ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now the Conservatives will try to toughen their stance on welfare even further at their party conference this week. The Work and Pensions Secretary, Iain Duncan Smith, is expected to announce that he will force the long-term unemployed into unpaid work to hang on to their benefits. Well in a moment we’ll be getting reaction to that from the Shadow Work and Pensions Secretary, Liam Byrne. Let’s say a very good morning then to Liam Byrne, the Shadow Work and Pension Secretary, he joins us from Birmingham. Mr Byrne, first of all, we didn’t hear an awful lot about Labour’s attitude to benefits at your recent conference, this idea, I suppose Workfare is how it’s widely terms, the idea of people doing unpaid work to hang on to their benefits if they have been out of work for a long time?

LIAM BYRNE: Well look, the government has got to do something because what we saw over the last week was the final nail in the coffin for what was once called a welfare revolution. We had figures out from the Work Programme last week that showed that the government’s must vaunted Work Programme has now failed the grand total of a million people, eight out of ten people on the Programme have been unable to get steady jobs so it has failed. Of course we heard before Parliament rose that Universal Credit is now in some chaos and what we heard in today’s newspapers is possibly the reason why. We’ve heard about George Osborne who said that Iain Duncan Smith, the quiet man, is not a clever enough man to do the job. So we do need something new from this government but what we said in Brighton last week is what we really need is some bold action like Labour’s compulsory jobs guarantee that will provide subsidies for anyone out of work for more than two years to get a minimum wage job in the private sector. That sends a very clear signal, it says that you can’t send …

DM: Isn’t that just the same?

LIAM BYRNE: No, it’s not the same, it’s much better because it says very clearly you can’t spend more than two years on welfare and …

DM: I thought we were off to a good start there, I thought you just said yes, we support it, workfare when you said they’ve got to do something. I mean do you support this idea, that if you’ve been out of work for a long time, you have presumably turned down a job or two, well then you’ve got to do some sort of unpaid – and I’ve just got to apologise to our viewers as well Mr Byrne, the picture is dropping out but we can still hear you – do you support this Workfare type scheme, unpaid work to keep your benefits?

LIAM BYRNE: We think there’s a better way, we think a better way would be to say to people who have been out of work for say two years, look, you can’t just live a life on Jobseekers Allowance, after two years your benefit payments will have to stop. We will invest in creating minimum wage jobs with the private sector but the deal with people who are out of work and in that position has got to be very simple – we’ll invest in new chances, we’ll make sure those minimum wage jobs are there for you but if you are fit to work, you’ve got to take them. There can’t simply be a life on Jobseekers Allowance.

DM: All right, I understood that. Now you haven’t cleared up for us as well, Mr Duncan Smith is talking about the benefits cap, it is introduced, we know where they’re going, the Conservatives, with this one, you haven’t told us apart from that you oppose a blanket cap, how much would you see it at in an expensive area like Central London then? £26,000 it is set at now for total benefits.

LIAM BYRNE: Well what we’ve said is that there has to be a cap on the overall benefits bill because look, the truth is that benefits bills go up during recession, that’s what’s happened over the last recession. The problem is they’ve not come back down again as the recovery has started, in fact the bill is going up 2% a year. That’s not sustainable, it’s got to come down.

DM: So what’s the figure?

LIAM BYRNE: Well there does then have to be a cap on people’s personal benefit payments and we’ve said there has got to be a different cap in London to the rest of the country.

DM: What level?

LIAM BYRNE: We’ve said look, the best way to do this is actually to take the politics out of this, let’s get an independent panel like the Low Pay Commission that sets the minimum wage, let’s get them to look at it in order to tell us something very important – how do we send a very clear signal, no matter where you live in Britain, that you are better off in work than you are on benefits?

DM: Okay, so you by and large support it but give what, maybe £30,000 a year total in London and the south-east, places like that?

LIAM BYRNE: Well we don’t think that it is something politicians should opine on, play politics with. We think there is a really important principle here which is you have got to be better off in work than you are on benefits so let’s get some experts to tell us what that cap would therefore need to mean in London or here in Birmingham or elsewhere in the rest of the country.

DM: Okay, so a similar direction of travel then on some of those benefits issues but a clear divide emerging at your conference last week wasn’t there? You are often termed, I don't know if you would accept it, as one of the surviving Blairites in a senior position under Mr Miliband, are you comfortable in a party that wants to increase taxes on the rich, that wants to expropriate unused development land and that also wants to rig the energy market?

LIAM BYRNE: Look, I think we have a cost of living crisis here in this country and you’ve got a Prime Minister determined, it seems, to stand up for a privileged few rather than ordinary working families. Now I don't think that’s right, what we do need is to get growth on the move. Now I’m someone who started a small business before I came into politics so when I heard the Prime Minister today say that we’re proposing to put up taxes on entrepreneurs and small business people, frankly I wondered what planet he’s on. A big cut in business rates is exactly – that’s exactly what he said – a big cut in business rates is exactly what small businesses need and you know what, small business right now are creating jobs five times faster than big business so we should be trying to turbo charge our small business community. But look, if we create new wealth in Britain we need to make sure it is fairly shared and that’s why we said look, the minimum wage should go up, we need to make sure there’s 25 hours of free child care for working parents who are trying to juggle the bills and yes, most importantly, let’s try and do something about those energy companies.

DM: You talk a lot about small businesses, you don’t like big business then. Is the message from Labour stay a small business or maybe become a medium sized one but if you become big we’ll call you predatory, capitalist, we’ll accuse you of profiteering and things like that and we’ll put up corporation tax for you?

LIAM BYRNE: There are big businesses that are doing well right now and the support they need quite frankly is new investment in infrastructure. Britain’s creaking infrastructure where this government has cut back on capital spending is hurting our big businesses and that’s why despite a huge fall in the value of the pound over the last five years, our export growth frankly has been anaemic. But look, let’s go back to this question about jobs. Last week in Brighton I set out a big plan for how you get our country back to full employment and the question that you always ask when you pose big challenges like that is well look, where are the jobs going to come from? That answer is very simple, a lot of those jobs are going to come from small business. Nine out of ten people flow off benefit and into work, join a small business. Small business is creating jobs five times faster than big business and that’s why we should be saying that if there are choices to be made like tax cuts, let’s put our money behind small businesses and while we’re at it, let’s sort out the banking system and introduce regional banks so that there is actually credit available for our entrepreneurs too. That’s the kind of bold policy I think will get our country back on the move and certainly that’s what people here in Birmingham are looking for.

DM: We’re nearly out of time, just the last question on the issue of credit and it is the Help To Buy scheme which we hear today has been fast forwarded, do you think that’s a wise idea? Do you think it could in actual fact inflate house prices in some areas?

LIAM BYRNE: Well, big questions still remain. I noticed the Prime Minister deliberately excluded London from his claims this morning, house prices in London are growing at 10%. That feels to me like it is not sustainable so what we’re saying is let’s get the Bank of England to look at the details of this scheme and let’s ask them to opine on questions like why is the cap being set at £600,000? Is that too high? So I am afraid there are big questions that need to be answered especially when you look at what is going on in the property market in London, so look, what’s wrong with getting the Bank of England to actually look at the details of the scheme before it’s fixed in stone?

DM: Okay, good to talk to you Mr Byrne, thank you very much indeed. Liam Byrne there and our apologies for one or two little glitches on the line there but we heard everything Mr Byrne had to say.