On September 9th 2011 Andrew Marr interviewed Work and Pensions Secretary Iain Duncan Smith ANDREW MARR: Those of us who are working are going to have to work for longer. One minister says this morning that the pension age is going to go up first to 67, and then later to 68, much more quickly than was planned by the last government. Meanwhile, for people who aren't working, there's huge changes on the way: a single universal benefit and a cap on how much anyone can get in benefits of £26,000. The man with all that and much more on his plate is the Work and Pensions Secretary Iain Duncan Smith. Welcome Mr Duncan Smith. IAIN DUNCAN SMITH: Good morning. ANDREW MARR: Let's start off with the economy, if I may … IAIN DUNCAN SMITH: Yuh. ANDREW MARR: … because all your hopes for radical change in the welfare system are presumably threatened by a long period of stagnant growth, rising unemployment and so on? IAIN DUNCAN SMITH: Well obviously the economy is critical to everything we do and we need to get the economy back in shape, the deficit down, the debt paid off, so that the economy can grow again and grow properly. I mean, at the moment it's growing and all the forecasts suggest that it will grow, but perhaps at a slower rate. ANDREW MARR: (over) Pretty, pretty … pretty flat though really. IAIN DUNCAN SMITH: Yes. I mean your point though that would we do this or can we do these changes - you know make work pay, get people back to work, all the changes you were describing - if the economy is in difficulties, the answer is we have to anyway regardless of what else because one of the reasons why the economy has underperformed over the last ten or fifteen years is because the welfare system simply isn't shaped to deliver people to the workforce in the way that it should, and that's dragged us backwards. ANDREW MARR: As one of the ministers most concerned with the economy - I mean that's where the money is all decided - do you favour further steps to boost jobs, to boost the economy, maybe getting rid of the 50p tax rate if, as the newspapers say this morning, it's bringing in absolutely no money at all and stifling entrepreneurship? IAIN DUNCAN SMITH: Well on the 50p tax rate, George Osborne and the Prime Minister both made it clear it was never forever, so it's just a matter of when they decide that actually it's done whatever it's meant to do in terms of helping get the deficit down. ANDREW MARR: Right. IAIN DUNCAN SMITH: That was always the position of the government. However on growth, there's lots we're already doing on growth: the enterprise zones are huge, the stuff that I'm doing with Vince Cable on apprenticeships and work placements, and making sure basically small businesses get exemptions from certain taxations and the lowering of corporation tax. But there of course is more we can do, and I know George at the moment is looking carefully at a whole new raft of things we could be doing to actually give the economy another push and another kickstart in the direction of greater growth. ANDREW MARR: This is not Plan B, but it's Plan A, plus people … IAIN DUNCAN SMITH: (over) Well no, it's just what you do. When you manage an economy, you must recognise the circumstances you're in and make sure your main position - which is absolutely right, which is we have to get the deficit down, pay off our debt because we're basically bust and that's what we inherited from the Labour government - but, nonetheless, we have a growth strategy and it's whether that growth strategy's working well enough. He's reviewing that, wants to make sure the right things are being done, and the same goes with Vince Cable. ANDREW MARR: And that will be things like infrastructure projects and stuff to get people back into work? IAIN DUNCAN SMITH: Lots of things. But I mean the key thing is that's what we have to do. The main target is we are heading to reduce this deficit. Without which, by the way, we'd be paying interest rates - and people forget this - the like of Spain and Portugal, which would cost homeowners and businesses dramatic amounts of money. So from that standpoint, it's the right programme. ANDREW MARR: Your big welfare reform bill lands in the House of Lords this coming week where no doubt there'll be lots of arguments about it. One of the arguments is about the £26,000 cap on benefits going to one household. IAIN DUNCAN SMITH: (over) Yes. ANDREW MARR: And there have been suggestions … Lord Freud has talked about there being special conditions where perhaps there's just a huge number of children in a household, so they don't get caught by that. Is that cap absolute or are there sort of ways round it in particular circumstances? IAIN DUNCAN SMITH: No, the cap will stand. And actually I'm not un… ANDREW MARR: (over) No exceptions? IAIN DUNCAN SMITH: Well I'm not unhappy about defending it. There are exemptions from it. For example, if people are on disability living allowance, if they're war widows, or if you're working and you're on tax credits, you won't be covered by the cap. It's for people who are not in work, and that's the key. And of course people out there listening to this or watching me at the moment, when I tell them that we're capping at £26,000 net - which is a gross income by the way of £35,000 a year - I've got people in my constituency in North East London who will say hold on a second, why is it so high? So although people are moaning about