JEREMY PAXMAN:
Since you became leader of the party, we've had "Fresh Start", "The British Way", "The Right Way", "kitchen table Conservatism", "compassionate Conservatism", "the common sense revolution" and "believing in Britain". What are we on now?

WILLIAM HAGUE:
Those things have come together in time for "Common Sense" which is our manifesto Over the last four years, we've become a much stronger party, with 2,500 more councillors, we control 70 more town halls and have twice as many MEPs.

PAXMAN:
What is in "Common Sense" that was not in "kitchen table"?

HAGUE:
"Common Sense" is our manifesto title. There was no such title as "Kitchen Table". Time For Common Sense is our manifesto. If people want to hit crime hard, bring down petrol tax, keep the pound, that's what they get from the Conservative Party.

PAXMAN:
And that's the same as "Compassionate Conservatism"?

HAGUE:
This is the title of our manifesto. I don't have any other titles. "Time For Common Sense" is the Conservative manifesto.

PAXMAN:
And it is no different to "kitchen table Conservatism", "compassionate Conservatism", "The Right Way", "The British Way" or whatever?

HAGUE:
It is the manifesto, produced at the end of this Parliament. The Conservative Party has changed some policies, readopted some policies. Times have moved on. The Labour Government has done some things. Those things all come together in this manifesto.

PAXMAN:
Do you still consider yourself a compassionate Conservative?

HAGUE:
Yes, I think Conservatism is inherently compassionate.

PAXMAN:
What is compassionate about locking up all asylum seekers?

HAGUE:
That is the only way that we will get a system fair to the genuine refugee. What happens at the moment...

PAXMAN:
What is compassionate about it?

HAGUE:
Let me tell you what happens at the moment: there is an international trade going on in human beings. The genuine asylum seeker has to wait 14 months to have their application determined, on average. In that period they are dispersed around the country, often into inadequate accommodation, often with a lot of difficulty going on in the area they are in. That is meant to be compassionate. If you take people into this country, take them to a secure reception centre, give them legal help, help with language difficulties, make sure they are properly housed and process the applications quickly.

PAXMAN:
So you would take a genuine asylum seeker, who had been tortured in a foreign country, and lock him up here. You say that is compassionate?

HAGUE:
I would process his application while he is in a secure reception centre. I would do that so that he is not elbowed aside in the abuse of the system which arises at the moment. The people who lose out most from the current abuse of the system are the genuine asylum seekers. This country has to be a safe haven, not a soft touch, then we can help the genuine asylum seeker.

PAXMAN:
What is compassionate about Ann Widdecombe describing part of the Labour Government's epitaph as being to put an imprimatur upon sodomy at 16?

HAGUE:
Ann Widdecombe has personal views. These are matters of conscience, and those things are matters of conscience. This party embraces people of all...

PAXMAN:
She's the Shadow Home Secretary!

HAGUE:
I take your word for what she says.

PAXMAN:
She did say that, in an article in the Daily Mail.

HAGUE:
The fact is the Conservative Party welcomes people of all races, of all sexual orientation.

PAXMAN:
What is she doing making a comment like that?

HAGUE:
Because everybody is entitled to their views on matters of conscience. And that is always the case. In the Conservative Party and in the Labour Party, there are different views about abortion, about homosexuality, about capital punishment. Everybody is entitled to those views.

PAXMAN:
It is not simply a personal expression of opinion. It is also the portfolio that she happens to carry in your Shadow Cabinet.

HAGUE:
No, she is the Shadow Home Secretary and I have not heard her express that particular view. I have not heard her use those words. We have openly gay candidates in the party now. To say we are not compassionate or tolerant of any minority is now a completely out-of-date concept.

PAXMAN:
So you are with Francis Maude when he says that you could have a gay leader of your party?

HAGUE:
Well, we could, yes.

PAXMAN:
It's not a problem?

HAGUE:
There is no vacancy at the moment, so it does not arise at the moment.

