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Category: Speeches

  • Michael Howard – 2002 Speech at British Chambers of Commerce

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    Below is the text of the speech made by Michael Howard, the then Shadow Chancellor of the Exchequer, to the British Chambers of Commerce conference on 23rd April 2002.

    Introduction 

    I am very grateful for your invitation to address you today. You timed this Conference well, to come so soon after the Budget – the date of which you obviously knew before everyone else. I am already getting ready to clear my diary for the time of next year’s Conference.

    But this timing has enabled the Conference to concentrate on the main themes of the Budget.

    Today I want to focus on what the Budget showed about this Government’s approach to enterprise, and on the approach the Conservative Party is taking to economic policy.

    Conservative Approach to Economic Policy

    We believe that business should be freed to do what it does best: win orders and create jobs.

    Governments should set in place the conditions which enable it to do so. In part those conditions involve stability. And that means that, in areas of policy where there is room for consensus between the parties, this should be welcomed.

    Sometimes it comes as a surprise to hear a politician say that. It shouldn’t. Politicians should not seek to differ from each other for the sake of difference, criticise for the sake of criticism and adopt different policies in order to be seen to be adopting different policies.

    That is just common sense. Business works in an environment which is uncertain enough as it is. Elected representatives should act as forces for stability, not for further instability. Governments come and go. The last thing you want to see is each new administration arriving with its own ideas and plans, determined to uproot everything that has gone before, and completely oblivious to the lessons learnt by its predecessor.

    So in recent weeks I have pointed to important areas where there is consensus between the parties. One such area is monetary policy – the framework which has been established for setting interest rates and controlling inflation. To the extent that both main parties now recognise the evil of inflation for what it is, and both support the same policy framework for dealing with it, this is a very welcome development.

    Of course the one – rather large – fly in this ointment is the single currency. I do not intend to say any more about this issue today than this: it is perhaps the supreme irony that at the very moment when we reach inter-party consensus on the framework for monetary policy the Conservative Party is the only Party in favour of maintaining that framework. Joining the single currency would mean giving up a successful system in which interest rates are set in Britain on the basis of what is best for Britain for one in which the European Central Bank does its best to set a single rate for the whole of the Eurozone. It’s difficult enough for the Bank of England to get it right for us. It would be virtually impossible for the ECB to achieve this.

    But that argument is for another day. As things stand, we have consensus on monetary policy.

    On fiscal policy, however – the Government’s framework for taxing and spending – the room for consensus is not quite so great.

    I believe that the two fiscal rules which the Government has established have an important role to play in guiding fiscal policy. But I have called for the rules to be buttressed by greater scrutiny and accountability; for a greater focus on the outcome of spending – rather than just the amount which is spent; and for the Government to live up to the principles which it has itself set out for fiscal policy – namely transparency, stability, responsibility, fairness and efficiency.

    It is my belief that the endless series of changes introduced into the tax system in the last few years have taken it far from these worthy principles.

    One of the most serious criticisms that can be levelled against the Chancellor is the increasing complexity of the tax system. The Institute of Chartered Accountants, for example, has said that the tax system has ‘spun out of democratic control’ because of complexity, the number of anomalies and the ‘culture of never-ending change.’

    When even tax accountants criticise the complexity of the tax system, something is going seriously wrong.

    And it is often employers who have to bear the brunt of such complexity and never-ending change. In the case of the Government’s various tax credits, for example, it has often been employers who have faced the task of administering them. And as my colleague David Willetts points out, in terms of credits for families alone, within the space of four years, from 1999 to 2003, the Government will have: abolished Family Credit; introduced the Working Families’ Tax Credit; introduced the Disabled Person’s Tax Credit; introduced a Childcare Tax Credit; introduced an Employment Credit; abolished the Married Couple’s Allowance; introduced the Children’s Tax Credit; introduced a baby tax credit; abolished the Working Families’ Tax Credit; abolished the Disabled Person’s Tax Credit; abolished the Children’s Tax Credit; abolished the baby tax credit; introduced a Child Tax Credit; abolished the Employment Credit; introduced a Working Tax Credit.

    So, since October 1999, the Government will have introduced five new tax credits for families, scrapped four of them and then introduced two new ones which come into force in April 2003. That averages out as a new tax credit for families every six months.

    A Government which is truly committed to creating the conditions for enterprise to flourish would put an end to such destabilising change.

    Budget and Enterprise

    I am afraid, however, that last week’s Budget cast serious doubt over whether we have such a Government at present.

    I find it difficult to recall any previous Budget which aroused such a degree of hostility from the business community in this country.

    I think there are several reasons for that.

    First, the business tax rises we saw in that Budget were in direct contradiction to repeated ministerial statements on the issue.

    Second, the timing of the rises is appalling. They come at a time when manufacturers are struggling to emerge from recession. And, as the BCC pointed out in its Budget submission, at a time when OECD figures show that business taxation is already higher here than in some of our key competitors. In fact recent figures show that, of our top five trade partners, only France has a larger burden of business taxation. The Chambers estimate that business taxation has risen by £29 billion over the last 5 years.

    And third, there is the sheer scale of the increases. They dwarf those other measures in the Budget for which businesses have been calling and which they have welcomed – such as the assistance with research and development.

    In fact, quite apart from and in addition to the £4 billion increase in NICs, the Institute for Fiscal Studies has estimated the net cost to business of the Budget at £1.1 billion, even after the positive measures for business have been taken into account.

    The consequences for enterprise and employment will be very serious.

    The rise in NICs for employers is a direct tax on jobs. The Government has now created an additional incentive for firms to hire as few staff as possible – and for larger firms to shift employment abroad. As a succession of business organisations have pointed out, it directly contradicts everything ministers have said about the importance of job creation and full employment.

    It is of no use to business if the Chancellor spends most of his Budget speech talking about enterprise – a word he mentioned a dozen times – when the remainder is spent outlining measures which will do more to stifle enterprise and job creation than virtually anything else he has done.

    And it is not as though these tax increases are likely to lead to the improvement in public services we all want to see, for the reasons Iain gave when he addressed you yesterday.

    Furthermore, the Government has now admitted that public sector employers will themselves have to pay an additional £1.2 billion as a result of the NIC rise. This just goes to show the sheer absurdity of the Government’s position. First they refuse to change and reform the public services, so we will not see the improvements that we all want. Next they increase employee contribution rates for many of the very public sector workers that we are relying on to try to improve these services. Finally they hit the services themselves with a £1.2 billion tax bill, in the name of raising more resources for those very same services.

    Red Tape and Regulation

    If those tax increases are of concern to business, the final issue I want to address this morning is, I think, of just as much concern.

    Just before the Budget, the London Chamber of Commerce asked a particularly interesting question as part of its regular survey of business. It asked whether the Government had kept its promise, made in 1997, to cut unnecessary red tape.

    97 per cent of businesses surveyed said it had not.

    I referred earlier to consensus. I think it is fair to conclude that a consensus exists amongst business on this issue. And I doubt somehow that this consensus is confined to business in London.

    Indeed, after looking at the Red Tape Audit which the BCC published last month, I know it’s not.

    It is not hard to see why. The latest figures from the House of Commons Library show that 4,642 regulations of all types were introduced in 2001. Not only is that a record. It is an increase of nearly 50 per cent on the number introduced in 1997.

    I defy anyone to defend that number, to claim that introducing 4,642 regulations in one year is justified. Even if a bureaucrat can find a valid reason for each additional piece of regulation, the presumption should be against it. For the cumulative total – however innocuous each one of the 4,642 regulations is – can have a devastating effect on business.

    In fact the Chambers estimate that complying with all the different demands placed on business from regulation has cost business £15.6 billion since 1997. Other estimates have put the figure even higher.

    This, too, is having a direct impact on job creation. To quote one BCC member from Bristol: `Instead of getting myself bogged down with regulations I just don’t employ staff’.

    And to quote the BCC itself, in last year’s submission to the Chancellor: ‘The bottom line is that the sheer quantity of red tape on business is damaging our economy, stifling enterprise, job creation and economic growth’.

    Conservatives too were less responsive to these concerns, and less effective in deregulating, than we should have been. But what became clear to us then is that the desire to over-regulate seems to be embedded in the bricks and mortar of Whitehall. It is clear that only a serious and systematic approach to tackling it stands any chance of keeping it at bay. At least towards the end of our time in office, I believe we were taking this approach.

    It hasn’t been taken since then.

    The BCC is to be applauded for its efforts to encourage the Government to tackle the problem – through your Red Tape Audit, Burdens Barometer, and Think Tank on regulation. I wish you every success in doing so.

    Conclusion

    I hope I have indicated some of the issues which are at the forefront of our minds as we establish our approach to economic policy at this early stage in the Parliament.

    In contrast there has been a worrying trend in Government policy. Ministers seem to display a distinct lack of understanding of how the enterprise economy works, and the effect their actions will have on business and those who work and invest in it. They should not think on taxation that they can treat the private sector as a giant milch cow, from which they can extract, painlessly, endless amounts of revenue without it affecting investment, employment or pay levels. They should not think on red tape that they can impose new initiatives or schemes or regulations without it affecting the ability of business to expand or in some cases even to stay afloat. And they should not think, as in the case of Railtrack, that they can ride roughshod over the interests of investors without it affecting their willingness to invest in government projects in future.

    Any government must understand the importance of the daily decisions taken by thousands of businesses and millions of citizens.

    Politicians should not divert the attention of business from the vital task I mentioned earlier: winning orders and creating jobs.

    As everyone here will recognise, the pace of change has never been faster than it is today. The prizes go to those who respond quickly and flexibly.

    So politicians should engender a climate of economic stability, and should not seek to introduce change for changes sake.

    They should keep the burdens of taxation and red tape to a minimum.

    Instead of being in the way, they should often get out of the way.

    Crucially, which firm wins the order and creates the jobs is decided at the margin. It is at the margin that the extra tax or new regulation can determine whether a company takes on an extra worker or lays one off – and, ultimately, whether that company succeeds or fails.

    That is a lesson which politicians forget all too easily. But it is a lesson which the Conservative Party is determined to remember.

    And if we are ever in danger of forgetting it, I know that the British Chambers of Commerce will keep us up to the mark. I welcome that, and I wish you and your members well. Both you and we have work to do.

  • Michael Howard – 2002 Speech at Conservative Spring Forum

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    Below is the text of the speech made by Michael Howard, the then Shadow Chancellor of the Exchequer, at the Conservative Spring Forum on 24th March 2002.

    Before I begin may I just say a few words about Lady Thatcher. The Chairman paid tribute to her yesterday and I don’t want to repeat what he said. We are all devastated by Friday’s news. I was privileged to serve in Margaret Thatcher’s cabinet. I want to say one thing about her great record as Prime Minister. Her reforms were not introduced to protect the privileged.

    The sale of council houses brought home ownership within the reach of people who had only dreamed of it before. The reform of the trade unions helped free every worker from the tyranny of un-elected union bosses.

    With these, and with so many more of the changes she made the result, to borrow a phrase, was to benefit the many, not the few. It is very important that that is not forgotten.

    Lady Thatcher is not with us today but may I say how delighted I am to see all of you here. Throughout this conference we have been talking about how to make people’s lives better. I am not sure that I am setting a very good example by asking you all to come and hear me make a speech on a Sunday morning! But after last night’s escapade we both have an excuse if you fall asleep.

    But our public services are of vital importance, whether we talk about them on a Sunday or indeed any other day of the week.

    And let’s remember those public service workers who are at work this morning and every Sunday morning – in our hospitals, policing our streets, coming to deal with fires or reports of fires in the early hours and doing all the other things we ask them to do on our behalf.

    Their role is crucial to my role as Shadow Chancellor.

    Much of the time, I am expected to talk about the economy. And by definition, a great deal of economic debate seems somewhat abstract and remote from the real world.

    But we all know and understand one essential truth. The economy lies at the very heart of the success of our public services. And vice versa. A strong economy delivers the resources necessary to deliver good public services. But at the same time, weak public services can do serious damage to the economy.

    Hospital waiting lists mean your colleagues are off work much longer than they should be.

    Thousands are made late for work every day by delayed trains.

    Poor schools mean that many school leavers can’t get work because they lack basic skills.

    Of course deteriorating public services affect the economy – because they affect all of us, those who work in them and those who use them and those who rely on others who use them.

    The public services are the beating heart of Britain, and we must improve them.

    Labour’s Broken Promises

    When Iain became leader, and asked me to be his Shadow Chancellor, we both agreed that we would not indulge in opposition for opposition’s sake. We would give credit to the Government where it was due. Indeed only a few days ago I congratulated Gordon Brown on making the Bank of England independent.

    But I can’t find it in my heart to congratulate the Government on the state of the public services in Britain today. I would like to. The country would be better off if I could. And after all, Labour put the public services at the heart of their 1997 election campaign.

    And what an opportunity they had – a huge majority, a strong economy, an appetite for reform. And let’s face it, at that time, the trust of the nation. It was a golden opportunity and they blew it.

    Look back at the promises they made. Things can only get better they said. Twenty-four hours to save the NHS, they said. Well, they have had almost 43,000 hours to save the NHS, and it is still on the waiting list!

    Every year they make these promises, and every year they break them. Can you believe a Government that had its Year of Delivery in 1999? Or a Government that entered its 2001 election campaign promising to put Schools and Hospitals First? What on earth were they doing in the previous four years?

    Now we are told that taxes will have to go up in next month’s Budget to pay for the NHS. But why should we be surprised? Every year Labour has promised better public services in return for higher taxes. But every year they just deliver the higher taxes – forty five of them to date. From industry to individuals, from petrol to pensions.

    You name it, they’ve taxed it.

    This Labour Government is now taking nearly £100 billion more from the taxpayer every year than we took in 1997 – £35 every week for every man, woman and child in this country.

