SKY NEWS – MURNAGHAN – 10.00 – 23.09.12 – INTERVIEW RACHEL REEVES, SHADOW CHIEF SECRETARY TO THE TREASURY

DERMOT MURNAGHAN: Now then, is the prospect of a Labour coalition with the Liberal Democrats after the next election a real one? Well Ed Balls says he’s been sending texts to Vince Cable but Deputy Leader of the Labour party, Harriet Harman, says there’ll be no cosying up. In a moment I’ll speak to Labour’s Shadow Chief Secretary to the Treasury, Rachel Reeves. Let’s say a very good morning to Rachel Reeves, joining me from her constituency in Leeds. On that point, all this talk about coalitions and who can do deals with whoever whenever the next election is, what’s your view on the current shape of the Lib Dems and whether Labour would consider doing business with them in the event of a hung parliament next time round.

RACHEL REEVES: Let me be very clear, I’ll be campaigning and the rest of the Labour party will be campaigning for a Labour victory at the next general election, not a coalition with the Liberal Democrats or any other party but we’ve got another two and a half years until the next general election and the government is doing a huge amount of damage to our economy and to our society now and it’s ordinary families, ordinary people who are paying the price so during that two and a half years I think it is right to talk to the Liberal Democrats and to members of the Conservative party, if that’s possible, about doing the right thing and changing course before it’s too late. Changing course on the pace of deficit reduction which is causing such damage to our public services but also to people’s living standards and talking to the Liberal Democrats about a fairer way to reduce the deficit, for example through a mansion tax, so we’re campaigning at the next election for a Labour victory but we’ve got two and a half years until then, Labour aren’t in power today but we do have a lot of MPs and we will work with the Liberal Democrats or whoever else if they want to change course and put our economy back on a fairer and more sustainable footing.

DM: But Labour have always said that this is a Conservative led government, of course it is in sheer numbers but your implication is that the Conservative ideology leads it as well and you talked there about fairness, well that’s exactly what the Liberal Democrats are talking about at their conference this very day so you do feel that they are more acceptable?

RR: It’s all well and good for the Liberal Democrats to talk about fairness but you’ve got to judge politicians and judge people on what they do rather than just on what they say and if you look at the Liberal Democrats in parliament, they voted as we all know to triple university tuition fees and they voted recently to get rid of the top rate of tax of 50p and reduce it to 45p which will give a tax cut next year of £40,000 to millionaires, that’s twice average earnings in my constituency of Leeds West, for the very wealthiest people and people who need that tax cut the least. So the Lib Dems can talk all they like about fairness but you’ve got to judge people on what they do and the things they’ve done in government have actually penalised hard working families and given a tax cut to the very wealthiest people in society, the very opposite to what they say they believe in and that’s the different between this Conservative led coalition which includes the Liberal Democrats, and a Labour alternative to it. We say we will work with people if they are true and honest about fairness and fair taxation and we’ll work with them if they want to pursue those sorts of policies but we haven’t seen that much of it in reality from the Liberal Democrats.

DM: Just in terms of policies, and I know we always have this discussion in terms of what policies Labour actually have on this issue, we heard Nick Clegg, of course in government, saying this morning he’s confident he can get some form of wealth tax pushed through in this parliament, is this something you would support?

RR: Well I’m not sure I did take that from the interview with Nick Clegg this morning. He spoke a lot about what has happened which, if we’re honest, is not very much and he spoke very little about what he would actually do in practice. There was a lot of talk before the budget in March this year about a mansion tax and the idea that the Liberal Democrats wanted to do that, what we had in practice was a tax cut for millionaires whilst asking ordinary people including pensioners to pay much more so I’m not convinced that the Liberal Democrats are going to be able to get any sort of wealth tax through. But we’ve said with Vince Cable and with others, if they are serious about a mansion tax, if they are serious about taxing people in a fair way and easing the burden on ordinary families who are struggling so much with rising VAT, cuts to tax credits and the rest of it, then we will work with them but so far we have seen very little in practice although a lot of rhetoric from the Liberal Democrats.

DM: Okay and can I just ask you about, well we’ve seen Mr Clegg and his difficulties in terms of the polls, now Labour overall are looking quite healthy with that big lead over the Conservatives at the moment and the Lib Dems being pushed down into fourth place behind UKIP but it’s this personal polling that must be a worry internally within the Labour party, that Mr Miliband still rates behind David Cameron on so many personal issues.

RR: Well it’s different in different polls. I do take some comfort from the fact that we are now ahead in the polls but we’ve got a lot further to go until the next general election and Labour still have a lot of work to do but we are ahead in those polls because people feel let down by the Conservatives and by the Liberal Democrats and they are looking for an alternative and they are seeing, with Labour’s proposals for a temporary reduction in VAT, for a reinstatement of the Bank Bonus tax, for proper action to get young people back to work and bringing forward infrastructure investment, that Labour do have a real alternative to this Conservative and Liberal Democrat coalition which is why people are turning to Labour again, why we have that lead in the polls and Ed Miliband has made the right judgements whether it’s on building a fairer economy, on the Leveson inquiry, on a number of areas which is why I think that people, when it comes to the next election, will be looking to Ed Miliband to form the next Labour government.

DM: But you seem to have gone quiet on that issue we heard from Ed Balls not so very long ago, that you would not be in a position to do anything about the cuts that the Conservative led government, as you put it, have introduced.

RR: Well in a number of areas, we are saying that if we were in power today we would be doing things very differently. For example the increase in VAT which has cost the average family £450 a year, we say that we would reverse that cut until the economy is strong enough. For small businesses who are struggling to get bank lending and struggling to create jobs and growth, we would have a national insurance holiday for all small businesses taking on new workers so we would be doing things very differently if we were in government today but this government are doing so much damage to our economy. We have no idea what sort of economy we are going to inherit now in 2015. The government once said that they would get rid of the budget deficit and the national debt would be falling by the next election in 2015, we now know that that’s not going to be the case so we cannot make promises, unfunded promises now about what we would deliver in 2015 when we don’t know the state of the economy. That’s the problem that the Liberal Democrats got in trouble with when they made promises that they couldn’t keep, Labour are determined not to go down that route but if Labour were in power today we’d be doing things very differently. We’d be prioritising jobs and growth rather than prioritising tax cuts for the wealthiest in society.

DM: Okay and lastly can I just ask you about the Conservative Chief Whip, Andrew Mitchell and what happened at the gates of Downing Street last week, do you think it reflects badly on the Prime Minister that he’s not taking any further action?

RR: It reflects incredibly badly on the whole government. I was brought up to respect people who work in the police force, to respect public servants, teachers, doctors, nurses and we just see this government just seems so arrogant in the way that they talk to people and the way that they treat people in public service, especially this week when we’ve seen the ultimate sacrifice that police officers make in the line of duty and we’ve got a Conservative minister, a senior minister, possibly calling a police officer a pleb, swearing at police officers, it really just makes me so angry and disgusted and I think it does for the general public as well. We don’t know what he said but we do need to have some clarity. What words did he use, did he swear at police officers and if he did we need a proper apology rather than this equivocating that we’re seeing from him right now.

DM: Okay, Rachel Reeves, thank you very much.