Tony Blair talks to Newsnight - Part 1
Prime Minister do you understand
why people think this country
doesn't work properly?
I understand why people believe
there are problems with parts of
the public services, but I think we
should get it in perspective.
When you say, get it in perspective,
you have had five years?
But let's just look at what is
working extremely well. We have
an economy that is now the
fourth-largest economy in the
world, inflation, interest rates,
unemployment, the lowest they have
been for forty years, we have got
the best-ever primary school
results the country has ever seen,
massive investment in the health
service. It is interesting, when I
was in Germany on Sunday, doing a
television programme there, the
whole thesis of their programme was
what a wonderful country Britain
was, and why can't other countries
be more like us. I'm not saying we
don't have big problems, we do, we
have huge challenges, but we would
make a mistake as a country if we
thought nothing worked.
Do you believe people think the
trains operate better than when
you came to power?
No, I think people understand
there are huge problems with the
transport network. There again, I
think it is quite important people
realise part of the reason for.
That it is not just under-investment
for a long period of time, it is we
have since 1997, 20% more rail
passengers, 20% more people on
the roads, and 20% more on the
London Underground. You have
a system coping with cumulative
under-investment and a huge
increase in usage.
But your own Transport Secretary
says it's got worse since you came
He's pointing out the fact that
when Hatfield occurred we realised
there were huge problems with the
fundamental infrastructure, that's
why we have all the programmes for
change and investment there. Again,
I think it's important to realise
that this will take time to put
right, but the investment is there,
it's set aside over a number of
But you had every opportunity to
get on with this the moment you
came into office, you had to wait
two-and-a-half years before we even
saw a Transport Bill.
When we came into office we
said two things, first of all we
would keep to tight spending
limits, because we had to get rid of
the huge debt that we inherited. I
was paying out more on the interest
payments in national debt than was
spending on the whole of the UK
school system. So we had to keep
very tight spending limits for two
years, then, I didn't actually say
at the time, education was our
number one priority. The first bit
of big investment went into
You said before the 1997 election,
"I want people to look at the
condition of Britain after five
years of a new Labour Government
and say they have changed things
for the better." In transport you
accept you have not done that?
No, I accept that we have made
certain changes and improvements
and I accept the overall situation
for the reasons I have given.
Stephen Byers says the railways are
worse now than when you came to
Well, as I say what is he is
pointing out is, that post-Hatfield
we had to put the whole system
through a huge change
programme, because we had to renew
the track literally in every single
part of the country.
Peter Hain says they are the worst
railways in Europe.
Look, I'm not sitting here telling
you the transport system is great,
that would be an absurd thing to
say. What I am saying to you is,
sure, you can look at transport and
say that is one area where the
Government has to do a lot more
over the next few years, I agree
with that. If you are talking about
the condition of Britain overall, I
think you would have to say this
country is stronger economically,
fairer and in terms of our
education system, and increasingly
in terms of our health system,
Specifically on railways, when you
look at this latest accident, this
tragedy at Potters Bar, when you
have a situation where Railtrack
are unable to discover who was
looking after the bolts which
secured the points, don't you think
this fragmentation has to come to
That's precisely the reason we took
the measures we did and putting in
place the Strategic Rail Authority,
that helps with that programme
of reducing the fragmentation.
I should say to you about the
particular incident, we don't yet
know the full facts, we have an
interim report from the Health and
Safety Executive, we don't have the
full report, it is unwise to
speculate until we have it.
We haven't even implemented the
recommendations on from the
Cullen Report on the contractors.
We are implementing them.
They haven't been yet?
Sure, but you have to undertake
this change in the industry at pace
the industry can stand. Let's short
cut it, I'm not sitting here
telling you the railway system is
as it should be, it's not. I'm
totally open about that. I am
saying to you in the public service
reform change programme overall,
there is a lot to be proud of, as
well as acknowledging there are
We will look at some of the other
areas shortly, but to clear up this
question of Railtrack, clearly the
railways in this country are in a
terrible state, you would obviously
accept that. When John Armitt of
Railtrack says he needs £6 billion,
will you make it available to him?
We will make available what is
promised under the transport plan.
