:00:11. > :00:16.purpose. Time for HARDtalk.
:00:16. > :00:18.Britain's Conservative Party is under fire from all sides. Stuck in
:00:18. > :00:20.a fractious coalition with the country's Liberal Democrats,
:00:20. > :00:22.criticised in European circles for isolationism and split from within
:00:22. > :00:26.between centrist conservatives, like the British Prime Minister,
:00:26. > :00:29.and those pushing to the radical right, at least in economic terms.
:00:29. > :00:39.Dominic Raab is a rising neo- liberal star in the Conservative
:00:39. > :00:40.
:00:40. > :00:50.Party. But is his movement doing the party it comes from more harm
:00:50. > :01:05.
:01:05. > :01:07.than good? Welcome to HARDtalk. The
:01:07. > :01:17.Conservative Party promised tough measures to boost the slumping
:01:17. > :01:18.
:01:18. > :01:21.economy. Do you think harsher measures are needed? I think we are
:01:21. > :01:26.making excellent process. We are facing a huge debt crisis that has
:01:26. > :01:34.not been fully understood. I think governments have made important
:01:34. > :01:41.progress. Of course, we need to build on it.
:01:41. > :01:48.Specifically? I'm not defeatist about Britain's
:01:48. > :01:58.prospects. I think it is important for a backbencher like myself to
:01:58. > :02:04.take a big picture view. Decline is not inevitable. We have to face up
:02:04. > :02:10.to the debt challenge that we face. We have to plug the skills gap. We
:02:10. > :02:14.need to reward and recognise, and value hard work. If we face up to
:02:14. > :02:21.the challenges I think Britain's best days are ahead of us.
:02:21. > :02:24.You have called for tax cuts and cuts to public spending as well. If
:02:24. > :02:27.we look at the measures taken by the coalition government...
:02:27. > :02:37.Departmental spending is being reduced by 11% in real terms
:02:37. > :02:43.
:02:43. > :02:46.between 2012-2015. And yet the economy has shrunk.
:02:46. > :02:49.First of all, we promised to cut the deficit within this Parliament.
:02:49. > :02:52.We are one-quarter of the way through doing that. That is solid
:02:52. > :03:00.progress. In terms of firing up economic growth, of course we are
:03:00. > :03:04.in a rut at the moment. We have created over one million private
:03:04. > :03:11.jobs. We are heading in the right direction. We need to take a big
:03:11. > :03:21.picture view. In the long-term, the challenges we face are very serious,
:03:21. > :03:21.
:03:22. > :03:24.we need to sharpen our economic edge.
:03:24. > :03:31.Sharpening the economic edge, taking a tougher stance than with
:03:31. > :03:41.what you were elected? You announced you're a Thatcherite, you
:03:41. > :03:44.say the definition of fair dismissal should be widened. Small
:03:44. > :03:50.business should be excluded from paying the minimum wage for under
:03:50. > :03:56.21s. It is not very generous as it You described me as a neo-liberal
:03:56. > :04:06.star, I have never been called that before I will have to look it up. I
:04:06. > :04:10.
:04:10. > :04:13.think these are practical measures. Take the minimum wage. Small
:04:13. > :04:17.businesses are saying, we have got so much red tape, we are deterred,
:04:17. > :04:20.we do not want to hire. I did not say it should be removed, it should
:04:20. > :04:27.be suspended for under 21s, just for small businesses. We have got
:04:27. > :04:36.youth unemployment of 22%. Who gives them a shot and an
:04:36. > :04:39.opportunity? Somebody has got to speak up for the youth unemployed.
:04:40. > :04:43.This is a measure which is not only important economically, but also
:04:43. > :04:48.socially. Are you saying, speak up by
:04:48. > :04:52.offering them less? At the moment they do not have a job.
:04:52. > :04:54.If you reduce the minimum wage, reduce public spending... I did not
:04:54. > :05:04.say reduce the minimum wage. Businesses are not hiring enough.
:05:04. > :05:06.
:05:06. > :05:12.22% youth unemployed. If we can create more jobs overall, isn't
:05:12. > :05:18.that a good thing? Isn't it better for those 22% to get into the
:05:18. > :05:21.workplace and get that shot at making it? Making the best use of
:05:21. > :05:31.their talents to make it up the professional ladder. It is a win-
:05:31. > :05:33.win. If you have a look at France and the new President, Francois
:05:33. > :05:40.Hollande, he has spoken in favour of increasing public spending in
:05:40. > :05:43.education to give young people more of a chance. He is taking a
:05:43. > :05:49.different direction. He says increased taxes on the wealthy to
:05:49. > :05:55.give those who are disadvantaged... To be honest, he has not dealt with
:05:55. > :05:57.the huge public spending problems they have got. It has been
:05:57. > :06:07.ridiculed. The markets are increasingly worried France will
:06:07. > :06:12.
