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ON THE RECORD
STEPHEN DORRELL INTERVIEW
RECORDED FROM TRANSMISSION: BBC-1 DATE: 09.10.94
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JOHN HUMPHRYS: Good afternoon. The Tories are packing
their kit bags for Bournemouth ... and there's no shortage of troubles to pack
in them. I'll be talking to the man John Major thinks might succeed him one day
about the BIGGEST problem ... how to make the Tories look different from the
new Labour Party. That's On The Record after the news read by Moira Stuart.
NEWS
HUMPHRYS: Welcome back. Right up until mid-day on
Thursday the Tories were sunk into the deepest gloom. There they were,
preparing for their own conference this week, and every newspaper in the land
trumpeting the Blair triumph. And then the vote was taken in Blackpool on
Clause Four, the clouds parted and they spied a ray of sunshine. At last, a
real difference between Labour and Conservatives that they could exploit to the
full. But was it that significant? Is there enough distance between the
policies of the two parties to persuade defecting Conservative voters to return
to the fold? Some Conservative MPs say "NO".
UNNAMED MAN: We have got to establish clear blue
water as we put it between our policy positions and those of the Labour Party.
HUMPHRYS: I'll be asking Stephen Dorrell, the
Cabinet minister and, allegedly, the apple of John Major's eye, how people like
THAT are to be persuaded.
And what about the Tory Party itself?
We have the results of some new research which shows that it is not a happy
band of brothers and sisters. Things have got to change, they say.
UNNAMED WOMAN: We should be the ones that have a say in
who runs our Party, they've got to remember it is our Party.
HUMPHRYS: And John Sergeant will be with us
anticipating the big announcement at the Party Conference, will Michael
Heseltine hit the right note perhaps with an exciting new announcement.
But first the challenge for John Major
in winning back his lost supporters. He believes his trump card is the way the
economy is performing but it may not be as easy as that, as Kim Catcheside
reports.
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JOHN HUMPHRYS: Now, Stephen Dorrell, George Gardiner
has a point hasn't he, you've got to put clear blue water between yourselves
and the Labour Party on those critical issues.
STEPHEN DORRELL MP: I'm absolutely certain that the first
thing you have to do in politics is to discipline yourself, not to strike
attitudes and decide policies by the labels people attach to them. What we
have to do is to look at the real issues, the levels of spending and the taxes
necessary to pay for them. The proposals, the position for example of the
Labour Party on the Social Chapter, the obligations which would arise from that
if Labour were in office which would make employment prospects more difficult
in Britain. We don't have to strike attitudes, we have to look at substantive
issues and decide them on their merits, one by one.
HUMPHRYS: You do, though, have to meet the
concerns of your supporters and they are concerned that there is not enough
difference between you and them. Particulaly, let's deal with it, tax and
spend.
DORRELL: Well you certainly have to go through
the issues as I say, one by one, listening to what your supporters and indeed
the country more generally want to see the Government do. Now on tax and
spend, the position it seems to me is very clear. We are committed as a Party,
from all individuals within the Party, committed to restraining government
expenditure in order to hold down the tax bill. It's no good talking about tax
without first looking at spending. The two are the same issue, they're the
opposite side of the same coin. Everybody understands that and the way you
deliver, as we are committed to do, a continued reduction of the tax burden, is
by first restraining expenditure. Anybody who believes that Labour would be
better at holding down government expenditure that the present government, I
don't think is thinking straight.
HUMPHRYS: But you haven't been very good at
holding down spending. Spending is higher now than when you came into power.
DORRELL: Spending as a share of national income
is actually significantly lower than when we came to power and what we've
done...
HUMPHRYS: Forty-four, forty-five per cent
DORRELL: It was forty nine per cent at the bottom
of the recession of the 1970s, the average through Labour's years in office was
over forty seven ...
HUMPHRYS: We're not talking about that, we're
talking about what it was when you came in and what it is now.
DORRELL: We came in, I remind you, at the top of
what passed for a boom in the Labour years. That does have an effect,
everybody knows it has an effect on the share of income taken by the state.
