Speech

Deputy Prime Minister's Q&A with MSN

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A transcript of Deputy Prime Minister Nick Clegg’s Q&A session.

Matt Ball:

Hello and welcome to MSN’s offices in London. My name is Matt Ball. I’m the editor-in-chief of MSN. This is the third in a series of events we’ve hosted here with the country’s most senior political leaders. We kicked this off in February with the then leader of the opposition David Cameron and then in April, the day after announcing the General Election, Gordon Brown was here and today I’m delighted to welcome Deputy Prime Minister Nick Clegg. Welcome to MSN Nick.

Nick Clegg:

Well it’s great to be here. I’ve never sat on such a trendy stool in my life. I’m not sure if I’m going to be able to manage this for an hour so I’ll probably get off my perch in a minute. Thank you very much for organising this. I’ve been doing town hall meetings in much less hi-tech environments – in village halls and school gyms and stuff – for a good couple of years. I think I’ve done sixty or so. And in opposition I found it was a great way for people just to ask questions, express concerns, hurl polemic or vitriol in my direction and then give me an opportunity to try and field those questions and give answers as best as I can and I’ll be very keen to carry that on in Government.

It’s something which I hope epitomizes a bit the different way that this Government is governing and also the different way in which we are trying to make ourselves across Government as accessible as possible, particularly as we are taking very, very many difficult decisions in the months ahead. So I’m delighted to be here. I think we’ve got a screen now haven’t we where messages are coming in and questions are coming in and I’m looking forward to answering as many as I can.

Matt Ball:

Thank you very much. So I’ll briefly explain the format for today and then we’ll kick off with the first question. So for the past four days we’ve received hundreds of emails to our Hotmail account from MSN users across the country with questions. I have my own personal selection of them here, which you have not seen, and I’ll be choosing from those.

Also, if you haven’t had time to send us an email you can still ask a question during the session. On twitter, you can post a tweet – use the hashtag #asknickclegg. Or you can use Windows Live Messenger. The contact is asknickclegg@live.co.uk. Just add that contact to your Messenger contacts and send a question. Our moderators at the back will field questions from Twitter and Messenger. A selection of those will appear on the screen in front of me and also over here and I’ll endeavour to choose those. We may also take a few questions from our invited audience. Our audience comprises MSN Microsoft staff and also a few colleagues from other media.

So, kicking off with the first question, which was received on email from Arthur in Kettering: The coalition is reaching its first 100 days in office. What have been the highlights and lowlights so far? And he also asks how long can it last?

Nick Clegg:

It will last for five years. I mean that was one of the big, one of the many changes that we’ve introduced is that we’re going to take away from the Prime Minister the ability to play games with the timing of the election. We all remember this time we were sort of left waiting for weeks and weeks and months and months about whether Gordon Brown would or wouldn’t call an election. I don’t think that’s healthy for a democracy. It shouldn’t be the plaything of the Prime Minister. So we’ve said, look, we’re going to govern for five years. We’re going to legislate. I’m introducing the legislation in the autumn in Parliament so that governments will have that fixed term of five years.

And anyway, I think we need five years to sort things out. We’re a coalition Government, a partnership Government, two parties coming together in the national interest for the first time in many, many years and we have to take a lot of very difficult decisions so that we can then move forward, rebuild the economy. I think there’s light at the end of the tunnel. There’s so much gloomy news around but I think there are glimmers of better news and I hope when the five years are up, people will see that we’ve taken difficult decisions yes, some controversial ones, some unpopular ones but we’ve done it for the right reasons to get the economy right, get growth going again, give people a sense of kind of hope about the future again.

Matt Ball:

So we’ll come onto the economy in a moment. The other part of Arthur’s question was what have been the highlights and lowlights of the coalition so far. We are reaching 100 days this week, how do you feel it’s gone?

Nick Clegg:

I think there are a lot of highlights. I think the creation of the coalition itself was clearly something that’s never happened before or hasn’t happened in this way before so that was pretty extraordinary. I think many people felt that a coalition Government by definition would be some sort of insipid mush where different parties haggled constantly with each other until they produced some sort of lowest common denominator policies that don’t really make a difference.

Actually what I’m finding after 100 days is we’re being accused of doing exactly the reverse, which is doing things too quickly, too fast, too radical, too reforming and I think that’s a sign of a Government, whether you agree with it or not, a Government which has got a very strong sense of purpose, and we do. And I think what is interesting is that even though we are different parties with different ideas and different policies, we’ve managed to create a set of agreements on what we want to do on the economy, on public services, on political reform, on tax reform, which are radical – which are radical and reforming.

Matt Ball:

And are there a specific couple of initiatives you want to highlight as ‘these are things I think we’ve done that really stand out as something that people should be looking for from us in the future, more of that type of thing’? I mean what would be [indistinct].

Nick Clegg:

I think it’s too early to tell. We’ve put out there a lot of new ideas about how to improve the health service, to give patients a greater say in the health service, to give local authorities and local people, local communities a greater say in how local health services are organised.

We’ve legislated already for some important changes in education which we are now going to add to by providing extra funding through something called the Pupil Premium to really try and crack this perennial problem in British education which is why is it that children from more disadvantaged backgrounds don’t do as well in school, to give them targeted support.

We’ve published a very ambitious programme of political reform. And of course we’ve taken some early, very difficult, painful decisions to try and restore some sort of sense to our public finances and that of course will dominate right through to the comprehensive spending round in October and arguably beyond.

