PLEASE NOTE "THE ANDREW MARR SHOW" MUST BE CREDITED IF ANY PART OF THIS TRANSCRIPT IS USED On Sunday 10th April Martha Kearney interviewed Chief Secretary to the Treasury Danny Alexander MARTHA KEARNEY: Well parliament's now on its Easter break and members of the cabinet may be particularly grateful for some respite from the cares of office. Nick Clegg's admitted he feels like a "punch bag", still battered and bruised from the row over student tuition fees; and David Cameron's had to call a temporary pause to the government's health reforms and promise that any necessary changes will be made to get them through. Add to that evidence of a still lacklustre economy, and you can see why ministers might be feeling rather battle-weary. Managing a coalition brings further complications. Well I'm joined now by one of the lynchpins of that operation, the Chief Secretary to the Treasury. Danny Alexander, welcome to the programme. DANNY ALEXANDER: Thank you. MARTHA KEARNEY: Let me begin with something which is presumably in the treasury in-tray at the moment, and that's the vote that there was in Iceland - people there turning down a government offer to pay you back, to pay us all back for the money that was paid to British taxpayers in the aftermath of the banking crisis. You must be disappointed by that news? DANNY ALEXANDER: Well it is obviously disappointing that it seems that the people of Iceland have rejected what was a negotiated settlement. And of course we respect the will of the Icelandic people in this matter and we're going to have to now go and talk to the international partners with whom we work, not least the government of the Netherlands. It now looks like this process will … MARTHA KEARNEY: (over) Because they want their money as well, don't they, yeah.? DANNY ALEXANDER: Of course they do. It now looks like this process will end up in the court. There is a legal process going on, and we will carry on through those processes to try and make sure that we do get back the money that the British government laid out in past years. MARTHA KEARNEY: And this money is, what, four billion pounds? How much is it? DANNY ALEXANDER: It's a very substantial sum of money; it's several billion pounds. And that's something that was laid out under the previous government to bail out people in the UK who'd saved with Icesave and other banks. And we've tried to get a negotiated settlement with Iceland and we'd reached an agreement with the Netherlands, with ourselves, with Iceland. That's now been rejected. That of course is disappointing. It would have been preferable to have a negotiated outcome. It does now … MARTHA KEARNEY: So you'll have to pursue it in court, will you, which could really drag on, couldn't it? DANNY ALEXANDER: Well there is already a legal process going on through the EEA court and that's something that we will be looking at joining in with. And once that process is completed, we'll seek to recover our money in the normal way. MARTHA KEARNEY: And do you think you are going to get the money? DANNY ALEXANDER: Well, look, we have an obligation. We have an obligation to the people in this country who saved with those banks. We have an obligation now to get that money back, and we will continue to pursue that until we do. MARTHA KEARNEY: Which is money that is badly needed, isn't it, for the public finances? DANNY ALEXANDER: Well of course. I mean you know we have a very, very difficult financial position as a country. We were left with an enormous budget deficit by the previous Labour government. That's a mess that we have to clean up and we're taking difficult decisions to do so. This money of course would help. MARTHA KEARNEY: Okay. And another sum of money, which presumably would also help, and that's the money that we're going to have to use to underwrite the Portuguese financial system - another fallout from the banking crisis. Why are you doing that? DANNY ALEXANDER: Well the situation in Portugal is a bit different. We obviously as the UK government and as a country, we want to see the Eurozone successful and healthy. It's our biggest trading partner by far in the world, and that's why we've worked with other European governments to try and get the changes that we want to see there. MARTHA KEARNEY: Of course you're a big supporter of the Euro. But why - a lot of people will be wondering, including Conservative backbenchers - if we're not in the Euro, why have we got roped up to this other financial stability mechanism, which means that we're ending up bailing out Greece, Ireland, Portugal? DANNY ALEXANDER: Well of course we have obligations as members of the IMF, which we have across the entire world. We have obligations as members of the European Union. I think what people should be reassured about is these are contingent liabilities. It's very, very unlikely that the UK will have to pay any actual money out because … MARTHA KEARNEY: (over) No, but you still have to set it aside. So it's money that can't be spent elsewhere, isn't it? DANNY ALEXANDER: Well it's very unlikely that we'll have to pay any money out because of