David Lidington – 2018 Speech on Responsible Capitalism

Below is the text of the speech made by David Lidington, the Chancellor of the Duchy of Lancaster, on 24 November 2018.

I really welcome the foundation of Onward and hearing about the work that this new think tank plans.

It seems to me when I look back on those days, growing up and going to university in the late 1970s and early 1980s, it was a time of really exciting intellectual ferment on the centre right of British politics.

I think what all supporters of a liberal free enterprise society – a responsible society that cares about the values expressed in communities – needs now is a resurgence of that intellectual energy.

In those days that was brought about through the Centre of Policy Studies, the Institute of Economic Affairs, and the Adam Smith Institute. Today Onward is contributing to that renewal of ideas.

That is important as today those of us who support free enterprise and the market economy are confronted by a paradox.

On the one hand, living standards globally are higher than they have ever been in human history. That is largely down to the success of capitalism, free markets and free trade.

Generations of people in Asia, South America and in many countries in Africa…

… men and women whose parents and grandparents lived with the real fear of food running out if the harvest failed…

… are now able to look forward to greater prosperity and security than ever before.

In 1950 three-quarters of the world were living in extreme poverty; by 2015, fewer than a tenth were in that condition, despite a massive increase in the global population in that period of time.

The global poverty rate is now lower than it has ever been in recorded history.

That progress has led to knock-on improvements:

Global illiteracy rates have fallen from a third in 1930 to less than one-fifth today.

And child mortality – measured in terms of the percentage of children dying before their fifth birthday – has fallen tenfold since 1800 to 4.3% today.

There have been real improvements in the developed world, too.

We probably all know this from talking to our own parents or grandparents, but if you look at household goods – things like fridges, freezers, washing machines, dishwashers – which in the 1950s were considered luxury products are now seen as standard.

Things that were once counted as the exceptional rewards for high living standards are now seen as a measure of the ordinary expectations.

We carry smartphones in our pockets – giving instant access to information from every part of the world – which carry in them greater computing power than that of a mainframe computer a few decades ago.

Customers are now able to get what they want, often the next day, after shopping from the comfort of their homes.

Online retailing has cut costs and delays.

One might have expected that this unprecedented rise in human prosperity should cause people to celebrate the success of free enterprise and of market economies.

Yet that is not the case.

Rather here in the United Kingdom, and in much of the developed world, what we see is a level of scepticism higher than for many years. Not just about the conduct of individual businesses or particular sectors, but about the virtues of the free enterprise system itself, on a scale that we haven’t seen for about 40 years.

Citizens today are better informed than previous generations and young people today are increasingly motivated. They want and expect businesses to behave responsibly.

And as they look at the world they conclude that that is not what they are seeing.

Polling by the Legatum Institute shows that a majority of the British people now view capitalism as ‘greedy’ and ‘selfish’.

That research actually found remarkable consistency across the generations on economic issues – and shared by Labour and Conservative voters alike.

When asked for their top three word associations with capitalism, 32% of the public said ‘corrupt’ and only 7% said ‘for the greater good’.

And earlier this year another poll found that 61% of ordinary working people feel they don’t get their fair share of the nation’s wealth.

There are reasons for this scepticism.

There is no doubt that the crash of 2008 and the downturn which ensued damaged people’s confidence in the virtues of free and open markets.

Making matters worse has been the contrast between high profile examples of corporate excess or malpractice, and the reality for many families of squeezed living standards.

Effective competition in markets – something that underpins public trust in those markets – has in too many markets stalled.

Data from The Economist this week shows that over the last 20 years market concentration has risen in two-thirds of US industries; in Europe the trend is similar, with the average market share of the biggest four firms in each industry having risen since 2000.

But of course, underlying this widespread public concern and to some extent public anger lies not just the events of the last ten years…

… but the profound long-term changes in our economy and in assumptions about work and careers, changes being driven by globalisation and digital technology.

Both those phenomena present us with great opportunities.

Tens of millions of new customers around the world heading towards the kind of consumer expectations that are taken for granted in Britain or Germany or the United States.

And new jobs and firms – indeed entirely new professions and occupations – being created by digital technology.

So there is a paradox. Higher living standards around the world than ever before. A triumph of capitalism. Yet at the same time we see deep public discontent, for understandable reasons, with the very system that has made this prosperity possible.

So how do we respond to this challenge?

I want to touch on three ways we can go about doing so.

Our philosophical approach, how we think about free enterprise and capitalism…

… what government should do in its words and its actions…

… and what business itself ought to be doing in order to restore its public reputation.

In part what we need to do is to rediscover and renew the arguments that we made and won in the 1970s and 1980s about the success of a market system at meeting human needs and wishes, when compared with a model that looks instead to extensive state control.

Debates that we thought perhaps had been won conclusively, but have now been reopened.

To do that we have to engage with a generation for whom talk about the stagflation of the 1970s, or Trade Union power or the Soviet model, is at best a matter of remote history.

For those of us who are older, we think back to the 1970s. The great impersonator of that time, Mike Yarwood, had a big show on Saturday evenings. He could take off six trade union leaders in a show and everyone would instantly know who those people were. You could not do that today.

We have to deliver the key messages once again. You cannot distribute wealth unless it has first been created. Individuals and businesses are better at spotting opportunities and pursuing innovations than is government. A modern economy, in all its complexity and diversity, is something that no government, however good its intentions, will be able to micromanage successfully.

And putting politicians in charge of everything from railways to electricity to water supplies, as some advocate, would mean there would be nowhere else to turn when things went wrong.

We have to re-establish in the minds of today’s opinion formers and today’s public the principle that free enterprise, far from being incompatible with ethical values, is actually rooted in and depends upon a moral framework.

This actually is something where we can look to history for guidance.

The Harvard scholar David Landes in his book The Wealth and Poverty of Nations and the Cambridge historian and anthropologist Alan Macfarlane in The Culture of Capitalism have written about how it was the moral and cultural environment of European nations which enabled a capitalist economy to take off and to thrive.

Indeed the father of free enterprise, Adam Smith, recognised that markets were, as my colleague Jesse Norman puts it in his recent biography, “living institutions embedded in specific cultures and mediated by social norms and trust”.

Political stability, a sound currency representing a reliable store of value and medium of exchange, independent courts to resolve disputes, effective mechanisms to deter and punish corruption: these all help provide the essential foundations on which a market economy can flourish and grow and command public trust.

And of course these foundations are made possible by governments and by parliaments – in other words by effective, but limited, state action. Indeed, many of the things upon which businesses rely – limited liability, patents, copyright, enforcement of contracts – are embodied in law.

Over the centuries, as trade and markets have grown, governments have been at their most successful in reforming and renewing capitalism when they drive effective competition and recognised the social dimension of free enterprise.

We saw that with the impact of the Factory Acts of the mid-nineteenth century and in the trust busting drive of Teddy Roosevelt in the United States.

Roosevelt’s concern was not with big business per se – rather, he wanted to act to enforce what he termed a “rule of reason” on companies that grew through unfair practices rather than through reasonable means.

Today we are acting with measures such as the proposed digital services tax, our work to implement the Taylor Review, our push for regulators to do more to protect vulnerable consumers, and our legislation to outlaw the practice of unscrupulous freeholders charging onerous ground rents.

I cannot emphasise hard enough: these reforms are about restoring the reputation of the free market system by demonstrating that it can and it should work for everyone.

This is not a task that government can undertake on its own.

Part of the reason why the Government is responding is that companies themselves do not always act in a way that benefits the public good or delivers for working people.

But increasingly, I sense that businesses are willing to rise to the challenge of strengthening faith in capitalism. Working with Jeremy Wright, I have introduced ways to use the Government’s buying power on public procurement to drive social value and promote a more diverse market…

… and I have been heartened by the welcome that those proposals have had from many of the Government’s major suppliers.

But there are habits too that need to change. The detailed information now held about consumers can be used by suppliers both for and against customers.

Consider the loyalty penalty – where consumers who stick with their suppliers find themselves placed on the highest tariffs and actually end up subsidising other consumers.

The Government has acted to stop this behaviour in the energy sector and we are willing to act in other markets too to make them work for people.

The increased shareholder activism that we have encouraged in recent years, especially around executive pay, is also a vital element in renewing the public standing of free enterprise.

Scrutiny by shareholders of the decisions of companies is making a real difference.

It was after all the vocal opposition of shareholders that persuaded Unilever to abandon its plans to make Rotterdam its HQ.

And it was condemnation, not just from politicians or even from campaigners but ultimately also shareholders, that led to the departure of Persimmon’s chief executive following the controversy over his bonus payment.

By encouraging stewardship, active and diligent shareholders can improve the reputation of capitalism and I believe have a responsibility so to do.

It is not enough to fix broken markets – we have to fix public perceptions of them too.

We have to do so in a way that recalls the Prime Minister’s first speech on the steps of Downing Street – reaffirming the Government’s commitment to championing responsible capitalism and asking businesses for their part to accept their share of social and moral responsibility.

So we should celebrate businesses that create wealth and provide jobs and livelihoods in communities across the country…

We should drive effective competition – removing barriers to entry, making sure our competition powers are fit for purpose to regulate digital markets, and promote innovation.

