................................................................................
 
                                 ON THE RECORD 
                           ALISTAIR DARLING INTERVIEW         
 
RECORDED FROM TRANSMISSION BBC-1                                 DATE: 30.11.97
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JOHN HUMPHRYS:                         Paul Wilenius reporting there.  Alistair 
Darling, how are you going to respond.  How is the Government going to respond 
to those MPs who want you to loosen the purse strings a bit? 
 
ALISTAIR DARLING:                      Well, we owe our election victory to a 
large extent to the fact that we promised to ensure that the public finances in 
this country will be put on a stable basis.  Now we are not going to repeat the 
mistake of previous governments who came into office, started spending money 
and then had to rein in in the remaining part of the parliament, nor are we 
going to repeat the mistakes that Lord Lawson made in the 1980s when he 
completely misread the economic signals.  He allowed the country to go on a 
binge which ended up in one of the deepest recessions we have seen this 
century.  Our position is quite clear.  We intend to overhaul the public 
finances to ensure that our priorities - the priorities that got us elected in 
May - are met, but we are going to ensure that the public finances are there 
and sustainable so that we can have the steady growth that people want to see 
and that we don't get into the 'boom and bust' cycle that we have seen in the 
past. 
 
HUMPHRYS:                              But those MPs have looked at the figures 
as well and they've seen what you've seen, which is that public borrowing next 
year is going to be half what the Treasury had expected to be, so there is a 
bit of money in the kitty - quite a lot of money in the kitty as far as they're 
concerned, and they think that you can afford it.  You are saying to them 
'absolutely not!' 
 
DARLING:                               At the moment, we spend some twenty five 
billion pounds a year on debt repayments.  That's more than we spend on 
schools, for example, and at this stage in the economic cycle we should not be 
adding to debt - which is what was happening at the time of the last election 
because we were running a substantial deficit, nearly twenty two billion pounds 
last year.  Gordon Brown in his budget in July made it clear that reducing debt 
over the next three years was very, very important because otherwise you just 
won't have the platform on which to build in the future.  You know, if you 
allow debt to pile up when the economy is actually in recovery and when it is 
growing strongly, then you really are storing up problems for yourself in the 
future were there to be a slow-down at that time and my colleagues - the vast 
majority of whom I think accept this, know that the priority of this Government 
is to ensure we get stability so that we can get sustainable growth in the 
public services that everyone wants to see.  You know, if I could just mention 
of course, you know, since the election you shouldn't overlook the fact that 
despite the constraints upon us, despite the fact that we are having to take 
some tough decisions, we have actually put nearly four billion pounds into 
health and education this year and next.  Money that would not have been there 
but for the change of Government. 
 
HUMPHRYS:                              I don't know where you get this 'vast 
majority of the MPs' from.  I mean, we've seen one hundred and twenty plus sign 
the letter to the Chancellor; I talked to one at the weekend, Roger Berry, who 
said he hadn't come across a single MP who supports what you are doing as far 
as single mothers is concerned, and there is a huge number of them out there 
who are opposed to what you are doing and they've seen the same figures that 
you have seen.  They are not fools, are they? 
 
DARLING:                               Yes, I was watching the BBC news all day 
yesterday when I was told that there were two hundred MPs rising up.  By the 
end of the day it appeared there were precisely four at the meeting referred to 
and that Roger had engaged in some speculation as to just how many might be 
behind him. 
 
HUMPHRYS:                              Well, there were one hundred and twenty 
plus who signed the letter, I mean that's a matter of record, isn't it. 
 
DARLING:                               A number of my colleagues asked the 
Chancellor to ensure that so far as the changes to the lone parents benefit was 
concerned that it should be phased in with the improvements they were making in 
the Welfare to Work Scheme, providing childcare places for lone parents to help 
them go to work.  And now we've done that, we've brought forward, as Gordon 
Brown announced last week the Welfare to Work Programme which will provide one 
million places for children, enabling lone parents to get into work.  Now, if I 
can just make a rather important point here which is sometimes overlooked in 
these things: the present welfare system isn't working, everybody knows that.  
It was designed over half a century ago for an entirely different workplace.  
Women now comprise the majority of the workforce, nearly a fifth of families in 
this country are headed by lone parents and only forty per cent work.  Now, one 
of the reasons that only forty per cent work is because when you speak to lone 
parents they will say, 'well I can't get anyone to help with the childcare' or 
'it is too expensive and it doesn't make work worthwhile'.  So the whole 
strategy so far as our reforms are concerned is to do everything we can to 
encourage people and to help people get into work because in work you are far, 
far better off than you will ever be if you are relying totally on benefits. 
 
