ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now then, the Conservatives have made one of their boldest election pledges yet this morning, they say they will take family homes out of inheritance tax by introducing a new allowance effectively increasing the threshold for paying the tax to £1 million but what message does this send to people on low incomes, the people who the Tories are trying to attract?  Well I am joined now by the Conservative Transport Secretary, Patrick McLaughlin, a very good morning to you Mr McLaughlin.   Well that very question to you, is that another tax cut for high earners?

PATRICK McLAUGHLIN: No, it’s a balanced approach.  We have taken the basic tax take so that people earning below £10,000 pay no tax whatsoever, what we are seeing is a number of more people being drawn into being paid inheritance tax, people who never imagined that they would be drawn in to paying inheritance tax and if we don’t take any action on this, that figure would rise to 11% by 2019 so it is right that we take a modest approach so that people can pass on …

DM: Well you say modest but if you include the family home, I mean that’s a million pounds.  

PATRICK McLAUGHLIN: People can pass on their family home, something that they’ve grown up in and all of a sudden they find they have to lose it, up to a million pounds, because house prices are rising and so therefore it always used to be paid.  Inheritance tax was designed to be paid by the very, very wealthy, it still will be paid by the very, very wealthy but those people that have seen the house prices rise will not necessary …

DM: Is a million pounds of assets not wealthy?

PATRICK McLAUGHLIN: Well if you’ve seen a house rise in price over a period of time and you haven’t wanted to force your parents out of their homes so that you can raise the money earlier on because that would have been another alternative that you could have done, then I think this is being fair, it is being fair for those people.  It will take the kind of tax that we take on inheritance, if you look at the projections by the OBR around to 6% of those people that would still pay inheritance tax and therefore it is keeping it at level pegging, otherwise the figure would rise substantially.  

DM: People are going to say though, we’ve heard this all before, before 2010, a long held ambition the Chancellor tells us and he originally announced something like this in what, 2007, didn’t he despite Gordon Brown’s guns.  I mean will it actually happen if you have to get involved in any coalition negotiations, this went out the window when you had to get in bed with the Lib Dems didn’t it?

PATRICK McLAUGHLIN: You are quite right that it was announced in 2007 and then Gordon Brown then allowed a double take across which raised it as a …

DM: What about the 2010 manifesto?

PATRICK McLAUGHLIN: Well the simple fact is, this is what is going to be in our manifesto, I very much hope that we form a majority government, that’s what we are going to out to do …

DM: But beyond that, if you don’t does this happen?

PATRICK McLAUGHLIN: We need to take 23 seats to win a majority government and we are going out to get a majority government.   We can talk about the machinations about what then happens as far as discussions after that when we know the result.  

DM: It’s all about red lines within the manifesto now because people know what happened with the Lib Dems, some of their promises, some of your promises, they had to go, you have to compromise but are there those issues, those promises that are across that red line, we will not compromise on that or is this one of those that might go again?

PATRICK McLAUGHLIN: This is in our manifesto, we’re going out to get a Conservative majority, we need to win 23 seats to do that.  We are the only party with the polls the way they are, particularly in Scotland, that can do that and that’s what we are putting out to the British public and I’m confident that we are going to get that majority.  

DM: Let’s return to the issue of whose side you’re on, Labour saying today there is £7.5 billion of savings to be made there on tax evaders and avoiders, that you go begging with your friends in the hedge funds.   

PATRICK McLAUGHLIN: Well I am staggered that Ed Balls … Ed Balls was a person that was defending some of these things when he was a Minister in the Treasury, he was defending some of these tax things that he is now going to tighten up on.  It was a Conservative proposal to bring the first charge into non-doms, we had Ed Balls himself earlier this week being caught on an interview saying actually if you did what we propose on non-doms it could actually take money out of the country, that’s not very good for us to improve our services so I think if anyone is confused in what they are saying in this campaign it’s the Labour party and not the Conservative party.  

DM: Okay, so let’s take this promise on inheritance tax and what was said about the NHS and the £8 billion you seem to have miraculously found for that, you said that last week.  Can we read into this after a relatively sober budget, no give-aways there from George Osborne, that the Conservative campaign team is beginning to panic and starting throwing the sweeties around?

PATRICK McLAUGHLIN: No, we are not beginning to panic at all.  Simon Stevens came out with these plans about …

DM: He came out with it at the end of last year.  

PATRICK McLAUGHLIN: Indeed and who appointed Simon Stevens to that job?  

DM: Well who didn’t listen to him?   

PATRICK McLAUGHLIN: Well we did listen to him because we have actually increased … if you look at the amount of money we have increased spending on the health service over the last five years, we have increased it overall by £12.5 billion of which £7 billion is actual growth, so we’ve done it.  What I’d say is judge us on our record.  We have actually reduced the deficit, we cut the deficit in half and …

DM: The record is you are in the midst of an election campaign in which several polls came out saying that your attacks on Ed Miliband weren’t working and that Labour were creeping into, in one of the polls, into a six point lead and then lo and behold we get an extra £8 billion for one of your weak flanks, the National Health Service.  

