ADAM BOULTON: It was confirmed today that Margaret Thatcher’s funeral will start at 11am next Wednesday at St Paul’s Cathedral, we’ll be covering that of course on Sky News, but in the meantime political activity is resuming, the Prime Minister is on a regional tour of the Midlands and he joins me now live in Loughborough. Thank you very much indeed for being with us. Some of your critics are saying that you are exploiting Margaret Thatcher’s death for political purposes, what do you say to them?  

DAVID CAMERON: I think that’s completely wrong and I’m not aware of anyone who’s …  

AB: Alistair Campbell.  

DC: Really? Oh well, I think we can discount that. What I think matters is do we as a nation mark the passing of this incredible woman, this incredible statesman, our first and only woman Prime Minister, do we mark that properly? And I think it’s important that we do. I think it was right to recall Parliament, I though the tributes yesterday were well done and generally speaking brought the House of Commons together rather than separated it and I think it’s right to have a ceremonial funeral with key elements of a state funeral, with the troops lining the route and I think it’s good way to pay respects to an extraordinary woman.  

AB: Was it necessary to recall Parliament, given that MPs are back on Monday?  

DC: I think it was. I think that it made sure that this week started in the correct way.  

AB: The Speaker was taken aback by the request.  

DC: Well a request was made and the Speaker granted it and that’s why Parliament was recalled but I would say judge it by its results. I thought the speeches yesterday both in the Commons and the Lords, there were moving tributes, I thought it brought the Parliament together, it brought out the best of Parliament and I think it was part of a fitting send off to our first ever woman Prime Minister.  

AB: Ten million pounds does seem an awfully high price tag for a funeral, particularly in these days of austerity.  

DC: Someone made the point in the debate yesterday that the rebate that she got for Britain’s contributions to the European Union have so far saved us £75 billion but I would make the more serious point that the first woman Prime Minister in our history, three terms in a row, Prime Minister for longer than anyone for 150 years, solved some of Britain’s deepest problems in terms of industrial relations, helped to end the Cold War, liberated the Falklands – I think people would find us a pretty extraordinary country if we didn’t properly commemorate with dignity, with seriousness but also with some fanfare, properly mark the passing of this extraordinary woman. I think not only in Britain would people say you’re not doing this properly but I think the rest of the world where Margaret Thatcher meant a huge amount as well, I think the rest of the world would think we were completely wrong.   

AB: What did you think of Ed Miliband’s speech yesterday? You seemed to appreciate it.  

DC: I thought it was very good, I thought it set the tone that both of us tried I think to do the same thing in a way which was to talk about some of her achievements, to try and tell some stories of the human side of Margaret Thatcher and both of us I think tried to say, although I obviously supported almost everything that she did, there were some exceptions …  

AB: It was more difficult for him.  

DC: As I was saying I supported almost everything that she did and he was saying he opposed much of what she did, we were both I think making the same point that you can recognise statesmanship, achievement, dedication, conviction, you can recognise those things even if you don’t agree with someone and I thought that set the tone well for what was I think moving tributes and I think right to mark the passing of this extraordinary woman.  

AB: Do you think his performance yesterday is a warning to those Conservatives who say well, Ed Miliband is our secret weapon, he’s unelectable?  

DC: Well I never underestimate any of my opponents …  

AB: You’ve implied he’s useless in the past.  

DC: No, no, I ever underestimate any of my opponents. I am up against I think my fourth Labour leader, I think my fifth Lib Dem leader, I never underestimate any of my opponents, you must always take them very seriously but I think what matters is does Parliament, the House of Commons, the cockpit of the nation, does it rise to the occasion for something like this and I think it did.  

AB: How do you think you measure up against Margaret Thatcher?  

DC: Well that’s a very, very difficult … I think we all live in her shadow and I think we should just recognise that fact and recognise there are important lessons to learn, things that she got right, attributes that we need in our country today. We do need a dogged determination and conviction to deal with the incredible mess that we’re trying to sort out but I think we also need to recognise that times change and different approaches are needed and I’ve always tried to learn from all of my predecessors.  

AB: Will there be a memorial to Margaret Thatcher? Boris Johnson is talking about a Margaret Thatcher International Airport. Better than Boris Island from your point of view I would have thought.  

DC: Well Boris, anything to get more progress on his airport! I think there’ll be lots of monuments. I think we should take some time and think about this and make sure that we get it right. I think this week is about the recall of Parliament, it’s about a proper way to mourn the passing of Margaret Thatcher and then I think obviously the very important ceremonial funeral on Wednesday. I think we can take some further time and people want to think about what more to commemorate this extraordinary leader.  

AB: You have just been in Derby on this tour which of course was where the Philpot’s lived and where those children died in a fire. You said there were questions coming out of the Philpot events to be asked about the welfare system, what did you mean?  

