ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Well the Conservatives could lose hundreds of council seats this week if voters turn against David Cameron in the local elections, so what would a big defeat do to the party and to the coalition? Well in a moment we’ll be hearing from the former Chancellor and the current Minister Without Portfolio, Kenneth Clarke. Well let’s say a very good morning to Kenneth Clarke then and Mr Clarke, can we start with the local elections, these rather dire predictions about your party’s performance. I suppose you can’t put numbers on it but one thing’s for sure, you’re not going to increase your number of seats.

KENNETH CLARKE: That would be quite remarkable. The unfortunate county councils which have done a very good job, most of them, now have to defend seats that some of them won at a time when the death throes of the Gordon Brown government were very well advanced, it was obvious that the government was falling apart and a huge reaction to them gave us every county in the country I think. We won Nottinghamshire, where I’m standing, for the first time in 25 years. It’s a tough battle but they’ve done very well over the last four years and people are going to ask themselves, you know, just remember what it was like when Labour was in that state, do you want to put it back into the hands of people in the Labour party who don’t seem to realise that they were making mistakes when they were thrown out on that scale.

DM: That’s the explanation but you are particularly spooked about UKIP it seems, they say you’re going round digging up dirt about some of their candidates.

KC: Well they have got to vet their candidates and fringe right parties do tend to collect a number of waifs and strays. Some of the ones they have sent as Members of the European Parliament, one of them got sent to prison, others had to send back a lot of money because they all believed what they’d been saying about the buckled gravy train and unwisely tried to take advantage of it but the trouble with UKIP really is it is just a protest party. It is against the political parties, the political classes, it’s against foreigners, it’s against immigrants but it doesn’t have any very positive policies, they don’t know what they’re for. I think if you look at Italy where they have just managed to go into it, it shows the dangers where ordinary members of the public who are very angry about the political class really vote for people who are in Italy’s case just comedians, a man called Beppe Grillo and all kinds of, all sorts of men and women, some of them disreputable, some of them not but who have no idea of government or what they wanted to do, you create a bit of a crisis, a bit of a mess. They talk about running county councils here, you should send to the county council people who will control the council tax, carry on running it sensibly at a very difficult time of financial crisis and no doubt most of the UKIP people are perfectly nice when they’re having a drink but I wouldn’t send most of them to the county council.

DM: Okay, waifs and strays you call them, I take it you’re not a fan, what about the Prime Minister’s comment some years back about fruit cakes and closet racists?

KC: I’ve met people who satisfy both those descriptions in UKIP, indeed some of the people who assure me they are going to vote UKIP I would put into that category and I rather suspect they have never voted for me but there are … the temptation for ordinary voters of UKIP is these are very difficult times, the political class are regarded as having got us into a mess, the last government left chaos behind them, the present government is having a long, hard road to follow to get us back to normality, it’s very tempting to vote for a collection of clowns or indignant angry people who promise that somehow they’ll allow you to take your revenge on the people who caused it. You should actually vote for the people you think are going to be sensible county councillors.

DM: Just on the specific tactic, UKIP are enraged about digging up old statements that some of the candidates may have made before they even got involved in politics from social media, from Facebook and Twitter and places like that.

KC: Well some of them are saying quite different things now they’re in politics to their actual views and what they used to say, I think people like that should be exposed myself. My views have always been the same.

DM: Okay, part of their appeal is of course, as you mentioned it, on Europe, well Europe and immigration of course and when it comes to the issue of migration from within the European Union they have the answer because they want to withdraw. When it comes to Romanians and Bulgarians which is on everyone’s mind at the moment come 2014, do the Conservatives just have to say well look, this is what happens if you are going to remain a member of the European Union, we have to let them in however many come?

KC: No, UKIP have created a quite ridiculous scare about the hordes of Bulgars and the hordes of Romanians who are coming here which is total nonsense. We do have rules which stop people coming here for benefits, coming here for the health service, we already have some Bulgarians coming and going, there is quite a population here and there is no particular reason to think this is going to change things. It is true that the Department of Work and Pensions and various NHS Trusts are not always very good at sorting out whether foreigners are entitled to non-emergency healthcare and to benefits but they should be entitled on a well-established rule, they should have some reason for being here, be legally resident here and so on and they should be better enforced but the idea that hordes of benefit claiming Bulgarians are heading to the United Kingdom is a sort of daft issue which parties like UKIP raise and until we actually get to the stage where people discover their neighbourhood isn’t actually full of Romanians, obviously they will continue to exploit it. There are many more serious things in the county council elections and many more serious subjects of European reform. The British have perfectly good rules on benefit and health service entitlement, we should be better at enforcing them but otherwise we shouldn’t let UKIP set the agenda in this way.

