Danny Alexander – 2012 Speech at the IFS

Below is the text of the speech made by the Chief Secretary of the Treasury, Danny Alexander, to the IFS on 23rd April 2012.

 

Good morning, it’s a pleasure to be here at the IFS.

When this coalition government came into office, Britain faced some of the most substantial fiscal challenges anywhere in the world.

We had the largest forecast budget deficit in the G20 – bigger than many of those European countries whose fiscal challenges are regularly in the news.

The gap between what we raised and what we spent was the greatest in our post-war history.

It’s because of this Government’s leadership that we have sheltered the UK economy from the worst of the storm that continues to affect our Eurozone neighbours.

Britain is contributing to the global rescue package, not seeking support from it.

It’s worth remembering that it’s almost two years since the first Greek bailout, the trigger for a crisis that rumbles on today.

In contrast, only two weeks ago, Standard & Poors reaffirmed the UK’s triple A rating with a stable outlook.

In S&P words “We believe that the UK Government maintains a strong commitment to implementing its fiscal mandate, and has the ability and willingness to respond rapidly to economic challenges.”

Fiscal discipline is not ideological.

It is core to good Government. And it necessary to deliver fairness too.

Be in no doubt, it is the poorest and most disadvantaged, not the wealthy, who are hit hardest when a country loses control of its public finances.

It is fair that we tackle our debts today so that we don’t burden our children tomorrow.

Ensuring that we can continue to provide high quality public services and support to those who need it the most.

And even as we take the tough decisions to tackle that debt, we are making sure that it’s not the poor and vulnerable who are forced to carry the burden, and that those who have the most contribute the most.

Secondly, fiscal discipline is the vital precondition of growth.

Our commitment to fiscal discipline and economic stability has helped secure record low market interest rates.

Rates that support households paying mortgages, and businesses securing loans, right across the UK.

It is that credibility that is the essential precondition for private sector investment, growth and job creation…

226,000 new private sector jobs in the last year

634,000 since we came into Government

Private sector growth built on a foundation of economic stability.

Our Budget went even further in that ambition.

Sticking to our plans on fiscal consolidation to safeguard our economic stability.

Driving through reforms to support the private sector enterprise and innovation that is critical to our recovery.

Reforms that include an extra one percent cut in corporation tax…reducing it to 22 per cent by 2014.

The lowest rate in the G7, the fourth lowest in the G20.

Cutting the ineffective top rate of tax…a rate that was higher than the likes of America, Germany, Italy and France – and replacing it with new measures that ask the wealthy to pay 5 times more than the cost of lowering the top rate.

Increasing the personal allowance – within a hairs breadth now of our £10,000 tax free goal – through the largest tax cut for a generation for the working people of this country.

Investing to provide ultra-fast broadband in ten super-connected cities, with plans to fund a second wave of cities.

And continuing to support the establishment of a new Pension Infrastructure Platform owned by pension funds to bring as much as £2bn of investment by early 2013.

Investment that is critical to renewing our nation’s infrastructure, and catalysing growth in key and established industries right across the UK.

Of course, the damaging legacy of the financial crisis, and the headwinds in the global economy, means the road to recovery is a long one.

The latest assessment of the scale of the damage done to our economy by the financial crisis shows that the damage is greater than was thought at the time.

According to the Office for Budget Responsibility, the part of our deficit that is structural was greater than previously thought.

The structural element of the deficit is the part that will not disappear as a consequence of economic growth – it requires policy choices, tax rises or spending cuts, to deal with it.

Put simply, our economy is now forecast to be 11% smaller than it would have been had the crisis not taken place.

For every £9 we thought we would have, we will only have £8. We simply can’t afford to go on spending and borrowing as a country as if we will still have the £9.

There were basically three options about how we could have reacted.

We could have done nothing- and put at risk our country’s economic credibility, seemingly as the official opposition continue to urge us to do.

Or we could cut more now.

But when you have set out detailed spending plans as we have done, credibility comes from implementing those plans, not tearing them up.

The credibility which we have secured means that we have not been forced by the markets to tear up our plans because of rising interest rates and economic instability – as some in Europe have been forced to do.

Instead, we set out plans for further spending reductions into the next parliament.

We have made clear that the total amount of public spending in this country will fall at the same annual pace as in this Parliament, for a further two years.

The OBR forecasts that at that point we will have successfully eliminated the structural current budget deficit as promised, and of course different political parties will quite properly have different ideas for the appropriate path thereafter.

But even as we galvanise our efforts to tackle the deficit, we are also concentrating our minds on the much longer term prospects for public spending.

As last year’s OBR Fiscal Sustainability Report said “There is considerable uncertainty surrounding the scale of the fiscal challenge that confronts future Governments, but the fact there is such a challenge is not in doubt”

In particular it says that “future Governments [are likely to have to undertake some additional fiscal tightening beyond the current parliament in order to] (have to) address the fiscal costs of an ageing population.”

Quite simply, the world is a different place to than it was two, ten or twenty years ago. These are pressures that have been building for many years.

The simple truth is that the choices we faced in the last Spending Review and the choices that will have to be made in the next Spending Review are inescapable.

If we want to continue to act fairly, improve social mobility, provide good public services,  provide capital investment that continues to grow, and educate a workforce that is able to drive this economy forward, we will need to work out where and how we save to make those things possible.

And we will need to respond so some of the huge challenges that governments in the past have mistakenly believed they could afford to duck.

That debate is a vital one for the country in the coming years.

But today I want to dwell in more detail on the progress we are making on the plan we have set out, and announce some further measures that reinforce our commitment to delivering on it.

In an environment of economic uncertainty, with ongoing instability in the Eurozone, the UK’s large deficit remains a crucial economic vulnerability.

It remains a clear and present danger to stability.

Carrying on as we were means accepting that we spend even more on debt interest as a share of public spending.

Leaving things as they are for longer would mean higher debt, higher interest payments, and that means even bigger cuts in the long run.

Instead, we argue that we have to cut our cloth today to reflect our means, and show that we can be trusted to restore our public finances to health.

Building that trust has two elements: figures that people believe, and a plan that is being delivered.

The significance of the creation of the Office for Budget Responsibility is often underestimated in the UK debate.

Historically in the UK, politicians had been tempted to adjust their economic forecasts to suit their policies.

So when last autumn the OBR chose to substantially change its assessment of the damage done by the crisis, and so of the spare capacity in our economy, the government could not sweep this uncomfortable judgement under the carpet.

Instead, as I explained earlier, policy had to respond.

This is a structural shift that will shape Government for decades to come.

Never again will politicians be able to fiddle their forecasts in the face of the uncomfortable truth…

And never again will Government’s be able to spend the financial mirages these forecasts create.

It is also an example of the UK leading the way.

The existence of a strong, effective institutional framework is a significant strength for the UK compared to other countries, and the creation of the OBR has further enhanced that strength.

Many other countries are now seeking to emulate this change as they seek to rebuild their fiscal credibility

For instance, the European Commission has now proposed that Euro area Member States put in place an independent fiscal council to monitor the implementation of national fiscal rules.

At home, we set out in the 2010 Emergency Budget, the standard by which we would measure our success: the fiscal mandate.

Achieving a cyclically adjusted current balance by the end of the rolling five year forecast period.

And for debt to be falling as a share of GDP by the end of this Parliament.

As well as some tax increases, we set out a fixed envelope for public spending for the remaining four years of this Parliament. And in the spending review in 2010, we set out budget reductions by department.

In particular we focused on reducing welfare costs and wasteful spending, for instance…

Saving £18bn by 2014-15 through welfare and public sector pension reforms

£6bn through efficiency savings in 2010-11, and another £6bn by 2014-15 by cutting Whitehall by a third

£3.3bn through a two year freeze in public sector pay

And £1.5bn a year by 2014-15 by abolishing the Regional Development Agencies.

In all, Departmental budgets other than health and overseas aid were cut by 19 per cent.

These were tough decisions to make, but within these overall reductions, we were able to make some important positive choices for the country to promote growth, fairness and social mobility:

Protecting health and schools spending in real terms

Investing more in the life chances of disadvantaged children, and shifting education spending towards the early years

Investing more in transport infrastructure than our predecessors had managed in the previous 4 years

Reforming the welfare system

Getting defence spending under control

And we are already making good progress.

According to the OBR, in 2011-12, departments exceeded budget reductions, forecasting around £6bn of lower spending than planned.

By the end of 2011-12, almost 30 per cent of the spending reductions planned for the 2010 Spending Review period will have been achieved.

And the deficit in the cyclically adjusted primary balance, a key measure of fiscal sustainability, has been halved from its peak in the last two years, going from 7 per cent to 3½ per cent, and is forecast to approach zero by 2014-15.

The cyclically adjusted primary balance is a strong measure of the structural consolidation we need to deliver debt sustainability.

It excludes debt interest payments and the economic cycle on the deficit, and is widely used by international organisations to illustrate the underlying fiscal position.

It shows that we are on the right path.

But with 3 years to go, very difficult decisions remain to be implemented.

And while many departments have made significant changes, we need to do more to change the Whitehall spending culture for good.

We need to ensure that old habits that led to waste and unnecessary spending cannot re-emerge, and that new focus on getting better for less is permanently ingrained.

