NICK ROBINSON: First, though to Iain Duncan
Smith. The Tory leader said that the character of his leadership would
be set in his first three months. People should, he said, be able to say
that that bloke looks as though he knows where he's going. Well that three
months is up, so can they and does he?
Mr Duncan Smith joins me now.
Thanks for joining us on the programme.
IAIN DUNCAN SMITH: Not at all, pleasure.
ROBINSON: It seems to me that is
the test Mr Duncan Smith, isn't it, do people know where you are going
and if you look at the opinion polls, more than half of people say, they
haven't an opinion on your leadership at all. Does that worry you?
DUNCAN SMITH: No, it doesn't. I think
the important thing when I said about the three months, is that we as a
party settled, that we recognised that we were bound together by more than
we were divided over and that we were therefore giving focus to the things
that frankly, most of the British people had felt we no longer cared about,
or hadn't talked about. And on that, I'm very strongly on the view that
it's the public services that have switched people off. They feel as though
there was no alternative to the government because we didn't seem to produce
one. That was there concern.
ROBINSON: Well it's the public
services I mainly want to talk to you about today. But just dwell briefly
on this problem of you failing to make an impact, does it concern you too
that the only thing that people seem to keep going on about is that you
struggle to keep your voice when you are making public performances and
asking questions in the House of Commons?
DUNCAN SMITH: I find that sometimes the
commentators are more interested in the performance than they are in the
message and the reality here is that most British people want to know how
their public service is going to be improved when they are failing, when
they know that the government is failing over health. What they want to
know is there is an alternative and to spend time as to whether or not
someone's had...lost their voice or not is quite ridiculous. In truth,
I spent four mouths pounding up and down the country and it's getting better.
Nice for your concern anyway..(laughter).
ROBINSON: Well let's turn to those
public services and those policies. We thought we knew what you felt on
a whole series of issues. I want to see if we still quite know what you
think on these. Let's start with tax and spend. You are a tax cutter, you
are a Tory, you are a Thatcherite Tory, then along comes Michael Howard,
the Shadow Chancellor and he says, public services are - and I quote -
"the number one priority and take precedence over everything else". Have
you gone off tax cutting, do you mean that the Tories will not now promise
to cut the tax burden?
DUNCAN SMITH: No, I think what the public
want to know from us is first of all what we think our priorities are in
terms of the things that they see as failures and problems in their lives
and that's what Michael Howard was talking about. He said that for us in
this next Parliament we are going to focus on those issues that we think
need reforming. Big change and I think the big agenda here is reform and
change in the public services it gives to people greater choice and greater
quality. That's what they want. But they also know that we as a party are
a believer..are believers in low tax economies, in other words comparatively
low tax economies are the successful ones, they are the ones that allow
you to live on more money and focus that money onto those public services.
So, the balance is simply saying we have to establish our credibility,
in terms of how we are going to change and reform those services and then
how we are going to apply that money and then, we can talk about what the
burden of tax will be to the British people to support that.
ROBINSON: Okay, now that's a presentational
point, it may be an important one..
DUNCAN SMITH: It's a very important one...
ROBINSON: ...you need to get your
credit with the electorate for talking about public services but people
took you to believe...
DUNCAN SMITH: ...well....producing reforms...
ROBINSON: ...well people took you
to mean and they wrote it up this way, that what you were saying is we've
learned our lesson, we are not saying what we said at the election, which
is we can both have tax cuts and improve the public services, we are saying
that the number one priority, to quote Michael Howard, is the public services.
We can't have those tax cuts.
DUNCAN SMITH: No, he didn't say that. This
is important, two things have got to be understood and this is what we've
understood and I hope the media will understand this. The first is that
we have four more years to run in this Parliament. The government which
has already raised tax massively on the British people but done it in a
way that they weren't told about, through stealth taxes, through things
that they don't know, not through income tax. That's already the case
and people are beginning to feel the pinch. But what they've got is another
four years in which we are now seeing the beginnings of a further ramping
in taxation. We have no idea where they will be in three years' time or
four years' time as we run to a General Election. So for us to start now
saying, this is going to be the position absolute in four years, I think
the British people would say, no-one can say that. But what they want to
know and what we can say, is you are failing on these public services,
you have no route map. I mean for example, it's very important this, the
government the other day, the Prime Minister, said they were going to increase
public spending on the Health Service to be in line with the European average.
