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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 23.3.97
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JOHN HUMPHRYS: Good afternoon. A Labour Government
won't raise the rates of income tax and will stick to Tory spending plans in
its first two years. I'll be asking the Shadow Chancellor Gordon Brown what
that really means.
The Liberal Democrats seem to be winning
some of the arguments on things like voting reforms, but are they being
marginalised in the real political world? And will this be the last General
Election fought under the present laws? All that after News ready by CHRIS
LOWE.
NEWS
HUMPHRYS: When is a political party NOT a party?
During a General Election, that's when. Might this be the last election fought
under the law that does not recognise national parties? We'll have a report on
that.
We'll also be talking to Menzies
Campbell about how the Liberal Democrats want to change things.... and I'll be
suggesting to him that they may be winning some arguments, but losing the
battle.
But first : of all the changes brought
about by the modernisation of the Labour Party the most recent may be the most
extraordinary: the promise by the Shadow Chancellor Gordon Brown that a Labour
Government would not spend more than this government plans to spend over the
next two years. Nor would there be any increase in the rates of income tax
over the lifetime of a Labour parliament. Should we take all of that at face
value ... or might it be, when the realities of government dawn, that Mr. Brown
might have to act rather differently? Well, he is with me now.
Good afternoon.
GORDON BROWN MP: Good afternoon.
HUMPHRYS: Now, apart from the Windfall Tax, about
which we know and we'll talk about that a little later on.
BROWN: I hope so.
HUMPHRYS: Certainly will. You are committed to
not raising income tax rates. Can you confirm that your commitment goes no
further than that.
BROWN: Well the commitment is for a Parliament
for interest rates for the basic rate and the top rate. And in addition, what
I'm saying is to have a fair system of income tax I want over time to introduce
a 10p starting rate of tax. But there is no hidden agenda on the part of the
Labour Party. There are no public spending commitments that we have that
require these tax rises. But what I think is right that a Shadow Chancellor
should do, is not go through every tax relief, every tax exemption ruling this
in and ruling this out, but lay down the principles that govern your approach
and the principles that govern my approach, in contrast to the Conservatives
which I think, it's a form of trickle down on the part of the Conservatives,
abolishing Capital Gains tax and Inheritance Tax.
Our principles are first of all to
encourage work and therefore reward work and give work the incentives that are
necessary. Hence, to illustrate that my pledges on income tax rates.
Secondly, to encourage savings and long term investment, opportunity for all
through investment for the long term and certainly to be fair, hence we want to
cut VAT on fuel to 5 per cent. Now these are the principles that govern the
approach. The framework has been set down about public spending. I've given
an illustration of the direction which I want to go. I don't think Ken Clarke
as well as myself would be right to go through every tax relief or every tax
allowance and make pledges on this or that. You can't in a television studio
anyway write budgets for five years...for a full parliament...(interruption).
What you've got to do and this is how we want to be judged. We should be
judged on this: have we kept to our principles and our principles are a tax
system that encourages work, encourages savings and long term investment and a
tax system that is fair.
HUMPHRYS: Right, but no-body watching this
programme should be under any illusion, you are not saying we promise not to
raise taxes in the next five years. You are simply saying we promise not to
raise income taxes in the next five years.
BROWN: I'd like of course tax to come down.
But the important thing is that we are making a pledge for five years on the
basic rate and the top rate of tax. We do show, not for opportunistic reasons,
but as I say for reasons of principle, it's because I want to send this signal
of the importance that I attach to work, encouraging work and rewarding work,
that I've left the top rate of tax unchanged. I said that the basic rate of
tax will not rise and...
HUMPHRYS: Basically you mean twenty and
twenty-four pence.
BROWN: No, it's the twenty-three pence of rate
actually.
HUMPHRYS: Twenty-three pence.
BROWN: It's now twenty-three pence.
HUMPHRYS: Twenty pence so that stays where it is.