We should be clear about our expectations of businesses because public support for their licence to operate depends how they act.

I think these are the steps that will help to break this paradox of capitalism.

Business done right is a force for good.

The best businesses play a highly positive role in society, not just by reacting to social or environmental problems, but by driving innovation and delivering products or services that meet consumer needs.

The best businesses – whether that’s manufacturing or finance or technology – lead the way in putting social and environmental impact at the heart of what they do.

The best businesses also lead the way on promoting diversity, tackling injustices, and encouraging talent regardless of people’s background.

By taking these steps we can help raise standards, stimulate investment and drive long-terms returns, and continue that improvement in living standards which has been free enterprise’s greatest achievement.

Companies acting more responsibly and markets working more competitively are the twin pillars of restoring trust in those free markets.

Thank you very much.

David Lidington – 2018 Speech at the Stock Exchange

Below is the text of the speech made by David Lidington, the Chancellor of the Duchy of Lancaster, at the London Stock Exchange on 24 October 2018.

Well thank you very much indeed for the invitation to open trading today and to mark this, the first, the inaugural, and I’m sure by no means the only or the last, London Stock Exchange Group’s cyber security conference.

We’ve got every reason in this country to be proud of the United Kingdom’s position at the front of the global digital revolution – driving our prosperity and enhancing our national security. We have seen a rise in the number of new cyber technology companies, right across the UK, who are helping to keep some of our biggest enterprises secure.

But of course, with that opportunity comes risk. We’ve also seen a significant increase in malicious cyber activity globally – both from hostile nation states and from cyber criminals. And only last week The National Cyber Security Centre reported that it is defending the United Kingdom from around 10 significant cyber attacks every week.

And that’s why cyber security remains a top priority for the government and why, two years ago, we launched the National Cyber Security Strategy.

At the very heart of the government’s response was the creation of the National Cyber Security Centre, bringing together the best intelligence and expertise. Right here in the City, the NCSC’s valuable partnership with the Bank of England and its suppliers is helping to build cyber security into the heart of a number of next generation systems. And I am delighted to announce this morning, that Faster Payments – now called Pay.UK – will be the latest scheme to benefit from this collaboration. It will ensure that every payment processed in the United Kingdom is done so safely and securely.

The financial sector has, for a long time, recognised the cyber risk posed by criminals and by states, and I know that financial companies routinely considers cyber security as part of an overall approach to business risk.

In fact, we in government have taken best practice from the financial sector. We’ve launched the GBEST scheme, for government, based upon the sector’s CBEST model. And this will improve government systems to identify and to act against sophisticated and persistent cyber attacks.

And I think the finance sector in the UK should be commended for the initiatives they have taken and the standards they have set.

But the government’s latest Cyber Security Breaches survey showed a significant proportion of companies overall in our economy are still not adopting the basic cyber security precautions that are needed. More than two in five businesses identified breaches in the last twelve months. Despite that, two thirds of FTSE 350 boards say that they have had no training in how to deal with a cyber incident.

There is still a lot more to do – and our ability to build the necessary resilience in the face of these challenges, relies on the strength of our collective action and expertise.

Now last week, I really enjoyed being at UK Finance, and it gave me great pleasure to give the government’s full backing to a new initiative to further cement the growing partnership between industry and the public sector. Early next year, we will establish the Finance Sector Cyber Collaboration Centre. This will build on existing industry expertise and exploit the NCSC’s Industry 100 scheme, it will be led by UK Finance in alliance with 20 financial institutions.

As government, we recognise that cyber security is everyone’s responsibility. We must learn from – and support – one another. For example…

…By taking part in our annual FTSE 350 Cyber Governance Health check – which is now open – you can benchmark the cyber security of your organisation against your peers and understand where you can improve your resilience to cyber attacks.

And I believe our efforts are bearing fruit. The UK’s cyber security industry is making an enormous contribution and is generating more than £5 billion to our economy.

It benefits from strong support from government, including specialist expertise and world leading academic institutions which are providing much needed access to funding, targeted support and also testing facilities. There has never been a better time to invest in our high-quality and home-grown cyber security start-ups and emerging businesses – there are now more than 800 of those across the UK.

Those businesses, supported by the government’s Industrial Strategy, provide world leading products and services to buyers right across the world – injecting innovation into our economy to build a UK fit for the future.

We consider it vital that all organisations should embrace and embed cyber security, from the boardroom down. This isn’t only about minimising operational, financial and reputational risk. Building resilience amongst employees and customers can also be a catalyst for far greater change.

That’s why I will be meeting a number of FTSE 350 Chairman to discuss how the government’s new Board Toolkit will help you better understand cyber risks and also to seek the ideas of business leaders on how to make our nation more resilient.

So, to look ahead to the challenges and opportunities of the future, I look forward to continuing to work together with you in the financial sector, and business more widely, to protect both our national security and our joint economic prosperity.

David Lidington – 2018 Statement on the Infected Blood Inquiry

Below is the text of the statement made by David Lidington, the Chancellor of the Duchy of Lancaster, in the House of Commons on 18 October 2018.

On 24 September, I attended the commemoration that preceded the preliminary hearings of the infected blood inquiry, and watched the moving and powerful testimony from those infected and affected by the infected blood scandal. The commemoration brought home the terrible human cost of this tragedy, and emphasised to me the importance of this inquiry, to get to the truth of what happened, and provide the answers that the people infected and affected so desperately need.

When the public inquiry was launched in July this year, I deferred making a decision on whether to appoint a panel to sit with Sir Brian until he was able to take the view of core participants. Sir Brian Langstaff wrote to me this week following the preliminary hearings, and has advised me that he has now done so, and there has been no demand for a panel. In the place of single experts, sitting as panellists, Sir Brian is establishing expert groups to provide openness and transparency across a range of truly expert opinion. He recommended that I should not appoint co-determining panel members. I accept his recommendation.

In his letter Sir Brian also called for action in relation to financial and psychological support for the affected and infected. The Government will consider those comments and Sir Brian’s recommendations carefully and will respond as soon as possible.

The Cabinet Office takes seriously its role as sponsor to the infected blood inquiry and is determined to do all it can to support the inquiry with its work. Regrettably, an administrative error earlier this year has come to light, which had delayed the circulation of an instruction to Government Departments about the retention of records. I can reassure the public that this has resulted in no actual harm, but it is an error for which I apologise to the inquiry, and most importantly, to the people infected and affected.

The facts are these: Cabinet Office officials circulated a Government-wide notice on 3 April this year, instructing Departments to preserve all information relevant to the infected blood inquiry. A further, more comprehensive message was issued to Departments by the Cabinet Office on 11 June.

However, following a query from the inquiry about the notice, Cabinet Office officials discovered that the 3 April email containing the retention notice did not reach its recipients, due to the failure of the collective IT address used. My officials have provided a detailed explanation to the inquiry which will be published on the inquiry’s website.

Since the error was discovered, all relevant Departments and relevant areas within Departments have worked urgently to confirm that they have not destroyed any documents relevant to the inquiry during the period ​between 3 April and 11 June. Because of their size and the complexity of some of the records they hold, HM Courts and Tribunals Service and the Legal Aid Agency are continuing to work to provide this assurance and have committed to doing so as urgently as possible.

The Department of Health and Social Care put in place a moratorium on the destruction of historical records as soon as the inquiry was announced in July 2017. No material damage has resulted from this administrative error, but I am very sorry it occurred, and I would like to reassure the public that the Cabinet Office will learn the lessons from this to avoid such an error occurring in future.

David Lidington – 2018 Speech at UK Finance Annual Industry Dinner

Below is the text of the speech made by David Lidington, the Chancellor of the Duchy of Lancaster, on 18 October 2018.

Ladies and gentlemen, thank you very much for the invitation and thank you for that welcome.

I am deeply conscious I am interposing a speech between you and the opportunity for food and drink, and also looking to my right, presumably for the karaoke for which this sector is renowned at the end of the evening. I will look forward to the FT’s music correspondents giving the full details tomorrow morning.

I want to start by being frank with you –

This country is facing some of the most complex social and economic challenges of any in recent history.

But those new challenges also bring with them new opportunities. And this sector and this country have track record of seizing those opportunities and making the most of them.

Many of you will be agog to know the very latest on what’s going to happen at the European Council in Brussels this evening –

Apart from the fact I suspect they won’t have anything like as good a dinner as they will have here –

The Prime Minister will welcome the progress made in recent weeks on the Withdrawal Agreement and the political declaration on the future relationship.

She will reiterate the need for the backstop to be temporary, and for this condition to be built into the agreement we negotiate with the EU.

And she will emphasise our continued commitment to getting a good deal in our mutual interest that respects the economic and constitutional integrity of both the United Kingdom and the European Union.

Getting that deal is something which I, having spent six years as Europe minister in the recent past, know is important for all sectors of the UK economy, including the financial services sector.

And I believe now is the time for a clear-eyed focus on the few remaining but critical issues that are still to be agreed.

I want to make it very clear that a deal is what we want. It is what we are working with every scrap of energy that we can muster towards achieving. And it is what we believe that we can and will secure at the end of the day.

