ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Following the Chancellor’s Autumn Statement this week an almighty row broke out about the pace of austerity and the scale of cuts to come.  The Institute for Fiscal Studies said spending cuts on a colossal scale would be needed and the BBC came under a bit of fire for what Number Ten called hyperbolic reporting.  Well Matt Hancock is a Minister of State in two departments no less, Business and Energy, he attends Cabinet as well and is a close colleague of the Chancellor. He joins me now, a very good morning to you Mr Hancock.  I mean the point is, leave aside some of the language and the criticism, the point is that the Chancellor announced things with a great flourish such as this reorganisation of Stamp Duty and then almost blurted out that there are some truly horrendous – and I’m picking my words carefully – public spending cuts to come in the next parliament whoever is in power.  

MATT HANCOCK: Well it’s certainly true that there have got to be savings in the next parliament whoever is in power.  He also set out in that speech a clear plan from our point of view about how this can be achieved through some savings to departments, spending departments but also savings to benefits and further tackling tax avoidance.  What’s happened since is that all of the other political parties, you name it, all of them, have demonstrated that they don’t have a plan and that they don’t support the action that needs to be taken.  

DM: But to use the word colossal, we’re running, what, £91 billion deficit at the moment, to eliminate the structural deficit the cuts are going to be colossal.

MATT HANCOCK: Well the deficit has been cut in half and the savings that we propose to make will be at the same pace for the first two years of the next parliament as has happened over this parliament so it’s clear that it’s doable and that would bring us to surplus and once the books are in surplus, of course that’s the aim that we have, that’s the policy that we’re pursuing and then Britain will be…

DM: But the Chancellor is in the newspaper today saying well, the Liberal Democrats, our colleagues in the coalition, are not pointing out to us how they would deal with the deficit, they say a mansion tax and some other little bits and pieces here and there would do it.  Why don’t you level with us and tell us what would go?

MATT HANCOCK:  Well we have.  

DM: Whole departments?

MATT HANCOCK: We have in a whole series of ways.  Let me give you a couple of examples, we said that the rigour on public spending would have to continue and that saves billions, we said …

DM: But that doesn’t say what you’re doing, does it?  The argument is you picked the low hanging fruit and now you have got to lop off some branches.

MATT HANCOCK: Let me explain, this is an important choice … No, we would continue at the same rate and let me explain it.  It is an active choice to say that you’d save jobs and help with services in the public sector by being rigorous on public sector pay, that is a difficult choice because it is always easier to pay people more rather than to be …

DM: Well we’ve got a public sector pay freeze.  

MATT HANCOCK: Okay, second we’ve said that working age benefits would have to be frozen.  Now we have yet to see whether the other parties think this is a good idea but they haven’t signed up to it yet, that saves billions.  We have said that in this parliament we have managed to raise five billion more through tax avoidance, stopping tax avoidance and we think we can do the same in the next parliament.  There are three chunky measures and we haven’t had the same from the other parties, the other parties are …

DM: And all the protected departments remain protected so the cuts that are to come deeply affect those unprotected departments which have already borne the brunt of the cuts.  

MATT HANCOCK: Well no, because if you take action on benefits and you take action on tax avoidance in the way that we’ve set out, then that of course reduces the amount of the savings that have to be on departments and we have said that we will protect the NHS and we absolutely will and we demonstrated our commitment to the NHS with more funding actually as part of the Autumn Statement, but the thing about that is is that the other parties have just not said at all where this would come from.  The Lib Dems say more in taxes but won’t tell you which tax they are going to put up, Labour say more in taxes, more borrowing, they’ll leave the deficit there which means more debt interest payments.  One of the biggest savings we made this week, announced this week, is a 16 billion saving to the amount of debt interest we are paying as a country, now I think that is a really good saving and you can only get it if you have got a plan to cut interest rates.

DM: Because of international interest rates.  Tell me this, you mentioned there the Chancellor’s criticism and I mentioned it as well, of the Liberal Democrats and their plans, in effect – and I was talking to your colleague Damian Green a little a bit earlier – the coalition is coming to its end, it is falling apart at the seams if it hasn’t already.

MATT HANCOCK: Well it’s coming to its end on May 7th next year when we succeed in being elected as a majority Conservative government, that’s the goal.  

DM: Well from your point of view it is but you’ve got to govern the country, the country requires governing for the next five months and you are falling out with the Liberal Democrats in public.  