BROWN: The twenty pence is not a basic rate of
tax. I said the basic rate and the top rate of tax. What I would like to do
is introduce a lower starting rate of tax at ten or fifteen pence in the pound
and you see the reason for that is to encourage the unemployed back into work,
to give the low paid a better incentive, to ensure that you have a break from
these high marginal tax rates at the very bottom and that's where the
difference of principle arises between us and the Conservative Party. You see
their trickle down is abolish Capital Gains Tax and Inheritance Tax, use scarce
resources to do that and then hope that the economy gets better as a result
and that everybody prospers. Our way is opportunity for all. So we say let's
get as quickly as possible to a lower starting rate of tax, it's actually a
more progressive tax system, ten to forty than twenty to forty and then we help
the low paid in particular and we help particularly those people who are
finding it difficult to get back into work because for every extra pound they
earn they lose about one pound or sometimes one pound fifty through the benefit
system and the tax system working against them.
HUMPHRYS: Right.
BROWN: Now we want to make changes in that. Now
that's what makes for a dynamic economy. It is opportunity for all, not the
Conservative tax approach which is privilege for a few.
HUMPHRYS: Right, but obviously none of that rules
out the possibility that there may be tax increases in one direction or
another, other than those specific pledges you've made on income tax rates.
BROWN: Well I don't want...
HUMPHRYS: I take the point you don't want to but
the possibility remains?
BROWN: I've got to put it to the country, what
is it that a responsible Shadow Chancellor does and I think it is responsible
to lay down the principles. I ask that people judge me on these principles
and...
HUMPHRYS: And it would be irresponsible then
wouldn't it to say...
BROWN: To set the direction.
HUMPHRYS: Quite and it would be irresponsible then
to say: there will be no tax rises because you cannot make that pledge. There
may be tax rises but not income tax rises.
BROWN: But what I'm also saying and I think
I've been very careful in this and prudent in this, is saying that there are no
public expenditure commitments on our part that will raise taxes. In fact,
I've laid down as you rightly pointed out, very tough public spending rules for
the first two years of the Parliament. In addition to that of course, I've
laid down what I call the golden rule of public spending and borrowing which
means that over time, that's the economic cycle, you want consumption to be
funded by revenues and whatever borrowing is necessary must be within strict
limits. So we've got a tough framework for public spending and public
borrowing, it allows us therefore to make these commitments on income tax, it
allows us to hope also that we can over time introduce what I think will be
extremely good for the economy, this ten p starting rate of tax. And I ask you
to compare that with the Conservatives proposal that they will abolish Capital
Gains and Inheritance Tax and the biggest beneficiaries of that are only five
thousand people in the economy.
HUMPHRYS: Right but that as you've said is not a
commitment, the ten pence rate, that is an aspiration. But...
BROWN: It is an aspiration but I'm serious
enough about it to show the advantages to the public of it. You see a lot of
people think about Labour's tax policies that they are simply opportunist, they
are not, they're based on pinciple. In 1992, when I took over from John Smith
as Shadow Chancellor I said I would rebuild our approach to tax from first
principles and that is why I made all the changes. I dropped the Shadow Budget
and all that that implied. I said that tax must be based on clear principles
of work, of savings, of fairness. And I then rebuilt our approach to taxation
around that and when people ask me: has the Labour Party changed on this? I
say definitely yes because we've gone back to what I think are Labour
principles, building your system of taxation on opportunity for all whereas I
would say the Conservative approach and I think it will be tested during this
campaign, with their proposals on Capital Gains Tax and Inheritance Tax, is
about privilege for a few.
HUMPHRYS: And you use the word 'fairness' - you
return to the word 'fairness' over and over again. Would you not accept in
that context - in the context of fairness - that the earnings limit on National
Insurance - employees' National Insurance payments is unfair because manifestly
it favours the better off at the expense of the worst off. If you're earning
twenty-three thousand pounds, or whatever it is, you pay two thousand odd
pounds in National Insurance. If you're earning ten times that amount, you
still pay only two thousand pounds.
BROWN: Well, we-
HUMPHRYS: Now, that isn't fair, is it?
BROWN: Well, this approach to the National
Insurance ceiling. We dropped that in 1992. It was announced at the time in
the Shadow-
HUMPHRYS: But, I thought this was a guiding
principle of fairness - you said so, at the time?
BROWN: The Shadow Budget dropped it but what Ido
say abour fairness - let's look at what our principles of fairness and how
they're applied. First of all, cutting VAT on fuel.
HUMPHRYS: No, no, but let's look at National
Insurance...
BROWN: Well, come back-come back to that, in a
second but let me just explain. Cutting VAT on fuel to five per cent. Now,
that is regarded by the public, I think, as the most unfairest tax of all the
twenty two tax rises under the Conservatives. And, we are pledged to reduce
that from eight per cent to the lowest level possible - that's five per cent.