Well, first of all, he said it was eight per cent and I've proved to him
the other day, that that eight per cent was already being achieved in Scotland,
Ireland and Wales and they were failing as well, that's the key issue.
ROBINSON: Yeah, and I want to ask
you about health spending and also about your ideas for reforming the Health
Service. But let's just be clear about this. People thought you and Michael
Howard were signalling a change, that you'd learnt your lesson from the
last election, that you knew the Tories couldn't have credibility by saying
we'll cut your taxes and maintain public services. What you are clearly
saying to me is, no we've got a presentational problem but we can offer
tax cuts and increases in public spending.
DUNCAN SMITH: Don't simplify it to the
extent that it then gets over read. What I'm saying to you is, our priority
is to deal with the public services, quite rightly, to bring a radical
set of reforms, that will give people that choice and quality. Once we've
done that, we can look at how to finance that, once we don't that we can
then say what is the level of tax that people will need, whether we can
be able to bring that down below where the government is and at the same
time, if the public understand that and we able to, to show that they will
increase the level of spending and focus it better...
ROBINSON: And that's what you want
to do, you want to be able to say to the public, we'll cut your taxes,
personal taxes, the taxpayer...
DUNCAN SMITH: No, what we want to be able
to say to the public is, we can do two things. We can show you that you
need to reform the system, having reformed it, you can find a way of financing
it which actually focuses the money directly where they need it and we
then are able to say the government is taking more of your money, we want
to take less, but at the same time we want to make sure on those issues,
those things that you worry about, that the money is being spent and being
used. That's the critical issue.
ROBINSON: Let's pick up what you
were talking about in terms of health spending, you've been very critical
of the government, we'll talk about what they are doing in a second. What
about you, at the last election, we were very clear where Mr Duncan Smith
stood. You said, the party said, we'll match Labour's spending on health
and education, it's a priority, that's what we mean by it. Will you do
that in the future, will you say that as the government increase these
spending plans, we'll match it.
DUNCAN SMITH: Well let me just run that
one past you, look you have a government here, that came into power on
the basis that they said that their spending profile would solve the problems
in the health service. What we've seen is actually, as the public know,
the health service is getting worse, yet they are supposed to be spending
more on it. The government then came back and said, we are going to spend
even more on it and that's the solution and yet we find ten billion pounds
a year now is wasted in the Health Service, in other words it doesn't go
towards treatment because it's just not...the system doesn't cope and the
worse bit is in this last year, they are not going to be able to spend
up to seven hundred million pounds allocated on the Health Service, cause
the system can't take it. You ask me, if I am going to agree with them,
saying we are going to spend yet more, I say, you tell me why you can't
spend the money you've already got and why you're wasting so much, before
we decide whether or not, your solution is correct. The answer is it's
not. They have to work the system change first.
ROBINSON: Plenty of people agree
on the case for reform...
DUNCAN SMITH: That's my point...
ROBINSON: ...and we'll talk about
the reform, but it's also important to talk about money isn't it. You
see, because you've travelled round Europe...
DUNCAN SMITH: ...absolutely...
ROBINSON: ...and you've said let's
look at these other countries and how they do things. Now one of the things
you want to emphasise they do, is they spend more private money. But the
thing you don't emphasise very much is they all spend more public money
as well, take Germany. In Germany, it would cost twenty billion pounds
in this country, to reach what they spend on taxes on health. France spends
more, Sweden you've been to, spends more. Even the United States of America
spends more as a proportion of its national income than we do on health,
so it's a simple enough question to say to you, do you therefore, want
to spend more taxpayers' money on health.
DUNCAN SMITH: It's a simple enough question
but it's a wrong question. The question - you just hit it at the last point,
when you said, even the United States spends more on health, correct.
