David Cameron + Nick Clegg – 2010 Joint Press Conference


Below is the text of the joint press conference held with David Cameron and Nick Clegg on 12 May 2010.

Prime Minister:

Good afternoon, everyone, and welcome. On the steps of Downing Street yesterday evening, I said that Nick and I wanted to put aside party differences and work together in the national interest. Since I set out that aim, both our parties have given their full backing to our coalition agreement, a Liberal Democrat-Conservative Government that we have negotiated.

This is the first coalition Government in Britain for 65 years. It will be an administration united behind three key principles: freedom, fairness and responsibility. It will be an administration united behind one key purpose. That is to give our country the strong, stable and determined leadership that we need for the long term.

In the days and weeks ahead, we will together be setting out in greater detail the aims and the values of our partnership and the full policy programme of our coalition Government. Today, we want to say just a few words about how we plan to work together and the significance of what we have achieved in coming to this agreement.

This morning, as part of the process of establishing the new Government, I have been working to appoint the Cabinet. Later today, I will be chairing the first meeting of our National Security Council and Nick Clegg will be at my side. There are five Liberal Democrat Secretaries of State in Cabinet working hand in hand with Conservative colleagues to address the big challenges that Britain faces. Starting with Nick Clegg as Deputy Prime Minister, Liberal Democrats will be represented at every level of government. I think this is a sign of the strength and depth of this coalition and our sincere determination to work together constructively to make this coalition work in our national interest.

We have a shared agenda and a shared resolve to tackle the challenges our country faces, to safeguard our national security and support our troops abroad, to tackle the debt crisis, to repair our broken political system and to build a stronger society. We understand that we are not going to beat these problems overnight. In particular, no Government in modern times has ever been left with such a terrible economic inheritance. Today’s unemployment figures are another sign of the human cost of the economic mistakes of the past decade. So we know there will be difficult decisions ahead but, working together, I know we can take the country through those difficult times to the better times that I believe lie ahead.

But today, we are not just announcing a new Government and new ministers; we are announcing a new politics. A new politics where the national interest is more important than the party interest, where cooperation wins out over confrontation, where compromise, where give and take, where reasonable, civilised, grown-up behaviour is not a sign of weakness, but a sign of strength. One of the major problems of the last few years has been a chronic short-termism in government. With this coalition Government and this coalition agreement that we have for five years, we can act for the long term and make the major decisions for our country’s future. That is the true significance of this coalition. It can be an historic and seismic shift in our political landscape. It can demonstrate in government a new progressive partnership, believing in enterprise, markets and fiscal responsibility, committed to civil liberties and curbing the power of the state, passionate about building a green economy, determined to build the Big Society where families and communities are supported and strengthened and eager to make sure that the Big Society is matched by big citizens, where power is taken from the politicians and put in the hands of people as we embark on a recasting of our political system.

Our Liberal-Conservative Government will take Britain in an historic new direction, a direction of hope and unity, conviction and common purpose. I am delighted to be standing here with the new Deputy Prime Minister. The two of us together leading this historic, Liberal Democrat-Conservative administration. I would like, now, to invite him to speak to us on what I think is a remarkable and very welcome day. Nick.

Deputy Prime Minister:

Thank you, David. We have just been through an election campaign and now we have a coalition. Until today, we were rivals; now, we are colleagues. That says a lot about the scale of the new politics that is now beginning to unfold. This is a new Government and it is a new kind of government, a radical reforming Government where it needs to be and a source of reassurance and stability at a time of great uncertainty in our country too.

David has spoken about many of the challenges we all face: the economy, still struggling to get to its feet; the public finances, in a mess; our troops, engaged in a difficult and lasting conflict that requires resolution; our society, still scarred by too much unfairness and inequality; our politics, not yet recovered from the hammer blows of recent months. At a time of such enormous difficulties, our country needed a strong and stable government. It needed an ambitious Government determined to work relentlessly for a better future. That is what we have come together in this coalition to provide.

This is a Government that will last, not because of a list of policies, important though they are, not because it will be easy. There will be bumps and scrapes along the way. We are different parties and we have different ideas. This is a Government that will last despite those differences, because we are united by a common purpose for the job we want to do together in the next five years. Our ambition is simple and yet profound. Our ambition is to put real power and opportunity into the hands of people, families and communities to change their lives and our country for the better.

For me, that is what liberalism is all about: ensuring that everybody has the chance, no matter who they are or where they are from, to be the person they want to be and live the life they want to live. You can call it ‘fairness’. You can call it ‘responsibility’. You can call it ‘liberalism’. Whatever words you use, the change it will make to your life is the same. You will have the opportunities you crave: fairer taxes; better schools; a fair, green economy with growth that lasts; clean, open, plural politics that I hope, once again, you can put your faith in to deliver the help and the change you need.

I want this to be a bold, reforming Government that puts fairness back into Britain, a Government that restores our faith in what a healthy, strong society can achieve, a Government that takes power away from politicians, as David said, and gives it back to you, a government that hands back your liberties and your privacy, building a nation where parents, pupils and patients can shape our schools and hospitals, where fine words on the environment are finally translated into real action, where social mobility becomes a reality for all where the great British traditions of tolerance and fairness are restored. I came into politics to change politics and to change Britain for good. Together, that job starts today. Thank you.

Nick Clegg – 2011 Speech on an Open and Confident Society


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, on 3 March 2011.

Today I want to talk about the UK as an open, confident society. It is by being confident – confident in ourselves, in our communities, and in our values – that we can remain an open, liberal nation.

I am pleased to be delivering this speech in Luton. Luton has had to endure being associated in the national consciousness with some very grim imagery indeed. The ugly public posturing of Al Muhajiroun and the English Defence League. Memories of the train station where the 7/7 bombers boarded a train for London, before detonating horror in our capital.

But I hope today to draw attention to a different Luton; Luton as the home of some of the most vibrant campaigns against racism, extremism and Islamophobia.

In particular I would like to thank the members of the Luton Commission on Community Cohesion, which is a superb example of the way in which a community can work together. The town has remained true to its original vision of ‘sticking together’, working across age, religious and ethnic boundaries to promote a tolerant, strong, vibrant community. That is why I think Luton is the perfect place to set out my vision for an open, confident Britain.

It is quite clear that this vision faces serious challenges. Most obviously, the grave threat of home-grown terrorism. One of the most important tasks for the Coalition Government is to guard against this danger. But we also face the potential rise of racist groups like the BNP – not only on the streets but in our democratic system too. The Prime Minister has recently argued that we need to assert confidently our liberal values. I agree. Politicians have a huge responsibility to lead by example, and engage in the often difficult arguments around immigration, multiculturalism and liberty. That is why I think the PM was absolutely right to make his argument for ‘muscular liberalism’.

I also think the Prime Minister was right to make a sharp distinction between religious belief and political ideology. Religious devotion is completely separate from violent extremism. The overwhelming majority of devout people of all faiths reject violence and terrorism. There is some evidence that those Muslims who do turn to violence have a shallower understanding of Islam than Muslims who may have radical views, but reject violence.

The enemies of liberty are those people who have closed their minds, closed off the possibility that there may be other valid ways to live, other than their own. They believe they have discovered the prescription for how to live – which everyone should follow. Closed minds can lead to closed communities, to extremism, and in some cases to violence.

There are nationalistic or racist extremists, like the members of the English Defence League, or the BNP. There are black extremists like the Nation of Islam. There are Muslim extremists like the members of Islam 4 UK. Very often these groups have a symbiotic relationship with each other, maintained by the media: extremist Muslim groups giving birth to extremist white hate groups, and vice versa.

My point is this. We need a perfect symmetry in our response to crime and violent extremism. Bigots are bigots, whatever the colour of their skin. Criminals are criminals, whatever their political beliefs. Terrorists are terrorists, whatever their religion.

This means that those of us who want to live in a liberal society must confront hateful views and practices regardless of who expresses them. The Government is committed to tackling hate crimes against any group – gay people, Jews, women, black people or Muslims.

Let me say something here about the specific issue of Islam and violent extremism. There is a corrosive tendency, not least in some parts of the media, to confuse the tenets of Islam with the actions of terrorists.

As my colleague in the Coalition Government, Sayeeda Warsi has argued: ‘a worrying argument that forms the basis for justifying Islamophobia and anti-Muslim hatred is the idea that Islam is a particularly violent creed.”

The core liberal values – freedom of speech and worship, democracy, the rule of law, and equal rights regardless of sex, race and sexuality – are as compatible with Islam as with any other religion.

It is better to be a citizen of present-day Turkey – a Muslim majority country – than in one of the Communist-era countries that crushed both these values and religious life in equal measure.

Of course, there are issues that many Muslims in this country feel strongly about: issues like Palestine, Iraq, Kashmir and Guantanamo Bay. I understand these concerns. And the Government takes them very seriously indeed.

But let us be absolutely clear. No matter what criticism anyone has of British foreign policy, the way to express that criticism is through the ballot box, by raising your concerns with your MP, and by taking a public stand – never, ever, by violence.

I would also like to pay tribute today to Shahbaz Bhatti, the Pakistani Minister for Minorities, who was murdered by violent extremists in Islamabad yesterday. Mr Bhatti was fearless in his pursuit of tolerance, and liberty, continuing to argue for freedom of religious expression even though he knew this would put his life in danger. A reminder, if one were needed, that liberty can extract a much higher price than most of us are likely to pay.

We need to deepen our understanding of the roots of violent extremism. It is a difficult task. In a moment I will address the interaction of individual, community and ideological influences. But I want to deal first with the specific question of economic insecurity.

As I have said, openness and confidence go hand in hand: remaining open to different cultures and attitudes is easier for people, communities and nations that are confident of their own position.

This means that fear and insecurity are among the most dangerous enemies of openness and liberalism.

There is also no question that insecurity – whether economic or social – creates more fertile ground for violent extremism. During these challenging economic times, we will have to work even harder to fight violent extremism in all its forms.

Recent research by the Searchlight Educational Trust on attitudes towards immigration and multiculturalism shows that there is a minority at both ends of the scale with either straightforwardly positive or negative views about immigration and multiculturalism.

But in the middle are groups who are either culturally fairly conservative or who are concerned mainly with the economic implications of immigration. This last group – labelled ‘identity ambivalents’ by Searchlight – is the most worrying in the current climate. Economic difficulty could tip some of them into the negative camp.

At this point, the question becomes one of economic judgement. I strongly believe that acting decisively on the deficit is the surest way to restore economic confidence, relieve people of the burden of debt and put the country back on track. Delay will carry more cost, and more risk, than decisive action. Prevarication on the deficit will worsen economic insecurity, not alleviate it.

But a turn to violent extremism cannot be explained simply in economic terms. There are much deeper and more complex forces at work. The scholar Louise Richardson describes the causes of terrorism as ‘a lethal cocktail containing a disaffected individual, an enabling community and a legitimizing ideology’.