So today, I am setting some new and tougher rules around spending that the Treasury will be enforcing from this year on.

These are rules have been drawn up with finance directors from across Whitehall, and are designed to fundamentally change and improve financial management across all organisations spending public money.

Rules that demonstrate the collective determination of government to ensure that never again will our nation’s finances be allowed to get into such a mess.

From arms-length bodies, to Whitehall departments, to devolved administrations…we must all work together to play our part in improving financial performance.

There are three core elements to this more rigorous approach:

Improving our monitoring of spending…

Improving our management of spending…

And improving our oversight and scrutiny of spending.

Let me take monitoring first.

Delegated responsibility for spending cannot be an excuse to hide information, close the books, or weaken financial management.

For too long financial management in Government has been stifled by poor information sharing and poor incentives.

On the one hand, this Government has made huge strides to make more information available to the public as part of our drive for transparency.

But that same ambition has not been matched within our own walls.

That has to change.

From now on, all departments must monitor and share spending information with the Treasury on a monthly basis.

And that data must be consistent, allowing us to build a shared understanding of where the risks lie and how they are managed, as and when they arise.

Not months or years down the line.

Not when we’re trapped in the wrong track.

But in real time.

And improved monitoring will help change incentives on financial management.

The old system of financial management implicitly rewarded those who didn’t manage their finances.

In the end, when departments faced policy problems or where difficulties have emerged, they felt they could simply turn to the contingency reserve to bail them out.

We have to change those incentives.

That’s why in the spending review, we deliberately kept the reserve small in order to get the most money out to departments.

It means that departments have to be able to deal with problems that arise from within their own budgets.

Many departments already operate a small ‘unallocated provision’ in their annual budgets, to meet smaller pressures that arise.

And, under the new rules I have asked all departments to identify around 5% of their resource budget that could be re-prioritised if new pressures emerge or new policies have to be funded, so there is a shared understanding of how it could be paid for.

To be clear, no departmental budget is being changed as a result of this exercise. It is simply about good financial management, of the sort practised by families and businesses across this country.

And in future I will take performance in financial management into account when deciding whether to grant claims on the reserve.

That means punishing poor management, but it also means rewarding those with a record of good financial management with greater freedom over their budgets.

But that freedom comes with higher scrutiny. Where the Treasury has concerns that Accounting Officers may be falling short of fulfilling their responsibilities for managing public money, I will write to the Secretaries of State and the Head of the Civil Service to set our those concerns.

These new controls are not just a tweak to the Whitehall machine.

They are another signal of our unwavering determination to deliver the fiscal consolidation we promised.

It is this focus on delivery that is the cornerstone of our country’s credibility. Credibility, let us not forget, which is delivering the record low interest rates that are benefitting millions of families across the UK.

We have taken some very difficult decisions to restore this country’s financial credibility and economic prosperity.

The delivery of those commitments will be enhanced by the measures I have announced here today. And it will require further difficult decisions to be taken as this Parliament progresses.

Because we literally cannot afford not to change the way we do things.

Thank you.

Danny Alexander – 2011 Speech to the Centre Forum

Below is the text of the speech made by the Chief Secretary to the Treasury, Danny Alexander, at the Centre Forum in Guildhall on 10th May 2011.

 

Today, what I want to focus on is the role the financial sector has to play in our economy.

Now, as a topic, this is not something new.

Much of the economic and political debate of recent years has revolved around this issue.

But instead of discussing the importance of tighter regulation or banking reform, what I want to concentrate on is the industry’s role in restoring trust in the financial system and how your actions can help with the rebalancing of our economy, and its success in the future.

And there are a number of reasons to look to the future with confidence.

Of course the recovery is, and will be, choppy.

But, the manufacturing sector has experienced incredibly strong growth in the last year.

Our exports are gathering pace.

Employment is increasing.

Investment is picking up.

But the fact that we can now look ahead with some confidence is only because of difficult decisions we’ve already had to take.

Decisions that have brought about economic stability.

Secured our international credit rating.

And set in place a credible plan to deal with our record borrowing… a plan that has seen us avoid the sovereign debt issues that have engulfed other countries.

These are tough decisions. It was the need to deliver these decisions that brought the Coalition together. Our commitment to that shared plan is totally unwavering. It is our core task – and we will see it through.

At the Budget, we set out our long-term strategy for growth, with four key ambitions at its heart:

– to create the most competitive tax system in the G20;

– make the UK one of the best places in Europe to start, finance and grow a business;

– encourage investment and exports as a route to a more balanced economy; and

– create a more educated workforce that is the most flexible in Europe.

We also took the first steps towards making these ambitions a reality.

With cuts to corporation tax – to encourage greater enterprise.

Support for SME finance – to increase business investment.

Steps to ease burdens on business to create additional jobs.

And measures to rebalance our economy – and drive higher exports.

But as a Government, we can only do so much.

It’s the private sector who will inevitably lead the recovery.

And having a strong and stable financial sector is an important part of this story.

We need a financial sector that supports consumers and businesses up and down the country.

And is a source of wealth and prosperity in its own right – not just in the Square Mile, or in Canary Wharf, but in every town and city in the country.

And I feel there are three things that we have to consider if we’re to realise this ambition.

Reconnect with the rest of the economy

The first of these is about reconnecting the financial sector with the rest of the economy.

To strengthen the ties that exist between financial institutions, investors, and their customers.

And to demonstrate your commitment to the wider business world by providing:

– the lending that viable businesses need to expand and invest;

– the advice and expertise that firms need to succeed; and

– the capital that will help stimulate enterprise across the UK.

This is vital.

Because if our financial sector doesn’t meet these tests, then we’ll have an economy that struggles to respond to today’s challenges; a country that doesn’t fulfil its potential; and a recovery that fails to gather momentum.

If we take access to finance, for instance.

This remains a key concern for many businesses in the UK.

Yet I also know that the problem isn’t quite as straightforward as some commentators like to think.

But we also have to look at the reality of the situation, and why lending conditions have deteriorated since the crisis.

That the past few years have certainly thrown up some particularly large challenges for the finance industry.

Institutions up and down the country have, quite understandably, had to retrench; weather the financial storm; and look to rebuild their balance sheets.

And this has not been a pain free process.

On the one hand, you’ve had people saying that we should never return to the days when cheap credit was freely available… and irresponsible lending conditions undermined overall economic stability – this is absolutely right.

But on the other, businesses need affordable credit to help support growth, employment, and additional investment.

So there’s a very difficult balance to strike.

As a Government, we’ve been working with the financial sector to get credit flowing again.

Merlin

The Merlin Agreement being the most obvious example.

Among other things, this agreement reached with the UK’s largest banks should see lending of £190 billion to creditworthy businesses for this year… of which £76 billion has been earmarked specifically for small businesses.

This would mean an overall increase of almost 15 per cent on last year’s lending figures to SMEs.

But having made this commitment, it’s vital that they see it through.

This month we will get the first update on progress in meeting this target.

My message to the banks is simple – this money needs to reach good businesses, no ifs, no buts, no excuses.

As the Chancellor said in February, if it doesn’t, we reserve the right to take further action.

Not just for the sake of the wider economy, but also for the banking sector itself.

People want to see progress.

To demonstrate the value that financial services have to add.

To show everyone that the sector takes its responsibilities seriously.

And improve the links between our banks and our businesses

They expect it.

And we expect it.

Which brings me to my second point for this morning – the need for the financial sector to improve the relationships it has with its customers.

Relationship with customers

Because if we’re to improve sustainability and resilience across the economy, we need to safeguard the interests of savers and borrowers and taxpayers.

Now despite the work of the FSA, I don’t believe that customers always get a fair deal from financial services.

Personal banking in many ways has become, well, less personal.

We’re committed to changing this.

That’s why we’re setting up the new Financial Conduct Authority – or FCA for short.

The FCA will look at the conduct of all authorised firms – whether they’re prudentially regulated or not. It will be, in effect, a champion for the consumer, with the the primary objective of “ensuring confidence in financial services”.

And this will be to the benefit of everyone.

Consumers will obviously benefit from the added protection that this will bring.

But also financial institutions themselves will reap the rewards.

Because if customers have effective and appropriate protection, they’ll also have more trust in the financial sector as a whole – and take advantage of more of the services you provide.

But the FCA alone is not enough.

With the industry’s support we’re also increasing consumer confidence by making financial markets more transparent.

So that people can shop around for better rates on their ISAs and have access to financial advice through the Annual Financial Health-Check.

This will give your customers the confidence to invest in a wider range of products, and this will feed through to the rest of the economy.

Because a customer who buys a corporate bond is also providing the finance needed to support innovation.

Money in a cash ISA supports lending to businesses and families.

While money in an equity ISA or pension can help support private investment.

Working in the interests of customers is working in the interests of the wider economy.

The two are mutually reinforcing.

And we are making other regulatory changes too, to learn the lessons of the financial crisis.

The Independent Commission on Banking’s work is crucial to protecting taxpayers. Its interim report set the right direction: we look forward to the final report and to action on it.

Economic rebalancing

Which brings me to the final point of today – how the financial sector can help support the much needed rebalancing of our economy.

