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Last Updated: Sunday, 4 November 2007, 11:53 GMT
Immigrant issues
On Sunday 04 November Andrew Marr interviewed George Osborne MP, Shadow Chancellor

Please note "The Andrew Marr Show" must be credited if any part of this transcript is used.

George Osborne MP
George Osborne MP

ANDREW MARR: Now the turnaround in the Conservative Party's fortunes coincided with the return to a more traditional emphasis and message, the issues of immigration and Europe and taxation.

Precisely the ones where David Cameron had tried to avoid earlier in his leadership, seem to have given the party a second wind.

Now, on immigration the Conservatives have called for a grown-up conversation, traditionally difficult area for the party, it's certainly been brought into focus by one newspaper report this morning in which a Conservative candidate suggests that Enoch Powell was right.

George Osborne, Shadow Chancellor, thank you for coming in to join us. Now, Mr. Hastilow, if his comments are as reported, and they are after all in an article he's written, so I presume they are. What's his status in the Conservative Party?

GEORGE OSBORNE: Well I don't agree with what he said. He's going to have a meeting later today with our party chairman, my colleague Caroline Spelman. He'll have to explain himself and it will also be explained to him, that candidates of any party, Conservative, Labour, Liberal Democrat, have to exercise great caution in the language they use about immigration. We do need controlled immigration, the Conservative Party has several policies that would make sure that immigration is controlled, but the debate has to be conducted in a reasonable way, with moderate use of language. And by the way, this applies to everyone. This applies to the government itself and the use of figures, and they've got themselves into a mess this week on this. It applies to senior politicians. I think for example phrases like "British jobs for British workers" are particularly nasty and are trying to play to a particular chord. And of course candidates whether it's Mr. Hastilow or anyone else, should be careful in the use of language they have used.

ANDREW MARR: So, he's not going to be a Conservative candidate for much longer, judging by everything you've just said?

GEORGE OSBORNE: Well I'm not going to pre-judge the meeting he has later today with the party chairman.

ANDREW MARR: OK. All right. Staying on the immigration issue nonetheless, David Cameron and yourself have said there's too much immigration in this country. And the figure was going to be, has gone up from something like 47,000, it's up to 700,000-800,000 net, at the moment. Do you have a view on where between those two figures the correct amount of immigration should be? I mean how much less do you want to see?

GEORGE OSBORNE: Well we have a view that immigration should be substantially lower than it is at the moment. But we are not putting a precise figure on it for exactly the reason we've just discussed on the previous interview you had with Peter Hain. We're not going to use arbitrary figures, we think it should be substantially lower, and we've set out the way that that can be achieved. I mean, by the way, this is in the context of demographic change, a growth in the population of the United Kingdom caused by immigration, but also caused by higher birth rates and increased life expectancy. All of which puts pressure on public services, on schools and hospitals and our transport system, and so on. So in the context of that we think immigration should be substantially lower. Now there are certain elements of immigration which we cannot control, for legal reasons/


GEORGE OSBORNE: For example from the EU. However we can ensure that new EU countries that join have transition arrangements and we proposed this for Bulgaria and Romania, and I'm delighted the government have followed our lead on that. But there is also non-EU economic migration and that can be controlled, and we would set an annual limit which would be agreed amongst, for example, the local authorities, talk to business organisations and so on. And that is an element where the government can exercise control and indeed can enforce that control through a border police.

ANDREW MARR: So, despite the moderate language and the care all round that does mean fewer black and Asian people coming into this country, doesn't it?

GEORGE OSBORNE: Well I don't accept it's a race issue at all. Indeed Trevor Phillips, the new head of the Equality Commission said that David Cameron's speech had been the first time he had heard for a long time the politician managed to de-racialise the issue. And of course we are talking about people coming from outside the EU, and that includes plenty of countries where the population, such as the United States, include people who are white. So I don't accept this is a racial issue at all. And indeed I think it's very important when we talk about these things that we don't let it drift into issues of race, that we talk stick on the numbers and the facts and on issues of demographic change.

ANDREW MARR: It's just a question of logic, isn't it though? If there's a flow coming in from the EU which you can do nothing about and there's a flow coming in from outside the EU, overwhelmingly from the new Commonwealth, which you can do something about, then the number of black and Asian people coming to this country is going to be quite a lot less. I mean it's just logic isn't it?

GEORGE OSBORNE: I don't want to pick you up on your use of figures, but when you said it overwhelmingly comes from the new Commonwealth, if you're talking about economic migration from outside the EU, part of it comes from the so-called new Commonwealth like the Asian subcontinent, part of it comes from the old Commonwealth, so called, like Australia, South Africa, New Zealand, United States, you're talking about a very old Commonwealth, and part of it comes from none of those countries. So, in other words, you've got to be extremely careful, it is not the case that the overwhelming majority comes from the new Commonwealth.

