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Last Updated: Sunday, 28 November, 2004, 14:17 GMT
Interviews with Ruth Kelly and Lord Rennard
Please note BBC Politics Show must be credited if any part of this transcript is used.

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.

On Politics Show on Sunday, 28 November, 2004, Jeremy Vine interviewed Ruth Kelly and Lord Rennard.

Ruth Kelly, MP
Ruth Kelly MP, Minister for the Cabinet Office

Interview with Ruth Kelly, MP.

Jeremy Vine: And I'm joined now by Ruth Kelly, the Minister for the Cabinet Office. Welcome, thanks for coming in.

Ruth Kelly: Thank you.

Jeremy Vine: It's not that you haven't tried to make us more socially mobile, it just seems not to have worked.

Ruth Kelly: Well actually, if you look at one of the most incredibly radical things we did in our first term, I think it was to give the Bank of England independence, and by doing that, we've created the economic stability which has now meant that we have the lowest mortgage rates for forty years, but even more importantly, two million more people in work.

So if you're talking about social mobility, about combating poverty and about increasing opportunity, the fact that two million people are ... more, are in work, that was probably the single most important thing we could do.

Jeremy Vine: But Alan Milburn, your boss, said only this year, social mobility, the ability of children to advance up the ladder relative to their parents is no where near as advanced as it ought to be, given our strengths as a country.

Ruth Kelly: I think that's absolutely right and if you look right back to the post war period for instance, social mobility really did increase as there was full employment, but also the rapid expansion of education and higher education. Now the Labour Party and the Labour government, has got to work from what its done on economic stability and creating jobs.

Work on what its done from investing in public services, and housing and transport and child care and education and health, and make that, engrain that and entrench that in the population.

Jeremy Vine: You've had seven years.

Ruth Kelly: So that people not only have jobs and are brought out of poverty, but actually their aspiration can be that they will do better in life than their parents have done, and that they will be fulfilled fully to their potential.

Jeremy Vine: Right, and the problem is you have had seven years, so at some point clearly you need to accept you can't do all this. But it's not inequality so much is the problem isn't it, it's the fact that there is no mobility inside our unequal society, that those that start poor stay poor.

Ruth Kelly: Well, I think that's absolutely right.

I mean we need to combat poverty. We can take people out of poverty, and in fact we've reduced child poverty for instance by over half a million, and we're on target to reducing it by half and then abolishing child poverty.

We've taken pensioners out of poverty. There are one million fewer pensioners in poverty now than there were in 1997. But we have to go much further than that.

We've got to make it possible for any child born, where ever that might be in the country, in the poorest neighbourhood or in the wealthiest neighbourhood, we've got to make it possible for them to realise their ambitions.

Jeremy Vine: Which means them overtaking other rich people in society and moving up through society.

Ruth Kelly: Of course it does.

Jeremy Vine: And it's just not happening.

Ruth Kelly: No, genuine equality of opportunity would mean that they do overtake their parents or others in their peer group who are wealthier, now that's what we've got to open up now; building on full employment and building on the sustained investment in public services that we've seen.

Jeremy Vine: Not only is it not happening, it seems to be going backwards. Steven Byers, your colleague, former Cabinet Minister said, to a greater extent than ever before people born in to poverty are condemned to it for the rest of their lives.

Ruth Kelly: Well I think we have to be very realistic about what is possible and what the challenges are and what we've done. Now I've said that what we've done by opening up full employment is probably the single most important thing we could have done as a government.

By investing in public services, we begin to make it possible for people to ... for every child to go to a good school, rather than the lucky few to go to a good school. For every child and family to have access to good health services, for example.

But now we've got to make it possible for people, once they've been to school, to get the skills they need, to get the qualifications they need and to get the support they need in other aspects as well, right across life. Really to achieve their full potential. And we have started that journey, but we are no where near seeing it through to its full conclusion.

Jeremy Vine: Let me ask you about something in particular that came out from James Purnell who works closely with you, and he was talking about those run down houses behind him and he said that people could be given some how an asset in a house they currently rent, and what happens is they can actually take it out he said, and start a business with it. Is this a manifesto idea.

Ruth Kelly: Well I think he's right to point to the value of assets. If people have a sum of money set aside for a rainy day for instance, or for their old age, it makes them much more likely to be able to take a risk, to take a chance to succeed or to fail and start again.

Jeremy Vine: Does it. Does it make them mobile.

Ruth Kelly: I think it does. I actually think it really does widen people's horizons and they're willing to take the sorts of chances and risks, that actually people from wealthier backgrounds take for granted.