As a Government, we want to see growth and prosperity spread across all regions of the UK.

We want to help the economy develop new areas of expertise.

But we also need to preserve our existing strengths – including in financial services.

Rebalancing is not about trading the success of one sector for another.

It is about extending our country’s portfolio.

Spreading our success more evenly.

And supporting the world class industries we already have, as well as the new ones that we’re developing.

If we go back to the roots of the City, for example, it flourished because it supported commerce through insurance and trade finance… it found capital to invest in new enterprise and it developed new and innovative ideas that provided security and certainty for businesses.

It was this that proved the foundation of your success.

And it is through insurance, investment and lending that you’ll help support our transition to a more diverse economy.

One that’s built on growing businesses, not growing deficits.

Increased exports, not increased debts.

And green energy, green infrastructure and green technologies.

This is a huge opportunity for the financial sector.

To help support our move towards a better balanced economy.

Where growth is more sustainable.

More broad-based.

And more evenly spread across the many places of the UK.

Let me conclude by saying,

As a Government, we’ve provided the security and stability that the private sector so badly needed.

With a credible plan to deal with our country’s debts.

And an ambitious plan for growth.

But as a Government, we can’t do this alone.

We need a strong and stable financial sector to support the recovery.

One that provides the lending essential for investment.

Restores trust and confidence in British business.

And helps rebalance our economy in favour more industries, more exports, and more evenly distributed success.

That is our ambition.

And we will work with you to make it a reality.

Thank you.

Danny Alexander – 2011 Liberal Democrat Conference

Below is the text of the speech made by the Chief Secretary to the Treasury, Danny Alexander, at the 2011 Liberal Democrat Party conference.

 

I’d like to tell you about a man who’s been a great source of inspiration and guidance to me behind the scenes over the last year.

Gordon.

Although outwardly dour, his finely tuned political antennae and no nonsense style make him the perfect sounding board.

He’s not flash – he’s just Gordon. Gordon Birtwistle, the Liberal Democrat MP for Burnley. One of the most talented and tenacious of our 2010 intake. I’m privileged he agreed to be my PPS.

Alistair Darling wasn’t quite so keen on his Gordon.

His Gordon racked up a record deficit fuelled by irresponsible and unsustainable spending.

His Gordon denied any responsibility for the economic woes caused by his own policies.

His Gordon “unleashed the forces of hell” simply for sharing his views on the severity of the economic crisis.

Who was feeding Gordon Brown such advice? Was it Mandy? Or McBride? I think it’s pretty obvious – it was all Balls.

Unlike Labour, our party has never shied away from telling difficult truths on the economy:

Vince Cable led the way in warning of the dangers that were building.

And we made a historic decision last Spring. When we signed up to coalition government, we knew our country’s economic stability depended on it.

Returning our country to lasting prosperity is the founding purpose of this Government – the overwhelming national interest that motivated two very different political parties to take responsibility together for a full 5 years.

We resolved to act in the national interest and put our country first. That is what we’re doing.

“In government, on your side” doesn’t mean telling people there’s an easy answer to the horrendous problems Labour left.

It means telling it straight.

To get things right for the long term, we must stick to our guns now.

And we shouldn’t forget the impact of our unity and our resolve.

Concern about both sovereign debt and economic growth is at the heart of the current market turbulence.

Turbulence fuelled by uncertainty about the ability of political leaders across the globe to take the decisive action their countries need.

Since we came into office, our coalition Government has taken the difficult, and sometimes unpopular decisions necessary to fix our economy.

This decisive action has made an immediate impact.

Interest rates have stayed low, keeping workers in their jobs and families in their homes.

Fellow Liberal Democrats, we played a decisive role in securing our country’s financial credibility. This should make us proud.

We have built a strong shelter, but the storm is still raging.

Elsewhere in Europe, the struggle to establish credible deficit reduction plans goes on. In the US, political deadlock brought a historic downgrade of the country’s credit rating.

Yet despite all the evidence, the party that put us in this hole just want to keep digging.

Labour say our motivation is dogmatic. They’re wrong. It’s practical.

Financial discipline is necessary for effective government. It would be completely wrong to leave the bills for past mistakes to be paid for by our children. The economic case is indisputable – that’s what so many of you have done in local government, and that’s what we must continue to do in central government. We must stick to our plans and we will.

We’ll be straight with people: about how long this will take; how hard it will be, and what we will do to get it right.

A huge deficit, an unbalanced economy, our trading partners in real difficultly.

These are very big problems. Solving them will take years, and every one of us has a role to play. To support growth, to help families under pressure.

As Liberal Democrats, our judgements about what needs to be done should be driven by the liberal economy we want to build.

A liberal economy shaped by free and open competition,

A liberal economy built on long-term investment, not debt and waste.

A liberal economy where growth is shared across the country

A liberal economy where taxation delivers fairness.

Sustainable, balanced, competitive, fair. To get the kind of growth we want, we must break down the vested interests – the enemies of growth that stand in the way of future prosperity.

We are prepared to take them on. We will name and shame those standing in the way of that central national purpose.

Free trade has been a liberal rallying call for centuries. Offering gains to countries around the world and especially for Britain, with our quality exports and trading history.

Today our trade policy is being brilliantly led by Ed Davey.

The inception of the European single market a quarter of a century ago helped create hundreds of thousands of new jobs.

Astonishingly, the single market is not yet complete. Huge areas of the European economy are still not fully open to British firms – especially in the services and energy sectors

Completing this work will support growth, jobs and competitiveness not just in Britain but across the whole of Europe.

There’s an opportunity for Britain to lead this agenda right now – as we did so successfully in the 1980s.

As the Eurozone seeks to deepen its integration – and we need it to do so more quickly – they will need our support. And they will get it.

Sadly, eurosceptics on left and right still fail to understand Winston Churchill’s insight that sharing sovereignty strengthens our influence and isolation weakens us. Scottish Nationalists make the same mistake.

We’ll never let the anti-European isolationists or nationalists frustrate our national interest.

They are enemies of growth.

Fortunately, coalition ministers are united in pursuing a policy of practical, pragmatic engagement in the EU.

Nick Clegg and I are working with David Cameron and George Osborne to make deepening, strengthening, and deregulating the single market a central aim of Britain’s European policy – because it will bring jobs and growth.

Too many businesses are being held back by congested roads, slow railways, inadequate broadband.

At the spending review last year, we looked at infrastructure spending in the round, picking only the most economically valuable projects from across government for funding.

And as a result, we’re investing more in the transport network over these 4 years than Labour managed in the last 4. The redevelopment of New Street Station here in Birmingham, the Mersey gateway bridge, Crossrail in London, and a national high speed rail network.

And we have prioritised the money to invest to make sure that high speed broadband gets to every part of the country.

Now more than ever, we need to get on with this work.

But there’s a major vested interest in the way. Bureaucracy, rules and red tape that mean it takes years to get things done. A planning system that can take more than a decade to allow even modest developments to go forward.

It has to change. And under the coalition it will.

I know there are concerns about our planning reforms. So it’s important to understand what we’re really doing. The presumption of sustainable development is right because it establishes the right balance.

Local communities in the driving seat, local protections in place and yes more local homes and local jobs.

So while it is politically contentious – we will reform planning.

As Chief Secretary, I set the rules that control public spending. Mostly, that’s about making sure we stick within our budget, which I’m sure you can imagine doesn’t always make me very popular.

On infrastructure, I’m pressing departments to make sure they deliver their plans on schedule.

And we need to do more. More to help support jobs and growth in our communities.

Because growth can’t be imposed from the centre – it must be driven by businesses, communities and local authorities.

They are critical to delivering the jobs and homes that our communities need.

So I’d like to tell you about the next steps in our Plan for Growth.

To support local growth, I can today announce my decision to reduce the interest rate offered to local authorities by the Public Works Loan Board to finance the £13bn of debt needed to leave the Housing Revenue Account subsidy system.

I’ve listened to local authority concerns that this is a one-off transaction within the public sector and should be financed as such.

Let me put it simply – an extra £100m every year that councils can then reinvest in housing.

And I want to take a further step to support local growth.

Across the country, projects are being held back by tough market conditions, difficult cash flow and a lack of confidence. Projects where people could be working but aren’t.

That is why I’m announcing today the creation of a new Growing Places Fund.

Half a billion pounds that will kick start developments that are currently stalled.

Half a billion pounds that will deliver key infrastructure and create jobs.

Putting local areas in the driving seat, to boost the local economy and get people into work.

Providing flexibility to local areas to recycle funding for other projects once development is completed.

In South Gloucestershire, £300 million of private investment, 3,000 jobs and 2,200 homes is being unlocked with £6 million of public money to build a link road. Just think what we will be able to do with £500 million.

Unlocking local growth by freeing businesses to grow, creating jobs, and freeing councils to build housing. Liberal Democrats in government, on your side.

We’re on your side when it comes to the banks too.

Delivering on our promise to protect the taxpayer from the cost of future bailouts. Never again should bankers go to the casino with their stakes guaranteed by the rest of us.

That’s why we commissioned the Vickers report

It’s why we welcomed his recommendations on ring-fencing.

It’s why we welcomed his call to extend competition in the banking sector.