    And the services just get worse.

    I don’t need to spell it out.

    We all know that since Labour renationalised the railways, train delays are up by a third.

    We all know that teachers are leaving in droves. Thousands of trained teachers have quit even before they have started teaching.

    We all know that Labour haven’t met their 1997 pledge to reduce waiting lists. As it happens some of my constituents are luckier than most, they can go to France to get the operations they need. But what a reflection on the state of the NHS that people have to be sent abroad for treatment they want and should receive at home in this country.

    The Need for Reform

    None of this is the fault of the people who teach in our schools, work in our hospitals and try to keep our streets safe, the people to whom I paid tribute five minutes ago.

    Part of the blame lies with the Government’s sheer incompetence – for example the £3 billion allocated to key public services last year which simply wasn’t spent.

    But the biggest problem is that instead of working in a system that helps them work effectively, they work in a system that stops them working effectively.

    And if, even after Labour’s record of failure, anyone still thinks that more taxpayers’ money alone is the answer, they should just look at Scotland. There, spending on the NHS per head of the population is more than a fifth higher than it is in England. And total spending on health in Scotland is already higher – much higher – than the target the Government has set for the UK as a whole.

    And the result? In Scotland, waiting times are rising. In fact in the last three years, the average wait for an outpatient appointment has increased by 10 days. And a third more people die of heart disease and 40 per cent more people die of lung disease than in England.

    That is not the sort of record I want to see – in Scotland, in England, or anywhere.

    There must be a better way. And it’s up to us to provide it.

    Lessons from Abroad

    Last week Gordon Brown said there were no lessons to be learned from abroad. There’s nothing, he said, that other countries can teach us about healthcare.

    Try saying that to people like my 83-year old constituent who was told he’d have to wait 83 weeks for an appointment with a neurologist. Try saying that to the 250,000 people who have had to pay for their operations out of their own pockets because they can’t get them on the NHS.

    How can he say that when we know they do things better elsewhere?

    Gordon Brown has a closed mind. You remember what Henry Ford said about the Model T – you can have any colour you want so long as it’s black. Well, the Chancellor is the Henry Ford of the health service. You can have any policy you want so long as it’s Brown’s!

    There is one promise we can make now to the British people. We will approach these questions with an open mind.

    Where there are lessons to be learned we shall learn them.

    Where there are improvements which can be made we shall make them.

    If there is an alternative that is better we shall pursue it.

    We shall do all we can to provide this country with world class healthcare, world class transport, world class education, and world class standards of law and order. Nothing else will do.

    Challenges to Conservatives

    That means two things.

    First, we must be prepared to reform. Labour promised reform. In fact Gordon Brown said last year: `There will not be one penny more until we get changes to let us make reforms and carry out the modernisation the health service needs’. But he hasn’t delivered reform and we haven’t seen the modernisation.

    We shall deliver them both through more local management, through more choice, through greater diversity of provision.

    And the second lesson is even more important: for Conservatives, reforming and improving our public services must be our priority.

    Now, I know that many people in this country have struggled to pay the extra taxes which Labour have imposed since 1997. And I have always believed that low tax economies are more successful economies.

    But there are times when priorities must lie elsewhere.

    Today, Madame Chairman, is such a time. Our public services have now reached the point of crisis. At a time when the Government has failed patients, passengers and parents alike, reforming and improving these services must be our overriding priority.

    Of course that does not stop us being critical of further tax rises. Taxes have already risen. But without reform, the money is not delivering the improvements in services we all want to see. Labour’s tax rises just aren’t working. More of the same won’t work any better.

    The Conservative approach is different. We will decide what needs to be done to improve the public services, what reforms are needed, what resources these require, and how this should best be financed.

    Then – and only then – will we decide our approach to spending on our public services. So don’t believe any claims from Tony Blair about so-called Tory plans. Our plans are still being worked on. Until they have been announced whatever Tony Blair says about them should not be entered in Hansard. It should be entered for the Booker prize for fiction.

    Conclusion

    Madam Chairman. This Government has been in power for almost five years. Does anyone believe things have got better? And does anyone doubt the reasons why?

    Spin doctors won’t move sick relatives up the waiting list. Focus groups won’t make the trains run on time. Soundbites won’t give people’s children a decent education. When it comes to people’s needs today, New Labour simply have nothing to offer.

    Conservatives must offer something different.

    Of course, we are not pretending that is going to be easy.

    We must examine our priorities.

    We must change the way we go about things.

    We must challenge our thinking.

    But if we have the courage to propose real, practical ways to make our public services better, the prizes will be great.

    We will be able to achieve what Labour promised to achieve. What Labour were elected to achieve. And what Labour have failed to achieve:

    – Health care that is truly the envy of the world.

    – Transport systems that are truly world class.

    – Schools that truly extend opportunity wider than ever before.

    – Safety for the people of our country in their homes and on their streets.

    We must show how we will make people’s lives better. On that we should be judged. And on that we must – and we shall – deliver.

  • Michael Howard – 1983 Maiden Speech in the House of Commons

    The Leader of the Conservative Party Michael Howard, delivers his speech to the Conservative Party Conference, Bournemouth.

    Below is the text of the maiden speech made by Michael Howard in the House of Commons on 29th June 1983.

    I begin, Mr. Deputy Speaker, by echoing the remarks of my hon. Friend the Member for Bolton, West (Mr. Sackville) and of the hon. Member for Birmingham, Ladywood (Ms Short) for being permitted to make my maiden speech today. I am particularly pleased to have caught your eye at such a relatively early stage in the Parliament because it enables me to pay an early public tribute to my predecessor, Sir Albert Costain. He is a much loved man both in the constituency and, as I have discovered during the past fortnight, in this House. He is not a man who seeks the limelight but he has rendered sterling service both to his constituents and to the House. More than 22 years ago he first became a member of the Public Accounts Committee and, I believe, the length of his service since then is without equal in the history of that Committee. During a much shorter period when I was a prospective parliamentary candidate, he was unstinting in his kindness to me. That was somewhat remarkable as he had some cause to be disenchanted with those who, like me, enter the House as practising banisters. On one occasion he was waiting to catch Mr. Speaker’s eye but felt constrained to visit the room which was referred to with such affection by Mr. Speaker in his acceptance speech. Before he left the Chamber, Sir Albert entrusted his notes for safekeeping to one of his hon. and learned Friends. When he returned to the Chamber, he was somewhat dismayed to find that hon. and learned Gentleman addressing the House in a most accomplished manner with Sir Albert’s notes in his hand and Sir Albert’s words on his tongue.

    My constituency of Folkestone and Hythe is a richly varied area, containing some 20 miles of coastline, Romney marsh, a most beautiful stretch of the north downs and the two towns that give it its name. Its economic activities are similarly varied. Communications to the continent of Europe are excellent and communications with the rest of England will also be excellent when the missing link of the M20 motorway between Maidstone and Ashford is completed. I am grateful to my right hon. Friend the Member for Guildford (Mr. Howell) for reinstating that project in the road programme when he was Secretary of State for Transport. His successor will hear a good deal from me about the priority to be given to it and the date on which we may expect completion.

    I cannot pass from my constituency without reminding the House that it includes, in Hythe and Romney, two of the original Cinque ports which answered the summons issued by Simon de Montfort in the name of King Henry III to send representatives to what is usually regarded as our first Parliament in 1265. They have valued the closeness of their links with their Members of Parliament over the centuries since then and the loosening of those links which would be a consequence of the proposals for electoral reform presently being put about would be something I should greatly deplore. When one considers not just the proposals for electoral reform but also those for regional government espoused by the alliance parties and the sympathy with the creation of a federal European state expressed by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), it is not always appreciated how much the total package of alliance proposals would emasculate the powers of this House. I hope to retain for many years the trust of the people of the Folkestone and Hythe constituency who have sent me here, and I hope to continue to serve their interests in a House of Commons that has not been shorn of its powers.

    I understand that there is still a view that a maiden speech should keep its distance from controversy. Although as a practising barrister of nearly 20 years’ standing I cannot pretend to be a stranger to controversy, I shall do what I can to honour that tradition in the hope that the two brief points that I wish to make will command such widespread assent that no question of controversy can arise.

    In the recent election, it was widely recognised, not only by Conservatives, that strikes and industrial action contribute to the problem of unemployment. Increasing recognition of that in recent years has been reflected in the increasing reluctance of workers to take industrial action. My right hon. Friend the Chancellor referred earlier to the importance of the reform of trade union law, especially as it affects the rights of individual members of trade unions. There is one critical area — critical for the personal freedom of individual workers as well as for the link between strikes and unemployment—in which in my view the legislative support given to the individual is inadequate. I refer to the position of the worker who refuses to join a strike, who may be excluded from his trade union as a consequence and who in a closed shop may lose his job for that reason. It may surprise some of my hon. Friends to know that, despite all the legislation of the last Parliament, it is still possible for that fate to befall a worker and for that worker to be denied any of the compensation or other remedies generally available at law for a worker who is unfairly dismissed.

    The Government have not been wholly insensitive to this issue. In some circumstances, set out in the code of practice on closed shop agreements and arrangements which in its revised form came into operation last month, it is likely that compensation will be payable. In my view, however, that is by no means good enough, for two reasons.

    First, as a matter of basic individual freedom a worker should be entitled to know without qualification that he cannot be sacked for refusing to strike without being entitled to all the remedies for unfair dismissal provided by our law. That protection is rightly conferred on the worker who is sacked because he is or proposes to become a member of a trade union. The worker who is sacked for refusing to strike is surely entitled to the same protection.

    Secondly, in the real world it is stretching credulity beyond breaking point to suppose that a worker faced with an extremely difficult decision and subject to considerable pressure will sit down and go through the code of practice line by line to determine whether the circumstances set out in it correspond with those of the strike in which he is involved. The full absurdity of the situation becomes apparent when one appreciates that the definition of the circumstances set out itself involves very difficult questions of law and a consideration of the meaning of statutory provisions recently described by Lord Diplock, sitting in a judicial capacity in another place, as most regrettably lacking in the requisite degree of clarity. That brings me to my final point, which has far wider application than the law relating to employment. When the same case was before the Court of Appeal, the Master of the Rolls made a plea to Parliament which we should do well to heed. He said: My plea is that Parliament when legislating in respect of circumstances which directly affect the ‘man or woman in the street’ or the ‘man or woman on the shop floor’ should give as high a priority to clarity and simplicity of expression as to refinements of policy. He continued: When formulating policy, Ministers, of whatever political persuasion, should at all times be asking themselves and asking parliamentary counsel ‘Is this concept too refined to be capable of expression in basic English? If so is there some way in which we can modify the policy so that it can be so expressed?’ Having to ask such questions would no doubt be frustrating for ministers and the legislature generally, but in my judgment this is part of the price which has to be paid if the rule of law is to be maintained. I do not believe that the refinement of policy which gave rise to the inclusion of some circumstances and the exclusion of others from the code of practice on the closed shop can be justified. Even if it could, I believe that the questions posed by the Master of the Rolls should have been asked. Had they been asked, I believe that the answer would have been to abandon that refinement of policy.

    In the first maiden speech of this debate, my hon. Friend the Member for Derbyshire, South (Mrs. Currie) asked for greater simplicity in the law as it affects the right to buy council houses. I endorse that plea, but the area that she identified is not the only one that calls out for such treatment. For the reasons that I have given, lack of clarity in employment law can cause injustice and can damage the economy. I hope that my right hon. Friend the Secretary of State for Employment will introduce measures to alleviate that injustice in the near future and that my other right hon. Friends who bring forward legislation will pay full attention to the plea made by the Master of the Rolls. Many of us on the Conservative Back Benches intend to encourage them to do so in the months and, I hope, years ahead.

  • Gerald Howarth – 2012 Speech on Greener Defence

    Below is the text of the speech made by Gerald Howarth at the Nordic Defence Industry Seminar in Copenhagen on 2nd May 2012.

    Good morning. And thank you Kristian, (Danish MOD Deputy Permanent Secretary for International Policy) for that kind introduction.

    It’s a great honour to be asked to address NORDEFCO.

    Effective defence calls for effective collaboration.

    This group is a good model for us all when it comes to practical hands on commitment and delivery.

    You are also very much on the front foot when it comes to pursuing a new and radical approach to achieving a Smarter and Greener Defence.

    I’ll be talking a little later about these two issues which, focusing as they do on the crucial issue of resources, are essentially both sides of the same coin.

    I hope I speak on behalf of the others when I say it is a particular privilege that you have also invited to this seminar colleagues from the wider Northern Group..

    A group which encompasses the Baltic nations, Germany, Poland, the Netherlands. And of course the UK.

    I think it’s fair to say that previous British Governments have not placed the same value on building relations with our fellow Northern European nations as we do.

    As Minister with the lead for defence diplomacy, I’m very clear that the nations of Northern Europe comprise a group of countries bound together with a shared history and shared values.

    In NORDEFCO you have, of course, recognised that for many years. It’s just the rest of us who have taken a little longer to wake up to the issue. Perhaps we in Britain took too long to recover from the Vikings, the only people successfully to have invaded the UK in 1,000 years!

    I’d like to take this opportunity to pay tribute to Norway, and the work they are doing around the clock to guard NATO’s North Eastern flank.

    While in Norway earlier this year at the invitation of the Norwegian MOD State Secretary, Roger Ingebrigtsen, I had the privilege personally to take the controls of a the P3 Orion and fly over the Polar ice cap. It gave me a very real appreciation of the sheer scale indeed, loneliness, of this challenge.

    This is an area which is going to become increasingly important, as the Northern Sea Route – which almost halves the transit time between Europe and the Far East – is likely to be open for several months of the year within the next 10 years. Within that time the retreat of the ice will mean the opening of energy supplies and passage of shipping which is potentially game changing.

