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DERMOT MURNAGHAN: After a difficult 2011 for the Liberal Democrats, this year the party seem to have a renewed assurance within the coalition government but with continued disgruntlement over the Health Bill, a vote on welfare reform and fears about economic growth, can the Lib Dems win the arguments within government? In a moment I’ll be speaking to the former Lib Dem leader, Paddy Ashdown. Also watching the discussion are as ever our Twitter commentators, they are today Oliver Wright, Whitehall editor at the Independent, the Sunday Mirror’s political editor Vincent Moss and Kevin Schofield, political correspondent at the Sun, they provide their reactions via Twitter and you can read all those on the side panels. You can follow as well on our website, skynews.com/politics and you can join in using the hashtag #murnaghan on Twitter. Let’s say a very good morning to Paddy Ashdown who joins us from Somerset. Paddy Ashdown, is that right, does the Lib Dem party appear more comfortable than it did 18 months ago or so within this coalition, a real sense of identity?

PADDY ASHDOWN: Good morning, Dermot. I think it’s taken us a long time, and who can be surprised at that, to settle down in the coalition. It is an entirely new form of government. I don't think Whitehall knows how to work, I think the Cabinet has taken some time to understand how to work and the public too I think is beginning to understand that this isn’t the old kind of politics and one party has a majority and the right to ram its stuff though, so yes I think we’ve all settled down. I am extremely proud, by the way, of the role that the Lib Dems have played in this last year, I mean we have anchored the Tories to the centre ground. Who can doubt that without the restraining influence of Nick Clegg and the Liberal Democrats, they’d have floated off to some wild extremes and the Health Bill not least by the way, in which Nick I think has played a blinder in making sure that the reforms to the Health Bill were brought about to make this broadly, in my view, acceptable. I’ll wait till I see what the Select Committee says but I’m a Liberal, if someone says to me do I want to put power in the hands of the bureaucrats or power in the hands of the practitioners closest to the people, then my answer is put it in the hands of the practitioners. My view is that the changes brought about by Nick and the Lib Dems to this, the changes brought about to the taxation system where we’re now ensuring that nobody who earns less than 10,000 a year is in income tax, we’ve taken a million out of taxation altogether, the changes that are being brought about for instance to some of the welfare changes – all of these are things that we should be extremely proud of.

DERMOT MURNAGHAN: Sorry to butt in there Paddy but just on …

PADDY ASHDOWN: Just allow me to finish with one sentence, Dermot. The party is moving now in my view from a party on the margins, maybe even a party of protest, to understanding the tough decisions and becoming a party of government and I’m very proud of that.

DERMOT MURNAGHAN: Okay, well you touched on a lot of bases during the course of that opening statement and I wanted to pick up on that, before the Lords of course, the welfare cap, you mentioned it, the benefits cap. The Lib Dems as we know didn’t come in to government to hit, as some people are saying, some critics of these reforms are saying, to hit the most vulnerable.

PADDY ASHDOWN: Right. Let me make it clear to you, Dermot, I voted with the government on everything until now. I see it as my job as an ex-leader to support my successor but I will not support the benefit cap in its present form. Now just before you jump down my throat let me step back a bit. The Health Secretary, Duncan Smith, has said that he accepts that transition arrangements have to be put in place. I know, I know that Nick Clegg is fighting very, very hard for those transition arrangements to be put in place. If they were, then maybe I would vote for it. I am not against a benefit cap, I’m in favour of one but these provisions as currently drafted, as they will appear before me or us in the House of Lords on Monday I cannot support. If the government brings into operation those transitional measures that I know Nick is arguing for and that Mr Duncan Smith has promised us that might be different but in their present form I won’t support them because indeed of the effect I think particularly on children. I am the President of UNICEF and I think the effect on children across the country of a cap in its present form will be in my view completely unacceptable so this legislation, in its present form, I won’t accept. When Mr Duncan Smith brings forward, as I hope he will and Nick is pushing for that very hard indeed, with those transition arrangements, I hope that will change the situation.

DERMOT MURNAGHAN: And it’s not all sweetness and light, is it, in terms of personal relations within the coalition.

PADDY ASHDOWN: It never is, come on! Come on, Dermot!

DERMOT MURNAGHAN: Of course it isn’t but particularly reports in the papers this morning that the Energy Secretary, Chris Huhne, feels that he is being briefed against from within Number Ten.

