Danny Alexander – 2013 Speech at the Scottish Productive Ageing summit

Below is the text of the speech made by the Chief Secretary to the Treasury, Danny Alexander, to the Scottish Productive Ageing Summit held on 3rd October 2013.




Thanks Richard.

I was especially keen to come and speak at your conference today…

Because the subject you’re discussing – productive ageing – is a huge issue for this government.

And I also think – unless we take the right decisions in this area now – it will become one of the biggest challenges facing our country in the future.

Why important?

So why do I place such emphasis on this?

Since I joined the Treasury one of our biggest goals has been to secure our country’s long term economic future.

That’s why we’re reducing the deficit, to make sure that our grandchildren won’t have to pay off this generation’s debts.

And that’s why we’re investing in our infrastructure, so that the next generation have the best possible transport and digital networks to support future economic growth.

But if we really want to secure the long term economic stability of the UK, one of our key challenges will be to keep control of the dependency ratio.

Which in plain English – as most of you will know – is the number of dependent people not of working age, relative to the number of working-age.

To do that, we have to ensure that our older people can be as productive as possible.

Because – over the longer term – any significant increase in that dependency ratio would place a greater tax burden on everyone of working age…

And result in a smaller working population, paying for an expanding support system.

Just to illustrate the scale of the challenge facing here…

The OBR’s projections suggest that public expenditure on older people is set to rise by nearly 4 ½ per cent of GDP between 2016 and 2060.

That’s an increase of £66bn in today’s terms.

And the figures here in Scotland are even more profound.


The Scottish government’s own research shows that this nation could see a 50% increase in number of people over the age of sixty through the next twenty years.

But despite that research, that same Scottish government concocted a statistical mirage recently to suggest that – somehow – the pension costs of an independent Scotland would be lower than the rest of the UK.

They did this by fiddling the figures and pretending that teenagers are now pensioners.

According to independent forecasts, by the year 2060, each pensioner in Scotland will be supported by just 1.9 people of working age, compared to 2.2 in the rest of the UK.

This is the key dependency ratio when it comes to assessing the cost of pensions.

But in their paper, the Scottish government used a dependency ratio that included those under 16, as well as pensioners.

So – because the rest of the UK has a higher number of children – they decreed that Scotland would have a lower cost of pensions.

And based on those rather suspect figures, they released a paper that suggested they may not increase the state pension age if the ‘yes’ campaign won the referendum.

Not only is that maths highly questionable.

But a two year delay in increasing the state pension age could cost an independent Scotland £1.4bn.

And by 2030, it could mean 30 000 fewer people in employment…

And a reduction in GDP of over £1bn a year.

It also strikes me that the implication that when people hit 65 they want to put their feet up is misleading.

That isn’t what I see either here in Scotland, nor south of the border.


That’s why this conference, and the work that so many people here are doing, is so important.

We need to turn that argument – and that perception – around.

And – at the risk of going a bit JFK – we need to look not at what our older generations take from society…

But what they contribute to society.

There is – as you will well know – a whole host of evidence out there about the advantages older 65s offer in the workplace:

McDonalds report a 20% higher performance in their outlets where workers over 60 are employed…

B&Q report that absenteeism is 39 per cent lower among their older workers…

and Hertfordshire County Council found that 65 year olds were their most engaged workforce group.

So this age group can offer a huge amount for individual businesses.

In fact, if we look at things on a larger scale.

Studies show that if everyone worked just one year longer, we could see real GDP increase by around 1 per cent.

That’s the equivalent of £14bn for the UK economy every year.

And that’s something it would be foolish for any Treasury Minister to overlook.

Of course, it’s worth saying at this juncture that this isn’t about trying to force retirees back to work.

Where people have worked hard, and saved wisely, and want to relax into retirement they should have every right to do so.

And the changes that my colleague Steve Webb – the Minister for Pensions – has overseen on auto enrolment will make it much easier for people to start saving for and planning for their retirement.

But where our older generations want to remain in the workplace…

And want to continue to support their families, and contribute to our economy…

Then we need to make that not only possible, but also much easier.

The government has taken a number of steps towards doing just that.

What is the government doing?

First, we’re bringing forward the increase in the state pension age.

Back in 1981, a man retiring at 65 typically had about 14 years of retirement; today it is around 21 years.

A woman retiring at 60 in 1981 would have had about 22 years of retirement – today it is around 29 years.

Now I for one am, and I’m sure everyone in this room is, delighted that people are living longer!

But we have to take account of that increased life expectancy in the State Pension Age…

Which will now rise to 66 by the year 2020 – six years earlier than previously planned.

And – should the current legislation go through – it will rise again, to 67 by the year 2028.

I hope everyone here will agree that this is a sensible step in recognising an ageing population, and encouraging people to remain in the workplace.

The second strand is our work – led by the Department for Work and Pensions – to increase the participation of our older generations in the labour market.

As part of this, DWP have launched an Age Positive Initiative to give guidance and case studies to employers and businesses…

They’ve launched a sector initiative to drive forward changes in the employment and retention of older workers…

And they’re also working with expert organisations through the Age Action Alliance Healthy Workplaces Group, to help employers more effectively manage the health of an ageing workforce.

The third – and I think the most important – change that the government is making…

Is removing some of the ageist provisions that already existed in UK law.

This Tuesday marked the two year anniversary of our phasing out of the default retirement age.

Meaning that most people can now work for as long as they want to, and that they can’t be discriminated against for taking that decision.

In that same year – 2011 – we also removed the effective requirement to annuitise by 75.

Which has ensured that individuals now have increased flexibility over their retirement age, and increased choice over purchasing a retirement income product.

Those actions…

– on increasing the state pension age…

– on helping employers to recruit and retain older workers…

– and on removing ageism from the system…

Add up – I hope – to a sensible set of policies that not only recognise the need to reduce our dependency ratio, but also recognise the economic contribution that our older citizens can make.

Civic Society

So far I have focused entirely on the economic contribution.

But I think it’s also vital that we also recognise the massive – and often unsung – contribution that our older generations offer in civic society.

Here in Scotland for example, 31% of adults volunteer , many of whom are older citizens.

Very often this is on a local scale…

I know that most of the charity shops in Inverness couldn’t run without a core team of retired workers.