PATRICK McLAUGHLIN: Dermot, you tend to believe too much in opinion polls, there is only one poll I’m concerned about and that is the poll that is going to be three weeks on Thursday.    

DM: Don’t come that one, Mr McLaughlin, we know how much the Conservative party spend on polling, internal polling, all parties do.  

PATRICK McLAUGHLIN: I’m telling you what I’m saying is that the poll that matters is the one three weeks on Thursday, we have set out our proposals as far as the Health Service, it was always clear that we were going to want to, having appointed Simon Stevens, to abide by his plan and we did in the last parliament.  In the last parliament we’ve increased health spending every year and overall it is £7 billion higher than it would have needed to have been just to have done the inflation …

DM: Let me read you a quotation in the papers today from one of your former MPs, now candidate of course, saying we’re not in the panic room yet, we are in the waiting room to the panic room.  You will accept that as I alluded to earlier, your colleague Michael Fallon’s attack on Ed Miliband didn’t really work did it, saying just because he stabbed his brother in the back, stood against his brother, that he can’t be trusted on defence.  

PATRICK McLAUGHLIN: Well I think that what Michael Fallon was saying there was absolutely right.  If Ed Miliband has to rely on the SNP to form to government which could be possible on what’s being talked about at the moment, if that was the case then I think Michael was absolutely right to say we could find ourselves we might find ourselves in the trouble we might, as far as the decision on Trident is concerned.  

DM: But it is a matter of character then, you can’t trust Ed Miliband because he stood against his brother even though he took a different approach, it could have been anyone.  

PATRICK McLAUGHLIN: Well we are making our case in a very positive way overall on the issues that we’re fighting this next general election on.  

DM: But I’m just saying, instead we suddenly hear instead of attacks on Ed Miliband, making it a matter of character after he also, in those polls you ignore, he also went up in terms of his personal ratings, that suddenly we are getting some pretty unfunded give-aways.  

PATRICK McLAUGHLIN: We’re not, I don't think we’re giving any unfunded give-aways.  What we’re saying is look at the record that we did, we inherited a record deficit for this country, we cut the deficit in half, we’ve seen employment rise in this country.  We were told unemployment would go up, it has come down, so we have managed to find extra resources for the health service, the health service is incredibly important to us and anybody who hears the Prime Minister talk on the health service will know how passionate he is personally about the health service, so judge us on what we’ve done – unemployment down, deficit down, tax rates lifted up for everyone so that nobody earning under £10,600 a year is paying tax at all.  That is very positive.  

DM: Okay, let’s talk about your brief, HS2 and red lines in the manifesto, HS2, that is going to happen is it in spite of the fact that it might cost you a few seats?

PATRICK McLAUGHLIN: Well HS2 is something which is very necessary for the overall long-term capacity of the infrastructure of our country.  We have not invested sufficiently in infrastructure in our country.  The West Coast mainline is one of the busiest railway lines anywhere in Europe and unless we take the long-term plans to actually invest in infrastructure this country will not be able to compete.  Our great cities in Birmingham, Manchester, Leeds and Sheffield will not have the opportunities that London has had.  At the moment we are building Cross Rail in London, £15 billion, a big investment made at the start of this government, because it’s necessary to improve our overall infrastructure.   

DM: And just in terms of the overall campaign, voters may be a little bit confused about what they’re hearing, you know this was leaked during the weak wasn’t it, notes for speakers from the Conservative Research Department.  It’s interesting what you have just said to me, Mr McLaughlin, about Conservatives believe in a simpler and fairer tax system, hard-working tax payers keeping more of their money, that Ed Miliband would result in chaos by cobbling together a deal with the SNP – I mean that’s straight from this document.  You’re not really saying it as it is, you’re reading from the lexicon.  

PATRICK McLAUGHLIN: Well I haven’t got the lexicon in front of me and I am certainly saying it as I see it and as my constituents see it and when I go round campaigning in the country, that’s exactly the kind of thing that they’re saying to me.   

DM: Do you not think it is kind of off-putting for the voters, they know what they’re going to hear?  I know it is about reinforcing the message but people aren’t fools are they, they just keep hearing the same mantra all the time.  

PATRICK McLAUGHLIN: Well there is a message to get across during the general election campaign, I make no apology for doing that.  I make no apology for actually saying why I think it is absolutely essential that we get a Conservative government in three weeks’ time because I think that is right for the United Kingdom.  I am very proud of the record that the government has got over the last five years in government.  

DM: Secretary of State, thank you very much indeed, very good to see you, Patrick McLaughlin there.