................................................................................
ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 9.5.93
................................................................................
SHEENA McDONALD: Good afternoon. Accusations and
recriminations now whiz across the battlefield where John Major's bloody-nosed
walking wounded still reel in the wake of Thursday's drubbing at the county
elections and Newbury by-election. So how can the Prime Minister's troops
regroup to justify his claim that they are 'the most formidable political
fighting force anywhere in Western Europe'? Mr Major's brightest lieutenant,
Michael Portillo, Chief Secretary to the Treasury, joins us with his
assessment.
We can't just soldier on - said the
Chairman of the Tory 1922 Backbench Committee. But what can the Government do
to restore the voters' trust? Public floggings - or the firing-squad- for a
general or two? Or are they looking for a completely new battleplan?
Michael Portillo has been Chief
Secretary to the Treasury since the Conservatives fourth consecutive term in
office began just over a year ago. Earlier this morning, I spoke to him..
Michael Portillo good morning.
MICHAEL PORTILLO MP: Good morning.
McDONALD: There's been a lot of reaction already,
some of it really quite hysterical is seems to Thursday's results, but let's go
back to the fundamentals. What happened, what went wrong?
PORTILLO: We've been through a very long and
difficult recession, particularly in the south-east of England
with a lot of people very badly affected, and even coming out of that recession
there are difficulties for some people, for example interest rates have come
down, but many of our voters are pensioners, they don't like lower interest
rates. We need to tackle the level of public sector borrowing, that's
extremely important, but to do that we're putting VAT on fuel and power, that
isn't popular. We've got inflation down, that's extremely important, vital
for recovery but the measures that we've had to take during that period have
been difficult and unpopular and for all of those reasons we got a protest vote
on Thursday of a very large scale indeed.
McDONALD: A protest vote of a very large scale
indeed. Isn't that a contradiction. I mean your own colleagues are saying
this is not a blip, this is something more fundamental. You think it's simply
the recession, no, it's the measures you've taken as well.
PORTILLO: Well, it depends what you mean. A
protest vote to me means that these people are likely to vote for the
Conservatives at the General Election, but they take the advantage...
McDONALD: What, all those people?
PORTILLO: I think a very large number of these
people, because what I do not detect at all is that people are saying that they
are inspired by the Labour Party or they're inspired by the Liberal-Democrats.
I don't even see people saying that they think that the government's policies
are wrong, because they believe in low inflation, they notice that we've got
interest rates down, the recovery is apparent to most people, not to everybody,
but to most people, so I don't even see people saying that we should be
pursuing different policies, but clearly they are not impressed by our first
year, and clearly they want to see much better results.
McDONALD: Don't you voting for the Liberal-
Democrats suggests that they are to a degree inspired by what they say?
Don't you think not voting for you means they don't approve of your policies,
I mean that's a very interesting gloss that not voting for you doesn't indicate
that they don't like what you're doing if they like your eventual aspiration.
PORTILLO: I think people are obviously very angry
with the government for the length of the recession and we can go into the
extent to which that was our fault or not, but they are very angry about that,
but I never heard anybody say that they thought that the Liberal-Democrats or
the Labour Party had a solution to the problem which we were missing.
McDONALD: I wonder if it's something much deeper
than that and actually much more dangerous. I wonder if given the vast extent
of the anti-Conservative vote on Thursday and that huge turn-around in Newbury,
are they not saying actually "We don't trust you anymore - we don't trust that
you're going to deliver what you said you would - we don't trust that you're
not going to slip in - (you've mentioned it, the extended VAT charges having
previously reassured the voters that that would not happen), and frankly we're
not even convinced that what you're doing is the right thing to do in the first
place. You've lost the voters' trust.
PORTILLO: Well, I think confidence has taken
several knocks. It took a knock when we left the Exchange Rate Mechanism, it
took a knock after the General Election when people thought there was going to
be a recovery straight away, and obviously they don't like the fact that we
need to take strong measures in order to deal with the public sector borrowing
requirement, but I don't find people developing a whole different philosphy to
the conservative philosophy. I do not see people saying the solution to this
should be that we should be spending more for example, or anybody seriously
saying that it isn't important both to control inflation and public sector
borrowing, and that is why I say that it is a protest, it may be an expression
of a lack of confidence, a protest against the Conservative Government, but let
us just see what evidence there is of restoring confidence. It is clearly
there isn't it, there's so many economic indicators, and it is there in the
fact that even with very low rates of interest the pound is rising. Now what
that means is that investors in this country are expressing confidence in the
efficacy of these financial policies.