And we want to see that opened up right across the board to the poorest children from the poorest families, which is why for example the new Child Trust Fund, which is being introduced next year, will give all young people an asset from birth, a sum of money, from the government, which can be added to by their friends, by their family, by themselves actually, young people can add to it, which they will then get at the age of eighteen to spend as they see fit, for which I hope will change their behaviour and widen their aspirations as they grow up.

Jeremy Vine: Let me ask you that. It's two hundred and fifty pounds per baby born after 2002, Steven Byers again says, why not make it two thousand.

Ruth Kelly: Well, I think we have to build from the start. It's two hundred and fifty pounds for every child who's born. It's actually five hundred for the poorest 40% of children. There will be another government endowment then when that child reaches seven, which we'll build on top of that.

And parents and family will be able to put in up to one thousand two hundred pounds, with no tax whatsoever, and see that grow and mature in the child's trust fund. So that there will be a, potentially a very significant pot of money available to the child at the age of eighteen.

Jeremy Vine: But do you not need to work out which sector of society you want to start moving upwards, the poorest. And to target more money at them and not to give two hundred and fifty quid to everybody.

Ruth Kelly: Well what we have is a policy which is not only progressive, it targets more at those who need it most. But it's also universal so that every child has a stake in society.

Jeremy Vine: How does it make them in to an entrepreneur, to give them money.

Ruth Kelly: Well how can you become an entrepreneur if you think that you're never going to have any assets in order to buy that van that you need to set up a local business.

Jeremy Vine: How does that ...


Jeremy Vine: How does it make them more employable.

Ruth Kelly: How can you even buy a ladder and a bucket to become a window cleaner, if you don't have a small sum of money to get you going. But certainly, how can you see that business grow if you don't have the backing of an asset. Now most children as they grow up actually do have parental backing to some degree, but we want to see that spread right throughout society so that every child has the backing of an asset.

So money and financial assets is one part of this agenda, housing and the sort of assets that you get through council housing or through owning your own house, or through renting from a Housing Association, they're the sorts of assets that we want to see expanded and more people have access to housing assets as well.

Jeremy Vine: But the entrepreneur we saw in that film who had David Ames's hand on his shoulder was just saying the government needs to get off my back, stop all this stuff, stop taxing me, stop the sixty six tax rises as he saw it, and clear out.

Ruth Kelly: Well, I've a lot of sympathy with him. But if you look at the facts ...

Jeremy Vine: Do you.

Ruth Kelly: We've reduced, we've reduced taxes for entrepreneurs precisely for that reason. Our Capital Gains Tax is one of the lowest in the world now. Corporate taxes have also fallen. And we've cut red tape for small businesses in a way that's never been seen before.

Jeremy Vine: They don't think so.

Ruth Kelly: Well, we've exempted far more small businesses for example from the audit threshold, which has been increased significantly. And introduced a flat rate payment instead of VAT payments for small businesses. These are very simple, very radical simplifications. But yes, we want to see an entrepreneurial society, we want to see enterprise in every community.

Not only prosperous ones but also the disadvantaged ones, and that's the sort of society where I think there would be real social mobility and where people really would be able to realise their own aspirations, and actually, where we also would have a really strong and healthy, vibrant economy as well.

Jeremy Vine: Last question is on a very different subject which is to do with the situation that the Home Secretary, David Blunkett finds himself in. Accused of fast tracking a visa for his lover's nanny. Did that happen.

Ruth Kelly: Well, I think you'll find that the Home Office has answered every single one of the allegations that has been put forward today. The only thing I have to say is that the Prime Minister has complete and absolute confidence in the Home Secretary.

And anyone who watched the Home Secretary last week, when the Queen's speech was announced and afterwards, taking through his Bills and outlining his plans; he's a very determined man with a huge agenda to put forward, which I think will make a material difference to the well being of people in our country.

Lord Rennard
Lord Rennard, Lib Dem chief strategist

Interview with Lord Rennard

Jeremy Vine: Well Lord Rennard, the Liberal Democrat's chief strategist joins me now. You've only got five MPs North of Chesterfield, in England, and you are now preparing to take over from Labour in the North.

Lord Rennard: Well have suddenly become the challenge to Labour, I think throughout the northern cities. If you look at the council election results, you look to places like Liverpool and Newcastle, where we now run those councils with large majorities and you look to the complete disappearance of the Conservative Party, in those sorts of seats.

Jeremy Vine: But Councils don't make MPs do they. Islington is an example of that, Norwich, and Liverpool we were talking about there, you've been in the Council since 1998, you're not near taking a seat.

Lord Rennard: Well Council success I think is a pointer towards eventual parliamentary success. If you look at all the seats we gained off the Conservatives in 1997, and that was very often on the back of our local government success.

Now local government successes are also in the cities and in the North of England, and that places us well. And other things have changed I think since 2001. For example, the Iraq war, many people have lost trust in this government, as a result of Tony Blair's decision to support Bush's war in Iraq.

