“The power of forecasting is not something that I have”
My colleague Matt Chorley has an interview with the Chief Secretary to the Treasury in today’s Independent on Sunday. The full transcript, below, repays close reading.
Danny Alexander: This time last week we were still putting the finishing touches to the decisions we have announced. This is something I have been working on for the last five months, but for more people in the country it starts now. In a sense, I think the decisions we have made are right, they are justified both by the terrible economic circumstances and also the individual choices themselves we have to explain, and I think we have a big job to do to explain the decisions we have made and what the consequences of them are.
That’s something I am going to be doing a lot of over the next few months.
Q: How will that process work? Can you explain it to people to accept it?
My perception is most people in the country accept in a very commonsense way that the country has to live within its means. We cannot go on, building up more and more debt, running the largest deficit in Europe. That just carrying on as we are, building up debt with a massive deficit, is the biggest gamble that this country could take.
And actually people respect the fact that we have got a plan, that we are trying to sort the country out, that two parties are coming together to take responsibility for cleaning up a mess.
But of course I was very clear in my mind throughout the whole process that every single number on every single page, that every single decision we have made affects somebody. That it is somebody’s job, it is a service that people rely on.
So we have to go about explaining in a very clear way why we made the judgements we did and why we think that it is in the best interests of the country.
Q: Polls before Wednesday said they agreed on the need for cuts, but that was when people thought, “It won’t affect me.”
We’d already made some decisions before the spending review. We have announced the thing on taking child benefit from higher rate taxpayers. We’d announced some very significant welfare changes in the budget. We had stopped building schools for the future programme. I had stopped a number of projects where frankly previous government ministers had been pretty reckless going around the country in the election promising what could happen when there was no money left.
I think people already had a sense that this was real. But you are quite right to say that until we had announced what our decisions were people didn’t know precisely how it was going to affect different services and so on. And I particularly recognise that for people who work in the public sector there is real concern. Because this is going to affect the jobs of a lot of people. And I hope very much that we can make the reductions in headcount that we need to make in the maximum through not filling posts rather than redundancies, though there will be redundancies.
Q: Is the danger that it ends up being salami-slicing by default? Instead of thinking what do we actually need, you just end up with the people left who have chosen to stay?
The spending review looks very closely at every service and there are things that we are stopping. We have already announced the child trust fund. That means the folk who run that programme, they no longer have those jobs.
There are many other areas in many other departments where we are changing things. In the Justice Department we are going to have a very significant review of sentencing which is going to hold the prison population stable rather than continue to rise, and potentially fall towards the end of the period. That’s going to be a big change. Resources are going to shift from incarceration to rehabilitation.
That’s a big shift. That will mean a big change in people’s jobs.
We’ve abolished the regional development agencies. All those things have a direct impact on people.
One of the decisions we made right at the beginning was to try and reduce the cost of central government here in Whitehall. Every department has reduced its administration costs by at least 33 per cent. That is a big change and is going to of course mean jobs.
Q: Will the majority of jobs be through compulsory redundancy, or what is the split with natural wastage?
I couldn’t really say at the moment because its for individual workforces and individual employers in the public sector to work through those things themselves. It would be wrong of me to try and give a guess at this point. Individual organisations will make that clear. One of the things I am concerned about the job losses to try and make sure that we mitigate the impact in particular areas where public sector employment is a big part of the economy.
Unmanaged, this process could lead to particular places seeing lots of different organisations reducing the jobs or taking centres away. So we are setting up a process which will mean we are able to look at people’s workforce plans before they are implemented to try and manage the regional impact so you don’t get really localised hotspots of joblessness.
Q: Will that come to the Treasury?
The DWP will be responsible through their labour markets committee. But it will come to the Treasury too.
Not local authorities, they are responsible for their own decisions but central government yes.
