Danny Alexander – 2014 Speech on Scottish Fiscal Policy


Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, at the Apex Hotel in Edinburgh, Scotland, on 28th May 2014.


Good morning and welcome.

As you know, today the UK government is publishing the most comprehensive and definitive study of how independence would affect Scotland’s finances over the next 20 years.

I look forward to answering all your questions.

But first I would like to say a few words to set out this analysis.

On the 18th of September we face the most important vote in Scotland’s history.

Whether or not to remain part of the United Kingdom.

It’s a momentous decision.

And in my mind, there is no doubt.

By staying together, the Scottish and the UK economies can continue to grow and prosper.

And as a nation, we can continue to make the choices needed to live within our means and grow our economy.

But I know that many people are still undecided.

And the single biggest question in their minds is…

“Will we be better off together?”

So today…

…I can answer…

…yes, we will be better off.

Because there will be a huge benefit to staying in the United Kingdom…

You could think of it as a “UK Dividend”.

Or 1,400 reasons why we’re better off together.

So what is the UK Dividend?

There is a detailed explanation in the document we are publishing today.

Five key building-blocks underpin our analysis.

There is little dispute about each one of those…

… because they’re all based on reasonable and responsible assumptions…

… and all five are seen by independent organisations as significant factors in Scotland’s future. And together they tell a powerful story.

The first building block is what you might call Scotland’s financial starting point.

Should Scotland become independent, it would start off in life in a worse financial position than the UK.

That is the view of the Institute for Fiscal Studies, the Centre for Public Policy for Regions, Citigroup and many others.

Even the Scottish government’s own figures show that Scotland would face a shortfall between what the governments gets in tax and what it spends on public services.

So, as a separate country, Scotland would be running a bigger deficit than the UK – from day one.

Indeed, independent forecasters show that, in 2016, Scotland would be borrowing over 5% of national income.

That is double the deficit of the UK.

And the difference equates to around five and a half billion pounds…

…from day one.

But that’s just the starting point.

The second building block covers the direct cost of setting up a new state.

For example, as an independent country, Scotland would need to set up new institutions.

A new passport office.

A new benefits agency.

Or a new tax collection authority…

… that last one alone – as ICAS set out last week – would cost £750 million.

We have taken the best independent estimates, which put the cost of transition at up to 1% of GDP.

For Scotland that figure would be £1.5 billion.

At the same time, as a separate country, Scotland would have to pay higher interest rates to borrow in financial markets.

A whole range of experts, from the National Institute to Deutsche Bank, calculate that, under independence, interest rates are likely to be around 1% higher.

That’s worth £500 million per year in additional debt interest costs.

The third of our five building-blocks is the cost of the Scottish government’s promises.

They’ve set out their policies in the recent White Paper – but not the costs.

So we’ve looked through the fine print.

Put it through the Treasury’s models.

Using tried and tested methods…

… and calculated that the Scottish government’s new policies would cost at least £1.6 billion every year.

The fourth factor is the future of oil and gas production.

It is an indisputable fact that North Sea oil production has been declining for many years.

The independent Office for Budget Responsibility has made an impartial assessment of this.

They estimate that oil and gas revenues will fall by around 95%, as a share of our economy, over the next 20 years.

And the fifth factor affecting the future finances of Scotland is our more rapidly ageing population.

This is the well-established view of the UK Statistics Authority, the Institute for Fiscal Studies, the International Longevity Centre, and many others.

As Gordon Brown explained last month, the number of Scottish pensioners will rise from 1 million to 1.3 million over the next 20 years.

It means a shrinking number of working age people would have to pay for a growing number of old age pensioners.

So an independent Scotland would have to spend more to deliver the same services as now.

So where does all that leave us?

A worse starting point.

The cost of setting up a new state.

Unfunded policies.

Declining oil revenues and an ageing population.

All of that…

… easily avoided by staying within the UK…

… is worth fourteen hundred pounds.

For each person in Scotland…

… each year…

…for the next 20 years.

That’s the UK Dividend.

And the further ahead you look the more the pressures build.

That dividend…

… is our share of a more prosperous future.

It is the money that will pay for better public services and a fairer society.

Money for more teachers in better classrooms.

For nurses and midwives.

To put £1,400 per person in context…

On aggregate, it represents 11% of Scotland’s total public expenditure.

That’s equivalent to around two thirds of the total National Health Service budget in Scotland.

It’s almost as much as Scotland’s whole education budget.

So what does £1,400 mean to you and to me?

Well, for example, £1,400 is more than enough to pay for a year of free school meals for three children.

£1,400 pays for 10 weeks of someone’s state pension.

Alternatively, instead of cutting public services to fill the gap, as a separate country, the Scottish government could raise taxes.

For example, today the UK reaches what is known as “tax freedom day”.

That’s the day in the year when, on average, people stop giving their income to the government through tax and instead start keeping the money they’ve earned for the rest of the year.

But, as a separate country, each person in Scotland would have to hand over their income to the state for two more weeks.

Another way an independent Scotland could offset the £1,400 UK Dividend, without cutting public spending…

… is to increase the basic rate of income tax from 20 to 28%, increase VAT from 20 to 26% and increase duties on alcohol, tobacco and fuel by about 40%.

Of course, the nationalists will say that we’re wrong.

They will just continue to peddle myth after myth….

… saying that taxes wouldn’t be higher, that there’s loads of oil left, that public services won’t suffer, that growth will be stronger, that breaking away won’t be hugely expensive, that new institutions can be set up for free…

And all of those myths are refuted by the information we publish today.

And I am very happy to answer questions on all of that.

We are talking about Scotland’s finances over the next 20 years…

…they are talking about what’s happened over the past 5 years.

We are focused on the future – they are stuck in the past.

To conclude.

Today we have shown that, by staying together, Scotland’s future will be safer, with stronger finances and a more progressive society.

Because as a United Kingdom we can pool resources and share risks.

It means a UK Dividend…

… of fourteen hundred pounds a year.

For every man, woman and child in Scotland.

And if our history teaches one lesson, it is this…

… together we achieve so much more than on our own.

So let us look forward to a prosperous and a fair Scotland – thanks to the dividend that comes from staying in the UK.

And that is why…

… if you have your doubts…

… if deep down you feel that we’re better together…

… today we give you fourteen hundred reasons…

… why we’re better off together too.

Thank you very much.

Danny Alexander – 2014 Speech on Scottish Independence


Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, on 30th April 2014.


I’m glad to see so many of you here this morning…

In a week when we can all celebrate good economic news.

Yesterday’s GDP figures were yet another example of the strength of the UK economy right now…

With – in the first quarter of this year – all three main sectors of the economy growing at above 3 per cent on a year earlier.

This is the first time this has happened in ten years…

It’s the result of the hard work of people…

From the southernmost point of Cornwall an area we granted national minority status last week…

All the way up to the Shetlands…

And it is another excellent example that – as a United Kingdom – we are well and truly seeing the recovery we so badly needed, thanks to the Coalition’s economic plan.

I remember when I was first invited to join the Treasury…

At a time of a grave economic outlook…

One of the best pieces of advice I was given…

Was that I would need to have a sense of humour about things.

And four years on, that has certainly been true!

I’ve been called a Ginger Rodent by Harriet Harman…

I’ve been told I bear a passing resemblance to Beaker from the Muppets countless times…

And a couple of weeks ago I found out about a new photo blog…

Called The Adventures of a Lego Danny Alexander.

Now, it’s perhaps true that the referendum campaign here in Scotland…

Hasn’t provided many laughs so far.

And given both the enormity – and the irreversibility – of the choice we face…

That is perfectly understandable.

This is, after all, the most serious decision any Scot will ever take.

But increasingly, as the campaign continues…

When it comes to some of the statements and assertions made by nationalists…

You really do need a sense of humour.

Because apparently, the same risks that apply to other countries wouldn’t apply to an independent Scotland.

Another financial crisis, for example, would pose no problem…

Because according to Business for Scotland…

The banks that needed bailing out in 2008 received funds according to the location of their operations…

Rather than the location of their headquarters.

A claim that ignores the reality…

That when the financial crisis hit…

It was the government of the United Kingdom that stepped in to recapitalise RBS and HBOS…

And the taxpayers of the United Kingdom that extended £275 billion of total support to RBS alone.

The nationalists may stick their heads in the sand when it comes to the global financial system…

And the profound consequences of independence for Scotland’s financial sector.

But I haven’t heard the reality put better than by the former Governor of the Bank of England who said that…

Banks are international in life, but national in death.

Second, there are the extraordinary set of claims that seek to reassure those living in Scotland…

That nothing much would change with independence…

Like the continued, belligerent, assertion that Scotland could – and would – keep the pound.

But while I can respect that Alex Salmond is passionate in his desire to break up the UK…

… he has to face up to the fact that the rest of the UK does not have to – and would not want to – continue to share the credit card.

There is also the fantastical claim, made in the White Paper…

That an independent Scotland would share a third of the UK’s institutions and services…

…despite the fact that this is completely unprecedented anywhere in the world.

This is a claim we have to listen to…

Whenever an institution crops up that the nationalists haven’t had time to think about…

Be it the National Lottery or the Met Office or the Passport Office…

So it won’t surprise me if next Saturday night…

Alex Salmond declares that an independent Scotland will share the UK’s automatic place in the Eurovision Song Contest final!

Over the last few weeks, I’ve been attending public meetings on the referendum in the Highlands.

And all of the myths I’ve just put forward are ones that have been put around by the nationalist campaign.

So I wanted to give this speech today, precisely because we cannot allow false or misleading claims by separatists to go unchallenged.

We need to make sure that when people go to the polls in September…

For the most important vote they will ever cast…

They are making an informed choice…

Based on evidenced facts.

Everyone in this room this morning knows the importance of balancing the books.

Indeed every family and individual in Scotland understands the tough choices involved in matching up outgoings with incomings.

It has been one of the defining features of the government to tackle the UK’s deficit and rebalance our economy.

And as our strong, growing economy and falling deficit shows…

…ours is a strategy that is working for all parts of the UK.

But by contrast, it is one of the defining features of the Scottish Government to ignore the realities…

…of Scotland’s larger deficit…

…and falling oil revenues…

because – unfortunately for them – these facts demonstrate quite clearly that we are better off together.

The nationalists’ assertions on Scotland’s finances are at best ill-informed…

And at worst, deeply misleading to Scottish voters.

In a few weeks time, I will set out government analysis of the many fiscal benefits of the United Kingdom…

But this morning I want to focus on debunking some of the more dangerous economic myths being propagated…

Namely those around oil and gas receipts.

And those around the national deficit.

On oil, there are some frankly incredible myths being put forward by the nationalists.

The first is the Scottish Government’s claim

…that the wholesale value of remaining oil and gas reserves amount to £1.5 trillion.

As with most of the Scottish Government’s oil numbers though…

…this is not only based on the most optimistic scenario for North Sea extraction…

…it is based on a scenario where oil price is the same as the price of gas.

But in recent years, gas – which accounts for 40% of forecast oil and gas production…

Has sold for little more than half as much as the equivalent volume of oil.

Yet over-optimism is not the Scottish Government’s worst offence in this particular example.

No, the fact is that the £1.5trillion figure doesn’t include any costs for getting the oil out of the ground…

And into the petrol pump.

It is apparently news to the nationalists that…

Oil rigs cost money to build and run…

Pipelines under the sea are expensive…

New technologies require investment…

And oil workers expect to be paid.

All told, more than £1 trillion is likely to be needed to extract the remaining oil and gas resources assumed by the Scottish Government.

So once you’ve taken these inconvenient overheads out of the equation, the value is much much lower…

And revenues for Scotland much much smaller.

But the nationalists aren’t ones to let a good fact get in the way of a nice electoral soundbite…

And so they claim – in their infamous Oil and Gas bulletin from last March – that more than half of oil and gas reserves have still to be extracted…

And thus plenty of government revenues from oil and gas are still to come.

But we simply cannot trust their forecasts:

– not just because they are more optimistic than any other published forecasts…

– not just because “there is a high degree of uncertainty around future North Sea revenues” – not my words…

The words of John Swinney in his private paper to colleagues…

But because the Scottish Government’s oil and gas tax forecasts have already been shown to be spectacularly wrong.

The Scottish Government forecast that in 2012-13, a Scottish share of North Sea oil and gas revenues would be almost £7 billion.

As it turned out, total UK oil and gas revenues were only slightly above £6 billion.

And for the financial year just passed 2013-14, the Scottish Government forecast that a Scottish share of North Sea revenues would be higher still…

More than £7 billion.

Well, HM Revenue and Customs has today confirmed that total UK North Sea revenues last year were £4.7 billion.

So over the past two years alone…

The revenues coming from oil for the whole UK…

Have been more than £3 billion below the Scottish Government’s most cautious forecasts.

Over the whole six year period of the Scottish Government’s Oil and gas bulletin 2012 to 2017…

Their most cautious forecast for Scottish oil and gas revenues is £41 billion.

Yet the independent Office for Budget Responsibility forecasts that whole UK revenues will be just £25 billion over the same period.

It doesn’t matter how deep you drill into the figures, they simply don’t add up.

It shows that the Scottish Government and realistic projections go together like water and oil…

And it leaves tens of billions of pounds missing from the Scottish Government’s White Paper.

Tens of billions of pounds that – under independence – can’t be raised across the UK

…but will have to be raised from Scottish businesses and individuals…

Or cut from Scottish services.

I have absolute faith in this country’s human resources.

And our resilience and work ethic…

Just as we Scots have always proven we have the imagination and the creativity to push boundaries in science and the arts and economics and exploration…

I have absolute faith that this country will keep producing great women and great men…

Who can push those boundaries further.

But while we should celebrate that our human resources have such potential…

We need to be realistic when it comes to our natural resources.

Our oil reserves are finite.

And we mustn’t let over-optimistic, unproven-projections…

Raise false hopes for economic plenty.

Better off as part of the UK

Let me deal with two final myths together…

Both the nationalists’ claim that Scotland would be better off…

And have lower taxes, higher spending and no austerity if we were independent…

And their biggest myth of all –

Their claim that the pro-UK campaign is only negative, or scare-mongering.

Because what these oil numbers published today show…

…and what I will argue for the next few weeks ahead of our final analysis paper…

…and the next few months ahead of the referendum

…is the indisputable point that we are better off together.

According to a range of independent estimates…

As part of the UK…

Scotland will face a smaller deficit, lower taxes and higher levels of public spending, both in the short, and the long term.

Independent organisations like the IFS, the CPPR and others have all shown that an independent Scotland would face a deficit of more than 5 per cent of GDP in 2016-17.

And forecasts from the IMF suggest this would be the second highest deficit of any advanced economy in the world.

On the other hand…

As part of the UK…

Scotland would be part of a nation with a deficit forecast of just 2.4 per cent of GDP in 2016-17, and falling further in subsequent years.

This means that…

In the year 2016-17 alone…

Independent experts agree that £1,000 less would be borrowed for each and every Scot as part of the UK…

Than would be the case in an independent Scotland.

An evidenced, positive reason that we are better and more secure together…

Today, in 2016-17 and beyond.