ANDREW MARR: When I was talking to Peter Hain just now, and I asked him whether he thought an extra ten million people in this country was acceptable, he wouldn't give me an answer. Do you think that's something that we can look forward to as a tolerable increase and is it historically unprecedented increase and a very large one, but perhaps we could manage it, perhaps we can't. What's your view?

GEORGE OSBORNE: I think it is too much, so I am prepared to answer that question. There are some things of course I can't do anything about, and nor would I want to do anything about - increased birthrate, increased life expectancy, a good thing for all of us as individuals. But in terms of migration and immigration into this country, of course an open economy like Britain will have levels of immigration and levels of emigration and that's part of being part of a global world. But as I've just said, I think the level of immigration is too high and needs to be substantially reduced. So we would have an impact on those population figures.

ANDREW MARR: Let's turn to other aspects of the political scene at the moment. You were credited with what you said on inheritance tax, and so forth, have been one of the factors which pushed Gordon Brown off an election just about now. Do you have more shots in your locker like that? Because after all, whether you like it or not, the inheritance tax issue has been taken up by the government, so has the question of non-domiciled taxpayers. And, you know, 18 months' time, two years' time, this will all be old history.

GEORGE OSBORNE: Well I mean, can I answer that in two parts. First of all I don't put down the change in the Conservative Party's fortunes entirely to my speech at the party conference, or what we said on inheritance tax. Or indeed to the team effort at the conference, because it wasn't just me. William Hague, Liam Fox, David Davis, all made very powerful contributions. And the of course there was David Cameron's fantastic speech at the end. But I don't think we would have had that success if we had not done the work over 18 months in changing the Conservative party. So that when I speak about taxation people know it is rooted in a framework of economic stability and properly funded public services. I mean, going forward, yes, we have plenty of ideas and not just on taxation but other areas of the economy, because we want to make sure that Britain competes in this global economy I've just been talking about. And of course there are issues around making our business tax system competitive. At the moment it's becoming more uncompetitive because of the increase in capital gains tax, and personal taxation too. So we will talk about these things, no doubt perhaps on these chairs, in the coming months.

ANDREW MARR: Maybe those foundations were terribly important, or maybe you're just digging a hole in the wrong field. And the minute you return to tax, immigration and Europe your fortunes took off again.

GEORGE OSBORNE: Well first of all we didn't just talk about those issues, by any means. If you went to our party conference, indeed you were there, you will have heard us talking about the Health Service, the education system and so on.

ANDREW MARR: It's just interesting because when they came back up again so did your opinion poll position.

GEORGE OSBORNE: But if you look at what I said on tax, I did not offer an unfunded tax cut. I didn't say I was going to be cutting public services in order to pay for a cut in inheritance tax. I actually made sure it was matched by a tax increase elsewhere on non-domicile taxpayers. And I also set it in the context of economic stability. And by the way, when I started talking about economic stability two years ago on programmes such as this, people said why are you raising that issue? Well now as we see the world facing a period of great economic instability people can see that the British economic policy needs to be rooted in stability. And everything we say on tax, public spending, or anything else, will be set against that context.

ANDREW MARR: Is the short-term outlook bleak, economically?

GEORGE OSBORNE: Well I think there are many worrying signs out there for the global economy. And not least the news we're getting from various big American investment banks at the moment, including something we might hear today. I think the big question for Britain is are we prepared for what might be rainy days ahead?

ANDREW MARR: So you think the banking crisis is not over?

GEORGE OSBORNE: I don't think the banking crisis is over, as is clear by the announcement from Merill Lynch and news we might hear in the future. There is still a big unresolved question of what happens to Northern Rock, and the money that is now racking up on the Bank of England's balance sheet. I think the question for Britain is "are we well prepared" and at the moment we have the highest budget deficit in Europe. There was a report earlier this week that said we're becoming a less competitive economy. And so the answer is we are not well prepared and I don't think, frankly, the Chancellor of the Exchequer, Alastair Darling, has either the vision or at the moment the authority to provide that leadership through this difficult time. And I think he needs to improve his act.

ANDREW MARR: So what it suggests, what that suggests, is that you believe we need to see spending cut back or taxation increased to get us over what you just described?

GEORGE OSBORNE: Well I think you need to set a path for public expenditure over an economic cycle that shows the proceeds of growth, so we tackle the borrowing problem. I think you need a more competitive tax system.

ANDREW MARR: I'm sorry, if I could just interrupt you, I'm talking about the potential crisis we're facing now, what needs to be done now to deal with that?

GEORGE OSBORNE: Well what needs to be done now is we need a more competitive tax system. Let me take one very specific issue. At the moment, next April, the government is planning an 80% increase in the capital gains tax that businesses pay. I think that is crazy, given the current economic conditions. So it is precisely the kind of thing we should be encouraging - capital gain, risk-taking, entrepreneurship, in difficult economic times, not penalising it with an 80% tax increase.

ANDREW MARR: All right. George Osborne, thank you very much indeed for coming in.


NB: This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy

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