But older people also play a key role – often an unpaid role – on charity boards, or as school governors, or in local politics.

And it’s important that we acknowledge what a huge asset these people are to our country, and the skills and enthusiasm and knowledge they bring to these roles.

Changing Perceptions

But as I said earlier, I think if there’s one big battle we’ve got to fight here, it’s a battle of perceptions.

It’s true that – very often – society places an awful lot of emphasis on the young.

And sometimes this is a good thing…

We need to keep producing the business leaders and the civic leaders of the future.

But we should also shine more of a light on the crucial role our older generations can play.

We’re in a country which is ruled by an 87 year old.

There’s a member of staff in my office still mourning the fact that a 71 year old is no longer in charge of Man United!

There are two goals that have driven everything the government has done.

And they are…

Building a stronger economy; and

Building a fairer society.

I firmly believe, that if we can make the best possible use of our ageing population…

If we can ensure that they remain in the work place, rather than being ousted by nervous employers and outdated legislation…

If we can celebrate what they contribute, rather than what they consume…

And if we can base our decisions on the pension age around long term economic stability, rather than short term politics…

Then those older generations can play a key role in building that stronger economy…

And in making our society fairer too.

Thank you for listening.

Danny Alexander – 2013 Speech to Liberal Democrat Conference

Below is the text of the speech made by the the Chief Secretary to the Treasury, Danny Alexander, to the Liberal Democrat Conference in Glasgow on 17th September 2013.


Conference, it’s great to have you here in Scotland. In Glasgow or, as we like to call it in Inverness, ‘the deep south.’

This great city has many claims to fame: its industrial heritage, culture, football, it’s even the home of the new Doctor Who. So, let take me you back in time. It’s spring 2010. We’re in the depths of the economic storm. Greeks rioting on our TV screens.

Labour had dug a gigantic hole of debt – the bankers had pushed us in. We were forecast to have the largest deficit in the EU. The polls had closed; we were in the uncharted waters of a hung Parliament. Action was needed. And as a Party, we stepped up.

Colleagues, just think if we’d acted differently. A minority government. Weak. Unstable. Unable to take decisions. And at the mercy of factions and extremists.

We would likely have seen another General Election within months.

A toxic mix of political and economic uncertainty. The hardships inflicted on other economies could so easily have happened here.

Yes, it has been tough, but those nightmare scenarios did not happen. They did not happen for one reason only.

Because of us. The Liberal Democrats. Because of our decision to ensure we had a stable government with a strong Liberal voice,

Able to act decisively. We didn’t duck the challenge.

We rose to it. There were plenty of people who didn’t think we were up to it. When I first became the Chief Secretary, there were even some people who questioned my, how should I put this, my employment record.

Clearly they hadn’t looked closely enough at my CV. You see, as a teenager I worked in the Tomdoun hotel in Glengarry. I washed plates in the kitchen, I polished pint glasses in the bar, I even cleaned the toilets. I basically spent most of my teenage years cleaning up other peoples’ mess. Perfect work experience for an aspiring Chief Secretary.

But with every step towards economic recovery we take, the party that caused the mess, the Labour Party, become even less credible.

Ed Balls bet the house on a failing economy. He banked on a double dip that never happened. He predicted a triple dip that never came.

And now even his closest colleagues admit he is a busted flush.

The Labour Party has opposed every single decision we’ve made.

That was until Ed Balls declared that the Labour party would adopt a new found “iron discipline” in public spending.

In fact, so strong is that commitment that the two Eds have managed to limit themselves to a meagre £45bn of extra spending commitments. To be fair, once you’ve left the next generation with a debt of £828bn to pay off. Rising at the rate of £3 billion a week,

Without any plan to deal with it, what’s another £45bn between friends? They derailed the economy. And if they had the chance, they’d do it all over again. The last thing Britain needs is a Labour majority. Conference, I was going to read you a list of barmy right wing Tory ideas that we’ve stopped in government.

But it’s so long I don’t have time, and after Nick’s appearance yesterday, I’m worried about Justine McGuiness cutting me off.

But I can’t resist just two. Two Tory ideas that put jobs at risk.

First, some Tories believe that the best way to help businesses hire someone is to make it easier to fire someone.

They believe that people that work hard, do their job day in day out,

Let’s call them ‘strivers’. Should be allowed to be fired at the will of the employer. Well conference, let me tell you this – it will never happen. Not while there are Liberal Democrats around the Cabinet table.

And then there’s Europe. For many Conservatives, the EU is the bogeyman responsible for every wrong. But for 3.5m people in Britain, it’s the reason they have a job. That’s 3.5m jobs that some Tories want to put at risk by leaving the European Union.

They should know, you can’t win the global race, unless you’re part of a strong team.

The last thing Britain needs is a Conservative majority. But the Conservatives aren’t the only ones wanting to break up a union, whatever the costs.

As a Scot, I believe that being part of the United Kingdom offers Scotland huge advantages in the 21st century. I believe the best choice is for us to stick with a family of nations in which we have thrived and prospered. To grow together, not break apart.

In the end, nationalism is all about building barriers between peoples, whatever the cost. Liberalism is about knocking those barriers down.

Today’s National Institute report shows that with Scotland as part of the UK, interest rates are lower and taxes are lower. That’s the value of the United Kingdom.

Another credible, independent, factual analysis that backs the case for our United Kingdom. So our job, from now until the day of the referendum, is to prove that “Better Together” isn’t just a slogan. It’s the truth. Tens of thousands of jobs in Scotland depend on us winning that fight. For the sake of our country, our children, and our grandchildren, we cannot, must not and will not lose.

We’ve seen the economy through its darkest hour, by ensuring that the Coalition’s economic plan is pragmatic. When the eurozone crisis was raging. When our growth forecasts were going backwards

Siren voices on the right called for us to respond by cutting further and faster. It was the Liberal Democrats who ensured the coalition remained anchored in the centre ground.

There is still a long way to go, but our stronger economy in a fairer society is beginning to take shape. We are rebuilding an economy that is sustainable, balanced and resilient. And we are making progress. Activity in the manufacturing sector has reached a two-and-a-half-year high, in construction a five-year high and in the services industry a six-year high.

