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Page last updated at 10:31 GMT, Sunday, 20 April 2008 11:31 UK

Tories step up pressure

On Sunday 20 April Andrew Marr interviewed George Osborne MP, Shadow Chancellor

'If you push this Chancellor enough, he gives way' claims Conservative spokesman George Osborne.

George Osborne MP
George Osborne MP, Shadow Chancellor

ANDREW MARR: Now then today's Tories are on a roll, what would have delighted Macmillan, a clear ten points ahead in one poll this morning.

But they're also affected by the economic whirlwind, what would they do with that 10p tax band.

How would they cut taxes and where would they cut spending, to make room for that?

Well George Osborne, the Shadow Chancellor, is with me now. Welcome, thank you for coming in.

GEORGE OSBORNE: Good morning.

ANDREW MARR: Let's start with the issue of the moment which is undoubtedly that 10p tax band. Would you restore that band?

GEORGE OSBORNE: Well what we think should be done now as of in the next week or so, is that we should reopen the package that was presented at last year's budget which we complained about as a tax con, and look at how we can help the 5.2 million people on low incomes who are going to see their tax rises, tax go up.

And the best way to do that is to address the specific problem that they face. And interestingly enough, although Gordon Brown goes round saying this is, you know, impossible to do, it would cost billions of pounds.

There's a very good report out today from the Institute of Fiscal Studies which says if you're just tackling those who are losers as a result of this tax con package, then the cost is around 700 million, that's still a lot of money but if you look at...

ANDREW MARR: You can either do it through tax credits or you can do by raising the threshold?

GEORGE OSBORNE: Well it is interesting that the excuse of the moment used by the Chancellor of the Exchequer is that the tax system has become so complex it's quite difficult to help these people. But Frank Field who is one of the prominent Labour rebels has come up with some interesting ideas about how we can help those who are losing.

And it is a question partly of fairness, I mean where is the moral compass of this government if they are actually increasing taxes on the poorest, at the very moment when the poorest see their cost of living going up.

ANDREW MARR: And so to be clear you will support Frank Field's amendment when it comes to the House of Commons?

GEORGE OSBORNE: Well we'll see what amendments are selected, we have our own arguments to make, but we will put maximum pressure on the government. We know thanks to the pressure we exerted earlier this year on issues like capital gains tax that if you push this Chancellor enough he gives way.

And I think it is manageable to come forward with a tax package that protects those on low incomes. They shouldn't be the people who are paying the price for the government's economic incompetence.

ANDREW MARR: You see some people will say that you are jumping on a bandwagon rather late, that you didn't oppose this in the same way earlier on in the process, and that you're not committing yourself to returning to the 10p tax band, which one of your own advisors as you well know says this would be a mad thing to do?

GEORGE OSBORNE: Mmm. Well, first of all I don't think it's fair to say we haven't been campaigning against this. I mean, within hours of that budget being delivered a year ago I was touring TV studios, appearing on the radio saying this is a tax con, the lowest paid are being hit.

We have voted already against it in the House of Commons and we will vote against it again when it comes before the House of Commons in the next week or so. So we have drawn people's attention to the tax con, indeed that very phrase was one that the Conservative Party came up with. So I think we've been consistent in making that argument.

We've also been consistent in saying that Gordon Brown's tax system is penalising the poorest. So, I think to be fair we have partly made the argument on this and it's fantastic, you know, that other people in other political parties are also seeing the impact that this will have.

ANDREW MARR: So why can't you say to me that you will return the 10p tax band when you come into office, if that's all true?

GEORGE OSBORNE: Well first of all I can't set out a budget for 2010 in 2008 because, you know, I simply don't know the state of the public finances or how the economy is going to develop over the next couple of years, indeed no one really knows how bad things might get, or what the impact might be on the public finances. So it wouldn't be responsible for me to do that.

What I can say is that we will try and have a simpler and fairer tax system. And whether that is restoring the 10p band or, as our own policy group, the Tax Reform Commission advised, you actually raised the thresholds and in effect turn those people's tax rates into zero which interestingly enough the IFS says is a fairer way of doing it, you know, we will see.