Now, that will help pensioners most of all. Secondly, the Windfall Tax. You
said you-
HUMPHRYS: Yes, we wanted to discuss that - yes.
BROWN: Well, that is a fairness measure because
it is excess profits of a few being used to provide jobs - two hundred and
fifty thousand jobs for the young unemployed. The ten p tax rate. Now, that,
again.
HUMPHRYS: Not a commitment, an aspiration and you
mentioned that.
BROWN: It's a very important aspiration.
HUMPHRYS: But let's deal with - Alright, but it
hasn't happened and we're dealing, at the moment, with things that you say-
BROWN: Of course.
HUMPHRYS: -are manifestly fair and unfair. Now,
what I'm asking you to comment on is whether - although you dropped it - as you
say, you dropped it after the last Budget, the last Shadow Budget but is-is the
principle guiding National Insurance fair or unfair, in your terms?
BROWN: Of course, any decision I make has got
to be fair but, of course, the National Insurance system itself has changed
over the years. It used to be heavily earnings related and, therefore, it was
right to look for more at the top. That has changed. It is no longer heavily
earnings related.
HUMPHRYS: Well-
BROWN: And, we dropped that policy in 1992.
The Shadow Budget was dropped and, I think, I remember doing interviews with
you, at the time - when you asked me about why we dropped the Shadow Budget and
I said: look, you've got to go back to first principles on taxation. And, by
going back to first principles and taxation, I come to the conclusion that the
fairest way of dealing with taxation on work is to try and get, as quickly as
possible, to a lower starting rate of tax to encourage all. And, then, you've
got a more progressive tax system - ten to forty.
HUMPHRYS: But, that's exactly the point isn't it?
You want a more progressive tax system and yet the more you earn - under this
present system, as far as National Insurance is concerned the better off you
are. Now, how is that progressive and by your own claims time and time and
time again, the rich have got richer over these past many years, the poor have
relatively got poorer. And, yet, you're prepared to reward the richer by
allowing them to get away with not paying National Insurance. Now, that wasn't
fair five years ago.
BROWN: But, John, you've got it all wrong
because what is the reason, what is the reason why the rich have got richer and
the poor have got poorer? What is the biggest inequality and injustice in our
society that's causing that? It is the lack of work and the lack of skills for
work.
HUMPHRYS: That is one of the reasons. The other
reason is the tax regime.
BROWN: No, no. That is the biggest. That has
caused the biggest rise in inequality in our country. It has been the lack of
work and the lack of skills for work. It has been unskilled workers in
particular being denied higher earnings as a result of not having skills but
it's also people being denied work. Now, every decision I make has got to be a
balance between what I do to encourage work, what I do to encourage savings and
long-term investment and what I do to make the tax system fair.
HUMPHRYS: Precisely and it's that last context
that I'm trying to get you to talk about: National Insurance.
BROWN: This is exactly the point I'm making. I
want to encourage jobs. I want to encourage incentives for jobs, I want
particularly to get the long-term unemployed back to work and, therefore, I
want a tax system that must balance the need to create jobs with the need for
fairness. And, I tell you, the National Insurance system of payments is rather
different from what it was twenty or ten years ago.
HUMPHRYS: So, have you ruled it out, then?
BROWN: I've ruled it out and I said so in 1992.
HUMPHRYS: Forever?
BROWN: Well, we said in 1992 we weren't
returning to this and that's something I've said over five years. There can be
no doubt about that.
HUMPHRYS: So, absolutely no abandonment of the
upper earnings limit under a Labour Government - that is a pledge?
BROWN: Well, that's what was said in 1992,
John.
HUMPHRYS: And, nothing that has happened since
then, not withstanding the commitments to fairness have persuaded you to change
your mind?
BROWN: Well, if anything the point I'm making
is our emphasis must be on the creation of jobs. It must be on doing that.
HUMPHRYS: Right.
BROWN: And, encouraging work, encouraging
people to work harder, rewarding the work ethic. That is the biggest
inequality in Britain today.
HUMPHRYS: OK, so we-
BROWN: The lack of work and the lack of skills
for work.
HUMPHRYS: So, we can add to the commitments on
Income Tax, a commitment on National Insurance - absolutely no abandoning that
fact.
BROWN: Well, that was made in 1992.
