Nick Clegg joined James Naughtie yesterday in the Today studio, for the programme’s first of a series of interviews with the party leaders before the elections on 3 May.
Clegg talked about the budget, the compromises of coalition and Lib Dem electoral prospects, among other things.
You can listen to the interview in full over on the Today website here, or read a transcript of the interview below.
James Naughtie: Coalition government involves some pretty hard bargaining, some difficult compromises for both parties. You might think therefore that the opportunity of a local election campaign would be quite welcome, party leaders being themselves, talking to their own parties without having to worry too much about the other lot. But for Nick Clegg, leader of the Liberal Democrats, times are tough. He doesn’t even need to look at the opinion polls to know that. He said himself at the weekend that coalition life was a roller coaster and acknowledged that any government sooner or later found itself in a rut where every potentially good story turned into a bad one. He was obviously referring to the present. So how does he breathe life into the Liberal Democrat campaign? The Deputy Prime Minister is with us. Good morning.
Nick Clegg: Morning.
JN: You obviously have to defend decisions of which you are a part. In the course of this campaign are you going to claim credit for a budget that you can describe as fair?
NC: Oh I attach a great deal of significance to the fact that the centrepiece change in the budget — and I acknowledge it has been perhaps somewhat lost by recent coverage about the budget since it was announced — but the centrepiece remains the huge change in the personal income tax system which will benefit over 20 million basic rate taxpayers to the tune of several hundred pounds. It will take by next April over two million people on low pay out of paying income tax altogether, mainly from the lifting of the income tax allowance and, you know, I think you have small changes in budgets which can be controversial or not and then you have big changes in budgets which in my view can be judged whether they are significant on whether we believe that future governments are going to change them or not. My feeling is that what we’re doing on the allowance is one of the biggest, boldest and most radical changes in the personal tax system in a very long time.
JN: Well the IFS judged immediately after the budget that people who were going to lose out were middle-income families with children and it pointed out that the burden was going to fall mainly on the 20 per cent lowest paid. Acknowledging what you’ve said about the rise in the allowances which will have an effect, but you see budgets are packages and if you look at what’s happened to this one, you talked about potentially good stories turning into bad ones at the weekend, the stuff that’s unravelling is stuff that comes from your corner. Charities are absolutely livid about what has happened on the proposed cap, that is absolutely in line with the speech that you made about tycoon taxes and sold to your party’s spring conference, it comes from you.
NC: I make absolutely no apology at all that we should seek to make changes in our tax system when we had a tax system that looked like a sieve with great big holes in it, but everyone pays their fair share. Now as it happens…
JN: But you don’t think what has happened with charitable donations is abusive and evasive?
NC: No, no, no. I’m not saying that people make contributions to charities to avoid tax, of course not, of course not. What I am saying is that it is very rare actually in the developed world to have allowances in the tax system which are completely unlimited. In fact I think only Australia of all the developed economies I’m aware of that has such a big exemption where there is no limit at all. What we’re saying is yes, there should be tax incentives to help charities, that’s a good thing, we should encourage philanthropy. I was with a number of philanthropists at an event just yesterday evening thanking them for what they have done… hang on…
JN: You thanked them but did they thank you?
NC: What I explained to them was, look, there is a simple principle at stake which is that if you have an unlimited allowance you are asking ordinary tax payers on much lower incomes to fund that tax break.
JN: In other words you said to them we’re in the business of compromising on the figure.
NC: What I then said was of course, as we said at the budget, we will look at this in detail, we have time to get the details right, we will look at it in the round and we will do so with an open mind and very sympathetically because we don’t want to damage charities, we don’t want to inhibit philanthropy. But that doesn’t mean the principle of saying there should be some limit to what our taxpayer funded allowances in the tax system as a whole isn’t something which is sensible and by the way it’s happening across the developed world. Money is tight, everybody is asking, particularly those at the top, to at least pay their fair share in income tax.
JN: But that answer reveals how far the government has moved in the last few days because what you’re saying is we can argue about the detail, there is a principle that there shouldn’t be an unlimited freedom but nobody is suggesting that that was ever going to be defended. What you’re saying is that we’ll change what we proposed in the budget. You see, this gets to the heart of your problem doesn’t it? You, particularly you, in the government find yourself constantly on the defensive, don’t you, every single day?
NC: I’m not in the slightest big defensive, Jim, about the fact that this very month…
NC: This very month I have launched a youth contract which will help every 18-24 year old who is out of work to either earn or learn. I’m not the slightest bit defensive about the fact that pensioners have received the largest cash increase this month in a state pension ever. I’m not the slightest bit apologetic that we’ve given the largest uplift in the allowance ever, that we’re increasing the pupil premium… This is very significant, we can trade, I can talk about the things I’m proud of and you can talk about the things that the government is… but hang on, let’s be fair for a minute to the government, I don’t think it is entirely unreasonable for me to take this precious opportunity to tell the other side of the story. There are things we’re doing for pensioners, for young people in school, just this last week I was talking about the massive expansion that we’re doing — it’s never happened before in this country — of pre-school support and child care support for two year olds, hundreds of thousands of two year olds from the most deprived families in this country, that has never happened. Of course I accept that governments get into situations where you have bumps and scrapes and media squalls where it’s difficult to get your side of the story across, but we’re doing a lot of difficult things to rescue and repair the economy, we’re doing good things which I believe will last, will work for the long term and will help the young, the old and people across the country.
