Chuka Umunna – 2016 Speech on Gangs and Serious Youth Violence

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Below is the text of the speech made by Chuka Umunna in the House of Commons on 3 March 2016.

Mr Chuka Umunna (Streatham) (Lab): I beg to move,

That this House calls on the Government to establish an independent, all-party commission, involving a wide-ranging consultation, to identify the root causes, effect of, and solutions to, serious youth violence, including knife crime, its links to gang culture and the sale of illegal drugs.

At the outset, I wish to say how grateful I am to the Backbench Business Committee for granting this important debate, and I am also grateful to the 19 other Members of the House who supported this application. In particular, I have worked with my hon. Friends the Members for Lewisham, Deptford (Vicky Foxcroft) and for Westminster North (Ms Buck), my right hon. Friend the Member for Tottenham (Mr Lammy) and my hon. Friend the Member for Croydon North (Mr Reed), among others, for several years on these issues.

The issues that we are discussing today are difficult. There is no single cause for the violence that we have seen, nor one single solution. What we are seeing on the streets of our country is leading to a senseless loss of lives. That perhaps explains why the digital debate organised on Twitter ahead of this debate by the House of Commons digital team was the House of Commons most successful such debate in terms of the number of Twitter accounts reached—more than 8 million. The hashtag for today’s debate is #stopyouthviolence. I recommend that anyone watching this debate uses it.

At the outset, it is important to acknowledge that our young people are among the very best in the world. Their creativity knows no bounds; their energy is infectious; and they put the great in Great Britain. They give us confidence that our future will be even better than our glorious past.

It is also important to note that the violence that we are talking about is committed by a minority—a significant minority—of young people. We should not draw the conclusion that all of Britain’s youth are engaged in serious youth violence. I say that because, too often, the youth of our country are demonised. They are demonised in our national media, and I do not want us to add to that today. It is important in this debate to recognise how wonderful our young people are and to celebrate them. It is because we care so much for them and because we do not want to see their talent and their futures wasted that we are holding this debate today.

In 2007, the violence in different communities—in urban city centres in particular—across our country was put into sharp relief by the shooting, in broad daylight, of a young man, Andre Smartt-Ford, at Streatham ice rink in my constituency. To this day, no one has been charged with Andre’s murder, but his mother continues to fight for justice and is now working through the JAGS Foundation to prevent other families from going through the same thing. Tracey Ford has voiced her strong support for this debate today. She is joined by many other parents, such as Richard Taylor, who also lost his young son, Damilola Taylor, to this violence. He set up the Damilola Taylor Trust, which established the Spirit of London Awards to celebrate our young people.

Representatives from SOLA are here today. We pay tribute to all those parents and to those who are working to better the lives of our young people.

What followed from Andre’s death in 2007 was a catalogue of tragedy, with 29 teenagers losing their lives in London alone in 2008. The number of fatalities has abated since that time, but, let us face it, the problem has never gone away. Following falls between 2009 and 2012, we have seen the number of serious youth violence offences in London increase by 13.4% and the number of offences the Metropolitan police tags with its gang violence indicator measure increasing by more than 25% since 2012. Much of this goes unreported. Members can go to any A&E in the kind of communities that I am talking about, and they will hear about all sorts of things that are not reported and that do not feature in the figures.

According to Citizens Report, which is a not-for-profit organisation that collects local data on this issue, 17 teenagers lost their lives to this violence last year, which is up from 11 in 2014. Just two weeks ago, I was notified by police of gunshots being fired on a Friday in a location in the north of my constituency. On the Saturday after, there was a multiple stabbing of a young man in the south of my constituency, and then on the Sunday, just outside my constituency, there was a drive-by shooting. On Monday this week at 5.30 in the afternoon, a teenager was stabbed in the north of my borough, in Oval, after a fight at a chicken shop, and so it goes on.

Catherine West (Hornsey and Wood Green) (Lab): I congratulate my hon. Friend on securing this important debate. I am so pleased we have been granted three hours to debate a crucial issue not just for young Londoners, but for all communities. Does he agree that there are far too many firearms in circulation in London, and that previously, where a fist or, dare I say it, a knife might have been used, now a very large gun and increasingly sophisticated firearms are being used in these terrible crimes, and that makes the situation even more difficult to manage?

Mr Umunna: I entirely agree. When I was a trustee of a youth charity in Brixton called the 409 Project, I wrote an article in 2007 about the availability of guns and knives, and I did a kind of focus group with some of the young people in our area. What shocked me was the level of detail that some of our young people in Lambeth were able to give me about a gun—they could tell me how many bullets a MAC-10 could spray in a second or in a minute. My hon. Friend is right to raise that issue, and she is right to say that this is not just a London problem. The situation is serious and it is getting worse. It is not confined to London. Last Sunday a teenager was stabbed in Bristol. We hear of this happening all over the UK.

Marcus Fysh (Yeovil) (Con): In my constituency I have recently seen the impact of large-city drug crime moving into the regional towns, and I am very concerned to make sure that Avon and Somerset police devote enough resources away from the big cities such as Bristol to be able to combat that. I do not want see that deteriorate into violent crime which, thankfully, we have not yet seen, but what the hon. Gentleman is saying about the increase in London and Bristol is a worry.

Mr Umunna: I am grateful to the hon. Gentleman for his intervention, which highlights the suite of issues, including the drug trade, which hang heavy over this debate and will come through as our dialogue progresses.

I want to say something about the title of this debate. I put in for it using the word “gang” deliberately, because we need to talk about the use of this term. We often refer to youth violence and gang or gang-related violence, but it is pertinent for us to question whether we should use the word “gang” at all, in spite of the title of the debate.

Ian Joseph of Middlesex University, who is watching this debate from the Strangers Gallery, has done some very interesting work in this area. He argues that the official definition of a gang distorts the focus of interventions and promotes an understanding of everyday behaviour that does little to permanently avert young people from the real causes of violence. He argues that to be effective, interventions must give greater account of how cultural norms and social processes impact on young people’s friendships and the local neighbourhood-based relationships that they have.

This is backed up by others. The Centre for Criminal Justice Studies has also questioned whether we should be using that term. I wonder whether, by using the term and labelling young people as gang members, we reinforce the notion that they are gangsters. What is a gangster? I wonder how helpful it is for us to use the term. Let us face the fact that using the term enables officialdom to put all these young people in a bracket—“Oh, they’re part of a gang. If they lose their lives, oh well, that doesn’t matter. They’re part of a gang.” I am not sure we should allow this to carry on.

Paul Flynn (Newport West) (Lab): I regret interrupting the fine speech that is being made. Is my hon. Friend familiar with the work of Harriet Sergeant, a rare journalist who has gone to great trouble to engage with members of this underclass? Perhaps “gang” is the wrong word. From reading her books and articles on the matter, one comes away with a profound feeling of regret at the gulf of misunderstanding between official bodies and those who are part of that underclass, and great sympathy for the problems involved and the depth of suffering of those gangs who, in my view and her view, have been badly neglected.

Mr Umunna: I am grateful to my hon. Friend for referring to Harriet Sergeant’s work. Hopefully, those using the hashtag for this debate can post a link on Twitter so that those watching can read more of her work.

Part of the reason why I am not sure how helpful it is to use the word “gang” any more is that things have changed a lot just in the borough I represent in London. Around the time I was first elected, in 2010, we had mass groups of young people who had labels for their groupings. Now the situation is more parochial: things are often confined more to a particular estate, and we have much smaller groups of young people. The situation is also far more fluid.

Whitney Iles, the chief executive officer of Project 507 —she, too, is watching the debate in the House—works to prevent young people from engaging in this kind of violence. She put things really well when she told me that we give young people this gang label, but we never give them a way to get rid of it. So let us consign it to the bin, and let us not refer to it again in the House after this debate, if we can possibly avoid doing so.

The reasons for serious youth violence are not new, and we know what so many of them are. Yes, some violence is carried out by young people from dysfunctional, often chaotic families with a history of, say, domestic violence in the background. However, very often, a lot of young people who get wrapped up in these things come from quite stable families. Sometimes there is an issue because two parents are struggling to make ends meet and holding down two jobs to pay the bills. There is a link there because, as I heard from some young people this morning, someone will often have a desire to help provide for their family—for their mum—and they get wrapped up in these activities as a way of making money to help mum pay the bills.

I really do not care if the usual suspects in the media start saying, “Oh, you’re excusing all this.” We are not providing excuses today, but unless we look at why these things happen, we will not be able to prevent them. I can see the headlines: “MP says children are trying to pay the bills so they go and knife people”. That is not what I am saying; what I am saying is that we must understand the underlying causes if we want to prevent this violence from happening again.

Bob Stewart (Beckenham) (Con): I thank the hon. Gentleman for making a very good speech. Is not fear the real reason why people join these groups? A young person who lives on an estate in an area where these groups operate and who is not a member of any group will be fearful that a group will set upon them and do them great damage. In my limited understanding of this problem, it seems that fear is the spur for young people joining such groups.

Mr Umunna: The hon. Gentleman makes a very important intervention. I agree with him: fear is definitely a major factor, and I will come to it shortly. Trauma also plays a role, and I will come to that too.

There is another common theme, which I have talked about with my right hon. Friend the Member for Tottenham and my hon. Friend the Member for Westminster North. Time and again, at every community meeting on this issue, we hear that there are simply not enough things for our young people to do. I get fed up of hearing that every week and every time we discuss this issue in the House, because nothing ever seems to get done about it. We have to ensure that there are more meaningful things for our young people to do outside school hours, and I am not talking about some windy church hall with a table tennis table. We need decent, proper activities that will expand our young people’s horizons and give them things they will enjoy doing in their local areas. Otherwise, we have the problem of collectives of their peers becoming their surrogate family. That relates to the issue that the hon. Member for Beckenham (Bob Stewart) talked about, but I will come on to that in a moment because I want to go through some of the other factors.

In relation to popular culture, it is too easy to blame rap music or whatever, but it is a society thing. We live in a society that promotes and glamorises violence. It is too easy to say that it is the fault of the creative industries. We increasingly have a society where our young people are encouraged to engage in these kinds of violent activities. This is promoted among us and we have to deal with it.

We live in a society that not only promotes violence and too often glamorises it, but promotes an ideal whereby our young people define themselves by reference to what they have as opposed to who they are. There is a consumerism element. Helping one’s family to get on is definitely an issue.

Matthew Pennycook (Greenwich and Woolwich) (Lab): Will my hon. Friend acknowledge that this is about not just young people providing for their family but about their desire to have things, and the role of criminal gangs in offering them a quick buck, so that they are able to earn money to buy things, which because of their low income they are otherwise unable to have?

Mr Umunna: There are so many big elephants in this room of issues, but one is poverty and deprivation. We cannot ignore the part that that plays. My hon. Friend is right to raise that issue. Young people who do not have anything are often robbing from other young people who do not have anything, then there is revenge, and we end up with a cycle of violence. That is definitely part of what we see happening.

