ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: First of all this morning, the war of words on EU immigrants continues. The Work and Pensions Secretary, Ian Duncan Smith, says he wants to ban migrants from other EU countries claiming benefits in the United Kingdom for up to two years. So is that a dog whistle to Conservative voters who are minded to vote UKIP and does it present a new political headache for Labour? Let’s say a very good morning then to Rachel Reeves, the Shadow Work and Pensions Secretary. What about that proposal, or he is thinking about it anyway, from Ian Duncan Smith about banning EU migrants from accessing benefits here for up to two years?

RACHEL REEVES: Well first of all the majority of EU migrants that come to this country come here to work and they work incredibly hard and contribute to our economy but it is also right that we protect our social security system and our public services from any abuse and that’s why Ed Miliband and Yvette Cooper said in March last year that there should be restrictions about when EU migrants can claim benefits and in December last year Ian Duncan Smith announced that that would be after three months and we very much supported that. To get further change would need change to EU Treaties but we are in favour of the government working with other European countries to put in place those further restrictions, whether it be to child benefit or to job seekers allowance.

DM: So three months to two years is something you would go along with? I mean we understand that …

RACHEL REEVES: We haven’t heard the proposals yet from the government. He said one to two years in that interview with the Sunday Times but he seems to have rode back a little bit from that this morning. If they come up with concrete proposals that are workable, that are practical, that protect our social security system, that protects that principle that you have to pay something in before you get something out, then we would support that.

DM: So that’s a direction you could travel in?

RACHEL REEVES: But also the government need to do something about tackling exploitation in the labour market when it comes to migrant workers because there are some exploitative employers who are getting away with paying less than the minimum wage to migrant workers, who are deducting housing costs for example from people’s wages, who are advertising jobs overseas but not in this country and if we want to do more to reduce our unemployment rate and get down those unacceptably high levels of youth unemployment, we need to do more to tackle abuse in the labour market.

DM: Okay, tell me more about those EU migrants who do come here to work. We heard from the Shadow Business Secretary, Chuka Umunna there, he was talking about in some way looking at those people and saying perhaps some of you shouldn’t come here, you are unskilled, you have come to work but you are unskilled and perhaps something should be done to restrict you coming here. You can’t do that within the European Union, it’s a fundamental principle isn’t it?

RACHEL REEVES: What Chuka was saying is that people should be able to come here to work and to access jobs but not to play the system and that is incredibly important because it has got to be right that you only get something out of our social security system if you put something in, you shouldn’t be able to move around the European Union in search of the best benefits.

DM: So he was only talking about benefits was he, I thought he was talking about jobs as well?

RACHEL REEVES: He was saying people can come here for jobs but not just speculatively to claim benefits and that is important, really important, because we do need to ensure that our social security system is fair and seen to be fair as well by British taxpayers …

DM: You are thinking hard within the Labour party about Europe and there is also the overarching issue of a referendum. Is it true though that there is a bit of a mess in terms of policy within the Labour party that Ed Balls and Douglas Alexander have to be pulled apart over the issue of Europe?

RACHEL REEVES: Well I read that in the paper today and I attend Shadow Cabinet and I haven’t seen anything like what was written about today. Of course we have discussions within Shadow Cabinet …

DM: But is it a robust discussion?

RACHEL REEVES: You know, we’re discussing politics and we have robust discussions but Ed Balls, Douglas Alexander, Ed Miliband and the Shadow Cabinet are …

DM: What, they’re all involved?

RACHEL REEVES: … are united, are united. I haven’t seen any fisticuffs in the Shadow Cabinet with Ed or Douglas or anyone else.

DM: It would certainly liven things up. Okay, let’s get back onto your patch, there has been a lot on benefits recently. What about this from the Prime Minister that in effect pensions for the foreseeable future are entirely safe from any cuts, the so-called triple lock on pensions, is that something Labour is going to endorse?

RACHEL REEVES: We are absolutely committed to the triple lock. It is incredibly important that people in their retirement who have contributed all of their life to have that certainty that in retirement their income is going to be protected, so we’ve always been supportive of that triple lock.