    Norway’s work in safeguarding these routes is of vital strategic importance to us all – and it’s important we begin to think ahead about the challenges presented by climate change.

    The Northern Group provides such an opportunity to bring us together to discuss issues of relevance to our mutual security, without reference to any particular institutional framework.

    It’s very obvious to me that we as neighbours should work together to secure our own region, to keep our trade routes open, and together face threats as they arise.

    Coming here to Copenhagen is – for me – therefore very much a neighbourhood visit. And a wonderful opportunity to get together with like-minded friends and partners.

    Like minded friends and partners who, in common with the UK, are outward facing, aware that defence is also an international business, and with whom we have served on operations across the world stage in recent years.

    On last year’s Operation Unified Protector over Libya, for example.

    Denmark’s decision to maintain a stunningly high level of sorties (double the coalition average) throughout August proved critical to bringing an end to Qadhafi’s tyrannical regime. We much appreciated Danish Defence Minister Gitte Bech’s willingness to extend Danish operations.

    Likewise, the invaluable contribution of the Royal Norwegian Air Force, which flew more sorties than at any time since the Second World War.

    I was privileged – on my visit there in January – to have the opportunity to meet some of the commanders and pilots who spearheaded Norway’s contribution.

    An operation which also saw Sweden step forward to help enforce the No Fly Zone over Libya with eight of its Gripen aircraft and a C-130.

    This was the first time in over 60 years that Sweden – a non-NATO nation – had conducted an out-of-area operation with an offensive air capability.

    Indeed, there were times when the Swedish Air Force was providing something in the region of 40 per cent of the entire coalition air picture; an extraordinary contribution.

    Members of the Northern Group are also heavily engaged in counter piracy operations off the coast of Somalia.

    I know that Denmark’s counter piracy effort involves providing a naval contribution for six months of every year, plus an MPA contribution for up to two months of every year.

    And of course in Afghanistan where UK Forces have fought – and are fighting – alongside forces from Denmark, Sweden, Norway, Finland, Estonia, Lithuania, Latvia, Poland, Germany and the Netherlands.

    And many have very sadly lost their lives: a tragic total of 594 across all twelve Northern Group countries, of which the UK has suffered 410 losses.

    And I want to say something very briefly here about the contribution of Denmark and Estonia, who have been closely involved with us in Helmand Province.

    Both countries have borne a particularly high proportion of casualties in the light of the number of forces deployed.

    I have now been to Afghanistan 6 times, and had the privilege of meeting the Danish and Estonian military on a number of occasions when visiting our troops in Helmand. I am always impressed by their professionalism and commitment.

    Afghanistan has taught us all a lot about collaboration and the concept of everyone maximising each other’s strengths and capabilities.

    And on that note, I’d like to take this opportunity to say how much we are looking forward to working with Denmark in developing the Afghan National Army Officers Academy.

    This will be a crucial contribution to Afghanistan’s future security, and we are delighted to be working on it with our close comrades from Helmand Province.

    I know that NORDEFCO members are adamant that this is an initiative which isn’t about new military or political alliances.

    What NORDEFCO is about is sharing resources, driving down costs and enhancing interoperability. Doing more with less.

    You are a pragmatic and proactive group already leading the way on Smart Defence – or to use the EU term, ‘pooling and sharing’.

    Some here today are members of NATO, but not the EU. And vice versa.

    What matters to me is that all countries wanting to contribute to collective defence and security are able to do so without constraint by institutions.

    As an example, the UK has developed – and will shortly see enter service – a major enhancement to our air-to-air refuelling capability. This will give Europe a significant enhancement in an area which has a critical shortfall.

    Now, we didn’t wait for the EU or for NATO to tell us to develop that.

    We don’t plan to wait for either of these organisations to find us potential partners with whom to share the spare capacity we anticipate having when the system is fully in service.

    In fact under David Cameron’s government the UK has been actively driving forward bilateral and small group cooperation.

    We believe it offers a practical way in which the international community can respond to the strategic and financial challenges of the twenty-first century.

    Since the publication of our Strategic Defence and Security Review in October 2010, we have signed no fewer than three Defence Treaties and 27 Memoranda of Understanding, including with Norway. And more of these bilateral agreements are under negotiation.

    We are also working hard to ‘bottle’ the superb collaboration shared by the UK, Denmark and Estonia in Helmand Province.

    Particularly when it comes to sustaining the logistics relationships which have proved so fundamental to our success together in Afghanistan.

    Next month my own Policy Director will chair a meeting of Northern Group MOD Policy Directors to consider the Group’s role in delivering further Smart Defence and Pooling and Sharing.

    And next year we look forward to working with Latvia and Lithuania and others on the UK-led EU Battlegroup.

    Whilst we recognise that the EU has a complementary role to play in supporting NATO, I want to take this opportunity to emphasise that as far as the UK is concerned, NATO will remain the cornerstone of our security.

    And that’s because the Alliance continues to be a community prepared to back principles with military fire-power, as we saw last year in its implementation of the United Nations Security Council Resolution on Libya.

    The reality is that when it became clear that sustained multi-lateral action was required, NATO was the only realistic co-ordinating structure prepared for – and with the mechanisms to deliver – joint and combined operations.

    However the Alliance does need to be revitalised.

    Libya was very successful, but as Robert Gates said just before he stepped down as US Defence Secretary last year: ‘NATO’s serious capability gaps and other institutional shortcomings were laid bare by the Libya operation’.

    The fact is that we all need to think – and act – Smarter.

    Smart Defence isn’t a random concept with a catchy title.

    Nor is it a shiny new strategy to be launched with a couple of Press Releases, posted on a website and quickly forgotten about.

    And it must certainly not become an excuse for individual countries to reduce national defence expenditure, which in many cases are already too low.

    Smart Defence needs to become the basis on which we collectively shape our defence capabilities in the future.

    And that’s why we are actively supporting NATO’s Smart Defence initiative, which will be an important focus of this month’s Chicago Summit.

    Embedding Smart Defence in the Alliance requires it to be clearly tied into the NATO Defence Planning Process.

    And we also need common standards. Because the reality is that multinational military operations still suffer from poor interoperability.

    It’s also – and I think all of us here today are very aware of this – about driving forward cultural changes.

    As the NATO Secretary-General observed to NATO Chiefs of Defence earlier this year, Smart Defence is essentially about changing mindsets.

    About getting nations to think in a more collegiate way, and take an objective approach about capabilities which many of us are more used to thinking of as sovereign.

    However, we need to understand the challenges faced by nations such as the UK, who cannot risk relying on an unreliable partner to provide a key capability.

    Smarter defence is actually about future proofing.

    Working together to make sure our resources go further.

    In the UK, we are currently going through a process of transformation, getting our budget back under control and putting the management of Defence on a sustainable footing.

    There also remains far too much inefficiency in both NATO and the EU. Too many headquarters, for example – and too many staff.

    None of us here can afford it – and we must address it.

    And of course one very important way of boosting our efficiency and being Smart, which is relevant to this conference, is to adopt a new approach to the way defence uses energy.

    It is a fact that the military have been – and will for the foreseeable future – be dependent upon energy for battle wining capability.

    Energy is a critical enabler – but, we need to make sure that it does not constrain us.

    Our experience in recent operations has highlighted this as a potential vulnerability. And just to put this into context – according to US military figures – a soldier in World War 2 used one gallon of fuel per day. Today the average American soldier on operations takes up 22 gallons every day.

    And take for example Afghanistan, where most of the fuel we use has to be imported and forms the bulk of the long logistics tail from Karachi.

    Those convoys have to be protected – and we have taken casualties in doing so.

    In tandem, not only is the global price of diesel going up, but the cost of bringing it into theatre can be ten times the original price.

    And these convoys are vulnerable to disruption, such as the closure of international borders.

    All of which impacts on our military effectiveness.

    We need to find ways of reducing the amount of energy we use, and you will shortly be hearing more about the UK approach from Admiral Neil Morisetti, the UK Climate and Energy Security Envoy.

    But I’d just like to mention a couple of examples of work the UK has been taking forward in this area:

    We have funded Qinetiq’s development of the Zephyr – an amazing solar powered high altitude long endurance UAV which has successfully completed a world-beating three and a half day flight. This is a tremendously exciting capability with a huge amount of potential. We also have a plastic bottle recycling plant in Camp Bastion.

    And we’ve also been looking at a range of energy management techniques to be deployed in forward operating bases – particularly in a harsh environment like Afghanistan. You’ll be hearing more about this MOD project – known as PowerFOB – over the course of the seminar.

    In all cases this has been achieved by working closely with our industrial partners.

    The military will always require a hard edged war fighting capability -and for the foreseeable future that means using fossil fuels.

    But, through energy efficiency and by opting – where appropriate – for alternative sources of energy, we can sustain operational effectiveness and address the wider issues of climate change, and the risks that poses to global stability.

    In other words, you can be smart and green.

    These are challenges we will – and must – face together.

    And they call for effective collaboration and strong partnerships. I know this is something this group can – and will – deliver.

    Thank you.

  • Gerald Howarth – 2007 Speech on the Future of the British Army

    On the 30th January 2007 there was a Westminister Hall debate on The Future of the British Army. 

    The following is taken from the Hansard report for the 30th January:

    Mr. Gerald Howarth (Aldershot) (Con): I follow on from what the hon. Member for Dunfermline and West Fife (Willie Rennie) said and pay tribute to one of Britain’s greatest success stories, Her Majesty’s armed forces, and particularly, in the light of today’s debate, the British Army. I do not believe that there is an army in the world that can match ours.

    I congratulate the hon. Member for Crosby (Mrs. Curtis-Thomas) on securing the debate. I am sorry that more hon. Members are not present, but I pay tribute to her because she is a tribute to the armed forces parliamentary scheme. She has clearly benefited from it and proven to the House and, we hope, to a wider audience—she has certainly done so to the Minister, although he needs no confirmation of this—that the scheme is an extremely good organisation and helps to ensure that Members of Parliament who do not have experience of the armed forces are introduced to what is, as I said, one of Britain’s greatest success stories.

    I shall not go through all the points that the hon. Lady raised, but she made two fundamental ones. The first was that the Falklands campaign illustrated the importance of being prepared to fight for one’s country, territory and interests. We must never forget that that is what our armed forces are for. Having come straight from a meeting with Baroness Thatcher and just discussed these issues, I can reinforce that remark.

    The hon. Lady’s second point was about Sierra Leone. That is a very different operation, but it is one in which the British Army is conducting itself magnificently. It illustrates the extraordinary versatility of Britain’s Army and particularly those who come from less privileged backgrounds. Some people come from very difficult home backgrounds and poorer parts of society, and it is a tribute to the British Army that it manages to train them and turn them into such stalwart citizens who are both brave and versatile. In theatres such as Sierra Leone, they are winning hearts and minds, as they are doing in Iraq and Afghanistan. That is an enormous tribute to them. As Conservative Front-Bench spokesman on defence, but also as one who has the privilege of being the Member of Parliament for Aldershot, the home of the British Army, I have to say that this is a wonderful opportunity for me not only to extol the virtues of the British Army, but to highlight some of the difficulties. May I say to the Minister, who has been in post even longer than I have, that if I do highlight the difficulties, I do so because it is part of the constitutional duty of the Opposition to hold the Government to account? Much is being done that I am sure is good. New equipment is coming on board, and the Minister mentioned accommodation, but there are real problems. The hon. Member for Dunfermline and West Fife illustrated some of those. General Sir Richard Dannatt’s first intervention when he became Chief of the General Staff was to say:

    “We are running hot, certainly running hot. Can we cope? I pause. I say ‘just’.” Coming from the head of the British Army, that should send a shock through all Members of this House, not just Ministers, but it was a considered view and reflects what is happening on the ground. The trouble with the military is that when asked to do something by politicians, invariably their answer is, “Yes, sir. We can do it, sir.” We politicians then glibly say, “Okay, that’s fine. Let’s crack on with it.” The military are reluctant to say, “No, we can’t do it,” because they would feel that they were failures or that they had failed to deliver what was expected of them by the politicians. I think that what General Sir Richard Dannatt said is absolutely right. It is certainly borne out by my experience and by the figures.

    I remind the Minister that in 1997 the required strength of the British Army was 106,360. That had fallen by 2006 to 101,800. The trained strength of the Army in 1997 was 101,360. Last year, it was 99,570. We now have the smallest Army since 1930. The fundamental difference between 1997 and 2007 is that today we are fighting two wars. There is no point in pussy-footing around: when we say that people are going on operations, they are going into war zones. Iraq is effectively a war zone and Afghanistan is most certainly a war zone, as are the myriad other operations that the hon. Lady mentioned and to which we are committed.

    The fundamental basis of our criticism of the Government is that there are insufficient men to undertake those tasks. It is no good saying, as the former Secretary of State did, that platform numbers no longer count because we have such sophisticated equipment. Of course numbers count. One ship cannot be in two places, as Admiral Sir Alan West, First Sea Lord, said. Equally, soldiers are human beings. To take territory and hold it, one needs men, and that means numbers. It does not matter how sophisticated the weapons are, the physical presence of the soldiers is what counts. We cannot understand why the Government have cut four British Army battalions when General Richards in Afghanistan has called for precisely 2,500 men. What is that? It is four battalions. That is in addition to what they are doing to cap badges and to destroy much of the morale and ethos that is associated with the support for individual units. Men do not fight for their country; they fight for the man next to them. They fight for their unit, their regiment and that battle honour. Anyone who doubts that should watch the 3 Para video of Afghanistan, which is extremely well worth watching. It exemplifies the sense of camaraderie and ethos.