But I am absolutely clear that a Tory government would never increase taxes on the poorest in the way that that they've been singled out by Gordon Brown because, you know, frankly Andrew you and I are not facing an income tax rise at the moment, but if we were a cleaner or a nursery assistant or someone working in a call centre, or a receptionist, we would be facing a tax rise and I don't think you or I think that is fair?

ANDREW MARR: I have no views on these matters as you know, but I hear that you don't... you said this week that you would stop the tax rises on families. What did you mean by that?

GEORGE OSBORNE: Well first of all that we are going to use the force we have in the House of Commons to try and stop this 10p tax rise. On alcohol, in fact I think the last time I was on this programme I was explaining that there are ways of tackling binge drinking without hitting the, you know, tens of millions of people who have a glass of wine at home or, for example, a pint of beer at the pub.

On cars we, you know, think there is a case for environmental action against polluting cars but the government's car tax which comes in next April, and by the way I predict I will be here in a year's time talking about that particular tax rate that Gordon Brown has laid, you know there are ways of doing it without actually increasing the tax on a Nissan Micra or the Ford Mondeo.

ANDREW MARR: Right, so, you want to get rid of, or not to go ahead with some of the tax rises in front of the country at the moment. You're not planning to cut spending and you're livid about the vast amount of borrowing this government is doing. That does not stack up.

GEORGE OSBORNE: Well, first of all I don't accept that at all. We have a long-term plan unlike the government which, you know, you've got Treasury ministers saying just a couple of days ago they're going to re-open the budget and we'll see what the Chancellor says in a few minutes time.

Now we have a long term programme of controlling the growth rate of spending in this country, getting the growth rate of government spending below the growth rate of the economy over an economic cycle. And that creates a virtuous circle...

ANDREW MARR: You have a long term plan...

GEORGE OSBORNE: ...in which borrowing starts to fall, in which you are able to reduce taxes in the medium to long term. So once you get a grip on the future growth of spending lots of virtues flow from that.

ANDREW MARR: But at the moment you're saying in the shorter term less taxes, no cut in spending, and we don't like the level of borrowing, it's too high. One of those three things has got to give?

GEORGE OSBORNE: Well we accept that the borrowing problem is going to be with us for a while...

ANDREW MARR: So that can't give.

GEORGE OSBORNE: I cannot promise that, you know, in the next 12 months there is some magic bullet that deals with the fact we've got the biggest budget deficit in the western world.

ANDREW MARR: So that can't give. You've been very clear and explicit about taxation, so you are going to have to find ways to trim spending.

GEORGE OSBORNE: No, well the spending, if you look at the spending pattern over the next couple of years, what I want Alistair Darling and Gordon Brown to commit to is a long term plan to slow the growth rate of spending so that it grows more slowly than the economy grows.

Then you'd deal with the borrowing problem and you'll also don't end up in a situation where you are taxing the poorest. As I said, in terms of the 10p tax rate let's re-open the package. For example, again, when I was last on this programme there was a big row about capital gains tax, suddenly the government out of nowhere announced that they'd found 400 million to help deal with the row about capital gains tax.

So, I don't know what the current tax receipt figures are for the government, Alistair Darling knows that. I would be amazed if he doesn't follow the advice of his own Treasury minister just two days ago, look again at the tax package and come forward with a solution so that the poorest people in our country are not hit. We should have a government that's on people's side not on people's backs.

ANDREW MARR: There's a lot of comment in the papers today about this being the poll tax moment, an absolute watershed in politics. Is that how it feels to you?

GEORGE OSBORNE: Well I think it feels like a government that has lost its way and lost touch with people. And I think it's very interesting you've got the Foreign Secretary no less saying Gordon Brown should look at people, the problems the country faces, through the eyes of voters, which implies that he's not doing that at the moment.

And this government has lost its way, lost touch with people. It's not a matter of style with Gordon Brown, this is substance. This 10p tax revolt is not got up by the media, or Labour MPs or the Tories, this is genuinely being felt in the country and the poorest are being hit.

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

INTERVIEW ENDS


Please note "The Andrew Marr 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


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