But just on that, because that’s what quite rightly concerns so many people, you know dealing with a budget deficit is not, I didn’t come into politics to deal with a budget deficit. I didn’t come into politics to announce cuts. It’s not why anyone, I think, goes into politics from whatever party and actually there’s much more party consensus on this than you’d imagine [party political content]. So everybody is agreed there needs to be cuts. I just think the trick is to do it in a way that is as fair as possible, that people understand is necessary and then allows us to move on and create an economy which grows, is sustainable and which grows across the country, not just in the south east and London. That’s the kind of stuff we’ve been setting out.

Matt Ball:

So on that, Gregor on email says do you think the cuts you’re proposing are too harsh when we’re trying to get out of recession.

Nick Clegg:

I think the job of filling this huge black hole in our public finances, you can’t duck it. [Party political content] You have to do it. And it’s on a huge, huge scale. There’s no easy way out of this. It would be lovely to think we can somehow sort of turn our backs on it, not deal with it, defer it, delay it, defer it, delay it.

I mean, I think because of what has happened in Europe, what’s happened in Greece, what’s happened in Spain, because of the endless, relentless pressure that all open economies are now under to try and sort out their public finances and the international markets, because of that I think it’s just morally wrong to constantly build up debt today which you then hand on as a legacy to your children and your grandchildren. There’s nothing fair or socially just about just handing on debt from one generation to the next.

I think someone had to draw a line and say no, we’re going to sort this out because you can’t create growth, you can’t create a fair economy on the sands of debt. And that’s why we decided that we did want to accelerate the pace at which deficit reduction was happening, we’ve set out a plan for how we’re going to do that and I hope, however much people might quite understandably feel very anxious about some of the cuts, I hope people will accept that we’re doing this not because we want to but because we have to and if we don’t do it, we can’t create the sort of fair, growing economy that we do all want.

Matt Ball:

The theme of fairness came through a lot of the emails we were receiving, people feeling that they’ve been working hard, they’re now facing redundancy or in some cases emails from people who have lost their jobs, they’ve tried to put some money away because that’s what we’ve been told to do and then they end up worse off than people who’ve been on benefits for a long time. And they’re really questioning is this fair? Is this what we perceive now as fairness in the economy?

Nick Clegg:

Well I think we’ve taken a number of steps already which show a very strong commitment to fairness. Let me give you some examples of something that I campaigned on for a long time when I was a leader of a party in opposition, to change the tax system so that you keep more of your money as you’re earning it. We’ve raised the personal allowance by a thousand pounds. We’ve started to close some of the big loopholes that are only benefitting the people at the very top, raising the Capital Gains Tax by a full ten per cent. We’ve given a very fair pledge to pensioners that their pensions will increase by inflation, earnings or by 2.5 per cent, whatever is highest. It’s a sort of triple guarantee, if you like, to pensioners. That’s been talked about for years.

We’ve increased the Child Tax Credits dramatically by over £2 billion over time, so I think we’ve already hard-wired into the Budget some very, very important big ticket steps which will make the tax system fairer, which will make the pensions system fairer, which will make sure we look after children even as we take these difficult decisions. It doesn’t mean that the difficulties aren’t controversial but it does mean that we’re taking, I think, much greater steps than anyone possibly could have imagined beforehand, in order to ensure that it’s done as fairly as we possibly can.

Matt Ball:

And so if we want to kickstart the economy a bit, then a lot of questions have come in about banks not lending money, even if the taxpayer seems to own a substantial chunk of some of these banks. So this is from Doug who says he’s actually trying to set up a business in your area, Sheffield. Business plan is solid, can’t access any funding. What are we going to do to get banks lending properly?

Nick Clegg:

Well we’re looking at this straight away, right now, and Vince Cable, George Osborne and others are working up some proposals right now. I think it’s arguably one of the greatest constraints on the recovery of the British economy this lack of lending from banks to British businesses. You get a lot of finger pointing – banks saying, “Oh there isn’t enough demand for our money” and a lot of businesses, particularly small and medium-sized businesses who I meet saying, “Well of course we’re not asking for this money because it’s being offered on rates that we think are unreasonable”. And we want to cut through this knot, this sort of stand-off between people who need money and the banks who aren’t lending money. It’s complex. The banks say, “Oh well, we’re being put under pressure to restore our balance sheets so of course we hoard money. We hoard the money to restore our balance sheets. We’re put under international pressure by international regulations to have particular ratios of capital to the amount of money that we lend.” We need to look at all of those things.

I, for instance, think that it clearly is not right when there are small and medium-sized businesses which are the lifeblood of the British economy crying out for credit from banks, aren’t getting that credit because the banks are being told they’re under regulatory pressure to only provide those loans on terms which aren’t attractive to small and medium-sized businesses. That’s just crazy and we’ve got to try and untangle all of that and that’s exactly what we’re trying to work up in detail right now.

Matt Ball:

So that might untangle the finances, but there are also questions coming in about businesses themselves being overregulated. Is that an area that you’re going to put some focus on?

Nick Clegg:

Yes we have and we’ve already said for instance that we’re going to introduce a one-in, one-out rule so every time a new bit of red tape comes in which businesses have to abide by, another bit of red tape which is on the statute book needs to be removed. Vince Cable is chairing within Government a deregulation taskforce which is looking at ways of stripping away unnecessary or redundant red tape. I think one of the problems as well has been that lots of things get shoveled onto the statute book which creates more and more day-to-day administrative burdens, not just for businesses but for charities, for schools, for everybody. And those administrative rules stay there long after they’ve actually been useful and I think what we need to do is introduce more sunset clauses so where something has been introduced for a specific purpose it automatically falls unless an explicit decision is taken to renew it because it’s still needed.

