ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: So the Eastleigh by-election will be a fight to the finish. It’s a crucial battle that both the Lib Dems and the Conservatives are determined to win. Well yesterday I joined Deputy Prime Minister, Nick Clegg, as he met party activists for a national Lib Dem day of action and you can see that interview in just a moment. It’s been a tough year for Nick Clegg, he had to back down on Lord’s Reform.

NICK CLEGG: We do not have the Commons majority needed to ensure this Bill progresses through Parliament.

DM: Apologise for tuition fees.

NC: We didn’t stick to it and for that I am sorry.

DM: And then see his apology spoofed.

[I’m Sorry spoof video]

DM: His party did so badly in the Corby by-election that the Lib Dems lost their deposit.

RETURNING OFFICER: Jill Seaton, Liberal Democrat, 1770.

DM: And then Chris Huhne admitted lying to him and to the public.

CHRIS HUHNE: I pleaded guilty today, I am unable to say more while there is an outstanding trial. DM: But yesterday as Nick Clegg went to meet the party faithful, he got a warm reception. He was meeting grassroots members for the Lib Dems day of action when activists around the country get out their message on tax and together with Business Secretary, Vince Cable, Nick showed you’re never too important to stuff and envelope. But looking forward to 2015, I asked him how he thought the Lib Dems would fight the next election.

NC: I think the 2015 General Election will be the first full scale scarcity election when no politician who is in any way trying to be serious about the problems facing the country can do anything other than admit that further savings need to be made, that the cupboard is …

DM: But the challenge to Labour saying if you don’t sign up to these cuts then no one is going to take you seriously.

NC: It certainly is a huge challenge to Labour and I think if Labour continue to both deny their own responsibility for the mess in the first place but also deny that difficult choices will continue to be made, I really don’t think they will be taken seriously by the vast bulk of the British people but here’s the point, and the relevance of these leaflets, is that in that context where there isn’t money lying around, when there aren’t pots of gold, the central question in British politics is how do you square the circle, how do you fill the black hole in your public finances in the fairest way possible? If we are having to tighten our belts as a country and as a people for several more years, who has to tighten their belts the most? My own view is that coalition government is going to be probably a more regular feature of British politics so I think that all the small parties need to be more open with their own supporters and with the British public about the compromises that involves.

DM: And so from that, Mr Cable, we know you are open about keeping lines of communication open to Labour.

VINCE CABLE: Well I think both of us do. We have a sensible business like relationship with them and I think the public would find this very narrow, tribal way of looking at politics very unhelpful. Of course you’ve got to talk to the opposition people, there are lots of decisions that need to be made for the very long term. We’ve talked about industry strategy, about pensions policy, whoever’s in government we want continuity and I think that business understands that, the public understands it.

DM: But do the public understand the Lib Dem’s core message on tax? Well there’s nothing like a bit of old fashioned leafleting and Nick and Vince seem happy to lend a hand. They want to make sure that Lib Dem values are heard everywhere including the streets of Richmond, one of London’s wealthiest boroughs. Most of these houses look like they would be liable for the Mansion Tax, they look like they are worth two million and probably more. Is this natural Lib Dem territory?

NC: Oh I think it’s really important that people remember what our preferred option is because I think it’s been perhaps a little bit misinterpreted by our opponents. What we’re saying is if you happen to be one of the tiny minority in the country who live in a property worth two million pounds or more, we’re going to ask you to pay 1%, not on the full value but just on the value over two million so if your house is worth two million one hundred thousand or something, it is only the 1% on that one hundred thousand. I think if you look at the current system, I was looking the other day at property prices, there are homes around Regents Park which are for sale for tens of millions of pounds and they are Band H properties in the Westminster Council. They pay the same council tax as a three bedroom family home in Lewisham. It can’t be right for an oligarch living in Regents Park pays the same on their property as a hard working family in Lewisham.

DM: Not a very flattering picture of the Prime Minister in fairness, your colleague in government. You’ve chosen that deliberately, he doesn’t look really on the ball, does he?

NC: What we’ve chosen is to make a point, which is a perfectly legitimate point, which is when it comes to fair taxation, asking people at the very top to make a contribution, making sure that the priority is to help people on ordinary incomes, there’s a difference between ourselves and the Conservatives. We think it’s perfectly legitimate for us to say this is a difference, we’re open about it.

DM: And perfectly legitimate for you to pick a picture of the Prime Minister looking hapless and out of touch?

NC: I don’t think he will lose a minute’s sleep about the fact that some photos are more flattering than others.

DM: Okay. But Cameron and Clegg might lose sleep over the fight they’ll face on the streets of Eastleigh for the by-election on February 28th. Off the streets and in a more traditional interview setting, I asked Nick if he thought he could win in Eastleigh.

NC: We have a very, very strong record there, we stand up for the local community, we stand up for I think the values that people want which is sorting out the economy but doing so fairly and we will obviously give it our best.

