UKPOL.CO.UK

Category: Speeches

  • Nick Gibb – 2019 Statement on Relationship Education in Schools

    Below is the text of the statement made by Nick Gibb, the Minister for School Standards, in the House of Commons on 16 July 2019.

    This spring, Parliament passed the relationships, sex and health education regulations with overwhelming support. We know that many parents agree that these subjects should be taught by schools. We also know that for some parents, this raises concerns. Parents have a right to understand what we are requiring schools to teach and how their child’s school is intending to go about it. That is why we will be requiring schools to consult parents on their relationship education or RSE policy. Open and constructive dialogue can only work, however, if the facts of the situation are known to all.

    We are aware that misinformation is circulating about what schools currently teach about relationships and what they will teach when the new subjects are introduced. The Department for Education has undertaken a number of activities in response. In April this year, we published frequently asked questions designed to bust myths on the subjects. They have been translated into three languages. In June, we published the final version of the relationships, sex and health education guidance, as well as guides for parents on the subjects. Alongside that, we produced infographics that can be easily shared on social media—including WhatsApp, where we know much of the misinformation is shared—setting out the facts. We also sent an email to almost 40,000 teachers, providing them with factual information and links to various documents.

    The Department has also been working on the ground with Birmingham City Council, Parkfield School, parents and other interested parties to convey the facts of the policy and dispel myths, to support a resolution to the protests in that school and nearby Anderton Park School. Nationally, we have worked with the National Association of Head Teachers to understand where there might be parent concerns in other parts of the country and to offer support. We will continue those efforts to support the introduction of the new subjects, which we strongly believe are hugely important for children growing up in modern Britain.

  • Jonathan Edwards – 2019 Speech on No Deal Agricultural Tariffs

    Below is the text of the speech made by Jonathan Edwards, the Plaid Cymru MP for Carmarthen East and Dinefwr, in Westminster Hall on 16 July 2019.

    I beg to move,

    That this House has considered a proposed tariff schedule for agricultural products in the event that the UK leaves the EU without a deal.

    Diolch yn fawr iawn, Mr Hollobone. It is a pleasure to serve under your chairmanship once again.

    On 13 March this year, the British Government published their temporary tariff regime for a no-deal Brexit. At the time, the announcement gained little political attention as it was the policy of the period to avoid no deal at all costs. One of the greatest failures of the current Prime Minister is her use of the phrase,

    “No deal is better than a bad deal”.

    She fell into a bear trap set by the extremists in her own party. When the British Government switched strategy in summer 2018 to warn explicitly about the dangers of no deal as a means of gaining parliamentary support for her deal, it was too late. The infamous phrase had legitimised the totally reckless policy of a no-deal Brexit.

    With the Prime Minister’s demise, the leadership election for the Conservative party has been dominated by the question of who can puff out their chest the most on Brexit. The debate has occurred in a parallel universe, far divorced from political realities. However, one conclusion we can safely assume is that it seems inevitable that no deal will become a viable option for the next Prime Minister, so all aspects of British Government policy in relation to a kamikaze Brexit deserve greater scrutiny.

    A key aspect of a no-deal situation is that, on 1 November, if the likely next Prime Minister sticks to his Halloween promise, the British Government will have to introduce an independent tariff schedule for goods entering the newly formed UK customs area. A major consequence of leaving the EU with no deal is that the territories of the British state will no longer inhabit the safe harbour of the EU customs union.

    I could have concentrated on a whole range of goods that will be impacted, but I want specifically to debate agricultural products for two reasons. First, Carmarthenshire is a proud agricultural county, and therefore leaving the EU customs union will have a disproportionate impact on the communities I serve. Secondly, tariffs on agricultural products are traditionally far higher than on other goods. That is especially true of the European Union, the destination for the vast majority of Welsh produce.

    As part of the EU customs union, Welsh farmers are protected by those high tariffs, which has enabled our food producers to develop high quality goods with unhindered access to the most lucrative and largest market in the world. The agricultural industry faces not only the loss of unfettered free access to its main export market in Europe; the new tariff schedule and its accompanying quotas offer precious little protection for the domestic market from being flooded by lower standard food products from around the world. That ​double hit would be too much for many farmers in my constituency and beyond. I cannot emphasise the dangers to the industry enough.

    Both farming unions in Wales agree. John Mercer, Director of NFU Cymru said:

    “It is absolutely clear that a no deal scenario will be catastrophic for Welsh and indeed British agriculture. A scenario where Welsh farmers have to operate under the ‘no deal’ default of WTO tariffs will have devastating effects and will severely threaten the livelihoods and business of Welsh farmers.”

    I am delighted to report that Mr Dafydd Jarrett from NFU Cymru is watching our proceedings.

    Glyn Roberts of the Farmers’ Union of Wales said:

    “It says it all that the prospect of a hard Brexit means a rich and highly developed state is stockpiling food and hoping to use an exemption to WTO rules on the Irish border which would more normally be applied in cases of war or famine. Yet this situation is not compulsory; this is a crisis which in fact we can easily avoid by acting in the best interests of our four nations; by withdrawing Article 50 and telling people honestly why Brexit must take place over a safe and realistic timetable.”

    In July 2018, the British Government lodged proposed schedules with the World Trade Organisation setting out the most favoured nation tariffs that would apply to imports to the UK after Brexit. Subsequently, in March 2019, the British Government set out proposed temporary tariffs to apply in the event of a no-deal scenario, which would see zero tariffs applied to 87% of imports measured by value for up to a year in a temporary regime, while consultation and review on a permanent tariff regime takes place.

    I am pleased that the British Government have exercised at least a degree of sensitivity in their treatment of the sheep sector, recognising the need to maintain tariff protection for lamb in the event of no deal by maintaining the full WTO tariff of 48% on lamb imports. However, what they give with one hand, they take away with the other. Tariff rate quotas will allow lower or zero tariffs to be applied up to a certain level of imports on some products. We know, for example, that New Zealand will continue to enjoy significant tariff-free access to the UK market for 110,000 tonnes of lamb annually. One of our principal competitors in the lamb sector will therefore enjoy more generous tariff-free access to our market.

    George Eustice (Camborne and Redruth) (Con)

    I was involved in some of that work and the development of that schedule as a Minister. The existing New Zealand tariff rate quota would be split in half, giving it less access to the UK market than previously. Is the hon. Gentleman aware that, in any event, in recent years New Zealand has used only about 70% to 75% of its current rate quota because it cannot compete with lamb produced in the north-west and south-west of this country even before it reaches that ceiling?

    Jonathan Edwards

    I recognise the former Minister’s expertise in the matter. We will have to wait and see what farmers have to say about that. I invite him to attend the Royal Welsh show next week and make that point. I am sure he would receive a welcome response to his comments.

    The new Brexit date of 31 October will coincide with very high numbers of finished lambs coming on to the UK market.​

    Liz Saville Roberts (Dwyfor Meirionnydd) (PC)

    Will my hon. Friend take this opportunity to invite Ministers not just to the Royal Welsh show next week but to Balla Mart, which will be held on 31 October, when perhaps 800,000 small-body lambs will come to market at a time of considerable pressure on prices?

    Jonathan Edwards

    I welcome my right hon. Friend’s intervention, because it takes me to my next point. If we are locked out of European markets, there is no way in which domestic consumption could pick up the slack. Additionally, the final quarter of the year sees the sale of light lambs from Wales, which are traditionally destined for export. There is no way in which they could be redirected into domestic consumption. Economists previously assumed that the loss of the EU market would depress UK farm-gate prices by 30%.

    Tim Farron (Westmorland and Lonsdale) (LD)

    I am grateful to the hon. Gentleman for being so generous. The added threat of tariffs, as he suggests, is that British supermarkets will think they have farmers over a barrel because of the loss, in effect, of our export markets. Does he agree that Ministers ought to take action now and increase the powers of the Groceries Code Adjudicator to ensure that supermarkets cannot exploit the situation?

    Jonathan Edwards

    I am grateful for that valid intervention. Those are the remedial measures that the British Government should be looking at urgently to protect our domestic farm producers. We are all aware of the imbalance there has been in the supply chain over many years, with, as he said, producers under the barrel of the supermarkets. The situation may well be exacerbated by what comes in the following months.

    To return to my point, economists believe that farm-gate prices will fall by 30%. With an additional 800,000 lambs on the domestic market at the end of October, farm-gate prices will come under additional pressure. I therefore call on the British Government to commit, on top of the measure mentioned by the hon. Member for Westmorland and Lonsdale (Tim Farron), to additional funds for Wales to be able to implement contingency plans should the worst happen and we find there is unsellable surplus on the domestic market. There would be a disproportionate impact on Welsh agriculture.