McDONALD: You say the indicators are there. The
voters, and this may be a lagging indicator, may they haven't actually caught
up with this recession, with the economic turn-around, maybe they do not
believe that the recession has turned around, maybe they want to see a little
more than the fabled shoots, or indeed branches that have been mentioned and
that we will come on to.
PORTILLO: I think they do want to see more. You
see, it's bound to be patchy isn't it. Some people are bound to feel it more
than others. You can talk to half a dozen businessmen over a couple of days;
some will tell you their orders have gone up fifty per cent, some will tell you
they've noticed no recovery at all. It is bound to be patchy.
McDONALD: What I'm suggesting is that people
actually ...
PORTILLO: But across the economy you can see a
whole range of very encouraging indicators and that really is all that we've
been saying.
McDONALD: But why should people believe that when
for instance, I mean I'll got back to the VAT because in January of last year
the Prime Minister reassured voters that there was no intention of extending
the scope and reach of VAT and now it's happened. Now why should the voters
ever believe anything you say again. I mean I could ask you about a whole
range of things you might be considering in the review, and you can say, "Well,
at the moment we have no plans". We now understand what "we have no plans"
means. What I'm suggesting is that the voters - it's not so much - well it is
the policies, but it's also the whole attitude that they don't believe you.
PORTILLO: For broad economic management you need
to be clear that a government has strong underlying principles, and the
underlying principles of this government are sound money which means
controlling inflation, because otherwise we're not going to competitive, sound
public finances, which means the government not living beyond its means, and
controlling the size of the State. Now those are our principles, those are the
most important things.
McDONALD: What about honesty?
PORTILLO: Well, wait a minute. If a recession
goes on longer than you think it's going to go on, it would be dishonest to say
"Well, we think that we should now set aside our policies for sound money and
sound public finances". You must say "Look, this remains the most important
thing, we hate putting up taxes you know that because we don't believe
fundamentally in putting up taxes but we have now to control the level of
public borrowing."
McDONALD: Well, why not say "We hate putting up
taxes but we might have to do it" Why say "We are the party of low taxation,
vote for us, your taxes will go down", and a year later you put people's taxes
up. Why not vbe honest with people. If the recession is going to be a very
long time coming through why not say that to people?
PORTILLO: Circumstances change and we thought that
the recovery was imminent at the time of the General Election.
McDONALD: Of course you did - but you've been in
politics a long time to say that to people.
PORTILLO: But not only did we think that - I think
every independent commentator thought that recovery was around the corner in
April. It has gone on for a year longer than that. Now it is not honest to
say to people that you throw out of the window - INTERRUPTION - but the
fundamental promise is the one that we're sticking to. The Laboour Party in
the last election was campaigning to tax more to spend more. We were
campaigning to keep spending under control and reduce taxes over a period of
time. The recession having gone on longer than we hoped we have to increase
taxes to control our public borrowing, but that is a - INTERRUPTION - no, it
is a fundamental difference of policy isn't it. We have no intention of
spending more. We think that would be a terrible disastrous thing to do in the
present circumstances. It's our honesty --
McDONALD: It's not just me that's suggesting this.
I mean last week's Gallup Poll in the Daily Telegraph suggested that
fifty-eight per cent of those polled found this government dishonest. Now,
one year into this term that must worry you and surely that is one element of
Thursday's vote.
PORTILLO: If a businessman set out a year ago
saying he was going to expand his business and a year later he finds he's
laying people off, you don't say "This businessman is dishonest, he broke his
promises". You say "Things have turned out differently and this man has had to
react to circumstances". Now governments are in no different a position.
Things did not turn out the way we thought, we did not set out to be dishonest,
indeed we set out to say to people that the most important thing was to control
government spending, to control inflation and to have a government that lived
within its means, those are fundamentals.