As the DWP or HMRC are planning how they make their reductions we want to know in advance what they are planning so we can avoid real localised hotspots. They might announce [their plans] on the same day but we have got to try and manage the impact on regions, and try and link that into the regional growth fund which we have expanded in the spending review whose job is to try and help support real economic growth in these areas through supporting businesses and initiatives to create other employment.
Q: The Lib Dems are down to 10% in a poll, the lowest level it is said since 2003, while the Tories are bobbing along at 40%. Why do you think that is, given the efforts to make it clear you own the whole package?
We do own the whole package, this has been a coalition effort from top to bottom, from start to finish. Our strategy is to say that we are going to deliver our plans over the course of this parliament so at the next general election we can demonstrate to people we have done the right thing for the right reasons and we’ve implemented a lot of Lib Dem policies. This is just one poll.
I know there are people in the public sector and elsewhere who are concerned about what we are doing. I’m sure that includes people who voted Liberal Democrat and in a sense what we have to do is continue to explain why we made the decisions we did, why they are the right things for the country and why as a result Britain will be a fairer and more prosperous place at the end of this parliament.
I think that Britain has been really let down in the past by governments spending all of their time looking over their shoulder opinion polls and headlines, tacking and weaving depending on what the latest poll or headline said. We are not going to do that. We are going to see this through, we are going to deliver the plans we have set out, we are going to deliver the policies that we set out in the spending review and the coalition agreement and we are going to show people that in government, in a coalition, we are delivering on our plans.
Q: If at the end of that you still don’t reap the benefits of it, the Lib Dems suffer at the next election, do you think that will have been worth it because you’d have eradicated the deficit. Is doing the right thing for the country more important for you?
Doing the right thing for the country is the most important thing. Every Liberal Democrat would agree with that but I don’t accept the premise of your question because I think that over a five year parliament people will see that the Liberal Democrats as part of the coalition have made a real difference to this country, we’ve had the courage to see through some very, very difficult decisions which will secure greater fairness and greater prosperity in the future.
The argument we have to make is deficit reduction, financial discipline, is the essential precondition for economic growth. If you want to have more resources in the future for the services that we care about, you cant do that by continuing to borrow more and more and more every year. At some point its going to fall over. You have got to deal with this problem.
You’ve got to sort out the deficit, you’ve got to have the country living within its means and its only through that as a foundation that you can then deliver on the services that lots of people in this country and we as Liberal Democrats care about.
Q: And what about how you fight the next election? The Lib Dems made a big play at the election about trust in politics and doing politics differently but actually there were lots of promises the Lib Dems made which you’re not fulfilling now. Particularly tuition fees, you signed the pledge of tuition fees…
Let me say this. We didn’t win the election, no-one won the election. So of course as part of the coalition there have to be compromises. There are in the coalition things that can came from the Liberal Democrat manifesto, there are things that came from the Conservative manifesto. There are things that show a blend and improvement on the basis of a fusion of the two sets of ideas.
So I will be able to look people in the eye at the next election and say, look at the front cover of our manifesto we highlighted four big things, pupil premium, we highlighted raising the tax threshold, we highlighted a new green economy, we highlighted political reform.
These are all things that we are already making major steps to delivering on. So I think that as part of the coalition we are already making a real difference to this country. The fact you have got two parties willing together to sort out what is the most difficult economic situation this country has faced for generations is I think a very great testament to the resilience of both parties in the coalition actually and I think that people will see that in the Liberal Democrats too.
Q: But specifically on tuition fees, Nick Clegg in an interview seems to imply that basically your policy wasn’t thought through enough, now that work has been done it doesn’t work. Was there a sense that you signed a pledge at the time probably not thinking that you would be tested in government? Really you shouldn’t have signed it.
Well, um, er, I think what we are doing on … er … Universities and so on in what are very, very difficult financial circumstances –
Q: But they were difficult financial circumstances before the election.