HUMPHRYS:                              Well, all those MPs know all about that, 
their letter came after all of these various proposals and what the Chancellor 
said in his Autumn statement and all the rest of it.  That came at the weekend. 
 
DARLING:                               But actually most of the signatures went 
on before.  You know, we all wander around lobbies and we all know what's going 
on. 
 
HUMPHRYS:                              But they sent the letter afterwards, I 
mean, they could have said 'look I now want to remove my signature because I 
heard the Chancellor', you know you are making it sound as though they are a 
terribly naive bunch.  Maybe they are, but do you believe they are? 
 
DARLING:                               No, my colleagues are not at all naive. 
 
HUMPHRYS:                              Well, then they wouldn't have sent the 
letter if they didn't want to send the letter, would they? 
 
DARLING:                               I've explained to you what was in the 
letter and I've explained to you that the Government had already met that 
objective and I think you will find that the vast majority of my colleagues are 
united in the support for the Chancellor's determination to get a stable 
platform on which we can build in the future.  I don't think anybody really 
wants to go back to the situation we've had in the past where previous Labour 
Governments - and Tory Governments - have made the mistake of spending money 
they couldn't afford to at the start of the Parliament to end up with cuts at 
the end.  And they also support ... can I finish this important point? ... I 
think everybody also supports a major plank of our electoral platform which is 
to modernise the welfare state to help people get into work.  We are doing that 
particularly as far as lone parents are concerned, we are also looking of 
course at other measures indicating the tax and benefits system. 
 
HUMPHRYS:                              Well fine - let me follow precisely that 
up, because what they're concerned about is that you are damaging your own long 
term plans. I mean you talk about the importance of getting people on welfare 
into work and nobody would dispute that, but what you are now doing by cutting 
these lone parent benefits is actually damaging that very aim - and that's the 
point, that's what they are so concerned about! 
 
DARLING:                               No, I don't think they are saying that 
at all.  What we are doing is spending some three hundred million pounds... 
 
HUMPHRYS:                              Over the next many years possibly.  This 
year it's only sixty million, let's be clear about that, that's confusing 
people.                                                              
 
DARLING:                               You can't produce a million places, you 
know, instantly, but from April next year right across the country there will 
be places which will help lone parents get the childcare they want and they 
need to help them get into work.  As I say, only forty per cent of lone parents 
work in this country, it's something like eighty per cent in France and in 
other countries it's generally higher and if you look at the pamphlets that the 
Treasury published last week on modernising the benefit and tax system, you 
will see that in there one of the main barriers preventing people from going to 
work is lack of childcare places.  There are other barriers as well... 
 
HUMPHRYS:                              That's a factor, certainly. 
 
DARLING:                               ...you know, the impact of coming off 
benefit and coming into the tax system.  Now, right across the board we are 
making improvements in the welfare system and there's various proposals now 
being worked up which will actually help people get into work and surely it 
must be the Government's objective - given the changed nature of the workplace, 
given the fact that people are going to be coming in and out of work, that we 
have one household in five with nobody in work, it must be the Government's 
objective to do everything it possibly can to help people get into work. 
 
HUMPHRYS:                              And my point to you is that you are not 
helping in that by cutting these benefits. You tell me to look at the latest 
Treasury pamphlet. What about looking at the statement that your own party put 
out just before the election about these particular benefits when you said - 
and I quote - "it is a Welfare to Work benefit, cutting it worsens the poverty 
trap".  That's what you believed in April, the election was in May, then you 
changed your mind.  
 
DARLING:                               No.  When we came into power there were 
all sorts of matters that we had to attend to, many of which we inherited.  The 
government made its choice, the government has decided that its priority must 
be to help lone parents get into work. And I think that has, you know, the 
overwhelming support.  
 
HUMPHRYS:                              But you're not. That's the point I'm 
making. You're damaging that longterm aim, that's the whole point. It's what 
you said before the election. 
 
DARLING:                               We are helping lone parents and others, 
you know as well, get into work. Both by reforming the system as I said, 
providing the childcare places that are absolutely essential and also, you 
know, this is an important point, we are putting in hand substantial steps that 
will lessen the problem that people face coming off benefit, going into work 
when they end up paying effectively very high rates of tax.  Those are 
important strands in our approach, they will be effective and they are being 
developed during the course of this parliament.  I believe that what we are 
doing is absolutely right because it is giving people opportunity, opportunity 
that they have not had up until now.  
 