This is right. And it means that our response to violent extremism has to engage at all of these levels, too. So an open, confident society is made up of free, responsible individuals; strong, resilient communities; and a muscular, liberal ideology.

At all three levels – individual, community and society-wide – it is vital to pursue ‘smart engagement’. This means calibrating Government action in the following ways:

targeting resources in a way that clearly promotes liberal objectives
maintaining a clear distinction between social policy and security policy
distinguishing between violent and non-violent extremism
supporting free speech, but taking the argument to the bigots; and
implacably confronting violent extremism
Let me start with the rights and responsibilities of individuals. In an open, liberal society, individuals are free to live in the manner of their choosing, so long as they do not harm others.

And in today’s world, individual identity is much more fluid. With advancements in communications technology, more freedom of movement and greater economic interdependence between nations, there is a much wider palette from which identities can be drawn. The increasing complexity of questions of identity makes it even more important to balance individual liberty and collective responsibility.

Freedom for individuals is one of the core values of the Coalition Government. That is why we have ended the injustice of 28-day detention without trial; why we have crushed the ID database; why we are ending the house arrest of Labour’s Control Orders; why we are giving people not charged of crimes the right to get their DNA off police databases; and why we are curtailing arbitrary powers of police to ‘stop and search’.

We are, in short, rebalancing the relationship between the state and the individual citizen. But we are clear that individuals need to take responsibility, too. Freedom not only comes hand in hand with responsibility, it requires it. As the liberal leader Jo Grimond said: ‘Freedom entails the acceptance of responsibility. Responsibility is meaningless without freedom.”

So while we will support the freedoms and human rights of individuals, we also insist that individuals meet their obligations towards wider society, and take their share of responsibility for the maintenance of liberal societies.

And while we have an unquenchable commitment to individual liberty, we have an equal commitment to safety and security – and I think the results of our recent counter-terrorism review struck the right balance.

Of course individuals do not live in a vacuum. We must always recognise that we are, in Bikhu Parekh’s words, “a community of citizens and a community of communities”.

The role of peers and communities in acting against or cultivating violence is clear. So we need an approach that empowers individuals – but builds communities too.

The former Foreign Secretary, David Miliband, said earlier this week that “we need to build the resilience of local communities to reject the politics of hatred.” I agree with him.

That is why this government is working so hard to help build stronger communities. At times, national security considerations will still require national action. But unlike the previous Government, we do not believe that strong communities are built from Whitehall. That’s why we have removed the ring fences around Local Authority budgets, allowing for local discretion; why we are introducing elected police commissioners so that policy can be locally accountable; why we are, through community budgets, giving power to localities to determine their own priorities; and why we are putting public health in the hands of local authorities. Strong communities are communities with more power over their own destiny.

But it is also crucially important to maintain a clear distinction between initiatives aimed at combating extremism and those focused on the broader task of community cohesion. The last Government’s conflation of social policy and security policy was damaging. It resulted in Muslim communities feeling stigmatised, and money being wasted.

That is why the Government is currently reviewing the Prevent programme, to ensure that money to curb violent extremism is targeted in the right way, and on the right groups. By treating Muslim communities and organisations as homogenous lumps to be variously hectored, preached at, showered with praise and money, or ignored, the previous Government created negative perceptions among British Muslims and non-Muslims alike.

We should ensure that public funds do not support any organisations promoting violence. We must engage with religious organisations in a smart way focusing our attention on those that support our essential liberal values.

We will also challenge extremism across the board, ending the previous Government’s exclusive and unhelpful focus on Islam. It does not matter if you are a far-right extremist, someone who perverts a religious faith, or someone who uses violence in support of other ideological ends – we will challenge you, take you on and defeat you.

The third battleground against violent extremism is at the level of ideas, values and ideology. The dangerous ideas that underpin violent extremism must never be allowed to go unchallenged.

That is why I thought the PM’s argument in favour of ‘muscular liberalism’ was absolutely right. Liberalism is not a passive, inert approach to politics. It requires engagement, assertion. Muscular liberals flex their muscles in open argument. There is nothing relativist about liberalism.

If we are truly confident about the strength of our liberal values we should be confident about their ability to defeat the inferior arguments of our opponents.

Smart engagement means engaging in argument at public events, where appropriate and at the right level. Of course these are always difficult decisions to make. But to take one example, the Global Peace and Unity conference attracts around fifty thousand British Muslims each year and is an important opportunity to engage in argument – and so Andrew Stunell, the Government’s Communities Minister did this year. Simon Hughes, the Liberal Democrat Deputy Leader, also spoke at the event.

Now there may well have been a small minority of organisations and individuals at that event with deeply unpalatable, illiberal views.

But you don’t win a fight by leaving the ring. You get in and win. The overwhelming majority of the people attending this conference are active, engaged and law-abiding citizens. We don’t win people to liberal ideals by giving ourselves a leave of absence from the argument.

Equally, smart engagement means being extremely careful about decisions to proscribe individual organisations. There are occasions when that is the right course of action. I have to say that, for me, agreeing to the proscription of the Pakistani Taliban was a straightforward decision.

But proscription must always be a last resort, never a knee-jerk reflex. That is why the Pakistani Taliban is the only organisation we have proscribed since entering Government. And that is why, consistent with our agenda for smart engagement and as part of the Government’s review of Counter Terrorism powers, we decided against increasing the government’s powers to proscribe.

Because of the requirement to engage in argument, liberal democracy means hard work. Open, liberal societies are not self-creating, or self-maintaining. Democracy, free speech and human rights have to be won – and tragically, often paid for in blood. We need only look to North Africa to see proof of that.

Once established, liberal societies still need to be renewed and re-established, generation after generation. It has been said that the price of liberty is eternal vigilance. But it is also eternal labour – working to maintain the culture and institutions of liberal democracy.

Liberal societies do not expect everyone to live in the same way, or believe in the same things; conformity can crush liberty. But in liberal societies, all of us must defend the freedoms of others, in exchange for freedom for ourselves. In an open society, values compete but do not conflict.

This is the background against which we have to consider the issues of multiculturalism. We have to be clear what we mean here. Where multiculturalism is held to mean more segregation, other communities leading parallel lives, it is clearly wrong. For me, multiculturalism has to seen as a process by which people respect and communicate with each other, rather than build walls between each other. Welcoming diversity but resisting division: that’s the kind of multiculturalism of an open, confident society.

And the cultures in a multicultural society are not just ethnic or religious. Many of the cultural issues of the day cut right across these boundaries: gay rights; the role of women; identities across national borders; differing attitudes to marriage; the list goes on. Cultural disagreements are much more complex than much of the debate implies. If you will forgive the phrase, they are not quite so black and white.

So: smart engagement in defence of an open society. An unending determination to keep doing the hard work of maintaining our liberal society at home. Encouraging the birth and growth of liberal societies abroad. Smart engagement, appropriate and proportionate, to take on extremist ideas, alongside a ruthless determination to find and punish those who promote or take to violence.

Maintaining a liberal, open nation also demands a fierce allegiance to shared values. The values of liberal citizenship. The values of responsibility, tolerance and openness.

In the end, these values are the only weapons that can defeat the terrorists and hate-mongers, at home and abroad.

Violent extremists of all kinds are the enemies of open societies. We will wage an unceasing battle against them. And we will win.

Thank you.

Nick Clegg – 2013 Speech on Modern Families


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, on 2 September 2013.

Every weekday morning, across the UK, there’s an army of mums, dads, grandparents and carers cajoling young children to “Hurry up and get ready for their day!”

Many of these families are feeling the squeeze. They’re doing what they can to juggle their busy lives. And, now more than ever, one of the biggest things that could help them out is better access to more affordable high-quality childcare. That’s why I’ve made childcare one of my main priorities in government. And whenever money has become available I’ve pushed hard for it to be invested in this area.

Last month, the government launched its consultation on our newest offer that will help more of Britain’s working families. This means that from 2015, if your family doesn’t receive support through tax credits or Universal Credit, but both parents are working, or you’re a lone working parent, the government will provide 20% of your childcare costs up to a cost of £6,000, per child, per year. That’s the equivalent of up to £1,200 per child, per year.

And from 2016, if you’re a lone parent or couple in work, who pays income tax and relies on Universal Credit to make childcare affordable, or even possible, we’re investing an extra £200 million to increase the contribution we give to your childcare costs from 70% to 85%. This could help out around 200,000 families.

Of course, there has been controversy about which families are eligible for these offers. But that doesn’t detract from the fact that this is a substantial package of support that will help ease the pressure for millions of families across the country.

And today I want to talk about what we’re doing, step by step, in the coalition government to help every British family balance the demands of their lives with children.

One of the first decisions our government took was to increase the hours of funded early education available for every family with a 3 and 4 year old from 12.5 to 15 hours a week.

And today I’m pleased to mark our next step on this path to affordable, accessible childcare; launching the government’s latest free childcare offer for 2 year olds.

From today, if you’re a parent on a low income with a 2 year old in the family your child will qualify for 15 hours a week of free early years’ education.

Any childcare and early learning provider – that’s nursery, preschool or childminder – rated outstanding or good by Ofsted can provide places. These funded places are focused on helping the families that need them most. That’s around 130,000 2 year olds – 1 in every 5.

We are investing over £500 million this year. And have distributed £100 million to local authorities to create new places to ensure those children eligible right now can benefit from these funded places from today.

The households, which qualify are those that meet the same eligibility requirements as for free school meals. If that’s you, or you think it might be, your local authority is there to help you. They will confirm if you’re eligible and can help you take up a place for your child.

And we’ve also made this support available to 2 year olds, who are looked after by their local authorities. So that they too can benefit from the great start this valuable early learning support provides.

And from this time next year, we want to extend that helping hand even further.

Our investment will increase to £760 million to help another 130,000 children, whose families are on the next rung of the income ladder.

In total, that will mean extra places for around 40% of families with 2 year olds. And today, I am pleased to confirm that this will be working families, who earn under £16,190 a year and rely on working tax credits. The 40% most feeling the squeeze.

This support will also be there to help children, who have been adopted, are in care, or have a disability or special educational needs.

And I want to thank all of those local authorities and early year’s education providers working hard across England, to ensure that the children who qualify right now can access their place from day one.

I’m delighted at the response we’ve had so far from nurseries and child-minders in preparing these extra places and promoting this offer to parents.

These people are amongst those you rely on the most when your children are young. And the coalition government has been working with providers to reduce paperwork, improve quality and increase routes into this sector. So that when you drop your child off at nursery, preschool, or their child-minder you know they’ll get the best early learning, care and support possible throughout their day.

I know that some of you will be thinking…why not give this free support to every 2 year old? Why not help every family? And it is certainly my long-term ambition to extend free support to all 2 year olds. But the fact is that at a time of limited resources you’ve got to start somewhere. And for me, it’s better for us to start with those children, who can benefit most from high-quality early year’s education, but who too often miss out.