JN: With respect, it’s not a media squall that engulfed the budget, it is the fact that it has unravelled before our eyes. It appears to be an incompetent package, I needn’t mention pasties, the granny tax, the charities which you’ve acknowledged yourself a few minutes ago you’re having to deal with, with philanthropists who don’t know what’s going on. This appears to be a government that’s characterised in many of its actions by incoherence.
NC: No, I think if you look at the big judgements in the budget, and I think this always happens in politics generally, in particular the slightly sort of frenzy, high velocity media environment we work in, people get absolutely swept up by some specific issues and they lose the bigger picture. The bigger picture on the budget is that firstly we, unlike many governments in the developed world, are able to hold steady on our plan of dealing with the deficit, we’re not changing that. It is very important that other governments are constantly having to run around, reinvent budgets at every turn because of deteriorating situations in their economy, we have pulled back this country from the brink, we have made our economy safer than it is in many other parts of Europe and the developed world and that was reflected in the budget and at the same time what we did was we made some very major reforms, worth around three and a half billion pounds a year to the benefit of over 20 million basic rate tax payers, on the route to making the tax system as a whole fairer and I believe that in the long run it is those big changes which will be the legacy of this budget, not some of the other issues.
JN: But you see the government seems not to be able to see things coming. The granny tax, the charity row which you have acknowledged that you are having to repair now and this gives the impression of a government that is not confident of which foot it’s putting forward, that’s why I use the word defensive because you talk for example about coming into this job to produce fairness, that was the theme of your election campaign, all that long time ago, two years ago and the trouble is that you are constantly finding yourself — you’ve acknowledged this — in a position where people say whatever they say is it isn’t fair. Do you understand that that’s why you are lagging in the polls, that’s why your party is…?
NC: I totally accept that at a time that we as a government — and by the way whoever was in power would have to do this — are taking very big controversial decisions to help our country recover from one of the largest economic shocks — it is like a great big heart attack at the centre of our economy which occurred in 2008, which will have aftershocks and after effects which will last for years — that to do that does mean that you have to take controversial decisions and of course that generates anxiety, it of course may even generate anger but at the same time we are doing things that help millions of ordinary people and just look, if I may for a minute, just cite what Liberal Democrat councils are doing. Liberal Democrat councils, we are the only party that has either frozen or cut council tax in areas where we are in control, neither the Labour nor the Conservative parties can say that. We are much more likely than either Labour or Conservative councils to also give real help to public sector employees, council employees, on low pay. That is an example of us being committed, not just rhetorically but in action, to fair taxes and fair wages.
JN: Can I suggest to you that one of the reasons why you find it difficult, and you admit this, find it difficult to get your message across is because people remember for example that highlight of your first period in office when having said that you would come in to government to put an end to broken promises, you broke a very famous promise on tuition fees. You defended it but people said, ‘Well if we can’t believe him on that, why should we believe him on anything?’ And that still hangs round your neck doesn’t it?
NC: There are two things which I will be very open about and which of course I will explain over and over again. The first thing is, I didn’t win the election, the Liberal Democrats came third. I represent a party… no, can I finish, hang on. I represent a party with 8 per cent of MPs in the House of Commons. I’m flattered that people think I should lead a party which has over 50 per cent, we do not. If you look at that manifesto in full, vote for Liberal Democrats in larger numbers, it didn’t happen and I have to deal with the world as it is and not as I would like it to be. I would love to be Prime Minister and I would love this to be a Liberal Democrat government but it isn’t and no one can accuse me of never being up front about the fact that that means that there are painful compromises where you can’t do everything. It so happens to be the fact that there are four big pledges we made on the front of our manifesto — pupil premium, fairer taxes, sorting out the economy, reforming politics. We’re delivering on all four, but of course we weren’t able to, and most notoriously, on higher education. The second thing is, all of those difficult compromises are made even more acute by the fact that, as Liam Byrne kindly informed us after Labour left office, there is no money and if you have no money you are faced with difficult choices and I suppose as a politician the easy route would have been two years ago, this is all too difficult, I am going to retreat to my tribal corner in politics and just throw lots of sort of bricks at the other parties and be terribly holier than thou about it, or we get stuck in and sort out the problems this country faces. They are big problems. We are sorting out a monumental mess left by Labour — what happened in 2008 is almost without precedent in the post-war period and it will take some time to sort it out. It requires courage, it requires resilience and it requires a government that is bold and I am proud of the fact that the Liberal Democrats in this government are being courageous and are being bold.
JN: So you’re enjoying it?
NC: Yes, it’s a great privilege. Of course it’s tough but it’s a great privilege and I feel genuinely lucky that I am playing a role, as other people are, in making sure this country is strong, prosperous and safe in the future.
* Nick Thornsby is a day editor at Lib Dem Voice.