Business confidence is at its highest level in six years. British businesses have created an extra 1.4m jobs in the private sector, supported by the decisions this Government has taken.

We have the lowest number of people claiming unemployment benefit in four years. A record number of women in work. A higher rate of employment than the US.

The highest number of people in work. Ever. Labour’s failure to regulate the banks meant that they had to spend billions of pounds of your money to bail them out. We’re fixing the banks and the economy is on the mend. So last night following advice from the Treasury we decided to start to get your money back.

The first sale of Lloyds’ shares, at above the price Labour paid, is an important milestone. And in future sales we will look for ways in which the British public to get involved. Because we are mending the economy, the tax payer is at last getting their money back.

The recovery is under way. Much more needs to be done to secure it.

And we won’t flinch from our task. Anyone who claims the better economic news is all down to the Conservatives is just plain wrong. The decisions we have implemented in government, decisions you have taken in this hall. The brighter future that lies ahead – it’s only there because of us. And we should shout it from the rooftops.

We still have work to do to finish the job. That’s not a task than can be entrusted to either of the other two parties. I say to the British people, if you want that job finished right – with balance, fairness, and resolve – you need the Liberal Democrats to do it.

We’ve taken tough decisions to get the deficit under control. And, yes, there will be more in the next Parliament. It will be another five years shaped by the necessity of fiscal restraint. But by the middle of the next Parliament we will have eliminated the structural deficit.

That doesn’t mean the country can then go back to bad old habits. There’s no spending bonanza round the corner. Our nation’s debt will need to be reduced. It wouldn’t be fair to pass it on to future generations. The pressures of an ageing and growing population will have to be paid for. Conference, when those difficult decisions need to be made, the British people now know that they can trust the Liberal Democrats to make them.

We’ve delivered long-held commitments too. This year, for the first time, the UK will deliver our long-held commitment to spend 0.7% of our nation’s wealth on international aid. Making a real difference to lives all over the world. Four weeks ago I met a young girl who told me how much she was enjoying school, and about her ambition to be a lawyer. Nothing extraordinary about that, you might think, but I met this girl in Kabul.

She is one of around two million Afghan girls who, thanks to the bravery of our armed forces and our international aid commitment, is now attending school on a regular basis. I also had the privilege of meeting an extraordinary group of serving men and women in our armed forces in Helmand, whose skill and bravery is making that change possible.

So, I hope you will join me in paying tribute to our armed forces in Afghanistan and across the rest of the world. As we look to the next Parliament, the tax policy we agreed yesterday puts us in a strong position to tackle the remaining deficit fairly. By committing to raise taxes on the very wealthy, through the mansion tax, through restricting pension tax relief, through increasing capital gains tax rates further, Liberal Democrats will ensure that those who have the most will continue to contribute the most.

These taxes on the very wealthy will be one of our central promises for the next Parliament. Making sure they can’t avoid their taxes is a job we are getting on with right now.

Benjamin Franklin said: “Nothing is certain except death and taxes.

And a conference announcement from Danny Alexander on tax avoidance”.

Ok, maybe he didn’t say that last bit. But conference, I make no apology for going after tax dodgers. Thanks to our efforts, by 2015 we will be clawing back an extra £10bn a year.

New investment, new specialist units, new tax rules announced from this podium are now closing the net on the immoral minority who believe paying the proper amount of tax just isn’t for them. But we must do more. We are cutting corporation tax to encourage firms to invest, not to give the wealthy a way to avoid the 45p tax rate.

So when the vast majority of people in an industry are finding ways to exploit that difference, and that industry is the preserve of the very wealthy, I have no hesitation in acting. So I can announce today that following a brief consultation we will be closing the loophole that allows private equity shareholders to siphon money out of their firms while dodging the intended income tax.

And it’s why I can also announce that we will also be closing the loophole that allows partners in partnership firms to structure their staff arrangements so that they avoid paying the correct amount of income tax. It’s wrong, it’s unfair, and it’s got to stop and with Liberal Democrats in government, it will.

Conference, the pressures on household budgets in this country are real. Liberal Democrats are doing all we can to help. We have introduced 15 hours of free childcare for all three- and four-year-olds, and this month introduced it for the poorest 40% of two-year-olds too.

Next year we will legislate for tax free childcare worth £1,200 for every eligible child. Unlike tax breaks for marriage, that’s a fair way to help families. We have frozen council tax for every year of this Parliament. Our triple lock is protecting the value of the basic state pension.

We have scrapped Labour’s fuel duty rises. So thanks to us petrol is now 13p a litre cheaper than it would have been. 18p a litre if you live on a remote island. Saving every business and family in the country money. And helping literally to keep the wheels of the economy turning. But there is more to be done.

In January we will launch the next phase of Help to Buy. Too many young people aspiring to get on in life are stuck. They earn enough to repay a mortgage, but don’t have the funds for a large deposit. It is right that the government should step in to help them. And it is also right that we need to build more homes, including affordable homes.

Over the last decade rents have risen twice as fast as wages, stretching family budgets. But some landlords still failed to pay the right tax due on the rents they receive. I’m talking about landlords who own more than one property, who rent to students, people with holiday lets and those who let houses in multiple occupations.

And it adds up to a staggering £500m owing to the taxman. And we want it back. So we’re launching a campaign with a simple message for the rogue minority of landlords. Pay up or face the consequences.

In my three-and-a-half years in the Treasury, tackling avoidance has been one of my obsessions. But my true passion has been delivering our tax promise to Britain’s working people.

It was Mr Gladstone, whose portrait hangs on the wall of my office, who said; “The idea of abolishing income tax is highly attractive.”

Now, conference, we don’t go that far. But we have abolished it for nearly 3m low income workers.

What’s more, we have given 25m working people the biggest tax cut in a generation. This would have been a big deal in times of plenty.

To have achieved it now, in these difficult times is extraordinary. Practical help for millions of working people – Liberal Democrats, we made it happen. And conference, yesterday, we committed to cutting the tax paid by ordinary workers even further.

So you don’t pay any income tax until you earn more than a full time salary on the minimum wage. £700 a year back in the pockets of 25m working people – that’s our record of action. Our promise of more – another £500 off your tax bill, if you put the Liberal Democrats back in government next time.

