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Page last updated at 09:44 GMT, Sunday, 28 September 2008 10:44 UK

'I won't bash bankers for cheap headlines'

On Sunday 28 September Andrew Marr interviewed David Cameron MP, Conservative Leader, in Birmingham

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

David Cameron talks about the financial crisis and explains Conservative economic policy. No responsible Opposition can rule out tax increases, he says.

ANDREW MARR: Well in America they've been working all weekend on the proposed $700 billion bank rescue deal.

David Cameron MP, Conservative Leader
David Cameron MP, Conservative Leader

A lot of financial observers think that Britain is going to have to do something similar and as expensive in relative terms.

As early as tomorrow morning, we may find that Bradford & Bingley has been nationalised.

So what's the Tory master plan for dealing with this crisis? I'm joined now by the Conservative Leader David Cameron.

DAVID CAMERON: Good morning.

ANDREW MARR: Good morning. Let's start with Bradford & Bingley.

If it happens that tomorrow morning that bank has been nationalised, will you be in favour of that or against it?

DAVID CAMERON: Well what matters most of all is safeguarding the depositors in a bank like Bradford & Bingley. That is the absolute key.

And I think what obviously is preferable is a private sale, so the business is a going concern. But I think what we've got to do in this country is get away from a situation where the only choice if you can't have a private sale is to throw the whole thing onto the taxpayer, nationalise it and have the taxpayer bearing all of that burden and bearing all of that risk.

And that is why we've been saying for a year now, because remember Northern Rock went over... went under a year ago, that we should have a situation in Britain where we have the ability for the Bank of England to take over a failing bank and to reconstruct - safeguarding the depositors and then making sure that those bits of the business that can be sold are sold. And in the end, then the bill effectively is picked up not by the taxpayer...

ANDREW MARR: So, if I...

DAVID CAMERON: ? who I want to protect, but by the debtors.

ANDREW MARR: So a bank is sort of boarded as it were rather than acquired?

DAVID CAMERON: Yes. And the government's had a year... What is so remarkable about this... I mean what have these people been doing for a year?

ANDREW MARR: Well...

DAVID CAMERON: This is the eighth biggest bank in Britain. We've got a regulatory system set up by our Prime Minister that seems to have completely failed to spot that something was wrong, to get something done about it, and we've got a bunch of politicians running the country who've had a year to pass this legislation, which we've said repeatedly we will support them if they do that and we will also - it's a final point, but it's very important - that we said you know during the summer don't let parliament go down until we pass into law a really clear scheme that says to savers, people watching this programme that if you've got up to 50,000 in a bank account it's completely safe and you get your money back within 7 days. Why didn't they do it?

ANDREW MARR: Nobody so far around the world has come up with a way of dealing with this that doesn't either involve risking taxpayers' money to prop up the financial system and to get it through a rough patch, or alternatively saying terribly sorry, that's market capitalism: if a bank goes down, it goes down - painful as it may be. That's the argument they've been having in America. If in Britain there has to be the same sort of rescue package for British banking that they're hammering out in Washington at the moment, will you be in favour of that or against it?

DAVID CAMERON: Of course if things have to be done and if that is going to cost money, then we will look at it as a responsible opposition. The government knows that - if they want legislation passed, if they want to work with us, we stand absolutely ready to do that.

ANDREW MARR: So if Alistair... If Alistair Darling next week or the week after says, 'Look, we are going to have to spend, I don't know, a hundred billion or two hundred billion pounds of government money, taxpayers' money to rescue the British banking system', you'll be in favour of that, you'll agree with that?

DAVID CAMERON: I'm not signing any blank cheque, least of all on this programme, for what needs to be done. But they know there is a responsible opposition that on issue after issue, where if the government get it right, we're there to support them. We did on Trident, we did on education reform. That's the sort of party we are, that's the sort of leader I am; that if there are problems, they want to talk to us about them, they want our help, they have it.

But let's be clear about this. We've got to get away from the situation where it's either nationalisation with the taxpayer having to pick up all the bills, take all of the risk of all these failures that have been made elsewhere and saying well there's nothing we can do. We've come up with our alternative. The government has an alternative which they're going to legislate for when parliament gets back. Why have they wasted a year? What have they been doing?