it … ANDREW MARR: (over) Because I'm working very hard and … IAIN DUNCAN SMITH: (over) … it's average earnings. People work hard. They often commute an hour, an hour and a half in the morning and back in the evenings, and they live in a location they can afford. This is all we're asking people out there to do with our housing benefit reforms and the cap - is look, you need to cut your cloth in accordance with the nature of what you're doing. And by the way, one of the problems … ANDREW MARR: (over) So sorry … Because I think Lord Freud was talking about the circumstances where you have, whatever you think about it, you know a family with, I don't know, nine children living at home. IAIN DUNCAN SMITH: No, no, what he was talking about - and which actually he was slightly misrepresented on - was that we've always had within there what we call discretionary measures to make sure that the cap is not about trying to drive people into homelessness. It's about getting them into situations in terms of their housing where they could then take work. That's the key. So you know we will make sure that as people are brought under the cap, that of course you know we take consideration of their circumstances, but the cap … ANDREW MARR: (over) Is firm and clear and stays? IAIN DUNCAN SMITH: (over) Absolutely. And the point is it's also fair in one sense, Andrew, because it's very important, people forget this. Somebody who's in a house you know paying up to £100,000 a year in rent in Central London, they cannot afford to take a job, so they are basically disenfranchised from the whole jobs market because the moment they take a job, they'd lose their housing benefit and they wouldn't be able to live there anymore. So what we have to do … ANDREW MARR: (over) So is that the answer to what Boris Johnson was saying when he talked about "Kosovo style social cleansing" - people being driven out of the capital by the cap on housing benefit? IAIN DUNCAN SMITH: No, the point that we're simply saying is people need to be living in housing that they can afford to take work from. Most people do that who are not on benefits. People on benefits must do the same. What he said was that there would be no Kosovo style cleansing, and he's right. We'll still have eight hundred … ANDREW MARR: (over) He was warning about the danger of it, wasn't he? IAIN DUNCAN SMITH: Well there isn't because London is not like Paris. We have lots of social housing in Central London for people who want to live in that housing. What we're talking about is getting the social housing in private rented areas separated, so that we actually get them living in housing they can afford if they go to work. And I think that's a fair and reasonable position to be in, so the cap makes sense I think. ANDREW MARR: Another major controversy has been about the way that people who have some kind of disability are tested for their ability to work. A lot of not just the usual suspects but quite a lot of you know reputable organisations of one kind or another have expressed worry that the tests are a little bit too intrusive, a bit too aggressive sometimes, a bit unfair. Is this something you can look at again? IAIN DUNCAN SMITH: Well we've kept … there are two things that get confused. One is our proposal for disability living allowance reform, and the other is this incapacity benefit sickness test. They'll both have tests. The incapacity benefit one is ongoing at the moment, and what we did when we inherited it from the last government - and I think it was the right policy to do because there had been people sitting for over ten years on sickness benefit and no-one had ever seen them and they often got better or they got worse, we didn't know what they were - this test, this check is reasonable because it gets us certain that people who are on it need it, and those who aren't that should be in work. And we've had it under review now constantly, so we're changing it all the time. Professor Harrington, I asked him to review it permanently, and he's also for example taken some cancer patients on treatment out of that process and we're adjusting it all the time. So I think actually it's quite fair and reasonable right now, but it will be modified. ANDREW MARR: It will be modified? IAIN DUNCAN SMITH: It's always modified because we want to make sure it works. ANDREW MARR: Alright. You took control of the part of the government looking at gang culture … IAIN DUNCAN SMITH: Indeed. ANDREW MARR: … after the riots of the early summer, and I wondered - Theresa May said actually you know most of the people involved weren't in gangs - where you've come to at the moment about the importance, or otherwise, of gangs at the centre of your response to this? IAIN DUNCAN SMITH: Most people who were involved in it weren't necessarily part of gangs, but of course the thing that happened - particularly in London - was a number of the gangs did manipulate quite a lot of activity around the capital… ANDREW MARR: ...Social media stuff… IAIN DUNCAN SMITH: …and did a lot of criminal work and stuff like that behind that. The key thing about the gangs is not that the riots are the reason. The fact is that in too many communities in cities in Britain gangs now have become completely rooted into these communities and they destroy them around them. There'll be no business investment in that area. They take kids from as young as eleven, even ten