Charles Kennedy – 2003 Speech on the Spending Review

The speech made by Charles Kennedy, the then leader of the Liberal Democrats, at the Social Market Foundation on 15 July 2003.

The central command and control approach has failed Britain. It has failed to promote efficiency and failed to foster fairness.

It’s time for a fresh approach. It’s time that we re-structured Britain’s Government so that it is part of the solution to Britain’s problems, not part of the problem itself.

We have two clear priorities. First to direct investment where it’s needed most. And second to set the people who run our public services free from the dead hand of central government.

This is not about spending less. It’s about saving money where it’s doing little good and redirecting it to where it’s needed most.

We need less spent on subsidies, less spent on central government, less spent on ministers’ pet projects and more on getting real value for our taxes. The money saved should not be handed back in tax cuts. It should be used to spend more on public services.

This process will mean hard choices. It will mean scaling back some Government Departments and their spending programmes in order to free up the money that’s desperately needed for doctors, teachers and police, for better schools, better hospitals, better transport and better protection from crime.

This approach will be at the heart of our plans as we prepare for the next General Election. And it will be this philosophy which distinguishes us most clearly from other parties.

We want to see the most fundamental restructuring of government that there’s been since the Second World War. If we’re going to make a real difference in our hospitals and schools and police stations, we need radically to reshape and slim down central government. The plans that we’re developing would lead to the abolition of at least eight Government departments, with a net reduction in the number of Ministries from nineteen to fourteen and in the number of ministers from over ninety to around sixty.

Let me give you an idea of some of the changes which we’re considering.

First, with the Scottish Parliament and the Welsh Assembly, it’s obvious that the Scotland and Wales Offices have outlived their useful lives. They should be abolished along with the Northern Ireland Office once devolution is complete.

Next there’s the Office of the Deputy Prime Minister – set up mainly to keep John Prescott out of trouble. That should be abolished too.

The remaining functions of all four departments should be subsumed into a Department of the Nations and Regions.

It’s time too to sound the death knell for the old departments set up to defend the interests of producers – departments which have only succeeded in presiding over the decline of the industries which they have tried to serve.

Why not instead have a Department of Consumer Protection and Enterprise?

That would mean axing that corporatist relic, the Department of Trade and Industry. Many of the industrial subsidies which it oversees could be cut. Many more of its functions could be decentralised.

We don’t need a Department for Culture, Media and Sport either. Much of what it does should be decentralised too, with its industry functions going to the Department of Consumer Protection.

Defra could go the same way – with a new department of environment and transport taking responsibility for rural issues.

How much money would this free up?

Altogether, we believe that by both restructuring and slimming down central Government and by cutting back on less productive spending programmes, we can secure significant savings. This will involve some hard choices. We don’t believe that significant amounts of money can be found for education and health simply by cutting out waste and fraud.

I have decided to set a target of finding savings of at least one per cent of total annual government spending to re-allocate to priority areas like education, health and tackling poverty.

One per cent of total government spending is realistic and achievable.

One per cent may sound modest, but it is one per cent, of course, of a very large figure.

By the time of the next Election, one per cent will be equivalent to savings of around five billion pounds a year – enough , for instance to fund over 150,000 extra nurses, teachers and police every year.

Bitter experience has proved that grand schemes to save billions by cutting down the number of paper clips never get anywhere. We are talking about deep and fundamental change. It is a change which goes to the heart of our philosophy as Liberal Democrats – a philosophy which rejects the nanny state in favour of an enabling state – a state which allows individuals to make the most of their lives and their talents.