The Scottish Government know the fiscal position of an independent Scotland provides a “challenging context”.

Again, not my words but John Swinney’s private memo to his cabinet colleagues.

And today we now know that the figures in the white paper are already out of date.

But rather than confront these risks and uncertainties, the nationalists simply choose to peddle myth after myth.

They claimed the white paper would answer all the questions about independence.

That it would be the most detailed guide ever produced to a new country.

Instead, the white paper is full of false promises and misleading claims…

Based on an optimistic forecast for oil revenues that are already out by £3bn a year…

…containing policy proposals that are not funded and would not be affordable…

…and commitments that the Scottish Government pretends it can make on behalf of other nations and international organisations.

It is time for the Scottish Government to confirm what we all know…

…that the white paper was wrong.

A month ago the Centre for Public Policy for the Regions called on John Swinney to issue revised and realistic oil and gas forecasts…

…to correct the discredited Oil and gas bulletin

…and the errors at the heart of the White Paper.

I am repeating that call today.

The Scottish Government must confront the fact that it is promising tax revenues and public spending that it cannot deliver.

It should revise its oil and gas forecasts…

…Or – better yet – adhere to international best practice and follow an independent forecast like the OBR’s.

It is the very least that the Scottish voters deserve.

But I would like to end by saying – that there is actually one Scottish myth that I absolutely cannot – and would not be able to – disprove.

She’s about forty foot long…

Publicity shy…

And she lives in my constituency.

And if anyone here today, or any of your families…

Wants to come up to Loch Ness and spend a weekend looking out for her…

They will be very welcome indeed.

In short, there is more evidence for the Loch Ness monster…

Than there is for many of the calculations and the claims that have been put forward by the nationalists to support their case for separation.

I want everyone in Scotland to be part of an influential country…

Where businesses can thrive…

Where the economy can grow…

And where people can lead long, healthy, happy lives.

We have all those things as part of a United Kingdom.

We benefit from the shared sovereignty – and shared economy – that we enjoy as part of the strongest union of nations in world history.

And as Billy Connolly said yesterday…

And he put it better than any politician could…

The more people stay together, the happier they’ll be.

It would be a real folly – and a real danger – to put so much of what we have at risk.

Especially if we based our decision to do so on the over-optimistic, uncosted claims of the ‘Yes Campaign’.

We need to continue challenging these myths.

And we need to continue making clear to the people of Scotland that we really are better together.

Thank you.

Danny Alexander – 2014 Speech at Eurotunnel


Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, at Eurotunnel on 23rd April 2014.


Thank you very much for welcoming me to Eurotunnel today.

I’m particularly delighted to be able to visit during your 20th anniversary year.

Over 330 million people have travelled through these wonderful tunnels.

To put that in some sort of context, it’s more than the entire population of the United States.

This Cross-Channel Fixed Link – and Eurotunnel as its operators – has had a huge impact on the transport and logistics industries…

Not to mention the UK economy more broadly.

The rolling motorway concept – with a crossing time of just 35 minutes – has never been more important.

The factories, supermarkets and consumers of today demand to-the-minute precision.

And Eurotunnel – for 20 years – has been delivering just that.

For 2.5 million cars every year.

For 1.4 million trucks every year…

And for thousands of high-speed passenger trains and rail freight trains too.

There’s something fabulous about the awesome engineering that makes our bridges, roads, railways and tunnels.

And let’s face it, when it comes to infrastructure – things don’t come much bigger and better than the Channel Tunnel and its supporting operations.

Even after 20 years, you stand out as exceptional.

Now, I want to spend this morning talking to you about why I love infrastructure so much…

Why I think it’s so important to our economy.

And what the government is doing to make sure we have an infrastructure fit for the 21st century.

But first I want to pay tribute to two very important groups of people.

The first group is the group of people who actually built this thing.

Over 15,000 thousand men and women were employed in the construction phase of this project.

An incredible work force that has delivered a stunning piece of engineering.

Sadly, 10 people lost their lives and I think we should reflect for a brief moment on that sad sacrifice.

The second group of people is YOU.

The men and women who run what is a unique commercial enterprise.

You should all be incredibly proud of what you do…

And what you add to the regional and national economy.

Now I know that – quite understandably – your 20th anniversary will be a real opportunity to celebrate your success.

To celebrate your success so far, and to reflect on everything you’ve done for the UK economy.

But it’s also an opportunity to look forward to the possibilities for the future…

And I was very excited to hear that there is plenty of capacity to further increase the use of the tunnels.

By 2020, there will be another 500,000 trucks using the tunnel each year.

And another 4.5 million passengers…

And this is good news for British businesses looking to export.

Good news for the British public.

And good news for British jobs too.

As if that wasn’t impressive enough…

Eurotunnel is now embarking on expansion and on a major new energy project.

You’re not only focusing on delivering higher and higher passenger and freight numbers – important though that is.

You’re looking at how this unique infrastructure asset fits into the wider infrastructure of the UK and Europe.

And the plans I’ve been hearing about to increase capacity on the M20 motorway exit are as ambitious as they are crucial.

Those four new lanes will support the forecast growth in the use of the tunnel.

And they will also help smooth the flow of vehicles into, and out of, the south east of England.

I’m aware that in certain circumstances – problems with the ferries or exceptional peak demand – vehicles end up backing up onto the M20.

And I’ve been told that Kent Police have to implement ‘Operation Stack’ on such occasions and use the M20 as a giant lorry park…

Which causes massive disruption across East Kent.

So the expansion of your approaches will really benefit the local, regional and national economy.

It’s a great example of joint working between private business, and local and national government.

On top of that, the plans to broaden the number of routes by passenger trains using the tunnel are really significant.

Because for every Brit – like me – looking forward to a whole new range of weekend break destinations becoming accessible, they’ll be tourists and business people all across Europe looking to come to the UK. These new routes will also open up new opportunities for British business; increasing access to some key European markets.

And anyone who thinks Eurotunnel is just about transporting goods and people will soon need to think again.

Because your plan to run a 1 Giga-Watt electricity interconnector to link the French and UK power grids has huge potential.

I’ve heard today how this will help the UK to balance its supply and demand of energy.

And it’s a great example of optimising existing infrastructure for vital new uses.

Now while you’ve got 20 years of real success to look back on…

With plenty of exciting work to come!

But – while there is a hell of a lot more work to come from us – I’m pleased with the progress we’re making.

We made infrastructure a key priority.

I am driven by the knowledge that we can only build a stronger economy by investing in our infrastructure.

If we want to build a strong, thriving economy for the 21st century…

Then we need to have the infrastructure to support it.

And the government has to lead by example.

And we have to create the right climate for businesses to invest.

Research suggests our Gross Domestic Product (GDP) could have been 5% higher each year between 2000 and 2010 if our infrastructure had matched that of other leading global economies.

So, despite the need to tackle the deficit, we’ve prioritised vital capital investment.

Of course, infrastructure generates short-term benefits as it is built, improved or maintained.

It requires materials and services, with jobs created right along the supply chain.

And I’m told that Eurotunnel provides 830 direct – and 3 000 indirect – jobs in the UK.

But the long-term impact is far more significant.

New or improved infrastructure can give people access to more and better jobs.

It can improve the choice, price and quality of goods and services for consumers, helping to raise living standards.

And it can enable businesses to interact with a greater number of other firms.

In short, it supports economic growth.

It’s impossible to overstate this point.

The only way to build a stronger economy that will last.

The only way to improve living standards is for businesses to invest and for a substantial part of that investment to be in infrastructure.

You at Eurotunnel are a shining example of private investment.

So what are we as government doing to make sure that our roads and rail and digital and energy networks are amongst the best in the world?

Well, we’re providing high level planning.

We’re helping with local planning.

And – most importantly – we’re working on financing.

On high level planning, we published the first ever National Infrastructure Plan in 2010…

And we’ve refreshed it every year since.

This document sets out our analysis of the infrastructure that the UK needs, and our strategy for delivering it.

And we also publish an infrastructure pipeline…

Which acts as a prospectus for investors:

– identifying key infrastructure requirements for decades to come

– and alerting us to pinch-points in supply chain capacity, to make sure we are well equipped to meet our infrastructure needs

For example – and from where I stand this example seems particularly relevant – analysis of the pipeline indicates significant new tunnelling capability will be required to deliver key projects like HS2 and Thames Tideway Tunnel. Together with Crossrail, government has invested in a new tunnelling academy to ensure we build these key skills to meet the demand.

On local planning we’re committed to speeding up and streamlining the planning system.

And – amongst other reforms in this area – just this month we opened a new Planning Court.

This is a dedicated court to consider Judicial Reviews of major infrastructure schemes…

Which will prevent them from being held up by frustrating delays.

In 2011, if an application went all the way to a final hearing…

It would take – on average – just over a year.

Under the new Planning Court, this time will be cut in half.

On financing, as I’ve already said, the government is also prioritising public investment in infrastructure, including for the likes of High Speed 2.

Incidentally, I was delighted to travel to Folkestone on HS1 this morning.

Another example of infrastructure delivering economic growth.

I urge any critic or opponent of HS2 to look at the success of HS1.

But as a government we’re also helping kickstart vital privately financed infrastructure projects…

By providing financial guarantees – through our UK Guarantee Scheme – to help get them off the ground.

That scheme has helped pave the way for the Mersey Gateway Bridge, where construction will start imminently.

And guarantees are also supporting a coal to biomass conversion at Drax Power Station…

And the extension of the Northern Line to Battersea.

And earlier today the Secretary of State for Energy and Climate Change announced a package of investment in renewable energy infrastructure that will bring forward up to £12 billion of private sector investment, generating enough clean electricity to power over 3 million homes.

These are all helpful developments – and they are all having an impact.

But we need to be realistic…

And we need to realise that updating this country’s infrastructure won’t happen overnight.

It will take time, and it will require continued close working between government and the private sector.

But we are seeing strong progress.

Since 2010, over 2000 infrastructure projects or improvements to infrastructure been successfully completed.

That’s ten projects every week.

Projects large and small, all over the UK.

Don’t worry, I don’t plan to talk to you about each and every one.

But I do want to give you a flavour of what’s been delivered.

– flood defences, over 500 schemes have been completed – including vital defences protecting thousands of homes along the River Trent in Nottingham, and on the Humber in Stallingborough

– transport, over 650 upgrades are now complete – from the enormous new London Gateway Port, to hundreds of train station improvements up and down the country

– energy generation, over 850 projects have been completed….

Including the £1.5 billion London Array offshore wind project, the £1.3 billion gas-fired power station in Pembroke, and the world’s largest solar bridge at Blackfriars Station.

Those 850 projects also include many smaller scale green energy schemes of local significance. The Osney Lock Community hydro scheme in Oxford is a great example.

And there have been a number of communications, science, waste and water projects completed too.

So whether it’s a transport upgrade that makes a real, tangible impact on a local community…

Or a major energy scheme of national significance…

The government is delivering.

And by working in partnership with companies like Eurotunnel – people like you – we can continue to transform the UK’s infrastructure.

Together, we can provide the infrastructure this country needs to support jobs and growth.

You are a world leading example of what our engineers can achieve.

You are a world leading example of the positive economic advances that infrastructure delivers.

I have hugely enjoyed my visit here today in your 20th year.

Thank you so much for hosting me.

George Osborne – 2015 Budget Speech


Below is the text of the 2015 Budget Speech made by George Osborne, the Chancellor of the Exchequer, on 18 March 2015 in the House of Commons.


Mr Deputy Speaker,

Today, I report on a Britain that is growing, creating jobs and paying its way.

We took difficult decisions in the teeth of opposition and it worked – Britain is walking tall again.

Five years ago, our economy had suffered a collapse greater than almost any country.

Today, I can confirm: in the last year we have grown faster than any other major advanced economy in the world.

Five years ago, millions of people could not find work.

Today, I can report: more people have jobs in Britain than ever before.

Five years ago, living standards were set back years by the Great Recession.

Today, the latest projections show that living standards will be higher than when we came to office.

Five years ago, the deficit was out of control.

Today, as a share of national income it is down by more than a half.

Five years ago, we were bailing out the banks.

Today, I can tell the House: we’re selling more bank shares and getting taxpayers’ money back.

We set out a plan. That plan is working. Britain is walking tall again.

So Mr Deputy Speaker, the critical choice facing the country now is this: do we return to the chaos of the past?

Or do we say to the British people, let’s go on working through the plan that is delivering for you?

Today we make that critical choice: we choose the future.

We choose, as the central judgement of this Budget, to use whatever additional resources we have to get the deficit and the debt falling.

No unfunded spending.

No irresponsible extra borrowing.

For no short term giveaway can ever begin to help people as much as the long term benefits of a recovering national economy.

In the Emergency Budget I presented to this House 5 years ago I said we would turn Britain around – and in this last Budget of the Parliament we will not waiver from that task.

For we choose the future.

Our goal is for Britain to become the most prosperous major economy in the world, with that prosperity widely shared.

So we choose economic security.

This Budget commits us to the difficult decisions to eliminate our deficit and get our national debt share falling.

We choose jobs.

This Budget does more to back business and make work pay, so we create full employment.

We choose the whole nation.

The Budget makes new investments in manufacturing and science and the northern powerhouse for a truly national recovery.

We choose responsibility.

This Budget takes further action to support savers and pensioners.

We choose aspiration.

This Budget backs the self-employed, the small business-owner and the homebuyer.

We choose families.

This Budget helps hard-working people keep more of the money they have earned.

This is a Budget that takes Britain one more big step on the road from austerity to prosperity.

We have a plan that is working – and this is a Budget that works for you.

Economic forecasts

Mr Deputy Speaker, the British economy is fundamentally stronger than it was five years ago – and that is reflected in the latest forecasts from the Office for Budget Responsibility.

Today, figures are produced with independence and integrity by Robert Chote and his team, and I thank them for their work.

The OBR confirm today that at 2.6%, Britain grew faster than any other major advanced economy in the world last year.

That is fifty per cent faster than Germany, three times faster than the euro-zone – and seven times faster than France.

There are some who advise us to abandon our plan and pursue the French approach.

I prefer to follow the advice the Secretary General of the OECD gave us all last month: “Britain has a long term economic plan – and it needs to stick with it”

“A long term economic plan” – now there’s someone with a way with words.

We need to stick with that plan at a time when global economic risks are rising.

The biggest development since the Autumn Statement has been the further sharp fall in the world oil price.

This is positive news for the global economy. But the overall boost this provides has not yet offset the rising geo-political uncertainty it causes.

And the Eurozone continues to stagnate.

So at this Budget, the OBR have once again revised down the growth of the world economy, revised down the growth of world trade and revised down the prospects for the Eurozone.

And they warn us that the current stand-off with Greece could be very damaging to the British economy.

I agree with that assessment.

A disorderly Greek exit from the euro remains the greatest threat to Europe’s economic stability. It would be a serious mistake to underestimate its impact on the UK, and we urge our Eurozone colleagues to resolve the growing crisis.

The problems in Europe remind us why Britain needs to expand our links with the faster growing parts of the world.

