Ken Clarke – 2019 Speech on Brexit

Below is the text of the speech made by Ken Clarke, the Conservative MP for Rushcliffe and the Father of the House of Commons, on 29 January 2019.

None of us taking part in this debate is in any doubt that we are actually discussing an almost unique political crisis—one of a kind that has not happened for very many years. The crisis takes two forms: one is that we are trying to break a political deadlock over exactly what changes we will make to the great bulk of our political, security, intelligence, crime-fighting, trade and investment, and environmental relationships with the rest of the world, having turned away from the ones that we have put together over the past 47 years; the second is that we are also facing a constitutional crisis over the credibility of Government and Parliament in their ability to resolve these matters.

I rather agree with what the right hon. Member for Birkenhead (Frank Field) said. I enjoy as much as any veteran parliamentarian the rowdiness of the House of Commons; it is a way of testing the arguments. However, we should also be aware that, at the moment, the public are looking on our political system with something rather near to contempt, as it seems to them that neither the Government nor the political parties, parliamentarians and politicians in general seem able to resolve a question that was first raised by a referendum. Referendums are designed by those who support them to bypass parliamentary decision making, parliamentary majorities and political parties deciding things. We really do need to settle down, and, perhaps if the Government get their way, we can do that in the next few weeks. We have fewer than 60 days to decide how we will come to conclusions about the way forward.

I want to concentrate on just a few issues. I have put forward most of my views on these amendments in the many debates that we have had already, and many other people want to speak. I suspect that a high proportion of this House can guess which way I will vote on the amendments that Mr Speaker has chosen. Probably far too many of them have had to listen to my arguments. To take some encouragement from this debate—

Frank Field

Will the right hon. and learned Gentleman give way?

Mr Clarke

I will in a second. I wish to take up this question of the relationship between Parliament and Government, because I took some encouragement from my right hon. Friend the Prime Minister, who did seem to accept that the Government should give opportunities to the House to debate things that each Member regards as key matters of policy. Under our constitution, the Government have to pay regard to the views expressed by this House.​

Frank Field

I am very grateful to the right hon. and learned Gentleman for giving way. He and I tabled an amendment that was not called. It was to give this House the chance to vote on the various options. The Prime Minister, when she was speaking, talked of taking other amendments away and working on them with the hope of bringing them back to act upon. Might I, through this intervention, ask him to push on his own side that she does precisely that with our amendment?

Mr Clarke

Well, unless I take too long, I hope to touch on the arguments behind the right hon. Gentleman’s excellent amendment, because that is one of the things that we should do in one way or another over the next few weeks.

Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) rose—

Mr Clarke

Let me just deal with this question and then I will give way to the hon. Gentleman if his point is relevant.

The question is, what is the role of this House vis-à-vis the Government and what are our procedures? I must admit that, in the past month or two, I have listened to what I, as a fairly experienced Member here now, have regarded as the most extraordinary nonsense about sweeping away centuries of tradition and distorting our procedures because people have objected to the Speaker selecting amendments where they think they might not be on the winning side. There is a rather fundamental, underlying problem here. This Government did not start this, but Brexit brought it to its head. I think that it started with the Blair Government, because Tony Blair, with the greatest respect, never could quite understand why he had to submit to Parliament so often. He started timetabling all our business and so on, but that is now water under the bridge. I say with respect that, mistakenly, this Government began by saying that they were going to invoke the royal prerogative, and, as it was a treaty, they felt that Parliament would not be involved in invoking article 50 or any of the consequences because the monarch would act solely on the advice of her Prime Minister, trying to take us back several hundred years. That was swept away. Then we had to have defeats inflicted on the Government last summer in order to get a meaningful vote on the outcome of any negotiations. This has gone on all the way through the process. Today’s debate and the votes that we are having tonight are only taking place because the Government actually resisted the whole idea of coming back here with any alternative to the deal that they were telling us was done and fixed and the only way of going forward. That has worried me all the way through.

Now, I did take the Prime Minister today to be taking a totally different approach, and I hope that she will confirm that. It does now seem that, whatever course we decide on today, things are going to come back to this House. No deal of any kind is going to be ratified until we have had a vote in this House, approving whatever we are presented with. One problem is that we have not yet produced a consensus or a majority for any option, but if this House expresses a clear wish about the nature of the deal that it wants to see negotiated, the Government will consider—indeed, I believe that under our constitution, they are bound to follow—the wishes of the House of ​Commons, because British Governments have never been able to pursue these matters without the consent and support of a majority of the House of Commons.

Angus Brendan MacNeil

The right hon. and learned Gentleman said that the House must test the various options. Will he “join the (q)”, as it were? Amendment (q) aims to revoke article 50. Is that one of the ideas that he thinks should be tested in this House—even for nothing other than that the people of Scotland would at least know the folly of sticking with Westminster, which is taking them out of Europe against their will?

Mr Clarke

I do not wish to revoke article 50 for the same reasons as the hon. Gentleman, although I do share some of his views. If I was trying to exercise unfettered autocratic power in the government of the country, I would of course still believe that the best interests of the United Kingdom lie in remaining a member of the European Union. I do not share enthusiasm, however, for what the hon. Gentleman wants. After the pleasure of the first referendum and all that it has caused, he now thinks that we will automatically resolve things by having a second referendum, which could be even more chaotic in its effects than that the one we have had.

As I have said, the Government of the day have got to give this House a far bigger role, which therefore means a much bigger responsibility on this House to create the intraparty, cross-party majority that is the only majority of any kind that might be available here for any sensible way forward.

Anna Soubry (Broxtowe) (Con)

Will my right hon. Friend give way?

Mr Clarke

Let me just finish my point. I will give way in a minute.

I heard all the stuff when the Clerks were invoked—the advice of the Clerks to the Government to resist this approach. Of course it is true that the law can only be changed by legislation. That is a perfectly straightforward legal point. But in our constitution, in my opinion, the Government are accountable politically to the non-legislative votes of Parliament. It is utterly absurd to say that Opposition Supply days and amendments to motions of the kind we are addressing today are just the resolutions of a debating society that have no effect upon the conduct of daily government. If we concede that point in the middle of this shambles of Brexit, with all the other things we have to resolve, we will have done great harm to future generations because it is difficult to see how the concept of parliamentary sovereignty will survive such an extraordinary definition.

Mr Mark Harper (Forest of Dean) (Con)

May I humbly suggest that the Prime Minister is actually following the will of Parliament, because she is remembering that, two years ago, two thirds of MPs in this Parliament voted to trigger article 50, which leads to the unconditional leaving of the European Union on 29 March? That was the instruction that she was given by Parliament that she is trying to deliver, and our duty is to assist her.​

Mr Clarke

With the greatest respect to my right hon. Friend, I think that my approach throughout the last two years has demonstrated that I am prepared to be pragmatic in response to these things. I did not regard myself as bound by a referendum. In the British constitution, referendums are advisory—they are described as such in official pronunciations—but politically most Members of this House bound themselves to obeying the result. That was brought home to me in a parliamentary way, consistent with what I have just been saying, by the massive majority of votes cast for invoking article 50. I opposed the invocation of article 50, but since that time I accept—I have to accept—that this House has willed that we are leaving the European Union.

With respect to my right hon. Friend, I do not concur that we agreed to leave unconditionally, whatever the circumstances, at a then arbitrary date two years ahead. We then wasted at least the first 18 months of the time, because nobody here had really thought through in any detailed way exactly what we were now going to seek as an alternative to our membership of the European Union, to safeguard our political and economic relationships with the world in the future. And we still have not decided that. It looks as though I am going to be remarkably brief by my own standards, but that is probably only in contrast with the frequently interrupted Front-Bench speeches, to which I have mercifully been only mildly, and perfectly pleasantly, exposed.

Where does this leave me, given that I believe I have a duty to make my mind up on the votes that we are going to have today? I am one of those who voted for withdrawal on the withdrawal agreement. That was the first time in my life that I have ever cast any kind of vote contemplating Britain leaving the European project and the European Union. I thought that the agreement was perfectly harmless and perfectly obvious, and could have been negotiated years before, with citizenship rights, legally owed debts that we are obviously going to honour and an arrangement that protected the Irish border—the treaty commitment to a permanently open border.

The independent hon. Member for North Down (Lady Hermon) is the only Irish Member we have who agrees with the majority of the Irish population, who would prefer to remain. Like me, I think that she accepts the reality, but I know that she thinks the backstop is an important defence of the interests of Ireland with an open border. It is quite absurd to reopen that question. I am glad to say that the Prime Minister is still very firmly committed to a permanent open border, and I congratulate her on that. She is not going to break our solemn treaty commitments and set back our relationship with the Republic of Ireland for another generation. I realise that the Prime Minister has been driven to this by the attitudes of quite a number of Government Members, but I personally cannot see what the vague alternative to a perfectly harmless backstop that we are now going to explore is; nor do I see what the outcome is going to be. Our partners—or previous partners—in the European Union cannot understand quite what we are arguing for either, so we move from having a deal to not having a deal.

Let me just say what I will vote for. I am not going to go through it amendment by amendment, because Members are waiting to move those amendments. I shall vote for anything that avoids leaving with no deal on 29 March. It is perfectly obvious that we are in a state of such ​chaos that we are not remotely going to answer these questions in the 60-odd—fewer than 60—days before then. We need more time. The Prime Minister says that there are only two alternatives: the deal we have got, which she is now wanting to alter and go back and reopen; or no deal on 29 March. That is not true. A further option—and my guess is that the other members of the European Union would be only too ready to hear it opened up as a possibility—is that we extend article 50 to give us time to actually reach some consensus. I think that it would create quite some time, and there are problems over the European Parliament and so on. I have always said that we can revoke it, while making it clear to the angry majority in the House of Commons that they can invoke it again, with their majorities, once we are in a position to settle these outstanding issues, which, as we sit here at the moment, we are nowhere near to resolving, and we are right at the end of the timetable. The alternative to no deal is to stay in the Union for as long as it takes to get near to a deal that we are likely all to be able to agree on and that the majority of us think is in the national interest.

Sir Oliver Letwin (West Dorset) (Con)

I think that my right hon. and learned Friend will therefore be joining me in the Lobby in support of what is known as the Cooper amendment. Does he agree that in changing Standing Orders, the House of Commons, if it has a majority to do so, is doing something that the House of Commons has done since Standing Orders were created, and did before the Government took control of the Order Paper in 1906?

Mr Clarke

Absolutely. We will not debate the constitutional history, but people are trying to invoke the strictest interpretation of Standing Orders going back to attempts in the late 19th century to stop the Irish nationalists filibustering, which brought the whole thing grinding to a halt. Now we are saying that as this Parliament has the temerity to have a range of views, some of which are not acceptable to the Government, Standing Orders should be invoked against us to discipline us. Anyway, I will not go back to that, but I agree with my right hon. Friend.

The other thing that I shall vote for is another thing that supports the Prime Minister’s stated ambition for the long-term future of the country: open borders and free trade between ourselves and our markets in the EU, as demanded by our business leaders, our trade union leaders, and, I think, most people who have the economic wellbeing of future generations at heart. I think the only known way in the world in which we can do that is to stay in a customs union, and also to have sufficient regulatory alignment to eliminate the need for border barriers. I do not mind if some of my right hon. and hon. Friends prefer to call the customs union a “customs arrangement” or if they care to call the single market “regulatory alignment”. I do not feel any great distress at their use of gentler language to describe these things. Nevertheless, something very near to that is required to deliver our economic and political ambitions.

It is also the obvious and only way to protect the permanent open border in Ireland. We do not need to invent this ridiculous Irish backstop if the whole United Kingdom is going into a situation where it has an open border with the whole of the European Union in any event. The Irish backstop was only invented to appease ​those people who envisaged the rest of the British Isles suddenly deciding to leave with no deal before we had finished the negotiations in Europe. Well, let us forget that. Let us make it our aim—it will not be easy but it is perfectly possible—to negotiate, probably successfully, with the other 27 an open trading economic and investment relationship through the single market and the customs union.

Lady Hermon

I am very grateful to the Father of the House for allowing me to intervene. I just want to say ever so gently that in his very nice tribute to the hon. Member for North Down, I think he might have accidentally referred to the lady as an Irish Member of this House. No, I am very much a British Member of this House. However, he is absolutely right that I feel passionate about protecting the Belfast agreement—the Good Friday agreement—and the peace that it has delivered in the past 20 years across Northern Ireland and across the whole of the United Kingdom. The backstop was there to protect that peace, and I am very sorry that the Prime Minister has moved away from that today.

