On Sunday 28 February Andrew Marr interviewed Shadow Chancellor George Osborne. Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used. ANDREW MARR: And now to another Conservative on his path to power, perhaps. All the big guns are being wheeled out in Brighton this weekend for the Conservative Party spring conference. Last rally before the election. George Osborne's speech was one of yesterday's highlights. He said that the Conservatives would "tell people the difficult truths about the economy." David Cameron comes on today. So will he urge the Conservatives to go back to their constituencies and prepare for power? The Shadow Chancellor is with me now. Thank you for coming in, Mr Osborne. Can we start with the condition of the economy? One of your colleagues was quoted in the Times yesterday as saying, "The problem is that everybody knows there's got to be deep cuts, but you can't scare the electorate" and that's where the slight confusion in the Conservative message has come from. GEORGE OSBORNE: Well a) I wouldn't say we've been confused. We've been absolutely consistent in saying that there is a lack of confidence in the British economy; that the government's current economic plans are not working; that our recovery is weak; that one in five young people can't find work. And in order to get some confidence into the economy, you've got to show the world and you've got to show people who might invest in this country and you've got to show that businesses that might expand in this country that we can deal with our debts. And you know that is the key to getting a recovery, alongside measures to then boost enterprise and actually create those jobs which are so desperately needed. ANDREW MARR: I come back to the original question though, which is how forthright are you going to be about the depth of the cuts that need to happen? GEORGE OSBORNE: Well I've been absolutely straight on this programme and other programmes about the fact there need to be spending cuts. ANDREW MARR: (over) Right, well let … GEORGE OSBORNE: I mean I was the first politician to say that, and then eventually Gordon Brown agreed. Last autumn, I spelt out some specific examples of things we needed to do. I never said it was a shadow budget, but I gave people examples of how we can protect the lowest paid and the most vulnerable in our society as well as living within our means as a country. So I have set out that detail and people know in … ANDREW MARR: So if you come in … Sorry, can I just jump in there? If you come into power and are the Chancellor of the Exchequer in a couple of months time, what is going to be the difference? How much more are you going to take out of the budget compared to Labour in the year 2010 to 2011? GEORGE OSBORNE: First of all whoever wins this election is going to have to deal with Gordon Brown's debts. So that's not the real choice of the election. The choice is whether people are going to be straight with you about how we deal with that problem. The second thing I'd say is we have set out some specific examples of things we will do. But what I want to … ANDREW MARR: (over) But that's not … As you know, that's not my question. GEORGE OSBORNE: But, Andrew, you know really to ask me to set out a draft budget when I haven't seen the figures, when I haven't got accurate growth figures from an independent office for budget responsibility … ANDREW MARR: (over) But you say you're going to go faster, further. GEORGE OSBORNE: … when I haven't had the conversation with the Bank of England about what monetary policy can do, so that we can keep interest rates lower for longer. You know that would be irresponsible and I'm not going to do that. The right thing to do is to set out your values, set out the clear choice in this election between a Labour Party that is doing nothing and has delivered this economic mess and a Conservative Party that is going to keep people's mortgage rates lower for longer and boost enterprise and create jobs. Set out those values and then ask the public to say who do you trust to deliver the change that we want to see in our country? ANDREW MARR: Sure. Alistair Darling says that he is going to cut the deficit in half in four years, right? GEORGE OSBORNE: Yeah. ANDREW MARR: My question to you is you say - and let's be clear about this - that you are going to go faster further, and all I'm asking is to give people some idea of how much faster and how much further. GEORGE OSBORNE: Well, first of all, we have said we will make a start in 2010 because I think it beggars belief that you … ANDREW MARR: So what kind of start? GEORGE OSBORNE: Well hold on. It beggars belief that you would elect a government in April or March or May this year and that they would then wait until April 2011 before taking action on this massive challenge that Britain has that threatens our credit rating, that is deterring international investment into our country. Of course we will make a start, but we will do so in coordination with the Bank of England, so that interest rates stay lower for longer. And that is the greatest stimulating effect you can have in a recovery. ANDREW MARR: But every Conservative commentator pretty much - the Telegraph leader this week again are saying we need more specifics. You need to be clearer. You need to be absolutely tough and you need to be crystal clear and you're not being. GEORGE OSBORNE: Well, first of all, I would argue I have been clear and tough about the choices we face. I have set out … ANDREW MARR: In general terms. GEORGE OSBORNE: I have set out a framework for a new economic model where we