McDONALD. The other thing that's coming through
there is another criticism of the government which is that it's not just
complacent, it's arrogant, that you were saying it as you see it, you're once
again you're not listening to the voters. The voters have voted resoundingly
against I would suggest, policy, attitude, mood.
PORTILLO: Which policy do you think they've voted
against.
McDONALD: Well, you tell me.
PORTILLO: Well, you're conducting the interview
and I am asking you this because I don't believe that they are voting against
low inflation or low interest rates, or the control of public borrowing or the
control of public spending.
McDONALD: In your first answer you suggested that
they were voting against the imposition of VAT on fuel and heating charges and
standing charges.
PORTILLO: Yes, and we have to explain to people
precisely why that is necessary and we have to stick to that policy. The
business of government is governing for a parliament ...
McDONALD: So it's something the people don't
understand.
PORTILLO: Well, let us take some responsiblity to
ourselves, we have to explain what we're doing, but the business of government
is not at every moment to do precisely what opinion polls tell you. The
business of government is to set out your priorities, set out your principles
and over the period of a parliament, deliver the results, and then you go to
people and you say, "Look this is what we did, some of it you hated while we
were doing it but these are the results we produced and this is why we think
that we deserve another term in office" That is how a democracy works.
McDONALD: Well, and on Thursday, people obviously
didn't think that most of your colleagues at county level did deserve another
term in office and voted accordingly, and it's not ...
PORTILLO: May I just say there, that is very
unfortunate, because many of those people in county - at country level -
Conservatives were doing a magnificent job and I can well understand...
McDONALD: And feel that you've let them down and
they're actually carrying the can for your policies....
PORTILLO: It's very difficult isn't it, when
you're a councillor and your party is constantly in government in Westminster,
because people take it out on you, and I have every sympathy for that, but it
still remains the duty of the government to deliver its policies over the
period of a parliament and ask people at the end of that term to be judged on
that policy.
McDONALD: Look at the way you're doing it. I mean
even Cecil Parkinson, former chairman and your former boss, says today in the
Sunday Express: The government seem to be claiming the recession was not of
their making, but the recovery was. In other words, you take the credit but
you never take, call it the blame, call it the responsiblity. Now that is
complacency, that is arrogance, as your colleagues and your enemies ....
PORTILLO: I would like to explain that point. On
the recession it is very difficult for the government either to take credit for
its end or for its beginning, when you see that in Germany, in Japan, in
Sweden, industrial production has fallen further than in Britain. Now we're
neither responsible for the recession in those countries, nor are we
responsible for the recession in Britain nor for the recovery in Britain. What
we are responsible for is the level of inflation. Let me finish the point.
Let me finish the point please. We're responsible for the level of inflation.
We let inflation get out of control, that was a bad mistake. We have had to
bring inflation back under control. That has required consistent and unpopular
policies, but we are responsible for that, both for the failure and for the
achievement of low inflation today, and if we had not achieved low inflation
today, there would be no question of recovery, and you'll notice that all the
other countries that have been successful in the past put great emphasis on low
inflation, because without low inflation you cannot compete.
McDONALD: "Je ne regret rien" has become an
unfortunate phrase for the Chancellor. He uttered it during the Newbury
by-election run-up...
PORTILLO: Do you know what the question was that
led to that answer?
McDONALD: I do, but I ask why it was used?
PORTILLO: He was asked - "Do you regret that you
sang in the bath", to which he (a jokey question I think you'll agree), to
which he replied with a jokey answer "Je ne regret rien". And the reaction of
the journalists was a round of applause because it was a witty answer to a
jokey question. Now you cannot hold that against the Chancellor. But this is,
if I may say....
McDONALD: What do you regret, Mr. Portillo?
PORTILLO: Let me just say this - I think the press
have conducted the most vigorous campaign against the Chancellor. They seem
determined to remove the Chancellor and even...
McDONALD: Let's leave the Chancellor aside for the
moment...
PORTILLO: I don't want to leave him aside because
I want to say that I think he's done a magnificent job and to be mis-quoted
like that is an example of the way in which his position has been twisted
around.
McDONALD: Well, I'm sure he'll be delighted to
hear your support and that you have given the context of the question -
nonetheless it was used and it does... people have even understanding of the
context in which it was uttered. People see it as somehow characteristic of
the Chancellor's attitude, indeed the Government's attitude. Now you've
explained that mistakes have been made so presumably you have regrets?