And I think too that throughout the challenges ahead, whether those that arise out of our departure from the European Union or those that are posed generally by global competition and by the accelerating pace of technological change, the Square Mile will continue to display the characteristics that have helped make London the world’s pre-eminent financial centre.

That is certainly my view and I know it is the view of my colleague John Glen, the Economic Secretary, who is also with us this evening.

What strikes me – whenever I come to the City, whenever I talk to people – is that for centuries the City has been a place of innovation…

… of adaptability and resilience…

… and of problem-solving.

There are countless examples of those qualities that you can find shining through the fabric of the history of this City of London.

Bob, you listed in your earlier remarks a whole host of examples of how over the past 12 months alone this City, and this sector within the City, have demonstrated those qualities of adaptability, resilience and problem solving.

You mentioned at one stage what you have been doing in this sector over cyber security. Just two days ago I launched the second Annual Report of the National Cyber Security Centre.

One thing that I announced then is that the Government is going to copy the best of what you have done – the CBEST approach and standards that have been pioneered by the United Kingdom’s financial services sector.

We are going to adapt a GBEST approach to ensure that government and government suppliers are also working to ensure that when people do business with the UK of any kind, they know that this will be the most cyber secure business environment of any other in the world.

You look at the history of the City, and I can point to examples of those qualities of adaptability and problem-solving – at least two of them in this building itself.

You have probably already admired the magnificent 170-foot king post timber roof of this space, the so-called ‘Porter Tun’.

But you might not have yet a story about some early 19th century porter in the vaults lying beneath our feet.

The founder of this brewery, Samuel Whitbread, wanted to save money by switching from storing the porter in casks to a bulk storage system.

He soon found himself in difficulty.

The surviving documentation shows that the liquid ran through the walls “as through a sieve”.

Fortunately two of the great men of the day, Josiah Wedgwood and John Smeaton, applied their minds to the challenge in the great tradition of the City.

Now, that tradition of course is not solving problems through the rapid consumption of alcohol –

They didn’t drink it all themselves…

But what Wedgwood and Smeaton did was use their engineering expertise to help the Brewery go from strength to strength.

You might say they had successfully consigned the problem of uncontrolled leaks to the past.

Something that I am trying to persuade the Cabinet that they should adopt as well.

Government and business working together
But that anecdote exemplifies in a way the qualities that have helped the City prosper…

… and helped our financial services sector create opportunities for people around the country, too.

And it’s particularly important, at a time when in the years since 2008 we have seen an ebbing of more general public confidence and trust in UK finance, in the City, even in the free enterprise system itself, that we do ensure that we both speak about and demonstrate what this sector does for the prosperity and security of people in every part of this nation.

Roughly two-thirds of the 2.2 million people who work in the financial and related professional services sectors are based outside London.

And across all the major sectors the UK financial services industry is highly developed.

We’ve got the largest asset management sector in Europe…

… we have the largest banking sector in Europe…

… and the largest insurance sector in Europe, too.

All told, last year the UK was the largest net exporter of financial services in the world, with a trade surplus of £61 billion.

I think our dynamic financial services sector should be the beating heart of a free market economy…

… An economy that helps everyone in our country realise the opportunities ahead.

That includes creating new opportunities for small businesses, mutuals, charities, co-operatives and social enterprises.

We want to nurture vibrant, healthy, innovative, competitive and diverse marketplaces.

And so, I know, do you, representing UK finance business.

Financial services is a key part of our economic infrastructure.

It generates wealth…

… it creates jobs up and down the country…

… and provides tax revenue to support our vital public services.

That’s why this government is committed to listening to your views and engaging with you closely on a range of issues.

Working together we can help back businesses to create jobs while ensuring that they also play by the rules.

Working together we can build the homes people need so that everyone can have a safe, decent place to live.

And working together we can help people to achieve their true potential – whether that is about enable people to develop the skills they are going need in an economy that is being transformed every day by digital technology…

… or whether it is about ensuring everyone has access to the kind of opportunities that most of us in this this room sometimes take for granted.

Collaborating on the domestic financial services agenda
All of us in this room, for example, can agree on the importance of affordable credit.

Regardless of their background or income, it’s right that everyone should have access to useful and affordable financial products and services.

The government is committed to addressing this issue…

That is why that subject formed part of the work of the Financial Inclusion Policy Forum, established earlier this year, which brings together industry, the third sector, ministers and the regulator.

UK Finance has worked alongside Toynbee Hall to co-chair the Forum’s subgroup which is exploring ways to increase the availability of affordable credit to all consumers.

That important work highlights how, coming together, we can explore solutions to the difficult challenges facing the most vulnerable men and women in our society.

Our collaborative efforts can support consumers…

… and they can protect them, too.

UK Finance data shows there were more than 30,000 cases of automated push payment fraud in the first half of 2018.

Both individuals and micro-businesses are being harmed by these kinds of scams.

We do need to take them very seriously…

… That’s why I’m delighted that requirements for consumer protection and the principles for reimbursement for consumers who fall victim to them have been developed by a joint Steering Group of industry and consumer group representatives.

And on behalf of the government I want to say a big thank you to UK Finance for your work in providing the secretariat for that Steering Group.

The publication of its draft voluntary code is an important milestone and we look forward to hearing responses to its consultation in due course.

It’s right that industry takes the necessary steps to protect consumers against this kind of fraud…

… and so we welcome UK Finance’s work in helping to develop it.

There are many other examples I can give of collaborative working:

UK Finance’s work with the Post Office to raise awareness of the Post Office’s services that allow banking in person to continue,

… or UK Finance’s integral role supporting our response to economic crime, including through the Joint Fraud Taskforce, the Joint Money Laundering Intelligence Taskforce and seconding staff to help build the new National Economic Crime Centre…

… or the very welcome engagement of UK Finance and others across the financial services sector as we draft the necessary legislation for onshoring.

Financial services and Brexit
As I have said at the start – and as I say again now – we recognise how important it is that we get a good Brexit deal, and that firms and their customers do not face a cliff-edge at the point of our exit from the European Union.

That is what the entire Cabinet is working towards, and we are committed to making further progress in negotiations.

But it’s also right that we ensure that we are prepared for any and all scenarios, just as you would also expect of any responsible business.

I want to say how grateful I am to UK Finance for your input into this process – your expertise really is invaluable.

But I also want to say that although there has been escalating excitement about the possibility that a deal with the European Union would prove elusive…

… the growth in newspaper column inches does not reflect an increased likelihood of no deal.

As the Prime Minister has said:

This is the time for cool, calm heads to prevail.

I believe her pragmatic proposals which she has put forward are in the economic interests of both sides – of businesses and of consumers in all 28 countries of the European Union.

We are asking our European partners to respond with ambition and with urgency…

… and to concentrate with us on completing this task in the interests of all our citizens.

We have had good working-level discussions with the European Commission on our proposals for the future relationship in financial services.

And what we have proposed in our White Paper is logical.

Our financial markets are deeply integrated.

That indisputable fact underlines why the bilateral treaty agreement we are putting forward should be bolstered with regulatory dialogue and supervisory cooperation.

We should recognise the autonomy of both sides in decisions relating to market access and the rulebook.

And the UK government is proposing a framework for financial services that will provide stability for the EU-UK financial ecosystem…

… preserving mutually beneficial cross-border business models and economic integration…

… and stabilising the current EU equivalence framework through a transparent and de-politicised process…

… for the benefit of businesses and consumers in both the United Kingdom and the EU 27.

Realising this means achieving that deal with our European partners that we remain committed to working towards.

Conclusion
The United Kingdom has always been both a European country and also one which has global interests and a global perspective.

And as we prepare to leave the European Union the United Kingdom is going to need to focus with even greater energy and determination on the opportunities to be a greater global force, forging new relationships, stronger trade links and working to increase global security.

My colleague John Glen put it this way:

the commercial instincts of this country have been honed and sharpened over the centuries…

… and we fully expect those instincts to prevail as we prepare to leave the European Union.

The innovation, the resilience of the financial services sector have been demonstrated time and time again in our national history.

Plague, fire, and blitz have not stopped the City in the past.

And while the markets that the City serves and the workforce that serves those markets have changed beyond recognition…

… I believe we can be certain of one thing:

It will be the City’s great traditions of resilience, adaptability and innovation that will continue to help it and the entire finance sector to grasp the opportunities ahead.

Thank you very much indeed.

David Lidington – 2018 Statement on the Infected Blood Inquiry

Below is the text of the statement made by David Lidington, the Chancellor of the Duchy of Lancaster, in the House of Commons on 2 July 2018.

On 8 February 2018, I announced the appointment of Sir Brian Langstaff to chair the infected blood inquiry. From the outset, Sir Brian has been clear that he is determined to put people at the heart of the inquiry and to ensure an inclusive and transparent process.

Sir Brian and his team conducted a public consultation on the proposed terms of reference for the inquiry, which ran from 2 March to 26 April. They invited contributions via an online questionnaire, email, written correspondence and telephone. The inquiry team also held 15 meetings with groups and individuals across the UK, and Sir Brian is keen for the inquiry to continue to do that as it moves forward.