Part of the reason that too many of our young people do not have enough money is the unemployment rates among them. Our education system is producing a whole generation who do not always have the skills that our employers need, particularly the technical and vocational skills. Let us face it, this has happened under Governments of all persuasions. I do not see this as a party political issue; I am not interested in scoring any points. We have to deal with the problems in a skills eco-system that is not giving our young people the skills that they need to offer employers to get a job. Let us not forget that hanging over this is the fact that youth unemployment is double the main rate.

The things I have spoken about are fairly obvious—the more talked-about factors—but we need to delve far deeper into the causes than we generally have. The hon. Member for Beckenham referred to the belief of many young people that they are safer in a group than they are on their own. As academics have argued, the perceived need for safety and protection tends to validate behaviour and levels of violence in ways that can obscure the boundary between right and wrong. There is also the issue of being bullied and how that interrelates with carrying or using a weapon. We do not like to talk about that, but we should. There is a semi-formal, often unsupervised daily routine outside school, but sometimes inside school too, that can incubate the production of behaviour and values that lead to a life of this kind of violence, and the expected norms of school and wider mainstream society are juxtaposed against that.

In addition to the fear that the hon. Gentleman talked about, the other big issue is trauma—the sheer trauma that many of our young people experience in their daily lives, which requires much greater consideration than we see reported in our media.

To return to the work of Whitney Iles, this issue needs to be seen as one not just of violence prevention, but of health, particularly mental health. Our young people are being traumatised by some of their experiences, but they are being given no support to deal with it. Unless we start engaging with them, not only on the obvious level, but at a deeper level, we will not be able to resolve the violence on our streets.

What should be done? First, the Labour Government introduced Every Child Matters, which had a strategic aim to provide wraparound care for young people from long before they went to school to long after they left. That did bring in teenagers, but I think we need to adopt an “every teenager matters” approach, with much more targeted schemes and versions of the previous initiative, in order to address problems experienced by teenagers. It must be said, however, that, as my right hon. Friend the Member for Tottenham has said, the problems are impacting on younger and younger children, not just teenagers.

Secondly, we have to elevate the standing of youth work in our country. It is about time that we put it on the same pedestal as teaching. Often, youth workers spend as much time as teachers with our young people, but we do not talk about their profession in the same way. We have to do so and put it on a pedestal; we cannot just look at it as an add-on. Too often, youth work is left to people who have other jobs and who may, through their tenants or residents association, be providing youth work on top of their daily job. It needs proper funding so that people can do youth work full time and so that we regard our youth workers in the same way as we regard our teachers.

Thirdly, I really do think that the Government have done some good things, and that is why I want them to reverse their decision to disband the very important ending gang violence and exploitation peer review network, which spreads best practice to local authorities and others. It is due to end in April—next month—but I really hope the Government will reverse that decision, because it is a good network and I have heard very good feedback about it from all over the country, including Lambeth. I want it to continue.

Fourthly, we have to ensure that our young people are properly taught in school about the consequences of what they do, and that they are provided with support to deal with their experiences outside school as well. I want to see more role models who have been members of groups and who have been victims, or even perpetrators, of acts of violence and suffered the consequences. I want more of them to go into schools and tell their story so that future generations do not take the same wrong turn as they did. There is nothing like having somebody who has lived that life telling young people what will happen if they carry on down that avenue. We need to provide much more support to our schools.

This is controversial, but I do not care and am going to say it anyway: a lot of the young people who get wrapped up in all this ultimately have quite commercial and entrepreneurial instincts. Their energy, however, is simply not channelled in the right way and the result is that they turn to criminality and highly illegitimate, terrible ways of doing things. If many of our young people received enterprise teaching in our schools, and if they were provided with inspiration and more access to opportunities to set up their own business, do their own thing and work for themselves in a way that delivers the goods and some money, perhaps we would be able to stop them taking a wrong turn. I can just see the write-ups saying, “MP says terrible gangsters should start businesses”, but, frankly, I do not care. If they have that kind of instinct, I want to make sure that they do not end up taking a wrong turn and doing illegitimate business, but that they set up a business and become the next Branson. I would like to see many of the kids from the Tulse Hill estate in my constituency going on to be the next Richard Branson.

Ms Karen Buck (Westminster North) (Lab): My hon. Friend is making a very important point. Does he agree that the Evening Standard should be congratulated on its campaign? He is recommending precisely the sort of work that it has been doing in support of people turning away from gang violence. It is turning young people’s skills and expertise towards business and entrepreneurship, and ensuring that they are able to make something of their lives.

Mr Umunna: I completely agree with my hon. Friend. The Evening Standard has done excellent work in its “Frontline London” campaign, which it has plastered on the front page frequently. I would like to see other publications and media outlets following its example.

None of us is excusing wrongdoing; none of us is excusing the violence that we see; and none of us would argue that for people who commit such offences, there should not be sanctions. Of course there should be sanctions. I suppose the point that everybody will make today is that, if we can prevent people from doing such things in the first place, we will not have to apply those sanctions. Too often, the debate is about clamping down, zero tolerance and banging people up. It is harder to focus on how we prevent them from doing those things in the first place.

That is, ultimately, why I would like the Government to set up an independent cross-party commission on these issues, involving a wide-ranging consultation that, importantly, includes young people. Too often, we talk about young people but they are not at the table when we do so. I would like the commission to identify the root causes and effects of, and the solutions to, youth violence so that we do not see more death on our streets.

To wrap up, I think we should be absolutely honest, up-front and frank about the fact that, if we were talking predominantly about middle-class children from comfortable, middle-income families and wealthy neighbourhoods, the issue would be much higher up the national agenda. The murder of young people by other young people who fit that middle-income demographic profile would command many more column inches. It is a disgrace and a damning indictment of our society that, increasingly, it is becoming immune to what is happening on our doorsteps. Our society is ignoring the issue, putting a whole generation of young people into a corner and saying, “That is what happens with those kinds of young people from those kinds of areas.” I want to make it very clear in this debate that the House of Commons recognises that no matter what their background—whether they grow up on an estate or in a comfortable neighbourhood—every single young life matters. We will not stand by while violence and fatalities continue to hit the next generation, because it is our future.

Chuka Umunna – 2013 Speech to Labour Party Conference

Below is the text of the speech made by Chuka Umunna, the Shadow Secretary of State for Business, Innovation and Skills, to the 2013 Labour Party conference in Brighton.

Conference, as I’ve travelled round the country, visiting our town centres, talking to our local businesses, I’ve seen what you and I know to be true: many people – too many – are losing faith in politics.

Perhaps it is not surprising: costs are rising, wages are falling, yet the Government doesn’t seem to care.

And it couldn’t come at a worse time.

Our world has never before experienced so much unpredictable change:

Population shifts;

Climate change;

Huge advances in technology;

Growing competition from emerging economies;

Leading to increased insecurity at work.

These are big issues and big economic forces.

And they are already having a massive effect.

For every single one of us, they are going to completely transform what our life looks like every day.

It’s why we need politics. A politics back in touch with working families.

Because as people;

As businesses;

As an economy – and as one country – we’ve got a decision to make.

Will we just allow the future to happen?

Let these forces run riot, and let opportunities vanish?

Or will we stand together as one United Kingdom – including Scotland – to shape these forces of change, to build the future we want for our children, our families, our communities?

We joined this party because we believe that together we can shape the future. We can empower people to meet their aspirations and dreams:

Thriving businesses providing decent jobs;

A more secure life for people and their families;

Shared opportunities and shared prosperity.

If we want that future then we – this Labour Party – have got to win in 2015.

Because we know it matters who is in government.

Because we know what is happening right now: a government led by David Cameron that brings discord where there was harmony;

Doubt where there was faith;

And above all despair where once there was hope.

And we’ve got less than twenty months to show it’s only us – this Labour Party – that can deliver a better future.

We’ve done it before, and we will do it again.

Think of what we inherited in ‘97:

Overflowing classrooms;

University for the lucky few;

Mass youth unemployment;

Few apprenticeships to speak of;

Some people earning as little as £1 an hour;

Little support for entrepreneurs or local economies.

A legacy left by a Tory Government that taught David Cameron and George Osborne everything they know.

That was why I joined our Party in 1997.

Because we had a better vision and we rose to the challenge of a changing world.

We set the country on a new and better track:

Millions of young people with a better education;

Record numbers going to university;

Apprenticeships quadrupled;

More than a million new businesses created;

The New Deal;

A first-ever national minimum wage.

That is our legacy and we are proud of it. And then came the global financial crash caused by irresponsible behaviour in the banking sector.

Jobs and incomes fell, causing tax receipts to plummet.

That’s what caused the deficit to increase not public investment in our schools and hospitals.

And because of the crash the world was suddenly a very different place.

Our response to the crash – what Alistair and Gordon did – stopped many repossessions and saved many, many jobs.

We are proud of that too. Of course we should have better regulated the banks.

But we learn from these things – we become better – and we adapt to the changing world around us.

And that’s the real problem with Cameron and Osborne.

It’s not because they’re Tory – I mean – it’s not ideal – but I can live with that.

The problem is that they are wrong.

The worst economic recovery in history;

University tuition fees trebled;

Young people starting an apprenticeship down.

Youth unemployment up.

Small businesses struggling.

Prices rising faster than incomes.

Due to their failed plan.

You see – they never learn: stuck with old methods which didn’t even work in the old world.

They’re certainly not working now.

Their ‘me, myself and I’ philosophy will let the global forces of change wreak havoc on our country and our communities.

They’re out of touch.

They have the wrong philosophy for the future.

They have the wrong policies for the future.

And we know growth for the few at the expense of the many is no growth at all.

With their approach any old job at any low wage will do.

But that doesn’t do enough to improve people’s lives.

It means many are working harder than ever for less money.

Being sucked into a downwards spiral of job insecurity, zero-hour contracts, payday loans.

A life of worry and stress.

Ed Miliband wants better.

The Labour Party wants better.

The country deserves better.

Our belief is that through progressive politics, cooperation;

Through people, trade unions, companies and countries working together we can harness these global forces to work for everyone.

Here are just three things a Miliband Government will do:

First – we must invest in the skills and industries of the future.

Let’s never forget: a high-skill workforce is a secure workforce.

We can’t compete with China and India on pay. It’s bad economics and it’s bad social policy.

But we can compete on quality if we have the right skills.

That means we maintain our world class universities: important drivers of innovation, but – as Ed said last year – we must improve vocational skills too.

We will increase apprenticeship numbers but not – as this Government has done – at the expense of quality.

So we will change the system so all apprenticeships are Level three qualifications and last a minimum of two years as our Skills Taskforce recommends.

Quality apprenticeships for quality jobs.