    In other sectors, the British Government have elected partially or completely to dismantle tariff walls on most products. Tariff rates of 45% for beef, 0% for eggs and 22% for poultry meat will apply for imports into the UK from the EU and the rest of the world, while our exports of those products to the EU will face tariffs of 84%, 19%, and 48% respectively. In the dairy sector, only certain products—such as cheddar with a 7% tariff and butter with a 15% tariff—will be afforded some degree of protection, with the EU applying tariffs of 57% and 48% respectively on those products.

    Liz Saville Roberts

    I am grateful to my hon. Friend for his time. Does he agree with Dairy UK’s analysis that the toxic combination of WTO tariffs on exports aggravated by zero tariffs on imports will cause a massive shock to raw milk prices? That will affect big dairy sector employers such as farmer-owned South Caernarfon Creameries.​

    Jonathan Edwards

    That was another valid intervention. The hit will not be just to core producers, but along the supply chain to some of the producer and production capacity as well.

    Commodities such as skimmed milk powder, yogurt, whey, cream and liquid milk will not be protected by any tariffs. If farmers in Northern Ireland cannot send their liquid milk into the Irish Republic for processing and export, there will also be the problem of a major oversupply of liquid milk on the domestic market.

    Jim Shannon (Strangford) (DUP)

    In my constituency we have Lakeland Dairies, which has two factories in Northern Ireland and two factories in the Republic of Ireland. Michael Hanley is the chief executive officer of that firm. He says that whether or not there is a Brexit deal, life will go on. In other words, the movement of milk across the border, either way, in liquid or powder form, will still take place. We need to be aware of what some businesses are saying. That comes straight from a firm in my constituency.

    Jonathan Edwards

    I appreciate the hon. Gentleman’s expertise; he is a farmer himself, I believe. However, if there is a no-deal Brexit, the European Union will have to protect its customs and market territory under all circumstances; otherwise, it would undermine the essence of the customs union and the single market.

    Owing to our inability to discriminate between countries under WTO rules, the tariffs that we apply to the EU27 in the case of no deal will be the same as those we apply to countries with which we do not have a trade deal. At the moment, that is basically the rest of the world, apart from the Faroe Islands and a few other territories. That would mean that South American beef, which is currently subject to the EU’s common external tariff of 84%, would, in the event of a no-deal Brexit, be able to enter the UK subject to a 45% tariff and out-compete our domestic producers.

    Many classes of imported product will be produced to standards that are currently illegal in the UK, and that will undermine our high domestic standards. As an unintended consequence, it will also hinder our ability to trade with our biggest market, which prides itself on high standards. The fact that the UK could be on the cusp of leaving behind a trade policy based on almost half a century of EU membership and swapping it for a trade policy based on WTO tariffs and protection for a handful of products is, to say the least, deeply concerning.

    All that, and I have not even begun to countenance the north of Ireland. The UK temporary import tariffs are set to apply to products exported from Ireland to the British mainland but not to goods crossing from Ireland into Northern Ireland. Although protecting the integrity of the Good Friday agreement must be a priority, that fantasy solution has been branded useless by the unions, as it flies in the face of WTO and EU rules.

    On another point often used by the British state to defend its tariff schedules, although I recognise the importance of ensuring that food prices do not rise in the immediate aftermath of no deal, the second-order effects of a no-deal Brexit on the economy could well lead to the cost of living sky-rocketing, rendering that argument null and void. Surely, ruling out no deal in the first place is the best way of achieving food price ​stability and food supply. If the next Prime Minister insists on keeping the myth of no deal alive, I would urge him to prioritise revisiting the proposed tariff schedules, with a view to ensuring that protections are maintained rather than eroded or removed completely.

    From a wider strategic perspective, what proponents of no deal do not admit is that the strategy is essentially a negotiating tactic. I do not think that even the mad caps of the Tory European Research Group want to base the British state’s trading relationship with the EU on the North Korean, Venezuelan, Cuban, Belarusian and Kazakhstani model. They believe that threatening no deal will secure favourable terms from the European Union. That has not been the case to date and is highly unlikely to change in the autumn, owing to the simple fact that the European Union holds all the cards in the negotiations.

    I do not think our inability to secure such terms is down to insufficient effort by previous UK negotiators. The strategy is the international trade equivalent, as one expert put it, of placing a gun to our own head and telling our opponent that we will pull the trigger unless they concede. In that case, they are likely to say, “Go ahead.” The reality is that, far from being intransigent, I am amazed by the patience of our European friends as Westminster goes through a full-scale political nervous breakdown.

    The strategy, however, has developed. Some in the Conservative party now believe that the crisis of a no-deal situation, which will face the British state on 1 November, is the best way to secure favourable terms in future negotiations, as opposed to doing things in a managed, grown-up way. It is a game of risk, in other words. Those advocating no deal are prepared to throw all their chips in the air in the hope that they fall on the right roulette numbers. Personally, when dealing with people’s jobs and living standards, I prefer a more strategic and nuanced approach.

    Before the Minister starts blaming my side of the argument for keeping no deal alive by not voting for the Brexit deal, it is the case that the Brexit model and narrative in front of us today has shifted drastically towards a harder, more extreme Brexit. At the start of the process, directly after the EU referendum, a soft Brexit was perceived as staying within the framework of the EU single market and customs union, while a hard Brexit was widely perceived as Canada-plus. At the time, Plaid Cymru would have been content with the former. Indeed, we have voted for those options when they have been before the House. By now, the discourse of a soft Brexit looks more like Canada-plus, while a hard Brexit is widely accepted as being no deal. There is no way on earth that we could accept either of those options with a clear conscience.

    The reality of the situation is clear: on day one of a no-deal Brexit the British state will have to negotiate a series of mini deals or face dire economic consequences. No deal is therefore a complete oxymoron. The European Union has said clearly that its priority before any meaningful negotiations would be settlement of the £39-billion divorce bill, citizens’ rights and the British border in Ireland. Considering the British Government will have to concede on those three issues no matter what they do, I am at a complete loss as to why anyone who supports Brexit voted against the withdrawal agreement.​

    Over the last year, the British Government have clearly outlined the dangers of a no-deal Brexit. On top of an economic recession equivalent to the great financial crash of 2008, highlights include troops on the street to deal with civil unrest; food shortages and higher prices as import supplies are disturbed, especially for fruit and vegetables; customs checks costing UK businesses £13 billion a year; no legal protections when buying products and services from EU countries, while UK courts no longer offer redress for consumers; flights from UK airports not receiving equal treatment when traveling to and landing at airports of countries who are members of the common aviation area; the Eurostar being disrupted until new arrangements are negotiated with each country along its routes; and fishing boats losing access to EU fishing waters, and being unable to land their catch at EU ports—and that is just what the British Government have chosen to share with us over the last few months.

    Pascal Lamy, who should know a thing or two about such things as director general of the World Trade Organisation between 2005 and 2013, equates leaving the European Union single market and customs union and trading on WTO terms to leaving the first division and facing a double relegation to the third division. Aware of the potential backlash to such a reality, no-deal proponents now argue that the British state could seamlessly enact article XXIV of the general agreement on tariffs and trade to keep the current tariff schedule. That argument was shot down last week by the WTO’s current director general, who said:

    “Article XXIV of the GATT is simply the provision of global trade law under which free trade agreements and customs unions are concluded… If there is no agreement, then Article XXIV would not apply, and the standard WTO terms would.”

    In other words, as we now famously know, paragraph 5(c) of article XXIV of GATT states that it applies only if there is a deal—the direct opposite of what the no-deal apostles are arguing for.

    For that reason, I have little doubt that, were the British Government to adopt no deal as its official policy, they would lose a vote of no confidence in this House. I for one am certainly committed to voting to bring down the British Government in order to defend the economic interests of my constituents. Diolch yn fawr iawn.

  • Philip Hammond – 2019 Statement on ECOFIN

    Below is the text of the statement made by Philip Hammond, the Chancellor of the Exchequer, in the House of Commons on 16 July 2019.

    A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 9 July 2019. The UK was represented by Mark Bowman (Director General, International Finance, HM Treasury). The Council discussed the following:​

    Early morning session

    The Eurogroup President briefed the Council on the outcomes of the 8 July meeting of the Eurogroup, and the European Commission provided an update on the current economic situation in the EU. Ministers then discussed potential new sources of revenue for the upcoming multiannual financial framework the EU’s long-term budget.

    Own resources

    The Finnish presidency gave an update to the Council on the potential new sources of revenue for the upcoming multiannual financial framework, following a discussion during the early morning session.

    Presidency work programme

    The Finnish presidency presented its work programme on economic and financial matters for July to December 2019.