:06:12. > :06:14.fall into a debt trap. It cannot be right to keep spending more. Let's
:06:14. > :06:20.speak about Britain's problem. We have got household debt at around
:06:20. > :06:27.80%. Banking liabilities of 450 % as a percentage of GDP. It cannot
:06:27. > :06:30.be right to keep spending more. We have got to face up. We do not face
:06:30. > :06:32.challenges from the US and within Europe now, we have got Latin
:06:32. > :06:42.America, Asia, working hard and taking a much more aggressive
:06:42. > :06:45.approach. Working hard as well. We have got to learn some of the
:06:45. > :06:52.lessons. Looking at this country, spending
:06:52. > :07:00.less has not boosted growth. Public spending has been rising.
:07:00. > :07:05.Public sector job losses across the cuts have been part of the problem.
:07:05. > :07:14.It is impossible to sustain when you look at the figures. We have
:07:14. > :07:20.back loaded the cuts and public spending has been rising. We have
:07:20. > :07:23.got too much public spending. It rose by 14% under the last
:07:23. > :07:27.government. We are in an economic rut. It will take the dynamism of
:07:27. > :07:29.free enterprise to pull us through it. We are seeing signs of that, we
:07:29. > :07:37.need to go further. Should growth be more important
:07:37. > :07:47.than fairness? There is a book you recently published, you argue we
:07:47. > :07:48.
:07:48. > :07:50.have to ensure the general climate for business is attractive. We
:07:50. > :07:53.should stop indulging in irrelevant debates about sharing the pie
:07:53. > :08:02.between the north-south, women-men, but the focus of this coalition
:08:02. > :08:09.government is we are all in it together.
:08:09. > :08:12.What is going to drive economic growth? If you do not drive
:08:12. > :08:18.economic growth, who pays the taxes that cover the revenue for the
:08:18. > :08:20.public services? Unless you have got economic growth, you cannot pay
:08:20. > :08:23.for those things in the public sector.
:08:23. > :08:25.Is it growth over fairness? I do not accept that a zero-sum game.
:08:25. > :08:28.Unless we see economic competitiveness driving jobs growth
:08:28. > :08:38.and tax revenue, you are not going to deliver social justice that we
:08:38. > :08:39.
:08:39. > :08:48.keep talking about. The number one priority has got to be the economy.
:08:48. > :08:53.22% youth unemployment. Who speaks up for them in this debate?
:08:53. > :08:57.In the meantime, you are saying that fairness is irrelevant.
:08:57. > :09:00.Fairness comes afterwards. That goes against the Prime Minister.
:09:00. > :09:08.David Cameron, soon after the coalition was formed he said I want
:09:08. > :09:12.to cut the deficit in a way that is open, united and fair. It is not
:09:12. > :09:19.going to be fair if we do not look at the differences between north-
:09:19. > :09:21.south, men-women. What we are trying to do with welfare
:09:21. > :09:24.dependency, make sure hard-working families do not feel penalised
:09:24. > :09:34.because they are not taking the easy option and sitting on their
:09:34. > :09:44.
:09:44. > :09:52.hands and relying on benefits. That is incredibly important. If we take
:09:52. > :09:58.a longer term view and look to the next 20 years, understand one thing.
:09:58. > :10:04.We have got a huge debt problem. Five times the size of the debt
:10:04. > :10:07.legacy we had at the end of World War II. According to the Economic
:10:07. > :10:10.Institute for Social Research each child will have to pay off �200,000
:10:10. > :10:20.of a tax bill in order to enjoy the same level of public services
:10:20. > :10:30.previous generations have enjoyed. In order to improve that situation,
:10:30. > :10:32.
:10:32. > :10:37.you say that Britain should learn Israel...
:10:37. > :10:39.You are very damning when you come to your own electorate.