HUMPHRYS: Let's look, then, at the other tax that
you're anxious to talk about - the Windfall Tax. Anxious to talk about it, but
we still don't know and this is absolutely fundamental, isn't it? We still
don't know which companies are going to have to pay that tax. Now, you had a
press conference last week, you wouldn't name the companies and yet your
assistants, the minute the press conference was over rushed off and started
talking to reporters from this organisation among others, telling them which
companies were going to be included in their tax.
BROWN: I don't think that's strictly accurate.
HUMPHRYS: Why?
BROWN: I mean, I think this is-
HUMPHRYS: I'm quite happy to give you names, if
you wish.
BROWN: What the names of reporters or the names
of individuals?
HUMPHRYS: Both, both, both.
BROWN: Now, John, let's get this back to a
certain proportion.
HUMPHRYS: Well-
BROWN: When you're talking about a Windfall Tax
in the utilities the first thing is its purpose. It's not there for its own
sake, it's about creating jobs.
HUMPHRYS: I didn't suggest anything of the sort.
I merely wanted to know who is going to have to pay it because that's
fundamental?
BROWN: Let's be clear about the purpose, first
of all.
HUMPHRYS: Secondly, who's going to pay?
BROWN: What I've got to do as a-as a Shadow
Chancellor and, eventually, I hope, as a Chancellor is draw up the tax law that
will govern this approach. The Conservatives had a Windfall Tax in the banks,
they never announced the companies beforehand. What I say we've got to do is
announce the category of company that is eligible for this tax and that is the
right thing to do. And, I said on Wednesday and it was absolutely clear, then,
that the companies that are affected who would be considered for this tax are
those companies who've been privatised and who are licenced and regulated by
Statute. And, I think, that's pretty clear. You're talking about privatised
utilities that are now regulated by Statute.
HUMPHRYS: Right but you missed something out
there, didn't you?
BROWN: Can I just finish this because it's
quite important. These are the companies that would be eligible but, of
course, if they hadn't made excess profits they would not be liable. So, the
next stage, of course, is inside the Treasury, in Government, looking at excess
profits and then making a judgment as to which companies are liable for this
tax. They may be eligible but not liable and which companies are liable will
be decided inside the Treasury and, then, of course, I'll announce it in the
normal way-
HUMPHRYS: Right.
BROWN: - in a Budget. But, what I will
announce in that Budget is the category of company that is affected and the
rules that will be followed then.
HUMPHRYS: So let's just pursue the eligibility bit
for a moment then, because yes, you did indeed say those companies that were
eligible, utilities privatised since 1979, that were regulated and licenced by
statute. What you used to say were - you added something on - you said those
that also enjoyed some sort of monopoly status.
BROWN: No, I didn't .. no, no, John..
HUMPHRYS: You certainly did in the past, you said
that to me in the past.
BROWN: Well, let's just be clear about this.
What I said was companies that are licensed and regulated by statute, and then
I said, if they are liable to pay this they will have to have made excess
profits. It's the excess profits that we're going to use to finance our jobs
programme, and I think many of the utilities would like now, that to happen and
to get this sorted out.
HUMPHRYS: So monopoly doesn't come into it?
BROWN: And the excess profits of course, will
have been made either because of lax regulation or because of the monopoly
position of these companies, or because of the under-valuation of the sale
price, so it's pretty clear that excess profits arise from a particular reason.
It could be lax regulation, because the Trade and Industry Select Committee
which I was referring to this week, an all party committee, five Conservative
MPs on it, published a report saying that yes indeed, the regulatory regime has
been lax. At the same time there have been many reports talking about the
under-valuation of the sale prices of these utilities, right up to, and
including the most recent privatisations, and of course monopoly position is
something that has got to be taken into consideration as well. So all of these
three things have got to be taken into consideration, and therefore I'm not
changing my position at all. It's utterly consistent with what I said last
year and the year before. And just remember I have proposed this windfall levy
for five years. Since 1992 I've said the purpose, I've said it's one-off, and
I've said it will be done fairly and within the law, and I even went to the
stage of publishing my legal opinion on this matter, so that everbody could see
that it was strictly lawful, and it would go ahead in a fair way.