…public spending is really squeezed and actually what we are able to do – and Vince is going to come out in due course with firm plans – is something which genuinely will help students from disadvantaged backgrounds. What Lord Browne recommended in terms of students grants and repayment thresholds, those things will really help make the system more progressive.
Q: What was wrong with the [tuition fees] pledge? Was it that actually it was a daft pledge to have made because now you have looked at it properly your policy didn’t stand up? Or have you had to make the sacrifice because it is about making a compromise with the Conservatives?
In the coalition agreement when we negotiated we simply set some tests for assessing Lord Browne’s proposal. So we didn’t put our policy from our manifesto in to the coalition agreement because it was not part of the deal that we struck.
I know what you are trying to get me to say …
Q: Nick basically says the policy you went into the election fighting wouldn’t even have delivered the outcome that you thought it would have done which makes you look a bit daft that so many Lib Dems signed the NUS pledge presumably because that was to appeal to student voters. So actually this isn’t about compromise with the Tories, this is about the fact your policy was daft?
We all signed up to the policy of the manifesto whether … That’s the nature of an election manifesto.
Q: With the benefit of hindsight was it not the right thing to have signed up to?
It’s not with hindsight.
Q: Well at the time did you think it was the wrong thing to sign up to?
We had a big debate within the party about the nature of what our policy should be on this and that debate concluded with a policy that was in our manifesto.
Q: But there was a sense that the leadership was saddled with something that you really didn’t want?
Look, we had a debate within the party, I argued for changing our policy, others did too, on all sides not just the leadership. As a party we concluded that we wanted to go into the election with the policy in our manifesto, as a collective process, we all signed up to that quite rightly so too. The pledge that we signed reflected that policy. That was one element of the pledge, the other element was to try and make the system fairer overall. I think that in the context of the very difficult financial circumstances that we find ourselves and the fact that we are not in government by ourselves …
Q: But had you been in government by yourselves, would you fulfil that?
I doubt very much whether under current circumstances it would be affordable to be honest. But what I do think we are able to do, subject to what Vince concludes in the exercise he is doing, is a system which does have many more elements that help support people from disadvantaged backgrounds than what the previous government had put in place and that is a significant improvement.
Q: Another key themes of the Lib Dem manifesto was the rolling back of the surveillance state but in the defence review the Interception Modernisation Programme still talks about collating emails and phone calls, which looks like another Lib Dem policy dropped. Civil liberties was a strong theme before the election, but now?
It is a very strong theme of the government. We have made a lot of steps. We have got rid of ID cards. We have got rid of the database that sits behind ID cards system too.
Q: But how does this fit with that?
Well, I’m not going to get into the deal of that programme because that will be something to be announced in due course but I think in terms of something which… er… I think that it… it sits within … I think it sits within and is consistent with the position that we have set out.
Q: So keeping emails and phone…
I’m sorry, I’m just not going to go into the details of the programme because that’s going to have to be something that’s announced in due course.
Q: But the details are in the defence review that was published.
Er… well there’s some detail there but the Home Secretary will have to set out more things in future. I think what’s in the defence review is consistent with the approach that Liberal Democrats have taken to these matters.
Q: The child benefit cut was a big political battle and there was an intellectual argument that people who are better off not receiving universal benefits.
And as it happens we discovered when we got the figures from the OBR that it raises more money which meant we didn’t have to make some changes we might have had to.
Q: But having accepted that principle , keeping the winter fuel allowance and the TV licence and the bus pass for all pensioners seems to be at odds with that principle.
I think it is actually very important that we maintain strong support for elderly people in society, people who have worked very hard all their lives, people who have contributed all their lives. Part of the settlement if you like in the welfare system is that we look after the older generation properly.
As it happens, when I looked at the figures, one option would have been to link winter fuel payment to pension credit but there are 1.6m pensioners who are poor who don’t claim the pension credit and actually what you would therefore have been doing is taking money away from a whole lot of poor pensioners.