We’ve made major progress this Parliament. I can report that the trade deficit figures published last week are the best for 15 years.

And we will do even more – so today I am again increasing UKTI’s resources to double the support for British exporters to China.

We have also decided to become the first major western nation to be a prospective founding member of the new Asian Infrastructure Investment Bank, because we think you should be present at the creation of these new international institutions.

Mr Deputy Speaker, you would expect weaker world growth, weaker world trade and weaker European growth to lead to weaker growth here in the UK.

However, the OBR haven’t revised down Britain’s economic forecasts – they have revised them up.

A year ago, they forecast growth in 2015 at 2.3%.

In the Autumn Statement that was revised up to 2.4%.

Today, I can confirm GDP growth this year is forecast to be higher still, at 2.5%.

It is also revised up next year, to 2.3%.

That is where it remains for the following two years, before reaching 2.4% in 2019.

So the OBR report growth revised up – and their numbers confirm that growth is broadly based.

For we are replacing the disastrous economic model we inherited.

Between 1997 and 2010, investment accounted for less than one fifth of Britain’s economic growth – four fifths came from debt-fuelled household consumption.

Meanwhile manufacturing halved as a share of our national economy, and the gap between the North and South grew ever larger.

I can report since 2010:

Business investment has grown four times faster than household consumption.

Britain’s manufacturing output has grown more than four and a half times faster than it did in the entire decade before the crisis.

And over the last year, the North grew faster than the South.

We are seeing a truly national recovery.


Mr Deputy Speaker let me turn now to the rest of the forecasts.

This morning we saw the latest jobs numbers.

It is a massive moment. Britain has the highest rate of employment in its history.

A record number of people in work.

More women in work than ever before.

And the claimant count rate is at its lowest since 1975.

For years governments have talked about full employment – the government is moving towards achieving it.

Unemployment today has fallen by another 100,000.

And compared to the Autumn Statement, the OBR now expect unemployment this year to be even lower.

It is set to fall to 5.3% – down almost a whole 3 percentage points from 2010.

When we set out our plan, people predicted that a million jobs would be lost.

Instead, over 1.9 million new jobs have been gained.

Because our long term plan is based on the premise that if you provide economic stability, if you reform welfare and make work pay, and if you back business, then you will create jobs too.

Today’s figures show that since 2010, 1000 more jobs have been created every single day.

The evidence is plain to see – Britain is working.

And Mr Deputy Speaker, what about those who say “the jobs aren’t real jobs; they’re all part time; they’re all in London.”


How many of the jobs are full time? 80%

How many of the jobs are in skilled occupations? 80%

And where is employment growing fastest? The North West.

Where is a job being created every ten minutes? The Midlands.

And which county has created more jobs than the whole of France? The great county of Yorkshire

We are getting the whole of Britain back to work with a truly national recovery.

Living standards

Mr Deputy Speaker, it is only by growing our economy, dealing with our debts and creating jobs, that we can raise living standards.

To the question of whether people are better off at the end of this Parliament than they were five years ago we can give the resounding answer “yes”

You can measure it by GDP per capita, and the answer is yes – up by 5%

Or you can use the most up-to-date and comprehensive measure of living standards which is Real Household Disposable Income per capita.

In other words, how much money families have to spend after inflation and tax.

It is the living standards measure used by the Office for National Statistics and by the OECD.

On that measure I can confirm, on the latest OBR data today, living standards will be higher in 2015 than in 2010.

And it confirms they are set to grow strongly every year for the rest of the decade.

The British people for years paid the heavy price of the great recession.

Now, the facts show households on average will be around £900 better off in 2015 than they were in 2010 – and immeasurably more secure for living in a country whose economy is not in crisis anymore, but is instead growing and creating jobs.

Mr Deputy Speaker because we have strong growth and a strong economy we can also afford real increases in the National Minimum Wage.

This week we accept the recommendations of the Low Pay Commission that the National Minimum Wage should rise to £6.70 this autumn, on course for a minimum wage that will be over £8 by the end of the decade.

And we’ve agreed the biggest increase ever in the apprentice rate.

It’s the oldest rule of economic policy. It’s the lowest paid who suffer most when the economy fails and it’s the lowest paid who benefit when you turn that economy around.


Mr Deputy Speaker household incomes also go further because we now have the lowest inflation on record.

The OBR today revise down their forecast for inflation this year to just 0.2%, and revise it down for the following three years.

It is driven by falling world oil and food prices. Not by the kind of stagnation we have seen on the continent.

But we will remain vigilant.

I am today confirming that the remit for the Monetary Policy Committee for the coming year remains the 2% symmetric CPI inflation target.

And I am also confirming the remit for our new Financial Policy Committee too, so that this time we spot the financial risks in advance.

The fall in food prices is good for families; but it reminds us of the challenge our farmers face from volatile markets.

The National Farmers Union have long argued they should be allowed to average their incomes for tax purposes over five years; I agree and in this Budget we will make that change.

We will also use this opportunity to lock in the historically low interest rates for the long term.

I can tell the House that we will increase the number of long-dated gilts that we sell.

We’ll also redeem the last remaining undated British Government bonds in circulation.

We’ll have paid off the debts incurred in the South Sea Bubble, the First World War, the debt issued by Henry Pelham, George Goschen and William Gladstone.

And Mr Deputy Speaker, since the pound goes further these days, now is a good time to confirm the design of the new one pound coin.

Based on the brilliant drawing submitted by 15 year old David Pearce, a school pupil from Walsall, the new 12 sided pound coin will incorporate emblems from all four nations – for we are all part of one United Kingdom.

Banks and debt

Mr Deputy Speaker, I now turn to the national debt.

Lower unemployment means less welfare.

Compared to the Autumn Statement, welfare bills are set to be an average of £3 billion a year lower.

Lower inflation means lower interest charges on government gilts; those interest charges are now expected to be almost £35 billion lower than just a few months ago.

Rising unemployment, and compounding debt interest, contributed to our national debt problem.

But they weren’t the only cause.

It sent the national debt rocketing up by a third.

We have already sold the branches of Northern Rock; and raised £9 billion from Lloyds shares. Now we go further.

Today I can announce that we are launching a sale of £13 billion of the mortgage assets we still hold from the bailouts of Northern Rock and of Bradford and Bingley.

Lloyds bank has returned to profit and is paying a dividend – so we can continue our exit from that bailout too.

We will sell at least a further £9 billion of Lloyds shares in the coming year.

The bank sales, lower debt interest and lower welfare bills presents us with a choice.

We could treat it as a windfall, even though we know the public finances need further repair.

And with an election looming, some of my immediate predecessors may have been tempted to do this.

But that would be deeply irresponsible.

We’d be spending money we didn’t really have.

Racking up borrowing our country couldn’t afford.

We’d be repeating all the mistakes the last government made – instead of fixing those mistakes.

So today, the central judgement of this Budget is this: we will use the resources from the bank sales and the lower interest payments and the lower welfare bills to pay down the national debt.

We put economic security first.

For higher national debt leaves our nation exposed, harms potential growth and costs taxpayers billions of pounds in debt interest.

That would be throwing away billions of pounds we should be using to fund our public services and lower taxes.

Five years ago, national debt was soaring.

That’s why in my first Budget I set a target that we would have national debt falling as a share of GDP by 2015-16, the last year of this Parliament.

The Eurozone crisis made that task here at home all the more difficult, and for much of the last five years it looked like we might fall short.

I can announce this to the House:

The hard work and sacrifice of the British people has paid off.

The original debt target I set out in my first Budget has been met.

We will end this Parliament with Britain’s national debt share falling

The sun is starting to shine – and we are fixing the roof.

So the OBR report today that debt as a share of GDP falls from 80.4% in 2014-15; to 80.2% in the year 2015-16.

And it keeps falling to 79.8% in 2016-17; then down to 77.8% the following year, to 74.8% in 2018-19 before it reaches 71.6% in 2019-20.

Mr Deputy Speaker, national debt as a share of our national income has been increasing every single year since 2001.

Those thirteen years amount to the longest year-on-year rise in our national debt since the end of the seventeenth century.

Today we bring that record to an end.

And there’s a consequence for our fiscal plans.

Because the national debt share is falling a year earlier than forecast at the Autumn Statement – the squeeze on public spending ends a year earlier too.

In the final year of this decade, 2019-20, public spending will grow in line with the growth of the economy.

We can do that while still running a healthy surplus to bear down on our debt.

A state neither smaller than we need; nor bigger than we can afford.

For those interested in the history of these things, that will mean state spending as a share of our national income the same size as Britain had in the year 2000.

That’s the year before spending got out of control and the national debt started its inexorable rise.


Mr Deputy Speaker, when we came to office, the deficit stood at more than ten per cent of our national income – one of the highest of any major advanced economy and the largest in our peacetime history.

The IMF says we’ve achieved the largest, most sustained reduction in our structural deficit of any major economy.

Today, the OBR confirm that it now stands at less than half of the deficit we inherited.

But at 5% this year, it’s still far too high – and it must come down.

With our plan it does.

The deficit falls to 4% in 2015-16; then down to 2% the following year; and down again to 0.6% the year after that.

The deficit is lower in every year than at the Autumn Statement.

In 2018-19, Britain will have a budget surplus of 0.2%; followed by a forecast surplus of 0.3% in 2019-20.

We will also comfortably meet our fiscal mandate and Britain will be running a surplus for the first time in 18 years.

That leads to borrowing. Every one of the borrowing numbers is lower than at the Autumn Statement too.

We inherited annual borrowing of over £150 billion from the last government.

This year borrowing is set to fall to £90.2 billion; a billion lower than expected at the Autumn Statement.

It falls again in 2015-16 to £75.3 billion; then £39.4 billion the year after that, before falling to £12.8 billion – in total that’s £5 billion less borrowing than we forecast just three months ago.

In 2018-19, we reach an overall surplus of £5.2 billion – a £1 billion improvement compared to December.

In 2019-20 we are forecast to run a surplus of £7 billion. So growth is up.

Unemployment is down.

Borrowing is down in every year of the forecast.

We reach a surplus.

All contributing to a national debt now falling as a share of national income. Out of the red and into the black – Britain is back paying its way in the world.


Mr Deputy Speaker, lower borrowing and falling debt as a share of GDP will only continue with a credible plan to control public spending and welfare.

As we end the Parliament, we can measure the scale of the achievement.

The administrative costs of central government will be down by 40%.

We have legislated for welfare savings of over £21 billion a year.

And because savings have been driven by efficiency and reform, the quality of public services has not gone down – it’s gone up.

Satisfaction with the NHS is rising year on year.

Crime is down 20%.

One million more children attend good or outstanding schools.

But the job of repairing our public finances is not done.

And here’s a very important point the country needs to understand.

National debt as a share of GDP is now falling.

We’ll only keep it falling if we commit to the fiscal path set out in this Budget.

If we deviate from this path, if we go slower or borrow more, the national debt share will not keep falling – it will start rising again.

After all the hard work of the British people over the last 5 years to reach this point, that reversal would be a tragedy.

Britain is on the right track; we mustn’t turn back

And in order to deliver that falling debt share we need to achieve the £30 billion further savings that are necessary by 2017-18.

I am clear exactly how that £30 billion can be achieved.

£13 billion from government departments.

£12 billion from welfare savings.

£5 billion from tax avoidance, evasion and aggressive tax planning.

We have done it in this Parliament; we can do it in the next.


The distributional analysis we publish today confirms that that the decisions since 2010 mean the rich are making the biggest contribution to deficit reduction.

I said we would all be in this together and here is the proof.

Compared to five years ago:

Inequality is lower.

Child poverty is down.

Youth unemployment is down.

Pensioner poverty is at its lowest level ever.

The gender pay gap has never been smaller.

Payday loans are capped.

And zero hours contracts regulated.

Even more than this, opportunity has increased; the number of university students from disadvantaged backgrounds is at a record high, apprenticeships have doubled and there are fewer workless households than ever before.

And in this Budget we are providing funding for a major expansion of mental health services for children and those suffering from maternal mental illness.

Those who suffer from these illnesses have been forgotten for too long.

Not anymore.

We stand for opportunity for all.

And we have created a fairer tax system. Further proof we are all in this together.

The share of income tax paid by the top 1% of taxpayers is projected to rise from 25% in 2010 to over 27% this year – that is higher than any one of the thirteen years of the last government.

We’re getting more money from the people paying the top rate of tax.

Because we understand that if you back enterprise, you raise more revenue.

And the House will also want to know this – the lower paid 50% of taxpayers now pay a smaller proportion of income tax than at any time under the previous government.

We are delivering a truly national recovery.

Tax avoidance

Mr Deputy Speaker in this Budget everything we spend will be paid for and this requires the following decisions.

We have already taken steps to curb the size of the very largest pension pots.

But the gross cost of tax relief has continued to rise through this Parliament, up almost £4 billion. That is not sustainable.

So from next year, we will further reduce the Lifetime Allowance from £1.25 million to £1 million.

This will save around £600 million a year.

Fewer than 4% of pension savers currently approaching retirement will be affected.

However, I want to ensure those still building up their pension pots are protected from inflation, so from 2018 we will index the Lifetime Allowance.

We have had representations that we should also restrict the Annual Allowance for pensions and use the money to cut tuition fees.

I have examined this proposal.

It involves penalising moderately-paid, long-serving public servants, including police officers, teachers and nurses, and instead rewarding higher paid graduates.

In 2010, city bankers boasted of paying lower tax rates than their cleaners; the rich routinely avoided stamp duty; and foreigners paid no capital gains tax.

We’ve changed all that – and it was this Prime Minister who put tackling international tax evasion at the top of the agenda at the G8.

We will now legislate for the new Common Reporting Standard we have got agreed around the world.

Our new Diverted Profits Tax is aimed at large multinationals who artificially shift their profits offshore.

I can confirm that we will legislate for it next week and bring it into effect at the start of next month.

I am also today amending corporation tax rules to prevent contrived loss arrangements.

And we’ll no longer allow businesses to take account of foreign branches when reclaiming VAT on overheads – making the system simpler and fairer.

We will close loopholes to make sure Entrepreneurs Relief is only available to those selling genuine stakes in businesses.

We will issue more accelerated payments notices to those who hold out from paying the tax that is owed.

And we will stop employment intermediaries exploiting the tax system to reduce their own costs by clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence – while we protect those genuinely self-employed.

Taken together, all the new measures against tax avoidance and evasion will raise £3.1 billion over the forecast period.

I can also tell the House that we will conduct a review on the avoidance of inheritance tax through the use of deeds of variation. It will report by the autumn.

We will seek a wide range of views.

Mr Deputy Speaker, my RHF the Chief Secretary will tomorrow publish further details of our comprehensive plans for new criminal offences for tax evasion and new penalties for those professionals who assist them.

Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end.


Because we seek a truly national recovery, today I also ask our banking sector to contribute more.

Financial services are one of Britain’s most important and successful industries, employing people in every corner of the country.

We take steps to promote competition, back FinTech and encourage new business like global reinsurance.

But as our banking sector becomes more profitable again, I believe they can make a bigger contribution to the repair of our public finances.