    In 2005, some 3,350 more people left the Army than joined up. Last year, the number was about 1,500. I agree that the problem is not so much with recruitment, although only two battalions are properly recruited—the Gurkha battalions—while the rest are under-recruited and under-strength. There is an attraction for young men and women in serving their country and taking part in the kind of operations that are under way. The problem is something else. When I go around and speak to people, many of them tell me, “I’ve done Iraq”—probably three times—and “I’ve done Afghanistan. It doesn’t get much better than that, so I’m quitting.” The people who are leaving are the backbone of the British Army: the captains, majors and senior warrant officers. They are the repository of the real experience in today’s Army. Their loss is potentially the most damaging, and something has to be done about it.

    I have two Guards battalions in Aldershot at present—the Irish Guards and the Grenadier Guards. Before Christmas, the commanding officer of the Irish Guards, Colonel O’Dwyer, told me, “Sir, we are not valued.” That is a serious wake-up call and we need to wake up. The colonel is a splendid chap, and he did not say that in any way politically, but it is an accusation against the political classes. It is our job to make sure that they are valued. I shall return to the military covenant later.

    Mrs. Curtis-Thomas: In what context was that comment made?

    Mr. Howarth: I protested to the colonel that there is not a Member of Parliament who does not stand up in Westminster and proclaim the virtues of the British Army. He said, “We get less telephone time than prisoners, and when we go on a train we have to buy a travelcard. Police officers just flash their warrants and don’t have to pay anything.” I realise that those are small things.

    Mr. Ingram: I shall respond to that now because I might not have time to deal with all the points that have been raised in detail. It is not correct to say that forces members have less telephone time than prisoners. We recently increased it to 30 minutes a week. Perhaps the hon. Gentleman can go back and correct the misunderstanding or misinformation that is being pedalled around.

    Mr. Howarth: I am happy to do that, but I want to make it clear that that is not the fundamental issue. It is more like the straw that breaks the camel’s back. If I am issuing a warning to the Minister, it is this: we are taking the British Army too much for granted. It is at a tipping point. Take the Grenadier Guards. In the 115 weeks between March 2006 and June 2008, they will be on operations for 48 weeks, doing field exercises for 20 weeks, and have 10 weeks of post-operational tour leave and pre-deployment leave. To anyone who thinks that that involves swanning around at home, I say that post-operational tour leave provides the process of decompression that is essential when men are taken out of a theatre such as Iraq or Afghanistan having seen what they have seen. It is not a holiday. We do them no service.

    Servicemen and women tell me that the negatives of service are the separation from their families and lack of adventure training—the kind of thing that used to make up part of the whole military package. It is now tilted in favour of duty, responsibility and work and less in favour of the benefits that made the whole package attractive. Yet these days, unlike in the cold war, those men and women are putting their lives on the line for us day in, day out. They are dying for their country. They are giving a real, not abstract, commitment.

    I pay tribute to those who have given their lives for our country and to their families, who deserve the biggest tribute because they supported them. They are the ones who have experiences like the lady who said,

    “When I put the children to bed, the house is silent.” She will live with that silence, and we need to bear that in mind.

    Mrs. Curtis-Thomas: Is the hon. Gentleman arguing that we should limit the exposure of the Army to a specific number of areas of engagement, or does he support the argument that while the Army’s diversified activity is positive, it is crucial that we have more people to deliver that diversity comfortably?

    Mr. Howarth: It is the latter. I simply do not think that there are enough people, and that is the generally held consensus. There are not enough people to do all the jobs that are being done. I have no desire for us to retreat into a United Kingdom shell and remove ourselves from the world stage. We are a power for good in the world and I want us to play that role. I am a Tory. I believe that strong defence is the first duty of any Government—certainly a Conservative Government. We are able to play a great role in the world. Anyone who compares British forces, and how we deal with people, with the American forces in Abu Ghraib can see that we are good. Personally, I have no wish to see our role diminished.

    I have written to Air Marshal Pocock about how the change in the allowances will affect the Grenadier Guards and they will lose £681,750. They are doing two operations—they just came back from Iraq in October and are going to Afghanistan in March—and they are uniquely disbenefited by the changes. I urge the Minister to look at that again.

    I want to address one or two issues about equipment, starting with armoured vehicles. We have been warning for years that the nature of the operations in Iraq, in particular, and now Afghanistan, puts our troops at grave risk from roadside bombs and sophisticated improvised explosive devices. I was told in Iraq, three years ago, that the insurgents there had achieved more sophistication in 30 months than the IRA did in 30 years.

    On my return from the armed forces parliamentary scheme visit to Iraq, on which there were no Labour Members, in 2005, I went straight to the Secretary of State and said, “You’ve got to do something about this.” I did not go to the press because my duty is not to spread fear and alarm among families. I have been criticised for not going public about it, but that was my view. The Government have made a mistake, although they are now bringing new kit on board.

    We have a duty to give the men the best possible protection, so I welcome the Cougars coming into operation, but we were told last July by the Secretary of State that they would be fully operational at the end of 2006. I do not regard having four Mastiffs, as I believe the British Army now calls them, in theatre in Iraq as being fully operational. Everybody knows the limitations of the Snatch Land Rover and it is time that the Government did more to recognise that they have a duty to protect our troops. Equipment exists that is able to do that—for example, the Pinzgauer, which I have been to see. Others dismiss it, and I do not think that it has the full armoured capability of the RG-31 or the Mastiff, but it will make a contribution.

    The second issue on equipment concerns helicopters. I understand that the Government have decided that the Danish EH101s are not available or that they will not go ahead with acquiring them. It is clear that we particularly need lift in Afghanistan, as it is insufficient. That which there is in theatre is being used at a far higher rate than had originally been envisaged, which is imposing a far greater toll on the maintainability of the helicopters. I gather that Eurocopter has put a bid before the Government concerning six Pumas; there is a possibility that three will be made fully theatre-prepared and available by July, with the rest available by the end of the year. The Government have a duty to do something about lift, because it is available, and I cannot understand why they are taking such a long time to deal with it. I know that there is a bit more time available so would it be in order for me to have another five minutes, if the Minister agrees, as he would still have time to reply, Mr. Gale?

    Mr. Ingram indicated assent.

    Mr. Roger Gale (in the Chair): The Minister is happy, so I am too.

    Mr. Howarth: I am grateful, because there are many other issues that I could raise about the British Army. Although I do not have time to raise them all, I want to mention the important matter of medical care. We have an inadequate system of dealing with the aftermath of military operations and the Government need to do much more. The issue of mental health problems arising out of operations is also of paramount importance. If the Minister could do anything to increase the support that he makes available to Combat Stress, he would be doing a great service and would be widely thanked. We know that there are insufficient numbers of nurses and doctors. They are about 43 per cent. under-recruited, and that will also have to be addressed.

    Mention has been made of the military covenant. There is not a person in this land who believes that Britain’s armed forces have not fulfilled their part of the bargain. They have done so in shed loads. They have met their duty under the military covenant, but the nation has failed them in return. We have not given them the kit, the sufficient manpower, the family support or the accommodation. Whatever the Minister is now doing, we have not done enough for our armed forces to enable us to look them in the eye and say, “We have fulfilled our part of the military covenant.” I want to make a point to the Minister by taking as my text the remarks made by the former Secretary of State, now the Minister for Europe, in supporting essay 2 to the Defence White Paper of 2003, “Delivering Security in a Changing World”.

    He stated: “Since SDR our Armed Forces have conducted operations that have been more complex and greater in number than we had envisaged. We have effectively been conducting continual concurrent operations, deploying further afield, to more places, more frequently and with a greater variety of missions than set out in the SDR planning assumptions. We expect to see a similar pattern of operations in the future”.

    In other words, we are imposing on our armed forces a commitment that is greater than was proposed in the strategic defence review. The SDR was never properly funded and this is not properly funded. The situation is, “Commitments of SDR, plus; funding of SDR, double minus.” That sums up the dilemma that the Government face.

    It is no good the Prime Minister saying, as he did against a military backdrop—on HMS Albion—in a wonderfully orchestrated and typically Labour spin thing, that we are going to spend more on defence. When the matter was raised in the other place—I raised this with the Prime Minister at Question Time last week—Lord Davies of Oldham said of the comprehensive spending review that “there will be a number of contributions to that debate. The Prime Minister’s contribution will, of course, be regarded very seriously and very importantly indeed.”—[Official Report, House of Lords, 17 January 2007; Vol. 688, c. 647.]

    What have we come to when the Prime Minister of the land deliberately gives a stage-managed appearance on HMS Albion telling the armed forces, “Don’t worry boys, I am going to look after you. I give you a commitment” and that is a “contribution to that debate.”? That debate is presided over by, undoubtedly, the next Prime Minister, the Chancellor of the Exchequer, who has betrayed the armed forces. He has failed to fund them to the level required to meet the commitments that the Prime Minister has imposed on them. He is as much a part of this Government as the Prime Minister, and he has failed abysmally in doing the job that he ought to do of supporting our armed forces.

    My hon. Friend the Member for Mid-Sussex (Mr. Soames) and I offered a little challenge before the previous election. We offered a magnum, no less, of Pol Roger champagne—the favourite champagne of his grandfather, Sir Winston Churchill—to the first person to spot the Chancellor of the Exchequer arriving at, or leaving, a military establishment. The magnum of Pol Roger is still on my sideboard awaiting collection. I believe that the Chancellor has now been to Iraq and is trying to ingratiate himself with the armed forces, but he is a man who has never done anything to help them. He may say that the Tories cut defence spending, but we did so because the circumstances after the ending of the cold war, which was achieved by my noble Friend, Baroness Thatcher, meant that we had to have a rethink. To this Government’s credit, they had a review. We should have had a review, but we did not. We cut defence expenditure but the trouble is that the Labour party wanted to cut it even further. The Government should not tell us that we did not do the right thing by the armed forces because Labour wanted further cuts.

    There is an issue about the funding of our armed forces, and the hon. Member for Crosby raised it. On 30 October, The Daily Telegraph gave figures from an opinion poll that asked people whether they thought more or less should be spent on defence. Some 46 per cent. of people said that we should spend more on it, of whom 18 per cent. said that significantly more should be spent. Only 22 per cent. said that less should be spent on it. Interestingly, there was an opinion poll about Iraq in another column showing that 57 per cent. of people said that we should be out of Iraq either now or within 12 months. That illustrates the complete disconnect between the public’s opposition to the Iraq war and their support for the armed forces.

    We have a duty to support the greatest army in the world. It has served us well and I, like everyone else, is proud of it. We are not doing our stuff by the Army and, if we do not do so, the haemorrhaging of people leaving the armed forces will get even worse and experienced people will go. Such people cannot be replaced. The military covenant requires us to do our duty by our magnificent armed forces.

    The Minister of State, Ministry of Defence (Mr. Adam Ingram): I thank my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) for securing the debate. I will come to some of the points that she made, but I want to start by paying tribute to the members of our armed forces for their dedication and the invaluable contribution that they make on a daily basis to our efforts for global peace. She put that into context well.

    I also pay tribute to the families, particularly those who have lost loved ones. I was up in Kinloss yesterday for a most moving memorial service in recognition of the 14 brave men who lost their lives in the aircraft crash. It was a powerful event that brought home to me people’s resilience, dedication and commitment. I spoke only to RAF personnel and to some of the families, but all three services were represented.

    As an aside, I should say that I appreciate the comments made by my hon. Friend about the armed forces parliamentary scheme. I was one of the early participants in it, which is possibly why I have ended up in this job for six years. I wanted to spend my time with the RAF because my father had been in it, but as two places had been filled, I ended up with the Army. I am glad that I did, because it gave me an insight into things that I did not have much knowledge of, other than through family contacts of a vintage period from the second world war. However, the Army’s future is not dependent on the armed forces parliamentary scheme. If it were, more participants of that scheme would be taking part in the debate. It is to be noted that so few of them are.

    I appreciate my hon. Friend’s recognition of what is being done in the incredible training programmes in the armed forces and, considering who we recruit and where, particularly in the Army. People are lifted and become exemplars for others in their communities, and we give welfare to tens of thousands of younger troops. That is an example of what we are trying to do as part of the covenant. We want to create an ongoing ethos. What we have done is not new, but training is getting better, sharper and better funded.

    One of the baselines is how we bring on young people who come into the armed forces. In my six years as armed forces Minister, I have been dealing with the Deepcut issue—the four tragic deaths that occurred there. We have analysed it and now transformed the whole training regime, which has been independently audited and examined. Those in the armed forces who have had to deal with it must be given credit for transforming their approach, which will give the forces strength. The regime is not perfect, and there is still a lot to be done. There are accommodation issues to consider, but we have invested heavily in both financial and people terms to turn that around. If we do not get it right, we will not get right other aspects of what we are doing. I shall come to equipment, which is a key matter.

    Hon. Members have mentioned the Prime Minister’s speech on 12 January. It is wrong to diminish its importance, but I understand the political knockabout that takes place. It is worth while to read the speech: it was successful and examined where we stand. The Prime Minister talked about the transformation of the context within which the military, politics and public opinion interact. We are in a new climate and environment, and some changes are driven by events and some would have had to be made anyway because of circumstances evolving beyond our shores.

    Mr. Howarth: What the Prime Minister said on HMS Albion was:

    “For our part, in Government, it will mean increased expenditure on equipment, personnel and the conditions of our Armed Forces; not in the short run but for the long term.”

    It was a Minister in the other place, Lord Davies of Oldham, who said that that was merely a contribution to the debate. I say to the Minister that this is not knockabout stuff. If the Prime Minister’s words did not mean that the armed forces were sent the message, “We are going to increase expenditure,” what did they mean?

