ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Well now, reshuffles are tricky at the best of times but coalition creates a whole new headache for the Prime Minister, so who’s for the chop and who’s about to step into a shiny new Ministerial car? Well one man totally secure in his job – unless perhaps he’s made a better offer – is the Foreign Secretary William Hague who joins me now from Darlington in North Yorkshire. Foreign Secretary, if we can start first of all with dithering. It could be said that when the Prime Minister talks about cutting through the dithering that’s something you should have had a sense of urgency about two and half years ago when you came into power, it could be said you’ve been dithering about cutting the dithering.

WILLIAM HAGUE: I think there has been a sense of urgency about that all along and of course we have done a great deal about that. Some of the reforms the Chancellor has brought in on taxation, cutting Corporation Tax, bringing 24 new enterprise zones around the country, we have already got rid of about £3 billion a year of red tape costs to businesses but there is more to be done, that is what the Prime Minister is saying. It is frustrating often in government the amount of rules and regulations that have to be confronted for people to get things going in the economy so is there more to be done on that? Yes, there is but I think we have already done a lot over the last two years.

DM: I guess it could be said that two and a half years ago you didn’t expect things to be as bad as they are, in actual fact worse, back in double dip recession.

WH: Well as we know the whole western world, much of the world, has very serious economic problems. The financial system has been damaged, from the financial crisis of 2008 onwards and we are seeing the continuing effects of that. Now I think the world has changed permanently, we have got the new competition from emerging economies as well. Some countries in the western world are going to adapt to that and some aren’t frankly. Well we have to make sure that our country is one that does adapt to that and that is what the government’s reforms of education that Michael Gove is taking through, the welfare reforms of Iain Duncan Smith has pioneered, these reforms are absolutely critical to making sure that our country is well prepared for the future and again there has been a huge amount happening on those things over the last two years so we are part way through rescuing this country and rescuing it’s economy, that’s how I see it.

DM: Yes, but the issue of how things have changed in the two years and a bit since you came in to power, the circumstances have changed and yet the core economic prescription, as we heard from the Chancellor this morning, has not. Don’t you think that something else should be done to try to get the economy going?

WH: Well the things the Chancellor has been talking about have to be done whether we like it or not, whether people in general like it or not. There has been a debt crisis, a financial crisis, there is no alternative in that situation to getting debt down, getting the deficit down. We have already cut the deficit by a quarter and that is again what many governments across the world are having to do and so there is no escape from that but we also have to do things to help people in to work which we’re doing, we’ve got this huge increase in the number of apprenticeships – more than 450,000 people in apprenticeships now in this country, we have to get banks’ lending to business and of course the Funding for Lending scheme the Director of the Bank started a month ago on 1st August so we haven’t seen the effects of that yet, but of course we have to do those things as well and as we go along there will be additional ideas for how we do those things and those fundamental things that we have to do are underway.

DM: The other ideas are … at the core of all this seems to be the issue infrastructure and at the core of that the issue of a third runway or some other solution to the capacity crisis in the south-east when it comes to aircraft. You were talking I know about some kind of radical solution to that, what’s in your mind?

WH: Well first of all on infrastructure, that is an area where we have made the fewest reductions if you like in the plans of the previous government, we haven’t reduced the plans for infrastructure investment that we inherited so that’s a part of the economy where government has continued to spend what we can to improve the infrastructure of the country. On airports there is a study that has been commenced already on aviation policy by the Department for Transport and there will be further work over the coming months, coming year or two, about how to address this problem of how we remain a major transport hub, aviation hub and I don’t want to pre-judge what the experts or the Department of Transport will consider. It is important to do it, that’s what I would say. You can connect with more cities around the world from London’s various airports than from any other capital city in Europe, well we have to make sure that’s still the case.

DM: But a sense of urgency and the quickest thing to do is to build a third runway at Heathrow.

WH: Well you will remember of course, everyone will remember that we very clearly said, both coalition parties said in the election campaign that that’s one thing that we wouldn’t do and I think it is very important to keep to election promises. Sometimes circumstances change so radically, as everybody understand, that that’s not possible but in this case these circumstances have not changed so radically so it is important to stick to that election promise, it’s important to make sure we make the right decision about this and to study all the options and that is what the government is now going to do.

DM: But cut through the red tape, cut the dithering, build a third runway.

WH: Well as I’ve just explained that’s not something that this government, this coalition will be doing because we said very specifically we wouldn’t be doing that and as you know, the construction of an airport, a runway, takes such a long time this does not have an immediate effect on the economic situation now and on our airport capacity now. There are other things that do have an effect such as getting lending from the banks to the businesses, such as making it easier for a whole range of developments around the country to go ahead more easily, that’s why we’ve changed the planning policy framework. These things have a much faster effect by the way than changes in airport policy.