What..however we have is a government here in Britain, that seems to believe
that the only way of getting health sorted is through direct taxation and
spending more of people's tax money. No other system that we have visited,
that is successful, actually does it that way, they have a mix of ways
of spending. Some of them have a proportion of tax added to by a sort of
insurance system, some have pay as you go, some have relief on that.
My point here is, if you look at France for example, you have a system
that spend give or take very similar amounts in tax, what they...
ROBINSON: ...well not give or take
similar amounts, if I may, Mr Duncan Smith, the latest OECD figures have
Britain spending five point eight per cent of GDP, almost six per cent
of its national pot on health from taxes, France seven point one per cent,
it's a lot more.
DUNCAN SMITH: Hold on, hold on. Just remember
what else France spends apart from tax, that's the key point. My point
is, that we look at these systems and we see that all of them are mixed
systems, they are systems that have much greater voluntary, much greater
private involvement and as well as a state based level. And I'm saying
that the problem for us at the moment is if you just go on saying we're
going to apply more tax and more tax to this system, you find that (a)
it can't spend it as I showed you, and (b) it's completely over-stretched
and the inefficiency becomes greater, not less. So the trick here, the
important point here, is to say that you must put the reform of the system
first, then you can sort out exactly how you finance it.
ROBINSON: But this is partly about
your credibility as you do that process, isn't it and you've told people
that you want to cut their taxes and people think that if you cut their
taxes you may well not be able to spend enough money on health. It won't
be, to use Michael Howard's words, a number one priority.
DUNCAN SMITH: Absolutely.
ROBINSON: I put it to you that
other countries, whatever their system, spend more of their taxes on health
and you say, well I can't even promise to spend...
DUNCAN SMITH: ...no but Nick, the way to
look at it is not that they spend more of their tax, they spend more of
their GDP on health. You see, you're getting locked into the same old Labour
argument which is, everybody spends more tax. The truth is, they do spend
more of their GDP, but the reason why they get better treatment is because
that GDP is better focused because it involves other mechanisms for spending
ROBINSON: Well let's talk about
DUNCAN SMITH: Now we're looking at that
and that's the reason why Labour has ruled that out. Gordon Brown said
there is no way that they are going to go down that road, that the NHS
must remain as it is and simply a matter of raising tax money...
ROBINSON: ...now you've only been
DUNCAN SMITH: ..the public don't believe
ROBINSON: You've only been in office
three months and people don't expect you to have a detailed health plan..
DUNCAN SMITH: ...absolutely...
ROBINSON: ...but they can be clear
about your principles, you spelt out what Gordon Brown says his principle
is, your principle clearly is, from what you've said, that people, not
through taxes, must pay more themselves directly for health care, you can
debate how, but they must do it.
DUNCAN SMITH: Yep...what we're going to
do is look at the best way that is applicable to Britain that we can bring
forward that actually gives them and this is the important thing, the high
jump is that it must improve quality and it must give them greater choice.
Can I give you one example. I went to Sweden the other day, now Sweden
is a country that had a system very similar to ours, actually probably
it was closer to ours than anything else, a health system funded almost
wholly through taxation. It is funded at the moment mostly through taxation.
But what in Stockholm they've done is change something very important.
They've actually said that patients have the right to choose their hospitals
and that GPs, doctors, with them will be able to pick what they think are
good hospitals. Now that major change has changed the whole attitude of
treatment in the hospitals. They've even taken one hospital, treating what
we would call NHS patients and moved it into the private sector, that the
quality has improved dramatically, the waiting lists have collapsed, we're
beginning to see how you reform a system that was very static and very
ROBINSON: They've done another
thing, they charge people to go to see their doctors, about ten pounds,
I'm told it is to see the doctor in Stockholm, now as a principle...
DUNCAN SMITH: ...they have always had a
system of charging though in Sweden, which is entirely different from...
ROBINSON: ...as a principle, people
have assumed that the NHS is free at the point of use, there may be the
odd prescription charge, there may be a charge for your dentist, but to
see your doctor it's free...
