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Shadow Social Security Secretary, David Willetts MP
Sir David Frost's interview with the Shadow Social Security Secretary, David Willetts MP.

If you use any extracts from this transcription, please remember to credit "Breakfast with Frost".

David Frost:

[INTRODUCTION].David Willetts, he's come down from Harrogate from the conference, and of course, you're going to be working on the manifesto in the immediate future.

David Willetts:

That's right, David, yeah.

David Frost:

And, do you think the election should be delayed?

David Willetts:

Well, I want the election to be fought as soon as possible, subject of course to the conditions in the countryside..I think we all hope we can get on with it, and fight it, and fight it to win , but we do have to take account of these appalling problems they've now got in the countryside with foot and mouth.

David Frost:

Do you think there's a case for changes in the emphasis that's been going towards indirect taxes - back towards direct taxes?

David Willetts:

I think there's a case for simply not taking money off the British people, in order for the government to spend it, allowing more to be kept for the people who've earned it in the first place, so what we do want to see is a reduction in the tax burden, and of course if Gordon Brown claims to be reducing taxes in his coming Budget, he'll only be handing back to people money he shouldn't have taken from them in the first place.

David Frost:

Michael Portillo said that maybe the target for inflation should come down from 2.5% to 2%, and assorted economists have said that's very dangerous - what do you feel?

David Willetts:

I don't see why it should be dangerous, what we're saying is that we have achieved a low inflationary environment, and it's very important to try to lock that in, to try to hold inflation down as low as possible..and we have got an expert economist, who previously was an advisor of the Bank of England, who will be advising us on whether there is a case for lowering the inflation target still further..as well of course as implementing our policy of giving the Bank of England proper independence.

David Frost:

And what about - that was a U-turn, yes, cos you opposed the original measure to pass that extra power across to the Bank of England - but now you've decided you'll go further.

David Willetts:

Well, what we've said.

David Frost:

Well, there have been quite a lot of U-turns, actually, haven't there? The tax guarantee, the increase in fuel prices, and so on.

David Willetts:

Well, what we have done as a party, indeed, when there has been a real concern out there, we have responded to it. And as we sit on the Opposition benches, seeing what the government is doing, we reflect and we learn and we respond. And one thing we saw when they brought in the independence of the Bank of England, is that it wasn't proper independence - it was a fudge, a typical Labour fudge, and we've said look, it IS better, if at all possible, that the Bank of England hold down inflation by not having political interference -it can be done in a better way than it is at the moment.

David Frost:

Is your aim, still as it was among fiscal conservatives before, to get in fact the level of public spending down from close to 40% to the dream target of 30%?

David Willetts:

We haven't fixed a figure for what you've called a "dream target"..but what we have said, is we think as the economy grows, you can have public spending growing, but by less than the economy as a whole, so that public spending takes a smaller and smaller share of national income, and we think that that's what consumers and voters should expect from any large organisation. A government that said the only way it could deliver good quality public services was by perpetually taking a higher and higher proportion of the national income to spend, wouldn't be a very well run government - but that's, I'm, afraid, what this government has been doing, They've been putting up public spending even more rapidly than the economy has been growing - we want it to grow, but grow more slowly than the economy as a whole.

David Frost:

In terms of pensions, your area Michael Portillo is reported to have said in Harrogate yesterday, in a q+a session, after his speech, that there could be a problem in meeting the commitment to current pensioners. He said, quote, "Well you're perfectly right - that if people chose to take the option to move out of paying into the national insurance fund, then there would not be as much money to pay current pensioners - so we have to fill the pump. And we can do that by a variety of ways, for a start by selling gilts and so on." But I mean, that means substantial borrowing is going to be needed in some shape or form - yep?