I am today raising the rate of the bank levy to 0.21 per cent. This will raise an additional £900 million a year.

We will also stop banks from deducting from corporation tax the compensation they make to customers for products they have been mis-sold, like PPI. Taken together these new banking taxes will raise £5.3 billion across the forecast.

The banks got support going into the crisis; now they must support the whole country as we recover from the crisis.

Libor and charities

Mr Deputy Speaker, in each Budget we have used the LIBOR fines paid by those who demonstrated the very worst values to support those who represent the very best of British values.

Today I can announce a further £75 million of help.

Last week’s service of commemoration reminded us all of the debt we owe to those brave British servicemen and women who served in Afghanistan.

We will provide funds to the regimental charities of every regiment that fought in that conflict; and we will contribute funding to the permanent memorial to those who died there and in Iraq.

And in the 75th anniversary year of the Battle of Britain we will help to renovate the RAF museum at Hendon, the Stow Maries Airfield and the Biggin Hill Chapel Memorial so future generations are reminded of the sacrifice of our airmen in all conflicts.

We will provide £25 million to help our eldest veterans, including nuclear test veterans.

Many members on this side have also written to me asking for support for their local air ambulances.

We’ve backed brilliant local charities in the past, and we do so again today – with funds for new helicopters for the Essex & Herts, East Anglian, Welsh and Scottish air ambulances, and for the Lucy Air Ambulance that transports children requiring urgent care.

Our blood bike charities also do an incredible job. I am today responding to the public campaign and refunding their VAT.

We’ll also set aside £1 million to help buy defibrillators for public places, including schools, and support training in their use to save more lives.

Talking about people who save lives, and who sometimes sacrifice their own life to do so, we will also correct the historic injustice to spouses of police officers, firefighters, and members of the intelligence services who lose their lives on duty.

And there’s additional money today to support the fight against terrorism.

The £15 million Church Roof Fund I set aside at the Autumn Statement to support church roof appeals has been heavily oversubscribed – so I am today more than trebling it.

Apparently, we’re not the only people who want to fix the roof when the sun is shining.

Every weekend thousands of people go out and raise sums for their local charities across Britain through sponsored events and high-street collections.

I am significantly extending the scheme I introduced that allows charities to claim automatic gift-aid on those donations – increasing it from the first £5,000 they raise to £8,000.

That will benefit over 6,500 small charities.

And, Mr Deputy Speaker, we could not let the 600th anniversary of Agincourt pass without commemoration.

The battle of Agincourt is, of course, celebrated by Shakespeare as a victory secured by a “band of brothers” It is also when a strong leader defeated an ill-judged alliance between the champion of a united Europe and a renegade force of Scottish nationalists.

So it is well worth the £1 million we will provide to celebrate it.

National recovery

Mr Deputy Speaker

Our country does not rest on its past glories.

Within just fifteen years we have the potential to overtake Germany and have the largest economy in Europe.

Five years ago, that would have seemed hopelessly unrealistic; economic rescue was the limit of our horizons.

Today, our goal is for Britain to become the most prosperous of any major economy in the world in the coming generation, with that prosperity widely shared across our country.

London is the global capital of the world, and we want it to grow stronger still.

Today we confirm: new investment in transport; regeneration from Brent Cross to Croydon; new powers for the Mayor over skills and planning; and new funding for the London Land Commission to help address the acute housing shortage in the capital.

For we don’t pull the rest of the country up, by pulling London down.

Instead we will build on London’s success by building the Northern Powerhouse.

Working across party lines, and in partnership with the councils of the north, we are this week publishing a comprehensive Transport Strategy for the North.

We are funding the Health North initiative from the great teaching hospitals and universities there.

We are promoting industries from chemicals in the North East to Tech in the North West

And I can today confirm agreement with the West Yorkshire Combined Authority for a new city deal.

Our agreement with Greater Manchester on an elected mayor is the most exciting development in civic leadership for a generation – with the devolution of power over skills, transport and now health budgets.

I can announce today that we have now reached provisional agreement to allow Greater Manchester to keep 100% of the additional growth in local business rates as we build up the Northern Powerhouse.

For where cities grow their economies through local initiatives, let me be clear: we will support and reward them.

We will also offer the same business rates deal to Cambridge and the surrounding councils, and my door is open to other areas too.

For our ambition for a truly national recovery is not limited to building a Northern Powerhouse. We back in full the long term economic plans we have for every region.

The Midlands is an engine of manufacturing growth. So we are today giving the go-ahead to a £60 million investment in the new Energy Research Accelerator and confirming the new national energy catapult will be in Birmingham.

And we’re going to back our brilliant automotive industry by investing £100 million to stay ahead in the race to driverless technology.

And to encourage a new generation of low emission vehicles we will increase their company car tax more slowly than previously planned, while increasing other rates by 3% in 2019-20.

We’re also connecting up the South West, with over £7 billion of transport investment, better roads, support for air links, and – I can confirm today – a new rail franchise which will bring new intercity express trains and greatly improved rail services.

We are confirming the introduction of the first 20 Housing Zones that will keep Britain building, along with the extension of 8 enterprise zones across Britain, with new zones in Plymouth and Blackpool too.

We’re giving more power to Wales. We’re working on a Cardiff city deal and we are opening negotiations on the Swansea Bay Tidal Lagoon.

The Severn Crossings are a vital link for Wales. I can tell the House we will reduce the toll rates from 2018, and abolish the higher band for small vans and buses.

It’s a boost for the drivers of white vans. The legislation devolving corporation tax to Northern Ireland passed the House of Lords yesterday. We now urge all parties to commit to the Stormont House agreement, of which it was part.

In Scotland, we will continue working on the historic devolution agreement, implement the Glasgow City Deal, and open negotiations on new city deals for Aberdeen and Inverness.

While the falling oil price is good news for families across the country, it brings with it challenges for hundreds of thousands whose jobs depend on the North Sea.

Thanks to the field allowances we’ve introduced we saw a record £15 billion of capital investment last year in the North Sea.

But it’s clear to me that the fall in the oil price poses a pressing danger to the future of our North Sea industry – unless we take bold and immediate action.

I take that action today.

First, I am introducing from the start of next month a single, simple and generous tax allowance to stimulate investment at all stages of the industry.

Second, the government will invest in new seismic surveys in under-explored areas of the UK Continental Shelf.

Third, from next year, the Petroleum Revenue Tax will be cut from 50% to 35% to support continued production in older fields.

Fourth, I am with immediate effect cutting the Supplementary Charge from 30% to 20%, and backdating it to the beginning of January.

It amounts to £1.3 billion of support for the industry.

And the OBR assesses that it will boost expected North Sea oil production by 15% by the end of the decade.

Mr Deputy Speaker, it goes without saying that an independent Scotland would never have been able to afford such a package of support.

But it is one of the great strengths of our three-hundred year old union that just as we pool our resources, so too we share our challenges and find solutions together.

For we are one United Kingdom.

Science and innovation

Mr Deputy Speaker, we back oil and gas and we back our heavy industry too, like steel and paper mills.

I’ve listened to the Engineering Employers, and I will bring forward to this autumn part of our compensation for energy intensive plants.

But since we aim to be the most prosperous major economy in the coming generation, then we must support the latest insurgent industries too.

So we take steps to put Britain at the forefront of the on-line sharing economy.

Our creative industries are already a huge contributor to the British economy – and today we make our TV and film tax credits more generous, expand our support for the video games industry and we launch our new tax credit for orchestras.

Britain is a cultural centre of the world – and with these tax changes I’m determined we will stay in front.

And in the week after Cheltenham, we support the British racing industry by introducing a new horse race betting right.

Local newspapers are a vital part of community life – but they’ve had a tough time in recent years – so today we announce a consultation on how we can provide them with tax support too.

Future economic success depends on future scientific success. So we’ll add to the financial support I announced at the Autumn Statement for postgraduates, with new support for PhDs and research-based masters degrees.

We’re also committing almost £140 million to world class research across the UK into the infrastructure and cities of the future, and giving our national research institutes new budget freedoms.

And we’ll invest in what is known as the Internet of Things. This is the next stage of the information revolution, connecting up everything from urban transport to medical devices to household appliances.

So should – to use a ridiculous example – someone have two kitchens, they will be able to control both fridges from the same mobile phone.

All these industries depend on fast broadband.

We’ve transformed the digital infrastructure of Britain over the last five years.

Over 80% of the population have access to superfast broadband and there are 6 million customers of 4G that our auction made possible.

Today we set out a comprehensive strategy so we stay ahead.

We’ll use up to £600 million to clear new spectrum bands for further auction, so we improve mobile networks.

We’ll test the latest satellite technology so we reach the remotest communities.

We’ll provide funding for Wi-Fi in our public libraries, and expand broadband vouchers to many more cities, so no-one is excluded.

And we’re committing to a new national ambition to bring ultrafast broadband of at least 100 megabits per second to nearly all homes in the country, so Britain is out in front

Small business

Mr Deputy Speaker,

You can’t create jobs without successful business. As well as the right infrastructure, businesses also need low, competitive taxes.

In two weeks’ time, we will cut corporation tax to 20%, one of the lowest rates of any major economy in the world.

There are those here who are committed to putting the rate of corporation tax up.

They should know that this would be the first increase in this tax rate since 1973, and a job-destroying and retrograde step for this country to take.

And rather than increasing the jobs tax as some propose, we’re going to go on cutting it.

This April we will abolish National Insurance for employing under 21s;

Next April we will abolish it for employing a young apprentice;

And I can confirm today that 1 million small businesses have now claimed our new Employment Allowance.

From this April we’re also extending our small business rate relief and our help for the high street.

But in my view the current system of Business Rates has not kept pace with the needs of a modern economy and changes to our town centres, and needs far-reaching reform.

Businesses large and small have asked for a major review of this tax – and this week that’s what we’ve agreed to do.

The boost I provided to the Annual Investment Allowance comes to an end at the end of the year.

A better time to address this is in the Autumn Statement.

However, I am clear from my conversations with business groups that a reduction to £25,000 would not be remotely acceptable – and so it will be set at a much more generous rate.

Today I’m announcing changes to the Enterprise Investment Schemes and Venture Capital Trusts to ensure they are compliant with the latest state aid rules and increasing support to high growth companies.

Mr Deputy Speaker, businesses, like people, want their taxes to be low. They also want them to be simple to pay.

We set up the Office of Tax Simplification at the start of this Parliament and I want to thank Michael Jack and John Whiting for the fantastic work they have done.

To support five million people who are self-employed, and to make their tax affairs simpler, in the next Parliament we will abolish Class 2 National Insurance contributions for the self-employed entirely.

And today we can bring simpler taxes to many more.

12 million people and small businesses are forced to complete a self-assessment tax return every year. It is complex, costly and time-consuming.

So, today I am announcing this.

We will abolish the annual tax return altogether.

Millions of individuals will have the information the Revenue needs automatically uploaded into new digital tax accounts.

A minority with the most complex tax affairs will be able to manage their account on-line.

Businesses will feel like they are paying a simple, single business tax – and again, for most, the information needed will be automatically received.

A revolutionary simplification of tax collection. Starting next year.

Because we believe people should be working for themselves, not working for the tax man.

Tax really doesn’t have to be taxing, and this spells the death of the annual tax return.


Mr Deputy Speaker, we want to help families with simpler taxes – and with lower taxes too.

So let me turn now to duties.

I have no changes to make to the duties on tobacco and gaming already announced.

Last year, I cut beer duty for the second year in a row and the industry estimates that helped create 16,000 jobs.

Today I am cutting beer duty for the third year in a row – taking another penny off a pint.

I am cutting cider duty by 2% – to support our producers in the West Country and elsewhere.

And to back one of the UK’s biggest exports, the duty on Scotch whisky and other spirits will be cut by 2% as well.

Wine duty will be frozen.

More pubs saved, jobs created, families supported – and a penny off a pint for the third year in a row.


Mr Deputy Speaker,

I also want to help families with the cost of filling up a car.

It’s a cost that bears heavily on small businesses too.

The last government’s plans for a fuel duty escalator meant taxes would rise above inflation every year.

But I want to make sure that the falling oil price is passed on at the pumps.

So I am today cancelling the fuel duty increase scheduled for September.

Petrol frozen again. It’s the longest duty freeze in over twenty years.

It saves a family around £10 every time they fill up their car

Personal Allowance

Mr Deputy Speaker.

We believe that work should pay – and families should keep more of the money they earn.

When we came to office, the personal tax-free allowance stood at just £6,500.

We set ourselves the goal – even in difficult times – of raising that allowance to £10,000 by the end of the parliament

We have more than delivered on that promise.

In two weeks’ time it will reach £10,600

That’s a huge boost to the incomes of working people and one of the reasons we have a record number of people in work.

Today I can announce that we go further.

The personal tax-free allowance will rise to £10,800 next year – and then to £11,000 the year after.

That’s £11,000 you can earn before paying any income tax at all.

It means the typical working taxpayer will be over £900 a year better off.

It’s a tax cut for 27 million people and means we’ve taken almost 4 million of the lowest paid out of income tax altogether.

Because we pass on the full gains of this policy, I can make this announcement today

For the first time in 7 years, the threshold at which people pay the higher tax rate will rise not just with inflation – but above inflation.

It will rise from £42,385 this year to £43,300 by 2017-18.

So an £11,000 personal allowance.

An above inflation increase in the higher rate.

A down-payment on our commitment to raise the personal allowance to £12,500 and raise the Higher Rate threshold to £50,000.

An economic plan working for you.

And in this Budget the rate of the new transferable tax allowance for married couples will rise to £1,100 too.

That’s the allowance coming in just two weeks’ time to help over 4 million couples – help that they would take away, but we on this side are proud to provide.


Mr Deputy Speaker,

This Budget takes another step to move Britain from a country built on debt, to a country built on savings and investment.

Last year I unlocked pensions with freedom for millions of savers.

But there is more to do to create a savings culture.

Today I announce four major new steps in our savings revolution.

They are based on the principles that cutting taxes increases the return on savings, and that people should have freedom to choose how they use those savings.

First, we will give five million pensioners access to their annuity.

For many an annuity is the right product, but for some it makes sense to access their annuity now.

So we’re changing the law to make that possible.

From next year the punitive tax charge of at least 55% will be abolished. Tax will be applied only at the marginal rate.

And we’ll consult to ensure pensioners get the right guidance and advice.

So freedom for five million people with an annuity.

Second, we will introduce a radically more Flexible ISA.

In 2 weeks’ time the changes I’ve already made mean people will be able to put £15,240 into an ISA.

But if you take that money out – you lose your tax free entitlement, and so can’t put it back in.

This restricts what people can do with their own savings – but I believe people should be trusted with their hard earned money.

With the fully Flexible ISA people will have complete freedom to take money out, and put it back in later in the year, without losing any of their tax-free entitlement

It will be available from this autumn and we will also expand the range of investments that are eligible.

Third, we’re going to take two of our most successful policies and combine them to create a brand new Help to Buy ISA.

And we do it to tackle two of the biggest challenges facing first time buyers – the low interest rates when you build up your savings, and the high deposits required by the banks.

The Help to Buy ISA for first time buyers works like this.

