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JOHN HUMPHRYS: But first the great
petrol crisis. Well, it's all over bar the pumping, we hope, and we'll
soon have full tanks in our cars and we'll have forgotten it all. Or
will we? The worry for the government, apart from the immediate problem
of those devastating opinion polls this morning, is that we won't... that
we'll remember this past week as the moment when so many of us decided
that we'd reached the limit- that we will say taxes are too high and we're
not putting up with it any longer. If so, how does the government - committed
to high public spending - deal with it? The man who hands out the money
to the spending ministers is the Chief Secretary to the Treasury, Andrew
Smith, and he is with me now.
HUMPHRYS: Good afternoon, Mr Smith.
ANDREW SMITH: Good afternoon.
HUMPHRYS: Not hand it out personally,
I dare say, but we have the general idea. Now, what the past week has
shown, apart from anything else, is that you are out of touch with the
voters, so you're going to have to respond to that, that's the case, isn't
it?
SMITH: What the last week has shown,
John, is that we're a government that doesn't give in to blockades and
to pickets, that these matters are determined in a normal budget timetable,
and I mean, what sort of impression would people have of this country if
the government did just cave in, and secondly, we have acted resolutely,
in co-operation with the Police, with the oil companies, with others, and
I am very grateful, and the government is, to all of those who have been
putting their energy and time into getting supplies restored, we have acted
resolutely to get the situation back to normal as quickly as possible.
But those are the keys things, we don't give in to blockades and normal
fuel supplies must be assured.
HUMPHRYS: But you didn't answer
the question as to whether you are out of touch with the voters which manifestly,
on the basis of the past week, you are.
SMITH: No, we, we are listening
to the voters, we are listening not only to those industries that have
been affected very deeply by restructuring of their businesses, the crisis
that has been affecting farmers, the situation affecting hauliers, we know
people are concerned about the level of petrol duty. That is why in the
last Budget we cut vehicle excise duty for lorries, we ended the automatic
fuel escalator, it is why we are bringing in a new vehicle excise duty
system that helps four million motorists through lower duty. And so we
are listening, we are giving extra help to the agricultural industry, the
two-hundred million package a few months ago, and perhaps many people don't
know this, you referred to my role as Chief Secretary and my responsibilities
for the spending review: over the next three years, agriculture gets a
real terms increase of six-and-a-quarter per cent on average, year on year,
more actually than the increase going to The Health Service and to Education,
so we are listening, we have been acting, but it would be quite wrong for
us to give in to blockades and deviate from the normal budget process which
settles these things in a balanced and democratic fashion....
HUMPHRYS: Interruption.
SMITH: ... but can I just say John,
we are listening, and we have to listen to the people who don't blockade
oil refineries as well as those who do, we listen to the pensioners, the
teachers...
HUMPHRYS: ... sure ...
SMITH: ... those who want public
services....
HUMPHRYS: Who of course were on
the side of the people who were as you putting it, as you put it, blockading.
Now those are the people, according to Mr. Hague this morning, you may
have heard him, 'decent hard-working people...' These aren't pickets who
intimidate people, these aren't people who make threats, these, he says,
are decent, hard-working people, and it would appear, most people, vast
majority of people are on their side...
SMITH: ...well I think Mr. Hague
has to be very careful about giving comfort to people who would see this
country governed by blockade and not by the democratic process. Now if
we look at the protesters, of course many of them, as I have said, are
sincerely protesting their views, the interests of their industries which
as I have acknowledged are badly affected by restructuring, of course many
people are voicing their views, and it's right in a democratic society
that they can protest, but you know, there is a line between legitimate
protest on the one hand, and stopping people going about their lawful business,
bringing the Health Service into a emergency situation, putting businesses
and firms and people's daily lives at risk, the carers who can't get out
to visit those they are looking after, and the rest of it, now I say that
the people of this country, yes they want people to have the opportunity
to protest, they don't want them to have the opportunity to bring the country
to a halt .....
HUMPHRYS: ... so
SMITH: ... and any government,
and Mr. Hague ought to think about this, any government that gave any signal
that it could give in to that wouldn't be a government worthy of the name,
and Mr. Hague certainly wouldn't be a Prime Minister worthy of the name.
HUMPHRYS: So they are not decent
hard-working people, in your estimation.