That’s why in the end I thought it would be the wrong thing to do and keep the winter fuel payment as it is. If you’d say lets restrict it so it doesn’t go to higher rate taxpayers raises such a small amount of money that the cost and complexity of actually doing that would have been disproportionate.
I think it is better to stick with the winter fuel payment as it is, pay it to everybody, have an ongoing supplement to their cold weather payment so we stick it at the £25 level for good. That’s now the new level we wont like the previous government drop it back to £8.50 once the election is out of the way.
I think that gets the balance.
Q: Isn’t a big reason why the winter fuel allowance, the bus pass, the TV licence have been kept because of the TV clip of David Cameron saying read my lips they are going to be protected? It’s the price of the Prime Ministers credibility at stake as much as the saving.
Something which was very much in my mind on this was we made a commitment in the coalition agreement. So both parties had signed up in the coalition agreement to protecting those things. Of course we looked at all the options across all benefits. There are lots of benefits we are maintaining in the spending review. For the reasons I have given I think it’s the right decision.
Q: With child benefit there is a principle that better off people should not receive a universal benefit. But better off pensioners should?
I can go through the reasons I have explained if you’d like but I don’t think you want me to repeat what I’ve said.
Q: That package looks more like the political price the Prime Minister in particular would have to pay to row back on that, but you’ve rowed back on other things.
Both parties made a political commitment to those things in the coalition agreement. If we had taken away winter fuel payment for people who didn’t get pension credit it would have the perverse effect of taking money away from 1.6m of the poorest pensioners in the country. I think that would have been the wrong thing to do. So therefore when one looked at what that decision would have involved, it is better for poor pensioners as well as for the consistency of the welfare system in the way in which we support everyone in retirement to keep the winter fuel payment as it is.
Q: Did you come under any political pressure from the Conservative side of the coalition to keep it, or was it based solely on the numbers?
Look, we made the right decision, I am not going to go into the ins and outs of conversations that we had. Four of us sat round the Cabinet table for hours on end for a number of days. Endless cups of tea and sandwiches from the local sandwich shop working through every one of these things. It wouldn’t be right of me to tell you what went on.
Q: The coalition was put together in a frenetic four days. Is there anything now you wish you’d sorted out then or left open?
Lots of very expensive commitments but we wouldn’t have been able to keep them! I think the coalition agreement stands the test of time actually.
Q Are you surprised by that, it was very frenzied, there was no template to work from, everyone was feeling there way in the dark a bit
I’m not surprised. I think that both ourselves and the Conservatives had applied a great deal of thought to policies across the board and our manifestos as we prepared for the election and its not a surprise that when you bring together the best elements of two well thought through manifestos that you come up with a plan for government that does stand the test of time. But of course we have had to meet our aspirations with the resources available, and that’s going to be tough whatever the policy you are trying to implement.
Q: Looking back now are you relieved that a deal with Labour fell apart, and it was probably for the best that Labour didn’t push it very hard?
Yeah, I think the coalition is working very well internally and I think its working really well for the country too. It was the best option for the time and its very much proving now that it was the best option. I think that when we were talking to Labour, apart from the numbers which would have meant relying on majority parties for every vote, that was a party that is completely divided about whether it wanted to be in power or not.
The thing that really struck me talking to them was just that some of the people around the table wanted to do a deal and some of them didn’t. You could not possibly form a sustainable coalition with a bunch of people who on the one hand think they have a god-given right to carry on in power and on the other hand half of them were desperate to be in opposition and retreat into a sort of more comfortable slightly older Labour position.
Q: What do you make of Ed Miliband and Alan Johnson?
I know Ed Miliband quite well and have got a lot of time for him actually. He wrote the Labour manifesto, I wrote the Liberal Democrat manifesto, Oliver Letwin wrote the Conservative manifesto so we had interaction at debates where the three of us got together.
To me this is not about personalities, its about policies and I think they are fundamentally misguided on the economy on two big fronts. The first is not taking responsibility for the mess that they left.