For every £200 you save for your deposit, the Government will top it up with £50 more.

It’s as simple as this – we’ll work hand in hand to help you buy your first home.

This is a Budget that works for you.

A 10% deposit on the average first home costs £15,000, so if you put in up to £12,000 – we’ll put in up to £3,000 more.

A 25% top-up is equivalent to saving for a deposit from your pre-tax income – it’s effectively a tax cut for first time buyers.

We’ll work with industry so it’s ready for this autumn and we’ll make sure you can start saving for it right now.

So Mr Deputy Speaker:

Access for pensioners to their annuities.

A new Flexible ISA.

Backing home ownership with a first time buyer bonus.

And one other reform.

Today I introduce a new Personal Savings Allowance that will take 95% of taxpayers out of savings tax altogether.

From April next year the first £1,000 of the interest you earn on all of your savings will be completely tax-free.

To ensure higher rate taxpayers enjoy the same benefits, but no more, their allowance will be set at £500.

People have already paid tax once on their money when they earn it. They shouldn’t have to pay tax a second time when they save it.

With our new Personal Savings Allowance, 17 million people will see the tax on their savings not just cut, but abolished.

An entire system of tax collection can be scrapped.

At a stroke we create tax free banking for almost the entire population.

And build the economy on savings not debt.


Mr Deputy Speaker, five years ago I had to present to this House an Emergency Budget.

Today I present the Budget of an economy stronger in every way from the one we inherited.

The Budget of an economy taking another big step from austerity to prosperity.

We cut the deficit – and confidence is returning.

We limited spending, made work pay, backed business – and growth is returning.

We gave people control over their savings and helped people own their own homes – and optimism is returning.

We have provided clear decisive economic leadership – and from the depths Britain is returning.

The share of national income taken up by debt – falling.

The deficit down.

Growth up.

Jobs up.

Living standards on the rise.

Britain on the rise.

This is the Budget for Britain.

The Comeback Country.

Edward Timpson – 2015 Speech on Sport



Below is the text of the speech made by Edward Timpson, the Parliamentary Under Secretary of State for Children and Families, on 18 March 2015 at the East Midland Conference Centre.


Good morning, it’s great to be able to join you this morning.

And I’d like to start by saying a genuine thank you to all the county sports partnerships (CSPs) represented here. And in particular for your ongoing work to help schools maximise the impact of the primary PE and sport premium. Your guidance is vital, not just to the brokering of relationships between schools, coaches, clubs and leisure providers; but in passing on love of sport to the next generation. Something I hope we share.

Because, if you haven’t already guessed, or seen it before, that’s me, imitating my childhood idol, Big Joe Corrigan – Man City and sometimes England goalie from late the 70s/early 80s. In my eyes, nobody came close to matching his brilliance – even when he conceded the goal that put Tottenham ahead 3-2 in the 1981 FA Cup final replay. Big Joe took away man of the match. To me, he’d always be unbeatable.

I’d hazard a guess he’s not your sporting hero, but I’m sure each of you has your own version of this picture, because it’s our individual love of sport that brings us all together today. We’re united by those little individual passions that ignite the whole sporting industry – and recognise that together we can achieve so much more.

Unless we pass that passion on to the next generation, we’ll never know what kind of talent walks through the doors of our schools day in and day out.

Because every child, in every part of the country, deserves to find that one sport they are really passionate about – and I’m convinced that CSPs are the people to turn that national vision into a local reality. Let me explain why.


National partners have worked hard across the sporting fraternity to agree a consensus on what our priorities should be, and where our efforts need to be focused. When it comes to sport and physical activity, with a single, clear message, schools will be in no doubt about what’s expected of them. For every child in every school, and for future generations to enjoy the same benefits.

That single, overriding priority has got to be sustainability. With that in mind, as a government we’ve targeted £450 million of funding over 3 years into the PE and sport premium, to improve sports for children in primary schools across the country.

Since 2013, 18,000 schools have received funding that’s enabled those thousands of schools to invest in and improve the quality of sports they offer – and provide access to a wider variety of activities for their children.

Independent research by Natcen into the use and impact of the premium has so far found a 91% increase in the quality of PE teaching – and a 13-minute increase in curriculum time being dedicated to PE.

That’s brilliant progress. But to really embed and sustain that progress, the Prime Minister has since personally pledged £150 million of funding a year every year for the premium, until at least 2020. And although, sadly, I may have moved on, CSPs are in it for the longhaul.


That’s why it’s so important that schools from Cornwall to Cumbria, and everywhere in between, work with their CSP to achieve our goal of sustainability. These local knowledge hubs have been built through your expertise as coaches, club leaders, and community networks. And with such a powerful reach, you’ve so much to offer schools.

Cumbria’s Impact Factor Project has not only considered the provision of the premium, but measured the impact of it too. Because the work doesn’t stop when the money’s been spent. In many respects, that’s when the work begins – to assess, to evaluate and to prove that the money is making a real difference to the sporting achievements of young people.

Howard Todd’s excellent work has been cascaded to Cumbrian subject leaders, and helped them to devise realistic lesson plans, evaluate what external providers have contributed. And crucially, to put the child back at the centre of PE lessons.

And at the opposite end of the country there’s equally impressive work going on. This year’s seen the final of the Cornish indoor rowing championships in the Cornish school games. With 255 competitors from 15 schools and colleges, it’s a record year for them.

Using the ‘go race indoors’ framework, the event brought together British Rowing, the Cornwall Sports Partnership, Newquay Sports Centre, Tretherras School, Treviglas School and Caradon Gig Club.

A mouthful, yes, but partnership working if ever I heard it! And that’s the sort of collaboration that’ll be crucial to the future success of school sports.

Now, I know CSPs are already sharing best practice with one another, but this is something I want to see more of, throughout the country, and alongside other local sporting organisations, too. Let’s see networks working together to share and overcome the similar issues they face, and provide the best level of access for every child.

Rural areas of the south can learn from the rural areas of the north – and inner-city CSPs should be match-making leisure centres with underused facilities, with schools that are bursting at the seams. After all, their grounds are often separated by less than a mile.

The Essex CSP has, in the spirt of joined-up working, dispatched 5 primary expert practitioners to 80 local schools, to offer one-on-one support and assess staff training needs. They’ve also freed up Friday afternoons to run workshops for primary school co-ordinators.

At the request of local schools, the Northamptonshire CSP has set up a ‘fantastic coach’ campaign, to help schools recruit the right coaches – and uphold the relevant national guidance and safeguarding checks. They also co-ordinate the county’s school swimming programme.

Every county, not just Northamptonshire, should have access to a helpful checklist of guidance on sourcing suitable candidates and using them effectively. That’s why, in recognition of the valuable role coaches play in improving PE, I visited Berrymede Junior School last week to launch the new coaching portal.

Coaching portal

Many of those involved in developing the portal attended the launch – the list of organisations reads like a who’s who in the world of sports education. But it’s that close working that will help schools spend their premium wisely, and make the task of employing a great coach that much easier.

It was fantastic to be joined at the launch by bronze medallist Bianca Williams, who talked about how having a great coach helped her to believe in herself, overcome that fear of failure, to find purpose and desire to push her talents to the limit.

And whilst at Berrymede, I got to play a sport I’d never come across before called Whitagu, a sort of cross between table tennis and badminton. I confess I got really into it (perhaps a little too over-enthusiastic) and it took some effort to drag me away.

But it was great to hear that Berrymede has run the first ever national seminar on Whitagu, and are making use of other local facilities in the area to promote PE and sport in the community. But again this is where CSPs can make a difference; because I heard that Berrymede’s partnership with the Westway climbing centre was all down to the brokerage of London SportCSP.

Pupils at Berrymede are not only getting subsidised climbing sessions, but at lunchtimes, they’re rushing to be the first on the new climbing walls. It’s not unless children get to try a range of sports that they can work out which one might be the perfect match for their abilities.

And thanks to London Sport, pupils in Acton are having a go at a sport many inner-city children miss out on. The coaching portal will help link local CSPsdirectly to headteachers and local experts.

But CSPs aren’t just a useful signposting tool for schools. CSPs are full of trainers and coaches in their own right, and in recognition of this, I’m delighted to announce that we will continue to fund the volunteer leaders and coaches fund into the next financial year.

Volunteer leaders and coaches

The funding we have provided since 2011 to support school games looks set to exceed its target of 1,470 volunteers by March this year – and so much has already been achieved.

Volunteers are being recruited at a younger age, they’re being offered formal qualifications, and ultimately, sustainability in the volunteering network is gradually being built up.

I saw just how exciting and fun the School Games are for myself when I attended the Bedford and Luton level 3 games last year.

The atmosphere was really electric, and in light of such great events, the department will continue funding you to build capacity for the games in the future.


In addition to boosting volunteer numbers, School Games has been instrumental in making sure that when we talk about ‘access to sport for every child, in every part of the country’, disabled children are very much a part of that – when we say ‘every child’ we mean just that.

Every single child, regardless of their ability, has the right to discover a passion for sports in the same way you and I have. The legacy and sporting heroism seen in the Paralympic Games should be enough to convince anyone of the potential achievement of disabled athletes.

The inclusivity of school games has seen nearly 30,000 disabled children take part in the programme – and created hundreds of volunteering opportunities for them, too.

The Inclusive Community Training programme has just topped 1,000 trainees – a fantastic achievement. Last month I announced an extension to the Project Ability programme for another year, with £300,000 of additional funding to do just that. Schools will be able to carry on offering competitive entry for their young students with disabilities, at every level of school.


And we’ve a similar responsibility to increase the number of girls taking part in sports. As the only programme where girls have outnumbered boys – making up 52% of the participants – the School Games is an important way to continue levelling the playing field for young women.

I visited Lambeth Academy last week and saw United Learning’s X-Elle programme not only working to increase physical activity among girls, but also to teach them about body confidence and team work too.

Olympian mentors like skier Chemmy Alcott and hockey player Alex Danson were there to encourage girls to get involved in sport, and their confidence and positive attitude was infectious.

It’s important for girls to know that women like Chemmy, Alex and Bianca didn’t get to where they are today by passing up chances to stretch their physical horizons – but by boldly stepping up and discovering their sporting talent, together with all the social, emotional and educational benefits it brings.


So, with the new coaching portal and and extension of the volunteer leaders and coaches grant, 2015 is looking to be a year full of exciting developments and real opportunities for CSPs all over England.

I know of course that working with schools is only one strand of your work, but our vision for a sustainable sporting legacy in schools is only possible with your expertise. Schools need you to share that with them. So I want to set a challenge for every CSP leader here today.

I’m sure many of you can already do this. But if you can’t, I’d like you to leave here today and find out the name of at least one sports teacher in every school on your patch. Pick up the phone, and introduce yourself.

You’ll be surprised by just how much your knowledge of the local sporting scene could transform sports for primary school children. After all, today’s primary children are tomorrow’s secondary school children; they are the future members of sports clubs and teams – and perhaps even the stars of the 2020 Olympic and Paralympic Games.

I was inspired by Big Joe; but now is not my time, it’s our children’s. So I want to see every single child benefitting from an inspiring coach, or the chance to try an exciting new sport. And in doing so, be indebted to your passion and commitment.

Thank you for listening, and I hope you have a fantastic convention.

Iain Duncan Smith – 2015 Speech on Social Investment


Below is the text of the speech made by Iain Duncan Smith, the Secretary of State for Work and Pensions, on 19 March 2015 at the Cabinet Office in London.


It is a pleasure to be here.

Represented in this room are all of Whitehall’s largest departments, alongside local government, businesses, charities and many others.

Indeed today’s conference is all about bringing together individuals with the influence and expertise to tackle Britain’s most damaging social problems. Asking how we can do better and do more, when it comes to bringing life change to those most in need.

Meaningful change

Yet even to start with this question gets us straight to the point of social investment – for how often have we heard the refrain: “Government ought to do something”.

Too often in the past, this has been the classic and irresistible invitation to politicians to take action.

Money is found, a programme is invented and – well, that’s the point. Doing something has seldom been the same as solving something.

Despite good intentions, it cannot be enough to pour money into social programmes, but with too little care for results the other end.

No – what matters most is the impact our actions have in transforming people’s prospects, restoring security, hope and independence so that all in our society have a chance to prosper.

As you delve into the detail today, I would ask that you hold this thought: that social investment holds the promise of another way. Not spending money and hoping for the best, but instead securing a return on investment whereby every pound we spend goes on meaningful change, making a measurable difference to people’s lives.

Return on investment

This is the latent potential of social investment which, to my mind, stands to make perhaps the single most significant difference to how we fund and deliver social services in years to come. Transforming what has historically been government’s role: to pick up the pieces of social breakdown – through our welfare, health, justice systems, and so on.

All of us here shoulder that responsibility, and all of us know that it comes at a cost.

Take for example supporting a child in care – estimated to cost £60,000 a year.

The cost of keeping a first-time young offender in jail – over £20,000.

The cost of someone sitting on jobseeking benefits for a year – £10,000.

£90,000 – for just one life that goes off course.

So we have always known the price of failure. The question is, can we value change?

Social return

Imagine if we were to realise that positive change comes with a real value as well – as individuals become productive members of society, moving from dependence on the state to independence.

Whether it is helping someone into work, off the streets, through rehabilitation, into adoption, any one of these outcomes, and countless others, comes with a clear social return. But also a financial one, as we pay out less in costly remedial interventions.

Herein lies the key to social investment, in turn transforming the whole culture of public spending.

Harnessing social investment, any of us – from central government and councils, to social enterprises and charities – can stop paying for process of tackling social problems and start focussing instead on the results that we achieve.

World leader

Over the last 5 years, the UK has become a world leader in putting these principles into practice.

Having established the G8 Social Investment Taskforce, now others from across the globe – America, Germany, Canada, France and more – are looking to us for leadership and innovation.

One game-changer has been Big Society Capital, the world’s first financial institution dedicated to impact investment. Together with the first Social Stock Exchange established in London.

We have also introduced the world’s first tax relief on social investment – which could generate up to nearly £500 million over the next 5 years.

All of this has put the UK in the lead in terms of infrastructure: on the one hand, leveraging private money to support burgeoning social enterprises and social entrepreneurs and on the other, helping new start-ups and ventures to build their capacity and become investment-ready.

As a result, the UK’s social investment market is now one of the fastest-growing in the world.

Social impact bonds

But perhaps the one area where the UK has made most progress of all is in the government’s development of social impact bonds.

This works on the basis of government monetising the value of a given positive outcome, and underwriting the return – creating a bond into which others invest.

If the programme delivers the outcomes, investors see a return, whilst government pays not for the process of tackling the problem, but for success at the other end.

Having pooled £70 million across government to fund these outcomes, the Coalition has now established more social impact bonds than the rest of the world put together – moving from one operational bond to 31.

Take for example, the 10 projects financed by my Department’s £30 million Innovation Fund, which I set up 4 years ago.

This has proved the concept with cutting-edge programmes such as knife crime prevention and remedial education, to improve the prospects of our most disadvantaged young people.

Already, we are seeing these bonds develop a meaningful track record, could be replicated on a national or even international basis.