He says an extra £6 billion.
We have to see what money we can
put forward for transport when we
come to the Comprehensive Spending
Review, we are pledged already to
the ten-year plan. Let me just make
one point to you, there was a huge
problem as a result of
privatisation. Everybody accepts
now the fragmentation of the
railway system ended up in a
situation where there was just an
insufficiency of co-ordination. We
are putting that right, but it will
take time to put that right.
But Prime Minister, before the last
election, John Prescott was talking
about a publicly-owned and
publicly-accountable railway system,
you could have stuck with that, you
chose not to.
It's true we chose not to
re-nationalise the railway.
Do you regret changing your mind?
We didn't change your mind, we
made clear we weren't taking
Railtrack back into public ownership.
What we have now got is a situation
where I think if we are able to get
it out of administration in circumstances
where it is operating as a commercial
entity, but without the interests
of the shareholders coming before
the interests of the passengers,
together with the changes we are
making in the Strategic Rail Authority,
and I think most people can see that
working a lot better than before, I
think we will make progress.
There's no point in trying to
pretend it isn't going to take a
lot of time and money over many
Do you honestly believe that
Stephen Byers is the man to
supervise that change?
Well, people attack him for all
sorts of reasons, but if you look
at the three key decisions that he
has taken, I think they have been
the right decisions. Railtrack
couldn't go on as it is. He put new
management into Railtrack, that
actually is, I think, a lot more
successful than the previous
management. And, in respect of
the Strategic Rail Authority, we have
in Richard Bowker somebody who
is making a decision. There are all
decisions Steve took.
He can't even control his own press
We can go back into all the ins
and outs of what happened in the
transport office. I think it is
more important that is he is taking
strategic decisions in the right
So when he says he will be
Transport Secretary by the time of
the next election, you agree with
that, do you?
I never comment on re-shuffles.
He seems to think he will still be
Well, I never do, so. You can sit
here and put the question any
number of different ways, but I
You have confidence in him?
Yes, of course I do. The reason
why I say to you that if people are
being fair to him, they would judge
him on the decisions he has made,
in respect of those big decisions I
think he has made the right ones.
Let's look at another area of the
public services. Why did it take
you five years to wake up to the
fact that the NHS needed a massive
injection of cash?
We didn't. We put extra cash over
and above the Conservative spending
plans from the beginning.
But Prime Minister, during your
first term in office, you chose to
cut income tax, the basic rate by
1 penny, that cost, 1p, that cost
£5.5 billion. Do you have any idea
how many hip replacements could
have been funded by that?
You are forgetting we also took
other measures, like, for example,
abolishing MIRAS, it was important
that people were compensated for
those. In respect of the health
service, in the Comprehensive
Spending Review of the year 2000,
we put a huge additional sum of
money into the National Health
Service. That¿s why now, if you look
at the health service, virtually
every one of the indicators on
waiting times and lists is moving
in the right direction.
That was a choice you could have
made, you could have spent that
money on the health service, you
chose to use it to cut taxes?
No, but as I say to you, if you
look overall, it is not as if we
have cut the burden of taxation
every year. Some years it has been
down, some years up on the previous
years. However, we had to pursue a
balanced approach, we actually did
get substantial additional sums
going into the health service. I
want to make another point. Money
alone will not cure the health
service. Therefore, we wanted to
make sure that we had in place a
proper health service reform plan,
which we articulated in July 2000.
So any additional moneys we are
putting in, with a big investment
coming in now, would be properly
I want to take you back to the
critical decision that you made.
After the election you said, in
October, you didn't believe the
public are any longer fooled by the
notion of short-term tax cuts at
the expense of long-term investment.
Did you believe that before the
No, which is why we made it a
major part of our election campaign.
This is a curious thing, because
when we talked at the time of the
last election, you said that you
were not going to make any
commitments about national
insurance contributions, I said,
"Wouldn't any reasonable person
conclude that you were planning to
raise national insurance?" and you
said "No, they should not do that."
Do you regret misleading people?
I didn't mislead you, I have
actually read the transcript very
carefully indeed. You were trying
to get me to commit myself to
ruling out national insurance
increases, and I refused to do so.
