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Page last updated at 11:49 GMT, Sunday, 24 October 2010 12:49 UK

Clegg hints at tuition fees cap

On Sunday 24 October Andrew Marr interviewed Deputy Prime Minister Nick Clegg.

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

ANDREW MARR:

Now back to politics and the almighty row over the spending cuts. On Wednesday in the Commons, David Cameron slapped George Osborne across the back. So did Nick Clegg. In it together. And the Deputy Prime Minister is with me now. Welcome.

NICK CLEGG:

Good morning.

ANDREW MARR:

How sure are you about the strategy because endless Nobel Prize winning economists are lined up in the papers this morning again saying this is an incredibly dangerous experiment?

NICK CLEGG:

What about I'm absolutely sure about is that you can't create the most important thing of all - which is growth, jobs, prosperity for the United Kingdom and all the families and communities in it - without first dealing with deficit. There's nothing pro-growth about having this dead weight of debt around our necks. There's nothing pro-growth about spending £120 million a day just simply on the interest of our debt. So we need to deal with this. We need to have a plan to deal with it. It's not a sort of cavalier plan. Then of course we need to move onto the rest of the equation, if you like, which is to then also lay down the conditions in which growth can really, can really now flourish, and that's I think what we need to concentrate on next.

ANDREW MARR:

Sure. But you know the balance of the argument, which is the severity of the early cuts could choke off growth and you go into a downward spiral, and people like Stiglitz have said this.

NICK CLEGG:

(over) I think that would be true, I think there'd be some validity to that criticism if what we were doing, we were trying to do it sort of overnight; we were trying to do it pre-emptively, we were frontloading all the cuts. Actually if you look at the detail of what we set out … I totally understand why people sometimes don't want to look at the detail, but it's quite an important point to make and remake, which is that this is a plan spread over four years, spread very sort of evenly over four years, and in which you know 20%, 25% cuts for instance of course sound extremely alarming - and they are big and they are significant, I'm not hiding that - but when you break it down year by year, that's, what, 5% or so cuts, 4% or 5% cuts every year. And I think that starts to show that this is a very difficult task, but one that we can manage if we do it step by step.

ANDREW MARR:

But reassure us that if the economic picture changes, if we appear to be heading back to double dip recession, this is not a closed book; you can return to these issues.

NICK CLEGG:

Well clearly no government should live in a bubble. You can't sort of ignore what's going on in the world economy or indeed our own economy. But I don't think there's much point, frankly, sort of providing a running commentary on what might or might not happen. This is a plan which in our judgement is the best plan to deal with a …

ANDREW MARR:

But you're not "lashed to the mast" to use Chris Huhne's phrase?

NICK CLEGG:

We have this plan and we want to pursue this plan because we think, and all the evidence suggests, that it is the best plan compared to others. We've looked very, very closely at alternatives - stringing it out longer; pulling the plaster off, if you like, even more slowly; doing it more rapidly; or not trying to do it at all. And our judgement is doing it over the course of this parliament, in that steady way, is the best way to free the British economy and free British society of this dead weight of debt.

ANDREW MARR:

There's such a lot we could talk about, and you say let's look at the detail and we should. Let me ask you about social housing. You're taking 60% away from the budget for social housing. You're capping housing benefit as well as total benefit levels. A lot of people find it very, very hard to see how this is anything other than a body blow to what used to be called council housing and very tough news for lots of families, particularly in the South East, wondering now about where they're going to be living next year.

NICK CLEGG:

We're doing two things, two big things. Firstly, we're trying to change a system in which huge amounts of taxpayer money has been spent on social housing and yet new affordable homes haven't been built in sufficient numbers and there are countless numbers, about 1.8 million families on the waiting list for social homes.

ANDREW MARR:

How does this help?

NICK CLEGG:

Well I'll tell you exactly what we're doing. What we're saying is we're going to continue to provide a capital lump of money - about £4.4 billion - to continue to build affordable homes. But what we're doing for new social tenants is we're going to say that the rents for those tenants can drift up to around 80% of market rate, which the Registered Social Landlords tell us acts as a great catalyst for them to build more affordable homes. What we …

ANDREW MARR:

(over) So they get the money from the high rents and the problem, the problem …

NICK CLEGG:

(over) No, no, no, can I just finish the sentence? And of course those tenants will not lose out because they will be provided for in full through the housing benefit system. So the housing benefit system will continue to provide them with support …

ANDREW MARR:

(over) Except that you're capping housing benefits.

NICK CLEGG:

What we're doing separately, which is the second thing, is we're simply saying - I think most people would feel this is fair - that at the moment you have an unfair policy where people are provided with money through the state to live in accommodation, in homes which people who are working hard and are going out to work simply can't afford themselves. And what we're simply saying is that let's try and make sure that you don't give through the housing benefit more than people would be able to pay for themselves for their own homes.

ANDREW MARR:

Okay, let's just …

NICK CLEGG:

We're not slashing it. We're simply saying there should be a limit, so that you don't have people …

ANDREW MARR:

(over) So you're taking money out, you're taking 60% of the social housing budget away; and at the same time you're hoping that the growth in affordable housing will come through people paying higher rents at a time when there's going to be much more unemployment, half a million people made redundant by the government one way or another, and at a time when benefits are being pressed down on, and it just doesn't seem to add up.