Second we will take action to promote good and sustainable businesses that value their people and invest for the long term.

I believe society and business depend on each other – we rise and fall together.

And that’s why Ed Balls and I asked Mike Wright of Jaguar Land Rover – a real British success story – to lead a review of manufacturing supply chains in the UK.

Society working with business for the common good.

In that spirit we want people to value their work and we want companies to value their people.

That’s why we will act to outlaw zero hours contracts where they exploit people.

And it’s why if this government won’t launch a full inquiry into the disgraceful blacklisting in the construction industry, we will.

Third, we believe in a fair day’s pay for a fair day’s work – that’s why we introduced the minimum wage.

But there have been too many who think that paying the minimum is a choice not a responsibility.

So – we will toughen the regime.

If you don’t pay you’ll pay for it.

We will increase the fine.

We will give Local Authorities the power, alongside HMRC, to enforce the law.

Bad business practices have no business in a One Nation economy.

And of course we will go beyond the National Minimum Wage – towards a real living wage.

Three principles: good skills; good business, and good jobs.

The Labour Party’s values in action;

Optimistic about what we can achieve together.

Ambitious for the future.

Before I finish, let me say this: friends have no doubt, over the next twenty months we are facing a Tory party that will launch the most personal, negative, aggressive campaign we have seen in a generation.

We know we have to win in 2015.

But we won’t win by descending to their level.

That’s not how we do things in Ed Miliband’s Labour Party.

We will beat them with hope and optimism for what our country can be.

Because we know politics is important.

Because we have a better vision for our future.

So from now until 2015 we will work every month, every week and every day to give people all over the country:

The faith in politics;

The faith in the Labour Party;

The faith in this country;

To make the right decision for our future: a One Nation Labour government.

Thank you.

Chuka Umunna – 2012 Speech to Labour Party Conference

Below is the text of the speech made by Chuka Umunna, the Shadow Secretary of State for Business, Innovation and Skills, to the 2012 Labour Party conference.

Conference, my late father arrived in this country in the mid-1960s from Nigeria. It was the Labour Party that insisted he – and others like him – should be able to pursue their aspirations and dreams free from prejudice.

My mother, who comes from an altogether different background, benefited from the right to equal pay at work after she graduated in the 1970s, again, thanks to this Labour Party.

You see, this party has given me, my family – all of our families – so much. That is why we all join the Labour Party – to put something back.

And I never forget that those who founded our party in every sense of these words: built Britain.

They built the mills, the factories, the railways and the roads.

They built our hospitals, our homes and our schools.

They made our success as a country possible.

That is why we – Labour – have always insisted that those who put in the hard work should be able to share in the fruits of our success.

It is why we – Labour – have always insisted people should have the right to fair and decent treatment at work.

Fair opportunity, shared responsibility, wealth creation for the good of all – it’s in our DNA.

So, more than a million new businesses created during our 13 years in government.

And when we left office:

–    rated 4th in the world for ease of doing business;

–    the lowest barriers to entrepreneurship in the OECD.

That is a record to be proud of.

And I follow in the footsteps of John Denham – big shoes to fill. Thank you, John, for all the advice and support you have given me.

I want to pay tribute too to our fantastic Shadow Business team for all their hard work:

–    listening to business up and down the country;

–    setting the agenda;

–    exposing the failings of the Tory-led Government.

When this Government took over in May 2010, they embarked on an irresponsible experiment with people’s livelihoods.

If you took a risk, set up your own business, they pulled the rug from under you, with confidence nose-diving as a result of their spending review.

Fifty businesses a day are going bust under this government – dreams crushed, boarded up.

And because it is our businesses which create jobs, it is little wonder that as firms have gone under unemployment has soared beyond 2.5 million people.

In my constituency, long term youth unemployment has more than tripled in the last year.

That is the price of their failed experiment.

And let us be clear: David Cameron, Nick Clegg, George Osborne, and Vince Cable.

You are all in this together.

Co-authors of a failed economic plan. The longest double dip recession since the War.

It is not like they have not been warned by Ed Balls and Rachel Reeves.

But they refuse to listen.

Directionless and divided, we have seen chaos heaped upon confusion.

Delays in delivery summed up by their flagship Regional Growth Fund.

The uncertainty they have caused is holding back investment – from defence to renewables, higher education to energy.

Our business leaders and our trade unions are united in telling them we need a proper plan for growth. But out-of-touch Ministers rubbish them and accuse them of being whingers.

It’s the same old Tories playing the same old tunes:

–    they insult the British people by claiming the economy is being held back by your rights at work;

–    they say working people are lazy;

–    business leaders aren’t doing enough;

–    and those just doing their jobs are plebs.

Everyone is to blame but them.

And, as ever, what is their great solution? A large dose of rampant free market liberalism – deregulate everything, stand aside, and let the market rip.

But if we learned anything from the 2008/09 crash, it is that that approach is wrong.

It won’t solve the problems in our economy, and it won’t address the challenges we face.

Under successive governments growth became concentrated in too few sectors, and in too few regions.

Though productivity rapidly rose during our period in office, rewards were not evenly spread.

And under Labour, strong growth meant employment reached record levels. But still too many people remained distant from the job market, or in insecure employment.

We are determined to learn from this.

Meanwhile, technology is transforming our world and opening up new markets to our businesses.

The rise of those new markets around the world is increasing competition, but it is creating new opportunities on a breathtaking scale too.

We have got to respond to the new landscape and ensure that everyone benefits.

Yes, markets have been the greatest engines of innovation and prosperity the world has ever known.

But we know that, left to their own devices, markets cannot meet these challenges. But nor can governments.

This Government seeks to divide our society – public from private, trade union member from non trade union member, the many from the few.

But here’s the thing. Everyone has a contribution to make to the next chapter of our national story:

–    active government;

–    businesses and entrepreneurs;

–    our trade unions;

–    assertive consumers;

–    our universities and our colleges;

–    our cities, towns and our regions.

All working together in partnership to create wealth and build a better future.

That is why we have been arguing for an active industrial strategy – it is at the heart of the more responsible capitalism Ed Miliband talks about.

We need it to fashion a new economy:

–    An economy competing on quality, creating good jobs – not an insecure economy, competing mostly on low wages;

–    An economy that rewards those that work hard and create sustainable value – not those just out to make a fast buck;

–    An economy offering the opportunities and training not just for young people who want to work in banking, media or law, but also prestigious vocational routes for those eager to become engineers, digital programmers, or advanced manufacturers.

Conference, once more, we must rebuild Britain:

–    Backing British business with a modern industrial strategy, as governments all around the world back their own;

–    Buying from British business, as governments across Europe and around the world buy from their own;

–    Investing in business with a proper British Investment Bank, like every other country in the G8.

This will mean being willing to challenge the way that government itself works with business.

That is why I have asked Lord Adonis to lead a team of business leaders and former Ministers to produce a blueprint to transform the Business Department into the most effective department for enterprise in the world.

Conference, week in week out, I meet businesses and listen to their concerns.

They don’t tell me they want us to step aside.

They tell me they want us to step up, to help them grow and prosper.

We are the only party in this country able to do this because each of us believes that we stand and fall together.

We believe that by the strength of our common endeavour – with our families, our communities, our businesses and our trade unions – we achieve more together than we achieve alone.

That is what our Party is about.

That is what we do.

By continuing to win back the support of the British people, in line with this Party’s great traditions, we will rebuild Britain once more.

Thank you.

Chuka Umunna – 2012 Speech to UCATT Conference

Below is the text of the speech made by Chuka Umunna to the UCATT Conference in Scarborough, Yorkshire, on 28th May 2012.

Conference, thank you so very much for inviting me here to speak to you today.

Before I begin my remarks, let me say thank you to each and every one of you for the support this union gave me in the lead up to the 2010 General Election – I would not be standing here as a Member of Parliament, let alone the Shadow Business Secretary, without yours and others’ help.

I pay tribute to the stewardship of your acting General Secretary, George Guy, and now your General Secretary, Steve Murphy, for guiding UCATT towards a bright future. And I must also pay a huge tribute to the contribution made over many years by your President, John Thompson.

And let me also say how proud I am to be able to say that this Union is headquartered in the centre of the universe which is my constituency.

For this is a union whose forebears, dating back to the British Industrial Revolution, in every sense of these words, built Britain.

They built the mills and the factories, the canals and the railways, the highways and the byways.

They built the houses the British people have lived in and much more besides.

And, given the hazards of the trade, let us not forget the thousands of construction workers who lost their lives in so doing. Construction today might be safer than before, but it is still one of the most dangerous occupations.

Carrying on your proud tradition, and in spite of the dangers, members of this union continue to build the homes we live in, the offices and plants we work in, the infrastructure we need, and the public spaces we share.

I was at the Olympic Park just last week, and what an incredible achievement that is. It is a true testament to our construction workers: built on time, built on budget, and without a single death. Or look at the example of Terminal 5 at Heathrow: built on time, built on budget, and safely with a directly employed workforce. Client, contractor and trade union working productively together in the interests of us all.

You provide the physical foundations upon which our growth, our prosperity, our success, is built. As a country, as a society, as a people – we owe a debt of gratitude to you.

So make no mistake: I wear my association with this union as a badge of honour.

And let me be clear: in our Party – from our Leader, Ed Miliband, to our local Labour Party members here in Scarborough – we all wear our links to the trade union movement with pride. We may not always agree. But we are all part of the same family.

My late father arrived in this country after a very long journey on a boat from Nigeria in the mid 1960s. He was terribly sea sick for most of it, and afraid because he couldn’t swim. So he was glad when he finally made it in one piece to Liverpool Docks. He came to make his way in the world, get on, find his fortune. But, like every other black person living in the Britain of the 1960s, he faced discrimination.

As a self made man and entrepreneur it surprises people when I say Harold Wilson was his hero. I am not surprised at all. It was the trade union movement, with a Labour Party in Government and a Labour Prime Minister, that led the charge for the equalities legislation which was enacted in the 60s and 70s. It was you who insisted employers be legally obliged to afford my father the same treatment as others.

Of course, he wasn’t the only one who benefitted. My Mum, my sister and my aunties – all the female members of all our families: they benefitted too from the right to equal pay, maternity rights and the other social reforms we, working together, introduced over the years.

So we have all seen what a Labour Party – working with and as part of a wider labour movement – can do for the hard working majority in this country.

Our duty as a movement – in the interests of all, to build that better Britain – is immensely important. To protect hard working people, the mainstream majority. It goes to the very essence of what we are all about.

You understand that more than most, in the risks you take doing your jobs. Hundreds of people have died on site over the last decade, thousands have been injured or developed work-related health problems, so UCATT’s voice is vital in making construction sites safer and better.