course that would depend on these countries not meeting their obligations to repay to the IMF and to the European Union. And it was quite … MARTHA KEARNEY: (over) And just clarify for us, how much money are we talking about? DANNY ALEXANDER: Well that remains to be seen because obviously the package is being negotiated. Portugal doesn't have a government at the moment. MARTHA KEARNEY: Four billion's being mentioned. Would that be about right? DANNY ALEXANDER: It could be of that order, yes in terms of a contingent liability. But the important thing … MARTHA KEARNEY: (over) It's a lot of schools and hospitals, isn't it? DANNY ALEXANDER: No, it doesn't affect schools and hospitals in this country at all. What this is is an obligation that we would only be called upon to pay out should it turn out that Portugal or other countries were unable to repay this money in due course. The money comes from the IMF, to which we've already contributed, or from the EU budget, lending on the back of the EU budget. It doesn't actually cost us anything. There is no cost to public services in this country from doing this unless those countries fail to repay their money, which is very, very unlikely indeed. MARTHA KEARNEY: Now the causes of all of this lie in the banking crisis. An important interim report comes out tomorrow about all of this. Do you yourself worry about what many people in your party talk about as 'casino' banking? That's the side of the banks - not the high street banks - but the side of the banks that in a way gambled recklessly and that's why we've ended up in the mess that we're in now. DANNY ALEXANDER: It is an enormous part of the problem that we face as a government coming into office, is to deal with the irresponsible regulatory system that the previous government had left to us. We have a situation where we've now commissioned this independent report to look into the structural issues in our banking system. Our priority as a government is to make sure that those people who recklessly gambled with our economy no longer are able to be bailed out by the taxpayers. People who do that should be made to take responsibility themselves. That's why this commission is looking at separation issues within the banking system to make sure that the bits that are valuable to us as an economy - retail banking and so on - could be protected; whereas those people who engage in that sort of casino banking take responsibility for themselves. MARTHA KEARNEY: And the kind of separation they're looking at is a kind of ring-fencing rather than the formal divorce which some people have been calling for. Is that right? DANNY ALEXANDER: Well I'm not going to get into the details of the report. It's for the commission to set this out tomorrow. MARTHA KEARNEY: (over) A lot of it's being briefed to the papers, so somebody in the government's talking about it. DANNY ALEXANDER: (over) It's for the commission to set this out tomorrow morning. Clearly Liberal Democrats in opposition and Conservatives called for these sorts of separation issues to be looked at. We've appointed five very eminent people indeed to really do the detailed work on this, and I think their report and their final report in September will make a real contribution. And that's why as a government we set it up and it's why we're going to go and you know take action on the basis of their recommendations. MARTHA KEARNEY: (over) I understand that, but it's a scary old business when things go wrong with the banks if you look at their enormous balance sheets … DANNY ALEXANDER: It is. MARTHA KEARNEY: … which is why Vince Cable, and indeed the Governor of the Bank of England, Vince Cable talked for "radical surgery". What's being mooted at the moment doesn't seem like radical surgery, does it? DANNY ALEXANDER: Well we in opposition called for a separation to take place. The Conservatives called for something similar. And the commission has been set up to look at precisely how you would go about achieving that in a way that protects the taxpayer from having to bail out those people who gambled recklessly with the economy, ensuring that those people take some responsibility for themselves rather than being bailed out by us. But what I should … MARTHA KEARNEY: (over) But wouldn't a simpler way be actually to separate the two different functions? DANNY ALEXANDER: I think what I should reassure your viewers about is that the government will take its obligations to taxpayers first. It is in the interest of taxpayers that will be uppermost in our mind in responding to this report, in taking this issue forward, not the interests of banks. MARTHA KEARNEY: And when you respond to this report, the final one in September … DANNY ALEXANDER: In September, yeah. MARTHA KEARNEY: … do you undertake to take all its recommendations on board, or will you cherry-pick? DANNY ALEXANDER: We didn't set up this commission in order to just leave its report sitting on the shelf. We set up this commission because we have a serious problem, which has caused enormous damage to our economy. As you say, these banks, their balance