The inquiry received almost 700 responses to its consultation and Sir Brian, having reflected on those consultation responses, wrote to me on 7 June to advise me of the outcome and of his recommendations for the terms of reference. The terms of reference are comprehensive and reflect the key points made during the consultation.

The geographical scope of the inquiry is UK-wide. The inquiry will look at issues relating to the whole of the UK, as well as regionally. Sir Brian expects the inquiry team to hold regular meetings across the UK. I have therefore consulted, as I am required to do under the Inquiries Act 2005, with the devolved Administrations of Scotland and Wales and, in the absence of a Northern Ireland Executive, with my right hon. Friend the Secretary of State for Northern Ireland who, in turn, consulted the permanent secretary of the Northern Ireland Department of Health. The Governments of Scotland and Wales, and my right hon. Friend, were content with Sir Brian’s recommendations, and I am happy to accept his recommendations without amendment. I have written to Sir Brian to confirm this.

The terms of reference have been published and deposited in the Libraries of both Houses today. The inquiry can now formally begin its work; it will start today—2 July 2018. Sir Brian proposes to use groups of experts to assist the inquiry. Those groups would cover all the material fields relevant to the inquiry. Their evidence would be public, transparent and subject to scrutiny. People affected, and other participants to the inquiry, will be able to propose experts and put forward questions to the expert groups.

During the inquiry’s public consultation, views were expressed both for and against the appointment of additional panel members. Some, noting the complex and difficult issues to be examined by the inquiry, wanted a panel of many experts to assist the chair. It is Sir Brian’s view that his proposal for expert groups will achieve the objectives of those who have been in favour of panel members by providing legitimacy and transparency, a diverse range of expertise and, importantly, speed. Sir Brian’s view is that experts will be able to progress work in parallel in a way that co-determining panel members could not and that, very importantly, everything the expert groups will do will be public. Sir Brian plans now to discuss this proposed approach with those who will most centrally participate in the inquiry, particularly survivors and the groups representing them, and to ask ​them whether, in the light of the proposed approach, there remains any significant wish for him to be joined by a decision-making panel. Sir Brian has asked me to defer a decision on panel members until core participants have been appointed and have had the opportunity to consider the proposed approach.

I am aware that when my right hon. Friend the Member for Ashford (Damian Green) met people affected before Christmas last year, many supported the idea of the chair sitting alongside other panel members. I have not lost sight of that, but I think it is only right that I allow Sir Brian time to consult core participants. I therefore do not propose to appoint other panel members at this time, but I will consider the issue once core participants have had an opportunity to look at Sir Brian’s proposed approach. Of course, section 7 of the 2005 Act allows me to make further appointments to the inquiry panel during the course of the inquiry, with the consent of the chair. Speed is of the essence, and I have asked Sir Brian to report back to me as quickly as possible; I will then make my decision on panel members.

Many thousands of people from across the United Kingdom have been affected by this terrible tragedy. Sadly, a number of those affected have died since the inquiry was announced. One of the clearest messages from the inquiry’s consultation was the need for speed. In his letter to me, Sir Brian noted that one respondent to the consultation had said:

“I really hope this Inquiry does not drag on as I would like to live long enough to see the result”.

It is extremely important that the infected blood inquiry can complete its work as quickly as a thorough examination of the facts allows, and this is something that Sir Brian and his team are very aware of.

This inquiry is a priority for the Government, and I have assured Sir Brian that the Cabinet Office will provide all the resources and support that the inquiry needs to meet the demanding timescales that are essential in order to meet the expectations of people affected by this tragedy, who have already waited so long for answers. The inquiry will have much to do over the coming months, and I am sure it will waste no time in getting started. The first stages of the inquiry will be critical for obtaining evidence, including witness statements from people who have been infected and affected. The inquiry will use this evidence to help to uncover what happened and why. It will hold its preliminary hearings in September at Church House, London, where core participants will be able to set out their priorities for the inquiry. My exchange of correspondence with Sir Brian and the full terms of reference have been placed in the Libraries of both Houses, and I commend this statement to the House.

David Lidington – 2018 Speech to CBI Scotland

Below is the text of the speech made by David Lidington, the Chancellor of the Duchy of Lancaster, to CBI Scotland on 11 May 2018.

Thank you Paul for that kind introduction – and thank you everyone for that very generous welcome.

Before I start, and on behalf of everyone here, can I pay tribute to Paul, your tenure with the CBI, and for everything you have done on behalf of the thousands of businesses across the UK.

Leading this organisation through two general elections and a referendum on our membership of the European Union would be a tall ask for anyone, but you have kept the CBI at the forefront of our national debate – and it is fair to say you have kept the UK Government permanently on our toes.

And so for that I thank you, and wish you all the success in the future.

It is a pleasure to be with you today, and to have the great privilege of addressing CBI Scotland. And it is also a pleasure to be back here in Edinburgh.

Whenever I visit this great city, I am constantly reminded of the weight of history that is all around us.

Edinburgh isn’t simply a thriving, modern capital within our United Kingdom.

It is the cradle of so much that our country, and indeed Europe, can celebrate in terms of philosophy, literature, architecture, poetry and political thought.

It is the birthplace of the Scottish Enlightenment, a period in our history when pragmatism, reason and freedom of thought rose to the fore.

And so it is the proud home of many of our finest intellectual figures, such as Adam Smith, whose statue stands proudly just a few streets away from here, and whose legacy continues to remind us of that virtue of choice that is so integral to our economic way of life and wellbeing.

That is what I want to touch on very briefly with you this lunchtime: the importance of making choices – not just in the economic sense, but in the political sphere too.

The choice to leave the EU

Because politics is ultimately about having preferences and making choices.

Left or right; conservative or socialist; liberal or protectionist; Unionist or Nationalist; I guess Hearts or Hibs; even Celtic or Rangers – it is the virtue of having different choices which makes democracy something we must always cherish and respect.

I am sure there are many of you here who voted to Remain in the European Union nearly two years ago. As many of you will know, I also fought hard for such an outcome.

But on June 23rd 2016, the British people made a clear choice to leave the European Union and forge a new and different path for ourselves in the world.

Now it is incumbent all of us, both individuals and governments, not just to accept that choice as democrats – and not merely to understand why the British people made that choice – but to minimise the risks and seize the opportunities that this choice presents.

Now there will be those here in this room who, for perfectly understandable reasons, have concerns about the challenges we face – and want nothing more than certainty and clarity as negotiations proceed.

But you should be in no doubt of the resolve of the UK Government to respond to those concerns and deliver a Brexit that prioritises certainty and clarity for businesses and consumers in all four parts of our union.

Update on negotiations

And as negotiations proceed, that is precisely what we are doing.

We have already agreed a fair deal on citizens’ rights, ensuring that EU citizens in the UK and UK nationals can get on with their lives broadly as they are now.

We’ve agreed a good financial settlement for British taxpayers, made in the spirit of our future partnership with the EU.

We’ve agreed a Joint Declaration with the EU that makes clear our mutual determination to preserve the Common Travel Area, avoid a hard border between Northern Ireland and the Republic of Ireland, and uphold the totality of relationships embodied in the Belfast Agreement, both East-West and North-South.

And we’ve reached agreement with the EU on an implementation period, providing that certainty and clarity for people and businesses so they will only see one change when we enter into a new relationship with the EU in the future.

So while these are real achievements we have made in the interests of businesses and individuals across our country, we must now look to build our future economic partnership with the European Union.

In her speech at Mansion House in March this year, the Prime Minister set out her aim for a deep and comprehensive partnership in which:

trade between the UK and the EU would be as frictionless as possible

UK regulatory standards remain at least as high as the EU’s

and in which there is no hard border on the island of Ireland

She also made clear that one important objective in building that partnership would be to seek a new customs arrangement with the European Union.

At Lancaster House in 2017, the Prime Minister said that we will be leaving the EU’s customs union, its Common Commercial Policy, and the Common External Tariff.

But she also said that we do want to have a customs agreement with the EU. As she said, we have an open mind on how: it is not the means that matter, but the ends.

And that is why last year, we set out two potential options for what this new customs arrangement might be.

Option one was a customs partnership between the UK and the EU, in which the UK would mirror the EU’s requirements for imports from the rest of the world, applying the same tariffs and the same rules of origin as the EU for those goods arriving in the UK and intended for the EU.

The other option was a highly streamlined customs arrangement, in which we would jointly agree to implement a range of measures to minimise frictions to trade.

This would include waivers for goods moving between the UK and the EU, “trusted trader” schemes, specific exemptions for small businesses, and online systems – such as for customs declarations to be made far from the border, as is already the case with VAT declarations when VAT regimes between the Republic of Ireland and Northern Ireland are different.

But whatever option we are discussing, our objectives remain the same:

for trade at the UK-EU border to be as frictionless as possible

with no hard border between Northern Ireland and Ireland

and for us to conduct our own trade policy and sign free trade agreements that will benefit businesses and consumers here in Scotland, as well as those in England, Wales, and Northern Ireland too

And I am pleased to say that, despite what you may have read, this work is now nearing completion.

So as negotiations continue, these are choices that will have the best interests of Scottish businesses and consumers at their heart, and the need to provide clarity and certainty as soon as possible for you all.