Matt Ball:

Okay, thank you. I’m going to move onto another area now. You mentioned at the start the change in five-year fixed terms. There are also some questions about electoral reform. We’ve had one here on Messenger from Jessica and also one here from Hannah who says I’m 16, I can sign up for the Army, get married, pay tax so when am I going to get the vote?

Nick Clegg:

Well my personal view is that there is a strong case for the lowering of the voting age. That’s not – I should stress before people start getting overexcited – not the position of government as a whole, at least not yet. And we’re not, we haven’t included it in the Coalition Agreement and it’s not in the first wave of political reforms that we’ve already set out on fixed term Parliaments, on introducing fairer constituency boundaries, on a referendum on the electoral system, on House of Lords reform, funding reform, power of recall and so on.

But it is something that I personally think very much needs to be looked at. I don’t think it’s a kind of magic wand. I don’t think lowering the voting age in itself suddenly creates hundreds of thousands of teenagers who weren’t interested in politics who suddenly become interested in politics. But I just think for exactly the reasons that, was it Jessica did you say…?

Matt Ball:

Yes, Jessica and Hannah.

Nick Clegg:

…said, by the age of 16 you have a right to start determining who shapes your country, who runs your country and I think that case has become stronger over time. But look, it’s something that we need to discuss collectively. It shouldn’t be a party political issue, by any stretch of the imagination. Everyone will have different views on it. I meet teenagers who are 16, 17 who say they don’t think they want the vote because they feel that they’re not ready to have the vote. On the other hand I meet lots of people who are 40, 50, 60 who feel that they’re still not ready to have the vote. But, look, it’s a debate, I think it’s a debate which should be had.

Matt Ball:

So we are going to have a referendum on the alternative vote. It’s currently the plan. So there are two questions here, one from Elizabeth on the screen, how will that strengthen our parliamentary democracy? And one from Helen saying at a time of significant cuts in public spending, how much is this referendum going to cost us?

Nick Clegg:

The overall package of course, let’s remember, includes a proposal to cut the number of MPs so we only have a parliament of 600 and that would save around £12 million a year on a recurring basis. You have a one-off cost depending exactly on how you calculate it of between £80 million and £100 million for the referendum itself. One of the reasons we are seeking to combine it with local elections next May and the devolved elections in Scotland and Wales is precisely because it saves about £17 million combining it in that way. So that’s on the money side of things.

How do I think these changes could improve things? Well, look, I would have thought that one of the main lessons of the expenses scandal is that things go wrong when people who are in politics basically get jobs for life, don’t feel they’re being held to account, don’t feel they’re being properly scrutinised for what they’re doing, and somehow sort of feel they’re in a parallel universe, in a world apart lording it over the rest of us.

And I think what is an absolute guiding spirit in all the changes we are making, whether it’s taking away from the Prime Minister the right to choose the timing of the election to suit his or her purposes; funding reforms so we cast more light and transparency into the way in which political parties raise and spend money; giving you the right of recall so if someone has done something seriously wrong and they’re in Parliament and they’re your MP, you’ve got a right to trigger a by-election by gathering signatures on a petition so you don’t have to wait for the next General Election to cast that judgement on them, you have that power of recall; more equal sized boundaries so that everyone’s vote is worth the same – at the moment because constituencies are of dramatically different sizes, your vote is worth less in one place than it is in another place; and yes giving you the right, giving people to right to decide whether you want to continue with a first-past-the-post system which critics such as myself believe has bred a slight kind of cultural arrogance in Westminster because you’ve got lots of MPs who’ve got jobs for life, no questions asked, even though only a minority of people in their area have supported them, do you want to stick with that or do you want to go with something else which is the alternative vote where you have more choice by ranking your candidates in order.

All of those things are designed to do one simple thing – put you more in charge and make sure you have greater control and greater say over how politicians behave. I think that’s got to be a good thing.

Matt Ball:

Do you think that that’s enough after the expenses scandal to reinvigorate people’s trust in Parliament?

Nick Clegg:

I don’t think it’s enough. No, I don’t think any one law or one referendum or one change will in and of itself repair the immense damage that’s been done to public confidence because of the lamentable abuses of the expenses system by MPs. I think time will help but also I think if we see through these reforms, hopefully by the time of the next General Election in five years time, I will be able to say to you, look, agree or disagree with these changes, at least politics is different. The era of expenses scandals, of unaccountable MPs, of MPs who get up to no good and you can’t do anything about it is over. You now are more in charge. And I hope over time that’ll help not only repair people’s trust in politics, but also encourage Jessica and her friends and others who are young to take an interest in politics when they want to.

Matt Ball:

So we’re going to take a question off Messenger here, moving to foreign aid. Dear Nick, I’ve been seeing the dreadful images from Pakistan. What is Britain doing and why has it not been doing more to help the millions of people there.

Nick Clegg:

Well the first thing I’d say is that we are actually doing a lot. I mean about, close to a quarter of the aid already devoted to Pakistan has come from this country. The response from the international community as a whole, however, I have to say, bluntly, has been lamentable, it’s been absolutely pitiful. And I’ve been asking myself over the past few days, why is it that people elsewhere aren’t reacting to what’s happening in Pakistan to the way that they reacted with money and outpouring of compassion for instance at the time of the earthquake in Haiti?

