ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: So is it all sweetness and light in the corridors of the coalition or is it pistols at dawn for the two parties? In a moment I’ll put that to the Deputy Lib Dem Leader, Simon Hughes and the Conservatives new Business Minister, Michael Fallon. So I am joined now by the newly installed Conservative Minister of State for Business and Enterprise, Michael Fallon, a very good morning to you Mr Fallon. So you’ve been parachuted in alongside Matt Hancock to keep a Conservative eye on Lib Dem, Vince Cable, at the Business Department?

MICHAEL FALLON: It’s not so much keeping an eye on Vince Cable as keeping an eye on growth. What everybody now wants to see is the economy taking off and we’ve got to work harder and faster at getting the kind of growth we need and the jobs that come with it.

DM: But Number Ten said you were going to be the voice of business, what’s Lib Dem Vince Cable been doing for the last two and half years, is he not the voice of business?

MF: Well of course but I am going to be the Conservative champion for business.

DM: But is that different from a Lib Dem voice of business?

MF: Well there are different perspectives in all these things but what we’ve got to do now is accelerate our agenda, we’ve got to show that we’re supporting British business and cutting red tape to allow business to get on and create the jobs we need.

DM: Okay, two and a half years in the job, Vince Cable, he hasn’t been fast enough at cutting this red tape?

MF: No, we’ve identified the regulations, let me take you …

DM: It’s taken a while.

MF: Yes, it has. We’ve identified roughly 20,000 regulations, now of these we’ve asked business, we’ve asked charities, voluntary organisations, which are the ones that are really a burden and there are around 6,500 of those 20,000 that really impact on people’s daily activity and we are setting a new target now, which I am announcing tomorrow, of getting rid of almost half, or substantially reducing almost half of those 6,500 regulations.

DM: But it’s one in, one out so you’re not going to end up with …

MF: Well that’s the new regulation, that’s helped dampen the flood of new rules, that’s restricted new regulation but this is existing regulation. Let me give you an example, there are low risk businesses, shops, offices and so on, where you don’t need the council to come in and do health and safety checks. Now we’re not talking here about construction sites or chemical plants or care homes or anything but if you are an online publishing business, digital marketing or whatever it is, you don’t need council officials doing health and safety checks. There are an awful lot of bureaucratic requirements that we can sweep away, we’ve identified them and now we are going to get on and actually get rid of the red tape. You’ve heard Ministers talk about getting rid of red tape before …

DM: For ages.

MF: Well now we’re going to get on and do it.

DM: But now we’re hearing also about helping them get rid of staff making it easier and they don’t end up so often in front of industrial tribunals, no fault dismissal. You don’t see eye to eye with Vince Cable on that do you?

MF: Yes, we’ve already started reforming the tribunals, making sure that they apply to people who have been employed for two years rather than one year and dealing with a perception amongst business that getting rid of people is going to be very expensive, time consuming for management and far too bureaucratic and there’s no difference between Vince Cable and myself on that.

DM: Really?

MF: Absolutely. We’re going to reform the way in which employment is handled and not just the way that somebody who doesn’t work out is going to be let go but also the way people are hired, the kind of contracts of employment you have and make it faster and simpler to employ people.

DM: Do you believe about Vince Cable what Ed Balls has been saying today, the Shadow Chancellor, that in his heart of hearts that Mr Cable doesn’t really believe that Plan A is working and that Ed Balls, perhaps trying to cause some mischief there, saying he has been texting him. Do you think he is trying to win Vince Cable over to his way of thinking?

MF: Well I think first of all that’s a bit of mischief making. Secondly, I don't think we need any lessons from Ed Balls on Plan A, they hadn’t got a Plan A. They were the people who left us this enormous mess, the biggest deficit in Europe, which we’re dealing with and let me be very clear, Vince Cable, the Chancellor, myself and all Ministers in the government are absolutely, fair and square behind Plan A but because the eurozone has been far worse than people thought, because internationally the climate isn’t so good, we’ve simply got to work harder and harder at Plan A.

DM: But wasn’t the reshuffle, wasn’t that you, the Conservatives, saying well Plan A hasn’t been working fast enough, now we’ve got to do something more about it as indeed your appointment shows, you’re trying to hurry things along in the Business Department.