Mr Clarke

I apologise to the hon. Lady, but I must explain to her that I refer to her and her colleagues as Irish Members of Parliament in the same way that I would refer to myself as an English Member of Parliament, or perhaps to a colleague as a Welsh or Scottish Member of Parliament. [Hon. Members: “Northern Irish.”] She is Northern Irish. I can assure her that not only do I agree entirely with the views she just expressed about what we are seeking here, but I am as keen a Unionist as she is, and I do not wish to see the break-up of the present United Kingdom. I think that she and I are in total agreement.

The other thing I would support, which arises in the context of one of the amendments we are talking about, is that the Government obviously should no longer resist this House having indicative votes. It is absurd that we have been trying to get a debate and a vote on some of the more obvious things for months now, and as time goes on, the Government are still trying to make it difficult to have a vote on them. When we have the votes, no doubt the Government and the Opposition will start imposing three-line Whips on everybody to take a narrow focus, trying to take us all back towards the failed withdrawal agreement or the rather confused Labour party policy and ensuring that we shoot down every other sensible proposition. There are quite a lot of sensible propositions flying around the House that are superior to the policy of the Government so far and certainly superior to the policy of the Leader of the Opposition. Indicative votes enable us in the time available—to shorten delay further—to give an expression of will and an instruction to the Government about the nature of the long-term arrangements that we want.

To go back to where I started, the circumstances at the moment mean that we have to strive to restore confidence in our political system, our political institutions and, above all, this House of Commons and ensure that an outcome of that kind emerges, because if this shambles goes on much longer, I hate to think where populism and extremism will take us next in British democracy.

Kenneth Clarke – 2019 Comments on Brexit

Below are the comments made by Kenneth Clarke, the Father of the House and the Conservative MP for Rushcliffe, in the House of Commons on 21 January 2019.

As a supporter of the withdrawal agreement last week, I welcome the Prime Minister’s acceptance of the need for change in the light of the result and her reassurance that she will not compromise on a permanently open border in Northern Ireland, and that therefore any discussions that she has with the hard right wing on the Irish backstop will not compromise the commitment to a permanently open border.

Will the Prime Minister also consider reaching out to those remainers who are not yet convinced of her agreement by at least relaxing—if she cannot do a U-turn—her normal rejection of a customs union? I do not see outside powers lining up to do trade agreements to compensate us for leaving Europe. Will she also consider relaxing her resistance to regulatory alignment with Europe? Regulatory alignment is not inconsistent with some tightening up, at least, of free movement of labour. I urge her to be flexible on every front, because there was a large majority against the proposal last week. There are probably more remainers who voted against her than there are Brexiteers, and she needs to reach out to those remainers.

Ken Clarke – 2019 Comments on Withdrawal Agreement

Below are the text of the comments made by Ken Clarke on the Brexit Withdrawal Agreement in the House of Commons on 7 January 2019.

We have only about 80 days left. The Government face a deadline upon which depend crucial decisions that will affect future generations and the whole basis of our political and economic relationships with the rest of the world. We are nowhere near consensus, either in this House or in the country, on what new arrangements with the European Union we are actually asking for, let alone on the arrangements that we are likely to achieve. Now we have a completely ridiculous urgent question from the Leader of the Opposition, who has no idea what he wants but who just feels that he has to say something about the crisis we are in.

As we are in this position and as 29 March is an entirely arbitrary date—it was accidentally set when the Prime Minister, for no particular reason, decided to invoke article 50 before she knew what she was going to ask for—may I ask my right hon. Friend: is not it obvious that the national interest requires that we now delay matters by putting off the implementation of article 50 in order to put ourselves in the position where we can negotiate with 27 serious Governments by showing that we know what we are asking for and can deliver from our side, and to protect the national interest and future generations?

Ken Clarke – 2018 Response to the Salisbury Attack Statement

Below is the text of the speech made by Kenneth Clarke, the Conservative MP for Rushcliffe, in the House of Commons on 14 March 2018.

It seems to me, without any access to closed information, that the use of this particularly bizarre and dreadful way of killing an individual is a deliberate choice by the Russian Government to put their signature on a particular killing so that other defectors are left in no doubt that it is the Russian Government who will act if they are disappointed in any way by those people’s actions. In the light of that, the only sensible question the Leader of the Opposition asked was what consultation we propose to have with NATO, other European countries and the American Government about positive action that could be taken to prevent this continuing defiance of international law, and the defiance of all rules on the testing and possession of chemical weapons. This is not just a question of expressing our anger about Salisbury. This is actually a serious threat to the safety of the western world unless and until we all do something together to get the Russians to do something, as opposed to simply ignoring us.

Ken Clarke – 2017 Speech on Withdrawal from the EU

Below is the text of the speech made by Ken Clarke in the House of Commons on 31 January 2017.

Mr Speaker, you will not be surprised to hear that it is my intention to vote against the Second Reading of this Bill, if a vote is called, and to support the reasoned amendment, which I think will be moved very shortly by the Scottish nationalists.

Because of the rather measured position that the hon. and learned Member for Holborn and St Pancras (Keir Starmer) had to present on behalf of the official Labour party, it falls to me to be the first Member of this House to set out the case for why I believe—I hope that I will not be the last such speaker—that it is in the national interest for the United Kingdom to be a member of the European Union, why I believe that we have benefited from that position for the past 45 years and, most importantly, why I believe that future generations will benefit if we succeed in remaining a member of the European Union. It is a case that hardly received any national publicity during the extraordinary referendum campaign, but it goes to the heart of the historic decision that the House is being asked to make now.

It so happens that my political career entirely coincides with British involvement with the European Union. I started over 50 years ago, supporting Harold Macmillan’s application to join. I helped to get the majority cross-party vote for the European Communities Act 1972, before we joined in 1973, and it looks like my last Parliament is going to be the Parliament in which we leave, but I do not look back with any regret. We made very wise decisions. I believe that membership of the European Union was the way in which we got out of the appalling state we were in when we discovered after Suez that we had no role in the world that we were clear about once we had lost our empire, and that our economy was becoming a laughing stock because we were falling behind the countries on the continent that had been devastated in the war but appeared to have a better way of proceeding than we did.

I believe that our membership of the European Union restored to us our national self-confidence and gave us a political role in the world, as a leading member of the Union, which made us more valuable to our allies such as the United States, and made our rivals, such as the Russians, take us more seriously because of our leadership role in the European Union. It helped to reinforce our own values as well. Our economy benefited enormously and continued to benefit even more, as the market developed, from our close and successful involvement in developing trading relationships with the inhabitants of the continent.

Mr Peter Lilley (Hitchin and Harpenden) (Con)

Will my right hon. and learned Friend give way?

Mr Clarke

I am very fortunate to be called this early. I apologise to my right hon. Friend—my old friend—but 93 other Members are still waiting to be called, so if he will forgive me, I will not give way.

The Conservative Governments in which I served made very positive contributions to the development of the European Union. There were two areas in which we were the leading contender and made a big difference. The first was when the Thatcher Government led the way in the creation of the single market. The customs union—the so-called common market—had served its purpose, but regulatory barriers matter more than tariffs in the modern world. But for the Thatcher Government, the others would not have been induced to remove those barriers, and I think that the British benefited more from the single market than any other member state. It has contributed to our comparative economic success today.

We were always the leading Government after the fall of the Soviet Union in the process of enlargement to eastern Europe, taking in the former Soviet states. That was an extremely important political contribution. After the surprising collapse of the Soviet Union, eastern and central Europe could have collapsed into its traditional anarchy, nationalist rivalry and military regimes that preceded the second world war. We pressed the urgency of bringing in these new independent nations, giving them the goal of the European Union, which meant liberal democracy, free market trade and so forth. We made Europe a much more stable place.

That has been our role in the European Union, and I believe that it is a very bad move, particularly for our children and grandchildren, that we are all sitting here now saying that we are embarking on a new unknown future. I shall touch on that in a moment, because I think the position is simply baffling to every friend of the British and of the United Kingdom throughout the world. That is why I shall vote against the Bill.

Let me deal with the arguments that I should not vote in that way, that I am being undemocratic, that I am quite wrong, and that, as an elected Member of Parliament, I am under a duty to vote contrary to the views I have just given. I am told that this is because we held a referendum. First, I am in the happy situation that my opposition to referendums as an instrument of government is quite well known and has been frequently repeated throughout my political career. I have made no commitment to accept a referendum, and particularly this referendum, when such an enormous question, with hundreds of complex issues wrapped up within it, was to be decided by a simple yes/no answer on one day. That was particularly unsuitable for a plebiscite of that kind, and that point was reinforced by the nature of the debate.

Constitutionally, when the Government tried to stop the House from having a vote, they did not go to the Supreme Court arguing that a referendum bound the House and that that was why we should not have a vote. The referendum had always been described as advisory in everything that the Government put out. There is no constitutional standing for referendums in this country. No sensible country has referendums—the United States and Germany do not have them in their political systems. The Government went to the Supreme Court arguing for the archaic constitutional principle of the royal prerogative—that the Executive somehow had absolute power when it came to dealing with treaties. Not surprisingly, they lost.

What about the position of Members of Parliament? There is no doubt that by an adequate but narrow majority, leave won the referendum campaign. I will not comment on the nature of the campaign. Those arguments that got publicity in the national media on both sides were, on the whole, fairly pathetic. I have agreed in conversation with my right hon. Friend the Secretary of State for Exiting the European Union that he and I can both tell ourselves that neither of us used the dafter arguments that were put forward by the people we were allied with. It was not a very serious debate on the subject. I do not recall the view that £350 million a week would be available for the health service coming from the Brexit Secretary, and I did not say that we going to have a Budget to put up income tax and all that kind of thing. It was all quite pathetic.

Let me provide an analogy—a loose one but, I think, not totally loose—explaining the position of Members of Parliament after this referendum. I have fought Lord knows how many elections over the past 50 years, and I have always advocated voting Conservative. The British public, in their wisdom, have occasionally failed to take my advice and have by a majority voted Labour. I have thus found myself here facing a Labour Government, but I do not recall an occasion when I was told that it was my democratic duty to support Labour policies and the Labour Government on the other side of the House. That proposition, if put to the hon. Member for Bolsover (Mr Skinner) in opposition or myself, would have been treated with ridicule and scorn. Apparently, I am now being told that despite voting as I did in the referendum, I am somehow an enemy of the people for ignoring my instructions and for sticking to the opinions that I expressed rather strongly, at least in my meetings, when I urged people to vote the other way.

I have no intention of changing my opinion on the ground. Indeed, I am personally convinced that the hard-core Eurosceptics in my party, with whom I have enjoyed debating this issue for decades, would not have felt bound in the slightest by the outcome of the referendum to abandon their arguments—[Interruption.] I do not say that as criticism; I am actually on good terms with the hard-line Eurosceptics because I respect their sincerity and the passionate nature of their beliefs. If I ever live to see my hon. Friend the Member for Stone (Sir William Cash) turn up here and vote in favour of Britain remaining in the European Union, I will retract what I say, but hot tongs would not make him vote for membership of the EU.

I must move on, but I am told that I should vote for my party as we are on a three-line Whip. I am a Conservative; I have been a decently loyal Conservative over the years. The last time I kicked over the traces was on the Lisbon treaty, when for some peculiar reason my party got itself on the wrong side of the argument, but we will pass over that. I would point out to those who say that I am somehow being disloyal to my party by not voting in favour of this Bill that I am merely propounding the official policy of the Conservative party for 50 years until 23 June 2016. I admire my colleagues who can suddenly become enthusiastic Brexiteers, having seen a light on the road to Damascus on the day that the vote was cast, but I am afraid that that light has been denied me.

I feel the spirit of my former colleague, Enoch Powell—I rather respected him, aside from one or two of his extreme views—who was probably the best speaker for the Eurosceptic cause I ever heard in this House of Commons. If he were here, he would probably find it amazing that his party had become Eurosceptic and rather mildly anti-immigrant, in a very strange way, in 2016. Well, I am afraid that, on that issue, I have not followed it, and I do not intend to do so.

There are very serious issues that were not addressed in the referendum: the single market and the customs union. They must be properly debated. It is absurd to say that every elector knew the difference between the customs union and the single market, and that they took a careful and studied view of the basis for our future trading relations with Europe.

The fact is that I admire the Prime Minister and her colleagues for their constant propounding of the principles of free trade. My party has not changed on that. We are believers in free trade and see it as a win-win situation. We were the leading advocate of liberal economic policies among the European powers for many years, so we are free traders. It seems to me unarguable that if we put between us and the biggest free market in the world new tariffs, new regulatory barriers, new customs procedures, certificates of origin and so on, we are bound to be weakening the economic position from what it would otherwise have been, other things being equal, in future. That is why it is important that this issue is addressed in particular.