    Appointment of the President of the European Central Bank

    The Council adopted a Council recommendation on the appointment of Christine Lagarde as the next President of the European Central Bank.

    European semester

    The Council adopted the 2019 country-specific recommendations as part of the European semester process.

    Any Other Business

    The Dutch Finance Minister briefed ministers on the topic of aviation taxation and carbon pricing.

  • Greg Clark – 2019 Speech on Competition Rules

    Below is the text of the speech made by Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, on 18 July 2019.

    I was reflecting on competition, probably as we all were at the weekend when we were spoilt for choice in terms of particular sporting competitions.

    In this context, it’s not the perhaps, briefly more acquired taste of lawyerly ding dongs at the Competition Appeals Tribunal.

    But we were really spoilt last week in having Lords, Wimbledon and Silverstone.

    As I was watching the tennis, it struck me that the International Tennis Federation must have had to change the rules on permitted rackets in the face of the technological revolution that has taken place in material science.

    And guess what?

    Up until 1978, the rule on rackets amounted to these timeless and rather laissez-faire 11 words and I quote:

    “The frame may be of any material, weight, size or shape.”

    Admittedly, there were 60 further words on the stringing of the racket, another 65 enouncing the principle that the character of the game should not be changed by “undue spin”.

    But what has happened to that admirably brief 140 words of competition regulation since then?

    Well, the era of laissez-faire in tennis rackets is definitely a distant memory. The rule has had an 8-fold word-count increase.

    The federation now pronounces on details going all the way from maximum dimensions to whether the racket can have communications equipment embedded within it.

    From whether a player can use two rackets at the same time to whether a racket can carry a solar cell or battery. There’s a serious point in all this. Tennis works as a competition because the ITF makes sure that the rules are kept up to date with changes that take place.

    We the public are the ultimate beneficiaries of the wonders of sport at this level and we can enjoy the game decade after decade because the rules keep up with the technology.

    To paraphrase The Leopard, if the game is to stay the same, everything must change.

    And so, I want to argue today, the same is true for competition in the economy.

    If we want to have rivalry, we want to continue to do the unrivalled good that competition has, in the past, done for our economy, we must constantly adapt its rules.

    There are three main reasons that the rules of competition must change:

    First, this is unfinished business from the recent past, we have got to make retail markets in regulated sectors – like energy, finance and telecoms – work consistently in the interests of all households.

    Second, platforms, big tech, big data are, as everyone knows, disrupting the basic plumbing of markets and, despite the huge benefits they have brought, they sometimes create new forms of harm – especially for vulnerable consumers. Third, we have a productivity problem to solve and competition policy is one of the really powerful tools for improving the economic performance of firms.

    All over the world, governments and competition authorities have seen that the promises made of the system, that was slowly built over the last 40 years with Britain leading the way consistently, has sometimes fallen short in the face of new threats.

    In this talk, I’d like to take stock of what we’ve achieved in the last three years and to talk a bit about what needs to be done and to communicate why, in my view, it is so urgent we get on with this.

    But before turning to each of these, allow me a brief, historical detour which I hope will show that government shaping of markets has always been with us, and needs to be approached without ideology – pro or contra – but in a pragmatic and empirical spirit.

    You can go to the British Museum today and see a stamp of King Alfred’s penny on a half-pound lead weight. It had been given the King’s seal of approval, literally. You could buy your grain and the King vouched for the weight you’d get in exchange. And there’s an obvious reason; Alfred needed to regulate markets.

    Just imagine the Monty-Pythonesque scene of a market on the Mercia/Wessex border, circa 880AD, where the miller defends himself against a buyer claiming fraud.

    He claims his weights are right. The baker offers another definition of the pound, and the butcher a third.

    If you think mobile phone tariffs can be confusing, just imagine comparison when different suppliers don’t agree on basic measures of minutes or gigabytes.

    Regulation to make sure that competitive markets can even establish themselves has been the stuff of government forever.

    Our complex modern economies work because we’ve been able to push away the boundaries of mistrust.

    The extraordinary wealth that has been created and spread by national and international markets is underpinned by the countless rules and mechanisms of regulation. Much of it, from the joint stock company to food standards, backed by the force of law.

    But that’s not the only reason that Alfred had to regulate markets. It was also that by unifying Wessex, Anglia and Mercia, that he created a single market and so disrupted older patterns of exchange. And this was very good for all the reasons that we know – insurance, specialisation, etc.

    But it also undermined some of the traditional social mechanisms in which trust was rooted. If you didn’t know people in your town or village or wider area, then the traditional foundations of trust may not be adequate.

    And so, regulation, again, filled the gap and allowed the new markets to flourish.

    If good regulation does not accompany disruptions, then they can be resented, especially by those most reliant on those old social contexts.

    This need to make new retail markets work for all fits, in many respects, the problem we have today.

    I think of it as unfinished business of creating well-functioning consumer markets in the basic utility sectors that have been gradually deregulated over the last 40 years.

    There have been some huge successes in this programme.

    Technological disruption, driven by carefully constructed competition in telecoms, for example, has completely transformed our lives.

    The same scale of transformation cannot yet be claimed for how we use gas, electricity or water.

    The basic philosophy of utility deregulation in domestic retail markets was that we could eventually replicate the sorts of healthy, competitive markets that have evolved in essentials like food.

    This was part of the broader new regulatory philosophy pioneered by Britain 40 years ago and copied all over the world.

    The retail markets piece of this transformation still needs further development.

    First, there’s the relatively slow pace of basic innovation in some of these markets. Second, they have often settled into business models in which many consumers continue to be subjected to higher prices than can be justified, while a savvy minority benefit from very cheap deals.

    The CMA called this to public attention with the problem of default tariffs in energy. Martin Cave, who wrote the dissenting minority opinion to the CMA report is here and now chairs Ofgem.

    This recommendation to impose a retail price cap on default tariffs was made and Citizens Advice followed this up with, in my view, its very welcome “Super-Complaint” to the CMA, applying this argument to other markets.

    Let me take this moment to thank the Social Market Foundation and James Kirkup, in particular for the traditions and the work that this organisation has done to advance our understanding of the issue and how we can tackle it.

    The “loyalty penalty” has now been extensively analysed by the CMA and other regulators.

    The numbers can be eye-watering.

    A household inactive in all the markets studied risks being over-charged by £1549 per year.

    That is the same amount as the entire, annual discretionary spending of the poorest 10% of households, and often there is a close collaboration between the poorest and those who are paying higher.

    This government has responded extremely supportively to the CMA’s recommendations on the “loyalty penalty”. Business and their regulators must find ways to end the worst effects of these business models and the companies involved should look to the energy industry as a proof of our seriousness in the lengths we need the regulators to go to.

    Luring consumers onto cheap tariffs in the hope that many of them will fail to notice subsequent price rises should be seen as simply bad business.

    Doing everything possible to confuse customers so they don’t notice the rises is even worse. Protecting consumers from sharp practices has been a constant of Government in this country for centuries.

    I’ve mentioned Alfred’s standardisation of weights already. Another example comes in the medieval “Assizes of Bread”. Specialist courts that made sure that bakers and millers were stopped from selling substandard product.

    A home insurance company that gradually turns the screws, an energy company that price-walks you up the curve; they are earning their gains on a sort of asymmetry of power and information in which we have long intervened.

    These are business practices that rely on undermining the trust of the consumer.

    The markets that have really benefited from competition are the ones in which innovation, quality and price are the focus of corporate energies – not the invention of a new pricing practice.

    If the notion generally takes hold that our utility markets are rife with this sort of behaviour then the entire legitimacy, it seems to me, of that sector suffers, and indeed, the whole economy suffers.

    This is a point that has been very eloquently put on many occasions by Lord Andrew Tyrie, with us today, whom I was delighted to appoint to be Chair of the CMA. Andrew’s work before he took up this position as Chair of the Treasury Select Committee between 2010 and 2017 was infused by this very preoccupation. The legitimacy of our financial system being threatened by some, small number of bad apples in finance. And there are places where the same can be true in other household sectors today.

    So, when it came to the decision to appoint a new Chair to the CMA, I knew that Andrew’s combination of passion for the wellbeing of ordinary working people, his rigorous thinking and his ever-effective drive – having experienced it the other side of the Treasure select committee, being subject to grilling’s from Andrew, I can attest to the rigour of that and thought he was the ideal person for the task.

    And I was delighted that he received the unanimous backing of the BEIS select committee.

    Everything that I see coming from the CMA confirms in my view that Andrew was the right choice.

    Under his watch, the CMA has made it very clear that it would concentrate efforts on tackling consumer harms. The pace of change has been remarkable. From unfair administrative charges in care homes to an investigation of the funeral business. From cleaning up the online-ticketing market to hard-to-reverse subscriptions in online games. From excessive pricing in pharmaceuticals to ensuring merger activity does not undermine lively competition in the retail sector.