DM: Do you think it’s going to be a bruising campaign though and damaging more broadly for the coalition because we know the Conservatives are saying we’re going in equally hard, we fancy ourselves to win this and the early polling shows them ahead?

NC: Frankly the polls shows us more or less exactly where I expect us to be which is sort of neck and neck which is exactly I would expect us to be. I don't think there is any reason at all why we can’t compete rigorously in a by-election and spell out in a grown up forthright way where we differ. Our emphasis on fairer taxes, asking people at the top to chip in a bit more, giving big tax breaks to people on ordinary incomes, is of course different to the priorities of the Conservatives but I think you can do that while still being respectful towards each other and having a business-like approach in government, in a coalition government, on behalf of the nation as a whole. I mean over the last two and a half years I’ve lost count of the number of predictions that I’ve read which breathlessly say that the coalition can’t possibly survive this challenge or that challenge and we overcome them every single time because there is a simple principle at stake with different parties, with different values and priorities but nonetheless governing in the national interest within a coalition government.

DM: But some commentators though have been saying about Eastleigh, there you are, you’re in coalition, it’s a Lib Dem seat, surely the Conservatives shouldn’t try so hard to win it off you. They should more or less say have it back, we’re working together.

NC: I don't think any party should step aside for another party. Democracy is all about competition, it’s all about competing ideas, it’s all about giving people a choice and I personally am always against any whiff of stitch ups because I think it’s important to give people a choice and even though we’re governing together, there are differences between the Conservatives and the Liberal Democrats and I actually think for us as a party it’s a great opportunity to highlight some of the things we’ve done – giving people the biggest tax break in a generation by lifting the point at which people pay income tax, delivering, Vince Cable’s been championing this, more new apprenticeships in the Eastleigh area and across the country than ever before, promoting quality affordable housing for young families in the local area whilst protecting green spaces at the same time. This is the kind of thing, this is the bread and butter stuff that Liberal Democrats do in government and do in Eastleigh and do around the country and actually I’m relishing the opportunity for us to finally get out of the offices of Whitehall and tell people what we’re doing for them.

DM: How much of an issue do you think Chris Huhne’s going to be in that by-election? It raises for the Liberal Democrats the whole issue of trust, he told untruths and has been found out, that’s why the by-election is taking place.

NC: That’s undeniably an issue isn’t it, because that is why the by-election is taking place and as I’ve said before, I was very shocked and sad to see what happened and to see, well frankly to see that his whole family is engulfed in this in a very public way. You must have a heart of stone not to think it’s a pretty shocking and sad thing.

DM: Were you personally disappointed in him because he must have lied to you, when the issue came out you must have sat down with him and said Chris, is this true or not?

NC: I took what Chris said at face value and he then rang me the night before he entered his guilty plea to tell me he was doing so. I’m not going to start providing a running commentary on events that have happened and of course a sentence hasn’t even been handed down to him yet and it’s very important that the legal process is allowed to continue.

DM: He pleaded guilty, we know that but he lied to you, a guy you’d worked with for so many years, one of your closest colleagues, your leadership rival.

NC: At the end of the day Chris needs to speak for himself and he needs to answer himself and he needs to make amends for what has happened and what he’s done. I don’t actually think at the end of the day when people come to vote in Eastleigh on February 28th, whilst they may have strong feelings one way or another about Chris Huhne, I’ve heard lots of people say well they don’t like what’s happening in the court but they actually think that what he did as a local MP was the model of a Liberal Democrat working hard for the local community. I actually think most people will be able to separate the courtroom drama – which at the end of the day is a very private drama being played out in public by divisions within a family. I don’t think people will make their judgement on that about who they want to represent them in parliament for the future. I think what people will care about is what does it mean for jobs in the local area, what does it mean for housing in the local area, what does it mean for fair taxes in the local area and those are the kind of things that we will be campaigning on between now and by-election day.

DM: Are you going to spend time in the constituency?

NC: Sure, yes, yes, I love campaigning and I look forward to doing so in Eastleigh.

DM: Are you co-ordinating diaries with the Prime Minister to make sure you’re not in the constituency at the same time?

NC: We’re not co-ordinating diaries. We may end up there at the same time, that would be a change from sitting around the same table in Whitehall to actually be campaigning in different streets in Eastleigh.

DM: Okay, I want to move on to the issue of fairness. If anything, the Lib Dems stand for fairness and it’s fairness in a time of austerity. Let me relate it to this issue much talked about this weekend of social care for the elderly and how we actually afford it, how we’re fair to people and make sure that they don’t have to lose the assets they’ve accrued over a lifetime to pay for their social care yet make sure that not too much of the burden falls upon the state.

