Murnaghan 9.12.12 Interview with Boris Johnson, Mayor of London

ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS DERMOT MURNAGHAN: Now, the Conservative party are often accused of being out of touch and unpopular but there’s one man with broad appeal and big ambition, he is of course the Mayor of London, Boris Johnson. Well let’s say a very good morning to the Mayor of London, Boris Johnson. 

BORIS JOHNSON: Good morning, Dermot. 

DM: Thank you very much indeed for coming along. 

BJ: My pleasure. 

DM: Reflecting on that introduction there, do you put that down to the fact that … 

BJ: Your introduction. 

DM: Yes, the fact that so many people within the Conservative party carry a torch for you, the fact that here you are, in charge of London, you’re unfettered by coalition, unfettered by the big beasts in Cabinet, you’re master of all you survey. 

BJ: No, of course not, but I was very lucky to get elected in 2008 and lucky to get back in 2012 and it is great, great fun being Mayor although it is incredibly hard work and you can do things that I think are broadly in keeping with the Conservative spirit, so stuff like bearing down on council tax which is very important for households across London. We froze it throughout the first four years, cut it in real terms and now we are going to cut it by a further 10%, that’s quite a useful thing to do but also stuff to get the economy moving, investing in infrastructure, a lot of stuff by the way which I think George Osborne is doing in his Autumn Statement. 

DM: Yes, I want to get on to that in a moment or two but it is just that broad question, I also mentioned about this perception of the Conservative party as being out of touch. One of the big issues coming up at the moment is gay marriage, now you’ve slightly changed your position over the years but fully supporting it and … 

BJ: As indeed .. as indeed is the [Prime Minister] … 

DM: But I’m saying, you seem in touch certainly with [inaudible] and with the rest of the nation but the Conservative party, there are those still in the Conservative party saying bring back Section 28. 

BJ: Yes, I think the great thing about this now is it is perfectly obvious that the constituency is there in parliament to do this, nobody is calling for any change to any religious practice whatever and it is pretty clear from what the Prime Minister has said that no religion is going to be under any compulsion to do anything to change their observances. The Labour party will vote for it, the Liberals will vote for it, huge numbers of Tories will vote for it, whack it through, let’s knock this thing on the head. 

DM: But what happens if it divides the Conservative party, are you saying to those that oppose it within the Conservative party, you really are out of touch, wake up and smell the coffee? 

BJ: Oh I think they should just … in a way I think that the subject continues to be so kind of prevalent. Let’s get it done and let’s talk about the real Conservative things we want to do like encouraging aspiration, entrepreneurship, cutting taxes, cutting crime, creating a fairer society – all the things that Tories want to do. I think that would be preferable really than this endless … 

DM: But it is symbolic really isn’t it, that the Prime Minister is going for it? 

BJ: It is a symbolic discussion but I think it’s being protracted now beyond its usefulness. I think Bill it. 

DM: Okay, well let’s get on to the Autumn Statement, the tax cutting, the things you’ve been doing in London as well. You have called for a further cut in the top rate of tax, it is already controversial the fact that they are knocking the 50p down to 45, you think it should go back to 40. 

BJ: I think obviously these are very difficult things to say particularly in very tough economic times. We are all in it together, nobody in the public sector … nobody in government has taken any kind of pay rise, nobody in … low paid people have seen their incomes frozen or falling in real terms, how on earth can anybody argue for tax cuts and I understand that. The only point I humbly made, I always say this, is you’ve got to look at the global economy, you’ve got to look at how London fits in that economy and whether we’re attractive as a place to live in and to invest in for the people who generate huge sums of wealth and investment and in the end, you’ve got my Wimbledon example – if you look at the last 16 at Wimbledon when you have people from America, Serbia, Ukraine, Canada, Switzerland obviously with Roger Federer, virtually every, I think in fact every other jurisdiction was going to take less in prize money than Andy Murray faced losing as a result of winning. That’s not a position that Britain is normally in, historically we have been a tax competitive country and we need to be that. 

DM: With that analogy, people want to come and play at Wimbledon, if they want to come here they have to pay the tax and they do. 

BJ: Unfortunately not, unfortunately not, what they do is they get the prize money and they are taxed in their own jurisdiction so it only Andy Murray who gets that huge sum taken out, who gets 62% or whatever it is taken out of his … and I ask the question … 

DM: Shouldn’t we feel sorry for the people at the bottom of the pile who are getting, even working people as well, who are getting their benefits effectively cut? 

BJ: Of course, of course and that’s why it is such a hard argument to make and people watching will say, give me a break, I mean Andy Murray is going to try pretty hard to win Wimbledon whether or not, no matter how much he takes home in prize money and Roger Federer might pay only 20% of tax on it but who cares if Andy Murray has to pay 62%? 

DM: Well answer that. 

BJ: That is a fair point, on the other hand you’ve just got to look at the long term effects of having a tax rate significantly higher than competitor economies, that’s all I’m saying. But I do, I see the point completely about what’s happening to people on low incomes, it’s why in London we’ve gone so heavy on the London Living Wage and this is a campaign that’s been led by City Hall, we’ve massively expanded it, you’ve got firms, not just banks and accountants and stuff but loads of firms now across the board and across Whitehall now, you’ve seen much more take up of the London Living Wage. I’d like to see it go further, I’d like to see the whole of government in London pay the London Living Wage and that is probably the most pragmatic thing you can do to help people on low incomes. 

DM: Is that something you are working towards, you can find that within the budget? 

BJ: Yes, because what you do, we think we’ve put maybe up to £200 million into the pockets of the lowest paid people in London, that’s money that then drives the economy and it’s good for the companies that pay it because they find that it engenders loyalty in their staff, they actually reduce their turnover costs, they reduce their labour force costs so the firms that do it, the banks and accountants firms, they are all finding it’s worthwhile. 

