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Last Updated: Sunday, 4 December 2005, 10:16 GMT
Tory changes
On Sunday 04 December 2005 Andrew Marr interviewed George Osborne MP, Shadow Chancellor of the Exchequer

Please note "BBC Sunday AM" must be credited if any part of this transcript is used.

George Osborne MP
George Osborne MP, Shadow Chancellor of the Exchequer

ANDREW MARR: Well, from queens of the stage to the new aristocracy of the Tory front benches.

George Osborne, 34, paid-up member of the Notting Hill mob, close ally of David Cameron, Shadow Chancellor, and the man who tomorrow faces Gordon Brown in what ought to be a pretty ferocious argument about the state of the British economy. George Osborne, welcome, thank you for coming.

GEORGE OSBORNE: Good to be here.

ANDREW MARR: Tell us first of all the main point that you want to make to Gordon Brown across the despatch box tomorrow.

GEORGE OSBORNE: Well, I suppose it is that the British economy is not doing as well as he says. Indeed in the last economic quarter, the latest figures as we put it, the British economy is doing worse than any other major economy in the world with the exception of Italy.

And I think the worrying thing is that looking forward, looking to the long term, as we see this world of India and China, all the drivers of economic prosperity, our ability to compete, our productivity, the investment that's been put in by business. On all those indicators now, we are doing worse and worse. And, you know, I put the blame pretty squarely at Gordon Brown's feet.

ANDREW MARR: What would you have done differently had you been Chancellor over the last few years?

GEORGE OSBORNE: Well I think a couple of things. First of all I think we need to create a lower tax and a lower regulatory environment in a much more competitive world when businesses can locate anywhere.

ANDREW MARR: So, you would you cut taxes?

GEORGE OSBORNE: Well I think as the economy can afford to cut taxes...

ANDREW MARR: But you would have cut taxes over the last few years?

GEORGE OSBORNE: Well I think as we have had economic growth, I think we should use that opportunity instead of increasing taxes, to possible reduce taxes.

I think the other point I should make Andrew, is that we need reformed public services. Education is going to be so important in this knowledge economy. And yet of course Gordon Brown has been the roadblock to reform, he's the person who stops any attempt to reform our public services and more incidentally our pensions...

ANDREW MARR: And yet, and yet, I mean a lot of money has gone into public services - the Health Service and education. If you believe that tax cuts are the way forward and have been, ought to have been the way forward in the last few years, then that must mean less money going into the public services?

GEORGE OSBORNE: Well the trouble is...

ANDREW MARR: By definition.

GEORGE OSBORNE: Well the trouble is a lot of that money has been wasted. For example in the last year three quarters of all the new money that went into the Health Service has gone in what we now call cost pressures. And in my local areas, and this is true elsewhere, the accident and emergency ward is threatened with closure. That's not what people want to see their money spent on. And I think...

ANDREW MARR: Sorry, can I just interrupt and say, cost pressures can mean and often do mean, just extra money for nurses, for people working in the public sector. And they feel that they deserve that money and that they have needed it for a long time and it's a perfectly reasonable thing for money to be spent on.

GEORGE OSBORNE: Well if you talk to front line professionals like doctors, nurses, teachers - they'll say to you, a huge amount of money is going on bureaucracy, on the red tape that they have to fill in. But yet, I mean this is a serious argument.

Again, if you look in my look at my local health authority there's another reorganisation going on of the Health Service, the bureaucracy, while they're trying to close the maternity ward and the accident and emergency ward. And you know that is how Gordon Brown has managed the public services. He has not allowed reform to take place. A huge amount of the money has been wasted. Meanwhile as taxes have steadily gone up we have become less and less competitive in a much more competitive world.

ANDREW MARR: It just strikes me that this is the accusation made against the Conservatives, the younger Conservatives as well as some of the older ones that you say, we're going to cut your taxes, we're going to give you better public services, but we're going to spend less money on them proportionately. And people say, you know, it's very, very easy. Time and time again people say "oh, cut the bureaucracy, cut the waste".

You have to take some tough choices. The first tough choice is whether you are really committed to tax cuts. Are you going to take this country in a different direction or not?

GEORGE OSBORNE: We have said that as the economy grows we share the proceeds between reducing taxes as the country can afford it, and also investing everything together...

ANDREW MARR: Everything altogether?

GEORGE OSBORNE: But it's perfectly possible as the size of the cake gets bigger...

ANDREW MARR: Have your cake, have your cake...