DM: But you know what it costs the country, I mean a huge proportion of the welfare budget goes on pensions and obviously if wages rise then obviously those pensions will follow them up so it’s going to cost more and more.

RACHEL REEVES: Those people have contributed all of their working lives into the system, in their retirement they should be able to draw down that money but we’ve also said that the richest pensioners shouldn’t be able to get the winter fuel allowance, so we recognise that tough decisions are going to have to be made and we’ve also said that we will support increases in the state pension age but that triple lock ensuring that the basic state pension rises in line of what is ever growing faster out of inflation or earnings or 2.5%, we’re supportive of that.

DM: But as I see, it is your ambition to see wages going up, do you think that is sustainable forever more or is it just for your election manifesto? 47% of benefit spending is spent on pensions, £74 billion at the last count, surely something has got to give?

RACHEL REEVES: Well first of all those people have contributed all of their lives into the system and they draw down that money. They pay into National Insurance and tax during their working lives and they get their pension in retirement and that is fair and proper but what is not sustainable is that prices continue rising at faster rates than wages and we’ve now got more than five million people in this country who are being paid less than a living wage. We need to put more effort into ensuring that the minimum wage keeps pace with the rising cost of living and to ensure more people are paid a living wage. That’s why we’ve talked about the Make Work Pay contract for instance, that’s why Labour councils are increasingly paying a living wage rather than a minimum wage.

DM: But that chunk of welfare spending is sacrosanct from Labour’s point of view as well. What do you hear when you hear the Chancellor then say we can get another 12 billion out of the welfare budget? Do you think that’s just going too far, something that cannot be done?

RACHEL REEVES: Well you know, George Osborne makes these claims that we need to cut the welfare budget by another 12 billion pounds and yet there is nothing behind that claim and that commitment because he talked about housing benefit for under 25s and council housing going to people that are on higher incomes. Those raise millions, not billions, of pounds. We haven’t seen any concrete proposals, we hear a lot of rhetoric but very little in practice. All we can see with this government is social security spending going up because they are not doing enough to tackle the problems of long-term unemployment, they are not doing enough to build the housing so rents are going up and housing benefit is going up and they are not doing enough to ensure that people are working full time in decently paid jobs and so tax credits are going up as well. So we would do concrete things like introduce the compulsory jobs guarantee, so no young person can claim unemployment benefit for more than a year, they’d have to take that offer of work. We would introduce the Make Work Pay contract and we would tackle the abuse of zero hours contracts, all of those things would help get the social security bill down by ensuring more people are in better paid full time work.

DM: Okay, I just wanted to ask you a very important question about housing and you are writing in the Sunday People today aren’t you about what you call the ‘hated bedroom tax’, what the government calls the Spare Room Subsidy. Reading it, is your objection to it basically that it’s unfair or that there are not the properties available? Should people have to downsize they are just not available because that’s what you say in your article, in your constituency there aren’t the one and two bed flats available. If there were, would you support it?

RACHEL REEVES: The bedroom tax manages to be both incompetent and unfair at the same time. There are many people hit by the bedroom tax who haven’t got the smaller properties to go to so in that way it is incompetent but if they were there, then I think it is appropriate that people are helped to downsize if they want to but if there aren’t properties to move people to, then that’s impossible. But you have also got the situation where people have been told they have got a spare bedroom but actually that bedroom is being used for a carer to come and stay or that bedroom is used by a son or daughter returning from the Armed Forces or from university during the holidays or to store essential equipment for example for dialysis and people with kidney conditions, so many of these bedrooms aren’t spare at all. It’s unfair, it’s unworkable, it’s incompetent. The government should scrap the bedroom tax and if they don’t, then Labour will in 2015.

DM: Well we are out of time, you’ll have to come back and tell us where the savings will come from. Rachel Reeves, thank you very much, the Shadow Work and Pensions Secretary there.

RACHEL REEVES: I look forward to it.