The overwhelming majority of businesses understand the importance of health and safety. I visited the Siemens’ factory in Newcastle the other week that builds huge wind turbines. They left me in no doubt how seriously they take their responsibilities. Regrettably others do not. You see, it is easy for the Tories and people on the right condemn health and safety regulations. But it is not their lives at risk.

This duty to protect extends far beyond health and safety. We are seeing a sustained attack on the rights of people at work from this Government.

They have already made it harder to claim unfair dismissal. They are now considering giving small firms the right to fire you at will. Or – as their consultation document puts it – to dismiss “where no fault was identified on the part of the employee”.

Firing at will is one of the recommendations of the dreadful report on employment law commissioned by the Prime Minister from millionaire Tory donor, Adrian Beecroft. This is a shocking proposal. But it is not the only extreme proposal in his report.

You may remember the tragic deaths of 23 Chinese cockle pickers in Morecambe Bay in 2004. The following year Labour set up the Gang Masters Licensing Authority to prevent the exploitation of workers in the agriculture and shellfish gathering industries. The Authority does incredibly important work – indeed we want to see its scope extended to the construction industry. We were right to set it up. Adrian Beecroft proposes its abolition. He is wrong.

And there is more. In 1994, two Black hotel waitresses were made to serve drinks during a performance by the notorious comedian, Bernard Manning. They were subjected to racially and sexually abusive remarks by Manning and took their employers to a tribunal. They won. No one should have to put up with this kind of abuse at work. Labour legislated to put this protection on a firm footing, and to cover all grounds of unlawful discrimination. Adrian Beecroft says the Government should repeal this law. Again, he is wrong.

I have a question for the Prime Minister: given all this, how on earth can you call the Beecroft document, “a good report” as he did last Wednesday? Ed Miliband was right: we are seeing the true colours of the “nasty party” once more.

Cameron responded by seeking to frame this as a union issue. It just shows how out of touch he and his Government have become. The proposal to fire people at will would affect over 3.5 million employees working in the private sector, the vast majority of whom are not members of a union. If you have millions of pounds in the bank – like those who can afford to have dinner with the Prime Minister – it is unlikely to trouble you.

But this is not an issue of left versus right. It is an issue of right versus wrong. Calling the Beecroft Report “a good report” is wrong.

Sadly, the Prime Minister’s rhetoric does not surprise me. At a time of national crisis, when he could be drawing us together, he has sought to divide and rule. We saw it over the dispute on public sector pensions last year. We saw it during the fuel tanker drivers dispute this year. We saw it at Prime Minster’s Questions last week. Ministers seeking to divide public from private, trade union member from non trade union member – sowing the seeds of division instead of building consensus.

Yet here’s the thing: it is interesting, that when Cabinet Minister Francis Maude was fanning the flames of discord and compromising public safety with his talk of jerry-cans in the garage, it was an ex- fireman and former member of the Fire Brigades Union, Mike Penning, the Transport Minister, who they wheeled out to try and calm the panic they had created.

Their backbenchers are even worse. Government backbenchers sought to mount a direct attack on this and other trade unions, targeting the day-to-day support trade union reps give to staff at work. Labour MPs roundly defeated the Bill and saw off this attack. To his credit, so did one Conservative MP, Robert Halfon.

Robert wrote a pamphlet in March entitled “Stop the Union Bashing”. Much as it pains me, Robert points out in his pamphlet that almost a third of trade union members in this country are thought to be Conservative voters. It is they who the Tories are attacking. The Prime Minister, his Ministers and his backbenchers attacks on you are not only wrong. It is bad politics too.

It is important to protect hard won gains, and it is right to protest against a government attacking the rights of working people. But we must be clear why, in addition to this, people also join trade unions: to get on, to achieve, to provide. The voice of protest is important, especially with this Government at this time. But the voice of progress must be heard as loudly too.

Our trade unions are powerful forces behind our economic success. Each and every one of you – directly and indirectly – are wealth creators for this country. So we have got to get this message through better, to change public perceptions of our movement. It is hard in the face of a hostile media. But try we must.

We must be shouting your success from the rooftops in helping business to succeed, in helping people to get on, to meet their aspirations. Like GM’s recent announcement that it will build a new generation of Astra cars at Ellesmere Port – I went on television to say this was a shining example of trade unions as a force for economic progress for our country, working in partnership with management and the government. Just like the Olympics. Just like Terminal 5.

As we try to forge a different path for Britain’s future – that is better for business and better for working people – we need you to be part of shaping that vision: through your actions, and the good you represent, writing UCATT – and the wider union movement – into the next pages of our national story. That is our ambition, and I want it to be yours.

A trade union of wealth creators; a movement that has and will continue to speak for the hardworking majority in Britain.

Of course, attacking working people distracts from the real reasons why wealth creation has proved so difficult this last two years: the economic incompetence of this Government.

We said if they cut too far and too fast, in blind pursuit of austerity for ideological reasons, they would choke off the recovery.

They were fond of referring to “Labour’s mess” but the facts tell a different story. Following the global financial crash of 2008/9 we took action to prevent a recession becoming a depression. In so doing, the country incurred debts which had to be dealt with. Alistair Darling set us on a course to halve the deficit in 4 years at a speed and pace that the economy could cope with, allowing it to grow.

When we left office in May 2010 the economy was growing, unemployment was falling and the recovery was settling in. Because of growth, the deficit was falling, with borrowing £20 billion lower than forecast in the last year of government.

George Osborne’s Comprehensive Spending Review – based on an ideological fixation with hacking chunks from the public sector and strongly supported by Vince Cable and the Liberal Democrats – precipitated a huge dive in business and consumer confidence.

Slower growth and higher unemployment means that the Government is borrowing £150 billion more than planned to pay for its economic failure. The wrong choices by this Government today – of tax cuts for millionaires and austerity for the rest – are prolonging the pain of a stalled economy, and focusing the burden on those least able to bear it.

Your sector, construction, could be leading the recovery. Instead it is being held back by the lack of demand in the economy and a lack of confidence in the future. Last week we saw that our economy had shrunk by 0.3 per cent in the first 3 months of this year, not 0.2 per cent as previously thought. And the figures showed that your sector – construction – had shrunk by 4.8 per cent on the previous quarter. Plan A has taken our economy back into recession – a recession made in Downing Street.

It is time for Plan B: Labour’s five point plan for jobs and growth. By bringing forward infrastructure investment, such as school buildings, by building 25,000 more affordable homes, cutting VAT on home improvements, by giving a national insurance break to small firms taking on new workers, it would revive the construction industry and get the economy moving again. Through growth as well as fiscal discipline it would bring the nation’s finances back into balance.

With this Government’s incompetence there are big reasons to worry today. But there are also reasons for hope about tomorrow. I am optimistic about our national future. I look at the rise of the fast emerging Southern and Eastern economies and I know we will have to raise our game to compete. But I also know we can.

And I see huge opportunities too. Within the next two decades, the size of the global middle class will almost triple in size to 5 billion people. That’s a whole lot of new demand we can be meeting if we start to prepare our economy now. We need to be clear about where we can compete. We need to develop our people and the other things we need to succeed. And we need to ensure that everyone can be a part of this success. It is what Ed Miliband has talked about: the need for a more responsible and productive capitalism, that is investing for the long term not the fast buck; that is competing on high value not low cost; that views people as assets to be nurtured, not costs to be cut.

Business has responsibilities, but government does too. It is wrong that this Government is prepared to stand by while rogue businesses exploit loopholes in the law to evade justice when their malpractice leads to deaths at work. My parliamentary colleague and proud UCATT member Luciana Berger introduced a Bill to Parliament earlier this year to stop this. When workers are injured or killed at work, employers must be held accountable. They should not be able to get out of an investigation by claiming bankruptcy. The Bill would have stopped this but it didn’t pass. So I give this commitment today: the next Labour Government will act to prevent this abuse. It puts the lives of workers at risk. It is irresponsible. It is wrong. We will stop it.

Let me conclude by saying this: we need to get growth going today, and reform our economy so that it works for all. That must be our priority.

Our economic destinies are all intertwined – so we all have a role to play in shaping our national future.

Our movement is nothing if not confident and ambitious for what we can all achieve working together.

So I look forward to working closely with this union – with its wonderful history with a great future ahead of it – to build Britain once more.

Thank you.

Chuka Umunna – 2012 Speech to Hub Westminster

Below is the text of the speech made by Chuka Umunna, the Shadow Business Secretary, to Hub Westminster on 26th June 2012.

Thank you for that introduction, and thank you for inviting me to speak this evening.

I cannot think of a better group of people to discuss this with than all of you gathered here today: restless people, not satisfied with the world as it is; innovators determined to find new gaps in old markets and to create ideas for new markets.

Our economy and society needs more people like you. More people starting up businesses, building businesses, and – hopefully – succeeding in business. You are engines of growth for an economy that has stalled but a country which has huge potential.

What I intend to do is to first reflect on entrepreneurship, then consider how it can power social mobility, before setting out our ongoing work to help entrepreneurs to set up and grow businesses. What I do not cover in my remarks, I am mo re than happy to pick up on in the Q&A afterwards.

Now, before coming here, some of you may have wondered what on earth is this grandson of a High Court Judge, a private school educated, former City lawyer doing coming here to talk to you about social mobility and entrepreneurship? Well, the legal tradition in my family sits on my mother’s side and I am incredibly proud of it. But it is my late father, a self made man, who makes me so passionate about the transformative power of entrepreneurship.

My father arrived here after a very long journey on a boat from Nigeria in the mid 1960s. When he arrived at Liverpool Docks he had a suitcase and no money. A random stranger lent him the cash to pay for his train fare to London where he was due to take up lodgings with friends.

Once settled in London, he did various jobs. He washed plates in kitchens and he washed limousine cars too. Washing cars was handy because, once he had finished each job, he could sit and study in the warmth and luxury of the limo until its owner arrived to pick it up. He was studying to acquire his business and accountancy qualifications at the time.

Within 15 years he worked his way up from arriving with nothing to running a very successful import and export business doing trade between Europe and West Africa, selling all manner of goods until his death. Sadly, he passed away when I was quite young so I never got to hear the full story from him. But his example continues to inspire me.

My father’s story was particular to him. But in many ways his was an archetypal story common to many immigrant families the length and breadth of Britain. Let us not forget: the Britain of the 1960s – despite the free love, the hippies and the rest – was not the tolerant Britain we live in today. His generation created – through commerce – opportunities that no one else would offer them.

So my family’s story informs my outlook; so too does my London constituency which takes in Streatham and parts of Balham, Brixton, Clapham and Tulse Hill. There I see a vibrant culture of business that must be supported. But it was something more serious that really got me thinking.

I am Chair of the London Gangs Forum which works to reduce gang activity across London. Gang culture has taken hold of a substantial minority of our young people in London. My borough, Lambeth, is one of the most acutely affected areas.