SMITH: Many...of course, of course,
many of them are. What actually happens with these protests, you get those
who've got a legitimate grievance, you get those who want to go along and
make a protest, you get some along there who are there out of political
motives and you get some, frankly, who turn up whenever there is some trouble,
because they want some bother.
HUMPHRYS: So, but you see, if,
if they are that, if they are decent hard-working people, it would be entirely
reasonable for a government to say, not just as you have said already,
we will listen to them, it's one thing to say, we will listen to them,
that doesn't cost anybody anything, does it, to listen to somebody, it's
another thing to say, and, and... 'we will take note of what they tell
us and we will do something about it because they are decent hard-working
people who are simply registering a legitimate protest.' You seem not
to be saying, we will do something about it, you seem not to have noticed
the what the polls have told you this morning, either for that matter.
SMITH: No, we, we certainly are
listening, and as I said, we have to listen to all the people...
HUMPHRYS: ...I acknowledge you
are listening...
SMITH: ...not just...
HUMPHRYS: ...I acknowledge you
are listening, my question was whether you are going to do anything about
it, not just listen.
SMITH: And the implication of listening
is that you take all of the arguments and the representations that are
made to you into account, as we draw up our pre Budget report later this
Autumn and towards the Budget next Spring and of course we will do that.
But where I would have to question your assumption John, it cannot be
right to say that, if you are listening, you must automatically do everything,
those who are calling for things to be done, want done...
HUMPHRYS: ...true enough, but ...
SMITH: ...because governments have
to make hard choices on levels of revenue raising, on levels and priorities
of expenditure, and what this debate really comes down to, and this is
something where I think the Conservatives are very vulnerable on indeed,
is, are we going to sustain public services, are we going to have the extra
money...
HUMPHRYS: ...no it doesn't, that's
a diversion, you know perfectly well that that's a diversion ...
SMITH: No it, no it's not, no it's,
it's, it's, no it's it's not a diversion, because, when John Redwood says
he'd like to see a 5p cut in the rate of duty, that 5p cut equals two-and-a-half
billion pounds this year, three-and-a-half billion next year, four-and-a-half
billion the year after that. Where would he get that money from? It's
clear on what the Tories have already said, that they are sixteen billion
short and that the question that they do have to answer is which hospitals,
schools, transport investments that we are making, would they cancel, because
their sums do not add up...
HUMPHRYS: ...well, well, nobody
believes you on that, but let me....
SMITH: ...interruption....
HUMPHRYS: ...let me...
SMITH: ...you're saying that nobody
believes in that...
HUMPHRYS: ...well polls tell us
that, they think that's a load of tosh...
SMITH: ...well, you see, er, er,
we are not going to be influenced in this, by short term polls, frankly...
HUMPHRYS: ...or indeed by anybody...
SMITH: ...it would have been...
HUMPHRYS: ...or anybody tells you
...
SMITH: ...it would have been very
surprising after a week like this, of course things happen which people
don't like, and of course they blame the government, but the responsibility
of government is to govern for the long term, to face up to the hard choices,
yes, to listen to people, and we are listening, and to reach a balanced
judgement through the normal budget process, which takes account of all
of the interest, and not just those who shout loudest and not just those
who can string a blockade across an oil refinery.
HUMPHRYS: Let me give you a little
quote here. "We would not load a burden on the poorest, the elderly and
the most disabled people in this country and claim that it had something
to do with the environment." That was you. You may recognises the quote
from a few years ago, when petrol tax was approximately, the take, was
approximately half what it is today. Well now we're taking sixty-one pence
out of the pound, out of a gallon of petrol.... out of a litre of petrol.
If that's what was the situation back in ninety-three, what are you doing
now if that's what you felt in ninety-three?
SMITH: Well John, if you actually
look at the facts to this situation, what's been happening over the last
sixteen months, of the increase in the oil price only two pence is only
actually down to duty changes. As I said we've listened...... we took
off...... (both speaking at once)
HUMPHRYS: ... but it's now sixty-one
pence.....
SMITH: .... No...no...
HUMPHRYS: .... It was thirty-six
pence when you made that comment.....
SMITH: The Conservatives put on
the automatic escalator.....
HUMPHRYS: But you kept it going
and you increased it year after year .....
SMITH: ....and we listened and
we took it off.
HUMPHRYS: But you see you said
it was explicitly said that it was not fair when they started it, and that
that level of taxation was not fair. What puzzles me and puzzles a lot
of people I think is why if it wasn't fair then, when it was a darn sight
lower, it's fair now when it's a darn sight higher.