    These cases and more in the future, together with a welcome emphasis on strong public communication of the essential work that the CMA does, will both solve immediate problems and tell the general public that when it comes to their lives as consumers the CMA has their back.

    For this, I’d also like – as well as thanking Andrew – to commend Andrea Coscelli, the CMA’s Chief Executive whom I also appointed, and to all those in their organisation who have contributed to this excellent work.

    Recognising that competition policy is foundational to our economy and society, the first thing I asked Andrew in his new post was for the CMA’s recommendations on how we should reform the system itself.

    A large number of proposals were put to me in a thoughtful and comprehensive letter that some of you may have seen.

    Let me start by making three points of principle.

    First, the CMA wants its primary duty to be to the welfare of consumers. I have to say that at a philosophical level, I entirely agree.

    Competition should never be seen as an end in itself, except perhaps last Sunday when watching England win the cricket. But normally, it’s as a means to thriving lives on the part of consumers.

    Many of Andrew’s proposals relate to this basic shift in principle and the exact package we opt for will be a very important question to address, and do so urgently.

    Second, the CMA wants the enforcement of consumer law to be as effective as is the enforcement of competition law, and asks for new powers to be shared between itself and the sectoral regulators to make this a reality.

    As I have said already, in our response to the CMA’s loyalty penalty report, I agree with that too.

    This will help not only with the “unfinished business” but will also allow us to shape the new digital markets.

    Third, the CMA is very concerned that the speed of disruption in the economy, from digital markets and big data, means that the current machinery of competition enforcement is too slow.

    It is no good taking a tech company through the courts over many years, when in the meantime another three relevant markets have tipped into a “winner-takes-all” state.

    Again, I have no doubt that this is true in principle.

    This takes me back to what I said earlier about King Alfred’s need to regulate markets after the unification of markets in Wessex and Mercia.

    Cyberspace is a glorious new space for markets, but it is not in the long-term interest of business or consumers for it to become a low-trust environment, quite the reverse.

    Achieving greater speed and flexibility will require some of the solutions put forward by Jason Furman, especially more principles-based ex ante regulation of platforms.

    It will also require the CMA to be able to act more swiftly and robustly ex post where it finds anti-competitive conduct.

    And I agree with the CMA on this. What is needed now is to find a way of speeding up this work while maintaining the UK’s unparalleled reputation for procedural fairness and legal rights.

    Our reputation is enormously valuable in terms of business confidence, and it must always be maintained. And I have asked my department to prepare advice on the options we have on this.

    I would like to emphasise that these issues are urgent. Consumer mistrust in the economy must not be allowed to grow to be higher.

    The positions of platforms become more entrenched and every day we become more aware of some of the exploitative business practices that have become easy to spread.

    The CMA has produced a menu of reform options. The Furman Review has added to them. Our Smart Data Review has committed to some of these and to Furman’s central recommendation – the establishment of a Digital Markets Unit.

    Today, I am adding to this by publishing our strategic steer to the CMA and the Competition Law Review, a piece of analytical work on the technical performance of the competition regime which will provide important research material for the wider changes ahead.

    Now is the time for industry, the legal profession, economists, consumer groups, regulators and civil society to respond to these initiatives and proposals.

    And in this, I also very much think that we need to understand the views of judges and the judiciary since the appeals system is such an important part of enforcement. That will put all elements in place for a new administration to decide how to act on these pressing matters.

    The power of the CMA’s request for tools that can be used at speed arises, of course, from the spectre haunting all markets today; the disruption that can be associated with big platforms, big tech and big data.

    But what exactly is that spectre?

    Many ordinary consumers feel the pinch of loyalty penalties in recently deregulated sectors, and very few consumers think of the offerings from Google, Amazon, Facebook, Apple, Spotify, Uber, Deliveroo, Ocado or Netflix as anything other than a miraculous revolution in terms of ease, quality and price.

    Hands up here who remembers navigating London with an A to Z? Jumping off the page and having to fumble around the index, the pages becoming detached from the binder, often having to pull over, work out where the join in the pages was and how you transfer over – repeat and repeat and arrive usually very arrive late to your destination. If I were to mention the A to Z to my children, they wouldn’t know what I was talking about.

    Transactional ease is off-the-scale in all sorts of markets compared to where we were, even fewer than 20 years ago.

    And yet the CMA and Jason Furman, who led our review of competition between the Tech Giants, are right that the rules need to be considered and may need to change if competition is to perform its magic there too.

    Consumers may not feel the pinch when they click on that link for a cheaper credit card, but the card-issuer who has to recover the £100 that this click cost them on the search engine certainly does and will have to recover the cost from consumers somehow.

    The holiday-maker usually does not see any cost from booking the charming B&B by the seaside through TripAdvisor, but the couple who have to fork out the social media referral fees do have an interest in ensuring that market is competitive.

    Do consumers have effective control over their data and is what is done with it ultimately in their own interest?

    These various, potential harms are only just becoming headline news and we need to make sure that they do not drown out all the good that platforms have brought us and continue to bring us.

    The CMA has just launched a much-needed market study into digital advertising and Professor Furman recommended that we establish a “Digital Markets Unit” that will work to establish and enforce ex ante the principles by which we must shape these markets.

    I trust that the CMA’s analysis will provide some of the knowledge needed to establish the Digital Markets Unit. Some will, no doubt, groan at the suspicion that Government is trying to control cyberspace. There is no scarcity online.

    And that is the reverse of the intention because, it seems to me, that if people are unhappy with how some things are, we should be looking to make sure that level of trust and confidence is maintained. The vision of cyberspace has some connections with American frontier town of the late 19th Century. Cyberspace has followed, in some respects, a similar revolution. It was that very period of expansion and excitement brought with it some of the monopolies that gave rise that the development and the birth of anti-regulation as we know it.

    The power of railroad monopolies in the US led to the birth of anti-trust and sometimes accompanied by populist policies. So we need to make sure that what may have characteristics in digital platforms that could run the risk of sapping innovation, squeezing businesses and raising the prices of goods anticipates some of the problems that may arise. But consumer choice is just a click away, one might think, so what kind of monopoly do the giants really have?

    Here, I would just like to say that one of the best things to have happened in the understanding of markets in the last 10 years, and Martin Cave has written extensively on this, has been the rise of realistic views of how consumers actually behave and not just how they ought to behave.

    In the unfinished business in consumer markets, as well as in the new challenges posed by the oligopolies, and potential oligopolies of cyberspace, we need to guard against an overly-narrow conception of economics that I think has been part of the problem. Something that economics itself, I think, has made great strides in recent days in recognising.

    This is why I have asked, in my steer to the CMA that it makes sure that it update its methodological toolkit, so it’s not just relying on the old economic tools.

    New approaches that use huge, rich datasets, disciplines like behavioural economics, psychology and anthropology all have their part to play in understanding how markets actually work, rather than how regulators have too often hoped they would work.

    The CMA and other future-facing regulators like the FCA, Ofgem and the CAA are embracing these new tools and methodologies. I strongly welcome that and hope to see much more still.

    Let me now turn to competition and productivity.

    There are roughly four ways that changing the conditions of competition affects productivity.

    First there are the direct effects of competition eliminating unearned rents. Prices fall so the real amount each worker can buy with the value created by an hour of work increases. Our energy price cap, for example, means a single person on the minimum wage need work almost two days fewer to pay for their annual energy bill. This is a significant difference to many people in this country.

    What’s more, the people and equipment that were employed in the rent-seeking activity are liberated to do something more productive and that has knock-on effects. Taking unearned rents out of supply chains makes businesses that rely on those inputs more productive. They have more surplus to spread over capital and labour after all inputs have been covered.

    But against all these positive effects there is a potentially trickier relationship between competition and productivity, and specifically, incentives to innovate. Historically, the link between competition and innovation can sometimes be a paradoxical one.

    Patent law is meant to grant inventors temporary monopoly. In that respect, it is an “anti-competition” policy.

    There are good arguments to be had about whether patent today is working as it should, but what is clear is that all of us benefit when innovators are rewarded in this way.

    The Nobel prize-winning economist Bill Nordhaus estimated that innovators capture only about 3% of the value that they create. The rest, 97%, goes to society at large, for free. So, it’s strongly in our interest to back and reward innovation.

    That’s why so many elements of our Industrial Strategy put an emphasis on aligning all the strengths of companies, universities and government agencies.

    Innovation is so valuable that we’re happy to see coordination being delivered through public R&D investment, common Grand Challenges that bring together companies, universities, research institutions and businesses, sector deals to line-up the efforts providing common research centres, common infrastructure and investments in education.