You've also issues like student top-up fees and you've got a lot of students in the cities, and as I say, you have the complete collapse of the Conservatives, making the Liberal Democrats the only alternative to Labour in cities like Liverpool and Newcastle and Sheffield and Manchester.

Jeremy Vine: And you are getting rather excited in the Lib Dems aren't you. Lord Razzle, one of your spokesmen said "there's going to come a moment when the British public loses faith in the Labour Government, when that happens, as surely as night follows day, the next government of this country will not be Conservative, it will be a Lib Dem government."

Lord Rennard: Indeed, there's no evidence at all of the Conservatives coming back.

Jeremy Vine: Is he right?

Lord Rennard: If you look in, well in Westminster terms, the Conservatives are dead in Scotland and in Wales, and in the Northern cities and in the urban areas; so if there cannot be another Conservative government, the Liberal Democrats are the alternative, and as night follows day, people will eventually want to vote out the Labour government. And it's the Liberal Democrats they're much more likely to turn to.

Jeremy Vine: Well they've got three times as many MPs as you; so you're saying in this election, you will replace them as the official opposition.

Lord Rennard: No, I'm saying we'll certainly make significant advances. We'll be winning seats from both Labour and from the Conservatives and at the point at which people decide to switch away from a Labour government, they are at least as likely to switch to the Liberal Democrats as anybody else.

Jeremy Vine: Okay, now Wavertree which we mentioned there, you are trying to take from Labour. As Professor Tonge pointed out, the biggest swing Labour got on election night in 1997 was 18%. To win Wavertree you need 20%, you're dreaming aren't you.

Lord Rennard: Well we've achieved swings of over 20% in parliamentary by-elections in the last year. We achieved nearly that swing in Hartlepool, more than that swing in Leicester and in Birmingham and in Brent East a year ago.

Jeremy Vine: You know it's different in General Elections, you've worked through so many of them.

Lord Rennard: But the pattern is the same when you look at the by-election seats we were gaining off the Conservatives in the last Conservative government, and that was a pointer to the gains we made from the Conservatives in '97 and 2001.

And I would suggest the by-elections over the last year, four seats in previously safe Labour territory, two won by the Liberal Democrats, two which we nearly won, in all of which the Conservatives fell from second to third or even fourth place, they are a pointer to very significant gains the Liberal Democrats can make from Labour, next time round.

Jeremy Vine: So, you win Wavertree, let's say and you win it by being more Labour than the Labour party and suddenly you find that in seats where Labour are first and the Tories are second you let the Conservatives back in.

Lord Rennard: Well I think there's no evidence of the Conservatives progressing, and I'll show you back to the by-elections over the last year, where the Conservatives were second in these seats at the last general election. They actually fell to third or even fourth place in Hartlepool, so there's no danger of the Conservatives getting in.

But what has changed is people's attitude to the Labour Government over things like the invasion of Iraq and the allegations of weapons of mass destruction, over the student top-up fees. People are very concerned about things like the unfair levels of council tax.

Jeremy Vine: But you see that's the point, you're attacking Labour now. You take a seat like Dorset South, Labour MP, second place, close second is the Conservative. You attack the Labour candidate, the Conservatives win the seat.

Lord Rennard: I think the Conservatives are falling back and the poll evidence is they're doing less well now with Michael Howard than they were with Iain Duncan Smith or with William Hague. The Conservatives are falling back, not moving forward and not a single Conservative I've met in recent times, actually thinks the Conservatives have any chance at all of winning next time.

Jeremy Vine: What about your own seats. A quarter of them would fall with a swing of less than 3%. You must worry about that.

Lord Rennard: No, you actually look at what happened at the last General Election. Many people, such as yourself suggested in 2001 that these seats that were gained in 1997, might fall back in 2001. But no, they didn't. We retained virtually all of them, and we made further advances from both Conservatives, and indeed we started to make advances from Labour last time.

Jeremy Vine: All right, so Cheadle for example, you got a majority of thirty three there as you well know. Shut the voluntary area there, the campaign, the Cheadle campaign for the Lib Dems, move all your campaign workers over to Wavertree, cos you can bank on winning Cheadle back without any help at all can't you.

Lord Rennard: We have an extremely good MP in Cheadle in Patsy Colton, and I'm sure she'll be building on her majority.

Once Lib Dems get in, even by small amounts, they tend to stay there. We've won seats by twelve votes in 1997 that we won by seven thousand in 2001, by five six in '97, that we won by fifteen thousand in 2001. I think our Liberal Democrat MPs are incredibly good at serving their constituents.

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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The next Politics Show will be on Sunday, 28 November at 12.30.
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