HUMPHRYS: But Labour isn't committed to spending.
DORRELL: Well, hang on a second. What we're
asked to believe, if we're to believe that Labour will hold down taxes more
effectively than the present government is that they'd be more effective at
restraining the huge pressures for growth in health service expenditure,
education expenditure, social security expenditure. It's no good at talking
about spending in the abstract. There are four major programmes which account
for the lion's share of government expenditure. If you're not prepared to face
difficult tough decisions, both on the use of resources, on the total level of
resources and on the way they're managed within health, education, social
security and defence, you will not deliver control of the tax burden.
HUMPHRYS: And the reality is that the Labour
leadership has been abosolutely clear we will make no spending commitments
whatsoever until we look at the books and see what we can afford. Exactly the
same position as yours in short?
DORRELL: Yes, indeed that is if they deliver it,
exactly the same as ours. But what you then have to do is to ask whether in
reality, people believe that Labour would apply that discipline one by one to
the spending programmes.
HUMPHRYS: And the answer to that is 'yes'
according to the opinion polls, they believe Labour's better at handling, is
going to be better at handling the economy than you have been. You've lost
public support on that, this is the whole point.
DORRELL: But hang on a second. We've got two
years to test this.
HUMPHRYS: You've had fifteen years to test it.
DORRELL: No, no, no. For the future let's take
Labour at face value. Let's assume they really have changed their view on tax
and spend. For the next two years we shall be watching them. If they, as they
have done throughout the last fifteen years, argue for more resources, argue
against spending reductions, then their change of stance is shown to be a sham.
The only way you can deliver control of the tax burden is by addressing,
tackling difficult spending decisions. We know they're difficult, Labour have
always opposed that in the past. If there's now a change, if they now support
us when we're restraining those spending programmes, then we'll believe it but
if they don't, I won't.
HUMPHRYS: But you know that they do already. I
have in front of me a copy of the letter, you will recognise it, you wrote it
to Gordon Brown not very long ago, April of this year and you pointed out to
him that the various pledges that people in his Party have asked him for,
amount to no more than aspirations, long term targets; phrases such as 'as
resources allow' are used, your own words those, not mine. You do accept that
that is what they're talking about. You pointed it out in your own letter.
DORRELL: With respect you're talking about a
different thing. What I'm talking about is the specific decisions the
government will announce as a result of this year's public expenditure survey
on Budget day this year, the same thing again next year. Let's see whether
Labour supports every one of those disciplines because if Labour doesn't
support them, Labour is showing why it won't deliver a control of the tax
burden.
HUMPHRYS: But the point I'm making is that between
you - in terms of your aspirations - there is no difference and as far as your
supporters and indeed the rest of the country believes, according to the
opinion polls - we've only got that to go on because Labour hasn't been in
power after all for so long - they believe that Labour is going to be better at
this than you are. Now there's only one way you can persuade them otherwise
and that's by your actions.
DORRELL: Indeed and by contrasting our actions
with Labour's actions. The electorate doesn't have to just to look at what
people say they'd like to do, we're all in favour of apple pie and motherhood.
HUMPHRYS: Of course
DORRELL: They have to make a judgement about
which Party is most likely to deliver it and there's two years at least left
till the next election where the elecorate will be able to examine what we say
and do about public expenditure and what Labour say and do about the proposals
we table, and let's look at the contrast on actions, not on words.
HUMPHRYS: And what you say and do, specifically
and do on taxation. You've got to cut taxes and you've got to do it soon
according to all the evidence put in front of us including that focus we've
just been looking at.
DORRELL: But you're just raising tax assuming
that it's a different issue from ...
HUMPHRYS: No, what I'm doing is I'm telling you
what your own supporters say. You saw that focus group just as I did a moment
ago and they are absolutely clear, and you heard George Gardiner, absolutely
clear, you have to raise...cut taxes and you've got to do it now.
