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ON THE RECORD
CHRIS SMITH INTERVIEW
RECORDED FROM TRANSMISSION BBC-1 DATE: 30.6.96
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JOHN HUMPHRYS: Well Chris Smith there we are. You've
been thinking the unthinkable and now we know what it is, with a few changes
at the margins, but acceptance of the main things that the Tories have been
doing all these years that you have opposed. That's what thinking the
unthinkable has turned out to be.
CHRIS SMITH: No. Not acceptance of what the Tories
have been doing and what we've proposed this week is wholly distinctive,
especially from what Peter Lilley and his predecessor's Secretary of
State have been all about. What they've been wanting to do is to cut the
Welfare Bill by slicing away, salami slicing tactics, bit by bit at the
benefits which go to different groups within society. I don't want to do
that because I want a Welfare System yes, that saves money, but I want to save
money by getting people back to work, not by demeaning the people who have to
depend on the Welfare State.
HUMPHRYS: But you are not committed and I
emphasise that word committed, you are not committed to changing some of the
most important reforms that they have introduced are you?
SMITH: There are some of the reforms that they
have introduced which I think will need changing. There are others that
perhaps not. There is so much that'as changed. We're not going to be able to
do everything all at once, of course not, and we have to judge whatever we can
do by what the country can afford. Let's take it step by step, but I want to
undo some of that damage.
HUMPHRYS Well, taking things step by step is one
thing. Saying, "I am committed to changing some of the things we most
dislike", you're not prepared to say that.
SMITH: Well, I am. Let's take for example the
position of the very poorest pensioners, because at the moment we have some six
hundred thousand pensioners in this country who get nothing but the basic state
pension. They are entitled even under present circumstances to receive income
support, but for a variety of reasons they don't actually get it. Now, the
present government have done absolutely nothing about trying to ensure that
these six hundred thousand pensioners get what is their rightful due. Many of
them are living something like fourteen pounds a week below the bread line.
Now that, in a civilised society at the end of the twentieth century I don't
think is acceptable, and we've got very specific proposals to try and put that
right.
HUMPHRYS: Right. Well, let's look at pensions in
the round then. Now, one of the things that you did not like, you were
fundamentally opposed to, was when they broke the link between pensions
increases and wage increases and they related it instead, they related pensions
increases instead to inflation, to prices. Now, you were fundamentally
opposed to that, you condemned it, you said it was immoral, it was illegal and
all the rest of it. You have abandoned the promise to restore that link.
SMITH: And what we've said and I think rightly
said, is that we can't in advance of an election commit ourselves to a specific
figure, or even a specific formula, because we need obviously to test anything
in government against what the country can afford.
HUMPHRYS: So you've abandoned the link.
SMITH: We're not going to make absurd promises
which then can't be fulfilled. What however, we have said and this is
actually terribly important - in the pensions document that we published on
Friday we've said that the principle, the over-arching principle that we want
to put in place is that all pensioners, both today's pensioners and tomorrow's
pensioners should be able to share fairly in rising national prosperity.
HUMPHRYS: Very nice warm words indeed, but it
isn't the same as saying there ought to be a link, because of the dignity of
pensioners, there ought to be a clear link which is what you have always
said, between increased..
SMITH: Not just warm words John, not just warm
words, because what we've said is that that principle is one of the very key
things that we want to be judged on in government.
HUMPHRYS: But the link was the key thing.
SMITH: And indeed we're proposing that we
should set up an independent body, a strong independent body with
representatives of pensioners included on it who will monitor what our
performance is in government against that principle. That's the important
principle, not a particular formula or a particular figure, the principle of
ensuring that pensioners share in rising national prosperity. That's the
important thing.
HUMPHRYS: We're talking about a legal framework,
that is to say a clear link between one thing and the other and this sort of
vague, unspecified promise of sharing in the national wealth. They knew
exactly, the pensioners knew exactly what they wanted, and you believed that
was what they should have and now you're saying you're not going to give
it to them.
SMITH: It's not a vague promise. It's a very
clear commitment, a very clear principle, and we've said we will be judged on
it in government and we want pensioners up and down the country to judge us by
it.