HUMPHRYS:                              But there will be less incentive. By 
your own declaration before the election, there will be less incentive for 
single mothers, lone parents, to get into work because some of them will be 
appreciably worse off. And all this is to save..you say three hundred million 
pounds, it's actually sixty million pounds over this next year during the time 
when you are in this self-imposed financial straitjacket.  An extraordinary 
thing to do when you are going to have to borrow six billion pounds less than 
you thought you were going to have to borrow next year.  
 
DARLING:                               Well let me deal with the two parts of 
your question. Firstly the money, the money that is being allocated is coming 
from the Windfall Tax and from the new opportunities fund so it isn't effected 
by the overall general... 
 
HUMPHRYS:                              It's just accounting...change that 
around. 
 
DARLING:                               Well, no, it was made clear that, right 
from the start that's where the money was coming from.  
 
HUMPHRYS:                              That's where you said it had to come 
from. It didn't have to, it didn't matter how you slice the cake, does it.  
 
DARLING:                               Well where you raise money from does 
actually matter. But the point is we've made that money available and that 
money will be available starting from April. But the main point that you were 
raising there, is the fact that for many people work doesn't actually pay. Now, 
it's that problem that is the fundamental driver of all our reforms.  That's 
why we, for example, want to provide more childcare places, that's why we want 
to move towards a starting rate of income tax of ten pence, when we can afford 
to do that because it lessens the barrier and the jolt that sometimes people 
can feel when they come off benefit and they go into work. We are looking at 
integration of the tax and benefit system because again that will make it more 
attractive for people to go into work. And we're looking at the working 
families' tax credit which again means that when people go into work, they will 
see the benefit of it.   
 
                                       Now, this sort of reform just hasn't 
been looked at by any government in the past, you know our own included. And 
half a century on from the Beveridge reforms, of just the first Labour 
government in 1945, it is high time that we looked at these problems, we are 
tackling them, it will take some time to do it but we're well on the way to 
doing it.  If you look at Gordon Brown's pre-Budget report last week, the whole 
thrust of it was creating the economic stability we need so that we can  
get..create the wealth in the first place that we need and the jobs that we 
need, and reforming the Welfare State to encourage people to get into work.  
 
HUMPHRYS:                              Are those cuts going to carry on after 
these two years are up.  Are you...you won't be restoring them will you? 
 
DARLING:                               Well, I shall repeat the point that you 
shouldn't overlook.  We've put more money into schools, more money into 
hospitals, there was a major boost to help pensioners last week.  
 
HUMPHRYS:                              That's not answering the question though 
is it.   I was asking you a specific question. 
 
DARLING:                               I wouldn't want you to overlook that 
point.  
 
HUMPHRYS:                              Well you've made it already as you say.  
So perhaps you'd answer that question, will those cuts continue? 
 
DARLING:                               At the moment, as you know, the 
government is engaged in a complete review of all its spending. Every penny of 
the three hundred and twenty billion pounds that we spend, and at the end of 
that process, which will be completed next summer, we will set out our 
objectives, our priorities that we intend to meet for the rest of this 
parliament and beyond.  At that time, we will determine how much the government 
is going to spend in the remaining part of this parliament.  
 
HUMPHRYS:                              Alright, in the very immediate future, 
the coal industry is in crisis, or so it tells us and many people believe to be 
the case.  Are you going to help them out. There's a report this morning that 
you will help a little because otherwise an awful lot of mines are going to 
close, a lot of people are going to lose their jobs.  
 
DARLING:                               Well again, we've inherited a difficult 
legacy in that the last government almost prided itself in not having an energy 
policy.   
 
HUMPHRYS:                              Are you going to help them out is the 
question. 
 
DARLING:                               Well we've taken a number of steps which 
will help to ensure that coal has a level playing field . We've taken steps to 
stop the dumping of cheap coal in this country. We've removed the disadvantage 
that coal had as against nuclear - so far as the levy is concerned. And over 
the last few days there have been some encouraging signs. Remember, many of the 
other producers, the non-Budge producers, have already signed contracts with 
the generators.  Budge himself has been making some progress over the last few 
days.  
 
HUMPHRYS:                              So no more help? 
 
