BBC On The Record - Broadcast: 24.06.01



==================================================================================== 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 ==================================================================================== ON THE RECORD RECORDED FROM TRANSMISSION: BBC ONE DATE: 24.06.01 ==================================================================================== JOHN HUMPHRYS: Good afternoon. Conservative MPs will soon choose the men whose names will go forward to lead the Party. I'll be talking to two of the candidates. The government's facing trouble over its plans to give the private sector a bigger role in running the NHS. Will it hold its nerve? And there are plans to lock up more criminals. But will that cut crime? All that after the News read by Sarah Montague. NEWS HUMPHRYS: We'd like all our hospitals to look like this private one. Should the government give more control of the NHS to private companies? DAVID HINCHLIFFE MP: I think that many of the examples of services that have gone from public into the private sector - Raitrack for example - very topical at the moment, don't auger well for what could happen in the National Health Service. HUMPHRYS: And prison works .... or so the government seems to believe. But does locking up more people really make a difference? JOHN HUMPHRYS: First though the leadership of the Conservative Party. In the next few weeks Tory MPs will have to vote on their choice. The names of the two who get the most votes will then go forward to the constituencies and the whole party will make the final decision. Who will it be? We have two of the candidates with us this week, both regarded as being on the right of the party, David Davis, and first Iain Duncan Smith. Mr Duncan Smith had a life before parliament. He was in the army as a regular officer. He was elected in 1992 to Norman Tebbit's old seat. When the Tories lost power five years later he was appointed to the Shadow Cabinet in charge of Social Security. Two years ago he became the Shadow Defence Secretary. Mr Duncan Smith, good afternoon. IAIN DUNCAN SMITH MP: Good afternoon. HUMPHRYS: The one constant theme throughout this race, indeed, since the election has been - we must break with the past. Now you are regarded as Margaret Thatcher's one, what was Margaret Thatcher's one as, yes as one of Margaret Thatcher's people. Difficult for you to do that. DUNCAN SMITH: Well my view is that yes, we have to make a clean break from what the public perceive of us in the past and I think that's very much pre 1997 and that's one of the reasons I'm putting myself forward because I wasn't in the 1997 government and I recognise even at the last election sadly, but the public still saw us in terms of 1997 so, I think we do need to make a break and it's got to be a clean break, too many of the people that perhaps were involved then may well be involved again and I think we need to show that something has changed. HUMPHRYS: So that means saying, thanks very much indeed for all you've done but goodbye Lady Thatcher. DUNCAN SMITH: Well, Lady Thatcher, let's, let us if we could just if we could for a second look at this. What did Lady Thatcher represent? In the 1970s, you know the dead concensus that you couldn't challenge state-owned industries, that we were on a decline that had to be managed. What really Thatcherism was about was about change, it was about the Conservative Party suddenly realising that they could challenge all of these things, having the boldness and the foresight to do so and literally turning Britain around, so when we say "what was Thatcherism?" it was about a process of massive change and that's really what we've got to go through again, it's not to argue about the same things as we were arguing then, it's to actually say, the new agenda, to look at now the new dead hand concensus of public services, health, welfare, education, we've now got to challenge those and say people want choices in their lives, they want solutions, they don't want to know whether it's state or private, they want to know how it works for them, that's the key. HUMPHRYS: So in that sense, the Thatcher revolution if that's what it was, isn't over. DUNCAN SMITH: Well the concept of change is now where we need to be. We need to change again to take on what I think is a failing concensus but it's not to do with Lady Thatcher's last agenda, it's a new agenda, it's not the last ten years, it's about the next five and ten years. HUMPHRYS: But as you're very well aware, she is a mighty powerful symbol if nothing else now in the Conservative Party. Would you like to see that symbol, I don't know what you do with symbols, de-symbolised - or whatever you do with symbols, demolished, or? DUNCAN SMITH: Well parties move on. We move on. It doesn't mean to say we lose sight of our history or the things that we're proud of, and we are proud of the changes we made, but we now have to make our values adapt themselves to what are the new requirements, that's all and so, it's my generation who will have to do that as we move on, so yes, I mean you just remember the good things, but you know that you have to make these changes and do so without fear or favour. HUMPHRYS: But you wouldn't want to be seen for the purpose of this election as Thatcher's choice, let's put it like that? DUNCAN SMITH: John I'm my own man, if there's nothing else in politics I like to think I've shown is that I have a mind of my own and I'm prepared to back it, so I am my own man and if people want to support me they do so on that basis. HUMPHRYS: Alright. Let's look at what the great debate, part of this debate is about and that is inclusiveness, we've heard a great deal from one of your rivals, Michael Portillo, about the need for that. You've said "we need to be more tolerant" so, are, let's try and test that in a couple of areas, should relationships between gay couples, should stable relationships as they are now described, single marriages and so on, should they, single parenthood, should they be just as valid as the traditional family in terms of Tory Party thinking? DUNCAN SMITH: I think the Conservatives have got to look at this from a completely different perspective. They've got to ask very carefully how society actually works. Out there, the vast majority, their experience is bringing up children in a stable married relationship, that's the fact of life, some... HUMPHRYS: ...an increasingly small majority though. DUNCAN SMITH: Well it's not as small, I mean it's between, it's you know about sixty, sixty-four per cent of all children... HUMPHRYS: ...but shrinking? DUNCAN SMITH: Yes. But that's the key question we have to ask ourselves. We know that the core of a stable society is in that framework. If that is destroyed or broken then society itself will be the less and so we recognise that what government has to understand and this is my point, it's what has it done to put the pressure on that relationship to break it down, the regulations, the taxes, the way in which people can't make choices about education in their own lives, we need to redress that, so we need to be more positive about that aspect, at the same time, we do need to recognise that there are other, other relationships, other lifestyles out there, which themselves for the sake of the children and others, we need to be a little more positive about in the sense that, you know there are, through no fault of their own, a lot of single parents out there, most of whom are there because of divorce. You know, they want to know how they're going to be able to make the choices in their lives