move this economy from one built on debt to one where we save and invest; that we have a vision for the future of the British economy where we make things again in this country, where we have a more balanced economy, where we don't hitch all of our fortunes onto the back of the Bank of England. Now, frankly, you don't get any of that from Gordon Brown and Alistair Darling. And now people know in this election there is a choice and they can ask everything from the most … ANDREW MARR: (over) They're just not sure … GEORGE OSBORNE: But hold on … ANDREW MARR: … exactly how big a choice it is because you won't tell us. GEORGE OSBORNE: They know that the Conservatives are setting out the case for change in our economy as well as the case for change in our society. ANDREW MARR: (over) Yesterday you … GEORGE OSBORNE: People know. I mean the one thing that's absolutely consistent at the moment is that people out there looking for work, the small business struggling, the family that sees their living standards fall at the moment - you know they want change in this economy. They want an economy that works for them. They want a Britain that works for them, and a Conservative government will deliver that change. ANDREW MARR: So why won't you pledge to cut the 1p national insurance rise, ditch that? GEORGE OSBORNE: Well … ANDREW MARR: That would help people. GEORGE OSBORNE: Well for a start, I think it is a you know clear example of what Labour have done that is damaging our economy. ANDREW MARR: So get rid of it. GEORGE OSBORNE: I am working extremely hard to be able to avoid that national insurance rise because a tax rise on jobs in recovery you know is not the best tool for stimulating growth. But it is precisely … ANDREW MARR: Sorry meanwhile, on the other hand, yesterday … GEORGE OSBORNE: (over) But hold on, can I just … You know it's precisely because the Conservative Party will be irresponsible after a decade of irresponsibility from the incumbent government … ANDREW MARR: (over) Responsible? GEORGE OSBORNE: Responsible … ANDREW MARR: Yes. GEORGE OSBORNE: … after a decade of irresponsibility from the government. It is precisely because of that, that we are not going to make uncosted pledges that we can't deliver on. You know the public are so cynical … ANDREW MARR: (over) Well here's a pledge, here's a pledge you made yesterday … GEORGE OSBORNE: (over) But hold on, hold on, the public are so cynical … ANDREW MARR: Alright. GEORGE OSBORNE: … of politicians who come on and promise the earth and don't deliver. We have been through the Blair years, we've been through the Brown years, and people want real change and they want politicians to make promises they know they can deliver on. ANDREW MARR: I'm sure you're right that people are you know cynical and suspicious of politicians making promises, but you made a promise yesterday. I mean you made a promise on corporation tax … GEORGE OSBORNE: Yeah. ANDREW MARR: … and you're going to cut corporation tax to help businesses grow, to rebalance the economy as you say.] GEORGE OSBORNE: Yeah. ANDREW MARR: Can I ask you how much that is going to cost and where the savings are going to come from to pay for that? GEORGE OSBORNE: Well the pledge on corporation tax is to reduce the top rate from 28p to 25p, to reduce the small companies rate down to 20p for small businesses, that is paid for by removing complex reliefs and allowances which I can go through in detail if you'd like. For example there's an investment allowance for small businesses that I think is complicating the system and small businesses would rather have more money to make their own decisions on where they invest. So reduce the top rate to 20... ANDREW MARR: (over) So you can get all the money for this from simplification? GEORGE OSBORNE: These are changes brought about by simplification, so you have a simpler tax system, lower tax rates that is a boost for enterprise. And you know … ANDREW MARR: (over) But if you can give these kind of pledges … GEORGE OSBORNE: … that is another choice we face. Do small businesses want to go on with a system that is complicated, where the tax rates are rising, where they are struggling to make a profit, where many of them face insolvency? Or do you want a change to the economy under the Conservatives where actually we can create the jobs this economy needs? ANDREW MARR: And so to be clear, what is the cost of this change? GEORGE OSBORNE: Well the headline rate of corporation tax is a two and a half billion pound change paid for by the changes on the allowances. The change on the small companies rate is around a billion pounds. So you know … ANDREW MARR: So three and a half billion pounds? GEORGE OSBORNE: Yes, but it is paid … ANDREW MARR: No, no … GEORGE OSBORNE: … for by … ANDREW MARR: Which you hope to get from changes elsewhere? GEORGE OSBORNE: … changes in the system. ANDREW MARR: Okay, alright. GEORGE OSBORNE: This is by the way you know what we have consistently argued for for several years now as a way of delivering a simpler tax system, so that people watching this at home involved in a business know they get simpler taxes, lower tax rates, and that will be a boost to enterprise. Because the end object of Conservative economic policy is a more stable economy where people are in work, where prosperity is shared, where you don't have all the growth in one part of the county but it's spread throughout this country, and we have a new model of economic growth. ANDREW MARR: So will that be in your first emergency budget? GEORGE OSBORNE: Those measures will be in our first budget. ANDREW MARR: So you know some of the things that will be in your first emergency budget. I suspect you know quite a lot of things that will be in the first budget emergency budget. It's just that you won't tell us any more detail about these big cuts that are going to have to happen not as you say in a few years time but this year. GEORGE OSBORNE: There's an important distinction, which is the things I'm telling you about are things that are revenue neutral, costed changes we can make. What you're asking me for is the fiscal judgement in the budget, which is something that frankly it would be very irresponsible to make when you haven't seen the figures, when you don't have accurate growth figures, when you haven't had the conversation with the Bank of England. And do you know what we are going to do? Within days of coming to office - and Sir Alan Budd, a respect independent economist is going to help us do this - we are going to create an independent office for budget responsibility, so the whole country will have for the first time a proper independent set of accounts … ANDREW MARR: Right, okay. GEORGE OSBORNE: … the whole country will know the books. And we will be able to make … ANDREW MARR: Which could be very useful. I do understand that, but … GEORGE OSBORNE: We will be able to make a proper judgment about this. ANDREW MARR: Okay, well let me ask you something I think people will want to know before they make a full judgement, which is that almost every independent observer and economist looking at the figures says that cuts of something around 17% or more are going to have to come department by department if you, like Labour, are going to protect frontline services and things you've chosen. Are the voters going to know, have any sense about where those cuts are going to fall before they choose which way they're going to vote in an election? GEORGE OSBORNE: Well, first of all, we have made the argument that spending needed to cut and … ANDREW MARR: That's not the question I'm asking. GEORGE OSBORNE: Well we've completely changed the political debate in this country. ANDREW MARR: Well you may well have done, but the question I'm asking is different. GEORGE OSBORNE: That's very important. The second thing is we have identified areas that we are going to protect, so we are going to protect the National Health Service. That is an expression of our values. There are certain benefits that we … ANDREW MARR: I'm sorry, you're talking exactly … You criticise Alistair Darling and Labour Party people for talking and you're talking in the same way. You're saying these are the things that we're doing that's good … GEORGE OSBORNE: Andrew, Andrew … ANDREW MARR: … this is what we've said in general terms. GEORGE OSBORNE: Andrew, I have set out proposals to reduce the size of Whitehall by a third, to have a review that brings forward the increase in the state pension age, to stop paying tax credits to people earning more than £50,000 a year, to remove child trust funds from the better off in this country. You know you cannot get … ANDREW MARR: We both know the numbers involved in all of those things … GEORGE OSBORNE: Well Andrew, there is not … ANDREW MARR: … and the timings. GEORGE OSBORNE: Whether you had Alistair Darling or Ed Balls (who probably you know would be the Chancellor if Labour won) sitting here, they would not tell you any of those things. So we have set out examples of the changes that need to be made to get this country to live within its means, and this is the crucial choice. Under Labour, interest rates will be higher than they would be under the Conservatives because they wouldn't have such a tight fiscal policy. There would be more insolvencies, higher unemployment. This economy, which they have wrecked, would continue to remain weak, and it is the Conservative Party that has the plans to get confidence back to create jobs, to help families whose living standards have fallen, to create small businesses again that are going to be the boost to enterprise this economy needs. ANDREW MARR: Okay, so we won't know actually where these cuts are coming from. It's perfectly clear. GEORGE OSBORNE: Well you know, you know my … ANDREW MARR: No, we won't because you won't tell us. GEORGE OSBORNE: … you know … Yes, hold on, you know our values. ANDREW MARR: I'm not talking about the values. GEORGE OSBORNE: No, no, wait, wait. ANDREW MARR: I'm talking about the numbers. GEORGE OSBORNE: You know the values. You know specific examples like the ones I've just given you of steps we will take. ANDREW MARR: Yuh. GEORGE OSBORNE: You know the process we will follow to create an independent set of accounts … ANDREW MARR: Okay. GEORGE OSBORNE: … and you know we will make a start, and you know our number one priority is to get confidence back by boosting enterprise and showing that this country can deal with its debts. ANDREW MARR: At your home last Sunday, there was a crisis meeting, wasn't there, looking at why the Conservative message isn't cutting through, isn't doing a bit better? Because it must be disconcerting to you. All the things you've been saying about the Labour failure, everything you've been saying about Gordon Brown, his unpopularity, it's only one poll today, but it's still a worrying poll I'd have thought for you. So when you and the top team get round a table and talk about how to do things better, is it clear who's actually running the Conservative campaign? Is it you? GEORGE OSBORNE: Well, first of all, you read all these stories with some amusement. There was no meeting at my house … ANDREW MARR: None at all? GEORGE OSBORNE: … as