sheets are five times the size of the British economy. We have to act on that and we certainly intend to. MARTHA KEARNEY: Now this is one issue which I think will be causing tensions within the coalition. Another of course very publicly is over the health service and this decision to put the planned changes to the health service on hold. People often say that the Lib-Dems take a lot of flack in the coalition, they're a "punch bag" to use the word of the moment, but never actually take credit for things that they have managed to influence. Would you say this is an area where the Liberal Democrats have made their voice heard? DANNY ALEXANDER: Well firstly I would say on banking, I don't think that is an area of tension within the coalition. But clearly … MARTHA KEARNEY: Well we'll wait and see. DANNY ALEXANDER: But clearly on the NHS, we have a situation with the NHS where Labour's way of running the NHS - top-down with enormous bureaucracy, controlled from the centre - is not the right way to go forward, especially when money is tight. And that's why … MARTHA KEARNEY: (over) Look, I didn't ask you to critique Labour's policy, with respect. DANNY ALEXANDER: No, no. MARTHA KEARNEY: I asked you is this something the Liberal Democrats should claim credit for? DANNY ALEXANDER: And that's why we have to go forward with the reform. That's why we have to go forward with a reform which is about empowering people within the NHS to take more responsibility for themselves. It's something where of course there have been concerns raised in the Liberal Democrats and elsewhere, and this listing exercise is a real opportunity for the government to hear all those concerns and we intend to come back with serious and substantive changes to this bill as a … MARTHA KEARNEY: (over) So they will be substantive? DANNY ALEXANDER: … as a consequence of this process. Of course. That's why we're going out - Andrew Lansley, Nick Clegg, the Prime Minister, all of us as ministers - to talk to people who work in the NHS to explain … MARTHA KEARNEY: (over) And one of the things you'll be hearing from your own members will be let's put local councillors on the new commissioning bodies to make sure that there is democratic accountability - something Nick Clegg talked about this week. Is that something you think should happen? DANNY ALEXANDER: Well I do think that there are issues about the way in which these consortia will be governed, about the way that they operate. That's something that we will be looking at over the next few months. I'm not going to come out with particular changes now, but we do … MARTHA KEARNEY: (over) Well Nick Clegg already has done. DANNY ALEXANDER: … but we do need to make sure that these are organisations which, because they're going to have a huge amount of financial responsibility, are set up and organised in a way that we all can have confidence in their ability to use that money properly. I think that the structure of putting GPs in charge, of empowering patients, of empowering GPs, is the best way to get better value for money in the NHS, but we also need to make sure that those organisations are able to handle the public money they do have. MARTHA KEARNEY: And I just want to turn to a story that is in well some of the newspapers today, and that's the News of the World apology. How serious do you think this whole affair is? DANNY ALEXANDER: I think it's very serious. It's a serious scandal. It is something where you know there have been police investigations. There are investigations and indeed court cases going on, and of course those must go forward. But it's outrageous that people have had their voicemails hacked into, a seemingly large number of people. That's not something that can be acceptable in any set of circumstances. MARTHA KEARNEY: Now your party's own Deputy Leader Simon Hughes agreed with John Prescott the other night on Newsnight, saying that actually this does raise questions about News Corporation's takeover of BSkyB. What do you think about that? DANNY ALEXANDER: I don't think it does raise such questions. The decision about BSkyB and News Corp is something which is being considered completely separately. Jeremy Hunt, the Culture Secretary, is acting in a quasi-judicial capacity. The factors he can take into account are very tightly circumscribed by law. And that will carry on completely separate to what is a matter for the courts and indeed for the police in relation to phone hacking. MARTHA KEARNEY: And interesting you say it's a matter for the courts. Do you think this is where it should all come out - in open court - or do you think that people should be able to settle privately? DANNY ALEXANDER: Well people, each individual will have to choose how they go forward. That's a matter for them and indeed for the police with their ongoing investigations, which do need to carry on and root through this problem. MARTHA KEARNEY: Danny Alexander, thank you very much indeed for being with us this morning. DANNY ALEXANDER: Thank you. INTERVIEW ENDS
| 
E-mail this to a friend 
Printable version 
Bookmark with:
What are these?