what Britain has been through economically … ANDREW MARR: (over) Sure you've said that, you've mentioned this point. GEORGE OSBORNE: (over) Well I know, but it is … these are the contexts. ANDREW MARR: (over) You've said it. But can I just ask you … GEORGE OSBORNE: (over) So you know when you talk about, when you talk about the pressure on family budgets and incomes, that is partly because of what we've been through and now having to pay the price of a decade of overspending, a decade of mistakes that were made, a decade of failing … (Marr tries to interject) - to use the phrase I've used in the past - to fix the roof when the sun was shining. ANDREW MARR: (laughing) Yes, we've heard that one before. So you're going to do something on fuel clearly. What about the people right at the bottom? There's an aspiration in the coalition agreement, which you were party to, to take people out of tax up to the level of £10,000. Are you going to be able to make any further advance on that given the seriousness of the economic situation? GEORGE OSBORNE: Yes, we are going to be able to make a further advance on that and I'm absolutely committed to a real increase in the personal tax allowance each and every year that takes low income people out of tax altogether. It also helps people right up the income scale because we're reducing their income tax bill as a result. And actually it's worth remembering that from this April we are going to be cutting the income tax bills of over 20 million people, we're going to be freezing the council tax for many millions … ANDREW MARR: Okay. GEORGE OSBORNE: … we've got increases in the child tax credit for the poorest. So I am, within the confines of having to deal with one of the world's biggest budget deficits, taking steps to help people today with the cost of living whilst … ANDREW MARR: (over) In the context … GEORGE OSBORNE: … also dealing with the long-term problems that we were talking about. ANDREW MARR: In the context of your growth strategy, are you frustrated about how much legislation from the EU in particular hampers your ability to set firms free, or however you describe it? GEORGE OSBORNE: Yes, of course I'm frustrated by that. And I think there's an interesting moment coming in the European Union, which will be discussed actually at various meetings of European ministers this week, which is does Europe really want to create jobs for its citizens in the years ahead? And when it looks at what's going on in Asia, looks at what's going on elsewhere in the world, I think Europe's got to understand it's got to be more competitive and we can't afford to regulate ourselves out of jobs, out of growth. ANDREW MARR: A fight to be had. For now, thank you very much indeed Chancellor. INTERVIEW ENDS
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