it happens last weekend. But you know I've got used now in politics to reading things that I'm supposed to have done. ANDREW MARR: So there wasn't a meeting at your house last Sunday where you called the brains together? GEORGE OSBORNE: No there wasn't, as it happens. ANDREW MARR: Okay, right. GEORGE OSBORNE: But you know … ANDREW MARR: Put that to one side. GEORGE OSBORNE: But do we meet the whole time? Yes, we do. Do we discuss things the whole time? Yes, we do. You know why? Because we're a strong and united team, and the people around David Cameron are pretty much the people who've been around him throughout his leadership. And it is not just the back room advisers. It is people like William Hague, Ken Clarke, Eric Pickles, our Party Chairman, Teresa May. You know we have a really strong team. And you know do we discuss how we are going to make sure that this election is a change election? Yes, we do. Do we discuss how we're going to make sure voters focus on the choice between five more years of Gordon Brown and David Cameron who has the energy, leadership and values to get the country moving? ANDREW MARR: So what is going wrong? GEORGE OSBORNE: We are discuss… A) we are absolutely clear that in this election, you have to make it a choice; and we are also clear that we are the change that the country wants. ANDREW MARR: So why is that message not getting across? GEORGE OSBORNE: Well I think … I actually think out there the country is desperate for change, but they are also cynical about politics because of everything that has happened - the expenses scandal and so on - so you have to work harder to convince people that real change is possible, that there is change you can trust. And that is what our task is between now and the election. You know people have a choice now - five more years of Gordon Brown; change under David Cameron and the Conservatives - and that will be the choice in people's minds as they approach this election. ANDREW MARR: One thing that people say is that the opinion polls may be apparently narrowing nationally, but actually you're doing much better, you think, in the target seats? You've you know put a lot of effort and a lot of money into the real swing marginals and that is why underlying all of this, the Conservatives are still likely to do better. Is that true? GEORGE OSBORNE: Well we have a big effort in the marginal seats. I was in the West Midlands in the Black Country this week and there is a fantastic effort. We've also got lots of great new candidates who are offering a you know fresh Conservative vision out there on the streets. ANDREW MARR: Yes. GEORGE OSBORNE: But you know I want the whole … ANDREW MARR: All run by Mr Wheeler with £5 million. Any chance of you coming clean on … GEORGE OSBORNE: (over) Well I think you've got the wrong … (laughs) ANDREW MARR: … Ashcroft, I beg your pardon. (Osborne laughs) Wheeler's gone. On Ashcroft. On Lord Ashcroft, I beg your pardon. Any chance of you at all coming clean on Lord Ashcroft's tax status? GEORGE OSBORNE: Well do you know what I would like … ANDREW MARR: Because I keep asking this … GEORGE OSBORNE: I know, but I notice that you never ask Labour politicians sitting here about the tax status of some of their very big donors. ANDREW MARR: Listen, I'll do you a deal now. If you'll tell me in clear terms about Lord Ashcroft's tax status now (Osborne laughs), I promise the next Labour politician sitting there, I will go after them for that. GEORGE OSBORNE: Look, what we have said … ANDREW MARR: It's a fair, fair offer. GEORGE OSBORNE: It's actually the Conservatives who have sought to change the law of this country, so that you can only sit in Parliament, House of Lords or House of Commons, if you are a full UK taxpayer or the equivalent. And you know that is actually a measure of the change we're bringing. ANDREW MARR: Okay, okay. One final point, again on the election campaign. An enormous amount of argy bargying going on behind the scenes about these leader interviews. Are you in a position to tell us that they're definitely going to happen, you're very close to agreement and there's no problem about them? Or is it still a real issue? GEORGE OSBORNE: Well, first of all, I've not been directly involved in the negotiations, but we are very keen to have them. We have been arguing for these leader debates when Tony Blair was the Leader of the Labour Party. ANDREW MARR: Are you sure they're going to happen? GEORGE OSBORNE: Well I absolutely hope so because I think they'd be a great thing for democracy. I think it would really help in a British election to see Gordon Brown, David Cameron debating, and people will be able to make a choice between the future and the past, between a candidate offering change and a candidate offering more of the same. I think it would be a good focus of attention. I want to see other debates … ANDREW MARR: (over) Okay. Do you look forward … Do you look at these polls at the moment and you think it's possible we're going to have a minority government? GEORGE OSBORNE: We are going for a Conservative majority. ANDREW MARR: Yeah, I know you're going for it, but … GEORGE OSBORNE: (laughs) Well we're going … You know we're going to put every effort. ANDREW MARR: Alright. GEORGE OSBORNE: In the end … Can I just say this? The one thing the polls show, whichever poll you look at, is the country wants change, and there is only one party in this election offering change and that is the Conservative Party. ANDREW MARR: George Osborne, thank you very much indeed. INTERVIEW ENDS
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