I think one of the reasons may be because this is a disaster on a scale that people I think are still struggling to really understand. The flooded area is the size of England. Twenty million people – that’s the same as a third of all people living in this country – have already been directly affected. And it’s getting worse every day because the floods are spreading. And of course a lot of the damage is by definition underwater and people are being pushed, displaced in massive numbers. So maybe it hasn’t had the same sort of cataclysmic effect on the public conscience that an earthquake has had or something which is almost more visible to the eye.

But I don’t think we should be under any illusions. When the Secretary-General of the United Nations goes there – and Andrew Mitchell the Development Secretary, I was talking to him about it this morning, is going tomorrow – and says this is the worst humanitarian catastrophe he has ever seen, that is a real, real wake-up call for the whole international community and I really hope we’ll see a significant step change in response to a catastrophe on a scale which I don’t think has been properly responded to yet by the international community.

Matt Ball:

So does Britain have a role to encourage other nations to get involved?

Nick Clegg:

Absolutely, of course we do and one of the principle ways of doing that is by leading and we’ve allocated over £30 million already and we have already taken a lead in the international effort but we need other people to help.

Matt Ball:

Okay, thanks for that. This is quite an interesting question, more about open Government I think. So, we have things like Dragons Den and X Factor where people effectively pitch. Would you like to hear more from the country on their ideas for what you can do?

Nick Clegg:

Yes absolutely and one of the things that we’ve done is we’ve launched a number of online fora where people can make suggestions about how they think we can create savings in Government spending. How can we best balance the books and do it in a way that doesn’t penalise people who need to be protected. We’ve had a massive, massive response, particularly from people working in schools and hospitals and elsewhere, people who really know where the waste is, who really know where the unnecessary bureaucracy is, who really know where the unnecessary forms are, who really know how money can be saved.

I certainly find as I travel round the country that I will meet nurses, doctors, surgeons in the NHS, I’ll meet teachers and headteachers at schools and they’ll tell me, sometimes in a whisper, “you know you could save so much money if only we didn’t have to do this or we didn’t have to chase this target or we didn’t have to fill in this form”. And what we need really is for people to come out in the open with these ideas so that the best ideas from the front line are used by all of us in order to save money, cut back on waste in a way that makes sense.

Matt Ball:

And how are people going to see whether those ideas were ever taken forward? I mean, they’re just sitting on a website for now. What actually is going to happen?

Nick Clegg:

No, no we’re responding. In a different way, for instance, I’ve launched a website where people can make suggestions about rules or laws or regulations that you think are daft or don’t make sense, or harm your civil liberties or invade your privacy. And we’ve had massive responses and I’m responding myself through podcasts and emails and so on, on a regular basis saying how we’re looking at these ideas and of course, we will then publish a response showing which ideas we’ve explicitly adopted as Government policy.

Matt Ball:

So here’s one off Twitter from Nick Southall: we’re cutting public services and benefits, shouldn’t we be going more vigorously really after tax evasion, maybe closing tax loopholes, doing more in that area? There seems to be a lot of money we could save there.

Nick Clegg:

I think there is more we can do and there is more we will do to clamp down on tax evasion and tax avoidance. I think one of the things that has gone wrong over the last decade is the tax system has become so complicated and it’s changed so much over and over again that it’s become an absolute paradise for clever accountants and particularly very wealthy people with an army of lawyers and accountants who can basically get out of paying their dues in tax because of the loopholes in the tax system and that’s one of the reasons why we pushed and I pushed very hard in the Budget to make sure that we closed, if not in full, then at least in large part, the Capital Gains Tax discrepancy between Capital Gains Tax and Income Tax which is a sort of standing invitation for people to be taxed lower for their capital gains rather than on their income. And I think there is more we can do with other countries internationally and I think there are areas of corporate tax avoidance that we need to look at as well and it’s something that I know that the Treasury and Revenue and Customs are working on and we will obviously in future Budgets make further announcements on precisely that.

Matt Ball:

Okey-doke. In a moment we’ll take a couple of questions from the audience. Just one here: David Cameron’s away this week, you’re acting Prime Minister, what are you going to be doing this week?

Nick Clegg:

I’m not acting Prime Minister. The amount of newsprint that has been devoted to what I think is a pretty straightforward thing which is, I went on holiday for a couple of weeks, I’m the Deputy Prime Minister. The Prime Minister is now taking a well-deserved break. It’s a pretty straightforward arrangement. The Prime Minister is the Prime Minister, he continues to be the Prime Minister, he’s in charge. I mean, if you’re the manager of a football team and you go on holiday for a couple of weeks, you’re suddenly not the manager of the football team? But obviously, I’m holding the fort for a couple of weeks, and doing it in the spirit of partnership which of course is at the heart of this coalition Government. He’s the Prime Minister, from one party, I’m the Deputy Prime Minister from another party and we govern together in partnership.

Matt Ball:

Okay, a few months ago could you have imagined yourself in this position?

Nick Clegg:

No. [Laughter]

Matt Ball:

Fair enough! Short and sweet. Okay.

Nick Clegg:

Briefer than before.

Matt Ball:

Yes, alright, while this isn’t a press conference we will just take a couple of questions if anyone in the audience has one before we move back to questions from users on the internet and so on. Ok, there’s a gentleman at the front.