Conference, Liberal Democrats in Government has already helped businesses create more than 1m jobs, and now we’re working to help them to create a million more. That’s why this April, every business and charity will have their National Insurance cut through our £2,000 Employment Allowance. That’s enough money for a small business to employ four adults.

Or ten 18-20-year-olds on the National Minimum Wage. Without paying any employer national insurance at all. Real, tangible help for every small business in the country. At its heart, the next general election will be about who the British public trust to deliver a stronger economy. And who they trust to deliver a fairer society.

Because the benefits of a stronger economy must be shared. Shared in every corner of the United Kingdom. Shared across all the people of Britain. ‘The economy’ is not some abstract concept. It’s about people. It’s about their jobs, their aspirations and their hopes.

Only the Liberal Democrats can deliver a stronger economy in a fairer society so that everyone can get on in life. The last thing Britain needs is a Labour or Conservative majority. Labour can’t be trusted with the economy. The Tories can’t be trusted to create a fair society.

So if you’re looking for work and want a Government that will help you, if you have a job, but want security in your job, if you want to expand your business and employ more people, then there is one party that is on your side, The Liberal Democrats.

Danny Alexander – 2013 Speech to Grampian Chamber of Commerce

Below is the text of the speech made by the Chief Secretary to the Treasury, Danny Alexander, to the Grampian Chamber of Commerce on 1st March 2013.


Good morning.

I was especially pleased to be invited to speak in Aberdeen this morning, because for a Treasury Minister – in fact for any Government Minister – the biggest priority for the country has to be sustainable economic growth. And this city is a key hub for providing growth in the UK.

I want to talk about the steps this Government is taking to help support growth now. Most importantly though, I want to talk to you about why I believe this region – and Scotland as a whole – will have a far more economically prosperous future as part of the United Kingdom.

Aberdeen is – quite simply – one of the UK’s most continuously resourceful and inventive cities. It was Robert Louis Stevenson who said that ‘everyone lives by selling something’, and this is a city that has thrived on mining its rich local resources and selling them to the world. Some of these have been natural resources – granite, or fish, or oil – some of these have been human resources – like the graduates of the two excellent universities here – but this city has always thrived by trading. And it has always been a real asset for the UK in doing so.

We need to continue to provide the right conditions for the economy here to continue growing. Of course, many of the ‘growth’ levers that the UK Government deploys – areas like education, skills and infrastructure investment – are rightly devolved to the Scottish Government. And the UK Government is continually supporting the Scottish Government with additional funding to take their reforms forward.

But crucially, the UK Government also delivers for Scotland through reserved policy – meaning the people of Scotland benefit from the best of both worlds with two governments acting in their interests.

The action we are taking to tackle the deficit, support low interest rates and create a stable environment for the private sector is crucial in helping us to rebalance our economy and support sustainable growth throughout the UK. And specifically, I know a number of the businesses represented here will benefit from the changes the UK Government are introducing.

Like the steps we’re taking – particularly on corporation tax – to create the most competitive tax system in the G20. Or the support we’re providing to thousands of companies as we work to improve access to finance for SMEs, so badly damaged by the financial crisis. And I hope business here can also benefit from the support we’re providing to companies with overseas export opportunities.

I know businesses will benefit from reduced energy costs, and my colleague Ed Davey is just down the road today to announce that the Government intends to maintain the ‘Hydro benefit’ relief – worth £50 million on energy bills across the North of Scotland.

Reforming our financial services industry will also be a key step towards growth, and I’m pleased to see a number of people from the finance sector here today.

Our economy has yet to fully recover from the effects of the financial crisis, with the flow of credit in particular remaining impaired; So we’ve learned the hard way that financial stability is another pre-requisite for growth and investment in all sectors of the economy.

The reforms that the Government is taking forward in the Banking Reform Bill will produce a more stable banking system that is focussed on serving the needs of its real economy customers, and thus better able to support growth and investment in the UK.

And of course, it wouldn’t be a trip to Aberdeen without mentioning oil and gas, and I see we have a number of representatives from the sector here this morning. As a highlander I know how important this industry is to the area, and you can rest assured that as a member of the UK Government, I will continue to do whatever is necessary to ensure the oil industry remains the beating heart of the North of Scotland. A prosperous economic future for this area is reliant on fully exploiting the reserves here. That’s why the UK Government is implementing significant new tax reliefs and, for the first time, giving the industry long-term certainty (through Decommissioning Relief Deeds) that they will be supported to decommission when the time comes.

This is something the sector has needed for a long time, and our measures have been a real game changer for the North Sea, with new investments announced on what seems like a weekly basis. Just last month EnQuest announced a £169 million GBP programme of investment for Thistle to deliver threefold increase in production; and

Oil and Gas UK reported earlier this week that we now have the highest level of investment in 30 years.

In the last six months alone we have seen around £8 billion of investment, creating over 5000 jobs, and I’m sure there will more to come soon.

We also took steps last year to allow two new field allowances for large shallow-water gas fields and brown fields. Allowances that will support billions of pounds of investment in the North Sea, which will benefit growth and jobs across the sector in Scotland. We are taking these steps to encourage the levels of investment in the North Sea that are needed to extend the success of the industry and make the most of our reserves;

The UK Government is taking the long term decisions to secure the best future for this vital Scottish industry.

Now, for any Scottish business looking at its long term future, there is one rather big question on the horizon. And that question is whether your companies will be operating in the UK, or a separate Scotland. I’ve always been vocal about my support for a strong Scotland within the UK.

As you’ll well know, the Scottish Government likes to claim that taxpayers in an independent Scotland will be better off financially. These calculations are dependent on revenues that flow from the natural resources in this region. And let’s be categorical that these figures are based on a Scottish economy that benefits from being integrated and insulated within the larger UK economy. The Government Expenditure and Revenue Scotland – or GERS – figures do not reveal the fiscal position of an independent Scottish economy, which is what the Scottish Government would have you believe.

The figures show that with a geographic share of the North Sea, Scotland – as part of the UK – has contributed broadly the same proportion of the UK’s revenues since devolution as it has received in public spending. This geographic share averages almost £6bn a year since devolution [from 1999-00 to 2010-11].

