This is a rush transcript from "Your World With Neil Cavuto," February 26, 2010. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Well, you know the tea parties are set to go international now.
In less than 24 hours, my next guest will be hosting the first Tea Party in England, protesting out-of-control taxation. You know him quite well.
(BEGIN VIDEO CLIP)
DANIEL HANNAN, EUROPEAN PARLIAMENT CONSERVATIVE: You cannot carry on forever, squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit.
(CHEERING AND APPLAUSE)
HANNAN: You cannot spend your way out of recession or borrow your way out of debt.
And when you repeat in that wooden and perfunctory way that our situation is better than others, that we're well-placed to weather the storm, I have to tell you, you sound like a Brezhnev era apparatchik giving the party line. You know and we know, and you know that we know that it's nonsense.
(END VIDEO CLIP)
CAVUTO: Man, I always say he did that without a teleprompter, off the cuff. Why can't our leaders talk like that?
Anyway, member of the European Parliament Daniel Hannan joins me now from London.
Daniel, very good to have you.
HANNAN: Hi, Neil. Nice to be back.
CAVUTO: A Tea Party there? Well, since we started tea parties protesting you guys, I guess it's good you return the favor. So, where does this stand?
Well, we have got a bigger problem than you. Our debt is higher. Our taxes are rising faster. This government has raised an additional trillion — additional trillion — over and above what we would have raised in taxation if taxes had stayed at a previous level since they got in — in 1997.
So, we have got a great deal to protest about, that — as you say, I mean, this is England, and not the U.S. So, we are going to be drinking tea at our Tea Party tomorrow, rather than dumping it in the English Channel.
CAVUTO: But how much does it register in your country vs. our country, where it's become a huge populist movement, much bigger than that? I trivialize it just saying that. But, in your country, and among those who are leading these rallies, well, how would you explain the difference?
HANNAN: Well, you know, this is right at the beginning. This is the first interview I have given about it. And our inaugural meeting is going to be tomorrow.
But I was speaking to your Tea Party patriot people a few moments ago, and they told me that the thing began with a conference call of 22 people, and it had then grown into 1.2 million.
Now, I mean, I'm hoping to have more than 22 people there tomorrow, but it won't be anything like 1.2 million. The argument is the same, though, Neil. It's the same in Britain, the same in America, the same everywhere.
People want to keep more of their money. The way that we're going to get out of this mess, this debt crisis that the world is suffering from, is not by taxing more. It's by spending less.
CAVUTO: So, Gordon Brown, in the polls, seems to be in a great deal of trouble, and that he might not be long for that office.
Would a more conservative government heed these calls? Or are you even more even conservative than they? In other words, would you be calling for something that goes just across party lines to aggressive spending cuts and tax-cutting?
I mean, there is definitely going to be an immediate and tangible improvement of our fiscal situation following the election of a Conservative government. I don't think there is any doubt about that.
And, in fact, the hope of that is what has kept Britain from becoming Greece. It's what –- it's what has pacified the markets, because they can read the opinion polls, and they can see that we're likely to take over.
There is a debate about how much you cut taxes and how much you concentrate on closing the deficit. Now, my favorite recent U.S. president is Ronald Reagan. And I remember a brilliant moment when he was asked whether it was right to keep cutting taxes when the deficit was growing, and he gave that wonderful smile, and he said: "I'm not worried about the deficit. The deficit is big enough to look after itself."
And what he meant by that is, if he cut taxes, he would stimulate growth. There would be a higher receipt of revenue from income. And, sure enough, the deficit did look after itself, because more money came in.
In my country, Margaret Thatcher, at the same time, was doing something similar. So, we must not fall in to this trap of thinking that the only way to reduce the government debt is by raising taxes. The best possible stimulus for an economy is a tax cut.
CAVUTO: All right, we don't have a lot of time, Daniel, but there is a move in Europe now to do something to help out Greece. They are protesting in Greece some of the cutbacks that are being urged, the unions there very much opposed to anything.
What should be done? Just others in Germany have been saying, let them — let them ride. We're not helping them.
What do you think?
HANNAN: Well, what should be done is, Greece should return to the drachma, the oldest currency in the world, and it would then be able to have that short-term devaluation that would give it breathing space to restructure its — its finances. It would be pricing itself into the market.
HANNAN: The easy way of looking at this, Neil, is this. The Greek deficit is about the same as the British deficit. Ours is 12.6 percent of GDP. Theirs is 12.7 percent of GDP.
CAVUTO: All right.
HANNAN: Why is Britain not in the mess that Greece is in? Because, thank heaven, we kept the pound.
CAVUTO: Good point.
HANNAN: And that meant that we suffered...
HANNAN: ... the — the shock of the debt in our exchange rate, instead of suffering it...
CAVUTO: Good point.
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