ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: As you saw there, UKIP are making headway in British politics, they are now the country’s third biggest party, that’s according to those three different polls in today’s papers and despite knocking the Lib Dems into fourth place, they pose a real electoral threat to the Conservatives. In a moment I’ll speak to the Secretary of State for Communities and Local Government, he is of course Eric Pickles. Well let’s say a very good morning to Eric Pickles.

ERIC PICKLES: Nice to be here.

DM: Let’s start with that UKIP poll and the threat it poses to the Conservatives. They’re making headway, it seems they are the hot breath at your back because they’re saying things that a lot of Conservative voters probably like to hear on Europe – immigration, gay marriage.

EP: A party makes a mistake if it thinks that UKIP is coming exclusively from the Conservatives but they do represent a voice and I am very firmly of the view that the only way you deal with them is to get dug in and to fight them on the ground on community issues. I certainly don’t feel that we should have a pact with them or that it is always assumed – think this is absolutely wrong – always assumed that some kind of a deal could be done and people would flood back to us. No, government sometimes has to make some very difficult decisions and mid-term you’d expect a part of opposition – I saw your earlier programme which talked about them being a party of dissent and I wouldn’t disagree with that but I do take them very seriously.

DM: Okay, dissent or not, particularly over Europe, do you think you as a party have to neuter them on Europe pretty soon and get this statement from Mr Cameron, the Prime Minister, on what exactly he’s going to renegotiate with Europe and when and if we’re going to have any kind of vote on it?

EP: I think certainly, I mean this weekend the Prime Minister has been engaged in meeting with European leaders, we seem to be moving towards a … a European bank is going to stand by individual banks, something the Prime Minister has wanted for a while but I think next year is going to be an exciting one, one hopes that the arrangements with Greece will hold, one hopes that the arrangements with Spain hold but I wouldn’t want to guarantee that and sooner or later, those that are in the euro are going to want to have a different arrangement to countries like ourselves who are outside Europe.

DM: But are voters, are Conservative voters and people who are considering voting Conservative, going to have a clear view on the Conservative’s position, that we will be offered a referendum in some way, shape or form and that will be in your manifesto by 2015?

EP: Well I think it is kind of important that if we do have a referendum about our future with Europe, it’s got to be on the basis of not trying to outsmart UKIP or trying to ensure that we can bring the whole of the Conservative party in one, it should be in the national interest, it should be something clearly that lays out for the British people a clear alternative. Something as important as our membership of the European Union shouldn’t be about tactics …

DM: But just, Mr Pickles, on the timing of that, when might we hear about that?

EP: That’s a matter for the Prime Minister, that’s way, way above my pay grade.

DM: Okay, can I ask you about coalition politics and as a dimension of this poll, there are the Liberal Democrats there in single figures and a lot of Lib Dems saying it’s the coalition that’s costing us?

EP: Well I think the Liberal Democrats have got to work out their own tactics and it would be – I wouldn’t have the temerity to advise them but I would have thought that their future and the Conservative party’s future, very much depends on us being able to deliver stability to the British economy, to be able to demonstrate to the British people that all the sacrifices they’ve had to make have been worth it but I do recognise that they are a different party to us and I have, charming though they are, I’ve got no desire to have a long-term relationship.

DM: Okay, I mean one of the other big appeals of UKIP is of course on the issue of immigration. Of course there’s the cap that you as the government have brought in, we heard from Mr Miliband last week talking about Labour’s record on immigration and seemingly saying that they made one or two mistakes, one of the biggest ones being that they haven’t really encouraged integration in terms of being forced to learn English. You must welcome that from the Labour party.

EP: I do welcome that, I think the great thing about Labour’s open door policy was it was never really put to the electorate, they never got a chance to say well this is a good thing or not but all over the world, from New Delhi through to Beijing to the Philippines, ambitious parents are getting their children to learn English and to learn English well. That should be an aim for all our children in England right now because it’s not a question of can you do the job, it’s a question of can you socialise, can you unite in the things that make us all British. I have no doubt that the various waves of immigration have made this country a stronger place, we’ve just celebrated forty years of the Ugandan Asians coming to us and, you are probably too young to remember but I can remember newspaper adverts saying ‘Don’t come to Leicester, we’re full up’ yet there can’t be any doubt that Leicester’s prosperity now firmly rests on that wave of immigration.

DM: What about the issue, Mr Farage making great headway on this, making great play about it, on gay marriage within the Conservatives? We all accept that the Conservatives as a party are split on this, many of your members have different views to the leadership, I mean is it something you feel that is really worth persevering with?