And it’s why we will legislate to protect future taxpayers in this Parliament.

Of course, our main tool to help low and middle income families with the pressures they are facing is the tax system.

Thanks to Liberal Democrats there is genuine progress.

And I’m not just talking about fuel duty cuts for our remotest communities, though I expect we will have that in place next year.

This year, the average worker is paying £200 less income tax than last year. Next year, the bill will come down by another £120. By the end of this Parliament, most working people will be paying £700 less income tax a year.

Conference, an income tax threshold of £10,000 was the first priority in our manifesto. Now it’s the first tax priority of the government. We should be proud that in government our ideas are making a real difference to every working family in Britain.

But we shouldn’t rest on our laurels. In the next Parliament, I want us to go further; our aspiration should be that someone working full time on the minimum wage should pay no income tax at all.

An income tax threshold of £12,500 – think what that would do to work incentives, think what it would mean for basic fairness.

Let’s put that on the front page of our next manifesto.

Some people have argued that we should change our tax priorities and focus our limited resources on cutting taxes for the wealthiest instead.

At a time of austerity, this argument simply beggars belief. If we are all in this together, those with the broadest shoulders must bear the greatest burden.

Fair taxation of the wealthiest is key to our deficit reduction plan. Of course, if a better way can be found to raise the money from this group, I will be willing to consider it.

But right now we must focus relentlessly on those who are struggling.

And we need to make sure tax owed is tax paid.

Last year, I announced a package of investment to strengthen our fight against tax evasion, as well as tax avoidance.

Let me tell you how we’re getting on.

This year, an additional 2,250 HMRC staff will move into new anti-evasion and avoidance jobs.

This month, over 1,000 of these jobs are being advertised.

And already this package is bearing fruit.

I promised you we’d collect an extra £7bn a year by the end of the Parliament;

And I can tell you we’re already on track to raise £2bn this year.

It took 12 years for the previous Government to take action against the wealthiest 5,000 people some of who weren’t paying their fair share of tax.

We can do better than that.

In less than a month’s time, a new ‘affluent team’ will be place. This team will look specifically at the next 350,000 wealthiest taxpayers.

These are the people who pay or should pay the 50p rate of tax. And my message to the small minority who don’t pay what they owe is simple, I agree with the Chancellor. “We will find you and your money” and you will pay your fair share.

Economic credibility comes from doing the right thing – that’s why Labour lost it.

At the next election, we can make sure there will be only one party that people trust to both handle the economy and deliver fairness – the Liberal Democrats.

We’ll win that trust by sticking to our guns, especially when times are tough.

We’ll do that by levelling with people about the scale of the challenge we face, not offering false promises as Labour did.

By delivering our aspiration to rebuild a more sustainable and balanced economy.

By showing that we understand the fears and the pressures on the people of this country, and share their ambition for a better Britain.

Most of all, we will do that by building a shared sense of national economic purpose so that we are working alongside every person in this country to restore our prosperity.

Do you remember how Gordon Brown liked to conclude his speeches?

Long lists – did you find them annoying? I know I used to.

But not now, with so many Lib Dem achievements already in place, I can’t resist:

A clear plan to deal with the deficit, removing barriers to business growth, investing in infrastructure, promoting free trade and competition, sorting out the banks,

tackling tax avoidance, and cutting taxes for those who need it most.

That is the economic policy of the Liberal Democrats in government and it is a record to be proud of.

Danny Alexander – 2005 Maiden Speech in the House of Commons

Below is the text of the maiden speech made by Danny Alexander in the House of Commons on 19th May 2005.

 

Thank you, Mr. Deputy Speaker, for the opportunity to make my maiden speech in this House today. I start by congratulating my right hon. Friend—sorry, my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy). I was going to say that Cornwall had maybe discovered another star of the future, but perhaps I have promoted her somewhat too quickly. I congratulate her on her maiden speech and I congratulate other hon. Members who have made their maiden speeches today.

I am personally grateful to hon. Members from all parties, but especially to Liberal Democrat Members and to the staff of the House, whose advice and kindness have helped me and other new Members to find our feet. I am proud to say that I am the first Member of Parliament to represent Inverness, Nairn, Badenoch and Strathspey. This is a new constituency, and there are many in Scotland. Three quarters of the constituency was previously within the Inverness East, Nairn and Lochaber constituency. I pay tribute to David Stewart, who was the Member of Parliament for that constituency from 1997 and the Labour party candidate at the election.

Mr. Stewart conducted his campaign in the way he conducted himself in this House: he was understated, industrious and gentlemanly. He was a renowned campaigner on many worthy causes, and I would particularly like to highlight his work to tackle global poverty through the Jubilee 2000 movement. I wish him well for the future. Of course, the highlands of Scotland have a long and radical tradition. Hence it has been for many years a stronghold of Liberalism and now Liberal Democracy. Prior to 1997, much of my constituency was represented by that great Highland Liberal Russell Johnston, who continues his service in the other place. Throughout his 33 years representing the area, Russell exemplified the thoughtful and independent-minded approach that is characteristic of the highlands. I was especially grateful to him for spending so much of his time with me during the election campaign. It is striking to think that Russell was a Member of this House for as many years as I have so far spent on this earth. Russell Johnston was to me, as to many others, a political inspiration, but he was not the first Liberal influence on my life. My mother tells me that, when I was three months old, my grandfather was seen rocking me in my pram and saying “Repeat after me: ‘I am a member of the Liberal Party.'”

A quarter of my constituency was previously represented by my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy). Indeed, that is not the only thing that we have in common, for we are both former pupils of Lochaber high school and, as has been remarked upon in the press, share a hair colour that is perhaps more prevalent in the far north of Scotland than anywhere else. I have been very grateful for his help and support locally over the past year as a candidate, as well as for his outstanding leadership of the Liberal Democrat party, which has seen us to our best performance in a general election since the 1920s. Both my right hon. Friend and Lord Russell-Johnston have spoken up loudly for the highlands and for their principles, and if I can live up to their standards in the years to come, I shall be serving my constituents well. Like them, I shall work hard for everybody in my constituency, irrespective of their party preference.

Inverness, Nairn, Badenoch and Strathspey is the longest name of any constituency in the country—indeed, to some it may prove to be something of a tongue-twister. While many Members can speak of the visual attractions of their constituencies, I believe that Inverness, Nairn, Badenoch and Strathspey can rightly be described as one of the most beautiful of all. It is also one of the most diverse, encompassing the fast-growing city of Inverness, the remote splendour of the Cairngorm mountains, the mysteries of Loch Ness and the popular seaside town of Nairn. I have not yet had the pleasure of canvassing the most famous resident of Loch Ness, but I am reliably informed that she is not a Labour supporter. Like the Prime Minister, Nessie was not seen in my constituency during the election campaign, but unlike the Prime Minister, her reputation has grown as a result. Tourism is one of the most important industries in the area and hon. Members on both sides of the House can be assured of a warm highland welcome as and when they choose to visit. Indeed, I hope that the Prime Minister will now take the opportunity to do so.

One of the most important recent developments in Badenoch and Strathspey has been the creation of the Cairngorms national park, and I previously worked for the park authority. Readers of the National Geographic Magazine recently voted the highlands one of the top 10 sustainable tourism destinations in the world. Clearly, the need to develop the tourist industry further must be accommodated in such a way that it does not at the same time undermine the natural features that attract the visitors in the first place. We must not kill the goose that lays the golden egg.

As Members on both sides of the House are all too aware—the right hon. Member for Fylde (Michael Jack) eloquently made the point in his speech earlier—threats to our environment are more often international than local. The threat and indeed the current reality of climate change are all too apparent to my constituents, not least because they are highly visible through the fortunes of the Scottish ski industry. The Cairngorm mountain ski area has successfully diversified into a very popular summer attraction, as the amount of time and the snow available for winter sports have fallen as a consequence of global warming. I hope that we might finally see some genuine progress made on that most pressing question when the G8 comes to Scotland in the summer.

I am proud to represent the whole of the city of Inverness, capital of the highlands. Britain’s most northerly city is also one of the country’s fastest growing. The quality of life, as well as the quality of employment, have caused the population to rise, especially in the Inverness and Nairn areas. As well as being a service centre for the highlands, with much income from traditional areas such as tourism, Inverness is home to an increasing number of innovative modern industries, particularly in the medical field. The success of LifeScan Scotland, formerly Inverness Medical, which now employs more than 1,200 people, is helping to attract many new businesses to the area.

Inverness’s growth and success present challenges, not least the fact that, despite recent progress, with wages at 80 per cent. of the UK average, the highlands and islands is still one of the poorer areas in the United Kingdom. Problems caused by remoteness are as pressing as they were when Russell Johnston raised them in his maiden speech in 1964. Of course, there has been progress, and I pay tribute to the work of many public agencies in the highlands. The fact remains that there is considerable room for improvement in all aspects of the transport network—bus, train, road, and air—in my constituency, despite the substantial progress made under Nicol Stephen, our Liberal Democrat Scottish Executive Minister for Transport.