HUMPHRYS: You're being judged on it now. Jack
Jones who runs the pensioners organisation says it must be restored and he'll
make damn sure at the next Labour Party conference if he possibly can, that it
will be restored. Pensioners object. You saw them on that film there.
SMITH: I have regular and very friendly
discussions with Jack Jones, and we will continue to do so and in government
we will continue to do so. We won't ignore the pensioners' movement in the
way that the present government have done. We will make sure that we sit down
on a very regular basis and we will expect them to hold us to account on what I
believe is an extremely important principle.
HUMPHRYS: But you know as you sit there, that Jack
Jones is not going to come out of one of those meetings with you and say,
"Well, I've got what I wanted", because what he wants is - he couldn't be
clearer about it - is the restoration of that link that you were committed to.
SMITH: What we can't do in advance of an
election, is put forward a specific figure or a specific formula, because we
don't know what the state of nation's finances are going to be, we haven't seen
the books, we don't know what the country is going to be able to afford when we
come into government. What we're going to do is have a look at that, see how
the economy is growing and make sure that pensioners can share in that growth.
HUMPHRYS: Right. Well, then let's look at....
SMITH: That, I think is a very important
commitment.
HUMPHRYS: Let's look at this question
of sharing in that growth then, as you put it. Here is the consequence if I
can suggest to you, of abandoning that link. The poorest pensioners will
become even poorer relatively than the richest. Now, that isn't me saying
that. That's your own Social Justice Commission, the BORIE (phon)
Commission very worried about that fact. Hence it said, there must be a
compulsory second state pension. You've abandoned that too.
SMITH: No, we haven't. There is of course
compulsion in the present system. Anyone who is employed has to contribute..
HUMPHRYS: Anyone who is employed.
SMITH: Four-point-eight per cent of their
earnings, partly from the employer, partly from the employee, into a second
pension. It can either be SERPS, or it can be a personal pension, or it can be
an occupational pension. What we want to do is to take that element of
compulsion which is there in the system at the moment and make it work better
for people, because personal pensions, the so-called, very mis-named
appropriate personal pension pushed by this government, it's the darling of
Peter Lilley's entire pensions policy, have been a very bad buy on the whole
for the people who've taken them out. We want to do better than that. That's
why we want to create an entirely new framework for second tier pensioners
and use that existing amount of compulsion in the system in order to ensure
that people can get better value for money.
HUMPHRYS: People can get better value for money if
they've got a job, if they can afford to make those contributions. If they
can't, as Frank Field made clear in that film, it's tough on them isn't it?
SMITH: That is why we've also suggested that we
should use the SERPS structure to create what we call a citizenship pension for
those people with particular caring responsiblities during parts of their, what
would otherwise be their working...
HUMPHRYS: We're talking about a small group of
people here.
SMITH: Oh, we're talking about millions of
people
HUMPHRYS: We're not talking about the entirety of
pensioners who cannot afford the kinds of things that you were talking about.
SMITH: You are talking - when you talk about
people who have caring responsibilities, and you're not talking about a tiny
group of people. You are talking about many millions of people in this
country...
HUMPHRYS: But, you're not talking about the
totality.
SMITH: ..and we want to make sure that they
can build up credits in their pension so that they get a second pension, as of
right.
HUMPHRYS: But, there will be people left without
second pensions, won't there?
SMITH: There will be no one who is in
employment, or who has caring responsibilities, under the scheme that we're
proposing who will be without ..
HUMPHRYS: Absolutely.
SMITH: ..a second pension.
HUMPHRYS: But, you didn't answer the question. I
said, there will be people left without a second pension and there will be.
SMITH: Well, if someone has been unemployed
throughout the entirety of their working life, then, they would not have been
able to make contributions from earnings into a second pension. But, that
would happen whatever sort of second pension policy you put together. What we
do want to do of course, is to ensure that no-one is in that position because
that's where the Welfare to Work proposals that we have to avoid people
becoming longterm unemployed, in that fashion, become so important.
HUMPHRYS: But the point Frank Field makes and many
others agree is that unless there is compulsion here those loopholes - and,
there are people who are going to fall through them - and, they will continue
to fall - they are at the moment. They will continue to fall through them
unless
SMITH: But, but- are you suggesting...
HUMPHRYS: ..you close those loopholes. I'm
telling you what Frank Field says.
