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Last Updated: Sunday, 19 March 2006, 12:31 GMT
Tory Party funding
On Sunday 19 March 2006 Andrew Marr interviewed George Osborne MP

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

George Osborne MP
George Osborne MP

ANDREW MARR: Now I'm joined by the Shadow Chancellor, George Osborne - welcome. Can we crack on straight away with the whole business of the loans and the alleged sleaze.

Is it your understanding that the Conservative Party raised about 14 millions pounds - about the same as the Labour Party - in the same way, with these loans that didn't have to be declared ...

GEORGE OSBORNE: We did take out loans. The big difference between the Labour Party and ourselves is that we published this fact, it's available in our accounts, it's on our website and unlike the Labour Party, where of course the Prime Minister didn't even tell his own Party Treasurer that he was taking out loans. So there is a big difference there. We didn't publish the names, because that was not the law, and we've complied with the letter of the law, we've followed it absolutely.

ANDREW MARR: Well of course Labour says they've done the same. Have you given peerages to anybody who gave substantial loans to the Conservative Party?

GEORGE OSBORNE: Well it, it is known, of course, that people who have made donations to the Conservative Party in the past have been given peerages but they have done other things - Michael Ashcroft is used in this context, but he of course set up the Crimestoppers charity, he's made a massive contribution to reducing crime.

ANDREW MARR: Of course.

GEORGE OSBORNE: Let me just say one thing, Andrew. David Cameron, the current leader of the Tory Party, has nominated no one for a peerage and tomorrow will be making a major announcement which will, I think, clean up British politics. He is going to say -

ANDREW MARR: I'd like to come on to that - I do want to hear about that - but I just want to ask again whether it's your understanding that anyone who gave substantial loans to the Conservative Party for the last general election campaign has got or is about to get an honour?

GEORGE OSBORNE: Well - the honest answer is I was not involved in the financing arrangements of the general election. I'm not, I'm not aware of the details of who gave what loans and how much money they were involved. What I am involved in, now, is the new leadership of the Conservative Party.

There are many people who want to give us money at the moment so this is, in a sense, an act of self-sacrifice, it's not as if we're short of donations coming our way, but we are going to make a big announcement tomorrow and offer something to the Prime Minister and to the Liberal Democrats, which is to say let's clean up British politics, let's get rid of the suspicion of very large donations, either buy you influence, in the case of the trade unions, or buy you honours in some indirect way, and let's put a cap on individual donations that people make to political parties. So you do not get these multi-million pound donations, either from, as I say, big trade unions or from very rich individuals.

ANDREW MARR: And what would be the sort of figure that would give people the reassurance that you think they need?

GEORGE OSBORNE: Well we're going to announce the details tomorrow, the figure, and indeed there is other elements to the package, but I can tell you that it is a few thousands of pounds, rather than millions of pounds, so I think most people looking at it would say that is a major step forward, and it's being taken by the Conservative Party, we're going to offer this as a package to the other political parties, and say look, let's get together, let's remove the suspicion that large sums of money buy you influence over policy, or indeed buy you somehow political honours.

ANDREW MARR: So no single individual could offer - let's say, for the sake of argument it's three or five thousand pounds, whatever it is - no single individual could come to a party and say here is a hundred thousand pounds - they wouldn't be allowed to do that, the party wouldn't be allowed to take it. And would that also be the case for companies and institutions and organisations, including trade unions?

GEORGE OSBORNE: Yes, basically is the short answer. I mean I'm not going to get into the specific sums of money involved but we are going to put, we are going to offer to the other political parties, I mean obviously -

ANDREW MARR: You're not just going to do it for yourselves.

GEORGE OSBORNE: We can't do it for ourselves because, for example, our main opponents, the Labour Party, received eight or nine million pounds a year from the trade unions and we have to create a level playing field. But we are going to say let's put a cap so that institutions, corporations, trade unions, individuals, are not able to give large sums of money to political parties and at least create the impression that honours or influence over policymaking is up for sale.

ANDREW MARR: So this would mean that the only way a political party in Britain could be well-funded would be by creating, re-creating, a mass membership base of millions of people?

GEORGE OSBORNE: Well, what we're setting out tomorrow is a big package which has got lots of different elements to it - I mean, by the way, we've been working on this for three months. I mean I know the current news is all about Labour, the Labour Party and their murky business, but actually we've been working on this for some months, from almost the day the David Cameron became the party leader, and we are looking at other ways to fill the funding gap that would be created.