DUNCAN SMITH: ...well don't say...
ROBINSON: ...are you Tories saying
let's think about...
DUNCAN SMITH: ...no, I'm sorry, let's start,
let's stop right there before, we get this nonsense from the Labour Party,
they always say this is free at the point of delivery and you want to charge.
The truth is...
ROBINSON: ...well we're asking...
DUNCAN SMITH: ...the Labour government
already charges people. They charge them for their prescriptions, you know
to go and see a dentist you get charged. The reality is many people, today
we see a report, probably four hundred million pounds a year being spent
by people who don't have the right income, who are having to go and find
ROBINSON: ...so this is very clear,
you are saying...
DUNCAN SMITH: ...you're being charged already.
ROBINSON: ...there are lots of
charges and there are no...
DUNCAN SMITH: ...Labour hasn't done away
ROBINSON: ...so there's a charge
to see your GP, or a charge to go to the hospital...
DUNCAN SMITH: ...Nick, it's a living lie
that Labour tells that says this is absolutely free. Everybody who knows
who uses it, knows that in certain categories you pay. The question is,
right now, the system itself doesn't work to deliver even though they do
pay. That's the truth. How do we reform that system first and then how
do we look at the financing of that system. That's very important.
ROBINSON: Let's just be clear though
what you're saying is because we already pay, because you think Labour
are misleading about this...we may have to pay, we Tories may have to come
to you and say you'll have to pay to go and see your doctor.
DUNCAN SMITH: ...but they already pay.
Nick, sorry, let's stop this, no, this is a silly argument. People pay
through taxation for their service. They then pay as charges when they
go and buy in many categories their treatment across at the chemist, and
they pay if they go and see a dentist often if they can't get an NHS one.
My point is, the public already know they're paying. The problem for them
is they don't get the service that they feel they ought to. That's the
priority if we can get the reform changed, if we can get the structure
better so that people get a better quality we can look at how we raise
the extra finance, then I think people would say I'm prepared to pay and
that's how I'm doing it. I'm doing it through tax, I'm prepared to look
at other ways...
ROBINSON: ...they may pay on health.
Let's turn to a different issue, an issue with which you were associated
with very, very clearly and you said that people should know where you're
going, it's the Euro of course, you've been the clearest of any Tory leader,
never, it's not going to happen. You won't actually countenance it. Now,
why on this crucial issue are you never talking about it then. You don't
talk about it, you stop other people from talking about it, is it because
you think it doesn't matter very much any more?
DUNCAN SMITH: ...supposed to have stopped
everybody talking about it...
ROBINSON: ...or is it you're a
bit scared to tell people what you think about it?
DUNCAN SMITH: No, not at all. I have to
say that if there is one subject on which the British people are clear
about the Conservative Party, I think it's probably Europe and I don't
think therefore that we need to carry on and on and on about that subject
right now. We are clear and the public's clear and let me just reverse
this question on you slightly, if Mr Blair was sitting here, why would
you not say to him, why was he so dogmatically determined to enter the
Euro, because he's a believer in principle. I simply have said we at the
next referendum, when it comes up, we will simply oppose it, but there
is scope for those in my party who disagree to campaign for. I think that's
tolerant and reasonable and that's a good position to be in.
ROBINSON: The fear some have is
that this is becoming a fact on the ground, notes and coins are about to
come in, we saw them waved at the Laeken summit yesterday, interestingly
enough, Dixons Group, they say you can go into their shops and they own
a lot of them and you can use Euros. And who's the Chairman of Dixon Group,
Stanley Kalms, the Treasurer of the Conservative Party, so it's going to
happen isn't it?
DUNCAN SMITH: ...who's also opposed to
ROBINSON: ...will he take donations
in Euros, for the Tory Party.
