Margaret Curran – 2013 Speech to Labour Party Conference

Below is the text of the speech made by Margaret Curran, the Shadow Secretary of State for Scotland, to the 2013 Labour Party conference in Brighton.


On 18th September next year, people in Scotland will decide their future.

And they will decide the future of Britain too.

This is a decision that matters to every Scot, but it also matters to every person here today.

And to each one of you, who have campaigned, leafleted, made the case and taken the argument to the SNP.

I say thank you.

This is your campaign, and I pay tribute to each and every one of you today.

Because what we are fighting for;

– a future of working together and not apart,

– a future of shared hopes,

Is based on the same values that brought together in 1900 the men and women who created the British Labour Party.

A gathering of people from Glasgow, from Cardiff and Liverpool, from the north of England to the valleys of Wales.

They watched Kier Hardie – a proud Scot – make the case for the creation of our party.

Hardie believed passionately in a Scottish Parliament but he knew then, as we know now, that to advance the cause of working people, to overcome those who would divide and rule, we had to work together across Britain.

Not split along national or regional borders and compete against each other, but work shoulder to shoulder for our cause.

And, friends, time after time, the Labour Party – influenced, shaped and led by Scots – guided by those values of solidarity, fairness and equality have built lasting monuments to what we can achieve together.

Social housing and equal pay,

The welfare state,

The National Health Service.

These are the pillars that support our society and join the Labour Party of Hardie, Wheatley and Jennie Lee with the Labour Party of Brown, Dewar and John Smith.

Labour giants who we pay tribute to today.

Conference, I don’t look to our past because I think the best times are behind us.

I do it because it reminds me of what we have achieved together.

And it tells me how much we can still do in the future, if we stay together, and work together as a united Labour Party and a united people.

Because we aren’t like Salmond’s Nationalists who think that a problem pushed over the border is a problem solved.

Nor like David Cameron’s Tories who want to set us all against each other in a race to the bottom.

But, Conference, if the SNP have their way their plan will mean the breakup of the Labour Party.

And I want to send a clear message from this conference.

That after 113 years, Alex Salmond is not going to bring our movement to an end.

Because, Conference, we are the party of Scotland.

Whose values are the values of the Scottish people.

The party that shaped a generation and made good on the promise of a Parliament.

That didn’t sit through 18 years of Tory rule nursing a grievance, but became the true voice of our nation.


Don’t let Alex Salmond fool you or the SNP delude you.

They are nationalists and their entire mission is independence.

To them, the only division that matters is the one they think exists between Scotland and the rest of the UK.

Every action they have taken since the start of this campaign has been with separation in mind.

Not the people of Scotland.

So Alex Salmond will attack the Tories one day.

And then he’ll turn on Labour the next.

He tells people that he wants to continue all the best policies we started.

But we could never call on his support when we were in power.

He’ll promote every other union, like the EU and NATO.

But won’t support the union on our own doorstep even when jobs and opportunities are threatened.

Conference, don’t be fooled.

The SNP have many masks, but behind them all there is nationalism.

Conference, you’ve probably heard that Johann Lamont has been taking on the SNP with energy and focus.

She’s taking Alex Salmond down a peg or two every week in the Scottish Parliament.

Now, Conference, I’ve known Johann for a long time.

And I really should have warned Alex Salmond that her specialty has always been sorting out arrogant men whose self-regard knows no bounds.

Under Johann’s focus arguments for separation are beginning to wither.

The realities are being exposed.

We now know the SNP say one thing in public, and another in private.

And they’ll go to any length to keep the truth away from the Scottish people.

Remember, this is a government, when challenged about their legal advice on Scotland’s EU membership, went to court, using taxpayers money, to cover up advice they were forced to reveal didn’t even exist.

This is a government that tells us in public that when we’re independent our state pensions will be guaranteed, but in a leaked paper admit they don’t know how they will be funded.

This is a government that can’t answer the shop stewards at Rosyth and Govan when they say independence will cost thousands of jobs in Scottish shipbuilding.

And, Conference, unbelievably, the Nationalists can’t even make up their mind about what currency an independent Scotland should use.

Alex Salmond says the Pound, but the head of the Yes Campaign wants something different.

Conference, we all know Alex Salmond likes a day at the races, but don’t let him gamble with the future of Scotland.

We all want to change Scotland.

We want to see a better future for our country.

But Alex Salmond is putting his party’s interests above those of the Scottish people.

It’s now time to make our Governments understand what is really happening in our homes, our businesses, and our communities.

Families struggling, looking in disbelief, as they see that bankers’ bonuses are back but their wages are going down.

Young people who can only see a life of short term contracts ahead of them.

Businesses with shattered confidence and empty order books.

Parents across the country who fear that they won’t be able to give their children what only a few years ago they took for granted.

These are the realities that both the UK and Scottish Governments can’t address.

That’s why people are looking to Labour to set out a new way.

And this week in Brighton, people across Scotland will see our alternative.

An alternative that demonstrates we have the plan to deal with the cost of living crisis facing hard working families.

And a plan that shows it’s only One Nation Labour that can rid Scotland, and Britain, of the Tories.

Conference, this week people in Scotland will see there is a clear choice.

A clear choice between Labour and the Tories.

And between Labour and the SNP.

You have to ask yourself – who do you trust with your future?

Ed Miliband – a Prime Minister who will repeal the bedroom tax?

Or a Scottish National Party who want to slash tax for big corporations?

Johann Lamont who fights for carers and college students?

Or Alex Salmond who fights for constitutional change?

Do you trust a Labour Party whose story is the story of Scotland’s communities?

Or a Scottish National Party who, after eighty years, can’t even get their story straight?

Conference, this is the choice we face.

And at this key moment in Labour’s story and Scotland’s history.

With Johann Lamont in Scotland.

And Ed Miliband across the UK.

We will reject the division of nationalism.

And fight together united for a better future for all of Scotland’s people.

Margaret Curran – 2012 Speech to Labour Party Conference

Below is the text of the speech made by Margaret Curran, the Shadow Secretary of State for Scotland, to the Labour Party conference on 2nd October 2012.

Conference, I want to tell you about Scotland.

I want to tell you about a country of just 5 million that has the passion and pride of a place with millions more.

A country that contains in its history the beginnings of the enlightenment and the engine room of an empire.

And where people today are forging a future that relies as much on the digital economy as it does on heavy industry.

Conference this is my country – and because of the Union it is your country too.

But, Conference, too many want to leave the story there.

They’re happy to celebrate these glories, but they’re not prepared to see the realities that, today, too many people across Scotland face.

Because how could a nation that gave the world the steam engine, the telephone and penicillin be expected to watch as the ingenuity of young Scots goes unrealised with one in four heading from the school gate to the dole queue?

How can a country whose education system was the envy of the world be expected to stay silent when 10,000 of our sons and daughters languish on college waiting lists?

And how can a people whose sense of solidarity was so deep that closing a yard meant much more than the loss of a workplace be expected to watch again as their communities are ravaged by recession?

Let me tell you Conference – we can’t stand for it and we won’t.

Scots are trapped between two Governments that have their priorities all wrong.

And by the day, the similarities between them are growing.

What’s the solution to every economic problem?

A cut in the taxes paid by their people and an assault on the services used by our people.

So when George Osborne suggests lowering corporation tax to 22 per cent, Alex Salmond goes further and says bring it down to 20.

While Osborne makes nurses and care workers and classroom assistants pay for a crisis not of their making, Salmond joins in and cuts 30,000 jobs from Scotland’s public sector.

And when the coalition cuts and Scots are at the sharp end, where is the Secretary of State for Scotland?

Conference, Michael Moore is nowhere to be seen.

Take it from me, it’s a difficult job to Shadow the Scottish Secretary when he’s barely casting a shadow on Government himself.

But I’ll tell you the one place you can find him. Day after day, night after night, he’s there in the voting lobbies with the Tories.

Regardless of the consequences.

A double dip recession.

Tax credits cut.

Long term unemployment at a 16 year high.

Parents relying on food banks to feed their families.

Taking from pensioners to provide to millionaires.

All his Government’s choices.

All his shared responsibility.

Conference, Scotland could and should be better than this.

We have a life sciences industry that employs over 32,000 people.

Creative industries that contribute £3 billion to our prosperity.

And close to a fifth of our nation’s economy relies on our energy sector.

Our people have so much to give, but still too many just don’t get that opportunity to get on, to do well and to flourish.

And as the world changes around us,

As the weight of the global economy moves to the world’s South and East,

As technology opens up new fronts in our search for prosperity and opportunity,

Scots realise that we can’t look to the solutions of the past to make us strong in the future.

Our response has to be rooted in the reality of the world around us, a world that is more interconnected and interdependent than ever before.

We cannot afford to listen to those who say that the answer to Scotland’s problems is to build a wall around ourselves.

So, the strength to overcome the challenges of our time comes from binding together, not breaking apart.

And that is as true of the challenges we face as a nation as it is of those we face in our families, our towns or our cities.

And, Conference, this is what separates us from the Tories and the SNP.

That whether we’re talking about improving our schools, raising our living standards, or deciding how we govern ourselves we are led by one simple truth: “That by the strength of our common endeavour we achieve more than we achieve alone.”

This isn’t just a slogan written on our membership cards but a truth written on our hearts.

We believe it, we live by it and if we are honoured with the confidence of the Scottish people at the next election we intend to govern by it.

Conference, with Ed Miliband as our Leader, we have a vision for a new economy, a new politics and a new society.

And in Johann Lamont, as we saw last week, we have a Scottish Leader who is unafraid to tell the hard truths or face the big issues.

And thanks to that great top team, we’re off our knees and winning again, across Scotland.

Winning people’s confidence.

Winning the trust of business, our vibrant third sector and our community groups.

Winning the elections which give us the chance to put our principles into action.

We’ve got a long way to go yet, but conference, if you want to know why all the campaigning and hard work and long nights and tough fights are worth it – just remember how you felt when you heard the magic words:



We know that when we fight, we win. And we are in the fight of our lives. Because in 2014, Scotland faces a decision about whether to break up Britain.

A decision with consequences not only for every Scot but every person across these islands.

And in the years that follow we will have to fight again, when we face UK and Scottish General Elections.

On the one side two parties that play the politics of division.

And on the other a Labour Party that sees the strength in all of us to work together and succeed.

A Labour Party that isn’t satisfied with what Scotland is today, but obsessed with what Scots could be tomorrow.

A Labour Party with the ideas, imagination and strength to rebuild Scotland and rebuild Britain.

And a Party which believes the Scots’ ideals of solidarity and social justice speak to concerns which are so great, so urgent, so universal, that we should never allow them to stop at our border, but send them onwards and outwards, to inspire not just the rest of Britain, but the rest of the world.

Jack Cunningham – 1998 Speech to the Oxford Farming Conference

Below is the text of the then Secretary of State for Agriculture, Fisheries and Food, Jack Cunningham, on 6th January 1988 at the Oxford Farming Conference.


I am delighted and honoured to open this 52nd Oxford Farming Conference. Oxford has a consistent record of identifying new trends in farming issues and communicating them to the wider world. Your title of the present conference – “the real world” – and your list of outstanding speakers demonstrate your determination to continue this fine tradition of leadership in the international debate on farming.

The present section of the conference is entitled “the world view”. As the United Kingdom begins its presidency of the European Union – the world’s biggest importer and second biggest exporter of food – this is highly appropriate. I shall say something later about my priorities for the presidency of the Agriculture Council during the next six months. But first I want to speak about the new British government’s approach to the farming industry in Britain and to the future of agricultural policy in Europe. Both have important implications going well beyond the borders of the United Kingdom and indeed of the European Union.

UK Farming

When I was appointed Minister of Agriculture I made clear what my priorities for British agriculture would be. I want to see an industry that is: successful, competitive and sustainable; that farms in an environmentally benign way; and that responds to consumer demands for high quality and, above all, safe food. Right from the start I put the health and well-being of people and the environment at the top of my Ministerial agenda.

My experience since last may has confirmed that these are the right objectives. The British public has sent a very clear message about the kind of farming it wants, and which it expects both government and industry to deliver.

Consumers increasingly want to know what is in their food and how it is produced. They want production systems which safeguard animal welfare, which they perceive as essentially natural and which do not damage the environment. They are often suspicious of new technologies and new production methods. Far more than in the past they look critically at the judgements and advice of scientists, governments and large multi-national companies where their food is concerned.

Nor are they willing any more to indefinitely subsidise farming for its own sake, even if they are willing to do so in order to help the environment or preserve and develop remote rural communities and areas.

These are complex and demanding messages from the public. They require a positive response both from government and from your industry. Farmers, I know, listen carefully to what their customers are saying. Like any other business you only survive by providing what the customer wants. He or she can always go elsewhere and these days consumer choice is expanding dramatically. It will continue to do so.

But government has a key part to play too. Food safety and consumer confidence cannot be left to the market alone. Government has a duty to ensure that quality and hygiene standards are high, that the welfare of animals is protected, that food safety is maintained at the highest possible level. Government must also ensure that consumers are given all the information they want about the food they buy. Clear and accurate information is increasingly important as consumers become more discerning. It is also the key to successful adoption of new technologies which may bring great benefits, but about which some consumers have considerable unease.

Above all, consumers must have confidence in the regulatory process and in government’s commitment to put their interests first. I will not hesitate to act on this principle, as I have recently shown over bone-in beef, specified risk materials and our decision to publish HAS scores. Our decision to create an independent Food Standards Agency with wide ranging powers is further evidence of this commitment. We shall be publishing our proposals in a white paper very shortly.

My plans to reorganise and redirect the Ministry of Agriculture, and to give it a new culture of openness and consumer involvement, together with a new identity which reflects the public’s expectations, are further essential steps to restore consumer confidence. As I work with our European partners for removal of the beef export ban, I must be able to demonstrate to those partners that our commitment in Britain to put safety first is paramount.

I recognise that higher standards may mean extra costs for the industry. You will understandably insist that if British farmers have to meet these high standards then so should your competitors. Otherwise your competitive position will be undermined. In a European single market and an increasingly open world trading system, how can this be assured?