EP: Sometimes in politics you’ve got to do what right. I think Mr Farage looks like he’s on the make on this, it looks like he’s doing something for political reasons, to try and exploit what he sees as a split in our party. We can have a free vote. Now I used to feel like Mr Farage felt, I used to feel that marriage was just for men and women. Now about a year or so ago I change my mind, I’d seen constituents that had had a civil partnership, I’d seen friends that had a civil partnership and I think it’s perfectly acceptable, it’s a marriage in all but name and this is a civil marriage, it’s not a religious marriage. If we were forcing churches to do it, that would be another entirely other story.

DM: But just on that, Mr Pickles, I mean why don’t you just allow churches that want to carry it out to carry it out, do that kind of exemption? Why ban them all when some actually want to carry out …

EP: No, we’re not banning them all, we’re just banning the Church of England but…

DM: Even within the Church of England there are congregations, there are vicars, there are priests there who would carry out gay weddings.

EP: I can understand but the irony of those in the church saying we don’t want to be forced to do it and then we provide a mechanism where they won’t be forced to do it, it’s not entirely lost on me. Remember, the reason why we’re doing it for the Church of England is because the Church of England has an obligation to marry anybody, whether they are a member of the Church of England or not, so we are specifically exempting the state’s church.

DM: Okay, we must get on to your patch, local government, and more tough times ahead going in to 2015, for local government. You’re asking for more cuts, it’s going to total what, something like a one third, a 32.9% cut in local government funding by 2014/14?

EP: You’ve got to bear in mind that local government is a quarter of all public expenditure, it’s impossible to exempt …

DM: But can they take this strain, can they take more?

EP: Well there’s more to local government finance than simply the grant they receive from the government. We’re changing the way they’re being financed, they will be able to keep growth in the business rates, they have other ways of raising money, we are making a number of suggestions to make a change and perhaps the biggest test of all is if things are really tight, how come council reserves have shot up?

DM: But have they shot up?

EP: They have shot up, yes.

DM: To what extent?

EP: I understand you’ll have the Mayor of Liverpool on, Joe Anderson, well one question you may care to ask him is reserves now I think are £146 million, they have gone up by nearly a quarter in a year. Now that isn’t a sign that their council is doing terribly badly.

DM: I’ll put that very point to him but I want to pre-put a point that he I know wants to put to you, he is saying that they can’t cut services much further at all and if they do he’s mentioned riots on the streets.

EP: Well you know, when we had the riots last year, Joe was one of the first people that I rung because he’d had some problems and he was the very first to assure me that this had nothing to do with the cuts in public expenditure but the reason we’re doing it is to avoid rioting on the streets. We can see the alternative to our policy and that’s what’s happened in Greece. We need to ensure that we can pay for pensions, that we can pay for benefits, that we can contribute to the life of the nation and we’re not taking this money out of some ideological push to reduce the size of the public, it’s simply the public can no longer afford to pay for it.

DM: But it’s the cuts from central government, and you are also encouraging councils, although not legislating, to freeze council tax, they’re getting squeezed at both ends.

EP: Indeed, they can put up council tax as you point out, providing that their local population wishes to do so. Now for years they’ve been saying to people in my position, look, we’ve got a good reason for putting up council tax, maybe Joe has got a good reason for putting up council tax. Well fair enough, Joe, put the council tax up, you don’t need to persuade me anymore, you need to persuade the people of Liverpool.

DM: Okay, put it to a referendum. The issue you mentioned there about some of the money saving tips your department has been sending out to councils, given the amount of money you want them to cut – ban mineral water from meetings, open cafés in libraries, give prizes for good ideas from staff. I can’t read out all fifty – pop up shops, are these …

EP: Don’t read the small stuff, we’re talking about better procurement, collecting of tax, cutting down fraud, sharing services, sharing offices – now that will bring about billions of pounds of savings. The stuff you mentioned, it’s actually an attitude of mind. You need to get into that and feel that it’s not just your money, it’s the taxpayers money. Now I’ve led from the front, we’ve reduced out staffing within the department by 44%, we publish all our credit card spending online and tomorrow I’ll be doing my bit to change a little bit by way in which the department’s run, we’ll be announcing a new service available in Eland House.

DM: Okay, can I just ask you one specific which was on the front page of the Financial Times this week which isn’t in that list which is about abolishing discounts on second homes, abolishing council tax discounts. Is that something you would encourage councils to do?

EP: To give them discretion to do it …

DM: Why not go ahead and do it, make some money out of this?

EP: It was in the Local Government Bill, they have been asking for all kinds of discretion, I wanted to protect pensioners and we ensured pensioner protection was in there but local authorities, it’s all about freedom and responsibility.

DM: But what’s your view? I mean a lot of wealthy people with second homes in this country, leaving them empty most of the year, letting them out every now and again or using them as their holiday home maybe, why shouldn’t they pay full council tax on it? The bins are still emptied, the streets are lit outside their houses.

EP: Why not indeed? That’s why we’ve given it to local authorities to decide.

DM: Okay, we can read into that what we will. Mr Pickles, thank you very much, very good to see you here.

EP: Thank you.