I am told that that view is pessimistic, and that we are combining withdrawal from the single market and the customs union with a great new globalised future that offers tremendous opportunities for us. Apparently, when we follow the rabbit down the hole, we will emerge in a wonderland where, suddenly, countries throughout the world are queuing up to give us trading advantages and access to their markets that we were never able to achieve as part of the European Union. Nice men like President Trump and President Erdoğan are impatient to abandon their normal protectionism and give us access. Let me not be too cynical; I hope that that is right. I do want the best outcome for the United Kingdom from this process. No doubt somewhere a hatter is holding a tea party with a dormouse in the teapot.

We need success in these trade negotiations to recoup at least some of the losses that we will incur as a result of leaving the single market. If all is lost on the main principle, that is the big principle that the House must get control of and address seriously, in proper debates and votes, from now on.

I hope that I have adequately explained that my views on this issue have not been shaken very much over the decades—they have actually strengthened somewhat. Most Members, I trust, are familiar with Burke’s address to the electors of Bristol. I have always firmly believed that every MP should vote on an issue of this importance according to their view of the best national interest. I never quote Burke, but I shall paraphrase him. He said to his constituents, “If I no longer give you the benefit of my judgment and simply follow your orders, I am not serving you; I am betraying you.” I personally shall be voting with my conscience content, and when we see what unfolds hereafter as we leave the European Union, I hope that the consciences of other Members of Parliament will remain equally content.

Ken Clarke – 2011 Conservative Party Conference Speech


Below is the text of the speech made by the then Justice Minister, Ken Clarke, at the 2011 Conservative Party Conference on 4th October 2011.

I don’t know whether you remember, but at last year’s party conference, I called for regime change – regime change in our prisons.

To turn them from places of idleness, Into places of hard work and reform. Prisons with a purpose – straight from the manifesto.

The idea is to provide hard work in prison so that prisoners would be…

Doing something productive,

Instead of doing nothing.

Plotting a more honest future,

Instead of plotting their next crime.

Earning money to pay back to victims,

Instead of creating new victims.

It’s not rocket science and it can be done.

At Altcourse Prison near Liverpool, prisoners do forty hours of hard work every week in a metal workshop.

Part of their earnings goes to fund services for victims of crime.

And because these prisoners have got some skills, they are less likely – a lot less likely – to return to prison.

So the burden on the taxpayer, on you and me, is less.

I intend to expand this Working Prisons programme quite dramatically.

But this is not something Government can do alone.

No: We need the private sector on board.

And they are coming on board.

This morning, eight companies – including Virgin, National Grid, Marks and Spencer give the idea their support, in the FT.

They – along with the CBI – are helping us to ensure that companies can make the most of this..

..Are not disadvantaged or undercut.

I want to see hard work flourishing in every single jail in the UK.

More criminals doing an honest day’s work, instead of sitting idle in their cells.

That will make us safer.

Provide more money for victims.

Help us break the cycle of crime.


I believe if we want prison to work,

Then our prisoners have got to be working.


A brief note to my Labour opponent, Sadiq Khan:

That’s what you call a policy.

You probably won’t be able to remember any policy proposals he has put forward.

Because Labour hasn’t got any significant ones.

His proudest boast last week, was that he does not fall asleep during his Party Leader’s speeches –

That is an achievement, Sadiq.

Many people do go to sleep during Ed Miliband’s speeches.

But just remember this – he, like the rest of them, was a loyal supporter of Gordon Brown’s Government – the most disastrous Government, that left the most disastrous legacy since Labour in 1931.

They bequeathed us not just a broken economy, but a broken society and an unreformed Justice system that failed to break the cycle of crime.

They wasted billions of pounds on justice and prisons.

They were hyperactive:

21 Criminal Justice Acts in 13 years.


Headline chasing.

And you know what?

It was all a con.

They made prison sentences appear longer and longer,

Whilst devising all sorts of ways to let people out earlier and earlier.

…80,000 let out on early release…

I have legislation before Parliament

– being carried through by Crispin Blunt and Jonathan Djanogly – which aims to reform, simplify, scrap failed gimmicks and give us a system which works better to contribute to a safer, sounder and more honest society.


That’s how we are facing up to – and delivering – the great challenge we have as a Government…

…how to save taxpayers’ money whilst striving to repair our broken society.

Because Labour left us failed policies, a broken society..

And no money.

When it comes to public spending,

We’ve got to show leadership.

We’ve got to show purpose.

We’ve got to stick to our guns.

Frankly, if you look across the western world, most democratic politicians are out of their depth.

They cannot cope with the consequences of this dreadful crisis.

We are just about the only government in the Western world where people really think we are going to tackle the deficit.

People look at this coalition, they look at the spending plans and say – they’re going to deliver.

George and David are going to ensure that we do not waver in our commitment to reduce public spending and debt and they have my total support.

When you look at the scale of the economic crisis, I don’t believe we can possibly say…

… we’re not going to save money on criminals…

… but we are going to have reductions in spending on Police and Defence, on Transport and Local Government.

You can’t say that like the health sector, criminals are exempt from the cuts.

Every criminal we have in jail costs you and me about

£40,000 a year…

…and there are more than 80,000 of them in prison right now.

And I just do not believe that we can follow the old brain-free policy of throwing money at the problem.

That’s what Labour did.

And look where it got them. And all of us.


The most shocking reminder of how broken a society ours is.

In this summer’s riots, more than 75 per cent of the adults charged were repeat offenders.

1 in 4 of them had been convicted of ten crimes or more.

Re-offenders.  Career criminals.

…I had a few other choice words for them at the time…

Our feral underclass is too big, has been growing, and needs to be diminished.

Less crime, fewer criminals

The question for me and my ministry now, is how do we reform the Criminal Justice System so that these unreformed, recidivist criminals, are dealt with more effectively and at  less cost to the taxpayer.

That’s why we need prisons that work.

And prisons that are drug free.

Where problems like addiction and mental health are tackled properly.

Where the treatment doesn’t suddenly stop when prisoners leave jail, which usually happens with those on short sentences.

But continues in the outside world.

So that we are better protected.

If we want less crime, we need fewer criminals.

Policy & Ideas

This year, we have been carefully but quite rapidly developing the concept of Payment by Results –

A system which concentrates on only paying for what works.

And the first group of pilots is now underway.

One of them is at Doncaster Prison, a new contract run by Serco and a charity called Catch 22, which started on Saturday.

If they deliver law-abiding people back onto the streets, we will pay them. If they fail, and the ex-prisoners they take on reoffend, we will not pay.

There are twelve of these projects around the country.

Private or public, businesses and charities, paid for resolving the drugs, the lack of skills, the rootlessness which lies behind much of the reoffending.

Saving money and protecting the public;

Paying for what works.

British Justice

I believe that at its heart our British justice system is still one of the best in the world despite all Labour’s efforts.

…when people think of Britain, they think of British justice.

That is why so much of my last year has been spent returning common sense and proportion to a system which was badly let down by Labour…

We have policies under way to

– Resolve public doubts on the law of self defence by victims of crime

– Criminalise squatting

– Make community sentences more punitive and more effective

– Bring competition into the management of prisons

– Speed up the process of the courts and make them more witness, litigant and victim friendly

– Curtail the compensation culture and cut excessive spending on Legal Aid

– Scrap referral fees to end the culture of those ambulance-chasing claims advisors.


I have spent my entire political life being a vigorous, controversial reformer of public services – but this time it is different.

Now, I am in a coalition Government which is dealing with the worst economic crisis since the war.

People are insecure and sometimes a bit frightened.

We must give strong, confident and principled government.

How do you set about public reform in a difficult area like mine?

I’m reminded of Teddy Roosevelt: Speak softly and carry a big stick.

New Labour did the opposite.

They spoke toughly and carried a pea-shooter.

I never have mastered the speak softly bit, but the big stick has always appealed.

It’s no good politicians just sounding off and making tough gestures.

In office you’ve actually got to make a worthwhile difference.

That’s what you’re in office for.

Justice needs to be swift, firm and fair.

Prisons need to be places of retribution and places of reform.

Sounds obvious when you think about it.

Delivering the obvious is what the public want.

And most Governments do not deliver.

I remember Iain MacLeod thrilling me when I was a delegate here many years ago.

Others may dream their dreams, others may scheme their schemes but we have work to do.

Those appalling riots brought home to me again that in our broken society, we certainly have work to do at the Ministry of Justice.

And my team and I are proud to be getting on and doing it.

Give us your support.

Ken Clarke – 2010 Speech to Conservative Party Conference


Below is the text of the speech made by Ken Clarke to the Conservative Party conference speech on 5th October 2010.

As you know, I have been in a few Ministerial posts before and served in two or three previous Governments. I have never seen political and economic events of the kind we have now.

We have the worst economic crisis in my lifetime. We have a political system which has lost the confidence of the public after years of spin, sleaze and lightweight Government.

And we have a social crisis. All the problems we are so familiar with – drugs and debt and family breakdown – and worst of all, the subject Theresa and I are responsible for in this Government: crime.

These crises have at least one common cause. New Labour.

New Labour was all spin and no substance – campaigning and no principle.  We now have to sort out the disgraceful waste that is their legacy. Our first duty is to reduce public spending, cut the deficit and get the economy on its feet again. I am, and I remain, an advocate and whole-hearted supporter of the strategy that George Osborne set out yesterday. But we are not mere cutters. We cut because New Labour left us no choice. But we will define our Government not by our competence as financial managers, but by our political beliefs.

Any fool can just lop percentages off every item of his budget. I do not want to carry on doing what Labour was doing and just spend less money on it. We have to do this better. We have got to be the radical, reforming, improving government this country needs so badly. For me it’s personal. I am a deficit hawk.

When I was Chancellor of the Exchequer I cut spending and I cut the budget deficit to promote economic growth, and it worked. But I am also proud to call myself a reformer. I passionately want to see reforms that will improve our public services, in health, education, welfare and justice – alongside the necessary action to cut the deficit.

Let me start with the reductions in spending. The first thing I did when I walked into the Ministry of Justice in May was order a review of the department’s own administration. You’ll see the results of that in a few weeks’ time. My intention is that the biggest single reduction in spending at the Ministry of Justice will be in the running costs of the Department – from the headquarters to the edges.

And when you sort out the spending you can start to sort out the service itself. From long, painful experience, I can tell you: to throw money without reform at any public service is useless.

The only money my Department will spend is money combined with well-judged change to improve the protection against crime we must give – to society, and to the victims of crime.

We will go back to first principles. Ask what it is that the taxpayer should be paying for.

Let me be clear about what I have always said and always believed about crime and punishment.

For serious criminals, prison is the best and only sentence. It is the punishment for serious crime that society expects and accepts. Career criminals and violent, dangerous criminals should be in prison – not roaming our streets.


But prison needs to do more than keep criminals off the streets. It must try to prevent them from committing more crime against more victims when they come out. The biggest failure of the present system is reoffending. Nearly half the people in prison come straight back out and commit another crime in less than twelve months. Absurd.

Under New Labour, we had an underclass of people in our broken society who walked out of jail and straight back into crime, again and again. Fifty three thousand criminals were jailed for six months or less in 2008. Nearly two thirds of them committed another crime within the next year and were sent straight back to prison again. And that was only the ones who were caught and convicted again.  Thousands of further crimes against new victims. Quite absurd.

We said we were going to tackle that when we were in Opposition. We called it a Rehabilitation Revolution – Prisons with a Purpose. It was a Conservative election policy, not a Liberal Democrat one.

And what about my tough talking New Labour predecessors.  Were they on top of the problem?

They certainly tried to sound like they were.

They tried to sound tougher and tougher – outflanking the noisiest man at the bar of the Dog and Duck. But it didn’t seem to bother them that for all the cash they threw at the problem of crime and punishment they did nothing to reduce reoffending.

What happened instead?  This is a Department of Government that really exploded. The number of prisoners grew by more than a third under Labour. Spending on prisons went up by the same amount – a third in real terms. Probation costs shot up sixty per cent. And the rate of reoffending – the new crimes committed against new victims by prisoners recently released – well of course that went up too.

And they were reduced to the absurdity of releasing thousands of prisoners early before they had finished their sentence. What a waste. What a failure.


We can’t go on like this. We need reform that is radical and realistic. Reform focused on results, not processes, not spin doctor headlines.

My aim is to make prisons tougher places of hard work and reform for the criminals who should be locked up;

Make community sentences that really are tougher and more effective for those who don’t need to be locked up;

And cut crime creation out of the criminal justice system by paying by results organisations and investors who actually succeed in reducing reoffending.


Let’s start with prisons.  We need, in my opinion, to instill in our jails, a regime of hard work. Most prisoners lead a life of enforced, bored idleness, where even getting out of bed is optional.