SMITH: Well, John of course, people
would like petrol prices to be lower.... (both speaking at once)
HUMPHRYS: ...Well, do you want
to answer that point, I mean do you want to answer that particular point...
SMITH: ...to be lower, because
I said that governments have to face the tough choices, they have to look
at things, we have to look at things.......
HUMPHRYS: But it wasn't fair then,
in ninety-three....
SMITH: We do have to look at the
balance between the way in which money is raised across different taxes
and duties just as we look at the balance across the different public expenditure
priorities. The point I am making is that it would be wrong to have the
economy lurching or short-term budget decisions lurching depending on blockades
one day or volatility on oil prices the next day. You have to take a balanced
and sound judgement in the interests of the people, in consultation with
the people and that's what we are doing.
HUMPHRYS: You make that point very
clearly. What you've not done is answer the point that I have just put
to you - that if a certain level of taxation of fuel duty was 'wrong' and
'not fair', your own words, back in 1993, how come, now that it is higher
than that, it's fair? I don't understand it.
SMITH: Well I've already said John
how we've acted to address the concerns in the interests of fairness and
as Gordon set out in the last budget we took the fuel duty escalator off
precisely because the oil price increase was making its effects onerous.
So we've listened to the concerns, we act in the interests of fairness
so it's worth recalling the number of bodies from the Daily Telegraph,
the Automobile Association to the Road Haulage Association who actually
welcomed the measures in the last budget. Daily Telegraph - 'the most
motorist-friendly budget for eight years...' they claimed.
HUMPHRYS: Well compared to what
had gone before .....
SMITH: ... but we have acted and
we have listened but we will not be dictated to by blockades and the people
of this country wouldn't respect us if we were and they won't respect Mr
Hague for giving comfort to those who blockaded our country.
HUMPHRYS: Alright. So the message
I take from all of that is that you cannot tell the protesters and all
the people who support them and if the opinion polls, unless every single
opinion poll is sensationally wrong, that's about ninety per cent of the
population who support their aims, you cannot say to them 'we're going
to do something to help you' so therefore in sixty days we're going to
have another crisis aren't we? Because that's what they say and they were
terribly effective last time and they're even better organised now.
SMITH: John, we can't be dictated
to by arbitrary ultimatums like that. I heard Bryn Williams...(both speaking
at once)
HUMPHRYS: ... but that was the
deal wasn't it....?
SMITH: There's no deal. I heard
Bryn Williams on the television earlier today on the Frost Programme and
I welcomed the conciliatory tone of his remarks and he urged people to
think very carefully and he said not to engage in intimidation.....
HUMPHRYS: ..... but the ultimatum
remains.....
SMITH: ...and he said, 'we will
not intimidate the government today'. And my message is: He will not
intimidate the government at all. But we will listen, we will meet with
representatives in the industry and of those who are concerned and these
factors will be taken into account, of course they will, as we draw up
the pre-budget report and as the Chancellor finalises his budget. But
it's wrong to say that we're somehow not listening if having listened and
weighed all of the considerations as a government has to we can't guarantee
that we're going to do what people want and actually it would be irresponsible
if we were to attempt to do so. Any hint that these things can be dictated
by blockade and by fluctuations in oil prices.....
HUMPHRYS: ....public opinion, public
opinion? I thought in a democracy that was pretty important.....
SMITH: I believe the public opinion
respects a government which listens, which takes their concerns into account
and which makes the right overall judgement of the balance on the way we
raise revenues, of environmental considerations and so on and how we distribute
public spending. It's getting that judgement right for the long term which
is important. The importance in the stability and prosperity of our economy.
I was very interested you see.... You talked a lot about polls and public
opinion and so on. When the BBC had that excellent Straw Poll debate the
other night...
HUMPHRYS: On Radio 4?
SMITH: Yeah. Listeners voted five
to two that this was a selfish action and not a legitimate protest. Now
you know if you're taking straws in the wind those views have to be considered
as well and we have to listen to the people who don't blockade oil refineries
not just those who do.
HUMPHRYS: Yes, but your problem
you see is that you've been rumbled haven't you, as a government. People
now recognise there's a game because you approve of the Radio 4 poll so
perhaps you'd approve of the MORI and the other polls that we've seen this
morning, NOP polls this morning and where they say they recognise now,
quite clearly, that you are a high tax government. You're a tax and spend
government. That's what you......