HUMPHRYS: So manifestly then companies like BT who
made very large amounts of money indeed since they were privatised, British
Airports authorities manifestly made very large profits indeed since they were
privatised, in that case some would say as a result of monopolies, of a
monopolies situation, in the case of BT not as a result of a monopoly
situation, but it was under-priced and so on and so on - both of those
companies would come into that category, would come into the liability
category. Now I know you're going to tell you won't name those companies.
BROWN:: You see, you're at it again. What you
want me to...
HUMPHRYS: But I don't know why you're so coy about
this.
BROWN: What you want me to do is to name
individual companies. Now, a Chancellor when he's announcing a budget does not
say: Look this is - well, I've got to be fair and accurate in the law here, and
be non-disciminatory, and I think people will understand it when I explain
that, that a Chancellor when he's announcing a budget does not say, "I have got
a tax to deal with X company or Y company. What he must say and rightly so is
he's dealing with a category of companies.
HUMPHRYS: Well, that's what I'm asking you.
BROWN: And the category of companies are
privatised utilities who are regulated and licensed by statute, but of course
even if that were the case they will have had to have made excess profits.
HUMPHRYS: Right, so you won't be naming them,
not even in what we understand you're going to be producing - this manifesto,
your separate manifesto for business. There'll be no more information in that
manifesto for business than you have given me this morning?
BROWN: Not on the Windfall Tax because I think
I've done what actually is far more than the Conservatives did when they
introduced a Windfall Tax in the banks, where they never even told the banks
until after their legislation was published.
HUMPRHYS: But there will be more information on
some other areas?
BROWN: Yes indeed. This business manifesto is
a very important thing for the Labour Party. It will be as important to
business as the General Election Manifesto as a whole will be to the
electorate, because what it will set down is the principles that guide our
approach and will reflect two years of very intense discussion with business
about the way ahead. It will talk about the need for stability, the need for
higher investment with some measures to achieve that, the importance we attach
to education and the reform of the Welfare State, a constructive engagement
with Europe. And I will be saying in that manifesto as will Tony Blair, that
during the UK presidency of the European Community, the European Union in 1998
if we're returned to government that we will have a working party with business
and government to look at all the issues on the economy affecting the
presidency, completing the Single Market, labour market flexibility, the
creation of jobs in Europe - we're going to have a Minister for Employment and
labour market flexibility to deal with relationships with Europe, and we will
want a working party of business and government to deal with these issues. And
I have talked to Adair Turner the Director-General of the CBI about these
matters...
HUMPHRYS: And the Institute of Directors?
BROWN: We will be talking to the Institute of
Directors, and indeed Barbara Roche who speaks for small business for the
Labour Party has been in touch with them about a number of issues as well.
HUMPHRYS: And have they endorsed it, both the CBI
and the ...?
BROWN: What Adair Turner has rightly said is
that he is happy on behalf of the CBI to say that they will join this working
party, because what we're trying to do is to lead in Europe about reform of
competition policy and energy, and telecommunications. Labour is the party of
competition, trying to get more competition into the European market, whether
there our vested interests, whether a restrictive practice, we will break them
down during our presidency wherever possible, and equally on labour market
flexibility, adaptability and on job creation which is absolutely vital, where
I believe we have more ideas to offer Europe than ever before about how we can
both create jobs and make them more adaptable and flexible, we will be working
with the CBI. So here we have, with Adair Turner, an agreement that the CBI
will be represented on this working party, and I think this is a very important
development, because it shows that business and government could work together
both in Britian and Europe to achieve common aims. And we're getting away from
this old idea that public has got to say one thing, private's got to say
another, and there's never any proper relationship between them.
HUMPHRYS: Right, can - I'll move on to the
question of public finance, the state of the public finances. Tony Blair has
said that there is a huge black hole in the nation's finances. Now what do you
mean by that. Do you mean that we're borrowing too much this year when you talk
about the huge black hole, or are you talking about the level of the nation's
debt that has been built up as a result of borrowing over the past X number of
years?
BROWN: Well twenty six billion is itself a
black hole isn't it.
HUMPHRYS: That's the current borrowing.
BROWN: We will finish this year with a twenty
six billion deficit. Next year it will be nineteen billions, now that is very
high indeed. The total of national debt has doubled since John Major became
Prime Minister to more than four hundred billion pounds. And therefore it is
quite wrong for the Government to say they are leaving the Public Finances in a
good state. They are leaving us with difficulties and what I said only a few
days ago is that we will not make the mistakes of 1964 or 1974 when Labour
Governments came in and for a variety of reasons it did not acknowledge the
problems that they were facing and ended up probably spending too much in the
first two years and having to cut back for the next three years. That's why
I've set these tough public spending rules, I know the problems we're going to
inherit and I know we are going to have to act within these spending limits in
Government.