Question:

Hello. I read in the newspaper over the weekend that the annual salary you need to be earning in order to even think about buying a property in London is £50,000. That’s clearly more than most people earn. That’s certainly more than I earn. As a result there’s a whole generation of people for whom the prospect of home ownership is a very distant dream. My question is how do you think this situation has arisen, does it matter, and if it does matter, what can we do about it?

Nick Clegg:

It matters hugely. I really think it matters hugely. I think housing and the lack of affordable housing is one of the biggest long-term problems that we face as a country if we are going to give young people now the opportunity to build the kind of life and build the kind of families and build the kind of communities they want. And it’s just heartbreaking, it’s honestly heartbreaking. I find this as a constituency MP in Sheffield, when you meet people who are starting out in life, on a first job, couples getting together, they’re thinking of starting a family and they’ve just got absolutely no idea how they are going to find a home which they can call their own.

We’ll be making further announcements in future but there are a number of things that you can try and do about this. Firstly, and perhaps most importantly, it sounds quite techy but it’s quite important, one of the things that has gone wrong for so long is that housing policy was incredibly centralised, like so much other policy [party political content] over the last decade or so. So councils or local authorities neither had much power to do anything about housing. So, for instance, they would have no control over how the money was used for receipts on the sale of council housing. They had very little freedom to change regional planning guidance that was handed down from on high. So one of the things that we are doing is dramatically decentralising the planning process, just making it much, much easier for local communities to decide for themselves where they want new homes, what kind of new homes they want and what’s the balance between affordable social homes and private homes as well.

I think we need to look, as some of the articles over the weekend rightly pointed out, at the rules in the private rented sector. We have fewer people renting homes in this country than is the case in many other European countries. We need to ask ourselves why that is. We need to ask ourselves why some people in the private rented sector often feel that they’re victims to sharp practice. So I think more freedom, particularly in the long term more financial freedom for local communities and local authorities, is an absolute key catalyst to getting the housing system freed up and making sure that people can rent in a fair and open way on the open market.

Matt Ball:

Okay thank you. We’ll take one more from the audience. The man at the back. Yes you, with the zip-up jacket.

Question:

Hi Nick. You’re going to… the triple guarantee on pensions means pensions will rise by the highest of inflation, wages or by a set amount otherwise. Which is wonderful, but how is that fair on the taxpayer if every single year more of the money is going to pensioners who aren’t contributing. And if you think they’re underpaid, would it not make more sense to give them a large rise in pension now and then lock it in so that it didn’t become an unsustainable burden on the rest of the taxpayers, which it could do easily in the next… when you work it up.

Nick Clegg:

I’m not quite sure to be honest if the suggestion you’re making of a huge step change now in the pension is in any way more financially sensible than what we’re doing which is just basically providing a guarantee that there will be decency for people on their pensions and that the earnings link which, as you know, was broken in the 80s and which all political parties have for years and years and years and years talked about restoring it is now finally going to be restored by us from April next year.

I think the idea of just uprating the pension by earnings or by inflation or by 2.5 per cent whatever is higher, is, I don’t think it’s excessive, I think morally it’s absolutely the right thing to do. I think pensioner poverty is a real issue. I think people deserve a sense of decency and dignity when they retire and I don’t agree actually with this, what I think might be an assumption, I’m not sure if this is what you’re saying, this is somehow kind of taking money away from other generations. This is giving a reward to people who have worked all their lives and have paid into the common pot.

Question:

[Indistinct] amount rising every single year regardless. Whereas I agree that the basic state pension is a pittance for many people. It’s just simply that the situation where it’s rising due to the nature of compound interest and compound rises will increasingly eat into the rest of the tax take.

Nick Clegg:

Well, you could argue that at the moment of course that it’s almost the reverse problem, because inflation is low, because earnings are rising very slowly, you could then argue about the 2.5 per cent figure. Is that a decent enough automatic uprate? I think it’s the right balance. I think it gives an absolute guarantee that it’s going to go up and in most circumstances, it’s going to go up steadily and incrementally, not wild gyrations in the pension and it just gives people at that time of their life where they need the greatest sense of security that they’ve got that security, that they’re going to be looked after.

Matt Ball:

Okay, thank you. Well from pensions to VAT. We have questions from a number of people all asking about this VAT increase that’s coming in, feeling that that’s really going to hit poorer people harder than anyone else.

Nick Clegg:

Well, I guess the question about this VAT increase is do I welcome, does anybody welcome an increase in VAT? Of course not. But just a couple of words to try and put some perspective on this. Firstly, do remember we’re not touching in any way the zero-rated products which makes sure that particularly for things that people absolutely need and that people on low incomes spend a considerable amount of money on, that is not changing at all. The zero-rating thing stays entirely the same.

The other question you have to ask yourself is, if you’re not going to increase VAT, and I can assure you in lengthy, lengthy meetings we looked at so many different ways of trying to avoid this or doing something different, if you don’t do something like VAT which raises from the increase about £13 billion, you’ve got to ask yourself, where are you going to take £13 billion away from? What else are you going to do? What is the alternative? [Party political content]

But you can’t duck some of these decisions forever and if you know that you’re going to have to take some difficult decisions to start filling the black hole in our public finances, I think it is just more straightforward to start doing it earlier rather than later. It doesn’t mean you do everything at once and I think some of the things that have gone wrong in the public debate, by the way, about cuts is that people imagine there’s this great big sort of sword, this Sword of Damacles hanging over our necks and it’s going to come crashing down next Tuesday and there are going to be cuts everywhere from one moment to the next.