DM: Talk to me about these big firms and huge financial organisations which of course London and the rest of the economy, the rest of the British economy, depend upon so hugely and the amount – we were talking tax there – the amount of tax that they pay is much discussed at the moment. Do you think HMRC should get them up, hang them by their heels and say come on, pay your fair share of tax in this country? 

BJ: Okay but imagine that you’re corporate finance director of one of these companies, the Chief Finance Office of Google or Starbucks or Amazon or whatever, your job is to look at the law as it stands and your fiduciary duty or whatever to your shareholders is to minimise your tax exposure. It isn’t to say this looks pretty bad, we’d better write a huge cheque to the government ex gratia and show that we’re good citizens. Companies don’t think like that. They have got into a hell of a mess, there’s no question and I think now that Starbucks has stepped up to the plate and announced that they’re going to be making this payment, I think rather than everybody sneering at them people should welcome that and say okay, good for you. 

DM: Okay but I mean a lot of it is social pressure, a lot of it is the customers who have driven it, do you think that applies to other companies? 

BJ: You know, it is very, very difficult as I say for a Finance Director in a company to know how to behave in these circumstances when his job, I mean he could be sacked if he makes some sort of crazy submission to the Revenue for far more tax than the company is liable for so I can see the problem. It’s hard for the government to come after these companies, what they’re doing is using well-known international dodges to defray their profits by pretending they are all made in Luxembourg or wherever. I think if the government can frame legislation that is going to allow better, fairer competition on the high street between say a big coffee chain like Starbucks and other local coffee chains who don’t have this advantage, that would be a good way forward but my point is that it’s a bit unfair to bash the companies and then sneer at them when they try to do good. Starbucks is now trying to show that it’s a good community performer and they do lots of apprenticeships and stuff like that as well. 

DM: I mean, one of the reasons these big companies, these big banks, these big organisations are in London is because we’re in the European Union. I want to ask you about your position on the European Union, you seem to have changed it in one week alone. We talked to you when you were India and you said no need whatsoever for a referendum and then the other day you said we ought to have a referendum pretty soon. 

BJ: Dermot, no, what I said was you couldn’t have – let me just explain, you couldn’t have, what I was asked is should we have an in/out referendum now and I was thinking about the advantages of that. If you have a simple in/out referendum I think at the moment the chances are that the British people would say stuff that for a game of soldiers and 56% say let’s pull out. Now the risk – and I’ve been writing about Europe for about 25 years and I spent a long time in Brussels as a correspondent and the really good bit about it is the single market and that’s something that allows British firms, British jobs, British enterprise to take freely with other European countries in a way that I think might be in peril if we were to pull out unilaterally. So all I’m saying is let’s have a renegotiation in which we chop off the bits we don’t like, chop off all the kind of excrescences likes the Fisheries policy and the Social Chapter or whatever … 

DM: The Common Agricultural Policy. 

BJ: Why on earth are we continuing with that system in this day and age? It is grossly unfair … 

DM: So we chop all that off and according to the British people … 

BJ: And then, and then, and then that renegotiation is essential because at the moment what’s happening is that our European friends and partners are continuing to make this disastrous mistake, they’re compounding the mistake of the euro by going forward with full tilt towards a political and fiscal union which, by the way Dermot, this government, our government, should be opposing, not supporting, 

DM: They’re winning the Nobel Prize for goodness sake! 

BJ: Well I know, it’s totally preposterous. It’s like Nicolae Ceau?escu got a knighthood, or Mugabe, all sorts of things can go wrong. 

DM: But listen, Liam Fox is going to make a speech tomorrow and he’s going to say look, we need to get back to the Common Market which is more or less what you’re saying, you’re agreeing with that and he will say we need to get it sorted out by the party conference next year, by Autumn 2013, do you go along with that? 

BJ: I do. I think probably what David Cameron is going to say, he’s got some speech coming up, I reckon he is going to commit to a referendum which will be broadly an in/out referendum on the new terms so we’ve got to go in and get a better deal for Britain, which is basically the single market, making sure that British Ministers are in the internal market able to protect British interests, make sure that British companies continue to have unfettered access to that market and that there’s reciprocity but allowing the others to go ahead with this fiscal union, in which frankly we do not want to participate and should not participate. I think that a new deal, us allowing them to go ahead, should be our price for the single market, for the new arrangement. In other words, we should say to them, look the euro was not a good idea, it was a disaster, it’s proving to be a disaster, the GDP of Greece has fallen by 10% in one year. If you want to go ahead with this crack-brained project to create a single country out of 17, 20, totally different countries, okay, you won’t have our approval but you’ll have our permission and in exchange we want a new relationship, we want the single market and that’s a deal I think we should put to the British people. 

DM: I just want to put to you one last thing, Mr Mayor, you are a man known to like a joke or two, this issue of the so-called prank, the hoax call to the King Edward VII hospital which has led to these unforeseen circumstances, this awful outcome, do you feel that the DJs in question, who it now seems that the radio station in Australia are having a think about their future, I mean they couldn’t possibly have seen the outcomes but do you think things should be taken further? 

BJ: It is just an appallingly sad story and it’s very hard to say anything meaningful about it except obviously to offer people’s thoughts and sympathies to the family of the poor, poor nurse who was caught up in it. I’m sure that the hoaxers will be absolutely full of self-loathing and remorse but their future careers in broadcasting are a matter for them I guess and for their station. 

DM: Okay, Mr Mayor, thank you very much indeed, Boris Johnson the Mayor of London, very good to see you. 

BJ: Thank you very much, thank you.