Until the Labour stands up and says sorry, got it wrong, we left this country in a big hole, people will not take them seriously on the economy.
It is not just about the deficit – though they did leave us with the largest budget deficit in Europe, one of the largest in the world – its also about the fact that they went round in the months leading up to the election making all sorts of promises with bouncing cheques around the country that couldn’t be kept.
If you go back four or five years Vince Cable was busy warning them there were problems building up in the economy and they closed their ears to it. So they bare a lot of responsibility for the terrible financial position that we are now in.
I am very proud that there are two parties now willing to dig us out of that hole.
The second criticism is they don’t have a plan, so not only are they in denial about their culpability they are in denial about how to fix the problem now. I just think they have got no credibility whatsoever.
And so, Ed Miliband and Alan Johnson can be, as decent guys as they are, but actually they just don’t have a plan for the country, they don’t have any credibility on the economy as a result and until they get that fixed they don’t get to first base in this debate as far as I am concerned.
Q: Do you think that at this stage in the game that really matters, because all the focus is on what you are doing and the cuts you are making and the election is going to be decided in four and half years time?
I am not focusing on having a political row with the Labour Party. I am focused on making the decisions we have made and now explaining the choices to the country. We have made some very difficult choices which are really going to affect people and I think we owe it to the country to explain those choices, why we have made them and why we think this is the right plan.
Q: Do you think that the choices you have made are fairer and look after the poorest because there are Liberal Democrats in government?
I think the choices we have made are fair. Everyone is making a contribution and that is difficult for a lot of people and I don’t want to belittle that, quite the reverse. But I think some of the decisions that we have made on the pupil premium on investing in early years education, on putting more resources into social care, a radical localisation of power, are decisions that ensure we will really help the most disadvantaged in society to get through this period and particular investing in the right chance for children.
Q And those things are only happening because of the Lib Dems?
Those are things the Liberal Democrats have been committed to for a very long time indeed. I am very proud that we have been able to deliver those policies as part of a coalition plan for fixing the country.
Q: At the election that was criticism of the Tories being gung-ho on the economy or not understanding people who are less well-off so having Liberal Democrats in government making sure the cuts are fairer is a good thing, isn’t it?
I think it is a very good thing that Liberal Democrats are in coalition. I think it’s a very good thing that we are fully signed up to this whole programme, that we are owning this process from top to bottom and we are contributing to it ideas that do make the country fairer. Though actually, the other thing I’d say is the Conservatives in this coalition are taking as much care about the impact of the decisions we are making as Liberal democrats are. We are bringing lots of ideas to the table, so are they, but it is a coalition effort where we are being really careful about the impacts that we have on people.Though many of those impacts are difficult, we have really thought them through.
Q: In Alan Johnson’s response on Wednesday he said that some in the government, pointing more at the Tories, went into the politics to roll back the state. Have you come across that?
No, I haven’t actually. I genuinely have not had a sense from anybody that this is an ideological thing, that frankly both parties would prefer not to be in this situation. We didn’t come into politics to do this but we have got an unavoidable problem that we are stepping up to the plate and dealing with.
At the end of this Parliament, public expenditure will be 41 per cent of GDP, the share it was in 2006-07. That is a substantial share and much greater than it was when Labour came into power in 1997.
In real terms public expenditure will be at the level it was in 2008-09. These are really difficult decisions and they have a big impact on people but the idea that this is some sort of ideological rolling back of the state is just nonsense.
Q: What will happen in the council elections next year? The Lib Dem strength is built on councillors who are foot soldiers and activists.
It is true that parties in government tend to not be rewarded at local elections, that has been true historically. But I think this time actually people are aware of the situation that faces the country and that has an effect at local level too, of course it does. We’ve had to make reductions, though we have given much greater freedom and flexibility to councils, quite rightly so.
