Please note BBC Politics Show must be credited if any part of this transcript is used.

Charles Kennedy MP, Leader of the Liberal Democrat Party

Jeremy Vine: Let's talk to Mr Kennedy about all that now. You seem to have had a bit of ... a set back as a result of Michael Howard becoming Tory leader.

Charles Kennedy: No, I wouldn't accept that. I think it changes the circumstances a bit.

You're quite right to say, as indeed the package was saying, it's been more difficult for us to get coverage because of course you had about three or four weeks there, following the party conference season, which is nothing but the Conservatives, plus the day to day issues affecting the government, and that's understandable with the dramatic change of leadership that took place.

But if you actually look at the fundamentals, nothing fundamental has changed.

I slightly challenge your point about the opinion polls. If you take the aggregate of the opinion polls, we're still polling healthily above 20%, which is good, and we have been for a long time now.

BOTH TOGETHER

Charles Kennedy: Sorry.

Jeremy Vine: You were about 30% at Brent East weren't you.

Charles Kennedy: Oh yes, you always get ....

Jeremy Vine: You've gone down.

Charles Kennedy: ... a big lift after a bi-election win like that, that's quite understandable, and we had a very good conference on the back of it. But there has been a great deal of focus elsewhere in politics recently. But actually, if you look at the results, council bi-election results, we're still doing extremely well, and there's no great evidence of a Tory revival at all.

Jeremy Vine: But would you care to revise your comment, which we saw in the film, where you said, this year be in no doubt, we are overtaking the Conservatives.

Charles Kennedy: Well we have been in quite a few bi-elections that have been taking place. Now the big test of public opinion comes next June of course, with the local elections and the European elections, we'll see what happen there. But I think the febrile state of politics, you've been talking, we'll no doubt touch on the controversies within the government at the moment, the change in the Conservative leadership, I think politics is really up for grabs in a way that it hasn't been for years, and the liberal democrats are part of that three party contest.

Jeremy Vine: Okay, so our projection that has you in Number 10 in the year 2082 is overly pessimistic.

Charles Kennedy: I hope it's overly pessimistic, I think even Mr Gladstone would balk at trying to occupy the office of Prime Minister by the age I would be then.

Jeremy Vine: Let's talk about your policies, I know you want to talk about top-up fees. You as I understand it have two rock-solid commitments at the moment which are abolishing top-up fees, bringing back student grants, and then giving free health and personal care to the sick and elderly.

Are you in a position now where you think it's more likely that you can afford abolishing top-up fees as a result of what's been happening in the last couple of days.

Charles Kennedy: Yes, the difference between ourselves and the Conservatives on this is that we have got a costed programme.

We've said that Income Tax payers who earn above one hundred thousand pounds a year, for every pound above one hundred thousand, their top rate of tax goes from forty pence to fifty pence. The money that generates substantially covers you, more than substantially covers you, for the policy of no tuition fees, no top-up fees, a reintroduction of grants for poorer students, that we have already successfully pioneered in one part of the UK in Scotland.

Jeremy Vine: Just on the priority question though, isn't it rather strange that the Lib Dems, with all this money you're going to be collecting from supposedly rich people, are going to give that money as a first priority, to middle class students.

Charles Kennedy: Well what we're going to say is that we want to keep the access opportunities for education that we're establishing as a country. Now the Conservatives have got an uncosted programme, which doesn't put extra money in, which would immediately reduce substantially, the number of people actually able to go to university at all.

Jeremy Vine: But the government's plan makes a provision for the poorest students, so they're out of the picture any way. So your first priority, as a spending proposal, is to give the money to middle class students.

Charles Kennedy: Well what we're saying to people is that if you don't invest in the future of the country, and if you pull up the ladder of opportunity that people like you and me have benefited from, and deny them the chance to go to university, then their very capacity to get in to a higher income bracket in later life, is going to be diminished. Now that cannot make sense either economically, or in terms of social justice.

Jeremy Vine: Are you sure you've costed it correctly.

Charles Kennedy: We have costed it yes.

Jeremy Vine: But it's impossible to cost isn't it because you don't know how many students there are going to be. You don't know how much abolishing top-up fees will cost because no one has set a rate for them yet.

Charles Kennedy: Well of course the government are at sixes and sevens about this whole issue of variable levels depending on what the circumstances of the individual universities are; so clearly, in that sense, until we know the precise government figures in the outcome, we can simply base it on the projections for that part of the UK that we've already implemented such an approach over. Now this is being responsible ....

BOTH TOGETHER

Charles Kennedy: .... and having clarity and honesty with people. We're not saying to people, vote for us, and somehow you can get something for nothing, that doesn't work. So as a responsible opposition, and more credible than the conservatives in this approach, I think that we're seeing and doing the right thing.

Jeremy Vine: Now as I understand it, you have at the moment an audit of your policies going on.

Charles Kennedy: We do indeed.