MATT HANCOCK: Well actually this week we have produced an Autumn Statement signed off across the whole government which I thought was excellent and in fact many Liberal Democrats were …

DM: But the from page of the Sunday Times has the Chancellor criticising the Lib Dems core economic strategy.  

MATT HANCOCK: This is about what happens in the next parliament so the Autumn Statement demonstrated that we can take important and radical steps – changing stamp duty, a tax that is centuries old – we can take those steps now and it is true that we have set out our plans for how we would deal with Britain’s economic problems, ensure that employment continues to rise, there are record numbers of jobs, the deficit comes down, we keep growing, ensure things keep moving in the right direction and tackle those long term problems and the other parties haven’t set that out …

DM: But do you think the Lib Dems are signed up to it even for the next five months?  Nick Clegg went down to the south-west, Vince Cable signed it off in Cabinet and then blasted the Autumn statement later on – there’s only Danny Alexander who came out to defend it.

MATT HANCOCK: Well they all seem to have different points of view, the Lib Dems, but that is …

DM: That is what you’re pointing out.

MATT HANCOCK: In a way that is second order because what really matters is that there is one group of people who have got a plan to deal with these problems, we’ve set out the plan, there will be more details being set out over the months ahead and we’ll keep on setting out how we’re going to tackle these problems and any other party, it doesn't matter – Liberals, Labour, UKIP, you name it – they all represent chaos, they all represent and increased likelihood of Ed Miliband being Prime Minister and there is only one way and we’ll demonstrate this increasingly over the next four or five months, there is only one way to keep with the competent plan and that’s with the Conservatives.

DM: What do you make of what the Archbishop of Canterbury has had to say today about food banks and about overall levels of poverty because you’ve just told me things which are going to exacerbate poverty, you are going to stick with the benefits freeze, public sector pay cuts in effect because of inflation, I mean he’s got a point hasn’t he, Justin Welby?

MATT HANCOCK: Well of course I’m a huge supporter of the food bank movement and I’m a supporter of the food banks in my constituency and they have a role to play but the truth is that poverty is coming down, partly because the number of people in jobs is going up and unemployment is falling at record rates.  This is how ….

DM: What about those people on benefits who have got a benefits freeze, is their poverty going to decrease?

MATT HANCOCK: Well the proposals is to freeze and therefore people will get the same benefits as before.

DM: As inflation goes up.

MATT HANCOCK: But what is the best way to tackle poverty?  Is it to give people money and leave them on the dole as happened in the past or is it to do everything you can to get people into work and fundamentally work and the opportunity to work but also the incentive to work, these are the things that help people build a proper and strong life for themselves and their families, more financial security and doing that is difficult, there are many difficult cases and it has got to be done sensitively but compared to the option of leaving people not only for a generation but sometimes for multiple generations on the dole, it is vital to do everything we can to support people into work.

DM: Okay, the key point about the Archbishop of Canterbury, do you welcome him speaking out on this issue?

MATT HANCOCK: Well of course he has got something to bring to the argument because he has a perspective on the debate so I am very comfortable with him making the arguments, he is a legislator, he is in the House of Lords, that’s perfectly reasonable.  We have then got to look at what are the potential solutions.  Food banks is a good example, before we came into power food banks were not allowed to advertise their existence …

DM: And do you think that’s why there are more of them?

MATT HANCOCK: One of the reasons is because more people know about them and the amount of people who work in food banks and give up their time, I applaud and I think that’s fantastic but the key, the essential question here is how do you tackle the deep ingrained problems of poverty and the single best way through that is undoubtedly work.

DM: Okay, the last question about your grovelling apology to the Prime Minister, you were stewarding a Bill and apparently you had to offer the Prime Minister an apology after the government got defeated on the Small Business Enterprise and Employment Bill, did you … yourself in front of him?

MATT HANCOCK: It was just after the vote was announced and I happened to bump into him in the lobbies but the central point there is we have this …

DM: What did you say to him?

MATT HANCOCK: I can’t exactly remember but it was something like, sorry about that …

DM: I really messed up here.

MATT HANCOCK: No, well, don’t push it Dermot, don’t push it!  Here we have the first ever Small Business Bill, I’m very proud to be taking it through, it has some measures on pubs in it, there was a technical question which affects six pub companies of how far you go on supporting tenants so we lost a point on that.

DM: So it won’t affect your career in the future, the Prime Minister was okay with it?

MATT HANCOCK: Well I don’t want to do it too often!  

DM: Okay, Mr Hancock, thank you very much indeed, very good to see you, Matt Hancock there.