:10:39. > :10:47.Once they enter the workplace the British are amongst the worst
:10:47. > :10:53.idlers in the world. What we are quoting from, Niall Ferguson, a
:10:53. > :11:02.respected historian. If you look back to the 19th century, what we
:11:02. > :11:10.have got is a reduction in the number of working hours. Let me
:11:10. > :11:13.explain. You have had a cheap shot. Before you quote about working
:11:13. > :11:21.hours, according to the ONS, the out of full-time workers in Britain
:11:21. > :11:31.are the highest in Europe. That is aside from Austria and Greece.
:11:31. > :11:34.
:11:34. > :11:42.tells you more about Europe. You are simply wrong. Are you
:11:42. > :11:46.disagreeing... Since World War II, since the '50s,
:11:46. > :11:49.average working hours in Britain have been reduced by one-third. The
:11:49. > :11:51.problem is not just the workforce, it is the fact we are retiring
:11:51. > :11:56.earlier, despite longer life expectancy. It is also about the
:11:56. > :11:59.welfare dependency we have got. Britain is not lazy at all, a
:11:59. > :12:02.shrinking proportion of people in this country are pedalling harder
:12:02. > :12:11.and harder to sustain and drive the economy and pay for the public
:12:11. > :12:16.services we want. That is socially divisive. We talk about welfare
:12:16. > :12:21.dependency, marginal rates of taxation. Hard work should pay more.
:12:21. > :12:23.We are going to have to retire a bit later. You talk about the
:12:23. > :12:33.declining British work ethic. Indian children aspire to be
:12:33. > :12:40.doctors and businessmen, Britons aspires to be pop singers. We have
:12:40. > :12:43.been ducking tough subjects, not focusing on maths and science. We
:12:43. > :12:52.are talking about the length of education rather than the life
:12:52. > :12:57.skills. It is not in the interest of the economy. Margaret Hodge
:12:57. > :13:05.talked about Mickey Mouse degrees. You say I'm insulting the
:13:06. > :13:10.electorate. Let me reply. Look at Ofsted's report in 2005. 50% of 20
:13:10. > :13:17.year-olds said their education did not acquit them for their first job.
:13:17. > :13:20.We have been kidding ourselves with the education system. The fact we
:13:20. > :13:23.spend so much time in the book talking about this, shows we are
:13:23. > :13:26.not on some small state agenda, we are worried about some of the
:13:26. > :13:33.public services that are critical for the long-term future of this
:13:33. > :13:40.country. As for the long-term future, should it be inside or
:13:40. > :13:50.outside Europe? This is dividing the Conservative Party. A thorn in
:13:50. > :13:58.
:13:58. > :14:01.Voices inside the party saying to pull out of Europe. David Cameron
:14:01. > :14:05.saying we are staying in it. vast majority, the overwhelming
:14:05. > :14:09.majority of the Conservative Party think we need to renegotiate our
:14:09. > :14:14.relationship. Of course the Prime Minister is in a very difficult
:14:14. > :14:18.position because we did not win an outright majority. The Liberal
:14:18. > :14:22.Democrats take a very different view. If you are trying to say the
:14:22. > :14:26.Conservative Party is divided, that is not correct. There have been a
:14:26. > :14:30.few voices, but you do not have the fractious divisions we have seen in
:14:30. > :14:36.the past. You mean under the former Conservative Prime Minister, John
:14:36. > :14:46.Major? You are seeing splits within the party, some people saying, more
:14:46. > :14:47.
:14:47. > :14:51.power has to come back from Europe, others calling for a referendum.
:14:51. > :14:58.They are saying roughly the same thing. Even John Major said we need
:14:58. > :15:01.massive renegotiation of Britain's position. I think we need a
:15:01. > :15:05.referendum at some point. My opinion is we need to renegotiate
:15:05. > :15:15.the relationship. We want to break down the barriers and promote the
:15:15. > :15:16.
:15:16. > :15:20.four freedoms. That is the vision I have for Europe. I think it is a
:15:20. > :15:25.great thing. I would like to get back to that. I do not want to see
:15:25. > :15:28.centralised government running economic policy and social policy.
:15:28. > :15:30.We need to get back to a relationship focused on trade,
:15:31. > :15:34.breaking down the barriers to commerce and with much stronger
:15:34. > :15:44.economic foundations. I would like to renegotiate to that effect. The
:15:44. > :15:52.
:15:52. > :15:55.outcome should go to a referendum. When the time is right. But if
:15:55. > :15:57.there is such a renegotiation, that could damage relationships with
:15:57. > :16:00.Britain's key trading partners. When the British Prime Minister,
:16:00. > :16:03.David Cameron, used his veto in the important summit before Christmas,
:16:03. > :16:10.you had the German Chancellor saying we look forward to seeing
:16:10. > :16:20.Britain leading in Europe rather than staying isolated. It is a
:16:20. > :16:20.