DORRELL: Yes and the way we do it is by following
the route we've just talked about. There's nothing - tax and spending aren't
different issues, the discussion we've just had about addressing difficult
issues on expenditure, that is how you deliver tax cuts and if Labour support
all our spending disciplines over the rest of this parliament and go into the
next election without even a hint of extra resources for education or health,
then I'll believe them. I don't believe that will happen and I don't believe
most of the electorate think that will happen.
HUMPHRYS: So what you're saying to me quite
clearly then is unless there are substantial cuts in government spending, you
will not be able to deliver on those tax cuts.
DORRELL: What I'm saying is that the means, that
the way you deliver controlling the tax burden, bringing down the tax burden is
by controlling government expenditure. That can be done, there are two means
by which it can deliver tax reductions. Either you cut the absolute level of
expenditure or you control, you stop the growth of public expenditure
HUMPHRYS: Or you do both, yes.
DORRELL: And allow the economy to grow so that
the public sector takes a smaller share of national income.
HUMPHRYS: Or you do both.
DORRELL: Or you do both.
HUMPHRYS: And at the moment you have, well it is
possible to do both in the perfectly managed economy. At the moment you have
the problem of enormous borrowing. Now you don't believe, do you, that you
ought to cut taxes when borrowing is high?
DORRELL: I'm quite certain that the right stance
for the government is to pursue the course set out in last year's budget
statement, namely to control spending, to raise the extra revenue to pay for
that spending without needing to borrow.
HUMPHRYS: But you've also said it is better to tax
than to borrow.
DORRELL: Precisely. That's - I've just said the
same thing in different words.
HUMPHRYS: Right, exactly. So therefore unless you
get borrowing down substantially - that's my word, not yours, but I want you to
agree with it, or I'm asking you to agree with it - there aren't going to be
any tax cuts.
DORRELL: And the prospect for tax cuts is created
within our spending plans by reducing the spending number in order to make room
for reduced tax revenues.
HUMPHRYS: Right, so was I right then, unless you
get borrowing down substantially there can be no tax cuts?
DORRELL: Well I don't actually see the
connection. The way you deliver tax cuts is by cutting spending.
HUMPHRYS: Yes
DORRELL: We've said what we think we can borrow,
that's given.
HUMPHRYS: And cutting spending will have an effect
on borrowing, clearly.
DORRELL: Yes.
HUMPHRYS: I mean if you're spending less - and you
don't have to be an economist to work this one out ...
DORRELL: Precisely. If you spend less and you can
afford to borrow the amount that was set out in the Government's plans then you
can cut tax. So the relationship is nothing to do with borrowing, borrowing is
given. The relationship is between spending and taxation. You cut tax by
cutting spending.
HUMPHRYS: Well I'm only pursuing this particular
relationship because you have raised it yourself on a number of occasions. It
is better to tax than to borrow and it's a pretty straightforward question
isn't it. Unless you get borrowing down substantially you will not be able -
you should not attempt to deliver on those tax cut promises.
DORRELL: Yes I agree with that but we have set in
place the plans that will deliver the borrowing reductions that we think are
necessary.
HUMPHRYS: Well that's fine. So what
then...good...so we've agreed on that. If borrowing stays at - let us say -
twenty eight billion pounds by the end of next year, on that basis you would
not be able to cut taxes, would you?
DORRELL: No. That's exactly the point I am
making. We've set out what we think is a responsible level of borrowing and
unless circumstances change we have to assume that the responsible level of
borrowing will not change.
HUMPHRYS: And the Treasury thinks it will be
twenty eight billion pounds at the end of next year.
DORRELL: Well the Treasury will publish their
forecasts on budget day.
HUMPHRYS: But that is the current figure, that is
the figure we have to go on. And the following year, twenty four ... twenty
one billion.
DORRELL: If that's the figure in the Red Book
then that's the figure.
HUMPHRYS: Exactly. So on the basis of those
figures you are not going to be able...you shouldn't...it would be imprudent to
cut taxes.
DORRELL: Assuming everything else is given. What
actually happens of course in the real world is that each year Treasury
Ministers sit down and make a new assessment of what they think is responsible
in the changed circumstances.
