Matthew Taylor – 2001 Speech to Liberal Democrat Party Conference

Below is the text of the speech made by Matthew Taylor to the Liberal Democrat Party Conference held in Bournemouth on 25 September 2001.

Before the appalling events in America, the row between the Prime Minister and the TUC (and many Labour backbenchers) over the Private Finance Initiative looked set to dominate the news.

Introduced by the Conservatives, PFI has been pursued by Labour in their “private is best” footsteps.

Liberal Democrats oppose this dogma – but not as members of the old-left’s “public is always best” camp either.

In theory, private involvement can, sometimes, encourage lower costs and better service, and real innovation.

For example, a company building a road can be paid for each day it is available. Therefore the designs minimise maintenance, meaning fewer traffic jams for you and me.

Similarly, in some PFI prisons bonuses are paid if re-offending rates fall – an incentive to concentrate on helping prisoners go straight.

Of course, some want private involvement ruled out altogether.

They claim the cost of borrowing is higher for the private sector than for government, and so it is always more expensive.

But the government is paying a little more to, in effect, insure against the risk of something going horribly wrong. Then it’s private companies, not you and me as taxpayers, who get landed with unexpected costs and overruns.

In any case, other savings may, may outweigh the interest costs.

Critics also mention that government is often tied into PFI contracts for 25 or 30 years.

However when government borrows for a conventional project it is also tied into contracts of 25 or 30 years – albeit for the repayment of debt rather than the provision of a service.

Either way, if the original service provided turns out to be mistaken, the taxpayer will still be paying for that mistake many years later.

In truth, neither private finance nor public service can rescue the taxpayer from bad decisions in the first place by the politicians.

But if the opponents sometimes exaggerate their case, the zealots in favour go further. Much further.

Both Conservative and Labour Politicians have suggested PFI magics up “extra” public investment.

But PFI is a form of debt just like government borrowing. It incurs charges for the service built, rather than interest on the money borrowed to build it.

Either way, the taxpayer pays.

Even if it doesn’t show in the Treasury accounts that way.

In truth, it only makes the Government’s figures look better – it doesn’t save taxpayers a penny.

Extraordinarily, the Treasury openly admit that they are willing to pay for more expensive forms of finance just to keep the cost out of the official statistics – a pure waste of public money.

When they did this for the Channel Tunnel Rail Link it cost us £80m extra – to make the Chancellor look prudent.

For the London Underground it will cost £700m extra for Gordon’s Brown’s obsession with appearing – just appearing – prudent.

That’s a shocking scandal. It’s one reason why we will put a stop to London Underground’s part-privatisation if we can.

Because of this, the Government usually refuses to publish their public sector cost comparisons with PFI.

For the NHS these show an average benefit of just 1% – which usually depends on unproven assumptions of long-term efficiency savings.

Claims of commercial secrecy are sometimes used to justify this cover-up.

Only because the Government was forced by a court to publish the Deloitte & Touche report, could we prove that the London Underground PPP calculations had been rigged, and that the bond scheme is clearly cheaper.

It is a shocking scandal. And we will put a stop to it.

Worse still, government Departments often get their sums wrong.

I can announce today that we have now examined all the National Audit Office’s reports on such schemes.

More than half show major errors in the calculation of costs – all favouring PFI.

At the very least this is gross incompetence.

Frankly, we believe the figures are being fiddled.

If it was cricket Gordon Brown would get a life ban.

We will put a stop to it.

So no surprise, there are problems with accountability.

Most PFI contracts replace unaccountable and over-centralised publicly run services with even more unaccountable and over-centralised privately run services.

Democratic accountability is actually diminished, particularly if information is treated as “commercial – in confidence”.

So it is time to sweep away this secrecy.

To expose private involvement in public services to proper scrutiny.

To knock it off its pedestal

To allow real choice. Examine every option.

Throw out the ideology.

This motion rightly doesn’t say it is always wrong.

It can, at the right time, in the right place, bring real benefits.