Gangs have been responsible for numerous killings with innocent bystanders being seriously injured in the cross fire between rival groups. The most shocking incident of late was the shooting of 5 year old Thusha Kamaleswaran in her family’s newsagent in Stockwell last year.

Make no mistake: at the heart of these gangs activities are criminality and very serious violence. Each of them lays claim to certain ‘territories’ in Lambeth – in particular in and around our social housing estates. As a community we send a clear message: what the gangs do is completely unacceptable, we will root it out and ensure the strong arm of the law is brought down to bear on the perpetrators. That is exactly what happened with those found responsible for the shooting of Thusha – members of a notorious local gang, who were jailed for life in March.

But if one studies what Lambeth’s gangs do in more detail, it is both shocking and frustrating. They put a lot of effort into building up their gang’s brand. Most are involved with the sale of drugs; but some have branched out into more legitimate activities around fashion and music. You can find music videos they produce to promote their activities on YouTube. BBC Radio 4’s Today programme did a series of reports on this a couple of weeks ago featuring Lambeth’s gangs.

This brand building is alarming because it helps the gangs to be more notorious and glamorises what they do – it is one of the reasons myself and other Labour parliamentary colleagues, Heidi Alexander and Karen Buck in particular, have argued that stronger powers are needed to ensure the gangs’ YouTube videos are taken down.

What frustrates me is this: many of these young people are using skills that – if channelled in the right way – could provide them with an alternative route to success. And yet, in Lambeth, too much of this entrepreneurial instinct is being channelled into totally the wrong thing. Just imagine what our young gang members could achieve if their energies were redirected. Their entrepreneurial zeal, used in a legitimate business setting, could provide them with a ladder up, just as it did for my father. Instead, as things stand, many of them will likely end up in jail with blood on their hands unless we change things.

I spent an evening talking to young people in a youth club in my constituency about this speech last week. A large number of the young people attending that particular club are affiliated to and/or are involved in the gangs which operate in my area. We talked about why young people were choosing to do the wrong kind of business through gangs. One young constituent said simply that illegitimate business was “an easier and faster way to make money”, to “get rich quick”.

When I dug behind this rather glib explanation, my young constituents explained that pursuing gang related business was viewed as a strategy for getting out and getting on. Gang members “have goals”, said one young man, “they do bad to do good”. What he meant was that gang members sought to make money first through illegitimate means, with a view to building up enough finance to run a legitimate business later. The other young people present shared his analysis.

I am sure that many in this room have struggled to access finance to start and grow their business, and will have considered peer to peer lending or maybe finding an angel investor for it. Well, among this group in my constituency there was a perception that profits from illegal commerce were the most viable solution for them.

Of course the reasons why young people get involved in gangs are complex and varied. But what is clear is that the entrepreneurial spirit is strong in them, albeit misdirected. We must make legitimate business a more feasible avenue through which they can realise their dreams even when all else may have failed them.

Reflecting on my father’s experience and the entrepreneurial impulse of our young peo ple, I am convinced that Labour must view entrepreneurship as central to our approach to increasing social mobility.

Social mobility is of course very much in keeping with what Labour is all about. We exist as a movement and as a political party to help more people succeed in life – or, as we put it in our constitution, to secure “the means for each of us to realise our true potential”. Like all the best entrepreneurs, ours is an ambitious mission: putting power, wealth and opportunity in the hands of the many. And, yes, this can sometimes be threatening to the established market players – those who have the power and wealth, and want to hoard it. So be it.

At root it is about helping people to get on in life regardless of where they are from, able to pursue the life they choose and value. It is about making a person’s destiny less dependent on the circumstances of their birth.

Some people view social mobility as a relative concept, meaning that for every person moving up the ladder there must be an equal and opposite reaction of others moving down. But extending opportunity need not be a zero sum game. Removing the ceiling on success that too many experience is to the collective benefit of us all.

And in an interdependent world individual success can strengthen our common bonds, just as strong common bonds can enrich the soil from which individual success grows. Hillary Clinton is fond of quoting the Nigerian proverb which says it takes a whole village to raise a child. I say it takes a similarly strong culture to raise an entrepreneur. Just ask those who have spent time in Silicon Valley about the strong culture there – of hope, possibility and forgiveness, where failure is seen as part of the learning process.

In government, Labour did a lot to fracture the link between a person’s history and their destiny: from Sure Start and unprecedented investment in early years education, to improvements in educational attainment across the board; from the educational maintenance allowance, to the expansion of higher education. These are things we can be proud of.

We narrowed the gap in attainment between pupils from more and less advantaged backgrounds – for example, the percentage of those on free school meals gaining five grade A*-C GCSEs rose faster than for those not on free school meals. And there is some evidence that we had begun to weaken the link between family background and educational attainment: research from the University of Bristol suggests family background had less influence on GCSE results for those taking them in 2006, compared to those taking O-levels in 1986. But, despite this, the link remains strong and it is clear there is a long way to go.

However, it seems unlikely that this progress will be sustained if this Government – which has already cut the educational maintenance allowance – also follows through on its plans to return us to a two-tier education system where kids are divided into winners and losers at age 14.

And even where it appears that progress has been made, it takes a long time to quantify. A key indicator for measuring social mobility is earnings. I’m told that the erratic earnings of you entrepreneurs makes it much more tricky to keep track of your earnings than those in employment, meaning you are often excluded from the data. But that’s for another day. Whether a wage earner or an entrepreneur, there is a long time lag until these data are available. For example, the very first kids who benefitted from Sure Start are still only just teenagers today but the benefits they will derive will be long lasting if the US Head Start programme is used as a guide.

The All-Party Parliamentary Group on Social Mobility recently set out its excellent “7 key truths about social mobility”. They highlighted the critical importance of early years in developing learning skills and laying the foundations for per sonal resilience and future emotional wellbeing; the impact of high quality teaching and out-of-school programmes; how these feed through into university admissions, the main determinant of later opportunities; as well as pointing out that while early pathways are often highly predictive, they are not determinative, something that policy makers should not forget.

So I do not want to decry the investment in the early years, or to undermine the focus on educational attainment, access to universities, and access to the professions – the last point particularly brought to public attention through the excellent and persuasive work of Alan Milburn more recently. All this remains incredibly important. They are issues I am passionate about and, in the case of universities, form a major part of my brief as Shadow Secretary of State.

But – as Ed Miliband recently pointed out – social mobility shouldn’t just be about changing the odds of people making it to university, as if only one kind of pathway to success matters. We have to improve opportunities for everyone, including those who don’t make it to university. That means ensuring vocational education is seen as just as much of a gold standard as academic education – and that there are good opportunities to switch between the two.

What I wanted to do today, by highlighting the role of enterprise, is to ensure we place the role of entrepreneurship and business policy at the heart of this debate. Increasing social mobility cannot just be a matter for education, at whatever age. It must be a whole government activity. We must harness the power of business to change lives, releasing the entrepreneurial spirit wherever it resides, to open up new routes through which people can shape their own destinies just as my father did.

Entrepreneurship has a key role to play here because running your own business, research suggests, can sometimes offer a better route for weakening the link between where you come from and where you end up, than being in paid employment.

I have been particularly taken with the work of Ingrid Schoon and Kathryn Duckworth at the Institute of Education in this respect. They compared levels of social mobility between those who are employed and those who are self-employed. Their findings suggest that self-employment offers a more likely route to social mobility than paid employment – so one has a better chance of getting on by going into business.

And entrepreneurial success is at the core of Labour’s vision for the dynamic, future economy we need, and at the core of our vision for the dynamic, fair, opportunity s ociety we want to see.

It is central to the better and more productive capitalism Ed Miliband and I have been arguing for – innovative businesses, focused on long-term value creation not short term profit extraction.

It is a vision rooted in our history. We have always stood for increasing autonomy in life and dignity in work as the world of work has evolved and changed. So what are we doing in this area?

We set up our Small Business Taskforce early last year, now led by Bill Thomas, to advise on what we should be advocating to help people start up and grow businesses. Before coming here I tweeted a link on twitter to the Taskforce’s interim report – produced by the late, great entrepreneur Nigel Doughty – for those who have yet to read it. Its next report will be published later this year.

We set up NG:Next Generation, our vibrant entrepreneurs’ network, towards the end of last year to ensure our party is connected into the entrepreneur community and to provide a vehicle through which entrepreneurs can connect with each other. The network’s next event takes place here this evening just as soon as the Q&A session is done.

Labour’s shadow education team, led by my good friend Stephen Twigg – with whom my team is working closely – is looking at the role schools can play in fostering the next generation of entrepreneurs. It is why, for example, we are supporting the campaign by the CBI and others that speaking, presentation and communications skills should be a priority in all state schools following the excellent example of Paddington Academy, as they are in many private schools.

And I am pleased to say that, before being elected, every member of our shadow business team in the House of Commons had either set up and run their own business, or – like myself – professionally advised many entrepreneurs who have done so. So when our manifesto comes, I can confidently say it will be informed by practical experience, as well as our beliefs and values.

In closing, I want to quickly say something about the business environment.

These are difficult times for business. Our economy is in a recession of the Government’s own making. The outlook is uncertain. The full impact of the troubles in the Eurozone have yet to feed through. All the while, the Government continues to fail to show the leadership needed at home, it has failed to show the leadership needed abroad, and it has failed to take the action necessary to guide our economy back to growth. In short, they risk creating a lost generation of businesses and business opportunities.

That said, I remain optimistic about our national future in the longer term. Looking around the world at the rise of the emerging economies I know we will have to raise our game to compete but I am determined that we will do it. There are, after all, huge opportunities out there.

In the US there is a national story in which the lone entrepreneur plays the lead role, pursuing the American dream. The evidence for this kind of story today may be weak, given that social mobility in the US is as low as anywhere. We all know that in an unequal society it is simply harder to move up the ladder. But there is no doubting the rhetorical strength of their national story, with its unashamed veneration of individual success.

To succeed in the future we must write the next chapter of our own national story – with aspiration at its heart, entrepreneurship as its state of mind, and community as its end. It must encourage your restlessness and inspire my young constituents. That way, together, we will create a better future for all in Britain.

Chuka Umunna – 2012 Speech to the High Pay Commission

Below is the text of the speech made by Chuka Umunna to the High Pay Commission and IPPR on 12th January 2012.

Thank you for that introduction Michael and to the ICAEW for hosting this event.

And thank you too to the High Pay Commission and the Institute of Public Policy Research for inviting me to speak.

All three organisations have made major contributions to informing and stimulating the national debate on this issue which has dominated the news agenda since the year started, the High Pay Commission in particular.

The headlines and clipped news reports do not do justice to this issue so today my aim is:

– to explain why excessive pay and rewards for failure matter from the point of view of our businesses, those who own them and society at large; and,

– to get to the heart of the problem and outline the solutions as we see them in Her Majesty’s Opposition.