All the evidence shows that if you take 2 young children – hanging up their coats next to each other on the first day of school – the poorer child will already be behind their better-off classmate. And if we don’t step in to help these children, that gap just keeps getting bigger. We’re talking about a child’s journey through life already being mapped out for them before they’ve even set foot in a classroom.

Well-off children are more likely to become well-off adults. Poorer children are more likely to stay poor. And not only do these children suffer. The whole class suffers, as teachers have to focus more of their efforts on children frustrated and left behind through no fault of their own.

As a Liberal, I believe that every British family, whatever its structure, background and circumstances, should be able to get on in life. And that the role of government should be to support, not control, our families. To make their choices possible, not to dictate their choices.

It’s not for us to tell you whether you should stay at home or not. You have to decide what’s best for your family. And the modern British family comes in all shapes and sizes. But it is government’s responsibility to help those families feeling the squeeze; those who find it hard to meet their childcare costs.

That’s why in government, we’re doing everything we can to reform, simplify and modernise those parts of the system that are making it harder for your families to realise their ambitions.

From day one in government, we’ve worked with the belief that if modern families no longer fit the system, then it’s the outdated system that needs to change. That’s why from next year, we’re extending the right to request flexible working to every employee. So that the vital back up team of grandparents, family members and friends who would love to do more to help you out now can. And from 2015, if you’re a new parent you’ll also have greater freedom and flexibility to use and share leave during the maternity leave period in a way that works for you.

Now, of course, this doesn’t mean that we can put off the tough decisions we need to take to get the massive deficit we inherited under control. But what you can be sure of is that the choices we make will be rooted in evidence and focusing investment where it can help your families most.

The crucial question every parent asks when weighing up whether to work, or take on extra hours is: how much of my earnings will I keep after costs like tax, childcare, travel and so on? That’s why we’re designing the system to ensure that families get to keep more of what they earn and that work pays.

It’s why we’ve committed to raise the personal allowance on income tax. So that basic rate taxpayers will get to keep all of the first £10,000 they earn. We’ve already taken over 2 million people out of paying income tax altogether. And by the time these changes are complete, they will be worth around £700 a year for 20 million basic rate taxpayers.

We believe this is a better way to help your family. To put this money back in your pocket for you to spend on what you know can help your family best, rather than have the government decide that for you.

And alongside our additional childcare investment in Universal Credit, I’ve also fought hard to ensure that the system no longer penalises those parents who want to go back to work, but can only work less than 16 hours. Securing £200 million of investment that will benefit an extra 100,000 low-income families.

Previously, these parents knew that if they worked less than 16 hours a week, they would lose their existing benefits from day one, but not qualify for any additional support through the tax-credit system. This left them in the ridiculous position of knowing that their families would be worse off despite them working the hours they could. Now they know that the work they do will always pay.

Within government, it will always be one of my biggest priorities to ensure that when both you and your children set out to achieve your ambitions, the choices available to you are greater, the sums add up a little easier and that, at every step of this road, our government is working hard to build a stronger economy and fairer society in Britain. A Britain fit for modern families.

Nick Clegg – 2013 Q&A on Syria


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, on 27 August 2013.


Why are we now considering military action?

Deputy Prime Minister

I think many people who’ve been watching this horrific bloodshed unfold in Syria over the last couple of years will ask themselves why it is that the international community, why is France, America, Britain, considering a serious response to what has happened in Syria. The answer is that the murder of innocent men, women and children through the use of chemical weapons is a repugnant crime and a flagrant abuse of international law. And if we stand idly by we set a very dangerous precedent indeed, where brutal dictators and brutal rulers will feel they can get away with using chemical weapons on a larger and larger scale in the future. These are weapons that were used on a large scale in the First World War and banned back in the 1920s. So what we’re considering is a serious response to that.

What we are not considering is regime change, trying to topple the Assad regime, trying to settle the civil war in Syria one way or another. That needs to be settled through a political process. We are not considering an open-ended military intervention with boots on the ground like we saw in Iraq. What is being considered are measures which are legal, which are proportionate and which are specific to discouraging and sending out a clear signal that use of chemical weapons in this day and age is simply intolerable.


How confident are you that it will be legal?

Deputy Prime Minister

Well, any steps we will take will have to be legal. This government, this Coalition Government, of course is not going to act outside the remit of international law. But let’s remember that the use of chemical weapons is a flagrant abuse of international law. These weapons were first banned by international conventions back in the 1920s after their widespread use in the First World War, a hundred years ago, and what we want to ensure, as an international community, is that we don’t go back to a world in which people think they can use these heinous weapons with impunity.

This is about taking proportionate, legal and carefully circumscribed steps to ensure that everybody understands, the world round, that we will not stand idly by when chemical weapons are used in complete breach of international law.

Nick Clegg – 2013 Speech to CBI Scotland


Below is the text of the speech made by Nick Clegg, the Deputy Prime Minister, to CBI Scotland in Glasgow, Scotland on 5 September 2013.

After the toughest global economic conditions in living memory, the UK economy is starting to turn a corner. And the signs of recovery are encouraging.

Growth has doubled in the last quarter. Across the UK, more people are in work than ever before. And at a time when unemployment is rising across the EU, private sector employment in Scotland has grown by 146,000 in the last three years.

Our focus on fiscal discipline is also helping to keep interest rates low for UK businesses and families. We’ve reduced the deficit by a third as a percentage of GDP over the last three years. And we’re borrowing £49 billion less this year than the previous government.

Of course, none of this is easy. There are still major economic challenges to be overcome. Many families are feeling the squeeze. Some businesses still struggle to get the credit they need. And, as a country, we are working hard to repair and rebuild our economy.

That means doing what we can to unwind the toxic legacy of the last government’s economic model. Broken from the start, it didn’t do enough to support balanced growth across the UK. It was lop-sided: over-reliant on one specific part of the financial services industry to drive an unsustainable boom that left us vulnerable when the crisis hit.

None of that can be fixed overnight. But bit by bit, we are clearing up the mess we inherited. Our critics said it couldn’t be done. That the two parties of the coalition wouldn’t be able to set politics aside and put our economy and nation first. But we are proving them wrong.

And so are you. Because ultimately it is your enterprise and your hard work, as UK and Scottish businesses, that is making the difference. And tonight I want to focus on our work together, government and business.

And the essential role that Scotland – as one of the UK’s biggest economic success stories – plays in realising our vision for a stronger economy and fairer society across the UK.

Because I believe that the best route we have to achieving a sustainable recovery lies in strengthening that partnership between us.

For me, it’s a partnership that strikes that old-fashioned liberal balance between a government that gets out of the way of businesses to enable and empower them to do what they do best: create jobs and drive growth.

And a government that steps in, when needed, to set the rules of the game essential to ensure a sustainable and competitive economy; backed up with access to finance, modern infrastructure and a skilled workforce.

That’s why we’re making the UK’s business environment one of the most competitive in the world: cutting corporation tax to one of the lowest rates in the G20; reducing the National Insurance bill for companies; protecting the flexibility of our jobs market and getting rid of unnecessary red tape.

And that combination of measures has helped make the UK the most attractive location for overseas investment in Europe, with over 10% of the UK’s 2012 FDI, foreign direct investment, projects coming to Scotland.

At every step of the way, in the coalition, we’re fighting hard to create jobs, boost growth and make a genuine difference to people’s lives across the UK.

That’s why we’ve committed to raise the personal allowance on income tax. So that basic rate tax payers will get to keep all of the first £10, 000 they earn. We’ve already taken over 2 million people out of paying income tax altogether. And by the time these changes are complete, they will be worth around £700 a year for over 20 million basic rate taxpayers.

We’ve also extended our Funding for Lending Scheme to provide more help to SMEs. And the latest figures show that under this scheme lending to businesses and homebuyers has increased. And ahead of the official launch of our new £1 billion UK Business Bank, we are already accepting proposals for the project’s first investment round.

We’re also protecting and boosting investments essential to our long-term growth. Setting out, for the first time, a long-term Infrastructure Strategy for 21st century Britain, with a major boost to capital spend here in Scotland.

This is supporting a £100 million roll-out of superfast broadband to communities across Scotland; a £50 million contribution to safeguard and improve the cross-border sleeper service for Scotland; and an investment in faster, more modern electric trains on the East Coast Main Line. That’s in addition to our committed investment in a national High Speed Rail Network.

HS2 is central to our 21st century ambition to build a stronger economy in the UK. We know that our competitors have been investing in better roads and railways for decades. But the last time we built a new main rail line north of London was more than 100 years ago.

Rail travel has doubled in the last 20 years. With important routes like the West Coast Main Line hit by serious capacity issues. HS2 will help us catch up and compete, more than doubling the number of seats between London and Birmingham and helping to slash journey times to Scotland. This is an economic growth story.

Completing HS2 will help us to tackle the north-south divide that’s scarred our country for too long. Giving 8 of our biggest cities, across the North and Midlands, the modern rail links they deserve, as well as generating over £60 billion of benefits for the UK.

The Core Cities Group estimates this investment will create around 400,000 new jobs, 70% of which will be based outside of London. And in Scotland, we calculate it will boost the economy by around £3 billion.

And here I just want to respond to those who have criticised this project in recent weeks. That includes the ex-ministers who green-lighted this idea in the first place.

It’s a pattern, we see happening time and time again in this country. When a deal has been signed, the temptation to undermine it from the comfort of opposition can be too much for some politicians to resist. This clouds the debate and chips away at the consensus.

But the alternatives they suggest – such as upgrading existing lines – aren’t viable answers. For example, the extra capacity created through the £9 billion upgrade of the West Coast Mainline has already been filled.

We’ve tested our business case rigorously. And we’re clear on what needs to be done to deliver this project on time and to budget. That is how Britain builds the infrastructure it needs. And that’s how we compete, as a 21st century economy, with a modern transport system that works to make us stronger.

In energy, our £3.8 billion UK Green Investment Bank, headquartered here in Scotland, is helping to boost private sector investment in green energy projects.

And I’m pleased to say that we can raise a glass to the bank’s first project here in Scotland: with over half a million pounds committed to a new bio mass boiler at Tomatin Distillery, near Inverness.

But that’s just the start. And with our strengthened support for renewables through the single British energy market, we are helping to create thousands of new jobs in Scotland.

And here in Glasgow, at Strathclyde University, we’re funding 2 new catapult centres to drive research, innovation and business development in our Offshore Renewables and High-Value Manufacturing sectors.

These are investments that will help rebuild the UK’s economy because the UK succeeds when Scotland succeeds. And a stronger UK economy ensures a stronger Scotland.

And it’s precisely because of that shared prosperity that I don’t want to see a barrier thrown up between Scotland and the rest of the UK.