But rigging the system at the expense of democratic accountability, value for money or quality of service is wrong.

Totally wrong.

We won’t rule out using the private sector. To do so would be for us to say that even if a project could be proven to substantially improve public services then we would not use it.

But we do demand proof.



When public services are developed, all the options must be tested.

With the Liberal Democrats they will be tested.

So a word on the main amendment:

It implies that even when a partnership can be unequivocally demonstrated to be better, by our tests, we should not use it in the NHS.

That doesn’t make sense. If we believe these tests are right, we should have the self-confidence to use them. If NHS schemes don’t match up we’ll put a stop to them.

On the evidence.

But, by testing alternative provisions, the public sector is itself opened up to scrutiny of its costs, its quality of service, and its ability to innovate.

Liberal Democrats in local authorities and the devolved administrations have often delivered greater accountability and transparency in PFI projects.

The challenge now is to ensure that all public private partnerships are tested in this way.

Freeing local authorities and devolved administrations to borrow on financial markets, subject to the same rules as central government, would further level the playing field between PFI schemes and other alternatives.

Labour have wedded themselves to PFI, whatever the cost.

The Conservatives can offer no opposition to this, only support.

They invented it.

So it falls, yet again, to Liberal Democrats to lead the only effective opposition.

Let us be absolutely clear today.

Liberal Democrats are not ideological about private finance or public service.

But we are implacably opposed, ideologically opposed, to secrecy, dogmatism or fixing.

We will root it out every time.

We will put a stop to it.

Throwing out the ideology. Putting people first.

Now that’s effective opposition!

Menzies Campbell – 2001 Speech to Liberal Democrat Party Conference

Below is the text of the speech made by Menzies Campbell, the then Party Foreign Affairs spokesman, to the Liberal Democrat Party Conference in Bournemouth on 26 September 2001.

With the exception of some ritual skirmishing over the single currency, Foreign Affairs were noticeably absent from the general election campaign of 2001.

Foreign Affairs hardly seemed to register in the collective mind of the British electorate.

But as the events of two weeks ago show, there is no other area where policy is more influenced by external events over which we have no control, than the conduct of our relations with other countries and institutions.

It has become trite to claim that “the world will never be the same again” or that we have reached a “defining moment” or that we have reached a “watershed”.

We do not know any of these things are true.

But what is true is that before the 11th of September there were and still remain foreign policy issues which are urgent and acute;

Such as our military commitments in the Balkans and Sierra Leone;

The proper British response to American proposals for ballistic missile defence;

Or the impact of the slowdown in the Japanese economy on the inward investment upon which 65,000 jobs in the United Kingdom depend;

Or the political and economic consequences of remaining outside the single currency.

We have not suspended all political activity in the United Kingdom since 11th September but I sense that the electorate has little stomach for the partisan political exchanges which normally characterise the party conference season – and that least of all in Foreign Affairs.

So, let me today adopt a more reflective tone and try to set out a purely Liberal Democrat view of Foreign Affairs – leaving others to conclude how and to what extent that view conflicts with the policies of the other parties.

Our aim must be to offer a clear, constructive and credible foreign policy in which, by means of effective international and regional organisations, we can help to promote prosperity, peace and freedom, combat poverty and disease, and tackle global environmental problems.

Our natural inclination is towards internationalism – celebrating diversity, recognising that state borders provide no defence to environmental threats – accepting that the desperation of asylum seekers knows no boundaries – always holding to an unwavering commitment to the universality of human rights.

Freedom should not be the prerogative of the well governed, the well off, or the well connected.

A Liberal Democrat view embraces freedom from want and disease, freedom from oppression and fear, freedom of assembly and expression.

In short – a foreign policy with an ethical dimension.

But neither we nor any other country will fashion a foreign policy which meets these objectives unless by multilateral action; by acknowledging our dependence and by supporting international institutions; by collective and not unilateral action.