:16:20. > :16:26.dangerous game to play. It needs to be handled sensitively. I am not
:16:26. > :16:30.anti-European but there are two points. Any honest conversation
:16:30. > :16:37.with our European partners, that we don't want to see moves towards a
:16:37. > :16:41.federal Europe and if they go that way we need to move back. In any
:16:41. > :16:46.event, we need to renegotiate our relationship in the way I described.
:16:46. > :16:50.That is important. I do think we need to be sensitive in the way we
:16:50. > :16:54.handle that. We also need to look at the big picture. You say it is
:16:54. > :16:56.our major trading partner but since 2004 we have had more trade
:16:56. > :17:01.internationally, exports and imports, with the rest of the world.
:17:01. > :17:09.Put together? As a result of globalisation, the EU is important
:17:09. > :17:15.but it's a shrinking share of our trade. In fact, it accounts for
:17:15. > :17:19.about the 6th or 7th of GDP. Let's not kid ourselves. It is important
:17:19. > :17:23.but there is the rest of the world, Asia and Latin America, where we
:17:24. > :17:29.ought to be promoting trade. other side of the argument, those
:17:29. > :17:32.inside the Conservative Party who are calling to lead Europe. They
:17:32. > :17:34.cite that economic argument. Douglas Carswell is one
:17:34. > :17:40.Conservative backbencher who's part of a small group calling itself
:17:40. > :17:46.Better Off Out. He says the euro crisis has destroyed the case for
:17:46. > :17:53.EU membership. He says we are now having to prop up a zombie currency,
:17:54. > :17:57.that we didn't even join. He says to leave it. Douglas is one of the
:17:57. > :18:01.great figures in the party. I am not calling for withdrawal from the
:18:01. > :18:05.EU. I would like to see if we can renegotiate so we have a
:18:05. > :18:08.constructive and flexible relationship. The truth is, in the
:18:08. > :18:12.Conservative Party and the Labour Party, there are people who want us
:18:12. > :18:17.to withdraw but that's not where I am. I want to be focused on trade
:18:17. > :18:20.and commerce and make sure we get the best out of the single market.
:18:20. > :18:27.If we can't get that re-negotiation, perhaps we will have to look at
:18:27. > :18:30.pulling out. It's a challenge for Europe and Britain. You have
:18:30. > :18:36.referred to the pressures this Europe debate's putting on the
:18:36. > :18:39.shaky coalition government. What is the question? The Lib Dems are pro-
:18:39. > :18:43.European. We have a debate within the Conservative Party calling for
:18:43. > :18:50.a referendum. That is putting a lot of pressure on a coalition
:18:50. > :18:53.government that is already in trouble. It is new to the press
:18:54. > :18:57.here but in other parts of Europe, they are used to a coalition
:18:57. > :19:00.government. It is perfectly natural that you will have different voices
:19:00. > :19:03.heard and different debates. That is not unhealthy. We should have
:19:03. > :19:07.more debate, not less, and certainly with a coalition
:19:07. > :19:14.government. There are many other stresses and strengths of a
:19:14. > :19:18.coalition. -- strains. The idea we walk around obsessed with Europe
:19:18. > :19:26.every day is ludicrous. Back to Europe. Your strategy for growth is
:19:26. > :19:36.seen, in economic terms... Seen by who? The BBC? You talk about cheap
:19:36. > :19:41.shots. I'm just asking. They're labels. You are asking for the
:19:41. > :19:45.minimum wage for the other... For public spending to be cut. This is
:19:45. > :19:49.not the current government's strategy in regards to the economy.
:19:49. > :19:54.I'm not sure about that. Look at some of the things we talked about,
:19:54. > :19:58.cutting red tape. Vince Cable just announced he is taking on board
:19:58. > :20:03.some of the ideas I came up with, like making sure... He is the
:20:03. > :20:07.business secretary. Yes. He is taking up some of the ideas I
:20:07. > :20:17.talked about. We should not see so many conspiracy theories go to the
:20:17. > :20:23.