The economy is the issue of this parliament not simply because of the lack of growth and the highest rate of unemployment for 17 years which people are experiencing in the here and now. But also because of the long term structural trends in an economy which has failed to deliver incomes to keep pace with rising living costs, a pattern repeated in other developed economies.

What do I mean by this? Not enough of the reward from rising productivity has found its way into the wage packets of average earners with the result that middle income earners have actually seen their wages stagnate from 2003, whilst high earners have seen their wages soar. Consequently many people have come to feel that, in the good times the economy did not really work for them, while in the bad times they were being made to carry much of the risk.

So it is time for some hard reflection on the nature and direction of our economy and the changes we need to make:

– changes to get growth going again in the short term, which is why we have put forward an immediate stimulus package in the form of our 5 point plan for growth and jobs;

– changes to ensure that future prosperity benefits everyone;

– changes to ensure we can pay our way in the world and take full advantage of the new opportunities that new markets bring – which is why we need to build a New Economy based on a reformed capitalism.

The FT have just started a series of articles under the title Capitalism in Crisis. I wouldn’t go as far as those dangerous lefties. Capitalism has been and remains a powerful engine of human progress. But in recent speeches and, again, over the weekend I argued that what we need is a New Economy based on a better, more responsible and more productive capitalism than our current national variety.

That New Economy must be built on a partnership between productive business and active government: the entrepreneurial impulse in us all encouraged and supported; closed circles broken up and opened to everyone. And, as Ed Miliband said in his speech on Tuesday, we must think how we build a New Economy that delivers fairness for Britain at a time when there is less money to spend.

In many ways, the issues around executive pay are a good place to start. Excessive pay and rewards for failure are symptomatic of what is wrong with the way our economy has been operating over the last 30 years – of how wealth is created, how opportunities are shared, how success is rewarded, and how power is exercised in our companies. It is something Ed Miliband has been talking about for many, many months now.

There are some who say it is no business of government – no business of politicians – to be commenting on these matters. We have no right to interfere in the affairs of privately owned companies is their refrain. I could not disagree more strongly with that statement.

At the heart of my politics is the belief that we are all mutually dependent. This notion is deeply embedded in the values of the Labour Party. Better together. Stronger together.

So to argue that politicians and society at large, should not take an interest in these matters, is to feed the idea that society is here and business is over in the corner there which is dangerous.

Why? Because business and society are not separate islands – they are mutually dependent. Business needs a strong society, providing it with human resource, talent and custom. A strong society needs everything that productive business can offer: the jobs, the growth, the innovation, the opportunities, the wealth creating potential. That is why we should take an interest in the pay issue.

And while it is right that those who work hard, generate wealth and create jobs for our country are rewarded, where failure is rewarded or people award themselves huge pay rises that bear no relation to performance or what their companies can bear, trust is severely undermined. As Ken Costa, the former Chair of Lazard International said last October:

“Put bluntly, ultimately businesses cannot work, banks cannot lend, economies cannot function and societies cannot flourish without mutual trust and respect, or without fundamental honesty and integrity.”

That is why the contributions that the ICEAW have made are so welcome – you are the important keepers of the accountancy flame, your mission to ensure that “people can do business with confidence”. And here you are helping to ensure that people can have confidence in business. That has to be right.

As Sir Roger Carr, the current Chair of the CBI, said on taking up his post last year, business needs to show that it is “a force for good.” This is why it was so ridiculous for the Prime Minister and others to infer or suggest that Ed Miliband was being anti-business for raising these issues in his Labour Party conference speech last year – it is very much in the interests of business to resolve these problems and it is rather ironic that the PM is now talking about the need for reform in much the same terms as Ed.

The discussion should start by asking what we pay people for? We pay people to do a job and, where they do so successfully, people do not object to them enjoying the fruits of their success. As for bonuses – my colleague the former Chancellor Alistair Darling put it well last Sunday when he said a bonus is surely “something special, something unusual, something that you give for that little bit extra, not a matter of routine and entitlement.”

Having a skill that is in short supply but high demand is likely to be well rewarded in the marketplace. And as the size of some markets has increased – to become continental and in some cases genuinely global – so have rewards to those at the top have risen.

Of course it is not easy to chart a successful course for a major corporation, where the contours of the market place can change rapidly, where new competitors are around every corner, and where new technologies can make an entire business model obsolete overnight. It takes special skill and extraordinary commitment. So no one is against success that rewards this merit and application. Success should be rewarded.

But increasingly, what we have seen is something else. Reward that is not linked to success or performance: a self-perpetuating spiral of remuneration for those in the golden circle. Handsome rewards for failure. Rewards that seem quite unbelievable to the vast majority of people in this country; rewards from another planet.

And while there are more egregious examples that have gained notoriety, this is not about individuals. The growing gap between increases in pay and increases in company performance is systemic. In the last decade the value of FTSE 350 companies increased by eight per cent, while the average total earning of executives in those companies increased by one hundred and eight per cent.

As rewards at the top have become disproportionate to company performance, so rewards for executives have become disconnected from the rest of the workforce. They are no longer just the best paid employees. Increasingly, they are becoming a class apart.

And let us be absolutely clear who we are talking about – we are not talking about the budding entrepreneur, the small business owner struggling in tough times; this does not apply across all business. We are talking about the relatively small number of people running our largest businesses and working in our more prominent financial institutions. We are talking about FTSE 100 bosses who were paid 14 times the median pay of a worker in 1980, and who are now paid 75 times the median pay of a worker.

I should also point out that this is not a recent phenomenon, but a trend over the last three decades. In the three decades to 1979, executive pay grew 0.8% on average. In the last ten years, growth in the pay of FTSE 100 executives has been closer to 20% a year. It has now reached a point where, as Richard Lambert, former Director General of the CBI said last November, it is “damaging the interests of British business in political, economic and reputational terms”.

Why is this ballooning pay such a problem? For three reasons: it is a bad for the companies themselves; it is bad for our economy overall; and, yes, it is bad for our society.

For the companies themselves, the issue is a classic problem of agency.

Since the 1980s there was a move to create an entrepreneurial culture amongst executives at the top of our large corporations but it didn’t quite work. I’ll explain why.

The owners of the company – the shareholders – entrust executives with substantial powers to make far reaching decisions about the running of the company. Oversight is difficult, because those involved in the day to day management have plenty of discretion and a large information advantage. How can shareholders ensure their agents, the directors – the executive directors in particular – act consistently in those shareholders best interests? The solution was to try to align the incentives – through bonuses, shares, share options, incentive plans and the like, using different mechanisms and over different time frames.

But the fact is that it is hard to create a true entrepreneurial culture among executives at the top of a large corporation. Upside incentives can be made similar, but the structure of downside risk is completely different for an entrepreneur who has everything on the line. Entrepreneurs have most of their own money on the line when they make decisions; executive directors of large companies do not.

The result has been that the value of incentive packages for executives has risen out of all proportion to improvements in company performance. If it ever worked, it seems that there are now declining returns. In the first decade of this century FTSE 350 firms increased their pre-tax profits by 50% and their earnings per share by 73%, while year end share prices fell by 5%. Over the same period, bonuses for executives in these companies have risen by 187%, long term incentive plans by 254%. This demonstrates what psychologists have already found – that the relationship between financial incentives and performance is far from simple, and is not even reliably positive.

At the same time, the heavy focus on the alignment of high powered incentives risks crowding out other, more rounded but equally powerful intrinsic motivations of executives that are just as relevant to the company’s success – the satisfaction of doing a good job, the pride in leading and growing a great company, of winning in the market place, of having the respect of peers, of creating a legacy of sustained and sustainable success.

We are not opposed to performance related pay but it does make you wonder: if a company is so concerned that an executive paid only their salary won’t be motivated to work hard in the best interests of the company, then maybe they have the wrong person in the job?

At its worst you end up with perverse incentive structures which encourage the wrong kind of decision making, as the failures in many financial institutions in the wake of the 2008/9 financial crash so clearly illustrated.

And this approach to executive reward creates negative consequences in other parts of the business. Overemphasising the importance of the contribution of those of those at the top can undermine the motivations of others in the business. As the High Pay Commission has shown, there is a growing body of research that confirms that just as relative rewards matter as a basis for social comparison among executives, so they matter to other employees too. They matter for employee engagement, and their sense of identification with company goals. Feelings of unfairness in pay reduce the willingness to cooperate, can reduce effort and weaken commitment. Unsurprisingly, greater pay inequality in a firm has been found to be associated with lower firm performance.

So excessive pay and rewards for failure are undoubtedly bad for business.

The second reason this is a problem is because it is bad for our economy. I’ve lost count of the number of companies I’ve visited who say to me that they can’t find the engineering graduates they need to hire. Where are they? Lets face it – many of them are following the money. In the decade to 2007, 60% of the increase in the income share of the top 10 per cent went to finance workers. This talent drain, with rewards disproportionate to success, has distorted the market and makes the challenge of rebalancing the economy – by region as well as by sector – so much harder.

Likewise, entrepreneurs, those running our small businesses are the lifeblood of our economy, providing approximately two thirds of private sector jobs and almost half of private sector turnover. We need people to take risks and set up these businesses – why would they do so if they can earn excessive wealth in the boardroom and the City?

And the third reason this matters is because it is bad for our society. Executive pay has helped promote inequality and there is a huge body of research to show that this has a detrimental impact on society. At this juncture many people refer to the “Spirit Level”, the book by Richard Wilkinson and Kate Pickett.

Today, I’ll refer you to comments of the former Chief Economist at the IMF, Raghuram Rajan – the IMF is of course George Osborne’s institution of choice when it comes to quoting people! He has argued that high levels of inequality contributed to the financial crisis. In his recent book, Fault Lines, Rajan explains how high levels of wage inflation at the top and wage stagnation for the rest of the population led to a growth in easy credit.

So I have talked about what we pay people for, how a small group are being paid far in excess of what they deserve, and the adverse impact this is having on our businesses, our economy and our society. What would we – the Opposition – do to change all this?

The High Pay Commission has put forward a tranche of recommendations to increase transparency, accountability and fairness. The recommendations enjoy support in the business community and are in line with measures implemented in the U.S., Germany and other countries to address these issues. We support them too.

In the main, the Commission suggests seeking to effect the changes through the UK Corporate Governance Code in the first instance, followed by legislation if the amendments to the Code do not bring about the change needed. This is the right approach. Legislation should be the last resort, used only if there is not sufficient compliance with the Code within a reasonable period of time.

On the proposals themselves: first, transparency – over the level of reward and over the approval of reward packages. In trying to align executive incentives, reward packages have become increasingly complex, making it difficult for shareholders to understand exactly what is being paid.

This problem is intensifying. Increasing numbers of directors are being rewarded through ever more complex service agreements. Individual reward packages are more generous and ‘performance’ targets seem to be getting easier to hit.

