P. Murphy
If I could start off Prime Minister, you've been back in office seven weeks during which time you seem to have crammed in a fairly massive amount of parliamentary work. Are you satisfied with the way things have started?
PM
Yes I think so. We have managed to do a massive amount of work. We've done the things which are essentially the decisions for the House of Commons. Obviously we had to appoint a Speaker right at the beginning. Capital punishment has always been a decision for individual Members. Members have to decide their own pay. There's no way around that. You can get recommendations but in the end they're the final forum of the nation and they have to decide their own. So all those things have been done. There are a massive number of things on foreign affairs on the decisions we have to take there. You're familiar with them. And then we got the Finance Bill through and all of the other things we've done in accordance with the Government's strategy. New Housing Bill to enable more people to purchase their own homes and more denationalisation. A Bill in fact to try to help with some of the debt positions of nations that are in acute difficulty. Many many White Papers on transport in London. We had a look at the question with regard to the Stock Exchange. I hope soon there will be a White Paper out on rating, and today of course we made announcements about the new Defence weapons which we're going to buy British.
P. Murphy
Are you disappointed though with the way that certain votes went on MP's pay, on the election of the Speaker and indeed on capital punishment because on all those you took the other side.
PM
Capital punishment went a different way from the way in which I have consistently voted. I was not surprised at the result. I've lived through many debates and it is very strange that it's one of those things where I think Parliament takes a very different view from the people as a whole. We've always had a tradition that each Member owes his constituents his judgement and we have to take that judgement when it comes to the debate on capital punishment. It went that way and I don't think we'll have another debate on it this Parliament. MP's pay. A Government has to give advice. I gave that [end p1] and I felt particularly strongly about it. You remember when the Plowden Report came out. Enormous increases for Members' pay and for Ministers' pay, shortly before the Election. I made a Statement, it was my duty to give a lead, it was the Government's duty to give a lead and the Cabinet discussed it and we made a Statement. So we thought that Ministers could not possibly take increases of that magnitude, could not possibly. And we trusted that Members of Parliament would take the same view. And I felt that that was the basis on which certainly Members of my Party had fought the Election and therefore I should have been utterly amazed had the vote which the Labour Party and most of the minority parties wanted which was to take the whole of Plowden to take it immediately, it was 31%;. Now we did not do that, because the majority of people in my Party did not want that. I'd recommended 4%; not 31%;, 4%;. In the end they had a compromise, they took 5½%; this year and then by similar stages, 5½%; and then I think it goes down to less than that in four stages to come up to slightly less than the Plowden recommendations. So I think that what I put up before the Election was reasonably honoured although I had only 4%; now.
P. Murphy
Looking to the future, public spending is obviously going to be a major problem facing the Government. Do you envisage any trouble with your own Backbenchers, over your desire to keep firm control on public spending?
PM
No I don't. That was the basis on which we fought the Election. No Government will manage to have sound finance or to keep inflation down or to have a fair and reasonable balance between expenditure and taxation unless it keeps control over public expenditure. Unless it's seen to have a budget at the beginning of the year in which it lays out and says we're going to live within those means. Every housewife has to do it, every business has to do it. Ordinary people understand that. But you know Members of Parliament are beginning to understand it because although for eleven and a half months of the year they might be demanding more public expenditure. We then come to the Budget and we say aha, now we know where you have to get public expenditure from. It's the taxpayer's pocket. There's no earthly good demanding an increase in public expenditure and then jibbing because you know the results of what you've asked for are that you put your hand more deeply in the taxpayer's pocket and the taxpayer does not like it. [end p2] You have to put this view all the time they ask for public expenditure. And you've got to give a fair balance between what you have public expenditure on and what the taxpayer has to pay.
P. Murphy
But isn't there anxiety in your own Party though that those cuts in public expenditure will hit those who are less able to defend themselves—the unemployed?
PM
I laid out the Public Expenditure White Paper. You've heard since we've been back we've had a look at things again and we stick to the totals of expenditure we said we'd stick to during the Election. … . running over because people are over-spending and then we have to do exactly what a housewife or business would do. We cannot overspend unless you're going broke. And if you overspend and if you overspend on one thing you have to overspend on another. That is sound finance and the alternative is to go to the taxpayer and say we've overspent, we've got to take more of your money out of your pocket and then what will the taxpayer say? Well where am I to get the extra from? You must consider the taxpayer because as you know, many taxpayers, indeed I think the overwhelming majority think we already take too much away from them, in terms of tax and National Insurance contributions. What you've got to do is balance both sides of the account, both sides together. Any fool can get up and say, aha, I want more expenditure for this. Of course you'd like to spend more but it's not coming out of their own pockets, it's coming out of their constituents!
P. Murphy
Does that mean you can't guarantee unemployment benefit will be protected after November next year?
PM
I said in the Manifesto and I said throughout the whole Election … . protect the retirement pensioner and linked long-term benefits. That does not include unemployment benefit or sickness benefit or some of the others, but it does include widow's because that's a linked long-term benefit. Remember I have got to look at the sort of revenue we've got coming in from the taxpayer, the sort of demands that are being made on their earnings because they look at net take-home pay and then make my decisions. You know what the unemployment pay will be, it's actually going up by 8%; or something like that this November. That is more than the wages of some people who are in work and we have to consider this. [end p3]
P. Murphy
And in the longer term are you going to have to consider, though not necessarily in this Parliament, changes in the whole structure of benefits?
PM
In the longer term for example, many of us who are now in Parliament will be retirement pensioners, you're going to get in a position where your working population is of a smaller number compared with the number of people retired—and in a position where your young people are going to want to stay in education longer, and you're going to have to look at the whole burden of expenditure on a smaller working population. And of course you're going to have to look and see what proposals you make about that. Because you know if you take so much away from people's earnings, they'll say well why should I work so hard and then they would perhaps do not quite so much work and then you'd have less money out of which to meet the many, many demands that are made. We all want to give more, but you know, no-one gives, it's all taken from the taxpayer. And so it depends upon how much wealth we can create, and how many incentives we can have to create that wealth. The public sector depends on an efficient private sector.
P. Murphy
Thank you very much Prime Minister.