HUMPHRYS: You will have to act within those
spending limits but will you set out, as a priority to tackle that..to fill in
that big black hole in your first budget.
BROWN: What I've said is that we will publish
an audit of where the Conservatives have left us. I think it's only right...
HUMPHRYS: That's not going to solve it is it.
Spotting that the hole is there isn't the same as getting the spade and filling
it in is it?
BROWN: John, what you've got to look at and I
think this is very important, is how has this deficit arisen..
HUMPHRYS: Right now because we don't have
limitless time I'm much more concerned with how you're going to fill it, what
I'm saying is you've said there is that big hole there, what I'm asking you now
is how you're going to fill it in.
BROWN: The twenty-six billion is big indeed and
the reason that we've made these tough decisions about public spending is
because we recognise we've got to get the deficit down. Now we have not made
these extraordinary spending announcements that the Conservatives have made
over the last few weeks, we have not committed ourselves to a Royal Yacht at
sixty million pounds, to a Cadet Force of a billion pounds, to a new share
scheme at forty million pounds to cutting this and that.
HUMPHRYS: I'm asking what you are going to be
doing.
BROWN: So we are not making reckless spending
commitments. What we are doing is acting within the spending announcements
we've made and I have not only told my colleagues in the Shadow Cabinet they've
got to keep within that for one year, I have said we'll have a fundamental
review of spending to influence year two and that will start immediately. In
other words, the usual spending rounds are cancelled for the first year, so
that we can have this fundamental review. And I think it's right, after
eighteen years, coming into power we have a fundamental examination of each
area of public spending.
HUMPHRYS: Which is fine if what you are saying is
- and as a result of those reviews we're going to chop chunks out of the Budget
so that we can fill in that big black hole.
BROWN: Well what we want to do, of course, and
that's why we have this big Welfare to Work Programme is to cut the spending on
Social Security.
HUMPHRYS: Yes but as you know that takes time,
that takes time. If you're telling me that this is an immediate problem,
you've said - I've written down what you've said - "we're not going to make the
same mistakes we've made in the past you said. It's got to be dealt with now".
I'm asking you how you're going to deal with it. You tell me you're not going
to spend sixty million on a Royal Yatch well fine, but that isn't going to fill
in that hole is it.
BROWN: But John, because we recognise the
problem, I've set these tough limits. The previous Labour Governments allowed
spending to rise in the first two years...
HUMPHRYS: But the same limits, the same limits as
the Government has at the moment and that hole is going to stay there.
BROWN: And with a Welfare to Work Programme to
get the deficit down.
HUMPHRYS: Which will take many years to develop.
BROWN: And with choices having to be made in
existing spending programmes to re-direct resources like the Assisted Places
Schemes.
HUMPHRYS: In existing programmes.
BROWN: Yes. Like the Assisted Places scheme in
the councils.
HUMPHRYS: But you're going to spend that money on
something else, reducing the class sizes for five to seven year olds.
BROWN: Like the shifts in Health Service
expenditure these are very important, like the bold decision we made to replace
Student Grants by Student Loans. Now all these things are big decisions that
we made to use resources better.
HUMPHRYS: But they're not going to fill in that
hole.
BROWN: We are reducing the deficit by tackling
unemployment and high Social Security bills. We are also helping the reduction
of the deficit by not making these extraordinary spending commitments the
Tories have made. In other words, if the Tories were returned then their
spending bills are already higher because of all the commitments....
HUMPHRYS: They might very well make that hole
bigger, I wouldn't want to agure with you about that...
BROWN: And we're going to bring down the
deficit by these measures. One, sticking to our spending commitments..
HUMPHRYS: Which is the Tories' spending
commitment.
BROWN: Two, our Welfare to Work Programme to
get...
HUMPHRYS: Which will take years to get going.
BROWN: John, that is ridiculous. You can move
quickly to get unemployment down in this country by the measures we're talking
about.
HUMPHRYS: In other words, you will live in the
immediate future, even though you say it is urgent, has to be dealt with now,
you will live with the same black hole that the Tories are living with.