But crucially, the geographic share of North Sea oil and gas revenues has fluctuated from just over £2bn to almost £12bn, depending what year you look at. Of course, with where the oil price and production levels have been the last couple of years, the GERS figures that will be published next week may well look favourable. But the volatility of price and production cannot be wished away, nor can you ignore the fact that these figures represent Scotland within the UK.

The UK as a whole can absorb such volatility by pooling tax revenues from a broad and diverse tax base. Within the UK economy North Sea revenues represent around 1-2% of total tax receipts. But for the figures produced for Scotland, this geographic share of the North Sea would represent around 10-20% of their revenues – a huge dependence on a volatile source of revenue.

Far more important than these past figures though, is what will happen in the future.

How the revenues, and liabilities, of the North Sea would be split in the event of a vote for independence would clearly be a matter for negotiation. But the independent Office of Budget Responsibility have forecast that oil revenues will be on a downward trajectory over the medium and long term. What this means is that by 2016-17 – which is the Scottish Government’s preferred year to begin independence – it is forecast that revenues will be around half the average of recent years. While this can be managed by the broader and more diverse UK-wide economy, a halving of North Sea revenues would equate to a significant reduction in Scotland’s total revenues – somewhere in the region of £4bn.

As I said, I expect that this week’s GERS report will show us that last year’s oil and gas receipts were strong. That’s great news for the sector, for Scotland and for the UK as a whole.

The oil and gas industry will surely play a strong role in the years and decades ahead, but its revenues will remain volatile while on a downward slope. And that is no basis on which to make an argument for independence.

Now to those who will say, predictably, that this is a negative argument, I say that in fact it is a simple truth. And we must not be afraid to speak the truth and inform this most crucial, constitutional debate. People must be allowed to decide how they will vote on the basis of how things are; not on how the Nationalists assert that they will be.

The truth is a positive thing.

Due to this decline in receipts, and due to acute demographic challenges – which will see a smaller working-age population in Scotland and therefore a smaller tax base – the independent Institute for Fiscal Studies has said that “over the longer run… an independent Scotland would face a bigger fiscal adjustment than the rest of the UK”.

Put simply, if there ever were an independent Scotland, it would be under fiscal pressures from Day One. Under fiscal pressures at the exact time that it would be required to enter financial markets and prove its fiscal credibility for the first time. And under fiscal pressures at the same time as the Scottish Government is promising to cut taxes and raise spending.

This is a false prospectus that does not add up. Just as when it comes to the stability of this sector, it is the same when it comes to the macroeconomic and fiscal stability of the United Kingdom. We are stronger, and we will be more prosperous together than we would be apart.

So where does this Government see the region continuing to support growth?

It is essential that we continue to look towards new and renewable energy sources, and I’m very pleased that someone from the Aberdeen Renewable Energy Group is here today.

Last summer the Government set the level of support for renewables under the Renewables Obligation out to 2017. We also introduced the Energy Bill which will reform the electricity market to allow renewables to have certainty on the price they will receive for the electricity they sell, and we will be consulting on the levels of support for renewables coming forward under electricity market reform in the summer. This is a step that will give investors the clarity they need to bring forward new renewables projects out to 2019; and

In November last year, the Government announced that the Levy Control Framework in 2020 would be £7.6bn. This is a commitment to tripling the resources available to support low carbon growth, backed by over 60 million UK consumers.

Yet again, a reminder that we are better together.

As well as meeting our energy needs for the future, we also need to create an infrastructure fit for our future, so that our businesses can compete in the 21st century. Much of our spending in this area is being invested in our road and rail networks, but of equal importance is the investment being made in our digital networks.

We remain committed to supporting UK-wide roll-out of superfast broadband, and £100m has been allocated to the Scottish Government in this area – nearly one fifth of the total superfast broadband commitment. In addition, Aberdeen is one of the 22 cities to successfully compete for a proportion of the £150m fund to support ultrafast broadband in a network of UK cities.

Aberdeen’s very impressive plans will enable cutting edge connectivity to be delivered throughout this city, and commercial roll-out of 4G mobile services will further enhance its digital connectivity.

I’m wary that we’ve got a Q&A session coming, so I’d like to leave you with these thoughts.

This Government wants to see balanced, sustainable and strong economic growth for the UK, and we will do our utmost to support those cities and regions which make growth happen.

Aberdeen is such a city – Aberdeenshire is such a region – and we are confident that the actions this Government has taken will continue to support you to achieve that growth.

I strongly believe though, that the region is more likely to remain prosperous, more likely to achieve growth if it continues to be part of a United Kingdom.

Thank you for listening.

Danny Alexander – 2012 Speech on the Welsh Funding Announcement

Below is the text of the speech made by the Chief Secretary to the Treasury, Danny Alexander, on 24th October 2012 in Cardiff, Wales.



I’m delighted to be here today making a statement that brings more good news in the form of new commitments on the future of Welsh funding.

Today the UK and Welsh Governments are announcing that we will regularly review relative levels of Welsh funding.  Take from me that this is a very clear signal that the UK Government recognises that this is a major concern in Wales.  I have also agreed that capital borrowing powers should be devolved in Wales, as long as there is an independent revenue stream in place to support them.

In July, in a joint article, the Chancellor and I outlined the Government’s commitments to restoring competitiveness and infrastructure across the UK.

We put our money where our mouth is when we announced one of the biggest overhauls of our railways since Victorian times, including the electrification of the lines from Cardiff to Swansea and the Welsh Valleys.

And today, UK and Welsh Government support is enabling a partnership of leading universities and multinationals led by Swansea University to launch a new Knowledge and Innovation Centre with the aim of creating a range of renewable energy products that could revolutionise the construction industry.”

The joint statement on funding that we are announcing today is another major step forward for Wales

I’d like to pay tribute to Jane Hutt.  Jane it has been a pleasure to reach this agreement with you and be a part of talks that have been so genuinely collaborative.  The fact that our governments can work together in this way is another shining example of the benefits of one United Kingdom.


Historically, Welsh funding per person has been higher than in England but has been converging towards English levels.

Our joint forecasts show that convergence is not currently occurring. In fact over the next few years Welsh funding will diverge away from England.