about bringing up their kids and so we need to have messages for them as well, so it's a balanced ticket, but we don't, you don't enhance the structure of society or help it, if you attack the basic core structure. What you want to do is take the pressure off them, because that'll stop the breakdown on the margins whilst addressing that problem of single parents. HUMPHRYS: You say you need to be a little more positive about those other relationships. My question really, I suppose, is are they - those other relationships as you describe them and the traditional family, are they equally valid? DUNCAN SMITH: Well they are valid in terms of the people who are bringing up their children.. HUMPHRYS: ..no but I mean in terms of... DUNCAN SMITH: ..and they must be valid to us.. HUMPHRYS: ..and in terms of your estimation, in terms of the Conservative Party's estimation of their importance to society and all the rest of it - are they equally valid. In other words are you as happy with the other sort of relationship that you described as with the traditional family? DUNCAN SMITH: Well we have to be because, you know, single parents - perhaps in the majority of cases for no fault of their own are having to struggle to bring up their kids. We need to have a message that says 'look, we want to give you the choice and the power over your own lives. We recognise that your choices are more limited but we want to make sure that you do have something that we can give you some of that choice'. But, and this is the important but John, the problem with the present government is they have done that by attacking what I would consider to be the core structure and all they are going to do is break that down faster. That will end up with more and more people facing the limited choice that I've been describing. So you succeed over this by actually enhancing, by strengthening the structure which brings up kids, two parents. You want to have a strong and powerful message to them but at the same time you need to have some message that goes towards the others saying we know your problems, we want to assist you with those. HUMPHRYS: But let's put messages to one side for the moment and consider actions. Would you therefore have, or would you not have, tax breaks aimed specifically at the traditional family? DUNCAN SMITH: I think that the amount of tax that married couples, that are bringing up kids have had to pay over the thirty years has risen disproportionately, I mean, back in the 1960s a married couple with one child, a blue collar worker, C1s as we call them now, they would have been paying tax at around about a hundred and thirty per cent of a single person's income, they are now paying tax at something like seventy per cent of a single person's income. In other words they are paying tax earlier and thus paying more tax and that puts huge pressure on them. So when we look at that we say, why does government need to punish them for doing something which they actually know they are doing for the benefit of their kids. HUMPHRYS: So you would seek policies, you'd look for policies that benefited them specifically.. DUNCAN SMITH: ..as a group. HUMPHRYS: ..as a group. As against the other sorts of relationships. DUNCAN SMITH: No, because this is the other point you see... HUMPHRYS: Well you can't benefit...you can't prefer one or the other without the other suffering. DUNCAN SMITH: Well this is the ridiculous stale choice that we are talking about. I mean the present government is doing just that and previous governments have failed to recognise it. My point is that by taking the pressure off that group you will help stabilise that marginal breakdown, at the same time, you need to be able to say to, as I said earlier on, single parents trying to bring up kids in difficult circumstances, perhaps even on marginal incomes, and I'm very passionate about this, you need to be able to say to them, there are reliefs and ways in which we can help you make choice if you have to have your children being looked after during the day so at least that choice is a good one, that you are not restricted by the pressure on your income, that is because the government is taking too much in tax away from you, you can make those choices. So, a message to one group is a similar message to the other but recognising their choices are a little bit more limited. HUMPHRYS: What about homosexual relationships for instance? Would you offer them any help through the tax structure. Some of them of course have children. DUNCAN SMITH: Some of them do but it's a very small minority. I think what we have to do is deal with the core group of people. The two groups that I am deciding about here with children are actually what the real problem is all about, it's about that marginal breakdown and I was saying earlier on this week that we need to look at the Welfare State in terms of the welfare society. We need to look at how to strengthen what is really delivering welfare out in the country, its people going about their lives, looking after their mothers, their elderly parents, their sick relatives, doing so without state aid but being pressured because the state takes more and more off them and cuts their choices down. So I am simply saying, the more we can do to be positive to that group, the more we can do to take that pressure off them, the less of the breakdown on the margins there is and thus the state picks up less people. HUMPHRYS: Sounds very much to me like the sort of thing that you were saying during the last election. Doesn't seem as if you've changed anything there. DUNCAN SMITH: Well I think the problem may have been at the last election was (a) partly the rhetoric and (b) also that we needed to expand that message to have something positive, much more positive to say to those who were in difficulties as single parents trying to bring up their kids... HUMPHRYS: ...but I'm not quite sure what you're saying now that is much more positive than... DUNCAN SMITH: ...well because I don't think we had a strong message there, I don't think we had any particular position that we had enunciated at the time that we actually announced, and so my point is you get a much more balanced ticket across and your rhetoric then matches that, you know you have a sense, and they should have a sense that what we are is a party that really believes that whoever's bringing up children at the end of the day needs to have more of their own and more choice. HUMPHRYS: What about Section 28 which has something to say about the promotion of homosexuality or at least that's how it's interpreted, Steven Norris has said it is homophobic nonsense, what's your view? DUNCAN SMITH: I don't agree that it's homophobic, I recognise... HUMPHRYS: ...so you still support it, do you, you want to keep Section 28? DUNCAN SMITH: Well, to be honest, let's put it in context, the present government has no plans to scrap it and my position is that, look what it's trying to do, and it may do so in a rather unbalanced way, I recognise that, we may need to look at that, but what it's trying to do is just protect children from influences from the state using adults to try and swing them one way or other... HUMPHRYS: ...but you understand that it's a very important touchstone isn't it, it's one of those issue that... DUNCAN SMITH: ...I understand that, John I understand that and I think that's one of the areas we need to look at, I mean the Scots have looked at solutions to this, we perhaps need to look again at this, but my...the real point we mustn't lose is it is important to protect minors, children away from influences before they are able