ANDREW MARR: There are lots of problems, I would have imagined - people saying that politicians or officials should take over a bank and then run it. Why would they be any good at it, frankly?

You were opposed to the nationalisation of Northern Rock. Nonetheless, that bank is now still there, everyone's protected. HBOS was taken over.

DAVID CAMERON: Except for... Hang on, the taxpayer isn't protected. ANDREW MARR: Has it been...

DAVID CAMERON: Well that's the problem with Northern Rock and that's what we said at the time. The taxpayer now has the full risk of that business and two to three billion pounds has been pumped into that business. The taxpayer is bearing all of the risk, bearing all of the burden. Would you say that's right.

ANDREW MARR: So how can you say that you would back an extension of that kind of thinking to the rest of the banking system then?

DAVID CAMERON: Because we have, we have said you need to have a Bank of England led reconstruction. So instead of nationalising it, instead of the taxpayer taking all the risk, the Bank of England holds it, the Bank of England safeguards those deposits and then it works out with the business how mu? what bits can be sold as a going concern and what you're left with. But the key, the key at the end...

ANDREW MARR: But the fact that the Bank of England takes it...

DAVID CAMERON: No, no, this is...

ANDREW MARR: ? surely they take some of the risk as well? They can't take over without the risk.

DAVID CAMERON: No, the abs? the absolute key is that if at the end of that process there is a bill to be paid, the bill's paid by the creditors - by the banks and others that lent money to that business - and not by the taxpayer

ANDREW MARR: So even if...

DAVID CAMERON: My worry in this...

ANDREW MARR: ? even if that causes a further ripple of failures and the clogging up of the financial system as terrified institutions don't lend to each other?

DAVID CAMERON: Well you have to make...

ANDREW MARR: It's all about risk.

DAVID CAMERON: ? you have to make a very clear decision in each case about the systemic risk posed by an institution. But my concern is this: taxpayers are facing an incredibly difficult time. I spent time with debt counsellors yesterday talking to me about people whose mortgages have gone from 700 a month to 1100 a month, talking to me about families who are juggling the food bill that's gone up, the fuel bill that's gone up and the rent bill and wondering which one to pay. Now I don't want us to turn round to the taxpayer and say, 'You've got to pick up every last bill of every bad banking decision made by every financier.' That isn't right.

ANDREW MARR: So it sounds as if, if there was a British version of the George Bush plan, Paulson plan, you'd be against it?

DAVID CAMERON: No, I'm not... I'm just saying we're not going to sign a blank cheque. Of course these are very difficult times. We cannot afford to allow our banking system to fail. Go back in history, look at the Wall Street crash. It wasn't the crash that led to the Great Depression. It was the failure to prevent a banking crisis. That's why I'm saying we are a responsible opposition, I am a responsible leader. If the Prime Minister and the Chancellor want to talk to us at any time and talk about the things that need to be done, we are there to listen, we are there to act. I've shown over issue after issue that I'm prepared to reach out and do a joint party initiative to work with the government to make things work. They know that that's the way I am.

ANDREW MARR: As early as tomorrow morning, within a few hours, Bradford & Bingley may be nationalised. When you're asked almost immediately what you think about that, what will you say?

DAVID CAMERON: Well, I've said that there should be an alternative. We've set out what that alternative is. We've given the government a year to put it in place. People want to know, 'If you were Prime Minister, what would you do?' Well that is what I would do. We would have that alternative. That's what would happen.

ANDREW MARR: So the Bank of England would take it over, but it wouldn't be acquired and... ?

DAVID CAMERON: By... It wouldn't, it wouldn't... The risk wouldn't be borne in the same way by the taxpayer. It's a very crucial difference.

ANDREW MARR: Right. E? even if that failed to sort of sort the problem in the banking system, it's more systemic?

DAVID CAMERON: As I say, you always have to make, you always have to make a calculation and an understanding about what is a systemic risk and what is not. If you look over to America and you look at the different approach they took with Fannie Mae and Freddie Mac where they decided these are absolutely vital institutions - they were half nationalised anyway and they nationalised them effectively - and the decision they took with Lehmans. You have to make that, you have to make that judgement.

ANDREW MARR: Well you rai? you raise America. Barack Obama has talked about 'a culture of greed and irresponsibility' inside the banking system. Do you agree with that?