DARLING:                               Our objective is to ensure that there is 
level playing fields. That coal isn't discriminated against because that's in 
no-one's interests. But you know as far as direct subsidy is concerned, which I 
don't think anyone's asking for, no that isn't our policy.   
 
HUMPHRYS:                              Well a little bit of price support in 
the meantime to tide him over because I recall, as you know doubt will, Robin 
Cook now Foreign Secretary, saying not that very long again, letting the pits 
close would be short-termism on a criminal scale.  But you are telling me this 
morning that you are prepared to let those pits close are you? 
 
DARLING:                               No, what I'm saying to you is, the 
government has already announced a number of steps that will help the coal 
industry and to ensure that we do have a balanced energy policy.  You know I 
have explained what we have done there, so far as the fossil levy is concerned, 
we've asked the regulators to look at the gas contracts, to ensure that there 
isn't a bias against coal. We're taking steps to ensure that we don't get the 
cheap coal that is dumped in this country at the present time.  There's a whole 
range of things that the government can do. The tragedy is that we, of course, 
could only start this work when we got elected in May, when it really should 
have been done several years ago. 
 
HUMPHRYS:                              Can we look at the council spending 
round that is coming up this week, I was going to say next week, it's this week 
isn't it.  Are you going to let the council spend more, or are you going to 
give them more so they don't have to raise local taxes.  
 
DARLING:                               John Prescott will be making a statement 
so far as English local authorities are concerned later this week. And I dare 
say I would get into great trouble if I told you what was in it.   
 
HUMPHRYS:                              Well what's the philosophy, what's the 
policy. 
 
DARLING:                               The philosophy is that local government, 
as with the whole of central government, has to stick with our overall policy 
which is to maintain a tight discipline over spending.  And that philosophy 
applies to local authorities just as much as it applies to us.  
 
HUMPHRYS:                              There's going to be big cuts then aren't 
there. 
 
DARLING:                               Well, can I just - the important area of 
education, we've already taken steps to ensure, you know as I said to you 
earlier, that the extra billion pounds that we promised for schools, will 
actually be spent in the front line.  So, in areas where there is the maximum 
priority, particularly so far as education is concerned, then we've already 
taken the steps that will ensure that that is delivered.  But overall - can I 
just repeat this point - the reason that we are maintaining tight control of 
public spending, is because we are determined to avoid a situation where 
spending runs away from us, as has happened to governments in the past, and we 
then have to embark on severe retrenchment, you know three or four years down 
the line. We're not going to do that. 
 
HUMPHRYS:                              There will be more cuts then in local 
government spending over the next year. That's inevitable from what you just 
said isn't it, because they're going to get, what is it, one point six per 
cent or something, half the rate of inflation.  
 
DARLING:                               I'm not saying that.  What I am saying.. 
 
HUMPHRYS:                              It's bound to be isn't it. I mean you 
get more money for education, you're not going to get more money for anything 
else, therefore - you don't have to be a mathematical genius to work it out, 
they're not going to have the money to spend are they, there will be cuts.  
 
DARLING:                               I was making the point that there will 
be more money for education next year.  The other point that I was making is 
that John Prescott will be making a statement in the House of Commons, which is 
the right place to make it this week.   
 
HUMPHRYS:                              But, there is not going to be more 
money.  You made that clear because you started your answer by saying: we're 
going to be firm.   
 
DARLING:                               Yes, and I can repeat that.  That is 
giving no secret away.  This government is determined to maintain tight control 
of public spending and at the moment you know within that, of course, many of 
my colleagues, you know David Blunkett is a very good example of this; has been 
able to reallocate money, for example, into further education, which has 
benefitted.  
 
                                       I just think the point is worth making 
that since we've been elected, we have been able through scrutinising the money 
the government already spends to start delivering on those matters which we 
attach great importance to, such as further education.  That money was 
reallocated and partly benefits from the fact that unemployment has been 
falling.  That money has been reallocated, so that it will help further 
education.  We've done the same in health, we've done the same in schools.  We 
are making progress but, as we said, during the course of the Election, which 
is one of the reasons why we got elected with such a huge majority is that it 
would take time to turn around the situation we inherited.  
 
HUMPHRYS:                              So, let's- 
 
DARLING:                               We've only been in power for six months 
but- 
 
HUMPHRYS:                              Alright.  
 
DARLING:                               -we are making substantial progress, 
progress that would not have been made had it not been for the change of 
government.  
 