Jeremy Vine: A kind of overhaul. And it's been described as a re-packaging; so I've mentioned those two policies on top-up fees and on personal health care: those are the rock solid commitments. That means presumably does it, that the other policies are at the moment, in limbo.

Charles Kennedy: Well what we've said over the one hundred thousand pounds increase in tax for those above that income bracket, that pays for the two issues; the free personal care and the educational package that you've mentioned. It also leaves just under two billion pounds, about 1.7 billion, to alleviate the swingeing council tax increases that are going through at the moment. Now long term, we would prefer our policy, which is a fair local tax, based on people's ability to pay, and I think that there's growing concern both over the immediate controversy on council tax increases, but also a growing awareness of that policy, and its popularity.

Jeremy Vine: But that's part of the audit isn't it.

Charles Kennedy: No, no, that's part of the commitment that comes out of the top income earners and the extra contribution that they will make. Now what that will enable you to do is to cushion the blow of the current council tax increases, but also that will be of particular help to those single households, and in particular of course, the pensioners; they are the ones that are suffering the most. If you look at the totality of our approach.

Jeremy Vine: Yeah.

Charles Kennedy: In terms of what we're specifically pledging and how we'd raise the money to do it, we're targeting our focus on the young, in terms of their opportunities, and the elderly in terms of their dignity and security in old age. I think that is a good measured package.

Jeremy Vine: Right. But I'm trying to work out what's in limbo and what's definite because you've got this repackaging going on.

Charles Kennedy: Yes it's not only packaging, it is a very very detailed, clinical analysis of all the spending commitments that we'll have, in the run-up to the next General Election.

Jeremy Vine: Sure, and you may come out of it with certain policies consigned to the dustbin for whatever reason.

Charles Kennedy: Yes indeed.

Jeremy Vine: So higher state pensions.

Charles Kennedy: Well, what we've said about the pensioners, is we will help in the short immediate term with the council tax and of course what would be the introduction of free personal care.

Now that's two very substantial commitments. We will do more for the pensioners, but that commitment is going to have to be funded out of the 1% cut that we're looking for, and this is what the process that Vince Cable, our economic spokesman and myself and others are going through very rigorously at the moment. 1% cut in the totality of government spending, which is the equivalent of about five billion pounds.

And this is not without its controversy inside the party because a lot of my colleagues are having to look very hard at the political commitments they want to give, and at the same time come up with requisite cuts to enable that to take place. I want us to be rigorous and vigorous in our approach as a party.

Jeremy Vine: And you would concede in a candid moment would you not, that that would mark a bit of a change for your party.

Charles Kennedy: I think it marks a greater degree of political and economic self discipline and I think that if we want people like you and people watching this programme to view us as a credible alternative, emerging in British politics, that's what we've got to do. No easy choices ...

BOTH TOGETHER

Jeremy Vine: David Law, who's one of your colleagues said, Our previous approach of tax and spend could be regarded as having reached the end of its useful political life.

Charles Kennedy: Well all parties and all governments have got to tax and spend, that's just a fact of life.

Jeremy Vine: Taxing more and spending more.

Charles Kennedy: Well what we want is not more tax but fairer tax, that's the key issue. Increasingly now, people are not saying, how much more am I paying in tax, they're actually saying, what I'm paying in tax, is it being effectively deployed. We would like, for example, with the schools, with the hospitals where the police forces are concerned, to see far greater democratic decentralised control of spending, instead of this obsessive Gordon Brown approach, everything being decided at the centre, everything being the product of targets and strategies.

Jeremy Vine: Fine.

Charles Kennedy: And hurdles that have got to be leap over.

Jeremy Vine: Just on a final point. You have an MP called Paul Marsden, who's making quite a name for himself with the series of affairs and what is described as unmentionable sins. Is he the right stuff for your party in the 21st century.

Charles Kennedy: Well, you wouldn't expect me really to comment on the personal circumstances of a colleague. And I hope very much that his family's circumstances, which I gather both he and his wife and the family are working on to improve, given the very unfortunate rush of publicity that they've had about these matters. I hope very much as a family that they can put that together.

Jeremy Vine: One of your M Ps, Sandra Gidley, we can put her quote on the screen said, Paul's got a marginal seat, he'd be advised to concentrate on keeping his constituency at the next election. If you can't be trusted to stay faithful within your marriage, then it's a bit part of your honesty and integrity. Are the Lib Dems giving us back to basics?

Charles Kennedy: No, I don't think you'll get that from the Liberal Democrat Party at all, certainly not from myself as Leader; I'm never one to morally criticize anybody else. But I do think that it is best in these things if they're addressed privately, within the family context. I know that that's what Paul and Shirley are doing, and I wish them all success.

NB: this transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.

Let us know what you think

politicsshow@bbc.co.uk Our e-mail address

You can reach the programme by e-mail at the usual address or you can use the form below to e-mail the Politics Show. You will be returned to the Politics Show website after submitting the form.

Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.