DAVID CAMERON: I think that we've had a failure of regulation and we've had a debt boom that went on for far too long, and it reached into parts of the economy it shouldn't have done. The whole thing has become infected and it's got to be dealt with. What you won't hear from me this week is sort of easy, cheap lines kind of just beating up on the market system, bashing the financiers. I mean it might get you some cheap headlines. It's not going to pay a single mortgage, it's not going to save a single job. But we need a change in regulation...

ANDREW MARR: So... so the people responsible are the regulators, the Labour politicians on the one side and all those people out there who borrowed too much money, but the people...

DAVID CAMERON: No, it's the banks.

ANDREW MARR: ? at the heart of it, the bankers, are not greedy or responsible?

DAVID CAMERON: No, that's absolutely not what I said. I mean let's take the issue of bonuses, for instance. If it's the case - and in some cases I believe it is - that bonus structures have led people to make very risky decisions and put at risk their organisation and put at risk their pensions, then the Financial Services Authority has got to look at that - of course. You know I am in favour of free markets, yes, but the market has to be regulated, it needs rules. And my point is this. Look, we've had a government for 11 years, the Prime Minister of which set up the regulatory system that has comprehensively failed. He took away from the Bank of England a responsibility...

ANDREW MARR: You were... you were against regula? You were against any further regulation as a party way back and...

DAVID CAMERON: No, no, no. Andrew...

ANDREW MARR: ? and last year your party was still saying, 'We don't want to go further on regulating the mortgage market.'

DAVID CAMERON: Andrew, let's be absolutely clear. No. Well, let's deal with that one, first of all, because that's something that Gordon Brown has said that's completely untrue. He keeps saying that the Tories want to deregulate the mortgage market. That's not the case. He knows it's not the case and he should stop saying it. Let's deal with...

ANDREW MARR: Be? because you haven't agreed with the Policy Commission.

DAVID CAMERON: It was the Policy Commission that recommended it and we said straight away 'we don't agree with that.' He knows that and the fact that he chooses to deliberately mislead people, I think is quite revealing about what sort of person is running our country. Now, let me just deal with the decisions he took because he has taken some calamitous decisions. He set up the regulatory system that has failed to prevent run on... the run on a bank. He also took away...

ANDREW MARR: But...

DAVID CAMERON: Hang on, hang on, this is a really vital...

ANDREW MARR: Okay, okay. Just on that one, you as a party were against the regulatory system to begin with. You said 'There's too much regulation.' It now turns out there wasn't enough!

DAVID CAMERON: Under the last 18 years of Conservative government and for the 140 years before that, the Bank of England had a very clear responsibility to call time on debt levels in the economy. That was one of their jobs and Gordon Brown took that away from them. No-one has called time in our economy for the last 11 years on huge debt levels in the private sector. We're now the most indebted economy on earth and no-one has been able to call time on Gordon Brown's debt levels in his government. And what we're announcing today - because this is absolutely vital...

ANDREW MARR: I want to come onto this, yes.

DAVID CAMERON: ? is two very important things. First of all, we're going to give back to the Bank of England that power to call time on debt in the British economy and to say to banks you need to keep more cash in your bank and you need to lend less. That's point one. Point two is we're going to set up an independent office that will judge how we're doing in terms of reducing the deficit and paying back national debt.

ANDREW MARR: Okay. Right...

DAVID CAMERON: Now that is absolutely vital because here we are, 14 years of economic growth...

ANDREW MARR: Okay, well...

DAVID CAMERON: Here we are. Hang on, I just want to make this point. 14 years of economic growth and yet we have got the biggest budget deficit in the industrialised world apart from Egypt, Pakistan and Hungary. That is a disgrace and that must never, ever be allowed to happen again.

ANDREW MARR: I don't understand this new system, so if you can explain it to us. There is going to be somebody who is simply waving a yellow card, complaining or whatever if government spends beyond a certain level. Is that the idea?

DAVID CAMERON: No. There's an Office of Budget Responsibility which is...

ANDREW MARR: And what powers do they have?

DAVID CAMERON: The power they have is we will set a clear mandate of setting a date by which the budget must return to balance and the national debt must start to be reduced, and they will report on progress towards that and what needs to be done.