to make rational choices and I think that's the key. So, as has been said, time and again, the principle of what it's trying to do needs to be upheld, whether it then looks to a particular community as distinctly against them, well clearly one needs to take that into consideration but the principle I think is important. HUMPHRYS: But you see, if what you were saying earlier about the two sorts of families being equally valid lifestyles, why would that matter, why would Section 28 matter at all? DUNCAN SMITH: In which context? HUMPHRYS: Well, if what you do not want to happen, this is what Section 28 does not want to happen, is that the teaching that there is no specially good relationship, that both lifestyles are of value and that is what some schools had taught until Section 28 came along, some still do of course, now what... DUNCAN SMITH: Well, with respect John, there is no evidence at all that any school has been curtailed in talking to children about lifestyles and about their behaviour. That's not the case, there's not one single teacher that I'm aware of that's said to anybody this has created a problem for them. We're not dealing with it from the practical point, you are talking about it, maybe legitimately as a totem, that's a different argument altogether. Practically, it had no effect on the teachers, it only had an effect on saying that public money from the local authority should not be spent in promoting, that was the big difference... HUMPHRYS: Alright... DUNCAN SMITH: ...so maybe as a totem, maybe there are problems but not certainly in practical effect. HUMPHRYS: Let's change the subject and look at Europe for a moment just to try and assess where you are on the continuum as it were, you wanted a line drawn in the sand in Europe in, way back in 1992, since when that was after one treaty, we've had three treaties since then, none of which you have wanted because you wanted that line drawn way back then. How can you stay in a Europe that has gone so hugely wrong from your perspective? DUNCAN SMITH: Well actually quite a lot of it is going wrong from the perspective of a lot of other people, you know the Irish referendum... HUMPHRYS: ...sure ... DUNCAN SMITH: ...what was going on in Sweden... HUMPHRYS: ...so how can you, how can you stay in the European... DUNCAN SMITH: ...well because I think Britain has a role here, I think it is our role, if not our destiny to be able to reshape the debate that is Europe at the moment. HUMPHRYS: But you can't rewrite all of those treaties, you can't rewrite the last treaty... DUNCAN SMITH: ...I don't know why you should be so pessimistic about what we can do. It takes bold leadership. Well you'd have said in the middle 1970s you can't take on the consensus as said, Britain is into decline, my answer is you can take anything on you if you have the courage to do it. What we need to argue for is a European Union that is flexible, that allows various countries to develop in their own ways, that isn't hide-bound and heading down some road, some artificial road towards a superstate. We want to break all of that. HUMPHRYS: But if it continued to do that, that's to say, in your view, that's to say if it continued down the road of greater integration you would stay in, come what may? DUNCAN SMITH: I think what we have to say is this is no longer the agenda and we would simply not want to sign up to this perpetual process down towards some superstate. In fact, as I say, the irony is, if Britain were but to carry on that argument, we would find alliances now across Europe amongst peoples who are frankly fed-up with this political elite in Europe that drives on with no other purpose other than they have some vague political dream to create this state. We want to have a Europe that works, trades, co-operates, functions together but recognises that the nation state is not just valuable, it is vital to keep people's allegiances and to understand how democracy works. Break that, and you break it at your peril. HUMPHRYS: Iain Duncan Smith, thank you very much indeed. JOHN HUMPHRYS: So, to our other contender David Davis, who also launched his campaign just a few days ago. Mr Davis had a successful business career before he became an MP in 1987. John Major made him the Minister for Europe in his government. He served for three years. He did not join the Shadow Cabinet when the Tories were thrown out. Instead he became the chairman of the powerful Public Accounts Select Committee - the committee that holds the government to account for the money it spends and he has rapidly moved into the seat vacated by Iain Duncan-Smith. Good afternoon, Mr Davis. DAVID DAVIS: A new skill acquired. HUMPHRYS: A new skill, well done. Your colleagues seem to want, your colleagues in the party seem to want to take back the centre ground, that's how they seem to think they can recover their position. But you are coming from the right. DAVIS: Yes, I don't think the centre ground is a good description. What we have to take back is that part of the political agenda that the public care most about, have cared most about actually for fifty years. That is public services, law and order, health, education and of course the economy. At the moment the economy is going fine, so it's the other three they care about. HUMPHRYS: But it's on the economy, it's on economic policy that you mostly, it seems to me, want to have, what was the phrase we used to use all those years ago - clear blue water - let's resurrect the phrase clear blue water for the purpose - I'm trying to remember who said that, one of your party chairmen I think wasn't it, way back when, Jeremy somebody or another. Anyway, you want to promise bigger tax cuts, that's what you are about isn't it. DAVIS: Well, I think it's a bit more complicated.. HUMPHRYS: Yeah, but let's try and deal with things that people will understand clearly, that's one of the positions from which you come. DAVIS: Of course, we want a lower tax economy but there are good reasons for that which actually impinge on public services as well and it's very simple, if you have low tax rates, you get high growth rates. If you have high growth rates, you get high tax takes and that allows you both to increase spending and continue the decline in rates as you go along, that's what happened in the 1980s, Margaret Thatcher successfully did that in the 1980s, we lost that, the grip on that at one point and the government is about to throw it away again. HUMPHRYS: So, that means that you would offer bigger tax cuts next time around if you had the choice? DAVIS: Well I think we have got to look very carefully at what we can do to save money, bear in mind... HUMPHRYS: But why do you even have to think carefully about - you've just made a very convincing case, some people might think, for a lower tax economy, therefore it follows you would offer bigger tax cuts. Unless of course you are spinning me here. DAVIS: No, no, you know I don't believe in spin. HUMPHRYS: Well that's what you say, we'll test that in that next few minutes. DAVIS: You can test that as you say in the next few minutes. But firstly, a low tax economy will deliver both more money into people's own pockets, we are not taking away their money afterall. Secondly, it will deliver more growth and it's growth that actually generates the income out of which we can pay for greater public services. To do that, to get on that virtuous cycle is the hardest part and you do that by attacking the waste inefficiency and the method of delivery of public services. HUMPHRYS: Which of course is what every single government since the year dot has said it will