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DERMOT MURNAGHAN: Now the Tories begin Parliament’s summer recess this week on a bit of a high. At Prime Minister’s Questions David Cameron reminded MPs that crime and unemployment are down, welfare is capped and Abu Qatada has been deported back to Jordan. So does this put Labour then on the back foot when Parliament returns in the Autumn? In a moment I’ll speak to the Senior Conservative Minister, Michael Fallon, and the Shadow Energy Secretary, Caroline Flint. I’m joined now as I said by the Conservative Business Minister, Michael Fallon, a very good morning to you. Is there a spring in your step and is it all down to the Prime Minister and the Conservatives?

MICHAEL FALLON: Well I think it is clear now that the economy is beginning to recover and that’s important. Unemployment is falling, more private sector jobs are being created and tax cuts have come through, 25 million people got a tax cut back in April and that’s come through as well but I think to be frank we’re also helped by Labour’s position. We have probably got the weakest Labour leader now since Neil Kinnock, he is having his MPs selected by a Trade Union leader who chose him ahead of his brother, he won’t decide whether to give people a referendum and really he’s not showing the kind of leadership that we need.

DM: Well let’s pick some of that apart. First of all with the economy, the tax cuts, well that’s Liberal Democrat policy, you don’t seem to be paying credit to them. I was discussing with Tim Farron, the Lib Dem president a bit earlier, that all the benefits of what’s been happening seem to be accruing to the Conservative party or you seem to be trying to claim them. Isn’t it a coalition?

MICHAEL FALLON: Well it is a coalition and they were right to focus on taking more low paid people out of tax, we’ve taken over two million low paid people out of tax, but we also want to help everybody who’s working hard and make sure they keep more of what they earn, so 25 million people got a small tax cut in April and we’ve re-engineering the welfare system so that it’s more worthwhile to work and we’ve capped the amount of benefits that those who are not prepared to work can receive. That helps everybody.

DM: What do you say though to, on the front page of the Sunday Telegraph today, Graham Brady and Bernard Jenkin, your colleagues who say it is time now to start thinking fairly soon about decoupling, about ending the coalition, we’ll continue to govern and hope the Liberal Democrats support us on a supply and confidence basis but time to really stand out now on our own identity?

MICHAEL FALLON: Well there is the national interest at stake here. Chancellor Merkel of Germany comes up for election this September but every other government, every other coalition right across Europe has gone. This one is sticking to it, the public finances are slowly coming right, we set out a five year programme, it’s the first time we’ve had a fixed parliament in this country and we set out a five year programme all the way through to May 2015 and I think in the national interest people would expect us to finish that job.

DM: So Graham Brady and Bernard Jenkin, I mean some are even saying, and unquotable, are saying what about an early election perhaps with the economy beginning to perk up?

MICHAEL FALLON: No, I think that’s the whole point of having a fixed term parliament, business and everybody else can see that we’re in it for the five year term. Now that doesn’t mean of course that we’re not doing Conservative things, we are doing Conservative things and I think you’ve seen that with our policy on Europe, we’re determined now to give people the first referendum for over 40 years, the Liberal Democrats won’t give you that. You’ve seen that with a tougher line on immigration, we’ve cut it, it’s falling now, the Liberal Democrats wouldn’t have done that and you’ve seen it with benefit reform as well.

DM: You mentioned Labour in your first answer there and Mr Miliband and a lot of people are putting down the change in emphasis, the change in attack from the Conservatives, to Lynton Crosby, the election strategist advising the Conservative and saying look, as you did there, you’re saying there in the power of the unions and you’ve turned what could have been a big negative on all those NHS reports, you tried to point back to the last administration about that, welfare spending, it goes on. Areas where you are posing major questions for Labour.

MICHAEL FALLON: Because you come back to Labour’s central flaw which a weak leader hasn’t been able to correct which is they still can’t admit that they overspent. Everybody now realises the last Labour government overspent, they won’t admit it and he won’t move Ed Balls who still thinks the only answer to every problem is to borrow even more than we are borrowing at the moment. Until he tackles that central question he really I don't think is fit to pose as an alternative Prime Minister.

DM: But has Lynton Crosby helped, has he helped focus the Conservative attack?

MICHAEL FALLON: Oh yes, I mean that’s his job, is to advise the Conservative party, as he advised in Australia, the Australian leader John Howard who won successive elections and he’s sharpened up our act and made us focus on the things that really matter to people.

DM: And has he advised, I mean this issue about plain packaging for tobacco products, Tim Farron was saying well it looks dreadful. Do we need to know what influence he has had on policy?

MICHAEL FALLON: No, he advises the Conservative party on its presentation and on how you get the policies over, he does not get involved in policy. He is not a Minister in the government or anything like that, he’s over at Conservative headquarters, he advises on presentation, he doesn’t get mixed up in policy.

DM: So presumably, just on that narrow issue of plain packaging for tobacco products, if evidence comes out that it actually has had an effect on making people stop smoking and have access to tobacco products in places like Australia, if that evidence is there will it be revisited by the Conservatives, by the government?

MICHAEL FALLON: Yes, it will. The Prime Minister has made that clear but the problem we’ve got at the moment there isn’t yet enough evidence to show that that is the way to get people off cigarette smoking. If more evidence comes in then yes, of course, we’ve made it clear that we will look at that.

DM: Okay and on your patch, on the energy patch, I want to ask you about the green agenda, are we going to see more windmills on your watch? It’s these issues that seem to have been dealt with or gone away that were very unpopular with the Conservative back benchers and the Conservative constituencies, we’re thinking here of gay marriage and issues like that, I know an issue you voted against. Do you think they could come back and revisit you?

MICHAEL FALLON: Well on wind farms for example, we have tightened up the planning so that local communities will have more say over wind farms, where they are going to be sited, so they will be more appropriately sited and inspectors will take into account whether already existing wind farms, there’s too much impact on the local landscape and so on, so there is more protection there. ON the other issue you raised …

DM: Well gay marriage, were your concerns about it because you felt that morally it wasn’t right or because it can have an effect on the constituencies?

MICHAEL FALLON: No, I think that some of us that voted against thought we didn’t pay enough attention to those who were married, whose views didn’t seem to be taken into account but that’s now law, it became an Act of Parliament last week and I think we have to move on now and see how it plays with the rest of the country.

DM: And you feel the constituencies have moved on, on gay marriage and the bigger issue I suppose of Europe, that the offer of a referendum in 2017 has quelled those would-be UKIPers?

MICHAEL FALLON: It seems to have. The Prime Minister has set out a very clear reform programme for Europe and what’s fascinating is to see how the Italian Prime Minister in town this week indicated that there were reforms to be done, the German Chancellor indicated there would be support for a reform programme and then we have the promise now, the commitment to the first referendum for over 40 years so we can all now decide on this question. That’s huge.

DM: Okay, Mr Fallon, thank you very much indeed. Michael Fallon there.