ANDREW MARR: So they're just commentators?

DAVID CAMERON: No, it's a hu? it's an enormous rod. Everyone who has looked at this accepts that we are making a vast rod for our own backs. It is quite like in a way the decision that Labour took - one of the few good decisions they took - to give interest rates to the Bank of England.

ANDREW MARR: Ah, but the Bank of England, if I may say so, they had actual power over interest rates. This new body is going to be a commentating body. It's not going to be able to say to the elected government of the day - and people will say and it shouldn't be able to either - 'you must not spend this money.'

DAVID CAMERON: But think of the enormous consequences if a Chancellor and a Prime Minister cast them aside and say 'we're not going to do that.' We're making a rod for our own backs. We're putting ourselves in a straitjacket because we simply must not get into a situation again where after 14 years of economic growth, we've got this enormous deficit...

ANDREW MARR: It just sounds like the IFS on steroids.

DAVID CAMERON: No, it's not. It's, it will be you know a government office. It will be a properly funded office. Because you've got to ask yourself we've had a Chancellor and a Prime Minister now for 11 years who told us about his fiscal rules. He boasted about them every year how wonderful they were. You don't even need to know what they are. The fact is they failed. Here we are at the end of 14 years of growth...

ANDREW MARR: ? he might...

DAVID CAMERON: ? with this enormous deficit. By definition they failed. So what you need is independent judgement of how you are doing and a very strict mandate of getting back to a balanced budget. And that is a rod for our own backs. It's a very big change and it will mean that we get to grips with debt in our economy.

ANDREW MARR: Over the period of time that you've been talking about, there was an enormous boom and we understand that it was based on inflated property prices and all the rest of it and everybody was engaged in it. The Conservative Party didn't complain at the time about government levels of spending.

DAVID CAMERON: That's not true.

ANDREW MARR: You, you, you... Overall it is! You went along with it. You're still committed to Labour levels of spending until 2011.

DAVID CAMERON: Let's deal with both of those accusations because they're both wrong. We warned repeatedly. Every single response to the budget I've done or William Hague or anyone else, we all warned repeatedly about levels of government debt, about the fact they were spending beyond their means. And in terms of the current spending plans, we only accepted them because instead of spending 4, 5, 6% each more, they said - each year more - they said we're going to spend 2% more, 2% more, 2% more. That is very tight. It's going to get tighter because inflation is now higher, unemployment is rising. It's going to be tough and it's going to be difficult. That's why...

ANDREW MARR: So are you advising your commitment to stick with Labour spending plans until 2011?

DAVID CAMERON: No, those plans of 2% a year, we think are realistic. They're tough...

ANDREW MARR: Because you say... DAVID CAMERON: ? they're tough, but...

ANDREW MARR: ? when you say that you know every month that Gordon Brown carries on in office is another disaster for the British economy. Why extend that for another 12 months after you get into power?

DAVID CAMERON: Well if he sticks to those 2% rules, which are incredibly tough - they are tough, you know 2% growth...

ANDREW MARR: So he's... So he's behaving responsibly and toughly now?

DAVID CAMERON: Well no, the problem is that if you watched his conference every five minutes there was another enormous public spending plan. And you know we had a by-election where in the middle of that by-election he spent 2.7 billion of taxpayers' money to try and buy that by-election. My concern is because of the difficulty he's in, because of the situation he's in, he is like pulling the walls of the building around him down onto the ground and there's a great danger.

ANDREW MARR: Well he's not. You just said he was behaving responsibly.

DAVID CAMERON: Well if he sticks to his spending plans.

ANDREW MARR: Ah!

DAVID CAMERON: We will stick to those spending plans. My worry is whether he will.

ANDREW MARR: So long, so long as he does, you think he's behaving responsibly now? That's an incentive?

DAVID CAMERON: I think... I think 2% growth is responsible.

ANDREW MARR: Right, well that's, that's what he's doing. You are going to inherit if you become Prime Minister a situation of deep, deep economic difficulty. The business of sharing the proceeds of growth for the next few years is for the birds, isn't it?

DAVID CAMERON: Well let me explain what sharing the proceeds of growth means because it's a phrase but it's also a rule. And the rule is that if you look at an economic cycle - and everyone knows there are cycles - so that's from the peak of one boom to the peak of the next boom, right? Let me, let me...