do, including your last for eighteen years, you were attacking all of those things. DAVIS: Slightly differently of course, I have spent the last whole Parliament actually, studying this exact point. HUMPHRYS: That is true but you've got to start that virtuous circle somewhere haven't you and what you did last time in the election, you offered out of the four hundred odd billion pounds that we spend, you offered cuts of two per cent to enable.. DAVIS: Eight billion. HUMPHRYS: Eight billion pounds, to enable people to spend. That was pretty small wasn't it by any standards it was small, you thought it was half hearted so therefore you'd offer more next time, that's what I'm trying to get at. DAVIS: It always starts small and you start the virtuous circle slowly and then it grows.. HUMPHRYS: But you said it was half-hearted? DAVIS: It grows beyond that. HUMPHRYS: Yes, but you said, you have said that that was half hearted, what was done last time was half hearted, so therefore you would do something that was whole hearted next time. DAVIS: We've got to press that case, of course we have got to press that case. What I said was the presentation of the case was half hearted, I've suddenly recognised the quotation you were talking about. HUMPHRYS: Ah, confused and half hearted... DAVIS: What I said was is that we have got to persuade the public of the importance of this case. We've got basically an economically illiterate case being put to the public by a lot of commentators. I'm sure not you... HUMPHRYS: Certainly not. DAVIS: And what we have to do is to make the case, to make the case that I've just made to you about the relationship between growth rates and tax rates, low tax economy leads to high growth rates and high growth rates gives you right..the ability to both spend and... HUMPHRYS: If it's so incredibly obvious, why on earth didn't your party do that the last time around then. Why, when one of your people, Oliver Letwin, said well maybe it could be as high one day as twenty billion, my goodness, they hid him away in the deepest reaches of Dorset. DAVIS: With the greatest of respect, I've taken two self-denying ordinances in this, I want to see my party pull together again and I'm not going to go into criticising either individuals or indeed historic tactics. I mean that's a simple fact on that. HUMPHRYS: Alright then, but something else you said, one of your quotes rather than somebody else's, you didn't want to get into, I think the phrase was 'a Dutch auction of ever higher spending policies'. So you would promise lower spending on public services. DAVIS: No, no, what I'm saying here is that it's the wrong approach completely to just think about how much money you're going to spend. What you should be thinking about, what matters to people on the ground is how well they're treated, what their life expectancy is, we've got a Health Service at the moment that kills five-thousand people a year for infections they didn't have when they go into hospital, tens of thousands from cancer, cardiac disease, strokes and so on, and tens of thousands more because of mistakes, these are, medical mistakes. These are things that will not be solved by money, they're going to be solved by the way we run the Health Service, and what I want to see is a Health Service where in, where we, not privatise it, we personalise it. We actually give people more... HUMPHRYS: ...sounds like a spin word to me, personalise. DAVIS: ...well no it isn't, it means something, it means giving power to the patient, power to the GP to choose hospitals for example. I see no reason at all why we should not be able to have free at the point of delivery a choice of healthcare for people, because that way you're going to get pressure on the system to actually give better quality health care and actually better value for money healthcare. HUMPHRYS: But let's be quite clear about this, you would be prepared to spend less, because you've said, chucking money at it doesn't solve these problems and you've said you want a lower tax economy and all the rest of it so therefore if one adds up those two facts what one comes down unless of course you're afraid to say this because you can see how it might be spun, you would therefore want to spend... DAVIS: ...clearly John, you've actually not followed my argument, I've not done it well enough, I've not presented it well enough... HUMPHRYS: ...no I'm sure the fault lies with me, let me try and clear it up very very simply. You want to... you do not believe chucking money at the Health Service solves the kind of problems you've just described, you want to have a lower tax economy, having a lower tax economy means ultimately spending less, unless of course you can increase the wealth of the nation by other means... DAVIS: ...that's right... HUMPHRYS: ...but that... DAVIS: ...no by other means... HUMPHRYS: ...that as you say takes time. You've got to create that virtual circle, so in the meantime would you be prepared to say, "we'll have to cut a bit more out of public spending?" DAVIS: No no no no. You don't have to cut, after all these..we're talking about different rates of increase in fact, but take the last government, over the course of the last government, lots of money thrown at the Health Service as we did in previous years, but there wasn't actually any increase in Health Service employment at all. That money must have gone somewhere else, we actually don't know where that money went. The point I am making is that what people care about is the delivery, what they get from their hospitals, how, if they go to hospital, let's say they've got, let's say they've got stomach cancer, in this country, they have got a quarter of the survival chance they have in Germany and about a third of what they have in France. We should be looking at these other systems and seeing whether or not we can deliver those sorts of survival chances... HUMPHRYS: ...ah well that's... DAVIS: ...and then, once you've done that, you say how much we're going to spend. This is, that's the way round... HUMPHRYS: ...that is a very interesting comparison isn't it? Because of course the French and the Germans spend hugely more than we do, particularly on things like... DAVIS: ...but in different ways too. HUMPHRYS: Ah. In different ways. And you know where they get that extra money from. They get it from people taking out private insurance, that's where they get their money from, you approve of that? DAVIS: Well, I think we've got to look at all the systems. There, they've got compulsory insurance systems, the difference between a compulsory insurance system and a state insurance system is minor in some respects... HUMPHRYS: ...but there's also an extra top-up of private insurance as you well know, in France you can spend more money and they do. DAVIS: But again you're rushing back to the sum of money, the simple fact of the matter is that we actually health care results which are as bad as people who spend a lot less than we do, what we should be looking at here is how is it delivered, what is it that actually leads Germany to deliver four times as good a result in let's say stomach cancer, or twice as good a result... HUMPHRYS: It's partly much more money. DAVIS: Well it's not four times, or twice as much money. HUMPHRYS: Oh it isn't but it depends how you spend that money. DAVIS: It's how you spend it. That's precisely the point. And that's what I've spent four years looking at. Time and time again, the failure of our system. Failures in terms of people dying... HUMPHRYS: ...right. DAVIS: ...failure in terms of operations being cancelled. These are very serious issues