Effective transport links between the highlands and London are vital for the region’s continued growth, so it is a matter of regret that the Government have so far not seen fit to protect vital air routes between Inverness and London with a public service obligation. Considerable further investment is also needed to improve road and rail infrastructure around Inverness and between Inverness and Nairn, particularly by upgrading the A96 and completing the Inverness southern link road.

Perhaps the most pressing problem across the highlands—and, as we have heard in other speeches today, in many areas across the country—is the shortage of affordable housing. The rapid rise in house prices has pushed owning a home beyond the means of many local people. One Conservative Member has already confessed to me that he owns a second home in my constituency. I look forward to meeting him there, but I have to say that demand for second homes has enormously exacerbated the problem of the shortage of affordable housing. We need radical solutions, which will be one of my priorities during this Parliament. Although housing policy in Scotland is a matter for the Scottish Parliament, decisions made here can have a significant impact on the problem.

Our rural areas are home to many thousands of people, so services in small communities such as those that I represent must be preserved and enhanced, not undermined or removed, as has been the fate, for example, of too many post offices in recent years.

In his book, “Memory Hold the Door”, the author, John Buchan, wrote of the importance of holding public office in words that I believe still hold true today:

“Here our surface ribaldry covers a sincere respect, and in recent years, when parliamentary government has been overthrown elsewhere, I think we have come to cherish ours more than ever. Public life is regarded as the crown of a career, and to a young man it is the worthiest ambition. Politics is still the greatest and most honourable adventure.”

I look forward to the next stage of that adventure and I thank hon. Members for their forbearance of my opening foray today.

Peter Aldous – 2010 Maiden Speech in the House of Commons

Below is the text of the maiden speech made by Peter Aldous in the House of Commons on 27th May 2010.

 

Thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. I will start by paying tribute to the hon. Member for Swansea West (Geraint Davies) for his passionate, detailed and knowledgeable speech on climate change. Indeed, it has been marvellous to listen today to some great speeches. We heard the speech of the new hon. Member for North Antrim (Ian Paisley), whose brother is a minister in my constituency, Waveney in Suffolk. We then heard the speech of the new hon. Member for Ealing Central and Acton (Angie Bray), who listed some films that had been made in the famous Ealing Studios. She actually missed out the most famous, “Kind Hearts and Coronets”, where the star had a particular way of getting into the other place. I think that constitutional reform will put an end to that.

I chose this debate to make my maiden speech because energy and offshore renewable energy is vital to the future of my constituency-Lowestoft and the surrounding area, which have suffered from industrial decline for the best part of 30 years. I pay tribute to my predecessor, Mr Bob Blizzard, for the work that he has done over the past 13 years. He has been a passionate advocate for Waveney and a hard-working and diligent MP. I thank him for all the work that he has done.

Waveney is the most easterly constituency in the country. Perhaps at times, we Suffolk people hide our light under a bushel and do not make the most of the virtues that we have. The constituency’s make-up is diverse. We have the coastal town of Lowestoft, famous for its fish, its maritime history, its decent, honourable people and its clean beaches. There is the fishing village of Kessingland, and the market towns of Bungay and Beccles, and wide open rural expanses in between. The people up there do at times feel that they have been forgotten down here. It is as if we were at the end of a line.

We have been crying out for better roads and railways for what seems like many, many years. I will continue to make that cry, as other Waveney politicians have done. In November 1959, Jim Prior, now in another place, described the road and communications system in East Anglia as the Cinderella of the country. It seems as if we have not got very much further in the past 50-odd years.

We have industries that have declined. The fishing industry is no longer what it was; shipbuilding has gone; and the canning factory has gone. That is what we need to address. I am not going to moan; offshore renewables present us with a great opportunity to bring Waveney into the 21st century. It was an opportunity that Bob Blizzard recognised, and I will be taking the baton from him to make sure that we deliver on that goal.

We need a new and radical energy policy. If we do not have it, the lights will go out. We need to be in control of our own destiny. We need energy security. We owe it to future generations to take a major step towards a low-carbon economy. We need a mixture of energy sources-green energy sources. To me, nuclear has a vital role to play; so, too, does clean coal, and micro-energy is also of great importance, but it is offshore renewables on which I want to focus. We have to get 15% of our energy supply from renewables by 2020. We have a lot of work to do, being at just over 5% now. There are great opportunities for green jobs; I see that it is estimated that there will be 1.2 million by 2015. If we do not do the work, we will fall a long way short.

Lowestoft has a great opportunity, and great advantages in setting about giving us those green jobs and taking us forward. It has a great location, close to where the offshore turbines will be-the East Anglia Array and the Greater Gabbard. We have a skills base, built up over many years, in fishing, in shipbuilding, and in the North sea oil and gas industry. Those skills are transferrable, and we can make best use of them in the renewables sector.

We have to improve our training and education. We have a further education college that is delivering skills, and there is the opportunity for University Campus Suffolk to provide higher education with regard to those skills. We also need to reinvigorate the apprenticeship system, which, in Waveney and Lowestoft, has been so important in our past. There are measures in the Queen’s Speech that will help to deliver that.

I am here to represent Waveney, but I must not be parochial. To deliver green energy, and get the renewables that we need, I have to think outside my constituency, and think about the surrounding constituencies. In East Anglia, we have great opportunities. There is a deep-sea port in Yarmouth; that will help us to bring opportunities there. There is land elsewhere in other constituencies, too. I see that my hon. Friend the Member for Great Yarmouth (Brandon Lewis) is not here at the moment; in the past, Lowestoft and Yarmouth have spent a lot of time fighting each other. We fought on opposite sides in the civil war, and we had the herring wars, but we are united now in seeking to deliver the renewable energy opportunities.

The energy Bill will be a foundation stone; we have to build on that for the benefit of Britain, East Anglia and-to go back to being parochial for a minute-Waveney. Looking at it from Britain’s point of view, we have the opportunity to lead the world in a transition to a low-carbon economy. We owe it to future generations to grasp that opportunity.

Jonathan Aitken – 2009 Speech on Truth and Politics

Below is the text of a speech made by Jonathan Aitken on 26th May 2009.

 

As some of you know I have the unhappy distinction of being the only British cabinet minister ever to have been sent to prison.

These days, quite a few people seem to be surprised that I am the only one.

But despite the obvious ironies of being invited to open our discussion today, perhaps I can bring to it both a worm’s eye view and a bird’s eye view of the subject.

The worm’s eye view, which I acquired involuntarily by spending 7 months in Her Majesty’s prisons for perjury, does concentrate the mind wonderfully on why some politicians fail tests of character to do with the truth.  In my own case it was largely to do with pride, a theme which may recur in other cases.

But on the principle that poachers sometimes make good gamekeepers I also want to offer you a bird’s eye view of why our present Parliamentary system has been failing.

Coupled with some concluding thoughts about how the best practices and highest ideals of Parliamentary democracy could be made to work far better than they are working today.

In short, using the title of Peter Hitchens stimulating book The Broken Compass, I want to ask 2 questions in the spirit of seeking after truth.

1. Why is our national political compass broken?

2. How could we fix it?

In the present mood of public anger about Parliamentary expenses there may be some confusion as to whether we are talking about individual, institutional or constitutional failures.

Individual failures of character in politics are not new.

Jack Profumo was a close friend and Parliamentary colleague of my father’s.  I vividly remember as a teenager in the summer of 1962 when the utterly broken Jack Profumo secretly came to stay with us in our home in Suffolk to escape from media hounding.

And while he was staying with us Time Magazine published a cover story on the Profumo Crisis.  The American reporters writing the article took the line that the whole drama was over-hyped British establishment hypocrisy. All the errant minister had done was to sleep with a girl and deny it in the House of Commons.  So Time Magazine signed off their piece with a jokey quatrain:

“To lie in the nude is not at all rude

But to lie in the House is obscene.”

Yet for all the lampooning by Time, the fact of the matter was that the institutional standards of Parliament in regards to truth were not in any danger of failing in 1962.

For an MP to lie in a personal statement to the House – traditionally heard in silence and without questioning – was regarded to be as massively serious a breach of Parliamentary rules as to lie on oath in a court room is regarded as a breach of the law.

So both Profumo and I were rightly punished – although for individual rather than institutional failings.

Today’s broken compass is different because its exposed failings suggest that an entire political class has lost its bearings.

Of course we all know that on the expenses scandal large numbers of decent MPs have not, to paraphrase the words of the Anglican general confession, “followed too much the devices and desires of their own hearts” – or pockets.  There are still plenty of good and honourable members.

Yet the Parliamentary compass is evidently broken and I think that is so for far deeper reasons than claims for flipped mortgages, moats, beams, bathplugs and duckhouses.

My view which I think is shared to some extent by Peter Hitchens, is that Parliament has been falling into low public esteem for some years.  This is due to some if not all of the following factors:

1. The failure to scrutinise huge swathes of legislation with anything like the same level of debating time and due diligence that almost all Parliaments in the first nine decades of the 20th century applied as a fundamental duty of MPs.

2. The handing over of Parliamentary authority to an ever increasing number of unelected bodies ranging from politically correct quangos to the EU commission.  Power has drained away from Parliament as a result and marginalising MPs.

3. The increase and almost automatic use of the Parliamentary guillotine to cut off debates on Bills.  The first Blair government even invented a corrupt device by which parts of Bills are “deemed” to have been debated by Parliamentary committees when they have not actually been debated. So much for truth in politics there!