ANDREW MARR: State funding?

GEORGE OSBORNE: State funding, of course, already exists in the sense that short money - as it's called - is paid to political parties.


GEORGE OSBORNE: If there is additional state funding it should be offset by savings elsewhere for the taxpayer - we don't want to increase the tax burden on taxpayers, which we already know is the highest ever - but also looking at ways to encourage a larger number of much smaller donations, of the kind that, you know, charities get and are able to fund themselves without the suggestion that very rich individuals buy their way into the influence over, in the case of the Labour Party, the governing party.

ANDREW MARR: You mentioned tax just now - going up towards 38 per cent of GNP. When it comes to the Budget, you're not actually going to be able to propose any concrete way of reducing taxes at all, are you?

GEORGE OSBORNE: Well we can set out a long term direction, which is to reduce the share of national income taken by the state, and that, over time, allows you to share the proceeds of growth between investment in public services but also reducing taxes. But I can't say anything on Budget -

ANDREW MARR: That's very, very general.

GEORGE OSBORNE: Well, it's the opposite direction that Gordon Brown has taken us in. I mean he has left us with the highest tax burden in our history and a very large amount of public money taken by the state - this is, by the way Andrew, the exact opposite direction that all our competitors are going in, in this very competitive new global economy.

ANDREW MARR: Does that mean that the previous increases in public spending in health and education are things that you now are against? You would not have imposed those and retrospectively you think it was a bad idea - because if you don't think that then none of what you're saying makes sense.

GEORGE OSBORNE: Well I think it does make sense. If you look at the sums of money that have been spent on the health service and the education system, the absolute tragedy is how much of that money has been squandered and wasted. We have a story today about the NHS, for financial reasons, curbing the treatment available to asthma sufferers. We had a story, earlier this weekend, of a hospital in North Staffordshire having to sack very large numbers of people.

And I think the public out there ask, we are paying record burdens of taxation, we are going to have a very high borrowing figure announced by the Chancellor in his Budget, where has this money gone? Why have we not seen the improvements in our health care and education system that were expected? And their answer is ... of course, the Chancellor blocked the reform, he's the roadblock to reform, he stopped the reforms to the public services that would have led to that money actually yielding better results.

ANDREW MARR: You're talking, perfectly fairly, about how money is spent but I was asking you about how much money could be raised, it didn't seem to me that you were able to give me an answer there.

GEORGE OSBORNE: Well I, it seems to me that before you decide how much money should go into a service you should identify what you can use that money for - and that's clearly not what happened in this case. Going forward, I think there is a strong argument, and we set this out, for reducing the share of national income taken by the state - this is what our competitors are doing.

And when you look at our, what's going on in the global economy - China and India on the rise - and you see what Britain is doing - raising taxes, increasing borrowing - it is the exact wrong response and it will effect people watching this programme in the competitiveness of this economy, their ability to get a good job, in the stability of the public finances and their ability to pay their mortgage.

ANDREW MARR: Sure. We're seeing some leaks coming out - as we always do ahead of a Budget. If it's true that the Chancellor intends to slap a new tax on 4x4, so-called Chelsea tractors, you'd be in favour of that, wouldn't you? Bicycling parking these days?

GEORGE OSBORNE: Well I - personally I bicycle pretty much every day, so I'd be in favour of bicycling. What - reading these stories, you know, you've got to be careful about pre-budget speculation - it actually looks like he's just continuing with the current arrangements, which is that different sized engines get different tax levels. We do want to look at whether there are other ways of using environmental taxes to achieve carbon emission reduction -

ANDREW MARR: But all these people in sort of, you know 4x4s -

GEORGE OSBORNE: Well, as I say, that already exists under the current vehicle excise scheme and I didn't think that was a big news story in the way that some of the papers were presenting it. I have had a hint from inside the government that Gordon Brown might say something about pensions, and the pension credit, and reform of pensions.

I think it's very important that Gordon Brown follows the lines of the Turner Report, which of course the Prime Minister signs up to, the Department of Work and Pensions sign up to, we sign up to as the framework of the solution. If it's true that he's actually going to try another approach, stick with his old pension credit, which is of course what Turner was criticising ... the means-tested element, then I think that would be a big mistake by again showing he's a roadblock to reform.

ANDREW MARR: We will wait and see. Thank you very much indeed George Osborne.


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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