    And traditional merger control needs to consider this delicate balance between competition and coordination. When a big pharma company buys the minnow with a promising molecule for a spectacular sum is it helping to get a valuable product to market or is it taking out potential competition against something it has on its own lab-bench? In the first case, a merger authority should OK the deal. In the second, in my view, it should say no.

    Jason Furman wondered about the same effect within Big Tech. When Facebook bought pre-revenue Instagram and WhatsApp for billions, which of these was it doing?

    If the power of innovation is to be fully realised for the general good, our approach to mergers must now ask these hard and detailed questions.

    I was very pleased to see the CMA doing so in its recent decision just last week to examine Amazon’s investment in Deliveroo.

    I’d like to finish this speech with some reflections on an absolutely foundational input which the CMA and this government have put a great deal of effort into improving, and that is audit. Again, one of the foundations of trust and reputation. Audit is the primary mechanism by which management’s assessment of how a business is doing gets challenged, verified and made public.

    We have reason, it seems to me, to have some concerns to be very concerned about the recent quality of audit, and to believe that this has wide repercussions on the performance of the whole economy.

    There have been the high-profile failures that have made headlines. The BHS pension liability, Carillion, of course, and Patisserie Valerie.

    But that’s not all.

    The Financial Reporting Council, our audit regulator, has just reported that one third of Price Waterhouse Cooper’s audits of FTSE 350 companies failed to meet the standard of “requiring only limited improvement”.

    Grant Thornton did even worse with only 50% of audits passing that threshold.

    Not a single top 4 firm met the FRC’s standard for 90% of audits last year.

    Perhaps, even more troubling from an assessment of the state of competition, the CMA found that, between 2014 and 2017 KPMG, for example, grew its market share while also scoring worst of the Big 4 in audit quality.

    And yet audit is a sector that should be ripe for disruptive innovation. Big data and AI could be transforming the practice.

    Without the pressures of competition, will this technology be produce an even better audit? A succession of independent analyses have drawn attention to a systematic problems. Sir John Kingman in the review that I asked him to perform of the sector, the BEIS select committee in their report, the Financial Reporting Council itself and the CMA in its market study – excellent and dependable audit is a public good, the whole economy benefits from the fact that businesses choose to establish themselves in a jurisdiction in which confidence in audit is secured.

    Capital is better allocated and at lower cost, the better quality information is.

    The wide array of users of company accounts, not just shareholders but customers, suppliers, employees, places and civil society organisations too, can all the better rely on complex chains of interdependence when the quality of audit is good.

    Solving the problem of audit quality can therefore bring great productivity benefits to the whole economy and make the UK an even better place to start and grow a business.

    Competition should be central to that.

    Company boards must have meaningful choice of auditors.

    We cannot run the risk of systemic over-reliance on just a few firms that could reduce further.

    The regulator needs to ensure that quality persists, despite the intrinsic problem of incentives in this market.

    So I am pleased to have two important announcements to be able to make today. First, is to announce the appoint of Sir Jonathan Thompson as the new Chief Executive of the Financial Reporting Council. Many of you will know that he has been the recent head of HMRC, someone with a strong and rigorous record.

    He will have the crucial task of transforming the organisation as it becomes the new and strengthened Audit, Reporting and Governance Authority, ARGA, created as recommended in Sir John Kingman’s review.

    And Second, I am publishing our consultation on the CMA’s, in my view, powerful and compelling package of recommendations.

    I believe that we need to act fast before another audit scandal makes headlines. I don’t believe that we should wait for the review that I have asked Sir Donald Brydon to perform on the purpose of audit. Whatever the answer to that question, the mechanism to reach it will necessarily be delivered through a well-functioning market and a strong regulator.

    But I would like to add this.

    The audit sector should be in no doubt about the need and the resolve to make these reforms.

    Audit quality must improve and we will do everything that’s needed.

    But the audit sector itself could do a great deal, now, voluntarily before any legislative change comes and I strongly urge them to do so.

    It is right, it is good for the economy and it will give the sector much more credibility in helping shape the regime of the future.

    Let me end as I started – with the weekend’s sporting triumphs.

    Here, according to the MCC’s rulebook is how we come to know with confidence that last Sunday’s score was actually the score that the umpires judged, and how cricket does its own version of audit, if you like. I quote:

    “Two scorers shall be appointed to record all runs […] …The scorers shall frequently check… …to ensure that their records agree.

    They shall agree with the umpires… …at least at every interval […]

    The scorers shall accept all instructions and signals… …given to them by the umpires… …and shall immediately acknowledge each separate signal.”

    It is subtle and instructive.

    It is suited to the particulars of the problem being solved.

    Like all rules that evolve to make competition really work, it embodies and distils volumes of collected experience, wisdom and judgement in practice.

    And just as Britain has led the world in codifying the rules of sport, as well as occasionally, and satisfyingly, winning at them, here I must mention for completeness the third of the weekend’s great sporting fixtures and salute the amazing performance of Lewis Hamilton at Silverstone.

    We should have every confidence that we should continue to lead in many ways the similar task, and in which we have long had a world-leading, international reputation of codifying and keeping the most innovative in the world, the rules of market and competition. It’s one of our strongest and proudest exports.

    The CMA, our regulators, government, our Parliament and our people collectively have the knowledge, pragmatism and experience to be winners at the economically crucial, global competition to design the rules of competition.

    Getting this right has a great prize attached, a Fourth Industrial Revolution with new technologies, new markets, new opportunities underpinned by confidence by consumers, by market participants. This is a future marked by prosperity for all, in all parts of the country.

  • Penny Mordaunt – 2019 Statement on Inappropriate Behaviour in the Armed Forces

    Below is the text of the statement made by Penny Mordaunt, the Secretary of State for Defence, in the House of Commons on 15 July 2019.

    In April of this year a report was commissioned to look into inappropriate behaviour in the armed forces. Our armed forces are the pride of our nation, and have a hard-won reputation here, and across the world.

    The report which was undertaken by Air Chief Marshal Mike Wigston, concluded that while the vast majority of military personnel serve with great honour and distinction, some unacceptable behaviour does occur. I am publishing the report today.

    I am accepting the recommendations of the report in full, including creating a defence authority to provide centralised oversight of their implementation. Detailed work on the design of this body and its responsibilities is now under way.

    We are examining the recommendations and ascertaining how we can prevent inappropriate behaviour in the first place, and where it does occur, deal with the perpetrators more effectively. Leadership is key to this approach at all levels of the services from the most senior to the most junior. Everyone has a role to play in setting and maintaining standards. Non-Commissioned Officers in particular are key in holding people to these standards and the values of their service. I am therefore, in addition to the findings of this report, looking to ensure all Non-Commissioned Officers have what they need to address poor behaviour when they see it.

    This will clearly take time, and I see today as the start of this work, not the end.

  • Damian Hinds – 2019 Statement on School Sport and Activity

    Below is the text of the statement made by Damian Hinds, the Secretary of State for Education, in the House of Commons on 15 July 2019.

    A positive experience of sport and physical activity at a young age can build a lifetime habit of participation. It is central to meeting the Government’s ambitions for a world-class education system which promotes character, good physical health and mental wellbeing. We face a significant challenge to increase and maintain activity levels among children and young people, particularly ​given the levels of childhood obesity. Data from Sport England’s Active Lives Children and Young People survey show that a third of children are currently doing less than 30 minutes of physical activity a day, less than half the amount recommended by the Chief Medical Officer.

    The Department for Education, Department for Digital, Culture, Media and Sport, and Department of Health and Social Care are today publishing a joint school sport and activity action plan which will set out the following ambitions:

    All children and young people take part in at least 60 minutes of physical activity every day.

    All children and young people have the opportunity to realise developmental, character- building experiences through sport, competition and active pursuits.

    All sport and physical activity provision for children and young people is designed around building basic skills as well as confidence, enjoyment, knowledge and understanding (known as physical literacy) with a focus on fun and enjoyment, and reaching the least active young people.

    The action plan will set out a number of immediate actions that feed into realising these ambitions, including a strong commitment to joint working between schools and the sport sector. The plan also sets out areas of activity for the future with action to be confirmed in a further updated plan later in the year, following the spending review.

    The immediate actions include a commitment to an additional £2.5 million from the Department for Education in 2019-20 to support schools through further work on teacher training, more help and advice to enable schools to open up their facilities and make links with providers, as well as providing more opportunities for young people to volunteer in sport. The plan also sets out over £4 million of Sport England investment in new after-school clubs, strengthening the school games competition and building girls’ confidence through a programme linked to ‘This Girl Can’.