PORTILLO: I certainly have a regret about that
point that I mentioned to you about the rise in inflation which, by the way,
long preceded Mr. Lamont.
McDONALD: Anything else?
PORTILLO: Well, that has been our fundamental
error and that is one that we have put right...
McDONALD: The way we left the ERM?
PORTILLO: Well, I'll come back to that. You see
Norman Lamont when he says I don't regret anything, he KNOWS that if we had not
defeated inflation there'd be no recovery today. We couldn't have interest
rates at six per cent today if our inflation were still eleven per cent. That
would be impossible.
McDONALD: What else do you regret?
PORTILLO: I think that is our main regret - that
inflation got out of control. I think the other thing that we perhaps need to
regret is that during this year - that has been so difficult with recession, so
taken up with the Maastricht Bill - it has not been so easy to present to
people what Conservatives are about.
McDONALD: So you regret the way the Maastricht
Bill's been handled?
PORTILLO: No, no, I don't, but I regret the fact
that in a year in which one becomes so absorbed in these twin questions of
recession and Maastricht you don't have the ability, the time, the
opportunities to present to people that the Conservatives are about wishing to
give more opportunities to people. Wishing to give more emphasis to
individuals and reduce the role of the State.
McDONALD: Right. So the kind of... Let's talk
about that, let's talk about that. The kinder, gentler Tory Party. Now the
Prime Minister said we will now listen and learn. Who are you listening to
now?
PORTILLO: We listen to voters - we always have
done, and we...
McDONALD: So it's not an innovation this idea?
PORTILLO: Listening to the people, no. That is
what people involved in democracy have to do all the time. But, as I've said
to you before, what we have to do is have a programme, we have to have a view
about what is good. We cannot just do things that are popular because that way
lies absolute disaster. I mean, supposing, for example, we said "We're not
going to have VAT on fuel and power because it's unpopular" - then that would
mean that we had no intention of controlling the Government's level of
borrowing. Now that would be disastrous.
McDONALD: Well, the outcome is not..
PORTILLO: And then confidence in the Government
would dissolve and it is essential to get on with that task of controlling
borrowing.
McDONALD: Buy you might look a little further as
to why it's unpopular. It is unpopular because people are going to suffer, and
poor people are going to suffer. I mean, moving on - we've talked about VAT,
so let's look at some of the other things you might listen. I mean, will you
be listening now, in the wake of Thursday, to the parents, the teachers, the
headmasters, the administrators, Lord Skidelski (phon) himself, who thinks that
testing for fourteen year olds, as conceived by the Education Minister, is
mis-conceived - should be abandoned this year?
PORTILLO: What we say is this. A huge effort has
been invested in testing. Some people complain that the tests are wrong. Let
us try them out in practice and when we've tried them out in practice let us
see what is wrong and let's put them right for next year. Now surely that is a
reasonable.. when you've consulted...
McDONALD: You were saying that before Thursday, so
it doesn't sound as if you're going to be listening to those people any more
now - after Thursday - than you were before.
PORTILLO: What lies behind the test for fourteen
year olds was that we consulted five hundred schools...
McDONALD: So you've done the listening there?
PORTILLO: Forty-five thousand pupils took part in
trying to design them. I think there is no lack of consultation for testing.
McDONALD: OK, OK. No more listening.
PORTILLO: No, no, no - please. Do not
misrepresent me. We have listened to people on this subject. I think the
sensible thing..
McDONALD: I simply said no more listening.
PORTILLO: And I did not say no more listening - I
said we should try these tests in practice. Now what is that saying if it
isn't saying that we wish to find out what people think of a thing in practice.
But why tear up all that work that's gone into it - why tear up all that
consultation. The problem with the testing you know is not lack of
consultation - it is, if anything, that so many people have put an input into
what we're doing that the thing has become very complicated and very
bureaucratic.
McDONALD: What about the experts on other sides?
PORTILLO: Well, let's find out what the excess
bureaucracy is...
MCDONALD: What about rail privatisation on all
sides, experts, Select Committee, Chairman of British Rail, reckon that the
privatisation proposals aren't going to work. Will you listen to them more
now?