However by planning for the long term best interests of Wales, we recognise that this is an issue of deep concern here. It is with this in mind that for the first time the UK Government will jointly assess forecasts of relative funding levels at every spending review. If convergence is forecast to resume we will look at the options to address it; and we are committed to only implementing changes that both governments can accept as being fair and affordable.

The Silk Commission

Today’s agreement establishes a solid platform to consider the Silk Commission’s report, to be published this Autumn. Having seen the hard work of Calman come to fruition I am very proud to have been part of a negotiation that delivered this for Wales and I believe their recommendations could represent an historic step for Welsh devolution.

Fiscal devolution is a necessary next step for the Welsh Government and opens up new opportunities to boost financial accountability and greater spending power.

For the first time the UK Government agrees that the Welsh Government should be given capital borrowing powers, on the condition that this is supported by an independent revenue stream – like devolved taxes, currently under consideration by the Silk Commission. Let me be clear: if Silk recommends devolving revenue raising powers, and Wales implements them, then we put in place commensurate new borrowing powers for Wales.

Devolved capital borrowing powers could be used to supplement long-term infrastructure investment, building on the measures the UK Government has already supported in Wales such as the unlocked funding to electrify the valley lines, and the funding to establish Cardiff as one of the first ten ‘Super-connected cities’ in the UK.

I am delighted that the UK and Welsh Governments have worked so closely and effectively together to deliver on this outcome today.

I am hopeful that we will be able to build on what we have achieved by making real progress on the Silk agenda over the next few months.  We need to move quickly towards lasting reform based on consensus.

This agreement opens the prospect of a new financial settlement for Wales: greater accountability, greater responsibility, more revenue raised and spent here, and more ability to shape growth, safe in knowledge that the rug will not be pulled from under their feet by some future UK Government.

We have demonstrated once again that all parts of the United Kingdom benefit from working together.  We are better together.

Danny Alexander – 2012 Speech on Financing Capital Infra-Structure

Below is the text of a speech made by Danny Alexander, the Chief Secretary to the Treasury, on 10th September 2012 at The Stock Exchange Forum in London.


Rarely has there been a time when the issue of growth and economic balance has been so prominent in public discussion, nor has there been a time in recent memory in which the circumstances for growth have been so challenging.

So it has never been more important for Government to be focussed on meeting those challenges and delivering long term growth that is strong and sustainable, and an economy that is balanced across geographic regions and economic sectors.

The role of infrastructure in delivering that goal cannot be underestimated, and so it gives me great pleasure to address you on financing and delivering through both the public and the private sector, working in partnership – to deliver on public priorities efficiently at a time when finance is in short supply.

Our priority is to return the UK to sustainable prosperity and rebalance the economy. Central to achieving that is our focus on fiscal consolidation to return sustainability to the public finances and ensure the UK retains the confidence of international markets.

But fiscal consolidation, though essential, is only part of the story. Delivering sustainable and balanced growth means supply side reform – to ensure that Britain is more than ever an excellent place to do business, and to raise our growth potential by creating an environment in which all sectors can thrive.

There have been long standing weaknesses in the quality of our infrastructure. The quality of our roads, railways, energy and telecommunications infrastructure is an effective driver of our fiscal economic growth package, as well as a key driver of the ability to give our cities the right chance to realise their potential.  This is why infrastructure is at the centre of our strategy to kick-start our economy.

The Government’s National Infrastructure Plan, and the steps we are taking to implement it, are a clear recognition of the importance of infrastructure in achieving our goal. That Plan takes a comprehensive look at the UK’s infrastructure requirements across both the public and the private sector, and sets out how those requirements will be met.

It outlines major spending commitments to improve our transport and broadband networks, and to attract substantial private sector investment into priority projects.

It sets out concrete measures to improve the efficiency and effectiveness of infrastructure delivery – responding to and addressing concerns from businesses and investors. And it sets out the path to a stronger, more sustainable, more balanced economy.

A newly established Cabinet Committee, which I chair, is ensuring that plan is delivered in full, and that all parts of Government play their part in tackling barriers to delivery and addressing commercial and public concerns.

Of course, while the scale of construction and operational challenges are significant, it is the challenge of attracting the substantial necessary investment that is perhaps the most remarkable – over £200 billion of infrastructure investment over the next five years alone.

Given the pressures on the public finances, and the disruption to long-term lending caused by the ongoing instability of financial markets and the Eurozone, that is no easy task, and not one that will resolve itself. Stock Exchanges like this one play a very important role providing an efficient market for that finance in such difficult circumstances, and Government has a major role to play too.

I want to talk to you today about how key private sector organisations like this can work together with Government to meet the impressive challenge that we face to deliver for the UK in this challenging climate, and how we are using the best of the public sector and the private sector to promote a strong and balanced recovery.

First, we are making tough choices to prioritise capital spending on infrastructure within a shrinking government budget. At the Spending Review, we took a conscious decision to protect the most productive public sector investment, and actually increased the capital spending envelope despite pressures elsewhere.

In particular, we prioritised economic infrastructure that supports growth, such as investment in transport and communications – where we are investing even more tax payer’s money than at the height of the spending boom.

The Spending Review supported the delivery of £18 billion of rail investment over the course of the parliament, including work that is underway on major capacity upgrades into London via Crossrail and Thameslink, a major upgrade of the Great Western Main Line, and a new electric route between Liverpool Manchester, Leeds and Newcastle, with significantly faster journey times as a result.

That is alongside £4 billion to maintain and enhance the national road network, and £6 billion for major local transport projects and enhancements.

At last year’s Autumn Statement, we announced a further £1billion for road schemes, and increased the £1.5 billion committed to major local transport projects at the Spending Review by a further £170 million.

At Budget this year, we announced ten cities that will now enjoy ultra-fast broadband and high speed wireless connectivity as a result of Government investment, with funding set aside for a further ten. And a £150 million Mobile Infrastructure Project to deliver coverage to 60,000 rural households and at least ten key roads by 2015.

In July, we announced a further £9.4 billion of infrastructure enhancement, including further targeted rail electrification, increased rail capacity on key commuter lines, and a new corridor linking the core population and economic centres in the East and West Midlands and Yorkshire with the South of England.

And we plan to continue that commitment to investment beyond the current spending review period – delivering a big uplift in capacity and connectivity between our key cities through High Speed 2, and continuing a long term electrification strategy to deliver a high capacity, sustainable railway. On present plans, we will support almost £22 billion of rail investment between 2015 and 2019.