David Willetts:

No, what we've said is that obviously, first of all, we're going to honour our pledges to existing pensioners, in fact we've announced what our uprating would be for existing pensioners next year, which would be a bigger and better uprating than Labour have promised. We particularly want to give more help to the poorer pensioners, who tend to be the older ones, who are over 75. What we're talking about here is a policy for the next generation, for younger people, if they wish, who are at the moment, don't have the opportunity to build up a real fund, and we think if in the long-term, people want to have a real fund, instead of depending on paper promises from politicians, then they might in the future be more prosperous. Now, how we would finance that is something on which we've been consulting the experts. But we could indeed finance it - one way is by issuing a new form of liability, issuing gilts, instead of the liability the govt's got, the promise to pay the pensions.

David Frost:

And David, will your manifesto, it'll scrap the winter fuel payment and the free TV licence, in order for them to be paid as part of the basic state pension - is that still the policy?

David Willetts:

No, this is where we HAVE changed our policy, and we were right to change our policy - because what we found increasingly was that pensioners were being scared by Labour who were saying you're going to lose the Winter fuel payment, and they weren't adding the bit, that of course all that money's going to the basic pension, so what we've done, is we've said this should be a matter of choice, and we're saying that if pensioners want to keep their winter fuel payment, if they want to keep the free TV licence, they should be free to do so - and if they wish instead to choose to have that money consolidated into a higher basic pension, they can do that. So we're offering pensioners choice, and we're also offering the pensioners over 75 a higher uprating, and remember we're going to take a million pensioners with modest incomes out of income tax altogether. We think it's outrageous that pensioners with only 6 or 7 thousand pounds a year are nevertheless trapped in the complexity of income tax.

David Frost:

David, I still don't fully understand, and a lot of people have written in and so on, in the Married Couples Allowance, which will affect presently one sixth of couples they say, um, what happens, what happens under that policy with people who are married, but deserted by their spouse? Or widows? Or single people who've never married, but do have a child under eleven?

David Willetts:

What we've said is that when you're married, and if there is a partner in the marriage who is not using up his or her personal tax allowance becauise they're not in paid work, they should be able to transfer that to a partner who does have paid income, and we've said they should be able to do that when the children are under eleven, or when there's a disabled relative, that's been cared for in the home, cos we think that's a time when families particularly need help. Now, the only way you can do that is when people make a public commitment to marriage, and to each other. Because you can't just have any two individuals turning up at the tax office, and saying one of us would like to give our tax allowance to the other person. So you can only do it in practice for a married couple. I also think, and let's face it that , marriage, all the evidence shows that a married couple is the best, if at all possible, the best way of bringing up children, but we're going to help all families aswell.

David Frost:

Yeah, but what about deserted wives, or deserted husbands, indeed, or widows, or what about the other categories. You're not going to do it for single parents, it's a pro-marriage measure, and an anti-single people measure.

David Willetts:

It's not, we're not anti-anything, what we're saying is that we want to help people within the situation, where they're married, and there's a child under eleven, and they, it's often the time when the financial pressure is at the greatest. But we've announced other policies aswell, David. We've announced help for all families with children under five, by saying the children's tax credit should be more generous for them, because we know that when the first child is born, when there is a young child in the family, it's when the families are under the greatest pressure, and we've also announced extra help for widows.

David Frost:

We've just time for one other question Willim Hague it's reported, is going to talk today about how Britain under Labour, if people are going to be feeling they're living in a "foreign land" - people don't feel they're living in a foreign land, do they? That's scare tactics, isn't it?

David Willetts:

No, it's a very important question about what sort of country we live in, and what sort of country we would want to become. And the thing that makes me a conservative above all, is a sort of picture of what our country could be - a free country, a strong society, people having responsibilities to their fellow citizens, so that they don't just discharge through the State. And as conservatives, we have a vision of what our country could be like, and we see this government instead, messing about with the constitution, imposing regulations on business, political correctness on people trying to do their best in the public services, and we say, that's not what our country should be like - we want to go in a different direction.

David Frost:

David, thank you very much for being with us this morning. Much appreciated.

David Willetts:

Thank you, David.

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