This is not an easy question to answer. The straightforward response is that we should agree the high standards, whether of food safety or of animal welfare or for the environment, at European level and with our international partners. That is right wherever it is possible to do so. It is particularly important in the highly competitive European single market. That is why I have been pressing the Commission hard to produce proposals, for example, to phase out the use of battery cages for laying hens throughout the EU, and for the uniform treatment of specified risk materials in beef.

We must also make full use of the new international trade rules which allow countries to set high standards of human, animal and plant health protection provided they do this with proper respect for the science and in a non-discriminatory way.

But setting high standards for ourselves must not provide the excuse – as some in Europe have proposed – to erect unnecessary trade barriers against imports. When it comes to welfare issues or production systems, for example, we in Europe need to set our own standards for ourselves and make a virtue of them. We must then ensure consumers have the information about which products meet these standards and which do not. If consumers know that buying British means buying the best quality and best safety, you have nothing to fear from competition from farmers who do not meet those standards.

CAP Reform

I want to turn now to the question of the competitiveness of British farming. Let me start with a prediction – always a risky business for politicians! This is that by the time you hold your 62nd conference, in 2008, agricultural production in the European Union of 21 or more members will be very different from today – no longer subsidised – except in specific areas to preserve or enhance the environment and contribute to rural economies and enterprise.

Is that realistic? Should I have said 2010 rather than 2008? Perhaps. But the key message is that by then the inefficient world of European agricultural subsidy will have changed dramatically. The next WTO round is likely to require it. The budgetary implications of EU enlargement to the east will also do so. Enlightened farmers – particularly in this country, but also abroad – are preparing now for the restructuring of their industry.

The process of fundamentally reforming the cap will begin later this year when the Commission tables its proposals following up AGENDA 2000. I have no doubt that the negotiation in the Agriculture Council will be long and difficult. Some member states would prefer not to have to reform the CAP. But they all recognise that reform is essential in order to avoid wasteful surpluses and exclusion of our farm producers and their products from growing world markets. Some reform will undoubtedly come, probably during 1999.

The direction of Franz Fischler’s proposed reforms is right. European agriculture should not be insulated from world markets. Following the Uruguay round agreement, and reforms in American farm policy, our prices must come down to world levels if our agriculture is to retain its place in those markets. It is right to help farmers adjust to lower prices through higher direct payments. Equally, it is right to strengthen agri-environmental and rural development policies. These are important measures for preserving and enhancing the environment, helping meet biodiversity targets and dealing with any problems of desertification or rural unemployment, all of which are important considerations.

But we must not delude ourselves that the AGENDA 2000 reforms as they stand are sufficient to equip European agriculture to face the challenges of the next decade. The simple fact is that the average size of farm in the EU is 17.5 hectares and that is too small to give farmers a full time living from their land in the more open markets that will increasingly prevail. We should not base our policies on the delusion that sustainable agriculture can be built in Europe on such a base.

For this reason alone – and there are many others, I can assure you – the idea of imposing a Community-wide ceiling on CAP payments is a perverse nonsense. It is wholly at odds with the objective of creating competitive agriculture. I will strenuously oppose any ceiling or other modulation of aid which discriminates against British farmers.

We need a policy of reform that will encourage the development of our agriculture into a force capable of competing successfully in our own and world markets. This requires a level playing field and recognition that the most efficient farms are often quite large. We must avoid pursuing the chimera of an indefinable “European agricultural model” based on unviable farms that can only survive with ever increasing subsidy from taxpayers and consumers. If the CAP is to prepare European agriculture for a Union which includes Poland, Hungary and other Central European countries; if it is to prepare for a realistic outcome of the next WTO round; if it is to serve an agricultural industry that wants to remain a major force in the world, governments need to develop policies for the future and not be nostalgic about the past.

What does this mean in practice? First, support prices must be aligned with world prices as Franz Fischler has proposed. But this cannot be restricted to beef and some cereals. It is no less important to move to world prices for milk and sugar too. The fact that quotas apply to production of these products may mean that surpluses will accumulate less quickly. But if we keep our quotas we just surrender market share to our competitors in third countries. That cannot be in our farmers’ interests on any interpretation.

Second, we must recognise that farmers need clarity in policy making, like any businessmen operating in a long term industry. Farmers accept there is a need for reform. But once that reform is completed it should bring stability. That means the reform must properly address the pressures on the CAP so as to avoid the need for further reforms a few years later when the next WTO round is concluded.

Unfortunately, the AGENDA 2000 proposals make hardly any attempt to take account of the WTO round, or indeed the imminent enlargement of the EU. If they did, we would have an end date for milk quotas. The proposed compensation payments would be decoupled from production and be degressive. Failure to tackle these fundamental questions now, in this reform, will put the EU once again in a defensive position in the WTO negotiations, losing the opportunity to secure support for a sustainable long term policy which meets the real needs of our diverse rural areas. It will also leave the EU facing a second – and possibly much more painful – round of reform.

Failure to reform thoroughly now will also make the accession of the Central European countries very much more difficult. The objective of enlargement is to bring these countries, which suffered for so long under Communist rule, into the European democratic family. But forcing them to introduce milk quotas and sugar quotas, IACS forms and base areas and all the bureaucracy that goes with them will be reminiscent of the old command economy that they have so recently and painfully shaken off. Our contacts with Central European colleagues suggest that they are appalled at such a prospect.

Competitiveness is not just about the Common Agricultural Policy and modernising farm structure. Technology is also important for enabling farmers to produce high quality food at competitive prices, whilst protecting the environment.

An important factor in this is research. My department funds a very substantial research programme. A main theme of this is sustainability, including issues such as reduced inputs of pesticides and fertilisers, exploring the potential of bio-control systems, and the usefulness of buffer zones to protect freshwater fish and their habitats. This helps both to inform our policies and to help show farmers and environmentalists alike the options available for changes to present practice.

UK Presidency

I began by referring to the UK Presidency of the European Union which began 5 days ago. The government is determined to run an efficient, impartial Presidency. We strongly believe in the importance of the European Union and in Britain’s ability to play a constructive, leading role in it. I am determined that the work of the Agriculture Council, over which I will briefly preside, will illustrate this fully.

We will have a busy agenda, reflecting many of the themes I have touched upon. The top priority will be the launch of the negotiations on AGENDA 2000, comprising reform of no less than 6 commodity regimes (dairy, arable, beef, wine, olive oil and tobacco) and introduction of a reinforced agri-environmental and rural development policy. I do not expect to complete the reforms in our term. There will not be enough time for that. But when the Commission table their proposals, I shall give the negotiations a major push so that they are in good shape for the Austrians to carry forward when they take up the Presidency in July.

Secondly, I would like to use the UK presidency to make progress on proposals to improve animal welfare across the union. There exists a wide measure of support, particularly amongst Northern member states, for better animal welfare. We need to respond to that. I have asked Franz Fischler to table early proposals covering the welfare of hens in battery cages and the welfare of animals at slaughter, two key areas of public concern. I will give them high priority in the Council as soon as he brings forward detailed proposals.

Thirdly, we shall need to agree changes to the bananas regime to take account of the recent WTO ruling. Whilst this may be of less significance to many of you here than other elements of the CAP, I can assure you it is of critical importance to the banana producers in the small Caribbean countries whose economies could be wrecked if we cannot agree a new deal for them.

Fourthly, we shall have to agree the 1998 CAP price fixing, though I hope this will not take up too much time given that the important negotiations will be on the CAP reform dossiers. A central event of the Presidency will be the Informal Agriculture Council in May. I am very much looking forward to bringing Commissioner Fischler and all my Council colleagues to Northern England where I plan to show them some of the very best of British livestock farming. I want all of Europe to understand the immense efforts we and particularly you have made – and are making – to ensure the safety of British beef and to begin introducing systems of traceability and quality assurance which will stand comparison with the best in the world.

We shall have many other – less headline grabbing – dossiers to handle and no doubt some unforeseen problems in the Council. My aim will be to deal with all the issues in a fair, constructive and impartial way, as all our partners will expect.

British agriculture continues to demonstrate toughness and resilience. The ability to overcome current difficulties demands such qualities and more. It demands policies which work to develop genuinely sustainable farming economically and environmentally.

The prospect of change is always difficult to face, particularly at a time when incomes are squeezed and the impact of BSE is so debilitating. But British farmers have an excellent track record of responding to the challenge of change. And you have many natural advantages, including a relatively advanced farm structure and a strong asset base. The fact that you have responded so much more positively to the Commission’s reform ideas than have farming interests in other member states is a credit to you and your representatives, and your forward thinking. Those very qualities are the ones that will keep you ahead of the competition.

For my part, you may be assured of my determination to fight for British farming interests in the forthcoming negotiations in Brussels. I am committed to policies which will encourage you to succeed in increasingly competitive markets, to ensure a level playing field in Europe and in the rest of the world wherever possible, and to help restore the confidence of consumers that is so crucial to all your success.

Jack Cunningham – 1997 Labour Party Conference Speech

Below is the text of a speech made by the Minister of Agriculture, Fisheries and Food, Jack Cunningham, to the 1997 Labour Party conference in 1997.

British interests in Europe encompass agriculture, fisheries and food. Our ability to change the Common Agricultural Policy, ensure a sustainable future for our fishing industry, and provide safe, affordable, properly labelled food is determined by our standing in the European Union.

We inherited a shambles from the Tories on Europe – credibility and trust were at rock bottom. – the BSE crisis – the appalling consequences of new variant CJD, we express our deepest sympathy to the families who have lost loved ones, – the ban on British beef – the quota hopping fiasco in fishing.

The cost of this Tory incompetence runs to billions of pounds to taxpayers, industry, farmers and fishermen alike.

We have begun to turn things around by developing a constructive, open dialogue with the Commission, the Council of Ministers and the European Parliament. Progress has been made but much remains to be done.

Today I can announce the formal submission to the European Commission of a date based export scheme for British Beef. This we hope will operate in parallel with the Export Certified Herd Scheme.

We have started a dialogue with fishermen about creating a sustainable fishing industry for Britain. I want to thank in particular colleagues in the European Parliament and Neil Kinnock for their advice and support.

We said we would establish a new, more effective role for Britain in Europe and we have done so.

Reform too is necessary in the Ministry of Agriculture.

We have made a rapid start. I have put the health and well-being of people and the environment at the top of my agenda.

We have begun the establishment of a new independent food standards agency. Open consultation with everyone concerned is guiding the drafting of our White Paper. I expect the necessary legislation to follow next year.

We intend to rebuild people’s confidence in our food, through open debate, clearer, more informative labelling and more rigorous hygiene standards.

We have accepted and will implement the recommendations of the Pennington Report.

I shall appoint a consumer representative to every advisory committee.

New powers including custodial sentences available to the courts await anyone proved to have undermined Britain by illegally exporting British beef before the ban is lifted. If food plants persistently fall short of acceptable hygiene standards they will be closed.

We now have reform of the Common Agricultural Policy on the European agenda. Change is essential. The CAP wastes billions of pounds of European taxpayers’ money. It does not ensure a sustainable environment and results in higher food prices.

We are working to build coalitions for change which will benefit consumers, farmers and the environment.

Last week I was the first UK Minister of Agriculture ever to address the organic food conference of the Soil Association. I want to see resources from the CAP transferred to organic farming and to investment in rural enterprise.

We have made progress too for the first time having animals recognised as sentient beings in all future European legislation. We have introduced better controls for the welfare of animals in transit.

We are promoting the export of meat rather than livestock – more manifesto commitments delivered.

In Europe too we must find a solution to the WTO decision on the banana regime. Surely the powerful nations of the world can find a way to resolve this situation.

I shall do everything possible to meet our historic obligations to these people during my term as President of the Council of Agriculture Ministers and beyond.

In the Ministry of Agriculture we are delivering our manifesto commitments to the British people:

through a more open, redirected department

through strengthened consumer involvement

with a more productive relationship in Europe

by tackling reform of the CAP

by driving up food hygiene standards

by insisting on better animal welfare.

New Labour is the real party of the countryside. We now represent more rural constituencies than the Tories and the Liberals put together.

And I can make one further commitment today.

It is time to take a fresh look at our quarantine laws. I am therefore establishing an independent scientific assessment of all the alternatives. This discussion document is published today and a full public consultation will follow.

I want to create a department that can tackle the challenges of the new Millennium. To produce safe food and safeguard the environment for all our people. An open, accessible department which is trusted by consumers, environmentalists and farmers alike.

Charles Clarke – 2003 Speech on Secondary Education

Below is the text of a speech made by the then Education Secretary, Charles Clarke, on 10th February 2003.

Thank you for coming to this important event today. An important occasion for three reasons.

First, because today we are responding to head teachers of secondary schools who last autumn came to talk with us at a series of conferences. I and my Ministerial colleagues travelled pretty well the length and breadth of the country discussing with heads the challenges they faced and listening to their views on the reforms we were making.

The document we are publishing today takes on board much of what they told us.

A new relationship

This dialogue characterises the relationship we want to have with schools, heads and teachers. And that is the second reason why I see today as being important.

We are seeking to build a new relationship with schools, head teachers and governors. A relationship where schools have more freedom and flexibility in the way they use their resources, in the way they design the curriculum and in the teaching methods they use. But schools in turn recognise that they work within a framework where they are accountable for their standards and performance;

A relationship where we in Government recognise success and encourage successful schools, departments and teachers to innovate and lead change. But schools understand that the Government has a duty to intervene where there is serious underperformance or chronic failure.

A new specialist system

The third reason for today being significant is that it marks another big step in creating a new specialist system. A specialist system that is, I believe, starting to transform secondary education. A specialist system that encourages schools to build on their distinctiveness and strengths to benefit all pupils. A specialist system, which encourages diversity and where excellence is a spur to equality, not its enemy. A specialist system where every school has a clear focus on teaching and learning. A specialist system where every teacher is equipped both to teach their subject effectively and to inspire a desire to learn.

A specialist system is one in which every school has a centre of excellence, available to every pupil in the school and as a resource for other pupils in the area. Every pupil has an opportunity to develop their talent in an area in which they are keen to specialise. Every teacher is able to develop their own distinctive contribution to the school team, notably through their leadership of teaching and learning in a particular subject. A specialist system works by spreading the lessons from excellent provision across the school and across the system.