If we want to reduce the crimes these people will commit when they get out, we need as many as possible to get used to working hard for regular working hours. The ones prepared to make an effort need new opportunities to learn a trade. We have to try to get those with the backbone to go straight, to handle a life without crime when they have finished their punishment.

So we will make it easier for Prison Governors to bring more private companies into jails to create well-run businesses employing prisoners in 9 to 5 jobs.  There are already some excellent examples to build on. Timpsons, who train up prisoners to work in their national network of shops.

The National Grid and Cisco Systems also go into prisons to offer training and the prospect of a job and a life away from crime at the end of the sentence. I hope to see many, many more companies like these stepping in and offering their expertise to organise productive industries in many of our prisons.

And I want to revive a policy that I was always keen on in John Major’s last Conservative government. Making deductions from the earnings of working prisoners to provide restitution for the victims of crime.

Do not worry.  I have not become some woolly-minded idealist since I was last a reforming Minister.

I am under no illusions about the British criminal class – I met plenty of them during my time at the Criminal Bar. As well as a few since.

I’ve never been in favour of mollycoddling criminals. Dangerous offenders must always, and will always be punished with prison. But let us not deceive ourselves that the previous Government left 85,000 serious gangsters in prison, that our prisons are only populated by muggers, burglars and violent and dangerous individuals. We have 11,000 foreign prisoners in our jails. Our prisons contain thousands of anti-social petty criminals who fail to behave themselves in everyday life.  Almost half are illiterate or innumerate. Almost half are mentally ill. The majority have a history of drug abuse.  Sadly, far too many are former members of our armed services.  Drifting along in lives of crime which their victims pay for over and over again. Too many go into prison without a serious drug problem and come out addicts. Ready, desperate, to commit more crimes to feed their habit. We have to do better than this.

We are working on plans to produce drug free wings in prisons to start to stamp out this drugs menace.

We need radical, realistic reform.  If we want to be safer in our homes, knowing we’re less likely to be burgled… If we want our children to be able to walk home safely from school… Then we have to get sentencing policy right. That is why, as part of the sentencing review which will be published as a Green Paper later in the Autumn, we will look again at how we treat offenders who might be prevented from committing more crimes as soon as they are released.

Under New Labour, there weren’t enough tough, demanding punishment options for judges.

We have a real job on our hands to give judges those options. To improve punitive alternatives to prison. I do understand what the problem is with so-called Community Sentences.  The public don’t think   they’re tough enough.  Judges and Magistrates aren’t confident that they’re tough enough.  Well let me tell you that I have never thought that they were tough enough.  The answer to that cannot be to give up.  It must be to make community sentences as tough, respected and effective as they are in countries like France and Germany.

When we consider how to reduce re-offending by rehabilitating released prisoners or providing tougher community sentences, I am interested in one thing – what works.  Value for taxpayers money is best achieved by paying – not for good intentions – but for results.


We will pay for fewer crimes. Fewer victims.

We can challenge the independent sector, charities, voluntary bodies, the private sector and the public services. You develop schemes that do cut reoffending, in prison or in the community, and we’ll pay you to do it – if, and when it works.

And the more new schemes that produce results, the more we can be sure that taxpayers’ cash is being spent on things that actually work.

The well-intentioned, interesting, theoretical idea with no outcome will simply melt away.

Last month we launched the first of our projects of this kind – in Peterborough. Run by a company called Social Finance, it will be paid for to the extent that it succeeds in preventing offenders from committing more crimes against yet more victims when they are let out of Peterborough prison.

I visited the Peterborough project and I’ve seen how it can work. I’m an enthusiast. So I can tell you today that we will be starting up a range of similar schemes in England and Wales in the New Year. We will look at bids from serious groups who want to take whatever approach they believe in – from boot camps to more therapeutic options. And the taxpayer will pay for – what works and what cuts crime.

Radical, realistic reform that will cut crime and do it in a way that shows real value for money for the taxpayer.


I believe history will remember the Cameron coalition Government as radical and reforming.

We have inherited a disgraceful crisis, bequeathed to us by a discredited party that with any justice will need years to change itself before it will be considered fit for office again.

I remember the 1979 leadership campaign…I’ve served in Governments before.  I’ve never served in one facing a crisis on this scale. I’ve served in Governments that started well. But I’ve never served in one that’s started better than this.

I am quite delighted to be in this coalition government which is remarkable in its unity, determination and purpose.

After the election David Cameron and Nick Clegg responded to events with vision and speed.  This Government is delivering the strong and stable government the national interest demands.

Had we failed to form a Coalition it would have been a disgraceful dereliction of duty. We are proving that politicians can set aside party political battles when the national interest demands it.

Once more it is a Conservative Prime Minister, with the political will to put the national interest first, whose fate it is to inherit a poisoned Labour legacy.

And if we continue as we have started, we are up to the challenge. David Cameron will provide the leadership this country needs.

We will provide the support he needs.

Together we will return this country to economic stability and growth. To 21st century quality public services we can afford.

And to a global reputation for the civilised and responsible Government that our Conservative Party has always stood for.

Ken Clarke – 2009 Conservative Party Conference Speech


Below is the text of the speech made by Ken Clarke on 6th October 2009 at the 2009 Conservative Party Conference.

I have done this a few times before – and I still enjoy it. Those who have followed my political career from afar and those who know me well will probably agree that I am not one of nature’s pessimists. I am trying to delay becoming a grumpy old man. I am also a realist.

And it is the realist in me that says we are set to take over the biggest mess that a Conservative Party has ever inherited from a Labour government.

It is amazingly true that Labour always winds up leaving behind an economic disaster. It has happened every time since the war. But this is far, far worse. It’s worse even than Margaret was confronted with in 1979.

So yet again it is our duty to repair the damage after those years of recklessness, and prepare the UK for a better future.

A lot of that work is economic. Above all the sound management of the public finances, which George and Philip spoke about this morning.

No-one believes Alistair Darling when he talks of halving the public debt in four years.

Gordon Brown wants to introduce a new law to make it illegal for Alistair to be as irresponsible as he, Gordon Brown was when he was Chancellor. What useless gesture politics.

Past sinners promise that they will be prosecuted in future if they sin again. George Osborne’s strong sensible policies on tax and spending and debt will be necessary – but will not be enough on their own.

Our debt crisis is not only the result of reckless spending. It is also the fall of tax income. A crazy financial bubble brought big fluffy tax takes into the Treasury. Gordon Brown spent it all in full – then borrowed more on top.

Now tax revenues from corporation tax to fat cat income tax have fallen off a cliff because the City, banks and business all crashed into recession.

Spending has gone up. Tax revenue has gone down. Result – colossal and mounting debt.

George has boldly and correctly declared the need for spending cuts. He also needs revenue. We need successful business to create wealth, jobs and economic growth – and profits from which to pay taxes.

I have been through more public spending rounds than most people have had hot dinners. I admire George Osborne and Philip Hammond and I completely trust them to succeed at that task. They have the hard bit of the problem. I and my team have the fun bit – getting the climate right for the best of British business to succeed again and to create the wealth and security for future generations.


New Labour has been a burden and a handicap on business that we can no longer afford. The world of New Labour is more bureaucratic than anything we have ever known. An over-powerful executive, bigger government, an ungovernable bureaucracy. We all feel it in our daily lives. Businesses, in particular small businesses, face far more than their fair share of it.

How much does it cost? Estimates vary. Everyone agrees it is a great and still growing burden. For our entrepreneurs it is not just money, it is wasted time.

The Federation of Small Businesses says its members now spend on average seven hours a week on official form-filling and red tape of one kind or another. The people who run the health service, education and the police would tell you the same.

To get Britain back in business, the excessive regulation that businesses – and the great public services – face has to be swept away. Managers should not have to deal with excessive regulations, countless government quangos and too many inspectors of one kind or another, when they ought to be getting on with making their businesses survive and grow, their public services improve and creating new secure jobs .


The instinctive dislike that we Conservatives feel for excessive bureaucracy is anathema to Labour. One thing New Labour never lost was the idea that the gentleman in Whitehall knows best. Socialists thought, and New Labour still thinks, that politics and government have the answer to everything. They can’t hold themselves back from wishing to have a policy on this, an initiative on that, a public protection intervention of one sort or another. Whenever we have a Labour government, government just gets bigger.

I don’t think any of this regulation, bureaucracy or legalism was ever introduced for malicious motives. The well-meaning nanny state is at the very heart of this system. A sort of puritan belief that everything can be so perfected that no risk of any kind is ever going to be taken. Parliament churns out legislation like a sausage machine. The tax code is twice as long and complicated as it was in my day. And British life and British business suffer.


We are publishing today a paper which was outlined earlier by John Penrose, which sets out our plans to win the battle against red tape. We need to protect the highest standards of health, safety, fair trading and honesty in business life. We are not going to lower standards. We do not need mountains of forms, thousands of non-jobs, hundreds of quangos in gleaming office blocks to achieve that. Regulations based on achieving outcomes rather than just blindly following box-ticking procedure, will actually work better.

John Penrose’s paper sets it all out. It is solid policy. It is a worthwhile read. We will introduce a system of regulatory budgets across government, that means that no new red tape will be introduced without a compensating cut in the costs and burden somewhere else. We will give each regulator and quango a ‘sunset clause’. That means they will automatically cease to exist after a set period unless they can prove their continuing usefulness. Finally, we will create a stronger and more assertive Parliament which can scrutinise new laws more effectively. We need better laws not just more laws.


This part of our policy passes my favourite test for economic policy making.

I’ve always thought that the most important job of the Business Ministry – and the Treasury come to that – is to make it easier for the small businessman in the Midlands to make his living, to produce a bit of prosperity and create some jobs. That was a guiding principle I often stated when I was Chancellor. It should be our guiding light now.

The question ministers must ask themselves is – are we making it easier for that businessman or businesswoman to thrive or not? And half the time, as they will tell you, this government’s getting in the way.

We are in the final stages of developing policies in many other areas. To plug the gaps in the venture capital market. To provide more apprenticeships and training opportunities. To develop our science and engineering. With James Dyson’s help, to ensure that our innovations in science and engineering are translated into businesses, services and employment in this country and not lured away by better business conditions for enterprise abroad.

Today – Deregulation. We will have to strive to provide the right environment for businesses, large and small, to grow. For if you succeed on that score, you provide the growth, the tax revenues, the jobs and prosperity which come with it. That is how to get out of trouble. Britain must be open for business again.


We need big British business as well. Big business needs to work with government in different ways. It needs government alongside it in markets across the world, where there is a political content in marketing. There are plenty of countries in the world where the government has got to be supportive to enable its own businesses to be in with a shout.

We don’t believe that Government can create national champions but those that emerge become our national champions, and we take pride in them. Some modern businesses require multinational scale, to be a success and take their fair share of the jobs and the prosperity that come from great new industries.

The UK’s future depends on these great industries – increasingly in new areas like high technology manufacturing and the creative industries. That means rebalancing our economy away from dangerous over-dependence on areas like financial services.

Try telling business people or politicians from the States, Germany or Japan, that you can have a successful wealthy economy without having any manufacturing. Only the British came to believe that. In 12 years of Labour Government, the number of manufacturing jobs in Britain has dropped by more than a third. We have paid for the error. Britain has to make things again.


The future lies in nurturing high-added value, technologically advanced, scientifically innovative, well-managed, aggressively marketed companies. Providing our young people with all the skills and the ability to contribute to those fields.

That is the mission on which all our team was focused when we presented Get Britain Working yesterday.


If an individual who wants to develop his own business can’t feel the Conservative Party is a friend, what exactly are we about as a centre right party?

If we say we all believe in free market economics then aren’t small businesses the best manifestation of the best qualities of free market economics?

If we want to have social mobility – and we do – have more small business.

If we want to have a less bureaucratic society, have more small business.

If we want to create jobs, have more small business.

Can we leave it to Brown and Mandelson? Led by David Cameron and George Osborne we need to do it ourselves.

Peter Mandelson displayed theatrical talents which we never suspected last week. From next May onwards he could have a future on the stage – and not just as a pantomime villain. He said I sometimes agree with him.

Yes I did – responsibly and in the national interest – agree with him on the future of Royal Mail. We agreed with him when he took his Bill through the House of Lords. And what happened? That weak and dithering Prime Minister – Gordon Brown – has stopped him bringing his Bill into the House of Commons.

Peter Mandelson’s boldest policy is now a symbol of paralysed indecision while the Royal Mail slips into insolvency and strikes.

So where has Peter Mandelson made his biggest mark on British politics so far? Ironically he is the man who saved Gordon Brown from the incompetent plotters in the Labour Party who were trying to overthrow him twelve months ago. That was the whole point of the Mandelson come-back. But for Peter Mandelson, Britain would have thrown off the burden of Brown as Prime Minister. Why, oh why did you do that Peter?

