PLEASE NOTE "THE ANDREW MARR SHOW" MUST BE CREDITED IF ANY PART OF THIS TRANSCRIPT IS USED JEREMY VINE: David Cameron has warned in stark terms that the British economy is getting worse every day the Euro crisis drags on. With the G20 Summit ending acrimoniously and no detailed plan in place, what impact is the international chaos having at home? There are serious concerns that growth has stalled. And I'm joined now by Danny Alexander, Chief Secretary to the Treasury. So you must be a worried man this morning? DANNY ALEXANDER: Well of course the situation in the Eurozone is very serious. It's one that has an effect on business confidence here. After all, three million jobs in the UK depend on our trade with the European Union and those people and those businesses are affected by the uncertainty. Equally, of course, having a resolution to the Eurozone crisis is in a sense the most important thing that can happen for the UK economy this autumn and steps, positive steps were made at the G20 Summit, as were made at the Eurozone Summit the week before. JEREMY VINE: (over) So it wasn't the "do-nothing summit" as we were hearing just then? DANNY ALEXANDER: I really think that is totally wrong. There was a lot of, there was a lot of positive things decided. JEREMY VINE: Well you said activity but not action. DANNY ALEXANDER: Well what you found for the first time was a commitment to increasing the IMF's resources. Without numbers on it, I admit that, but a commitment to increasing the IMF's resources in order to ensure that there's a global firepower, if you like, to deal with the crisis at a global level. The week before, you saw at the Eurozone a commitment to a much greater Eurozone fund of a trillion euros. Of course the details on both things have to be fleshed out, but what you get in a sense is … JEREMY VINE: (over) Well help us on the details. You spend your whole day with numbers because we don't, as somebody famously said, we've run out of money. So, as I understand it, the IMF gets … it was 10 billion a year from us. It went up to 20 billion a year as a result of a vote in June. Where that money's coming from, we don't know. It's going up further by how much? DANNY ALEXANDER: Well we have, we in fact have two sorts of money that we give to the IMF. There's a 20 billion ceiling for each, so there's a maximum of 40 billion that we can make available to the IMF. JEREMY VINE: And that's currently? DANNY ALEXANDER: That's currently. Currently only about 5 billion of that is actually in use, and so we have the capacity to go up to that 40 billion ceiling … JEREMY VINE: (over) Without a vote in parliament? DANNY ALEXANDER: Without a vote in parliament. Parliament's already voted both on the arrangements for the current Special Drawing Rights, as they're called, and also for the additional 20 billion of new arrangements to borrow. JEREMY VINE: So just to be clear, the Special Drawing Rights currently mean we're putting 5 billion or 20 billion the way of the IMF? DANNY ALEXANDER: Well the 5 billion is a combination of those two things. We can go up to a ceiling of 20 billion. We're not at that ceiling at the moment. And the way it works is it's what's called a contingent liability. In other words, we're not actually handing over cash. It is a promise to pay to back up the IMF's lending if things go wrong. But it's worth pointing out too that no government has ever lost money in terms of the resources we've made available to the IMF. The IMF was a British invention. That's why we should be supporting it. That's why it was so wrong for the Labour Party back in July to vote against making additional resources available to the IMF. JEREMY VINE: Well you say that. The argument against making it available is that we, Britain, did not go into the Euro and this is a problem for countries in the Euro, and once you extend credit to the IMF, it goes to Greece. DANNY ALEXANDER: Well, look, no country in the global economy can be an island. We are in an enormously interdependent world. We have to play a role as a global leader, as one of the largest economies in the world. We set up the IMF precisely to ensure that there was a mechanism for supporting countries who were in trouble. JEREMY VINE: So you're happy with … But to be clear, you're happy with this money that we give to the IMF going to Greece? You're happy with that? DANNY ALEXANDER: I am. In fact that's already been agreed. The plan for Greece involves commitments from the IMF. It also involves separate commitments from the Eurozone. The two organisations are working together. Of course there are big un… JEREMY VINE: (over) Well why … DANNY ALEXANDER: … of course there are big uncertainties about Greece, which also have to be resolved because … JEREMY VINE: On that score, let me ask you. Are you in the Treasury planning for Greece's exit from the Euro? DANNY ALEXANDER: Well, look, we have contingency plans for all sorts of eventualities. I think that seems … JEREMY VINE: (over) Are you planning for that? DANNY ALEXANDER: … I think that seems like the least likely outcome of the Greek situation. What we've seen you know is enormous political uncertainty over the last few days. The referendum plan has now been dropped, the Prime Minister has had his vote of confidence, and what we need to see the Greek Government do is exercise its responsibilities to deliver the plan that they have set out and upon which we, through the IMF and the Eurozone, have promised to make resources available to them. JEREMY VINE: You say it's the least likely option. Lots of people think that it will have to go back to the drachma. Are you planning for that? DANNY ALEXANDER: Well I'm not going to get into eventualities, hypotheticals that we have plans for. The most important thing we can do as a responsible global leader is to work alongside the Americans, alongside the Chinese and others to put maximum pressure on the Eurozone - including Greece - to take responsibility for sorting out the problems that they have … JEREMY VINE: (over) Because you're … DANNY ALEXANDER: … and take our own responsibility for ensuring there is the kind of global bazooka to sit alongside the European bazooka that the Prime Minister talked about. JEREMY VINE: Well it's a very expensive bazooka, isn't it? And the Conservative Treasury Minister Mark Hoban said last week why join the Euro when it's breaking up? DANNY ALEXANDER: Well I think that's a … it's a misunderstanding of what he was saying. He was … JEREMY VINE: (over) That's what he said. DANNY ALEXANDER: He was using a phrase that was asked for him by a backbencher. What I'm saying to you is I think that is the least likely option. And I think you know we in the United Kingdom need to look at the Eurozone and see the very, very strong political commitment there is from those countries to keep the European single currency together, the developments that they're making in terms of having closer integration on the fiscal side. And one of the things that we have to do is make