Interview with Michael Portillo




       
       
       
 
 
 
................................................................................
 
                                 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...