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Page last updated at 14:47 GMT, Sunday, 24 May 2009 15:47 UK

Darling transcript

On the Politics Show, Sunday 24 May 2009, Jon Sopel interviewed Chancellor Alistair Darling MP

Alistair Darling MP
Alistair Darling MP

JON SOPEL: I'm joined now in the studio by Alistair Darling, the Chancellor of the Exchequer, welcome to the Politics Show, thanks very much for being with us.

I just want to talk about your own position because the Daily Telegraph reported a couple of weeks back that you flipped your designated second home on four occasions to profit from the additional cost allowance.

Is that correct?

ALISTAIR DARLING: Well, I did move house. I moved to my London flat and then when I became Chancellor, I moved to Downing Street.

After I'd been in Downing Street for a couple of months, you remember it was the time of the Northern Rock, I actually was living in Downing Street virtually full time and I have been since.

And so I changed the designation then. Now, for the sake of completeness, I pay tax on living in Downing Street, all ministers living in ministerial flats do. I pay the Council Tax there.

If you want to be really up to date, from this year, ministers in my position cannot claim any housing costs whatsoever, so I continue to pay tax in Downing Street.

I pay my council tax there, I also pay it in Edinburgh, as well as my other costs. So that's the position.

JON SOPEL: Okay. Thank you for clarifying that. But you claimed four times, claiming two thousand six hundred to cover Stamp Duty on the purchase of a new London flat.

Twelve hundred pounds on legal fees, nine thousand five hundred pounds on furnishings.

ALISTAIR DARLING: Yes. I did and if you look at those rules, you know I'm - people can criticise the provisions that were made just as they could criticise the fact you can today claim up to twenty four thousand pounds to pay purely for your mortgage, which is a pretty hefty sum.

There's no doubt those rules (fluffs) … those House of Common rules were - got out of control and frankly, every one of us me included, have to take our responsibility for that, because every time these things came up for revision, people just looked the other way and we're paying a very, very heavy price for that.

The public are angry, they feel let down and rightly they want to see the thing sorted out and they want to see it sorted out quickly.

JON SOPEL: Isn't it just more embarrassing for you, the Chancellor of the Exchequer who a month ago in his Budget, stood up before the Commons, before the nation and said, "It cannot be right that those who should pay tax are allowed to avoid it," and that's what MPs have been doing.

ALISTAIR DARLING: Well, the whole question is the fact that you have recognize that if you don't live in London and you've a constituency outside, if you live in London there are additional costs.

Now, if you asked me, if you look at all the things that could be claimed, as I say, whether it's a total mortgage of up to with interest of up to twenty four thousand pounds a year, or whether it's the individual items that you're talking about, there is no doubt that the system was far laxer than it should have been.

It should have been tighter, it should have been more rigorously controlled. Sadly, it was only last week at that the House of Commons finally agreed to do that, and it's not surprising that people who, many of whom are struggling to make ends meet, look at this and they say, what on earth is going on.

JON SOPEL: Yeah. And so do you reflect on it, and you've said that the system was too lax and it wasn't right. Do you think that maybe you should pay some of this money back?

ALISTAIR DARLING: Look, look, at all times, I did what I thought was the right thing to do in terms of the House of Commons rules. Now, before you say it, and before everybody else says it, people will say, well you made the rules, the rules weren't tight enough, yes, that's undoubtedly the case.

Now, quite clearly, you know if people have broken the rules or even broken the law, then they have to, they have to deal with the consequences and face the consequences of that. But what I tried to do and you know, I'm, I'm an … (interjection) ….

JON SOPEL: (overlaps)

ALISTAIR DARLING: I accept my full responsibility for everything that the Commons has been doing. I've been a member for over twenty years and as I say, every time we should have tightened it, we didn't.

JON SOPEL: So do you think you should pay some of the money back?

ALISTAIR DARLING: No. I believe that what I did and I say, I'm objected in no different position than someone claiming, you know, as I say, very large sums of money for a very hefty mortgage, you can say that's wrong. You can look at any one of these things.

Now what I have tried to do is I've tried at all times to do what the rules required. If you asked me, were those rules up to the mark, then manifestly they were not.

JON SOPEL: How can Hazel Blears continue to serve in the Cabinet, when the Prime Minister has said what she did was completely unacceptable?

ALISTAIR DARLING: Well, erm, Hazel has, as I understand it paid her Capital Gains Tax that was due on, on her house. And the point that I think the Prime Minister was making was that if Capital Gains Tax is due, then it ought to be paid and we will be bringing forward changes to the system.

We'll be doing that for this year's Finance Bill because quite clearly, it needs to be tightened up. But in respect of all these things, there is no doubt that the system is, was far looser than it should have been, it broke up over a number of years and it should have been sorted long before now and I accept my responsibility for that as much as anybody else.