ANDREW MARR: ? politicians can always fix where the cycles are.

DAVID CAMERON: No, no, well not under your rules. You can't because you've got someone independently judging it. What we're saying is during that period - very simple principle - growth in government spending should be slower than growth in the economy. If you do that, over a cycle, you leave yourself money to give back to people in tax reductions and to pay down debt. And that's what...

ANDREW MARR: But far from, far from being able to tax... to reduce taxes, is it not the case that looking at the state of the public finances you're going to have to raise taxes?

DAVID CAMERON: Well, we are going to face clearly if we win the next election an extremely tough time and I'm going to be telling my party this week just how tough it is.

ANDREW MARR: And are you prepared to raise taxes if necessary rather than let the debt slow even further?

DAVID CAMERON: No, no responsible opposition can never, can never rule things out. And I've said that repeat? on this... not this particular sofa, but many sofas like this. Of course you can't rule that out. But if you hold down the growth of government spending over a whole economic cycle, then actually you should be able to give people back some of their hard earned money. And that is what people want right now...

ANDREW MARR: Okay, but...

DAVID CAMERON: ? because they're facing very big bills, a very tough situation. And, frankly, every business, every family is tightening its belt right now and they want to see the same from the government.

ANDREW MARR: Over the next few years, as you concede, it may be necessary to raise taxes. Now I understand that you wouldn't want to go into details of that, but in terms of principle some of the taxes that are being talked about across the spectrum might involve taxing people right at the top end, the really high earners a bit more in order to take the pressure off people in the middle. In principle, is that the kind of thing you might look at?

DAVID CAMERON: I don't, I don't, I don't accept the premise at all. If we hold down government spending - if we do that over the long-term term, not just you know a few years but for a long time, as I say across an economic cycle - then I believe actually over time we'll be able to reduce people's taxes.

ANDREW MARR: Ah! Before you get to that period, you may have to raise...

DAVID CAMERON: You'll know...

ANDREW MARR: ? People are talking about VAT at 20%.

DAVID CAMERON: There'll probably be, there'll probably be two more Alistair Darling - or whoever else it is - budgets and spending rounds before the next election. If he were sitting here, he's not going to tell you what he's going to do in his next budget or the one after that. I think it's completely unrealistic to ask me to write George Osborne's first budget if we're elected in 2010. So I don't accept your speculation. I don't think it's possible...

ANDREW MARR: And by the way, do you think it will be 2010? Is that how you're thinking now?

DAVID CAMERON: Look, I... politics moves so fast in this country. I...

ANDREW MARR: You could be Prime Minister very soon. That's why I think perhaps it is fair to ask these questions now.

DAVID CAMERON: Well I think the Chancellor of the Exchequer would give you the same answer, which is... I mean the difficulty from my point of view is I do not know how bad the economic situation is going to be. I don't know how bad the debt situation is going to be. But I will say this to you, Andrew. George Osborne and I took a very clear decision 3 years ago not to offer upfront tax cuts and that judgement... And we had a big fight with our party, a big battle to say look, this is the right approach.

We are fiscal Conservatives. We've got to get the debt down. We've got to keep spending under control. We're not going to promise things we can't deliver. We had that big battle. We won that big battle and in my view we've been completely vindicated.

ANDREW MARR: David Davis would clearly like to re-open that discussion, wouldn't he?

DAVID CAMERON: Well it's not going to be re-opened. As I've said, we had the discussion. The discussion's been had. The right position was taken, the right judgement was made, and I think people can read from that.

ANDREW MARR: Does Britain have a 'broken society'?

DAVID CAMERON: Parts of our society are badly broken. If you look at the stabbings on the streets of London, the shootings that have taken place; if you look at the huge level of family breakdown we have, the level of teenage pregnancy, drug abuse. Yes, there are some parts of our society badly fractured and broken. But I'm not a pessimist...

ANDREW MARR: Right, well this...

DAVID CAMERON: ? and I believe it can be mended. But we've got to... This week is going to be about ?

ANDREW MARR: That was the distinction I wanted to ask you.

DAVID CAMERON: ? you know we've got to stop just dealing with the symptoms and we've got to get to those underlying causes, and that is what I'm dedicated to doing.