The Innovation Fund has generated 16,000 positive educational and employment outcomes for young people.

So too, the rough sleeping bond in London which has reduced rough sleeping by 30%.

And in the original Peterborough prison bond, for the first thousand short sentence prisoners, reoffending was reduced by 8.4%.

Youth Engagement Fund

It is off the back of this success that we have established a new £16 million Youth Engagement Fund, helping a further 8,000 young people by preventing the scarring and entrenched problems that come with falling out of school or work altogether.

Today, I am very pleased to announce the 4 successful bidders, who will be taking forward new social impact bonds:

  • Unlocking Potential in Greater Merseyside
  • Prevista in London
  • Futureshapers in Sheffield
  • Teens and Toddlers Youth Engagement in Greater Manchester

These projects are the first centrally-funded bonds that have also sought a local contribution to outcomes – in this case, from councils and schools – a starting point for the collaboration and co-commissioning that local government has been leading through community budgets.

Together with projects catalysed through the government’s £20 million Social Outcomes Fund, today this brings us to a total of 7 new social impact bonds, reaching over 18,000 disadvantaged people.

From assisting those with mental illness into work, supporting people with long-term health conditions, and helping children in care – 3 of the newest projects are focussed on some of Britain’s most vulnerable individuals of all.

Proving the effectiveness of social impact bonds in tackling the most pressing and complex social problems that we face.

Industrial scale

Now, the challenge remains for government to scale up social investment – harnessing it in the design, commissioning, and delivery of many more of our social services.

In doing so, the first step is to build an evidence base – creating certainty around the return for investors.

That is why the government has developed a whole network of centres, such as the Early Intervention Foundation, which now assess, accredit and advise on what works.

And it is why I am pleased that we are doing more to measure the impact of different interventions – building on the pioneering work of New Philanthropy Capital in developing in a DataLab with the Ministry of Justice – now testing the same concept with the Department for Work and Pensions, for an employment DataLab too.

By opening up much more of the government’s data to providers, charities and social ventures, all of us can better understand the outcomes of what we do on the frontline – proving its effectiveness.

Yet, if we are serious about exponential growth in social investment, then I believe what is really needed is a multi-million or even billion pound government commitment – creating a far greater social impact fund to pay for proven outcomes.

It is this that would take social impact bonds to an industrial scale.

Fidelity guarantee

With it, that money brings rigour, discipline and innovation – historically the preserve of the private sector – brought to bear on our most complex social challenges.

Yet even more than that, the social investment model also bring what I call the ‘fidelity guarantee’: an assurance that what you pay for ‘does exactly what it says on the tin’.

This value of this guarantee cannot be underestimated.

For it stops what has so often been the downfall of social programmes in the past – that in implementing a programme that is proven to work, it ends up being modified – tinkered with, to the extent that the programme you started with, isn’t actually delivered.

With social impact bond, on the other hand, if the project ends up being changed, no results mean no pay-out.

By design, then, social investment stands to save money historically wasted on underperforming projects, by ensuring that what works is delivered properly.

But what’s more, social investment shores up government finances because the whole premise is of a return, linked to a given outcome.

Every pound for life change – that is the opportunity of a lifetime.

The first trillion

Without doubt, there is still much more to do if we are to realise the full benefit of what remains a nascent market.

Our ambition must be pitched higher, aiming to catalyse the next wave of social investment.

Not just a more effective use of taxpayers’ money, but actually growing the money available for social programmes beyond government or philanthropy alone.

This is about unleashing investment from businesses, trust funds, entrepreneurs and more – groups who might never before have seen themselves as part of the solution for social change.

Take the fact that UK asset managers look after around £3 trillion.

Of this and other private funds, the G8 Social Investment Taskforce has already identified the ‘first trillion’ of potential investment money.

£1 trillion – that’s what it cost to deliver our health and education systems for the last 5 years.

It’s 135 times the estimated rise in costs for local public services over the next 5 years.

So far from thinking that budget pressures and rising costs are insurmountable, just think what that money could mean on the ground – how many people it could help, how many lives it could transform.

As I look around and see so many faces from local government, I say this is true particularly for councils.

As we look to the future, social investment could mean the end of going cap in hand to central government, reliant on uncertain short-term grants.

Thus it is vital that we bring social investment into the mainstream – making it the norm for corporate social responsibility in the private sector, for asset managers, investment banks, and many more, getting sustainable funding flowing to where it will have the most impact.

Reuniting society

If we can get this right, I believe the effect social investment could have is dramatic – not just in fiscal terms, but in terms of our society as well.

For too long, a disparity has prevailed between the top and bottom of our society.

We have a group of wealth creators at the top who have little or no connection to those at the bottom.

Yet through social investment we have an opportunity to lock not just wealth back into our most disadvantaged areas – but something else as well.

Just imagine a social enterprise working in a particular deprived neighbourhood – be it in London or Birmingham, Glasgow or Leeds.

Investors buy into it and as with any investment, will want to see it flourish.

Because they are risking their money – money that could otherwise be reaping a return elsewhere – those investors will want to see that social programme succeed, taking an interest in that community where they would otherwise be totally detached, brought back into contact with our most disadvantaged individuals and families, for mutual benefit.

For too often what is lacking in these areas is not just money, but hope and aspiration – the belief that the cycle of poverty can be broken.

Thus these wealth creators could have a powerful influence on the communities themselves, a human interface between 2 polarised worlds, and 2 groups often separated by only a different start in life.

Bringing success to the doorstep of failure and 2 ends of our society closer together – reuniting the City, and the inner city.


Now is the time to seize this opportunity.

Above all, it lies in the hands of all of you here today.

For this is not an agenda about politics or politicians.

Rather, the complete opposite is true.

Politics aside, the future of social investment lies with local authorities, commissioners and policy-makers. With a real chance for you to drive innovation, encourage entrepreneurship and invest intelligently.

For in straightened times, and faced with tight budgets, all of us need to find new ways of tackling social problems, answering a call to action in the years to come.

Social investment offers a way forward, ensuring that each and every pound we spend has a demonstrable purpose – transforming the lives of people now and the chances of future generations.

Restoring our finances, as we are compelled to do – but most of all, restoring cohesion to our society, and restoring hope and aspiration to those on the margins – at the same time, restoring lives.

Nicky Morgan – 2015 Speech on Empowering Women



Below is the text of the speech made by Nicky Morgan, the Secretary of State for Education, on 18 March 2015 at Newton Prep School in London.


Good morning ladies and gentlemen, and thank you Alison for that kind introduction.

Great to be here at Newton Prep School this morning.

And good morning to you all, ladies and gentlemen.

It’s a real pleasure to see so many of you here. It’s only just over a week after International Women’s Day, so I’m glad that empowering women, the theme of today’s conference, to succeed at the highest level is still top of the agenda for so many.

Certainly, it’s remained at the forefront of the government’s priorities over recent years.

There have been so many steps forward for women – and our successes over the last few years have been vital in helping women to succeed:

  • there are more women in work than ever before
  • of those women, more are in full-time work than ever before
  • we’ve cut tax for 11.9 million women…and we’re introducing tax-free childcare, and we’re offering more free hours of childcare, to more children

A huge leap in the right direction.

But to focus solely on these headline level successes would be doing a disservice to all those hard-working women that we know are still disadvantaged because of their gender.

Of course, as Education Secretary and also as Minister for Women and Equalities, I would have a particular interest in teaching. But I think it’s a profession that does deserve scrutiny. It’s certainly one with an interesting history.

Looking back over the last couple of centuries in the UK, teaching has at times been a very gendered profession. From the first formal schools for boys, run by schoolmasters and religious leaders, to the Victorian-era village schools run by schoolma’ams and headmistresses, we’ve changed our mind plenty of times over the years on who we think can best educate our children.

I’m glad that we’re now lucky enough to benefit from a fantastic profession full of talented teachers and leaders, both male and female, and all equally capable of leading, teaching, nurturing, and inspiring the citizens of tomorrow.

And that’s why I love my job, because it is all about the future. Working with young people and securing the future of our country.

But that being said – recent data shows that disparity does still exist. The vast majority of our teachers – 75% – are female. That rises to nearly 90% in primary schools. But only 66% of our headteachers are female – meaning there’s a much lower progression rate for women than for men.

Specifically, at secondary school, where the majority of teachers are female, the majority of headteachers – almost two-thirds – are male. And at primary school, where men make up just over 10% of teachers, almost 3 in 10 headteachers are male. So we see that progression to leadership positions and the top jobs doesn’t reflect the number of people joining the profession and working as classroom teachers.

And for those women who do break down barriers and overcome hurdles to reach the top positions, the issues don’t end at the door to the headteacher’s office. Because the gender pay gap for teachers – seen throughout all levels of the profession – only widens with seniority.

So there are clearly 2 problems for women here. A lower proportion of female teachers move through to leadership positions than their male counterparts. And the median salary for women teachers and headteachers is less than for male teachers and headteachers.

We know that there are a number of factors at play here, including: school size, age of teachers, length of contract and also the geography where the school is located. We have a duty to make sure that gender isn’t one of these factors; that it has absolutely no role in determining how much teachers or school leaders get paid.

A key part of this government’s plan for education is ensuring there is strong leadership in schools to ensure the best outcomes for pupils. Strong leadership must, of course, be diverse. That’s why my department promotes talent management in schools to increase the diversity of the leadership population, and we work closely with schools, academies and teaching school alliances.

One cause of the current pay gap is the structure of our existing workforce, including the distribution of male and female teachers across different schools. We know that female leadership teachers are more likely to work in primary schools than secondary schools, and primary schools are often smaller, leading to lower salaries.

We also know that the historic system of automatic pay progression contributed to pay differences. Female teachers, much more likely to take parental leave or career breaks, were disadvantaged, whilst their male counterparts, working without breaks, continued to accrue automatic pay increases. I just don’t think this is fair. A woman who’s taken a year, or even a few years, out to have children and raise a family certainly isn’t less capable as a teacher who hasn’t had this time away from the classroom. We need to do much more to support these talented women who have so much to offer, and want to return to the workplace later on in life.

That’s why I’m pleased that our recent reforms to teachers’ pay should mitigate this often unfair salary discrepancy.

Automatic progression has been abolished. And so has the requirement for schools to match teachers’ previous salaries when recruiting. Both of these changes mean that schools now have the freedom to pay higher salaries if they choose – the salaries that they feel match a teacher’s experience, performance, and potential, rather than the years they’ve spent teaching.

I’m also pleased that the National College for Teaching and Leadership continues to fund a wide range of local and national programmes to address the under-representation of BME and female leaders in schools. The programme currently being funded is the Leadership Equality and Diversity Fund – helping 30 school-led partnerships to deliver equality and diversity projects. I’m delighted that the fund will continue into this year and that it’s now open for applications until mid-April. I would urge everyone here today to consider putting their school forward and applying over the coming month.

My department also funds the Future Leaders Trust, helping to develop the skills of high-potential aspiring headteachers who want to work in some of the most challenging schools in the country. Fifteen percent of current participants on the High Potential Leaders programme are from a black and minority ethnic background and at least 50% of the participants are female.

Women like Dr Jane Keeley, headteacher at Haggerston School, which was declared ‘good’ by Ofsted in 2013 after Jane’s 3 years of hard work as headteacher to turn the school around. Jane describes the Future Leaders programme as ‘a breath of fresh air’ – without it, she’s sure she never would have become a head.

Or like Nadia Paczuska, assistant headteacher of Barham Primary School, and soon to be taking up her first headship having benefitted from the bespoke coaching and high-quality training that the future leaders programme offers.

Both women, with huge amounts of talent, have plenty to offer their schools. Role models to their staff and pupils alike.

And women representative of their dedicated colleagues all over the country – some of whom I’ve had the great privilege of meeting myself.

Carol Hannaford, for example, headteacher at Plymouth’s Stoke Damerel Community College.

Sarah Bailey at ARK Little Ridge Primary Academy in Hastings…Or Erica Mason, acting headteacher at Whitefield Infant School in Pendle.

Certainly not professionals I’d want to see held back by fewer opportunities or unfair pay.

It’s for women like Jane, Nadia, Carol, Sarah and Erica, that we all have a duty to fund the right projects, develop the right policy, ask the right questions.

Because to make sure that tomorrow’s leaders are empowered to go for the top jobs and demand a competitive salary, I want them to be confident that they’ll be considered on an equal footing with their male counterparts.

The women I’ve mentioned – and their colleagues around the country – are crucial role models. They inspire the next generation of women in classrooms. Just last week I spoke to students in Plymouth who told me they aspired to become doctors, midwives, and teachers. So much of that is down to the teaching and leadership in their school.

It’s clear to me that gender has absolutely nothing to do with a teacher’s ability to innovate, inspire, or encourage.

Thank you so much for inviting me to be here. I’m looking forward to taking your questions now.


Danny Alexander – 2014 Speech to the National Association of Pension Funds

Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, to the National Association of Pension Funds on 7th March 2014.





Thanks Joanne [Segars].

When I was asked to come here to Edinburgh this morning…

And talk to you about the role pension funds might play in the future UK economy…

It was obvious that the most important question to address, was whether we will still be part of the UK in a years’ time.

I look at this debate as someone who was brought up in a small community in the Highlands…

Studied in Oxford…

Worked in Edinburgh, London, then the Cairngorms…

And now splits his working week between Inverness and London.

I’m a proud Highlander, married to a West Country Girl.

So – like most Scots – the UK is woven into the fabric of my life.

Today I want to speak to you as a Scottish MP, and as a British Treasury Minister.

Like many of you, I am proudly and passionately Scottish.

But the choice in Scotland is not one of emotion…

But one that must be based on a weighing of the evidence.

So I want to set out to you today, why – having looked at all the evidence…

I could never recommend independence to my constituents in Inverness, nor to anyone else.

You too – as a hugely important UK industry – need to have access to as much analysis and information as possible, to make your decisions on independence.

What you want to know is how independence would affect your businesses…

How independence would affect the customers you serve…

And what it would mean for your sector.

And it’s those questions that I want to discuss with you this morning.

I want to talk about the impact independence would have on the currency here, on regulation here, and on pension protection here.

Currency Union

The currency question is probably the biggest independence question.

And it was with your need for certainty – and other businesses need for certainty – in mind, that we made absolutely clear last month…

That if the Scottish people vote for independence…

There will not be a currency union between Scotland and the rest of the UK.

It’s not going to happen.

A currency union would not work for the rest of the UK…

And a currency union would not work for an independent Scotland.

This is my conclusion.

It is the conclusion reached by the Chancellor of the Exchequer…

It is the conclusion reached by the Shadow Chancellor.

And it is the conclusion of the detailed analysis…

By impartial Treasury officials…

Who used the same approach to that which evaluated whether we should join the euro.

No bluff, no bluster – certainly no bullying – just a simple statement of fact.

I’ve seen some people suggest we are not serious about refusing a currency union.

Let’s call this the John McEnroe defence.

Except in this instance it’s not just one person they’re shouting at, but three.

And our decision – taken in the best interests of Scotland and the rest of the UK – is final.