    The Government are also committing to develop regional pilots to trial new and innovative approaches to getting young people active, jointly funded by Sport England and the Department for Education from 2020. The pilots will involve collaborative working from the school and community sector to offer a co-ordinated sport and physical activity experience for young people.

    We will be working with sporting organisations like the Youth Sport Trust, RFU, England Netball and the Premier League to ensure that sports clubs and programmes can reach even more children, encouraging them to get active by focusing on fun, enjoyment and increasing confidence.

  • Penny Mordaunt – 2019 Statement on the Office for Tackling Injustices

    Below is the text of the statement made by Penny Mordaunt, the Secretary of State for Defence, in the House of Commons on 15 July 2019.

    On Friday 12 July, the Prime Minister announced the creation of the Office for Tackling Injustices. This is a new organisation that will hold the Government and wider society to account for tackling key social injustices.

    Despite the great progress we have made in promoting fair treatment for all in the UK, we know that too many of our citizens are still held back by the injustice of ​unequal treatment on the grounds of their socio-economic background, ethnicity, gender, sexual orientation or disability.

    The Prime Minister has spoken of her determination to tackle these “burning injustices”. But all Governments should work to end the injustices that continue to characterise our country for too many. The Office for Tackling Injustices (OfTI) will focus minds on how to create a fairer country in the decades to come.

    By shining a light on data on injustices and monitoring change, the OfTI will provide evidence-based challenge to future Governments and wider society to tackle disparities in social and economic outcomes. Data is a hard, sometimes uncomfortable fact, but publishing it and communicating it clearly forces Government and others to hold a mirror up to their own performance and challenge themselves to do better.

    The OfTI will have a remit covering social injustices relating to ethnicity, gender, disability, socioeconomic background and LGBT. As well as annually delivering a data-driven report on progress to Parliament, the OfTI will also publish thematic studies into issues relevant to its mandate. It will make use of relevant published data from various public authorities, monitoring trends and considering the underlying causes and drivers for them.

  • Justin Tomlinson – 2019 Statement on Health Related Job Loss

    Below is the text of the statement made by Justin Tomlinson, the Minister for Disabled People, Health and Work in the House of Commons on 15 July 2019.

    I would like to make the following statement on behalf of myself and the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Thurrock (Jackie Doyle-Price).​

    Today, my Department, in partnership with the Department of Health and Social Care, will publish a consultation on proposals to reduce health-related job loss.

    As people live and work for longer, more employees are disabled or have long-term health conditions. There are significant and well evidenced benefits for employers, individuals and Government if health-related job loss can be reduced.

    For employers, offering flexibility, early support and occupational health advice are the key to successful retention. Employers are best placed to take the early preventative measures that are most effective. There are large variations in employers’ capability and capacity to act with large firms five times more likely to provide occupational health when compared to small firms.

    Each year more than 100,000 people leave their job following a period of sickness absence lasting at least four weeks. Survey evidence shows that 44% of people who had been off sick for a year then left employment altogether.​

    The proposals set out in this consultation include:

    Amending the legal framework to encourage workplace modifications and early action to support individuals on sickness absence leave;

    Reforming statutory sick pay so that it is better enforced, more flexible and covers the lowest paid and potentially, rewards effective action with a new rebate;

    Improving access to occupational health services with additional support for small employers including a potential subsidy;

    Government to provide best practice advice and support for employers on managing health and disability in the workplace.

    The evidence and views gathered during this consultation will be used to develop our proposals further and understand the impact of the changes on both employers and employees.

  • David Gauke – 2019 Speech on Sentencing

    Below is the text of the speech made by David Gauke, the Secretary of State for Justice, on 18 July 2019.

    It’s great to be here and can I thank Edelman for providing the venue and Social Market Foundation for hosting and thank you all for coming today.

    Gathered in this room there is a wealth of wisdom, expertise and experience of our justice system. You all share, as I do, a deep commitment and passion for reform to ensure justice in this country is delivered in an effective and fair way.

    I want to thank you for your dedication and for the valuable work you do and the different perspectives you bring.

    In my last major speech on justice reform in February, I spoke about how we need to look beyond prison, move away from short custodial sentences and towards more effective alternatives in the community that better target the causes of offending.

    Since then, we’ve continued to build the evidence base for what works and lay the groundwork for delivering that, for example, with fundamental reform of the probation system.

    Today, as we publish the latest set of research and statistics on reoffending, it seems timely to update you on the work we have been doing and to take stock of where we are and what, I believe, our direction of travel should be.

    Rehabilitation as the best route to reducing reoffending

    There is one stark fact facing us: three quarters of all crime that results in a caution or sentence happens because of reoffending.

    We must be fearless in dealing with this.

    Whilst long prison sentences will always be right for those who commit the most serious crimes, particularly of a violent or sexual nature, the fact is that the vast majority of all offenders will at some point be released. Most people who go to prison are there for a matter of months or weeks. Last year, for example, sentences of 12 months or less accounted for over two thirds of all immediate custodial sentences.

    I believe the public therefore expect the justice system to focus on rehabilitation to reduce the risk of subsequent offending – and the likelihood of them becoming a victim of crime.

    That means prison and serving a sentence is not an end in itself, but it is a means to an end, a means to make society safer. We need to punish for a purpose.

    Only by successfully rehabilitating offenders so they don’t commit a crime when they are released will we prevent more crime and more victims of crime.

    The new evidence

    When I became Justice Secretary in January 2018, I didn’t have a pre-conceived view on short sentences. But I wanted to see and understand the evidence.

    I wanted to know what the real cost of reoffending is to our society. Our new research today has found it is over £18 billion a year.

    I also wanted to know whether short prison sentences are actually the best way to keep us safe and prevent reoffending.

    The latest evidence suggests that if all offenders who currently receive prison sentences of less than six months were given a community order instead, we estimate that there would be around 32,000 fewer proven reoffences a year. That’s an estimated 13% fewer proven reoffences for this cohort.

    That’s not just a statistic, that’s thousands fewer actual victims; and it’s safer streets and safer communities.

    And I’ve wanted to understand why a particular group in society find themselves more likely to be moving in and out of prison again and again.

    Today’s research helps us to see past the offence to the person and the complex needs that contribute to keeping them trapped in a cycle of crime.

    Over two thirds of those in prison for six months or less have a drug misuse problem. 72% lack the skills and motivation to get or hold down a job. 60% do not have a stable or suitable place to live. These are the problems we need to address to have a meaningful impact on reoffending rates.

    But when offenders only serve short custodial sentences of up to six months, the median time spent in prison is just 6 weeks. This just isn’t enough time for any effective rehabilitation to take place to successfully tackle these problems.

    Ultimately, that short spell in prison doesn’t protect the public, doesn’t serve as much of a deterrent and exacerbates those already deep-rooted difficulties the individual faces.

    The research we have published today compared offenders who went to prison against a similar cohort who received a community order. For those with non-custodial sentences, we can do more to address these problems around addiction and housing and reduce the likelihood of reoffending.

    Moving away from short prison sentences

    So this latest research has further reinforced my view that moving away from prison sentences up to six months would deliver real and positive change, for the offenders to turn their lives around and for the safety of the public.

    There are different ways that you might achieve this: a bar to prevent the courts using them, or a less prescriptive presumption against their use. Or you could consider combining these options, applying a presumption to sentences of up to 12 months and with a bar for up to six months. I think there’s a strong case to explore this, given the evidence.

    But for any bar on short sentences, I’ve always said that there should be exceptions.

    Our first responsibility must be to the victims of crime and we should not do anything to compromise their safety. For this reason, I’d argue a bar should not apply to offences of physical or sexual assault, so that in the right cases courts will be able to impose a short prison sentence.

    Another consideration is upholding the authority of the court. There are several offences which involve a disregard for court orders or its authority, where the possibility of a short sentence should, in my view, be retained.

    For those repeat offenders who have been given community orders and who wilfully and persistently fail to comply with them, they need to know that they cannot get away with it with impunity. We must also ensure that we do not do anything that would put at risk the security of the wider public. We will need to consider, therefore, what other offences raise significant issues of public protection where a short prison sentence should continue to be an option. Given the acute problems with knife crime in cities like London, knife possession could be one such offence.

    I believe this is a balanced, considered and, crucially, evidence-based approach to sentencing policy. It will help reduce crime and result, therefore, in fewer victims of crime. And I would hope that the next Prime Minister would continue with this reform agenda.

    Probation reform

    However, crucial to the success of any reform of sentencing is a strong probation system. Two months ago, I announced plans to reform our probation system, which will allow for much more robust community sentences and that will command the confidence of the courts.

    We will be ending Community Rehabilitation Company contracts early and streamlining responsibilities for public, private and voluntary sector partners.