DC: What I meant was, first and foremost – and this is absolutely key – we have to hold Mr Philpot responsible for his crimes, personal individual responsibility, that is absolutely vital, but does this case lead to a wider debate about what’s happened with our welfare system, the signals it sends? Yes, I think there is that debate.  

AB: What are the points to debate? For example some Conservatives are saying stop Child Benefit after two children, is that something you would back?  

DC: Well I made a speech some months ago pointing out a whole series of reforms that we could consider in terms of working age welfare to make sure that the welfare system is sending a signal which is that we support people who work hard but welfare shouldn’t be a life choice. I think we do need to have a debate in this country about that issue, it shouldn’t be a life choice and I think that’s the issue the Chancellor was raising and I would join him in raising it. Look all these issues …  

AB: Would only giving Child Benefit to two children be one of the things you think should be considered?  

DC: That isn’t something that we’ve put on the table so far but people are entitled to make these sorts of arguments that how much should the state support families, support life choices at a time when resources are tight? You have to stand back and look at the overall figures: one in every three pounds spent by the government is spent on welfare. Now in the speech I made I identified a whole series of choices I think we need to look at. If you are a young person, you leave school, you get a job, you stay at home with mum and dad, you’re not entitled to housing benefit. If you leave school, go on the dole, you are entitled to housing benefit. We do send some signals through the benefit system that are potentially perverse and we need to think about that and I do think that the focus on working age welfare rather than going after pensioners, who I think if you’ve worked hard all your life you should retire with dignity and security and this government has made sure that’s the case.  

AB: The problem is though that you and George Osborne are trying to restrain government spending, cut it back more than Margaret Thatcher ever achieved and even in her time in office what we saw was a widening disparity between rich and poor. Is it your intention as Prime Minister to narrow that gap?  

DC: What I want is for us to be a fair country but fairness to me is principally about if you work hard, if you do the right thing, if you put in, are you treated fairly by the system?  I think one of the really important things …  

AB: And the devil take the [high road]?  

DC: Not at all, absolutely not at all. We have a huge responsibility to help the poorest in our country, to help the frail, to help the elderly, to help the disabled.  If you take for instance benefits to the disabled, the amount we spend is going to go up, it’s not going to go down but I think there is a really important issue about how we talk about fairness. Fairness of course is about how you help the poorest in our country but fairness is also about if I work hard, if I do the right thing, is the system on my side, is it fair in that respect.  

AB: If you look in the Financial Times today there’s a report from Sheffield Hallam University looking at the impact per worker of the welfare changes. A poor area like Blackpool is going to lose over £900 a year per worker, a rich area like Cambridge just over £200. I mean that’s going to increase the disparity between the haves and the have not’s.  

DC: That raises a very important question. I think that Labour tested to destruction the idea that simply through larger and larger increases in a welfare bill you could heal the north/south divide. You can’t. What we’ve done, actually what Labour did is create a more welfare dependent country and what we’ve got to do is make sure, we can’t afford the state we have today, we need a smaller state and a bigger private sector and Adam, this is really important because this didn’t happen to the same extent in the early 1980s but it is happening now. What we are seeing is actually growth in private sector jobs. Over the last three years we’ve seen the creation of 1.25 million private sector jobs, that’s very, very important and unemployment has actually been falling in recent months rather than rising.  

AB: I know that’s the goal but the people who are left behind, the people who don’t have work, the people who are dependent on benefits are going to be worse off in Cameron’s Britain aren’t they?  

DC: No, I don’t accept that either. If you look back over the last five years, people on out of work benefits have seen their incomes go up by 20% where people in work have seen their incomes only go up by 10%. That’s because so many people in work have had no pay rise, they’ve had a pay freeze, some people have had to take a pay cut and that’s why the decision we took to say that in work benefits, the key in work benefits were only going to go up by 1%, that’s so important because again it’s an issue of fairness. You shouldn’t be better off out of work with a bigger increase in your benefits than you are in work working hard trying to do the right thing for your family.  

AB: I accept that but just on your concept of fairness because I think it is important given the hard times we’re in, closing that gap, is that important to you, between the people at the bottom and the people at the top?  

DC: I do want to see us have a fairer country and the gap does matter but we also have to define fairness in a range of ways. One sense of fairness is are we doing right by the poorest, the frail, the most needy in our country?   Another definition of fairness which does matter is some of these gaps, as you say and I would particularly look at the gap between the bottom and the middle, I think that’s particularly important and then a third part of fairness, absolutely vital, that if you work hard and you put in, does the system treat you fairly and that’s what I think … we ask people, what’s become unfair about Britain and they will say what is unfair is I’m working hard but there are people who are swinging the lead on welfare, there are people who are not making …  

AB: But not many, statistically not very many if you look at it.  