Gordon Brown contributed to the global crash by his failed reforms of bank regulation and his reckless Government borrowing.

Brown denied the crisis was here when it first hit us.

Brown denied that debt was a problem or that any of his spending and borrowing was unaffordable.

Brown was denying the need for any cuts at all in public spending or borrowing until only a few weeks ago.

For Britain, Gordon Brown is and was a large part of the problem – he can play no part in the answer.

So, as one comeback kid to another, Peter, why did you save Gordon Brown for the nation? The nation is not grateful.

And what is Gordon Brown’s main legacy going to be to the people of Britain? A terrible surge in unemployment.

Who would have thought it – that a Labour Government – a Labour Government – would ever preside over the biggest rise in unemployment in a single quarter since records began. Would Nye Bevan ever have imagined that twelve years of Labour Government would end with one in five young people under the age of 24 unemployed? That is the legacy for real people of Gordon Brown.

When I first started coming to this Conference – a long time ago – my great hero was a man called Iain Macleod.

Iain is, alas, little remembered now – he died in 11 Downing Street after a few weeks only as Chancellor of the Exchequer.

I can remember him charging the Party Conference with a striking phrase.

Labour was about to leave an economic mess behind to a Conservative Government. A mess it was but Iain could never have imagined an economic catastrophe as bad as the legacy that New Labour will leave to us.

Macleod said “Labour may scheme their schemes, Liberals may dream their dreams, but we have work to do”.

Mandelson is a schemer. Clegg is a dreamer, Cameron and Osborne are highly intelligent decent young politicians who have what it takes to do the work. And you and I still have the work to do to put them into Downing Street to lead our country to future economic security and success – to make Britain a decent place to trade and do business again.

Ken Clarke – 2005 Conservative Party Conference Speech


Below is the speech made by Ken Clarke at the 2005 Conservative Party Conference on 4th October 2005.

I do not know about you, but I am fed up with our party losing elections.

We used to be members of a party that won elections. In fact, we won so many that we were able to change the political and economic landscape of this country

hugely for the better. In the 21st century, we can and we must do this again.

If you are sometimes fed up and angry with our plight – as I am – you have a choice. You can give up, bail out, and call it a day. Or you can get stuck in, decide to fight, and give it your all. That is what I intend to do – and I know it is what you intend to do.

So we come here today as a party with a purpose. It is to begin a great endeavour – nothing less than to make our Conservative Party once again the natural party of government in this country.

In winning power, the economy will always be at the heart of the debate, and rightly so.

You can have marvellous policies on every other subject, but if you do not win the argument on the economy, you are sunk. You are left with a political doughnut with an enormous hole in the middle.

I do not have to prove my economic competence to the British public. I won my reputation over four years as Chancellor.

Remember the strong economy which Labour inherited from us in 1997: low inflation; steady growth; falling debt. We were creating a modern enterprise economy.

We worked for it. We achieved it. Labour has profited from it.

Up until now, Gordon Brown has had a good run, on the back of the tough decisions which we took a decade ago.

But today the British economy is at risk. At risk from big spending, from high taxes and from too much debt.

He’s already spending tomorrow’s taxes today. He is keeping the economy afloat on a sea of debt.

Growth is slowing rapidly and unemployment is on the rise. Families across the country find themselves burdened with a trillion pounds of household debt.

Consumers are cutting their spending and our retailers are feeling the pain.

Initially Mr Brown was in denial. Now even he has finally admitted that his forecasts for economic growth were wildly optimistic – as every expert said.

His “golden rule” turned out to be fool’s gold.

He even had to change the starting date of the economic cycle to include the two years of surplus that he only achieved by sticking to my spending figures when

Labour came to power. I suppose you might call it a compliment.

The tragedy is that Gordon Brown could have done great things with our inheritance. But he’s blown it. He has turned out to be just another tax and spend Labour Chancellor, but on a lucky streak.

No wonder he is anxious to move next door!

In fact, I have never seen a man more impatient to leave his job. His office is all packed up. The good-bye drinks are in the diary. He knows where he wants to hang his pictures in Number 10.

The only problem is – the boss won’t budge. But even if he does, there’s no escape. Brown’s legacy will haunt him; we’ll make sure of that.

The fact is that the Labour Party has never really understood how a modern, successful market economy works. They just don’t get it.

Where our instinct, as Tories, is to set the people free, theirs is to organise, regulate and control. It is in their very blood-stream.

I say this: Let us never, ever allow the achievements of the Thatcher years to be thrown away. To be salami sliced – Labour slice, by Labour slice – until there is nothing left.

The corner-stone of our prosperity, and the key aim of our years in power, has to be the rebuilding of an enterprise culture in Britain.

We have to fight and win a new battle of ideas in favour of better but smaller government in the 21st century. That is the best way of making Britain prosperous and free.

When we left power, we had almost succeeded in getting public expenditure down to 40 per cent of our economy. I cut the share of national income spent by government by 2.5 per cent. It may not sound a lot, but it’s a huge amount of money.

This 40 per cent target – the key to stopping the remorseless growth of government in the modern world – should once again be our goal. If the Government takes 40 per cent, the rest is available for our entrepreneurs to create wealth and jobs.

Since we left power, taxes in Britain have risen and become far too complicated. Of course a Conservative government will aim to reduce and simplify our taxes.

But this will not be easy. When it comes to tax, like many things, it is better to under-promise and over-perform. But the direction we want to move in should be clear – and we should stick to it.

I am the only person in today’s House of Commons ever to have made real reductions in income tax: I cut 2p off the basic rate.

When Gordon Brown shaved a penny off, he quickly slapped it back on National Insurance. His reduction was cosmetic; my cuts were for real. That’s the difference between Conservative and Labour.

Anyone in this hall who does not believe in a low-tax economy has come to the wrong party conference. In government, there will be work to be done to achieve that.

Low taxation will be the prize but only if we first reduce debt and control spending. We demonstrate all over again that it is possible to have modern public services and still keep growth of public spending below the growth of the real economy. That is the art of good government in the modern world. It is the art all good Conservatives have mastered.

The economic management of the fourth largest economy in the world is an enormous responsibility which the Conservative Party wants to take up again.

When we take over, we will find that the books have been cooked by New Labour.

We will have to produce the first honest public accounts that Britain has had for many years before we discover the true extent of the problems we face.

We must prove that we have the competence and the courage to deliver economic success. Labour has always left economic failure behind them. They are going to do it again. It will fall to us to once again to pick up the pieces and enable Britain to remain a strong economic power in the modern world.

This is the third party conference in three weeks with a leadership contest.

Charles Kennedy just hung on – that is good news.

Labour’s two big beasts yet again locked horns over when one should hand over the baton to the other. I would not put those two in a relay team!

We Conservatives now have to choose an even bigger beast than either of them – to push Labour out of office at the next general election and return us to government.

I do not just want us to win the next general election so we can set Britain on the right economic road again. I want us to win because of the damage that I believe Tony Blair and New Labour are doing to the way we are governed.

I believe that New Labour has undermined the health of our democracy.

They have abandoned the proper processes of Cabinet government.

They have turned the great Secretaries of State into the lackeys of Downing Street.

They have doubled the number of political advisers.

They have changed the rules so that those advisers can now invent policies and bully civil servants about.

They have treated Parliament with a mixture of indifference and contempt.

They have sidelined local government and created a proliferation of quangos.

Their obsession with press headlines and media moments has taken over our political system.

Much of our problem as a party is that people do not trust us. It is not that they do not trust us because we are Conservatives. They do not trust us because we are politicians.

We must show that we are different politicians who believe in Cabinet Government, accountability to Parliament, an independent civil service and who aspire to be the servants of the people and not their masters nor their deceivers.

Mr Brown is now putting it about that things will be different if he makes it to No. 10.

Fat chance! A Brown government will be control-freakery elevated into a principle of Government. There is no Minister more obsessed with personal control of every corner of government than Mr Brown. There is no Minister who has been more dismissive of his colleagues and his officials. There is no Minister who worries more about what the headline will be in tomorrow’s papers.

I would not dare say that Gordon Brown is “psychologically flawed”. I leave that sort of thing to No. 10. I do say that Mr Brown is a team player – who believes in a team of one.

He will seek to run every part of government with the same compulsion to intervene he has shown as Chancellor. And when it all goes wrong, he will simply try to blame someone else.

With Mr Blair we have had a president; with Mr Brown we are going to have an emperor. We must make sure that this would-be Napoleon meets his Waterloo.

As Conservatives, we have a strong set of values in which we deeply believe: strong defence, low taxation, smarter and honest government, market economics, law and order, the family.

Our philosophy is rooted in the tolerant instincts of the British people. It places its faith in the individualism and civic energy of our citizens.

These are my values and always have been and they are our values as a party. I believe they are values shared by a clear majority of our fellow citizens.

Tony Blair has tried to steal some of our principles and our policies – against the instincts of his own party. He has been a huge political cuckoo sitting right in the middle of our nest.

Gordon Brown told the Labour Conference that they were going to dominate the centre ground. Oh no, they are not! The time has come to take back the political ground that should be ours. It’s time to start winning again.

David Willetts keeps telling us that we will all need to work harder and retire later. I am determined to do my bit.

I have put in a job application for a new, rather demanding job this December.

That job will be to lead this party back to power and to lead this country into a better, more confident future.

I may not be everyone’s cup of tea, but I promise you this. If you give me the chance to lead this party, I will lead it unspun. I will say what I think, and try to do what I say, as I have always done in politics.

The question we have to answer is: do we really want to win?

When I ask myself why do I fight to get re-elected to Parliament again, why do I hurl myself upon the spears of yet another leadership election, why do I tangle daily with the media and still feel the same tingle of excitement that I did when I first started my political career? It is because I want Conservative values to win again and, with you, to return to our task of making this country an even better place to live in.

Fellow Conservatives, let us win together.

Ken Clarke – 1996 Budget Statement


Below is the text of the 1996 Budget Statement made by Ken Clarke, the then Chancellor of the Exchequer, in the House of Commons.


Mr Deputy Speaker, the British economy is today prosperous and successful. This Budget will make it even more prosperous and an even bigger success over the coming years.

When I presented my first Budget in 1993, it was against a very different background from today. Although the recovery had begun, consumer confidence had not yet returned. Growth was not yet firmly established. Further firm action was needed on the public finances, and our critics were peddling doom and gloom.

The recovery is now in its fifth year. Consumer confidence has returned and we are achieving something unprecedented for a generation – growth with low inflation and without a widening trade gap. But one thing has not changed – our critics still peddle doom and gloom.

In my first two Budgets I curbed the growth of public spending and took firm decisions on tax, which have brought borrowing down by almost half since 1993.

Last year, in my third Budget, I was able to return to cutting tax while spending more on the public services which people care about most – health, schools and the police – and keeping borrowing on a firm downward path.

This year, I am presenting a Budget which builds on my last three. It reduces public spending plans further, while providing more money for priority services. It makes responsible progress on our tax cutting agenda, while getting borrowing down faster. This is not a reckless Budget on tax or spending. In the run up to Christmas I am not going to play Santa Claus, but this year I do not have to play Scrooge either.

I have one overriding aim – the lasting health of the British economy. We are securing that by creating the best conditions for British businesses and British men and women to earn a living. All my Budgets and all my policies have been designed to set this country on course to be the strongest industrial economy in Western Europe in years to come.


The British economy is in its fifth successive year of steady, healthy economic growth, with falling unemployment and low inflation.

These are the best circumstances we have faced for a generation.

This is a Rolls Royce recovery – built to last.

The IMF and the OECD expect the UK to be the fastest growing major European economy again next year.

By next year we will have grown faster than either France or Germany for 5 years in succession for the the first time in half a century.

This time – unlike so many previous recoveries – healthy growth has been accompanied by the best inflation performance for nearly 50 years. And restrained growth of earnings has been good news for jobs.

The British labour market has become our flexible friend. Employment began to rise sooner and unemployment began to fall sooner than in the previous recovery. Growth creates jobs quicker in a flexible labour market.

The OECD have praised us for having one of the least regulated labour markets in the industrialised world. High social overheads, minimum wages and unnecessary legislation do not protect workers – they cost jobs. Unemployment is still rising in France and Germany. It has fallen sharply here, to its lowest levels for over 5 1/2 years.

In the bad old days recoveries were derailed by balance of payments crises. In this recovery, the current account has actually improved, despite the slowdown in our main European markets. In fact we now have a current account broadly in balance – our best overall trading performance for nearly 10 years.