    Mr. Ingram: I have read the comments made by my colleague in another place, and knockabout is a word that I could use to good effect in describing them. The Prime Minister’s speech was more than a contribution; it was a substantial analysis of where we stand. We are not here to consider that speech, which covered matters beyond the future of the British Army, but it put the armed forces into context. The Prime Minister talked about public opinion, politics and where Her Majesty’s armed forces sit. He also mentioned the need to invest in our nation’s warfighting capabilities to pursue our foreign policy. The sharp end of that is the British Army.

    There are people who do not believe that we should be a warfighting nation, including some in the House and perhaps in the other place. I think that they are wrong, because that represents where we best position ourselves and where we have historically and traditionally given great effect at momentous times in world history. We are doing that in Iraq and Afghanistan today, and who knows where we will do it tomorrow? The Prime Minister set out a variety of security threats and challenges that we face and where the armed forces sit in relation to them. Much of what he said is what we have been addressing in the Ministry of Defence since the strategic defence review.

    I am grateful to the hon. Member for Aldershot (Mr. Howarth) for admitting that the Conservatives failed in government to address what was coming after the end of the cold war. The downsizing and the changes that took place were not well structured. The Conservatives did not analyse what the needs of the future would be. They immediately reduced defence expenditure dramatically so that they could invest it in trying to win the forthcoming elections.

    Mr. Howarth rose—

    Mr. Ingram: I shall give way in a moment on that point, but I do not agree with the analysis with which the hon. Gentleman closed his speech.

    The incoming Labour Government considered where the armed forces should be positioned and how best they should be structured. That was an intensive programme, driven directly by the armed forces themselves. They knew that they had to get themselves better structured and positioned. On the back on the conflicts in Iraq and Afghanistan, it was clear that more needed to be done. There was not a full review, but more consideration needed to be given to how to structure the armed forces, particularly the Army.

    We considered the new technology that was coming in, which changed the relationship between the various services and how they could fight interdependently and flexibly, meeting new challenges and a different type of threat and enemy. All that had to be included in the examination process. Such a process will always be complicated while we are engaged in heavy commitments such as in Iraq and Afghanistan.

    Other countries where we are engaged have been mentioned, and it is interesting that people forget about Northern Ireland. Only a few years ago we had more troops committed there than to Iraq and Afghanistan put together. We have transformed Northern Ireland: when I was the Northern Ireland Office Minister with responsibility for security, we had about 15,000 troops committed. Some were on rear bases, but that was the total commitment, the vast bulk of which came from the Army.

    The peace process was required for a lot of reasons, one of which was the heavy resource commitment. We had been there for far too long and there was another, better way of doing it. We could never have solved the problem militarily, yet we had a large commitment. As of next year, we will have a commitment of 5,000 troops—not for the peace process, although a measure of support will be given to the civilian authorities, but overall. That is a major transformation and it has reduced pressure.

    Two parts of our re-examination were called future Army structure and future infantry structure. The future Army structure represents a complete overhaul of how we brigade the British Army. Virtually every Army unit establishment was subject to examination, and will be in the months and years ahead. Some 10,000 posts will be redistributed, which will reshape and restructure the Army and is intended to get a better balance between heavy, medium and light capabilities. We inherited an imbalance: the enemy and threat had changed, so we had to change accordingly. That required re-roling and people doing tasks other than those that they thought they would do when they entered the armed forces. We were committed to one objective: maintaining the high quality and standard of Her Majesty’s armed forces.

    A previous Secretary of State, now the Minister for Europe, commented on the matter on 16 December 2004, saying:

    “However, enhancements that we have already decided on include the creation of a new commando engineer regiment, a new port and maritime unit, an additional strategic communications unit and a new logistics support regiment for each deployable brigade. We are also creating a number of new sub-units for surveillance and target acquisition, bomb disposal and vehicle maintenance capabilities.”—(Official Report, 16 December 2004; Vol. 428, c. 1796.)

    In April last year, a new special forces support group was also formed to work alongside special forces tackling the terrorism that we face globally. I have visited a support group and spoken to those deployed in Afghanistan. I cite those examples because they are never recognised as part of the process of substantial change that we have seen. That process has been driven by a military imperative to get things right, and there has been political and financial support for it.

    Mr. Howarth: I entirely endorse that point, and the Minister is absolutely right, but we need to introduce changes to meet the circumstances of today, not the limbo in which we found ourselves in 1989, following the fall of the Berlin wall. It is absolutely right to do that, but the Minister’s problem is that he is still operating with an Army of less than 100,000. As far as I can work out, we would have to go back pretty well to the time of Wellington to find an Army as small as that. That is where the problem lies—not with the new units that the Minister is creating, which I applaud, but with the reduction in the Army below the critical 100,000 level.

    Mr. Ingram: Let us look at the figures. The hon. Gentleman said that trained strength was 101,300 in 1997. It dropped to 100,900 the following year and to below 100,000 the year after that. In terms of the figure being below 100,000 and the reference to 1935, therefore, he is wrong. The current figures are marginally below the 1999 level. Interestingly, however, recruitment grew at the height of the Iraq controversy, when there were massive demonstrations in this country.

    In 2004 and 2005, the figure went up to 102,400. That tells us something that is probably hard to analyse—recruitment went up against the trend, but we are now having recruiting difficulties. Tempo is unquestionably part of the issue, but people tend to forget the strength of the economy. The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) mentioned the strength of the Scottish economy and his own region. It is difficult to recruit from a particular cohort when the economy is strong, and especially when the demographics and all the higher and further education opportunities open to young people, which were not there before, are working against us.

    That is what this debate is about, and if people can find a solution to that problem, they should tell us. A lot of effort is being put into working towards the best conclusion. We offer young people immense opportunities not only in the Army, but in the armed forces, and my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) mentioned the educational opportunities. We market and advertise the opportunities that the armed forces provide so that people are aware of them. Sometimes those recruiting campaigns work, but sometimes they do not. We are no different from any other major organisation that is trying to reach a market and attract people in.

    What militates against our efforts is people arguing that the British armed forces are underfunded, ill equipped, badly treated and badly looked after. There may be some underlying truth in terms of issues needing to be addressed, but no wonder we find it difficult to recruit when debates such as this present a picture of complete negativity, rather than highlighting the positive attractions for young people. That is why we are putting so much effort into our recruiting strategy and trying to lift the quality of the debate as best we can.

    Mrs. Curtis-Thomas: That is an interesting point. We have certainly seen that situation in the north-west, and particularly in Liverpool, which is a big recruiting area for young soldiers, although the economy and job opportunities have gone through the ceiling, which means that the Army is not as attractive as it was. However, I take my right hon. Friend back to my earlier point that the Army has made strong attempts to ensure that any qualification it gives has equivalent civilian accreditation. Many individuals were locked into the Army because their experience could not be marketed outside it, but that barrier has now gone. That means that they can gain fantastic opportunities and then say, “Where can I best use them?” That is quite an important factor, and I applaud the fact that we have taken those steps, but it does create retention problems.

    Mr. Ingram: It is probably a no-win situation. Not every young person who comes into the armed forces because of the opportunities that they offer—they are not all 16 or 17-year-olds, and some are a bit more mature—is focused on training and education, and some come in to do what they want to do with the Royal Marines or the Army, but they are all given every opportunity. I agree that that raises an issue, in that we are making people employable who were not employable before.

    I talked to RAF personnel at Kinloss yesterday, and several of them were looking at openings in the outside world. As a nation, we have give them that opportunity. Some would have taken it as a result of their own choice, but many will now be able to do so because we have provided the resources—the hundreds of millions that we pour into the education of our personnel.

    I want now to touch on equipment because we hear so much about equipment problems—indeed, that is all we are ever told about. When the issue arises, Defence Ministers try to take those who make such comments through the argument. Let me give a good example of what applies to the Army today and what will apply into the future. Four years ago, an eight-man fire team would have had roughly three SA80s; one light support weapon; an individual Mk 6 helmet, webbing and Bergen; enhanced combat body armour; the old Clansman; a light anti-tank weapon; an individual weapon sight; and a 51 mm mortar. Now, such a team has a light support weapon; a light machine gun; an underslung grenade launcher; thermal imaging sights; the Mk 6A helmet, which is an improved defensive aid; all-round Osprey body armour, which has saved lives; the interim light anti-tank weapon; the Bowman personal role radio; head-mounted night-vision sights; a long-range image intensifier; and an automatic lightweight grenade launcher and a 60 mm mortar in support.

    All those developments have taken place because of the theatre in which we find ourselves. That is what is happening on the procurement of equipment, and it is the same with armoured vehicles. I am really surprised that the hon. Member for Aldershot criticises what we are doing and says that we should do more. What more can we do, other than procure the numbers that we need and ask industry to supply us, which it is doing to a considerable extent? All that will place the Army in a better position in the years ahead.

    Let us just consider one fact: equipment valued at more than £10 billion has been delivered to the armed forces in the past three years. When people say that equipment is not being supplied to provide for force protection and wider capabilities, they are simply wrong. If they want more defence expenditure, let me hear where they want less expenditure. I shall advocate more expenditure as part of a spending Department’s approach with the Treasury—it is our job to do that—but let those who want more for defence say where they want a reduction. In health? In education?

    The issue is part of our covenant with the British people, and the Prime Minister set it out in his argument. Have we got the balance right? The argument is now out there, and the Prime Minister certainly made more than a contribution—his was a powerful examination of where we stand as a nation and what we need to do against unknown threats and enemies. However, we must get ourselves in the best position. I welcome this debate, and we should have more such debates, but I just wish that more hon. Members would participate in them.

  • Mark Hoban – 2013 Speech on Social Justice and Welfare Reform

    markhoban

    The below speech was made by the Minister for Employment, Mark Hoban, at the LGA Conference on Troubled Families in London on 23rd January 2013.

    Under the previous government, billions of pounds were moved around the tax and benefits system in an attempt to reduce poverty. But the complexity of the previous system had the perverse effect of trapping thousands of people on benefits. Through tax credits in particular, even quite wealthy people became entangled in a labyrinthine benefits system. The benefits bill spiralled out of control, and despite this, child poverty targets were missed.

    This is something the coalition government is determined to tackle. True social justice will only really be achieved when families are able to provide for themselves.

    Now this is no simple task, and of course there will always be people who need our help. But this help should be in the form of a safety net, and a leg up. Not a way of life which traps people with little hope of escape.

    The only real, sustainable way this can be achieved is by giving people the help and support they need to move into work. By working, people can earn the money they need to look after themselves and their families.

    But money isn’t the only reason. Having a job means much, much more.

    Having a job gives you pride, self-worth and dignity. Having a job gives you more control over your own life. Having a job shows your children that a life on benefits isn’t the only option.

    Now of course none of this can be achieved without there being jobs available. I am not complacent – I know there are people up and down the country who are struggling to find work.

    But despite tough economic times, recent employment figures have been encouraging, with more people working than ever before. Indeed figures which were published only this morning show that once again employment is up and unemployment is down.

    But I am well aware this isn’t the only answer. We need a benefits system which helps people move into jobs. And that is why we have embarked on the most radical reform of the welfare state ever.

    The benefits system had become so bloated that, for many people, moving into a job didn’t seem like an option.

    So under Universal Credit, which starts to be rolled-out in a few months, people will always be better off in work. People will no longer be trapped in a confusing web of entitlements and add-ons. And people will always be able to increase their hours without losing out financially

    And whether it’s giving lone parents the help they need to move off income support and into work, or reassessing people on incapacity benefit to see if they are capable of work, I am determined that we never again write people off. Never again will there be so much wasted potential. Never again will people be consigned to a lifetime on benefits when they could be helped into work.

    But getting the structure of the benefit system right, whilst necessary, isn’t enough in itself. We need to remove the barriers to work, particularly for the hardest to help – those who are furthest away from the labour market.

    For people in a family where there are multiple problems, having the jobs available is only part of the solution. They might need help to tackle unsatisfactory housing, help to manage a violent domestic life, help to learn personal skills and increase their confidence. These can all be vital in helping people make the change from a life on benefits to a life in work.

    And that is where we need to work together. As people on the front line, you more than most will see how complex the lives of people in troubled families are. And you will see the need for extra help.

    That is why, in December 2011, we set up the programme to provide support for people in families with multiple problems – to help them tackle some of their difficulties and move towards a job.

    Funded through the European Social Fund (ESF) programme, the DWP made two hundred million pounds available to help tackle entrenched worklessness amongst troubled families. This help is there to support families identified by Local Authorities as having the sort of problems that typically overwhelm people. Families who feel there are just too many barriers to see work as a realistic prospect. Families struggling with problems like debt, difficult living conditions, involvement with drugs or crime, and a lack of skills or work experience.

    This programme is intended to work across the family, across the generations and across the range of problems they may face.

    Now working to tackle such challenging problems across local and national government is inevitably going to have teething problems. But I have to say that collaborative working is nothing new, and I’ve seen for myself how it can work very well.

    Only last week I went to Wood Green Jobcentre Plus where their Community Engagement Adviser works closely with Haringey council and their locally-led jobs fund.

    Or in Grimsby where a local fish-filleting factory is able to take on trainees using a combination of Youth Contract measures and a wage incentive offered by the local authority. Or in Gloucester where Jobcentre Plus advisers work with schools and the Local Authority to pool resources and provide a single point of contact for young jobseekers.

    We want to replicate such successes with the ESF programme. By combining your expertise at working with these families with the tailored support that our providers are offering, together we can make a big difference to people’s lives.

    Because where this has happened, the scheme is working well.

    Take Rochdale Council, for example, where there is very strong support for the families agenda from the Chief Executive down, and they play a leading role in the Trouble Families Programme for Greater Manchester. Rochdale’s ESF families support and their Troubled Families programme are very closely integrated, helping them to identify pockets of deprivation to target resources.