GEORGE OSBORNE: The cake gets bigger Andrew, and what we're in the business of is cutting bigger cakes and being able to compete in the world. Look it's not really an option for us, not to create a more competitive income environment. We face a world where all our competitors at the moment, all the developed economies in the world are moving in the direction of lower taxes, simpler taxes and less regulation.

We are heading in the other direction. So I'm afraid there aren't going to be the jobs and investment and the money for the public services coming to this country unless we create that competitive environment. Gordon Brown is not doing that at the moment.

ANDREW MARR: Are there any circumstances in which you would go into the next election as Shadow Chancellor not offering clear and specific tax cuts?

GEORGE OSBORNE: Well I'm not going to make any specific promises on tax cuts until I see the state of the economy...

ANDREW MARR: I'm just asking you whether you will make specific promises by the time we get to the next election? Not now, but what...

GEORGE OSBORNE: What people want to know is that we're fiscally and economically responsible. And therefore they want to know what are the public finances going to look like in five years' time, Andrew, you would tear me apart if I said I'm going to make specific promises for ...

ANDREW MARR: ...tax cuts, there may be very, very similar public spending profiles. It could be really as we've had in the past. And actually if you were Gordon Brown you'd say if I'd had that kind of record that he's got I'd be pretty pleased with myself over the last ten years or so.

GEORGE OSBORNE: I don't think on the tests he's set himself improving productivity when our productivity growth has slumped. Improving business investment when business investment is at a record low. Improving our ability to compete in a world when we're becoming less competitive.

These are tests Gordon Brown's set himself and tomorrow in the House of Commons he should answer them.

ANDREW MARR: If there is a cross-party alliance, as it were, to put the Turner proposals into legislation, will you be part of that?

GEORGE OSBORNE: Yes, very much so, in the sense that I think we need to have a cross-party consensus on pensions because these decisions are taken over many decades when you have Labour governments and Conservative governments...

ANDREW MARR: I just asked, because that's you know that's more money on pensions as well as everything else. And you just, you know, this idea that you're offering everything to everybody.

GEORGE OSBORNE: Not at all. I think we do need to take some difficult decisions on, for example, public sector pensions, the cave-in by the government that will allow public sector workers in 40 years' time to continue to retire at 60. A tax credit system where families earning over 60,000 today receiving means-tested income support.

There are areas we can look at, but if you're looking at pensions, the state pensions that people receive, as Adair Turner said when he was sitting here just a few minutes ago, there are going to be many more pensioners in our society, we don't want to see them getting relatively poorer to the rest of society, the costs are not huge, certainly compared to Gordon Brown's current system. And I think we need a cross-party consensus, we need to work together to solve this problem.

ANDREW MARR: If it is put to the House of Commons that MPs should get a 22% pay rise how will you vote?

GEORGE OSBORNE: I'll vote against it. I don't think in a time of pay restraint that's acceptable. And I would just say this, I wish I didn't have to vote on my salary. I would much prefer the whole thing was taken away from MPs. It's crazy to let MPs or indeed anyone else, decide their own salaries.

This should be set by the same people who set Civil Service pay, teachers' pay and so on. Indeed I'd like us just linked to a particular teaching grade or a particular Civil Service grade.

ANDREW MARR: Right. I don't think there's a single newspaper that I've come across this morning which doesn't have you keeping you job as a Shadow Chancellor. Do you know that's what's going to happen?

GEORGE OSBORNE: Listen, these are David Cameron's decisions. Indeed the voting hasn't ended. It closes at midday tomorrow. Whoever wins this contest I hope it's going to be David Cameron.

We're going to have a Conservative Party that is competing for the centre ground again, that reflects modern Britain as it is, that is excited and positive about our future, and is going to give the country a real choice at the next election.

ANDREW MARR: You'd like, presumably, William Hague back there alongside you in the Shadow Cabinet, presumably Liam Fox there? Big beasts.

GEORGE OSBORNE: I know where this is going.

ANDREW MARR: Well tell me where it's going, basically I mean he would be a very formidable Shadow Chancellor too?

GEORGE OSBORNE: Who's this?

ANDREW MARR: William Hague.

GEORGE OSBORNE: William Hague. Well William Hague would do any job, you know, extremely well. I know him very well, I used to work for him. And...

ANDREW MARR: Would you be miffed if he took it?

GEORGE OSBORNE: I would not at all. If he chooses to return to the Shadow Cabinet, that's his decision and David Cameron's decision, then he should do the job that he feels best able to do.

ANDREW MARR: Thank you very much indeed George Osborne. We will see what happens tomorrow. It'll be a big day for you. Thanks a lot for coming in.

INTERVIEW ENDS


NB: this transcript was typed from a recording and not copied from an original script.

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


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