So a specialist system does NOT mean demanding schools only teach one subject. It does NOT mean that pupils will be asked to specialise early in their school careers. It does NOT mean every place in the school going to pupils according to aptitude – only a maximum of 10% can be selected on aptitude.

The two words, ‘specialist system’, are equally important: institutions will make a special contribution to their own pupils and to the system, and the system will add together a range of specialisms to provide an enriched educational experience for all children.

Where we are now

I start from the belief that every child is capable of attaining high standards. All children should leave school having achieved their potential. They should all acquire the knowledge, qualifications and life skills they need to succeed in the adult world.

Over the past six years we have been making steady progress towards these aims.

The percentage of children getting five or more GCSEs at grade A* to C has been steadily improving. The number of failing schools in “Special Measures” has fallen dramatically. And the quality of teaching and learning – according to the Chief Inspector’s latest annual report – is the best it has ever been, with 96% of lessons observed considered satisfactory or better.

But we know that there is still a long way to go.

Almost half of all pupils still do not leave school with five GCSEs A*-C. There is four times as much variation in pupil attainment within schools as there is between schools which indicates some teachers in the same school are more effective than others in helping their pupils make progress.

Some children and some groups of children are not being well served by the current system. For example, in the 2002 key stage 3 English tests, 76% of girls achieved level 5 or above compared to just 59% for boys. And, as the Chief Inspector highlighted last week, there are still too many schools where attendance and behaviour are serious problems.

This is not good enough. Not least because we know it need not be this way. We can see from many examples across the country that when schools are given encouragement and support, they can and do achieve great things for their schools and communities.

What some schools are achieving for some children, all schools must provide for all children. A new approach is necessary. And that is where a specialist system comes in.

Extending the specialist system

Specialist status provides an incentive for a school to develop its own character and mission. It acts as a spur to improve standards and aim for excellence, not just in one particular subject, but across the whole of the curriculum. Heads are able to use the additional investment to enhance their specialist facilities, to develop excellence in their specialist subjects and to extend the insight to teaching and learning in other parts of the curriculum.

The specialist system is also encouraging schools to innovate, address the diverse needs of individual pupils and work with their local communities.

And the results are starting to come through.

On measures of value-added performance, which allow comparisons to be made between schools with different pupil intakes, specialist schools are outperforming non-specialist schools. They are generating some genuinely innovative approaches to teaching and learning, to curriculum development, school organisation and workforce reform.

This is why I want every school to aspire to become a specialist school.

Today I am announcing a further 217 schools that will gain specialist status from September this year. This will bring the number of specialist schools we now have to 1,209 – 38 per cent of all secondary schools.

We have responded to head teachers’ concerns that funding limits might artificially restrict or hold back the designation of specialist schools and have lifted the funding cap. That means that every school that applies for specialist status and meets the standards will now be designated.

We expect there to be at least 2,000 specialist schools by 2006. And I say again, I want every school to aspire to becoming specialist.

New specialisms

As well as more specialist schools we are also increasing the range of specialisms so that they cover the whole range of the curriculum. The new specialisms will be in music and humanities – that is history, geography and English . And we are also enabling schools in rural areas to introduce a rural dimension into relevant specialisms – such as science or geography.

New schools

These changes will help make our secondary school system more diverse. And we will encourage that diversity in other ways too.

We will be setting up more Academies. Academies are new types of schools designed to raise standards in the most difficult and challenging areas. They are set up with substantial input from sponsors, who may come from business faith or voluntary groups. They provide £2 million or 20% of the capital cost and make up part of the school governing body. The Government funds the rest of the capital and covers the running costs. The first three Academies opened in September last year and another 30 will be up and running by 2006.

We are also making other changes that promote diversity. Last week we sent out draft guidance that will make it easier for popular schools to expand. The guidance also encourages new promoters and providers of schools to put forward proposals as we introduce competitions for all new schools. Parents’ groups could, for example, apply to set up a new school.


The individual ethos and specialism of a school is vital but the benefits of specialising are multiplied when schools collaborate and share their expertise and experience. The potential to build capacity for improvement is immense when schools collaborate to extend good practice, share specialist resources and expertise, and take collective responsibility for tackling poor performance.

Federations of schools are one way an increasing number of schools are choosing to work together. The Leading Edge Programme which I am announcing today is another.

Becoming a specialist school is the start not the end of a process of school improvement. That is why last autumn we invited schools to apply to become Advanced Schools. They had to demonstrate that they were high performers with a recognised specialism, working at the cutting edge of teaching and learning and with a track record of working with other schools to raise standards.

Over 300 schools have applied.

Head teachers told us that they supported the idea behind the programme but thought that the ‘Advanced School’ badge was unhelpful if we wanted to develop collaboration. They also said it was important to allow joint bids. We have acted on both their suggestions.

We will shortly announce the names of the successful applicants of what we are now calling The Leading Edge Programme and those schools not in receipt of the Leadership Incentive Grant will qualify for funding at a level of £60,000 per year to develop their expertise and work with other schools to lead transformation.

We will invite further applications later this year.

I have decided that part of this round of bids should include an invitation to Independent schools to participate in the programme – where they meet the criteria and are willing and able to work with schools in the maintained sector.

We are also going to consider how we can better recognise excellence of departments within schools. One possibility that many head teachers want us to look at is setting up a beacon department scheme.


Specialism and collaboration are vital. And I want them associated with innovation. I want to encourage all schools to extend the boundaries of current practice by developing new and innovative approaches to schooling.

One of the most interesting pages in this document is one describing how schools have more powers and more freedoms than they think they have – on pay and conditions, on the curriculum on governance and organising the schools day – and even on funding.

The Innovation Unit we have established is helping schools to take full use of these freedoms. And if and when schools do find that legal obstacles are getting in the way of innovative improvements to teaching and learning then they should not hesitate to apply to use the very wide ranging Power to Innovate. This will give them the authority they need to make the change.


Innovation often comes through inspirational head teachers instilling confidence and enthusiasm throughout a school. As in so many other areas school leadership is vital. Excellent leaders create excellent schools. Poor leaders rob pupils and teachers of the chance to excel. As David Bell of OFSTED said in his report last week: ‘Constantly effective teaching across all subjects in a school is unlikely without strong and effective leadership and management’.

That is why we set up the National College of School Leadership based on the campus of Nottingham University. And it is why we are investing significantly in programmes to strengthen leadership at all levels in secondary schools.

The Leadership Incentive Grant, for example, is designed to secure a transformation in the leadership and management of 1,400 secondary schools in cities and in other challenging circumstances. Most schools will receive £125,000 a year. Schools will be able to use this money to make joint appointments, pay for a strong head of department to help work with colleagues in a neighbouring school, to restructure or replace the management team or build up leadership skills.

Partnerships beyond the classroom

Helping children to learn is not a job just for schools and teachers. Parents and the wider community have a vital role to play.

I am in no doubt that parents’ encouragement and support for their own children, at home and through regular contact with school and teachers provides a strong foundation for children’s learning.

Schools have the responsibility to do more to help parents understand the study programmes their children are following. And they should seek to involve parents in the day-to-day life of the school, because where this happens it makes a powerful contribution to school development.

I also want schools to work better with their local communities. Schools that open up their facilities to community groups – by encouraging family learning, providing child care or health services or organising sporting activities – are doing much more than just making good use of local public facilties. They are putting the school at the heart of the local community and they are promoting learning in the community.

Schools in which parents and communities play an active part stand a far better chance of teaching pupils who are ready and willing to learn. That is why a community plan is an essential condition of becoming a specialist school.

It is also important to develop links with local employers, both to strengthen work-based learning but also to draw on their expertise, commitment ideas and energy. We ask schools to raise £50,000 sponsorship before they can achieve specialist status because we know that they if they have strong outside backing it cannot but help them grow and develop.

Strong partnerships will also help head teachers and schools tackle the problems of poor attendance and bad behaviour. And nationally we are giving a lead on this as well.

This year, for example, we are investing in Behaviour Improvement Projects in 34 local education authorities with the highest rates of truancy and street crime. We have reformed the way school exclusion panels work so that they provide greater support for head teachers. And we will be legislating to introduce new measures to tackle truancy and reinforce parental responsibility for ensuring children attend school.

Reform of the School Workforce

Teachers must be able to get on with the work they are trained to do unburdened by routine administration and with a skilled support team to back them up. In this next phase of raising standards we want teachers to be free to concentrate on teaching with adequate time to plan, review, give their students individualised learning and take good care of their own professional development.

Less than a month ago the Government, employers and all but one of the school workforce unions signed a national agreement that paves the way for radical reforms of the school workforce. The agreement is flexible. It allows school leaders and teachers to decide for themselves how best to reform their workplaces. It also includes expanded roles for high level support staff who will be trained to make a greater direct contribution to raising standards of pupil achievement.

Teaching and learning

Everything we are doing is designed with one aim in mind: to improve the quality of teaching and learning in our schools.

From key stage 3 to A level we must establish high expectations for all secondary pupils and promotes teaching and learning which engages and motivates them.

In order to achieve this we must make learning enjoyable. The world is changing. Information is communicated is so many different and visually exciting ways. The demands on young people are changing. So teaching needs to engage pupils’ enthusiasm and to stimulate them to go on learning in the future.

This is another area where we want to work with teachers on developing new ideas.

For example, writers, musicians and scientists and others from outside the school can play an important role.

We are working with teachers in the various subject associations to develop new ways of supporting teachers so that they are better able to communicate their passion for their subject. We all remember particular teachers who inspired in us a love for music, a passion for history, a life-long attachment to a particular author or who encouraged our scientific inquiry. That is the tradition we have to strengthen.

Part of that is to make the most of technology in teaching. For example, the electronic whiteboard – where used well – can transform the learning experience. We will work with the profession so that the experience of leading teachers and leading schools is quickly spread round the system.

In addition I have no doubt that ICT will increasingly extend learning beyond the classroom, through providing access in the home to teaching and learning materials and to assessment and attendance data.


I believe we are at a momentous point in the development of secondary education in this country. We are in a powerful position to move the whole system forward through a shared vision, a shared strategy and a shared commitment.

A shared vision based around excellent teaching to help realise the potential of every single child.

A shared strategy of creating a specialist system tailored to the needs of every pupil.

And a shared commitment from the Government and teachers to work together to make this happen.

Ken Clarke – 2011 Conservative Party Conference Speech


Below is the text of the speech made by the then Justice Minister, Ken Clarke, at the 2011 Conservative Party Conference on 4th October 2011.

I don’t know whether you remember, but at last year’s party conference, I called for regime change – regime change in our prisons.

To turn them from places of idleness, Into places of hard work and reform. Prisons with a purpose – straight from the manifesto.

The idea is to provide hard work in prison so that prisoners would be…

Doing something productive,

Instead of doing nothing.

Plotting a more honest future,

Instead of plotting their next crime.

Earning money to pay back to victims,

Instead of creating new victims.

It’s not rocket science and it can be done.

At Altcourse Prison near Liverpool, prisoners do forty hours of hard work every week in a metal workshop.

Part of their earnings goes to fund services for victims of crime.

And because these prisoners have got some skills, they are less likely – a lot less likely – to return to prison.

So the burden on the taxpayer, on you and me, is less.

I intend to expand this Working Prisons programme quite dramatically.

But this is not something Government can do alone.

No: We need the private sector on board.

And they are coming on board.

This morning, eight companies – including Virgin, National Grid, Marks and Spencer give the idea their support, in the FT.

They – along with the CBI – are helping us to ensure that companies can make the most of this..

..Are not disadvantaged or undercut.

I want to see hard work flourishing in every single jail in the UK.

More criminals doing an honest day’s work, instead of sitting idle in their cells.

That will make us safer.

Provide more money for victims.

Help us break the cycle of crime.


I believe if we want prison to work,

Then our prisoners have got to be working.


A brief note to my Labour opponent, Sadiq Khan:

That’s what you call a policy.

You probably won’t be able to remember any policy proposals he has put forward.

Because Labour hasn’t got any significant ones.

His proudest boast last week, was that he does not fall asleep during his Party Leader’s speeches –

That is an achievement, Sadiq.

Many people do go to sleep during Ed Miliband’s speeches.

But just remember this – he, like the rest of them, was a loyal supporter of Gordon Brown’s Government – the most disastrous Government, that left the most disastrous legacy since Labour in 1931.

They bequeathed us not just a broken economy, but a broken society and an unreformed Justice system that failed to break the cycle of crime.

They wasted billions of pounds on justice and prisons.

They were hyperactive:

21 Criminal Justice Acts in 13 years.


Headline chasing.

And you know what?

It was all a con.

They made prison sentences appear longer and longer,

Whilst devising all sorts of ways to let people out earlier and earlier.

…80,000 let out on early release…

I have legislation before Parliament

– being carried through by Crispin Blunt and Jonathan Djanogly – which aims to reform, simplify, scrap failed gimmicks and give us a system which works better to contribute to a safer, sounder and more honest society.


That’s how we are facing up to – and delivering – the great challenge we have as a Government…

…how to save taxpayers’ money whilst striving to repair our broken society.

Because Labour left us failed policies, a broken society..

And no money.

When it comes to public spending,

We’ve got to show leadership.

We’ve got to show purpose.

We’ve got to stick to our guns.

Frankly, if you look across the western world, most democratic politicians are out of their depth.

They cannot cope with the consequences of this dreadful crisis.

We are just about the only government in the Western world where people really think we are going to tackle the deficit.

People look at this coalition, they look at the spending plans and say – they’re going to deliver.

George and David are going to ensure that we do not waver in our commitment to reduce public spending and debt and they have my total support.

When you look at the scale of the economic crisis, I don’t believe we can possibly say…

… we’re not going to save money on criminals…

… but we are going to have reductions in spending on Police and Defence, on Transport and Local Government.

You can’t say that like the health sector, criminals are exempt from the cuts.

Every criminal we have in jail costs you and me about

£40,000 a year…

…and there are more than 80,000 of them in prison right now.

And I just do not believe that we can follow the old brain-free policy of throwing money at the problem.

That’s what Labour did.

And look where it got them. And all of us.


The most shocking reminder of how broken a society ours is.