SMITH: No.
HUMPHRYS: Well let's look at the
figures: Tax burden 1999..... er ninety-six/ninety-seven, thirty five
point three per cent. Ninety-seven to ninety-eight, thirty-six point five
per cent. Next year thirty-seven point three per cent. Now that is a
very very clear increase in the tax burden and Alistair Campbell, your
own man, has acknowledged the tax burden is going to rise.
SMITH: We all know
that the figure is in the red book and it's thirty-six point nine this
year as compared to thirty-seven per cent - but let's get to the guts of
the issue here John. When we came into government we inherited a mill
stone of debt which the Tories had strung round the British people. The
national debt up to forty-four per cent (INTERRUPTION) of the GDP - borrowing
of twenty billion, now that had to be sorted out. Of course it did, of
course it did, and that is why this year the tax burden is falling.
HUMPHRYS: Next year it's going
up.
SMITH: Now, what actually happens,
the tax burden next year will depend on the decisions which are being made
in the Budget, but we are not, we are not a tax raising or high tax by
instinct government, and the proof of the matter is, and this is where
we have kept faith with the electorate, each and every promise that we
made at the General Election on tax, not to put up the basic rate of Income
Tax, not to -
HUMPHRYS: No, no, no, steady on,
hang on, I can't let you get away with that one because Tony Blair said
taxes, not Income Tax. Tony Blair said taxes will not go up, He didn't
say Income Tax, he said taxes, and taxes have gone up.
SMITH: Now, look, I'm just listing
for you all the promises we made and all the promises -
HUMPHRYS: Well, you missed out
that one didn't you?
SMITH: We didn't, we haven't put
up Income Tax, indeed the basic rate's been cut, the higher rate hasn't
been increased. We said we'd cut the rates of VAT on fuel and we have,
we said we'd bring in a ten p starting rate when it was prudent to do so
and we have. Moreover we've cut corporate taxes and given extra help
to small businesses and to savers, so we have been keeping our promises
on tax,........
HUMPHRYS: Well, eighty-five per
cent of the population do not believe that........
SMITH: ..when the Tories broke
all of theirs.
HUMPHRYS: Well, eighty-five per
cent of the population according to the latest NOP poll does not believe
that. They believe you have put taxes up, they now trust the Tories more
than they trust you not to continue doing it.
SMITH: The people will take their,
make their judgement in the proper way as we approach the General Election.
I'm absolutely confident that we will be judged on our record, yes of
keeping our promises on tax, but judged also on our record of economic
competence of building an economy in this country where we've sorted out
the huge debts we inherited from the Conservatives, where we've got a million
more people in jobs, where we have low and stable inflation, where we have
interest rates less than half the level they reached under the Conservatives,
where we are investing in skills, and where we are helping our essential
services with investment in the Health Service, in education, in fighting
crime and transport, and for that matter in agriculture to a scale that
the Conservatives could not match. And one of the things some of the farmers
are protesting would like to reflect about I'm sure is that six and a
quarter per cent real increase in agriculture investment we're making across
the next three years, the Tories haven't promised to match that. They
haven't promised to match our investment in education of what we're putting
in to fight crime, and the fact is their sums do not add up, they hint
that they would consider cutting fuel duty, although when you actually
pin Mr Portillo or Mr Hague down, they're not promising to cut on fuel
duty, but what is clear they are sixteen billion short on the commitment
to public services and investment that we have made, and that when it comes
to voting at the General Election people will be looking at all of these
matters in the round, and we will be content to be judged on our record
and the fact that we have listened in pushing those .....
HUMPHRYS: Alright, let's look
ahead, we've only a short time left. In the longer term future are you
prepared to say to people: If we think it's necessary and there are difficult
views in one area or another, we have these odd emergencies that crop
up all the time, we would actually, we a Labour government would be prepared
to ask you to accept a tax rise in order to spend more money on the public
services that are so important. Is that your general philosophy?
SMITH: Well, first of all everything
we do in this parliament is governed by.....
HUMPHRYS: Now, I'm asking you for
the future....
SMITH: The promises we made at
the last....
HUMPHRYS: You've got ten seconds
left.....
SMITH: General Election, we are
not by instinct a high tax party, we will fund a good level of public services,
not only by building a strong economy as we have, but making it even stronger
for the future. That's the way Labour keeps faith with the British people.
HUMPHRYS: Andrew Smith thanks very
much indeed.
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