PAXMAN:
You see, all these different slogans that you've adopted during the time you've been leader, people say are symptomatic of flip-flops of yours on policy. If you look, for example, at the economy, at what stage did you decide that the minimum wage was a bad idea?

HAGUE:
We decided after the Government introduced the minimum wage that we would not reverse it. And it is not the business of an opposition in the new government to say we will reverse everything that the past Government have done.

PAXMAN:
Did you believe it was a bad idea before Michael Portillo told you it was a bad idea?

HAGUE:
Michael Portillo and I and our colleagues made the decision about the minimum wage together. We'd always opposed it because we were worried about the impact on employment. And it was brought in. It was set at a lower rate than had been widely expected and in an improving employment market.

PAXMAN:
Did you believe that the tax guarantee was a bad idea before Michael Portillo told you it was a bad idea?

HAGUE:
Again, Michael Portillo and I developed our policies together, and we decided to replace the tax guarantee with specific tax commitments, where we would show how they were paid for. That is what we've done. That is why we now have policies to benefit savers, pensioners, married couples with children and people who use their car, who have been taxed so heavily for the privilege of using their car.

PAXMAN:
So you had no idea when you made this promise at your conference speech that it was a bad idea?

HAGUE:
We always knew that broad commitments on taxation would have to be turned, before an election, into specific commitments on taxation.

PAXMAN:
If you knew it was a bad idea, why did you make the promise?

HAGUE:
We turned it into specific commitments about taxation.

PAXMAN:
But you didn't. You abandoned the tax guarantee.

HAGUE:
We set the direction of policy to reduce taxation. We won't put it in the form of a guarantee, we will put it in the form of specific tax commitments for savers, pensioners, car users, married couples with children.

PAXMAN:
Why did you call it a guarantee in the speech then?

HAGUE:
Because we were showing our commitment to reduced taxation, and we still have a strong commitment to reduced taxation. You talk about flip-flops...

PAXMAN:
Committing to reduced taxation is not the same as giving a guarantee that the tax burden won't rise.

HAGUE:
Let's be clear about this. I have set, throughout this Parliament, the Conservative Party on the track of reducing taxes. There is no question about that. We are committed to lower taxes.

PAXMAN:
But if it is the same thing, the guarantee still stands.

HAGUE:
No, we have replaced a general commitment with a specific commitment. We've had all this debate. This is 18 months old.

PAXMAN:
When did you realise you'd made a mistake?

HAGUE:
We changed the tax guarantee into specific commitments.

PAXMAN:
When did you realise it was a mistake?

HAGUE:
We've changed it into specific commitments.

PAXMAN:
It was a guarantee, now it is no longer a guarantee. My question is, did you realise it was a mistake before Michael Portillo told you it was a mistake?

HAGUE:
Michael Portillo and I developed that policy and all the others together. We want people to see exactly what will happen on taxation under a Conservative government. After four years of rising taxes, they will get lower taxes from a Conservative government and we've spelt out exactly how we'll do it. That is the right, clear, honest thing to do.

PAXMAN:
Did you realise that opposing independence for the Bank of England on interest rates was a mistake before Michael Portillo told you it was a mistake?

HAGUE:
Michael Portillo and I developed those policies together, and the whole Shadow Cabinet have developed all these policies together. We will not reverse the independence of the Bank of England. We'll review that policy in the light of changed circumstances. If no politician was allowed to update their policies for the passage of events, Tony Blair would never be able to open his mouth. And the Conservative Party have said, things have moved on, the Bank of England has been made independent. We will not reverse it. A minimum wage has been brought in, we will not reverse it. Times have changed. It is now 2001, not 1997.

PAXMAN:
What are we to make of somebody who advances these positions as apparently cast in stone and then changes his mind on them?