HUMPHRYS: ...based on how much money is coming in
and how much money is going out.
DORRELL: And the total level of activity in the
economy and in the international context and so forth.
HUMPHRYS: Absolutely so. Unless the recovery
continues at a pace and unless you cut spending, there aren't going to be any
tax cuts, are there?
DORRELL: No. That's quite right. Unless you
reduce spending you can't deliver tax. The reason I hesitate when you bring
borrowing into the issue is that I think that borrowing is something you have
to fix as a 'given' according to the circumstances you are in.
HUMPHRYS: Yes, but you can't separate the two, can
you?
DORRELL: Yes, you can actually.
HUMPHRYS: If you spend more than you have got you
have to borrow to fill the gap.
DORRELL: What you must do is decide first -
before you engage in this argument - what you can afford to borrow. And then
you make your judgements about how much you have to tax based on how much you
decide to spend.
HUMPHRYS: Fine, so how much can you afford to
borrow and cut taxes, then?
DORRELL: That's a decision for the Chancellor and
he will announce his conclusions on Budget Day.
HUMPHRYS: You've been financial secretary to the
Treasury, you know about these things, what's your view?
DORRELL: I've been financial secretary to the
Treasury and one of the things I learned as financial secretary was that
Chancellors like to make their own decisions about government borrowing.
HUMPHRYS: All right, but you know the sorts of
levels that we have just talked about and that the Treasury is projecting. Do
you reckon that borrowing at that level would rule out tax cuts?
DORRELL: With great respect, you are not going to
draw me into making the Chancellor's budget judgement for him.
HUMPHRYS: No I rather thought I wouldn't do that
but at the very least you have made it quite clear that unless borrowing comes
down substantially there can be ... there should be no tax cuts.
DORRELL: No, that's what you have tried to put
into my mouth. What I have said is that the Chancellor will make his own
judgement about borrowing and then around that he will have to ensure that he
taxes sufficient to meet his spending commitments. If he wants to reduce tax
he will first have to reduce expenditure.
HUMPHRYS: And there should be real, deep cuts in
expenditure should there in that case, to go along the lines that George
Gardiner is running up there?
DORRELL: That goes back to the two options for
reducing the tax burden that are open to any government. One is to cut in
absolute terms government expenditure, which gives you a short-term cut in
taxation, the other is to hold government expenditure and allow it to take a
smaller share of national incomes so the tax burden falls in the longer term.
HUMPHRYS: So tax and spend questions cannot be
divorced from the state of economy?
DORRELL: Of course that is true.
HUMPHRYS: And that is precisely what Tony Blair
said in his speech last week. Those very words.
DORRELL: That is 'real apple pie and motherhood'
it's hardly a blinding insight to say that tax and spend can't be divorced from
...
HUMPHRYS: No, but what I am suggesting to you is
that there isn't this great gulf of clear blue water between you that George
Gardiner wants to see.
DORRELL: Well look, the laws of arithmetic apply
to both parties. Actually what's happened at Labour's conference this week, I
think, is rather encouraging from the government's point of view, because what
they've done - far from taking the initiative in the argument about politics -
is slowly to bring themselves up to date onto ground that the government have
been occupying for fifteen years. The story of Labour politics over the last
decade has been the story of eating words. Ten years ago...this is an
important point...ten years ago they were in favour of withdrawing from the
European Community, they were in favour of unilateral disarmament, they were
against council house sales, they were against the market economy. They were
in favour of nationalisation. They have thrown all that overboard - quite
right too - they've put themselves on the government's ground. But! But! all
they've done is to validate what we have done so far. They still haven't
addressed themselves to what happens next.
Let me give you two examples: I want to
pick up the point of unemployment. They say they are interested in
unemployment. What I think we need to find out from Labour is why they want to
import into Britain the Labour market practices they have in France, they have
in Spain, they have in Italy, which in all three of those countries has
delivered higher unemployment than we have here and unemployment that is still
rising at a time that it is falling here. If you are seriously interested in
unemployment, it seems to me you should be doing it the way we do it, not the
way they do it. I expect Labour in five years' time will agree with that too
but they haven't caught up with that element of our programme yet.