PADDY ASHDOWN: Oh come on Dermot, you’re a wise old experienced observer of the political scene, you don’t have to have a coalition for people to be falling out in government. I mean look at Margaret Thatcher’s government, look at Gordon Brown’s government, look at John Major’s government. Yes, of course, there are always dynamic tensions in any government, personality tensions, tensions on the basis of policy. By the way I think the coalition has been informed after nearly two years now by a collegiality and an understanding actually greater than I’ve seen in any other one party government, certainly in my time in politics and that goes back thirty years, so I don’t think that’s anything to do with …

DERMOT MURNAGHAN: Okay, what do you think about Chris Huhne though, if he is charged on this speeding issue, do you think he should stand down from the Cabinet?

PADDY ASHDOWN: I think we ought to wait to see and let justice take its course. Look, I know the game you play, Dermot, it is a perfectly legitimate game, you want to get a headline. I just don’t think it’s a very wise thing for us to be taking positions until the course of justice has been allowed to run its full course. Who knows what’s going to happen? Let me make it clear, Chris Huhne has categorically denied this. The procedures of our justice system are now grinding, slow you might argue but fine and in my view we should wait for them to produce their outcome before any of us jump to any conclusions about frankly anything.

DERMOT MURNAGHAN: Okay, well let’s get back to policy and Lib Dem policies, particularly the mansion tax. Suggestions again, this has obviously been put on the back burner, it was in the Lib Dem manifesto of course and original considerations from Vince Cable were that it would hit homes worth over a million pounds, what about two million and do you think that that could happen?

PADDY ASHDOWN: Look, I don't know, we must wait and see but I ... This yet another example of, and I hope it will happen by the way, it is Lib Dem policy and I understand from the deepest and darkest … of government that they are now inclined to think about this …

DERMOT MURNAGHAN: Well I am terribly sorry, our apologies will go to Paddy Ashdown there, we got the gist of what he was saying there on the mansion tax but our line has failed there I’m afraid. Luckily we have Labour’s Shadow Health Secretary, Andy Burnham, standing by and hopefully on a more robust line up there in Warrington. Good morning to you Andy Burnham, great to have you on the show and of course a lot on your plate in terms of what’s going on with the reports on the front page of the Observer this morning, that the Health Select Committee is going to criticise the reform in particular because they don’t seem to be taking account of the fact that we’ve got an ageing population and the cost of that is going to go up of course.

ANDY BURNHAM: Yes, well we’ll wait and see of course what the committees say but the simple truth is this, Dermot, David Cameron made a monumental mistake when he allowed Andrew Lansley to break the Coalition Agreement and the promise of no top-down reorganisation and of course we know that they brought forward the biggest ever top-down reorganisation just at the time when the NHS was under massive financial stress. Now that is the mistake that they made and that’s what the Select Committee have said today. Obviously we had nurses and midwives last week saying that they’d lost confidence in these plans, these changes and now we have senior Conservative MPs saying the same, so this is a very serious situation for Mr Lansley and the government.

DERMOT MURNAGHAN: Okay, I hope you’ll understand, Mr Burnham, we cut in to Paddy Ashdown’s time, who is back, but I wondered if I could unify this discussion and just finish up with Paddy Ashdown on the issue I am discussing there with Mr Burnham. You touched upon it and I wanted to touch upon it with you anyway, I’ll get round to asking the question in a moment or two. Do you feel enough has been done by the Lib Dems in coalition to make the health changes, the health reforms, palatable?

PADDY ASHDOWN: Is that for me Dermot?

DERMOT MURNAGHAN: It is to you, Paddy, yes.

PADDY ASHDOWN: Sorry, I didn’t know you were talking to me. I personally do. One of the great bell-weather’s for me, one of the measurements, thermometers, tells me the way the wind’s blowing, is Shirley, Shirley Williams, who has done a fantastic job leading this campaign for reform in the House of Lords and she said that she is now content that this is moving in the right direction. Look, I’m not going to make predictions until I see this report. I think that is really important. You asked earlier on in the programme should the government change course and my view is no, but I think it should listen and let’s have a look at this report. By the way, let me just say this, I mean opinion polls today are showing the Tory party are now four points ahead of Labour and Andy Burnham is on your programme and Andy is a man I greatly respect and admire, but I think Labour is one hell of a mess. They started off in the wrong place on the economy and now they are all over the place but what worries me is that not only can they not be trusted on the economy, I mean I watch them in the House of Lords, Labour members, Labour lords now joining with the Tory backwoodsmen to fight House of Lords reform, to democratise the House of Lords, something they have stood for I think for nearly fifty years and on the AV vote, the referendum. I mean Labour can’t be trusted with the economy but they can’t be trusted with reform either, what on earth do they exist for? That’s why Nick Clegg today has said to sensible people in the Labour party, the Blairite wing of the Labour party, there is a home for you, a caring and compassionate party that is prepared to take the hard decisions of government and I think that is a really important call.