BROWN: But John, we have got a strategy to get
the deficit down. The strategy is first of all to stick to these tough
spending limits, secondly, not to make extra commitments and thirdly, and
thirdly, to introduce the Welfare to Work Programme as quickly as possible and
that's why the Windfall Tax will be introduced in our first budget.
HUMPHRYS: Putting aside the Windfall Tax, which we
had David Blunkett on this programme telling us it isn't going to make a very
large deal of difference in the amount the Government is going to have to
spend, even if it works reasonably well and ...
BROWN: This is where political debates get out
of hand John because three billion pounds is not an insignificant sum of money.
HUMPHRYS: I didn't suggest it was but three
billion pounds assumes that all of those kids are back in work just like that
and the reality is it's not going to happen and you know that.
BROWN: For half this interview you've been
wanting me to announce that I'm going to do more and now you say, when I say
I'm going to do more, like three million unemployment, you say it doesn't add
up to anything. It is very important and it will get unemployment down and I
am absolutely determined that two hundred and fifty thousand young people get
the chance of moving from Welfare to Work and in doing so we help everybody by
reducing Social Security.
HUMPHRYS: But if we look at one of the things
you're going to have to spend a great deal of money on, every Government does
and that is the National Health Service. Now you say there is a hundred
million pounds crisis there, you'll save some money a hundred million pounds or
whatever on bureaucracy or so you say, but you're actually telling me now that
you are not looking at ways where you can put more money into the NHS for
instance, you're looking at ways of cutting spending. So the NHS is going to
"continue to suffer", I put the words in quotes because that's the sort of
language you have used over the years, you've said the NHS, every time the NHS
budget has been discussed you've said it has been starved of funds by this
Government. Now you're sitting here this morning telling me we're cutting
spending. That means the NHS is going to suffer.
BROWN: John, this is a ridiculous proposition.
We have spent the last...
HUMPHRYS: What is? What's ridiculous?
BROWN: It is a ridiculous proposition that
we're cutting into the NHS - that is quite wrong.
HUMPHRYS: You're not going to give it more money
and it is already starved of funds.
BROWN: We have said two things. One is that we
will match the rise in inflation every year and secondly, we will transfer
resources from administration to patient care. So that the Health Care
services, the real services get more resources. And, you start with a hundred-
HUMPHRYS: A hundred million.
BROWN: You start with that. John, if I said to
you-
HUMPHRYS: That is less than one third of one per
cent of the Budget
BROWN: John, if I said to you..
HUMPHRYS: NHS Budget.
BROWN: John, if I said to you in 1989, we spent
eight per cent of the Health Service Budget on administration and now it's
rising to thirteen per cent.
HUMPHRYS: But, by your own figures you're telling
me you're going to save a hundred million.
BROWN: Well, let me finish, John. The
difference is actually, one point five billion pounds. We have fifty thousand
less nurses, twenty thousand more managers. Now, I'm telling you that the
switch of resources back to patient care by scrapping the Tory internal market,
by making the reforms and trusts and elsewhere that are necessary will
release resources back to patient care.
HUMPHRYS: One point five billion.
BROWN: Over time, over time.
HUMPHRYS: Over how long?
BROWN: Over time we will reduce the share of
administration from that thirteen...twelve to thirteen per cent, back below
ten per cent and we will get the money back into patient care.
HUMPHRYS: So one point five billion over what
period of time?
BROWN: We are pledged to make these
changes and I think we can do that - over time.
HUMPHRYS: How long?
BROWN: I'm not going to set a timetable for it.
HUMPHRYS: But you see what value of that is it.
BROWN: But over time we will do it. We've
said we will start with a hundred million and that's a very important
commitment. George Robertson, my colleague the Scottish Under Secretary, has
already announced he's scrapping Health Service Trusts and saving money from
scrapping that additional tier of bureaucracy in the Health Service. He's
going to merge a number of them and is going to save money that way - he says
thirty million pounds in Scotland alone.
Now, these are the sort of changes we
can make to get money back to where it should be and that is to nurses and to
doctors and to patient care and therefore, we cut the waiting list in doing
so. And we end, I think, what is very clear about the Health Service a
demoralisation amongst the staff. So, we'll make the difference.
HUMPHRYS: Gordon Brown, thank you very much,
indeed.
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