now they're raiding … ANDREW MARR: Yes. IAIN DUNCAN SMITH: … and they're involved in criminal activity. They're very violent. You know in my own area of Waltham Forest, we've had many murders as a result of the gang violence and often innocent bystanders get caught up in it. ANDREW MARR: So this is a priority to crack on? IAIN DUNCAN SMITH: This is absolute priority because they're not only just the products of social breakdown in these areas, which they are - kids from broken homes - but they're also driving breakdown in their communities … ANDREW MARR: (over) They're causing more of it, yes. IAIN DUNCAN SMITH: So dealing with them - and Theresa and I are jointly doing this - will be the key; that everywhere permanently for the rest of our time will be about dealing with gangs. ANDREW MARR: Pension age. We learned under the last government that the pension age was going up first to 66, then 67, and ultimately to 68. It seems that you want to bring that earlier; that it's too delayed as far as the government's concerned. Is that true? IAIN DUNCAN SMITH: Well first of all everyone should know that the last government left us with a deadline to get to 67. We're already bringing equalisation, which will happen in 2018, and then rising to 66 in 2020. And we've always said that the timescale left by the last government was too slow because in fact there's been an accelerating longevity, so people are living longer but they're still retiring at the same age. So the purpose now is to look at that - and we're reviewing that - to see what might be reasonable, but always giving them good warning about what happens. We will of course be moving to 67, but the question for us is actually when. ANDREW MARR: And then 68. But that's going to happen earlier than was originally planned or announced? IAIN DUNCAN SMITH: Well the government left us with the deadline in the 30s and we think that's too late because people's age levels have increased even since they make that announcement. So yes … ANDREW MARR: Okay. IAIN DUNCAN SMITH: But we've been clear about this all along. The move to 67 will happen and the question only is on the timing of it, that's all, and we haven't made a decision about that yet. ANDREW MARR: The new Conservative eurosceptic back bench group is getting together for the first time this week and they've got some … lots of ideas and lots of proposals. I think William Hague has said that this is no longer a career damaging - it didn't damage your career in your case - it's no longer a career damaging thing to do. Perhaps … What do you feel about relations with Europe when it comes to, for instance, the large numbers of people coming in, taking jobs that might otherwise be done by people you're getting off benefits and so on? IAIN DUNCAN SMITH: Well I think William's right about this. I mean we are in the European Union. We have to try and make this work best for us. But I think he's also conscious and all of us conscious that there are often far too many stupidities that go on in there, interferences - we're suffering some of those at the moment - where they make judgements which don't seem to make a lot of sense. There's the problem over the Human Rights issue, which we're looking at at the moment, trying to find a way of resolving. So you know Europe is a marketplace for us. It's an important marketplace. We're also friends and allies with many European countries as part of Nato and also as historic allies. So you know we need to get the balance right about how our relationship works with Europe. ANDREW MARR: Almost everywhere you look, you must think there are problems with European legislation. You come up against it again and again and again and again. You say you don't want to leave Europe, but is there a sort of middle way where you can repatriate considerably more powers - in some sense renegotiate the relationship to give people like yourself, British ministers, more freedom of manoeuvre? IAIN DUNCAN SMITH: Well that was always a Conservative policy. We are however in a coalition, so these things always have to get modified. I know some of my Conservative colleagues are concerned about some of that - I mean William's accepted that - but nonetheless you know the reality for us is we've absolutely made it clear that any future treaties, there will be a referendum on. So that's locked any future government, and this government as well, from actually taking big decisions about further power transferral, and of course there will be a continuing debate about how you look to get some of these powers that are not necessarily exercised by the European Union back. So William's quite clear about all of that, I think. ANDREW MARR: And what about the idea of giving parliament back the sort of right to veto or agree big appointments to Europe because that would be one way where you could repatriate to the British parliament? IAIN DUNCAN SMITH: I personally am always in favour of giving parliament greater power and authority. I have no doubts about that. Governments of course always have to look carefully at how this affects them, and I think that's happening at the moment. My personal view is always I'm in favour of anything that gives parliament a greater say. That's after all what we were elected for. ANDREW MARR: Iain Duncan Smith, thank you very much indeed for joining us. INTERVIEW ENDS
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