Right now, membership of the UK’s Single Market gives UK businesses unrestricted access to over 60 million consumers. As set out in our business and microeconomic analysis paper, in 2011, that was worth around £45.5 billion in trade for Scotland (excluding oil and gas), that’s double the amount Scottish businesses sell to the rest of the world. And the demand for Scottish goods and services from England, Wales and Northern Ireland contributes almost 30% of Scottish GDP. In turn the rest of the UK exports almost £50 billion worth of goods and services to Scotland.

Now I’m not saying that all of this trade will be lost, if Scotland votes Yes in 2014. I’m not here to create an artificial argument. But our latest research shows that the long-term effect of a new border between our two countries – with all of the new rules, regulations and systems it will require – will reduce Scotland’s GDP by 4%, equivalent to £5 billion in 2012, over the next 30 years.

The UK’s strong monetary and fiscal framework also provides investors and businesses in Scotland with the confidence, certainty and support they need to grow. This includes strong national institutions like the Bank of England. And as a strong part of the UK, Scotland also makes its global voice heard with a seat at the table at the G8, the G20, NATO and UN Security Council.

This also means that Scotland through the UK’s membership can play a powerful part within the wider union of EU, shaping legislation, negotiating budgets and driving the future of EU single market.

This time next year, the people of Scotland will be gearing up for one of the most important collective decisions you will ever take together.

Those, who say Scotland could not be an independent state are wrong. Scotland could be an independent state, but my view is that Scotland’s future is best served in the UK, as part of our family of nations. And just because you can do something does not mean you should do something.

In the 21st century when countries around the world, within the European Union, in Latin America, South East Asia and beyond are reaching out to cooperate, I believe that it would serve no-one well if the nations of the UK family were to loosen the ties that bind us together.

But separating our family of nations – through the creation of a new international border – would inevitably, mean a drifting apart. So that the strength that we draw from 300 years of economic integration; the solidarity of our common values that built the welfare state and the NHS; and the security we share from standing together past and present – all of that will be lost.

I will campaign proudly for Scotland to remain in the UK. Not out of some nostalgia-driven attachment to the past. But out of a clear-sighted look to our future.

Just two days ago the Chancellor was in Aberdeen to publish the latest in our series of Scotland Analysis papers, which set out objective expert analysis on the realities of Scotland becoming an independent state. Everything points the same way: our nations are better together than we are apart.

We have a great deal of confidence in our argument and that the facts speak for themselves. Already the answers put forward so far by the nationalists about what an independent future for Scotland might look like keep changing. In particular, what the economic realities of separation will mean for your business.

You drive the Scottish economy. You create the jobs and the wealth that makes Scotland a great place to live and work. And I urge businesses across Scotland to remain a voice of reason in this debate, relentless in securing honest answers about the choice Scotland has to make.

But if Scotland votes No next year, this won’t be the end of the story. A vote against leaving the UK family is a positive vote to remain within it – and to be part of Scotland’s evolving position within it.

We can’t let this debate be set up as a false choice between separation, on the one hand, and a status quo set in tablets of stone, on the other. Because the more pragmatic reality is – and which business accepts – is that nations must adapt and evolve.

Gladstone, Grimond, Steel, Kennedy and Campbell – these are just some of the giants of my party who, down the years, have set the Scottish debate alight. And made a genuine, lasting difference.

And within the coalition government, we have a strong track record on this. Through last year’s Scotland Act 2012, we took substantial steps to improve Scotland’s devolution settlement.

And I want to thank Michael Moore and his team, for their work with business to ensure this new settlement will be one that serves the interests of Scottish business and Scotland’s communities.

The Act amounts to the biggest transfer of financial powers – including major tax and borrowing powers – from London to Edinburgh in 300 years. That work has been a priority for me in government, because, as a Liberal, I will always argue that our country is at its strongest and has its best shot at success when we share the power within it more fairly between our government and our people.

And the Campbell Home Rule Commission defined a truly modern settlement for a modern Scotland to be achieved through a major transfer of financial and constitutional power from Westminster to Holyrood: with Holyrood raising the majority of the money it spends. So Scotland can determine its own destiny on the domestic agenda.

Fiscal responsibility is critical to a modern, mature parliament; one that has to balance the budget not just spend the money. This also means much more autonomy and power for local councils and communities across Scotland, and across the UK.

This is a proposition that the Scottish government seems reluctant to accept. For example, it says it will consider powers for the Isles of Scotland to become independent in the future – yet they seem to be centralising power more and more.

My proposition protects the United Kingdom single market, one of the most important things for business. A single currency; a single regulatory system; a single, open, free market.

With Home Rule we truly get the best of both worlds. Local power and authority right alongside global clout, social equity and economic strength.

Many others are joining the debate. I welcome this. It is in the best Scottish political tradition to have a broad, inclusive conversation about the best form of government for Scotland. It worked to deliver devolution and it can work to improve devolution. And I urge you to join it too.

I believe that the structures of government, and the policies of government, should serve all of the people – that they should serve the people of Scotland.

A thriving business sector creates opportunity and diversity as well, of course, as the revenue on which our public services depend. So the future of devolution in Scotland must evolve in a way that enables your success too.

This train is leaving the station – debate is under way. So now is the time for you to express your views, to shape that debate, to influence and shape a modern and successful Scotland within a strong United Kingdom.

In conclusion, the responsibility that rests on the shoulders of the people who live in Scotland today is considerable. One year from now, you will decide whether Scotland remains part of the UK or not.

You won’t just be making that decision for now, for yourselves. But for ever – that’s because there is no turning back. The future of the 300 year union is your call on 18 September next year.

What I believe, and what the evidence shows is that, the best future for Scotland is to be part of a strong United Kingdom.

That is how we build a stronger economy and secure a fairer society in a UK where every corner of our country prospers, and where every individual – English, Scottish, Welsh and Northern Irish – can succeed.

Nick Clegg – 2012 Speech at Mansion House


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, at the Mansion House in London on 16 January 2012.

Another week, another speech about the evils of capitalism. Let me start by asking: who here is in favour of irresponsible capitalism? Because you won’t find many people arguing for more recklessness, more short-termism or greater rewards at the top. On the contrary – the growing consensus is that we need the opposite: a more sustainable economy; a more balanced economy, where rewards are proportionate and relate to real success.

That consensus, emerging among the political parties, has attracted a little cynicism.

I can understand that. It is, after all, bonus season in our banks. But there is a more generous interpretation of the shifting political mood. One that says: perhaps the penny has finally dropped.

As this debate moves forward, we need to be clear about what we mean. Because, whether you call it a new economy, an ethical economy, moral markets, responsible capitalism, there is a big difference between having strong views on bonus culture or excessive top pay and wanting real change in the practices and principles that guide corporate life. A bit of wrist slapping or moralising at the worst offenders will not be enough. This should not be a war of words but a real contest of ideas about how to reform our economy.

So this morning I want to offer a liberal diagnosis of what’s wrong; and then a liberal remedy.

First, diagnosis. Why is our capitalism in crisis? I will argue that this is, at root, a crisis of power.

That we now have an economy driven by immensely powerful vested interests. Interests that politicians have abjectly failed to stand up to.

The remedy, put most simply, is a redistribution of power. Last month I set out my vision for an Open Society and I talked about the need to disperse political power to create strong citizens. Today I want to talk about dispersing economic power to that same end.

Before I say any more, I want to make one thing clear: Capitalism may be today’s political punchbag, but let’s take a long view: it’s one of history’s great success stories. No other human innovation has driven progress – and raised living standards – so consistently. Markets catalyse ideas, invention and experimentation. When they work well, they are meritocratic and liberating.
And they generate the wealth to support the most vulnerable and needy in society.

Liberals believe strongly in the virtues of the market. But only if it is a market for the many, not a market for the few. Our economy is in danger of becoming the latter, monopolised by a minority, serving narrow and sectional interests.

I am not here to take a cheap shot at big business – this would hardly be the right crowd.

Big British firms are the backbone of our economy: our employers, our wealth generators, leaders in our society. And I am grateful to many of our major firms, particularly, for the commitment they are showing to greater corporate and social responsibility.

Just last week over 100 large companies signed up to the Coalition’s Business Compact, opening their doors to young people from all backgrounds in order to improve social mobility. I’m delighted to see some of them represented here today.

And I know many people in this room will agree: our economy is now seriously out of whack. It simply cannot be right that, right now, because of the crash and the recession, millions of ordinary people are struggling to get by. Yet relatively little has changed for those at the top.

It cannot be right that for most people, on average, wages are falling by around 3% a year, yet executive pay is rising – on average by 13%. Over the last 25 years, top chief exec pay has shot up by 1200%.

That is a gross imbalance, with wealth and influence hoarded among the few. It’s socially destabilising. Morally, it cannot be justified. And it’s bad for the economy too.

Our problem is what Jesse Norman has called crony capitalism. It’s easy to throw rhetorical rocks at directors, bankers and businesses. But, if we are honest, this is as much a failure of politicians and regulators, the authorities too often cowed by corporate power. Whether that is political parties of all stripes in hock to vested interests or regulators struggling to stop supermarkets from putting the squeeze on small suppliers, whether it’s politicians kow-towing to media barons, the problem is endemic.

There’s nothing new about it. Kings have always bestowed privileges on their favourite merchants. Corporations will naturally seek a dominant market position. It’s one of the reasons liberals from John Bright to the present day have been such fierce advocates of free trade. The agricultural landlords of the 19th century and early 20th century were happy for working people to pay more for their food because of protective tariffs. What Lloyd George in 1906 memorably called ‘stomach taxes’. So long as their own profits were protected.

This has always been capitalism’s greatest danger: a tendency for the rule makers and the money makers to get too close. And we saw the consequences of that closeness play out in the most dramatic fashion right here, in the City, just three years ago. It was a political failure; a regulatory failure; and a market failure too.

Political failure, because Whitehall became so dependent on City revenues. That politicians would not see the problems that were brewing. Instead, they hoped the goose would keep laying golden eggs.

Regulatory failure, because the Financial Services Authority failed spectacularly in its duties. Regulators are meant to guard vigilantly against industry excesses. But they turned soft – either captured by or intimidated by those they were supposed to keep in check. And, just like the politicians, just like the industry, the FSA ignored the alarm bells ringing. And market failure, as short-termism and recklessness eventually consumed our banks, taking the whole economy to the edge of a cliff.

Politicians in the pockets of vested interests, regulators asleep at the wheel, an unrestrained economic elite. The primary symptoms of crony capitalism.

For liberals – from Gladstone to Grimond – the role of the state has always been to break up unaccountable, opaque concentrations of power, to protect the national interest from those vested interests. That is why, as well as the moves the Coalition Government is making to bring greater transparency to government contracting and lobbying, we need real reform of party funding to reduce the influence of those interests in politics. We need tougher border controls between the political class and the corporate world, and we need a better distribution of power within our economy.