    Or in Liverpool where the council works closely with the prime contractor, Reed. Together they ensure that the ESF Families programme complements their existing ‘Liverpool in Work’ scheme, without duplication or competition. Now the provisions are able to refer people between them depending on individual need.

    So while there are a number of shining examples, I think everyone here would agree that it could be working better.

    I know that you have not been asked to make direct referrals on this scale before, and I know that some of you have frustrations with the way things have worked.

    But let me reassure you – we are completely committed to turning around the lives of some of the most troubled families in this country, and we are looking at ways in which the process can be fine-tuned. And in return we hope that you, the Local Authorities, to play a stronger role too.

    Perhaps the most fundamental issue is the lack of a sufficient flow of people and families into the provision; meaning expert knowledge isn’t being used to its full potential. I recognise that some of the providers have faced initial difficulties, which is why we have made some changes to things such as funding. And I completely understand that a number of local authorities have been reorganising their services in order to deliver programmes like these.

    But the funding and the expert provision is there to be taken advantage of. And the provision is often innovative and flexible, such as Skills Training UK who have re-branded the ESF Families provision as ‘Progress! The Go Further programme’ in the South East. In one local authority, Progress arranges courses on anger management and confidence-building. But rather than having to wait for a new course to start, they are run on a ‘roll-on, roll-off’ basis so people can join whenever they are ready.

    So now is the time to take action – it is really important that you encourage your frontline staff to make use of the provision available. And my commitment to you is that I will ensure my Department’s extensive employment expertise is able to be more directly supportive of outcomes for these families.

    I believe that helping people move closer to a job is the best way to fundamentally change people’s lives. Of course, this won’t be easy for some people, but that doesn’t mean we shouldn’t do all we can to tackle it. Because between us we have the expertise and skills that have the potential to make a real difference to people’s lives. But we can only do this by working together.

  • Mark Hoban – 2012 Speech on Youth Unemployment

    markhoban

    Below is the text of the speech made by Mark Hoban, the then Minister for Employment, in London on 19th September 2012.

    I would like to begin by thanking Channel 4 for asking me to open this debate today.

    Although I am reasonably new to the post of Minister for Employment, that does not mean I am not acutely aware of the problems some young people experience when looking for that first job.

    Let me be plain. For any young person who is able to work to be out of a job is a tragedy.

    It is a tragedy for the individual, who finds themselves unable to get on in life…

    It is a tragedy for their family, who have to motivate and support them…

    And it is a tragedy for the country, which is missing out on a huge amount of untapped talent.

    And I know that our young people are talented. The vast majority of young people are hard working…

    …They are ambitious…

    …And, above all, they have great potential.

    You will be asking in your first session today if we are heading towards a lost generation of unemployed young people.

    Let me say categorically: no, we are not.

    As a government we are working tirelessly to make sure this does not happen. Indeed most 18-24 year olds leave JSA quickly. Around 60% of new claims last less than 3 months and 80% less than 6 months.

    But it is true that the number of young people currently out of work is too high, and we are being honest about the scale of the challenge we face.

    Previous governments have conveniently hidden the true scale of youth unemployment. They moved young people off JSA, called it something different, then put them back on again.

    They were still unemployed, but it made the figures look better. They weren’t so much ‘lost’ – they were purposefully hidden.

    We do not do this.

    But getting the figures right is no substitute for sorting out the problem. So I am going to spend a few minutes telling you what we are doing.

    For any young person looking for a job, often the biggest stumbling block is a lack of experience.

    Sometimes it’s that they have a lack of understanding of what the world of work is really like. But more often it’s that a young person simply hasn’t had the chance to prove themselves. You need to be able to show an employer what you are capable of.

    That is why, as part of the Government’s one billion pound Youth Contract, we are creating a quarter of a million extra work experience places over the next three years.

    This gives 18-24 year olds the chance to do up to eight weeks of work experience while keeping their benefits. This provides a vital opportunity for young people to get their first foot on the career ladder.

    But, of course, giving young people work experience is only one side of the coin. It will only be worth doing if we can help turn that experience into a real job.

    And that is exactly what we are doing.

    From January 2011 to May this year there have been nearly 65,000 young people starting a work experience placement. And our assessments show that nearly half of people who go on work experience are off benefits 21 weeks later. This is good for them and good for the country.

    Let me give you one example of how we are helping people find jobs – much of the amazing work carried out during the Olympics was done by the army of volunteers, many of whom were young people looking to gain experience to help them find work.

    Their enthusiasm, their work ethic, and their commitment was, I think you’ll all agree, second to none. Any sane employer should snap them up in an instant. Which why we are holding an event in Stratford today where 2,000 of those involved in the Olympics will meet employers with vacancies to offer now.

    This will be the first in a series of such events. Events which are specifically targeted at those who were Games Makers or worked at Olympic venues. We want to help the people who helped to make the Olympic and Paralympic Games such a success, by moving them into long-term employment.

    What a great lasting legacy that would be.

    Whilst we will work with you to get you in work, we also need to work with business to make sure the jobs are there.

    As our Olympics event shows, only by engaging with businesses can you create the jobs people need. Companies such as Whitbread, Debenhams, Ocado and Stagecoach will all be at the park this week, along with a number of smaller local businesses, all there to give people jobs.

    So working with business is, in my view, vital. As a Government we need to show employers that taking on young people will be good for their business.

    Indeed, later on today I will be with the CBI for the launch of the CIPD’s business case for investing in young people, which does just that. It will highlight the business imperatives that make young people such a vital component in an employers’ workforce.

    We need to show employers that through things like our work experience and apprenticeship schemes we are creating a generation which is eager. A generation which is skilled. And a generation which is better prepared for the world of work.

    And because we know times are tough for businesses, we want to make it easier to employ and train young people.

    That is why, through our Youth Contract, the Government is offering up to 20,000 new Apprenticeship Grants to encourage new employers to take on young apprentices.

    And that is why we are offering 160,000 cash payments of up to £2, 275 for employers to recruit young people from the Work Programme, or from Jobcentre Plus in 20 youth unemployment ‘hotspot’ areas.

    So in opening today’s debate, I would like to conclude by saying to young people across the country that ensuring you are given every chance to get a job is my number one priority.

    I don’t underestimate the challenges we face in an uncertain economy, but only by making sure you have the training, work experience and opportunities you need will we ensure our future.

    And I would like to finish by appealing to businesses across the country:

    Whether you are big or small, multinational or a local start-up: make use of the schemes we have in place. Work with us to help give a young person a chance.

    Give them a chance to get their foot on the ladder…

    …give them a chance to help your business grow…

    …give them a chance to prove to you what they can do.

  • Mark Hoban – 2011 Speech at the Markit Conference

    markhoban

    Below is the text of the speech by the Financial Secretary to the Treasury, Mark Hoban MP at the Markit Conference, The Grange City Hotel, London, held on 12th May 2011.

    Thank you. It’s a pleasure to be here this morning and to talk to you about the regulatory reform of markets.

    As the Minister responsible for financial services, I spend a huge amount of time on the vast array of European markets’ initiatives.

    London is Europe’s only global financial centre with- for example- 40% of the global OTC derivatives market.

    And so regulatory reform offers the UK both great opportunities and great challenges.

    In my discussions with industry, I know that you understand the need for reform.

    Want to see stronger and more resilient markets.

    And understand that we simply can’t afford another financial crisis.

    But I recognise also that fundamental reform is incredibly challenging.

    It requires thought.

    Evidence.

    Careful deliberation.

    Where most people can generally agree on the direction of travel, the final destination remains a point of contention.

    So today, I’d like to set out the UK’s priorities when it comes to the regulatory reform of markets;

    First of all, the need to create more resilient and more stable financial markets. To learn and put into practice lessons from the financial crisis;

    And secondly, to improve competition: to complete – and not fragment – the Single Market- and so promote, rather than stifle, growth.

    In order to achieve these aims, we need to focus on what really matters.

    Which is why, underpinning these aims, we continue to argue in Europe that every proposal – and every reform – needs to be backed up by clear and compelling evidence.

    With detailed consideration of the relative costs and benefits.

    Because it’s far more important to be doing things right, than to be seen to being doing a lot.

    So let me take these priorities in turn.

    Europe’s Financial Sector

    Starting first with the issue of stability.

    Now it goes without saying that the events of recent years have tested the underlying strength of the global financial sector.

    They’ve called into question the very nature of how financial markets operate.

    And across the world, people have been asking questions about the sustainability of different investments, institutions and financial products.

    With general consensus that reducing systemic risk and improving transparency is essential in improving stability.

    Derivatives

    Derivative trading is one of the many areas that have come under the spotlight.

    Indeed, derivatives continue to divide opinion.

    Some people would argue that derivatives were as much a part of the crisis as the sub-prime mortgage debacle, light-touch regulation, or low levels of liquidity and capital reserves.

    Others, including myself, would take the view that the problems concerning credit derivatives were more of a symptom of the crisis as opposed to an actual cause.

    Nevertheless, there is agreement that action can be taken to improve the infrastructure surrounding derivatives.

    If we look at EMIR, for example, the idea that central counterparties should be used to clear certain classes of derivatives is a welcome one.

    This, if implemented proportionately, will reduce the systemic risk presented by the derivatives market.

    But it’s important that this proposal is properly formulated and avoids creating unnecessary burdens.

    Not all derivatives deemed eligible for central clearing will necessarily be suitable for platform trading.

    We must look at the facts, rather than make broad assumptions.

    But equally, it is important that the scope of the regulation is sufficiently broad.

    When it comes to deciding which derivatives should be covered by EMIR, there are two different roads we could go down.

    The first would see all trades covered by this regulation, regardless of their venue of execution.

    The second would see only those derivatives executed outside of an exchange being subject to this legislation.

    All the arguments clearly favour the first approach

    Why?

    The first one being that the purpose of clearing derivatives is to reduce systemic risk – it’s not obvious to me why a derivative would need to be cleared if traded off-exchange, but not if traded on an exchange.

    And the second is market distortion- restricting the scope would create a rather sizeable regulatory loophole- which, if exploited, would lead to damaging asymmetry in the market.

    The arguments against a broad scope are hard to fathom, and seem to be about preventing competition in clearing – a subject I will come on to later.

    High frequency trading (HFT)

    Another stability issue where opinion is divided is high frequency trading.

    Concerns that HFT contributes to instability in markets- with the US Flash Crash often held up as an example- have prompted calls for action.

    But I feel that evidence is lacking- and that, for example, proposals around minimum order resting times and restrictive order to execution ratios in MiFID should be based on robust research.

    That’s why the Government has established a Foresight project looking at the Future of Computer Trading Financial Markets.

    This will examine the impact of technological developments in HFT to ensure that any regulatory intervention is both sustainable and effective.

    Competition

    Because, at a time when Europe has record financing needs, liquid markets are absolutely crucial.

    But they are also vulnerable.

    As I outlined at the beginning of my speech, any measures to improve stability must look at the wider impact- particularly the impact on competition and on the effective functioning of these markets.

    Market regulation in Europe needs to recognise that member states don’t work in isolation to each other- and Europe doesn’t work in isolation to the rest of the world.

    We should bear in mind that protectionist attempts to close down our borders or Balkanize markets by currency or geography will do huge damage to European growth.

    As will seeking to impose so-called ‘strict equivalence’ to detailed European standards before anyone can do business in the EU.

    Based on recent IMF data, last year, non-EU investors provided 27% of the total investment in EU cross-border securities.

    This means $5.2 trillion of all cross-border investment in the EU came from outside of the Union.

    It’s clear, therefore, that Fortress Europe is not the answer to strengthening our competitiveness.

    We face fierce competition from overseas… not just from traditional financial centres in the US… but increasingly from Asia.

    And at the same time, these emerging economies present us with huge opportunities to serve new and expanding markets.

    But if – in our goal of making markets stronger and more resilient – we get our regulation wrong, these are opportunities that will fall by the wayside.

    MiFID

    We can look to MiFID for an example of the competition benefits that regulation can achieve.

    Ten years ago, Europe was an underdog, relative to the strength of the US capital markets.

    Member States worked in relative financial isolation.

    Were hampered by high costs and low liquidity.

    And the Single Market had hardly got off the ground.

    But MIFID became instrumental in breaking down some of the barriers that were holding us back.

    Today, as a result of the competitive pressure of MIFID, Europe has exchanges that are capable of competing globally;

    Deutsche Boerse;

    the London Stock Exchange;

    Euronext-Liffe – just to name a few.

    Europe has become the destination of choice for many global companies seeking to access deep pools of capital.

    Competition has brought down trading costs, improved liquidity, and resulted in better protection for investors. In fact, I’ve read some estimates that suggest the single markets benefits of MIFID could have contributed as much as 0.8% to EU GDP.

    And if we get the MiFID Review right, we have the potential to build on this progress.

    But if we get it wrong we could set ourselves back a decade.

    So what is our impression of the MiFID review so far?

    Well, there are some clear positives to some of the measures on which the Commission has consulted : for example;

    the SME market proposals;

    the underlying theme of investor protection;

    and the potential to support G20 commitments on the regulation, functioning and transparency of markets.

    I also recognise that impressive progress has been made by the Commission in developing proposals for derivative markets.

    At the outset, I think it’s fair to say that they didn’t quite grasp all of the issues, but have worked hard to understand them through a genuinely consultative process.

    This should be commended.

    But the Commission have much more to do to convince me – and the industry- that they’ve genuinely grasped all the issues at stake.

    And any changes will have profound implications for tens of thousands of firms.

    We must learn from the AIFM Directive and other proposals which – in their original form – were fundamentally flawed and lacked an understanding of how our markets operate.

    So with MiFID, areas such as;

    the governance of trading platforms and venues;

    pre- and post-trade transparency requirements and;

    transaction or position reporting.

    we must implement proportionate regulation.

