On the Politics Show, Sunday 07 October 2007, Jon Sopel interviewed the Chancellor, Alistair Darling.
JON SOPEL: I am now joined now by the Chancellor, Alistair Darling. Mr Darling, thank you very much for being with us. A lot of hyperbole, a lot of angry headlines, furious press, and you've heard the comments of your political opponents, what is your judgment of how this past week has been for Gordon Brown.
ALISTAIR DARLING: Well, of course there's been a lot of speculation about whether or not there would be an election, since the time that Gordon Brown became Prime Minister. My sense is, and you know, I think this is the Prime Minister's sense too, is that people in the country, away from Westminster, away from the party conferences, think that what they actually want us to do is to get on with the job of governing, to show what we can do over the next couple of years or so, and crucially, especially as we're entering a time where there may be some economic turbulence, they're looking for the government to take the right decisions, not make any irresponsible promises, to make sure that we can meet the undoubted challenges that we'll face over that period, and also meet their own aspirations in terms of Education, Housing, Jobs - that's what they want us to do I think.
JON SOPEL: Okay, so you've made that point, now go back to my question. How do you assess how this week has been for Gordon Brown.
ALISTAIR DARLING: My judgment is, on all these things, is you have to ask yourself what will it look like in three months, six months time. I've never got excited about opinion polls that put us eleven points ahead, any more than I would get depressed if I see an opinion poll going the other way. As I say...
JON SOPEL: How has this been for Gordon Brown, this week.
ALISTAIR DARLING: Well, Gordon has, who - I know this, because he and I have been very - working very closely together over the last period, we've been concentrating on precisely the issues that bother people. I've got the spending review which I'm announcing on Tuesday, I've been dealing with the problems in relation to Northern Rock. He's been dealing with...(interjection)
JON SOPEL: Do you think he's been damaged by this.
ALISTAIR DARLING: No, I don't. I, I, I think if you look and you know, I think most people tend to, who are not intimately involved in it, will tend to have a view of how the government is doing. They compare that to the opposition and I think what they look to us to do is to deal with things that come up unexpectedly, and deal with that competently, but crucially...(interjection)
JON SOPEL: Would you say this has been a good week for Gordon Brown.
ALISTAIR DARLING: Well I, as I say to you, I, I think that when people look back at this, you know, over the next few months, I think they will rather have in front of their minds, which of the two political parties, actually was more, more capable of dealing with the problems that we've faced, particularly, as I say, we are entering a difficult period (interjection )
JON SOPEL: And you've made that point.
ALISTAIR DARLING: ...some difficult decisions are going to have to be taken.
JON SOPEL: Then why did you run up all the talk of an election.
ALISTAIR DARLING: Well look, there's been lots of, there's been lots of... (interjection)
JON SOPEL: The people closest to Gordon Brown, have on a daily basis, been telling journalists everywhere, that there is going to be an election on November 1st.
ALISTAIR DARLING: Well look. If you go round any party conference, you will find out, you'll find somebody to back up any proposition that you want to make. I have always taken the view, you know I'm notoriously cautious... (interjection)
JON SOPEL: And you were against it. And you were against it but other younger people were in support of it.
ALISTAIR DARLING: But you, (fluffs), George Osborne you've just been talking to - two weeks ago, he'd have been terrified of an election. Now we're not having one of course he says he wants one. But look, the big issue that people are going to be asking themselves is, which political party, you know, is putting forward the answer to some difficult problems that we'll face, in particular, you could take you know, that George Osborne is, you know he's... (interjection)
JON SOPEL: I'm trying to ask you some very direct questions and I'm struggling to get a direct answer. Let me ask you this one then... (interjection)
ALISTAIR DARLING: I disagree with the premise of what you're putting the question...
JON SOPEL: Oh, you don't think it's been damaging at all then.
ALISTAIR DARLING: I think that when you look back, people will form a judgment on our government, they'll compare it with the Tories, and particularly you know, you've been talking about the conference season.
JON SOPEL: Okay.
ALISTAIR DARLING: George Osborne made his promise on inheritance tax. Yes, of course if you offer something that looks like something free, they'll say that looks interesting. When you ask him - he's made a specific promise, how is he expected to pay for it, and he doesn't have the money to pay for it.
Then that raises some big fundamental questions about the instability that will be caused in the economy, if you make promises on tax that you can't afford to pay for. So I think those issues actually, will matter more to people than speculation about an election.
JON SOPEL: Who is responsible for all that speculation about the election timing.
ALISTAIR DARLING: Well, look, there's been speculation... (interjection)
JON SOPEL: I mean has Gordon Brown been badly advised do you think.
ALISTAIR DARLING: Look, there's been speculation since er the summer time. What I'm saying to you is that if you look back at these things, and all politics, you know, at times - you know, I think you do need to ask yourself, what is it really matters to people. And what matters to people is that whether or not the government can meet their aspirations in housing, making sure that we've got jobs in the future in the face of the changes that are taking place. (interjection)...
JON SOPEL: But you've made... (interjection)
ALISTAIR DARLING: I think those are actually far more important than what is almost annual speculation or the sort of speculation... (interjection)
JON SOPEL: No, no, no. Explain - sorry, I'm just struggling to understand this because explain to me why there was so much interest in an election. You've made a very persuasive argument why there should not have been, there should not be an election. Why did it ever take flight.