In this summer’s riots, more than 75 per cent of the adults charged were repeat offenders.

1 in 4 of them had been convicted of ten crimes or more.

Re-offenders.  Career criminals.

…I had a few other choice words for them at the time…

Our feral underclass is too big, has been growing, and needs to be diminished.

Less crime, fewer criminals

The question for me and my ministry now, is how do we reform the Criminal Justice System so that these unreformed, recidivist criminals, are dealt with more effectively and at  less cost to the taxpayer.

That’s why we need prisons that work.

And prisons that are drug free.

Where problems like addiction and mental health are tackled properly.

Where the treatment doesn’t suddenly stop when prisoners leave jail, which usually happens with those on short sentences.

But continues in the outside world.

So that we are better protected.

If we want less crime, we need fewer criminals.

Policy & Ideas

This year, we have been carefully but quite rapidly developing the concept of Payment by Results –

A system which concentrates on only paying for what works.

And the first group of pilots is now underway.

One of them is at Doncaster Prison, a new contract run by Serco and a charity called Catch 22, which started on Saturday.

If they deliver law-abiding people back onto the streets, we will pay them. If they fail, and the ex-prisoners they take on reoffend, we will not pay.

There are twelve of these projects around the country.

Private or public, businesses and charities, paid for resolving the drugs, the lack of skills, the rootlessness which lies behind much of the reoffending.

Saving money and protecting the public;

Paying for what works.

British Justice

I believe that at its heart our British justice system is still one of the best in the world despite all Labour’s efforts.

…when people think of Britain, they think of British justice.

That is why so much of my last year has been spent returning common sense and proportion to a system which was badly let down by Labour…

We have policies under way to

– Resolve public doubts on the law of self defence by victims of crime

– Criminalise squatting

– Make community sentences more punitive and more effective

– Bring competition into the management of prisons

– Speed up the process of the courts and make them more witness, litigant and victim friendly

– Curtail the compensation culture and cut excessive spending on Legal Aid

– Scrap referral fees to end the culture of those ambulance-chasing claims advisors.


I have spent my entire political life being a vigorous, controversial reformer of public services – but this time it is different.

Now, I am in a coalition Government which is dealing with the worst economic crisis since the war.

People are insecure and sometimes a bit frightened.

We must give strong, confident and principled government.

How do you set about public reform in a difficult area like mine?

I’m reminded of Teddy Roosevelt: Speak softly and carry a big stick.

New Labour did the opposite.

They spoke toughly and carried a pea-shooter.

I never have mastered the speak softly bit, but the big stick has always appealed.

It’s no good politicians just sounding off and making tough gestures.

In office you’ve actually got to make a worthwhile difference.

That’s what you’re in office for.

Justice needs to be swift, firm and fair.

Prisons need to be places of retribution and places of reform.

Sounds obvious when you think about it.

Delivering the obvious is what the public want.

And most Governments do not deliver.

I remember Iain MacLeod thrilling me when I was a delegate here many years ago.

Others may dream their dreams, others may scheme their schemes but we have work to do.

Those appalling riots brought home to me again that in our broken society, we certainly have work to do at the Ministry of Justice.

And my team and I are proud to be getting on and doing it.

Give us your support.

Ken Clarke – 2010 Speech to Conservative Party Conference


Below is the text of the speech made by Ken Clarke to the Conservative Party conference speech on 5th October 2010.

As you know, I have been in a few Ministerial posts before and served in two or three previous Governments. I have never seen political and economic events of the kind we have now.

We have the worst economic crisis in my lifetime. We have a political system which has lost the confidence of the public after years of spin, sleaze and lightweight Government.

And we have a social crisis. All the problems we are so familiar with – drugs and debt and family breakdown – and worst of all, the subject Theresa and I are responsible for in this Government: crime.

These crises have at least one common cause. New Labour.

New Labour was all spin and no substance – campaigning and no principle.  We now have to sort out the disgraceful waste that is their legacy. Our first duty is to reduce public spending, cut the deficit and get the economy on its feet again. I am, and I remain, an advocate and whole-hearted supporter of the strategy that George Osborne set out yesterday. But we are not mere cutters. We cut because New Labour left us no choice. But we will define our Government not by our competence as financial managers, but by our political beliefs.

Any fool can just lop percentages off every item of his budget. I do not want to carry on doing what Labour was doing and just spend less money on it. We have to do this better. We have got to be the radical, reforming, improving government this country needs so badly. For me it’s personal. I am a deficit hawk.

When I was Chancellor of the Exchequer I cut spending and I cut the budget deficit to promote economic growth, and it worked. But I am also proud to call myself a reformer. I passionately want to see reforms that will improve our public services, in health, education, welfare and justice – alongside the necessary action to cut the deficit.

Let me start with the reductions in spending. The first thing I did when I walked into the Ministry of Justice in May was order a review of the department’s own administration. You’ll see the results of that in a few weeks’ time. My intention is that the biggest single reduction in spending at the Ministry of Justice will be in the running costs of the Department – from the headquarters to the edges.

And when you sort out the spending you can start to sort out the service itself. From long, painful experience, I can tell you: to throw money without reform at any public service is useless.

The only money my Department will spend is money combined with well-judged change to improve the protection against crime we must give – to society, and to the victims of crime.

We will go back to first principles. Ask what it is that the taxpayer should be paying for.

Let me be clear about what I have always said and always believed about crime and punishment.

For serious criminals, prison is the best and only sentence. It is the punishment for serious crime that society expects and accepts. Career criminals and violent, dangerous criminals should be in prison – not roaming our streets.


But prison needs to do more than keep criminals off the streets. It must try to prevent them from committing more crime against more victims when they come out. The biggest failure of the present system is reoffending. Nearly half the people in prison come straight back out and commit another crime in less than twelve months. Absurd.

Under New Labour, we had an underclass of people in our broken society who walked out of jail and straight back into crime, again and again. Fifty three thousand criminals were jailed for six months or less in 2008. Nearly two thirds of them committed another crime within the next year and were sent straight back to prison again. And that was only the ones who were caught and convicted again.  Thousands of further crimes against new victims. Quite absurd.

We said we were going to tackle that when we were in Opposition. We called it a Rehabilitation Revolution – Prisons with a Purpose. It was a Conservative election policy, not a Liberal Democrat one.

And what about my tough talking New Labour predecessors.  Were they on top of the problem?

They certainly tried to sound like they were.

They tried to sound tougher and tougher – outflanking the noisiest man at the bar of the Dog and Duck. But it didn’t seem to bother them that for all the cash they threw at the problem of crime and punishment they did nothing to reduce reoffending.

What happened instead?  This is a Department of Government that really exploded. The number of prisoners grew by more than a third under Labour. Spending on prisons went up by the same amount – a third in real terms. Probation costs shot up sixty per cent. And the rate of reoffending – the new crimes committed against new victims by prisoners recently released – well of course that went up too.

And they were reduced to the absurdity of releasing thousands of prisoners early before they had finished their sentence. What a waste. What a failure.


We can’t go on like this. We need reform that is radical and realistic. Reform focused on results, not processes, not spin doctor headlines.

My aim is to make prisons tougher places of hard work and reform for the criminals who should be locked up;

Make community sentences that really are tougher and more effective for those who don’t need to be locked up;

And cut crime creation out of the criminal justice system by paying by results organisations and investors who actually succeed in reducing reoffending.


Let’s start with prisons.  We need, in my opinion, to instill in our jails, a regime of hard work. Most prisoners lead a life of enforced, bored idleness, where even getting out of bed is optional.

If we want to reduce the crimes these people will commit when they get out, we need as many as possible to get used to working hard for regular working hours. The ones prepared to make an effort need new opportunities to learn a trade. We have to try to get those with the backbone to go straight, to handle a life without crime when they have finished their punishment.

So we will make it easier for Prison Governors to bring more private companies into jails to create well-run businesses employing prisoners in 9 to 5 jobs.  There are already some excellent examples to build on. Timpsons, who train up prisoners to work in their national network of shops.

The National Grid and Cisco Systems also go into prisons to offer training and the prospect of a job and a life away from crime at the end of the sentence. I hope to see many, many more companies like these stepping in and offering their expertise to organise productive industries in many of our prisons.

And I want to revive a policy that I was always keen on in John Major’s last Conservative government. Making deductions from the earnings of working prisoners to provide restitution for the victims of crime.

Do not worry.  I have not become some woolly-minded idealist since I was last a reforming Minister.

I am under no illusions about the British criminal class – I met plenty of them during my time at the Criminal Bar. As well as a few since.

I’ve never been in favour of mollycoddling criminals. Dangerous offenders must always, and will always be punished with prison. But let us not deceive ourselves that the previous Government left 85,000 serious gangsters in prison, that our prisons are only populated by muggers, burglars and violent and dangerous individuals. We have 11,000 foreign prisoners in our jails. Our prisons contain thousands of anti-social petty criminals who fail to behave themselves in everyday life.  Almost half are illiterate or innumerate. Almost half are mentally ill. The majority have a history of drug abuse.  Sadly, far too many are former members of our armed services.  Drifting along in lives of crime which their victims pay for over and over again. Too many go into prison without a serious drug problem and come out addicts. Ready, desperate, to commit more crimes to feed their habit. We have to do better than this.

We are working on plans to produce drug free wings in prisons to start to stamp out this drugs menace.

We need radical, realistic reform.  If we want to be safer in our homes, knowing we’re less likely to be burgled… If we want our children to be able to walk home safely from school… Then we have to get sentencing policy right. That is why, as part of the sentencing review which will be published as a Green Paper later in the Autumn, we will look again at how we treat offenders who might be prevented from committing more crimes as soon as they are released.

Under New Labour, there weren’t enough tough, demanding punishment options for judges.

We have a real job on our hands to give judges those options. To improve punitive alternatives to prison. I do understand what the problem is with so-called Community Sentences.  The public don’t think   they’re tough enough.  Judges and Magistrates aren’t confident that they’re tough enough.  Well let me tell you that I have never thought that they were tough enough.  The answer to that cannot be to give up.  It must be to make community sentences as tough, respected and effective as they are in countries like France and Germany.

When we consider how to reduce re-offending by rehabilitating released prisoners or providing tougher community sentences, I am interested in one thing – what works.  Value for taxpayers money is best achieved by paying – not for good intentions – but for results.


We will pay for fewer crimes. Fewer victims.

We can challenge the independent sector, charities, voluntary bodies, the private sector and the public services. You develop schemes that do cut reoffending, in prison or in the community, and we’ll pay you to do it – if, and when it works.

And the more new schemes that produce results, the more we can be sure that taxpayers’ cash is being spent on things that actually work.

The well-intentioned, interesting, theoretical idea with no outcome will simply melt away.

Last month we launched the first of our projects of this kind – in Peterborough. Run by a company called Social Finance, it will be paid for to the extent that it succeeds in preventing offenders from committing more crimes against yet more victims when they are let out of Peterborough prison.

I visited the Peterborough project and I’ve seen how it can work. I’m an enthusiast. So I can tell you today that we will be starting up a range of similar schemes in England and Wales in the New Year. We will look at bids from serious groups who want to take whatever approach they believe in – from boot camps to more therapeutic options. And the taxpayer will pay for – what works and what cuts crime.

Radical, realistic reform that will cut crime and do it in a way that shows real value for money for the taxpayer.


I believe history will remember the Cameron coalition Government as radical and reforming.

We have inherited a disgraceful crisis, bequeathed to us by a discredited party that with any justice will need years to change itself before it will be considered fit for office again.

I remember the 1979 leadership campaign…I’ve served in Governments before.  I’ve never served in one facing a crisis on this scale. I’ve served in Governments that started well. But I’ve never served in one that’s started better than this.

I am quite delighted to be in this coalition government which is remarkable in its unity, determination and purpose.

After the election David Cameron and Nick Clegg responded to events with vision and speed.  This Government is delivering the strong and stable government the national interest demands.

Had we failed to form a Coalition it would have been a disgraceful dereliction of duty. We are proving that politicians can set aside party political battles when the national interest demands it.

Once more it is a Conservative Prime Minister, with the political will to put the national interest first, whose fate it is to inherit a poisoned Labour legacy.

And if we continue as we have started, we are up to the challenge. David Cameron will provide the leadership this country needs.

We will provide the support he needs.

Together we will return this country to economic stability and growth. To 21st century quality public services we can afford.

And to a global reputation for the civilised and responsible Government that our Conservative Party has always stood for.

Ken Clarke – 2009 Conservative Party Conference Speech


Below is the text of the speech made by Ken Clarke on 6th October 2009 at the 2009 Conservative Party Conference.

I have done this a few times before – and I still enjoy it. Those who have followed my political career from afar and those who know me well will probably agree that I am not one of nature’s pessimists. I am trying to delay becoming a grumpy old man. I am also a realist.

And it is the realist in me that says we are set to take over the biggest mess that a Conservative Party has ever inherited from a Labour government.

It is amazingly true that Labour always winds up leaving behind an economic disaster. It has happened every time since the war. But this is far, far worse. It’s worse even than Margaret was confronted with in 1979.

So yet again it is our duty to repair the damage after those years of recklessness, and prepare the UK for a better future.

A lot of that work is economic. Above all the sound management of the public finances, which George and Philip spoke about this morning.

No-one believes Alistair Darling when he talks of halving the public debt in four years.

Gordon Brown wants to introduce a new law to make it illegal for Alistair to be as irresponsible as he, Gordon Brown was when he was Chancellor. What useless gesture politics.

Past sinners promise that they will be prosecuted in future if they sin again. George Osborne’s strong sensible policies on tax and spending and debt will be necessary – but will not be enough on their own.

Our debt crisis is not only the result of reckless spending. It is also the fall of tax income. A crazy financial bubble brought big fluffy tax takes into the Treasury. Gordon Brown spent it all in full – then borrowed more on top.

Now tax revenues from corporation tax to fat cat income tax have fallen off a cliff because the City, banks and business all crashed into recession.

Spending has gone up. Tax revenue has gone down. Result – colossal and mounting debt.

George has boldly and correctly declared the need for spending cuts. He also needs revenue. We need successful business to create wealth, jobs and economic growth – and profits from which to pay taxes.

