On the Politics Show, Sunday 18 January 2009, Jon Sopel interviewed Tony McNulty Minister for Employment and Welfare and Michael Howard MP.
JON SOPEL: I'm joined now by the Employment and Welfare Minister, Tony McNulty and also by a man who did the same job during the last recession and then went on to become the Conservative Party Leader, Michael Howard. Both of you welcome to the Politics Show. Tony McNulty, so we saw the case of Stephen, what is this Labour Government, going to do for him. There were some interesting specifics about that.
TONY MCNULTY: Yeah, I wish him well with his second interview at Thorntons, by the by. Once he's sorted himself out with Woolies and the administrators and does go on to Job Seeker's Allowance, he will get as much support as possible from Job Centre Plus, which is transformed, compared to the erm, recessions in the '80s and '90s. Now, at thirteen weeks, he'll get support with his mortgage, if still unemployed, rather than thirty nine weeks. We changed that just in January. And we do want to give people as much help and support as possible, rather than the old days where you went down, you signed on and got absolutely nothing.
JON SOPEL: Michael Howard.
MICHAEL HOWARD: Let's not get in to a party political wrangle about this and let's not talk nonsense about what used to be the case because what Tony's just said was very far from the case in the '80s and '90s. But let's talk about specifically what can best be done to help families like the Bewley family, for whom I have the greatest sympathy, but sympathy is not going to get them the help that they really need. What we have to do in this very difficult time is to encourage small businesses to keep going, to make it easier for them to keep going, to make it easier for them to take people on. So David Cameron and George Osborne have proposed very specific targeted measures: a payroll tax reduction for small firms, a Corporation Tax reduction for small firms, a six months VAT holiday for small firms, a much more ambitious loan guarantee scheme than the government have just announced and they announced it many months before, opposed it many months before the government announced it - these are specific measures which would really help employers to get through this terrible crisis and enable them to offer people jobs.
JON SOPEL: I know Tony McNulty is going to want to come in but I just want to pick up with you that everything you stressed there was help you're giving employers. Is there nothing that you can do for employees who've lost their jobs? Because you were talking about, you know, making it easier for people to take people on, but what do you do with someone who's lost their job?
MICHAEL HOWARD: You make it as easy as possible for them to get a new job, that's what they want. They want another job as we've seen. Stephen, is going for an interview at Thorntons, we all hope that second interview was successful and he gets that job. The easier it is for employers to take people on and to keep people on, then the fewer people will lose their jobs. What people want are jobs.
JON SOPEL: Tony McNulty, you've heard there Michael Howard, listing the various different, specific policies that the Conservatives have come up with. Whenever I hear you interviewed you keep saying, well this is a, the Conservatives do nothing approach.
TONY MCNULTY: Each and every one unfunded
MICHAEL HOWARD: No
or so tortuously er, erm, made self-financing as to be fantasy, I'm afraid. Let's go through them. What they're talking about in National Insurance was rooted in unemployment and assumed everyone was unemployed for at least a year, so they could make those savings, they're not.
nearly 80 per cent of people get back into work happily after six months, two and a half billion hole. Fifty billion was going - fifty billion loan credit guarantee was going to be self funding so either it's - the charges and premiums they make small companies, are so large nobody wants them or they take all the business away from the banks. These are, I'm afraid fantasy. We had one day where Mr Cameron was large enough to say, this is bigger than party politics, this really is about all of us. We
MICHAEL HOWARD: First of all you will have noticed Jon, that this is no longer a do-nothing charge. (interjection) The charge is
MICHAEL HOWARD: Let me tell you how they would be funded. The six month of VAT holiday, would be funded by charging interest, so that when the firm is in a position to pay the VAT, after the relief, they would pay interest, which would compensate for the cost of the holiday. The Corporation Tax relief, would be paid for by getting rid of some of the allowances, (interjection)
which over-complicate Corporation Tax at the moment. Each and every one of these measures has been funded. David Cameron and George Osborne have explained exactly how they would be paid.
JON SOPEL: Tony McNulty, unemployment is now I think running at 1.8 million. Is it conceivable that it could reach three million this year?