4. The failure of Parliament to protect the erosion of traditional British liberties in the cause, occasionally justified but too often unjustified, of strengthening the criminal justice system, particularly in regard to terrorism.

5. The rise in power of the party whips’ offices and their centralised control over independent minded back benchers – who have become an almost extinct species as a result.  The whips now suppress dissent and control all committee chairmanships and memberships – which is wrong.

6. The undermining not only of Parliamentary independence but also Civil Service independence.  This has been achieved by the appointment of large numbers of “special advisors” on the government’s payroll who act as Prime Ministerial spin doctors and acolytes, again marginalising MPs in the process.

7. The undermining of what used to be called the adversarial system of long and sometimes fierce Parliamentary debates over all important legislative proposals.

Peter Hitchens writes powerfully about this in the final chapter of his book.  He argues, and I agree with him, that the historic traditions of adversarial argument in Parliament have almost completely ceased.  Instead we have the creation of a cosy Parliamentary consensus in which too many important issues get short changed or even ignored by the political class.  As Peter Hitchens puts it: “Political parties have become devices for representing the views of the establishment to the people rather than the other way round”.

8. The cumulative effect of these changes has been to turn the peoples Parliament into a politicians Parliament.

This introverted approach has increased the power of government and outside bodies at Westminster’s expense.  Toomnay MPs have been reduced to impotent time-servers.  They have long forgotten the wise dictum of Mr Gladstone: “Parliament is not the government.  It is the check upon the government”.

Today’s subservience of Members of Parliament to government is much more worrying an institutional trend than individual venality over expenses.

Yet it is the scandals over these expenses that has triggered today’s crisis and which now offers a major and healthy opportunity for Parliamentary reform.

So finally how might we fix the broken compass?

At the heart of the individual and institutional failings of Parliament lies this uncomfortable truth.

For far too many people in politics compliance has replaced conscience as the arbiter of what is right and what is wrong.

Perhaps it is spiritually relevant to this debate to remember the question Pontias Pilate asked before disregarding his own conscience and complying with the pressures from the crowd: “What is truth?” – unfortunately he did not stay for an answer.

I suggest we will only get the right answer to questions such as “what is truth?” or “what is right?” until we have gone through the painful but necessary cleansing process of electoral and Parliamentary upheaval which has only just begun.

All the wrongs that I have just listed, plus a root and branch clean up of the Parliamentary expenses rules can be put right by the votes of the electorate and by a new reforming Parliament.  It has happened before in our history, notably at the time of the Great Reform Bill of 1832.

Indeed a new government and Parliament might usefully consider whether Britain needs a Great Parliamentary Reform Bill of 2010 or 2011 to give us a differently motivated political class and a new political compass.

At least the great debate is now starting.  Thank you for putting on this early instalment of it in St Mary le Bow today.

Jonathan Aitken – Smallest Civil Service for 55 Years

Below is the text of a news release issued by HM Treasury on 30th November 1994 (reference 141/94).

 

Treasury Chief Secretary Jonathan Aitken emphasised today the Government’s commitment to providing the taxpayer with better services that cost less and announced further reductions in the size of the Civil Service.

He said “The new plans announced in yesterday’s Budget represent a 10 per cent reduction in real terms in the costs of running central Government between 1993-94 and 1997-98. The public sector is increasing its efficiency while delivering high-quality services to the taxpayer.

“The size of the civil service is falling, too. There are 10,000 fewer civil servants now than in April, and numbers have fallen by 40,000 since the last election. The Civil Service is now at its smallest since 1939. The plans announced in the Budget will ensure that this trend carries on.

“Service to the public is our priority: but we can serve people’s needs without squeezing their pockets. The Government’s programme of Fundamental Expenditure Reviews are covering the whole of Whitehall and improving the cost-effective delivery of front-line services on all fronts. The Defence Costs Study at MoD, which I oversaw, produced annual savings of Pounds 750 million and actually enhanced operational capability. Today the Customs and Excise is announcing the results of its Fundamental Review, which has identified cuts of 4,000 posts by the end of the decade; the NHS will reduce bureaucracy in its HQ and in intermediate layers of management by 21 per cent; the Department of Transport is increasing its efficiency by a fifth; and the Treasury itself is consulting on the recommendations of its Fundamental Review, which could lead to savings in senior posts of more than a quarter, while improving its performance as an economics ministry.

“Running costs spending is being planned and controlled more sensibly, too. The new rules for end-year flexibility mean that Departments can now carry over unspent running costs provision from one year to the next: last-minute splurges on 31 March no longer need to happen.

“July’s Civil Service White Paper forecast that Civil Service numbers could fall significantly below 500,000 in the next four years. The Budget plans for increasing efficiency in the public service put us well on course to achieve that.”

Peter Ainsworth – 2008 Environmental Business Speech

Below is the text of a speech made by Peter Ainsworth to the Environmental Business Conference on 2nd December 2008.

 

I am deeply grateful to the EIC for inviting me to participate in this conference. As you all know, the issue of climate change has been taken away from the Government Department which I shadow. Merlin Hyman’s insistence that I should join you today is proof that there is life after DECC.

The Environmental Industries Commission has a crucial role to play in the fight to overcome the environmental and commercial challenges facing business and industry.

By showing genuine leadership in an area where so often there is none, the EIC is at the forefront of the push towards a low-carbon, environmentally-focused, economy.

And the economy must be that way, or we won’t have much of one.

We all know that the economy is in trouble.

Uncertainty is rife. It is harder to get loans.  It is harder to get good ideas off the ground.  It is harder for businesses to plan for the future when others are going under.

Yet these difficulties are made worse still when Government fails to offer clarity and leadership.

Investing in the environmental industries should not be a gamble.

People are worried about their jobs and businesses and are anxious about what next year will bring. These are real and immediate concerns.

Yet we must not lose sight of the prospects for our long term advantage in the world economy.  The only way forward is to move to a genuinely low carbon way of doing business.

The current crisis is just that: a crisis. But as I said here in April, there is a Chinese symbol for crisis which means both danger and opportunity.

It is essential that, in dealing with the present crisis, we do not lose sight of the opportunity for a different kind of growth.

We must build new, green businesses and make old businesses greener.

This way we will create new and lasting jobs. Here. At Home. In the UK. And around the world.

So right now, whilst all attention is understandably focussed on damage limitation, we need to remember an important point:  there is no trade-off between the green agenda and saving the economy.  They go hand in hand.  Our economy, our environment, our country, must be equally resilient.

We are becoming far too dependent on foreign oil and gas. In the last three years, our domestic oil production has fallen by 9%.  This is trend will continue.

The UK has recently become a net importer of gas.  By 2010, imported gas is set to make up half of our supply. This poses a serious risk to the country.

We are losing our resilience.

We are becoming weaker and more vulnerable.

In the spring of 2006, a supply problem in Europe meant that we, in Britain, had to fork out an extra £1 billion pounds to heat our homes.

We cannot afford to be so exposed to factors beyond our control.

It stunts our economic growth and leaves the most vulnerable in society at risk.

I guess what I am saying is that it’s not just in your interest to go green. It’s in the national interest. So green really is the new red, white, and blue.

The Government can wring its hands about the failure to meet domestic fuel poverty targets, but the truth is that if we don’t control the fuel, we don’t control the price of it.

When we are dependent on others, we put our industry and citizens at risk.

To break free we must go green.

Our economy is in need of an overhaul. It needs re-engineering. We cannot afford to grow in the way we have for the last century and a half; behaving as if we were masters of nature, and not a part of the natural world.

It is clearer now than ever that we simply cannot afford growth if it isn’t green.

In the frightening risk of economic decline lies our generation’s chance to shift to a greener way of living and doing business.

It is our only chance.

From the ashes created by economic behaviour based on short term greed and hubris we have a golden opportunity to learn, and to build a stronger, more sustainable and greener economy.

We must seize this chance.

The future of our economic competitiveness is inseparable from our environmental competitiveness.

If we want more jobs in this country now and economic advantage around the world tomorrow, we must develop our environmental industries.

We need new industries, rooted in a new green, British workforce, with British know-how, and scientific excellence behind them.

We have a long way to go.

The Environmental Industry in the UK has an estimated turnover of £25 billion and includes 17,000 companies.

But I really do believe it must and can be stonger.

The projected world turnover is set to increase to $688 billion by 2010. Britain must be a player in that market.

Though there has been enormous progress in our environmental industries in the last two decades, our competitiveness is still at risk.

The most recent Government estimate of the number of British jobs in environmental industries is 350,000. Yet Germany has almost as many in renewable energy alone.

Renewables in the UK?  The sector employs 15,700.

We are falling behind.  We should be a world leader, not a laggard.

Consider what happened with Pelamis Wave Power.  A British company developed the technology to generate enough power for 1,000 homes from completely sustainable tidal power.  Where was it built?  Portugal.

I use this example from the energy world because it neatly illustrates a point.  British innovation without an outlet at home.

We are big on ideas, but rubbish at delivering results.

Talking of rubbish, look at our waste industry.