PORTILLO: Well, we've been through that quite
often before, you know. I remember British Telecom wasn't going to work,
British Gas wasn't going to work, people were worried about different aspects
of it, and what we do is we move through the privatisation process, looking at
the problems that arise, putting them right and reassuring people.
Do you remember on British Telecom they
said that there'd be no more rural telephone boxes? There ARE rural telephone
boxes today - the only difference is that today they work whereas in the past
they didn't use to work. Now that is an example of listening to people, putting
things rights and reassuring them.
McDONALD: Will you listen to the people who think
this Government is NOT well led, and that there should be changes at the top?
PORTILLO: Well, I know...
McDONALD: And many of them are within your own
Party.
PORTILLO: I notice that even Cecil Parkinson, who
you quoted just now, said that he doesn't believe that there should be a
re-shuffle. What. I don't see..
McDONALD: But many of your peers do. There's
been Sir Marcus Fox has said there should be, John Carlyle.. Michael Colvin...
PORTILLO: As a member of the Cabinet perhaps I'm
not terribly well-placed to advise the Prime Minister on whether there should
be a re-shuffle. But I think the fundamental point is what policies are we
pursuing, and I go back to my original statement to you - that we have had a
protest vote, but I see no evidence of an alternative set of policies being
presented that the public are enamoured by. They are very, very annoyed with
us, for a year in which they've suffered, but I see no question that they want
a change of policy. I see no purpose in changing the personnel.
McDONALD: So no change.. Mr. Lamont will stay as
far as you're concerned?
PORTILLO: I think Mr. Lamont has done an
outstandingly good job. He's had three Budgets which have really been very
effective for us. He took care of the Council Tax in the first one, he put
forward an election-winning programme in the second one, and he's determined to
tackle public borrowing in the third one. That is not a bad record and every
time he goes to the House of Commons he receives a tremendous vote of
confidence from the people in the House of Commons.
Now, you may be able to ring some
individuals up and some of them don't like to be named, but when it comes to
votes in the House of Commons Norman Lamont enjoys the confidence of his fellow
Members of Parliament.
McDONALD: He seems to suffer a great credibility
gap in the country though - they're not all his colleagues in the House of
Commons.
PORTILLO: You know, I think the press (as I said
to you) have conducted a really virulent campaign, mis-quoting him and
mis-representing him.
McDONALD: Why shouldn't they?
PORTILLO: Because the press rather like to be able
to remove senior Ministers. They think that is somehow now their prerogative,
and they have been very disappointed that Mr. Lamont has stayed in his job and
he's stayed in his job in order to do a good job.
McDONALD: It's not simply the press who are dis..
PORTILLO: And he's stayed in his job because he
has stuck rigorously to bringing down inflation, and this is the point - for
the future we need confidence that we have a Chancellor who will control
inflation and control public borrowing and public spending, and Norman Lamont
feels those things right through to his very soul.
McDONALD: Right, so a man who for months resisted
the policy which he now claims is the only policy is the right man to be the
custodian of the nation's economy?
PORTILLO: That is a complete misrepresentation.
He has consistently said that he wishes to bring down inflation. We brought it
down very fast during the time that we were in ERM. I don't think we
could have brought it down faster outside ERM. At the end of ERM our interest
rates were too high - we've left ERM and we've got interest rates down further.
We could not have done that if we didn't have low inflation.
McDONALD: It was the Prime Minister who
recommended listening and learning on Friday. Having listened to you for
twenty minutes it seems to me that you're saying - same ship, same crew, same
policies, steady as she goes: no change.
PORTILLO:a Well, I can't recommend changing policy,
can I, because I believe these policies to be the right ones. I can't
recommend changing personnel because I think that Norman Lamont believes in the
things that are necessary for the future management of this economy absolutely,
and is competent to do the job. I have said to you that I think that in all
the day-to-day things we've been involved in - the recession and Maastricht -
we have not been able to present to people what we as Conservatives believe in:
a small State and more power to individuals.
McDONALD: Michael Portillo, we must stop there.
Thank you very much indeed.
PORTILLO: Thank you.
...oooOOOooo...
|