DERMOT MURNAGHAN: Okay, well thanks for that, Paddy Ashdown and apologies for the interruption but I’ll go straight back to Andy Burnham with that then. Paddy Ashdown saying you’re all over the place on so many things and presumably that includes the health reforms.

ANDY BURNHAM: Well, let me tell Paddy Ashdown what the Labour party exists for. We exist to defend our National Health Service, it’s the best expression of the values of our party, it’s an inspiration to the world and at this moment in time it is facing the biggest ever threat in its history. I am afraid the Liberal Democrats are in cloud cuckoo land if they think they have reformed this Bill to make it palatable, they haven’t. That is why doctors, nurses and midwives are saying this is simply unacceptable, it’s a privatisation plan for the NHS and that’s what Labour exists for, to fight for what we believe in and we believe in the National Health Service, unlike I’m afraid the Tories and the yellow Tories.

DERMOT MURNAGHAN: Well let’s pick up again on the all over the place because didn’t you go into the last election, indeed the only party which said the NHS couldn’t be immune from some cuts?

ANDY BURNHAM: Well I said that as Health Secretary and I also said that what the NHS needs is service change and not structural reform, it needed changes to services on the ground to take more people out of hospital and that’s a difficult nettle that politicians are going to have to grasp. I was saying that at the time but what it doesn’t need is this huge whole back office reorganisation costing £3.4 billion. It is the worst possible thing to do at a time when the NHS is under unprecedented financial stress. I just don’t see how the government can carry on with this reorganisation when there is almost universal professional opposition and when senior Conservative MPs are also saying it’s time for the government to call a halt. I just think now they have to be honest with themselves, they have to put the NHS first and halt the reorganisation.

DERMOT MURNAGHAN: Okay, we accept that, we have heard that quite often but you must accept the diagnosis and what we will hear we suspect from the Health Select Committee, that the aging population puts huge strains, financial strains in particular, on the NHS and therefore efficiency savings somewhere else are needed and this is what the Department of Health has said that it is doing. It’s made these seven billion they say so far of efficiency savings and that will help with that very demographic time bomb.

ANDY BURNHAM: I just don’t accept that figure. They’re wasting money on this reorganisation, not saving money but I agree completely with the Health Select Committee, they have identified the most important issue in the health service and that is we cannot carry on treating many, many thousands of people in hospital, we need to have a more preventative healthcare system, a more integrated system where we put money in up front to support older people at home, to provide re-ablement services, rehabilitation, that is desperately needed and that is what should be happening right now, money should be spent on those new kinds of services. Instead the entire NHS is distracted with a destabilising reform that it simply doesn’t want and that is the mistake that the government made and they can’t just carry on with their heads in the sand saying it will all be okay, it won’t. If they push through this bill they will push the NHS off the edge of the cliff and into just complete chaos and I am pleased today that sensible voices like Stephen Dorrell are beginning to point that out to the government.

DERMOT MURNAGHAN: Others who you mentioned earlier who are pointing these flaws, as they see them, out to the government, the health professionals of course, the Royal Colleges, the BMA, do you support them in everything they do or like the Health Secretary, do you being to see particularly in the doctors there, an almost union like militancy?

ANDY BURNHAM: Of course we don’t support them in everything they do and we had our differences with them in government, people remember that and also we said, Ed Balls said last week that we will need to see pay restraint in the public sector if we are to preserve jobs across the National Health Service and in our schools so we are not always there to agree with everything that they say but they are right on this and the reason they have not been convinced by any of the changes that the government has made to this Bill is because at heart it remains a privatisation plan for the National Health Service. We have this proposal to let NHS hospitals devote half their beds to private patients, 49% of their income could be generated in that way. Now people know that that is a fundamental break with 63 years of NHS history and they don’t want it, the public supports what the NHS stands for. It is still a service which puts people before money and profits and people want that to be protected and preserved. It really is time now for the government to listen to this. I just ask David Cameron … I repeat actually, Dermot, the offer I made on your programme when I first came back as Shadow Health Secretary a few months ago, drop the Bill and we will work with the government to introduce GP led commissioning which they say is their main aim. I will work with them and support those plans but let’s deliver it through existing NHS structures and that’s perfectly possible to do. We don’t need this unnecessary and unwanted reorganisation.

DERMOT MURNAGHAN: Okay Mr Burnham, thank you very much indeed and thank you very much indeed for your patience while we dealt with those tiny technical problems. Andy Burnham there, the Shadow Health Secretary.