HUMPHRYS: Let's talk about law and order.
Traditional Tory supporters no longer see you as the Party of law and order.
DORRELL: Well it's clear, isn't it, that over the
last fifteen years in this country and in every other country in the world we
have seen a continuing problem with social discipline - law and order. Of
course crime didn't begin in 1979, it's a continuing and worrying trend.
HUMPHRYS: No, but it's something that you were
sworn to deal with and people said: "Yes, the Tories are the Party of law and
order". They no longer say that.
DORRELL: Well, what we have done is first of all
to introduce dramatic increases of resources for the police, we have sought to
reform the police to make them an even more effective body; we have sought to
increase the powers of the courts, we have improved the arrangements in prisons
- the penal system that courts send people to. All of those things are within
the power of government to do - we have done them - done many of them against
opposition from Mr Blair and his friends.
HUMPHRYS: Oh, he didn't vote against the Criminal
Justice Bill, you know that.
DORRELL: Mr Blair did vote against the right ...
ending the right to silence, which is an interesting illustration of the point.
All of us, in common sense, think that if you are talking to somebody and he
refuses to answer, aren't you entitled to draw some implication from that?
Well, courts have never been able to do that in the past. I think they should
be able to when they are dealing with somebody charged with a serious offence.
HUMPHRYS: You tell me the things that you are
going to do, the things that you have done. The fact is it hasn't worked and
you have lost the support of your own people. On this critically important
issue they trust Labour more than they trust you. Not only your supporters -
the country as a whole.
DORRELL: Well, what the evidence shows clearly is
that people - including the government - are worried about the trend of
lawlessness and social discipline. What the government has been doing is
seeking to do something about very much of it - over opposition from our
political opponents.
HUMPHRYS: But eighty eight per cent of your
supporters - according to the latest opinion poll, the Daily Express this
morning and indeed the Daily Mail - say you have been ineffective in that.
DORRELL: Well, in the sense that the crime
figures until quite recently were recording increases, we haven't delivered the
same advances we have delivered on the economy, for example. Actually, as it
happens, the crime figures are now starting to turn better.
HUMPHRYS: Well it depends on how you read it. The
British Crime Survey says that isn't the case, it is misleading because people
aren't reporting crime. But anyway the important point is that your people
don't believe that you have delivered what you promised and you have now, if
anything, moved on to the Labour agenda because there is a clear link -
suggested in the latest Home Office proposals - between unemployment and
crime. Another important Labour point.
DORRELL: No, actually, a rather important
difference, as it happens, between the Conservative Party and our opponents. I
think when Mr Blair talks about 'causes' (plural) of crime, as though there is
a whole ... crime is a disease, there's all kinds of causes (plural) in
society, that he misunderstands crime altogether. Crime is a decision. It's a
decision by one person to break the law and violate the rights of another and
no one takes...I take second place to no one in my commitment to seeking to
remove social deprivation. That's important. But what I do not accept for one
moment is the proposition that social disadvantage is an excuse for crime.
HUMPHRYS: Tony Blair's never suggest that it is an
excuse. He's talked about it as a cause.
DORRELL: What does he mean them? When he next
comes into your studio, ask him what the other 'causes' of crime are.
HUMPHRYS: I will, but I'm asking you at the moment
- we have only got a few seconds left. You could put clear blue water between
you on these issues if you adopted more of the Right-wing agenda on this
particular one. For instance, eighty six per cent want tough manual labour for
prisoners. Ninety two per cent want a dramatic increase in the number of
policemen on the beat. Seventy five per cent say no prosecution for
vigilantes. Now we've not time to comment on each of those but what I am
suggesting to you is: here is an opportunity to put clear blue water between
yourself and them.
DORRELL: Well, look at our record in terms of the
measures we have introduced on crime and look at their record on the ones they
have opposed. There's already plenty of clear blue water there.
HUMPHRYS: Stephen Dorrell, thank you very much.
DORRELL: Thank you.
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