Better rail and broadband infrastructure across the UK will allow businesses to flourish more easily without locating in the South East corner of the country.

It will allow for a growth in rail freight and improve links between our major ports, airports and corporate centres. It will allow firms to recruit from a wider pool of workers, and workers who may otherwise be unemployed or underemployed to access a wider variety of jobs.

At the same time, our investment in rail is supporting development of skills more directly – Network Rail is taking on a substantial number of apprentices and funding a programme to give placements to unemployed graduates across the industry. This is alongside our broader programme of Government funding to equip young people to deliver for the UK – funding which means that this Government will deliver at least 250,000 more apprenticeships over this Parliament then planned by the previous government.

Of course, though we prioritised capital investment at the Spending Review, it is neither possible nor desirable for taxpayer money to do everything. The vast majority of the investment the UK will require will come from the Private sector. And we want to ensure that finance is as easy and cost effective to raise as possible.

So second, we are doing more to help private sector investors access finance for priority projects. We are making sure that money goes further by reducing costs due to unnecessary complexity in areas like planning and regulation. And we are working with investors at home and abroad to see what we can do to help British business.

While prioritising capital spending has provided the necessary public finance, our fiscal strategy also helps to improve conditions for private sector finance, against the headwinds caused by the global financial troubles.

Our focus on fiscal consolidation has achieved credibility with the markets that has driven interest on government borrowing to record lows of around 1.5 per cent. That keeps interest rates low for households and businesses, as well as the taxpayer – and a 30-year yield of 3 per cent is particularly helpful for long-term investment, with benefits for infrastructure expansion and its costs to consumers.

Fiscal consolidation also gives the space for the Bank of England to keep interest rates at an all time low of 0.5 per cent, and to pursue further monetary policies to support investment, such as quantitative easing and the new Funding for Lending scheme, which came into operation last month. Both policies are helping to ease credit and balance sheet conditions for financial organisations, freeing up more money to lend; and the new Funding for Lending Scheme in particular will provide strong incentives for lending, by offering more finance on more favourable terms to Banks that lend more.

Our hard won fiscal credibility has also allowed us to support investment directly, for example through the ‘UK Guarantees’ scheme, also announced last month. By allowing high priority projects to benefit from the UK Government’s balance sheet credibility, we will be able to accelerate and bring forward up to £40 billion of major projects that are struggling to access private finance.

Although it is still early days, interest from industry has been strong. In the six weeks since launch, Treasury has had discussions with over 30 companies and project sponsors responsible for projects worth over £5bn in priority investment areas such as energy, transport, water, waste and telecommunications. Detailed discussions are already taking place with the Mersey Bridge Gateway project, considered one of the world’s top 100 infrastructure projects, and the Green Deal project I announced a few weeks ago will also be considered to ensure it goes ahead on time.

While the measures we are taking will greatly improve companies’ access to debt finance, we should recognise that the days of cheap and readily available bank originated debt finance are over. As a result, new sources of capital are increasingly important. Equity markets, for example, serve as a significant source of long term non-bank finance – during the height of the crisis, between 2008 and 2010, the amount raised in equity for publicly listed companies was similar in level to the amount pumped into the economy through Quantitative Easing.

The growing retail bond market also presents potential for improving access to finance by offering issuers the opportunity to reach out directly to retail investors. National Grid raised a record £260 million through this medium in October last year.

Following Tim Breedon’s report, that we commissioned to examine the structural and behavioural barriers to alternative debt markets in the UK, we are committed to ensuring a proportionate regulatory regime to support these important lending channels.

More broadly, we are working with private sector investors to understand what more we can do to ensure that the deepest possible sources of capital are available to the widest possible range of projects, and to promote inward investment from abroad.

For example, the new Pension Infrastructure Platform, which we have committed to establish with the National Association of Pension Funds and the Pension Protection Fund, will allow UK pension Funds to invest directly in UK infrastructure assets and projects in a new and more efficient way.

We have now obtained written confirmation from seven UK pension schemes to fund start up costs, and soft commitments for initial capital allocations. We expect the Platform to raise its target £2 billion by January to start investing in key projects.

Another productive area of collaboration has been the Insurers Infrastructure Investment Forum we set up with the Association of British Insurers. Through this, we have looked at how projects can be better structured to meet the investment propositions of annuity funds and liability-driven investments, and found ways to maximise opportunities for insurance fund managers to invest in infrastructure debt instruments – engaging with credit rating agencies, improving performance data reporting to creditors, and developing a private market for unrated or lower rated debt.

Meanwhile, UKTI continue to do excellent work promoting UK infrastructure for inward investment from sovereign wealth funds and other institutional investors overseas.

And we have seen a number of high profile successes this year, including from China, Japan, Qatar and Kuwait.

While we have achieved much both through targeted government spending and through freeing up private finance, there is still scope to improve how the private sector and public sector can work together in more innovative and productive ways. While past PPP arrangements have on occasions been less than perfect, I firmly believe that with the right approach and focus, the right partnerships can use the skills and innovation of the private sector to deliver on public and social priorities more effectively than ever before.

So to finish off, I want to talk about what we are doing to improve our work with the private sector to deliver real value for money for taxpayers.

The UK Guarantees Scheme, which I mentioned earlier, could also allow up to £6 billion pounds of public-private partnership projects to proceed without delay.

And we are looking at how more innovative modes of working with the private sector can allow us to meet the UK’s infrastructure demands.

At Budget, we announced options to improve A14 capacity that could be part financed through tolling, and more broadly, we are looking at ways to increase the role of private investment in the strategic road network. For example, looking at how a Regulatory Asset Base could be used to expand private investment in roads infrastructure, while improving efficiency. We will be announcing the results of that study later this year.

With sovereign bonds and other long term assets either seen as riskier, or with yields at all time lows, investors are queuing up for utility assets to invest in with guaranteed returns over long periods, and we hope to be able to unlock some of that investment to good effect.

That rise in investment could bring England’s roads up to the best in Europe – reducing congestion and travel time on key routes through expanding hard shoulder running schemes, dualing existing A roads, and adding lanes to existing motorways. In the longer term it could be used for new routes.