No ifs, no buts.

The SNP may not like it, but they should stop complaining about it and deal with the consequences.

No matter how much of a racket they make, it isn’t going to change.

And it isn’t going to change, because…

In the event of independence, a currency union wouldn’t be in the interests of a continuing UK.

It would decrease economic sovereignty…

And it would increase the risk of having to bail out a foreign country.

Alex Salmond has said that transaction costs would force the UK into a currency union.

And it’s true that they are one of the many costs that independence would impose.

But if transaction costs were the only issue…

The rest of the UK would use the euro or the dollar.

Events in Europe over the last few years have demonstrated very clearly the risks of shared currencies.

But Mr Salmond seems to have been so swept up by his own obsession with separation…

That he’s failed to notice the Eurozone crisis, or learn anything from it.

And he cannot honestly expect that Scotland would walk away from the rest of the UK…

But that UK taxpayers in England, Wales and Northern Ireland would agree to stand behind the Scottish economy.

It’s like embarking on a damaging divorce and insisting you should still share a credit card.

The polls show the public wouldn’t support it.

And parliament wouldn’t pass it.

As well as not being in the best interests of a continuing UK…

As the only Treasury spokesperson across the 3 main parties who is a Scot…

I can say that a currency union would not be in the interests of an independent Scotland either…

And in the event that Scotland did vote yes, I would argue just as forcefully against a currency union.

In their desperation to pretend that nothing would change under independence…

The Yes campaign are simply ignoring political and economic realities.

A currency union would require an independent Scotland to submit all its tax plans – all its spending plans – to a foreign government.

It would mean interest rates set by a central bank in a separate and much larger country.

And a currency union would leave Scotland far more exposed to the sorts of damaging economic shocks we’ve seen in the periphery of the euro…

Because Scotland would walk away from the ability to pool risk and investments – something your industry knows all about – with the rest of the UK.

It would also be the case that Scotland wouldn’t have its own exchange rate to help adjust – for example – to an oil price shock.

So an independent Scotland would have to respond to a fall in oil revenues by cutting public spending or raising taxes significantly.

As part of the UK, Scotland is insulated from these impacts.

In the last Autumn Statement for example, the OBR cut its forecast for North Sea revenues by almost £4bn over the next three years.

But instead of needing to cut spending, the Scottish Government saw its budget rise by more than £300m.

Treasury analysis shows that for each 20 dollar fall in the oil price, an independent Scotland would lose 11,000 jobs.

And with an economy so dependent on oil, inflation in an independent Scotland would be much more volatile than as part of the UK.

Not only that.

A currency union would also leave an Independent Scotland at the mercy of financial speculators, who…

If they questioned Scotland’s commitment to the Currency Union…

Could trigger capital flight, higher interest rates and possibly the collapse of the union itself…

Just as we saw in the break-up of the old Czechoslovakia, where their attempt at currency union lasted just 33 days.

The simple answer is, that the only way to keep the UK pound…

And to keep the stability that comes with it…

Is to keep the UK together.

Other Options

With a currency union now off the table, what are the other options?

There are three…

Each with short term risks…

And long term uncertainty. As Jose Manuel Barroso made clear last month…

Smooth transition into EU Membership is not to be assumed the way the Scottish government would have us believe.

And securing an opt-out from the euro is far from guaranteed.

But joining the euro currency union is no more attractive an option than a Sterling currency union…

For all the reasons I’ve just laid out.

A new currency for Scotland – a Scottish pound…

Would at least fit the rhetoric of full economic independence…

But it would require – immediately – a new central bank and financial sector regulator, to be established…

At a great cost – and at very real risk – to the Scottish financial sector and taxpayer.

It would also require redenomination across the entire Scottish economy – again a lengthy, costly, dangerous and destabilising process.

The final option would be sterlingisation…

Allowing the pound to circulate without a currency union.

Which would see Scotland take the same economic approach as [such financial powerhouses as] Panama and Montenegro.

But this would leave the Scottish government borrowing in a currency over which they had no control…

With very limited levers to support financial stability.

Three options – all with short term costs.

All with long term uncertainty.

And none with the stability of our current arrangement.

What this means

The currency debate isn’t just an issue for people who wear pinstripe suits and read the Financial Times.

It isn’t just an issue about using the pound if you travel to the rest of the UK.

This is an issue that affects the money in all of our pockets and purses and wallets.

People are rightly starting to worry.

Because, in the event of a yes vote…

We haven’t been told the currency we’ll be getting paid in, or handing over at the supermarket.

We haven’t been told the currency our savings will be denominated in, let alone the interest rates they’ll be accruing.

The Treasury is seeing a real increase in letters and the emails to the UK government from people worried by those questions.

Savers worried that their ISAs won’t be protected.

Pension holders worried about the security of their funds.

Small businesses worried their accounts will soon be with a foreign bank, in a foreign currency.

And if we’re receiving that many letters, I can only imagine how many they’re getting down the road in Holyrood.

That’s why Alex Salmond has to come out and tell us Scots what his plan B is.

So it is all the more extraordinary that on this – one of the most essential questions…

They have nothing credible to say at all.

And that is Alex Salmond’s problem.

He is a man without a plan B.

He’s flirted with the euro.

He’s hinted at sterlingisation.

And each and every time he’s realised that the Scottish people want the UK pound as part of the UK.

The weakness of any Plan B is not an argument for a currency union…

It is the clearest argument yet against independence.

Because the only way to keep the strength and the stability of the UK

Is to keep the United Kingdom.

Pensions Risks

The currency question represents the biggest single risk of independence for your sector.

But there are two other risks that I’d like to cover quickly.

Namely risks around regulation and pension protection.

On regulatory risks, it’s clear for all to see that Scotland and the rest of the UK benefit from our large domestic market in financial services.

There are currently no restrictions on buying and selling financial products throughout the country…

So 70 per cent of pension products bought by Scottish consumers in 2011-12, were from firms based in the rest of the UK…

And 91% of pensions sold by Scottish firms were to non-Scottish customers.

But Scottish independence would break-up the current domestic market…

And – in turn – detach Scotland from our single regulatory framework.

We would have separate regulatory and tax regimes under separate governments.

And while these regimes may be similar at the outset, it is inevitable that they would diverge over time…

Building barriers to trade that don’t currently exist.

Experience shows us that – even in single market areas, like the EU – borders reduce flows of products, money and people.

And it is very rare for certain financial products – like mortgages and pensions – to be sold across borders, even within the EU.

So creating an international border would reduce financial firms’ ability to spread risk…

And drive up the cost of financial products – like pensions – for Scottish households.

On pension protection…

At present – as you’ll know well – members of defined benefit schemes are protected through the Pension Protection Fund.

A fund that protects millions of people across the UK…

And pays compensation to all those people whose defined benefit schemes have become insolvent and are unable to meet their obligations.

But in the event of independence…

Members of defined benefit schemes here in Scotland would no longer be protected.

Of course, the Scottish government could set up its own Protection Fund.

In fact, if Scotland were part of the EU, they would have to set up such a Fund.

But unlike now…

Where the risks are spread across the UK, and across a large number of defined benefit schemes…

The number of providers in an independent Scottish state would be much lower…

Which would mean the costs of a scheme becoming insolvent being spread across a much smaller base.

As the NAPF themselves have said…

This would be likely to create much higher costs.

And I quote…

“[Those] costs may have to be passed on to pension scheme members, eroding the value of their pension savings.”

For hundreds of thousands of Scots, their pension pots are literally their life savings built up over decades of hard work.

Their financial security in retirement depends on having a stable, strong and dependable pension system.

And in the absence of detailed and rigorous economic plans from the SNP…

A vote for Independence opens the flood gates to a sea of uncertainty on currency, rates and regulation all of which puts the value of those life savings at risk.

Would you want to be the first Scot to claim their pension after Independence with all this risk and uncertainty?

How those referendum votes end up in the ballot box will have a profound impact on how much money we find in our pay, our pocket and our pensions.

Scotland has built a hugely successful pension and financial services sector here in Edinburgh…

Scottish businesses, built on British foundations.

But with a different regulatory system and a different currency and different pensions protections…

Many companies would have no choice but to relocate their businesses…

Cutting jobs in Scotland and damaging our economy.

It is striking that in recent weeks we’ve heard the news of BP… Shell… RBS… Lloyds…Standard Life all recognising that independence isn’t the right choice for Scotland.

The decision we Scots face in the referendum will be irreversible.

There will be no going back.

We now know that separation would leave us:

– Without the pound

– With our pensions and savings at risk.

– And having to apply to join the EU

This is a decision not just for our generation but for our children and grandchildren.

Within the UK, we have the best of both worlds.

We make decisions for Scotland…

Backed up by the strength, stability and security of the UK.

UK Pension triumphs

Our simplifications and reforms of your sector will be one of the areas where the government’s legacy lasts longest.

Auto-enrolment will see nearly 6 million people enrolled into workplace pension schemes by the end of this parliament…

And will ultimately see up to 9 million people making up to £11bn of new and increased pension savings every year.

The single tier pension will provide millions of individuals with a firm foundation to support saving.

With – from 2016 – a level of state pension sufficient to keep someone with a full entitlement out of the means testing system giving them over £145 a week in today’s money.

And it will particularly benefit those groups that – under the current system – have tended to build up low amounts of savings. Like

Women with broken work records…

The low paid…

And the self-employed…

And the triple lock too, has helped to protect the most vulnerable members of our society.

The basic state pension will go up by no less than 2.5%, and more when prices or earnings are higher.

It means that from next month, the level of the full basic state pension will be around £8.50 a week higher than it would have been, had it been uprated by earnings [since 2011-12].

Which equates to about £440 per person, per year.

But not only have our changes helped people to save for the future.

They’ve also helped you, to help us, build for the future.

And I want to congratulate the NAPF on setting up the first Pensions Infrastructure Platform fund last year.

It goes without saying that I would love to see even more pension funds getting on board…

And investing in our country’s infrastructure…

And I’ll be very happy to set up meetings between IUK and any interested companies here to take discussions forward.

Because this is a real opportunity for you to invest in the exact projects that will help the industries of the UK, and the people of the UK…

To thrive long into the future.

Conclusion and Importance of the pound

And that United Kingdom…

A full economic, fiscal and political union…

Including Scotland…

With full use of the UK pound…

Is exactly what the industries and the people of this country need.

Look at the strength and security and certainty it offers.

Our collective strength is the platform from which your businesses succeed.

Our collective strength is the foundation on which jobs are created.

And our collective strength is the reason that savers feel their money is secure.

So I want – as a Scottish member of the UK Government – to offer you as much certainty as I can.

Vote no in September and we can continue to share a currency.

Vote no in September and we can continue to share a regulatory framework.

Vote no in September and we can continue to protect the public’s pensions.

And then we can get back to – at this conference next year…

Focussing on the role you can play in supporting infrastructure…

And encouraging savings…

And building a stronger economy, and a fairer society here in the United Kingdom.

Thank you.

Danny Alexander – 2014 Speech on Scottish Independence

Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, on Scottish Independence and EU membership. The speech was made in Glasgow on 17th January 2014.




Thank you William [Hague].

What you’ve said is a real reminder of just how influential the UK is internationally.

How we project our collective power and our ideas for good…

And particularly for the benefit of the poorest and most disadvantaged people in the world.

Read ‘Scotland analysis: EU and international issues’.

Being on track to meet the target of 0.7% of GNI on international aid, even in these most challenging times, is one of our proudest achievements

It was also a reminder of how being in the United Kingdom family…

And the influential membership that gives us of…

The EU. The UN.

The G7. The G8. The G20.

The IMF. The World Bank.

Really gives us – as Scots – an ability to punch above our weight internationally.

To fight for Scottish interests across the world.

To promote Scottish values across the world.

And to export Scottish products across the world.

It’s one of the most powerful reasons why we’re better as part of the United Kingdom.

The research before us today gives us Scots – I think – two powerful messages.

The first is that – as William majored on – we have more influence in the world as part of the UK.

And the second is that our membership of these international organisations – those I just mentioned – comes a lot cheaper as part of the UK.

And my message is that – by leaving the UK – we would pay more…

But that we’d influence less, and we’d achieve less.

I’ll explain shortly how – on our EU membership alone – Scotland will be between £1.9 billion and £3.8 billion better off as part of the UK in the next 7 years.

But before I get into the details, I want to talk about the principles.

The question that will be put in September is of monumental importance.

The UK is a family of nations that has grown together through good times and bad times.

Our ancestors have literally fought and died to protect it from harm.

And I ask everyone in Scotland to reflect on our history.

We are woven together in so many ways…

And I have a strong sense that as the debate intensifies – as the referendum gets closer – that the rest of the UK doesn’t want to see our family of nations torn apart.

Our nation is valued and appreciated.

The UK is successful.

And let’s remember that a ‘Yes to Independence’ vote is a one way ticket.

There will be no going back.


So William has already explained why we Scots would lose influence and clout by leaving the UK…

But why – you might ask – does it also save Scotland money?

Surely greater influence comes at a greater cost?

But the truth is, that as a United Kingdom we simply have more financial clout.

You may have seen that earlier this week I made clear that the UK Government would – of course – honour our debts should independence occur.

And that an independent Scotland would pay its fair and proportionate share of the debt to the continuing UK Government.

We took that action to ensure that those who lend to us continue to do so at low interest rates – which is crucial for every business and mortgage-holder across the whole UK, including in Scotland.

The markets were showing the first signs of unease and nervousness at a situation in which they might have ended up being owed money by a newly Independent Scotland with no credit history of its own.

Because all the experts agree that a new country with no track record in financial markets – like an independent Scotland – would not retain the same credibility in financial markets as the UK.

The National Institute of Economic and Social Research has estimated that an independent Scotland could expect to pay a premium above UK borrowing costs of up to 1.7 percentage points.

With UK gilt yields currently around 3 per cent, that would mean an independent Scotland paying more than one and a half times the interest rate we get as part of the UK right now.

The referendum will decide whether that is a price we want to pay in future…

But I was not going to allow taxpayers in all parts of the UK to pay more for that risk in advance of the referendum.

EU Budget – paying more to get less

Our Union – our history – is crucial here.

In debt management, we achieve better deals for everyone in Scotland because of our collective strength.

And that is true elsewhere.

Let’s look at the EU…

Before we get into the detail of the analysis, I won’t surprise anyone if I say that I’m a strong supporter of the European Union…

Or that I believe our membership is vital for our economy, that our coalition believes it is vital for investment and trade, but above all for jobs.

I don’t think the EU is perfect. I think it’s far from it…

But I think we’re at our best when we’re at its centre.

Reducing bureaucracy…

Leading trade deals…

Something – again – we have far more clout in as part of the UK.

But our membership of the EU doesn’t come for free.

The UK contributes to the EU budget, like each member state.

And those combined contributions are then distributed throughout the Union, based on seven-year budget agreements.

Now, explaining, and quantifying the benefits of our EU budget position isn’t ever the most straightforward task!

But I’ll try to do it as clearly as possible today.

The bottom line is this.

Scotland outside of the UK would have to negotiate its own way back into the EU…

And – as such – its terms of membership would be entirely different to those it currently enjoys.