    That means a stronger role for the National Probation Service in managing all offenders, greater voluntary sector involvement in rehabilitation, and the private sector leading where it has specialist expertise and experience and where it can support innovation in rehabilitating offenders and organising Unpaid Work placements.

    A strengthened probation system will significantly improve the services that have been shown to help turn offenders away from crime – be it housing support, help finding a job, or help to turn away from drink or drugs or treat mental health issues.

    This will build confidence that conditions set by the courts are enforced when people leave prison, and that for those who receive community sentences, tough enforcement is paired with targeted support and services that tackle the root causes behind the crime.

    We have seen how partnership working at a local level can offer effective alternatives to custody. I’m keen to work with the judiciary and others in the criminal justice system to learn from, as well as pilot, alternatives to custody to inform our approach nationally.

    At the same time, we are successfully rolling out GPS tagging to better monitor offenders and make sure offenders are adhering to the terms of their sentence or licence conditions. The findings from the pilot we ran found that most offenders felt wearing a tag would help them make positive changes in their lives.

    Building on the success of this we are also planning to roll out a variation of this service for children in the autumn to support children in their efforts to turn their lives around.

    Technology, like GPS tagging, will help to give judges and magistrates more confidence to use community sentences in more cases.

    And I’m ambitious about what we can do in the future – using new technology and thinking innovatively about how we can both punish and rehabilitate in the community.

    Through our probation reforms – and with some bold thinking about what community sentences look like in the future – we will see a successful shift away from ineffective short prison sentences towards more effective ways of rehabilitating offenders.

    I hope that when it comes to a Spending Review in due course that funding effective community sentences is made a priority given the costs it can save down the line.

    Prison reform to rehabilitate

    Finally, I do think it’s important to recognise that prison will always be right for some people.

    So, we need safe, secure and decent prisons. Instigated with huge determination and energy by Rory Stewart, the then Prisons Minister, the Ten Prisons Project, has focussed on improving standards in some of our most challenged prisons, alongside securing extra urgent funding and measures to tackle drugs and violence across the estate and significantly increasing the number of prison officers.

    But we also need to create a real culture of rehabilitation and opportunity in prisons.

    For example, we are funding a pilot that will make befriending services available via in-cell telephony, with the aim of decreasing prisoner isolation, improving mental health and ultimately facilitating rehabilitation, in line with the findings of the Farmer review. We’ve also recently introduced a new approach to incentivising prisoners that helps them to make the right choices to get on the path to rehabilitation.

    And I was proud to launch the Education and Employment Strategy last year putting education, skills and jobs at the heart of prison regimes.

    As well as helping those in prison prepare for work, I have also been keen to remove barriers and tackle prejudice that ex-offenders all too often face in trying to get a job.

    As I announced this week, we intend to legislate so that for the first time, some sentences of more than four years will no longer have to be disclosed to employers after an appropriate period of time has passed.

    These are all important reforms of which I am very proud. They will, respectively and collectively, help make our prisons safer places where rehabilitation can take root and help provide opportunities for ex-offenders – simultaneously enriching our society and making us all safer.

    Conclusion

    The first duty of government is to keep its citizens safe. That includes tackling crime and reducing the number of victims of crime.

    Punishing criminal behaviour is a crucial part of doing that. Whether through prison, community sentences or fines, offenders must face justice. And justice works best when punishment and rehabilitation are balanced and the cycle of crime is broken.

    In doing this, we need to be guided by a clear assessment of the facts rather than saying what we think people want to hear. Today’s further research helps us to do that.

    Let me be clear: I don’t want to see softer justice; I want to deliver smarter justice where offenders serve sentences that punish but also make them less likely to reoffend.

    I believe that the approach that I’ve set out today – indeed the approach I have set out in the last 18 months – is one that is most likely to be effective in reducing reoffending and therefore reducing crime.

    I am aware that it is an approach that will not have universal support but I have taken great encouragement from the widespread support for an evidence-led, rehabilitative and humane agenda.

    It is my hope that in the years ahead – whoever has the privilege of being Justice Secretary – it is an approach that will be pursued with persistence and determination and courage. And that it will help deliver a safer and more civilised society.

  • Penny Mordaunt – 2019 Speech at the Air and Space Power Conference

    Below is the text of the speech made by Penny Mordaunt, the Secretary of State for Defence, at the Air and Space Power Conference on 18 July 2019.

    Firstly, I want to pay tribute to the Chief of the Air Staff and say thank you. When I first met Stephen I was MinAF and he helped shape the ambition that was in the 2015 SDSR.

    He secured that equipment programme but he has always known that it was secondary to investing, developing and looking after our people.

    Sir Stephen, the diversity of the force, the longevity of service, the excellence of the operation are testament to that. You understand the importance of this because you’ve seen just about every side of life there is to the RAF. Your father was in the RAF. You gained your pilot’s licence in the Air Cadets – how important that organisation has proved to be in the lives of so many! He went on to a most distinguished career winning the DFC and being knighted in the process, perhaps all of this made more special by his service at so many lower levels.

    Stephen, I share your priorities, which is why decent pay, an end to lawfare and a focus on forces families have formed much of my two months at the MOD as Secretary of State.

    We need the best people, we need diversity of thought and great leadership, to recognise, attract and retain talent, for personnel to be at their best.

    Training is incredibly important. But the RAF – like all the services – is about something much more – inspirational leadership. This is needed because the demands we make of our people are so great. We challenge them on all four axes – physically, spiritually, intellectually and yes, emotionally.

    You don’t need me to tell you that we live in changed times. It’s not enough that we have technical change, creating capabilities at lightning speed. It’s not enough that we have massive political change. This is as true domestically, as it is geopolitically. It’s not enough that we have massive economic change – with global flows of capital promoting multilateral mergers and acquisitions of our civilian support organisations. It’s no wonder that national governments with their bureaucratised, traditional structures are struggling to cope.

    I can’t stop any of these changes and nor can any of us. What I can say though is that national, governmental and commercial advantage all comes down to one thing – how fast and how adaptable our response is and how we are able to use the great strengths we have as a nation to project power and use our influence to best advantage.

    The challenge of this age is that the threats are complex, multilateral, asymmetric and constantly changing. Even the last SDSR underestimated the speed at which the threats we face today would develop. And that means the task facing our military is growing enormously.

    But the biggest threat to us is not the Russians or Daesh, but potentially, our own political thinking. Throughout history we’ve seen this. We know about the stagnation of the Western Front in World War One. The folly of fixed defences in World War Two. We’ve also seen the change from air-launched, strategic deterrents, to submarine-based ones. And the importance of combined service operations in recovering the Falklands.

    For each generation, the lesson must be learnt. Our forces implement our political thinking on the battlefield. If that thinking is outdated, then their weapons will be, too.

    When we’re not operating “hot” we lose the emphasis on adaption and innovation. We must ensure in “cooler” times we continue to learn and drive towards becoming even more effective and prepared. This applies as much to politics as it does to economics.

    Another threat to our forces is short-term financial thinking. And this is not just in the shortcomings of equipment. Investment in our military is a long-term investment in social mobility, in education, in industry, policing, medicine and international diplomacy. The MOD doesn’t have a KPI of Total Shareholder Returns because it’s balance sheets runs over decades. And Space is a perfect example of this. It underpins everything from the development of the computer chip to the internet.

    We owe our military so much – and not just because of the past. It’s also one of the most exciting places to be for the future. It’s also an investment in the pride our country feels today. To understand this, we need to be situationally fluent. We have to recognise that nationalist politics are returning us to the nation state at the same time as commercial economics are moving us in the opposite direction.

    Capital is becoming ever more international, while politics is becoming ever more local. I make no value judgment of this. I’m signpost, not a weathervane. It’s the supranational regional bodies receding, we’re returning back to the age of national resilience, but international cooperation remains vital. And if we’re to adapt to this new age we need to enhance our strategic thinking.

    We need to remember that while Defence keeps the peace, it, and all the components of our National security, also strengthens our global ties and helps our prosperity. So we must ensure that we assist the decision makers responsible for our national security.

    So much of the work of the intelligence services is reliant on the contributions that defence makes. In the future, I want our offer to be more comprehensive in this respect which is why I’ve recently introduced a new situational awareness briefing at the MODs weekly drumbeat, briefing Defence ministers…on what’s going on in the wider world.

    We need to be aware, not just of aggressive acts, or changes in territory or defence procurement. But in financial flows, mergers and acquisitions, markets, prices, health, human security and the resulting impact on our interests.

    Why? Because We’ve moved beyond hot wars or cold wars to a new age of ‘sombre’ wars conducted in the shadows, on the dark web, in the business world, space and often remote from what we’ve known of the battlefield. This remains invisible to our patrons most of the time. But it is we who operate in this zone on a daily basis who must ironically have the greatest vision for the future. We have also the greatest readiness.