HAGUE:
What you can make of the Conservative Party's policy development is that we've updated our policies, we have maintained a strong thrust to fighting crime, reducing taxes, keeping the pound. These are present through all of our policies throughout the whole of this Parliament. They are present in our manifesto and they are part of Tory beliefs.

PAXMAN:
There are some of your policies that you apparently can't decide whether they were right before or after, for example, pensions. You say that things like the free television licence and the winter fuel allowance should be consolidated into the pension. You say in your manifesto that pensioners who want to carry on claiming those individually can. That is a complete failure to make your mind up.

HAGUE:
We stated our policy on this several months ago. We said that people who wish to consolidate those things into their weekly pension can do so...

PAXMAN:
Which do you recommend?

HAGUE:
It depends which situation people are in. There are people in care homes, for instance, who are not receiving the winter fuel allowance. It will be to their advantage to be able to consolidate that into their weekly pension, because they are not getting it as a separate payment at the moment. There are some pensioners over 75 who do not have a TV so aren't entitled to the concessionary TV licences. But they will get the benefit if they put it into their pension. So it depends on the situation of each pensioner and we are allowing them to choose.

PAXMAN:
In the history of politics, or the history of manifestos, can you name another policy where a party has gone to the country, allowing this sort of pick-and-mix approach?

HAGUE:
People are often allowed choice. In 1979, we said you can buy your council house. You don't have to. History is full of manifestos where people are given a choice, usually Conservative manifestos. And in this manifesto they are given the choice about how they take their pension, of keeping more of the money they have earned. They are given the choice about how they are building up the pension in the future, about the school their children go to. People ought to be give a choice.

PAXMAN:
You mention 1979. You were a pretty young chap then. Could you think, in the history of your party, of a worse time to have become leader than when you did?

HAGUE:
Well, probably after 1906. But none of us were around then. Of course, it's a big challenge to take over the leadership of a party after a huge election defeat. But over the last four years, we've been building up the party, grass roots are stronger. We have won most of the elections which have taken place in that period and never been put off by opinion polls and detractors.

PAXMAN:
You promised to make this a mass-membership party and you've demonstrably failed.

HAGUE:
We've certainly strengthened this party enormously. There are 2,500 more Conservative...

PAXMAN:
How much more is the membership up?

HAGUE:
The membership is going up. It went down and now it's gone up. All political parties have a serious problem with participation politics.

PAXMAN:
You said you would take it way up.

HAGUE:
We have not met our targets on membership, as I have said many times. We have met our targets on many other things. It will make the Conservative Party a far stronger force than it was four years ago. And that will be borne out in the elections.

PAXMAN:
Do you wish you'd waited a few years before trying for the leadership?

HAGUE:
No, because I enjoy it hugely, because I think somebody had to take on what is a difficult task. I think we are making enormous progress. We're the only party speaking up for the people of this country in this election campaign.

PAXMAN:
You are seriously trying to tell us this is a party ready for government?

HAGUE:
It certainly is. Who would be a more honest Chancellor, Michael Portillo or Gordon Brown? Portillo by a long way. Who would be a more effective Foreign Secretary, Robin Cook or Francis Maude? Francis Maude. Who would be a better Home Secretary in fighting crime? Jack Straw, slow hand-clapped by the Police Federation, or Ann Widdecombe who got a standing ovation from the Police Federation? Ann Widdecombe every time. We are ready for government and we would be a far better government than the shambles we have now.

PAXMAN:
So why have you characterised this as a referendum on the Euro?

HAGUE:
Because the Labour Party are promising a referendum and actually what they would give people is a loaded referendum and a process to a referendum that is loaded and I have to point out to people that if you really want to vote to save the pound, your opportunity is next week. You have to stop this at the pass. Because once they won an election and embarked on the process of bringing about a referendum, they would choose the question, the timing, they've already rigged the funding. Don't expect a fair referendum.

PAXMAN:
If this is a referendum on the pound, and you lose it, you will accept the verdict of the British people, will you?