which if you just reduce them to simply, how much cash? You're actually answering the question the wrong way round. HUMPHRYS: So in other words, I'm trying to work out what you mean in relation to what Tony Blair is doing for us, proposing to do for instance. Not a lot of difference between you because he says precisely this, he says it's all about efficiency, it's all about delivery and so on, and so on and so on. DAVIS: I mean, he knows the words... HUMPHRYS: ...not much difference... DAVIS: ...oh yes there is. He knows the words, he doesn't know the tune unfortunately. HUMPHRYS: ...well I don't know the tune that you're singing either to be perfectly frank. DAVIS: ...take for example, take for example the use of private sector in health care he's talked about, I approve of that, but what I want to see is that done transparently so that we can actually measure the difference between the private sector and the public sector... HUMPHRYS: ...that's a question of management, I'm looking now at much more profound policy than that. DAVIS: ...it's actually a question of accountability to parliament as well. HUMPHRYS: True... DAVIS: ...because they're trying to say that PFI cannot be looked at by parliament, that's actually a very important part of the system. I mean we're disagreeing into rather technical details... HUMPHRYS: ...well I want to avoid doing that, because what most people will say, as you've just said, if I get stomach cancer, heaven knows I want better treatment than I'm getting at the moment and yes... DAVIS: ...and that can be done. HUMPHRYS: Without any extra money at all? DAVIS: No, no not without any extra money. HUMPHRYS: Ah well, there we are, you see. This is the problem that we have... DAVIS: ...but what I'm saying to you... HUMPHRYS: ...here is a man who wants to cut taxes but you don't want to spend... DAVIS: ...cutting taxes in the long run will not lead to lower revenues, it leads to higher revenues. If you look at Margaret Thatcher's era, right at the beginning, when this was a really contentious issue, you went from time when you had a Labour government which had high tax rates and low growth, almost zero growth... HUMPHRYS: But there is this thing called the Laffer curve isn't it, and once you get beyond a certain, but anyway... DAVIS: Exactly. HUMPHRYS: Getting technical, getting technical again. DAVIS: Getting technical. But a vigorous economy delivers better scope for public spending than a, than a... HUMPHRYS: And you've got to get that vigorous economy. Now one of the things that this government has done is introduce a minimum wage against which your party was wholly opposed in the early stages, now is wholly in favour. You yourself have described it, and I quote, as a cruel confidence trick on the poor, you said that only last year. So you'd rescind it? DAVIS: No, I'll tell you why. I mean why... BOTH SPEAKING TOGETHER DAVIS: Let me explain why it's a cruel confidence trick on the poor... HUMPHRYS: ...just answer that first point though, it would go, would go, would it? DAVIS: ...no no, you have to, no... HUMPHRYS: ...oh it wouldn't go? DAVIS: You have to understand why it's a cruel confidence trick on the poor. When the minimum wage was introduced it increased by twenty-six pounds a week the average cost of, the average amount paid to somebody on the minimum wage, head of a family, someone like that. Of that twenty-six pounds, he got five pounds. He kept five pounds, the government kept the other twenty-one. The whole system we now have, has most of the money taken back by the government. Now we've now got a new system, the Working Families Tax Credit. What we have to come up with here is a new system of getting these people out of the dependency culture and that requires a whole new strategy, not just the question of the minimum wage, the whole question of how this, how this funding works, we've got more than a million extra people... HUMPHRYS: ...and as part of your strategy you would get rid of the minimum wage? DAVIS: I'd certainly look at that, I'm... HUMPHRYS: ...look, come on, you see we're back to this old spin thing. You said it was a cruel confidence trick, that's very very strong language indeed. How could you in all conscience continue to inflict upon this nation a cruel confidence trick? You couldn't, could you? DAVIS: No we wouldn't, no we wouldn't... HUMPHRYS: So you'd have to get rid of it? DAVIS: Absolutely not, and what one would look at is how the, how the figures work out for the man, for the, or the woman, who is actually receiving this income. What happens to their employment... HUMPHRYS: ...I understand all of that but you see... DAVIS: ...what happens to their employment prospects? What happens to their income? Now when it was done, it was under a previous welfare system and those are the numbers I just gave you... HUMPHRYS: ...I'm not arguing with you about that... DAVIS: ...now what we have to look at is a strategy for ensuring their employment at the same time as improving their income... HUMPHRYS: ...but if you... DAVIS: ...and we've got to do that with one of the worst welfare systems that I've ever seen... HUMPHRYS: ...but if you... DAVIS: ...working family tax credit, tax credit. Now the priority actually bluntly is to get out of the dependency culture, once we're out of that we worry, we worry about how you improve their ability... HUMPHRYS: ...in order to pursue the, and we haven't got very long here, in order to keep this, to get out of the dependency culture, you've got to encourage the free market, you said the minimum wage was abandoning our belief in the free market another reason why you cannot surely sit there this afternoon and say, "we might keep it." You can't, you've got to say, "we'll get rid of it" surely? DAVIS: No no, we've got to say what actually, look at the detail of the, you cannot just make sweeping judgements, one of the points I was trying to make in this whole leadership cabaret is the point about modern Conservatism is you are bringing fundamental principles to apply to modern problems which you've got to understand how the problem is delivered. Now I suspect at the end of the day we'll end up with a minimum wage which is, which is not growing up the way the current one's going, but what we have to look at is the welfare system and get out of that first, dependency culture is the most dangerous thing we have. HUMPHRYS: David Davis, thank you very much indeed. DAVIS: Thank you. HUMPHRYS: Now the real challenge for this government is to improve the quality of our public services, what we have just been talking of - especially the NHS and one of the things Tony Blair is planning to do is give the private sector a bigger role. Health care will still be paid for by the taxpayer, it'll still be free at the point of delivery but everything else is up for grabs. Mr Blair has said there are no ideological bars. Tomorrow his favourite think tank, the IPPR, publishes proposals for dramatically increasing the private sector's role. The government is not going to have an easy ride with that one, many Labour backbenchers and its supporters in the trade unions are threatening trouble. Lord Hattersley, former Deputy Leader of the Party, launched a pretty savage attack on Mr Blair just this morning. As Terry Dignan reports, there are real questions as to whether the Prime Minister has the stomach for this fight. TERRY DIGNAN: For those who use private medicine, it's a speedy journey to treatment. But it's taken Labour much longer to reconcile itself to the private sector. UNNAMED WOMAN: Good morning. Welcome to the London Independent. DIGNAN: The Tories were