It’s not. It’s a five-year plan. The Budget we produced and I think it’s one of the things that maybe we didn’t communicate enough was a very different Budget to previous Budgets, because if wasn’t a Budget for six months, it wasn’t a Budget for a year, it was a Budget for a Parliament, which included, yes, this VAT move at the beginning and it’s not something we relished. Far from it. It’s not a comfortable decision to have to take at all. But I think if you put it in the context of all the other things we’re going to do, we’re trying to make this package as fair as we can and we’re trying to make sure that we’re not, not hitting frontline public services harder than would have to be the case if you don’t do something like VAT.

Matt Ball:

So, one area that people have been raising, particularly on email, spending less might be on defence, particularly on Trident, for example, amongst other things. What’s your view on that?

Nick Clegg:

My views on Trident are well known and I can’t try to hide them now I’ve gone into a coalition Government. I think there’s huge pressure on the defence budget – that much is obvious – as there is on all budgets. It’s going to be an extraordinarily difficult thing for all the armed services to get this right because of the massive amounts that are involved in these huge procurement contracts that invariably seem to go over time and over budget. I think the priority within the defence budget should be absolutely to make sure that our brave troops, our brave servicemen and servicewomen, particularly now on the frontline in Afghanistan, have what they need.

I think we need to constantly ask ourselves what kind of challenges are we going to face, what kind of wars are we going to face, what kind of conflicts are we going to have to confront in the future? My own view is that the kind of technology and hardware that we acquired as a country in the past in an era of Cold War conflict; the world has changed and is changing very fast and I think that needs to be reflected in the kinds of things that we spend money on.

Not to mention the fact that of course it’s going to be difficult for someone who, I don’t know, is going to receive less housing benefit because of the changes that we are introducing to understand why at the same time we should spend huge, huge, huge amounts of money in a hurry on replacing Trident in full. But all of these things are still being discussed and all of them will become clear in the Comprehensive Spending Round in October.

Matt Ball:

Okey-doke. And Corporal Andrew Norton-Firth wants to know will we be withdrawing from Afghanistan in the near future?

Nick Clegg:

Well we will be out in a combat role by 2015. That’s what the Prime Minister, that’s what this Government has made absolutely clear. But I think the key thing is how we…what’s Afghanistan going to look like when we leave? I don’t want our troops to come back, given all the sacrifice that they’ve made, from this very, very difficult job they’re doing in Aghanistan, feeling that somehow they haven’t done the job we’ve asked them to do. I want them to come back, like I’m sure everybody does, first as soon as possible, I don’t want them to stay there for a minute – a millisecond – longer than they need to. But I want them also to come back with their heads held high knowing they’ve done the job as best as they can.

I don’t think we’re going to leave – the international community that is, the international coalition – we don’t want to leave Afghanistan a sort of perfectly formed liberal democracy, small ‘l’ small ‘d’ of course. What we hope for, of course, is that Afghanistan will be stable and so won’t serve as a place where terrorist organisations, Al Qaida and others, can launch attacks on us. It’s driven primarily by the decision that we all took as an international community when we went into Afghanistan, that it was necessary in order to protect our own security. And that should remain the acid test about deciding whether Afghanistan is stable enough for us to leave.

Matt Ball:

Some questions about the NHS, as there always are I guess. This question about dentists leaving the NHS, it’s very hard for people to find an NHS dentist these days. Are we going to see any changes there?

Nick Clegg:

Well I think we all know that the way in which the NHS contract for dentists has worked has not worked very well in the past. I met countless dentists who say they used to get this quota, if you like, for NHS work and if the quota ran out before the end of the accounting year they suddenly couldn’t do anymore NHS work. Now there have been a number of changes to that but we’re absolutely determined as a Government to make sure that we can do whatever we can – remember in an NHS budget which we are protecting from some of the more difficult decisions which are having to be applied to other budgets – to make sure that taxpayers and people who need access to NHS dentistry get it.

Matt Ball:

Okay, another question came in about the rumoured end of mixed sex wards. Is that on the agenda?

Nick Clegg:

Yes absolutely. I think we want to see the end of mixed sex wards. Everyone knows this has got to end. It’s really difficult for people in wards where they feel that they don’t have the privacy they need, they find it uncomfortable just at a time when people are feeling very, very vulnerable, very kind of unsure about what’s happening to them. To also make them feel somehow that they’re not in a setting where they can feel comfortable, it’s just wrong and we have to change that and we are going to change it and Andrew Lansley will be making detailed announcements about that tomorrow.

Matt Ball:

We’ll take one question off the screen there and then we’ll have another one from the audience. Moving to the arts; the arts and Government advertising and so on are receiving cuts at the moment. What value has creativity got to Britain in 2010 asks Chris off Messenger?

Nick Clegg:

Well I think creativity is key to who we are as a country, as a community. I think one of the things that distinguishes us is this raucous, creative… [Notices a question on screen about biscuits] The nation wants to know what’s your favourite biscuit? [Laughter] Do you want me to go straight to that? Do you want me to interrupt the other…?

Matt Ball:

Let’s take the biscuit now and we’ll move back to creativity.

