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Breakfast with Frost
Michael Howard MP, shadow chancellor
Michael Howard MP, shadow chancellor

Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST: Well Gordon Brown will deliver his budget on Wednesday. Taxes have gone up, of course, National Insurance increases come into force today, but the Chancellor says the pain will be worth it for the gain of better public services. The Tories are against the tax increases, but will they actually reverse them if and when they come to power. With me now is the Shadow Chancellor, Michael Howard, and Michael good morning.

MICHAEL HOWARD: Good morning David.

DAVID FROST: And actually there is good news for the Chancellor today on the personal front.

MICHAEL HOWARD: Excellent news, great news, particularly of course after last year's tragedy and I'm sure everyone will wish them well.

DAVID FROST: Absolutely right. What are you most fearing, what are you going to get most angry about this week? Is it going to be the 1p, although that's a fait accompli now, or is it pensions or is it the cost of the war? What do you suspect you'll lead with?

MICHAEL HOWARD: It's certainly not the cost of the war. The trouble is that there are now a series of concerns right across the board. People are feeling very anxious, anxious about their futures, anxious about their jobs, anxious about their pensions. Business is complaining bitterly about the burdens of red tape and tax which have led, for example, to business investment falling more sharply than its ever fallen since records began, with only one exception - business profitability at a ten year low. And we had some very extraordinary figures about pensions - if you've been saving for a pension, and if you'd retired in 1997, you'd get exactly double the pension that you'd get if on the same level of savings you retired today. That's a frightening statistic, and frightening, of course, for the people who find themselves in that position.

DAVID FROST: And at the same time, obviously, if Gordon Brown were here this morning, he would say yes Mr Howard you've just gone through the gloom list but the happiness list is much more important - lowest inflation, low unemployment, low interest rates, no recession like 18 out of 20 other industrialised countries - the good news outweighs the bad.

MICHAEL HOWARD: Well is it going to continue, that's the question. I don't suppose people are interested in arguments about who, who gets the credit and who gets the blame. I would say that this government is still benefiting from the legacy it inherited. But today, new taxes are coming into force and the Institute of Fiscal Studies says that nearly five million people, as a result of the changes introduced today, are going to find themselves more than 10 a week worse off. I'm not sure how many people realise that yet, they will when they ...

DAVID FROST: Their pay packets will be smaller, which is not a normal trend.

MICHAEL HOWARD: That's, that's right. That's the amount that is being taken, taken off, and that's actually without taking into account the very big increases in council tax that most people are going to see when they get their bills - and many have already got their bills. So we're seeing people having to pay a lot more in tax and the trouble is they're not really seeing as a result of and in return the improvements we all want to see. This is -

DAVID FROST: But then again there were some figures out this week that in the last year the NHS, 17,000 more nurses, more than a thousand more consultants, 400 more GPs - that's, that's tangible.

MICHAEL HOWARD: Well it - what's tangible is what comes out or what people actually get out of all this. And in fact in the last two years, during the period when spending on the NHS has gone up by 22 per cent in real terms, after taking account of inflation, the number of hospital treatments has barely risen at all. It's gone up by under two per cent at a time when spending on the NHS has gone up by 22 per cent because the trouble is that Gordon Brown said, five years ago, he said there won't be an extra penny without reform, and we haven't seen the reform, we need real reform, we need to show that there is a more effective way in providing our public services, of health and education, law and order and all the rest of them - we had figures last week which showed that, that crime went up last year by nearly eight per cent after during our last four years in government, as you know, it came down.

DAVID FROST: But where I'm confused, and people are confused, is first of all, would you hope, when you came to power, to repeal the 1p on National Insurance or would you reluctantly stick with it.

MICHAEL HOWARD: Well we certainly think it was a mistake. We voted against it, we opposed it and we think it should be scrapped now. I would love to repeal it after the next election, if I'm in a position to do that, of course I'll do it. But I don't know, nobody knows, in fairness, we're over two years at least, I suppose, away from the next election. Nobody knows by how much more the present government will have borrowed, how much more they'll have increased taxes, what sort of a state our finances will be in at that time. If I can I'd love to. Whether I'll be able to, I can't say.

DAVID FROST: Of course it comes back to the old priority point, doesn't it, about tax cuts versus public services and that famous quote of Iain Duncan Smith on 14 December last year, they're looking at a target of 20 per cent savings across the board in government spending - that's what we're looking at it and we're becoming to come up with figures that will build towards that total. You have said in one quote that in fact public services come before tax cuts, what do you put first out of those two?

MICHAEL HOWARD: We put public services first, but one of the ways in which you get better public services is to save money on waste. To save money that isn't being spent effectively - that's what Iain was talking about. And if you look at the way in which public services are provided, you will find that in other countries they do things very much better. It's outrageous that in this country people actually die from diseases and illnesses from which they wouldn't die if they lived in France or Germany or other countries. We've got to put a stop to that. And we can do that by learning lessons from the way in which they do things and from putting those lessons into effect, from bringing into play real reform of our public services, so that we can give the people of this country what they need and deserve. That's our top priority.

DAVID FROST: And at the same time you had a bouquet this week about you from the new intake of MPs who say that you're the only big beast around and that you'll be perfect as the next leader. Let me preface this question with the fact that the following answers are banned. You cannot say there's no vacancy at the moment. Or you cannot say that Iain's going to lead us into victory in the next election, I shall be happy to serve in whatever role he deems fit for me at least - you can't say any of those but, but, and you said you didn't enjoy the experience last time - you wouldn't rule it out 100 per cent, would you?


DAVID FROST: Absolutely a hundred per cent.

MICHAEL HOWARD: Yes, I would. I won't give any of the answers you've banned but I will say what is true which is Iain is doing a very good job leading the party, I believe that he will lead us into the next election, I hope we win it, and I'm very happy to serve him as long as he wants me to do that.

DAVID FROST: And you absolutely rule it out, leadership a hundred percent.

MICHAEL HOWARD: I've said many times I'm not going to run for the leadership of the Conservative Party ...

DAVID FROST: Sandra would make a lovely first lady, you know.

MICHAEL HOWARD: Well how very kind, I hope she's watching, I suspect she is.

DAVID FROST: Thank you very much indeed. Well let's see whether the budget this week turns out the way that Michael predicts there.


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