once accused of privatising the NHS with internal markets. So the speed at which Labour has embraced the private sector has shocked many in the party. The Government now pays for NHS patients to be treated in hospitals like this one, the London Independent. The next step is for the private sector to take over NHS services. The Government regards this as a bold and radical agenda. It's certainly alarmed the unions and many Labour MPs. Some even talk of a war against privatisation. Yet supporters of the private sector aren't too happy either. They fear the policy may be watered down if ministers try too hard to placate their critics. PROFESSOR JULIAN LE GRAND: On the one hand it's being pressurised by its traditional supporters, the public sector unions particularly, to rule out the use of the private sector in health and education. On the other hand it can see the logic of actually looking to who provides the best service, whether it's in the private sector or the public sector. Now, those two things run into conflict and I think you are seeing government ministers finding that conflict quite difficult to manage. DAVID HINCHLIFFE MP: I feel that within the Parliamentary Labour Party there would be tremendous opposition to any moves in terms of increasing the existing role of the private sector in the National Health Service. DIGNAN: When Tony Blair's battlebus arrived in Birmingham for the launch of Labour's election manifesto, few in the party realised what was in store for public services. In England and Wales the private sector was to be given the green light. Services would remain free but there'd be no ideological bar to managing them privately. TONY BLAIR: There should be no barriers, no dogma, no vested interests that stand in the way of delivering the very best services for our people. JOHN EDMONDS; The whole idea of private sector management in the health service, seemed to come up in the campaign out of nowhere. I mean I've been a part of the policy commissions of the party and that wasn't discussed there. There is a hint of it in the manifesto - a bit surprised that was included. But then the Prime Minister made a speech with a bigger hint and of course what then happened is the journalists were told 'have a look at the report by this think tank, IPPR' and a few bits of that were leaked and what we found then was a bit of a hidden agenda. DIGNAN: The private sector is moving into the NHS inexorably. Labour has embarked on a hospital-building programme using the Private Finance Initiative. Under PFI new hospitals are paid for and maintained by commercial companies. Even though some argue PFI doesn't provide value for money, the IPPR, which is close to Labour, will call this week for the policy to be extended. LE GRAND: I think the logic of PFI sends you towards saying, well what the government has to do is significantly increase the role of the private sector in education and health. You can't leave them just simply operating the ancillary services - it doesn't make any sense, it doesn't work properly. What you've got to do is actually be bolder and actually have the private sector manage - even own in some cases - the whole organisation. DIGNAN: Supporters of private sector involvement believe the health service could be transformed by an influx of the kind of commercial expertise that this hospital has. ANTHONY COLMAN MP: I think there's a situation where certainly in my experience having been a director of a FTSE 100 company that you can get a situation where you as a private sector person, you are perhaps more results orientated, more directional and more achievement orientated than perhaps often occurs in the public sector. DAVID METTER: You need management systems and you need people that are motivated in order to be able to produce the efficiencies on the scale that you need. And there's reason to believe that the private sector would be able to do this better than the public sector. DIGNAN: Why do you say that? METTER: Well the public sector generally is not motivated by efficiency or what underlies efficiency is the need for profit. DIGNAN: Staff here know that the London Independent must make a profit to survive. That may have become easier now that these hospitals are taking in NHS patients whose operations are paid for by the taxpayer. But many Labour MPs and union leaders are promising confrontation with the Government if ministers go further and allow a big expansion of the private sector into NHS hospitals. HINCHLIFFE: I don't see that they've a great deal to offer. I think that many of the examples of services that have gone from public into the private sector - Railtrack for example - very topical at the moment, don't auger well for what could happen in the National Health Service. EDMONDS: Whether or not there's going to be a row depends on how far the government intends to go. If the government simply wants to use spare capacity in the private sector, in private sector hospitals, for extra operations, no one is going to object to that. But if it means bringing private sector management, private sector practices into the health service and the profit motive into the health service, I think there's going to be a tremendous reaction from the public, never mind the trade unions. DIGNAN: While ministers have been keen to talk up private sector involvement in the NHS, some of their recent announcements suggest they're nervous of this policy. They've placed some areas of the health service off limits to the private sector. It's argued the Government's attitude appears contradictory. For example, ministers say clinical staff such as doctors and nurses won't be treated in the same way as ancillary staff many of whom have been transferred to the private sector. And the Government is to experiment with keeping even ancillary staff within the NHS at two PFI hospitals. LE GRAND: Most people who've looked at PFI think that's going in the wrong direction. If anything we should be moving the other way towards actually giving the private sector more control rather than less. EDMONDS: The government's made a series of statements ruling out things, clinical services will not be privatised. Ancillary staff will not now be automatically transferred to the private sector. That doesn't really leave anybody left. So it's very difficult to see how the private sector can manage a hospital in these circumstances, when the staff are apparently staying in the public sector. It seems to me to be a recipe for a mess and I think the government has got a lot of clarifying to do. DIGNAN: At a private hospital like this everyone is on a contract. If you're not up to the job, you're out. Commercial organisations say they need the power to hire and fire if they're to perform efficiently. ANAESTHETIST: Good morning, sir. Welcome to theatre. My name's Ron and I'm your anaesthetist for today. DIGNAN: According to the private sector, if it's to manage NHS staff, it must have control over them. ANAESTHETIST: Here we go, just breathe away normally, nice slow deep breaths. Off we go to sleep. METTER: The issue does arise if the employees are seconded what managerial controls and disciplines do the service providers have over these employees. Now if they are able to terminate their employment or terminate the secondment for poor performance, for example, then some of the issues fall away. DIGNAN: So, it's unclear how far Tony Blair is prepared to go in allowing private management to run parts of the NHS. The acid test is this - does he mean it when he says that neither dogma nor vested interests should stand in the way of using the private