Another area where private money can help to deliver our public goals is in Energy.  By 2020 we plan to generate 15 per cent of our energy from renewable sources, and Ofgem estimates that £200 billion in energy investment will be required between now and then.

That is a challenge that cannot be met with the often haphazard and wasteful approach to Government subsidy taken in the past. The private sector will need to take the lead, supported by a Government committed to removing the barriers and uncertainty that have for too long prevented the necessary investment.

At the end of July we launched the Banding Review for the Renewables Obligation. We also recently published our draft legislation on Electricity Market Reform, which will reform the Energy Sector to ensure that it can access the finance required to meet our Carbon reduction and energy security needs.

That will be achieved through a number of instruments:

  • contracts for Difference, to provide stable and predictable incentives to invest;
  • a Capacity Market, if needed, to provide security of electricity supply by ensuring sufficient reliable capacity is available; and
  • transitional arrangement to ensure that the existing Renewables Obligation can operate stably once it is closed to new generation in 2017.

In addition, we have granted development consent to 24 energy generation projects all over the country since 2011, supporting over 4000 construction jobs and producing enough electricity to power over eight million homes.

Finally, we are reforming PFI to ensure that it secures long-term value for money for the taxpayer, while also making sure we retain the benefits that successful PFI can deliver – getting projects built to time and to budget, and creating the correct disciplines and incentives to manage risk effectively.

We’ve seen high levels of engagement, with over 150 written responses to our call for evidence, and around 100 stakeholder discussions to support this process.

We are now considering the wide spectrum of views expressed on how best to achieve more effective use of private sector innovation, skills and investment, to reduce costs, improve flexibility and increase transparency, and we will be setting out our conclusions this Autumn.

By being proactive and innovative about helping the private sector deliver for the UK, we can promote a recovery that will allow Britain to rise from the economic turbulence as a stronger and more balanced economy.

We are already starting to see returns to our approach – 840,000 private sector jobs created since early 2010, and the UK rising to 8 in the World Economic Forum Global Competitiveness Rankings this year – up from 10th last year, and ranked 6th in the world for infrastructure.

Of course, there is still much to do, and I hope I have shown you today that we are getting the most out of Government’s strong fiscal position and the private sector’s creativity and expertise. We will continue to look at what more we can do to make it easier for investors and firms to help us deliver on the UK’s priorities, and I look forward to hearing from you today about the challenges faced and how we can continue to help to address them.

Thank you.

Danny Alexander – 2012 Speech at the IFS

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


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

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

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

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

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

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

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

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

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

Fiscal discipline is not ideological.

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

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

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

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

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

Secondly, fiscal discipline is the vital precondition of growth.

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

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

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

226,000 new private sector jobs in the last year

634,000 since we came into Government

Private sector growth built on a foundation of economic stability.

Our Budget went even further in that ambition.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Or we could cut more now.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It remains a clear and present danger to stability.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Protecting health and schools spending in real terms

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

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

Reforming the welfare system

Getting defence spending under control

And we are already making good progress.

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

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

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

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

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

It shows that we are on the right path.

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

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

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

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

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

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

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

There are three core elements to this more rigorous approach:

Improving our monitoring of spending…

Improving our management of spending…

And improving our oversight and scrutiny of spending.

Let me take monitoring first.

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

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

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

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

That has to change.

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

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

Not months or years down the line.

Not when we’re trapped in the wrong track.

But in real time.

And improved monitoring will help change incentives on financial management.

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

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

We have to change those incentives.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you.

Danny Alexander – 2011 Speech to the Centre Forum

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


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

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

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

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

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

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

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

Our exports are gathering pace.

Employment is increasing.

Investment is picking up.

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

Decisions that have brought about economic stability.

Secured our international credit rating.

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

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

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

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

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

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

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

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

With cuts to corporation tax – to encourage greater enterprise.

Support for SME finance – to increase business investment.

Steps to ease burdens on business to create additional jobs.

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

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

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

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

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

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

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

Reconnect with the rest of the economy

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

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

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

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

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

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

This is vital.

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

If we take access to finance, for instance.

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

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

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

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

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

And this has not been a pain free process.

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

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

So there’s a very difficult balance to strike.

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


The Merlin Agreement being the most obvious example.

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

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

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

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

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

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

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

People want to see progress.

To demonstrate the value that financial services have to add.

To show everyone that the sector takes its responsibilities seriously.

And improve the links between our banks and our businesses

They expect it.

And we expect it.

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

Relationship with customers

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

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

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

We’re committed to changing this.

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

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

And this will be to the benefit of everyone.

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

But also financial institutions themselves will reap the rewards.

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

But the FCA alone is not enough.

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

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

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

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

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

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

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

The two are mutually reinforcing.

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

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

Economic rebalancing

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

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

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

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

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

It is about extending our country’s portfolio.

Spreading our success more evenly.

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

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

It was this that proved the foundation of your success.

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

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

Increased exports, not increased debts.

And green energy, green infrastructure and green technologies.

This is a huge opportunity for the financial sector.

To help support our move towards a better balanced economy.

Where growth is more sustainable.

More broad-based.

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

Let me conclude by saying,

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

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

And an ambitious plan for growth.

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

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

One that provides the lending essential for investment.

Restores trust and confidence in British business.

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

That is our ambition.

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

Thank you.

Danny Alexander – 2011 Liberal Democrat Conference

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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

It means telling it straight.

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

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

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

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

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

This decisive action has made an immediate impact.

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

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

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

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

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

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

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

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

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

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

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

A liberal economy shaped by free and open competition,

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

A liberal economy where growth is shared across the country

A liberal economy where taxation delivers fairness.

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

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

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

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

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

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

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

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

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

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

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

They are enemies of growth.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That’s why we commissioned the Vickers report

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

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

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

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

Thanks to Liberal Democrats there is genuine progress.

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

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

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

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

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

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

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

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

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

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

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

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

Let me tell you how we’re getting on.

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

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

And already this package is bearing fruit.

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

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

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

We can do better than that.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Danny Alexander – 2005 Maiden Speech in the House of Commons

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Peter Aldous – 2010 Maiden Speech in the House of Commons

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


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

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

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

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

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

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

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

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

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

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