HUMPHRYS:                              And you restricted your spending to the 
last government spending figures for these next two years.  Now, when those two 
years are up, can you say to your MPs who are worried, to the country as a 
whole: Look, given - of course, that borrowing doesn't run away with itself and 
all the rest of it - there will be more money.  When we look at the next lot of 
spending round next year, when we take a whole global view of the whole thing, 
there is going to be more money.  We're not going to restrict ourselves the way 
we have done for the past couple of years, given that the finances continue to 
improve, the way they have done.  
 
DARLING:                               Well, there's two things I would say to 
you and to all my colleagues.  Firstly, we are creating and building a stable, 
economic platform, which will provide the job opportunities, provide the 
increase in growth that will provide the wealth that we all want to see in the 
country for services and for the country as a whole.  The second thing - so far 
as the spending priorities are concerned - as I said to you the spending review 
will be completed in the middle of next year - it will set out clearly the 
objectives of this government for the rest of this Parliament and beyond and 
that will inform the amount of money that we allocate to finance these 
priorities. 
 
HUMPHRYS:                              Yeah, but I could tell you now, and you 
can tell me now can't you, you are going to need more money. If you want to do 
what you want to do with education - going to do what you want to do with 
education, with the health service, you know perfectly well - unless there is a 
miracle - you're going to need more money.  So, therefore, are you prepared to 
say to people: yeah, we will spend that money - even if it means whatever, 
borrowing a bit more, doing a bit more to this or that.  
 
DARLING:                               No.  What I'm saying to you is that by 
identifying the priorities on the one hand and ensuring that we have a stable 
economy on the other, we will ensure that there is adequate and sufficient 
finances to ensure we can fund the programmes that we attach priority to.  Now, 
I think, that's as plain as can be to anybody.  That process, of course, won't 
be complete until next year.   
 
HUMPHRYS:                              Alright, in the last couple of minutes, 
let me turn to another subject that's in the newspapers this morning.  The 
opposition have called for a statement from the Treasury Minister, Geoffrey 
Robinson, over stories that he has benefitted from funds that are in a fund in 
Jersey, in Guernsey.  Now, is it right that a) there ought to be this statement 
in your view and b) that any Minister in a Labour Government should benefit in 
such a way from what sounds on the basis of it like a sort of tax avoidance 
scheme?   
 
DARLING:                               No, it isn't that.  Geoffrey Robinson  
issued a full statement yesterday, which appears in some of the newspapers but 
not all.  Firstly, he has done what every other Cabinet Minister and other 
Government Minister has done in this Government and the past:that where they 
have shares and so on they put them into a blind trust.  
 
HUMPHRYS:                              No, not necessarily in the Channel 
Islands. 
 
DARLING:                               No, no - that's one part of it.  The 
second part, so far as the-this trust in Guernsey is concerned, this is money 
that was put into a trust by a Belgian lady living in Switzerland and over whom 
the UK tax authorities could have had no jurisdiction.   
 
HUMPHRYS:                              Well, indeed.  It's a very complicated 
business this but the...- 
 
DARLING:                                Well, it so happens.  Well, I was going 
to put you right on one thing.   
 
HUMPHRYS:                              Well, she bought shares that were in his 
company and it becomes terribly complicated.  All I'm trying to get from you is 
the appearance of this thing is that here is a Treasury Minister in a Labour 
Government who, one way or another, is benefitting from tax avoidance because 
of funds that are in the Channel Islands.  Now, is that right?  That's what I'm 
asking. 
 
DARLING:                               Well, let me put you right on that 
point.  The money in this trust was not in the UK.  It was not taken out of the 
UK and put into this trust.  As I say, this lady was Belgian.  She lived in 
Switzerland and she died three or four years ago.  When she died the money was 
put into a trust.  So, it isn't, actually, avoiding UK taxes.  The story in I 
think, The Independent - is just wrong on that point.  So, it's incomplete on 
that point.   
 
HUMPHRYS:                              So, there'll be a statement in the House 
of Commons tomorrow? 
 
DARLING:                               He's made a full statement and I may say 
a much fuller statement than many ministers have made in the past.  But, the 
fact is that Geoffrey Robinson has complied with all the duties that are 
incumbent upon him and those-What he has done has been approved by the 
Parliamentary Secretary to the Treasury, which is what, you know, he and other 
ministers in the same position have done. So, you know, that's the end of it 
really.   
 
HUMPHRYS:                              Alistair Darling, thank you very much, 
indeed.  
 
DARLING:                               Thank you. 
 
                              ...oooOooo..