That’s why, for example we want new rules to stop an executive serving in one company from sitting on the pay board at another, so that directors’ salaries are no longer, effectively, decided by their mates. And we see an extremely important role for the state in redistributing wealth through income tax. In fact, one of the Coalition’s most significant reforms is our changes to income tax. Making it more progressive – so that lower earners keep more of what they earn.

But liberals also recognise that narrowing wage inequality is not solely a task for the state. We also need to put much more power in the hands of other stakeholders in the economy – shareholders and employees – when it comes to setting top pay. Trusting not the unfettered market, nor the interventionist state, but trusting people.

That is the core of a more responsible capitalism: power in the hands of people. Strong economic citizens able to keep vested interests in check. So let me say a word on the Coalition’s approach to empowering two groups in particular: shareholders and employees.

First, shareholders. Part of the challenge is getting more of them to behave like business owners rather than absentee landlords. If they are unhappy, we don’t want them just to sell up and move on, we want them to throw their weight around so that the company improves: but we need to make sure they have the right tools at their disposal and they know how to use them.

The Coalition has said we will introduce binding shareholder votes to curb executive pay as part of a package of measures to moderate boardroom behaviour. Vince Cable will set out that package next week but I can tell you today that we are going to overhaul the way shareholders – and others – can access information.

Often, the reason investors are passive is because they can’t see the reasons to act. Take annual and pay reports. Shareholders should be able to use them as a kind of report card so they can see how well their money is being spent. But, you’ve read them, many – not all, but many – are impenetrable texts: obscuring rather than illuminating. Hundreds and hundreds of pages of facts, figures, charts and graphs. Plenty of information but nowhere – nowhere – a simple, clear single figure showing who gets paid what; Or a simple summary of where the money goes – how much is spent on directors, how much on dividends, or re-invested into the business.

That information is absolutely essential for any investor trying to calculate value for money. Some companies do much better on making it transparent and easy to understand, but not enough. And where companies bury it – that is deeply cynical.

So the Coalition will force companies to open up their books, so that investors don’t need an accountancy degree to decipher them. We are looking at a range of ways of increasing transparency, but here are two very simple changes:

One: shareholders will only need to look at one number, not a dozen, to see how generously top executives are being paid, and they will need a clear policy in place for departing CEOs so that, if they deviate from that policy, and if a hefty payment is made for failure, that decision is up in lights.

Two: the way money is spent will need to be crystal clear. So if a company is spending too much on boardroom pay compared to the amount being reinvested in the business, they will have to explain why: show investors where their money is going. That’s how to unlock shareholder power.

But it’s not just shareholder power that matters. Ultimately investors seek profits, just like executives expect high pay. Some enlightened shareholders might see the benefits of a well-rewarded workforce, but the people best placed to look after the interests of staff are staff. And that is what, so far, has been missing from this debate: ordinary people.

In an open society, a liberal society, people don’t just hold more power in politics, but in the economy too. And, over time, empowering workers can have a hugely transformative effect over corporate culture. People want to work in companies which are dynamic, but they also value stability. They want firms that secure big profits, but not at any cost. They believe that effort and achievement should be rewarded above all else.

Aren’t those precisely the values everyone is now clamouring for businesses to hold?

There are, of course, a range of ways employees can be given a louder voice.

More rights, for example: like the new right to request flexible working and more flexible parental leave – to name just two.

But today I want to focus specifically on employee ownership, a touchstone of liberal economic thought for a century and a half.

John Stuart Mill hoped that employee-owned firms could end what he called the ‘standing feud between capital and labour’, and liberals have been championing it ever since. Because we don’t believe our problem is too much capitalism: we think it’s that too few people have capital. We need more individuals to have a real stake in their firms.

More of a John Lewis economy, if you like.

And, what many people don’t realise about employee ownership is that it is a hugely underused tool in unlocking growth.

I don’t value employee ownership because I believe it is somehow “nicer” – a more pleasant alternative to the rest of the corporate world. Those are lazy stereotypes. Firms that have engaged employees, who own a chunk of their company, are just as dynamic, just as savvy, as their competitors. In fact, they often perform better: lower absenteeism, less staff turnover, lower production costs. In general, higher productivity and higher wages. They weathered the economic downturn better than other companies.

Is employee ownership a panacea? No. Does it guarantee a company will thrive? Of course not. But the evidence and success stories cannot be ignored, and we have to tap this well if we are serious about growth. The 80s was the decade of share ownership. I want this to be the decade of employee share ownership.

Now that’s a big ambition, I know. And it won’t happen overnight. But it won’t happen at all without Government taking a lead, so I am kickstarting a drive in Government to get employee ownership into the bloodstream of the British economy.

We’re already doing this in the public sector, though the work of the Mutuals Taskforce, under Julian le Grand, and work being led by Francis Maude. And, of course, the radical reform of the Royal Mail – on that, I’d like to pay special tribute to Ed Davey. Governments have been grappling with the future of the Royal Mail for decades. Under Ed’s stewardship it will finally be transformed into an organisation in which staff have a meaningful stake. And now I’ve asked Ed to turn his hand to employee ownership in the private sector too.

Working with professional bodies and businesses, the Coalition is going to find out where the barriers are, so that we can knock them down. Do staff and business owners know enough about employee ownership? Are the accountants and lawyers who advise them taught enough about it? Is there red tape we can cut? Does the tax system treat these firms fairly? Do we need an off-the-peg model so that more ordinary people take this up?

We’ll appoint an independent adviser – an expert in the field – to help us find the answers and solutions to these kinds of questions, which will be brought together at a Summit I will chair in the summer.

Crucial to all of this, of course, will be encouraging take up. One option, to give you an idea, could be giving employees a new, universal “Right to Request” shares.

Imagine: an automatic opportunity for every employee to seek to enter into a share scheme, enjoying the tax benefits that come with it, taking what for many people might seem out of their reach, and turning it into a routine decision. Clearly the details of that kind of policy need to be properly thought through. We need to establish which companies would and wouldn’t benefit – it might not be feasible for microbusiness, for example.

But we need to start by thinking big: not asking ‘why?’, but asking ‘why not?’ Looking across the board – tax, regulation, simplicity, awareness – to help more of these companies flourish, in order to put more employees at the helm.

And that brings me to the thought I want to end on today: economic power in more hands.

As the debate on a more responsible capitalism moves forward, Liberals will remain set on that goal:

An end to crony capitalism, where vested interests trump the national interest. A better balance of power, in the economy – and between politics and business. That is the route to a safer, more stable, more prosperous economic future. This is how we will spread wealth and share rewards.

A more responsible capitalism. A more liberal capitalism.

Thank you.

Nick Clegg – 2012 Speech on Working Families


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, at the Institute for Government in London on 26 January 2012.

Yesterday’s GDP figures remind us that the road to the UK’s economic recovery will be long. And progress will be uneven. Those GDP figures remind us that we cannot simply ride out these troubles, waiting for the good times to roll around again. Nor can we return to business as usual. The financial crash and the recession that followed were unprecedented, and they were global. But the UK’s weakness in the face of those events was a damning indictment of the way our economy had been run. An economy that became closed, elitist, driven by vested interests, where we prized recklessness and short-term gains and undervalued stability and hard work.

So picking ourselves up for good means fundamental reform. Hitting the reset button to ensure that, not only does prosperity return, but this time it’s properly shared and really lasts. The first part of that is clearly deficit reduction. Filling the black hole; wiping the slate clean; preventing years of higher interest rates and fewer jobs; ensuring that the next generation does not pay for this generation’s mistakes; creating the sound public finances – the macroeconomic stability – that we know is a prerequisite for lasting growth.

But, beyond that, we must also rebalance our economy: ending our overreliance on financial services and the South East; shifting from consumption to investment; from debt-driven bubbles to sustainable growth. And there is another element of rebalancing – rebalancing our tax and benefits system. Because both need to be rebuilt with work at their heart, restoring some sense to the assistance and rewards the state provides.

We cannot pin all our hopes on the traders or the bankers. It will be the millions of hardworking Britons who deliver the nation from these difficult times. So we must now make the most of all of our human capital. And we must help struggling families stand on their own two feet. That means a benefits system that gets more people into work and a tax system that ensures work pays. Today I want to say a word on each.

First, benefits. I have always believed in a welfare system that helps those in need, those who cannot work must be protected and those who have jobs must be confident that, should they lose them there is a safety net in place. That is precisely why, in the Autumn Statement last year. The Coalition committed to the full uprating for pensions and out-of-work benefits from April – 5.2%, in line with inflation. Not everyone agreed that “the unemployed” should receive the full uplift, certainly not in the current climate. And, if you believed everything you read, you would think that these benefits are, essentially, unlimited handouts for the ‘idle poor’. But that just shows what is so often wrong with this debate.

For one thing, for decades now benefits have been uprated in line with prices, while earnings have generally increased at a faster rate. So the value of benefits such as Jobseekers Allowance have actually shrunk over the years, compared with the incomes of those in work. But, even more importantly, abuse of the benefits system by a minority has obscured the needs of a deserving majority. The older people who have contributed to our society for their whole lives, those who cannot work due to disability or serious illness. And – the group most often forgotten – working people who have been laid off, through no fault of their own and, most often, for short periods of time. Yes, sometimes the system is exploited – and that cannot be accepted. But the majority of people who claim JSA are off benefits within three months, people who pay their taxes, support their families, but are temporarily down on their luck. So we need a benefits system that helps those who can work into work.

And it is that simple principle that drives the Coalition’s welfare reforms. From the Universal Credit, to the benefits cap, to the Work Programme and the Youth Contract. While the economy was booming we saw four and a half million people stuck on out-of-work benefits, the number of young and unemployed hardly changed.

There are now 2.6 million people on incapacity benefits, 900,000 of them have been parked there for 10 years or more. And where children grow up in homes where no one works, they are twice as likely to experience long spells of unemployment themselves. It isn’t right; the country can’t afford it, the Coalition is determined to see it change.

Nearly 70 years ago, when William Beveridge designed the welfare state, he imagined a system that would give people protection from cradle to grave. Not one that would act as a crutch every day in between. The state must offer security in hard times. But it should not, he warned, ‘stifle incentive, opportunity, responsibility’. In the words of another great liberal, John Stuart Mill, ‘assistance should be a tonic – not a sedative’. I couldn’t agree more. And it is those same values, that same belief in the potential of ordinary men and women to flourish, that needs to be instilled in our tax system too.

My philosophy on tax is simple: the system should reward effort, enterprise and innovation and bear down on those things which are bad for our society. That sounds like a proposition with which most people would agree, but attitudes to tax are a good proxy for our deepest political instincts. And the three major political traditions in the UK – conservatism, socialism and liberalism – have very distinct approaches.