Nick Clegg:

Well if dunked, Hob Nobs, without a doubt. No, sorry, no, no, no, if dunked, Rich Tea. I got it wrong! God, major, major flaw.

Matt Ball:

So if they’re not dunked?

Nick Clegg:

If they’re not dunked, Hob Nobs.

Matt Ball:

Well I’m glad we’ve cleared that up.

Nick Clegg:

That’s the dunked/non-dunked distinction which I was very keen to maintain.

Matt Ball:

So back to the arts.

Nick Clegg:

There you go, that’s what it’s about being in charge for two weeks.

Matt Ball:

It’s all about biscuits. So back to the arts.

Nick Clegg:

Creativity is absolutely crucial, I think to our identity as a country. We’ve got one of the most vibrant creative industries anywhere in the world, whether its advertising services, or whether it’s television, whether it’s theatre, whether it’s film, whether it’s the visual arts. It’s an incredibly vibrant place to live when it comes to creativity. The question is how do you measure that? Do you measure that by the amount of subsidy provided by central Government? And I’m not trying to pretend that how much money goes from the Treasury to arts bodies is not important. It is incredibly important and for some arts bodies it’s an absolute lifeline.

But equally I don’t think there’s any direct link between how big the cheque is and how big the creativity is. I think there are much, much wider reasons that make us the very creative nation that we are. I think we are blessed with a language, an international language, the English language, which helps us enormously. We are blessed with a cultural heritage, a history, from our literature, our poetry, our own history which I think is incredibly nourishing to the creative industries too.

And what we’re trying to obviously do in this area, as in so many other areas, is try and make sure that where Government can’t carry on spending money we’re encouraging private philanthropy, private donations, using money from the National Lottery funds more effectively to make sure that money does continue to support those creative industries, doesn’t go into bureaucracy, or quangos which don’t necessarily work or don’t provide good value for money. That’s the balance we are trying to get right, and again we’ll have to publish those details in full in October in the Comprehensive Spending Round.

Matt Ball:

Thank you. So another area around cuts that’s creating some concern is this one off Messenger with Thomas asking about cuts to the police force. When we have crime and anti-social behaviour going on, is this the right thing to be doing?

Nick Clegg:

Well the key thing to do is to try and get police officers out on the beat in the first place. I mean if you actually analyse why lots and lots of communities feel that their communities aren’t being properly policed, it isn’t because of a lack of police, it’s because they spend all their time filling in forms. And I don’t know whether you’ve done it, but if you speak to individual police officers and you hear the amount of paperwork they need to get through every time they make any visit to any home, to any incident, to any kind of crime scene, it is quite mindboggling.

So I think what we need to do is, yes, be realistic – in policing as we have to in defence we’ve talked about, we talked about creativity, we talked about all sorts of other areas, that there is less money to go around – but we have to make sure that we redouble our efforts to make sure that the police and community support officers are out visibly policing our communities much more than they do at the present.

Matt Ball:

We’ll just take one more question from the audience. The gentleman here.

Question:

Hey Nick. Well, if we were to forward-wind to the end of the Parliamentary term and you were looking back, what would success look like to you?

Nick Clegg:

I think first and foremost that we’ve got through this economic mess and that I’d be able to look you in the eye and say, look, you may not have liked some of the decisions we had to take to straighten out the public finances but the economy is growing again, we’re not over-reliant on one sector like what’s happened over the last decade or so. [Party political content]

That we didn’t just let the housing market go [indistinct], which is one of the reasons why the economy has been so destabilised in Britain over the last few years. That we’ve got more balance growth across different regions – I’m up in the north east in Newcastle on Thursday talking about how new green industries can provide new jobs in other parts of the country such as the north east. Where young people can leave school and don’t have this terrible dark shadow of doubt and anxiety hanging over them which they do now because they don’t know how they are going to make their way forward. I think that would be the most important thing of all.

And if at the same time I can say to you: look, politics is different to what it was in the discredited times of the expenses scandals. You are, as I said earlier, more in charge. We are a greener nation. You’ve got greater freedom, you’ve got more privacy, we’ve rolled back some of these huge incursions into your privacy and into our civil liberties. We are a proud nation which is playing a leading role in the affairs of the world, in Europe and beyond. I think that would be a record of which I’d be very, very proud.

Stunned you that one, didn’t it? [Laughter]

Audience member:

And of course a limitless supply of Hob Nobs.

Nick Clegg:

And a limitless supply of undunked Hob Nobs.

Matt Ball:

We’ll see what we can do. So there’s this question off Twitter from End Water Poverty. You’re attending the summit in September, and it’s a crucial moment to highlight lagging issues such as sanitation. Where do we stand on this?

Nick Clegg:

Yes I’m, on behalf of the Government, attending the Millennium Development Goals summit in New York in the latter part of September. And as the question quite rightly says, there’s been this feeling that despite all the promises the international community made, despite all the promises from the rich country club, the G8, of more aid, of a greater emphasis on development a few years ago, there’s, quite understandably perhaps because of the recession, people have slightly looked closer to home, there’s been a lack of proper impetus in delivering these Millennium Development Goals.

And that’s why I’m very proud of the fact that this coalition government is being quite explicit – and some people have criticised us for this – and said “No, even in difficult times, we are going to honour our pledge to the rest of the world to deliver on our promises of properly funded development and aid programmes”. And some people say to me: “Oh well how can you justify spending money on meeting this 0.7 per cent of our national wealth being allocated to development when we’ve got so many problems at home?”