sure that the role that we have, the role that the other countries outside the Euro have is protected within that European decision-making, so that we can continue to shape the growth agenda of Europe, which is actually our main demand in terms of completing the single market, in terms of deregulating at a European level. That's a real British agenda for leading Europe. JEREMY VINE: Okay. There will be people watching this thinking why would anyone in this country ever have suggested that we go into the Euro, so maybe you can tell us why you did? DANNY ALEXANDER: Well I argued (along with others) on a cross-party basis in the Britain and Europe campaign that we should join the Euro if the economic conditions were right. Of course they weren't found to be right, and what I would say to you is the extra flexibilities that we have being outside the single currency are something that's been a real strength to us at this time. JEREMY VINE: (over) But you were wanting us to go … You were wanting us to be in it. You were head of an organisation or speaking for it called Britain in Europe. DANNY ALEXANDER: I very … JEREMY VINE: That's what you argued for. DANNY ALEXANDER: I very much believe that Britain has a … Britain's vocation is as a European country; that our trade, that our businesses depend on those links to Europe. But in relation to the Euro, I argued that Britain should join only if the economic conditions were right. They were found not to be - at least in part because of the way the Euro had developed in its early days - and as a result, of course, we have greater flexibility, not least the devaluation that the pound has seen, to help us through this crisis. JEREMY VINE: Right, now the effects on us of the crisis, which you've already alluded to. The Sunday Times today, front page, says that it could set us back six years, take us six years longer to recover; could halve the value of shares. Real horror show! DANNY ALEXANDER: Well, look, I don't endorse those figures. That's one organisation speculating about what the outcome might be. But I … JEREMY VINE: (over) You've already been telling us we need to pay up for Greece to stop that happening. DANNY ALEXANDER: But I think what I'd say to you is of course the consequences would be serious. They are serious already. You know the uncertainty about the Eurozone has a direct effect on many British businesses who are seeking to trade and export to the Eurozone. But put positively, of course, resolving this crisis would be the biggest boost we could see to the British economy at a time when you know we face ourselves a long, slow road to recovery. But I think, if anything, this crisis in the Eurozone should remind people of the fact that what Britain did when the coalition government came into power - I as a Liberal Democrat helped negotiate that coalition agreement - you know we set out a plan right from the very beginning to take control of our own circumstances. What we need is other countries to do the same. JEREMY VINE: You're making an announcement, aren't you, about house building and infrastructure. DANNY ALEXANDER: Yes. JEREMY VINE: Tell us what that is. DANNY ALEXANDER: So tomorrow I'll be announcing our half billion pound Growing Places Fund, setting out the details of how much each area will get. The purpose of the fund is to provide resources to help people who are perhaps wanting to build houses in a local area, but they need a link road built, or the land needs to be decontaminated, or flood defences need to be put in place. We're making available half a billion pounds of public money to pay for that upfront, so the developer can get on and invest billions of pounds more in building houses, in employing people, in getting Britain building again. And then when the development is built out and sold, they can repay us the money and it can be used again to support another such development. JEREMY VINE: Isn't that rather small beer when you consider what's needed in this country right now and your critics will say too little too late? DANNY ALEXANDER: Well there are many other things that we are doing. The Regional Growth Fund is supporting businesses up and down the country. The steps we've taken on taxation, on deregulation are supporting businesses too. But we have a very specific problem in many communities, which is there are plans for building houses. They've got the permissions in place, but because of the obligations to build a link road, for example, the developer can't go forward at the moment. By helping them, we can unlock development, unlock tens of thousands of jobs in this country. JEREMY VINE: I mentioned to Douglas Alexander about the public sector strikes … DANNY ALEXANDER: Yes. JEREMY VINE: … and the unions are hopping mad here and they say that you're basically not talking properly. And the Independent today carries a story saying actually you'd quite like them to go ahead. The Prime Minister would like the strikes to go ahead because it'll destroy their case. So where are you in that argument? DANNY ALEXANDER: I don't want these strikes to go ahead. I think that the government's been negotiating hard for the last eight months with the trade unions. We made a significant new offer to public sector workers earlier this week. I set it out to the House of Commons in terms of the more generous pension arrangements that we're willing to offer to resolve this … JEREMY VINE: (over) You backed down, some people said. DANNY ALEXANDER: No, I don't think that's the case at all. This is a discussion and I've set aside what funds I think are appropriate to make sure that we both protect the taxpayer and also get the quality of public sector pensions that people want to see. But look, I think in a sense the most important people here are not the trade union leaders. They're the individual nurses, teachers, civil servants. This week and over the next couple of weeks we'll be communicating directly to 2.5 million public servants across this country to explain to them directly what it is the government is offering. I think in a sense in those people's hands is the decision about whether or not to go on strike, in those people's hands is the influence on the unions. And I think when people go to the treasury website, see what was set out, they will see this is a very generous, very positive offer that will protect the value of public service pensions for 25 years to come. That's a prize worth having. JEREMY VINE: (over) So you're going over the heads of the unions with that, are you? DANNY ALEXANDER: I think most of the unions, the moderate unions, want to reach an agreement, but there are some who seem desperate, hell bent if you like on strike action. And what we need to make sure is that the interests of public servants are not set aside in the interests of trade union leaders who want to go on strike. JEREMY VINE: Danny Alexander, thank you very much indeed for now. INTERVIEW ENDS
| 
E-mail this to a friend 
Printable version 
Bookmark with:
What are these?