SMITH: Wait. Are you suggesting that someone
who is unemployed throughout their life should be compelled to pay from their
Unemployment Benefit into a second pension?
HUMPHRYS: The State would pay. The State would
pay. That's the whole point.
SMITH: And, that-that-that is-That is-
HUMPHRYS: Of course not! If they don't have any
money....
SMITH: That's to be expected?
HUMPHRYS: ....they cannot pay. But Socialism...
SMITH: Well, that's...
HUMPHRYS: ...is 'sposed to say: if they can't pay,
the State will pay for them. I thought that's what it's all about.
SMITH: That is why the concept of the
citizenship pension, for those with caring responsiblities..
HUMPHRYS: Carers. For carers.
SMITH: ..is actually so important because that
means that people who by - not by virtue of being deliberately idle, but
because of their circumstances aren't able to earn and therefore contribute
will be able to build up credits in their pension so they can get a second
pension as a right.
HUMPHRYS: People who are not clever are going to
have to rely on the generosity of future Governments, to make sure that they're
going to be alright in their old age. That's what it amounts to, isn't it?
SMITH: Yeah.
HUMPHRYS: That's what you're committing them to?
SMITH: That is why the basic State Pension is
the foundation stone on which everything else should be built and that is why,
also, we want to direct some special help to those people right at the bottom
of the income scale - the poorest pensioners, the six hundred thousand at the
moment who have nothing other than the basic State Pension. We believe that
they deserve better than the treatment they're getting at the moment.
HUMPHRYS: And, that is precisely why they want you
to restore the link.
SMITH: That is why we've put forward proposals
for a Pension entitlement, to make sure that people can get their due, that
don't have to live below the breadline, which is what they are doing at the
moment.
HUMPHRYS: The Institute of Fiscal Studies has
looked at your proposals and has concluded that there is effectively no
difference - very little difference, to quote them directly - between your
proposals and those of the Government's.
SMITH: Well, they're wrong because what the
Government has done, the fundamental building block of Government Pension
policy is to leave it all up to the private sector. Personal pensions - they
keep on telling us - are the answer to everything. Well, they aren't. What
we're putting in place instead is a real partnership between Government and the
private sector, to create much better, much better-regulated second-tier
pensions and to couple that with help for the people right at the bottom and
the Citizenship Pension for those who have caring responsibilities.
HUMPHRYS: Alright. Let's move on to another area:
the Job Seekers' Allowance, which means that whereas the 'dole' used to last
for twelve months it's now going to last for six months. Now, when that was
introduced, you fiercely opposed it. You said you would change it back again.
That's been abandoned as well.
SMITH: No. We fiercely opposed it, when it was
introduced - certainly - and we pointed out what we think are going to be the
problems that will come in training from it.
HUMPHRYS: You said: we will get rid of it.
SMITH: We didn't actually make that..
HUMPHRYS: Well, Ian (phon) McCartney said exactly
that. I have the quote.
SMITH: What we did however was to identify was
what we think will be the problems that come in train from the Job Seekers'
Allowance. Now, remember, it hasn't come in yet for the great majority of
people. It comes in in October. What we're saying in the document on welfare
to work is that we will review what happens as the Job Seekers' Act is
implemented. If, indeed, the major problems - particularly the creation of a
trap for husbands and wives at seven months, which is the real problem that we
believe will come in train with the Job Seekers' Allowance. If that is as
fierce, as we believe it to be, we're going to look at how we can get rid of
that problem.
HUMPHRYS: I'm puzzled. I am genuinely puzzled
here. Ian McCartney said "We will get rid of it". No ifs, ands and buts"we
will get rid of it" - your own spokesman.
SMITH: No. What the team - both the
Employment team and the Social Security team - did as the Job Seekers' Act was
going through was to point out all the difficulties that we believe are likely
to come in train.
HUMPHRYS: He would not have misled the House,
would he? I mean, if he meant we'll get rid of it..
SMITH: We still believe that there are likely
to be major problems that come in train from the Job Seekers. Thus, indeed, in
the document we published on Monday we point them out. But, what we want to do
is to see what happens when it's introduced in October. Let's see what the
consequences are. If they're as perverse as we think they are, then we've got
a commitment there clearly in the document to review the workings of the Job
Seekers' Act and we'll take a very good look at it and tackle those problems as
they arise.