I have been through more public spending rounds than most people have had hot dinners. I admire George Osborne and Philip Hammond and I completely trust them to succeed at that task. They have the hard bit of the problem. I and my team have the fun bit – getting the climate right for the best of British business to succeed again and to create the wealth and security for future generations.


New Labour has been a burden and a handicap on business that we can no longer afford. The world of New Labour is more bureaucratic than anything we have ever known. An over-powerful executive, bigger government, an ungovernable bureaucracy. We all feel it in our daily lives. Businesses, in particular small businesses, face far more than their fair share of it.

How much does it cost? Estimates vary. Everyone agrees it is a great and still growing burden. For our entrepreneurs it is not just money, it is wasted time.

The Federation of Small Businesses says its members now spend on average seven hours a week on official form-filling and red tape of one kind or another. The people who run the health service, education and the police would tell you the same.

To get Britain back in business, the excessive regulation that businesses – and the great public services – face has to be swept away. Managers should not have to deal with excessive regulations, countless government quangos and too many inspectors of one kind or another, when they ought to be getting on with making their businesses survive and grow, their public services improve and creating new secure jobs .


The instinctive dislike that we Conservatives feel for excessive bureaucracy is anathema to Labour. One thing New Labour never lost was the idea that the gentleman in Whitehall knows best. Socialists thought, and New Labour still thinks, that politics and government have the answer to everything. They can’t hold themselves back from wishing to have a policy on this, an initiative on that, a public protection intervention of one sort or another. Whenever we have a Labour government, government just gets bigger.

I don’t think any of this regulation, bureaucracy or legalism was ever introduced for malicious motives. The well-meaning nanny state is at the very heart of this system. A sort of puritan belief that everything can be so perfected that no risk of any kind is ever going to be taken. Parliament churns out legislation like a sausage machine. The tax code is twice as long and complicated as it was in my day. And British life and British business suffer.


We are publishing today a paper which was outlined earlier by John Penrose, which sets out our plans to win the battle against red tape. We need to protect the highest standards of health, safety, fair trading and honesty in business life. We are not going to lower standards. We do not need mountains of forms, thousands of non-jobs, hundreds of quangos in gleaming office blocks to achieve that. Regulations based on achieving outcomes rather than just blindly following box-ticking procedure, will actually work better.

John Penrose’s paper sets it all out. It is solid policy. It is a worthwhile read. We will introduce a system of regulatory budgets across government, that means that no new red tape will be introduced without a compensating cut in the costs and burden somewhere else. We will give each regulator and quango a ‘sunset clause’. That means they will automatically cease to exist after a set period unless they can prove their continuing usefulness. Finally, we will create a stronger and more assertive Parliament which can scrutinise new laws more effectively. We need better laws not just more laws.


This part of our policy passes my favourite test for economic policy making.

I’ve always thought that the most important job of the Business Ministry – and the Treasury come to that – is to make it easier for the small businessman in the Midlands to make his living, to produce a bit of prosperity and create some jobs. That was a guiding principle I often stated when I was Chancellor. It should be our guiding light now.

The question ministers must ask themselves is – are we making it easier for that businessman or businesswoman to thrive or not? And half the time, as they will tell you, this government’s getting in the way.

We are in the final stages of developing policies in many other areas. To plug the gaps in the venture capital market. To provide more apprenticeships and training opportunities. To develop our science and engineering. With James Dyson’s help, to ensure that our innovations in science and engineering are translated into businesses, services and employment in this country and not lured away by better business conditions for enterprise abroad.

Today – Deregulation. We will have to strive to provide the right environment for businesses, large and small, to grow. For if you succeed on that score, you provide the growth, the tax revenues, the jobs and prosperity which come with it. That is how to get out of trouble. Britain must be open for business again.


We need big British business as well. Big business needs to work with government in different ways. It needs government alongside it in markets across the world, where there is a political content in marketing. There are plenty of countries in the world where the government has got to be supportive to enable its own businesses to be in with a shout.

We don’t believe that Government can create national champions but those that emerge become our national champions, and we take pride in them. Some modern businesses require multinational scale, to be a success and take their fair share of the jobs and the prosperity that come from great new industries.

The UK’s future depends on these great industries – increasingly in new areas like high technology manufacturing and the creative industries. That means rebalancing our economy away from dangerous over-dependence on areas like financial services.

Try telling business people or politicians from the States, Germany or Japan, that you can have a successful wealthy economy without having any manufacturing. Only the British came to believe that. In 12 years of Labour Government, the number of manufacturing jobs in Britain has dropped by more than a third. We have paid for the error. Britain has to make things again.


The future lies in nurturing high-added value, technologically advanced, scientifically innovative, well-managed, aggressively marketed companies. Providing our young people with all the skills and the ability to contribute to those fields.

That is the mission on which all our team was focused when we presented Get Britain Working yesterday.


If an individual who wants to develop his own business can’t feel the Conservative Party is a friend, what exactly are we about as a centre right party?

If we say we all believe in free market economics then aren’t small businesses the best manifestation of the best qualities of free market economics?

If we want to have social mobility – and we do – have more small business.

If we want to have a less bureaucratic society, have more small business.

If we want to create jobs, have more small business.

Can we leave it to Brown and Mandelson? Led by David Cameron and George Osborne we need to do it ourselves.

Peter Mandelson displayed theatrical talents which we never suspected last week. From next May onwards he could have a future on the stage – and not just as a pantomime villain. He said I sometimes agree with him.

Yes I did – responsibly and in the national interest – agree with him on the future of Royal Mail. We agreed with him when he took his Bill through the House of Lords. And what happened? That weak and dithering Prime Minister – Gordon Brown – has stopped him bringing his Bill into the House of Commons.

Peter Mandelson’s boldest policy is now a symbol of paralysed indecision while the Royal Mail slips into insolvency and strikes.

So where has Peter Mandelson made his biggest mark on British politics so far? Ironically he is the man who saved Gordon Brown from the incompetent plotters in the Labour Party who were trying to overthrow him twelve months ago. That was the whole point of the Mandelson come-back. But for Peter Mandelson, Britain would have thrown off the burden of Brown as Prime Minister. Why, oh why did you do that Peter?

Gordon Brown contributed to the global crash by his failed reforms of bank regulation and his reckless Government borrowing.

Brown denied the crisis was here when it first hit us.

Brown denied that debt was a problem or that any of his spending and borrowing was unaffordable.

Brown was denying the need for any cuts at all in public spending or borrowing until only a few weeks ago.

For Britain, Gordon Brown is and was a large part of the problem – he can play no part in the answer.

So, as one comeback kid to another, Peter, why did you save Gordon Brown for the nation? The nation is not grateful.

And what is Gordon Brown’s main legacy going to be to the people of Britain? A terrible surge in unemployment.

Who would have thought it – that a Labour Government – a Labour Government – would ever preside over the biggest rise in unemployment in a single quarter since records began. Would Nye Bevan ever have imagined that twelve years of Labour Government would end with one in five young people under the age of 24 unemployed? That is the legacy for real people of Gordon Brown.

When I first started coming to this Conference – a long time ago – my great hero was a man called Iain Macleod.

Iain is, alas, little remembered now – he died in 11 Downing Street after a few weeks only as Chancellor of the Exchequer.

I can remember him charging the Party Conference with a striking phrase.

Labour was about to leave an economic mess behind to a Conservative Government. A mess it was but Iain could never have imagined an economic catastrophe as bad as the legacy that New Labour will leave to us.

Macleod said “Labour may scheme their schemes, Liberals may dream their dreams, but we have work to do”.

Mandelson is a schemer. Clegg is a dreamer, Cameron and Osborne are highly intelligent decent young politicians who have what it takes to do the work. And you and I still have the work to do to put them into Downing Street to lead our country to future economic security and success – to make Britain a decent place to trade and do business again.

Ken Clarke – 2005 Conservative Party Conference Speech


Below is the speech made by Ken Clarke at the 2005 Conservative Party Conference on 4th October 2005.

I do not know about you, but I am fed up with our party losing elections.

We used to be members of a party that won elections. In fact, we won so many that we were able to change the political and economic landscape of this country

hugely for the better. In the 21st century, we can and we must do this again.

If you are sometimes fed up and angry with our plight – as I am – you have a choice. You can give up, bail out, and call it a day. Or you can get stuck in, decide to fight, and give it your all. That is what I intend to do – and I know it is what you intend to do.

So we come here today as a party with a purpose. It is to begin a great endeavour – nothing less than to make our Conservative Party once again the natural party of government in this country.

In winning power, the economy will always be at the heart of the debate, and rightly so.

You can have marvellous policies on every other subject, but if you do not win the argument on the economy, you are sunk. You are left with a political doughnut with an enormous hole in the middle.

I do not have to prove my economic competence to the British public. I won my reputation over four years as Chancellor.

Remember the strong economy which Labour inherited from us in 1997: low inflation; steady growth; falling debt. We were creating a modern enterprise economy.

We worked for it. We achieved it. Labour has profited from it.

Up until now, Gordon Brown has had a good run, on the back of the tough decisions which we took a decade ago.

But today the British economy is at risk. At risk from big spending, from high taxes and from too much debt.

He’s already spending tomorrow’s taxes today. He is keeping the economy afloat on a sea of debt.

Growth is slowing rapidly and unemployment is on the rise. Families across the country find themselves burdened with a trillion pounds of household debt.

Consumers are cutting their spending and our retailers are feeling the pain.

Initially Mr Brown was in denial. Now even he has finally admitted that his forecasts for economic growth were wildly optimistic – as every expert said.

His “golden rule” turned out to be fool’s gold.

He even had to change the starting date of the economic cycle to include the two years of surplus that he only achieved by sticking to my spending figures when

Labour came to power. I suppose you might call it a compliment.

The tragedy is that Gordon Brown could have done great things with our inheritance. But he’s blown it. He has turned out to be just another tax and spend Labour Chancellor, but on a lucky streak.

No wonder he is anxious to move next door!

In fact, I have never seen a man more impatient to leave his job. His office is all packed up. The good-bye drinks are in the diary. He knows where he wants to hang his pictures in Number 10.

The only problem is – the boss won’t budge. But even if he does, there’s no escape. Brown’s legacy will haunt him; we’ll make sure of that.

The fact is that the Labour Party has never really understood how a modern, successful market economy works. They just don’t get it.

Where our instinct, as Tories, is to set the people free, theirs is to organise, regulate and control. It is in their very blood-stream.

I say this: Let us never, ever allow the achievements of the Thatcher years to be thrown away. To be salami sliced – Labour slice, by Labour slice – until there is nothing left.

The corner-stone of our prosperity, and the key aim of our years in power, has to be the rebuilding of an enterprise culture in Britain.

We have to fight and win a new battle of ideas in favour of better but smaller government in the 21st century. That is the best way of making Britain prosperous and free.

When we left power, we had almost succeeded in getting public expenditure down to 40 per cent of our economy. I cut the share of national income spent by government by 2.5 per cent. It may not sound a lot, but it’s a huge amount of money.

This 40 per cent target – the key to stopping the remorseless growth of government in the modern world – should once again be our goal. If the Government takes 40 per cent, the rest is available for our entrepreneurs to create wealth and jobs.

Since we left power, taxes in Britain have risen and become far too complicated. Of course a Conservative government will aim to reduce and simplify our taxes.

But this will not be easy. When it comes to tax, like many things, it is better to under-promise and over-perform. But the direction we want to move in should be clear – and we should stick to it.

I am the only person in today’s House of Commons ever to have made real reductions in income tax: I cut 2p off the basic rate.

When Gordon Brown shaved a penny off, he quickly slapped it back on National Insurance. His reduction was cosmetic; my cuts were for real. That’s the difference between Conservative and Labour.

Anyone in this hall who does not believe in a low-tax economy has come to the wrong party conference. In government, there will be work to be done to achieve that.

Low taxation will be the prize but only if we first reduce debt and control spending. We demonstrate all over again that it is possible to have modern public services and still keep growth of public spending below the growth of the real economy. That is the art of good government in the modern world. It is the art all good Conservatives have mastered.

The economic management of the fourth largest economy in the world is an enormous responsibility which the Conservative Party wants to take up again.

When we take over, we will find that the books have been cooked by New Labour.

We will have to produce the first honest public accounts that Britain has had for many years before we discover the true extent of the problems we face.

We must prove that we have the competence and the courage to deliver economic success. Labour has always left economic failure behind them. They are going to do it again. It will fall to us to once again to pick up the pieces and enable Britain to remain a strong economic power in the modern world.

This is the third party conference in three weeks with a leadership contest.

Charles Kennedy just hung on – that is good news.

Labour’s two big beasts yet again locked horns over when one should hand over the baton to the other. I would not put those two in a relay team!

We Conservatives now have to choose an even bigger beast than either of them – to push Labour out of office at the next general election and return us to government.

I do not just want us to win the next general election so we can set Britain on the right economic road again. I want us to win because of the damage that I believe Tony Blair and New Labour are doing to the way we are governed.

I believe that New Labour has undermined the health of our democracy.

They have abandoned the proper processes of Cabinet government.

They have turned the great Secretaries of State into the lackeys of Downing Street.

They have doubled the number of political advisers.

They have changed the rules so that those advisers can now invent policies and bully civil servants about.

They have treated Parliament with a mixture of indifference and contempt.

They have sidelined local government and created a proliferation of quangos.

Their obsession with press headlines and media moments has taken over our political system.

Much of our problem as a party is that people do not trust us. It is not that they do not trust us because we are Conservatives. They do not trust us because we are politicians.

We must show that we are different politicians who believe in Cabinet Government, accountability to Parliament, an independent civil service and who aspire to be the servants of the people and not their masters nor their deceivers.

Mr Brown is now putting it about that things will be different if he makes it to No. 10.

Fat chance! A Brown government will be control-freakery elevated into a principle of Government. There is no Minister more obsessed with personal control of every corner of government than Mr Brown. There is no Minister who has been more dismissive of his colleagues and his officials. There is no Minister who worries more about what the headline will be in tomorrow’s papers.

I would not dare say that Gordon Brown is “psychologically flawed”. I leave that sort of thing to No. 10. I do say that Mr Brown is a team player – who believes in a team of one.