    A crucial part of this is understanding our markets. What works for regulation of equities – a homogenised trading instrument – should not be arbitrarily copied to bonds, sovereign debt, derivatives, or commodities markets.

    Also, within each asset class, the markets have their own dynamics and features, which only properly informed regulation will understand.

    Indeed, each commodity market is unique – where electricity trades in a different way to gold, metals, or agricultural commodities.

    If regulation fails to recognise this, firms will start to look elsewhere when it comes to matters of finance.

    And this will feed through to our companies, our businesses and our citizens.

    EMIR

    In EMIR, there are opportunities to promote competition market structure- competition which is healthy and should be encouraged.

    We all agree that CCPs must be made safe – that is why so much of EMIR is focussed on new robust prudential standards for CCPs

    But we must not allow new standards for CCPs, combined with a legal obligation to clear derivative products, to embed monopolies in clearing that will result in costs passing back to the wider economy.

    To prevent this, our view is that, while linked structures – so called vertical silos – can be effective, they must be subject to fair and open access requirements.

    Market participants should be offered a meaningful choice of using all or part of a vertical structure.

    Engagement

    In securing the aims that I have discussed today, engagement is absolutely crucial.

    The Commission should continue to work with all interested parties on markets legislation;

    engaging with businesses across Europe with expert groups on specific areas;

    allowing particular care over legal drafting, to prevent unintended consequences;

    and, again, ensuring that all impact assessments are of the highest quality.

    And I can assure you, the Government will be a positive and constructive partner in this process.

    But when it comes to finding the best solutions for Europe, we’re at our most effective when we work with you and engage openly on our priorities.

    Where we both share analysis to back-up our proposals.

    Which is why the industry has just as, important role to play as Government. EU regulation will have a direct impact on the business you transact.

    As we need more hard-headed analysis.

    To strengthen our argument.

    Make clear our concerns.

    And deliver outcomes to suit everybody’s needs.

    We’ll need your engagement.

    Your evidence.

    And your positive ideas for reform.

    So that any amendments to the current rules are;

    proportionate – not overbearing;

    grounded in fact – not political whim;

    and look to support stability, growth, and competitiveness.

    That is what we need to achieve.

    Thank you.

  • Michael Heseltine – 2012 Speech on Economic Growth

    Below is the text of a speech made by Lord (Michael) Heseltine on economic growth. The speech was made at Birmingham City Hall on 31st October 2012.

    Times of great crisis evoke memories of a time when this nation stood alone. “Don’t you know there is a war on?” prodded inactivity into life. Women flocked to the factories. Land girls heavy lifted on the farms. A generation of volunteers that had never worked before reinforced the social services. Certainly we were all in it together. I remember it well. They say old men forget. None of us who lived through that time will ever forget. The sacrifice and suffering; the carnage. Ultimately, the victory.

    That is why I hesitate to compare the crisis of then with where we stand today. There is another essential difference. Then the enemy was at the gate – a clear and immediate threat. A world of black and white. A focus sharper than crystal; a future ice cold.

    Today’s crisis is very different. The long term competitiveness on which our wealth depends is slipping away. To secure it we need a national commitment, discipline, every individual straining every sinew. Not for a day, a week or a year, but on and on as ever more nations enhance their skills, marshal their strengths, motivate their people to grasp a larger share of the world’s wealth.

    Failure has none of the trauma of occupation, of foreign tyranny, of freedom lost. Failure is measured in drift, in mediocrity, in under-performing public services and under-invested businesses. In infrastructure out of date, a nation with its head hung down, in the shadow of world events. A nation reconciled to genteel discomfort, envious of what once was, hopeless of what might have been. If we accept such a posture, the enemy would not only be at the gate, the enemy would already be within. The enemy named complacency, indifference, underused resource, waste of misapplied energy. No-one will advocate that. No electorate will vote for it.

    But the question that matters is the degree to which all of us, Government, companies, institutions, people themselves, will work differently to avoid it. If we are all in this together we all need to behave and perform as though we recognise it and intend to do something about it.

    It is easy in modern Britain to point to examples of excellence:

    We have world beating companies in manufacturing and the services

    We have academic excellence led by four of the world’s six best universities

    We have a civil service free of corruption

    We have a language, a history, an environment, spoken, respected and envied in every corner of the globe

    So, we should take great pride. But a harsh world will judge us by wider standards. By the standards of our average. By the slowest ships in the convoy. By whether everything we do is good enough. The examples of excellence give grounds to show what we can do, what we can achieve. They are not, however, typical of national performance. They need to be seen as standards to achieve, not grounds for complacency.

    I chose to make this speech in Birmingham. And no building could be more appropriate. It stands as a monument to the wealth and political power generated by the city’s entrepreneurial leaders in the eighteenth and nineteenth centuries. In those days, it was frequently filled with local people who gathered to debate the great political issues of their time. Their voices resonated across the country. The leaders they produced – of whom Joseph Chamberlain is the best known – became leaders of the nation.

    But those days are a now a distant memory. The great entrepreneurs who built Britain’s great cities and who drove our country to the forefront of the industrial revolution were powerful and ruthless men. The cities they built were in time overwhelmed by the exponential growth of the industrial workforce they attracted, and by the terrible urban living conditions that resulted. Those conditions were intolerable, and the democratic process rightly demanded change. The cities themselves could not fund this, so the national government intervened.

    Central funding ceded power to London. Local government focused increasingly on social provision. Councillors drawn increasingly from the public sector. The power of Whitehall grew. Ministers and civil servants concentrated on specific and individual functions – housing, transport, education, environment. Slowly but remorselessly the entrepreneurs that created the cities on the basis of local strengths were replaced by the functional monopolies of Whitehall.

    However, desirable the change it reduced the emphasis on growth. Whitehall increasingly ceased to trust local leadership – and so more and more powers were drawn into Whitehall or its national quangos. National initiatives were rolled out across the country irrespective of local conditions.

    I can only ever remember a Cabinet discussion that focused on place once – and that was after the Liverpool riots of 1981. My experience in Liverpool after the riots – working with the local community and their leaders to address the root causes of their problems – showed me that there is a better way.

    When local partners work together, that local initiative is more powerful than anything London can produce. Sir Terry Leahy and I helped to devise a vision for the future growth a year or so ago of that great community. The response was immediate. The local people knew what needed to be done.

    So, we need to reinvigorate that local leadership across our country, including greater devolution in London itself. And Whitehall’s ambition should be to do less but do it better.

    Of course we don’t need to change. We could carry on as we are. I believe that would be unacceptable. I do not detect an appetite in this country for so unambitious a future. And certainly the government itself is not prepared to stand by whilst other nations overtake us. That is why we need to compete in a rapidly changing world where the competition is intensifying year by year.

    We cannot hope to do that unless every part of this country is able to contribute fully to our national effort. We need to make the most of every opportunity for wealth-creation and growth. Let’s be frank – to say that is the easy bit. The government has had to tackle the worst economic crisis of modern times. The government has a radical agenda to reform education. It has an ambitious programme to get people off benefits.

    There is no greater sign of the government’s confidence and strength than its willingness to encourage me to produce a report which the opportunists will use as a basis of criticism. I am no critic of this government. I am so enthused by what they have achieved to be secure in my confidence of what more they can do.

    My report urges the government to build on what it is already doing, to speed up the process and to leave no stone unturned in pursuit of growth.

    How then can we get there? There is no new money and no quick fix. We need a new partnership between the private and public sectors, between local communities and central government, the better use of public money and consequently the levering of private investment.

    Such a statement may not sound new. It would, I think, have evoked widespread support over many years and under different governments. There have been initiatives and experiments. But what there has not been is a comprehensive long term implementation strategy to turn the thought into practice. That is why I so strongly welcome both what the government has done and, even more importantly, what it says it intends to do.

    So, what has it done?

    City Deals – Greg Clark, the Minister for Cities, has demonstrated what localism can look like and how it can work

    Business Rates Retention – Eric Pickles’s proposals will allow councils, for the first time, to keep a proportion of business rates in their area, giving them greater control of their own funding

    Nick Clegg’s Regional Growth Fund is unleashing local creativity and bringing private sector jobs to parts of the country that need it most

    Patrick McLoughlin is giving local areas a greater say in the major transport schemes that their communities depend on.

    In addition, it has created a framework of Local Enterprise Partnerships to reflect the strengths of both the public and private sector in a context that reflects the local economy, local identity and local pride. There are now 39 LEPs covering England. So, this country has a framework that replicates the strengths of the city states in all our competing economies. It is no longer a case of waiting for London. The army; it now has its fighting divisions. The immediate challenge is to bring them up to strength and to give them the tools to do the job.

    This is already government policy. 20 of the 39 LEPs are now involved or will be involved in City Deals. As the Deputy Prime Minister’s speech on Monday of this week clearly indicates this has the potential of a dynamic national policy. I agree with him. There is no case that these new ideas apply to only a part of the framework the government itself has created. There is no case to argue that part of the country should be helped to surge forward whilst the other half is held back.

    So much for my analysis. Let me turn to some of my proposals and expand on them.

    Making it happen

    I think we need a National Growth Council, chaired by the Prime Minister, should be established, comprised of secretaries of state and outside experts in the model of the National Security Council.

    The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.

    As well as a clear strategy, the government needs the means by which it can deliver it. Far too often Ministers pull the levers, only to find they are connected with elastic. And so initiatives come and go. And a collective cynicism gathers as to the limits of what a government can actually achieve. It breaks inertia.

    But this government is making positive moves.

    It has recruited Paul Deighton fresh from his brilliant achievements in delivering the olympics to manage its infrastructure agenda

    It has pulled the cities work into the Treasury, under the continued leadership of Greg Clark

    The Treasury has sponsorship of the financial services industry.

    The vehicle for implementation thus already exists. The new National Growth Council, would have oversight of the Growth Strategy, and would be responsible for approving the plans of individual departments. Underneath that a shadow Growth Council, under the leadership of the Commercial Secretary to the Treasury, which would bring together Permanent Secretaries of the Whitehall departments.

    Departments

    Each department would be expected to set out its contribution to the growth strategy, including how it will work with the wealth creating sectors it sponsors.

    Many departments do not see that they have a role to play in the growth agenda. A central vision for wealth creation can only be properly achieved when all departments single-mindedly pursue it. Growth can not be led out of the Treasury or the Business Department alone. It requires Whitehall as a whole to sign up.

    It is easy to see how this applies to some departments:

    The improvements in our railways and our airports self-evidently Transport

    The investment in thousands of new homes, DCLG

    The procurement of billions of pounds worth of military equipment at Defence.

    But the link to growth is less obvious elsewhere.

    It’s welfare policies that get people back to work

    The education of our young people, ensuring they have the basic skills to survive in the workplace

    The challenges of keeping an ageing population healthy and independent.

    Non-executive Directors

    Just as local places need private sector input into decisions, to ensure they are consistent with growth, so too does central Government.

    The Non-Executive director network, led by Lord Browne is a strength to be built upon. My plans formalise their role in many ways:

    Non-executive directors should be given an enhanced role within departments

    In addition there should be a NED presence on the National Growth Council

    They should have a strengthened role in the development of departmental business plans, ensuring growth commitments within them go far enough

    They should be able to advise Secretaries of State in the appointment of permanent secretaries

    Crucial to the ability of NEDs to fulfil this expanded role will be two key changes:

    First, and most simply, they need a secretariat to support them in their duties

    Second, they need access to a proper Management Information System.

    Such a system would not only be of use to NEDs as they scrutinise the business of departments, but would be critical to secretaries of state and their permanent secretaries in the running of their departments. All major companies collect and use management and finance data. That ought to be obvious. How can one know what is happening without such a wealth of information at one’s fingertips? A comprehensive management information system will allow departments to see what they do well, what they could do better with more resource, and what they could stop doing.

    Sectoral activity

    All sectors should be offered a formal relationship with government through the most appropriate department. The automobile and aerospace relationships that exist in BIS are good examples. This together with the sponsorship role of UKTI should be extended across departments.

    Our major companies can play a key role in raising the performance of business across Britain. Many of them already do so – nurturing and investing in their supply chains, providing advice, skills and even finance. We need to ask that more of them follow the example of the best.

    The business community is like a rain forest – many smaller companies depend on the canopy that big firms provide. Rolls Royce supports almost 3,000 UK-based suppliers. Jaguar Land Rover; nearly 2,000. Take away the canopy and the infrastructure is exposed to unsustainable threat. It would be a mistake to expect government to focus solely on the start-ups and small firms, even though they provide much of the dynamism and innovation of our economy.

    Government should continue to work with our large and medium-sized companies as well if it is to strengthen our wealth-creating capacity effectively. This requires a deep understanding of business and the capability for a professional dialogue and partnership with business. The civil service culture needs to embrace an experience of the private sector. In this way we can ensure that we have a world-beating public sector which can play its full part in realising our national potential.

    Our cities

    Local Enterprise Partnerships should be given the resource to develop local economic plans. I propose £250,000 for each of them for two years. They should then be invited to use these plans to bid competitively for part of a national single pot of public money, available to them from 2015. The single pot should consist of those parts of current departmental allocations that could support growth. The pot could amount to over £49bn over four years, plus other sources such as European funds. Government needs to set a framework for this competition, a framework in which it sets out its principles and priorities.

    A new government might have different priorities. That is the expression of democratic choice. But change has a price. Investment is long-term. Investors are increasingly internationally mobile. To the extent that a message of consistency and continuity is possible, the more certain is the investment climate.

    We should be able to agree on the need for growth. To seek growth without the enthusiastic partnership of the private sector is a mirage. Different governments may have different priorities for the new wealth, but we must first work together to create it.