ALISTAIR DARLING: Because it is inevitable when you have a change of Prime Minister, when you have opinion polls that changed over the summer...(interjection)
JON SOPEL: Was it as simple as that. (interjection)
ALISTAIR DARLING: Of course you get speculation. Of course you - as you chaps do, you know, it is bread and butter for you lot.
JON SOPEL: Not us chaps, not us chaps, it was your chaps, it was members of the Cabinet.
ALISTAIR DARLING: Jon, you will all - as I say, I defy anyone to go to a party conference and not find someone to back up whatever proposition they want to put forward. I'm more interested in the big issues. You know, on Tuesday, when I set out the pre-budget report, when I set out the state of our economy, which is strong, stable, able to withstand some of the difficulties that we and other countries are going to face over the next few years, and also, I will be drawing attention to the fact that yes, the Tories have made these extravagant promises, two big ones over the last five days: they can't pay for either of them. That would mean more borrowing, it would mean increased taxation elsewhere or else they're going to have to start cutting public services like Health and Education.
JON SOPEL: Okay, let's talk... (interjection)
ALISTAIR DARLING: Those are the issues that actually will bother people, I think in the months to come.
JON SOPEL: Okay, let's talk about the inheritance tax proposal, which seems to have been extraordinarily popular. Is it time that you looked at this proposal.
ALISTAIR DARLING: Well, in the last ten years, we have increased the threshold for inheritance tax, way over inflation, in fact George Osborne is right about this, Gordon Brown did increase it for the next three years and all taxes are kept under review, but what the difference is that if you go to somebody and say, look I'm prepared to give away lots of money, people say, well that sounds very nice, the second question though is, how are you going to pay for it. And the problem the Tories have got is they've made a specific promise.
They say they're going to get money from taxing non domicile people. They've inflated the numbers and when you ask them, where's their source of the information as to how many non domicile people, it turns out, it's in an article in a Sunday newspaper. That's no way to put economic policy.
JON SOPEL: It was the only tax rate in March where they were set out for the next three years to 2010. Will you look at that again, in view of the popular concern there is.
ALISTAIR DARLING: I, every pre-budget and every budget, I will look at all tax rates. You'd expect a Chancellor to do that.
JON SOPEL: But these have been set out for the next three years. So you might look at them again.
ALISTAIR DARLING: I will look at all tax rates and you'll have to wait and see what precisely I do across a whole range of measures until Tuesday of this week. What I will not do though is to make promises I can't pay for.
And the problem that the Tories have got is that they do not have the two and a half billion pounds they would need to pay for this and if they get in to that position, you either have to increase borrowing, which puts up interest rates and mortgage rates, or else you have to raise taxes somewhere else, or cut spending.
That's the problem we've got, and that is actually the issue that I relish the fight over the next few months and the next couple of years because there is a big difference between the parties on that.
JON SOPEL: And you've talked about the comprehensive spending review and the pre budget report on Tuesday. Difficult time isn't it. I mean presumably borrowing is going to have to go up, growth is down.
ALISTAIR DARLING: Well, I said last week that if you look at what is happening around the world at the moment, following on the problems in the American housing market, which have now spread right across the world. I think you will find that commentators, the IMF, will downgrade their expectations for growth. Now, what is different in this country is, that we are in a much, much stronger position than many other countries. We withstood problems in the past when the American stock market collapsed at the beginning of this decade. I think we will get through these problems. We're well placed to do that, but this is a period where not only... (interjection)
JON SOPEL: But some downgrading of growth it's fair to say, is to be expected.
ALISTAIR DARLING: It's inevitable that if you look across the world at what is happening in America, in Europe, in Japan, all independent commentators, the IMF are all likely to say, growth is going to be affected.
The key for us though is to take the right decisions, to make sure that we can deal with these problems and if you start making irresponsible promises on tax, if you start promising to spend money when you haven't got the money to meet those commitments, that is the way that you get into the instability and the weakness of the economy, which the Tories had in the early 1990s.
I'm not going to make that mistake, I want to do everything I can to make sure that we can have a strong economy and so meet the aspirations of people in this country. Whether it's on their education for their children, housing, the prospects for jobs in the future.
So these are difficult times and they need a steady hand. They need to be cautious in relation to what we do. But I am confident that we will deal with these problems and we will emerge through this with a strong economy and providing the jobs we need in the future.
JON SOPEL: Alistair Darling, thank you very much indeed...
ALISTAIR DARLING: Thank you.
JON SOPEL: for being with us on the Politics Show.
END OF INTERVIEW WITH ALISTAIR DARLING
Please note BBC Politics Show must be credited if any part of these transcripts are used.
NB:These transcripts were typed from a recording and not copied from original scripts.
Because of the possibility of miss-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.
Let us know what you think.
The Politics Show Sunday 07 October 2007 at 12:00 BST on BBC One.
You can reach the programme by e-mail at the usual address or you can use the form below to e-mail the Politics Show.
You will be returned to the Politics Show website after submitting the form.
Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.