The speech made by Iain Duncan Smith, the then Leader of the Conservative Party, on 25 June 2002.
Much has happened since I spoke to you nearly a year ago at last year’s annual lunch.
The Two Cities have been at the forefront of the national outpouring of affection and respect for the Queen during her Golden Jubilee celebrations.
In May’s Elections Westminster City Council once again showed how successful Conservatives can be when we deliver high quality, good value local services. Simon Milton and his team have certainly played their part in our local government revival in London.
And in the House of Commons your new MP, Mark Field, has marked himself out as a leading member of that new generation of Conservative MPs that I will make it my business to lead into Government.
Twelve months that would have sounded fanciful. We had just suffered our second devastating defeat in four years.
Yet today, our Party is more disciplined and more united than it has been for a decade.
And Labour, seemingly impregnable back then, have been caught in their own web of intrigue and spin which has seen them lose the trust of the British people.
This is all a very long away from the new dawn in British politics that Tony Blair promised on taking office in 1997 or from the promises he made at the last Election.
How has a Prime Minister who said he would follow the People’s Priorities come to view those he claims to represent with such contempt?
Integrity and politics
The relationship between government and the governed is the cornerstone of democratic politics. It is usually vigorous and sometimes harsh, but when it reaches the point where the Government considers the people it leads as its enemy the very idea of democracy becomes debased.
Whether it is smearing Rose Addis as racist or investigating Pam Warren and the survivors of the Paddington Rail crash for their political affiliations, one thing is clear. This Government believes that anyone who is prepared to speak out and contradict its message that things are in fact getting better, must have a political motive for doing so.
Just last month, a newly-appointed Labour minister – the former Head of the Prime Minister’s Policy Unit summed up Labour’s governing philosophy. He said ‘Third Way triangulation is much better suited to insurgency than incumbency’.
This is a polite way of saying that defining yourself by the people and things you are against instead of what you are for may win elections but isn’t much use when it comes to running the country.
It is because Labour have failed to learn that lesson after more than five years in power, that they go after the likes of Rose Addis and Pam Warren with the venom that they do.
Tony Blair said he would be ‘tough on crime, tough on the causes of crime’, but overall crime has started to rise again and violent crime and street crime are rocketing.
The best David Blunkett can claim of nearly sixty headline-grabbing initiatives on law and order over the past year is that they are not Jack Straw’s.
Tony Blair said ‘education, education, education’ would be their priority, but one in ten students in some inner city areas leave school without a single GCSE and indiscipline has become the standard in too many classrooms.
And the best Estelle Morris can say is that the days of the one-size-fits-all comprehensive are over after David Blunkett abolished Grant Maintained schools.
Tony Blair said Britain had ’24 hours to save the NHS’, but five years later a quarter of a million people are having to pay for operations out of their own pockets because they cannot afford to wait any longer.
And the best Alan Milburn can say about health is that there is now room for partnership with the private sector after boasting that the NHS would remain a state monopoly little more than a year ago.
And where is the Chancellor in all this? He said National Insurance was ‘a tax on ordinary families’ and dismissed claims during the Election that he would increase it as ‘smears’. Ten months later he increased National Insurance by £8 billion while the state of our public services have declined still further.
And the best Gordon Brown can do is to adopt a sphinx-like silence. But New Labour is his project too.
Political discontent and cynicism have been accelerated by five years of a Prime Minister and a Chancellor who neither mean what they say nor say what they mean.
Five years of seeking to be all things to all people.
Five years when Labour’s only tangible achievement is to be neither the Party they once were nor the Government they replaced.
They have poisoned the well for all politicians.
So we cannot sit back and wait for the public disillusionment with Labour to grow. We have to show that the Conservative Party is changing, that we can deliver action not words.
We do not have to stop being Conservative to win the next Election, but we do have to start showing how our principles will deliver solutions to the problems people face.
Some people say it is not the job of the Conservative Party to talk about the vulnerable. I say it is part of our very purpose. It is what brought me into politics. That is why I will never be apologetic about putting the vulnerable at the centre of our strategy.
Today Liam Fox is talking about giving mental illness a much higher priority within the Health Service. One in four people in this country suffer from mental illness of one form or another. It is our nation’s hidden epidemic and yet it is one our society’s last remaining taboos.
There is nothing fashionable about championing the mentally ill, but they are the victims of an old consensus that has let them down.
Too many people with mental illness now languish in prison and the Government plans to detain indefinitely people with personality disorders who have done no harm to others. The mentally ill have a right to be heard and we will give them a voice.
Because it is vulnerable people – the elderly, the sick and the disadvantaged – who suffer most when public policy and public services fail.
We have allowed issues like these to be colonised by Labour for far too long. The paucity of their methods and the poverty of their results can no longer go unchallenged.
But it isn’t good enough for us just to talk the talk, we are going to have to walk the walk. People have to trust our motives, but they have to believe we will deliver.
It is going to fall to us to tackle the problems of crime, failing schools, family breakdown and poor healthcare. Now, as in the past, we will work to give people back control over of their own lives, to direct power away from government to the places and the people who can use it more effectively. That is why I have set up a Unit to head the most wide-ranging review of our policies and our priorities for a generation.
Better schools and hospitals, more responsive local government, means giving teachers, doctors, nurses and councillors the power to do their jobs and making them accountable for what they do.
That is what happens in every other walk of life, it is also what happens in every other country whose standards of public services exceed our own.
If we do these things people will see the difference. It is about putting people before systems, results before theory, and substance before spin. That is the right way to do things, but it is not Labour’s way.
Instead of opening their minds to new ideas all they have done is open our wallets.
The higher taxes announced in the Budget are intended to give us European levels of health spending.