DC: I don’t accept that. I think that …  

AB: A very small percentage of people on benefits, I think less than 2%.  

DC: Well if you look at for instance the work that’s been done going through people who are in receipt of the old incapacity benefit, what we’re finding is that actually there is a lot of opportunity to help people who were just left on that benefit. Now some of them I think probably were happy not to be in work but lots of them would love to work, would like the opportunity but they weren’t getting the help and this is where I think there’s a tender path …  

AB: I was talking to a woman today who fears she is going to lose her mobility allowance because she can walk 20 yards rather than 50 yards, as a result she’ll lose her vehicle and she’ll lose her job and her connection with the outside world. That doesn’t help anybody.  

DC: I can’t comment on that individual case but two points. The money going into disability benefit is going to go up not down. Second point is that the new disability benefit, the Personal Independence Payment, is going to be based on a proper face to face conversation with someone and a proper medical check up. Disability Living Allowance, what happened was – it was a good benefit in some ways but what happened was you filled out the form, but once you filled out the form and got the benefit you were parked on it and left on it for year after year. What we should be doing is trying to help people, not to ask what can’t you do but to ask what can you do.  

AB: I just want to ask you two questions about foreign affairs. You’re going to Germany tomorrow, we understand with the family, to stay in the Schloss Meseberg.  

DC: Chancellor Merkel came to Chequers and she met my children when she came over and she is returning the compliment.   

AB: Helmut Kohl today, talking about Margaret Thatcher, has told the Times that he believes that Britain’s antagonism towards Europe is Margaret Thatcher’s antagonism to Europe which still characterises Britain’s approach today.  

DC: I don’t really agree with that. I mean I think that Britain, and we are a very practical country, we come to these European debates and we are always asking why do you want to do this, is this necessary?  

AB: You want to review competencies and the French and the Germans write back and say you do it on your own.   

DC: Our review of competencies was always and will be a British exercise.  

AB: Then why did you ask foreign governments to participate?  

DC: We didn’t, it is a British exercise so that whole story I think you’ll find is complete …  

AB: Well the Swedes have given you an answer, so you must have asked them.   

DC: Anyone is free to feed in to our review but that piece of work is a British piece of work but look, I’ve more optimism and confidence than you because for years people said to me you’ll never get the European seven year budget cut. I got a cut. For years people said you’ll never have the courage to actually veto a treaty. I vetoed a treaty so we’re not involved in it. Chancellor Merkel and I are going to be discussing amongst other thing – and of course we don’t agree about everything but one thing we do agree about is that the European Commission should start doing less, should start taking things off the table.   

AB: Is your relationship with Chancellor Merkel as Margaret Thatcher’s relationship was with Kohl, according to Kohl?  

DC: No, I think we get on very well. We’ve had our arguments and disagreements in the past, I’m a huge admirer of her as I think she is a phenomenal political leader. She is a force to be reckoned with but there is a great common interest between Britain and Germany in Europe, we both want to make sure there’s value for money, we both think that the Commission can do far too many things, we both want to support private sector and industrial growth so I think we’ll have a lot of things to talk about this weekend.  

AB: Finally, extraordinarily, we apparently have the threat of nuclear war hanging over us thanks to the position being taken by North Korea. You said this shows why Trident needs to be renewed but can you see any circumstances in which you would use Britain’s nuclear weapons against North Korea?  

DC: Well the whole point of having a nuclear deterrent is not to use it. It’s there as the ultimate insurance policy so it’s something you have in order not to use but it is the insurance policy that needs to be there. The point I’ve been making is…  

AB: But it doesn’t stop these threats does it?  

DC: It kept us safe during the Cold War and I believe it keeps us safe today in a very dangerous and uncertain world and the point I was trying to make about North Korea is who knows what these regimes will do with their weapons, how they will develop them, who they will share them with, how that technology might end up. It isn’t possible to sit here and know that for certain but I think the one thing we can know for certain is that Britain is safer, Britain is better off with a credible nuclear deterrent and that’s why I’ll always make sure we have one.  

AB: But if it came to it you would use the nuclear weapons against North Korea?  

DC: The whole point is that we have … I’ve answered your question and that is the …  

AB: But you have had to write directions, have you not, in case you are killed, on the use of nuclear weapons?  

DC: Of course, it’s the first thing you do as Prime Minister.  

AB: So if North Korean nuclear weapons killed you, would you want Britain to retaliate?  

DC: The whole point of having a nuclear deterrent is that it is a credible deterrent that you don’t want to use but because it is there that is the way that you have your insurance policy.  

AB: David Cameron, thank you very much.  

DC: Thank you.