sector. Labour says some of twenty new surgical units could be privately-run. It could be an important step in evolving the private sector's role. Opponents fear this will happen by stealth which could explain why again there's vagueness about the proposal. EDMONDS: The reference in the Labour Party manifesto to special surgical units and the fact that these might be managed in the private sector, I think adds confusion to confusion. I mean special surgical units are what we used to call hospitals. So are these going to be managed in the private sector? And are the doctors and nurses in these particular establishments going to be managed by the private sector? We don't know. We think not and some statements from the government suggest not, but we're still not clear. LE GRAND: What the government is intending to do is use the private sector in a more incremental way. For instance, if they set up new services like a specialist cataract operation...factory in a sense, a specialist, a specialist unit that would just do cataracts, that could be managed by the private sector. Pathology services could be managed by the private sector. And in the long run, that may well evolve towards actually transferring a whole hospital to the private sector and seeing, comparing how that works in contrast to the public sector. HINCHLIFFE: Well I would personally see that as being a complete betrayal of everything the Labour Party stood for, since the 1940s, when we introduced the National Health Service. I think it would quite frankly cause outrage within mainstream Labour Party circles who are already uneasy about some of the noises being made about greater involvement of the private sector. DIGNAN: Independent hospitals are offering NHS patients the best that money can buy. Now Tony Blair wants private sector expertise to be extended to the public sector. He's being advised to allow companies to take over a number of NHS hospitals. LE GRAND: If we were moving towards something like ten per cent, I would think that would give quite a useful gingering up process for the National Health Service and that might be the target to aim for. DIGNAN: The Government wants to go in the direction of more private sector involvement in the NHS. But will the pace at which it pursues this policy be slowed by attempts to reassure opponents of the idea? HINCHLIFFE: We're gonna go half-way and I don't believe that that's achievable and I think that the problem that the government have got at the moment is how they can in practical terms, bring this new ideology into the health service without it having quite damaging effects. LE GRAND: I think the government does have to start presenting a consistent picture on this, I think that they are committed to some sort of bold transformation of public services and all credit to them for that, but that does mean that they are probably going to have to bite the bullet, of certain areas, like involving the private sector to a much greater extent than they previously have so far. DIGNAN: So has Tony Blair got the nerve to take the NHS into the bright new world of the private sector? If he really believes that's the way to transform the health service, he's going to have to take on those he calls the forces of conservatism - the unions and their allies in the Labour Party. He says he's got the scars on his back from previous confrontations. This time the stakes are much higher. HUMPHRYS: Terry Dignan reporting there. Jack Straw was regarded as a pretty tough Home Secretary. David Blunkett is, it seems going to be at least as tough and maybe even tougher. His new Crime Bill will contain measures that will put more people behind bars for longer. The question is whether that will achieve its objective and cut the crime rate. Paul Wilenius reports that many people doubt it. PAUL WILENIUS: Even tough guys get caught. And now Labour wants to catch even more of them and lock them up for longer. The government's worried it's not delivering on law and order and is starting to look soft. So Ministers want to give the courts new powers, to deal with hardened young criminals. Tony Blair built his reputation on a promise to be tough on crime and tough on the causes of crime. And in the coming weeks his government will unveil a new sentencing package to try and stem the rise in violent crime. But his critics fear that this will simply put more people behind bars and will fail to tackle the real causes of crime in Britain today. HARRY FLETCHER: Being the kind of bang up capital of Europe is something to be ashamed of, Britain did have a reputation for being fairly liberal and I think the liberalism worked but that's no longer in fashion. And in fact ministers boast and think it's something to be proud of, having such a high rate of incarceration. GEORGE HOWARTH MP: I think if in five years' time we see a rapidly increasing prison population still, it will mean that we have failed. WILENIUS: But for a government anxious for faster delivery, it seems that filling up the jails is a measure of success. The nation's courts and judges will be able to dish out longer prison terms to one hundred thousand persistent offenders. They are responsible for about half of Britain's five million crimes. CHRIS MULLIN MP: There's a certain small section that are simply lost I'm afraid and as far as that section's concerned you're only talking about containment, until one day, perhaps around the age of thirty, a little light switches on as it does occasionally and people realise that their lives are going nowhere and want to be helped, but in the meantime you've got to be fairly tough with those guys. WILENIUS: This uncompromising stance has worked in political terms for Labour. It's neutralised attacks from the Tories, so they'll get even tougher. But this is worrying some experts. PAUL CAVADINO: At present the projections are for a continuing increase in the prison population. I think that if the tough political rhetoric continues, for example around the government's proposals for tougher sentences for persistent offenders, the rise could be even sharper than that. Yet what we need to be doing is reducing rather than increasing our prison population - it's high by West European levels. Having such a high prison population doesn't make sense in terms of crime control, it means that we're shovelling into prison a very large number of people for short periods WILENIUS: But this hardman strategy has been embraced wholeheartedly by the new Home Secretary David Blunkett . His Crime Bill was at the centre of the Queen's Speech and this will be followed in the next few weeks by the long awaited report on sentencing from the former Home Office civil servant John Halliday. It will result in repeat offenders going down for longer. Tony Blair and David Blunkett believe that prison works and that their hardline sentencing policy really will deliver safer streets for Britain. But their critics feel that merely banging up even more offenders for even longer is counter productive. They think that the only answer is spending millions of pounds extra on the rehabilitation of offenders. But efforts to prepare offenders to lead a crime-free life once outside jail have suffered as a near record sixty-six thousand inmates are now inside Britain's prisons. It's the second highest in Europe. Labour is already expecting to see a further rise in numbers, which could soar above eighty thousand over the next seven years. And critics believe the policy of targeting these hardened criminals will only make matters worse, as many go back to crime as soon as they're released. CAVADINO: That's not likely to