At present, Scotland gets the benefits of EU Membership at a discount of between £1.9bn and £3.8bn over the next 7 years…

And that’s because we are part of the UK.

Outside of the UK we’d pay more and get less.

CAP and Structural

In terms of paying in, every nation contributes according to their National Income…

And in terms of receiving money back, there are two main programmes:

– Structural and Cohesion Funds

– Common Agricultural Policy – or CAP

And it’s easy to see the impact both those funds have here in Scotland.

In Glasgow the Structural Funds have helped turn old buildings like the town hall into new cultural and digital projects.

And Structural Funds in my own part of Scotland, in the Highlands, have had an even bigger impact.

CAP payments too, play a crucial role in supporting farmers across the country.


On top of those funds, the UK also receives a unique, permanent rebate on our contributions.

This rebate is – essentially – the refund we get on what we pay in to the EU budget.

We get some back, because we don’t take as much out as other Member States.

And the UK’s rebate is currently worth around £3 billion pounds every year.

It was hard fought for…

It took 12 years after entry to achieve…

And it is strongly objected to by every other member, every time the budget is negotiated.

Now, the research before you models the impact that Scotland’s independence would have on each of those three areas.

On Structural Funds, Scotland would lose out on around £200 million over this seven year spending round…

And that’s because the UK Government has recognised Scotland’s specific needs, and acted to ensure that Scotland received – compared to England – a higher percentage of the UK allocation.

On CAP payments, the picture is more complex.

There are question marks over transition periods, and negotiated splits, and whether Scotland’s CAP payments would need to be phased in over a 10 year spell…

As has happened to every other country that has joined the EU in the last three accessions.

But in the best case scenario – incidentally the only scenario put forward by the Scottish Government.

In the best case scenario CAP payments would increase by £850 million over the seven years…

And in the worst case scenario – CAP payments – would in fact decrease by over £1bn.

But the most important figure here is what would happen with the rebate.

The Scottish Government’s position is that the UK’s rebate can simply be shared in the event of independence.

But that’s not how a rebate works.

It’s not an annual lump sum that can be divided.

It’s based on a formula, reflecting the UK’s respective shares in the EU’s economy and receipts…

So the new amount would relate to the continuing UK, excluding Scotland.

There would be no ‘Scottish share’ left.

For Scotland to secure a rebate, or a correction upon accession…

There would have to be a change to the rulebook approved by every other single EU member state.

Quite simply, it would be unprecedented.

No other country has ever secured any budgetary correction on joining the EU…

So it is inconceivable that an independent Scotland would secure a rebate as the UK has…

In the unlikely event that any correction could be secured at all.

We also have to remember that all new member states contribute to the UK’s rebate…

Which means that an independent Scotland – like any other EU member state – would have to make a contribution to the rest of the UK…

We calculate nearly £600m over the seven year period.

The numbers

So – adding those factors together – how much might it cost for an independent Scotland to be a member of the EU?

The best case scenario for an independent Scotland, based on the Treasury’s analysis, is that for 2014 through to 2020…

With structural funds going down, a loss from the UK rebate, a contribution to the UK rebate…

And an increase in CAP receipts.

Scotland would be £1.9 billion worse for the period.

And in the worst case scenario…

Where CAP receipts went down rather than up…

Scotland’s net position would be £3.8bn worse.

What this means for Scottish families is that over the next seven years…

Continuing as part of the United Kingdom will save them at least £750 per household.

Possibly climbing to £1 470 per household.

So, as part of the UK…

We Scots pay less, and we get more out of our EU membership.


Of course, the EU is just one example.

What about – say? – the UN?

As part of the UK, Scottish views – Scottish values – are represented by one of the founder members, with a permanent seat on the Security Council.

And while an independent Scotland could join the family of the United Nations…

It wouldn’t have that permanent Security Council seat, and the influence it brings…

And it would also pay for its membership at a rate equivalent to similar countries.

So – with regards to the UN’s regular budget – our analysis shows that an independent Scotland might be expected to contribute between $12.9m and $18m a year…

And to the peacekeeping budget, between $50m, and $64m.

That’s before we take into account the UN’s specialised agencies, like UNESCO or the World Health Organisation.

White paper

This is a huge decision for Scotland.

And – as such – we can’t afford to base it on anything but the very best information.

But what struck many people about the Scottish Government’s White Paper at the end of last year…

Was that when it came to money – time after time – their figures made clear they were based on a very partial account of the “best case scenario only.”

But I think the Scottish people deserve to see the best and the worst case scenarios.

And it’s fair to say that some of the Scottish Government’s best case scenarios are optimistic.

That Scotland would keep the pound they claim – despite the fact that such an arrangement would be highly unlikely to work, and highly unlikely to be agreed.

That Scotland would be in a stronger fiscal position than the rest of the UK – a claim based on wildly optimistic oil and gas forecasts, which conveniently ignores unfunded commitments on tax and childcare.

Or that Scotland would join the EU under article 48 – despite the fact that many key figures have said this couldn’t happen.


But when it comes to the EU – what the facts show – is that Scotland and the rest of the UK are better together, and stronger together.

And everything we’ve covered today only serves to highlight that.

As a United Kingdom we get a seat on all the most important international tables…

And put Scottish values and British at the centre of all global decisions.

As a United Kingdom we have a historic and successful network of embassies and trade bodies across the world.

Which opens up the whole globe for Scots to travel and do business in.

And as a United Kingdom we secure good deals on debt and on the cost of these memberships…

Which puts more money back in Scottish pockets.

But by leaving the United Kingdom.

We would see our international influence decrease.

And we would see the costs to our country increase.

We would be getting less, and paying more.

So let’s keep a situation where we pay less, and we get achieve more in the world together.

We are better together.

Thank you for listening.

Danny Alexander – 2013 Speech on the National Infrastructure Plan

Below is the text of the speech made by Danny Alexander, the Chief Secretary to the Treasury, on 4th December 2013 at The Institution of Civil Engineers.





I hope that Paul’s [Deighton, Commercial Secretary to the Treasury] comments…

And those completed projects he ran us through…

Show that our infrastructure plan is making a difference in every corner of Britain…

Underground, overground…

On shore, off shore…

Wired, wireless…

Tarmac, train track…

You name it. We’re building it. Right now.

And the renewal of our infrastructure is renewing the very foundations of our economy.

I’m enormously grateful to Paul, for the excellent job he’s done – during his first year in office – in taking that work forward.

His influence has been felt not just down the corridor at the Treasury…

But across the rest of Whitehall and beyond.

But while we celebrate delivering today…

We should also remember that these – the National Infrastructure Plan and the Investment Pipeline – are live documents.

And for me – they serve three main purposes.

First – as we’ve heard – they act as a benchmark against which we can measure our progress.

Second – their existence helps to embed the idea of infrastructure as a vital part of our national life.

And third. They give long term clarity and certainty to investors and the public.

In developing the National Infrastructure Plan – as Paul said – we’ve worked in close collaboration with industry and finance…

To make sure we meet your needs, and remove any obstacles to delivering the programme.

You told us you wanted a clearer picture of future work.

So we created the pipeline.

You asked us to have a greater sense of priority…

So we designated the top 40 projects.

And you asked us to make it easier to get those priority projects through the system.

So we’ve listened, and we’ve delivered all the reforms to planning and judicial review that Paul has just set out.

The pipeline is the most comprehensive overview of planned and potential infrastructure investment ever produced.

It also acts as a prospectus for investors, identifying key UK private and public sector infrastructure requirements for decades to come.

Add the certainty that provides, to the economic stability the government is overseeing…

And you can see why Britain is now ranked number one in the Nabarro Infrastructure Index for attracting investment…

Which takes into account factors like credit and taxation and innovation.

I’m delighted that investors are realising this, and taking advantage of the opportunities it offers.

Today, a group of insurers…

Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life….

Have made a commitment to work with government and regulators…

And invest £25 billion in UK infrastructure over the next five years.

This was made possible because the government negotiated a successful outcome on Solvency II…

Which has put insurers in a strong position…

To make longer term investments.

I’m delighted that those companies have made that commitment…

It is a fantastic contribution to Britain’s economic future by some of Britain’s most impressive companies.

It represents a massive vote of confidence in the UK economy…

And it will play a key role in financing key projects.

It also serves as real evidence that if the government demonstrates a long term vision…

It will help us to secure long term funding…

Which will lead – in turn – to sustainable, strong, long term growth for our economy.

Today’s plan also sets out our intention to increase publically owned corporate asset sales from £10 billion to £20 billion by 2020…

Including exploring the sale of Eurostar.

While no final decision has been made, government shouldn’t own assets it doesn’t need…

And we should look at where these proceeds can be reinvested, including in Britain’s infrastructure.

So this document before you, builds on the long term commitment of taxpayers’ money that I set out in the Commons this June.

And it contains a series of new measures that will create opportunities for new jobs and for new growth across the UK.


Most of the value of the pipeline lies in our energy and transport sectors.

Transport is an area where a little investment from government…

Can go a long way towards bringing investment from elsewhere.

Take Kings Cross which Paul mentioned earlier.

We committed £500 million of public investment into its redevelopment…

Which attracted – in turn – over £2 billion from the private sector, and led to the complete regeneration of that part of London.

Between April and September this year we invested £15 million every day towards improving our rail network…

And we hope our investment will unlock private investment at some of those stations…

Like Manchester, Birmingham and Reading…

That are seeing the benefits of that money.

But we also have to keep looking at other stations where further investment could unleash growth.

Howard Davies – whose interim report is due to be published later this month…

Recently wrote to Government pointing out the importance of improving surface access to airports.

And we agree.

The current station at Gatwick hardly provides the best first impression of Britain.

And it sits on a key transport route, linking London to some of our great coastal towns.

So we’ve decided – subject to contributions from the airport itself – to provide £50 million to the cost of building a new rail station at Gatwick…

And to commission studies exploring rail and road improvements at both Heathrow and Stansted…

As well as the Brighton line.

This is good for those airports…

And the communities that surround them.

On our roads too – as we’ve seen – rapid progress is being made.

But across the country, there are still too many pinch points where it isn’t just traffic that’s being slowed down.

It’s growth too.

87 schemes have already been funded through our local pinch point fund…

But more work – and on a bigger scale – needs to be done.

At the A50 for example, where residents and businesses in the area face delays and congestion every day.

So today I’m adding it to our priority roads programme…

So we can work with Staffordshire Council, the LEP, and the Highways Agency to find a solution.

We’re also making progress on the other routes where we identified blockages in June.

We’ve started feasibility projects into a number of areas, including:

– the A1 from Newcastle to Scotland

– the A303

– the A27

– and the Trans-Pennines routes

And we’ll be publishing our plans for all those routes by this time next year.

As we develop those plans, we’ll do our best to keep the public as involved as possible…

Just as we did with our proposals for the A14, where we set out a consultation exploring the idea of a tolled section of road.

The A14 is a crucial link to the Haven ports – which are predicting a three-fold increase in throughput by 2030…

And improving the road could also support 10 000 new homes…

And a 22% increase in local jobs…

So we’ve listened to the consultation responses, and we’ve come to the decision that…

When this road goes ahead in three years time…

There will be no toll.

This will not lead to any delay in delivery…

And the cost will be covered by government.

But, as well as the economic benefits that our transport network brings…

We should remember that infrastructure can also add to the cultural life of our country, and our civic pride.

That’s why the government will be providing £30 million to help make the dream of a Garden Bridge over the Thames a reality.

Providing this investment will – I’m certain – help the Bridge’s Trust to secure private donations for the scheme…

And move us closer to the target of a 2017 opening.

And as well as building the bridges and the railways and the roads for the future…

I want us to build the cars of the future too.

This summer government committed £500 million of funds to support ULEVS.

Details of which will be set out soon…

And today’s National Infrastructure Plan puts £5 million towards promoting the use of ULEVs for all Government car fleets.

But there are other opportunities for Great Britain too.

At present, the main advances in driverless car technology are happening in California.

Apparently they’re making progress, but they’ve found that the cars only really work in sunny weather.

So the UK has something to offer here!

And the National Infrastructure Plan contains plans to put our country at the forefront of driverless car technology.


If we want to be world leaders in new technology though…

We’ll need to have the right digital networks in place to support those industries of the future.

Paul laid out our progress on making 95% of households superfast.

But we believe that everyone should have access to the opportunities the internet offers.

Especially with more and more of our lives and our jobs – perhaps even our democracy? – moving online

That’s why we’ve decided to open – as part of this update – a new £10 million competitive fund…

Which will market-test the kind of bold and inventive solutions that could deliver broadband to the most difficult to reach parts of the UK.

No area – no matter how remote – should be left behind.

Energy, the need for certainty, strike prices…..

Finally, the need for investment in our energy sector is enormous.

The energy measures we announced at the weekend will ease the burden of gas and electricity bills on hard pressed families over the next couple of years…

Without in any way undermining the support for investment in electricity generation.

But those lower bills will only be sustainable if we deliver that investment in newer and cleaner sources of electricity…

And this document updates you on our progress.

Back in June, I announced the draft prices the government will guarantee for those investing in renewable energy.

And this Plan updates and confirms the final prices we’ll pay.

It shows that the price we’re willing to pay for onshore wind and large scale solar farms has come down.

So we can drive every penny of efficiency…

And get consumers the best possible deal.

It shows that we’ve maintained the amount we’ll pay for converting coal stations to biomass.

And it also shows that we’ll increase what we pay for offshore wind in 2018-19.

We believe that this plan will mean delivering 10GW of offshore wind by 2020 is achievable – perhaps more if the prices come down.

This protects our commitment to green energy….

While ensuring we get the best value for money for consumers, and ensure the huge potential of offshore wind is fulfilled.

But it’s not just wind, wave and tidal power that are seeing the benefits of our policies.

Just twenty minutes ago…

In this very building…

I signed an agreement with Hitachi and Horizon…

Which commits us in principle…

To offering a guarantee for their Nuclear Power Station at Anglesey.

There is work to be done…

And putting the financing plan together will be a commitment from both sides.

But the agreement today shows that…

Just as we did with Hinkley…

This Government is prepared to give certainty to investors…

To help them make the financial decisions that are critical for our nation’s infrastructure.

The power station this agreement will support is set to create around 1,000 permanent jobs once complete…

With a peak workforce of over 5 000 during construction.

And – along with the other Guarantees agreed in principle…

It shows that the government is doing all it can:

– to secure a stable, certain environment for energy investment…

– to create jobs…

– and to ensure the UK plays its full part in tackling climate change.


As I see it, this plan is a blueprint for Britain…

From which we will literally build the foundations of our future prosperity.

I want to see everybody…

Be they politicians or investors…

Project managers or engineers…

Getting behind it.

And helping to deliver it.

It’s a plan that demonstrates a long term vision, for our energy and our transport and our digital networks…

It’s a plan that is helping to secure long term investment – as we’ve seen from the insurance sector…

And ultimately, it’s a plan that will lead to sustainable, strong long term growth.

And help us to build a stronger economy in a fairer society, where everyone can get on in life.

Thanks for listening.