He will seek to run every part of government with the same compulsion to intervene he has shown as Chancellor. And when it all goes wrong, he will simply try to blame someone else.

With Mr Blair we have had a president; with Mr Brown we are going to have an emperor. We must make sure that this would-be Napoleon meets his Waterloo.

As Conservatives, we have a strong set of values in which we deeply believe: strong defence, low taxation, smarter and honest government, market economics, law and order, the family.

Our philosophy is rooted in the tolerant instincts of the British people. It places its faith in the individualism and civic energy of our citizens.

These are my values and always have been and they are our values as a party. I believe they are values shared by a clear majority of our fellow citizens.

Tony Blair has tried to steal some of our principles and our policies – against the instincts of his own party. He has been a huge political cuckoo sitting right in the middle of our nest.

Gordon Brown told the Labour Conference that they were going to dominate the centre ground. Oh no, they are not! The time has come to take back the political ground that should be ours. It’s time to start winning again.

David Willetts keeps telling us that we will all need to work harder and retire later. I am determined to do my bit.

I have put in a job application for a new, rather demanding job this December.

That job will be to lead this party back to power and to lead this country into a better, more confident future.

I may not be everyone’s cup of tea, but I promise you this. If you give me the chance to lead this party, I will lead it unspun. I will say what I think, and try to do what I say, as I have always done in politics.

The question we have to answer is: do we really want to win?

When I ask myself why do I fight to get re-elected to Parliament again, why do I hurl myself upon the spears of yet another leadership election, why do I tangle daily with the media and still feel the same tingle of excitement that I did when I first started my political career? It is because I want Conservative values to win again and, with you, to return to our task of making this country an even better place to live in.

Fellow Conservatives, let us win together.

Ken Clarke – 1996 Budget Statement


Below is the text of the 1996 Budget Statement made by Ken Clarke, the then Chancellor of the Exchequer, in the House of Commons.


Mr Deputy Speaker, the British economy is today prosperous and successful. This Budget will make it even more prosperous and an even bigger success over the coming years.

When I presented my first Budget in 1993, it was against a very different background from today. Although the recovery had begun, consumer confidence had not yet returned. Growth was not yet firmly established. Further firm action was needed on the public finances, and our critics were peddling doom and gloom.

The recovery is now in its fifth year. Consumer confidence has returned and we are achieving something unprecedented for a generation – growth with low inflation and without a widening trade gap. But one thing has not changed – our critics still peddle doom and gloom.

In my first two Budgets I curbed the growth of public spending and took firm decisions on tax, which have brought borrowing down by almost half since 1993.

Last year, in my third Budget, I was able to return to cutting tax while spending more on the public services which people care about most – health, schools and the police – and keeping borrowing on a firm downward path.

This year, I am presenting a Budget which builds on my last three. It reduces public spending plans further, while providing more money for priority services. It makes responsible progress on our tax cutting agenda, while getting borrowing down faster. This is not a reckless Budget on tax or spending. In the run up to Christmas I am not going to play Santa Claus, but this year I do not have to play Scrooge either.

I have one overriding aim – the lasting health of the British economy. We are securing that by creating the best conditions for British businesses and British men and women to earn a living. All my Budgets and all my policies have been designed to set this country on course to be the strongest industrial economy in Western Europe in years to come.


The British economy is in its fifth successive year of steady, healthy economic growth, with falling unemployment and low inflation.

These are the best circumstances we have faced for a generation.

This is a Rolls Royce recovery – built to last.

The IMF and the OECD expect the UK to be the fastest growing major European economy again next year.

By next year we will have grown faster than either France or Germany for 5 years in succession for the the first time in half a century.

This time – unlike so many previous recoveries – healthy growth has been accompanied by the best inflation performance for nearly 50 years. And restrained growth of earnings has been good news for jobs.

The British labour market has become our flexible friend. Employment began to rise sooner and unemployment began to fall sooner than in the previous recovery. Growth creates jobs quicker in a flexible labour market.

The OECD have praised us for having one of the least regulated labour markets in the industrialised world. High social overheads, minimum wages and unnecessary legislation do not protect workers – they cost jobs. Unemployment is still rising in France and Germany. It has fallen sharply here, to its lowest levels for over 5 1/2 years.

In the bad old days recoveries were derailed by balance of payments crises. In this recovery, the current account has actually improved, despite the slowdown in our main European markets. In fact we now have a current account broadly in balance – our best overall trading performance for nearly 10 years.

Economic policy

Mr Deputy Speaker, I want to ask the British people – in the years ahead do we seriously want to be prosperous? I think we do. If so, we need an economic policy aimed at the next 5 years, not just at the next 5 months. We want an economic policy that will go on delivering our enviable combination of rising prosperity, low inflation and more jobs. That is my purpose in this Budget. This Budget secures a prosperous future for all sections of our people and their families. It is a Budget not just for today but for tomorrow. This is a sensible Budget for growing prosperity.

The last thing the British economy needs now is a change of direction.

We need at least another 5 years of this Government’s continuous vigilance on inflation.

We need more of this Government’s determination to get government borrowing down.

We need another 5 years of this Government’s commitment to raise the wealth-creating potential of the British economy, by improving incentives, reducing the role of the State and creating a climate for enterprise.


I expect the British economy to grow by 2 1/2 per cent this year and 3 1/2 per cent next year – and there are few serious commentators who will disagree with that.

By keeping a close eye on the prospects for inflation up to 2 years out, and by taking sensible early action if and when necessary, I intend to ensure that healthy growth continues without inflationary pressures emerging. That is what I have always promised – no return to boom and bust.

Consumer spending

I expect consumers’ expenditure to continue to be the main engine of growth next year. The real value of take home pay is growing strongly.

The housing market recovery is firmly established. I hope that negative equity can soon be consigned to the economic history books.

People are feeling the improvement in their family finances. Consumer confidence is at its highest levels for over 8 years.

I expect consumer spending to grow by 3 per cent in 1996 as a whole. But it has been strengthening through the year. I expect stronger growth to continue, with consumers’ expenditure rising by over 4 per cent next year.


But this recovery is not just about a more confident consumer. Businesses are optimistic too. The climate for business is excellent: strong demand at home and a recovery in our key export markets present British industry and commerce with tremendous opportunities.

Interest rates and tax rates remain low and profitability is high. The result has been business investment growth of 6 per cent so far this year. I expect business investment to continue to grow strongly: by almost 10 per cent next year.

These excellent conditions for business are not lost on overseas companies looking to invest for the future. Let us never forget the most valuable practical endorsement that we get for our sound economic policies. The United Kingdom remains the No.1 destination for inward investment into the European Union. Keeping our enterprise economy on course at the heart of Europe will keep us in pole position.


Exports have grown by almost 20 per cent over the last 2 years – an impressive performance in the face of weak demand in our key European markets. This achievement is down to our strong cost conscious British exporters. They will benefit further next year as the tentative recovery on the continent becomes more established. I expect export volumes to rise by over 7 per cent this year and 6 per cent next year.

The current account has been close to balance during the last 2 1/2 years, thanks to strong growth in exports and income from our investments overseas. I expect the current account to remain broadly in balance this year and next.


Our thriving economy is creating jobs. Employment has risen by over 3/4 million since the recovery began. Unemployment has fallen by almost a million from its peak. It will soon drop through the 2 million mark. This is still too high and I want it to go on falling and I expect it to go on falling.


We are on course to get underlying inflation down to our target of 2 1/2 per cent or less and to keep it there. In October, underlying inflation rose slightly, to just over 3 per cent. This should not have surprised anybody who looked at last year’s statistics. It is a temporary and inevitable reflection of the exceptional falls in the price level 12 months before.

Let me give you my concrete reasons for being so confident about low inflation. Apart from oil prices, which have risen sharply, commodity prices are steady and are not putting upward pressure on inflation. Earnings growth remains sensible and modest. Producer price inflation – a good indicator of what is in the pipeline for retail price inflation – is at its lowest levels since the 1960s. Producer input prices are actually lower than they were a year ago.

Any risk to this recovery from inflationary pressures reemerging remains a good way off. But as I have demonstrated again and again, when I see any risks, I will act. I will continue to stay ahead of the game on monetary policy. Eddie will keep me steady and I will continue to be canny.

I expect underlying inflation to meet our target of 2 1/2 per cent or less. I will ensure that it goes on meeting that target for the foreseeable future.


We have made good progress in reducing public sector borrowing, but not as fast as I expected. The Budget therefore targets public sector borrowing. One reason why I continue to concentrate so heavily on public sector borrowing in setting policy is because money spent paying the interest on our debt would be better spent on public services and to reduce taxes.

We are making good progress on bringing down borrowing, but lower than expected tax revenues mean that it has not fallen as fast as I expected in the last Budget. This is not bad news for everyone. People are no doubt quite glad not to be paying as much tax as I expected. As I am the Chancellor, I prefer to keep any tax cuts under my control.

The causes of these shortfalls in our forecasts of tax revenue, primarily on VAT, but also on direct taxes, cannot wholly be explained by any experts inside or outside the Revenue Departments. But there does seem to be an increasing tendency to exploit loopholes and use special reliefs in an artificial way to reduce tax bills. Those sort of tax cuts are unacceptable. If they are not tackled every year in the Budget, they mean that a few people pay less tax, but the rest must pay more.

In this Budget I will propose a number of measures to stem tax leakage, to protect the ordinary tax payer and make sure we get the right tax from the right people. When I reduce tax I want to do so in a way that is fair for businesses and fair for the hard working British man and woman.

Government borrowing has been steadily coming down for 3 years. This Budget will ensure Government borrowing keeps coming down. I expect the Public Sector Borrowing Requirement to be 26 1/2 billion Pounds this year. That will mean it has halved as a share of GDP over the past 3 years. I expect it to come down to 19 billion Pounds next year and to be broadly in balance by 1999-2000.

That pattern of declining borrowing is very much better than the one I had to put in my Summer Economic Forecast last July – 4 billion Pounds better next year. A large part of that improvement is the result of the measures I am taking in this Budget. This Budget tightens fiscal policy. I am tightening fiscal policy now to reduce the risk of having to tighten monetary policy excessively as I set policy to hit my inflation target.

My decisions are always taken solely in British interests to benefit the British economy. But my decisions in this Budget also mean that, by happy coincidence, we will meet the Maastricht debt and deficit criteria in 1997, and we will do even better than that in the medium term. It is a happy coincidence because those criteria make sound economic sense, with or without a single currency. Our option whether to join or stay out of a single currency, based on British national interest, remains a genuine choice for the next Parliament to exercise, when the time comes.

This Government is the champion of sound public finances, of limited government and of low taxation. Our combination of low taxation, low public spending and low debt is the best in Europe. We intend to stay in that enviable position. We can only do this if we continue to bear down on public spending.


In the 1980s, across the rest of Europe, the modern State remorselessly took an ever greater share of almost every nation’s wealth. We in Britain held the line. The proportion of GDP going into Government spending in the United Kingdom is now 8 per cent lower than the average in the rest of the European Union. If our spending had risen to their levels we would now have to raise nearly 2,300 Pounds a year more in tax from every British household.

I have set a target of 40 per cent or below for the share of national income that goes on public spending. Making progress towards this target means tough decisions on public spending every year. But this year we have had to cope with the costs of BSE and larger than expected increases in the costs of social security, as more and more elderly and disabled people receive benefits to which they are entitled.

Against this background, we had to keep the rest of public spending within the tightest possible limits, in order for us to spend more on the public services people really care about – education, combating crime and on our National Health Service.

This country has been well served by my Right Honourable Friend the Chief Secretary who has successfully tackled this problem. Despite all the difficulties, we have been able to reduce public spending plans over the next 3 years by a further 7 billion Pounds in this Budget. Public spending next year will be over 24 billion Pounds lower than was projected when I became Chancellor – a reduction of 7 per cent.

We have been able to reduce spending plans because we have lower inflation, falling unemployment, a continuing campaign for efficiency in the public sector and sensible policy priorities. On top of that, the Government’s relentless drive against fraud and abuse of tax and benefits will be stepped up another gear.

Next year we are going to meet our target of 40 per cent for the share of national income that goes on public spending. In last year’s Budget I said I would make 40 per cent in 1997-98. This year’s Budget secures that important goal. So long as we keep the growth in public spending down below the growth in the economy, we will go below that.


Education is the key to the future of any prosperous and civilised society. It helps to determine how well the economy performs in the long run. It also helps to determine the sort of citizens we are and the sort of society we have. This Government is committed to raising standards in education.

As a result of last year’s Budget 878 million Pounds extra was provided for schools this year. We are giving schools priority again in this Budget. Planned expenditure on schools will rise by another 830 million Pounds next year. A large proportion of this money – 633 million Pounds – will be channelled through the local authorities.

Judging by last year’s experience, some local authorities are reluctant to pass these increases on to their schools, preferring to spend the money on other areas. It is no good local authorities campaigning for more spending on education in the autumn and then spending their money on other things in the spring. Parents will want to make sure their local authorities spend money on the things they want for their children – good teachers and better equipped schools.

A good school has a value far and beyond its buildings. But the quality of school buildings in which our children are taught is still very important. We will be providing an extra 50 million Pounds on top of the previously planned provision for more capital investment to improve the fabric of our schools.

By setting high standards for schools and increasing choice for parents, this Government is delivering better trained and better qualified young people. Almost 1 in 3 young people now go on to university, compared with 1 in 8 in 1979. And our universities and colleges maintain some of the highest standards in the world despite the pressure on their unit costs that this unprecedented explosion of opportunity for young people has produced.

But I recognise this pressure and I also realise that our universities and colleges make an important contribution to the economy. My Budget therefore includes 280 million Pounds to boost further and higher education over the next 2 years. This includes an extra 20 million Pounds next year for science equipment. We want to ensure that the British science research base remains the best in the world, which it certainly is at the moment.

As the Secretary of State for Education and Employment announced in September, the Government is planning a substantial sale of student loans debt.

It makes no sense for the Government to keep a huge portfolio of loans on its books when the private sector could manage it more effectively and is better placed to cope with the risk. The sale will have no effect on the terms on which students can get loans. The substantial reduction in the figures for education that members will find published in the new spending plans is more than accounted for by the sale of this debt. We will actually spend more on the things that really matter – educating our children and young people.