The spot price for recycled plastics has plummeted-from £200 a tonne, to £10.  Now local authorities are having to find places to store the stuff and that isn’t easy or sustainable.

I work on the assumption that people want to do the right thing for their families, communities and local environment.  But there is a real risk that confronted with mountains of bottles, paper, and glass, they will ask, ‘why bother?’

That is a question which we cannot allow to be asked.

Why did this happen?  Global economic circumstances certainly play their part: the price of virgin material has fallen and China’s demand has dropped.

But it didn’t have to be as bad as this. The UK just doesn’t have the infrastructure to process the waste.  There has not been nearly enough investment because not enough has been done to encourage the market.

The industry in the UK is worth £6.8 billion.  Germany’s is worth 7 times that.  Now, Germany’s market for recyclable materials is also suffering, and there will certainly be some losers, but the strength of their market means that they will be the first to rebound when the price goes up.

They have the capacity to wait out a bad spell.  We won’t fare as well.

This is the kind of strength that we need to encourage at home.  This is the kind of resilience we will need to compete abroad.

Although hidden behind the headlines about economic meltdown, the challenges facing our global environment are profound.  You all know the dangers.  They haven’t gone away just because other problems have turned up.

Yesterday, the Committee on Climate Change published its review.  As Lord Turner put it, ‘the challenge is not the technical feasibility of a low-carbon economy but making it happen.’

The debate; the endless Reviews and Reports; and the time for talking and consultations: they are all over.

Now we need to get down to the tough business of getting the job done.

In a climate of uncertainty, Government needs to set a clear direction.  With the Climate Change Act-demanded and strengthened by the Conservatives, we have our framework.

Now, we must make it work.

The Government must isolate and destroy the barriers to encouraging new markets, new technologies and new solutions.  Now we need to roll up our sleeves and get to work.

We need to put political will behind regulatory change to clear the way for new markets.

We have made some progress.  Despite hostility from the Government, we fought to have a feed-in tariff in what is now the Energy Act.  Instead of overlapping and convoluted regulation of the energy sector, companies and individuals can be confident that they will get a return from renewable energy.  It now makes economic sense to make energy green.

Bio-methane from farms has the potential to make a real contribution to our gas supply.  This resource can be tapped but it needs similar regulatory reform.

We want to help people enter the market through better, clearer signals that give a long term guarantee that their investments will be worth it.

Of course, Government cannot do everything, nor should they.  We have to work together with industry and the public.

For example, we should take advantage of potential offered by biogas. Yet to make this happen, we need to make it possible for more farms to feed their gas back into the national grid.

If the goals are clear, together we can give confidence and expunge the blockages to decarbonising our economy.

Our approach to feed-in tariffs and biogas are two examples with a common theme: Clarity.

Unless we make the direction clear, we will never decarbonise our economy.

It is also a matter of trust.

Unless investors can trust the Government to hold a course and stick to its green commitments, we will never stimulate the green economy or make our country more resilient and our citizens safer.

We have a plan. In the next few months, we will be publishing our comprehensive guide to how we will do this.  Our Low Carbon Economy Paper will be a detailed plan for change.

It will outline clearly the market signals and regulatory changes that are needed to increase energy efficiency in homes, businesses and farms; it will show how new networks can be created for decentralised energy and mass use of sustainable transport; it will address the barriers to reducing emissions; and it will map the pathway to our ambition for a zero waste Britain.

We need clarity if we are going to be competitive.

Because if we are to compete economically in the future, it will be on green terms.

Going green will make us safer and better off.

Stronger and more resilient.

These are difficult times. But we must, and will, hold fast to the green agenda.

Don’t let anyone tell you there is a choice between the economy and the environment.

There isn’t.

So, as we rebuild the global economy, we must make sure we do so as if the Earth matters, as if our natural capital matters as much as the capital we put in the bank.

We must seize our opportunity and, in doing so, make our environment, our economy, and our society more secure.

Peter Ainsworth – 2008 Conservative Party Conference Speech

This session is about the local environment, the places where we live. But this week of all weeks we don’t need to be reminded that events that happen on a global scale can hurt every family.

The economic problems reverberating around the world can, and must be put right.

We were promised no more boom and bust. And look what happened.

But when it comes to the global environment, if that goes bust, there will be no boom ever again.

So, as we rebuild the global economy, we must make sure we do so as if the Earth matters, as if our natural capital matters as much as the capital we put in the bank. We must make both more secure.

With our dependency on foreign oil, with food prices spiralling and jobs at risk there is an urgent need to forge a greener economy that promises less dependency, more security, less risk, more jobs.

As David Cameron said in June, ‘we cannot afford not to go green’.

Going green means being safer by being more self sufficient; it means building a more robust and resilient Britain in a troubled world.

But we need a Government that sends out consistent and clear signals.

It’s no good Ministers going around the world lecturing countries like India and China about carbon emissions and then ushering in a new generation of dirty coal fired power stations.

Or building a third runway at Heathrow regardless of the impact on the local and global environment.

Why should anyone take lectures from Labour when over half of all Government departments have bigger carbon emissions than a decade ago.

And I can’t think of a better way of undermining the green agenda than slapping a retrospective tax on cars we’ve already bought.

That’s a stealth tax, not a green tax.

We need an honest government, a government of courage and vision, to see us through tough times.

There is a great opportunity for Britain.

Germany already has over a quarter of a million ‘green collar’ jobs. We have a handful.

It is not good enough to sit back and watch, while other countries take the lead developing new economic opportunities. That is exactly what Labour has done.

It’s just not good enough for Britain, for our families and children.

We need a different approach – one that makes it easier to do the right thing.

We won’t build more resilient communities by sitting in Whitehall banning things.

For example, we should reward people who do more recycling – not punish people who don’t.

We want literally to give power to the people, enabling communities to create their own green electricity and profit from it.

And we want to provide incentives for employers to help those who work for them make their homes more energy efficient.

The challenges we face may be huge, and global, but often the answers will lie close at hand.

I am delighted that we are joined by Bill Bryson, who is doing so much to protect and promote our local environment.

Caring for the areas where we live, creating green spaces and preserving wildlife habitats; these are important to our wellbeing and can help build pride in our communities.

Just four miles from here is Sandwell Valley, a nature reserve run by the RSPB. I went there on Monday.

A green oasis.

I went pond dipping with a group of local school children. Their enthusiasm was amazing.

Newts and creepy crawlies are always going to be more memorable than double maths.

The lake in the reserve was originally designed as a flood defence measure. It’s a brilliant example of how we can help prevent flooding and make life better and more beautiful, by working with nature.

And so many other places know how important it is that we adapt to a changing climate. Floods both this year and last, which brought so much misery to thousands of people, exposed frightening weaknesses in our defences against extreme weather.

Going green will make us safer and better off.

These are difficult times. But we must, and will, hold fast to the green agenda.

It is the resilience agenda.

Don’t let anyone tell you there is a choice between the economy and the environment. There isn’t.

It begins with the places we all call home: our street, our town, our city, each individual action however insignificant it may seem is a building block to a more resilient Britain and a greener and safer world.

Peter Ainsworth – 2008 Speech to Sustainable Development Conference

Below is the text of the speech made by Peter Ainsworth to the Sustainable Development conference on 10th March 2008.

 

Someone said recently that politicians talking about Sustainable Development sound like Soviet rock ‘n’ rollers. He’s right. The lyrics are terrible: Integrated Framework; Social Equity and Cohesion; Global Environmental Governance; Convergence. Catchy stuff, isn’t it? Anyone dropped off yet?

There are two problems with using language like this. One, it kills stone dead any idea of Sustainable Development as a vital opportunity for change. Secondly, terms like Global Environmental Governance make it sound as if we’ve got the problem of sustainable development sorted.

Well, we haven’t. Not by a long chalk.

It’s hard to believe that Margaret Thatcher spoke about the dangers of global warming back in 1988. She said it was quite possible ‘we have unwittingly begun a massive experiment with the system of this planet itself’. And where are we now? After 20 years of conferences and debate – we’re using up natural resources faster than ever, and the pace of climate change is quickening beyond scientists’ worst expectations. Tipping points we thought were generations away are coming closer every year. It’s taken a very long time for us to accept that fossil energy was, in the words of writer Bill McKibben, ‘a one-time gift, that underwrote a one-time binge of growth.’ The experiment has gone horribly wrong.

So today what I want to talk about is how we move from talk to action.

Last September the Quality of Life Group, set up by David Cameron, published its findings and proposed some exciting and far-reaching proposals. It successfully sought answers to the key question of how can we continue to be an economically successful nation and, at the same time, an environmentally and socially healthy one?

We have got to change the current mindset.

Over many years, we’ve got into the habit of defining progress by the single criterion of economic growth. And levels of income and consumption have soared in most developed countries during that time. Yet the people of those same countries report no increase in their sense of happiness or wellbeing. In many cases they report a decline.

That’s an odd kind of progress.

Of course we need economic growth; but not at all costs.

We need a stronger, greener society. One that recognises the importance of wellbeing.

Green spaces are essential to this, and Local Authorities have a vital role to play, through the planning system, in ensuring that planning is not just about buildings, but about the spaces that surround them.

But what’s the point of a green space if mothers are afraid to let their children play there? Or if, every two minutes, a plane screams overhead?