do a great deal to reduce the crime rate. What would reduce the crime rate quite significantly is if we could stop those persistent offender from re-offending. But harsher penalties aren't always more effective penalties. If you release somebody from prison, unemployed, they're twice as likely to re-offend as if they get and keep a job. If they're released from prison homeless, they're two and a half times more likely to be re-convicted within the first year than if they've got accommodation. Prison doesn't work if it's overcrowded and over-stretched because if it's overcrowded and over-stretched it can't rehabilitate prisoners as well and that means there's a greater chance of re-offending when they're released. SIMON HUGHES MP: You don't deal with them necessarily by just locking them up in colleges of crime where they have actually people who are more used to being inside than they are, who'll teach them more than they even knew when they were outside. WILENIUS: Ministers hope the arrival of their new Custody Plus sentence will help. Inmates will get a short, sharp fixed term sentence with a similar length community sentence outside. But some experts fear it will mean that even more people will end up behind bars. CAVADINO: There's a real concern that Custody Plus instead of being used constructively to reduce the use of custody by shortening periods in prison and then having a period of supervision afterwards, could instead be used in a way that increases the prison population. If Courts now are considering a case on the borderline, wondering whether to jail the offender for a short period or give them probation or community service, it could be that with the use of Custody Plus, they could decide they'll opt for that in those borderline cases because it seems to combine both prison and community supervision. WILENIUS: But the government feels that Custody Plus will give more help to prison inmates once they're on the outside and it could even get more of them to stay on the straight and narrow. MULLIN: I certainly think that a combination, not just releasing people back into the - probably the same lifestyle as they came out of in the first place, obviously that changes nothing and so we do need to combine prison or detention with something that's going to give them some hope for the future once they emerge from the doors of the prison or the detention centre, we've been trying that for a long time now and I'm sure there's a great deal of scope for improvement. HARRY FLETCHER: At the moment there are tens of thousands of predominantly men, going into prison for six to nine months, getting no assistance with anything, numeracy, literacy, work, education and they come out and they're in trouble again within weeks, if not days and they're back inside again. Clearly that is bad economics. So the government intend replacing that with a system where they spend roughly half the time in custody. So that would be what, four months and then another four months, intensive supervision and help in the community. That will work, providing that the probation service and all the voluntary agencies that assist, are properly resourced. If we're expected to do it from within existing budget, it'll just fall over. WILENIUS: So the key to the success of the new sentencing system could well be money. It's not a cheap option to go for ever rising prison numbers . It's estimated that the Halliday package will cost an extra six hundred and fifty million pounds a year. That includes more money for rehabilitation, which some senior figures in the Labour Party feel is the best way forward. HOWARTH: Unless we believe that people can be rehabilitated, then the whole criminal justice system is potentially in a state of collapse because you can keep taking them out of circulation for periods of time, as soon as they're back out again they're going to move exactly back into the area that got them into trouble in the first place. I have to say that governments find it very difficult to give priority to spending on prisons, for example over and above health and education where obviously there are high priorities. But the longer argument I think should prevail that if you actually want to change people's behaviour, if you want to stop people becoming repeat offenders, then you have to do something useful with them that gives them the prospect of a life without crime. HUGHES: It is not something that comes for free and we need the money in the budget, the people recruited, the counsellors, the probation officers, the support workers to make sure that the prisoner of yesterday doesn't become the prisoner again tomorrow. You need to put the money in the rehabilitation and the reintegration into society as well as just the Court system and the prison system because otherwise you're throwing in many cases, good money after bad. WILENIUS: There's now growing pressure on the new Home Secretary David Blunkett to change tack. He's locked into the tough "prison works" policy adopted from the Tories. But opposition to this hardline strategy is growing both outside and inside the Labour Party. HOWARTH: I think it lacks coherence because first of all I don't think the public has a great deal of confidence in it and secondly we're not seeing a massive change in behaviour on the part of those who find themselves in the criminal justice system. So tough and tender is I think an approach that is coherent and it does address the world as it is rather than some make believe world that perhaps some people would like to create. FLETCHER: I think there's been a continuous line since 1993 with the emergence of Howard's prisons works philosophy, right through the Labour administration and a belief, I think it's a sincere belief, it's sort of social authoritarianism if you like within Labour that being punitive towards people is ultimately good for them. I think that's what they seriously believe, it will make them better people. But punishment has never and will never work in its own right. WILENIUS: Still the government appears determined to push ahead with its new hardline laws. But it may not have the smooth passage it would like despite its massive Commons majority because on top of the growing opposition outside, the more liberal House of Lords is ready for a fight. HUGHES: If the government come forward with legislation which they have not thought through and which is really there to be a shop window sounding good proposal rather than backed up by the evidence, the probability is it will not get through the House of Lords. And we will play our part in making sure it doesn't get though the House of Lords. The government have no majority in the Lords and they don't of course have a majority in the country. They have a majority in the House of Commons, but twenty five per cent only of the electorate voted for them. So we will remind them that they have no mandate across Parliament for getting through ill thought out and poorly conceived proposals. WILENIUS: So as more and more prisoners are led down to Britain's jail cells, Ministers must make a choice. Do they go in the direction of many European countries and try to steer offenders away from a life of crime, or do they take the American route and just keep on locking them up for as long as it takes? HUMPHRYS: Paul Wilenius reporting there. And that's it for today and for the summer. There are no more scheduled On the Records until September 23rd. Our website will still be there for those of you on the internet. Until the autumn, enjoy the holidays ... good afternoon. 27 FoLdEd
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.