How clear is Michael Portillo's vision? 19/2/01

Michael Portillo MP:
Gordon Brown has introduced this policy in the most cack-handed way. The principle that we should allow people to keep more of their own money is absolutely right and it's dismaying that Gordon Brown has been able to make such a mess of it. Firstly, by misleading people and saying he was going to abolish the married couples' allowance and compensate people with this credit, whereas half the people who are getting the married couples' allowance don't get this and then delaying it a year and having the most complex administrative arrangements, but can sort all that out. The principle that families should pay less tax and we should reward people by letting them keep more of their own money, because they are involved in the responsible business of bringing up children, that's right.

Jeremy Vine:
Your party has criticised it on principle. So David Willetts says that Mr Brown is trapping more people in a complicated claims culture. He says it is unusual to have a tax cut that you have to fill in a claim form to get. So why are you endorsing it?

Portillo:
That's my point. Gordon Brown has done something that is right as wrongly as he can do it. If we are going to help people through the tax system, there is a much better way of doing it, than having them filling out forms and claiming.

Vine:
So what's the way?

Portillo:
The way is to make it part of the tax system. If people have children they should get a credit against their tax. That can be done very simply. It's amazing that Gordon Brown has made it so complicated, but the principle that people who have families and children should be allowed to keep more of their own money is right.

Vine:
Can I read you these two statements the first one is this:
'What we will propose at the next election is not an indiscriminate across the board tax cut, they will be targeted to help those who need and deserve it most' and the second one:
'It is right that we target tax cuts on the country's priorities and in future budgets will have targeted tax cuts, but what we rule is out blanket irresponsible tax promises.' Can you tell us which one is Gordon Brown and which one is William Hague?

Portillo:
I think the first was William Hague.

Vine:
They are similar, aren't they?

Portillo:
Similar language, of course, but the policies are completely different. Firstly, throughout this parliament, what has the Government done? It has increased taxes. Throughout the next parliament, what is it committed to doing, it's committed to increasing public spending faster that the economy can stand. At a rate that is unsustainable without tax increases. By contrast, the Conservatives have now identifying how we would make changes to Gordon Brown's spending plans in the first two years of £8 billion and how we would have a different course for Government spending throughout the Parliament, which throughout the Parliament and particularly in the second half would give us very big scope for tax reductions... Therefore, there is the world of difference between what William Hague is saying¿

Vine:
Why are they giving out the same message?

Portillo:
Because this Government is all spin and no delivery. Of course, the Government knows what to say. What this Government doesn't want to do is to do what it says and we have set out who we could achieve our policy and as you know, Gordon Brown and Tony Blair, have been saying this since before the last election they wouldn't increase taxes. They promised not to increase them and improve public services. Taxes have increased and public service have got worse. They believe that the right response to that is simply to promise people more and more. People are fed up with that.

Vine:
You were right that William Hague's was the first quote. When he says what we will propose at the next election is not indiscriminate across the board tax cut, I presume you have ruled out such an income tax cut?

Portillo:
We have ruled out nothing for the second half of the Parliament. This £8 billion of tax reduction happens in the first two years. It's what I would do in my second budget. In those first two years we open up the gap between our spending plans and the Government's plans.

Vine:
Across the board tax cuts you ruled out? Is that right?

Portillo:
For the second half of the Parliament we have not made any commitments on how we would approach tax reduction. But we have described how we would use most, not yet all, the 8 billion.

Vine:
The 8 billion that you are talking about is only 2% of the total spending figure anyway, so what does it add up to?

Portillo:
It adds up to very important tax reductions that we would be able to offer to savers, pensioners and hard-working families and with more to come. Secondly, it is the beginning of a wedge of our ability to give taxes back to people who deserve to keep their money.

Vine:
But the wedge is only 2% thick.

Portillo:
This will grow. It is a four-year Parliament or five years and of course it takes time for us to turn around the direction of Government spending from it's unsustainable course that it is following under Labour, but we will turn it around and it means during the next two or three years we'll have even more room to make tax reductions to help pensioners further and families, even more than we can do with the first 8 billion.

Vine:
On the pensions policy, you probably will concede it was rather inconvenient to have to change it suddenly within a week and it was not a U-turn, but an S-bend, one of your colleagues said.

Portillo:
One of your colleagues said it was a Y-turn which was quite right. We offered people a choice. Either take the pension as it is paid at the moment with the bonuses, or you can have them all into the basic pension and if you opt for that, we will raise your tax allowance or threshold so you pay no more tax.

Vine:
These changes are being made with an election so apparently close. We had a similar kind of difficulty on the Conservative Party policy...

Portillo:
I make no apology for offering people choice. We believe in offering people choice and allowing people to spend more of their own money.

Vine:
Don't you worry about the number of policies where there is a specific change like the minimum wage¿

Portillo:
The Labour Party would not exist today, if it was still supporting the CND and against selling council houses or any of the enormous changes it has made.

Vine:
Do you see those changes on that scale?

Portillo:
No, I do not. Labour Party has changed some of its policies fundamentally and I don't see you criticising them for that. We have responded to public opinion and it's not something to apologise for.

Vine:
Have the changes stopped now?

Portillo:
We are a party that always listens. We will always be responsive to public opinion. We try to get things right, we try to put forward proposals that people like, but if we get things wrong then, of course, I reserve the right to change. I think it is absolutely the right thing to do.

Vine:
Mr Portillo, thank you.