    And part of that readiness requires our partnerships to be deeper and more long-term. So, we must take a new industrial approach to build tomorrow’s military success Earlier in my tenure, I outlined how we need to take our industrial partnership forward, to build on the learnings of carrier alliance, and on our operations. In my sea power speech I touched on Building British, buying British to get better at selling British…

    In my land power speech – I spoke of fusion of conventional capabilities with cyber…But more is needed if we are to be as nimble as we need to be in the future…Our new industrial strategy must recognise that nations who protect their commercial systems make them the ‘go-to’ places for business. Is it any wonder that there is a wholesale exodus of business from jurisdictions where Intellectual Property is routinely stolen?

    We are rightly concerned about protecting our goods in the Straits of Hormuz. But in the future data flows will exceed those of physical goods. How are we going to make sure we will protect those goods and that information? My vision is not just for a country which is at peace and where our people walk free from fear, but for a place where all rights of our citizens can be protected…intellectual property to online identity. Our democracy needs this. And if we are to compete around the world, then global Britain demands this.

    We must change Whitehall, our processes to protect the UK as an area in which to conduct business safely and free from interference. And we must join this up with HMGs wider objectives. We need to have orchestrated centres of excellence eg Where is drone HQ for this government? If we can’t say where, how do we know we’re making the most of the RnD funding, what we are investing – in each service, in each department, company or university? For each sector, I want us to have a clear understanding of how it fits with the UK’s prosperity agenda.

    So, I am looking at setting up a New entity in the Department to look at the spin offs from Research and Development in Defence

    And we should be a leading player in space. It won’t just help strengthen our industries. It’ll also provide an incredible opportunity to capture the imagination of a new generation and encourage them to get involved in aerospace.

    Fifty years on from the moon landings we’re seeing SpaceX and other private sector individuals and leaders coming into the sector and making use of the technology. From satellite launches to more ambitious projects. It’s no longer a matter of if, but when, the first humans will walk on Mars. And this year we might see the first routine tourist flights into space.

    Richard Branson is striving to lead that incredible development. Virgin Orbit has already pilots with astronaut wings. It’s currently undertaking pioneering research into launching small satellites into space from the wing of a Boeing 747.

    And just last week, Virgin Orbit completed a landmark ‘drop test’ of a rocket at 35,000 feet to test the separation of rocket and aircraft during launch. Science fiction is becoming science fact. One day I want to see RAF pilots earning their space wings and flying beyond the stratosphere.

    So today, I can announce we’re making a giant leap in that direction by working towards placing a Test Pilot into the Virgin Orbit programme. Sending a bold signal of Global Britain’s aspiration…and showing that if you join our RAF…you will join a service where you can become an aviator or an astronaut…where you will help push back the frontiers of space and create a launch pad to the stars.

    As discussed earlier, the successful military powers of the future are going to be the ones that most easily and quickly assimilate change to their advantage.

    Seven years ago, following Lord Levene’s review, we established Joint Forces Command. We understood that Defence needed a joint organisation to do the things the services individually could not. We realised too, we needed to strengthen the link between experience in operational theatres and top-level, decision-making.

    Since then, JFC has done an incredible job bringing together joint capabilities like medical services, training, intelligence, information systems and cyber operations. It’s work has stood the test of time. But our future Joint Organisation must step up to some new challenges…taking on greater responsibility as we adjust to the demands of the future contested environment.

    Today we’re seeing state and non-state actors alike operating in that ‘sombre’ zone below the threshold of war…unconstrained by previously accepted norms…using all tools in their armoury…and weaponising information… to catch us off guard to destabilise our societies and our support systems. If we’re to respond, we must have strategic integration across the five war fighting domains – land, air, sea, space and cyber.

    That’s why today I can announce that we’re transforming JFC into Strategic Command. Much more than just a name change…this will be a bespoke organisation…supporting Head Office…helping Defence think strategically…assisting our transformation programme…and taking responsibility for a range of strategic and defence-wide capabilities. Combined with its oversight of our global footprint, it will continue enabling our operations and providing critical advice on force development.

    I’ve spoken about the contested environment. And the threats that are intensifying across all domains. And in space, too.

    When Neil Armstrong and Buzz Aldrin first set foot on the moon some fifty years ago, operations in space seemed otherworldly. Yet today our Armed Forces depend upon space to provide them global communications, critical intelligence, surveillance and navigation tools, while satellites underpin our national banking, transport and communication networks. And our competitors are doing all they can to disrupt access to these services.

    China has tested hit-to-kill interceptor missiles increasing deadly debris and threatening every sovereign space enterprise. Russia is conducting sophisticated on-orbit activities…developing missile interceptors to threaten satellites and electronic warfare systems to jam satellite signals. And non-state actors and cyber hackers have the potential to scramble satellite data and manipulate earth observation data to gain advantage.

    The UK must be ready to face these dangers. And Defence must play its part. We can, and we will. But we know we cannot compete in this contested and dangerous world alone.

    This government has consistently said we must work more with our international partners. This will bring our unique skills in the UK and experience into closer alliances to multiply the effects we can have.

    That’s also why today I can announce we have become the first international partner in the US-led Operation Olympic Defender. This will be an international coalition formed to strengthen deterrence against hostile actors in space and prevent the spread of space debris in orbit. In the next 18 months, the UK will be sending eight people to the Combined Space Operations Center in California to support this operation.

    But space is not just fraught with incredible dangers, it’s also a domain of incredible opportunity that we must seize with both hands. So today I’m also announcing we’re investing £30m to launch a small satellite constellation within a year. These small, low orbiting satellites can be sent into space more cost-effectively than their predecessors and can be fixed or replaced more quickly. The programme will eventually see live high resolution video beamed directly into the cockpit of our aircraft providing pilots with unprecedented levels of battle awareness.

    To support this state-of-the-art system, the RAF has founded Team ARTEMIS, a transatlantic team of UK and US defence personnel to launch the constellation and undertake research into the wider military uses of small satellites. Given the vastness of the challenge, this might seem a relatively small-scale initiative. But effectively we’re planting the acorns from which the future oaks will grow. Critically, British industry is already a world-leader in these innovative technologies.

    Last year we invested £4.5 million in the Carbonite 2 spacecraft which has already sent detailed imagery and footage back to Earth from orbit. One UK company alone based in Surrey is making 40% of the world’s small satellites. So this is a bold statement by the MOD. Showing our determination to invest in our Global Britain, taking military capability further and faster and demonstrating our ambitions are not limited to the skies.

    So, the modern security environment is contested, congested, competitive and entangled. But the UK is changing. And defence is changing too. And, alongside our investment in space, we’re investing in air in a big way. Bringing more F-35s online and into the fight.

    But just as we’re not naïve about today’s threats, nor are we complacent about what’s to come. That’s why we are ahead of the pack in developing a new capability…the Tempest…that will take to the skies within the next two decades.

    Our Typhoons and F-35s will deter our enemies today. The Tempest will make them doubt their future. But, every part of the Defence machine, needs to keep pace with the modern world if we’re to keep deterring tomorrow’s dangers.

    Upgrading our Typhoons and arming them with Storm Shadow cruise missiles, Meteor air-to-air missiles and the Brimstone precision strike weapon is also part of this.

    I won’t go exhaustively through the complete inventory…it would take too long to list…but it’s worth touching on just some of the capabilities coming on stream.

    Poseidon Maritime Patrol aircraft…able to patrol thousands of miles of the North Atlantic without rest while bringing hundreds of jobs to that region.

    Our five E-7s…replacing our current E-3D Sentry…giving us the finest airborne early warning systems around. And within a year, swarming drones able to confuse and overwhelm enemy air defences.

    In other words, in the face of growing threats, we will continue to take the bold action that’s necessary. Investing now to stay ahead of the pace of technological acceleration – strengthening our strategic command of the battle space. Reinforcing our commitment to the space arena…and laying the foundations for our future industry…And by joining together with our allies to defend our sovereign interests – whether in the skies or in the upper atmosphere – making sure that…come what may…Britain will be ready to face the future confident of our success.

    So we need strategic thinking. We need true situational awareness. We need new strategic partnerships and a new industrial strategy. All fused by a new Strategic Command to deploy new capabilities.

    And we should remember that all our military personnel fight with weapon systems, but also the civilian structures, organisations and infrastructure we give them. All of this – all of it – is the product of a previous generation’s political thinking. So it’s not just helpful if the thinking is clear, joined-up and far-sighted. Young lives are depending on it, so the thinking better be more than good. It better be bloody brilliant.