To enhance transparency, the High Pay Commission recommends that:

– Executive pay should comprise a basic salary, with only one additional performance related element where necessary;

– The publication of pay packages of the ten highest paid employees outside the boardroom; and,

– The reporting of pay packages in a standardised form, including a single figure showing total remuneration.

We endorse these proposals. They will give shareholders access to simple, standardised information on which they can make reasoned judgements. While we wait and wait for this Conservative led-government to match words with deeds, there is no reason why business cannot begin taking action now.

In addition, the Commission proposes that investment and pension fund managers be required to disclose how they vote on all issues, including on remuneration. This transparency would allow pensioners and investors to see where their monies are being used to finance big pay deals. It is their money, after all.

This increase in transparency would also increase accountability, and is just one of a number of changes needed to do so.

To examine the dynamics of a remuneration committee is to observe a case study of what happens when responsibility is diffused, backgrounds of participants are homogenous, and loyalties can overlap. Participants are drawn mostly from a narrow class of, mostly male, current or former executives. The voice of employees is silent and shareholders vote in an advisory capacity on remuneration reports after the event. You don’t need to be a rocket scientist to detect a problem with this old way of doing business.

The way non-executive directors are appointed and the backgrounds from which they are drawn – they are often ex-executives themselves – is not conducive to the appointment of people who are prepared to shake it up and introduce new ways of thinking. That is why we endorse the Commission’s recommendations to have employee representation on remuneration committees and to open up the recruitment of non-execs to a wider pool.

But I want to look at where we should go further. In the UK, the nomination committee of the Board – which is responsible for hunting out people to serve on boards – is made up of other Board members. Candidates are nominated by those Board members at the company’s AGM and, in most cases, are elected as a matter of course.

We should consider moving towards a system which other countries have adopted where the nomination committee is not composed of board members but is composed of the four or five biggest shareholders in the company along with the non-executive chair of the board – that same committee, composed of shareholders, also recommends the structure and amount of remuneration. This would create far stronger lines of accountability to those who ultimately own the business and would promote the shareholder activism and engagement which is key.

In addition the role of remuneration consultants must be looked at, as the Commission says in its report. In his 2006 letter to Berkshire Hathaway shareholders, Warren Buffet referred to a remuneration consultancy called “Ratchet, Ratchet and Bingo”; “The name may be phony,” he said, “but the action it conveys is not”, highlighting his view that such consultancies inflate executive pay. There are widespread concerns that these consultancies are ratcheting up pay here too.

Indeed, it is my view that, unchecked, their effect could be similar to that of unscrupulous football players’ agents – inflating salaries sometimes way beyond talent or contribution and often working against the long term interests of the companies themselves.

Part of the problem is that – in their advisory role to remuneration committees – the consultants owe their duties to the Board and not to shareholders. This needs to be looked at, along with the risk of conflict where consultants are advising both executive management and non-executive directors on remuneration. That is why it is right that companies should publish the extent of their use of remuneration consultants.

I am aware of the voluntary guidelines to prevent remuneration consultants cross-selling services but, given the risk of conflict, consideration should be given to taking a more strict approach. Lawyers giving legal advice in the same context are not subject to some voluntary code but to binding rules that prevent the provision of advice where there is a potential for conflict of interests, unless strong, viable and properly policed Chinese Walls are erected. Why should the same not apply here?

Finally, on fairness, the disconnection of executive reward from the pay of other employees is at the heart of loss of trust. This needs to be rebuilt. That is why we endorse the Commission’s call for companies to publish the ratios between the highest paid employees and the median.

It is also another reason for having an employee on the remuneration committee of the Board, something the Prime Minister has failed to commit to implement – as Ed said on Tuesday, it would mean top executives would have to look an ordinary member of staff in the eye before they award these pay packages.

To continue to inform this important debate, we endorse the High Pay Commission’s call for a permanent body to monitor high pay, along the lines of the Low Pay Commission Labour established.

All of these measures are designed to empower shareholders – to give them the tools to be able to take action, and to increase the accountability of directors to them.

David Cameron has sought to do this by making shareholder votes on remuneration binding. We will examine this proposal when Vince Cable, my opposite number, provides further detail later this month.

However, there are a number of problems with what he has suggested. First, it is backward looking. As CBI Head John Cridland has said, this would be like shutting the stable door after the horse has bolted.

Secondly, there are large practical difficulties with the proposal as its retrospective impact would create legal problems in trying to unpick contracts already agreed – I say this from my own experience, having practiced as a specialist employment law solicitor for the best part of a decade.

And thirdly, without a matching requirement of transparency – the provision of clear and simple information – shareholders may not be any the wiser about what they are voting on, and may even be less inclined to vote.

So it is not enough for David Cameron to say he wants shareholders to be given a vote on these issues. We have seen and heard this kind of thing from him before – talking a good game but fiddling at the margins.

I believe in shareholders’ democracy but democracy is about more than voting. If we are to empower shareholders, they need information provided through greater transparency of boardroom pay – as well as the means to mobilise and become more active in the running of their companies.

And this takes us to the heart of the issue – the need to encourage greater activism amongst shareholders. We cannot ignore the long term trends that are working against this. Since the early 1990s, foreign ownership of total UK equity has increased from less than 15% to around 40% in 2008. The average length of time investors hold their shares has fallen from 5 years in the 1960s to less than 8 months by 2007, with an enormous increase in high frequency trading.

These trends make it harder, but all is not lost – there are grounds for optimism. Voting by shareholders in FTSE 350 companies has now risen to a respectable 68%. There is clearly an appetite for more shareholder power and we have to nurture the use of it. It can be built upon by putting more – and more effective – tools in the hands of shareholders in the way I have described.

And all this needs to be underpinned by a renewed and explicit focus on relative reward based on merit – the fairness that inspires employee loyalty to a company, and the fairness that renews public trust in business.

The current business environment is as tough as it has ever been. Labour has set out a plan for jobs and growth to get the economy moving again, get people back into work, and to reduce the deficit.

But we also must address the underlying challenges in our economy that have persisted over many years, and which the financial crisis brought in to sharp relief. Excessive executive pay is one of them.

That is why I am glad that this debate is going on and proud of the role that Ed has played in leading it. Let’s make it count. Let us begin preparing the ground for the better days that lie ahead. Let us build a better economy for Britain.

Thank you.

Chuka Umunna – 2011 Speech to Universities UK

Below is the text of the speech made by Chuka Umunna to Universities UK on 2nd December 2011.

Thank you for that kind welcome. I am hugely grateful for your invitation to speak today at this critical time for our universities and the Higher Education sector.

This gives me the first opportunity to give a speech on this major part of my brief since my appointment as the Shadow Secretary of State for Business, Innovation and Skills.

At a time of considerable change and instability Universities UK has been a constant voice of good sense and reason. I know both my predecessor in the role, John Denham, and our former lead on Higher Education, Gareth Thomas, greatly appreciated your wise counsel and advice.

Though he is not here, I’d like to take this opportunity to thank John, who is a real champion of Higher Education. He brought a huge amount of expertise to bear on the brief as a former Secretary of State for Innovation Universities and Skills and as Shadow Business Secretary.

Both I and Shabana Mahmood, our new Shadow on Universities, want to maintain and grow the close working relationship John and Gareth had with you.

I, of course, shadow Vince Cable. Vince is a bit different to me – he has been around for somewhat longer than me. In fact, a journalist pointed out when I was appointed in October that not only is Vince twice my age but, during his lifetime, he has been a member of the Labour Party for longer than I have.

Anyway – notwithstanding the comparisons with Vince – though Shabana and I may not be in Government, we have an important role to play as an Opposition holding the government to account and ensuring they do right by our students, by the institutions our students attend, by those who work in them and, above all, by our country. You want this too which is why a constant dialogue, between us and you, is absolutely essential. For example, we will want to work closely with you on the forthcoming Bill and the changes that it will bring.

Shabana and I will also be making a series of visits to universities in the coming months to listen and learn, and we look forward to engaging with many of you then as we develop our policy, and thank you for all your help and assistance to date.

Just as there has been change in our team I know there has been some in yours too.

I look forward to working with Eric Thomas, and I would like to pay tribute to the work of Steve Smith before him. I want to pay tribute to you, the members – Vice Chancellors and Principal s up and down the country – for the work you do, not just as leaders of your institutions but also as leaders in your communities. You preside over a world class Higher Education sector with a strong international reputation.

Collectively, you represent excellence in teaching and research. Your institutions consistently feature high up in global rankings as the latest figures demonstrate and you continue to drive innovation through your advanced research and its application.

People forget that our HE sector is our seventh largest export industry, generating over £59 billion in output, and more than 650,000 jobs. You are drivers of jobs and growth nationally.

And the institutions that you lead are major employers, and important drivers of regional growth too. With the abolition of the Regional Development Agencies, your voices as advocates for your regions are more important than ever.

The bottom line is that universities are integral to our future success as a country.

Nowhere was this more evident to me than during my recent trip with Ed Miliband to the Warwick Manufacturing Group which is part of Warwick University.

In 1980, Professor Lord Kumar Bhattacharyya set up the WMG to reinvigorate UK manufacturing through the application of cutting edge research and effective knowledge transfer. Thirty years on, it is continuing to do just that. It brings academic rigour together with industrial and organisational practice. It is an example of how the Higher Education sector, working with industry, can drive growth in the real economy.

There are other excellent examples too like Cambridge Technopole, at the heart of which sits Cambridge University. It provides research and innovation support for high-tech businesses in that region.

There is the University of Abertay, at the centre of a video games designing cluster, with degree courses providing highly skilled graduates but also managing a research and development fund for local developers.

One of the business advisers helping our review talks extremely positively of the knowledge transfer from Sheffield Universities and his bakery business, in improving skills progression and development and productivity improvements to achieve his goal of being the best baker in Britain.

I am sure you would all be able to give me more examples of what your centres of learning are doing to add to this list.

These kinds of collaborations and partnerships should be a bigger part of getting growth going in our economy and our future success. And so it is an essential element of our policy review work.

Later I will say something about our thinking to date and the principles that will guide the development of our policy:

Fairness for students;

Autonomy for universities enabling them to deliver excellence;

Sustainable funding; and,

Universities playing a central role in the economic as well as the cultural life, in regional and national economies.

However, before I do this I must turn to the elephant in the room (so to speak) – the cloud hanging over your futures – what the Government is pushing through and where it is getting it wrong.

Where the Conservative-led Government is getting it wrong

With the anniversary of the vote to triple fees next week, I think it would be worth recapping on what has been, let us say, a challenging year and where we have got to.

When the Conservative-led Government initially set out its changes to Higher Education – cutting the teaching grant by 80% and hiking up fees – we said what was proposed was unnecessary, unfair and unsustainable: not good for students or the future of Higher Education, one of Britain’s great success stories.