TONY MCNULTY: I have said and will continue to say, I'm not in the game of making predictions. You can get as many predictions out there from economic analysts as you can from legal opinion of some dodgy lawyers. It's my job is to make sure that my end of the operation, ie what Job Centre Plus can and do for people like Bewley family, delivers and really delivers. One thing I will say clearly, let me say is, if you ask me, have we reached the bottom of this? No, we haven't. Unemployment is a lagging indicator, so the, the figures that come out this Wednesday will be for last December and I do fear that they will still be going in the wrong direction.
JON SOPEL: Let me qualify that statement. Is it near the bottom?
TONY MCNULTY: I don't think it is at the moment. We'll have to wait and see. We learn richly from every month's worth of data. At the moment, it's across all sectors, all geographic areas and all age range. (fluffs)
the rate per month has gone up. But let me say this too, in November
JON SOPEL: So if we're not near the bottom
I was going to answer. I was going to answer. The one indication of whether it's getting close to the bottom or getting, at its worse - will be when the level of unemployment for the group one employed, is static and people are simply being added to, that was the tail end of the last couple of recessions. In November, two hundred and ninety thousand people went on to JSA, but crucially, and people need to understand this, two hundred and twenty came off. There is still that dynamic in the labour market
JON SOPEL: So unemployment is going to get a lot higher.
TONY MCNULTY: I think it's, it's got aways (sic) to go before we reach the bottom. I, I've, I've said that with all candour.
JON SOPEL: Let's just talk about what is happening with the banks as well at the moment because we know that there are all these negotiations going on this weekend. The fact that there's going to be another multi billion pound bail out scheme, doesn't that suggest that the last bail out has failed to work?
TONY MCNULTY: Well we'll see. As you know, that's a matter for the Chancellor to, to, to explore or announce in the coming week. But I don't think people should see it as clearly black and white like that. This, this is the silver bullet and if that doesn't work, we move on. The thirty nine billion did cap - did stabilise the banks in the first instance. And now we do need to use whatever it takes to get to a stage where that liquidity and credit comes through, in addition to what I'm doing at the other end, in terms of a better offer for people at six months unemployment, if they're sadly unemployed for, for that long and giving them a whole range of options.
JON SOPEL: Michael Howard if the Tories were now the government, you could find yourself in the extraordinary position of nationalising banks couldn't you?
MICHAEL HOWARD: Well look, when, as I expect to happen and hope will happen, David Cameron takes over the government, he will have an almighty mess to clear up. But quite honestly, that's what Conservative governments are for, that's what we always do, we inherit a mess from Labour and we clear it up. That's what Winston Churchill did in 1951, it's what Margaret Thatcher did in 1979, that's what a Conservative government is for and I'm sure David Cameron will do it again.
TONY MCNULTY: I'd love to know how Thatcher did it in the '80s and '90s - the two recessions (interjection)
MICHAEL HOWARD: Well she rescued the country - on its knees economically that's
the bookends of the worst
JON SOPEL: I want us to be forward looking. Ken Clarke to the rescue.
MICHAEL HOWARD: Well, I think Ken is a very, very - a very talent politician. I've great admiration for him. Worked with him for many years and he has a great record. He was the author of the golden ecnomic legacy
JON SOPEL: I want a yes or no answer.
MICHAEL HOWARD: Well, I think he would have a - I don't pick the Shadow Cabinet, but I, I think he's a very talented politician
(interjection) with a great deal to contribute in the present economic climate. It's a matter for David whether he's brought back, but he would have a huge amount to contribute
JON SOPEL: Might he do it better than George Osborne?
TONY MCNULTY: Certainly!
MICHAEL HOWARD: Hang on a minute. He, he
(interjection) If he's brought back he wouldn't be there instead of George Osborne. He would be there as well as George Osborne. I think George Osborne is doing an excellent job.
TONY MCNULTY: Michael Howard, John Redwood and Ken Clarke back just to show how bankrupt the current crowd are.
JON SOPEL: There we are. We're going to have to leave it there. Both of you, thank you very much indeed for being with us.
END OF INTERVIEW
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The Politics Show Sunday 18 January 2009 at 1200 GMT on BBC One.
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