For those on the philosophical right, taxes are necessary. But there is an understandable fear that tax-done-badly can threaten entrepreneurialism and business, strengthening the hand of an intrusive state. That wariness means the right can be less inclined to promote tax as a way of redistributing wealth and opportunity, putting less of an emphasis on using the tax system to tackle inequality, for example, between those who earn their income and those who are asset rich.

For the traditional left, on the other hand, taxes are the principal means of redistribution. Socialists will support a penal rate of tax on the highest earners simply because it makes them poorer. For them, tax is a badge of socialist success: the more, the better. They would rather draw money in through the state and then hand it back to people, rather than letting them keep more of their earnings in the first place.

The liberal approach, put most simply, is based on a profound commitment to the value of paid work. Citizens are empowered when they can keep the fruits of their own labour. As Gladstone said, it is better for money to ‘fructify in the pockets’ of the people who earn it, rather than in the Treasury. And fiscal liberalism supports taxes on unearned wealth, precisely to lighten taxes on the wages of the hardworking.

Those principles could not be more important today. Because, in developed economies around the world, in every country now seeking to get back on the right path. Where money is scarce, where, every day, families are tightening their belts, the biggest question we face is this: how is that burden shared?

That’s why, this week, we heard President Obama devote his State of the Union Address to greater fairness in the American tax system. It’s why tales of tax avoidance are filling our newspapers everyday. And every politician now has a simple choice: do you support a tax system that rewards the hard-working many? Or do you back taxes that favour the wealthy few?

I know which side of the line I stand on: the UK’s tax system cannot go on like this. With those at the top claiming the reliefs, enjoying the allowances, hiring other people to find the loopholes, while everyone else pays through the nose.

So the Coalition is calling time on our unfair and out-of-whack tax system. We’ve put up Capital Gains Tax, ending the scandal of a hedge fund manager paying less on their shares than their cleaner paid on their wages. We’ve reduced tax breaks on pension funds for the very rich. We’ve clamped down on avoidance and taken steps to raise an extra £7bn through closing the tax gap.

And my priority in Government is freeing the lowest-paid from income tax altogether and cutting income tax for millions of ordinary workers. Over recent weeks you will have heard a great deal about fairness at the top, through Vince Cables’ reforms to curb excessive executive pay. You will have heard a great deal about fairness at the bottom, through reform of our welfare system to ensure benefits are fair and reasonable and to get more claimants into work. This is about fairness in the middle, more money in the pockets of the people who need it.

Whether you call them the ‘squeezed middle’, ‘hard-working families’, or, as I have, ‘alarm clock Britain’, cutting income tax is one of the most direct tools we have to ease the burden on low and middle earners – the people whose incomes are too high to qualify for welfare benefits but too low to provide any real financial security; the group whose plight the Resolution Foundation has done so much to highlight; the working mum whose bills keep rising but whose wages do not; the father kept awake in the dead of the night, worried tomorrow the company will be laying people off; the young couple who used to look forward to the holiday they would book or the car they would buy but who now know that if the boiler breaks or the washing machine packs up, the money just isn’t there.

Go back 50 years or so and many more working people were exempt from income tax thanks to a more generous tax-free threshold. But over the last few decades, wage rises have outpaced the increase in the allowance sucking more and more people into the income tax net. And, while in the early 70s, the Personal Allowance was worth around 28% of average earnings, by 2010 that had dropped to around 20%.

I am extremely proud that the Coalition is on track to raise the personal allowance to £10,000 for ordinary taxpayers over the course of this Parliament. We’ll make sure that anyone earning £10,000 or less will pay no income tax at all and, for those on middle incomes, the first £10,000 they earn will be tax free.

For millions of basic rate taxpayers – ordinary, hardworking people – that means paying £700 less in income tax each year – around £60 a month. In the 2010 Budget we increased the tax allowance from £6,475 to £7,475. This year we have already announced a planned rise of an additional £630, meaning that a total of 1.1 million more people will no longer pay income tax at all.

But today I want to make clear that I want the Coalition to go further and faster in delivering the full £10,000. Because, bluntly, the pressure on family finances is reaching boiling point. Compared to those at the top, these families have seen their earnings in decline for a decade and that’s got worse since 2008 with lower real wages and fewer hours at work.

Ongoing consolidation in the UK public finances has meant necessary increases in taxation, reductions in spending, restrictions on public sector pay, and higher contributions on pensions. Last year brought much higher world inflation – some food prices have doubled, some energy prices have gone up by 50%. And, yes, we are now seeing some moderation in inflation. But, in just three years, real household disposable incomes have fallen by some 5 per cent – one of the biggest squeezes since the 1950s, since the records began.

These families cannot be made to wait. Household budgets are approaching a state of emergency and the Government needs a rapid response.

Delivering the £10,000 personal allowance more quickly will need to be fully funded. We cannot just cut taxes by raising borrowing – that is just extra taxation deferred. And it would undermine our success in restoring stability and credibility to the public finances. So we need to find the money – and that will not be easy, of course.

But to those who say: we cannot afford to do this, I say we cannot afford not to do this. And it is because of the pressure our economy is under that there is now an urgent need to give families more help; an urgent need to rebalance our tax system so it rewards work and encourages ordinary people to drive growth. And that means those who are better off paying their fair share.

In its recent excellent report ‘Divided We Stand’ the OECD noted how the incomes of the richest 1 per cent have soared away from everyone else over the last 20 years and showed that these people could be making a bigger tax contribution. They also made clear that the right way to do this is not to increase marginal tax rates on work any further. This would simply drive many of the rich away to other countries or encourage them to use tax avoidance mechanisms more aggressively. Instead, they suggest, governments need to look at tackling industrial-scale tax avoidance as well as at the allowances and reliefs which favour those on very high incomes.

That is how we can raise the average taxes paid by the very rich without any further rise in marginal rates. To that end the Coalition set up the Aaronson Review to look at a General Anti-Avoidance Rule on tax so that the tax industry cannot spend all its time creating ever more contrived schemes undermining the principles and intentions of the system.

There are a range of other, specific areas where we need to be tough too, not least stamp duty avoidance, particularly on higher end property sales and the transferring of assets and income abroad to avoid UK tax.

We need to look at what more can be done to “green” the tax system. Not just because we care about the planet we leave our children, although that would be reason enough, but because, when the decision is between taxing pollution or taxing hard-graft, the right impulse is obvious.

And, there is another big part of the tax system where I believe we need to be much more ambitious: serious, unearned wealth. The eyewateringly lucrative assets so often hoarded at the top. We still live in a society where, for so many people how much you earn can never compete with how much others own. Our tax system entrenches that divide and we need to be bold enough to shift the burden right up to the top.

I know the Mansion Tax is controversial but who honestly believes it is right that an oligarch pays just double the Council Tax of an average homeowner even if their house is worth one hundred times as much? And who seriously thinks we would kill aspiration through a levy on the 0.1% of the population who own £2 million pound homes? The Mansion Tax is right, it makes sense and I will continue to make the case for it. I’m going to stick to my guns.

So, to finish as I began: we are living in tough times. And many families are feeling the pinch. We need more of those who can work to be in work, and real rewards and incentives for those who are.

It is often said that to govern is to choose and, in particular, to choose whose side you are on. That is especially true when there is no money around. My choice is clear: I want to help the hard-pressed and the hardworking. If that means asking more from those at the top – so be it.

We are committed to eliminating the deficit and eliminate it we will. But I am determined that we do so in a way that is fair, that rebalances our economy that gives the right people their dues.
People want economic competence, but they want compassion too.

It is my job to make sure this Government delivers both.

Thank you.

Nick Clegg – 2012 Speech on House of Lords Reform


Below is the text of the speech made by Nick Clegg, the former Deputy Prime Minister, in the House of Commons on 9 July 2012.

Mr Speaker, no one doubts the commitment and public service of many members of the House of Lords.

But dedicated individuals cannot compensate for flawed institutions, and this Bill is about fixing a flawed institution.

So let me begin by setting out why our upper chamber is in need of these reforms.

The three simple reasons why I hope members will give it their full support.

First: because we – all of us here – believe in democracy.

We believe that the people who make the laws should be chosen by the people subject to those laws.

That principle was established in Britain after centuries of struggle, and it’s a principle we still send our servicemen and women halfway across the world to defend.

Yet, right now, we are one of only two countries in the world – the other being Lesotho – with an upper parliamentary chamber which is totally unelected, and instead selects its members by birthright and patronage.

It’s an institution that then offers those members a job for life.

An institution that serves the whole of the UK yet draws around half its members from London and the South East.

An institution in which there are eight times as many people over 90 as there are under 40.

An institution which has no democratic mandate – none whatsoever – but which exercises real power.

The House of Lords initiates bills. It shapes legislation. As governments of all persuasions know, it can block government proposals too.

So these reforms seek to create a democratic House of Lords – matching power with legitimacy.

Under our proposals 80% of members would be chosen at the ballot box, with elections taking place every five years, the remaining 20% appointed by an independent statutory commission.

There would be no more jobs for life.

We’re proposing single, non-renewable limited terms of around fifteen years, and our reforms would guarantee representation for every region in the UK.

At the heart of this Bill is the vision of a House of Lords which is more modern, more representative, and more legitimate. A chamber fit for the 21st Century.

The second reason is that these reforms will lead to better laws. This Bill isn’t just about who legislates, it’s about how we legislate.

Right now, in our political system, power is still overly concentrated in the executive – governments, quite simply, can be too powerful.

Many members have seen, in their political lifetimes, landslide administrations able to railroad whichever bills they like through the Commons.

And we’ve all heard our colleagues complain about different governments trying to ram bills through the other place, when they should have been trying to win the argument in both Houses.

Despite its assertiveness, too often governments believe they can disregard the Lords. This Bill, by creating a more legitimate House of Lords gives it more authority to hold governments to account – a greater check on executive power.

That doesn’t mean emboldening the Lords to the point that it threatens the Commons – and I’ll come on to those concerns shortly – but it does mean bolstering its role as a chamber which scrutinises government.

It means forcing governments to treat an elected upper chamber with greater respect.

The aim of this Bill, to quote the Right Honourable member for Charnwood, is to create a second chamber: “more independent of the executive, more able to exercise independent judgement”.

That will not only mean better laws, but also fewer laws, restricting, again in the words of my Right Honourable friend, “the torrent of half-baked legislation” governments are capable of.

The third reason to support the Bill is simple practicality.

The House of Lords cannot continue on its current path. We need to reform the Lords to keep it functioning, and we need to do it soon.

Right now we have an upper chamber that is ever-expanding.

That’s one of the main consequences of the unfinished 1999 reforms.

Very simply: after a general election, new governments will always seek to reflect the balance of the vote in the Lords, but it is impossible to get rid of members – the only way to leave is to die.

So new administrations inevitably have to make more appointments to get the right balance.