:20:23. > :20:27.tribunal. We are less snobby in this country with the idea that you
:20:27. > :20:30.have to go to university. Many of the ideas we have been talking
:20:31. > :20:34.about have been taken up by the coalition. It shows we should have
:20:34. > :20:37.a balanced source of ideas and we should debate these things. David
:20:37. > :20:41.Cameron has been labelled in parts of the British press, right wing
:20:41. > :20:44.British press, as wishy-washy and has been forced to do so because he
:20:44. > :20:48.is in a coalition government. Whereas others in your party are
:20:48. > :20:52.seen as more to the right of that. As it approaches the next election,
:20:52. > :20:55.in 2015 in the UK, what will be the tone as regards to economics for
:20:55. > :20:59.the Conservative Party? I'm not sure. Firstly, I believe David
:20:59. > :21:02.Cameron is doing a very good job in very tough financial and political
:21:02. > :21:05.conditions. There is a lot of tittle-tattle in the media and
:21:05. > :21:09.among some quarters of the Conservative Party, and I do not
:21:09. > :21:13.believe any of that for a second. I will not predict whether the Prime
:21:13. > :21:16.Minister will lead us. But we have to be clear about two things. We
:21:16. > :21:19.are taking seriously the debt crisis that threatens not just our
:21:19. > :21:22.economic competitiveness but the prospects of the next generation.
:21:22. > :21:26.And we are equipping the private sector with the skills and also
:21:26. > :21:33.cutting the regulatory burden on them so that they can deliver the
:21:33. > :21:36.jobs and prosperity that we need in this country. Both in terms of
:21:36. > :21:40.economic opportunities and, as I said before, somebody has to pay
:21:40. > :21:42.for the revenue to pay for the public services we want and that
:21:43. > :21:52.comes from the dynamic public sector. If the free marketeers,
:21:53. > :21:54.
:21:54. > :21:58.this growing voice... Stop picking up on that label! Can the Coalition
:21:59. > :22:03.survive that? If that gathers momentum leading ahead to the
:22:03. > :22:07.election, can the Coalition live with that? Why not? If Nick Clegg
:22:07. > :22:14.is calling for a fairer society and is much more wary about what areas
:22:14. > :22:20.of public spending can be cut... Within the Coalition there are
:22:20. > :22:29.natural tensions. I have already given you some examples. Some of
:22:29. > :22:32.the ideas from the Coalition have been disruptive and taken on board.
:22:32. > :22:36.-- constructive and been taken on board. That's the way it will
:22:36. > :22:39.continue. We will see these tussles and a sort of creative tension
:22:39. > :22:42.between ideas but hopefully that produces a critical mass of ideas
:22:42. > :22:46.on which there is a common ground, free enterprise. The Lib Dems
:22:46. > :22:49.should stand for that as well as the Conservatives. Some of my ideas
:22:49. > :22:55.are important. There is common ground and there is nobody that has
:22:55. > :22:59.been more outspoken about civil liberties than me. Many of my
:22:59. > :23:02.colleagues agree with that. There is plenty of glue in there to keep
:23:02. > :23:05.the Coalition together. What about the party itself? Is David Cameron
:23:05. > :23:08.the man to lead forward into the next election? Absolutely. What
:23:08. > :23:11.about Boris Johnson? Many mention the gregarious Mayor of London as a
:23:11. > :23:14.possible contender. But nobody is seriously suggesting that David
:23:14. > :23:18.Cameron will not lead us into the next election. Boris has been
:23:18. > :23:23.fantastic. It is incredible what he achieved in London, both in terms
:23:23. > :23:26.of improving the city and beating Labour. But I don't think he or
:23:26. > :23:31.anybody else in the Conservative Party seriously thinks that he will
:23:32. > :23:35.be challenging David Cameron. He is the right guy to be leading us into
:23:35. > :23:38.the next election and I have no doubt he will. What about, once
:23:38. > :23:45.again, within the Tory party and within the Conservative Party, you
:23:45. > :23:48.say it is all united. There are however figures, Liam Fox or David
:23:48. > :23:55.Davis, that have been critical of the Coalition government, saying
:23:55. > :24:02.more has to be done. It isn't enough just to talk tough about
:24:02. > :24:06.spending but something needs to be done. You appear to stand with them,
:24:06. > :24:09.not necessarily behind the Prime Minister. There are voices in the
:24:09. > :24:13.Conservative Party that articulate conservative vision and ideas and
:24:13. > :24:19.that is healthy. There are also others. We don't think that is
:24:19. > :24:24.unhealthy. You don't seem to really understand why. Having constructive
:24:24. > :24:29.debate, as long as it is not personal... We should have more
:24:29. > :24:37.critical debate on policy areas and the big issues. The public want to