If the events of the last two weeks have taught us anything it is surely that no nation however powerful can hope to defend its citizens or seek redress on their behalf unless it acts in concert with those of like mind.

However much a sense of national pride may seduce us to believe we have the ability to stand alone, the truth is that our survival depends on our allies and our alliances.

It is no accident that in seeking legitimacy for prospective military action, the USA was compelled to seek the support of the United Nations, of NATO and of the EU.

It is no surprise that in order to maintain the coalition of support it has gone outside even of these institutions to try to forge an alliance of those who will look neutrally, at least, on a military response.

In renouncing unilateralism the USA has been compelled to cede to allies old, new and improbable, a measure of influence over its own decision-making.

When we argue as we have for a military response based on clear intelligence, precise and proportionate to the need, and consistent with the principles of international law this is not an over-cautious response, as it is crudely characterised by some, it is no more than the cement necessary to keep together the newly constructed coalition.

Abandon these principles and the coalition will be impossible to maintain.

Such ad hoc coalition may be a matter for congratulation, even astonishment, but it is no substitute for the permanent coalition of interests which a reformed, effective and fully funded United Nations would provide.

The mechanism for crisis management needs to be in place before the crisis erupts.

The United Nations will only fulfil these aspirations when it commands the unqualified support of all the nations, no matter how powerful.

A system of international justice will only be effective if all nations no matter how powerful accept the universal jurisdiction of an International Criminal Court.

And if we put our trust in a reformed and revitalised United Nations we must here also assert our belief in the web of mutually reinforcing treaties for arms control and disarmament which have maintained the strategic balance.

We are not signatories to the Anti-Ballistic Missile Treaty, but we have been its beneficiaries and we have a legitimate interest in the stability it brings and the consequences of its abrogation.

We are entitled to call upon the declared nuclear powers to fulfil their obligations under the nuclear non-proliferation treaty.

We support the Comprehensive Test Ban Treaty – we want all nuclear powers to do so too.

Landmines and biological weapons verification, measures to control the global trade in small arms and the Kyoto protocol – how shall we make a success of these unless we approach them from a collective and not a unilateralist standpoint?

Today is the 15th day after the events in Washington and New York, but it is also the 30th day of NATO’s operation to collect up weapons in Macedonia – a collective successful action in which the United Kingdom has played a prominent and leading part.

But if we are to go on playing such a role – if we are to go on being a force for good – if we are to assert and implement the right of humanitarian intervention where there are systematic breaches of human rights, I simply do not believe that we can do all this on the existing defence budget.

I lost the argument inside our party for a commitment to increase defence spending in our budget proposals for the general election.

But I was in good company.

So did Iain Duncan Smith and Geoff Hoon.

No UK political party campaigned in the General Election on the footing of increasing defence spending.

And yet every party wants the armed forces to do more, to be better equipped, better manned, to make a better contribution to our foreign policy objectives – just plain better.

It can’t be done without better resources.

The Labour Government’s Strategic Defence Review was supposed to provide conceptual stability for defence policy and it largely succeeded.

But without adequate resources to match its objectives we shall be driven to a further review before long.

We shall find it difficult to deal with turbulence abroad if the armed forces are facing financial turbulence at home.

And finally let me turn to Europe.

A party of reform in Britain has to be a party of reform in Europe.

Better scrutiny, better control of expenditure, less waste, less bureaucracy, more subsidiarity, more transparency.

Our commitment to Europe will not survive sceptical challenge unless it is accompanied by frank acknowledgement of Europe’s weaknesses and credible proposals to put them right.

But let us acknowledge the burgeoning foreign policy influence of the European Union.

In its achievements as a partner with Nato in Macedonia and its mature political response to President Bush, it is coming of age in foreign affairs.

These last two weeks have been a curious time in foreign affairs.

So much of what seemed certain has been disproved.

So much of what we took for granted has been destroyed.

In uncertain times a political party confronts challenges by rigorous adherence to its principles.

Be in no doubt, our principles and our resolve will be tested as never before.