NICK CLEGG:

Right, I think you're making all sorts of assumptions which I believe to be false. Firstly you're making an assumption that the figure of reduction in the head count in public sector by 490,000, predicted by the Office for Budget Responsibility, is the only part of the picture. Let's remember …

ANDREW MARR:

It's quite a big part of the picture.

NICK CLEGG:

Well hang on. The same body has said that around more than 2 million new jobs will be created in the British economy. I think …

ANDREW MARR:

(over) One day if everything goes right?

NICK CLEGG:

Well hang on. At the moment we have 6 million people employed in the public sector. Even at the end of this Comprehensive Spending Round, the state will be employing 200,000 more people than were employed when Gordon Brown and Tony Blair came into power. We have about 23, 24 million people employed in the private sector, so it's roughly four times as big for the British economy. And it's a very vibrant private sector and I think if we can get the things right - invest in people, invest in infrastructure, use the fantastic strengths we have in our world beating universities, invest particularly in young people so they get the skills they need - I believe we've got the strength as an economy to bounce back much more strongly than people believe. And at the same time we need to do something about a housing benefit bill, which has gone up from £10 billion to £21 billion in recent years under Labour, and there haven't been enough affordable homes built.

ANDREW MARR:

All I'm putting …

NICK CLEGG:

What we're trying to do is say instead of simply repeating the mistakes of the past, make it fairer, so people get the housing benefit they need but not in excess of what people would get if they work, and at the same time provide an incentive for people to build (by our estimates) around 400,000 new affordable homes in the next decade.

ANDREW MARR:

All I'm saying is that it is a gamble because I mean you talked about jobs just now.

NICK CLEGG:

(over) It's based on a series of judgements.

ANDREW MARR:

PricewaterhouseCooper, as they used to be, reckoned that about the same number of jobs would actually be lost in the private sector as in the public sector, totalling about a million jobs in total. So many private sector companies depend on government contracts of one kind or another, that doesn't seem an unreasonable estimate.

NICK CLEGG:

Well we can trade statistics if you like all morning. I think what's worth pointing out, as I say, is that the economy is actually producing jobs. In the three months up to June, July, there were thousands of new jobs created, particularly in the private sector, at a rate we haven't seen for a very long time. And even in the public sector, you know there's a huge amount of turnover in the number of people who are employed in the public sector. Overall, as I say overall, even at the end of this period - people I hear say this is a slash and burn approach - we'll still be employing many, many more people in the public sector than Gordon Brown and Tony Blair were when they first came into power. So you know I think this is a more balanced approach than many people give us credit for. I'm not saying it's not difficult, I'm not saying it's not controversial. We will have to struggle with it in government. But when you look at the risks to the British economy of not dealing with this legacy of debt and of the structural deficit, I believe you can't free the economy to move forward and grow unless you deal with that first.

ANDREW MARR:

Let's look at another specific area, which is what's going to happen to local councils because you've always been a party enthusiastic about devolution. What you're really devolving down is a lot of the pain and the difficulty because these services, a lot of the discretionary services are going to have to go, whether it's after school clubs, whether it's help for old people at home, whether it's libraries, whether it's support for playing fields and so on. Local authorities have got a very, very hard job of cutting now ahead of them, don't they?

NICK CLEGG:

Well what we're doing is this. We're saying to local authorities, been very open about it, that they - like everybody else - have got to sort of play their part in finding savings. But what we're doing in exchange is we're saying okay there's less money, but you can have a whole lot more freedom - freedom to borrow. (Marr laughs) Well no, don't snort. I'll tell you why.

ANDREW MARR:

I snorted, that's true.

NICK CLEGG:

It's incredibly important, this; that we're giving local authorities a new power - I announced it a few weeks ago at the time of our conference - to borrow against future revenue streams, so they can then borrow money themselves to invest in regeneration projects in our great cities …

ANDREW MARR:

(over) Meanwhile their discretionary projects are going to have to close. Lots of them.

NICK CLEGG:

Well you've mentioned a couple of them. Social care, we're putting £2 billion extra in social care - extra money, £2 billion additional money into social care. Extended hours at schools. We're actually protecting in cash terms per pupil the whole baseline of funding going to schools, including extended wraparound care for schools, that we inherited from the previous government. And then of course adding onto that the pupil premium of £2.5 billion additional money for disadvantaged children. I'm not saying it's not difficult, but I'm saying with that extra freedom to borrow we're removing a whole lot of ring-fences which have constrained the way that local authorities spend the money. I believe good local authorities can see their way forward.

ANDREW MARR:

Another area you mentioned a little, a few moments ago was tuition fees where you've had to eat your words personally and as a party. Do you yet know what the cap on tuition fees is going to be and when we'll hear about it?

