BBC On The Record - Broadcast: 11.03.01

Interview: ALISTAIR DARLING MP, Social Security Secretary.

Have the Government learnt any lessons from the Hinduja passport affair? And why won't minsters say that taxes have increased to pay for better public services?



JOHN HUMPHRYS: Two big events for the government this week: there was the Budget, generally welcomed and seen as a suitable launching pad for the coming election. And there was the Hammond Report published into the Hinduja brothers' passport affair. Not welcomed at all. On the contrary, most papers and observers seemed to think it raised more questions than it answered. Instead of drawing a line under it all, it invited accusations of "whitewash" and "cover-up". So has the government been damaged and what lessons might politicians learn from the whole sorry saga? The Social Security minister is Alistair Darling and he's in our studio in Inverness, where the Labour Party is holding its Scottish conference. Good afternoon Mr Darling. ALISTAIR DARLING: Good afternoon. HUMPHRYS: We'll come on to the Budget in a minute if we may but let's look at the Hammond Report. You can see why people get cynical about politics and politicians and governments can't you, reports come out that say absolutely nobody was to blame, things happened that were regrettable but absolutely nobody is to blame for it. In this particular case they will look at the fact that the Hinduja Brothers not only got their passports faster than almost everybody else, there were serious questions raised about their own characters, they hadn't even met the basic requirements. All of these things happened yet nobody was to blame, nothing wrong was done. It's all cynicism inducing isn't it? DARLING: No, if you remember the inquiry was set up to establish whether or not Peter Mandelson had improperly influenced the application made by the Hinduja Brothers in relation to their passport. That was the allegation that was made against him by some people at the time of his resignation. The Prime Minister expressed confidence in him and said that he hadn't done that but felt it right to ask for there to be an independent inquiry to find out whether or not there had been any improper interventions. Now, the inquiry has concluded that there is no evidence to suggest that there were...there was anything improper. That's the conclusion it's come to, we should accept that and let's move on and let's deal with the other issues that I think frankly are of greater importance to the public which we are about to discuss on the Budget and so on. HUMPHRYS: Well indeed we are going to discuss that though, neither you nor I knows what precisely the public makes of all this and I think it is entirely reasonable to raise a few more questions about it because they are being raised in the newspapers and by many other people as we speak. So let me just try to pursue one or two areas here. Mr Mandelson was clearly in no doubt that help had been given to the Hinduja Brothers and I say that quoting the report. The report, Hammond tells us that Mandelson wrote a memo in November '98 saying they couldn't expect - and I quote - "any further involvement or commendation from me" now note the language there "any further involvement or commendation from me." So clearly there had been involvement. DARLING: As I said to you the central question that Hammond was asked to investigate was whether or not there had been any improper intervention on the part of Peter Mandelson in relation to these passport applications. Now, his conclusion was that there hadn't been anything improper. Now, I appreciate that other people may be raising all sorts of other questions but the central question put here was: was there anything done improperly? - the answer was there is no evidence to suggest that it was. That means that Peter Mandelson is free to resume the rest of his life, to get on with whatever he wants to do and you know that is how matters stand. HUMPHRYS: But there had been involvement on Mr Mandelson's part quite clearly. Jack Straw, the Home Secretary, himself said - and again I get this information from the report as you will know, he wanted another brother's case, another of the Hinduja Brothers, Prakash, to be dealt with and I quote "helpfully". Now, that again raises doubts about their treatment doesn't it. He didn't say let's deal with it in the normal way, without any preferential treatment, he said "helpfully". There's only one interpretation of that word helpfully isn't there. DARLING: I don't want to over labour the point but remember the inquiry was set up at the time that Peter Mandelson resigned in order to ascertain whether or not Peter Mandelson had done anything wrong in relation to these passport applications. Now, that was the allegation being made against him. It was an extremely serious allegation, that's why the Prime Minister asked for there to be an independent inquiry to examine whether or not anything improper had been done. Now the conclusion was that Peter Mandelson did not do anything improper. So having had the inquiry and having got the conclusions of the independent inquiry, surely the best thing to do is to accept those conclusions, had they been