The current membership is 816. That will soon be over 1000. Clearly the status quo is unsustainable.

The House of Lords is already too big and it will continue to grow bigger still unless we do something about it.

So this Bill reverses that trend. It gradually reduces the membership, and caps it at 450, plus 12 Bishops.

Some people have said the numbers could be dealt with much more easily:

That you can slim the other place by disqualifying convicted criminals or allowing members to resign.

The first solution would bring the total down by a handful, potentially. The second perhaps by none.

Others have said: yes, cap the House at an appropriate limit, but make it fully appointed.

But how could we possibly justify dramatic reform of the Lords that didn’t introduce a democratic element?

That would be unthinkable.

It would be in direct contravention of each of the three main party’s manifestos, flying in the face of our collective promise to renew our politics.

The only way to get to grips with the numbers is fundamental democratic reform. That is what this Bill does.

So democracy, better laws, the urgent and practical need for reform. The three reasons why members of this House should give this Bill their blessing and wish it a swift passage into law.

Mr Speaker, before I address some of the concerns around the Government’s proposals, I would just like to make the point that, while the Bill has been introduced by the Government, in many ways it’s not just the Government’s bill.

These reforms build on the work of our predecessors on all sides of this House.

As with all of the best examples of British constitutional reform, the proposals look to the future but are respectful of the past.

Veterans of these debates will know that the Coalition parties cannot claim full credit for the reforms presented here.

Go back to the White Paper produced by the Right Honourable Member for Blackburn in 2008; the late Robin Cook’s ‘Breaking the Deadlock’; the House of Lords Act in 1999; Lord Wakeham’s Royal Commission; and everything that went before over the last 100 years.

And it’s clear the reforms have a long bloodline that includes all of our parties and political traditions.

Indeed in 1910, when Government proposals to limit the power of the House of Lords were introduced, it was Churchill who said:

“I would like to see a Second Chamber which would be fair to all parties.

And which would be properly subordinated to the House of Commons …

And harmoniously connected with the people.”

He ended by saying:

“The time for words is past, the time for action has arrived.”

I couldn’t agree more.

In 2007 the Commons voted overwhelmingly for a mostly elected second chamber.

Each of the main parties stood on a platform of Lords reform at the last election and, since coming into Government, my Honourable Friend the Minister for Political and Constitutional Reform and I have looked for every way to take this forward by consensus.

We convened a cross-party committee, which I chaired.

We then published a white paper and draft bill for pre-legislative scrutiny.

A Joint Committee of both Houses spent nine months considering that White Paper and draft bill – and I remain extremely grateful for their forensic and detailed analysis.

We accepted over half the Committees recommendations and reshaped the Bill around their advice.

So this Bill is the sincere result of a long and shared endeavour.

Its history belongs to us all:

To Liberals, Conservatives, to Labour and to all other parties in this House, as well as to the great political reformers and pragmatists of the past.

Of course, that doesn’t mean every member of this House agrees with every clause. There is no perfect blueprint for a modernised second chamber.

Even within each of the main parties differing visions of reform can be found, and this Bill reflects a number of compromises that have been made to accommodate differences across this House.

And, I want to say to members of this House who have specific worries about particular aspects of this Bill: that’s precisely what further scrutiny of the proposals, in both Houses, will be about.

Of the concerns that remain – they fall into two camps.

The myths, which I will now seek to dispel, and the fears, which I hope to address.

Taking the myths in turn:

I have heard the accusation that the reforms will be too quick, too abrupt,

that the Bill amounts to some frantic act of constitutional violence.

The truth?

These reforms would be implemented over around 15 years.

New members would be appointed or elected in three tranches, over three elections.

The political parties and groups would have maximum discretion over how to reduce their existing numbers.

I have heard that the modernised Lords will cost the earth.

The truth?

Taken as a whole, and once completed, the Government’s reforms of Parliament will be broadly cost neutral.

The additional costs attached to running a reformed House of Lords – which, incidentally, are much more modest than some of the estimates doing the rounds – will be offset by the saving from reducing the number of MPs.

Once all this is implemented, the real terms cost of running Parliament is expected to be roughly the same as it is now.

The only additional cost will be conducting the elections themselves.

Next, I’ve heard Lords reform presented as some kind of Liberal Democrat crusade.

The truth?

All the main parties stood on a platform of Lords reform at the last election – and in elections before that too.

Indeed, it was in the Conservative Party’s manifesto in 2010, 2005 and in 2001, and the Labour Party has long campaigned against privilege and patronage in the other place.

Going back – as the Right Honourable Member for Neath has highlighted – all the way to Keir Hardie’s 1911 manifesto.

The final myth:

I’ve heard that the House of Commons should not be concerning itself with Lords reform at a time of economic difficulty.

Then let’s get on with it. Proper scrutiny, yes. Years of foot-dragging, no.

I don’t remember this complaint being made when we legislated to create elected police commissioners, or when we were debating local government finance, or legal aid reform.

And it’s odd to suggest that Parliament cannot do more than one thing at a time. But I certainly agree that jobs and growth are the priority.

So let’s not tie ourselves up in knots on Lords reform. We don’t need to – all the parties are signed up to it.

Vote for the Bill and the programme motion so we can scrutinise the Bill properly, while still allowing ourselves to make progress on other Government priorities.

So much for the myths.

Now let me address some of the fears about the Bill, many of which I believe have been expressed in good faith.

Broadly, there is a worry that we risk upsetting a delicate constitutional balance, creating a second chamber that is too assertive and so a threat to this place.

I’m not surprised by that – it’s part of a normal and familiar pattern.

Every time the other place has been reformed, questions over the primacy of the Commons have arisen, with predictions ranging from disaster to apocalypse.

In 1999 some said that new Life Peers wouldn’t accept traditional conventions, and so would start blocking manifesto bills, where Governments legislate on their election promises, resulting in endless gridlock over government priorities.

As with all these things, the prediction was completely wrong. The reformed House accepted that the conventions should continue.

It adjusted to its new status without overreaching its role as a junior partner – as it will again.

So, while questions of primacy are important and must be clearly answered, we should remember that these fears are the routine reflexes of Lords reform.

And this Bill will not turn the other place into some kind of monster. It relates to size and composition only, and does not contain any new powers for the other place.

Ultimately the primacy of the Commons will remain grounded in our conventions and absolutely guaranteed by our laws.

To ensure a rock solid legal backstop the Parliament Acts will remain, and we have reaffirmed the Acts on the face of the Bill to make that point crystal clear.

The Government will still be based in the Commons.

The appointed element of the new chamber means it could never claim greater electoral legitimacy.

And the Commons will of course continue to have sole responsibility for Money Bills.

A separate but related fear is that opening up the Lords to election will politicise it, creating a chamber of career politicians likely to rival MPs and robbing the Lords of its wisdom and expertise.

Let’s be clear on the current situation.

The other place contains some extremely eminent individuals, who bring a wealth of knowledge and experience to Parliament.

But it is hardly entirely dispassionate – an institution somehow untouched by party politics:

More than 70% received their peerage from party leaders.

That’s over two thirds of members taking a party whip – and very few rebel.

Members of the House of Lords are more likely to have come from this place than from any other profession – 189 are ex-MPs.

In a reformed House members will see themselves and their role very differently to us here.

Not least because of their longer term and the means by which they are elected.

This Bill attempts to make space in parliament for a different kind of politician.

A different character of parliamentarian.

The Government not only accepted the recommendation by the Joint Committee that appointed members should be able to combine membership with a role outside the House, but we have extended that principle to elected members.

Because the Lords should be a place for people who are public spirited, who have political and ideological affiliations, who want to serve this country, but who also want to continue to lead a life outside politics, who want or need to work, who have neither the desire or inclination to be an MP.

And they won’t be allowed to leave the Lords and immediately seek election in the Commons, encouraging them to see their time in the House of Lords as their one real chance to make their mark.

The combination of elections by proportional representation, single terms and a specific duty on the Appointments Commission to consider diversity could encourage more women, more members from BME communities, and more people with disabilities to serve.

And, crucially, the list system will mean that the new membership will properly represent all parts of the UK.

Right now nearly half of the members of the House of Lords are drawn from London and the South East.

Yet only 5% come from the North West. 2.6% from the North East.

Our proposals will correct those imbalances.

Proportionately, the West Midlands will see its representation more than double. For the East Midlands it will treble.

This Bill has sown into it the chance to create a richer, more diverse house, drawn from many more walks of life.

Mr Speaker, I would like to conclude my speech as I began.

There are three reasons to vote in favour of the Bill and its orderly passage.

Because we believe in democracy, for the sake of better laws, because reform cannot be ducked.

I welcome the reasoned and expert questions, arguments, concerns I know many members will raise.

I also know there will be those who are not interested in rational discussion.

Those who will oppose Lords reform in whatever form, at whatever time, no matter what commitments their parties have made.

This project has always been dogged by those who fear change.

What encourages me is that it has also been kept alive by those who champion democracy.

The reformers and modernisers who believe, simply, that power belongs in the hands of the people.

We, here, have a chance to finish their work. This has been a hundred year long project. Let us now get it done.

I commend the Bill to the House.

Nick Clegg – 2012 Speech at the Global Business Summit on Energy


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, at the Global Business Summit on Energy held on 6 August 2012.

It’s a pleasure to welcome you all to today’s Global Business Summit on Energy. One of a series of events, all timed to coincide with the Olympic Games, the biggest international business conference we have ever held.

Our aim today is to look at what more we can do together, to advance clean, smart energy generation, boosting our shared prosperity, as well as building a more resilient economy, better able to withstand future shocks.

The UK is already the sixth largest market in low carbon and environmental goods and services.

We lead the world in offshore wind – our total installed capacity is as much as the rest of the world put together.

With enviable natural resources, we’re one of the biggest players in marine and tidal energy too.

We offer political stability, legal certainty, the English language.

This is one of the best places in the world to do business – that’s according to the World Bank;

With the best regulatory environment in Europe – that’s according to a recent poll of European utility investors;

As well as some of the world’s best universities and research facilities;

Indeed we produce more Nobel Prize Winners than any other country bar the US.

We are creating the most competitive corporate tax regime in the G7.

Add to that the fact the world’s biggest single market is on our doorstep, despite Europe’s continuing difficulties it’s still home to 500 million consumers, and you have the ideal location to invest your money and grow your businesses: A global powerhouse in the industries you represent.

Despite pressures on other parts of the economy, since the 2008 financial crisis our low carbon sector has grown year on year with growth averaging 4.4%. But we want to do more; we want to seize every opportunity. Last year the sector was worth around £3.3 trillion worldwide and the race for green global investment is hotting up. The biggest, savviest economies are crowding in – China, Germany, Korea, Brazil. So the UK is upping our game exploiting our competitive edge making the most of our internationally respected brand in order to stay ahead.