Importance of the UK common market

Because this is a long road that has many different twists and turns, as we together journey out of the European Union.

But as negotiations continue on that future deep and special partnership we all want to see, we must not forget the need for certainty and clarity here at home as well.

It is why the UK has a responsibility, through our modern industrial strategy, to improve living standards, spread prosperity and promote growth around all parts of our country, and ensure we are match fit for the next wave of technological change that is fast approaching.

For example, our Industrial Strategy Challenge Fund is providing £795 million for potential innovators, and we are working to ensure as many Scottish bidders as possible are successful.

And we are investing in new City Deals – which have been committed to or agreed for all seven of Scotland’s cities – as well as a Borderlands Growth Deal to help secure prosperity in southern Scotland. We have also opened formal negotiations for the Ayrshire Growth Deal.

But it is also why the UK has a deep-seated responsibility to maintain the integrity of our union.

When I spoke in North Wales earlier this year about the value of our union, I emphasised the importance the UK Government places on preserving the common market of the United Kingdom – what many of you may refer to as the “internal market” or the “UK single market” that comprises Scotland, England, Wales and Northern Ireland.

I also emphasised why it is so crucial that our businesses and consumers face no new internal barriers to conducting their business on the day of our exit in March next year.

For it is only by maintaining the coherence of that common market – and keeping barriers to trade within it to an absolute minimum – that businesses and consumers in all parts of our union can continue to benefit.

Preserving that common market is exactly what the EU Withdrawal Bill, currently making its way through Parliament, will do.

It will make sure that, as we carry out the delicate process of transferring European Union law back onto the UK statute book, we do so as smoothly as possible…

The current regulatory and legal framework will remain in place, but on a UK rather than an EU legal footing.

If and when we wish to move away in future from the current rules, we can do so in a considered and deliberate fashion, taking account of consultation with business.

So it will make sure that when we leave the European Union in March next year, we do so in a way that avoids a damaging cliff-edge for businesses, firms; factories, industries and consumers alike – so that businesses have certainty from day one of our exit.

And on devolution, the Bill will make sure that, as this process is carried out, we retain the ability to keep common and temporary UK frameworks where necessary, while we work on the long term solution – such as one set of package labelling and hygiene rules, instead of four different ones.

The Bill respects the devolution settlement – but stops short of giving any part of the UK a veto over that temporary mechanism.

This has always been a red line for us.

For if one part of the UK has a veto over the ability to establish a common framework across the rest of the UK, it could be used to undermine this common market we all, everyone in this room, prospers from.

And the message we have from business is that the UK common market is vital to their growth and prosperity.

For Scottish businesses trade four times as much with the rest of the UK as they do with the EU.

And as businessmen and women you want to be sure that your factories in Paisley and farms in Perthshire will be able to continue selling their goods freely to customers in Preston and Swansea and Londonderry.

And not only will the temporary preservation of common frameworks guarantee certainty for businesses trading within the United Kingdom – it will mean that, with a clear set of commonly-recognised standards, we can agree those new trade deals with the global growth markets of tomorrow as well.

Indeed, when I visited China just last month, I saw first-hand how hard our network of embassies around the world work to promote both UK and Scottish exports, such as the finest Scotch Whisky, of which 61 per cent of exports go to countries outside the EU.

I even had the pleasure of seeing the First Minister during my visit to China, who was also using the network of UK embassies to promote Scottish goods overseas.

And just this morning I was visiting Diageo here in Edinburgh hearing about the breadth of ambition the industry has to reach new and emerging markets and build on the strength of the internationally renowned quality of Scottish food and drink.

And during my last visit to Scotland in January, I also visited a Marine Harvest factory in Rosyth, specialising in salmon sales and learned that not only do they sell to every part of the UK, but export the fish heads to China and the skins to Thailand, where they are made into crisps.

That is why having a successful domestic market and competitive global markets are complementary to one another, and why the UK Government is committed to delivering directly for Scottish businesses and consumers.

Put simply, respecting and preserving the United Kingdom common market is to uphold one of the fundamental expressions of the constitutional integrity that underpins our existence as a union.

But put even more simply, any attempt to undermine that common market would represent a self-inflicted blow to the thousands of firms who owe their prosperity to its success.

Clause 11 negotiations

Now I am well aware from the conversations I have had with Scottish and Welsh businesses that what they care about is what all this means for business – and whether it provides the certainty they need.

That is why all of us – Westminster, Cardiff and Holyrood – have worked hard to identify only those absolutely essential areas where we agree that UK-wide frameworks are needed.

And of course it is worth underlining that we already have UK-wide frameworks in all these areas right now.

Our approach as we leave the EU however, is to see the vast majority of powers returning from Brussels bypass Westminster entirely.

Indeed, we have moved a considerable distance in the spirit of compromise and collaboration so as to ensure we reach a deal with the Scottish and Welsh Governments that not merely respects the devolution settlements and improves upon them, but also upholds the Sewel Convention and provides the certainty that businesses require.

That is why I was pleased that the Welsh Government, in this spirit of pragmatism, recently agreed to our approach, and to recommend the Welsh Assembly give legislative consent to the Withdrawal Bill.

As the Welsh CBI, the Federation of Small Business in Wales, and the Farmers Union of Wales have all made clear, this deal is very good not only for the Welsh economy and its people, but for the whole of the UK too.

And as the First Minister for Wales himself said this week: “the nature of an agreement is that you come to ground that you believe to be common ground”.

I am glad that thanks to the joint work of the three governments there is now far more common ground between all.

The door is still open

But it is also why it is disappointing that the Scottish Government still does not feel able to sign up to our proposals and deliver that certainty for businesses.

Of course, it is now for the Scottish Parliament to decide what view it wants to take on the compromise we have reached, and that we have now agreed with the Welsh Government.

So that is why I say to the Scottish Government – and to the Scottish Parliament – the door is still open.

At a stroke, they can join the Welsh Government – who have also put so much into getting us to this stage – and recommend to the Parliament here in Holyrood that we should end any lingering question of legal uncertainty for businesses in all parts of the UK.

Indeed, just a couple of weeks ago, the Food and Drink Federation Scotland, Scottish Bakers, and the Scottish Retail Consortium all emphasised the importance of the UK common market.

How it benefits Scotland’s businesses enormously by lowering costs and increasing efficiency and how it also benefits Scotland’s consumers by providing more choice and keeping prices down.

And as the Scottish Government themselves have agreed, it makes sense for there to be frameworks applying across the UK in some areas.

But no matter what the Scottish Government decides, I want to reiterate that the UK Government is committed to acting in accordance with the Intergovernmental Agreement that – even now at this late stage – is open to the Scottish Government to sign up to.

Scottish businesses can see this in black and white: our Intergovernmental Agreement is public for all to see.

You can have that certainty and clarity that we will work to agree the approach needed to protect our vital common market, and that we will respect – in full – the devolution settlements as we do so.

Conclusion

So as we all face choices, the Scottish Government also faces a choice.

But I am confident that, if we work together, we can and will forge a path that fully respects the democratic choice the United Kingdom made two years ago while maximising clarity and certainty wherever we can for our families and businesses not just here in Scotland, but across our whole country.

For our union is strongest when each of its constituent parts is strong and working together.

As I have said before, the unity that exists between our four nations gives us a scale of ambition that none of us could possess alone.

But this ambition can only be realised if we do work together, and make those choices that are truly in the national interest.

For together, we are a union that is greater than the sum of its parts.

A country that can remain a strong, global leader.

A United Kingdom at home.

And an active, force for good in the world.

Thank you very much.

David Lidington – 2018 Speech on Brexit

Below is the text of the speech made by David Lidington, the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, in 26 February 2018.

It is a pleasure to be with you all this afternoon in Broughton and I want to thank Airbus for their hospitality today.

This company is a great success story for Wales, for the United Kingdom and for Europe: the biggest private sector employer here in Broughton, but with two-fifths of its workers commuting each day from homes in England and part of a European enterprise now operating in five continents and employing people from 130 different nationalities. Airbus is a vivid example from the business world of how diversity in unity can make for global success.

Those same characteristics have defined the success of the United Kingdom.

The different nations that make up our country have had a long, often uneasy history. The castles just a few miles down the road from here at Chirk, Holt and Caergwle remind us of ancient quarrels.

But the shared experience and solidarity of our four nations at times of great success and grave danger alike have come to represent one of the most powerful and enduring symbols of freedom, liberty and democracy anywhere in the world and the proudest citizen of Aberdeen, Plymouth, Coleraine or Broughton can take huge pride in also being part of the United Kingdom – a union greater than the sum of its parts.

And now, as we prepare to leave the European Union, preserving and strengthening that union of the United Kingdom matters more than ever.

As we negotiate a new deep and special partnership with our friends and neighbours in Europe and forge a new role for the United Kingdom in the world, we must work for a future that fosters wealth-creation, opportunity and innovation in every part of the United Kingdom, and which strengthens the sense of security, belonging and solidarity in all communities, building a country that really does work for everyone.

And we as a country are at a crossroads in our history.

We face a choice: a choice that represents the difference between a prosperous, secure nation that is united at home and stronger abroad, and a poorer country that is divided at home and a weaker player on the global stage.