NICK CLEGG:

We'll hear about it soon. I mean we are very keen to you know make sure that people know exactly what's going to happen as soon as possible, within the next couple of weeks or so. We've been looking very clear… you know very thoroughly at the Browne Report. As you say, I regret - I think everybody regrets in politics as much as in life - to have to make promises which you then find you simply can't keep because circumstances have changed or are much worse than you could have possibly anticipated. However, I believe we will be able to come up with a system which takes some of the benefits of the Browne Report, particularly the lower burden on disadvantaged students. And if you just were to accept the Browne Report as it is, it would actually be a better deal for disadvantaged youngsters going to university than what we presently have under the tuition fee system created by the Labour government, and we're going to improve upon that to make it even more progressive.

ANDREW MARR:

To be clear, there is going to be a cap?

NICK CLEGG:

Well he is recommending that there should be no in effect …

ANDREW MARR:

No cap at all?

NICK CLEGG:

… no cap at all. I think …

ANDREW MARR:

I'm asking whether there's going to be one?

NICK CLEGG:

Well I mean I am uneasy about the idea that you in theory have unlimited fees, so we are looking at something which will be …

ANDREW MARR:

So there will be a cap of some kind?

NICK CLEGG:

… which would be more restrained, correct.

ANDREW MARR:

Okay. And if it's around sort of £6,000 or £7,000 rather than going much higher, the problem for the Russell Group Universities, the top universities, is that actually by the time they've passed money back to the government, they won't be any better off at all.

NICK CLEGG:

Well this is the balance we're trying to strike, of course. We're trying to strike, we're trying to deal with a number of priorities - some of which are in slight tension with each other. We want to give all universities, not just the top Russell Group Universities, a sense that they've got a fair deal, fair funding deal, and one which allows them to excel in the future.

ANDREW MARR:

Is this a fair funding deal that could lead to universities closing?

NICK CLEGG:

Well I think what we do need to do - and I don't think I'm predicting at all that there will be closures - but we do need to make sure that universities that aren't frankly doing very well, aren't catering for their students, that they're put under a bit more pressure to do so. If you speak to …

ANDREW MARR:

And if they were pressured …

NICK CLEGG:

… if you speak to students, they will …

ANDREW MARR:

… after closure, that would be worth doing, would it?

NICK CLEGG:

Well if you speak to students - I mean the National Union of Students has been very, I think very powerfully articulate on this - there are too many universities where students are basically having to pay for the management failings of universities. So we do need to put universities under some pressure to get their own act together where they're not performing well.

ANDREW MARR:

Let me ask you as Deputy Prime Minister about something else which has been all over the papers today, which is the Wikileak stories about the dreadful things that have been going on both in regard to torture and in regard to coalition forces shooting in very large numbers civilians during the Iraq War - one you described as "illegal". What is your reaction, first of all, to those stories?

NICK CLEGG:

Well we can bemoan how these leaks occurred, but I think the nature of the allegations made are extraordinarily serious. They are distressing to read about and they're very serious, and I'm assuming the …

ANDREW MARR:

What should happen?

NICK CLEGG:

Well I'm assuming the US administration will want to provide its own answer. It's not for us to tell them how to do that. But they are …

ANDREW MARR:

Well British troops are also involved in all of these stories. Do you think there should be an inquiry?

NICK CLEGG:

I think anything, anything that suggests that you know basic rules of war and conflict and of engagement have been broken or that torture has in any way been condoned are extremely serious and need to be looked at.

ANDREW MARR:

Do you think they should be investigated then?

NICK CLEGG:

Well I think, as I say, people will want to hear what the answer is to what are very, very serious allegations of a nature which I think everybody will find quite shocking.

ANDREW MARR:

Okay. Final question. Easy one. Do you have an exit route from the coalition?

NICK CLEGG:

(laughing) Do I have an … We have a plan, which we're going to stick to, to deliver good government for Britain for five years, in this five year parliament. No-one won the election. Sometimes people forget that.

ANDREW MARR:

Yeah - sure sure.

NICK CLEGG:

So we have to do it together. We're trying to do it in a cooperative, pluralistic way. It's a new kind of politics. It's very early days yet. And I'm absolutely determined to show people that even in very difficult times plural, diverse politics where people of different persuasions talk and worth together can work. So of course, you know we want to stick with it.

ANDREW MARR:

Either the coalition works, in which case it's very hard to see you standing on a radically different platform from the wicked Conservatives after five years of working side by side and having the same policies as them. Or it doesn't work, in which case you could both go down. I just wonder which, which outcome is …

NICK CLEGG:

I really … I fundamentally disagree. I think you know if you go to so many other democratic systems elsewhere in the developed world, they find it wholly uncomplicated that because of circumstances, because of decisions of voters, different politicians and different parties work together but they still compete against each other in elections on different platforms.

ANDREW MARR:

You couldn't for instance oppose tuition fees again in your next manifesto, could you?

NICK CLEGG:

Well clearly the tuition fee argument is now moving you know beyond where it was. And what we're trying to do, as I say, is trying to make sure that we install a new system, which is progressive, which allows particularly disadvantaged children to live out their dream of going to university.

ANDREW MARR:

Nick Clegg, for now thank you very much indeed.

INTERVIEW ENDS




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