DUNCAN SMITH: As far as I am concerned,
you know very well that the Dollar exists, that doesn't mean to say you
have to adopt the Dollar. The whole issue about currencies is that they
keep within your national democracy the power and control to set your tax
rates, to also adjust your interest rates in accordance with what is necessary
for you domestically. Far too many of the public remember while we were
in power the ERM debacle, under the ERM where we ended up having record
levels of unemployment and difficulties and problems and people don't want
to return to that and my simple point is you know, they may well go to
notes and coins in January, but Europe itself is heading deeper and deeper
now into recession and I don't think we necessarily want to copy that.
ROBINSON: And will you, now we
have a new process of reform in Laeken will you do what you said in the
past, which is to say we don't want this to happen at all and if I become
Prime Minister, I'll renegotiate these treaties, they'll go.
DUNCAN SMITH: Well we've yet to hear exactly
what they've agreed at Laeken but as far as I can see there are a number
of things I think the British people will be deeply uneasy about, the European
ROBINSON: ...but the key question
is not..with respect your opinion is whether as Prime Minister, if you
became Prime Minister, you would say to people, this has to go.
DUNCAN SMITH: We're going to say to people
that we want a Europe that is about nation states co-operating and trading
and things that get in the way of those we'll actually want to change and
things that are in favour that, we want to keep, but we want to have that
and I think that's the flexible response to Europe as it is, and by the
way, September eleventh showed us one very important feature which is that
the old idea of the great blocks, the structured and rigid blocks, which
is at the moment what Laeken was discussing, are probably over, we need
greater flexibility, we need nation states to co-operate rather than be
ROBINSON: One last subject I want
to ask you about, whether people are clear where you're going. You were
clear, you said I'll be intolerant of intolerance on the issue of race.
Now then we saw your Chairman say to members of the Monday Club, it's incompatible
to be in our party and believe the things that you believe, but now I read
you're having them back.
DUNCAN SMITH: I'm not having them back,
we haven't got anywhere near that.
ROBINSON: I read in the paper that...
DUNCAN SMITH: ...well you can read what
you like Nick in the papers, you can read what you like in the papers,
but I shouldn't always believe what you hear in the papers, I see no suggestions
to that extent.
ROBINSON: So the Monday Club as
far as you are concerned are...
DUNCAN SMITH: ...we've already told the
Monday Club what happened and we told them quite clearly that their whole
position on race and the way that it was used and as we saw on their website,
was not compatible with the Conservative Party's views on this matter and
they were told that they therefore could not be part of the Conservative
Party, they've had to go away and we'll wait and see what they come up
ROBINSON: ...well, they had to
go away and possibly change what they believed, I just want to be clear...
DUNCAN SMITH: ..radically change...
ROBINSON: ...but if they come back
and say to you, okay, well we've cleaned up our website, we don't say things
DUNCAN SMITH: ...it's not just a case of
cleaning up websites...
ROBINSON: ...this is what they
used to say, we already pay host to large numbers of people of non British
origin who seem to believe that everything this country's traditionally
stood for is profoundly negative, they behave like lodgers in a hotel.
If they just don't say that any more, they're welcomed back?
DUNCAN SMITH: We didn't say that all, you're
completely misusing what we said. The Chairman was absolutely clear that
they could not continue as part of the Conservative Party as they held
those views and they held them in a way that set an agenda which was not
the Conservative Party's agenda. I think most decent and reasonable people
would recognise that. Our agenda is the one that I state with the party
and I'm not going to have that taken down side roads by others.
ROBINSON: Is there no chance, just
so I understand this, that you kick them out one day, and then say, back
you come a little bit later.
DUNCAN SMITH: We've made it absolutely
clear that any group that holds those sort of views and makes those as
a policy statement is not going to be part of the party. And I also must
say, something much more positive which you don't want to rest on, is that
we have changed a lot of things, I have the first Vice-Chairman who is
of ethnic background, I have advisers now from an ethnic background. We
are making changes to the candidate procedure, which will bring in people
from ethnic backgrounds and more women, some very radical change I'm making,
but I'm determined to do it, and I'm determined to make the change that
brings us back into line with the way the British people think.
ROBINSON: Iain Duncan Smith, thank
you very much indeed for joining us today.