DM: The Conservatives have another problem don’t they, this feeling that seems quite widely held amongst the electorate that you’re out of touch with ordinary British people and with that in mind the Prime Minister then goes and appoints to some of the key roles within Number Ten, two more of his old school mates, two more Old Etonians, Jo Johnson and Jesse Norman. I mean as a good grammar school boy yourself don’t you feel that the high halls of the Conservatives no longer represents the British demographic?

KC: I’m the classic compromise. I got sent as an 11 plus boy to an independent school so I’m a real hybrid but no, this is really old fashioned stuff. It reminds me when I took up politics quite astonishingly at a very young age for some reason and the old class war was very rife then but no, I think the election of David showed that it is no longer a disadvantage in modern politics to be an Etonian. I thought there was so much prejudice about that anybody going to Eton would be disbarred. I think it’s still not a disadvantage, I think people can be Prime Minister whether they came from a very poor humble background in a slum or whether they went to Eton, whether they went to their local neighbourhood school or whether they went to Harrow and it’s all quite fun this but whatever else you think about Jo, Jo Johnson is a very bright interesting guy actually, different from his brother in temperament but they both have strikingly different qualities. The idea that he went to Eton strikes me as totally and utterly irrelevant.

DM: Okay, underlying all this is if you get the economy right, a lot of these problems would go away but of course you have got so many people say how difficult things still are, including the new Archbishop of Canterbury Justin Welby. What do you think about his comments saying we are in some kind of depression when of course official figures tell us we’re not even in recession?

KC: Well we’re bouncing along the bottom not achieving normal growth because we’re in the middle of a financial crisis gripping the western world. We were left with a problem, with a deficit and debt which rivalled Greece size for size. We were one of the worst sinners in Europe in terms of going for free money, the government spending £5 for every £4 it raised and just assuming it could carry on borrowing blindly and our household got into debt as well because they ignored a credit boom which led to stupid mortgages and all this kind of thing. Unlike everywhere else in western Europe practically we’ve retained confidence, we’re slowly getting out of it but it is a terrible drag on growth. We are not going back into recession as most of the other western European countries are, we’re cutting spending more slowly than almost any of the other Western Europe sovereign debt infected countries, we’re cutting our public spending slower than President Hollande’s government in France and he was elected on an anti-austerity programme, but he is cutting much more than we are. As long as that pace is good enough to heal the economy, get us back to growth as soon as we possibly can, that’s the way to proceed and whether it’s a depression and all the rest of it and whether we’re 0.1 one way or 0.2 the other and a triple dip recession, we’re coping. Our head is above the water but we have one or two or three years even still to go, we’ve got to be allowed to finish the job.

DM: But it leads to another tough spending round, government departments submitting their spending plans tomorrow and it raises questions doesn’t it about those departments that are ring-fenced and in particular international development. People in your own party are beginning to ask even more loudly why on earth are we sticking to that pledge to give 0.7% of GDP to international development?

KC: Because we committed ourselves quite clearly to it at the election, it shows there is room for a sense of ethics and moral purpose in government and actually if you allow the very poor in the world to collapse into even worse abject poverty at a time of financial crisis, then you have failed states, then you have more terrorism, then you have all the implications for the western world as well. The idea that we keep all our money in our pocket and just hope that Somalia will get better is very, very reckless and 0.7% of our GDP is not the heart of our spending problem, it is actually a sensible and perfectly decent thing to do at a time when people across the globe are suffering from problems, some people are suffering starvation and even death as a result of poverty.

DM: And can we end on a personal question? Coming from the Work and Pensions Secretary of course, your colleague in Cabinet, Iain Duncan Smith, he wants wealthy pensioners who don’t need their benefits to give the money back. What do you do with the benefits, I don't know if you take them or not? What do you do with them Mr Clarke?

KC: I don’t answer questions about my personal life, about my financial life or my tax, blameless though all of them are. I remember half the political class getting knocked about whether they had ever smoked cannabis a few years ago, the answer is not to answer the questions. It is certainly the case when it comes to a bus pass and when it comes to winter fuel, everybody, every taxpayer should decide and every recipient should decide what they are going to do with it themselves, that is their undoubted right.

DM: Well this isn’t a personal question, it is whether you agree or disagree with your Cabinet colleague, do elderly people who can afford their own fuel bills and travel costs, should they hand the money back? That’s what he’s saying, do you agree or not?

KC: Well you can’t hand it back to government, I don't think there is a system for doing that. I think every pensioner and retired person like myself obviously has to make up their own mind about whether they really need it and whether they are going to give it to some worthwhile cause. No doubt most pensioners who are reasonably prosperous give quite a lot of money to charity and to worthwhile causes in any event.

DM: Okay, Mr Clarke, good to talk to you, thank you very much indeed. Kenneth Clarke there.