But at the time of the election we
didn't have plans to increase
national insurance or any other tax.
What I said to you in the course of
the interview, continually, was you
will have to wait for the budget.
That's exactly what happened.
This was a decision not made before
Of course it wasn't made before the
election. What we had done back in
the March, we had commissioned the
Wanless report, on the National
Health Service, that report then
came out. The interim report in
November, the full report in April,
what that said is that this is the
additional sum of money you need
for the health service, in the
future, because of all the
pressures upon it. We came to the
decision that the fairest and best
way of doing that was through
Prime Minister, The word sophistry
springs to mind.
I don't think it should, because
what you were trying to get me
to do during the course of the
election interview was rule out
national insurance, I refused to do
so. If you remember, the very self
same people who accused us of
breaking the promise, were the
very same people who prior to the
election said they had made no
promises on these things, they have
only made promises on the basic and
top rate of income tax. We can go
through it forever and a day, but
we did get more money into the
health service. Where I take issue
with your premise, we did get more
money into the health service
before the last election, we did it
then through reductions in
unemployment and reductions in
interest payments on the debt. Now
if we want, not just a substantial
increase over the next two or three
years, but over the next five or
six or seven years, then we have to
do it by raising this money out of
general taxation. That is because
the health service is the fairest
way of getting decent health care
to people on the basis of need, not
ability to pay.
You are honestly telling us that at
the time of the general election
you had not anticipated that that
would be necessary?
No we hadn't worked out any plans
at all. We said we would want to
increase health service expenditure,
but we didn't have the Wanless
Report at the time of the election.
I spend hours on television
programmes saying to people the
specific pledges I have made on tax
are these, we are not making any
others. In the transcript I say to
you there are 240, 250 different
tax reliefs or tax hikes and I'm
not getting into the point of
writing a budget now.
By common consensus there is a
crisis of confidence in politics, I
wonder when you stand back and
you look at how you have to justify
what was or wasn't a commitment,
do you understand why people say
why can't you just be frank with us?
Because I was frank with you at the
time. You asked me to rule it out,
I wouldn't. Did I have plan in my
back pocket for the Budget, I
didn't, we didn't have the Wanless
report and we didn't know how much
money would be necessary or we
didn't at that time any have idea
whether growth in the economy might
be strong enough to obviate the
need for tax increases. The point
you are making which is that I knew
perfectly well at the time that I
would raise national insurance is
simply not right. We could have,
for example, had it not been for
the 11th of September, other
expenditures we had to make and
growth levels in the world economy
been higher, we could have been in
the situation where we didn't have
to raise tax, but we came to the
point in November where it was
clear we needed substantial
additional sums, and we weren't
going to get that out of growth and
would have to raise it through tax.
And the Treasury hadn't told you
that, the Health Secretary hadn't
had conversations with you on that
subject before the election?
No, because before the election we
wouldn't have been in the position
to say, we might have been in the
same position as 2000, we were able
to bring in 6% real terms increases
for the health service.
He should have told you shouldn't
No, for the reasons I have just
given to you. You wouldn't have
been able to know either the
precise sums of money needed,
or what the revenues that the
Exchequer would have at the time.
I actually don't believe that most
people are in the position you say.
I think what most people are saying
to us is OK, we accept that, if you
want to fund the health service,
not just over the next three years
but the next six or seven, we
accept we will have to pay for more
it, but make sure the money is used
properly. I think that's what
people are saying to me.
Let's assume you are right and
let's assume this massive injection
of cash into the health service
does cause a wholesale improvement.
How will we judge you have
succeeded, will there be no waiting
No we have set out, we couldn't be
clearer on this. We have set out a
series of very clear specific
targets. By 2005, there should be a
maximum waiting time of six months.
There are whole series of targets
we have set and things likes cancer
treatment and cardiac treatment,
it's worth just saying to you,
again people often put this to me
as if nothing is happening in the
health service. Talk to people
inside the health service today,
they will tell you there are big
challenges but there are real
improvements taking place.
You are planning to devolve the
spending of money in the health
service to primary care trusts, you
say about 75% of the NHS budget.