Now let me be clear at the outset: this choice is not about whether we leave the European Union.

As many of you here will know, I voted and campaigned hard to remain in the EU – as did many people in this country.

But I recognise as indeed do our 27 partners that people in the UK took a democratic decision to leave the EU – and that is what we must now focus our energies on delivering, seeking to minimise the risks and to seize the opportunities.

So the choice is therefore not whether we leave, but how we choose to do so.

We could leave as a nation divided; a country split; an economy disjointed – struggling to forge a unified consensus on the way ahead.

But there are opportunities too – opportunities we can seize if we come together, unite, and develop into that stronger, global Britain which we can be.

There were many different reasons why people voted to leave the European Union in 2016.

But reflecting on that campaign, I think that above all else, people throughout this country sought to regain a feeling of control, not just control over our laws, but over our lives too, and the people we elect into office.

And when you talk to people on the doorstep, it’s clear that that vote expressed not just a rejection of membership of the European Union, but a demand to bring decision making and accountability closer to home, to restore a sense of belonging in communities, a feeling of connection between the elector and the elected.

So yes, we have to ensure, as we are determined to do, that Brexit means more powers going to the devolved governments and not fewer.

But I believe too that to renew that sense of connection between citizen and government, we need to press on too with our broader mission to devolve greater freedom, more power to act to cities, towns and counties in all parts of the United Kingdom. And I hope that the devolved governments will choose to take that approach too. After all, for someone in Broughton or Llandudno or Welshpool, Cardiff can seem as distant as London; from the perspective of Orkney, priorities may look very different from those of Central Scotland.

Our aim should be nothing less than to see our entire country coming together and having their voices heard. It means people here in Wales, as well as in Scotland, Northern Ireland and England – and it means our villages, towns cities and communities throughout the United Kingdom all having a voice too.

Our commitment to devolution

At the heart of the Conservative political tradition is both patriotism, loyalty to the special, shared union of the United Kingdom, but also a commitment not just to individual rights but to the vital importance of family and community, of village, town and county in enabling individual men and women to find meaning, value and fulfilment in their lives.

As Edmund Burke put it more than 200 years ago:

To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections. It is the first link by which we proceed to love of our country and of mankind”.

I suspect that most of us here derive our sense of who we are from many different sources – from our family, from where we live, perhaps from a sports club, choral society or community group that we support, in many cases from our religious faith, and of course from our nation.

And in the United Kingdom we know that there is no contradiction between being an ardent Welsh or Scottish patriot and being a committed supporter of the Union. If I needed any reminder of that truth, it was when the Secretary of State for Scotland was gloating to me about the rugby result on Saturday.

Looking back to the last century, I think – being honest – that my party was too slow to recognise that the increasing calls for devolution and decentralisation represented a genuine shift in public mood.

But I think if you look at our record in government in the last eight years demonstrates that we have got the message.

The two Scotland Acts, in 2012 and 2016, have made Holyrood one of the most powerful parliaments of its kind in the world.

City deals in Scotland – backed by more than £1 billion of UK Government spending – have now either been agreed or committed to for all of Scotland’s seven cities.

The Wales Act is delivering a stronger, fairer, more accountable devolution settlement for Wales.

City deals for Cardiff and Swansea and the future North Wales Growth Deal are supporting the industries and jobs of tomorrow.

The passage of English Votes for English Laws at Westminster means that MPs representing English voters rightly have the final say on issues which matter directly to them and their constituents.

We have created new combined authorities with elected mayors across England – putting power firmly in the hands of local people in the West Midlands, the West of England, Tees Valley, Cambridgeshire, Greater Manchester, Liverpool and Sheffield.

And this government will continue to strive to restore devolution in Northern Ireland, and will remain fully committed to the Belfast Agreement. We will continue to govern in the interests of all parts of the community in Northern Ireland, and to uphold the totality of relationships embodied in that agreement, both East-West and North-South. And we shall stand by the commitments in the Joint Report between the UK and the European Union that was agreed in December last year.

But while we can take pride in that record of decentralising power, we can and should go further to drive forward both the economic and the political regeneration of our country.

So we are working with local authorities to help them co-ordinate their own economic plans with our UK-wide national industrial strategy – bringing together local businesses and leaders to deliver growth, enterprise and job creation in every part of our country.

We are supporting combined authorities located around our English cities to adopt elected mayors, should they wish to do so.

We will bring forward a Borderlands Growth Deal – including all councils on both the Scottish and English sides of the border – to help secure prosperity in southern Scotland.

We will build on the future North Wales Growth Deal by also fostering opportunities between Welsh cities and the rest of the UK, for example by linking economic development opportunities in Cardiff, Newport and Bristol.

And we have committed to looking at a city deal for Belfast.

Our commitment to the union

Now at the same time, we are unapologetically committed to the constitutional integrity of the United Kingdom.

So, alongside those initiatives to bring more powers closer to the people, we are working to ensure that the institutions and the power of the United Kingdom are used in a way that benefits people in every part of our country.

For a country that not only has a shared past, but continues today to draw strengths from all parts of the union.

There are more than 31,000 UK civil servants are based here in Wales, including in our new UK Government Hub in Cardiff.

Eight out of ten goods lorries leaving Wales go to the rest of the UK, highlighting the importance of our United Kingdom wide market.

Bombardier’s factory in Belfast has a supply chain of 800 companies throughout the UK and Ireland, supporting thousands of high-skilled jobs.

It is from the Department for International Development’s joint headquarters in East Kilbride, Scotland that the ‘United Kingdom’s international work to vaccinate children against killer diseases, to educate girls and to provide clean water and sanitation to people who desperately need it is being driven.

And of course our base on the Clyde, home to thousands of shipbuilding jobs, is central to the UK’s defence capabilities.

Put simply: we are all more prosperous and more secure when we all work together for our common good as one United Kingdom.

Now leaving the EU presents many challenges for our centuries-old union story – and opportunities too.

And some want to use it as an excuse to loosen these ties that bind us together – even sever them completely. Such an outcome would leave every one of our four nations both weaker and poorer.

Why we need frameworks

The task before us isn’t an easy one, it is complex.

How do we allow greater control across England, Scotland, Wales, and Northern Ireland over the things that affect them separately – while preserving the things that affect us all collectively as we return powers from Brussels to the United Kingdom.

How do we ensure that a new wave of devolution delivers for the people of Scotland, Wales, England and Northern Ireland – but at the same time protects the essence of our union?

For a start, we have all – the UK government and the devolved governments together – agreed that we will need to have frameworks that break down which powers should sit where once they have returned from Brussels.

And that is a sensible and constructive approach – because these powers are not all the same.

Some are very obviously for the devolved governments and parliaments to exercise, and don’t need any involvement on a UK-wide basis.

For example, the devolved governments are best placed to manage the safety and quality of the water they drink, as well as looking after and caring for their natural environment.

At the same time, there are other powers that are yes for the devolved governments to shape according to their own needs or ambitions and where they don’t need legislation to underpin how what they do relates to the other nations of the UK, but where it would still be in everybody’s interests to agree a looser form of cooperation – such as Memoranda of Understanding – between the devolved and UK governments.

For instance, we will need to continue to work together on important domestic policy areas, for example by ensuring that a vital organ donated by someone in one part of the UK can be used to treat a patient in another part of the United Kingdom.

Now those powers should rightly be devolved, not centralised – and that is the offer we have put forward on the table.

But on the other hand, some powers are clearly related to the UK as a whole and will need to continue to apply in the same way across all four nations in order to protect consumers and businesses who buy and sell across the UK, in all parts of what we might call the United Kingdom’s common market. That market is one of the fundamental expressions of the constitutional integrity that underpins our existence as a union.

The Government will protect that vital common market of the UK. And by retaining UK frameworks where necessary we will retain our ability not only to act in the national interest when we need to, but to do so with a unity of purpose that places the prosperity and security of all of our citizens, no matter where they’re from or where they were born, to the fore.

For example, at present EU law means that our farmers and other food producers only need to comply with one set of package labelling and hygiene rules.

Four different sets of rules in different parts of the UK would only make it more difficult and more expensive for a cheesemaker in Monmouthshire to sell to customers in Bristol or for a cattle farmer in Aberdeenshire to sell their beef in Berwick-upon-Tweed.

Now these are everyday issues affecting how people live their life – they are issues that people in the UK expect us to get on and agree in the clear interests of families and businesses in every part of England, Scotland, Wales and Northern Ireland alike.

So that is exactly what the UK government stands ready, waiting and willing to do.

They are the steps that will ensure the United Kingdom’s market continues to work as it always has done:

to ensure that the factory in Paisley can continue to sell freely to Preston;

that the family firm in Swansea can continue to buy supplies from Swindon;

and customers in Londonderry can still place their order in Leeds, without any extra red tape or expense.

And I want to say one thing further. The Prime Minister has been clear throughout the negotiations with the European Union that we want to preserve the standards that protect employment and workers rights, to deliver consumer protection, and safeguard the environment.

And that means keeping these high standards across the whole of the United Kingdom, and for our part as the United Kingdom government, we are committed to working in partnership with the devolved governments to ensure those standards are universal in all four parts of our country.