But I think people also see two parties willing to take responsibility for sorting things out in a mature way in a sensible way, in a way that protects the services that really matter most to the most disadvantaged. There will be a strong argument to be made that actually the people you want at a local level sorting out these problems at a local council level are people from parties willing to step up to the plate and take responsibility. I think that’s an argument we can make effectively next year. I have not given up on that at all.
Q: What will happen at the AV?
People seem to assume that I am some sort of fortune teller or soothsayer. I wish I was but the power of forecasting is not something that I have.
Q: Do you think it is winnable?
Of course I do. I think the referendum is absolutely winnable. I think there is a reform to the voting system on the table, first time ever in a national referendum, which will give people a much greater say over who their MP is,. Would mean every MP would have to have the support of half of their electorate which would strengthen democracy at a local level. That is a very winnable argument and I’m looking forward to that campaign.
Q: On councils again, alongside the removal of ring fencing there is also the removal of lots of reporting targets.
4,770 reporting requirements… I discovered one of them National Indicator Number 179. 66 pages of guidance for local authorities to report to central government. I said what’s this about, they said that is the reporting requirement on how local government is getting on with the previous government’s efficiency programme. They had an efficiency programme which required 66 pages of reporting guidance and bureaucrats at both ends to collect and process it.
That just shows how completely non-sensical Labour’s approach to efficiency was.
Q: At a time when severe cuts are going to be made by councils and you’re not collecting information about what they are doing. There’s a sense tough decisions are being passed down.
The previous government saw local authorities as local agents for central government. We are putting both the local and government back into local government. Elected councils elected by local people will have lots of decisions to make and we are giving them more freedom and flexibility to do so, we are taking away burdens which would save more money for them and we’ll be legislating through the localism bill to give them more freedoms to do the right sort of things.
I think if we can strengthen local government through this process that is a good thing.
Q: But in terms of the decisions being made, there is not going to be central date, for instance no parliamentary questions on what is happening nationally.
Another side of our agenda is transparency. We are being much more transparent about information, whether that is information about distributional effects in the documents we publish at the Treasury. Whether that is public access to information about costs and outcomes and all those things so that local government and national government will be much more transparent about how they are spending people’s money.
That will mean there is plenty of scope for local democratic pressure to say why are you wasting money here when you could be spending it here. And actually what you want is local government and national government that is accountable to people, not some idea that it is bureaucrats in Whitehall to be the people who hold local authorities to account. It is genuinely radical stuff this.
Q: Is that enough to limit the impacts of the cuts coming to councils?
I think there is a lot that can be done in local government in terms of improved efficiency. This thing of three London councils sharing back office services and all that, there’s a lot more that local authorities could do there.
One of the things we have really driven through and pushed in the spending review is this concept of place based budgeting whereby you say in a given area for given services there are actually potentially quite a lot of different arms of government – local authorities, department of health, maybe the probation service, all putting to resources bear in a very siloed way and if you get people to pool their budgets to plan jointly how they deliver their services you can get much better outcomes for less money.
Thinking much more creatively about how you go about doing things at a local level. It’s a signal that Eric Pickles and I have sent very strongly in Whitehall. We held a special Star Chamber meeting on localism a couple of weeks ago now in order to make sure other departments know what they need to be doing in terms of de-ring fencing grants and committing to place based budgets.
Q: How easy is it to turn the Whitehall machine which quite likes being in charge of everything from the centre?
It’s a big job, of course it is. But we have got a government which is more committed to the localism agenda than any we have seen which is part of the ideology from both a Liberal Democrat and a Conservative perspective that we really want to push that through.
We have used the spending review to make a big shift in that direction and I think that civil servants are very responsive indeed to the lead given by their ministers. It has been discussed at Cabinet. The Prime Minister and the Deputy Prime Minister have made their views clear.
Of course there will be difficulties. The message starts here and by the time it gets to the bottom of the chain it has changed but we are going to just make sure we push this one because it matters. Part of Andrew Lansley’s health reforms for example is going to be a new responsibility shared with local authorities for public health, with pooled budgets at a local level to do that. I think its going to really change the way local government works for the better.