But there are so many restrictions
on what doctors can do that
effectively not all of that money,
or very little of that money will
be devolved. What proportion of the
money do you think?
What do you mean by that exactly?
They have to meet all the targets
on, for example, heart disease and
all the other, there are four main
areas of prescription, how much of
the NHS budget do you anticipate
will be actually devolved for GPs
to spend as they see fit?
This is a very important point.
The reason I asked you that is that
actually all of that, the 75% we
are devolving is at their
discretion. It is true, of course,
that there are certain basic
minimum standards that have to be
met, but how they meet them will be
up to them. Let me tell you some of
the things that are happening in
primary care, which is very
exciting at the moment. In some
cases doctors are now performing
minor surgery, they are taking over
the work of consultants. In some
surgeries now, practice nurses are
doing what was formerly done by GPs,
other disciplines within the health
service. There are those doing what
could be performed by other
specialisms, so the system works
more efficiently. You are right to
say they have to meet targets, but
how they meet them will be at their
But national service agreements
agreements will not give them
freedom to spend 75% of the NHS
budget, John Hutton, your Health
Minister, thought it might be 10%,
he said he hoped it would be more
You have to qualify that, they will
have the whole of that budget
devolved, it is true, in the same
way, when a school budget is
devolved, they have to meet certain
requirements of the National
Curriculum. They will have to meet
certain key standards. For example,
now, people with suspected cancer
have to be referred to a cancer
specialist within two weeks. By the
end of the year the treatment has
to then begin within two months.
So, it's true there are those targets,
but the point I'm making to you is
the primary care trusts will have a
very great deal of latitude and we
need to make sure they do have that
in how they meet those targets.
Give as you rough indication of
what proportion it might be?
I have said to you that the 75% is
You have also conceded they have
to meet all these national service
How they do that. You might as well
say when you say they are devolving
90% of the school budget, they are
not really devolved because of the
National Curriculum. But how the
school then decides it has to
organise staff and pupils and
buildings is up to it.
Do you know how much money,
what proportion of the NHS budget
they will have to spend as they see
I've just said, 75% is devolved, in
so far is, what you're saying to me
is once they have met all the
targets how much discretionary
money is left over?
The point I'm making is you can't
look at it simply like that because
how they meet these targets...
You can't give us a ball park
I can't because it is not sensible
to do that. That I have done two
huge groups of PCTs over the past
few weeks, talking to doctors,
talking to PCT managers, the answer
is, yes, they are very anxious to
squeeze as much of the
discretionary funding as they can.
But there is no a fixed percentage
that will be discretionary, that's
the point I'm making. If you asked
for a ball park figure, it wouldn't
be an accurate one.
Because you don't know.
Because for the reasons I'm giving
If you do know, you could tell us.
I'm not accepting the premise.
You are saying there is these targets,
how they meet the targets is a
specific allocated part of their
budget. Wrong, that is not the case.
They have 75% devolved to them, yes
they have to meet those targets,
but how they meet those targets is
also up to them. So they may decide,
for example, one PCT may decide to
spend this money by employing
physiotherapists to help them with
particular problems they have with
their patients, or they may, for
example, decide that they will have
GPs performing certain minor types
of surgery. So you can't actually
say all the money that is necessary
to meet the targets is dedicated in
some specific way. It doesn't work
Can we talk a little bit about
crime, do you recognise these words.
Friday night is made impossible for
people, old people afraid to live
in their own home, never mind out
in the streets, young people often
intimidated by other young people.
These things are wholly
unacceptable. That was you speaking
in 1993. Which part of that
description isn't even more true
There is a huge problem, which is
why we are tackling it.
When you said street crime would
have been dealt with by September,
what do you really mean?
I didn't say that, I said street
crime would have been under control
in London by the end of September.
What I mean by that is instead of
the trend being upwards it is
downwards. I didn't say we would
eliminate all street crime, that
would be a tall order.
Eliminating a rise is not the same
as bringing it under control.
I think it is, if the trend is down
So all you meant was that it
wouldn't be increasing?