Ed will set out some of detail on how the government is seeking to do that, so I will limit my remarks to our central message to you today. The one thing we want to impress on you above all else: This coalition government is unreservedly committed to helping our low carbon sector thrive – no ifs; no buts. And we want to support the shift by traditional industry to cleaner sources of energy – while of course recognising the pressures they face. When we say that we want green growth, that is not flimsy, political rhetoric: It is a very real aim, driven by very real economic needs.

I think it’s important to put that up in lights. The coalition is sometimes presented, in the press, as if it is riddled with debate and division with regard to greening the economy. That isn’t the case. Yes, there will be internal discussions and debates on the balance and sequencing of different policies – that’s the nature of any government – and energy policies will evolve over time as costs come down. That’s why, for example, we could recently reduce the subsidy for onshore wind. But the entire government is working within the parameters of the carbon budget, which sets the pace for decarbonising our economy. And there is no one in government who wants to depart from that.

We all want an economy rebalanced across industries and regions. We all want to build on our highest growth sectors to create more jobs.

So our challenge is giving you as much certainty as possible – we know that’s what you crave; we know it keeps your costs down. Indeed, it’s the issue raised with me most often by the people in this room. No-one expects an entirely risk-free investment environment, but your companies are embarking on major projects, breaking new ground, building infrastructure intended to last a lifetime, relying on low carbon technologies that involve significant upfront costs. And so, understandably, you place a big premium on predictability. We hear that loud and clear. And there are three overarching ways that we are seeking to provide it.

First – and this applies to all business: We have made macroeconomic stability an absolute priority, because it is an absolute prerequisite for confidence and growth. It is easy to forget that, at the time of the financial crash, the UK had a deficit bigger than Greece. By taking the difficult decisions we pulled our economy back from the brink. We have kept the markets at bay, remaining masters of our own destiny. Interest rates have remained historically low. A quarter of our deficit has now been paid off.

Yes, the road to recovery is long and testing, but make no mistake: if we have to sacrifice short-term political popularity for lasting economic health – so be it. We promised to safeguard economic stability in the national interest. That is what we will continue to do.

Second: consistency from government. So no surprises; no rabbits out of hats. We set out what we’re going to do – then we do it. It sounds obvious, but you all know governments don’t always behave like that.

Clearly our emissions and renewable targets provide an overall policy framework. And look, for example, at how we take decisions on things like our renewable obligations banding. We review it every 4 years, like clockwork. So, every 4 years, we consult with industry on the subsidy levels, we listen to the evidence you provide, and then we set the bands. And because everyone gets a sense of what’s coming, companies can plan and prepare.

That’s why, since announcing the new levels just a few weeks ago, we’ve already seen signs of progress on around £3.5 billion worth of investments. Today, for example, shovels will hit the ground in Tees Valley, where Air Products is building a renewable energy plant that will power 55,000 homes and create 700 construction jobs.

It’s true that sometimes we have to take a bit of time to get the detail right – especially on major items like Electricity Market Reform. But our aim is always predictable processes; transparent and inclusive policy-making; decisions that are based on evidence above all else. And, please, let us know how we can do more of that.

Finally: ambition. A willingness to be bold, because we seek nothing less than a clean, green, low carbon economy and the scale of that task demands imagination.

In order to meet this challenge we need to think big.

That’s why the UK’s fourth carbon budget constitutes the boldest emissions reduction target set, in law, by any government, anywhere in the world.

And we have been at the forefront of attempts to secure a more ambitious target across the EU.

We are creating the world’s first Green Investment Bank: A national bank devoted to leveraging billions of pounds for green infrastructure. The government’s UK Green Investments team has already begun making investments. And I can announce they have just sealed a contract to provide £100 million for investment in small-scale, non-domestic energy efficiency projects.

The Green Deal will start later this year. And which will transform home energy consumption. Creating a whole new market in UK home insulation and energy efficiency.

We’re beginning the biggest shake up of the electricity market in 3 decades. In order to level the playing field between low carbon and conventional energy.

We’ve just announced the largest investment in rail since the Victorian era.

We’re providing one of the best offers in the world for Carbon Capture and Storage, including our new £1 billion competition.
We’re the first country where listed companies will include emissions data in their annual reports. Something I pressed our international partners to adopt at the Rio Sustainability Summit in June.

We’ve dramatically overhauled our planning regulations, slimming over 1,300 pages of planning policy down to 49, easing the path for good, sustainable developments.

Big ticket reforms. World firsts. Policy that looks decades ahead.

So, stability. Consistency. Ambition. The building blocks of our shared prosperity. I hope today reminds you of the value this government places on your businesses and your ambitions.

Together we find ourselves at the vanguard of one of the most dynamic, most innovative, most important industries of our time. An industry that will help us build a more stable, more sustainable, more prosperous world. That’s a vision we can all get behind. This is a journey we are on together. And on that note, let me hand over to Ed.

Nick Clegg – 2012 Speech at UKTI Manufacturing Conference


Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, at the UKTI Manufacturing Conference held on 10 August 2012.

Nick thank you very much and thank you all very, very much for being here this morning for this excellent event.

I was at the Olympic Park yesterday like a lucky number of others watching Nicola Adams win the first gold medal, medal ever for a woman boxer in this new Olympic phenomenon female boxing. And it was such an uplifting celebration of talent and grit and determination and such a wonderful response to all the cynics and naysayers that Nick referred to and travelling here this morning I thought to myself that in many respects that celebration of success and that rejection of cynicism and pessimism is exactly what we should dwell on here this morning when we consider the strengths and potential in Great Britain for our advanced manufacturing and engineering sectors.

Because for far, far too long we’ve laboured under the wrong narrative which has undervalued our successes in this area and undervalued our future potential as well. For far too long there has been almost a sort of hidden, unspoken assumption that inventing, designing and manufacturing, exporting things is part of the sort of past legacy of our manufacturing heritage, but that the future is all about services, that going in to boring subjects like engineering and science is the wrong thing, that what you should do is always aspire to go in to the whizz bang service industries – accountancy, lawyer, the City, City – and so on.

And that is a dramatic misreading of our national strengths as a national economy and I really just want to in a very few minutes make three basic points, highlight our strengths as a global power for manufacturing and engineering. Secondly emphasise how determined we are as a Coalition Government to do more to expand on those strengths and thirdly to underline the importance I attach and we attach to inspire just as young people have been inspired by the Olympics, to inspire the next generation to dream of being the, the new Brunels and Stephensons of the future.

So firstly our, our strengths. It is just worth repeating how important so many of you are in the fabric of our British economy, some of the most successful companies in the world operate – Airbus, (indistinct) Jaguar and Land Rover – all of whom are very, very welcome sponsors of this event and Nissan, Siemens, BAE and so many other dynamic businesses represented here. We have the second largest aerospace industry in the world.

Despite the very disappointing trade statistics that were published overnight last night, we nonetheless saw that in the early months of this year the United Kingdom has, was exporting more cars than we import for the first time since 1976. A quarter of all Ford engines are made here, eight out of twelve Formula One teams are based here for good reason, because of access to skilled engineers and cutting edge technology.

It is a sector advanced, advanced manufacturing, responsible for almost three quarters of business research and development in this country and in so much of that research and development we lead the world in neuroscience, computer science, ecology, energy, material science and so on. And we pride ourselves that we also have strengths, natural strengths, (indistinct) that we are right at the heart of the world’s largest borderless single market right on our doorstep in the European Union, all of those strengths are strengths which we must celebrate because they are very, very phenomenal strengths indeed.

We need however as I said secondly to do more to build on those strengths and I won’t, because it’ll consume too much time and I know that Vince Cable and others will go in to this in greater detail later, enumerate all the measures that the Government has taken, but whether it is the new technology innovation centres, that try and emulate some of the world’s best examples of clustering academic excellence with advanced manufacturing research; whether it’s our very ambitious plans in infrastructure (indistinct) long term productivity of the economy so heavily depend; whether it’s the commitment to a high speed train spine up and down the length of the country, whether it’s the new guarantee scheme that we have recently announced using the strength of the Government’s balance sheet to mobilise private sector infrastructure and investment infrastructure; whether it’s the Green Investment Bank, the first of its kind, (indistinct) using three billion pounds worth of public money to leverage in several times that private sector money in our new renewable energy infrastructures.

Those are all examples of commitment to infrastructure which is so necessary to your work, whether it’s rebalancing the sectorally unbalanced pattern of British, the British economy over, which has built up over the last two or three decades where so much growth is concentrated in the City of London, the South East and not enough is concentrated in what has become regions elsewhere in the country, in the North of the country in particular who’ve become over reliant on public sector subsidy. We’re using instruments like the Regional Growth Fund, two and a half billion pounds worth of direct finance from the Government to companies and particularly to manufacturers elsewhere outside the South East of the country who are committed to diversifying their businesses, creating jobs and creating greater private sector dynamism in other parts of the country.

Those are just some of the examples of what we are doing. We’ve already launched, already implementing in the last two and a half years to build on those successes. But as I said at the outset, the final point I’m going to make to you before taking questions and comments from you is the importance of the, and the Olympics, the slogan is inspire a generation. I think we together, everybody in this room, the politicians and you in industry, we need to work together to inspire a generation so that unlike, I’m forty five, when I was at school I wasn’t the greatest at science and maths, but nonetheless no one suggested to me or to my friends at school at the time that maybe we wanted to dream of being engineers, of being, going in to industry, going in to manufacturing. This was, this was the early Eighties and it was all about making a fast buck in the City of London or going in to the glamorous industries of advertising or the media. There was no positive image visually given to our youngsters of an alternative career path. That has to change and thankfully it is changing.

I’ve got three little sons. I want my sons to dream of doing what their grandfather and their great grandfather did who were in different capacities, scientists and industrialists and, and manufacturers. And we’re committed to do that, whether it is, notwithstanding all the difficult cuts we’ve had to introduce in public spending, protecting public spending on science, whether it’s the reforms that we are introducing in order to ensure and guarantee that our universities remain amongst the very best universities in the world; whether it’s the expansion of apprenticeships on a scale that has not been seen in this country in the post war period, we’re delivering a quarter of a million more apprenticeships during this Parliament than was planned by the previous administration; whether it’s the creation of twenty four new university technical colleges which specialise in subjects like advanced manufacturing, engineering and health technologies; whether it’s the new Queen Elizabeth Prize for Engineering which was launched, which is an international prize with a million pounds from us in order to celebrate and highlight the best achievements in engineering; whether it’s the network of around twenty eight thousand volunteers we’ve had from academia and industry who are going in to schools to get children enthused about a career in science and technology.

All of those things and more are the kind of things we need to do together to make sure that we don’t regard our manufacturing excellence as something which only belongs to the past and present, but it’s also absolutely crucial to a thriving and prosperous future for the United Kingdom in the years to come as well. Thank you very much for listening to me.