DM: I mean you talk there about the coalition agreement and there we have it, the constraints put upon you because of the coalition agreement, it’s in there, it was in your manifesto as well. Do you predict a bumpy ride ahead now with the Liberal Democrats as we’ve seen over the summer and before then, beginning to articulate policies that are entirely different from the Conservatives?

WH: Well there are bound to be some differences in a coalition, it’s a coalition, not a merger and it would be amazing, it would be unprecedented anywhere in the world for parties that are in a coalition to have no differences between them. Of course there are bound to be, that has always been the case, there will be ideas floated by one party that are not agreed by the other party and we saw Nick Clegg ten days or so ago talking about a new wealth tax. Well clearly in the view of many of us that wouldn’t be the right thing to do, we need entrepreneurs, we need businesses to concentrate in this country, to be in this country, not to drive them away so we will have differences but look at all the things that we are doing together. On taxation, a million people at the lower end of the income scale lifted out of income tax altogether or in employment, although the public sector employment is shrinking as it needed to do, we’ve now got 900,000 more people in private sector employment than at the time of the last election. These are important achievements of the coalition based on policies that we are carrying out together so yes, there will be differences in a coalition and there are differences in a government even of one party as we remember from the last government in particular, but those differences don’t stop us achieving the kind of things that I am describing that are again fundamental to this country’s future.

DM: And presumably in your book things will get better because this is with the current team and there is going to be a reshuffle and we are going to see some fresh blood on those front benches and in the Cabinet so you think things can only get better?

WH: Well all of the things that I’m describing are intended to make sure our economic future is a better one and I’m confident that they will but it is hard to put timescales on these things. As I say, the economy of most of the western world is quite seriously damaged by the financial crisis, we have the eurozone crisis going on which undoubtedly has a chilling effect on our own economy so it is very important to realise that this takes time and is taking time but the kinds of progress of growth in employment, of growth in apprenticeships and so on that I’ve just been describing is taking place and yes, whatever happens in the coming reshuffle it will be a reinvigorated team ready to take that forward.

DM: Okay, I mean it’s that message that it will take time that doesn’t seem to cutting it with the public any more does it? You have seen your popularity as the coalition and as the Conservative party plunge over recent months and it is getting that message out there and the point person in that is the party Chairman who has been Baroness Warsi and there have been a lot of grumblings of discontent about her performance within the Conservative party itself. Is that one key role you would like to see changed?

WH: Oh I’m not going to … I realise why you will ask me these questions about who I would like to see changed, who is likely to change. You will also understand that I can’t give the answers to those questions. The reshuffle is not far away so the answers to these things will soon be apparent but I’m not going to add to the speculation, comment about individuals. I think actually around the Cabinet table my colleagues have done the most remarkable job in difficult circumstances, including Baroness Warsi, over the last couple of years but of course in reshuffle some will have to change, some will move on to a new challenge and so on but that will become clear before too long.

DM: But would you like to see some new talent, well you have said that, you would like to see new talent coming in and I’m thinking not of positions but of names, David Laws who for reasons which we won’t go into now had to resign very early on into the formation of the government. You had a lot to do with him I know during the coalition formation discussions, is that the kind of talent you would like to see back sitting around the Cabinet table?

WH: Well I have huge respect for him. As you say, he was part of the coalition negotiations that I was part of on the Conservative side and there’s a very, very talent individual but of course that will be up to Nick Clegg as leader of the Liberal Democrats and Deputy Prime Minister and up to the Prime Minister in the reshuffle of the government to determine who is taking what position so I’m not going to say as Foreign Secretary who should go where. If I have any advice to give on that I will give it confidentially to the Prime Minister, I can’t go into that on a television programme, you understand that very well.

DM: Of course I do, of course I do and I know how much you are enjoying the role of Foreign Secretary but if you were asked to play a key economic role is that something that you would consider? You don’t have to tell me whether you’d take it or not.

WH: Well again, I’m not going to add to reshuffle speculation. As I say, it’s not far away. I’ve always said, in fact for years, that I came back to the front line of politics to do the foreign affairs portfolio, it’s not a new thing for me to say but I’m not going to add to any speculation about things at this stage. We’re nearly halfway through the parliament, I think it’s a very good thing that the Prime Minister lets people do their jobs and doesn’t move them around every six months or every year, we’ve seen a lot of too rapid changes sometimes in ministerial personnel in previous parliaments sometimes of both parties, that’s a good thing. Clearly we are now coming up to a reshuffle but I’m not going to go into it in any more detail than that.

DM: Message received and understood. Foreign Secretary, thank you very much indeed, William Hague there.