MF: Yes, we’re all impatient for growth now but if you look at the first couple of years of the coalition government, we passed an awful lot of important reforms, we’ve passed Acts of Parliament, now we’ve got to get out there and deliver those reforms so it was a very timely point for the Prime Minister to refresh the teams in each of the departments and bring in new people who can get out there and actually deliver the reforms. Red tape is an example, previously we’ve identified the regulations that are a burden, now we’ve got to get on and actually remove them.

DM: But as a believer, a Conservative who believes in his heart of hearts, to use that phase again, in free markets and the role of free enterprise in an economy, in society, you must understand there is only so much a government, so much a department can do, it’s not necessarily up to you.

MF: Well these things have worked before if you remember. We privatised, we deregulated and that did work in the 80s and 90s, these are things that work so we have got to do what we can to free up business, to create jobs and to support business. I was supporting British business, I was actually at an exhibition in Germany last week, and they weren’t sitting around moaning about the eurozone, these guys were going out to places like Korea and Brazil and China to pick up orders, so we’ve got to get behind British business but we’ve also got to identify bottlenecks. Where there are bottlenecks to growth then obviously it’s government’s job to step in and clear them away.

DM: But you also believe we’ve got to get in this country – you’ve been writing in the Telegraph today, you’ve been quoted in the Sunday Telegraph today about getting behind our wealth creators and transferring some of that Olympian spirit, some of that glow from the Olympics, along to the private equity department. I mean are those people really like the amazing Paralympians and Olympians we’ve seen over the summer?

MF: Yes, I was at the Paralympic Games yesterday and I think people have been really struck by the drive, the focus, the ambition of these Olympian champions and we’ve got to do the same with our business leaders, we’ve got to get behind them and not think up – Ed Balls is constantly thinking up new ways of taxing them, that’s the wrong approach. That’s the politics of envy.

DM: But so is Mr Cable’s party.

MF: No, but Ed Balls is specifically looking at things like a wealth tax for example but we’ve got to get …

DM: So are the Lib Dems.

MF: Well we’ve got to get behind these business people because they are the people actually who risk their own money to create jobs for others and that’s something we should be saluting and not undermining.

DM: Okay but are you really saying that Bob Diamond is up there with some of these Paralympians, the Olympians who have done amazing things on very little money, devoted their entire lives to their sport, are wealth creators the same as them?

MF: No, I’m not talking about bankers here, I’m talking about entrepreneurs, wealth creators.

DM: But aren’t bankers wealth creators?

MF: They were until they started to go wrong and depend on the tax payer for support but what I am talking about here are the entrepreneurs, the guys setting up the small companies, as I said, going round …

DM: But what about small companies that become big, what about private equity firms, they’re mentioned in your article?

MF: Well we want small companies to become big, don’t you? Of course, they’re the ones that create jobs in the end and some of those who risk their own money, set up private equity firms, investing in British business, they are the kind of people we should be backing but there are hundreds of thousands of others up and down Britain who are not sitting on their hands, who are getting behind their own companies, getting out there, winning export orders and that is the future. We have got to get this economy lifted out of recession.

DM: So overall on the reshuffle, do you accept the criticism – I know you won’t – that it has been rather botched because there is no change of policies, it is just a bit of shuffling of personnel. David Mellor, who you well know, was on the programme saying a bunch of people we’ve never heard of in the first place were replaced by another lot of people we’ve never heard of and nothing will change in terms of policy, as you’ve been saying.

MF: I think I’m old enough to remember David Mellor being shuffled around occasionally between departments and not always for the right reason.

DM: Touché.

MF: No, this is a big reshuffle, this was bringing in new people in each of the departments, committed to reform and a raft of some of the newer MPs, particularly women, a range of new Conservative women ministers who are going to give a real fillip to some of these departments, Esther McVey, Anna Soubry, Liz Truss, Helen Grant, these are new MPs who had big serious backgrounds before they came into politics who I think are going to give a fresh impetus to delivering the reforms …

DM: I mean without a shadow of a doubt it was a nod, wasn’t it, to the Tory right, saying we’re taking you more seriously, this is a more Conservative side of government on the coalition?

MF: No, I don't think you can now analyse these things necessarily in right/left terms.

DM: Okay, we’ll end it there, Mr Fallon, thank you very much indeed.