But European spending won’t give us European standards without reform. I was struck by recent figures which showed that the productivity improvements in the NHS before 1997 have been reversed over the last five years.
And Tony Blair and Gordon Brown have shut the door on any serious debate reforming the NHS. Instead, they are simply going to give us higher taxes. That is an expensive recipe for disaster.
In all, taxes will increase by around £8 billion pounds next year, and over half that sum will come from business, the very people who generate the country’s wealth in the first place.
But this is not the first time Gordon Brown has raised taxes.
Pensioners were his first target. In 1997, the Chancellor’s withdrawal of the ACT Dividend Tax Credit landed pension funds and pensioners with a £5 billion a year stealth tax from which they are still reeling.
In 1998, the utility companies had to pay the second half of the £5.2bn windfall tax.
In 1999, the very smallest businesses, personal service companies, first became aware that their vital contribution to the economy was to be attacked with the IR35 tax.
In 2000, hauliers, taxi drivers and every single business reliant on road transport felt the anger of ordinary motorists at the highest taxes on petrol in Europe, culminating in the fuel crisis.
In 2001, right in the middle of a painful manufacturing recession, Labour introduced the Climate Change Levy, a tax on energy which hit manufacturing the hardest.
Finally, in Budget 2002, Gordon Brown announced half a billion pounds of higher National Insurance Contributions for the self-employed and £4bn more for all other businesses, not to mention £3.5bn extra that will now have to be paid by employees.
Regulation and competitiveness
But it’s not just the higher taxes that Labour have levied on business every single year.
There’s the red tape, the Government’s favourite mechanism for getting business and the public services to do what it wants.
Just this morning we hear that GPs are wasting two and half million appointments every year filling in repeat prescriptions and filling out sick notes to satisfy the thirst for bureaucracy.
Businesses will recognise the pattern, as they cope with regulation upon regulation, from new payroll burdens that have turned businesses into unpaid benefits offices, to administrative juggernauts like the Working Time Directive.
In monetary terms, the Institute of Directors calculates that these burdens have cost business a further £6bn every year, but no-one could ever really know the true cost of time which comes from having to fill in forms instead of creating wealth.
And yet, despite all these taxes and all this red tape, Peter Mandelson, the architect of New Labour says, “we’re all Thatcherites now”.
Well I’m a tolerant man and I believe in broad church politics, but I draw the line at heresy.
Mr Mandelson says we all have to accept that globalisation “punishes hard any country that tries to run its economy by ignoring the realities of the market or prudent public finances”.
Quite. So why is Labour ignoring one of the most fundamental realities of the free market: that to be competitive, to win orders and create wealth, you have to keep burdens on business to a minimum.
We have become the fourth richest country in the world because Conservative Governments spent eighteen years freeing labour and capital markets, deregulating key sectors of industry, and slashing red tape and taxes.
Every new regulation and every increase in business taxation introduced by Labour since then has undermined our long-term ability to compete in the global marketplace.
Monetary stability and the Euro
Another feature of the economic legacy that Conservatives passed to this Government was that we won the war against inflation. By 1997, inflation had already been running near to the 2.5% target for four years.
The independence of the Bank of England has helped to reinforce this anti-inflationary environment and credit should be given to Gordon Brown for that measure at least.
The real question now is this: do we want to give up those arrangements in favour of interest rates set by the European Central Bank?
Joining the euro would mean no longer setting interest rates on the basis of what is best for Britain but submitting to a single rate that would benefit the whole of the Eurozone – an impossible task.
The Prime Minister continues to drop hints about a referendum on the single currency next year.
At a time when everyone is concerned about the state of their schools and hospitals, when we feel threatened by the rise in violent crime, he should focus on these issues and stop playing games over the Euro.
Lately there are signs that the Prime Minister is getting cold feet, not because of the five economic tests but because of the only test that really matters to him, the opinion of the public.
He grasps that a referendum on the single currency would also be a referendum on the breakdown of public trust in his Government.
He is caught between the rock of the Pound’s popularity and the hard place of his own desire to scrap the Pound. His lack of conviction about everything else is getting in the way of the only conviction he truly holds. Such are the wages of spin.
If the Prime Minister wants Britain to adopt the Euro, he should have the courage to say so, name a date and let the people of this country decide. If a referendum comes the Conservative Party with me at its head will campaign vigorously to keep the Pound.
We will join with trade unions and businesses, and supporters of all parties and none who believe that replacing the Pound means away giving control over British interest rates, taxes, and public spending. It ultimately means British people giving away control over our politicians too.
So not only will we campaign vigorously for a ‘no’ vote. We will not be alone. The Pound is more popular than any political party, because it doesn’t belong to any one political party. And we will fight to keep it that way.
When Tony Blair entered Downing Street five years ago he had more going for him than any other incoming Prime Minister.
A landslide election victory.
The foundations of economic stability and success laid by his Conservative predecessors.
The goodwill of the overwhelming majority of the British people.
Never has a Government had so much, but achieved so little.
With no fixed idea of who they are, they have chosen to define themselves by how they look. And the truth is after five years of lies and spin they are beginning to look pretty shoddy.
They are no more capable of effective leadership to tackle the issues that undermine our society today than they were of grasping the economic reforms that were necessary in the 1980s.
Whether it is raising standards in our schools and returning civility to our classrooms; restoring the rule of law to our streets; or dealing with the insecurities of infirmity and old age, it falls the Conservative Party to lead the way once more.
That means fresh thinking and new ideas on education and health, on crime and policing, on finding new ways for people to share in economic growth.
It means taking every opportunity to show ourselves as we really are: decent, tolerant and generous people who want the country we live in to be a better place for everyone.
Above all it means showing that the difference between the Third Way and the right way is the difference between promises and delivery.
We all know this in our hearts. Our job is to earn the right to prove it.