HAGUE:
I will fight very hard for what I believe in any subsequent referendum. But it will be harder. There's no doubt about that. It will be a bigger challenge to save the pound. So the opportunity to save the pound is in this next nine days.

PAXMAN:
But the convention about a referendum is that the people speak in a referendum and we all abide by the result?

HAGUE:
Well, of course there would be under the Labour Party's proposals, a referendum, but a rigged referendum. Now I will say open and I have said for several days, if they win the election, then they have a very good chance of carrying such a referendum. That will be an enormous challenge to us who want to keep the pound.

PAXMAN:
If you carry on fighting, this is not a referendum?

HAGUE:
Yes, it is. This is the key decision point. If people vote Conservative, the pound stays. If people vote Labour the pound probably goes. That is why it is the key decision point about what happens to the pound.

PAXMAN:
You are not prepared to accept the wisdom of the people should you lose?

HAGUE:
I will fight to the last opportunity to save the pound. Obviously I will. I will fight for what I believe. Any politician would. Anybody with strong beliefs would do so.

PAXMAN:
Is that because you agree with Margaret Thatcher, that a country that does not control its own currency is not free?

HAGUE:
One of the risks of a single currency is we would lose control of our rights to run our affairs. People say we don't have to worry, we can sign our currency away and would not lose the right for other things. I say show me that is what happens to the countries who have joined the currency. Then we will see what the constitutional position is.

PAXMAN:
Do you agree with her if you no longer control your currency you are not free?

HAGUE:
I agree with her that this is one of the great risks of a single currency I say to people who argue with, that let's see what happens.

PAXMAN:
Would a party led by you ever vote in favour of the euro?

HAGUE:
It will not do so in the next Parliament in the next Government. I set the policy for the next Government. You were accusing me a few minutes ago of changing policies.

PAXMAN:
You might change your policy on this?

HAGUE:
I have been very clear from the beginning of the current Parliament that our approach is for the next Parliament because no Parliament can bind its successor. I am against euro, for keeping the pound. Our policies are for this Parliament.

PAXMAN:
OK, would you personally ever vote in favour of the euro?

HAGUE:
My position is indistinguishable from the party. I am the leader, I set the policy, that is the same question as the previous question.

PAXMAN:
No it is not.

HAGUE:
It is the same.

PAXMAN:
I am asking a matter of personal conviction here. I understand all this business about a manifesto and you saying you cannot look beyond the next Parliament, but can you personally ever envisage yourself voting for the euro, ever?

HAGUE:
I am the leader of the Conservative Party. And it is...

PAXMAN:
You have a personal view?

HAGUE:
The policy is set by the leader.

PAXMAN:
You don't think more than five years ahead?

HAGUE:
I am against the euro and for keeping the pound.

PAXMAN:
For ever?

HAGUE:
One Parliament at a time. Therefore the policy apples to the next Parliament.

PAXMAN:
You are asking us to believe that after the next Parliament you might vote in favour of the euro?

HAGUE:
I am asking people to believe that the future of the pound is at stake. If Labour win they will be hell bent on doing away with it. And if we win we will keep the pound.

PAXMAN:
Is it you don't know what your view is or you will not tell us?

HAGUE:
I will not allow us to be side tracked from a clear policy for this forthcoming Parliament by abstract questions about differing lengths of time.

PAXMAN:
With the greatest of respect is this is not an abstract question, it is a matter of principle. You have said I oppose the European single currency in principle.

HAGUE:
It is an abstract question. Each party sets their policy, the policy of the Labour party is to hold a referendum.

PAXMAN:
I am not asking about policy for the next Parliament. I am asking about your personal conviction. You are telling me your personal conviction is so easily swayed that you might at some stage vote in favour of the Euro.

HAGUE:
My personal conviction is against the euro and for keeping the pound. I am campaigning for keeping the pound and policy of the party which is indistinguishable from my own view, is set one Parliament at a time. And we have pledged to keep the pound in the coming Parliament.