Economic policy

Mr Deputy Speaker, I want to ask the British people – in the years ahead do we seriously want to be prosperous? I think we do. If so, we need an economic policy aimed at the next 5 years, not just at the next 5 months. We want an economic policy that will go on delivering our enviable combination of rising prosperity, low inflation and more jobs. That is my purpose in this Budget. This Budget secures a prosperous future for all sections of our people and their families. It is a Budget not just for today but for tomorrow. This is a sensible Budget for growing prosperity.

The last thing the British economy needs now is a change of direction.

We need at least another 5 years of this Government’s continuous vigilance on inflation.

We need more of this Government’s determination to get government borrowing down.

We need another 5 years of this Government’s commitment to raise the wealth-creating potential of the British economy, by improving incentives, reducing the role of the State and creating a climate for enterprise.


I expect the British economy to grow by 2 1/2 per cent this year and 3 1/2 per cent next year – and there are few serious commentators who will disagree with that.

By keeping a close eye on the prospects for inflation up to 2 years out, and by taking sensible early action if and when necessary, I intend to ensure that healthy growth continues without inflationary pressures emerging. That is what I have always promised – no return to boom and bust.

Consumer spending

I expect consumers’ expenditure to continue to be the main engine of growth next year. The real value of take home pay is growing strongly.

The housing market recovery is firmly established. I hope that negative equity can soon be consigned to the economic history books.

People are feeling the improvement in their family finances. Consumer confidence is at its highest levels for over 8 years.

I expect consumer spending to grow by 3 per cent in 1996 as a whole. But it has been strengthening through the year. I expect stronger growth to continue, with consumers’ expenditure rising by over 4 per cent next year.


But this recovery is not just about a more confident consumer. Businesses are optimistic too. The climate for business is excellent: strong demand at home and a recovery in our key export markets present British industry and commerce with tremendous opportunities.

Interest rates and tax rates remain low and profitability is high. The result has been business investment growth of 6 per cent so far this year. I expect business investment to continue to grow strongly: by almost 10 per cent next year.

These excellent conditions for business are not lost on overseas companies looking to invest for the future. Let us never forget the most valuable practical endorsement that we get for our sound economic policies. The United Kingdom remains the No.1 destination for inward investment into the European Union. Keeping our enterprise economy on course at the heart of Europe will keep us in pole position.


Exports have grown by almost 20 per cent over the last 2 years – an impressive performance in the face of weak demand in our key European markets. This achievement is down to our strong cost conscious British exporters. They will benefit further next year as the tentative recovery on the continent becomes more established. I expect export volumes to rise by over 7 per cent this year and 6 per cent next year.

The current account has been close to balance during the last 2 1/2 years, thanks to strong growth in exports and income from our investments overseas. I expect the current account to remain broadly in balance this year and next.


Our thriving economy is creating jobs. Employment has risen by over 3/4 million since the recovery began. Unemployment has fallen by almost a million from its peak. It will soon drop through the 2 million mark. This is still too high and I want it to go on falling and I expect it to go on falling.


We are on course to get underlying inflation down to our target of 2 1/2 per cent or less and to keep it there. In October, underlying inflation rose slightly, to just over 3 per cent. This should not have surprised anybody who looked at last year’s statistics. It is a temporary and inevitable reflection of the exceptional falls in the price level 12 months before.

Let me give you my concrete reasons for being so confident about low inflation. Apart from oil prices, which have risen sharply, commodity prices are steady and are not putting upward pressure on inflation. Earnings growth remains sensible and modest. Producer price inflation – a good indicator of what is in the pipeline for retail price inflation – is at its lowest levels since the 1960s. Producer input prices are actually lower than they were a year ago.

Any risk to this recovery from inflationary pressures reemerging remains a good way off. But as I have demonstrated again and again, when I see any risks, I will act. I will continue to stay ahead of the game on monetary policy. Eddie will keep me steady and I will continue to be canny.

I expect underlying inflation to meet our target of 2 1/2 per cent or less. I will ensure that it goes on meeting that target for the foreseeable future.


We have made good progress in reducing public sector borrowing, but not as fast as I expected. The Budget therefore targets public sector borrowing. One reason why I continue to concentrate so heavily on public sector borrowing in setting policy is because money spent paying the interest on our debt would be better spent on public services and to reduce taxes.

We are making good progress on bringing down borrowing, but lower than expected tax revenues mean that it has not fallen as fast as I expected in the last Budget. This is not bad news for everyone. People are no doubt quite glad not to be paying as much tax as I expected. As I am the Chancellor, I prefer to keep any tax cuts under my control.

The causes of these shortfalls in our forecasts of tax revenue, primarily on VAT, but also on direct taxes, cannot wholly be explained by any experts inside or outside the Revenue Departments. But there does seem to be an increasing tendency to exploit loopholes and use special reliefs in an artificial way to reduce tax bills. Those sort of tax cuts are unacceptable. If they are not tackled every year in the Budget, they mean that a few people pay less tax, but the rest must pay more.

In this Budget I will propose a number of measures to stem tax leakage, to protect the ordinary tax payer and make sure we get the right tax from the right people. When I reduce tax I want to do so in a way that is fair for businesses and fair for the hard working British man and woman.

Government borrowing has been steadily coming down for 3 years. This Budget will ensure Government borrowing keeps coming down. I expect the Public Sector Borrowing Requirement to be 26 1/2 billion Pounds this year. That will mean it has halved as a share of GDP over the past 3 years. I expect it to come down to 19 billion Pounds next year and to be broadly in balance by 1999-2000.

That pattern of declining borrowing is very much better than the one I had to put in my Summer Economic Forecast last July – 4 billion Pounds better next year. A large part of that improvement is the result of the measures I am taking in this Budget. This Budget tightens fiscal policy. I am tightening fiscal policy now to reduce the risk of having to tighten monetary policy excessively as I set policy to hit my inflation target.

My decisions are always taken solely in British interests to benefit the British economy. But my decisions in this Budget also mean that, by happy coincidence, we will meet the Maastricht debt and deficit criteria in 1997, and we will do even better than that in the medium term. It is a happy coincidence because those criteria make sound economic sense, with or without a single currency. Our option whether to join or stay out of a single currency, based on British national interest, remains a genuine choice for the next Parliament to exercise, when the time comes.

This Government is the champion of sound public finances, of limited government and of low taxation. Our combination of low taxation, low public spending and low debt is the best in Europe. We intend to stay in that enviable position. We can only do this if we continue to bear down on public spending.


In the 1980s, across the rest of Europe, the modern State remorselessly took an ever greater share of almost every nation’s wealth. We in Britain held the line. The proportion of GDP going into Government spending in the United Kingdom is now 8 per cent lower than the average in the rest of the European Union. If our spending had risen to their levels we would now have to raise nearly 2,300 Pounds a year more in tax from every British household.

I have set a target of 40 per cent or below for the share of national income that goes on public spending. Making progress towards this target means tough decisions on public spending every year. But this year we have had to cope with the costs of BSE and larger than expected increases in the costs of social security, as more and more elderly and disabled people receive benefits to which they are entitled.

Against this background, we had to keep the rest of public spending within the tightest possible limits, in order for us to spend more on the public services people really care about – education, combating crime and on our National Health Service.

This country has been well served by my Right Honourable Friend the Chief Secretary who has successfully tackled this problem. Despite all the difficulties, we have been able to reduce public spending plans over the next 3 years by a further 7 billion Pounds in this Budget. Public spending next year will be over 24 billion Pounds lower than was projected when I became Chancellor – a reduction of 7 per cent.

We have been able to reduce spending plans because we have lower inflation, falling unemployment, a continuing campaign for efficiency in the public sector and sensible policy priorities. On top of that, the Government’s relentless drive against fraud and abuse of tax and benefits will be stepped up another gear.

Next year we are going to meet our target of 40 per cent for the share of national income that goes on public spending. In last year’s Budget I said I would make 40 per cent in 1997-98. This year’s Budget secures that important goal. So long as we keep the growth in public spending down below the growth in the economy, we will go below that.


Education is the key to the future of any prosperous and civilised society. It helps to determine how well the economy performs in the long run. It also helps to determine the sort of citizens we are and the sort of society we have. This Government is committed to raising standards in education.

As a result of last year’s Budget 878 million Pounds extra was provided for schools this year. We are giving schools priority again in this Budget. Planned expenditure on schools will rise by another 830 million Pounds next year. A large proportion of this money – 633 million Pounds – will be channelled through the local authorities.

Judging by last year’s experience, some local authorities are reluctant to pass these increases on to their schools, preferring to spend the money on other areas. It is no good local authorities campaigning for more spending on education in the autumn and then spending their money on other things in the spring. Parents will want to make sure their local authorities spend money on the things they want for their children – good teachers and better equipped schools.

A good school has a value far and beyond its buildings. But the quality of school buildings in which our children are taught is still very important. We will be providing an extra 50 million Pounds on top of the previously planned provision for more capital investment to improve the fabric of our schools.

By setting high standards for schools and increasing choice for parents, this Government is delivering better trained and better qualified young people. Almost 1 in 3 young people now go on to university, compared with 1 in 8 in 1979. And our universities and colleges maintain some of the highest standards in the world despite the pressure on their unit costs that this unprecedented explosion of opportunity for young people has produced.

But I recognise this pressure and I also realise that our universities and colleges make an important contribution to the economy. My Budget therefore includes 280 million Pounds to boost further and higher education over the next 2 years. This includes an extra 20 million Pounds next year for science equipment. We want to ensure that the British science research base remains the best in the world, which it certainly is at the moment.

As the Secretary of State for Education and Employment announced in September, the Government is planning a substantial sale of student loans debt.

It makes no sense for the Government to keep a huge portfolio of loans on its books when the private sector could manage it more effectively and is better placed to cope with the risk. The sale will have no effect on the terms on which students can get loans. The substantial reduction in the figures for education that members will find published in the new spending plans is more than accounted for by the sale of this debt. We will actually spend more on the things that really matter – educating our children and young people.

Combating crime

This Government believes that effective law and order is an essential part of making Britain a nation at ease with itself. A good quality police service and an effective system of criminal justice, are high on the list of this Government’s priorities.

When it comes to spending on law and order this Government has a record as long as your arm. Spending on law and order has already doubled in real terms since 1979. Provision for combating crime – police and prisons – will now rise by another 450 million Pounds next year. Our plans provide for 2,000 more police constables by the end of next year. We are well on course to meet the Prime Minister’s pledge for 5,000 more constables.


Our British National Health Service, with treatment free at the point of delivery, is the envy of the world.

In every modern, civilised society the demand for better health care, for new techniques to save lives and improve our quality of life grows constantly. This Government completely understands that. That is why we have increased spending by some 75 per cent in real terms since 1979. That is why the Prime Minister has pledged more resources for the National Health Service in real terms every year, throughout the next Parliament.

We are also spending that money better. We have reformed the NHS so it is much better managed and much more efficient. When waste is reduced, more can be directed to higher quality patient care. This means that patients get more treatment and care out of every pound that we spend.

For next year, we will increase current spending on patient services by 1.6 billion Pounds, or 2.9 per cent in real terms. The real increase in current spending for hospitals next year over and above inflation will be 3 per cent.

On top of this, Private Finance Initiative investment will play an increasingly important role in providing new healthcare facilities. The PFI contract for the Norfolk and Norwich hospital scheme, worth close to 200 million Pounds, was signed yesterday, and others will follow. PFI investment in the NHS will reach some 900 million Pounds over the next 3 years on top of the increased public spending I am announcing.

The NHS will continue to grow and continue to improve. We are totally committed to the National Health Service as a public service providing high quality up-to-date treatment, free at the point of delivery.

By our decisions on public spending, we prove that the NHS remains at the top of the Government’s priorities. The NHS has been safe in our hands, it is safe in our hands and it will always be safe in our hands.

Other programmes

This year’s spending round was as tight as any I can remember, eye-wateringly tight, but we never lost sight of our objective which is to sustain and improve the key public services that the British public care about: education, combating crime and our National Health Service. In part we have achieved that by increasing efficiency within the priority services but inevitably we have also had to find savings in other programmes.

Falling unemployment and lower inflation has helped to reduce the social security and employment programmes. We are also continuing to transfer activities to the private sector where this is more efficient as it is for student loans. We have refocused the housing programme to encourage the use of private finance and the transfer of the local authority housing stock to the private sector. We are stepping up our programmes against fraud. We are continuing our remorseless squeeze on the costs of bureaucracy itself. And we have looked in every department for ways of achieving our objectives more economically. With efficiency savings, most departments will be able to deliver their programmes next year, but with less money in real terms.

Private Finance Initiative

People pay their taxes in order to get good quality public services, not to accumulate state-owned buildings. This simple truth has led to the development of the Private Finance Initiative.

The PFI helps to square the circle of sound public finances and growing demand for better and more modern public services by tapping the expertise and the resources of the private sector.