JON SOPEL: Because people, people are questioning what the moral authority is of this parliament and maybe even this government in the light of all that has come out. It seems pretty questionable to say that you can have a Minister, a senior Minister serving who the Prime Minister thinks has behaved in a completely unacceptable way.

ALISTAIR DARLING: Well what he, what I think he was saying was, that the fact that if Capital Gains Tax was due, it should be paid and that's absolutely right. MPs are in no different position from anyone else. If you were due to pay your tax then you ought to pay your tax. That was the point that he was making.

JON SOPEL: Sure. Yeah. But she's still serving in the government, having behaved completely unacceptably.

ALISTAIR DARLING: Well, as I've said, labour the point, that's what the Prime Minister said and you know, the - what he was referring to was if tax is due then it ought to be paid but (interjection) … just to say, you do raise a wide, a wider point on the authority and the trust that if you don't have trust in politicians of whatever party, then that will undermine the democratic process.

All the more reason for us, you know, even you know at this very, very late stage, to sort these things out so that we can begin to restore that trust, which I agree with you, has been very badly damaged.

JON SOPEL: And the argument has often been made by the Tories, by some newspapers that the way to solve this now is to hold an election. And Gordon Brown in the Commons argued that you shouldn't do that because it would bring chaos at a time of recession. You can't really say you can't hold elections because of an economic downturn.

ALISTAIR DARLING: I think the, the next election and there's got to be an election in the next year, will not just turn on questions of restoring trust and sorting out this expenses problem.

It will also turn on some of the big issues that we face and the biggest issue that we face is the economy, the fact that we're in the deepest global downturn in our life time and the next government will need a mandate to take some quite difficult decisions, to make some quite difficult choices. Now, at the moment, all these arguments as you said in your introduction have been rather drowned out. But we'll have to come back to them.

JON SOPEL: Understood. Understood. But you can't say we shouldn't hold an election because it would cause chaos.

ALISTAIR DARLING: The, we'll, we'll have an election when the Prime Minister decides that to go the Queen and ask for a dissolution of parliament, we'll have an election then.

The point that I'm making is though, the election will be about a range of issues, whether it's the expenses question, whether it's trust, whether it's constitutional reform, whether it's the wider economy and the economy will be the biggest, dominant issue for the whole of the next parliament.

JON SOPEL: And we've heard some cautiously optimistic words from you on that subject. Can we say that the worst is over now?

ALISTAIR DARLING: I'm pretty cautious on that. I believe that we will see a return to growth by the turn of the year, I said that in the budget and I haven't changed my judgment on that.

Look, if you look at what is happening at the moment, there is - and look at the forecast, there's a lot of variation there, if you look at what's happening in Europe for example, the German figures, the position in Spain is worrying - we still have some European banks where I think there are still problems that need to be sorted out. There's still problems in America. So there is a lot of uncertainty out there.

But I think a combination of the measures that we have taken and the budget and pre-budget report and other measures to - as well as the fact that most countries started to take action to support their economies last autumn, I think that will make a difference. That makes me confident but I'm also cautious. But you know, I think we've got some way to go yet.

JON SOPEL: I mean we heard the Chief Executive of British Airways say that he can see no green shoots where - you know a big British company published their results on Friday. I just to press on this one question - whether you can give a yes or no answer. Do you think the worse is over yet.

ALISTAIR DARLING: What I'm saying to you is my forecasts are unchanged , we've got a way to go through this year. I think it will turn at the turn of the year, but I think the point that British Airways was making is that if you take something like unemployment, which is a you know, it does have an effect on what people spend on travel and so on, unemployment will continue to rise this year which is why you know, we decided to spend over a billion pounds more to help people if they lose their jobs, get back in to work.

So there are a number of things that even after recovery starts they will, they will be coming through the system, that will need to be dealt with, all the more reason when it comes to the election, people are going to say, well which party has a vision, which party has got policies to support our economy now, which the Tories and David Cameron said it today - clearly, would not do.

I just want to - also, how do we live within our means in the future. Both are important.

JON SOPEL: I just want to ask you a very brief final question. You've talked about one unpopular group of people, let's talk about another, bankers. It seems that RBS, four executives in RBS are to receive five million pounds in bonuses even though we own 70% of the bank. How is that justified?

ALISTAIR DARLING: Look. The policy on bonuses is quite clear that no one who was associated with the failure in the bank will get bonuses. There may be some contractual obligations that RBS is stuck with from the previous regime, but the new management at RBS is very focused on the fact that firstly, the taxpayer owns this bank, secondly, it needs to be restructured and yeah, they've got to retain some staff to do that.

But I'm quite clear, no rewards for failure and we've got to make sure that we continue this process of getting the banking system back on its feet because if credit doesn't start flowing, then that will slow down recovery.

JON SOPEL: I have to stop you there. Thank you very much for being with us.

END OF INTERVIEW


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NB:These transcripts were typed from a recording and not copied from original scripts.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.


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The Politics Show Sunday 31 May 2009 at 12:00 GMT on BBC One.

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