Murnaghan Interview with David Laws, Liberal Democrat, Schools Minister 12.04.15

ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now then, about that inheritance tax pledge, the Liberal Democrats are on a big push this morning to prove that they can be trusted with the economy, they’ve unveiled £3 billion of welfare cuts they would make in order to balance the books but does this undermine their promise to create a fairer society?  I am joined now by the Lib Dem’s David Laws who is the Minister of State for Schools, a very good morning to you.  Of course we have to take that charge from David Cameron first of all about inheritance tax because of course the question my colleague Anushka Asthana asked him was okay, you’re making this promise, you made something similar kind of promise in 2010 but the Lib Dems kyboshed that, would it go again if you end up talking over the coalition negotiation table?

DAVID LAWS: It certainly wouldn’t be a priority for me and for the Liberal Democrats and let me make two points about it.  Firstly it is just bizarre that the Conservative party at a time of austerity, when they are proposing £12 billion of cuts in welfare to some of the poorest people in society want to raise the inheritance tax threshold to a million pounds that would only benefit the top 5 or 10% in society, what kind of priorities are those?  So our priority is certainly to raise the personal tax-free allowance that benefits most of the people on middle and low incomes but let me make a second point as well …

DM: You have been very clear about that and would you pay for it by hitting rich people on their pensions?

DAVID LAWS: Let me make a brief second point as well which was that in 2010 when I sat in negotiation with the Conservative party, the Conservative dropped this policy like a stone.  It’s not something that they pushed hard for at all so I would be cautious if I were somebody thinking of voting Conservative not only about whether this is a sensible priority but whether they will do the same again next time because they didn’t push …

DM: Do you not think they are wedded to it really, you think it is just something eye-catching?

DAVID LAWS: I think it’s something that they regard as eye-catching in the media but the test is do they make it a red line, do they make it an issue in negotiations and I can tell you that they didn’t in 2010.  

DM: Okay, let’s talk about your policy announcements today and of course you are committed to balancing the budget by 2018/19 isn’t it?

DAVID LAWS: 2017/18.   

DM: 2017/18, okay, but in a firm but fair way.  Do you think that message is slightly getting squeezed?

DAVID LAWS: No, I think it’s extremely resonant.  I think what people want to know is that the next government is going to finish off the job of sorting out the mess that was left by Labour, that it is going to finish the job of eliminating the deficit by 2017/2018, the current government plan – Labour is clearly not going to do that, they said they’ll borrow for many more years beyond that.  But people also want to know that there is a party that is committed not just to fiscal responsibility, to balancing the books, but to doing so fairly and we unveiled today £5 billion in extra taxes on people on high incomes who can afford to pay, £7 billion in tax avoidance …

DM: You talk about £5 billion, this is on changing the tax rate on dividends from companies?  

DAVID LAWS: No, this is a number of things including the high value property levy, a new higher corporation tax on the banks whilst we have this period of paying off the deficit so we have gone into more detail than any other party.  In fact before our manifesto is unveiled later on this week we have set out all of the policy costings of our key measures and exactly how we are going to find this £27 billion of savings because …

DM: So where do the welfare cuts come?  

DAVID LAWS: Well the welfare cuts come in six or seven areas, let me just talk about a couple of them. One is that we believe that pensioners on very high incomes, those who pay the 40% rate of tax, should no longer be receiving things like the winter heating payment.  We don’t want …

DM: 40% rate of tax?   

DAVID LAWS: Yes, in other words the 5% richest pensioners.  We think it’s silly that people who are for example Cabinet Ministers in Vince Cable’s case, who is over retirement age and who is a Cabinet Minister is getting a winter fuel payment alongside a £130,000 salary, that is nonsense.  We are also saying that we would continue the cap on benefit increases of 1% for two more years which would also make savings and we have outlined a whole series of other measures.  What we don’t think would be sensible is to go beyond this three billion that we’ve set out today in savings that we think can be delivered safely.  The £12 billion that the Conservative party are saying they would save on welfare but have given us no detail on, could only be achieved with a massive increase in inequality and by really hitting vulnerable people, the disabled and means testing child benefit, those sorts of things and until the Conservatives are able to say how they would actually deliver those savings I think that people ought to be very cautious about the other pledges they are making.  

DM: Can I just ask, talking about Vince Cable there put it in my mind, what’s going on with the party internally which of course the public, the voters, take on board and Vince Cable had a pop at Tim Farron didn’t he, your former Chairman, for talking about your experience in coalition.  Paddy Ashdown, Lord Ashdown, had a go at him as well, do you think you were right to have a pop at Tim Farron?

DAVID LAWS: I think what they were right to say is actually that Liberal Democrats have done a very good job in coalition and have shown that coalition government can be stable and that it can deliver things that are in the interests of the country and not just the economic growth that we are now getting through, but many of the policies from the front page of our manifesto, the increase in the personal allowance, the pupil premium.  Actually I think that people will see if they’re fair that the coalition has been successful and that the Liberal Democrats have punched above our weight.  

DM: So you are kind of endorsing there Vince Cable and Paddy Ashdown saying to Tim Farron, look, it’s not helpful talking about our experience in coalition when by and large, as you’ve just said, we’ve achieved a lot?

DAVID LAWS: I am very happy to talk about experience in coalition, I think it has been a good one, it has shown that we can deliver many of the Liberal Democrat policies from the last manifesto but also the stability that this country needed to put our economy back on track and my goodness, the country and the economy that we’re leaving at the end of this government has been transformed from the country and the economy and the deficit that we inherited in May 2010.

DM: David Laws, thank you very much indeed, very good to see you, thank you very much indeed for coming in on to Murnaghan.