Q: On the IFS, and your graphs and their graphs. Nick Clegg has said they have been distorted. What’s your take on it?
I have a great deal of respect for the IFS and their quality of their work. In this case I think what they have offered is a partial analysis. It doesn’t cover the full spectrum of what is in the full spending review and doesn’t give the full picture about how progressive the choices we have made are.
In particular they look at some of the welfare measures, and of course welfare changes are going to hit people on welfare who are lower down on the income spectrum but those changes are focussed on encouraging people to go out to work. Incentivising people to do so, both in terms of support and help through the work programme and in terms of benefit changes and a lot will depend on those incentives.
The IFS hasn’t looked at the changes made to spending in departments so for example the pupil premium is a major redistribution of resources towards children from the most disadvantaged backgrounds. At pre-school age we have found additional resources to both protect entitlement for free nursery care for 15 hours for three and four year olds and add a new entitlement for poor two year olds for another 15 hours at the age of two. Those two things together are a real investment in improving the life chances of children from disadvantaged backgrounds.
The IFS picture doesn’t link all of those things together.
If you look at the deficit reduction plan as a whole, tax welfare and spending the picture we present in the spending review is an accurate one.
Q: But that includes Labour’s tax changes as well.
Tax changes that we are delivering. The National Insurance change, we’ve taken away what we thought were the worst parts of it, that is going to be a Bill that we will push through the House over the next few months by coalition government ministers. We are going to take that Bill through the Commons as our measure.
We have announced things on pensions – that is taking a lot of money off some very wealthy people. We’ve stuck with the 50p tax rate, these are all part of the overall deficit reduction plan that we as a government are seeing through.
Q: Instead of looking at percentages, if you take five per cent off somebody on a very low income that’s their quality of life money for food, or heating or housing, whereas if you take five percent off somebody who is well-off that’s holiday money or means putting off buying another car.
I understand that the changes we have announced have a real effect on people. That was I my mind every step of the way, every decision we made, every number on the page reflected something that would be difficult for people. I am not in anyway trying to downplay that. I know how serious it is…
Q: Is it worse than you thought?
But I think overall the effect in taking into account people’s income is a fair one and I think we have been able through the choices that we have made to be able to do something that will make a really positive difference to peoples lives too, particularly in the NHS and education and by choosing to focus capital investment on transport projects and things that make a real difference to the economy, I think we can support economic growth going forward too.
Q: If you start coming across perverse outcomes, is this set in stone or could you revisit it depending on how it starts panning out?
The things we have set in the spending review, those are the spending numbers we are going to deliver. I don’t think people should have any doubt about that. That is our plan, we’ve now got a plan.
Q: To use Chris Huhne’s phrase you are lashed to the mast?
We have got a plan, we are going to stick to that plan because it is essential for economic growth, is essential for prosperity to have discipline in the public finances that we live within our means as a country. We are going to stick to it.
Q: Is it right you found an extra £1bn last weekend as you finalised the figures?
We had a long list of decisions that we might have to make, because of how all the numbers panned out some of those things we didn’t have to do. It did mean that we were able to ensure that we had a properly funded Green Investment Bank and support investment in science , for example, both of which are very, very important to economic growth. It is not quite true to say we had extra money suddenly emerge from somewhere but as we looked at all the choices we were making we could see how the numbers added up in great detail so yeah we were able to make final decisions that really helped.
Q: And they were decisions that you weren’t expecting to be able to make?
It doesn’t quite work like that. You’ve got millions and millions of decisions in lots of different departments and as you all focus down and work through each set of numbers you work out precisely what you can save in different areas and then you see at the end we have the ability to do this thing as a priority which we didn’t think we had the resource to do which now we think we do.
Photograph: Justin SutcliffeTagged in: danny alexander, liberal democrats
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