different then all sorts of other things might have arisen. But, the fact is that Hammond looked at what Peter Mandelson had done and came to the conclusion that he'd done nothing improper. That was the question he was asked to investigate, that was the allegation being made against him at the time he resigned and you know the conclusion is that there was not evidence to support any suggestion that Peter Mandelson had done anything improper. HUMPHRYS: Well there were a whole series of allegations and concerns being raised at that time and the fact that Mr Blair chose to base the inquiry on such a narrow question raises questions in itself. I mean let us move, you're obviously reluctant to go into any more detail about the report, you want to draw a line under it, fair enough but let's move beyond the remit of the report itself because there are broader issues of principle involved here - how ministers deal with rich and powerful people and in this case people whose character had been very seriously questioned. We now know that there was a Home Office memo and again we are grateful to Hammond for this, dated March 1991, that advised and I quote again "Ministers against accepting invitations from the brothers" The brothers Hinduja that is. That was back in 1991 before you even came into power. It remained in force, obviously you don't withdraw memos like that and yet ministers did indeed accept invitations from the brothers, became quite closely involved with them. DARLING: Well, look, I haven't seen that memorandum. I know it's referred to - but let me come back to the point that you started off with, it's a perfectly fair one and that is the..you know about people's image of politics and politicians and let's go back to the time when Peter Mandelson resigned. The allegation being made against him then was that he improperly intervened and did something he shouldn't have done in relation to these passport allegations. Now the Prime Minister announced in the House of Commons that he was going to ask Sir Anthony Hammond to hold an independent inquiry to ask whether or not Peter Mandelson had done anything improper because clearly it is crucially important that ministers do behave properly and there is no question as to their conduct. Now, Hammond conducted that inquiry, he has come to the conclusion there is no evidence to suggest that Peter Mandelson behaved improperly. So the question was asked, Hammond looked at it and it was answered. Now I do appreciate that there are some people who then say, ah well there should have been lots of other things and other questions asked and so on. But the point is, that the Prime Minister told the House of Commons what it was that he wanted Hammond to look at because the issue, the allegation against Peter Mandelson was extremely serious. It struck at the heart of ministerial standards, that's why he wanted it looked at independently. He did have it looked at independently and the conclusion - I repeat - is there was no evidence to suggest that Peter Mandelson behaved improperly. HUMPHRYS: But.. DARLING: I think that is actually critically important because I do think it's important that all of us, all ministers act entirely properly and... HUMPHRYS: Ah, well that's what I want to come onto.. DARLING: ..well, you see Hammond was asked to look at whether or not Peter Mandelson had done anything that was improper, he looked at it and came to the conclusion that he didn't. Now that's the conclusion, you know I appreciate why you are asking me these things but I do think that having asked the question. The question having been answered and there being no evidence against to suggest that Peter Mandelson behaved improperly, he can get on to lead the rest of his life and I think the government can get on with delivering on the central promises that we made in the last election and which people will judge us. HUMPHRYS: And I'm going to come onto that in a moment but I'm trying to broaden this out a little bit you see because you keep returning to the very specific allegation against Peter Mandelson which is... DARLING: ..which Hammond was asked to look at... HUMPHRYS: ..which is indeed and some people said that it should have been broader, some people said, alright, you know, and you're saying that was fine. What I'm trying to do and you talk about ministers behaving properly or otherwise, what I'm trying to get from you in a sense I suppose, is your definition, this government's definition of what is proper behaviour. Now can it ever be right, can it ever be right? Put aside this particular affair. Can it ever be right for ministers to make special representations, on behalf of very rich and sometimes powerful people who have the kind of access that normal people do not have. Can that be right? DARLING: Well, all passport applications, or whatever other business before government or its agencies has to be dealt with properly. But you know, I didn't apologise for coming back to the central question that Hammond was asked because that's what he was asked. HUMPHRYS: Well I'm trying very hard to get away from that. DARLING: I know you are... HUMPHRYS: ...and I'm puzzled that you don't want to address the broader question. DARLING: I know you are but remember at the time, on the day, or the days surrounding Peter's resignation, the allegation being made against him was an extremely serious one... HUMPHRYS: ...I'm aware of that, you've made that point several times... DARLING: ...I know and it was extremely serious and it was very specific. Now it's been looked at. Now what you're finding is people said, ah well, there isn't evidence on that one, how about some other issues. Now, all I'm saying to you is that is an allegation is made against Peter or against any minister, it does need to be looked into, if anything is...that has been done improperly then that has to be dealt with, but in this case, you know, the allegation, the central allegation, the serious allegation made against Peter Mandelson was made, it was investigated by an independent Queen's Counsel. He has come to the view that there is no evidence to support that allegation and you know, for that reason, the allegation having been unfounded, Peter is free to get on with the rest of his life. HUMPHRYS: You make that point. But let me try and approach it from a slightly different way then. Let us assume that I have a very rich Indian friend if you like, who happens to be living in this country, desperately wants a passport, British Passport, doesn't have one. I come along to you, I have access to you, I see you occasionally, or one of your colleagues and I say look, can you help out here? Can you, you know, make representations on his behalf. What would you say to me? DARLING: What I would say to you is that all applications for whatever it is have to be dealt with properly and you know I have no hesitation in telling you that. HUMPHRYS: Would you pass that request of mine on. I mean would you say to somebody in you know, the passport office or somewhere else, would you say, oh you know, Humphrys has asked me...you know, would you do that? DARLING: Well, so far as passports are concerned, you know, what I would say to you, whatever the procedures are, they have to be followed properly. You'll understand that I don't have ministerial responsibility for the passport office but whatever the procedures are, if you came to me and you asked about your benefits.... HUMPHRYS: ..yes but neither did Peter Mandelson... DARLING: ....I would then tell you what you ought to do and the procedures would have to be followed properly. But you know, let me come back to the point, I mean there was an allegation made against Peter Mandelson, it was serious one, it was dealt with. Now, you know, you can raise all sorts of other issues, but surely, you know, I think what the public wanted to see is that allegations having been made, were they right, were they wrong? An independent inquiry was held and it was found there was no evidence... HUMPHRYS: ...well I may be wrong about this... DARLING: ...whether your like it or not, that is the conclusion that Sir Anthony Hammond reached. That's why you know, frankly, you know, we have to draw a line under that and we have to move on, you know, as I say... HUMPHRYS: ...you have drawn a line under it and I have accepted the line that you've drawn. I have tried to move on and I have tried to raise this issue, which, I'm quite sure and I'm sure you're sure as well, concerns a lot of people and that is the fairness, not favours, that this government is supposed to represent because Tony Blair used that expression himself and what I'm trying to get at is this, to what extent should rich and powerful people be able to have the kind of access to have representations made on their behalf that the others of us cannot do, many people cannot do. Now you say that in Peter Mandelson's case, that if I were to ask YOU for help with a passport application, you'd say, nothing to do with me whatsoever. Well, it was nothing to do with Peter Mandelson whatsoever. DARLING: That wasn't what I said John. No, no, you were asking me quite separately that you, on behalf of a friend or whatever, you gave as an example and you asked me about procedures in the passport agency. I just made the point, that you know, I couldn't tell you off-hand what the procedures are. What I do say though is, all procedures, doesn't matter whether it's passports, benefits, whatever it is, they have to be done properly. Now, you know, I don't want to labour the point but I will do because I think it is actually important. The allegation was made, the allegation was investigated, and it turned out, there were no grounds to substantiate it. Now whether you like it or not, that's how the matter was dealt with, Peter has been cleared of any impropriety, he can then get on with the rest of his life, that is it. HUMPHRYS: Well, of course he can't entirely get on with the rest of his life because he can't come back into government even though he's done absolutely nothing wrong, but there we are. I suppose we'll have to draw a line under that as well and puzzle about that for some time. But you seem to be saying this morning Mr Darling that nothing's been learned about this because, by all of this, because there was nothing to learn. A line has been drawn, Peter Mandelson's been cleared, and that is the end of it. Yet this morning we now see