It was why we asked the Government to lay out their p lans in full so we could subject them to the necessary scrutiny. So what happened?

The vote to triple tuition fees came first before any White Paper, surely the wrong way round. Then the changes on access and widening participation were forced out, with subsequent changes to those plans.

As fees levels began to emerge with £9,000 looking to be far from the exception to the rule which the Government promised, their sums didn’t add up and a black hole came into view. First Ministers ignored this and claimed it would all even out in the end. But their miscalculation saw a scramble to claw back in other ways. There were exhortations; claims OFFA was now a regulator and would set levels; even threats to universities with Ministers crudely claiming that fee levels were so high because universities were inefficient.

Lets take a step back and reflect on that particular claim for a moment – in business, companies have to factor in risk and cost it. You are businesses too and this Government has displayed an abject lesson in creating unnecessary risk for you.

So the White Paper arrives at the end of June of this year. When the threats failed, frankly because of the mess the Government had created, they pulled ‘core and margin’ and AAB out of a hat which they then bolted onto the original plans.

This is no way to run government policy on Higher Education – this is no way to treat our universities. Vince Cable called his dismantling of the RDAs Maoist and chaotic. It could equally have applied to another area of his brief.

The reforms are not the evolutionary change UUK has argued for.

Institutions have had to make decisions affecting their future financial viability not knowing how the rules will change month to month.

You are now in the ridiculous position where you have previously set your fee levels and agreed access agreements with OFFA in April only to find that the rules of the game changed with the Wh ite Paper. Following its publication you found you were faced with a deadline to bid for the 20,000 places which were taken from universities and for which you could now bid – that deadline closed before the deadline for revised access agreements to be signed off by OFFA.

27 institutions have re-submitted their access agreements proposing lower fee levels and 25 today have been told they can change their agreements according to OFFA’s announcement a few moments ago. We still need to look fully at the detail but the OFFA letter confirms there is no evidence on what works best to widen access – fee waivers or bursaries – but the Government still ploughs ahead none-the-less. Fee waivers of course help the Government’s mess as it reduces its bill. The chaos remains for students and the university system, a system which gets ever more complex and bureaucratic.

If the Government had backed Labour’s proposal at conference, which I will get onto in a moment, none of these current access changes, nor core and margin would have been necessary, nor would quality be under threat. Fees would have been capped at £6,000.

‘Core and margin’ is designed to reduce the cost of courses to make up for the Government getting its sums wrong – it isn’t for the benefit of students or the Higher Education sector. And because of this mess students have applied for courses without knowing the fee levels – making far reaching decisions about their lives without the information that they need. This is no way to help our young people get on in life.

Then there are the visa changes to Tier 4 – the student visa route – which hasn’t helped either. As I said, the UK’s 7th largest export is Higher Education for foreign students. This was thrown into chaos by the Home Office’s changes which deter foreign students from applying to UK universities. There was little regard to the impact and to the reputation of the UK HE Sector around the worl d. Where was the Business Department pressing your case? As an Opposition we recognised this threat and I know John worked with you in trying to get the Government to recognise the damage it was doing.

Overall, though, their reforms are seeking to introduce something more fundamental: a more market-led system, or mini-markets, overlaid with a more complex and bureaucratic structure.

We are supportive of student choice. Within a diverse sector, students currently have a wide range of high quality options by course and by institution. We welcome the extension of choice that will result from allowing Further Education colleges the power to award degrees, which will allow people who live in areas that are not near a university to access Higher Education courses.

But this market is beset with problems and few have said it will work well. There will be intended and unintended consequences. Ministers admitted that there would be institutional failure as a result.

There are rightly fears that the reforms will discourage universities from offering science and technology courses and student take up of the same, at a time when these types of course should be the centre-piece of a future Higher Education system as our competitors countries recognise.

There are rightly fears that social mobility and access will stall. Aim Higher has been scrapped, the National Scholarship Programme, though described as “national” is misleading – it does not have national eligibility criteria but is more a lottery with students with the same social and economic backgrounds getting different types of benefit depending on where they study; and there is widespread confusion among students as to its purpose. The respected Sutton Trust has said the tripling of fees will reduce the gains made on widening access and social mobility. This is exacerbated by ‘AAB’ and ‘core and margin’, which has led to complex access arrangements b eing crow-barred on to try and correct imbalances. Widening access is very much an afterthought not an outcome of the new system.

OFFA, with a hugely expanded role, is still an office of a handful of staff assessing access agreements. It is not clear what the sanctions are going to be for universities that do not fulfil their obligations.

In fact, UCAS figures have seen a drop in application to universities and a variation is emerging across regions with the North East seeing the highest drop. What does that say about ‘rebalancing’ the economy?

Also, there are fears that the expansion of for-profit providers will unbalance Higher Education further and undermine quality. Apollo Group, Kaplan and the Education Management Corporation have all met with the Higher Education Minister, David Willetts. All currently have lawsuits being pursued against them in the US for aggressive recruitment practices and miss-selling of courses.

And with the changes that have taken place we still do not know how much future turbulence will be added on top – will there be further rounds of core and margin?

So that is the landscape. In light of all this, let me pause a second and pose some questions:

Are the changes to Higher Education helping to widen access, ensuring that those with the best potential are in our universities?

Are they enhancing opportunities?

Are they giving stability to universities to plan and to build on their success?

Are they helping our universities compete in the world?

Are they helping to put universities at the heart of growth, working with business and Government to create future success?

Are they working to support the STEM needs of our economy?

In all case the answers is sadly a no.

So it is in this context that we are having to think about the future of Higher Education – who knows what we would inherit at the time of the next General Election were we elected.

And I know that you have of course worked with the Government to try and secure a better outcome to the changes. It hasn’t been easy. You all want the best for your institutions and the sector. For some there are silver linings – perhaps the ability to raise more income. Some argued from the start that, with the Government cutting the teaching grant by 80%, higher fees were the only way. Some perhaps see opportunities flowing from the access changes and bidding for courses. Others we know are deeply frustrated with what has been going on.

So what is our thinking? Well, we must deal with the world as we find it, not as we would like it to be. This lies behind the policy announced by Ed Miliband at the Labour Party Conference.

First, let me turn to fees. It is absolutely right that graduates make a contribution. It underpins the changes we introduced in Government and which brought an extra £1bn into Higher Education. But this Government is now forcing many students to take on debts of more than £40,000 – long-term debts, and long-term impacts.

It strikes at the root of what Ed Miliband has called the Promise of Britain – that the next generation should do better than the last. Many families fear their children will do worse than the generation before. That’s why we have put forward an alternative funding package, reducing the maximum level of fees from £9,000 to £6,000.

No university would be worse off under this plan, as any money lost through a reduction in tuition fees would be compensated for – for individual universities the proposal is revenue neutral.

And, there would be no need for the core and margin system and the uncertainties and mess it creates. With the sums back under control, there would be no black hole from £9,000 fees.

I’ll explain how this works: reducing the maximum level of fees to £6,000 while compensating universities for the difference costs £1.1 billion. Of that £1.1 billion:

£350 million will come from automatic savings from reducing the cap to £6,000 because it will means some associated expenditure, such as on as fee waivers, will no longer be required;

£300 million comes from cancelling the Government’s planned cut to the corporation tax on the banks; and,

£500 million comes from asking the top ten percent of graduates – graduates earning over £65,000 in each year of their working life – to pay more through a combination of a higher interest rate (from 3% to 4%) and to continue to pay for an additional two years if they pay off their loan within 20 years.

So this could be implemented now. It would maintain funding for universities but avoid harm to families and graduates from the Government’s plans. It would reduce the debt which graduates will be loaded with, and would be an important step towards a more graduate-tax like system with wealthier graduates being asked to pay more due to the combination of a higher interest rate and time limited overpayment for two years.

Our proposal and our approach are guided by our core principles – that graduates should make a fair contribution to the cost of Higher Education and that those who benefit the most should pay the most.

And if by the time of the next election we can do more, then we will – so starting out from the position set out at our Party Conference this year, we will be looking at further ways to:

Reduce the burden on families and students who are being saddled with high debts;

Maintain funding for universities; and

Develop a fairer payment system for graduates.

Our policy review will be looking at these issues further.

To date the review – and the interim findings were published a few weeks ago – has been focused on the economic challenges we face which brings me to my second point – international competitiveness and paying our way in the world.

We need a new economy, which is fair, resilient, competitive, and supports the long-term. It needs active, intelligent government working with business to build a vision for the future economy, and develop strategies for the sectors for which we have a competitive advantage and where can compete. It is not business as usual but a different approach.

Higher Education is an essential element of our future success – not only as an export sector as I have laid out, but in terms of training, skilling and developing what will be part of the future workforce, supporting the research and leading the collaborative work with industry. Your report published yesterday supports this view.

One of the challenges Britain faces is that the economy has skill shortages at the same time as under-utilising the skills we have. We need more companies that can utilise those skills. That means creating the conditions where we encourage companies who invest in the long term; creating the conditions in which we do not rely on low skills, low paid jobs where we cannot and should not compete.

The role of universities is central to increasing our productivity and building a more skilled workforce to bring this new economy about.

In 2001 we set a commitment to get 50% of 18-30 year olds entering Higher Education to go to university. It was ambitious. It was right. It helped focus our collective efforts. It wasn’t arbitrary as some claimed but achieved real change. In 1999 39% of young people went to university and this grew to 47% in 2009/10. This is a huge achievement. And it happened at a tim e when we rescued apprenticeships and supported vocational education too.

But, the target was virtually met when we left office. A fair question is therefore what should the future hold?

As part of our review, we will be looking at how we can build on this and the best way we can assess ourselves against our competitor countries – I think that has to be the yardstick against which we should judge our progress in the future.

It is right in the global world, with global markets, that we are outward looking in this way. We need to be focused on being among the best in the world. So we need to benchmark ourselves against the best.

Yes, the numbers of young people going into university but also a broader account too, of the quality and type of courses students undertake which supports our industries and economy of the future and – in a similar way – the quality, level and take up of vocational education. We need to look at the overall skill and education levels of 100% of our future generation and be among the best in the world.

In concluding, let me draw on your report and quote two thin gs to support the arguments I’ve just made for a new economy – something I can leave you to think about.

In your report you say, and I quote:

“Countries with high levels of innovation [also] tend to have, on average, higher proportions of graduates in their populations and a stronger track record of investment in Higher Education.”

I think innovation is key.

In your report you also list the number of Chinese, US and EU graduates per year in 2010 and the estimates in 2020. I added up the numbers. The increase in per year graduates in China in 2020 compared to 2010 is nearly the same as the total number graduates in 2020 in the US and EU combined.

The landscape is changing.

Together we must work to ensure Britain is set up to meet the new challenges.

Thank you.