NC: Exactly and we will be setting out in detail on Monday how we’re finally going to crack this conundrum that has eluded so many governments in the past. Do you remember Tony Blair saying no one should have to sell their home for care, he declared at his conference. Labour then set up a commission to look at it and discarded it, I think we’re … actually the virtue of coalition is two parties looking for the long term benefit of the country, we’re finally cracking this and it’s partly of course about saying people shouldn’t have to sell their homes to pay for care. Actually I think one of the things that’s overlooked, which I hope people will really pay attention to when we make the announcement, is at the moment you basically have to start paying for your care if you have assets of more than about £23,000, regardless of whether you own a home or rent a home. One of the bits of the announcement we’ll be making at the beginning of the week is to say we are going to dramatically increase the means test threshold and …

DM: Can you give us a figure because Dilnot recommended about £100,000?

NC: Yes, I don’t think people will be disappointed. I’m not going to give you a figure, Jeremy Hunt and Norman Lamb will set out the details but what I can tell you is they will very much act exactly as Dilnot recommended by dramatically raising the point at which the assets that you have before you have to start paying for your own care. That will help many, many people, not just those people who otherwise might be selling their homes which might be worth quite a lot to pay for their care but many of those people who don’t own their homes or own homes which aren’t worth very much in other parts of the country. So I think it is a fair thing to do, I think it is a great breakthrough. We won’t be able to do it overnight but we’ll set out the precise timetable.

DM: So when, 2017?

NC: We’ll set out the precise timetable in the announcement we’re making at the beginning of the week.

DM: You know what’s coming next though, how are you going to pay for it?

NC: Yes and we’ll also set that out as well. We’ll also explain how we’re going to pay for it because you’re quite right, I don't think in this day and age we can do what politicians used to do in the past which is promise lots of goodies and not spell out how you’re going to pay for it. So we are going to spell that out as well.

DM: Well this is one dimension as we look at the overall health environment, the NHS, but of course it came up last week, the searing indictment of the NHS in the Francis Report, Mid Staffs. Do you not think, and the Prime Minister alluded to it, that somebody should carry the can, somebody should bear responsibility? Hundreds of people died unnecessarily.

NC: I totally share the public instinct which says that the shocking report, the details of people being left to lie in their own urine for hours, days on end, people having to drink water out of flower vases, it’s just literally unbelievable for many people that in this day and age that should happen in our NHS, which otherwise provides such excellent and compassionate care to many people and yes, I think as Jeremy Hunt has rightly said, where the police can identify clear culpability they should look at the evidence and do so.

DM: Look at the job you do, if you are caught fiddling your expenses you’d probably resign. If you have an inappropriate special advisor, you go. Hundreds of people died here and nobody has done the decent thing.

NC: If you really want to know, my own view has always been that there are parts of poor and criminal behaviour in our society where we are sometimes not tough enough. White collar crime, we’re not as tough as the Americans in saying if someone has committed a white collar crime and other people have had to pick up the pieces, we’ve seen the anger, the quite legitimate public anger about the terrible failings in the banking system. I think quite understandably people say when are people going to be held to account for this but who is held to account for what offence is of course at the end of the day a matter for the police. That is why it is quite right that Jeremy Hunt has said the police should be able to follow the evidence where they …

DM: Isn’t it a matter for the individuals to do the decent thing, to say the buck stops with me?

NC: Of course some of the individuals who were in management responsibilities at the time are no longer in those positions of responsibility and have long moved on so you need to look at the detail and I can’t provide a running commentary on exactly where the evidence will lead.

DM: Can I just lastly ask you about the gay marriage vote last week? Were you disappointed with your Lib Dem colleagues who voted against it and those that abstained?

NC: I’ve never sought to take a recriminatory approach to people who have got perfectly sincere and well-argued views.

DM: But if they are Liberal Democrats surely they should believe in equal marriage?

NC: The reason we had a free vote is that this touches … it is Liberal Democrat party policy to allow for same sex marriage but this does touch upon some very deeply held views about what the definition of … In effect what we saw in this debate was two competing definitions of the same word, one set of people saying marriage is about procreation, it’s about a man and woman basically creating for having children and another set of people, myself included, saying no actually it’s about love, it’s about commitment, it’s about celebrating the love that people want to demonstrate and commit to, to each other, and us being positive about that. Now those are two competing views and my own view is that those two views can co-exist even as they share the same word and it was right for us to say that wherever you find love, wherever you find commitment, we should celebrate that in the form of marriage.

DM: Okay, I said lastly on the last one but this really is the last question. There’s a kind of, let me say, a stress watch on you when it comes to government, how is Nick Clegg faring under the pressures of coalition and it’s measured by smoking, tobacco watch, are you back on the cigarettes?

NC: I’m off the fags at the moment, I’m off the ciggies at the moment but I have been on and off enough to not make too many bold promises about the future but I am certainly free of them at the moment.

DM: Okay, I’m glad to hear it. Mr Clegg, thank you very much indeed for your time.

NC: Thank you.