more allegations in the papers, Tories now calling for an inquiry into the way that the Foreign Secretary, Robin Cook, behaved over a leaked report from the Foreign Affairs Select Committee. You are still presumably then, whiter than white, as you said you would be when you came into power, nothing at all to worry about. DARLING: You know, as I said to you, ministers have to appear to have to behave properly at all times. If allegations are made, as they were in Mandelson's case, then let then be investigated. HUMPHRYS: ...and as they have now been in Robin Cook's case - should there be an inquiry? ... DARLING: ...having investigated them and a conclusion having been reached, then you really have to accept that conclusion. HUMPHRYS: Right. DARLING: Now, I haven't seen these other things and I am not going to comment on them. HUMPHRYS: Well you could say, let's have an inquiry into Robin Cook, couldn't you... DARLING: ...what I would say to you is, you know, coming back to this Peter Mandelson affair. An allegation was made, it was investigated, it was found there was no evidence to justify that allegation. Now that seems to me the right way to deal with any serious allegation made against ministers or anybody else but having got the conclusions, you then have to accept those conclusions. HUMPHRYS: Alright, no comment on Robin Cook whatsoever? DARLING: I haven't seen the story - sorry. HUMPHRYS: Okay, we'll leave it there for the moment then, because I want to get onto the Budget which some people might say is another reason for cynicism, a different sort of cynicism, but nonetheless the government says one thing about the level of taxation and they discover that something else is actually the case. The government says that taxes haven't gone up and then they look at the figures and discover from independent sources, discover that taxes have gone up. It would be much better to be straightforward and honest about this wouldn't it, but that's cynicism then? DARLING: Well, all the figures are published in the publications that the government issues on Budget day. We make no apology for the fact that in the first two years of this government it was necessary to take action to repay, to get rid of the debts that the Conservatives had run up. We were paying more on debt interest than we were on schools. As a result of what we've done following last Wednesday's Budget, we're now spending ten billion pounds more on schools than we are on debt. So, I make no apology for the fact and everybody knows that not only did we clear up the mess the Tories left, but we've naturally been able to reduce debt. Now, as far as taxes are concerned, as you know the tax burden next year is projected to be less than the Tories predicted in the year before they left office. We have, over the last three to four years we have made it our business to make sure there are targeted tax cuts for example to families, the new Child Tax Credit which is coming in from next month, worth ten pounds a week, the Working Families Tax Credit, the new ten pence rate which we introduced, and which Gordon Brown widened, all those things have contributed to the direct tax burden being the lowest it's been since nineteen-seventy-two. But on top of that, we have got done more and more each year to make sure that families, to make sure that pensioners and others all benefit as we're able to do more because of the improvement in the economic situation, all built I may say from a stable economic background without which you're not able to do anything at all. HUMPHRYS: Nobody listening to that answer would make the assumption, which is indeed the case, that we now have the highest tax burden, if you exclude oil, since nineteen-seventy. DARLING: Well, look John as I said to you, at the beginning of this parliament, in the first two years we had to take steps to clear up the deficit, the mess that the Tories left. We've done that. Since then we have reduced the taxes paid by families, we've introduced the... HUMPHRYS: By some families, by some families. DARLING: the starting rate of tax, we've introduced the Working Families Tax Credit, the Child Tax Credit which will benefit families starting in a few weeks' time from the beginning of April. So yes, we've done that and I've said to you.... HUMPHRYS: But you haven't, ... DARLING: ..with the tax burden, with the tax burden, from next year, you know is actually lower than the Tories projected. But what we're doing here, sorry - you ask your question and I'll certainly..... HUMPHRYS: Well, I just wanted to pick up that point you see, because you said we have reduced taxes. The fact is - and you said for families - but let's be a little bit more specific. The average tax bill, the tax bill for the average family has gone up by one-hundred and seventy pounds per annum, and that is according to Grant Thornton, a very distinguished firm of accountants as reported in the Sunday Times this morning. DARLING: Yes, but John, as I said to you, in the first two years, yes, we had to clear up the debts that the Tories left us because if we hadn't got the economic stability that we now had then we would not be able to improve public services, we'd not be able to reduce