PAXMAN:
You have conceded that your party comprises many people who have personally strongly-held convictions, your feeling about the euro is not one of those?

HAGUE:
Of course it is anybody who sees me campaigning around the country campaigning to keep the pound knows I believe we should keep the pound. But our policy is clear, set at one Parliament at a time. We will keep the pound. The coming Conservative Government elected next week will keep the pound. You cannot get straighter than that.

PAXMAN:
Let's support that, let's suppose that you lose this election, that there is a referendum, you may say it is a rigged question, let's say we go into the euro, you could find yourself leading a party which would support leadership of the euro, you can imagine that can you?

HAGUE:
If there was a referendum under a Labour Government of course we would campaign for a no-vote in that referendum.

PAXMAN:
You can imagine yourself leading a party which supports the euro?

HAGUE:
I am setting the policy for this election.

PAXMAN:
Your conviction does not set beyond the next Parliament?

HAGUE:
We are not having the election of 2005, we are having this election.

PAXMAN:
Do you understand why some people find this incredible?

HAGUE:
I understand why people who are used to the fact that you could pick up the Conservative Party for being divided about Europe at the last election try to draw us in this election to draw us into saying different things from our policy.

PAXMAN:
I am just asking you your personal conviction?

HAGUE:
Keep the pound.

PAXMAN:
Forever?

HAGUE:
I set the policy one Parliament at a time.

PAXMAN:
Why won't you will be explicit in principle terms. After all, all the polling evidence suggests that the vast majority of people share your beliefs?

HAGUE:
They do share my beliefs. Included among those people are some people who think we shouldn't ever join the single currency and some people who think we shouldn't join it now. All of those people are on the same side in supporting my policy.

PAXMAN:
Which one are you?

HAGUE:
I am for keeping the pound.

PAXMAN:
Forever?

HAGUE:
And the policy is set one Parliament at a time.

PAXMAN:
Why do these polls also show they don't really like you?

HAGUE:
I don't take too much notice of opinion polls. The European elections, we were miles behind.

PAXMAN:
You've taken notice of them on the euro. So it's quite legitimate.

HAGUE:
No. What I take notice of on the euro is people I meet around the country. I am not going to have a campaign run by opinion polls. In the European elections, exit poll, BBC exit poll of the people who had voted said that we had lost the election. Am I expected to take any notice of opinion polls any more? Of course not. We fight the election and we will, and we are interested in real people, not in opinion polls.

PAXMAN:
Do you accept that you are behind in the campaign at present?

HAGUE:
I accept we wept into this campaign as the under dog. We knew that on the 2 May 1997 we were going into this campaign as the underdog. I think that we are gaining support all, along. The reaction candidates are receiving is extremely good. We are gaining support on the key issues of tax, crime, asylum and of keeping the pound.

PAXMAN:
What is it like fighting a campaign you know you are going to lose?

HAGUE:
We are not going to lose. We are not planning to lose.

PAXMAN:
How come so many members of your shadow Cabinet think you are going to lose?

HAGUE:
They don't think that.

PAXMAN:
I can quote you a couple. Tim Yeo, Bernard Jenkin.

HAGUE:
You would quote them out of context. All of those people believe we can win the election. I have been through all this before. We don't have the look in the crystal ball. We can read the book. We have been through European elections, local elections. Every time I take part in an interview, people say "what are you going to do when you lose the election" and they are astonished when we win. All those astonished faces on the night of the European election.

PAXMAN:
8% of the population voted for you in those elections.

HAGUE:
10 million people voted, more than in all the opinion polls ever conducted in the history of the country.

PAXMAN:
And the Conservative vote was about 8%.

HAGUE:
The Conservative vote was many millions. It was such a proportion that nobody on the coverage that night, including Newsnight, had the foggiest what the result would be. We knew we were going to win.