Clause Eleven

Now, it is fair to say that the road to agreeing how we go forward together has not always been a smooth and straight one.

I, along with my predecessors in the Cabinet Office and the Secretaries of State for Wales, Scotland and Northern Ireland, have engaged closely with the devolved governments in order to understand their concerns and to respond to them.

Those concerns have been expressed clearly – and often forthrightly – throughout those conversations!

But we have continued to talk – both at political and official level – and, even more importantly, we have continued to listen.

The Prime Minister’s first visit after entering Downing Street was to Edinburgh.

Two of my first phone calls upon moving across to the Cabinet Office last month were to the Deputy First Minister of Scotland and the First Minister of Wales.

I met them both in person during my first weeks in this role, in Cardiff and in Edinburgh – to underline my personal commitment to engaging constructively and striking the agreement that is in all our interests.

While they have always acknowledged that the Government has said we want to see many of the powers from Brussels go straight to the devolved governments, there has been a question throughout about what our starting point should be.

Should those powers sit at a UK-wide level while we agree the future frameworks?

Or should they sit at a devolved level while we then agree the future frameworks?

The Government has listened to the different points of view – from the Scottish and Welsh Governments, from Welsh and Scottish colleagues in both Houses of Parliament at Westminster and to views expressed in the devolved parliaments.

And just last week, we held constructive discussions in London where we put forward a considerable offer. A commitment that the vast majority of powers returning from Brussels will start off in Edinburgh, Cardiff and Belfast – and not in Whitehall.

And let me be in no doubt: this would mean a very big change to the EU Withdrawal Bill that is before Parliament and a significant step forward in these negotiations.

It would put on the face of the Bill what we have always said was our intention: wide-ranging devolution not just away from Brussels, but from Westminster too.

And if accepted, this offer puts beyond doubt our commitment to a smooth and orderly departure from the European Union, in a way that doesn’t just respect the devolution settlements, but strengthens and enhances them.

So our proposal is to amend the Bill before Parliament to make clear that while frameworks are being agreed, the presumption would now be that powers returning from the EU should sit at a devolved level.

Westminster would only be involved where, to protect the UK common market or to meet our international obligations, we needed a pause – I stress pause – to give the governments time to design and put in place a UK-wide framework.

As I have said before, we expect to be able to secure agreement with the devolved governments about what frameworks should – or should not – apply to each power.

And where powers do need to be returned to a UK-wide framework, we will maintain the ability for the UK Parliament to legislate to do so.

Just as the current provisions within the EU Withdrawal Bill on releasing powers to devolved governments are intended to be by consensus and agreement with the devolved governments themselves, so we should expect this new, inverted power to operate in the same way – by consensus and by agreement.

Nor would this proposed arrangement prevent the devolved governments from doing anything that is already within their competence.

At the same time, our proposal offers an important protection too. It would ensure that, if there were not to be an agreement – and not having an agreement on a framework would put at risk the smooth and orderly exit that we all need – the UK Parliament could protect the essential interests of businesses and consumers in every part of the Kingdom.

A deal is there to be done.

So I am clear that it is in the interests of all parts of the United Kingdom to agree a way forward that:

fully respects the devolved settlements.

preserves the integrity of the United Kingdom market.

and maintains the UK’s ability to secure an agreement with the European Union on our future partnership.

Our new proposal is a reflection of the seriousness of our desire to strike agreements with the devolved governments.

Our seriousness about delivering more powers to Scotland, Wales, and Northern Ireland, while at the same time ensuring there are no new barriers for people across the nations of the United Kingdom.

So families can continue to buy and sell freely, so businesses won’t face extra bureaucracy and higher costs, so people face minimal disruption to their everyday lives, and maximum certainty that things can carry on as normal, as we look ahead to the future.

So I hope that the talks that are now continuing between the UK and devolved governments will lead in coming weeks to an agreement that can be taken forward in the EU Withdrawal Bill and which we can all welcome as being to our mutual benefit.

Seizing the opportunities

And so as we look to the future, this is the balance that, working together, we can strike a strong and fair devolution settlement for our devolved partners, with powers sitting at the most appropriate level and common UK frameworks where necessary, with our constitutional integrity intact.

By making that kind of agreement, we can truly become that United Kingdom we need to be here at home – and that greater, stronger United Kingdom abroad.

For that is the task we now face. Building a global Britain that is fit for the future, equipped not only to tackle head on future global challenges, but confidently seize the new opportunities available to us as well and so when we do speak and act on the world stage we do so with one authoritative voice, which reflects and represents the interests of all four nations. A country that has the strength and flexibility needed to survive, and indeed thrive on the international stage.

And with our considerable existing strengths, I am confident this future can be a secure and prosperous one:

We are the sixth largest economy in the world, a permanent member of the United Nations Security Council, the biggest European defence spender in NATO, with significant military capabilities and a proven readiness to deploy them in defence of our interests. A key player in a highly developed set of security relationships such as Five Eyes.

Our country has:

One of the best diplomatic services in the world and one of it’s biggest aid and development programmes.

We have world leading universities that attract the best talent from around the globe; more Nobel Laureates than any country bar the United States; a globally competitive economy, with some of the most exciting burgeoning industries such as digital and fintec; a language that is the language of the world, and, thanks to institutions like the BBC and the NHS, the greatest soft power of any nation on the planet.

But just imagine if we spoke with four conflicting voices: each would be weaker, fainter and misheard as our global competitors shouted louder with a strong, single voice, and a divided country at home would be weaker, less secure, and less prosperous overseas.

The unity that exists between our four nations gives us a scale of ambition none of the four of us could possess alone.

We need to use our collective economic clout and the experience and reach of our diplomatic network in the United Kingdom to sell Scotch whisky and engineering expertise, Welsh cheeses and mini-computers, buses and linens from Northern Ireland right around the world.

And maintaining the common market of the United Kingdom will give us the heft to lead the charge for common regulatory standards at a global level. Having the right framework in place at home means we can be at the forefront of developing the new regulatory environment we need for the exciting technologies of tomorrow.

And what we want is innovators and producers right across Scotland, Wales, England and Northern Ireland to be able to get ahead of the curve and edge ahead of their global competitors.

And it’s also by sticking together that we’ll be able to provide global leadership, discharging our international obligations, standing up for human rights, democratic values and the rule of law and defending the rules-based international order that is so vital to our security and our prosperity together.

Conclusion

It would be easy to loosen the bonds that connect us.

But with a strong, fair devolution settlement that ensures powers and decision-making are exerted as close to people as is practical, I believe a sense of trust can be restored between the people of the United Kingdom and those they choose to govern on their behalf.

And with common frameworks in place that maintain the integrity of our union, we can ensure that we continue to speak with that powerful voice globally.

Each of those two principles strengthens the other.

So let us seize the moment and focus on that prize that is on offer:

a union greater than the sum of its parts; a country that remains a strong, global leader; a United Kingdom at home, and an active, force for good in the world.

Thank you very much indeed.

David Lidington – 2018 Statement on the Infected Blood Inquiry

Below is the text of the statement made by David Lidington, the Minister for the Cabinet Office, in the House of Commons, on 8 February 2018.

I am announcing today the appointment of Sir Brian Langstaff to head the public inquiry into the infected blood scandal. The inquiry will be established under the 2005 Inquiries Act, with full powers, including the power to compel the production of documents, and to summon witnesses to give evidence on oath.

In relation to the appointment of the chair, the Lord Chief Justice was asked to recommend a judge who, in his view, would be best suited to the task. The Lord Chief Justice recommended Sir Brian Langstaff: a highly respected and hugely experienced High Court judge. I have accepted the Lord Chief Justice’s recommendation.

Sir Brian will be the full-time chair of the inquiry from 1 May following his retirement from the High Court. However, in order that those who have been affected by this tragedy face no further undue delay, he will use the intervening period to conduct a further consultation on the inquiry’s terms of reference.

The infected blood scandal of the 1970s and 1980s was an appalling tragedy that should never have happened. The victims of this tragedy who have endured so much pain and hardship deserve answers. It is crucial that their views are properly reflected in the inquiry’s terms of reference. Sir Brian will want to listen carefully to the voices of those that have suffered before making a recommendation to me on what the scope of the inquiry should be. I will return to Parliament with the final terms of reference as soon as this process has been completed.

The Government will ensure that the inquiry has the resources that it needs to complete its work. The inquiry will, of course, also be independent of the Government.

It is very important that the inquiry can identify why and how this tragedy occurred and provide answers for all the victims who have suffered so terribly, and can identify lessons to be learned so that a tragedy of this scale can never happen again.

David Lidington – 2018 Statement on Carillion

Below is the text of the statement made by David Lidington, the Minister for the Cabinet Office, in the House of Commons on 23 January 2018.

On Monday 15 January 2018 I notified the House of the steps taken by the Government in regards to the compulsory liquidation of Carillion plc.

Throughout this unfolding situation the Government have prioritised the continued delivery of public services. Taxpayers should not, and will not, bail out a private sector company for private sector losses or allow rewards for failure.