No, I mean more than that. Look,
at the moment, in fact not actually
at the moment, because as a result
of what the Metropolitan Police are
doing, they are actually managing
to get street crime down. But it's
been a huge problem, this, there's
been an explosion just in these
past couple of years, in particular
the street robberies. It is often
committed by groups of young people,
some of the young people are 12-16
years old, it is a particular
phenomena, not limited to this
country, in many other countries
too. We have taken a whole series
of measures and the aim is, by the
end of September, not just in the
Metropolitan Police area, but other
areas as well, that instead of this
being an escalating upward trend
of street crime, it is going back
You think that is what people
thought you meant when you said it
would be under control, merely that
it would be stopping rising?
I'm not saying it will be stopping
rising, I'm saying it will be
What about drugs, your target on
drugs was to cut class A drug use
by 50% by 2008, instead we have
seen an exponential rise. Heroin,
cocaine, 400% in crack cocaine.
Are you prepared to concede that
policy has not worked?
I would certainly be prepared to
concede that drugs policy, not
just for this country, but for any
modern country is not working in
the way it should at the moment.
But you came to power on tough
on crime, tough on the causes of
Crime has fallen since we came to
power. In terms of what we have
done on the causes of crime, you
take youth unemployment, for
example, we took 350,000 young
people off benefit into work. There
are only 4,500 long-term youth
unemployed at the moment, the sure
start programme, investment in
education, the urban city
regeneration programme. Overall,
burglary, car crime, overall crime
is down, what we have is a
particular problem with this
anti-social behaviour and street
You concede that the progress so
far has not been adequate?
We have a lot more to do, I concede
that without a shadow of a doubt.
Are you having a wholesale re-think
of your drugs policy?
No, but what we are doing is trying
to make sure, in particular, that
where people are engaged in crime,
where they are persistent offenders
that they get a choice, as quickly
as we can, which is a choice either
to take drug rehabilitation
treatment or they are liable to go
to custody, into prison. Already
with these drug treatment testing
orders, they have been very
successful, about 5,500 to 6,000 of
them. For example, there is a young
man in Oxford that went on one of
these drug treatment testing orders,
vehicle crime in the city centre of
Oxford was cut by 59% when he had
the chance to go into residential
rehabilitation rather than back out
on the street again. I'm trying to
look at now is to get to a
situation where if somebody is up
for bail and they are a persistent
offender and they have a drug
problem, then again it is made a
measure of whether they should get
bail or not as to whether they are
prepared to accept drug treatment.
You are not considering
decriminalising any drugs?
Overall when you look at the
question of public services, I
think many people would say, in all
fairness, in some areas of course
things have got better, you have
also conceded that in some areas
they have not really got better and
there is an awfully long way to go.
How long is it going to take?
I think, if you are looking at the
health service, we have a ten-year
plan for that, I don't suppose the
work is ever done. I think your
summary is pretty fair in the sense
that I would say that in education
we have done a lot, now.
Are you happy with the state of
secondary education in this
Of course not. I doubt if you were
to ask someone in 30, 40 years time,
not me, I may say, they would say
they are not satisfied. It is
interesting that the BBC, I don't
think you did that in the summaries
on television, but on the website
you did an analysis of Labour's
pledges, 80% were met. All five on
the pledge card have been met.
Does that mean to say the world is
perfect, no. I think this country
is getting better. If you look at
the economy, unemployment,
education, health, it's not just
better, it's also fairer. It is
more just to have a health care
system based on general taxation
and need, not ability to pay. It is
more just for the hundreds of
thousands of young kids getting
better education now than five
years ago, that is social justice
in action. I'm not going to sit
here and pretend the whole world
has changed in five years. I don't
suppose everyone could have thought
that. If I had said to you five
years ago in our election interview
that you would have a
million-and-a-quarter more jobs,
the lowest interest rates and
inflation the country has had for
40 years, the best education
results it has had ever in its
history and the National Health
Service moving in the right
direction not the wrong direction,
with young people finally given
some chance of getting off those
skivey schemes on the dole and back
to work. If I made those promises
then you would have told me I was
crackers and couldn't deliver it,
we have delivered that, we have a
massive amount to do.
Prime Minister, thank you.
This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.