taxes to help hard working families, to help families with children. Now what we have done since we were elected, in the course of the Budgets are I think three things, firstly we've put in place the new economic stability on which you can increase money for public services, which you can actually afford tax cuts for families and for others as well. Second thing we've done is that we are investing in public services in this country, there's more money for schools and hospitals, there's more money going into transport and then thirdly as last Wednesday's Budget has shown, building on the stability we've a balanced Budget, not only did we help improve public services but also on top of that we've been able to cut taxes for everyone through extending the ten pence band, and also more targeted tax as cuts on families with children through the Child Tax Credit as well as for other people as well. Now all of that is a balanced approach and it stands in complete contradiction to what the Tories are about promising unfunded unbelievable tax reductions before the election. They know they can't afford them, they haven't identified a single penny of savings, credible savings to pay for them. If they did all that you'd be back to increased inflation, increased interest rates, back to boom and bust. So the choice actually is between targeted tax cuts, stability, better public services, than back to the Tory boom and bust. My guess is that public actually want that stability with better public services. With targeted tax cuts, extending the ten pence band, that is a far, far better approach. HUMPHRYS: My guess is that the public would like absolutely straightforward explanations of what's gone on, and you could have summarised all of that by saying "Yeah, of course we've taxed people more, we have", because there's no doubt about that, the figures quite clearly show that you have taxed people more, "and we've used it for a bit of extra public spending and we've used it to give a targeted few people a bit of extra cash in their pockets, but an awful lot of people are worse off and not better off" That's the simple, straightforward non-cynical explanation of what's happened isn't it. Why can't you just say yes to that? DARLING: No, it isn't John. This year's Budget has seen a reduction and gains for just about everybody. Now, what we wanted to do, was to make sure as I said to you, was that we maintained the stability, the economic stability without which you're not able to do anything at all, as the Tories found out. We wanted to improve public services and heaven knows, there are people up and down this country who say yes, our schools and hospitals need more money. People know the transport system cannot continue without more investment, and we're putting that investment in. But what they also want to see the government do is to make sure that it reduces taxes especially for people who need that help most, for example with families with young children, and you know within the first year of a baby's life the Child Credit will give families nearly a thousand pounds more. Now, all that I think people accept, and what they want to see is a balanced approach. They want to see stability, they want to see better public services, they want to see targeted tax cuts, they do not want to return to unaffordable, unbelievable tax cuts which the Tories are promising, cuts in public services which the Tories are bound to implement because Portillo has said it over and over again, back to the old boom and bust which was so damaging for jobs, so damaging for people's houses. People don't want to go back to that. HUMPHRYS: A final invitation then, to you to be entirely straightforward about this, and that is that after the election you're going to have to put taxes up again aren't you because this is what's going to happen if we want to join the Euro. The European Commission as made this perfectly clear, they're going to have to go back up again aren't they in the next couple of years? DARLING: What we have done in the first four years of this government is to make sure that we have a new economic stability. Gordon Brown has time and time again made it clear that everything he does will be prudent, it will be affordable. We're reducing the debts that the Tories left us with. Because of that we're able to improve public services, we're able to do more to give targeted tax cuts to families, to other people in this country, widening the ten pence band of Income Tax which benefits everyone, and at the same time make sure that the economic situation in this country remains stable, it remains run in a prudent way. Now people want that stability, they want better public services, they want targeted tax cuts, they do not want to go back to the Tory boom and bust, the sixteen billion pounds and more of spending cuts that the Conservatives are now signed up to. They want stability and in that way they'll have jobs and they'll have the optimism to which I think most people want to look forward to. HUMPHRYS: Alistair Darling, thanks very much indeed for joining us. DARLING: Thank you.
NB. This transcript was typed from a transcription unit 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.