A year ago we had agreed 1.5 billion Pounds worth of deals – now we have agreed 7 billion Pounds, and we are on course to double that by March 1999. Time and again the taxpayer is getting better value for money, through new road schemes, new prison services, and Information Technology projects. And reforms to local government rules are bringing the PFI into new areas – notably schools.

London is currently experiencing a transport investment boom under the PFI: the Channel Tunnel Rail Link, Thameslink 2000, the Docklands Light Railway extension, and the A40 and A13 improvements. This is in addition to conventional public and private capital spending on the Jubilee Line extension, the Heathrow Express and the new A12-M11 Hackney Link. Investment in London Transport is now running at 50 per cent in real terms above the average for the 1980s. London will soon become one of the biggest construction sites in the country. As a man from Nottingham, I can only say that I hope London will be even nicer when its finished.

Adding traditional capital spending to PFI investment, publicly sponsored capital spending in the United Kingdom in the next three years will be substantially higher in real terms than it was in the 1980s.

Social Security

One third of all public spending goes on Social Security.

Our social security system is there to provide an income when people cannot earn because of sickness, disability, unemployment, caring for relatives or old age. People on the left and right of politics continue to search for a radically different and better way of meeting these needs in our wealthy nation. I have studied many of their proposals and so far, I am afraid, nobody has yet come up with anything remotely sensible or practicable.

Until they come up with a radical alternative, if they ever do, our welfare safety net must remain affordable. It must not be allowed to damage the incentives of individuals or businesses in the private sector, because it is the wealth-creating enterprise economy that sustains our social security system.

In the post-War period social security has grown in real terms by around 5 per cent a year. In recent Budgets we have taken action to bring that growth under control. We now expect future growth of 1 1/2 per cent a year. Well below the growth of the economy.

Year after year, this Government has also vigorously attacked fraud and has reformed benefits to target them on those in genuine need. The measures I now propose in this Budget intensify these efforts yet again.

We plan a further move to align the benefits paid to lone parents and couples with children. From April 1998, new awards of Family Premium and Child Benefit will be the same for lone parents and couples. And we are introducing a number of measures on housing benefit and Council tax benefit to ensure that those on benefits do not have a more comfortable lifestyle than those who are supporting themselves on modest incomes. That would be unfair and unwise. Full details will be made available later today by my Right Hon. Friend the Secretary of State for Social Security.

In my Budget two years ago, I announced a whole package of measures to help the unemployed get back to work – from improvements to the Family Credit System to National Insurance holidays for employers taking on long-term unemployed people.

In this Budget I am providing another 100 million Pounds of new money, mainly targeted on people who have been unemployed for 2 years or more. They will be required to attend a compulsory programme of interviews with the employment service to give them a helping hand to compete in our ever improving market for jobs.

We are expanding Project Work pilots to a further 28 areas. This will create up to 100,000 new opportunities, on a programme with a good track record for getting long-term unemployed people back to work.

I can also announce pilots for a new scheme called “Contract for Work”. Private contractors will help people to find work. These firms will be paid by results. As with Project Work, if the scheme works better than the existing approach, we’ll expand it.

Dependency impoverishes us all. The welfare system should provide a safety net. It must provide the support that a caring society wants to give to our less fortunate fellow citizens. But the welfare system must never become a way of life. We do not want our social security system to be undermined by resentment. We have to take these careful measures because we are serious about protecting those in genuine need and we want to go on delivering that protection for the future.

Spend to save

We want to combine a strong affordable welfare system with a successful low tax economy. That means that when we spend money on social security, it must only go to those who need it. It also means that when we levy taxes we must make sure that they are paid by those who ought to pay them.

As part of our continuing fight against tax and benefit fraud and tax loopholes, I am introducing a package of measures called “spend to save”. This involves spending modest amounts of money – carefully targeted – to save much more money, and to raise revenue.

There will be more money next year to clamp down on benefit fraud. There will be more visits and checks on benefit claimants in high risk groups. And the information we already have on benefit claimants will be used more effectively to catch cheats.

Inland Revenue tax experts will be redeployed to investigate even more rigorously how some big, sophisticated companies seem to pay so little tax. They will make sure that companies are paying what they owe. And what we intended they should owe. In short, we intend to do more about companies being “economical with their tax”.

There will be more resources in the Revenue and Customs to stem the growth of the shadow economy. Tax cheats put law-abiding small entrepreneurs out of business. We all lose from that.

There will be more Customs and Excise Officers to tackle VAT and other tax abuse, including yet more to target the smuggling of alcohol and tobacco.

The “spend to save” package will cost 800 million Pounds over the next 3 years to secure, in a well-planned and measured way, revenue and expenditure savings of well over eight times that amount, 6.7 billion Pounds.

Running costs

“Spend to save” protects the ordinary taxpayer and the people in genuine need of benefits. It is not about more bureaucracy or more red tape. We remain a Government committed to deregulation. And committed to a more efficient Civil Service.

We have cut overall Central Government departments’ running costs by 8 per cent in real terms since the start of this Parliament and we are going to reduce them by a further 7 per cent by the end of the decade. Civil Service numbers are already below 1/2 million, and we expect this fall to continue.


The first duty of Government is to make sure that people can live their lives as they want and that businesses can flourish. People must have the opportunity of a good quality job to go to, a good standard of living, good schools and hospitals and safe streets to live in. Only when those essentials are secure, and only when the Government has made sure that it is not borrowing more than it should, can a Government think about tax cuts.

Last year I cut taxes paid by the ordinary family and this year I am able to cut a little more. I think that the message I have repeated over recent months has now been understood. If there are to be tax cuts, they must be for keeps. They must be backed not only by sound spending decisions but also by a sound fiscal judgement.

Consumer spending is strong and inflation remains in check. But a fiscal stimulus to the economy at this stage could be just as damaging as letting go of monetary policy. So, in setting my Budget, I have struck a careful balance.

I want to cut taxes, but first I have to continue my drive to secure the tax yield. I have to make sure that tax due is turned into tax paid. The balance of the tax burden must be distributed sensibly and fairly and it must not distort decisions or competition.

I am introducing a number of measures which will help us to achieve this. I am plugging some loopholes, ending some tax reliefs that have done their job and adjusting some indirect tax rates.


Even though VAT revenues have revived in recent months, they are still coming in significantly below what was expected last year. This Budget includes a crackdown on some of the clever wheezes that have sprung up to get around paying VAT. These measures will raise 3/4 billion Pounds in revenue next year, but they also protect a further 1 1/2 billion Pounds a year of existing revenue from further attack.

Customs will restrict access to special VAT schemes for retailers. We will also tighten up the rules of VAT relief schemes for bad debts, and the option to tax commercial property, to prevent widespread abuse of these reliefs. I also propose to take steps against retailers who reduce their VAT bills when selling insurance with their products.

We announced a 3 year limit on repayments of VAT claims. This was a sensible precautionary measure. Recent high profile court cases have revealed the potential exposure of the Exchequer to claims for tax going back to when the tax was first introduced. No responsible Government could leave the Exchequer, and, ultimately, all taxpayers, exposed in that way. Government needs to strike a balance between what is fair to the individual taxpayer, and what is fair to the whole body of taxpayers. The three year cap strikes that balance.

But one feature that attracted particular criticism from accountants and their clients was that Customs still retained the right to claim underpaid tax going back six years. This argument was rather disingenuous because Customs do not claim underpaid tax on unexpected changes to the interpretation of the law when those go against taxpayers. However, Government must not only be fair – it must be seen to be fair. I have, therefore, decided that Customs’ right to claim underpaid tax, in cases where no fraud or malpractice is involved, should be restricted to three years as well.

I will be releasing details today of a package of measures to stamp out tax abuse in a number of areas including leasing transactions, the abuse of foreign tax credit rules, and paying employees in their own company’s shares. I am sure these will be accepted as necessary and sensible measures to stem the growing loss of tax revenues. And to protect the ordinary tax payer.

I will not tolerate tax abuse. A number of these measures are being introduced, subject to the Finance Bill becoming law, with effect from today.

Special tax reliefs can be a powerful tool. They can play an important pump-priming role, encouraging companies and individuals to change their behaviour in a way which benefits the wider economy. But by their very nature, they need to be used very selectively. We owe it to the ordinary tax payer to keep each and every special tax relief under constant review to determine whether it is still justified, or whether it has now served its useful purpose.

Profit Related Pay

The tax relief this Government introduced in 1987 to promote profit related pay schemes has been a success. It has played a key role in reinforcing this Government’s strong beliefs that employees’ rewards should depend on the success of the business for which they work.

I have always believed, and argued publicly for years, that in a modern enterprise economy people’s pay should be closely linked to the performance of the business for which they work. The best way for businesses to motivate their staff is to let them share in the rewards of success. I am delighted that tax reliefs have helped to get this idea accepted so widely.

The tax relief on Profit Related Pay was always intended to be a pump-priming measure. As Nigel Lawson said in 1986: “There is considerable inertia to overcome, so it might make sense to offer some temporary measure of tax relief”. Profit related pay is now firmly established as part of British businesses’ pay policy. Over 3.7 million people are in schemes. 10 years on, the tax incentive has successfully served its pump-priming purpose.

I can no longer justify the increasing cost of the tax relief to the 22 million taxpayers who are not in profit related pay schemes. We cannot permanently divide the workforce into groups who pay different levels of tax on the same earnings depending on whether the firm they work for is in a scheme or not. The goal of widespread use of PRP has been achieved and I would rather make faster progress on lower taxes for everybody.

Good managers do not need a tax relief any more to know that pay should be linked to their firm’s performance. Pay linked to profits produces it own rewards on the bottom line in a thriving economy.

It is therefore time for the Government to start to withdraw this special tax relief. I intend to do this gradually, to ensure that businesses who need to adjust their pay packages and their sharing of the rewards of success have ample time to do so.

The upper-limit of pay attracting the relief will remain unchanged at 4,000 Pounds until 1998 and no one will be affected before then. It will then be progressively reduced until the year 2000, when the relief will be withdrawn altogether.

Capital allowances for long life assets

Investment is vital to our recovery and business investment is now growing strongly. The tax system recognises investment through capital allowances. These allow the cost of investment to be written off against tax bills, frequently faster than it is written off in commercial accounts.

For plant and machinery with a long lifespan, the rate at which costs can be written off for tax is far more generous than for other types of investment and bears no relation to the useful economic life of the asset. This is an unjustifiable distortion in the tax system.

I propose changing the capital allowance for plant and machinery with a life of more than 25 years to 6 per cent on a reducing balance basis. This will spread the tax relief more evenly over the average life of these assets.

Groups spending less than 100,000 Pounds a year on such assets will be exempt. This will mean that the vast majority of small companies will not be affected. Ships and railways will also be exempt.

Oil production

I also propose to withdraw the 100 per cent corporation tax deduction for the intangible costs of drilling most production oil wells.


This Government recognises that low marginal tax rates on income are a spur to hard work and enterprise. Taxes on spending do less damage to effort and enterprise than taxes on income. But the balance of the taxes on spending must be right. And I am making some changes to taxes which help to move towards a better balance for the tax system as a whole.

Insurance Premium Tax

I propose to increase insurance premium tax, which applies to most general insurance, to 4 per cent. Three-quarters of all insurance – including life and other long-term insurance – will remain exempt. Insurance remains undertaxed for consumers compared with other services in this country. The introduction of the tax did not harm the healthy insurance industry that we have. Most companies absorbed the tax and some premia actually fell for a time. Even after this further modest change, the overall rate of insurance premium tax in the UK remains very low – lower than in almost any other European Union country.

Air Passenger Duty

Air travel has also been undertaxed because it has proved difficult to get international agreement to tax its fuel. The rates of air passenger duty are to be increased. The 5 Pound rate on flights to most European countries will be increased to 10 Pounds, and the 10 Pounds rate on flights to the rest of the world will be increased to 20 Pounds. These increases will not come into effect until 1 November 1997, to give tour operators time to reflect these new rates in the prices they publish in their holiday brochures.

Business travel is soaring and the holiday business is booming at the moment in prosperous Britain and this modest change will not stop it booming in future prosperous years. About 40 per cent of the revenue raised by this tax is borne by overseas visitors.

Vehicle Excise Duties

I am making the same changes to the main Vehicle Excise Duties this year as I did last year. The cost of a car tax disc will go up by 5 Pounds, around the rate of inflation. The cost of a lorry tax disc will be frozen for the seventh year in a row.

Road fuel duties

I firmly believe that motorists should bear the full costs of driving – not only wear and tear and congestion on the roads, but also the wider environmental costs. Even those of us who frequently have to drive can take steps to cut fuel consumption and we all ought to consider carefully the use of our cars.