HUMPHRYS: But it's pretty clear isn't it that
you're not going to put that money back in, any more than you are going to
restore the link between Pensions and Wages? And, the basic reason for that
is - we learned this morning from the reports about what's in the road to the
manifesto - which is going to be published this week - is that Tony Blair's
view is that State spending has gone far enough and we can't keep spending to
solve social problems. That's the view isn't it?
SMITH: Well very often you don't need to spend
more in order to solve...
HUMPHRYS: But, sometimes you do.
SMITH: ..to solve social problems and indeed
there are some aspects of spending that maybe are not so necessary and that's
one of the reasons why I've taken a very careful look at the amount of fraud in
the benefit system at the moment. I believe there are substantial savings to
be made from that. Some things the Government have not even been prepared to
look at such as Landlord Fraud in the Housing Benefit system. Let's take a
very serious look at that because I think we can save some money there.
HUMPHRYS: Sure and you don't, as you say you don't
always have to spend money to solve social problems but it has been something
in the past that your Party has been prepared to do. It has looked at a
particular social problem and almost, invariably, say we'll sort that out.We'll
raise taxes if necessary to help the old aged pensioners, to help the out of
work, whatever it may be. Now that is something which no longer applies to the
new Labour Party, isn't it?
SMITH: Well, I have to remind you John that
people are paying much more in tax at the moment...
HUMPHRYS: That wasn't the question and you're well
aware of it.
SMITH: ...back in 1992 and that's why we don't
think that the ordinary people of Britain ought to be burdened with extra
taxation under a Labour Government. What we want to do is to see if we can use
existing resources much better and we believe we can. And, we also want to
see, as we save money, as we save money from tackling fraud in the benefit
system, as we save money from getting people back to work altogether. So the
Benefit bill comes down as more people get back into Employment. Let's see how
we can use that money to undo some of the damage the Tories have done.
HUMPHRYS: You may be...
SMITH: That, I think, is a very sensible
approach.
HUMPHRYS: And you may well make some progress but
you seem to be agreeing with me when you say that if it doesn't, if those
things don't work you ain't going to spend that money. You're not going to say
to people there is this problem with our old aged pensioners, whoever it
happens to be, but we are not going to tax you a bit more to help them out.
SMITH: We're not....
HUMPHRYS: You're quite clear about that, aren't
you?
SMITH: We're not going to spend money we don't
have. We're not going to increase the taxation burden on the ordinary people
of Britain. That's very clear. But what I do want to do is to make sure that
as we help people to get off benefit back into work - and we have a whole raft
of proposals and the policies that we announced on Monday to help to do that -
the benefit bill will come down. All the international evidence shows that.
HUMPHRYS: Right.
SMITH: Where this sort of approach has been
tried it does. And, then we can look at how we can best deploy the resources
that that frees up.
HUMPHRYS: Let me invite you to put yourself in the
position of somebody who's been in the Labour Party for many, many years and
who thought that being in the Labour Party meant he was joining an outfit that
said if there is a problem, a real deep seated social problem, we are prepared
to court even a bit of unpopularity may be, but we are prepared to spend the
money to sort out that problem. Now he finds that the leadership of the Labour
Party says: No, that isn't the policy any longer. And, he wonders whether it's
the same Party that he's joined. Indeed some of your own MPs. We've got Paul
Flynn, one of your own MPs in the newspaper this morning saying it isn't the
party I joined. Tony Blair has hijacked this party and he's now considering
whether he's going to stay a member of it or not. Put yourself in the position
of those people - how do you feel?
SMITH: Well, Paul Flynn is a very good friend
of mine and I'm absolutely confident will be fighting the next Election as a
Labour candidate.
HUMPHRYS: He's not absolutely confident.
SMITH: And, sitting in the Parliamentary Labour
Party after the Election. What I would say to people who question that is very
simple: we haven't abandoned philosophy, we haven't abandoned our objective
which is to tackle insecurity, to tackle poverty, to tackle want. We want to
make sure that we get people back to work. We don't believe in clobbering the
rest of Britain in order to do it. We do believe that we can make progress and
I think the policies that we've put forward this week will help us to do so.
HUMPHRYS: Chris Smith, thank you very much,
indeed.
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