Combating crime

This Government believes that effective law and order is an essential part of making Britain a nation at ease with itself. A good quality police service and an effective system of criminal justice, are high on the list of this Government’s priorities.

When it comes to spending on law and order this Government has a record as long as your arm. Spending on law and order has already doubled in real terms since 1979. Provision for combating crime – police and prisons – will now rise by another 450 million Pounds next year. Our plans provide for 2,000 more police constables by the end of next year. We are well on course to meet the Prime Minister’s pledge for 5,000 more constables.


Our British National Health Service, with treatment free at the point of delivery, is the envy of the world.

In every modern, civilised society the demand for better health care, for new techniques to save lives and improve our quality of life grows constantly. This Government completely understands that. That is why we have increased spending by some 75 per cent in real terms since 1979. That is why the Prime Minister has pledged more resources for the National Health Service in real terms every year, throughout the next Parliament.

We are also spending that money better. We have reformed the NHS so it is much better managed and much more efficient. When waste is reduced, more can be directed to higher quality patient care. This means that patients get more treatment and care out of every pound that we spend.

For next year, we will increase current spending on patient services by 1.6 billion Pounds, or 2.9 per cent in real terms. The real increase in current spending for hospitals next year over and above inflation will be 3 per cent.

On top of this, Private Finance Initiative investment will play an increasingly important role in providing new healthcare facilities. The PFI contract for the Norfolk and Norwich hospital scheme, worth close to 200 million Pounds, was signed yesterday, and others will follow. PFI investment in the NHS will reach some 900 million Pounds over the next 3 years on top of the increased public spending I am announcing.

The NHS will continue to grow and continue to improve. We are totally committed to the National Health Service as a public service providing high quality up-to-date treatment, free at the point of delivery.

By our decisions on public spending, we prove that the NHS remains at the top of the Government’s priorities. The NHS has been safe in our hands, it is safe in our hands and it will always be safe in our hands.

Other programmes

This year’s spending round was as tight as any I can remember, eye-wateringly tight, but we never lost sight of our objective which is to sustain and improve the key public services that the British public care about: education, combating crime and our National Health Service. In part we have achieved that by increasing efficiency within the priority services but inevitably we have also had to find savings in other programmes.

Falling unemployment and lower inflation has helped to reduce the social security and employment programmes. We are also continuing to transfer activities to the private sector where this is more efficient as it is for student loans. We have refocused the housing programme to encourage the use of private finance and the transfer of the local authority housing stock to the private sector. We are stepping up our programmes against fraud. We are continuing our remorseless squeeze on the costs of bureaucracy itself. And we have looked in every department for ways of achieving our objectives more economically. With efficiency savings, most departments will be able to deliver their programmes next year, but with less money in real terms.

Private Finance Initiative

People pay their taxes in order to get good quality public services, not to accumulate state-owned buildings. This simple truth has led to the development of the Private Finance Initiative.

The PFI helps to square the circle of sound public finances and growing demand for better and more modern public services by tapping the expertise and the resources of the private sector.

A year ago we had agreed 1.5 billion Pounds worth of deals – now we have agreed 7 billion Pounds, and we are on course to double that by March 1999. Time and again the taxpayer is getting better value for money, through new road schemes, new prison services, and Information Technology projects. And reforms to local government rules are bringing the PFI into new areas – notably schools.

London is currently experiencing a transport investment boom under the PFI: the Channel Tunnel Rail Link, Thameslink 2000, the Docklands Light Railway extension, and the A40 and A13 improvements. This is in addition to conventional public and private capital spending on the Jubilee Line extension, the Heathrow Express and the new A12-M11 Hackney Link. Investment in London Transport is now running at 50 per cent in real terms above the average for the 1980s. London will soon become one of the biggest construction sites in the country. As a man from Nottingham, I can only say that I hope London will be even nicer when its finished.

Adding traditional capital spending to PFI investment, publicly sponsored capital spending in the United Kingdom in the next three years will be substantially higher in real terms than it was in the 1980s.

Social Security

One third of all public spending goes on Social Security.

Our social security system is there to provide an income when people cannot earn because of sickness, disability, unemployment, caring for relatives or old age. People on the left and right of politics continue to search for a radically different and better way of meeting these needs in our wealthy nation. I have studied many of their proposals and so far, I am afraid, nobody has yet come up with anything remotely sensible or practicable.

Until they come up with a radical alternative, if they ever do, our welfare safety net must remain affordable. It must not be allowed to damage the incentives of individuals or businesses in the private sector, because it is the wealth-creating enterprise economy that sustains our social security system.

In the post-War period social security has grown in real terms by around 5 per cent a year. In recent Budgets we have taken action to bring that growth under control. We now expect future growth of 1 1/2 per cent a year. Well below the growth of the economy.

Year after year, this Government has also vigorously attacked fraud and has reformed benefits to target them on those in genuine need. The measures I now propose in this Budget intensify these efforts yet again.

We plan a further move to align the benefits paid to lone parents and couples with children. From April 1998, new awards of Family Premium and Child Benefit will be the same for lone parents and couples. And we are introducing a number of measures on housing benefit and Council tax benefit to ensure that those on benefits do not have a more comfortable lifestyle than those who are supporting themselves on modest incomes. That would be unfair and unwise. Full details will be made available later today by my Right Hon. Friend the Secretary of State for Social Security.

In my Budget two years ago, I announced a whole package of measures to help the unemployed get back to work – from improvements to the Family Credit System to National Insurance holidays for employers taking on long-term unemployed people.

In this Budget I am providing another 100 million Pounds of new money, mainly targeted on people who have been unemployed for 2 years or more. They will be required to attend a compulsory programme of interviews with the employment service to give them a helping hand to compete in our ever improving market for jobs.

We are expanding Project Work pilots to a further 28 areas. This will create up to 100,000 new opportunities, on a programme with a good track record for getting long-term unemployed people back to work.

I can also announce pilots for a new scheme called “Contract for Work”. Private contractors will help people to find work. These firms will be paid by results. As with Project Work, if the scheme works better than the existing approach, we’ll expand it.

Dependency impoverishes us all. The welfare system should provide a safety net. It must provide the support that a caring society wants to give to our less fortunate fellow citizens. But the welfare system must never become a way of life. We do not want our social security system to be undermined by resentment. We have to take these careful measures because we are serious about protecting those in genuine need and we want to go on delivering that protection for the future.

Spend to save

We want to combine a strong affordable welfare system with a successful low tax economy. That means that when we spend money on social security, it must only go to those who need it. It also means that when we levy taxes we must make sure that they are paid by those who ought to pay them.

As part of our continuing fight against tax and benefit fraud and tax loopholes, I am introducing a package of measures called “spend to save”. This involves spending modest amounts of money – carefully targeted – to save much more money, and to raise revenue.

There will be more money next year to clamp down on benefit fraud. There will be more visits and checks on benefit claimants in high risk groups. And the information we already have on benefit claimants will be used more effectively to catch cheats.

Inland Revenue tax experts will be redeployed to investigate even more rigorously how some big, sophisticated companies seem to pay so little tax. They will make sure that companies are paying what they owe. And what we intended they should owe. In short, we intend to do more about companies being “economical with their tax”.

There will be more resources in the Revenue and Customs to stem the growth of the shadow economy. Tax cheats put law-abiding small entrepreneurs out of business. We all lose from that.

There will be more Customs and Excise Officers to tackle VAT and other tax abuse, including yet more to target the smuggling of alcohol and tobacco.

The “spend to save” package will cost 800 million Pounds over the next 3 years to secure, in a well-planned and measured way, revenue and expenditure savings of well over eight times that amount, 6.7 billion Pounds.

Running costs

“Spend to save” protects the ordinary taxpayer and the people in genuine need of benefits. It is not about more bureaucracy or more red tape. We remain a Government committed to deregulation. And committed to a more efficient Civil Service.

We have cut overall Central Government departments’ running costs by 8 per cent in real terms since the start of this Parliament and we are going to reduce them by a further 7 per cent by the end of the decade. Civil Service numbers are already below 1/2 million, and we expect this fall to continue.


The first duty of Government is to make sure that people can live their lives as they want and that businesses can flourish. People must have the opportunity of a good quality job to go to, a good standard of living, good schools and hospitals and safe streets to live in. Only when those essentials are secure, and only when the Government has made sure that it is not borrowing more than it should, can a Government think about tax cuts.

Last year I cut taxes paid by the ordinary family and this year I am able to cut a little more. I think that the message I have repeated over recent months has now been understood. If there are to be tax cuts, they must be for keeps. They must be backed not only by sound spending decisions but also by a sound fiscal judgement.

Consumer spending is strong and inflation remains in check. But a fiscal stimulus to the economy at this stage could be just as damaging as letting go of monetary policy. So, in setting my Budget, I have struck a careful balance.

I want to cut taxes, but first I have to continue my drive to secure the tax yield. I have to make sure that tax due is turned into tax paid. The balance of the tax burden must be distributed sensibly and fairly and it must not distort decisions or competition.

I am introducing a number of measures which will help us to achieve this. I am plugging some loopholes, ending some tax reliefs that have done their job and adjusting some indirect tax rates.


Even though VAT revenues have revived in recent months, they are still coming in significantly below what was expected last year. This Budget includes a crackdown on some of the clever wheezes that have sprung up to get around paying VAT. These measures will raise 3/4 billion Pounds in revenue next year, but they also protect a further 1 1/2 billion Pounds a year of existing revenue from further attack.

Customs will restrict access to special VAT schemes for retailers. We will also tighten up the rules of VAT relief schemes for bad debts, and the option to tax commercial property, to prevent widespread abuse of these reliefs. I also propose to take steps against retailers who reduce their VAT bills when selling insurance with their products.

We announced a 3 year limit on repayments of VAT claims. This was a sensible precautionary measure. Recent high profile court cases have revealed the potential exposure of the Exchequer to claims for tax going back to when the tax was first introduced. No responsible Government could leave the Exchequer, and, ultimately, all taxpayers, exposed in that way. Government needs to strike a balance between what is fair to the individual taxpayer, and what is fair to the whole body of taxpayers. The three year cap strikes that balance.

But one feature that attracted particular criticism from accountants and their clients was that Customs still retained the right to claim underpaid tax going back six years. This argument was rather disingenuous because Customs do not claim underpaid tax on unexpected changes to the interpretation of the law when those go against taxpayers. However, Government must not only be fair – it must be seen to be fair. I have, therefore, decided that Customs’ right to claim underpaid tax, in cases where no fraud or malpractice is involved, should be restricted to three years as well.

I will be releasing details today of a package of measures to stamp out tax abuse in a number of areas including leasing transactions, the abuse of foreign tax credit rules, and paying employees in their own company’s shares. I am sure these will be accepted as necessary and sensible measures to stem the growing loss of tax revenues. And to protect the ordinary tax payer.

I will not tolerate tax abuse. A number of these measures are being introduced, subject to the Finance Bill becoming law, with effect from today.

Special tax reliefs can be a powerful tool. They can play an important pump-priming role, encouraging companies and individuals to change their behaviour in a way which benefits the wider economy. But by their very nature, they need to be used very selectively. We owe it to the ordinary tax payer to keep each and every special tax relief under constant review to determine whether it is still justified, or whether it has now served its useful purpose.

Profit Related Pay

The tax relief this Government introduced in 1987 to promote profit related pay schemes has been a success. It has played a key role in reinforcing this Government’s strong beliefs that employees’ rewards should depend on the success of the business for which they work.

I have always believed, and argued publicly for years, that in a modern enterprise economy people’s pay should be closely linked to the performance of the business for which they work. The best way for businesses to motivate their staff is to let them share in the rewards of success. I am delighted that tax reliefs have helped to get this idea accepted so widely.

The tax relief on Profit Related Pay was always intended to be a pump-priming measure. As Nigel Lawson said in 1986: “There is considerable inertia to overcome, so it might make sense to offer some temporary measure of tax relief”. Profit related pay is now firmly established as part of British businesses’ pay policy. Over 3.7 million people are in schemes. 10 years on, the tax incentive has successfully served its pump-priming purpose.

I can no longer justify the increasing cost of the tax relief to the 22 million taxpayers who are not in profit related pay schemes. We cannot permanently divide the workforce into groups who pay different levels of tax on the same earnings depending on whether the firm they work for is in a scheme or not. The goal of widespread use of PRP has been achieved and I would rather make faster progress on lower taxes for everybody.

Good managers do not need a tax relief any more to know that pay should be linked to their firm’s performance. Pay linked to profits produces it own rewards on the bottom line in a thriving economy.

It is therefore time for the Government to start to withdraw this special tax relief. I intend to do this gradually, to ensure that businesses who need to adjust their pay packages and their sharing of the rewards of success have ample time to do so.

The upper-limit of pay attracting the relief will remain unchanged at 4,000 Pounds until 1998 and no one will be affected before then. It will then be progressively reduced until the year 2000, when the relief will be withdrawn altogether.

Capital allowances for long life assets

Investment is vital to our recovery and business investment is now growing strongly. The tax system recognises investment through capital allowances. These allow the cost of investment to be written off against tax bills, frequently faster than it is written off in commercial accounts.

For plant and machinery with a long lifespan, the rate at which costs can be written off for tax is far more generous than for other types of investment and bears no relation to the useful economic life of the asset. This is an unjustifiable distortion in the tax system.

I propose changing the capital allowance for plant and machinery with a life of more than 25 years to 6 per cent on a reducing balance basis. This will spread the tax relief more evenly over the average life of these assets.

Groups spending less than 100,000 Pounds a year on such assets will be exempt. This will mean that the vast majority of small companies will not be affected. Ships and railways will also be exempt.

Oil production

I also propose to withdraw the 100 per cent corporation tax deduction for the intangible costs of drilling most production oil wells.


This Government recognises that low marginal tax rates on income are a spur to hard work and enterprise. Taxes on spending do less damage to effort and enterprise than taxes on income. But the balance of the taxes on spending must be right. And I am making some changes to taxes which help to move towards a better balance for the tax system as a whole.