ANDREW MARR: Perhaps that's where the misunderstanding happened. You're not saying that Britain as a society is broken?

DAVID CAMERON: I've always said the same thing, which is that parts of our society are badly broken.

ANDREW MARR: Parts. There are places...

DAVID CAMERON: I mean if you're meaning... We're bound to get onto the Boris Johnson point. I mean I've talked to Boris about this and...

ANDREW MARR: The Boris point is now known.

DAVID CAMERON: ? Boris, Boris agrees... Boris agrees with me that it is right to talk about 'a broken society' and there are parts of our society badly broken and we have to mend them. And more important than the...

ANDREW MARR: There's a huge difference saying there are parts of the Birmingham area where there are real problems and those could be described as 'broken societies', on the one hand, and saying Britain has 'a broken society' on the other.

DAVID CAMERON: Well I think everybody knows what I'm talking about. Clearly you know in parts of Britain our society, our community and our organisations are extremely strong. I see that and celebrate that. And there are wonderful things to celebrate in our country - the success of our Olympic athletes, as Boris was talking about. But I think it's completely misleading if politicians just try and gloss over the fact that we have got an appalling violent crime problem. We've got real problems with family breakdown. We've got people you know...

ANDREW MARR: Do you think...

DAVID CAMERON: There are so many people who, who... You know 2 million children brought up in homes where nobody goes to work. Now that is a real problem and we've got to get to grips with the, with the real underlying causes of that.

ANDREW MARR: Okay. Do you agree that mass immigration has meant that this country has done something terrible to itself?

DAVID CAMERON: Well you're talking about Dominic Grieve's...

ANDREW MARR: I am.

DAVID CAMERON: ? interview in the Observer. That's not actually what he said.

ANDREW MARR: That was quoted. This quote here, it's quite clear.

DAVID CAMERON: What he said was that state multiculturalism - the idea that as welcoming people into our country, we should keep them all in silos and treat British Muslims as Muslims rather than British citizens, treat British Jews as Jews rather than British citizens - that is wrong and state multiculturalism, keeping people separate rather than trying to build a common identity, that has been...

ANDREW MARR: And he uses this very eloquent phrase: ?we have actually done something terrible to ourselves in Britain' and he talks about the long-term inhabitants, which presumably means white people... Do you agree with that?

DAVID CAMERON: And I think, I think state multiculturalism - the idea that you keep people separate - I think is a bad approach and I think trying to integrate more, trying to bring people together more, trying to build a strong common British identity for the future, I think that's absolutely right.

ANDREW MARR: Mmn. What about another plan to deal with the underlying causes that we've been reading about, which is either 3,000 or 5,000 - depending on the newspaper - new schools.

DAVID CAMERON: Yuh.

ANDREW MARR: Tell us about that.

DAVID CAMERON: Well the idea is very simple, which is to say why is it that it's so difficult to set up a new school in the state sector? I want to see the sort of competition, the sort of diversity, the sort of choice, the sort of excellence that you see in the private sector. I want to see that in the state sector for everyone's children.

ANDREW MARR: So this is a revol? this is a revolution in funding?

DAVID CAMERON: This is a revolution in saying... This is what happened in Sweden. Basically saying to churches and voluntary bodies and educational establishments and private schools as well, if you want to set up a school in the state sector you can have a simple means of inspection.

If you can attract pupils, you get state money and people can go there for free. These are free schools. They're not selective schools. This is about opening up the state monopoly and welcoming...

ANDREW MARR: They're not selective?

DAVID CAMERON: Yeah.

ANDREW MARR: They won't be selective and they will be free? They will cost money obviously and it's going to be... They're not going to be free in that sense, which means that other schools - failing schools - are going to contract and close. There's going to be a period of chaos, isn't there?

DAVID CAMERON: No, I don't believe... Well if you believe all competition, all choice, all diversity...

ANDREW MARR: No, no... there will be some chaos...

DAVID CAMERON: ? I just don't believe that competition and choice and diversity is chaos.

ANDREW MARR: No, no.

DAVID CAMERON: I don't believe it is.

ANDREW MARR: No, no, but if you want to create 5,000 new schools fast and see lots of other schools therefore go under, then lots of children aren't going to know where they're going to go to school for a while. It may not be a bad thing, but it's going to happen inevitably.