And what I say to people is it’s not as if it’s money going to another planet which has got nothing to do with us. The state of development in some of the poorest countries on this planet has a direct effect on the mass migration of people, on immigration. It has a direct effect on how resentful people feel about their own lot and whether they then actually get drawn into the web of extremism and become perhaps the terrorists of tomorrow. It has a direct effect on how they look after their own landscapes and their own environment. So it’s not just an act of naïve, expensive altruism, honouring our development pledges is in our own interest as well. And that’s why I think it’s quite right that we are honouring our pledges and why I’ll be very proud to beat the drum for further support for development aid programmes at the Millennium Development Goals summit.

Matt Ball:

Okay, thank you. Question here from Tony, bit concerned about culture back at home. Is conscription the answer?

Nick Clegg:

Is conscription the answer? I don’t think it is, no. I can’t see us going in that direction. I think though what might lie behind that question is, is there a need to try and give, particularly young people, a sense that they can do something for their own community, that they’ve got a route to put something back, that they’re not just simply hanging around in a clichéd street corner because there’s nothing to do and they’ve got no stake in their own community and their own society.

That I think is really, really important and I think some of the things we’ve announced about trying to get young people involved in community work and voluntary work is really, really crucial. It’s a small beginning but I think if teenagers, in particular, feel that they’ve got no stake, they’ve got no say, they’ve got no voice in their own community and their own society and I meet so many teenagers who feel so put upon and ignored and overlooked, I think it’s dangerous. I think we’re betraying their interests and we’re betraying the interests of the country as a whole and our own futures if we don’t do more to help them.

Matt Ball:

Okay, probably just a couple more to wrap up. We had a question earlier that I wanted to ask which is what is Alan Milburn’s role all about?

Nick Clegg:

Alan Milburn, and I’ve spoken to him this morning from his holiday location in Bali [laughter] as you do when you’re Deputy Prime Minister, and just because I think there’s been quite a lot of misunderstanding about this let me be absolutely clear: Alan Milburn is not joining the government. He is not even being an adviser to the government because John Prescott has got his ermine in a twist about all this and has called him a collaborator. That’s hyperbole if there ever was some. He’s not joining the Government.

What we’ve asked him to do, what I’ve asked him to do and Alan and I will publish our exchange of letters over the next day or two, is to act as an independent reviewer of how not only the government, but public bodies, universities, the NHS, everybody is doing to boost what I think is one of the most important things of all, which is social mobility. One of the main reasons I came into politics is it really, really gets to me that even though – even with our economic difficulties – we are a relatively affluent country, children, young children are pretty well condemned by the circumstances of their birth. And that basically just because of where they were born, or who their parents were or where they live, basically they’re going to have less chance living as long as they want to, getting the education they want and getting the jobs they want.

I think a liberal, open, opportunity society has got to be one where we remove barriers to social mobility so you can make of yourself and your life what you want to, not because you’re held back by the circumstances of your birth but because you’re held back by your wishes or you’re propelled forward by your aspirations. Nothing else. And Alan Milburn in Government and after he left the Government has done some brilliant work on that. So I thought it was right for me to write to him and say; “Look, I’m not going to ask you to join the Government but will you once a year publish an independent report – he can do it independently but we’re going to give him access to civil servants and officials – telling us and other people how we’re progressing on this long term goal.

This is a long term thing. This isn’t going to be sorted in a year. It isn’t even going to be sorted in a Parliament. It will take decades for us to become a fairer, socially mobile society. And he will then send that report not to me, not to a Government minister, but to Parliament, so Parliament then, I hope, will have an annual debate about how we can boost social mobility. And this is, if you like, my attempt, because I care about this so passionately, to make sure that from now on we never ever take our eye off the ball on this issue of trying to make Britain a more socially mobile society and that’s why I’ve asked Alan Milburn to do that.

Matt Ball:

Okay thank you. We’ll take one more question and we’ll take it from email where we received a lot of questions about immigration. John says what level do you think is acceptable for immigration and what is too much? And I think we’ll finish with that one.

Nick Clegg:

I don’t think there’s any magic number. I think it’s a combination of things. I think as the Government has published in our coalition agreement, that you put an upper limit on the overall number of people who come in from outside the European Union. But much more importantly than that, I think you’ve got to make sure that the immigration system has people’s confidence and has people’s trust and that they know that it works, and that they know that people who are coming in are coming for good reasons and that when they come here they can be properly settled and integrated into our communities, that the public services are there to support them and everybody else. I just think people want an immigration system which is fair and open and generous but is also tough where it needs to be, tough on numbers where we need to be tough on the numbers and tough at our borders.

And that’s why, by the way, not since I’ve come into Government but even when I was in opposition, I’ve always said I think we should make sure that we’ve got a dedicated border police force that can police who’s coming in and who’s coming out of this country. It’s not just an issue of numbers, it’s just making sure that the system, which has fallen into such chaos in recent years, just works, just administratively works from day-to-day. I think that would do more than anything else in restoring everybody’s trust in immigration, so that we can over time, hopefully, remove immigration as this highly vexed, emotive issue and we can be once again more balanced about how we talk about immigration and so that it just doesn’t become this very polemical issue which it has become.

Matt Ball:

Okay, thank you ever so much. I’d just to say thank you to everyone who submitted questions. I hope we raised one of yours. Thank you to our audience. But especially thank you very much to you.

Nick Clegg:

Thank you.