The failure of this company has understandably caused concern for many people over their jobs, their pensions and their local services. The court has appointed an official receiver from the Insolvency Service who has taken control of the delivery of public services contracts and we are supporting them to do so. We will support the official receiver to provide these services until a suitable alternative is found, either through another contractor or through in-house provision.

I would like to provide further reassurance that all employees working on public services should continue to turn up to work, as they have been doing since the announcement of the liquidation, confident in the knowledge that they will be paid for the work they are providing.

In order to safeguard our public services, we have been implementing contingency plans that have been developed since July 2017. Since I last updated the House, there has been no significant disruption to service delivery in schools, hospitals, prisons, defence and other public services as staff have continued to provide services. We have been engaging with all devolved Administrations with exposure to Carillion to ensure that robust contingency plans are being implemented.

A number of Carillion’s joint venture partners such as Kier, Eiffage, Balfour Beatty, KBR, Amey and Galliford Try have committed to stepping into the respective public sector contracts to ensure continuity of these vital services. Public sector construction sites have been secured and construction will begin following the appointment of a new contractor. I would like to express my thanks to all those who have worked hard to ensure the continuity of public services.

Over 90% of Carillion’s private sector facilities management service customers have indicated that they will provide funding for the official receiver to maintain interim services while new suppliers can be identified to deliver these, ensuring the retention and employment of staff on these contracts. In addition, we are making sure the usual level of support from Government to affected employees is available from Jobcentre Plus, the Department for Business, Energy and Industrial Strategy, the Pension Protection Fund (PPF), HMRC and also dedicated websites from the Insolvency Service.​

At present, seven Carillon pensions schemes, covering 6,000 members, have moved to the pensions protection fund assessment period, this occurs automatically when all the sponsoring employers become insolvent. The remaining 21,000 members are in schemes which have at least one sponsor not in insolvency, and are therefore not in the Pension Protection Fund (PPF).

Where pensions have moved into the PPF, the PPF is making sure current pensioners continue to receive their pensions at 100% of their usual rate, and are assessing the eligibility of Carillion’s pension schemes to enter the PPF to protect current employees’ future pensions. We have also set up a special additional helpline with the Pensions Advisory Service for members of Carillion’s pension schemes (0800 7561012). We have responded to over 500 calls to the Pensions Advisory Service line since it opened last week.

The Construction Industry Training Board (CITB) has worked with the Education and Skills Funding Agency to ensure funding is available to support former Carillion apprentices. Over 1,400 apprentices have been contacted and the CITB is offering every former Carillion apprentice a face-to-face session with CITB Apprenticeships to find out their individual learning needs. To date, the CITB have matched 400 Carillion apprentices to new employers, and they continue to assess the industry offers they have received to find placements for the remaining Carillion apprentices.

HMRC will provide practical advice and guidance to affected businesses in Carillion’s supply chain through its business payment support service (BPSS). The BPSS connects businesses with HMRC staff who can offer practical help and advice on a wide range of tax problems, providing a fast and sympathetic route to agreeing the best way forward and addressing immediate concerns with practical solutions. HMRC has also offered to provide affected families with cash support through the tax credit system and has published details on how to contact them to arrange.

The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark), the Economic Secretary to the Treasury (John Glen) and the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths) met with several banks on 17 January 2018 to seek assurances that they will support small businesses affected by Carillion’s liquidation. Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short-term issues can be helped to stay on track. Three lenders have made a fund of £225 million available to support small businesses exposed to Carillion’s liquidation. Furthermore, the Secretary of State for Business, Energy and Industrial Strategy has set up a taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation on construction firms, particularly SMEs and those working in the sector. He chaired the first meeting of the taskforce on 18 January 2018 and will be holding a further series of meetings with stakeholders in the coming weeks.

The official receiver has also taken immediate action to stop severance and bonus payments to former directors. The Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service and the official receiver asking that the statutory investigation into the conduct of Carillion’s directors is fast-tracked ​and extended in scope to include previous directors. He has also asked the Financial Reporting Council to conduct an investigation into the preparation of Carillion’s accounts past and present, as well as the company’s auditors.

Officials in my Department have been in touch with various Members’ offices last week following their queries through the dedicated helplines we set up. I shall be holding drop-in sessions for Members to meet with Cabinet Office Ministers and relevant officials to answer any further queries. Alongside ministerial colleagues, I will keep the House updated on this ongoing situation.

David Lidington – 2018 Statement on Carillion

Below is the text of the statement made by David Lidington, the Minister for the Cabinet Office, in the House of Commons on 15 January 2018.

With permission, Mr Speaker, I wish to make a statement to update the House on the situation relating to Carillion Plc.

Today the directors of Carillion concluded that the company is insolvent and that it is going into liquidation. The court has appointed the official receiver as the liquidator. It is regrettable that Carillion has not been able to find suitable financing options with its lenders, and I am disappointed that the company has become insolvent as a result. It is, however, the failure of a private sector company and it is the company’s shareholders and lenders who will bear the brunt of the losses; taxpayers should not, and will not, bail out a private sector company for private sector losses or allow rewards for failure.

I fully understand that both members of the public and particularly employees of companies in the Carillion group will have concerns at this time, and the Government are doing everything possible to minimise any impact on employees. Let me be clear that all employees should continue to turn up to work confident in the knowledge that they will be paid for the public services they are providing. Additionally, in order to support staff—and in this instance this will apply to staff working for the private sector as well as for the public sector contracts of the Carillion group—we have established a helpline using Jobcentre Plus through its rapid response service.

The Government are also doing everything they can to minimise the impact on subcontractors and suppliers who, like employees, will continue to be paid through the official receiver. The action we have taken is designed to keep vital public services running, rather than to provide a bail-out on the failure of a commercial company. The role of the Government is to plan and prepare for the continuing delivery of public services that are dependent on these contracts, and that is what we have done.

The cause of Carillion’s financial difficulties is, for the most part, connected not with its Government contracts, but with other parts of its business. Private sector contracts account for more than 60% of the company’s revenue, and the vast majority of the problems the company has encountered come from these contracts rather than the public sector.

Our top priority is to safeguard the continuity of public services, and we have emphasised that to the official receiver. We are also laying a departmental minute today notifying the House of a contingent liability incurred by my Department in indemnifying the official receiver for his administrative and legal costs. The official receiver will now take over the running of services for a period following the insolvency of the company. The Government will support the official receiver to provide these public services until a suitable alternative is found, either through another contractor or through in-house provision. The court appointment of the official receiver will allow us to protect the uninterrupted delivery of public services—something that would not have been possible under a normal liquidation process.

The official receiver is also under a statutory duty to investigate the cause of failure of any company. He is under a duty to report any potential misconduct of the ​directors to my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. My right hon. Friend has asked that the investigation look not only at the conduct of the directors at the point of the company’s insolvency but also at that of any previous directors, to determine whether their actions might have caused detriment to the company’s creditors. That includes detriment to any employees who are owed money. The investigation will also consider whether any action by directors has caused detriment to the pension schemes.

Carillion delivered a range of public services across a number of sectors, including health, education, justice, defence and transport, and in most cases the contracts have been running successfully. We have been monitoring Carillion closely since its first profit warning in July 2017, and since then we have planned extensively in case the current situation should arise. We have robust and deliverable contingency plans in place. These are being implemented immediately to minimise any disruption and to protect the integrity of public service delivery. Other public bodies have been preparing contingency plans for the contracts for which they are responsible. The majority of the small number of contracts awarded after the company’s July profit warning were joint ventures, in which the other companies are now contractually bound to take on Carillion’s share of the work. For example, the Kier group, one of the joint venture partners for HS2, confirmed this morning in a release to the stock exchange that it had now put in place its contingency plans for such an eventuality.

I recognise that this is also a difficult time for pension holders. The Pensions Advisory Service has set up a dedicated helpline number for staff and pensioners who have concerns about their pensions. Those who are already receiving their pensions will continue to receive payment from the various pension funds, including the Pension Protection Fund. For those people who have started an apprenticeship programme with Carillion, the Construction Industry Training Board has set up a taskforce to assist apprentices to seek new employment, while also working with the Education and Skills Funding Agency to find new training placements. The official receiver will be in contact with all apprentices. Companies and individuals in the supply chain working on public sector contracts have been asked to operate as usual. Normally, in the event of a company going into liquidation, the smaller firms working for it move across to the new contractor when it takes on the work.

The private sector plays an important and necessary role in delivering Government services—something recognised by this and previous Governments of all political parties. Currently, 700 private finance initiative and private finance 2 contracts reflecting capital investment of up to approximately £60 billion are being delivered successfully, and we also have a number of service provision contracts being delivered successfully by a range of companies. Such contracts allow us to leverage the expertise of specialist providers and to deliver value for money for taxpayers. I would like to reassure the House that we are doing all we can to ensure the continuity of the public services provided by Carillion and to support an orderly liquidation of the company.

I shall write to all right hon. and hon. Members today to summarise the situation and to inform colleagues of a helpline for the use of Members and their staff to provide answers in the fastest possible time to any ​constituency problems that may arise. Along with other ministerial colleagues, I shall keep the House updated on developments as the official receiver starts to go about his work. I commend this statement to the House.