To state the obvious, our environment is where we live. But we have failed to recognise its importance either locally or globally.

The fact is that UK carbon emissions have risen over the last ten years. OK; the government reported a 0.1 percent fall in carbon pollution last year; at that rate it will take us over 500 years to reach our 2050 reduction target. We haven’t got 500 years; we may have as few as five to begin to make a difference to the quality of the world our children will inherit.

We can’t go on as we are.

The good news is that the market is on the case. Increasingly, the business community is recognising the opportunities for ‘green growth’. Large utility companies have brought renewable power into millions of homes. The decision by M&S just last week to charge for plastic bags was a brave and welcome move and shows that responsible business is playing its part.

Responsible businesses can see the opportunities created by increasing consumer awareness of the ethical and environmental values attached to what we buy.

And I don’t think that this is just a middle class phenomenon; nor do I think that it will fade away at the first whiff of an economic downturn.

Consumers are not about to start demanding less. They never have before.

But the bad news is that it will take more than a market-led approach to achieve a truly green economy.

We need the engagement of a far-sighted government, with joined-up policies, and the courage to implement them. And that’s the missing part of the equation at the moment.

The Climate Change Bill, currently in the House of Lords, has the potential to deliver a step change in the way we think about, and plan for, a sustainable society.

But in itself it will not be enough.

The key test will be the extent to which the Bill changes the mindset in Whitehall and Westminster. The Bill will set a framework; but it is a coherent approach to policy making that is needed.

Let me offer one stark example of the present confusion over policy.

Pollution from aviation is the fastest growing source of climate change gasses.

Yet, even as the Climate Change Bill is making its way into legislation, the Government is supporting a massive increase in the capacity of Heathrow airport

It just doesn’t add up.

I don’t say that any of this is easy. But I do say that we need to be consistent.

Where’s the political and economic clear-sightedness? Where’s the joined-up thinking? Where’s the courage to carry through change?

Hitting our emissions targets and building a sustainable society will require a wholesale transformation of our energy and transport infrastructures.

We need an ambitious and determined government.

We have a long way to go in a very short time.

The UK has just signed up to a 15% total renewable energy obligation by 2020. By implication, that means that we will need to obtain around 40% of our electricity from renewable sources. It’s a heck of a challenge, given where we are today. Bottom of the EU league table for renewable energy.

Instead of being a leading innovator in renewable energy, we have the most expensive wind energy in Europe, and – worse still – we are teetering on the edge of building the first new coal-fired power station for thirty years.

The support mechanism for large scale renewable technologies has primarily benefited onshore wind power and landfill gas generation, to the neglect of other technologies farther up the cost curve, many of which could play a major role in our low carbon future, particularly in microgeneration technologies.

This is why we recently announced our Feed in Tariff policy, which will provide a twenty year price guarantee to microgeneration technologies; significantly reducing our carbon emissions and enhancing our energy security in the process.

Feed in Tariffs have worked to great effect in other EU countries, Germany in particular, which can now boast up to 300,000 people working in the renewable industries. Germany has 10 times the installed wind energy capacity of Britain, and 200 times more solar capacity. You will note that Germany is neither 10 times windier nor 200 times sunnier than the UK, yet they are leading the world in these technologies.

It’s about having the right policies.

The EU renewables industry already has a turnover of €20 billion per annum. The Stern review estimated that global climate change markets will be worth US$500 billion per annum by 2050. How much of this $500 billion green economy will be located in the UK?

This is not just about being Green. It’s about being competitive; and it’s about being secure.

So let’s have more of the politics of ‘can do’, and less of the politics of ‘cannot’.

My father used to tell me that there’s no such word as “can’t”. .

Here are some things we can do.

Last week we announced three new climate change policies designed to help decarbonise our economy whilst still allowing it to grow, through utilising Britain’s natural advantages: our intellectual capital, our financial capital, our enterprising spirit, as well as our public willingness to act on climate change:

Green technology Incubators will allow more of our finest research minds to actualise their ideas in to viable businesses. We have some of the finest research universities in the world, yet in Britain today, we are concerned that is much too difficult to turn bright ideas into a working enterprise. We have seen too many great technologies fail to reach the market, getting caught in the trap between a great idea and a viable company.

Secondly, last week we announced our intention to establish the world’s first dedicated trading market for companies focused on green technology. Britain is privileged to have access to some of the world’s finest financial minds and investors in the City of London. The Green Environmental Market is designed to help London become the world’s leading centre for the listing and trading of companies in the field of environmental technology. GEM will build upon the success of AIM (Alternative Investment Market) in attracting green technology companies, but have its own distinct identity and listing criteria.

Thirdly, we proposed introducing new Green Individual Savings Accounts, which will enable the public to save more than they currently are allowed tax free, provided these funds are being only invested in environmentally friendly companies. These Green ISAs – or GISAs – will engage the public in a new way in the issues around climate change – and show them very clearly the economic benefits of green investment. And by providing lucrative new sources of that investment, Green ISAs will create a race to the top by incentivising businesses to adopt environmentally friendly policies.

These are the kind of policies that we believe will allow Britain to deliver on our Climate Change Bill commitments. These are the policies that will deliver dynamic industrial change and create hundreds of thousands of new jobs in the UK economy.

As Jonathon Porritt has acknowledged, there has been some progress.

The Government has already ‘adopted’ our policy of transferring the Air Passenger Duty from individual passengers to the whole flight, so as to incentivise the airlines to fill their planes and thus reduce the carbon pollution per person to as low as possible.

It now appears that the Government may also be adopting out feed in tariff policy. Imitation is the sincerest form of flattery.

It is an extraordinary fact that, in an age of concern over energy security, over two thirds of the energy created in a traditional hydrocarbon power plant is lost, primarily up the chimney, as waste heat. To deal with this, we have announced our intention to introduce a Waste Heat Levy, to incentivise large energy producers and users to make use of their waste heat.

And then there’s our plan for a ‘Carbon Levy’, which will be a tax on carbon intensive energy production, to replace existing ‘Climate Change Levy’ – which has a great brand name, but which is unfortunately just a non-discriminating tax on industry’s use of electricity, regardless of its origins.

That’s what central government should be doing.

We need to put a price on carbon across the economy. We must ensure that the carbon costs of all activities are factored in to the policy making process. The present way in which the Government treats carbon costs as off balance-sheet would do credit to Enron.

And just as important, it should make sure it takes the country with it. Not nearly enough has been done to engage other key groups in the process: local government, the business community, local communities, and individuals. As a result, people feel disempowered and disconnected from what the Government is saying about Green issues, and suggestions of higher taxes on polluting products and activities are greeted with hostility.

That is understandable, if green taxes are simply presented as a punitive add-on to our existing system. What we need is a more fundamental shift in taxation – away from “pay as you earn” and towards “pay as you burn”. Green taxes needn’t – indeed must not – raise the overall tax burden.

But we do need to shift the revenue base away from taxes on work and families, towards taxes on carbon and other pollutants.

The message to consumers must be clear: environmentally responsible choices will save you money.

So if those are some of the national changes we face as we move towards developing a sustainable society – what about the global picture?

You don’t have to be a fully fledged federalist to work out that the EU has a very important role to play, both in encouraging sustainable practices at home and in the wider world.

Harnessing the power of the world’s largest single market to drive up product standards around the world, for example.

Or developing innovative market based mechanisms like the Emissions Trading Scheme:

Of course, it is widely accepted that Phase One of the ETS has been a failure in terms of actually reducing emissions. Too many credits were handed out for free, giving dirty industries a licence to pollute. But this has been a political failure, not a market failure.

The very existence of the ETS has proved that the mechanics of a carbon market can be made to work, and that is a major achievement in its own right

Phase II already looks more promising; the auctioning of up to 10% of allowances has helped to drive the price of carbon to above €20 per tonne.

But it is Phase Three of the ETS, which runs from 2013-2020, and is being negotiated this year, where we must focus our efforts. For EU Emissions Trading Scheme to deliver as a true carbon reduction mechanism, we need to aspire to, argue for, and hopefully achieve 100% auctioning of credits in the Third Phase.

If we are to stand a chance of tackling climate change we have to have reach international agreement on a way forward post-Kyoto. This is the true test.

All the world’s eyes are currently on the USA, waiting for whoever wins the Presidential race to ensure that the mightiest nation on Earth, and its biggest polluter, takes its rightful place at the head on international efforts to curb climate change and adapt to its impacts.

Crucial to the success of the international action the world needs, by the way, will be an effective and fair means of halting deforestation.

And we can start by demanding sustainable biofuels.

It is utter madness to impose quotas for the use of biofuels without ensuring that they can be obtained from sustainable sources. There is a real risk that the British taxpayer will be contributing to the destruction of the rainforest and rising world food prices in the name of the environment.

Twenty years on since Margaret Thatcher warned that we might be experimenting with the planet, we desperately need, above all, to change the mindset of government.

Let’s see an end to the flabby, half-hearted, contradictory and complex approach we have witnessed to date.

This is the ecological, social, economic, security and moral issue of our times.

We must rise to the challenge.

And, in view of the sheer scale of it, it’s just as well that there’s no such word as “can’t.