PAXMAN:
What is Tim Yeo doing then, a member of your Shadow Cabinet having a bet on the size of the Labour majority?

HAGUE:
I don't recommend betting on the results at all. But I do understand that his bet involves gaining money for every seat the Conservative Party gets.

PAXMAN:
Yes. It's predicated on the size of the Labour majority.

HAGUE:
Actually, if you look at spread betting, the better the Conservatives do, there is no limit to it, the better he does. Maybe he has done a good thing.

PAXMAN:
Let's look at spread betting. LG Index, the boss of whom is the major donor to your party. They are predicting a Labour majority of 156 to 166 seats. That is from a company run by a man who gives you millions of pounds.

HAGUE:
He doesn't decide what the spread is. Of course he doesn't. Obviously, it's nothing to do with anybody who gives money to the party. People have expectations about the election. Most people expect the Labour Party to win. That is not what is going to happen. And we are fighting to win, we can win this election and millions of people haven't decided how to vote, millions of people haven't decided whether to vote in this election because of the apathy and disillusionment of four years of broken promises have brought.

PAXMAN:
Can we turn, finally, to the question of your own personal standing. People do not, as far as we can see, seem to like you. I know you discount the opinion polls, but they don't. One of the things they say about you is you are an effective politician but essentially you belong in a 19th century tradition, you are a very good debater, for example. But they don't see you as a 21st century politician, they see you taking your wife out campaigning and not allowing her to speak. They think that is odd.

HAGUE:
She speaks on a regular basis.

PAXMAN:
She spoke in Welsh about the weather.

HAGUE:
If you can't understand that, that's not my responsibility. She is not going to become a politician. It is not a 21st century...

PAXMAN:
Why are you taking her with you?

HAGUE:
She and my family give me the most fantastic support. It is wonderful to have the support of your wife on the campaign trail, it is a terrific thing.

PAXMAN:
OK. Let me give you a transcript of the 8 May.
"REPORTER: Mrs Hague, are you looking forward to the campaign.
WILLIAM HAGUE: She certainly is. She's enjoying it already. I answer the questions".
I suggest to you that is a slightly patronising way to think of your wife.

HAGUE:
Every man is protective towards his wife. I will continue to be so. It's terrific to have her on the campaign trail. She would not want to become the politician. My wife is a professional head hunter. I don't head hunt if she needs support. People have different careers. It is a 21st century thing in one family to have people with different careers who don't try and supplant each other in their careers. When they are going through something important in the life of this nation, a general election, show their support for each other. That is a good thing.

PAXMAN:
They don't tend to be trailed around mutely.

HAGUE:
You come with us and you see who is trailed around, and it is not Ffion.

PAXMAN:
On the broader question of your essentially 19th century approach to politics, do you see any justice in it?

HAGUE:
No. I think in this Parliament, in this election, we are speaking up for what really matters to people today.

PAXMAN:
Why is it then that you aren't coming across to them?

HAGUE:
Let's see what happens in the election. You are pre-judging the result. A lot of your questions are about prejudging the result. I understand looking forward to the results of the election. As I go around the country, I find people utterly fed up by the Labour Party. They want to know what the alternative is.

PAXMAN:
Sure.

HAGUE:
Yes, we have to work hard in the remaining nine days of the campaign. We know that. We will work hard and campaign longer than we have ever done before. That is fine. We are ready to do that.

PAXMAN:
Our evidence In the British election survey is that support for you as a party has gone down. Support for you personally has gone down. During the course of the campaign.

HAGUE:
That may be, it's not the evidence of real elections over the last few years. Support for the Conservatives has been¿. in local elections we have moved into the lead as the party getting the most votes. A party in the lead in local elections has always done well, and always won the general election. There is those are real people casting real votes. Conservatives don't have to be discouraged. We are in a strong position, a good position. We are fighting a good campaign in which the Labour Party are continually on at the defensive. I think that's how it will go on.

PAXMAN:
Thank you.