    Central government needs to bring together the funding it applies to individual initiatives supporting growth – spending on skills, on local transport infrastructure, on housing and regeneration – and turn them into a single fund which can be put to work with local contributions to support the growth strategies of local communities.

    But government can not simply hand out the money and walk away. Democratic accountability would not allow it. We are talking about a new concept of partnership. As part of that, I believe local government will increasingly need to create simpler structures which are more efficient and easier to deal with. Scotland and Wales moved to a structure of unitary counties decades ago. Many English counties have adopted a unitary structure. Nothing should prevent others from following. In the great cities I welcome the development of conurbation authorities and would welcome the prospect that they should elect a mayor to lead them.

    Local wealth creators

    The Government and the private sector should work together to create a strong, locally based business support infrastructure. Central to this would be a determination to help chambers of commerce attract larger local membership.

    What can government do to help? There are many things government can do which underpin the national economy – setting taxation policy, regulating markets, investing in infrastructure, skills and the research base. It needs to do each of those things excellently and professionally.

    But government cannot advise business on how to grow. For that we need a world class business support infrastructure that is private-sector led, that is accessible in every community, and has deep reach into the business community.

    That is what all our competitors have. I have set out the comparisons in detail in my report:

    The Paris chamber of commerce has 400,000 members. The London chambers have 9,500

    When a German company goes to India, it finds a chamber with 110 staff and 6,000 members

    When a British company goes to India, there is no chamber.

    If we are going to compete in the world’s markets, we need to fill that void. Our chambers of commerce can do it, but we should all help them rise to the game. That means – central government, local government, and – above all – local business. I realise that my proposals to enhance the status and capability of our chambers are controversial. If we intend to galvanise our cities and their communities I see no better way.

    As an annex to my report I publish our findings of the support other competing economies have in place to support their companies.

    I accept the vital role local authorities can play in wealth creation but I believe that they are stronger with private sector partners. The private sector is divided between competing organisations and, added together all of them represent only a fraction of the million or so companies that might benefit from the enhanced services other countries provide and upon whom our export targets depend.

    Government has set up quangos to undertake activities and provide services that could more effectively be private sector and locally led. Let us be frank. Some will say the chambers are not strong enough. My reply is that we should help them – not force them – to acquire that strength not undermine their localism with an ever widening quango world.

    Trade associations

    They can play an important role. But there are over 3,000 of them. There is a need to up their standards. That means rationalisation.

    Deregulation

    Regulation should be carried out in such as way as to have growth at its heart. This means a restructuring of the regulatory regime in this country in order that the economic consequences of regulation are properly thought through. The report includes a number of other proposals.

    Planning

    Our planning system should be injected with the needed urgency to speed up the decision making process. This could include a new power for the planning inspectorate to call in applications after six months. I do not seek to change the nature of those decisions. Rather I seek to inject a degree of urgency into the process.

    Procurement

    There is one particular opportunity which government should grasp to help our companies to compete effectively across the world. Government procurement can be improved by bringing in specialists, and paying them at a rate that is compatible with the private sector.

    Government places £238 billion of contracts with external bodies every year. In 2010, two thirds of those contracts were running over time or over budget or both. That is a national scandal. Not just because of the waste of our hard-earned national wealth. Much worse is the way that culture saps the competitiveness of British business. No company which relies on surviving in that sloppy environment will find it easy to win contracts abroad.

    The Government has started work to drive professionalism into its procurement functions.

    Conclusion

    My report makes 89 recommendations. Some will see them as criticisms and exploit them as such. That is exactly the wrong approach. To invite criticism is a sign of strength. To accept it is a demonstration of confidence.

    We are all too close to the economic crisis. There is opportunity on a grand scale. Is this glass of water before me half full or half empty? It is an attitude of mind. To me it is half full:

    Huge infrastructure demands and hungry institutional funds – link them

    Excellence in industry, commerce and academia – extend it

    England’s cities pulsing with energy – unleash it.

    Every one of us needs to rise to the challenge. There is no more insistent or compelling motive for human kind than the instinct to provide for and protect our children. To feed them, house them, educate them, and give them a start in life with the hope that they will be able to do better than we have done ourselves.

    So let our reaction to this report be judged by the legacy we bequeath to our children and grandchildren. We should earn their appreciation for the legacy they will inherit by the commitment we made.

  • Michael Heseltine – 2007 Speech on the Cities

    The below speech was made by Michael Heseltine on 30th September 2007.

    When parts of our cities erupted in riots a quarter of a century ago, I asked the Prime Minister to release me to walk the streets of Liverpool.

    After three weeks of listening, questioning, it became clear how politically impoverished our great cities had become.

    There was no shortage of opportunities or ideas. What was missing were people willing and able to take responsibility.

    For decades after the Second World War power had shifted remorselessly to London.

    Nationalisation had turned powerful provincial industries into London bureaucracies.

    Inflation and confiscatory taxation had wiped out much of our independent enterprise.

    That same punitive tax regime effectively choked off the ability of the enterprise system to renew and revitalise.

    Takeovers had undermined the independence of large and resourceful companies loyal to our cities. The dependency of the branch office was no substitute for local owners.

    Local government underwent a similar centralising process. As Governments did more, spent more so more control followed the expenditure.

    Those of us who served our party through this period, remember all too well the influence of the Labour Party in this process of centralisation.

    The reversal of this process culminated in the great battles of the 1980’s and 1990’s.

    The return of British industry to the competitive market place.

    Tax levels that enabled enterprise to flourish.

    Council house sales that enfranchised a million families.

    The Trade Unions brought within the rule of law.

    In the longest apology note in political history the Labour Party tore up its historic manifesto, accepted our agenda and pursued our reforms as though they had thought of them in the first place.

    I have perhaps become too tolerant as the years went by.

    But my tolerance is stretched to breaking point as I listen to the announcement of one more Labour initiative, another name change, as yet another Tory idea is relabelled and recycled.

    Today they have learnt a new language.

    But language is no substitute for action.

    When it comes to action they are unable to distinguish between public expenditure and quality of service.

    Every crisis has its new grant, every newspaper headline its ministerial initiative, every cock up its spin.

    Not only do few of these things work, even more insidious is the consequential public disbelief. It is a question of trust. Time and again on my TV screen I hear members of the public say “you can’t believe a word they say”.

    Take education.

    Ten years of Labour Government.

    Ten years at the end of which over one in four of all children in primary schools are unable to read, write, and add up properly.

    And those are the Governments own figures. God knows what the truth is!!

    Ten years of Labour Government and our examination system is so discredited that an increasing number of schools – independent schools which have the freedom to choose – are opting out and moving to internationally respected standards.

    Tony Blair said it in these words Education, Education, Education.

    Gordon Brown is now repeating it.

    Tomorrow, Tomorrow, Tomorrow.

    Translated into Spanish I think that reads Manana, Manana, Manana.

    It is no surprise that Gordon Brown managed to speak for over an hour without once mentioning our inner cities.

    There lies opportunity for our party.

    The renaissance of the enterprise culture in the 80’s and 90’s flowed because we restored freedom to the enterprise society.

    But millions of our fellow citizens work for Government, local authorities, ‘not for profit’ organisations.

    They also long for responsibility and the chance to use their initiative in solving local problems.

    Reforming the public sector remains a huge challenge.

    David Cameron asked my task group for a report on reviving the cities.

    About empowerment of local communities.

    About rebuilding the great powerhouses of provincial England.

    Cities are the centres of human enterprise and endeavour.

    They are the great engines of our economy.

    They can sustain the infinite variety of human talent upon which a sophisticated society depends.

    They provide choice and diversity in academia, the arts, culture, sport, entertainment and the quality of life.

    I have proposed to David a vision for a new partnership.

    Central Government cannot abandon its responsibilities for the proper use of taxpayers money.

    But taxpayers money does not have to be channelled through the quangos of central Government.

    Ten thousand million pounds a year goes through the Housing Corporation, the Regional Development Agencies, English Partnerships and the Learning and skills councils.

    To achieve value tax payers money should recognise local priorities, local initiatives, local ambitions.

    I say this not in any way to criticise the motives, integrity or ability of Whitehall and its civil servants.

    I say it because I don’t believe that there are simple, national solutions to complex and infinitely varied local challenges and opportunities.

    But that is what centralisation does. It creates an intellectual straight jacket.

    Solutions are devised.

    Rules drawn up.

    Circulars issued.

    Guidelines promulgated.

    But Birmingham is not Manchester

    Leeds is not Liverpool

    Bristol is not Coventry

    And none of these cities are Scottish or Welsh.

    If the English tax payer has to pay for the new freedoms of Scotland and Wales there should be choice, diversity, opportunity and, yes, experimentation in the relationship between Whitehall and Town Hall.

    Each city has a different history, different strengths, different opportunities.

    We believe in trust for the people.

    We should also recognise that same spirit of independence in the governance of provincial England.

    We should never forget that the majority of us live in or are affected by what happens in our cities.

    I know of no country like ours that so suffocates its cities. In Europe and the United States they are respected for the great human powerhouses that they are.

    Of course, there are difficult issues to be faced.

    Chief Executives of major cities are paid around £150k to £200k per annum placing then amongst the highest paid in those cities.

    But they are not held to account by local people.

    The leader of the Council works at least the same hours, faces public and press scrutiny, and is paid a fraction of the Chief Executives salary.

    I believe it’s time to combine these two jobs.

    I believe cities should elect leaders held democratically to account every four years.

    The constituency should be the whole city and not a small part of it that is often socially unrepresentative.

    It is tempting in politics to present ideas in the most dramatic and innovative way possible.

    Tempting but misleading.

    Most initiatives are evolutionary not revolutionary.

    I advocate changing the balance. The interests of provincial England were heavier in the scales yesterday than today.

    Indeed we created the greatest empire the world has ever seen at a time when Mancunians proclaimed “what Manchester says today, the rest of England says tomorrow”. There may be an element of controversy in that statement but no one would quarrel with the pride and self confidence it revealed.

    Britain of past centuries thrived, on its dispersed dynamic centres of enterprise and municipal pride.

    The legacy lives on in the majestic buildings, the rich endowments, the museums and art galleries. Too much of that independence has been snuffed out.

    London has become one of the world’s pre-eminent cities.

    Paris maybe more beautiful.

    New York richer.

    Washington more powerful.

    But add history, culture, politics, finance, commerce, sport, music, the arts, and the rule of law… and London has no equal.

    We all gain from this but it creates great pressures on London and the South East.

    Too many in the provinces feel left out. They want their chance to thrive.

    We should offer it to them.

    Let us think about the changes that follow an elected Mayor.

    The first change requires a bonfire of central Government circulars, targets, ring fences and all those hidden persuaders that tighten central Government’s grip.

    Next, we must ask – what powers should a Mayor have?

    First, existing local Government responsibilities such as education, transport, housing, planning, remain.

    Next, policing. Nothing is of greater concern to our citizens than effective policing.

    There are no simple solutions to lawlessness, drunkenness, violence and a range of criminal behaviour.

    But people want these issues tackled. And they want an accountable person in charge.

    Our party has rightfully recognised this. Our policy for the election of local sheriffs to break the Home Office monopoly over the police is an imaginative response.

    Any such new power should be vested in an elected Mayor.

    Next, the huge sums of money spent by Central Government quangos.

    These powers were largely removed from local authorities and should be restored.

    Next, there are imaginative ideas that could enhance local democracy.

    Over my four decades in the House of Commons I was very aware of changing public attitudes to the Health Service.

    There remains overwhelming support for our National Health Service, and great admiration for the men and women who often provide extraordinary service and skill.

    But when things go wrong the scale of the machine, the remoteness of responsibility, the feeling that there are more excuses than answers argues for local not national accountability.

    Next, we should look at the administration of education.

    Study the statistics of crime.

    Examine the background of our prison population.

    You will find educational failure.

    That is the extreme.

    But look at the long-term unemployed. You will find educational failure there too.

    Ask any employer if they can recruit the people they need with adequate education and proper training.

    You will get an emphatic “no”.

    The lost opportunities are immeasurable.

    There are too many overlapping authorities each with a finger in the educational pie.

    A wider education authority could also have responsibility for much of the positive aspects of employment policy.

    Getting people back to work is often about the failures of education.

    In the pursuit of raising national education standards we should empower local people to devise local solutions.

    I have spent too much ministerial time wrestling with local Government finance to believe there are easy or acceptable alternatives.

    But there are changes that are possible.

    Authorities could keep additional business rates created through new development.

    They could have access to the capital bond market with no Government guarantee.

    Finally, we should build on our City Challenge ideas of the 1990’s.

    We proved that if central Government offered to help finance local development plans, then local communities were enthusiastic to respond.

    In every city there are organisations whose interests can coincide. Imaginative leadership can bring them together.

    Such plans would be rewarded on their merits.

    Yes, some cities would get more.

    The others would try harder.

    That is how you drive standards up.

    The simplest example are the housebuilders who will build houses on brown field sites if the public sector first eliminates toxicity from them.

    Such interrelationships are endless.

    Clean-up canals and tourist facilities flourish.

    Specialist universities bring business parks.

    Roads open up development.

    Better environment encourages new jobs.

    It is about building on local strengths, creating communities of self interest, letting people own their cities.

    We all know we have a fight on our hands.

    We have to fight in the cities because we can’t return to Government without their enthusiastic support.

    We know it can be done.

    We control Birmingham, Coventry, Bradford, Trafford, Dudley, Solihull, Walsall and a range of London Boroughs.

    Winston Churchill once famously rallied our country with his exhortation to fight on the beaches, the fields and the streets.

    In very different circumstances and with very different weapons.

    We must fight with ideas.

    We must offer a new, a fairer, an exciting partnership for tomorrow.

    Set the people free.

    Let us start by giving our cities back to the people.