I intend to stick to my 1993 Budget commitment to raise road fuel duties by an average of at least 5 per cent each year in real terms. In line with this I am raising the tax on all petrol and diesel by 3 pence per litre from 6.00 pm tonight. These tax rises will encourage fuel efficiency and help control harmful pollution.

Air quality package

I am glad to say that pollution from vehicles is already coming down, helped by tax measures in previous Budgets. The tax measures taken to encourage unleaded petrol were a huge success. It now accounts for two-thirds of the petrol market. I want to go further in this Budget to attack pollution in cities and improve air quality by effective steps to reduce particulate emissions – the smoke produced by diesel engines.

In recent years, new evidence has come to light strengthening the health arguments for reducing particulates. This pollution is being reduced, but we all want to see it being reduced further and faster.

Ultra-low sulphur diesel is cleaner than ordinary diesel, but is slightly more expensive to produce. I want to create the conditions where ultra-low sulphur diesel can cost the same at the pump as ordinary diesel. I have just said that I am increasing the tax on diesel by the same amount as petrol. I plan to reduce the duty on ultra-low sulphur diesel by 1 penny per litre relative to ordinary diesel, when I get the necessary international agreement.

I also want to encourage high mileage vehicles in our towns and cities to switch to cleaner gas power. Last year’s Budget changes broadly equalised the pump prices of gas and petrol. From 6.00pm tonight I am reducing the duty on road fuel gases by a further 25 per cent.

I also intend to reduce Vehicle Excise Duty by up to 500 Pounds for lorries meeting very stringent emissions standards from early 1998. This will give an incentive for lorry owners to fit particulate traps or to convert to gas power. We will be consulting on the practical details of these changes.

I believe that this “air quality package” will significantly speed up the reduction of urban emissions of particulates, helping us to meet our air quality targets for 2005 and beyond. We intend to ensure that economic growth in this country is consistent with a healthy environment and sustainable development.

Tobacco duties

In my 1993 Budget, I gave a commitment to raise duty on tobacco by more than inflation each year. I believe this is a fair and effective way to hammer home the message that smoking can seriously damage your health. So far I am concerned, this is necessary masochism in the wider public interest.

From 6pm this evening, the tax on a packet of 20 cigarettes will increase by about 15 pence, on a packet of small cigars by about 7 pence and on a packet of pipe tobacco by about 8 pence.

But I am limiting the increase in the duty on hand rolling tobacco to the rate of inflation. Hand-rolling tobacco is proving to be by far the easiest tobacco product to smuggle, although it represents a very small part of the tobacco market.


I am aware of the serious problem that cross-border shopping and smuggling of alcohol causes our drinks industry in Britain. I have already announced that Customs are stepping up their efforts further to catch smugglers.

Last year I was able to freeze the duty rate on beer and wine. This year it will remain frozen. The proportion of tax on the price of a pint in the pub is now at its lowest level for 30 years. For some of us, that helps to keep our small cigars affordable.

Last year’s cut in the duty on spirits was the first for 100 years. I was tempted to maintain a striking rate of once every 100 years. But I am sure the industry will be glad to know that they will not have to wait so long this time.

From 6.00pm tonight the tax on whisky, gin and other spirits will fall by another 4 per cent, worth 26 pence a bottle.

The reduction in the rate on spirits boosts an important industry in the United Kingdom. It will also reinforce last year’s signal to overseas authorities not to discriminate against our products. Only smugglers will regret that we are slowly moving our duty of spirits nearer to the continental level.

From 1 January, the tax on alcoholic soft drinks will be increased by over 40 per cent, by between 7 and 8 pence a bottle. This will help meet public concern about the attraction of these “alcopops” for under-age drinkers, and it will also attack a distortion of competition by bringing the tax broadly into line with beer.

You’ll notice that I have considered the balance of my overall package carefully and I have not yet been converted to a bubble-gum flavoured alcopop.


Nothing matters more for business than a stable economic environment – low interest rates and low inflation. Businesses throughout Britain are benefiting from the healthy sustainable growth in the economy that I have described today.

As I promised in my last Budget, from April 1997 there will be a cut in the main rate of employers’ National Insurance Contributions, to 10 per cent, paid for by the proceeds from the landfill tax. A tax on waste to cut a tax on jobs. This will benefit employers in Britain and make it cheaper to create new jobs in our growing economy.

Our overheads on jobs are already less than half those in Germany, France, or Italy. I am determined to keep that advantage over our continental competitors where the creation of new jobs is over-regulated and over-priced. This is another reason why I am confident that our unemployment will keep falling.

In this Budget, I propose to keep the three intermediate thresholds for employers’ National Insurance Contributions where they are now. I propose to increase – by 10 Pounds and 1 Pound respectively – the upper and lower earnings thresholds for employers’ and employees National Insurance Contributions.

In this Budget I also want to address a particular concern of our small businesses – the burden of non-domestic rates.

The Uniform Business Rate is a fixed cost which can rise each year beyond the control of the manager of a small business. Since the last revaluation of business rates, I have repeatedly slowed down the increase of rates for those businesses whose rates have had to go up. No business property has seen its rates go up by more than 7 1/2 per cent above inflation in any one year. But I want to do more than this.

I have decided to freeze next year’s rates bill for all the small businesses whose rates would have gone up. Small properties whose rates are falling will have those reductions accelerated. This will benefit over one million small business properties, by up to 130 Pounds a year.

A freeze is an important step that I can make this year. We have already reduced business rates for rural village shops. But I realise that the present system of business rates bears particularly hard on the smaller business for whom they represent a much bigger proportion of total costs. We must therefore move on as soon as possible to more changes in the system to recognise this and redistribute the burden more sensibly between smaller and larger businesses.

Inheritance tax

This Government is committed to reducing and then abolishing capital gains tax and inheritance tax. But we have always said that we will cut these taxes only when we can afford to do so. This is a responsible Budget which is protecting future growth and prosperity by putting the public finances into a healthier state.

We will not be able to make progress on both these taxes this year.

But I am pleased to announce that we can take a further significant step towards abolishing inheritance tax.

Inheritance tax is a penalty on thrift, independence and enterprise. It is a growing anachronism. Lloyd George’s maxim that the “the most convenient time to tax the rich is when they are dead” no longer holds. It is largely paid by people of modest means who either cannot or simply do not make careful plans to avoid it.

Last year I made significant progress towards our commitment. In this Budget I will build on that by raising the value of the inheritance tax threshold to 215,000 Pounds.

That means, that in two years the Government will have raised the threshold for inheritance tax by 40 per cent.

Tax rewrite

In last year’s Budget Speech I announced a project to rewrite Inland Revenue tax legislation in plain English. This project is as ambitious as translating the whole of War and Peace into lucid Swahili. In fact, it is more ambitious – War and Peace is only 1,500 pages long, Inland Revenue tax law is 6,000 pages. And we did not have a Tolstoy to write our taxation laws in the first place. We have consulted extensively on how the project should be carried out, and I am glad to say there is wide consensus. The Inland Revenue will publish the plans and arrangements shortly after the Budget.

The aim is to prepare a series of rewrite Bills, the first of them to be ready for enactment in the 1997-98 session. My noble and learned friend Lord Howe has produced a thorough and helpful report on how Parliament might handle these bills. We endorse his broad proposals, and invite the Procedure Committee to consider how the House is going to handle the bills in a sensible fashion. I can announce that my noble and learned friend Lord Howe has agreed to chair the steering Committee which will oversee the rewrite project.

The project will bring the benefits of clarity and certainty to businesses and ordinary taxpayers. It has been widely welcomed and deserves the continuing support it has enjoyed in all parts of the House.

Income tax

Mr Deputy Speaker, this Government has led Britain towards our clear goal of a low tax economy where private enterprise has the incentive to generate jobs, investment and wealth to make people and their families more prosperous. We are moving towards a low tax economy where individual living standards continue to rise and the Government can afford the excellent public services that people want.

Low direct taxes are the most effective way to encourage enterprise and hard work. Under this Government those who do an honest day’s work and those who take entrepreneurial risk will keep more of what they earn and save.

This year people have taken more heed of my speeches on the overriding priority of securing future prosperity and jobs and financing key public services. Sensible people already expect my cuts in direct taxation to be modest. They know their well-being depends on lasting growth and more jobs and that living standards rise from a combination of steadily rising incomes and steadily lowering taxes. Tax cuts matter a lot to low paid people and to men and women in ordinary jobs. I announced my income tax cuts last year as a return to our tax cutting agenda and for the second year in succession, I am delivering an instalment of that agenda. I want to ensure that tax does not start to be paid at all at too low a level of income and I want to improve work incentives. I propose first of all to raise the threshold below which no income tax is paid at all.

In this Budget, I am making an increase in the basic personal allowance of 280 Pounds. That is 3 1/2 times more than necessary to cover the rate of inflation. It will also ensure that each and every person who pays any income tax at all will get a direct benefit out of this Budget.

I am also increasing the married couple’s and related allowances by 40 Pounds, maintaining the extra tax allowance to all married couples. It will now be worth nearly 275 Pounds each year for married couples. The tax system does recognise marriage, contrary to popular belief.

We also give a special tax allowance to blind people. This year I am increasing that by the rate of inflation. And I will put indexation of this allowance onto the same statutory basis as for the other income tax allowances.

I also propose to raise the threshold above which people start to pay the 40 pence higher rate tax by 600 Pounds.

One of this Government’s most important pledges is that we will move to a basic rate of income tax of 20 pence as soon as we can. We are proving that we can move towards the delivery of the promise and still deliver healthy public finances. Every step we take makes it more and more credible. Every step that we take makes it more affordable to reach the ultimate goal which we are getting tantalisingly near to. As a further step towards that, I propose to widen the lower rate band of 20p tax by 200 Pounds, twice as much as required by indexation.

This will mean that the slice of income on which a 20 pence tax rate is paid will have more than doubled during the lifetime of this Parliament. More than one in four of all taxpayers now will only pay tax at 20p in the pound.

Mr Deputy Speaker, this is the stage of my Budget speech where everyone is asking themselves – are the guesses of the newspapers right? Am I indeed going to cut a penny off the basic rate of income tax? What the newspapers did not know was that my control of public spending and borrowing would have allowed me to take 2p off if I had chosen to. But I preferred instead to raise personal allowances and widen the 20p band for those at the bottom end of the scale.

And yes, Mr Deputy Speaker, I am indeed also able to reduce the basic rate of income tax, by 1 penny to 23 pence in the pound.

The small companies rate of corporation tax will be reduced to 23 per cent in line with this, helping 400,000 companies. The main rate of corporation tax of 33 pence is already lower than in any other major industrialised country.

Seventeen years of steady progress – so far – means that the basic rate of income tax is now a full 10 pence lower than the rate we inherited in 1979. It is at its lowest rate for 60 years. Its lowest rate since Baldwin was Prime Minister, Edward VIII abdicated and Wally Hammond scored a double century at the Oval.

Another penny off the basic rate is a significant further step towards this Government’s target of a 20 pence basic rate of tax. For over 7 million people – our promise of a 20 pence basic rate is already a reality. I am bringing other income taxpayers ever closer to that reality. 20 pence is a realistic and attainable goal for the next Parliament. We will not be content until we have completed the task of getting it down to 20 pence and every Budget I have presented has step by step shown how we are going to get there.


With increases in real earnings and the tax changes in this Budget, a family on average earnings will be another 370 Pounds better off next year over and above inflation. The same family will have over 1,100 Pounds more to spend each year after tax and inflation than they did before the last election. In 1992, the background was one of a worldwide slowdown and a recovery in the United Kingdom that had barely started. Now we are enjoying strong growth and rising living standards, and we are going to enjoy more of the same.


Mr Deputy Speaker. In November 1993 I promised that I would put Britain firmly on course for a sustained period of rising prosperity and falling unemployment, based on low inflation and healthy public finances.

I have done what I clearly said I would have to do and I have delivered on those promises.

Mr Deputy Speaker, the Government believes in allowing people to keep as much as possible of their own income so that they can make their own decisions.

This Budget cuts public spending next year by 2 billion Pounds, and it generates an extra 1/2 billion Pounds in revenue through “spend to save”. It contains a balanced tax package – it includes tax cuts of 2 billion Pounds while it secures the tax base by 1 billion Pounds. Taken together the effect of the Budget is to tighten fiscal policy and so protect healthy lasting recovery.

I am a man of the world, I realise virtue doesn’t always brings its own rewards. But this virtuous Budget will bring rich rewards. The rewards of economic success to the hard working men and women of this country. Never forget, good economics is good politics.

This is not a Budget just for the next few months. It is a Budget for many prosperous years to come. It is a Budget that this Government will build upon again in twelve month’s time.

I commend this Budget to the House.