Insurance Premium Tax

I propose to increase insurance premium tax, which applies to most general insurance, to 4 per cent. Three-quarters of all insurance – including life and other long-term insurance – will remain exempt. Insurance remains undertaxed for consumers compared with other services in this country. The introduction of the tax did not harm the healthy insurance industry that we have. Most companies absorbed the tax and some premia actually fell for a time. Even after this further modest change, the overall rate of insurance premium tax in the UK remains very low – lower than in almost any other European Union country.

Air Passenger Duty

Air travel has also been undertaxed because it has proved difficult to get international agreement to tax its fuel. The rates of air passenger duty are to be increased. The 5 Pound rate on flights to most European countries will be increased to 10 Pounds, and the 10 Pounds rate on flights to the rest of the world will be increased to 20 Pounds. These increases will not come into effect until 1 November 1997, to give tour operators time to reflect these new rates in the prices they publish in their holiday brochures.

Business travel is soaring and the holiday business is booming at the moment in prosperous Britain and this modest change will not stop it booming in future prosperous years. About 40 per cent of the revenue raised by this tax is borne by overseas visitors.

Vehicle Excise Duties

I am making the same changes to the main Vehicle Excise Duties this year as I did last year. The cost of a car tax disc will go up by 5 Pounds, around the rate of inflation. The cost of a lorry tax disc will be frozen for the seventh year in a row.

Road fuel duties

I firmly believe that motorists should bear the full costs of driving – not only wear and tear and congestion on the roads, but also the wider environmental costs. Even those of us who frequently have to drive can take steps to cut fuel consumption and we all ought to consider carefully the use of our cars.

I intend to stick to my 1993 Budget commitment to raise road fuel duties by an average of at least 5 per cent each year in real terms. In line with this I am raising the tax on all petrol and diesel by 3 pence per litre from 6.00 pm tonight. These tax rises will encourage fuel efficiency and help control harmful pollution.

Air quality package

I am glad to say that pollution from vehicles is already coming down, helped by tax measures in previous Budgets. The tax measures taken to encourage unleaded petrol were a huge success. It now accounts for two-thirds of the petrol market. I want to go further in this Budget to attack pollution in cities and improve air quality by effective steps to reduce particulate emissions – the smoke produced by diesel engines.

In recent years, new evidence has come to light strengthening the health arguments for reducing particulates. This pollution is being reduced, but we all want to see it being reduced further and faster.

Ultra-low sulphur diesel is cleaner than ordinary diesel, but is slightly more expensive to produce. I want to create the conditions where ultra-low sulphur diesel can cost the same at the pump as ordinary diesel. I have just said that I am increasing the tax on diesel by the same amount as petrol. I plan to reduce the duty on ultra-low sulphur diesel by 1 penny per litre relative to ordinary diesel, when I get the necessary international agreement.

I also want to encourage high mileage vehicles in our towns and cities to switch to cleaner gas power. Last year’s Budget changes broadly equalised the pump prices of gas and petrol. From 6.00pm tonight I am reducing the duty on road fuel gases by a further 25 per cent.

I also intend to reduce Vehicle Excise Duty by up to 500 Pounds for lorries meeting very stringent emissions standards from early 1998. This will give an incentive for lorry owners to fit particulate traps or to convert to gas power. We will be consulting on the practical details of these changes.

I believe that this “air quality package” will significantly speed up the reduction of urban emissions of particulates, helping us to meet our air quality targets for 2005 and beyond. We intend to ensure that economic growth in this country is consistent with a healthy environment and sustainable development.

Tobacco duties

In my 1993 Budget, I gave a commitment to raise duty on tobacco by more than inflation each year. I believe this is a fair and effective way to hammer home the message that smoking can seriously damage your health. So far I am concerned, this is necessary masochism in the wider public interest.

From 6pm this evening, the tax on a packet of 20 cigarettes will increase by about 15 pence, on a packet of small cigars by about 7 pence and on a packet of pipe tobacco by about 8 pence.

But I am limiting the increase in the duty on hand rolling tobacco to the rate of inflation. Hand-rolling tobacco is proving to be by far the easiest tobacco product to smuggle, although it represents a very small part of the tobacco market.


I am aware of the serious problem that cross-border shopping and smuggling of alcohol causes our drinks industry in Britain. I have already announced that Customs are stepping up their efforts further to catch smugglers.

Last year I was able to freeze the duty rate on beer and wine. This year it will remain frozen. The proportion of tax on the price of a pint in the pub is now at its lowest level for 30 years. For some of us, that helps to keep our small cigars affordable.

Last year’s cut in the duty on spirits was the first for 100 years. I was tempted to maintain a striking rate of once every 100 years. But I am sure the industry will be glad to know that they will not have to wait so long this time.

From 6.00pm tonight the tax on whisky, gin and other spirits will fall by another 4 per cent, worth 26 pence a bottle.

The reduction in the rate on spirits boosts an important industry in the United Kingdom. It will also reinforce last year’s signal to overseas authorities not to discriminate against our products. Only smugglers will regret that we are slowly moving our duty of spirits nearer to the continental level.

From 1 January, the tax on alcoholic soft drinks will be increased by over 40 per cent, by between 7 and 8 pence a bottle. This will help meet public concern about the attraction of these “alcopops” for under-age drinkers, and it will also attack a distortion of competition by bringing the tax broadly into line with beer.

You’ll notice that I have considered the balance of my overall package carefully and I have not yet been converted to a bubble-gum flavoured alcopop.


Nothing matters more for business than a stable economic environment – low interest rates and low inflation. Businesses throughout Britain are benefiting from the healthy sustainable growth in the economy that I have described today.

As I promised in my last Budget, from April 1997 there will be a cut in the main rate of employers’ National Insurance Contributions, to 10 per cent, paid for by the proceeds from the landfill tax. A tax on waste to cut a tax on jobs. This will benefit employers in Britain and make it cheaper to create new jobs in our growing economy.

Our overheads on jobs are already less than half those in Germany, France, or Italy. I am determined to keep that advantage over our continental competitors where the creation of new jobs is over-regulated and over-priced. This is another reason why I am confident that our unemployment will keep falling.

In this Budget, I propose to keep the three intermediate thresholds for employers’ National Insurance Contributions where they are now. I propose to increase – by 10 Pounds and 1 Pound respectively – the upper and lower earnings thresholds for employers’ and employees National Insurance Contributions.

In this Budget I also want to address a particular concern of our small businesses – the burden of non-domestic rates.

The Uniform Business Rate is a fixed cost which can rise each year beyond the control of the manager of a small business. Since the last revaluation of business rates, I have repeatedly slowed down the increase of rates for those businesses whose rates have had to go up. No business property has seen its rates go up by more than 7 1/2 per cent above inflation in any one year. But I want to do more than this.

I have decided to freeze next year’s rates bill for all the small businesses whose rates would have gone up. Small properties whose rates are falling will have those reductions accelerated. This will benefit over one million small business properties, by up to 130 Pounds a year.

A freeze is an important step that I can make this year. We have already reduced business rates for rural village shops. But I realise that the present system of business rates bears particularly hard on the smaller business for whom they represent a much bigger proportion of total costs. We must therefore move on as soon as possible to more changes in the system to recognise this and redistribute the burden more sensibly between smaller and larger businesses.

Inheritance tax

This Government is committed to reducing and then abolishing capital gains tax and inheritance tax. But we have always said that we will cut these taxes only when we can afford to do so. This is a responsible Budget which is protecting future growth and prosperity by putting the public finances into a healthier state.

We will not be able to make progress on both these taxes this year.

But I am pleased to announce that we can take a further significant step towards abolishing inheritance tax.

Inheritance tax is a penalty on thrift, independence and enterprise. It is a growing anachronism. Lloyd George’s maxim that the “the most convenient time to tax the rich is when they are dead” no longer holds. It is largely paid by people of modest means who either cannot or simply do not make careful plans to avoid it.

Last year I made significant progress towards our commitment. In this Budget I will build on that by raising the value of the inheritance tax threshold to 215,000 Pounds.

That means, that in two years the Government will have raised the threshold for inheritance tax by 40 per cent.

Tax rewrite

In last year’s Budget Speech I announced a project to rewrite Inland Revenue tax legislation in plain English. This project is as ambitious as translating the whole of War and Peace into lucid Swahili. In fact, it is more ambitious – War and Peace is only 1,500 pages long, Inland Revenue tax law is 6,000 pages. And we did not have a Tolstoy to write our taxation laws in the first place. We have consulted extensively on how the project should be carried out, and I am glad to say there is wide consensus. The Inland Revenue will publish the plans and arrangements shortly after the Budget.

The aim is to prepare a series of rewrite Bills, the first of them to be ready for enactment in the 1997-98 session. My noble and learned friend Lord Howe has produced a thorough and helpful report on how Parliament might handle these bills. We endorse his broad proposals, and invite the Procedure Committee to consider how the House is going to handle the bills in a sensible fashion. I can announce that my noble and learned friend Lord Howe has agreed to chair the steering Committee which will oversee the rewrite project.

The project will bring the benefits of clarity and certainty to businesses and ordinary taxpayers. It has been widely welcomed and deserves the continuing support it has enjoyed in all parts of the House.

Income tax

Mr Deputy Speaker, this Government has led Britain towards our clear goal of a low tax economy where private enterprise has the incentive to generate jobs, investment and wealth to make people and their families more prosperous. We are moving towards a low tax economy where individual living standards continue to rise and the Government can afford the excellent public services that people want.

Low direct taxes are the most effective way to encourage enterprise and hard work. Under this Government those who do an honest day’s work and those who take entrepreneurial risk will keep more of what they earn and save.

This year people have taken more heed of my speeches on the overriding priority of securing future prosperity and jobs and financing key public services. Sensible people already expect my cuts in direct taxation to be modest. They know their well-being depends on lasting growth and more jobs and that living standards rise from a combination of steadily rising incomes and steadily lowering taxes. Tax cuts matter a lot to low paid people and to men and women in ordinary jobs. I announced my income tax cuts last year as a return to our tax cutting agenda and for the second year in succession, I am delivering an instalment of that agenda. I want to ensure that tax does not start to be paid at all at too low a level of income and I want to improve work incentives. I propose first of all to raise the threshold below which no income tax is paid at all.

In this Budget, I am making an increase in the basic personal allowance of 280 Pounds. That is 3 1/2 times more than necessary to cover the rate of inflation. It will also ensure that each and every person who pays any income tax at all will get a direct benefit out of this Budget.

I am also increasing the married couple’s and related allowances by 40 Pounds, maintaining the extra tax allowance to all married couples. It will now be worth nearly 275 Pounds each year for married couples. The tax system does recognise marriage, contrary to popular belief.

We also give a special tax allowance to blind people. This year I am increasing that by the rate of inflation. And I will put indexation of this allowance onto the same statutory basis as for the other income tax allowances.

I also propose to raise the threshold above which people start to pay the 40 pence higher rate tax by 600 Pounds.

One of this Government’s most important pledges is that we will move to a basic rate of income tax of 20 pence as soon as we can. We are proving that we can move towards the delivery of the promise and still deliver healthy public finances. Every step we take makes it more and more credible. Every step that we take makes it more affordable to reach the ultimate goal which we are getting tantalisingly near to. As a further step towards that, I propose to widen the lower rate band of 20p tax by 200 Pounds, twice as much as required by indexation.

This will mean that the slice of income on which a 20 pence tax rate is paid will have more than doubled during the lifetime of this Parliament. More than one in four of all taxpayers now will only pay tax at 20p in the pound.

Mr Deputy Speaker, this is the stage of my Budget speech where everyone is asking themselves – are the guesses of the newspapers right? Am I indeed going to cut a penny off the basic rate of income tax? What the newspapers did not know was that my control of public spending and borrowing would have allowed me to take 2p off if I had chosen to. But I preferred instead to raise personal allowances and widen the 20p band for those at the bottom end of the scale.

And yes, Mr Deputy Speaker, I am indeed also able to reduce the basic rate of income tax, by 1 penny to 23 pence in the pound.

The small companies rate of corporation tax will be reduced to 23 per cent in line with this, helping 400,000 companies. The main rate of corporation tax of 33 pence is already lower than in any other major industrialised country.

Seventeen years of steady progress – so far – means that the basic rate of income tax is now a full 10 pence lower than the rate we inherited in 1979. It is at its lowest rate for 60 years. Its lowest rate since Baldwin was Prime Minister, Edward VIII abdicated and Wally Hammond scored a double century at the Oval.

Another penny off the basic rate is a significant further step towards this Government’s target of a 20 pence basic rate of tax. For over 7 million people – our promise of a 20 pence basic rate is already a reality. I am bringing other income taxpayers ever closer to that reality. 20 pence is a realistic and attainable goal for the next Parliament. We will not be content until we have completed the task of getting it down to 20 pence and every Budget I have presented has step by step shown how we are going to get there.


With increases in real earnings and the tax changes in this Budget, a family on average earnings will be another 370 Pounds better off next year over and above inflation. The same family will have over 1,100 Pounds more to spend each year after tax and inflation than they did before the last election. In 1992, the background was one of a worldwide slowdown and a recovery in the United Kingdom that had barely started. Now we are enjoying strong growth and rising living standards, and we are going to enjoy more of the same.


Mr Deputy Speaker. In November 1993 I promised that I would put Britain firmly on course for a sustained period of rising prosperity and falling unemployment, based on low inflation and healthy public finances.

I have done what I clearly said I would have to do and I have delivered on those promises.

Mr Deputy Speaker, the Government believes in allowing people to keep as much as possible of their own income so that they can make their own decisions.

This Budget cuts public spending next year by 2 billion Pounds, and it generates an extra 1/2 billion Pounds in revenue through “spend to save”. It contains a balanced tax package – it includes tax cuts of 2 billion Pounds while it secures the tax base by 1 billion Pounds. Taken together the effect of the Budget is to tighten fiscal policy and so protect healthy lasting recovery.

I am a man of the world, I realise virtue doesn’t always brings its own rewards. But this virtuous Budget will bring rich rewards. The rewards of economic success to the hard working men and women of this country. Never forget, good economics is good politics.

This is not a Budget just for the next few months. It is a Budget for many prosperous years to come. It is a Budget that this Government will build upon again in twelve month’s time.

I commend this Budget to the House.