DAVID CAMERON: No, I don't accept that because the way you use the words is quite interesting: 'if you want to create 3,000 schools'. That is not the way this is going to work. There's not going to be some minister sitting in Whitehall kind of pepper potting...

ANDREW MARR: So all these headlines saying '3,000 new schools', '5,000 new schools', that's over egging it?

DAVID CAMERON: Well because I'm trying to pick up the way you... It sounds like you imagine a minister sitting in Whitehall kind of throwing darts at a dart board and setting up a school here, school there. This is about saying to people who want to build new schools that you can come into the state sector, you can offer a great education, that education will be free, you get the access to the taxpayers' money and you can provide great schools.

ANDREW MARR: Okay.

DAVID CAMERON: It's worked in other countries. It's transformed them. It does take...

ANDREW MARR: You mentioned Sweden. Let's if we could just move on, however - other countries again. William Hague has said that he would like to see a referendum on our relationship with Europe even if the Lisbon Treaty has been ratified and is over. Is that, is that your position as well?

DAVID CAMERON: Our position... William and I walked here together this morning, have absolutely the same position, which is we are the only party that is sticking to its promise of saying we all promised you a referendum on the European Constitution...

ANDREW MARR: But will we get a referendum...

DAVID CAMERON: Andrew...

ANDREW MARR: ? even if the Lisbon Treaty has been ratified?

DAVID CAMERON: Can I try and answer the question?

ANDREW MARR: Yeah.

DAVID CAMERON: Thank you. (laughs) So we're sticking to our promise. We have elections for the European Parliament next year, we'll be campaigning very hard for that referendum. Remember this treaty is still alive and well because the Irish rejected it in their referendum and we're going to go on fighting for that. But what William and I have always said is if - and we hope this doesn't happen - it is implemented and ratified by everyone and the government doesn't come back on its promise and give a referendum, we won't let matters stand there. And if that happens, at the time that that happens we will set out exactly and precisely what we'll do.

ANDREW MARR: Because he uses the referendum word about if that happens and... That's why I'm asking it.

DAVID CAMERON: Yeah, well if that happens and maybe when that happens, if you're so confident that the Irish will somehow be bulled into having... that the Irish will be bullied into having a referendum.

ANDREW MARR: No, I'm only asking whether you'll put in a referendum or not. Simple question.

DAVID CAMERON: If ..If that... If that happens - it's ratified and it's implemented by everyone - then we will say we won't let matters stand and we will set out very clearly what that will involve.

ANDREW MARR: You had a couple of weeks ago astonishingly high polls. They've halved now since Gordon Brown's speech in that conference for all its ups and downs. Are the polls now more realistic, do you think?

DAVID CAMERON: You know I've been doing this now for 3 years and I've had... I've gone into conferences level pegging, I've gone into conference last year 11 points behind. This time... I mean, look, what I do is get on with the job. Do what...

I think the big opportunity for us this week is we can demonstrate a clear, a united and a very strong alternative to this government. And the really exciting thing from our point of view is this: that because our party is united, I don't have to spend any time talking to the party about the party, which is what Labour did last week in Manchester. It was all about themselves. We can spend our entire time talking about the problems that families face in our country, talking about the challenges that our country faces as a strong, united, clear alternative.

That's what this week is going to be all about. And polls come and polls go. But you know what I would say is that after 3 years the Conservative Party is in a stronger position, is more united, has a better team of leaders, has got a better platform of policies, is leading the debate on so many issues and is there ready as an alternative if people want to get rid of this government.

ANDREW MARR: Every, every politician says in public that they don't take too much notice of the opinion polls. Every politician reads them avidly in private. Do you feel in your waters, as it were, that you are going to be the next Prime Minister of this country?

DAVID CAMERON: Well I never say that you know we... I never use the phrase 'we will win.' I say we can, we are there, we're an alternative, we're strong. People can see that.

But in the end, it is absolutely up to people. And you know those Labour politicians who say, 'Oh they haven't sealed the deal', they're right, we haven't.

You never seal the deal until you really win people's trust and that is a battle we have to fight every day, every week, every month until this Prime Minister, who I think is so broken now calls that election.

ANDREW MARR: Alright. David Cameron, 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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